EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT dated as of August 6, 2004, is entered into
by and between Rapid BioTest Corporation, a Nevada corporation located at 0000
Xxx Xxxxxx, Xxxxxxxxxxx, Xxxxxx 00000 (collectively with its affiliates and
subsidiaries, the "Company"), and Xxxxxxx Xxxxxxxx, an individual residing at 00
Xxxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxx 00000 (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee has heretofore been employed by the Company in a
non-officer role;
WHEREAS, both the Company and the Employee wish the Employee to
continue his employment pursuant to the prior contract between the parties;
WHEREAS, the Company desires to employ the Employee in the additional
role of Chief Executive Officer, and the Employee desires to become so employed
by the Company, all upon the terms and conditions set forth herein;
WHEREAS, the Employee has substantial experience and information
regarding the business of the Company, and the Company believes that the
experience the Employee has with respect to the Business is valuable and unique;
and
WHEREAS, the parties desire by this writing to set forth their
intentions with respect to the employment relationship between the Employee and
the Company;
NOW, THEREFORE, in consideration of these premises, the respective
covenants and agreements hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
Section 1. Term of Employment. The Employee's employment pursuant to
this Agreement shall commence on August 9, 2004 (the "Commencement Date") and,
subject to earlier termination pursuant to Section 5 hereof, shall continue
until December 31, 2006 (the "Scheduled Termination Date"); provided, however,
that the initial term (the "Initial Term") of the Employee's employment
hereunder shall automatically be extended for additional and successive one (1)
year periods (each an "Additional Term") unless either party shall give the
other party notice (in the manner hereinafter provided), not later than ninety
(90) days prior to the expiration of the Initial Term or the then current
Additional Term, of the notifying party's termination of the Employee's
employment which shall be effective as of the expiration of the Initial Term or
the then current Additional Term, as the case may be. For purposes hereof, the
Initial Term and any Additional Term(s) are referred to collectively as the
"Term."
Section 2. Position and Duties. Employee shall serve as the President
and Chief Executive Officer of the Company. In his capacity as President and
CEO, Employee shall do and perform all services, acts or things necessary or
advisable to develop and implement the Company's diagnostic testing program and
the technologies and know-how which constitute that program, including but not
limited to the latex-based technology which forms the backbone of the testing
program, subject at all times to the policies set by the Board of Directors and
to the consent of the Board when required by the terms of this Agreement.
Section 3. Compensation.
(a) Base Salary. As compensation for the services to be
performed hereunder, for the first year of employment, Employee shall receive a
salary at the rate of $80,000 per annum, payable on the first day of each month
during the employment term. Following the first year of employment and for the
term of this Agreement, the salary shall be negotiated annually with the board
of directors but shall be no less than 110% of the previous year's salary.
(b) Stock Option. Employee shall be entitled to participate in
any stock option plan approved, adopted by the Company's board of directors and
approved, adopted and ratified by the Company shareholders.
(c) Expense Reimbursement. During the Term the Company shall
pay or reimburse the Employee for all reasonable expenses actually incurred or
paid by him in the performance of his services under this Agreement, upon
presentation of such bills, expense statements, vouchers or such other
supporting information as the Board may reasonably require. In the event the
Employee is required to travel in the performance of his services under this
Agreement, the Employee shall be reimbursed for any travel expenses in
accordance with this provision.
(d) The foregoing compensation package is intended to be in
addition (not insubstitution) to that compensation to which the Employee is now,
or may become entitled pursuant to his pre-existing employment agreement.
Section 4. Benefits.
(a) Annual Vacation: Employee shall be entitled to three weeks
vacation time each year with full pay. If Employee is unable for any reason to
take the total amount of authorized vacation time during any year, he may, at
his sole discretion, (i) accrue that time and add it to vacation time for any
following year, or (ii) receive a cash payment in the amount equal to the amount
of annual salary attributable to that period.
(b) Sick Days: Employee shall be entitled to 10 days per year
as sick leave with full pay. Sick leave may not be accumulated.
(c) Medical Coverage: Company agrees to include Employee in
the coverage of any insurance coverage offered to its other officers, including,
but not limited to medical, major medical, hospital, dental, and eye care
insurance; provided however, that Employer shall not be obligated to carry or
provide any insurance to Employee whatsoever.
Section 5. Termination of Employment; Effect of Termination of
Employment.
(a) Termination of Employment. The Employee's employment
hereunder shall terminate upon the first to occur of the following:
(i) the Employee's death;
(ii) the Employee's Permanent Disability (as defined
below);
(iii) the Company's termination of the Employee's
employment for Cause (as defined below);
(iv) the voluntary resignation of the Employee;
(v) the Employee's termination of his employment for
Good Reason (as defined below); and
(vii) the non-renewal of this Agreement by either
party pursuant to Section 1 above.
(b) Termination by the Company. The Company may terminate the
Employee's employment hereunder by written notice from the Board to the Employee
as follows:
(i) For Cause. The Company may terminate the
Employee's employment hereunder for Cause immediately upon written notice. Any
written notice of termination for Cause shall state in detail the particular act
or failure that constitutes the grounds on which the termination for Cause is
based. For purposes of this Agreement, "Cause" shall mean a termination of the
Employee's employment by the Company because the Employee has: (A) willfully
failed to perform his duties on behalf of the Company (other than such failure
resulting from the Employee's incapacity due to physical or mental illness),
which failure is not cured within ten (10) business days after written notice
thereof (specifying the particulars thereof in reasonable detail) from the Board
to the Employee; and/or (B) breached or failed to perform his obligations and
duties hereunder, which breach or failure is not cured within ten (10) business
days after written notice thereof (specifying the particulars thereof in
reasonable detail) from the Board to the Employee. At any time during any cure
period above, the Employee shall be entitled to a hearing before the Board, in
which case the original notice of termination by the Board shall not be
effective unless and until the Board, within seven (7) days after such hearing,
furnishes written notice to the Employee confirming that in its reasonable
judgment grounds for Cause exist. Action or inaction by the Employee shall not
be considered "willful" unless done or omitted by the Employee intentionally and
not in good faith and without reasonable belief that the Employee's action or
inaction was in the best interests of the Company, and shall not include failure
to act by reason of total or partial incapacity due to physical or mental
illness.
(ii) Permanent Disability. "Permanent Disability"
shall have the meaning assigned to it in the group disability policy maintained
by the Company as of the date on which such determination is to be made;
provided, however, if the Company does not maintain such a policy on such date,
"Permanent Disability" shall mean the continuous absence from work for more than
(x) one hundred eighty (180) consecutive days on account of any kind of physical
or mental illness or impairment (in such case, Permanent Disability shall be
deemed to have occurred on the first business day after the conclusion of such
180-day period) or (y) two hundred seventy (270) non-consecutive days in any
twelve (12) month period. The Company shall provide written notice of the
Employee's termination not later than thirty (30) days after the expiration of
any applicable 180-day or 270-day period.
(iii) Death. Upon the death of the Employee, his
employment shall be deemed to have immediately terminated without further action
on the part of the Company.
(iv) Change of Control. This agreement shall not be
terminated by any voluntary or involuntary dissolution of Employer resulting
from either a merger or consolidation in which the Company is not the
consolidated or surviging corporation or a transfer of all or substantially all
of the assets of the Company. In the event of any such merger or consolidation
or transfer of assets, the Company's rights, benefits, and obligations hereunder
may only be assigned to the surviving or resulting corporation or the transferee
of the Company's assets if the Employee, in his sole discretion agrees to such
an assignment in writing.
(c) Termination by the Employee. The Employee may terminate
his employment hereunder by written notice to the Board as follows:
(i) Voluntary Termination. The Employee may voluntary
terminate his employment by the Company at any time on or after December 31,
2006 upon written notice to the Company at least ninety (90) days prior to the
effective date of such termination.
(ii) Good Reason. The Employee may terminate his
employment hereunder at any time for Good Reason upon written notice to the
Board. Such notice shall state an effective date no earlier than thirty (30)
days after the date it is given during which time the Company will have the
right to cure the event or action giving rise to such Good Reason and shall
specify the particulars thereof in reasonable detail. For purposes of this
Agreement, "Good Reason" means: (A) a material breach of this Agreement by the
Company; (B) the assignment by the Company to the Employee of duties without the
Employee's express written consent that are materially below the level of the
powers and duties typically delegated to a Chief Executive Officer of an entity
of similar size with similar personnel requirements; or (C) requiring the
Employee to be based anywhere other than Warwick, New York.
(d) Notice of Termination. Any purported termination of the
Employee's employment by either party and for any reason shall be communicated
by written Notice of Termination (as defined below) by the terminating party to
the other party. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice given by the Employee or the Company, which shall indicate the
specific basis for termination of employment.
(e) Termination Payments.
(i) In the event the Employee's employment hereunder
is terminated as a result of the Employee's death or Permanent Disability, the
Company shall continue to pay to the Employee (or his estate, as the case may
be) his Base Salary for a period of six (6) months from the date of termination
in accordance with the normal payroll practices of the Company. Thereafter, no
other payments shall be made, or benefits provided, by the Company under this
Agreement except as otherwise required by law or pursuant to Section 5(f).
(ii) In the event the Employee's employment hereunder
is terminated (x) by the Employee for Good Reason, (y) unilaterally by the
Company pursuant to Section 1 or (z) by the Company for any reason other than
For Cause, the Employee's death or the Employee's Permanent Disability, the
Company shall pay to the Employee the Employee's Base Salary and bonuses through
the Scheduled Termination Date or for an additional 1.5 years, whichever is
greater. Thereafter, no other payments shall be made, or benefits provided, by
the Company under this Agreement except as otherwise required by law or pursuant
to Section 5(f). (f) Additional Payments and Termination of Benefits. In the
event the Employee's employment is terminated for any reason, in addition to
other payments the Company may be obligated to make pursuant to Section 5(e),
the Company shall pay to the Employee (or the legal representative of the
Employee) a lump sum payment equal to the sum of (A) all accrued but unused
vacation days at the Employee's Base Salary rate on the date of termination, (B)
all accrued and unpaid Perquisites through the date of termination, (C) all
accrued and unpaid reimbursements and expenses through the date of termination,
and (D) other or additional benefits, if any, in accordance with the terms and
conditions of applicable plans, programs and arrangements of the Company.
Section 6. Notices. Any notice required or permitted to be given
pursuant to this Agreement shall be in writing and shall be deemed given (i) if
by hand delivery, or by a recognized national overnight courier service, upon
receipt thereof or (ii) if mailed, three (3) days after it has been postmarked
in the U.S. mails, postage prepaid, certified mail, return receipt requested.
All notices shall be addressed to the parties at the respective addresses
indicated herein or such other address as either party may in the future specify
in writing to the other.
Section 7. No Attachment. Except as required by law, no right to
receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to execution, attachment, levy, or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect; provided, however,
that nothing in this Section 7 shall preclude the assumption of such rights by
executors, administrators or other legal representatives of the Employee or his
estate and their assigning any rights hereunder to the person or persons
entitled thereto.
Section 8. Binding Agreement; No Assignment. This Agreement shall be
binding upon, and shall inure to the benefit of, the Employee and the Company
and their respective permitted successors, assigns, heirs, beneficiaries and
representatives. Notwithstanding anything contained herein, the Company shall
have the right to assign its rights under Section 6 hereof to any successor of
the Company's business. This Agreement is personal to the Employee and may not
be assigned by him without the prior written consent of the Company. Any
attempted assignment in violation of this Section 10 shall be null and void.
Section 9. Governing Law; Jury Waiver. This Agreement shall be governed
by and construed, and the rights and obligations of the parties hereto enforced,
in accordance with the laws of the State of New York, without regard to any
conflicts or choice of law rules. In addition, the Company and the Employee
hereby agree to the exclusive jurisdiction of the courts of the State of New
York for the purpose of any suit, action, proceeding or judgment relating to or
arising out of this Agreement and the transactions contemplated hereby. EACH OF
THE PARTIES HERETO hereby waives any right it may have to a trial by jury in
respect of any claim based upon, arising out of or in connection with this
Agreement and the transactions contemplated hereby
Section 10. Entire Agreement; No Waiver; Modification. This Agreement
shall constitute the entire agreement between the parties with respect to the
matters covered hereby and shall supersede all previous written, oral or implied
understandings between them with respect to such matters, but shall in no way
decrease or diminish either party's rights under the previous employment
agreement which shall remain in full force and affect. No course of dealing and
no delay on the part of any party hereto in exercising any right, power or
remedy conferred by this Agreement shall operate as a waiver thereof or
otherwise prejudice such party's rights, powers and remedies conferred by this
Agreement or shall preclude any other or further exercise thereof or the
exercise of any other right, power and remedy. No term or provision of this
Agreement may be amended, altered, modified, rescinded, supplemented, or
terminated except by a writing signed by each of the parties hereto.
Section 11. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the fullest extent
permitted by applicable law, the parties hereby waive any provision of law that
renders any provisions hereof prohibited or unenforceable in any respect.
Section 12. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which shall together be deemed to constitute one and the same instrument.
Section 13. Attorneys' Fees and Costs. If any legal action is necessary
to enforce or intetpret the terms of this agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs, and necessary disbursements in
addition to any other relief to which that party may be entitled. This provision
shall be construed as applicable to the entire agreement.
Section 14. Modifications. Any modification of this agreement will be
effective only if it is in writing and signed by the party to be charged.
Section 15. Effect of Waiver.The failure of either party to insist on
strict compliance with any of the terms, covenants or conditions of this
agreement by the other party shall not be deemed a waiver of that term, covenant
or condition, nor shall any waiver or relinquishment of any right or power at
any one time or times be deemed a waiver or relinquishment of that right or
power for all or any other times.
Section 16. Obligations of the Company. All amounts payable by the
Company hereunder shall be paid without notice or demand. Except as expressly
provided herein, the Company waives all rights which it may now have or may
hereafter have conferred upon it, by statute or otherwise, to terminate, cancel
or rescind this Agreement in whole or in part. The Employee shall not be
required to mitigate the amount of any payment or other benefit provided for in
this Agreement by seeking other employment or otherwise.
IN WITNESS WHEREOF, the Company has caused this Employment Agreement to
be duly executed by the undersigned, thereunto duly authorized, and the Employee
has signed this Employment Agreement, all as of the date first written above.
Rapid BioTest Corporation
By: /s/ Xxxxxxxx Xxxxxx
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Xxxxxxxx Xxxxxx, Board Chairperson
On behalf of Employee
By: /s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx, Ph.D.
