EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 22, 1999, by and between
BRITESMILE, INC. (the "COMPANY"), a Utah corporation, and XXXXX XXXXX (the
"EMPLOYEE").
W I T N E S S E T H:
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WHEREAS, upon the terms and subject to the conditions of this
Agreement, the Company desires to employ the Employee and the Employee desires
to accept employment by the Company;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. Employment. Upon the terms and subject to the conditions of this
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Agreement, the Company hereby employs the Employee and the Employee hereby
accepts employment with the Company in the capacities hereinafter set forth.
2. Term of Employment. Unless earlier terminated pursuant to
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Section 6 below, the term (the "TERM") of this Agreement shall commence on the
date hereof and shall continue in effect through June 30, 2000; provided,
however, that commencing on June 30, 2000 and each anniversary thereof the term
of this Agreement shall be extended for an additional year from June 30, 2000 or
such anniversary as the case may be unless not later than 30 days prior to such
automatic extension date the Company or the Employee shall have given notice
that such party does not want to extend the term of this Agreement in which case
the term of this Agreement shall end on June 30, 2000 or, if later, on the date
to which the term of this Agreement was last automatically extended.
3. Duties; Extent of Services.
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(a) Duties. During the Term, the Employee shall serve in such
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capacity and may be reasonably designated by the Chairman or Chief Executive
Officer (either such person the "CH/CEO") of the Company, initially as
President, Center Division of BriteSmile, Inc., and shall perform the duties,
undertake the responsibilities and exercise the authority reasonably required of
such an employee of the Company, and shall have such other powers and perform
such additional executive duties as may be assigned to her from time to time by
the CH/CEO. The Employee shall report to and carry out the lawful directions of
the CH/CEO.
(b) Extent of Services. Except for illness and permitted vacation
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periods, during the Term the Employee shall (i) devote her full time and
attention during normal business hours to the businesses of the Company and its
subsidiaries and Affiliates (as defined herein);
(ii) use her best efforts to promote the interests of the Company and its
subsidiaries and Affiliates; (iii) discharge such executive and administrative
duties not inconsistent with her position as may be assigned to her by the
CH/CEO; and (iv) serve, without additional compensation, as a director or
officer of the Company or any subsidiary of the Company if elected as such.
4. Compensation Benefits.
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(a) Salary. In consideration of the services rendered by the
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Employee hereunder and provided that the Employee has substantially performed
all of her obligations provided for herein, the Company will pay to the Employee
a salary (the "BASE SALARY") at the following rates per year during the Term.
. $165,000 per annum from the date hereof through June 30, 1999;
and
. $175,000 per annum from July 1, 1999 through June 30, 2000.
The amount of Employee's Base Salary for the term, if any, of this Agreement
after June 30, 2000, will be subjected to the mutual agreement of the parties.
The Base Salary shall be paid in accordance with the Company's normal payroll
practice.
(b) Commencing with the Company's first fiscal year which begins
after the date hereof Employee shall also be eligible to receive bonus
compensation ("BONUS COMPENSATION") under such cash bonus plan as the Company
may adopt for its key executives generally. In the event that the Company does
not adopt a cash bonus plan for its key executives generally, such bonus
compensation shall be earned based upon the attainment of annual profitability
and management objectives relating to the Company's Center Division which
objectives shall be reasonably agreed upon by Employee and the Company within 30
days of the beginning of each period to which such Bonus Compensation relates.
(c) During the Term, the Employee shall be entitled (i) to vacation
time in accordance with the Company's policy from time to time in effect; (ii)
to participate in all employee insurance and other fringe benefit programs,
including, without limitation, life, health, dental and accident insurance plans
and long term disability now or hereafter maintained by the Company for senior
executive or other salaried personnel for which the Employee is eligible; and
(iii) to participate in a pension plan with terms similar to those applicable to
executives of the Company.
5. Options. In consideration of Employee's entering into and
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performing the Agreement, Employee will be granted by the Company options to
purchase 200,000 shares of the
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Company's Common Stock at $1.75 per share pursuant to a separate option
agreement under the Company's 1997 Stock Option and Incentive Plan (the "PLAN").
Such options shall have terms reasonably determined by the Company under the
Plan; provided Employee's right to purchase shares of the Company's stock
pursuant to such options shall vest as follows:
. the right to purchase 50,000 of such shares shall vest on the
date hereof;
. the right to purchase an additional 30,000 of such shares shall
vest on each of July 1, 1999, July 1, 2000, July 1, 2001, July 1,
2002 and July 1, 2003 if Executive has remained in the employ of
the Company from the date hereof to such date.
6. Termination Provisions.
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(a) Termination for Cause. The Board may terminate the Employee's
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employment hereunder for Cause, as hereinafter defined, immediately upon written
notice to the Employee. For purposes of this Agreement, "CAUSE" shall mean (i)
embezzlement, theft or other misappropriation of any property of the Company or
any Affiliate, (ii) gross or willful misconduct resulting in substantial loss to
the Company or any Affiliate or substantial damage to the reputation of the
Company or any Affiliate, (iii) any act involving moral turpitude which results
in a conviction for a felony involving moral turpitude, fraud or
misrepresentation, (iv) gross neglect of her assigned duties to the Company or
any Affiliate, (v) gross breach of her fiduciary obligations to the Company or
any Affiliate, or (vi) any chemical dependence which materially affects the
performance of her duties and responsibilities to the Company or any Affiliate;
provided that in the case of the misconduct set forth in clauses (iv) and (vi)
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above, such misconduct shall continue for a period of 30 days following written
notice thereof by the Company to the Employee. During the Term, the Employee
shall be entitled to only one such notice and right to cure for any single act
or event. If the Employee's employment is terminated for Cause, the Employee
shall be entitled to receive only the unpaid portion of the Salary then in
effect which has accrued to the date of termination and any other payments
generally available to departing employees of the Company (such as unused
vacation and personal days). The Employee shall not be entitled to receive any
severance payment with respect to such termination. For the purpose of this
Agreement, the term "AFFILIATE" means, with respect to the Company, any person
or entity which, directly or indirectly, controls, is controlled by or under
common control with the Company, with "CONTROL" to be based on the ownership of
50% or more of the voting securities (or their equivalent) of a particular
entity.
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(b) Termination By Reason of Permanent Disability. If at any time
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during the Term the Employee has been unable, as a result of physical or mental
illness or incapacity, to perform her duties hereunder for a period of four
consecutive months or for an aggregate of more than six months in any twelve
month period (a "PERMANENT DISABILITY"), the Employee's employment hereunder may
be terminated by the Board upon 30 days' written notice to the Employee. If the
Employee's employment is terminated by reason of Permanent Disability, the
Employee shall be entitled to receive only the unpaid portion of the Salary then
in effect which has accrued to the date of termination, plus any other payments
generally available to departing employees of the Company (such as unused
vacation and personal days), plus an amount equal to three months of Employee's
Salary. Such amount shall be paid within 30 days after such termination.
Notwithstanding the foregoing, if any Bonus Compensation is earned by the
Employee for the year in which such Permanent Disability occurs, Employee shall
be entitled to a pro rata portion of such Bonus Compensation based on the number
of days in the Company's fiscal year to which such Bonus Compensation relates
that have elapsed prior to Employees Permanent Disability.
(c) Termination By Reason of Death. The Employee's employment
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hereunder shall automatically terminate on the date of her death. If the
Employee's employment is so terminated by her death, the Company shall pay to
the Employee's estate the unpaid portion of the Salary then in effect through
date of Employee's death plus an amount equal to three months of Employee's
Salary, plus any other payments generally available to departing employees of
the Company (such as unused vacation and personal days). Such amount shall be
paid within 30 days after the date of her death if a personal representative has
been appointed by the end of such 30-day period or, if a personal representative
has not been appointed by the end of such 30-day period, promptly after a
personal representative has been appointed. Notwithstanding the foregoing, if
any Bonus Compensation is earned by the Employee for the year in which such
death occurs, Employee shall be entitled to a pro rata portion of such Bonus
Compensation based on the number of days in the Company's fiscal year to which
such Bonus Compensation relates that have elapsed prior to the date of
Employee's death.
(d) Other Terminations. Anything herein contained to the contrary
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notwithstanding, (i) the Board may terminate the Employee's employment hereunder
at any time for any reason without Cause; (ii) the Employee may terminate this
Agreement if her title is changed without her consent or if, without her
consent, her duties and responsibilities are materially reduced, in either case
if such change in title or reduction in duties or responsibilities is not cured
within 10 days after written notice from Employee to the Company and (iii) the
Employee may terminate this Agreement at any time prior to 30 days after written
notice from the Company that as a condition of continuing this Agreement the
Employee must relocate to an office more than 50 miles from the Company's
present office in Walnut Creek, California. If this Agreement is so terminated
by the Board pursuant to subclause (i) or is terminated by Employee
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pursuant to subclause (ii), the Employee shall be entitled to receive an amount
equal to six months of Employee's Salary. If this Agreement is so terminated by
the Employee pursuant to subclause (iii), the Employee shall be entitled to
receive an amount equal to three month's of Employee's salary. (The amount to
which Employee may become entitled is hereinafter referred to as the "SEVERANCE
AMOUNT".) The Severance Amount shall be in lieu of any other severance payment
to which Employee may be otherwise entitled under any other severance plan
maintained by the Company. The Severance Amount shall be paid in installments in
accordance with the Company's normal payroll practices as if the Employee were
still an employee of the Company. In addition, the Employee shall be entitled to
receive any other payments generally available to departing employees of the
Company (such as unused vacation and personal days, but not including payments
under any severance policy of the Company). Notwithstanding the foregoing, if
any Bonus Compensation is earned by the Employee for the year in which such
severance occurs, Employee shall be entitled to a pro rata portion of such Bonus
Compensation based on the number of days in the Company's fiscal year to which
such Bonus Compensation relates that have elapsed prior to the death of
Employee's termination. Anything herein to the contrary notwithstanding, the
Severance Amount shall be reduced by the amount, if any, of compensation earned
by Employee from any other employment performed by the Employee during the 6-
month period after the date of Employee's termination if Employee is terminated
pursuant to subclauses (i) or (ii) above and during the 3-month period after the
date of Employee's termination if Employee terminates this Agreement pursuant to
subclause (iii) above.
7. Covenants of the Employee.
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(a) Non-Competition. Until (X) the end of the six months of the date
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of the termination of the Employee's employment if Employee is terminated
pursuant to 6(d)(i) or (ii) above and (Y) the end of the third month of the date
of the termination of Employee's employment if Employee is terminated pursuant
to 6(d)(iii) above, and (Z) in the event the Employee is terminated for Cause,
the end of the then current Term in effect on the date of such termination, the
Employee shall not, directly or indirectly, engage in any business (a
"RESTRICTED BUSINESS") which manufactures or distributes a dental product line
similar to that of the Company's or be associated with any entity engaged in a
Restricted Business, whether as a director, officer, employee, agent,
consultant, partner, owner, independent contractor or otherwise. Employee's
covenants in subclauses (x) and (y) above are in consideration of payment of the
Severance Amount.
(b) Non-Solicitation of Employees of the Employer. Until the first
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anniversary of the date of the termination of the employment of the Employee
hereunder, the Employee shall not, and shall cause each business or entity with
which he shall become associated in any capacity not to, solicit for employment
or employ any person who is then, or
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who was at any time after the date four months prior to the date of such
termination, employed in a professional or managerial position by the Company,
its subsidiaries or Affiliates.
(c) Confidentiality. The Employee agrees and acknowledges that the
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Confidential Information (as hereinafter defined) of the Company and its
subsidiaries and affiliates, is valuable, special and unique to their business;
that such business depends on such Confidential Information; and that the
Company wishes to protect such Confidential Information by keeping it
confidential for the use and benefit of the Company and its subsidiaries and
Affiliates. Based on the foregoing, the Employee agrees to undertake the
following obligations with respect to such Confidential Information:
(i) the Employee agrees to keep any and all Confidential
Information in trust for the use and benefit of the Company and its
subsidiaries and Affiliates;
(ii) the Employee agrees that, except as required by applicable
law or as authorized in writing by the Board, he will not at any time
during or after the termination of her employment hereunder, disclose,
directly or indirectly, any Confidential Information of the Company or
any of its subsidiaries or Affiliates;
(iii) the Employee agrees to take all reasonable steps necessary,
or reasonably requested by the Company, to ensure that all
Confidential Information is kept confidential for the use and benefit
of the Company and its subsidiaries and Affiliates; and
(iv) the Employee agrees that, upon termination of her
employment hereunder or at any other time the Company may in writing
so request, he will promptly deliver to the Company all materials
constituting Confidential Information (including all copies thereof)
that are in her possession or under her control. The Employee further
agrees, that if requested by the Company, to return any Confidential
Information pursuant to this subparagraph (iv), he will not make or
retain any copy or extract from such materials.
For purposes of paragraph (c) of this Section 7, "CONFIDENTIAL
INFORMATION" means any and all information developed by or for the Company or
any of its subsidiaries or Affiliates of which the Employee gains or has
acquired knowledge during or prior to the Term by reason of her employment with
the Company that is (A) not generally known in any industry in which the Company
or any of its subsidiaries or Affiliates is or may become engaged or (B) not
publicly available. Confidential Information includes, but is not limited to,
any and all information developed by or for the Company or any of its
subsidiaries or Affiliates concerning plans, marketing and sales methods,
customer lists, materials, processes, business forms,
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procedures, devices, plans for development of products, services or expansion
into new areas or markets, internal operations, and any trade secrets and
proprietary information of any type owned by the Company or any of its
subsidiaries or Affiliates, together with all written, graphic and other
materials relating to all or any part of the same.
8. Notices. All notices and other communications hereunder shall be
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in writing and shall be deemed to have been given when delivered by hand, mailed
by first-class registered or certified mail, postage prepaid and return receipt
requested, or facsimilied or delivered by overnight courier addressed as
follows:
(i) If to the Company:
BriteSmile, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
Durham, Evans, Xxxxx & Xxxxxxx, P.C.
Key Bank Towers, Suite 850
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
and to:
Xxxxxxxx & X'Xxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
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(ii) If to the Employee:
Xxxxx Xxxxx
000 Xxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Telephone No.: 000-000-0000
or, in each case, at such other address as may from time to time be specified to
the other party in a notice similarly given.
9. Governing Law; Jurisdiction. The validity, interpretation,
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construction and performance of this Agreement shall be governed by the laws of
the Commonwealth of Pennsylvania applicable to contracts executed and to be
performed entirely within said State. Any judicial proceeding brought against
any of the parties to this Agreement or any dispute arising out of this
Agreement or any matter related hereto may be brought in the courts of the
Commonwealth of Pennsylvania or in the United States District Court for the
Eastern District of Pennsylvania and, by execution and delivery of this
Agreement, each of the parties to this Agreement accepts the jurisdiction of
said courts, and irrevocably agrees to be bound by any judgment rendered thereby
in connection with this Agreement. The foregoing consent to jurisdiction shall
not be deemed to confer rights on any person other than the respective parties
to this Agreement.
10. Expenses. If a dispute arises out of or related to this
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Agreement, if either party to the Agreement brings legal action to enforce the
terms of the Agreement, the party who prevails in such legal action, whether
plaintiff or defendant, in addition to the remedy or relief obtained in such
legal action, shall be entitled to recover her or its expenses incurred in such
legal action, including without limitation, court costs and attorneys fees. A
party shall be deemed to have prevailed in such a legal action if such action is
concluded pursuant to a court order or final judgment in favor of such party
which is not subject to appeal, a settlement agreement or dismissal of the
principal claims.
11. Entire Agreement. This Agreement contains the entire agreement
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of the parties and their Affiliates relating to the subject matter hereof and
supersedes all prior agreements, representations, warranties and understandings,
written or oral, with respect thereto.
12. Severability. If any term or provision of this Agreement or the
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application thereof to any person, property or circumstance shall to any extent
be invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons, property or circumstances other than those
as to which it is invalid or unenforceable, shall not be affected
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thereby, and each term and provision of this Agreement shall remain valid and
enforceable to the fullest extent permitted by law.
13. Remedies.
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(a) Injunctive Relief. The Employee acknowledges and agrees
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that the covenants and obligations of the Employee contained in subsections (a),
(b) and (c) of Section 7 hereof relate to special, unique and extraordinary
matters and are reasonable and necessary to protect the legitimate interests of
the Company and its subsidiaries and Affiliates and that a breach of any of the
terms of such covenants and obligations will cause the Company irreparable
injury for which adequate remedies at law are not available. Therefore the
Employee agrees that the Company shall be entitled to an injunction, restraining
order, or other equitable relief from any court of competent jurisdiction,
restraining the Employee from any such breach.
(b) Remedies Cumulative. The Company's rights and remedies
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under this Section 15 are cumulative and are in addition to any other rights and
remedies the Company may have at law or in equity.
14. Withholding Taxes. The Company may deduct any federal, state or
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local withholding or other taxes from any payments to be made by the Company
hereunder in such amounts which the Company reasonably determine are required to
deduct under applicable law.
15. Amendments, Miscellaneous, Etc. Neither this Agreement nor any
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term hereof may be changed, waived, discharged or terminated except by an
instrument in writing signed by the party against which such change, waiver,
discharge or termination is sought to be enforced. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
and all of which together shall constitute one and the same instrument. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
16. Survival. The covenants set forth in Section 7 of this Agreement
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shall survive and shall continue to be binding upon the parties notwithstanding
the termination of this Agreement for any reason whatsoever. The covenants set
forth in Section 7 of this Agreement shall be deemed and construed as separate
agreements independent of any other provision of this Agreement. The existence
of any claim or cause of action by the Employee against Company, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by Company of any or all covenants.
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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first written above.
BRITESMILE, INC.
By /s/ Britesmile Inc.
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Name:
Title:
/s/ Xxxxx Xxxxx
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XXXXX XXXXX
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