Exhibit 99.3
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") dated effective
as of June 24, 2004 is made and entered into by and among Xxxxxx Xxxxxxx, an
individual (the "Executive") Xenomics, a company incorporated under the laws of
the state of California (the "Xenomics"), and Used Kar Parts, Inc., a company
incorporated under the laws of the state of Florida ("Holding," and,
collectively with Xenomics "Company").
WITNESSETH:
The Company desires to employ the Executive, and the Executive wishes
to accept such employment with the Company, upon the terms and conditions set
forth in this Agreement.
In consideration of the mutual promises and agreements set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
1. Employment. The Company hereby agrees to employ Executive, and
Executive hereby accepts such employment and agrees to perform Executive's
duties and responsibilities in accordance with the terms and conditions
hereinafter set forth.
1.1 Duties and Responsibilities. Executive shall serve as
President and Chief Scientific Officer of Company. During the Employment Term
(as defined below), Executive shall perform all duties and accept all
responsibilities incident to such position and other appropriate duties as may
be assigned to Executive by the Company's Board of Directors ("Board") from time
to time, including service as an officer, director, employee or consultant
Company's subsidiaries, affiliates and joint ventures. The Company shall retain
full direction and control of the manner, means and methods by which Executive
performs the services for which he is employed hereunder. Except for vacation,
personal or sick days, or holidays, Executive shall work not less than during
Company's normal business hours. Company's normal business hours are 9:00 a.m.
to 5:30 p.m. Monday to Friday.
1.2 Place of Business. Executive acknowledges that the Company
will be headquartered in New York, New York with a laboratory located in the
northeastern part of the United States, and a satellite office in Rome, Italy.
Executive may be based either in the Company's New York office or the Company's
laboratory and agrees to travel to Company's satellite office in Rome for
limited assignments.
1.3 Employment Term. The term of Executive's employment under
this Agreement shall commence as of June 24, 2004 (the "Effective Date") and
shall continue for 36 months, unless earlier terminated in accordance with
Section 4 hereof. The term of Executive's employment shall be automatically
renewed for successive one (1) year periods until the Executive or the Company
delivers to the other party a written notice of their intent not to renew the
"Employment Term," (a "Non-Renewal Notice") such written notice to be delivered
at least sixty (60) days prior to the expiration of the then-effective
"Employment Term" as that term is defined below. The period commencing as of the
Effective Date and ending 36 months thereafter or such later date (the
"Expiration Date") to which the term of Executive's employment under the
Agreement shall have been extended by mutual written agreement is referred to
herein as the "Employment Term."
1.4 Extent of Service. During the Employment Term, Executive
agrees to use Executive's best efforts to carry out the duties and
responsibilities under Section 1.1 hereof and, subject to Section 1.1, to devote
substantially all Executive's business time, attention and energy thereto.
Executive further agrees not to work either on a part-time or independent
contracting basis for any other business or enterprise during the Employment
Term without the prior written consent of the Board, which consent shall not be
unreasonably withheld.
1.5 Base Salary. From the Effective Date until the earlier of
(a) the date Company, directly or through Holding or any direct or indirect
majority owned subsidiary of Holding, has received equity or debt financing
yielding net proceeds of not less than One Million Dollars ($1,000,000), or (b)
eight (8) months after the Effective Date (the "Increase Date"), the Company
shall pay Executive a base salary (the "Base Salary") at the annual rate of
$135,000 (U.S.), payable at such times as the Company customarily pays its other
senior level executives (but in any event no less often than monthly). The Base
Salary shall be subject to all state, federal, and local payroll tax withholding
and any other withholdings required by law. Commencing on the Increase Date, the
Base Salary shall be increased to an annual rate of $175,000 (U.S.).
1.6 Incentive Compensation. In addition to the Base Salary,
Executive shall be eligible to earn a cash bonus of up to fifty (50)% of his
Base Salary for each twelve-month period during the Employment Term ("Annual
Bonus") at the discretion of the Board or, if the Board organizes a compensation
committee, such committee (the "Committee"). Within three (3) months after the
Effective Date, the Board or the Committee shall agree upon a bonus schedule
that provides the goals and targets, required for Executive to earn the Annual
Bonus, including the achievement of certain development, approval, publishing,
and revenue goals. Executive's bonus, if any, shall be subject to all applicable
tax and payroll withholdings.
1.7 Options.
(a) Executive shall be eligible to participate in the
Stock Option Plan of Holding (the "Plan"). The Board of Directors of Holding,
will make an initial grant of options to the Executive as follows:
(i) The number of option shares granted to
Executive is 1,012,500 shares of Company's
common stock.
(ii) The exercise price at which Executive can
purchase option shares is one Dollar and
twenty-five cents ($1.25) per share.
(iii) The option is exercisable only to the extent
vested in accordance with the schedule set
forth in paragraph 1.7(a)(iv), below, and
the Plan.
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(iv) The first day that option shares commence to
vest is the Effective Date. Option shares
shall vest in accordance with the following
schedule:
253,125 option shares shall vest on the
first anniversary of the Effective Date;
303,750 option shares shall vest on the
second anniversary of the Effective Date;
and
455,625 option shares shall vest on the
third anniversary of the Effective Date.
(v) The option shall expire, and be of no
further force or effect, on the earlier of
the tenth anniversary of the Effective Date
or, except in the event of Involuntary
Termination, four years after Executive
ceases to serve as an Executive to the
Company under this Agreement.
(b) In the event of the termination of Executive's
employment as a result of Involuntary Termination (as defined below), any
outstanding stock options or restricted stock held by Executive under the Plan,
Company's stock option plans, and under the stock options plans of corporations
that have merged with or into the Company shall automatically have its vesting
accelerated (including, for restricted stock, accelerated lapse of a right of
repurchase by the Company) in addition to any portion of the option or
restricted stock vested prior to the date of termination.
1.8 Other Benefits. During the Employment Term, Executive
shall be entitled to fully paid health care coverage (medical, dental, and
hospitalization) for Executive and his family. In addition, Executive shall be
entitled to participate in all employee benefit plans and programs made
available to the Company's senior level executives as a group or to its
employees generally, as such plans or programs may be in effect from time to
time (the "Benefit Coverages"), including, without limitation, short-term and
long-term disability and life insurance plans, accidental death and
dismemberment protection and travel accident insurance. Executive shall be
provided office space and staff assistance appropriate for Executive's position
and adequate for the performance of his duties and responsibilities.
1.9 Reimbursement of Expenses; Vacation; Sick Days and
Personal Days. Executive shall be provided with reimbursement of expenses
related to Executive's employment by the Company on a basis no less favorable
than that which may be authorized from time to time by the Board, in its sole
discretion, for senior level executives as a group. Executive shall be entitled
to vacation and holidays in accordance with the Company's normal personnel
policies for senior level executives, but not less than (a) two (2) weeks of
vacation per calendar year for until December 31, 2006, and (b) three (3) weeks
of vacation per calendar year thereafter, provided Executive shall not utilize
more than ten (10) consecutive business days without the express consent of the
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Chief Executive Officer. Executive shall be entitled to no more than an
aggregate of ten (10) sick days and personal days per calendar year. Unused
vacation time, sick and personal days will be forfeited as of January 31 of the
following calendar year of the Employment Term.
1.10 Relocation Expenses. Within thirty (30) days after the
Effective Date, Company shall pay Executive seven thousand five hundred Dollars
($7,500.00), excluding taxes and other withholdings, as a one time payment to
cover Executive's costs and expenses for his relocation to Company's place of
business.
1.11 No Other Compensation. Except as expressly provided in
Sections 1.4 through 1.10, and under Section 4 below, Executive shall not be
entitled to any other compensation or benefits for services to the Company in
any capacity and for services as an officer, director, employee and consultant
for Company's subsidiaries, affiliates and joint ventures.
2. Confidential Information. Executive recognizes and acknowledges that
by reason of Executive's employment by and service to the Company before, during
and, if applicable, after the Employment Term, Executive will have access to
certain confidential and proprietary information relating to the Company's
business, which may include, but is not limited to, trade secrets, trade
"know-how," product development techniques and plans, formulas, customer lists
and addresses, financing services, funding programs, cost and pricing
information, marketing and sales techniques, strategy and programs, computer
programs and software and financial information (collectively referred to herein
as "Confidential Information"). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company and Executive
covenants that he will not, unless expressly authorized in writing by the
Company, at any time during the course of Executive's employment use any
Confidential Information or divulge or disclose any Confidential Information to
any person, firm or corporation except in connection with the performance of
Executive's duties for and on behalf of the Company and in a manner consistent
with the Company's policies regarding Confidential Information. Executive also
covenants that at any time after the termination of such employment, directly or
indirectly, he will not use any Confidential Information or divulge or disclose
any Confidential Information to any person, firm or corporation, unless such
information is in the public domain through no fault of Executive or except when
required to do so by a court of law, by any governmental agency having
supervisory authority over the business of the Company or by any administrative
or legislative body (including a committee thereof) with apparent jurisdiction
to order Executive to divulge, disclose or make accessible such information. All
written Confidential Information (including, without limitation, in any computer
or other electronic format) which comes into Executive's possession during the
course of Executive's employment shall remain the property of the Company.
Unless expressly authorized in writing by the Company, Executive shall not
remove any written Confidential Information from the Company's premises, except
in connection with the performance of Executive's duties for and on behalf of
the Company and in a manner consistent with the Company's policies regarding
Confidential Information. Upon termination of Executive's employment, the
Executive agrees to immediately return to the Company all written Confidential
Information (including, without limitation, in any computer or other electronic
format) in Executive's possession. As a condition of Executive's continued
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employment with the Company and in order to protect the Company's interest in
such proprietary information, the Company shall require Executive's execution of
a Confidentiality Agreement and Inventions Agreement in the form attached hereto
as Exhibit "A", and incorporated herein by this reference.
3. Non-Competition; Non-Solicitation.
3.1 Non-Compete. The Executive hereby covenants and agrees
that during the term of this Agreement and, in the event of (a) Voluntary
Termination (as defined below), or (b) termination by Company for Cause (as
defined below) or Misconduct (as defined below), or (c) the expiration of the
Employment Term as a result of Executive giving Company a Non-Renewal Notice for
a period of one year following the end of the Employment Term, the Executive
will not, without the prior written consent of the Company, directly or
indirectly, on his own behalf or in the service or on behalf of others, whether
or not for compensation, engage in any business activity, or have any interest
in any person, firm, corporation or business, through a subsidiary or parent
entity or other entity (whether as a shareholder, agent, joint venturer,
security holder, trustee, partner, consultant, creditor lending credit or money
for the purpose of establishing or operating any such business, partner or
otherwise) with any Competing Business in the Covered Area. For the purpose of
this Section 3.1, (i) "Competing Business" means any medical or health care
company, any contract manufacturer, any research laboratory or other company or
entity (whether or not organized for profit) that has, or is seeking to develop,
one or more products or therapies that is related to genetic testing through the
use of urine specimens and (ii) "Covered Area" means all geographical areas of
the United States, Italy and other foreign jurisdictions where Company then has
offices and/or sells its products directly or indirectly through distributors
and/or other sales agents. Notwithstanding the foregoing, the Executive may own
shares of companies whose securities are publicly traded, so long as ownership
of such securities do not constitute more than one percent (1%) of the
outstanding securities of any such company.
3.2 Non-Solicitation. The Executive further agrees that as
long as the Agreement remains in effect and, in the event of (a) Voluntary
Termination, or (b) termination by Company for Cause, Misconduct or as a result
of a Non-Renewal Notice given by the Company or Executive for a period of one
(1) year from its termination, the Executive will not divert any business of the
Company and/or its affiliates or any customers or suppliers of the Company
and/or the Company's and/or its affiliates' business to any other person, entity
or competitor, or induce or attempt to induce, directly or indirectly, any
person to leave his or her employment with the Company and/or its affiliates.
3.3 Remedies. The Executive acknowledges and agrees that his
obligations provided herein are necessary and reasonable in order to protect the
Company and its affiliates and their respective business and the Executive
expressly agrees that monetary damages would be inadequate to compensate the
Company and/or its affiliates for any breach by the Executive of his covenants
and agreements set forth herein. Accordingly, the Executive agrees and
acknowledges that any such violation or threatened violation of this Section 3
will cause irreparable injury to the Company and that, in addition to any other
remedies that may be available, in law, in equity or otherwise, the Company and
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its affiliates shall be entitled to obtain injunctive relief against the
threatened breach of this Section 3 or the continuation of any such breach by
the Executive without the necessity of proving actual damages.
4. Termination.
4.1 By Company. The Company, acting by duly adopted
resolutions of the Board, may, in its discretion and at its option, terminate
the Executive's employment with or without Cause or Misconduct, and without
prejudice to any other right or remedy to which the Company or Executive may be
entitled at law or in equity or under this Agreement. In the event the Company
desires to terminate the Executive's employment without Cause or Misconduct, the
duly adopted resolutions of the Board must include the consent of at least one
director appointed to the Board by the former shareholders of Xenomics, and the
Company shall give the Executive not less than sixty (60) days advance written
notice of such termination. Termination of Executive's employment hereunder
shall be deemed to be "for Cause" in the event that Executive violates his
duties under any provisions of this Agreement after there has been delivered to
Executive a written demand for performance from the Company which describes the
basis for the Company's belief that Executive has not substantially performed
his duties. Termination of Executive's employment hereunder shall be deemed to
be "for Misconduct", if Executive is found to be in material breach of the
provisions of Sections 2 or 3 of this Agreement, is guilty of any felony or an
act of fraud or embezzlement, is guilty of willful misconduct or gross neglect,
misappropriation, concealment or conversion of any money or property of the
Company, or reckless conduct which endangers the safety of other persons or
property during the course of employment or while on premises leased or owned by
the Company.
4.2 Involuntary Termination. "Involuntary Termination" shall
mean (i) the assignment to Executive of any duties or the significant reduction
of Executive's duties, either of which is materially inconsistent with
Executive's position with the Company and responsibilities in effect immediately
prior to such assignment, or the removal of Executive from such position and
responsibilities; (ii) a material reduction by the Company in the compensation
of Executive, without the Executive's written consent, as in effect immediately
prior to such reduction; (iii) a material reduction by the Company in the kind
or level of benefits to which Executive is entitled immediately prior to such
reduction with the result that Executive's overall benefits package is
significantly reduced; (iv) the relocation of Executive to a facility or a
location outside the United States on a permanent basis; (v) any termination of
Executive by the Company which is not effected for Misconduct, Cause or as a
result of a Non Renewal Notice given by the Company or Executive, or any
purported termination for Misconduct or Cause for which the grounds relied upon
are determined by a court of competent jurisdiction not to be valid, unless
Executive, following such purported termination, receives all compensation,
including vesting of all unvested stock options and restricted stock within five
business days of such determination, or (vi) the termination by Executive for
Company's or Holding's violation of any material provision of this agreement,
unless the grounds relied upon are determined by a court of competent
jurisdiction not to be valid.
4.3 By Executive's Death or Disability. This Agreement shall
also be terminated upon the Executive's death and/or a finding of permanent
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physical or mental disability, such disability expected to result in death or to
be of a continuous duration of no less than three (3) months, and the Executive
is unable to perform his usual and essential duties for the Company.
4.4 Voluntary Termination. Executive may voluntarily terminate
the Employment Term upon sixty (60) days' prior written notice for any reason;
provided, however, that no further payments shall be due under this Agreement in
that event except that Executive shall be entitled to any benefits due under any
compensation or benefit plan provided by the Company for executives or otherwise
outside of this Agreement.
4.5 Compensation on Termination.
(a) Cause or Misconduct. In the event the Company
terminates Executive for Cause or Misconduct, Executive shall not be entitled to
any compensation other than Base Salary accrued through the date of termination.
Such termination shall also immediately cease the vesting of all outstanding
unvested options and restricted stock held on the date of termination and all
such unvested options shall thereupon expire.
(b) Voluntary Termination. In the event Executive
resigns from the Company voluntarily, Executive shall not be entitled to any
compensation other than Base Salary accrued through the effective date of his
resignation.
(c) Involuntary Termination. In the event Executive
is terminated by the Company due to an Involuntary Termination prior to the
expiration of the Employment Term, the Company shall pay to Executive (i) the
balance of Executive's Base Salary in accordance with the schedule such payments
had been made during the six months preceding such termination for the remainder
of the Employment Term; and (ii) twenty five percent (25%) of such balance,
representing an estimate of all bonuses which would have been paid during such
period, payable 60 days after such termination. In addition, the Company shall
be obligated, for a period of twenty-four (24) months after any Involuntary
Termination, to continue to make available to Executive and to pay for all
health, dental, vision, life, dependent life, long-term disability, accidental
death and dismemberment and other similar insurance plans existing on the date
of Executive's termination, or to provide comparable coverage. The Company shall
"gross-up" Executive for any income required to be imputed by virtue of
providing the benefits set forth in the preceding sentence, such that the net
economic result to Executive will be as if such benefits were provided on a
tax-free basis.
(d) Death or Disability In the event of termination
by reason of Executive's death and/or permanent disability, Executive or his
executors, legal representatives or administrators, as applicable, shall be
entitled to an amount equal to Executive's Base Salary accrued through the date
of termination, plus a pro rata share of any annual bonus to which Executive
would otherwise be entitled for the year during which death or permanent
disability occurs.
5. Guarantee by Holding. Holding hereby unconditionally and irrevocably
guarantees to Executive the timely payment and performance by Company of all
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payments under this Agreement as they becomes due. Holding acknowledges,
covenants and agrees that this guaranty shall survive the termination of the
Agreement and shall continue in full force and effect with respect to any of
Company's obligations hereunder which are not performed upon and which survive
the termination of this Agreement.
6. General Provisions.
6.1 Modification; No Waiver. No modification, amendment or
discharge of this Agreement shall be valid unless the same is in writing and
signed by all parties hereto. Failure of any party at any time to enforce any
provisions of this Agreement or any rights or to exercise any elections shall in
no way be considered to be a waiver of such provisions, rights or elections and
shall in no way affect the validity of this Agreement. The exercise by any party
of any of its rights or any of its elections under this Agreement shall not
preclude or prejudice such party from exercising the same or any other right it
may have under this Agreement irrespective of any previous action taken.
6.2 Notices. All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when hand delivered or mailed
by registered or certified mail as follows (provided that notice of change of
address shall be deemed given only when received):
If to the Company, to: Xenomics
0000 Xxxxxxxx Xxx.
Xxxxxxxx, XX 00000
Attn: President
with a required copy to:
Xxxx Xxxxxxx, Esq.
Xxxxxxxxxxx & Xxxxxxxx LLP
Four Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
If to Executive, to: Xxxxxx Xxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.
6.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
6.4 Further Assurances. Each party to this Agreement shall
execute all instruments and documents and take all actions as may be reasonably
required to effectuate this Agreement.
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6.5 Severability. Should any one or more of the provisions of
this Agreement or of any agreement entered into pursuant to this Agreement be
determined to be illegal or unenforceable, then such illegal or unenforceable
provision shall be modified by the proper court or arbitrator to the extent
necessary and possible to make such provision enforceable, and such modified
provision and all other provisions of this Agreement and of each other agreement
entered into pursuant to this Agreement shall be given effect separately from
the provisions or portion thereof determined to be illegal or unenforceable and
shall not be affected thereby.
6.6 Successors and Assigns. Executive may not assign this
Agreement without the prior written consent of the Company. The Company may
assign its rights without the written consent of Executive, so long as the
Company or its assignee complies with the other material terms of this
Agreement. The rights and obligations of the Company under this Agreement shall
inure to the benefit of and be binding upon the successors and permitted assigns
of the Company, and the Executive's rights under this Agreement shall inure to
the benefit of and be binding upon his heirs and executors. The Company's
subsidiaries and controlled affiliates shall be express third party
beneficiaries of this Agreement.
6.7 Entire Agreement. This Agreement supersedes all prior
agreements and understandings between the parties, oral or written. No
modification, termination or attempted waiver shall be valid unless in writing,
signed by the party against whom such modification, termination or waiver is
sought to be enforced.
6.8 Counterparts; Facsimile. This Agreement may be executed in
one or more counterparts, each of which shall for all purposes be deemed to be
an original, and all of which taken together shall constitute one and the same
instrument. This Agreement may be executed by facsimile with original signatures
to follow.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first written above.
"COMPANY:" Xenomics,
a California Corporation
By: /s/ L. Xxxxx Xxxxx
--------------------------------
Name: L. Xxxxx Xxxxx
Title: Chief Executive Officer
"EXECUTIVE:" /s/ Xxxxxx Xxxxxxx
--------------------------------
Xxxxxx Xxxxxxx
"HOLDING:" Used Kar Parts, Inc.,
a Florida Corporation
By: /s/ Xxxxxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxxxxx Xxxxxxxx
Title: President
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Exhibit A
Confidentiality Agreement and Inventions Agreement
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