EMPLOYMENT AGREEMENT
EXHIBIT
10.5
THIS
EMPLOYMENT AGREEMENT (this “Agreement”)
is
made, entered into and effective as of November 1, 2006 (the “Effective
Date”),
between KREIDO
LABORATORIES
(the
“Company”),
and
XXXX
XXXXXXX, Ph.D.,
an
individual (the “Executive”).
WHEREAS,
the Company and the Executive wish to memorialize the terms and conditions
of
the Executive’s employment by the Company in the positions of President and
Chief Executive Officer;
NOW,
THEREFORE, in consideration of the covenants and promises contained herein,
the
Company and the Executive agree as follows:
1. Employment
Period.
The
Company offers to employ the Executive, and the Executive agrees to be employed
by Company, on an "at will" basis, in accordance with the terms and subject
to
the conditions of this Agreement, commencing on the Effective Date and
terminating on the first (1st)
anniversary of the Effective Date (the “Scheduled
Termination Date”),
unless terminated in accordance with the provisions of Section
12
below,
in which case the provisions of Section
12
shall
control; provided,
however,
that
unless either party provides the other party with written notice of his or
its
intention not to renew this Agreement at least 90 days prior to the expiration
of the initial term or any renewal term of this Agreement (as the case may
be),
this Agreement shall automatically renew for additional one-year periods
commencing on the day after such expiration date. The Executive affirms that
no
obligation exists between the Executive and any other entity which would prevent
or impede the Executive’s immediate and full performance of every obligation of
this Agreement. The Company may terminate this Agreement, anything to the
contrary notwithstanding, without any further compensation due to the Executive
in the event that the Company does not close a financing of at least
TWENTY-FIVE
MILLION DOLLARS ($25,000,000)
prior to
January 15, 2007.
2. Position
and Duties.
During
the term of the Executive’s employment hereunder, the Executive shall continue
to serve in, and assume duties and responsibilities consistent with, the
positions of President and Chief Executive Officer, unless and until otherwise
instructed by the Company. The Executive agrees to devote to the Company
substantially all of his working time, skill, energy and best business efforts
during the term of his employment with the Company, and the Executive shall
not
engage in business activities outside the scope of his employment with the
Company if such activities would detract from or interfere with his ability
to
fulfill his responsibilities and duties under this Agreement or require
substantial amounts of his time or of his services, or which would constitute
a
conflict of interest by the Executive.
3. No
Conflicts.
The
Executive covenants and agrees that for so long as he is employed by the
Company, he shall inform the Company of each and every future business
opportunity presented to the Executive that arises within the scope of the
Business of the Company (as defined below) and would be feasible for the
Company, and that he will not, directly or indirectly, exploit any such
opportunity for his own account.
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4. Hours
of Work.
The
Executive’s normal days and hours of work shall coincide with the Company’s
regular business hours. The nature of the Executive’s employment with the
Company requires flexibility in the days and hours that the Executive must
work,
and may necessitate that the Executive work on other or additional days and
hours.
5. Location.
The
locus
of the Executive’s employment with the Company shall be primarily at the
Company’s office located in Camarillo, California.
6. Compensation.
(a) Base
Salary.
During
the term of this Agreement, the Company shall pay, and the Executive agrees
to
accept, in consideration for the Executive’s services hereunder, an annual
salary of TWO
HUNDRED THOUSAND
DOLLARS ($200,000),
less
all applicable taxes and other appropriate deductions, payable in accordance
with the Company's policy for salaried employees.
The
Compensation Committee (as defined below)
of the
Board shall also review the Executive’s base salary annually and shall make a
recommendation to the Board as to whether such base salary should be adjusted
upward, which decision shall be within the Board’s sole discretion.
(b) Annual
Bonus.
The
Executive shall be entitled to an initial bonus of up to ONE
HUNDRED AND FIFTY
THOUSAND DOLLARS ($150,000)
for the
period from the Effective Date through December 31, 2007, the actual amount
of
the bonus shall be determined according to achievement of performance-related
financial and operating targets established quarterly for the Company and the
Executive by the Compensation Committee. The
Compensation Committee will establish four (4) quarterly performance plans
for
the Employee. Each plan will contain financial and operating objectives (the
"Quarterly
Performance Targets"),
the
achievement of which will determine the amount of bonus paid during that
quarter. The initial performance objective shall be the completion of an equity
financing of the Company or its parent Company, which is expected to close
concurrently with the proposed merger transaction (the “Merger”)
referred to in Section 17, for which a bonus of THIRTY SEVEN THOUSAND
FIVE HUNDRED DOLLARS ($37,500) will be paid upon the closing date of the equity
financing and the Merger. The remaining three (3) Quarterly Performance Targets
will be set by the Compensation Committee of the board of directors of the
Company or its parent Company (the “Compensation Committee”) not later than
January 12, 2007. The remaining payments, if the Executive meets Quarterly
Performance Targets, are scheduled for April 1, 2007, July 1, 2007 and November
1, 2007. Quarterly
Performance related financial and operational targets
for
Q4:2007 - Q3:2008 shall be adopted by the Compensation Committee promptly after
the end of Q3:2007, but in no event later than October 12, 2007).
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7. Expenses.
During
the term of this Agreement, the Executive shall be entitled to payment or
reimbursement of any reasonable expenses paid or incurred by him in connection
with and related to the performance of his duties and responsibilities hereunder
for the Company. All requests by the Executive for payment or
reimbursement of such expenses shall be supported by appropriate invoices,
vouchers, receipts or such other supporting documentation in such form and
containing such information as the Company may from time to time require,
evidencing that the Executive, in fact, incurred or paid said expenses.
8. Vacation.
During
the term of this Agreement, the Executive shall be entitled to accrue, on a
pro
rata basis,
twenty (20) vacation days, per year. The Executive shall be entitled to carry
over any accrued, unused vacation days from year to year as provided by current
Company policy.
9. Lock-Up
Agreement.
The
Executive shall enter into a Lock-Up Agreement with the Company in the form
attached hereto as Exhibit
B.
During
any period that the Executive is precluded by the Lock-Up Agreement from
exercising the Option granted to the Executive under Section 10, then the
exercise period in Section 10(d) will be extended by the amount of time
during which the Executive could not exercise the Option.
10. Stock
Options.
The
Company hereby agrees to use commercially reasonable efforts to cause Kreido
Biofuels, Inc., a Nevada corporation (the “PubCo”) to grant the Executive
a
non-qualified stock option under the PubCo's equity incentive plan on the terms
and conditions hereinafter stated. When so granted, the following terms and
conditions will be incorporated into a separate stock option agreement (the
“PubCo Stock Option Agreement”), dated the date of the grant, between the
Executive and the PubCo. In the event of any inconsistency between the PubCo
Stock Option Agreement and this Agreement, the terms of the PubCo Stock Option
Agreement shall prevail.
(a) Grant
of Option.
On the
effective date of the Merger, the Company will grant
the
Executive an option to purchase an aggregate of ONE
MILLION TWO HUNDRED AND FIVE THOUSAND THREE HUNDRED AND EIGHTY FOUR
(1,205,384)
shares
of the
Company’s common voting stock (the “Option”)
under
the PubCo’s 2006 Stock Option Plan (the “Stock
Option Plan”).
In
subsequent years the Executive shall be eligible for such grants of options
and
other permissible awards (collectively with such options, the “Awards”)
under
the Stock Option Plan as the Compensation Committee of the board of directors
of
PubCo shall determine.
(b) Option
Price; Term.
The
per
share
exercise price of the Option shall be ONE
AND 35/100THS DOLLARS ($1.35),
which
represents the anticipated fair market value per share of Company common voting
stock on the closing date of the Merger. The term of the Option shall be ten
(10) years from the date of grant.
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(c) Vesting
and Exercise.
The
Option shall be vested and exercisable in eight (8) quarterly installments
of
ONE HUNDRED
FIFTY THOUSAND SIX HUNDRED AND SEVENTY THREE (150,673)
shares
each.
(d) Termination
of Service; Accelerated Vesting.
(i) If
the
Executive’s employment is terminated for Cause, as such term is defined below,
all Awards, whether or not vested, shall immediately expire effective the date
of termination of employment.
(ii) If
the
Executive’s employment is terminated voluntarily by the Executive without Good
Reason, as such term is defined below, all unvested Awards shall immediately
expire effective the date of termination of employment. Vested Awards, to the
extent unexercised, shall expire on the later of ninety (90) days after the
termination of employment and the expiration of the contractual lock-up
agreement.
(iii) If
the
Executive’s employment terminates on account of death or Disability, as defined
below, all unvested Awards shall immediately expire effective the date of
termination of employment. Vested Awards, to the extent unexercised, shall
expire one (1) year after the termination of employment.
(iv) If
the
Executive’s employment is terminated (A) in connection with a Change of Control,
as defined below, (B) by the Company without Cause or (C) by the Executive
for
Good Reason, one-half (1/2) of all unvested Awards shall immediately vest up
to
a maximum of six (6) months, and become exercisable effective the date of
termination of employment, and, to the extent unexercised, shall expire one
(1)
year from the date of termination of employment.
(e) Payment.
The full
consideration for any shares purchased by the Executive upon exercise of the
Option shall be paid in cash.
11. Other
Benefits.
(a) During
the term of this Agreement, the Executive shall be eligible to participate
in
incentive, savings, retirement (401(k)), and welfare benefit plans, including,
without limitation, health, medical, dental, vision, life (including accidental
death and dismemberment) and disability insurance plans (collectively,
“Benefit
Plans”),
in
substantially the same manner, including but not limited to responsibility
for
the cost thereof, and at substantially the same levels, as the Company makes
such opportunities available to all of the Company’s managerial or salaried
executive employees.
(b) The
Executive’s spouse and dependent minor children will be covered under the
Benefit Plans providing health, medical, dental, and vision benefits, in
substantially the same manner, including but not limited to responsibility
for
the cost thereof, and at substantially the same levels, as the Company makes
such opportunities available to the spouses and dependent minor children to
all
of the Company’s managerial or salaried executive employees.
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(c) The
Company shall purchase and maintain traditional directors and officers liability
insurance coverage in the amount of at least ONE
MILLION DOLLARS ($1,000,000)
covering
the Company’s officers and directors, including the Executive, as soon as
practicable after the Effective Date, but in no event later than 30 days
following the Effective Date, provided such coverage is available on
commercially reasonable terms.
(d)
Until
such time as the Executive becomes covered by Company medical coverage, the
Company shall pay the cost of COBRA coverage provided by the Executive’s prior
employer, to the same extent as such coverage was paid for by such prior
employer.
12. Termination
of Employment.
(a) Death.
In the
event that during the term of this Agreement the Executive dies, this Agreement
and the Executive’s employment with the Company shall automatically terminate
and the Company shall have no further obligations or liability to the Executive
or his heirs, administrators or executors with respect to compensation and
benefits accruing thereafter, except for the obligation to pay the Executor’s
heirs, administrators or executors any earned but unpaid base salary, unpaid
pro
rata
annual
bonus and unused vacation days accrued through the date of death; provided,
that
nothing contained in this paragraph shall be deemed to excuse any breach by
the
Company of any provision of this Agreement. The Company shall deduct, from
all
payments made hereunder, all applicable taxes, including income tax, FICA and
FUTA, and other appropriate deductions.
(b) “Disability.”
In the
event of the Executive's disability for a period of 120 consecutive days during
any 365-day period, the Company shall thereafter have the right, upon written
notice to the Executive, to terminate this Agreement, in which case the date
of
termination shall be the date of such written notice to the Executive. As used
herein, "disability" shall mean a physical and/or mental disability of the
Executive that prevents the Executive from substantially performing the
essential functions of his position even with reasonable accommodation. In
the
event of termination under this Section, all the Executive's compensation and
benefits shall cease as of the date of his termination, and the Executive will
not be entitled to receive any Severance.
(c) “Cause.”
(i) At
any
time during the term of this Agreement, the Company may terminate this Agreement
and the Executive’s employment hereunder for “Cause.” For purposes of this
Agreement, “Cause”
shall
be defined as the occurrence of: (A) gross neglect, malfeasance or gross
insubordination in performing the Executive’s duties under this Agreement; (B)
the Executive’s conviction for a felony, excluding convictions associated with
traffic violations; (C) an egregious act of dishonesty (including without
limitation theft or embezzlement) or a malicious action by the Executive toward
the Company’s customers or employees; or (D) a willful and material violation of
any provision of Section
13
or
Section
14
hereof.
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(ii) Upon
termination of this Agreement for Cause, the Company shall have no further
obligations or liability to the Executive or his heirs, administrators or
executors with respect to compensation and benefits thereafter, except for
the
obligation to pay the Executive any earned but unpaid base salary, any earned
but unpaid portion of Executive's annual bonus and unused vacation days accrued
through the Executive’s last day of employment with the Company. The Company
shall deduct, from all payments made hereunder, all applicable taxes, including
income tax, FICA and FUTA, and other appropriate deductions. However, 12 (c)(ii)
not withstanding, with respect to "Cause" as defined in 12 (c)(i)(D) of the
Employment Agreement, the Company must provide notification in writing of the
breach and the Employee shall have the right to cure the breach to the
satisfaction of the Company within 30 days of the written notice.
(d) Change
of Control.
For
purposes of this Agreement, “Change
of Control”
means
the occurrence of, or the Company’s Board votes to approve: (A) any
consolidation or merger of the Company pursuant to which the stockholders of
the
Company immediately before the transaction do not retain immediately after
the
transaction, in substantially the same proportions as their ownership of shares
of the Company’s
voting
stock immediately before the transaction, direct or indirect beneficial
ownership of more than 50% of the total combined voting power of the outstanding
voting securities of the surviving business entity; (B) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company other
than any sale, lease, exchange or other transfer to any company where the
Company owns, directly or indirectly, 100% of the outstanding voting securities
of such company after any such transfer; (C) the direct or indirect sale or
exchange in a single or series of related transactions by the stockholders
of
the Company of more than 50% of the voting stock of the Company.
(e) “Good
Reason.”
(i) At
any
time during the term of this Agreement, subject to the conditions set forth
in
Section
12(e)(ii)
below,
the Executive may terminate this Agreement and the Executive’s employment with
the Company for “Good Reason.” For purposes of this Agreement, “Good
Reason”
shall
mean the occurrence of any of the following events: (A) the assignment, without
the Executive’s consent, to the Executive of duties that are significantly
different from, and that result in a substantial diminution of, the duties
that
he assumed on the Effective Date; (B) the assignment, without the Executive’s
consent, to the Executive of a title that is different from and subordinate
to
the title specified in Section
2
above,
provided,
however,
that
the retention of another executive as President and Chief Executive Officer
shall not, in and of itself, entitle the Executive to claim a termination for
Good reason hereunder; (C) any termination of the Executive’s employment by the
Company, other than a termination for Cause, within 12 months after a Change
of
Control; (D) the assignment, without the Executive’s consent, to the Executive
of duties that are significantly different from, and that result in a
substantial diminution of, the duties that he assumed on the Effective Date
within 12 months after a Change of Control; or (E) material breach by the
Company of this Agreement.
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(ii) The
Executive shall not be entitled to terminate his employment with the Company
and
this Agreement for Good Reason unless and until he shall have delivered written
notice to the Company of his intention to terminate this Agreement and his
employment with the Company for Good Reason, which notice specifies in
reasonable detail the circumstances claimed to provide the basis for such
termination for Good Reason, and the Company shall not have eliminated the
circumstances constituting Good Reason within 30 days of its receipt from the
Executive of such written notice.
(iii) In
the
event that the Executive terminates this Agreement and his employment with
the
Company for Good Reason, the Company shall pay or provide to the Executive
(or,
following his death, to the Executive’s heirs, administrators or executors): (A)
any earned but unpaid base salary, any earned but unpaid portion of Executive's
bonus, and previously granted and unused vacation days accrued through the
Executive’s last day of employment with the Company; (B) as severance pay, the
Executive’s full base salary for a period of six (6) months; and (C) continued
coverage, at the Company’s expense, under all Benefits Plans in which the
Executive was a participant immediately prior to his last date of employment
with the Company, or, in the event that any such Benefit Plans do not permit
coverage of the Executive following his last date of employment with the
Company, under benefit plans that provide no less coverage than such Benefit
Plans, through the Scheduled Termination Date. Except for severance which will
be payable monthly, all payments due hereunder shall be made within 45 days
after the date of termination of the Executive’s employment. The Company shall
deduct, from all payments made hereunder, all applicable taxes, including income
tax, FICA and FUTA, and other appropriate deductions.
(iv) The
Executive shall have no duty to mitigate his damages, except that continued
benefits required to be provided under Section
11(e)(iii)(D)
shall be
canceled or reduced to the extent of any comparable benefit coverage offered
to
the Executive during the period prior to the Scheduled Termination Date by
a
subsequent employer or other person or entity for which the Executive performs
services, including but not limited to consulting services.
(f) Without
“Cause.”
(i) By
the Executive.
At any
time during the term of this Agreement, the Executive shall be entitled to
terminate this Agreement and the Executive’s employment with the Company other
than for Good Reason by providing prior written notice of at least 90 days
to
the Company. Upon termination by the Executive of this Agreement and the
Executive’s employment with the Company without Cause, the Company shall have no
further obligations or liability to the Executive or his heirs, administrators
or executors with respect to compensation and benefits thereafter, except for
the obligation to pay the Executive any earned but unpaid base salary, and
unused vacation days accrued through the Executive’s last day of employment with
the Company. The Company shall deduct, from all payments made hereunder, all
applicable taxes, including income tax, FICA and FUTA, and other appropriate
deductions.
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(ii) By
The Company.
At any
time during the term of this Agreement, the Company shall be entitled to
terminate this Agreement and the Executive’s employment with the Company without
Cause by providing prior written notice of at least 90 days to the Executive.
Upon termination by the Company of this Agreement and the Executive’s employment
with the Company without Cause, the Company shall pay or provide to the
Executive (or, following his death, to the Executive’s heirs, administrators or
executors): (A) any earned but unpaid base salary, unpaid pro
rata
bonus
previously granted and unused vacation days accrued through the Executive’s last
day of employment with the Company; (B) as severance pay, the Executive’s full
base salary for a period of six (6) months; and (C) continued coverage, at
the
Company’s expense, under all Benefits Plans in which the Executive was a
participant immediately prior to his last date of employment with the Company,
or, in the event that any such Benefit Plans do not permit coverage of the
Executive following his last date of employment with the Company, under benefit
plans that provide no less coverage than such Benefit Plans, through the
Scheduled Termination Date. Except for severance which will be payable monthly,
all payments due hereunder shall be made within 45 days after the date of
termination of the Executive’s employment. The Company shall deduct, from all
payments made hereunder, all applicable taxes, including income tax, FICA and
FUTA, and other appropriate deductions.
13. Confidential
Information.
(a) The
Executive expressly acknowledges that, in the performance of his duties and
responsibilities with the Company, he has been exposed since prior to the
Effective Date, and will be exposed, to the trade secrets, business and/or
financial secrets and confidential and proprietary information of the Company,
its affiliates and/or its clients, business partners or customers (“Confidential
Information”).
The
term “Confidential Information” includes information or material that has actual
or potential commercial value to the Company, its affiliates and/or its clients,
business partners or customers and is not generally known to and is not readily
ascertainable by proper means to persons outside the Company, its affiliates
and/or its clients or customers.
(b) Except
as
authorized in writing by the Board, during the performance of the Executive’s
duties and responsibilities for the Company and until such time as any such
Confidential Information becomes generally known to and readily ascertainable
by
proper means to persons outside the Company, its affiliates and/or its clients,
business partners or customers, the Executive agrees to keep strictly
confidential and not use for his personal benefit or the benefit to any other
person or entity (other than the Company) the Confidential Information.
“Confidential Information” includes the following, whether or not expressed in a
document or medium, regardless of the form in which it is communicated, and
whether or not marked “trade secret” or “confidential” or any similar legend:
(i) lists of and/or information concerning customers, prospective customers,
suppliers, employees, consultants, co-venturers and/or joint venture candidates
of the Company, its affiliates or its clients or customers; (ii) information
submitted by customers, prospective customers, suppliers, employees, consultants
and/or co-venturers of the Company, its affiliates and/or its clients or
customers; (iii) non-public information proprietary to the Company, its
affiliates and/or its clients or customers, including, without limitation,
cost
information, profits, sales information, prices, accounting, unpublished
financial information, business plans or proposals, expansion plans (for current
and proposed facilities), markets and marketing methods, advertising and
marketing strategies, administrative procedures and manuals, the terms and
conditions of the Company’s contracts and trademarks and patents under
consideration, distribution channels, franchises, investors, sponsors and
advertisers; (iv) proprietary technical information concerning products and
services of the Company, its affiliates and/or its clients, business partners
or
customers, including, without limitation, product data and specifications,
diagrams, flow charts, know how, processes, designs, formulae, inventions and
product development; (v) lists of and/or information concerning applicants,
candidates or other prospects for employment, independent contractor or
consultant positions at or with any actual or prospective customer or client
of
Company and/or its affiliates, any and all confidential processes, inventions
or
methods of conducting business of the Company, its affiliates and/or its
clients, business partners or customers; (vi) acquisition or merger targets;
(vii) business plans or strategies, data, records, financial information or
other trade secrets concerning the actual or contemplated business, strategic
alliances, policies or operations of the Company or its affiliates; or (viii)
any and all versions of proprietary computer software (including source and
object code), hardware, firmware, code, discs, tapes, data listings and
documentation of the Company; or (ix) any other confidential information
disclosed to the Executive by, or which the Executive obligated under a duty
of
confidence from, the Company, its affiliates, and/or its clients, business
partners or customers.
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(c) The
Executive affirms that he does not possess and will not rely upon the protected
trade secrets or confidential or proprietary information of his prior
employer(s) in providing services to the Company.
(d) In
the
event that the Executive’s employment with the Company terminates for any
reason, the Executive shall deliver forthwith to the Company or destroy any
and
all originals and copies of Confidential Information.
14. Non-Competition
And Non-Solicitation.
(a) The
Executive agrees and acknowledges that the Confidential Information that the
Executive has already received and will receive is valuable to the Company
and
that its protection and maintenance constitutes a legitimate business interest
of the Company, to be protected by the non-competition restrictions set forth
herein. The Executive agrees and acknowledges that the non-competition
restrictions set forth herein are reasonable and necessary and do not impose
undue hardship or burdens on the Executive. The Executive also acknowledges
that
the products and services developed or provided by the Company, its affiliates
and/or its clients or customers are or are intended to be sold, provided,
licensed and/or distributed to customers and clients in and throughout the
United States and Europe (the “Geographic
Boundary”)
(to
the extent the Company comes to own or operate any material asset in other
areas
during the term of the Executive’s employment, the definition of Geographic
Boundary shall be automatically expanded to cover such other areas), and that
the Geographic Boundary, scope of prohibited competition, and time duration
set
forth in the non-competition restrictions set forth below are reasonable and
necessary to maintain the value of the Confidential Information of, and to
protect the goodwill and other legitimate business interests of, the Company,
its affiliates and/or its clients or customers.
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(b) The
Executive hereby agrees and covenants that he shall not, without the prior
written consent of the Company, directly or indirectly, in any capacity
whatsoever, including, without limitation, as an employee, employer, consultant,
principal, partner, shareholder, officer, director or any other individual
or
representative capacity (other than a holder of less than one percent (1%)
of
the outstanding voting shares of any publicly held company), or whether on
the
Executive’s own behalf or on behalf of any other person or entity or otherwise
howsoever, (i) during the Executive’s employment with the Company and (ii) the
period during which the Executive continues to receive his base salary pursuant
to Section
12(e)
or
Section
12(f)(ii)
of this
Agreement following the termination of this Agreement and of the Executive’s
employment, in the Geographic Boundary:
(i) Engage,
own, manage, operate, control, be employed by, consult for, participate in,
or
be connected in any manner with the ownership, management, operation or control
of any business in competition with the Business of the Company. The
“Business
of the Company”
is
defined as the development and production of biodiesel and other alternatives
to
petroleum-based fuels within the Geographic Boundary.
(ii) Recruit,
solicit or hire, or attempt to recruit, solicit or hire, any employee, or
independent contractor of the Company to leave the employment (or independent
contractor relationship) thereof, whether or not any such employee or
independent contractor is party to an employment agreement.
(iii) Attempt
in any manner to solicit or accept from any customer of the Company, with whom
the Executive had significant contact during the term of the Agreement, business
of the kind or competitive with the business done by the Company with such
customer or to persuade or attempt to persuade any such customer to cease to
do
business or to reduce the amount of business which such customer has customarily
done or is reasonably expected to do with the Company, or if any such customer
elects to move its business to a person other than the Company, provide any
services (of the kind or competitive with the Business of the Company) for
such
customer, or have any discussions regarding any such service with such customer,
on behalf of such other person.
(iv) Interfere
with any relationship, contractual or otherwise, between the Company and any
other party, including, without limitation, any supplier, co-venturer or joint
venturer of the Company to discontinue or reduce its business with the Company
or otherwise interfere in any way with the Business of the Company.
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15. Dispute
Resolution.
The
Executive and the Company agree that any dispute or claim, whether based on
contract, tort, discrimination, retaliation, or otherwise, relating to, arising
from, or connected in any manner with this Agreement or with the Executive’s
employment with Company shall be resolved exclusively through final and binding
arbitration under the auspices of the American Arbitration Association
(“AAA”).
The
arbitration shall be held in Los Angeles, California. The Company will be
responsible for the cost of the arbitration and the arbitrator. The arbitration
shall proceed in accordance with the National Rules for the Resolution of
Employment Disputes of the AAA in effect at the time the claim or dispute arose,
unless other rules are agreed upon by the parties. The arbitration shall be
conducted by one arbitrator who is a member of the AAA, unless the parties
mutually agree otherwise. The arbitrator shall have jurisdiction to determine
any claim, including the arbitrability of any claim, submitted to them. The
arbitrator may grant any relief authorized by law for any properly established
claim. The interpretation and enforceability of this paragraph of this Agreement
shall be governed and construed in accordance with the United States Federal
Arbitration Act, 9. U.S.C. § 1, et
seq.
More
specifically, the parties agree to submit to binding arbitration any claims
for
unpaid wages or benefits, or for alleged discrimination, harassment, or
retaliation, arising under Title VII of the Civil Rights Act of 1964, the Equal
Pay Act, the National Labor Relations Act, the Age Discrimination in Employment
Act, the Americans With Disabilities Act, the Employee Retirement Income
Security Act, the Civil Rights Act of 1991, the Family and Medical Leave Act,
the Fair Labor Standards Act, Sections 1981 through 1988 of Title 42 of the
United States Code, COBRA, the New York State Human Rights Law, the New York
City Human Rights Law, and any other federal, state, or local law, regulation,
or ordinance, and any common law claims, claims for breach of contract, or
claims for declaratory relief. The Executive acknowledges that the purpose
and
effect of this paragraph is solely to elect private arbitration in lieu of
any
judicial proceeding he might otherwise have available to him in the event of
an
employment-related dispute between him and the Company. Therefore, the Executive
hereby waives his right to have any such employment-related dispute heard by
a
court or jury, as the case may be, and agrees that his exclusive procedure
to
redress any employment-related claims will be arbitration.
16. Notice.
For
purposes of this Agreement, notices and all other communications provided for
in
this Agreement or contemplated hereby shall be in writing and shall be deemed
to
have been duly given when personally delivered, delivered by a nationally
recognized overnight delivery service or when mailed United States Certified
or
registered mail, return receipt requested, postage prepaid, and addressed as
follows:
If
to the Company:
Kreido
Laboratories
0000
Xxxxxxx Xxxxx
Xxxxxxxxx,
Xxxxxxxxxx 00000
Attn:
Chairman of the Board
Facsimile:
(000) 000-0000
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If
to the Executive:
Xxxx
Xxxxxxx, Ph.D.
0000
Xxxxxxx Xxxxx
Xxxxxxxxx,
Xxxxxxxxxx 00000
Any
party
may change the address to which communications hereunder are to be delivered
by
giving the other party notice in the manner herein set forth.
17. Assignment
and Assumption.
This
Agreement may be assigned to and assumed by the PubCo in connection with a
proposed merger transaction involving the Company and a subsidiary of the Pubco.
From and after such assignment and assumption, all references to the Company
shall be references to the PubCo, and this Agreement shall have been effectively
novated to become an agreement between the Executive and the PubCo.
18. Miscellaneous.
(a) All
issues and disputes concerning, relating to or arising out of this Agreement
and
from the Executive’s employment by the Company, including, without limitation,
the construction and interpretation of this Agreement, shall be governed by
and
construed in accordance with the internal laws of the State of California,
without giving effect to that State’s principles of conflicts of
law.
(b) The
Executive and the Company agree that any provision of this Agreement deemed
unenforceable or invalid may be reformed to permit enforcement of the
objectionable provision to the fullest permissible extent. Any provision of
this
Agreement deemed unenforceable after modification shall be deemed stricken
from
this Agreement, with the remainder of the Agreement being given its full force
and effect.
(c) The
Company shall be entitled to equitable relief, including injunctive relief
and
specific performance as against the Executive, for the Executive’s threatened or
actual breach of Section
13
or
Section
14
of this
Agreement, as money damages for a breach thereof would be incapable of precise
estimation, uncertain, and an insufficient remedy for an actual or threatened
breach of Section
13
or
Section
14
of this
Agreement. The Executive and the Company agree that any pursuit of equitable
relief in respect of Section
13
or
Section
14
of this
Agreement shall have no effect whatsoever regarding the continued viability
and
enforceability of Section
15
of this
Agreement.
(d) Any
waiver or inaction by the Company for any breach of this Agreement shall not
be
deemed a waiver of any subsequent breach of this Agreement.
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(e) The
Executive and the Company independently have made all inquiries regarding the
qualifications and business affairs of the other which either party deems
necessary. The Executive affirms that he fully understands this Agreement’s
meaning and legally binding effect. Each party has participated fully and
equally in the negotiation and drafting of this Agreement. Each party assumes
the risk of any misrepresentation or mistaken understanding or belief relied
upon by him or it in entering into this Agreement.
(f) The
Executive’s obligations under this Agreement are personal in nature and may not
be assigned by the Executive to any other person or entity.
(g) This
instrument constitutes the entire Agreement between the parties regarding its
subject matter. When signed by all parties, this Agreement supersedes and
nullifies all prior or contemporaneous conversations, negotiations, or
agreements, oral and written, regarding the subject matter of this Agreement.
In
any future construction of this Agreement, this Agreement should be given its
plain meaning. This Agreement may be amended only by a writing signed by the
Company and the Executive.
(h) This
Agreement may be executed in counterparts, a counterpart transmitted via
facsimile, and all executed counterparts, when taken together, shall constitute
sufficient proof of the parties’ entry into this Agreement. The parties agree to
execute any further or future documents which may be necessary to allow the
full
performance of this Agreement. This Agreement contains headings for ease of
reference. The headings have no independent meaning.
(i) THE
EXECUTIVE STATES THAT HE HAS FREELY AND VOLUNTARILY ENTERED INTO THIS AGREEMENT
AND THAT HE HAS READ AND UNDERSTOOD EACH AND EVERY PROVISION THEREOF. THIS
AGREEMENT IS EFFECTIVE UPON THE EXECUTION OF THIS AGREEMENT BY BOTH
PARTIES.
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IN
WITNESS WHEREOF, the Company and the Executive have executed this Employment
Agreement as of the day and year first above written.
| EXECUTIVE: | COMPANY: | ||
| KREIDO LABORATORIES | |||
| /s/ Xxxx Xxxxxxx | By: /s/ Xxxxxx Xxxxxxxxxxxxx | ||
|
XXXX XXXXXXX, Ph.D. |
Name: Xxxxxx Xxxxxxxxxxxxx |
||
|
|
|
Title:
Executive Vice President
|
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