EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT entered into as of October 27, 1998 by and between
MISONIX, INC., a New York corporation, with principal offices at 0000 Xxx
Xxxxxxx, Xxxxxxxxxxx, Xxxx, Xxx Xxxx 00000 ("Employer") and XXXXXXX X. XXXXXXX,
XX., with his address at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxx 00000
("Executive").
A. Employer, a engaged in the business of developing, manufacturing and/or
marketing medical, scientific, and industrial ultrasonic and air
pollution systems ("Employer's Business"); and
B. Employer wants to employ Executive, and Executive wants to accept such
employment, on the terms and conditions set forth in this Agreement.
In consideration of the facts mentioned above, and of the covenants and
conditions set out below, the parties agree as follows:
1. Employment
(a) During the Term of Employment as defined in Section 2,
Employer agrees to employ Executive as an executive, subject to the
overall direction and control of the Board of Directors of Employer.
Executive agrees to act in the foregoing capacity, in accordance with
the terms and conditions contained in this Agreement. The Executive
will have, at all times during the term of this Agreement, the title of
President and Chief Executive Officer.
(b) Executive shall devote substantially all of his working time
to Employer's Business as conducted from time to time. It is agreed
that Executive's service on the board of directors of the other
companies described on the attached list is acceptable. Executive shall
render services, without additional compensation, in connection with
the operation of Employer's Business, including activities of
affiliates and subsidiaries of the Employer as may exist from time to
time. Executive also agrees to serve as a member of the board of
directors, if elected, of Employer and/or any subsidiaries or
affiliates, without additional compensation.
2. Term
The term of Executive's employment under this Agreement shall commence
on November 2, 1998 and end on October 31, 2000 (the "Initial Term").
Thereafter, this Agreement shall be automatically renewed and extended
for consecutive one year renewal terms, unless either party sends to
the other party a notice of non-renewal at least sixty (60) days prior
to the expiration of the Initial Term or any renewal term (the "Renewal
Term"). The Initial Term and Renewal Term are subject to earlier
termination as set forth in Section 5. The actual term of employment is
defined as the "Term of Employment."
3. Compensation
(a) Employer shall pay to Executive an annual base salary of Two
Hundred Fifty Thousand ($250,000.00) Dollars per annum during the Term
of Employment. All payments shall be made in equal monthly
installments, in arrears, or such other installments as may be
consistent with the payroll practices of Employer for its executives.
(b) In addition to the compensation set forth in Section 3(a),
Executive may receive an annual bonus, solely in the discretion of the
Board of Directors, pursuant to a formula to be mutually agreed upon.
Any payments to be made under this Section shall be paid within 90 days
of the end of the calendar year for which such incentive bonus relates.
Notwithstanding the foregoing, during the first year of the Initial
Term, Executive shall receive a bonus of no less than Two Hundred
Twenty Five Thousand ($225,000.00) Dollars to be paid in January, 2000.
4. Additional Executive Benefits
(a) Employer shall reimburse Executive for all expenses reasonably
incurred by Executive in connection with the performance of Executive's
duties under this Agreement against Executive's pre-submitted
documented vouchers for such expenses. Executive shall be entitled to
the use of an automobile, at the Company's expense.
(b) Executive shall be entitled to five weeks of vacation each
year (no more than three of which shall be in the same six month
period) and all other general medical and Executive benefit plans
(including profit sharing or pension plans) as shall have been
established and are continuing for executives of Employer; to the
extent possible, Executive shall be immediately qualified for such
benefits.
(c) Executive shall receive options under Employer's Stock Option
Plan covering an aggregate of 250,000 shares of Employer's Common Stock
exercisable at the fair market value thereof on the opening of business
on November 2, 1998 (the commencement of the Initial Term), out of
which the right to exercise such option for up to 125,000 shall
immediately vest on the commencement date of the Initial Term and the
right to exercise such options for the balance shall vest November 2,
1999. The options shall be in customary form granted under such plan
and shall be exercisable for ten (10) years from the date of grant,
unless sooner terminated in accordance with its terms.
5. Termination
(a) Employer may terminate this Agreement for cause.
(b) "Cause" within the meaning of this Agreement shall mean:
(i) Executive's breach of the provisions of Section 6.
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(ii) Failure by Executive to comply in any material
respect with the terms of this Agreement, if any, or
any written policies or directives of the Board as
determined by the Board in good faith in its sole
discretion, which has not been corrected by Executive
within 10 days after written notice from the Employer
of such failure.
(iii) Physical incapacity or disability of Executive to
perform the services required to be performed under
this Agreement. For purposes of this Section
5(b)(iii), Executive's incapacity or disability to
perform such services for any cumulative period of
one hundred twenty (120) days during any twelve-month
period, or for any consecutive period of ninety (90)
days, shall be deemed "cause" hereunder.
(iv) Executive is convicted of, pleads guilty to,
confesses to any felony or any act of fraud,
misappropriation or embezzlement.
(v) Executive engages in a fraudulent act or dishonest
act to the damage or prejudice of Employer and its
affiliates or in conduct or activities damaging to
the property, business or reputation of Employer and
its affiliates, all as determined by the Board in
good faith in its sole discretion.
(c) If Employer notifies Executive of its election to terminate
this Agreement for cause, this termination shall become effective at
the time notice is deemed to have been given in accordance with Section
9 and all payments earned and due Executive shall be paid in full at
that time.
(d) This Agreement shall automatically terminate upon the death of
Executive.
6. Non-Competition and Non-Disclosure
(a) Notwithstanding any other provisions in this Agreement,
nothing in this Agreement shall prohibit Executive from acquiring or
owning without disclosure to the Employer less than 1% of the
outstanding securities of any class of any competing corporation that
are listed on a national securities exchange or traded in the
over-the-counter market.
(b) During and after the Term of Employment and for a period of
eighteen (18) months thereafter, Executive covenants and agrees that
Executive shall keep strictly confidential all non-public proprietary
information which Executive may obtain during the course of Executive's
employment with respect to the business practices, finances,
developments, marketing, sales, customers, affairs, trade secrets and
other confidential information of Employer which shall remain the
Employer's exclusive property and the Executive shall not disclose the
same, except solely in the course of business on behalf of and for the
benefit of Employer pursuant to this Agreement, except to the extent
that the same is then: (i) publicly available without any act of
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Executive through a party not violating its obligations to Employer; or
(ii) required to be disclosed under the laws of the United States or
any state in any judicial or administrative proceeding. Executive
further agrees that immediately upon the termination of his employment
(irrespective of the time, manner or cause of termination), Executive
will surrender and deliver to Employer all (1) lists, books, records,
memoranda and data, computer discs, computer access codes, magnetic
media, software, of every kind relating to or in connection with
Employer's Business and customers and suppliers of Employer, and (2)
all of Employer's personal and physical property.
(c) During the Term of Employment and for a period of eighteen
(18) months thereafter, Executive covenants and agrees that Executive
shall not compete, directly or indirectly, with Employer in Employer's
Business.
(d) During the Term of Employment and for a period of eighteen
(18) months thereafter, Executive covenants and agrees that Executive
shall not, alone or with others, directly or indirectly:
(i) solicit for Executive's benefit or the benefit of any
person or organization other than Employer, the
employment or other services of any Executive or
consultant of Employer; or
(ii) solicit for Executive's benefit or the benefit of any
person or organization other than Employer, the
employment of any Executive of any customer of
Employer, to compete in an area of business activity
similar to that conducted by Employer.
7. Representation and Indemnification
Executive hereby represents and warrants that he is not a party to any
agreement, whether oral or written, which would prohibit him from being employed
by Employer, and Executive further agrees to indemnify and hold Employer, its
directors, officers, shareholders and agents, harmless from and against any and
all losses, cost or expense of every kind, nature and description (including,
without limitation, whether or not suit be brought, all reasonable costs,
expenses and fees of legal counsel), based upon, arising out of or otherwise in
respect of any breach of such representation and warranty.
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8. Resolution of Disputes
All disputes arising hereunder shall be finally determined by
arbitration in the City and State of New York in accordance with the rules of
the American Arbitration Association then obtaining, or any successor
organization thereto. Such arbitration shall be conducted by a three person
panel, one of whom is selected by each party and the third selected by the two
arbitrators or, if the arbitrators cannot agree, selected from the lists of the
American Arbitration Association. The arbitrators shall not have the power to
abrogate, alter, modify or amend any of the provisions of this Agreement. Any
award entered by the arbitrators shall be final and judgment thereon may be
entered in any court having jurisdiction. Each party shall bear its own costs in
connection with such arbitration. Notwithstanding the foregoing, Employer shall
have the right to seek injunctive relief to maintain the status quo and/or to
prevent violation of the terms thereof pending final determination of the rights
and remedies of the parties in an arbitration proceeding.
9. Notices
All notices shall be in writing and shall be delivered personally
(including by courier), sent by facsimile transmission (with appropriate
documented receipt thereof), by overnight receipted courier service (such as UPS
or Federal Express) or sent by certified, registered or express mail, postage
prepaid, to the parties at their address set forth at the beginning of this
Agreement with Employer's copy being sent to Employer at its then principal
office. Any such notice shall be deemed given when so delivered personally, or
if sent by facsimile transmission, when transmitted, or, if mailed, forty-eight
(48) hours after the date of deposit in the mail. Any party may, by notice given
in accordance with this Section to the other party, designate another address or
person for receipt of notices hereunder. Copies of any notices to be given to
Employer shall be given simultaneously to: Xxxxxxx & Xxxxxx LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxxxx, Esq..
10. Change of Control
(a) After a Change in Control of Employer as defined under
subparagraphs (b) and (c) hereafter, Executive shall be entitled to a
one-time additional compensation in an amount equal to a payment of six
months annual base salary. Such additional compensation will be paid to
Executive in a lump sum within sixty (60) days after the date such
Change in Control takes effect and Executive's employment by Employer
ceases. Said amount shall be determined by counsel to Employer in
consultation with the Employer's auditors.
(b) A "Change in Control" shall be deemed to have occurred in the
event (i) any person (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934 (the "Exchange Act"), or group
of such "persons", without the consent of the Board of Directors, is or
becomes a "beneficial owner" (as defined in Rule 13d-3 of the Exchange
Act), directly or indirectly, of securities of Employer representing
30% or more of the combined voting power of Employer's then outstanding
securities, or (ii) of a merger, consolidation or other combination the
result of which is the ownership by shareholders of Employer of less
than 60% of those voting securities of the resulting
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or acquiring entity having the power to elect a majority of the Board
of Directors of such entity.
(c) Notwithstanding anything in the foregoing to the contrary, no
Change of Control shall be deemed to have occurred for purposes of this
Agreement requiring payment to Executive of the fee referred to in
subparagraph (b) by virtue of (i) any transaction which results in the
Executive or a group of persons which includes the Executive,
acquiring, directly or indirectly, 30% or more of any class of voting
securities of the Employer, or (ii) if Executive continues in the
employ of Employer more than six (6) months following the occurrence of
an event which would otherwise constitute a Change of Control.
11. Miscellaneous
(a) This Agreement shall be governed in all respects, including
validity, construction, interpretation and effect, by New York law.
(b) This Agreement may be amended, superseded, canceled, renewed
or extended, and the terms hereof may be waived, only by a written
instrument signed by authorized representatives of the parties or, in
the case of a waiver, by an authorized representative of the party
waiving compliance. No such written instrument shall be effective
unless it expressly recites that it is intended to amend, supersede,
cancel, renew or extend this Agreement or to waive compliance with one
or more of the terms hereof, as the case may be. No delay on the part
of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of
any party of any such right, power or privilege, or any single or
partial exercise of any such right, power or privilege, preclude any
further exercise thereof or the exercise of any other such right, power
or privilege. The rights and remedies herein provided are cumulative
and are not exclusive of any rights or remedies that any party may
otherwise have at law or in equity.
(c) If any provision or any portion of any provision of this
Agreement or the application of any such provision or any portion
thereof to any person or circumstance, shall be held invalid or
unenforceable, the remaining portion of such provision and the
remaining provisions of this Agreement, or the application of such
provision or portion of such provision as is held invalid or
unenforceable to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and
such provision or portion of any provision as shall have been held
invalid or unenforceable shall be deemed limited or modified to the
extent necessary to make it valid and enforceable; in no event shall
this Agreement be rendered void or unenforceable.
(d) The headings to the Sections of this Agreement are for
convenience of reference only and shall not be given any effect in the
construction or enforcement of this Agreement.
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(e) This Agreement shall inure to the benefit of and be binding
upon the successor and assigns of Employer, but no interest in this
Agreement shall be transferable in any manner by Executive.
(f) This Agreement constitutes the entire agreement and
understanding between the parties and supersedes all prior discussions,
agreements and undertakings, written or oral, of any and every nature
with respect thereto.
(g) This Agreement may be executed by the parties hereto in
separate counterparts which together shall constitute one and the same
instrument.
(h) In the event of the termination or expiration of this
Agreement, the provisions of Sections 6 hereof shall remain in full
force and effect, in accordance with its terms.
IN WITNESS WHEREOF, this Agreement has been executed as of the date
stated at the beginning of this Agreement.
MISONIX, INC.
By: /s/ Xxxx Xxxxxx
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/s/ Xxxxxxx X. XxXxxxx, Xx.
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Executive - Xxxxxxx X. XxXxxxx, Xx.
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SCHEDULE A
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BOARD COMMITMENTS
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United States Olympic Committee
"A Bank"
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