EMPLOYMENT AGREEMENT
Exhibit
10.3
AGREEMENT
by and between Bio-Lok International Inc. (the “Company”), and Xxxx X. Xxxxx
(the “Executive”), dated as of the 1st
day
of
November,
1997.
WHEREAS,
The Board of Directors of the Company (the “Board”) has determined that it is in
the best interest of the Company and its shareholders, to avail itself of
the
Executive’s services as Chief Financial Officer (CEO) and Vice President -
Finance of the Company and to assure that the Company will have the continued
dedication of the Executive;
WHEREAS,
this Agreement shall cancel, replace and supersede, the Employment Agreement
signed by the Executive on February 19, 1997.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Definitions. As
used
in this Agreement, the following terms shall have the following
meaning:
(a) Proprietary
Information
shall
mean any trade or business secrets of the Company and any scientific, technical
or business materials that are treated by the Company as confidential or
proprietary and are not now in, or hereafter enter, the public domain,
including, but not limited to information to which the Executive has access
or
to which he may have access relating to the Company’s present or planned
business methods of doing business and certain other business information
with
which the Company has entrusted Executive in the use, application or purpose
therefore. “Proprietary Information” shall not include any (i) general knowledge
of the industry in the possession of the Executive prior to his becoming
an
employee of the Company (ii) any information in the public domain at the
time of
receipt by Executive, or (iii) any information which, after receipt thereof
by
Executive, becomes part of the public domain through no improper act or omission
of Executive, but shall include the trade secrets of and confidential
information about the Company possessed by the Executive prior to his becoming
an employee of the Company.
(b) Intellectual
Property
means
any written, drawing, logo, computer program, manual, trade name, trademark,
service xxxx or other material of the Company registered or otherwise protected
or protectable under state, federal or foreign patent, trademark, copyright,
or
similar laws.
2. Employment
Period. The
Company hereby employs the Executive and agrees to continue the Executive
in its
employ, and the Executive hereby agrees to remain in the employ of the Company
upon the terms and conditions hereinafter set forth, for the period commencing
on the date hereof and ending on the fourth (4th) anniversary from such date
(the “Employment Period”), and such Employment Period shall automatically renew
annually on each October 31st for a full four (4) years - i.e. at all times
on
each October 31st a full four (4) Employment Period will be
outstanding.
3. Terms
of Employment. During
the Employment Period(s), and excluding any periods of vacation, personal
and
sick leave to which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours to the business
and
affairs of the Company and, to the extent necessary, to discharge the
responsibilities assigned to the Executive, to use the Executive’s reasonable
best efforts to perform faithfully and efficiently such responsibilities.
During
the Employment Period, it shall not be a violation of this Agreement for
the
Executive to (i) serve on civic or charitable boards or committees, (ii)
manage
associated companies, as directed by the Board of Directors, for compensation
additional to this agreement, (iii) deliver lectures, fulfill speaking
engagements or teach at educational institutions or (iv) manage personal
investments, as long as such activities do not interfere with the performance
of
the Executive’s responsibilities as an employee of the Company in accordance
with this Agreement.
4. Position,
Responsibilities and Location. During
the Employment Period, the Executive shall hold and perform a position of
responsibility, importance and scope with the Company at least equal to those
of
the position held by him immediately prior to any Change in Control. The
Executive shall not be required, without his written consent, to change his
office location from the location thereof immediately prior to a Change in
Control or to be absent therefrom on business more than sixty (60) working
days
in any year or more than ten (10) consecutive days at any one time.
5. Compensation.
(a) Base
Salary.
During
the Employment Period, the Executive shall receive a base salary (“Base Salary”)
of $95,000 per annum payable in accordance with the customary payroll practices
of the Company. The Executive’s performance and Base Salary shall be reviewed by
the Board of Directors each October 31, and each such review shall represent
a
salary adjustment date which can cause the Base Salary to be increased by
an
amount to be determined and approved by the Board of Directors. Any such
increase in the Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. That portion of the
Executive’s salary which is not taken during a given employment year shall be
paid in common stock shares of the Company as detailed under (i) under this
section.
(b) Annual
Bonus.
In
addition to the Base Salary, the Executive shall be awarded, for each fiscal
year during the Employment Period(s), an annual bonus (an “Annual Bonus”) of not
less than 10% of Base Salary in cash in such amounts as determined and approved
by the Board of Directors. That portion of the Executive’s Annual Bonus which is
not taken during a given employment year shall be paid in common stock shares
of
the Company as detailed under (i) under this section.
(c) Incentive,
Savings and Retirement Plans.
In
addition to Base Salary and Annual Bonus payable as hereinabove provided,
the
Executive shall be entitled to participate during the Employment Period(s)
in
all incentive, savings and retirement plans and programs applicable to other
key
executives and employees of the Company.
(d) Welfare
Benefits Plans.
During
the Employment Period(s), the Executive and/or the Executive’s family, as the
case may be, shall be eligible for participation in and shall receive all
benefits under the welfare benefit plans provided by the Company (including,
without limitation, medical, hospitalization, prescription, dental, disability,
salary continuance, executive life, group life, accidental death and travel,
accident insurance plans and programs).
(e) Expenses.
During
the Employment Period(s), the Executive shall be entitled to incur and receive
prompt reimbursement for all reasonable travel, (other than commuting)
entertainment and other business expenses incurred by the Executive in
accordance with the policies and procedures of the Company.
(f) Fringe
Benefits.
During
the Employment Period(s), the Executive shall be entitled to all fringe benefits
provided to Executives as approved by the President and any employees of
the
Company, including country club membership, two (2) Airline memberships,
free
annual full physical and continued use of an American made Company-owned
or
leased automobile to be selected by the Executive. The Company will pay all
garage, insurance, gasoline, registration, maintenance and repair costs incident
to the Executive’s use of such Company owned or leased automobile.
(g) Office
and Support Staff.
During
the Employment Period(s), the Executive shall be entitled to an office of
a size
and with furnishings and other appointments, and to secretarial and other
assistance, at least equal to those provided to other key Executives of the
Company.
(h) Vacation.
During
the Employment Period(s), the Executive shall be entitled to such paid vacation
as determined by the officers of the Company and concurred by the Board of
Directors.
(i) Compensation
paid in lieu of cash.
Any
compensation and benefit due the Executive and not paid by the Company on
a
timely and current basis can be taken in common stock shares of the Company
at a
value equal to the net worth divided by the number of shares issued and
outstanding, at the Executive’s discretion.
(j) Severance
Payment. Executive
shall receive severance payments upon termination if termination is other
than
due to Cause (Section 5. (c)). Commencing with the termination, death or
disability classification of the Executive the Company shall pay to the
Executive and/or his dependent(s) severance payments equal to his then current
compensation over any then outstanding employment period as defined herein.
(k) Payment
to Executive upon Termination of Term.
If the
Term shall terminate pursuant to Section 6(a), (b) or (d), Company shall
compensate Executive with a Severance Bonus in the form of common stock shares
of the Company’s voting shares equal 1.0% of the Company’s then outstanding
common stock shares each year of the Executive’s Termination Date so long
Severance Payments are paid to the Executive.
6. Termination.
(a)
Death.
This
Agreement shall terminate automatically upon the Executive’s death and
dependent(s) will receive payments due as detailed under Section 7.
(b) Disability.
If the
Company determines in good faith that the Disability of the Executive has
occurred (pursuant to the definition of “Disability” as set forth below), it may
give to the Executive written notice of its intention to terminate the
Executive’s employment. In such event, the Executive’s employment with the
Company shall terminate effective on the 30th day after receipt of such notice
by the Executive (the “Disability Effective Date”), provided that, within the 30
days after such receipt, the Executive shall not have returned to full-time
performance of the Executive’s duties.
(1) For
purposes of this Agreement, “Disability” means disability which, at least 26
weeks after its commencement, is determined by the Company to be of such
a
nature as to prevent the Executive from performing his duties; or
(2) Disability
as defined by the Social Security System Guidelines.
(c) Cause.
The
Company may terminate the Executive’s employment for “Cause”. For purposes of
this Agreement, “Cause” means (a) an act or acts of personal dishonesty taken by
the Executive, (b) the conviction of the Executive of a crime involving moral
turpitude, (c) the failure, refusal or inability to adequately perform his
duties as reasonably assigned to him hereunder from time-to-time, or (d)
the
failure to follow a reasonable instruction form the Board of Directors of
the
Company.
(d) Good
Reason.
The
Executive’s employment may be terminated by the Executive for Good Reason. For
purposes of this Agreement, “Good Reason” means:
(i)
the
assignment to the Executive of duties inconsistent in any material respect
with
the Executive’s position, authority, duties or responsibilities or any other
action by the Company which results in a material diminution in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
the
Executive;
(ii)
any
failure by the Company to comply with any of the provisions of Section 4.
of
this Agreement, other than an isolated, insubstantial and inadvertent failure
not occurring in bad faith and which is remedied by the Company promptly
after
receipt of notice thereof given by the Executive;
(iii)
the
Company requiring the Executive to be based at any office or location other
than
within 50 miles of the Company’s current office location in Deerfield Beach,
Florida, except for travel reasonably required in the performance of the
Executive’s responsibilities;
(iv)
any
purported termination by the Company of the Executive’s employment otherwise
than as expressly permitted by this Agreement.
(e) Notice
of Termination.
Any
termination by the Company for Cause or by the Executive for Good Reason
shall
be communicated by Notice of Termination to the other party hereto given
in
accordance with Section 14 (b) of this Agreement. For purposes of this
Agreement, a “Notice of Termination” means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) sets
forth in reasonable detail the facts and circumstances claimed to provide
a
basis for termination of the Executive’s employment under the provisions so
indicated and (iii) if the Date of Termination (as defined below) is other
than
the date of receipt of such notice, specifies the termination date (which
date
shall be not more than fifteen (15) days after the giving of such Notice).
The
failure by the Executive to set forth in the Notice of Termination any fact
or
circumstances which contribute to a showing of Good Reason shall not waive
any
right of the Executive hereunder or preclude the Executive from asserting
such
fact or circumstance in enforcing his rights hereunder.
(f) Date
of Termination.“Date
of
Termination” means the date of receipt of the Notice of Termination or any later
date specified therein, as the case may be; provided, however, that (i) if
the
Executive’s employment is terminated by the Company other than for Cause or
Disability, the Date of Termination shall be the date on which the Company
notifies the Executive of such termination and (ii) if the Executive’s
employment is terminated by reason of Death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
7. Obligation
of the Company upon Termination.
(a) Death.
If the
Executive’s employment is terminated by reason of the Executive’s death, this
Agreement shall continue as required under the section titled “Severance
Payment”; and, any unpaid Annual Bonus required to be paid to the Executive for
the last full fiscal year or fraction thereof together with any accrued interest
thereon, any accrued vacation pay not yet paid by the Company, and any other
amounts or benefits owing to or accrued or vested for the account of the
Executive under the then applicable employee benefits plans or policies of
the
Company. All accrued obligations shall be paid by the Company to the Executive
dependent(s) in a lump sum in cash within 90 days of the Date of Termination.
Anything in this Agreement to the contrary notwithstanding, the Executive’s
family shall be entitled to receive benefits at least equal to the benefits
provided by the Company, to surviving families of executives of the Company,
under such plans, programs and policies relating to family death benefits,
if
any, in accordance with the most favorable policies of the Company.
(b) Disability.
If the
Executive’s employment is terminated by reason of the Executive’s Disability,
this Agreement shall terminate and continue as detailed under this section
par.
(a).
(c) Cause:
Other than for Good Reason.
f the
Executive’s employment shall be terminated for Cause, this Agreement shall
terminate without further obligations to the Executive, other than the
obligation to pay to the Executive the current Base Salary through the Date
of
Termination and after the Date of Termination salary and amounts as detailed
under Section 5. (j) and (k) hereto. If the Executive terminates employment
other than for Good Reason, death or disability, this Agreement shall terminate
without further obligations to the Executive, other than those obligations
accrued or earned by the Executive through the Date of Termination, including
for this purpose, All Accrued Obligations.
(d) Salary
and Benefit continuance shall be for the balance of any contractual period
of
(three (3) years) following Termination of Employee (see severance payment
section 5. (j)) for any reason other than described in section 6.
(c).
8. Non-Exclusivity
of Rights.
Nothing
in this Agreement shall prevent or limit the Executive’s continuing or future
participation in any benefit, bonus, incentive or other plan or program provided
by the Company and its affiliated companies for which the Executive may qualify,
nor shall anything herein limit or otherwise affect such rights as the Executive
may have under any stock option or other agreements with the Company, or
any of
its affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan or program of the
Company or any of its affiliated companies at or subsequent to he Date of
Termination shall be payable in accordance with such plan or
program.
9. Confidentiality
and Restrictive Covenant.
(a) During
the Employment Period and for a period of twenty-four (24) months immediately
following the termination of the Executive’s employment or after any salary
continuance, the Executive agrees to maintain in strict confidence the
Proprietary Information and Intellectual Property and that he will not engage
in
or have any financial interest in any business enterprise in competition
with
the Company. For purposes of this Section 9. the Executive shall be deemed
to be
engaged in or have a financial interest in a business enterprise if he is
an
employee, officer, director, trustee, agent, consultant or partner of any
person
which is engaged in such business, or if he owns, directly or indirectly,
stock
or securities convertible into or exchangeable for stock or otherwise has
any
equity or beneficial interest in such person; provided, that the ownership
of 5%
or less of the outstanding shares of a class of security, which is regularly
traded on a national securities exchange or quoted in an automated inter-dealer
quotation system, shall not be deemed to be engaging or having a financial
interest in the business of such person or entity.
(b) During
the Term and for a period of one (1) year immediately following the termination
of the Executive’s employment or salary continuance, the Executive agrees that
he will not directly or indirectly hire or solicit any employee of the Company
or who was an employee, consultant or independent contractor of the Company
at
any time within the six-month period immediately prior thereto or encourage
an
employee, consultant, independent contractor or agent of the Company to
terminate such employment or agency relationship.
(c) The
Executive acknowledges and agrees that the restrictive covenants set forth
in
this Section 9. (the “Restrictive Covenants”) are reasonable and valid in
geographical and temporal scope and in all other respects. If any court
determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive Covenants shall
not
thereby be affected and shall be given full force and effect, without regard
to
the invalid or unenforceable parts.
(d) If
any
court determines that any of the Restrictive Covenants, or any part thereof,
is
invalid or unenforceable for any reason, such court shall have the power
to
modify such Restrictive Covenant, or any part thereof, and, in its modified
form, such Restrictive Covenant shall then be valid and
enforceable.
10. Equitable
Relief.
In the
event of a breach or threatened breach by the Executive of any of the covenants
contained in Section 8. hereof, the Company shall be entitled to temporary
retraining order, a preliminary injunction and/or a permanent injunction
restraining the Executive from breaching or continuing to breach any of said
covenants. Nothing herein contained shall be construed as prohibiting the
Company from pursuing any other remedies that may be available to it for
such
breach or threatened breach, including the recovering of damages.
11. Full
Settlement.
The
Company’s obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
setoff, counterclaim, recoupment, defense or other claim, right or action
which
the Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action
by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement.
12. Confidential
Information.
The
Executive shall hold in a fiduciary capacity for the benefit of the Company
all
Proprietary Information, relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained
by
the Executive during the Executive’s employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by the Executive or his representatives in violation of this
Agreement). After termination of the Executive’s employment with the Company,
the Executive shall not, without the prior written consent of the Company,
communicate or divulge any such Proprietary information, knowledge or date
to
anyone other than the Company and those designated by it. In no event shall
an
asserted violation of those designated by it. In no event shall an asserted
violation of the provisions of this Section 12. constitute a basis for deferring
or withholding any amounts otherwise payable to the Executive under this
Agreement.
13. Successors.
(a) This
Agreement is personal to the Executive and without the prior written consent
of
the Company shall not be assignable by the Executive. This Agreement shall
inure
to the benefit of and be enforceable by the Executive’s representative(s) and
dependent(s) as detailed herein.
(b) This
Agreement shall inure to the benefit of and be binding upon the Company,
its
respective successors and assigns.
(c) The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company, respectively to expressly assume and agree
to
perform this Agreement in the same manner and to the same extent that such
party
would be required to perform it if no such succession had taken place. As
used
in this Agreement, “Company” shall mean, respectively, the Company as
hereinbefore defined and any successor to such party’s business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation
of
law, or otherwise.
14. Miscellaneous.
(a) This
Agreement shall be governed by and construed in accordance wit the laws of
the
State of Florida, without reference to principles of conflict of laws. The
captions of this Agreement are not part of the provisions hereof and shall
have
no force or effect. This Agreement may not be amended or modified otherwise
than
by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) 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
Executive: Xxxx
X.
Xxxxx
0X
Xxxxxx
Xxxxxx
Xxxxxxxx,
Xx 00000
if
to the
Company: Bio-Lok
International Inc.
000
X.
Xxxxxxxx Xxxxx
Xxxxxxxxx
Xxxxx, XX 00000
or
to
such other address as either party shall have furnished to the other in writing
in accordance herewith. Notice and communications shall be effective when
actually received by the addressed.
(c) The
invalidity in total or in part of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
(d) The
Company may withhold from any amounts payable under this Agreement such Federal,
State or local taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
(e) The
Executive’s failure to insist upon strict compliance with any provision hereof
shall not be deemed to be a waiver of such provision or any other provision
thereof.
(f) This
Agreement contains the entire understanding of the Company and the Executive
with respect to the subject matter hereof.
IN
WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to
the
authorization from each respective Board member of the Company have caused
this
Agreement to be duly executed in its corporate name by one of its officers
or
directors duly authorized to enter into and execute this Agreement, all as
of
the day and year first above written.
| Bio-Lok International Inc. | ||
| |
|
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| By: | /s/ Xxxxx X. Xxxxxxxxx | |
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| President | ||
| By: | /s/ Xxxx X. Xxxxx | |
|
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| Director & Compensation Committee Member | ||
| Executive: | ||
| /s/ Xxxx X. Xxxxx | ||
|
Xxxx
X. Xxxxx
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