EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (“Agreement”), effective as of February 12, 2006 by and
between AMS Health Sciences, Inc., an Oklahoma corporation (the “Company”), and
Xxxxx X. Xxxxx (“Executive”) is set forth below.
IN
CONSIDERATION of the premises and the mutual covenants set forth below, the
parties hereby agree as follows:
1. Employment.
The
Company hereby agrees to employ Executive as its Vice President, Secretary,
Treasurer and Chief Financial Officer and Executive hereby accepts such
employment, on the terms and conditions set forth in this
Agreement.
2. Term.
The
period of employment of Executive by the Company under this Agreement (the
“Initial Term”) shall commence on February 12, 2006 (the “Commencement Date”)
and subject to termination as provided herein, shall continue through February
11, 2008; provided that this Agreement shall be automatically renewed for
two
(2) successive one (1) year terms (the “Extended Terms”) unless either party
elects not to renew this Agreement by delivering written notice of its election
to the other party no later than thirty (30) days prior to the end of the
current term. The Initial Term and the Extended Terms, if any, shall
collectively constitute the “Employment Period.” The Employment Period may be
terminated before the end of the Initial Term or the Extended Terms, if any,
in
accordance with Section 6 of this Agreement.
3. Position
and Duties.
During
the Employment Period, Executive shall report directly to the Company’s Chairman
of the Board, President and Chief Executive Officer. Executive shall have
those
powers and duties normally associated with the position of a Vice President,
Secretary, Treasurer and Chief Financial Officer. Executive shall devote
substantially all of her working time, attention and energies (other than
absences due to illness or vacation) to the performance of her duties for
the
Company. Notwithstanding the above, Executive shall be permitted, to the
extent
such activities do not interfere with the performance by Executive of her
duties
and responsibilities under this Agreement or violate Sections 9(a), (b) or
(c)
of this Agreement, to (i) serve on civic or charitable boards or committees
and
(ii) serve on the board of directors or other similar governing body of any
other corporation or other business entity or trade organization.
4. Place
of Performance.
The
principal place of employment and performance of duties by Executive shall
be at
the Company’s principal executive offices in Oklahoma City, Oklahoma.
5. Compensation
and Related Matters.
(a) Base
Salary.
Executive’s base salary shall be $100,000 for the first year of the Initial Term
and $112,500 for the second year of the Initial Term (each, the “Base Salary”),
and be paid in accordance with the Company’s customary payroll practices.
Executive’s Base Salary after the Initial Term shall be $125,000 per year.
Unless otherwise agreed to by Executive, Executive’s Base Salary shall be
subject to increase, but not decrease, pursuant to annual review by and in
the
discretion of the Board or on about the end of anniversaries of the Commencement
Date. Such increased Base Salary shall then constitute the Base Salary for
all
purposes of this Agreement.
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(b) Annual
Target Bonus Plan.
At the
Board’s sole discretion, during the term of the Executive’s Employment Period,
the Executive will have the opportunity to receive an annual bonus (“Annual
Target Bonus”), beginning at and equal to twenty-five percent (25%) of Base
Salary, with open-ended incremental increases commensurate with the length
of
service and performance after the first year. The Annual Target Bonus earned
will be awarded based upon the performance of the Executive and the Company
against annual target objectives established jointly by the Board and the
Executive. Any Annual Target Bonus payable under this Paragraph 5(b) will
be
paid to the Executive as soon as practicable following a fiscal year.
(c) Stock
Option.
The
Company hereby grants to Executive nonqualified stock options to purchase
One
Hundred Fifty Thousand (150,000) shares of Company common stock at an exercise
price equal to the closing price of the Company’s common stock on the American
Stock Exchange on the date of this Agreement. The option will be executed
in
accordance with the Company’s 2003 Stock Incentive Plan.
(d) Expenses.
The
Company shall promptly reimburse Executive for all reasonable business expenses,
including cell phone use, upon the presentation of reasonably itemized
statements of such expenses in accordance with the Company’s policies and
procedures now in force or as such policies and procedures may be modified
with
respect to executive officers of the Company or, alternatively, as approved
by
the Chairman.
(e) Vacation
And Sick Leave.
Executive shall be entitled to four (4) weeks vacation per every twelve (12)
month period of employment hereunder. Allowable carry-over of non-used vacation
time shall be in line with that of other executives of the Company. Executive
shall also be entitled to leaves for illness or other incapacitation as is
consistent with Executive’s title and Employer’s needs for Executive’s services,
except as otherwise provided for in Section 8(a).
(f) Welfare,
Pension and Incentive Benefit Plans; Related Benefits.
During
the Employment Period, Executive (and her spouse and/or dependents to the
extent
provided the applicable plans and programs) shall be entitled to participate
in
and be covered under any welfare benefit plans or programs maintained by
the
Company from time to time for the benefit of its similarly situated employees
pursuant to the terms of such plans and programs, including, without limitation,
any medical, life, hospitalization, dental, disability, accidental death
and
dismemberment and other insurance plans and programs. During the Employment
Period, Executive shall also be eligible to participate in any pension,
retirement, savings and other employee benefit plans and programs maintained
from time to time by the Company for the benefit of similarly situated
employees.
(g) Company
Vehicle.
The
Company will provide Executive a company vehicle or pay a monthly car allowance,
equal to the expense incurred by the other Company executives.
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6. Termination.
Executive’s employment under this Agreement may be terminated during the
Employment Period under the following circumstances:
(a) Death.
Executive’s employment under this Agreement shall terminate upon her
death.
(b) Disability.
If, as
a result of Executive’s incapacity due to physical or mental illness, Executive
shall have been substantially unable to perform her duties under this Agreement
(with or without reasonable accommodation, as defined under the Americans
With
Disabilities Act), for a period of three (3) consecutive months, and the
Company
shall have the right to terminate Executive’s employment under this Agreement
for “Disability”, by providing a thirty (30) day Notice of Termination to
Executive pursuant to Section 7(a) and such termination in and of itself
shall
not be, nor shall it be deemed to be, a breach of this Agreement by the
Company.
(c) Cause.
The
Company shall have the right to terminate Executive’s employment at any time for
Cause, and such termination in and of itself shall not be, nor shall it be
deemed to be, a breach of this Agreement by the Company. For purposes of
this
Agreement, the Company shall have “Cause” to terminate Executive’s employment
upon:
(i) an
act of
felony dishonesty taken by Executive which results or is intended to result
in
improper personal enrichment of Executive and/or expense to the Company;
or
(ii) Executive’s
failure to follow a direct, reasonable and lawful written order from the
Board
and/or the Chairman, within the reasonable scope of Executive’s
duties.
Cause
shall not exist under paragraphs (i) or (ii)) above unless and until the
Company
has delivered to Executive a copy of a resolution duly adopted by not less
than
three-fourths (3/4ths) of the Board (excluding Executive) at a meeting of
the
Board called and held for such purpose finding that in the good faith opinion
of
the Board, Executive was guilty of the conduct set forth in paragraphs (i)
or
(ii) and specifying the particulars thereof in detail. Upon receipt of the
board
resolution, the Executive shall have 15 days to cure, if curable, the “Cause” of
the board resolution and avoid termination.
(d) Voluntarily.
Executive and the Company shall have the right to voluntarily terminate
Executive’s employment under this Agreement.
7. Termination
Procedure.
(a) Notice
of Termination.
Any
termination of Executive’s employment by the Company or by Executive during the
Employment Period (other than termination due to death pursuant to Section
6(a))
shall be communicated by written Notice of Termination to the other party
in
accordance with Section 12. For purposes of this Agreement, a “Notice of
Termination” shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for
termination of Executive’s employment under the provision so
indicated.
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(b) Date
of Termination.
“Date
of Termination” shall mean (i) if Executive’s employment is terminated by his
death, the date of his death, (ii) if Executive’s employment is terminated for
Disability pursuant to Section 6(b), thirty (30) days after Notice of
Termination (provided that Executive shall not have returned to the substantial
performance of her duties on a full-time basis during such thirty (30) day
period), (iii) if Executive’s employment is terminated for Cause pursuant to
Section 6(c), the date the Notice of Termination is sent to Executive, which
in
the case of Cause under Section 6(c) shall be no less than 15 days after
Executive’s receipt of the board resolution and shall be subject to an
opportunity to cure as set forth in Section 6(c), or (iv) if Executive’s
employment is terminated pursuant to Section 6(d), the date that the Company
or
the Executive receives a Notice of Termination from the other or such later
termination date as is set forth in such Notice of Termination.
8. Compensation
Upon Termination or During Disability.
In the
event of Executive’s Disability or termination of her employment under this
Agreement during the Employment Period, the Company shall provide Executive
with
the payments and benefits set forth below. Executive acknowledges and agrees
that the payments set forth in this Section 8, and the other agreements and
plans referenced in this Agreement, constitute the sole compensation and
damages
for termination of her employment during the Employment Period.
(a) Disability.
During
any period that Executive fails to perform her duties under this Agreement
as a
result of incapacity due to physical or mental illness (“Disability Period”),
Executive shall continue to receive her full Base Salary set forth in Section
5(a) until her employment is terminated pursuant to Section 6(b). In the
event
Executive’s employment is terminated for Disability pursuant to Section 6(b):
(i) the
Company shall pay to Executive (A) her Base Salary and accrued vacation pay
through the Date of Termination, as soon as practicable following the Date
of
Termination, and (B) provide Executive with disability benefits pursuant
to the
terms of any Company disability programs;
(ii) the
Company shall reimburse Executive pursuant to Section 5(d) for reasonable
business expenses incurred, but not reimbursed, prior to such termination
of
employment; and
(iii) Executive
shall be entitled to any other rights, compensation and/or benefits as may
be
due to Executive following such termination to which she is otherwise entitled
in accordance with the terms and provisions of any plans or programs of the
Company.
(b) Termination
By Company without Cause.
If
Executive’s employment is terminated by the Company without Cause:
(i) the
Company shall pay to Executive (A) her Base Salary and accrued vacation pay
through the Date of Termination, as soon as practicable following the Date
of
Termination, and (B) Severance Pay, in equal monthly installments or a lump
sum
at the Company’s discretion, according to the following schedule:
|
Length
of Employment as Executive under this Agreement
|
Months
of Base Salary existing on Date of Termination
|
|
1
-
6 months
|
1
month
|
|
7
-
12 months
|
5
months
|
|
13
- 24 months
|
6
months
|
|
25
- 36 months
|
12
months
|
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(ii) the
Company shall reimburse Executive pursuant to Section 5(d) for reasonable
business expenses incurred, but not reimbursed, prior to such termination
of
employment; and
(iii) Executive
shall be entitled to any other rights, compensation and/or benefits as may
be
due to Executive following such termination to which she is otherwise entitled
in accordance with the terms and provisions of any plans or programs of the
Company.
(c) Cause,
Death or Voluntarily By Executive.
If
Executive’s employment is terminated by the Company for Cause, due to
Executive’s death or voluntarily by Executive:
(i) the
Company shall pay Executive (or her legal representative or estate) her Base
Salary and her accrued vacation pay (to the extent required by law or the
Company’s vacation policy) through the Date of Termination, as soon as
practicable following the Date of Termination;
(ii) the
Company shall reimburse Executive (or her legal representative or estate)
pursuant to Section 5(d) for reasonable business expenses incurred, but not
reimbursed, prior to such termination of employment, unless such termination
resulted from a misappropriation of Company funds; and
(iii) Executive
(or her legal representative or estate) shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive following such
termination to which she is otherwise entitled in accordance with the terms
and
provisions of any plans or programs of the Company.
9. Confidential
Information, Ownership of Documents and Other Items; Non-Solicitation of
Employees and Business.
(a) Confidential
Information.
During
the Employment Period and thereafter, Executive shall hold in a fiduciary
capacity for the benefit of the Company all trade secrets and confidential
information, knowledge or data relating to the Company and its businesses
and
investments and its affiliates, which shall have been obtained by Executive
during Executive’s employment by the Company and which is not generally
available public knowledge (other than by acts by Executive in violation
of this
Agreement). Except as may be required or appropriate in connection with her
carrying out her duties under this Agreement, Executive shall not, without
the
prior written consent of the Company or as may otherwise be required by law
or
any legal process, or as is necessary in connection with any adversarial
proceeding against the Company (in which case Executive shall use her reasonable
best efforts in cooperating with the Company in obtaining a protective order
against disclosure by a court of competent jurisdiction), communicate or
divulge
any such trade secrets, information, knowledge or data to anyone other than
the
Company and those designated by the Company or on behalf of the Company in
the
furtherance of its business or to perform duties under this
Agreement.
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(b) Removal
of Documents; Rights to Products; Other Property.
All
records, files, drawings, documents, models, equipment, and the like relating
to
the Company’s business and its affiliates, which Executive has control over
shall not be removed from the Company’s premises without its written consent,
unless such removal is in the furtherance of the Company’s business or is in
connection with Executive’s carrying out her duties under this Agreement and, if
so removed, shall be returned to the Company promptly after termination of
Executive’s employment under this Agreement, or otherwise promptly after removal
if such removal occurs following termination of employment. Executive shall
assign to the Company all rights to trade secrets and other products relating
to
the Company’s business developed by her alone or in conjunction with others at
any time while employed by the Company. Executive shall also return to the
Company all Company-provided vehicles in her possession or control.
(c) Protection
of Business.
During
the Employment Period and until the first anniversary of Executive’s Date of
Termination (regardless of the reason for termination of employment), the
Executive will not, directly or indirectly, on her own behalf or behalf of
any
third party, solicit or attempt to induce any existing customers or accounts
of
the Company or its affiliates to cease doing business with the Company or
its
affiliates. During the same time period, Executive will not, directly or
indirectly, on her own behalf or on behalf of any third party, solicit or
attempt to induce any employee of the Company to terminate his or her employment
with the Company to be employed by Executive or a third party.
(d) Injunctive
Relief.
In the
event of a breach or threatened breach of this Section 9, Executive agrees
that
the Company shall be entitled to injunctive relief in a court of appropriate
jurisdiction to remedy any such breach or threatened breach, Executive
acknowledging that damages would be inadequate and insufficient.
(e) Continuing
Operation.
Except
as specifically provided in this Section 9, the termination of Executive’s
employment or of this Agreement shall have no effect on the continuing operation
of this Section 9.
(f) Additional
Related Agreements.
Executive agrees to sign and to abide by the provisions of any additional
agreements, policies or requirements of the Company related to the subject
of
this Section 9.
10. Arbitration.
The
parties agree that Executive’s employment and this Agreement relate to
interstate commerce, and that any disputes, claims or controversies between
Executive and the Company which may arise out of or relate to the Executive’s
employment relationship or this Agreement shall be settled by arbitration.
This
agreement to arbitrate shall survive the termination of this Agreement. Any
arbitration shall be in accordance with the Rules of the American Arbitration
Association or other national arbitration service that is mutually agreeable
to
the parties. The arbitration shall be undertaken pursuant to the Federal
Arbitration Act. Arbitration will be held in Oklahoma City, Oklahoma unless
the
parties mutually agree on another location. The decision of the arbitrator(s)
will be enforceable in any court of competent jurisdiction. The parties agree
that the arbitrator(s) may allocate administrative and arbitrator fees, the
parties’ other costs and expenses of arbitration and the parties’ attorneys’
fees and require that such items be paid in any manner in which such item
would
have been allocated and ordered to be paid by a court of competent jurisdiction.
The parties agree that punitive, liquidated or indirect damages shall not
be
awarded by the arbitrator(s) unless such damages would have been awarded
by a
court of competent jurisdiction. Nothing in this agreement to arbitrate,
however, shall preclude the Company from obtaining injunctive relief from
a
court of competent jurisdiction prohibiting any on-going breaches by Executive
of this Agreement including, without limitation, violations of
Section 9.
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11. Successors
Binding Agreement.
(a) Company’s
Successors.
No
rights or obligations of the Company under this Agreement may be assigned
or
transferred except that the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the
same
extent that the Company would be required to perform it if no such succession
had taken place.
(b) Executive’s
Successors.
No
rights or obligations of Executive under this Agreement may be assigned or
transferred by Executive other than her rights to payments or benefits under
this Agreement, which may be transferred only by will or the laws of descent
and
distribution. Upon Executive’s death, this Agreement and all rights of Executive
under this Agreement shall inure to the benefit of and be enforceable by
Executive’s beneficiary or beneficiaries, personal or legal representatives, or
estate, to the extent any such person succeeds to Executive’s interests under
this Agreement. Executive shall be entitled to select and change a beneficiary
or beneficiaries to receive any benefit or compensation payable under this
Agreement following Executive’s death by giving the Company written notice
thereof. In the event of Executive’s death or a judicial determination of her
incompetence, reference in this Agreement to Executive shall be deemed, where
appropriate, to refer to her beneficiary(ies), estate or other legal
representative(s). If Executive should die following her Date of Termination
while any amounts would still be payable to her under this Agreement if she
had
continued to live, all such amounts unless otherwise provided shall be paid
in
accordance with the terms of this Agreement to such person or persons so
appointed in writing by Executive, or otherwise to her legal representatives
or
estate.
12. Notice.
For the
purposes of this Agreement, notices, demands and all other communications
provided for in this Agreement shall be in writing and shall be deemed to
have
been duly given when delivered either personally or by United States certified
or registered mail, return receipt requested, postage prepaid, addressed
as
follows:
If
to
Executive:
0000
Xxxxxxxx Xxxx
Xxxxxx,
XX 00000
If
to the
Company:
000
XX
00xx
Xxxxxxxx
Xxxx, XX 00000
or
to
such other address as any party may have furnished to the others in writing
in
accordance with this Agreement, except that notices of change of address
shall
be effective only upon receipt.
13. Taxes
and Withholding.
All
payments hereunder shall be subject to tax in accordance with the Federal
Internal Revenue Code, as amended from time to time, and any applicable rules
or
regulations promulgated thereunder and in accordance with applicable state
statutes, rules and regulations. All payments shall be subject to any required
withholding of Federal, state and local taxes pursuant to any applicable
law,
rule or regulation.
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14. Miscellaneous.
No
provisions of this Agreement may be amended, modified, or waived unless such
amendment or modification is agreed to in writing signed by Executive and
by a
duly authorized officer of the Company, and such waiver is set forth in writing
and signed by the party to be charged. No waiver by either party hereto at
any
time of any breach by the other party hereto of any condition or provision
of
this Agreement to be performed by such other party shall be deemed a waiver
of
similar or dissimilar provisions or conditions at the same or at any prior
or
subsequent time. The respective rights and obligations of the parties under
this
Agreement shall survive Executive’s termination of employment and the
termination of this Agreement to the extent necessary for the intended
preservation of such rights and obligations. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws
of
the State of Oklahoma without regard to its conflicts of law principles.
15. Validity.
The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision of
this
Agreement, which shall remain in full force and effect.
16. Entire
Agreement.
Except
as provided elsewhere herein, this Agreement sets forth the entire agreement
of
the parties with respect to its subject matter and supersedes all prior
agreements, promises, covenants, arrangements, communications, representations
or warranties, whether oral or written, by any officer, employee or
representative of any party to this Agreement with respect of such subject
matter.
IN
WITNESS WHEREOF, the parties have executed this Agreement on April
1,
2006, to be effective as of the
date
first above written.
|
Xxxxx
X. Xxxxxxx
|
|
By/S/
XXXXX X. XXXXXXX
|
|
Chairman of the Board, President and CEO
|
|
/S/
XXXXX X. XXXXX
|
|
Xxxxx
X. Xxxxx
|
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