EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of
January 29, 2009
BETWEEN:
SKINVISIBLE PHARMACEUTICALS,
INC.
0000 X. Xxxxxxxx Xx., Xxxxx
00
Xxx Xxxxx, Xxxxxx 00000
(The “Corporation”)
OF THE FIRST PART
AND
XXXXX XXXXXXX
000 Xxxxxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxx 00000
(The “Employee”, “Him”, “His”,
“He”)
OF THE SECOND PART
WHEREAS:
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A.
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The
Company and the Employee (“Parties”) have agreed to enter into this
Agreement (“Agreement”) relating to the employment of the Employee by the
Company.
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B.
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The
Employee has agreed to provide such services as an Employee upon the terms
and conditions hereinafter set
forth.
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NOW THIS AGREEMENT WITNESSES
that in consideration of the mutual promises, covenants and agreements
herein contained, the Parties hereto agree as follows:
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1.
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Engagement of
Employee
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1.1
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The
Corporation hereby engages the Employee as President & CEO of the
Corporation and the Employee hereby accepts such
employment.
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1.2
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The
Employee shall perform all such acts and do all such things as and when
the same may be necessary to properly and efficiently carry out the duties
of President & CEO of the Corporation which duties shall include but
shall not be limited to:
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i.
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advising
the Board of Directors on business development issues, opportunities and
direction;
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ii.
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exercising
general direction and supervision over all activities of the
Corporation;
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iii.
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generally
at all times abiding by all lawful directions given Him by the Board of
Directors of the Corporation.
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1.3
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The
Employee shall at all times use His best effort to advance the interests
of the Corporation, and shall faithfully, industriously, and to the best
of His abilities; act as an Employee of the Corporation in accordance with
the terms and conditions of this
Agreement.
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1.4
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The
Employee warrants and represents to the Corporation that He is not party
to any agreement or subject to any court order, which would prevent the
Employee from providing the
services.
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2.
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Remuneration
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2.1
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Salary.
The Company shall pay the Employee a gross salary (before standard
deductions) of $160,000 per year (the “Salary”) in consideration of the
duties performed by the Employee. The Company shall make all payments in
respect of the Salary to the Employee in equal installments on a
bi-monthly basis commencing on the first payroll date of the Company after
the date hereof. The Employee’s Salary shall be reviewed on an
annual basis in each year of this Agreement during the term of this
Agreement beginning January 1,
2010.
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2.2
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Bonus. The
Employee will be eligible to receive a company incentive bonus (“Bonus”)
for the following:
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i.
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For
any product or technology license fee, the Employee will receive 1% on any
amounts less than or equal to $1 million and ½ % on any balance
and;
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ii.
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If
no license fee is paid, the Employee will receive 1% of royalty fees
and;
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iii.
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The
Employee will receive 1% of all financing and loans generated for the
Company not exceeding 50% of his Salary
and;
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iv.
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If
the Company is acquired (“Change of Control”), as defined in Section 4.5,
the Employee shall receive a bonus of 1% of the acquisition price of the
Company;
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v.
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All
Bonuses will be paid within 15
days of receipt of payment (“Payment Date”)
and;
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vi.
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The
Employee has the option to convert the Bonus to common shares, free from
any restrictions, equivalent to the average closing share price on the 5
(five) days preceding the Payment Date less a discount of 10%
and;
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vii.
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The
Bonus described in Section 2.2 will cease upon termination of this
agreement.
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2.3
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Benefit
Programs. The Employee will receive such benefits and awards,
including without limitation stock options and restricted share awards, as
the Board shall determine and will be eligible to participate in all
Employee benefit plans and programs of the Company from time to time in
effect for the benefit of senior executives of the
Company.
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2
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2.4
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Expenses. The
Company shall reimburse the Employee for reasonable travelling and other
expenses actually and properly incurred by the Employee in carrying out
His duties hereunder, provided that proper receipts, invoices or vouchers
supplied to the Company, support such expenses. The Company
will provide the Employee with an automobile to be leased and the Company
will reimburse the Employee for reasonable automobile expenses. The
company shall also reimburse the Employee for living expenses not to
exceed $2,000 per month.
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2.5
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Vacation. The
Employee agrees to perform His duties on a continuous and full-time basis,
provided that the Employee shall be entitled on reasonable prior written
notice to 4 (four) weeks annual vacation during each year of the term of
this Agreement. In the event the Employee is not able to take the vacation
as earned He may elect to receive the vacation time in pay or extend to
the next year.
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3.
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Term of
Employment
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3.1
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The
Company agrees to continue to employ the Employee, and the Employee agrees
to remain in the employment of the Company, in accordance with the terms
and provisions of this Agreement, for the period set forth below
(“Employment Period”).
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3.2
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The
Employment period under this Agreement shall commence as of January 1,
2009 and, subject only to the provisions of Section 4, below relating to
termination of employment, shall continue until (i) close of business
December 31st, 2012 or (ii) such later date as shall result from the
operation of subparagraph (3.3) below (“Terminal
Date”).
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3.3
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Commencing
on January 1, 2009 and on the first business day of each month thereafter
(such date and each such first business day, “Renewal Date”) the Terminal
Date set forth in subparagraph (3.2) above shall be extended so as to
occur thirty six (36) months from the Renewal Date unless either the
Company or the Employee shall have given written notice to the other Party
on or before such Renewal Date that the Terminal Date is not to be
extended.
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3.4
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The
Company agrees that during the term of employment it will not transfer the
employee to any other location further than 50 miles from the existing
location. Any such relocation would be a Company breach of this Agreement
and the Company would be liable to pay the Employment Agreement in full as
if the Employee had worked until the expiration
date.
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4.
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Termination of
Employment.
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4.1
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Resignation. The
Employee may terminate His employment at any time and for any reason by
giving the Company a written notice of termination to that effect at least
60 days before the date of termination. Employee shall be
entitled to receive (i) His base salary pursuant to Section 2 and any
other compensation and benefits to the extent actually earned by the
Employee pursuant to this Agreement or any benefit plan or program of the
Company as of the date of such termination at the normal time for payment
of such salary, compensation or benefits, and (ii) any reimbursement
amounts owing under Section 2.4.
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3
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4.2
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Termination
by the Company Other Than For Cause. The Company may terminate
the Employee’s employment at any time and for any reason by giving Him
written notice of termination to that effect at least 90 days before the
date of termination. In the event the Company terminates the Employee’s
employment for any reason other than for Cause, the Employee shall be
entitled to the benefits described in Section
4.6.
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4.3
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Termination
for Cause. The Company may terminate the Employee’s employment
for Cause if, (i) the Employee willfully, substantially and continually
fails to perform the duties for which He is employed by the Company, (ii)
the Employee willfully fails to comply with the reasonable instructions of
the Board of Directors, (iii) the Employee willfully engages in conduct
which is or would reasonably be expected to be materially and demonstrably
injurious to the Company, (iv) the Employee willfully engages in the act
of acts of dishonesty resulting in material personal gain to the Employee
at the expense of the Company, (v) the Employee is convicted of a felony,
(vi) the Employee engages in an act or acts of gross malfeasance in
connection with His employment hereunder, or (vii) the Employee commits a
material breach of the confidentiality provision set forth in Section 6,
The Company shall exercise its right to terminate the Employee’s
employment for Cause by giving Him written notice of termination
specifying in reasonable detail the circumstances constituting such
Cause. In the event of such termination of the Employee’s
employment for Cause, the Employee shall be entitled to receive (i) His
base salary pursuant to Section 2 and other compensation and benefits to
the extent actually earned pursuant to this Agreement of any benefit plan
or program of the Company as of the date of such termination at the normal
time for payment of such salary, compensation or benefits and (ii) any
amounts owed under the reimbursement policy of Section
2.4.
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4.4
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Termination
for Good Reason. The Employee may terminate His employment for
Good Reason by giving the Company a written notice of termination at least
60 days before the date of such termination specifying in reasonable
detail the circumstances constituting such Good Reason within 3 months
after the occurrence of such event. In the event of the
Employee’s termination of His employment for Good Reason, the Employee
shall be entitled to the Severance defined in Section 4.6. For
purposes of this Agreement, Good Reason shall mean: (i) a significant
reduction in the scope of the Employee’s authority, functions, duties or
responsibilities from that which is contemplated by the Agreement, (ii)
the Employee being required to report directly to someone other than the
Board of Directors, (iii) the relocation of the Employee’s office location
to a location more than 50 miles away from the Employee’s principal place
of employment on Oct. 1st,
2008, (iv) any reduction in the Employee’s base salary, or (v) a
significant reduction in the Employee benefits provided to the Employee
other than in connection with an across-the-Board reduction similarly
affecting substantially all senior executives of the
Company.
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4
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4.5
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Termination
Due to Change of Control. In the event of a change of control of the
Company, as set forth below, the Employee may at any time during a 12
month period following a change of control, elect to terminate His
employment with the Company and the Employee shall be entitled to the
Severance defined in Section 4.6. A “Change of Control” of the
Company shall be deemed to have occurred in (a) any person or persons
acting together which would constitute a “group” for purposes of Section
13 (d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), (other than the Company, any subsidiary of the Company, shall
beneficially own (as defined in Rule 13d-3 of the Exchange Act), directly
or indirectly, at least 51% of the total voting power of capital stock of
the Company entitled to vote generally in the election of the Board and
such voting power exceeds the then current voting power; (b) the
shareholders of the Company approve (i) a plan of complete liquidation of
the Company or (ii) an Agreement providing for the merger or consolidation
of the Company other than a merger or consolidation in which the holders
of the common stock of the Company immediately prior to the consolidation
or merger have, directly or indirectly, at least a majority of the common
stock of the continuing or surviving corporation immediately after such
consolidation or merger or (d) the shareholders of the Company approve an
Agreement (or Agreements) providing for the sale or other disposition (in
one transaction or a series of transactions) of all or substantially all
of the assets of the Company.
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4.6
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Severance. If,
following Termination by the Company Other Than For Cause, or where a
Change of Control has occurred and the Employee elects to terminate His
employment during the 12 months following a Change in Control, the
Employee shall be entitled to the following
(“Severance”):
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i.
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The
Company shall pay to the Employee His base salary pursuant to Section 2
and any other compensation and benefits to the extent actually earned by
the Employee under the Agreement or any benefit plan or program of the
Company as of the date of such termination at the normal time for payment
of such salary, compensation or
benefits.
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ii.
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The
Company shall pay the Employee any reimbursement amounts owing under
Section 2.4.
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iii.
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The
Company shall pay to the Employee as a severance benefit an amount equal
to two (2) times the sum of (i) His annual rate of base salary immediately
preceding His termination of employment, and (ii) the average of His three
highest annual Bonuses earned for any of the three calendar years
preceding His termination of employment (or, as the Bonus Plan is less
than 3 years old, the average of such Bonuses for all of the calendar
years for which the Employee was eligible), with any deferred Bonuses
counting for the year earned rather than the year paid. Such
severance benefit shall be paid in a lump sum within 45 days after the
date of such termination of
employment.
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5
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iv.
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The
Employee’s total outstanding and unvested stock and/or options shall at
the date of termination be deemed 100%
vested.
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5.
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Entitlement to Other
Benefits. Except as otherwise provided in the Agreement,
this Agreement shall not be construed as limiting in any way any rights or
benefits that the Employee or His spouse, dependents or beneficiaries may
have pursuant to any other plan or program of the
Company.
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6.
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Confidential
Information. The Employee hereby acknowledges that He
has signed an Employee Confidentiality Agreement, and is bound by that
Agreement.
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7.
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Indemnification. The
Company shall indemnify and hold the Employee harmless to the fullest
extent legally permissible under the laws of the State of Nevada, against
any and all expenses, liabilities and losses (including attorney’s fees,
judgments, fines and amounts paid in settlement) reasonably incurred or
suffered by Him by reason of any claim or cause of action asserted against
the Employee because of His service at any time as a Employee of the
Company. The Company shall advance to the Employee the amount
of His expenses incurred in connection with any proceeding relating to
such service to the fullest extent legally permissible under the laws of
the State of Nevada. Notwithstanding the foregoing, the Company’s
obligations pursuant to this Section 7 shall not apply in the case of any
claim or cause of action by or in the right of the Company or any
subsidiary thereof.
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8.
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No Duty to Seek
Employment. The Employee shall not be under any duty or
obligation to seek or accept other employment following termination of
employment, and no amount, payment or benefits due to the Employee
hereunder shall be reduced or suspended if the Employee accepts subsequent
employment.
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9.
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Deductions and
Withholding. All amounts payable or which become payable
under any provision of the Agreement shall be subject to any deductions
authorized by the Employee and any deductions and withholdings required by
law.
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10.
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Governing
Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Nevada which shall be deemed to
be the proper law hereof. The courts of Nevada shall have
jurisdiction (but not exclusive jurisdiction) to entertain and determine
all disputes and claims, whether for specific performance, injunction,
declaration or otherwise howsoever both at law and in equity, arising out
of or in any way connected with the construction, breach, or alleged,
threatened of anticipated breach of this Agreement, and shall have
jurisdiction to hear and determine all questions as validity, existence or
enforceability thereof.
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11.
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Notice. The
validity notice required to be given by one Party to the other Party
hereunder will be deemed effected if hand delivered (receipt signature
required) or by registered mail to the Company and to the Employee as may
be stated in a notice given as herein before
provided.
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12.
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Severability.
If any one or more of the provisions contained in the Agreement itself to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability will not affect any other provision
hereof.
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6
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13.
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Successors and
Assigns. The Agreement will be binding upon and inure to
the benefit of the Parties hereto and their personal representatives, and,
in the case of the Company, its successors and assigns. To the
extent that Company’s obligations under this Agreement are transferred to
any successor or assign, such successor or assign shall be treated as the
“Company” for purposes of this Agreement. Other than as contemplated by
this Agreement, the Employee may not assign His rights or duties under
this Agreement.
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14.
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Continuing
Effect. Wherever appropriate to the intention of the
Parties hereto, the respective rights and obligations of the Parties,
including the obligations referred to in Sections 8, 11, hereof, will
survive any termination or expiration of the term of this
Agreement.
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15.
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Entire
Agreement. The Agreement constitutes the entire Agreement between
the Parties and supersedes any and all other Agreements and understandings
between the Parties in respect of the matters addressed in the Agreement,
unless otherwise specified with in this
Agreement.
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16.
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Amendment and
Waiver. No amendment or waiver of any provision of this
Agreement shall be effective, unless the same shall be in writing and
signed by the Parties, and then such amendment waiver or consent shall be
effective only in the specific instance or for the specific purpose for
which such amendment waiver or consent was
given.
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17.
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Counterparts. This
Agreement may be executed in any number of counterparts, each of which
when so executed shall be deemed an original but all of which together
shall constitute one and the same
instrument.
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IN WITNESS WHEREOF the parties
have executed this Agreement as of the day and year first above
written.
SKINVISIBLE
PHARMACEUTICALS, INC.
By its
authorized signatory:
| /s/ Xxxx XxXxxxxxx | /s/ Xxxxx Xxxxx |
| Xxxx XxXxxxxxx | Xxxxx Xxxxx |
| Director | Director |
SIGNED,
SEALED AND DELIVERED
By: Xxxxx Xxxxxxx
In the
presence
of:
| /s/ Xxxxx Xxxxx | /s/ Xxxxx Xxxxxxx |
| Xxxxx Xxxxxxx | |
