Exhibit 10.4
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of __________ 1999 by and between UTEK
Corporation, a Delaware corporation, having an office at 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx Xxxx, Xxxxxxx 00000 (hereinafter referred to as "Employer") and
Xxx Xxxxxxx, MD, Ph.D.,c/o Utek Corporation,(hereinafter referred an individual
"Employee"):
WHEREAS, Employer employs, and desires to continue to employ, Xx.
Xxxxxxx as the President of Employer, and
WHEREAS, Employee is willing to continue to be employed as the
President in the manner provided for herein, and to perform the duties of the
Employer upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein set forth it is agreed as follows;
1. Employment of Employee: Employer hereby employs Employee as
President.
2. Term.
a. Subject to Section 10 below and further subject to Section 2(b)
below, the term of this Agreement shall commence on the first day of September
1999 and expire five years from such date. Each 12 month period from the
commencement date forward during the term hereof shall be referred to as an
"Annual Period." During the term hereof, Employee shall devote substantially all
of his business time and efforts to Employer and its subsidiaries and
affiliates.
b. Subject to Section 10 below, unless the Board of Directors of this
Company (the "Board") of Employer shall determine to the contrary and shall so
notify Employee in writing on or before the end of any Annual Period or unless
the Employee notifies Employer in writing on or before the end of the final
Annual Period of his desire not to renew this Agreement, then at the end of each
Annual Period, the term of this Agreement shall be automatically extended for
one (1) additional Annual Period to be added at the end of the then current term
of this Agreement.
3. Duties The Employee shall perform those functions generally
performed by persons of such title and position, shall perform any and all
related duties and shall have any and all powers as may be prescribed by
resolution of the Board, and shall be available to confer and consult with and
advise the officers and directors of Employer at such times that may be required
by Employer. Employee shall report directly and solely to the CEO.
4. Compensation
a. (i) Employee shall be paid a salary of $100,000. Employee shall be
paid periodically in accordance with the policies of the Employer during the
term of this Agreement, but not less than monthly. Employee shall be paid
periodically in accordance with the policies of the Employer during the term of
this Agreement, but not less than monthly. The basic compensation provided in
this Agreement shall be adjusted annually to reflect the increase, if any, in
the cost of living by adding to such basic salary an amount obtained by
multiplying the basic salary by the percentage by which the level of the
Consumer Price Index for all urban consumers for the United States, as reported
by the Bureau of Labor Statistics of the United States Department of Labor has
increased over its level as of the date of the commencement of this Agreement.
The adjustment shall take place on September 1, of each year and the Employer
shall begin paying the adjusted salary on September 15, of each year. The
Employee shall be paid such additional compensation from the Employer for the
services rendered under this Agreement as may be determined, from time to time,
in the sole discretion of the Chief Executive Officer.
b. (ii) Company shall grant to the employee 50,000 incentive stock
options (ISO's)to purchase UTEK shares at 100% of the IPO price. These options
will vest the sooner of either pro rata, quarterly, over 36 months or upon the
bid price of UTEK being > or = to $10 for 15 consecutive trading days.
(iii) A $500 per month automobile allowance.
d. Employer shall include Employee in its health insurance program
available to Employer's executive officers and shall pay 100% of the premiums
for such program.
e. Employee shall have the right to participate in any other employee
benefit plans established by Employer.
5. Expenses. Employee shall be reimbursed for all of his actual
out-of-pocket expenses incurred in the performance of his duties hereunder,
provided such expenses are acceptable to Employer, which approval shall not be
unreasonably withheld, for business related travel and entertainment expenses,
and that Employee shall submit to Employer reasonably detailed receipts with
respect thereto.
6. Vacation Employee shall be entitled to receive three(3) weeks paid
vacation time after each year of employment upon dates agreed upon by Employer.
Upon separation of employment, for any reason, vacation time accrued and not
used shall be paid at the salary rate of Employee in effect at the time of
employment separation.
8. Secrecy At no time shall Employee disclose to anyone any
confidential or secret information (not already constituting information
available to the public) concerning internal affairs or proprietary business
operations of Employer.
9. Covenant Not to Compete Subject to, and limited by, section 11(b),
Employee will not, at any time, anywhere in the world, during the term of this
Agreement, and for one (1) year thereafter, either directly or indirectly,
engage in, with or for any enterprise, institution, whether or not for profit,
business, or company, competitive with the business of Employer as such business
may be conducted on the date thereof, as a creditor, guarantor, or financial
backer, stockholder, director, officer, consultant, advisor, employee, member,
inventor, producer, director, or otherwise of or through any corporation,
partnership, association, sole proprietorship or other entity; provided, that an
investment by Employee, his spouse or his children is permitted if such
investment is not more than four percent (4%) of the total debt or equity
capital of any such competitive enterprise or business and further provided that
said competitive enterprise or business is a publicly held entity whose stock is
listed and traded on a national stock exchange or through the NASDAQ Stock
Market.
10. Termination.
a. Termination by Employer
(i) Employer may terminate this Agreement upon written notice for
Cause. For purposes hereof, "Cause" shall mean (A) engaging by the Employee in
conduct that constitutes activity in competition with Employer; (B) the
conviction of Employee for the commission of a felony; and/or (C) the habitual
abuse of alcohol or controlled substances. Notwithstanding anything to the
contrary in this Section 10(a)(i), Employer may not terminate Employee's
employment under this Agreement for Cause unless Employee shall have first
received notice from the Board advising Employee of the specific acts or
omissions alleged to constitute cause, and such acts or omissions continue after
Employee shall have had a reasonable opportunity (At least 10 days from the date
Employee receives the notice from the Board) to correct the acts or omissions so
complained of. In no event shall alleged incompetence of Employee in the
performance of Employees duties be deemed grounds for termination for Cause.
(ii) Employer may terminate Employee's employment under this
Agreement if, as a result of any physical or mental disability, Employee shall
fail or be unable to perform his duties under this Agreement for any consecutive
period of 90 days during any twelve-month period. If Employees employment is
terminated under this Section 10(a)(ii): (A) for the first six months after
termination, Employee shall be paid 100% of his full compensation under Section
4(a) of this Agreement at the rate in affect on the date of termination, and in
each successive 12 month period thereafter Employee shall be paid an amount
equal to 67% of his compensation under Section 4(a) of this agreement at the
rate in effect on the date of termination and (B) Employee shall continue to be
entitled, insofar as is permitted under applicable insurance policies or plans,
to such general medical and employee benefit plans (including profit sharing or
pension plans) as Employee had been entitled to on the date of termination. Any
amounts payable by Employer to Employee under this paragraph shall be reduced by
the amount of any disability payments payable by or pursuant to plans provided
by Employer and actually paid to Employee.
(iii) This agreement automatically shall terminate upon the death of
Employee, except that Employee's estate shall be entitled to receive any amount
accrued under Section 4(a) and any other amount to which Employee was entitled
of the time of his death.
b. Termination by Employee
Employee shall have the right to terminate his employment under this
Agreement upon 30 days' notice to Employer given within 90 days following the
occurrence of any of the following events (A) through (E):
(A) Employee is not elected or retained as President.
(B) Employer acts to materially reduce Employee's duties and
responsibilities hereunder. Employee's duties and responsibilities shall not be
deemed materially reduced for purposes hereof solely by virtue of the fact that
Employer is (or substantially all of its assets are) sold to, or is combined
with, another entity, provided that Employee shall continue to have the same
duties and responsibilities with respect to Employer's business, and Employee
shall report directly to the chief executive officer and/or board of directors
of the entity (or individual) that acquires Employer or its assets.
(C) A Material Reduction (as hereinafter defined) in Employees rate
of base compensation, or Employee's other benefits. "Material Reduction" shall
mean a ten percent (10%) differential;
(D) A failure by Employer to obtain the assumption of this Agreement
by any successor;
(E) A material breach of this Agreement by Employer, which is not
cured within thirty (30) days of written notice of such breach by Employer;
(c) If Employer shall terminate Employee's employment other than due to
his death or disability or for Cause (as defined in Section 10(a)(i) of this
Agreement), or if Employee shall terminate this Agreement under Section
10(b)(i), Employer's obligations under Section 4 shall be absolute and
unconditional and not subject to any offset or counterclaim and Employee shall
continue to be entitled to receive all amounts provided for by Section 4 and all
additional employee benefits under Section 4 regardless of the amount of
compensation he may earn with respect to any other employment he may obtain
11. Consequences of Breach by Employment Termination.
a. If this Agreement is terminated pursuant to Section 1D(b)(i) hereof,
or if Employer shall terminate Employee's employment under this Agreement in any
way that is a breach of this Agreement by Employer, the following shall apply:
(i) Employee shall receive as a bonus, and in addition to his salary
continuation pursuant to Section 10 (b)(8)above, a cash payment equal to the
Employee's total base salary as of the date of termination hereunder for the
remainder of the term plus an additional amount to pay all federal, state and
local income taxes thereon on a grossed-up basis as heretofore provided, payable
within 30 days of the date of such termination.
(ii) Employee shall be entitled to payment of any previously
declared bonus and additional compensation as provided in Section 4(a) and (b)
above.
b. In the event of termination of Employees employment pursuant to
Section 10(b)(i) of this Agreement, the provisions of Section 9 shall not apply
to Employee.
12. Remedies
Employer recognizes that because of Employee's special talents, stature
and opportunities in the technology acquisition industry, and because of the
special creative nature of and compensation practices of said industry and the
material impact that individual projects can have on company's results of
operations, in the event of termination by Employer hereunder (except under
Section 10(a)(i) or (iii), or in the event of termination by Employee under
Section 10(b)(i) before the end of the agreed term, the Employer acknowledges
and agrees that the provisions of this Agreement regarding further payments of
base salary, bonuses and the exercisability of Rights Constitute fair and
reasonable provisions for the consequences of such termination, do not
constitute a penalty, and such payments and benefits shall not be limited or
reduced by amounts' Employee might earn or be able to earn from any other
employment or ventures during the remainder of the agreed term of this
Agreement.
13. Excise Tax. In the event that any payment or benefit received or to
be received by Employee in connection with a termination of his employment with
Employer would constitute a "parachute payment" within the meaning of Code
Section 28OG or any similar or successor provision to 28OG and/or would be
subject to any excise tax imposed by Code Section 4999 or any similar or
successor provision then Employer shall assume all liability for the payment of
any such tax and Employer shall immediately reimburse Employee on a "grossed-up"
basis for any income taxes attributable to Employee by reason of such Employer
payment and reimbursements.
14. Arbitration Any controversies between Employer and Employee
involving the construction or application of any of the terms, provisions or
conditions of this Agreement, save and except for any breaches arising out of
Sections 8 and 9 hereof, shall on the written request of either party served on
the other be submitted to arbitration. Such arbitration shall comply with and be
governed by the rules of the American Arbitration Association. An arbitration
demand must be made within one (1) year of the date on which the party demanding
arbitration first had notice of the existence of the claim to be arbitrated, or
the right to arbitration along with such claim shall be considered to have been
waived. An arbitrator shall be selected according to the procedures of the
American Arbitration Association. The cost of arbitration shall be born by the
losing party or in such proportions as the arbitrator shall decide. The
arbitrator shall have no authority to add to, subtract from or otherwise modify
the provisions of this Agreement, or to award punitive damages to either party.
15. Attorney's Fees and Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which he may be entitled.
16. Entire Agreement; Survival. This Agreement contains the entire
agreement between the parties with respect to the transactions contemplated
herein and supersedes, effective as of the date hereof any prior agreement or
understanding between Employer and Employee with respect to Employee's
employment by Employer. The unenforceability of any provision of this Agreement
shall not effect the enforceability of any other Provision. This Agreement may
not be amended except by an agreement in writing signed by the Employee and the
Employer, or any waiver, change, discharge or modification as sought. Waiver of
or failure to exercise any rights provided by this Agreement and in any respect
shall not be deemed a waiver of any further or future rights.
The provisions of Sections 4, 8, 9,10(a)(ii) 10(a)(iii), 10(c), 11, 12,
13, 14, 19, and 20 shall survive the termination of this Agreement.
17. Assignment This Agreement shall not be assigned to other parties.
18. Governing Law This Agreement and all the amendments hereof, and
waivers and consents with respect thereto shall be governed by the internal laws
of the State of Florida, without regard to the conflicts of laws principles
thereof. 19. Notice All notices, responses, demands or other communications
under this Agreement shall be in writing and shall be deemed to have been given
when
a. delivered by hand;
b. sent be telex or telefax, (with receipt confirmed), provided that a
copy Is mailed by registered or certified mail, return receipt requested; or
c. received by the addressee as sent be express delivery service
(receipt requested) in each case to the appropriate addresses, telex numbers and
telefax numbers as the party may designate to itself by notice to the other
parties:
(i) If to the Employer:
UTEK Corporation
000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxx Xxxx, Xx 00000
Telefax: 000-000-0000
Telephone: 000-000-0000
(ii) If to the Employee:
Xx. Xxx Xxxxxxx
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx Xxxx, Xx 00000
Telefax: 000-000-0000
Telephone: 000-000-0000
20. Severability Should any part of this Agreement for any reason be
declared invalid by a court of competent jurisdiction, such decision shall not
affect the validity of any remaining portion, which remaining provisions shall
remain in full force and effect as if this Agreement had been executed with the
invalid portion thereof eliminated, and it is hereby declared the intention of
the parties that they would have executed the remaining portions of this
Agreement without including any such part, parts or portions which may, for any
reason, be hereafter declared invalid.
IN WITNESS WHEREOF, the undersigned have executed this agreement as of the day
and year first above written.
UTEK, Corporation
---------------------------- ---------------------------------
By; Xxxxxxxx X. Xxxxx, Ph.D. By; Xxx Xxxxxxx, Ph.D.,
M.D. CEO Employee
