EMPLOYMENT AGREEMENT
Exhibit
99.1
THIS
EMPLOYMENT AGREEMENT (as amended, supplemented or extended from time to time,
this "Agreement") is
entered into as of December 6, 2007, by and between BSML,
Inc.,
a Utah
corporation (the "Employer" or
"Company"
or
“BriteSmile”),
and
Xxxxxx
Xxxxxxx
("Employee").
WHEREAS,
the Employer desires to engage Employee as an employee, and Employee desires
to
accept employment by the Employer, on the terms of this Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and other
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound hereby, the parties do hereby
agree as follows:
1. Employment
and Employment Period.
(a) Position
and Duties.
(i) Subject
to the terms and conditions of this Agreement, the Employer agrees to employ
Employee, and Employee agrees to be employed by the Employer, during the
Employment Term (as defined in Section 1(b)).
(ii) During
the Employment Term, Employee will serve as Chief Executive Officer of the
Employer and the Employee shall report to the Board of Directors and carry
out
the lawful directions of the Company's Board of Directors.
(iii) At
all
times during the Employment Term, Employee agrees to (A) perform all services
related to Employee's employment hereunder faithfully and diligently and to
discharge the responsibilities thereof to the best of Employee's ability, (B)
devote the necessary and requisite business time, attention and energies to
the
duties of Employee's employment under this Agreement, (C) subject to Section
1(a)(vi), ensure that the performance of his services hereunder is his sole
business endeavor, and (D) use Employee's best efforts to promote the business
of the Employer.
(iv) Employee
shall be named to the Company's
Board
of Directors and shall serve during the Employment Term as Chairman of the
Board
of Directors and as a member of the Company's Executive Committee. Employer
shall take all steps necessary to ensure Employee’s nomination and appointment
as a member of the Board of Directors of the Company as soon as practicable
after this Agreement is fully executed by the parties hereto. In the event
such
appointment is not effectuated and properly documented to Employee’s reasonable
satisfaction within seven (7) days of the date of this Agreement, Employee
shall
have the right to resign, this Agreement shall be deemed to be null and void
and
Employee shall have no further liability, monetary or otherwise, to Employer.
In
the event of such resignation, Employee shall be entitled to immediately receive
all accrued Annual Base Salary (as defined below).
(v)
During the Employment Term and so long as Sleek, Inc., a Massachusetts
corporation (“Sleek”),
is
not in default under the Sleek Services Agreement (as defined below), Employee
shall be entitled to elect a majority of the members of the Board of Directors
(“Board”)
pursuant to the Proxy Agreements (as defined below). It is presently anticipated
that the Board shall not exceed five (5) members, but if the Board is expanded,
Employee will in all cases have the ability to name a majority of its members.
(vi)
Notwithstanding Section 1(a)(iii) but subject to Section 5(a) hereof, during
the
Employment Term, the Employee shall be permitted to act as a director and Chief
Executive Officer of Sleek.
(b) Employment
Term.
The
Employee shall begin his employment on such date (the "Start
Date"), not
later
than December __, 2007, as the Employee and the Company shall reasonably agree.
Subject to Section 4, the term of Employee's employment (the "Employment Term")
shall
commence on the Start Date and shall continue until that date which is three
(3)
years after the Start Date (the “Termination
Date”).
(c) Place
of Employment.
The
Employee will perform his duties from the Company’s headquarters; provided that
the Employee may cause the Company to move its headquarters to Boca Raton,
Florida within ninety (90) days of the date of this Agreement. The Employee
and
Employer acknowledge that such location can change, which change will not be
a
breach of this Agreement by the Employer.
(d) Confidentiality
Agreement.
As a
condition to Employee's employment by the Employer as contemplated by this
Agreement, Employee hereby acknowledges that he shall continue to be bound
by
the Confidentiality and Rights Ownership Agreement by and between Employer
and
Employee (the "Confidentiality
Agreement").
2. Compensation;
Reimbursement of Expenses.
(a) Salary.
During
the Employment Term, in consideration for the services to
be
rendered hereunder, and subject to the terms and conditions of this Agreement,
the Employer hereby agrees to pay Employee, in accordance with its normal
payroll practices, an annual base salary of $350,000 (the "Annual
Base Salary");
provided however, that the Annual Base Salary shall accrue and not be paid
to
Employee until such time as the Company reports in an annual or quarterly report
filed with the United States Securities and Exchange Commission EBITDA of at
least $1,000,000. At such time, all accrued and unpaid Annual Base Salary shall
be paid to Employee and the Company shall thereafter pay Employee the Annual
Base Salary in accordance with its normal payroll practices. All compensation
shall be subject to all applicable tax withholding and similar requirements
under applicable law.
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(b) Incentive
Compensation.
In
addition to the Annual Base Salary, Employee shall be eligible to receive an
annual performance bonus of up to $1,000,000 per year (the “Aggregate
Bonus Amount”)
to be
paid $50,000 for each $1 million of EBITDA in excess of $0.00 for each annual
reporting period. By way of example, if reported EBITDA for the period ending
December 31, 2008 is $2,000,000 then Employee would be entitled to an Aggregate
Bonus Amount for that period of $100,000.00. By way of further example, if
the
reported EBITDA for the period ending December 31, 2009 is $3,900,000 then
Employee would be paid an Aggregate Bonus Amount for that period in the amount
of $150,000. The Aggregate Bonus Amount shall be paid within ten (10) business
days after the date in each year on which the Company files its Form 10-K for
the preceding fiscal year.
(c)
Reimbursement
of Expenses.
The
parties anticipate that in the course of performing his duties under this
Agreement during the Employment Term, the Employee will incur reasonable
out-of-pocket business expenses for the account of the Company. The Employee
shall be entitled to prompt reimbursement for all reasonable out-of-pocket
business expenses so incurred, upon submission to the Company of an adequate,
written accounting which complies in form and substance with the Company's
general policy for its senior executives regarding records to support
reimbursement for business expenses incurred for the account of the
Company.
3. Benefits.
During
the Employment Term, Employee shall be entitled to participate in all medical,
profit sharing and other benefit plans made available to senior executives
and/or other employees of the Company, including, without limitation, 401(k),
simple, profit sharing, stock, stock option, medical, hospitalization, dental,
disability, life and travel accident insurance plans and programs, such
participation and coverage to be on terms and conditions no less favorable
to
Employee than to the Company’s other senior executives. The Board of Directors
of the Company reserves the right to alter, revise or eliminate any prior
practice, policy or benefit in whole or in part, without notice, which
revision(s), if any, will not be a breach of this Agreement by the
Employer..
4. Termination
of Employment.
(a) Termination
for Cause.
This
Agreement (and the Employment Term) may be terminated at any time by the
Employer for Cause, by written notice to the Employee specifying in reasonable
detail the reasons therefor. The term "Cause" shall
mean willful misconduct that results in material economic, regulatory or similar
harm to the Company, dishonesty (i) intended to result in personal enrichment
of
the Employee at the expense of the Company or (ii) which results in material
economic, regulatory or similar harm to the Company, conviction of or failure
to
contest prosecution for a felony, a material breach by the Employee of his
duties and obligations under this Agreement which is not remedied to the
satisfaction of the Board within fifteen (15) business days after receipt by
the
Employee of written notice of such breach from the Board.
(b) Death
or Permanent Disability of Employee.
Employee's employment hereunder and the Employment Term shall terminate upon
Employee's death. In addition, the Employer shall have the right to terminate
Employee's employment hereunder and the Employment Term upon 15 days' written
notice if and when Employee becomes permanently disabled within the meaning
of
any permanent disability insurance policy which may be maintained by the
Employer for the benefit of Employee and under which the Employee is entitled
to
benefits under Section 3; provided, however, that if Employer does not maintain
such a permanent disability insurance policy for the benefit of Employee,
Employee shall be deemed permanently disabled if Employee, by reason of injury,
illness or similar cause was unable to perform his duties for a period of 90
consecutive days or 120 days in any 360-day period.
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(c) Compensation
Upon Death, Disability, Termination for Cause.
If
(i) Employee
dies during the Employment Period or the Employer terminates Employee's
employment upon Employee's becoming permanently disabled, as described in
Section 4(b), or (ii) the
Employer terminates Employee's employment for Cause, as described in Section
4(a), then (A) the Employer will pay to Employee (or Employee's estate or
representatives, as the case may be) within 30 days following such termination
of employment (or on the earliest later date as may be required to comply with
Internal Revenue Code Section 409A to the extent applicable), the unpaid Annual
Base Salary, Aggregate Bonus Amount, reimbursed expenses, vacation and any
other
benefits earned by Employee before the date of such event as provided for in
this Agreement (computed pro rata up to and including such date of such event)
(the "Accrued
Obligations"); and
(B)
the Employee shall continue to be bound by the Confidentiality Agreement in
accordance with its terms. Except as expressly provided in this Agreement,
such
payments will be in lieu of any and all other compensation, benefits and claims
of any kind, excepting only such additional amounts as may be provided for
under
the express terms of any applicable benefit plans or be required by law to
be
paid (which amounts will be paid in accordance with such terms or requirements,
as the case may be).
(d) Termination
Without Cause.
The
Employer, by written notice to Employee, shall have the right to terminate
Employee's employment without Cause for any reason or for no reason. If the
Employer terminates Employee's employment without Cause for any reason or for
no
reason, as described in this Section 4(d), then (A) the Employer will pay to
Employee (i) within 30 days following such termination (or on the earliest
later
date as may be required by Internal Revenue Code Section 409A to the extent
applicable), the Accrued Obligations, and (ii) twelve (12) month's Annual Base
Salary, payable in accordance with the Company's normal payroll practices;
and
(B) the Employee shall continue to be bound by the Confidentiality Agreement
in
accordance with its terms. Except as expressly provided in this Agreement,
such
payments will be in lieu of any and all other compensation, benefits and claims
of any kind, excepting only such additional amounts as may be provided for
under
the express terms of any applicable benefit plans or be required by law to
be
paid (which amounts will be paid in accordance with such terms or requirements,
as the case may be).
5. Non-Competition;
Solicitation of Employees.
(a) Non-Competition.
During
the Employment Term and to the extent permitted by applicable law for two (2)
years thereafter, the Employee shall not participate in the management or act
as
a consultant or employee of, or acquire any financial interest (other than
less
than 2% of the outstanding stock of any public company) in, any enterprise
that
is engaged in the business of light activated teeth whitening (the "Restricted
Business") in
the
United States or in any other area of the world where the Company conducts
the
Restricted Business during the Employment Term, or where, as of the end of
the
Employment Term, the Company has undertaken substantial activities to conduct
the Restricted Business.
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(b) Solicitation.
For two
(2) years after the termination of the Employment Term, the Employee will not
employ, solicit or recommend to any other person that they employ or solicit
for
employment any person who is, or was at any time within six (6) months prior
to
such termination, an employee of the Company, provided that the Employee may
respond in accordance with ordinary business practices to requests for
references from a prospective employer of any such person.
(c) Access
to Confidential Information.
Employee
is a key employee of the Company. Employee acknowledges that during the
Employment Term he will have access to and knowledge of confidential information
as defined in the Confidentiality Agreement ("Confidential
Information"), and
has
and will be responsible for, or instrumental in creating or maintaining, certain
business relations and goodwill that are valuable to the Company. Employee
acknowledges that the Confidential Information and goodwill belong to the
Company.
(d) Necessary
Restrictions.
Employee
acknowledges that the covenants and restrictions of this Section 5 are necessary
to protect the Company's Confidential Information and to preserve the value
of
the Company's good will for the Company. Employee agrees and acknowledges that
the time, scope and geographic limitations of this Section 5 are reasonable.
Employee also agrees and acknowledges that the terms of this Section 5 are
reasonably necessary for the protection of the Company's Confidential
Information and goodwill, and they provide a reasonable means of protecting
the
Company's business value.
(e) Adequate
Consideration.
Employee
acknowledges that the consideration received and to be received by him during
the Employment Term is adequate for the covenants of this Section
5.
6. Conditions
to Execution.
Employee
and the Company agree that the following documents will be executed and/or
delivered concurrently with the execution of this Employment
Agreement:
(a) Support
Services Agreement between Sleek and the Company in the form attached hereto
as
Exhibit
A
(the
“Sleek
Services Agreement”).
(b) Proxy
agreements executed by [CAP entities], Xxxxxxxx Xxxxxx, Xxxxxx Xxxxxxx and
Xxxx
Xxxx in the form attached hereto as Exhibit
B
(the
“Proxy
Agreements”).
(c) The
Confidentiality Agreement in the form attached hereto as Exhibit
C.
7. Miscellaneous.
(a) Representations.
The
Employee represents that his employment by the Company pursuant to this
Agreement and the observance of his obligations under the Confidentiality
Agreement will not conflict with any other agreements or understanding to which
he is subject.
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(b) Waivers.
No
waiver of any terms or conditions or of the breach of any covenant,
representation or warranty of this Agreement or the Confidentiality Agreement
in
any one instance shall operate as or be deemed to be or construed as a further
or continuing waiver of any other breach of such term, condition, covenant,
representation or warranty or any other term, condition, covenant,
representation or warranty nor shall any failure or delay at any time or times
to enforce or require performance of any provision hereof operate as a waiver
of
or affect in any manner such party's right at a later time to enforce or require
performance of such provision or of any other provision hereof.
(c) Modification.
Except
as otherwise provided in this Agreement, neither this Agreement, the
Confidentiality Agreement nor any term hereof or thereof may be changed,
amended, modified, waived, discharged or terminated except to the extent that
the same is effected and evidenced by the written consent of the party against
whom enforcement of such change or modification is sought.
(d) Injunctive
Relief.
Employee
acknowledges and agrees that it is fair and reasonable that he make the
covenants and undertakings set forth in Section 5 of this Agreement and in
the
Confidentiality Agreement and has done so with the benefit of the advice of
counsel. Furthermore, Employee agrees that any breach or attempted breach by
him
of such provisions will cause the Company irreparable damage for which a
monetary award would be inadequate remedy. Accordingly, the Employer shall
be
entitled to apply for and obtain, in addition to monetary awards, injunctive
relief (temporary, preliminary and permanent) in order to restrain the breach
or
threatened breach of, or otherwise to specifically enforce, any of the
provisions of Section 5 of this Agreement or the Confidentiality Agreement,
without the requirement to post a bond or provide other security. Employee
hereby consents to the entry of mandatory injunctive relief to assure his
specific performance of the terms of Section 5 of this Agreement and the
Confidentiality Agreement by a court or arbitrator of competent jurisdiction.
Nothing herein shall be construed as a limitation or waiver of any other rights
or remedies that may be available to the Employer for such breach or threatened
breach. Employee further agrees that the subject matter and duration of the
restrictions in Section 5 of this Agreement and the Confidentiality Agreement
are reasonable in light of the facts as they exist today.
(e) Governing
Law.
This
Agreement and the Confidentiality Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Utah applicable to
agreements made and to be performed entirely within such State.
(f) Notices.
All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and sent as follows:
If
to
Employee:
Xxxxxx
Xxxxxxx
_______________________
_______________________
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If
to the
Employer:
BriteSmile,
Inc.
000
Xxxxx
Xxxxx Xxxx
Xxxxxx
Xxxxx, XX 00000
Attn:
Chief Financial Officer
All
notices and other communications required or permitted under this Agreement
which are addressed as provided in this Section 7(f), (A) if delivered
personally against proper receipt shall be effective upon receipt and (B) if
sent (1) by certified or registered mail with postage prepaid or (2) by Federal
Express or similar courier service with courier fees paid by the sender, shall
be effective upon delivery. The parties hereto may from time to time change
their respective addresses for the purpose of notices to that party by a similar
notice specifying a new address, but no such change shall be deemed to have been
given unless it is sent and received in accordance with this Section
7(f).
(g) Entire
Understanding; No Third Party Beneficiaries.
This
Agreement, with the Confidentiality Agreement, represents the entire
understanding of the Employer and Employee with respect to Employee's employment
with the Employer and Employee's compensation therefor. Nothing in this
Agreement, express or implied, is intended to confer on any person, other than
the parties hereto and their respective heirs, permitted representatives,
successors and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
(h) Severability.
If any
of the provisions of this Agreement or the Confidentiality Agreement are found
by any court of competent jurisdiction (or legally empowered agency) to be
in
violation of applicable law or unenforceable for any reason whatsoever, then
it
is the intention of the parties that such provision or provisions be deemed
to
be automatically amended to the extent necessary to comply with applicable
law
and permit enforcement. If any of the provisions of this Agreement or the
Confidentiality Agreement shall be deemed by any court of competent jurisdiction
(or legally empowered agency) to be wholly or partially invalid, such
determination shall not affect the binding effect of the other provisions of
this Agreement or the Confidentiality Agreement.
(i) Counterparts.
This
Agreement and the Confidentiality Agreement may be executed in two or more
counterparts, including facsimile counterparts, each of which shall be deemed
an
original, but all of which together shall constitute one and the same
instrument.
(j) Headings;
Interpretation.
The
various headings contained herein are for reference purposes only and do not
limit or otherwise affect any of the provisions of this Agreement. It is the
intent of the parties that neither this Agreement nor the Confidentiality
Agreement be construed more strictly with regard to one party than with regard
to any other Party.
(k) Successors
and Assigns.
This
Agreement and the Confidentiality Agreement shall be binding upon and inure
to
the benefit of any successor or assigns of the Employer, whether by merger,
consolidation, sale of assets or otherwise, and reference herein to the Employer
shall be deemed to include any such successor or assigns.
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(l) Legal
Fees.
Each
party shall pay the reasonable legal expenses incurred by him/it in connection
with the negotiation, execution and delivery of this Employment Agreement and
the Confidentiality Agreement.
(m) Representations;
Authority.
The
Company represents and warrants that it is fully authorized and empowered to
enter into this Agreement and that the performance of its obligations under
this
Agreement will not violate any agreement between the Company and any other
person, firm or organization. The Employee represents and warrants that the
performance of the Employee's duties under this Agreement will not violate
any
agreement between the Employee and any other person, firm, partnership, company
or other organization or association.
(n) Beneficiaries.
Except
as provided in any plan, program or policy of the Company, the Employee shall
be
entitled to select (and change, to the extent permitted under any applicable
law) a beneficiary or beneficiaries to receive any compensation or benefit
payable hereunder following his death by giving the Company written notice
thereof. In the absence of such designation or if such designation shall be
ineffective, the Employee's wife shall be such beneficiary and if she shall
not
survive to receive payment, the Employee's estate shall be the beneficiary
of
payments to be made hereunder. In the event of the Employee's death or a
judicial determination of his incompetence, reference in this Agreement to
the
Employee shall be deemed, where appropriate, to refer to his beneficiary, estate
or other legal representative.
(o) Indemnification;
Insurance.
(i) The
Company agrees that if the Employee is made, or is threatened to be made, a
party to any action or proceeding, whether civil or criminal, by reason of
the
fact that he is or was a director or officer of the Company or, at the request
of the Company, serves or served any other company, partnership, joint venture,
trust or other enterprise in any capacity, the Company shall indemnify him
to
the fullest extent permitted by the Charter and by-laws of the Company or,
if
greater, by the applicable laws of the State of Utah, against all costs,
expenses, liabilities and losses reasonably incurred or suffered by the Employee
in connection therewith. Subject to applicable law, the Company shall advance
to
the Employee all reasonable costs and expenses incurred by him in connection
with any such proceeding upon receipt of an itemized list of such costs and
expenses.
(ii) The
Company shall use commercially reasonable efforts to maintain, or cause the
Employee to be covered by, a directors' and officers' liability insurance policy
covering the Employee and other officers and directors of the Company throughout
the Employment Term and for at least six years thereafter with respect to
actions or failures to act during his employment with the Company under this
Agreement.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE
PAGE FOLLOWS.]
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first above written.
BSML, INC. | ||
|
|
|
By: | /s/ J Feneley | |
Name: J Feneley |
||
Title: CEO | ||
/s/ Xxxxxx Xxxxxxx | ||
Xxxxxx Xxxxxxx |
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EXHIBIT
A
10
EXHIBIT
B
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EXHIBIT
C
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