Exhibit 99.1
[CDEX INC. LOGO]
The Technology Development Company
EMPLOYMENT AGREEMENT OF XXXXXXX XXXXXXXX
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of November 11, 2008
(the "Effective Date"), by and between CDEX, Inc., a Nevada corporation (the
"Company"), and Xxxxxxx XxXxxxxx (the "Employee"). Employee and Company are
sometimes referred to as a Party" or collectively as the "Parties". The
undersigned covenant and agree as follows:
1. Employment Agreement. Subject to the terms and conditions set forth in
this Agreement, the Company agrees to employ the Employee, and the
Employee accepts employment with the Company, in accordance with the
terms and provisions of this Agreement.
2. Term. The term of this Agreement shall begin on the Effective Date and
the Agreement shall remain in effect for a term of one year or until
terminated pursuant to the termination provisions provided in Section
7, herein. On October 31 of each year, this Agreement shall be
extended automatically for additional one year terms unless terminated
in writing by either party upon thirty (30) days written notice prior
to the end of the term.
3. Services of the Employee. The Employee shall serve in the position of
Chief Financial Officer, and perform tasks as assigned by the Company
consistent with the position of Chief Financial Officer. The Employee
shall faithfully perform such services (the "Services"). The Employee
shall devote best efforts and attention to the performance of the
Services. The Employee shall not perform services that are similar in
nature to the Services for any other person or entity for
compensation, except by written permission of the Company.
4. Place of Performance. The Employee shall be based initially at such
office of the Company as the Company and Employee shall determine,
except for reasonable travel on Company business. If the Company
requires that the Employee relocated his/her place of performance to a
location more than 50 miles from the then-current office, the Company
shall pay or reimburse the Employee for the reasonable moving and
relocation expenses incurred by the Employee and his/her family to
establish a personal residence at the new location. The Employee shall
be initially assigned to the Tucson, Arizona office.
5. Compensation.
5.1 Salary. The Company shall pay the Employee an annual salary
of $105,000, which salary shall be reviewed annually. The
Company shall pay the Employee bi-weekly.
5.2 Bonus. At the discretion of the Company, the Employee shall
be eligible for performance bonuses. Bonuses (including
stock bonuses) may be distributed based on Company
performance and the Employee's role in that performance.
5.3 Benefits. The Employee shall be entitled to receive such
general employee benefits, including without limitation any
plans, programs, or arrangements providing for retirement
benefits, options and other equity based incentive
compensation, profit sharing, company-wide bonuses,
disability benefits, health and life insurance or vacation
and paid holidays as the Company shall establish or may make
available to its employees from time to time. Nothing
contained in this Agreement shall prevent the Company, at
any time or from time to time, from effecting modifications
in the benefits, including eliminating any or all of such
benefits, but only as a general reduction or elimination for
all senior executive officers of the Company.
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5.4 Vacation; Holidays. The Employee shall be entitled to all
public holidays as are observed by the Company and vacation
days in accordance with the applicable vacation policies of
the Company which shall initially be three weeks per year.
The Employee shall take vacation days upon reasonable notice
to the Chief Executive Officer of the Company at times not
inconsistent with the reasonable business needs of the
Company.
5.5 Equity Participation. In order to provide an incentive for
Employee to join the Company, the Company agrees to provide
to the Employee at the time of employment, 100,000 options
to purchase shares of Class A Common Stock (restricted) of
CDEX with 1/2 vesting in upon the first year anniversary of
employment and 1/2 vesting upon the second year anniversary
of employment if the Employee is still providing substantial
services to the Company on those dates (subject to Section
5.5.1 below). The strike price of the options shall be the
closing price of the stock on November 11, 2008. The
Employee agrees to comply strictly with all legal
requirements regarding the stock options, including those
related to distribution and restrictions associated with the
stock.
5.5.1 Exercise Period for Options. Each option may be
exercised for a period of five years after the
grant date, unless this Agreement is terminated.
If the Agreement is terminated, the Employee will
have ninety (90) days to exercise stock options
that have been previously granted. Upon the death
or Disability of the Optionee, the Employee will
have one (1) year to exercise stock options that
have been previously granted. Notwithstanding
anything to the contrary, herein or in the vesting
or exercise provisions of any stock option
agreement between the Company and the Employee,
after six months of employment and upon (i)
termination of the Employee without cause, (ii) a
Change of Control (as defined in the Company's
2003 Stock Option Plan) occurs, or (iii)
termination by the Employee for "good reason", all
unvested stock options granted by the Company to
the Employee pursuant to this Agreement, or
otherwise, shall immediately vest and become
exercisable and all stock options granted by the
Company to the Employee pursuant to this
Agreement, or otherwise, shall remain exercisable
for their full term (regardless of any provision
providing for earlier termination upon termination
of employment).
5.5.2 Compliance. The Employee acknowledges that the
issuance and/or registration of the Company's
stock must comply with all applicable laws and
regulations relating thereto. Accordingly, the
Employee agrees that he/she shall accept shares of
the Company's stock or options thereto, subject to
all applicable laws and regulations, and shall
provide and deliver to the Company all
information, certifications, and other
documentation as may be requested by the Company
as part of the Company's compliance with any
applicable laws and regulations relating to the
issuance and/or registration of any of the
Company's stock or stock options.
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6. Expenses. The Company shall reimburse the Employee for all reasonable
business and travel expenses incurred by the Employee that are
authorized by the Company. Reimbursement shall be made in accordance
with the policies of the company related to reimbursable expenses.
7. Termination of Employment. The Employee's services for the Company
will continue until terminated in accordance with the provisions of
this Section. Employment hereunder may be terminated (i) by either
Party upon two weeks prior written notice (the "Notice of
Termination"), or (ii) immediately upon the death of the Employee.
Both Parties acknowledge that the Employee is an employee at will. The
date given in the Notice of Termination as the last day of the
Employee's employment shall be deemed the "Date of Termination". This
Agreement shall terminate on the Date of Termination except as
otherwise provided in Section 13.4. The Company shall pay the Employee
the then current salary of the Employee through the date of
Termination and all other unpaid amounts, if any, to which the
Employee is entitled as of the Date of Termination, such as expenses
(Section 6) or any federally mandated benefit or right.
7.1 Compensation Upon Termination Without Cause or "Good
Reason". If the Employee is terminated by the Company
without cause or by the Employee for "Good Reason", in
addition to the amounts payable under Section 7 above, the
Company shall pay to the Employee on the date of termination
an amount equal to one month's salary. After the
probationary period, if the Employee is terminated without
cause while still within his contract term, the Company
agrees to compensate the Employee with one month's salary
plus the Employee's unvested stock options shall immediately
vest and become exercisable.
7.2 Good Reason. Good Reason shall mean (1) a material breach of
any provision of this Agreement by the Company, or (ii) if
the Company substantially reduces the Employee's
responsibilities or title, and Employee has discussed and
put in writing his concerns to the CEO or General Counsel.
7.3 Cause. For purposes of this Agreement, Cause shall be
limited to any of the following:
(i) Material breach of any provision of the Agreement
or Agreements referenced in Section 9;
(ii) The conviction of, or a plea of "No Contest" to, a
felony that damages the Company or its reputation;
(iii) The intentional fraud on, or willful
misappropriation of, funds or property belonging
to or rightfully claimed by the Company;
(iv) Except in cases involving mental or physical
incapacity or disability, willful misconduct or
gross negligence in connection with the
performance of duties that adversely impacts the
Company; or,
(v) The chronic use of alcohol, drugs or other similar
substances adversely affecting work performance.
8. Ownership of Intellectual Property.
8.1 The Business. The Parties acknowledge that the Company is
engaged in the development, marketing, and sale of certain
proprietary technologies, processes and related products in
the areas of chemical detection, technical processes, and
technical/ business services, and that the Company may also
from time to time become or may intend to become engaged in
other business endeavors (individually and collectively, the
"Business"). The Company shall be deemed to intend to become
engaged in a business endeavor if it has devoted or expended
any significant resources, either financial or human
resources, towards the proposed endeavor, either in planning
or implementing the undertaking of such planned endeavor.
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8.2 The Intellectual Property. In connection with this Agreement
and the performance of the Services, the Employee
acknowledge that there may exist now or may exist in the
future trade secrets, confidential information, technical
information, know-how, inventions, patents, discoveries
(whether or not patentable), copyrights, trademarks, service
marks, techniques, data, systems, methods, processes,
improvements, developments, enhancements, and modifications,
whether oral or written, or in recorded form, tangible or
intangible, and other proprietary rights, which are or may
be conceived, developed, designed or otherwise created,
modified, or improved by the Employee, in whole or in part,
or which the Employee may receive, produce, obtain, or learn
about, in whole or in part, in connection with the
performance of the Services or relating in any way or manner
to, or arising out of the Business and the operations of the
Company during the term of this Agreement, or which the
Employee may develop or make from or by reason of knowledge
gained from employment (collectively, the "Intellectual
Property"). The Employee agrees that all rights, title and
interest in and to the Intellectual Property shall belong to
the Company and shall be considered as "work made for hire".
The Employee shall make prompt and complete disclosure from
time to time to the Company of all Intellectual Property
developed by the Employee, either solely or in conjunction
with others.
8.3 Assignment of Rights to Intellectual Property. The Employee
hereby assigns to the Company any and all right, title and
interest that the Employee has now or may have in the future
in and to the Intellectual Property. The Employee agrees to
execute any instruments and to do all things reasonably
requested by the Company, both during and after the term of
this Agreement, to vest the Company with all ownership
rights in the Intellectual Property. If any Intellectual
Property can be protected by copyrights, patents,
trademarks, or service marks, then such copyright, patent,
trademark, or service xxxx, as may be applicable, shall be
owned solely, completely, and exclusively by the Company,
and the Employee shall execute such assignments and other
documents and provide such assistance as the Company may
reasonably request in order to protect the Company's
ownership of the Intellectual Property. The Employee hereby
appoints the Company as his/her attorney-in-fact to execute
any document that the U.S. Patent and Trademark Office, the
U.S. Copyright Office, or any other similar governmental or
quasi-governmental entity in any state or foreign country
shall require in order to establish, protect, and record the
Company's ownership of all of the rights, title and
interests in and to the Intellectual Property. This
appointment of the Company as the attorney-in-fact for the
Employee to act hereunder is irrevocable.
8.4 Survivorship. The terms of Section 9 shall survive the
termination of this Agreement and shall continue until the
later of (i) five (5) years after the Date of Termination,
or (ii) fifty (50) years after the Effective Date.
9. CDEX Agreements. As an express condition for the Company's agreement
to enter into this Agreement, and as a pre-condition to the
effectiveness of this Agreement, the Employee agrees, to the fullest
extent of the law, to (i) keep confidential and proprietary
information and the Intellectual Property of the Company confidential;
(ii) assign to the Company all of the ownership rights in and to any
intellectual property relating to the Company and its business (as
defined in clause (iii) below) that is developed, created, or
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discovered during the term of this Agreement; and (iii) agree not to
directly compete with the Company and its business of developing and
producing technology for the detection of controlled substances,
medications, explosives, and illicit drugs, or solicit the Company's
customers or employees during the period of employment with the
Company and for a period of one (1) year. A breach by the Employee of
this provision shall be deemed a material breach of this Agreement by
the Employee. As a condition of employment, Employee agrees to execute
a separate Non-Disclosure Agreement and Confidentiality Agreement and
a Non-Compete and Non-Solicitation Agreement.
10. Default. The Employee acknowledges that many of the provisions herein
are of a special and unusual character that have and will have a
unique value to the Company, the loss of which cannot adequately be
compensated in damage in an action at law. Any violation or attempted
violation of any provisions of Section 8, Section 9 or any provisions
of any of the CDEX Agreements by the Employee shall be deemed to be a
material breach of this Agreement. The Employee hereby agrees to
indemnify, defend and hold harmless the Company from any and all
claims, losses, actions, injuries, damages, fines, penalties, or other
liabilities, including but not limited to loss of profits and other
economic losses, attorneys' fees and court costs, resulting from or
related to a material breach of this Agreement by the Employee.
10.1 Equitable Relief. The Parties acknowledge that any damages
incurred by the Company as a result of any breach of Section
8, Section 9 or the breach of any other material provision
of this Agreement will be great and irreparable and
difficult to quantify. Without prejudice to the rights and
remedies otherwise available, and without the need for
posting any bond or surety, the Company shall be entitled to
equitable relief, such as for an injunction or specific
performance, if the Employee should breach or threaten to
breach any of the provisions of this Agreement.
10.2 Remedies Available. Subject to the requirement for
arbitration under Section 11, nothing herein shall be
construed as prohibiting the Company from pursuing any
remedies, both federal and state, legal or equitable,
available to the Company for any breach or threatened breach
by the Employee.
10.3 Recovery of Costs. In the event that nay enforcement action
is taken by either Party hereunder, including filing an
action in court or in arbitration, the prevailing Party
shall be entitled to recover from the losing Party its costs
and expenses, including its reasonable attorneys' fees and
court costs.
11. Arbitration. Any failure to perform, controversy or claim arising out
of or relating to this Agreement or the breach, termination or
validity thereof, shall be determined exclusively by arbitration in
accordance with the provisions of this Section and in accordance with
the rules of the American Arbitration Association for arbitrating
commercial matters. The arbitration shall be held in Tucson, Arizona,
or such other location as the parties shall mutually agree. The
arbitrators shall base their award on applicable Arizona law and
judicial precedent, and shall accompany their award with written
findings of fact and conclusions of law. The decision of the
arbitrators shall be binding on the parties, except that any party may
appeal the arbitrators' decision by filing an action to reconsider the
decision of the arbitrators in a court having jurisdiction hereunder.
In any such action the arbitrators' findings of fact shall be
conclusive and binding on parties and the sole questions to be
determined by the court shall be (i) whether or not the arbitrators'
decision was contrary to Arizona law and judicial precedent, and (ii)
if the court determines that the arbitrators' decision was contrary to
Arizona law and judicial precedent, then how the dispute shall be
resolved based on the arbitrators' findings of facts and Arizona law
and judicial precedent. The decision of the court as to the resolution
of the dispute under Arizona law and judicial precedent shall
supersede the arbitrators' decision. Judgment upon the award rendered
by the arbitrators, as modified by the court, if applicable may be
entered in any court having jurisdiction in accordance herewith.
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11.1 Selection of Arbitrators. One arbitrator shall be selected
by the Company and one by the Consultant, and the
arbitrators shall mutually select another arbitrator to
serve with them so that there shall be an odd number of
arbitrators. Alternatively, the parties may agree to accept
a single arbitrator to be mutually agreed upon by the
parties. Each person serving as an arbitrator hereunder
shall be a professional with excellent academic and
professional credentials who has had experience as an
arbitrator with at least ten years experience in the field
of resolving commercial disputes in the Tucson, Arizona
area.
11.2 Discovery. Each party shall, upon the written request of the
other party, provide the other with copies of documents
relevant to the issues raised thereby. Other discovery may
be ordered by the arbitrators to the extent the arbitrators
deem additional discovery appropriate, and any dispute
regarding discovery, including disputes as to the need
therefor or the relevance or scope thereof, shall be
determined by the arbitrators, which determination shall be
conclusive.
11.3 Arbitration Expenses. All expenses and fees of the
arbitrator and expenses for hearing facilities,
stenographers, including reasonable attorneys' fees and
costs of expert witnesses, and other expenses of the
arbitrators shall be borne by the non-prevailing Party;
provided, however, that the arbitrators may allocate a
portion of such expenses to the other Party if the
arbitrators believe such a measure is justified by the
conduct of the Parties during the arbitration.
11.4 Confidentiality of Proceedings. The arbitration proceedings
conducted pursuant hereto shall be confidential. Neither
Party shall disclose any information about the evidence
adduced by the other in the arbitration proceeding or about
documents provided by the other in connection with the
proceeding except in the court of a judicial, regulatory or
arbitration proceeding or as may be requested by a
governmental authority. Before making any disclosure
permitted by the preceding sentence, the Party intending to
make such disclosure shall give the other Party reasonable
written notice of the intended disclosure and afford the
other Party opportunity to protect its interests. The
arbitrators, expert witnesses, stenographic reporters and
any other third parties shall sign appropriate nondisclosure
agreements in the event that any confidential or proprietary
information is or may be disclosed in the arbitration
proceedings.
11.5 Equitable Relief. Notwithstanding anything herein to the
contrary, any action brought by the Company for injunction
relief or specific performance is not subject to the
requirements for arbitration hereunder, and may be sought in
any court having jurisdiction in accordance herewith without
resorting to arbitration.
12. Indemnification. The Company shall indemnify the Employee to the
fullest extent permitted under Nevada State law, as amended from time
to time, for all amounts (including without limitation, judgments,
fines, settlement payments, expenses and attorney's fees) incurred or
paid by the Employee in connection with any action, suit,
investigation or proceeding arising out of or relating to the
performance by the Employee for services for, or the acting by the
Employee as an officer or employee of the Company, or any other person
or enterprise at the Company's request, except for actions that are
the result of willful misconduct or gross negligence. The Company
shall have the Employee names as a covered person under its director
and officer liability insurance policies as may be in effect from time
to time.
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13. Miscellaneous.
13.1 Notices. All notices, demands, requests or other communications
required or permitted to be given or made hereunder shall be in
writing and shall be hand-delivered or shall be mailed by first
class registered or certified mail return receipt, postage
prepaid to the respective addresses of the parties. Notice shall
be deemed to have been received either on the day delivered, if
hand-delivered, or five (5) days after mailing, if mailed.
13.2 Representations. The Employee agrees to execute any proper oath
or verify a proper document reasonably required to carry out the
terms of this Agreement. The Employee represents that this
Agreement has been duly executed and delivered by the Employee
and constitutes the valid and binding obligations of the
Employee; that the execution, delivery, and performance of this
Agreement by the Employee will not violate any provision of any
contract or other agreement, including but not limited to a
non-compete or non-disclosure agreement, to which the Employee is
a Party or which purports to be binding upon the Employee; that
the Employee has carefully read and reviewed the provisions set
forth herein, and having done so he/she agrees that those
provisions, including but not limited to the provisions relating
to the ownership of the Intellectual Property, the non-disclosure
of confidential information, and the non-competition and
non-solicitation requirements, are fair and reasonable and are
reasonably required for the protection of the legitimate business
interests of the Company; and that the Employee has had the
opportunity to obtain counsel of his/ her own selection to review
this Agreement on his/her behalf.
13.3 Severability. The invalidity or unenforceability of any one or
more provisions of this Agreement shall not affect the validity
or enforceability of the other provisions of this Agreement,
which shall remain in full force and effect.
13.4 Survival. It is the express intention and agreement of the
parties hereto that the provisions of Section 8, Section 9,
Section 10, and Section 11 hereof shall survive the termination
of this Agreement.
13.5 Assignment. The rights and obligations of the Consultant under
this Agreement shall not be assignable or delegable, except that
the rights and obligations of the Company hereunder shall be
assignable and delegable in connection with any subsequent
merger, consolidation, sale of all or substantially all of the
assets of the Company or similar reorganization of a successor
corporation.
13.6 Binding Effect. Subject to any provisions hereof restricting
assignment, this Agreement shall be binding upon the parties
hereto and shall inure to the benefit of the parties and their
respective heirs, devisees, executors, administrators, legal
representatives, successors, and assigns.
13.7 Amendment; Waiver. This Agreement shall not be amended, altered
or modified except by an instrument in writing duly executed by
the parties hereto. Neither the waiver by any of the parties
hereto of a breach of or a default under any of the provisions of
this Agreement, nor the failure of any of the parties, on one or
more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder, shall
thereafter be construed as a waiver of any subsequent breach or
default of a similar nature, or as a waiver of any such
provisions, rights or privileges hereunder.
13.8 Headings. Section and subsection headings contained in this
Agreement are inserted for convenience of reference only, shall
not be deemed to be a part of this Agreement for any purpose, and
shall not in any way define or affect the meaning, construction
or scope of any of the provisions hereof.
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13.9 Governing Law. This agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto,
shall be governed by and construed in accordance with the laws of
the State of Arizona (but not including the choice of law rules
thereof). Subject to the arbitration provisions herein, any
action filed in relation to this Agreement and the performance of
the parties hereunder shall be filed in the appropriate state
court or the U.S. District Court having jurisdiction over Tucson,
Arizona, the parties hereto waiving any other venue to which they
may be entitled by virtue of domicile or otherwise. Each of the
parties hereto waives a trial by jury in regard to any claims or
disputes relating to this Agreement.
13.10 Entire Agreement. This Agreement constitutes the entire
agreement between the parties respecting the engagement of the
Consultant, there being no representations, warranties or
commitments except as set forth therein.
13.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which
shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement, or have
caused this Agreement to be duly executed on their behalf effective as of the
day and year first hereinabove written.
Employee
By: /s/ Xxxxxxx XxXxxxxx By: /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx XxXxxxxx Xxxxxxx Xxxxxxx
President & Chief Executive Officer
For: CDEX Inc.
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