EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT is made and entered into as of this 6th
day of June, 2008, by and between NEURO-HITECH, INC., a
Delaware corporation with offices at One Penn Plaza, Suite
1503, New York, NY 10019 (the “
Corporation ”),
and Matthew E. Colpoys, Jr., an individual residing at 7 Brentwood
Common, Orchard Park, NY, 14127 (the “
Employee ”),
under the following circumstances:
RECITALS:
A.
The
Corporation desires to secure the services of the Employee
upon the terms and conditions hereinafter set forth;
and
B.
The
Employee desires to render services to the Corporation, upon
the terms and conditions hereinafter set forth.
C.
The
Employee has been offered a position with the Corporation
which is of the nature that Employee will either generate or
be entrusted with information, ideas and materials pertaining
to the Corporation.
NOW,
THEREFORE, the parties mutually agree as follows:
1.
Employment. The
Corporation hereby employs the Employee and the Employee hereby
accepts employment as an employee of the Corporation, subject to
the terms and conditions set forth in this Agreement.
2.
Duties and Location. The
Employee shall serve as Chief Executive Officer of the Corporation,
and shall devote substantially all of his time to perform his
duties as Chief Executive Officer of the Corporation and perform
such other tasks, consistent with his position, as may be, from
time to time, assigned to him by the Board of Directors of the
Corporation (the “
Board ”).
Certain duties with respect to the “public-company”
aspects of the Corporation shall be shared or divided with the
Chairman of the Board and/or the Vice Chairman of the Board, as the
Chairman of the Board or the Vice Chairman of the Board may direct.
The Employee shall report directly to the Chairman of the Board,
the Vice Chairman of the Board or such other person as the Board
directs. If
the Board requires, the Employee shall reasonably promptly relocate
his residence to the greater New York City metropolitan area (which
shall be deemed to include New York City, Long Island, northern New
Jersey, Westchester and other locations within a reasonable
commuting distance of New York City).
3.
Term of Employment. Subject
to Section 5
below,
the term of the Employee’s employment hereunder, unless
sooner terminated as provided herein (the “
Initial Term ”),
shall be for a period of three (3) years commencing on the date
hereof. This Agreement shall be automatically renewed for a period
of two (2) years following the completion of the Initial Term (the
“
Renewal Term ”)
unless the Employee provides to the Corporation, or the Corporation
provides to the Employee, as the case may be, with six (6) months
written notice that it does not seek a Renewal Term. For purposes
of this Agreement, the Initial Term, Renewal Term and any term in
accordance with Section 5
below
are hereinafter collectively referred to as the “
Term .”
4.
Compensation of Employee .
(a)
The
Corporation shall pay the Employee as compensation for his
services hereunder, in equal semi-monthly or bi-weekly
installments during the Term, the sum of $332,200 per annum
(the “
Base Salary ”),
less such deductions as shall be required to be withheld by
applicable law and regulations. The Corporation shall review the
Base Salary on an annual basis and has the right but not the
obligation to increase it, but has no right to decrease the Base
Salary.
(b)
In
addition to the Base Salary set forth in Section
4(a)
above,
provided that the Employee is employed by the Corporation on
the last day of its fiscal year, the Employee shall be
entitled to receive an annual cash bonus with respect to such
fiscal year in an amount equal
to 0.75% of the Corporation’s consolidated annual gross
profits (net revenues less cost of good sold) for such fiscal
year. The Corporation’s consolidated annual gross
profits shall be determined based upon the Corporation’s
audited annual financial statements with respect to such year.
Such bonus shall be pro rated with respect to the portion of
the fiscal year from the date of this Agreement through
December 31, 2008.
(c)
The
Corporation shall pay or reimburse the Employee for all
reasonable out-of-pocket expenses actually incurred or paid by
the Employee in the course of his employment, consistent with
the Corporation’s policy for reimbursement of expenses
from time to time.
(d)
The
Employee shall be entitled to participate in such pension,
profit sharing, group insurance, hospitalization, and group
health and benefit plans and all other benefits and plans,
including perquisites, if any, as the Corporation provides to
its employees.
(e)
In
addition to the Base Salary and the bonus compensation, the
Employee shall receive options to purchase 2,000,000 shares of
the Corporation’s Common Stock. The option agreement
with respect to such options shall provide for such options to
vest twenty-five percent (25%) on the date hereof, and
twenty-five percent (25%) on each remaining anniversary of the
date hereof. The exercise price per share for such options
will be $2.00 per share, subject to adjustment for dividends,
splits, reclassifications and similar
transactions.
(f)
If
the Employee is required by the Corporation to relocate from
the Buffalo, NY area to the greater New York City metropolitan
area, he shall be entitled to receive an amount equal to his
reasonable relocation expenses.
5.
Termination.
(a)
This
Agreement and the Employee’s employment hereunder shall
terminate upon the happening of any of the following
events:
(i)
upon
the Employee’s death;
(ii)
upon
the Employee’s “Total Disability” (as herein
defined);
(iii)
upon
the expiration of the Initial Term of this Agreement or any
renewal term thereof, if either party has provided a timely
notice of non-renewal in accordance with Section 3,
above;
(iv)
at
the Employee’s option, upon ninety (90) days prior
written notice to the Corporation;
(v)
at
the Employee’s option, in the event of an act by the
Corporation, defined in Section 5(c), below, as constituting
“Good Reason” for termination by the
Employee;
(vi)
at
the Corporation’s option, in the event of an act by the
Employee, defined in Section 5(d), below, as constituting
“Cause” for termination by the Corporation;
and
(vii)
at
the Corporation’s option without “Cause” at
any time by providing Employee with written notice of such
termination, which termination shall take effect 60 days after
such notice is provided.
(b)
For
purposes of this Agreement, the Employee shall be deemed to be
suffering from a “
Total Disability ”
if the Employee has failed to perform his regular and customary
duties to the Corporation for a period of 180 days out of any
360-day period and if before the Employee has become
“Rehabilitated” (as herein defined) a majority of the
members of the Board, exclusive of the Employee, vote to determine
that the Employee is mentally or physically incapable or unable to
continue to perform such regular and customary duties of
employment. As used herein, the term “
Rehabilitated ”
shall mean such time as the Employee is willing, able and commences
to devote his time and energies to the affairs of the Corporation
to the extent and in the manner that he did so prior to his Total
Disability.
(c)
For
purposes of this Agreement, the term “
Good Reason ”
shall mean that the Employee has resigned due to (i) any material
diminution of Employee’s responsibilities that is not cured
within fifteen (15) days; (ii) any reduction of or failure to pay
Employee compensation provided for herein, except to the extent
Employee consents in writing to any reduction, deferral or waiver
of compensation, which non-payment continues for a period of
fifteen (15) days following written notice to the Corporation by
Employee of such non-payment; or (iii) any material violation by
the Corporation of its obligations under this Agreement that is not
cured within sixty (60) days Agreement after receipt of written
notice thereof from the Employee. For the avoidance of doubt, the
parties expressly agree that the failure of the parties to agree as
to the need for or terms of the Employee’s relocation does
not constitute “Good Reason.”
(d)
For
purposes of this Agreement, the term “
Cause ”
shall mean:
(i)
the
willful or continued failure by Employee to substantially
perform his duties, including, but not limited to, acts of
fraud, willful misconduct, gross negligence or other act of
dishonesty (provided that the Corporation shall have delivered
to Employee a notice of such failure, specifying the
particulars thereof and giving Employee a 15-day period to
cure such conduct if such conduct is capable of being
cured);
(ii)
a
material violation or material breach of this Agreement which
is not cured within 10 days written notice to
Employee;
(iii)
misappropriation
of funds, properties or assets of the Company by Employee or
any action which has a materially adverse effect on the
Company or its business; or
(iv)
the
conviction of, or plea of guilty or no contest to, a felony or
any other crime involving moral turpitude, fraud, theft,
embezzlement or dishonesty; or
(v)
abuse
of drugs or alcohol which impairs Employee’s ability to
perform his duties.
(e)
For
purposes of this Agreement, the term “
Change in Control Transaction ”
means the sale of the Corporation to an un-affiliated person or
entity or group of un-affiliated persons or entities pursuant to
which such person, entity or group acquires (i) shares of capital
stock of the Corporation representing at least fifty percent (50%)
of outstanding capital stock (whether by merger, consolidation,
sale or transfer of shares (other than a merger where the
Corporation is the surviving corporation and the shareholders and
directors of the Corporation prior to the merger constitute a
majority of the shareholders and directors, respectively, of the
survivi
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