Exhibit 10.21
June 19, 2003
Dear Xx. Xxxxxxxxx:
The following is our agreement under which you will continue employment with
American Bio Medica Corporation (ABMC) as Director of Sales of NYS Probation and
Parole and School District Development, effective as of June 19, 2003 (the
"Commencement Date"). This agreement supercedes all other agreements whether
written or verbal and may not be amended except as in writing signed by you and
an authorized senior officer of ABMC. You will report directly to the President
of ABMC and your office will be located in your residence.
TERM
Your employment with ABMC will be at will.
SALARY AND COMMISSION
Your base salary will be $15,000 per month, for the period July 1, 2003 through
December 31, 2003. Effective January 1, 2004 your salary will be $8,333 per
month, which is equivalent to $100,000 on an annualized basis. In addition,
effective January 1, 2004 you will receive a commission equal to 12% of all
sales to NYS Probation and Parole and School Districts to which you sell ABMC
products. The commission percentage will be reduced by 1% increments for every
1% below a blended gross margin at which sales to the NYS Probation and Parole
and School Districts are made below 45% (i.e. if the blended gross margin of
sales to these entities is 43% you will receive a 10% commission on sales [2%
less 2%]). ABMC will reimburse all reasonable business related expenses as
approved by the Chief Financial Officer.
BENEFITS
Benefits include:
o 20 vacation days o Usual corporate holidays
o 401 (k)
o Health insurance equal to other ABMC executive officers
SEVERANCE
In the unlikely event that the Board of Directors of ABMC elects to terminate
your employment for anything other than cause, including failure to renew this
agreement, (defined as commission of a crime (other than minor traffic
offenses), acts of dishonesty, fraud or malfeasance in connection with your
service on behalf of the Company, gross dereliction of duty, willful failure to
carry out any lawful directive of the Board of Directors, or material violations
of Company policies) you will receive severance pay equal to 12 months at an
annualized salary of $180,000, with continuation of all medical benefits during
the twelve-month period. The severance payment will be made under the current
pay cycle, each pay period, during the 12 months. All unvested options will vest
immediately upon your separation from the Company and remain vested for the
duration of their pre-established term, 10 years. Further, ABMC will indemnify,
or continue to indemnify, you to the full extent permitted by the New York
Business Corporation Law if you are, or become, a party to a matter by reason of
being or having been a director or officer of ABMC. The obligations of ABMC in
this paragraph shall be binding upon and become the obligations of any
successors or assigns of ABMC.
Additionally, you may elect to exercise this severance provision at your option
under the following circumstances:
o If you are required to relocate by the Board of Directors of ABMC as a
condition of continued employment, defined as moving your primary office
more than 25 miles from its current location in Kinderhook, New York.
o A substantial change in responsibilities at the direction of the Board of
Directors of the responsibilities normally assumed by your position (i.e.,
demotion); or
o Change in control of the Company, (i.e., if the Company is acquired wholly
or if another corporate entity becomes the controlling shareholder)
RESTRICTIVE COVENANTS
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, accept or 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 drugs of
abuse testing products or services east of the Mississippi River.
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.
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 your
employment. 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.
You further agree not to use any Confidential Information for your own benefit
of 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
date, personnel date, 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 its Customers or Customer Prospects.
The term "Customer" means any person or entity for which ABMC performed
any Covered Services during the two (2) 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 related to Covered Services during the
two (2) 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 Customer.
ENFORCEMENT
You agree that it is impossible to measure solely in money the damages which
will accrue to ABMC by reason of your failure to perform any or your obligations
set forth in the restrictive covenant paragraphs above. Therefore, if ABMC shall
institute any action or proceeding to enforce the provisions of the restrictive
covenants paragraphs, you hereby waive the claim or defense that there is an
adequate remedy at law and agree in any such action or proceeding not to
interpose the claim or defense that such remedy exists at law. You hereby
specifically affirm the appropriateness of injunctive, specific performance, or
other equitable relief in any such action, in addition to all other remedies
ABMC has at law.
If any of provision of the restrictive covenants 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 al other
circumstances.
If, in connection with any action taken by ABMC to enforce the provisions of the
restrictive covenants of this agreement, a court shall hold that all or any
portion of the restrictions contained therein a re unreasonable under the
circumstances then existing so as to render such restrictions 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 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 arising out a any action to enforce the terms of the
restrictive covenants of this agreement.
OTHER EMPLOYMENT INFORMATION
In making this offer of 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 entities during the term of this agreement without the written
agreement of the ABMC Board of Directors.
Sincerely
/s/ Xxxxxx Xxxxx 19/6/03
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Chairman, CEO and President
Accepted this 19th day of June, 2003 by:
/s/ Xxxxxxx Xxxxxxxxx
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Xxxxxxx Xxxxxxxxx
