EMPLOYMENT AGREEMENT
This
Employment Agreement (this “Agreement”) is made and entered into on the
30th
day of
October, 2007 (the “Effective Date”), by and between BIO
SOLUTIONS MANUFACTURING, INC.,
a
New
York corporation (hereafter referred to as the “Company”), and XXXXX
X. XXXXXXX (hereafter
referred to as “Executive”). The Company and Executive may sometimes hereafter
be referred to singularly as a “Party” or collectively as the
“Parties.”
W
I T N E S S E T H:
1.
Employment and Duties of Executive
On
the
terms and subject to the conditions hereinafter set forth, the Company employs
Executive as its President and Chief Executive Officer and the Executive will
serve as the Company’s employee in that position. It is expressly acknowledged
and understood that the Executive has been employed by the Company as its
President and Chief Executive Officer since on or about May 27, 2005. Executive
shall also have such additional powers, authority, functions, duties, and
responsibilities as may be reasonably assigned to him, from time to time, by
the
Board of Directors of the Company (the “Board”).
2.
Place of Employment
The
required duties of Executive under this Agreement shall be performed by
Executive at the Company’s registered office in or near Estero, Florida, and in
such other place or places to which Company may, from time to time, request
Executive to travel in connection with Executive’s duties under this Agreement.
It is understood and agreed that the Estero, Florida office will contain, at
a
minimum, an office, a telephone answering reception service, and access to
a
conference room
3.
Time to be Devoted to Contractual Duties of Executive
Executive
shall give his best efforts and endeavors, on a full time basis, to the
discharge of his duties under this Agreement and shall not, at any time during
the Term (as defined in Agreement Paragraph 4), engage in any business activity
other than the business activities permitted or required hereunder, or enter
into the services of or be employed in any capacity or for any purpose by any
individual, firm, association, organization, partnership (general or limited),
corporation, limited liability company, or other party or legal entity other
than the Company (or any affiliate of the Company), on a fee or salary or other
compensatory basis, it being the intention of the Company and Executive that
the
capacity in which Executive is hired by the Company under this Agreement
represents a full-time duty and responsibility. The foregoing shall not be
interpreted to (a) prohibit Executive from engaging in recreational, charitable,
religious, or community service activities outside the scope of Executive’s
employment under this Agreement, or from making passive investments in
businesses or enterprises, (b) prohibit Executive from holding stock or other
equity interests in a publicly traded entity (even if such entity is competitive
with the Company so long as such ownership does not exceed one percent (1%))
or
(c) any other arrangement approved in writing by the Company’s Board of
Directors.
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4.
Term of Employment
The
term
of the Company’s employment of Executive shall be for a period of three (3)
years from the Effective Date (such period being referred to as the “Initial
Term”). After the expiration of the Initial Term, the employment of Executive
shall continue for successive three (3) month periods. The Initial Term
plus
any
period or periods of time during which the employment of Executive continues
with the Company after the expiration of the Initial Term is sometimes referred
to as the “Term.”
5.
Compensation of Executive
A. As
compensation for the services and duties performed and to be performed by
Executive as provided in this Agreement, the Company agrees to pay Executive
a
salary in the amount of Seventy Five Thousand dollars ($75,000) per annum,
less
applicable withholding, F.I.C.A., and other lawful deductions, such salary
to be
payable semi-monthly, in equal installments, in arrears, and otherwise in
accordance with the Company’s payroll policies in effect from time to time;
provided,
however,
this
base salary shall be increased to One Hundred Fifty Thousand dollars ($150,000)
per annum upon closing of a private placement of the Company’s debt or equity
securities resulting in gross proceeds to the Company of at least
$4,000,000.
B. Executive
will be entitled to receive a bonus in the amounts set forth on Appendix A
hereto. It is understood and agreed that the “Gross Revenue Target” need not be
met each year to trigger the bonus payment for each year; rather the bonus
payout will be reduced (or increased) proportionately for any such percentage
shortfall (or increase) of the Gross Revenue Target for such year. See Appendix
A for examples. Any bonus payment earned under this Section may be payable
in
cash, options, or common stock, in the discretion of the Board.
C. Employee
shall be granted stock awards of the Company’s common stock, $.001 par value
(“Common Stock”) and options to purchase shares of Common Stock as set forth on
Appendix B hereto. The stock awards and stock options shall be granted pursuant
to a stock incentive plan (“Plan”) to be adopted by the Company and shall become
effective as of the effective date of the Plan. The
stock
awards and stock option awards granted under this section shall be subject
to
the terms, definitions, and provisions of the Plan and any separate award
agreement or option agreement (each an “Award Agreement”) by and between you and
the Company relating to the stock award or the stock option award.
D. Executive
shall also receive a one time bonus in an amount equal to Seventy Five Thousand
dollars ($75,000), which reflects payment equal to the salary set forth in
Section 5.A. above, for services rendered since the beginning of the Company’s
2007 fiscal year.
E. Executive
shall be authorized to incur, and shall be entitled to receive prompt
reimbursement for, all reasonable expenses incurred by Executive in performing
his duties and carrying out the responsibilities hereunder, including business
meals, entertainment, and travel expenses (which includes business class airfare
and four star hotel accommodations), provided that Executive complies with
all
of the applicable policies, practices and procedures of the Company related
to
the submission of expense reports, receipts, or similar documentation of those
expenses.
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The
Company shall either pay directly, or reimburse Executive for such expenses
in
accordance with Company policies.
F. In
addition to the amounts set forth above, for the term of Executive’s employment,
the Company agrees to provide to Executive, at the Company’s sole expense,
health insurance coverage for Executive (with any such coverage for Executive’s
dependents, if desired by Executive, to be provided at the Company’s sole
expense) under the health insurance plan maintained by the Company from time
to
time. The Company shall also provide, at the Company’s sole expense, life
insurance coverage on Executive’s life in a face amount at least equal to base
salary, and shall also provide Executive with both long term and short term
disability insurance for Executive in amounts and under terms acceptable to
the
Company, all at the Company’s sole cost and expense. Also, Executive shall have
the option to participate in any salary deferral, 401(k), SEP, or savings plan
or other similar plan which the Company or its successors or assigns makes
available to its employees. Executive shall be required to comply with the
conditions attendant to coverage by such plans and shall comply with and be
entitled to benefits only in accordance with the terms and conditions of such
plans as they may be amended from time to time.
G. The
Company shall use commercially reasonable efforts to purchase and maintain
a
Directors and Officers liability insurance policy on terms and conditions deemed
acceptable by the Board of Directors, acting in good faith, which policy shall
cover Executive at all times during his employment Term, including any Renewal
Term(s). Such liability insurance shall be at a value of a minimum of One
Million dollars ($1,000,000). It is understood and agreed that the Company
will
not be required to procure insurance per this paragraph until the Company has
working capital (as set forth in its financial statements filed with the
Securities and Exchange Commission) in excess of $450,000.
H. During
the Term, Executive shall be entitled to three (3) weeks of annual vacation
time
per calendar year determined in accordance with the vacation policies of the
Company from time to time in effect.
I. No
additional compensation (above the compensation referred to in this
Paragraph 5) shall be due or payable by Company to Executive under this
Agreement, but nothing in this Agreement shall prohibit the Company from paying
Executive any additional amount as a bonus or otherwise, as the Company may
determine from time to time.
6.
Covenants,
Representations, and Warranties of Executive
A. Executive
covenants, agrees, and promises that during the Term: (a) except as
permitted under this Agreement, Executive will not engage, directly or
indirectly, in any business other than the business of the Company, except
at
the direction of or with the prior written approval of the Company;
(b) Executive will truthfully and accurately make, maintain, and preserve
all records and reports that the Company may from time to time request or
require; (c) Executive will fully account for all money, records, goods, wares,
merchandise, and other property belonging to the Company and/or to the Company’s
clients of which Executive has custody, and will pay over and/or deliver same
promptly whenever and however Executive may be directed to do so;
(d) Executive
will (i) make reasonable efforts to obey all rules, regulations, and special
instructions applicable to him and (ii) be loyal and faithful to the Company
at
all times; and (e) Executive agrees that upon termination of his employment
under this Agreement for any reason he will immediately surrender and turn
over
to the Company all books, records, forms, mailing lists, client lists, potential
client lists, specifications, formulae, data, processes, papers, and writings
related to the Company’s business and all other property belonging to the
Company together with, except as hereinafter set forth, all copies of the items
mentioned in this Agreement Paragraph 6.A., it being understood and agreed
that
the same are the Company’s sole property.
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B. Executive
hereby represents and warrants to Company that (a) Executive is experienced
in
the subject matter of this Agreement and fully competent to exercise and
discharge his duties and obligations under this Agreement, and (b) the execution
of this Agreement by Executive does not violate the terms or conditions of
any
prior employment agreements to which Executive has been a party, and at the
time
of execution of this Agreement, Executive is not a party to any other employment
or consulting agreement and any other employment agreement between the
Executive, on the one hand, and the Company (and/or its affiliates), is
terminated and the Company (and/or its affiliates) is (are) released from all
obligations thereunder.
7.
Termination
A. The
employment of Executive may be terminated upon the occurrence of any one of
the
following events:
(a) Business
Reason.
The
Company may, at its election, and for any reason (i.e., any lawful reason other
than Cause) and effective immediately (or such longer period as determined
by
the Company in its sole discretion), terminate Executive’s employment upon
written notice to Executive. Executive, effective no less than thirty (30)
days
after written notice thereof to the Company, may resign his employment with
the
Company. A
resignation for “Good Reason” shall mean a resignation of your employment within
sixty (60) days of the occurrence of any of the following events: (i) without
your written consent, a material reduction of your duties, position, or
responsibilities; (ii) without your written consent, a significant reduction
by
the Company in your base salary as in effect immediately prior to such
reduction; or (iii) without your written consent, a requirement that you
relocate your office to a location more than seventy (70) miles from its
then-current location. A resignation of your employment for any other reason
or
in any other circumstances will be a resignation “Without Good
Reason.”
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(b) With
Cause.
The
Company may, upon written notice effective immediately, terminate the employment
of Executive at any time during the Term for “Cause.” For purposes of this
Agreement, “Cause” shall mean the following: (i)
if
Executive should be convicted of or pleads nolo
contendre
to any
felony offense or to a crime of moral turpitude (whether or not a felony);
(ii)
if
Executive should be unable or incapable of performing the essential functions
of
his job position for a period of thirty (30) consecutive days in any twelve
(12)
month period, or one hundred twenty (120) days during any twelve (12) month
period, whether or not such days are consecutive (as used herein, “unable or
incapable of performing essential job functions” shall mean the inability of
Executive, on account of a mental, physical, or other condition, to perform
his
essential job functions as determined by at least two of three medical
physicians or by agreement of the Company and Executive or his designee (if
the
determination is to be made by medical physicians, the Executive or his designee
shall appoint one such physician, the Company shall appoint one, and the two
so
appointed shall appoint the third medical physician)); (iii) if Executive should
(1) misappropriate funds or property of the Company, or of any affiliate of
the Company, (2) secure or attempt to secure personally any profit in
connection with any transaction entered into on behalf of the Company or of
any
affiliate of the Company, or (3) make any material misrepresentation to the
Company or any affiliate of the Company; (iv) if Executive fails to comply
with
any of his duties and obligations under this Agreement and such failure
continues for fifteen (15) days after written notice to Executive from the
Company of such failure; (v) if
Executive fails to comply with the Conflict of Interest Guidelines attached
as
Exhibit “A”
to this
Agreement, and such failure continues for five (5) days after notice to
Executive; (vi) if
Executive shall give notice of resignation under Paragraph 7.A(a); or (vii)
if
Executive commits an act involving dishonesty, theft, or conduct that one could
reasonably expect to impair or injure the reputation of, or harm, the Company
or
any affiliate of the Company.
(c) Death
of Executive.
This
Agreement will terminate automatically on the death of the
Executive.
B. In
the
event of the termination of the employment of Executive, Executive shall be
entitled to compensation under Paragraph 5.A earned by him prior to the
date of termination as provided herein. In the event of the termination of
employment of Executive following an acquisition by an unaffiliated company,
Executive shall be entitled to compensation under Paragraph 5.A through the
end
of the Initial Term. Additionally, if during the Initial Term, the Executive
resigns with Good Reason or the Company terminates Executive’s employment with
the Company for any
reason
other
than under Paragraph 7.A(b)(i), 7.A.(b)(iii), 7.A.(b)(iv), 7.A.(b)(v), or
7.A.(b)(vii) or if during the Initial Term, Executive’s employment with the
Company is terminated due to Executive’s death under Paragraph 7.A(c), then
Executive (or his estate, as applicable) shall be entitled to and shall receive,
as his or its sole and exclusive remedy (Executive hereby waiving all other
rights or remedies in the event of such a termination), a severance payment
equal to (i) twelve (12) months’ of Executive’s base salary (computed using the
annual compensation then payable to Executive under Paragraph 5.A) for
twelve (12) months (the “Severance Period”) and (ii) all Bonus and Option
Payments which would have been earned and accrued during the Severance Period
(based on historical performance of the Company during the Initial Term to
date
of termination), which shall be paid monthly following the termination of
employment for the balance of the Initial Term. Additionally, in the event
the
Company terminates Executive’s employment under Paragraph 7.A(a) hereof, the
duration of Executive’s covenants under Paragraph 10 hereof shall last until the
expiration of six (6) months from the date of such termination (however, the
Company may extend the duration of such covenant to up to twelve (12) months
from the date of such termination by increasing the severance payment payable
to
Executive under the immediately preceding sentence to up to twelve (12) month’s
base salary - but the Company shall be under no obligation to do so).
If: (i) Executive resigns from his employment with the Company under
Paragraph 7.A(a) at any time; or (ii) during the Initial Term, the
Company terminates the employment of Executive pursuant to Paragraph 7.A(b)(i),
7.A(b)(iii), 7.A(b)(iv), 7.A(b)(v), 7.A(b)(vi), or 7.A(b)(vii); or
(iii) subsequent to the Initial Term, the Company terminates the employment
of Executive pursuant to any provision of Paragraph 7.A(b); or (iv) subsequent
to the Initial Term, Executive’s employment with the Company is terminated due
to Executive’s death under Paragraph 7.A(c), then the Company shall have the
obligation to pay to Executive all amounts earned under Paragraph 5.A prior
to the termination of employment, but the Company shall have no obligation
to
pay Executive any amount otherwise coming due and payable under this Agreement
after the date of such termination and Executive shall be entitled to no other
or further compensation as of the date of termination of his employment or
thereafter. Additionally, if, after the Initial Term, the Company (but
not
Executive) terminates Executive’s employment under Paragraph 7.A(a) or
Paragraph 7.A.(b)(ii), Executive shall be entitled, as his sole and exclusive
remedy (Executive hereby waiving all other rights or remedies in the event
of
such a termination) a severance payment equal to six (6) month’s salary (based
on the annual compensation payable to Executive under Paragraph 5.A), which
shall be paid monthly for six (6) months following the termination of
employment; provided, however, if Executive becomes employed or otherwise earns
income from sources other than the Company during such six (6) month period,
then the Company’s obligation to pay such severance payment shall be reduced
dollar for dollar by each dollar received by Executive during such six (6)
month
period.
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C. If
your
employment with the Company is terminated by the Company “Without Cause” (as
defined herein) or if you resign “With Good Reason” you shall be entitled to the
same level of health (i.e. medical, vision and dental) coverage and benefits
as
in effect for you on the day immediately preceding the day of termination of
employment; provided, however that (A) you constitute a qualified beneficiary,
as defined in Section 4980B(g)(1) of the Internal Revenue Code of 1986, as
amended; and (B) you elect continuation coverage pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), within the time
period prescribed pursuant to COBRA. The Company shall continue to provide
you
with such health coverage until the earlier of (i) the date you are no longer
eligible to receive continuation coverage pursuant to COBRA, or (ii) twelve
(12)
months from the termination date.
8.
Confidential Information; Ideas
A.
The
Company promises that it will give Executive access to some or all of its
Confidential Information (as defined in this Paragraph 8.A.) during his
employment under this Agreement, including, without limitation, certain trade
secrets, know-how, mailing lists, clients lists, potential client lists,
employee records, and other sensitive, proprietary, or confidential information
and knowledge concerning the business of the Company, and/or affiliates of
the
Company (hereafter collectively referred to as “Confidential Information”) which
the Company desires to protect. Executive understands that such Information
is
sensitive, proprietary, or confidential, and he agrees that he will not, at
any
time (and whether during or after Executive’s employment with the Company),
reveal such Confidential Information to anyone outside the Company. The term
“Confidential Information,” as used in this Agreement, shall not include
information that (a) is already known to Executive from sources other than
the Company; (b) is or becomes generally available to the public other than
as a result of a disclosure by Executive; (c) is disclosed to Executive by
a person or entity who is not bound by any agreement regarding the confidential
nature of such information; or (d) is required to be disclosed by law or by
regulatory or judicial process. The provisions of this Paragraph 8 shall survive
any termination or expiration of this Agreement, and the termination of
Executive’s employment with the Company (for whatever cause or
reason).
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B. Executive
agrees that all ideas, improvements, inventions, discoveries, systems,
techniques, formulas, devices, methods, processes, programs, designs, models,
prototypes, copyrightable works, mask works, trademarks, service marks, trade
dress, software programs, hardware improvements, business slogans, and other
things of value conceived, reduced to practice or made or learned by Executive,
either alone or with others, while employed by the Company and for twelve (12)
months thereafter that relate to the Company's business and/or the business
of
affiliates of the Company (hereinafter collectively referred to as the “Ideas”)
belong to and shall remain the sole and exclusive property of the Company
forever. Further, Executive agrees to promptly and fully disclose to the
Company’s President such Ideas in writing. In addition, Executive agrees,
without additional compensation, to cooperate and do any and all lawful things
requested by Company necessary or useful to ensure that the ownership by the
Company of such Ideas is protected. This cooperation includes, but is not
limited to, executing all documents required by the Company, and otherwise
assisting Company to vest title of such Ideas in Company and to obtain, maintain
and enforce for Company’s benefit, any patents, copyrights, mask work
registration, trade and service xxxx registrations, or other legal protection
for any Ideas in any and all countries, during or after employment with Company.
Executive will continue to assist Company as provided in the preceding sentence
even after termination of Executive’s employment with Company, but Company shall
compensate Executive at a reasonable rate after his termination for the time
actually spent by Executive in response to a written request by Company.
If
Company is unable for any reason to secure Executive's signature on any document
needed in connection with the actions specified in the preceding paragraph,
Executive hereby irrevocably designates and appoints Company and its duly
authorized officers and agents as Executive's agent and attorney-in-fact to
act
for and on Executive's behalf to execute, verify, and file any such documents
and to do all other lawfully permitted acts to further the purposes of the
preceding paragraph with the same legal force and effect as if executed by
Executive. Executive hereby waives and quitclaims to Company any and all claims,
of whatever nature, which Executive has or may have later for infringement
of
any proprietary rights assigned by Executive to Company. Executive hereby
assigns to the Company all of Executive’s right, title, and interest in and to
all such Ideas and all patents, trademarks, copyrights, other registrations,
and
applications which may be obtained as a result of the Ideas, throughout the
United States and all foreign countries. Executive agrees that no Ideas shall
be
regarded as having been conceived, reduced to practice, made, or learned by
Executive prior to Executive's employment. Executive's
obligations under this Agreement shall continue after his termination of
employment with the Company. This Agreement shall inure to the benefit of
Company, its successors (including by merger) and assigns, and is binding upon
the assigns, executors, and administrators and other legal representatives
of
Executive.
9.
Arbitration
A. If
any
dispute between the Company and Executive arises out of or is related to this
Agreement, Executive’s employment, or Executive’s separation from employment
with Company for any reason, and the parties to this Agreement cannot resolve
the dispute, the Company and Executive shall submit the dispute to final and
binding arbitration. The arbitration shall be conducted in accordance with
the
American Arbitration Association’s (“AAA”) National Rules for the Resolution of
Employment Disputes (“Rules”). If the parties cannot agree to an arbitrator, an
arbitrator will be selected through the AAA’s standard procedures and Rules.
Company and Executive shall share the costs of arbitration, unless the
arbitrator rules otherwise. Company and Executive agree that the arbitration
shall be held in New York, New York.
Arbitration of the parties’ disputes is mandatory, and in lieu of any and all
civil causes of action or lawsuits either party may have against the other
arising out of or related to this Agreement, Executive’s employment, or
Executive’s separation from employment with Company, with the exception that
Company alone may seek a temporary restraining order and temporary injunctive
relief in a court to enforce the protective covenants as provided in Agreement
Paragraph 10.C..
Executive acknowledges that by agreeing to this provision, he knowingly
and voluntarily waives
any right he may have to a jury trial based on any claims he has, had, or may
have against the Company,
including any right to a jury trial under any local, municipal, state or federal
law including, without limitation, claims under Title VII of the Civil Rights
Act of 1964, 42 U.S.C. Section 1981, the Americans With Disabilities Act of
1990, the Age Discrimination In Employment Act of 1967, the Family Medical
Leave
Act, the Xxxxxxxx-Xxxxx Act, the Older Workers Benefit Protection Act, claims
of
harassment, discrimination or wrongful termination, and any other statutory
or
common law claims.
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B. Before
the arbitration hearing is conducted, the arbitrator shall have the authority
to
consider and grant a motion to dismiss and motion for summary judgment by
applying the standards governing these motions under Federal Rules of Civil
Procedure 12 and 56. The arbitrator shall issue a written decision and award,
which shall explain the basis of the decision. The decision and award shall
be
exclusive, final, and binding on both Executive and the Company, and all heirs,
executors, administrators, successors, and assigns.
C. Both
Executive and the Company understand that, by agreeing to arbitration, they
are
agreeing to substitute one legitimate dispute resolution forum (arbitration)
for
another (litigation), and thereby are waiving the right to have disputes
resolved in court
10.
Restrictive Covenants
A. As
an
inducement for Company’s agreement to employ Executive, to provide Executive
with trade secrets and other Confidential Information, and to enter into this
Agreement, Executive hereby agrees that during the Term, and for a period of
twenty-four (24) full calendar months after (i) the expiration of the Term
(as
the same may be extended) or (ii) the termination of Executive’s employment with
the Company for whatever reason or cause (whichever may occur later), or for
the
maximum period of time permitted by law, whichever is less, Executive shall
not,
whether for profit or not, whether on his own behalf or on behalf of any person
or firm in any capacity whatsoever, engage in the “Prohibited Activity” (as
hereinafter defined) within the “Relevant Geographical Area” (as hereinafter
defined), unless approved in writing by the Company’s Board of Directors.
Serving as a partner, member, trustee, receiver, custodian, manager,
stockholder, officer, director, owner, joint venturer, associate, employee,
consultant, adviser or in any other capacity whatsoever with respect to any
person or firm engaged in the Prohibited Activity within the Relevant
Geographical Area shall be conclusively deemed engagement in the Prohibited
Activity within the Relevant Geographical Area regardless of whether such
service is for profit or whether such person or firm engages in the Prohibited
Activity for profit . In this Agreement, the phrase “Prohibited Activity” shall
mean, directly or indirectly: (i) soliciting the Company’s customers; or (ii)
working independently or for any person or firm involved in any business engaged
in by the Company and/or by any of its subsidiaries or affiliates during the
Term. For purposes of this Agreement, the phrase “Relevant Geographical Area”
shall mean the area within political boundaries of the State of Florida and
any
and all other areas in which the Company or any of its subsidiaries or
affiliates transact business; provided, however, if the geographic area defined
in this Agreement Paragraph 10.A. exceeds the maximum geographic area permitted
by law or for any other reason does not state a geographic area within which
the
provisions of this Paragraph 10 A. are enforceable, then the provisions of
this
Paragraph 10 A. shall apply within the maximum geographic area permitted by
law in which such provisions are enforceable.
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B. As
an
inducement for Company’s agreement to employ Executive, to provide Executive
with trade secrets and other Confidential Information, and to enter into this
Agreement, Executive hereby agrees that during the Term, and for a period of
twenty-four (24) full calendar months after: (i) the expiration of the Term
(as
the same may be extended) or (ii) the termination of Executive’s employment with
the Company for whatever reason or cause (whichever may occur later), or for
the
maximum period of time permitted by law, whichever is less, Executive shall
not
induce or attempt to influence or persuade any employee of Company or any of
its
affiliates to terminate his employment with the Company (or with the applicable
affiliate).
C. In
addition to all other remedies at law and in equity which the Company might
have
for Executive’s breach of the covenants set forth in this Paragraph 10, the
Parties agree that in the event of any breach or attempted or threatened breach
of any such covenant, the Company shall also have the right to obtain a
temporary restraining order, temporary injunction and permanent injunction
against Executive prohibiting such breach or attempted or threatened breach,
merely by proving the existence of such breach, or attempted or threatened
breach (by a preponderance of the evidence) and without the necessity of proving
either inadequacy of legal remedy or irreparable harm.
D. Executive’s
covenants set forth in this Paragraph 10 are independent and severable from
every other provision of this Agreement; and the breach of any other provision
of this Agreement by the Company or any other agreement between Executive and
the Company shall not affect the validity of the provisions of this Paragraph
10
or constitute a defense of Executive in any suit or action brought by the
Company to enforce the provisions of this Paragraph 10 or to seek any relief
from Executive’s breach thereof.
E. Each
of
the Parties agree and stipulate that: (i) the agreements and covenants not
to
compete contained in this Paragraph 10 are fair and reasonable in light of
all
of the facts and circumstances of the relationship between Executive and the
Company; (ii) the consideration provided by the Company is not illusory; and
(iii) the consideration given by the Company under this Agreement gives rise
to
the Company’s interest in restraining and prohibiting Executive from engaging in
the Prohibited Activity within the Relevant Geographical Area as provided under
this Paragraph 10 and the covenants not to engage in the Prohibited Activity
within the Relevant Geographical Area pursuant to this Paragraph 10 are designed
to enforce such consideration. The Parties are aware, however, that in certain
circumstances, courts have refused to enforce certain agreements not to compete.
Therefore, in furtherance of and not in derogation of the provisions of the
preceding sentence, the Parties agree that if a court should decline to enforce
the any of the provisions of this Paragraph 10, such affected provisions shall
be deemed to be modified to restrict competition with the Company to the maximum
extent, in both time and geography, which the court shall find enforceable.
The
provisions of this Paragraph 10 shall survive any termination or expiration
of
this Agreement, and the termination of Executive’s employment with the Company
(for whatever cause or reason, as modified by Paragraph 7.B of this
Agreement).
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11.
Notice
Any
and
all notices permitted or required to be given under the terms of this Agreement
shall be in writing and may be served by certified mail, with return receipt
requested and proper postage prepaid, addressed to the Party to be notified
at
the appropriate address specified below, or by delivering the same in person
to
such Party, or by prepaid telegram addressed to the Party to be notified at
said
address, or by Federal Express or another nationally recognized courier service
addressed to the Party to be notified at said address. Notice given by certified
mail as aforesaid shall be deemed given and received three (3) days after
mailing, whether or not actually received. Any notice given in any other above
authorized manner shall be deemed received upon actual receipt; but shall also
be deemed received upon attempted delivery if such delivery is not accepted.
The
addresses of the parties are as follows:
|
If
to the Company:
|
|
|
0000
Xxxxxxx Xxxxxx, #0
|
|
|
Xxx
Xxxxx, XX 00000
|
|
|
Attention:
Secretary
|
|
|
If
to Executive:
|
Xxxxx
Xxxxxxx
|
|
0000
Xxxxxxxxxxxx Xxxxx Xxxxx
|
|
|
Xxxxxxxxx
0
|
|
|
Xxxxxx,
XX 00000
|
The
address of any Party may be changed by notice given in the manner provided
in
this Paragraph.
12.
General Provisions
A. This
Agreement may not be assigned by Executive. This Agreement may be assigned
in
whole or in part by the Company. Executive expressly agrees to honor and accept
such assignment or other transfer and, upon the consummation thereof, to attorn
to the Company’s assignee and to perform his duties and obligations hereunder
for the benefit of the Company’s assignee as if the Company’s assignee were the
Company named herein. Executive further agrees that, upon the consummation
of
such assignment or other transfer, all references herein to the Company shall
become and shall be deemed to be references to the Company’s assignee and the
Company shall be relieved of all obligations hereunder.
B. This
Agreement shall be governed by, construed, and enforced in accordance with
the
internal, local laws of the State of New York (without regard to conflicts
of
law rules).
10
C. The
Company agrees to provide to the Executive all rights of indemnification to
the
fullest extent permitted by law and by the Company’s certificate of
incorporation and bylaws as well as advancement of attorneys’ fees and costs as
incurred during the pendency of a claim or action. The Company agrees to
maintain directors’ and officers’ insurance for the benefit of the Executive
providing coverage identical to that of other senior executive officers of
the
Company on the terms and conditions set forth in Section 5.G. of this Agreement.
The indemnification and directors’ and officers’ coverage shall extend to
actions and services undertaken or performed by the Executive or omissions,
not
only as an employee of the Company, but as an employee, agent, director, or
consultant of any other entity for which the Executive renders services at
the
request of the Company.
D. This
Agreement contains the entire agreement between the Parties relative to the
subject matter hereof and supersedes and replaces all prior communications
and
agreements (oral or written) between Executive and the Company. No variation,
modification, or change of this Agreement shall be binding upon either Party
hereto unless set forth in a document duly executed by both
Parties.
E. This
Agreement is intended to express the Parties’ mutual intent, and irrespective of
the Party preparing this document, no rule of construction shall be applied
against such Party, as both Parties have actively participated in the
preparation and negotiation of this Agreement.
F. No
consent or waiver, express or implied, by a Party to or of any breach or default
by the other Party in the performance by the other Party of its obligations
under this Agreement shall be deemed or construed to be a consent or waiver
to
or of any other breach or default in the performance by such other Party of
the
same or any other obligation of such Party under this Agreement (e.g., any
waiver or consent from the Company with respect to any term or provisions of
this Agreement or any other aspect of Executive’s conduct or employment shall be
effective only in the specific instance and for the specific purpose for which
given and shall not be deemed, regardless of frequency given, to be a further
or
continuing waiver or consent and the failure or delay of the Company at any
time
or times to require performance of, or to exercise any of its powers, rights,
or
remedies with respect to any term or provision of this Agreement or any other
aspect of Executive’s conduct or employment in no manner [except as otherwise
expressly provided herein] shall affect the Company’s right at a later time to
enforce any such term or provision). Failure on either Party’s part to complain
of any act or failure to act of the other Party or to declare the other Party
in
default, irrespective of how long such failure or default continues, shall
not
constitute a waiver by such Party of such Party's rights under this
Agreement.
G. If
any
provision of this Agreement or the application thereof to any person or
circumstance shall be invalid or unenforceable to any extent, the remainder
of
this Agreement and the application of such provision to other persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
H. This
Agreement shall inure to the benefit of and be binding upon the undersigned
Parties and their respective permitted successors and permitted assigns.
Whenever, in this instrument, a reference to any Party is made, such reference
shall be deemed to include a reference to such Party’s permitted successors and
permitted assigns; however, neither this Paragraph 12.H nor any other
portion of this Agreement shall be interpreted to constitute a consent to any
assignment or other transfer of this Agreement or any part hereof other than
pursuant to and in accordance with this Agreement’s other
provisions.
11
I. The
prevailing Party in any dispute between the Parties to this Agreement, arising
out of the interpretation, application, or enforcement of any provision of
this
Agreement, shall be entitled to recover all of its reasonable attorneys' fees
and costs, whether suit be filed or not, including, without limitation, costs
and attorneys' fees related to or arising out of any arbitration or trial or
appellate proceedings or petition for review before any other
court.
J. Executive
agrees to diligently adhere to the Conflict of Interest Guidelines attached
hereto as Exhibit “A”.
EXECUTED,
in multiple counterparts,
each of
which shall have the force and effect of an original, on the Effective
Date.
|
“Company”
|
“Executive”
|
||
|
a
New York corporation
|
|||
|
By:
|
|||
|
Xxxxxxxx
X. Xxxxxxxxx, Secretary
|
Xxxxx
X. Xxxxxxx
|
||
12
EXHIBIT
“A”
Conflict
of Interest Guidelines
1. It
is the
policy of the Company to conduct its affairs in strict compliance with the
letter and spirit of the law and to adhere to the highest principles of business
ethics. Accordingly, all officers, employees, and independent contractors must
avoid activities which are in conflict, or give the appearance of being in
conflict, with these principles and with the interests of the Company. The
following are potentially compromising situations which must be avoided. Any
exceptions must be reported to the Company’s Board of Directors and written
approval for continuation must be obtained.
A. Revealing
confidential information to outsiders or misusing confidential information.
Unauthorized divulging of information is a violation of this policy whether
or
not for personal gain and whether or not harm to the Company is
intended.
B. Accepting
or offering substantial gifts, excessive entertainment, favors, or payments
which may be deemed to constitute undue influence.
C. Participating
in civic or professional organizations that involve divulging the Company’s
confidential information.
D. Initiating
or approving any form of personal or social harassment of employees in violation
of any laws.
E. Execution
of transactions involving insurance products or services or other products
or
services not approved by the Company’s Board of Directors or permitted pursuant
to any existing employment agreement.
F. Improperly
using or disclosing to the Company any proprietary information or trade secrets
of any former employer or other person or entity with whom obligations of
confidentiality exist.
G. Unlawfully
discussing prices, costs, customers, sales, or markets with competing companies
or their employees.
H. Violation
of any applicable law, rule and/or regulation, state and/or
federal.
I. Improperly
using or authorizing the use of any inventions which are the subject of patent
claims of any other person or entity.
J. Engaging,
directly or indirectly, in any business other than performance of employee’s
duties under this Agreement except at the direction of or with the prior written
approval of the Company’s Board of Directors.
2. Each
officer, employee, and independent contractor must take every necessary action
to ensure compliance with these guidelines and to bring problem areas to the
attention of higher management for review. Violations of this conflict of
interest policy may result in discharge without warning.
APPENDIX
A
BONUS
PAYMENTS
Bonus
Payments due Executive:
(all
amounts based on Fiscal Year ending October 31)
|
2008
|
2009
|
2010
|
2011
|
2012
|
||||||
|
Gross
Revenue Target
|
$3,000,000
|
$36,000,000
|
$67,500,000
|
$105,000,000
|
$148,500,000
|
|||||
|
Bonus
Due
|
1.2%
of actual gross revenues
|
1%
of actual gross revenues
|
0.8%
of actual gross revenues
|
0.6%
of actual gross revenues
|
0.6%
of actual gross revenues
|
|||||
|
Actual
Gross Revenues (example)
|
$1,500,000
|
$27,000,000
|
$70,000,000
|
|||||||
|
Achievement
Percent related to Target (example)
|
50%
|
75%
|
104%
|
|||||||
|
Bonus
Due and Payable (example)
|
$9,000
($1.5M*(.012*.5)
|
$202,500
($27M*(.01*.75)
|
$582,400
($70M*(.008*1.04)
|
APPENDIX
B
STOCK
AND STOCK OPTION AWARDS
Stock
Awards:
|
2008(1)
|
2009(1)
|
2010(1)
|
||||
|
200,000
shares
|
250,000
shares
|
300,000
shares
|
350,000
shares
|
(1)
Shares due no later than last day of each fiscal year.
Option
Awards:
|
Number
of Shares
|
Exercise
Price
|
Vesting
Schedule
|
||
|
2,000,000
|
$0.17
|
Option
fully vests in the fiscal year in which the Company recognizes $3,000,000
in cumulative gross revenues from the date of this
agreement
|
||
|
500,000
|
$0.20
|
Option
fully vests in the fiscal year in which the Company recognizes $10,000,000
in cumulative gross revenues from the date of this
agreement
|
||
|
500,000
|
$0.25
|
Option
fully vests in the fiscal year in which the Company recognizes $20,000,000
in cumulative gross revenues from the date of this
agreement
|
||
|
500,000
|
$1.00
|
Option
fully vests in the fiscal year in which the Company recognizes $40,000,000
in cumulative gross revenues from the date of this
agreement
|
||
|
500,000
|
$2.00
|
Option
fully vests in the fiscal year in which the Company recognizes $60,000,000
in cumulative gross revenues from the date of this
agreement
|
