EXHIBIT 10.6
BOARD OF DIRECTOR'S EMPLOYMENT AGREEMENT
This Board of Director's Employment Agreement ("Agreement") is entered into as
of February 15, 2004, by and between Union Dental Corp, (the "Company") a
Florida corporation whose principal place of business is 0000 Xxxxxxxxxx Xxxxx,
Xxxxx 000, Xxxxx Xxxxxxx, Xxxxxxx 00000, and Xxxxxx Xxxx Xxxxx , whose address
is located at 000 X Xxxxxxxx Xxx., Xxxxxxxx Xxxxx, XX 00000 (the "Member").
W I T N E S S E T H:
WHEREAS, the Company has offered the Xxxxxx X. Xxxxx the position as a Member of
the Board of Director's of the Company and the Member possesses knowledge and
experience which are valuable to the company; and
WHEREAS, the principal business of the Company is a dental practice referred to
as Xxxxxx X. Xxxxx D.D.S., P.A. (hereinafter referred to as "Green") and a
second business, Direct Dental Services, Inc. ("DDS") which encompasses the
sales and marketing of an exclusive Dental Network for the Communications
Workers of America union ("CWA") and the International Brotherhood of Electrical
Workers union ("IBEW") in eighteen (18) states with the intent of expanding the
concept throughout the United States and into other unions, such as General
Electric and the United Auto Workers.
NOW, THEREFORE, for and in consideration of the mutual covenants and promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and accepted, the parties hereto
agree as follows:
1 Employment. The Company hereby offers to employ Member, and Member
accepts such employment, upon the terms and conditions hereinafter set forth.
2 Employment Term. The "Initial Term" means the basic term of this
Agreement, which begins on the date hereof (the "Effective Date") and ends on
the second anniversary of this Agreement. Thereafter, Member's employment
hereunder shall be voted on by shareholders of the Company at the annual meeting
and renewed for successive periods of two (2) years (each a "Renewal Term"),
unless either party hereto shall give written notice to the other that Member's
employment hereunder shall not be renewed or continued, as the case may be, not
less than ninety (90) days prior to the end of the then current term of
employment. The Initial Term and any Renewal Term may be terminated pursuant to
Section 7 hereof.
3. Office: Duties of Board of Director's. During the term of the Member's
employment, the Member shall serve as a member of the Board of Director's and,
in so doing, shall perform normal duties and responsibilities associated with
such position, including, without limitation, working with the other members of
the Board of Director's
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to plan the development of the Company's philosophy and structure, growth plan
and strategic alternatives, develop financing sources, evaluate the Company's
capital structure and recommend any appropriate changes, serving as liaison with
and otherwise managing the Company and its relationship with members of the CWA
local unions, and carrying out such other or different duties as may be assigned
him by the other members of the Company's Board of Director's. During the term
of this Agreement, Member shall devote so much of his business time and
attention to the business and affairs of the Company as he, in his sole
discretion, deems appropriate, subject to the general direction, approval and
control of the Board of Director's.
4. Compensation. Except as otherwise provided in this Agreement, the
Company shall compensate member in the manner set forth in this Section 4
payable in accordance with the normal payroll practices of the Company for the
duration of the term of this Agreement ("Employment Term").
4.1 Stipend. For each year during the Employment Term (or, if this
Agreement shall be earlier terminated in accordance the terms of Section 7
hereof, ending on the date of termination of this Agreement), the Company
will pay to Board of Director's a stipend equal to the base amount listed
on Exhibit A attached hereto and made a part hereof. The stipend will be
paid in accordance with the normal payroll procedures of the Company.
4.2 Incentive Bonuses. With the approval of the Board of Director's,
the Company may pay additional increases in the base compensation and may
pay incentive bonuses to Board of Director's.
4.2(a) At the signing of this Agreement, Executive shall receive
an equity position of restricted stock (144 stock cannot be sold for a
period of one year from the date of issuance) equal to _____ shares
issued in accordance with the Securities and Exchange Commission Act
of 1934 ( the "Act" as Amended).
4.2(b) At the signing of this Agreement, Board of Directors'
Member, for his position as a Member of the Board of Directors, for a
term of two years, shall receive 250,000 options (this number being
based upon a formula of 1% of the issued and outstanding shares of
stock in the Company currently estimated to be 25,000,000 shares) with
an exercise price of $ _________ (at market bid price as determined by
the first quote of the shares as obtained from the National Quotation
Bureau "NQB") and exercisable within five (5) years of the date first
mentioned in this Agreement. Fifty (50) percent of these shares shall
be "vested" immediately and the balance of the options shall be deemed
"vested" at the end of the two year term as a Member of the Board of
Directors. The term "vested" shall mean the shares of stock underlying
the options agreement shall be registered by the Company at the first
available opportunity.
4.3 Other Benefits. Member shall receive other employment benefits
which are similar to compensation packages comparable to Board of
Director's of other companies in similar industries.
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5. Business-Related Expenses. Upon presentation, in accordance with Company
policies, of itemized accounts of his expenditures related to his performance as
a Member of the Board of Director's, the Company promptly shall reimburse Member
for all reasonable and necessary travel expenses and other expenses incurred by
Member on behalf of the Company in the performance of his duties under this
Agreement.
5.1 Member, when traveling by air, shall travel in Coach Class.
5.2 Member shall be allowed to stay at hotels that are three (3)
stars.
5.3 Member shall be allowed to rent a mid size car of his choosing to
fit the needs of the travel plans associated with his duties as a Member of
the Board of Director's while on business trips.
5.4 Member shall be allowed to dine at restaurants, as the need
arises, at his discretion, in order to properly entertain business
associates.
6. Covenants.
6.1 Proprietary Information. In performance of services under this
Agreement, Member may have access to:
6.1(a) information which derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use, and is the subject of
efforts that are reasonable under the circumstance to maintain its
secrecy (hereinafter "Trade Secrets" or "Trade Secret"); and
6.1(b) information which does not rise to the level of Trade
Secret but is valuable to the Company and provided in confidence to
Board of Directors (hereinafter "Confidential Information"). Member
acknowledges and agrees with respect to Trade Secrets and Confidential
Information provided to or obtained by Member (hereinafter
collectively the "Proprietary Information"):
6.1(b) (i) the Proprietary Information is and shall remain
the exclusive property of the Company; and
6.1(b) (ii) to use the Proprietary Information exclusively
for the purpose of fulfilling the obligations of this Agreement;
and
6.1(b) (iii) to return the Proprietary Information, and any
copies thereof, in his possession or under his control, to the
Company upon request of the Company, or expiration or termination
of this Agreement for any reason; and
6.1(b) (iv) to hold the Proprietary Information in
confidence and not copy, publish or disclose to others or allow
any other party to copy, publish or disclose to
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others in any form, any Proprietary Information without the prior
written approval of an authorized representative of the Board of
Directors.
The obligations and restrictions set forth in this Section 6.1
shall survive the expiration or termination of this Agreement,
for any reason, and shall remain in full force and effect as
follows:
6.1(b) (x) as to Trade Secrets, indefinitely, and
6.1(b) (y) as to Confidential Information, for a period of two
(2) years after the expiration or termination of this Agreement
for any reason.
The confidentiality, property, and proprietary rights
protections available in this Agreement are in addition to, and
not exclusive of, any and all other corporate rights, including
those provided under copyright, corporate officer or director
fiduciary duties, and trade secret and confidential information
laws. The obligations set forth in this Section 6.1 shall not
apply or shall terminate with respect to any particular portion
of the Proprietary Information which (i) was in Member's
possession, free of any obligation of confidence, prior to his
receipt from the Company, (ii) Member establishes the Proprietary
Information is already in the public domain at the time the
Company communicates it to the Member, or become available to the
public through no breach of this Agreement by Member, or (iii)
Member establishes that the Proprietary Information was received
by Member independently and in good faith from a third party
lawfully in possession thereof and has no obligation to keep such
information confidential.
6.2 Ownership of Property. Member agrees and acknowledges that all
works of authorship and inventions, including but not limited to products,
goods, know-how, Trade Secrets and Confidential Information, and any
revisions thereof, in any form and in whatever stage of creation or
development, arising out of or resulting from, or in connection with, the
services provided by Member to the Company under this Agreement
(collectively the "Property") are works made for hire and shall be the sole
and exclusive property of the Company. Member agrees to execute such
documents as the Company may reasonably request for the purpose of
effectuating the rights of the Company herein.
6.3 Warranty and Absence of Conflict. Member warrants to the Company
that Member is not under any other contract or agreement that precludes
member from remaining as an employee of the Company or performing services
as provided in this Agreement.
6.4 Non-Solicitation. member covenants and agrees that during his term
with the Company, and for a period of one (1) year following the date that
his employment is terminated for any reason whatsoever, he will not on
behalf of any person, firm, corporation or entity solicit or accept
business from customers of the Company, including actively-sought
prospective customers, with whom he had material contact during the course
of his employment with the Company during the two (2) year period prior to
Member's termination of employment for the purpose of providing or selling
products or
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services that are competitive with those provided by Company in connection
with the Business.
6.5 Non Competition. Member covenants and agrees that during his
employment with the Company and for a period of one (1) year following the
date that his employment is terminated for any reason whatsoever, he will
not, within the Business Area (defined below), directly or indirectly, on
his own behalf or in the service or on behalf of others, engage in any
business which is the same or essentially the same as the business of the
Company (the "Business"), as a manager, supervisor, administrator, owner,
salesman, or in another capacity which involves duties, and
responsibilities similar in any way to those undertaken for the Company
herein.
6.6 Certain Definitions and Exclusions.
6.6(a) "Business Area" means the geographic areas located within
the eighteen (18) state dental networks under contract, operated and
maintained by the Company.
6.6(b) The Company and Board of Director's specifically
acknowledge that Member shall not be prohibited from entering into any
transaction pursuant to which Member (a) obtains voting or management
control of an institution which either engages in the business of
discount dental services or funds or invests in companies or
businesses engaged in the business of discount dental services or
funds or invests in companies or businesses engaged in the business of
discount dental services or (b) invests in or obtains voting or
management control of any entity which discounts dental services as an
ancillary activity to such entity's normal business activities as long
as these business activities are not engaged in marketing or selling
of dental services or creating dental networks for unions.
6.7 Non-Interference. Member covenants and agrees that during his
employment with the Company and for a period of two (2) years following the
date that his employment agreement is terminated for any reason whatsoever,
he will not, directly or indirectly, on his own behalf or in the service or
on behalf of others, call upon, solicit, recruit, or hire away or assist
others in calling upon, soliciting, recruiting or hiring away, any person
who is or was, during the two (2) year period prior to Member's termination
of employment, an employee of the Company, to have such person work in any
other firm, association, corporation or entity engaged in a business
substantially similar to the Business.
6.8 Injunctive Relief. Member acknowledges and agrees that the remedy
at law for any such breach of this Section 6 will be inadequate and that in
the event of such breach the Company will suffer irreparable damage;
accordingly, the Company shall be entitled to temporary and permanent
injunctive relief in the event of breach without the necessity of proving
monetary damages.
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6.9 Indemnification Defense. Member shall indemnify the Company from
and against any and all actions, suits, proceedings, liabilities, damages,
losses, costs and expenses (including attorneys' and experts' fees) arising
out of or in connection with any breach or threatened breach by the Board
of Director's of any one or more provisions of this Agreement. The
existence of any claim, demand, action or cause of action of the Member
against the Company shall not constitute a defense to the enforcement by
the Company of any of the covenants or agreements herein.
7. Termination.
7.1 General. This Agreement may be terminated prior to the expiration
of the Initial Term or any Renewal Term by any of the following events:
7.1(a) mutual written agreement expressed in a single document
signed by both the Company and Member;
7.1(b) voluntary written resignation by Member other than for
Good Reason;
7.1(c) death of the Member;
7.1(d) disability of the Member;
7.1(e) termination by the Company for any reason other than Cause
(as defined below); or
7.1(f) termination by the Company for one of the following
reasons ("Cause"): (i) an act by Member of fraud or misappropriation;
(ii) Member's willful breach of any agreement or covenant of this
Agreement; (iii) criminal conduct of Member which results in a felony
conviction of Board of Director's with respect to which all
opportunities for appeal have been expired; or (iv) Member's recurring
gross negligence or continuing willful failure of Member to perform
his duties under this Agreement if such failure is not cured within
ten (10) days after notice from the Company thereof.
7.2 Compensation Through Date of Termination. Upon termination for any
of the foregoing reasons, Member shall continue to render his services and
shall be paid his regular compensation and benefits up to the date of
termination. Severance payment hereunder is in addition to the regular
compensation and benefits which Member shall receive up to the date of
termination.
7.3 Severance and Liquidated Damages. If this Agreement is terminated
by the Company pursuant to Section 7.1(e), the Company shall pay to the
Member a severance and liquidated damages payment equal to Member's then
stipend under Section 4.1 through the end of the Initial Term or the
Renewal Term then in effect, as the case may be, pursuant to the normal
payroll practices of the Company. Otherwise, the Company shall have no
obligation to pay Member any form of severance or other
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payment upon termination or expiration of this Agreement by the Company or
the Board of Directors. Expiration of the Initial Term of this Agreement
shall not be deemed a termination pursuant to Section 7.1(e). Member agrees
that such payment shall not constitute liquidated damages for any alleged
or actual breach by the Company under this Agreement or the Company's
Operating Agreement and agrees that, upon receipt of such severance
liquidated damages payment, he shall release the Company and all other
persons from any and all claims arising out of alleged or actual breaches
of this Agreement or the Operating Agreement.
7.4 Confidentiality of Cause Notice. Member agrees that in the event
he receives written notice of termination with cause, Member shall treat
the contents of said notice as privileged and Member shall have no action
against the Company or any of its officers, agents, or employees due to the
contents of said notice unless the contents are intentionally false and
malicious.
8. Miscellaneous.
8.1 Severability. In the event that any provision or portion thereof
of this Agreement is declared invalid, void or unenforceable by a court of
competent jurisdiction, the remaining provisions or portions thereof shall
nevertheless continue in full force and effect without being impaired or
invalidated in any way or to any extent.
8.2 Waiver of Breach. Failure or delay of either party to insist upon
compliance with any provision hereof shall not operate as, and is not to be
construed as, a waiver or amendment of such provision. Any express waiver
of any provision of this Agreement shall not operate and is not to be
construed as a waiver of any subsequent breach, whether occurring under
similar or dissimilar circumstances.
8.3 Notice. All notices and other communications required or permitted
to be given by this Agreement shall be in writing and shall be given and
shall be deemed received if and when either hand delivered and a signed
receipt is given therefore or mailed by registered or certified United
States mail, postage-prepaid, and if to the Company, to:
Union Dental Corp.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxx Xxxxxxx, XX 00000
Or, if to Member, to:
Xxxxxx Xxxx Xxxxx
000 X Xxxxxxxx Xxx.,
Xxxxxxxx Xxxxx, XX 00000
Or at such other address as either party hereto shall notify the other of
in writing.
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8.4 Entire Agreement. This Agreement supersedes any and all prior
agreements between the parties hereto, and constitutes the entire agreement
and understanding by and between Member and the Company with respect to the
Employment of Member and no representations, promises, agreements or
understandings, written or oral relating to the employment of Member by the
Company not contained or referenced herein shall be of any force or effect.
8.5 Amendment. This Agreement may be amended at any time by mutual
consent of the parties hereto, with any such amendment to be invalid unless
in writing and signed by the Company and Member.
8.6 Benefit. This Agreement, together with any amendments hereto,
shall be binding upon and shall inure to the benefit of the parties hereto
and their respective successors, assigns, heirs and personal
representatives, except that the rights and benefits of either of the
parties under this Agreement may not be assigned without the prior written
consent of the other party.
8.7 Withholding. Any payments provided for herein shall be reduced by
any amounts required to be withheld by the Company from time to time under
applicable federal, state or local income or employment tax laws or similar
statutes or other provisions of law then in effect.
8.8 Arbitration. In the event of any dispute between the parties, such
dispute shall be resolved by arbitration in accordance with the rules of
the American Arbitration Association, with costs and reasonable attorney
fees to be assessed against the non- prevailing party.
8.9 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original but both of which together shall
constitute one and the same Agreement.
8.10 Governing Law. This Agreement is being made in the State of
Florida and shall be construed and enforced in accordance with the laws of
that state.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
MEMBER UNION DENTAL CORP.
/s/ Xxxxxx Xxxx Xxxxx /s/ Xx. Xxxxxx X. Xxxxx
------------------------ ------------------------------
Xxxxxx Xxxx Xxxxx Xx. Xxxxxx X. Xxxxx, President
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EXHIBIT A
Stipend: $24,000 annually payable in quarterly installments of $6,000.
Payment one: April 1, 2004
Payment two: July 1, 2004
Payment three: October 1, 2004
Payment four: January 1, 2005
Payment five: April 1, 2005
Payment six: July 1, 2005
Payment seven: October 1, 2005
Payment eight: January 1, 2006
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Bonus: In addition to the options listed in Section four (4) of this Agreement,
Member shall be granted the following Incentive Bonuses under the following
terms and conditions:
1. If at any time, during the Term of this Agreement, the renewal rate of
doctors in California meets 100 or more, then Xxxxx shall be entitled to receive
an increase in stipend from $24,000 annually to $36,000 annually.
2. If the Company should increase gross revenues to $3.0 million in any calendar
year, then the Executive shall receive 82,500 options (this number being based
upon a formula of .0033% of the issued and outstanding shares of stock,
currently estimated to be 25,000,000 shares in the Company) with an exercise
price of $ _________ (at market bid price as determined by the quote of the
shares at the close of business the day the options were issued by the National
Quotation Bureau "NQB") exercisable within five (5) years from the date such
options are issued. All of these shares shall be "vested" immediately. The term
"vested" shall mean the shares of stock underlying the options agreement shall
be registered by the Company at the first available opportunity.
3. If the Company should increase gross revenues to $4.0 million in any calendar
year, then the Executive shall receive 82,500 options (this number being based
upon a formula of .0033% of the issued and outstanding shares of stock, totaling
25,000,000 shares in the Company) with an exercise price of $ _________ (at
market bid price as determined by the quote of the shares at the close of
business the day the options were issued by the National Quotation Bureau "NQB")
exercisable within five (5) years from the date such options are issued. All of
these shares shall be "vested" immediately. The term "vested" shall mean the
shares of stock underlying the options agreement shall be registered by the
Company at the first available opportunity.
4. If the Company should increase gross revenues to $5.0 million in any calendar
year, then the Executive shall receive 82,500 options (this number being based
upon a formula of .0033% of the issued and outstanding shares of stock,
currently estimated to be 25,000,000 shares in the Company) with an exercise
price of $ _________ (at market bid price as determined by the quote of the
shares at the close of business the day the options were issued by the National
Quotation Bureau "NQB") exercisable within five (5) years from the date such
options are issued. All of these shares shall be "vested" immediately. The term
"vested" shall mean the shares of stock underlying the options agreement shall
be registered by the Company at the first available opportunity.
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