EXHIBIT 10.4
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EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated September 27, 2006 by and
between Genotec Acquisition Corp. ("Genotec" or the "Company") , a New Jersey
corporation with an address at 0 Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000 (the
"Company"), and Xxxxx Xxxxxxxx, an individual having an office at 000 Xxxxxxx
Xxxx Xxxx Xxxx, XX 00000 (the "Employee").
W I T N E S S E T H
WHEREAS, the Company, Genotec Nutritionals, Inc., a Delaware corporation
("Seller"), Xxxxxx Xxxxxxxxxx, an individual ("Kontonotas"), Xxxxxx Xxxxxxxx, an
individual ("Xxxxxxxx"), Xxxxx Xxxxxxxx, an individual ("Xxxxxxxx"),
(Kontonotas, Freedman, and Xxxxxxxx shall be collectively referred to herein as
the "Shareholders"), MM(2) Group, Inc. , a New Jersey corporation ("MM2")
entered into an Asset Purchase Agreement dated September 27, 2006 (the "Asset
Purchase Agreement"); and
WHEREAS, the Company desires that Employee be employed by it and render
services to it, and Employee is willing to be so employed and to render such
services to the Company, all on the terms and subject to the conditions
contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT
Subject to and upon the terms and conditions contained in this Agreement,
the Company hereby employs Employee, for the period set forth in Paragraph 2
(subject to the terms and conditions of this Agreement), to render the services
to the Company, its affiliates and/or subsidiaries described in Paragraph 3.
2. TERM
Employee's term of employment under this Agreement shall commence on
September 21, 2006 (the "Commencement Date") and shall continue for a period
terminating on September 30, 2009 (the "Expiration Date"), unless earlier
terminated under the terms and conditions herein (the "Employment Term").
3. DUTIES
(a) The Employee agrees that she will serve the Company on a full-time
basis faithfully and to the best of her ability as Vice President -
Administration, subject to the general supervision of the Chief Executive
Officer of the Company. Employee shall be based in the Company's offices in Deer
Park, New York.
(b) The Employee's duties are subject to change, as determined by the Chief
Executive Officer and/or the Company's Board of Directors. The Employee's
primary areas of responsibility include, but are not limited to: Office
administration, bookkeeping, human resources.
(c) Employee agrees to abide by all By-Laws and policies of the Company, as
promulgated from time-to-time by the Company.
(d) Employee will serve as a member of the Company's Management Committee
or as otherwise directed by the Chief Executive Officer of the Company.
4. EXCLUSIVE-SERVICES AND BEST EFFORTS
Employee shall devote her entire working time, attention, best efforts and
ability exclusively to the service of the Company, its affiliates and
subsidiaries during the term of this Agreement. Employee will be permitted to
provide limited management services to the business of CardioCeuticals LLC only
through September 30, 2006. Deviations from this shall require written approval
by the Chief Executive Officer or the Company's Board of Directors.
5. COMPENSATION
(a) Base Salary. Commencing on the Commencement Date, and for the next
twelve (12) months following the Commencement Date, the Employee shall receive
an annual salary, payable bi-weekly, in the amount of Forty Eight Thousand
Dollars ($48,000), subject to all required federal, state and local payroll
deductions. The Employee's base salary shall be increased on each anniversary of
the Commencement Date as deemed appropriate by the Chief Executive Officer with
the approval of the Board of Directors of the Company.
(c) Additional Compensation. Following the first anniversary of the
Commencement Date, the Employee may be paid a bonus as set forth in Attachment A
herein.
(d) Stock Options. The Employee shall participate in the Company's
Incentive Stock Option Plan at the sole discretion of the Board of Directors of
the Company.
6. BUSINESS EXPENSES
Employee shall be reimbursed for only those business expenses incurred by
her (a) which are reasonable and necessary for Employee to perform her duties
under this Agreement in accordance with policies established from time-to-time
by the Company, and (b) for which Employee has submitted vouchers and/or
receipts.
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7. EMPLOYEE BENEFITS, VACATIONS, PERSONAL DAYS
During the term of this Agreement:
(a) The Employee shall participate in the Company's health insurance
program covering herself and her immediate family at no cost to the Employee.
(c) The Employee shall be entitled to four (4) weeks of vacation, sick
and/or personal days per annum during the Employment Term beginning on the
Commencement Date, to be planned and taken (where possible) at such times as may
be mutually agreed upon by the Chief Executive Officer of the Company and the
Employee. Vacation may not be carried over from one calendar to the next. Any
vacation earned and not used in the calendar year in which it is earned will be
lost. The Employee shall also be entitled to have off all published holidays of
the Company, as announced on December 31st of each year for the following
calendar year.
8. DEATH AND DISABILITY
(a) The Employment Term shall terminate on the date of Employee's death, in
which event Employee's base salary payable pursuant to Paragraph 5 through the
last day of the month in which the Employee's death did occur shall be paid to
her estate. Employee's estate will not be entitled to any other compensation
upon termination of this Agreement pursuant to this Paragraph 9(a).
(b) If during the Employment Term, Employee, because of physical or mental
illness or incapacity, shall become substantially unable to perform the duties
and services required of her under this Agreement for a period of sixty (60)
consecutive days or one hundred twenty (120) days in the aggregate, the Company
may, upon at least ten (10) days prior written notice given at any time after
the expiration of such 60 or 120-day period, as the case may be, provide
Employee with a written notice of its intention to terminate this Agreement as
of such date as may be set forth in the notice. In case of such termination,
Employee shall be entitled to receive her salary payable pursuant to Paragraph
5, through the date of termination. Employee will not be entitled to any other
compensation upon termination of this Agreement pursuant to this Paragraph 9(b).
9. TERMINATION
(a) The Company may terminate the employment of Employee "FOR CAUSE" during
the Employment Term. Upon such termination, except as set forth herein, the
Company shall be released from any and all further obligations under this
Agreement, except that the Company shall be obligated to pay Employee the unpaid
prorated base salary pursuant to Paragraph 5 earned or accrued up through the
day on which Employee is terminated.
(b) As used herein, the term "FOR CAUSE" shall mean:
(i) any material breach of this Agreement by Employee that, in the
case of a breach that may be cured or remedied, is not cured or remedied to the
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reasonable satisfaction of the Company within 30 days after written notice is
given by the Company to Employee, setting forth in reasonable detail the nature
of such breach;
(ii) Employee's failure to perform her duties and services hereunder
to the reasonable satisfaction of the Chief Executive Officer or the Board of
Directors of the Company that, in the case of any such failure that may be cured
or remedied, is not cured or remedied to the reasonable satisfaction of the
Company within 30 days after notice is given by the Company to Employee, setting
forth in reasonable detail the nature of such failure;
(iii) any material act, or material failure to act, by Employee in bad
faith and to the material detriment of the Company; or
(iv) commission by Employee of a material act involving moral
turpitude, dishonesty, unethical business conduct, or any other conduct which
significantly impairs the reputation of the Company, its subsidiaries or
affiliates.
(v) the conviction of the Employee of a felony, including the plea of
nolo contendre.
(c) The Employee may terminate this Agreement if MM2 fails to contribute
the Additional Investment as set forth in Section 6.3(a) of the Asset Purchase
Agreement within eighteen (18) months from the Closing Date of the Asset
Purchase Agreement.
10. DISCLOSURE OF INFORMATION AND RESTRICTIVE COVENANT
(a) The Employee acknowledges that the Employee has been informed that it is the
policy of the Company to maintain as secret and confidential all information
(i) relating to the products, processes, designs and/or systems used
by the Company and its Affiliates and
(ii) relating to the customers and employees of the Company and its
Affiliates. Confidential information and trade secrets include, but are not
limited to, customer and client lists, price lists, marketing and sales
strategies and procedures, operational and equipment techniques, business plans
and systems, quality control procedures and systems, special projects and
technological research, including projects, research and reports for any entity
or client or any project, research, report or the like concerning sales or
manufacturing or new technology, employee compensation plans and any other
information relating thereto, and any other records, files, drawings,
inventions, discoveries, applications or processes which are not in the public
domain (all the foregoing shall be referred to herein as the "Confidential
Information"). The Employee further acknowledges that such Confidential
Information is of great value to the Company.
For purposes of this Agreement, "Affiliates" means any person or entity or
group of persons or entities acting together that, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the Company.
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The parties recognize that the services to be performed by the Employee are
special and unique, and that by reason of her employment by the Company, the
Employee has and will acquire Confidential Information as stated above. The
parties confirm that it is reasonably necessary to protect the Company's (and
its Affiliates') goodwill, and accordingly the Employee does agree that the
Employee shall not and will not directly or indirectly (except where authorized
by the Board of Directors of the Company for the benefit of the Company or
agreed in writing by the Company and the Employee):
A. At any time during her employment by the Company or after the Employee
ceases to be employed by the Company, divulge to any persons, firms or
corporations, other than the Company (hereinafter referred to collectively as
"third parties"), or use or allow or cause or authorize any third parties to
use, any such confidential information; and
B. At any time during her employment by the Company and for a period of
twenty four (24) months after the Employee ceases to be employed by the Company,
solicit or cause or authorize directly or indirectly to be solicited, for or on
behalf of the Employee or third parties, in connection with any Competitive
Activity within two (2) years prior to the cessation of her employment
hereunder, customers of the Company or its affiliates; and
C. At any time during her employment by the Company and for a period of
twenty four (24) months after the Employee ceases to be employed by the Company,
accept or cause or authorize directly or indirectly to be accepted, for or on
behalf of the Employee or third parties, any business in connection with any
Competitive Activity from any such customers of the Company or its affiliates;
and
D. At any time during her employment by the Company and for a period of
twenty four (24) months after the Employee ceases to be employed by the Company,
solicit or cause or authorize directly or indirectly to be solicited for
employment, for or on behalf of the Employee or third parties, any persons
(excluding any individuals residing in the same immediate primary residence as
the Employee, and/or the Employee's immediate family) who were at any time
within one year prior to the cessation of her employment hereunder, employees of
the Company or its affiliates; and
E. At any time during her employment by the Company and for a period of
twenty four (24) months after the Employee ceases to be employed by the Company,
employ or cause or authorize directly or indirectly to be employed, for or on
behalf of the Employee or third parties, any such employees of the Company or
its affiliates.
F. Notwithstanding anything to the contrary, the Employee will be permitted
to provide limited management services to the business of CardioCeuticals LLC
only through September 30, 2006.
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(b) The Employee agrees that, upon the expiration of her employment by the
Company for any reason, the Employee shall forthwith deliver up to the Company
any and all records, drawings, notebooks, keys and other documents and material,
and copies thereof in her possession or under her control which is the property
of the Company or which relate to any confidential information or any
discoveries of the Company.
(c) The Employee agrees that any breach or threatened breach by the
Employee of any provision of Paragraphs 10 and 11 shall entitle the Company, in
addition to any other legal remedies available to it, to enjoin such breach or
threatened breach through any court of competent jurisdiction. The parties
understand and intend that each restriction agreed to by the Employee herein
above shall be construed as separable and divisible from every other
restriction, and that the unenforceability, in whole or in part, of any
restriction will not affect the enforceability of the remaining restrictions,
and that one or more or all of such restrictions may be enforced in whole or in
part as the circumstances warrant.
(d) For the purposes of this Section, the term "Company" shall mean and
include any and all subsidiaries, parents and affiliated corporations of the
Company in existence from time to time, for which the Company has operational
control.
(e) Employee will not induce or persuade other employees of the Company to
join her in any activity prohibited by Paragraph 10 or 11.
(f) This Paragraph 10 and Paragraphs 11, 12, 13, 14, 19 and 20 shall
survive the expiration or termination of the Agreement for any reason, except
Paragraph 10.B, 10.C, 10.D and 10.E shall terminate upon: (i) the Employee's
resignation and MM2 failing to contribute the Additional Investment as set forth
in Section 6.3(a) of the Asset Purchase Agreement within eighteen (18) months
from the Closing Date of the Asset Purchase Agreement or (ii) the Company
failing to pay the Employee his/her Base Salary and/or commissions on a timely
basis or (iii) the wrongful termination of the Employee by the Company as
determined by a court of competent jurisdiction.
(g) It is expressly agreed by Employee that the nature and scope of each of
the provisions set forth in Paragraphs 10 and 11 are reasonable and necessary.
If, for any reason, any aspect of these provisions as they apply to Employee is
determined by a court of competent jurisdiction to be unreasonable or
unenforceable, the provisions shall only be modified to the minimum extent
required to make the provisions reasonable and/or enforceable, as the case may
be. Employee acknowledges and agrees that her services are of a unique character
and expressly grants to the Company or any subsidiary, successor or assignee of
the Company, the right to enforce the provisions above through the use of all
remedies available at law or in equity, including, but not limited to,
injunctive relief.
(h) For purposes of this Section 10, "Competitive Activity" shall mean any
activity relating to, in respect of or in connection with, directly or
indirectly, any and all products that the Seller offered to its customers or
anticipated to offer to its customers immediately prior to the Closing Date of
the Asset Purchase Agreement or two (2) years
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prior to the Employee's employment terminated, except: (i) for the Brokerage
Business conducted by Kontonotas prior to the Closing date and (ii) the business
of CardioCeuticals LLC and [the mail order business] only through September 30,
2006.
11. COMPANY PROPERTY
(a) Any products, patents, inventions, discoveries, applications, processes
or designs, devised, planned, applied, created, discovered or invented by
Employee in the course of Employee's employment under this Agreement and which
pertain to any aspect of the Company's or its respective subsidiaries' or
affiliates' businesses shall be the sole and absolute property of the Company,
and Employee shall make prompt report thereof to the Company and promptly
execute any and all documents reasonably requested to assure the Company the
full and complete ownership thereof.
(b) All records, files, lists, including computer generated lists,
drawings, documents, equipment and similar items relating to the Company's
business which Employee shall prepare or receive from the Company shall remain
the Company's sole and exclusive property. Upon the expiration of this
Agreement, or, if earlier, upon demand by the Company, Employee shall promptly
return to the Company all property of the Company in her possession. Employee
further represents that she will not copy or cause to be copied, print out or
cause to be printed out any software, documents or other materials originating
with or belonging to the Company. Employee covenants that, upon termination of
her employment with the Company, she will not retain in her possession any such
software, documents or other materials.
12. REMEDY
It is mutually understood and agreed that Employee's services are special,
unique, unusual, extraordinary and of an intellectual character giving them a
peculiar value, the loss of which cannot be reasonably or adequately compensated
in damages in an action at law. Accordingly, in the event of any breach of this
Agreement by Employee, including, but not limited to, the breach of the
non-disclosure, non-solicitation and non-compete clauses under Paragraphs 10 and
11 hereof, the Company shall be entitled to equitable relief by way of
injunction or otherwise in addition to damages the Company may be entitled to
recover. Nothing herein shall be deemed to restrict any remedy available to
Employee for breach of the Agreement by the Company.
13. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE AND THE COMPANY
(a) In order to induce the Company to enter into this Agreement, Employee
hereby represents and warrants to the Company as follows: (i) Employee has the
legal capacity and unrestricted right to execute and deliver this Agreement once
to perform all of her obligations hereunder: (ii) the execution and delivery of
this Agreement by Employee and the performance of her obligations hereunder will
not violate or be in conflict with any fiduciary or other duty, instrument,
agreement, document, arrangement or other understanding to which Employee is a
party or by which she is or may be bound or subject; and (iii) Employee is not a
party to any instrument, agreement, document, arrangement or other understanding
with any person
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(other than the Company) requiring or restricting the use or disclosure of any
Confidential Information or the provision of any employment, consulting or other
services.
(b) The Company hereby represents and warrants to Employee, as follows: (i)
the execution, delivery, and performance of this Agreement has been duly
authorized by all necessary corporate action of the Company; and (ii) this
Agreement constitutes the valid and binding obligation of the Company,
enforceable in accordance with its terms, except that such enforcement may be
subject to any bankruptcy, insolvency, reorganization, fraudulent transfer or
other laws, now or hereafter in effect, relating to or limiting creditors'
rights generally.
14. NOTICES
All notices given hereunder shall be in writing and shall be deemed upon
delivery or attempted delivery, if sent by registered or certified mail, return
receipt requested, or via overnight courier addressed to Employee at her address
set forth on the first page of this Agreement, or to the Company at its address
set forth on the first page of this Agreement, Attention: Chief Executive
Officer, with a copy to Meritz & Xxxxx LLP, 0000 X Xxxxxx, XX, Xxxxxxxxxx, XX
00000, Attention: Xxxxxxxx X. Xxxxx, or at such address as such party shall have
designated by a notice given in accordance with this Paragraph 14, or when
actually received by the party for whom intended, if sent by any other means.
15. ENTIRE AGREEMENT
This Agreement constitutes the entire understanding of the parties with
respect to its subject matter and no change, alteration or modification hereof
may be made except in writing signed by the parties hereto. Any prior or other
agreements, promises, negotiations or representations not expressly set forth in
this Agreement are of no force or effect.
16. SEVERABILITY
If any provision of this Agreement shall be unenforceable under any
applicable law, then notwithstanding such unenforceability, the remainder of
this Agreement shall continue in full force and effect.
17. WAIVERS, MODIFICATIONS, ETC.
No amendment, modification or waiver of any provision of this Agreement
shall be effective unless the same shall be in writing and signed by each of the
parties hereto, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
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18. ASSIGNMENT
Neither this Agreement, nor any of Employee's rights, powers, duties or
obligations hereunder, may be assigned by Employee. This Agreement shall be
binding upon and inure to the benefit of Employee and her heirs and legal
representatives and the Company and its successors and assigns. Successors of
the Company shall include, without limitation, any corporation or corporations
acquiring, directly or indirectly, all or substantially all of the assets of the
Company, whether by merger, consolidation, purchase, lease or otherwise, and
such successor shall thereafter be deemed "the Company" for the purpose hereof.
19. APPLICABLE LAW
This Agreement shall be deemed to have been made, drafted, negotiated and
the transactions contemplated hereby consummated and fully performed in the
State of New York and shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law rules
thereof. Nothing contained in this Agreement shall be construed so as to require
the commission of any act contrary to law, and whenever there is any conflict
between any provision of this Agreement and any statute, law, ordinance, order
or regulation, contrary to which the parties hereto have no legal right to
contract, the latter shall prevail, but in such event any provision of this
Agreement so affected shall be curtailed and limited only to the extent
necessary to bring it within the legal requirements.
20. JURISDICTION AND VENUE
It is hereby irrevocably agreed that all actions, suits or proceedings
between the Company and Employee arising out of, in connection with or relating
to this Agreement shall be exclusively heard and determined in, and the parties
do hereby irrevocably submit to the exclusive jurisdiction of the Supreme Court
of New York in Suffolk County, New York or the U.S. Federal District Court of
the Eastern District of New York. The parties also agree that a final judgment
in any such action, suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by law. The parties hereby unconditionally waive any objection which either of
them may now or hereafter have to the venue of any such action, suit or
proceeding brought in any of the aforesaid courts, and waive any claim that any
such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.
21. FULL UNDERSTANDING
Employee represents and agrees that she fully understands her right to
discuss all aspects of this Agreement with her private attorney, that to the
extent, if any, that she desired, she availed herself of this right, that she
has carefully read and fully understands all of the provisions of this
Agreement, that she is competent to execute this Agreement, that her willingness
to execute this Agreement has not been obtained by any duress and that she
freely and voluntarily enters into it, and that she has read this document in
its entirety and fully understands the meaning, intent and consequences of this
document which is that it constitutes an agreement of employment.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
GENOTEC ACQUISITION CORP. XXXXX XXXXXXXX
By:___________________________ By:_________________________
Xxxx Xxxxxx
President and Chief Executive Officer
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ATTACHMENT A
An annual cash bonus will be paid to the Employee based upon the gross profit of
the Company. The amount paid in the aggregate to the Chief Executive Officer,
Vice President-Product Development, and Vice President - Administration, as a
group, will be based on the gross profit of the Company. The formula for such
bonus shall be as follows:
Year Bonus
---- -----
Balance of 2006 3% of gross profit in excess of $375,000
2007 3% of gross profit in excess of $400,000
2008 3% of gross profit in excess of $450,000
Balance of 2009 (through
September 30, 2009) 3% of gross income in excess of $500,000
In the event that Employee's contract is not renewed subsequent to the
Expiration Date, Employee shall be entitled to a payment equal to 3% of the
gross profit generated during the twelve (12) month period following the
Expiration Date. This shall be a one-time payment, payable at the Company's
discretion in either cash and/or stock.
Payment of the bonus will be made at such time that the Company has sufficient
cash reserves to make such payment. It is expressly understood that MM2 will not
provide funds to the Company for the purpose of paying these bonuses.
The annual bonus pool as noted above shall be paid 49% to Xxxxxx Xxxxxxxxxx, 32%
to Xxxxxx Xxxxxxxx, and 19% to Xxxxx Xxxxxxxx.
In addition, the Chief Executive Officer, Vice President-Product Development,
and Vice President - Administration, as a group, shall receive an additional
cash bonus equal to fifteen percent (15%) of the annual income, in excess of
$30,000, earned from the sales of Misoprostol and the "pain management patch',
FDA approved, manufactured by Lavipharm Laboratories, Inc. This commission shall
be paid for a period of ten 910) years from the date hereof. This additional
annual cash bonus shall be paid 49% to Xxxxxx Xxxxxxxxxx, 32% to Xxxxxx
Xxxxxxxx, and 19% to Xxxxx Xxxxxxxx.
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