EMPLOYMENT AGREEMENT
XXXXX XXXXXXX
AMENDED AND RESTATED EMPLOYMENT AGREEMENT dated November 11, 2005 (the
"Agreement") among Millennium Biotechnologies Group, Inc., a Delaware
corporation ("Group"), Millennium Biotechnologies, Inc. (the "Company"), and
Xxxxx Xxxxxxx (the "Executive").
WHEREAS, the Executive has heretofore been employed by the Company, a
wholly owned subsidiary of Group, as an employee "at will".
WHEREAS, the Company desires to secure the continued services of the
Executive, and the Executive desires to continue in the employment of the
Company and, in connection therewith, the Company, Group and the Executive
desire to set forth the terms of such continued employment.
NOW, THEREFORE, in consideration of the foregoing and the respective
covenants and agreements hereinafter set forth and for other good and valuable
consideration, the Company, Group and the Executive hereby agree, as follows:
1. EMPLOYMENT AND DUTIES
1.1. General. The Company hereby employs the Executive, and the
Executive agrees to serve, as Chief Financial Officer.
1.2. Exclusive Services. During the term of this Agreement, the
Executive shall devote his full-time working hours to his duties hereunder and
shall not, directly or indirectly, render services to any other person or
organization for which he receives compensation without the consent of the
President or otherwise engage in activities which would interfere significantly
with his faithful performance of his duties hereunder.
1.3. Term of Employment. The Executive's employment under this
Agreement shall be deemed effective as of January 1, 2005 (the "Commencement
Date") and shall terminate on the earliest of (i) December 31, 2010, (ii) the
death of the Executive or (iii) the termination of the Executive's employment
pursuant to this Agreement (the "Employment Term").
2. Compensation.
2.1. Base Salary. Effective as of the Commencement Date, the
Executive shall be entitled to receive a base salary ("Base Salary") at a rate
of $98,000 per annum, payable in arrears in equal installments in accordance
with the Company's payroll practices, with such increases as may be provided in
accordance with the terms hereof. Once increased, such higher amount shall
constitute the Executive's annual Base Salary.
2.2. Increase in Base Salary. Immediately following the first fiscal
quarter in which the Company shall have achieved revenues in excess of
$1,250,000, the Base Salary shall be increased to the rate of $125,000 per
annum. Immediately following the first quarter in which the Company shall have
achieved revenues in excess of $2,500,000, the Base Salary shall be increased to
the rate of $150,000 per annum. Immediately following the first quarter in which
the Company shall have achieved revenues in excess of $3,750,000, the Base
Salary shall be increased to the rate of $200,000 per annum.
2.3 Stock Options. Group shall issue to the Executive options
("Options") as follows: (a) Options to purchase 334,000 shares of common stock
at an exercise price of $.37 for a term of five years from the date hereof,
which Options shall vest on January 1, 2006; and (b) Option to purchase an
additional 600,000 shares of common stock at an exercise price of $.01, for a
term of three years from the date hereof, of which (a) Options for 400,000
shares shall vest and become exercisable only in the event the Executive is
2
continually employed under the terms of this Agreement by the Company through
January 15, 2006; and (b) Options for the remaining 200,000 shares shall vest
and become exercisable only in the event the Executive is continually employed
under the terms of this Agreement through January 15, 2007. Notwithstanding the
foregoing, in the event of (i) a Change of Control; (ii) the Executive's
employment is terminated by the Company Without Cause; (iii) employment
hereunder is terminated by the Executive for Good Reason; (iv) the Death of the
Executive; and/or (v) Permanent Disability of the Executive, the Options which
have not previously vested, shall immediately vest and become exercisable upon
such event. The Options shall provide for cashless exercise and piggyback
registration rights and shall be in the form of Options annexed to this
Agreement. "Change of Control" shall mean (i) the transfer (in one transaction
or a series of transactions) of all or substantially all of the assets of Group
or the Company to any person or group (as such term is used in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")); (ii)
the liquidation or dissolution of Group or the Company or the adoption of a plan
by the stockholders of Group or the Company relating to the dissolution or
liquidation of either Group or the Company; or (iii) the acquisition by any
person or group (as such term is used in Section 13(d)(3) of the Exchange Act)
of beneficial ownership, directly or indirectly, of more than 50% of the
aggregate ordinary voting power of Group or the Company.
3. EMPLOYEE BENEFITS
3.1. General Benefits. The Executive shall receive the following
benefits during the Employment Term:
(a) the Executive will be eligible to participate in the health and
benefit programs of the Company consistent with those benefit programs provided
from time to time to other senior executives of the Company;
(b) an automobile allowance of $1,000 per month;
3
(c) participation in any executive incentive plan which might be
implemented by the Board during the Employment Term.
3.2. Vacation. The Executive shall be entitled to 15 days paid
vacation each calendar year in accordance with the applicable policies of the
Company.
4. TERMINATION OF EMPLOYMENT
4.1. Termination for Cause; Termination Without Cause; Termination
for Permanent Disability; Resignation.
4.1.1. General. (a) If, prior to the expiration of the Employment
Term, the Executive's employment is terminated by the Company for Cause, the
Executive shall be entitled only to (i) his accrued but unpaid Base Salary
through and including the date of termination ("Accrued Base Salary"); and (ii)
the Options which have vested prior to the date of such termination.
(b) If, prior to the expiration of the Employment Term, the
Executive is terminated by the Company Without Cause or the Executive terminates
employment for Good Reason, the Executive shall be entitled to (i) his Accrued
Base Salary; and (ii) as and for severance his Base Salary from the day after
the termination date through the normal expiration date of the Employment Term,
payable in a lump sum upon termination, and the benefits set forth under Section
3.1 of this Agreement during such period.
(c) If, prior to the expiration of the Employment Term, the
Executive's employment is terminated by the Company for Permanent Disability (as
defined in Section 5), the Executive shall be entitled to the payments and
benefits as provided for in Section 4.1.1(b).
(d) If the Executive resigns from his employment hereunder without
Good Reason, the Executive shall be entitled only to payment of his Accrued Base
Salary, if any, payable in a lump sum not later than 30 days following the date
of termination.
4
(e) In the event of termination hereunder as a result of death of
the Executive, the Executive's estate shall be entitled to the compensation
provided for in Section 4.1.1(b).
(f) Except as otherwise provided herein, the Executive shall have no
further right to receive any other compensation, or to participate in any other
plan, arrangement, or benefit, after any termination or resignation of
employment, subject to the terms of such plans or arrangements.
4.1.2. Date of Termination/Resignation. The date of termination for
a termination by the Company for Cause shall be the date of the written notice
of termination provided for in Section 4.1.3. The date of termination for a
Termination Without Cause shall be as provided in Section 4.1.1. The date of
termination for a termination for Permanent Disability shall be as provided in
Section 5. The date of resignation shall be the date specified in the written
notice of resignation from the Executive to the Company, or if no date is
specified therein, 10 business days after receipt by the Company of written
notice of resignation from the Executive.
4.1.3. Notice of Termination for Cause. Termination of the
Executive's employment by the Company for Cause shall be effected by delivery of
a written notice of termination from the Company to the Executive, which notice
shall specify the event or events set forth in Section 4.2 giving rise to such
termination.
4.1.4. Notice of Termination Without Cause. Termination of the
Executive's employment for a Termination Without Cause shall be effected by
written notice of termination from the Company to the Executive, specifying a
termination date no earlier than 10 business days after the date on which such
notice is given.
4.2. Termination for Cause. Termination for "Cause" shall mean
termination by the Company of the Executive's employment because the Executive
(a) admits to, has been convicted of or has entered into a plea of nolo
contendere to a crime punishable by imprisonment for more that one year; or (b)
has failed to perform in all material respects (following a written warning
specifying such deficiency) the normal and customary duties required of his
position of employment.
5
4.3. Termination Without Cause. "Termination Without Cause" shall
mean any termination by the Company of the Executive's employment at any time
during the Employment Term for any reason other than Cause, death or Permanent
Disability.
5. PERMANENT DISABILITY
If, prior to the expiration of the Employment Term, the Executive
shall fail because of illness, physical or mental disability or other
incapacity, for a period of three consecutive months, or for shorter periods
aggregating three months during any twelve-month period, to render the services
provided for by this Agreement, then the Company may, by written notice to the
Executive after the last day of the three consecutive months of disability or
the day on which the shorter periods of disability equal an aggregate of three
months, terminate the Executive's employment for "Permanent Disability",
specifying a termination date no earlier than 10 business days after the date on
which such notice is given. The determination of the Executive's Permanent
Disability shall be made by an independent physician who is reasonably
acceptable to the Executive and the Company and shall be final and binding and
shall be based on such competent medical evidence as shall be presented to it by
the Executive or by any physician or group of physicians or other competent
medical experts employed by the Executive and/or the Company to advise such
independent physician.
6. NONCOMPETITION/NONSOLICITATION AND CONFIDENTIALITY
6.1. Noncompetition/Nonsolicitation. The Executive shall not,
directly or indirectly, as a sole proprietor, member of a partnership,
stockholder or investor, officer or director of a corporation, or as an
employee, associate, consultant or agent of any person, partnership, corporation
or other business organization or entity other than the Company: (a) engage in,
or acquire an interest in any entity or enterprise which engages in, any
business that is in competition with any business actively conducted by Group,
6
the Company or any of their respective subsidiaries; (b) solicit or endeavor to
entice away from Group, the Company or any of their respective subsidiaries any
person who is, or was during the then most recent 36-month period, employed by
or associated with Group, the Company or any of their respective subsidiaries,
or (c) solicit or endeavor to entice away from Group, the Company or any of
their respective subsidiaries, or otherwise interfere with the business
relationship of Group, the Company or any of their respective subsidiaries with,
any person or entity who is, or was within the then most recent 36-month period,
a customer, client or prospect of Group, the Company or any of their respective
subsidiaries. The obligations of this Section 6.1 shall apply during the Term
hereof and with respect to subpart (b) and (c), for 12 months after termination
of employment of the Executive, and shall be extended by a period of time equal
to any period during which the Executive shall be in breach of such obligations.
6.2. Confidentiality. The Executive covenants and agrees with the
Company that he will not at any time, except in performance of his obligations
to the Company hereunder or with the prior written consent of the Company,
directly or indirectly, disclose any secret or confidential information that he
may learn or has learned by reason of his association with Group, the Company or
any of their respective subsidiaries and affiliates. The term "confidential
information" includes information not previously disclosed to the public or to
the trade by the Company's or Group's management, or otherwise in the public
domain, with respect to the Company's or Group's or any of their respective
affiliates' or subsidiaries' products, services, facilities, applications and
methods, trade secrets and other intellectual property, systems, procedures,
manuals, confidential reports, product or service price lists, customer lists,
technical information, financial information (including the revenues, costs or
profits associated with any of the Company's or Group's products), business
plans, prospects or opportunities.
7
6.3. Exclusive Property. The Executive confirms that all
confidential information is and shall remain the exclusive property of Group and
the Company. All business records, papers and documents kept or made by the
Executive relating to the business of Group, the Company or their respective
subsidiaries shall be and remain the property of Group and the Company.
6.4. Injunctive Relief. Without intending to limit the remedies
available to Group and the Company, the Executive acknowledges that a breach of
any of the covenants contained in this Section 6 may result in material and
irreparable injury to Group, the Company or their respective affiliates or
subsidiaries for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach or threat thereof, Group and the Company shall be entitled to
obtain a temporary restraining order and/or a preliminary or permanent
injunction restraining the Executive from engaging in activities prohibited by
this Section 6 or such other relief as may be required specifically to enforce
any of the covenants in this Section 6. If for any reason a final decision of
any court determines that the restrictions under this Section 6 are not
reasonable or that consideration therefor is inadequate, such restrictions shall
be interpreted, modified or rewritten by such court to include as much of the
duration and scope identified in this Section 6 as will render such restrictions
valid and enforceable.
7. MISCELLANEOUS
7.1. Notices. All notices or communications hereunder shall be in
writing, addressed as follows:
To the Company or Group, to it at:
Millennium Biotechnologies Group, Inc
000 Xxxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
8
Attention: President
with a copy to:
Xxxxxxxxx Xxxxx Xxxx & Xxxxx P.C.
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx
To the Executive:
Xxxxx Xxxxxxx
-------------------------------
-------------------------------
Any such notice or communication shall be sent certified or registered
mail, return receipt requested, or by facsimile, addressed as above (or to such
other address as such party may designate in writing from time to time), and the
actual date of receipt shall determine the time at which notice was given.
7.2. Severability. If a court of competent jurisdiction determines
that any term or provision hereof is invalid or unenforceable, (a) the remaining
terms and provisions hereof shall be unimpaired and (b) such court shall have
the authority to replace such invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision.
7.3. Assignment. This Agreement shall inure to the benefit of the
heirs and representatives of the Executive and the assigns and successors of the
Company, but neither this Agreement nor any rights hereunder shall be assignable
or otherwise subject to hypothecation by the Executive. Each of Group and the
Company may assign this Agreement without prior written approval of the
Executive upon the transfer of all or substantially all of its business and/or
assets (whether by purchase, merger, consolidation or otherwise), provided that
the successor to such business and/or assets shall expressly assume and agree to
perform this Agreement.
9
7.4. Entire Agreement; Amendment. This Agreement represents the
entire agreement of the parties with respect to the subject matter hereof and
shall supersede any and all previous contracts, arrangements or understandings
between or among Group, the Company and the Executive. The Agreement may be
amended at any time by mutual written agreement of the parties hereto.
7.5. Withholding. The Company shall be entitled to withhold, or
cause to be withheld, from payment any amount of withholding taxes required by
law with respect to payments made to the Executive in connection with his
employment hereunder.
7.6. Governing Law. This Agreement shall be construed, interpreted,
and governed in accordance with the laws of the State of New Jersey without
reference to principles of conflict of laws.
7.7. Headings. Headings to sections in this Agreement are for the
convenience of the parties only and are not intended to be a part of or to
affect the meaning or interpretation hereof.
7.8. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
10
IN WITNESS WHEREOF, the Company and Group have caused this Agreement to be
duly executed by their authorized representatives and the Executive has hereunto
set his hand, in each case effective as of the day and year first above written.
Millennium Biotechnologies Group, Inc.
Millennium Biotechnologies, Inc.
By: /s/ Xxxxx X. Xxxx
-------------------------------
Xxxxx X. Xxxx
Executive
/s/ Xxxxx Xxxxxxx
----------------------------------
Xxxxx Xxxxxxx
11
