Exhibit 10.2
EMPLOYMENT AGREEMENT WITH XXXXXXX X. XXX
EMPLOYMENT AGREEMENT ("Agreement") made and entered into as of the 1st day
of July, 2000 by and between AlphaRx Inc., a Delaware corporation ("Company"),
and Xxxxxxx X. Xxx ("Executive").
WHEREAS, Company desires to employ Executive as its President and Executive
desires to be employed by Company, upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth and the mutual benefits to be derived herefrom, and intending to be
legally bound hereby, the Company and the Executive agree as follows:
1. Employment and Term. Company hereby employs Executive and Executive
hereby accepts employment for a term commencing on July 1st, 2000 and
continuing until June 30th, 2003, unless sooner terminated as provided
for in this Agreement. Company and Executive have the option to
renegotiate this Agreement beyond the three-year period. Executive hereby
warrants and represents to Company that he is free to enter into this
Agreement and is not a party to any agreement, written or otherwise, or
bound by any restrictions, which limit or restrict him from entering into
this Agreement or performing the services, duties and responsibilities
called for hereunder.
2. Duties.
2.1 Executive shall perform the duties of the President of the Company and
such additional executive duties of Company and its affiliates as may be,
from time to time, requested of him by the Company's Board of Directors
or the Chairman and/or Chief Executive Officer of the Company. As
President of the Company, the Executive shall report to the Chairman/CEO
of the Company.
2.1.1 The duties as President of the Company shall include but not be limited
to (i) having general and active management of the business of the
Company (ii) seeing that all orders and resolutions of the Board are
carried into effect, subject however, to the right of the directors to
delegate any specific powers, except such as may be by statute
exclusively conferred on the President, to any other officer or officers
of the Company (iii) executing bonds, mortgages and other contracts
requiring a seal, under the seal of the Company (iv) be Ex-Offico a
member of all committees (v) have the general powers and duties of
supervision and management usually vested in the office of President of a
Company (vi) assist the Board of Directors, Chairman/CEO in formulating
the business plan, goals and objectives for the Company's future growth.
2.2 Executive shall devote his full professional time and best efforts to the
performance of his duties and responsibilities hereunder to advance the
interests of the Company and shall not during the term of this Agreement
(as defined in
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Section 1 hereof) be employed, involved or otherwise engaged in, either
directly or indirectly, any other employment for gain, profit or other
pecuniary advantage, without prior written consent of Company. At no time
shall Executive engage in any activity that conflicts with the business
of the Company or its affiliates. Nothing set forth in this section 2.2
shall be construed to prevent Executive from (i) acting as a member of
Board of Trustees or a member of Board of Directors of any other
corporation, or as a member of the Board of Trustees of any organization
or entity which is not a competitor of the Company or (ii) devoting of
such of Executive's time and attention to philanthropic, charitable,
civic, community or other activities or endeavors as Executive shall
reasonably determine but only to the extent that Executive's pursuance of
any activities or endeavors does not materially and adversely effect the
Executive's ability to perform and discharge Executive's duties and
objectives to the Company hereunder.
2.3 Except for required travel on Company business or unless Company agrees
otherwise, Executive shall perform his duties and responsibilities at the
Company's principal executive offices located in the greater Toronto
area. The Company shall furnish Executive with office space, secretarial
assistance, a personal computer, a company car and such other facilities
and services as shall be suitable to Executive's position and adequate
for the performance of his duties hereunder.
3. Compensation. For all duties and responsibilities to be performed and/or
assumed by Executive hereunder, Executive shall be entitled to receive an
annual salary as set forth below ("Base Salary"). The Base Salary, less
any sums required to be withheld by law, shall be payable in equal
monthly installments or such other more frequent regular installments as
the Company may, from time to time, determine. For purposes hereof, Base
Salary shall be:
3.1 For the six-month period commencing with the date hereof, the Base Salary
shall be $24,000 per year which shall be increased to $36,000 per year
after the first six months of employment.
3.2 For each year thereafter, the Base Salary shall be increased by an amount
determined by the Board of Directors but in no event less than (i) five
percent (5%) after the first year, six percent (6%) after the second year
and each year thereafter upon mutual agreement to extend the term. Each
percentage increase for a particular year shall be based on the Base
Salary for the immediately preceding year.
4. Fringe Benefits. Company shall pay for or provide Executive with the
following benefits:
4.1 For the first year, Executive shall be entitled to three (3) weeks paid
vacation to be used at the Executive's discretion. Thereafter, Executive
shall be entitled to four (4) weeks paid vacation during each full year
of this Agreement to be used at
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the Executives discretion. Vacation time shall accrue on a pro-rata basis
during each year of this Agreement. Any unused vacation shall be
cumulative from year to year unless otherwise agreed upon by the parties.
4.2 Health and hospitalization insurance established and maintained by the
Company for its senior executives and key management personnel. Since the
Company presently does not have, in effect, a plan for health and
hospitalization insurance, Company shall reimburse Executive for all
COBRA payments made by Executive to his previous employer for health and
hospitalization coverage for Executive and his family. Thereafter,
Company shall either secure and maintain health and hospitalization
insurance for Executive and his dependents or reimburse Executive for
coverage comparable to Blue Shield/Blue Cross for Executive and his
dependents.
4.3 Such other employee benefits maintained by the Company for its senior
executives and key management employees, including, all pension, profit
sharing, retirement, stock bonus and stock option plans, to the extent
Executive is eligible to participate pursuant to the terms and conditions
of such plans.
4.4 Executive shall be reimbursed in a timely manner for all items of travel,
entertainment and miscellaneous expenses which Executive reasonably
incurs in connection with the performance of his duties hereunder,
provided that the Executive submits to the Company such statements and
other evidence supporting said expenses as the Company my reasonably
require. Executive, when traveling on Company business, shall be
permitted to fly first class on all domestic flights and business class
on all international flights.
4.5 Executive shall be reimbursed in a timely manner for all reasonable
moving expenses actually incurred by Executive in relocating the
Executive and his family to any locations required by the Company.
("Relocation Expenses"). The Relocation Expenses shall include the cost
of temporary residence, a moving company and related expenses. The total
Relocation Expenses for which Executive shall be reimbursed shall not
exceed $50,000 and shall be approved in writing, in advance, by the
Company.
5. Stock Options.
5.1 As part of Executive's compensation for services to be rendered
hereunder, Executive shall have the right and option to purchase from
Company voting common stock in Company ("Option"). The total number of
shares available to Executive under this Option is Two Hundred Thousand
Shares (200,000) at a purchase price of Ten Cents ($0.10) per share
(Option Shares"). The Option Shares are available for purchase in
installments as listed in Column A below and each installment shall
become vested on the corresponding date listed in Column B, as follows:
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Column A Column B
Number of Shares Date Option Shares Available for Purchase
Become Vested
50,000 Upon the commencement of Executive's employment
pursuant to the terms of this Agreement
50,000 First anniversary date of this Agreement
50,000 Second anniversary date of this Agreement
50,000 Third Anniversary date of this Agreement
In order for the Option Shares to become vested as provided for above, Executive
must be employed by the Company under the terms of this Agreement as of the
vesting date set forth in Column B above.
5.2 Except as otherwise provided for below, the term of the Option granted
shall remain in effect for ten (10) years from the date on which such
Option Shares become vested. If the Executive's employment with the
Company is terminated by the Company for Cause (as defined herein) or by
the act of Executive, the Executive's right to exercise vested Option
Shares shall cease and become null and void within thirty (30) days of
the date employment terminated, except as otherwise provided in Section
5.3 hereof. All unvested Option Shares will terminate immediately as of
the date of such termination of employment. In the event the Company
receives, accepts and consummates a tender offer for all of its
outstanding common stock prior to the vesting of the Option Shares, the
vesting rights shall be accelerated so as to allow Executive to exercise
the Option to purchase all of the Option Shares immediately prior to the
consummation of such tender offer.
5.3 Notwithstanding anything in this Section 5 to the contrary, if the
Executive's employment is terminated for Cause, as set forth in Section
6.3, the Company shall have the right to terminate and withdraw any
vested or unvested Options under this Agreement.
5.4 The purchase price of the Option Shares shall be paid in full upon the
exercise of the Option, and Company shall not be required to deliver
certificates for such Option Shares until payment has been made. In
addition to, and at the time of payment of the purchase price for such
Option Shares, Executive shall be responsible for all federal and state
withholding or other employment taxes applicable to the taxable income of
such Executive and any other fees resulting from the exercise of the
Executive.
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5.5 Each share of Option Stock purchased pursuant to the terms hereof shall
carry all appropriate registration and/or restrictions on sale and
notices as determined from time to time by Company's securities counsel.
Executive shall cooperate with Company and Company's counsel in complying
with all applicable securities laws.
6. Termination of Employment. The employment of Executive and Company's
liability and obligations hereunder shall terminate as follows:
6.1 This Agreement shall terminate immediately upon the death of Executive.
In such event, Company shall pay to such person as Executive may
designate in a written notice filed with the Company, or if no such
person shall be designated, to Executive's estate, a lump sum death
benefit in an amount equal to twelve (12) months of Executive's Base
Salary as in effect on the date of Executive's death and double indemnity
in event Executive's death occurs while traveling on Company business.
6.2 This Agreement shall terminate immediately upon the Disability of
Executive. Disability shall exist if due to a mental or physical
condition, Executive is determined to be unable to perform his duties and
responsibilities hereunder for a continuous period of two (2) months.
Disability shall be conclusively established by written certification by
two (2) licensed, disinterested physicians selected as mutually agreed
upon between Company and Executive. In the event the two (2) physicians
disagree, a third physician shall be selected by the two physicians to
break such impasse. The costs associated with the determination of
Disability shall be borne equally between Company and Executive. In the
event of Disability, Executive shall be entitled to receive his Base
Salary in accordance with Section 3 for a period of six (6) months
following the onset of Disability.
6.3 The Company may discharge the Executive for Cause and thereby immediately
terminate his employment under this Agreement. For purposes of this
Agreement, Company shall have "Cause" to terminate the Executive's
employment if the Executive, in the reasonable judgment of the Company:
6.3.1 Willfully fails to perform any reasonable directive of the Company's
Board of Directors, Chairman or Chief Executive Officer.
6.3.2 Materially breaches any of the agreements, duties, responsibilities or
obligations under this Agreement.
6.3.3 Embezzles or converts to his own use any funds or property of the Company
or any client or customer of the Company.
6.3.4 Is convicted of a felony or any crime involving larceny, embezzlement or
moral turpitude.
6.4 In the event that Executive's employment is terminated by the Company
without Cause, as defined in Section 6.3, above, for a reason other than
death or
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Disability, or Executive shall resign for "Good Reason", as defined
below, then, in such event:
6.4.1 Executive's Base Salary, as defined in Section 3 as then in effect, shall
continue to be paid for a period of twelve (12) months ("Payment Period")
or balance of Agreement whichever is longer.
6.4.2 Company shall maintain in effect during the Payment Period, for the
continued benefit of the Executive, all of the employee benefit plans and
programs in which the Executive was entitled to participate immediately
prior to the Executive's termination provided same is possible under the
general terms and provisions of such benefit plans and programs.
Moreover, during the Payment Period the Company shall provide the
Executive with such reasonable administrative and secretarial support
services as may be necessary or appropriate in order to assist Executive
in finding new employment or Executive may select an out-placement
service to be paid for by the Company at a cost not to exceed Five
Thousand Dollars ($5,000).
For purposes of this Section 6.4, "Good Reason" shall mean:
(i) An assignment to the Executive of any duties inconsistent with, or
a material change in the nature or scope of, Executive's
responsibilities, authority or duties hereunder.
(ii) Failure by the Company to comply with the provisions of this
Agreement.
(iii) Ill health of Executive or a member of his family, or any other
compelling personal circumstance which, in the mutual discretion
of the Executive and the Chairman of the Company, makes the
Executive's continued employment hereunder impossible, or
inappropriate.
6.5 Executive may voluntarily terminate his employment under this Agreement
without Good Reason, as defined in Section 6.4 above, by giving the
Company ninety (90) days prior written notice thereof, and upon the
expiration of such ninety (90) day period, Executive's employment under
this Agreement shall terminate, and Company shall have no further
obligation or liabilities under this Agreement except to pay the
Executive the portion, if any, that remains unpaid of the Base Salary and
unpaid accrued prorated vacation for the period up to the date of
termination. Resignation as defined herein must be in written form to the
Board, witnessed and signed by the Executive.
7. Surrender of Books and Records. Executive acknowledges that all lists,
books, records, literature, products and any other materials owned by
Company or its affiliates or used by them in connection with the conduct
of their business, shall at all times remain the property of Company and
its affiliates and that upon termination of employment hereunder,
irrespective of the time, manner or cause
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of said termination, Executive will surrender to Company and its
affiliates all such lists, books, records, literature, products and other
materials.
8. Miscellaneous.
8.1 This Agreement constitutes the entire understanding and agreement between
Company and Executive regarding its subject matter and supersedes all
prior negotiations and agreements, whether oral or written, between them
with respect to its subject matter. This Agreement may not be modified
except by a written agreement signed by the Executive and the Company.
8.2 This Agreement shall be binding upon and inure to the benefit of the
parties and their respective heirs, executors, successors and assigns,
except that this Agreement may not be assigned by the Executive.
8.3 No waiver by either party of any condition or of the breach by the other
of any term or covenant contained in this Agreement, whether by conduct
or otherwise, in any one or more instances shall be deemed or construed
as a further or continuing waiver of any such condition or breach or a
waiver of any other condition, or the breach of any other term or
covenant set forth in this Agreement. Moreover, the failure of either
party to exercise any right hereunder shall not bar the later exercise
thereof.
8.4 This Agreement shall be governed by the statutes and common laws of the
State of Delaware, excluding it's choice of law statutes or common law.
8.5 The headings of the various sections and paragraphs have been included
herein for convenience only and shall not be construed in interpreting
this Agreement.
8.6 If any provision of this Agreement shall be held invalid or
unenforceable, the remainder of this Agreement shall, nevertheless,
remain in full force and effect. If any provision is held invalid or
unenforceable with respect to particular circumstances, it shall,
nevertheless, remain in full force and effect in all other circumstances.
8.7 This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original but all of which together will
constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been executed by the Executive and
on behalf of the Company by its duly authorized officer on the date first above
written.
ALPHARX INC.
By: /s/ Sandro Persia By: /s/ Xxxxxxx X. Xxx
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Sandro Persia Xxxxxxx X. Xxx
Secretary Chairman/CEO
EXECUTIVE
By: /s/ Xxxxxxx X. Xxx
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Xxxxxxx X. Xxx
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