EMPLOYMENT AGREEMENT
Exhibit
99.2
THIS
EMPLOYMENT AGREEMENT
(the
“Agreement”)
dated
as of March 1st
2005 and
is made between Xx. Xxxx Xxxxxxxxx (the “Executive”)
and
HaptoGuard Inc. (the “Company”).WHEREAS,
the
Company desires to employ the Executive as its President and Chief Executive
Officer; andWHEREAS,
the
Executive desires to accept such employment for the term and upon the other
conditions hereinafter set forth;NOW,
THEREFORE,
in
consideration of the agreements and covenants contained herein, the Executive
and the Company hereby agree as follows:
ARTICLE
I
Employment
Section
1.1 Commencement
Date; At-Will Employment
Executive’s
employment by the Company shall commence (the “Effective
Date”)
upon
the closing of the Company’s private placement.
On
the
Effective Date, the Consulting Agreement dated July 1st,
2004
between Health Quality Solutions and the Company for services rendered solely
and exclusively through the Executive (the “Consulting
Agreement”)
shall
be cancelled and become null and void.
Executive’s
employment by the Company shall be At-Will and not for any specified period
and
may terminated at any time, with or without cause by either Executive or
Company, as set forth in Article III hereof. Section
1.2 Position.
The
Company shall employ the Executive in a full time position as its President
and
CEO during the term of this Employment Agreement.
Section 1.3 Duties.
The
Executive shall have such responsibilities and authorities are customarily
exercisable by the Presidents and CEOs of United States biotech corporations.
The Executive shall also perform such other executive and administrative duties
as the Executive may reasonably be expected to be capable of performing on
behalf of the Company as may from time to time be authorized or directed by
the
Company’s Board of Directors. The Executive shall perform faithfully the duties
assigned to him hereunder to the best of his abilities and devote his full
business time and attention to the transaction of the Company's
business.
ARTICLE
II
Compensation
Section
2.1 Salary
Base.
As
compensation for the Executive's services hereunder, the Company shall pay
to
the Executive an annual salary of US$240,000,
payable
in equal bi-weekly installments (the Executive's
Salary).
The
Executive's Basic Compensation shall be reviewed by the Board on or prior to
each yearly anniversary date of the Effective Date and the Board shall negotiate
the Executive's Basic Compensation based upon the performance of the Company
and
the Executive.
The
right
of the Executive to receive compensation hereunder (including the compensation
pursuant to sections 2.2 and 2.3 below) is subject to all federal, state and
local withholding taxes and social security taxes.
Section
2.2 Incentive
Compensation.
The
Executive shall be entitled to bonuses as follows (“Bonus”):
(a)
As of
the first anniversary of the Effective Date, the Executive will also be granted
an annual cash bonus of up to 30% of the Executive’s Salary for that year based
on meeting certain milestones and/or objectives. The annual milestones as well
as the specific percentage of the total bonus each specific milestone will
represent shall be established by the Board of Directors within sixty (60)
days
after the first anniversary of the Effective Date, and thereafter within sixty
(60) days of the beginning of the applicable year.
(b) Subject
to the approval by the Board of Directors, the Company shall grant the Executive
an option to purchase common stocks of the Company at an aggregate amount,
exercise price as shall be determined by the Board of Directors on at least
an
annual basis. The vesting shall be monthly over a period of 3 years. All the
terms and conditions of the aforesaid options shall be determined by the Board
of Directors of the Company and shall be set forth in an Option Agreement to
be
signed between the Company and the Executive. Such Option Agreement shall be
governed by and shall reflect the provisions of the Company's 2005 Employee,
Director and Consultant Stock Plan.
Section
2.3 Other
Benefits.
(a) During
the term of this Agreement, the Executive shall have the right to participate
in
any and all of the Company's programs for the benefit of employees at a senior
executive level.
(b) The
Executive shall be entitled to participate in medical, hospital, group life
insurance and other fringe benefits programs from time to time generally made
available to the Company’s senior executives.
(c) The
Company shall provide the Executive 21 paid vacation days per year in addition
to the paid holidays granted to other employees of the Company.
(d)
The
Company shall reimburse the Executive for travel or other expenses or
disbursements reasonably incurred or made by him in connection with the
Company's business during the term of this Agreement against
invoices.
(e)
The
Company shall provide the Executive with car allowance in the amount of $1,000
per month.
The
incentive compensation and benefits set forth in Section 2.2 and 2.3 shall
be
collectively referred to as the “Benefits.”
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ARTICLE
II
Termination
of Employment
Section
3.1 Termination
of Employment by Company.
(a) Except
as
otherwise provided in this Article III, upon the occurrence of any of the
following events, this Agreement and the rights and obligations of the parties
hereunder shall immediately terminate as hereinafter provided:
|
(i)
|
The
“Disability” (as defined in Section 3.4(a)) of the Executive;
and
|
|
(ii)
|
Conduct
by the Executive constituting “Cause” (as defined in Section
3.4(b)).
|
(b)
In
the
case of termination pursuant to Section 3.1(a)(i), the Company shall be
obligated to pay the Executive and the Executive shall be entitled to receive
his Salary and Benefits for the period commencing on the date of termination
and
ending on the date that is twelve (12) months thereafter, to the extent not
paid
by disability insurance proceeds. In addition, the monthly vesting of the
options shall continue for additional twelve months from the termination date.
The Executive’s Salary and Benefits shall be paid in equal monthly installments
during such twelve-month period.
(c) In
the
case of termination pursuant to Section 3.1(a)(ii), the Company shall only
be
obligated to pay the Executive and the Executive shall be entitled to receive
the accrued and unpaid Salary and Benefits through the date of such termination.
All unvested options on the termination date shall be cancelled.
(d) Termination
of the Executive by the Company other than pursuant to Section 3.1(a)(i),
3.1(a)(ii) or Section 3.2, may be effected by a majority vote of the Board
of
Directors. In the event of such termination, the Company shall be obligated
to
pay the Executive and the Executive shall be entitled to receive the Executive's
Salary and Benefits for a period of twelve (12) months after the termination
date, which date shall be determined by the majority vote of the Board of
Directors. In addition, the monthly vesting of the options shall continue for
additional twelve months from the termination date. The Executive's Salary
and
Benefits shall be paid in equal monthly installments during such twelve-month
period.
Section
3.2
Death.
In
the
event of the death of the Executive during the term of this Agreement, this
Agreement shall terminate on the date of death and the Executive's designated
beneficiary or, if none, his estate shall be entitled to receive (i) any accrued
and unpaid Executive's Salary and Benefits through such date of death and (ii)
continued monthly vesting of the options for twelve months following the date
of
death.
Section
3.3
Termination of Employment by the Executive.
(a) In
the
event that during this Agreement there should occur any of the following events
(each of the following being an event giving the Executive the right to resign
for “Good
Reason”):
(i)
a
change in the title and/or responsibilities of the Executive, such that the
Executive is no longer the Chief Executive Officer of the Company and no longer
has such responsibilities and authorities as are customarily exercisable by
the
Chief Executive Officer of a US biotech corporation, (ii)
a
failure of the Company to provide the Executive with the Executive's Salary
or
Benefits or (iii) relocation of the Executive’s primary office to a location; or
the requirement of the Executive to perform a majority of his duties at any
location to which the commute time exceeds one hour and fifteen minutes; the
Executive may elect to terminate this Agreement by written notice to the
Company. In the event the Executive exercises such election, this Agreement
shall terminate effective upon the receipt of such notice by the Company.
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(b) If
the
Executive exercises his election to terminate this Agreement pursuant to Section
3.3(a)(i) or 3.3(a)(ii), the Company shall be obligated to pay the Executive
and
the Executive shall be entitled to receive the Executive's Salary and Benefits
for a period of twelve (12) months after the termination date, which date shall
be determined by the majority vote of the Board of Directors. In addition,
the
monthly vesting of the options shall continue for additional twelve (12) months
from such termination date. If the Executive exercises his election to terminate
this Agreement pursuant to Section 3.3(a)(iii), the Company shall be obligated
to pay the Executive and the Executive shall be entitled to receive the
Executive's Salary and Benefits for a period of six (6) months after the
termination date, which date shall be determined by the majority vote of the
Board of Directors and in addition, the monthly vesting of the options shall
continue for additional six (6)months from such termination date. The
Executive's Salary and Benefits shall be paid in equal monthly installments
during such twelve-month period
(c) If
the
Executive terminates this Employment Agreement for any reason other than those
contained in Section 3.2 and Section 3.3(a) this Agreement shall terminate
immediately except that the Executive shall be entitled to receive the accrued
and unpaid Executive's Salary and Benefits through the date of such termination.
Section
3.4
Definitions of Certain Terms.
(a)
“Disability”
shall
mean any physical or mental condition of the Executive that renders the
Executive incapable of performing any substantial portion of the services
contemplated hereby (as confirmed by competent medical evidence) and that has
continued for an aggregate of at least 180 days in any one year period where
as
a result of such disability, the Board has determined that it must permanently
replace the Executive.
(b) The
following shall constitute conduct entitling the Company to terminate the
Executive's employment for “Cause”:
(i)
the Executive's malfeasance that is not cured within 30 days of written notice
thereof from the Board; (ii) the conviction of the Executive of any felony
or
any crime involving moral turpitude (or the equivalent thereof under the laws
of
any state); (iii) blatant refusal to abide by reasonable directives of the
Board
of Directors not cured within 30 days of written notice thereof from the Board;
(iv) material breach of this Agreement; (v) serious breach of trust including
theft, embezzlement, self-dealing, prohibited disclosure to unauthorized persons
or entity of confidential or proprietary information of the Company; (vi) any
gross negligence or bad-faith conduct of the Executive resulting material loss
to the Company or (vii) violation of securities law.
Section
3.5 Effect
of Termination.
Executive
undertakes that immediately upon the termination of the employment with the
Company, for any reason, to act as follows: (a) deliver and/or return to the
Company, all the documents, CDs, diskettes or other magnetic media, letters,
notes, reports, business cards and other papers in Executive’s possession and
relating to his employment with the Company, as well as any equipment and/or
other property belonging to the Company which was placed at Executive’s
disposal; and (b) delete any information relating to the Company or its business
from Executive’s personal computer; and (c) coordinate with the Company the
orderly handing over of Executive’s position according to the timetable
determined by the Company, and Executive shall hand over in any orderly fashion
and in coordination with the Company his position, the documents and all the
other matters dealt with by Executive to whomever the Company instructs.
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ARTICLE
IV
Representations
and Warranties
The
Executive represents and warrants that:
(a)There
are
no undertakings or agreements preventing him from committing in accordance
with
this Agreement and performing its obligations hereunder.
(b)This
Agreement is valid and binding upon him, and enforceable against him, in
accordance with its terms.
(c)His
execution and performance of this Agreement will not result in the violation
of
any provision of applicable law or any judgment or decree binding upon
him.
(d)He
is not
currently, nor will he, by entering into this Agreement, be deemed to be
violating any rights of or breaching any obligations toward his former
employer.
(e)He
shall
inform the Company, immediately upon becoming aware, of any matter in which
he
or his immediate family has a personal interest and which might give rise to
a
conflict of interest with his duties under this Agreement.
ARTICLE
V
Non-Competition;
Confidential Information; and Intellectual Property
Section
5.1 Non-Competition.
(a) Subject
to Sections 5.1(b) and 5.1(c), during the term of this Agreement, during the
period in which the Executive is entitle for severance payment under Article
III
and for one year thereafter, the Executive shall not engage in any activities,
whether as employer, proprietor, partner, stockholder (other than as the holder
of less than 5% of the stock of a corporation listed on a national securities
exchange or in the National Association of Securities Dealers, Inc. Automated
Quotation System (such a corporation being hereinafter referred to as a
“Public
Corporation”)),
director, employee, consultant or otherwise that compete with the Company.
(b) The
Executive shall not be deemed to be in breach of this Section 5.1 because (i)
a
public corporation of which he owns more than 5% of the outstanding capital
stock begins to engage in any such prohibited activities, provided Executive
is
not employed by such public corporation or (ii) his ownership interest in a
public corporation engaged in such activities increases to more than 5% of
such
public corporation's issued and outstanding capital stock, in either case
without any volitional act on the part of the Executive, if within 60 days
of
learning of such event, the Executive disposes of the amount of capital stock
necessary to cause his ownership to be less than 5% of the amount of such
capital stock issued and outstanding.
(c) In
the
event of termination of this Agreement pursuant to Section 3.1(d) (i.e.
termination by majority vote of the board) this Non Competition obligation
shall
continue until the date of the last payment of severance pursuant to Article
III.
5
Section
5.2 Confidential
Information
(a) Executive
understands that the Company and its affiliates possess Proprietary Information
(as defined below) which is important to its business and that this Agreement
creates a relationship of confidence and trust between Executive and the Company
and its subsidiaries and affiliates with regard to Proprietary
Information.
(b) For
purposes of this Agreement, "Proprietary
Information"
is
information that was or will be developed, created, or discovered by or on
behalf of the Company and its subsidiaries and affiliates and predecessors,
or
is developed, created or discovered by Executive while performing the services
under this Agreement, or which became or will become known by, or was or is
conveyed to him which has commercial value in the Company's and its subsidiaries
and affiliates' business. "Proprietary Information" includes, but is not limited
to, trade secrets, ideas, techniques, business, product, or development plans,
customer information, and any other information concerning the Company's, its
subsidiaries and affiliates' actual or anticipated business, development,
personnel information, or which is received in confidence by or for the Company
and its affiliates from any other person.
(c) At
all
times, both during the term of this Agreement and after its termination,
Executive will keep in confidence and trust, and will not use or disclose to
any
third party, any Proprietary Information without the prior written consent
of
the Board of Directors.
(d)
Executive
understands that the Company and its affiliates possess or will possess "Company
Documents" which are important to its business. For purposes of this Agreement,
"Company
Documents"
are
documents or other media that contain or embody Proprietary Information or
any
other information concerning the business, operations or plans of the Company
and its affiliates, whether such documents have been prepared by Executive
or by
others. "Company Documents" include, but are not limited to, blueprints,
drawings, photographs, charts, graphs, notebooks, customer lists, computer
disks, personnel files, tapes or printouts and other printed, typewritten or
handwritten documents. All Company Documents are and shall remain the sole
property of the Company. Executive agrees not to remove any Company Documents
from the business premises of the Company or deliver any Company Documents
to
any person or entity outside the Company, except as required to do in connection
with performance of the services under this Agreement. Executive further agrees
that, immediately upon the Company's request and in any event upon completion
of
Executive's services, Executive shall deliver to the Company all Company
Documents, apparatus, equipment and other physical property or any reproduction
of such property
Section
5.3 Intellectual
Property
(a) The
Executive will promptly disclose and describe to the Company all inventions
which he may solely or jointly conceive, develop, or reduce to practice during
the period of his employment with the Company (i) which relate to the Company
business or to actual or demonstrably anticipated research or development
undertaken by the Company, (ii) which are developed in whole or in part on
Company time or with the use of any of the Company’s equipment, supplies,
facilities or trade secret information, (iii) which result directly or
indirectly from Executive employment with the Company. Executive agrees to
assign and does hereby assign to the Company or its designee(s) all of its
rights, titles and interests worldwide in such inventions and in all
intellectual property rights based upon such inventions.
(b) The
Executive will, at the Company expense, assist in preparation and registration
of patents and all other intellectual property in favor of the Company in any
jurisdiction deemed appropriate by the Company. Such assistance shall include,
without limitation, the preparation of documents, drawings and other data and
execution of assignments, applications and other forms. The Executive agrees
to
perform this obligation during and after the term of this
Agreement.
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ARTICLE
V
Miscellaneous
Section
6.1 Survival
The
provisions of this Agreement regarding confidentiality, non-compete,
intellectual property and all others that by their sense and context are
intended to survive the termination of this Agreement shall survive and continue
in effect.Section
6.2 Notices.
Any
notice or request required or permitted to be given hereunder shall be
sufficient if in writing and delivered personally or sent by registered mail,
return receipt requested, to the addresses set forth below or to any other
address designated by either party by notice similarly given. Such notice shall
be deemed to have been given upon the personal delivery thereof or three days
after the date of such mailing thereof, as the case may be.
If
to the
Executive, to:
00
Xxxxxxx Xxxxxx
Xxx
Xxxxxxxx, XX 00000
If
to the
Company, to:
HaptoGuard
C/O
Xxxxx
Xxxxx Zedek
Xxxxxx,
LLP
00
Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxx
Xxxx,
XX 00000
Section
6.3 Assignment
and Succession.
The
Executive acknowledges that the services to be rendered by him hereunder are
unique and personal. Accordingly, the Executive may not assign any of his rights
or delegate any of his duties or obligations under this Employment Agreement.
The rights and obligations of the Company under this Agreement shall inure
to
the benefit of and be binding upon its successors and assigns.
Section
6.4 Headings.
The
Article and Section headings contained herein are for convenience of reference
only and shall not define or limit the provisions hereof.
Section
6.5 Arbitration.
Any
controversy or claim arising out of, or relating to, this Agreement or the
breach hereof, shall be settled by arbitration in New York in accordance with
the rules then pertaining of the American Arbitration Association, and judgment
upon any award rendered by the arbitrator or arbitrators may be entered in
any
court having jurisdiction thereof. Arbitration shall be heard by a single
arbitrator who shall be agreed upon by the parties or, barring such agreement,
who shall be selected by the chairman of the New York section of the American
Arbitration Association. The parties agree that such arbitration shall commence
not later than 30 days after the request of a party hereto for such arbitration,
and that the proceedings of the arbitration shall be concluded not less than
30
days after commencing. Each party shall abide by such schedule, and it shall
be
a condition for the approval of the arbitrator that he agrees to abide by such
schedule.
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Section
6.6 Entire
Agreement; Amendments.
This
Agreement contains the entire understanding of the parties hereto with regard
to
the subject matter contained herein, and supersedes all prior agreements,
understandings or intents between the parties hereto or any related parties,
including the Consulting Agreement. This Agreement may be amended, modified
or
supplemented only by a writing signed by both parties hereto.
Section
6.7 Waivers.
Any
term
or provisions of this Agreement may be waived or the time for its performance
may be extended by the party or parties entitled to the benefits thereof but
only to the extent evidenced by a writing executed by such party. The failure
of
any party hereto to enforce at any time any provision of this Employment
Agreement shall not be construed to be a waiver of such provision, nor in any
way to affect the validity of this Employment Agreement or any part hereof
or
the right of any party thereafter to enforce each and every such provision.
No
waiver of any breach of this Employment Agreement shall be held to constitute
a
waiver of any other or subsequent breach.
Section
6.8 Execution
of Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
considered an original instrument, but all of which shall be considered one
and
the same agreement, and shall become binding when one or more counterparts
have
been signed by each of the parties and delivered to each of the
xxxxxxx.XX
WITNESS WHEREOF,
the
Company has caused this Agreement to be signed by its duly authorized officer
and the Executive has signed this Agreement as of the Effective
Date.
HaptoGuard
Inc.
By:____________________
Name:
Xxxx Xxxxxx
Title:
Director
_______________________
Xxxx
Xxxxxxxxx
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