Exhibit 10.10
EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of this 1st day of February 2001 by and between Advanced Business Sciences,
Inc., a Delaware corporation (hereinafter referred to as the "Company"), and
Xxxxx X. Xxxxx (hereinafter referred to as the "Executive"). This Agreement
shall be effective as of February 1, 2001.
WITNESSETH:
WHEREAS, the Executive has demonstrated unique qualifications to act in an
executive capacity for the Company, and Company expects that Executive's
contribution will be substantial and meritorious; and
NOW THEREFORE, in consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. Employment. The Company agrees to employ the Executive, and the Executive
agrees to accept such employment, all in accordance with the terms of
this Agreement.
2. Capacity and Duties. The Executive shall serve as Chief Financial Officer
of the Company. The Executive shall perform the duties assigned to him by
the board of directors of the Company (the "Board") and the President of
the Company to the best of his ability in a diligent, trustworthy,
businesslike, and efficient manner for the purposes of advancing the
business of the Company and, to this end, will devote his full time and
attention to the business of the Company. Executive also agrees that he
shall not in his personal capacity take advantage of any business
opportunities that arise during his employment that may benefit the
Company and relate to the Company's ongoing business. Executive further
agrees that all reasonable facts regarding such opportunities must be
forwarded to the Board for consideration and approval. If the Executive
is elected as a director of the Company or as a director of any of the
Company's affiliates or subsidiaries, the Executive will fulfill his
duties as such director without any additional compensation. With respect
to the sale of any of the Company's Equity Securities by the Company (as
that term is defined by Rule 3a-11-1 of the Securities and Exchange Act
of 1934) Executive shall restrict his participation in such sales to
those activities permitted by Rule 3a-4-1(a)(4)(ii) or (iii) of the
Securities and Exchange Act of 1934.
3. Term. The term of Executive's employment hereunder (the "Employment
Period") shall commence on February 1, 2001 and continue on an indefinite
basis, unless earlier terminated hereunder.
4. Compensation.
(a) Salary. For all services rendered by the Executive under this
Agreement, the Company shall pay the Executive an annual salary of
one hundred and twenty thousand dollars ($120,000) ("Salary").
(b) Expenses. To the extent not otherwise paid for by the Company, the
Company will reimburse the Executive for reasonable and necessary
expenses incurred in promoting the Company's business, including
expenses for travel and entertainment, such reimbursement to be made
periodically upon presentation of appropriate receipts or other
substantiation.
(c) Plans. The Executive will be permitted to participate in such
pension, profit sharing, bonus, life insurance, hospitalization,
major medical, and other employee benefit plans of the Company that
may be in effect from time to time, to the extent that the Executive
is eligible under the terms of those plans.
(d) Taxes, Etc. All compensation payable to Executive hereunder is
stated in gross amount and shall be subject to all applicable
withholding taxes and other normal payroll deductions and any other
amounts required by law to be withheld.
(e) Bonuses. Executive and the Board shall agree, on an annual basis, to
a bonus plan under which Executive may earn certain bonuses up to
fifty percent (50%) of his annual salary. Such plan shall be tied to
goals mutually established by the Board and the Executive.
5. Stock Incentives.
(a) Subject to approval by the Company's stockholders of the Company's
2001 Omnibus Equity Incentive Plan (the "Plan"), the Board or its
Compensation Committee, the Company hereby grants to the Executive
options to purchase in the aggregate 1,000,000 shares of the
Company's common stock (the "Options") The Options will be subject
to the terms and conditions applicable to options granted under the
Plan, as described in the Plan and the applicable notice of grant of
stock option and stock option agreement and will be subject to the
vesting requirements set forth in this Section 5. The exercise price
of each of these Options shall be a sum equal to eighty-five percent
(85%) of the average daily closing date of the Company's common
stock on the so-called OTC Bulletin Board or other nationally
recognized exchange for the first full week immediately preceding
the date on which the Options granted pursuant to this Section 5
(the "Exercise Price"). The Options shall vest and become
exercisable with respect to the first 41,667 shares subject thereto
when the Executive completes one month of continuous service from
February 1, 2001 and with respect to an additional 41,667 shares
subject thereto when Executive completes each month of continuous
service thereafter.
(b) The vesting of Options shall accelerate upon the occurrence of any
of the following events:
(i) The Options shall vest and become exercisable with respect to
up to 900,000 of the shares subject thereto as follows: (A)
300,000 of the shares subject to the Options shall vest and
become exercisable when the average closing price of the
Company's shares on the so-called OTC Bulletin Board or other
nationally recognized exchange exceeds one dollar ($1.00) per
share for five (5) consecutive trading days; (B) 300,000 of the
shares subject to the Options shall vest and become exercisable
when the average closing price of the Company's shares on the
so-called OTC Bulletin Board or other nationally recognized
exchange exceeds one dollar and fifty cents ($1.50) per share
for five (5) consecutive trading days and; (C) 300,000 of the
shares subject to the Options shall vest and become exercisable
when the average closing price of the Company's shares of
common stock on the so-called OTC Bulletin Board or other
nationally recognized exchange exceeds two dollars ($2.00) per
share for five (5) consecutive trading days provided that no
Options shall be due and owing pursuant to this Section 5(b)(i)
if the average closing price is a result of a reverse stock
split or similar corporate restructuring. Executive hereby
acknowledges and agrees that no options will vest pursuant to
this Section 5(b)(i) if such events occur after the termination
of his employment hereunder, for any reason or without reason.
(ii) The Options shall vest and become exercisable with respect to
an additional 300,000 of the shares subject thereto in each
case when there is an incremental Net Increase in the Company's
Consolidated Working Capital in an amount equal to
$1,000,000.The Executive acknowledges and agrees that no
Options will vest pursuant to this Section 5(b)(ii) if his
employment hereunder is terminated prior to any applicable Net
Increase. For the purposes of this paragraph, the following
definitions apply:
(A) "Company's Consolidated Working Capital" means any date
the amount by which Consolidated Current Assets exceeds
Consolidated Current Liabilities as of such date as
determined by the Company's independent auditor.
(B) "Consolidated Current Assets" means at any date the
consolidated current assets of the Company and its
consolidated subsidiaries determined as of such date.
(C) "Consolidated Current Liabilities" means at any date (1)
the consolidated current liabilities of the company and
its consolidated subsidiaries plus (ii) the current
liabilities of any person (other than the Company or a
consolidated subsidiary) which are guaranteed by the
Company or a consolidated subsidiary, all determined as of
such date.
(D) "Net Increase" means at any date the amount of the
Company's Consolidated Working Capital shall be in excess
of the Company's Consolidated Working Capital as of
February 1, 2001
(c) The obligations of the Corporation under Section 5(a) and (b) shall
terminate upon the earlier of (i) the vesting in the aggregate of
1,000,000 Options, or (ii) the termination of Executive's Employment
hereunder, for any reason or without reason. In the event of
Executive's termination of Employment, all options that have not
vested shall expire immediately.
(d) Company hereby agrees that in addition to the amounts to be paid to
Executive hereunder, the Company will pay the Executive a gross
amount equal to the highest state and federal income tax rates
multiplied by any ordinary income recognized by Executive due to his
exercise of the Options granted under this section 5 (the "Tax
Expense"). The Tax Expense payable under this section 5, if any,
shall be subject to all applicable withholding taxes and other
normal payroll deductions and any other amounts required by law to
be withheld and shall be paid on an annual basis on or before April
1 of each year. The Executive hereby acknowledges and agrees that
the Company shall not have any obligation to pay any Tax Expense
pursuant to this Section 5(d) if the Options (or the shares of the
Company's common stock received upon their exercise) are registered
pursuant to Section 5(e) below prior to the date such Options are
exercised by Executive.
(e) The Company shall use its best efforts to register the shares of the
Company's common stock underlying the Options issued to Executive
upon the request of the Executive. The term "register" for the
purposes of this Section 5(e) refers to a registration effected by
preparing and filing a registration statement in compliance with the
Securities Act of 1933, as amended, and the declaration or ordering
of effectiveness of such registration statement.
(f) Notwithstanding any provision to the contrary contained herein,
Executive acknowledges and agrees that by signing this Agreement he
agrees not to sell any of the Company's Equity Securities (whether
acquired pursuant to this agreement or otherwise) at a time when
applicable laws, Company policies or an agreement between the
Company and its underwriters prohibit such sale. Executive further
acknowledges and agrees that this restriction will apply, to any
position that he may now, or in the future hold with the Company,
whether as an employee, consultant or director of the Company or any
subsidiary of the Company.
6. Termination by Company. The Company shall have the right to terminate
Executive's employment hereunder at any time for any reason or for no
reason at all upon thirty (30) days written notice to Executive.
7. Termination By Executive. Executive has the right to terminate his
employment under this Agreement for any reason or without reason upon
thirty (30) days prior written notice to the Company.
8. Board of Directors and Resignation. Throughout the Employment Period, the
Company may from time to time cause Executive to be elected to the Board
and/or the board of directors of the Company's affiliates or
subsidiaries. Upon the termination of Executive's employment with the
Company for any reason, Executive shall be deemed to have automatically
resigned from any position he may hold with the Company, including any
offices or board memberships with the Company and/or its affiliates or
subsidiaries. Such resignation shall be deemed effective immediately
without the requirement that a written resignation be delivered. The
Executive shall execute any agreements to further effectuate such
resignations that are reasonably requested by the Company.
9. Compensation After Termination. If Executive is terminated by the Company
or Executive voluntarily terminates his employment, he shall not be
entitled to any compensation following his date of termination.
10. Confidential Information. The Executive acknowledges that he has had and
will have access to certain information related to the business,
operations, future plan and customers of the Company, the disclosure or
use of which could cause the Company substantial losses and damages.
Accordingly, during the term of this Agreement and thereafter, Executive
shall keep secret and retain in the strictest confidence, and shall not,
without the prior written consent of the Board, furnish, make available,
or disclose to any third party or use for the benefit of himself or for
the benefit of any third party, any Confidential Information.
"Confidential Information" shall mean any information relating to the
business or affairs of the Company, including, but not limited to,
information relating to financial statements, customer identities,
potential customers, employees, suppliers, servicing methods, equipment,
programs, strategies and information, analyses, profit margins, computer
programs and software (including object code and source code), past,
current, and planned research and development, market studies and
business plans, all inventions and ideas (whether patentable or
unpatentable and whether or not reduced to practice), trademarks and
service marks, corporate logos, or other proprietary information used by
the Company in connection with its business operations; provided,
however, that Confidential Information shall not include any information
which is in the public domain or becomes known in the industry through no
wrongful act on part of the Executive. Executive acknowledges that the
Confidential Information is vital, sensitive, confidential and
proprietary to the Company.
11. Inventions. Each Invention shall belong exclusively to the Company. The
Executive acknowledges that all of the Inventions are works made for hire
and the property of the Company, including any copyrights, patents, or
other intellectual property rights pertaining thereto. If it is
determined that any such works are not works made for hire, the Executive
hereby assigns to the Company all of the Executive's right, title, and
interest, including all rights of copyright, patent, and other
intellectual property rights, to or in such Inventions. The term
"Invention" shall mean any idea, invention, technique, modification,
process, or improvement (whether patentable or not), any industrial
design (whether registerable or not), any mask work, however fixed or
encoded, that is suitable to be fixed, embedded or programmed in a
semiconductor product (whether recordable or not), and any work of
authorship (whether or not copyright protection may be obtained for it)
created, conceived, or developed by the Executive, either solely or in
conjunction with others, during the Employment Period, or a period that
includes a portion of the Employment Period, that relates in any way to,
or is useful in any manner in, the business then being conducted or
proposed to be conducted by the Company, and any such item created by the
Executive, either solely or in conjunction with others, following
termination of the Executive's employment with the Company, that is based
upon or uses Confidential Information. Furthermore, the Executive
covenants that he will promptly:
(a) disclose to the Company in writing any Invention;
(b) assign to the Company or to a party designated by the Company, at
the Company's request and without additional compensation, all of
the Executive's right to the Invention for the United States and all
foreign jurisdictions;
(c) execute and deliver to the Company such applications, assignments,
and other documents as the Company may request in order to apply for
and obtain patents or other registrations with respect to any
Invention in the United States and any foreign jurisdictions;
(d) sign all other papers necessary to carry out the above obligations;
and
(e) give testimony and render any other assistance in support of the
Company's rights to any Invention.
12. Return of Company Materials Upon Termination. Executive acknowledges that
all price lists, manuals, catalogs, binders, customer lists and other
customer information, supplier lists, financial information, and other
records or documents containing Confidential Information prepared by
Executive or coming into Executive's possession by virtue of Executive's
employment by the Company is and shall remain the property of the Company
upon termination of Executive's employment hereunder. Executive shall
return immediately to the Company all such items in his possession
together with all copies thereof.
13. Right to Injunctive Relief. The Executive agrees and acknowledges that a
violation of the covenants contained in Sections 8, 10, 11 and 12 of this
Agreement will cause irreparable damage to the Company, and that it is
and will be impossible to estimate or determine the damage that will be
suffered by the Company in the event of a breach by the Executive of any
such covenant. Therefore, the Executive further agrees that in the event
of any violation or threatened violation of such covenants, the Company
shall be entitled as a matter of course to an injunction out of any court
of competent jurisdiction restraining such violation or threatened
violation by the Executive, such right to an injunction to be cumulative
and in addition to whatever other remedies the Company may have.
14. Representation by the Executive. The Executive hereby represents and
warrants that the execution of this Agreement and the performance of his
duties and obligations hereunder will not breach or be in conflict with
any other agreement to which he is a party or by which he is bound, and
that he is not now subject to any covenant against competition or similar
covenant which would affect the performance of his duties hereunder.
15. Assignment. This Agreement is personal and shall in no way be subject to
assignment by the Executive or the Company without the permission of the
other provided, however, that the Company shall have the right to assign
all or any part of its rights or obligations under this Agreement to (i)
any affiliate or subsidiary of the Company, or (ii) the purchaser of all
or substantially all of the assets of the Company.
16. Enforceability. If any portion or provision of this Agreement shall to
any extent be declared illegal or unenforceable by a duly authorized
court of competent jurisdiction, then the remainder of this Agreement, or
the application of such portion or provision in circumstances other than
those as to which it is so declared illegal or unenforceable, shall not
be affected thereby, and each portion and provision of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
17. Notices. All notices and communications required or permitted to be given
hereunder shall be given by delivering the same in hand or by mailing the
same by certified or registered mail, return receipt requested, postage
prepaid, as follows:
If sent to the Company, to: Advanced Business Sciences, Inc.
Attn: Xxxx Xxxxxx
0000 Xxxxx 000xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
with copy to: Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxxx & Xxxxxxxxxx, P.C.
00000 Xxxxxxx Xxxxxxx Xxxxx
Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
If to the Executive: Xxxxx X. Xxxxx
0000 Xxxxxxx Xxxxx
Xxxxx, XX 00000
or such other address as either party shall have furnished to the other
by like notice. Notices shall be effective as of the date of such
delivery or mailing.
18. Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties in relation to the subject matter
hereof and there are no promises, representations, conditions, provisions
or terms related thereto other than those set forth in this Agreement.
This Agreement supersedes all previous understandings, agreements and
representations between the Company and the Executive regarding the
Executive's employment by the Company, written or oral.
19. Governing Law; Jurisdiction. This Agreement shall be construed under and
be governed in all respects by the internal laws, and not the laws
pertaining to choice or conflicts of law, of the State of Nebraska. Any
actions or proceedings seeking to enforce any provision of this Agreement
shall be brought only in the federal or state courts situated in Xxxxxxx
County, Nebraska and each of the Parties hereby consents to the exclusive
jurisdiction of such courts and waives any objection to venue or personal
jurisdiction.
20. Waiver; Amendment. No waiver in any instance by any party of any
provision of this Agreement shall be deemed a waiver by such party of
such provision in any other instance or a waiver of any other provision
hereunder in any instance. This Agreement cannot be modified except in
writing signed by the party to be charged.
21. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which taken
together shall constitute one in the same Agreement.
22. Headings. Interpretation. The descriptive headings in this Agreement are
inserted for convenience of reference only and are not intended to be
part of or affect the meaning or interpretation of this Agreement. The
use of the word "including" in this Agreement shall be by way of example
rather than by limitation.
23. Survival. Sections 8, 10, 11, 12, 13 and 14 shall survive and continue in
full force and effect in accordance with their terms and conditions
notwithstanding any termination of the Executive's employment hereunder.
IN WITNESS WHEREOF, Company has caused its duly authorized officers to execute
this Agreement, and Executive has executed this Agreement as of the day and year
first above written.
Advanced Business Sciences, Inc.,
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, President
EXECUTIVE:
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
