EMPLOYMENT AGREEMENT
AGREEMENT, dated June 1,1999 between BioProgress Technology Inc. (Company), with
an office at XX Xxx 000000, Xxxxxxx Xx. 00000 and Xxxxxxx X. Xxxxxx (Employee),
residing at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000
WITNESSETH
WHEREAS, the Company wishes to employ the Employee, and the Employee wishes to
accept such employment, all on the terms and conditions set forth below;
NOW THEREFORE, in consideration of the mutual obligations herein set forth, the
parties agree as follows:
Employment. The Company hereby employs the Employee, and Employee hereby accepts
such employment and agrees to perform the services specified herein, on the
terms and conditions set forth in this Agreement.
Services. The Employee shall act as President of BioProgress Technology, Inc.,
and shall perform such duties for Company and its subsidiaries and affiliates as
required or as may otherwise be reasonably assigned to him from time to time by
the Board of Directors of the Company (Board). Additionally the Employee shall
serve on the Board of Directors of BioProgress Technology International, Inc.
and will be compensated at the rate to be determined by the Chairman. The
Employee shall serve the Company and its subsidiaries and affiliates faithfully
and to the best of his ability and shall devote his full business time and
attention to the affairs of the Company, its subsidiaries and affiliates. b. The
principal office for the performance of the Employee's services shall be the
office of the Company in Greensboro, NC, and subject to such travel as the
performance of Employee's duties in the business of the Company may require. The
Company may require certain employees of the Company to relocate. If the
Employee shall be required to relocate within the Company from one office to
another, the Company shall provide to the Employee such relocation benefits as
are mutually agreed upon by the Employee and the Company in writing at the time
of relocation.
Term. The term of this Agreement shall be five (5) years; commencing on the date
hereof and ending May 31, 2004, subject to earlier termination as provided
herein. The term of this Agreement shall be automatically renewed for additional
terms of five (5) years each, unless either the Employee or the Company shall
give written notice to the other of its intention not to renew the Agreement.
The Company agrees to notify Employee of its intention not to renew the
Agreement no later than twelve (12) months prior to the expiration of the
initial term or the applicable renewal term as the case may be.
Compensation. As compensation for all of the services to be performed by the
Employee hereunder, the Company shall pay the Employee an initial base salary at
a rate per annum equal to $125,000.00 (Base Salary), or such greater amount as
the Board may determine in it absolute discretion from time to time, but at
least annually, payable in installments in accordance with the normal payroll
policies of the Company in effect from time to time, including those relating to
the compliance with state and federal law including withholding of taxes, and
such other compensation, including participation in any incentive compensation
program and deferred compensation program provided by the Company from time to
time. Notwithstanding the foregoing, the minimum base salary and incentive
compensation programs (including bonus) shall be increased in accordance with
the figures reflected in Addendum A attached hereto. The term projected gross
revenues as reflected in Addendum A, refer to the revenues generated by the
parent company, BioProgress Technology International, Inc. including BioProgress
Technology, Inc.
Expenses. The Company shall reimburse the Employee for any out-of-pocket
expenses reasonably incurred by the Employee in the performance of his duties to
the Company upon receipt of appropriate vouchers therefore and in accordance
with the Company's current practice or as such practices may be changed from
time to time by the Board. Any single expense item greater that $2,000.00 is
subject to the prior approval of the directors. Air travel within continental
North America may be first class, and business class in respect of
intercontinental travel.
Fringe Benefits. The Employee shall be entitled to the following fringe
benefits:
annual paid vacation of five (5) weeks, and if the Employee fails to use all or
a portion of such vacation time, said time may be accumulated by the Employee up
to a maximum of two (2) weeks and used by him in the following year. Additional
vacation may be awarded to the Employee at the discretion of the Board,
medical, dental and disability insurance benefits, Exec-U-Care, group term life
insurance, sick pay and holidays shall be provided by the Company,
at the expense of the Company, an automobile allowance of 900 Dollars per month,
a company sponsored 401(k) savings plan with Company matching funds to be
determined by the Board in accordance with the standards of the industry,
pension entitlement shall rank pari passu with other executive arrangements if,
and when, the Company introduces such a program,
participation in the Company's Stock Option Plans on the terms reflected in
Addendum B and Addendum C attached hereto.
Trade Secrets.
a. So long as the Employee is employed hereunder, the Employee shall not,
without the Company's prior written consent, directly or indirectly;
interfere with or attempt to disrupt any then existing relationship between the
Company, its subsidiaries or affiliates and any of their customers, suppliers,
employees or other persons with whom they do business; or
engage in any business, which is then competitive with the business of the
Company. For the purpose of this paragraph 7, the Employee will be considered to
have been directly or indirectly engaged in such business as a stockholder,
director, officer, employee, agent, broker, partner, individual proprietor,
lender, consultant, licensor, independent contractor or otherwise, except that
nothing herein will prevent the Employee from owning or participating as a
member of a group which owns 5% or smaller block of equity or debt securities of
any company traded on a national securities exchange or in any established
over-the-counter securities market. For the purpose of this paragraph 7, the
term any business then competitive to the business of the Company shall mean a
business principally engaged in the manufacture or sale of soft gelatin capsules
containing vitamins, food, food supplements, pharmaceuticals, cosmetics or
recreational products, and any other products in which the Company may become
significantly engaged in the period after the date hereof until termination of
this Agreement.
During the term of this Agreement, and thereafter without limitation of time,
the employee shall not knowingly divulge, furnish, or make available to any
third person, company, corporation or other organization (including but not
limited to customers, competitors or government officials), without the
Company's prior written consent, any trade secrets or other confidential
information concerning the Company or any of its subsidiaries, affiliates or
licensees or the business of any of the foregoing, including without limitation,
confidential methods of operation and organization, manufacturing methods and
other confidential uses of technology, any trade secrets or other proprietary
information concerning the properties, uses or manufacture of soft gelatin
products and confidential sources of supply and customer lists, but the Employee
may respond to proper subpoenas issued by governmental agencies without the
Company's prior written consent but with prior written notice to the Company.
The obligation imposed by this subparagraph shall cease as to any particular
trade secret or confidential information that shall become generally known to
the public through no fault of the Employee.
In the event the Employee shall violate any provision of this paragraph 7, the
Employee shall no longer be entitled to and hereby waives any and all rights to
any severance payment and benefits under paragraph 8. In such event the Company
shall have the right to terminate this Agreement pursuant to subparagraph 8 and
such termination shall be in addition to and not a substitution for any and all
other rights of the Company at law or equity against the Employee arising out of
any such breach. The Employee acknowledges that his breach of any provisions of
this paragraph 7, including but not limited to any disclosure of or unauthorized
us of any technology or other trade secret of the Company, would cause
irreparable injury to the Company not compensable in money damages and that the
Company shall be entitled, in addition to all other applicable remedies, to
obtain a temporary and a permanent injunction and a decree for specific
performance of this paragraph 7 without being required to prove damages or
furnish any bond or other security.
Termination.
a. This Agreement shall terminate automatically upon the death of the Employee
without any further payment by the Company other than compensation, expenses and
fringe benefits earned pro rata under paragraphs 4, 5 and 6 prior to such date
of death. However, Employee shall be deemed to be fully vested in any pension
plan, stock option plan and other deferred compensation plan in which Employee
participated as of the time of termination under this or any other subparagraph
herein except termination under paragraph 8 (b). The Company shall have the
right, at its sole option, to terminate this Employee's employment under this
Agreement for cause at any time, without any further payment to the Employee
other than such base salary, expenses, and fringe benefits earned pro rata under
paragraphs 4, 5, and 6 prior to the date of termination, by notice to the
Employee specifying the reason for such termination. The Employee shall not be
entitled to any incentive compensation or deferred compensation for the period
ending on the date of such termination or to any fringe benefit thereafter. For
purposes of this subparagraph, cause shall mean solely (i) the Employee's
conviction of a felony or conviction for a criminal offense that would damage
the reputation of the Company; (ii) Employee's gross negligence detrimental to
the Company or willful misconduct; or (iii) the breach by Employee of paragraph
7 of this Agreement.
The Company shall have right to terminate the Employee's employment under this
Agreement at any time for any reason other than cause (as defined in the
preceding subparagraph), upon notice to the Employee. The Company shall pay the
Employee (i) upon such termination, all compensation, expenses and fringe
benefits earned pro rata under paragraphs 4, 5 and 6 through the date of
termination, including Employee's pro rata share of any incentive compensation
for the period ending on the date of such termination and (ii) a severance
payment (the Severance Payment) in the total amount whichever is the greater of
one hundred twenty-five thousand ($125,000) dollars or twelve (12) months of
base salary at the monthly rate in effect immediately preceding such
termination. Employee shall have right to exercise any stock options as defined
in Addendum's for a period of one (1) year after termination under this
subparagraph. Severance Payment shall be payable at the Employee's election
either in a lump sum (the Lump Sum Payment) or in equal monthly installments
(the Installment Payments), commencing with the date of termination. For a
period of one (1) year after termination under this subparagraph, employee shall
be entitled to receive life, disability, accident, health insurance benefits and
auto allowance substantially similar to those which Employee had received
immediately preceding such termination or, if it is not practicable for the
Company to provide such benefits, the Company shall pay Employee an amount equal
to the cost to Employee of obtaining such benefits.
Termination Following Sale of Company. a. In the event a sale of the Company
shall have occurred and Employee's employment is erminated by the Company for
any reason other than cause (as defined in the preceding paragraph 8), or the
death of Employee, then the Company shall pay Employee (i) upon such
termination, all compensation, expenses and fringe benefits earned pro rata
under Paragraphs 4, 5 and 6 through the date of termination, including
Employee's pro rata share of any incentive compensation for the period ending on
the date of such termination and (ii) a severance payment (the Severance
Payment) in the total amount whichever is the greater of two hundred fifty
thousand ($250,000) dollars or twenty-four (24) months of base salary at the
monthly rate in effect immediately preceding such termination. Employee shall
have the right to exercise any stock options as defined in Addendum's for a
period of one (1) year after the termination under this subparagraph. Severance
payment shall be payable at the Employee's election either in a lump sum (the
Lump Sum Payment) or in twelve equal monthly installments commencing with the
date of termination. For a period of two (2) years after termination under this
subparagraph, employee shall be entitled to receive life, disability, accident,
health insurance benefits and auto allowance substantially similar to those
which Employee had received immediately preceding such termination or, if it is
not practicable for the Company to provide such benefits, the Company shall pay
Employee an amount equal to the cost to Employee of obtaining such benefits.
The severance payment payable under this Paragraph 9 shall be in lieu of the
Severance Payment payable under Paragraph 8, except that, if the Severance
Payment payable under 8(c) would exceed the amount of severance payable under
this Paragraph 9, Employee shall instead receive the Severance Payment payable
under Paragraph 8. For the purposes of this Paragraph 9, the term sale of the
Company shall, subject to the next sentence, mean (i) a sale of all or
substantially all of the assets of the Company, or (ii) a sale of 51% or more of
the outstanding shares of capital stock of the Company, or (iii) a merger or
consolidation of the Company where, in the event of a sale, the purchaser of
such assets or shares of capital stock, or, in the event or a merger or
consolidation, the surviving entity, is not a direct or indirect subsidiary,
affiliate or entity under the control of the Company. The term sale of the
Company shall not apply to a public offering or private placement of the shares
of the Company if following such offering or placement the Company retains,
directly or indirectly, control of the Company.
Miscellaneous. a. Any notice required or permitted under this Agreement shall be
in writing and shall be deemed given when delivered personally, or seven days
after being sent by first-class registered or certified mail, return receipt
requested, to the addressee at its or his address set forth at the beginning of
this Agreement (which, in the case of the Company, shall be sent Attention:
Chairman), or to such other address as either party may hereafter specify by
similar notice to the other.
This Agreement shall be governed by and construed in accordance with the laws of
the State of North Carolina governing contracts made and to be performed in
North Carolina.
This Agreement cannot be amended or modified except by a writing signed by both
parties. This Agreement may executed in one or more counterpart copies, each of
which shall be deemed an original, but all of which shall constitute the same
instrument.
This Agreement, which is personal in nature, may not be assigned by Employee
without the prior written consent of the Company, and any purported assignment
without said consent shall be void; provided, that, the Company may freely
assign this Agreement in connection with any sale of substantially all the
assets of the Company or the transfer of control of the Company by its
shareholders.
This Agreement shall be binding upon and inure to the benefit of the parties and
their respective heirs, executors, administrators, personal representative,
successors, and permitted assigns. The term personal representative as used in
this Agreement with respect to an individual shall mean such individual's
guardian, committee, executor, administrator or other legal representative duly
empowered to act on his behalf following his death or legal incapacity. The term
Company as used in this Agreement shall include any legal successor of the
Company by merger, consolidation, or similar legal reorganization.
If any provision of this Agreement shall be deemed invalid or unenforceable as
written, it shall be construed, to the extent possible, in a manner which shall
render it valid and enforceable, and any limitations on the scope or duration of
any such provision necessary to make it valid and enforceable shall be deemed to
be part thereof; no invalidity or unenforceability shall affect any other
portion of this Agreement unless the provision deemed to be so invalid or
unenforceable is a material element of this Agreement, taken as a whole.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first written above.
Company
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------
Employee
/s/ Xxxxxxx X. Xxxxxx
---------------------
EMPLOYMENT AND OPTION AGREEMENT
This Employment and Option Agreement is made and entered into to be effective as
of January 25, 1999 and is by and between Xxxxxxx X. Xxxxxx (Employee) and
BioProgress Technology International, Inc. (Company). The Employee is willing
and able to provide various valuable services for and on behalf of the Company
in connection with the business of the Company. The Company desires to retain
the Employee as a director of the Company and as an executive officer of its
subsidiary, BioProgress Technology, Inc. (BTI), and the Employee desires to be
retained in that capacity upon the terms and conditions hereinafter set forth.
In consideration of the foregoing premises, the mutual promises and agreements
hereinafter set forth, and such other and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and the Employee
agree as follows:
1. Services. The Company hereby retains the Employee as a director and as
President of BTI and the Employee hereby accepts and agrees to such retention.
The Employee shall render to the Company and to BTI services of such nature as
are necessary to provide for the strategic direction of the Company and day to
day management of BTI.
2. Time, Place and Manner of Performance. As set out in the Employment Agreement
to be appended hereto.
3. Term of Agreement. As set out in the Employment Agreement to be appended
hereto.
4. Compensation. As set out in the Employment Agreement to be appended hereto.
5. Stock Option. The Company grants the Employee an option (the Option) to
purchase up to 500,000 ordinary shares of common stock (the Option Shares) in
the Company in accordance with the following schedule: at any time on or before
December 31, 2003 the Employee may purchase up to 100,000 Option Shares at a
price of $0.35 per share, and up to 100,000 Option Shares at a price of $0.75
per share, and up to 100,000 Option Shares at a price of $1.25 per share, and up
to 100,000 Option Shares at a price of $1.75 per share, and up to 100,000 Option
Shares at a price of $2.25 per share. In the event that the Employee purchases
any or all Option Shares, then the Company shall provide to the Employee shares
of the free trading common stock of the Company registered under a Form S-8
filed in accordance with the terms and conditions set forth under the Securities
Act of 1933, as amended. The Option and any exercise of Option Shares shall at
all times be conditional upon Employee not being, nor having been in breach of
this Agreement, and further upon Employee being an employee of the Company at
the time the Option is exercised in whole or in part. In the event that this
Agreement is terminated either by the Company or by the Employee the Option
shall lapse simultaneously and shall cease to have any effect whatsoever,
notwithstanding that any or all Option Shares may not have been purchased by
Employee.
6. Expenses. As set out in the Employment Agreement appended hereto.
7. Disclosure of Information. As set out in the Employment Agreement appended
hereto.
8. Miscellaneous Provisions. (a) Notices. Any notices required or permitted to
be given under this Agreement shall be sufficient if in writing and delivered or
sent by registered or certified mail to the principle office of each party. (b)
Waiver of Breach. Any waiver by a party of a breach of any provision of this
agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach by the waiving party. (c) Assignment. This agreement and
the rights and obligations of the parties hereunder are not assignable by either
party. (d) Applicable Law. It is the intention of the parties hereto that this
Agreement and the performance hereunder and all suits and special proceedings
hereunder be construed in accordance with and under and pursuant to the laws of
the State of Nevada and that in any action, special proceeding or other
proceeding that may be brought arising out of, in connection with or by reason
of this Agreement, the laws of the State of Nevada shall be applicable and shall
govern to the exclusion of the law of any other forum, without regard to the
jurisdiction in which any action or special proceeding may be instituted. (e)
Severability. All agreements and covenants contained herein are severable, and
in the event any of them shall be held to be invalid by any competent court, the
Agreement shall be interpreted as if such invalid agreements or covenants were
not contained herein. (f) Entire Agreement. This Agreement constitutes and
embodies the entire understanding and agreement of the parties and supersedes
and replaces all prior understandings, agreements and negotiations between the
parties. (g) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but both of which taken together shall
constitute but one and the same document.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
effective as of the day and year first above written.
EMPLOYEE:
Xxxxxxx X. Xxxxxx
COMPANY: BIOPROGRESS TECHNOLOGY INTERNATIONAL, INC.
Xxxxx X. Xxxxxxxxx
Duly Authorized Officer
