EMPLOYMENT AGREEMENT
This
Employment Agreement (“Agreement”)
is
entered into as of August 3, 2006 (the “Effective
Date”),
by and
between Dr. Xxx Xxxx,
an
individual residing at _____________ (“Xxxx”
or
“Employee”),
and
NanoSensors, Inc.,
a
Nevada
corporation (the “Company”).
WHEREAS,
The
Company wishes to employ Xxxx as Chairman, President and Chief Executive Officer
of the Company, and Xxxx desires to accept such positions, on the terms and
conditions set forth herein.
NOW,
THEREFORE, in
consideration of the mutual covenants set forth in this Agreement and other
good
and valuable consideration, the receipt and sufficiency of which are
acknowledged, the Company and Xxxx agree as follows:
| 1. |
Employment
of Xxxx:
The Company agrees to employ Xxxx as the Company’s Chairman, President and
Chief Executive Officer, based in the Company’s office in Santa Clara,
California. Xxxx accepts such employment and agrees to act as an
employee
of the Company, all in accordance with the terms and conditions of
this
Agreement. Employee shall undertake regular travel to the Company’s and
operational offices, if any, and such other occasional travel within
or
outside the United States as is or may be reasonably necessary in
the
interests of the Company. All such travel shall be at the sole cost
and
expense of the Company and all airplane travel shall be in accordance
with
the Company’s policy for executive
officers.
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| 2. |
Term
of Employment:
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2.1 Term:
This
Agreement shall be effective upon execution by both parties hereto and Xxxx’x
employment under this Agreement shall commence on the Effective Date and
continue thereafter for a period of thirty six (36) months (the “Employment
Period”),
unless sooner terminated as provided for herein. The last day of the Employment
Period may be referred to herein as the “Expiration
Date”.
The
Company shall notify Employee in writing of the Company’s intention to continue
Employee’s employment after the Expiration Date no less than 90 days prior to
the Expiration Date.
2.2 Termination:
This
Agreement shall be terminable by either Company or Xxxx in accordance with
the
following provisions. As used in this Agreement, the phrase “Termination
Date”
shall
mean (i) in the case of the Employee’s death, his date of death; (ii) in the
case of the voluntary termination of employment by Employee, the date set forth
in a written notice of termination furnished to the Company by Employee, which
date must be at least 20 days from the date of such notice, (iii) in the case
of
termination of employment on or after the Expiration Date of this Agreement,
the
last day of employment; and (iv) in all other cases, the date specified in
the
notice of termination furnished to the Employee by the Company; provided,
however, if the Employee’s employment is terminated by the Company for any
reason except Cause, the date specified in the Notice of Termination shall
be at
least 20 days from the date the Notice of Termination is given to the Employee,
and provided further that in the case of Disability, the Employee shall not
have
returned to the full-time performance of his duties during such period of at
least 30 days.
(a) Employee
may terminate this Agreement for any reason upon twenty (20) days’ prior written
notice to the Company;
(b)
The
Company may terminate this Agreement without Cause upon twenty (20) days’ prior
written notice to the Employee;
(c) The
Company may terminate this Agreement in the event Employee becomes Disabled
(as
defined below) during the Employment Period and the Company provides written
notice of termination and Employee shall not have returned to the full-time
performance of his duties hereunder during a period of at least 30 days;
and
(d) The
Company may immediately terminate this Agreement for Cause and without notice
(provided, however that the Company provide Employee with notice and an
opportunity to cure as expressly set forth in the definition of the term Cause
below). For the purposes of this Agreement, the term “Cause”
shall
mean the following:
| 1) |
A
violation by Xxxx of a material term of this Agreement; it being
understood that a violation of any of the covenants contained in
Section 6
of this Agreement shall constitute a violation of a material term
which
shall justify termination of this Agreement if such violation continues
for a period of more than ten (10) days after receipt by Xxxx of
written
notice from the Company setting forth in reasonable detail the nature
of
the violation;
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| 2) |
Xxxx’x
commission of fraud, dishonesty and/or similar malfeasance in the
rendering of services to the
Company;
|
| 3) |
Xxxx’x
repeated and intemperate use of alcohol or illegal drugs after written
notice from the Company that such use, if continued, will result
in
termination of Xxxx’x employment;
|
| 4) |
Acts
or misconduct by Xxxx during his tenure with Company, which are of
a
criminal nature, including Xxxx’x conviction of a felony involving
personal dishonesty, moral turpitude or willfully violent conduct;
and
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| 5) |
Substantial
refusal to comply or default in complying with the reasonable and
lawful
directions of the Board of Directors of the Company and such refusal,
default or failure continues for a period of more than ten (10) days
after
receipt by Xxxx of written notice from the Company setting forth
in
reasonable detail the nature of the
problem.
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2.3 If
the
Employee’s employment with the Company shall be terminated, the Company shall
pay and/or provide to the Employee the following compensation or
benefits:
(a) In
the
event that this Agreement is terminated by the Company without Cause pursuant
to
Section 2.2(b), Xxxx shall be paid (i) the Accrued Compensation (as defined
below) and (ii) the Severance Payment (as defined below). As used herein, the
“Severance
Payment”
shall
mean the amount equal to six (6) months’ Base Salary (as defined below) in
effect on the Termination Date. Severance Payments shall be made in accordance
with the Company’s regular payment cycle for executive employees.
2
(b) If
Xxxx
dies before the expiration of the Employment Period, the Company shall pay
Xxxx
the Accrued Compensation (as defined below) and all of the Company’s unvested
obligations under this Agreement shall terminate and be of no further force
or
effect as of the actual date of death.
(c) If
Xxxx
becomes Disabled (as defined below) during the Employment Period to the extent
he is unable to perform his duties to the Company, the Company shall pay Xxxx
the Accrued Compensation and the Severance Payment. The term “Disability”
shall
mean that Xxxx shall be unable for a period of more than four (4) consecutive
months or for periods aggregating more than one hundred and twenty (120) days
weeks in any fifty-two (52) consecutive weeks to perform the services to the
Company specified herein as a result of illness, incapacity or a phyisical
or
other disability of any nature.
(d) If
Xxxx
(i) voluntarily terminates this Agreement, or (ii) is discharged for Cause,
the
Company shall pay Xxxx the Accrued Compensation only and Xxxx shall not be
entitled to any Severance Payments or other unvested compensation, and the
Company shall be relieved of any further obligation to Xxxx.
(e) In
the
event the Company fails to notify the Employee of its intention to continue
Employee’s employment within the period prescribed in Section 2.1 or notifies
Employee that it has determined not to continue Employee’s employment,
Employee’s employment shall terminate on the Expiration Date and Company shall
pay the Employee the Accrued Compensation and the Severance Payment. If the
Company notifies Employee that it wishes to continue Employee’s employment but
fails to reach an agreement on a new employment agreement prior to the
Expiration Date, this Agreement shall be deemed to be extended on the same
terms
and conditions except that such employment shall be an at-will basis, subject
to
the right of the Company and the Employee to terminate this Agreement in
accordance with Sections 2.2 and 2.3.
(f)
The
payment of the Severance Payments specified above is conditioned upon Employee’s
signing and returning a general release of claims against the Company in a
form
satisfactory to the Company, and not withdrawing said release of claims within
the period specified therein. In addition, such Severance Payments will be
in
lieu of any entitlement you may have to notice of termination, pay in lieu
of
notice of termination, or any other severance payment or benefit from any other
source.
2.4 Accrued
Compensation. “Accrued
Compensation”
shall
mean an amount which shall include all amounts earned or accrued through the
Termination Date but not paid as of the Termination Date, including (i) Base
Salary, (ii) unpaid bonuses and incentive compensation earned and awarded prior
to the Termination Date, (iii) reimbursement for business expenses incurred
by
the Employee on behalf of the Company, pursuant to the Company's expense
reimbursement policy in effect at such time, and (iv) vacation pay per Company
policy. Accrued Compensation shall be paid on the first regular pay date after
the termination date (or earlier, if required by applicable law).
2.5 No
Mitigation.
The
Employee shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other employment or otherwise and no such
payment shall be offset or reduced by the amount of any compensation or benefits
provided to the Employee in any subsequent employment.
3
2.6 Non-Disparagement.
For a
period of three years following the expiration or termination of this Agreement,
Employee agrees that he will not make any negative or derogatory statements
in
verbal, written, electronic or any other form about the Company, including,
but
not limited to, a negative or derogatory statement made in, or in connection
with, any article or book, on a website, in a chat room or via the internet
except where such statement is required by law or regulation. During such three
year period, none of the Company’s executive officers and directors shall make
any negative or derogatory statements in verbal, written, electronic or any
other form about the Employee, including, but not limited to, a negative or
derogatory statement made in, or in connection with, any article or book, on
a
website, in a chat room or via the internet except where such statement is
required by law or regulation
| 3. |
Scope
of Employment:
|
3.1
General
Duties:
During
the Employment Period, Xxxx shall perform the duties of an executive nature,
as
well as such other duties as the Company’s Board of Directors (the “Board”)
may
prescribe from time to time. Xxxx shall report directly to the Board of
Directors of the Company. During the Employment Period and subject to the
direction of the Board, Employee shall perform such executive duties and
functions and discharge such responsibilities as are reasonably associated
with
his executive position or as may be reasonably assigned or delegated to him
from
time to time by the Board, consistent with his position as President and Chief
Executive Officer. In general, Employee shall have management authority with
respect to, and responsibility for, the overall operations and day-to-day
business and affairs of the Company and all major operating units and executives
of the Company shall report, either directly or indirectly (through other
executives of the Company or its subsidiaries who report directly to the
Employee) to the Employee. The Company shall nominate, and use its best efforts
to have elected, the Employee to the Board throughout the term of this
Agreement. The Employee agrees to resign from the Board upon the termination
of
employment for any reason. The Company understands that Xxxx may serve on the
board of directors and advisory boards of other companies provided (a) such
other company is not engaged in a business which is competitive with the
business now conducted by the Company or then conducted by the Company or (b)
such activities do not materially interfere with his duties
hereunder.
3.2 Devotion
to Company:
Xxxx
shall devote his full time and use his best efforts to the business of the
Company during the Employment Period.
| 4. |
Change
in Control.
|
4.1 The
Company’s Board of Directors has determined that it is appropriate to reinforce
and encourage the continued attention and dedication of members of the Company's
management, including the Employee, to their assigned duties without distraction
in potentially disturbing circumstances arising from the possibility of a change
in control of the Company.
4
4.2 In
the
event that within one hundred and eighty (180) days of a Change in Control
(as
defined below) (i) Employee is terminated, or (ii) (A) Employee’s status, title,
position or responsibilities are materially reduced; (B) Employee’s compensation
is materially diminished as compared to the compensation payable prior to the
Change in Control; (C) Employee is required to undertake substantial new
business-related travel due to the Change in Control; or (D) the Company
relocates the location of its offices such that Employee would be reasonably
expected to move his primary residence and (iii) Employee terminates his
Employment, the Company shall pay and/or provide to the Employee, the following
compensation and benefits:
(a) The
Company shall pay the Employee, in lieu of any other payments due hereunder,
(i)
the Accrued Compensation and (ii) the Severance Payment; and
(b)
The
conditions to the vesting of any outstanding stock options or other incentive
awards (including restricted stock, stock options and granted performance shares
or units (collectively, the “Awards”)
granted to the Employee under any of the Company’s benefit plans, or under any
other incentive plan or arrangement, shall be deemed void and all such Awards
shall be immediately and fully vested and exercisable and such Awards shall
be
deemed amended to provide that the Awards shall remain exercisable for the
duration of their original term.
4.3
“Change
in Control”
shall
mean any of the following events:
(a) (i)
An
acquisition (other than directly from the Company) of any voting securities
of
the Company (the “Voting
Securities”)
by any
“Person”
(as
the
term person is used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the “1934
Act”))
immediately after which such Person has “Beneficial
Ownership”
(within
the meaning of Rule 13d-3 promulgated under the 0000 Xxx) of thirty five percent
(35%) or more of the combined voting power of the Company’s then outstanding
Voting Securities; provided, however, that in determining whether a Change
in
Control has occurred, Voting Securities which are acquired in a “Non-Control
Acquisition” (as defined below) shall not constitute an acquisition which would
cause a Change in Control. A “Non-Control
Acquisition”
shall
mean an acquisition by (1) an employee benefit plan (or a trust forming a part
thereof) maintained by (x) the Company or (y) any corporation or other Person
of
which a majority of its voting power or its equity securities or equity interest
is owned directly or indirectly by the Company (a “Subsidiary”),
or
(2) the Company or any Subsidiary.
(ii)
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because a Person (the “Subject
Person”)
gained
Beneficial Ownership of more than the permitted amount of the outstanding Voting
Securities as a result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Person, provided
that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of Voting Securities by the Company, and after
such share acquisition by the Company, the Subject Person becomes the Beneficial
Owner of any additional Voting Securities which increases the percentage of
the
then outstanding Voting Securities Beneficially Owned by the Subject Person,
then a Change in Control shall occur.
5
(b) The
individuals who, as of the date this Agreement are approved by the Board,
are members of the Board (the “Incumbent
Board”),
cease
for any reason to constitute at least two-thirds of the Board; provided,
however, that if the election, or nomination for election by the Company’s
shareholders, of any new director was approved by a vote of at least two-thirds
of the Incumbent Board, such new director shall, for purposes of this Agreement,
be considered and defined as a member of the Incumbent Board; and provided,
further, that no individual shall be considered a member of the Incumbent Board
if such individual initially assumed office as a result of either an actual
“Election
Contest”
(as
described in Rule 14a-11 promulgated under the 0000 Xxx) or other solicitation
of proxies or consents by or on behalf of a Person other than the Board (a
“Proxy
Contest”);
or
(c) Approval
by stockholders of the Company of: (i) A merger, consolidation or reorganization
involving the Company, unless: (1) the shareholders of the Company, immediately
before such merger, consolidation or reorganization, own, directly or indirectly
immediately following such merger, consolidation or reorganization, at least
sixty percent (60%) of the combined voting power of the outstanding voting
securities of the corporation resulting from such merger or consolidation or
reorganization (the “Surviving
Corporation”)
in
substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization, (2) the
individuals who were members of the Incumbent Board immediately prior to the
execution of the agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members of the board of
directors of the Surviving Corporation, and (3) no Person (other than the
Company, any Subsidiary, any employee benefit plan (or any trust forming a
part
thereof) maintained by the Company, the Surviving Corporation or any Subsidiary)
becomes Beneficial Owner of twenty percent (20%) or more of the combined voting
power of the Surviving Corporation’s then outstanding voting securities as a
result of such merger, consolidation or reorganization, a transaction described
in clauses (1) through (3) shall herein be referred to as a “Non-Control
Transaction”;
or
(ii)
An
agreement for the sale or other disposition of all or substantially all of
the
assets of the Company, to any Person, other than a transfer to a Subsidiary,
in
one transaction or a series of related transactions; or
(iii) The
shareholders of the Company approve any plan or proposal for the liquidation
or
dissolution of the Company.
(d) Notwithstanding
anything contained in this Agreement to the contrary, if the Employee’s
employment is terminated prior to a Change in Control and the Employee
reasonably demonstrates that such termination (i) was at the request of a third
party who has indicated an intention or taken steps reasonably calculated to
effect a Change in Control (a “Third Party”) or (ii) otherwise occurred in
connection with, or in anticipation of, a Change in Control, then for all
purposes of this Agreement, the date of a Change in Control with respect to
the
Employee shall mean the date immediately prior to the date of such termination
of the Employee’s employment.
6
| 5. |
Compensation:
|
5.1 Base
Salary: As
full
compensation for all services provided for herein, the Company shall pay, or
caused to be paid to Xxxx, and Xxxx shall accept, a base salary during the
Employment Period of not less than ONE HUNDRED AND FORTY-FOUR THOUSAND DOLLARS
AND 00/100 ($144,000) per year, as may be increased from time to time in the
sole discretion of the Board (the “Base
Salary”).
The
Base Salary shall be paid in regular installments in accordance with the
Company’s usual pay dates for executives, but not less frequently than monthly.
Employee may receive such other additional compensation as may be determined
from time to time by the Board including bonuses and other long term
compensation plans. Except as expressly set forth herein, nothing in this
paragraph shall be deemed or construed to require the Board to award any bonus
or additional compensation.
5.2 Bonus
Options, Signing Bonus and Milestones Bonuses:
Subject
to the approval of the Company’s shareholders of an appropriate equity-based
incentive compensation plan (“Shareholder Approval”), upon the execution of this
Agreement, the Company shall xxxxx Xxxx an option to purchase up to Five Million
(5,000,000) shares of the common stock of the Company (“Bonus
Options”).
Subject to the Shareholder Approval, the Bonus Options shall be fully
exercisable and vested upon the six month anniversary of the Effective Date.
The
exercise price of the Bonus Options will be equal to the fair market value
of
the Company’s common stock as reported on the Over the Counter Bulletin Board on
the date this Agreement is executed by both parties. In addition, Xxxx will
receive a signing bonus of FOURTY THOUSAND DOLLARS AND 00/100 ($40,000) of
which
Xxxx acknowledges that $20,000 has been paid by the Company prior to the date
hereof. Further, in the event that Employee achieves the milestones listed
in
Exhibit
A during
the inital Employment Period, Xxxx
will
receive a performance bonus of TWELVE THOUSAND FIVE HUNDRED DOLLARS 00/100
($12,500) per event. Xxxx acknowledges that the Company’s payment of the
“signing bonus” is for his cancellation of all accrued compensation owed by the
Company to Xxxx prior to the Effective Date of this Agreement.
5.3 Benefits:
During
the Employment Period, Xxxx will be entitled to participate in the Company's
fringe benefit programs presently offered for senior management, or which may
hereafter, during the Employment Period, be offered to its senior management
and/or non-executive employees on a company wide basis (including group life
insurance, group disability insurance, group medical and hospitalization plans,
pension and profit sharing plans), subject to any eligibility requirements.
All
such fringe benefit programs shall be determined, and periodically modified,
at
the sole discretion of the Board.
5.4 Withholding:
All
compensation payable to Xxxx under this Agreement is stated in gross amounts
and
will be subject to all applicable withholding taxes, other normal payroll
deductions, and any other amounts required by law to be withheld.
5.5 Vacation:
Xxxx
will be entitled to take 15 vacation days per annum in accordance with current
Company vacation policy for senior management, as well as to take standard
Company holidays.
5.6 Expenses:
The
Company, in accordance with its policies, shall pay or reimburse Xxxx for all
reasonable and customary expenses (including travel and entertainment expenses)
incurred by Xxxx during the Employment Period in connection with the performance
of Xxxx'x duties under this Agreement; provided that Xxxx shall provide the
Company with an itemized account of such expenditures together with such
vouchers and other receipts as the Company may request, in accordance with
Company policy and Internal Revenue Service regulations.
7
5.7 Retirement
Plan:
Xxxx
will be eligbile to join the Company’s retirement plan, if any, as defined
within the Company’s policies, subject to any eligibility
requirements.
5.8 Earned
Options:
Subject
to the Shareholder Approval, the Company hereby grants to Xxxx options to
purchase Thirteen Million (13,000,000) shares of the Company's common stock
(“Earned
Options”).
Subject to the Shareholder Approval, commencing on the six month anniverary
of
the Effective Date, the Earned Options shall vest in installments of Four
Hundred Thirty Three Thousand Three Hundred Thirty Three (433,333) shares and
thereafter on the first day of each month of the balance of the Employment
Period provided Employee continues to perform services to Company under this
Agreement (each installment may be referred to as an “Option Installment”). The
exercise price of the Earned Options will be equal to the fair market value
of
the Company’s common stock as reported on the Over the Counter Bulletin Board on
the date that this Agreement is executed by both parties. The Earned Options
shall be exercisable for a period of ten years from the date of grant.
5.9
Termination
of Options. In
the
event of the termination of Employee’s employment by the Company without Cause
prior to the Expiration Date, notwithstanding anything herein or in any stock
option agreement to the contrary, (a) the Employee’s right to purchase shares of
Common Stock of the Company pursuant to any stock option or stock option plan
shall immediately fully vest and become exercisable, (b) the exercise period
in
which Employee may exercise his options to purchase Company common stock shall
be extended to the duration of their original term, as if Employee remained
an
employee of the Company, and the terms of such options shall be deemed amended
to take into account the foregoing provisions. For purposes of clarity, Employee
and Company agree that the occurrence of a Change in Control shall not affect
the provisions of this Section. In
the
event of a termination of Employee’s employment with the Company for Cause,
options granted and not exercised as of the Termination Date shall terminate
immediately and be null and void. In the event of a termination of Employee’s
employment with the Company due to the Employee’s death, or Disability, the
Employee’s (or his estate’s or legal representative’s) right to purchase shares
of Common Stock of the Company pursuant to any stock option or stock option
plan
to the extent vested as of the Termination Date shall remain exercisable for
a
period of twelve (12) months following the Termination Date, but in no event
after the expiration of the exercise period. In the event of the voluntary
termination of Employee’s employment with the Company by the Employee (other
than in connection with a Change in Control) or the termination of the
Employee’s employment on or after the Expiration Date, the Employee’s right to
purchase shares of Common Stock of the Company pursuant to any stock option
or
stock option plan to the extent vested as of the Termination Date shall remain
exercisable for a period of three months following the Termination Date, but
in
no event after the expiration of the exercise period. Notwithstanding the
foregoing, in the event of a Change in Control (as defined above), and the
Employee’s employment is terminated or Employee elects to terminate his
employment (subject to Section 4 of this Agreement), the Options granted
hereunder shall become immediately vested and exercisable in accordance with
Section 4 of this Agreement and any provisions of the Company’s equity
compensation plan pursuant to which the Options are granted.
8
| 6. |
Restrictive
Covenants:
Xxxx agrees that his work for the Company will bring him into close
contact with customers of the Company and with many confidential
affairs
of the Company not readily available to the public, and which the
Employee
acknowledges that the Company considers to be trade secrets. Xxxx
further
agrees that the technology market is highly competitive and worldwide
in
scope. In order to protect the confidential or proprietary information
and
trade secrets of the Company, its customers, and third parties with
which
the Company has entered into confidential agreements, and in consideration
of employment and continued employment, the right to receive income
and
benefits therefore as set forth in this Agreement, the Company’s granting
Xxxx access to such confidential or proprietary information and trade
secrets, as well as allowing Xxxx wide access to become familiar
with the
Company's business and operations and for other good and valuable
consideration, Xxxx agrees as follows:
|
6.1 Confidential
and Proprietary Rights:
Xxxx
agrees that he will not at any time during his employment or after the
termination of his employment with the Company directly or indirectly disclose
to any person, firm, corporation, partnership, or other entity whatsoever
(except the Company), or use, modify or adapt any trade secret or other
confidential or proprietary information of the Company, including without
limitation, information concerning the Company’s business, technology, finances,
marketing, computerized payroll, accounting and information business, personnel
and/or employee leasing business of the Company and its subsidiaries,
information relating to any customer of the Company, or any other nonpublic
business information of the Company and/or its subsidiaries learned as a
consequence of Employee’s employment with the Company or to which he has access,
(collectively referred to as the “Proprietary
Information”)
except
for information available publicly or from other non-confidential sources or
to
the extent it is otherwise required to be disclosed by law or any legal process.
Such Proprietary Information includes, without limitation (a) information not
generally known to the public and proprietary to the Company, (b) information
which Xxxx has a reasonable basis to believe is confidential or proprietary
information or trade secrets of the Company, or (c) information which Xxxx
has a
reasonable basis to believe the Company treats as confidential or proprietary
information or trade secrets. In addition, the prohibition on disclosing such
confidential information shall not include that which Xxxx must disclose to
the
Company’s lawyers, accountants and other professionals that require disclosure
of such information in order to perform the services for which they are engaged
in the course of Xxxx’x role as President of the Company and which persons will
hold such information in substantial compliance with this Section. The
provisions of this Section 6 shall apply with equal force to any confidential
information of any third party with respect to which the Company has signed
a
confidentiality agreement. The Employee acknowledges that Proprietary
Information, as it may exist from time to time, is a valuable and unique asset
of the Company, and that disclosure of any such information would cause
substantial injury to the Company. If Employee is requested or required (by
oral
questions, interrogatories, requests for information or document subpoenas,
civil investigative demands, or similar process) to disclose any Proprietary
Information, Employee shall, unless prohibited by law, promptly notify the
Company of such request(s) so that the Company may seek an appropriate
protective order.
9
6.2 Assignment
of Inventions. Except
as
otherwise may be agreed by the Company in writing, in consideration of the
employment of Employee by the Company, and free of any additional obligations
of
the Company to make additional payment to Employee, Employee agrees to
irrevocably assign to the Company any and all inventions, software, manuscripts,
documentation, improvements or other intellectual property whether or not
protectable by any state or federal laws relating to the protection of
intellectual property, relating to the present or future business of the Company
that are developed by Employee during the term of his/her employment with the
Company, either alone or jointly with others, and whether or not developed
during normal business hours or arising within the scope of his/her duties
of
employment. Employee agrees that all such inventions, software, manuscripts,
documentation, improvement or other intellectual property shall be and remain
the sole and exclusive property of the Company and shall be deemed the product
of work for hire. Employee hereby agrees to execute such assignments and other
documents as the Company may consider appropriate to vest all right, title
and
interest therein to the Company and hereby appoints the Company as the
Employee’s attorney-in-fact with full powers to execute such document itself in
the event employee fails or is unable to provide the Company with such signed
documents. Notwithstanding the foregoing, this provision does not apply to
an
invention for which no equipment, supplies, facility, or trade secret
information of the Company was used and which was developed entirely on
Employee’s own time, unless (a) the invention relates (i) to the business of the
Company, or (ii) to the Company's actual or demonstrably anticipated research
or
development, or (b) the invention results from any work performed by Employee
for the Company.
6.3 Non-Competition
and Non-Solicitation:
In the
event of any termination of Employee’s employment with the Company at any time,
Employee agrees that he will not, for a period of one (1) year following such
termination, directly or indirectly, enter into or become associated with or
engage in any other business (whether as a partner, officer, director,
shareholder, employee, consultant, or otherwise), which
business is primarily involved in the manufacture, development and/or
distribution of sensors or is otherwise engaged in the same or similar business
as the Company in direct competition with the Company, or which the Company
was
in the process of developing during the term of Employee’s employment with the
Company and such development is based on actual or demonstrative anticipated
research (collectively, a “Competitive
Business”).
Notwithstanding the foregoing, (x) the ownership by Employee of less than five
percent of the shares of any publicly held corporation shall not violate the
provisions of this paragraph, and (y) the Employee shall not be required to
comply with any provision of this paragraph following termination of this
Agreement if the amounts that are required to be paid to Employee after such
termination are not timely paid. In furtherance of the foregoing, Employee
shall
not during the aforesaid period of non-competition, directly or indirectly,
in
connection with any Competitive Business, solicit any customer or employee
of
the Company who was a customer or employee of the Company within one year of
the
Termination Date.
6.4 Return
of Documents and Property: Upon
termination of employment or sooner if requested by the Company, Xxxx shall
forthwith either destroy or deliver to the Company all copies and original
documents and any other material and property of the Company of any kind
acquired or coming to the knowledge or possession of Xxxx in connection with
or
as a result of Xxxx’x employment and that relate in any way to the business of
the Company, including without limitation, and in any medium, literature, data,
plans, designs, specifications, price information, customer information,
supplier information, marketing information, business plans, financial
information, memorandums, correspondence, notes and records.
10
| 7. |
Remedies:
Xxxx
agrees that a violation of the covenants set forth in Sections 6.1
through
6.4, or any provision thereof, could cause irreparable injury to
the
Company and that, in addition to other remedies available to the
Company,
the Company shall be entitled to injunctive or other equitable relief
in
case of any such violation or threatened violation. The remedies
set forth
in this Section 7 shall be in addition to, rather than in lieu of,
any
other rights and remedies the Company may have at law or in equity.
|
|
8.
|
Indemnity.
The Company hereby agrees to indemnify, defend, and hold harmless
the
Employee for any and all claims arising from or related to his
employment
by the Company at any time asserted, at any place asserted, to
the fullest
extent permitted by law. The Company shall use commercially reasonable
efforts to maintain such insurance as is necessary and reasonable
(with
minimum coverage of not less than $2,000,000) to protect the Employee
from
any and all claims arising from or in connection with his employment
by
the Company during the term of Employee's employment with the Company
and
for a period of six (6) years after the date of termination of
employment
for any reason. The provisions of this Section are in addition
to and not
in lieu of any indemnification, defense or other benefit to which
Employee
may be entitled by statute, regulation, common law or otherwise.
Any other
provision herein to the contrary notwithstanding, the Company shall
not be
obligated pursuant to the terms of this Agreement:
|
(a) Claims
Initiated by Employee.
To
indemnify or advance expenses to the Employee with respect to proceedings or
claims initiated or brought voluntarily by the Employee and not by way of
defense, except with respect to proceedings brought to establish or enforce
a
right to indemnification under this Agreement or any other statute or law or
otherwise, but such indemnification or advancement of expenses may be provided
by the Company in specific cases if the Board of Directors finds it to be
appropriate; or
(b) Lack
of Good Faith.
To
indemnify the Employee for any expenses incurred by the Employee with respect
to
any proceeding instituted by the Employee to enforce or interpret this
Agreement, if a court of competent jurisdiction determines that each of the
material assertions made by the Employee in such proceeding was not made in
good
faith or was frivolous; or
(c) Unauthorized
Settlements.
To
indemnify the Employee under this Agreement for any amounts paid in settlement
of a proceeding unless the Company consents to such settlement; or
(d) Claims
by the Company for Willful Misconduct.
To
advance expenses to the Employee under this Agreement for any expenses incurred
by the Employee with respect to any proceeding or claim brought by the Company
against Employee for willful misconduct, unless a court of competent
jurisdiction determines that each of such claims was not made in good faith
or
was frivolous; or
11
(e) 16(b)
Actions.
To
indemnify the Employee on account of any suit in which judgment is rendered
against Employee for an accounting of profits made from the purchase or sale
by
Employee of securities of the Company pursuant to the provisions of Section
16(b) of the Securities and Exchange Act of l934 and amendments thereto or
similar provisions of any federal state or local statutory law; or
(f) Willful
Misconduct or Breach.
To
indemnify the Employee on account of Employee’s conduct which is finally
adjudged to have been knowingly fraudulent, deliberately dishonest, or to
constitute willful misconduct or as constituting a breach of Employee’s duty of
loyalty to the Company or resulting in any personal profit or advantage to
which
Agent was not legally entitled; or
(g) Unlawful
Indemnification.
To
indemnify the Employee if a final decision by a court having jurisdiction in
the
matter shall determine that such indemnification is not lawful (and, in this
respect, both the Company and Employee have been advised that the Securities
and
Exchange Commission believes that indemnification for liabilities arising under
the federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication).
|
9.
|
Survival:
The
provisions of Sections 6 and 7 shall survive the termination of this
Agreement for any reason, for the duration specified
therein.
|
| 10. |
Revision:
If
any provisions of this Agreement as applied to any circumstances
shall be
adjudged by an arbitrator or a court of competent jurisdiction to
be
invalid or unenforceable, the same shall in no way affect any other
provision in any other circumstances, or the validity or enforceability
of
this Agreement. The Company and Xxxx intend this Agreement and the
provisions of Sections 6 and 7 to be enforced as written.
|
| 11. |
Severability:
However, if any provision, or any part thereof, is held to be
unenforceable because of its scope or the duration of such provision
or
the area covered thereby, the Company and Xxxx agree that the court
or
arbitrator making such determination shall have the power to reduce
the
scope, duration and/or area of such provision, and/or to delete specific
words or phrases and in its reduced form such provision shall then
be
enforceable and shall be enforced.
|
| 12. |
Entire
Agreement:
This Agreement embodies the entire understanding between the Company
and
Xxxx, and supersedes all prior understandings and discussions, whether
oral or written. It may not be changed orally, but only by an amendment
in
writing signed by both parties.
|
| 13. |
Waiver:
The waiver by the Company of a breach of any provision of this Agreement
by Xxxx shall not operate or be construed as a waiver of any subsequent
breach by Xxxx. The waiver by Xxxx of a breach of any provision of
this
Agreement by the Company shall not operate or be construed as a waiver
of
any subsequent breach by the
Company.
|
| 14. |
Governing
Law; Jurisdiction:
This Agreement shall be construed under and governed by the laws
of the
State of California, United States of America, without regard to
conflict
of laws principles. Any or all actions or proceedings which may be
brought
by the Company or Employee under this Agreement shall be brought
in courts
having a situs within the State of California, and Employee and the
Company each hereby consent to the jurisdiction of any local, state,
or
federal court located within the State of
California.
|
12
| 15. |
Binding
Effect; Non-Assignment:
This Agreement and the rights and obligations of the Company hereunder
shall inure to the benefit of and shall be binding upon the Company
and
any companies or other entities controlling, controlled by, or under
common control with the Company, and upon successors and assigns
of any
such company. Neither this Agreement nor any of Xxxx’x rights or
obligations the Company or shall be transferable or assignable by
Xxxx or
any person claiming any such benefit through him, but they shall
inure to
the benefit of and shall be binding upon his executors, administrators,
personal representatives, heirs, and
legatees.
|
| 16. |
Dispute
Resolution: The
parties hereby submit to the jurisdiction of, and waive any venue
objections against, the United States District Court for the Northern
District of California and the Superior and Municipal Courts of the
State
of California, Santa Xxxxx County, in any litigation arising out
of the
Agreement. The Company may, however, institute a binding arbitration
proceeding pursuant to the commercial arbitration rules of the American
Arbitration Association then existing relating to any controversy
or claim
arising from or relating to this Agreement, or its making, performance,
or
interpretation and judgment on any such arbitration award shall be
final,
binding and conclusive on all parties and may be entered in any court
having jurisdiction over the subject matter of the
controversy.
|
| 17. |
Notices.
For
the purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed
to
have been duly given when (a) personally delivered or (b) sent by
(i) a
nationally recognized overnight courier service or (ii) certified
mail,
return receipt requested, postage prepaid and in each case addressed
to
the respective addresses as set forth below or to any such other
address
as the party to receive the notice shall advise by due notice given
in
accordance with this paragraph. All notices and communications shall
be
deemed to have been received on (A) if delivered by personal service,
the
date of delivery thereof; (B) if delivered by a nationally recognized
overnight courier service, on the first business day following deposit
with such courier service; or (C) on the third business day after
the
mailing thereof via certified mail. Notwithstanding the foregoing,
any
notice of change of address shall be effective only upon receipt.
The
current addresses of the parties are as follows:
|
|
If
to the Company:
|
NanoSensors,
Inc.
|
|
0000
Xxxxx Xx., Xxxxx # 0
|
|
|
Xxxxx
Xxxxx, XX 00000
|
|
|
If
to Employee:
|
To
the place set forth on page 1 of this Agreement.
|
| 18. |
Counterparts:
This Agreement may be executed by facsimile transmission in one or
more
counterparts, each of which shall be deemed an original and which
together
shall constitute one
instrument.
|
| 19. |
Material
Actions:
If
the Company becomes a party to any material action or proceeding
during
the term of this Agreement, the Company agrees to notify Xxxx on
a timely
basis of any material action or
proceeding.
|
13
| 20. |
Separate
Counsel:
Xxxx has been advised and encouraged by the Company to consult
with an
attorney of his
choosing.
|
Remainder
of page intentionally left blank. Signature page follows.
14
Signature
Page to Employment Agreement
between
NanoSensors, Inc. And Xxx Xxxx
IN
WITNESS WHEREOF,
the
Company has caused this Agreement to be executed by its duly authorized officer
and Xxxx has hereunto set his hand, all as of the day and year first above
written.
| NanoSensors, Inc. | Xxx Xxxx | ||
| By: | /s/ Xxxxxx Xxxxx | /s/ Xxx Xxxx | |
|
Xxxxxx Xxxxx, |
Xxx Xxxx |
||
| On behalf of the Company | |||
15
Exhibit
A
Four
Major Milestones for Xxx Xxxx
| · |
Obtain
technology license agreement from Michigan State University for the
commercialization of the intellectual property created to test for
E. coli
and salmonella using a nanoporous silicon-based electrochemical DNA
biosensor.
|
| · |
Completion
of a working prototypes for the Company’s first product and produce 5
pre-production (the version of the product prior to the final
manufacturing design) prototypes that can be field tested by the
Company’s
customer(s).
|
| · |
Release
of all funds held in escrow in connection with Company’s private placement
of units which closed June 27,
2006.
|
| · |
Receipt
of $100,000 in cumulative orders for the Company’s product.
|
16
