EXHIBIT 10(a) EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the 1st
day of January, 2004, BY AND BETWEEN MARC PHARMACEUTICALS, INC., a corporation
organized under the laws of the State of Delaware (the "Company"), and XXXXXX X.
XXXXX (the "Executive").
WITNESSETH:
WHEREAS, the Executive has been instrumental in the development of the
Company since its inception and the Company desires to continue the services of
the Executive; and
WHEREAS, the parties are desirous of entering into this Agreement in
order to ensure the Company of the valuable services of the Executive pursuant
to the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, the parties hereby agree
as follows:
1. EMPLOYMENT CONDITIONS
Effective upon the commencement of the Term hereof (as defined in
Section 2), the Company hereby employs the Executive as its President and Chief
Executive Officer and the Executive hereby accepts such employment, on the terms
and conditions hereinafter set forth. As President and Chief Executive Officer,
the Executive shall report only to the Board of Directors of the Company. In
addition, for as long as the Executive shall be employed by the Company, the
Executive shall be nominated for election to the Board of Directors of the
Company, and the Company shall use its best efforts to cause the election of the
Executive as Director. Each of the parties hereto agrees that the failure of the
Executive to be duly and validly elected as a Director (for any reason other
than refusal of the Executive to stand for election or re-election) or any
removal of the Executive as a Director, shall constitute a material breach of
this Agreement by the Company.
2. TERM
The initial Term of the Executive's engagement hereunder (the "Initial
Term") shall commence as of January 1, 2004 (the "Commencement Date") and shall
terminate on December 31, 2008. Upon the expiration of the Initial Term, this
Agreement shall automatically renew for successive periods of one year (each, a
"Renewal Term" and collectively with the Initial Term, the "Term") unless either
party shall give the other written notice of non-renewal not less than 90 days
prior to the expiration of the Initial Term or any Renewal Term. The Executive's
base salary under any Renewal Term shall be not less than the final base salary
in effect at the end of the prior term.
3. DUTIES OF EXECUTIVE
(a) The Executive shall be the President and Chief Executive Officer of the
Company (and any and all of its subsidiaries) and shall perform the services and
duties attendant to such position as set forth in this Agreement or in the
By-Laws of the Company, subject to the direction and supervision of the Board of
Directors of the Company. As
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President and Chief Executive Officer of the Company, the Executive shall report
only to the Board of Directors of the Company, and shall have powers and
authority superior to those of any officer or employee of the Company or any
subsidiary thereof.
(b) Anything contained in Section 3(a) hereof or in any other provision
of this Agreement to the contrary notwithstanding, nothing shall be construed to
limit the ability of the Executive to serve on the Boards of Directors or as
Chairman of such other corporations, trade associations, charitable
organizations or other entities as the Executive shall from time-to-time deem
appropriate, and to engage in such other activities as the Executive shall deem
not to be in conflict with his duties to the Company.
4. COMPENSATION
(a) Base Annual Salary. Subject to any other provision of this
Agreement, the Executive shall receive a base annual salary in the amount of
$250,000 per annum (which amount shall be payable effective as of January 1,
2004) (the "Base Salary Amount"), payable in equal bi-weekly payments (less
applicable withholding taxes) in accordance with the usual payroll practices of
the Company.
(b) Cash Incentive Bonus. The Executive shall be entitled to a cash
incentive bonus in an amount equal to one percent (1 %) of the after-tax net
income of the Company, determined in accordance with generally accepted
accounting principles ("GAAP"). The calculation and distribution of such
incentive bonus amount shall be made quarterly, within forty-five (45) days
after the conclusion of each calendar quarter. Such calculations and
distributions shall be cumulative within each fiscal year of the Company, such
that if at the conclusion of any fiscal year it is determined that the bonus
award previously distributed hereunder exceeds (or falls short of) the amount to
which the Executive shall be entitled, the Company shall promptly notify the
Executive of the amount of such excess (or arrearage). The amount of any such
arrearage shall be paid by the Company to the Executive in a lump sum, within
ten (10) days following the computation of such amount. The amount of such
excess payment, if any, shall be refunded by the Executive to the Company,
provided, however, that such repayment shall be accomplished by reducing each of
the four quarterly incentive bonus payments in the succeeding year by an amount
equal to twenty-five (25%) percent of such overpayment. Notwithstanding anything
contained herein to the contrary, in any year during or after which a Change in
Control (as hereinafter defined) shall have occurred, the amount of the cash
incentive bonus payable pursuant to this paragraph 4(b) shall not be less than
the amount of the cash incentive bonus paid during the immediately preceding
year.
5. EMPLOYEE BENEFITS
(a) In addition to the compensation and other benefits provided for
elsewhere in this Agreement, the Executive shall be entitled to four(4) weeks of
paid vacation during each year, as well as to health, life insurance, pension,
supplemental pension, savings, stock award, stock option and other employment
benefits which are provided to other executive officers and employees of the
Company, to be reimbursed by the Company for ordinary and necessary business
expenses incurred by the Executive and to participate in all employee benefit
plans of the Company as in effect on the date hereof and/or as adopted or
modified from time-to-time after the date hereof. The Company shall not
terminate any such employee benefits or employee benefit plans which are in
effect on the date hereof.
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(b) The Company shall provide the Executive with an automobile expense
allowance of $12,000 per year.
6. COUNSEL FEES AND INDEMNIFICATION
The Company shall pay, or reimburse to the Executive, the fees and
expenses of personal counsel for their professional services rendered to the
Executive in connection with this Employment Agreement and any other agreement
or benefit plan entered into or adopted in connection herewith and matters
related hereto and thereto, including in connection with any enforcement hereof
and thereof. Without limiting the foregoing, in the event that (i) the Company
terminates, or seeks to terminate this Agreement, alleging as justification for
such termination "good cause" as specified in Section 8(b) hereof and the
Executive disputes such termination or attempted termination, or (ii) the
Executive elects to terminate this Agreement pursuant to Section 8(c) hereof and
the Company disputes its obligations pursuant to Section 8 or any other
provision of this Agreement, the Company shall pay, or reimburse to the
Executive, all reasonable costs incurred by the Executive in such dispute,
including attorneys' fees and costs.
7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY
(a) The Company hereby represents and warrants to, and agrees with, the
Executive as follows:
(i) the Executive shall be covered and insured up to the maximum
limits provided by all insurance which the Company maintains to indemnify its
directors and officers (and to indemnify the Company for any obligations which
it incurs as a result of its undertaking to indemnify its officers and
directors);
(ii) that the Company will maintain in full force and effect such
insurance, at not less than its present limits, in effect throughout the Term of
this Agreement (or any renewal or continuation hereof;
(iii) this Agreement, and each of the terms and provisions hereof
including, without limitation the undertakings with respect to payment,
indemnification and maintenance of insurance set forth in Sections 6 and 7
hereof, do not violate or conflict with any provisions of the Certificate of
Incorporation and Bylaws of the Company, (B) any agreement by which the Company
is bound, or (C) any federal, state or local law, rule, regulation or judicial
order; this Agreement has been duly and validly authorized, executed and
delivered by the Company, and is a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms;
(iv) the Company has all power and authority necessary to enter
into this Agreement in accordance with its terms;
(v) this Agreement, and the employment of the Executive by the
Company have been duly approved by the Board of Directors of the Company;
(vi) during the Term hereof, the Company will not change the
corporate title of the Executive or alter or diminish the powers, duties and
authority of the Executive in his position as President and Chief Executive
Officer of the Company (or any subsidiary of the Company), or take any other
action which would constitute "Good Reason" as defined in
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Section 8 (c) hereof if such action were to occur following a "Change in
Control" as defined in Section 8 (c) hereof;
(vii) the Company shall indemnify and hold harmless the Executive
to the fullest extent permitted by applicable law. To the extent that the
Company's Certificate of Incorporation, By-laws, resolutions of Company's Board
of Directors or stockholders, or other corporate acts, agreements or instruments
of the Company, each as in effect on the date hereof, confer additional or
specific rights relating to indemnification, advancement of expenses of
directors and officers, agents or others, the Executive shall continue to be
entitled to such rights, which rights may not be diminished by subsequent
modification or amendment; and
(viii) each of the persons executing this Agreement hereby
acknowledges and agrees that, in entering into this Agreement, the Executive has
relied on each of the representations and warranties and agreements of the
Company contained herein and failure of the Company to comply with or perform
any of such representations, warranties or agreements shall constitute the
material breach by the Company of this Agreement.
8. TERMINATION
This Agreement may be terminated only as follows:
(a) Termination by the Company Other than for Good Cause. If the
Company shall terminate the employment of the Executive during the Term other
than for "good cause", as defined herein, then the Executive shall be entitled
to receive the following:
(i) payment of cash in an amount equal to the Base Salary Amount
(as in effect on the date of such termination) for the remainder of the Term;
(ii) the bonus amount payable pursuant to Section 4(b) hereof,
which amount shall be pro rated in the case of any partial period; and
(iii) any and all unvested stock options, restricted stock awards
or similar items subject to future vesting shall immediately become 100% vested
without any further action on the part of the Executive.
(b) Termination by the Company for Good Cause. Except as provided in
Section 8(d) below, this Agreement may only be terminated by the Company, upon
written notice to the Executive, for "good cause" as hereinafter defined. For
purposes of this Section 8(b) "good cause" shall mean the willful and continued
failure of the Executive to perform his duties or the willful engaging by the
Executive in illegal conduct or gross misconduct materially injurious to the
Company. If the Company desires to terminate the employment of the Executive
pursuant to this Section 8(b) the Company shall first send notice to the
Executive describing the action constituting the act of breach or default and on
receipt thereof the Executive shall have thirty (30) days in which to cure such
breach or default. Upon termination in accordance with the provisions of this
Section 8(b) the Company shall be obligated to pay to the Executive the
annualized Base Salary Amount only through the period ending on the last day of
the month in which such termination occurs, plus such other amounts as are
payable to the Executive pursuant to this Agreement and which have accrued as of
the last day of the month in which such termination occurs (including the
pro-rating of amounts in respect of any partial period).
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(c) Termination by the Executive by Resignation upon Breach or Chance
in Control.
(i) This Agreement may be terminated by the Executive, upon written
notice to the Company,
(A) for breach by the Company of any of the terms or provisions
hereof or any other agreement or benefit plan entered into or adopted in
connection herewith,
(B) during the "Window Period" (as hereinafter defined)
following a "Change in Control" of the Company as hereinafter defined, or
(C) upon the occurrence of "Good Reason" (as hereinafter
defined) following a "Change in Control" of the Company as hereinafter defined.
Upon any such termination in accordance with this Section 8(c), the
Executive shall be entitled to receive payments in the same amounts and
acceleration of vesting or other benefit as would be payable or would occur upon
termination of the Executive by the Company other than for "good cause" as
provided in Section 8(a) hereof
(ii) For purposes of this Agreement, a "Change in Control" of the
Company shall mean any of the following events:
(A) An acquisition (whether directly from the Company or
otherwise) of any voting securities of the Company (the "Voting Securities") by
any "Person" (as the term person is used for purposes of Section 13(d) or 14(d)
of the Securities and Exchange Act of 1934, as amended (the "1934 Act")) (other
than the Executive or an entity controlled by the Executive), immediately after
which such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3
promulgated under the 0000 Xxx) of forty percent (40%) or more of the combined
voting power of the Company's then outstanding Voting Securities.
(B) The individuals who, as of the date hereof, are members of
the Board (the "incumbent Board"), cease for any reason to constitute at least
sixty percent (60%) of the Board; provided, however, that if the election, or
nomination for election by the Company's stockholders, of any new director was
approved by a vote of at least sixty percent (60%) of the Incumbent Board, such
new director shall, for purposes of this Agreement, be considered as a member of
the Incumbent Board; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the 0000 Xxx) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board (a "Proxy Contest") including by reason of any agreement intended
to avoid or settle any Election Contest or Proxy Contest; or
(C) Approval by the Board of Directors or stockholders of the
Company, or execution by the Company of any agreement with respect to, or the
consummation of:
(1) A merger, consolidation or reorganization involving the
Company;
(2) A liquidation or dissolution of or appointment of a
receiver, rehabilitator, conservator or similar person for, the Company; or
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(3) An agreement for the sale or other disposition of all
or substantially all of the assets of the Company to any Person (other than a
transfer to a Subsidiary).
(D) Any other change in "control" of the Company. For purposes
of the immediately preceding sentence, the term "control" shall have the meaning
ascribed thereto pursuant to Rule 405 of the Rules and Regulations of the
Securities and Exchange Commission promulgated pursuant to the Securities Act of
1933, as amended.
(iii) Notwithstanding anything contained in this Agreement to the
contrary, if the Executive's employment is terminated prior to a Change in
Control and the Executive reasonably demonstrates that such termination (i) was
at the request of a third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control and who effectuates a Change
in Control (a "Third Party") or (ii) otherwise occurred in connection with, or
in anticipation of, a Change in Control which actually occurs, then for all
purposes of this Agreement, the date of a Change in Control with respect to the
Executive shall mean the date immediately prior to the date of such termination
of the Executive's employment.
(iv) In order to provide the Executive with an incentive to remain
with the Company for an appropriate period of transition following a Change in
Control of the Company, for purposes of this Agreement the "Window Period" shall
be the ninety (90) day period beginning on the date which is six (6) months
after the date of any Change in Control of the Company; provided, however, that
if any such Change in Control shall occur within the last six (6) months of the
Term of this Agreement, the Window Period shall be the last forty-five (45) days
of the Term hereof (or such lesser period as shall remain in the Term hereof
following such Change in Control) ; and provided, further, that if any such
Change in Control shall occur during the last six (6) months of the Term of this
Agreement, unless the Executive shall have given written notice to the contrary,
the Executive shall without further action automatically be deemed to have given
the written notice specified in Section 8(c)(i) hereof on the last day of the
Term of (unless such notice shall have been previously given) and shall be
entitled to receive the payments specified in such Section 8(c)(i).
(v) For purposes of this Agreement, "Good Reason" shall mean the
occurrence after a Change in Control of any of the events or conditions
described in subsections (A) through (G) hereof:
(A) a change in the Executive's stains, title, position or
responsibilities (including reporting responsibilities) which, in the
Executive's reasonable judgment, represents an adverse change from his status,
title, position or responsibilities as in effect at any time within ninety (90)
days preceding the date of a Change in Control or at any time thereafter; the
assignment to the Executive of any duties or responsibilities which, in the
Executive's reasonable judgment, are inconsistent with his status, title,
position or responsibilities as in effect at any time within ninety (90) days
preceding the date of a Change in Control or at any time thereafter; or any
removal of the Executive from or failure to reappoint or reelect him to any of
such offices or positions;
(B) any failure to award the Executive bonus payments and/or
increases in Base Annual Salary in a manner consistent with the practice of the
Company prior to any such Change in Control;
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(C) the failure by the Company to (a) continue in effect
(without reduction in benefit level, and/or reward opportunities) any material
compensation or employee benefit plan in which the Executive was participating
at any time within ninety (90) days preceding the date of a Change in Control or
at any time thereafter, or (b) provide the Executive with compensation and
benefits, in the aggregate, at least equal (in terms of benefit levels and/or
reward opportunities) to those provided for under each other employee benefit
plan, program and practice in which the Executive was participating at any time
within ninety (90) days preceding the date of a Change in Control or at any time
thereafter,
(D) the insolvency or the filing (by any party, including the
Company) of a petition for bankruptcy or similar insolvency of the Company,
which petition is not dismissed within sixty (60) days;
(E) any material breach by the Company of any provision of this
Agreement;
(F) any purported termination of the Executive's employment for
"good cause" by the Company which does not comply with the terms of Section 8(b)
hereof.
(d) Termination by the Company upon Disability of the Executive. This
Agreement may, at the option of the Company, be terminated by the Company, upon
thirty (30) day's prior written notice to the Executive (or his personal
representative}, upon the Disability of the Executive as hereinafter defined.
For purposes of this Section 8(d) "Disability" shall mean if the Executive shall
become physically or mentally disabled, whether totally or partially, so that he
is unable to perform substantially all of his services hereunder for a period of
twelve (12) consecutive months. Upon any such termination in accordance with
this Section 8(d), the Executive shall be entitled to receive payments of Base
Salary Amount (as in effect on the date of such termination), together with such
increases as would be applicable pursuant to Section 4(a) hereof for a period of
twelve (12) months from the effective date of such termination. In addition, the
Executive shall be entitled to such other benefits as would be available upon
termination of the Executive by the Company other than for "good cause" as
provided in subsections (ii) and (iii) of Section 8(a) hereof. Notwithstanding
anything contained herein to the contrary, the cash payment pursuant to which
the Executive shall be entitled pursuant to this Section 8(d) during the
twelve-month period following any such termination shall be reduced,
dollar-for-dollar by the amount of any disability insurance payment received by
the Executive during such period pursuant to any disability insurance policy,
the entire premium of which was paid for by the Company.
(e) Termination by the Company upon Death of the Executive. This
Agreement shall terminate upon death of the Executive. Upon any such termination
in accordance with this Section 8(e), the Executive (or his personal
representative) shall be entitled to receive payment of cash in an amount equal
to one year's Base Salary Amount (as in effect upon the date of such
termination) plus the pro rata portion of any bonus payable pursuant to
paragraph 4(b) hereof through the date of such termination.
(f) Payment Terms. Payment of any amounts to which the Executive shall
be entitled pursuant to the provisions of this Section 8 shall be made no later
than ten (10) days following receipt of notice of termination or the event
giving rise to such termination. Any amounts payable pursuant to this Section 8
which are not made within the period specified in
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this Section 8(f) shall bear interest at a rate equal to the lesser of (i) the
maximum interest rate allowable pursuant to applicable law or (ii) five points
above the "prime rate" of interest as published from time-to-time in the Eastern
Edition of the Wall Street Journal.
(g) Benefits. In the event the Executive's employment with the Company
is terminated for any reason prior to the end of the Term, the Executive and his
dependents, if any, will continue to participate in any group health plan
sponsored by the Company in which the Executive was participating on the date of
such termination, at no cost to the Executive or his dependents, for the
remainder of the Term. Thereafter, the Executive and his dependents, if any,
shall be entitled to elect continuation health coverage under Section 4980B of
the Internal Revenue Code of 1986, as amended, or any successor provisions
thereto, to the extent permitted by applicable law. In addition to any payments
to which the Executive may be entitled upon termination of his Employment
pursuant to any provision of this Agreement, the Executive shall be entitled to
any benefits under any life insurance, pension, supplemental pension, savings,
or other employee benefit plan in which the Executive was participating on the
date of any such termination.
9. LIMITATION ON PAYMENTS
(a) In the event that Xxxxxxx Xxxxxxx, or any successor tax accountants
to the Company (the "Auditors") determine that any payment or distribution by
the Company to or for the benefit of the Executive, whether paid or payable (or
distributed or distributable) pursuant to the terms of this Agreement or
otherwise (a "Payment"), would be nondeductible by the Company for federal
income tax purposes because of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), then the aggregate present value of the amounts
payable or distributable to or for the benefit of the Executive pursuant to this
Agreement (the "Agreement Payments") shall be reduced (but not below zero) to
the Reduced Amount. For purposes of this Section 9, the "Reduced Amount shall be
an amount expressed in present value which maximizes the aggregate present value
of Agreement Payments without causing any Payment to be nondeductible by the
Company because of Section 280G of the Code.
(b) If the Auditors determine that any Payment would be nondeductible
by the Company because of section 280G of the Code, then the Company shall
promptly give the Executive notice to that effect and a copy of the detailed
calculation (hereof and of the Reduced Amount, and the Executive may then elect,
in his sole discretion, which and how much of the Agreement Payments shall be
eliminated or reduced (as long as after such election the aggregate present
value of the Agreement Payments equals the Reduced Amount) and shall advise the
Company in writing of his election within 10 days of his receipt of notice. If
no such election is made by the Executive within such 10-day period, then the
Company may elect which and how much of the Agreement Payments shall be
eliminated or reduced (as long as after such election the aggregate present
value of the Agreement Payments equals the Reduced Amount) and shall notify the
Employee promptly of such election. For purposes of this Section 9, present
value shall be determined in accordance with section 280G(d)(4) of the Code. All
determinations made by the Auditors under this Section 9 shall be binding upon
the Company and the Executive and shall be made within 60 days of the
Executive's termination of employment. As promptly as practicable following such
determination and the elections
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hereunder, the Company shall pay to or distribute to or for the benefit of the
Executive such amounts as are then due to him under this Agreement and shall
promptly pay to or distribute for the benefit of the Executive in the future
such amounts as become due to him under this Agreement.
(c) As a result of the uncertainty in the application of Section 280G
of the Code at the time of the initial determination by the Auditors hereunder,
it is possible that Agreement Payments will have been made by the Company which
should not have been made (an "Overpayment") or that additional Agreement
Payments which will not have been made by the Company could have been made (an
"Underpayment"), consistent in each case with the calculation of the Reduced
Amount hereunder. In the event that the Auditors, based upon the assertion of a
deficiency by the Internal Revenue Service against the Company or the Executive
which the Auditors believe has a high probability of success, determine that an
Overpayment has been made, such Overpayment shall be treated for all purposes as
a loan to the Executive which he shall repay to the Company, together with
interest at the applicable federal rate provided for in section 7872 (f) (2) of
the Code; provided, however, that no amount shall be payable by the Executive to
the Company if and to the extent that such payment would not reduce the amount
which is subject to taxation under Section 4999 of the Code. In the event that
the Auditors, based upon controlling precedent, determine that an Underpayment
has occurred, such Underpayment shall promptly be paid by the Company to or for
the benefit of the Executive, together with interest at the applicable federal
rate provided for in section 7872 (f) (2) (A) of the Code.
10. WAIVER
No waiver of any provision of this Agreement shall be effective and
enforceable unless set forth in a written instrument executed by the parties
hereto. No waiver of any provision of this Agreement shall affect the validity
or enforceability, or constitute a waiver of future enforcement, of such
provision or of any other provision of this Agreement.
11. GOVERNING LAW
This Agreement shall in all respects be subject to, governed by and
construed in accordance with the laws of the State of Connecticut.
12. SEVERABILITY
The invalidity or unenforceability of any provision of this Agreement
shall not in any manner whatsoever affect the validity or enforceability of any
other provision hereof. Whenever possible, this Agreement shall be construed to
permit the full enforcement of each provision hereof, and any declaration of
invalidity or unenforceability with regard to any provision hereof shall be
construed to minimize the effect of such declaration.
13. NOTICES
All notices required or permitted hereunder shall be in writing and
shall be sufficiently given if-. (a) hand delivered (in which case the notice
shall be effective upon delivery); (b) telecopied, provided that in such case a
copy of such notice shall be concurrently sent by registered or certified mail,
return receipt requested, postage prepaid (in which case the notice shall be
effective one day following dispatch); (c) delivered by Express Mail, Federal
Express
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or other nationally recognized overnight courier service (in which case the
notice shall be effective one business day following dispatch); or (d) delivered
or mailed by registered or certified mail, return receipt requested, postage
prepaid (in which case the notice shall be effective three days following
dispatch), to the parties at the following addresses and/or telecopier numbers,
or to such other address or number as a party shall specify by written notice to
the others in accordance with this Section.
If to the Company:
Marc Pharmaceuticals, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Chairman
Tel. No.: 000-000-0000
with a copy to:
Xxxxx X. Xxxxxxxxx, Esq.
Newman, Tannenbaum, Helpern, Syracuse & Hirschtritt, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: 212-371-1084
If to Executive:
Xxxxxx X. Xxxxx
00 Xxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
14. DEATH OR DISABILITY
In the event of the death or disability of the Executive, the
Executive, his estate or his designated beneficiaries shall be entitled to the
same compensation, rights and benefits as are referred to in Sections 8 and 9
hereof.
15. BINDING EFFECT
This Agreement together with any written amendments hereto, shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors, assigns, heirs and personal representatives. Except as
otherwise provided in Section 14 hereof, this Agreement is not intended to
confer any rights or remedies upon any person or entity other than the Executive
and the Company.
16. NO MITIGATION OF DAMAGES; NO SET-OFF
In the event of any termination of this Agreement by either the Company
or the Executive for any reason, the Executive shall not be required to seek
comparable employment so as to minimize any obligation of the Company to
compensate the Executive for any damages that he may suffer by reason of such
termination or for any severance or other payment. No salary or other
compensation received by the Executive in connection with any employment of the
Executive after termination of the Executive's employment with the Company will
reduce any amounts payable under this Agreement or any agreement entered into in
connection herewith.
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There shall be no right of set-off or counterclaim on behalf of the Company, in
respect of any claim, debt or obligation, against any payments to the Executive,
his dependents, beneficiaries or estate provided for in this Agreement.
17. AMENDMENTS
No provision of this Agreement may be modified, altered or amended
except by written agreement executed by all of the parties hereto.
18. ENTIRE AGREEMENT
This Agreement and any benefit plans of the Company are intended by the
parties as the final expression of their agreement and intended to be a complete
and exclusive statement of the agreements and understandings of the parties
hereto in respect of the subject matter contained herein or in such letter
agreements. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein or therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to the subject matter hereof.
19. HEADINGS
The various headings set forth in this Agreement are inserted for
reference purposes only and shall in no way effect the meaning or intent of any
provision hereof.
20. INTERPRETATION
It is expressly agreed by the parties that the authorship of this
Agreement will have no bearing upon its interpretation. Each of the parties
hereto acknowledges and agrees that the terms and provisions of this Agreement
are fair and reasonable and that no such term or provision shall in any event be
deemed a penalty.
21. COUNTERPARTS
This Agreement may be executed in counterparts each of which shall be
deemed an original but all of which together shall constitute a single
instrument.
22. DISPUTE RESOLUTION
At the sole election of the Executive, any dispute arising pursuant to
this Agreement may be resolved pursuant to an arbitration proceeding conducted
by a panel of three neutral arbitrators in accordance with the commercial
arbitration rules of the American Arbitration Association. Any such proceedings
will be held in Stamford, Connecticut. Notwithstanding anything contained herein
to the contrary all costs associated with such proceeding shall be borne by the
Company.
23. COVENANT NOT TO COMPETE UPON ELECTION OF COMPANY
(a) During the period of 30 days following the termination of the
employment of the Executive during the Term (other than termination pursuant to
Section 8(c)(A) or Section 8(c)(C) ), the Company shall have the option, but not
the obligation, to deliver to the Executive a written notice of the election of
the Company to invoke the covenant not to compete contained in Section 23(b)
hereof.
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(b) Upon timely receipt by the Executive of a notice specified in
Paragraph 23(a) hereof, the Executive shall not, for a period of two years,
engage in the business of (i) the offering of service contracts to consumers
through retailers, dealers, distributors and manufacturers, or (ii)
administering service contracts offered by others to consumers through
retailers, dealers, distributors and manufacturers. Nothing herein shall impair
the ability of the Executive to engage in any other activity not specified in
the immediately preceding sentence, including, without limitation, offering
service contracts or administering service contracts offered to consumers other
than through retailers, dealers, distributors and manufacturers.
(c) Upon the election of the Company to invoke the provisions of this
Section 23, and simultaneously with the submission of the notice specified in
paragraph 23(a), the Company shall issue to the Executive One Million
(1,000,000) shares of Common Stock.
(d) The obligations of the Executive under this Section 23 shall
terminate upon the breach by the Company of any obligation to the Executive
pursuant to this Agreement or any other agreement.
IN WITNESS WHEREOF, the Company and Executive have duly executed this
Agreement as of the day and year first written above.
Marc Pharmaceuticals, Inc.
By:
--------------------------
Xxxx San Xxxxxxx
Chairman
By:
--------------------------
Xxxxxx X. Xxxxx
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