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EXHIBIT 10.11
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement"), which for identification
purposes only is dated the 7th day of February 2000, is entered into by and
between BIOSHIELD TECHNOLOGIES, INC., a Georgia corporation (the "Employer") and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual residing in Glen Ellyn, Illinois (the
"Employee").
WHEREAS, the Employer is in the antimicrobial and biostatic products
development business (the "Business"); and
WHEREAS, Employer desires to hire Employee and Employee desires to be
employed by the Employer in accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and promises contained herein, it is agreed by the parties as
follows:
SECTION 1. Term. This Agreement commences effective on February 7,
2000, and shall continue until terminated by either party. Termination may be
with or without any reason whatsoever, upon giving thirty (30) days written
notice by one party to another. Notwithstanding the foregoing to the contrary,
termination shall be immediate upon any of the following events:
(A) Upon the death of Employee.
(B) By the Employer notifying the Employee in writing that the
Agreement is being terminated for cause. A termination for cause is
hereby defined as a termination as a result of theft or
misappropriation of Employer's assets by Employee, or gross negligence
of Employee pertaining to the conduct of business on behalf of
Employer. The disability of Employee shall not be considered cause.
(C) This Agreement will automatically terminate on August 31, 2003, if
not previously terminated pursuant to other provisions hereof.
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SECTION 2. Duties of Employee. As a full-time employee of Employer,
Employee's primary responsibilities shall be to direct the distribution, sales
and marketing of Employer's products (the "Products") through retail trade
channels primarily in North America.
SECTION 3. Base Salary. Employee shall be paid a "Base Salary" of One
Hundred Seventy-Five Thousand Dollars ($175,000.00) per year, payable on the
same periodic basis as other full-time employees of Employer, as they may be
paid by Employer from time to time; provided, however, that said Base Salary
shall be paid at least on a monthly basis in arrears. In the event that this
Agreement is terminated, then Employee's Base Salary even though stated in
annual terms, shall be prorated through the date of termination. The Employee's
Base Salary shall be increased on an annual basis in an amount at least equal to
the Consumer Price Index cost of living increase for all wage earners in the
Chicago Metropolitan Area.
SECTION 4. Cash Bonus. In the event that Employee remains an employee
of the Employer beyond August 31, 2000, then the Employer shall promptly adopt a
reasonable bonus program which will provide Employee the opportunity to earn
cash bonuses of up to one-half (1/2) of his Base Salary in any one (1) year
period.
SECTION 5. Stock Options and Departure Fee. As an inducement to
Employee accepting employment with Employer, Employer agrees to grant to
Employee the option to purchase common stock of Employer; and in the event that
certain objectives are met, then Employer agrees to grant to Employee additional
options to purchase common stock of Employer. Additionally, the parties have
agreed that if the Employee's employment with Employer terminates prior to
September 1, 2000, then Employer shall be obligated to pay to Employee a fee
(the "Departure Fee").(1) Sections 5.01 through 5.05 hereof detail the
understanding of Employer and Employee as to the granting of stock options and
the payment of the Departure Fee.
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(1) The term Departure Fee is defined and discussed at Section 5.05 hereof.
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SECTION 5.01. Definitions. For purposes of this Agreement, the
following terms are defined:
(A) "Stock" - The common stock of Employer.
(B) "Option" - The right to purchase Stock of the Employer.
(C) "Strike Price" - The price which Employee shall pay for each share
of Stock if Employee exercises any Option. The parties agree that the
Strike Price shall be the price at which the Stock closes at for public
trading, as measured on February 7, 2000, which the parties acknowledge
is $8.75 per share.
(D) "Exercise Date" - January 31, 2005.
(E) "Expired Option" - An Option which is not exercised on or before
the Exercise Date.
(F) "Primary Objective" - The primary objective shall be satisfied, if
during the term of this Agreement; (1) A National Sales Organization
for the Employer is formed which includes six (6) contract Regional
Sales Managers or such lesser amount as Employer may decide; and (2)
The Employee establishes on behalf of Employer a National Broker
Organization which reports to the various Regional Sales Managers.
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(G) "Secondary Objective" - The Secondary Objective shall be satisfied
if during the term of this Agreement; (1) Employee develops and
executes a retail distribution strategy, which includes shelf and
pricing objectives; (2) Employee makes Product presentations to at
least twenty (20) accounts which shall include Product presentations to
Kmart, Target, Kroger-Cincinnati, Albertson's-Boise, and
Safeway-Corporate; (3) Employee establishes a fact-based sales
presentation supporting Employer's technology which will formulate a
rationale for customers to consider another brand and/or private label
items in the category; (4) On the condition that Employer consents,
Employee shall assist Employer in hiring a marketing consultant so that
Employer can begin formulating the foundation for the division's
business plan; and (5) The Employee will provide to the Employer by
market and by account the amount of slotting dollars required for
branded product distribution and the Employee will use reasonable
efforts to negotiate down the amount of slotting dollars required for
branded product distribution.
(H) "Sixth Month Review" - A meeting between Employer and Employee
wherein the parties shall review the Employee's performance and such
other factors as the parties deem appropriate. The Sixth Month Review
shall take place on or about August 1, 2000.
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SECTION 5.02. Initial Stock Option. Employer hereby grants to Employee
an Option to purchase up to One Hundred Fifty Thousand (150,000) shares of Stock
(the "Initial Stock Option") upon the following terms and conditions:
(A) The Employee shall become vested in the Initial Stock
Option according to the following schedule:
(I) Subject to the provisions of Section 5.02 (a)(iv)
below, if Employee is employed by Employer on August
1, 2001, then Employee shall become vested in
one-third (1/3) of the Initial Stock Option, thereby
giving him the right to acquire Fifty Thousand
(50,000) shares of Stock.
(II) Subject to the provisions of Section 5.02
(a)(iv) below, if Employee is employed by Employer on
August 1, 2002, then Employee shall become vested in
an additional one-third (1/3) of the Initial Stock
Option, thereby giving him the right to acquire an
additional Fifty Thousand (50,000) shares of Stock.
(III) Subject to the provisions of Section
5.02(a)(iv) below, if Employee is employed by
Employer on August 1, 2003, then Employee shall
become vested in the final one-third (1/3) of the
Initial Stock Option, thereby giving Employee the
right to acquire an additional Fifty Thousand
(50,000) shares of Stock.
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(IV) If either (1) Employee dies prior to September
1, 2000, (2) Employer terminates Employee's
employment with or without cause prior to September
1, 2000, or, (3) Employee's employment is terminated
effective as of the Early Termination Date as
provided for in Section 5.05 hereof; then Employee
shall not be vested in any of the Initial Stock
Option, and the entire Initial Stock Option shall
lapse. If after August 31, 2000 either, (1) Employee
voluntarily terminates his employment with Employer,
or (2) Employer terminates Employee's employment for
cause, then to the extent that any of the Initial
Stock Option shares are not vested, then Employee's
Option to purchase the non-vested shares shall lapse.
However, if at any time after August 31, 2000, but
prior to Employee becoming vested in the entire
Initial Stock Option, either Employee dies or
Employer terminates Employee's employment without
cause, then Employee shall become immediately vested
in the entire Initial Stock Option.
(B) Whenever Employee is vested pertaining to any portion of
the Initial Stock Option, then Employee may exercise his
Option to purchase such shares, regardless of Employee's
employment status
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as of the date that the Option is exercised. The Option must
be exercised on or before the Exercise Date. If the Option is
not exercised on or before the Exercise Date, then the Option
shall become an Expired Option and the Option shall lapse. If
an Option is timely exercised, then the price per share shall
be the Strike Price.
SECTION 5.03. Primary Objective Stock Option. If the Primary Objective
is satisfied, then the Employee shall automatically be granted an Option to
purchase Twenty-Five Thousand (25,000) shares of Stock (the "Primary Objective
Stock Option") at the Strike Price, regardless of Employee's employment status
as of the date that the Option is exercised. The Primary Objective Stock Option
shall be exercised by Employee on or before the Exercise Date. If the Primary
Objective Stock Option is not exercised by Employee on or before the Exercise
Date, then it shall be considered an Expired Option and it shall lapse.
SECTION 5.04. Secondary Objective Stock Option. If the Secondary
Objective is satisfied, then the Employee shall automatically be granted an
Option to purchase Twenty-Five Thousand shares of Stock (the "Secondary
Objective Stock Option") at the Strike Price, regardless of Employee's
employment status as of the date that the Option is exercised. The Secondary
Objective Stock Option shall be exercised by Employee on or before the Exercise
Date. If the Secondary Objective Stock Option is not exercised by Employee on or
before the Exercise Date, then the Secondary Objective Stock Option shall be
considered an Expired Option and it shall lapse.
SECTION 5.05. The Departure Fee. The parties contemplate that on
approximately August 1, 2000, Employer and Employee shall hold the Six Month
Review. At that time, the parties shall decide whether or not to continue this
Agreement. If the parties cannot mutually agree to continue this Agreement, then
this Agreement shall automatically terminate effective August 31,
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2000 (the "Early Termination Date"), without the requirement of thirty (30) days
written notice as required in Section 1 hereof. If this Agreement is terminated
(A) as of the Early Termination Date, or (B) by Employer without cause on or
before the Early Termination Date, then Employer shall owe to Employee the
"Departure Fee" which shall be Eighty-Seven Thousand Five Hundred Dollars
($87,500.00). The Departure Fee shall be payable to Employee thirty (30) days
after employment termination. If Employee is paid the Departure Fee, then both
the Primary Objective Stock Option (to the extent earned) and the Secondary
Objective Stock Option (to the extent earned) shall be rescinded and may not be
exercised by Employee. Alternatively, Employee can elect within fifteen (15)
days after employment termination to waive the Departure Fee. If Employee elects
to waive the Departure Fee, then Employee's rights in and to the Primary
Objective Stock Option and the Secondary Objective Stock Option shall not be
rescinded and any such rights, pursuant to such Options, shall remain in full
force and effect.
SECTION 6. Severance Pay. The parties agree that in the event that
Employee's employment is terminated for any reason after the Early Termination
Date,(2) except in the event of (A) a termination of Employee for cause, (B)
Employee's death, or (C) Employee's voluntary termination; then Employee shall
be paid "Severance Pay". The Severance Pay shall be an amount equal to one (1)
year of Employee's Base Salary, as Base Salary is measured as of the date of
termination. If Employee's employment is terminated on or before the Early
Termination Date, then there shall not be any Severance Pay. Severance Pay may
be payable by Employer to Employee in twelve (12) equal consecutive monthly
installments commencing no later than thirty (30) days after the date of
termination. In the event that Employee breaches the provisions of Section 8(a)
hereof, Employer may discontinue paying Severance Pay to Employee as liquidated
damages.
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(2) The term Early Termination Date is defined at Section 5.05 hereof as
August 31, 2000.
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SECTION 7. Fringe Benefits. As additional consideration for the
services to be rendered by Employee to Employer, during the term hereof Employer
shall provide those fringe benefits which are detailed as follows:
(A) Expenses. Employer agrees to pay for all ordinary and necessary
business related expenses (in accordance with Employer's policies)
incurred by Employee in the performance of his duties as an employee of
Employer. Employer and Employee agree that ordinary and necessary
business related expenses shall include, but are not limited to, all
reasonable business expenses for each office, Employee's travel
(including but not limited to travel between Chicago and Georgia) and
parking, Employee's hotel and meals while outside of the Chicago
Metropolitan Area and telephone expense. Whenever Employee is outside
of the Chicago Metropolitan area, Employer shall provide Employee with
a per diem for meals which shall be Ten Dollars ($10.00) for breakfast,
Twelve Dollars ($12.00) for lunch and Twenty-Five Dollars ($25.00) for
dinner, plus the full amount of meals incurred while entertaining
customers and/or prospects.
(B) During the term of this Agreement, Employee shall be entitled to
three (3) weeks of vacation during each calendar year, on a
non-cumulative basis.
(C) The Employee shall generally be entitled to participate in or
receive health, long-term disability insurance, and similar benefits as
the Employer provides from time to time to its executives.
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SECTION 8. Restrictive Covenants. To induce Employer to execute,
deliver and perform this Agreement, Employee agrees as follows:
(A) Interference with Business. During the term of this
Agreement, and for a period of one (1) year after the
termination of this Agreement, neither Employee, nor anyone
operating at Employee's direction or for Employee's benefit,
shall, on their own account, or as an employee, consultant,
partner, member, manager, owner, officer, director or
shareholder of any other person, firm, partnership, limited
liability company or corporation, or in any other capacity, in
any way, directly or indirectly, solicit, divert, take away or
interfere with the Business of Employer.
(B) Non-Disclosure. During the entire term of this Agreement,
and for a period of one (1) year after the termination of this
Agreement, Employee shall not disclose to others nor shall
Employee use for Employee's financial gain any confidential
information pertaining to Employer's Business concepts,
pricing, designs, plans, know-how, trade secrets, software,
data or other technical items, marketing or other business
information which is the property of Employer, pertaining to
the operation of Employer's Business.
(C) Relief and Remedy. Employee acknowledges and agrees that:
(I) The restrictive covenants contained in
Subsections (a) and (b) of this Section are
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reasonable and necessary to protect Employer's
legitimate business interests;
(II) The restrictive covenants contained in
Subsections (a) and (b) of this Section are
reasonable and necessary to protect Employer's trade
secrets and confidential information;
(III) The periods of time provided herein are the
minimum periods of time necessary to protect Employer
and its successors and assigns, from unauthorized use
or disclosure of confidential information and
unauthorized use of any goodwill associated with
Employer's business. Employee acknowledges and agrees
that money damages alone cannot compensate Employer,
its successors or assigns, in the event of a breach
or violation of the noninterference or nondisclosure
covenants contained in this Section, and that
injunctive relief is essential for the protection of
Employer and its successors and assigns. Accordingly,
Employee agrees and consents that in the case of any
breach or violation of this Section, Employer may
have such injunctive relief, without bond but upon
due notice. No waiver of any breach or violation of
any of the provisions of this Section shall be
implied from
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forbearance or failure by Employer to take action
thereon. To the extent that any provision of this
Section is deemed unenforceable by virtue of its
scope in terms of length of time or nature of
restriction, or as to any one (1) or more of the
parties, but may be made enforceable by limitation
thereof, the parties agree that the same shall,
nevertheless, be enforceable to the fullest extent
permissible under the laws and public policies
applied in such jurisdiction in which enforcement is
sought.
(D) Rights Cumulative. The rights and remedies granted to
Employer in this Agreement in the event of default are
cumulative, and the exercise of any right or remedy, including
the right to money damages, shall be without prejudice to the
enforcement of any other right or remedy authorized by law or
this Agreement.
(E) Costs. In the event of any violation by Employee of the
restrictive covenants contained herein, and on the condition
that Employer prevails in its claim against Employee for
relief, then Employee agrees to pay Employer, an amount equal
to the aggregate of its reasonable attorneys' fees and court
costs.
SECTION 9. Place of Employment. During the term of this
Agreement, the Employer's headquarters shall be located in the Atlanta Georgia
area. However, Employee shall maintain a satellite office in his home in Glen
Ellyn, Illinois.
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SECTION 10. Termination Obligations. At the time of his resignation or
termination from the Employer, the Employee shall promptly return to the
Employer all personal property, both tangible and intangible, furnished to or
prepared by the Employee in the course of or incident to his employment, the
Employee hereby acknowledging and agreeing that such property belongs to the
Employer, such that following termination the Employee will not retain any
written or other tangible material containing any proprietary information of the
Employer. Personal property includes, without limitation, all computers,
cellular phones, credit cards of Employer, access keys, books, manuals, records,
reports, notes, contracts, lists and other documents or materials, or copies
thereof (including computer files) and all other proprietary information
relating to the Business of the Employer.
SECTION 11. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties, their heirs, legatees, executors,
administrators, successors, or assigns.
SECTION 12. Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter of Employee's
employment. There are no restrictions, agreements, promises, warranties,
covenants or undertakings other than those expressly set forth herein or
therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to the subject matter hereof including the
provisions of any employee handbook or manual.
SECTION 13. Assignment. Employee shall not have the right to assign,
delegate or subcontract any or all of his rights and/or responsibilities under
this Agreement, without the prior written consent of Employer.
SECTION 14. Amendments. This Agreement may be amended only by a written
instrument duly executed by all of the parties hereto, or their permitted
successors and assigns.
SECTION 15. Waiver. No waiver of any breach or default hereunder shall
be considered valid unless in writing and signed by the party giving such
waiver, and no such waiver shall be deemed a waiver of any subsequent breach or
default of the same or similar nature.
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SECTION 16. Headings. The headings contained herein are for the
convenience of the parties only and are not intended to define or limit the
contents of said paragraphs.
SECTION 17. Governing Law. This Agreement and all amendments hereto
shall be governed by and construed in accordance with the laws of the State of
Georgia applicable to contracts made and to be performed therein.
SECTION 18. Notices. All Notices, claims, certificates, requests,
demands and other communications pursuant to this Agreement shall be in writing.
All Notices shall be given by either (A) personal delivery; (B) certified or
registered mail, postage prepaid, return receipt requested; or (C) for overnight
delivery by a nationally recognized overnight mail service, as follows:
if to Employer, to: BioShield Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
with a copy to: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP
1600 ▇▇▇▇▇▇▇ Building
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
if to Employee, to: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, Ltd.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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or to such other address as the party to whom Notice is to be given previously
may have furnished to the other party by Notice in the manner set forth in this
Section. If the Notice is served by personal delivery or by overnight delivery,
then the Notice shall be deemed served upon delivery. If the Notice is served by
certified mail, then the Notice shall be deemed served on the calendar day
following the deposit of the Notice by certified mail.
SECTION 19. Severability. If any term, condition or provision of this
Agreement shall be declared invalid or unenforceable, the remainder of the
Agreement, other than such term, condition or provision, shall not be affected
thereby and shall remain in full force and effect and shall be valid and
enforceable to the fullest extent permitted by law.
SECTION 20. Jurisdiction and Venue. The parties agree that the Federal
or State courts located in the State of Georgia have personal jurisdiction over
the parties to this Agreement. Furthermore, the parties stipulate that the State
of Georgia shall be the appropriate venue and proper location for the
determination of all disputes arising under this Agreement.
SECTION 21. Arbitration. Absent any irreparable injury being suffered
by the Employer entitling the Employer to seek injunctive relief against
Employee pursuant to this Agreement, in the event there shall be a dispute among
the parties arising out of or relating to this Agreement, or the breach thereof,
the parties agree that such dispute shall be resolved by final and binding
arbitration in Atlanta, Georgia under the Rules of the American Arbitration
Association. Any award issued as a result of such arbitration shall be final and
binding between the parties thereto, and shall be enforceable by any court
having jurisdiction over the party against whom enforcement is sought. The fees
and expenses relating to such arbitration (with the exception of the Employer's
attorneys' fees and the Employee's attorneys' fees, if any) shall be shared
equally by the Employer and the Employee.
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SECTION 22. Referrals. If a future employer of Employee inquires into
this relationship between Employer and Employee, the response of Employer must
be that Employee was a consultant and completed his assignment successfully.
SECTION 23. Release. As a condition of Employer paying to Employee the
Departure Fee or Severance Pay, the Employer may require that the Employee
execute a release acceptable to the Employer of all liability of the Employer,
and its directors, officers, shareholders, employees, agents and attorneys, to
the Employee in connection with or arising out of his employment with the
Employer. Such release shall not include any release of Employer's obligations
to pay Base Salary, Severance Pay, or the Departure Fee; nor shall the release
alter any of Employer's obligations to Employee pertaining to the Initial Stock
Option, the Primary Objective Stock Option or the Secondary Objective Stock
Option.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the dates appearing below their signatures.
BIOSHIELD TECHNOLOGIES, INC.
a Georgia corporation /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Its Date Signed:
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Date Signed
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