EXHIBIT 10.B
▇▇▇▇▇, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into the
17th day of June, 2005 by and between ▇▇▇▇▇, Inc. a Delaware corporation (the
"Company"), and ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ ("Executive") This Agreement hereby supersedes
any other employment agreements or understandings, written or oral, between the
Company and Executive.
1. Employment and Duties. Executive has been performing the duties of Chief
Financial Officer and Executive Vice President since June 1, 2003 and his due
election by the Company's Board of Directors to such position, and Executive has
been performing such duties in contemplation of the execution and delivery of
this Agreement. The Company hereby employs Executive as Chief Financial Officer
and Executive Vice President of the Company pursuant to the terms of this
Agreement. As such, Executive shall have responsibilities, duties and authority
reasonably accorded to and expected of an Executive. Executive hereby accepts
this employment upon the terms and conditions herein contained and agree to
devote his working time, attention and efforts as necessary to promote and
further the business of the Company. Executive and Company agrees the first day
of Executive's employment will be June 1, 2003. Company acknowledges and agrees
that Executive is involved in certain other business ventures, including certain
ventures in the same general industry as the Company which have been disclosed
to the Company. The Company acknowledges and agrees that Executive may continue
to devote certain efforts to such ventures as long as they are not to the
substantial detriment of the Company.
2. Compensation. For all services rendered by Executive, the Company shall
compensate Executive as follows:
(a) Base Salary. In lieu of a salary during the first two years of
Executive Employment which commenced on June 1, 2003 the Company agrees to award
to Executive options to purchase ("Base Options") One Million Five Hundred
Thousand (1,500,000) shares of the Company's common stock, par value $0.01 per
share ("Common Stock"). The Base Options shall vest on June 1, 2006, and shall
have a tern of five years from the date of this Agreement and the exercise price
for the Base Options shall be $0.145 per share, which Company and Executive
acknowledge is 50% greater than the closing price of the Company's common stock
on June 1, 2005. The annual base salary payable to the Executive on a monthly
basis, commencing on June 1, 2005, shall be $70,000.00 ("Base Salary"), payable
on a regular basis in accordance with the Company's standard payroll procedures.
Executive shall receive Base Salary in monthly installments. Said compensation
shall be a combination of cash and/or Restricted Common Stock ("Restricted
Stock") (a) the price of which shall be the closing price of the Restricted
Stock on the first day of each calendar month in which such Restricted Stock are
earned in accordance with this agreement. Base Salary shall be 100% Restricted
Stock granted automatically at the end of each year until changed by the Board
1
of Directors. At any time the proportion of cash and stock shall be determined
by the Board of Directors at its discretion.
(b) Bonus. As additional annual compensation to the Base Salary,
Executive shall be eligible to receive bonuses at the end of each fiscal year in
the form of additional cash, stock options or both. Bonuses will be provided at
the discretion of the Board of Directors. The target annual bonus for Executive
during the term of this Agreement shall be one hundred fifty percent (150 %) of
Executive's Base Salary. In addition, the Executive shall receive bonus options
to purchase ("Bonus Options") One Million (1,000,000) shares of the Common Stock
if the price of the Common Stock closes above $1.00 per share but below $2.00
per share for a total of thirty (30) consecutive trading days any time before
December 31, 2006. In the event the price of Common Stock closes above $2.00 per
share for a total of thirty (30) consecutive trading days any time before
December 31, 2006, the Executive shall receive Bonus Options to purchase an
additional One Million (1,000,000) shares of Common Stock for an aggregate of
Two Million (2,000,000) shares of. the Company's common stock when combined with
the bonus options received in the previous sentence. The exercise price for the
Bonus Options shall be $.145 per share, and the term of the Bonus Options shall
expire on December 31, 2009.
(c) Other Compensation. Executive shall be entitled to receive
additional benefits and compensation from the Company in such form and to such
extent as specified below:
(i) Coverage for Executive and his family under retirement,
401(k), health, hospitalization, disability, dental and other insurance plans
that the Company may have in effect from time to time.
(ii) Reimbursement for all business travel and other
out-of-pocket expenses reasonably incurred by Executive in the performance of
his services pursuant to this Agreement. Executive shall appropriately document
all reimbursable expenses in reasonable detail upon submission of any request
for reimbursement, and in a format and manner consistent with the Company's
expense reporting policy.
(iii) Six (6) weeks paid vacation and sick leave for each year
during the period of employment (pro-rated for any year in which Executive is
employed for less than the full year).
2
3. Place of Performance. The Executive's job location will be at a mutually
agreeable location.
4. Term. Termination; Rights on Termination. The term of this Agreement
will commence on the starting date of employment, and will continue for a period
of five (5) years, ("Term"); provided, that commencing on the first day of the
month next following the commencement date hereof, and on the first day of each
month thereafter (the most recent of such dates is hereinafter referred to as
the "Renewal Date"), the Term shall be automatically extended so as to terminate
five (5) years from such Renewal Date, unless at least 120 days or 30 days prior
to any Renewal Date the Company or the Executive, respectively, shall give
notice to the other that the Term shall not be so extended. This Agreement and
Executive's employment may be terminated in any one of the following ways;
(a) Death. The death of Executive shall immediately terminate the
Agreement; provided any Base Salary and earned benefits to the date of death
will be paid to Executive's estate, legal representative or other beneficiary.
In addition, the vesting of all Company shares or stock options held by
Executive shall accelerate by two (2) years.
(b) Disability. The Company will make efforts to reasonably
accommodate Executive as required by applicable state or federal disability
laws. However, the parties irrefutably presume that, given Executive's position,
it would be an undue hardship to the Company if Executive were absent for more
than six (6) consecutive months. Therefore, if as a result of incapacity due to
physical or mental illness or injury, Executive shall have been absent from his
full-time duties hereunder for six (6) consecutive months, then thirty (30) days
after receiving written notice (which notice may occur before or after the end
of such six (6) month period, but which shall not be effective earlier than the
last day of such six (6) month period), the Company may terminate Executive's
employment hereunder provided Executive is unable to resume his normal duties at
the conclusion of such notice period. Also, Executive may terminate his
employment hereunder if his health should become impaired to an extent that
makes the continued performance of his duties hereunder hazardous to his
physical or mental health or his life, provided that Executive shall have
furnished the Company with a written statement from a qualified doctor to such
effect and provided, further, that at the Company's request made within thirty
(30) days of the date of such written statement, Executive shall submit to an
examination by a doctor selected by the Company who is reasonably acceptable to
Executive or Executive's doctor and such doctor shall have concurred in the
conclusion of Executive's doctor. In the event this Agreement is terminated as a
result of Executive's disability, Executive shall receive from the Company, in a
lump sum payment due within ten (10) days of the effective date of termination,
the Base Salary at the rate then in effect for one (1) year and the vesting of
al shares or stock options held by Executive shall accelerate by two (2) years.
3
(c) Good Cause. The Company may terminate the Agreement after written
notice to Executive for good cause. Good cause shall be (i) engaging in conduct
that constitutes willful gross negligence in carrying out his duties under this
Agreement, resulting in either case, in material harm to the Company, unless
Executive believed in good faith that such act or non act was in best interests
of the Company; provided, Executive has received advanced written notice of the
described activity and has failed to substantially correct or cease the
activity, as appropriate, (ii) fraud with respect to the business or affairs of
the Company that materially adversely affects the operations or reputation of
the Company; (iv conviction of a felony crime; or (v) chronic alcohol abuse or
illegal drug abuse. In the event of a termination for good cause, as enumerated
above, Company will pay Executive, in lieu of any other payment; Executive's
Base Salary and earned benefits to the effective date of termination.
(d) Without Cause. At any time after the commencement of employment,
the Company may, without cause, terminate this Agreement and Executive's
employment hereunder, effective thirty (30) days after written notice is
provided to Executive. The Company may terminate Executive without cause during
the Term. Should the Company without cause terminate Executive, Executive shall
receive from the Company, in a lump-sum payment due on the effective date of
termination, an amount equal to three (3) times the effective Base Salary or
Base Options then in effect. In addition, upon termination by the Company
without cause, all Company units or stock options held by Executive shall become
immediately vested and exercisable.
(e) Termination Executive for Good Reason. Executive may terminate his
employment hereunder for "Good Reason." As used herein, "Good Reason" shall mean
the continuance or failure to cure of any of the following after thirty (30)
days' prior written notice by Executive to the Company, specifying the basis for
such Executive's having Good Reason to terminate this Agreement:;
(i) Executive's removal from, or failure to be reappointed or
Reelected to, Executive's position under this Agreement, except as contemplated
by paragraphs 4(a), (b), (c) and (d);
(ii) The failure by the Company to permit the Executive (a) to
participate in any bonus or other cash or equity incentive compensation plan,
program or arrangement made generally available to the executive officers of the
Company and (b) to have performance goals, if applicable, and target bonus or
other incentive awards under any such plan program or arrangement that are
reasonable in relation to the performance goals and awards established for the
other participating executive officers;
(iii) The failure by the Company to permit the Executive to
participate in any retirement plan or arrangement or any insurance or other
welfare benefit plan or arrangement made generally available to the executive
officers of the Company on a basis reasonable in relation to the basis on which
the other executive officers of the Company are eligible to participate;
4
(iv) The relocation of the site from which the Executive is to
perform his principal duties or relocation of the Company's principal executive
offices to any place outside of the Boston, Massachusetts immediate vicinity; or
(v) The failure by the surviving or successor entity in any
merger, consolidation, reorganization or similar transaction in which the
Company is not the surviving entity to assume or otherwise be liable for the
obligations of the Company under this Agreement.
In the event of any dispute with respect to the termination by the
Executive for Good Reason, such dispute shall be resolved pursuant to the
provisions of Section 11 below. In the event that it is determined that Good
Reason did exist, the Company shall pay all amounts and damages to which
Executive may be entitled as a result of such breach, including interest thereon
and all reasonable legal fees and expenses and other costs incurred by Executive
to enforce his rights hereunder. Should the Company without cause terminate
Executive, Executive shall receive from the Company, in a lump-sum payment due
on the effective date of termination, an amount equal to three (3) times the
effective Base Salary or Base Options then in effect. In addition, upon
termination by the Company without cause, all Company units or stock options
held by Executive shall become immediately vested and exercisable.
(f) Termination by Executive Without Good Reason. If Executive resigns
or otherwise terminates his employment without Good Reason pursuant to paragraph
4(e), Company will pay Executive, Executive's Base Salary and stock options that
have actually accrued to the date of termination. Upon termination of this
Agreement all rights and obligations of the Company and of Executive under this
Agreement shall cease as of the effective date of termination, except that
obligations under paragraphs 5, 6, 11, 12 and 14 herein shall survive such
termination in accordance with their terms.
5. Indemnification. In the event Executive is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Executive), by reason of the fact that he is or was performing services
under this Agreement, then the Company shall indemnify Executive against all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, as actually and reasonably incurred by Executive in connection
therewith. In the event that both Executive and the Company are made a party to
the same third-party action, complaint, suit or proceeding, the Company agrees
to engage competent legal representation, and Executive agrees to use the same
representation, provided that if counsel selected by the Company shall have a
conflict of interest that prevents such counsel from representing Executive,
Executive may engage separate counsel and the Company shall pay all attorneys'
fees of such separate counsel. Further, while Executive is expected at all times
to use his best efforts to faithfully discharge his duties under this Agreement,
Executive shall not be held liable to the Company for errors or omissions made
5
in good faith where Executive has not exhibited willful and/or deliberate
malfeasance or performed criminal and fraudulent acts which damage the business
of the Company.
6. No Prior Agreements. Executive hereby represents and warrants to the
Company that the execution of this Agreement by Executive and his employment by
the Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other person or
entity. Further, Executive agrees to indemnify the Company for any claim.,
including, but not limited to, attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against the Company based upon or arising out of any non-competition
agreement, invention or secrecy agreement between Executive and such third party
which was in existence as of the date of this Agreement.
7. Assignment; Binding Effect. Executive understands that the Company on
the basis of his personal qualifications, experience and skills has selected him
for employment. Executive agrees, therefore, he cannot assign all or any portion
of his performance under this Agreement. Subject to the preceding, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties hereto and there respective heirs, legal representatives, successors
and assigns.
8. Complete Agreement. This Agreement is not a promise of future
employment. Executive has no oral representations, understandings or agreements
with the Company, or any of their respective officers, directors or
representatives covering the same subject matter as this Agreement. This written
Agreement is the final, complete and exclusive statement and expression of the
agreement between the Company and Executive and of all the terms of this
Agreement, and it cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous oral or written agreements. This Agreement may not
be later modified except by a further writing signed by a duly authorized
officer of the Company and Executive, and no term of this Agreement may be
waived except by writing signed by the party waiving the benefit of such term.
9. Notice. All notices, requests, demands and other communications
hereunder shall be given in writing and shall be: (a) personally delivered; (b)
sent by telecopy, facsimile transmission or other electronic means of
transmitting written documents; or (c) sent to the parties at their respective
addresses indicated herein by Federal Express or UPS Services
If personally delivered, such communication shall be deemed delivered capon
actual receipt. If electronically transmitted pursuant to this Section, such
communication shall be deemed delivered the next business day after transmission
(and sender shall bear the burden of proof of delivery); if sent by overnight
courier pursuant to this Section, such communication shall be deemed delivered
upon receipt, and if sent by U.S. mail or Federal Express pursuant to this
Section, such communication shall be deemed delivered as of the date of delivery
indicated on the receipt issued by the relevant postal service, or, if the
6
addressee fails or refuses to accept delivery, as of the date of such failure or
refusal. Any party to this Agreement may change its address for the purposes of
this Agreement by giving notice thereof in accordance with this Section.
10. Severability; Headings. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. The
paragraph headings herein are for reference purposes only and are not intended
in any way to describe, interpret, define or limit the extent or intent of the
Agreement or of any part hereof.
11. Resolution of Disputes
-----------------------
(a) Arbitration. Any dispute, controversy or claim arising out of or
relating to this Agreement or the negotiation hereof or entry hereunto or any
contract or agreement entered into pursuant hereto or the performance by the
parties of its or their terms shall be settled by binding arbitration held in
Boston, Massachusetts, in accordance with the Commercial Arbitration Rules of
the American Arbitration Association then in effect, except as specifically
otherwise provided in this Section 11. This Section 11 shall be construed and
enforced in accordance with the Federal Arbitration Act, notwithstanding any
other choice of law provision in this Agreement. Notwithstanding the foregoing:
(i) Any party hereto may, in its discretion, apply to a court of
competent jurisdiction for equitable relief. Such an application shall not be
deemed a waiver of the right to compel arbitration pursuant to this Section 11.
(b) Arbitrators. The panel to be appointed shall consist of three
neutral arbitrators mutually acceptable to the parties.
(c) Procedures. The arbitrators shall allow such discovery as the
arbitrators determine appropriate under the circumstances and shall resolve the
dispute as expeditiously as practicable, and if reasonably practicable, within
one hundred twenty (120) days after the selection of the arbitrators. The
arbitrators shall give the parties written notice of the decision, with the
reasons therefore set out, and shall have thirty (30) days thereafter to
reconsider and modify such decision if any party so requests within ten (10)
days after the decision.
(d) Authority. The arbitrators shall have authority to award relief
under legal or equitable principles, including interim or preliminary relief and
to allocate responsibility for the costs of the arbitration and to award
recovery of attorneys' fees and expenses in such manner as is determined to be
appropriate by the arbitrators.
(e) Entry of Judgment. Judgment upon the award rendered by the
arbitrators may be entered in any court having in personate and subject matter
7
jurisdiction. Company and Executive hereby submit to the in personam
jurisdiction of the Federal and State courts in Boston, Massachusetts, for the
purpose of confirming any such award and entering judgment thereon.
(f) Confidentiality All proceedings under this Section 11, and all
evidence given or discovered pursuant hereto, shall be maintained in confidence
by all parties and by the arbitrators.
(g) Continued Performance. The fact that the dispute resolution
procedures specified in this Section 11 shall have been or may be invoked shall
not excuse any party from performing its obligations under this Agreement and
during the pendency of any such procedure all parties shall continue to perform
their respective obligations in good faith, subject to any rights to terminate
this Agreement that may be available to any party.
(h) Tolling. All applicable statutes of limitation shall be tolled
while the procedures specified in this Section 11 are pending. The parties will
take such action, if any, required to effectuate such tolling.
12. Governing Law. This Agreement shall in all respects be construed
according to the laws of the State of Delaware.
13. Counter arts. This Agreement may be executed simultaneously in two (2)
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
14. Attorneys' Fees. In the event of any litigation or arbitration arising
under or in connection with this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees as determined by the court or arbitration
panel, as the case may be. Each party to this Agreement represents and warrants
that it has been represented by counsel in the negotiation and execution of this
Agreement, including without limitation the provisions set forth in this
paragraph 14.
8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY:
▇▇▇▇▇, INC.
By:_______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO and Chairman
EXECUTIVE:
__________________________________
9
ADDENDUM TO "▇▇▇▇▇, INC. EXECUTIVE EMPLOYMENT AGREEMENT"
DATED JUNE 17, 2005 FOR CHIEF FINANCIAL OFFICER
Pursuant to the vote of the Board of Directors of June 7, 2007 the CFO, ▇▇▇▇▇ ▇.
▇'▇▇▇▇▇▇ was granted the following warrants in lieu of the previous expired
bonus options delineated in the "▇▇▇▇▇, INC. EXECUTIVE EMPLOYMENT AGREEMENT"
which is hereby incorporated by reference.
▇▇▇▇▇ ▇.▇'▇▇▇▇▇▇ shall receive bonus options to purchase ("Bonus Options") One
Million One Hundred Thousand (1,100,000) shares of the Common Stock if the price
of the Common Stock closes above $1.10 per share but below $2.10 per share for a
total of thirty (30) consecutive trading days any time before May 31, 2010. In
the event the price of Common Stock closes above $2.10 per share for a total of
thirty (30) consecutive trading days any time before May 31, 2010, the Executive
shall receive Bonus Options to purchase an additional One Million One Hundred
Thousand (1,100,000) shares of Common Stock for an aggregate of Two Million Two
Hundred Thousand (2,200,000) shares of the Company's common stock when combined
with the bonus options received in the previous sentence. The exercise price for
the Bonus Options shall be $.16 per share, and the term of the Bonus Options
shall expire on May 31, 2010.
