EXHIBIT 10.65
EMPLOYMENT AGREEMENT
This Employment agreement (Agreement) is made and effective this 14th Day of
September 1999 by and between National Boston Medical, Inc. (Company) and
Xxxxxxx Xxxxxxxxx (Employee).
NOW, THEREFORE, the parties hereto agree as follows:
1. Employment
The Company hereby agrees to employ the Employee for a term beginning on the
date of this Agreement and ending September 14, 2000 as its Inventor Relations
Specialist or at a higher responsible position with the Company and the Employee
hereby accepts such employment in accordance with the terms of this Agreement.
Not withstanding the aforesaid, if this Agreement shall not have been terminated
in accordance with the provisions herein on or before September 14, 2000, the
remaining term of the Agreement shall be extended such that each and every
moment of time thereafter, the remaining term shall be one year unless (a) the
Agreement is terminated earlier in accordance with the provisions herein or (b)
on or after September 14, 2000, the Board of Directors or the Executive
Committee of the Company notifies the Employee in writing of its determination
to have the date of this Agreement expire one year from the date of such
notification.
In the event of any conflict or ambiguity between the terms of this Agreement
and terms of employment applicable to regular employees, the terms of this
Agreement shall control.
2. Duties of the Employee
The Employee shall devote substantial time, attention and energy to the affairs
of the Company and/or its subsidiaries during the term of this Agreement and
shall have such duties, responsibilities and authority as shall be the character
and dignity appropriate and consistent with the position and title of Inventor
Relations Specialist or such responsibility or authority as from time to time
additionally authorized by the Board of Directors. The Employee may engage in
other activities, such as activities including serving on the Board of Directors
of other corporations/organizations, and/or advising other
corporations/organizations in each case to the extent that such activities do
not materially detract from or limit the performance of the Employee's duties
under this Agreement, or inhibit in any material way the business of the Company
and its subsidiaries. The Employee will engage in no activity, paid or
otherwise, for a competitor of the Company so long as this Agreement is in
effect. The term "competitor" shall include any individual or entity engaged in
the manufacture, sale, marketing or distribution of products or product lines
similar in design, composition, content or function to those products currently
or in the future carried by the Company. The Employee shall perform all duties
in a professional, ethical and businesslike manner.
The Employee will be based out of his current location in Lilburn Georgia. The
Employee will not be required to relocate without his approval.
3. Compensation
The Employee will be paid compensation during this Agreement as follows:
A.) A base salary, commencing September 14, 1999 of not less than $72,000 per
year, (or such greater amounts as may be approved by the Board of Directors or
the Executive committee in accordance with authority given by the Board of
Directors) payable in installments on a semi-monthly but not less than a monthly
schedule. The Employee's base salary may be increased consistent with
recommendations of the Executive Committee of the Board. At least annually the
Executive Committee shall review the Employee's base salary for competitiveness
and appropriateness in the industry. In no event shall the Employee's base
salary be less than $72,000 on an annual basis.
B.) The Company agrees to pay a Bonus consisting of 10,000 shares of the
Company's restricted Common Stock for each one million dollars ($1 million) of
net sales, defined as Gross Sales less: discounts, returns and allowances of
products sourced by the Employee or through Product Sourcing, Ltd with his
involvement. This bonus is capped at a maximum of 200,000 shares per year. These
shares will be calculated quarterly and delivered to the Employee within 30 days
following the end of each quarter.
C.) The Employee may choose once each year of this Agreement to convert
one-third of his annual salary to stock or stock options, the purchase price
shall be the lower of the average price of the NBM stock during the last twelve
months or the current market price as of the date the Employee chooses to
exercise such option.
D.) In addition to the other payments referred to in this Agreement, the Company
agrees to award to the Employee as of the effective date of this Agreement, a
signing bonus of 300,000 shares of the Company's restricted common stock. These
shares shall be delivered to the Employee within 45 days of the execution date
of this agreement subject to the Employee's successful completion of his 30-day
new hire probationary period.
E.) The Restricted shares issued to the Employee will be subject to piggyback
registration rights as described below and any restrictions that may be imposed
by current or future SEC rules and regulations.
The shares referred to in this Section 3 are being issued pursuant to Section
4(2) of the Securities Act of 1933, as amended (the "Act"), and Rule 506 of
Regulation D promulgated thereunder ("Rule 506") or other applicable provisions.
The shares shall be Rule 144 restricted shares. After issuance of the shares, at
any time that National Boston proposes to file a National Boston registration
statement (except Form 10, Form 10-SB or Form S-8) under the Act (the
"Registration Statement") either for its own account or for the account of a
stockholder, National Boston shall give the Employee written notice of its
intention to do so and of the intended method of sale (the "Registration
Notice") within a reasonable time prior to the anticipated filing date of
National Boston's Registration Statement. The Employee may request inclusion of
any restricted shares in such Registration Statement by delivering to National
Boston, within ten business days after receipt
of the Registration Notice, a written notice (the "Piggyback Notice") stating
the number of restricted shares proposed to be included and that such shares are
to be included in any underwriting only on the same terms and conditions as the
shares of common stock otherwise being sold through underwriters under such
Registration Statement. National Boston shall use its best efforts to cause all
restricted shares specified in the Piggyback Notice to be included in the
Registration Statement and any related offering, all to the extent requisite to
permit the sale by the Employee of its restricted shares in accordance with the
method of sale applicable to the other shares of common stock included in such
Registration Statement. The Employee shall pay its pro rata portion of the costs
of such registration based on the number of shares to be sold. The Employee
shall have only one right to participate in a Registration Statement, and if it
does not include all of its restricted shares in such registration, National
Boston shall have no further obligation to the Employee to facilitate the
registration of the remaining shares.
4. Benefits
A.) Holidays: The Employee will be entitled to at least nine (9) paid holidays
each calendar year and twelve (12) personal days. The Company will notify the
Employee on or about the beginning of each calendar year with respect to the
holiday schedule for the coming year. Personal holidays, if any, will be
scheduled in advance subject to the requirements of the Company. Such holidays
must be taken during the calendar year and unused days shall not carry forward
into the next year.
B.) Vacation: The Employee shall be entitled to two (2) weeks or fourteen
(14) paid vacation days per year effective as of the date of the Agreement.
C.) Sick Leave: The Employee shall be entitled to sick leave and emergency
leave according to the regular policies and procedures of the Company.
Additional sick leave or emergency leave over and above paid leave provided by
the Company, if any, shall be granted at the discretion of the Executive
Committee of the Board of Directors.
D.) Medical and Group Life Insurance: Company agrees to include Employee and his
family members in the group medical and hospital plan of the Company and provide
group life insurance at no charge to the Employee, in the amount of not less
than $150,000 during the term of this Agreement. Employee shall be responsible
for any state or federal tax imposed upon these benefits.
E.) Pension and Profit Sharing Plan: The Employee shall be eligible to
participate in any pension or profit sharing plan or other type plan adopted by
the Company for the benefit of its officers and/or regular employees.
F.) Expense Reimbursement: The Employee shall be entitled to reimbursement
for all reasonable expenses, including travel and entertainment incurred by the
Employee in the performance of his duties. The Employee will maintain records
and written receipts as required by Company policy and reasonably requested by
the Board of Directors to substantiate such expenses.
5. Termination
A. The Company shall have the right to terminate this Agreement under the
following circumstances:
i. Upon the death of the Employee.
ii. Upon notice to the Employee in the event of notice of illness or
other disability which has incapacitated him from performing his duties for 12
consecutive months as determined in good faith by the Board.
iii. For good cause upon notice from the Company. Termination by the
Company of the Employee for "good cause" as used in this Agreement shall be
limited to mean gross negligence, misappropriation or theft of Company funds or
conviction of state or federal offenses which would prevent the Employee from
performance of his duties.
With respect to any termination for good cause by the Company, the specifics of
the cause shall be communicated to the Employee in writing at least thirty (30)
days prior to the date on which the termination is proposed to take effect. The
Employee shall be given the opportunity to correct or respond to such cause.
D. If this Agreement is terminated pursuant to Section 5 (A - iii) above,
Employee's rights and the Company's obligations hereunder shall forthright
terminate except as expressly provided in this Agreement.
E. If this Agreement is terminated pursuant to Section 5 (A - i or ii) hereof,
Employee or his estate shall be entitled to receive 100% of the Employees salary
and incentives for the balance of the term of the Agreement, together with bonus
and other incentives as provided for in this Agreement.
6. Termination by Employee
The Employee shall have the right to terminate this Agreement with thirty (30)
days written notice to the Company given within sixty (60) days of the
occurrence of any of the following events:
A. The Company acts to materially reduce the Employee's position, title,
duties, authority or responsibilities.
B. The Company acts to reduce the compensation, bonus or incentives of the
Employee.
7. Consequences of Breach by the Company
A. If this Agreement is terminated pursuant to Section 5 hereof, or if the
Company shall terminate the Employee or the Employee's duties under this
Agreement in any way that is a breach by the Company, the following shall apply:
B. The Employee shall receive a cash payment that is equal to the present value
of the Employee's base salary hereunder for the remainder of the term, payable
within 30 days of the date of such termination.
C. The Employee shall be entitled to bonus payments and benefits as provided in
Section 3 (it being understood, however, that all such bonus payments, if made
pursuant to this clause, shall be paid at the option of the Employee, in cash
regardless of whether or not such payments exceed the cash limit.
D. All stock options and common stock and restricted stock granted by the
Company to the Employee under this Agreement shall accelerate and become
immediately vested and exercisable.
8. Remedies
The Company recognizes that because of the Employee's special talents, stature,
and opportunities in the industry, and because of the creative nature of and
compensation practices of the industry and the material impact that individual
projects can have on a company's results of operations, in the event of
termination by the Company hereunder or in the event of termination by the
Employee before the end of the agreed term, the Company acknowledges and agrees
that the provisions of this Agreement regarding further payments of base salary,
bonuses and the exercisability of stock options constitute fair and reasonable
provisions for the consequences of such termination, do constitute a penalty and
such payments and benefits shall not be limited or reduced by amounts that the
Employee might earn or be able to earn from any other employment or ventures
during the remainder of the agreed term of this Agreement.
9. Notices
Any notice required by this Agreement or given in connection with it, shall be
in writing and shall be given to the appropriate party by personal delivery or
be certified mail, postage pre-paid, or recognized overnight delivery service;
If to the Company:
National Boston Medical, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn.: Xxxxxx Xxxxx, CEO
If to the Employee:
Xxxxxxx Xxxxxxxxx
000 Xxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
10 Final Agreement
This Agreement terminates and supersedes all prior understandings or agreements
on the subject matter hereof. This Agreement may be modified only by a further
writing that is duly executed by both parties.
11. Governing Law
This Agreement shall be construed and enforced in accordance with the laws of
the Commonwealth of Massachusetts.
12. Headings
Headings in this Agreement are provided for convenience only and shall not be
used to construe meaning or intent.
13. Binding Agreement
This Agreement shall be binding upon and inure to the benefit of the Employee,
his heirs, distributees and assigns.
14. Severability
If any term of this Agreement is held by a court of competent jurisdiction to be
invalid or unenforceable, then this Agreement, including all of the remaining
terms, will remain in full force and effect as if such invalid or unenforceable
term had never been included.
15. Arbitration
The parties agree that they will use their best efforts to amicably resolve any
dispute arising out of or relating to this Agreement. Any controversy, claim or
dispute that cannot be so resolved shall be settled by final binding arbitration
in accordance with the rules of the American Arbitration Association and
judgement upon the award rendered by the arbitrator or arbitrators may be
entered in any court having jurisdiction thereof. Any such Arbitration shall be
concluded in such place as shall be mutually agreed upon by the parties. Within
fifteen (15) days of the commencement of the arbitration, each party shall
select one person to act as arbitrator, and the two arbitrators shall select a
third arbitrator within ten (10) days of their appointment. Each party shall
bear its own costs and expenses and an equal share of the arbitrator's expenses
and administrative fees of arbitration.
16. Protection of the Company's Interests
During the term of this Agreement, the Employee shall not directly or indirectly
engage in competition with the Company. At no time shall the Employee divulge,
furnish, or make accessible to any person any information of a confidential or
proprietary nature obtained by him while in the employ of the Company except as
necessary in the performance of his duties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
/s/ Xxxxxxx Xxxxxxxxx
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Xxxxxxx Xxxxxxxxx
Employee's Signature and Acceptance
/s/ Xxxxx X. XxXxxxxxx
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Xxxxx X. XxXxxxxxx
CFO
National Boston Medical, Inc.
