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Exhibit 10.28
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT is entered into at Cleveland, Ohio, this
9th day of July 2001 by and between EMPYREAN BIOSCIENCE, INC. (the "Company")
and XXXXXX X. XXXXX ("Employee").
RECITALS:
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A. The Company is in the business of marketing, selling and
distributing innovative personal care products that are intended to prevent the
spread of infectious disease (the "Business");
B. Employee has certain expertise in connection with certain aspects
of the Company's business and has been employed by the Company.
C. The Company and Employee wish to formalize the employment
relationship between them by means of this written Employment Agreement.
NOW, THEREFORE, in consideration of mutual promises and agreements
contained herein and intending to be legally bound hereby, the parties agree as
follows:
1. EMPLOYMENT. The employment relationship between Employee and the
Company is upon the terms and conditions set forth herein, effective July 9,
2001 ("the Effective Date").
2. SERVICES. Employee is currently Vice President and Chief
Financial Officer. Employee will devote her full working time, experience and
best efforts to the performance of her duties on behalf of the Company. Employee
shall perform all such duties in accordance with such rules, policies and
procedures as the Company and or its Board of Directors may adopt from time to
time.
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3. COMPENSATION.
3.1 BASE SALARY. The Company shall pay to Employee an annual base
salary of One Hundred Thirteen Thousand Two Hundred Fifty Dollars ($113,250.00)
payable in consecutive, equal, biweekly installments. Employee's annual base
salary shall be reviewed by the Compensation Committee of the Board of Directors
at least annually.
3.2 CERTAIN BASIC FRINGE BENEFITS. The Company shall provide to
Employee a benefits package upon terms and conditions and in amounts to be
determined by the Board of Directors as part of a package of benefits approved
for senior management of the Company.
3.3 BUSINESS EXPENSES. The Company shall promptly reimburse Employee
for all reasonable, ordinary and necessary business expenses incurred by her in
the performance of her duties hereunder, and Employee shall submit receipts,
vouchers or other appropriate evidence to substantiate that said expenses were
incurred by Employee in connection with the business of the Company.
3.4 INCENTIVE COMPENSATION. Employee shall be entitled to
participate in an incentive compensation bonus program for senior management of
the Company pursuant to approval of the Board of Directors.
4. TERM, TERMINATION.
4.1 This Agreement may be terminated by the Company at any time "for
cause" or without cause. "For cause" shall mean any termination of the
Employee's employment resulting from Employee's engaging in fraud,
misappropriation of funds or embezzlement against the Company.
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4.2 If Employee is terminated from employment without cause, the
Company shall provide to Employee a twelve-month evergreen severance provision
whereby Employee's base salary, bonus, benefits and options shall continue for
twelve months.
Any termination of Employee's employment resulting from: (i)
Employee's death; (ii) Employee's inability to perform the essential functions
of her job with or without reasonable accommodation for 180 consecutive business
days or 300 of 365 total days; or (iii) Employee's resignation from her
positions with the Company within 30 days after the receipt of written notice
from the Company informing Employee that her base salary rate shall be reduced
below its then current level (the "Salary Reduction Notice"), or within 30 days
of a reduction in duties, title or responsibility, or within 30 days of a change
in location, a change in control or a breach of this Agreement, shall be deemed
to be a termination by the Company without cause. Bonuses to be earned in
accordance with an incentive compensation bonus program applicable to the fiscal
year in which Employee is terminated will be determined by prorating the full
amount of the bonus, which would have been earned, had Employee been employed
for the full fiscal year by the number of days employed during the fiscal year.
Incentive stock options to be vested upon the attainment of certain performance
goals applicable to the fiscal year in which Employee is terminated shall be
accelerated and vested as of the Employee's termination date. Bonus shall be
payable no later than 90 days following the close of the fiscal year that
Employee is terminated.
Such severance shall be paid to Employee in the form of regular
payroll checks, less deductions for taxes and withholdings, in equal
installments during the severance period following Employee's termination. The
Company shall continue to pay to Employee her salary at the annual rate in
effect immediately prior to such termination (unless such termination occurs as
a result of the Employee's resignation from her positions with the Company
within 30 days after receipt of the
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Salary Reduction Notice, in which case such payments shall be at the annual
salary rate in effect immediately prior to the receipt of the Salary Reduction
Notice) for the severance period. Employee shall have the option of accepting a
lump sum payment of severance provision calculated by discounting the stream of
payments utilizing a discount rate of fifteen percent (15%).
In the event that participation in any such benefits package is
barred, the Company shall arrange to provide Employee with benefits during the
severance period substantially similar to those which she is entitled to
receive, or reimburse her for her costs of securing independent benefits
coverage substantially similar to the benefits package available to her prior to
termination, including gross up for any tax cost incurred as a result.
In the event the Company replaces the benefits package available to
senior officers of the Company during the Employee's severance period, Employee
shall be entitled to participate in any such replacement package, provided,
however, that if the new benefits package is substantially worse, in the
aggregate, than the benefits package available to Employee prior to termination,
the Company shall arrange to provide her with benefits substantially similar to
those which she is entitled to receive, or reimburse her for her costs of
securing independent benefits coverage substantially similar to the benefits
package available to her prior to termination.
In the event of a breach of this Agreement by the Company, Employee
is eligible, at Employee's option, to receive severance pay in accordance with
the twelve-month evergreen severance provision set forth above. Such severance
payment and acceleration of options as set forth in this Section 4.2 shall be
Employee's sole remedy at law or in equity against Company for any breach of
this agreement and Employee shall sign a full and final release of claims, in a
form acceptable to Company, as a condition of receiving such severance payment.
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The Company and Employee mutually agree not to make or utter any
disparaging comments about one another, including the Company's past, present
and future officers, directors and or employees, and both the Company and the
Employee agree not to take any action to injure or harm one another's reputation
or business relationships.
5. COVENANTS OF EMPLOYEE.
5.1 Employee acknowledges that during the course of her employment
by the Company she will have access to trade secrets and other confidential
information with respect to the business, operations, accounts, books and
records, sales, customers, pricing, marketing, development, testing, scientific
research and other activities of the Company ("Trade Secrets"). Accordingly,
Employee shall, at all times, keep secret and inviolate all Trade Secrets, which
she now knows or may hereafter come to know. In addition, Employee shall at no
time copy, remove from the premises of the Company or retain, without the prior
consent of the Company, any Trade Secrets, including, but not limited to,
unpublished records, agreements, books of account, corporate documents, work
papers, correspondence, customer lists, memoranda, computer software or
documentation in connection therewith, plans, drawings or copies or extracts
from any of the foregoing, except as may be required in the normal operation of
the Company's business. Upon the termination of Employee's employment, Employee
shall promptly return to the Company all Trade Secrets in her possession or
under her control and shall verify in writing her return of same as a condition
to receipt of any severance pay.
5.2 Employee agrees that during the term hereof (except as permitted
hereunder) and for a period of time equivalent to the length of Employee's
severance benefit following the termination of her employment, whether by
Company or by Employee, with or without cause, she will not engage in the
Business within any County or State where Company has conducted or may
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hereafter conduct any activities; or, own, manage, operate, control, or
participate in, or have any ownership interest in a similar business as the
Business described in Recital A, provided, however, that Employee may own any
securities of any publicly owned and traded entity in which Employee owns less
than five percent (5%) interest, which is engaged in the business similar to or
competitive with the business of the Company.
5.3 Employee agrees that for a period of time equivalent to the
length of Employee's severance benefit following the termination of her
employment, whether by Company or by Employee, with or without cause, she will
not, directly or indirectly, solicit the Company's employees. If during the
severance period, Employee is involved in a similar business as the Business
described in Recital A, Employee will not attempt to divert or take away,
solicit or contact for purposes related to the Business, any of the Company's
customers and she shall refrain from committing any act which would in any way
jeopardize any relationship the Company has with any such customer.
5.4 Employee hereby assigns to the Company any and all right, title
and interest Employee has or may have in any product, invention, device, method,
technique or formula created (in whole or in part) by her during the term
hereof, if such product, invention, device, method, technique or formula is
created during the hours in which Employee is employed or with the use or
assistance of the Company's facilities, materials or personnel. Employee shall
execute, acknowledge and deliver all documents and/or instruments, which may be
requested by the Company in order to effectuate such assignment.
5.5 The Company shall have the royalty-free right to use in the
Business and to make, use and sell products and processes derived from any
inventions, discoveries, concepts and ideas (whether or not patentable or
copyrightable), including but not necessarily limited to processes,
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methods, formulae and techniques, as well as derivatives or improvements thereof
or know-how related thereto, which are conceived or made by Employee during the
term of, during the hours in which Employee is employed by the Company or with
the use or assistance of the Company's facilities, materials or personnel.
5.6 Company and Employee agree that the remedy at law for any breach
of the foregoing provisions of Section 5 will be inadequate, and either party
shall be entitled to both temporary and permanent injunctive relief enforcing
such provisions, in addition to any other remedy it may have at law or in
equity.
5.7 The covenants of Company and Employee contained in this Section
5 are separate and independent of any other provisions hereof and shall survive
the termination of this Agreement.
5.8 Employee has carefully considered the nature and extent of the
restrictions upon her and the rights and remedies conferred upon the Company,
and she hereby acknowledges and agrees that the same are reasonable in time and
territory, are designed to eliminate competition which otherwise would be unfair
to the Company, are fully required to protect the legitimate interest of the
Company, and do not confer a benefit upon the Company disproportionate to the
detriment to Employee.
6. REPRESENTATIONS BY EMPLOYEE. Employee represents and warrants to
the Company that (a) Employee has the legal right, power and authority to enter
into this Agreement and perform the obligations imposed upon her, (b) there are
no legal proceedings pending, or to the knowledge of Employee, threatened
against Employee which would in any way adversely affect the performance of the
obligations, and (c) Employee is not a party to any restrictive covenant,
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agreement, contract or instrument which would in any way prohibit Employee from
entering into or performing such obligations.
7. REPRESENTATIONS BY COMPANY. Company represents and warrants to
the Employee that (a) Company has the legal right, power and authority to enter
into this Agreement and perform the obligations imposed upon it, (b) there are
no legal proceedings pending, or to the knowledge of Company, threatened against
Company which would in any way adversely affect the performance of the
obligations, and (c) Company is not a party to any restrictive covenant,
agreement, contract or instrument which would in any way prohibit Company from
entering into or performing such obligations.
8. INDEMNIFICATION; INSURANCE. The Company will indemnify Employee
to the maximum extent permitted by law (including advancing expenses where
appropriate) with respect to actions taken by her as an officer or director of
the Company, any of its subsidiaries, or any affiliated entity of the Company or
any of its subsidiaries. The Company's obligation to provide indemnification
shall survive termination of employment. The Company will also maintain in
effect during Employee's employment hereunder directors and officer liability
insurance with minimum coverage of $5,000,000 per occurrence and $5,000,000 in
the aggregate. Employee will remain insured under such policy until the fifth
anniversary of termination of Employee's employment with the Company.
9. NOTICES. All notices hereunder shall be in writing and shall be
deemed to have been given at the time when mailed in any general or branch of
the United States Post Office enclosed in a registered or certified, postage
prepaid envelope addressed to the address of the respective parties as set forth
below, or to such other address as a party may have fixed by notice as stated
below:
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TO EMPLOYEE: TO THE COMPANY:
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Xxxxxx X. Xxxxx Xxxxxxx X. Xxxxxxx, President and CEO
00000 Xxx Xxxxx Xxxxx Empyrean Bioscience, Inc.
Xxxxxxx, Xxxx 00000 00000 Xxxxxxxx Xxxx Xxxxx
Xxxxx X
Xxxxxxxxx, Xxxx 00000
10. SEVERABILITY. The invalidity or unenforceability of any portion
of this Agreement shall not impair or affect the validity or enforceability of
any other portion of this Agreement, which shall remain in full force and
effect.
11. ASSIGNMENT. Employee shall not assign, transfer, pledge or
encumber this Agreement or any rights or obligations hereunder. The Company may
not assign or transfer this Agreement to successor Company in the event of
merger, consolidation, or transfer or sale of all or substantially all of the
assets of the Company without prior written approval of Employee; provided,
however, that in the case of any such assignment or transfer, this Agreement
shall be binding upon and inure to the benefit of such transferee, which shall
assume and perform all of the obligations of the Company hereunder.
12. WAIVER. A waiver by either party of a breach of any provisions
of this Agreement shall not operate or be construed to be a waiver of any
subsequent breach.
13. ARBITRATION. Any controversy, dispute or claim arising out of
Employee's employment or relating to this Agreement, including but not limited
to any such controversy, dispute or claim concerning breach or enforceability of
the Agreement, will be resolved in binding arbitration in Cuyahoga County, Ohio.
Such arbitration will be in accordance with the Commercial Rules of the American
Arbitration Association, and judgment upon the award may be entered in any court
of competent jurisdiction. However, nothing will prevent any of the Parties from
obtaining
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provisional relief (temporary restraining order, preliminary injunction, or
similar relief) in court as an adjunct to the arbitration proceedings. Each
party in any action, proceeding or arbitration arising out of or relating to
this Agreement will bear its own cost of such action.
14. MISCELLANEOUS. This Agreement (a) shall be governed by and
interpreted in accordance with the local laws of the State of Ohio, (b) shall
not be modified except in a writing signed by the parties, (c) constitutes the
entire understanding of the parties with respect to the subject matter hereof,
superseding all prior understandings and agreements (both oral and written), and
(d) shall be binding upon and inure to the benefit of the parties hereto, their
heirs, executors, administrators, successors and permitted assigns. The
paragraph headings are for convenience only and shall not affect the
construction or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
in multiple counterparts at the place and as of the date and year first above
written.
EMPYREAN BIOSCIENCE, INC. (Company)
By:______________________________________
Xxxxxxx X. Xxxxxxx, President and CEO
_________________________________________
XXXXXX X. XXXXX (Employee)
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