EMPLOYMENT CONTRACT
EXHIBIT
10.2
THIS
AGREEMENT
made
effective from the first (1st)
day of
November, 2006, BETWEEN:
QUICK-MED
TECHNOLOGIES, INC.,
a
corporation existing under the laws of the State of Nevada, with its head office
in the City of Gainesville, in the State of Florida (hereinafter referred to
as
the "Company")
-
and
-
XXXXXX
X. XXXXXXXX,
an
individual resident in the City of Bedford, in the State of Massachusetts
(hereinafter referred to as the "VP RD&C " or “Xxxxx
Xxxxxxxx”).
WHEREAS
the VP
RD&C has previously served, and continues to serve, the Company under
contract as a Consultant, and formerly serving as the Acting Vice President
of
Research, Development and Commercialization (VP RD&C), of the
Company;
AND
WHEREAS
the
Board of Directors of the Company recognizes the VP RD&C will continue to
make valuable contributions to development of products and their
commercialization as well as the productivity and profitability of the Company,
that the VP RD&C has gained expertise relating to the business of the
Company and that it is in the best interests of the Company to secure the future
employment of the VP RD&C with the Company pursuant to the provisions of
this Agreement;
AND
WHEREAS
the
Company and the VP RD&C have agreed employment of the VP RD&C by the
Company will be in accordance with the provisions of this Agreement, to continue
as VP R&D, with the VP RD&C to remain the Company’s Vice President of
R&D and Commercialization”;
AND
WHEREAS
in order
to satisfy management continuity concerns of the Company’s lenders, financial
promoters and potential strategic partners and clients, a long-term employment
contract with the VP RD&C is critical to the Company;
NOW
THEREFORE,
in
consideration of the mutual covenants and agreements hereinafter contained,
the
parties hereto covenant and agree, each with the other, as follows:
| 1. |
Definitions
|
| 1.1. |
In
addition to terms defined elsewhere in this Agreement, the following
terms
shall have the following meanings:
|
"Common
Shares"
means
shares of common voting stock of the Company which are entitled to one vote
per
share at any meeting of the Company’s shareholders;
"Compensation"
means
salary and all benefits the VP RD&C is receiving or entitled to at the time
of Change of Control, including but not limited to bonuses, common stock, stock
options, pension benefits, medical plan benefits, vacation pay, personal day
and
insurance premiums.
"Dollars"
or
"$"
means
lawful currency of the United States of America;
Revenue"
means
new sources and levels of revenue added after the effective date of this
Agreement, including all sales or licensing revenues, cash received via research
agreements, revenues from options to license or similar funds received from
third parties and/or entities that the Company has established relationships
with since its inception, with all such revenues to be determined in accordance
with U.S. generally accepted accounting principles;
"Person"
includes an individual, partnership, corporation and any other entity or
association;
"Termination
Date"
means:
| (a) |
the
effective date that the VP RD&C 's employment with the Company is
terminated by the Company; or
|
| (b) |
the
date the VP RD&C provides to the Company written notice of election to
treat the VP RD&C's employment as terminated as contemplated by
subsections 9.1(b) and (c) of this Agreement;
and
|
"this
Agreement"
and
terms such as "hereof",
"herein"
and
similar expressions mean this Agreement, as amended, supplemented or modified
in
writing from time to time.
| 2. |
Position;
Title
|
| 2.1. |
The
Company agrees to employ Xxxxx Xxxxxxxx during the term of the Agreement
as its VP RD&C, with power and authority to render services for and on
behalf of the Company to lead the development of new technologies,
new and
improved products and to assist in the development of new business
opportunities as well as to oversee on a daily basis the efficient
management of all aspects of the Company's technical operations including
all staff (employees and consultants), vendors and customers, new business
development, patents and to undertake such other duties as may from
time
to time be assigned to or vested in the VP RD&C by the Board of
Directors, provided, however, that the Company’s Board of Directors shall
not impose any employment constraints or duties which would require
the VP
RD&C to violate any law, statutes, ordinance, rule or regulation now
or hereinafter in effect.
|
| 2.2. |
The
VP RD&C agrees, during the term of this Agreement, to devote his full
working time, attention and abilities to the business and affairs of
the
Company, to serve the Company faithfully and to use his best efforts
to
promote the Company’s interests.
|
| 3. |
Remuneration
|
| 3.1. |
The
Company agrees to pay Xxxxx Xxxxxxxx a base salary of One Hundred Thirty
Two Thousand ($132,000.00) Dollars per annum, payable in equal semimonthly
payments on the 15th
and the end of each month hereafter.
|
| a. |
The
annual base salary will be reviewed and revised by the Compensation
Committee and linked to his performance (as Vice President of Research
Development and Commercialization as outlined in Appendix A), and the
performance of the Company.. The Committee may link some of the annual
increase or bonus to the Shareholders interests by allocating a portion
of
the compensation to performance-based equity or stock
options.
|
| b. |
Annual
adjustments to the compensation will reflect the Company’s success in
adding new Revenue streams and increases in Shareholder value The Company
agrees to complete an annual review, at the end of the fiscal year,
of the
Officer's base salary, stock options and other executive compensation
programs and at that time the Compensation committee will recommend
to the
Board of Directors adjustments based on the Company’s
performance.
|
| 3.2. |
Within
twelve
(12) months following the effective date of this Agreement, the Company
will pay Xxxxx Xxxxxxxx a signing bonus of $100,000.00 cash to be vested
as follows: (1) $25,000 on the effective date of the Agreement; (2)
$25,000 on February 1st, 2007, if VP RD&C has continuously provided
services to the Company to that date; (3) $25,000 on May 1st, 2007,
if VP
RD&C has continuously provided services to the Company to that date;
and (4) $25,000 on August 1st, 2007, if VP RD&C has continuously
provided services to the Company to that date. In addition, the Company
will issue to Xxxxx Xxxxxxxx, in his personal name, 45,000 shares of
restricted Common Stock. Cash payments may be deferred over a period
of
time not to exceed 24 months in concert with the company’s efficient cash
flow..
|
| 3.3. |
The
Company currently has no executive benefits plan and the VP RD&C is
NOT entitled to benefits hereunder. However, should the Company adopt
an
executive benefits plan in future (and during the term of this Agreement),
the VP RD&C shall become entitled to participate in the Company's
executive benefits plan as may be in effect at any given time, subject
to
satisfying any insurability requirements established by the carrier
or
carriers providing the benefits. In the meantime, the VP RD&C is
entitled to various insurance benefits in accordance with the Company’s
applicable insurance contracts and policies and applicable state law.
These benefits shall include:
|
| · |
Health
insurance;
|
| · |
If
the VP RD&C has a comparable plan, the Company will pay for that plan
instead of the Company’s plan;
|
| · |
Disability
insurance; and
|
| 3.4. |
The
VP RD&C shall be entitled to participate in the Supplemental Executive
Retirement Benefit and Deferred Compensation Agreement if one is
established by the Company.
|
| 3.5. |
The
VP RD&C shall be entitled to ten (10) sick days paid time, for each
calendar year beginning January 1st,
2006, which can be accumulated. All requests for sick days shall be
made
by the VP RD&C in accordance with the Company’s policy in
effect.
|
| 4. |
Expenses
|
| 4.1. |
The
Company agrees to reimburse the VP RD&C for all travel and other
expenses actually and properly incurred by the VP RD&C in connection
with the VP RD&C's duties. The VP RD&C shall provide statements
and vouchers for all such expenses in accordance with the Company's
reimbursement policy as established from time to
time.
|
| 4.2. |
The
Company shall provide for an annual physical examination performed
by a
physician of the VP RD&C’s choice, and including such diagnostic tests
as are ordered by such physician. All information, including any test
results, that is a product of the physical examination shall be provided
to the Company but shall remain the VP RD&C’s personal property and
shall be maintained in confidence by the Company. Such information
may be
released by the Company to third parties only with prior written
authorization from the VP RD&C.
|
| 5. |
Vacation
|
| 5.1. |
The
VP RD&C shall be entitled annually to four weeks of paid vacation, and
three additional days for every additional year of employment. The
timing
of such vacation in any year is subject to the reasonable direction
of the
Chairman of the Board and the Board of Directors. The VP RD&C will
advise the Chairman of the Board and the Board of Directors of planned
vacation periods. If vacation days are not utilized such unused vacation
shall be paid in full at the current salary rate with any escalation
clauses that are appropriate. The provisions of this section are subject
to change in accordance with the Company’s policies in effect from time to
time.
|
| 6. |
Change
of Control
|
| 6.1. |
The
Board of Directors shall not approve any change of control, as defined
herein unless the acquiring corporation or controlling person assumes
the
responsibility for this Agreement and all payments due hereunder. In
addition, all outstanding stock options and Common Shares and any
warrant(s) to acquire additional Common Shares, if not yet vested,
shall
be vested immediately to the VP RD&C. The term, “change of control,”
shall be defined as either the sale, lease, exchange, transfer, or
other
disposition to any person, entity, or group of persons of fifty percent
(50%) or more of the assets of the Company, or an action by the Directors
regarding any reorganization, merger, or consolidation of the Company,
in
each case, pursuant to which the persons who were Directors of the
Company
immediately prior to such reorganization, merger, or consolidation,
do not
immediately thereafter constitute more than fifty percent (50%) of
the
combined voting power entitled to vote generally in the election of
directors of the reorganized, merged, or consolidated Company’s Board of
Directors.
|
| 7. |
Confidentiality,
Non-Competition and
Non-Solicitation
|
| 7.1. |
The
VP RD&C agrees as a condition of the VP RD&C's employment
hereunder to execute the Confidentiality and Non-Competition Agreement
attached hereto as Schedule "B" (the "Non-Competition Agreement") which
is
included and forms a part hereof
|
| 8. |
Term
and Termination of Agreement
|
| 8.1. |
Subject
to the provisions of Section 12 of this Agreement (termination for
just
cause), this Agreement shall continue and remain in full force for
one (1)
year from January 1, 2007 and automatically renew on the anniversary
date
for one (1) year unless the Board of Directors acts to terminate the
agreement.
|
| 8.2. |
The
VP RD&C has the right to terminate this Agreement by providing the
Company written notice with a termination date effective one month
after
giving of the notice (the “Termination Date”). The VP RD&C shall
receive remuneration, benefits (if in effect) and expenses contemplated
by
this Agreement and any options to acquire Common Stock which may have
vested up to and including the effective Termination Date, but the
VP
RD&C shall be obligated to apply his entitlement to paid vacation to
the period between date of such written notice and the effective
Termination Date, and the VP RD&C shall not be entitled to any other
remuneration, reimbursement or payment
whatsoever.
|
| 8.3. |
The
Company has the right to terminate this Agreement and the VP RD&C's
employment hereunder at any time without just cause by providing the
VP
RD&C with written notice which shall provide for a Termination Date
effective as of the date of the said notice and the Company shall,
at the
same time, do the following:
|
| (a) |
That
the Company shall pay to the VP RD&C, within one week following the
date of written notice of termination, or at such earlier or later
time as
may be mutually agreed upon between the Company and the VP RD&C, a
settlement payment equal to the total of:
|
| (i) |
an
amount equal to twelve (12) months of monthly Compensation payable
to the
VP RD&C under this Agreement; plus
|
| (b) |
That
all stock options previously granted by the Company to the VP RD&C
that have vested must be exercised within one
year.
|
| 8.4. |
The
employment of the VP RD&C shall be deemed terminated pursuant to
subsection 8.3 hereof if the Company unilaterally changes the terms
of the
employment relationship such that the VP RD&C does not continue to be
employed at a level of responsibility or a level of Compensation at
least
commensurate with the VP RD&C's existing level of responsibility and
Compensation immediately prior to the said change and the VP RD&C
elects in a written notice to the Company to treat the VP RD&C's
employment as being terminated as a result of either such reduction
with
the said termination being effective as at the date of the said written
notice. This Section 9.4 with respect to deemed termination of the
VP
RD&C’s employment shall be triggered should the Company appoint any
individual other than the VP RD&C to the position of VP RD&C,
without the VP RD&C’s express prior written consent to such
appointment, and in such circumstances, all shares of common stock
underlying the warrant(s) issued to the VP RD&C in accordance with
Section 3.4 hereof shall vest immediately and be exercisable by the
VP
RD&C.
|
| 9. |
Release
|
| 9.1. |
In
consideration of payment to the VP RD&C of the aforesaid amounts and
additional provisions of this Agreement, the VP RD&C agrees to tender
the VP RD&C's immediate resignation in a form satisfactory to the
Company acting reasonably and forever release and discharge the Company
from any and all obligations to pay any further amounts or benefits
the VP
RD&C with respect to the VP RD&C's employment or termination
thereof.
|
| 10. |
Time
of Essence
|
| 10.1. |
Time
shall be of the essence in this Agreement and all amendments hereto.
|
| 11. |
Subsequent
Employment
|
| 11.1. |
The
VP RD&C shall not be bound in any manner whatsoever to rebate to the
Company nor to forgive any claim against the Company with respect to
any
amounts or benefits payable in the event of the VP RD&C's subsequent
reemployment in any manner whatsoever, so long as the VP RD&C complies
with his obligations under the Confidentiality and Non-Competition
Agreement.
|
| 12. |
Termination
for Cause
|
| 12.1. |
Notwithstanding
the other provisions of this Agreement, the Company shall be entitled
to
terminate this Agreement and the VP RD&C's employment hereunder
forthwith for just cause without any further notice or payment in lieu
of
notice. In the event of such termination for just cause, the other
provisions of this Agreement shall not apply, but this shall not impact
the enforceability of the Non-Competition Agreement between the Company
and the VP RD&C included as Schedule “B”
hereto.
|
| 12.2. |
For
purposes of this Agreement, the Company shall have just cause to terminate
the VP RD&C’s employment without compensation upon the occurrence of
any of the following during the term of this
Agreement:
|
| (a) |
The
VP RD&C abuses alcohol or other substances while performing his duties
for the Company which abuse negatively affects the performance of his
duties, such abuse is habitual, and the VP RD&C fails to seek
competent abuse counseling within 30 days of written notice by the
Board
of Directors;
|
| (b) |
The
VP RD&C is convicted of a felony for any crime involving moral
turpitude;
|
| (c) |
The
VP RD&C is convicted of a felony for engaging in fraudulent conduct,
theft or embezzlement in connection with his duties for the Company;
or
|
| (d) |
The
VP RD&C commits any material breach of this Agreement or the Company’s
Bylaws, and such material breach shall continue for a period of thirty
(30) days after written notice of the alleged breach is provided to
the VP
RD&C by the Board of Directors.
|
| 13. |
Prior
Agreements/Entire
Agreement/Conflicts
|
| 13.1. |
It
is acknowledged and agreed by the Company and the VP RD&C that this
Agreement, including the Position description and Roles and
Responsibilities attached as Schedule "A" hereto and the Non-Competition
Agreement attached hereto as Schedule "B", constitutes the entire
agreement between the parties and any and all prior agreements, written
or
verbal, express or implied, between the parties relating to or in any
way
connected with employment of the VP RD&C by the Company are hereby
rendered null and void and are superseded by the terms of this
Agreement.
|
| 13.2. |
In
the event of any conflict between the terms of the Non-Competition
Agreement and the terms of this Agreement, the terms of this Agreement
shall prevail.
|
| 14. |
Construction
and Enforcement
|
|
15.1
|
This
Agreement shall be construed in accordance with the laws of the State
of
Florida, without application of the principles of conflicts of laws.
If it
becomes necessary for any party to institute legal action to enforce
the
terms and conditions of this Agreement, the successful party will
be
awarded reasonable attorneys' fees at all trial and appellate levels,
expenses and costs. Any suit, action or proceeding with respect to
this
Agreement shall be brought in the state or federal courts located
in Palm
Beach County in the State of
Florida.
|
| 15. |
Further
Assurances
|
| 15.1. |
Each
of the parties shall from time to time and at all times do all such
further acts and execute and deliver all such further deeds and documents
as shall be reasonably required in order to fully perform the terms
of
this Agreement.
|
| 16. |
Enurement
|
| 16.1. |
This
Agreement shall enure to the benefit of and be binding upon the parties
and their respective heirs, executors, administrators, successors and,
in
the case of the Company, its assigns.
|
| 17. |
Notice
|
| 17.1. |
Any
notice or other instrument required or permitted to be delivered or
served
on the other party hereto shall be sufficiently given to or served
on such
party if in writing and delivered by hand in a sealed envelope addressed
to such party and left, during normal business hours, at the following
addresses:
|
| 17.2. |
(a)
if
to the VP RD&C: Xxxxxx
X. Xxxxxxxx, Ph.D.17
Xxxxxxx Xxxxx Xxxxxxx,
XX 00000
|
(b)
if
to the
Company: Quick-Med
Technologies Inc.
0000
XX
00xx
Xxx
Xxxxxxxxxxx,
Xxxxxxx 00000
Attention:
Chairman; CEO; CFO; Secretary
Either
the Company or the VP RD&C may, by notice delivered in accordance with this
section, change the address for notices set out above.
IN
WITNESS
WHEREOF
the
parties hereto have duly executed this Agreement as of the date first above
written.
QUICK-MED
TECHNOLOGIES, INC.
________/s/
Xxxxx X. Lerner__________
Xxxxx
X.
Xxxxxx, President
SIGNED,
SEALED AND DELIVERED
In
the
presence of:
___/s/
Xxxxx Xxxxxxxx, RDH__________ __/s/
GeraldM.Olderman________________
Witness XXXXXX
X. XXXXXXXX
