AMENDED EMPLOYMENT AGREEMENT
BETWEEN
CENTREX, INC.
AND
XXXX X. XXXXXXX
This Employment Agreement ("Agreement") is made and executed this 25th
day of March, 2003 and is effective upon satisfaction of the pre-conditions set
forth below (the "Effective Date"), by and between Centrex, Inc. ("Centrex" or
the "Company"), a Oklahoma Corporation having its principal place of business at
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx, XX 00000 and Xxxx X. Xxxxxxx ("Executive") who
currently resides at 000 Xxxxxxxxxxx Xxxx, Xxxxxx, Xxxxxxx 00000.
WHEREAS, Centrex desires to recruit Executive as its new President and
Chief Executive Officer and Executive desires to be part of the challenge
offered by the Company and its technology platform.
WHEREAS, the Centrex Board has authorized the execution of this
Agreement.
WHEREAS, It is the intention of the parties that this Amended
Employment Agreement replace and supersede the Employment Agreement dated
January 21, 2003.
NOW, THEREFORE, in consideration of the mutual covenants and promises
made in this Agreement, the parties do hereby agree as follows:
1. Employment, Responsibilities and Term:
(a) Position Responsibilities:
Centrex agrees to and does hereby engage and employ Executive initially
as a consultant to the current CEO and upon completion of certain
pre-requisites (as defined in Section 3. (c)) then the
Company's new President and Chief Executive Officer of Centrex
Corporation for the term and upon the terms and conditions set forth
herein, and Executive accepts such offer of employment. Executive will
have full charge chief executive responsibilities that include
business strategy development, research, product development,
clinical, regulatory, manufacturing, finance, capital formation,
business development & licensing, human resources, investor relations,
sales, marketing, administration, and presenting information to the
Board of Directors.
(b) Term:
The Term of the agreement will be three years commencing on the
effective date of this Employment Agreement.
(c) Board of Directors:
It is also understood and agreed that Executive will serve as a
Director of the Company, without additional compensation, for the
appointed term. During the term of this Agreement, the Board of
Directors will take such actions as may be required to appoint
Executive for election as a director by the shareholders. Executive may
serve on the Board of Directors of companies not affiliated with
Centrex, and receive compensation in connection therewith, if such
Board position is approved by the Board of Directors of Centrex. It is
also recognized and agreed to that Executive is a Director of
Angiogene, Inc. a medical device company in Montreal and will continue
to serve on such Board and will be allowed to travel and participate in
Board meetings during the year while employed by Company. Xx. Xxxxxxx
also has some trailing responsibilities with DNA Print Genomics that he
will be involved with occasionally through May 2003. The activities
with these companies will not interfere with Xx. Xxxxxxx'x ability to
perform for Centrex and may even enhance and support his Centrex
efforts.
(d) Commitment:
Executive agrees to discharge his duties hereunder in accordance with
the direction of the Board of Directors of Centrex and to follow
diligently and implement faithfully all management policies and
decisions communicated to him by the Board of Directors. During the
employment of Executive by Centrex, Executive shall devote his full
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and undivided time, attention, energies and loyalty to the Company's
business but the foregoing shall not be construed to prevent Executive
from making investments in other businesses or enterprises or engaging
in any other business activity that does not interfere with
Executive's duties under this Agreement, or conflict with his
obligations under Paragraph 10 hereof or otherwise represent a
conflict of interest with his duties to Centrex.
(e) Changes in Board and Officers:
Concurrent with the execution of this agreement and also the closing of
the next $2 million (net after fees and expenses) in financings the
Executive will officially join the Company and will be elected
President and CEO of Centrex and also Chairman of the Board by the
current Centrex Board. The official start date is the date at which
time the Executive assumes legal responsibilities for running the
Company. Until the start date the Executive will continue to serve as a
consultant to the current CEO and Board. It is also understood that the
current Officers and Directors of Centrex will resign when Executive
officially joins the Company with the execution of this agreement.
Executive will be the sole Officer and Director and will be responsible
for nominating a new Board of Directors and hiring a new management
team.
2. Term and Renewal. The term of Executive's employment hereunder will be
for a period commencing on the Effective Date and continuing for a
period of three (3) years (the "Expiration Date"), unless Executive's
employment is terminated by either party pursuant to paragraph 6 of
this Agreement. The agreement will automatically be renewed for another
year if neither party provides the other with written notice of
termination twelve (12) months in advance.
3. Compensation Package and Relocation Reimbursement:
(a) Starting Annual Salary:
For services provided hereunder, Executive will be paid an annual base
salary of Two Hundred Fifty Thousand Dollars ($250,000). Executive will
initially operate the Company from his Florida location. Executive will
be eligible for a salary review once each year on the anniversary of
his employment agreement. It is understood that
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Executive is not entitled to any raise in salary but he is entitled to
an annual performance review and an annual review of his compensation
package. Any salary increases during the term will be at the sole
discretion of the Board but in no event will the base salary be less
than the initial amount during the Term.
(b) Initial Start Up Period:
Executive will begin full time employment with the Company on or around
January 1, 2004. From Today's Date to January 1 Executive will provide
consulting services as a non-employee to the Company at a 40%
commitment and will be paid in cash at a rate consistent with his
starting base salary plus all benefits and taxes. Accordingly,
Executive will be paid $12,500 for April 2003. (40% of base salary +
fringe benefits + employer payroll taxes + 40% of car allowance =
approximately $12,500).
Pre-conditions:
The Company agrees to several employment pre-conditions as follows:
-The outstanding payment obligations to the University of
California for the Los Alamos project for the months of
December through Executive's start date will be paid in full
when due.
-In addition to the above the Company will raise a net minimum
of $2,000,000 (net of fees and expenses) cash to operate the
Company going forward until the next fundraising effort. The
Fifty Thousand Dollars the Executive invested for Preferred
Convertible Stock shall not count towards this $2,000,000.
-The ceiling on authorized common shares will be raised above
the 45 million level to 250 million.
-A non-cash support agreement for the balance of 2003 with
Xxx Xxxxxxxx and the Centrex Tulsa staff will be executed.
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-Completion, attachment and certification of financial schedules
as described in Section 23.
-Change of Control Agreement
(d) Cash Bonus:
It is understood and contemplated that, in addition to the foregoing
annual base salary; Executive will be eligible to receive cash bonuses
in each calendar year during the term of this Agreement in such
amounts, if any, as shall be determined from time to time by a majority
of independent Directors of the Company in their sole discretion. If
this Agreement expires on the Expiration Date, then the obligation of
the Company to pay a bonus to Executive on for the last year of
service, if a bonus is approved, shall survive such expiration, and the
Company shall pay such bonus to Executive as if this Agreement remained
in full force and effect. The range of annual bonus payment may be from
no bonus at all to 100% of Executive's then Base Salary for that year.
However, the bonus, if approved by a majority of the independent
Directors, for the first year will not be less than $50,000.
(d) Headquarters Relocation Salary Adjustment:
It is contemplated that the Board of Directors will request that
Executive relocate to a geographical location more suitable to building
and financing the Company. At the Board's request Executive will
promptly relocate to such location. It is agreed that in the event the
Company is moved to Atlanta such salary adjustment will be $15,000
($265,000 per year) annually and if in the Northeast such salary
adjustment will be $25,000 ($275,000 per year). If such a relocation
takes place Executive's base salary will be increased for the
appropriate relocation allowance on the day Executive begins to conduct
the business from the new location. If the Board chooses a location
other than Atlanta or the Northeast the parties will agree on a
reasonable base salary adjustment for the relocation.
(e) Reimbursement of Household Relocation Costs:
The Company will provide Executive with a $45,000 relocation allowance
and the Company will provide a full federal, state and local income tax
gross up on such relocation allowance so that the after tax
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cost to the Executive is less than $1,000. This allowance is intended
to cover the move of household goods, real estate commissions,
mortgage points and closing costs on both homes. The Company will pay
half the relocation allowance on either the execution of a purchase
agreement for a home in the new area or the sale of his current
Florida home and the latter half upon the Executive's relocation to
the new area.
(f) House Hunting and Temporary Living costs:
In addition, the Company will reimburse Executive and his spouse for up
to three house hunting visits and, if necessary, provide temporary
living for up to six months.
(g) Given the tax complexities as a result of a relocation during 2003
the Company agrees to reimburse Executive for the professional services
associated with filing his personal federal and state income taxes in
2004 for the 2003 tax year.
4. Fringe Benefits:
Executive, during the period of his employment hereunder, will receive
fringe benefits such as medical, dental, prescription drug and
hospitalization insurance, vacation leave, short term sick leave and
long term disability as well as participation in any retirement plan as
may exist from time to time for all other executive officers of the
Company; provided, however, that, during the term of this Agreement.
The Company shall maintain at its expense a long-term disability policy
for the benefit of Executive, which will provide coverage equal to
Executive's Base Salary. Company will provide Executive an automobile
and assume the cost of such car lease for business and his personal use
including insurance and car maintenance while under contract with the
Company. The purchase price level, before taxes, of the automobile to
be leased will not exceed $40,000 and if it does exceed that amount
Executive will contribute the incremental portion of the lease payment.
In addition, the Company will provide reimbursement for certain
communication devices such as cell phone, computer, PDA/Blackberry and
related internet and other services that support such communication
devices. Executive shall be entitled to four weeks of vacation leave,
annually, which shall be paid at his then Base Salary, and shall accrue
such
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vacation time and be used in accordance with the policies and
procedures of the Company.
5. Reimbursement of Business Expenses:
The Company will promptly reimburse Executive for all business expenses
incurred by him in connection with the business of the Company in
accordance with regular Company policy regarding the nature and amount
of expenses and the maintenance and submission of receipts and records
necessary for the Company to document them as proper business expenses.
6. Termination of Employment and This Agreement.
(a) Termination for Cause or Voluntary Termination:
If Executive's employment is terminated by the Company for cause (as
hereinafter defined) or if Executive voluntarily leaves the employment
of the Company prior to the Expiration Date, the Company will pay
Executive the equivalent of three (3) months' salary at the Base
Salary, and three (3) months continuation of fringe benefits then being
received by Executive. For purposes of this Agreement, termination "for
cause" means termination of Executive's employment by action of a
majority of outside Directors of Centrex because of:
(1) material breach of contract,
(2) failure or inability to carry out legal directives of
the Board of Directors,
(3) conviction of Executive for a felony, even if such
conviction is subject to appeal,
(4) uncontroverted evidence of falsification of records
or statements of the Company,
(5) uncontroverted evidence of intentional misuse of
Company funds or property, or
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(6) other substantial misconduct which, in the reasonable
judgment of the Board, results in material adverse
effect, discredit or disrepute to the Company.
A termination of employment for any cause listed in clauses
(1), (2) or (6) above shall be effective only if Executive has first
been given written notice by the Board of Directors of the alleged
breach, failure to perform or misconduct and such breach, failure to
perform or misconduct continues for fifteen days following the date of
such notice.
(b) Termination for No Cause:
If this Agreement expires on the Expiration Date, or if the sooner
termination of Executive's employment and this Agreement is not for
cause, not because of Executive's death or disability and not because
of his voluntary termination of employment, then the Company will make
a lump sum cash payment to Executive equal to one year of the
Executive's then annual Base Salary, plus an average cash bonus for the
last three years but not less than $50,000 and will provide twelve (12)
months continuation of fringe benefits available to Executive and his
dependents covered for such benefits at the time of Executive's
Termination for No Cause. If it is not possible to cover Executive and
his family with fringe benefits then the Company will make a lump sum
payment to Executive for the value of such benefits. All the above lump
sum payments will be paid immediately upon formal Termination for No
Cause by the Board.
(c) Termination Due to Death:
The Company will secure a term life insurance policy for the benefit of
the Executive's estate in the amount of $1 million. Such insurance
policy will promptly be put in place and will be maintained by Company
during the full Term of this agreement including all extensions.
(d) Termination Due to Disability:
The Company agrees to carry and pay for an individual long term
disability policy on Executive of his choosing that covers his Base
Salary plus bonus. The Company will continue to pay Executive his
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current salary and continue to accrue his bonus until the disability
policy begins to pay Executive.
It is understood that a permanently disabled status subject to long
term disability shall mean such sickness, as well as physical or mental
disability, that qualifies or, with the passage of time (not to exceed
90 calendar days), will qualify Executive to receive benefit payments
under at least one of the long-term disability policies maintained by
the Company for Executive in accordance with Paragraph 4. In the event
of a dispute as to Executive's ability to perform his duties, the
Company may refer Executive to a licensed practicing physician of
Centrex's choice and reasonably satisfactory to Executive, and
Executive agrees to submit to such tests and examinations as such
physician shall deem appropriate. The determination by the physician as
to whether or not Executive is unable to perform substantially his
normal duties shall conclusively determine such facts for the purposes
of this Paragraph 7(c). Short term illness or injury not amounting to
long term disability shall be treated in accordance with any benefit
provided under Paragraph 4 of this Agreement.
7. Centrex Repurchase Rights. If the Company fails to meet the
pre-condition of raising the $2,000,000, the Company shall have the
right to repurchase 50% of the preferred convertible stock (or Common
Stock if the preferred is converted) for the purchase price paid. The
right to repurchase shall last from January 1, 2004 until January 11,
2004. The Preferred Convertible Shares are those granted in the
Subscription Agreement dated March 24, 2003 between the Executive and
the Company.
8. No Restrictions on Executive's Employment by Centrex. Executive
represents as a condition of this Agreement that he is not under any
existing employment agreement, non-competition agreement or other
legally binding agreement which would prohibit or in any manner
restrict his employment hereunder with Centrex.
9. Employee Confidentiality and Invention Assignment Agreement. Executive
and the Company agree that the Employee shall keep all proprietary
information confidential during employment and for two years after
employee leaves his employment are parties to a
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confidentiality and invention assignment letter agreement dated
______________, which shall be deemed to be incorporated into this
Agreement as if fully set forth in this Paragraph 9.
10. Change of Control:
Executive and the Company are parties to a Change of Control agreement
dated January 21, 2003 ______________, which shall be deemed to be
incorporated into this Agreement as if fully set forth in this
Paragraph 10.
11. Restrictions on Competition.
(a) During Employment. In order to protect Centrex's investment, which
includes but is not limited to, time, money, options and proprietary
information, and in recognition of the unique character of the Trade
Secrets and other Confidential Information which are the basis of
Centrex's business and future business opportunities, in recognition of
the worldwide geographic scope of Centrex's business and/or potential
business opportunities and Executive's contemplated role,
responsibilities and knowledge therefor, for the entire period of
Executive's employment by Centrex, Executive agrees that he will not
work as a consultant for or directly or indirectly perform services
anywhere in the world for himself or any other person, firm or
corporation in competition with Centrex. A business in competition with
Centrex includes any business activity being actively investigated or
contemplated by Centrex during the period of Executive's employment by
Centrex. Without limitation on the foregoing, but by way of example,
businesses currently contemplated by Centrex as being in competition
with it include, but are not limited to, businesses engaged in or
considering engaging in manufacture, marketing or development of lazer
based Bioterrorism detection systems designed to detect airborne, water
based and blood based pathogens as covered by Company patents.
(b) For one two (1) (2) syear after termination of employment. In order
to protect Centrex's investment, which includes but is not limited to,
time, money and proprietary information and in recognition of the
unique character of the Trade Secrets and other Confidential
Information which are the basis of Centrex's business and future
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business opportunities, in recognition of the worldwide geographic
scope of Centrex's business and/or potential business opportunities and
Executive's contemplated role, responsibilities and knowledge therefor,
for a period of two (2) years following the termination of Executive's
employment with Centrex, regardless of the reason therefor, Executive
agrees that he will not work as a consultant for or directly or
indirectly perform services anywhere in the world for himself or any
other person, firm or corporation in any capacity involving the study,
development, use, manufacture or marketing of products covered by
Centrex patents.
The foregoing shall not preclude (1) the employment of
Executive, whether as a director, officer, employee, consultant or
otherwise, by a research partner, joint venture partner, licensee or
other person, or corporation or entity that at such time is authorized
by Centrex to have rights in or to restricted products, or (2) the
ownership by Executive of investment securities representing not more
than three (3) per cent of the outstanding voting securities of company
engaged in a pharmaceutical business, whose stock and/or securities are
traded on a national stock exchange or national quotations system,
provided that such investment is passive and not with the intention of
controlling such business.
(c) Executive agrees and acknowledges that the restrictions on
competition contained herein including their geographic and product
scope are necessary and reasonable to protect the interests of Centrex
and that the Company's Trade Secrets and other Confidential Information
of which he will become acquainted, if used anywhere in the world
during the period in which he has agreed not to use them or to disclose
them would cause Centrex serious and irreparable damage and harm.
Executive represents and admits that upon the termination of his
employment with Centrex, his experience and capabilities are such that
he can obtain employment engaged in other lines of endeavor and that
the enforcement of this Agreement would not prevent him from earning a
livelihood.
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12. Acknowledgments.
(a) It is understood and contemplated by the parties that if
the obligations undertaken herein in Paragraphs 9 and 10 were breached
in any way, irreparable harm to the Company should be presumed. Damages
might be difficult if not impossible to ascertain, and the faithful
observance of the terms of this Agreement during and after termination
of Executive's employment is an essential condition to his employment
with the Company. In light of these considerations, Executive agrees
that a court of competent jurisdiction may immediately enjoin any
breach or threatened breach of Paragraphs 9 and 10 to this Agreement,
without waiver of any other rights and remedies which the Company may
have at law.
(b) The obligations undertaken in Paragraphs 9 and 10 of this
Agreement survive the termination of Executive's employment hereunder
for the period specified in each such Paragraph and the termination of
this Agreement, regardless of the reason therefor.
The obligations of Centrex to Executive following his
termination of employment as set forth in Paragraphs 3(b), and 6 shall
survive the termination of this Agreement until satisfied in accordance
with the terms thereof.
(c) The rights of Executive under this Agreement are in
addition to any other rights or remedies he may have in law or in
equity in the event Centrex breaches this Agreement, all of which
rights and remedies are preserved in full. Without limiting the
foregoing, the rights of Executive under Paragraph 6 herein do not
limit any right he would have upon termination of employment caused by
a breach of Centrex. However, any damages he may sustain shall be
reduced by the payments required to be made under this Agreement.
13. Construction of Agreement.
(a) It is the intention of the parties to this Agreement that
any construction of this Agreement or Paragraph thereof shall be in
favor of its legality and enforceability and that any construction
causing
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illegality or unenforceability should yield to a construction favoring
legality and enforceability. Further, the parties agree that should
any portion of this Agreement be judicially held invalid,
unenforceable or void, such holding shall not have the effect of
invalidating or voiding any remaining portion of this Agreement not so
declared and that any portion held to be invalid, unenforceable or
void shall, if possible, be deemed amended or reduced in scope,
otherwise to be stricken from this Agreement, but only to the extent
required for purposes of maintaining the legality, validity and
enforceability of this Agreement and all portions thereof in the
jurisdiction so holding.
(b) It is understood that use of the word "and" herein
included the disjunctive as well as its injunctive meaning whenever
such meaning would broaden the protection to the Company in the context
in which it is used.
14. No Waiver. No waiver of any breach of this Agreement may be construed
or deemed as a waiver of any succeeding breach of this Agreement.
15. Personal Services. It is understood and contemplated that this
Agreement provides for personal services of Executive to the Company.
16. No Interference. For two (2) years following the termination of
Executive's employment hereunder, regardless of the reason therefor,
Executive will not intentionally disrupt or attempt to disrupt the
Company's business relationship with its customers or suppliers, nor
solicit any of the Company's employees to terminate their employment
with Centrex.
17. Certification by Employee. Executive certifies that he has received a
copy of this Agreement for review and study before being asked to
execute it, that he has read this Agreement carefully, that he has had
a sufficient opportunity before executing this Agreement to ask
questions about it and to receive answers to any such questions and
that he understands the obligations and rights provided hereunder.
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18. Entire Agreement. This Agreement hereto supersedes any and all other
agreements, both oral and in writing, between the parties hereto with
respect to the employment and terms and conditions thereof of Executive
by Centrex, and it contains all of the parties' representations,
covenants and agreements with respect to such matters. The terms of
this Agreement may not be changed orally but only by a subsequent
writing signed by the party against whom enforcement of such
modification is sought.
19. Captions. Paragraph captions used herein are for convenience of
reference only and shall not change the meaning of the terms of this
Agreement.
20. Successors and Assigns. The terms of this Agreement shall inure to the
benefit of any successors and assigns of the Company.
21. Governing Law and Venue. This Agreement shall be construed and governed
in accordance with the laws of the State of Oklahoma. The parties agree
venue shall be proper solely in the state and federal courts in
Oklahoma.
22. Corporate Authority. The Company represents and warrants that this
Agreement (1) constitutes a legal, valid and binding obligation of the
Company enforceable in accordance with its terms, and (2) does not
conflict with or result in a violation of the Company's Certificate of
Incorporation, By-laws, or any contract, agreement or instrument to
which the Company is a party or is otherwise bound.
23. Debt Conversion/Capitalization Table/Budget Certification:
A number of financial schedules have been prepared to fully disclose
the Company's finances and to enable the parties to calculate
Executive's incentive stock grant. As of the date Executive begins full
time employment with the Company, the CFO has prepared and certified
the attached monthly "bare bones" budget of expenses for 2003 (schedule
A), a monthly cash flow forecast by month for the balance of 2003
(schedule B), a detailed schedule of all payables and accruals
(schedule C) outstanding, a pre-Executive conversion of preferred
shares Capitalization Table showing all major individual shareholders
and derivative holders along with the allowance made to
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raise additional cash and provide for Executives conversion of
Preferred Convertible Shares (schedule D).
24. Advice of Counsel:
The parties to this Agreement have the opportunity to seek advice of
counsel prior to executing this Agreement.
25. Jointly Prepared:
As this document is the result of extensive negotiation by the parties,
it shall be deemed to be jointly written and prepared by the parties.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal on the date hereof, to be effective as of the Effective Date.
XXXX X. XXXXXXX:
/s/ Xxxx X. Xxxxxxx
----------------------------
(an individual)
CENTREX, INC.:
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
-------------------------------
Xxxxxx X. Xxxxxxxx, Xx., M.D.
President and CEO
Attest:
CENTREX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
-------------------------------
Corporate Secretary
(CORPORATE SEAL)
