EXECUTIVE EMPLOYMENT AGREEMENT
This
EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) dated August 14, 2006 by and
between bioMETRX, Inc., a company incorporated under the laws of Delaware (the
“Company”), and Xxxxxxxx Xxxxx, an individual (the “Executive”).
WHEREAS,
the Company, through its Board of Directors (the “Board”), considers the
maintenance of competent and experienced officers to be essential to its long
term success; and
WHEREAS,
the Executive has been and continues to be a valuable employee of the Company;
and
WHEREAS,
the Board believes it is in the Company’s and its shareholders’ best interests
to retain the services of the Executive; and
WHEREAS,
the Company and Executive desire to enter into an agreement to provide for
the
Executive’s employment by the Company upon the terms and conditions set forth in
this Agreement.
NOW
THEREFORE, in consideration of the foregoing facts and mutual agreements set
forth below, the parties, intending to be legally bound, agree as
follows:
1. Employment.
The
Company hereby agrees to employ Executive, and Executive hereby accepts such
employment and agrees to perform Executive’s duties and responsibilities in
accordance with the terms and conditions hereinafter set forth.
1.1 Duties
and Responsibilities.
Executive shall serve as Chief Operating Officer. During the Employment Term,
Executive shall perform all duties and accept all responsibilities incident
to
such position and other appropriate duties as may be assigned to Executive
by
the Company’s Board of Directors from time to time. Executive shall also serve
as a director of the Company if requested by the Company’s Board of Directors
and as an officer of one or more of the Company’s subsidiaries without any
additional compensation. The Company shall retain full direction and control
of
the manner, means and methods by which Executive performs the services for
which
he is employed hereunder and of the place or places at which such services
shall
be rendered.
1.2 Employment
Term.
The
initial term of employment shall be for a period of three (3) years commencing
as of the date of this Agreement. After the initial term, this Agreement shall
be automatically extended for additional one year terms on the annual
anniversary date of this Agreement, unless either the Company, through its
Board, or the Executive gives contrary written notice (the “Non-Renewal Notice”)
to the other not less than three (3) months in advance of such anniversary
date.
References herein to the term of this Agreement, as amended, shall refer to
both
such initial term and such successive terms.
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1.3 Extent
of Service.
During
the Employment Term, Executive agrees to use Executive’s best efforts to carry
out the duties and responsibilities under Section 1.1 hereof and to devote
substantially all Executive’s business time, attention and energy thereto.
Executive further agrees not to work either on a part-time or independent
contracting basis for any other business or enterprise during the Employment
Term without the prior written consent of the Company’s Board of Directors (the
“Board”), which consent shall not be unreasonably withheld.
1.4 Compensation.
The
Company shall pay the Executive a base annual salary hereunder of:
$150,000
through December 31, 2006
$175,000
for calendar year 2007
$200,000
for the remainder of the term of this Agreement
payable
in equal semi-monthly installments or at such other intervals as shall be agreed
upon by the parties. The Executive’s compensation will be automatically
increased in the 2007 calendar year to $200,000 upon the Company achieving
$10
million in revenues and $250,000 during the last year of the term upon the
Company achieving revenues of $15 million. The Executive shall be entitled
to
receive, as additional compensation, .05% of net proceeds should the company
exceed $10,000,000 in revenue in any 12 month period. The Executive’s base
annual salary may be increased from time to time as determined by the Board,
and, if so increased, such base annual salary shall not thereafter, during
the
Executive’s employment under the Agreement, be decreased, and the obligation of
the Company hereunder to pay the Executive’s base annual salary shall thereafter
relate to such increased base annual salary.
1.5 Car
Allowance.
The
Company shall provide to the Executive a car allowance of not less than $750.00
per month during the term of this Agreement.
1.6 Stock
Options.
Upon
signing this Agreement, the Executive shall be granted stock options to purchase
up to 600,000 shares of the Company’s common stock at the following prices and
subject to the vesting schedule set froth below:
|
Number
of Shares
|
Exercise
Price
|
Vesting
|
|
200,000
|
$1.00
|
Immediately
|
|
200,000
|
$1.25
|
Immediately
|
|
200,000
|
$1.50
|
Immediately
|
Each
option shall be exercisable for a term of five (5) years from the date of this
Agreement, shall contain a cashless exercise provision and shall be issued
pursuant to the Company’s Equity Incentive Plan (“Plan”). In the event this
Agreement is terminated for cause or if the employee terminates this Agreement
pursuant to Section 4.4, any unexercised options will be immediately
cancelled.
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1.7 Stock
Bonus.
Upon
execution of this Agreement, the Company shall issue the Executive as a bonus
150,000 shares of the company’s common stock, such shares are to be issued
pursuant to the Company’s Plan.
1.8 Other
Benefits.
During
the Employment Term, Executive shall be entitled to participate in all employee
benefit plans and programs made available to the Company’s senior level
executives as a group or to its employees generally, as such plans or programs
may be in effect from time to time (the “Benefit Coverages”), including, without
limitation, medical, dental, hospitalization, short-term and long-term
disability and life insurance plans, accidental death and dismemberment
protection and travel accident insurance. Executive shall be provided office
space and staff assistance appropriate for Executive’s position and adequate for
the performance of his duties.
1.9 Reimbursement
of Expenses: Vacation.
Executive shall be provided with reimbursement of expenses related to
Executive’s employment by the Company on a basis no less favorable than that
which may be authorized from time to time by the Board, in its sole discretion,
for senior level executives as a group. Executive shall be entitled to vacation
and holidays in accordance with the Company’s normal personnel policies for
senior level executives, but not less than four (4) weeks of vacation per
calendar year, provided Executive shall not utilize more than ten (10)
consecutive business days without the express consent of the Board of Directors.
Unused vacation time will be forfeited as of December 31 of each calendar year
of the Employment Term.
1.10 No
Other Compensation.
Except
as expressly provided in Sections 1.4 through 1.8, Executive shall not be
entitled to any other compensation or benefits.
2. Confidential
Information.
Executive recognizes and acknowledges that by reason of Executive’s employment
by and service to the Company before, during and, if applicable, after the
Employment Term, Executive will have access to certain confidential and
proprietary information relating to the Company’s business, which may include,
but is not limited to, trade secrets, trade “know-how,” product development
techniques and plans, formulas, customer lists and addresses, financing
services, funding programs, cost and pricing information, marketing and sales
techniques, strategy and programs, computer programs and software and financial
information (collectively referred to as “Confidential Information”). Executive
acknowledges that such Confidential Information is a valuable and unique asset
of the Company and Executive covenants that he will not, unless expressly
authorized in writing by the Company, at any time during the course of
Executive’s employment use any Confidential Information or divulge or disclose
any Confidential Information to any person, firm or corporation except in
connection with the performance of Executive’s duties for the Company and in a
manner consistent with the Company’s policies regarding Confidential
Information. Executive also covenants that at any time after the termination
of
such employment, directly or indirectly, he will not use any Confidential
Information or divulge or disclose any Confidential Information to any person,
firm or corporation, unless such information is in the public domain through
no
fault of Executive or except when required to do so by a court of law, by any
governmental agency having supervisory authority over the business of the
Company or by any administrative or legislative body (including a committee
thereof) with apparent jurisdiction to order Executive to divulge, disclose
or
make accessible such information. All written Confidential Information
(including, without limitation, in any computer or other electronic format)
which comes into Executive’s possession during the course of Executive’s
employment shall remain the property of the Company. Except as required in
the
performance of Executive’s duties for the Company, or unless expressly
authorized in writing by the Company, Executive shall not remove any written
Confidential Information from the Company’s premises, except in connection with
the performance of Executive’s duties for the Company and in a manner consistent
with the Company’s policies regarding Confidential Information. Upon termination
of Executive’s employment, the Executive agrees to return immediately to the
Company all written Confidential Information (including, without limitation, in
any computer or other electronic format) in Executive’s possession.
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3. Non-Competition;
Non-Solicitation.
3.1 Non-Compete.
The
Executive hereby covenants and agrees that during the term of this Agreement
and
for a period of one year following the end of the Employment Term, the Executive
will not, without the prior written consent of the Company, directly or
indirectly, on his own behalf or in the service or on behalf of others, whether
or not for compensation, engage in any business activity, or have any interest
in any person, firm, corporation or business, through a subsidiary or parent
entity or other entity (whether as a shareholder, agent, joint venturer,
security holder, trustee, partner, consultant, creditor lending credit or money
for the purpose of establishing or operating any such business, partner or
otherwise) which is competitive with the then existing business of Company
being
conducted in the Covered Area, as defined hereinbelow. For the purpose of this
Section 3.1, “Covered Area” shall mean all geographical areas of the United
States and foreign jurisdictions where Company then has offices and/or sells
its
products directly or indirectly through distributors and/or other sales agents.
Notwithstanding the foregoing, the Executive may own shares of companies whose
securities are publicly trades, so long as such securities do not constitute
more than one percent (1%) of the outstanding securities of any such
company.
3.2 Non-Solicitation.
The
Executive further agrees that as long as the Agreement remains in effect and
for
a period of one (1) year from its termination, the Executive will not divert
any
business of the Company and/or its affiliates or any customers or suppliers
of
the Company and/or the Company’s and/or its affiliates’ business to any other
person, entity or competitor, or induce or attempt to induce, directly or
indirectly, any person to leave his or her employment with the
Company.
3.3 Remedies.
The
Executive acknowledges and agrees that his obligations provided herein are
necessary and reasonable in order to protect the Company and its affiliates
and
their respective business and the Executive expressly agrees that monetary
damages would be inadequate to compensate the Company and/or its affiliates
for
any breach by the Executive of his covenants and agreements set forth herein.
Accordingly, the Executive agrees and acknowledges that any such violation
or
threatened violation of this Section 3 will cause irreparable injury to the
Company and that, in addition to any other remedies that may be available,
in
law, in equity or otherwise, the Company and its affiliates shall be entitled
to
obtain injunctive relief against he threatened breach of this Section 3 or
the
continuation of any such breach by the Executive without the necessity of
proving actual damages.
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4. Termination.
4.1 By
Company.
The
Company, acting by duly adopted resolutions of the Board of Directors, may,
in
its discretion and at its option, terminate the Executive’s employment with or
without Cause, and without prejudice to any other right or remedy to which
the
Company or Executive may be entitled at law or in equity or under this
Agreement. In the event the Company desires to terminate the Executive’s
employment without Cause, the Company shall give the Executive not less than
thirty (30) days advance written notice. Termination of Executive’s employment
hereunder shall be deemed to be “for Cause” in the event that Executive violates
any provisions of this Agreement, is guilty of any felony or an act of
embezzlement, is guilty of willful misconduct or gross neglect,
misappropriation, concealment or conversion of any money or property of the
Company or gross dereliction of his duties hereunder or refuses to perform
his
duties hereunder after notice of such refusal to perform such duties or
directions was given to Executive by the Board of Directors.
4.2 Involuntary
Termination.
“Involuntary Termination” shall mean (i) the assignment to Executive of any
duties or the significant reduction of Executive’s duties, either of which is
materially inconsistent with Executive’s position with the Company and
responsibilities in effect immediately prior to such assignment, or the removal
of Executive from such position and responsibilities; (ii) a material reduction
by the Company in the compensation of Executive, without the Executive’s written
consent, as in effect immediately prior to such reduction; (iii) a material
reduction by the Company in the kind or level of benefits to which Executive
is
entitled immediately prior to such reduction with the result that Executive’s
overall benefits package is significantly reduced; (iv) the relocation of
Executive to a facility or a location outside the United States on a permanent
basis; (v) any termination of Executive by the Company which is not effected
for
Misconduct, Cause or as a result of a Non Renewal Notice given by the Company
or
Executive, or any purported termination for Misconduct or Cause for which the
grounds relied upon are determined by a court of competent jurisdiction not
to
be valid, unless Executive, following such purported termination, receives
all
compensation, including vesting of all unvested stock options and restricted
stock within five business days of such determination, or (vi) the termination
by Executive for Company’s violation of any material provision of this
agreement, unless the grounds relied upon are determined by a court of competent
jurisdiction not to be valid.
4.3 By
Executive’s Death or Disability.
This
Agreement shall also be terminated upon the Executive’s death and/or a finding
of permanent physical or mental disability, such disability expected to result
in death or to be of a continuous duration of no less than twelve (12) months,
and the Executive is unable to perform his usual and essential duties for the
Company.
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4.4 Voluntary
Termination.
Executive may voluntarily terminate the Employment Term upon sixty (60) days’
prior written notice for any reason; provided, however, that no further payments
shall be due under this Agreement in that event except that Executive shall
be
entitled to any benefits due under any compensation or benefit plan provided
by
the Company for executives or otherwise outside of this Agreement.
4.5 Compensation
on Termination.
(a) Cause
or Misconduct.
In the
event the Company terminates Executive for Cause or Misconduct, Executive shall
not be entitled to any compensation other than Base Salary accrued through
the
date of termination. Such termination shall also immediately cease the vesting
of all outstanding unvested options and restricted stock held on the date of
termination and all such unvested options shall thereupon expire.
(b) Voluntary
Termination.
In the
event Executive resigns from the Company voluntarily, Executive shall not be
entitled to any compensation other than Base Salary accrued through the
effective date of his resignation.
(c) Involuntary
Termination.
In the
event Executive is terminated by the Company due to an Involuntary Termination
prior to the expiration of the Employment Term, the Company shall pay to
Executive (i) the balance of Executive’s Base Salary in accordance with the
schedule such payments had been made during the six months preceding such
termination for the remainder of the Employment Term; and (ii) twenty five
percent (25%) of such balance, representing an estimate of all bonuses which
would have been paid during such period, payable 60 days after such termination.
In addition, the Company shall be obligated, for a period of twenty-four (24)
months after any Involuntary Termination, to continue to make available to
Executive and to pay for all health, dental, vision, life, dependent life,
long-term disability, accidental death and dismemberment and other similar
insurance plans existing on the date of Executive’s termination, or to provide
comparable coverage. The Company shall “gross-up” Executive for any income
required to be imputed by virtue of providing the benefits set forth in the
preceding sentence, such that the net economic result to Executive will be
as if
such benefits were provided on a tax-free basis.
(d) Death
or Disability.
In the
event of termination by reason of Executive’s death and/or permanent disability,
Executive or his executors, legal representatives or administrators, as
applicable, shall be entitled to an amount equal to Executive’s Base Salary
accrued through the date of termination, plus a pro rata share of any annual
bonus to which Executive would otherwise be entitled for the year during which
death or permanent disability occurs.
5. General
Provisions.
5.1 Modification:
No Waiver.
No
modification, amendment or discharge of this Agreement shall be valid unless
the
same is in writing and signed by all parties hereto. Failure of any party at
any
time to enforce any provisions of this Agreement or any rights or to exercise
any elections hall in no way be considered to be a waiver of such provisions,
rights or elections and shall in no way affect the validity of this Agreement.
The exercise by any party of any of its rights or any of this elections under
this Agreement shall not preclude or prejudice such party from exercising the
same or any other right it may have under this Agreement irrespective of any
previous action taken.
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5.2 Notices.
All
notices and other communications required or permitted hereunder or necessary
or
convenient in connection herewith shall be in writing and shall be deemed to
have been given when hand delivered or mailed by registered or certified mail
as
follows (provided that notice of change of address shall be deemed given only
when received):
| If to the Company, to: | bioMETRX, Inc. | ||
| 000 X. Xxxxxxxx, Xxxxx 000 | |||
| Xxxxxxx, XX 00000 | |||
| If to Executive, to: | Xxxxxxxx Xxxxx | ||
| 00 Xxxxx Xxxxxxxxx Xx. | |||
| Xxxxxx, XX 00000 |
Or
to
such other names or addresses as the Company or Executive, as the case may
be,
shall designate by notice to each other person entitled to receive notices
in
the manner specified in this Section.
5.3 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York.
5.4 Further
Assurances.
Each
party to this Agreement shall execute all instruments and documents and take
all
actions as may be reasonably required to effectuate this Agreement.
5.5 Severability.
Should
any one or more of the provisions of this Agreement or of any agreement entered
into pursuant to this Agreement be determined to be illegal or unenforceable,
then such illegal or unenforceable provision shall be modified by the proper
court or arbitrator to the extent necessary and possible to make such provision
enforceable, and such modified provision and all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement
shall be given effect separately from the provisions or portion thereof
determined to be illegal or unenforceable and shall not be affected
thereby.
5.6 Successors
and Assigns.
Executive may not assign this Agreement without the prior written consent of
the
Company. The Company may assign its rights without the written consent of the
executive, so long as the Company or its assignee complies with the other
material terms of this Agreement. The rights and obligations of the Company
under this Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of the Company, and the Executive’s rights
under this Agreement shall inure to the benefit of and be binding upon his
heirs
and executors. The Company’s subsidiaries and controlled affiliates shall be
express third party beneficiaries of this Agreement.
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5.7 Entire
Agreement.
This
Agreement supersedes all prior agreements and understandings between the
parties, oral or written. No modification, termination or attempted waiver
shall
be valid unless in writing, signed by the party against whom such modification,
termination or waiver is sought to be enforced.
5.8 Counterparts;
Facsimile.
This
Agreement may be executed in one or more counterparts, each of which shall
for
all purposes be deemed to be an original, and all of which taken together shall
constitute one and the same instrument. This Agreement may be executed by
facsimile with original signatures to follow.
IN
WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed
this Agreement as of the date first written above.
| BIOMETRX, INC. | ||
| |
|
|
| By: | /s/ Xxxx Xxxxxx | |
|
Xxxx Xxxxxx, CEO |
||
| By: | /s/ Xxxxxxxx Xxxxx | |
|
Xxxxxxxx Xxxxx |
||
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