Exhibit 10.1
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT made this 25th day of January, 2005, by and
between XXXXXXXXX XXXXXXX XXXXXXX, an individual residing at 00 Xxx Xxxxx Xxxxx
Xxxx, Xxxxxxx, Xxx Xxxxxx 00000 ("Employee") and THE SAGEMARK COMPANIES LTD., a
New York corporation with its principal offices at 1285 Avenue of the Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company").
W I T N E S S E T H :
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WHEREAS, the Company is principally engaged in establishing,
developing, owning, administering and operating positron emission tomography
outpatient medical diagnostic imaging facilities (the "PET Centers") throughout
the United States through one or more of its subsidiaries; and
WHEREAS, the Company desires to engage the services of Employee as its
Vice-President of Operations pursuant to the terms of a written employment
agreement; and
WHEREAS, Employee is willing to accept such employment and enter into
such agreement, all on and subject to the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the mutual covenants herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby unconditionally acknowledged, the parties hereto do hereby agree as
follows:
1. Employment. During the Term (hereinafter defined) of this
Agreement, the Company hereby employs Employee as its Vice-President of
Operations, and Employee hereby agrees to accept such employment, upon and
subject to the terms and conditions set forth in this Agreement.
2. Employee's Duties and Responsibilities.
2.1. Employee will perform all of the services customarily
associated with the position of Vice-President of Operations during the Term of
this Agreement, subject to the policies and job description established by the
Board of Directors of the Company or the Chief Executive Officer of the Company.
Such services will include, but not be limited to, providing all start-up and
continuing operations and management, supervisory services for each of the
Company's present and future PET Centers, developing, implementing and
supervising all aspects of marketing plans, programs and strategies for the
Company and each of the Company's present and future PET Centers, including
developing organizational structures and policies for purposes of increasing
patient volumes and maximizing insurance reimbursement for the services offered
by such PET Centers, the selection and training of all administrative, marketing
and operational personnel engaged by the Company for each of its PET Centers,
including recommending such personnel for employment at each of such PET
Centers, meeting with physicians and strategic partners of each of the Company's
PET Centers, when necessary, assistance with reimbursement and billing and
collection matters and procedures with respect to the Company's PET Centers,
assisting with the design, licensing and accreditation of each of the Company's
PET Centers, and all other services reasonably relating to the foregoing
activities. Employee also hereby agrees to perform such other services and
assume such other responsibilities consistent with such positions and job
description as the Board of Directors of the Company and/or the Chief Executive
Officer may reasonably request of her from time to time during the Term hereof,
including providing some or all of the aforementioned services to one or more of
the Company's subsidiaries or affiliates (including Premier P.E.T. Imaging
International, Inc.). Employee shall report to the Company's Chief Executive
Officer with respect to the performance of her services hereunder.
2.2. Employee agrees to devote all of her business time,
attention and energy to the performance of her services under this Agreement
during the Term hereof and shall perform such services diligently, in good faith
and in a manner consistent with the best interests of the Company. Employee
further agrees to use her best efforts at all times during the Term hereof to
preserve, protect, enhance, and maintain the trade, business and goodwill of the
Company and its subsidiaries.
2.3. Employee shall perform her services wherever her
services are reasonably required. Employee acknowledges that she will be
required to travel to various locations throughout the United States in
performing her duties and responsibilities under this Agreement. Employee will
not be required to relocate her current residence at any time during the Term
hereof.
2.4. During the Term of this Agreement, Employee shall
provide the Company with notice of all proposed transactions or opportunities
that may be brought to her attention or otherwise introduced to her in the
health care field, including the positron emission tomography field, promptly
after the Employee's knowledge or receipt of notice thereof and the Company
shall have the exclusive right as between the Company and Employee to take
advantage or otherwise act upon any of such proposed transactions or
opportunities.
3. Compensation. In consideration of the performance of
Employee's services under this Agreement during the Term hereof, the Company
shall pay Employee the following compensation:
3.1. An annual base salary of One Hundred Forty Thousand
Dollars ($140,000) during each year of the Term hereof (the "Base Salary"), such
salary to be paid to Employee in two equal monthly installments on the fifteenth
and last day of each month during the Term hereof (less all applicable
withholding and other payroll tax deductions).
3.2. The Company shall also issue to Employee, in further
consideration of the performance of the services to be rendered by Employee
under this Agreement, a five year qualified incentive stock option to purchase
up to Thirty-Five Thousand (35,000) shares of the common stock of the Company at
a per share exercise price equal to the closing price of the publicly traded
shares of the common stock of the Company on the date hereof (the "Option"). The
shares underlying the Option will be subject to vesting and, accordingly, the
Option will provide that Employee shall be entitled to exercise the Option to
the extent of Seventeen Thousand Five Hundred (17,500) shares on the last day of
each of the first two years of the Term hereof (i.e., all 35,000 shares will be
fully vested at the end of the first two years of the five year term of the
Option), provided that Employee is then in the employ of the Company.
3.3. The Company shall also pay to Employee, a monthly
automobile allowance of $450, plus tolls, such payments to be made to Employee
on the first day of each month during the Term hereof.
3.4. The Company shall, in addition to the Base Salary and
the Option and the automobile allowance, reimburse Employee for all ordinary and
necessary out-of-pocket expenses incurred by her in the performance of her
services under this Agreement, subject to compliance with the Company's policies
and procedures in effect from time to time with respect thereto and upon receipt
by the Company of invoices or other documentation in support thereof. Such
expenses for which Employee shall be entitled to reimbursement shall include,
but not be limited to, authorized business travel, entertainment and lodging
expenses.
3.5. As incentive compensation to Employee for her
services hereunder, Employee shall be entitled to receive, (i) on the date
during the Term hereof that each of the Company's future PET Centers (other than
the Company's PET Center in East Setauket, New York) commences its operations
(i.e., performs a positron emission tomography imaging scan on a patient for
compensation), a bonus payment of Five Thousand Dollars ($5,000), and (ii) on
the date that each of such PET Centers achieves positive cash flow, an
additional bonus payment of Five Thousand Dollars ($5,000) and a warrant to
purchase Five Thousand (5,000) shares of the Company's common stock during a
period of five (5) years at an exercise price equal to the closing price of the
Company's publicly traded shares of common stock on the date of issuance of such
warrant (each such warrant will be fully vested and immediately exercisable on
the date of issuance). In addition, Employee shall be entitled to receive any
such additional bonus or incentive compensation as may be determined by the
Company's Board of Directors or its Chief Executive Officer.
4. Employee Benefits.
4.1. Employee shall be entitled to five weeks of paid
vacation during each year of the Term hereof (except that, during each of the
first two years of the Term hereof, Employee will take three weeks of paid
vacation and the Company will pay Employee for an additional two weeks of
vacation even though Employee will work for the Company during such period and
be paid for such three weeks). At least one of the three weeks of vacation will
be taken by Employee in single, non-consecutive days. Employee hereby agrees
that she will schedule such vacations upon reasonable advance notice to the
Company so as to avoid conflicts with any of its material activities.
4.2. Employee shall be entitled to participate in all
benefit programs established by the Company during the Term hereof for its
employees, including, without limitation, any retirement, pension, profit
sharing, insurance, hospitalization, disability or other employee benefit plan
of any type (including, without limitation, any incentive, profit sharing, bonus
or stock option plan) which may hereafter be adopted by the Company for its
employees, it being understood that such entitlements are exclusive of any of
such fringe benefits that may be provided to any other employee or executive of
the Company pursuant to a separate employment agreement or arrangement between
the Company and any such employee or executive.
5. Term.
5.1. The term of this Agreement shall commence on the date
of the execution of this Agreement and shall expire on January 31, 2008, subject
to earlier termination as hereinafter provided in Paragraph 5.2 hereof (the
"Term"). Notwithstanding the foregoing, the Term of this Agreement shall be
automatically renewed for successive one year periods on January 31, 2008, or on
the last day of any twelve month renewal period thereafter (in each case, the
"Expiration Date"), unless either party hereto gives to the other a notice of
intent to terminate this Agreement on the Expiration Date, which notice must be
given at least 180 days prior to the Expiration Date. If this Agreement is not
renewed, as aforesaid, the Company shall pay to Employee in a lump sum on the
Expiration Date an amount equal to six months of Employee's Base Salary.
5.2. Pursuant to the provisions of Paragraph 3.1 above,
the Term of this Agreement shall terminate on the earlier to occur of any of the
following events:
(a) The death of Employee; or
(b) The Disability (as defined below) of
Employee. For purposes hereof, the term "Disability" shall mean a determination
by a physician designated by the Company that Employee suffers from any illness
or other physical or mental impairment that prevents or prevented Employee from
performing a material portion of Employee's duties for a period of sixty (60)
consecutive days in any twelve month period during the Term hereof or for a
total of one hundred twenty (120) days (whether or not consecutive) during the
Term hereof; or
(c) The failure and/or refusal of Employee to
perform any material duties or responsibilities of her position and/or her
services or other material obligations under this Agreement and/or any breach of
any representation, warranty or covenant of Employee under this Agreement,
provided that Employee is given notice of such breach by the Company and fails
to cure any such breach within thirty (30) days after such notice; or
(d) A conviction of Employee for a felony or
other crime including, without limitation, embezzlement, fraud or
misappropriation of funds; or
(e) Employee's willful malfeasance or fraud in
connection with Employee's employment hereunder; or
(f) By the Company upon a Change of Control (as
defined herein). For purposes hereof, the term "Change of Control" shall mean
the sale by the Company or Premier P.E.T. Imaging International, Inc., the
Company's wholly owned subsidiary, of 50% or more of the outstanding capital
stock of either of them or the sale by either of them of all or substantially
all of their assets; or
(g) The delivery of notice to the Company by
Employee of the termination of this Agreement for any breach or default by the
Company of any of its representations, warranties, obligations or covenants
under this Agreement; provided that any such breach or default is not cured
within thirty (30) days after the Company's receipt of such notice from
Employee; or
(h) The delivery of notice to Employee by the
Company terminating this Agreement, without cause.
5.3. Upon any termination of this Agreement pursuant to
this Section (other than a termination under Sections 5.2(d) or 5.2(e) hereof),
the Company shall pay to Employee any unpaid Base Salary, automobile allowance,
and incentive compensation which are accrued and unpaid through the effective
date of any such termination, any benefits, if any, owed to Employee under any
plan or benefit program provided for pursuant to Section 4 hereof which is in
effect on the date of such termination and any severance compensation which is
expressly provided for under any of the provisions of this Agreement. Except as
provided herein, the Company shall have no further obligations or liabilities
hereunder.
5.4. In the event that this Agreement is terminated
pursuant to Sections 5.2(f) or 5.2(h), the Company shall pay to Employee
severance compensation in an amount equal to twelve (12) months of Employee's
Base Salary, which severance compensation shall be paid in a lump sum on the
effective date of any such termination.
6. Confidentiality and Non-Disclosure Covenant. During the Term
of this Agreement, Employee hereby acknowledges that she will obtain and be
entrusted with unpublished and material confidential and proprietary information
relating to the Company's present and proposed business and operations
including, without limitation, financial information relating to the Company's
present and proposed business and operations, the cost and pricing of the
Company's services, proposed acquisitions of the Company, and the terms of all
material agreements to which the Company is a party. All of such information
that may be obtained by Employee shall, for purposes hereof, be referred to
herein as "Confidential Information". Employee hereby agrees that, unless the
Confidential Information becomes publicly known through legitimate origin not
involving any improper act or omission of Employee, neither she, nor any entity
or person owned or controlled directly or indirectly by her, shall, during the
Term of this Agreement or thereafter, use for her own benefit or for the benefit
of others for any purpose or in any manner whatsoever, divulge to any person,
firm, corporation or other entity or otherwise publish or disclose any
Confidential Information (except as necessary in connection with the performance
of Employee's services under this Agreement). Notwithstanding the foregoing,
Employee shall not be in breach of this covenant with respect to any use or
disclosure of any Confidential Information by her which is or becomes available
in the public domain or is required to be disclosed as a result of any legal
process served upon her in any judicial or administrative proceeding or was
obtained by Employee from a third party without such third party's breach of
agreement or obligation of trust. For purposes hereof (and for Section 7
hereof), the term "Company" shall include both the Company and its subsidiaries
and affiliated entities.
7. Non-Competition; Non-Solicitation.
7.1. Employee acknowledges and recognizes the highly
competitive nature of the business and proposed business of the Company and
hereby agrees that, during the Term hereof and for a period of one year after
the expiration or any earlier termination of the Term of this Agreement (such
period to be referred to hereinafter as the "Applicable Period"), she will not,
directly or indirectly, on her own behalf or in the service of or on behalf of
others, whether as an officer, director, stockholder, partner, trustee,
principal, employee, consultant, agent, or owner of any capital stock,
partnership interest or other interest in any corporation, partnership or other
entity, or in any other capacity, own an interest in, perform any services or
conduct any activity for or on behalf of any entity which is engaged in the
ownership, operation, licensing, joint venture or similar arrangement, or
management of a medical diagnostic positron emission tomography imaging facility
which is located or provides services to customers within an area consisting of
the greater of a twenty (20) mile radius of any PET Center which is owned and/or
operated, in whole or in part, by the Company (for these purposes to include any
parent, subsidiary or affiliate thereof) (a "Facility") or in any county in
which there is a Facility (a "Precluded Business Activity"). Employee
acknowledges that, due to the nature of the Company's business, it is essential
to provide for as broad a geographical limitation as possible with respect to
the aforementioned covenant inasmuch as the Company will make substantial
capital investments and commitments for each of its aforementioned PET Centers.
Without limiting the generality of the foregoing, it is expressly understood and
agreed that although Employee and the Company consider the restrictions
contained in this Section 7.1 to be reasonable, the Employee agrees that in the
event it is finally judicially determined by a court of competent jurisdiction
that the specified time period or geographical area or scope of the foregoing
restriction is unreasonable, arbitrary, or against public policy, contrary to
law, invalid and unenforceable, the remaining provisions of this Agreement
(including the remaining provisions of this Section) shall not be rendered void,
shall not be affected thereby and shall remain in full force and effect and the
provisions hereof which are the subject of any such judicial determination shall
be deemed amended to apply to any such lesser time period, geographical area, or
scope which is judicially determined or indicated to be reasonable,
non-arbitrary and not violative of public policy, not contrary to law, invalid
and/or unenforceable and such provisions, as modified, may be enforced by the
Company against the Employee in accordance with the terms hereof.
Notwithstanding the foregoing, nothing contained in this Section is intended to
nor shall preclude the ownership by Employee of not more than one (1%) percent
of the outstanding securities of any publicly owned corporation or other entity
engaged in a Precluded Business Activity, provided that such ownership is solely
for investment purposes and is not coupled with any working relationship between
Employee and such corporation or entity.
7.2. Employee will not, at any time during the Term
hereof, or within three (3) years after the Expiration Date, directly or
indirectly, (i) solicit the business of any client or customer of the Company
for purposes of utilizing positron emission tomography procedures or services,
or (ii) solicit, interfere with, or endeavor either to cause any employee,
agent, customer or supplier of the Company to leave his or her employment with
the Company, or terminate its relationship with the Company, or (iii) induce or
attempt to induce any such employee, agent, customer or supplier to breach any
employment agreement or other agreement or arrangement that such employee,
agent, customer or supplier may have with the Company.
7.3. Employee hereby acknowledges that the provisions of
Section 6 and of this Section 7 are necessary for the protection of the
Company's business and goodwill and are considered by Employee to be fair and
reasonable. Employee further acknowledges that she has fully and carefully
reviewed, considered and understands all of the restrictions imposed upon her
under Section 6 and this Section 7. Accordingly, Employee hereby acknowledges
and agrees that in the event of any actual or threatened breach of the
provisions of Section 6 and/or this Section 7, there will be no adequate remedy
at law for any such breach or threatened breach and that any such breach or
threatened breach may cause irreparable harm to the Company and, therefore,
Employee hereby consents in any such instance to the granting of injunctive or
other equitable relief to the Company, as a non-exclusive remedy, in any Federal
or state court located in New York County, New York or any other court of
competent jurisdiction selected by the Company, without the necessity of showing
any actual damage or that monetary damages would not provide an adequate remedy
at a law or posting a bond thereof. Furthermore, the parties hereto acknowledge
and agree that the provisions of Sections 6 and 7 of this Agreement shall
survive the termination or expiration of this Agreement.
8. Representations and Warranties. The Company and Employee
hereby represent and warrant to each other as follows:
8.1. All action on the part of the Company and Employee
necessary for the authorization, execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby, has been
taken and this Agreement constitutes a valid and legally binding obligation of
the Company and Employee, as applicable, enforceable in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other laws affecting generally the enforcement of
creditors' rights and by general principles of equity.
8.2. The authorization, execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, will not result in any violation or be in conflict with or
constitute, with or without the passage of time and giving of notice, a default
under any provision of any instrument, judgment, order, writ, decree or
agreement to which the Company or Employee, as applicable, is a party or by
which it or she is bound.
8.3. There is no action, suit, proceeding, or
investigation pending, or to the knowledge of the Company or Employee, as
applicable, currently threatened against the Company or Employee, as applicable,
in any way relating to the validity of this Agreement or the right of the
Company or Employee, as applicable, to enter into or to consummate this
Agreement and/or perform and/or comply with their respective services and
obligations hereunder.
9. Miscellaneous.
9.1. This Agreement constitutes the sole and entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, representations, warranties, statements,
promises, arrangements and understandings, whether oral or written, express or
implied, between the parties hereto with respect to the subject matter hereof.
This Agreement may not be changed or modified except by an instrument in writing
signed by the party to be bound thereby.
9.2. All notices, consents, requests, demands and other
communications required or permitted to be given under this Agreement shall be
in writing and delivered personally, receipt acknowledged, or mailed by
registered or certified mail, postage prepaid, return receipt requested,
addressed to the parties hereto as follows (or to such other address and/or to
such other persons as either of the parties hereto shall specify by notice given
in accordance with this provision):
(a) If to the Company:
The Sagemark Companies Ltd.
1285 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxxxxx X. Xxxxxxx, Chief
Executive Officer
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
00 Xxxx Xxxxx Xxxx
Xxxxxxx, Xxx Xxxx 00000
(b) If to Employee:
Xxxxxxxxx Xxxxxxx Xxxxxxx
00 Xxx Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Except as otherwise expressly provided elsewhere in this Agreement, all
such notices, consents, requests, demands and other communications shall be
deemed given when personally delivered as aforesaid, or, if mailed as aforesaid,
on the third business day after the mailing thereof or on the day actually
received, if earlier, except for a notice of a change of address which shall be
effective only upon receipt.
9.3. Neither party hereto may assign this Agreement or
their respective rights, benefits or obligations hereunder without the written
consent of the other party hereto. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
heirs, personal representatives, administrators, executors and permitted
assigns. Nothing contained herein is intended to confer upon any person or
entity, other than the parties hereto, and their respective successors, heirs,
personal representatives, administrators, executors or permitted assigns, any
rights, benefits, obligations, remedies or liabilities under or by reason of
this Agreement.
9.4. No waiver of this Agreement shall be effective unless
in writing and signed by the party to be bound thereby. The waiver by either
party hereto of a breach of any provision of this Agreement, or of any
representation, warranty, or covenant in this Agreement by the other party
hereto, shall not be construed as a waiver of any subsequent breach or of any
other provision, representation, warranty, or covenant of such other party,
unless the instrument of waiver expressly so provides.
9.5. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York with respect to contracts made
and to be fully performed therein, without regard to the conflicts of laws
principles thereof and shall be enforced solely in the Federal and state courts
located in the City, County and State of New York (or any other court of
competent jurisdiction selected by the Company). By her execution hereof,
Employee hereby consents and irrevocably submits to the in personam jurisdiction
of such Federal and state courts (or such other courts of competent jurisdiction
selected by the Company) and agrees that any process in any action commenced in
any such court under this Agreement may be served upon her personally, by
certified or registered mail, return receipt requested, or by Federal Express or
other courier service, with the same full force and effect as if personally
served upon her in New York City (or in any such other city and/or county where
any such other courts are located). Each of the parties hereto hereby waives any
claim that the jurisdiction of any such court is not a convenient forum for any
such action and any defense of lack of in personam jurisdiction with respect
thereto.
9.6. Employee hereby agrees that, at any time and from
time to time during the Term hereof, upon the reasonable request of the Company,
she will do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, such further acts, deeds, assignments, transfers,
conveyances and assurances as may be reasonably required to more effectively
consummate this Agreement and the transactions contemplated thereby or to
confirm or otherwise effectuate the provisions of this Agreement.
9.7. If any term or provision of this Agreement, or the
application thereof to any person or circumstance, is finally determined by a
court or arbitration tribunal to any extent to be illegal, invalid or
unenforceable, the remainder of this Agreement, or the application of such term
or provision to persons or circumstances other than those as to which it is held
illegal, invalid or unenforceable, shall not be affected thereby and each term
and provision of this Agreement shall be valid and shall be enforced to the
fullest extent permitted hereunder and by law.
9.8. Employee acknowledges that she is entering into this
Agreement of her own free will and accord, and with no duress, and Employee
represents that she has been fully advised by competent counsel in entering into
this Agreement, that Employee has read this Agreement, and that Employee
understands this Agreement and its legal consequences. No parole or other
evidence may be admitted to alter, modify or construe this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the year and date first above written.
THE SAGEMARK COMPANIES LTD.
/s/ XXXXXXXX X. XXXXXXX
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President and Chief Executive Officer
/s/ XXXXXXXXX XXXXXXX LONGTON
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Xxxxxxxxx Xxxxxxx Xxxxxxx
