EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made as of March 3, 2003, by and between
Senetek PLC, a company organized under the laws of England (the "Company"), and
Xx. Xxxx Xxxxxxxxx (the "Employee"), with reference to the following facts:
RECITALS:
The Company has retained the Employee as a consultant, and now desires
to employ the Employee as the Company's Chief Financial Officer, and the
Employee desires to be so employed by the Company. In consideration of the
foregoing recitals and the mutual covenants herein set forth, the parties agree
as follows:
1. Employment; Acceptance: The Company hereby employs the Employee and
the Employee hereby accepts employment by the Company as the Company's Chief
Financial Officer or in such other capacity consistent with the Employee's
experience and competencies and of a level at least comparable to the position
specified above as may be assigned to the Employee by the Chief Executive
Officer of the Company.
2. Duties and Powers: The Employee agrees to devote his full business
time, attention, energies and abilities to the proper management and conduct of
the Company's business, provided that, subject to Section 7.3, the Employee may
serve on the Board of Directors, advisory committee, or the like of not more
than two for-profit or not-for-profit business organizations at any one time
during the Term, provided, further, that such service does not interfere with or
detract from the Employee's services on behalf of the Company. The Employee
shall have full power and authority, subject to the By-laws of the Company and
the direction of the Chief Executive Officer and the Board of Directors of the
Company (the "Board"), generally to manage, administer and conduct the business
and affairs of the
Company within the Employee's area of responsibility, and shall have such other
duties, powers and authority as are prescribed by the Chief Executive Officer,
the By-laws of the Company and the Board.
3. Term: The employment of the Employee by the Company pursuant to this
Agreement shall commence on March 3, 2003 and continue until April 30, 2005,
unless the Employee's employment is sooner terminated in accordance with Section
5 or 6.
4. Compensation: The Company hereby agrees to pay to the Employee an
annual salary of $185,000. Such salary shall be payable in installments
according to the Company's regular payroll practice, subject to withholding and
social security, unemployment and other taxes; provided that if the Employee's
employment terminates on any date other than on the last day of a calendar
month, then the compensation payable pursuant to this Section 4 for the monthly
period during which the period of employment has been terminated shall be
prorated.
5. Other Benefits:
5.1 Management Bonus Plan. Commencing with calendar year 2003, the
Employee shall be eligible to participate in a Management Bonus Plan developed
and administered by the Compensation Committee of the Board pursuant to which,
for each calendar year, participants may earn, based on individual performance,
up to a percentage of the participant's salary or other amount established at
the beginning of the year, payable from a bonus fund measured by the Company's
performance during the year. For 2003, the Compensation Committee has approved a
formula under which the bonus fund shall be equal to ten (10) percent of the
amount by which operating income for the year exceeds fifteen (15) percent of
revenues, such bonus to be payable in cash and/or shares of the Company's stock,
all as determined by the Compensation Committee. In recognition of the
Employee's services as a consultant, the Employee's bonus for 2003 shall be
calculated as if the Employee had commenced service effective January 1, 2003,
and shall not be prorated.
5.2 Vacation: The Employee shall be entitled to take an annual
vacation in
accordance with the policy of the Company with respect thereto. The Company
policy is three weeks of paid vacation during each complete 12-month period of
employment. For 2003, the Company agrees that the Employee may take one week of
vacation at the end of June and another week toward the end of July, to
accommodate scheduled family events, plus one day in mid-March.
5.3 Expenses: The Company shall reimburse the Employee for
reasonable travel, entertainment and other business expenses incurred in
connection with the performance of his duties hereunder (including business use
of a cell phone, attendance at professional seminars with prior approval and
reasonable business periodical subscriptions), in accordance with the policy of
the Company with respect thereto.
5.4 Employee Benefit Plans: The Employee shall be entitled to
participate, on the same terms as other employees of the Company of the
Employee's level, in any medical, dental or other health plan, pension plan,
profit-sharing plan, and life or disability insurance plan that the Company may
from time to time adopt or maintain, any of which may be changed, terminated or
eliminated by the Company at any time in its exclusive discretion.
5.5 Car Allowance: Employee shall be entitled to a car allowance in
the amount of $500 per month.
5.5 Stock Options: Management shall recommend to the Compensation
Committee of the Board that within 15 days after the date hereof Employee be
granted non-qualified stock options to purchase 175,000 American Depositary
Shares representing Common Stock of the Company at an exercise price equal to
the market price of the American Depositary Shares on the date of grant and with
a four year vesting schedule, in accordance with the Company's Stock Option
Scheme 1. The Employee shall be considered by the Compensation Committee for
additional grants during the term of the Agreement.
6. Termination:
6.1 By the Company for Cause: The Company may terminate this
Agreement and the Employee's employment for cause, effective immediately on the
day it gives notice of such termination to the Employee. "Cause" for this
purpose shall be defined as insobriety; conviction of a misdemeanor involving
moral turpitude or a felony; illegal business practices in connection with the
Company's business; misappropriation of the Company's assets; willful violation
of Company policies; excessive absence of the Employee from his employment
during usual working hours for reasons other than vacation, disability or
sickness; or any material breach by the Employee of any term or provision of
this Agreement. On such termination for cause, the Employee shall be entitled
only to his compensation hereunder to the date of such termination, and shall
not be entitled to any other compensation, including, without limitation, any
severance compensation.
6.2 Disability: If the Employee becomes unable fully to perform the
Employee's duties hereunder because of legal disability (including an injunction
or similar order or decree of a court of competent jurisdiction preventing or
severely impairing the performance of his duties hereunder), the Company may
terminate this Agreement by written notice to Employee effective on the date
stated in the notice. In addition, except as otherwise required by applicable
law, if the Employee becomes unable fully to perform the Employee's duties
hereunder because of physical or mental injury or illness and such inability
continues for a period of six consecutive months or eight months in any twelve
month period, the Company may terminate this Agreement by written notice to the
Employee effective at the end of such six month or twelve month period, and the
Employee shall not be entitled to any compensation or other payment after the
effective date of such notice, provided, however, Employee shall be entitled to
disability benefits under any Company provided disability benefit plan.
6.3 Death. In the event of the Employee's death during the term of
this Agreement, this Agreement shall automatically terminate on the date of
death, and the Employee's legal representative
shall be entitled to receive payment of the Employee's compensation hereunder to
the date of the Employee's death, and shall not be entitled to any other
compensation or payment, provided, however, that Employee's designated
beneficiary shall be entitled to death benefits under any Company-provided life
insurance plan or program in which the Employee participated on the date of
death.
6.4 Other Termination. The Company reserves the full right and
authority to terminate the Employee's employment otherwise than as provided in
Section 6.1, 6.2 or 6.3, for any reason or without reason. The Employee also
reserves the full right and authority to terminate the Employee's employment in
the event of a material breach by the Company of the terms of this Agreement,
provided that the Employee shall give the Company fifteen days' prior written
notice of such breach and the Company shall have the right to cure such breach
during such period, or in the event that the Compensation Committee of the Board
shall not grant stock options as recommended by management as provided in
Section 5.5. If the Company or the Employee so terminates the Employee's
employment, the Employee shall be entitled to receive (subject to compliance
with the terms of Section 7) continued payment of the Employee's compensation
under Section 4, at the rate in effect on the date of termination, for a period
of twelve months, in lieu of any and all other benefits provided under this
Agreement other than as provided in any benefit plans of the Company in which
the Employee then participates.
6.5 Merger; Sale of Assets: This Agreement shall not be terminated
by any reorganization, merger or consolidation of the Company, any sale of all
of substantially all of the assets of the Company, or the adoption by the
stockholders of the Company of any plan relating to the liquidation or
dissolution of the Company in connection with any such other transaction
(collectively, a "Corporate Event"), if a surviving or resulting corporation or
other entity or person continues (or resumes after a period of not more than
sixty days) the business of the Company. In any such event, if the business of
the Company is so continued or so resumed, this Agreement shall be binding on
and
shall inure to the benefit of the corporation or other entity or person
surviving or resulting or to which such assets shall have been transferred, and
the Employee shall be assigned duties with respect to that part or division of
such corporation or other entity or person that continues the business of the
Company that are as comparable as possible to the Employee's duties with respect
to the Company immediately prior to such transaction. If, in any such event, the
business of the Company is not so continued or so resumed, such event shall be
deemed to constitute termination pursuant to Section 6.4., except as otherwise
provided in Section 6.6.
6.6 Hostile Change of Control. In the event of (a) any Corporate
Transaction following which those persons who were stockholders of the Company
immediately prior to such Corporate Transaction hold less than a majority of the
voting power of the surviving or resulting corporation or other legal entity, or
(b) any acquisition by any individual or group acting in concert of a
controlling bloc of the voting securities of the Company, or (c) any change in
the Board such that a majority of the members have served less than twelve
months and were not elected or nominated for election by a majority of members
who have served for at least twelve months, then unless any such event described
in clause (a), (b) or (c) was approved in advance by a majority of members of
the Board of Directors who have served for at least twelve months or were
elected or nominated for election by a majority of members of have served for at
least twelve months, if within twelve months after such event the Employee's
employment is terminated as provided in Section 6.4, then in lieu of the
severance provided for in Section 6.4, the Company shall pay to the Employee in
a lump sum an amount equal to the lesser of (i) three times the sum of the
Employee's total cash compensation (inclusive of bonus, if any) during the
calendar year of the Term in which the Employee received the highest total cash
compensation, or (ii) the maximum amount that could be paid to the Employee
without causing any payments made to the Employee with respect to such event to
constitute an "excess parachute payment" as such term is defined in Section
280G(b)(1) of the Internal Revenue Code or any successor provision thereof.
7. Trade Secrets, Patents, Competition, Etc.:
7.1 Trade Secrets: The Employee acknowledges that as an officer and
employee of the Company he has had and will have access to and has and will
become acquainted with various trade secrets and other proprietary and
confidential information of the Company (the "Trade Secrets"), including,
without limitation, designs, equipment, devices, patterns, electronically
recordable data or concepts, computer programs, software and hardware, software
and hardware enhancements, modifications and improvements, secret inventions,
processes, compilations of information, books, papers, records and
specifications, names, buying habits and practices of customers or potential
customers of the Company, marketing methods, operating practices and related
data, names of vendors and suppliers, costs of materials, prices the Company
obtains or has obtained or at which it sells or has sold its products or
services, manufacturing and sales costs, lists or other written records used in
the Company's business, compensation paid to Company employees and consultants
and other terms of employment, all of which are owned by the Company and are
regularly used or contemplated to be used in the business of the Company.
The Employee agrees that he will not at any time, whether during or
subsequent to the term of his employment by the Company, without the specific
written consent of the Company in the particular case, directly or indirectly
use, disclose or communicate to any person or entity any Trade Secrets, for any
purpose, except such Trade Secrets as have been publicly disclosed through no
act or omission of the Employee. The Employee further acknowledges and agrees
that this Section 7 prohibits and precludes any use of Trade Secrets by him or
by any person obtaining any Trade Secrets directly or indirectly from him in
competition with the Company.
The Employee further agrees that all written materials, including
without limitation files, records, documents, drawings and specifications, and
all equipment and devices and all other items
relating to the business of the Company, whether prepared by or with the
assistance of the Employee or otherwise coming into his possession, control or
knowledge, are and shall remain the exclusive property of the Company and shall
not be removed from the premises of the Company under any circumstances. On
termination of his employment with the Company for any reason, the Employee
agrees to deliver promptly to the Company all of the foregoing which are or have
been in his possession or under his control.
7.2 Inventions, Designs and Patents: The Employee agrees that he
will promptly and fully inform and disclose to the Company all inventions,
designs, improvements and discoveries which he conceives, alone or together with
others, during the term of this Agreement which relate to the existing or
contemplated business of the Company ("Inventions"). All Inventions are and
shall remain the exclusive property of the Company. The Employee agrees to
assist the Company to obtain any and all patents, trademarks, service marks and
copyrights relating to Inventions and to execute all documents and do all things
necessary to obtain letters patent and trademark, service xxxx and copyright
registrations, to vest the Company with full and exclusive title to each
Invention, all as and to the extent the Company may request.
Notwithstanding the foregoing provisions of this Section 7.2, this
Section 7.2 shall not apply to an Invention developed entirely on the Employee's
own time without using the Company's equipment, supplies, facilities, or trade
secret information except for those Inventions that result from any work
performed by the Employee for the Company. The Employee acknowledges that this
paragraph constitutes the notification contemplated by California Labor Code
section 2872.
7.3 Competition and Solicitation: The Employee agrees that the
Employee will not at any time during employment by the Company directly or
indirectly own other than a passive investment interest in, or be connected as
an officer, employee, agent, independent contractor, consultant, partner,
shareholder or principal with, any corporation, partnership, proprietorship,
association, or other entity or
person engaged in developing, producing, designing, providing, soliciting orders
for, selling, distributing or marketing products or services that directly or
indirectly compete with the Company's products, services or business.
The Employee further agrees that the Employee will not at any time
during employment by the Company and for a period of one year following
termination (voluntary or involuntary, whether or not for cause) of the
Employee's employment with the Company, directly or indirectly, and whether or
not for compensation, interfere with the business of the Company in any manner,
including, without limitation, (a) by diverting or attempting to divert from the
Company any business in which the Company is engaged or contemplates engaging,
or (b) by inducing any employee of the Company to leave the Company's employ or
any consultant or other independent contractor for the Company to change or
terminate any relationship between that person and the Company.
7.4 Injunctive Relief: The Employee acknowledges and agrees that
failure to perform any of the Employee's covenants in this Section 7 would cause
irreparable injury to the Company and cause damages to the Company which would
be difficult or impossible to quantify or redress with money damages.
Accordingly, without limiting any remedies that may be available with respect to
any breach of this Agreement, upon a showing by the Company of a breach or
threatened breach of this Section 7 by the Employee, the Employee consents to
the entry of an injunction to restrain any breach of this Section 7.
7.5 Infringement. The Employee represents and warrants that the
Employee does not possess and will not knowingly use, in connection with the
Employee's employment by the Company, any trade secrets or other confidential or
proprietary information or intellectual property in which any other person has
any right, title or interest and that the Employee's employment by the Company
as contemplated hereby will not infringe or violate the rights of any other
corporation, partnership, firm, proprietorship, association or other person.
7.6. Survival. The representations, warranties and agreements in this
Section 7 shall survive any cancellation, termination, rescission or expiration
of this Agreement and any termination of the Employee's employment with the
Company.
8. Severability. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision hereof.
9. Notices. Except as otherwise specifically provided herein, any
notice, consent, demand or other communication to be given under or in
connection with this Agreement shall be in writing and shall be deemed duly
given on the date delivered personally or transmitted by facsimile transmission,
or one day after being deposited with Federal Express or other nationally
recognized delivery service for overnight delivery, or three days after being
mailed by first class mail, charges or postage prepaid, properly addressed, if
to the Company, at its principal office, and, if to the Employee, at his address
set forth following his signature below. Either party may change such address
from time to time by notice to the other.
10. Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of California.
11. Assignment. Except as otherwise specifically provided herein,
neither party shall assign this Agreement or any rights hereunder without the
consent of the other party, and any attempted or purported assignment without
such consent shall be void; provided that the Employee's consent shall not be
required hereby for any of the transactions to which section 6.5 hereof refers.
This Agreement shall otherwise bind and inure to the benefit of the parties
hereto and their respective successors, assigns, heirs, legatees, devisees,
executors, administrators and legal representatives.
12. Entire Agreement. This Agreement contains the entire agreement of
the parties and supersedes all prior or contemporaneous negotiations,
correspondence. understandings and agreements between the parties regarding the
subject matter of this Agreement. This Agreement may not be
amended or modified except in writing signed by both parties and supported by
new consideration.
IN WITNESS WHEREOF, this Agreement has been duly executed by or on
behalf of the parties hereto as of the date first above written.
Senetek PLC
By:
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Xxxx Xxxxxxxxx Xxxxx X. Xxxxxxx
Chairman & CEO
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