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EXHIBIT 10.21
EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 13th day of December, 1999 between Xxxx
Laboratories, Inc., a New York corporation having its principal executive
offices at Xxx Xxxxxx Xxxx, Xxxxxx, Xxx Xxxx 00000 (the "Company"), and Xxxxxx
Xxxxxx (the "Employee").
WITNESSETH:
WHEREAS, the Company wishes to assure itself of the services of the
Employee and provide an inducement for the Employee to enter into its employ;
and
WHEREAS, the Employee is willing to serve in the employ of the Company for
the period and on the other terms and conditions hereafter set forth;
NOW, THEREFORE, the Company and the Employee hereby agree as follows:
1. Employment. The Company agrees to employ the Employee, and the Employee
agrees to enter into and remain in the employ of the Company, during the term of
this Agreement and on the other terms and conditions hereafter set forth.
2. Term. The term of this Agreement shall commence on December 31, 1999,
or such earlier date as designated by the Employee (the "Commencement Date") and
shall terminate at the close of business on the third anniversary of the
Commencement Date unless sooner terminated in accordance with the terms of this
Agreement or extended as hereinafter provided. The term of this Agreement shall
be extended automatically, without further action by the Company or the
Employee, on the date which is six months before the third anniversary of the
Commencement Date and on the date which is six months before each subsequent
anniversary of the Commencement Date (the "Extension Date") for successive
periods of twelve months each, unless either party shall have given written
notice to the other party, in the manner set forth in paragraph 8(e) or (f)
below, prior to the Extension Date in question, that the term then in effect is
not to be extended or further extended, as the case may be.
3. Positions and Responsibilities; Place of Performance. During the term
of this Agreement, the Employee agrees to serve the Company and the Company
agrees to employ the Employee as its Senior Vice President, Strategic Business
Development, and General Counsel, reporting to the Chief Executive Officer of
the Company (the "CEO"). In that capacity, he shall be responsible for managing
all legal matters regarding the company, participating and directing strategic
business development matters for the company, and performing such other
reasonable duties, consistent with the position of Senior Vice President,
Strategic Business Development, and General Counsel, as may lawfully be assigned
to him by the CEO or the Board of Directors of the Company (the "Board"). In
addition, if elected as a member of the Board or a committee of the Board
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during the term of this Agreement (there being no obligation on the part of the
Company, the Board or the shareholders of the Company to elect the Employee as
such or to nominate the Employee for election as such) the Employee agrees to
serve as such, without additional compensation beyond that provided in this
Agreement. In connection with his employment by the Company, the Employee shall
be based at the executive offices of the Company in Blauvelt, New York, and he
agrees to relocate his residence to that general vicinity if such relocation
should be necessary for him to serve at that location. If the Company requires
the Employee to relocate outside the Metropolitan area of New York City during
the term of his employment and if the Employee declines to do so, such refusal
to relocate shall be considered termination by the Employee for Good Reason.
During the term of this Agreement, the Employee shall devote all his business
time, attention, skill and efforts to the faithful performance of his duties
hereunder. Provided however, Employee serves on the Board of Directors of I-Dent
International and such service will not be considered a violation of the terms
of this Agreement.
4. Compensation. For all services rendered by the Employee in any capacity
during the term of this Agreement, and for his undertakings with respect to
confidential information set forth in paragraph 6 below, the Employee shall be
entitled to the following:
(a) a salary, payable in installments not less frequent than
monthly, at the annual rate of $235,000.00, with increases in such rate in
accordance with the Company's regular administrative practices applicable to
senior officers from time to time during the term of this Agreement (the annual
salary rate as increased from time to time during the term of this Agreement
being hereafter referred to as the "Base Salary"); and
(b) participation in the Company's annual executive incentive or
bonus plan as in effect from time to time, with the opportunity to receive an
award in accordance with the terms and conditions of such plan, for each fiscal
year of the Company that commences or terminates during the term of this
Agreement, of up to 40% of the Base Salary earned during such year (or such
higher percentage as the Board or a committee of the Board may prescribe from
time to time during the term of this Agreement), it being understood that any
award for the fiscal year of the Company in which the term of this Agreement
commences or terminates pursuant to the terms hereof shall be prorated based on
the portion of such fiscal year that coincides with the term of this Agreement,
and that any award for the fiscal year of the Company in which the term of this
Agreement terminates pursuant to the terms hereof shall be made at the same time
as awards (if any) are made to other participants with respect to such fiscal
year; and
(c) an option to purchase 50,000 shares of the Company's common
stock at the fair market value of such shares on the date on which the Board or
a committee of the Board (the Administrator") grants such option or if later, on
the date which the Administrator specifies as the date on which the grant of
such option is to be effective (the "Grant Date") (the number of shares and
purchase price to be adjusted for any stock split occurring after the Grant
Date), subject to the terms and conditions of any
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stock option plan of the Company under which such option may be granted, such
other terms and conditions consistent with the terms of such plan the
Administrator granting the option may impose and the following terms and
conditions:
(i) the option shall become exercisable on the first
anniversary of the Grant Date with respect to one-third of the shares that are
subject to the option, if the Employee remains in the full-time employment of
the Company until that date; and
(ii) the option shall become exercisable on the second
anniversary of the Grant Date with respect to an additional one-third of the
shares that are subject to the option, if the Employee remains in the full-time
employment of the Company until that date: and
(iii) the option shall become exercisable on the third
anniversary of the Grant Date with respect to the final additional one-third of
the shares that are subject to the option, if the Employee remains in the
full-time employment of the Company until that date; and
(iv) to the extent not theretofore exercisable, the option
shall become exercisable on the date, if any, on which a Change in Control (as
defined in the Company's 1993 Stock Incentive Plan as in effect on the date of
this Agreement ) occurs, if the Employee remains in the full-time employment of
the Company until that date, provided that, if such Change in Control occurs
less than six months after the Grant Date, the Employee agrees in writing (if
requested to do so by the Administrator) to remain in the employ of the Company
or a subsidiary at least through the date which is six months after the Grant
Date with substantially the same title, duties, authority, reporting
relationships and compensation as on the day immediately preceding such Change
in Control; and
(v) the option shall expire on the tenth anniversary of the
Grant Date unless the Employee's employment terminates before that date, in
which case the option shall expire upon such termination of employment or within
such period of time thereafter as the Administrator may specify; provided that
if the Company terminates the Employee's employment without Good Cause or the
Employee terminates his employment with Good Reason, such option shall remain
exercisable, to the extent it was exercisable at the time of such termination,
for at least three months thereafter; and
(d) the business and personal use of an automobile at Company
expense including, without limitation, payment or reimbursement of automobile
insurance and maintenance expenses in accordance with the Company's automobile
policy applicable to senior officers on the date of this Agreement; and
(e) participation in all Company health, welfare, savings and other
employee benefit and fringe benefit plans (including vacation pay plans or
policies and life and disability insurance plans) in which other senior officers
of the Company participate during the term of this Agreement, subject in all
events to the terms and
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conditions of such plans as in effect from time to time. Nothing in this
paragraph (e) shall preclude the Company from amending or terminating any such
plan at any time. The plans covered by this paragraph (e) shall not include the
annual incentive or stock option plans, which are covered by paragraphs (b) and
(c) above.
5. Termination of Employment.
(a) Termination by the Company without Good Cause or by the Employee
for Good Reason. If during the term of this Agreement the Employee's employment
with the Company is terminated by the Company without Good Cause or is
terminated by the Employee for Good Reason other than at the expiration of the
original or any extended term of this Agreement, the Company, subject to
compliance by the Employee with the provisions of paragraph 6 below, relating to
confidential information, shall pay the Employee, as liquidated damages, and as
additional consideration for the Employee's undertakings under paragraph 6
below, a lump sum amount of money equal to 1.5 times his Base Salary. Payment
under this paragraph (a) shall be in lieu of any severance pay that may be
payable under any plan or practice of the Company.
(b) Termination by the Company for Good Cause or by the Employee
without Good Reason. If, during the term of this Agreement, the Employee's
employment by the Company is terminated by the Company for Good Cause or by the
Employee without Good Reason, the Employee shall not be entitled to receive any
compensation under paragraph 4 above accruing after the date of such termination
or any payment under paragraph 5(a) above. The provisions of this paragraph 5(b)
shall be in addition to, and not in lieu of, any other rights and remedies the
Company may have at law or in equity in respect of such termination of
employment.
(c) Good Cause Defined. For purposes of this Agreement, the Company
shall have "Good Cause" to terminate the Employee's employment during the term
of this Agreement if:
(i) the Employee materially fails to substantially perform his
duties hereunder for any reason or fails to devote substantially all his
business time to the affairs of the Company, and such failure is not
discontinued within a reasonable period of time, in no event to exceed 30 days,
after the Employee receives written notice from the Company of such failure; or
(ii) the Employee commits a material act of dishonesty
resulting or intended to result directly or indirectly in gain or personal
enrichment at the expense of the Company; or
(iii) the Employee is grossly negligent or engages in willful
misconduct or insubordination in the performance of his duties hereunder; or
(iv) the Employee breaches his obligations under paragraph 6
below, relating to confidential information.
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(d) Good Reason Defined. For purposes of this Agreement, the
Employee shall have "Good Reason" to terminate his employment during the term of
this Agreement if:
(i) the Company fails to provide compensation or benefits that
the Company is obligated to provide under paragraph 4 above and the failure is
not remedied within 30 days after the Company receives written notice from the
Employee of such failure; or
(ii) the Company assigns the Employee duties, responsibilities
or reporting relationships not contemplated by paragraph 3 above without his
consent, or limits his duties or responsibilities contemplated by paragraph 3
above in any respect materially detrimental to him, and in either case the
situation is not remedied within 30 days after the Company receives written
notice from the Employee of the situation;
(iii) he is removed from, or not elected or reelected to, the
office of Senior Vice President, Strategic Business Development and General
Counsel of the Company, or
(iv) the Company requires the Employee to relocate outside the
Metropolitan area of New York City and the Employee declines to do so.
6. Confidential Information. The Employee agrees not to disclose, either
while in the Company's employ or at any time thereafter, to any person not
employed by the Company, or not engaged to render services to the Company,
except with the prior written consent of an authorized officer of the Company or
as necessary or appropriate for the performance of his duties hereunder, any
material confidential information obtained by him while in the employ of the
Company, including, without limitation, information relating to any of the
inventions, processes, formulae, plans, devices, compilations of information,
research, methods of distribution, suppliers, customers, client relationships,
marketing strategies or trade secrets of the Company or any subsidiary thereof;
provided, however, that this provision shall not preclude the Employee from use
or disclosure of information known generally to the public or of information not
considered confidential by persons engaged in the businesses conducted by the
Company, or otherwise disclosed by the Company to any third parties. any
subsidiary of the Company, or from disclosure required by law or court order.
The Employee also agrees that upon leaving the Company's employ he will not take
with him, without the prior written consent of an authorized officer of the
Company, and he will surrender to the Company, any record, list, drawing,
blueprint, specification or other document or property of the Company or any
subsidiary thereof, together with any copy or reproduction thereof, mechanical
or otherwise, which is of a confidential nature relating to the Company or any
subsidiary thereof, or without limitation, relating to its or their methods of
distribution, suppliers, customers, client relationships, marketing strategies
or any description of any formulae or secret processes, or which was obtained by
him or entrusted to him during the course of his employment with the Company.
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7. Severability
(a) In the event that any provision of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions of this Agreement not so invalid or unenforceable shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law; and
(b) Any provision of the Agreement which may for any reason be
invalid or unenforceable in any jurisdiction shall remain in effect and be
enforceable in any jurisdiction in which such provision shall be valid and
enforceable.
8. General Provisions.
(a) No right or interest to or in any payments to be made under this
Agreement shall be subject to anticipation, alienation, sale, assignment,
encumbrance, pledge, charge or hypothecation or to execution, attachment, levy
or similar process, or assignment by operation of law.
(b) To the extent that the Employee acquires a right to receive
payments from the Company under this Agreement, such right shall be no greater
than the right of an unsecured general creditor of the Company. All payments to
be made hereunder shall be paid from the general funds of the Company and no
special or separate fund shall be established and no segregation of assets shall
be made to assure payment of any amount hereunder.
(c) This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York applicable to contracts
performed wholly within the State of New York, without giving effect to the
principles of conflicts of laws of that State.
(d) This Agreement shall be binding upon and inure to the benefit of
the Company, its successors and assigns, and the Employee, his heirs, legatees,
distributees and legal representatives.
(e) Any notice or other communication to the Company pursuant to any
provision of this Agreement shall be given in writing and will be deemed to have
been delivered:
(i) when delivered in person to the Corporate Secretary or
Chief Executive Officer of the Company; or
(ii) one week after it is deposited in the United States
certified or registered mail, postage prepaid, addressed to the Corporate
Secretary of the Company at Xxx Xxxxxx Xxxx, Xxxxxx, Xxx Xxxx 00000 or at such
other address of which the
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Company may from time to time give the Employee written notice in accordance
with paragraph 8(f) below.
(f) Any notice or other communication to the Employee pursuant to
any provision of the Agreement shall be given in writing and will be deemed to
have been delivered:
(i) when delivered to the Employee in person, or
(ii) one week after it is deposited in the United States
certified or registered mail, postage prepaid, addressed to the Employee at 0
Xxxxx Xxxxxx Xxxxx Xxxx, Xxx Xxxxx, Xxx Xxxx 00000 or at such other address of
which the Employee may from time to time give the Company written notice in
accordance with paragraph 8(e) above.
(g) No provision of this Agreement may be amended, modified or
waived unless such amendment, modification or waiver shall be agreed to in a
writing signed by the Employee and an authorized officer of the Company.
(h) This instrument contains the entire agreement of the parties
relating to the subject matter of this Agreement and supersedes and replaces all
prior agreements and understandings with respect to such subject matter, and the
parties have made no agreements, representations or warranties relating to the
subject matter of this Agreement which are not set forth herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
XXXX LABORATORIES, INC.
By: XXXXXXXXX X. XXXXXXX
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[SEAL] Vice President, Human Resources
Attest:
XXXX XXXXXX
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Secretary
XXXXXX XXXXXX
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Employee
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