Sample Business Contracts

Executive Employment Agreement - Star Scientific Inc. and Robert E. Pokusa

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  • Executive Employment Agreement. Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
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                             STAR SCIENTIFIC, INC.

     THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is entered into as
of March 30, 2001, by and between STAR SCIENTIFIC, INC., a Delaware corporation
(the "Company"), and ROBERT E. POKUSA ("Executive").


     A.   The Company is engaged in the research, development and
commercialization of smoking cessation products, potentially reduced-risk
smoking products and smokeless tobacco products focused upon the delivery of
less cancer-causing toxins (i.e. TSNAs).

     B.   The Company wishes to employ Executive and to have the benefit of his
professional skills and services, and Executive agrees to act as the Company's
General Counsel and devote his full time and attention as General Counsel, in
accordance with the terms set forth herein and specifically in Section 1(d).


     NOW, THEREFORE, the parties hereto agree as follows:


1.   Employment and Duties.

     (a) Position.  The Company hereby employs Executive, and Executive hereby
accepts employment with the Company, as its full-time General Counsel.

     (b) Duties.  Executive agrees to devote his best efforts to perform all
duties assigned to him by the Company's Chairman, President and Chief Operating
Officer and/or Chief Executive Officer in a trustworthy, professional and
business-like and loyal manner.

     (c) Reporting.  Executive shall report to the Company's Chairman, President
and Chief Operating Officer, Paul L. Perito, Esquire.

     (d) Devotion of Time to Company's Business.  During the Term of this
Agreement (as such term is defined in Section 1(e) hereof), Executive agrees (i)
to devote the time that is necessary to fulfill his duties and responsibilities
as a full time General Counsel, as determined by Senior Management; (ii) except
as noted below, not to engage in any other business duties or business pursuits,
(iii) not to render any legal services of a commercial or professional nature to
any individual, trust, partnership, company, corporation, business,
organization, group or other entity (each, a "Person"), whether directly or
indirectly for compensation or otherwise, without the prior written consent of
the Board of Directors ("Board"), and (iv) not to acquire, hold or retain,
whether directly or indirectly, more than a one percent (1%) interest in any
business competing with or similar in nature to the business of the Company or
any of its Affiliates (as such term is defined below); provided, however, that
Executive shall be permitted to (i) hold directorships and officerships in
companies which, as of the date hereof, have at least one class of stock listed
on the New York Stock Exchange, the American Stock Exchange or a market
maintained by the Nasdaq Stock Market, Inc. and expend reasonable amounts of
time attending meetings and conferring on matters relating to such


companies and (ii) serve on the board of directors or as an officer of any
charitable, religious or professional group so long as Executive shall devote
sufficient time to fulfill his role as full-time General Counsel of the Company
and provided further that such other activities will not interfere with or be
inconsistent with his functioning as the Company's full-time General Counsel.
Further, Executive agrees not to accept any new position as an officer or
director of any other company without first advising the Board of the
opportunity and receiving Board approval to assume such position. Subject to the
foregoing, the making of passive personal investments shall not be deemed a
breach of this Agreement or require the prior written consent of the Company if
those activities do not materially interfere with the services required of
Executive under this Agreement. For purposes of this Agreement, "Affiliates"
shall mean any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under the common control of,
the Company.

     (e) Term.  Unless sooner terminated as provided in Section 4 hereof, the
term of this Agreement shall be deemed to have commenced on March 30, 2001 and
shall continue for a term of thirty-six (36) months through March 30, 2004 (the
"Initial Term"), and shall be renewable for successive one (1) year terms (each,
a "Renewal Term") at the option of the Company.  Notice of renewal, if
applicable, shall be given to Executive in writing at least thirty (30) days
prior to the end of the Initial Term or the applicable Renewal Term, as the case
may be.  The Initial Term, together with any Renewal Terms shall be referred to
in this Agreement as the "Term of this Agreement." If the Company does not
provide notice of its intent to renew the Term of this Agreement in accordance
with this paragraph, the Agreement shall continue on a month-to-month basis
until either party notifies the other of the intent not to continue the
Agreement on a month-to-month basis. Notice of


an intent not to continue the Agreement on a month-to-month basis shall be
effective if provided at least fifteen (15) days prior to the completion of the
then-current monthly term.

     (f) Observance of Company Rules, Regulations and Policies.  Executive shall
duly, punctually and faithfully perform and observe any and all rules,
regulations and policies which the Company may now have or hereafter establish
governing the conduct of its business or its employees to the extent such rules,
regulations and policies are not in conflict with this Agreement.  Executive
shall promptly provide written notice to the Company's Chairman, President and
Chief Operating Officer and to the Board of Directors of any such apparent
conflict of which Executive becomes aware.

2.   Compensation.

     (a) Base Salary.  The Company shall pay to Executive an annual salary of
three hundred and eighty-five thousand dollars ($385,000) payable in bi-weekly
increments of approximately fourteen thousand eight hundred and eight dollars
($14,808) on a regular basis and in accordance with the Company's standard
payroll procedures for senior management in effect at the time of payment.

     (b) Discretionary Bonus.  In addition to the Base Salary, and assuming that
this Agreement remains in effect, Executive shall be eligible for a
discretionary bonus (the amount of such bonus to be at the discretion of the
Company's Chairman, President and Chief Operating Officer and/or the Company's
Chief Executive Officer), based on a variety of effective performance based


     (c)  Stock Option.

          (i)   Stock Option Grant.  The parties acknowledge and agree that, as
additional incentive to Executive, the Compensation Committee will recommend
and, upon Board approval, the Company will grant to Executive a Stock Option
(the "Option") to purchase up to fifty  thousand (50,000) shares of Common Stock
of the Company at fair market value as of the date of grant, pursuant to the
Company's standard form of stock option agreement under its 1998 or 2000 Stock
Option Plan (the "Plan").  To the extent permitted under applicable IRS
regulations, the Option shall be an incentive stock option and the remainder, if
any, shall be non-statutory stock options.

          (ii)  Vesting. The Option shall vest on the following schedule (A)
twenty-five thousand (25,000) shares shall be fully vested and exercisable as of
the date of grant, and (B) twenty-five thousand (25,000) shares shall vest and
become exercisable on March 15, 2002. However, if Executive dies or become
disabled (as defined in Section 4(b)), if Executive is terminated without Cause,
or if there is a change in control of the Company (as defined in Section
13(b)(i)-(iv) of the Company's 2000 Equity Incentive Plan), then the Option
shall vest and become immediately exercisable by Executive or his estate at the
time of such event.

          (iii) Termination.  To the extent not then fully vested, the Option
shall immediately terminate upon the earlier of the effective date of
termination of this Agreement; (A) by the Company for Cause (as such term is
defined in Section 4(c) hereof); or (B) voluntarily by the Executive (as such
term is defined in Section 4(e) hereof).

          (iv) Other Option Terms. All other terms of the Option shall be
determined in accordance with the Plan.


     (d) Travel/Automobile.  From the date of this Agreement until December 31,
2000, the Company will pay to Executive a monthly travel allowance of $1,000 in
light of anticipated travel by Executive between the Company's facilities in
Chevy Chase, Maryland; Chester, Virginia; and Petersburg, Virginia.  From
January 1, 2002 until such time as this Agreement is terminated, the Company
shall furnish Executive with an automobile and will reimburse Executive all
reasonable costs and expenses relating to Executive's use of the automobile,
including without limitation, amounts incurred for insurance, gas and general
maintenance and repair.

     (e) Vacation.  Executive shall be entitled to such annual vacation time
with full pay as the Company may provide in its standard policies and practices
for any other management executives and, in no event, less than 20 business days
per year.

     (f) Disability Insurance.  During the term of this Agreement, the Company
will pay for or contribute to a long-term disability insurance plan sufficient
to provide for total disability benefits of fifteen thousand dollars ($15,000)
per month between disability benefits available from the Company or through
Executive's plan.  Any amount contributed by the Company for such coverage shall
be in addition to the base salary described in Section 2(a).

     (g) Directors and Officers Liability Insurance.  Executive shall be
entitled to participate in, and have the benefit of, directors and officers
liability insurance to the same extent such coverage is provided to the
Company's other senior management executives.

     (h) Life Insurance.  The Company will provide Executive with term life
insurance coverage in the amount of $1,000,000, with the same terms and
conditions as the life insurance coverage currently being provided by
Executive's current employer, and will pay for or contribute to the payment of
all premiums with respect to such coverage.


     (i) Other Benefits.  Except to the extent specifically addressed herein,
Executive shall participate in and have the benefits of all present and future
vacation, holiday, paid leave, unpaid leave, life, accident, disability, dental,
vision and health insurance plans (including any key man executive health and
benefit programs), pension, profit-sharing and savings plans and all other plans
and benefits to the same extent such coverage is provided to the Company's other
management executives.

     (j) Withholding.  The parties shall comply with all applicable tax
withholding requirements in connection with all compensation payable to

3.   Expense Reimbursement.

     (a) General Business Expenses.  The Company shall reimburse Executive for
all business travel and other out-of-pocket expenses reasonably incurred by
Executive in the course of performing his duties under this Agreement.  All
reimbursable expenses shall be appropriately documented and shall be in
reasonable detail and in a format and manner consistent with the Company's
expense reporting policy, as well as applicable federal and state tax record
keeping requirements.

     (b) Professional Educational Expenses and Fees.  In addition, the Company
shall reimburse Executive for (i) all reasonable expenses incurred for
continuing education courses required to maintain Executive's professional
status and membership in good standing to the bars of the Commonwealth of
Virginia and the District of Columbia and (ii) all reasonable professional fees
and dues associated with Executive's professional status and state bar


4.   Termination and Rights on Termination.  This Agreement shall terminate upon
the occurrence of any of the following events:

     (a) Death.  Upon the death of Executive, in which event the Company shall,
within thirty (30) days of receiving notice of such death, pay Executive's
estate all salary then due and payable and all accrued vacation pay and bonuses,
if any, in each case payable or accrued through the date of death.  Executive's
estate shall not be entitled to any severance compensation.

     (b) Disability.  Upon the mental or physical Disability (as such term is
defined below) of Executive, in which event the Company shall, within thirty
(30) days following the determination of Disability, pay Executive all salary
then due and payable and all accrued vacation pay and bonuses, if any, in each
case payable or accrued through the date of determination of Disability.  For
purposes of this Agreement, "Disability" shall mean a physical or mental
condition, verified by a physician designated by the Company, which prevents
Executive from carrying out one or more of the material aspects of his assigned
duties for at least ninety (90) consecutive days, or for a total of ninety (90)
days in any six (6) month period.  Executive shall not be entitled to any
severance compensation.

     (c) Termination by the Company For Cause.  The Company may terminate this
Agreement at any time for Cause (as such term is defined below).  In this event,
the Company shall, within thirty (30) days following such termination, pay
Executive all salary then due and payable through the date of termination.  Upon
a termination under this section, Executive shall not be entitled to any
severance compensation or any accrued vacation pay or bonuses.  For purposes of
this Agreement, "Cause" shall mean:

          (i) Any conduct which, in the sole judgment of the Board of Directors,
has diminished the professional reputation of the Executive or has adversely
affected his ability to serve


as General Counsel of the Company. By way of example, and not of limitation, the
following types of conduct would be "cause" for termination hereunder; engaging
in competition with the Company, inducing any employee or any significant
customer, contractor, supplier, representative or distributor of the Company to
breach any contract with the Company, or to cease doing business, or limit
business activity, with the Company, intentionally making an unauthorized
disclosure of material confidential information of the Company, committing an
act of dishonesty, fraud, embezzlement or theft, otherwise engaging in
misconduct with respect to the property, business or affairs of the Company, or
deliberately disregarding the rules, regulations and policies of the Company in
such a manner as to cause loss, damage or injury to, or otherwise materially
endanger, or, in the sole judgment of the Board, adversely affect the property,
reputation, operations or employees of the Company;

          (ii) Gross negligence by Executive in the performance of his duties
hereunder, dereliction or negligence in performing any of such duties, or
refusal to abide by or comply with the directives of the Board;

          (iii) Conviction for a felony offense, a crime involving moral
turpitude, or any other offense which could reflect adversely upon the Company;

          (iv) Abuse of alcohol or drugs (legal or illegal) that, in the sole
judgment of the Board of Directors, impairs Executive's ability to perform his
duties hereunder.

     (d) Termination by the Company Without Cause.  The Company may terminate
this Agreement at any time without Cause by providing Executive with thirty (30)
days' written notice of termination, in which event the Company shall, within
thirty (30) days following the effective date of termination, pay Executive (i)
a lump sum payment equal to all salary then due and payable, and


all accrued vacation pay and bonuses, if any, and (ii) severance payments equal
to six (6) months' salary paid on a monthly basis.

     (e) Voluntary Termination by Executive.  Thirty (30) days after delivery by
Executive to the Company of a written notice terminating this Agreement for any
reason, in which event the Company shall, within thirty (30) days following the
effective date of termination, pay Executive all salary then due and payable
through the date of termination.  Upon a voluntary termination by Executive,
Executive shall not be entitled to any severance compensation or any accrued
vacation pay or bonuses.

     (f) Termination after change in control.  If there is a change in control
of the Company (as defined in Sections 13(b)(i) - (iv) of the Company's 2000
Equity Incentive Plan) and this Agreement does not continue in effect through
its initial term (i.e. through March 15, 2004) after such a change in control,
Company and/or the third party acquiring the Company will promptly advise
Executive of this decision and will within sixty (60) days of such notification
pay Executive (i) a lump sum payment equal to all salary then due and payable,
and all accrued vacation pay and bonuses, if any, and (ii) severance payments
equal to six (6) months salary paid on a monthly basis.

     (g) Effect of Termination.  All rights and obligations of the Company and
Executive under this Agreement shall cease as of the effective date of
termination, except that the obligations of the Company under this Section 4 and
Executive's obligations under Sections 5 and 6 hereof shall survive such
termination in accordance with their respective terms.


5.   Restriction on Competition.

     (a) Covenant Not to Compete.  The parties acknowledge that the Company is
placing Executive in a position of great trust, responsibility and authority by
virtue of this Agreement, and as a result, that Executive will be exposed to the
Company's most sensitive commercial and proprietary information.  The parties
also recognize and acknowledge that by virtue of his position, Executive will
come to be identified closely with the Company in the business and industries in
which the Company operates.  Executive further acknowledges that the Company's
interests in protecting its confidential information and its relationships are
both significant and difficult to quantify economically.  Therefore, Executive
agrees that during the Term of this Agreement and for a period of twelve (12)
months from the termination of this Agreement, Executive shall not, without the
prior written consent of the Company, either directly or indirectly, for himself
or on behalf of or in conjunction with any other Person (i) own, manage,
operate, control, be employed by, participate in, render services to, or be
associated in any manner with the ownership, management, operation or control
of, any business similar to the type of business conducted by the Company (which
is described in Recitals, Section A above) or any of its Affiliates within any
of the geographic territories in which the Company or any of its Affiliates
conducts business, (ii) solicit business of the same or similar type being
carried on by the Company or any of its Affiliates from any Person (as defined
in Section 1(d) above) known by Executive to be a customer of the Company or any
of its Affiliates, whether or not Executive had personal contact with such
Person during and by reason of Executive's employment with the Company, or (iii)
solicit any employee or contractor of the Company to terminate that relationship
or endeavor or attempt in any way to interfere with or induce a breach of any
contractual relationship


that the Company or any of its Affiliates may have with any employee, customer,
contractor, supplier, representative or distributor.

     (b) No Breach for Activities Deemed Not Competitive.  It is further agreed
that, in the event that Executive shall cease to be employed by the Company and
enter into a business or pursue other activities that, at such time, are not in
competition with the Company or any of its Affiliates, Executive shall not be
chargeable with a violation of this Section 5 if the Company subsequently enters
the same (or a similar) competitive business or activity.

     (c) Severability.  The parties desire the provisions of this Section 5 to
be enforceable to the greatest degree possible.  Therefore, the covenants in
this Section 5 are severable and separate, and the unenforceability of any
specific covenant shall not affect the provisions of any other covenant.  If any
provision of this Section 5 relating to the time period or geographic area of
the restrictive covenants shall be declared by a court of competent jurisdiction
to exceed the maximum time period or geographic area, as applicable, that such
court deems reasonable and enforceable, such time period or geographic area
shall be deemed to be, and thereafter shall become, the maximum time period or
largest geographic area that such court deems reasonable and enforceable and
this Agreement shall automatically be considered to have been amended and
revised to reflect such determination.

     (d) Fair and Reasonable.  Executive has carefully read and considered the
provisions of this Section 5 and, having done so, agrees that the restrictive
covenants in this Section 5 impose a fair and reasonable restraint on Executive,
are reasonably required to protect the interests of the Company, its Affiliates
and their respective officers, directors, employees and stockholders and that
the provisions would not unduly restrict his ability to make an adequate living
following the termination of his employment with the Company.  It is further
agreed that the Company and Executive intend


that such covenants be construed and enforced in accordance with the changing
activities, business and locations of the Company throughout the term of these

6.   Confidential Information.

     (a) Confidential Information.  Executive hereby agrees to hold in strict
confidence and not to disclose to any third party any of the confidential and
proprietary business, financial, technical, economic, sales and/or other types
of proprietary business information relating to the Company or any of its
Affiliates (including all trade secrets) in whatever form, whether oral,
written, or electronic (collectively, the "Confidential Information"), to which
Executive has, or is given (or has had or been given), access during the course
of his employment with the Company.  It is agreed that the Confidential
Information is confidential and proprietary to the Company because such
Confidential Information encompasses technical know-how, trade secrets, or
technical, financial, organizational, sales or other valuable aspects of the
business and trade of the Company or its Affiliates, including without
limitation, technologies, products, processes, plans, clients, personnel,
operations and business activities.  This restriction shall not apply to any
Confidential Information that (a) becomes known generally to the public through
no fault of the Executive, (b) is required by applicable law, legal process, or
any order or mandate of a court or other governmental authority to be disclosed,
or (c) is reasonably believed by Executive, based upon the advice of legal
counsel, to be required to be disclosed in defense of a lawsuit or other legal
or administrative action brought against Executive; provided, however, that in
the case of clause (b) or (c), Executive shall give the Company reasonable
advance written notice of the Confidential Information intended to be disclosed
and the reasons and


circumstances surrounding such disclosure, in order to permit the Company to
seek a protective order or other appropriate request for confidential treatment
of the applicable Confidential Information.

     (b) Return of Company Property.  In the event of termination of Executive's
employment with the Company for whatever reason or no reason, (a) Executive
agrees not to copy, make known, disclose or use, any of the Confidential
Information without the Company's prior written consent, and (b) Executive or
Executive's personal representative shall return to the Company (i) all
Confidential Information, (ii) all other records, designs, patents, patent
applications, business plans, financial statements, manuals, memoranda, lists,
correspondence, reports, records, charts, advertising materials and other data
or property delivered to or compiled by Executive by or on behalf of the Company
or its respective representatives, vendors or customers that pertain to the
business of the Company or any of its Affiliates, whether in paper, electronic
or other form, and (iii) all keys, credit cards, vehicles and other property of
the Company.  Executive shall not retain or cause to be retained any copies of
the foregoing.  Executive hereby agrees that all of the foregoing shall be and
remain the property of the Company and the applicable Affiliates and be subject
at all times to their discretion and control.

7.   Corporate Opportunities.

     (a) Duty to Notify.  During the Term of this Agreement, in the event that
Executive shall become aware of any business opportunity related to the business
of the Company, Executive shall promptly notify the Board of Directors of such
opportunity.  Executive shall not appropriate for himself or for any other
Person (as herein defined) other than the Company (or any Affiliate) any such
opportunity unless, as to any particular opportunity, the Board of Directors
fails to take appropriate


action within thirty (30) days after the date of notification by Executive.
Executive's duty to notify the Board of Directors and to refrain from
appropriating all such opportunities for thirty (30) days shall neither be
limited by, nor shall such duty limit, the application of the general laws
relating to the fiduciary duties of an agent or employee.

     (b) Failure to Notify.  In the event that Executive fails to notify the
Board of Directors or so appropriates any such opportunity without the express
written consent of the Board of Directors, Executive shall be deemed to have
violated the provisions of this Section notwithstanding the following:

          (i) The capacity in which Executive shall have acquired such
opportunity; or

          (ii) The probable success in the hands of the Company of such

8.   No Prior Agreements.  Executive hereby represents and warrants to the
Company that the execution of this Agreement by Executive, 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.
Further, Executive agrees to indemnify and hold harmless the Company and its
officers, directors and representatives for any claim, including, but not
limited to, reasonable attorneys' fees and expenses of investigation, of any
such third party that such third party may now have or may hereafter come to
have against the Company or such other persons, based upon or arising out of any
noncompetition agreement, invention, secrecy or other agreement between
Executive and such third party that was in existence as of the effective date of
this Agreement.  To the extent that Executive had any oral or written employment
agreement, consulting agreement or understanding with the Company, this
Agreement shall automatically supersede such agreement or understanding,


and upon execution of this Agreement by Executive and the Company, such prior
agreement or understanding automatically shall be deemed to have been terminated
and shall be null and void.

9.   Representation.  Executive acknowledges that he (a) has reviewed this
Agreement in its entirety, and/or (b) has had an opportunity to obtain the
advice of separate legal counsel prior to executing this Agreement, and (c)
fully understands all provisions of this Agreement.

10.  Assignment; Binding Effect.  Executive understands that he has been
selected for employment by the Company on the basis of his personal and
professional qualifications, experience and skills.  Executive agrees,
therefore, that he cannot assign or delegate all or any portion of his
performance under this Agreement.  This Agreement may not be assigned or
transferred by the Company without the prior written consent of Executive.
Subject to the preceding two sentences, this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the parties hereto and their
respective heirs, legal representatives, successors, and assigns.
Notwithstanding the foregoing, if Executive accepts employment with an
Affiliate, unless Executive and his new employer agree otherwise in writing,
this Agreement shall automatically be deemed to have been assigned to such new
employer (which shall thereafter be an additional or substitute beneficiary of
the covenants contained herein, as appropriate), with the consent of Executive,
such assignment shall be considered a condition of employment by such new
employer, and references to the "Company" in this Agreement shall be deemed to
refer to such new employer.


11.  Complete Agreement; Waiver; Amendment.  This Agreement is not a promise of
future employment.  Executive has no oral representations, understandings or
agreements with the Company or any of its officers, directors or representatives
covering the same subject matter as this Agreement.  This Agreement is the
final, complete and exclusive statement and expression of the agreement between
the Company and Executive with respect to the subject matter hereof and thereof,
and 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 a
writing signed by the party waiving the benefit of such term.

12.  Notice.  All notices, requests, demands and other communications required
or permitted to be given under this Agreement shall be in writing and shall be
given or made by personally delivering the same to or sending the same by
prepaid certified or registered mail, return receipt requested, or by reputable
overnight courier, or by facsimile machine to the party to which it is directed
at the address set out on the signature page to this Agreement or at such other
address as such party shall have specified by written notice to the other party
as provided in this Section, and shall be deemed to be given if delivered
personally at the time of delivery, or if sent by certified or registered mail
as herein provided three (3) days after the same shall have been posted, or if
sent by reputable overnight courier upon receipt, or if sent by facsimile
machine as soon as the sender receives written or telephonic confirmation that
the facsimile was received by the recipient and such facsimile is followed the
same day by mailing by prepaid first class mail.


13.  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 and inoperative. This
severability provision shall be in addition to, and not in place of, the
provisions of Section 5(c) above.  The Sections 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 this Agreement or of any part hereof.

14.  Equitable Remedy.  Because of the difficulty of measuring economic losses
to the Company as a result of a breach of the restrictive covenants set forth in
Sections 5 and 6 hereof, and because of the immediate and irreparable damage
that would be caused to the Company for which monetary damages would not be a
sufficient remedy, it is hereby agreed that in addition to all other remedies
that may be available to the Company at law or in equity, the Company shall be
entitled to specific performance and any injunctive or other equitable relief as
a remedy for any breach or threatened breach of the aforementioned restrictive

15.  Arbitration.  Except as provided in Section 14 hereof, any unresolved
dispute or controversy arising under or in connection with this Agreement or
otherwise concerning Executive's relationship with the Company, whether arising
in contract, tort or otherwise, shall be settled exclusively by arbitration
conducted in accordance with the rules of the American Arbitration Association
applicable to the arbitration of employment disputes then in effect.  The
arbitrators shall not have the authority to add to, detract from, or modify any
provision hereof, nor to award punitive damages to any injured party.  A
decision by a majority of the arbitration panel shall be final and binding.
Judgment may be


entered on the arbitrators' award in any court having jurisdiction. The
arbitration proceeding shall be held in the city where the principal office of
the Company is located. Notwithstanding the foregoing, the Company shall be
entitled to seek injunctive or other equitable relief, as contemplated by
Section 14 hereof, from any court of competent jurisdiction, without the need to
resort to arbitration. Should judicial proceedings be commenced to enforce or
carry out this provision or any arbitration award, the prevailing party in such
proceedings shall be entitled to reasonable attorneys' fees and costs in
addition to other relief.

16.  Governing Law and Governing Venue.  Any or all disputes, disagreements, or
litigation relating to or under terms of this Agreement, including any
arbitration or litigation relating to any arbitration under Section 15, must be
litigated and/or arbitrated in the Commonwealth of Virginia. In order to
effectuate this provision, the parties expressly consent to personal
jurisdiction in Virginia and to a Virginia venue.  This Agreement shall in all
respects be construed according to the substantive laws of the Commonwealth of
Virginia, without regard to its conflict of laws principles.

17.  Counterparts.  This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the parties to
this Agreement, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one

18.  Signatures.  The parties shall be entitled to rely upon and enforce a
facsimile of any authorized signatures as if it were the original.


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

COMPANY:                                       EXECUTIVE:


By:   /s/ Paul L. Perito                       By:  /s/ Robert G. Pokusa
    --------------------------------              -----------------------------
          (Signature)                                     (Signature)

Paul L. Perito, Chairman, President and COO    Robert E. Pokusa
Star Scientific, Inc.                          5322 Neville Court
7475 Wisconsin Avenue                          Alexandria, VA 22310
Suite 850
Bethesda, Maryland 20814                       Date:  3/15/01

Date:  March 14, 2001