EXHIBIT 10.10
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EMPLOYMENT AGREEMENT
AGREEMENT made as of January 6, 2006, by and between Xxxxxx
Pharmaceuticals, Inc., (hereinafter referred to as the "Company"), a New Jersey
corporation, having an office at 000 Xxxxxxx 00, Xxxxxxx, Xxx Xxxxxx 00000 and
Xxxxxx X. Xxxxxx, Xx., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000 (hereinafter
referred to as the "Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to engage the services of the Executive,
and the Executive desires to render such services;
NOW, THEREFORE, in consideration of the premises, the parties agree as
follows:
1. EMPLOYMENT. The Company hereby employs the Executive as President,
and the Executive hereby accepts such employment, subject to the terms and
conditions hereinafter set forth.
2. TERM. The term of the Executive's employment hereunder shall
commence on the date of execution of this Agreement and shall continue to
December 31, 2008 (the "Term") unless such Term is earlier terminated in
accordance with the provisions of this Agreement.
3. DUTIES. The Executive agrees that the Executive will serve the
Company on a full-time basis faithfully and to the best of his ability as the
President of the Company, subject to the general supervision of the Board of
Directors of the Company (the "Board"). The Executive agrees that the Executive
will not, during the term of this Agreement, engage in any other business
activity which interferes with the performance of his obligations under this
Agreement and will devote Executive's entire working time to the business and
affairs of the Company; provided, however, that the foregoing shall not be
construed as precluding the Executive from (i) serving on the board of directors
of any corporation not directly competitive or competitive in any material
respect with the Company, and (ii) investing or trading in securities or other
forms of investment, in each case, so long as such activities do not materially
interfere with the performance of the Executive's duties hereunder and such
investments do not represent the ownership of five percent (5%) or more of the
capital stock of publicly traded entities. Unless otherwise determined by the
Company, Executive shall have the title of Chief Executive Officer, and in such
capacity shall have such authority and duties as may be assigned by the Board of
Directors. Performance of Executive's duties hereunder shall in no event require
that Executive relocate to any location outside the New York City metropolitan
area.
4. COMPENSATION.
(a) In consideration of the services to be rendered by the
Executive hereunder, including, without limitation, any services rendered by the
Executive as director of the Company or of any parent, subsidiary or affiliate
of the Company, the Company agrees to pay the Executive, and the Executive
agrees to accept fixed base compensation (the "Base Salary") at the rate Seventy
Two Thousand ($72,000), subject to all required federal, state and local payroll
deductions, that shall increase on the anniversary date of January 1, 2007 and
upon every annual anniversary thereafter, at a rate equal to percentage of any
increase in the Consumer Price Index - All Consumers for the New
York-Northeastern New Jersey Region as reported by
the Bureau of Labor Statistics for the United States, as compared with the same
Consumer Price Index for the immediately preceding year.
(b) The Executive shall be entitled to 10 days vacation in 2006 and
20 days vacation during each calendar year thereafter.
(c) The Executive shall be entitled to such holidays, personal and
sick days in accordance with and subject to the Company's policies for its own
senior executives, as in effect from time to time.
(d) The Executive shall receive medical benefits via a group health
policy established by the Company. The Company shall pay 100% of the cost of the
rate for a single insured. Should Executive opt for family or other coverage,
Executive will be responsible for paying any incremental cost.
(e) To the extent that the Executive becomes mentally or physically
disabled, Executive shall continue to receive his salary and other benefits
hereunder until the earlier of expiration of the term of this Agreement or the
termination of this Agreement pursuant to Paragraph 10 hereof; provided,
however, that such salary shall be reduced by any disability benefits Executive
receives from policies maintained and paid for by the Company.
(f) An annual cash bonus will be paid to the Executive based upon
the net sales of the Company. Such bonus, payable within one hundred and five
(105) days of the end of the Company's fiscal year, shall be equal to 2.5% of
net sales in excess of $1,000,000 in 2006 and 2007, and 4% of net sales over $6
million in 2008.
5. BUSINESS EXPENSES.
Executive is authorized to incur, and the Company shall pay and
reimburse him for, all reasonable and necessary business expenses incurred in
the performance of his duties hereunder in accordance with guidelines adopted by
the Board of Directors. The Company will pay and reimburse Employee for all such
reasonable expenses upon the presentation by Employee, from time to time, of an
itemized account of such reasonable expenditures and proper documentation
thereof as evidence that such expenses have been incurred.
6. TERMINATION BY THE COMPANY FOR CAUSE.
(a) The Company may terminate Executive's employment hereunder at
any time for Cause by following the procedures required by this Section 6.
Termination by the Company of the Executive's employment for cause (herein
referred to as "for Cause"), shall mean termination upon:
i. the willful and continued failure by the Executive to
substantially perform the Executive's material duties with
the Company (other than any such failure resulting from
the Executive's incapacity due to physical or mental
illness) after a written demand for substantial
performance is delivered to the Executive by the Board,
which demand specifically identifies the material duties
that the Board believes that the Executive has not
substantially performed, or
ii. the willful engaging by the Executive in conduct that is
demonstrably and
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materially injurious to the Company, monetarily or
otherwise. For purposes of this Paragraph 6, no act, or
failure to act, on the Executive's part, shall be deemed
"willful" unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief
that the Executive's action or omission was in the best
interest of the Company, or the conviction of the
Executive of a felony (or a plea of guilty or NOLO
CONTENDRE), limited solely for a crime related to the
business operations of the Company, or that results in the
Executive being unable to substantially carry out his
duties as set forth in this Agreement, or
iii. the commission of any act by the Executive against the
Company that may be construed as the crime of
embezzlement, larceny, and/or grand larceny.
Any other provision in this paragraph to the contrary notwithstanding, the
Executive shall not be deemed to have been terminated for Termination for Cause
unless and until the Board duly adopts a resolution by the affirmative vote of
no less than two-thirds (2/3) of the entire membership of the Board, at a
meeting of the Board called and held for such purpose (after reasonable notice
to the Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board), finding that in the good
faith opinion of the Board, the Executive was guilty of conduct described in
Subparagraphs (i), (ii) or (iii) of this paragraph and specifying the
particulars thereof in detail and a certified copy of such resolution is
delivered to the Executive.
(b) In the event that the Executive's employment is terminated for
Cause pursuant to Section 6(a) hereof, the Company shall pay within thirty (30)
days the following amounts to the Executive:
i. any accrued but unpaid Base Salary for services rendered
to the date of termination;
ii. any accrued but unpaid vacation pay; and
iii. any unpaid expense reimbursement owed to him for periods
through the date of termination.
7. TERMINATION BY THE COMPANY WITHOUT CAUSE. If the Company terminates
Executive's employment other than for Cause pursuant to Section 6 or on account
of death or disability pursuant to Section 9 or 10, the Company shall pay or
provide the Executive with, within thirty (30) days of the date of termination:
(i) any unpaid salary earned under this Agreement prior to the date of
termination; (ii) any accrued but unused vacation prior to the date of
termination; (iii) any unpaid bonus actually earned with respect to the fiscal
year ending on or preceding the date of termination; (iv) a one-time lump sum
payment equal to four week's Base Salary, and (v) any unpaid expense
reimbursement owed to him for periods through the date of termination.
8. TERMINATION BY THE EXECUTIVE. The Executive may terminate his
employment hereunder for "Good Reason," within ninety (90) days of the
occurrence of any of the following events: (i) a material breach of this
Agreement by the Company; (ii) any failure to pay, within a reasonable amount of
time, any part of the Executive's compensation (including Base Salary and bonus)
or to provide the benefits contemplated herein; (iii) any material reduction or
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diminution (except temporarily during any period of physical or mental
impairment) in the Executive's titles or primary job responsibilities with the
Company; or (iv) a change in control of the Company. The Executive shall give
the Company written notice of any proposed termination for Good Reason and the
Company shall have thirty (30) days from receipt of such written notice to cure
any ground of termination for Good Reason, as set forth in this Section. In the
event Executive terminates his employment for Good Reason, he shall not be
considered to be in breach of this agreement. In the event of Termination by
Executive for Good Reason, Company shall be obligated to pay to Executive that
compensation due as if Company had terminated Executive Without Cause pursuant
to Section 7 of this Agreement.
9. TERMINATION DUE TO DEATH. In the event of the Executive's death
during the Term of this Agreement, the Executive's employment hereunder shall
immediately and automatically terminate, and the Company shall have no further
obligation or duty to the Executive or his estate or beneficiaries other than
for (a) all earned but unpaid compensation through the date of termination and
(b) any accrued but unpaid vacation pay, other than as required by applicable
law.
10. TERMINATION DUE TO DISABILITY. The Company may terminate the
Executive's employment hereunder, upon written notice to the Executive, in the
event that the Executive becomes disabled during the Term through any condition
of either a physical or psychological nature and, as a result is, with
reasonable accommodation, unable to perform the essential functions of the
services contemplated hereunder for a period of one hundred eighty (180) days
during any twelve (12) month period during the Term. Any such termination shall
become effective upon mailing or hand delivery of notice, while the Executive
continues to be unable to perform the essential functions of the services
contemplated hereunder, that the Company has elected to exercise its right to
terminate under this Section 10, and the Company shall have no further
obligation or duty to the Executive other than for (a) all earned but unpaid
compensation through the date of termination and (b) any accrued but unpaid
vacation pay, other than as required by applicable law. For purposes of
determining the Executive's disability, the existence or nonexistence of a
disability shall be conclusively determined by a physician to be selected by the
Executive and the Company in good faith. Executive shall cooperate in such
determination by making himself available.
11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION AND NON- SOLICITATION
(a) The Executive acknowledges that the Executive 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 (all such information hereafter referred to
as "confidential information"), and the Executive further
acknowledges that such confidential information is of
great value to the Company.
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
Executive are special and unique, and that by reason of his employment by the
Company, the Executive has and will
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acquire confidential information as aforesaid. The parties confirm that it is
reasonably necessary to protect the Company's (and its Affiliates') goodwill,
and accordingly the Executive does agree that the Executive will not directly or
indirectly (except where authorized by the Board of Directors of the Company for
the benefit of the Company):
A. At any time during his employment by the Company or after
the Executive ceases to be employed by the Company, divulge to any persons,
firms or corporations (hereinafter referred to collectively as "third parties"),
other than the Company, its officers, directors, consultants, lawyers,
accountants, agents and representatives, 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 two (2) years after the Executive ceases to be employed by the
Company, solicit or cause or authorize directly or indirectly to be solicited,
for or on behalf of the Executive or third parties, any business from persons,
firms, corporations or other entities who were at any time within two (2) years
prior to the cessation of his employment hereunder, customers of the Company or
its affiliates with respect to any competing business; and
C. At any time during his employment by the Company and for a
period of two (2) years after the Executive ceases to be employed by the
Company, accept or cause or authorize directly or indirectly to be accepted, for
or on behalf of the Executive or third parties, any business from any such
customers of this Company or its affiliates with respect to any competing
business; and
D. At any time during his employment by the Company and for a
period of two (2) years after the Executive 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 Executive or third parties, any persons
(excluding any individuals residing in the same immediate primary residence as
the Executive, and/or the Executive'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 two (2) years after the Executive ceases to be employed by the
Company, employ or cause or authorize directly or indirectly to be employed, for
or on behalf of the Executive or third parties, any such employees of the
Company or its affiliates.
F. "competing business" shall mean (x) any entity (other than
the Company or any of its affiliates) that then engages, directly or indirectly,
in any business which the Company or any of its affiliates is then conducting or
which is then covered in a written proposal or business plan in any place in
which the Company does business.
(b) The Executive agrees that, upon the expiration of his
employment by the Company for any reason, the Executive shall forthwith deliver
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 Executive agrees that any breach or threatened breach by
the Executive of any provision of this Section 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
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competent jurisdiction. The parties understand and intend that each restriction
agreed to by the Executive 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.
12. SUCCESSORS; BINDING AGREEMENT.
Neither this Agreement nor any right or interest hereunder shall be
assignable by the Executive, nor shall it be subject to attachment, execution,
pledge or hypothecation, but this Agreement if Executive shall die shall inure
to the benefit of and be enforceable by the Executive's personal or legal
representative, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die during the term of this
Agreement, except to the extent otherwise provided in Section 9 hereof, no
amounts shall be paid to the Executive's devisee, legatee or other designee or,
if there is no such designee, to the Executive's estate. The rights and
obligations of the Company hereunder will be binding upon and run in favor of
the successors and assigns of the Company who acquire all or substantially all
of the business of the Company.
13. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto of, or compliance
with, 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. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party that are not set forth in
this Agreement. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law.
14. SEVERANCE AND VALIDITY. The invalidity or unenforceability of any
provision 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.
15. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
16. ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof, supersedes any prior
agreement between the parties, and may not be changed or terminated orally. No
change, termination or attempted waiver of any of the provisions hereof shall be
binding unless in writing and signed by the party to be bound; provided,
however, that the Executive's compensation and benefits may be increased at any
time by the Company without in any way affecting any of the other terms and
conditions of this Agreement, which in all other respects shall remain in full
force and effect.
17. NEGOTIATED AGREEMENT. This Agreement has been negotiated and shall
not be construed against the party responsible for drafting all or parts of this
Agreement.
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18. NOTICES. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally, against written
receipt therefrom or received by United States registered or certified mail,
return receipt requested, postage prepaid, or by nationally recognized overnight
delivery service providing for a signed return receipt, addressed to the
Executive at the Executive's home address set forth in the Company's records and
to the Company at the address set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the attention of
the Board with a copy to counsel to the Company, at Xxxxxx Xxxxx Xxxxxxxx &
Xxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
Xxxxx X. Xxxxxxxxx, Esq., or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
19. GOVERNING LAW AND RESOLUTION OF DISPUTES. All matters concerning
the validity and interpretation of and performance under this Agreement shall be
governed by the laws of the State of New Jersey. Any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in Newark, New Jersey in accordance with the rules of the
American Arbitration Association ("AAA") then in effect. Arbitration will take
place before a single experienced employment arbitrator licensed to practice law
in New Jersey and selected in accordance with the Employment Dispute Resolution
Rules of the American Arbitration Association. The arbitrator may not modify or
change this Agreement in any way. Any judgment rendered by the arbitrator as
above provided shall be final and binding on the parties hereto for all purposes
and may be entered in any court having jurisdiction. In any arbitration pursuant
to this Section 19, each party shall be responsible for the fees and expenses of
its own attorney and witnesses, and the fees and expenses of the arbitrator
shall be divided equally between the Company and the Executive. Nothing in this
Section 19 shall be construed to limited the availability of injunctive relief
in the form of a court ordered injunction in connection with an actual or
threatened violation of Section 11 hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
XXXXXX X. XXXXXX, XX. XXXXXX PHARMACEUTICALS, INC.
____________________________ By:________________________
Date:_______________________ Title:_____________________
Date:______________________
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