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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is dated as of August 18,
2000, between BIOSHIELD TECHNOLOGIES, INC., a Delaware corporation (the
"Company"), and XXXXXX X. XXXXXX (the "Executive").
1. Employment. The Company hereby agrees to employ the Executive,
and the Executive hereby agrees to be employed by the Company, on the terms and
conditions set forth herein.
2. Term.
(a) The "Initial Term" of the employment of the
Executive by the Company as provided in Section 1
will commence on September 1, 2000 (the "Effective
Date") and will terminate at 11:59 p.m. on September
1, 2003 (the "Expiration Date") unless extended or
sooner terminated as hereinafter provided (such
period, the "Employment Period").
(b) The "Employment Period" may be extended beyond the
Initial Term by the mutual agreement of the parties
in writing at least ninety (90) days prior to the
end of the Initial Term (the "Extended Term").
(c) The "Business" of the Company shall be development,
marketing, and sale of surface modifying
antimicrobials and biostatic products.
3. Position, Duties and Responsibilities.
(a) Position. The Executive hereby agrees to serve as
Chief Operating Officer ("COO") of BioShield
Technologies, Inc. reporting to the Board of
Directors of the Company ("Board") and to the Chief
Executive Officer of the Company ("CEO").
(b) Place of Employment. During the term of this
Agreement, the Company's headquarters shall be
located in the greater Atlanta, Georgia area.
(c) Other Activities. Except with the prior written
approval of the Board (which the Board may grant or
withhold in its sole and absolute discretion), the
Executive, during the Employment Period, will not
(i) accept any other employment, or (ii) engage,
directly or indirectly, in any other business
activity (whether or not pursued for pecuniary
advantage) that is or may be competitive with or
that might place him in a competing position to,
that of the Company or any of its affiliates.
Notwithstanding the foregoing, the Company agrees
that the Executive (or affiliates of the Executive)
shall be permitted: (i) to make any passive personal
investments that are not in a business activity that
is directly or indirectly competitive with the
Company (ii) to participate in industry
organizations, (iii)
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with the consent of the Board of Directors of the
Company, to be a member of Boards of Directors of
other entities which do not directly compete with
the Company, and (iv) to participate in charitable
or educational activities.
(d) Present Outside Activities. Executive shall disclose
to the Board and to the CEO all outside activities
in which he is involved prior to the execution of
this Agreement.
4. Compensation and Related Matters.
(a) Salary and Bonus. During the Employment Period, the
Company shall pay the Executive a salary of two
hundred thousand DOLLARS ($200,000.00) annually (the
"Salary"). The Executive shall also be eligible for
bonuses of 50% of the Executive's salary as may be
determined in the sole discretion of the Board of
Directors and/or the CEO. All Salary and bonuses to
be paid consistent with the standard payroll
practices of the Company (e.g., timing of payments
and standard employee deductions, such as income tax
withholdings, social security, etc.).
(b) Stock Options. In addition to the Salary, the
Executive shall be entitled to receive a stock
option granted in accordance with the terms and
conditions set forth in the Company's stock option
plan and the stock option agreement. The amount of
shares granted under the stock option shall be two
hundred forty thousand (240,000), the exercise price
for each share shall be determined by the signing
date of this Agreement as determined by the closing
price on said day, and the option shall vest in one
third increments on the first, second and third
anniversaries of the grant; provided, however, that
said any unvested options for any one year shall
become fully vested upon the a change in control in
that vesting year, which shall include the
following: (1) the Company transfers, sells or
conveys all or substantially all of its assets or
stock to a person or entity not a party to this
Agreement; (2) the Company is merged into (or
otherwise acquired by) a corporation or other entity
and is not the survivor of said merger; provided,
further, that an internal corporate reorganization,
recapitalization or any other transaction involving
the Company which leaves substantially the same
assets performing substantially the same
business(es) shall not trigger the acceleration
rights hereunder.
(c) Vacation. During the Employment Period Executive
shall be entitled to twenty (20) days of vacation
during each calendar year and shall not be
cumulative, unless and until the Company changes its
policy toward accumulation of vacation days for
other employees of the Company in which case
Executive's vacation days shall follow such policy
of the Company. Unless and until such policy change
at no time shall Executive be entitled to receive
more than twenty (20) days of vacation.
(d) Business Expenses. The Company will reimburse the
Executive for reasonable bona fide business expenses
incurred on behalf of the Company in the ordinary
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course of business, provided, however, that the
expense is otherwise deductible by the Company as an
ordinary and necessary business expense for federal
income tax purposes.
(e) Other Benefits. The Executive shall generally be
entitled to participate in or receive health,
long-term disability insurance, and similar benefits
as the Company provides from time to time to its
executives. The Executive shall cooperate with the
issuance of a key man term life insurance policy for
the benefit of the Company, if so requested by the
Company.
(f) Withholding. All salary, bonus payments, stock
option exercises, benefit payments and other
payments due to Executive under this Agreement shall
be paid in a manner consistent with the standard
payroll practices of the Company.
(g) The Company may withhold from any payment any
required taxes or other governmental withholdings,
insurance or benefit payments and similar items.
5. Termination or Resignation.
(a) Termination. The Executive's employment hereunder
shall be, or may be, as the case may be, terminated
and shall constitute a "Termination" under the
following circumstances:
(i) Death. The Executive's employment hereunder
shall terminate upon his death.
(ii) Disability. The Executive's employment
hereunder shall terminate on the
Executive's physical or mental disability
or infirmity which, in the opinion of a
competent physician selected by the Board,
renders the Executive unable to perform his
duties under this Agreement for more than
thirty (30) days during any one hundred
twenty (120) day period.
(iii) With Cause. The Company may terminate the
Executive's employment hereunder for Cause.
"Cause" shall mean (a) Executive's material
breach of any of the terms of this
Agreement, (b) Executive's conviction of a
crime involving moral turpitude or
constituting a felony under the laws of any
state, the District of Columbia or of the
United States, (c) Executive's repeated
failure or refusal to follow the directives
of the Board or the CEO; or (d) Executive's
inappropriate business conduct that is
directly related to Executive's activities
on behalf of the Company that may cause
material harm to the business interests of
the Company.
(iv) By the Company for Any Other Reason. The
Company may terminate the Executive's
employment hereunder at any time for any
reason
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other than the Executive's Death or
Disability or for Cause.
(v) Resignation of Executive. The Executive may
voluntarily resign his position and
terminate his employment and Salary with
the Company at any time, with or without
cause, by delivery of a written notice of
resignation to the Company (the "Notice of
Resignation"). The Notice of Resignation
shall set forth the date such resignation
shall become effective (the "Date of
Resignation"), which date shall, in any
event, be at least thirty (30) days and no
more than sixty (60) days from the date the
Notice of Resignation is delivered to the
Company. At its option, the Company may
reduce such notice period to any length,
upon written notice to the Executive.
(b) Notice of Termination by Company. Any termination of
the Executive's employment by the Company shall be
communicated by written Notice of Termination to the
Executive. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice that shall
indicate the specific termination provision in this
Agreement relied upon and shall set forth, if
applicable, in reasonable detail the facts and
circumstances claimed to provide a basis for
termination of the Executive's employment under the
provision so indicated. "Date of Termination" shall
mean (i) if the Executive's employment is terminated
by his death, the date of his death, (ii) if the
Executive's employment is terminated by reason of
his disability, the date of the opinion of the
physician referred to in Section 5(a)(ii), above,
(iii) if the Executive's employment is terminated by
the Company for Cause pursuant to subsection
5(a)(iii) above or without Cause pursuant to
subsection 5(a)(iv) above, the date specified in the
Notice of Termination and (iv) if the Executive
voluntarily resigns pursuant to subsection 5(a)(v)
above, the date of the Notice of Resignation.
(c) Terminability of Employment. Notwithstanding the
Term of this Agreement and the annual salary to be
paid to the Executive during his employment with the
Company, nothing in this Agreement should be
construed as to confer any right of the Executive to
be employed by the Company for a fixed or definite
term. Subject to Section 6 hereof, the Executive
hereby agrees that the Company may dismiss him under
subsection 5(a) hereof. The Executive's employment
with the Company may be terminated by the Company at
any time by delivery of a Notice of Termination to
the Executive, for any reason, with or without
cause, without liability except with respect to the
payments provided for by Section 6.
(d) Termination Obligations. In exchange for the Company
entering into the Agreement and payment of the
Severance Payments provided for in Sections 6(b) and
6(e) herein, the Executive agrees that, at the time
of his resignation or termination from the Company:
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(i) The Executive will promptly return to the
Company all personal property, both
tangible and intangible, furnished to or
prepared by the Executive in the course of
or incident to his employment, the
Executive hereby acknowledging and agreeing
that such property belongs to the Company,
such that following termination the
Executive will not retain any written or
other tangible material containing any
proprietary information of the Company.
"Personal property" includes, without
limitation, all computers, cellular phones,
company credit cards, access keys, books,
manuals, records, reports, notes,
contracts, lists and other documents or
materials, or copies thereof (including
computer files), and all other proprietary
information relating to the business of the
Company.
(ii) The Executive will tender his resignation
from all offices and directorships then
held with the Company; Executive, however,
shall not be required to tender his
resignation from the Board of Directors of
the Company.
(iii) The Executive will execute a release
acceptable to the Company of all liability
of the Company, and its directors,
officers, shareholders, employees, agents
and attorneys, to the Executive in
connection with or arising out of his
employment with the Company, except with
respect to any Severance Payments under
Sections 6(b) or 6(d) which may be payable
to him under the terms of the Agreement.
(iv) The representations and warranties
contained herein and the Executive's
obligations under Sections 5(d), 7, 8, 9
and 15 through 18 shall survive termination
of the Employment Period and the expiration
of this Agreement.
6. Compensation Upon Termination. Upon the occurrence of any of
the events described Section 5(a)(i) through 5(a)(v) of this
Agreement, the Executive shall be entitled, unless otherwise
provided herein, to the following remuneration in respect of
such Termination (the "Severance Payments") for the period of
time specified therein (the "Severance Period"):
(a) Death. If the Executive's employment shall be
terminated pursuant to Section 5(a)(i), the Company
shall pay the Executive's personal representative
his Salary payable pursuant to Section 4(a) through
the Date of Termination. At the Executive's own
expense, the Executive's dependents shall also be
entitled to any continuation of health insurance
coverage rights under any applicable law.
(b) Disability. If the Executive's employment shall be
terminated by reason of disability pursuant to
Section 5(a)(ii), the Executive shall receive his
Salary payable pursuant to Section 4(a) up to the
Date of Termination and for 30 days thereafter;
provided that payments so made to the Executive
during the disability shall be
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reduced by the sum of the amounts, if any, payable
to the Executive at or prior to the time of any such
payment under any disability benefit plan of the
Company. At the Executive's own expense, the
Executive and his dependents shall also be entitled
to any continuation of health insurance coverage
rights under any applicable law.
(c) Cause. If the Executive's employment shall be
terminated for Cause pursuant to Section 5(a)(iii)
hereof, the Company shall pay the Executive his
Salary then payable pursuant to Section 4(a) through
the Date of Termination. At the Executive's own
expense, the Executive and his dependents shall also
be entitled to any continuation of health insurance
coverage rights under any applicable law.
(d) Voluntary Resignation. If the Executive terminates
his employment with the Company pursuant to Section
5(a)(v) hereof, the Company shall have no obligation
to compensate the Executive following the Date of
Resignation, except for the payment of accrued and
unpaid salary pursuant to Section 4(a) through the
Date of Resignation. In any event, at the
Executive's own expense, the Executive and his
dependents shall be entitled to any continuation of
health insurance coverage rights under any
applicable law.
(e) Termination Without Cause by Company. If the Company
terminates Executive's employment with the Company
pursuant to Section 5(a)(iv), the Company shall
continue to pay to Executive all Salary payable
pursuant to Section 4(a), as Severance Payments
through a period ending twelve (12) months following
the Date of Termination, unless employee receives
gainful employment. In addition for the period that
the Severance Payments are being paid to the
Executive, the Executive and the Executive's family
shall be entitled to receive welfare plan benefits
(other than continued group long-term disability
coverage) generally available to executives of the
Company with comparable responsibilities or
positions at the same cost to the Executive as is
charged to such similar executives from time to time
for comparable coverage. The Company shall have no
other obligation to compensate the Executive
following the Date of Termination except as provided
herein.
(f) Any Severance Payments made pursuant to this Section
6 shall be payable in accordance with the Company's
regular payroll practices. The obligation of the
Company to make the Severance Payments to the
Executive is expressly conditioned upon the
Executive complying and continuing to comply with
his obligations and covenants under Sections 5(d), 7
and 8 of this Agreement following termination of his
employment with the Company.
7. Confidentiality and Non-Solicitation Covenants.
(a) Confidentiality. In addition to the agreements set
forth in Section 5(e), the Executive hereby agrees
that the Executive will not, during the Employment
Period or at any time thereafter directly or
indirectly disclose or make available to any person,
firm, corporation, association or other entity for
any reason or purpose whatsoever, any Confidential
Information (as defined below). The Executive agrees
that, upon Termination of his employment with the
Company,
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all Confidential Information in his possession that
is in written or other tangible form (together with
all copies or duplicates thereof, including computer
files) shall be returned to the Company and shall
not be retained by the Executive or furnished to any
third party, in any form except as provided herein;
provided, however, that the Executive shall not be
obligated to treat as confidential, or return to the
Company copies of any Confidential Information that
(i) was publicly known at the time of disclosure to
the Executive, (ii) becomes publicly known or
available thereafter, but prior to the Date of
Termination, other than by any means in violation of
this Agreement or any other duty owed to the Company
by any person or entity or (iii) is lawfully
disclosed to the Executive by a third party. As used
in this Agreement the term "Confidential
Information" means: information disclosed to the
Executive or known by the Executive as a consequence
of or through his relationship with the Company,
about the directors, officers, shareholders,
customers, employees, investors, business methods,
public relations methods, organization, procedures
or finances, including, without limitation,
information of or relating to shareholder, customer
or investor lists of the Company and any affiliate.
(b) Non-Solicitation. In addition, the Executive hereby
agrees that during the Employment Period, and for a
period of one (1) year thereafter, regardless of the
reason or circumstances of Termination of employment
with the Company, the Executive will not, either on
his own account or jointly with or as a manager,
agent, officer, employee, consultant, partner, joint
venturer, owner or shareholder or otherwise on
behalf of any other person, firm or corporation, (i)
carry on or be engaged or interested directly or
indirectly in, or solicit, the sale or provision of
services or the development or marketing of services
as offered by the Company to its customers at the
Date of Termination, (ii) endeavor directly or
indirectly to canvas or solicit in competition with
Company or to interfere with the supply of orders
for goods or services from or by any person, firm or
corporation which during the Employment Period has
been or is a supplier of goods or services to
Company or become an investor in the Company or
(iii) directly or indirectly solicit or attempt to
solicit away from Company any of its officers or
employees or offer employment to any person who, at
any time during the six (6) months immediately
preceding the Date of Termination, is or was an
officer or employee of Company.
8. Covenant Not to Compete. The Executive agrees that during the
Employment Period he will devote full-time to the business of
the Company and not engage in any type of business which
engages in the medical internet, online pharmacy and
information services or any other related businesses,
including but not limited to all aspects of the Business.
Subject to such full-time requirement and the restrictions
set forth below in this Section 8 and Section 3(c) above, the
Executive shall be permitted to continue his existing
business investments and activities and may pursue additional
business investments; provided that the Executive may not
serve as a director or officer of any public company
resulting from such business investments if such public
company is in competition with the Company. The Executive
agrees that, from the end of the Employment Period through a
one (1) year period thereafter, he shall not, within the
Protected Territory (as defined hereinafter), (i) invest in,
manage, consult or participate in any way in any other
business in competition with the Business (in either an
active or passive manner), (ii) participate in or advise any
business which has business activities similar to the
Business are a relevant business
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segment, or (iii) act for or on behalf of any business that
intends to enter or participate in any business which has any
business activities similar to the Business, in each case
unless the independent members of the Company's Board
determines that such action is in the best interests of the
Company. Notwithstanding the foregoing, the Executive may
purchase stock as a stockholder in any publicly traded
company, including any company which is involved in the
development or operation of a medical internet site in the
Protected Territory; provided that the Executive does not own
(together or separately or through his affiliates) more than
five percent (5%) of any company (other than the Company)
engaged in a business which is competitive with the Business
of the Company within the Protected Territory. In addition,
the Executive shall not invest (directly or indirectly) in
any competitive business operating within the Protected
Territory unless the independent members of the Company's
Board determines that such an investment is in the best
interests of the Company. For purposes of this Agreement, the
"Protected Territory" shall mean that area within a one
hundred (100) mile radius of the principal offices of the
Company at the Date of Termination.
9. Injunctive Relief and Enforcement. In the event of breach by
either party of the terms of Sections 5, 6, 7 or 8, if the
non-breaching party believes it is suffering irreparable
injury, then the non-breaching party shall be entitled to
institute legal proceedings to enforce the specific
performance of this Agreement by the breaching party and to
enjoin the breaching party from any further violation of the
Agreement and to exercise such remedies cumulatively or in
conjunction with all other rights and remedies provided by
law and not otherwise limited by this Agreement. The parties
acknowledge, however, that the remedies at law for any breach
of the provisions of Sections 5, 6, 7 or 8 may be inadequate.
In addition, in the event the covenants set forth in Sections
5(e), 7 or 8 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of extending for
too great a period of time or over too great a geographical
area, by reason of being too restrictive or expansive, or by
constituting an unlawful restraint of trade in any other
respect, each such covenant shall be interpreted to extend
over the maximum period of time and over a maximum
geographical area for which it may be enforceable, and to the
maximum extent in all other respects as to which it may be
enforceable, and enforced as so interpreted, all as
determined by such court in such action.
10. Notice. For the purposes of this Agreement, notices, demands
and all other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly
given when personally delivered when transmitted by telecopy
with written confirmation of transmission and receipt, three
(3) days after deposit in the U.S. mail, first class, with
adequate postage thereon, or one (1) day after delivery to an
overnight air courier guaranteeing next day delivery,
addressed as follows:
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If to the Executive: Xxxxxx X. Xxxxxx
0000 Xxxxxxxxx Xxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
If to the Company: BioShield Technologies, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: CEO
With a copy to: BioShield Technologies, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
or to such other address as any party may have furnished to
the others in writing in accordance herewith, except that
notices of change of address shall be effective only upon
receipt as provided above.
10. Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect
the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect;
provided, however, that if any one or more of the terms
contained in Sections 5(e), 7 or 8 hereto shall for any
reason be held by any court of competent jurisdiction to be
unenforceable by reason of extending for too great a period
of time or over too great a geographical area, by reason of
being too restrictive or expansive, or by constituting an
unlawful restraint of trade in any other respect, then such
covenant shall not be deleted but shall be reformed and
constructed in a manner to enable it to be enforced to the
extent compatible with applicable law.
11. Assignment. This Agreement may not be assigned by the
Executive, but may be assigned by the Company to any
successor to its business and will inure to the benefit and
be binding upon any such successor.
12. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original
but all of which together will constitute one and the same
instrument.
13. Headings. The headings contained herein are for reference
purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
15. Choice of Law. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with
the laws of the State of Georgia (without reference to the
choice of law provisions of Georgia), except with respect to
matters of law concerning the internal corporate affairs of
any corporate entity which is a party to or the subject of
this
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Agreement, and as to those matters the law of the
jurisdiction under which the respective entity derives its
powers shall govern.
16. Dispute Resolution. Absent any irreparable injury being
suffered by the Company entitling the Company to seek
injunctive relief against the Executive pursuant to Section 9
hereof, in the event there shall be a dispute among the
parties arising out of or relating to this Agreement, or the
breach thereof, the parties agree to the following
procedures:
(a) Within thirty days after notice from a party of any
dispute, the parties shall meet and attempt to
resolve such dispute informally with or without a
mediator as the parties mutually agree;
(b) If the parties are unable to resolve the dispute
informally, then either party may institute a
lawsuit in the federal or state courts in Gwinnett
County, Georgia. The parties agree that the federal
and state courts of Gwinnett County, Georgia shall
have sole jurisdiction over such disputes and each
parties expressly consents to the personal
jurisdiction of such courts and expressly waives all
defenses of lack of personal jurisdiction and
inconvenient forum.
17. Entire Agreement. This Agreement contains the entire
agreement and understanding between the Company and the
Executive with respect to the employment of the Executive by
the Company as contemplated hereby, and no representations,
promises, agreements or understandings, written or oral, not
herein contained shall be of any force or effect. This
Agreement shall not be changed unless in writing and signed
by both the Executive and the Board of the Company.
18. Board Approval. In any case in which this Agreement provides
for the approval, review or determination of the Board in
connection with the Executive's compensation, benefits,
termination or compliance with restrictive covenants herein
expressed, then such approval, review or determination shall
be deemed a "Director's conflicting interest transaction",
subject to the procedures required by O.C.G.A. ss. 14-2-860
et seq.
19. The Executive's Acknowledgment. The Executive acknowledges he
has had the opportunity to consult with independent counsel
of his own choice concerning this Agreement, and he has read
and understands the Agreement, is fully aware of its legal
effect, and has entered into it freely based on his own
judgment.
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IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the date and year first above written.
BIOSHIELD TECHNOLOGIES, INC.
By:
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Xxxxxxx X. Xxxxx
Title: Chairman and CEO Date:
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EXECUTIVE
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Xxxxxx X. Xxxxxx Date:
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