EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated June 1, 2006 by and between
Manhattan Scientifics, Inc., ("NISI") and Xxxxxx Xxxxxx he "Executive")
(collectively, the -'Parties").
WHEREAS, MSI desires to continue to employ Executive and retain his special
and unique services and to enter into an agreement embodying the terms of such
employment;
WHEREAS, Executive desires to accept such employment and enter into such an
agreement. NOW THEREFORE, in consideration of the premises and mutual covenants
herein and for other good and valuable consideration, the Parties agree as
follows:
I. Term of Employment.
The term of this Agreement shall commence On the date first set forth above
and shall continue until terminated pursuant to Paragraph 5 below (the "Te=").
?. Position.
a. During the Term, Executive shall serve as MST's Chairman and Chief
Executive Officer. Executive shall have such duties and authority as shall be
determined from bane to time by MSI's Board of Directors, provided that such
duties and authority shall be consistent with Executive's present and
traditional duties and authority as MSI's Chaiman and Chief Executive Officer.
b. During the Tetui, Executive shall be appointed to and serve on MSI's
Board of Directors.
c. During the Term, Executive shall devote such time and efforts as
reasonably necessary to perform of Executive's duties hereunder. MSI
acknowledges that Executive is and may became a member of other Boards of
Directors of other entities during the Term and that Executive engages in and
may engage in other business activities separate and distinct from MSI's
business activities during the Term. MSI specifically acknowledges that
Executive may engage in such activities and other business interests during the
Term, provided that Executive shall not transfer MSI's Confidential Information
(as defined in Paragraph 6 below) in connection with such activities and
business interests without the prior written consent of MST's Board of
Directors, which consent shall not be unreasonably withheld.
d. Subject to such reasonable travel as the performance of Executive's
duties may require, Executive shall perform the duties required of him by this
Agreement in Santa Fe, New Mexico and New York City, at Executive's discretion.
3. Compensation and Benefits.
a. Base Salary. During the Term, NISI shall pay to Executive a gross
base salary at the annual rate of $200,000. Executive shall be entitled to-
annual increases in Executive's base salary as determined by MS1's Board of
Directors. Executive's anrttal base salary, as in effect from time to time, is
hereinafter referred to as the "Base Salary." The Base Salary will be subject to
all appropriate tax deductions.
b. Annual Bonus. During the Term, MSI shall pay to Executive a bonus
annually, but in no event later than the l5`" day of the third month following
the end of MSI's fiscal year (which runs from January to September), equal to
seven percent (7%) of the gross increase of MSI's market cap value in excess of
510,000,000 (the "Annual Bonus"). For example. if MSI's gross increase of market
cap value during MST's fiscal year is 511,000,000, Executive's Annual Bonus
shall be calculated at 7% of 51,000,000, or 570,000. For purposes of this
Paragraph 3(b), "gross increase of mask t cap value will be calculated by MSI's
regularly employed external auditors in accordance with the united States In the
event Executive's employment with MSI terminates prior to the end of MS1's
then-current fiscal year, Executive shall be entitled to a prorated Annual Bonus
based upon the number of months (provided that any portion of a month will be
rounded up to include the next full month) of a fiscal year for which the Annual
Bonus otherwise would have been due pursuant to this Paragraph 3(b).
c. Collateral and Security Interest. MSI agrees that, in the event it
does not pay to Executive any portion of the Base Salary or the Annual Bonus,
Executive shall have the right, at his option, to call upon MST's intellectual
property, including but not limited to all patents, as collateral and security
for all such compensation and benefit payments.
d. Executive Benefits. During the Term, Executive shall be entitled to
participate in MSI's employee benefit plans as may be in effect from time to
time (collectively "Employee Benefits"), on the same basis as those benefits are
generally made available to other MSI Executives. Notwithstanding the above, MST
shall reimburse Executive and Executive's covered dependents fully for the cost
of premiums, uncovered deductibles and out of pocket expenses required to
maintain Executive's present levels of family health insurance (including but
not limited to Medicare and all supplements and prescription drug coverage),
catastrophic insurance and eider care insurance.
e. Vacation. During the Term, Executive shall be entitled to 120 days
paid vacation annually. Any earned but unused vacation shall be carried over
from year to year during the Term, and thereafter shall be paid out to Executive
upon the expiration of the Term based upon Executive's Base Salary at the
expiration of the Term.
f. Directors and Officers Insurance. During the Term, and for a period
of five (5) years after expiration of the Term, MSI shall maintain, at its sole
expense, Directors and Officers liability insurance coverage for Executive in a
total coverage amount not less than five million dollars (55,000,000). MST shall
indemnify and hold Executive harmless in the event any claim related to his
position as a Director or Officer of MST exceeds the total amount covered by
such insurance.
g. Business Expenses. During the Term, MSI shall reimburse Executive
`.ally for Executive's reasonable business expenses. Including travel (including
airfare on business class or better), lodging, meal, telephone, computer and
communications equipment expenses, incurred by Executive in the performance of
Executive's duties hereunder shalt be reimbursed by MSI. MSI shall also
reimburse Executive for an automobile tease not to exceed one thousand dollars
(S 1,000) per month.
la. Personal Expenses. During the Term, MSI shall reimburse Executive for
miscellaneous personal expenses up to a maximum of four thousand dollars
(34,000) per month.. 4, Death Benefits. in the event Executive dies during the
Term, MSI shall pay to Executives estate allcompensation, benefits and expenses
due hereunder.
5. Termination. The Term and Executive's employment hereunder shall
continue from the effective date of this Agreement through May 31, 2010, unless
terminated earlier by MSI or by Executive pursuant to this Paragraph 5. Unless
terminated earlier pursuant to this Paragraph 5, the Term and Executive's
employment shall automatically renew for consecutive one year terms provided
that Executive does not send Notice of Termination to NISI at least 60 days
prior to the expiration of the Term. Notwithstanding any other provision of this
Agreement, the provisions of this Paragraph 5 shall exclusively govern
Executive's rights under this Agreement upon termination of employment with MSI,
a, Termination By MSI For Cause or Resignation by Executive Without
Good Reason.
(i) The Term and Executive's employment hereunder may be terminated by
MSI for Cause.
(ii) For purposes of this Agreement, "Cause" shall mean only: (A)
Executive's conviction of a criminal act involving fraud or embezzlement or
other act that prohibits Executive from maintaining his position with MST under
the rules of the Security and Exchange Commission, or (B) Executive's willful,
snowing 'and malicious misuse, misappropriation or disclosure of MSI's
Confidential Information without the consent of MSI's Board of Directors,
provided that MSI has communicated such activities to Executive in writing and
has afforded executive a 90 day opportunity to substantially cure same. For the
purposes of this Paragraph 5(a)(ii), Cause shall cease to exist for an event on
the 120`h day following the later of its occurrence or MST's knowledge thereof,
unless MSI has given Executive written notice thereof prior to such date.
(iii) If Executive's employment is terminated by MSI for Cause, or if
Executive resigns his employment with MSI without Good Reason (as defined
below), Executive shall be entitled only to receive:
(A) Executive's Base Salary through the date of Executive's termination;
3
(B) Executive's Annual Bonus through Executive's date of termination;
(C) reimbursement for any business expenses properly incurred by
Executive prior to the dare of Executive's termination;
(D) payment of all Executive's earned but unused vacation;
(E) continuation of Executive's Directors and Officers liability
insurance coverage for a period of five (5) years after the date of Executive's
termination; and
(F) such Employee Benefits, if any, pursuant to Paragraph 3 herein as to
which Executive may be entitled as of the date of Executive's termination (the
amounts described in clauses (A) through (F) herein being referred to as the
"Accrued Rights").
b. Termination By MSI Without Cause or Resignation by Executive for Good
Reason.
(i) The Term and Executive's employment hereunder may be terminated by MSI
without Cause or by Executive's resignation for Good Reason.
(ii} For purposes of this Agreement, "Good Reason" shall mean: (A) the
failure of MSI to pay or cause to be paid, or to provide or cause to be
provided, any part of Executive's compensation or benefits when due hereunder,
or a reduction of such compensation or benefits; (B) any diminution in
Executive's title, authority or responsibilities from those described in
Paragraph 2 hereof; (C) MSI's actual, attempted or purported termination of
Executive without Cause; or (D) any material breach by MSI of any of the terms
of this Agreement; provided that the events described in clauses (A) through (D)
of this Paragraph 5(b)(ii) shall constitute Good Reason only if MSI fails to
cure such event within 30 days after receipt from Executive of written notice of
the event which constitutes Good Reason; provided,, further, that Good Reason
shall cease to exist for an event on the 120(0) day following the later of its
occurrence or Executive's knowledge thereon, unless Executive has given MSI
written notice thereof prior to such date.
(iii) If Executive's employment is terminated by NISI without Cause or if
Executive resigns for Good Reason, Executive shall be entitled to receive:
(A) the Accrued Rights;
(B) payment of Executive's Base Salary through May 31, 2010, or for
t'=ee (3) years following Executive's termination date, whichever period is
longer;
(C) payment of Executive's Annual Bonus through MSI's fiscal year
concluding in 2010, or for three (3) years following Executive's termination
date, whichever period is longer;
(D) payment of the insurance benefits provided in Paragraph 3(e) above
through May 31, 2010, or for three (3) years following Executive's termination
date, whichever period is longer. After such period, Executive will be eligible
for continuation coverage as applicable.
c. Termination Due to Executive's Election Not to Renew the Agreement.
(i) The Term azrd Executive's employment hereunder may be terminated by
Executive provided that Executive provides a Notice of Termination to MSI at
least 60 days prior to the expiration of the then-current Term notifying MSI of
his desire not to renew the Agreement pursuant to this Paragraph 5.
(ii) If Executive's employment is terminated by Executive pursuant to a
timely Notice of Termination consistent with this Paragraph 5, Executive shall
be entitled to receive:
(A) the Accrued Rights;
(B) payment of Executive's Base Salary through and including December 31
of the calendar year in which Executive provides Notice of Teiuni.nation to MSI;
(C) payment of Executive's Annual Bonus through and including the end of
MSI's then-current fiscal year during which Executive provides Notice of
Termination to MSI;
(D) payment of the insurance benefits provided in Paragraph 3(e) above
through and including December 31 of the calendar year in which Executive
provides Notice of Termination to MSI.
d. Termination Due to Disability or Death.
0) The Tern. and Executive's employment hereunder shall terminate upon
Executive's death and may be terminated by MSI if Executive becomes physically
or mentally incapacitated and is therefore unable for a period of twelve (12)
consecutive months or for an aggregate of eighteen (18) months in any
twenty-four (24) consecutive month period to perform the essential functions of
Executive's duties as MSI's Chairman (such incapacity is hereinafter referred to
as "Disability"). Any question as to the existence of the Disability of
Executive as to which Executive and MST cannot agree shall be detetruined in
writing by a qualified independent physician mutually acceptable to Executive
and MSI. If Executive and MSI cannot agree as to a qualified independent
physician, each shall appoint such a physician and those two physicians shall
select a third who
shall make such determination in writing. The determination of Disability made
in writing to MSI and Executive shall be final and conclusive for all purposes
of the Agreement.
(ii) Upon termination of Executive's employment hereunder for either
Disability or death, Executive or Executive's estate (as the case may be) shall
be entitled to receive the Accrued Rights.
e. Notice of Termination,. Any purported termination of employment by
MSI or by Executive (other than due to Executive's death) shall be communicated
by written Notice of Termination to the other party hereto in accordance with
Paragraph 5 hereof. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of employment under
the provision so indicated, except that no basis need be indicated and no reason
given in the event of a termination by Executive by sixty (60) days notice
before the end of any Term.
f. Board/Committee Resignation. Upon termination of the Term and
Executive's employment for any reason, Executive agrees to resign, as of the
date of such tetnination and to the extent applicable, from MSI's Board of
Directors (and any committees thereot) and the Board of Directors (and any
committees thereof) of any of MST's affiliates.
6. Confidential Information
a. Executive will not at any time (whether during or after Executive's
employment with MST) retain or use for the benefit, purposes or account of
Executive or any other Person or disclose, divulge, reveal, communicate, share,
transfer or provide access to any Person outside MSI (other than its
professional advisers who are bound by confidentiality obligations), any
non-public, proprietary or confidential information concerning the intellectual
property, patents, research and development of MSI and/or any third party that
has disclosed or provided any of same to MSI on a confidential basis
("Confidential Information") without the prior written authorization of the
Board of Directors of MSI provided that the foregoing shall not apply to
Confidential hiforrr7.ation to. which MSI has granted Executive an ownership
interest or license.
b. "Confidential Information" shall not include any information that is:
(a) generally known to the industry or the public other than as a result of
Executive's breach of this covenant or any breach of other confidentiality
obligations by third parties; (b) made legitimately available to Executive by a
third party without breach of any confidentiality obligation; or (c) required by
law or legal process to be disclosed.
c. Upon termination of Executive's employment with MSI for any reason,
Executive shall cease and not thereafter commence use of any Confidential
Information owned or used by MST, and upon notification from MSI shall destroy,
delete, or return to MSI, at MSI's option, all originals and copies in any form
or medium (including memoranda, books, papers, plans, computer files, letters
and other data) in Executive's possession or control
(including any of the foregoing stored or located in Executive's office, home,
laptop or other computer, whether or not MSI's property) that contain
Confidential Information or is other mist the property of MSI, except that
Executive may retain those portions of any personal notes, notebooks and diaries
that do not contain any Confidential Information.
7. Arbitration. Any dispute between the parties arising out of this
Agreement, including but not limited to any dispute regarding any aspect of this
Agreement, its formation, validity, interpretation, effect, performance or
breach, or the Executives employment ("Arbitrable Dispute") shall be submitted
to arbitration in the City of New York, pursuant to the Rules of the American
Arbitration Association, before a single experienced employment arbitrator who
is either licensed to practice law in New York, or is a retired judge. The
arbitrator in any Arbitrable Dispute shall not have authority to modify or
change this Agreement in any respect. NISI shall be responsible for payment of
the amount of the fees of the American Arbitration Association and the
arbitrator. In the event the arbitrator specifically finds that any claim or
defense of either party is unreasonable, he may in his discretion direct that
reasonable legal fees of the prevailing party be paid by the non-prevailing
party. The arbitrator's decision and/or award will be fully enforceable and
subject to entry of judgment by any court of competent jurisdiction.
8. Miscellaneous.
a. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to conflicts
of laws principles thereof.
b. Entire Agreement/Amendments. This Agreement contains the entire
understanding of the parties with respect to the employment of Executive by MSI.
There are no restrictions, agreements, promises, warranties, covenants or
undertakings between the parties with respect to the subject matter herein other
than those expressly set forth herein. This Agreement may not be altered,
modified, or amended except by written instrument signed by the parties hereto.
c. No Waiver. The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver of
such party's rights or deprive such party of the right thereafter to insist upon
strict adherence to that term hr any other term of this Agreement.
d. Severability. In the event that any one or more of the provisions of
this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not be affected thereby.
e. Assignment and Sale. This Agreement, and all of Executive's rights
and duties hereunder, shall not be assignable or delegable by Executive. Any
purported assignment or delegation by Executive in violation of the foregoing
shall be null and void ab initio and of no force and effect. As a condition to
the sale, transfer or any other change in controlling interest of MSI or the
business operations of MSI to any person or entity, such person
or entity must agree, at Executive's option, to accept assignment of this
Agreement in its entirety and assume all Executive's rights and MST's
obligations hereunder.
f. Successors: Binding Agreement. This Agreement shall inure to the
benefit of and be binding upon the personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees of the
Parties.
g Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand or overnight courier or
three days after it has been mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth below in this Agreement, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
If to MSI:
Manhattan Scientifics, Inc. 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Attn: Board of Directors
If to Executive:
Xxxxxx Xxxxxx
000 Xxxx 00xx' Xxxxxx
Xxx Xxxx, Xxx Xxxx -00000 and
000 Xxxxxx Xx Xx Xxxxxx Xxxxx Xx, XX 00000
with a copy to:
Xxxxxxxx Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxx Xxxxxxxxx, Esq.
h. Executive Representation. Executive hereby represents to MSI that the
execution and delivery of this Agreement by Executive and MSI and the
performance by Executive of Executive's duties hereunder shall not constitute a
breach of, or otherwise contravene, the terms of any employment agreement or
other agreement or policy to which Executive is a party or otherwise bound.
i. Prior Agreements,. This Agreement supersedes all prior agreements and
understandings (including verbal agreements) between Executive and MSI regarding
the terms and conditions of Executive's employment with MSI.
1 Withholding Taxes. MSI may withhold from any amounts payable under
this Agreement such Federal, state and local taxes as may be required to be
withheld pursuant to any applicable law or regulation.
Ic Counterparts. This Agreement may be sib ed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
/s/ UTARVIN MASLOW
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UTARVIN MASLOW Dated: 7/11/2006
MANHATTAN SCIENTIFICS
/s/ Xxxxx X. Xxxxxxxx Xx.
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Xxxxx X. Xxxxxxxx Dated: 7/11/2006
Secretary
