EMLOYMENT CONTRACT
Exhibit
10.50
EMLOYMENT
CONTRACT
This
Employment Contract (“Contract”) is entered into by and between Amarillo
Biosciences, Inc., a Texas corporation (“Employer”) and Xxxxxx X. Xxxxxxx
(“Employee”). ABI and its controlled subsidiaries shall be hereinafter
collectively referred to as “ABI Companies”. Employer hereby employs Employee,
and Employee accepts employment, on the following terms and
conditions.
ARTICLE
I
TERM
OF EMPLOYMENT
1.01.
By this
Contract, Employer employs Employee, and Employee accepts employment with
Employer starting September 10, 2006, and with such ABI Companies as Employer
shall designate, until this Contract shall have been terminated by either party
by the serving of three months’ advance, written notice of such termination upon
the other party.
ARTICLE
II
COMPENSATION
2.01.
As
compensation for all services rendered under this Contract, Employee shall
be
paid by Employer a salary of ONE HUNDRED SEVENTY FIVE THOUSAND DOLLARS
($175,000.00) per YEAR, payable at least monthly during the term of this
Contract. The amount paid is to be prorated for any partial employment period.
Furthermore, Employee recognizes that Employer may experience periodic cash
shortages, and in such event, Employee will accept partial (no more than 50%)
payment in Employer’s voting common stock, which stock shall be registered by
Employer on Form S-8, or other suitable registration statement.
ARTICLE
III
DUTIES
OF EMPLOYEE
3.01.
Employee
is employed as President, Chief Executive Officer and Chairman of the Board
of
Directors of Employer, and shall work at the corporate offices in Amarillo,
Texas. Employee shall perform the duties of as President, Chief Executive
Officer and Chairman of the Board of Directors, as such duties may be further
set fourth in the Bylaws of Employer, or by resolution of the Board of Directors
of Employer. Employee shall devote his entire productive time, ability,
attention and energies to the business of Employer during the term of this
Contract, and during such time, Employee shall not directly or indirectly render
any services of a business, commercial or professional nature to any other
person or organization, whether or not for compensation, without the prior
consent of the Board of Directors of Employer.
ARTICLE
IV
EMPLOYEE’S
OBLIGATIONS AS TO INSURANCE
4.01.
Employee
agrees to submit to physical examination as may be required for the obtaining
by
Employer of insurance on Employee’s life, and agrees to consent to the issuance
of a policy or policies of insurance on his life, such policies to be owned
by
Employer, and naming Employer as beneficiary. Upon termination of Employee’s
employment for any reason, and if requested by Employee, Employer shall assign
any such policy to Employee, so that Employee shall have the option of keeping
the policy in force at Employee’s expense. The forgoing notwithstanding,
Employer shall be entitled to retain the accumulated cash value of any such
policy.
ARTICLE
V
EMPLOYEE
BENEFITS
5.01.
If
Employer provides hospital, surgical, medical, dental, group life insurance,
or
other fringe benefits to its employees, or any of them, at any time during
the
term of this Contract, Employee shall be entitled to participate in such
benefits, on terms and conditions at least as favorable as those accorded to
other employees of Employer, subject to insurability.
ARTICLE
VI
REIMBURSEMENT
OF EXPENSES INCURRED BY EMPLOYEE
6.01.
Employee
is authorized to incur reasonable business expenses for promoting the business
of Employer, including expenditures for entertainment and travel. Employer
will
reimburse Employee for all such expenses upon Employee’s presentation of written
expense vouchers, itemizing such expenditures.
ARTICLE
VII
PROPERTY
RIGHTS OF PARTIES
7.01.
Employee
has had access to and become familiar with, and during the term of continued
employment, will continue to have access to and become familiar with, various
trade secrets, consisting of formulas, devices, secret inventions, processes,
compilations of information, records, and specifications owned by ABI Companies
and regularly used in the operation of ABI Companies. Employee shall not
disclose any such trade secrets directly or indirectly nor use them in any
way
either during the term of this Contract or at any time thereafter except as
required in the course of his employment. All files, records, documents,
drawings, specifications, equipment and similar items relation to the business
of ABI Companies, whether or not prepared by Employee, shall remain the
exclusive property of ABI Companies and shall not be removed from the premises
of Employer under any circumstances, except in pursuit of the trade and business
of ABI Companies.
7.02.
On the
termination of employment or whenever requested by Employer, Employee shall
immediately deliver to Employer all property in Employee’s possession or under
Employee’s control belonging to ABI Companies, including but not limited to all
accounting records, computer terminals and tapes, disks, or other data storage
mechanisms, accounting machines, and all office furniture and fixtures, supplies
and other personal property in the possession or under the control of Employee,
in good condition, ordinary wear and tear excepted, and including without
limitation all correspondence files, research date, and patent information
or
data, of every sort.
7.03. With
the
exception of inventor royalties currently owned by Employee, arising out of
his
previous employment by the University of Illinois and Texas A&M University,
and relating to certain royalty payments receiv-able by Employee with respect
to
certain licenses heretofore granted by said Universities, Employee hereby
promises and agrees to convey and assign to Employer any and all other rights
or
interests he may now have in and to trade secrets, formulas, devices,
inventions, processes, patents, applica-tions, continuations, copyrights,
trademarks, compilations of information, records, specifications, rights,
interests and data of every other sort, affecting or pertaining directly or
indirectly to the business of ABI Companies as now conducted, or to the patents,
trade secrets, and other rights not owned by ABI Companies. In further
clarification of the preceding sentence, it is not Employee's intention to
retain individual-ly any such rights or interests, other than those heretofore
specifically excepted. Except for the rights heretofore excepted, Employee
does
not claim any rights or interests in and to trade secrets, formulas, devices,
inventions, processes, patents, applications, continuations, copyrights,
trade-marks, compilations of information, records, specifications, rights,
interests and data of any other sort, affecting or pertaining directly or
indirectly to the business of ABI Companies as now conducted, or to the patents,
trade secrets, and other rights now owned by ABI Companies.
7.04. Employee
agrees that he will promptly and fully inform and disclose to Employer all
inventions, designs, improvements and discoveries that Employee may have during
the term of this Contract that pertain or relate to the business of ABI
Companies or to any experimental work carried on by ABI Companies, whether
conceived by Employee alone or with others and whether or not conceived during
regular working hours. All such inventions, designs, improvements and
discoveries shall be the exclusive property of Employer. Employee shall assist
ABI Companies in obtaining patents on all such inven-tions, designs,
improvements and discoveries deemed patentable by ABI Companies, and shall
execute all documents and do all things necessary to obtain such patents for
Employer or ABI Companies.
7.05.
It is
contemplated that Employee in the course of his employment will be engaged
in
work involving various patents and secret processed owned by ABI Companies.
All
experiments, developments, formulas, patterns, devices, secret inventions and
compilations of information, records and specifications regarding such matter
are trade secrets, which Employee shall not disclose directly or indirectly
to
anyone other than ABI Companies or their agents, or use in any way either during
the
term
of
this Contract or at any time after the termination of this Contract, except
as
required in the course and scope of his employment.
7.06.
During
the term of this Contract, Employee shall not directly or indirectly either
as
an employee, employer, consultant, agent, principal, partner, stock holder,
corporate office, director, or in any other individual or representative
capacity engage or participate in any business that is in competition in any
manner whatsoever with the business of ABI Companies, excluding
any cattle derived dietary supplements;
provided, however, that Employee may without restriction invest in
professionally managed mutual funds and Employee may purchase, own and sell
stock or other securities, as long as Employee is not directly or indirectly
through one or more intermediaries in control of or controlled by or under
common control with any such company. Furthermore, upon the termination of
this
Contract, Employee expressly agrees not to engage or participate directly or
indirectly in any business that is in competition with the business of ABI
Companies, for a period of three (3) years; and further provided, that no
business will be considered to be in competition with ABI Companies unless
its
business relates to the manufacture, sale, testing or development of products
containing alpha
interferon.
Employer and Employee recognize and agree that ABI Companies may obtain or
develop additional technologies from time to time, and if that is the case,
Employer may expand the terms of this non-competition provision by giving
written notice to Employee of the additional technologies that are to be
protected.
7.07.
In the
event of a breach of Employee of any provisions of this Article VII, the parties
hereto agree that Employer, in addition to any other remedies to which Employer
may be entitled at law, shall be entitled to the remedy of specific performance,
it being understood and agreed by the parties hereto that damages may be
difficult to ascertain, and that an award of damages would in all probability
not sufficiently compensate Employer for any breach of Employee of such
provisions. ABI Companies are intended third-party beneficiaries of the
provisions of this Article VII.
ARTICLE
VIII
STOCK
OPTION
8.01.
Employer
hereby grants to Employee non-transferable stock options to purchase 400,000
shares of Employer’s voting common stock, subject to the terms and conditions
hereinafter set forth in this Article VIII. Where required by applicable laws
or
regulation, or by administrative necessity, the Board of Directors of Employer
may prescribe additional terms and conditions regarding the issuance and
administration of the stock option, as long as such additional terms and
conditions do not conflict with the terms and conditions hereinafter set
forth.
8.02.
The
options granted pursuant to Section 8.01 above, shall be exercisable as
follows:
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a.
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as
to 100,000 shares, between September 10, 2007 and September 9, 2012,
inclusive;
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b.
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as
to 100,000 shares, between September 10, 2008 and September 9, 2013,
inclusive; and
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| c. |
as
to 100,000 shares, between September 10, 2009 and September 9, 2014,
inclusive; and
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| d. |
as
to 100,000 shares, between September 10, 2010 and September 9, 2015,
inclusive.
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The
exercise price for all options shall be the closing price of ABI stock on
September 8, 2006.
The
foregoing notwithstanding, no options which are not already theretofore
exercisable shall become exercisable at any time after the termination of
Employee’s full time active employment with Employer.
8.03.
In the
event of death or complete disability of Employee, or a voluntary termination
of
employment (which shall include the resignation of Employee, or the giving
of a
notice of termination of this Contract, or a successor or amended employment
contract, by Employee pursuant to Section 1.01, above), Employee (or if
applicable, Employee’s estate or personal representative) shall have a period of
sixty (60) days within which to exercise any matured (exercisable) options
which
have not theretofore been exercised; and after the expiration of said sixty
(60)
day period, such options shall expire and be of no further force or effect.
In
the event of notice of a pending or completed Change in Control, as hereinafter
defined, all options held by Employee under this Employment Contract shall
be
immediately exercisable, and Employee shall thereupon have a period of sixty
(60) days within which to exercise any or all of such options; and after the
expiration of said sixty (60) day period, such options shall expire and be
of no
further force or effect.
For
purposes of this Agreement, “Change in Control” shall mean when any entity,
person or group other than Employer or a Subsidiary of Employer or Hayashibara
Biochemical Laboratories, Inc. or an affiliate thereof acquires shares of
Employer in a transaction or series of transactions that result in such entity,
person or group directly or indirectly owning beneficially fifty-one percent
(51%) or more of Employer’s outstanding shares of voting common
stock.
8.04.
Stock for Stock Exercise.
Where
Employee so elects by written notification to Employer prior to or
simultaneously with the exercise of one or more options, the exercise may be
accomplished on a “stock for stock” basis as follows: in lieu of payment to
Employer of the cash exercise price with respect to the options exercised,
there
shall be calculated the number of shares that could be purchased for
the
cash
exercise price; and that number of shares shall be deducted from the shares
issuable to Employee, with respect to that option exercise.
8.05.
The
stock
options herein granted are not qualified or incentive stock options within
the
meaning of the Internal Revenue Code of 1986, or successor provisions. Employer
has provided no tax advice to Employee with respect to the taxation of the
grant
and/or exercise of such options, and/or the disposition of the underlying
shares, and Employee has been advised to consult with his own tax advisor
regarding such matters. Furthermore, the underlying shares will not be
registered with the SEC, and will therefore be “Restricted Securities” within
the meaning of Rule 144, promulgated under the Securities Act of 1933. Employer
cannot insure that its securities will continue to qualify for sale or resale
under Rule 144, and in the event Rule 144 should at some time be no longer
available with regard to such sales, Employee might find it difficult or
impossible to sell the option shares.
ARTICLE
IX
ENTIRETY
OF AGREEMENT; AMENDMENTS; SURVIVAL
9.01.
This
Contract supersedes all other agreements, either oral or in writing, between
the
parties to this Contract with respect to the employment of Employee by Employer.
This Contract contains the entire understanding of the parties and all of the
covenants and agreements between the parties with respect to such
employment.
9.02.
This
Contract may be amended only by an instrument signed in writing by both parties;
and provided further, that no amendment may be executed on behalf of Employer,
except pursuant to a resolution of the Board of Director of
Employer.
9.03.
The
following provisions shall survive the expiration of this Agreement: ARTICLES
VII, VIII, and IX.
IN
WITNESS WHEREOF, this Contract is executed by the undersigned as of this 10th
day of September, 2006.
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EMPLOYEE:
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EMPLOYER:
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AMARILLO
BIOSCIENCES, INC.
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/s/
Xxxxxx X. Xxxxxxx
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/s/
Xxxx X. Xxx
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Xxxxxx
X. Xxxxxxx
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Xxxx
X. Xxx, VP, CFO
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