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EXHIBIT 10.25
STAR SCIENTIFIC, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is entered into
as of April 12, 1999, by and between STAR SCIENTIFIC, INC., a Delaware
corporation (the "Company"), and XXXXX X. XXXXXXX ("Executive").
RECITALS
A. The Company is engaged in the research, development and
commercialization of smoking cessation products and reduced-risk smoking
products, and the manufacture and sale of cigarettes.
B. The Company wishes to continue to employ Executive and to have the
benefit of his skills and services, and Executive wishes to continue employment
with the Company, as Chief Financial Officer of the Company on the terms and
subject to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. EMPLOYMENT AND DUTIES.
(a) POSITION. The Company hereby employs Executive, and Executive
hereby accepts employment with the Company, as Chief Financial Officer of the
Company.
(b) DUTIES. Executive agrees to devote his best efforts to perform all
duties assigned to him by the Board of Directors of the Company (the "Board of
Directors") and by Xxxxxx X. Xxxxxxxx, Chief Operating Officer of the Company,
in a trustworthy, businesslike and loyal manner.
(c) REPORTING. Executive shall report to the Board of Directors.
(d) PLACE OF EMPLOYMENT. Executive shall perform the services required
by this Agreement at the Company's offices in Petersburg, Virginia.
(e) CHANGE OF DUTIES. The duties of Executive may be modified from time
to time by the mutual consent of the Company and Executive without resulting in
a rescission of this Agreement. The mutual written consent of the Company and
Executive shall constitute execution of that modification. Notwithstanding any
such change, the employment of Executive shall be construed as continuing under
this Agreement as so modified.
(f) DEVOTION OF TIME TO COMPANY'S BUSINESS. During the Term of this
Agreement (as such term is defined in Section 1(g) hereof), Executive agrees (i)
to devote his entire productive time, ability and attention to the business of
the Company during normal working hours, (ii) not to engage in any other
business duties or business pursuits whatsoever, (iii) whether directly or
indirectly, not to render any services of a commercial or professional nature to
any individual, trust, partnership, company, corporation, business,
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organization, group or other entity (each, a "Person"), whether for compensation
or otherwise, without the prior written consent of the Board of Directors, and
(iv) whether directly or indirectly, not to acquire, hold or retain more than a
one percent (1%) interest in any business competing with or similar in nature to
the business of the Company or any of its Affiliates (as such term is defined
below); provided, however, the expenditure of reasonable amounts of time for
litigation support, book project, charitable, professional educational or
professional activities or, subject to the foregoing, the making of passive
personal investments shall not be deemed a breach of this Agreement or require
the prior written consent of the Company if those activities do not materially
interfere with the services required of Executive under this Agreement. For
purposes of this Agreement, "Affiliates" shall mean any Person that, directly or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, the Company.
(g) TERM. Unless sooner terminated as provided in Section 4 hereof, the
term of this Agreement shall be deemed to have commenced on October 15, 1998 and
shall continue for a term of eighteen (18) months (the "Initial Term"), and
shall be renewable for successive one (1) year terms (each, a "Renewal Term") at
the option of the Company. Notice of renewal or, if applicable, the Company's
option not to renew, shall be given to Executive in writing at least one hundred
twenty (120) days prior to the end of the Initial Term or the applicable Renewal
Term, as the case may be. The Initial Term, together with any Renewal Terms
shall be referred to in this Agreement as the "Term of this Agreement."
(h) OBSERVANCE OF COMPANY RULES, REGULATIONS AND POLICIES. Executive
shall duly, punctually and faithfully perform and observe any and all rules,
regulations and policies which the Company may now or hereafter reasonably
establish governing the conduct of its business or its employees to the extent
such rules, regulations and policies are not in conflict with this Agreement.
Executive shall promptly provide written notice to the Board of Directors of any
such apparent conflict of which Executive becomes aware.
2. COMPENSATION.
(a) BASE SALARY. During the Term of this Agreement, the Company shall
pay to Executive a base salary of two hundred thousand dollars ($200,000) per
year (the "Base Salary"), subject to increase from time to time in the good
faith discretion of the Board of Directors, payable in arrears on a regular
basis in accordance with the Company's standard payroll procedures in effect at
the time of payment.
(b) DISCRETIONARY BONUS. In addition to the Base Salary, the Company
shall pay to Executive such bonuses based on Executive's performance as the
Board of Directors shall determine from time to time in its sole discretion.
(c) SIGNING BONUS. In order to induce Executive to enter into this
Agreement, effective December 31 1998, Executive shall be entitled to a signing
bonus in the amount of eighty thousand dollars ($80,000) which shall be paid to
Executive on or before June 30, 1999.
(d) RESTRICTED STOCK GRANT. In order to encourage Executive's
contribution to the successful performance of the Company, Executive shall be
granted as of June 30, 2000, a total
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of one hundred thousand (100,000) shares of Common Stock of the Company (the
"Restricted Stock") subject to the conditions and restrictions set forth in a
restricted stock award agreement substantially in the form attached hereto as
Exhibit A, which agreement shall provide that restrictions shall lapse and
Executive shall become vested as to all such shares of Restricted Stock on
January 31, 2000.
(e) STOCK OPTION.
(i) NON-QUALIFIED STOCK OPTION. The parties acknowledge and
agree that, as additional incentive to Executive, Executive shall be granted,
immediately upon execution of this Agreement, a non-qualified stock option (the
"Option") to purchase two hundred thousand (200,000) shares of Common Stock of
the Company at an exercise price of Two Dollars ($2.00) per share pursuant to an
option agreement on the Company's standard form under its 1998 Stock Option Plan
(the "Plan"). Subject to the forfeiture provision and repurchase right of the
Company described below, the option agreement shall provide that:
(ii) VESTING. The Option shall be fully vested on October 15,
1999.
(iii) TERMINATION. To the extent not then fully vested, the
Option shall immediately terminate upon the earlier to occur of (A) Xxxxx 0,
0000, (X) the effective date of termination of this Agreement by the Company for
Cause (as such term in defined in Section 4(c) hereof) or by the Executive
without Good Reason (as such term in defined in Section 4(f) hereof), or (C) the
date of notice by the Company to Executive that, in the good faith determination
of the Board of Directors, Executive has breached his covenant not to compete
contained herein.
(iv) ACCELERATED TERMINATION AND FORFEITURE OF OPTION; COMPANY
REPURCHASE RIGHT. On the effective date of termination of this Agreement by the
Company for Cause or by the Executive without Good Reason, or as of the date of
notice by the Company to Executive that, in the good faith determination of the
Board of Directors, Executive has breached his covenant not to compete contained
herein, as the case may be, (A) the Option shall immediately terminate and
revert to the Company (including all vested but unexercised shares subject to
the Option); and (B) any and all shares issued upon exercise of the Option on or
prior to such effective date of termination or date of notice shall be subject
to a repurchase right in favor of the Company at a purchase price equal to the
exercise price of such shares.
(f) INCENTIVE PLANS. In addition to all other benefits and compensation
provided by this Agreement, Executive shall be eligible to participate in such
of the Company's equity, compensation and incentive plans as are generally
available to any of the management executives of the Company, including without
limitation any executive and performance bonus or incentive plans.
(g) VACATION. Executive shall be entitled to such annual vacation time
with full pay as the Company may provide in its standard policies and practices
for any other management executives; provided, however, that in any event
Executive shall be entitled to a minimum of fourteen (14) days annual paid
vacation time.
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(h) DIRECTORS AND OFFICERS LIABILITY INSURANCE. Executive shall be
entitled to continued participation in, and have the benefit of, directors and
officers liability insurance to the same extent such coverage is provided to the
Company's other management executives.
(i) HOUSING ALLOWANCE. The Company will reimburse Executive for his
reasonable and documented expenses for temporary housing in Petersburg,
Virginia, not to exceed Twenty Thousand Dollars ($20,000).
(j) AUTOMOBILE. The Company will furnish Executive with an automobile
and will reimburse Executive all reasonable costs and expenses relating to
Executive's use of the automobile, including without limitation, amounts
incurred for insurance, gas and general maintenance and repairs.
(k) MOBILE TELEPHONE. Executive shall have use of a wireless mobile
telephone of his choice and the Company will be responsible for payment of all
business usage charges and all usual operational and maintenance expenses
associated with the use by Executive of such telephone.
(l) OTHER BENEFITS. Executive shall participate in and have the
benefits of all present and future vacation, holiday, paid leave, unpaid leave,
life, accident, disability, dental, vision and health insurance plans, pension,
profit-sharing and savings plans and all other plans and benefits which the
Company now or in the future from time to time makes available to any of its
management executives.
(m) WITHHOLDING. The parties shall comply with all applicable
withholding requirements in connection with all compensation payable to
Executive.
3. EXPENSE REIMBURSEMENT.
(a) GENERAL BUSINESS EXPENSES. The Company shall reimburse Executive
for all business travel and other out-of-pocket expenses reasonably incurred by
Executive in the course of performing his duties hereunder this Agreement. All
reimbursable expenses shall be appropriately documented and shall be in
reasonable detail and in a format and manner consistent with the Company's
expense reporting policy, as well as applicable federal and state tax record
keeping requirements.
(b) PROFESSIONAL EDUCATIONAL EXPENSES AND FEES. In addition, the
Company shall reimburse Executive for (i) all reasonable expenses incurred for
continuing education courses required to maintain Executive's professional
status as a certified public accountant, and (ii) all reasonable professional
fees and dues associated with Executive's professional status as a certified
public accountant.
4. TERMINATION AND RIGHTS ON TERMINATION. This Agreement shall terminate
upon the occurrence of any of the following events:
(a) DEATH. Upon the death of Executive, in which event the Company
shall, within thirty (30) days of receiving notice of such death, pay
Executive's estate all salary then due and payable
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and all accrued vacation pay and bonuses, if any, in each case payable or
accrued through the date of death. Executive's estate shall not be entitled to
any severance compensation.
(b) DISABILITY. Upon the mental or physical Disability (as such term is
defined below) of Executive, in which event the Company shall, within thirty
(30) days following the determination of Disability, pay Executive all salary
then due and payable and all accrued vacation pay and bonuses, if any, in each
case payable or accrued through the date of determination. For purposes of this
Agreement, "Disability" shall mean a physical or mental condition, verified by a
physician designated by the Company, which prevents Executive from carrying out
one or more of the material aspects of his assigned duties for at least ninety
(90) consecutive days, or for a total of ninety (90) days in any six (6) month
period. Executive shall not be entitled to any severance compensation.
(c) TERMINATION BY THE COMPANY FOR CAUSE. Upon delivery by the Company
to Executive of a written notice terminating this Agreement for Cause (as such
term is defined below), which notice shall be supported by a reasonably detailed
statement of the relevant facts and reasons for termination, in which event the
Company shall, within thirty (30) days following such termination, pay Executive
all salary then due and payable through the date of termination. Executive shall
not be entitled to any severance compensation or any accrued vacation pay or
bonuses. For purposes of this Agreement, "Cause" shall mean:
(i) Executive shall have intentionally engaged in unfair
competition with the Company, intentionally induced any employee or any
significant customer, contractor, supplier, representative or distributor of the
Company to breach any contract with the Company, intentionally made an
unauthorized disclosure of material confidential information of the Company,
committed an act of dishonesty, fraud, embezzlement or theft or otherwise
engaged in misconduct with respect to the property, business or affairs of the
Company, or deliberately disregarded the rules, regulations and policies of the
Company, in any such event in such a manner as to cause material loss, damage or
injury to, or otherwise materially endanger or, in the sole judgment of the
Board of Directors, materially and adversely affect, the property, reputation,
operations or employees of the Company;
(ii) Executive shall have materially breached this Agreement
and such breach shall have continued for a period of ten (10) days after
delivery of written notice from the Company specifying such breach;
(iii) Executive shall have been grossly negligent in the
performance of his duties hereunder, intentionally not performed or misperformed
any of such duties, or refused to abide by or comply with the directives of the
Board of Directors, which action shall have continued for a period of ten (10)
days after delivery of written notice from the Company demanding such action
cease or be cured;
(iv) Executive shall have been found guilty of, or has plead
nolo contendere to, the commission of a felony offense or other crime involving
moral turpitude; or
(v) Executive shall have abused alcohol or drugs (legal or
illegal) that, in the sole judgment of the Board of Directors, materially
impairs Executive's ability to perform his duties hereunder.
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(d) TERMINATION BY THE COMPANY WITHOUT CAUSE. Thirty (30) days after
delivery by the Company to Executive of a written notice terminating this
Agreement for any reason without cause, in which event the Company shall, within
thirty (30) days following the effective date of termination, pay Executive a
lump sum equal to (i) all salary then due and payable and all accrued vacation
pay and bonuses, if any, in each case payable or accrued through the effective
date of termination, plus (ii) as severance compensation, an amount equal to
twelve (12) months of Executive's then Base Salary.
(e) VOLUNTARY TERMINATION BY EXECUTIVE. Thirty (30) days after delivery
by Executive to the Company of a written notice terminating this Agreement for
any reason without cause, in which event the Company shall, within thirty (30)
days following the effective date of termination, pay Executive all salary then
due and payable through the date of termination. Executive shall not be entitled
to any severance compensation or any accrued vacation pay or bonuses.
(f) TERMINATION BY EXECUTIVE FOR GOOD REASON. Thirty (30) days after
delivery by Executive to the Company of a written notice terminating this
Agreement for Good Reason (as such term is defined below), in which event the
Company shall, within thirty (30) days following the effective date of
termination, pay Executive such amounts in such manner as provided for in
Section 4(d) hereof. For purposes of this Agreement, "Good Reason" shall mean:
(i) The assignment of Executive to any duties inconsistent
with, or any adverse change in, Executive's positions, duties, responsibilities,
functions or status with the Company, or the removal of Executive from, or
failure to reelect Executive to, any of such positions; provided, however, that
a change in Executive's positions, duties, responsibilities, functions or status
that Executive shall agree to in writing shall not be an event of Good Reason or
give rise to termination under this Section 4(f);
(ii) A reduction by the Company of Executive's Base Salary
without his written consent;
(iii) The failure by the Company to continue in effect for
Executive any material benefit available to any of the management executives of
the Company, including without limitation, any retirement, pension or incentive
plans, life, accident, disability or health insurance plans, equity or cash
bonus plans or savings and profit sharing plans, or any action by the Company
which would adversely affect Executive's participation in or reduce Executive's
benefits under any of such plans or deprive Executive of any fringe benefit
enjoyed by Executive; or
(iv) Any other material breach by the Company of this
Agreement which is not cured within twenty (20) days of delivery of written
notice thereof by Executive to the Company.
(g) EFFECT OF TERMINATION; OPTIONS. All rights and obligations of the
Company and Executive under this Agreement shall cease as of the effective date
of termination, except that the obligations of the Company under this Section 4
and Executive's obligations under Sections 5 and 6 hereof shall survive such
termination in accordance with their respective terms. In addition,
notwithstanding anything to the contrary contained herein or in any agreement
with respect thereto, upon termination of Executive's employment pursuant to
this Section 4, all equity options, restricted
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equity grants and similar rights held by Executive with respect to securities of
the Company, including without limitation the Option, shall, to the extent not
then fully vested, immediately terminate and revert to the Company.
(h) NO TERMINATION BY MERGER, TRANSFER OF ASSETS OR DISSOLUTION. This
Agreement shall not be terminated by any dissolution of the Company resulting
from either merger or consolidation in which the Company is not the consolidated
or surviving corporation or other entity or transfer of all or substantially all
of the assets of the Company. In such event, the rights, benefits and
obligations herein shall automatically be deemed to be assigned to the surviving
or resulting corporation or other entity or to the transferee of the assets, as
the case may be, with the consent of Executive.
5. RESTRICTION ON COMPETITION.
(a) COVENANT NOT TO COMPETE. During the Term of this Agreement and for
a period of twelve (12) months from the termination of this Agreement, Executive
shall not, without the prior written consent of the Company, either directly or
indirectly, for himself or on behalf of or in conjunction with any other Person
(i) own, manage, operate, control, be employed by, participate in, render
services to, or be associated in any manner with the ownership, management,
operation or control of, any business similar to the type of business conducted
by the Company or any of its Affiliates within any of the geographic territories
in which the Company or any of its Affiliates conducts business, (ii) solicit
business of the same or similar type being carried on by the Company or any of
its Affiliates from any Person known by Executive to be a customer of the
Company or any of its Affiliates, whether or not Executive had personal contact
with such Person during and by reason of Executive's employment with the
Company, or (iii) endeavor or attempt in any way to interfere with or induce a
breach of any contractual relationship that the Company or any of its Affiliates
may have with any employee, customer, contractor, supplier, representative or
distributor.
(b) NO BREACH FOR ACTIVITIES DEEMED NOT COMPETITIVE. It is further
agreed that, in the event that Executive shall cease to be employed by the
Company and enter into a business or pursue other activities that, at such time,
are not in competition with the Company or any of its Affiliates, Executive
shall not be chargeable with a violation of this Section 5 if the Company
subsequently enters the same (or a similar) competitive business or activity. In
addition, if Executive has no actual knowledge that his actions violate the
terms of this Section 5, Executive shall not be deemed to have breached the
restrictive covenants contained herein if, promptly after being notified by the
Company of such breach, Executive ceases the prohibited actions.
(c) SEVERABILITY. The covenants in this Section 5 are severable and
separate, and the unenforceability of any specific covenant shall not affect the
provisions of any other covenant. If any provision of this Section 5 relating to
the time period or geographic area of the restrictive covenants shall be
declared by a court of competent jurisdiction to exceed the maximum time period
or geographic area, as applicable, that such court deems reasonable and
enforceable, such time period or geographic area shall be deemed to be, and
thereafter shall become, the maximum time period or largest geographic area that
such court deems reasonable and enforceable and this Agreement shall
automatically be considered to have been amended and revised to reflect such
determination.
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(d) FAIR AND REASONABLE. Executive has carefully read and considered
the provisions of this Section 5 and, having done so, agrees that the
restrictive covenants in this Section 5 impose a fair and reasonable restraint
on Executive and are reasonably required to protect the interests of the
Company, its Affiliates and their respective officers, directors, employees and
stockholders. It is further agreed that the Company and Executive intend that
such covenants be construed and enforced in accordance with the changing
activities, business and locations of the Company throughout the term of these
covenants.
6. CONFIDENTIAL INFORMATION.
(a) CONFIDENTIAL INFORMATION. Executive hereby agrees to hold in strict
confidence and not to disclose to any third party any of the valuable,
confidential and proprietary business, financial, technical, economic, sales
and/or other types of proprietary business information relating to the Company
or any of its Affiliates (including all trade secrets) in whatever form, whether
oral, written, or electronic (collectively, the "Confidential Information"), to
which Executive has, or is given (or has had or been given), access during the
course of his employment with the Company. It is agreed that the Confidential
Information is confidential and proprietary to the Company because such
Confidential Information encompasses technical know-how, trade secrets, or
technical, financial, organizational, sales or other valuable aspects of the
business and trade of the Company or its Affiliates, including without
limitation, technologies, products, processes, plans, clients, personnel,
operations and business activities. This restriction shall not apply to any
Confidential Information that (a) becomes known generally to the public through
no fault of the Executive, (b) is required by applicable law, legal process, or
any order or mandate of a court or other governmental authority to be disclosed,
or (c) is reasonably believed by Executive, based upon the advice of legal
counsel, to be required to be disclosed in defense of a lawsuit or other legal
or administrative action brought against Executive; provided, however, that in
the case of clause (b) or (c), Executive shall give the Company reasonable
advance written notice of the Confidential Information intended to be disclosed
and the reasons and circumstances surrounding such disclosure, in order to
permit the Company to seek a protective order or other appropriate request for
confidential treatment of the applicable Confidential Information.
(b) RETURN OF COMPANY PROPERTY. In the event of termination of
Executive's employment with the Company for whatever reason or no reason, (a)
Executive agrees not to copy, make known, disclose or use, any of the
Confidential Information without the Company's prior written consent, and (b)
Executive or Executive's personal representative shall return to the Company (i)
all Confidential Information, (ii) all other records, designs, patents, business
plans, financial statements, manuals, memoranda, lists, correspondence, reports,
records, charts, advertising materials and other data or property delivered to
or compiled by Executive by or on behalf of the Company or its respective
representatives, vendors or customers that pertain to the business of the
Company or any of its Affiliates, whether in paper, electronic or other form,
and (iii) all keys, credit cards, vehicles and other property of the Company.
Executive shall not retain or cause to be retained any copies of the foregoing.
Executive hereby agrees that all of the foregoing shall be and remain the
property of the Company and the applicable Affiliates and be subject at all
times to their discretion and control.
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7. CORPORATE OPPORTUNITIES.
(a) DUTY TO NOTIFY. During the Term of this Agreement, in the event
that Executive shall become aware of any business opportunity related to the
business of the Company, Executive shall promptly notify the Board of Directors
of such opportunity. Executive shall not appropriate for himself or for any
other Person other than the Company (or any Affiliate) any such opportunity
unless, as to any particular opportunity, the Board of Directors fails to take
appropriate action within thirty (30) days. Executive's duty to notify the Board
of Directors and to refrain from appropriating all such opportunities for thirty
(30) days shall neither be limited by, nor shall such duty limit, the
application of the general laws relating to the fiduciary duties of an agent or
employee.
(b) FAILURE TO NOTIFY. In the event that Executive fails to notify the
Board of Directors or so appropriates any such opportunity without the express
written consent of the Board of Directors, Executive shall be deemed to have
violated the provisions of this Section notwithstanding the following:
(i) The capacity in which Executive shall have acquired such
opportunity; or
(ii) The probable success in the hands of the Company of such
opportunity.
8. NO PRIOR AGREEMENTS. Executive hereby represents and warrants to the Company
that the execution of this Agreement by Executive, his employment by the
Company, and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other Person.
Further, Executive agrees to indemnify and hold harmless the Company and its
officers, directors and representatives for any claim, including, but not
limited to, reasonable attorneys' fees and expenses of investigation, of any
such third party that such third party may now have or may hereafter come to
have against the Company or such other persons, based upon or arising out of any
noncompetition agreement, invention, secrecy or other agreement between
Executive and such third party that was in existence as of the effective date of
this Agreement. To the extent that Executive had any oral or written employment
agreement or understanding with the Company, this Agreement shall automatically
supersede such agreement or understanding, and upon execution of this Agreement
by Executive and the Company, such prior agreement or understanding
automatically shall be deemed to have been terminated and shall be null and
void.
9. REPRESENTATION. Executive acknowledges that he (a) has reviewed this
Agreement in its entirety, (b) has had an opportunity to obtain the advice of
separate legal counsel prior to executing this Agreement, and (c) fully
understands all provisions of this Agreement.
10. ASSIGNMENT; BINDING EFFECT. Executive understands that he has been selected
for employment by the Company on the basis of his personal qualifications,
experience and skills. Executive agrees, therefore, that he cannot assign or
delegate all or any portion of his performance under this Agreement. This
Agreement may not be assigned or transferred by the Company without the prior
written consent of Executive. Subject to the preceding two sentences, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by
the parties hereto and their respective heirs, legal representatives,
successors, and assigns. Notwithstanding the foregoing, if Executive accepts
employment with an Affiliate, unless Executive and his new employer agree
otherwise in
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writing, this Agreement shall automatically be deemed to have been assigned to
such new employer (which shall thereafter be an additional or substitute
beneficiary of the covenants contained herein, as appropriate), with the consent
of Executive, such assignment shall be considered a condition of employment by
such new employer, and references to the "Company" in this Agreement shall be
deemed to refer to such new employer.
11. COMPLETE AGREEMENT; WAIVER; AMENDMENT. This Agreement is not a promise of
future employment. Executive has no oral representations, understandings or
agreements with the Company or any of its officers, directors or representatives
covering the same subject matter as this Agreement. This Agreement is the final,
complete and exclusive statement and expression of the agreement between the
Company and Executive with respect to the subject matter hereof and thereof, and
cannot be varied, contradicted, or supplemented by evidence of any prior or
contemporaneous oral or written agreements. This Agreement may not be later
modified except by a further writing signed by a duly authorized officer of the
Company and Executive, and no term of this Agreement may be waived except by
writing signed by the party waiving the benefit of such term.
12. NOTICE. All notices, requests, demands and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
given or made by personally delivering the same to or sending the same by
prepaid certified or registered mail, return receipt requested, or by reputable
overnight courier, or by facsimile machine to the party to which it is directed
at the address set out on the signature page to this Agreement or at such other
address as such party shall have specified by written notice to the other party
as provided in this Section, and shall be deemed to be given if delivered
personally at the time of delivery, or if sent by certified or registered mail
as herein provided three (3) days after the same shall have been posted, or if
sent by reputable overnight courier upon receipt, or if sent by facsimile
machine as soon as the sender receives written or telephonic confirmation that
the facsimile was received by the recipient and such facsimile is followed the
same day by mailing by prepaid first class mail.
13. SEVERABILITY; HEADINGS. If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be deemed valid and
operative and, so far as is reasonable and possible, effect shall be given to
the intent manifested by the portion held invalid and inoperative. This
severability provision shall be in addition to, and not in place of, the
provisions of Section 5(c) above. The Sections headings herein are for reference
purposes only and are not intended in any way to describe, interpret, define or
limit the extent or intent of this Agreement or of any part hereof.
14. EQUITABLE REMEDY. Because of the difficulty of measuring economic losses to
the Company as a result of a breach of the restrictive covenants set forth in
Sections 5 and 6 hereof, and because of the immediate and irreparable damage
that would be caused to the Company for which monetary damages would not be a
sufficient remedy, it is hereby agreed that in addition to all other remedies
that may be available to the Company at law or in equity, the Company shall be
entitled to specific performance and any injunctive or other equitable relief as
a remedy for any breach or threatened breach of the aforementioned restrictive
covenants.
15. ARBITRATION. Any unresolved dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted in accordance with the rules of the American Arbitration Association
then in effect. The arbitrators shall not have the authority to add
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to, detract from, or modify any provision hereof nor to award punitive damages
to any injured party. A decision by a majority of the arbitration panel shall be
final and binding. Judgment may be entered on the arbitrators' award in any
court having jurisdiction. The arbitration proceeding shall be held in the city
where the principal office of the Company is located. Notwithstanding the
foregoing, the Company shall be entitled to seek injunctive or other equitable
relief, as contemplated by Section 14 hereof, from any court of competent
jurisdiction, without the need to resort to arbitration. Should judicial
proceedings be commenced to enforce or carry out this provision or any
arbitration award, the prevailing party in such proceedings shall be entitled to
reasonable attorneys' fees and costs in addition to other relief.
16. GOVERNING LAW. This Agreement shall in all respects be construed according
to the laws of the Commonwealth of Virginia, without regard to its conflict of
laws principles.
17. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which may be executed by less than all of the parties to this Agreement,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
18. SIGNATURES. The parties shall be entitled to rely upon and enforce a
facsimile of any authorized signatures as if it were the original.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COMPANY: EXECUTIVE:
STAR SCIENTIFIC, INC.
By:
(Signature) XXXXX X. XXXXXXX
0000 Xxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
(Print Name and Title)
Star Scientific, Inc.
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
