EXHIBIT 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement") entered into this 20th day of
March, 2004 by and between Union Dental Corp, (the "Company") a Florida
corporation whose principal place of business is 0000 Xxxxxxxxxx Xxxxx, Xxxxx
000, Xxxxx Xxxxxxx, Xxxxxxx 00000, and Xx. Xxxxxx X. Xxxxx , whose address is
located at 0000 XX 00xx Xxxxx, Xxxxx Xxxxxxx, Xxxxxxx 00000 (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company has offered the Executive the position as Chairman of
the Board, President and Chief Executive Officer of the Company and the
Executive possesses knowledge and experience which are valuable to the company;
and
WHEREAS, the principal business of the Company is a dental practice
referred to as Xxxxxx X. Xxxxx D.D.S., P.A. (hereinafter referred to as "Green")
and a second business, Direct Dental Services, Inc. ("DDS") which encompasses
the sales and marketing of an exclusive Dental Network for the Communications
Workers of America union ("CWA") and the International Brotherhood of Electrical
Workers union ("IBEW") in eighteen (18) states with the intent of expanding the
concept throughout the United States and into other unions, such as General
Electric and the United Auto Workers.
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and accepted, the
parties hereto agree as follows:
1. Employment. The Company hereby offers to employ Executive, and Executive
accepts such employment, upon the terms and conditions hereinafter set forth.
2. Employment Term. The "Initial Term" means the basic term of this
Agreement, which begins on the date hereof (the "Effective Date") and ends on
the seventh anniversary of this Agreement. Thereafter, Executive's employment
hereunder shall be automatically renewed for successive periods of one (1) year
(each a "Renewal Term"), unless either party hereto shall give written notice to
the other that Executive's employment hereunder shall not be renewed or
continued, as the case may be, not less than ninety (90) days prior to the end
of the then current term of employment. The Initial Term and any Renewal Term
may be terminated pursuant to Section 7 hereof.
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3. Office: Duties of Executive. During the term of the Executive's
employment, the Executive shall serve as Executive Officer and, in so doing,
shall perform normal duties and responsibilities associated with such position,
including, without limitation, working with the Board of Directors to develop
the Company's growth plan and strategic alternatives, developing financing
sources, evaluating the Company's capital structure and recommending any
appropriate changes, serving as liaison with and otherwise managing the Company
and its relationship with members of the Dental Network, and carrying out such
other or different duties as may be assigned him by the Company's Board of
Directors. During the term of this Agreement, Executive shall devote so much of
his business time and attention to the business and affairs of the Company as
he, in his sole discretion, deems appropriate, subject to the general direction,
approval and control of the Board of Directors.
4. Compensation. Except as otherwise provided in this Agreement, the
Company shall compensate Executive in the manner set forth in this Section 4
payable in accordance with the normal payroll practices of the Company for the
duration of the term of this Agreement ("Employment Term").
4.1 Base Salary. For each year during the Employment Term (or, if this
Agreement shall be earlier terminated in accordance the terms of Section 7
hereof, ending on the date of termination of this Agreement), the Company
will pay to Executive and aggregate annual salary equal to the base salary
listed on Exhibit A attached hereto and made a part hereof. The base salary
will be paid in accordance with the normal payroll procedures of the
Company unless otherwise stated in Exhibit A.
4.2 Incentive Bonuses. With the approval of the Board of Directors,
the Company may pay additional increases in the base compensation and may
pay incentive bonuses to Executive.
4.2(a) At the signing of this Agreement, the Executive shall receive
750,000 options (this number being based upon a formula of 3% of the issued
and outstanding shares of stock in the Company currently estimated to be
25,000,000 shares) with an exercise price of $ _________ (at market bid
price as determined by the first quote of the shares as obtained from the
National Quotation Bureau "NQB") exercisable within five (5) years of the
date first mentioned in this Agreement. Fifty (50) percent of these shares
shall be "vested" immediately and the balance of the options shall be
deemed "vested" at the end of the two year term as a Member of the Board of
Directors. The term "vested" shall mean the shares of stock underlying the
options agreement shall be registered by the Company at the first available
opportunity.
4.3 Vacation. Executive shall be entitled to a total of four (4) weeks
of paid vacation per calendar year.
4.4 Other Benefits. Executive shall receive other employment benefits
which are similar to compensation packages comparable to executives of
other companies in similar industries.
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4.4(a) Executive shall receive a fully covered health insurance
policy, including, but not limited to, the coverage of prescription drugs
and medications.
4.4(b) Executive shall receive a life insurance policy fully paid for
by the Company, in the amount of $1.0 million, and, the beneficiary to be
named by the Executive.
4.4(c) The Company shall maintain a key man life insurance policy on
the Executive, in an amount to be determined by the Board of Directors,
fully paid for by the Company, and, inure to the benefit of the Company.
4.4(d) Executive shall receive disability insurance comparable to
other executives of similar companies or be compensated to the equivalent
of a disability insurance policy that would be in effect in case of such
extremes where the Executive is not able to perform his duties.
4.4(e) Executive shall receive a car allowance not to exceed $2,000
per month, which car or cars may be used for either business or personal.
4.4(f) Executive shall be entitled to participate in the Company's
401(k) Retirement Plan.
4.4(g) Executive shall receive days off on regular holidays that are
available to similarly situated employees of the Company and that are at
least equivalent to such benefits currently being received by Executive.
5. Business-Related Expenses. Upon presentation, in accordance with Company
policies, of itemized accounts of his expenditures related to his performance as
an Executive, the Company promptly shall reimburse Executive for all reasonable
and necessary travel expenses and other expenses incurred by Executive on behalf
of the Company in the performance of his duties under this Agreement.
5.1 Executive, when traveling by air, shall travel in Business Class.
5.2 Executive shall be allowed to stay at hotels that are four (4)
stars, but, may choose hotels of greater or lesser status, at his
discretion.
5.3 Executive shall be allowed to rent a luxury car of his choosing to
fit the needs of the travel plans associated with his duties as an
Executive while on business trips.
5.4 Executive shall be allowed to dine at exclusive restaurants, as
the need arises, at his discretion, in order to properly entertain business
associates.
5.5 For accounting purposes, and, to eliminate part of the procedure
of expense account reports, Executive shall be issued a Company credit card
to be used for business related expenses, where the billing will be charged
directly to the Company.
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6. Covenants.
6.1 Proprietary Information. In performance of services under this
Agreement, Executive may have access to:
6.1(a) information which derives economic value, actual or potential,
from not being generally known to, and not being readily ascertainable by
proper means by, other persons who can obtain economic value from its
disclosure or use, and is the subject of efforts that are reasonable under
the circumstance to maintain its secrecy (hereinafter "Trade Secrets" or
"Trade Secret"); and
6.1(b) information which does not rise to the level of Trade Secret
but is valuable to the Company and provided in confidence to Executive
(hereinafter "Confidential Information"). Executive acknowledges and agrees
with respect to Trade Secrets and Confidential Information provided to or
obtained by Executive (hereinafter collectively the "Proprietary
Information"):
6.1(b) (i) the Proprietary Information is and shall remain the
exclusive property of the Company; and
6.1(b) (ii) to use the Proprietary Information exclusively for the
purpose of fulfilling the obligations of this Agreement; and
6.1(b) (iii) to return the Proprietary Information, and any copies
thereof, in his possession or under his control, to the Company upon
request of the Company, or expiration or termination of this Agreement for
any reason; and
6.1(b) (iv) to hold the Proprietary Information in confidence and not
copy, publish or disclose to others or allow any other party to copy,
publish or disclose to others in any form, any Proprietary Information
without the prior written approval of an authorized representative of the
Board of Directors.
The obligations and restrictions set forth in this Section 6.1 shall
survive the expiration or termination of this Agreement, for any reason,
and shall remain in full force and effect as follows:
6.1(b) (x) as to Trade Secrets, indefinitely, and
6.1(b) (y) as to Confidential Information, for a period of two (2)
years after the expiration or termination of this Agreement for any reason.
The confidentiality, property, and proprietary rights protections available
in this Agreement are in addition to, and not exclusive of, any and all other
corporate rights, including those provided under copyright, corporate officer or
director fiduciary duties, and trade secret and confidential information laws.
The obligations set forth in this Section 6.1 shall not apply or shall terminate
with respect to any particular portion of the
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Proprietary Information which (i) was in Executive's possession, free of any
obligation of confidence, prior to his receipt from the Company, (ii) Executive
establishes the Proprietary Information is already in the public domain at the
time the Company communicates it to the Executive, or become available to the
public through no breach of this Agreement by Executive, or (iii) Executive
establishes that the Proprietary Information was received by Executive
independently and in good faith from a third party lawfully in possession
thereof and has no obligation to keep such information confidential.
6.2 Ownership of Property. Executive agrees and acknowledges that all works
of authorship and inventions, including but not limited to products, goods,
know-how, Trade Secrets and Confidential Information, and any revisions thereof,
in any form and in whatever stage of creation or development, arising out of or
resulting from, or in connection with, the services provided by Executive to the
Company under this Agreement (collectively the "Property") are works made for
hire and shall be the sole and exclusive property of the Company. Executive
agrees to execute such documents as the Company may reasonably request for the
purpose of effectuating the rights of the Company herein.
6.3 Warranty and Absence of Conflict. Executive warrants to the Company
that Executive is not under any other contract or agreement that precludes
Executive from remaining as an employee of the Company or performing services as
provided in this Agreement.
6.4 Non-Solicitation. Executive covenants and agrees that during his
employment with the Company, and for a period of one (1) year following the date
that his employment is terminated for any reason whatsoever, he will not on
behalf of any person, firm, corporation or entity solicit or accept business
from customers of the Company, including actively-sought prospective customers,
with whom he had material contact during the course of his employment with the
Company during the two (2) year period prior to Executive's termination of
employment for the purpose of providing or selling products or services that are
competitive with those provided by Company in connection with the Business.
6.5 Non Competition. Executive covenants and agrees that during his
employment with the Company and for a period of one (1) year following the date
that his employment is terminated for any reason whatsoever, he will not, within
the Business Area (defined below), directly or indirectly, on his own behalf or
in the service or on behalf of others, engage in any business which is the same
or essentially the same as the business of the Company (the "Business"), as a
manager, supervisor, administrator, owner, salesman, or in another capacity
which involves duties, and responsibilities similar in any way to those
undertaken for the Company herein.
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6.6 Certain Definitions and Exclusions.
6.6(a) "Business Area" means the geographic areas located within the
eighteen (18) state dental networks under contract, operated and maintained
by the Company.
6.6(b) The Company and Executive specifically acknowledge that
Executive shall not be prohibited from entering into any transaction
pursuant to which Executive (a) obtains voting or management control of an
institution which either engages in the business of discount dental
services or funds or invests in companies or businesses engaged in the
business of discount dental services or funds or invests in companies or
businesses engaged in the business of discount dental services or (b)
invests in or obtains voting or management control of any entity which
discounts dental services as an ancillary activity to such entity's normal
business activities as long as these business activities are not engaged in
marketing or selling of dental services or creating dental networks for
unions.
6.7 Non-Interference. Executive covenants and agrees that during his
employment with the Company and for a period of two (2) years following the
date that his employment agreement is terminated for any reason whatsoever,
he will not, directly or indirectly, on his own behalf or in the service or
on behalf of others, call upon, solicit, recruit, or hire away or assist
others in calling upon, soliciting, recruiting or hiring away, any person
who is or was, during the two (2) year period prior to Executive's
termination of employment, an employee of the Company or of any Member of
the Company in any attempt to have such person work in any other firm,
association, corporation or entity engaged in a business substantially
similar to the Business.
6.8 Injunctive Relief. Executive acknowledges and agrees that the
remedy at law for any such breach of this Section 6 will be inadequate and
that in the event of such breach the Company will suffer irreparable
damage; accordingly, the Company shall be entitled to temporary and
permanent injunctive relief in the event of breach without the necessity of
proving monetary damages.
6.9 Indemnification Defense. Executive shall indemnify the Company
from and against any and all actions, suits, proceedings, liabilities,
damages, losses, costs and expenses (including attorneys' and experts'
fees) arising out of or in connection with any breach or threatened breach
by the Executive of any one or more provisions of this Agreement. The
existence of any claim, demand, action or cause of action of the Executive
against the Company shall not constitute a defense to the enforcement by
the Company of any of the covenants or agreements herein.
7. Termination.
7.1 General. This Agreement may be terminated prior to the expiration
of the Initial Term or any Renewal Term by any of the following events:
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7.1(a) mutual written agreement expressed in a single document signed
by both the Company and Executive;
7.1(b) voluntary written resignation by Executive other than for Good
Reason;
7.1(c) death of Executive;
7.1(d) disability of Executive;
7.1(e) termination by the Company for any reason other than Cause (as
defined below); or
7.1(f) termination by the Company for one of the following reasons
("Cause"): (i) an act by Executive of fraud or misappropriation; (ii)
Executive's willful breach of any agreement or covenant of this Agreement;
(iii) criminal conduct of Executive which results in a felony conviction of
Executive with respect to which all opportunities for appeal have been
expired; or (iv) Executive's recurring gross negligence or continuing
willful failure of Executive to perform his duties under this Agreement if
such failure is not cured within ten (10) days after notice from the
Company thereof.
7.2 Compensation Through Date of Termination. Upon termination for any
of the foregoing reasons, Executive shall continue to render his services
and shall be paid his regular compensation and benefits up to the date of
termination. Severance payment hereunder is in addition to the regular
compensation and benefits which Executive shall receive up to the date of
termination.
7.3 Severance and Liquidated Damages. If this Agreement is terminated
by the Company pursuant to Section 7.1(e), the Company shall pay to the
Executive a severance and liquidated damages payment equal to Executive's
then base salary under Section 4.1 through the end of the Initial Term or
the Renewal Term then in effect, as the case may be, pursuant to the normal
payroll practices of the Company. Otherwise, the Company shall have no
obligation to pay Executive any form of severance or other payment upon
termination or expiration of this Agreement by the Company or the
Executive. Expiration of the Initial Term of this Agreement shall not be
deemed a termination pursuant to Section 7.1(e). Executive agrees that such
payment shall not constitute liquidated damages for any alleged or actual
breach by the Company under this Agreement or the Company's Operating
Agreement and agrees that, upon receipt of such severance liquidated
damages payment, he shall release the Company and all other persons from
any and all claims arising out of alleged or actual breaches of this
Agreement or the Operating Agreement.
7.4 Confidentiality of Cause Notice. Executive agrees that in the
event he receives written notice of termination with cause, Executive shall
treat the contents of said notice as privileged and Executive shall have no
action against the
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Company or any of its officers, agents, or employees due to the contents of
said notice unless the contents are intentionally false and malicious.
8. Miscellaneous.
8.1 Severability. In the event that any provision or portion thereof
of this Agreement is declared invalid, void or unenforceable by a court of
competent jurisdiction, the remaining provisions or portions thereof shall
nevertheless continue in full force and effect without being impaired or
invalidated in any way or to any extent.
8.2 Waiver of Breach. Failure or delay of either party to insist upon
compliance with any provision hereof shall not operate as, and is not to be
construed as, a waiver or amendment of such provision. Any express waiver
of any provision of this Agreement shall not operate and is not to be
construed as a waiver of any subsequent breach, whether occurring under
similar or dissimilar circumstances.
8.3 Notice. All notices and other communications required or permitted
to be given by this Agreement shall be in writing and shall be given and
shall be deemed received if and when either hand delivered and a signed
receipt is given therefore or mailed by registered or certified United
States mail, postage-prepaid, and if to the Company, to:
Union Dental Corp.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxx Xxxxxxx, XX 00000
Or, if to Executive, to:
Xx. Xxxxxx X. Xxxxx
c/o Xxxxxx X. Xxxxx, Esq.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxx Xxxxxxx, XX 00000
Or at such other address as either party hereto shall notify the other of
in writing.
8.4 Entire Agreement. This Agreement supersedes any and all prior
agreements between the parties hereto, and constitutes the entire agreement
and understanding by and between Executive and the Company with respect to
the Employment of Executive and no representations, promises, agreements or
understandings, written or oral relating to the employment of Executive by
the Company not contained or referenced herein shall be of any force or
effect.
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8.5 Amendment. This Agreement may be amended at any time by mutual
consent of the parties hereto, with any such amendment to be invalid unless
in writing and signed by the Company and Executive.
8.6 Benefit. This Agreement, together with any amendments hereto,
shall be binding upon and shall inure to the benefit of the parties hereto
and their respective successors, assigns, heirs and personal
representatives, except that the rights and benefits of either of the
parties under this Agreement may not be assigned without the prior written
consent of the other party.
8.7 Withholding. Any payments provided for herein shall be reduced by
any amounts required to be withheld by the Company from time to time under
applicable federal, state or local income or employment tax laws or similar
statutes or other provisions of law then in effect.
8.8 Arbitration. In the event of any dispute between the parties, such
dispute shall be resolved by arbitration in accordance with the rules of
the American Arbitration Association, with costs and reasonable attorney
fees to be assessed against the non-prevailing party.
8.9 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original but both of which together shall
constitute one and the same Agreement.
8.10 Governing Law. This Agreement is being made in the State of
Florida and shall be construed and enforced in accordance with the laws of
that state.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above...
EXECUTIVE UNION DENTAL CORP.
/s/ Xx. Xxxxxx X. Xxxxx /s/ Xx. Xxxxxx X. Xxxxx
------------------------ -------------------------
Xx. Xxxxxx X. Xxxxx Xx. Xxxxxx X. Xxxxx, President
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EXHIBIT A
Base Salary First Year: $225,000
Base Salary Second Year: $125,000
Base Salary Third Year: $185,500
Base Salary Fourth Year: $196,630
Base Salary Fifth Year: $208,427
Base Salary Sixth Year: $220,932
Base Salary Seventh Year: $234,187
Bonus: In addition to the options listed in Section four (4) of this Agreement,
the Executive shall be granted the following Incentive Bonuses under the
following terms and conditions:
1. If the Company should increase gross revenues to $3.0 million in any calendar
year, then the Executive shall receive 332,500 options (this number is currently
being based upon a formula of .0133% of the issued and outstanding shares of
stock, totaling 25,000,000 shares in the Company) with an exercise price of $
_________ (at market bid price as determined by the quote of the shares at the
close of business the day the options were issued by the National Quotation
Bureau "NQB") and exercisable within five (5) years from the date such options
are issued. All of these shares shall be "vested" immediately. The term "vested"
shall mean the shares of stock underlying the options agreement shall be
registered by the Company at the first available opportunity.
2. If the Company should increase gross revenues to $4.0 million in any calendar
year, then the Executive shall receive 332,500 options (this number is currently
being based upon a formula of .0133% of the issued and outstanding shares of
stock, totaling 25,000,000 shares in the Company) with an exercise price of $
_________ (at market bid price as determined by the quote of the shares at the
close of business the day the options were issued by the National Quotation
Bureau "NQB") and exercisable within five (5) years from the date such options
are issued. All of these shares shall be "vested" immediately. The term "vested"
shall mean the shares of stock underlying the options agreement shall be
registered by the Company at the first available opportunity.
3. If the Company should increase gross revenues to $5.0 million in any calendar
year, then the Executive shall receive 332,500 options (this number is currently
being based upon a formula of .0133% of the issued and outstanding shares of
stock, totaling 25,000,000 shares in the Company) with an exercise price of $
_________ (at market bid price as determined by the quote of the shares at the
close of business the day the options were issued by the Quotation Bureau "NQB")
and exercisable within five (5) years from the date such options are issued. All
of these shares shall be "vested" immediately. The term "vested" shall mean the
shares of stock underlying the options agreement shall be registered by the
Company at the first available opportunity.
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