Document:

ex10-1h.htm

EXHIBIT 10.1(h)

EMPLOYMENT AGREEMENT

 

This agreement is made and entered into this 22nd day of January, 2010, by and between Hooker Furniture Corporation (“Employer”) and Arthur G. Raymond, Jr. (“Executive”) (each a “Party” and collectively, the “Parties”).

 

WHEREAS, Executive has substantial expertise in the management of the forecasting, manufacture, warehousing and distribution of case goods furniture; and

 

WHEREAS, Employer desires to secure Executive’s service and expertise in connection with Employer’s case goods business beginning February 1, 2010 (the “Effective Date”); and

 

WHEREAS, the Parties agree that a covenant not to compete is essential to the growth and stability of the case goods business of Employer during the first years after its employment of the Executive and to the continuing viability of such business whenever the employment to which this Agreement relates is terminated;

 

1. Employment.  Upon the Effective Date, Employer shall employ and Executive agrees to become employed as Senior Vice President – Case Goods Operations of Employer to oversee the operations of Employer’s case goods business and to perform such different or other duties as may be assigned to him by Employer from time to time by Employer’s Chief Executive Officer consistent with the position of a senior vice president or higher. Executive will devote his full working time and best efforts to the diligent and faithful performance of such duties as may be entrusted to him from time to time by Employer, and shall observe and abide by the corporate policies and decisions of Employer in all business matters.

 

2. Term.  Executive’s employment shall continue under this Agreement for a period beginning on the Effective Date and ending three (3) years thereafter.

 

3. Compensation.  Employer shall pay and Executive shall accept as full consideration for the services to be rendered hereunder compensation consisting of the items listed below.  Employer shall have no obligation to pay any such compensation for any period after the termination of Executive’s employment, except as otherwise expressly provided.

 

(a) Salary, paid pursuant to Employer’s normal payroll practices, at an annual rate of $250,000 per year or such other rate as may be established prospectively by the Compensation Committee of Employer’s Board of Directors (the “Compensation Committee”) from time to time, but in no event less than $250,000 annually (the “Salary”).  All such Salary payments shall be subject to deduction and withholding authorized or required by applicable law.

 

(b) An Annual Bonus with respect to each fiscal year of the Employer (the “Performance Year”) during the Term of this Agreement (beginning with the Performance Year that begins on February 1, 2010), provided that Executive has been continuously employed to the last day of the Performance Year, except as otherwise provided in Sections 4(b), 5(b) and 5(c).  The other terms and conditions of the Annual Bonus, including the applicable performance criteria for a Performance Year, and the determination of the amount of the Annual Bonus payable to the Executive for a Performance Year (if any) shall be determined by Employer’s Chief Executive Officer subject to prior approval by the Compensation Committee.  The Annual Bonus earned by Executive with respect to a Performance Year will be paid during the period that begins on the first day immediately following the last day of the Performance Year and which ends on April 15 of the calendar year in which the Performance Year ends.

 

  

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(c) Grants of incentive awards under the Employer’s stock incentive plan as may be recommended by the Chief Executive Officer, in his sole discretion, to the Compensation Committee and as may be approved by the Compensation Committee, in its sole discretion.

 

(d) Such other benefits, payments, or items of compensation as are provided under the employee benefit plans of the Employer, or as are made available from time to time under compensation policies set by Employer for management employees of Employer having similar salary and level of responsibility; provided, however, that Executive shall not be eligible to participate in the Employer’s Supplemental Retirement Income Plan but shall be entitled to four weeks of paid time off each fiscal year, which shall be pro-rated for the portion of any fiscal year Executive is employed by the Employer during the Term of this Agreement.

 

(e) Employer shall reimburse Executive, in accordance with the general policies and practices of Employer as in effect from time to time, for normal out-of-pocket expenses incurred by Executive in the ordinary course of business, including without limitation, Employer’s standard mileage allowance for business use of any personal vehicle (but not including driving to and from Raleigh to Martinsville for purposes of commuting), business related travel, cellular telephone/PDA expense and professional organizations agreed to by Chief Executive Officer.

 

4. Disability or Death.

 

(a) Disability.  If at any time during the Term of this Agreement, Executive becomes disabled and he has not breached any of the provisions of this Agreement, compensation shall continue to be paid to him according to the Employer’s normal payroll schedule while he is still living, but only for the first six (6) month period during which he shall be so disabled.  Such payments shall be in lieu of any other disability benefit payable for such period under any other employee benefit plan, policy or practice of the Employer.  In such event, Employer may, at its sole option, retain Executive in its employment and continue payment of Executive’s compensation for an additional period of up to 23 months (for a maximum of 29 months total) until he is able to return to work, or Employer may terminate this Agreement.  If the Employer exercises its discretion to terminate the Agreement on account of the Executive’s disability, the Executive shall not be entitled to any further compensation or benefits under this Agreement (except for such compensation or benefits to which the Executive may be entitled under the terms of any employee benefit plan of the Employer).  For purposes of this Section 4(a), Executive shall be considered “disabled” if he has suffered any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Executive to be unable to perform the duties of his position of employment or any substantially similar position of employment with the Employer.

 

  

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(b) Death.  If Executive should die during the Term of this Agreement, Executive’s employment and Employer’s obligations hereunder (other than pro rata payment of Salary) shall terminate as of his death.  In such event, the Employer shall pay the Executive an Annual Bonus for the Performance Year in which the Executive died, which shall be prorated for the period ending on the date of the Executive’s death.  Such Annual Bonus, if any, shall be paid by no later than April 15 of the calendar year in which such Performance Year ends.

 

5. Termination by Employer; Termination by Executive for Good Reason.

 

(a) Termination by Employer for Cause.  Employer may terminate the employment of Executive under this Agreement during its Term for Cause. “Cause” shall include Executive’s fraud, dishonesty, theft, embezzlement, misconduct by Executive injurious to the Employer or any of its affiliates, conviction of, or entry of a plea of guilty or nolo contendere to, a crime that constitutes a felony or other crime involving moral turpitude, competition with Employer or any of its affiliates, unauthorized use of any trade secrets of Employer or any of its affiliates or Confidential Information (as defined below), a violation of any policy, code or standard of ethics generally applicable to employees of the Employer, Executive’s material breach of fiduciary duties owed to Employer, Executive’s excessive and unexcused absenteeism unrelated to a disability, or, following written notice and a reasonable opportunity to cure, gross neglect by Executive of the duties assigned to him.  In such event, Executive shall continue to be paid Salary to the date of termination of his employment.  No Annual Bonus shall be paid to Executive after the date of termination, including any earned but unpaid Annual Bonus with respect to any Performance Year or the portion thereof preceding the date of termination.  Executive shall retain only such rights to participate in other benefits as are required by the terms of those plans, Employer’s polices, or applicable law.

 

(b) Termination by Employer without Cause.  Employer may terminate the employment of Executive under this Agreement during its Term without Cause.  If Executive is terminated without Cause during the Term of this Agreement, Executive, while living and subject to the requirement of Section 5(d), shall be entitled to receive:

 

	
  

	
(1)

	
his then current Salary for a period equal to the lesser of (a) twelve (12) months following such termination of employment or (b) the balance of the three (3) year Term of this Agreement (the “Severance Period”); provided, however, that the total amount payable under this subsection (b)(1) shall not exceed the applicable dollar limit imposed under Treasury Regulation Section 1.409A-1(b)(9)(iii), or any successor or replacement section thereto, and

 

	
  

	
(2)

	
a prorated Annual Bonus for the Performance Year in which Executive’s employment terminates (the “Final Performance Year”) covering the portion of the Final Performance Year for which Executive actually worked.

 

Annual Bonus payment(s), if otherwise payable under the terms of this Agreement, shall be made during the period(s) described in Section 3(b) above for any Performance Year that ended before such Severance Period began (to the extent such Annual Bonus had not previously been paid) and for the Final Performance Year, as applicable.

 

  

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(c) Termination by Employee for Good Reason.  If Executive terminates employment for Good Reason, Executive shall be entitled to receive the amounts described in Section 5(b) above while living and subject to the requirement of Section 5(d).  For purposes of this Agreement, “Good Reason” shall mean Executive’s voluntary termination of employment with Employer within 120 days following the initial existence of one or more of the following conditions which arise without the written consent of Executive:

 

	
  

	
(1)

	
a material diminution in Executive’s base compensation after the occurrence of a Change in Control (as defined in appendix A to this Agreement);

 

	
  

	
(2)

	
a material diminution in Executive’s authority, duties or responsibilities after the occurrence of a Change in Control (as defined in appendix A to this Agreement);

 

	
  

	
(3)

	
a change in the location at which Executive must perform services for Employer to a location that is more than 50 miles from Martinsville, Virginia; and

 

	
  

	
(4)

	
any other action or inaction that constitutes a material breach by Employer of its obligations under this Agreement after the occurrence of a Change in Control (as defined in appendix A to this Agreement).

 

Executive must provide notice to Employer of the existence of a condition or conditions described above within ninety (90) days of the initial existence of such condition or conditions.  Employer shall then have a period of thirty (30) days during which it may remedy the condition or conditions.  If Employer does not remedy the condition or conditions by the end of such 30-day period, Executive may voluntarily terminate employment and such termination of employment shall be deemed to constitute Good Reason.  In applying this subsection, the term “Employer” shall include any successor to Employer.

 

(d) Release. In order to receive payments under Sections 5(b) or 5(c) above, Executive must sign a release fully releasing Employer from any claim or cause of action that Executive may have against Employer relating to Executive’s employment with Employer or any aspect of Executive’s relationship with Employer, through the date of such release.

 

6. Employment Upon Expiration of Agreement.  If Executive is still employed by Employer when this Agreement expires by the conclusion of its Term, Executive’s employment with Employer may or may not continue thereafter, but any such employment shall be “at will,” and may be terminated by either Employer or Executive at any time, with or without Cause, except as otherwise agreed in writing by Employer and Executive.

 

  

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7. Confidential Information and Return of Property.  “Confidential Information” means any written, oral, or other information obtained by Executive in confidence from Employer, or any of its affiliates, including without limitation information about their respective operations, financial condition, business commitments or business strategy, as a result of his employment with Employer, unless such information is already publicly known through no fault of any person bound by a duty of confidentiality to Employer or any of its affiliates.  Executive will not at any time, during or after his employment with Employer, directly or indirectly disclose Confidential Information to any person or entity other than authorized officers, directors and employees of Employer.  Executive will not at any time, during or after his employment with Employer, in any manner use Confidential Information on behalf of himself or any other person or entity other than Employer, or accept any position in which he would have a duty to any person to use Confidential Information against the interests of Employer or any of its affiliates.  Upon termination of his employment for any reason, Executive will promptly return to Employer all property of Employer, including documents and computer files, especially where such property contains or reflects Confidential Information.  Nothing in this Agreement shall be interpreted or shall operate to diminish such duties or obligations of Executive to Employer that arise or continue in effect after the termination of Executive’s employment hereunder, including without limitation any such duties or obligations to maintain confidentiality or refrain from adverse use of any of Employer’s trade secrets or other Confidential Information that Executive may have acquired in the course of Executive’s employment.

 

8. Disclosure and Ownership of Work Related Intellectual Property.  Executive shall disclose fully to Employer any and all intellectual property (including, without limitation, inventions, processes, improvements to inventions and processes, and enhancements to inventions and processes, whether or not patentable, formulae, data and computer programs, related documentation and all other forms of copyrightable subject matter) that Executive conceives, develops or makes during the term of his employment, whether or not within the original Term of this Agreement, and that in whole or in part result from or relate to Executive’s work for Employer (collectively, “Work Related Intellectual Property”).  Any such disclosure shall be made promptly after each item of Work Related Intellectual Property is conceived, developed or made by Executive, whichever is sooner.  Executive acknowledges that all Work Related Intellectual Property that is copyrightable subject matter and which qualifies as “work made for hire” shall be automatically owned by Employer.  Further, Executive hereby assigns to Employer any and all rights which Executive has or may have in Work Related Intellectual Property that is copyrightable subject matter and that, for any reason, does not qualify as “work made for hire.”  If any Work Related Intellectual Property embodies or reflects any preexisting rights of Executive, Executive hereby grants to Employer the irrevocable, perpetual, nonexclusive, worldwide, and royalty-free license to use, reproduce, display, perform, distribute copies of and prepare derivative works based upon such preexisting rights and to authorize others to do any or all of the foregoing. Notwithstanding anything herein to the contrary, articles written by the Executive for publication in periodicals and trade association literature not directly pertaining to the Employer’s business shall not be deemed to be “work for hire” or “Work Related Intellectual Property.”

 

9. Covenant Not to Compete.  Executive and Employer agree that after the Effective Date, Employer’s case goods furniture business will depend to a considerable extent on the individual efforts of Executive.  Moreover, Executive recognizes that, by virtue of his employment with Employer, he will have access to confidential and/or proprietary information relating to the Employer’s business.  Accordingly, and in consideration of Employer’s agreement to employ Executive, Executive covenants and agrees that he will not, for the period of his employment hereunder and for one (1) year thereafter, or in the event of a termination without Cause as defined in Section 5(b) or a termination for Good Reason as defined in Section 5(c), for the Severance Period, whether or not within the original Term of this Agreement, engage directly or indirectly (as principal, agent, or consultant or through any corporation, firm or organization in which he may be an officer, director, employee, shareholder, partner, member or be otherwise affiliated) in the forecasting, manufacture, warehousing, import or wholesale sale of case goods furniture, in any position in which he has responsibility for conducting, control over, influence over, or input into the management, policies, or strategies of any case goods furniture business competing with that being conducted by Employer or any of its affiliates in any U.S. state, territory or district in which any of them is doing business upon the termination of his employment under this Agreement. In addition, this provision shall not, after the termination of Executive’s employment with Employer, prohibit Executive from owning less than 2% of the stock of any publicly held corporation.

 

  

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10. Non-Solicitation of Customers.  Executive agrees that during the Term of this Agreement, and for a period of one (1) year thereafter, whether or not within the original Term of this Agreement, regardless of the circumstances of the termination or any claim that Executive may have against Employer under this Agreement or otherwise, Executive will not:

 

(a) Solicit or attempt to solicit, for purposes competitive with Employer or any of its affiliates, any person or entity who was an existing customer or employee of Employer or any of its affiliates within one (1) year prior to the termination of Executive’s employment with Employer;

 

(b) Solicit or attempt to solicit any person or entity from whom Employer or any of its affiliates or Executive was, within the one (1) year period prior to the termination of Executive’s employment with Employer, actively soliciting or preparing to solicit for the purpose of establishing a customer, employment, or other business relationship; or

 

(c) Solicit or encourage any vendor, supplier or employee of Employer or any of its affiliates to cease doing business with Employer or any of its affiliates or to divert goods or services previously provided to Employer or any of its affiliates to any person or entity other than Employer or any of its affiliates.

 

11. Terminate by Executive. Notwithstanding anything herein to the contrary, Executive may terminate his employment with Employer upon providing at least sixty (60) days’ prior written notice to Employer at any time and for any reason.

 

12. Equitable Relief.  Executive acknowledges and agrees that a breach of any of the covenants made by him in Sections 7, 8, 9 and 10 above would cause irreparable harm to Employer or any of its affiliates for which there would be no adequate remedy at law.  Accordingly, in the event of any threatened or actual breach of any such covenant, Executive agrees that Employer shall be entitled to enforce any such covenant by injunctive and other appropriate equitable relief in any court of competent jurisdiction, in addition to all other remedies available.  If Executive breaches Sections 9 or 10 above, the duration of the period identified shall be computed from the date he resumes compliance with the covenant or from the date Employer is granted injunctive or other equitable relief by a court of competent jurisdiction enforcing the covenant, whichever shall first occur, reduced by the number of days Executive was not in breach of the covenant after termination of employment, or any delay in filing suit, whichever is greater.

 

  

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13. Assignment.  Employer may assign this Agreement to any other entity acquiring all or substantially all of the assets or stock of Employer or to any other entity into which or with which Employer may be merged or consolidated.  Upon such assignment, merger, or consolidation, the rights of Employer under this Agreement, as well as the obligations and liabilities of Employer hereunder, shall inure to the benefit of and be binding upon the assignee, successor-in-interest, or transferee of Employer and Employer shall have no further obligations or liabilities hereunder.  This Agreement is not assignable in any respect by Executive.

 

14. Invalid Provisions.  It is not the intention of either Party to violate any public policy, or any statutory or common law.  If any sentence, paragraph, clause or combination of the same in this Agreement is in violation of the law of any State where applicable, such sentence, paragraph, clause or combination of the same shall be void in the jurisdictions where it is unlawful, and the remainder of the Agreement shall remain binding on the Parties.  However, the Parties agree, and it is their desire that a court should substitute for each such illegal, invalid or unenforceable covenant a reasonable and judicially-enforceable limitation in its place, and that as so modified the covenant shall be as fully enforceable as if set forth herein by the Parties themselves in the modified form.

 

15. Entire Agreement; Amendments.  This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, if any, relating to the subject matter hereof. This Agreement may be amended in whole or in part only by an instrument in writing setting forth the particulars of such amendment and duly executed by both Parties.

 

16. Multiple Counterparts.  This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together shall constitute one and the same instrument.

 

17. Governing Law. The validity, construction, interpretation and enforceability of this Agreement and the capacity of the parties shall be determined and governed by the laws of the Commonwealth of Virginia, without regard to the conflict of law rules contained therein.

 

18. Taxes.  All payments made under this Agreement shall be subject to the Employer’s withholding of all required foreign, federal, state and local income and employment/payroll taxes, and all payments shall be net of such tax withholding.  The parties intend that the provisions of this Agreement shall be exempt from or otherwise comply with the Section 409A of the Internal Revenue Code of 1986, as amended and the regulations hereunder (collectively, “Section 409A”) and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A.  If any provision of this Agreement (or of any payment hereunder) would cause Executive to incur any additional tax or interest under Section 409A, the parties agree to modify this Agreement or the timing (but not increase the amount) of any payment to the extent necessary to comply with Section 409A of the Code and avoid application of any taxes, penalties, or interest thereunder.  However, in the event that the payments under the Agreement are subject to any taxes (including, without limitation, those specified in Code Section 409A), the Executive shall be solely liable for the payment of any such taxes.

 

  

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19. Binding Effect.  This Agreement will be binding upon and enforceable by (i) Executive and will inure to the benefit of Executive's executors, administrators, heirs, devisees and legal representatives and (ii) Employer and any successor to or assignee of Employer.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first written above.

 

Employer

By: /s/ Paul B. Toms, Jr.                                                                           

     Paul B. Toms, Jr.

     Chairman, President and Chief Executive Officer

     Hooker Furniture Corporation

Executive

/s/ Arthur G. Raymond, Jr.                                                                           

Arthur G. Raymond, Jr.

  

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APPENDIX A

The term “Change of Control” means the first date on which one of the following events occurs:

(i) any person or more than one person acting as a group acquires beneficial ownership of Employer stock that, together with the Employer stock already held by such person or group, represents more than 50 percent of the total voting power of the Employer stock; provided, however, that if any one person or more than one person acting as a group is considered to own more than 50 percent of the total voting power of the Employer stock, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the Employer for purposes of this subsection (i);

(ii) a majority of members of the Board is replaced during a twelve-consecutive-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election; provided, however, that if any one person or more than one person acting as a group is considered to effectively control the Employer for purposes of this subsection (ii), the acquisition of additional control of the corporation by the same person or persons is not considered to cause a change in the effective control for purposes of this subsection (ii); or

(iii)  all or substantially all of Employer’s assets are sold to another entity that is not controlled by Employer’s shareholders:

For purposes of this definition, the term “group” shall have the same meaning as in Section 13(d)(3) of the Securities Exchange Act of 1934 (the “Act”), modified to the extent necessary to comply with Treasury Regulation Sections 1.409A-3(i)(5)(v)(B), (vi)(D) or (vii)(C) of the (or any successor provisions). The term “beneficial ownership” shall have the same meaning as in Rule 13d-3 promulgated under the Act, modified to the extent necessary to comply with Treasury Regulation Section 1.409A-3(i)(5)(v)(iii) of the (or any successor provision).  Notwithstanding anything in this definition to the contrary, an event which does not constitute a change in the ownership or a change in the effective control of the Employer, each as defined in Treasury Regulation Section 1.409A-3(i)(5) (or any successor provision) or a sale of substantially all of the Employer’s assets, shall not constitute a Change of Control.

  

9ex10-41.htm

Exhibit 10.41

 

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made effective as of this 1st day of January, 2010 (the “Effective Date”), by and between IR BioSciences Holdings, Inc., a Delaware corporation (the “Company”), and John Fermanis, an individual (“Employee”), with reference to the following facts:

 

RECITALS

WHEREAS, the Company desires that Employee be employed as Chief Financial Officer of the Company; and

WHEREAS, Employee is willing to be employed by the Company and provide services to the Company under the terms and conditions herein stated.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter contained, and for other good and valuable consideration, it is hereby agreed by and between the parties hereto as follows:

 

AGREEMENT

	 	
1.  

	
Employment, Services, and Duties

	
1.1  

	
Employment.  The Company hereby employs Employee as Chief Financial Officer of the Company and Employee hereby accepts such employment as of the Effective Date upon the terms, covenants and conditions set forth herein.  Employee shall render his/her services to the Company by and subject to the instructions and directions of the Company’s President and Chief Executive Officer to whom Employee shall directly report.

	
1.2  

	
Duties.  Employee shall perform all duties assigned to him/her by the Company’s President and Chief Executive Officer to the best of his/her ability and in a manner satisfactory to the Company.

	
1.3  

	
Time and Efforts.  Employee shall devote his/her full-time efforts, attention, and energies to the business of the Company.  Notwithstanding the foregoing, Employee may perform services for other persons, businesses and organizations, provided that the performance of such services does not interfere and is not inconsistent with the Employee’s performance of his/her duties and obligations under this Agreement, including without limitation, the Employee’s duties and obligations under Section 6 of this Agreement.

  

  

  

 

	 	
2.  

	
Term

The term of employment under this Agreement (“Term of Employment”) shall commence on the Effective Date and, subject to the provisions of Section 4 below, shall continue for two years.

	 	
3.  

	
Compensation

As the total consideration for Employee’s services rendered hereunder, Employee shall be entitled to the following:

 

	
3.1  

 

 

	Base Salary.  A salary of $140,000 for the first 12 months of full-time employment (the “First Year Salary”).  A salary of $150,000 in the second year (the “Second Year Salary and collectively with the First Year Salary and the Second Year Salary, the “Base Salary”).  The Base Salary shall be payable in regular installments in accordance with the customary payroll practices of the Company.  Employee’s Base Salary shall be subject to such payroll deductions as required by law or as appropriate under the Company’s payroll deduction procedures.

 

	
3.2  

	
Common Stock.  None

	
3.3  

	
Bonus.  Employee shall be entitled to a discretionary bonus pursuant to those terms set forth in Exhibit A hereto.

	
3.4  

	
Expenses.  During the Term of Employment, Employee is entitled to reimbursement for reasonable and necessary business expenses, per Company policy, incurred by Employee in connection with the performance of Employee’s duties hereunder provided that (a) such expenses are ordinary and necessary expenses incurred on behalf of the Company, and (b) Employee provides the Company with itemized accounts, receipts and other documentation for such expenses, to be reviewed by the Company’s C.E.O., as are reasonably required by the Company.

	
3.5  

	
Vacation.   Employee shall be entitled to three weeks vacation time each year during the first and second years of the Term of Employment without loss of compensation during the Term of Employment.  Employee’s vacation shall be governed by the Company’s usual policies applicable to all Employees.

	
3.6  

	
Fringe Benefits.  Employee shall be entitled to participate in or receive benefits under any employee benefit plan or other arrangement made available by the Company to its executive personnel, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements.

  

  

  

 

	 	
4.  

	
Termination

Employee’s employment shall terminate prior to the expiration of the Term of Employment set forth in Section 2 above upon the happening of the following:

	
4.1  

	
Termination For Cause.  The Company may terminate this Agreement for Cause.  For purposes of this Agreement, “Cause” shall mean:

	
(a)  

	
a material act of dishonesty in connection with the Employee’s responsibilities as an employee of the Company;

	
(b)  

	
Employee’s conviction of, or plea of nolo contendere to, a felony or a crime involving moral turpitude;

	
(c)  

	
Employee’s gross misconduct which has a material adverse effect on the Company; or

	
(d)  

	
Employee’s consistent and willful failure to perform his/her employment duties where such failure is not cured within 30 days after written notice to Employee by the Company.

Any termination for Cause shall be made by written notice to the Employee, which shall set forth in reasonable detail all acts or omissions upon which the Company is relying for the termination.

	
4.2  

	
Termination Without Cause.  The Company may terminate the employment of Employee and all of the Company’s obligations hereunder (except as hereinafter provided) at any time and for any reason or for no reason during the Term of Employment without Cause by giving Employee written notice of such termination, to be effective 15 days following the giving of such written notice.

	
4.3  

	
Termination Due to Disability or Death,  Employee’s employment hereunder:

	
(a)  

	
May be terminated by the Company upon 15 days’ notice to Employee in the event that the Company in good faith determines that Employee has been unable to satisfactorily perform his/her duties under this Agreement for an aggregate of 90 days within any 12-month period, or can reasonably be expected to be unable to do so for such period, as the result of Employee’s disability, and within 15 days of receipt of such notice, Employee shall not have returned to the full-time, continuing performance of his/her duties hereunder, and

	
(b)  

	
Will terminate immediately upon the death of Employee.

For purposes of this Section 4.3, the Employee shall be considered disabled or to be suffering from a disability if the Employee is unable, after any reasonable accommodations required by the Americans with Disabilities Act or any applicable state law, to perform the essential functions of his position because of a physical or mental impairment.  In the absence of agreement between Company and the Employee, whether the Employee is disabled or suffering from a disability (and the date as of which Employee became disabled) will be determined by a licensed physician selected by Company.  If a licensed physician selected by the Employee disagrees with the determination of the physician selected by Company, the two (2) physicians shall select a third physician.  The decision of the third physician concerning the Employee’s disability then shall be binding and conclusive on all interested parties.

 

	  4.4   	The Employee shall at all times have the right, by written notice not less than thirty (30) days prior to the termination date, to terminate the Term of Employment.

 

  

  

  

 

	
5.  

	
Effect of Termination

	
5.1  

	
Termination For Cause.   In the event that Employee’s employment is terminated pursuant to Sections 4.1 above, the Company shall pay to Employee, or his/her representatives, on the date of termination of employment (the “Termination Date”), in satisfaction in full for all of its obligations hereunder, the following:

	
(a)  

	
Two months salary and payment for any accrued vacation provided for in Section 3.5, in each case computed on a pro rata basis to the Termination Date; and

	
(b)  

	
Any expense reimbursements due and owing to Employee as of the Termination Date.

	 	
5.2  

	
Termination For Death or Disability.  In the event Employee’s employment is terminated pursuant to Section 4.3, the Company shall pay to Employee, or his/her representatives, on the Termination  Date in satisfaction in full for all of its obligations hereunder, the following:

	
(a)  

	
in the case of termination due to death, payment for any accrued vacation provided for in Section 3.5, in each case computed on a pro rata basis to the Termination Date; and

	
(b)  

	
in the case of termination due to disability, two months salary and payment for any accrued vacation provided for in Section 3.5, in each case computed on a pro rata basis to the Termination Date; and

	
(c)  

	
in the case of termination due to either death or disability, any unpaid Base Salary and Bonus and expense reimbursements due and owing to Employee as of the Termination Date.

	 	
5.3  

	
Termination Without Cause or a Constructive Termination.  In the event Employee’s employment is terminated pursuant to Section 4.2 or in the event a Constructive Termination occurs as Constructive Termination is defined in the Change-of-Control Agreement by and between the Company and Employee of even date herewith (the “Change-of-Control Agreement”), the Company shall pay to Employee, his/her representatives, on the Termination Date in satisfaction in full for all of its obligations hereunder, the following:

	
(a)  

	
the remainder of the salary for the year or six months salary, whichever is greater and payment for any accrued vacation provided for in Section 3.5, in each case computed on a pro rata basis to the Termination Date; and

	
(b)  

	
any unpaid Base Salary and Bonus and expense reimbursements due and owing to Employee as of the Termination Date.

	
  

	
5.4  

	
Termination by Employee.  In the event Employee’s employment is terminated pursuant to Section 4.4 and such termination of employment is not a Constructive Termination as defined in the Change-of-Control Agreement, the Company shall pay to Employee on the Termination Date in satisfaction in full of all of its obligations hereunder:

	
  

	
(a)  

	
unpaid Base Salary and Bonus and expense reimbursements due and owing to Employee as of the Termination Date; and

	
  

	
(b)  

	
any accrued vacation provided for in Section 3.5, computed on a pro rata basis to the Termination Date.

 

  

  

  

	
6.  

	
Non-Competition; Confidentiality; Non-Solicitation

	 	
6.1  

	
Covenant Not to Compete.  During the Term of Employment, neither Employee nor any affiliate of Employee, shall compete in any manner, directly or indirectly,  with the business of the Company and/or its affiliates (that is, the business of developing, manufacturing, marketing or selling products or services similar to those of the Company and/or its affiliates), or own, manage, operate, control, participate or have any interest in or be connected in any manner with the ownership or control of any business developing, manufacturing, marketing or selling products or services similar to those of the Company and/or its affiliates.  As used in this Agreement, an “affiliate” of Employee is any spouse, parent, child, or sibling of Employee, or any corporation, partnership, association or their business entity which directly or indirectly is controlled or can have its acts affected by Employee or in which Employee has an investment.  Nothing contained in this Agreement shall be deemed to preclude Employee from purchasing or owning, directly or beneficially, as a passive investment, less than five percent (5%) of any class of publicly traded securities of any corporation so long as Employee does not actively participate in or control, directly or indirectly, any investment or other decisions with respect to such corporation.

	 	
6.2  

	
Confidentiality and Return of Company Documents.  Employee recognizes and acknowledges that by virtue of his/her employment with the Company, he/she will have access to certain trade secret and confidential information of the Company and that such information constitutes valuable, special and unique property of the Company, and derives economic value because it is not generally known to the public or to others who could benefit from its disclosure or use (“Trade Secrets”).  Trade Secrets include, but are not limited to, the following:

	
(a)  

	
customer and contact information such as customer lists and other information concerning particular needs, problems, likes or dislikes of the Company’s customers and contacts;

	
(b)  

	
the identities of the Company’s customers and contacts;

	
(c)  

	
price information, such as price lists, the contents of bids, and other information concerning costs or profits;

	
(d)  

	
technical information, such as formulae, know-how, computer programs, software, source and object codes, secret processes or machines, inventions and research projects, documentation, or other methods or processes;

	
(e)  

	
business information relating to costs, profits, sales, markets, suppliers, plans for further development, market studies or research  projects;

	
(f)  

	
personnel or a compilation of data concerning the Company’s employees and independent contractors; and

	
(g)  

	
any other information valuable because of it private or confidential nature.

 

  

  

 

  

Employee agrees that during the term of employment, and for three years thereafter, he/she will not reproduce, copy or disclose the Company’s Trade Secrets and confidential business information to any person, firm, corporation, association or other entity for any reason or purposes whatsoever, nor will Employee advise, discuss or in any way assist any other person or firm (including customers or former customers of the Company) in obtaining or learning about the Company’s Trade Secrets.  Employee covenants and acknowledges that upon separation from employment with the Company, he/she shall immediately surrender to the Company all of the Company’s Trade Secrets and any and all such documents, materials or other tangible items pertaining to these Trade Secrets that he/she may possess and that such Trade Secrets shall be and remain the sole property of the Company.  Employee agrees that if he/she is in doubt as to whether any information, material, or document is a Trade Secret or is confidential, he/she will contact the board of directors of the Company before disclosing or using such information for any purpose other than in furtherance of Employee’s duties as an employee of the Company.  Employee agrees that it will not work for a company competing directly with the Company during the term of his/her employment with the Company under this Agreement.

	 	
6.3  

	
Solicitation of the Company’s Employees or Customers.  Employee agrees that at any time during the term of his/her employment and for three (3) years after that term he/she shall not solicit, directly or indirectly, any employees of the Company to leave employment by the Company to work for or with Employee or any competitor of Company nor solicit any of the Company’s customers or potential customers who were solicited by the Company within a twelve (12) month period immediately prior to the termination of Employee’s engagement.

	 	
6.4  

	
Survival of Confidentiality and Non-Solicitation.  The requirements and covenants of this Section 6.2 and 6.3 shall survive and continue after the Term of Employment.  Employee recognizes and agrees that violation or threatened violation of any provision contained in this Section 6 will cause irreparable damage or injury to the Company and that the Company’s remedies at law for any breach of this Section 6 may not be adequate, and the exact amount of the Company’s damages in the event of such breach may be impossible to ascertain.  Therefore, the Company shall be entitled, as a matter of right, without further notice and without the necessity of posting bond thereof, to injunctive and other equitable relief restraining any threatened or further violation of this Section.  The Company’s right to an injunction shall be in addition to, and not in limitation of, any and other rights and remedies it may have against Employee, including, but not limited to, the recovery of damages.

 

  

  

  

 

	
7.  

	
Notification to New Employer.

If Employee leaves the employ of the Company, Employee consents to the Company’s notification to any new employer of Employee’s and Company’s rights and obligations under this Agreement.

	
8.  

	
Severability

Should any term, provision, covenant or condition or this Agreement be held to be void or invalid, the same shall not affect any other term, provision, covenant or condition of this Agreement, but such remainder shall continue in full force and effect as though each such voided term, provision, covenant or condition is not contained herein.

	
9.  

	
Governing Law and Submission to Jurisdiction

This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona.  Each of the parties submits to the exclusive jurisdiction of any state or federal court sitting in Phoenix, Arizona in any action or proceeding arising out of or relating to this Agreement and further agrees that all claims in respect of the action or proceeding may be heard and determined in any such court and agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court.  Each party agrees that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner so provided by law.

	
10.  

	
Binding Agreement

This Agreement shall inure to the benefit of and shall be binding upon the Company, its successors and assigns.

	
11.  

	
Captions

The Section captions herein are inserted only as a matter of convenience and reference and in no way define, limit or describe the scope of this Agreement or the intent of any provisions hereof.

	
12.  

	
Entire Agreement

This Agreement (along with the Change-of-Control Agreement) contains the entire agreement of the parties relating to the subject matter hereof, and the parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement that are not set forth otherwise herein.  This Agreement supersedes any and all prior agreements, written or oral, with the Company.  Any such prior agreements are hereby terminated and of no further effect and Employee, by the execution hereof, agrees that any compensation provided for under any such prior agreement(s) is specifically superseded and replaced by the provision of this Agreement.  No modification of this Agreement shall be valid unless made by the unanimous written consent of the board of directors of the Company.  The parties hereto agree that in no event shall an oral modification of this Agreement be enforceable or valid.

 

  

  

  

 

	
13.  

	
Notice

All notices and other communications under this Agreement shall be in writing (including, without limitation, telegraphic, telex, telecopy or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered by hand or by nationally recognized courier service guaranteeing overnight delivery to a party at the following address (or to such other address as such party may have specified by notice given to the other party pursuant to this provision):

If to the Company:

IR BioSciences Holdings, Inc. BioSciences, Inc.

8777 E. Via de Ventura, Suite # 280

Scottsdale, AZ  85258

Attention:  Michael K. Wilhelm

With a copy to:

Kirkpatrick & Lockhart, Nicholson, Graham LLP

10100 Santa Monica Blvd., 7th Floor

Los Angeles, CA  90067

Attention:  Thomas J. Poletti, Esq.

 

	 	If to Employee:
	 	 
	 	John Fermanis                        
	 	9831 E. Evans  Dr.                 
	 	Scottsdale, AZ. 85260          

 

	
14.  

	
Attorney’s Fees

In the event that any party shall bring an action, reference, arbitration or proceeding in connection with the performance, breach or interpretation hereof, then the prevailing party in such action, reference, arbitration or proceeding as determined by the court or other body having jurisdiction shall be entitled to recover from the losing party all reasonable costs and expenses of such action, reference, arbitration or proceeding, including reasonable attorneys’ fees, court costs, costs of investigation, expert witness fees and other costs reasonably related to such proceeding.

  

  

  

IN WITNESS WHEREOF, this Agreement is executed as of the day and year first above written.

“COMPANY”

IR BIOSCIENCES HOLDINGS, INC. BIOSCIENCES, INC.

a Delaware corporation

By:  /s/John Fermanis

John Fermanis, Secretary

 

By:  /s/ Michael K. Wilhelm

Michael K. Wilhelm, CEO

 

And

“EMPLOYEE”

 

/s/ John Fermanis

John Fermanis

 

 

EMPLOYMENT AGREEMENT J FERMANIS

 

  

  

  

Exhibit A

Discretionary Award

In addition to Base Salary, the Employee shall be eligible to receive a quarterly discretionary award based upon the Employee’s and the Company’s performance for the preceding quarter of the Company’s fiscal year.  Such discretionary award shall be in the form of Stock Options under the Company’s 2003 Stock Option, Deferred Stock and Restricted Stock Plan (the “Stock Option”).

Additionally, the Employee shall be eligible to receive a quarterly grant of a five-year  option to purchase up to 10,000 (ten thousand) shares of the Company’s Common Stock with an exercise price equal to 85% of the fair market value of the Company’s Common Stock on the date such option is issued (the “Options”).  The amount of Stock Options constituting such grant  shall be determined by the Compensation Committee of the Board of Directors in its sole discretion.  Such grant shall be made as of the last day of the applicable quarter provided that Employee is actively employed by the Company on such date.

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