EXECUTIVE EMPLOYMENT AGREEMENT
THIS
EXECUTIVE EMPLOYMENT AGREEMENT (“the Agreement”)
is effective September 1, 2007 (the “Effective
Date”), by and between Auriga Laboratories, Inc., (the
“Company”) and Frank Greico
(“Executive”).
1.1
Engagement .
Subject to the terms and conditions set forth in this Agreement,
the Company will employ Executive as its Chief Financial
Officer, pursuant to the terms of this Agreement. Executive hereby
accepts such engagement and employment, pursuant to the terms of
this Agreement.
1.2
Employment Period. Unless
terminated earlier pursuant to Section 4, Executive’s term of
employment as Chief Financial Officer under this Agreement shall
commence on the Effective Date and shall continue for a period of
one (1) year following the Effective Date. If the parties mutually
agree, the parties shall have the option to extend the term of this
Agreement for an additional one (1) year period upon either party
notifying the other party, in accordance with section 7.2, of
intent to renew at least ninety (90) days prior to the end of the
initial one (1) year term, subject to acceptance of such renewal by
the other party. The initial one (1) year term, and any additional
renewal period, shall together be referred to as the
“Employment Period” as such term is used in this
Agreement
.
1.3
Duties and Responsibilities .
During the Employment Period, the duties, authority and
responsibilities of Executive shall be commensurate with the
duties, authority and responsibilities customarily accorded a Chief
Financial Officer at comparable companies, and shall include such
duties and responsibilities as may be legally assigned to Executive
by the Chief Executive Officer or Board of Directors of the Company
(the “Board”). During the Employment Period, Executive
shall report to the Chief Executive Officer and the Board.
Executive shall exercise such authority and perform such duties and
services, consistent with his position, as may be assigned to him
from time to time by the Chief Executive Officer and the Board and
the Executive hereby agrees to perform well and faithfully such
duties and responsibilities.
1.4
Devotion of Time and Best Efforts .
Except for vacations as provided herein and absences due to
temporary illness, under an approved leave, or as required by
applicable law, Executive agrees to devote his best efforts and
energies on a full time basis during the Employment Period to the
performance of his duties hereunder and to advance the
Company’s interests. Notwithstanding the foregoing, Executive
acknowledges during his employment with the Company, Executive may
engage in any other business activity, whether or not such business
activity is pursued for profit, or other pecuniary advantage,
including, without limitation, personal investments, conducting
private business affairs, participating on boards of nonprofit
foundations and similar activities which, in each such case, do not
materially interfere with the services rendered by Executive under
this Agreement.
Greico Employment Agreement
2.1
Base Salary .
During the Employment Period, in exchange for the services provided
by Executive hereunder, Executive shall receive an annual
“Base Salary” of Two Hundred And Fifty Thousand Dollars
($250,000) commencing on the first day of the Employment Period,
payable in accordance with the Company’s regular payroll
practices and policies which are in effect from time to time. The
Board, and/or the Compensation Committee of the Board, as
applicable, shall review the Base Salary at least once a year to
determine whether the Base Salary should be increased effective
January 1
st of
any year during the Employment Period. The amount of the increase
shall be determined no later than two (2) weeks prior to the annual
filing of the Company’s Form 10k and any such increase shall
be retroactive until January 1
st of
the year in which the salary increase occurs. The Company shall
deduct and withhold all necessary social security and withholding
taxes and any other similar sums required by law from such Base
Salary, bonuses, benefits and other payments to the Executive, as
applicable.
2.2
Bonus .
During the Employment Period, the Executive shall be entitled to
receive an annual bonus based on increases in market capitalization
of the Company which occur subsequent to the Effective Date such
that Executive shall be entitled to the amount of five thousand
dollars ($5,000) for every one million dollar ($1,000,000) increase
in market capitalization, with the foregoing bonus being payable
each calendar quarter (“Quarterly Bonus”). Such
Quarterly Bonus shall be prorated for any partial increase in
market capitalization of the Company measured each quarter of the
year. The first $100,000 of this bonus earned in any particular
quarter will be paid in cash and the Company shall have the
discretion to pay any part of this Quarterly Bonus over $100,000
earned in that same quarter in the equivalent fair market value of
the Company’s registered common stock. By way of example, if,
during the first calendar quarter subsequent to the Effective Date,
the market capitalization of the Company increases from $60 million
to $62 million, Executive would be entitled to a Quarterly Bonus of
$10,000. If, however, the market capitalization of the Company was
only to remain at $60 million during the first calendar quarter
subsequent to the Effective Date, Executive would receive no
Quarterly Bonus. Notwithstanding the foregoing, Executive shall not
be entitled to any Quarterly Bonus if the amount of market
capitalization of the Company is below any previous market
capitalization amount on which Executive was paid. The amount of
such Quarterly Bonus shall be payable to Executive within fifteen
(15) days of the end of each calendar quarter. In addition to and
without in any way limiting Executive rights to receive the
Quarterly Bonus, Executive shall also be entitled to participate in
any bonuses provided to senior management personnel of the Company
as determined by the Board in their discretion.
2.3
Equity Incentive Award .
Concurrently herewith, the Company is granting Executive an award
consisting of options to purchase One Million Four Hundred Thousand
(1,400,000) shares of common stock of the Company. The exercise
price per share will be equal to the fair market value per share on
the date the option is granted by the Board, pursuant to the terms
of the 2007 Stock Option Plan and Stock Option Agreement of the
Company, or any successor thereto, as applicable. The Board shall
grant said stock options to Executive no later than September 30,
2007. Executive will vest in 400,000 of the option shares on the
Effective Date, and in 25% of the remaining 1,000,000 option shares
on the first anniversary of the Effective Date before the
expiration of Executive’s first term of employment with the
Company. The balance will vest in thirty six equal monthly
installments over the following three years of services, as
described in the applicable stock option agreement. Executive shall
continue to have the right to exercise any vested options for a
period of at least twelve (12) months after the date of termination
of employment for any of the reasons set forth in paragraph 4,
below, other than for a termination for Cause. Additionally,
Executive shall be entitled to participate in any equity grants
provided to senior management personnel of the Company under the
2007 Stock Option and Equity Incentive Plans or any successor
thereto as determined by the Board in their
discretion.
Greico Employment
Agreement
2.4
Expense Reimbursements .
The Company agrees that during the Employment Period, the Executive
shall be authorized to incur ordinary and necessary expenses in
connection with the promotion, operation and furtherance of the
business affairs of the Company, including reasonable expenses
incurred for purposes of entertainment, travel, business and
educational/professional meetings, professional association
membership dues and fees (including but not necessarily limited to
AICPA and NYSSCPA), and expenses associated with continuing
education requirements, as shall be in accordance with normal
Company policy approved by the Board and which are in accordance
with Executive’s position as Chief Financial Officer of the
Company. The Executive shall be entitled to reimbursement by the
Company for such reasonable business expenditures upon presentation
by the Executive to the Company of an itemized account of such
expenditures, together with appropriate receipts and vouchers or
other evidence as shall be required for tax or accounting
purposes.
2.5
Auto Allowance .
The Executive shall be entitled to a monthly auto allowance of
Seven Hundred Fifty Dollars ($750) to be paid in accordance with
the Company’s standard payroll and expense
practices.
3.1
Health and Welfare .
During the Employment Period, Executive shall be eligible to
participate in the health and welfare benefits generally available
to other senior management employees of the Company and shall have
the same rights and privileges to participate in any employee
benefit plans and arrangements, in accordance with the
Company’s policies in effect from time to time as any other
senior management employee of the Company. The Executive, at his
election, may choose to continue his existing health insurance in
place of participating in the Company’s health insurance plan
and, upon this election, the Company shall reimburse Executive for
his monthly health insurance premiums incurred during the
Employment Period.
3.2
Pension & Retirement Benefits .
During the Employment Period, Executive shall be eligible to
participate in the qualified and nonqualified pension, profit
sharing and retirement plans generally available to other senior
management employees of the Company. Executive may begin
participating in the Company’s 401(k) Plan during the
enrollment period following the first 90 days of employment.
Company will match up to 3% of Executive’s base salary.
Executive is eligible to contribute up to the statutory limits as
specified in the Internal Revenue Code.
Greico Employment
Agreement
3.3
Vacation .
During the Employment Period, the Executive shall be entitled to
five weeks of vacation each full calendar year in accordance with
the Company’s policies and procedures related to vacation
time. Executive may accrue up to a maximum of 2 times his yearly
vacation allotment. However, upon reaching this maximum level of
accrual, Executive will cease to accrue additional vacation time
until the level of accrual falls below this maximum accrual cap.
The first year’s vacation will be prorated based on the
Effective Date of September 1, 2007. Executive will also receive 6
personal/sick days per year. Executive must be employed greater
than 90 days to use sick/personal days, which accrue at a rate of
1.85 hours per bi-weekly pay date.
| 4. |
TERMINATION OF EMPLOYMENT
|
4.1
Death or Disability .
If the Executive dies during the Employment Period, the
Executive’s employment shall be deemed to terminate on or
after the date of death, as of the date the Executive’s death
is established by reasonable documentation. If the Executive is
incapacitated or disabled by accident, sickness or otherwise so as
to render him mentally or physically incapable of fully performing
the essential functions of his position with reasonable
accommodation for a period of six (6) months or more during any
consecutive twelve (12) month period or twelve (12) consecutive
weeks, after such twelve (12) month period, the Company, in its
reasonable discretion, may terminate Executive’s employment
due to “Disability” by providing written notice of such
termination to Executive. A termination of Executive’s
employment, and the Employment Period, by either Executive or the
Company, for Disability shall be communicated to the other party by
written notice, and shall be effective the thirtieth (30
th )
day after receipt of such notice of Disability by the other
party.
4.2
Termination for Cause .
The Company may terminate the Employment Period and the
Executive’s employment for “Cause” (such
termination being hereinafter called a “Termination For
Cause”) by giving the Executive notice in writing of such
termination which sets forth in general the grounds for such
termination. Such termination shall be effective immediately upon
such notice. For purposes of this Agreement, “Cause”
shall mean: a) Executive’s conviction or plea of guilty or
nolo contendere to a felony or any crime involving dishonesty or
moral turpitude, b) his willful failure to perform any of his
material duties under this Agreement which results in demonstrable
material injury to the Company, or c) commission by Executive of an
act or omission that could adversely and materially affect the
Company’s business or reputation. If the Company contends the
Executive is in violation of either subparts (b) and (c) of this
paragraph, then it shall provide written notice to the Executive of
its contention and the factual basis therefore and shall provide
Executive a period of thirty (30) days to remedy or cure said
breach.
4.3
Termination Without Cause .
The Company may terminate Executive’s employment at any time
during the Employment Period without “Cause” by giving
the Executive written notice of such termination which shall be
effective immediately upon such notice.
4.4
Voluntary Termination .
Executive may terminate the Employment Period and his employment
hereunder by providing the Company with thirty (30) days written
notice of his resignation. Any termination of the employment of the
Executive hereunder by resignation (or other voluntary action of
the Executive) shall be deemed to be a “Voluntary
Termination.”
Greico Employment
Agreement
4.5
Termination by Executive for Good Reason.
Executive’s Employment Period may be terminated by Executive
for Good Reason. For purposes of this Agreement, “Good
Reason” shall mean termination by Executive for any reason on
or after a Change in Control, as defined below, or the occurrence
of any one or more of the following eve
|
