EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made as of the 1st day of August, 1998 between Global Med
Technologies, Inc., a Colorado corporation (the "Employer") and Xxxxxx X.
Xxxxxxxx (the "Employee").
WHEREAS, Employee is presently employed by Employer;
WHEREAS, Employer desires to continue the employment of Employee and has
negotiated with Employee with respect to the terms of such employment;
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the Employer and Employee hereby agree as follows:
ARTICLE I
TERM OF EMPLOYMENT
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1.1 Employment. The Employer agrees to continue to employ the Employee and
the Employee agrees to continue to be employed by the Employer upon the terms
and conditions hereinafter set forth.
1.2 Term. The employment of the Employee by the Employer as provided herein
shall commence August 1, 1998 and shall end November 1, 2001, unless otherwise
superseded by section 4.1 or 4.4.3, provided, however, that at the close of the
second year of this agreement the initial term hereof shall be automatically
extended for an additional two years beyond the initial term (for a new initial
term of five years from the Closing Date) unless Employer or Employee provides
notice of the contrary at least 90 days prior to the close of the second year.
1.3 Office and Support. Employee shall be provided an office and support
staff, including but not limited to secretarial services, at Employer's Wyndgate
division in Sacramento, California.
ARTICLE II
DUTIES OF THE EMPLOYEE
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2.1 Duties. The Employee shall be employed with the title of President and
Chief Operating Officer, Global Med Technologies, Inc. with responsibilities and
authority as are customarily performed by such an officer and as may from time
to time be assigned to Employee by Employer's Chairman and Chief Executive
Officer or Board of Directors. Employee shall report directly to the Chairman
and CEO of Global Med Technologies, Inc.
2.2 Extent of Duties. Employee shall devote substantially his full business
time, attention and energies to the business of the Employer.
2.3 Disclosure of Information.
2.3.1 The Employee recognizes and acknowledges that the information,
processes, developments, experimental work, work in progress, business, list of
the Employer's customers and any other trade secret or other secret or
confidential information relating to Employer's business as they may exist from
time to time are valuable, special and unique assets of Employer's business.
Therefore, Employee agrees that:
(i) Employee will hold in strictest confidence and not disclose,
reproduce, publish or use in any manner, whether during or subsequent to his
employment, without the express authorization of the Board of Directors of the
Employer, any information, process, development or experimental work, work in
process, business, customer lists, trade secret or any other secret or
confidential matter relating to any aspect of the Employer's business, except 1)
as such disclosure or use may be required in connection with Employee's work for
the Employer and 2) where such information or items have become publicly known
and made generally available through no wrongful act of employee.
(ii) Upon request or at the time of leaving the employ of the
Employer, the Employee will deliver to the Employer, and not keep or deliver to
anyone else, any and all notes, memoranda, documents and, in general, any and
all material relating to the Employer's business.
2.3.2 In the event of a breach or threatened breach by the
Employee of the provisions of this section 2.3, the Employer
shall be entitled to an injunction (i) restraining the
Employee from disclosing, in whole or in part, any
information as described above or from rendering any
services to any person, firm, corporation, association or
other entity to whom such information, in whole or in part,
has been disclosed or is threatened to be disclosed; and/or
(ii) requiring that Employee deliver to Employer all
information, documents, notes, memoranda and any and all
discoveries or other material as described above upon
Employee's leave of the employ of the Employer. Nothing
herein shall be construed as prohibiting the Employer from
pursuing other remedies available to the Employer for such
breach or threatened breach, including the recovery of
damages from the Employee.
2.4 Non-Solicitation.
2.4.1 Non-Solicitation of Employees: During the period of
employment and for a period of 12 months after the cessation
of employment for any reason, whether with or without cause,
it is agreed that the Employee shall not directly or
indirectly, either alone or in concert with others, solicit
or entice any employee of or consultant to the company to
leave the company or work for anyone or entity in
competition with the Employer. It is
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understood and agreed between the parties that this
non-solicitation provision is necessary for the protection
of trade secrets and other confidential information of the
Employer.
2.4.2 Solicitation of Customers: During the period of employment
and for a period of 12 months after the cessation of
employment for any reason, whether with or without cause, it
is understood that Employee shall not directly or
indirectly, either alone or in concert with others, solicit,
entice, or in any way divert any of the company's customers
(or potential customers with whom Employee has come in
contact while employed by Employer) or suppliers to do
business with any business entity in competition with the
company. It is understood and agreed between the parties
that this non-solicitation provision is necessary for the
protection of trade secrets and other confidential
information of the Employer.
ARTICLE III
COMPENSATION OF THE EMPLOYEE
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3.1 Compensation. As compensation for services rendered under this
Agreement, the Employee shall receive a salary at the rate of $125,000 per annum
to be paid in accordance with Employer's normal practices. The salary provided
in this subsection shall in no way be deemed exclusive and shall not prevent
Employee from participating in any other compensation or benefit plan of
Employer. Employee's salary shall be reviewed on an annual basis and if
Employee's performance is deemed satisfactory, his salary shall be increased at
least by an amount equal to the cost of living increase for the prior year,
providing that at least one other senior management's salary (CEO or CFO) is
increased by a similar cost of living raise. In addition, Employee shall be
eligible for a performance increase.
3.2 Incentive Compensation. Annually, on October 30 of each year while this
employment agreement is in effect, solely at the option of the Employer, the
Employee may be entitled to receive incentive compensation of up to 50% of
Employee's base salary of $125,000 per year. This incentive compensation shall
be based on objectives which shall be established by the parties by December 31
of each year for as long as the Employee continues his employment with the
Company. The terms and conditions of the incentive compensation are to be
determined solely by the CEO and/or the Board of Directors. The Employee shall
give input into the objectives.
3.3 Benefits. Employee shall be entitled to participate in all of
Employer's employee benefit plans and employee benefits, including any
retirement, pension, profit-sharing, stock option, insurance, hospital or other
plans and benefits which now may be in effect or which may hereafter be
adopted, it being understood that Employee shall have the same rights and
privileges to participate in such plans and benefits as any other executive
employee during the term of this Agreement. Participation in any benefit plans
shall be in addition to the compensation provided for in Section 3.1. Employer
shall pay premiums for health and dental insurance covering
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Employee and his son. Employee shall be provided with a car allowance of $450
per month. Employee shall be reimbursed for preapproved moving expenses to cover
the costs of relocating from San Jose, California to the metropolitan area of
Sacramento, California. If Employee is relocated to Denver, Colorado, employee
will be further reimbursed for preapproved moving expenses from Sacramento area
to Denver.
3.4 Stock Options. Employee acknowledges that he has received incentive
stock options (under Employer's Stock Option Plan) to purchase an aggregate of
350,000 shares of Employer's common stock. Employee shall purchase 10,000 shares
of Global Med stock in the open market from American Fronteer Capital, Inc. and
keep these shares for a minimum of eighteen months in order for this employment
contract to become effective. If Employee sells these 10,000 shares or any part
thereof prior to eighteen months, the Employee acknowledges that he will no
longer be entitled to twenty thousand of the options to become vested on
10/31/99. Twenty percent (20%) of the 350,000 options shall vest and become
exercisable upon Employee's completion of each year of employment with Employer,
as follows:
Shares Underlying Option Dates Exercisable Dates Vested
------------------------ ----------------- ------------
70,000 10/31/1998 10/31/2007 10/31/1998
70,000 10/31/1999 10/31/2007 10/31/1999
70,000 10/31/2000 10/31/2007 10/31/2000
70,000 10/31/2001 10/31/2007 10/31/2001
70,000 10/31/2002 10/31/2007 10/31/2002
If Employer: (i) sells substantially all of its assets, or (ii) merges or
consolidates with another entity or otherwise reorganizes whereby the total
market value of Employer's common stock exceeds $100,000,000 as a result of such
transaction (iii) terminates employee for any reason other than malfeasance
prior to employees contract expiration; then the entire 350,000 in options
granted to Employee shall become immediately 100% vested and immediately
exercisable on the date preceding the effective date of such sale, merger,
consolidation or other reorganization; provided, however, that Employer and
Employee acknowledge that a secondary public offering or private placement or
other such financing of Employer's securities is specifically excluded from this
accelerated vesting provision.
Notwithstanding any other provision in this Agreement, regardless of the
vesting Employee must be employed by Employer at the time of exercise in order
to exercise such options, as required by Employer's Stock Option Plan. However,
all of the stock options that are fully vested at the time the Employee or the
Employer terminates the Employee's employment, for any reason, shall be able to
be exercised by the employee within the exercisable period. If the Employee
decides that he does not want to exercise his fully vested options, then those
fully vested options will be rescinded and regranted as nonqualified options
under Global Med Technologies, Inc. Nonqualified Stock Option Plan provided,
however, that the Employee's termination is not for cause. Employee shall also
be entitled to receive additional stock options as additional compensation on
Employee's annual reviews based solely on the discretion of the Board of
Directors.
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3.5 Expenses. Employee shall be entitled to prompt reimbursement, upon
production of original receipts, for all reasonable expenses incurred by
Employee in the performance of his duties hereunder. Employer shall advance
reasonable estimates of such expenses upon request of the Employee.
ARTICLE IV
TERMINATION OF EMPLOYMENT
-------------------------
4.1 Termination. The Employee's employment hereunder may be terminated
without any breach of this Agreement only under the following circumstances:
4.1.1 By Employee. Upon the occurrence of any of the following events
this Agreement may be terminated by the Employee by written notice to Employer:
(i) the sale by Employer of substantially all of its assets;
(ii) a decision by Employer to terminate its business and
liquidate its assets;
(iii) the merger or consolidation of Employer with another entity
or an agreement to such a merger or consolidation or any other type of
reorganization;
(iv) Employer makes a general assignment for the benefit of
creditors, files a voluntary bankruptcy petition, files a petition or answer
seeking a reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any law, there shall have been filed any
petition or application for the involuntary bankruptcy of Employer, or other
similar proceeding, in which an order for relief is entered or which remains
undismissed for a period of thirty days or more, or Employer seeks, consents to,
or acquiesces in the appointment of a trustee, receiver, or liquidator of
Employer or any material party of its assets;
(v) there are material reductions in Employee's duties and
responsibilities without his written consent or a demotion from the position of
President;
(vi) termination by the Company of Employee's employment with the
Company for any reason other than cause (as defined in Section 4.14 below);
(vii) a five percent reduction in Employee's base compensation
(not including bonus), other than any such reduction which is part of, and
generally consistent with, a general reduction of officer's salaries; or
(viii) a material reduction by the Company in the kind or level
of employee benefits (other than salary and bonus) to which Employee is entitled
immediately prior to such reduction with the result that Employee's overall
benefits package (other than salary and
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bonus) is substantially reduced (other than any such reduction applicable to
officers of the Company generally).
4.1.2 Death. This Agreement shall terminate upon the death of
Employee.
4 1.3 Disability. The Employer may terminate this Agreement upon the
permanent or temporary disability of the Employee. Employee shall be considered
disabled (whether permanent or temporary) if: (1) he is disabled as defined in a
disability insurance policy purchased by or for the benefit of the Employee; or
(2) if no such policy is in effect, he is incapacitated to such an extent that
he is unable to perform substantially all of his duties for 30 consecutive days
for Employer that he performed prior to such incapacitation
4.1.4 Cause. The Employer may terminate the Employee's employment
hereunder for Cause. For purposes of this Agreement, the Employer shall have
"Cause" to terminate the Employee's employment hereunder upon the following: (1)
habitual neglect of duties or (2) willful breach of duties. The Employer will
provide notice of these and allow Employee 60 days time to cure.
4.2 Notice of Termination. Any termination of the Employee's employment by
the Employer or by the Employee (other than termination pursuant to subsection
4.1.2 above) shall be communicated by written Notice of Termination to the other
party. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of employment under the provision so
indicated.
4.3 Date of Termination. "Date of Termination" shall mean (i) if the
Employee's employment is terminated by his death, the date of his death; and
(ii) if the Employee's employment is terminated for any other reason, the date
on which a Notice of Termination is received by Employer or Employee.
4.4 Payment of Salary/Severance Pay Following Termination.
4.4.1 In the event of temporary or permanent disability of the
Employee as described in subsection 4.1.3 hereof, Employee shall be entitled to
receive all compensation and benefits payable up to the Date of Termination
notwithstanding his temporary or permanent disability during the 30 day period
preceding the Date of Termination; any such payment, however, shall be reduced
by disability insurance benefits, if any, paid to Employee under policies (other
than group policies) for which Employer pays all premiums and Employee is the
beneficiary.
4.4.2 Following the termination of this Agreement by the Employer for
Cause as provided in subsection 4.1.4 hereof, the Employee shall be entitled
only to compensation through the Date of Termination.
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4.4.3 Following the termination of this Agreement by the Employer for
any reason other than Cause, Death, or the temporary or permanent disability of
Employee, the Employee shall be entitled to compensation and benefits for twelve
months following the date of termination.
4.5 Remedies. Any termination of this Agreement shall not prejudice any
other remedy to which the Employer or Employee may be entitled, either at law,
equity, or under this Agreement.
ARTICLE V
INDEMNIFICATION
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5.1 Indemnification. To the fullest extent permitted by applicable law,
Employer agrees to indemnify, defend and hold Employee harmless from any and all
claims, actions, costs, expenses, damages and liabilities, including, without
limitation, reasonable attorneys' fees, hereafter or heretofore arising out of
or in connection with activities of Employer or its employees, including
Employee, or other agents in connection with and within the scope of this
Agreement or by reason of the fact that he is or was a director or officer of
Employer or any affiliate of Employer. To the fullest extent permitted by
applicable law, Employer shall advance to Employee expenses of defending any
such action, claim or proceeding. However, Employer shall not indemnify Employee
or defend Employee against, or hold him harmless from any claims, damages,
expenses or liabilities, including attorneys' fees, resulting from the gross
negligence or willful misconduct of Employee to include punitive damage claims
against the Employee. The duty to indemnify shall survive the expiration or
early termination of this Agreement as to any claims based on facts or
conditions which occurred or are alleged to have occurred prior to expiration or
termination.
ARTICLE VI
GENERAL PROVISIONS
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6.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
6.2 Arbitration. Any controversy or claim arising out of or relating to
this Agreement or the breach thereof shall be settled by arbitration in the City
and County of Sacramento, California, in accordance with the rules then existing
of the American Arbitration Association. Judgment upon the award may be entered
in any court having jurisdiction thereof. There shall be three arbitrators, one
to be chosen directly by each party at will, and the third arbitrator to be
selected by the two arbitrators so chosen. Each party shall be responsible to
pay the fees of the arbitrator he or she selects, and the fees of the third
arbitrator shall be borne equally by the parties. It is agreed and understood
that this arbitration clause means that each party waives their right to a jury
or bench trial over the controversies or claims mentioned in this paragraph. It
is further understood and agreed that the term "controversy or claim" as used in
this paragraph means any controversy or claim, including breach of contract,
breach of the covenant of good faith and fair dealing, discrimination claims,
harassment claims, claims of fraud, retaliation,
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whistleblowing, claims of violations of the Americans With Disabilities Act,
Older Workers Protection Act, and any and all other state and federal laws under
which a claim can be brought by the employee or employer. This provision shall
not restrict the right of either the employee or the employer to seek injunctive
relief from a court of competent jurisdiction.
6.3 Entire Agreement. This Agreement supersedes any and all other
agreements, whether oral or in writing, between the parties with respect to the
employment of the Employee by the Employer. Including but not limited to the
letter of resignation required and submitted by the Employee under the terms of
the Xxxx Xxxx/Fronteer Funding loan agreement.
6.4 Successors and Assigns. This Agreement, all terms and conditions
hereunder, and all remedies arising herefrom, shall inure to the benefit of and
be binding upon Employer, any successor in interest to all or substantially all
of the business and/or assets of Employer, and the heirs, administrators,
successors and assigns of Employee. Except as provided in the preceding
sentence, the rights and obligations of the parties hereto may not be assigned
or transferred by either party without the prior written consent of the other
party.
6.5 Notices. For purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to Employee: Xxxxxx X. Xxxxxxxx
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxx 00000
If to Employer: Global Med Technologies, Inc.
00000 X. Xxxxxx Xxxxxx, Xxxxx X-000
Xxxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxx, Chairman and CEO
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
6.6 Severability. If any provision of this Agreement is prohibited by or is
unlawful or unenforceable under any applicable law of any jurisdiction as to
such jurisdiction, such provision shall be ineffective to the extent of such
prohibition without invalidating the remaining provisions hereof.
6.7 Section Headings. The section headings used in this Agreement are for
convenience only and shall not affect the consideration of any terms of this
Agreement.
6.8 Survival of Obligations. Termination of this Agreement for any reason
shall not relieve Employer or Employee of any obligation accruing or arising
prior to such termination.
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6.9 Amendments. This Agreement may be amended only by written agreement of
both Employer and Employee.
6.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original but all of which, when
taken together, shall constitute only one legal instrument. This Agreement shall
become effective when copies hereof, when taken together, shall bear the
signatures of both parties hereto. It shall not be necessary in making proof of
this Agreement to produce or account for more than one such counterpart.
6.11 Fees and Costs. If any action at law or in equity (in civil
court or in arbitration) is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys fees, costs and necessary
disbursements in addition to any other relief to which that
party may be entitled.
6.3.2 Legal Review. The parties agree that the employee was
provided the opportunity to review this agreement with legal
counsel.
"EMPLOYER"
GLOBAL MED TECHNOLOGIES,INC.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Chairman and CEO
"EMPLOYEE"
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxxxx
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Schedule 2.1
Duties of Employee
Employee shall be responsible for the day to day operations of Wyndgate
Technologies as well as certain policy making decisions impacting day to day
operations. Employee will report to the Chairman and CEO of Global Med
Technologies, Inc.
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Schedule 3.3
Benefits
Employer shall pay 100% of the cost of health insurance under Employer's
health plan for Employee and Employee's son. Employee also will be entitled to
all paid holidays as customarily are extended to executive employees.
Employee will accrue vacation time at the rate of 13.33 hours per month.
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