EMPLOYMENT AGREEMENT
This Employment agreement (the "Agreement") is dated as of May 18, 2004 and
between Power 3 Medical Products, Inc., a New York corporation (the "Company"),
and Xx. Xxx Xxxxxxxxx (the "Officer").
RECITALS
The Company is a breakthrough proteomics company specializing in the
identification of disease footprints in the areas of chemotherapeutic drug
resistance and the early detection of breast cancer and neurological diseases
throughout North America (the "Territory"). The Company desires to employ
Officer, and the Officer desires to accept such employment, on the terms and
subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements herein provided, the parties hereto agree as follows:
1. EMPLOYMENT TERMS
1.1 Term. The Company hereby employs the Officer, and the Officer hereby
accepts employment with the Company, all in accordance with the terms and
conditions hereof, for a term commencing on May 18, 2004 and terminating on May
17, 2009. However, the Officer shall be considered to be employed by the Company
beyond the Termination Date for purposes of receiving certain benefits conferred
under this Agreement, as described in Section 3.1 hereof.
1.2 Position and Duties.
(a) The Company hereby employs the Officer, and the Officer agrees to serve
the Company, as an officer of the Company pursuant to the terms of this
Agreement. The Company has by action of its Board of Directors appointed the
Officer to the position of Chief Scientific Officer, however it may, in the sole
and unfettered discretion of the Board of Directors, amend the Officer's title
and/or duties and responsibilities, provided that the Officer remains an officer
of the Company pursuant to the terms of this Agreement.
(b) The Officer shall be responsible for such duties as are commensurate
with the office in which he serves and as may from time to time be assigned to
the Officer by the Company's Board of Directors.
1.3 Performance of Duties.
(a) At all times prior to the Termination Date, the Officer (i) shall
devote his full business time, energies, best efforts, and attention to the
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business of the Company, (ii) shall faithfully and diligently perform the duties
of his employment with the Company, (iii) shall do all reasonably in his power
to promote, develop, and extend the business of the Company, and (iv) shall not
enter into the service of, or be employed in any capacity or for any purpose
whatsoever by, any person, firm or corporation other than the Company without
the prior written consent of the Board of Directors of the Company.
(b) The Officer shall perform his duties in accordance with all applicable
laws, rules, or regulations that apply to the Company and/or its business,
assets (real or personal), or employees.
2. COMPENSATION.
2.1 Salary.
(a) For so long as Officer is employed by the Company, the Company agrees
to pay to the Officer, and the Officer shall accept from the Company, for all of
his services rendered pursuant to this Agreement, a salary of (One hundred
twenty-five thousand dollars) $125,000 per annum, payable semimonthly.
(b) The Company's Board of Directors, or compensation committee shall
review the Officer's salary annually and merit increases thereon shall be
considered and may be approved, in the sole and unlimited discretion be reviewed
annually by the Company's Board of Directors, and merit increases thereon shall
be considered and may be approved, in the sole and unlimited discretion of the
Company's Board of Directors, depending in part on the profits and cash flow of
the Company. If the Company's Board of Directors or Compensation Committee
elects in its discretion to increase the salary of the Officer at any time or
from time to time, the new salary rate shall, without further action by the
Officer or the Company, be deemed substituted for the amount set forth above. At
such time, this Agreement shall be deemed amended accordingly (notwithstanding
the provisions of Paragraph 5.7 below), and, as so amended, shall remain in full
force and effect.
2.2 Bonuses. The Company, in the sole and unfettered discretion of its
Board of Directors or Compensation Committee, may from time to time award cash
bonuses to the Officer based upon its measure of Officer's performance. Such
bonuses may be awarded in a lump sum or may be conditioned upon the future
performance or employment of Officer, in the sole and unfettered discretion of
the Board of Directors of the Company.
2.3 Expenses. Upon submission of appropriate invoices or vouchers, the
Company shall pay or reimburse the Officer for all reasonable expenses incurred
by the Officer in the performance of his duties hereunder in furtherance of the
business of the Company.
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2.4 Benefits. The Company extends to the Officer the right to participate
in whatever employee benefit plans (excluding any employee benefit plan covered
separately in this Agreement) may be in effect from time to time, to the extent
the Officer is eligible under the terms of the plans. However, no employee
benefits other than those specifically conferred by the terms of this Agreement
have been promised to the Officer in connection with this employment. The
adoption of one or more employee benefit plans, the terms of the plans, and the
Officer's participation in the plans, if any, are in the sole discretion of the
Company and may be changed by the Company at any time and from time to time.
2.5 Stock Grant.
To induce the Officer to accept the position of Chief Scientific Officer,
the Officer has granted from the Company Thirteen Million Two Hundred Fifty
Thousand (13,250,000) shares of common stock and One Million Five Hundred
Thousand (1,500,000) Series B preferred stock shares.
The shares represented by this certificate are subject to, and transferable
only upon compliance with, all of the terms and conditions of the Articles of
Incorporation of the issuing corporation, a copy of which is on file at the
principal office of the issuing corporation.
2.6 Vacation; Sick Leave. The Company's vacation and sick leave policy has
been established by the Company and may be changed by the Company at any time
and from time to time. Said policy is published in separate data files
accessible to the Officer. The Officer will not be entitled to receive payment
for any unused sick leave either during employment or upon termination of
employment.
2.7 Withholding. The Company may withhold from any amounts payable under
this Agreement any and all federal, state, city, or other taxes or other amounts
required to be withheld by any applicable law.
3. TERMINATION.
3.1 Termination Upon 30 Days Notice.
(a) Either party may terminate the Officer's employment under this
Agreement for any reason whatsoever, either with or without cause, upon giving
the other party no less than thirty (30) days prior written notice of such
termination ( the "Notice Date"). The effective date of a termination pursuant
to this Paragraph 3.1 shall be such termination date as stated on the notice,
provided that the termination date can be no earlier than the 31st day following
the day the notice becomes effective pursuant to Paragraph 5.4 below (the
"Termination Date").
(b) Until the expiration of the contract on April 30, 2009 ("Transition
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Period"), unless terminated for "Cause" as defined in section 3.4 or if the
Officer resigns from his position or duties, the Officer will continue to be
considered as an employee of the Company only for the purpose of receiving the
compensation and benefits awarded in Sections 2.1, 2.2, 2.4, and 2.5 hereof.
More specifically, for the duration of Transition Period the Officer (i) shall
continue to receive his salary at the rate in effect as of the Notice Date, (ii)
shall continue to be considered an employee of the Company for purposes of
determining eligibility to receive any contingent or deferred bonuses awarded to
the Officer prior to the Termination Date, (iii) shall continue to be considered
an officer of the Company for purposes of vesting in Stock Options, and (iv)
shall, to the extent allowed by such plan, remain eligible to participate in any
benefit plan of the Company in which the Officer participates as of the Notice
Date.
(c) Notwithstanding any provision herein to the contrary, however, the
Officer will not be entitled to act as, or represent himself to be, an officer
or employee of the Company following the Termination date and will not be
entitled to receive or participate in any bonus, incentive, or benefit program,
involving stock or otherwise, that is established following the Termination
Date.
3.2 Termination by Mutual Consent. The Officer and the Company may at any
time terminate the employment of the Officer under this Agreement by mutual
consent in writing upon the terms and conditions stated in such writing.
3.3 Termination Upon Death. If the Officer dies, his employment shall
immediately terminate automatically as of the date of his death. In such event,
the Officer shall be treated as if he had terminated his employment with the
Company under the terms of Section 3.1 above, with the date of his death serving
as both the Notice Date and the Termination Date.
3.4 Termination for Cause. This Agreement may be terminated for Cause by
either party for the following reasons, only:
3.4.a.1 Commission of a criminal offense by either party in
the course of performance of the Agreement shall entitle the
other to effect immediate termination upon giving written
notice;
3.4.a.2 If either party becomes insolvent or makes a general
assignment for the benefit of creditors or if petition in
bankruptcy is filed against the defaulting party and is not
discharged or disputed within five (5) working days of such
filing or of the agent is adjudicated bankrupt or insolvent;
3.4.a.3 The election of one party (the "aggrieved party") to
terminate this Agreement upon (1) the actual breach or
actual default by the other party in the reasonable
performance of the defaulting party's obligations and duties
under this Agreement and (2) the failure of the defaulting
party to cure the same within fifteen (15) days (the "cure
period") after receipt by the defaulting party of a good
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faith written notice from the aggrieved party specifying
such breach or default and (3) provided that the defaulting
party has not cured the default and the aggrieved party may
then give written notice to defaulting party of his or its
election to terminate ten (10) days after expiration of the
cure period.
3.5 Change of Control. Officer shall make a good faith effort to aid in the
change of control necessitated by the termination of this agreement. To the
extent feasible and/or practical, Officer shall devote the time and energy
necessary to effect said goal of a smooth change of control for the successor
chief scientific officer. All compensation due Officer by the Company under this
contract of any type shall be vested and received, to the extent practicable, by
Officer, upon initiation of the change of control period.
4. PROPRIETARY INFORMATION AND ITEMS.
4.1 Acknowledgments. The Officer acknowledges that (a) the Officer has or
will be afforded access to Proprietary Information of the Company or its
affiliates; (b) public disclosure of such Proprietary Information could have an
adverse effect on the Company and its affiliates; and (c) the provisions of this
Section 4 are reasonable and necessary to prevent the improper use or disclosure
of such Proprietary Information.
4.2 Non-Disclosure and Non-Use of Proprietary Information. During the
Officer's employment by the Company and for a period of five (5) years
thereafter, the Officer covenants and agrees that the Officer (a) shall not
disclose to others or use for the benefit of himself or others, any of the
Company's Proprietary Information, except that the Officer may disclose such
information (i) in the course of and in furtherance of the Officer's employment
with the Company to the extent necessary for the benefit of the Company, (ii)
with the prior specific written consent of the Board of Directors of the
Company, or (iii) to the extent required by law; and (b) shall take all measures
reasonably necessary to preserve the confidentiality of all Proprietary
Information of the Company known to the Officer, shall cooperate fully with the
Company's or its affiliates' enforcement of measures intended to preserve the
confidentiality of all Proprietary Information, and shall notify the Board of
Directors immediately upon receiving any request for, or making any disclosure
of, any Proprietary Information from or to any person other than an officer or
employee of the Company or of one of its affiliates who has a need to know such
information.
4.3 Proprietary Information. For purposes of this Agreement, "Proprietary
Information" means trade secrets, secret or confidential information or
knowledge pertaining to, or any other nonpublic information pertaining to the
business or affairs of the Company or any of its affiliates, including without
limitation, medical imaging software programs (including source code and object
code) and design documentation; identities, addresses, backgrounds, or other
information regarding customers, potential customers, employees, contractors, or
sources of referral; marketing plans or strategies, business or personnel
acquisition plans; pending or contemplated projects, ventures, or proposals;
financial information (including historical financial statements; financial,
capital, or operating budgets, plans or projections; historical or projected
sales, and the amounts of compensation paid to employees and contractors); trade
secrets, know-how, technical processes, or research projects; and notes,
analysis, compilations, studies, summaries, and other material prepared by or
for the Company containing or based, in whole or in part, on any information
included in the foregoing, except information that is generally known in the
industry (other than as a result of a disclosure by the Officer).
4.4 Proprietary Items. Upon termination or expiration of the Officer's
employment by the Company for any reason or by either party, or upon the request
of the Company during such tenure, the Officer will immediately return to the
Company all Proprietary Items in the Officer's possession or subject to the
Officer's control, and the Officer shall not retain any copies, abstracts,
sketches, or other physical embodiment of any Proprietary Items. For purposes of
this Agreement, "Proprietary Items" means all documents and tangible items
(including all customer lists, memoranda, books, papers, records, notebooks,
plans, models, components, devices, or computer software or code, whether
embodied in a disk or in any other form) provided to the Officer by the Company,
created by the Officer, or otherwise coming into the Officer's possession for
use in connection with is engagement with the Company or otherwise containing
Proprietary Information (whether provided or created during the term of this
agreement or prior thereto).
4.5 Ownership Rights. The Officer recognizes that, as between the Company
and the Officer, all of the Proprietary Information and all of the Proprietary
Items, whether or not developed by the Officer, are the exclusive property of
the Company. The Officer agrees that all intellectual property of every kind,
including without limitation copyright, patent, trademarks, trade secrets, and
similar rights, created or developed or realized in connection with the
Officer's performance of any duties or functions as an Officer of the Company
(collectively, the "Intellectual Property") shall be the exclusive property of
the Company and shall constitute Proprietary Information. The Officer hereby
assigns unto the Company all rights, title, and interest that the Officer may
have to such Intellectual Property and each and every derivative work thereof,
and agrees to execute, acknowledge, and deliver to the Company as assignment to
the Company of any right, title, or interest of the Officer in any and all such
Intellectual Property, in such form as may be reasonably requested by the
Company.
4.6 Disputes of Controversies.The Officer recognizes that, should a dispute
or controversy arising from or relating to this portion of the Agreement
(Section 4) be submitted for adjudication to any court, arbitration panel, or
other third party, the preservation of the secrecy of Proprietary Information
may be jeopardized. The Officer agrees that he will use best efforts to ensure
that all pleadings, documents, testimony, and records relating to any such
adjudication will be maintained in secrecy.
5. NON-INTERFERENCE; COMPLIANCE WITH LAW; COOPERATION
5.1 Non-Interference. During the Officer's employment with the Company and
for a period of five (5) years following termination or expiration of such
tenure, the Officer covenants and agrees that the Officer shall not, directly or
indirectly, for the benefit of the Officer or another (a) persuade or attempt to
persuade any employee, independent contractor, consultant, agent, supplier, or
distributor of the Company or of any affiliate of the Company to discontinue
such person's relationship with the Company or the affiliate; (b) hire away or
solicit to hire away from the Company or from any of its affiliates any
employee; (c) otherwise engage or seek to engage any employee or independent
contractor of the Company or of any of its affiliates in a business relationship
that would or might conflict with such employee's or independent contractor's
obligations to the Company or affiliate; (d) interfere with the Company's or any
of its affiliates' relationship with any governmental or business entity,
including payor, supplier, lender, or contractor of the Company or the
affiliate; or (e) disparage the Company or any of its affiliates or any of the
shareholders, directors, officers, employees, or agents of any of them.
5.2 Cooperation. During the Officer's Employment with the Company and for a
period of five (5) years following the termination or expiration of such tenure,
the Officer agrees to cooperate with the Company and its affiliates in
connection with any litigation or investigation involving the Company or any of
its affiliates or any of the shareholders, directors, officers, employees, or
agents of any of them and shall furnish such information and assistance as may
be lawfully requested by the Company.
6. NON-COMPETITION
During the Officer's employment by the Company and for a period of two (2)
years following the termination or expiration of such tenure, the officer
covenants and agrees to refrain from carrying on or engaging in a business
similar to that of the Company, and from soliciting customers of the Company,
within the North America, so long as the Company carries on a like business
therein. It is further stipulated that as forbearance for this contract term,
Company has provided Officer with separate and distinct consideration of not
less than 25,000 shares of common stock.
Each word of the foregoing provision is severable.
7. GENERAL PROVISIONS
7.1 Indemnification. The Company hereby agrees to indemnify and hold
harmless the Officer from and against any and all losses, claims, damages,
expenses and/or liabilities which may incur arising out of the normal course of
business in carrying out the duties and responsibilities associated with the
position of Chief Scientific Officer arising from the Officer's reliance upon
and approved use of information, reports and data furnished by and
representations made by the Company, with respect to itself, where the Officer
in turn distributes and conveys such information, reports and data to the public
in the normal course of representing the Company. Such indemnification shall
include, but not be limited to, expenses (including all attorney's fees),
judgments, and amounts paid in settlement actually and reasonably incurred by
Officer in connection with an action, suit or proceeding brought against the
Company or Officer.
7.2 Injunctive Relief. The Officer acknowledges that the injury that would
be suffered by the Company as a result of a breach of the provisions of this
Agreement would be largely irreparable and that an award of monetary damages to
the Company for such a breach would be an inadequate remedy. The Company will
have the right, in addition to any other rights it may have (including the right
to damages that the Company may suffer), to obtain injunctive relief to restrain
any breach or threatened breach or otherwise to specifically enforce any
provision of this Agreement, and the Company will not be obligated to post bond
or other security in seeking such relief. The Officer agrees to request neither
bond nor security in connection with any such injunction. The Officer agrees
that if he breaches this Agreement, the Officer shall be liable for any
attorney's fees and costs incurred by the Company in enforcing its rights under
this Agreement.
7.3 Essential, Independent, and Surviving Covenants.
(a) The parties agree that the covenants by the Officer in Sections 4, 5,
and 6 are essential elements of this Agreement, and without the Officer's
agreement to comply with such covenants, the Company would not have entered into
this Agreement.
(b) The Officer's covenants in Sections 4, 5, and 6 are independent
covenants and the existence of any claim by the officer against the Company
under this Agreement or otherwise will not excuse the Officer's breach of any
covenant in Section 4, 5, or 6.
(c) After the Officer's employment by the Company is terminated, this
Agreement will continue in full force and effect as is necessary or appropriate
to enforce the covenants and agreements of the Officer in Sections 4, 5, and 6.
7.4 Binding Effect; Benefits; Assignment. This Agreement shall inure to the
benefit of, and shall be binding upon, the parties hereto and their respective
successors, assigns, heirs, and legal representatives. Insofar as the Officer is
concerned, this contract, being personal, cannot be assigned other than by will
or the laws of descent and distribution.
7.5 Notices. All notices and other communications which are required or
permitted hereunder shall be in writing and shall be sufficient if mailed by
certified mail, postage prepaid, and shall be effective three days after such
mailing or upon delivery, whichever is earlier, to the following addresses or
such other address as the appropriate party may advise each other party hereto:
If to the Officer:
Xx. Xxx Xxxxxxxxx
00 Xxxxxxxx
Xxx Xxxxxxxxx, XX 00000
If to the Company:
Power 3 Medical Products, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Copy to:
Xxxxxxxx and Solomon, PLLC
0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxxx
7.6 Entire Agreement. This Agreement contains the entire agreement between
the parties hereto and supersedes all prior agreements and understandings, oral
or written, between the parties hereto with respect to the subject matter
hereof.
7.7 No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the Company, the Officer, and
their respective successors and permitted assigns, other than as expressly set
forth in this Agreement.
7.8 Amendments and Waivers. Except as set forth in Paragraph 2.1(b) above,
this Agreement may not be modified or amended except by an instrument or
instruments in writing signed by the party against whom enforcement of any such
modification or amendment sought. Either party hereto may, by an instrument in
writing, waive compliance by the other party with any term or provision of this
Agreement on the part of such other party hereto to be performed or complied
with. The waiver by any party hereto of a breach of any term or provision of
this Agreement shall not be construed as a waiver of any subsequent breach. No
delay or failure by either party in exercising any right under this Agreement,
and no partial or single exercise of that right, shall constitute a waiver of
that or any other right.
7.9 Headings. The paragraph headings contained in this Agreement are for
reference purposes only and shall not be deemed to be a party of this Agreement
or to control or affect the meaning or construction of any provision of this
Agreement.
7.10 Construction. The language used in this Agreement will be deemed to be
the language chosen by the Company and the Officer to express their mutual
intent, and no rule of strict construction shall be applied against either
party.
7.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
7.12 Severability. If any term or provision of this Agreement is held or
deemed to be invalid or unenforceable, in whole or in part, by a court of
competent jurisdiction, this Agreement shall be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement.
7.13 Expenses and Attorney's Fees. In the event that a dispute arises under
this Agreement that results in litigation or arbitration, the prevailing party,
as determined by the decision of a court or forum of competent and final
jurisdiction, shall be entitled to court costs and reasonable attorney's fees. A
court or forum of "final" jurisdiction shall mean a court of forum from which no
appeal may be taken or from whose decree, decision, judgment, or order no appeal
is taken or prosecuted.
7.14 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to the conflict
of laws principles thereof.
7.15 Agreement Preparation. The Officer acknowledges that this Agreement
has been prepared by counsel for the Company, and the Officer has not relied on
any representation made by the Company's attorneys. The Officer has engaged an
attorney of his choice to review this agreement on his behalf. By signing this
employment agreement, officer is hereby certifying that officer (a) received a
copy of this agreement for review and study before executing it; (b) read this
agreement carefully before signing it; (c) had sufficient opportunity before
signing the agreement to ask any questions officer had about the agreement and
received satisfactory answers to all such questions; and (d) understands
officer's rights and obligations under the agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Employment
Agreement as of the date first written above.
OFFICER:
_________________________________
Xx. Xxx Xxxxxxxxx
COMPANY:
Power 3 Medical Products, Inc.
By:_______________________________
Xxxxxx X. Xxxx
Chief Executive Officer
