EMPLOYMENT AGREEMENT
EXECUTION
COPY
EXHIBIT
10.1
EMPLOYMENT
AGREEMENT effective as of October 15, 2007 (the “Commencement Date”) by and
between Xxxxxxx Xxxxxxx (“Executive”), and Immunosyn Corporation, a Delaware
corporation (the “Company”) by or through its officers (this
“Agreement”).
The
parties hereto wish to enter into an employment agreement on the terms and
conditions set forth below. Accordingly, in consideration of the
premises and the respective covenants and agreements of the parties herein
contained, and intending to be legally bound hereby, the parties hereto agree
as
follows:
1. Term. The
Executive’s employment under this Agreement shall commence on the Commencement
Date and shall end, unless terminated earlier pursuant to Section 4, at the
close of business on December 31st, 2009 (the “Term”);
provided, however, that the Term shall thereafter be automatically
extended for each succeeding one (1) year period unless either party hereto
shall provide the other party with a written notice at least thirty (30) days
prior to the end of the then current Term, advising that the party providing
the
notice shall not agree to so extend the Term.
2. Title,
Duties and Authority. The Executive shall serve as Chief
Executive Officer and President of the Company, and shall have such
responsibilities and duties consistent with such position and/or as may from
time to time be assigned to the Executive by the board of directors of the
Company (the “Board”), and shall have all of the powers and duties usually
incident to such offices. In addition, Argyll Biotechnologies, LLC
agrees to nominate and/or cause the Executive to be elected to the Company’s
Board of Directors at each annual meeting of stockholders during the Term of
the
Executive’s employment hereunder or, if there shall at any time be director
classes, at each such meeting at which Executive’s director class comes up for
election, and Argyll agrees to vote all, or cause (to the extent within its
control) to be voted, shares of the Company owned or controlled by Argyll,
directly or indirectly, to be voted, to elect Executive to serve on the
Company’s Board. Executive hereby agrees to serve on the Company’s
Board if elected. The Executive shall devote substantially all of his
working time and efforts to the business and affairs of the Company, except
for
vacations, illness and incapacity; provided, however, that the
Executive may serve on the boards of directors of non-public companies and
charitable organizations and may devote reasonable time to charitable and civic
organizations, in all cases provided that the performance of his duties and
responsibilities on such boards and in such service does not interfere
substantially with the performance of his duties and responsibilities under
this
Agreement.
3. Compensation
and Benefits.
(a) Base
Salary. During the Term, the Company shall pay the Executive a
base salary (“Base Salary”). The Base Salary shall be Four Hundred
Thousand Dollars ($400,000 USD) per year for calendar year 2007 (pro rated
for
the portion of the year included in the Term) payable semi-monthly (less
applicable taxes and withholdings); Five Hundred Thousand Dollars ($500,000
USD)
per year for calendar year 2008 and Six Hundred Thousand Dollars ($600,000
USD)
per year for calendar year 2009. The Base Salary shall be subject to
annual
review by the Board or the Compensation Committee thereof for discretionary
periodic increases but not decreases; provided, however, that for
each subsequent calendar year during the Term, commencing with the 2010 calendar
year, the amount of the Executive’s Base Salary shall be increased by not less
than the United States benchmark annualized rate of inflation of the previous
calendar year. Should Company capital subsequent to Executive’s
Commencement Date be insufficient to meet the Executive’s salary requirements in
3(a), said salary claim accrues and is payable when said funds become available
to the Company.
(b) Bonus
– Revenue Share. Executive shall receive a bonus for each year of
the Term determined in accordance with the following formula and paid between
January 1 and March 15 of the following year (“Bonus”):
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one
half of one percent (0.005%) on gross revenues (GR) less the Company’s
cost of product (GR) of $0.00-$500 Million Dollars
(USD)
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three
quarters of one percent (0.075%) on GR of $500-One Billion Dollars
(USD)
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one
percent (.01%) on GR above $One Billion Dollars
(USD)
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(c) Stock
Options. For each partial and full year of the Term, the
Executive shall be eligible to participate in the Company’s Stock Option Plan;
otherwise the Executive shall be granted Company options subject to approval
by
the Compensation Committee of the Board of Directors and in a manner customary
for like companies in the industry (such option exercise price being equal
to
the fair market value of the stock on December 31st of the term year for which
they are being granted).
(d) Employee
Benefits and Incentive Arrangements. The Executive shall be
entitled to participate in all of the Company’s employee benefit and incentive
compensation plans and arrangements made available during the Term to the senior
executives of the Company as may be in effect from time to time. If
health insurance is not in place as of the Commencement Date, the Company will
make reasonable efforts to make such benefits available to employees of the
Company within a reasonable time following the Commencement Date.
(e) Expenses. The
Executive shall be entitled to receive prompt reimbursement of his expenses
incurred in the performance of his employment hereunder upon his submission
to
the Company of reasonable and customary expense claims pursuant to the Company’s
Expense Reimbursement Policy. All expense submissions shall be
subject to review and approval by the Company. The Company shall
reimburse Executive no later than the end of the year following the year in
which any such expense is incurred. The amount of Executive’s
expenses eligible for reimbursement during any taxable year will not affect
the
expenses eligible for reimbursement in any other taxable year.
(f) Vacations. The
Executive shall be entitled to four (4) weeks paid vacation in each calendar
year during the Term. Subject to applicable laws and Company policy,
the Executive may not accrue more than four (4) weeks of paid vacation days
at
any given time; such that he shall never have an accrual of greater than four
(4) weeks of vacation days at any given time, subject to provision changes
in
the benefits and compensation policy of the Company.
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(g) Sick
Days. The Executive shall be entitled to five (5) days off per
calendar year due to sickness or illness. Executive shall provide
notice to the Company of such sick days as soon as reasonably
possible.
(h) Any
element of compensation herein described may be re-evaluated and revised but
not
reduced by joint written agreement of the Executive and the Board of
Directors. Factors to be considered in the course of said
re-evaluation and revision include performance specific to the Company as well
as what is customary for like companies in the industry.
4. Termination. The
Executive’s employment hereunder with the Company may be terminated under the
following circumstances:
(a) Death
or Disability. If the Executive shall die or become entitled to
the receipt of benefits under the Company’s long-term disability plan, if any,
the Company may terminate the Executive’s employment hereunder for death or
“Disability,” as applicable.
(b) Cause. The
Company may terminate the Executive’s employment hereunder for
Cause. For purposes of this Agreement, the Company shall have “Cause”
to terminate the Executive’s employment hereunder upon:
(i) the
failure by the Executive to substantially perform the Executive’s duties for the
Company, whether or not during the Term (other than any such failure resulting
from the Executive’s Disability which shall be subject to the provisions of
Section 4(a));
(ii) the
willful violation by the Executive of any of the Executive’s material
obligations hereunder;
(iii) the
willful engaging by the Executive in misconduct which is materially injurious
to
the business or reputation of the Company or any of its affiliates;
or
(iv) the
Executive’s conviction of a felony (or plea of nolo
contendere).
Notwithstanding
the foregoing, if practicable under the circumstances, the Executive shall
not
be terminated for Cause without:
(A) delivery
of a written notice to the Executive setting forth the reasons for the Company’s
intention to terminate the Executive’s employment hereunder for
Cause;
(B) the
failure of the Executive to cure the nonperformance, violation or misconduct
described in the notice referred to in clause (A) of this paragraph, if cure
thereof is possible, to the reasonable satisfaction of the Board, within fifteen
(15) days of the Executive’s receipt of such notice; and
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(C) an
opportunity for the Executive to be heard before the Board.
(c) Good
Reason. The Executive may terminate his employment hereunder for
“Good Reason” upon the occurrence, without the Executive’s consent, of any of
the following events that has occurred within ninety (90) days of Executive
giving written notice thereof to the Company and that has not been cured within
thirty (30) days after written notice thereof has been given to the Company
by
the Executive;
(i) a
material diminution in the Executive’s authority, duties or
responsibilities;
(ii) a
material diminution in the Executive’s Base Salary;
(iii) a
material change in the geographic location at which Executive must perform
the
services; or
(iv) any
other action or inaction that constitutes a material breach by the Company
of
this Agreement.
(d) Without
Cause. The Company may terminate the Executive’s employment
hereunder without Cause.
(e) Without
Good Reason. The Executive may terminate the Executive’s
employment hereunder without Good Reason.
(f) Termination
Obligations.
(i) The
Executive hereby acknowledges and agrees that all personal property and
equipment furnished to or prepared by the Executive in the course of or incident
to his or her employment, belongs to the Company and shall, if physically
returnable, be promptly returned to the Company upon termination of his or
her
employment. “Personal property” includes, without limitation, all
books, manuals, records, reports, notes, contracts, lists, blueprints, and
other
documents, or materials, or copies thereof, and Proprietary Information (as
defined below). Following termination, Executive will not retain any
written or other tangible material containing any proprietary or confidential
information belonging to the Company.
(ii) Upon
termination of his employment, Executive shall be deemed to have resigned from
all offices, board positions and directorships then held with the Company,
and
will execute a letter of resignation if requested.
5. Compensation
upon Termination.
(a) Death
or Disability. If the Executive’s employment with the Company
hereunder is terminated on account of the Executive’s death or Disability
pursuant to Section 4(a), the Company shall as soon as practicable pay to the
Executive or the Executive’s estate, as applicable, or as may be directed by the
legal representatives of the Executive or the Executive’s estate, as
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applicable,
any Base Salary and/or Bonus accrued and due to the Executive under Section
3(a)
and/or 3(b) through the date of the Executive’s death or termination for
Disability, as applicable. Other than the foregoing, the Company
shall have no further obligations to the Executive hereunder.
(b) By
the Company for Cause or By the Executive Without Good Reason. If
the Executive’s employment with the Company hereunder is terminated by the
Company for Cause pursuant to Section 4(b) or by the Executive without Good
Reason pursuant to Section 4(e), the Company shall as soon as practicable
pay the Executive any Base Salary accrued and due to the Executive under
Section 3(a) through the Executive’s date of termination and the Executive
shall forfeit his entire unpaid Bonus, if any. Other than the
foregoing, the Company shall have no further obligations to the Executive
hereunder.
(c) By
the Company Without Cause or By the Executive for Good Reason. If
the Executive’s employment with the Company hereunder is terminated by the
Company Without Cause pursuant to Section 4(d) or the Executive for Good
Reason pursuant to Section 4(c), the Company shall as soon as practicable
(until such earlier time that the Executive violates the provisions of Section
6(b) or (c) wherein the Company shall have no further obligations to the
Executive hereunder) (i) pay the Executive any Base Salary and/or pro-rata
Bonus accrued and due to the Executive under Section 3(a) and/or 3(b)
through the Executive’s date of termination; and (ii) pay to the Executive
on the final day of employment, or as soon as practicable thereafter, an amount
equal to the greater of: (A) twelve (12) months of Executive’s
then current Base Salary or (B) Four Hundred Thousand Dollars ($400,000
USD); and (iii) at the Company’s expense, continuation of Executive’s
medical, dental and life insurance benefits coverage for a period of no less
than one year following said termination date; and (iv) pay any amounts
unconditionally accrued under any pension or benefit plans of the Company in
accordance with the terms thereof; and (v) pay amounts earned,
unconditionally accrued or owing to Executive but not yet paid, including,
without limitation, any salary (including deferred salary, if applicable),
bonus
or stock options plus accrued interest thereon earned through the date of
termination, and (vi) provide other benefits unconditionally accrued and
vested on the date of termination, if any, in accordance with applicable plans
and programs of the Company.
The
Executive shall not be required to mitigate the amount of his severance benefit
payable pursuant to this Section 5(c).
6. Restrictive
Covenants.
(a) Reasonable
Covenants. It is expressly understood by and between the Company
and the Executive that the covenants contained in this Section 6 are an
essential element of this Agreement and that but for the agreement by the
Executive to comply with these covenants and thereby not to diminish the value
of the organization and goodwill of the Company or any affiliate or subsidiary
of the Company, including relations with their employees, clients, customers
and
accounts, the Company would not enter into this Agreement. The
Executive has independently consulted with his legal counsel and after such
consultation agrees that such covenants are reasonable and proper.
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(b) No
Diversion of Customers; No Solicitation of Employees, Etc. During
the Term and for twelve (12) months after the end of the Term the Executive
shall not:
(i) divert
to any competitor of the Company or any of its affiliates or subsidiaries,
any
customer, supplier or business partner of the Company or any of its affiliates
or subsidiaries; or
(ii) solicit
or encourage any officer, employee or consultant of the Company or any of its
affiliates or subsidiaries to leave the employ of the Company or any of its
affiliates or subsidiaries for employment by or with any competitor of the
Company or any of its affiliates or subsidiaries;
provided,
however, that the Executive may invest in stocks, bonds or other
securities of any competitor of the Company or any of its affiliates or
subsidiaries if:
(A) such
stocks, bonds, or other securities are listed on any national or regional
securities exchange or have been registered under Section 12(g) of the
Securities Exchange Act of 1934;
(B) his
investment does not exceed, in the case of any class of the capital stock of
any
one issuer, one percent (1%) of the issued and outstanding shares, or, in the
case of other securities, one percent (1%) of the aggregate principal amount
thereof issued and outstanding; and
(C) such
investment would not prevent, directly or indirectly, the transaction of
business by the Company and/or of its affiliates or subsidiaries with any state,
district, territory or possession of the United States or any governmental
subdivision, agency or instrumentality thereof by virtue of any statute, law,
regulation or administrative practice.
If,
at
any time, the provisions of this Section 6(b) shall be determined to be invalid
or unenforceable by reason of being vague or unreasonable as to area, duration
or scope of activity, this Section 6(b) shall be considered severable and shall
become and shall be immediately amended solely with respect to such area,
duration and scope of activity as shall be determined to be reasonable and
enforceable by the court or other body having jurisdiction over the matter
and
the Executive hereby agrees that this Section 6(b) as so amended shall be valid
and binding as though any invalid or unenforceable provision had not been
included herein. Except as provided in this Section 6, nothing in
this Agreement shall prevent or restrict the Executive from engaging in any
business or industry in any capacity.
(c) Nondisclosure
of Confidential Information. The Executive shall keep secret and
confidential and shall not disclose to any third party in any fashion or for
any
purpose whatsoever, any information regarding this Agreement, or any other
information regarding the Company or its affiliates or subsidiaries which is
not
available to the general public, and/or not generally known outside
the Company or any such affiliate or subsidiary, to which he has or shall have
had access at any time during the course of his employment with the Company,
including, without limitation, any information relating to the Company’s (and
its affiliates’ or subsidiaries’):
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(i) business,
operations, plans, strategies, prospects or objectives;
(ii) products,
technologies, processes, specifications, research and development operations
and
plans;
(iii) customers
and customer lists;
(iv) distribution,
sales, service, support and marketing practices and operations;
(v) financial
condition and results of operations;
(vi) operational
strengths and weaknesses; and
(vii) personnel
and compensation policies and procedures.
Notwithstanding
the foregoing provisions of this Section 6, the Executive may discuss this
Agreement with the members of his immediate family and with his personal legal
and tax advisors and may disclose the existence of his employment with the
Company to any third party. Executive understands that this Agreement
and the terms hereof shall be filed with the U.S. Securities and Exchange
Commission and disclosed in the Company’s securities filings and disclosures, as
required by law.
(d) Specific
Performance. Without intending to limit the remedies available to
the Company or its affiliates or subsidiaries, the Executive hereby agrees
that
damages at law would be an insufficient remedy to the Company or its affiliates
or subsidiaries in the event that the Executive violates any of the provisions
of this Section 6, and that, in addition to money damages, the Company or its
affiliates or subsidiaries may apply for and, upon the requisite showing, have
injunctive relief in any court of competent jurisdiction to restrain the breach
or threatened breach of or otherwise to specifically enforce any of the
covenants contained in this Section 6.
7. Successors. This
Agreement cannot be assigned by any of the parties hereto without the prior
written consent of the other party hereto, except that it shall be binding
automatically on any successors and assigns of all or substantially all of
the
business and/or assets of the Company (whether direct or indirect, by purchase,
merger, consolidation or otherwise).
8. Inventions. Executive
agrees to make prompt and full written disclosure to the Company, to hold in
trust for the sole right and benefit of the Company, and hereby assigns to
the
Company, or its designee, all right, title, and interest in and to any and
all
inventions, original works of authorship, developments, concepts, improvements
or trade secrets, whether or not patentable or registrable under copyright
or
similar laws, which Executive may solely or jointly conceive or develop or
reduce to practice, or cause to be conceived or developed or reduced to
practice, during the period of time Executive is in the employ of the Company
that (1) are created using the Company’s facilities, supplies, information,
trade secrets or time; (2) directly or indirectly relate to or arise out of
the
business of the Company, including without limitation the research and
development activities, of the Company; or (3) relate to or arise out of any
task
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assigned
to Executive or work Executive performs for the Company (collectively
“Inventions”). Employee further acknowledges that all original works
of authorship which are made by the Employee (solely or jointly with others)
within the scope of and during the period of employment with the Company and
which are protectible by copyright are “works made for hire,” as that term is
defined in the United States Copyright Act. The assignment of
inventions does not apply to an invention that Executive developed entirely
on
his or her time without using the Company’s equipment, supplies, facilities or
trade secret information except for those inventions that either: (1)
relate at the time of conception or reduction to practice of the invention
to
the Company’s business, or actual or demonstrably anticipated research or
development of the Company; or (2) result from any work performed by Executive
for the Company.
9. Maintenance
of Records. Executive agrees to keep and maintain adequate and
current written records of all Inventions made by Executive (solely or jointly
with others) during the term of Executive’s employment with the
Company. The records will be in the form of notes, sketches,
drawings, and any other format that may be specified by the
Company. The records will be available to and remain the sole
property of the Company at all times.
10. Arbitration. Except
as provided in Section 6(d), all controversies, claims or disputes arising
out
of or relating to this Agreement shall be settled by binding arbitration before
and under the Commercial Rules of the American Arbitration Association, as
the
sole and exclusive remedy of either party, and judgment upon such award rendered
by the arbitrators(s) may be entered in any court of competent
jurisdiction. The costs of arbitration shall be borne by the
unsuccessful party or otherwise as determined by the arbitrators in their
discretion.
11. Governing
Law. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of California
without regard to conflicts of law principles.
12. Amendments. No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing signed by the
Executive and such officers of the Company as may be specifically designated
for
such purpose by the Board.
13. Entire
Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto.
14. Indemnification. The
Company shall indemnify the Executive to the full extent permitted by applicable
Delaware law, as well as its charter and by-laws, for all liabilities incurred
by the Executive in connection with his reasonable execution of his duties
hereunder. The Company agrees to provide directors and officers
insurance coverage on behalf of the Company and its directors and
officers.
15. Survival. The
obligations of the parties hereto contained in Sections 5, 6, 10 and 14 shall
survive the termination of this Agreement.
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16. Notices. For
all purposes of this Agreement, notices and all other communications under
or in
connection with this Agreement shall be deemed to have been duly given when
delivered or mailed by United States certified or registered mail, return
receipt requested, postage prepaid, addressed as follows:
If
to the
Executive: Xxxxxxx
Xxxxxxx
000
Xxxxxxx Xx.
Xxxx
Xxxxxx,
Xxxxxxxx 00000
If
to the
Company: Immunosyn
Corporation
0000
Xxxxxxxxx Xxxxxx
Xxxxx
000
XxXxxxx,
Xxxxxxxxxx 00000
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.
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IMMUNOSYN
CORPORATION
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By:
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/s/ Xxxxxxx X. XxXxxxx Xx. | |
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Name:
Xxxxxxx X. XxXxxxx Xx.
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Title:
Chief Financial Officer
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/s/
Xxxxxxx X. Xxxxxxx
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XXXXXXX
X. XXXXXXX
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