EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the
"Agreement"), dated as of October 1, 2007 (the “Commencement
Date”), between Langer, Inc., a Delaware corporation, (the
“Company") and W. Gray Hudkins (the "Employee").
W I T N E S S E T H
:
WHEREAS ,
the Company desires to employ the Employee and to be assured of his
services on the terms and conditions hereinafter set forth;
and
WHEREAS ,
the Employee is willing to accept such employment on such terms and
conditions.
NOW THEREFORE ,
in consideration of the mutual covenants and agreements set forth
in this Agreement, the Company and the Employee hereby agree as
follows:
The
term of this Agreement shall commence on the Commencement Date
and, subject to termination as provided herein, shall expire
on the third anniversary of Commencement Date; provided,
however, that the term of this Agreement shall automatically
be renewed for a single term of one year only, unless written
notice of non-renewal is given to the Employee on or before
June 30, 2010. The period of employment hereunder is
hereinafter referred to as the "Term." There shall be no
automatic renewal of this Agreement for any period after
September 30, 2011.
(a)
During
the Term of this Agreement, the Employee shall serve as the
Chief Executive Officer of the Company, or in such other
executive capacity as may be assigned to him, and shall
perform all duties commensurate with his position and as may
be assigned to him by the Chairman of the Board of Directors
or such other person(s) as may be designated by the Board of
Directors of the Company (the “Board”). The
Employee shall devote his full business time and energies to
the business and affairs of the Company and shall use his best
efforts, skills and abilities to promote the interests of the
Company, and to diligently and competently perform the duties
of his position.
(b)
The
Employee shall report to the Chairman of the Board or the
Chief Executive Officer or such other person(s) as may be
designated by the Board and shall at all times keep the
Chairman of the Board and the Chief Executive Officer (or such
other officer as the Chairman of the Board, the Chief
Executive Officer or the Board may designate from time to
time) promptly and fully informed (in writing if so requested)
of his conduct and of the business or affairs of the Company,
and provide such explanations of his conduct as may be
required.
3.
Compensation, Bonus, Stock Options, Benefits,
etc.
(a)
Salary .
During the Term of this Agreement, the Company shall pay to the
Employee, and the Employee shall accept from the Company, as
compensation for the performance of services under this Agreement
and the Employee's observance and performance of all of the
provisions hereof, an annual salary at the rate of $300,000 (the
"Base Compensation"). The Base Compensation shall be payable in
accordance with the normal payroll practices of the Company and
shall be subject to withholding for applicable taxes and other
amounts. The Employee’s performance and the Base Compensation
shall be subject to annual review by the Company.
(b)
Cash Bonus .
In addition to the Base Compensation described above, the Employee
shall, in the sole and absolute discretion of the Compensation
Committee of the Board, be entitled to performance bonuses which
may be based upon a variety of factors, including the
Employee’s performance and the achievement of Company goals,
all as determined in the sole and absolute discretion of the Board
or Compensation Committee of the Board. Any bonus paid to the
Employee shall be subject to withholding for applicable taxes and
other amounts. In addition, the Employee may be entitled to
participate in such other bonus plans, whether during the term of
this Agreement as the Compensation Committee of the Board may, in
its sole and absolute discretion, determine .
(c)
Equity Compensation
. The
Employee may be entitled, during the term of this Agreement, to
receive such additional options, restricted stock awards,
performance awards, or other equity-based awards (all such
compensation, "Equity Awards") at such times, in such amounts, and
on such other terms as the Compensation Committee of the Board may,
in its sole and absolute discretion, determine. The terms and
provisions of such Equity Awards shall be set forth in such
agreements and, if awarded under the Company's 2001 Stock Incentive
Plan, 2005 Stock Incentive Plan, 2007 Stock Incentive Plan, or any
other plan hereafter adopted or authorized by the Compensation
Committee of the Board, the Board, and/or the stockholders of the
Company (all of the foregoing, a "Plan" or "Plans"), shall be
governed by such Plans.
(d)
Benefits .
During the Term of this Agreement, the Employee shall be entitled
to participate in or benefit from, in accordance with the
eligibility and other provisions thereof, the Company's medical
insurance and other fringe benefit plans or policies as the Company
may make available to, or have in effect for, its senior executive
officers from time to time. The Company and its affiliates retain
the right to terminate or alter any such plans or policies from
time to time. In addition, during the Term the Company shall
maintain term life insurance on the Employee in the amount of
$1,000,000 for the benefit of the Employee’s designees (the
“Life Insurance”). The Employee shall also be entitled
to four weeks paid vacation each year, sick leave and other similar
benefits in accordance with policies of the Company from time to
time in effect for its senior executive officers.
(e)
Reimbursement of Business Expenses
. During
the Term of this Agreement, upon submission of proper invoices,
receipts or other supporting documentation reasonably satisfactory
to the Company and in accordance with and subject to the
Company’s expense reimbursement policies, the Employee shall
be reimbursed by the Company for all reasonable business expenses
actually and necessarily incurred by the Employee on behalf of the
Company in connection with the performance of services under this
Agreement. In addition, the Employee shall receive a
non-accountable expense allowance at the rate of $20,000 per year,
which shall be paid in equal monthly installments.
4.
Representations of Employee
.
(a)
The
Employee represents and warrants that he is not party to, or
bound by, any agreement or commitment, or subject to any
restriction, including but not limited to agreements related
to previous employment containing confidentiality or
noncompetition covenants, which presently has or may in the
future have a possibility of adversely affecting the business
of the Company or the performance by the Employee of his
duties under this Agreement.
(b)
During
the Term and the Severance Period, if any, the Employee agrees
that he will not offer for sale, sell, pledge, assign,
hypothecate or otherwise create any interest in or dispose of
(or enter into any transaction or device that is designed to,
or could reasonably be expected to, result in any of the
foregoing) any shares of Common Stock owned by him on the
Commencement Date or any shares of Common Stock owned or
acquired by him after the Commencement Date upon the
conversion or exercise of options or any securities
convertible into or exercisable or exchangeable for Common
Stock, without first notifying the Board in writing to inquire
as to whether there exists any facts or circumstances that
would make it inadvisable for the Company if the Employee
engaged in such transaction.
(c)
The
representations, warranties and covenants of this Section 4
shall survive termination of the Employee’s employment
hereunder and the expiration of the Term hereof.
5.
Confidentiality, Noncompetition, Nonsolicitation and
Non-Disparagement.
For
purposes of this Section 5, all references to the Company
shall be deemed to include the Company’s affiliates and
subsidiaries and their respective subsidiaries, whether now
existing or hereafter established or acquired. In
consideration for the compensation and benefits provided to
the Employee pursuant to this Agreement, the Employee agrees
with the provisions of this Section 5.
(a)
Confidential Information .
(i) The Employee acknowledges that as a result of his retention by
the Company, the Employee has and will continue to have knowledge
of, and access to, proprietary and confidential information of the
Company, including, without limitation, research and development
plans and results, software, databases, technology, inventions,
trade secrets, technical information, know-how, plans,
specifications, methods of operations, product and service
information, product and service availability, pricing information
(including pricing strategies), financial, business and marketing
information and plans, and the identity of customers, clients and
suppliers (collectively, the “Confidential
Information”), and that the Confidential Information, even
though it may be contributed, developed or acquired by the
Employee, constitutes valuable, special and unique assets of the
Company developed at great expense which are the exclusive property
of the Company. Accordingly, the Employee shall not, at any time,
either during or subsequent to the Term of this Agreement, use,
reveal, report, publish, transfer or otherwise disclose to any
person, corporation or other entity, any of the Confidential
Information without the prior written consent of the Company,
except to responsible officers and employees of the Company and
other responsible persons who are in a contractual or fiduciary
relationship with the Company and who have a need for such
Confidential Information for purposes in the best interests of the
Company, and except for such Confidential Information which is or
becomes of general public knowledge from authorized sources other
than the Employee.
(ii)
The
Employee acknowledges that the Company would not enter into
this Agreement without the assurance that all the Confidential
Information will be used for the exclusive benefit of the
Company.
(b)
Return of Confidential Information
.
Upon the termination of this Agreement or upon the request of the
Company, the Employee shall promptly return to the Company all
Confidential Information in his possession or control, including
but not limited to all drawings, manuals, computer printouts,
computer databases, disks, data, files, lists, memoranda, letters,
notes, notebooks, reports and other writings and copies thereof and
all other materials relating to the Company’s business,
including without limitation any materials incorporating
Confidential Information.
(c)
Inventions, etc .
During the Term and for a period of one year thereafter, the
Employee will promptly disclose to the Company all designs,
processes, inventions, improvements, developments, discoveries,
processes, techniques, and other information related to the
business of the Company conceived, developed, acquired, or reduced
to practice by him alone or with others during the Term of this
Agreement, whether or not conceived during regular working hours,
through the use of Company time, material or facilities or
otherwise (“Inventions”).
The
Employee agrees that all copyrights created in conjunction
with his service to the Company and other Inventions, are
“works made for hire” (as that term is defined
under the Copyright Act of 1976, as amended). All such
copyrights, trademarks, and other Inventions shall be the sole
and exclusive property of the Company, and the Company shall
be the sole owner of all patents, copyrights, trademarks,
trade secrets, and other rights and protection in connection
therewith. To the extent any such copyright and other
Inventions may not be works for hire, the Employee hereby
assigns to the Corporation any and all rights he or she now
has or may hereafter acquire in such copyrights and any other
Inventions. Upon request the Employee shall deliver to the
Company all drawings, models and other data and records
relating to such copyrights, trademarks and Inventions. The
Employee further agrees as to all such Inventions, to assist
the Company in every proper way (but at the Company’s
expense) to obtain, register, and from time to time enforce
patents, copyrights, trademarks, trade secrets, and other
rights and protection relating to said Inventions in and all
countries, and to that end the Employee shall execute all
documents for use in applying for and obtaining such patents,
copyrights, trademarks, trade secrets and other rights and
protection on and enforcing such Inventions, as the Company
may desire, together with any assignments thereof to the
Company or persons designated by it. Such obligation to
assist
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