Exhibit 10(iv)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, made this 31st day of December, 1997, by and
between OMNICORDER TECHNOLOGIES, INC., a Delaware corporation with its principal
place of business at 00 X. Xxxx Xxxx, Xxxxx Xxxxx, Xxx Xxxx 00000 (the
"Company") and XXXX XXXXX, an individual residing at 000 X. Xxxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive as President and
Chief Executive Officer and wishes to acquire and be assured of Executive's
continued services on the terms and conditions hereinafter set forth;
WHEREAS, the Executive desires to be employed by the Company as
President and Chief Executive Officer and to perform and to serve the Company on
the terms and conditions hereinafter set forth; and
NOW THEREFORE, in consideration of the mutual terms, covenants,
agreements and conditions hereinafter set forth, the Company and the Executive
hereby agree as follows:
1. Employment. The Company hereby employs the Executive to serve as a
full time executive of the Company, and the Executive hereby accepts such
employment with the Company, for the period set forth in Section 2 hereof. The
Executive's principal place of employment shall be at the Company's offices in
Stony Brook, New York, or at such other location as shall be mutually acceptable
to the Executive and the Company (it being understood that an office in Nassau
or Suffolk County shall be acceptable to the Executive). The Executive hereby
accepts such employment and agrees to undertake the duties and responsibilities
inherent in such position.
2. Term. Unless earlier terminated as provided in this Agreement, the
term of the Executive's employment under this Agreement shall be for a period
beginning on January 1, 1998 (the "Engagement Date") and ending four years
thereafter (such period or, if the Executive's employment hereunder is earlier
terminated, such shorter period, being hereinafter called the "Employment
Term").
-1-
3. Duties and Authority.
(a) Duties. The Executive shall be employed as President and Chief
Executive Officer of the Company, shall faithfully and competently perform such
duties at such times and places and in such manner as the Board may from time to
time reasonably direct. Except as otherwise may be approved in advance by the
Board, and except during vacation periods and reasonable periods of absence due
to sickness, personal injury, family leave as permitted by law, or other
disability, the Executive shall devote Executive's full time throughout the
Employment Term to the services required of Executive hereunder. The Executive
shall render Executive's services exclusively to the Company during the
Employment Term and shall use Executive's best efforts, judgment and energy to
improve and advance the business and interests of the Company in a manner
consistent with the duties of Executive's position.
(b) Authority. The Executive shall have all the usual and necessary
authority, duties and responsibilities of a President and Chief Executive
Officer, in the operation of the Company's business, subject to the supervision
and authority of the Board.
4. Salary.
(a) Salary. In consideration for the services of the Executive rendered
to the Company hereunder, the Company shall pay the Executive a salary at an
annual rate of $90,000 during the Employment Term, payable in regular intervals
in accordance with the Company's payroll practices, subject to upward adjustment
as the Board or the compensation committee thereof may deem appropriate. In the
event the Company receives equity financing of $2.25 million from inception, the
salary will be increased to $135,000 per annum. On January 1, 1999, the salary
will be increased to $180,000 per annum assuming that the $2.25 million equity
raise has been achieved. In the event the $2.25 million equity raise is
completed only after January 1, 1999, Xx. Xxxxx'x salary will be increased to
$180,000 at that time of such completion. The Executive shall also be eligible
for annual bonuses, as the Board or the compensation committee thereof may deem
appropriate. Upon termination of this Agreement, except if the Company attempts
-2-
to terminate this Agreement without Cause (as defined in Paragraph 7), payments
made pursuant to this section shall cease; provided, however, that the Executive
shall be entitled to payments for periods or partial periods that occurred prior
to the date of termination and for which the Executive has not yet been paid.
Any vacation time not used by Executive during any year of the Employment Term
shall be carried over to succeeding years; however, Executive will not take in
excess of four continuous weeks of vacation utilizing such carried over vacation
time. Payment shall be made to Executive for any unused vacation time upon the
end of the Employment Term.
(b) Withholding, Etc. The payment of any amounts hereunder shall be
subject to income tax, social security and other applicable withholdings.
5. Benefits. During the Employment Term, the Executive shall be
entitled to:
(a) Participate in all executive fringe benefits, pension,
savings, life insurance, disability, stock option, profit sharing, medical,
health or other welfare benefit plans that may be provided by the Company for
its key executives in accordance with the provisions of any such plans, as the
same may be in effect on and after the Engagement Date;
(b) 20 annual paid vacation days in each year of employment;
such vacation to be taken at a time mutually convenient to Company and the
Executive;
(c) 10 days paid sick leave and 2 paid personal days in each
year of employment;
(d) 10 days of paid holidays during each calendar year;
(e) Reimbursement for all reasonable and necessary
out-of-pocket business expenses, properly receipted or otherwise documented,
incurred by the Executive in the performance of Executive's duties hereunder in
accordance with the Company's policies applicable on and after the Engagement
Date; and
(f) An automobile lease or purchase allowance (including
insurance) not to exceed $600.00 per month; excess mileage charges on a lease
will be paid separately by the Company.
-3-
6. Developments and Confidential Information. The Executive hereby
covenants, agrees and acknowledges as follows:
(a) The Company is engaged in a continuous program of
research, design, development, production, marketing and servicing with respect
to its business.
(b) The Executive's employment hereunder creates a
relationship of confidence and trust between the Executive and the Company with
respect to certain information pertaining to the business of the Company and its
Affiliates (as hereinafter defined) or pertaining to the business of any client
or customer of the Company or its Affiliates which may be made known to the
Executive by the Company or any of its Affiliates or by any client or
customer of the Company or any of its Affiliates or learned by the Executive
during the period of Executive's employment by the Company.
(c) The Company possesses and will continue to possess
information that has been created, discovered or developed by, or otherwise
become known to it (including, without limitation, information created,
discovered or developed by, or made known to, the Executive during the period of
Executive's employment or arising out of Executive's employment) or in which
property rights have been or may be assigned or otherwise conveyed to the
Company, which information has commercial value in the business in which the
Company is engaged and is treated by the Company as confidential.
(d) Any and all inventions, products, discoveries,
improvements, processes, manufacturing, marketing and services methods or
techniques, formulae, designs, styles, specifications, data bases, computer
programs (whether in source code or object code), know-how, strategies and data,
whether or not patentable or registrable under copyright or similar statutes,
made, developed or created by the Executive (whether at the request or
suggestion of the Company, any of its Affiliates, or otherwise, whether alone or
in conjunction with others, and whether during regular hours of work or
otherwise) during the period of Executive's employment by the Company which
directly pertain to the business, products, or processes of the Company or any
-4-
of its Affiliates (collectively hereinafter referred to as "Developments"), will
be promptly and fully disclosed by the Executive to an appropriate executive
officer of the Company (other than the Executive) without any additional
compensation therefor, including, without limitation, all papers, drawings,
models, data, documents and other material pertaining to or in any way relating
to any Developments made, developed or created by Executive as aforesaid. For
the purposes of this Agreement, the term "Affiliate" or "Affiliates" shall mean
any person, corporation or other entity directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
the purposes of this definition, "control" when used with respect to any person,
corporation or other entity means the power to direct the management and
policies of such person or entity, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
(e) The Executive will keep confidential and will hold for the
Company's sole benefit any Development which is to be the exclusive property of
the Company under this Section 6 for which no patent, copyright, trademark or
other right or protection is issued.
(f) The Executive also agrees that the Executive will not without the
prior approval of the Board (i) use for Executive's benefit or disclose at any
time during Executive's employment by the Company, or thereafter, except to the
extent required by the performance by Executive of Executive's duties as an
executive of the Company, any information known to, obtained or developed by
Executive while in the employ of the Company with respect to any Developments or
with respect to any customers, clients, suppliers, products, services, prices,
executives, financial affairs, or methods of design, distribution, marketing,
service, procurement or manufacture of the Company or any of its Affiliates, or
any confidential matter, except information which at the time is generally known
to the public other than as a result of disclosure by Executive not permitted
hereunder, or (ii) take with Executive upon leaving the employ of the Company
any document or paper relating to any of the foregoing or any physical property
of the Company or any of its Affiliates.
-5-
(g) The Executive acknowledges and agrees that a remedy at law for any
breach or threatened breach of the provisions of this Section 6 would be
inadequate and, therefore, agrees that the Company and its Affiliates shall be
entitled to injunctive relief in addition to any other available rights and
remedies in case of any such breach or threatened breach; provided, however,
that nothing contained herein shall be construed as prohibiting the Company or
any of its Affiliates from pursuing any other rights and remedies available for
any such breach or threatened breach.
(h) The Executive agrees that upon termination of Executive's
employment by the Company for any reason, the Executive shall forthwith return
to the Company all documents and other property in Executive's possession or
under the Executive's control belonging to the Company or any of its Affiliates.
(i) The Executive represents and warrants that he has terminated
employment with one or more prior employers and that his employment by the
Company and the use by the Company of any skills and knowledge that he may have,
are not in violation of the terms of any contract that he is a party to or any
other applicable provision of the law.
(j) The Executive represents and warrants that his performance of all
the terms of this Agreement and his duties as an employee of the Company does
now and will not knowingly breach any agreement to keep in confidence
confidential information acquired by him in confidence or in trust prior to his
employment with the Company. The Executive further represents and warrants that
he has not entered into and he will not enter into any agreement either written
or oral in conflict herewith.
(k) Notwithstanding the foregoing, the following will not constitute
confidential information for purposes of this Agreement: (i) information which
is or becomes publicly available other than as a result of disclosure by the
Executive; or (ii) information designated by the Company as no longer
confidential.
(l) The Executive represents and warrants that he has not brought and
will not bring with him to the Company or use in the performance of his
responsibilities at the Company (a) any materials, documents or confidential
information of a former employer which are not generally available to the
public, unless he has obtained written authorization from the former employer
for their possession and use, or (b) any confidential information which he knows
or should have known has been acquired by improper means, or otherwise
misappropriated from another person.
-6-
(m) Without limiting the generality of Section 9 hereof, the Executive
hereby expressly agrees that the foregoing provisions of this Section 6 shall be
binding upon the Executive's heirs, successors and legal representatives.
7. Termination.
(a) The Executive's employment hereunder shall be terminated:
(i) upon death of the Executive; or
(ii) upon the Executive's inability to perform
Executive's duties on account of disability or incapacity for a period of ninety
(90) or more days, whether or not consecutive, occurring within any period of
twelve (12) consecutive months, such termination to take effect on 30 days prior
written notice from the Company to the Executive. A determination of disability
shall be made by a physician satisfactory to both the Executive and the Company;
provided that if the Executive and the Company do not agree on a physician, they
shall each select a physician and these two together shall select a third
physician, whose determination as to disability shall be binding on all parties;
or
(iii) at any time, for Cause (as hereinafter
defined), such termination to take effect immediately upon written notice from
the Company to the Executive, except in case of subparagraph 7(a)(iv)(3) or (4)
below, in which case termination shall only take effect after Executive has been
given written notice of specifications and a reasonable opportunity to cure any
matter referred to therein and same shall not be cured within such time; or
(iv) upon expiration of the Employment Term.
The following actions, failures or events shall constitute
"Cause" for termination within the meaning of clause (iii) above: (1) conviction
of a felony, (2) acts of dishonesty or moral turpitude constituting fraud or
-7-
embezzlement or otherwise materially adversely affecting the business or
properties of the Company and/or its Affiliates, (3) failure by the Executive to
obey the reasonable and lawful orders of the Board of Directors of the Company
or (4) repeated negligence by the Executive in the performance of, or willful
disregard by the Executive, of Executive's obligations hereunder. If the
Executive contests, in good faith, whether termination for "Cause" is proper,
said dispute shall be immediately referred to arbitration in Nassau County, New
York, in accordance with provisions of Paragraph 15. Pending the resolution of
such dispute, Company shall continue to pay Executive his salary and benefits.
Whether Executive must return any of said amounts if it is ultimately determined
that termination for "Cause" was proper shall be decided by the Arbitrator.
(b) Notwithstanding anything to the contrary expressed or
implied herein, except as required by applicable law, and except if the Company
terminates Executive's employment without Cause, and except under the
circumstances described in paragraph 8 below, the Company (and its Affiliates)
shall not be obligated to make any payments to the Executive or on Executive's
behalf of whatever kind or nature by reason of the Executive's cessation of
employment, other than (i) such amounts, if any, of Executive's salary and bonus
as shall have accrued and remained unpaid as of the date of said cessation and
(ii) such other amounts which may be then otherwise payable to the Executive
from the Company's benefits plans or reimbursement policies, if any.
8. Non-Competition.
(a) During the period during which Executive is employed
hereunder and, at the Company's option and subject to the Company continuing to
pay the Executive all salary and benefits paid to him in the year preceding his
termination, during the one year period following such termination (the
"Non-Competition Period"):
(i) the Executive will not make any statement or
perform any act intended to advance an interest of any existing or prospective
competitor of the Company or any of its Affiliates in any way that will or may
injure an interest of the Company or any of its Affiliates in its relationship
-8-
and dealings with existing or potential customers or clients, or solicit or
encourage any other executive of the Company or any of its Affiliates to do any
act that is disloyal to the Company or any of its Affiliates or inconsistent
with the interest of the Company or any of its Affiliate's interests or in
violation of any provision of this Agreement;
(ii) the Executive will not solicit, divert or
take away, or attempt to divert or to take away, the business or patronage of
any of the clients, customers, dealers, distributors, representatives or
accounts, or prospective clients, customers, dealers, distributors,
representatives or accounts, of the Company or its Affiliates which were
contacted, solicited or served by employees of the Company while the Executive
was employed by the Company;
(iii) the Executive will not directly or indirectly
(as a director, stockholder, officer, Executive, manager, consultant,
independent contractor, advisor or otherwise) engage in competition with, or own
any interest in, perform any services for, participate in or be connected with
(i) any business or organization which engages in competition with the Company
or any of its Affiliates in the United States or any other geographical area
where any business is presently carried on by the Company or any of its
Affiliates, or (ii) any business or organization which engages in competition
with the Company or any of its Affiliates in any geographical area where any
business shall be hereafter, during the period of the Executive's employment by
the Company, carried on by the Company or any of its Affiliates, if such
business is being carried on by the Company or any of its Affiliates in such
geographical area during the Non-Competition Period; and
(iv) the Executive will not directly or indirectly
solicit for employment, or advise or recommend to any other person that they
employ or solicit for employment, any employee of the Company or any of its
Affiliates; and
provided, however, that the provisions of this Section 8(a) shall not be deemed
to prohibit the Executive's ownership of not more than five percent (5%) of the
total shares of all classes of stock outstanding of any publicly held company.
-9-
(b) (i) The Executive further agrees that the limitations set
forth in this Section 8 (including, without limitation, any time or territorial
limitations) are reasonable and properly required for the adequate protection of
the businesses of the Company and its Affiliates. It is understood and agreed
that the covenants made by the Executive in this Section 8 (and in Section 6
hereof) shall survive the expiration or termination of this Agreement.
(ii) The Executive acknowledges and agrees that a
remedy at law for any breach or threatened breach of the provisions of this
Section 8 would be inadequate and, therefore, agrees that the Company and any of
its Affiliates shall be entitled to injunctive relief in addition to any other
available rights and remedies in cases of any such breach or threatened breach;
provided, however, that nothing contained herein shall be construed as
prohibiting the Company or any of its Affiliates from pursuing any other rights
and remedies available for any such breach or threatened breach.
(c) (i) in the event Xx. Xxxxx is terminated during the
Employment Term without "Cause," the Company will pay to Xx. Xxxxx his then
current salary and benefits during the one year following such termination in
order to enforce the non-compete agreement;
(ii) in the event Xx. Xxxxx is terminated for
"Cause," he will be bound by the non-competition agreement, but will not be paid
any amounts with respect to the one-year period after the termination of his
employment;
(iii) if Xx. Xxxxx leaves voluntarily before the end
of the four-year Employment Term, but is not terminated by the
Company, the Company will not pay Xx. Xxxxx any amounts, but Xx.
Xxxxx will still be bound by the non-competition agreement for the
one-year period after his departure;
(iv) if Xx. Xxxxx finishes his initial four-year
Employment Term, he will be paid for his non-compete for the one-year period
after the expiration of the initial term; and
(v) if the agreement is renewed for subsequent
terms, the above terms shall apply as if each renewal term was the
original Employment Term."
-10-
9. Non-Assignability. Neither this Agreement nor any right or interest
hereunder shall be assignable by the Executive, Executive's beneficiaries, or
legal representatives without the Company's prior written consent; provided,
however, that nothing in this Section 9 shall preclude the Executive from
designating a beneficiary to receive any benefit payable hereunder upon
Executive's death or incapacity.
10. Binding Effect. Without limiting or diminishing the effect of
Section 9 hereof, this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, successors, legal
representatives and assigns; except under no circumstances will the provisions
of paragraph 8 be binding upon the Executive's heirs, successors, legal
representatives or assigns.
11. Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and either delivered in person or
sent by first class certified or registered mail, postage prepaid, if to the
Company, at the Company's principal place of business, and if to the Executive,
at Executive's home address set forth on the signature hereto, or to such other
address or addresses as either party shall have designated in writing to the
other party hereto.
12. Severability. The Executive agrees that in the event that any court
of competent jurisdiction shall finally hold that any provision of Section 6 or
8 hereof is void or constitutes an unreasonable restriction against the
Executive, such provision shall not be rendered void but shall apply to such
extent as such court may judicially determine constitutes a reasonable
restriction under the circumstances. If any part of this Agreement other than
Section 6 or 8 is held by a court of competent jurisdiction to be invalid,
illegible or incapable of being enforced in whole or in part by reason of any
rule of law or public policy, such part shall be deemed to be severed from the
remainder of this Agreement for the purpose only of the particular legal
proceedings in question and all other covenants and provisions of this Agreement
shall in every other respect continue in full force and effect and no covenant
or provision shall be deemed dependent upon any other covenant or provision.
-11-
13. Waiver. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any right or
power hereunder at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.
14. Life Insurance. The Executive agrees that any time and from time to
time during the Term, he will, at the request and at the expense of the Company,
cooperate with the Company in obtaining insurance on his life up to $2 Million
for the benefit of the Company and/or its stockholders. At the request of the
Company, the Executive will take such actions and execute and deliver such
documents that may be reasonably required in connection with the obtaining of
such insurance. The Executive acknowledges that the Company has, and its
stockholders have, an insurable interest in his life.
15. Entire Agreement; Modifications. This Agreement constitutes the
entire and final expression of the agreement of the parties with respect to the
subject matter hereof and supersedes all prior agreements, oral and written,
between the parties hereto with respect to the subject matter hereof. This
Agreement may be modified or amended only by an instrument in writing signed by
both parties hereto.
16. Governing Law and Arbitration of Disputes. This Agreement shall be
construed and enforced in accordance with the internal laws of the State of New
York without regard to the conflicts of law principles thereof. Any dispute
arising hereunder shall be settled by arbitration in Nassau County, New York, in
accordance with the rules then obtaining of the American Arbitration Association
("AAA"). One Arbitrator will be chosen by the parties who shall be an attorney
experienced in labor and employment law. If the parties cannot agree on the
identity of the Arbitrator, he will be appointed by the head of the AAA in
Nassau County.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Executive have duly executed
and delivered this Agreement as of the day and year first above written.
OMNICORDER TECHNOLOGIES, INC.
By: /s/ Xxxxx Granberd
--------------------------------
Secretary
/s/ Xxxx X. Xxxxx
--------------------------------
-12-
