Exhibit 10.5
EMPLOYMENT AGREEMENT
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This is an Employment Agreement ("Agreement") between Mediscience
Technology Corp., a New Jersey corporation (the "Company"), and Xxxxx Xxxxxxxxx
(the "Employee") dated on this 15th day of March1992.
RECITALS
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WHEREAS, the Company and its Board of Directors have determined that it is
to the advantage and interest of the Company to avail itself of the services and
expertise of the Employee; and
WHEREAS, the parties hereto desire by this Agreement to provide for the
employment of the Employee by the Company as its Chief Executive Officer and
President;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and intending to be legally bound hereby, the Company and the Employee agree as
follows;
1. Employment; Duties: Authority. Effective the date first above written,
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the Company shall employ the Employee, and the Employee shall serve in the
position of Chief Executive Officer and President of the Company, subject to the
provisions of this Agreement. In such capacities, the Employee shall generally
administer the business of the Company. In the performance of his duties
hereunder, the Employee shall have the authority to enter into contracts and
incur obligations on behalf of the Company, to order the disbursement of funds
in payment thereof, and to take such other actions as may be in furtherance of
the administration of the Company's business. In addition, the Employee shall
have the authority to make any and all decisions, relating to the hiring or
dismissing of any or all employees of the Company and to make any and all
decisions relating to the engaging or terminating of any and all outside
consultants and professional advisors, such as, but not limited to, accountants,
lawyers and investment counsel.
2. Term. Subject to the provisions for termination as hereinafter
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provided, the term of this Agreement shall be five (5) years, commencing on the
date hereof and terminating on the fifth anniversary date of the date hereof.
3. Extent of Services. The Employee shall devote substantially all of his
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time and energies to the Company's business, but it is understood that the
Employee's duties shall not require him to render his entire business time and
attention to the performance of his duties hereunder, and the Employee may
engage in other business activities, including, but not limited to, services
that may be rendered to third parties' in his capacity as an attorney, or in
other consulting capacities, provided that the pursuit of such other business
activities does not materially impair the performance by the Employee of his
duties as Chief Executive Officer and President of the Company. With the
exception of those obligations to which the Employee is subject as of the date
of this Agreement, the Employee shall not, during the term of his employment by
the Company hereunder, directly or indirectly, either as principal, agent,
stockholder, or in any other capacity, engage in any enterprise or business
which is in competition with the business of the Company as now or hereafter
conducted. For purposes hereof, a business will be deemed in competition if it
involves the rendering of medical services or the research, development,
marketing and/or manufacture of medical devices or equipment or such other
activities that may be the same as, or substantially similar to those, pursued
by the Company. The Employee expressly agrees that upon a breach or violation of
this paragraph, the Company, in addition to all other remedies, shall have the
right to injunctive relief. Any fees or honorarium received by the Employee for
his professional services, or other business activities engaged in by the
Employee outside the scope of his duties herein, shall constitute the sole
property of the Employee.
4. Compensation.
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(a) As compensation for services rendered by the Employee under this
Agreement, from and after the date hereof the Company shall pay the Employee a
base salary of not less than One Hundred and Ninety Thousand ($190,000) Dollars
per annum, payable in such installments, not less frequently than monthly, as
may be determined by the Board of Directors of the Company.
(b) The Employee's base salary shall be increased annually. Such increase
shall be based upon such criteria as increases in the Consumer Price Index and
the Employee's contribution to the successful operation of the Company, but in
no case shall any annual increase be less than six (6%) percent of the
Employee's base salary for the year immediately preceding such increase. Any
such increase shall become effective on January 15 of each respective year of
employment.
(c) In addition to his base salary hereunder, the Employee shall be paid
annually a bonus ("Annual Bonus") in an amount to be determined in accordance
with a formula to be mutually agreed upon by the Employee and the Board of
Directors of the Company. Any payments required under this paragraph shall be
made within sixty (60) days of January 15 of each respective year of employment.
Advances against the bonus may be paid periodically during the year at the
discretion of the Board of Directors of the Company.
(c) The Company believes that it is necessary for the proper performance
of the Employee's responsibilities that he have use of an automobile and shall,
at its own option, either lease or purchase an automobile for the Employee's use
at an annual cost to the Company of Twelve Thousand ($12,000) Dollars per year
plus any deposits necessary to initiate such a lease or consummate such a
purchase. In addition, the Company shall either pay for or reimburse the
Employee for the cost of parking, insurance, maintenance and repair on said
automobile and the costs of operating the automobile in the performance of his
duties herein.
(d) The Company believes that it is necessary for the proper performance
of the Employee's responsibilities that he retain membership in an appropriate
club to be used by him for business purposes and shall reimburse the Employee
for the annual membership dues in such a club.
(e) Should the Employee in his discretion employ personal legal counsel in
connection with the drafting or subsequent interpretation and/or implementation
of this Agreement, the Company shall reimburse him the reasonable fees and
expenses incurred by him.
(f) Should the Employee in his discretion require personal legal counsel
in connection with the performance of his duties hereunder, the Company shall
provide the Employee with the services of the Company's counsel at the Company's
expense or, if desired by the Employee, the Company employ outside counsel of
the Employee's choice, and the Company shall reimburse the Employee for the
reasonable fees and expenses incurred by him to employ outside counsel of his
choice.
6. Vacations: Holidays. The Employee shall be entitled to an annual paid
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vacation of six (6) weeks during each fiscal year of the Company. In addition,
the Employee shall receive those holidays which have been traditionally observed
by other executive officers of the Company. Further, the Employee shall be
entitled to such number of days absence each year due to sickness or personal
reasons as provided in the Company's benefits plan as may be in effect for
executive officers.
8. Termination.
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(a) Termination with Cause. The Company may terminate the Employee's
employment hereunder with cause, provided that the Company must deliver to the
Employee at least ninety (90) days' advance written notice of its intention to
so terminate this Agreement, specifying in reasonable detail the cause for
termination and the intended termination date.
For purposes hereof, the term "with cause" shall mean:
(ii) chronic alcoholism or drug addition and which does, in fact,
adversely and directly affect the business of the Company and which remains
uncured for a period of ninety (90) days after written notice to the Employee of
actions detrimental to the Company;
(ii) conviction of a felony involving moral turpitude relating to the
business of the Company and which does, in fact, adversely and directly affect
the business of the Company;
(iii) the adjudication by a court of competent jurisdiction that the
Employee has committed any acts of fraud or dishonesty resulting or intended to
result directly or indirectly in personal enrichment at the expense of the
Company.
Upon the termination of the Employee's employment as provided herein, he
shall have no further obligations under this Agreement and the Company's sole
obligation under this Agreement shall be to pay to the Employee the full amounts
of his base salary, accrued bonus, and unreimbursed expenses, if any, for the
period through and including the date of termination only. Any payments required
by this paragraph shall be made within sixty (60) days of the date of
termination.
(b) Termination without Cause, (i) The Company may terminate the
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Employee's employment at any time upon sixty (60) days written notice to the
Employee specifying the intended date of termination. For the purposes of this
subparagraph 8(b)(i) "termination" shall not include non-renewal of this
Agreement upon the expiration of the term herein; (ii) in the event of the
termination of the Employee's employment pursuant to subparagraphs 8(b)(i)
above, the Employee shall have no further obligations to the Company under this
Agreement and the Company shall have no further obligations to the Employee,
except to pay to the Employee all unreimbursed expenses for the period up to the
termination date; one hundred (100%) percent of his base salary for the balance
of the term of this Agreement, as if this Agreement had not been terminated; and
two hundred (200%) percent of his annual bonus as paid for the most recently
ended fiscal year. For example, if the Employee's employment was terminated
without cause pursuant to this Section 8(b) effective on the second anniversary
of this Agreement, the Company would be required to pay to the Employee an
amount equal to his unreimbursed expenses through the termination date, ^Xxx his
base salary for the third, fourth and fifth years of the term of this Agreement,
plus 200% of his bonus from the most recently ended fiscal year. In determining
the Employee's base salary for purposes of this subparagraph 8(b)(ii), the
Employee's base salary shall be that base salary in effect on the date before
his termination of employment. All payments required by this paragraph shall be
made within sixty (60) days of the date of termination.
(c) Termination by the Employee. This Agreement may be terminated at any
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time by the Employee upon sixty (60) days written notice to this Company. In the
event os such termination neither the Employee nor the Company shall have any
further obligations under this Agreement, except the Company shall pay to the
Employee the full amounts of his base salary and unreimbursed expenses, if any,
for the period up to the date of termination. Any payments required by this
paragraph shall be made within sixty (60) days of the date of termination.
9. Death. In the event of the death of the Employee during the term of
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this Agreement, this Agreement shall terminate effective as of the date of the
Employee's death and the Company shall pay the Employee's personal
representative or nominee the unpaid compensation, including base salary and
accrued, but unreimbursed expenses due the Employee through the last day of the
month following the month in which his death shall have occurred. All payments
pursuant to this paragraph shall be made by the Company within sixty (60) days
of the date of Employee's death.
10. Sickness; Accident. In the event that the employee is unable to
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perform the full-time duties of his employment by reason of accident or
sickness, and has used all of his accumulated sick days and personal days, the
Company shall continue to pay the Employee his full compensation herein during
such period of his disability, not to exceed, however, one hundred eighty (180)
days from the commencement of such disability. Successive periods of disability
of the Employee's failure to perform his full-time duties on account of accident
or sickness shall be considered separate periods. Notwithstanding anything in
this paragraph to the contrary, the Company shall deduct from the amount
otherwise payable hereunder that amount which becomes payable to the Employee
pursuant to any disability income insurance contract, the premiums for which
have been paid by the Company.
11. Indemnification. The Company shall indemnify and hold harmless the
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Employee against expenses, judgments, fines and amounts paid in settlement
(collectively "Losses") incurred in connection with the performance of his
duties hereunder. Any payments required by this paragraph shall be made within
sixty (60) days of the date on which the Employee shall have incurred the
underlying Losses giving rise to such obligation.
12. Conversion of Unpaid Obligations. In the event that the Company is
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unable to make payment in full to the Employee of any of its obligations
hereunder as they become due, including particularly but without limiting
thereto, any obligation upon termination of the Employee's employment or to
indemnify the Employee, such obligations shall be converted to a note bearing
interest at the prime rate of Chase Manhattan Bank as published in the Wall
Street Journal on the day such obligations becomes due. Such note shall require
equal quarterly payments of interest and principal such that the obligations is
paid in full one (1) year from its original due date.
13. Notices. Any notice or other communication required or permitted
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hereunder shall be in writing and shall be delivered personally, or telegraphed,
telexed, sent by facsimile transmission, sent by certified, registered or
express mail, postage prepaid, or by reputable air courier. Any such notice
shall be deemed given when so delivered personally, telegraphed, telexed or sent
by facsimile transmission or, if mailed, two days after the date of deposit in
the United States mail or, if sent by courier, one day after the date of deposit
with such courier, addressed as follows: If to the Company, addressed to:
Mediscience Technology Corp.
0000 Xxxxxxxxxx Xxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
with a copy to:
Xxxxxxxx Xxxxxx & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Employee, addressed to:
Xx. Xxxxx Xxxxxxxxx
0000 Xxxxxxxxxx Xxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Any party may change its address for notice hereunder by notice to the
other party hereto.
14. Assignability. This Agreement shall not be assignable by either party
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hereto without the prior written consent of the other party, and any such
purported assignment shall be void at initio: provided, however, that Executive
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may not unreasonably withhold his consent to such assignment by the Company.
15. Arbitration. At the option of the Employee, any disputes arising under
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or related to this Agreement shall be determined exclusively by arbitration
before the American Arbitration Association ("AAA") in Philadelphia,
Pennsylvania, or another location mutually agreed upon, and shall be conducted
in accordance with the Commercial Rules of the AAA then in effect.
16. Governing Law. The parties agree that this Agreement shall be
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construed and governed in accordance with the internal laws of the State of New
York applicable to agreements made and to be performed entirely within such
state.
17. Binding Effect. This Agreement shall be binding upon and inure to the
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benefit of the parties hereto and their respective heirs, legal representatives,
executors, administrators, successors and assigns, subject to the limitations on
assignment referred to in Section 6.2 hereof.
18. Counterparts. This Agreement may be executed simultaneously in one or
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more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
19. Entire Agreement. This Agreement represents the entire agreement and
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understanding of the parties hereto with respect to the matters set forth
herein, this Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings and agreements between the
parties, written or oral, relating to the subject matter of this Agreement This
Agreement may be amended, superseded, canceled, renewed, or extended and the
terms hereof may be waived, only by a written instrument signed by the parties
hereto or, in the case of a waiver, by the party waiving compliance.
20. Waivers. No delay on the part of any party in exercising any right,
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power or privilege hereunder shall operate as a waiver thereof. Nor shall any
waiver on the part of any party of any such right, power or privilege hereunder,
nor any single pr partial exercise of any right, power or privilege hereunder,
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.
21. Headings. The headings in this Agreement are inserted for convenience
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only and are not to be considered in the interpretation or construction of the
provisions hereof.
IN WITNESS WHEREOF, the Company and Employee have signed this Agreement as
of the day and year written above.
MEDISCIENCE TECHNOLOGY CORP.
/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
