EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into this I st day of February 1999, between
Advanced Business Sciences, Inc., a Delaware corporation, ("Company") and
Xxxxxxxx X. Xxxx, ("Executive").
WITNESSETH:
WHEREAS, Company is engaged in the business (the "Company Business") of
Technology design, monitoring, tracking, and mapping of individuals under the
control of the Criminal Justice Industry, and other market segments as deemed
appropriate, and
WHEREAS, the parties hereto desire to enter into an agreement for Company's
employment of Executive on the terms and conditions contained herein;
NOW THEREFORE, for and in consideration of the premises and the mutual covenants
and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1 . Employment and Duties. Subject to the terms and conditions of this
Agreement, Company hereby employs Executive, and Executive hereby accepts
employment with Company. Executive will have such duties of an executive nature
as are assigned to him from time to time and will serve as President and CEO of
Company. Executive shall report to the Chairman of the Board of the Company and
shall be appointed and serve as a voting Director of the Company.
2. Term. Executive's employment pursuant to this Agreement shall commence as of
the date hereof and shall continue through the third anniversary of the date
hereof ("the Expiration Date"). After the Expiration Date, Executive's
employment hereunder shall renew annually and continue on the same terms and
conditions for an indefinite term, unless and until terminated in accordance
with Section 7.
3. Time Commitment. During the Term, Executive shall devote substantially all of
his business time, attention and energies to the diligent and faithful
performance of his duties as an executive employee of the Company. Executive
shall not, without the prior written consent of Company, at any time during the
Term: (a) accept employment with, or render services of a business, professional
or commercial nature to, any other Person (as defined below); (b) engage in any
venture or activity which Company may in good faith consider to be competitive
with or adverse to the Company Business, whether alone or with any other Person
as a partner, officer, director, employee, agent, shareholder, consultant sales
representative or otherwise, except that the ownership of not more that 3% of
the shares or other equity interests of any Person which is publicly traded
shall not be deemed a violation of this Section 3; or (c) engage in any venture
or activity which the Board of Directors of Company may in good faith consider
to interfere with Executive's performance of his duties hereunder. As used in
the Agreement, "Person" means any individual, corporation, limited liability
company, bank, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or other entity. Notwithstanding the
foregoing, Company acknowledges and agrees to
allow Executive to continue his ownership and officer/director roles in INTECK
Corporation, so long as it does not have a material adverse affect on his
obligations in this Agreement.
4.7. Options. Company shall grant to Executive on the date hereof options to
purchase 8.0% Common Stock of the Company as shown on the Company as of February
1, 1999 at a share value of ten cents (.10) per share. An option agreement to
provide for vesting and exercise schedule for these shares shall be:
Block 1: One third of such options shall become vested and exercisable beginning
the earlier of December 30, 1999 or when the closing bid price for the common
shares of ABS exceeds $3.00 per share for at least five consecutive trading
days. The options shall remain exercisable for a period of three years from the
date of vesting.
Block 2: One third of such options shall become vested and exercisable beginning
the earlier of December 30, 2000 or when the closing bid price for the common
shares of ABS exceeds $4.00 per share for at least five consecutive trading
days. The options shall remain exercisable for a period of three years from the
date of vesting.
Block 3: One third of such options shall become vested and exercisable beginning
the earlier of December 30, 2001 or when the closing bid price for the common
shares of ABS exceeds $6.00 per share for at least five consecutive trading
days. The options shall remain exercisable for a period of three years from the
date of vesting.
Any blocks not yet vested would vest and be immediately exercisable upon the
occurrence of a sale or merger of ABS, which includes a transfer of control.
Company will pay the incurred tax liability associated with exercising the
options at each year-end vesting period. If the Executive voluntarily resigns
from the Company during the initial 18 months of this agreement, Company can
repurchase all vested options at the option strike price. The repurchase must be
completed within 30 days of Executive's resignation.
Executive will, if determined in the sole discretion of the Board of Directors,
be eligible to participate in the Company's incentive option program(s) for key
employees as they are instituted from time to time. All options provided for
under this paragraph 4.7 shall become exercisable immediately upon a merger,
consolidation or reorganization of the Company with one or more other
corporations in which the Company is not the surviving corporation, or upon a
sale of substantially all of the assets of the Company to another corporation,
or upon any transaction (including, without limitation, a merger or
reorganization in which the Company is the surviving corporation) approved by
the Board which results in any person or entity (other than persons who are
holders of stock of the Company at the time the plan is approved by the
stockholders and other than an Affiliate) owing 60 percent or more the combined
voting power al all classes of stock of the Company.
3
5. Covenants of Executive. Executive understands and agrees that the Company
Business is one which makes it crucial for Company to develop and retain trade
secrets customer lists, proprietary techniques, information regarding customer
needs and other confidential information; and acknowledges that Executive will
develop and learn such information in the course of his employment. In light of
these facts and in consideration of Executive's employment with Company and
Company's agreement to compensate Executive on the terms set forth in Section 4
hereof, Executive covenants and agrees with Company as follows:
5.1 Covenant to Protect Confidential Information. Without limiting any other
obligation Executive may have with respect to use or nondisclosure of any
information, Executive shall protect all Company Confidential Information (as
defined below) at all times, both during and after the Term, and shall not
disclose to any Person, or otherwise use, except in connection with his duties
performed in accordance with this Agreement any Company Confidential
Information. For purposes of the Agreement, "Company Confidential Information"
means technical, business and other information of Company, whether or not in
writing, which derives value from not being generally known to the public or to
other Persons who can obtain value from its disclosure or use, including,
without limitation, technical or nontechnical data, compositions, devices,
methods, techniques, drawings, inventions, processes, financial data, financial
plans, product plans, lists or information concerning actual or potential
customers or suppliers, information regarding business plans and operations,
methods and plans of operation, marketing strategies, sales and distribution
plans or strategies, cost information, pricing strategies, and acquisition and
investment plans. Company Confidential Information includes information
disclosed by third parties that Company treats or is obligated to maintain as
confidential. The foregoing provision shall not apply to any confidential
information which is generally available to the public immediately prior to the
time of disclosure. The restrictions of this Section 5.1 shall expire one year
after the Termination Date. As used in this Agreement the "Termination Date"
means the last day Executive is employed by Company, whether separation is
voluntary or involuntary and with or without cause.
5.2 Covenants against Competition. Without limiting any other restrictive
covenant or obligation to which executive may be subject hereunder, under any
other agreement or under applicable law, Executive shall not, except on behalf
of Company or an affiliate of Company, at any time during the period commencing
on the date of this Agreement and continuing for the period set out below after
the Termination Date, whether alone or with any other Persons as a partner,
officer, director, employee, agent, shareholder, consultant sales representative
or otherwise:
(a) for a period of one year following termination from employment, without
cause, Executive shall not engage in any business activity that is competitive
with the business the Company was engaged in at time of Executive's termination.
In consideration of the initial one-year period of noncompetition as described
in this section, Executive shall receive the compensation set out in Paragraph
7.2(c).
(b) for a period of two years following termination, for any reason, whether
with or without cause, whether voluntary or involuntary, Executive shall not
solicit or assist in the solicitation of any customer who is, at the time of
Executive's termination from employment with Company, for the purpose of
obtaining the patronage of such customer for purposes which are competitive to
those of the Company at the time of Executive's termination.
(c) for a period of one year following termination of employment, for any
reason, whether with or without cause, whether voluntary or involuntary,
Executive shall not solicit or assist in the solicitation of, any Person
employed by Company in any capacity (including without limitation as an employee
or independent contractor), to terminate such employment, whether or not such
Person is employed pursuant to a contract with Company and whether or not such
Person is employed at will.
The foregoing provisions of this Section 5.2 shall not prohibit Executive
from owning, not to exceed 3%, of the outstanding stock on any publicly traded
corporation that might be deemed a competitor of the Company.
6. Inventions, Copyrights, Etc.
6.1 Inventions. - Executive shall disclose promptly to Company (which shall
receive it in confidence), and only to Company, any invention or ideas of
Executive (developed alone or with others) conceived or made during Executive's
employment by Company any such invention or idea in any way connected with
Executive's employment or related to Company's business, research or
development, or demonstrably anticipated research or development, and will
cooperate with Company and sign all documents deemed necessary by Company to
enable it to obtain, maintain, protect and defend patents covering such
inventions and ideas and to confirm Company's exclusive ownership of all rights
in such inventions, ideas and patents, and irrevocably appoints Company as his
agent to execute and deliver any assignments or documents Executive fails or
refuses to execute and deliver promptly, this power and agency being coupled
with an interest and being irrevocable. This constitutes Company's written
notification that this assignment does not apply to an invention for which no
equipment, supplies, facility or trade secret information of Company was used
and which was developed entirely on Executive's own time, unless (a) the
invention relates (i) directly to the business of Company, or (ii) to Company's
actual or demonstrably anticipated research or development, or (b) the invention
results from any work performed by Executive for Company.
6.2 Work for Hire Acknowledgement; Assignment. Executive acknowledges that
Executive's work on and contributions to documents and other expressions in
tangible media relating to the business of the Company (collectively, "Works")
are within the scope of Executive's employment and part of Executive's duties
and responsibilities for Company and its affiliates, and are, and at all times
shall be regarded as, "work made for hire" as that term is used in the United
States Copyright Laws. Without limiting this acknowledgment Executive assigns,
grants and delivers exclusively to Company all rights, titles, and interests in
and to any such Works, and all copies and versions, including all copyrights and
renewals, Executive will execute and deliver to Company, its successors and
assigns, any assignments and documents Company requests for the purpose of
establishing evidencing, and enforcing or defending its complete, exclusive,
perpetual and worldwide ownership of all rights, titles,
and interest of every kind and nature, including all copyrights, in and to the
Works, and Executive constitutes and appoints Company as its agent to execute
and deliver any assignments or documents Executive fails or refuses to execute
and deliver, this power and agency being coupled with an interest and being
irrevocable.
6.3 Return of Company Documents and Equipment. At the end of employment, or at
any time upon Company's request, Executive shall deliver to Company all material
files, customer lists, price lists, bids, specifications, forms, software
financial data, papers and other documents, including all copies of the
foregoing (including those contained in magnetic media or other forms of
computer storage); all computers, modems, diskettes, samples, credit cards,
keys, security passes, tools, vehicles and equipment and all other materials and
other property in his possession or control that relate to the Company Business
or his employment with Company, all of which at all times shall be the property
of Company unless otherwise agreed by Company in writing.
7.0 Termination.
7.1 By Either Party. Either party may terminate the Executive's employment under
this Agreement, with or without cause, by giving the other party not less than
thirty days advance written notice thereof.
7.2 Other Terminations Without Cause. Executive's employment under this
Agreement shall terminate immediately upon the occurrence of one of the
following events:
(a) the death of Executive;
(b) termination by Company on written notice of termination after Executive
becomes unable to perform his services by reason of illness or which illness or
incapacity results in his failure to discharge his duties under this Agreement
for an aggregate total of 30 days (whether consecutive or nonconsecutive) during
any 90 day period; or
(c) termination of Executive's employment by Company without cause at Company's
sole discretion on written notice of termination, provided that if Company
terminates under this Section 7.2(c) Company shall pay to Executive his regular
salary (as determined by the amount Executive is paid on an annual basis during
his final year of employment) for a period of one year, following termination
from employment. This salary continuation for a period of one year shall be
consideration for enforcement of the nondisclosure provisions of Section 5. and
the noncompetition provisions of Section 5.2(a) and Section 6 hereof. Executive
shall continue to receive his salary for a period of one year from the date of
termination under this Section but without any other employee benefits received
by Executive prior to his termination. The foregoing provision is not intended
to and shall not extend any period during which Executive may be eligible for
any post employment benefits under any benefit plan, applicable law,
or otherwise, Executive's employment ending and any such period commencing for
all purposes on the Termination Date set forth in Company's notice of
termination under this Section 7.2(c).
7.3 By Executive for Cause. Executive shall have the right to terminate his
employment under this agreement on written notice to Company and receive the
salary set forth in Section 7.2(c) if Company has: (a) failed to make any
payments due to Executive under this Agreement and such failure has not been
cured within thirty days after written notice of such failure from Executive to
Company, or (b) otherwise materially breached this Agreement and such breach, if
capable of cure, has not been cured within thirty days after written notice of
such breach from Executive to Company.
7.4 By Company for Cause. The Executive's employment may be terminated effective
immediately by the Company for "cause" by notice of termination to the
Executive. "Cause" for such termination shall include, but not be limited to,
the following: (i) Dishonesty of the Executive with respect to the Company or
any of its subsidiaries; (ii) Willful misfeasance or nonfeasance of duty
intended to injure or having the effect of injuring the reputation, business or
business relationships of the Company or any of its subsidiaries or any of their
respective officers, directors or employees; (iii) Conviction of the Executive
upon a charge of any crime involving moral turpitude or which could reflect
unfavorably upon the Company or any of its subsidiaries; (iv) Willful or
prolonged absence from work by the Executive (other than by reason of disability
due to physical or mental illness) or failure, neglect or refusal by the
Executive to perform his duties and responsibilities without the same being
corrected upon ten (10) days prior written notice: or (v) Breach by the
Executive of any of the covenants contained in this agreement.
8. Other Employees. Nothing in this Agreement shall limit Company's discretion
to employ other personnel on such terms and conditions and for such position as
may be satisfactory to Company.
9. Insurance. Company may obtain, in the name and for the benefit of Company,
such life, disability, and other insurance policies on Executive as Company may
from time to time determine to be in the interest of Company. Executive shall
take such medical and physical examinations which Company may from time to time
reasonable request, including any examination required to obtain such insurance
policies.
10. No Conflicting Obligations. Executive represents and warrants that he is not
subject to any noncompetition agreement, nondisclosure agreement, employment
agreement, or any other contract of any nature whatsoever, oral or written, with
any Person other than Company, which will cause a breach of or default in or
which is in any way inconsistent with, the terms and provisions of this
Agreement except as noted in Section 3.
11. Notice to Future Employers. If Executive leaves the employ of Company for
any reason, (a) Executive shall, during the two years following termination of
Executive's employment with Company, inform any subsequent employers or business
partners of the existence and provisions of this Agreement and, if requested,
provide a copy of this
Agreement to such employer or business partner, and (b) Company may, at any
time, notify any future employer or business partner of Executive of the
existence and provisions at the Agreement.
12. Miscellaneous. This Agreement shall inure to the benefit of and be binding
upon Company, and its successors and assigns, and Executive and his heirs,
executors, administrators and personal representatives. This Agreement may not
be assigned by Executive or by Company, except that Company may assign its
rights under this Agreement without the written consent of Executive to any
affiliate of Company providing services to Company or in connection with any
transfer of Company or of any substantial part of the Company Business (and such
assignment shall not constitute a termination of Executive's employment by
Company for purposes of the Agreement); provided, however, that such affiliate
or transferee shall be obligated to perform this Agreement in accordance with
its terms.
12.1 Entire Agreement. This Agreement, including any attachments, contains the
entire agreement between the parties and no statement, promises or inducements
made by either party hereto, or agent of either party hereto, or agent of either
party, which is not contained in this Agreement, shall be valid or binding; and
this Agreement may not be enlarged, amended, modified or altered except in a
writing signed by Company and Executive and specifically referencing this
Agreement. Commencement of Executive's employment hereunder shall constitute,
automatically and without further action by the parties, a termination of any
existing employment agreement between Executive and Company effective on the
date of such event, provided that salary and other rights and obligations of the
parties accrued under any such agreement prior to the effective date hereof
shall not, except as otherwise expressly provided herein, be affected by such
termination and shall be paid or satisfied when due in the ordinary course. The
provisions of this Agreement do not in any way limit or abridge any rights of
Company or any affiliate under the laws of unfair competition, trade secret,
copyright, patent, trademark or any other applicable laws, all of which are in
addition to and cumulative of the rights of Company under this Agreement.
12.2 Provisions Severable. If any provision or covenant, or any part thereof, of
this Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, then such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
the remaining provisions or covenants, or any part thereof, of this Agreement,
all of which shall remain in full force and effect. Without limiting the
foregoing, although the parties have, in good faith, used their best efforts to
make the covenants in Section 5 reasonable in all respects and do not anticipate
or intend that any court of competent jurisdiction would conclude otherwise or
would find it necessary or appropriate to reform any such covenant, if any such
covenant is held by a court of competent jurisdiction to be unreasonable,
arbitrary or against public policy, such covenant will be considered to be
divisible with respect to scope, time and geographic area, and such lesser
scope, time, and geographic area, or all of them, as a court of competent
jurisdiction may determine to be reasonable, not arbitrary, and not against
public policy, will be effective, binding and enforceable against Executive.
12.3 Remedies. Executive acknowledges that if he breaches or threatens to breach
his covenants and agreements in this Agreement, then his actions may cause
irreparable harm and damage to Company which could not be adequately compensated
in damages. Accordingly, if Executive breaches or
threatens to breach this Agreement, then Company shall be entitled to injunctive
relief, in addition to any other rights or remedies of Company hereunder or
otherwise. Upon any breach of this Agreement by Company, Executive shall be
entitled to such rights and remedies as may be allowed by law or in equity.
12.4 Waiver. Failure of either party to insist, in one or more instances, on
performance by the other in strict accordance with the terms and conditions of
this Agreement shall not be deemed a waiver or relinquishment of any right
granted in this Agreement or of the future performance of any such term or
condition or of any other term or condition of this Agreement, unless such
waiver is contained in a writing signed by the party making the waiver and
specifically referencing this Agreement.
12.5 Notices. All notices and other communications required or permitted to be
given or made hereunder shall be in writing and sent by pre-paid first class
certified or registered mail, return receipt requested, or by facsimile
transmission, to the intended recipient thereof at his or its address or
facsimile number set forth below or last designated address and facsimile
number:
If to Company:
Advanced Business Sciences, Inc.
Attention: Chairman of Board
0000 Xxxxx 000xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Facsimile No:(000) 000-0000
If to Executive:
Xxxxxxxx X. Xxxx
000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile No.(000) 000-0000
Any such notice or communication shall be deemed to have been duly given
immediately (if given by facsimile confirmed by mailing a copy thereof to the
recipient in accordance with this Section 12.6 on the date of such facsimile),
or three days after mailing (if given or made by mail), and in proving same it
shall be sufficient to show that the envelope containing the same was delivered
to the delivery or postal service and duly addressed, or that recipient of a
facsimile was confirmed by the recipient as provided above. Any Person entitled
to notice may change the address(es) or facsimile number(s) to which notices or
other communications to such Person shall be delivered, mailed or transmitted by
giving notice thereof to the parties hereto in the manner provided herein. No
notice or communication to Company shall be deemed complete unless also made to
Advanced Business Sciences, Inc., in accordance with this Section 12.5.
12.6. Survival. Executive's obligations pursuant to Sections 5 and 6 shall
survive the Termination Date and any termination of this Agreement for the
period(s) therein provided. Except as expressly provided above in Section 7.2(c)
or as required by law or the express terms of any employee benefit
plan in which Executive participates, neither Executive nor his heirs,
executors, administrators or personal representatives, shall be entitled to any
salary, bonus or other compensation or any benefits during or for any period
after the Termination date.
12.7. Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
on such counterpart.
12.8. Headings. Section and other headings contained in this Agreement are for
reference purposes only and are in no way intended to define, interpret,
describe or otherwise limit the scope, extent or intent of this Agreement or any
of its provisions.
12.9. Withholding . Anything in this Agreement to the contrary notwithstanding,
all payments required to be made by Company hereunder to Executive shall be
subject to the withholding of such amounts relating to taxes as Company may
reasonably determine it should withhold pursuant to any applicable law or
regulation.
12.10. Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and construed and enforced in accordance
with the laws of the State of Nebraska, without regard to its principles of
conflicts of law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
EXECUTIVE
Name - Xxxxxxxx X. Xxxx
------------------------------------------------
--------------
Signature Date
COMPANY:
Avanced Business Sciences, Inc.
BY___________________________________________
Title Date
