Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), dated as of August 9, 2005 by and
between AMS Health Sciences, Inc., an Oklahoma corporation (the "Company"), and
Xxxxxx X. Xxxxxx ("Executive") is set forth below.
IN CONSIDERATION of the premises and the mutual covenants set forth below,
the parties hereby agree as follows:
1. Employment. The Company hereby agrees to employ Executive as its
President and Executive hereby accepts such employment, on the terms and
conditions set forth in this Agreement.
2. Term. The period of employment of Executive by the Company under this
Agreement (the "Initial Term") shall commence on August 9, 2005 (the
"Commencement Date") and shall continue through July 31, 2007; provided that
this Agreement shall be automatically renewed for two (2) successive one (1)
year terms (the "Extended Terms") unless either party elects not to renew this
Agreement by delivering written notice of its election to the other party no
later than thirty (30) days prior to the end of the current term. The Initial
Term and the Extended Terms, if any, shall collectively constitute the
"Employment Period." The Employment Period may be terminated before the end of
the Initial Term or the Extended Terms, if any, in accordance with Section 6 of
this Agreement.
3. Position and Duties. During the Employment Period, Executive shall
report directly to the Chairman of the Company's board of directors (the
"Chairman"). Executive shall have those powers and duties normally associated
with the position of a President. Executive shall devote substantially all of
his working time, attention and energies (other than absences due to illness or
vacation) to the performance of his duties for the Company. Notwithstanding the
above, Executive shall be permitted, to the extent such activities do not
interfere with the performance by Executive of his duties and responsibilities
under this Agreement or violate Sections 9(a), (b) or (c) of this Agreement, to
(i) serve on civic or charitable boards or committees and (ii) serve on the
board of directors or other similar governing body of any other corporation or
other business entity or trade organization.
4. Place of Performance. The principal place of employment and performance
of duties by Executive shall be at the Company's principal executive offices in
Oklahoma City, Oklahoma.
5. Compensation and Related Matters.
(a) Base Salary. During the initial Term, the Company shall pay Executive
base salary at the rate of $200,000 per year ("Base Salary"). Executive's Base
Salary shall be paid $150,000 for the first year and $250,000 for the second
year of this Agreement in accordance with the Company's customary payroll
practices. Executive's Base Salary shall be subject to increase, but not
decrease, pursuant to annual review by and in the discretion of the Board or on
about the end of anniversaries of the Commencement Date. Such increased Base
Salary shall then constitute the Base Salary for all purposes of this Agreement.
(b) The Company shall pay the Executive a one time incentive bonus
contingent upon meeting certain performance goals, as follows: $50,000 in the
event the Company's common stock, over any twenty (20) consecutive trading days,
is $7.50 or more bid. $50,000 in the event that the Company has a profitable
quarterly earnings of $250,000 pre-tax in any fiscal quarter during the first
twelve (12) months of Executive employment with the Company.
(c) Stock Option. The Company agrees to put forth its best efforts to seek
approval by its Shareholders and Regulatory Authorities, a stock option plan
that would allow the Company to grant up to 250,000 options to Executive on the
terms and subject to conditions set forth in the Option Agreement.
(d) Expenses. The Company shall promptly reimburse Executive for all
reasonable business expenses, including moving expenses to Oklahoma City,
Oklahoma, upon the presentation of reasonably itemized statements of such
expenses in accordance with the Company's policies and procedures now in force
or as such policies and procedures may be modified with respect to executive
officers of the Company or, alternatively, as approved by the Chairman.
(e) Vacation And Sick Leave. Executive shall be entitled to four (4) weeks
vacation per every twelve (12) month period of employment hereunder. Allowable
carry-over of non-used vacation time shall be in line with that of other
Executives of the Company. Executive shall also be entitled to leaves for
illness or other incapacitation as is consistent with Executive's title and
Employer's needs for Executive's services, except as otherwise provided for in
Section 8(a).
(f) Welfare, Pension and Incentive Benefit Plans; Related Benefits. During
the Employment Period, Executive (and his spouse and/or dependents to the extent
provided the applicable plans and programs) shall be entitled to participate in
and be covered under any welfare benefit plans or programs maintained by the
Company from time to time for the benefit of its similarly situated employees
pursuant to the terms of such plans and programs, including, without limitation,
any medical, life, hospitalization, dental, disability, accidental death and
dismemberment and other insurance plans and programs. During the Employment
Period, Executive shall also be eligible to participate in any pension,
retirement, savings and other employee benefit plans and programs maintained
from time to time by the Company for the benefit of similarly situated
employees.
(g) Company Vehicle The Company will pay to Executive a monthly car
allowance, equal to the expense incurred by the other Company Executives.
6. Termination. Executive's employment under this Agreement may be
terminated during the Employment Period under the following circumstances:
(a) Death. Executive's employment under this Agreement shall terminate upon
his death.
(b) Disability. If, as a result of Executive's incapacity due to physical
or mental illness, Executive shall have been substantially unable to perform his
duties under this Agreement (with or without reasonable accommodation, as
defined under the Americans With Disabilities Act), for a period of three (3)
consecutive months, and the Company shall have the right to terminate
Executive's employment under this Agreement for "Disability", by providing a
thirty (30) day Notice of Termination to Executive pursuant to Section 7(a) and
such termination in and of itself shall not be, nor shall it be deemed to be, a
breach of this Agreement by the Company.
(c) Cause. The Company shall have the right to terminate Executive's
employment at any time for Cause, and such termination in and of itself shall
not be, nor shall it be deemed to be, a breach of this Agreement by the Company.
For purposes of this Agreement, the Company shall have "Cause" to terminate
Executive's employment upon:
(i) an act of felony dishonesty taken by Executive which results or is
intended to result in improper personal enrichment of Executive and/or
expense to the Company; or
(ii) Executive's failure to follow a direct, reasonable and lawful
written order from the Board and/or the Chairman, within the reasonable
scope of Executive's duties.
Cause shall not exist under paragraphs (i)or (ii)) above unless and until the
Company has delivered to Executive a copy of a resolution duly adopted by not
less than three-fourths (3/4ths) of the Board (excluding Executive) at a meeting
of the Board called and held for such purpose finding that in the good faith
opinion of the Board, Executive was guilty of the conduct set forth in
paragraphs (i) or (ii) and specifying the particulars thereof in detail. Upon
receipt of the board resolution, the Executive shall have 15 days to cure , if
curable, the "Cause" of the board resolution and avoid termination..
(d) Voluntarily. Executive shall have the right to voluntarily terminate
his employment under this Agreement.
7. Termination Procedure.
(a) Notice of Termination. Any termination of Executive's employment by the
Company or by Executive during the Employment Period (other than termination due
to death pursuant to Section 6(a)) shall be communicated by written Notice of
Termination to the other party in accordance with Section 12. For purposes of
this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.
(b) Date of Termination. "Date of Termination" shall mean (i) if
Executive's employment is terminated by his death, the date of his death, (ii)
if Executive's employment is terminated for Disability pursuant to Section 6(b),
thirty (30) days after Notice of Termination (provided that Executive shall not
have returned to the substantial performance of his duties on a full-time basis
during such thirty (30) day period), (iii) if Executive's employment is
terminated for Cause pursuant to Section 6(c), the date the Notice of
Termination is sent to Executive, which in the case of Cause under Section
6(c)(ii) shall be no less than 15 days after Executive's receipt of the board
resolution and shall be subject to an opportunity to cure as set forth in
Section 6(c)(ii), or (iv) if Executive's employment is terminated by Executive
pursuant to Section 6(d), the date that the Company receives Executive's Notice
of Termination or such later termination date as is set forth in such Notice of
Termination.
8. Compensation Upon Termination or During Disability. In the event of
Executive's Disability or termination of his employment under this Agreement
during the Employment Period, the Company shall provide Executive with the
payments and benefits set forth below. Executive acknowledges and agrees that
the payments set forth in this Section 8, and the other agreements and plans
referenced in this Agreement, constitute the sole compensation and damages for
termination of his employment during the Employment Period.
(a) Disability. During any period that Executive fails to perform his
duties under this Agreement as a result of incapacity due to physical or mental
illness ("Disability Period"), Executive shall continue to receive his full Base
Salary set forth in Section 5(a) until his employment is terminated pursuant to
Section 6(b). In the event Executive's employment is terminated for Disability
pursuant to Section 6(b):
(i) the Company shall pay to Executive (A) his Base Salary and accrued
vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination, and (B) provide Executive with
disability benefits pursuant to the terms of any Company disability
programs;
(ii) the Company shall reimburse Executive pursuant to Section 5(d)
for reasonable business expenses incurred, but not paid, prior to such
termination of employment; and
(iii) Executive shall be entitled to any other rights, compensation
and/or benefits as may be due to Executive following such termination to
which he is otherwise entitled in accordance with the terms and provisions
of any plans or programs of the Company.
(b) Termination By Company without Cause. If Executive's employment is
terminated by the Company without Cause:
(i) the Company shall pay to Executive (A) his Base Salary and accrued
vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination, and (B) Severance Pay, in equal monthly
installments or a lump sum at the Company's discretion, according to the
following schedule:
-------------------------- -----------------------
Length of Employment Months of Base Salary
-------------------------- -----------------------
1 - 6 months 1 month
-------------------------- -----------------------
7 - 12 months 5 months
-------------------------- -----------------------
13 - 24 months 6 months
-------------------------- -----------------------
25 - 36 months 12 months
-------------------------- -----------------------
(ii) the Company shall reimburse Executive pursuant to Section 5(d)
for reasonable business expenses incurred, but not paid, prior to such
termination of employment; and
(iii) Executive shall be entitled to any other rights, compensation
and/or benefits as may be due to Executive following such termination to
which he is otherwise entitled in accordance with the terms and provisions
of any plans or programs of the Company
(c) Cause, Death or Voluntarily By Executive. If Executive's employment is
terminated by the Company for Cause, due to Executive's death or voluntarily by
Executive:
(i) the Company shall pay Executive (or his legal representative or
estate) his Base Salary and his accrued vacation pay (to the extent
required by law or the Company's vacation policy) through the Date of
Termination, as soon as practicable following the Date of Termination;
(ii) the Company shall reimburse Executive (or his legal
representative or estate) pursuant to Section 5(d) for reasonable business
expenses incurred, but not paid, prior to such termination of employment,
unless such termination resulted from a misappropriation of Company funds;
and
(iii) Executive (or his legal representative or estate) shall be
entitled to any other rights, compensation and/or benefits as may be due to
Executive following such termination to which he is otherwise entitled in
accordance with the terms and provisions of any plans or programs of the
Company.
9. Confidential Information, Ownership of Documents and Other Items;
Non-Solicitation of Employees and Business.
(a) Confidential Information. During the Employment Period and thereafter,
Executive shall hold in a fiduciary capacity for the benefit of the Company all
trade secrets and confidential information, knowledge or data relating to the
Company and its businesses and investments and its affiliates, which shall have
been obtained by Executive during Executive's employment by the Company and
which is not generally available public knowledge (other than by acts by
Executive in violation of this Agreement). Except as may be required or
appropriate in connection with his carrying out his duties under this Agreement,
Executive shall not, without the prior written consent of the Company or as may
otherwise be required by law or any legal process, or as is necessary in
connection with any adversarial proceeding against the Company (in which case
Executive shall use his reasonable best efforts in cooperating with the Company
in obtaining a protective order against disclosure by a court of competent
jurisdiction), communicate or divulge any such trade secrets, information,
knowledge or data to anyone other than the Company and those designated by the
Company or on behalf of the Company in the furtherance of its business or to
perform duties under this Agreement.
(b) Removal of Documents; Rights to Products; Other Property. All records,
files, drawings, documents, models, equipment, and the like relating to the
Company's business and its affiliates, which Executive has control over shall
not be removed from the Company's premises without its written consent, unless
such removal is in the furtherance of the Company's business or is in connection
with Executive's carrying out his duties under this Agreement and, if so
removed, shall be returned to the Company promptly after termination of
Executive's employment under this Agreement, or otherwise promptly after removal
if such removal occurs following termination of employment. Executive shall
assign to the Company all rights to trade secrets and other products relating to
the Company's business developed by him alone or in conjunction with others at
any time while employed by the Company. Executive shall also return to the
Company all Company-provided vehicles in his possession or control.
(c) Protection of Business. During the Employment Period and until the
first anniversary of Executive's Date of Termination (regardless of the reason
for termination of employment), the Executive will not, directly or indirectly,
on his own behalf or behalf of any third party, solicit or attempt to induce any
existing customers or accounts of the Company or its affiliates to cease doing
business with the Company or its affiliates. During the same time period,
Executive will not, directly or indirectly, on his own behalf or on behalf of
any third party, solicit or attempt to induce any employee of the Company to
terminate his or her employment with the Company to be employed by Executive or
a third party.
(d) Injunctive Relief. In the event of a breach or threatened breach of
this Section 9, Executive agrees that the Company shall be entitled to
injunctive relief in a court of appropriate jurisdiction to remedy any such
breach or threatened breach, Executive acknowledging that damages would be
inadequate and insufficient.
(e) Continuing Operation. Except as specifically provided in this Section
9, the termination of Executive's employment or of this Agreement shall have no
effect on the continuing operation of this Section 9.
Additional Related Agreements. Executive agrees to sign and to abide by the
provisions of any additional agreements, policies or requirements of the Company
related to the subject of this Section 9(.)
10. Arbitration. The parties agree that Executive's employment and this
Agreement relate to interstate commerce, and that any disputes, claims or
controversies between Executive and the Company which may arise out of or relate
to the Executive's employment relationship or this Agreement shall be settled by
arbitration. This agreement to arbitrate shall survive the termination of this
Agreement. Any arbitration shall be in accordance with the Rules of the American
Arbitration Association or another national arbitration service that is mutually
agreeable to the parties. The arbitration shall be undertaken pursuant to the
Federal Arbitration Act. Arbitration will be held in Oklahoma City, Oklahoma
unless the parties mutually agree on another location. The decision of the
arbitrator(s) will be enforceable in any court of competent jurisdiction. The
parties agree that the arbitrator(s) may allocate administrative and arbitrator
fees, the parties' other costs and expenses of arbitration and the parties'
attorneys' fees and require that such items be paid in any manner in which such
item would have been allocated and ordered to be paid by a court of competent
jurisdiction. The parties agree that punitive, liquidated or indirect damages
shall not be awarded by the arbitrator(s) unless such damages would have been
awarded by a court of competent jurisdiction. Nothing in this agreement to
arbitrate, however, shall preclude the Company from obtaining injunctive relief
from a court of competent jurisdiction prohibiting any on-going breaches by
Executive of this Agreement including, without limitation, violations of Section
9.
11. Successors Binding Agreement(.)
(a) Company's Successors. No rights or obligations of the Company under
this Agreement may be assigned or transferred except that the Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company 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.
(b) Executive's Successors. No rights or obligations of Executive under
this Agreement may be assigned or transferred by Executive other than his rights
to payments or benefits under this Agreement, which may be transferred only by
will or the laws of descent and distribution. Upon Executive's death, this
Agreement and all rights of Executive under this Agreement shall inure to the
benefit of and be enforceable by Executive's beneficiary or beneficiaries,
personal or legal representatives, or estate, to the extent any such person
succeeds to Executive's interests under this Agreement. Executive shall be
entitled to select and change a beneficiary or beneficiaries to receive any
benefit or compensation payable under this Agreement following Executive's death
by giving the Company written notice thereof. In the event of Executive's death
or a judicial determination of his incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to his beneficiary(ies),
estate or other legal representative(s). If Executive should die following his
Date of Termination while any amounts would still be payable to him under this
Agreement if he had continued to live, all such amounts unless otherwise
provided shall be paid in accordance with the terms of this Agreement to such
person or persons so appointed in writing by Executive, or otherwise to his
legal representatives or estate.
12. Notice. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered either personally or by
United States certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to Executive:
At his last known address
evidenced on the Company's
payroll records.
If to the Company:
000 XX 00xx
Xxxxxxxx Xxxx, XX 00000
or to such other address as any party may have furnished to the others in
writing in accordance with this Agreement, except that notices of change of
address shall be effective only upon receipt.
13. Taxes and Withholding. All payments hereunder shall be subject to tax
in accordance with the federal Internal Revenue Code, as amended from time to
time, and any applicable rules or regulations promulgated thereunder and in
accordance with applicable state statutes, rules and regulations. All payments
shall be subject to any required withholding of Federal, state and local taxes
pursuant to any applicable law, rule or regulation.
14. Miscellaneous. No provisions of this Agreement may be amended,
modified, or waived unless such amendment or modification is agreed to in
writing signed by Executive and by a duly authorized officer of the Company, and
such waiver is set forth in writing and signed by the party to be charged. No
waiver by either party hereto at any time of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. The respective rights
and obligations of the parties under this Agreement shall survive Executive's
termination of employment and the termination of this Agreement to the extent
necessary for the intended preservation of such rights and obligations. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Oklahoma without regard to its conflicts
of law principles.
15. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect(.)
16. Entire Agreement. Except as provided elsewhere herein, this Agreement
sets forth the entire agreement of the parties with respect to its subject
matter and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party to this Agreement with respect
of such subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
AMS Health Sciences, Inc.
By /S/ Xxxx X. Xxxx
Chairman of the Board
/S/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
