AMENDED & RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.16
AMENDED
& RESTATED EMPLOYMENT
AGREEMENT
AMENDED
& RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), made and entered into in
Danbury, CT, by and between Xxxxxx Products Corp. (the “Company”), a Nevada
corporation with its principal place of business at 00 Xxx Xxxxxxxxx Xxxx,
Xxxxx
00, Xxxxxxx, XX, and Xxxxxxx Kouninis (the “Executive”), effective as of the 2nd
day of April, 2007.
WHEREAS,
the operations of the Company are a complex matter requiring direction and
leadership in a variety of arenas, including financial, strategic planning,
regulatory, community relations and others;
WHEREAS,
the Executive is possessed of certain experience and expertise that qualify
him
to provide the direction and leadership required by the Company; and
WHEREAS,
subject to the terms and conditions set forth in this Agreement, the Company
therefore wishes to employ the Executive as its Chief Financial Officer and
the
Executive wishes to accept such employment;
NOW,
THEREFORE, in consideration of the mutual covenants and promises hereinafter
set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and the Executive hereby agree
as
follows:
1. Employment.
Subject
to the terms and conditions set forth in this Agreement, the Company hereby
offers and the Executive hereby accepts employment.
2. Term.
Subject
to earlier termination as hereafter provided, this Agreement shall have an
original term of two (2) years commencing on the effective date hereof and
shall
be automatically extended thereafter for successive terms of one (1) year each,
unless either party provides notice to the other at least thirty (30) days
prior
to the expiration of the original or any extension term that the Agreement
is
not to be extended. The term of this Agreement, as from time to time extended
or
renewed, is hereafter referred to as “the term of this Agreement” or “the term
hereof.”
3. Title
and Duties.
Executive agrees during the term of this Agreement to devote substantially
all
of his working time, attention, skill and efforts during normal working hours
to
the performance of his duties, faithfully and to the best of his abilities
and
in accordance with the supervision and direction of the Chief Executive Officer
of the Company (the “CEO”). The Executive shall serve as Chief Financial Officer
(“CFO”) and shall have such other duties as the CEO, in his discretion, may
assign to the Executive from time to time, such additional duties to be
commensurate with those typically assigned to a CFO.
4. Compensation
and Benefits.
As
compensation for all services performed by the Executive under and during the
term hereof and subject to performance of the Executive’s duties and of the
obligations of the Executive to the Company, pursuant to this Agreement or
otherwise:
(a) Base
Salary.
During
the term hereof, the Company shall pay the Executive a salary at the rate of
One
Hundred Eighty-Five Thousand Dollars ($185,000) per annum (“Base Salary”),
payable in accordance with the payroll practices of the Company for its
executives. Executive’s Base Salary may be subject to increase by the Board in
its sole discretion, which Base Salary shall be reviewed on at least an annual
basis. Effective as of the date of any such increase, the Base Salary as so
increased shall be considered the new Base Salary for all purposes under this
Agreement and may not thereafter be reduced.
(b) Bonus
Compensation.
Executive shall be eligible to be considered for a bonus annually during the
term hereof. The amount of such bonus, if any, shall be determined by the CEO.
In addition, Executive shall be entitled to a bonus (the “Transaction Bonus”) in
the amount of $15,000 in the event the Company consummates a financing which
yields gross proceeds to the Company of at least Three Million Dollars
($3,000,000.00) excluding any proceeds arising from the Company’s bridge
financing. The Transaction Bonus shall be payable to Executive within fifteen
(15) days following consummation of such financing provided Executive is an
employee of the Company at the time of the first to occur of the issuance of
a
binding commitment for such financing or the consummation of such
financing.
(c) Vacations.
During
the term hereof, the Executive shall be entitled to twenty two (22) days of
vacation per calendar year, to be taken at such times and intervals as shall
be
determined by the Executive, subject to the reasonable business needs of the
Company. Vacation shall otherwise be governed by the policies of the Company,
as
in effect from time to time.
(d) Other Benefits.
During
the term hereof and subject to any contribution generally required of Executives
of the Company, the Executive shall be entitled to participate in any and all
employee benefit plans from time to time in effect for Executives of the Company
generally. Such participation shall be subject to the terms of the applicable
plan documents and generally applicable Company policies. The Company may alter,
modify, add to or delete its employee benefit plans at any time as it, in its
sole judgment, determines to be appropriate, without recourse by the Executive.
The Company also agrees to provide the Executive with short term and long term
disability benefits. In the event that the Company terminates its group health
insurance plan, the Company agrees to reimburse the Executive for the cost
of
obtaining comparable health insurance family coverage for Executive and his
immediate family during the term of this Agreement.
(e)
Business
Expenses.
The
Company shall pay or reimburse the Executive for all reasonable business
expenses incurred or paid by the Executive in the performance of his duties
and
responsibilities hereunder, subject to such reasonable substantiation and
documentation in accordance with the Company’s travel and expense
policy.
(f) Company
Automobile.
The
Company will provide the Executive with a Company automobile during the term
hereof, and will reimburse the Executive for all reasonable automobile
expenses.
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5. Termination
of Employment.
Notwithstanding the provisions of Section 2 hereof, the Executive’s employment
hereunder shall terminate prior to the expiration of the term under the
following circumstances:
(a) Death.
In the
event of the Executive’s death during the term hereof, the Executive’s
employment hereunder shall immediately and automatically terminate. In such
event, the Company shall pay to the Executive’s designated beneficiary or, if no
beneficiary has been designated by the Executive, to his estate (i) the Base
Salary earned but not paid through the date of termination, (ii) any vacation
time earned but not used through the date of termination, (iii) any business
expenses incurred by the Executive but un-reimbursed on the date of termination,
provided that such expenses and required substantiation and documentation are
submitted within sixty (60) days of termination and that such expenses are
reimbursable in accordance with Sections 4(e) and 4(f) above, and (iv) any
earned but unpaid bonus owed to the Executive (all of the foregoing, “Final
Compensation”) plus a lump sum amount equal to his Base Salary at the rate in
effect on the date of termination of employment for a period of six (6) months,
which lump sum amount shall be payable by the Company to the Executive on or
before the seventh day following his termination of employment. Except for
Executive’s rights as a stockholder of the Company or under any Company stock
warrants or stock options (whether such warrants or options are vested or
unvested), the Company shall have no further obligation to the Executive
hereunder.
(b) Disability.
The
Company may terminate the Executive’s employment hereunder, upon notice to the
Executive, in the event that the Executive becomes disabled during his
employment hereunder through any illness, injury, accident or condition of
either a physical or psychological nature and, as a result, is unable to perform
substantially all of his duties and responsibilities hereunder, with or without
reasonable accommodation, for one hundred twenty (120) days during any period
of
three hundred and sixty-five (365) consecutive calendar days. In the event
of
such termination, the Company shall (i) pay to the Executive his Final
Compensation, (ii) pay to the Executive a lump sum amount equal to his Base
Salary at the rate in effect on the date of termination of employment for a
period of six (6) months, which lump sum amount shall be payable by the Company
to the Executive on or before the seventh day following his termination of
employment, and (iii) pay any amounts payable and/or owing by the Company to
the
Executive for short and long term disability benefits; provided, however, that
the amount of Base Salary payable during the six (6) month period following
the
Executive’s termination of employment will be reduced by the amount of any short
and long term disability benefits payable and paid to the Executive for such
six
(6) month period. The provisions of this Section 5(b) shall not affect
Executive’s rights as a stockholder of the Company or under any Company stock
warrants or stock options (whether such warrants or options are vested or
unvested).
(c) By
the
Company for Cause.
The
Company may terminate the Executive’s employment hereunder for Cause at any time
upon notice to the Executive setting forth in reasonable detail the nature
of
such Cause. The following, as determined by the Chief Executive Officer of
the
Company in his reasonable judgment, shall constitute Cause for
termination:
(i) The
Executive’s conviction of a felony or conviction of any other crime involving
dishonesty or moral turpitude (which specifically excludes all traffic
violations);
(ii) The
Executive’s theft, embezzlement, misappropriation of or intentional and
malicious infliction of damage to the Company’s business or
property;
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(iii) The
Executive’s gross dereliction of duties or gross negligence not cured by the
Executive within twenty (20) days following written notice from the Company
specifying in detail the nature of the breach; or
(iv) The
Executive’s breach of any material provision of this Agreement not cured by the
Executive within twenty (20) days following written notice from the Company
specifying in detail the nature of the breach.
Upon
the
giving of notice of termination of the Executive’s employment hereunder for
Cause, the Company shall have no further obligation to the Executive, other
than
for Final Compensation, provided that this provisions of this Section 5(c)
shall
not affect Executive’s rights as a stockholder of the Company or under any
Company stock warrants or stock options (whether such warrants or options are
vested or unvested).
(d) By
the
Company Other than for Cause.
The
Company may terminate the Executive’s employment hereunder other than for Cause
at any time upon notice to the Executive. In the event of such termination,
in
addition to Final Compensation and provided that no benefits greater than those
set forth herein are payable to the Executive under a separate severance
agreement or an executive severance plan as a result of such termination, then
(i) the Company shall pay the Executive, on or before the seventh day following
his termination of employment, a lump sum amount equal to his Base Salary at
the
rate in effect on the date of termination for a period of six (6) months, and
(ii) for a period of six (6) months, the Company shall waive the premium
payments for continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), and shall pay the full cost of
the Executive’s group family health insurance coverage. Following the expiration
of such six (6) month period, the Executive shall pay the full cost of such
COBRA continuation coverage for the remainder of the period for which such
COBRA
continuation coverage remains available. The Company shall also accelerate
the
vesting and exercisability of all stock options and warrants previously granted
by the Company to the Executive effective as of the date of the Executive’s
termination of employment other than for Cause as to 100% of such stock options
and warrants that would otherwise remain unvested as of such date. Any
obligation of the Company to the Executive hereunder or as provided in Section
5(e) below (other than the obligation to pay Final Compensation) is conditioned,
however, upon the Executive signing a mutually acceptable release of claims.
(e)
By
the
Executive for Good Reason.
The
Executive may terminate his employment hereunder for Good Reason, upon notice
to
the Company setting forth in reasonable detail the nature of such Good Reason.
The following shall constitute Good Reason for termination by the
Executive:
(i)
Failure
of the Company to continue the Executive in the position of Chief Financial
Officer;
(ii) Material
diminution in the nature or scope of the Executive’s responsibilities, duties or
authority, or a request by the Company, whether written, verbal or implied,
to
engage in unlawful behavior, including but not limited to violating SEC or
NASDAQ rules or regulations;
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(iii) Material
failure of the Company to provide the Executive the compensation and benefits
in
accordance with the terms of Section 4, excluding an inadvertent failure which
is cured within ten (10) business days following notice from the Executive
specifying in detail the nature of such failure;
(iv) Relocation
of the Company's principal financial office or the Executive or a majority
of
the employees comprising such office to a location more than 50 miles from
the
Company's principal financial office on the effective date of this Agreement;
provided, however, that a relocation of the Company's principal financial office
or the Executive or a majority of the employees comprising such office to a
location within 50 miles of the Executive’s principal residence shall be deemed
not to be an event of Good Reason hereunder; it being understood that, as of
the
date of this Agreement, for purposes of this clause (iv) the Company's principal
financial office shall be in Dover, New Hampshire;
(v) a
material diminution in the authority, duties or responsibilities of the person
to whom the Executive is required to report;
(vi) any
other
action that constitutes a material breach of this Agreement; and
(vii) the
delivery by the Company to the Executive of a notice of the Company’s intent not
to extend the term of this Agreement pursuant to Section 2;
provided,
however, that the Executive’s resignation as a result of any of the foregoing
events shall not be deemed a Good Reason resignation unless (i) the Executive
gives written notice of any such event to the President of the Company or the
CEO (“Good Reason Notice”) and allows the Company at least thirty (30) days (or
ten (10) business days of an event or condition described in Section 5(e)(iii))
thereafter to correct such condition, which condition is then not cured within
such thirty (30) day period (or ten (10) business day period, as applicable)
and
(ii) the Executive resigns from the Company within sixty (60) days after the
expiration of the cure period. In the event of termination in accordance with
this Section 5(e), and provided that no benefits greater than those set forth
in
Section 5(d) above are payable to the Executive under a separate severance
agreement or an executive severance plan as a result of such termination, then
the Executive will be entitled to the same pay he would have been entitled
to
receive had the Executive been terminated by the Company other than for Cause
in
accordance with Section 5(d) above.
(f) By
the
Executive Other than for Good Reason.
The
Executive may terminate his employment hereunder at any time upon thirty (30)
days’ notice to the Company. In the event of termination of the Executive
pursuant to this section 5(f), the Company shall have no further obligation
to
the Executive, other than for any Final Compensation due to him. The Company
may
elect to waive the period of notice, or any portion thereof. The provisions
of
this Section 5(f) shall not affect Executive’s rights as a stockholder of the
Company or under any Company stock warrants or stock options (whether such
warrants or options are vested or unvested).
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(g) Post-Agreement
Employment.
In the
event the Executive remains in the employ of the Company following termination
of this Agreement, by the expiration of the term or otherwise, then such
employment shall be at will.
6. Effect
of Termination.
The
provisions of this Section 6 shall apply to termination due to the expiration
of
the term hereof, pursuant to Section 5 or otherwise.
(a) Payment
by the Company of any Final Compensation and any Base Salary continuation and
other benefits that may be due the Executive in each case under the applicable
termination provision of Section 5 shall constitute the entire obligation of
the
Company to the Executive. The Executive shall promptly give the Company notice
of all facts necessary for the Company to determine the amount and duration
of
its obligations in connection with any termination pursuant to Section 5(d)
or
5(e) hereof.
(b)
Provisions
of this Agreement shall survive any termination if so provided herein or if
necessary or desirable to accomplish the purposes of other surviving provisions,
including without limitation the obligations of the Executive under Sections
7,
8 and 9 hereof. The obligation of the Company to make payments (other than
Final
Compensation) to or on behalf of the Executive under Section 5(d) or 5(e) hereof
is expressly conditioned upon the Executive’s continued full performance of
obligations under Sections 7, 8 and 9 hereof. The Executive recognizes that,
except as expressly provided in Section 5(d) or 5(e), no compensation is earned
after termination of employment.
7. Restrictive
Covenants.
During
the term of this Agreement and for a period of twelve (12) months from the
date
on which the Executive’s employment with the Company terminates, the Executive
covenants and agrees that he shall not do any of the following:
(a) contact,
recruit, solicit or induce, or attempt to contact, recruit, solicit or induce,
any employee, consultant, agent, director or officer of the Company to terminate
his/her employment with, or otherwise cease any relationship with, the Company;
or
(b) contact,
solicit, divert, take away, or attempt to contact, solicit, divert or take
away,
any clients, customers or accounts, or prospective clients, customers or
accounts, of the Company, or any of the Company’s business with such clients,
customers or accounts which were contacted, solicited or served by the
Executive, or were directly or indirectly under the Executive’s responsibility,
while the Executive was employed by the Company, or the identity of which the
Executive became aware during the term of employment except as agreed upon
in
writing signed by a duly authorized officer of the Company.
If
any
part of this Section 7 shall be determined by a court of competent jurisdiction
to be unreasonable in duration, geographic area, or scope, then the provisions
of this Section are intended to and shall extend only for such period of time,
in such area and with respect to such activities as shall be determined by
such
court to be reasonable and all provisions hereof shall be applied
to the
fullest extent permitted by law.
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8. Non-Disclosure
of Confidential Information.
(a) The
Executive shall not during the term of this Agreement or at any time following
termination of his employment hereunder intentionally or negligently use or
disclose to any person, firm or corporation any confidential or proprietary
information acquired by him during the course of his employment relating to
the
Company (or relating to any client of the Company) except in the course of
performing his duties for the Company. Such confidential and proprietary
information shall include, but shall not be limited to, proprietary technology,
trade secrets, patented processes, research and development data, know-how,
formulae, contractual information, pricing policies, the substance of agreements
and arrangements with customers, suppliers and others, names of accounts,
customer and supplier lists and any other documents embodying such confidential
and proprietary information. Confidential Information does not include
information that: (a) is now or in the future becomes generally available to
the
public other than as a result of the disclosure by a party subject to a
confidentiality agreement or (b) becomes available to the Executive on a non
confidential basis from a source other than the Company, provided that the
source is not bound by a confidentiality agreement of which Executive has
knowledge.
(b)
All
information and documents relating to the Company shall be the exclusive
property of the Company, and the Executive shall use his best efforts to prevent
any publication or disclosure of such information and documents. Upon
termination of the employment of the Executive with the Company, the Executive
shall not take from and will promptly return to the Company all documents,
records, customer lists, computer programs, equipment designs, technical
information, reports, writings and other similar documents containing
confidential or proprietary information of the Company, including copies
thereof, then in the Executive's possession or control.
9. Proprietary
Rights.
Any and
all inventions, processes, procedures, systems, discoveries, designs,
configurations, technology, works of authorship, trade secrets and improvements
(whether or not patentable and whether or not they are made, conceived or
reduced to practice during working hours or using the Company's data or
facilities) (collectively, the "Inventions") which the Executive makes,
conceives, reduces to practice, or otherwise acquires during his employment
by
the Company (either solely or jointly with others), and which are related to
the
Company's present or planned business, services or products, shall be the sole
property of the Company and shall at all times and for all purposes be regarded
as acquired and held by the Executive in a fiduciary capacity for the sole
benefit of the Company. All Inventions that consist of works of authorship
capable of protection under copyright laws shall be prepared by the Executive
as
"works made for hire", with the understanding that the Company shall own all
of
the exclusive rights to such works of authorship under the United States
copyright law and all international copyright conventions and foreign laws.
The
Executive hereby assigns to the Company, without further compensation, all
such
Inventions and any and all patents, copyrights, trademarks, trade names or
applications therefor, in the United States and elsewhere, relating thereto.
The
Executive shall promptly disclose to the Company and to no other party all
such
Inventions and shall assist the Company for its own benefit in obtaining and
enforcing patents and copyright registrations on such Inventions in all
countries. Upon request, the Executive shall execute all applications,
assignments, instruments and papers and perform all acts (such as the giving
of
testimony in interference proceedings and infringement suits or other
litigation) necessary or desired by the Company to enable the Company and its
successors, assigns and nominees to secure and enjoy the full benefits and
advantages of such Inventions.
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10. Right
to Injunction.
The
Company and the Executive each acknowledge that the services to be performed
by
the Executive hereunder are unique and that the Company required the Executive
to enter into this Agreement as a condition to his employment by the Company.
The Executive specifically acknowledges and agrees that the restrictions imposed
by Sections 7 and 8 are reasonable as to duration, geographic area and scope
and
are necessary for the protection of the interests of the Company. Any breach
or
threatened breach of any provision of this Agreement by the Executive shall
entitle the Company, in addition to any other remedies available to it at law
or
in equity, to bring an action in any court of competent jurisdiction to enjoin
any such breach or threatened breach and to obtain an order temporarily or
permanently enjoining any such breach or threatened breach, without posting
bond, and the Company shall be entitled to recover from the Executive the
Company’s reasonable attorneys’ fees and costs in obtaining such
relief.
11. Withholding.
All
payments made by the Company under this Agreement shall be reduced by any tax
or
other amounts required to be withheld by the Company under applicable law.
12. Assignment.
This
Agreement shall not be assignable by the Executive or the Company without the
written consent of the other party; provided, however, that the Company may
assign this Agreement to any person, partnership or corporation which acquires
all or substantially all of the assets of the Company.
13. Waiver,
Amendment and Alteration.
The
waiver by either party of a breach of any provision of this Agreement shall
not
operate as or be construed as a waiver of any prior or subsequent breach
thereof. This Agreement may be amended or modified only by a written instrument
signed by the Executive and by an expressly authorized representative of the
Company.
14. Conflicting
Agreements.
The
Executive hereby represents and warrants that the execution of this Agreement
and the performance of his obligations hereunder will not breach or be in
conflict with any other agreement to which the Executive is a party or is bound
and that the Executive is not now subject to any covenants against competition
or similar covenants or any court order or other legal obligation that would
affect the performance of his obligations hereunder. The Executive will not
disclose to or use on behalf of the Company any proprietary information of a
third party without such party’s consent.
15. Notices.
Any and
all notices, requests, demands and other communications provided for by this
Agreement shall be in writing and shall be effective when delivered in person
or
deposited in the United States mail, postage prepaid, registered or certified,
and addressed to the Executive at his last known address on the books of the
Company or, in the case of the Company, at its principal place of business,
attention of President, or to such other address as either party may specify
by
notice to the other actually received.
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16. Entire
Agreement and Binding Effect.
This
Agreement contains the entire agreement of the parties with respect to the
subject matter hereof and supercedes all prior communications, agreements and
understandings, written or oral, including, without limitation, that certain
Employment Agreement effective as of February 13, 2006 by and between the
Company and the Executive, and shall be binding upon and inure to the benefit
of
the parties hereto and their respective successors, permitted assigns and legal
representatives.
17. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument, and in pleading or proving any provision of this Agreement, it
shall
not be necessary to produce more than one of such counterparts.
18. Headings.
The
headings and captions in this Agreement are for convenience only and in no
way
define or describe the scope of content of any provision of this Agreement.
19. Severability.
The provisions of this Agreement are severable. If any term or provision
hereof (or the application thereof) is held invalid or unenforceable for any
reason, the remaining provisions shall not be affected but rather shall remain
in full force and effect and shall be enforced to the fullest extent permitted
by law.
20. Change
in Control.
The
Company shall accelerate the vesting and exercisability of all stock options
and
warrants previously granted by the Company to the Executive effective
immediately prior to the consummation of a Change in Control as to 100% of
such
stock options and warrants that would otherwise remain unvested as of such
date.
As used herein, “Change in Control” means the occurrence of any of the following
events: (a) the Company is a party to, or the stockholders approve, a merger,
consolidation or reorganization with another entity (other than a merger,
consolidation or reorganization that results in the shareholders of the Company
immediately prior to the transaction holding more than 50% of the voting power
of the surviving entity in the transaction immediately after consummation of
the
transaction); (b) a sale of all, or substantially all, of the assets of the
Company; (c) any individual, partnership, firm, corporation, association, trust,
unincorporated organization or other entity, or any syndicate or group deemed
to
be a person under Section 14(d)(2) of the Exchange Act, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of shares of common stock of the Company representing 35% or more
of
the voting power of the Company’s then outstanding securities entitled to vote
in the election of directors of the Company; or (d) the Company is dissolved
or
liquidated; provided however, that a change in control under clause (a), (b),
(c), or (d) shall not be deemed to be a Change in Control as a result of an
acquisition of securities of the Company by an employee benefit plan maintained
by the Company for its employees.
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IN
WITNESS WHEREOF, this Agreement has been executed by the Company, by its duly
authorized representative, and by the Executive, on May 10, 2007.
THE EXECUTIVE: | XXXXXX PRODUCTS CORP.: | ||||
/s/ Xxxxxxx Kouninis | By: | /s/ Xxxxx Xxxxx | |||
Xxxxxxx Kouninis | Xxxxx Xxxxx | ||||
President and Chief Executive Officer |
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