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SEMI-RETIREMENT AGREEMENT
This AGREEMENT is made this 1st day of August, 2000, (the "Effective Date")
between BioShield Technologies, Inc., a Georgia corporation ("COMPANY"),
Electronic Medical Distribution, Inc. d/b/a eMD, a Delaware corporation and
majority-owned subsidiary of the Company (to the extent of its express
obligations hereunder )("eMD"), and Xxxxxxx Xxxxxxx, an individual resident of
the state of Georgia ("Elfersy").
Whereas, Elfersy desires to retire from his day to day duties as an
employee of the Company;
Whereas, the Company desires to continue to receive advice and
consultation from Elfersy from time to time on an as needed basis;
Whereas, the Company has obtained all requisite corporate approval of
this contract and option grants by the Company and eMD, including specifically
board approval as required under applicable law;
Now Therefore, the Company and Elfersy covenant and agree as follows:
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1. The Employment Agreement between the Company and Elfersy dated January
1, 1998 ("Employment Agreement") and Elfersy's employment thereunder
is hereby terminated by mutual agreement. The arrangements between the
Company and Elfersy set forth below shall be in lieu of all amounts
payable and/or benefits due Elfersy under the Employment Agreement.
(a) Elfersy will receive pay of twelve (12) payments of Thirty
Thousand Eight Hundred Thirty Three Dollars ($30,833) on the
first (1st) day of each month, beginning with the month
following the Effective Date and thereafter Elfersy will
receive thirty (30) payments of Twenty Thousand Eight Hundred
Thirty Three Dollars ($20,833) on the first (1st) day of each
month following the first (1st) anniversary of the Effective
Date, less all State and Federal Withholding in accordance
with Company practice and policy. Such payments shall be
directly deposited into the same bank account under the
instructions currently in place for Elfersy. In the event of
Elfersy's death prior to his receipt of the payments
described herein, the Company shall have the option to
continue monthly payments as described herein or make a lump
sum payment of the then-present value of the remaining
payments hereunder to Elfersy's spouse if surviving and, if
not, to Elfersy's QTIP Trust utilizing the following
assumptions: 1983 GAM Table average male and female and an
interest rate factor of 6.5%.
(b) Elfersy shall resign as an officer and director of both
BioShield Technologies, Inc. and Electronic Medical
Distribution, Inc. effective June 21, 2000.
(c) For a period of forty-two (42) months commencing on the
Effective Date. Elfersy will continue to receive an
automobile allowance at the Company's expense of One Thousand
Five Hundred Dollars ($1,500.00) per month as well as all
health, dental, life insurance and disability benefits on the
same basis as he received such benefits immediately before
the termination of the Employment Agreement, subject only to
future changes by the Company in insurance plans and
coverages available to the Company's most senior executive
officers.
(d) Concurrently with the execution of this Agreement, Elfersy
will receive non-qualified options to purchase an additional
One Hundred Fifty Thousand (150,000) shares of Company common
stock at the strike price of $ 24.414 per share. Elfersy
shall be solely responsible for any and all tax consequences
to him of said grant and/or exercise.
(e) Elfersy shall receive a stipend from the Company for rental
of an executive suite of One Thousand Five Hundred Dollars
($1,500) per month for a period of forty two (42) months
commencing on the Effective Date; provided however, that
Elfersy may choose any location for his office;
(f) BioShield shall pay Elfersy Twenty Five Thousand Dollars
($25,000) concurrently with the execution of this Agreement;
(g) For the period following forty two (42) months from the
Effective Date, the Company shall provide, at Elfersy's
expense, comparable health insurance to that presently
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provided for Xx. Xxxxxxx and his wife, for each of their
lives with minor dependents covered until the Company health
plan currently ends eligibility; provided, however, that
Elfersy shall be entitled to receive COBRA coverage under the
Company's health plan, as well as applicable law.
(h) Xx. Xxxxxxx agrees not to sell more stock than is allowed:
a. Under Rule 144 until such time as it no longer
applies to Elfersy;
b. For three (3) months following the Effective Date,
under the current Company blackout periods and
trading windows, which are defined in the Company's
Xxxxxxx Xxxxxxx Policy, a copy of which is attached
hereto and incorporated herein by reference,
including no trading from fifteen (15) days prior
the end of a fiscal quarter (December 31, March 31,
June 30 and September 30) through forty eight (48)
hours after the results of operations for the period
then ended are publicly released by the Company; and
c. For twelve (12) months following the Effective Date,
in market transactions on any one trading day which
are reflected on NASDAQ (National Markets) and
constitute in the aggregate more than twelve (12%)
percent of that day's total trading volume
(including trades by Elfersy).
(i) Concurrently with the Effective Date, Xx. Xxxxxxx will be
granted additional options to acquire One Hundred Thousand
(100,000) shares of common stock in eMD at a strike price of
$5.25 per share.
2. All options to acquire shares of common stock of the Company,
including options to acquire shares of eMD, granted hereunder and all
prior grants (the "Options"), will be delivered to Elfersy on or
before the Effective Date and shall be made in accordance with all
applicable laws, including but not limited to the requirement to
register with the Securities and Exchange Commission. The options
granted in accordance with this Agreement and Elfersy's existing
options to purchase shares of the common stock of eMD shall be
immediately exercisable through the fifth anniversary of the Effective
Date; provided, however, that Elfersy's additional options to purchase
One Hundred Fifty Thousand (150,000) shares of the common stock of the
Company at a strike price of $ 2.44 shall expire ninety (90) days from
the Effective Date. The Options shall be converted to a successor
company's stock in the event of a merger, change in control or
transaction in which the Company is not the surviving entity, and
shall be appropriately adjusted (to the extent of any unexercised
Options) to reflect the effect of any stock dividend or split,
recapitalization, reinvestments, extraordinary dividend and/or
transfer with each such adjustment becoming effective upon the date of
the related event. The Company will give Elfersy prior written notice
of the record date of any such event (or if no record date is
established, of the event) and of the prospective adjustment, which
will result from such event.
3. Concurrently with this Agreement, Elfersy agrees to execute such
additional documents as may be reasonably requested by the Company to
transition operational responsibilities, including assignment of
patent and/or inventorship rights on patents and/or patentable
technology developed for the Company
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during the term and within the scope of his employment using company
resources, up to and including the Effective Date; provided, however,
that the Company expressly acknowledges that Elfersy may subsequently
develop, during the term of this Agreement, patentable or potentially
patentable technology in which the Company shall have no right of
ownership, title or interest.
4. For a period of forty two (42) months from the Effective Date, Elfersy
agrees to make himself reasonably available at mutually acceptable
times to advise and consult with the Company with respect to future
developments and technical advances concerning anti-microbials and
organo-silanos (which may or may not be related to current work or
projects of the Company). Elfersy shall provide the Company Board of
Directors with written quarterly reports, if requested to do so by the
Board, concerning such future developments and technical advances in
January, April and July 2001. Failure of Elfersy to satisfactorily
perform under this paragraph 4 shall not be treated as a breach by
Elfersy of this Agreement or provide grounds for the Company to
terminate or diminish any payment to or benefit provided or to be
provided to Elfersy or his family or heirs under this Agreement.
5. Except for claims arising after the Effective Date as to the
performance of this Agreement and its concomitant obligations, Elfersy
hereby fully and finally releases, remises, acquits, forgives and
forever discharges the Company and its affiliates, subsidiaries,
officers, directors, shareholders, employees, agents, attorneys,
representatives, successors and assigns, and any of their respective
directors, officers, shareholders, agents, attorneys, employees or
representatives from any and all actions, suits, prosecutions, claims,
liabilities, damages or other legal or equitable remedies, whether
known or unknown, foreseeable or unforeseeable, arising or claimed to
arise from, or in connection with, Elfersy's employment by the Company
or any agreements, undertakings, commitments, representations,
disclosures, failures to disclose, occurrences, actions, failures to
act, breaches or defaults directly or indirectly related thereto or
arising therefrom.
6. Except for claims arising after the Effective Date as to the
performance of this Agreement and its concomitant obligations, the
Company hereby fully and finally releases, remises, acquits, forgives
and forever discharges Elfersy, his agents, attorneys,
representatives, successors and assigns from any and all actions,
suits, prosecutions, claims, liabilities, damages or other legal or
equitable remedies, whether known or unknown, foreseeable or
unforeseeable, arising or claimed to arise from, or in connection
with, Elfersy's employment by the Company or eMD or any agreements,
undertakings, commitments, representations, disclosures, failures to
disclose, occurrences, actions, failures to act, breaches or defaults
directly or indirectly related thereto or arising therefrom.
7. Company, eMD and Elfersy agree that they shall not engage in any
communications, which shall disparage one another on interfere with
their existing prospective business relationships. The Company and
Elfersy shall issue a joint press release acceptable to other
concerning the completion and terms of this Agreement.
8. No failure or delay on the part of the Company or Elfersy in
exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such
right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy.
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9. No amendment, modification, termination, waiver or consent departure
from the terms of any provision of this Agreement shall be effective
unless signed in writing by the Company and Elfersy. Any amendment,
supplement or modification of or to any of this Agreement, any waiver
of any provision of this Agreement, and any consent to any departure
from the terms of any provision of this Agreement, shall be effective
only in the specific instance and for the specific purpose for which
made or given.
10. This Agreement shall be binding upon the Company and Elfersy and their
respective successors and permitted assigns.
11. This Agreement and the rights and obligations hereunder shall be
construed and enforced in accordance with and governed by the laws of
the State of Georgia, without giving effect to the principles of
conflicts of laws thereof.
12. Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability only without
invalidating the remaining provisions hereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
13. This Agreement constitutes the entire agreement between The Company
and Elfersy with respect to the subject matter hereof and there are no
promises or undertakings with respect thereto not expressly set forth
herein.
14. To the fullest extent permitted by law, the Company and eMD shall
forever indemnify, protect and hold harmless Elfersy from and against
any claim, suit, action or proceeding, whether civil, criminal,
administrative or investigative, which is made or threatened to be
made, against Elfersy by reason of the fact that he was a director or
officer of the Company and/or eMD or any subsidiary thereof or was
serving at the request of the Company and/or eMD as a director,
officer or trustee of, or in any similar capacity with any other
entity, which indemnification shall include without limitation payment
of any expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or
on his behalf in connection with any such claim, action, suit
proceeding, and any appeal therefrom or investigation thereof. Such
payment by the Company and/or eMD of said expenses shall be made on
behalf of Elfersy when incurred by or on behalf of Elfersy, whether or
not in advance of the final disposition of the matter, subject only to
Elfersy providing the Company and/or eMD with a written undertaking to
repay such payment(s) and/or expense(s) if it is finally determined by
a Court of competent jurisdiction that Elfersy is not entitled to
indemnification as a matter of law with respect to such matter.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
ELFERSY: THE COMPANY:
BIOSHIELD TECHNOLOGIES, INC.
By:
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Xxxxxxx Xxxxxxx Xxxxxxx X. Xxxxx
Its: Chairman, CEO and President
ELECTRONIC MEDICAL
DISTRIBUTION, INC.
(As to provisions which specifically
mention eMD only)
By:
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Xxxxxxx X. Xxxxx
Its: Chairman and CEO
