EMPLOYMENT AGREEMENT
by and between
PHYTOTECH, INC.
and
XX. XXXX X. XXXXXX
Dated:
May 17, 1996
EMPLOYMENT AGREEMENT
THIS AGREEMENT made effective as of this 17th day of May, 1996 by and
between PHYTOTECH, INC. (the "Employer"), a New Jersey corporation, having an
office at 0 Xxxx Xxxx Xxxxx, Xxxxx 0, Xxxxxxxx Xxxxxxxx, Xxx Xxxxxx 00000, and
XXXX X. XXXXXX, residing at 0 Xxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxxx (the
"Executive").
WHEREAS, Employer wishes to assure itself of the services of Executive
as President of the Employer for the period provided in this Agreement, and
Executive is willing to serve in the employ of Employer as President on a
full-time basis for said period, and upon those terms and conditions hereinafter
provided; and
WHEREAS, this Employment Agreement was authorized by the Board of
Directors of the Company.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. EMPLOYMENT.
1.1 Employer agrees to employ Executive, and Executive agrees to
be employed by Employer, for the period stated in Section 4 hereof and upon
those terms and conditions herein provided.
1.2 Employer's Board of Directors may terminate the Executive's
employment at any time by notifying Executive in the manner set forth at Section
3.1 hereof, but any termination by Employer shall not prejudice the Executive's
right to compensation or other benefits under this Agreement.
1.3 Executive's principal place of employment shall be at the
Employer's office at 0 Xxxx Xxxx Xxxxx, Xxxxxxxx Junction, New Jersey or at such
other location determined by the
Board of Directors, subject to reasonable travel as the rendering of the
services hereunder may require.
2. POSITION AND RESPONSIBILITIES.
During the period of his employment hereunder, Executive agrees to
serve as President of Employer.
3. TERM AND DUTIES.
3.1 TERM OF EMPLOYMENT. The period of Executive's employment
under this Agreement shall commence no later than the date of this Agreement
(the "Commencement Date") and shall continue for a period of three (3) years
(the "Term") unless sooner terminated by reason of any of the events enumerated
in Section 6 hereunder.
3.2 DUTIES DURING TERM. During the period of his employment
hereunder and except for illness, any reasonable vacation period (as hereinafter
defined in paragraph 4.6 hereof), and reasonable leaves of absence, Executive
shall devote all of his business time, attention, skill, and efforts to the
faithful performance of his duties hereunder including activities and services
related to the organization and management of Employer; provided, however, that
with the prior approval of the Board of Directors of Employer as evidenced by a
resolution of the Board of Directors, from time to time, Executive may serve, or
continue to serve, on the boards of directors of, and hold any other offices or
positions in, companies or organizations, which, in such Board's judgment, will
not present any conflict of interest with Employer, or materially affect the
performance of Executive's duties pursuant to this Agreement.
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4. COMPENSATION AND REIMBURSEMENT.
4.1 COMPENSATION - BASE SALARY/BONUS. The compensation
specified under this Agreement shall constitute the salary and benefits paid to
Executive for the duties described in Sections 2 and 3.2. Employer shall pay
Executive a base salary of ONE HUNDRED AND TWENTY THOUSAND ($120,000) DOLLARS
(the "Base Salary") (on a semi-monthly basis) which shall increase after the
Term if agreed upon by the Board of Directors. During the period of this
Agreement, Executive's Base Salary may be reviewed in the discretion of the
Board of Directors. Such reviews shall be conducted by a Committee designated
by the Board of Directors, and such Committee may increase said Base Salary. In
addition, Executive shall be entitled to a performance bonus of FIFTEEN THOUSAND
($15,000) DOLLARS upon the closing of at least $1 million of the current private
placement which closing date was April 30, 1996.
4.2 STOCK OPTION PLAN. Executive shall be entitled to receive
incentive stock options for FORTY-FIVE THOUSAND (45,000) shares of Phytotech,
Inc. common stock vesting over a three year period. In addition, if agreed upon
by the Board of Directors, Executive may be entitled to additional stock options
and/or warrants payable in accordance with and determined under the terms of
PHYTOTECH, INC. STOCK OPTION PLAN.
4.3 REIMBURSEMENT OF EXPENSES. Employer shall pay or reimburse
Executive for all reasonable travel and other reasonable out-of-pocket expenses
incurred by Executive in performing his obligations under this Agreement. Such
reimbursements will be
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made promptly, within thirty (30) days of Executive's submission to Employer of
an itemized list of such expenses, together with receipts therefor indicating
the date upon and the purpose for which such expenses were incurred and such
other information as may be reasonably required from time to time by Employer to
substantiate such expenditures for federal income tax purposes.
4.4 HEALTH BENEFITS. In addition to the payments to the
Executive hereunder, the Executive is entitled to full health insurance benefits
for himself and his family, including but not limited to reasonable medical
coverage, dental coverage and disability insurance, as agreed upon by the
Employer.
4.5 STATUS AS EMPLOYEE. At all times during the term of this
Agreement, Executive shall be deemed to be an employee of Employer and its
affiliates for purposes of determining Executive's coverage under and
eligibility to participate in, any employee benefit plans or programs which
Employer now has or may hereafter initiate.
4.6 REASONABLE VACATION PERIOD. The Executive shall be entitled
to four (4) weeks annual vacation, unless otherwise mutually agreed upon by the
Executive and the Employer.
5. TERMINATION OF EMPLOYMENT.
5.1 TERMINATION UPON DEATH. If the Executive dies during the
Term, all rights of the Executive or his estate (other than for indemnification
under Section 11 hereof) under this Agreement shall cease as of the effective
date of such termination, except that the Executive (i) shall be entitled to
receive Base Salary for the month during which death occurs, and (ii) shall be
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entitled to receive the payments and benefits of which he is then entitled under
the employee benefit plans of the Employer or any affiliate thereof as of the
date of the termination.
5.2 TERMINATION UPON DISABILITY. If during the Term, the
Executive becomes physically or mentally disabled, whether totally or partially,
so that the Executive is unable substantially to perform his services hereunder
for a period of one-hundred and twenty (120) days in any twelve (12) month
period, Employer may at any time after the last day of such period of
disability, by written notice to the Executive, terminate the Term of the
Executive's employment hereunder. Nothing in this Section 5.2 shall be deemed
to extend the Term. Upon such termination, all rights of the Executive under
this Agreement (other than for indemnification under Section 11 hereof) shall
cease as of the effective date of such termination, except that the Executive
(i) shall be entitled to receive Base Salary for the month in which such
termination occurs; (ii) shall be entitled to receive a PRO RATA portion of any
incentive compensation otherwise payable for the year during which the
termination occurs (if applicable) and (iii) shall be entitled to receive the
payments and benefits to which he is then entitled under any employee benefit
plans of the Employer or any affiliate thereof as of the date of this
termination.
5.3 TERMINATION FOR CAUSE. If the Executive (i) willfully
neglects his duties hereunder and such willful neglect shall not be discontinued
within fifteen (15) days after written notice thereof, (ii) is convicted of a
felony, (iii) is convicted
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of any crime punishable by a period of imprisonment in excess of one (1) year,
(iv) willfully refuses to comply with the lawful written policies of the
Employer and such refusal shall not be discontinued within fifteen (15) days
after written notice thereof, or (v) materially breaches the terms hereunder and
such breach shall not be remedied within fifteen (15) days after written notice
thereof (items (i) through (v) hereinafter collectively referred to as
"Terminated for Cause"), Employer may at any time by thirty (30) days written
notice to the Executive terminate the Term of the Executive's employment
hereunder.
Notwithstanding the foregoing, the Executive's Employment
shall not be deemed to have been Terminated for Cause if such termination took
place as a result of: (i) questionable judgment on the part of the Executive;
(ii) any act or omission believed by the Executive in good faith, to have been
in or not opposed to the best interests of the Employer, or (iii) any act or
omission in respect of which a determination could properly be made that the
Executive met the applicable standard of conduct prescribed for indemnification
or reimbursement or payment of expenses under the Employer's By-Laws or the laws
of the State of New Jersey, or the directors and officers' liability insurance
of the Employer, in each case as in effect at the time of such act or omission.
If the Executive's Employment is Terminated for Cause, all
rights of the Executive under this Agreement shall cease as of the effective
date of such termination, except that the Executive (i) shall be entitled to
receive his accrued Base Salary
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through the date of such termination and (ii) shall be entitled to receive the
payments and benefits to which he is then entitled under the employee benefits
plans of the Employer or any affiliate thereof as of the date of this
termination.
5.4 TERMINATION BY EMPLOYER WITHOUT CAUSE. If the Executive's
employment hereunder shall be terminated by Employer by any reason other than by
death, disability or cause (all as defined in this Section 5), the Employer
shall pay to the Executive, as liquidated damages and not as a penalty, (i) in a
lump sum immediately subsequent to the date of such termination, an amount equal
to one (1) month of the Base Salary of the Executive and one (1) month of health
benefits for every twelve (12) month period of employment. It is expressly
understood and agreed that the Executive shall not be obligated to mitigate the
damages caused by a termination of his employment for which he shall be entitled
to such liquidated damages.
5.5 VOLUNTARY TERMINATION. In the event Executive voluntarily
terminates his employment with Employer, during or after the Term, the Executive
shall have no right to receive any compensation or benefit from the Employer
hereunder, except for (i) accrued and unpaid Base Salary through the date of
such termination and (ii) payments and benefits to which he is then entitled
under the employee benefits plans of the Employer or any affiliate thereof as of
the date of this termination.
5.6 This Section 5 shall not apply to any stock options and/or
warrants received under Section 4.2 hereof, which
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shall be payable in accordance with the terms of the PHYTOTECH, INC. STOCK
OPTION PLAN.
6. OTHER BENEFITS.
6.1 INSURANCE. Upon the occurrence of an event of termination
or a voluntary termination resulting in a severance of employment, Employer will
cause to be continued life, health and disability coverage substantially
identical to the coverage maintained by Employer for Executive prior to his
severance. In the case of an event of termination or a voluntary termination,
such coverage shall cease upon the Executive's employment by another employer
and Executive's coverage by the subsequent employer's plan, or on the date which
consists of one (1) month for every twelve (12) month period of the Executive's
employment, whichever is earlier. Executive shall contribute such amounts
towards such benefits as are required of all employees so long as he receives
such benefits. The provisions of this Section shall not affect the Executive's
right to eighteen (18) months of health insurance coverage by law so long as he
pays the full amount of such coverage without any payment by the Employer.
7. SOURCE OF FUNDS.
All payments and benefits provided in Sections 4, 5, and 6 shall
be paid to Executive or paid for on behalf of Executive in cash from the general
funds of Employer, and no special or separate fund shall be established and no
other segregation of assets shall be made to assure payment. Executive shall
have no right, title, or interest whatever in or to any investments which
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Employer may make to aid Employer in meeting its obligations hereunder.
8. CERTAIN COVENANTS OF EXECUTIVE.
8.1 CONFIDENTIAL INFORMATION. During and after the term of
Executive's employment with Employer, Executive shall keep secret and retain in
strictest confidence, and shall not use for the benefit of himself or others
except in connection with the business and affairs of Employer, all confidential
matters of Employer, its affiliates, including, without limitation, trade
"know-how," secrets, customer lists, details of contracts, loan applicant lists
or applications, pricing policies, operational methods, marketing plans or
strategies, product development techniques or plans, business acquisition plans,
new personnel acquisition plans and other business affairs of Employer, or its
affiliates, heretofore or hereafter, and shall not disclose them to anyone
outside of Employer, or its affiliates, either during or after employment by
Employer, or any of its affiliates, except as required in the course of
performing duties hereunder or with Employer's express written consent;
PROVIDED, HOWEVER, that this section shall not apply to matters that are part of
the public knowledge or literature or to matters that have been disclosed by
Employer, or its affiliates to third parties.
8.2 PROPERTY OF EMPLOYER. All memoranda, notes, lists, records
and other documents (and all copies thereof) made or compiled by Executive or
made available to Executive concerning the business of Employer, or any of its
affiliates shall be Employer's property and shall be delivered to Employer
promptly upon the
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termination of Executive's employment with Employer, or any of its affiliates or
at any other time on request.
8.3 RIGHTS AND REMEDIES UPON BREACH. The Executive expressly
acknowledges that damages alone will be an inadequate remedy for any breach or
violation of any of the provisions of this Agreement, and that the Employer, in
addition to all other remedies hereunder, shall be entitled, as a matter of
right, to injunctive relief, including specific performance, with respect to any
such breach or violation in any court of competent jurisdiction. The Executive
acknowledges that the business and products of the Employer have worldwide
applications and that the restrictions in this Agreement are therefore properly
without any geographic limitations. If any of the provisions of this Agreement
are held to be in any respect an unreasonable restriction upon the Employer,
then the provisions shall be deemed to extend only over the maximum period of
time, geographic area, or range of activities as to which such provisions may be
enforceable.
9. NO CONFLICTING AGREEMENTS.
Executive represents and warrants that as of the effective date
of this Agreement, he will not be a party to any Agreement, contract or
understanding which would in any way restrict or prohibit him from undertaking
or performing his employment in accordance with the terms and conditions of this
Agreement.
10. FEDERAL INCOME TAX WITHHOLDING.
Employer may withhold from any benefits payable under this
Agreement all federal, state, city or other taxes as
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shall be required pursuant to any law or governmental regulation or ruling.
11. INDEMNIFICATION.
11.1 The Executive shall be indemnified by Employer against
liabilities and reasonable costs, expenses and counsel fees paid or incurred
(exclusive of any amounts paid by Executive to Employer in settlement of
Employer's claims against Executive) in connection with any action, suit or
proceeding to which Executive or his legal representatives may be made a party
by reason of his being or having been a director or officer of Employer or any
affiliate, provided that (l) said action, suit or proceeding shall be prosecuted
against Executive, or against his legal representatives, to final determination
and no final adjudication shall have been made in said action, suit or
proceeding that he was derelict in the performance of his duties as such
director or officer, or (2) said action, suit or proceeding shall be settled or
otherwise terminated as against Executive, or his legal representatives, without
a final determination of the merits, and it shall be determined by the Board of
Directors, or by a committee specifically authorized by the Board of Directors
to make such determination, that Executive was not derelict in any substantial
way in the performance of his duties as charged in such action, suit or
proceeding.
11.2 The right of indemnification described in Section 11.1 shall
be in addition to, and not in restriction of or limitation of, any other
obligation which Employer may have with
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respect to the indemnification or reimbursement of members of Employer's Board
of Directors, officers, agents or employees.
12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the
parties hereto and supersedes any prior employment agreement between Employer or
any predecessor of Employer and Executive, except that this Agreement shall not
affect or operate to reduce any benefit or compensation inuring to Executive of
a kind elsewhere provided. No provision of this Agreement shall be interpreted
to mean that Executive is subject to receiving fewer benefits than those
available to him without reference to this Agreement.
13. GENERAL PROVISIONS.
13.1 NONASSIGNABILITY. Neither this Agreement nor any right or
interest hereunder shall be assignable by Executive, his beneficiaries, or legal
representatives without Employer's prior written consent; provided, however that
nothing in this Section 13.1 shall preclude (a) Executive from designating a
beneficiary to receive any benefit payable hereunder upon his death, or (b) the
executors, administrators, or other legal representatives of Executive or his
estate from assigning any rights hereunder to the person or persons entitled
thereto.
13.2 NO ATTACHMENT. Except as required by law, no right to
receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to execution, attach-
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ment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
13.3 BINDING AGREEMENT. This Agreement shall be binding upon,
and inure to the benefit of, Executive and Employer and their respective
permitted successors and assigns.
14. MODIFICATION AND WAIVER.
14.1 AMENDMENT OF AGREEMENT. This Agreement may not be modified
or amended except by an instrument in writing signed by the parties hereto.
14.2 WAIVER. No term or condition of this Agreement shall be
deemed to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement, except by written instrument of
the party charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver unless specifically stated therein, and each such
waiver shall operate only as to the specific term or condition waived and shall
not constitute a waiver of such term or condition for the future or as to any
act other than that specifically waived.
15. SEVERABILITY.
If, for any reason, any provision of this Agreement is held
invalid, such invalidity shall not affect any other provision of this Agreement
not held so invalid, and each such other provision shall to the full extent
consistent with law continue in full force and effect. If any provision of this
Agreement shall be held invalid in part, such invalidity shall in no way affect
the
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rest of such provision not held so invalid, and the rest of such provision,
together with all other provisions of this Agreement, shall to the full extent
consistent with law continue in full force and effect.
16. HEADINGS.
The headings of sections herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
17. GOVERNING LAW.
This Agreement has been executed and delivered in the State of
New Jersey and its validity, interpretation, performance, and enforcement shall
be governed by the laws of said State.
IN WITNESS WHEREOF, Employer has caused this Agreement to be executed
and its seal to be affixed hereunto by its officers thereunto duly authorized,
and Executive has signed this Agreement as of the day and year first above
written.
ATTEST: EMPLOYER
/s/ Xxxx Xxxxxx By: /s/ Xxxx X. Xxxxxx
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XXXX XXXXXX, Secretary XXXX X. XXXXXX, President
WITNESS: EXECUTIVE
/s/ [ILLEGIBLE] /s/ Xxxx X. Xxxxxx (L.S.)
----------------------------------- ----------------------------------------
XXXX X. XXXXXX, Executive
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