Exhibit 10.11
-------------
EMPLOYMENT AGREEMENT
--------------------
This EMPLOYMENT AGREEMENT is made and entered into as of this
9th day of February, 2004, by and between OMNICORDER TECHNOLOGIES, INC., a
Delaware corporation with its principal place of business at ▇▇-▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Company") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an
individual residing at ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive as Senior
Vice President of Operations & Planning and wishes Lu acquire and be assured of
Executive's continued services on the terms and conditions hereinafter set
forth;
WHEREAS, the Executive desires to he employed by the Company as
Senior Vice President of Operations & Planning and to perform and to serve the
Company on the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual terms, covenants,
agreements and conditions hereinafter set forth, the Company and the Executive
hereby agree as follows:
1. Employment. The Company hereby employs the Executive to serve as
a full-time executive of the Company, and the Executive hereby accepts such
employment with the Company, for the terms set forth in Section 2 hereof. The
Executive's principal place of employment shall be at the Company's offices in
East Setauket, New York, or at such other location as shall be mutually
acceptable to the Executive and the Company (it being understood that an office
in Nassau County or Suffolk County shall he acceptable to the Executive). The
Executive hereby accepts such employment and agrees to undertake the duties and
responsibilities inherent in such position.
2. Term. Unless earlier terminated as provided in this Agreement,
the term of the Executive's employment under this Agreement shall be for a
period beginning on February 9, 2004 (the "Engagement Date"), and ending one
year thereafter (such period or, if the Executive's employment hereunder is
earlier terminated, such shorter period, being hereinafter called the
`Employment Term"). The Employment Term may be extended for additional periods
by mutual agreement of the parties in writing.
3. Duties; Authority; Director.
----------------------------
(a) Duties. During (he Employment Term, the Executive shall be
employed as Senior Vice President of Operations & Planning, of the Company,
shall faithfully and competently perform such duties at such times and places
and in such manner as the President and CEO may from time to time reasonably
direct. Except as otherwise may be approved in advance by the President and CEO,
and except during vacation periods and reasonable periods of absence due to
sickness, personal injury, family leave as permitted by law, or other
disability, the Executive shall devote Executive's full-time and attention
throughout the Employment Term to
the services required of Executive hereunder. The Executive shall render
Executive's services exclusively to the Company during the Employment Term and
shall use Executive's best efforts, judgment and energy to improve and advance
the business and interests of the Company in a manner consistent with the duties
at' Executive's position.
(b) Authority. The Executive shall have all the usual and
necessary authority, duties and responsibilities of a Senior Vice President, in
the operation of the Company's business, subject to the supervision and
authority of the President & CEO.
4. Salary and Other Compensation.
------------------------------
(a) Salary. In consideration for the services of the Executive
rendered to the Company hereunder, the Company shall pay the Executive a salary
at an annual rate of $140,000 during the Employment Term (the "Base Salary"),
payable in accordance with the Company's customary payroll practices, which in
no event shall be less frequently than on a monthly basis, subject to an annual
upward adjustment as the President & CEO, the Board or the compensation
committee thereof may deem appropriate, but which in no event shall he less than
a five percent (5%) cumulative annual increase at each anniversary date of the
Engagement Date. The Executive shall also be eligible for annual bonuses, as the
Board or the compensation committee thereof may deem appropriate. Upon
termination of this Agreement, except if the Company terminates this Agreement
without Cause (as defined in Section 6), and except if the Executive terminates
his employment far Good Reason (as defined in Section 7), payments made pursuant
to this Section 4(a) shall cease; provided, however, that the Executive shall in
all cases he entitled to payments for periods or partial periods that occurred
prior to the date of termination and for which the Executive has not yet been
paid. Any vacation time not used by Executive during any year of the Employment
Term shall be carried over to succeeding years; provided, however, Executive
will not take in excess of four continuous weeks of vacation utilizing such
carried over vacation time. Payment shall be made to Executive for any unused
vacation time upon the end of the Employment Term.
(b) Withholding, Etc. The payment of any amounts hereunder
shall be subject to income tax, social security and other applicable
withholdings.
(c) Stock Options. As additional consideration under this
Agreement, the Company has granted to the Executive as of the Engagement Date
incentive stock options ("Stock Options") to purchase up to 120,000 shares of
common stock at an exercise price equal to $4.40 per share, representing the
fair market value of OmniCorder's common stock on the date of this agreement.
The Stock Options shall be exercisable in a four year vesting period at 25% per
year, and shall be exercisable over a five-year period from the date of grant.
The Company undertakes to use its best efforts to register the shares of
OmniCorder's common stock into which the Stock Options are exercisable by the
filing of a registration statement on Form S-8 or such other method as is most
appropriate in the circumstances, to enable the Executive to sell such shares,
subject to applicable securities laws.
5. Benefits. During the Employment Term, the Executive shall he
entitled to:
2
(a) Participate in all executive fringe benefits, pension,
savings, life insurance, disability, stock option, profit sharing, medical,
health or other welfare benefit plans that may be provided by the Company for
its key executives in accordance with the provisions of any such plans, as the
same may be in effect on and after the Engagement ▇▇▇▇;
(b) 20 annual paid vacation days in each year of employment;
such vacation to be taken at a time mutually convenient to Company and the
Executive;
(c) 5 days paid suck leave and/or personal days in each year
of employment;
(d) 10 days of paid holidays during each calendar year;
(e) Reimbursement for executive education programs; and
(f) Reimbursement for all reasonable and necessary out-of-
pocket business expenses, properly receipted or otherwise documented, incurred
by the Executive in the performance of Executive's duties hereunder in
accordance with the Company's policies applicable on and after the Engagement
Date.
6. Termination by the Company.
---------------------------
(a) The Executive's employment hereunder shall he terminated:
(i) upon death of the Executive; or
(ii) upon the Executive's inability to perform
Executive's duties on account of disability or incapacity fir a period of ninety
(90) or more consecutive days occurring within any period of twelve (12)
consecutive months, such termination to take effect on 30 days prior written
notice from the Company to the Executive. A determination of disability shall
lie made by a physician satisfactory to both the Executive and the Company;
provided that if the Executive and the Company do not agree on a physician, they
shall each select a physician and these two together shall select a third
physician, whose determination as to disability shall he binding on all parties;
or
(iii) at any lime, for Cause (as hereinafter defined),
such termination to take effect immediately upon written notice from the Company
to the Executive, except in case of subparagraph 6(a)(iv)(3) or (4) below, in
which case termination shall only take effect after Executive has been given
written notice of specifications and a reasonable opportunity to cure any matter
referred to therein anti same shall not be cured within such time; or
(iv) upon expiration of the Employment Term.
The following actions, failures or events shall constitute
"Cause" for termination within the meaning of clause (iii) above: (1) conviction
of a felony, (2) acts of dishonesty or moral turpitude constituting fraud or
embezzlement or otherwise materially adversely affecting the business or
properties of the Company, (3) failure by the Executive to obey the reasonable
and lawful orders of the Board of Directors of the Company or (4) repeated
negligence by the Executive in the performance of, or willful disregard by the
Executive, of Executive's
3
obligations hereunder. If the Executive contests, in good faith, whether
termination for "Cause" is proper, said dispute shall he immediately referred to
arbitration in Suffolk County, New York, in accordance with the provisions of
Section 18 hereof. Pending the resolution of such dispute, the Company shall
continue to pay Executive his salary and benefits. Whether Executive must return
any of said amounts if it is ultimately determined that termination for "Cause"
was proper shall be decided by the Arbitrator.
(b) Notwithstanding anything to the contrary expressed or
implied herein, except as required by applicable law, anti except if' the
Company terminates Executive's employment without Cause or the Executive
terminates his employment for Good Reason, the Company shall not he obligated to
make any payments to the Executive or on Executive's behalf of whatever kind or
nature by reason of the Executive's cessation of employment, other than (i) such
amounts, if any, of Executive's salary and bonus as shall have accrued and
remained unpaid as of the date of' said cessation, including Back Salary. and
(ii) such oilier amounts which may he their otherwise payable to the Executive
from the Company's benefits plaits or reimbursement policies, if any (the sum of
these amounts shall hereinafter be referred to as the "Accrued Obligations").
7. Termination by Executive for Good Reason. The Executive may
terminate his employment with the Company for Good Reason. For purposes of this
Agreement, "Good Reason" shall mean, in the absence of the written consent of
the Executive, a reasonable determination by the Executive that any of the
following has occurred:
(a) the assignment to the Executive of any duties inconsistent
in any material respect with the Executive's position (including titles and
reporting requirements, authority, duties or responsibilities as contemplated by
Section 3 hereof), or any other action by the Company which results in a
material diminution in such position, authority, duties or responsibilities,
excluding fur this purpose an isolated and insubstantial action not taken in had
faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive; or
(b) any failure by the Company to comply with any of' the
provisions of this Agreement applicable to it, other than any isolated and
insubstantial failure not occurring in bad faith and which is remedied promptly
after notice thereof from the Executive.
8. Obligations of the Company upon Early Termination. In the event
the Company terminates the Executive's employment during the Employment Term
without Cause, or the Executive terminates his employment for Good Reason, then
the Company shall pay or provide to the Executive the following:
(a) all Accrued Obligations;
(b) all Back Salary;
(c) the Executive's Base Salary under this Agreement for the
duration of one month, except if terminated prior to sixty days of employment,
then a two week's severance package will he applicable; and
4
(d) benefits to the Executive and/or the Executive's family
and dependents for one month and then eligibility under the COBRA plan.
9. Rights and Obligations Upon Change in Control.
----------------------------------------------
(a) In the event of a "Change in Control," as defined below,
of the Company during the Employment Term, the Executive may terminate his
employment with the Company by giving 30 days' notice thereof within six months
alter the occurrence of such Change in Control. lithe Executive terminates his
employment in accordance with this Section 9, or is term mated without Cause
within six months after a Change in Control, the Company shall pay the Executive
an amount equal to: (i) all Accrued Obligations; (ii) all Back Salary; and (iii)
all Base Salary tinder thus Agreement for the duration of the Employment Term.
Such payment shall be made in a lump sum payable on the date of Termination. The
Company shall also continue for such period to pen-lit the Executive to receive
or participate at the Company's expense in all fringe benefits available to him
pursuant to Section 5 for the duration of the Employment Term; provided,
however, in no event shall the amount paid to the Executive pursuant to this
Section 9 exceed the maximum payment permitted by Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code") or then applicable law, and to the
extent any "excess parachute payment," as that phrase is defined in Section
280(3)(b) of the Code or then applicable law, would result from the provisions
of this Section 9, then the amount the Executive would otherwise receive shall
he reduced so that no "excess parachute payment" is made by the Company or
received by the Executive.
(b) A "Change in Control" of the Company shall be deemed to
have occurred as of the first day that any one or more of the Following
conditions shall have occurred:
(i) Army "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Act")),
oilier than the Executive or its Affiliates, becomes the "beneficial owner" (as
defined in Rule 13-d under the Act), directly or indirectly, of securities
representing more than fifty percent (50%) of the total voting power represented
by the Company's then outstanding voting Securities;
(ii) A change in the composition of the Board, as a
result of which fewer than a majority of the directors are Incumbent Directors.
"Incumbent Directors" shall mean directors who either (a) are directors of the
Company as of the date hereof or (b) are elected, or nominated for election, to
the Board with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination; or
(iii) The Company merges or consolidates with any other
corporation after which a majority of the shares of the resulting entity are not
held by the stockholders of the Company prior to the merger, or the Company
adopts, and the stockholders approve, if necessary, a plan of complete
liquidation of the Company, or the Company sells or disposes of substantially
all of its assets.
10. Confidential Information. The Executive hereby covenants, agrees
and acknowledges as follows:
5
(a) The Company is engaged in a continuous program of
research, design, development, production, marketing and servicing with respect
to its business.
(b) The Executive's employment hereunder creates a
relationship of confidence and trust between the Executive and the Company with
respect to certain information pertaining to the business of the Company and its
Affiliates (as hereinafter defined) or pertaining to the business of any client
or customer of the Company or its Affiliates which may be made known to the
Executive by the Company or any of its Affiliates or by any client or customer
of the Company or any of its Affiliates or learned by the Executive during the
period of Executive's employment by the Company.
(c) The Company possesses and will continue to possess
information that has been created, discovered or developed by, or otherwise
become known to it (including, without limitation, information created,
discovered or developed by, or made known to, the Executive during the period of
Executive's employment or arising out of Executive's employment) or in which
property rights have been or may be assigned or otherwise conveyed to the
Company, which information has commercial value in the business in which the
Company is engaged and is treated by the Company as confidential.
(d) Any and all inventions, products, discoveries,
improvements, processes, manufacturing, marketing and services methods or
techniques, formulae, designs, styles, specifications, data bases, computer
programs (whether in source code or object code), know how, strategies and data,
whether or not patentable or registrable under copyright or similar statutes,
made, developed or created by the Executive (whether at the request or
suggestion of the Company, any of its Affiliates, or otherwise, whether alone or
in conjunction with others, and whether during regular hours of work or
otherwise) during the period of Executive's employment by the Company which
directly pertain to the business, products, or processes of the Company or any
of its Affiliates (collectively hereinafter referred to as "Developments"), will
be promptly and fully disclosed by the Executive to an appropriate executive
officer of' the Company (other than the Executive) without any additional
compensation therefore, including, without limitation, all papers, drawings,
models, data, documents and other material pertaining to or in any way relating
to any Developments made, developed or created by Executive as aforesaid. For
the purposes of this Agreement, the term "Affiliate" or "Affiliates" shall mean
any person, corporation or other entity directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
the purposes of this definition, "control" when used with respect to any person,
corporation or other entity means the power to direct the management and
policies of such person or entity, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
(e) The Executive will keep confidential and will hold for the
Company's sole benefit any Development which is to be the exclusive property of
the Company under this Section 1o for which no patent, copyright. trademark or
other right or protection is issued.
(f) The Executive also agrees that the Executive will not
without the prior approval of the Board (i) use for Executive's benefit or
disclose at any time during Executive's employment by the Company, or
thereafter, except to the extent required by the performance by
6
by Executive of Executive's duties as an executive of the Company, any
information known to, obtained on developed by Executive while in the employ of
the Company with respect to any Developments or with respect to any customers,
clients, suppliers, products, services, prices, executives, financial affairs,
or methods of design, distribution, marketing, service, procurement or
manufacture of the Company or any of its Affiliates, or any confidential matter,
except information which at the time is generally known to the public other than
as a result of disclosure by Executive not permitted hereunder, or (ii) take
with Executive upon leaving the employ of the Company any document or paper
relating to any of the foregoing or any physical property of the Company or any
of its Affiliates.
(g) The Executive acknowledges and agrees that a remedy at law
for any breach or threatened breach of the provisions of thins Section 10 would
he inadequate and therefore, agrees that the Company and its Affiliates shall be
entitled to injunctive relief in addition to any other available rights and
remedies in case of any such breach or threatened breach; provided, however,
that nothing contained hem-tin shall he construed as prohibiting the Company or
any of its Affiliates from pursuing any other rights and remedies available for
any such breach or threatened breach.
(h) The Executive agrees that upon termination of Executive's
employment by the Company for any reason, the Executive shall forthwith return
to the Company all documents and other property in Executive's possession or
under the Executive's control belonging to the Company or any of its Affiliates.
(i) The Executive represents and warrants that he has
terminated employment with one or more prior employers and that his employment
by the Company and the use by the Company of any skills and knowledge that lie
may have, are not in violation of the terms of any contract that lie is a party
to or any other applicable provision of the law.
(j) The Executive represents and warrants that his performance
of all the terms of' this Agreement and his duties as an employee of the Company
does now anti will not knowingly breach any agreement to keep in confidence
confidential information acquired by him in confidence or in trust prior to his
employment with the Company. The Executive further represents and warrants that
he has not entered into and he will not enter into any agreement either written
or oral in conflict herewith.
(k) Notwithstanding the foregoing, the Following will not
constitute confidential information for purposes of' thins Agreement: (i)
information which is or becomes publicly available other than as a result of
disclosure by the Executive; or (ii) information designated by the Company as no
longer confidential.
(l) The Executive represents and warrants that he has not
brought and will not bring with him to the Company or use in the performance of
his responsibilities at the Company (a) any materials, documents or confidential
information of a former employer which are not generally available to the
public, unless lie has obtained written authorization from the former employer
for their possession and use, or (b) any confidential information which he knows
or should have known has been acquired by improper means, or otherwise
misappropriated from another person.
7
(m) Without limiting the generality of Section 12 hereof. the
Executive hereby expressly agrees that the foregoing provisions of this Section
10 shall Lie binding upon the Executive's heirs, successors and legal
representatives.
11. Non Competition.
----------------
(a) During the period during which Executive is employed
hereunder and, at the Company's option and subject to the Company continuing to
pay the Executive all salary and benefits paid to him in the year preceding his
termination, during the one-year period following such termination (the
"Non-Competition Period"):
(i) the Executive will not make any statement or
perform any act intended to advance an interest of any existing or prospective
competitor of the Company or any of its Affiliates in any way that will or may
injure an interest of the Company or any of its Affiliates in its relationship
and dealings with existing or potential customers or clients, or solicit or
encourage any other executive of' the Company or any of its Affiliates to do any
act that is disloyal to the Company of any of its Affiliates or inconsistent
with the interest of the Company or any of its Affiliates interests or in
violation of any provision of this Agreement;
(ii) the Executive will not solicit, divert or take
way, or attempt to divert or to take away, the business or patronage of any of
the clients, customers, dealers, distributors, representatives or accounts, or
prospective clients, customer's, dealers, distributors, representatives or
accounts, of' the Company or its Affiliates which were contacted, solicited or
served by employees of the Company while the Executive was employed by the
Company.
(iii) the Executive will not directly or indirectly
(as a director, stockholder, officer, Executive, manager, consultant,
independent contractor, advisor or otherwise) engage in competition with, or own
any interest in, perform any services for, participate in or be connected with
(i) any business or organization which engages in competition with the Company
or any of its Affiliates iii the United States or any other geographical area
where any business is presently carried on by the Company or any of its
Affiliates, or (ii) any business or organization which engages in competition
with the Company or any of its Affiliates in any geographical area where any
business shall be hereafter, during the period of the Executive's employment by
the Company, carried on by the Company or any of its Affiliates, if such
business is being carried on by the Company or any of its Affiliates in such
geographical area during the Non-Competition Period; and
(iv) the Executive will not directly or indirectly
solicit for employment, or advise or recommend to any other person that they
employ or solicit for employment, any employee of the Company or any of its
Affiliates;
provided, however, that there shall be no Non-Competition Period following the
termination of the Executive without Cause, or following the termination by the
Executive of his employment for Good Reason; and provided, further, that the
provisions of this Section 11(a) shall not he deemed to prohibit the Executive's
ownership of not more than five percent (5%) of the total shares of all classes
of stock outstanding of any publicly-held company.
8
(b) (i) The Executive further agrees that the limitations set
forth in this Section 11 (including, without limitation, any time or territorial
limitations) are reasonable and properly required for the adequate protection of
the businesses of the Company and its Affiliates. It is understood and agreed
that the covenants made by the Executive in this Section 11 (and in Section 10
hereof) shall survive the expiration or the termination of this Agreement.
(ii) The Executive acknowledges and agrees that a
remedy at law for any breach or threatened breach of the provisions of this
Section 11 would be inadequate and, therefore, agrees that the Company and any
of its Affiliates shall be entitled to injunctive relief in addition to any
other available rights arid remedies in cases of any such breach or threatened
breach; provided, however, that nothing contained herein shall be construed as
prohibiting the Company or any of its Affiliates from pursuing any other rights
and remedies available for any such breach or threatened breach.
12. Assignability. Neither this Agreement nor any right or interest
hereunder shall be assignable by the Executive, Executive's beneficiaries, or
legal representatives without the Company's prior written consent; provided,
however, that nothing in this Section 12 shall preclude the Executive from
designating a beneficiary to receive any benefit payable hereunder upon
Executive's death or incapacity.
13. Binding Effect. Without limiting or diminishing the effect of
Section 12 hereof, this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, successors, legal
representatives and assigns; except under no circumstances will the provisions
of Section 11 be binding upon the Executive's heirs, successors, legal
representatives or assigns.
14. Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and either delivered in person or
sent by First class certified or registered mail, postage prepaid, if to the
Company, at the Company's principal place of business, and if to the Executive,
at Executive's home address set forth on the signature hereto, or to such other
address or addresses as either party shall have designated in writing to the
other party hereto.
15. Severability. The Executive agrees that in the event that any
court of competent jurisdiction shall finally hold that any provision of Section
10 or 11 hereof is void or constitutes an unreasonable restriction against the
Executive, such provision shall not he rendered void but shall apply to such
extent as such court may judicially determine constitutes a reasonable
restriction under the circumstances. If any pact of this Agreement other than
Section 10 or 11 is held by a court of competent jurisdiction to be invalid,
illegible or incapable of being enforced in whole or in part by reason of any
rule of law or public policy, such part shall be deemed to be severed from the
remainder of this Agreement for the purpose only of the particular legal
proceedings in question and all other covenants arid provisions of this
Agreement shall in every other respect continue in full force and effect and no
covenant or provision shall he deemed dependent upon any other covenant or
provision.
16. Waiver. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition; nor shall
9
any waiver or relinquishment of any right or power hereunder at any one or
more times be deemed a waiver or relinquishment of such right or power at any
other time or times.
17. Entire Agreement; Modifications. This Agreement constitutes the
entire and final expression of the agreement of the parties with respect to the
subject matter hereof and supersedes all prior agreements, oral and written,
between the parties hereto with respect to the subject matter hereof. This
Agreement may be modified or amended only by an instrument in writing signed by
both parties hereto.
18. Governing Law and Arbitration of Disputes. This Agreement shall
be construed and enforced in accordance with the internal laws of the State of
New York without regard to the conflicts of law principles thereof. Any dispute
arising hereunder shall be settled by arbitration in Suffolk County, New York,
in accordance with the rules then obtaining of the American Arbitration
Association ("AAA"). One Arbitrator will he chosen by the parties who shall be
an attorney experienced in labor and employment law. If the parties cannot agree
on the identity of the Arbitrator, he will he appointed by the head of the AAA
in Suffolk County, New York.
19. Prior Employment Agreement in Force. The parties hereto agree
that the previous Employment Agreement entered into as of (none), by and between
the parties hereto shall remain in full force and effect until this Agreement
becomes effective.
20. Counterparts. This Agreement may he executed in two or more
counterparts, each of which shall he deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Executive have duly
executed and delivered this Agreement as of the day and year first above written
OMNICORDER TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President & CEO
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
