EMPLOYMENT AGREEMENT
--------------------
This Agreement made as of the 1st day of October, 1999, by and between
ADVANCED VIRAL RESEARCH CORP., a Delaware corporation, with offices located at
000 Xxxxxxxxx Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxx Xxxx 00000 (the
"Corporation") and XXXX XXXXXXXXX, with an address at 00 Xxxxxxx Xxxxxx, Xxxxxx,
Xxx Xxxxxx 00000 (the "Employee"):
W I T N E S S E T H :
WHEREAS, the parties desire to enter into this agreement to set forth
the terms of the Employee's employment by the Corporation.
NOW, THEREFORE, in consideration of the mutual premises and covenants
set forth herein and for other good and valuable consideration, the receipt,
adequacy and legal sufficiency of which are hereby acknowledged, the Corporation
and the Employee mutually agree as follows:
1.Employment and Duties.
(a) Employment. The Company agrees to employ the Employee, and
the Employee agrees to accept employment with the Company, on the terms and
conditions hereinafter set forth.
(b) Scope of Duties. The Employee's title shall be Chief
Financial Officer of the Company. The Employee shall render services solely for
the benefit, and on behalf of the Company and its subsidiaries as directed by
the Board of Directors of the Company. The Board of Directors of the Company
shall have the power to determine the general and specific duties to be
performed by the Employee and the means and the manner by which those duties
shall be performed.
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(c) Professional Standards. Recognizing and acknowledging that
it is essential for the protection and enhancement of the name and business of
the Corporation and the good will pertaining thereto, the Employee shall perform
his duties under this Agreement professionally and in accordance with the
standards established by the Corporation from time to time; and the Employee
shall not act, and shall refrain from acting, in any manner that could harm or
tarnish the name, business or income of the Corporation or the good will
pertaining thereto.
2.Devotion of Time to Employment: The Employee shall devote his full
business time and attention to the business and affairs of the Corporation as
shall be necessary to carry out his duties hereinabove, and as may be amended
from time to time consistent with the Corporation's business development.
3.Compensation and Benefits:
(a) Base Salary. For all services rendered by the Employee
during the term of this Agreement, the Corporation shall pay to the Employee a
base salary, payable in accordance with the Corporation's customary payment
policies and periods, at the following annual rates: (i) for the period
commencing on the date of this Agreement and ending on the day immediately
preceding the first anniversary of the date of this Agreement, $175,000; (ii)
for the period commencing on the first anniversary of the date of this Agreement
and ending on the day immediately preceding the second anniversary of the date
of this Agreement, $200,000; and (iii) for the period commencing on the second
anniversary of the date of this Agreement and ending on the day immediately
preceding the third anniversary of the date of this Agreement, $225,000.
(b) Bonuses. For each year during the term of this Agreement
the Corporation shall pay to the Employee not later than 90 days after the end
of such period a cash bonus of not less than 10% nor more than 50% of the
Employee's base salary for such year the lesser percentage being
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earned upon the completion of each year's term of service in compliance with
this Agreement, and the remaining 40% being dependent on the Board's good faith
determination, after discussion with the Employee as to whether or not the
Corporation and the Employee met their respective goals for such year, as set
forth in Schedule A-1 and A-2 for each year of the term hereof.
(c) Fringe Benefits. During the term of this Agreement, the
Corporation shall provide to the Employee and the Employee's family the same
benefits that the Corporation is then providing generally to all other senior
executives of the Corporation and their families. Nothing herein shall require
the Corporation to adopt, maintain or continue any fringe benefit.
(d) Stock Options. On the date hereof, the Corporation has
granted to the Employee stock options to purchase an aggregate of 4,547,880
shares of the Corporation's Common Stock, par value $.00001 per share ("Common
Stock"), which number of shares is equal to 1.5% of the issued and outstanding
shares of Common Stock on the date hereof. All of the options granted pursuant
to the preceding sentence shall have a term of ten (10) years from the date of
grant. The price for all Common Stock which may be purchased upon exercise of
the foregoing options shall be $.24255 per share, such amount being equal to
110% of the average of the low bid and high asked prices of the Common Stock for
the last ten days prior to the date of this Agreement during which the
Corporation's Common Stock was traded. Subject to Section 5(c), options to
purchase an aggregate of 1, 515,960 shares shall vest on each of the first,
second and third anniversaries of the date of this Agreement provided that the
Employee shall then be employed by the Corporation and shall not be in material
default of any of the provisions of this Agreement. The Employee shall also be
eligible for additional awards of stock options by the Corporation, provided
that the granting of such options shall be within the sole discretion of the
Board of Directors of the Corporation (or any committee thereof with
responsibility for the granting of stock options).
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(e) Vacation. The Employee shall be entitled to vacation at
the rates of 15 working days during the first year and 20 working days during
each succeeding year of the term of this Agreement. Vacation time may be taken
all at once or from time to time; provided, however, that (i) the Employee shall
schedule vacation time so as to mitigate the adverse effect to the Corporation
of the Employee's absence and (ii) the Employee shall give the Corporation at
least thirty (30) days notice of consecutive vacation days in excess of five (5)
to be taken by the Employee at any time.
(f) Automobile Allowance. During the term of this Agreement
the Employee shall receive a non-accountable automobile allowance of $500 per
month. The Employee shall be solely responsible for all costs of acquiring and
maintaining an automobile for his business use including purchase or leasing
costs, fuel, insurance, repairs, license and registration fees.
(g) Professional Fees and Other Reimbursable Expenses. The
Corporation shall reimburse the Employee for certified public accountant license
fees and for membership in professional organizations set forth in Schedule B
hereto up to a maximum of $5,000 per year in the aggregate. In addition, the
Corporation shall reimburse the Employee for all other expenses incurred by him
in performing his duties under this Agreement provided that such expenses are
approved in advance by the Chief Executive Officer of the Corporation.
(h) Relocation Expenses. If the Employee relocates his primary
residence to Westchester County, New York or to New York City prior to the
second anniversary of the date of this Agreement, the Corporation shall pay on
behalf of the Employee, upon receipt of reasonable documentation therefor, the
reasonable expenses incurred by the Employee in connection with such relocation,
up to a maximum of $15,000, such expenses to be limited to those incurred from a
moving company and legal and brokerage fees related to the sale of his current
residence. If any of
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the foregoing expenses are taxable as income to the Employee, he shall be
entitled to receive an additional sum equal to 40% of the amount so taxable.
4.Intellectual Property. The parties agree that if any intellectual
property rights, including, without limitation, trademarks, copyrights, or
patents, shall be developed by the Employee from the knowledge the Employee
acquires while performing his duties to the Corporation under this Agreement,
the Employee agrees to assign such rights to the Corporation.
5.Termination of Agreement.
(a) Subject to Section 5(b) and 5(c), the term of this
Agreement shall commence on the date hereof and continue until the third
anniversary of the date hereof. Until the expiration of 90 days after the date
of this Agreement, the Corporation may terminate this Agreement if in the good
faith determination of the Board of Directors of the Corporation, in its sole
discretion, the continued employment of the Employee under this Agreement would
not be beneficial to the Corporation. In such event, the effects of such
termination shall be the same as set forth in Section 5(b), except that the
Employee shall be paid $87,500 as severance pay.
(b) The Corporation may terminate this Agreement at any time
"for cause" if: the Employee becomes unfit to properly render services to the
Corporation hereunder because of alcohol or drug related abuses, as defined
under and is consistent with applicable laws; conviction of a crime or moral
turpitude that constitutes a felony under federal or state law; or material
breach of this Agreement which is not cured within twenty (20) days after
written notice is given by the Corporation to the Employee. Such termination,
except for material breach (in which case the termination shall be effective
immediately upon the expiration of the cure period) shall be effective thirty
(30) days after the delivery of written notice thereof to the Employee of such
termination of his employment for cause (the "Cause Termination Notice"), or at
such later time as may be
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designated in said notice. The Employee shall vacate the offices of the
Corporation on or before such effective date unless such termination for cause
may be subject to cure by the Employee. All compensation due hereunder shall
cease as of said effective date of the termination, except accrued compensation
that shall remain unpaid at such date. For such purpose, the Employee shall not
be deemed to have any accrued right to receive any bonus for the year in which
his employment is terminated. Upon a termination of the Employee's employment
under this Section 5(b), the Employee may exercise his options to the extent
vested as of the effective date of termination, until ninety (90) days after the
effective date of termination of his employment, after which such options shall
terminate.
(c) Except in the case of a termination for cause (which is
governed by Section 5(b)), the Corporation may terminate this Agreement upon not
less than thirty (30) days prior written notice for any reason or no reason. In
such event, all compensation shall cease as of the effective date of the
termination, except accrued compensation which shall remain unpaid at such date
(which accrued compensation shall not be deemed to include any bonus payable in
respect of the year in which the Employee's employment was terminated), except
that the Corporation shall also pay to the Employee in cash in three equal
monthly installments starting 30 days after the effective date of termination an
amount equal to an aggregate of 75% of the Employee's annual base salary at the
rate then in effect. Upon a termination of the Employee's employment under this
Section 5(c), all stock options granted to the Employee on the date hereof shall
become 100% vested (the options which were vested prior to the acceleration made
as a result of this sentence are referred to as the "Pre- Vested Options" and
the options which first become vested pursuant to this sentence are referred to
as the "Accelerated Options"). Upon termination of the Employee's employment
under this Section 5(c), the Employee may exercise (i) all of his Pre-Vested
Options for the remainder of the original
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term of such Pre-Vested Options and (ii) all of his Accelerated Options until
ninety (90) days after the effective date of termination of his employment,
after which such Accelerated Options shall terminate.
(d) Except in the case of termination by the Employee after a
Change of Control (as hereinafter defined), the effect of which termination
shall be governed by Section 5(e), the Employee may elect to terminate this
Agreement at any time for any reason provided he delivers written notice of such
intention to terminate not less than sixty (60) days prior to the date of such
termination. In such event, all compensation and other benefits (except accrued
compensation which shall remain unpaid at such date (which accrued compensation
shall not be deemed to include any bonus payable in respect of the year in which
the Employee terminates his employment)), shall cease as of the effective date
specified in such notice, except that the Employee shall have the right to
exercise his options to the extent they are vested on the effective date of
termination until ninety (90) days after such date, after which such options
shall terminate.
(e) If there occurs a Change of Control of the Corporation,
the Employee may, at his option, upon thirty (30) days written notice given to
the Corporation within one year after a Change of Control, terminate this
Agreement, and:
(i) the Employee shall be entitled to receive payment
of his base salary for the remaining term of the
Agreement[, to be paid as a lump sum];
(ii) all stock options granted to the Employee on the
date hereof shall immediately become 100% vested; and
(iii) the Employee may exercise all of his stock
options until ninety (90) days after the effective
date of termination of his employment, after which
such options shall terminate.
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(f) Notwithstanding any other provision of this Agreement, if
the aggregate present value of the "parachute payments" to the Employee,
determined under Section 280G(b) of the Internal Revenue Code of 1986, as
amended (the "Code"), is at least three times the "base amount" determined under
such Section 280G, then the compensation otherwise payable under this Agreement
and any other amount payable hereunder or any other severance plan, program,
policy or obligation of the Corporation or any other affiliate thereof shall be
reduced so that the aggregate present value of the parachute payments to the
Employee, determined under such Section 280G, does not exceed 2.99 times the
base amount. In no event, however, shall any benefit provided hereunder be
reduced to the extent such benefit is specifically excluded by Section 280G(b)
of the Code as a "parachute payment" or as an "excess parachute payment." Any
decisions regarding the requirement or implementation of such reductions shall
be made by such tax counsel as may be selected by the Company and acceptable to
the Employee.
(g) For purposes of this Agreement, the term "Change of
Control" means the occurrence of any of the following: (i) the consummation of
any transaction the result of which is that any person or group (as such term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended),
other than the Employee, Xxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxxx or Xxxxxxx Xxxxxxx
or any affiliate thereof or any group comprised of any of the foregoing, owns,
directly or indirectly, 51% of the Common Equity (as hereinafter defined) of the
Corporation, (ii) the Corporation consolidates with, or merges with or into,
another person (other than a direct or indirect wholly-owned subsidiary) or any
person consolidates with, or merges with or into, the Corporation, in any such
event pursuant to a transaction in which the outstanding Voting Stock (as
hereinafter defined) of the Corporation, as the case may be, is converted into
or changed for cash, securities or other property, other than any such
transaction where the outstanding Voting Stock of the
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Corporation, as the case may be, is converted into or exchanged for Voting Stock
of the surviving or transferee corporation and the beneficial owners of the
Voting Stock of the Corporation immediately prior to such transaction own,
directly or indirectly, not less than a majority of the Voting Stock of the
surviving or transferee corporation immediately after such transaction, (iii)
the Corporation, either individually or in conjunction with one or more
subsidiaries sells, assigns, conveys, transfers, leases or otherwise disposes
of, or the subsidiaries sell, assign, convey, transfer, lease or otherwise
dispose of, all or substantially all of the properties and assets of the
Corporation and its subsidiaries, taken as a whole (either in one transaction or
a series of related transactions), including capital stock of the subsidiaries,
to any person (other than the Corporation or a wholly owned subsidiary of the
Corporation), or (iv) during any two (2) year period commencing subsequent to
the date of this Agreement, individuals who at the beginning of such period
constituted the Board of Directors of the Corporation (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Corporation was approved by a vote of
two-thirds of the directors then still in office) who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved cease for any reason to constitute a majority of the
Board of Directors then in office; provided, however, that a person shall not be
deemed to have ceased being a director for such purpose if such person shall
have resigned or died. For purposes hereof, (x) the term "Common Equity" of the
Corporation means all capital stock of the Corporation that is generally
entitled to vote in the election of directors and (ii) the term "Voting Stock"
of the Corporation means securities of any class of capital stock of the
Corporation entitling the holders thereof to vote in the election of members of
the Board of Directors of the Corporation.
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6.Limitations on Authority: Without the express written consent from
the Board of Directors of the Corporation, and other than in the ordinary course
of business, the Employee shall not have apparent or implied authority to:
(a) Pledge the credit of the Corporation.
(b) Bind the Corporation under any note, mortgage or other
monetary obligation under a monetary instrument.
(c) Release or discharge any debt due the Corporation unless
the Corporation has received the full amount thereof.
(d) Sell, mortgage, transfer or otherwise dispose of a
substantial amount of the assets of the Corporation.
7.Covenant Not to Compete and Confidentiality.
(a) In order to induce the Corporation to enter into an
employment relationship, the Employee covenants and agrees for a period of five
(5) years after termination of the Employee's employment, the Employee will not
directly or indirectly, as sole proprietor, independent contractor, employee,
consultant, agent, partner or joint venturer, or as an officer, director,
stockholder, agent, servant or employee of any firm, person, entity, partnership
or corporation, or otherwise, engage or participate in or attempt to engage or
participate in any manner in the same, a similar or a directly or indirectly
competitive business, to that of Corporation. Notwithstanding the foregoing, the
Employee shall be entitled to be employed by a major pharmaceutical company in a
non-marketing or sales capacity even if such employer is marketing a product
that is competitive with those of the corporation provided that such competitive
product does not constitute 10% or more of such employer's sales.
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(b) For a period of one (1) year from and after the
termination of the Employee's employment, the Employee agrees that he shall
refrain from soliciting and shall not, directly or indirectly, as sole
proprietor, independent contractor, employee, consultant, agent, partner, or
joint venturer, or as an officer, director, stockholder, agent or employee of
any firm, person, entity, partnership or corporation, or otherwise solicit the
employees of the Corporation to leave the service of Corporation.
(c) The parties agree that the Corporation's products,
technology, inventions, technical data, process, patent applications,
"know-how", tests, developments, designs, improvements, drawings, formulas,
methods, research plans, clinical plans, clinical data, marketing plans and
business plans shall be a trade secret and proprietary and/or confidential
information. The parties agree that all information concerning the Corporation's
product, RETICULOSE AND/OR PRODUCT R, and any and all additional products
developed during the period of the employee's employment are highly confidential
and are the sole and exclusive property of the Corporation. The parties
acknowledge that the Employee shall have access to confidential information
concerning the Corporation and specifically concerning RETICULOSE AND/OR PRODUCT
R, and any and all additional products developed during the period of the
Employee's employment, including their methodology of development and
manufacture, among other confidential data and information. The Employee
expressly agrees to refrain from disclosing to any person or entity, other than
at the direction and approval of the Board of Directors of the Corporation, any
confidential information regarding RETICULOSE AND/OR PRODUCT R, and any and all
additional products developed during the period of the Employer's employment,
either directly or indirectly, or to seek to exploit RETICULOSE AND/OR PRODUCT
R, and any and all additional products developed during the
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period of the Employee's employment, other than through and with the approval of
the Board of Directors of the Corporation, for a period of ten years.
(d) (i) It is agreed and understood by and among the parties
to this Agreement that the restrictive covenants and agreements set forth in
subsections 7(a), 7(b) and 7(c) are each individually essential elements of this
Agreement and that, but for agreement of the Employee to comply with such
covenants and agreements, the Corporation would not have agreed to employ the
Employee. Further, the Employee expressly acknowledges that the restrictions
contained in subsections 7(c), 7(b) and 7(c) are reasonable and necessary to
accomplish the mutual objectives of the parties associated with the employment
relationship and to protect the Corporation's legitimate interests and
protecting its business and business relationships. The Employee further
acknowledges that enforcement of the restrictions contained herein will not
deprive him, or any of his agents, servants or employees, or any of them, of the
ability to earn a reasonable living and that any violation of the restrictions
contained in this Agreement will cause irreparable injury to Corporation. Such
covenants and agreements of the Employee shall be construed as agreements
independent of any other provision of this Agreement and of each other. The
existence of any claim or cause of action of the Employee against the
Corporation, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Corporation of such restrictive
covenants and agreements.
(ii) It is agreed by the parties hereto that if any portion of
the restrictive covenants and agreements set forth in subsubsections 7(a), 7(b)
and 7(c) are held to be invalid, unreasonable, arbitrary or against public
policy, then each such agreement shall be considered divisible both as to time,
geographical area and any other relevant feature, with each month of a specified
period being deemed a separate period of time and each geographical market area
being deemed a separate
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geographical area, it being the intention of the parties that a lesser period of
time, geographical area or other relevant feature shall be enforced as long as
the same is not unreasonable, arbitrary or against public policy. The parties
hereto further agree that, in the event any court of competent jurisdiction
determines that a specified time period, a specified geographical area or any
other relevant feature is unreasonable, arbitrary or against public policy, a
lesser time period, geographical area or other relevant feature which is
determined to be reasonable, non-arbitrary and not against public policy may be
enforced against the Employee, and the Employee agrees to be bound thereby.
(iii) The parties hereto agree that damages at law,
including but not limited to monetary damages, will be insufficient remedy to
the Corporation in the event that the restrictive covenants of subsubsections
7(a), 7(b) and 7(c) are violated and that, in addition to any remedies or rights
that may be available to the Corporation, all of which other remedies or rights
shall be deemed to be cumulative, retained by Corporation and not waived by the
enforcement of any remedy available hereunder, including but not limited to the
right to xxx of monetary damages; Corporation also shall be entitled, upon
application to a court of competent jurisdiction, to seek injunctive relief,
including but not limited to a temporary restraining order or temporary,
preliminary or permanent injunction, to enforce the provisions of this Section 7
as well as an equitable accounting of all profits or benefits arising out of any
such violation, all of which shall constitute rights and remedies to which the
Corporation may be entitled.
(e) The Employee recognizes that the restrictions set forth in
this Section 7 are reasonable and properly required for the adequate protection
of the business of the Corporation
8.Survival of Representations and Warranties. The warranties,
representations, covenants and agreements set forth herein shall be continuous
and shall survive the termination of this Agreement or any part hereof.
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9.Entire Agreement: This Agreement contains the entire understanding
between the parties hereto with respect to the transactions contemplated hereby,
and this Agreement supersedes in all respects all written or oral understandings
and agreements heretofore existing between the parties hereto.
10.Amendment and Waiver: This Agreement may not be modified or amended
except by an instrument on writing duly executed by the parties hereto. No
waiver of compliance with any provision or condition hereof and no consent
provided for herein shall be effective unless evidenced by an instrument in
writing duly executed by the party hereto sought to be charged with such waiver
or consent.
11.Notices: Notices and requests required or permitted hereunder shall
be deemed to be delivered hereunder if mailed with postage prepaid or delivered,
in writing to the addresses set forth above or to such other address as the
respective parties shall designate in writing.
12.Counterparts: This Agreement may be executed in one or more
counterparts, and all such counterparts shall constitute one and the same
instrument.
13.Captions: Captions used herein are for convenience only and are not
a part of this Agreement and shall not be used in construing it.
14.Execution of Documents: At any time and from time to time, the
parties hereto shall execute such documents as are necessary to effect this
Agreement.
15.Arbitration: Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, or regarding the failure or refusal to
perform the whole or any part of this Agreement shall be settled by arbitration
in New York City. Any such arbitration shall be held in accordance with the
rules of the American Arbitration Association, and the judgment upon the award
rendered may be entered in any court having jurisdiction hereof. Any decision
made by an arbitrator or by the
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arbitrators under this provision shall be enforceable as a final and binding
decision as if it were a final decision or decree of a court of competent
jurisdiction.
16.General Provisions:
(a) Assignability. This Agreement shall not be assignable by
any of the parties to this Agreement without the prior written consent of all
other parties to this Agreement.
(b) Governing Law. This Agreement has been negotiated and
prepared and shall be performed in the State of New York, and the validity,
construction and enforcement of, and the remedies under, this Agreement shall be
governed in accordance with the laws of the State of New York.
(c) Severability of Provisions. The invalidity or
unenforceability of any particular provision hereof shall not affect the
remaining provisions of this Agreement, and this Agreement shall be construed in
all respect as if such invalid or unenforceable provision were omitted.
(d) Successors and Assigns. The rights and obligations of the
parties hereunder shall inure to the benefit of, and be binding and enforceable
upon the respective heirs, successors, assigns and transferees of either party.
(e) Reliance. All representations and warranties contained
herein, or any certificate or other instrument delivered in connection herewith,
shall be deemed to have been relied upon by the parties hereto, notwithstanding
any independent investigation made by or on behalf of such parties.
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IN WITNESS WHEREOF, the undersigned have hereunto caused this Agreement
to be executed the day and year first above written.
ADVANCED VIRAL RESEARCH CORP.
By: /s/ Xxxxxx Xxxxxxxxx
------------------------
Xxxxxx Xxxxxxxxx,
President and Chief Executive Officer
EMPLOYEE
/s/ Xxxxx Xxxxxxxxx
-------------------
Xxxx Xxxxxxxxx
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EXHIBIT A-1
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Corporate Performance Goals
---------------------------
The corporate objectives, the attainment of which 50% of the
discretionary bonus payable to the Employee will depend, include the following:
1. Approval of one or more IND's by the United States Food and Drug
Administration;
2. Increased values for shareholders reflected by long term stock price
appreciation;
3. Attainment of listing on NASDAQ SmallCap Market and, subsequently, on
the NASDAQ National Market;
4. The execution of material license agreements with attendant royalty
streams payable to the Corporation;
5. Successful completion of corporate finance transactions resulting in
the infusion of equity, quasi equity and/or long term debt into the
Corporation (not including so called "death spiral" transactions);
6. Joint venture transactions with major pharmaceutical companies;
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EXHIBIT A-2
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Individual Performance Goals1
-----------------------------
The individual objectives, the attainment of which 50% of the
discretionary bonus payable to the Employee will depend, include the following:
1. Establish and maintain policies for effective investor communications;
2. Establish and maintain financial controls, reporting systems and
accounting policies and provide timely and accurate operating
information to management and regulatory agencies;
3. Move the accounting, legal and financial reporting functions to New
York headquarters;
4. Prepare budgets for the Company;
5. Establish and maintain an approval process for growth and development
plans;
6. Analyze results of operations versus budget and prior year results of
operations;
7. Make recommendations to the CEO and Board of Directors with respect to
operating efficiencies;
8. Develop and supervise staff;
9. Develop and maintain a corporate culture and mission statement;
10. Develop and maintain investor communications procedures;
11. Develop and maintain employee benefit plans, including a 401(k) plan;
12. Discuss, develop and maintain a business plan strategy for the Company;
13. Develop and maintain corporate governance policies to expand the
breadth of the Board of Directors and Advisory Boards;
14. Develop and maintain risk management policies for the Company;
15. Develop intangible property policies for the Company;
16. Maintain an ongoing relationship between the Company and NASDAQ and
market makers;
17. Develop a strategy to move the Company from OTC Bulletin Board to
NASDAQ SmallCap listing.
-------------------------
1 With the exception of Number 3, each of the items will be addressed
each year, except that it is intended that, once established, most of the
policies will not require significant modifications on a year by year basis.
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EXHIBIT B
---------
National and regional organizations and licenses relating to the
Employee's status as a certified public accountant.
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