MARK C. MIRKEN EMPLOYMENT AGREEMENT
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EMPLOYMENT
AGREEMENT (the “Agreement”),
dated
as of September 4, 2007, by and among Millennium Biotechnologies, Inc., a
Delaware corporation (“Company”), Millennium Biotechnologies Group Inc.
(“Group”) and ▇▇▇▇ ▇. ▇▇▇▇▇▇ (“Executive”).
WHEREAS,
the
Company is a research-based nutraceutical company and a pioneer in the emerging
field of specialized nutritional supplements;
WHEREAS,
the
Company is a wholly owned subsidiary of Group, a publicly held
company;
WHEREAS,
the
Company desires to employ the Executive initially as its President and Chief
Operating Officer and, subject to certain conditions herein, as its Chief
Executive Officer, and Executive desires to be so employed by the Company,
on
the terms and conditions herein provided.
WHEREAS,
the
Executive, for no additional compensation, has agreed to serve as the President
of Group.
NOW,
THEREFORE,
in
consideration of the foregoing and of the respective covenants and agreements
of
the parties herein contained, the parties hereto agree as follows:
1. Employment.
During
the term of this Employment Agreement, as defined in section “2” hereof (the
“Term”), the Company shall employ the Executive, and the Executive shall render
services to the Company as its President and Chief Operating Officer and shall
report directly to the Board of Directors of the Company and Group. The
Executive shall have such duties as are consistent with the positions of
President. Executive shall devote his full time to the performance of his duties
under this Employment Agreement and shall perform them faithfully, diligently
and competently. The Executive represents and warrants that neither the
execution by him of this Agreement nor the performance by him of his duties
and
obligations hereunder will violate any agreement to which he is a party or
by
which he is bound. At such time as the Company has achieved revenues in excess
of $1,250,000 in any fiscal quarter during the Term, the Executive shall also
assume the position of Chief Executive Officer and shall become a member of
the
Board of Directors of the Company and Group without change in the compensation
provided hereunder.
2. Term
of Employment.
Unless
earlier terminated as provided in this Employment Agreement, the term of
Executive's employment under this Employment Agreement (the “Term”) shall
commence on the date hereof (the “Effective Date”) and continue until three
years from the date hereof, provided the Executive shall have the right to
extend the Term for two additional years upon written notice to the Company
given at least 180 days prior to the expiration of the original three year
Term
hereof.
3. Compensation.
(a) Base
Salary.
Company
shall pay to Executive throughout the Term an annual salary (the “Base Salary”)
payable monthly on the 15th day of each month during the Term. The Base Salary
shall be at the rate of $350,000 per year.
(b) Bonus.
(i) In
addition to the Base Salary, during the Term, the Company shall pay to Executive
an annual bonus (the “Bonus”), payable within ninety days after the end of each
fiscal year of the Company. The Bonus shall equal the dollar amount set forth
in
the following schedule (“Bonus Schedule”) which corresponds to the Company’s
gross sales for the fiscal year in which the sales objective was met. The gross
sales shall be determined in accordance with the Company’s annual financial
statement as certified by the Company’s accountants.
Bonus
Schedule
| Gross Sales |
Annual
Bonus
|
|||
|
Under
5,000,000
|
0
|
|||
|
5,000,000
|
$
|
100,000.00
|
||
|
8,000,000
|
$
|
250,000.00
|
||
|
11,000,000
|
$
|
425,000.00
|
||
|
15,000,000
|
$
|
600,000.00
|
||
|
20,000,000
|
$
|
750,000.00
|
||
|
25,000,000
|
$
|
900,000.00
|
||
|
30,000,000
|
$
|
1,050,000.00
|
||
|
35,000,000
|
$
|
1,175,000.00
|
||
|
40,000,000
|
$
|
1,300,000.00
|
||
|
45,000,000
|
$
|
1,425,000.00
|
||
|
50,000,000
|
$
|
1,550,000.00
|
||
|
55,000,000
|
$
|
1,675,000.00
|
||
|
60,000,000
|
$
|
1,800,000.00
|
||
|
65,000,000
|
$
|
1,925,000.00
|
||
|
70,000,000
|
$
|
2,055,000.00
|
||
|
75,000,000
|
$
|
2,185,000.00
|
||
|
80,000,000
|
$
|
2,315,000.00
|
||
|
85,000,000
|
$
|
2,445,000.00
|
||
|
90,000,000
|
$
|
2,585,000.00
|
||
|
95,000,000
|
$
|
2,725,000.00
|
||
All
amounts specified in this agreement are in US Dollars.
(ii) For
gross
sales in excess of $100,000,000, the amount of any additional bonus, if any,
shall be within the discretion of the Board of Directors of the
Company.
2
4. Benefits.
(a) General
Fringe Benefits.
Executive shall be entitled to participate in the life, hospitalization, health,
accident and disability insurance plans, health programs, pension plans, and
other benefit and compensation plans, which are or which may become generally
available to senior executives of the Company from time to time.
(b) Reimbursements.
Company
shall pay or reimburse Executive for all reasonable expenses actually incurred
or paid by Executive during the Term in the performance of Executive's duties
to
Company upon presentation by Executive of expense statements or vouchers.
(c) Automobile.
Company
shall pay Executive $2,000.00 per month as full reimbursement for any and all
expenses relating to the use of an automobile during the Term in the performance
of Executive's duties to Company, including insurance, maintenance and
garage.
(d)
Vacation.
The
Executive shall be entitled to fifteen (15) days paid vacation each year during
the Term in accordance with the applicable policies of the Company.
5. Options.
Within
30 days following the end of each fiscal year during the Term, Group shall
issue
to the Executive three year Options to purchase at an exercise price of $.01
per
share, a number of shares of common stock of Group as shall equal the greater
of
(i) one percent of all issued and outstanding shares of common stock of Group
at
the end of such fiscal year, for each $20,000,000 incremental increase in gross
sales for such fiscal year which is in excess of the prior high point of gross
sales reported in any prior fiscal year by the Company; or (ii) one percent
of
all issued and outstanding shares of common stock of Group at the end of such
fiscal year, for each $30,000,000 increase in market capitalization of Group
over and above the high point of market capitalization of Group for any fifteen
consecutive trading days preceding such fiscal year. “Market Capitalization”
shall mean the average closing bid price for common stock of Group for the
fifteen trading days prior to the end of such fiscal year multiplied by all
outstanding shares of common stock of Group.
6. Signing
Bonus.
The
Company shall pay Executive a Signing Bonus in the amount of $100,000 and Group
shall issue 6,000,000 shares of its Common Stock to the Executive upon execution
of this Agreement.
7. Gross
Up Provision:
The
Executive’s Base Compensation shall be “grossed-up” to create a neutral tax
impact, if any, on the issuance of any shares or options to the Executive under
this Agreement.
8. Relocation
Expense.
The
Company shall pay temporary housing expenses of the Executive not to exceed
$12,750 per month for one year; and shall reimburse the Executive for moving
and
relocation expenses from Dallas to New Jersey, such expenses not to exceed
$15,000.
3
9. Termination
of Employment.
(a) Death.
Executive's employment shall terminate upon his death, and in such event, the
estate or other legal representative of Executive shall be entitled to receive
(A)
Executive's Base Salary for a period equal to the lesser of (i) three months
from the date of death or (ii) the balance of the Term; (B) all compensation
and
any Options which have been granted to the Executive and benefits that are
accrued and unpaid as of the date of death.
(b) Termination
by Company.
Executive's employment may be terminated at the option of Company by notice
to
Executive (i) as a result of Executive's disability as provided in section
9(c)
hereof, or (ii) for Acause@
as
defined and provided in section 9(d) hereof.
(c) Disability.
As used
in this Employment Agreement, the term Adisability@
shall
mean a physical or mental disability or incapacity, whether total or partial,
of
Executive that, in the good faith determination of Company's Board of Directors
or based upon reasonably competent medical advice, has prevented him from
performing substantially all of his duties under this Employment Agreement
during a period of 30 days during any twelve month period. If Company shall
terminate Executive's employment pursuant to this section 9(c), Executive shall
be entitled to continue to receive his Base Salary for a period of three months
from the date of termination (but not exceeding the balance of the Term), as
well as (A) all compensation and benefits that are accrued and unpaid as of
the
date of disability; and (B) any Options which have been granted to the
Executive.
(d)
Discharge
for ACause@.
If
Executive (A) neglects his duties hereunder in a material manner and such
neglect shall not be discontinued within five (5) business days after written
notice to Executive thereof; (B) is convicted of a felony or other crime
involving fraud, moral turpitude or material loss to the Company; (C) materially
breaches his affirmative or negative covenants or undertakings hereunder and
such breach shall not be remedied within five (5) business days after written
notice to Executive thereof; or (D) in bad faith, commits any act or omits
to
take any action, to the material detriment of Company; then Company may at
any
time by notice terminate Executive's employment hereunder for "cause"; and
Executive shall have no right to receive any compensation or benefit from
Company hereunder on and after the effective date of such notice, except for
his
Base Salary through the date of termination,) Bonus that is accrued and unpaid
as of the date of termination; any Options which have been granted to the
Executive as of the date of Termination.
(e) Termination
by Executive for Good Reason.
In the
event of: (i) a sale of all or substantially all of the ownership interests
or
assets of Company, (ii) a merger or consolidation of the Company with any other
corporation or entity in which the shareholders of the Company own less than
51%
of the stock of the controlling or surviving entity following such merger or
consolidation; (iii) a Achange-in-control@
of the
Company, defined as any person or entity becoming a Abeneficial
owner@
(as
defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended from
time to time) directly or indirectly of securities of the Company representing
50% or more of the combined voting power of the Company's then outstanding
securities; (iv) Company's materially breaching its affirmative or negative
covenants or undertakings hereunder and such breach shall not be remedied within
fifteen (15) days after notice to Company thereof (which notice shall be signed
by Executive and refer to a specific breach of this Employment Agreement);
(v) a
reduction in the nature or scope of Executive's titles, authorities, powers,
duties, or responsibilities hereunder; or (vi) the removal of Executive as
a
member of the Board of Directors of Company or Group (following his appointment
to such Boards as provided herein), unless such removal occurs after the
termination of Executive's employment for Acause@,
then
Executive may at any time by notice terminate Executive's employment hereunder
for Agood
reason@.
In the
event of such termination or in the event the Company shall terminate the
Executive’s employment without cause, the Company shall pay to Executive (A) his
Base Salary through the date of the end of the contract term or end of the
extension period should the termination without cause occur during an extension
period, (B) Bonus that is accrued and unpaid as of the date of termination;
and
(C) any Options which have been granted to the Executive as of the date of
Termination.
4
(f) Termination
Benefits.
(i) Upon
the
expiration of the Term or the termination of Executive's employment for any
reason hereunder, the rights and benefits of Executive under Company's employee
benefit plans and programs shall be determined in accordance with the provisions
of such plans and programs.
10. Prohibited
Activities.
(A) Non-Compete
Period.
For the
purposes of this Employment Agreement, the term "Non-Compete Period" shall
mean
the Term, and if Executive's employment is terminated by Company for "cause"
or
due to Executive’s disability, by Executive without "good reason", an additional
period of one (1) year from and after the date of termination.
(B) Non-competition.
During
the Non-Compete Period, Executive shall not directly or indirectly compete
with,
be engaged in the business of, be employed by, act as a consultant to, or be
a
director, officer, employee, owner or partner of, any person or entity which
is
engaged in the primary business of the Company at such time and in the
territories served by the Company in such business during the Non-Compete
Period.
(C) Solicitation
of Employees.
During
the Non-Compete Period, Executive shall not directly or indirectly employ,
or
solicit to leave Company's employ, or solicit to join the employ of another
person or entity (including any such person or entity owned or controlled,
directly or indirectly, by Executive) any employee of Company or any person
who
has been such an employee during the twelve months preceding Executive's date
of
termination.
(D) Confidential
Information.
During
and at all times subsequent to the Term, Executive shall keep secret and shall
not exploit or disclose or make accessible to any person or entity, except
in
furtherance of the business of Company, and except as may be required by law
or
legal process, any confidential business information of any type that was
acquired or developed by either Company or any of its subsidiaries or
affiliates, or Executive, prior to or during the Term. In addition, the term
Aconfidential
business information@
shall
not include information which (i)
is or
becomes generally available to the public other than as a result of a disclosure
by Executive; or (ii)
was
available to Executive prior to any employment by Company as a result of his
general business experience.
5
(E) Divisibility.
The
provisions contained in this section 10 as to the time period and scope of
activities restricted shall be deemed divisible, so that if any provision
contained in this section is determined to be invalid or unenforceable, that
provision shall be deemed modified so as to be valid and enforceable to the
full
extent lawfully permitted.
(F) Relief.
Executive acknowledges that the provisions of this section are reasonable and
necessary for the protection of Company and that Company will be irreparably
damaged if such covenants are not specifically enforced. Accordingly, it is
agreed that Company will be entitled to injunctive relief for the purpose of
restraining Executive from violating such covenants (and no bond or other
security shall be required in connection therewith), in addition to any other
relief to which Company may be entitled.
|
11.
|
Work
for Hire.
|
Any
and
all formulations, devices, materials, technology or other inventions
(collectively AInventions@)
made,
developed or created by the Executive (whether at the request or suggestion
of
the Company or otherwise, whether alone or in conjunction with others, and
whether during regular hours of work or otherwise) during the Term, will be
promptly and fully disclosed by the Executive to the Company and shall be the
Company=s
exclusive property. The Executive will promptly deliver to the Company all
papers, drawings, models, data and other material relating to any Invention
made, developed or created by him as aforesaid. The Executive acknowledges
that
any Inventions developed, made, or created by the Executive during the Term
shall be deemed AWorks
for
Hire@
and that
the Company shall have the exclusive right to copyright, patent or otherwise
protect such Inventions.
Executive
agrees to assign to the Company its successors, legal representatives and
assigns all rights, including patent rights, in and to any such Inventions
and
further agrees to cooperate with the Company if the Company pursues patent
protection for such Inventions. Specifically, and without limitation, Executive
agrees to communicate to the Company any facts known to the Executive respecting
said Invention, to sign all lawful papers, to execute all divisional, continuing
and reissue applications, to make all declarations and to generally do
everything possible to assist the Company to obtain and to enforce patent rights
for said Invention in the United States and abroad.
12. Miscellaneous.
(A) Survival.
The
covenants and agreements set forth in this Employment Agreement shall survive
Executive's termination of employment.
(B) Headings.
The
section headings of this Employment Agreement are for reference purposes only
and are to be given no effect in the construction or interpretation of this
Employment Agreement.
6
(C) Assignment.
This
Employment Agreement shall not be assignable by Executive without the prior
written consent of Company, and shall inure to the benefit of and be binding
upon Executive and his legal representatives.
(D) Governing
Law.
This
Employment Agreement shall be governed by and construed in accordance with
the
law of the State of New York applicable to agreements made and to be performed
in that State, without reference to its principles of conflicts of
law.
(E) Arbitration;
Consent to Jurisdiction.
Any
controversy or claim arising out of or relating to this Employment Agreement
including, without limitation, the interpretation or the breach thereof, shall
be settled by arbitration in the City, County and State of New York in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then obtaining, and judgment upon the award rendered by a panel
of
three (3) Arbitrators may be entered in any court having jurisdiction thereof.
Notwithstanding the foregoing, this agreement to arbitrate shall not bar either
party from seeking temporary or provisional remedies in any Court having
jurisdiction thereof. Company and Executive hereby consent and submit to the
personal jurisdiction of the United States District Court for the Southern
District of New York and any New York State court of competent jurisdiction
located in New York County, New York in any suit, action or proceeding (other
than as provided in the first sentence of this section) arising out of or
relating to this Employment Agreement.
(F) Notices.
All
notices, requests, demands and other communications (collectively, "Notices")
that are required or may be given under this Employment Agreement, shall be
in
writing, signed by the party or the attorney for that party. All Notices shall,
except as otherwise specifically provided herein to the contrary, be deemed
to
have been duly given or made: if by hand, immediately upon delivery; if by
telecopier or similar device, immediately upon sending, provided notice is
sent
on a business day during the hours of 9:00 a.m. and 6:00 p.m. E.S.T., but if
not, then immediately upon the beginning of the first business day after being
sent; if by Federal Express, Express Mail or any other overnight delivery
service, one day after being placed in the exclusive custody and control of
said
courier; and if mailed by certified mail, return receipt requested, five (5)
business days after mailing. All notices are to be given or made to the parties
at the following addresses (or to such other address as either party may
designate by notice in accordance with the provisions of this
section):
If
to
Company or Group at:
Millennium
Biotechnologies, Inc.
▇▇▇
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▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
▇▇▇-▇▇▇-▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
7
with
a
copy to:
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ PLLC
▇▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
If
to
Executive at:
▇▇▇▇
▇.
▇▇▇▇▇▇
3535
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
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(G) Enforceability.
If any
provision of this Employment Agreement is invalid or unenforceable, the balance
of this Employment Agreement shall remain in effect, and if any provision is
inapplicable to any person or circumstance, it shall nevertheless remain
applicable to all other persons and circumstances.
(H) Waiver.
The
failure of a party to this Employment Agreement to insist on any occasion upon
strict adherence to any term of this Employment Agreement shall not be
considered to be a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this Employment
Agreement. Any waiver must be in writing.
(I) Complete
Agreement.
This
Employment Agreement supersedes any prior or contemporaneous agreements between
the parties with respect to its subject matter, is intended as a complete and
exclusive statement of the terms of the agreement between the parties with
respect to its subject matter, and cannot be changed or terminated
orally.
(J) Indemnification:
In the
absence of the Company’s ability to provide Directors and Officers Insurance,
the Company will hereby indemnify and hold-harmless the Executive from any
claims or litigation which would normally protect the Executive under the
umbrella of a standard Directors and Officers Insurance policy
[signature
page follows]
8
IN
WITNESS WHEREOF,
the
parties have executed this Employment Agreement as of the date first above
written.
| MILLENNIUM BIOTECHNOLOIES GROUP, INC. | ||
| MILLENNIUM BIOTECHNOLOGIES, INC. | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ | |
|
▇▇▇▇▇ ▇. ▇▇▇▇ |
||
| Chief Executive Officer | ||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
|
▇▇▇▇ ▇. ▇▇▇▇▇▇ |
||
| Executive | ||
9