EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made as of this 1st day
of November 2002, by and between CalbaTech, Inc., a Nevada corporation,
its subsidiaries, successors and assigns ("CTI" or "Employer") and
Xxxxx X. Xxxxxx, an individual with home address of 00 Xxxxxxxxxx Xxxx,
Xxxxxx, XX 00000 ("Employee").
WITNESSETH:
WHEREAS, the Employee has agreed to be employed by the Employer as
its Director of Marketing and Business Development; and
WHEREAS, it is in the Employer's best interest to obtain the
services of the Employee; and
WHEREAS, the Employer and the Employee have previously engaged in
negotiations regarding the terms and conditions of their future
employment relationship; and
WHEREAS, the Employer and the Employee are desirous of now
committing to writing the agreed upon terms and conditions of their
future employment relationship by way of this Agreement.
NOW THEREFORE, in consideration of the mutual premises and
covenants contained herein and for other good and valuable
consideration by each of the parties, it is hereby agreed as follows:
1. Employment. The Employer hereby authorizes and agrees to
employ the Employee and confirms said authority of a member of The
Board executing this Agreement on behalf of the Employer, and the
Employee hereby accepts said employment upon the terms and conditions
hereinafter set forth.
2. Positions and Titles. The Employee shall have the title of
Director of Marketing and Business Development of CTI. The Employee
shall perform such duties as are normally associated with the position
of Director of Marketing and Business Development of the Employer and
such additional duties as may, from time to time, be assigned by CTI.
3. Term. The term or period of this Agreement shall be for the
period beginning on the date of execution hereof and ending on the day
after the first year anniversary of the date hereof, provided, however,
that the term of this Agreement shall be automatically extended under
the same terms and conditions for additional terms of one (1) year each
unless at least ninety (90) days prior to expiration of the initial
term or any subsequent term, either party shall deliver to the other
written notice of their intent to terminate said employment or to
negotiate other terms and conditions thereof. In the event this
Agreement is not renewed or extended and Employee does not enter into a
new employment agreement with Employer, Employee shall be paid
compensation which would have been paid under this Agreement for One
(1) week plus One (1) week for each year Employee is employed by CTI
after expiration of the initial term or any subsequent terms. The
Employee agrees to remain in the employ of the Employer during the
period this Agreement is in effect unless terminated pursuant to any of
paragraphs 7, 8 or 12.
4. Performance of Duties. During the period of the Employee's
employment, the Employee shall perform faithfully the duties required
of him and agrees to devote that amount of time, attention, skill and
ability necessary to properly perform said duties. It is also
understood and agreed that the Employee may, from time to time, serve
on the boards of directors of other corporations as may be approved by
the Board, whose approval shall not be unduly withheld, provided that
such service neither interferes with the performance of his duties for
the Employer nor creates any actual or potential conflict of interest
with respect to the Employee's loyalties, obligations or duties to the
Employer.
5. Compensation. The employer shall pay to the Employee as
compensation for his services hereunder, the amounts set forth, subject
to the further provisions of this paragraph:
(A) Base Salary. The Employee shall be paid an annual
salary of Ninety Thousand Dollars ($90,000), payable pursuant to the
Employer's salary payment practices. Such salary shall be subject to
increases as determined by CTI and the Employee shall be paid according
to the current payment standards in place with the Employer.
Employee acknowledges that CTI does not have the financial
resources to begin paying such base salary beginning November 1, 2002
and that CTI anticipates salary payments to begin by January 15, 2003.
Nevertheless, CTI will accrue all unpaid salary and pay to Employee
such accrued unpaid salary as soon as it determines, in its sole
judgment, it reasonably has the financial resources to do so.
(B) Commissions. CTI will pay to Employee commissions on
sales of products licensed or owned by CTI and/or CTI subsidiaries for
which Employee is assigned responsibility in writing by CTI. No
formula for such commissions can be determined at this time which
could accurately fit each situation; therefore, Employer and Employee
agree to negotiate a commission structure for each project to which
Employee is assigned in good faith.
(C) Stock Option. It is also agreed that the Employer
shall grant to the Employee Two Hundred, Fifty Thousand (250,000)
options to purchase shares of the Company's Common Stock upon the date
of this Agreement (the "Option"). The exercise price of the Option
shall be $0.001 per share. The Option shall vest Ten Thousand (10,000)
shares upon the execution of this Agreement, and Twenty Thousand
(20,000) shares at the end of each Three (3) month period that Employee
is employed by CTI until all Two Hundred, Fifty Thousand (250,000)
shares have vested. Upon termination of Employee's employment with CTI
no additional shares shall vest; however, Employee shall not lose any
shares previously vested. The Option shall have a term of Ten (10)
years from the date of grant before they expire.
6. Additional Benefits. In addition to the compensation
specified in Paragraph 5 above, Employer shall provide Employee
comparable additional benefits as are provided to other senior manager
of Employer; provided, however, the said additional benefits shall not
be less favorable to Employee than as more particularly described in
subparagraphs (A) through (E) of this paragraph 6.
(A) Vacations and Sick Leave. The Employee shall be
entitled to three (3) weeks of vacation leave and one (1) week of sick
leave for each year of employment. Time allotted for vacation and sick
leave that is not used shall accrue to the next year.
(B) Business Expenses. The Employer will reimburse the
Employee in full for all reasonable expenses incurred by the Employee
in pursuit of the Employer's business during the period of this
Agreement. The Employee shall be required to submit the appropriate
expense reports and vouchers in support of the expenses incurred on
behalf of the Employer as required by the general practices and
procedures of the Employer and in compliance with all reasonable
business expense requirements of the Internal Revenue Service.
(C) Hospital, Medical and Dental Reimbursement Plan. The
Employer shall provide, at its cost, health, major medical and dental
benefits for the Employee and his immediate family as soon as the
Employer determines, in its sole judgment, that it has the financial
resources to do so.
(D) Equity Position in Proposed Subsidiaries. It is the
intention of CTI to incorporate subsidiary companies in order to
market and sell products acquired or licensed from others. Should CTI
assign Employee to any such subsidiary as an officer, director,
manager or other key position, then CTI will issue to Employee Five
Percent (5%) of its initial equity in that subsidiary. Such equity
shall be subject to dilution.
(E) Retirement. The Employee shall be entitled to
participate in, and receive benefits under and in accordance with, any
pension plan (including, but not limited to, a 401(k) plan) or any
other retirement plan or program of Employer either in existence as of
the date hereof or hereafter adopted for the benefit of any of its employees.
7. Termination. This Agreement may be terminated pursuant to
the following:
(A) Voluntary Termination by either the Employee or the
Employer. The Employee may voluntarily terminate this Agreement by
providing Ninety (90) days written notice to Employer in the event of a
termination pursuant to this subparagraph. All compensation hereunder
shall terminate as of the effective date of such termination. The
Employer may voluntarily terminate this Agreement by providing Ninety
(90) days written notice to the Employee ("Written Notice"). All
options vested will remain in force.
(B) Involuntary Termination. This Agreement may be
terminated by the Employer for "Just Cause", or as provided for in
paragraph 12. For purposes of this Agreement, "Just Cause" shall mean:
Unappealable conviction by a trial court of a felony or crime involving
moral turpitude; declaration of unsound mind by court order; or the
failure to diligently apply himself to the duties required by Employer.
In the event the Employee is judged by Employer as failing to
diligently apply himself to the duties hereunder, Employer will provide
written notice to Employee specifying with particularity the conduct
constituting such failure and such steps as are necessary to warrant
the deficiency of performance. Employee will be allowed Thirty (30)
days from the date of such notice to attempt to correct the
deficiencies. Upon the expiration of this cure period, Employer will
provide written notice to Employee of the adequacy or failure of
efforts made by Employee to correct the deficiencies. The Employer
agrees to provide the Employee at least Sixty (60) days written notice
of termination pursuant to this subparagraph. In the event of a
termination under this subparagraph (B), Employee shall be paid the
same compensation at the same times that would be paid under this
Agreement through the effective date of Employee's termination.
(C) Severance Pay. Upon any termination pursuant to
paragraph 7(A) hereof, Employee shall be paid the compensation that he
would have been paid under this Agreement for Two (2) months after the
date of termination.
8. Change of Ownership. This Agreement shall terminate in the
event that the Employer or all or substantially all of Employer's
assets, and/or goodwill, or its stock are purchased in conjunction with
a corporate (stock or assets) sale, or merger. In such event, Employee
shall be entitled to the Severance Pay pursuant to paragraph 7(C),
provided Employee is not offered a comparable position under the same
terms and conditions of this agreement with the acquiring company or
operation. All such compensation and severance pay will be paid within
Ninety (90) days of the effective date of the transaction. In the
event of such payment, Employer and Employee shall have no further
obligations under this Agreement except that Employer will pay all
premiums for health insurance policies then in effect for Employee,
through the end of such compensation period.
9. Obligations on Termination. In addition to the obligations
on the Employee set forth in paragraph 7 herein, upon termination of
employment for any reason, the Employee shall deliver to the Employer
all correspondence, letters, records, computer programs, data bases and
any and all other material pertaining to or containing information
relative to the business of the Employer or its affiliates which the
Employee has acquired during his association with Employer.
10. Indemnification. The Employer agrees to indemnify and defend
Employee (and his heirs, executor, and administrators) from all claims,
liabilities, judgments, settlements, costs and expenses, including all
attorneys' fees, imposed upon or reasonably incurred by him in
connection with or resulting from any action, suit, proceeding, or
claim to which he is or may be made a party by reason of his being or
having been an employee of the Employer (whether or not an employee at
the time such costs or expenses are incurred by or imposed upon him) to
the full extent provided for in the Employer's Articles of
Incorporation or the laws of the State of Nevada, whichever is broader,
as in effect on the date of execution hereof. Such right of
indemnification shall not be deemed exclusive of any rights to which he
may be entitled otherwise.
11. Death of Employee. In the event of the Employee's death
during the term of this Agreement, the Agreement shall stand terminated
and all payments hereunder shall ceases as of the date of death, except
as to the following:
(A) The base salary being paid to the Employee by the
Employer as of the date of death shall continue to be paid to
Employee's estate for a period of Sixty (60) days after the date of death.
(B) All accrued and unpaid benefits under this Agreement,
whatsoever in nature, shall be payable to the Employee's estate.
12. Assignment of Agreement. The obligations of the Employer
under this Agreement shall be binding upon the successors and assigns
of the Employer. In the event this contract is assigned, Employee
shall be entitled to enforce the provisions of this Agreement or, in
his sole discretion, terminate this Agreement upon the terms provided
in paragraph 8 hereof. For purposes of this Agreement, the term
"successors" and "assigns" shall include any person, firm, corporation,
or other entity which at the time, whether by merger, reorganization,
purchase, or otherwise, shall acquire all or substantially all the
assets, stock, or business of the Company.
13. Amendments. This Agreement cannot be changed or terminated
orally and no waiver of compliance with any provision or condition
hereof shall be effective unless evidenced by an instrument in writing
duly executed by the parties hereto and sought to be changes by such waiver.
14. Writing. This Agreement sets forth the entire understanding
of the parties with respect to the employment of the Employee by the
Employer and supersedes any and all prior agreements, arrangements and
understanding relating to the subject matter hereof. This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns.
15. Waiver. The waiver by the Employer or the Employee of any
breach of any provisions of this Agreement shall not operate or be
construed as a waiver of any subsequent breach of this Agreement.
16. General Provisions.
(A) This agreement shall be deemed to be made, governed by,
interpreted under and construed in all respects in accordance with the
commercial rules of Judicial Arbitration and Mediation Service
("JAMS"). This chosen jurisdiction is irrespective of the country or
place of domicile or residence of either party. In the event of
controversy arising out of the interpretation, construction,
performance or breach of this agreement, the parties hereby consent to
adjudication under the commercial rules of JAMS. Said venue of the
arbitration shall be in Orange County, California. Judgment on the
award rendered by the arbitrator may be entered in any federal or
state court in Orange County, California.
(B) In the event that any term, provisions, or paragraph of
this Agreement is declared illegal, void or unenforceable, the same
shall not effect or impair the other terms, provisions or paragraphs of
this Agreement. Covenants contained in this Agreement shall be
independent. The doctrine of severability shall be applied. The
parties do not intend by this statement to imply the illegality,
voidness or unenforceability of any of the terms, provisions or
paragraphs of this Agreement.
17. Captions. The captions for each paragraph are not part of
this Agreement, but are for identification purposes.
18. Governing Law. This Agreement is made under and shall be
construed pursuant to the laws of Nevada.
19. Notices. Any notice, writing, report or other document
required or permitted hereunder shall be in writing and shall be given
by prepaid registered or certified mail, with return receipt requested,
addressed as follows:
IF TO THE EMPLOYER:
CalbaTech, Inc.
00000 Xxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
IF TO THE EMPLOYEE:
Xxxxx X. Xxxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
The date of any such notice and of service thereof shall be seemed to
be the date of dispatch. Either party may change its address for
purposes of notice by giving notice in accordance with the provisions
of this paragraph.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands and seals the date and year first above written.
FOR THE EMPLOYER:
Signature Date
Name and Title
(CORPORATE SEAL)
THE EMPLOYEE:
Date
