EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into this __1st____ day of
__September___, 1999__, by and between Cryogenic Solutions, Inc., a Nevada
corporation (CYGS) and Xxxxxxx X. Xxxxxxxx (EMPLOYEE).
RECITALS
A. CYGS desires to be assured of the association and services of EMPLOYEE
for CYGS.
B. EMPLOYEE is willing and desires to be employed by CYGS, and CYGS is
willing to employ EMPLOYEE, upon the terms, covenants and conditions hereinafter
set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions hereinafter set forth, the parties hereto do hereby agree as follows:
1. Employment. CYGS hereby employs EMPLOYEE as President and Chief
Executive Officer (CEO) subject to the supervision and direction of the CYGS
Board of Directors.
2. Term. The term of this Agreement shall be for a period of One (1) year
commencing on the date hereof, unless terminated earlier pursuant to Section 9
below; provided, however, that EMPLOYEE's obligations in Section 8 below shall
continue in effect after such termination. The term may be extended by mutual
agreement of the parties.
3. Compensation; Reimbursement.
3.1 BASE SALARY. For all services rendered by EMPLOYEE under this
Agreement, CYGS shall pay EMPLOYEE a BASE SALARY of One Hundred Twenty thousand
Dollars ($120,000) per annum (the BASE SALARY). The BASE SALARY shall be payable
in equal, semi-monthly installments of Five Thousand Dollars ($5,000). At his
option, the EMPLOYEE shall be entitled to purchase each pay period a number of
shares of CYGS restricted stock equivalent to twenty-five percent of the
semi-monthly installment of base salary ($1,250) at a par value of $0.001 per
share. The number of shares optionable in each month shall be calculated using
the closing CYGS stock price on the day payment of each semi-monthly installment
is made. The amount of the BASE SALARY may be increased at any time and from
time to time by the Board of Directors of CYGS, and shall be adjusted annually
to reflect changes in the Consumer Price Index for the Houston, Texas base area,
All Consumers and All Items. No such change shall in any way abrogate, alter,
terminate or otherwise effect the other terms of this Agreement.
3.2 Incentive Bonus. In addition to the BASE SALARY, EMPLOYEE shall be
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eligible for an incentive bonus (INCENTIVE BONUS) each year in an amount not
less than 10% of the BASE SALARY (the MINIMUM BONUS) nor more than 100% of the
BASE SALARY. The INCENTIVE BONUS shall be based upon the Company's operating
results for that year, and shall be paid, if earned, within 30 days after such
operating results have been determined by CYGS's accountants. The CYGS Board of
Directors shall determine the criteria upon which the INCENTIVE BONUS is
awarded.
3.3 Additional Benefits. In addition to the BASE SALARY and the INCENTIVE
BONUS, EMPLOYEE shall be entitled to Stock Options and all other benefits of
employment provided to the other officers of CYGS's operating divisions or
subsidiaries. CYGS will provide the EMPLOYEE the same fringe benefits for health
insurance, disability provisions and retirement as provided other CYGS officers.
3.4 Reimbursement. EMPLOYEE shall be reimbursed for all reasonable
"out-of-pocket" business expenses for business travel and business entertainment
incurred in connection with the performance of his duties under this Agreement
(1) so long as such expenses constitute business deductions from taxable income
for CYGS and are excludable from taxable income to the EMPLOYEE under the
governing laws and regulations of the Internal Revenue Code (provided, however,
that EMPLOYEE shall be entitled to full reimbursement in any case where the
Internal Revenue Service may, under Section 274(n) of the Internal Revenue Code,
disallow to CYGS 20% of meals and entertainment expenses); and (2) to the extent
such expenses do not exceed the amounts allocable for such expenses in budgets
that are approved from time to time by CYGS. The reimbursement of EMPLOYEE's
business expenses shall be upon monthly presentation to and approval by CYGS of
valid receipts and other appropriate documentation for such expenses.
4. Scope of Duties.
4.1 Assignment of Duties. EMPLOYEE shall have such duties as may be
assigned to him or her from time to time by CYGS's Board of Directors
commensurate with his experience and responsibilities in the position for which
he is employed pursuant to Section 1 above. Such duties shall be exercised
subject to the control and supervision of the Board of Directors of CYGS.
4.2 General Specification of Duties. EMPLOYEE's duties shall include,
but not be limited to, the duties and performance goals as follows:
(1) establish procedures for implementing the policies established by
CYGS;
(2) insure cooperation by the Officers and Staff of CYGS;
(3) cause the Company to be operated in compliance with all legal
requirements;
(4) operate the Company in conformance with the Annual Plan approved by
CYGS, as such may be amended from time to time with the concurrence of
CYGS;
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(5) cause to be prepared, as directed by CYGS, financial statements, tax
returns and other similar items respecting the operation of the
Company;
(6) generate plans, designs, inventions, modifications and other
innovations which will benefit the commercial development of CYGS;
(7) hire and/or terminate staff and/or consultants to accomplish CYGS
goals; and
(8) participate in activities to support and improve the financial well
being of CYGS.
The foregoing specifications are intended as a representative and not
necessarily complete itemization of the duties, which EMPLOYEE shall perform and
undertake on behalf of CYGS in satisfaction of his or her employment obligations
under this Agreement.
4.3 Annual Plan.
(1) EMPLOYEE shall work with Officers and Staff to develop and
submit to CYGS for its approval, not later than 60 days before the beginning of
each calendar year, an annual business plan for the Company (the ANNUAL PLAN).
The ANNUAL PLAN shall be revised by EMPLOYEE and submitted to CYGS for its
review (and approval in the case of material changes from the approved ANNUAL
PLAN) from time to time during each year to reflect changes in the ANNUAL PLAN
because of operations or otherwise.
(2) During each year, EMPLOYEE in the performance of his or her duties
under this Agreement shall comply or cause compliance with the applicable ANNUAL
PLAN and shall not (except for emergency expenditures or special circumstances
requiring an unanticipated expenditure) deviate materially from any budget
category set forth in the ANNUAL PLAN, incur any material additional expense or
change materially the manner of operation of the Company, without the approval
of CYGS.
4.4 EMPLOYEE's Devotion of Time. Aside from considerations addressed in
Paragraph 4.5 hereinbelow, EMPLOYEE hereby agrees to devote his full time,
abilities and energy to the faithful performance of the duties assigned to him
or her and to the promotion and forwarding of the business affairs of CYGS, and
not to divert any business opportunities from CYGS to himself or herself or to
any other person or business entity.
4.5 Co-existing or Conflicting Activities.
(1) CYGS takes cognizant that EMPLOYEE is a registered patent attorney and
provides services as an expert witness to selected clients (OUTSIDE ACTIVITIES),
and that EMPLOYEE is on leave from the University of Texas Health Science Center
at Houston with some ongoing faculty responsibilities. EMPLOYEE may continue
these activities and meet these responsibilities from time to time upon
notification of the Board of Directors. If the time requirement of these
activities is greater than twenty percent (20%) of the work time in a given
month, EMPLOYEE will submit an
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accounting to the Board of Directors and the cash portion of the BASE SALARY for
that month will be decreased proportionately according to the time spent in the
OUTSIDE ACTIVITIES.
(2) EMPLOYEE shall not, during the term of this Agreement, be engaged in
any other business activity related to the primary mission and goals of the
company without the prior consent of the Board of Directors of CYGS; provided,
however, that this restriction shall not be construed as preventing EMPLOYEE
from investing his personal assets in passive investments in business entities
which are not in competition with CYGS or its affiliates, or from pursuing
business opportunities as permitted by paragraph 4.5(b).
(3) EMPLOYEE hereby agrees to promote and develop all business
opportunities that come to his attention relating to current or anticipated
future business of CYGS, in a manner consistent with the best interests of CYGS
and with his duties under this Agreement. Should EMPLOYEE discover a business
opportunity that does not relate to the current or anticipated future business
of CYGS, he shall first offer such opportunity to CYGS. Should the Board of
Directors of CYGS not exercise its right to pursue this business opportunity
within a reasonable period of time, not to exceed sixty (60) days, then EMPLOYEE
may develop the business opportunity for himself; provided, however, that such
development may in no way conflict or interfere with the duties owed by EMPLOYEE
to CYGS under this Agreement. Further, EMPLOYEE may develop such business
opportunities only on his own time, and may not use any service, personnel,
equipment, supplies, facility, or trade secrets of CYGS in their development. As
used herein, the term "business opportunity" shall not include business
opportunities involving investment in publicly traded stocks, bonds or other
securities, or other investments of a personal nature.
5. Stock of Company. So long as this Agreement is in effect, EMPLOYEE
shall be entitled to purchase stock of CYGS in the same amounts and for the same
consideration, terms and conditions as provided to other officers of CYGS. The
manner of acquisition of stock shall be structured so as to minimize adverse tax
consequences to EMPLOYEE.
6. Severance. So long as this Agreement is in effect, EMPLOYEE shall at
all times be entitled to severance benefits equal to those provided to other
officers of CYGS's. These benefits shall include, without limitation, CYGS's
maintenance at its costs of a life insurance policy and disability policy on
EMPLOYEE payable to EMPLOYEE and/or his or her legal representative or heirs as
applicable, in amounts reasonably agreed to by EMPLOYEE and CYGS.
7. Confidentiality of Trade Secrets and Other Materials.
7.1 Trade Secrets. Other than in the performance of his or her duties
hereunder, EMPLOYEE agrees not to disclose, either during the term of his or her
employment by CYGS or at any time thereafter, to any person, firm or corporation
any information concerning the business affairs, the trade secrets or the
customer lists or similar information of CYGS. Any technique, method, process or
technology used by CYGS shall be considered a "trade secret" for the purposes of
this Agreement.
7.2 Ownership of Trade Secrets; Assignment of Rights. EMPLOYEE hereby
agrees that all know-how, documents, reports, plans, proposals, software,
computer programs and videos
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developed by CYGS, marketing and sales plans, client lists, client files and
other relevant materials made by him in the scope of his employment or by CYGS
are the property of CYGS and shall not be used by him in any way adverse to
CYGS's interests. EMPLOYEE shall not deliver, reproduce or in any way allow such
documents or things to be delivered or used by any third party without specific
direction or consent of the Board of Directors of CYGS. EMPLOYEE agrees to
assign Intellectual Property developed by EMPLOYEE in the scope of his
employment by CYGS to CYGS in return for reasonable compensation and
consideration to be determined by good faith negotiations between the parties.
Said compensation and consideration will be in addition to EMPLOYEE's BASE
SALARY.
7.3 EMPLOYEE hereby agrees that he/she will not, for a period of two (2)
years following termination from CYGS as defined in Section 8 of this Agreement,
solicit or perform professional services of the nature and kind of those
performed for CYGS under this Agreement for any client who CYGS had previously
or is serving at time of EMPLOYEE's termination.
7.4 EMPLOYEE further agrees that in addition to compensation for damages
caused by breach of this Agreement, CYGS shall be entitled to injunctive relief
by a court of competent jurisdiction to prevent irreparable harm and injury to
CYGS by said breach or potential breach.
8. Termination.
8.1 Bases for Termination.
(1) EMPLOYEE's employment hereunder may be terminated at any time by
mutual agreement of the parties.
(2) This Agreement shall automatically terminate on the last day of the
month in which EMPLOYEE dies or becomes permanently incapacitated. "Permanent
incapacity" as used herein shall mean mental or physical incapacity, or both,
reasonably determined by CYGS's Board of Directors based upon a certification of
such incapacity by, in the discretion of CYGS's Board of Directors, either
EMPLOYEE's regularly attending physician or a duly licensed physician selected
by CYGS's Board of Directors, rendering EMPLOYEE unable to perform substantially
all of his or her duties hereunder and which appears reasonably certain to
continue for at least six consecutive months without substantial improvement.
EMPLOYEE shall be deemed to have "become permanently incapacitated" on the date
CYGS's Board of Directors has determined that EMPLOYEE is permanently
incapacitated and so notifies EMPLOYEE.
(3) EMPLOYEE's employment may be terminated by CYGS "with cause,"
effective upon delivery of written notice to EMPLOYEE given at any time (without
any necessity for prior notice) if any of the following shall occur:
(a) any action by EMPLOYEE which would be grounds for termination
under an applicable statutes covering any willful breach of duty, habitual
neglect of duty, and continued incapacity);
(b) any material breach of EMPLOYEE's obligations in Section 8
above; or
(c) any material acts or events which inhibit EMPLOYEE from fully
performing his
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or her responsibilities to CYGS in good faith, such as (i) a felony
criminal conviction; (ii) any other criminal conviction involving
EMPLOYEE's lack of honesty or EMPLOYEE's moral turpitude; (iii) drug or
alcohol abuse; or (iv) acts of dishonesty, gross carelessness or gross
misconduct.
(4) EMPLOYEE's employment may be terminated by CYGS "without cause" (for
any reason or no reason at all) at any time by giving EMPLOYEE 60 days prior
written notice of termination, which termination shall be effective on the 60th
day following such notice. If EMPLOYEE's employment under this Agreement is so
terminated, CYGS shall (a) make a lump sum cash payment to EMPLOYEE within 10
days after termination of an amount equal to (i) EMPLOYEE's BASE SALARY for the
balance of the year in which termination occurs, (ii) a prorata portion of the
INCENTIVE BONUS, if any, earned for the year in which termination occurs
prorated to the date of termination, plus (iii) any unreimbursed expenses
accruing to the date of termination; and (b) make a lump sum cash payment equal
to EMPLOYEE's annual BASE SALARY, as increased pursuant to Section 3.1, on each
anniversary date of this Agreement for the balance of the term specified in
Section 2. For purposes of this provision, EMPLOYEE's annual BASE SALARY and the
remaining portion of the term of the Agreement shall be calculated as of the
termination date. After CYGS's termination of EMPLOYEE under this provision,
CYGS shall not be obligated to provide the benefits to EMPLOYEE described in
Section 3.4 (except as may be required by law).
(5) EMPLOYEE may terminate his or her employment hereunder by giving CYGS
60 days prior written notice, which termination shall be effective on the 60th
day following such notice.
8.2 Payment Upon Termination. Upon termination under paragraphs 8.1(1),
(2), (3), or (5), CYGS shall pay to EMPLOYEE within 10 days after termination an
amount equal to the sum of (1) EMPLOYEE's BASE SALARY accrued to the date of
termination; and (2) unreimbursed expenses accrued to the date of termination.
After any such termination, CYGS shall not be obligated to compensate EMPLOYEE,
his or her estate or representatives except for the foregoing compensation then
due and owing, nor provide the benefits to EMPLOYEE described in Section 3.4
(except as provided by law).
8.3 Severance Provisions. The provisions of Sections 9.1 and 9.2 shall be
subject to and deemed modified by the terms of any severance benefits granted to
EMPLOYEE as provided under Section 7.
8.4 Dismissal from Premises. At CYGS's option, EMPLOYEE shall immediately
leave CYGS's premises on the date notice of termination is given by either
EMPLOYEE or CYGS.
9. Injunctive Relief. CYGS and EMPLOYEE hereby acknowledge and agree that
any default under Section 8 above will cause damage to CYGS in an amount
difficult to ascertain. Accordingly, in addition to any other relief to which
CYGS may be entitled, CYGS shall be entitled to such injunctive relief as may be
ordered by any court of competent jurisdiction including, but not limited to, an
injunction restraining any violation of Section 8 above and without the proof of
actual damages.
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10. Miscellaneous.
10.1 Transfer and Assignment. This Agreement is personal as to EMPLOYEE
and shall not be assigned or transferred by EMPLOYEE without the prior written
consent of CYGS. This Agreement shall be binding upon and inure to the benefit
of all of the parties hereto and their respective permitted heirs, personal
representatives, successors and assigns.
10.2 Severability. Nothing contained herein shall be construed to require
the commission of any act contrary to law. Should there be any conflict between
any provisions hereof and any present or future statute, law, ordinance,
regulation, or other pronouncement having the force of law, the latter shall
prevail, but the provision of this Agreement affected thereby shall be curtailed
and limited only to the extent necessary to bring it within the requirements of
the law, and the remaining provisions of this Agreement shall remain in full
force and effect.
10.3 Governing Law. This Agreement is made under and shall be construed
pursuant to the laws of the State of Texas.
10.4 Counterparts. This Agreement may be executed in several counterparts
and all documents so executed shall constitute one agreement, binding on all of
the parties hereto, notwithstanding that all of the parties did not sign the
original or the same counterparts.
10.5 Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes all prior oral or written agreements, arrangements, and
understandings with respect thereto. No representation, promise, inducement,
statement or intention has been made by any party hereto that is not embodied
herein, and no party shall be bound by or liable for any alleged representation,
promise, inducement, or statement not so set forth herein.
10.6 Modification. This Agreement may be modified, amended, superseded, or
cancelled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
party or parties to be bound by any such modification, amendment, supersession,
cancellation, or waiver.
10.7 Attorneys' Fees and Costs. In the event of any dispute arising out of
the subject matter of this Agreement, the prevailing party shall recover, in
addition to any other damages assessed, its attorneys' fees and court costs
incurred in litigating or otherwise settling or resolving such dispute whether
or not an action is brought or prosecuted to judgment. In construing this
Agreement, none of the parties hereto shall have any term or provision construed
against such party solely by reason of such party having drafted the same.
10.8 Waiver. The waiver by either of the parties, express or implied, of
any right under this Agreement or any failure to perform under this Agreement by
the other party, shall not constitute or be deemed as a waiver of any other
right under this Agreement or of any other failure to perform under this
Agreement by the other party, whether of a similar or dissimilar nature.
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10.9 Cumulative Remedies. Each and all of the several rights and remedies
provided in this Agreement, or by law or in equity, shall be cumulative, and no
one of them shall be exclusive of any other right or remedy, and the exercise of
any one or such rights or remedies shall not be deemed a waiver of, or an
election to exercise, any other such right or remedy.
10.10 Headings. The section and other headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning and
interpretation of this Agreement.
10.11 Notices. Any notice under this Agreement must be in writing, may be
telecopied, sent by express 24-hour guaranteed courier, or hand-delivered, or
may be served by depositing the same in the United States mail, addressed to the
party to be notified, postage-prepaid and registered or certified with a return
receipt requested. The addresses of the parties for the receipt of notice shall
be as follows:
If to CYGS: If to EMPLOYEE:
Dell Xxxxxx, Executive Vice President Xxxxxxx Xxxxxxxx
6524 San Xxxxxx, PMB 388 000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000 Xxxxxxx, XX 00000
Each notice given by registered or certified mail shall be deemed delivered and
effective on the date of delivery as shown on the return receipt, and each
notice delivered in any other manner shall be deemed to be effective as of the
time of actual delivery thereof. Each party may change its address for notice by
giving notice thereof in the manner provided above.
10.12 Survival. Any provision of this Agreement which imposes an
obligation after termination or expiration of this Agreement shall survive the
termination or expiration of this Agreement and be binding on EMPLOYEE and CYGS.
10.13 Right of Set-Off. Upon termination or expiration of this Agreement,
CYGS shall have the right to set-off against the amounts due EMPLOYEE hereunder
the amount of any outstanding loan or advance from CYGS to EMPLOYEE.
10.14 Effective Date. This Agreement shall become effective as of the date
set forth on page 1 when signed by EMPLOYEE and CYGS.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed as of the date first set forth above.
CYGS EMPLOYEE
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Dell Xxxxxx, Vice President Xxxxxxx X. Xxxxxxxx, Ph.D., JD
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Date Date
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