Exhibit 12(a)
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AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is made
and entered into this 25th day of November, 2005 between Xx. Xxxx Gurel
("Executive") and DuraVest, Inc., a Florida corporation ("Company") (Executive
and Company are sometimes hereinafter "Party" or "Parties").
RECITALS
WHEREAS, the Executive and the Company previously entered into an
employment agreement dated as of September 1, 2005 (the "Prior Employment
Agreement"); and
WHEREAS, the Executive has successfully completed the initial trial period
to the satisfaction of all parties; to wit: the Executive has executed all
necessary operations faithfully and promptly, the Executive has outlined a broad
vision and mission for the Company, the Executive has substantially updated the
Company's website to include, but not limited to, this expanded, enhanced
vision, the Executive has successfully managed the relationships with the
Company's subsidiary Estracure, the Executive has effectively participated as a
Board member of the Company's subsidiary Estracure, the Executive has
effectively implemented a comprehensive public relations program advancing the
Company's interests, the Executive has successfully led investor meetings in the
U.S. and Europe, the Executive has made extensive contacts with potential
investors worldwide for the purposes of raising capital for the Company, the
Executive has effectively represented the Company in meetings with the press,
the Executive has initiated discussions for potential consummation of the
reverse takeover of the Company's subsidiary Estracure, the Executive has
implemented the initial phases of the Company's acquisition of the BMTS Group,
the Executive has faithfully and fully kept the Board of Directors and the
controlling shareholders informed of all significant developments and the
Executive has successfully presided over a substantial share price increase
during the initial trial period, and
WHEREAS, the Company desires to employ the Executive as its full-time
President and Chief Executive Officer to manage the operations of the Company
under the supervision of its Board of Directors and to amend and restate the
terms of the Prior Employment Agreement with respect to the Full Term Employment
contemplated by the Prior Employment Agreement; and
WHEREAS, the Executive desires to accept this employment on terms and
conditions acceptable to the Parties; and
WHEREAS, the Parties desire to enter into the Agreement to set forth the
terms and conditions of the Executive's employment by the Company, both on the
initial trial basis and thereafter:
NOW THEREFORE, in consideration of the foregoing and the mutual promises
and covenants set out in the Agreement, IT HAS BEEN AND IT HEREBY IS AGREED, as
follows:
1. Employment and Duties.
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1.1 Subject to the terms and conditions set forth herein, the Company
hereby employs Executive as the Company's President and Chief Executive Officer,
and Executive hereby accepts employment with the Company as President and Chief
Executive Officer. The Executive shall be the most senior executive officer of
the Company and its subsidiaries and shall have full responsibility for managing
and supervising the affairs and operations of the Company, subject to the
reasonable supervision, direction and control of the Company's Board of
Directors. The Board of Directors may assign to Executive such duties for the
Company or any controlled affiliate as are consistent with Executive's status as
President and Chief Executive Officer. Executive agrees to devote his business
time, energies and attention to the business affairs of the Company in an amount
not less than five working days (40 hours) per week. In the event Executive is
not the Company's President during the term, he will be assigned similar
executive-type duties consistent with his position as Chief Executive Officer.
1.2 The Executive shall be appointed to the Board of Directors for all
Company subsidiaries for which it has a controlling stake. This Director
position occupied by the Executive shall have full veto powers over all
subsidiary board decisions of material significance. These appointments shall
become effective no later than 10 days after completion of any acquisition
transaction resulting in a controlling interest (greater than 50.01%) in the
subsidiary.
1.3 The Executive may conduct other non-Company business for himself
and other persons and entities, including without limitation Aesis Research
Group, LLC, whether as an owner, employee, director, consultant or otherwise
provided these activities do not materially interfere or compete with the
Company's business or operations or with the Confidentiality and Non-Compete
terms outlined in Sections 4 and 5 respectively.
2. Compensation and Benefits.
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2.1 The Company shall pay the Executive a monthly salary at the rate of
$21,666.67 per month, payable in substantially equal semi-monthly installments.
The salary shall be subject to withholding taxes and other normal payroll
deductions. The Company may increase (but not decrease) the salary rate or make
additional payments to the Executives, i.e., bonuses, as directed by its Board
of Directors.
2.2 The Company will reimburse the Executive for 1/2 his reasonable
legal fees incurred in connection with the entry into this Agreement.
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2.3 In recognition of the successful completion of the initial trial
period and consonant with verbal discussions between the Executive and the
controlling shareholder, the Company shall pay the Executive a one-time bonus of
$20,000 payable on December 1st, 2005.
2.4 In order to additional align incentives with the Company's
strategic plan, the Executive will earn additional bonuses if the following
conditions are met:
i. a one-time bonus of $10,000 payable upon successful
completion of the Estracure reverse takeover - namely
achievement of 100% control of the Company's Estracure
subsidiary.
ii. a one-time bonus of $20,000 (in addition to the bonus
outlined in 2.4.i) payable if and only if the terms of the
Estracure reverse takeover as negotiated by the Executive
result in a less than 15% aggregate ownership stake on the
part of the minority Estracure shareholders in total
outstanding Duravest shares.
iii. a one-time bonus of $30,000 (in addition to the bonus terms
outlined in 2.4.i and 2.4.ii) payable if the terms of the
Estracure reverse takeover result in a less than 10%
aggregate ownership stake on the part of the minority
Estracure shareholders in total outstanding Duravest shares.
iv. a one-time bonus of $10,000 payable upon successful
completion of the Company's tender offer for the planned
BMTS Group subsidiary.
v. A one-time bonus of $20,000 payable upon enrollment of the
first patient in the Company's Phase II/Phase III European
trial utilizing the Estracure 17-beta-estradiol stent.
2.5 The bonus terms outlined in section 2.4 do not exclude any other
future bonus terms that may be negotiable as circumstances warrant.
2.6 Executive shall be entitled to such health and medical insurance
(including family coverage) which is no less favorable than generally afforded
to other corporate officers of the Company, subject to applicable waiting
periods and other conditions. Executive shall be entitled to paid vacation in
each employment year of 4 weeks per year. Vacation granted but not used in any
calendar year shall be forfeited at the end of such calendar year and may not be
carried over to any subsequent calendar year except to the extent of one week of
carry over vacation per year.
2.7 The Company will pay or reimburse Executive for all transportation,
hotel and other expenses reasonably incurred by Executive on business trips and
for all other ordinary and reasonable out-of-pocket expenses actually incurred
by him in the conduct of the business of the Company against itemized vouchers
submitted with respect to any such expenses approved in accordance with
Company's customary policies and procedures. The Company will furnish the
Executive with a corporate credit card for payment of expenses.
2.8 The Company agrees to use its best efforts and due diligence to
procure and provide the Executive and its other officers and directors with
Directors and Officers Liability Insurance coverage in an amount not less than
$5 million as originally provided for in the interim employment agreement and
stipulated to continue upon full-time employment.
3. Term and Termination.
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3.1 Unless sooner terminated or extended as herein provided, the term
of this Agreement shall commence as of December 1, 2005 (the "Effective Date")
and shall terminate on the date that is two years thereafter (the "Employment
Term" or "Term"). The Term of the Agreement will automatically renew for an
additional one year Term unless one of the Parties services a notice of
termination upon the other party at least 90 days prior to the end of the Term
or any extended Term year thereafter.
3.2 If Executive dies during the Term of this Agreement, this Agreement
shall thereupon terminate and the Company shall have no further liability to
Executive, his heirs, personal representatives, successors or assigns under this
Agreement, other than the Company shall pay to Executive's estate any accrued
but unpaid salary and bonus and reimbursement for reasonable business expenses
incurred prior to the date of termination, and Executive's estate or heirs shall
be entitled to exercise all then vested options granted to Executive for the
remainder of their terms.
3.3 The Company, by notice to Executive, may terminate this Agreement
if Executive shall fail because of illness, disability or incapacity to render,
for three consecutive months, or for 90 days during any 12 month period,
services of the character contemplated by this Agreement. Upon termination in
accordance with this paragraph 3.3, the Company shall have no further liability
to Executive under this Agreement, other than for accrued but unpaid salary and
bonus and reimbursement for reasonable business expenses incurred prior to the
date of termination, and Executive shall be entitled to exercise all then vested
options granted to Executive for the remainder of their terms. Notwithstanding
such termination, the provisions of paragraphs 4, 5 and 6 shall survive.
3.4 The Company, by notice to Executive, may terminate this Agreement
for cause. As used herein, "cause" shall include, but not be limited to: (a) the
willful and repeated refusal or failure by Executive to carry out lawful
directions of the Board of Directors which are of a material nature and
consistent with his status as President and Chief Executive Officer or the
willful and repeated refusal or failure by Executive to perform a material part
of Executive's duties hereunder; (b) common law fraud or dishonest action by
Executive in his relations with the Company or any of its subsidiaries or
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affiliates, or with any customer or business contact of the Company or any of
its subsidiaries or affiliates, in each case which has a material and
demonstrably negative effect on the Company ("dishonest" for these purposes
shall mean Executive's knowingly or recklessly making of a material misstatement
or omission); (c) the indictment of Executive for or his plea of nolo contendere
to (x) any felony or (y) a misdemeanor (excluding a xxxxx misdemeanor) involving
financial impropriety or moral turpitude; or (d) any willful and material
violation of any covenants or restrictions contained in paragraphs 4 and 5. No
conduct shall be deemed willful if it was taken or omitted to be taken with a
good faith belief that such conduct was in the best interests of the Company.
Notwithstanding the foregoing, no "cause" for termination shall be deemed to
exist with respect to Executive's acts described in clauses (a), (b) or (d)
unless the Company shall have given written notice to Executive specifying the
"cause" with reasonable particularity and, within 30 days after such notice,
Executive shall not have cured or eliminated the problem or thing giving rise to
such "cause;" provided, however, that a breach of any provision of clauses (a),
(b) or (d) above, involving the same or substantially similar actions or conduct
for which the Company previously gave notice of termination and with respect to
which, Executive satisfactorily cured, shall be grounds for termination for
cause without any additional notice from the Company. Upon termination for
cause, the Company shall have no further liability to Executive under this
Agreement, other than for accrued but unpaid salary and reimbursement for
reasonable business expenses incurred prior to the date of termination.
Notwithstanding such termination, the provisions of paragraphs 4, 5 and 6 shall
survive.
3.5 The Executive by notice to the Company may terminate this Agreement
if the Company materially breaches any of the provisions of this Agreement (a
"Good Reason" termination). Notwithstanding the foregoing, the Executive shall
not have grounds for termination for Good Reason unless Executive shall have
given written notice to the Company specifying the breach with reasonable
particularity and, within 30 days after such notice, the Company shall not have
cured or eliminated the problem or thing giving rise to such breach, provided,
however, that a breach by the Company involving the same or substantially
similar actions or conduct for which the Executive previously gave notice of
termination and with respect to which, the Company satisfactorily cured, shall
be grounds for termination for Good Reason without any additional notice from
the Executive. In the event Executive terminates this Agreement as a result of
the Company's breach and failure to cure such breach as provided in this
paragraph 3.5, or the Company's termination of the Executive's Employment
without cause on the part of the Executive, the Company shall to pay to
Executive (i) any unpaid salary and bonus through the effective date of
termination specified in such notice; (ii) Executive's base Salary in the manner
set forth in paragraph 2.1 hereof until the date that is one year following the
effective date of termination; and (iii) reimbursement for reasonable business
expenses incurred prior to the date of termination. In addition, (i) all options
granted to the Executive shall immediately vest in full and remain exercisable
for the remainder of their terms and (ii) the Executive shall be entitled to
continued coverage under all health and medical plans at the Company's expense
for such severance period. Except for the payments and benefits provided to
Executive in accordance with the two immediately preceding sentences, the
Company shall have no further liability to Executive under this Agreement. The
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Executive shall have no obligation to mitigate such severance by seeking
alternative employment and the Company shall have no right of offset against
such severance.
4. Protection of Confidential Information.
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4.1 Executive acknowledges that:
(a) As a result of his employment with the Company, Executive will
obtain proprietary secret and confidential information concerning the business
of the Company and/or its subsidiaries and affiliates (referred to collectively
in this paragraph 4 as the "Company"), including, without limitation, medical
research, financial information, designs and other proprietary rights, trade
secrets, trade practices, methods of operation, sales, promotion, marketing,
technology and know-how, whether coming to the knowledge of Executive prior to,
on or after the date hereof ("Confidential Information"). Confidential
Information does not include Executive's knowledge, generally, of the sale,
marketing and promotion of products and services similar to the products and
services of the Company existing as of the date of execution and delivery of
this Agreement obtained by Executive from prior sources and experiences.
(b) The Company will suffer substantial damage which will be
difficult to compute if, during the period of his employment with the Company or
thereafter, Executive should enter a business competitive with the Company or
communicate, publish, disclose, divulge, use or authorize anyone else to
communicate, publish, disclose, divulge or use, any Confidential Information.
(c) The provisions of this Agreement are reasonable and necessary
for the protection of the business of the Company.
4.2 Executive agrees that he will not at any time, either during the
term of this Agreement or thereafter, communicate, publish, disclose, divulge,
use or authorize anyone else to communicate, publish, divulge or use, any
Confidential Information obtained or learned by him as a result of his
employment with, or prior retention by, the Company, except: (i) in the course
of performing his duties hereunder; (ii) with the Company's express written
consent; (iii) to the extent that any such information is in the public domain
other than as a result of Executive's breach of any of his obligations
hereunder; or (iv) where required to be disclosed by court order, subpoena or
other government process. If Executive shall be required to make disclosure
pursuant to the provisions of clause (iv) of the preceding sentence, Executive
promptly, but in no event more than three business days after learning of such
subpoena, court order, or other government process, shall, if legally
permissible, notify, by personal delivery or by electronic means, confirmed by
mail, the Company and, at the Company's expense, Executive shall: (a) take all
reasonably necessary and lawful steps required by the Company, at the Company's
expense, to defend against the enforcement of such subpoena, court order or
other government process, and (b) permit the Company to intervene and
participate with counsel of its choice in any proceeding relating to the
enforcement thereof.
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4.3 Upon termination of his employment with the Company, Executive will
promptly deliver to the Company all contracts, customer lists, memoranda, notes,
records, reports, manuals, drawings and other documents (and all copies thereof)
relating to the business of the Company and all property associated therewith,
which he may then possess or have under his control; provided, however, subject
to Executive's obligations under this paragraph 4, that Executive shall be
entitled to retain copies of such documents reasonably necessary to document his
personal financial relationship (both past and future) with the Company.
4.4 The provisions of this paragraph 4 shall survive the termination of
this Agreement for any reason.
5. Non-Compete/Non-Solicitation.
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5.1 Executive agrees that, except as otherwise approved in writing by
the Company, Executive shall not, individually or jointly with others, either
directly or indirectly, for himself, or through, on behalf of or in conjunction
with any person, persons, partnership, corporation or other entity, during the
Term of this Agreement and for the Restriction Period (as hereinafter defined),
anywhere the Company is then actively engaged in business; and the Executive
will not:
(i) establish, operate, organize, own, engage in or otherwise
participate in or carry on any Competitive Business; become associated with or
financially interested in any Competitive Business in any manner; or provide
management or consulting services to any Competitive Business;
(ii) contact, solicit, attempt to contact or solicit, or
communicate with in any manner regardless of the party that initiates such
communications, any customer of the Company for the purpose of selling,
marketing or promoting any products or services competitive with those offered
by the Company, or with the purpose of, or having the effect of, causing such
Person to not to do business with the Company or terminate their business
relationship with the Company; or enter into any type of a business relationship
with a customer of the Company involving any products or services competitive
with those offered by the Company; or
(iii) contact, solicit, attempt to contact or solicit, or
communicate with in any manner regardless of the party that initiates such
communications, any person employed by Company for the purpose, or with the
intent of, or having the effect of, enticing him away from the employ of Company
for any reason; or employ, retain or contract with in any manner, for any
purpose, any person employed by Company.
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5.2 For purposes of this Agreement,
"Competitive Business" shall mean any business similar to and
competitive with the business engaged in by the Company at the time of the
termination of this Agreement or Executive's employment with the Company.
"Restriction Period" shall mean a continuous uninterrupted period
of one year commencing upon the expiration of this Agreement or termination of
the Executive's employment with the Company for any reason other than the
non-renewal of this Agreement by the Company, the expiration of this Agreement
by reason of the passage of time, the termination of the Executive without
cause, or the Executive's termination of this Agreement for Good Reason.
5.3 Notwithstanding the foregoing, it shall not be a violation of this
paragraph 5 for the Executive to own a five percent or smaller interest in any
corporation required to file periodic reports with the Securities and Exchange
Commission.
6. Reasonableness of Restrictions, Reformation; Enforcement.
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The parties hereto recognize and acknowledge that the geographical and
time limitations contained in paragraph 5 hereof are reasonable and properly
required for the adequate protection of the Company's interests. It is agreed by
the parties hereto that if any portion of the restrictions contained in
paragraph 5 are held to be unreasonable, arbitrary, or against public policy,
then the restrictions shall be considered divisible, both as to the time and to
the geographical area, with each month of the specified period being deemed a
separate period of time and each radius mile of the restricted territory being
deemed a separate geographical area, so that the lesser period of time or
geographical area shall remain effective so long as the same is not
unreasonable, arbitrary, or against public policy. The parties hereto agree that
in the event any court of competent jurisdiction determines the specified period
or the specified geographical area of the restricted territory to be
unreasonable, arbitrary, or against public policy, a lesser time period or
geographical area that is determined to be reasonable, non-arbitrary, and not
against public policy may be enforced against Executive. If Executive shall
violate any of the covenants contained herein and if any court action is
instituted by the Company to prevent or enjoin such violation, then the period
of time during which the Executive's business activities shall be restricted, as
provided in this Agreement, shall be lengthened by a period of time equal to the
period between the date of the Executive's breach of the terms or covenants
contained in this Agreement and the date on which such breach ends.
7. Stock Options.
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7.1 As matter of fact, the Executive as per the terms of the Interim
Employment agreement has already been issued and granted an "Initial Stock
Option" to purchase 250,000 shares of the Company's Stock.
7.2 Upon execution of this Agreement the Company will issue and grant
to the Executive an "Additional Stock Option" to purchase up to 750,000
additional shares of the Company's Common Stock.
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7.3 The Additional Stock Option shall: (i) be for a term ending
November 30, 2015; (ii) have an exercise price of equal to the mean of the
closing bid and ask prices of the Common Stock on November 25th, 2005; (iii)
become exercisable in whole or in part and from time to time, at the Executive's
option, commencing on December 1, 2007; (iv) vest in full and become
non-cancelable on December 1, 2007 unless the Executive has been previously
terminated for cause or resigned without Good Reason; (v) if the Executive
ceases to be President and Chief Executive Officer of the Company before
November 30, 2007 by virtue of the Executive's termination for cause or the
Executive's resignation without Good Reason, the Additional Stock Option shall
be cancelable as to 250,000 shares of the 750,000 shares; (vi) contain a right
on the part of the Executive to piggy-back and include shares acquired upon
exercise of the Additional Stock Option in any Registration Statement filed by
the Company under the Securities Act of 1933; (vii) contain cashless exercise
and net exercise provisions and (viii) contain such other conditions and terms
as customary and normal for such options as agreed upon by the Parties. All
options hereunder shall be subject to accelerated vesting and continued
exercisability in the event of the Executive's termination without cause or for
Good Reason.
8. Miscellaneous Provisions.
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8.1 All notices provided for in this Agreement shall be in writing, and
shall be deemed to have been duly given when delivered personally to the party
to receive the same, when delivered by reputable overnight courier (such as
FedEx) by first class mail, postage prepaid, addressed to the party to receive
the same at his or its address set forth below, or such other address as the
party to receive the same shall have specified by written notice given in the
manner provided for in this Section. All notices shall be deemed to have been
given upon actual receipt or upon refusal to accept delivery.
If to Executive:
Xx. Xxxx Gurel
0000 X. Xxxx Xxxxxx, Xxxx X
Xxxxxxx, XX 00000
With a copy to:
Xxxxx X. Xxxxx
Xxxxxxxx Xxxxx & Deutsch LLP
00 X. XxXxxxx Xxxxxx, 0xx xxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
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If to the Company:
DuraVest, Inc.
00 Xxxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
With a copy to:
Xxxxxxxx Xxxxxxx
Bovin, O'Neil, S.E.N.C.
0000 Xxx Xxxxxxxxx, #000
Xxxxxxxx, Xxxxxx
Xxxxxx H3A 224
8.2 This Agreement sets forth the entire agreement of the Parties
relating to the employment of Executive and is intended to supersede all prior
negotiations, understandings and agreements. No provisions of this Agreement may
be waived or changed except by a writing by the party against whom such waiver
or change is sought to be enforced. The failure of any party to require
performance of any provision hereof or thereof shall in no manner affect the
right at a later time to enforce such provision.
8.3 All questions with respect to the construction of this Agreement,
and the rights and obligations of the Parties hereunder, shall be determined in
accordance with the laws of the State of Florida applicable to agreements made
and to be performed entirely in Florida. The parties hereby submit to the
non-exclusive jurisdiction of the state and federal courts sitting in Chicago,
Illinois.
8.4 This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the Company. This Agreement shall not be
assignable by Executive, but shall inure to the benefit of and be binding upon
Executive's heirs and legal representatives.
8.5 Should any provision of this Agreement become legally
unenforceable, no other provision of this Agreement shall be affected, and this
Agreement shall continue as if the Agreement had been executed absent the
unenforceable provision.
8.6 In the event a Party to this Agreement seeks to enforce any of its
rights hereunder in a court of competent jurisdiction, the prevailing Party
shall be entitled to recover from the other Party, in addition to the relief
awarded to the prevailing Party in or by judgment, all court costs, reasonable
investigation expenses, and reasonable attorneys' fees, including appellate
proceedings and proceedings in bankruptcy, incurred by the prevailing Party in
such action.
8.7 The Company shall indemnify and hold harmless the Executive
(including by advancing reasonable legal fees as incurred) against any and all
damages, losses and claims suffered by the Executive arising out of the
performance by the Executive of his duties as an officer or director hereunder.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
EXECUTIVE
/s/ Xxxx Gurel
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Xxxx Gurel, MD MPhil
DURAVEST, INC.
By: /s/ Xxxxxxxxx-Xxxxxxx Xxxxxx
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Xxxxxxxxx-Xxxxxxx Xxxxxx, Director
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