EXHIBIT 10.3
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EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT (the "Agreement") dated September 21, 2006 by and
between Genotec Acquisition Corporation ("Genotec" or the "Company") , a New
Jersey corporation with an address at 0 Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000 (the
"Company"), and Xxxxxx Xxxxxxxx, an individual having his office at 000 Xxxxxxx
Xxxx Xxxx Xxxx, XX 00000 (the "Employee").
W I T N E S S E T H
WHEREAS, the Company, Genotec Nutritionals, Inc., a Delaware
corporation ("Seller"), Xxxxxx Xxxxxxxxxx, an individual ("Kontonotas"), Xxxxxx
Xxxxxxxx, an individual ("Xxxxxxxx"), Xxxxx Xxxxxxxx, an individual
("Xxxxxxxx"), (Kontonotas, Freedman, and Xxxxxxxx shall be collectively referred
to herein as the "Shareholders"), MM(2) Group, Inc. , a New Jersey corporation
("MM2") entered into an Asset Purchase Agreement dated September 27, 2006 (the
"Asset Purchase Agreement"); and
WHEREAS, the Company desires that Employee be employed by it and render
services to it, and Employee is willing to be so employed and to render such
services to the Company, all on the terms and subject to the conditions
contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT
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Subject to and upon the terms and conditions contained in this
Agreement, the Company hereby employs Employee, for the period set forth in
Paragraph 2 (subject to the terms and conditions of this Agreement), to render
the services to the Company, its affiliates and/or subsidiaries described in
Paragraph 3.
2. TERM
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Employee's term of employment under this Agreement shall commence on
September 21, 2006 (the "Commencement Date") and shall continue for a period
terminating on September 30, 2009 (the "Expiration Date"), unless earlier
terminated under the terms and conditions herein (the "Employment Term").
3. DUTIES
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(a) The Employee agrees that he will serve the Company on a
full-time basis faithfully and to the best of his ability as Vice President -
Product Development, subject to the general supervision of the Chief Executive
Officer of the Company. Employee shall be based in the Company's offices in Deer
Park, New York.
(b) The Employee's duties are subject to change, as determined by
the Chief Executive Officer and/or the Company's Board of Directors. The
Employee's primary areas of responsibility include, but are not limited to
developing new products for the Company ...........................
(c) Employee agrees to abide by all By-Laws and policies of the
Company, as promulgated from time-to-time by the Company.
(d) Employee will serve as a member of the Company's Management
Committee or as otherwise directed by the Chief Executive Officer of the
Company.
4. EXCLUSIVE-SERVICES AND BEST EFFORTS
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Employee shall devote his entire working time, attention, best efforts
and ability exclusively to the service of the Company, its affiliates and
subsidiaries during the term of this Agreement. Employee will be permitted to
provide limited management services to the business of CardioCeuticals LLC only
through September 30, 2006. Deviations from this shall require written approval
by the Chief Executive Officer or the Company's Board of Directors.
5. COMPENSATION
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(a) Base Salary. Commencing on the Commencement Date, and for the
next twelve (12) months following the Commencement Date, the Employee shall
receive an annual salary, payable bi-weekly, in the amount of Seventy Thousand
Dollars ($70,000), subject to all required federal, state and local payroll
deductions. The Employee's base salary shall be increased on each anniversary of
the Commencement Date as deemed appropriate by the Chief Executive Officer with
the approval of the Board of Directors of the Company.
(c) Additional Compensation. Following the first anniversary of
the Commencement Date, the Employee may be paid a bonus as set forth in
Attachment A herein.
(d) Stock Options. The Employee shall participate in the
Company's Incentive Stock Option Plan at the sole discretion of the Board of
Directors of the Company.
6. BUSINESS EXPENSES
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Employee shall be reimbursed for only those business expenses incurred
by him (a) which are reasonable and necessary for Employee to perform his duties
under this Agreement in accordance with policies established from time-to-time
by the Company, and (b) for which Employee has submitted vouchers and/or
receipts.
7. EMPLOYEE BENEFITS, VACATIONS, PERSONAL DAYS
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During the term of this Agreement:
(a) The Employee shall participate in the Company's health
insurance program covering herself and her immediate family at no cost to the
Employee. Should Employee elect not to participate in the Company's health
insurance program, then in lieu of such participation, the Employee shall
receive a Six Hundred Dollar ($600) per month expense allowance.
(c) The Employee shall be entitled to four (4) weeks of vacation,
sick and/or personal days per annum during the Employment Term beginning on the
Commencement Date, to be planned and taken (where possible) at such times as may
be mutually agreed upon by the Chief Executive Officer of the Company and the
Employee. Vacation may not be carried over from one calendar to the next. Any
vacation earned and not used in the calendar year in which it is earned will be
lost. The Employee shall also be entitled to have off all published holidays of
the Company, as announced on December 31st of each year for the following
calendar year. During the term of this Agreement:
8. DEATH AND DISABILITY
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(a) The Employment Term shall terminate on the date of Employee's
death, in which event Employee's base salary payable pursuant to Paragraph 5
through the last day of the month in which the Employee's death did occur shall
be paid to his estate. Employee's estate will not be entitled to any other
compensation upon termination of this Agreement pursuant to this Paragraph 9(a).
(b) If during the Employment Term, Employee, because of physical
or mental illness or incapacity, shall become substantially unable to perform
the duties and services required of him under this Agreement for a period of
sixty (60) consecutive days or one hundred twenty (120) days in the aggregate,
the Company may, upon at least ten (10) days' prior written notice given at any
time after the expiration of such 60 or 120-day period, as the case may be,
provide Employee with a written notice of its intention to terminate this
Agreement as of such date as may be set forth in the notice. In case of such
termination, Employee shall be entitled to receive his salary payable pursuant
to Paragraph 5, through the date of termination. Employee will not be entitled
to any other compensation upon termination of this Agreement pursuant to this
Paragraph 9(b).
9. TERMINATION
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(a) The Company may terminate the employment of Employee "FOR
CAUSE" during the Employment Term. Upon such termination, except as set forth
herein, the Company shall be released from any and all further obligations under
this Agreement, except that the Company shall be obligated to pay Employee the
unpaid prorated base salary pursuant to Paragraph 5 earned or accrued up through
the day on which Employee is terminated.
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(b) As used herein, the term "FOR CAUSE" shall mean:
(i) any material breach of this Agreement by Employee that,
in the case of a breach that may be cured or remedied, is not cured or remedied
to the reasonable satisfaction of the Company within 30 days after written
notice is given by the Company to Employee, setting forth in reasonable detail
the nature of such breach;
(ii) Employee's failure to perform his duties and services
hereunder to the reasonable satisfaction of the Chief Executive Officer or the
Board of Directors of the Company that, in the case of any such failure that may
be cured or remedied, is not cured or remedied to the reasonable satisfaction of
the Company within 30 days after notice is given by the Company to Employee,
setting forth in reasonable detail the nature of such failure;
(iii) any material act, or material failure to act, by
Employee in bad faith and to the material detriment of the Company; or
(iv) commission by Employee of a material act involving
moral turpitude, dishonesty, unethical business conduct, or any other conduct
which significantly impairs the reputation of the Company, its subsidiaries or
affiliates.
(v) the conviction of the Employee of a felony, including
the plea of nolo contendre.
(c) The Employee may terminate this Agreement if MM2 fails to
contribute the Additional Investment as set forth in Section 6.3(a) of the Asset
Purchase Agreement within eighteen (18) months from the Closing Date of the
Asset Purchase Agreement.
10. DISCLOSURE OF INFORMATION AND RESTRICTIVE COVENANT
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(a) The Employee acknowledges that the Employee has been informed
that it is the policy of the Company to maintain as secret and confidential all
information
(i) relating to the products, processes, designs and/or
systems used by the Company and its Affiliates and
(ii) relating to the customers and employees of the Company
and its Affiliates. Confidential information and trade secrets include, but are
not limited to, customer and client lists, price lists, marketing and sales
strategies and procedures, operational and equipment techniques, business plans
and systems, quality control procedures and systems, special projects and
technological research, including projects, research and reports for any entity
or client or any project, research, report or the like concerning sales or
manufacturing or new technology, employee compensation plans and any other
information relating thereto, and any other records, files, drawings,
inventions, discoveries, applications or processes which are not in the public
domain (all the foregoing shall be referred to herein as the "Confidential
Information"). The Employee further acknowledges that such Confidential
Information is of great value to the Company.
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For purposes of this Agreement, "Affiliates" means any person or entity
or group of persons or entities acting together that, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the Company.
The parties recognize that the services to be performed by the Employee
are special and unique, and that by reason of his employment by the Company, the
Employee has and will acquire Confidential Information as stated above. The
parties confirm that it is reasonably necessary to protect the Company's (and
its Affiliates') goodwill, and accordingly the Employee does agree that the
Employee shall not and will not directly or indirectly (except where authorized
by the Board of Directors of the Company for the benefit of the Company or
agreed in writing by the Company and the Employee):
A. At any time during his employment by the Company or after
the Employee ceases to be employed by the Company, divulge to any persons, firms
or corporations, other than the Company (hereinafter referred to collectively as
"third parties"), or use or allow or cause or authorize any third parties to
use, any such confidential information; and
B. At any time during his employment by the Company and for
a period of twenty four (24) months after the Employee ceases to be employed by
the Company, solicit or cause or authorize directly or indirectly to be
solicited, for or on behalf of the Employee or third parties, in connection with
any Competitive Activity within two (2) years prior to the cessation of his
employment hereunder, customers of the Company or its affiliates; and
C. At any time during his employment by the Company and for
a period of twenty four (24) months after the Employee ceases to be employed by
the Company, accept or cause or authorize directly or indirectly to be accepted,
for or on behalf of the Employee or third parties, in connection with any
Competitive Activity from any such customers of the Company or its affiliates;
and
D. At any time during his employment by the Company and for
a period of twenty four (24) months after the Employee ceases to be employed by
the Company, solicit or cause or authorize directly or indirectly to be
solicited for employment, for or on behalf of the Employee or third parties, any
persons (excluding any individuals residing in the same immediate primary
residence as the Employee, and/or the Employee's immediate family) who were at
any time within one year prior to the cessation of his employment hereunder,
employees of the Company or its affiliates; and
E. At any time during his employment by the Company and for
a period of twenty four (24) months after the Employee ceases to be employed by
the Company, employ or cause or authorize directly or indirectly to be employed,
for or on behalf of the Employee or third parties, any such employees of the
Company or its affiliates.
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F. Notwithstanding anything to the contrary, the Employee
will be permitted to provide limited management services to the business of
CardioCeuticals LLC only through September 30, 2006.
G. The Employee may continue to conduct his optometry
practice on Thursday mornings until twelve (12) o'clock noon and an additional
four (4) hours on Fridays.
(b) The Employee agrees that, upon the expiration of his
employment by the Company for any reason, the Employee shall forthwith deliver
up to the Company any and all records, drawings, notebooks, keys and other
documents and material, and copies thereof in his possession or under his
control which is the property of the Company or which relate to any confidential
information or any discoveries of the Company.
(c) The Employee agrees that any breach or threatened breach by
the Employee of any provision of Paragraphs 10 and 11 shall entitle the Company,
in addition to any other legal remedies available to it, to enjoin such breach
or threatened breach through any court of competent jurisdiction. The parties
understand and intend that each restriction agreed to by the Employee herein
above shall be construed as separable and divisible from every other
restriction, and that the unenforceability, in whole or in part, of any
restriction will not affect the enforceability of the remaining restrictions,
and that one or more or all of such restrictions may be enforced in whole or in
part as the circumstances warrant.
(d) For the purposes of this Section, the term "Company" shall
mean and include any and all subsidiaries, parents and affiliated corporations
of the Company in existence from time to time, for which the Company has
operational control.
(e) Employee will not induce or persuade other employees of the
Company to join him in any activity prohibited by Paragraph 10 or 11.
(f) This Paragraph 10 and Paragraphs 11, 12, 13, 14, 19 and 20
shall survive the expiration or termination of the Agreement for any reason,
except Paragraph 10.B, 10.C, 10.D and 10.E shall terminate upon: (i) the
Employee's resignation and MM2 failing to contribute the Additional Investment
as set forth in Section 6.3(a) of the Asset Purchase Agreement within eighteen
(18) months from the Closing Date of the Asset Purchase Agreement or (ii) the
Company failing to pay the Employee his Base Salary and/or commissions on a
timely basis or (iii) the wrongful termination of the Employee by the Company as
determined by a court of competent jurisdiction.
(g) It is expressly agreed by Employee that the nature and scope
of each of the provisions set forth in Paragraphs 10 and 11 are reasonable and
necessary. If, for any reason, any aspect of these provisions as they apply to
Employee is determined by a court of competent jurisdiction to be unreasonable
or unenforceable, the provisions shall only be modified to the minimum extent
required to make the provisions reasonable and/or enforceable, as the case may
be. Employee acknowledges and agrees that his
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services are of a unique character and expressly grants to the Company or any
subsidiary, successor or assignee of the Company, the right to enforce the
provisions above through the use of all remedies available at law or in equity,
including, but not limited to, injunctive relief.
(h) For purposes of this Section 10, "Competitive Activity" shall
mean any activity relating to, in respect of or in connection with, directly or
indirectly, any and all products that the Seller offered to its customers or
anticipated to offer to its customers immediately prior to the Closing Date of
the Asset Purchase Agreement or two (2) years prior to the Employee's employment
terminated, except: (i) for the Brokerage Business conducted by Kontonotas prior
to the Closing date and (ii) the business of CardioCeuticals LLC and [the mail
order business] only through September 30, 2006.
11. COMPANY PROPERTY
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(a) Any products, patents, inventions, discoveries, applications,
processes or designs, devised, planned, applied, created, discovered or invented
by Employee in the course of Employee's employment under this Agreement and
which pertain to any aspect of the Company's or its respective subsidiaries' or
affiliates' businesses shall be the sole and absolute property of the Company,
and Employee shall make prompt report thereof to the Company and promptly
execute any and all documents reasonably requested to assure the Company the
full and complete ownership thereof.
(b) All records, files, lists, including computer generated
lists, drawings, documents, equipment and similar items relating to the
Company's business which Employee shall prepare or receive from the Company
shall remain the Company's sole and exclusive property. Upon the expiration of
this Agreement, or, if earlier, upon demand by the Company, Employee shall
promptly return to the Company all property of the Company in his possession.
Employee further represents that he will not copy or cause to be copied, print
out or cause to be printed out any software, documents or other materials
originating with or belonging to the Company. Employee covenants that, upon
termination of his employment with the Company, he will not retain in his
possession any such software, documents or other materials.
12. REMEDY
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It is mutually understood and agreed that Employee's services are
special, unique, unusual, extraordinary and of an intellectual character giving
them a peculiar value, the loss of which cannot be reasonably or adequately
compensated in damages in an action at law. Accordingly, in the event of any
breach of this Agreement by Employee, including, but not limited to, the breach
of the non-disclosure, non-solicitation and non-compete clauses under Paragraphs
10 and 11 hereof, the Company shall be entitled to equitable relief by way of
injunction or otherwise in addition to damages the Company may be entitled to
recover. Nothing herein shall be deemed to restrict any remedy available to
Employee for breach of the Agreement by the Company.
13. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE AND THE COMPANY
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(a) In order to induce the Company to enter into this Agreement,
Employee hereby represents and warrants to the Company as follows: (i) Employee
has the legal capacity and unrestricted right to execute and deliver this
Agreement once to perform all of his obligations hereunder: (ii) the execution
and delivery of this Agreement by Employee and the performance of his
obligations hereunder will not violate or be in conflict with any fiduciary or
other duty, instrument, agreement, document, arrangement or other understanding
to which Employee is a party or by which he is or may be bound or subject; and
(iii) Employee is not a party to any instrument, agreement, document,
arrangement or other understanding with any person (other than the Company)
requiring or restricting the use or disclosure of any Confidential Information
or the provision of any employment, consulting or other services.
(b) The Company hereby represents and warrants to Employee, as
follows: (i) the execution, delivery, and performance of this Agreement has been
duly authorized by all necessary corporate action of the Company; and (ii) this
Agreement constitutes the valid and binding obligation of the Company,
enforceable in accordance with its terms, except that such enforcement may be
subject to any bankruptcy, insolvency, reorganization, fraudulent transfer or
other laws, now or hereafter in effect, relating to or limiting creditors'
rights generally.
14. NOTICES
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All notices given hereunder shall be in writing and shall be deemed
upon delivery or attempted delivery, if sent by registered or certified mail,
return receipt requested, or via overnight courier addressed to Employee at his
address set forth on the first page of this Agreement, or to the Company at its
address set forth on the first page of this Agreement, Attention: Chief
Executive Officer, with a copy to Meritz & Xxxxx LLP, 0000 X Xxxxxx, XX,
Xxxxxxxxxx, XX 00000, Attention: Xxxxxxxx X. Xxxxx, or at such address as such
party shall have designated by a notice given in accordance with this Paragraph
14, or when actually received by the party for whom intended, if sent by any
other means..
15. ENTIRE AGREEMENT
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This Agreement constitutes the entire understanding of the parties with
respect to its subject matter and no change, alteration or modification hereof
may be made except in writing signed by the parties hereto. Any prior or other
agreements, promises, negotiations or representations not expressly set forth in
this Agreement are of no force or effect.
16. SEVERABILITY
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If any provision of this Agreement shall be unenforceable under any
applicable law, then notwithstanding such unenforceability, the remainder of
this Agreement shall continue in full force and effect.
17. WAIVERS, MODIFICATIONS, ETC.
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No amendment, modification or waiver of any provision of this Agreement
shall be effective unless the same shall be in writing and signed by each of the
parties hereto, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
18. ASSIGNMENT
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Neither this Agreement, nor any of Employee's rights, powers, duties or
obligations hereunder, may be assigned by Employee. This Agreement shall be
binding upon and inure to the benefit of Employee and his heirs and legal
representatives and the Company and its successors and assigns. Successors of
the Company shall include, without limitation, any corporation or corporations
acquiring, directly or indirectly, all or substantially all of the assets of the
Company, whether by merger, consolidation, purchase, lease or otherwise, and
such successor shall thereafter be deemed "the Company" for the purpose hereof.
19. APPLICABLE LAW
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This Agreement shall be deemed to have been made, drafted, negotiated
and the transactions contemplated hereby consummated and fully performed in the
State of New York and shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law rules
thereof. Nothing contained in this Agreement shall be construed so as to require
the commission of any act contrary to law, and whenever there is any conflict
between any provision of this Agreement and any statute, law, ordinance, order
or regulation, contrary to which the parties hereto have no legal right to
contract, the latter shall prevail, but in such event any provision of this
Agreement so affected shall be curtailed and limited only to the extent
necessary to bring it within the legal requirements.
20. JURISDICTION AND VENUE
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It is hereby irrevocably agreed that all actions, suits or proceedings
between the Company and Employee arising out of, in connection with or relating
to this Agreement shall be exclusively heard and determined in, and the parties
do hereby irrevocably submit to the exclusive jurisdiction of the Supreme Court
of New York in Suffolk County, New York or the U.S. Federal District Court of
the Eastern District of New York. The parties also agree that a final judgment
in any such action, suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by law. The parties hereby unconditionally waive any objection which either of
them may now or hereafter have to the venue of any such action, suit or
proceeding brought in any of the aforesaid courts, and waive any claim that any
such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.
21. FULL UNDERSTANDING
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Employee represents and agrees that he fully understands his right to
discuss all aspects of this Agreement with his private attorney, that to the
extent, if any, that he
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desired, he availed himself of this right, that he has carefully read and fully
understands all of the provisions of this Agreement, that he is competent to
execute this Agreement. that his willingness to execute this Agreement has not
been obtained by any duress and that he freely and voluntarily enters into it,
and that he has read this document in its entirety and fully understands the
meaning, intent and consequences of this document which is that it constitutes
an agreement of employment.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GENOTEC ACQUISITION CORPORATION XXXXXX XXXXXXXX
By: By:
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Xxxx Xxxxxx
Chairman of the Board and
Chief Executive Officer
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ATTACHMENT A
An annual cash bonus will be paid to the Employee based upon the gross profit of
the Company. The amount paid in the aggregate to the Chief Executive Officer,
Vice President-Product Development, and Vice President - Administration, as a
group, will be based on the gross profit of the Company. The formula for such
bonus shall be as follows:
Year Bonus
Balance of 2006 3% of gross profit in excess of $375,000
2007 3% of gross profit in excess of $400,000
2008 3% of gross profit in excess of $450,000
Balance of 2009 (through
September 30, 2009) 3% of gross income in excess of $500,000
In the event that Employee's contract is not renewed subsequent to the
Expiration Date, Employee shall be entitled to a payment equal to 3% of the
gross profit generated during the twelve (12) month period following the
Expiration Date. This shall be a one-time payment, payable at the Company's
discretion in either cash and/or stock.
Payment of the bonus will be made at such time that the Company has sufficient
cash reserves to make such payment. It is expressly understood that MM2 will not
provide funds to the Company for the purpose of paying these bonuses.
The annual bonus pool as noted above shall be paid 49% to Xxxxxx Xxxxxxxxxx, 32%
to Xxxxxx Xxxxxxxx, and 19% to Xxxxx Xxxxxxxx.
In addition, the Chief Executive Officer, Vice President-Product Development,
and Vice President - Administration, as a group, shall receive an additional
cash bonus equal to fifteen percent (15%) of the annual income, in excess of
$30,000, earned from the sales of Misoprostol and the "pain management patch',
FDA approved, manufactured by Lavipharm Laboratories, Inc. This commission shall
be paid for a period of ten 910) years from the date hereof. This additional
annual cash bonus shall be paid 49% to Xxxxxx Xxxxxxxxxx, 32% to Xxxxxx
Xxxxxxxx, and 19% to Xxxxx Xxxxxxxx.
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