EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), is made and entered into
this 1st day of September, 1998 between MEDICORE, INC., with offices at
0000 Xxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxx and 000 Xxxxxxx Xxxxxx,
Xxxxxxxxx Xxxxxxx, Xxx Xxxxxx ("Medicore"), and XXXXXX X. XXXXXXXX,
residing at 000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxx, Xxx Xxxxxx ("Xxxxxxxx").
R E C I T A L S
WHEREAS, Medicore and Xxxxxxxx have entered into employment
contracts, initially dated September 17, 1980, with the most recent
dated May 25, 1994, whereby Xxxxxxxx is employed as Chief Executive
Officer ("CEO"), President and Chairman of the Board of Directors
("Chairman"); and
WHEREAS, the parties desire to continue the employment relation-
ship; and
WHEREAS, the Board of Directors ("Board") has agreed to and
approved this Agreement.
NOW, THEREFORE, in consideration of continuing the employment rela-
tionship by entering into this Agreement, and in consideration of the
covenants and promises contained herein, the parties intending to be
legally bound under the terms hereof, Medicore and Xxxxxxxx agree as
follows:
1. Capacity and Services. Medicore hereby continues to employ
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Xxxxxxxx as its CEO and President and Xxxxxxxx accepts such employment.
Xxxxxxxx shall also serve as Chairman so long as he continues to be
elected by shareholders as a director. Xxxxxxxx'x duties are to be
those customarily performed by persons employed and serving in such
capacities, together with the perquisites commensurate thereto. As
Chairman and CEO Xxxxxxxx shall (i) preside over all meetings of the
shareholders and Board; (ii) be an ex officio member of all Board
committees (except committees which only permit outside directors
pursuant to applicable securities or stock exchange rules or regula-
tions, which meetings he shall attend in a consulting capacity); and
(iii) see that all orders and resolutions of the Board are carried into
effect. Xxxxxxxx agrees to devote to Medicore during the Term as
defined in Section 2 of this Agreement, his proper attention, diligence
and a substantial portion of his time, and to such other activities
(including civic activities) as will be of benefit to Medicore.
Medicore recognizes that Xxxxxxxx is the sole owner-operator of Xxxx &
Company, Inc. ("Xxxx"), a securities brokerage firm registered with the
Securities and Exchange Commission and a member of the National Associa-
tion of Securities Dealers, Inc. Xxxxxxxx will devote only that
necessary time to the activities of Xxxx, which shall not interfere or
be in conflict with his positions and responsibilities to Medicore. It
is recognized and understood that Xxxxxxxx is also an officer and
director of Techdyne, Inc. ("Techdyne") and Dialysis Corporation of
America ("DCA") (and their subsidiaries), each a public subsidiary of
Medicore, to which companies he devotes and may continue to devote all
necessary and required time and effort. During the Term of this
Agreement Xxxxxxxx shall also serve in such other offices, director-
ships and positions no less than the status and level he presently
holds in Medicore and its subsidiaries to which he may be elected or
appointed by the Board for no further consideration except as may be
approved by the Board. Xxxxxxxx shall perform such duties under the
direction of and in conformity with all reasonable standards and
policies established by the Board.
2. Term. The Term of employment under the provisions of this
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Agreement shall be for a period of five (5) years commencing September
1, 1998 and terminating on August 31, 2003 ("Term").
3. Place of Employment. Xxxxxxxx'x place of employment shall be
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northern New Jersey and only such other locations as shall be acceptable
to and approved by Xxxxxxxx.
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4. Compensation. In consideration of the services to be performed
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by Xxxxxxxx as herein set forth, Medicore agrees to and shall pay
Xxxxxxxx an annual salary of not less than TWO HUNDRED SIXTY-ONE THOUSAND
FIVE HUNDRED FOUR DOLLARS ($261,504) during the first year of this
Agreement, increasing in increments of no less than TEN THOUSAND
DOLLARS ($10,000) each year thereafter. This salary shall be subject to
annual review for increases and any bonuses shall be at the discretion of
the Board. The annual salary is to be paid in accordance with the
payroll procedures and practices from time to time applicable to execu-
tive officers. Such includes but is not limited to withholding of all
required federal, state, local and other taxes which Medicore is
required to withhold in accordance with applicable statutes and regula-
tions. In the event of employment for a fractional part of a month, the
monthly installments shall be pro rated accordingly.
5. Employee Benefits and Perquisites. Xxxxxxxx shall participate
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during the Term in employee benefit plans and other fringe benefits and
perquisite programs available to Medicore employees generally and to the
executive group of employees on the same terms and conditions applicable
to such employees generally and the executive group of employees.
Xxxxxxxx shall also be entitled to participate in any pension plan,
profit sharing plan, stock option plan, stock purchase plan, group life,
accident or other insurance plan presently in force or any similar plan
that may be adopted by Medicore.
6. Expenses. In addition to the salary, employee benefits and
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perquisites, Xxxxxxxx shall be entitled to reimbursement for such reason-
able expenses incurred in the performance of his duties hereunder and for
the benefit and promotion of the business of Medicore and its sub-
sidiaries, including but not limited to a reasonable allowance and
expenses for automobile, travel, entertainment and similar items.
7. Termination of Employment.
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(a) Disability. In the event Xxxxxxxx shall be unable, or
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fails, to perform services and his duties pursuant to this Agreement
through illness or mental or physical disability, and such failure or
disability shall exist for any consecutive ninety (90) days, during
which ninety (90) day disability period Xxxxxxxx shall continue to
receive his full compensation as otherwise provided in this Agreement,
Medicore shall have the option to continue the Agreement and pay
Xxxxxxxx his full compensation less any disability benefits payable to
Xxxxxxxx under the terms of any disability insurance program of
Medicore or to terminate this Agreement at any time such disability or
failure continues to exist by giving written notice to Xxxxxxxx of such
termination, which termination shall be effective on the 30th day after
receipt of such notice by Xxxxxxxx (the "Disability Effective Date"),
unless Xxxxxxxx returns to full-time performance of his duties prior to
the Disability Effective Date.
If Xxxxxxxx shall have been disabled and shall have returned to
work after the end of such disability, any new disability commencing
within sixty (60) days of the termination of the prior disability shall
be deemed a continuation of the prior disability, and the period of all
such disabilities shall be added together to determine the rights of
Xxxxxxxx hereunder.
At the end of any temporary disability, Xxxxxxxx shall return
to work, and this Agreement shall continue as though such disability had
not occurred, except where specifically provided to the contrary.
During the period of disability, Xxxxxxxx shall not receive any
allowance for expenses, except for his automobile expense allowance.
(b) Death. Xxxxxxxx'x employment shall automatically terminate
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upon his death.
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(c) By Medicore.
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(i) Medicore may terminate Xxxxxxxx'x employment only for
Cause. "Cause" means:
A. the willful and continued failure of Xxxxxxxx to
perform his duties under this Agreement (other than as a result of
physical or mental illness or injury), after the Board delivers to
Xxxxxxxx a written demand for performance that specifically identifies
the manner in which the Board believes that Xxxxxxxx has not performed
his duties; or
B. illegal conduct or gross misconduct by Xxxxxxxx,
in either case that is willful and results in material and demonstrable
damage to the business or reputation of Medicore.
No act or failure on the part of Xxxxxxxx shall be
considered "willful" unless it is done, or omitted to be done, by
Xxxxxxxx in bad faith or without reasonable belief that his action or
omission was in the best interests of Medicore. Any act or failure to
act that is based upon authority given pursuant to a resolution duly
adopted by the Board, or the advice of counsel for Medicore, shall be
conclusively presumed to be done, or omitted to be done, by Xxxxxxxx
in good faith and in the best interests of Medicore.
(ii) A termination of Xxxxxxxx'x employment for Cause
shall be effected in accordance with the following procedures. Medicore
shall give Xxxxxxxx written notice ("Notice of Termination for Cause") of
its intention to terminate his employment for Cause, setting forth in
reasonable detail the specific conduct of Xxxxxxxx that it considers to
constitute Cause and the specific provision(s) of this Agreement on
which it relies, and stating the date, time and place of the Board
Meeting for Cause. The "Board Meeting for Cause" means a meeting of
the Board at which Xxxxxxxx'x termination for Cause will be considered,
that takes place not less than ten (10) and not more than twenty (20)
business days after Xxxxxxxx receives the Notice of Termination for
Cause. Xxxxxxxx shall be given an opportunity, together with counsel,
to be heard at the Board Meeting for Cause. Xxxxxxxx'x termination for
Cause shall be effective when and if a resolution is duly adopted at the
Board Meeting for Cause by a two-thirds vote of the entire membership of
the Board, excluding employee directors, stating that in the good faith
opinion of the Board, Xxxxxxxx is guilty of the conduct described in the
Notice of Termination for Cause, and that conduct constitutes Cause under
this Agreement.
(d) Good Reason.
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(i) Xxxxxxxx may terminate employment for Good Reason or
without Good Reason. "Good Reason" means:
A. the assignment to Xxxxxxxx of any duties inconsis-
tent in any respect with Section 1 of this Agreement, or any other action
by Medicore that results in a diminution in Xxxxxxxx'x position,
authority, duties, or responsibilities, other than an isolated, insub-
stantial, and inadvertent action that is not taken in bad faith and is
remedied by Medicore promptly after receipt of notice thereof from
Xxxxxxxx;
B. any failure by Medicore to comply with any
provision of Sections 4, 5 and 6 of this Agreement, or the reduction
of any compensation or benefits as provided herein, other than an
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isolated, insubstantial and inadvertent failure that is not taken in
bad faith and is remedied by Medicore promptly after receipt of notice
thereof from Xxxxxxxx;
C. any purported termination of Xxxxxxxx'x employ-
ment by Medicore for a reason or in a manner not expressly permitted by
this Agreement ("Wrongful Termination");
D. any failure by Medicore to comply with Section 8
of this Agreement; or
E. any other substantial breach of this Agreement by
Medicore that either is not taken in good faith or is not remedied by
Medicore promptly after receipt of notice thereof from Xxxxxxxx.
(ii) Except upon the death of Xxxxxxxx or a Change in
Control as defined in Section 8 below, which occurrence shall cause and
result in the automatic termination of employment, a termination of
employment by Xxxxxxxx for Good Reason shall be effectuated by giving
Medicore written notice ("Notice of Termination") of the termination
within three (3) months of the event constituting Good Reason, setting
forth in reasonable detail the specific conduct of Medicore that consti-
tutes Good Reason and the specific provision(s) of this Agreement on
which Xxxxxxxx relies. A termination of employment by Xxxxxxxx for Good
Reason or for Wrongful Termination shall be effective on the fifth (5th)
business day following the date when the Notice of Termination is given,
unless the notice sets forth a later date (which date shall in no event
be later than thirty (30) days after the Notice of Termination is given).
In case a dispute exists as to the propriety of any Wrongful Termination
of Xxxxxxxx'x employment, Medicore or any successor agrees to continue to
provide Xxxxxxxx with all the compensation, benefits and perquisites
described in this Agreement until the resolution of such dispute. If
such termination is deemed to constitute a Wrongful Termination,
Medicore or such successor agrees to promptly pay Xxxxxxxx, in addition
to any other payment as required under this Agreement, all of Xxxxxxxx'x
attorneys' fees and expenses arising from the dispute plus interest at
the statutory rate for all sums due to Xxxxxxxx.
(iii) A termination of Xxxxxxxx'x employment by Xxxxxxxx
without Good Reason shall be effected by giving Medicore no less than
thirty (30) days' prior written notice of termination.
(e) Date of Termination. The "Date of Termination" means the
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date of Xxxxxxxx'x death, the date of Change in Control, the Disability
Effective Date, the date on which the termination of Xxxxxxxx'x employ-
ment by Medicore for Cause or Wrongful Termination or by Xxxxxxxx for
Good Reason is effective, or the date on which Xxxxxxxx gives Medicore
notice of a termination of employment without Good Reason, as the case
may be. Xxxxxxxx'x termination based upon Wrongful Termination, Change
in Control or Good Reason shall not be deemed a breach or default by
Xxxxxxxx of his obligations under this Agreement.
8. Change in Control. Change in Control shall mean there is an
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Acquiring Person, a Reorganization, Board Changes, or Liquidation and
Dissolution as defined herein:
8.1 Acquiring Person. Any person and affiliated or
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associated persons ("Group") who have acquired beneficial ownership
of twenty-five (25%) percent or more of the outstanding shares of
Medicore or who commence, or announce an intention to make a tender
offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or Group of 25% or more of such
outstanding shares of Medicore; provided, such acquiring person or
Group is not affiliated with Xxxxxxxx, nor was such acquisition of
Medicore shares initiated by Xxxxxxxx; and provided, further that if
any tender offer or exchange offer is not consummated or is con-
summated to an extent of less than 25% of the outstanding shares of
Medicore, then it shall not be deemed a Change of Control as defined
herein.
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8.2 Reorganization. A reorganization shall mean substantially
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all of the assets of Medicore, Techdyne or DCA are acquired by another
person or entity other than the existing Board (see Section 8.3) or a
reorganization involving the acquisition of Medicore, Techdyne or DCA by
another or any one of Medicore, Techdyne or DCA merging or consolidating
with another which is not approved by a majority of the existing Board
(see Section 8.3), or which is not approved by those persons who were
the beneficial owners immediately prior to such reorganization, merger,
share exchange or consolidation of outstanding voting securities of
Medicore, and who own immediately after such transaction more than
66 2/3% of the outstanding securities of the resulting corporation.
The reorganization shall be deemed to have occurred upon consummation
of the reorganization transaction.
8.3 Board Changes. Board changes shall be a modified Board
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which occurs on the date that a majority of the Board shall be persons
other than persons (a) for whose election proxies shall have been
solicited by the existing Board, or (b) who are then serving as
directors appointed by two-thirds (2/3) of the directors comprising the
existing Board to fill vacancies on the Board caused by death or
resignation (but not by removal) or to fill newly created directorships.
8.4 Liquidation and Dissolution. Upon approval by Medicore's
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shareholders, exclusive of Xxxxxxxx or current affiliates of Medicore,
or persons affiliated with Xxxxxxxx, of a complete liquidation and
dissolution of Medicore.
Notwithstanding the occurrence of any of the foregoing,
the Board may determine, if it deems it to be in the best interest of
Medicore, that an event or events described in this Section 8 otherwise
constituting a Change in Control, shall not be so considered. Such
determination shall be effective if it is made by the Board prior to
the occurrence of an event that otherwise would be or probably would
lead to a Change in Control or after such event if made by the Board a
majority of whose members is comprised of directors who were members of
the Board immediately prior to the event that otherwise would be or
probably would lead to a Change in Control. Upon such Board determina-
tion such event or events shall not be deemed to be a Change in Control
for any purposes herein.
9. Obligations of Medicore Upon Termination.
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(a) Change in Control, Wrongful Termination, Death or Disa-
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bility. If this Agreement is terminated by Medicore or any successor
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based on Wrongful Termination or upon the occurrence of any Change in
Control, Xxxxxxxx'x death or the Disability Effective Date, Xxxxxxxx
shall be entitled to receive from Medicore or its successor in one lump
sum payment (as severance allowance as provided in paragraph (c) of this
Section 9 and liquidated damages and to the extent permitted by law
without any obligation on Xxxxxxxx'x part to mitigate damages through
other employment or otherwise) an amount equal to Xxxxxxxx'x compensa-
tion, including expenses, benefits and perquisites as provided herein,
at such Date of Termination for the next three years ("Lump Sum
Payment"); provided, only with respect to termination due to Wrongful
Termination or Change in Control, such Lump Sum Payment will include
increases to which Xxxxxxxx would be entitled to for the next three
years from the Date of Termination with respect to such occurrences.
The Lump Sum Payment shall be made to Xxxxxxxx within thirty (30) days
of the Date of Termination; provided, that only with respect to termina-
tion due to the death of Xxxxxxxx, if Medicore does not have sufficient
cash to make the Lump Sum Payment as required in this Section 9, then
Medicore shall pay the amount of the Lump Sum Payment to Xxxxxxxx'x
estate or other designee as provided in writing by Xxxxxxxx in his Last
Will and Testament or document of similar import and intent ("Will") in
such amounts and installments as it is able within a period of but no
later than nine (9) months from date of Xxxxxxxx'x death. Interest will
accrue at a per annum rate on the amounts owed to Xxxxxxxx equal to the
coupon issue
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yield on a 52 week U.S. Treasury Xxxx determined as of the date that the
Lump Sum Payment is due ("Interest"). Interest shall accrue until the
payment to Xxxxxxxx is fully satisfied.
It is agreed that Xxxxxxxx has the option, at his sole
discretion, to elect to obtain from Medicore in lieu of such Lump Sum
Payment, 400,000 shares of Medicore common stock, $.01 par value, from
authorized and unissued capital stock or treasury shares or any combina-
tion of authorized and unissued shares and treasury shares (the
"Medicore Shares"), subject to adjustment as provided in this Agreement,
as soon as practicable upon notice to Medicore of his election to obtain
the Medicore Shares.
Further, upon any such termination as provided in this Section
9(a), any options, warrants or similar rights to acquire securities of
Medicore owned by Xxxxxxxx (collectively "Options") notwithstanding
anything in their terms to the contrary, shall be fully vested and
exercisable and Medicore or any surviving entity shall immediately
redeem all of Xxxxxxxx'x outstanding Options for cash in an amount equal
to the excess over the Option exercise price of the greater of (i) the
price per share paid in an acquisition by an Acquiring Person or in such
Reorganization, or (ii) the highest Fair Market Value of the stock of
Medicore during ten (10) days following a public announcement that an
Acquiring Person has acquired the requisite beneficial ownership of the
outstanding stock or ten (10) days following the commencement of or
announcement of an intention to make a tender offer or exchange offer
the consummation of which would result in the requisite beneficial
ownership by an Acquiring Person, or (iii) the Fair Market Value upon
a Change in the Board, on the date of death, on the Disability
Effective Date, or upon approval of a Dissolution and Liquidation, as
the case may be; provided, however, that within ten (10) days of
written notification to Xxxxxxxx of such redemption of Options, Xxxxxxxx
shall have the right to elect to keep his Options by written notifica-
tion to Medicore or its successor within five (5) days of the redemption
notification.
Fair Market Value means the closing price of a share of
Medicore common stock on the principal securities exchange on which
such shares are traded on the day immediately preceding the date as of
which Fair Market Value is being determined, or on the next preceding
date on which such shares are traded if no shares were traded on such
immediately preceding day; or if the shares are not traded on a
securities exchange, Fair Market Value shall be deemed to be the
average of the high bid and low asked prices of the shares in the
over-the-counter market on the day immediately preceding the date as
of which Fair Market Value is being determined or on the next preceding
date on which such high bid and low asked prices were recorded as
reported by NASDAQ or such other quotation system or medium. If the
shares are not publicly traded, Fair Market Value shall be determined
by the Board. In no case shall Fair Market Value be less than the par
value of a share, and in no event shall Fair Market Value be determined
with regard to restrictions other than restrictions which, by their
terms, will never lapse.
Medicore agrees to have sufficient capital stock available and
to amend, if necessary, its certificate of incorporation, from time to
time, based upon its obligation to issue the Medicore Shares to Xxxxxxxx;
and, to the extent that capital stock and/or treasury shares may then be
insufficient to cover the exercise of the option of Xxxxxxxx to obtain
the Medicore Shares in lieu of the Lump Sum Payment, Medicore agrees
that it shall take and use for Xxxxxxxx'x election such shares reserved
for other purposes, and/or to the extent additional shares of common
stock of Medicore are required, Medicore shall immediately repurchase
said shares in the open market or in privately negotiated transactions.
Medicore further agrees to file and cause to be approved any listing
agreements that may be required by any exchange or interdealer
quotation system upon which the Medicore Shares may then be trading
with respect to any additional shares that may be authorized, issued
and/or transferred to Xxxxxxxx under his option to elect such Medicore
Shares in lieu of the Lump Sum Payment as provided in this Section 9.
Medicore shall take any and all action, through its officers and/or
directors to cause such Medicore Shares to be immediately
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issued to Xxxxxxxx. Xxxxxxxx shall have the right to immediately vote
the Medicore Shares, to receive dividends and to have all the rights,
privileges and obligations of a shareholder with respect to the
Medicore Shares upon his written notice to Medicore of his election
to obtain such Medicore Shares in lieu of the Lump Sum Payment to which
he is entitled under this Section 9 ("Election Notice"), pending the
ministerial acts of issuance of such Medicore Shares to Xxxxxxxx.
At Xxxxxxxx'x request and option, subject to any applicable
securities laws, Xxxxxxxx may designate his spouse, children, siblings
or other immediate family members, which includes relations up to and
including first cousins, or a trust for their benefit of which Xxxxxxxx
is sole trustee, to own and hold record or beneficial title to all or
portions of such Medicore Shares obtained by Xxxxxxxx under this
Section 9.
(b) By Xxxxxxxx for Good Reason. If Xxxxxxxx terminates the
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employment for Good Reason, Medicore shall (i) continue to provide
Xxxxxxxx with the compensation, benefits, perquisites and expenses as
set forth in Sections 4 - 7, 11 and 13 as if he had remained employed
by Medicore pursuant to this Agreement through the Term; and, in
addition, all securities, options and warrants then owned by Xxxxxxxx
shall be fully vested and exercisable and shall remain in effect and
exercisable through the end of their respective terms, without regard
to the termination of Xxxxxxxx'x employment; or (ii) provide Xxxxxxxx
with the Lump Sum Payment together with the option to obtain the
Medicore Shares in lieu thereof, whichever payment is greater.
(c) Severance. If this Agreement terminates due to the
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expiration of time through the Term, and Medicore does not renew or
otherwise enter into an employment arrangement with Xxxxxxxx, then
Medicore, in consideration of Xxxxxxxx'x services, shall pay Xxxxxxxx
as a xxxxxxxxx allowance the Lump Sum Payment coupled with the option
given to Xxxxxxxx to elect, in lieu thereof, the Medicore Shares.
Upon receipt of the severance allowance, Xxxxxxxx will provide
Medicore with a general release, waiver and discharge with respect
to all charges, claims and causes of action which Xxxxxxxx may have
arising from or related to his employment or termination of his
employment.
(d) By Medicore for Cause; By Xxxxxxxx Other Than For Good
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Reason. If Xxxxxxxx'x employment is terminated by Medicore for Cause,
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or Xxxxxxxx voluntarily terminates employment during the Term other than
for Good Reason, Medicore shall pay Xxxxxxxx his compensation as
provided in this Agreement together with any and all other benefits and
expenses through the Date of Termination to the extent earned but not
yet paid.
10. Registration and Piggy-Back Rights.
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(a) Medicore grants and Xxxxxxxx shall have the right immedi-
ately upon his Election Notice and for a period of two years thereafter
to demand that Medicore register, on Form S-8 or other available
registration form under the Securities Act of 1933, as amended (the
"Act") or on Form I-A or other available qualified exemption form from
registration under the Act (hereinafter collectively referred to as
"Registration") in whole or in part (but not fewer than 50% of his
Medicore Shares) the Medicore Shares he obtains in lieu of his Lump
Sum Payment as provided in Section 9 ("Demand Registration"). Medicore
shall pay all costs and expenses of such Registration, excluding fees
and expenses of counsel for and other professionals advising Xxxxxxxx,
and underwriting discounts, commissions or expenses of Xxxxxxxx with
respect to the sale of the Medicore Shares. Medicore shall also
register Xxxxxxxx'x Xxxxxxxx Shares in those jurisdictions in which
Xxxxxxxx expects to sell his Medicore Shares; provided however, that
Medicore shall not be required to qualify to do business in such
jurisdiction or commit to a general consent to service of process
within the jurisdiction.
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(b) For a period of three years from any Xxxxxxxx Election
Notice, Medicore shall notify Xxxxxxxx of any Medicore proposed
Registration of Medicore's securities by Medicore. If Xxxxxxxx
notifies Medicore within thirty (30) days of such Medicore notifica-
tion that he desires to have all or any part of his Medicore Shares
(but not fewer than 50% of his Medicore Shares) covered by any such
Registration, then Medicore shall use its best efforts to include or
cause its underwriter to include the specified number of Medicore
Shares in such Registration. If any of the Medicore Shares is
covered by such Registration, Xxxxxxxx shall be obligated to pay
fees and expenses of Xxxxxxxx'x counsel and other professionals
incurred in connection therewith, underwriting discounts, com-
missions and expenses, if any, applicable to his Medicore Shares,
and his pro rata share of the Registration fees.
(c) In the case of a Registration pursuant to this Section
10, Medicore (i) will keep Xxxxxxxx advised as to the initiation and
progress of proceedings for such Registration and as to the completion
thereof, and (ii) at its expense, subject to the limitations as
provided above, will, with respect to a Demand Registration only, keep
such Registration effective for a period of at least nine months from
the initial effective date of the Registration. Xxxxxxxx agrees to
provide such information to Medicore as is reasonably requested by
Medicore which Medicore believes is necessary in order for Medicore to
register the Medicore Shares, and Xxxxxxxx shall execute such documents,
certificates and other instruments as Medicore reasonably determines is
necessary or appropriate in connection therewith.
(d) Medicore, at its expense, shall furnish to Xxxxxxxx such
reasonable number of prospectuses, offering circulars or other documents
incident to any Registration referred to in this Section 10 as Xxxxxxxx
from time to time may reasonably request.
(e) Subject to compliance with applicable securities laws,
Xxxxxxxx may transfer his Medicore Shares with the Registration rights
attached provided he notifies Medicore in writing with respect to the
identity of the new holder of the Medicore Shares with the Registration
rights attached. The Registration rights may not be transferred
separately from the Medicore Shares. Medicore may legend the certifi-
xxxxx evidencing the Medicore Shares which have Registration rights
attached to provide that before the Medicore Shares may be transferred
with the Registration rights attached, the holder shall notify Medicore
in writing as to the identity of the new holder. Notwithstanding
anything herein to the contrary, failure to so notify Medicore shall
not affect the transfer of the Medicore Shares, nor be grounds for
Medicore to refuse to transfer the Medicore Shares.
(f) Medicore may, if it elects to do so in its sole and
absolute discretion, elect to register shares of its authorized and
unissued common stock, and/or shares of common stock owned by other
stockholders of Medicore in any Registration pursuant to which the
Medicore Shares are registered.
(g) Medicore shall not be required to file more than one
Registration pursuant to Xxxxxxxx'x exercise of his Demand Registra-
tion right. In the event of transfer by Xxxxxxxx of all or part of
his Medicore Shares, the Demand Registration right may be so
exercised by a majority in interest of the Medicore Shares.
11. Anti-Dilution Provisions. The following adjustments apply to
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the number of Medicore Shares obtainable by Xxxxxxxx at his election
in lieu of the Lump Sum Payment as provided by Section 9 of this
Agreement.
In case Medicore shall at any time after the date of this
Agreement:
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11.1 pay a dividend or make a distribution in shares of
common stock; or
11.2 subdivide or combine its outstanding shares of common
stock; or
11.3 reclassify or change its outstanding shares of common
stock (other than a change in the par value to no par value or as a
result of a subdivision or combination) or consolidate with or merge
into another corporation (other than a consolidation or merger in
which Medicore is the surviving corporation and which does not result
in any reclassification or change of the outstanding shares of common
stock, except a change as a result of a subdivision or consolidation
of such shares or a change in par value) or sell or convey to another
corporation substantially all of its property; or
11.4 make any distribution of its assets to holders of its
common stock as a liquidating or partial liquidating dividend;
then the Medicore Shares shall include those additional
shares of common stock to which Xxxxxxxx would have been entitled had
he elected the option to acquire the Medicore Shares in lieu of the
Lump Sum Payment and such Medicore Shares were then outstanding on the
record date for the determination of those security holders entitled to
such distribution; and further, with respect to any asset distribution
or reclassification as provided herein, then Xxxxxxxx shall be entitled
to receive the amount of such dividend, distribution and/or assets (or
at the option of Medicore, a sum equal to the value of any such assets
at the time of such distribution as defined by the Board in good faith)
which would have been payable to him had he been the holder of record of
the Medicore Shares on the record date for determination of those
entitled to such distribution.
Medicore shall maintain appropriate reserves to ensure the
availability of additional funds, assets and shares, and the timely per-
formance of these anti-dilution provisions of this Section 11.
12. Full Settlement. Medicore's obligation to make the payments
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provided for in, and otherwise to perform its obligations under, this
Agreement shall not be affected by any set-off, counterclaim,
recoupment, defense, or other claim, right, or action that Medicore
may have against Xxxxxxxx or others. In no event shall Xxxxxxxx be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to him under any of the provisions
of this Agreement, and such amounts shall not be reduced, regardless of
whether Xxxxxxxx obtains other employment.
13. Insurance. Medicore shall during the Term maintain universal
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and term life insurance in the aggregate face value amount of $1,600,000,
insuring the life of Xxxxxxxx, in amounts and combinations of universal,
whole life, term or other such life insurance to be determined by and
between Medicore and Xxxxxxxx, and the ownership and beneficiaries to be
those persons and/or entities as directed and designated from time to
time in writing by Xxxxxxxx. Medicore shall provide Xxxxxxxx with
documentary proof of the purchase and maintenance of said insurance
policies on Xxxxxxxx'x life. Alternatively, Xxxxxxxx has the right to
purchase and maintain such life insurance policies and pay for the same,
and Medicore shall pay the premiums for such directly to Xxxxxxxx.
14. Vacation. Xxxxxxxx shall be entitled to no less than four
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weeks vacation per annum and other days away from his employment during
the Term in accordance with the policies and procedures of Medicore
from time to time in effect.
15. Indemnification. To induce Xxxxxxxx to accept employment and
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continue as an officer and director of Medicore and its subsidiaries,
Medicore agrees to indemnify and hold Xxxxxxxx harmless from
9
any losses, expenses (including attorneys' fees), judgments, fines,
amounts paid in settlement, actual and reasonably incurred by him in
any such investigation, action, suit or proceeding, including any
appeal thereof, and any other costs in connection with any proceeding
or claim made against Xxxxxxxx involving him by reason of his being or
having been an officer and/or director of Medicore and/or its subsidi-
xxxx, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of Medicore and/or its
subsidiaries, and with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. Such
indemnification shall be equivalent to that provided for pursuant to
the Florida statutes, in particular the Florida Business Corporation
Act, Title 18, Section 607, et seq. This indemnification provision is
not to otherwise modify or limit in any way the indemnification provided
by said corporate law of the State of Florida or that provided in
Medicore's certificate of incorporation or by-laws, and is to provide
Xxxxxxxx with the fullest indemnification in accordance with the law.
16. Non-competition. It is agreed for a period of two (2) years
---------------
from and after the termination of his employment, other than for
Changes in Control or Wrongful Termination as provided in Section 9
hereof, Xxxxxxxx shall not engage in any business either as partner,
owner, employee, 5% shareholder, agent or otherwise, at any place
within a radius of twenty (20) miles of Medicore's primary operations,
presently in Hialeah, Florida, which business competes directly with
any business then being conducted by Medicore at the time of such
termination.
In addition, in the event of termination of Xxxxxxxx, for
whatever reason, Medicore shall have the right to request Xxxxxxxx, by
an instrument in writing, at least ninety (90) days prior to such
termination if the termination was by Medicore, or within thirty (30)
days of receipt of notice of termination if such termination was by
Xxxxxxxx, that Xxxxxxxx shall not enter into, engage in or be connected
in any respect with any business in the United States in competition
with the business engaged in by Medicore at the time of such written
request, whether as an individual or for his own account, or as a
partner, joint venture, employee, agent, salesman or as an officer and
director or 10% shareholder in any corporation or otherwise. The
request, when made, shall state the period for which Xxxxxxxx shall
not enter into the above mentioned activities and further that Medicore
shall pay to Xxxxxxxx the sum of Four Thousand Dollars ($4,000.00) per
month with 5% increments for every twelve month period thereafter for
each month during such period, and said payments shall be made on the
first day of each month commencing with the first day of said period;
provided, however, that if the termination of the employment of
Xxxxxxxx shall be for felonious acts or any other material dishonest
practice against Medicore, as determined by a court of law, the initia-
tion of proceedings for which will be promptly pursued, then upon
appropriate notice by Medicore of the requested non-competition by
Xxxxxxxx as provided above, the monthly payment of Four Thousand
Dollars ($4,000.00) shall be paid into an interest bearing escrow
account until a determination is made by the aforementioned court, but
not including any appeal therefrom. If the determination of the court
indicates that the termination of employment of Xxxxxxxx was for
felonious acts or any other material dishonest practice against
Medicore then the money so escrowed, plus interest, will be remitted
to Medicore and there will be no liability or obligation of Medicore
to Xxxxxxxx with respect to the above non-competition provision.
Should the determination of the court indicate that no felonious act
or dishonest practice against Medicore or any breach of the conditions
of this Agreement were caused by Xxxxxxxx then the money so escrowed,
plus interest, shall be paid to Xxxxxxxx.
Notwithstanding any provision in this Agreement herein
contained to the contrary, Xxxxxxxx shall be permitted to do any one
of the following:
(a) Xxxxxxxx shall be entitled to engage in any business with
anyone in competition with Medicore, as long as such activities are
located outside of the twenty (20) mile radius of Medicore's operations
as set forth above in this Section 16, even if termination is pursuant
to a dishonest practice; or if
10
pursuant to the voluntary request for more extensive non-competition,
then such activities are located outside of the United States of
America; and
(b) Xxxxxxxx shall be entitled to conduct any activities for
an eleemosynary organization.
17. Confidentiality. Other than for Wrongful Termination or Change
---------------
in Control as provided in Section 9 hereof (i) Xxxxxxxx, directly or
indirectly, shall not discuss, use, patent, publish, copyright or divulge
to others, either during or for a period of two (2) years after the Term
or Date of Termination, any secret or confidential information of
Medicore, Techdyne or DCA, or their subsidiaries, whether or not
acquired or developed by Xxxxxxxx in the course of his employment here-
under; and (ii) Xxxxxxxx will not induce any employee of Medicore,
Techdyne or DCA, or their subsidiaries, to leave or otherwise take any
employee of Medicore, Techdyne or DCA, or their subsidiaries, with him
upon Xxxxxxxx'x termination of employment or for one (1) year
thereafter.
For purposes of this Agreement, the term "Confidential Informa-
tion" includes all information relating to the financial, business,
management and other affairs of and information about Medicore, Techdyne
and DCA, except shall not include information which (a) becomes
generally available to the public other than as a result of an unlawful
or improper disclosure, (b) is available to another party on a non-confi-
dential basis absent any restrictions or limitations prior to its
disclosure to such party by Xxxxxxxx, or (c) becomes available to
another party on a non-confidential basis from a source other than
Xxxxxxxx which such source is entitled to make the disclosure to the
other party without restriction or limitation.
18. Attorneys' Fees. Medicore agrees to pay, as incurred, to the
---------------
fullest extent permitted by law, all legal fees and expenses that
Xxxxxxxx may reasonably incur as a result of any contest relating to
(provided that Xxxxxxxx is the prevailing party with respect to such
contest) the validity or enforceability of or liability under, or
otherwise involving, any provision of this Agreement, together with
interest on any delayed payment at the applicable federal rate
provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of
1986, as amended.
19. Notices. Any notice required or permitted to be given under
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this Agreement shall be sufficient if in writing and delivered
personally or if sent by registered mail to his residence in the case
of Xxxxxxxx, or to its principal office in the case of Medicore. Either
party may change the address where such communications must be sent by
sending notice of such change to the other party as provided herein.
20. Binding on Successors. This Agreement shall inure to the
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benefit of and be binding upon the parties hereto and their respective
legal representatives, heirs, assignees and/or successors in interest
of any kind whatsoever; provided, however, that Xxxxxxxx acknowledges
and agrees that except as explicitly provided in this Agreement, he
cannot assign or delegate any of his rights, duties, responsibilities
or obligations hereunder to any other person or entity.
21. Waiver of Breach. The waiver by Medicore or Xxxxxxxx of a
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breach by either party of any provision hereof shall not operate or be
construed to operate as a waiver by either party of any subsequent
breach of any other provision hereof.
22. Entire Agreement. This instrument contains the entire final
----------------
agreement of the parties with respect to, and supersedes any and all
prior agreements between the parties hereto, both oral and written,
concerning the subject matter hereof and may not be amended or other-
wise changed orally, but only by an
11
agreement in writing and signed by the party against whom enforcement
of any waiver, change, modification, extension or discharge is sought.
23. Governing Law. This Agreement shall be governed and construed
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pursuant to the laws of the State of Florida, without giving effect to
conflicts of laws principles.
24. Severability. If any provision of this Agreement is held by a
------------
court of competent jurisdiction to be invalid or unenforceable, the
remainder of the terms and provisions of this Agreement shall remain
in full force and effect and shall in no way be affected or invalidated.
25. Independent Counsel. Medicore and Xxxxxxxx agree that each of
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them have been, or were advised and fully understand that they are
entitled to be, represented by independent legal counsel with respect to
all matters contemplated herein, from the commencement of negotiations at
all times through the execution hereof.
26. Board Approval. By execution of this Agreement, Medicore
--------------
acknowledges that this Agreement has been reviewed and adopted by a
resolution approved by a majority of the members of the Board.
IN WITNESS WHEREOF, MEDICORE has caused this Agreement to be
executed in its corporate name by an authorized officer and its
corporate seal to be hereto affixed, and XXXXXX X. XXXXXXXX has
affixed his signature, all as to the date and year first above written.
MEDICORE, INC. XXXXXX X. XXXXXXXX
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxxxx
By:------------------------------ By:-----------------------------
XXXXXX X. XXXXX, Vice President XXXXXX X. XXXXXXXX
Employee
(Corporate Seal)
