EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT
10.26
This
Executive Employment Agreement (this “Agreement”) is made as of the
1st
day of
January, 2008, by and between Scivanta Medical Corporation, a Nevada corporation
(the “Company”), and Xxxxx X. XxXxxxx (the “Executive”).
WHEREAS,
the
Company desires to continue to employ the Executive in the capacity and under
the terms and conditions as are set forth herein; and
WHEREAS,
the
Executive desires to continue to be employed by the Company in the capacity
and
under the terms and conditions as are set forth herein.
NOW,
THEREFORE,
in
consideration of the foregoing and the mutual covenants, undertakings and
representations contained herein, and intending to be legally bound thereby,
the
Company and the Executive agree as follows:
1.
Employment.
The
Company hereby employs the Executive and the Executive hereby accepts employment
upon the terms and conditions hereinafter set forth in this
Agreement.
2.
The
Term of Employment.
Subject
to the provisions for termination as hereinafter provided, the term of this
Agreement shall commence as of January 1, 2008 and shall continue for a period
of three (3) years thereafter through December 31, 2010 (the “Initial Term of
Employment”). Upon expiration of the Initial Term of Employment, the term of
this Agreement shall automatically renew for successive one (1) year periods
(each additional year is a “Successive Term of Employment”), unless otherwise
terminated as provided for herein. Unless otherwise indicated, the phrase
“Employment Period” shall include the “Initial Term of Employment” and each
“Successive Term of Employment,” if any.
3.
Position
and Duties.
The
Executive will be the President and Chief Executive Officer of the Company,
with
such powers, duties and responsibilities consistent with the office of president
and chief executive officer and as otherwise may be described in the Company’s
By-laws or determined by the Board of Directors of the Company (the “Board”)
from time to time. The Executive will report directly to the Board.
During
the Employment Period, the Executive shall faithfully perform and discharge
the
above described duties and responsibilities and, except for reasonable
vacations, holidays and absences due to illness taken in accordance with the
Company’s policies, shall devote the necessary time, energy, skills and
attention to the business of the Company in order to fully and adequately
perform such duties and responsibilities
4.
Services
as a Director.
The
Executive agrees to serve as a director of the Company, if elected by the
shareholders. If requested by the Board, the Executive agrees to serve as an
officer and/or director of any subsidiary or other affiliated entity of the
Company, if any. The Executive is not entitled to compensation for service
as a
director of the Company, or as an officer and/or director of any of the
Company’s subsidiaries or other affiliated entities. The Executive is entitled
to be reimbursed for reasonable expenses incurred in connection with the
Executive’s service as a director of the Company, or as an officer and/or
director of any subsidiary or affiliated entity of the Company.
5.
Principal
Places of Business.
While
employed by the Company, the Executive’s principal places of business shall be
in both 0000 Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxx Xxxxxxxx and 000 Xxxxxx Xxxxxx,
Xxxxxx Xxxx, Xxx Xxxxxx, in such proportions of his time as the Executive shall
reasonably determine, and such other places of business as may be mutually
agreed upon by the Executive and the Company.
6.
Base
Salary and Benefits.
In
consideration of the services to be rendered by the Executive and the
Executive’s acceptance of the terms and conditions of this Agreement, the
Company shall pay the Executive an annual base salary of $275,000, subject
to
any withholding required by law. The Executive’s annual base salary during the
Employment Period shall be paid bi-weekly in twenty-six (26) equal installments.
The Executive’s annual base salary shall be reviewed annually by the
Compensation Committee of the Board (the “Compensation Committee”) and may be
increased, but not decreased, at the discretion of the Compensation
Committee.
In
addition, the Company agrees to provide certain benefits to the Executive during
the Employment Period, which includes a comprehensive medical package, dental
insurance, long-term disability coverage, a 401(k) Savings Plan/Profit Sharing
Plan and a Section 125 Cafeteria Plan. During the Employment Period, the
Executive also shall be entitled to vacation days in accordance with the
Company’s policies, and shall be eligible to participate in any other benefit,
health and retirement plans or programs not already provided for herein, which
may be established from time to time by the Company for the benefit of its
employees. All benefits plans provided by the Company to its employees may
be
amended or discontinued in the sole discretion of the Company.
7.
Bonuses.
The
Executive will be eligible for an annual performance bonus based on the
achievement of certain performance objectives (to be determined by the
Compensation Committee and the Executive). The annual performance bonus will
be
based on the Company’s and Executive’s performance during each calendar year the
Agreement is in effect and will be awarded in December of the applicable bonus
year. At the sole discretion of the Compensation Committee, other bonuses may
be
awarded to the Executive during the Employment Period.
8.
Expenses.
The
Executive is authorized to incur ordinary, necessary and reasonable expenses
in
the course of the Company’s business. Upon incurring the aforementioned
expenses, the Company shall reimburse the Executive for such expenses in full
every month, unless the expenses have been paid directly by the Company, upon
presentation by the Executive of an itemized account of the expenses in a manner
prescribed by the Company, together with all appropriate receipts required
in
order to permit such payments as proper deductions to the Company under the
Internal Revenue Code of 1986, as amended (the “Code”), and the rules and
regulations adopted pursuant thereto now or hereafter in effect.
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9. Termination
of Employment.
(a) Termination
for “Good Cause”:
The
Board
may terminate the Executive’s employment at any time for “Good Cause” and
without liability except as specifically provided for herein. For purposes
of
this Agreement, the term “Good Cause” includes: (i) the conviction of the
Executive of the commission of a felony; (ii) the Executive's willful gross
misconduct; (iii) the Executive's willful gross neglect of duties; or (iv)
the
Executive's willful dishonesty towards, fraud upon, or deliberate injury or
attempted deliberate injury to the Company.
In
the
event that the Company terminates the Executive for “Good Cause,” the Company
shall pay the Executive: (i) all earned but unpaid annual base salary to the
date of termination; (ii) any reasonable and necessary business expenses
incurred by the Executive in connection with his duties hereunder; and (iii)
any
accrued vacation or sick time. Any monies owed Executive pursuant to this
Section 9(a) shall be paid in full within thirty (30) days of the termination
of
Executive’s employment for “Good Cause.”
(b) Termination
without “Good Cause”:
In
the
event that the Company terminates the Executive for any reason other than “Good
Cause,” the Company shall pay to the Executive: (i) an amount equal to the
Executive’s annual base salary in effect on the date of termination (subject to
Section 11); (ii) all earned but yet unpaid annual base salary to the date
of
termination; (iii) any reasonable and necessary business expenses incurred
by
the Executive in connection with his duties hereunder; and (iv) any accrued
vacation and sick time. In addition, if the Company terminates the Executive
for
any reason other than “Good Cause,” all stock options held by the Executive
shall vest as of the date of termination. Any monies owed Executive pursuant
to
this Section 9(b) shall be paid in full within thirty (30) days of the
termination of Executive’s employment without “Good Cause.”
(c) Termination
by Executive for “Good Reason”:
In
the
event Executive terminates his employment with the Company for “Good Reason” (as
defined below), the Company shall pay to the Executive: (i) an amount equal
to
the Executive’s annual base salary in effect as of the date of termination
(subject to Section 11); (ii) all earned but yet unpaid annual base salary
to
the date of termination; (iii) any reasonable and necessary business expenses
incurred by the Executive in connection with his duties hereunder; and (iv)
any
accrued vacation and sick time. In addition, if the Executive terminates his
employment with the Company for “Good Reason,” all stock options held by the
Executive shall vest as of the date of termination. Any monies owed Executive
pursuant to this Section 9(c) shall be paid in full within thirty (30) days
of
Executive’s termination of his employment with the Company for “Good
Reason.”
For
purposes of this Agreement, “Good Reason” shall mean: (i) a change materially
adverse to the Executive in the nature or scope of his position, authorities,
powers, functions, responsibilities (including reporting responsibilities)
or
duties; (ii) the Executive’s principal place of business shall be moved more
than thirty (30) miles from 0000 Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxx Xxxxxxxx or
000
Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx, without his consent; or (iii) the
Company’s breach of any material provision of this Agreement continuing for more
than thirty (30) days after written notice thereof from the
Executive.
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10.
Change
of Control.
If a
Change of Control (as defined below) shall occur, and (a) the Company or any
successor thereto shall terminate the Executive’s employment within one hundred
and eighty (180) days before or after the effective date of the Change of
Control for any reason other than “Good Cause,” and at the time of such
termination a Change of Control was being considered by the Company, or (b)
the
Executive elects to terminate his employment with the Company or any successor
thereto within one hundred and eighty (180) days before or after the effective
date of the Change of Control for “Good Reason,” and at the time of such
termination a Change of Control was being considered by the Company, the
Executive shall be entitled to: (i) all earned but yet unpaid annual base salary
to the date of the Change of Control; (ii) any reasonable and necessary business
expenses incurred by the Executive in connection with his duties hereunder;
(iii) any accrued vacation and sick time; and (iv) an amount equal to two (2)
times the sum of (x) the Executive’s annual base salary in effect immediately
prior to the date the Executive’s employment with the Company terminates, and
(y) and amount which is the lesser of (1) $150,000 and (2) the aggregate amount
of any bonuses paid to the Executive during the twelve (12) months prior to
the
earlier of (A) the effective date of the Change of Control and (B) the date
the
Executive’s employment with the Company terminates; provided,
however,
that if
the Executive’s employment was terminated within one hundred and eighty (180)
days before the effective date of the Change of Control or the Executive elects
to terminate his employment with the Company within one hundred and eighty
(180)
days before the effective date of the Change of Control for “Good Reason,” the
Executive shall be entitled to the foregoing payment, less the amount paid
to
the Executive pursuant to Section 9(b) or 9(c) of this Agreement, as the case
may be, and subject to the Executive entering into and not revoking the Release
(as defined in Section 11 hereof). Any monies owed Executive pursuant to this
Section 10 shall be paid in full within thirty (30) days of the termination
of
Executive’s employment in connection with a Change of Control or, if the
Executive’s employment terminated prior to the Change of Control, shall be paid
in full within thirty (30) days of the effective date of the Change of
Control.
“Change
of Control” shall mean: (i) the acquisition by any person, entity or group of
persons or entities acting in concert of securities representing fifty percent
(50%) or more of the combined voting power of the Company’s then outstanding
securities, whether acquired in one transaction or a series of transactions;
(ii) a merger, consolidation or similar transaction which results in the
Company’s stockholders immediately prior to such transaction not holding
securities representing fifty percent (50%) or more of the total voting power
of
the outstanding securities of the Company or its successor; or (iii) a sale
of
all or substantially all of the Company’s assets (other than to an entity owned
by the Company or under common ownership with the Company).
11.
Release.
Notwithstanding anything else herein to the contrary, the payment to be paid
by
the Company to the Executive pursuant to Section 9(b)(i), 9(c)(i) or 10(iv)
of
this Agreement, is subject to the Executive entering into and not revoking
a
commercially reasonable release of claims in favor of the Company (the
“Release”). The Release shall include an affirmation of the restrictive
covenants set forth in Sections 13, 14 and 15 hereof and a non-disparagement
provision. Pursuant to the Release, the Executive will release the Company
from
any claims, whether arising under federal, state or local statute, common law
or
otherwise, that the Executive may have against the Company and which have arisen
on or before the date of the Release, other than any rights to indemnification
pursuant to any provisions of the Company’s Articles of Incorporation and
By-laws or any directors and officers liability insurance policies maintained
by
the Company. If the Executive fails or otherwise refuses to execute the Release
within a reasonable time after the Company’s request to do so, the Executive
shall not be entitled to any of the payments referenced in this Section
11.
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12.
Excise
Tax.
In the
event that the payments and other benefits provided for in this Agreement
constitute “parachute payments” within the meaning of Section 280G of the Code
and will be subject to the excise tax imposed by Section 4999 of the Code (the
“Excise Tax”), then the Executive’s severance benefits payable under the terms
of this Agreement will be either (a) delivered in full, or (b) delivered as
to
such lesser extent which would result in no portion of such severance benefits
being subject to the Excise Tax, whichever of the foregoing amounts, taking
into
account the applicable federal, state and local income taxes and the Excise
Tax,
results in the receipt by the Executive, on an after-tax basis, of the greatest
amount of severance benefits, notwithstanding that all or some portion of such
severance benefits may be taxable under Section 4999 of the Code. Unless the
Company and the Executive otherwise agree in writing, any determination required
under this Section 12 will be made in writing by the Company’s independent
public accountants (the “Accountants”), whose determination will be conclusive
and binding upon the Executive and the Company for all purposes. For purposes
of
making the calculations required by this Section 12, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of
Section 280G and 4999 of the Code. The Company and the Executive will
furnish to the Accountants such information and documents as the Accountants
may
reasonably request in order to make a determination under this Section 12.
The
Company will bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section 12.
13.
Covenant
Not to Compete.
The
Executive hereby agrees that (a) during the Employment Period and (b) for one
year after the termination of Executive’s employment with the Company, for
whatever reason whatsoever, Executive shall not, directly or indirectly, be
employed by, provide consulting services to or have any ownership interest
(as a
stockholder, partner or otherwise) in any Competing Business; provided,
that
nothing in this Section 13 shall prohibit the Executive from acquiring up to
5%
of any class of outstanding equity securities of any Competing Business whose
equity securities are regularly traded on a national securities exchange or
in
the “over-the-counter market,” so long as such investment does not interfere
with the Executive’s duties and obligations to the Company as determined by the
Company in its sole discretion. For purposes of this Section 13, a “Competing
Business” is a business which the Company has engaged in or has actively
investigated engaging in at any time during the twelve (12) months prior to
the
termination of the Executive’s employment.
14.
Covenant
Not to Solicit.
The
Executive agrees that (a) during the Employment Period, and (b) for a period
of
three (3) years after the Employment Period, the Executive will not recruit
any
employee of the Company or solicit or induce, attempt to solicit or induce,
or
assist in the solicitation or inducement of any employee of the Company to
terminate his or her employment, or otherwise cease his or her relationship,
with the Company, or solicit, divert or take away, or attempt to solicit, divert
or take away, the business or patronage of any of the clients, customers or
accounts of the Company that were served by the Company while the Executive
was
employed by the Company.
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15.
Confidential
Information and Materials.
The
Executive acknowledges that by reason of the Executive’s employment with the
Company, the Executive has and will hereafter, from time to time during the
Employment Period, become exposed to and/or become knowledgeable about
proposals, plans, inventions, practices, systems, programs, subscriptions,
strategies, formulas, processes, methods, techniques, research, records,
suppliers, sources, customer lists, billing information, any other form of
business information and any trade secrets of every kind and character, whether
or not they constitute a trade secret under applicable law, which are not known
to the Company’s competitors and which are kept secret and confidential by the
Company (the “Confidential Information”). The Executive therefore agrees that at
no time during or after the Employment Period will he disclose or use the
Confidential Information or materials to or with any person, firm, business,
corporation, association, or other entity for any reason or purpose except
as
may be required in the prudent course of business for the sole benefit of the
Company, or as may be required by a court order or by law.
16.
Company
Property.
All
correspondence, memoranda, notes, records, reports, plans, price lists, customer
lists, financial statements, catalogs, computer programs, disks, tapes, other
papers and other medium on or by which Confidential Information is stored,
received or made by the Executive in connection with his employment by the
Company shall be the property of the Company and shall be delivered to the
Company upon the termination of his employment or at any other time upon request
of the Company.
17.
Equitable
Remedies.
The
Company and the Executive confirm that the restrictions contained in Sections
13, 14, 15 & 16 hereof are, in view of the nature of the business of the
Company, reasonable and necessary to protect the legitimate interests of the
Company and that any violation of any provisions of Sections 13, 14, 15 & 16
will result in irreparable injury to the Company. Therefore, the Executive
hereby agrees that in the event of any breach or threatened breach of the terms
or conditions of this Agreement by the Executive, the Company’s remedies at law
will be inadequate and, in any such event, the Company shall be entitled to
commence an action for preliminary and permanent injunctive relief and other
equitable and monetary relief in any court of competent
jurisdiction.
18.
Costs.
If
litigation is brought to enforce or interpret any provision contained herein,
the court shall award reasonable attorneys’ fees and disbursements to the
prevailing party as determined by the court.
19.
Severability.
If any
provision of the Agreement or application thereof to any person or circumstance
is adjudicated to be invalid or unenforceable in a jurisdiction, such invalidity
or unenforceability shall not affect any other provision or application of
this
Agreement, which can be given effect without the invalid or unenforceable
provision or application and shall not invalidate or render unenforceable such
provision or application in any other jurisdiction.
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20.
Entire
Agreement; Amendments.
This
Agreement contains the entire agreement between the parties hereto with respect
to the subject matter hereof and supersedes all prior and contemporaneous
agreements and understandings, oral or written, with respect to the subject
matter hereof. This Agreement may not be changed, amended or modified orally,
but may be changed only by an agreement in writing signed by the party against
whom any waiver, change, amendment, modification or discharge may be
sought.
21.
Survival
of the Company's Obligations.
This
Agreement shall be binding upon and inure to the benefit of the executors,
administrators, heirs, successors and assigns of the parties; provided,
however,
that
this Agreement shall not be assignable by the Executive.
22.
Governing
Law; Consent to Jurisdiction.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New Jersey without application of its conflict of laws rules. The
Executive hereby submits to the exclusive jurisdiction and venue of the courts
of the State of New Jersey or the United States District Court for the District
of New Jersey for purposes of any legal action.
23.
Counterparts.
This
Agreement may be executed in one or more counterparts, all of which taken
together shall constitute one and the same agreement.
24.
Notices.
All
notices required or permitted hereunder shall be in writing and shall be sent
by
overnight courier or certified or registered mail, return receipt requested,
postage prepaid, as follows:
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If
to the Company:
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Scivanta
Medical Corporation
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000
Xxxxxx Xxxxxx
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Xxxxxx
Xxxx, XX 00000
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Attention:
Xxxxxx X. Xxxxxxx
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with
a copy to:
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Xxxx
X. Xxxxxxx, Esq.
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Xxxxxxxx,
Xxxxxxxx & Xxxxxx, P.C.
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U.S
Postal Service Address:
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X.X.
Xxx 000
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Xxxxxxxxxx,
Xxx Xxxxxx 00000
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or
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Hand
Delivery and Overnight Service Address:
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000
Xxxx Xxxx Xxxx
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Xxx
Xxxx, Xxx Xxxxxx 00000
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If
to the Executive:
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Xxxxx
X. XxXxxxx
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0000
Xxxxxxxx Xxxxx
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Xxxxxxx,
XX 00000
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Notices
may be sent to such other address as either party may designate in a written
notice served upon the other party in the manner provided herein. All notices
required or permitted hereunder shall be deemed duly given and received on
the
next business day, if delivery is by overnight courier, or the second day next
succeeding the date of mailing, if delivery is by registered mail.
25.
Headings.
The
Section headings herein are for convenience only and shall not affect the
interpretation or construction of this Agreement.
26.
Further
Assurances.
Each
party shall cooperate with and take such action as may be reasonably requested
by the other party in order to carry out the provisions and purposes of this
Agreement.
[Signature
Page Follows.]
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IN
WITNESS WHEREOF,
the
parties hereto have duly executed this Executive Employment Agreement as of
the
date first provided above.
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The
Company
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(Scivanta
Medical Corporation)
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By:
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/s/
Xxxxxx X. Xxxxxxx
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Name:
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Xxxxxx
X. Xxxxxxx
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Title:
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Executive
Vice President, Chief Financial Officer and Secretary
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Executive
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(Xxxxx
X. XxXxxxx)
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/s/
Xxxxx X. XxXxxxx
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Xxxxx
X. XxXxxxx
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