October 15, 2003
Mr. Xxxxxx Xxxxx
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
VIA FACSIMILE (716 759-6910)
Dear Xxx:
On behalf of NeoGenomics, Inc. ("NeoGenomics" or the "Company"), it is my
pleasure to extend this offer of employment to you ("Executive"). If the
following terms are satisfactory, please countersign this letter (the
"Agreement") and return a copy to me at your earliest convenience.
Position: Chief Executive Officer. In such capacity, you will perform
such duties and have such responsibilities as may be assigned by
the Board of Directors of the Company from time to time that are
normally inherent in such capacities incorporations of similar
size and character.
StartDate: October 20, 2003 or such other date that is mutually
agreed upon by the Company and you.
Term: Three years from the Start Date, provided that either party may
cancel this agreement by giving the other party 60 days written
notice of a termination. In the event that you terminate this
agreement at anytime during the first year from your Start Date,
you agree that you will reimburse the Company for your relocation
costs.
Base Salary: $100,000/year, payable twice monthly, to start.
Thereafter, salary increases will be based on performance and
will occur at the discretion of the compensation committee of the
Board of Directors.
Bonus: You will be eligible for an annual bonus based on performance.
The amount of such bonus shall be based on the available
resources of the Company and shall be at the discretion of the
Compensation Committee of the Board of Directors.
Car Allowance: The parties agree that a significant portion of your
time will be spent on marketing activities and it is expected
that you will need to drive approximately 1,500 miles per month
to perform the duties of your position.
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As such, the Company agrees to reimburse your automobile expenses
(inclusive of all fuel and repair expenses) at a per diem rate of
$500 per month which amount is based on the Federal Government
standard mileage rate of $0.36/mile for 2003 (established in IRS
Publication 15). You understand that the Company is treating
these per diem payments as non-taxable reimbursements under an
"Accountable Plan" according to IRS Publications 15 and 643, and
as such any reimbursements above the amount of expense incurred
must be reported back to the Company and treated as taxable
income. The Executive therefore agrees that, to the extent it is
applicable, he will report back to the Company no less frequently
than quarterly any amounts of per diem reimbursements that exceed
actual expenses based on the above formulas and such excess will
be treated as taxable income on your W-2 form.
Benefits: You will be entitled to participate in all medical and other
benefits that the company has established for executive officers
of the Company, including, but not limited to reimbursement of
100% of any health insurance premium for the Executive in
accordance with the Company's policy for such reimbursement.
Relocation: The Company will reimburse you for all reasonable
out-of-pocket expenses associated with a van line move to the
Fort Xxxxx, FL area up to a maximum of $15,000 or such other
amount mutually agreed upon by the Company. Such allowance will
include airfare and accommodations for you and your wife for two
house hunting trips to Fort Xxxxx, FL. You agree to use your best
efforts to relocate your primary residence to the Fort Xxxxx area
not later than December 31, 2003.
Vacation: After completing three months of employment, you will be
eligible for 4 weeks of paid vacation/year, which will accrue on
a pro-rata basis throughout the year. Unused vacation in any
given year will not be carried over for more than 30 days into
the subsequent fiscal year.
StockOptions: Upon your Start Date, you will be granted stock options
to purchase 900,000 shares of NeoGenomics's common stock at an
exercise price equivalent to the average closing bid price per
share at which NeoGenomics stock was quoted on the NASDAQ
Bulletin Board for the five trading days prior to your Start
Date. The grant of such options will be made pursuant to the
Company Stock Option Plan and will be evidenced by a separate
Option Agreement, which the Company will execute with you within
60 days of your Start Date. So long as you remained employed by
the Company, such options will have a ten-year term from the
grant date and will vest according to the following schedule:
Time-Based Vesting
75,000 on your Start Date;
100,000 on the first anniversary of your Start Date;
100,000 on the second anniversary of your Start Date;
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100,000 on the third anniversary of your Start Date;
Performance-Based Vesting
125,000 when the Company reaches $2.5 million of
consolidated revenue for the preceding twelve months;
125,000 when the Company reaches $5.0 million of
consolidated revenue for the preceding twelve months;
125,000 when the Company's stock maintains an average
closing bid price (as quoted on NASDAQ Bulletin
Board) of $0.50/share over the previous 30 trading days.
150,000 when the Company's stock maintains an average
closing bid price (as quoted on NASDAQ Bulletin
Board) of $1.00/share over the previous 30 trading days.
The Company agrees that it will grant to you the maximum number
of Incentive Stock Options ("ISO's") available under current SEC
guidelines and that the remainder, if any, will be in the form of
non-qualified stock options.
Termination
Without Cause: If the Company terminates you without "Cause" for any
reason during the Term or any extension thereof, then the Company
agrees that as severance it will continue to pay you your Base
Salary and maintain your employee benefits for a period that is
equal to one month for every full year of your employment by the
Company (subject to a minimum of two months and a maximum of six
months), beginning as of the date of your termination. In
addition, if such termination without cause shall occur at
anytime after twelve months from your start date, than the pro
rata portion of any unvested options up until the date of
termination that are due to vest in the year of termination shall
vest. For the purposes of this letter agreement, the Company
shall have "Cause" to terminate your employment hereunder upon:
(i) the willful (or grossly negligent) and continued failure by
you to substantially perform your duties as CEO (other than any
such failure resulting from incapacity due to physical or mental
illness) for a period of ten days after demand for substantial
performance is delivered in writing by the Company that
specifically identifies the manner in which the Company believes
you have not substantially performed your duties; or
(ii) the active participation by you in an act or series of acts
of willful malfeasance or gross misconduct, recklessness or gross
negligence (including, without limitation, any action that
results in your conviction of or pleading guilty to any
misdemeanor or regulatory sanction placed upon you) which a
reasonable person would expect to have a potentially damaging or
detrimental effect on the Company; or
(iii) your being convicted of, or pleading guilty to, a felony.
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You acknowledge and agree that any and all payments to which you
are entitled under this Section are conditioned upon and subject
to your execution of a general waiver and release, in such
reasonable form as counsel for each of the Company and you shall
agree upon, of all claims you have or may have against the
Company.
Confidentiality: You shall not, during or at any time after the term
of employment, disclose to any person, corporation or other
entity for any purpose whatsoever any information disclosed to
you or known by you as a consequence of your employment by the
Company and not generally known in the industry concerning the
business of the Company (as now or hereafter constituted or
contemplated), including, but not limited to, such information as
shall pertain to the prospects, plans, financial condition,
policies, business methods, products, customers, employees and
agents of the Company, nor shall you directly or indirectly make
use of any such information for your purposes or for the benefit
of any other person, corporation or entity. You also shall not,
during and at any time prior to two years after termination of
your employment, directly or indirectly, on behalf of any trade
or business that is competitive with the business of the Company,
as it then exists, aid or endeavor to solicit or induce then
remaining employees of the Company to leave their employment with
the Company in order to accept employment with another person or
entity or then customers of the Company to purchase products or
services then being sold or offered by the Company from another
person or entity. Upon any violation of the covenants set forth
in this paragraph, the Company shall be entitled to preliminary
and permanent injunctive relief, with or without an allowance for
damages, as well as an equitable accounting of all earnings,
profits and other benefits arising from such violation, which
rights shall be cumulative and in addition to any and all other
rights and remedies to which the Company may be entitled.
Non-Competition: You agree that your Option Agreement will contain a
non-compete clause covering the 24 months after your employment
with the Company. Such non-compete clause will be limited only to
working with companies in a similar line of business as the
Company's in the markets in which the Company is operating at the
time of your termination.
Executive's
Representations: You represent and warrant that nothing in your past
legal and/or work experiences, which if became broadly known in
the marketplace, would impair your ability to serve as the CEO of
a public company or materially damage your credibility with
public shareholders. You further represent and warrant that,
prior to accepting this offer of employment, you have disclosed
all material information about your past legal and work
experiences that would be required to be disclosed on a Directors
and Officers's questionnaire for the purpose of determining what
disclosures, if any, will need to be made with the SEC. Prior to
the Company's next public filing, you also agree to fill out a
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Director's and Officer's questionnaire in form and substance
satisfactory to the Company's counsel.
Miscellaneous: (i) This Agreement supersedes all prior agreements and
understandings between the parties and may not be modified or
terminated orally. No modification or attempted waiver will be
valid unless in writing and signed by the party against whom the
same is sought to be enforced.
(ii) The provisions of this Agreement are separate and severable,
and if any of them is declared invalid and/or unenforceable by a
court of competent jurisdiction or an arbitrator, the remaining
provisions shall not be affected.
(iii)If a court of competent jurisdiction determines that any of
the restrictions against disclosure of Confidential Information,
competition and/or solicitation contained in this Agreement are
invalid in whole or in part due to over breadth, whether
geographically, temporally, or otherwise, such court is
specifically authorized and requested to reform such provision by
modifying it to the smallest extent necessary to render it valid
and enforceable, and to enforce the provision as modified.
(iv) This Agreement is the joint product of the Company and you
and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of the Company and you
and shall not be construed for or against either party hereto.
(v) This Agreement will be governed by, and construed in
accordance with the provisions of the law of the State of
Florida, without reference to provisions that refer a matter to
the law of any other jurisdiction. Each party hereto hereby
irrevocably submits itself to the exclusive personal jurisdiction
of the federal and state courts sitting in Florida; accordingly,
any matters involving the Company and the Executive with respect
to this Agreement may be adjudicated only in a federal or state
court sitting in Florida.
(vi) This Agreement may be signed in counterparts, and by fax,
each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
(vii) This Agreement supercedes any prior written or verbal
agreements that you might have with the Company.
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We are excited about having you on our team. We believe your skill set will
allow you to be an immediate and significant contributor to our cause and we
look forward to working with you.
Warmest Regards,
Xxxxxxx X. Xxxx, M.D.
President
Agreed and Accepted:
_________________________Date______
Xxxxxx Xxxxx
