EMPLOYMENT AGREEMENT
Exhibit
10.26
This
AGREEMENT dated as of December 1, 2006 between Uluru Delaware Inc., a Delaware
corporation, (the wholly-owned subsidiary of Uluru Inc., a Nevada corporation),
located at 0000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx, 00000 (the “Company”), and Xxxx
X. St. Xxxx, an individual residing at 0000 Xxxx Xxxx Xxxxx, Xxxxxxxxx, Xxxxx
00000 (the “Executive”).
W
I T N E
S S E T H:
WHEREAS,
the Company desires that Executive serve as the Company’s Vice President -
Material Science; and
WHEREAS,
in order to induce Executive to agree to serve in such capacity, the Company
hereby offers Executive certain compensation and benefits of employment,
as
described herein.
WHEREAS,
Executive is willing to serve in this position on the terms and conditions
hereinafter set forth;
NOW,
THEREFORE, in consideration of the promises and of the mutual covenants
contained herein, the Company and Executive hereby agree as
follows:
| 1. |
Employment
|
The
Company hereby agrees to employ Executive and Executive hereby agrees to
be
employed upon the terms and conditions hereinafter set forth.
| 2. |
Nature
of Employment
|
During
the term of this Agreement, Executive shall serve as Vice President - Material
Science and shall have such responsibilities and authority consistent with
such
position as may be reasonably assigned to him by the Chief Executive Officer
of
the Company. Executive shall devote his full time and attention and best
efforts
to perform successfully his duties and advance the Company’s interests. Employee
shall abide by the Company’s policies, procedures, and practices, as they may
exist from time to time. Executive shall be responsible to the Chief Executive
Officer of the Company, rendering the services and performing the duties
prescribed by the Chief Executive Officer of the Company.
The
Executive shall be employed at the Company’s offices in Addison, Texas, and his
principal duties shall be performed primarily in Addison, Texas, except for
business trips reasonable in number and duration.
| 3. |
Term
|
The
employment of the Executive hereunder shall begin on the date hereof and
shall
continue in full force and effect for a period of one (1) year, and thereafter
shall be automatically renewed for successive one-year periods unless the
Company gives the Executive written notice of termination within six (6)
months
prior to the end of any such period or until the occurrence of a Termination
Date, as defined in Section 6 (the "Term").
| 4. |
Compensation
|
| 4.1 |
As
compensation for the Executive’s services during the Term, the Company
shall pay the Executive an annual base salary at the rate of One
Hundred
Twenty Thousand Dollars ($120,000), payable in accordance with the
Company’s reasonable policies, procedures, and practices, as they may
exist from time to time. Prior to the end of each year during the
Term,
the Compensation Committee of the Company shall undertake an evaluation
of
the services of the Executive during the year then ended in accordance
with the Company’s compensation program at the date hereof (the
“Program”). The Company shall consider the performance of the Executive,
his contribution to the success of the Company and entities under
common
control with the Company (collectively, “Affiliates”), and other factors
and shall fix an annual base salary to be paid to the Executive during
the
ensuing year.
|
| 4.2 |
Notwithstanding
the foregoing, the Company may change the Program from time to time
or
institute a successor to the Program, but the Executive’s annual base
salary shall in no event be less than his annual base salary in effect
on
the date of change, adjusted regularly to reflect increases in the
cost of
living and comparable compensation for like
positions.
|
| 4.3 |
The
executive shall participate in the Company incentive compensation
programs
in accordance with the following subparagraphs (i) and
(ii):
|
| (i) |
Incentive
Plan
-
The executive shall be covered by the cash bonus plan currently maintained
by the Company and shall be afforded the opportunity thereunder to
receive
a target award of 10% of annual base salary payable in cash and a
target
award of 10% of annual base salary payable in Company Common Stock,
to be
awarded upon the achievement of reasonable performance goals; provided
that the Company may from time to time change the Program or institute
a
successor to the Program, so long as the Executive continues to be
eligible to receive bonus awards of percentages of annual base salary
in
amounts at least equal to those specified as in effect on the date
hereof.
|
| (ii) |
Stock
Option Plan
-
Executive shall be entitled to participate in the Company’s stock option
plan. In accordance with this plan the Board may from time to time,
but
without any obligation to do so, grant stock options to the Executive
upon
such terms and conditions as the Board shall determine in its sole
discretion. If the Company no longer has a class of stock publicly-traded
by reason of a Change in Control of the Company, as defined in Section
6.3, the Company’s obligation under this Section 4.3 will be satisfied
through options granted by the issuer with public stock then in control
of
the Company.
|
| 4.4 |
If
the Executive is prevented by disability, for a period of six consecutive
months, from continuing fully to perform his obligations hereunder,
the
Executive shall perform his obligations hereunder to the extent he
is able
and after six months the Company may reduce his annual base salary
to
reflect the extent of the disability; provided that in no event may
such
rate, when added to payments received by him under any disability
or
qualified retirement or pension plan to which the Company, Affiliate,
or
Executive contributes or has contributed, be less than $120,000.
If there
should be a dispute about the Executive’s disability, disability shall be
determined by the Board of Directors of the Company based upon a
report
from a physician, reasonably acceptable to the Executive, who shall
have
examined the Executive. If the Executive claims disability, the Executive
agrees to submit to a physical examination at any reasonable time
or times
by a qualified physician designated by the Chairman of Board of the
Company and reasonably acceptable to the Executive. Notwithstanding
any
provision in this Section, the Company shall not be obligated to
make any
payments to Executive on account of disability after the expiration
of
this Agreement.
|
| 5. |
Executive
Benefits
|
The
Executive shall be entitled to participate in all “employee pension benefit
plans,” all “employee welfare benefit plans” (each as defined in the Employee
Retirement Income Security Act of 1974) and all pay practices and other
compensation arrangements maintained by the Company, on a basis at least
as
advantageous to the Executive as the basis on which other executive employees
of
the Company are eligible to participate and on a basis at least as advantageous
to the Executive as the basis on which he participates therein on the date
hereof. Executive shall, during the term of his employment hereunder, continue
to be provided with such benefits at a level at least equivalent to the initial
benefits provided or to be provided hereunder. Without limiting the generality
of the foregoing, the Executive shall be entitled to the following employee
benefits (collectively, with the benefits contemplated by this Section 5,
the
“Benefits”):
| 5.1 |
The
Executive and Executive’s dependents shall participate, at their option in
any medical insurance plans and programs comparable in scope to the
coverage afforded on the date hereof, with only such contribution
by the
Executive toward the cost of such insurance as may be required from
time
to time from other executive officers of the Company. If a Change
in
Control of the Company, as defined in Section 6.3, shall have occurred,
the Company may not change the carriers providing medical insurance
immediately before the change without the consent of the Executive,
which
consent will not be unreasonably withheld.
|
| 5.2 |
Life
Insurance. Executive shall be entitled to group term life insurance
coverage of an amount equal to the annual base salary as defined
herein,
all premiums being paid by the Company.
|
| 5.3 |
Long-Term
Disability Insurance. The Company shall maintain in effect long term
disability insurance providing Executive in the event of his disability
(as defined in Section 4.4 hereof) with compensation annually equal
to at
least $120,000.
|
| 5.4 |
The
Executive shall be entitled to paid time off (“PTO”) of no less than
thirty three (33) days each year. Such PTO shall be accrued and taken
in
accordance with the Company’s policies and practices, as they may exist
from time to time.
|
| 5.5 |
The
Company shall reimburse the Executive from time to time for the reasonable
expenses incurred by the Executive in connection with the performance
of
his obligations hereunder.
|
| 5.6 |
During
such times as the Company is eligible and financially qualified to
obtain
the same, the Company shall maintain directors and officers’ liability
insurance applicable to the Executive in amounts established by the
Board
of Directors.
|
Notwithstanding
the foregoing, the Company may from time to time change or substitute a plan
or
program under which one or more of the Benefits are provided to the Executive,
provided that the Company first obtains the written consent of the Executive,
which the Executive agrees not unreasonably to withhold, taking into account
his
personal situation.
| 6. |
Termination
Date; Consequences for Compensation and
Benefits
|
| 6.1 |
Definition
of Termination Date. The first to occur of the following events shall
be
the Termination Date:
|
| 6.1.1 |
The
date on which the Executive becomes entitled to receive long-term
disability payments
by reason of total and permanent
disability;
|
| 6.1.2 |
The
Executive’s death;
|
| 6.1.3 |
Voluntary
resignation after one of the following events shall have occurred,
which
event shall be specified to the Company by the Executive at the time
of
resignation: material reduction in the responsibility, authority,
power or
duty of the Executive or a material breach by the Company of any
provision
of this Agreement, which breach continues for 30 days following notice
by
the Executive to the Company setting forth the nature of the breach
(“Resignation with Reason”);
|
| 6.1.4 |
Voluntary
resignation not accompanied by a notice of reason described in Section
6.1.3 (“General Resignation”);
|
| 6.1.5 |
Discharge
of the Executive by the Company after one of the following events
shall
have occurred, which event shall be specified in writing to the Executive
by the Company at the time of discharge:
|
| (i) |
a
felonious act committed by Executive during his employment hereunder,
|
| (ii) |
any
act or omission on the part of Executive not requested or approved
by the
Company constituting willful malfeasance or gross negligence in the
performance of his duties hereunder,
|
| (iii) |
any
material breach of any term of this Agreement by the Executive which
is
not cured within 30 days after written notice from the Chief Executive
Officer to the Employee setting forth the nature of the breach (“Discharge
for Cause”);
|
For
purposes of this subparagraph (6.1.5), no act or failure to act on the
Executive’s part shall be considered “willful” unless done or omitted to be done
by Executive not in good faith and without reasonable belief that Executive’s
action or omission was in the best interest of the Company. Notwithstanding
the
foregoing, Executive shall not be deemed to have been discharged for Cause
unless and until there shall have been delivered to Executive a copy of a
Notice
of Termination (as defined below) from the Chief Executive Officer of the
Company stating that in his good faith opinion Executive was guilty of conduct
set forth in clauses (i), (ii), or (iii) above of this subparagraph (6.1.5)
and
specifying the particulars thereof in detail.
| 6.1.6 |
Discharge
of the Executive by the Company not accompanied by a notice of cause
described in Section 6.1.5 (“General
Discharge”).
|
For
purposes of this Agreement “Notice of Termination” shall mean a notice which
indicates the specific termination provision in this Agreement relied upon
and
sets forth in reasonable detail the facts and circumstances claimed to provide
a
basis for termination of Executive’s employment under the provision so
indicated. Each Notice of Termination shall be delivered at least sixty (60)
days prior to the effective date of termination.
| 6.2 |
Consequences
for Compensation and Benefits
|
| (a) |
If
the Termination Date occurs by reason of disability, death, General
Resignation or Discharge for Cause, the Company shall pay compensation
to
the Executive through the Termination Date and shall pay to the Executive
all Benefits accrued through the Termination Date, payable in accordance
with the respective terms of the plans, practices and arrangements
under
which the Benefits were accrued.
|
| (b) |
If
the Termination Date occurs by reason of General Discharge or Resignation
with Reason, (i) all stock options held by the Executive shall become
immediately exercisable and shall remain exercisable for two (2)
years
after the Termination Date, (ii) the Company shall continue the health
coverage contemplated by Section 5.1 for a period of one (1) year
thereafter, and (iii) the Executive shall be entitled to receive,
within
60 days after the Termination Date, the amount set forth in Section
6.2.1.
|
| 6.2.1 |
The
Executive’s annual base salary at the Termination Date plus the target
bonus for the year in which the Termination Date occurs, multiplied
by one
(1) (i.e., 1 times base salary plus target
bonus).
|
| 6.3 |
Change
in Control.
|
In
the
event of the occurrence of a Change in Control (as defined below), this
Agreement may be terminated by Executive upon the occurrence thereafter of
one
or more of the following events:
1)
Termination by Executive of his employment with the Company may be made within
one (1) year after a Change in Control and upon the occurrence of any of
the
following events:
| (a) |
A
significant adverse change in the nature or scope of the Executive’s
authorities, powers, functions, responsibilities or duties as a result
of
the Change in Control, a reduction in the aggregate of Executive’s
existing base salary and existing Incentive Plan received from the
Company, or termination of Executive’s rights to any existing Executive
Benefit to which he was entitled immediately prior to the Change
in
Control or a reduction in scope or value thereof without the prior
written
consent of Executive;
|
| (b) |
The
liquidation, dissolution, merger, consolidation or reorganization
of the
Company or transfer of all or a significant portion of its business
and/or
assets (by liquidation, merger, consolidation, reorganization or
otherwise) unless the successor or successors to which all or a
significant portion of its business and/or assets have been transferred
(directly or by operation of law) shall have assumed all duties and
obligations of the Company under this Agreement pursuant to Section
12.5
hereof; or
|
| (c) |
The
Company shall relocate its principal executive offices or require
Executive to have as his principal location of work any location
which is
in excess of 50 miles from the location thereof immediately prior
to the
relocation date or to travel from his office in the course of discharging
his responsibilities or duties hereunder more than thirty (30) consecutive
calendar days or an aggregate of more than ninety (90) calendar days
in
any consecutive 365-calendar day period without in either case his
prior
consent.
|
2)
Subsequent to a change in control of the Company, the failure by the Company
to
obtain the assumption of the obligation to perform this Agreement by any
successor as contemplated in Section 12.5 hereof or otherwise; or
3)
Subsequent to a Change in Control of the Company, any purported termination
of
Executive’s employment that is not effected pursuant to a Notice of Termination
satisfying the requirement of Section 6.1.5 hereof.
| 6.3.1 |
A
Change in Control of the Company shall occur upon the first to occur
of
the date when (a) a person or group “beneficially owns” (as defined in
Rule 13d-3 promulgated under the Securities Exchange Act of 1934)
in the
aggregate 50% or more of the outstanding shares of capital stock
entitled
to vote generally in the election of the Directors of the Company
or (b)
there occurs a sale of all or substantially all of the business and/or
assets of the Company.
|
| 6.3.2 |
If
a Change in Control of the Company shall have occurred within six
(6)
months prior to the Termination Date or the Executive terminates
this
Agreement under Section 6.3 the Executive will be entitled to receive,
within 60 days after the Termination Date, the Executive’s annual base
salary at the Termination Date plus the target bonus for the year
in which
the Termination Date occurs multiplied by one (1) (i.e., 1 times
base
salary plus target bonus), all stock options held by the Executive
shall
become immediately exercisable and shall remain exercisable for one
(1)
year after the Termination Date. The Company shall continue the health
coverage contemplated by Section 5.1 for a period of one (1) year
thereafter.
|
| 6.4 |
Liquidated
Damages: No Duty to Mitigate Damages The amounts payable pursuant
to
Sections 6.2 and 6.3 shall be deemed liquidated damages for the early
termination of this Agreement and shall be paid to the Executive
regardless of any income the Executive may receive from any other
employer, and the Executive shall have no duty of any kind to seek
employment from any other employer during the balance of the
Term.
|
| 7. |
Indemnification
|
To
the
fullest extent permitted by law, the Company shall indemnify the Executive
and
hold him harmless from and against all loss, cost, liability and expense
(including reasonable attorney’s fees) arising from the Executive’s service to
the Company or any Affiliate, whether as officer, director, employee, fiduciary
of any employee benefit plan or otherwise.
| 8. |
Agreement
Not to Compete
|
The
Executive agrees that, while serving as an Executive of the Company, he will
not, without the written consent of the Chief Executive Officer of the Company,
serve as an employee or director of any business entity other than the Company
and its Affiliates, but may serve as a director of a reasonable number of
not-for-profit corporations and may devote a reasonable amount of time to
charitable and community service.
The
Executive may hold stock or a limited partnership interest of 5% or less
in any
publicly traded entity engage in such business without violating this
Agreement.
| 9. |
Agreement
Not to Solicit
|
For
one
year following any Termination Date, regardless of the reason, the Executive
shall not solicit any employee of the Company or an Affiliate to leave such
employment and to provide services to the Executive or any business entity
by
which the Executive is employed or in which the Executive has a material
financial interest. Soliciting a former employee of the Company and its
Affiliates to provide such services shall not be a violation of this
Agreement.
| 10. |
Confidential
Information
|
Unless
the Executive shall first secure consent of the Company, the Executive shall
not
disclose or use, either during or after the Term for a period of five (5)
years,
any secret or confidential information of the Company or any Affiliate, whether
or not developed by the Executive, except as required by his duties to the
Company or the Affiliate.
Executive
will sign a Employee Confidentiality, Inventions, and Non-Competition Agreement,
which shall control over this Agreement if any conflict exists between it
and
this Agreement.
| 11. |
Arbitration
|
Any
dispute or differences concerning any provision of this Agreement which cannot
be settled by mutual accord between the parties shall be settled by arbitration
in Dallas, Texas in accordance with the rules then in effect of the American
Arbitration Association, except as otherwise provided herein. The dispute
or
differences shall be referred to a single arbitrator, if the parties agree
upon
one, or otherwise to three arbitrators, one to be appointed by each party
and a
third arbitrator to be appointed by the first named arbitrators; and if either
party shall refuse or neglect to appoint an arbitrator within 30 days after
the
other party shall have appointed an arbitrator and shall have served a written
notice upon the first mentioned party requiring such party to make such
appointment, then the arbitrator first appointed shall, at the request of
the
party appointing him, proceed to hear and determine the matters in difference
as
if he were a single arbitrator appointed by both parties for the purpose,
and
the award or determination which shall be made by the arbitrator shall be
final
and binding upon the parties hereto. The arbitrator or arbitrators shall
each
have not less than five (5) years experience in dealing with the subject
matter
of the dispute or differences to be arbitrated. Any award maybe enforced
in any
court of competent jurisdiction. The expenses of any such arbitration shall
be
paid by the non-prevailing party, as determined by the final order of the
arbitrators.
| 12. |
Miscellaneous
|
| 12.1 |
Notices
|
All
notices in connection with this Agreement shall be in writing and sent by
postage prepaid first class mail, courier, or telefax, and if relating to
default or termination, by certified mail, return receipt requested, addressed
to each party at the address indicated below:
If
to the
Company:
0000
Xxxxxxx Xxxxx
Xxxxxxx,
XX 00000
Attn:
Chief Executive Officer
Copy
To:
Xxxx
X.
Xxxxxxxxx III, Esq.,
Xxxxxxx
Xxxx LLP
000
Xxxxxxx Xxxxxx
Xxxxxx,
XX 00000
If
to the
Executive:
Xxxx
X.
St. Xxxx
1755
Palo
Duro Trail
Grapevine,
TX 76051
Or
to
such other address as the addressee shall last have designated by notice
to the
communicating party. The date of giving of any notice shall be the date of
actual receipt.
| 12.2 |
Governing
Law
|
This
Agreement shall be deemed a contract made and performed in the State of Texas,
and shall be governed by the internal and substantive laws of the State of
Texas.
| 12.3 |
Severability
|
Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of
this
Agreement is held to be invalid, illegal or unenforceable in any respect
under
any applicable law or rule in any jurisdiction, such invalidity, illegality
or
unenforceability shall not affect any other provision or in the interpretation
in any other jurisdiction; however, such provision shall be deemed amended
to
conform to applicable laws and to accomplish the intentions of the
parties.
| 12.4 |
Entire
Agreement; Amendment
|
This
Agreement constitutes the entire agreement of the parties and may be altered
or
amended or any provision hereof waived only by an agreement in writing signed
by
the party against whom enforcement of any alteration, amendment, or waiver
is
sought. No waiver by a party of any breach of this Agreement shall be considered
as a waiver of any subsequent breach.
| 12.5 |
Successors
and Assigns
|
| 12.5.1 |
The
Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to expressly assume
and
agree to perform this Agreement in the same manner and to the same
extent
that the Company would be required to perform it if no such succession
had
taken place. Failure of the Company to obtain such agreement prior
to the
effectiveness of any such succession shall be a breach of this Agreement
and shall entitle Executive to compensation from the Company in the
same
amount and on the same terms as Executive would be entitled hereunder
if
Executive terminated his employment for Change of Control. As used
in this
Section 12.5.1, “Company” shall mean the Company as hereinbefore defined
and any successor to its business and/or assets as aforesaid which
executes and delivers the Agreement provided for in this Section
12.5.1 or
which otherwise becomes bound by all the terms and provisions of
this
Agreement by operation of law.
|
| 12.5.2 |
This
Agreement is intended to bind and inure to the benefit of and be
enforceable by Executive and the Company, and their respective successors
and assigns, except that Executive may not assign any of his rights
or
delegate any of his duties without the prior written consent of the
Company.
|
| 12.6 |
Assignability
|
Neither
this Agreement nor any benefits payable to the Executive hereunder shall
be
assigned, pledged, anticipated, or otherwise alienated by the Executive,
or
subject to attachment or other legal process by any creditor of the Executive,
and notwithstanding any attempted assignment, pledge, anticipation, alienation,
attachment, or other legal process, any benefit payable to the Executive
hereunder shall be paid only to the Executive or his estate.
IN
WITNESSES WHEREOF, the Company and its officers hereunto duly authorized,
and
the Employee have signed and sealed this Agreement as of the date first written
above.
|
Executive
|
||||
|
By:
|
/s/
Xxxxx X. Xxxx
|
By:
|
/s/
Xxxx X. St. Xxxx
|
|
|
Name:
|
Xxxxx
X. Xxxx
|
Name:
|
Xxxx
X. St. Xxxx
|
|
|
Title:
|
President
& CEO
|
Title:
|
Vice
President - Material Science
|
|
|
Date:
|
December
1, 2006
|
Date:
|
December
1, 2006
|
|
