EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made and entered into as of the 9th day of October, 2012 (the “Agreement”), by and between BENACO, INC., a Nevada corporation (the “Company”), having its principal place of business at 0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxx Xxxx 00000, and Xxxxxxx Xxxxxxxxxx (the “Employee”), having an address at 0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxx Xxxx 00000 (the Employee and the Company are collectively referred to as the “Parties”).
WITNESSETH:
WHEREAS, the Company is primarily engaged in the business of occupational risk management (the “Business”); and
WHEREAS, the Employee has represented that he has the experience, background and expertise necessary to enable him to be the Company’s Chief Executive Officer; and
WHEREAS, based on such representation, and the Company’s reasonable due diligence, the Company wishes to employ the Employee as its President and in such other capacities as mutually agreed to by the Company and the Employee, and the Employee wishes to be so employed, in each case, upon the terms hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements herein contained, and other good and valuable consideration, the Parties agree as follows:
1. Definitions. As used herein, the following terms shall have the following meanings:
1.1 “Affiliate” means any Person controlling, controlled by or under common control with the Company.
1.2 “Board” means the Board of Directors of the Company.
1.3 “Cause” means:
| 1.3.1 | The Employee’s persistent failure to perform his duties and responsibilities as set forth in a mutually agreed upon written job description as designated by the Board after delivery of written notice to the Employee detailing the basis for such failure, with a reasonable opportunity for the Employee to cure such failure (not to exceed 30 days); provided, however, if the Employee shall be diligently pursuing a cure, the Company may, in its discretion, extend such period for a reasonable period of time; | |
| 1.3.2 | The Employee’s knowing participation in any activity that is competitive with or injurious to the Company; |
| 1.3.3 | The Employee’s commission of any fraud against the Company, or unauthorized use or appropriation of any funds or properties of the Company for the Employee’s sole personal gain; or | |
| 1.3.4 | The Employee’s conviction of an offense constituting a felony involving moral turpitude; |
1.4 “Common Stock” means the Company’s $.001 par value per share common stock.
1.5 “Date of Termination” means (a) in the case of a termination for which a Notice of Termination (as hereinafter defined in Section 5.4.3) is required, the date of actual receipt of such Notice of Termination or, if later, the date specified therein, as the case may be, and (b) in all other cases, the actual date on which the Employee’s employment terminates during the Term of Employment (as hereinafter defined in Section 3) (it being understood that nothing contained in this definition of “Date of Termination” shall affect any of the cure rights provided to the Employee or the Company in this Agreement).
1.6 “Disability” means Employee’s inability to render, for a period of nine (9) consecutive months, services hereunder due to his physical or mental incapacity.
1.7 “Effective Date” means October 9, 2012.
1.8 “Person(s)” means any individual or entity of any kind or nature, including any other person as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, and as used in Sections 13(d) and 14(d) thereof.
1.9 “Prospective Customer” shall mean any Person which has either (a) entered into a nondisclosure agreement with the Company or any Affiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any Affiliate.
1.10 “Severance Payments” shall mean any payments made under Section 5.3.4.
2. Employment.
2.1 Agreement to Employ. Effective as of the Effective Date, the Company hereby agrees to employ Employee, and Employee hereby agrees to serve, subject to the provisions of this Agreement, as a director, officer and employee of the Company.
2.2 Duties. Employee shall serve as the Company’s Chief Executive Officer and in such other capacities as may be mutually agreed to by the Company and the Employee and shall have such responsibilities as designated by the Company’s Board that are not inconsistent with applicable laws, regulations and rules. The Employee shall report directly to the Company’s Board as circumstances may require.
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3. TERM OF AGREEMENT. Unless the Employee’s employment shall sooner terminate pursuant to Section 5, The Company shall employ the Employee for a term commencing on the Effective Date and ending on the 5th anniversary thereof, which term shall be automatically renewed for additional successive 1-year terms unless notice of non-renewal is received by Employee from the Company or by the Company from Employee within ninety (90) days of the end of the initial 5 year term or a subsequent renewal term. The period during which Employee is employed pursuant to this Agreement shall be referred to as the “Term” or the “Term of Employment”.
4. COMPENSATION.
4.1 Salary. Employee’s salary during the Term shall be $300,000 per year (the “Salary”) payable monthly on the first day of each month. Payment of Salary to Employee may be deferred at the sole discretion of Employee. In the event of any such deferral, Employee’s salary shall be accrued. All applicable withholding taxes shall be deducted from such payments. The entire Board, or if the Company has such a committee, the Board’s Compensation Committee, will review Employee’s Salary at least once per year and may, in its discretion, increase (but not decrease) the Salary in accordance with the Company’s compensation policies. Notwithstanding the foregoing, the Employee’s Salary shall be adjusted for inflation on an annual basis on the anniversary date of this Agreement.
4.2 Cash Bonus. In addition to the annual Salary provided for in Section 4.1 above, if the Company meets the annual performance targets set forth on Schedule 4.2 hereof, the Employee shall be entitled to an annual bonus of a minimum of 1 year’s annual Salary with respect to each year in which the targets are met. Such bonuses may be deferred at the discretion of the Employee.
4.3 Equity Compensation. As soon as practicable after the Effective Date, Employee shall be awarded options to purchase an aggregate of 776,086 shares of Common Stock to be vested over a three-year term, beginning on the date of this Agreement in accordance with a stock incentive plan to be approved by the Board. In the future, Employee shall be awarded such other equity compensation approved by the entire Board or Compensation Committee of the Board upon the annual reviews of the Employee’s performance, including additional options and/or Restricted Common Stock grants under the Company’s stock incentive plans. All equity grants, if any, shall be governed by the terms and conditions of the governing equity grant agreement(s) and the stock incentive plan or any other equity plan of the Company.
4.4 Health Insurance; Other Employee Benefits. During the Term, Employee shall receive full family plan coverage under any health and dental insurance plans that the Company has as of the Effective Date. The Company shall pay Employee’s COBRA for a period of 12 months from the Effective Date. In addition, during the Term, Employee shall be eligible to participate in any other employee benefit plan, program or practice, in each case, sponsored by the Company for its executives or employees on terms and conditions set forth in such programs and plans (as amended from time to time).
4.5 Vacation. The Employee shall be entitled to six (6) weeks of paid vacation per calendar year taken at such times so as to not reasonably impede his duties hereunder. Vacation days that are not taken may be carried over into future years or compensated per diem prorated at the discretion of Employee. Illness days shall be consistent with the Company’s standard policies and personal appearances, educational seminars, university course work, service to government and other compensated or non-compensated business-related days away from duties will not be calculated against entitled vacation days.
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4.6 Monthly Allowances. The Employee shall receive an allowance of $5,000 per month.
4.7 Business Expenses. The Employee shall be reimbursed by the Company for all out of pocket ordinary and necessary expenses incurred by the Employee in the performance of his duties hereunder on behalf of the Company and provided with Company credit card. The Employee shall also promptly be reimbursed by the Company for all out of pocket expenses incurred by the Employee prior to the execution of this Agreement in connection with the business of the Company, the preparation for the acquisition of companies by the Company and the financing of the Company, in each case upon presentation of reasonable documentation for such expenses.
4.8 Key man and Disability Insurance. The Company shall purchase and maintain (a) a key man policy in the amount of $10,000,000 on the life of Employee during the Term, or such other amount as the Board may determine to be reasonable, with not less than $2,000,000 of the proceeds payable following Employee’s death directly to the Employee’s estate or as otherwise directed by the Employee and (b) a disability insurance policy for the Employee providing for benefits in an amount equal to the amount of Employee’s annual Salary as provided for in Section 4.1 hereof. The Employee agrees to assist the Company in obtaining such insurance policies by, among other things, submitting to the customary examinations and correctly preparing, signing and delivering application and other documents as may reasonably be required.
5. TERMINATION.
5.1 Termination Due to Death or Disability.
| 5.1.1 | Death. Upon the Employee’s death, the Employee’s estate or the Employee’s legal representative, as the case may be, shall be entitled to the Employee’s accrued and unpaid Salary through the date of death, plus all other compensation and benefits that were vested through the date of the Employee’s death, including, but not limited to, any vested and unpaid or granted and unpaid annual bonus, vacation days and equity award(s) for the fiscal year prior to the Employee’s death. Employee’s estate or the Employee’s legal representative, as the case may be, shall be entitled to Employee’s full equity ownership in the Company according to Employee’s will and own personal inheritance plan or the laws of intestacy, as the case may be. | |
| 5.1.2 | Disability. In the event of the Employee’s Disability (it being understood that such period will commence nine months from the first date that Employee is unable to work), this Agreement shall terminate and (a) Employee shall be entitled to receive the Employee’s accrued and unpaid salary through the date of Disability, plus all other compensation and benefits that were vested through the date of Disability, including, but not limited to, any vested and unpaid or granted and unpaid annual bonus, vacation days and equity award(s) for the fiscal year prior to the Employee’s Disability; and (b) any unvested equity compensation will continue to vest for a period of the later of (i) three (3) years after the first date that Employee is unable to work or (ii) the remainder of the current Term. |
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5.2 Termination by the Company for Cause. The Company may terminate Employee’s employment hereunder for Cause by delivery of written notice to the Employee specifying the cause or causes relied upon for such termination. If the Company terminates the Employee’s employment hereunder for Cause, the Employee shall be entitled only to (a) the Employee’s accrued and unpaid Salary through the Date of Termination; and (b) all other compensation and benefits that were vested through the Date of Termination, including, but not limited to, any vested and unpaid or granted and unpaid annual bonus and equity award(s) through the Date of Termination.
5.3 Termination Without Cause. The Company may terminate the Employee’s employment hereunder without Cause, which shall include the Company’s delivery of a notice of non-renewal to Employee pursuant to Section 3. If the Company terminates the Employee’s employment hereunder without Cause, other than due to death or Disability, the Employee shall be entitled to only the following:
| 5.3.1 | Employee’s accrued and unpaid Salary and a cash payment of accrued vacation days (at the current rate of the Employee’s Salary) through the Date of Termination; | |
| 5.3.2 | all other compensation and benefits that were granted through the Date of Termination, including but not limited to, any granted and unpaid annual bonus and equity award(s) through the Date of Termination. All such granted equity awards(s) that have not vested shall immediately vest upon the Date of Termination; | |
| 5.3.3 | The Company shall continue or cause to be continued at the expense of the Company the Employee’s family medical insurance benefits in effect immediately prior to the Date of Termination until the end of the Term; and | |
| 5.3.4 | Employee shall be entitled to Severance Payments as set forth below: |
| 5.3.4.1 | In the event that during the Term, the Company terminates Employee’s employment hereunder without Cause or Employee terminates the employment for Good Reason, as defined below in Section 5.4, Employee shall be entitled to Severance Payments in the aggregate amount equal to the Salary that he would have received for the period from the Date of Termination until the earlier of (i) 18 months from the Date of Termination, or (ii) the end of the current Term; |
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| 5.3.4.2 | All Severance Payments set forth in this Section 5.3.4 are subject to the following conditions: (a) the Employee shall perform such reasonable duties as may be requested by the Company during the period the Severance Payments set forth in this Section 5.3.4 are made; (b) the Employee shall refrain from disparaging the Company and any of its directors, officers, employees or Affiliates; and (c) the Employee cooperates with the Company in all reasonable requests to transition the Employee’s replacement. Subject to the Employee’s compliance with the foregoing, all Severance Payments set forth in this Section 5.3.4 shall be paid to the Employee in equal installments over the balance of the payment period, in accordance with the Company’s regularly scheduled payroll dates, commencing with the Company’s first regularly scheduled payroll date that occurs after the Date of Termination. |
5.4 Termination by Employee. Any termination of this Agreement by the Employee by formal notice shall have the same effect as a termination by the Company for Cause, unless the Employee terminates employment for “Good Reason” as defined below. A termination for Good Reason shall have the same effect as a termination by the Company without Cause.
| 5.4.1 | For purposes of this Agreement “Good Reason” shall mean (a) a material diminution in Employee’s duties and responsibilities, or material change in reporting structure not agreed to by the Employee; (b) the Company shall default in the performance of any of its material obligations under this Agreement (provided that, in any such case, the Employee shall have provided the Board with written notice of such default and not less than sixty (60) days to cure such default); (c) the occurrence of a Change of Control (as defined below); or (d) the Company retaliates against the Employee for objecting to any illegal conduct by The Company. | |
| 5.4.2 | For purposes of this Agreement, “Change in Control” shall mean: (a) any acquisition by any person or any persons acting together which would constitute a “group” for purposes of Section 13(d) of the Securities Exchange Act of 1934 (a “Group”) of fifty percent (50%) or more of the total voting power of all classes of capital stock of the Company entitled to vote generally in the election of the Board; (b) any other acquisition by any person or group of the power to elect, appoint or cause the election or appointment of at least a majority of the members of the Board through beneficial ownership of the capital stock or otherwise; (c) the merger or consolidation of the Company as a result of which persons who were stockholders of the Company immediately prior to such merger or consolidation, do not, immediately thereafter, own, directly or indirectly, 50% or more of the combined voting power entitled to vote generally in the election of directors of the merged or consolidated company; (d) the sale, transfer or other disposition of all or substantially all of the assets of The Company through one transaction or a series of related transactions to one or more persons or entities who are not, immediately prior to such sale, transfer or other disposition, stockholders of the Company immediately prior to such sale(s), transfer(s) or other disposition(s). Notwithstanding the foregoing, or anything to the contrary contained herein, it shall not be a Change in Control if any of the foregoing transactions are approved in writing by persons who, as of the date of this Agreement, in the aggregate, own more than 50% of the voting stock of the Company or if the change of control occurs as a result of or in connection with a merger or share exchange between or involving the Company or acquisitions of other business by the Company which are currently contemplated. |
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| 5.4.3 | Notice of Termination. Any termination of the Employee by the Company shall be communicated by a notice of termination to the Employee given in accordance with Section 7.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) if the termination date is other than the date of receipt of such notice, specify the dates on which the Employee’s employment is to be terminated (which date shall not be earlier than the date on which such notice is given). |
5.5 Payment. Except as otherwise provided in this Agreement, any payments to which the Employee shall be entitled under this Section 5, including, without limitation, any economic equivalent of any benefit, shall be made as promptly as possible following the Date of Termination, but in no event more than 30 days after the Date of Termination. If the amount of any payment due to the Employee cannot be finally determined within 30 days after the Date of Termination, such amount shall be reasonably estimated on a good faith basis by The Company and the estimated amount shall be paid no later than thirty (30) days after such Date of Termination. As soon as practicable thereafter, the final determination of the amount due shall be made and any adjustment requiring a payment to the Employee shall be made as promptly as practicable.
5.6 No Exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Employee’s continuing or future participation in any plan, program, policy or practice provided by the Company or its subsidiaries, if any, and for which the Employee may qualify, nor shall anything herein limit or otherwise affect such rights as Employee may have under any other contract or agreement with the Company or its subsidiaries, if any, at or subsequent to the Date of Termination (“Other Benefits”), which such Other Benefits shall be payable in accordance with such plan, policy, practice or program or contract or agreement, except as explicitly modified by this Agreement. Notwithstanding the foregoing, if Employee receives payments and benefits pursuant to Section 5.3 of this Agreement, the Employee shall not be entitled to any severance pay or benefits under any severance plan, program or policy of the Company, unless otherwise specifically provided therein in a specific reference in or to this Agreement.
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6. NON-COMPETITION: NON-DISCLOSURE; INVENTIONS.
6.1 Trade Secrets. The Employee acknowledges that his employment position with the Company is one of trust and confidence. The Employee further understands and acknowledges that, during the course of the Employee’s employment with the Company, the Employee will be entrusted with access to certain confidential information, specialized knowledge and trade secrets which belong to the Company, including, but not limited to, its methods of operation and developing customer base, its manner of cultivating customer relations, its practices and preferences, current and future market strategies, formulas, patterns, patents, devices, secret inventions, processes, compilations of information, records, and customer lists, all of which are regularly used in the operation of the Company’s business and which the Employee acknowledges have been acquired, learned and developed by the Company only through the expenditure of substantial sums of money, time and effort, which are not readily ascertainable, and which are discoverable only with substantial effort, and which thus are the confidential and the exclusive property of the Company (hereinafter “Trade Secrets”). The Employee covenants and agrees to use his best efforts and utmost diligence to protect those Trade Secrets from disclosure to third parties. The Employee further acknowledges that, absent the protections afforded the Company in Section 7, Employee would not be entrusted with any of such Trade Secrets. Accordingly, the Employee agrees and covenants (which agreement and covenant shall survive the termination of this Agreement regardless of the reason) as follows:
| 6.1.1 | The Employee will at no time take any action or make any statement that will disparage or discredit the Company, any of its subsidiaries or their respective products or services; | |
| 6.1.2 | During the period of the Employee’s employment with the Company and for eighteen (18) months immediately following the termination of such employment, the Employee will not disclose or reveal to any person, firm or corporation other than in connection with the business of the Company or as may be required by law, any Trade Secret used or useable by the Company or any of its subsidiaries, divisions or Affiliates (collectively, the “Companies”) in connection with their respective businesses, known to the Employee as a result of his employment by the Company, or other relationship with the Companies, and which is not otherwise publicly available. The Employee further agrees that during the term of this Agreement and at all times thereafter, he will keep confidential and not disclose or reveal to any person, firm or corporation other than in connection with the business of the Companies or as may be required by applicable law, any information received by him during the course of his employment with regard to the financial, business, or other affairs of the Companies, their respective officers, directors, customers or suppliers which is not publicly available; |
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| 6.1.3 | During the term of the Agreement and, for a period of six (6) months immediately following the termination of the Employee’s employment with the Company, Employee shall not: compete, or participate as a shareholder, director, officer, partner (limited or general), trustee, holder of a beneficial interest, employee, agent of or representative in any business competing directly with the Companies without the prior written consent of the Company, which may be withheld in the Company’s sole discretion; provided, however, that nothing contained herein shall be construed to limit or prevent the purchase or beneficial ownership by Employee of less than five percent of any security registered under Section 12 or 15 of the Securities Exchange Act of 1934; |
6.2 Successors.
| 6.2.1 | Employee. This Agreement is personal to the Employee and, without the prior express written consent of the Company, shall not be assignable by the Employee, except that Employee’s rights to receive any compensation or benefits under this Agreement may be transferred or disposed of pursuant to testamentary disposition, intestate succession or a qualified domestic relations order or in connection with a Disability. This Agreement shall inure to the benefit of and be enforceable by the Employee’s estate, heirs, beneficiaries, and/or legal representatives. |
| 6.2.2 | The Company. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. |
6.3 Inventions and Patents. The Company shall be entitled to the benefit and exclusive ownership of any inventions or improvements in drugs, products, processes, or other things that may be made or discovered by the Employee while he is in the service of the Company, and all patents for the same.
7. MISCELLANEOUS.
7.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold the Employee harmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”), incurred in connection with any proceeding arising out of, or related to, Employee’s employment by the Company, other than any such Losses incurred as a result of the Employee’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to the Employee any expenses, including attorney’s fees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred by the Employee in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptly upon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of the Employee to repay the amounts so advanced if it shall ultimately be determined pursuant to any non-appealable judgment or settlement that the Employee is not entitled to be indemnified by the Company or any subsidiary thereof. The Company will provide the Employee with coverage under all director’s and officer’s liability insurance policies which is has in effect during the Term, with no deductible to the Employee.
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7.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws of the State of New York, applied without reference to principles of conflict of laws.
7.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors or legal representatives.
7.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by hand-delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Employee:
Xxxxxxx Xxxxxxxxxx
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
With a copy to (which shall not constitute notice):
Ofsink, LLC
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx
Facsimile: 212-688-7273
If to the Company:
Benaco, Inc.
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective when actually received by the addressee.
7.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, social security and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law or regulation.
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7.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.
7.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.
7.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.
7.9 Survivorship. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Employee’s employment hereunder to the extent necessary to the intended preservation of such rights and obligations.
7.10 Waiver. Either Party’s failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.
7.11 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed more severely against any party. This Agreement may be signed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.
7.12 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice in connection with the negotiation and execution of this Agreement.
7.13 No Mitigation. Employee shall have no duty to seek other employment and the amounts, benefits and entitlements payable to the Employee hereunder or otherwise shall not be subject to reduction, offset or repayment for any compensation received by the Employee from services provided by the Employee following the termination of the Employee’s employment with the Company.
7.14 Section 409A.
| 7.14.1 | The intent of the parties is that payments and benefits under this Agreement comply with Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively, “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Employee by Code Section 409A or damages for failing to comply with Code Section 409A. |
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| 7.14.2 | A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” Notwithstanding anything to the contrary in this Agreement, if the Employee is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered deferred compensation under Code Section 409A payable on account of a “separation from service,” such payment or benefit shall not be made or provided until the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of the Employee, and (B) the date of the Employee’s death, to the extent required under Code Section 409A. Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this Section 8.14 (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Employee in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein. | |
| 7.14.3 | To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Code Section 409A, (A) all such expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Employee, (B) any right to such reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (C) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year. | |
| 7.14.4 | For purposes of Code Section 409A, the Employee’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company. | |
| 7.14.5 | Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A. |
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7.15 Adjustment. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that as a result of any payment or distribution by the Company to or for Employee’s benefit whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Payments”), the Employee would be subject to the excise tax imposed by Sections 409A, 280G or Section 4999 of the Internal Revenue Code or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), Employee shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that, after payment by the Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes and Excise Tax imposed upon the Gross-Up Payment, Employee is in the same after-tax position as if no Excise Tax had been imposed upon Employee with respect to the Payments, provided further that such Gross-Up Payment shall be made prior to April 15th of the calendar year following the year in which Employee receive any payment or distribution from the Company which gives rise to a Gross-Up Payment.
-- Signature page follows --
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
| EMPLOYEE: | BENACO, INC. | ||
| /s/ Xxxxxxx Xxxxxxxxxx | By: | /s/ Xxxxxxx Xxxxxx | |
| Name: Xxxxxxx Xxxxxxxxxx | Name: | Xxxxxxx Xxxxxx | |
| Title: | Director | ||
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SCHEDULE 4.2
Bonus Milestones
| Year | Gross Revenues | |||
| 1 | $10,000,000 | |||
| 2 | $12,000,000 | |||
| 3 | $14,400,000 | |||
| 4 | $17,280,000 | |||
| 5 | $20,736,000 |
For the purposes of this Agreement, “Gross Revenues” shall mean the total revenues of the Company for each full fiscal year as reported in the Company’s audited annual financial statements.
