December 5, 2005 Exhibit 10.24
Xxxxx X. Xxxxxx
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Dear Xxxxx,
It is our pleasure to formally continue your position of Chief Financial Officer
and Executive Vice President, Finance, for American Bio Medica Corporation
("ABMC" or the "Company"), reporting directly to the ABMC Chief Executive
Officer. This agreement supersedes all other agreements whether written or
verbal and may not be amended except by a writing signed by you and the Chief
Executive Officer, and approved by the Board of Directors. Your position will be
primarily located at our New York corporate facility although overnight travel
may be required from time to time. You will perform all duties as are generally
associated with the position of Chief Financial Officer and Executive Vice
President, Finance, as directed by the Chief Executive Officer. Below, we have
outlined the major terms and conditions applicable to your position.
Term
Your employment with ABMC will be for a term of one year unless sooner
terminated for cause, beginning on the date set forth above and automatically
renewed for successive one-year terms unless either side gives written notice of
intent not to renew at least 60 days prior to the end of any one-year term. If
AMBC terminates your employment for cause, this agreement shall be terminated
and you will be entitled to no severance and no further compensation or benefits
from ABMC, other than payment of salary and benefits up to and including the
date of termination.
Compensation
Effective with the signing of this Employment letter, your base salary will be
$10,833 per month, which is equivalent to $130,000 on an annualized basis.
Effective January 1, 2006 your base salary will increase to $11,917, which is
equivalent to $143,000 on an annualized basis. You will be eligible for your
first performance review by the Board of Directors in January 2007.
If you so desire, the cost of your health insurance (including family coverage
if you so require) shall be borne 100% by the Company. Please notify Human
Resources if you wish to receive this benefit.
You shall receive a car allowance of $700.00 per month and reimbursement for any
approved company related expenses.
You shall participate in the Management Bonus Program as approved by the Board
of Directors on January 19, 2005, and as amended by the Board of Directors on
November 9, 2005.
Benefits
o 20 vacation days
o Usual corporate holidays
o 2 personal days
o 401 (k)
Severance
In the unlikely event that ABMC elects to terminate your employment for anything
other than cause, you will receive severance pay equal to twelve (12) months of
your current base salary at the time of separation, with continuation of all
medical benefits during the twelve-month period at ABMC's expense. Cause shall
be defined as (1) death, (2) commission of a felony (3) acts of dishonesty,
fraud or malfeasance in connection with your service on behalf of the Company,
(4) gross dereliction of duty willful failure to carry out any lawful directive
of the Chief Executive Officer or the Board of Directors, or material violations
of Company policies which continue after Company has provided Employee with
written notice thereof and a period of thirty (30) days to cure such action or
misconduct or (5) disability of a period of more than 6 months). The severance
payment will be made under the current pay cycle, each pay period, during the 12
months, subject to all customary withholdings.
Additionally, you may resign your position and elect to exercise this severance
provision at your option under the following circumstances:
o If you are required to relocate by the Company or its Board of Directors
more than 50 miles from the Company's New York corporate facility as a
condition of continued employment
o A substantial change in responsibilities normally assumed by a Chief
Financial Officer/Executive Vice President, Finance at the direction of
the Company or its Board of Directors (i.e. demotion)
o You are asked to commit or conceal the commitment of any illegal act by
any officer or member of the board of directors of the Company
Change in Control
If there is a Change in Control (defined below) of ABMC, you may elect to resign
your position and to receive a lump sum severance payment equal to two times
your annual base salary ("CIC Payment"). If you elect to resign, ABMC will pay
you the CIC Payment within thirty days after you make your election, which
election must be in writing and received by ABMC's Board of Directors within ten
days after a Change in Control. In the event you continue employment with ABMC
or any successor to ABMC following a Change in Control or fail to make an
election within ten days after a Change in Control, you will not be entitled to
receive the CIC Payment.
Change in Control is defined as follows:
(i) the approval by shareholders of ABMC of a merger or
consolidation of ABMC with any other corporation, other than a merger or
consolidation which would result in the voting securities of ABMC outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the total voting power represented by
the voting securities of ABMC or such surviving entity outstanding immediately
after such merger or consolidation; or
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(ii) the approval by the shareholders of ABMC of a plan of complete
liquidation of ABMC or an agreement for the sale or disposition by ABMC of all
or substantially all of ABMC's assets.
Restrictive Covenants
Company Handbook/Compliance Certification
You are aware that it is your responsibility to read the ABMC Employee Handbook
thoroughly and comply with the policies contained in the Handbook. You
understand that the policies, benefits and information contained in the Handbook
are subject to change and that revisions to the Handbook may be made. Any such
changes will be communicated through official written notices and you hereby
acknowledge that any such revisions may supercede, modify or eliminate existing
policies. Only the Chief Executive Officer, Chief Financial Officer or a
majority of the Board of Directors may adopt revisions to the policies contained
in the Handbook. In no circumstance may a change to the employee handbook reduce
the salary, benefits or other conditions outlined in this employment agreement.
You agree that in addition to any covenants included in this Employment Letter,
you will sign a Compliance Certification simultaneously with the signing of this
Employment Letter. If a conflicting covenant exists between the Employment
Letter and the Compliance Certification and/or the Company Handbook, the
Employment Letter shall be the ruling document.
Non-Solicitation
During the twelve (12) months immediately following your termination from
employment with ABMC for any reason, you agree that:
o You will not, directly or indirectly, solicit in any manner or capacity
whatsoever, including by way of illustration, but not limitation, call
upon, mail or e-mail notices to, or make telephone calls to, any Customer
(defined below) or Customer Prospect (defined below) of ABMC, for the
purpose of selling any Covered Services (defined below) or engaging in any
business which directly or indirectly competes with ABMC.
o You will not solicit, endeavor to entice away from ABMC, or otherwise
interfere with the relationship of ABMC with any person who is employed
(or, but for any violation of this agreement, would have been employed) by
or otherwise engaged to perform services for ABMC, whether for your own
account or for the account of any other person or entity.
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o You will not, directly or indirectly, solicit in any manner or capacity
whatsoever, including by way of illustration, but not limitation, call
upon, mail, or e-mail notices to, or make telephone call to, any supplier
or vendor of ABMC for the purpose of engaging in any business which
directly or indirectly competes with ABMC.
Confidentiality
You agree not to disclose any Confidential Information (defined below) and you
promise to take all reasonable precautions to prevent its unauthorized
dissemination, both at all times during your employment with ABMC and after
termination of your employment for any reason. You agree to limit the disclosure
of any Confidential Information to only those employees and agents of ABMC who
have a need to know the information and who have similarly agreed to keep such
information confidential. Upon termination of your employment or upon request,
you will deliver to ABMC all documents and electronic files containing
Confidential Information and any personal property owned by ABMC.
You further agree not to use any Confidential Information for your own benefit
or for the benefit of anyone other than ABMC. You acknowledge that all
Confidential Information is and remains the property of ABMC and that no license
or rights in the Confidential Information has been or is granted to you.
"Confidential Information" means and includes all information relating to
marketing, advertising, public relations, development, services, trade
secrets, trade "know-how," business plans, Customer (as defined below) and
Customer Prospect (as defined below) lists, distributor lists, Customers
and Customer Prospects information, distributor information, financial
data, personnel data, employee compensation and benefits information, new
personnel acquisition plans, details of contracts, pricing policies,
operational methods, marketing plans or strategies, service development
techniques or plans, business acquisition or investment plans, or other
confidential and proprietary information related to the business or
affairs of ABMC and/or its Customers or Customer Prospects.
The term "Customer" means any person or entity for which ABMC performed
any Covered Services during the one (1) year period immediately preceding
the termination of your employment with ABMC for any reason whatsoever.
"Customer Prospect" means any person or entity to which ABMC made a new
business presentation or proposal, whether formal or informal related to
Covered Services during the one (1) year period immediately preceding the
termination of your employment with ABMC for any reason whatsoever.
"Covered Services" means any services or products of whatever kind or
character offered or provided by ABMC to any person or entity.
Enforcement
If any provision of the covenants in this agreement shall be held invalid or
unenforceable, the remainder nevertheless shall remain in full force and effect.
If any provision is held invalid or unenforceable with respect to particular
circumstances, it nevertheless shall remain in full force and effect in all
other circumstances.
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If, in connection with any action taken by ABMC to enforce the provisions of the
covenants of this agreement, a court shall hold that all or any portion of the
restrictions contained therein are unreasonable under the circumstances then
existing so as to render such covenants invalid or unenforceable, the parties
agree that any court of competent jurisdiction may reform such unreasonable
restrictions to the extent necessary to make such restrictions reasonable under
the circumstances then existing so as to render such restrictions both valid and
enforceable.
You acknowledge and agree that all of the covenants contained in this agreement
are necessary for the protection of ABMC's valuable and legitimate business
interests and are reasonable in scope and content. Accordingly, you acknowledge
and agree that if you violate any of the provisions of this agreement ABMC shall
sustain irreparable harm and, therefore, in addition to the other remedies which
ABMC may have under this agreement or otherwise, ABMC will be entitled to
specific performance, injunctive, and other equitable relief.
You agree to indemnify, save and hold harmless ABMC from and against any and all
claims, damages, losses, costs and expenses (including reasonable attorneys'
fees) incurred by ABMC in any action in which a court enforces the terms of the
covenants of this agreement.
Other Employment Information
In making this offer ofcontinued employment, ABMC has relied on your
representations that: (a) you are not currently a party to any contract of
employment that might impede your ability to accept this offer or to perform the
services completed thereby; and (b) that you are not subject to any
non-competition arrangement or other restrictive covenants that might restrict
your employment at ABMC as contemplated by this offer.
Exclusive Service
You will perform services exclusively for ABMC and you will not perform services
for any other persons or entities related to or conducting business with the
Company for personal profit during the term of this agreement without the
written agreement of the Board of Directors.
Miscellaneous
This writing represents the entire agreement with respect to your employment and
any prior agreements or understandings, written or oral, are merged herein. This
agreement shall be governed by the laws of the State of New York. ABMC will not
be deemed to have waived any provision of this agreement except by a signed
writing. This agreement may not be amended, except by a signed writing. Notices
given pursuant to this Agreement shall be in writing and delivered personally or
by nationally recognized overnight courier in the case of ABMC to its Kinderhook
facility to the attention of the Chief Executive Officer and in your case to
your home address as set forth in ABMC's personnel file.
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Xxxxx, we are enthusiastic about your appointment as Chief Financial Officer and
Executive Vice President, Finance and our expectation is that you will continue
to make a tremendous contribution to the long-term success of ABMC.
Sincerely,
/s/ Xxxxxx Xxxxxxxxxx
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Xxxxxx Xxxxxxxxxx
Chairman of the Board of Directors & President
By order of the American Bio Medica Corporation Board of Directors
Accepted this 28th Day of December 2005:
/s/ Xxxxx X. Xxxxxx
---------------------------------
Xxxxx X. Xxxxxx
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