Exhibit 10.7
XXXXX XXXXXX
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), dated as of April 1, 2001, by and
between Millennium Biotechnologies, Inc., a Delaware corporation ("Company") and
Xxxxx Xxxxxx ("Executive").
WHEREAS, Company desires to employ Executive as the Chief Operating
Officer of Company, and Executive desires to be so employed by Company, on the
terms and conditions herein provided.
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, the parties hereto
agree as follows:
1. Employment. During the term of this Employment Agreement, as
defined in section 2 hereof (the "Term"), Company shall employ Executive, and
Executive shall render services to Company as Chief Operating Officer of the
Company. Executive shall also be appointed to serve as Chairman of the Board of
Directors during the Term. Executive shall have such duties as are consistent
with the position of Chief Operating Officer. Executive shall devote his best
efforts to the performance of his duties under this Employment Agreement and
shall perform them faithfully, diligently and competently. The Executive may
engage in other business or investment opportunities provided the same do not
conflict with the Executive's duties hereunder or the business of the Company.
The Executive represents and warrants that neither the execution by him of this
Agreement nor the performance by him of his duties and obligations hereunder
will violate any agreement to which he is a party or by which he is bound.
2. Term of Employment. Unless earlier terminated as provided in this
Employment Agreement, the term of Executive's employment under this Employment
Agreement (the "Term") shall commence on the date hereof (the "Effective Date")
and continue until five years from the date hereof.
3. Compensation.
(a) Base Salary. Company shall pay to Executive throughout the
Term an annual salary (the "Base Salary"), payable in accordance with the
Company's customary policies. The Base Salary shall be at the rate of $150,000
per year for the first year of the Term; $250,000 per year for the second year
of the Term; and $300,000 per year for the third through fifth year of the Term.
In the first year of the Term, payment of up to 40% of the Base Salary shall be
deferred until such time as the Company, in its reasonable judgment, has the
financial resources to pay such deferred compensation. The Company acknowledges
deferred compensation due to the Executive in the amount of $30,000 for services
rendered in the period of November 10, 2000 through March 30, 2001 which
deferred compensation shall be paid at the same time as payment of the deferred
compensation referenced in the prior sentence.
(b) Discretionary Bonus. In addition to the Base Salary,
Company shall
pay to Executive a discretionary bonus, payable annually during each year of the
term, at the sole and exclusive discretion of the Company.
4. Benefits.
(1) General Fringe Benefits. Executive shall be entitled to
participate in the life, hospitalization, health, accident and disability
insurance plans, health programs, pension plans, and other benefit and
compensation plans generally available to senior executives of Company from time
to time. In addition, commencing in the first calendar year in which the Company
achieves annual revenues in excess of $5,000,000, the Company, at its sole
expense, shall provide Executive with life insurance coverage (the beneficiary
to be designated by Executive) in an amount not less than $1,000,000.
(2) Reimbursements. Company shall pay or reimburse Executive
for all reasonable expenses actually incurred or paid by Executive during the
Term in the performance of Executive's duties to Company upon presentation by
Executive of expense statements or vouchers.
(3) Automobile. Company shall pay Executive $1,500 per month
as full reimbursement for any and all expenses relating to the use of an
automobile during the Term in the performance of Executive's duties to Company,
including insurance, maintenance and garage.
(4) Vacation. The Executive shall be entitled to twenty five
(25) days paid vacation each year during the Term in accordance with the
applicable policies of the Company.
5. Termination of Employment.
(a) Death. Executive's employment shall terminate upon his
death, and in such event, the estate or other legal representative of Executive
shall be entitled to receive (A) Executive's Base Salary for a period equal to
the lesser of (i) one (1) year from the date of death or (ii) the balance of the
Term; (B) all compensation, Discretionary Bonus, and any Options which have been
granted to the Executive (the vesting date of which shall accelerate as of the
date of death) and benefits that are accrued and unpaid as of the date of death.
(b) Termination by Company. Executive's employment may be
terminated at the option of Company by notice to Executive (i) as a result of
Executive's disability as provided in section 5(b)(i) hereof, or (ii) for
"cause" as defined and provided in section 5(b)(ii) hereof.
(i) Disability. As used in this Employment Agreement,
the term "disability" shall mean a physical or mental disability or
incapacity, whether total or partial, of Executive that, in the good faith
determination of Company's Directors or based upon reasonably competent
medical advice, has prevented him from performing substantially all of his
duties under this Employment Agreement during a period of three (3)
consecutive
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months or for 120 days during any twelve month period. If Company shall
terminate Executive's employment pursuant to this section 5(b), Executive
shall be entitled to continue to receive his Base Salary for a period of
one (1) year from the date of termination (but not exceeding the balance
of the Term), as well as (A) all compensation, Discretionary Bonus and
benefits that are accrued and unpaid as of the date of disability; and (B)
any Options which have been granted to the Executive, the vesting date of
which shall accelerate as of the date of termination.
(ii) Discharge for "Cause". If Executive (A) neglects
his duties hereunder in a material manner and such neglect shall not be
discontinued within five (5) business days after written notice to
Executive thereof; (B) is convicted of a felony or other crime involving
fraud, moral turpitude or material loss to the Company; (C) materially
breaches his affirmative or negative covenants or undertakings hereunder
and such breach shall not be remedied within five (5) business days after
written notice to Executive thereof; or (D) in bad faith, commits any act
or omits to take any action, to the material detriment of Company; then
Company may at any time by notice terminate Executive's employment
hereunder for "cause"; and Executive shall have no right to receive any
compensation or benefit from Company hereunder on and after the effective
date of such notice, except for compensation, Discretionary Bonus and
benefits that are accrued and unpaid as of the date of termination.
(c) Termination by Executive for "Good Reason or termination
by the Company without Cause". In the event of: (i) a reduction in the
nature or scope of Executive's titles, authorities, powers, duties, or
responsibilities hereunder; (ii) a change in the method or formula for
determining the Bonus from that set forth in section 3(b) or 3(c)
hereof which results in a decrease in the amount of the Bonus payable
to the Executive thereunder; (iii) the removal of Executive as a member
of the Board of Directors of Company, unless such removal occurs after
the termination of Executive's employment for "cause"; (iv) a sale of
all or substantially all of the ownership interests or assets of
Company, (v) a merger or consolidation of the Company with any other
corporation or entity in which the shareholders of the Company own less
than 51% of the stock of the controlling or surviving entity following
such merger or consolidation; (vi) a "change-in-control" of the
Company, defined as any person or entity becoming a "beneficial owner"
(as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as
amended from time to time) directly or indirectly of securities of the
Company representing 50% or more of the combined voting power of the
Company's then outstanding securities; or (vii) Company's materially
breaching its affirmative or negative covenants or undertakings
hereunder and such breach shall not be remedied within fifteen (15)
days after notice to Company thereof (which notice shall be signed by
Executive and refer to a specific breach of this Employment Agreement);
then Executive may at any time by notice terminate Executive's
employment hereunder for "good reason". In the event of such
termination or in the event the Company shall terminate the Executive's
employment without cause, the Company shall pay to Executive (A) his
Base Salary through the date of termination, (B) Discretionary Bonus
and benefits that are accrued and unpaid as of the date of termination;
(C) the additional amounts described in section 5(e)(iii) hereof; and
(D) any Options which have been granted to the Executive, the vesting
date of which shall accelerate as of the date of termination.
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(d) Expiration of Term. Upon the expiration of the Term, and
provided that (i) neither Executive nor Company shall have terminated
Executive's employment hereunder prior thereto, (ii) Executive shall have
observed and performed all of his material duties and obligations
hereunder, and shall not have been in default of any of his agreements,
covenants or representations hereunder, in both instances throughout the
Term, and (iii) Executive's employment with Company shall not thereafter
be continued, then Company shall pay to Executive the amounts described in
section 5(e)(i) and (ii) hereof.
(e) Termination Benefits.
(i) Upon the expiration of the Term or the termination
of Executive's employment for any reason hereunder, the rights and
benefits of Executive under Company's employee benefit plans and programs
shall be determined in accordance with the provisions of such plans and
programs.
(ii) Upon the expiration of the Term, Company shall pay
to Executive, in addition to any and all amounts which may otherwise be
due to Executive hereunder, an amount equal to one (1) times Executive's
then Base Salary, payable in equal monthly installments, on the first of
each month, during the Non-Compete Period.
(iii) Upon the termination of Executive's employment
during the Term by Company other than for "cause" or "disability", or upon
the termination of Executive's employment by Executive with "good reason",
Company shall pay to Executive, in addition to any and all amounts which
may otherwise be due to Executive hereunder, an amount equal to two and
one half (2.5) times Executive's then Base Salary, payable in full within
thirty (30) days of the date of termination.
6. Prohibited Activities.
(a) Non-Compete Period. For the purposes of this Employment
Agreement, the term "Non-Compete Period" shall mean the Term, and if Executive's
employment is terminated by Company for "cause", by Executive without "good
reason", or so long as Company pays Executive the termination benefit specified
in paragraph 5(e)(ii) above, an additional period of one (1) year from and after
the date of termination.
(b) Non-competition. During the Non-Compete Period, Executive
shall not directly or indirectly compete with, be engaged in the business of, be
employed by, act as a consultant to, or be a director, officer, employee, owner
or partner of, any person or entity which is engaged in the primary business of
the Company at such time and in the territories served by the Company in such
business during the Non-Compete Period.
(c) Solicitation of Employees. During the Non-Compete Period,
Executive shall not directly or indirectly employ, or solicit to
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leave Company's employ, or solicit to join the employ of another person or
entity (including any such person or entity owned or controlled, directly or
indirectly, by Executive) any employee of Company or any person who has been
such an employee during the twelve months preceding Executive's date of
termination.
(d) Confidential Information. During and at all times
subsequent to the Term, Executive shall keep secret and shall not exploit or
disclose or make accessible to any person or entity, except in furtherance of
the business of Company, and except as may be required by law or legal process,
any confidential business information of any type that was acquired or developed
by either Company or any of its subsidiaries or affiliates, or Executive, prior
to or during the Term. In addition, the term "confidential business information"
shall not include information which (i) is or becomes generally available to the
public other than as a result of a disclosure by Executive; or (ii) was
available to Executive prior to any employment by Company as a result of his
general business experience.
(e) Divisibility. The provisions contained in this section 6
as to the time period and scope of activities restricted shall be deemed
divisible, so that if any provision contained in this section is determined to
be invalid or unenforceable, that provision shall be deemed modified so as to be
valid and enforceable to the full extent lawfully permitted.
(f) Relief. Executive acknowledges that the provisions of this
section are reasonable and necessary for the protection of Company and that
Company will be irreparably damaged if such covenants are not specifically
enforced. Accordingly, it is agreed that Company will be entitled to injunctive
relief for the purpose of restraining Executive from violating such covenants
(and no bond or other security shall be required in connection therewith), in
addition to any other relief to which Company may be entitled.
7. Work for Hire.
Any and all formulations, devices, materials, technology or
other inventions (collectively "Inventions") made, developed or created by the
Executive (whether at the request or suggestion of the Company or otherwise,
whether alone or in conjunction with others, and whether during regular hours of
work or otherwise) during the Term, will be promptly and fully disclosed by the
Executive to the Company and shall be the Company's exclusive property. The
Executive will promptly deliver to the Company all papers, drawings, models,
data and other material relating to any Invention made, developed or created by
him as aforesaid. The Executive acknowledges that any Inventions developed,
made, or created by the Executive during the Term shall be deemed "Works for
Hire" and that the Company shall have the exclusive right to copyright, patent
or otherwise protect such Inventions. The Executive further acknowledges that
any contribution made by the Executive prior to the commencement of the Term
with respect to the formulation of Resurgex(TM) or any other product which the
Company may hereinafter produce shall be deemed to be Inventions created and
developed during the Term as a work for hire on behalf of the Company.
Executive agrees to assign to the Company its successors,
legal
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representatives and assigns all rights, including patent rights, in and to any
such Inventions and further agrees to cooperate with the Company if the Company
pursues patent protection for such Inventions. Specifically, and without
limitation, Executive agrees to communicate to the Company any facts known to
the Executive respecting said Invention, to sign all lawful papers, to execute
all divisional, continuing and reissue applications, to make all declarations
and to generally do everything possible to assist the Company to obtain and to
enforce patent rights for said Invention in the United States and abroad.
8. Miscellaneous.
(a) Survival. The covenants and agreements set forth in this
Employment Agreement shall survive Executive's termination of employment,
irrespective of any investigation made by or on behalf of any party.
(b) Headings. The section headings of this Employment
Agreement are for reference purposes only and are to be given no effect in the
construction or interpretation of this Employment Agreement.
(c) Assignment. This Employment Agreement shall not be
assignable by Executive without the prior written consent of Company, and shall
inure to the benefit of and be binding upon Executive and his legal
representatives.
(d) Territory. Executive shall not be required to relocate or
render services hereunder in any geographic area beyond a radius of thirty-five
(35) miles from Greenwich, Connecticut; provided however, that Executive may be
required to travel for business purposes from time to time, subject to
Executive's reasonable approval.
(e) Governing Law. This Employment Agreement shall be governed
by and construed in accordance with the law of the State of New York applicable
to agreements made and to be performed in that State, without reference to its
principles of conflicts of law.
(f) Arbitration; Consent to Jurisdiction. Any controversy or
claim arising out of or relating to this Employment Agreement including, without
limitation, the interpretation or the breach thereof, shall be settled by
arbitration in the City, County and State of New York in accordance with the
Commercial Arbitration Rules of the American Arbitration Association then
obtaining, and judgment upon the award rendered by a panel of three (3)
Arbitrators may be entered in any court having jurisdiction thereof.
Notwithstanding the foregoing, this agreement to arbitrate shall not bar either
party from seeking temporary or provisional remedies in any Court having
jurisdiction thereof. Company and Executive hereby consent and submit to the
personal jurisdiction of the United States District Court for the Southern
District of New York and any New York State court of competent jurisdiction
located in New York County, New York in any suit, action or proceeding (other
than as provided in the first sentence of this section) arising out of or
relating to this Employment Agreement.
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(g) Notices. All notices, requests, demands and other
communications (collectively, "Notices") that are required or may be given under
this Employment Agreement, shall be in writing, signed by the party or the
attorney for that party. All Notices shall, except as otherwise specifically
provided herein to the contrary, be deemed to have been duly given or made: if
by hand, immediately upon delivery; if by telecopier or similar device,
immediately upon sending, provided notice is sent on a business day during the
hours of 9:00 a.m. and 6:00 p.m. E.S.T., but if not, then immediately upon the
beginning of the first business day after being sent; if by Federal Express,
Express Mail or any other overnight delivery service, one day after being placed
in the exclusive custody and control of said courier; and if mailed by certified
mail, return receipt requested, five (5) business days after mailing. All
notices are to be given or made to the parties at the following addresses (or to
such other address as either party may designate by notice in accordance with
the provisions of this section):
If to Company at:
Millennium Biotechnologies, Inc.
Xxx Xxxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Silverman, Chernis, Shin & Xxxxx, P.C.
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Executive at:
Xxxxx Xxxxxx
00 Xxxxxx Xxx
Xxxxxx Xxxxx, XX 00000
(a) Enforceability. If any provision of this Employment
Agreement is invalid or unenforceable, the balance of this Employment Agreement
shall remain in effect, and if any provision is inapplicable to any person or
circumstance, it shall nevertheless remain applicable to all other persons and
circumstances.
(b) Waiver. The failure of a party to this Employment
Agreement to insist on any occasion upon strict adherence to any term of this
Employment Agreement shall not
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be considered to be a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this Employment
Agreement. Any waiver must be in writing.
(c) Complete Agreement. This Employment Agreement supersedes
any prior or contemporaneous agreements between the parties with respect to its
subject matter, is intended as a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter, and
cannot be changed or terminated orally. Specifically, and not in limitation of
the foregoing, the Executive and the Company agree that the Mandatory Bonus
supercedes any prior agreement and/or understanding between the Company and the
Executive with respect to the payment of royalties, fees or other compensation
in connection with the sale of the Company's products.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the date first above written.
MILLENNIUM BIOTECHNOLOGIES, INC.
By: /s/
-----------------------------------------
Its:_____________________________________
/s/ Xxxxx Xxxxxx
-----------------------------------------
Xxxxx Xxxxxx
Executive
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