EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS EMPLOYMENT AGREEMENT (this
“Agreement”) is made effective as of this 1st day of
January, 2008 (the “Effective Date”), by and between IR BioSciences Holdings,
Inc., a Delaware corporation (the “Company”), and Xxxx Xxxxxxxx, an individual
(“Employee”), with reference to the following facts:
RECITALS
WHEREAS, the Company desires that
Employee be employed as Chief Financial Officer of the Company; and
WHEREAS, Employee is willing to be
employed by the Company and provide services to the Company under the terms and
conditions herein stated.
NOW, THEREFORE, in consideration of
the mutual covenants and agreements hereinafter contained, and for other good
and valuable consideration, it is hereby agreed by and between the parties
hereto as follows:
AGREEMENT
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1.
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Employment, Services,
and Duties
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1.1
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Employment. The
Company hereby employs Employee as Chief Financial Officer of the Company
and Employee hereby accepts such employment as of the Effective Date upon
the terms, covenants and conditions set forth herein. Employee
shall render his/her services to the Company by and subject to the
instructions and directions of the Company’s President and Chief Executive
Officer to whom Employee shall directly
report.
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1.2
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Duties. Employee
shall perform all duties assigned to him/her by the Company’s President
and Chief Executive Officer to the best of his/her ability and in a manner
satisfactory to the Company.
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1.3
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Time and
Efforts. Employee shall devote his/her full-time
efforts, attention, and energies to the business of the
Company. Notwithstanding the foregoing, Employee may perform
services for other persons, businesses and organizations, provided that
the performance of such services does not interfere and is not
inconsistent with the Employee’s performance of his/her duties and
obligations under this Agreement, including without limitation, the
Employee’s duties and obligations under Section 6 of this
Agreement.
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2.
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Term
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The term
of employment under this Agreement (“Term of Employment”) shall commence on the
Effective Date and, subject to the provisions of Section 4 below, shall continue
for two years.
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3.
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Compensation
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As the
total consideration for Employee’s services rendered hereunder, Employee shall
be entitled to the following:
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3.1
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Base
Salary. A salary of $130,000 for the first 12 months of
full-time employment (the “First Year Salary”). A salary of
$140,000 in the second year (the “Second Year Salary and collectively with
the First Year Salary and the Second Year Salary, the “Base
Salary”). The Base Salary shall be payable in regular
installments in accordance with the customary payroll practices of the
Company. Employee’s Base Salary shall be subject to such
payroll deductions as required by law or as appropriate under the
Company’s payroll deduction
procedures.
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3.2
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Common
Stock. None.
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3.3
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Bonus. Employee
shall be entitled to a discretionary bonus pursuant to those terms set
forth in Exhibit
A hereto.
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3.4
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Expenses. During
the Term of Employment, Employee is entitled to reimbursement for
reasonable and necessary business expenses, per Company policy, incurred
by Employee in connection with the performance of Employee’s duties
hereunder provided that (a) such expenses are ordinary and necessary
expenses incurred on behalf of the Company, and (b) Employee provides the
Company with itemized accounts, receipts and other documentation for such
expenses, to be reviewed by the Company’s C.E.O., as are reasonably
required by the Company.
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3.5
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Vacation. Employee
shall be entitled to three weeks vacation time each year during the first
and second years of the Term of Employment without loss of compensation
during the Term of Employment. Employee’s vacation shall be
governed by the Company’s usual policies applicable to all
Employees.
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3.6
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Fringe
Benefits. Employee shall be entitled to participate in
or receive benefits under any employee benefit plan or other arrangement
made available by the Company to its executive personnel, subject to and
on a basis consistent with the terms, conditions and overall
administration of such plans and
arrangements.
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4.
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Termination
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Employee’s
employment shall terminate prior to the expiration of the Term of Employment set
forth in Section 2 above upon the happening of the following:
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4.1
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Termination For
Cause. The Company may terminate this Agreement for
Cause. For purposes of this Agreement, “Cause” shall
mean:
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(a)
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a
material act of dishonesty in connection with the Employee’s
responsibilities as an employee of the
Company;
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(b)
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Employee’s
conviction of, or plea of nolo contendere to, a felony or a crime
involving moral turpitude;
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(c)
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Employee’s
gross misconduct which has a material adverse effect on the Company;
or
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(d)
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Employee’s
consistent and willful failure to perform his/her employment duties where
such failure is not cured within 30 days after written notice to Employee
by the Company.
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Any
termination for Cause shall be made by written notice to the Employee, which
shall set forth in reasonable detail all acts or omissions upon which the
Company is relying for the termination.
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4.2
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Termination Without
Cause. The Company may terminate the employment of
Employee and all of the Company’s obligations hereunder (except as
hereinafter provided) at any time and for any reason or for no reason
during the Term of Employment without Cause by giving Employee written
notice of such termination, to be effective 15 days following the giving
of such written notice.
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4.3
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Termination Due to
Disability or Death, Employee’s employment
hereunder:
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(a)
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May
be terminated by the Company upon 15 days’ notice to Employee in the event
that the Company in good faith determines that Employee has been unable to
satisfactorily perform his/her duties under this Agreement for an
aggregate of 90 days within any 12-month period, or can reasonably be
expected to be unable to do so for such period, as the result of
Employee’s disability, and within 15 days of receipt of such notice,
Employee shall not have returned to the full-time, continuing performance
of his/her duties hereunder, and
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(b)
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Will
terminate immediately upon the death of
Employee.
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For
purposes of this Section 4.3, the Employee shall be considered disabled or to be
suffering from a disability if the Employee is unable, after any reasonable
accommodations required by the Americans with Disabilities Act or any applicable
state law, to perform the essential functions of his position because of a
physical or mental impairment. In the absence of agreement between
Company and the Employee, whether the Employee is disabled or suffering from a
disability (and the date as of which Employee became disabled) will be
determined by a licensed physician selected by Company. If a licensed
physician selected by the Employee disagrees with the determination of the
physician selected by Company, the two (2) physicians shall select a third
physician. The decision of the third physician concerning the
Employee’s disability then shall be binding and conclusive on all interested
parties.
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4.4
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The
Employee shall at all times have the right, by written notice not less
than thirty (30) days prior to the termination date, to terminate the Term
of Employment.
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5.
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Effect of
Termination
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5.1
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Termination For
Cause. In the event that Employee’s employment is
terminated pursuant to Sections 4.1 above, the Company shall pay to
Employee, or his/her representatives, on the date of termination of
employment (the “Termination Date”), in satisfaction in full for all of
its obligations hereunder, the
following:
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(a)
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Two
months salary and payment for any accrued vacation provided for in Section
3.5, in each case computed on a pro rata basis to the Termination Date;
and
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(b)
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Any
expense reimbursements due and owing to Employee as of the Termination
Date.
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5.2
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Termination For Death
or Disability. In the event Employee’s employment is
terminated pursuant to Section 4.3, the Company shall pay to Employee, or
his/her representatives, on the Termination Date in
satisfaction in full for all of its obligations hereunder, the
following:
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(a)
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in
the case of termination due to death, payment for any accrued vacation
provided for in Section 3.5, in each case computed on a pro rata basis to
the Termination Date; and
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(b)
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in
the case of termination due to disability, two months salary and payment
for any accrued vacation provided for in Section 3.5, in each case
computed on a pro rata basis to the Termination Date;
and
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(c)
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in
the case of termination due to either death or disability, any unpaid Base
Salary and Bonus and expense reimbursements due and owing to Employee as
of the Termination Date.
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5.3
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Termination Without
Cause or a Constructive Termination. In the event
Employee’s employment is terminated pursuant to Section 4.2 or in the
event a Constructive Termination occurs as Constructive Termination is
defined in the Change-of-Control Agreement by and between the Company and
Employee of even date herewith (the “Change-of-Control Agreement”), the
Company shall pay to Employee, his/her representatives, on the Termination
Date in satisfaction in full for all of its obligations hereunder, the
following:
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(a)
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the
remainder of the salary for the year or six months salary, whichever is
greater and payment for any accrued vacation provided for in Section 3.5,
in each case computed on a pro rata basis to the Termination Date;
and
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(b)
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any
unpaid Base Salary and Bonus and expense reimbursements due and owing to
Employee as of the Termination
Date.
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5.4
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Termination by
Employee. In the event Employee’s employment is
terminated pursuant to Section 4.4 and such termination of employment is
not a Constructive Termination as defined in the Change-of-Control
Agreement, the Company shall pay to Employee on the Termination Date in
satisfaction in full of all of its obligations
hereunder:
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(a)
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unpaid
Base Salary and Bonus and expense reimbursements due and owing to Employee
as of the Termination Date; and
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(b)
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any
accrued vacation provided for in Section 3.5, computed on a pro rata basis
to the Termination Date.
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6.
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Non-Competition;
Confidentiality;
Non-Solicitation
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6.1
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Covenant Not to
Compete. During the Term of Employment, neither Employee
nor any affiliate of Employee, shall compete in any manner, directly or
indirectly, with the business of the Company and/or its
affiliates (that is, the business of developing, manufacturing, marketing
or selling products or services similar to those of the Company and/or its
affiliates), or own, manage, operate, control, participate or have any
interest in or be connected in any manner with the ownership or control of
any business developing, manufacturing, marketing or selling products or
services similar to those of the Company and/or its
affiliates. As used in this Agreement, an “affiliate” of
Employee is any spouse, parent, child, or sibling of Employee, or any
corporation, partnership, association or their business entity which
directly or indirectly is controlled or can have its acts affected by
Employee or in which Employee has an investment. Nothing
contained in this Agreement shall be deemed to preclude Employee from
purchasing or owning, directly or beneficially, as a passive investment,
less than five percent (5%) of any class of publicly traded securities of
any corporation so long as Employee does not actively participate in or
control, directly or indirectly, any investment or other decisions with
respect to such corporation.
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6.2
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Confidentiality and
Return of Company Documents. Employee recognizes and
acknowledges that by virtue of his/her employment with the Company, he/she
will have access to certain trade secret and confidential information of
the Company and that such information constitutes valuable, special and
unique property of the Company, and derives economic value because it is
not generally known to the public or to others who could benefit from its
disclosure or use (“Trade Secrets”). Trade Secrets include, but
are not limited to, the following:
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(a)
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customer
and contact information such as customer lists and other information
concerning particular needs, problems, likes or dislikes of the Company’s
customers and contacts;
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(b)
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the
identities of the Company’s customers and
contacts;
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(c)
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price
information, such as price lists, the contents of bids, and other
information concerning costs or
profits;
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(d)
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technical
information, such as formulae, know-how, computer programs, software,
source and object codes, secret processes or machines, inventions and
research projects, documentation, or other methods or
processes;
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(e)
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business
information relating to costs, profits, sales, markets, suppliers, plans
for further development, market studies or
research projects;
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(f)
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personnel
or a compilation of data concerning the Company’s employees and
independent contractors; and
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(g)
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any
other information valuable because of it private or confidential
nature.
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Employee
agrees that during the term of employment, and for three years thereafter,
he/she will not reproduce, copy or disclose the Company’s Trade Secrets and
confidential business information to any person, firm, corporation, association
or other entity for any reason or purposes whatsoever, nor will Employee advise,
discuss or in any way assist any other person or firm (including customers or
former customers of the Company) in obtaining or learning about the Company’s
Trade Secrets. Employee covenants and acknowledges that upon
separation from employment with the Company, he/she shall immediately surrender
to the Company all of the Company’s Trade Secrets and any and all such
documents, materials or other tangible items pertaining to these Trade Secrets
that he/she may possess and that such Trade Secrets shall be and remain the sole
property of the Company. Employee agrees that if he/she is in doubt
as to whether any information, material, or document is a Trade Secret or is
confidential, he/she will contact the board of directors of the Company before
disclosing or using such information for any purpose other than in furtherance
of Employee’s duties as an employee of the Company. Employee agrees
that it will not work for a company competing directly with the Company during
the term of his/her employment with the Company under this
Agreement.
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6.3
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Solicitation of the
Company’s Employees or Customers. Employee agrees that
at any time during the term of his/her employment and for three (3) years
after that term he/she shall not solicit, directly or indirectly, any
employees of the Company to leave employment by the Company to work for or
with Employee or any competitor of Company nor solicit any of the
Company’s customers or potential customers who were solicited by the
Company within a twelve (12) month period immediately prior to the
termination of Employee’s
engagement.
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6.4
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Survival of
Confidentiality and Non-Solicitation. The requirements
and covenants of this Section 6.2 and 6.3 shall survive and continue after
the Term of Employment. Employee recognizes and agrees that
violation or threatened violation of any provision contained in this
Section 6 will cause irreparable damage or injury to the Company and that
the Company’s remedies at law for any breach of this Section 6 may not be
adequate, and the exact amount of the Company’s damages in the event of
such breach may be impossible to ascertain. Therefore, the
Company shall be entitled, as a matter of right, without further notice
and without the necessity of posting bond thereof, to injunctive and other
equitable relief restraining any threatened or further violation of this
Section. The Company’s right to an injunction shall be in
addition to, and not in limitation of, any and other rights and remedies
it may have against Employee, including, but not limited to, the recovery
of damages.
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7.
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Notification to New
Employer.
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If
Employee leaves the employ of the Company, Employee consents to the Company’s
notification to any new employer of Employee’s and Company’s rights and
obligations under this Agreement.
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8.
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Severability
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Should
any term, provision, covenant or condition or this Agreement be held to be void
or invalid, the same shall not affect any other term, provision, covenant or
condition of this Agreement, but such remainder shall continue in full force and
effect as though each such voided term, provision, covenant or condition is not
contained herein.
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9.
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Governing Law and
Submission to Jurisdiction
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This
Agreement shall be governed by and construed in accordance with the laws of the
State of Arizona. Each of the parties submits to the exclusive
jurisdiction of any state or federal court sitting in Phoenix, Arizona in any
action or proceeding arising out of or relating to this Agreement and further
agrees that all claims in respect of the action or proceeding may be heard and
determined in any such court and agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court. Each
party agrees that a final judgment in any action or proceeding so brought shall
be conclusive and may be enforced by suit on the judgment or in any other manner
so provided by law.
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10.
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Binding
Agreement
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This
Agreement shall inure to the benefit of and shall be binding upon the Company,
its successors and assigns.
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11.
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Captions
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The
Section captions herein are inserted only as a matter of convenience and
reference and in no way define, limit or describe the scope of this Agreement or
the intent of any provisions hereof.
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12.
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Entire
Agreement
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This
Agreement (along with the Change-of-Control Agreement) contains the entire
agreement of the parties relating to the subject matter hereof, and the parties
hereto have made no agreements, representations or warranties relating to the
subject matter of this Agreement that are not set forth otherwise
herein. This Agreement supersedes any and all prior agreements,
written or oral, with the Company. Any such prior agreements are
hereby terminated and of no further effect and Employee, by the execution
hereof, agrees that any compensation provided for under any such prior
agreement(s) is specifically superseded and replaced by the provision of this
Agreement. No modification of this Agreement shall be valid unless
made by the unanimous written consent of the board of directors of the
Company. The parties hereto agree that in no event shall an oral
modification of this Agreement be enforceable or valid.
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13.
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Notice
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All
notices and other communications under this Agreement shall be in writing
(including, without limitation, telegraphic, telex, telecopy or cable
communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered
by hand or by nationally recognized courier service guaranteeing overnight
delivery to a party at the following address (or to such other address as such
party may have specified by notice given to the other party pursuant to this
provision):
If to the
Company:
IR
BioSciences Holdings, Inc. BioSciences, Inc.
0000 X.
Xxx xx Xxxxxxx, Xxxxx # 000
Xxxxxxxxxx,
XX 00000
Attention: Xxxxxxx
X. Xxxxxxx
With a
copy to:
Xxxxxxxxxxx
& Lockhart, Nicholson, Xxxxxx LLP
00000
Xxxxx Xxxxxx Xxxx., 0xx
Xxxxx
Xxx
Xxxxxxx, XX 00000
Attention: Xxxxxx
X. Xxxxxxx, Esq.
If to
Employee:
Xxxx
Xxxxxxxx
____________________________
____________________________
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14.
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Attorney’s
Fees
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In the
event that any party shall bring an action, reference, arbitration or proceeding
in connection with the performance, breach or interpretation hereof, then the
prevailing party in such action, reference, arbitration or proceeding as
determined by the court or other body having jurisdiction shall be entitled to
recover from the losing party all reasonable costs and expenses of such action,
reference, arbitration or proceeding, including reasonable attorneys’ fees,
court costs, costs of investigation, expert witness fees and other costs
reasonably related to such proceeding.
IN
WITNESS WHEREOF, this Agreement is executed as of the day and year first above
written.
“COMPANY”
IR
BIOSCIENCES HOLDINGS, INC.
a Delaware corporation
By: /s/ Xxxxxxxx X.
Xxxxxxx
Xxxxxxxx X. Xxxxxxx,
Secretary
By: /s/ Xxxxxxx X.
Xxxxxxx
Xxxxxxx X. Xxxxxxx, CEO
And
“EMPLOYEE”
/s/ Xxxx
Xxxxxxxx
Xxxx Xxxxxxxx
Exhibit
A
Discretionary
Award
In
addition to Base Salary, the Employee shall be eligible to receive a quarterly
discretionary award based upon the Employee’s and the Company’s performance for
the preceding quarter of the Company’s fiscal year. Such
discretionary award shall be in the form of Stock Options under the Company’s
2003 Stock Option, Deferred Stock and Restricted Stock Plan (the “Stock
Option”).
Additionally, the Employee shall be
eligible to receive a quarterly grant of a five-year option to
purchase up to 10,000
(ten thousand) shares of the Company’s Common Stock with an exercise
price equal to 85% of the fair market value of the Company’s Common Stock on the
date such option is issued (the “Options”). The amount of Stock
Options constituting such grant shall be determined by the
Compensation Committee of the Board of Directors in its sole
discretion. Such grant shall be made as of the last day of the
applicable quarter provided that Employee is actively employed by the Company on
such date.
