EMPLOYMENT AGREEMENT
This
AGREEMENT dated as of January 1, 2006 between Uluru Inc., a Delaware corporation
located at 0000 Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxx, 00000 (the “Company”), and
Xxxxxxxx X. Xxxxxxxx, an individual residing at 0000 Xxxxx Xxxx, Xxxxxxxxxx,
Xxxxx 00000 (the “Executive”).
W
I T N E S S E T H:
WHEREAS,
the Company desires that Executive serve as the Company’s Chief Financial
Officer; and
WHEREAS,
in order to induce Executive to agree to serve in such capacity, the Company
hereby offers Executive certain compensation and benefits of employment,
as
described herein.
WHEREAS,
Executive is willing to serve in this position on the terms and conditions
hereinafter set forth;
NOW,
THEREFORE, in consideration of the promises and of the mutual covenants
contained herein, the Company and Executive hereby agree as follows:
1.
Employment
The
Company hereby agrees to employ Executive and Executive hereby agrees to
be
employed upon the terms and conditions hereinafter set forth.
2.
Nature of Employment
During
the term of this Agreement, Executive shall serve as Vice President and Chief
Financial Officer and shall have such responsibilities and authority consistent
with such positions as may be reasonably assigned to him by the Chief Executive
Officer of the Company. Executive shall devote his full time and attention
and best efforts to perform successfully his duties and advance the Company’s
interests. Employee shall abide by the Company’s policies, procedures, and
practices, as they may exist from time to time. Executive shall be responsible
to the Chief Executive Officer of the Company, rendering the services and
performing the duties prescribed by the Chief Executive Officer of the
Company.
The
Executive shall be employed at the Company’s offices in <?xml:namespace
prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Dallas,
Texas, and his principal duties shall be performed primarily in Dallas, Texas,
except for business trips reasonable in number and duration.
3.
Term
The
employment of the Executive hereunder shall begin on the date hereof and
shall
continue in full force and effect for a period of one (1) year, and thereafter
shall be automatically renewed for successive one-year periods unless the
Company gives the Executive written notice of termination within six (6)
months
prior to the end of any such period or until the occurrence of a Termination
Date, as defined in Section 6 (the "Term").
4.
Compensation
4.1.
As compensation for the Executive’s services during the Term, the Company shall
pay the Executive an annual base salary at the rate of One Hundred Fifty
Five
Thousand Dollars ($155,000), payable in accordance with the Company’s reasonable
policies, procedures, and practices, as they may exist from time to time.
Prior to the end of each year during the Term, the Compensation Committee
of the
Company shall undertake an evaluation of the services of the Executive during
the year then ended in accordance with the Company’s compensation program at the
date hereof (the “Program”). The Company shall consider the performance of
the Executive, his contribution to the success of the Company and entities
under
common control with the Company (collectively, “Affiliates”), and other factors
and shall fix an annual base salary to be paid to the Executive during the
ensuing year.
4.2.
Notwithstanding the foregoing, the Company may change the Program from time
to
time or institute a successor to the Program, but the Executive’s annual base
salary shall in no event be less than his annual base salary in effect on
the
date of change, adjusted regularly to reflect increases in the cost of living
and comparable compensation for like positions.
4.3.
The executive shall participate in the Company incentive compensation programs
in accordance with the following subparagraphs (i) and
(ii):
(i)
Incentive Plan– The executive shall be covered by the cash bonus plan
currently maintained by the Company and shall be afforded the opportunity
thereunder to receive a target award of 10% of annual base salary payable
in cash and a target award of 10% of annual base salary payable in Company
Common Stock, to be awarded upon the achievement of reasonable performance
goals; provided that the Company may from time to time change the Program
or
institute a successor to the Program, so long as the Executive continues
to be
eligible to receive bonus awards of percentages of annual base salary in
amounts
at least equal to those specified as in effect on the date hereof.
(ii)
Stock Option Plan – Executive shall be entitled to participate in the Company’s
stock option plan. In accordance with this plan the Board may from time to
time, but without any obligation to do so, grant stock options to the Executive
upon such terms and conditions as the Board shall determine in its sole
discretion. If the Company no longer has a class of stock publicly-traded
by reason of a Change in Control of the Company, as defined in Section 6.3,
the
Company’s obligation under this Section 4.3 will be satisfied through options
granted by the issuer with public stock then in control of the Company.
4.4.
If the Executive is prevented by disability, for a period of six consecutive
months, from continuing fully to perform his obligations hereunder, the
Executive shall perform his obligations hereunder to the extent he is able
and
after six months the Company may reduce his annual base salary to reflect
the
extent of the disability; provided that in no event may such rate, when added
to
payments received by him under any disability or qualified retirement or
pension
plan to which the Company, Affiliate, or Executive contributes or has
contributed, be less than $155,000. If there should be a dispute about the
Executive’s disability, disability shall be determined by the Board of Directors
of the Company based upon a report from a physician, reasonably acceptable
to
the Executive, who shall have examined the Executive. If the Executive
claims disability, the Executive agrees to submit to a physical examination
at
any reasonable time or times by a qualified physician designated by the Chairman
of Board of the Company and reasonably acceptable to the Executive.
Notwithstanding any provision in this Section, the Company shall not be
obligated to make any payments to Executive on account of disability after
the
expiration of this Agreement.
5.
Executive Benefits
The
Executive shall be entitled to participate in all “employee pension benefit
plans,” all “employee welfare benefit plans” (each as defined in the Employee
Retirement Income Security Act of 1974) and all pay practices and other
compensation arrangements maintained by the Company, on a basis at least
as
advantageous to the Executive as the basis on which other executive employees
of
the Company are eligible to participate and on a basis at least as advantageous
to the Executive as the basis on which he participates therein on the date
hereof. Executive shall, during the term of his employment hereunder, continue
to be provided with such benefits at a level at least equivalent to the initial
benefits provided or to be provided hereunder. Without limiting the
generality of the foregoing, the Executive shall be entitled to the following
employee benefits (collectively, with the benefits contemplated by this Section
5, the “Benefits”):
5.1
The Executive and Executive’s dependents shall participate, at their
option in any medical insurance plans and programs comparable in scope to
the coverage afforded on the date hereof, with only such contribution by
the
Executive toward the cost of such insurance as may be required from time
to time
from other executive officers of the Company. If a Change in Control of the
Company, as defined in Section 6.3, shall have occurred, the Company may
not
change the carriers providing medical insurance immediately before the change
without the consent of the Executive, which consent will not be unreasonably
withheld.
5.2
Life Insurance. Executive shall be entitled to group term life insurance
coverage of an amount equal to the annual base salary as defined herein,
all
premiums being paid by the Company.
5.3
Long-Term Disability Insurance. The Company shall maintain in effect long
term disability insurance providing Executive in the event of his disability
(as
defined in Section 4.4 hereof) with compensation annually equal to at least
$155,000.
5.4
The Executive shall be entitled to paid time off (“PTO”) of no less than thirty
nine (39) days each year. Such PTO shall be accrued and taken in
accordance with the Company’s policies and practices, as they may exist from
time to time.
5.5
The Company shall reimburse the Executive from time to time for the reasonable
expenses incurred by the Executive in connection with the performance of
his
obligations hereunder.
5.6
During such times as the Company is eligible and financially qualified to
obtain
the same, the Company shall maintain directors and officers’ liability insurance
applicable to the Executive in amounts established by the Board of
Directors.
Notwithstanding
the foregoing, the Company may from time to time change or substitute a plan
or
program under which one or more of the Benefits are provided to the Executive,
provided that the Company first obtains the written consent of the Executive,
which the Executive agrees not unreasonably to withhold, taking into account
his
personal situation.
6.
Termination Date; Consequences for Compensation and
Benefits
6.1
Definition of Termination Date. The first to occur of the following events
shall be the Termination Date:
6.1.1
The date on which the Executive becomes entitled to receive long-term disability
payments by reason
of total and permanent disability;
6.1.2.
The Executive’s death;
6.1.3.
Voluntary resignation after one of the following events shall have occurred,
which event shall be specified to the Company by the Executive at the time
of
resignation: material reduction in the responsibility, authority, power or
duty of the Executive or a material breach by the Company of any provision
of
this Agreement, which breach continues for 30 days following notice by the
Executive to the Company setting forth the nature of the breach (“Resignation
with Reason”);
6.1.4.
Voluntary resignation not accompanied by a notice of reason described in
Section
6.1.3 (“General Resignation”);
6.1.5.
Discharge of the Executive by the Company after one of the following events
shall have occurred, which event shall be specified in writing to the Executive
by the Company at the time of discharge:
(i)
a felonious act committed by Executive during his employment hereunder,
(ii)
any act or omission on the part of Executive not requested or approved by
the
Company constituting willful malfeasance or gross negligence in the performance
of his duties hereunder,
(iii)
any material breach of any term of this Agreement by the Executive which
is not
cured within 30 days after written notice from the Chief Executive Officer
to
the Employee setting forth the nature of the breach (“Discharge for Cause”);
For
purposes of this subparagraph (6.1.5), no act or failure to act on the
Executive’s part shall be considered “willful” unless done or omitted to be done
by Executive not in good faith and without reasonable belief that Executive’s
action or omission was in the best interest of the Company.
Notwithstanding the foregoing, Executive shall not be deemed to have been
discharged for Cause unless and until there shall have been delivered to
Executive a copy of a Notice of Termination (as defined below) from the Chief
Executive Officer of the Company stating that in his good faith opinion
Executive was guilty of conduct set forth in clauses (i), (ii), or (iii)
above
of this subparagraph (6.1.5) and specifying the particulars thereof in
detail.
6.1.6
Discharge of the Executive by
the Company not accompanied by a notice of cause described in Section 6.1.5
(“General Discharge”).
For
purposes of this Agreement “Notice of Termination” shall mean a notice which
indicates the specific termination provision in this Agreement relied upon
and
sets forth in reasonable detail the facts and circumstances claimed to provide
a
basis for termination of Executive’s employment under the provision so
indicated. Each Notice of Termination shall be delivered at least sixty
(60) days prior to the effective date of termination.
6.2
Consequences for Compensation and Benefits
(a)
If the Termination Date occurs by reason of disability, death, General
Resignation or Discharge for Cause, the Company shall pay compensation to
the
Executive through the Termination Date and shall pay to the Executive all
Benefits accrued through the Termination Date, payable in accordance with
the
respective terms of the plans, practices and arrangements under which the
Benefits were accrued.
(b)
If the Termination Date occurs by reason of General Discharge or Resignation
with Reason, (i) all stock options held by the Executive shall become
immediately exercisable and shall remain exercisable for two (2) years after
the
Termination Date, (ii) the Company shall continue the health coverage
contemplated by Section 5.1 for a period of one (1) year thereafter, and
(iii)
the Executive shall be entitled to receive, within 60 days after the Termination
Date, the amount set forth in Section 6.2.1.
6.2.1
The Executive’s annual base salary at the Termination Date plus the target bonus
for the year in which the Termination Date occurs, multiplied by one (1)
(i.e.,
1 times base salary plus target bonus).
6.3
Change in Control.
In
the event of the occurrence of a Change in Control (as defined below), this
Agreement may be terminated by Executive upon the occurrence thereafter of
one
or more of the following events:
1)
Termination by Executive of his employment with the Company may be made within
one (1) year after a Change in Control and upon the occurrence of any of
the
following events:
(a.)
A significant adverse change in the nature or scope of the Executive’s
authorities, powers, functions, responsibilities or duties as a result of
the
Change in Control, a reduction in the aggregate of Executive’s existing
base salary and existing Incentive Plan received from the Company, or
termination of Executive’s rights to any existing Executive Benefit to which he
was entitled immediately prior to the Change in Control or a reduction in
scope
or value thereof without the prior written consent of Executive;
(b.)
The liquidation, dissolution, merger, consolidation or reorganization of
the
Company or transfer of all or a significant portion of its business and/or
assets (by liquidation, merger, consolidation, reorganization or otherwise)
unless the successor or successors to which all or a significant portion
of its
business and/or assets have been transferred (directly or by operation of
law)
shall have assumed all duties and obligations of the Company under this
Agreement pursuant to Section 12.5 hereof; or
(c.)
The Company shall relocate its principal executive offices or require Executive
to have as his principal location of work any location which is in excess
of 50
miles from the location thereof immediately prior to the relocation date
or to
travel from his office in the course of discharging his responsibilities
or
duties hereunder more than thirty (30) consecutive calendar days or an aggregate
of more than ninety (90) calendar days in any consecutive 365-calendar day
period without in either case his prior consent.
2)
Subsequent to a change in control of the Company, the failure by the Company
to
obtain the assumption of the obligation to perform this Agreement by any
successor as contemplated in Section 12.5 hereof or otherwise; or
3)
Subsequent to a Change in Control of the Company, any purported termination
of
Executive’s employment that is not effected pursuant to a Notice of Termination
satisfying the requirement of Section 6.1.5 hereof.
6.3.1
A Change in Control of the Company shall occur upon the first to occur of
the
date when (a) a person or group “beneficially owns” (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934) in the aggregate 50%
or
more of the outstanding shares of capital stock entitled to vote generally
in
the election of the Directors of the Company or (b) there occurs a sale of
all
or substantially all of the business and/or assets of the Company.
6.3.2
If a Change in Control of the Company shall have occurred within six (6)
months
prior to the Termination Date or the Executive terminates this Agreement
under
Section 6.3 the Executive will be entitled to receive, within 60 days after
the
Termination Date, the Executive’s annual base salary at the Termination Date
plus the target bonus for the year in which the Termination Date occurs
multiplied by one (1) (i.e., 1 times base salary plus target bonus), all
stock
options held by the Executive shall become immediately exercisable and shall
remain exercisable for one (1) year after the Termination Date. The
Company shall continue the health coverage contemplated by Section 5.1 for
a
period of one (1) year thereafter.
6.4
Liquidated Damages: No Duty to Mitigate Damages. The amounts payable
pursuant to Sections 6.2 and 6.3 shall be deemed liquidated damages for the
early termination of this Agreement and shall be paid to the Executive
regardless of any income the Executive may receive from any other employer,
and
the Executive shall have no duty of any kind to seek employment from any
other
employer during the balance of the Term.
7.
Indemnification
To
the fullest extent permitted by law, the Company shall indemnify the Executive
and hold him harmless from and against all loss, cost, liability and expense
(including reasonable attorney’s fees) arising from the Executive’s service to
the Company or any Affiliate, whether as officer, director, employee, fiduciary
of any employee benefit plan or otherwise.
8.
Agreement Not to Compete
The
Executive agrees that, while serving as an Executive of the Company, he will
not, without the written consent of the Chief Executive Officer of the Company,
serve as an employee or director of any business entity other than the Company
and its Affiliates, but may serve as a director of a reasonable number of
not-for-profit corporations and may devote a reasonable amount of time to
charitable and community service.
The
Executive may hold stock or a limited partnership interest of 5% or less
in any
publicly traded entity engage in such business without violating this
Agreement.
9.
Agreement Not to Solicit
For
one year following any Termination Date, regardless of the reason, the Executive
shall not solicit any employee of the Company or an Affiliate to leave such
employment and to provide services to the Executive or any business entity
by
which the Executive is employed or in which the Executive has a material
financial interest. Soliciting a former employee of the Company and its
Affiliates to provide such services shall not be a violation of this
Agreement.
10.
Confidential Information
Unless
the Executive shall first secure consent of the Company, the Executive shall
not
disclose or use, either during or after the Term for a period of five (5)
years,
any secret or confidential information of the Company or any Affiliate, whether
or not developed by the Executive, except as required by his duties to the
Company or the Affiliate.
Executive
will sign a Employee Confidentiality, Inventions, and Non-Competition Agreement,
which shall control over this Agreement if any conflict exists between it
and
this Agreement.
11.
Arbitration
Any
dispute or differences concerning any provision of this Agreement which cannot
be settled by mutual accord between the parties shall be settled by arbitration
in Dallas, Texas in accordance with the rules then in effect of the American
Arbitration Association, except as otherwise provided herein. The dispute
or differences shall be referred to a single arbitrator, if the parties agree
upon one, or otherwise to three arbitrators, one to be appointed by each
party
and a third arbitrator to be appointed by the first named arbitrators; and
if
either party shall refuse or neglect to appoint an arbitrator within 30 days
after the other party shall have appointed an arbitrator and shall have served
a
written notice upon the first mentioned party requiring such party to make
such
appointment, then the arbitrator first appointed shall, at the request of
the
party appointing him, proceed to hear and determine the matters in difference
as
if he were a single arbitrator appointed by both parties for the purpose,
and
the award or determination which shall be made by the arbitrator shall be
final
and binding upon the parties hereto. The arbitrator or arbitrators shall
each have not less than five (5) years experience in dealing with the subject
matter of the dispute or differences to be arbitrated. Any award maybe enforced
in any court of competent jurisdiction. The expenses of any such
arbitration shall be paid by the non-prevailing party, as determined by the
final order of the arbitrators.
12.
Miscellaneous
12.1
Notices
All
notices in connection with this Agreement shall be in writing and sent by
postage prepaid first class mail, courier, or telefax, and if relating to
default or termination, by certified mail, return receipt requested, addressed
to each party at the address indicated below:
If
to the Company:
Uluru
Inc.
0000
Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx,
XX00000
Attn:
Chief Executive Officer
Copy
To:
Xxxx
X. Xxxxxxxxx III, Esq.,
Xxxxxxx
Xxxx LLP
000
Xxxxxxx Xxxxxx
Xxxxxx,
XX00000
If
to the Executive:
Xxxxxxxx
X. Xxxxxxxx
0000
Xxxxx Xxxx
Xxxxxxxxxx,
XX 00000
Or
to such other address as the addressee shall last have designated by notice
to
the communicating party. The date of giving of any notice shall be the
date of actual receipt.
12.2
Governing Law
This
Agreement shall be deemed a contract made and performed in the State of Texas,
and shall be governed by the internal and substantive laws of the State of
Texas.
12.3
Severability
Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of
this
Agreement is held to be invalid, illegal or unenforceable in any respect
under
any applicable law or rule in any jurisdiction, such invalidity, illegality
or
unenforceability shall not affect any other provision or in the interpretation
in any other jurisdiction; however, such provision shall be deemed amended
to
conform to applicable laws and to accomplish the intentions of the
parties.
12.4
Entire Agreement; Amendment
This
Agreement constitutes the entire agreement of the parties and may be altered
or
amended or any provision hereof waived only by an agreement in writing signed
by
the party against whom enforcement of any alteration, amendment, or waiver
is
sought. No waiver by a party of any breach of this Agreement shall be
considered as a waiver of any subsequent breach.
12.5
Successors and Assigns
12.5.1
The Company will require any successor (whether direct or indirect, by purchase,
merger,
consolidation or otherwise) to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would
be
required to perform it if no such succession had taken place. Failure of
the Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Executive
to
compensation from the Company in the same amount and on the same terms as
Executive would be entitled hereunder if Executive terminated his employment
for
Change of Control. As used in this Section 12.5.1, “Company” shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which executes and delivers the Agreement provided for
in
this Section 12.5.1 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
12.5.2
This Agreement is intended to bind and inure to the benefit of and be
enforceable by
Executive
and the Company, and their respective successors and assigns, except that
Executive may not assign any of his rights or delegate any of his duties
without
the prior written consent of the Company.
12.6
Assignability
Neither
this Agreement nor any benefits payable to the Executive hereunder shall
be
assigned, pledged, anticipated, or otherwise alienated by the Executive,
or
subject to attachment or other legal process by any creditor of the Executive,
and notwithstanding any attempted assignment, pledge, anticipation, alienation,
attachment, or other legal process, any benefit payable to the Executive
hereunder shall be paid only to the Executive or his estate.
IN
WITNESSES WHEREOF, the Company and its officers hereunto duly authorized,
and
the Employee have signed and sealed this Agreement as of the date first written
above.
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ULURU
Inc.
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Executive
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By:___/s/
Xxxxx X.
Xxxx
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By:__/s/
Xxxxxxxx X. Xxxxxxxx
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Name:__Kerry
X.
Xxxx
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Name:_Terrance
X.
Xxxxxxxx
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Title:
___President and
CEO
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Title:___Vice
President and CFO
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Date: January
1,
2006
|
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Date: January
1,
2006
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