EXHIBIT 10.4
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement") entered into this 26th day of
October, 2004, Supercedes the Executive Employment Agreement entered into on the
20th day of March, 2004 by and between Union Dental Corp. (the "Company") a
Florida corporation whose principal place of business is 0000 Xxxxxxxxxx Xxxxx,
Xxxxx 000, Xxxxx Xxxxxxx, Xxxxxxx 00000, and Xx. Xxxxxxx X. Xxxxxxxxx, whose
address is located at 0000 Xx. Xxxxx Xxxxx, Xxxxx 000-X, Xxxxxxxxxx, XX 00000
(the "Executive").
W I T N E S S E T H:
WHEREAS, the Company has offered the Executive the position as Member of
the Board of Directors and Chief Operating Officer ("C.O.O." of which the salary
for that position to commence upon the completion of $3.0 million in equity
funding) of the Company and the Executive possesses knowledge and experience
which are valuable to the company; and
WHEREAS, the principal business of the Company is a dental practice
referred to as Xxxxxx X. Xxxxx D.D.S., P.A. (hereinafter referred to as "Green")
and a second business, Direct Dental Services, Inc. ("DDS") which encompasses
the sales and marketing of an exclusive Dental Network for the Communications
Workers of America union ("CWA") and the International Brotherhood of Electrical
Workers union ("IBEW") in eighteen (18) states with the intent of expanding the
concept throughout the United States and into other unions, such as General
Electric and the United Auto Workers.
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and accepted, the
parties hereto agree as follows:
1. Employment. The Company hereby offers to employ Executive, and Executive
accepts such employment, upon the terms and conditions hereinafter set forth.
2. Employment Term. The "Initial Term" means the basic term of this
Agreement, which commences for the position of Member of the Board of Directors
upon the signing of this Agreement, and, for the position as C.O.O. to commence
upon the date of the completion of a funding of US$ 3.0 million (gross proceeds)
in the form of equity participation by investors, or convertible debt (which
will become the "Effective Date" for the C.O.O. position) and ends on the second
anniversary from that date of this Agreement. Thereafter, Executive's employment
hereunder shall be renewed for successive periods of one (1) year (each a
"Renewal Term"), by the sole authority of the Company President, unless either
party hereto shall give written notice to the other that Executive's employment
hereunder shall not be renewed or continued, as the case may be, not less than
ninety (90) days prior to the end of the then current term of employment. The
Initial Term and any Renewal Term may be terminated pursuant to Section 7
hereof.
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3. Office: Duties of Executive. During the term of the Executive's
employment, the Executive shall serve as a member of the Board of Directors and,
additionally, upon the completion of $3.0 million in equity funding in the
position of Chief Operating Officer and, in so doing, shall perform normal
duties and responsibilities associated with such position, including, without
limitation, working for the President, Chief Executive Officer and the Board of
Directors to develop the Company's growth plan and strategic alternatives,
developing financing sources, evaluating the Company's capital structure and
recommending any appropriate changes, serving as liaison with and otherwise
managing the Company and its relationship with members of the Dental Network,
and carrying out such other or different duties as may be assigned him by the
Company's President, Chief Executive Officer or the Board of Directors. During
the term of this Agreement, Executive shall devote so much of his business time
and attention to the business and affairs of the Company as he, in his sole
discretion, deems appropriate, subject to the general direction, approval and
control of the Board of Directors.
4. Compensation. Except as otherwise provided in this Agreement, the
Company shall compensate Executive in the manner set forth in this Section 4
payable in accordance with the normal payroll practices of the Company for the
duration of the term of this Agreement ("Employment Term").
4.1 Base Salary. For each year during the Employment Term for the
position as a Member of the Board of Directors (or, if this Agreement shall
be earlier terminated in accordance the terms of Section 7 hereof, ending
on the date of termination of this Agreement) the Executive will be
compensated as outlined in Exhibit A attached hereto and made a part
hereof. After the completion of equity funding of US$ 3.0 million, the
Company will pay to Executive for his position as C.O.O. an aggregate
annual salary equal to the base salary listed on Exhibit A attached hereto
and made a part hereof. The base salary will be paid in accordance with the
normal payroll procedures of the Company
4.2 Incentive Bonuses. With the approval of the Board of Directors,
the Company may pay additional increases in the base compensation and may
pay incentive bonuses to Executive.
4.2(a) At the signing of this Agreement, Executive, for his position
as a Member of the Board of Directors, for a term of two years, and for
bonuses tied to the performance of the Company, shall receive 156,250
options (this number being based upon a formula of .625% of the issued and
outstanding shares of stock in the Company currently estimated to be
25,000,000 shares) with an exercise price of $ _________ (a 10% discount
from the first quote of the shares as obtained from the National Quotation
Bureau "NQB") exercisable within five (5) years of the date first mentioned
in this Agreement. Executive will be responsible for any tax liability to
the Internal Revenue Service or Florida Tax Authority which may be incurred
by using a price that is a discount from the Fair Market Value or bid price
of the shares of stock as quoted on a stock exchange. One Third (33.33%) of
these shares shall be "vested" immediately and the second 1/3 (33.33%)
shall be vested when the Company meets $3.0 million in revenues, and the
balance of 1/3 (33.34%) of the options shall be deemed "vested" when the
Company meets $4.0 million in revenues. The term "vested" shall mean the
shares of stock underlying the options agreement shall be registered by the
Company at the first available opportunity.
4.3 Vacation. Executive shall be entitled to a total of two (2) weeks
of paid vacation per calendar year.
4.4 Other Benefits. Executive shall receive other employment benefits
which are similar to compensation packages comparable to executives of
other companies in similar industries. Benefits for Executive will commence
upon the completion of an equity funding of the Company in the amount of
US$ 3.0 million in gross proceeds and are listed as follows:
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4.4(a) Executive shall receive days off on regular holidays that
are available to similarly situated employees of the Company and that
are at least equivalent to such benefits currently being received by
Executive.
5. Business-Related Expenses.Upon presentation, in accordance with Company
policies, of itemized accounts of his expenditures related to his performance as
a member of the Board of Directors, or, in a capacity as C.O.O., the Company
promptly shall reimburse Executive for all reasonable and necessary travel
expenses and other expenses incurred by Executive on behalf of the Company in
the performance of his duties under this Agreement.
5.1 Executive, when traveling by air, shall travel in Coach Class.
5.2 Executive shall be allowed to stay at hotels rated three (3)
stars.
5.3 Executive shall be allowed to rent a mid size car of his choosing
to fit the needs of the travel plans associated with his duties as an
Executive while on business trips.
5.4 Executive shall be allowed to dine at restaurants, as the need
arises, at his discretion, in order to properly entertain business
associates.
6. Covenants.
6.1 Proprietary Information. In performance of services under this
Agreement, Executive may have access to:
6.1(a) information which derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use, and is the subject of
efforts that are reasonable under the circumstance to maintain its
secrecy (hereinafter "Trade Secrets" or "Trade Secret"); and
6.1(b) information which does not rise to the level of Trade
Secret but is valuable to the Company and provided in confidence to
Executive (hereinafter "Confidential Information"). Executive
acknowledges and agrees with respect to Trade Secrets and Confidential
Information provided to or obtained by Executive (hereinafter
collectively the "Proprietary Information"):
6.1(b) (i) the Proprietary Information is and shall remain
the exclusive property of the Company; and
6.1(b) (ii) to use the Proprietary Information exclusively
for the purpose of fulfilling the obligations of this Agreement;
and
6.1(b) (iii) to return the Proprietary Information, and any
copies thereof, in his possession or under his control, to the
Company upon request of the Company, or expiration or termination
of this Agreement for any reason; and
6.1(b) (iv) to hold the Proprietary Information in
confidence and not copy, publish or disclose to others or allow
any other party to copy, publish or disclose to others in any
form, any Proprietary Information without the prior written
approval of an authorized representative of the Board of
Directors.
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The obligations and restrictions set forth in this Section 6.1 shall
survive the expiration or termination of this Agreement, for any reason,
and shall remain in full force and effect as follows:
6.1(b) (v) as to Trade Secrets, indefinitely, and
6.1(b) (vi) as to Confidential Information, for a period of
two (2) years after the expiration or termination of this
Agreement for any reason.
The confidentiality, property, and proprietary rights protections
available in this Agreement are in addition to, and not exclusive of, any
and all other corporate rights, including those provided under copyright,
corporate officer or director fiduciary duties, and trade secret and
confidential information laws. The obligations set forth in this Section
6.1 shall not apply or shall terminate with respect to any particular
portion of the Proprietary Information which (i) was in Executive's
possession, free of any obligation of confidence, prior to his receipt from
the Company, (ii) Executive establishes the Proprietary Information is
already in the public domain at the time the Company communicates it to the
Executive, or become available to the public through no breach of this
Agreement by Executive, or (iii) Executive establishes that the Proprietary
Information was received by Executive independently and in good faith from
a third party lawfully in possession thereof and has no obligation to keep
such information confidential.
6.2 Ownership of Property. Executive agrees and acknowledges that all
works of authorship and inventions, including but not limited to products,
goods, know-how, Trade Secrets and Confidential Information, and any
revisions thereof, in any form and in whatever stage of creation or
development, arising out of or resulting from, or in connection with, the
services provided by Executive to the Company under this Agreement
(collectively the "Property") are works made for hire and shall be the sole
and exclusive property of the Company. Executive agrees to execute such
documents as the Company may reasonably request for the purpose of
effectuating the rights of the Company herein.
6.3 Warranty and Absence of Conflict. Executive warrants to the
Company that Executive is not under any other contract or agreement that
precludes Executive from remaining as an employee of the Company or
performing services as provided in this Agreement.
6.4 Non-Solicitation.Executive covenants and agrees that during his
employment with the Company, and for a period of one (1) year following the
date that his employment is terminated for any reason whatsoever, he will
not on behalf of any person, firm, corporation or entity solicit or accept
business from customers of the Company, including actively-sought
prospective customers, with whom he had material contact during the course
of his employment with the Company during the two (2) year period prior to
Executive's termination of employment for the purpose of providing or
selling products or services that are competitive with those provided by
Company in connection with the Business.
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6.5 Non Competition. Executive covenants and agrees that during his
employment with the Company and for a period of one (1) year following the
date that his employment is terminated for any reason whatsoever, he will
not, within the Business Area (defined below), directly or indirectly, on
his own behalf or in the service or on behalf of others, engage in any
business which is the same or essentially the same as the business of the
Company (the "Business"), as a manager, supervisor, administrator, owner,
salesman, or in another capacity which involves duties, and
responsibilities similar in any way to those undertaken for the Company
herein.
6.6 Certain Definitions and Exclusions.
6.6(a) "Business Area" means the geographic areas located within
the eighteen (18) state dental networks under contract, operated and
maintained by the Company.
6.6(b) The Company and Executive specifically acknowledge that
Executive shall not be prohibited from entering into any transaction
pursuant to which Executive (a) obtains voting or management control
of an institution which either engages in the business of discount
dental services or funds or invests in companies or businesses engaged
in the business of discount dental services or funds or invests in
companies or businesses engaged in the business of discount dental
services or (b) invests in or obtains voting or management control of
any entity which discounts dental services as an ancillary activity to
such entity's normal business activities as long as these business
activities are not engaged in marketing or selling of dental services
or creating dental networks for unions.
6.7 Non-Interference.Executive covenants and agrees that during his
employment with the Company and for a period of two (2) years following the
date that his employment agreement is terminated for any reason whatsoever,
he will not, directly or indirectly, on his own behalf or in the service or
on behalf of others, call upon, solicit, recruit, or hire away or assist
others in calling upon, soliciting, recruiting or hiring away, any person
who is or was, during the two (2) year period prior to Executive's
termination of employment, an employee of the Company or of any Member of
the Company in any attempt to have such person work in any other firm,
association, corporation or entity engaged in a business substantially
similar to the Business.
6.8 Injunctive Relief. Executive acknowledges and agrees that the
remedy at law for any such breach of this Section 6 will be inadequate and
that in the event of such breach the Company will suffer irreparable
damage; accordingly, the Company shall be entitled to temporary and
permanent injunctive relief in the event of breach without the necessity of
proving monetary damages.
6.9 Indemnification Defense. Executive shall indemnify the Company
from and against any and all actions, suits, proceedings, liabilities,
damages, losses, costs and expenses (including attorneys' and experts'
fees) arising out of or in connection with any breach or threatened breach
by the Executive of any one or more provisions of this Agreement. The
existence of any claim, demand, action or cause of action of the Executive
against the Company shall not constitute a defense to the enforcement by
the Company of any of the covenants or agreements herein.
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7. Termination.
7.1 General. This Agreement may be terminated prior to the expiration
of the Initial Term or any Renewal Term by any of the following events:
7.1(a) mutual written agreement expressed in a single document
signed by both the Company and Executive;
7.1(b) voluntary written resignation by Executive other than for
Good Reason;
7.1(c) death of Executive;
7.1(d) disability of Executive;
7.1(e) termination by the Company for any reason other than Cause
(as defined below); or
7.1(f) termination by the Company for one of the following
reasons ("Cause"): (i) an act by Executive of fraud or
misappropriation; (ii) Executive's willful breach of any agreement or
covenant of this Agreement; (iii) criminal conduct of Executive which
results in a felony conviction of Executive with respect to which all
opportunities for appeal have been expired; or (iv) Executive's
recurring gross negligence or continuing willful failure of Executive
to perform his duties under this Agreement if such failure is not
cured within ten (10) days after notice from the Company thereof.
7.2 Compensation Through Date of Termination. Upon termination for any
of the foregoing reasons, Executive shall continue to render his services
and shall be paid his regular compensation and benefits up to the date of
termination. Severance payment hereunder is in addition to the regular
compensation and benefits which Executive shall receive up to the date of
termination.
7.3 Severance and Liquidated Damages. If this Agreement is terminated
by the Company pursuant to Section 7.1(e), the Company shall pay to the
Executive a severance and liquidated damages payment equal to Executive's
then base salary under Section 4.1 through the end of the Initial Term or
the Renewal Term then in effect, as the case may be, pursuant to the normal
payroll practices of the Company. Otherwise, the Company shall have no
obligation to pay Executive any form of severance or other payment upon
termination or expiration of this Agreement by the Company or the
Executive. Expiration of the Initial Term of this Agreement shall not be
deemed a termination pursuant to Section 7.1(e). Executive agrees that such
payment shall not constitute liquidated damages for any alleged or actual
breach by the Company under this Agreement or the Company's Operating
Agreement and agrees that, upon receipt of such severance liquidated
damages payment, he shall release the Company and all other persons from
any and all claims arising out of alleged or actual breaches of this
Agreement or the Operating Agreement.
7.4 Confidentiality of Cause Notice. Executive agrees that in the
event he receives written notice of termination with cause, Executive shall
treat the contents of said notice as privileged and Executive shall have no
action against the Company or any of its officers, agents, or employees due
to the contents of said notice unless the contents are intentionally false
and malicious.
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8. Miscellaneous.
8.1 Severability. In the event that any provision or portion thereof
of this Agreement is declared invalid, void or unenforceable by a court of
competent jurisdiction, the remaining provisions or portions thereof shall
nevertheless continue in full force and effect without being impaired or
invalidated in any way or to any extent.
8.2 Waiver of Breach.Failure or delay of either party to insist upon
compliance with any provision hereof shall not operate as, and is not to be
construed as, a waiver or amendment of such provision. Any express waiver
of any provision of this Agreement shall not operate and is not to be
construed as a waiver of any subsequent breach, whether occurring under
similar or dissimilar circumstances.
8.3 Notice. All notices and other communications required or permitted
to be given by this Agreement shall be in writing and shall be given and
shall be deemed received if and when either hand delivered and a signed
receipt is given therefore or mailed by registered or certified United
States mail, postage-prepaid, and if to the Company, to:
Union Dental Corp.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxx Xxxxxxx, XX 00000
Or, if to Executive, to:
Xx. Xxxxxxx X. Xxxxxxxxx
0000 Xx. Xxxxx Xxxxx
Xxxxx 000-X
Xxxxxxxxxx, XX 00000
Or at such other address as either party hereto shall notify the other of in
writing.
8.4 Entire Agreement.This Agreement supersedes any and all prior
agreements between the parties hereto, and constitutes the entire agreement
and understanding by and between Executive and the Company with respect to
the Employment of Executive and no representations, promises, agreements or
understandings, written or oral relating to the employment of Executive by
the Company not contained or referenced herein shall be of any force or
effect.
8.5 Amendment. This Agreement may be amended at any time by mutual
consent of the parties hereto, with any such amendment to be invalid unless
in writing and signed by the Company and Executive.
8.6 Benefit.This Agreement, together with any amendments hereto, shall
be binding upon and shall inure to the benefit of the parties hereto and
their respective successors, assigns, heirs and personal representatives,
except that the rights and benefits of either of the parties under this
Agreement may not be assigned without the prior written consent of the
other party.
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8.7 Withholding. Any payments provided for herein shall be reduced by
any amounts required to be withheld by the Company from time to time under
applicable federal, state or local income or employment tax laws or similar
statutes or other provisions of law then in effect.
8.8 Arbitration. In the event of any dispute between the parties, such
dispute shall be resolved by arbitration in accordance with the rules of
the American Arbitration Association, with costs and reasonable attorney
fees to be assessed against the non-prevailing party.
8.9 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original but both of which together shall
constitute one and the same Agreement.
8.10 Governing Law. This Agreement is being made in the State of
Florida and shall be construed and enforced in accordance with the laws of
that state.
8.11 Disclaimer. In the event the Company completes a merger with
another company by other means than from introductions by Tropical Medical
Services or xx Xxxxxx & Associates; receives debt or equity financing in
the amount of $3.0 million by other means than from introductions by
Tropical Medical Services or xx Xxxxxx & Associates, then this Agreement
and all of its Exhibits shall become null and void.
IN WITNESS WHEREOF, the parties have placed their seal, executed and
delivered this Agreement as of the date first written above.
MEMBER UNION DENTAL CORP.
/s/ Xx. Xxxxxxx X. Xxxxxxxxx /s/ Xx. Xxxxxx X. Xxxxx
---------------------------- ------------------------------
Xx. Xxxxxxx X. Xxxxxxxxx Xx. Xxxxxx X. Xxxxx, President
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EXHIBIT A
The remuneration for participation in meetings as a Member of the Board of
Directors shall commence immediately upon the signing of the Agreement and the
Base Salary outlined in Exhibit A of this Agreement will commence upon the
Company completing an equity funding of US$ 3.0 million, which may be done
separately, in whole or in part in different and/or separate offerings.
Remuneration as a member of the Board of Directors: $500.00 per meeting
Base Salary for the position as Chief Operating Officer and after $3.0
million in equity funding: $60,000.00
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