EXHIBIT 10.9
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made by and between SAMARITAN PHARMACEUTICALS,
INC. a Nevada Corporation ("Company") and Xxxxx Xxxxxxx, an individual
("Executive"), as of January 1, 2001 (the "Effective Date"), who agree as
follows:
1. Recitals. This Agreement is made with reference to the
following material facts:
1.1 Executive is presently employed by Company pursuant to an oral
agreement.
1.2 The parties desire to continue Executive's employment with
the Company pursuant to the written agreement set forth herein.
2. Employment.
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2.1 Company hereby engages and employs Executive in the capacity of
Chief Executive Officer, President, and Chairman of the Board as of the
Effective Date (the "Employment"). The Company's Board of Directors (the
"Board") may also provide such additional designations of title to Executive, as
the Board, in its discretion, may deem appropriate. Executive agrees to perform
the executive duties and functions customarily associated with the offices of
Chief Executive Officer, President, Chairman of the Board and as specified from
time to time by the Board.
2.2 Except for legal holidays, vacations and absences due to temporary
illness or as otherwise permitted pursuant to company policy, Executive shall
devote a majority of her time, attention and energies to the business of the
Company. Executive represents and warrants to the Company that she is under no
restriction, limitation or other prohibition to perform her duties as described
herein.
3. Term. The term of this Agreement (the "Term"), shall commence on the
Effective Date hereof and shall continue for a period of five (5) years
thereafter unless terminated earlier as provided hereinafter.
4. Compensation.
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4.1. Base Salary. Executive's initial salary shall be $360,000 per
annum. This salary level will be reviewed at least annually by the Board, but
will not be reduced without Executive's prior written consent. This annual
salary of $360,000 shall be payable in equal bi-weekly installments before
deductions for employment taxes and other deductions mandated by law. The amount
of unpaid salary may be paid and mandated only upon determination by the
Employee and not by the Employer, at any time, in stock or converted to shares
of Common Stock of the Company. The amount of stock issued shall equal to the
amount due divided by the lowest close price of the stock quoted on the exchange
or medium where the stock is trading, for the period for which the salary has
been earned divided by one mines the current discount rate for restricted stock
offered by the company (1- Rdiscount). Additionally, prior to the end of each
year of employment and commencement of the next year of employment under this
Agreement, the parties agree to mutually set an increase in the then Annual
Salary considering such factors as performance, cash flow, increases to other
members of management, revenues and other considerations, of not less that 5% of
the prior year salary.
4.2 Bonus. The Executive shall receive bonus payments in accordance
with the following schedule: Starting with market capitalization of $12,500,000
and every $6,250,000 increment thereafter, the Executive shall receive .001% of
the issue and outstanding Common Stock number of warrants at the fair market
price of the stock when the market capitalization is reach. The term of the
warrants shall be 10 years from the issuance date. The Warrants shall also
contain a "cashless exercise" feature, a "reload" feature, and "piggyback
registration" rights.
4.3 Incentive Stock Options. The Executive shall receive a guaranteed
annual grant of Incentive Stock Options not less than the greater of 250,000
options or four percent (4%) of the issued and outstanding Common Stock to be
paid starting on the signing of this contract and each anniversary of the
effective date under this Agreement. One quarter (1/4) of each Incentive Stock
Options grant shall vest every quarter. One hundred percent (100%) of each
Incentive Stock Options grant shall vest, upon the death, disability,
retirement, or involuntary termination by the company of the Employee. The price
of the warrants shall be set at the lowest closing price in the preceding
quarter of the grant. The term of the warrants shall be 10 years from the
issuance date. The Warrants shall also contain a "cashless exercise" feature, a
"reload" feature, and "piggyback registration" rights.
4.4 Retirement Benefits. Company shall provide Executive with the
opportunity to participate in all of Company's qualified defined benefit and
defined contribution retirement plans, subject to the eligibility and
participation requirements of such plans.
4.5 Employee Benefits.
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(a) The Company shall, at its expense, provide Executive and
her immediate family with comprehensive medical insurance coverage at least
comparable to the coverage provided to the Company's other executive officers,
provided that Executive shall bear the cost of coverage for any dependents. The
Company shall also maintain Directors and Officers (D&O) insurance, which shall
cover Executive with reasonable coverages and policy limits.
(b) During the term of this Agreement, and as otherwise
provided within the provisions of each of the respective plans, Company shall
provide Executive all benefits to which other executives and employees of
Company are generally entitled to receive, as commensurate with Executive's
position. Such benefits shall include, but not be limited to, group term life
insurance, travel insurance, dental insurance, vision insurance, and short-term
and long-term disability coverage. Executive shall likewise participate in any
additional benefits as may be established during the term of this Agreement, by
standard written policy of Company.
4.6 Vacation. Executive shall receive three (3) weeks paid vacation
each year, which shall be taken in accordance with the Company's vacation
policy. Executive shall also receive all the paid holidays observed by the
Company and any other paid absence days established by Company policy.
4.7 Perquisites. Company shall provide Executive, at Company's cost,
all perquisites to which other executives of Company are entitled to receive in
accordance with Company policy. Such perquisites, if established, shall include,
but not be limited to, coverage of cost for auto allowance, cellular telephone,
and pager.
4.8 Expenses. Company shall pay, or reimburse Executive, for all
ordinary and necessary expenses, in reasonable amounts, which Executive incurs
in performing her duties under this Agreement, including, but not limited to,
travel, entertainment, professional dues and subscriptions, and all dues, fees
and expenses associated with membership in various professional business and
civic associations and societies of which Executive's participation is in the
best interests of Company, subject, however, to any limitations, rules and
procedures adopted by Company and which are applicable to executives generally.
4.9 Indemnification. The Company shall indemnify Executive, to the
maximum extent then permitted by applicable law, from and against any and all
claims, actions, suits, losses, fines, judgments, interest, costs and expenses
(including without limitation actual attorney's fees and disbursements) arising
out of or relating to Executive's actions or omissions as an officer, director
(if ever applicable) or employee of the Company and/or any affiliate of the
Company and/or as a trustee or fiduciary of any plan, trust or other program
established by the Company. This Section 4.9 shall survive termination or
expiration of this Agreement.
5. Termination and Compensation Upon Termination.
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5.1 Notice and Date of Termination
(a) Any termination of Executive's Employment by Company or
Executive shall be communicated by a written notice to the other party (the
"Notice of Termination"). The Notice of Termination shall indicate the specific
termination provision in this Agreement that is applicable and is being 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.
(b) "Date of Termination" shall mean:
(i) In the case of termination under sections 5.2 (retirement)
or 5.3 (death), the date of retirement or death, as may be applicable.
(ii) In the case of termination initiated by the Executive under
section 5.5 (voluntary resignation) or 5.8 (termination for Good Reason), the
date specified in the applicable Notice of Termination, or such earlier date, if
any, determined by the Company.
(iii) In all other situations, the date specified in the applicable
Notice of Termination.
5.2. Termination Due to Retirement.
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(a) In the event Executive's employment is terminated, while
this Agreement is in force, by reason of Normal Retirement (as defined under the
then established rules of Company's tax-qualified retirement plan), Executive's
benefits shall be determined in accordance with Company's retirement, survivor's
benefits, insurance and other applicable programs then in effect.
(b) Upon the effective date of such termination, Company shall
continue and pay to Executive her full Base Salary, at the rate then in effect
as provided in section 4.1 herein, through the life of this contract, to the
retiree, as if the Executive had not retired. Company's obligation to pay and
provide to executive the Base Salary as provided for in section 4.1 shall
thereafter expire and, with the exception of the any covenants which by their
terms survive termination, Company and Executive thereafter shall have no
further obligations under this Agreement. The Executive shall receive all other
benefits and shall immediately become one hundred percent (100%) vested to,
including, but not limited to, the retirement benefits and options as described
in section 4 herein.
5.3 Termination Due to Death. In the event of Executive's death during
the term of this Agreement, or during any period of Disability (as defined
herein) during which Executive is receiving compensation pursuant to section 5.4
herein, Company shall pay to Executive's beneficiary as so designated by
Executive during her lifetime, or to her estate, as appropriate, all benefits to
which Executive had a vested right pursuant to this Agreement, including, but
not limited to, the retirement benefits described in section 4.4 above. In
addition, One hundred percent (100%) of each Incentive Stock Options grant shall
vest, upon the death of the Employee described in section 4.3 above and section
6.6(e) below. Company's obligation to pay and provide Compensation as provided
for in section 4 above shall continue and be paid through the life of this
contract, to the deceased estate, as if the Executive had not died.
5.4 Termination Due to Disability.
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(a) In the event Executive becomes Disabled during the term of
this Agreement and is, therefore, unable to perform her duties under this
Agreement for a period of more than 90 calendar days in the aggregate, during
any period of 150 consecutive days, or in the event of the Board's reasonable,
good faith determination that Executive's Disability is likely to last for more
than a period of 120 consecutive calendar days, Company shall have the right to
terminate Executive's active Employment upon the delivery to Executive of a
Notice of Termination stating Company's intent to terminate for Disability at
least 30 calendar days prior to the effective date of such termination.
(b) Upon the Date of Termination (as defined by section 5.1),
Company shall pay to Executive her full Base Salary, at the rate then in effect,
as provided in section 4.1 herein, through the term of this contract. Company's
obligation to pay and provide Compensations in section 4 above shall not expire,
however, Executive shall receive all rights and benefits and immediately become
one hundred percent (100%) vested, including, but not limited to, short and
long-term disability benefits, retirement benefits and options as described
herein.
(c) The term "Disability" shall mean, for all purposes of this
Agreement, the incapacity of Executive due to injury, illness, disease, or
bodily or mental infirmity, to engage in the performance of substantially all of
the usual duties of employment with Company as contemplated by section 2 herein,
such Disability to be determined by the Board of Directors of Company upon
receipt of and reliance on competent medical advice from one or more
individuals, selected by the Board, who are qualified to give such professional
medical advice.
5.5 Voluntary Termination by Executive.
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(a) This section is applicable only to the voluntary
resignation by Executive, as opposed to resignation arising in the context of
"Termination for Good Reason," which is governed by section 5.8, below.
(b) Executive may terminate this Agreement at any time by
giving the Board of Directors of Company a Notice of Termination. The
termination shall automatically become effective upon the expiration of the
period of notice specified, or at anytime sooner at the discretion of Company.
During such notice period Company shall make no changes adverse to Executive
with respect to her compensation, benefits and perquisites in effect as of the
time such notice was given, and upon such termination, Company shall pay to
Executive all compensation due through the date of termination. Thereafter,
Executive shall retain all benefits which vested prior to termination in
accordance with the rules and procedures then in effect with respect to vesting,
including, without limitation all vested retirement benefits, insurance,
options, warrants and deferred compensation benefits. Otherwise, with the
exception of the any covenants, which by their terms survive termination,
Executive and Company shall thereafter have no further obligations under this
Agreement.
5.6 Involuntary Termination by Company.
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(a) Company may terminate Executive's Employment at any time
for any reason other than death, Disability, Retirement, or for Cause (as
defined in section 5.7), by giving Executive a Notice of Termination.
(b) Upon the Notice of Date of Termination, Company shall pay
to Executive her Base Salary through the next anniversary of the effective date
under this agreement, plus immediately vest one hundred percent (100%) all other
benefits to which Executive has at the time.
(c) In the event of termination pursuant to this section 5.6,
Executive shall be entitled to the "Severance Payment" (as defined in section
6.5) and "Additional Benefits" provided for in section 6.6.
(d) With the exception of the payments and benefits described
in this section 5.6, and any covenants which by their terms survive termination,
Company and Executive thereafter shall have no further obligations under this
Agreement and the agreement of Section 8 "Non-Competition" shall be terminated.
5.7 Termination for Cause.
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(a) The Company may, at any time, discharge Executive "for
Cause," whereupon her employment shall terminate in accordance with the
Company's Notice of Termination. As used in this Agreement, the term "Cause"
shall mean, (i) the conviction of any crime that results in imprisonment without
the option of a fine, (ii) the continuing material non-observance or the
material breach by Executive of any of the material provisions of this Agreement
after due written notice to Executive from the Board specifying with
particularity the nature of such non-observance or breach.
(b) In the event of termination for Cause, Company shall pay
Executive her full Base Salary and accrued vacation time though the Date of
Termination, plus all other benefits to which Executive has a vested right at
the time. With the exception of any covenants, which by their terms survive
termination, Company and Executive shall thereafter have no further obligations
under this Agreement.
5.8 Termination for Good Reason.
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(a) Executive may terminate this Agreement at any time for
"Good Reason," by giving the Board a Notice of Termination stating such intent
to terminate. "Good Reason" shall mean, without Executive's prior written
consent, the occurrence of any one or more of the following:
(i) Failure by the Company to honor any of its material
obligations under this Agreement; or
(ii) Any purported termination by the Company of Executive's Employment
that is not effected pursuant to a Notice of Termination as required by 5.1 and,
for purposes of this Agreement, no such purported termination shall be
effective; or
(iii) Failure to elect or reelect or otherwise to maintain Executive to
or in the office or the position in the Company that Executive held as of the
date hereof; or
(iv) Executive's overall compensation or perquisites are reduced or
adversely modified in any material respect, or Executive's authority or duties
are materially changed, in either case without the prior and voluntary written
consent of Executive, which change is not fully remedied within ten (10)
calendar days after receipt by the Company of written notice from Executive
identifying such change(s). For purposes of this Agreement, Executive's
authority or duties shall be conclusively considered to have been "materially
changed" if, without Executive's express and voluntary written consent, there is
any substantial diminution or adverse modification in Executive's title, status,
overall position, responsibilities, reporting relationship, general working
environment (including without limitation secretarial and staff support,
offices, and frequency and mode of travel); or
(v) A change in circumstances significantly affecting Executive's
position, including without limitation a change in the scope of the business or
other activities for which she was responsible as of the Effective Date of this
Agreement, and, as a result thereof, Executive has been rendered substantially
unable to carry out, has been substantially hindered in the performance of, or
has suffered a substantial reduction in any of the authorities, powers,
functions, responsibilities or duties attached to the position held by Executive
as of the date hereof, which situation is not fully remedied within ten (10)
calendar days after written notice to the Company from Executive of such
determination, or
(vi) Company's requiring Executive to be based more than 50 miles
from the location of her principal residence at that time.
(c) In the event of termination pursuant to this section 5.8,
Executive shall be entitled to the "Severance Payment" (as defined in section
6.5) and "Additional Benefits" provided for in section 6.6.
(d) With the exception of the payments and benefits described
in this section 5.8, and any covenants, which by their terms survive
termination, Company and Executive thereafter shall have no further obligations
under this Agreement.
6. Change of Control
6.1 Survival. The provisions of this Section 6 shall (i) survive this
Agreement and shall continue one (1) day past termination of Executive's
employment, and (ii) only become effective upon a "Change in Control," as
defined below. No termination or expiration of this Agreement shall limit,
alter, or otherwise affect Executive's continuing rights hereunder with respect
to the benefits and rights afforded to him as provided herein.
6.2 Background.
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(a) The Company believes that because of its position in the
industry, financial resources, and historical operating results there is a
possibility that the Company may become the subject of a Change in Control (as
defined below), either now or at some time in the future.
(b) The Company believes that it is in the best interest of
the Company and its shareholders to xxxxxx Executive's objectivity in making
decisions with respect to any pending or threatened Change in Control of the
Company and to assure that the Company will have the continued dedication and
availability of Executive, notwithstanding the possibility, threat or occurrence
of a Change in Control. The Company believes that these goals can best be
accomplished by alleviating certain of the risks and uncertainties with regard
to Executive's financial and professional security that would be created by a
pending or threatened Change in Control and that inevitably would distract
Executive and could impair her ability to objectively perform her duties for and
on behalf of the Company.
(c) Accordingly, the Company believes that it is appropriate
and in the best interest of the Company and its shareholders to provide to
Executive compensation arrangements upon a Change in Control that lessens
Executive's financial risks and uncertainties and that are reasonably
competitive with those of other corporations. With these and other
considerations in mind, the Board has authorized the Company to enter into these
arrangements with Executive to provide the protections set forth herein
following a Change in Control.
6.3 Change in Control. As used in this Agreement, the phrase
"Change in Control" shall mean:
(a) Except as provided by Paragraph (c) hereof, the
acquisition by any person, entity or "group", within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange
Act"), of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of twenty percent (20%) or more of the combined voting
power of the then outstanding securities entitled to vote generally in the
election of directors of the Company; or
(b) Individuals who, as of the Effective Date hereof,
constitute the Board of Directors of the Company (as of the Effective Date
hereof the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board of Directors of the Company, provided that any person
becoming a director subsequent to the Effective Date hereof whose election, or
nomination for election by the Company's shareholders, is or was approved by a
vote of at least a majority of the directors then comprising the Incumbent Board
(other than an election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election contest
relating to the election of the directors of the Company, as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be,
for purposes of this Agreement, considered as though such person were a member
of the Incumbent Board; or
(c) Approval by the stockholders of the Company of a
reorganization, merger or consolidation of the Company with any other person,
entity, or corporation, other than:
(i) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of another entity) more than eighty five percent (85%) of the
combined voting power of the securities entitled to vote generally in the
election of directors of the Company or such other entity outstanding
immediately after such merger or consolidation, or
(ii) a merger or consolidation effected to implement a recapitalization
of the Company (or similar transaction) in which no person, entity or group
(other than any employee benefit plan of any of the Company) acquires beneficial
ownership of twenty percent (20%) or more of the combined voting power of the
securities entitled to vote generally in the election of directors of the
Company outstanding immediately after such merger or consolidation; or
(d) Approval by the stockholders of the Company of a plan of
complete liquidation of the Company or an agreement for the sale or other
disposition by the Company of all or substantially all of such Company's assets.
6.4 Qualifying Termination. If Executive's Employment is terminated
within thirty-six (36) months following a Change of Control for any reason other
than retirement, death, and disability or for Cause, such termination shall
constitute a "Qualifying Termination." In the event of a Qualifying Termination,
the Company shall be obligated to make the "Severance Payment" to Executive
provided for in section 6.5 and provide the "Additional Benefits" described in
section 6.6
6.5 Severance Payment.
(a) For purposes of this Agreement, the "Severance Payment"
shall equal 299% of Executive's "Compensation" (as defined below). Executive
shall be entitled to receive the Severance Payment in a cash lump sum within
five (5) calendar days after the later of Executive's Date of Termination or the
date of the Change in Control.
(b) For purposes of this Agreement, Executive's "Compensation"
shall equal the sum of (1) Executive's highest annual salary rate with the
Company within the period starting as of the Effective Date, and ending on
Executive's Date of Termination (the "Employment Period"), plus (2) the "Bonus
Increment." The Bonus Increment shall equal the annualized average of all
bonuses and incentive compensation payments including stock options paid or
payable to Executive during the Employment Period under all of the Company's
bonus and incentive compensation plans or arrangements, if any.
(c) Executive may, in her sole discretion, elect to receive
the Severance Payment in equal annual installments over five (5) years (or such
lesser number of years as Executive may elect). Such installments shall be paid
to Executive on each anniversary of Executive's Date of Termination, beginning
with the first such anniversary and continuing on each such anniversary
thereafter until fully paid. Such election to receive the Severance Payment in
installments may be made and/or revoked by Executive at any time before the
termination of her employment by providing written notice to the Board of such
election. Any such election by Executive to receive the Severance Payment in
installments that has been made and not revoked before Executive's termination
shall, effective the date of such termination, be irrevocable and binding on all
parties hereto.
(d) In the event that at the time of Executive's Qualifying
Termination there is not in effect an election by Executive to receive the
Severance Payment in installments, such Severance Payment shall be paid to
Executive in a single cash lump sum. In the event that Executive has made an
appropriate election to receive the Severance Payment in annual installments,
and Executive becomes entitled to such Severance Payment as provided in this
Agreement, then such Severance Payment, to the extent at any time unpaid and/or
deferred, shall be deemed to bear interest at the base or prime rate in effect
from time to time as publicly announced by Bank of America NT&SA (the "Prime
Rate"). Accrued interest shall be due and payable together with each annual
installment of the Severance Payment.
6.6 Additional Benefits.
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(a) In the event of a Qualifying Termination, the Company
agrees and covenants that Executive and her dependents shall be entitled to
continue to participate in all benefit programs which had been made available to
Executive before the Qualifying Termination including without limitation, any
and all medical insurance, dental insurance, vision insurance, life insurance,
disability insurance, retirement and/or pension plans and other benefit programs
of the Company and/or its affiliates. These programs shall be continued at no
cost to Executive, except to the extent of Executive's income tax payable
thereon because tax rules require the inclusion of the value of such benefits in
Executive's income. The programs shall be continued in the same way and at the
same level as immediately before the Qualifying Termination, and shall continue
for the benefit of Executive for eighteen (18) months (the "Benefit Period"). In
the event that participation in any such plan or program is barred or
unavailable for any reason, the Company shall arrange to provide Executive, at
the expense of the Company, with benefits substantially comparable to those
which she was entitled to receive under such plans and programs as were in
effect immediately prior to the time of the Qualifying Termination. The
continuation of benefits provided for herein shall extend to the dependents of
Executive as permitted by the applicable plans, provided that Executive shall
continue to be responsible for the cost of any and all dependant coverage.
(b) In the event of a Qualifying Termination, Executive or her
successors may, at the expense of the Company, utilize the reasonable services
of accountants and attorneys of her or their choice for assistance in
interpreting and enforcing this Agreement as well as for preparation of her tax
returns for the year of the Qualifying Termination and for each other year all
or any portion of which is included within the Benefit Period.
(c) In the event of a Qualifying Termination, Executive shall
be entitled, at the expense of the Company, to "Automobile Benefits" during the
entire term of the Benefit Period. For purposes hereof, "Automobile Benefits"
shall include a $500 per month allowance to defray automobile expenses and
costs.
(d) In the event any perquisite or benefit enjoyed by
Executive or her dependents is reduced or eliminated within six (6) months
before a Qualifying Termination, then for all purposes of this Agreement, the
perquisite or benefit as was in effect prior to such reduction or elimination
shall be deemed to have been in place immediately prior to the Date of
Termination.
(e) In the event of a Qualifying Termination or Death of the
Employee, all of Executive's unvested stock options and equity-based incentives
shall immediately vest and be fully exercisable.
7. Other Covenants of the Parties.
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7.1 Indemnification for Golden Parachute Excise Tax.
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(a) In the event that it shall be determined that any payment,
benefit or distribution provided, or to be provided, by the Company (or by any
person whose actions result in a Change in Control or any person affiliated with
the Company or such person) to or for the benefit of Executive under the terms
of this Agreement, or under any other agreement, plan or arrangement with the
Company (or with any person whose actions result in a Change in Control or any
person affiliated with the Company or such person), would be subject to any
excise tax imposed pursuant to Section 4999 of the Internal Revenue Code of
1976, as amended, or any comparable provision of state law (an "Excise Tax"),
the Company agrees that it will promptly pay or cause to be paid to Executive,
in addition to any other payments made or required to be made pursuant to the
terms of this Agreement, an additional amount in cash (a "Gross-Up Payment")
equal to the sum of (i) the amount of such Excise Tax plus (ii) all Attributable
Taxes and Penalties. For purposes of this Agreement, "Attributable Taxes and
Penalties" means all taxes, interest and penalties, including, without
limitation, any federal, state and local income taxes and any Excise Taxes,
which become payable by Executive as a result of the receipt of the Gross-Up
Payment or the assessment of any Excise Tax against Executive. It is intended
that under this provision the Company will indemnify Executive in such a manner
that Executive shall not suffer any loss or expense due to the assessment of any
Excise Tax or the reimbursement of Executive for payment of any such Excise Tax.
(b) In determining the amount of any Gross-Up Payment payable
pursuant to Paragraph (i) above, Executive shall be deemed to pay federal income
taxes at the highest marginal rate of federal income taxation in the calendar
year in which the Gross-Up Payment is to be made, and state and local taxes at
the highest marginal rates of taxation for such year in the state and locality
of Executive's residence. For such purposes, federal income taxes shall be
determined net of the maximum reduction in such federal income taxes that could
be obtained from the deduction of such state and local taxes.
(c) Within 30 days after Executive's Date of Termination, a
mutually agreed upon nationally recognized accounting firm (the "Accounting
Firm"), shall make a determination as to whether any Excise Tax should be
reported and paid by Executive for any period or periods by reason of any
payment, benefit or distribution under this Agreement or under any other
agreement, plan or arrangement with the Company (or with any person whose
actions result in a Change in Control or any person affiliated with the Company
or such person). If the Accounting Firm determines that any Excise Tax should be
reported and paid by Executive, the Accounting Firm shall also determine the
amount of such Excise Tax and the amount of the Gross-Up Payment required to be
paid to Executive by the Company with respect to such Excise Tax. In such event,
the Company shall, within five (5) business days after such determination, pay
or cause to be paid to Executive the amount of the Gross-Up Payment with respect
to the Excise Tax as determined by the Accounting Firm, and Executive shall
report and pay the Excise Tax as so determined. If the Accounting Firm
determines that no Excise Tax should be reported and paid by Executive, it shall
furnish Executive with its opinion that there is substantial authority not to
report any Excise Tax, and Executive shall prepare and file her tax returns in
accordance with such advice until such time as the Internal Revenue Service (the
"IRS") or any applicable state taxing authority shall notify Executive that such
manner of reporting is improper. The Company shall be responsible for all fees
and expenses connected with the determinations by the Accounting Firm pursuant
to this Paragraph 7.1.
(d) In the event that Executive is at any time required to pay
any Excise Tax (or any interest or penalties with respect to any Excise Tax) in
addition to any amount determined pursuant to Paragraph 7.1 (c) by reason of any
payment, benefit or distribution under this Agreement or under any other
agreement, plan or arrangement with the Company (or with any person whose
actions result in a Change in Control or any person affiliated with the Company
or such person), within five (5) business days after Executive notifies the
Company of such required additional Excise Tax (or additional interest or
penalties) the Company shall pay or cause to be paid to Executive a Gross-Up
Payment determined with respect to such additional Excise Tax (and any such
additional interest and penalties). In the event that Executive receives any
refund of any Excise Tax with respect to which Executive has previously received
a Gross-Up Payment hereunder, Executive shall promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto).
(e) Executive agrees to notify the Company in a timely manner
in the event of any audit or other proceeding by the IRS or any state taxing
authority in which the IRS or the state taxing authority asserts that any Excise
Tax should be assessed against Executive and to cooperate with the Company (at
the Company's sole cost and expense) in contesting any such proposed assessment
with respect to such Excise Tax (a "Proposed Assessment"). Executive agrees not
to settle any Proposed Assessment without the consent of the Company. If,
however, Executive's tax liability for any year cannot be finally resolved
principally by reason of a failure to settle a Proposed Assessment, Executive
may demand that the Company settle the Proposed Assessment. If the Company does
not settle the Proposed Assessment, or does not consent to allow Executive to
settle the Proposed Assessment, within ten (10) days following such demand, the
Company shall indemnify and hold harmless Executive (i) with respect to any
additional interest and/or penalties that Executive is required to pay by reason
of the delay in finally resolving Executive's tax liability and (ii) with
respect to any taxes, interest and penalties that Executive is required to pay
by reason of any indemnification payment under this Paragraph.
7.2 Non-Exclusivity of Rights. Nothing in this Agreement shall prevent
or limit Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any of its
affiliated companies. Amounts which are vested benefits or which Executive is
otherwise entitled to receive under any plan or program of the Company or any of
its affiliated companies at or subsequent to the date of any termination shall
be payable in accordance with such plan or program except as otherwise provided
herein.
7.3. Intellectual Property Rights.
-----------------------------
(a) Executive shall promptly and fully inform Company of, and
disclose to Company, any and all ideas, concepts, themes, inventions, designs,
creations, improvements and discoveries that she makes during the term of this
Agreement, whether individually or jointly in collaboration with others, which
are, at the time any such item is conceived or reduced to practice, related to
Company's business or to actual or demonstrably anticipated research or
development of Company, or which result from any work performed by Executive for
Company.
(b) Executive agrees that any and all ideas, concepts, themes,
inventions, designs, creations, improvements or discoveries conceived, developed
or written by Executive either individually, or jointly in collaboration with
others, which are related to Company's business, whether patentable or
unpatentable or copyrightable or uncopyrightable, shall belong to and be the
sole and exclusive property of Company.
(c) Executive shall assist Company in obtaining patents or
copyright registration on such intellectual properties an execute all documents
and do all things necessary to enable Company to obtain and enforce full an
exclusive title to such properties which are related to Company's business.
8. Non-Competition. The Employee agrees that she will not, jointly or
collectively as a participant in a partnership, sole proprietorship, corporation
or other entity, or as an operator, investor, shareholder, partner, director,
employee, consultant, manager, advisor or in any other capacity whatsoever,
either directly or indirectly, during the term of this Agreement, do any of the
following: (i) establish or pursue, directly or indirectly, the same or similar
business as that of the Employer wherever pursued by Employer; or (ii) directly
or indirectly request or advise any past, present or future customers or
suppliers of the Employer to withdraw, curtail or cancel any of their business
or other relationships. Further, she agrees that the restrictions contained
herein are reasonable restraints upon the Employee and any violation of the
terms of this Section could have a substantial detrimental effect on Employer.
Employee has carefully considered the nature and extent of the restrictions
imposed hereunder and the rights and remedies conferred upon Employer under the
provisions of this Section, and hereby acknowledges and agrees that same are
reasonable in time and territory, are designed to eliminate competition which
would otherwise be unfair to Employer, do not stifle the Employee's inherent
skill and experience, would not operate as a bar to the Employee's sole means of
support, are fully required to protect the legitimate interest of Employer and
do not confer a benefit upon Employer disproportionate to the detriment of
Employee. Any damages resulting from violation of any of the covenants contained
in this Section will be difficult to ascertain and for that reason agree that
Employer shall be entitled to an injunction from any court of competent
jurisdiction restraining any violation of any or all of this Section, either
directly or indirectly, and such right to injunction shall be in addition to
whatever other remedies Employer may have. The parties acknowledge that this
Section has been called to the parties' attention and the parties understand it
is a material covenant and that without this Section this Agreement, and all
documents executed pursuant hereto, would not have been entered into by
Employer. It is hereby further recognized and agreed that this Section, the
prevailing party shall be entitled to recover any and all reasonable attorneys'
fees and other costs of litigation, through appeals; if any provision of this
Section is held to be unenforceable, such enforcement term of immediately lesser
effect shall be substituted. Employee has had access to certain valuable
information concerning the Employer including, without limitation, contracts,
business plans, customer, employee and supplies lists, trade secrets, financial
performance and prospects, and therefore agrees that any and all such
information, even though it may have been contributed, developed or acquired by
Employee, will become the exclusive property of Employer and Employee will not
directly or indirectly disclose any such information, unless necessary and
pursuant to this Agreement.
The following are exceptions to this Section and shall control: (i) no
confidentiality shall apply to the extent the Employee determines to share such
confidential information with Employee's legal counsel or use same in any
dispute of litigation with Employer, and (ii) this Section shall be null and
void if this Agreement is terminated by Employee other than a Voluntary
Termination by Employee.
9. General Provisions.
------------------
9.1 Gender. Wherever the context shall require, all words herein in the
masculine gender shall be deemed to include the feminine or neuter gender, all
singular words shall include the plural, and all plural shall include the
singular.
9.2 No Assignment. Neither party may assign this Agreement
without the prior written consent of the other.
9.3 Complete Agreement. This Agreement contains the entire agreement of
the parties with respect to the subject matter hereof and supersedes all
previous oral and written agreements and all contemporaneous oral negotiations,
commitments, writings, and understandings.
9.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.5 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Nevada.
9.6 Modifications and Waivers. No waiver or modification of
this Agreement shall be binding unless it is in a writing signed by both parties
hereto.
9.7 Severability. In the event any provision or provisions of this
Agreement is or are to be held invalid, the remaining provisions of this
Agreement shall not be affected thereby.
9.8 Legal Fees. If any legal action, arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of any alleged
dispute, breach or default in connection with this Agreement, the successful or
prevailing party shall be entitled to recover all of its costs incurred in such
action or proceeding, including without limitation its actual attorneys' fees
and disbursements, in addition to any other relief to which it may be entitled.
9.9 Notices. All notices and other communications required or permitted
under this Agreement shall be in writing, served personally on, or mailed by
certified or registered United States mail to, the party to be charged with
receipt hereof. Notices and other communications served by mail shall be deemed
given hereunder seventy-two (72) hours after deposit of such notice or
communication in the United States Post Office as certified or registered mail
with postage prepaid and duly addressed to the receiving party as follows, or at
such other address as such party has designated in a written notice given as
provided herein:
To Company: To Executive:
Samaritan Pharmaceuticals, Inc Xxxxx Xxxxxxx
000 Xxxxxxxxxx Xxxxxx Xxxxx 101 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000 Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000 Xxx Xxxxx, Xxxxxx 00000
9.10 Construction. The language of this Agreement shall be construed
simply and according to its fair meaning, and any indefinite or ambiguous
language shall be construed for the employee and against the company.
9.11 Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or an alleged breach of this Agreement, shall be settled by
arbitration administered by the American Arbitration Association, and judgment
on the award rendered by the arbitrator(s) may be entered in the District Court
in and for Xxxxx County, Nevada. In case of a dispute, any party may commence
arbitration by giving written notice to the others of its desire to do so. Each
party hereto agrees that service of process for an arbitration proceeding will
be deemed completed when a notice of another party's desire to arbitrate is
received by such party. Each party hereby agrees that any such arbitration shall
be held in Las Vegas, Nevada and consents to the jurisdiction of the District
Court in and for Xxxxx County for entering of any judgment. The arbitrator shall
have authority equal to that of a District Court Judge to grant equitable relief
in an action pending in Xxxxx County District Court in which all parties have
appeared. Judgment upon the Arbitrator's award may be entered as if after trial
in accordance with Nevada law. Should any party fail to pay fees as required,
any other party may advance the same and shall be entitled to a judgment from
the arbitrator in the amount of such fees plus interest. Any award issued by the
arbitrator shall bear interest at the judgment rate in effect in the State of
Nevada from the date determined by the arbitrator.
9.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, even though the parties
do not sign the same counterpart.
IN WITNESS WHEREOF the parties hereto do hereby execute and make effective this
Agreement as of the Effective Date.
COMPANY: EXECUTIVE:
By: /s/ Xxxxxxx Xxxxxxxx By:/s/ Xxxxx Xxxxxxx
-------------------- -----------------
Name: Xxxxxxx Xxxxxxxx Name: Xxxxx Xxxxxxx
Title: Director Title: Chief Executive Officer,
President, Chairman of
the Board
By: /s/ Xxxxxx Holden
Name: Xxxxxx Xxxxxx
Title: Director
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Director
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") is made and entered
into as of the date of grant, set forth below, by and between Samaritan
Pharmaceuticals, Inc., a Nevada corporation (the "Company"), and the optionee
named below ("Optionee"). Capitalized terms not defined herein shall have the
meaning ascribed to them in the Samaritan Pharmaceuticals, Inc. 2001 Stock
Incentive Plan (the "Plan").
Optionee: Xxxxx Xxxxxxx
Social Security Number: _______________
Address: 000 Xxxxxxxxxx Xxxxxx Xxxxx Xxx 000
Xxx Xxxxx, XX 00000
Total Option Shares: _______________
Exercise Price per Share: _______________
Date of Grant: _______________
First Vesting Date: _______________
Expiration Date for Exercise of Options:
---------------
(Ten Years from the Date of Grant)
Type of Stock Option:
(Check one): [ ] Incentive Stock Option
[ ] Statutory Stock Option
[ ] Non-Qualified Option
1. Grant of Option. The Company hereby grants to Optionee an option
(the "Option") to purchase the total number of shares of Common Stock of the
Company (Total Option Shares) set forth above (abbreviated as the "Shares") at
the Exercise Price Per Share set forth above (abbreviated as the "Exercise
Price"), subject to all of the terms and conditions of this Agreement and the
Plan. If designated as an Incentive Stock Option above, the Option is intended
to qualify as an "incentive stock option" ("ISO") within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended and any future amendments
to the ("Code").
2. Exercise Price. The Exercise Price, which is not less than the fair
market value per share of Common Stock on the date of grant, as determined by
the Board; provided, however, in the event Optionee is an Employee and owns
stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of its Parent or Subsidiary
corporations immediately before this Option is granted, then said Exercise Price
shall be adjusted to be not less than one hundred ten percent (110%) of the fair
market value per share of Common Stock on the date of grant with the adjustment
to be as determined by the Board.
3. Exercise of Option. This Option shall be exercisable during
its term in accordance with the following:
(i) Vesting
This Option shall not become exercisable as to any of the number of the
Shares as follows (check one):
[ ] Four Year Vesting: Until the date that is one (1) year from the date of
grant of the Option (the "Anniversary Date"). On the Anniversary Date, this
Option may be exercised to the extent of 25% of the Shares. Upon the expiration
of each calendar month from the Anniversary Date, this Option may be exercised
to the extent of the product of (a) the total number of Shares set forth at the
beginning of this Agreement and (b) the fraction the numerator of which is one
(1) and the denominator of which is forty-eight (48) (the "Monthly Vesting
Amount"), plus the shares as to which the right to exercise the Option had
previously accrued but had not been exercised; provided, however, that
notwithstanding any of the above, the 25% exercisable on the Anniversary Date
and the Monthly Vesting Amount with respect to any calendar month shall become
exercisable only if the Employee was an employee of the Company or any
Subsidiary of the Company as of the Anniversary Date and the last day of such
month, respectively. Any time the Optionee is on leave or is absent from
performing services for the Company shall not be counted towards the vesting
period provided herein.
[ ] Alternate Vesting Schedule: As follows:
--------------------------
_______% ______________Date
(ii) Method of Exercise. This Option shall be exercisable by
written notice which shall state the election to exercise the Option, the number
of Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect
to such shares of Common Stock as may be required by the Company. Such written
notice shall be signed by Optionee and shall be delivered in person or by
certified mail to the President, Secretary or Chief Financial Officer of the
Company at the address of the Company. The written notice shall be accompanied
by payment of the exercise price unless otherwise provided herein.
No Shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant provisions
of law and the requirements of any stock exchange upon which the Shares may then
be listed. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares unless otherwise provided by law.
4. Optionee's Representations. By receipt of this Option, by
its execution, and by its exercise in whole or in part, Optionee represents to
the Company that Optionee understands that:
(i) Both this Option and any Shares purchased upon its
exercise are securities, the issuance by the Company of which requires
compliance with Federal and state securities laws;
(ii) These securities are made available to
Optionee only on the condition that Optionee makes the representations
contained in this Section to the Company;
(iii) Optionee has made a reasonable investigation of the
affairs of the Company sufficient to be well informed as to the rights and the
value, if any, of these securities;
(iv) Optionee understands that the securities have not been
registered under the Securities Act of 1933, as amended (the "Act") in reliance
upon one or more specific exemptions contained in the Act, which may include
reliance on Rule 701 promulgated under the Act, if available, or which may
depend upon (a) Optionee's bona fide investment intention in acquiring these
securities; (b) Optionee's intention to hold these securities in compliance with
Federal and state securities laws; (c) Optionee having no present intention of
selling or transferring any part thereof (recognizing that the Option is not
transferable) in violation of applicable Federal and state securities laws; and
(d) there being certain restrictions on transfer of the Shares subject to the
Option;
(v) Optionee understands that the Shares subject to this
Option, in addition to other restrictions on transfer, must be held indefinitely
unless subsequently registered under the Act, or unless an exemption from
registration is available; that Rule 144, the usual exemption from registration,
is only available after the satisfaction of certain holding periods and in the
presence of a public market for the Shares and subject to other provisions; that
there is no certainty that a public market for the Shares will exist, and that
otherwise it will be necessary that the Shares be sold pursuant to another
exemption from registration which may be difficult to satisfy; and
(vi) Optionee understands that the certificate representing
the Shares will bear a legend prohibiting their transfer in the absence of their
registration or the opinion of counsel for the Company that registration is not
required, and a legend prohibiting their transfer in compliance with applicable
state securities laws unless otherwise exempted.
5. Method of Payment. Payment of the purchase price shall be made by
cash, check, promissory notes or other Shares of Common Stock having a fair
market value on the date of surrender equal to the aggregate purchase price of
the Shares being purchased.
6. Termination of Status as an Employee. In the event of termination of
Optionee's continuous status as an Employee for any reason other than death or
disability, The Company will use all means available under the Code to keep the
options designated as an ISO. If the option is unable to keep it designation as
an ISO than option shall automatically convert into a non-qualified stock
option.
7. Disability of Optionee. In the event of termination of Optionee's
continuous status as an Employee as a result of Optionee's disability, The
Company will use all means available under the Code to keep the options
designated as an ISO. If the option is unable to keep it designation as an ISO
than option shall automatically convert into a non-qualified stock option.
8. Death of Optionee. In the event of the death of Optionee, the
Company will use all means available under the Code to keep the options
designated as an ISO. If the option is unable to keep it designation as an ISO
than option shall automatically convert into a non-qualified stock option.
9. Non-Transferability of Option. If the Option is intended to qualify
as an incentive stock option, it may be transferred in any manner allowed under
the Code to keep the options designated as an ISO. If the Option has a
disqualifying disposition or is converted into a non-qualified option, it may be
transferred in any manner without restriction.
10. Term of Option. This Option shall have a term of (10) ten
years from the date of grant of this Option.
11. Severability; Construction. In the event that any provision in this
Option shall be invalid or unenforceable, such provision shall be severable
from, and such invalidity or unenforceability shall not be construed to have any
effect on, the remaining provisions of this Option. This Option shall be
construed as to its fair meaning and not for or against either party.
12. Damages. The parties agree that any violation of this Option (other
than a default in the payment of money) can be compensated for by damages, and
any aggrieved party shall have the right, and is hereby granted the privilege,
of obtaining specific performance of this Option in any court of competent
jurisdiction in the event of any breach hereunder.
13. Governing Law. This Option shall be deemed to be made under
and governed by and construed in accordance with the laws of the State of
Nevada. Jurisdiction for any disputes hereunder shall be a court of competent
jurisdiction solely in Las Vegas, Nevada.
14. Delay. No delay or failure on the part of the Company or the
Optionee in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise by any of them of any right,
power or remedy preclude other or further exercise thereof, or the exercise of
any other right, power or remedy.
15. Other Restrictions. None.
------------------
16. Complete Agreement. This Agreement constitutes the entire agreement
between the parties with respect to its subject matter, and supersedes all other
prior or contemporaneous agreements and understandings both oral or written;
subject, however, that in the event of any conflict between this Agreement and
the Plan, the Plan shall govern. This Agreement may only be amended in a writing
signed by the Company and the Optionee. At the request of the optionee, if there
is any provision that can be change to avoid a disqualifying disposition, the
company shall be obligated to make the change in the agreement.
17. Privileges of Stock Ownership. Participant shall not have
any of the rights of a shareholder with respect to any Shares until Optionee
exercises the Option and pay the Exercise Price.
18. Notices. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated above or to such other address as
such party may designate in writing from time to tome to the Company. All
notices shall be deemed to have been given or delivered upon: personal delivery;
three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1) business day after
transmission by fax.
19. Other Provisions Specifically Applicable to Option.
--------------------------------------------------
(i) "Cashless" Exercise.
Notwithstanding any provisions herein to the contrary, the Holder may, by
providing notice thereof to the Company along with the Warrant Exercise Form,
elect to exercise the Warrant for a number of Warrant Shares determined in
accordance with the following formula:
X = Y- [Y *(A/B)]
Where:
X = The number of Warrant Shares to be issued to the Holder.
Y = The number of Warrant Shares purchasable under this Warrant (at the date of
such exercise).
A = The fair market value of one share of Common Stock (or other security for
which the Warrant is then exercisable at the date of such exercise).
B = Exercise Price (as adjusted to the date of such exercise).
For purposes of this Section, the "fair market value" per share shall be the
closing sale price of the Common Stock for the one Trading Day immediately prior
to the notice of exercise of the Warrant.
(ii) "Reload" Feature.
----------------
Upon an exercise of this Option by the Optionee in accordance with its terms,
the Optionee will be given additional options to purchase additional shares (in
addition to the remaining unexercised options subject to this Option) equal to
the number of shares so purchased (without regard to any cashless exercise
feature) by the exercise with the following to apply: all terms for such
additional Options will be the same as this Option but: the Exercise Price will
be equal to the fair market price of the common stock of the Company as on the
date of the previous option exercise.
(iii) Piggyback Registration Rights.
-----------------------------
Whenever Company proposes to register any Common Stock for Company's own or
others' account under the Securities Act of 1933, as amended, for a public
offering for cash, other than a registration relating to employee or consultant
benefit plans, Company shall give Optionee each prompt written notice of
Company's intent to do so. Upon the written request of such Option holder given
within thirty (30) days after receipt of such notice, Company will use Company's
best efforts to cause to be included in such registration all of the remaining
Shares subject to the Option, and that may become subject to the Option as
additional Options as provided immediately above, (all such Shares being called
"Registrable Securities") that such holder requests to be registered. If Company
is advised in writing in good faith by any managing underwriter of the
securities being offered pursuant to any registration statement that the number
of shares to be sold pursuant to such registration statement is greater than the
number of such shares that can be offered without adversely affecting the
offering, then Company shall reduce pro rata the number of shares offered for
the accounts of holders of Options under the Plan (based upon the number of
shares proposed to be sold pursuant to such registration statement by each such
holder) to a number deemed satisfactory by such managing underwriter. In the
event of such a limitation, shares of persons not having registration rights
will not be included in the registration unless all Registrable Securities
requested to be included in the registration have been included. Optionee shall
cooperate in supplying information if so requested as part of such registration.
Deferred Compensation Election
If the option has a disqualifying disposition under the Code or if the option is
converted into a non-qualified stock option, then the option holder may elect
not to receive the shares when he or she exercises but to have them held by the
company the trust under Samaritan Pharmaceuticals Executive Benefit Plan, i.e.,
the company's rabbi trust.
DATE OF GRANT: ______________________
Samaritan Pharmaceuticals, Inc.
By: _________________________________
CEO, Chairman of the Board
Employment Contract
Amendment 1
The "Effective Date" is amended to read January 1, 2000
Section 4.1 is amended to read:
4.1. Base Salary. Executive's initial salary shall be $360,000 per
annum. This salary level will be reviewed at least annually by the Board, but
will not be reduced without Executive's prior written consent. This annual
salary of $360,000 shall be payable in equal bi-weekly installments before
deductions for employment taxes and other deductions mandated by law. The amount
of unpaid salary may be paid and mandated only upon determination by the
Employee and not by the Employer, at any time, in stock or converted to shares
of Common Stock of the Company. The amount of stock issued shall equal to the
amount due divided by the lower of the following two numbers:
1) the lowest close price of the stock quoted on the exchange or medium where
the stock is trading, for the period for which the salary has been earned
divided by one mines the current discount rate for restricted stock offered by
the company (1- Rdiscount); Or 2) the closing price of the stock quoted on the
exchange or medium where the stock is trading on the date of conversion of cash
into stock
Additionally, prior to the end of each year of employment and commencement of
the next year of employment under this Agreement, the parties agree to mutually
set an increase in the then Annual Salary considering such factors as
performance, cash flow, increases to other members of management, revenues and
other considerations, of not less that 5% of the prior year salary.
/s/ Xxxxx Xxxxxxxx /s/ Xxxxxxx Xxxxxxxx
Xxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx
Director Director
Samaritan Pharmaceuticals, Inc. Samaritan Pharmaceuticals, Inc.
/s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Director
Samaritan Pharmaceuticals, Inc.
