EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT
(“Agreement”) made and entered into on this 1st day of April, 2008 (the
"Effective Date"), by and between Vystar Corporation, a Georgia corporation
(the
"Company"), and Xxxxxx Xxxxxx, a resident of the State of Georgia
("Employee").
In
consideration of the employment by the Company and of the compensation and
other
remuneration paid, and to be paid, by the Company and received by Employee
for
such employment, and for other good and valuable consideration, the receipt
and
sufficiency of which is hereby acknowledged by Employee, it is agreed by and
between the parties hereto as follows:
1. Definitions.
For
purposes of this Agreement, the following terms shall have the meanings
specified below:
"Business"
- the
research, development, manufacturing, marketing, sales, distribution and
offering of products and services related to low-protein natural rubber latex
raw materials and products offered by the Company as of the Effective Date
and
as may be offered by Company during the term of this Agreement.
“Competitor”
- means
any
Person (as defined herein) offering products or services in competition with
Company or any of its subsidiaries, specifically any Person offering or involved
in the research, development, manufacturing, marketing, selling and/or
distribution of any low-protein natural rubber latex raw material or
product.
"Confidential
Information"
-
information relating to the operations, customers, or finances of the Company,
or the Business, that derives value from not being generally known to other
Persons, including, but not limited to, technical or nontechnical data,
formulas, patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, and lists of or identifying information
about actual or potential customers or suppliers, including all customer lists,
whether or not reduced to writing, certain patented and unpatented information
relating to the research and development, manufacture or serving of the
Company's products, information concerning proposed new products, market
feasibility studies and proposed or existing marketing techniques or plans,
and
all information defined as a “Trade Secret” pursuant to the Georgia Trade
Secrets Act or otherwise by Georgia law. Confidential Information also includes
the same types of information relating to the operations, customers, finances,
or Business of any affiliate of the Company, if such information is learned
by
Employee during the term of this Agreement or in connection with Employee's
performance of Services. Con-fidential Information also includes information
disclosed to the Company by third parties that the Company is obligated to
maintain as confiden-tial. Confidential Information may include information
that
is not a Trade Secret, but Confiden-tial Information that is not also a Trade
Secret shall constitute Confidential Information only for five (5) years after
the Termination Date. Confidential Information does not include information
generally available to the public through no violation of a confidentiality
or
non-disclosure obligation owed to Company;
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"Customer"
- any
customer of the Company in the Territory that Employee, during the term of
this
Agreement, (i) provided goods or services to or solicited on behalf of the
Company; or (ii) about whom Employee possesses Confidential
Information;
"Person"
- any
individual, corporation, partnership, limited liability company, association,
municipality, government agency, government, unin-corporated organization or
other entity;
"Services"
- the
duties and functions that Employee shall provide in the Territory as an employee
of the Company and as further outlined on Exhibit B;
"Termination
Date"
- the
last day Employee is employed by the Com-pany, whether the termination is
voluntary or involuntary and whether with or without cause;
“Territory”
- shall
be the geographic region in which Employee initially and/or at anytime
throughout the term of this Agreement provides the Services. Territory shall
be
more fully described in Exhibit B along with Employee’s description of
Services.
2. Employment:
The
Company agrees to employ Employee and Employee agrees that Employee will devote
Employee’s full productive time, skill, energy, knowledge and best efforts
during the period of Employee’s employment to such duties as the Board of
Directors of the Company and/or the Employee’s Direct Supervisor (as identified
in Section 5 below) may reasonably assign to Employee, and Employee will
faithfully and diligently endeavor to the best of Employee’s ability to further
the best interest of the Company during the period of Employee’s employment.
However, Employee is not prohibited from making personal investments in any
other businesses, as long as those investments do not require Employee to
participate in the operation of the companies in which Employee invests and
such
other businesses are not in competition with the Company or any of its
subsidiaries (“Competitor”). Employee may invest in any publicly traded company
registered on a bona fide stock exchange without reservation.
3. Terms
of Employment:
Employee's employment will begin on the _______ day of ___________, 20__, and
will continue unless one party gives the other party of such intent to not
renew
ninety (90) days prior to each annual anniversary date, unless earlier
terminated in accordance with Section 9 herein. Notwithstanding, the foregoing,
the first 180 days of Employee’s employment shall be a probationary period
during which Company may terminate Employee without cause and without the
obligation of the Severance Payment, as described in Section 10.c. Effect of
Termination (“Probationary Period”). Termination of this Agreement during the
Probationary Period shall be effective upon written notice to Employee. At
Company’s election, in the event of Company’s termination of Employee without
cause during the Probationary Period, Company may elect to activate the
Noncompete provisions. In the event of Company’s termination of Employee for
cause, whether in the Probationary Period or otherwise, Employee shall be
obligated to comply with the Noncompete covenants.
4. Compensation:
On the
terms and subject to the conditions of this Agreement, (i) the Company will
pay
Employee a salary and a bonus determined in accordance with Schedule A, (ii)
Employee will be entitled to participate in the Company’s Employee Stock Option
Plan as may be in effect from time to time, and (iii) the Company will provide
Employee with employee benefits consistent with those provided by the Company
to
similarly situated executives. The Company’s Employee Stock Option Plan will be
distributed to Employee. The employee benefits provided by the Company as of
the
date hereof shall also be distributed to Employee. The Company reserves the
sole
and unilateral right to modify any and all employee benefits at any time in
its
sole discretion.
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5. Title,
Duties and Conduct of Employee:
The
Employee’s initial title shall be Executive Vice President Sales and Marketing,
and shall report to Xxxxxxx X. Xxxxx, President & COO, as Employee’s Direct
Supervisor. Employee shall perform such duties and functions for the Company
as
shall be specified from time to time by the Chairman or Board of Directors
of
the Company, and/or the Employee’s Direct Supervisor, including, but not limited
to the duties and functions expressly set forth on Schedule B, and which are
consistent with Employee's duties set forth on Schedule B
(“Services”).
a. Disparagement.
Employee
shall not at any time make false, misleading or disparaging statements about
the
Company, including the Business, management, employees and/or
Customers.
b. Prior
Agreements.
Employee
represents and warrants that Employee is not under any obligation, contractual
or otherwise, limiting, impairing or affecting Employee's performance of
Services. Upon execution of this Agreement, Employee shall give the Company
any
agreement with a prior employer or other Person purporting to limit or affect,
in any way, Employee's ability to work for the Company, to solicit customers
or
potential customers or employees or to use any type of information.
c. Confidential
Information.
Employee
shall protect Confidential Information. Except as required in connection with
work for the Company, Employee will not use, disclose or give to others, during
or after Employee's employment, any Confidential Information.
d. Compliance
with Company Policies and Laws.
At all
times while performing Services, Employee shall comply with all laws and
regulations applicable to Employee and/or Company. Employee shall at all times
comply with all Company policies and procedures. Failure to comply with this
Section shall be grounds for Termination For Cause, as described in Section
10
Term and Termination.
6. Paid
Time Off, Illness or Incapacity:
Employee
is entitled to vacation paid time off and absence from Employee’s duties during
regular work hours for a total of four (4) weeks each calendar year. Employee
shall be entitled to paid time off for sick leave pursuant to Company policy.
If
Employee cannot perform his/her duties because of major illness or incapacity
for more than a total of ninety (90) days in any year, the Company may terminate
this Agreement upon thirty (30) days' written notice to Employee. Employee
is
not entitled to receive, and the Company shall not be required to pay,
Employee's compensation hereunder for absences because of major illness or
incapacity other than the total of ninety (90) days in each year granted to
Employee under this Section 6.
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7. Termination
of Agreement Upon Sale or Termination of Company's
Business:
a. Not--with-standing
anything to the contrary contained in this Agreement, the Company may terminate
Employee's employment upon thirty (30) days' written notice to Employee upon
the
occurrence of any of the following events:
(1)
The
acquisition, directly or indirectly, of any "person" (excluding any "person"
who
on the date hereof owns or controls ten percent (10%) or more of the voting
power of the Company's common stock), as such term is used in Sections 13(d)
and
14(d) of the Securities Exchange Act of 1934, as amended, within any twelve
(12)
month period of securities of the Company representing an aggregate of fifty
percent (50%) or more of the combined voting power of the Company's then
outstanding securities; provided, that for purposes of this Paragraph (a),
"acquisition" shall not include shares which are received by a person through
gift, inheritance, under a will or otherwise through the laws of descent and
distribution;
(2)
During
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Company (the "Board"), cease
for
any reason to constitute at least a majority thereof, unless the election of
each new director was approved in advance by a vote of at least a majority
of
the directors then still in office who were directors at the beginning of such
period; or
(3)
The
occurrence of any other event or circumstance which is not covered by (1) or
(2)
above which the Board determines affects control of the Company and, in order
to
implement the purposes of this Agreement, adopts a resolution that such event
or
circumstance constitutes an “event” under this Paragraph 7.
b. If
the
Company terminates Employee pursuant to Paragraph 7(a), Company will, for the
Severance Period (as defined in Paragraph 10(c)), pay Employee her then current
salary and provide Employee with Group Health Insurance, but Company shall
not
be required to pay any other compensation or provide any other
benefits.
8. Ownership
of Information
a. Work
For Hire Acknowledgment; Assignment.
All
writings, draw-ings, photographs, tapes, recordings, computer programs and
other
works in any tangible medium of expression, regardless of the form of medium,
which have been or are prepared by Employee, or to which Employee contributes,
in connection with Employee's employ-ment by the Company, whether patented,
copyrighted, trademarked or otherwise (collectively the "Works") and all
copyrights, patents, trademarks and other rights in and to the Works, belong
solely, irrevocably and exclusively throughout the world to the Company as
works
made for hire. However, to the extent any court or agency should conclude that
the Works (or any of them) do not constitute or qualify as a "work made for
hire," Employee hereby assigns, grants and delivers, solely, irrevocably,
exclusively and throughout the world to the Company all ownership and other
rights to the Works. Employee also agrees to cooperate with the Company and
to
execute such other further grants and assignments of all rights as the Company
from time to time reasonably may request for the purpose of evidencing,
enforcing, filing, registering or defending its ownership of the Works and
the
copyrights in them, and Employee hereby irrevoca-xxx constitutes and appoints
the Company as Employee's agent and attorney-in-fact, with full power of
substitu-tion, in Employee's name, place and stead, to execute and deliver
any
and all such assignments or other instruments which Employee shall fail or
refuse promptly to execute and deliver, this power and agency being coupled
with
an interest and being irrevo-cable. Without limiting the preceding provisions
of
this Paragraph 8(a), Employee agrees that the Company may edit and otherwise
modify, and use, publish and otherwise exploit, the Works in all media and
in
such manner as the Company, in its discretion, may determine.
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b. Inventions,
Ideas and Patents.
Employee
shall disclose promptly to the Company (which shall receive it in confidence),
and only to the Company, any invention or idea of Employee (developed alone
or
with others) conceived or made during Employee's employment by the Company
(or,
if related to the Business, during employment or within one year after the
Termination Date). Employee assigns to the Company any such invention or idea
in
any way connected with Employee's employment or related to the Business,
research or development of the Company, or demonstrably anticipated research
or
development of the Company, and will cooperate with the Company and sign all
papers deemed necessary by the Company to enable it to obtain, maintain, protect
and defend patents covering such inventions and ideas and to confirm the
exclusive ownership of the Company of all rights in such inventions, ideas
and
patents, and irrevoca-xxx appoints the Company as its agent to execute and
deliver any assignments or documents Employee fails or refuses to execute and
deliver promptly, this power and agency being coupled with an interest and
being
irrevocable. This constitutes written notification to Employee that this
assignment does not apply to an invention for which no equipment, supplies,
facility or Trade Secret information of the Company or any Customer was used
and
which was developed entirely on Employee's own time, unless (a) the invention
relates (i) directly to the Business or (ii) to the actual or demonstrably
anticipated research or develop-ment of the Company, or (b) the invention
results from any work performed by Employee for the Company.
9. Nonsolicitation;
Noncompetition.
a. Non-Solicitation
of Customers.
During
the term of this Agreement, and for one (1) year after the Termination Date,
Employee will not solicit Customers within the Territory for the purpose of
providing products or services comparable to those provided by the Business,
except on behalf of the Company.
b. Non-Solicitation
of Company Employees.
During
the term of this Agreement and for one (1) year after the Termination Date,
Employee will not solicit for employment with another Person anyone who is
an
employee of the Company.
c. Non-Compete.
During
the term of this Agreement and for one (1) year after the Termination Date,
Employee will not provide services substantially similar to Services within
the
Territory to any Competitor. Employee shall be prohibited from providing in
the
Territory in competition with the Company in accordance with the terms of this
Agreement, including the Services expressly set forth on Schedule B attached
hereto. Employee acknowledges that Employee has been informed of and discussed
with the Company the specific activities that Employee will perform as Services
and that Employee understands the scope of the activities that constitute
Services and the Territory under this Agreement.
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d. Future
Employment Opportunities.
Prior to
and for one (1) year after the Termination Date, Employee shall (a) provide
any
employer with a copy of this Agreement, and (b) upon accepting any position,
provide the Company with the employer's name and a description of the services,
if any, Employee will provide for such employer.
10. Termination.
At all
times, Employee’s employment shall be subject to “employment at will”. This
Agreement and the employment of Employee may be terminated as
follows:
a. Without
Cause.
Either
party may terminate this Agreement upon thirty (30) days notice to the other
party.
b. For
Cause.
(1) By
the
Company (i) pursuant to Paragraphs 6 or 7, (ii) upon conviction of the Employee
of any felony or material misdemeanor under federal, state or local laws or
ordinances, except traffic violations (iii) upon the failure of Employee to
diligently or competently discharge the duties assigned to him pursuant to
this
Agreement; or
(2) (i)
By
Employee upon thirty (30) days' written notice to the Company for any breach
of
this Agreement by Company and failure to cure within that thirty (30) day notice
period; or
(3) By
the
Company upon any breach by Employee of any of the terms and conditions of this
Agreement or the breach by Employee of any representation or warranty made
to
the Company herein or in any other agreement, document or instrument executed
by
Employee and delivered to the Company, or should any representation or warranty
made by Employee hereunder or thereunder prove to have been false or misleading
in any material respect when made or furnished; or
(4) By
the
Company upon the death of Employee.
c. Effect
of Termination.
(1) In
the
event Employee is terminated by the Company without cause (other than during
the
Probationary Period pursuant to Paragraph 3 the Company shall (i) pay Employee
his then current salary and provide Employee with Group Health Insurance, but
no
other compensation or benefits, for three (3) months (“Severance Period”)
beginning with the date of termination (“Severance Payment”). If Employee is
terminated for cause or Employee terminates this Agreement without cause,
Employee shall be entitled only to compensation accrued through the date of
Termination and all benefits accrued as of such date, and shall not be entitled
to any Severance Payment described herein, but shall remain obligated to the
Non-Compete and Non-Severance obligations.
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(2)
Return
of Materials.
On the
Termination Date or for any reason or at any time at the Company's request,
Employee will deliver promptly to the Company all materials, documents, plans,
records, notes, manuals, subcontracts, procedures, customer lists, and any
other
papers and any copies thereof in Em-ployee's possession, custody or control
relating to the Company or the Business, whether defined as Confidential
Information, Trade Secret or otherwise, all of which at all times shall be
the
property of the Company.
11. Miscellaneous.
a. Assignability.
(1)
This
Agreement may be assigned by the Company to any successor in interest to its
business, which successor in interest shall be bound herein to the same extent
as the Company. Employee agrees to perform his duties for such successor in
interest to the same extent as for the Company.
(2)
This
is a personal agreement on the part of Employee and may not be sold, assigned,
transferred or conveyed by Employee.
b. No
Waiver.
The
waiver by either party of a breach of any provision of this Agreement by the
other party shall not operate or be construed as a waiver of any subsequent
breach by the other party.
c.
Governing
Law and Jurisdiction.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Georgia. Any cause of action shall be filed in and the parties agree
to
subject themselves to the jurisdiction of any State or Federal court of
competent jurisdiction located in Atlanta, Georgia.
d.
Entire
Agreement.
This
Agreement, together with the Employee confidential Information, Copyright and
Invention Assignment Agreement, attached hereto as Exhibit C, states the entire
agreement and understanding between the parties and supersedes all prior
understandings and agreements.
e.
No
Modification.
No
change
or modification to this Agreement shall be valid unless in writing and signed
by
both parties hereto.
f. Independence
of Covenants.
The
covenants contained herein shall be construed as agreements independent of
each
other and of any other provision of this or any other contract between the
parties hereto, and the existence of any claim or cause of action by Employee
against the Company, whether predicated upon this or any other contract, shall
not constitute a defense to the enforcement by the Company of said
covenants.
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g.
Right
to Injunctive Relief.
Employee
recognizes and agrees that the injury the Company will suffer in the event
of
the Employee's breach of any covenant or agreement contained herein cannot
be
compensated by monetary damages alone, and Employee therefore agrees that the
Company, in addition and without limiting any other remedies or rights that
it
may have, either under his Agreement or otherwise, shall have the right to
obtain an injunction against Employee from any court of competent jurisdiction
enjoining any such breach without having to show or prove damages or
injury.
h.
Jury
Trial Waiver.
Both
parties hereby waive their right to a trial by jury in the event of any dispute
or cause of action regarding this Agreement.
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IN
WITNESS WHEREOF,
the
undersigned have executed this Agreement as of the day and year first above
written.
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Schedule
A - Salary and Bonus
Annual
Salary. $95,000*
Salary.
Company
shall pay Employee a Monthly Salary of $7,916.00* The Monthly Salary shall
be
payable bi-weekly according to the Company’s established payroll periods.
*
The
salary may be adjusted upon the introduction of a mutually agreed-upon
commission and/or bonus structure.
Bonus.
For the
first six (6) months of Employee’s employment, Employee shall receive in
addition to her Salary a guaranteed bonus of Five Thousand Dollars ($5,000)
per
month, which shall be divided equally among the scheduled payroll periods for
each month, and payable as part of the standard, scheduled payroll for each
month. Thereafter, a further bonus structure may be made available to Employee
depending upon the Company and Employee performance, at Company’s complete and
sole discretion. Such bonus structure may alter the base and/or commission
compensation described herein.
Commission.
It is
anticipated by both parties that a commission structure will be mutually agreed
upon at some point during the term of this Agreement. Such commission structure
may alter the base salary and/or bonus compensation described
herein.
Stock
Option Grant.
Employee
shall be granted 200,000 stock options at the strike price of $1/share pursuant
to Company’s current 2004 Long-Term Incentive Compensation Plan, which shall
vest according to the following schedule:
50,000
vesting upon the execution of this Agreement and the execution of the
corresponding Stock Option Agreement effecting the stock option
grant.
50,000
vesting each of the next 3 years upon the anniversary date of the execution
of
the Stock Option Agreement.
Employee
may be awarded additional option grants at the Company’s and/or her Supervisor’s
sole discretion. In all cases, the execution of a Stock Option Agreement shall
be required in order to effect any such grant.
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Schedule
B - Duties and Functions (“Services”)
Employee
shall be responsible for implementing and overseeing, including all budgetary
and revenue responsibility, for all Company sales and marketing activities
and
initiatives. The Territory for Employee’s scope of Services responsibility shall
be the world-wide.
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Schedule
C
Employee
Confidential Information, Copyright and Invention Assignment
Agreement
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