EXHIBIT 10.2
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT (the "Agreement"), dated as of the 1st day of
February, 2004, between Zynex Medical, Inc., 0000 XxxxxXxxx Xxx X0, Xxxxxxxxx,
XX 00000 (the "Employer") and Xxxxxx Xxxxxxxxx, with address at 00000 Xxxxxxxx
Xx., Xxxxxxxxx, XX 00000 (the "Employee").
R E C I T A L S:
A. The Employer desires to employ the Employee.
B. The Employee desires to be so employed upon the terms and conditions below
set forth.
NOW, THEREFORE, in consideration of the terms and the mutual undertakings
contained herein, it is agreed as follows:
1. Term. Subject to the terms of this Section 1 and Sections 7, 8 and
9, this Agreement shall commence on February 1, 2004 and expire on January 31,
2007 (the date on which this Agreement shall expire, as such date may be
extended in accordance with the terms of this Section 1 is hereinafter referred
to as the "Expiration Date"). Subject to the terms of Sections 7, 8 and 9,
unless either party gives written notice to the other of its desire to terminate
this Agreement at least thirty days prior to the then current Expiration Date or
Extended Period (the "Termination Notification Date"), this Agreement will be
automatically extended for further period(s) of two years from the then current
Expiration Date (the "Extended Period") on the same terms and conditions as
herein set forth. Except when the contrary is indicated, the phrase "the term of
this Agreement" shall henceforth be deemed to include the Extended Period.
2. Employment. The Employer agrees to employ the Employee as Zynex Medical,
Inc.'s Chief Executive Officer and President, and the Employee accepts such
employment.
3. Duties.
a) The Employee shall render all services of the nature of the services that a
Chief Executive Officer would render to a company in the medical device area.
b) During the term of this Agreement, Employee shall devote his full time,
energy, skill and best efforts to promote Employer's business and affairs and to
perform his duties hereunder.
c) The Employee shall report directly to the Board of Directors of the Employer.
4. Compensation. The Employer shall pay to the Employee for the loyal
and consistent services provided to it hereunder: a fee at the rate of $14,500
per month during the term of this Agreement. The Employee's compensation shall
be reviewed at least annually for appropriate increases at the end of each year
as determined by the Board of Directors of the Employer. Employee shall also
receive at the end of each year during the term of this Agreement, bonus
compensation as determined by the Board of Directors of the Employer or if at
the end of such year the Employer has received net revenue in the amount of
$2,250,000 or more, Employee based on his performance as evaluated by the
determined by the Compensation Committee of the Board of Directors of the
Employer, shall receive a bonus payment equal to six (6) times his monthly
salary at the end of the year the payment is made.
5. Insurance and Benefits. During the term of this Agreement, the
Employee shall be entitled to participate in all employee benefit plans and
insurance programs, including company vehicle, which shall be provided from time
to time by the Employer to its employees (collectively, "Employee Benefit
Plans") in accordance with their terms and conditions. It is expressly
understood that Employee shall pay his withholding and other taxes applicable to
his income.
6. Termination. This Agreement may be terminated by the Employer for Cause
immediately upon written notice to the Employee. The term "Cause", as used
herein, shall mean the loss of any license necessary for the Employee to perform
his duties hereunder, or any willful misconduct, malfeasance, gross negligence
or other like conduct adversely affecting the best interests of the Employer,
including, without limitation, (i) the failure or neglect by the Employee to
perform his duties hereunder, (ii) the violation or attempted violation of any
provision hereof, (iii) the commission of any felony, including, without
limitation, any fraud against the Employer, any of its affiliates, clients or
customers of the Employer.
7. Return of Documents. On termination of this Agreement or at any time
upon the request of the Board of Directors of the Employer or its affiliates,
the Employee shall return to the Employer all documents, including all copies
thereof, and all other property relating to the business or affairs of the
Employer, including, without limitation, customer lists, agents or
representatives lists, commission schedules and information manuals, letters,
materials, reports, lists and records (all such documents and other property
being hereinafter referred to collectively as the "Materials"), in his
possession or control, no matter from whom or in what manner he may have
acquired such property. The Employee acknowledges and agrees that all of the
Materials are property of the Employer and releases all claims of right of
ownership thereto.
8. Confidentiality.
a) Employee acknowledges he will have access to operating, financial and other
information of Employer and customers of the Employer including, without
limitation, procedures, business strategies, and prospects and opportunities,
techniques, methods and information about, or received by it, from its customers
and that divulgence will irreparably harm the Employer ("Confidential
Information"). Employee also acknowledges that the foregoing provides Employer
with a competitive advantage (or that could be used to the disadvantage of the
Employer by a competitor). Employee also acknowledges the interest of the
Employer in maintaining the confidentiality of such information and Employee
shall not, nor any person acting on behalf of Employee, divulge, disclose or
make known in any way or use for the individual benefit of Employee or others
any of such Confidential Information. The foregoing is not applicable to such of
the Confidential Information that is established by Employee to be in the public
domain otherwise than as a result of its unauthorized disclosure by Employee or
any other person.
b) The customers of the Employer entrust the Employer with responsibility for
their business in the expectation that the Employer will hold all such matters,
including in some cases the fact that they are doing business with the Employer
and the specific transactions in which they are engaged, in the strictest
confidence ("Customer Confidences"). Employee covenants that after the
termination of his employment with the Employer, he will hold all Customer
Confidences in a fiduciary capacity and will not directly or indirectly disclose
or use such information.
c) Employee acknowledges that the Employer has a compelling business interest in
preventing unfair competition stemming from the use or disclosure of Customer
Confidences and Confidential Information in the event that, after any
termination on the post- employment activities of Employee, Employee goes to
work or becomes affiliated with a competitor of the Employer.
d) Employee further acknowledges that all customers he services or dealt with
while employed with the Employer are customers of the Employer and not
Employee's personally. Employee also acknowledges that, by virtue of his
employment with the Employer, Employee has gained or will gain knowledge of the
identity, characteristics and preferences of the customers of the Employer, and
that Employee will not use such Customer Confidences and Confidential
Information at any time.
9. Covenants Not to Compete or Solicit.
a) The Employee undertakes that during the term of this Agreement and for 24
months thereafter, he will not, directly or indirectly (whether as sole
proprietor, partner, stockholder, director, officer, employee or in any other
capacity as principal or agent) compete with, or participate in any business
that competes with, the Employer; provided that the Employee may invest in (i)
the securities of any business or enterprise (but without otherwise
participating in the activities of such business or enterprise) which are listed
on a national or regional securities exchange or traded in the over-the-counter
market, and (ii) equity interests of the Employer, of any member thereof.
b) The Employee undertakes that during the term of this Agreement and for a
period of 24 months thereafter he will not, directly or indirectly (whether as a
sole proprietor, partner, stockholder, director, officer, employee or in any
other capacity as principal or agent), do any of the following:
(i) hire, or attempt to hire for employment, any person who is an employee of
the Employer on the date of such termination of employment, or attempt to
influence any such person to terminate his employment by the Employer; or (ii)
in any other manner interfere with, disrupt or attempt to disrupt the
relationship, contractual or otherwise, between the Employer and any of its
employees, or disparage the business or reputation of the Employer to any such
person.
c) The Employee undertakes that during the term of this Agreement and for 24
months thereafter he will not, directly or indirectly (whether as a sole
proprietor, partner, stockholder, director, officer, employee or in any other
capacity as principal or agent), do any of the following:
(i) solicit, service or accept any actual or prospective accounts, clients or
customers of the Employer during the period of the Employee's employment by the
Employer; (ii) influence or attempt to influence any of the accounts, customers
or clients referred to in Subsection 9(c)(i) to transfer their business or
patronage from the Employer to any other person or company engaged in a similar
business; (iii) directly assist any person or company soliciting, servicing or
accepting any of the accounts, customers or clients referred to in Subsection
9(c)(i); or (iv) in any other manner directly interfere with, disrupt or attempt
to disrupt the relationship, contractual or otherwise, between the Employer and
any of its accounts, customers or clients referred to in Subsection 9(d)(i), or
any other person, or disparage the business or reputation of the Employer to any
such person.
(d) The Employer undertakes that during the term of this Agreement and for a
period of 60 months thereafter he will not, directly or indirectly, disparage
the business or reputation of the Employee to any accounts, customers or clients
referred to in Subsection 9(c)(i), or any other person.
10. Enforcement of Covenants.
The parties acknowledge and agree that the covenants contained in Sections 8 and
9 are essential elements of this Agreement and that, but for the agreements of
the Employee to comply with such covenants, the Employer would not have entered
into this Agreement. The parties further acknowledge and agree that a breach by
the Employee of the covenants contained in Sections 8 and 9 may result in
irreparable injury to the Employer for which there is no adequate remedy at law
and that the Employer shall be entitled to seek enforcement of the same by means
of a temporary restraining order and/or a preliminary or permanent injunction
issued by any court having jurisdiction thereof. In the event that the Employee
breaches any of the covenants contained in Sections 8 and 9, the Employer shall
be entitled to an accounting and repayment of all profits, Commissions and
benefits the Employee receives in connection with such breach.
The Employee agrees to indemnify and hold harmless the Employer against all of
its costs and expenses (including, without limitation, reasonable attorneys fees
and expenses) incurred in connection with the enforcement of the covenants
contained in Sections 8 and 9, except, with respect to the enforcement of any
such covenant by the Employer, to the extent that the Employer is the prevailing
party in any action or proceeding commenced by the Employer in connection
therewith. The covenants contained in Sections 8 and 9 shall survive the
termination of this Agreement. The remedies provided in this Section 10 shall be
in addition to, and not in lieu of, any other remedies and relief including
damages to which the Employer may be entitled.
11. Blue-Pencil. If any court of competent jurisdiction shall at any
time deem the term of any of the covenants and undertakings of the Employee
under Sections 8 and 9 herein too lengthy, the other provisions of those
Sections 8 and 9 shall nevertheless stand, the period of restriction shall be
deemed to be the longest period permissible by law under the circumstances. The
court in each case shall reduce the period of restriction to permissible
duration.
12. Notices. Unless otherwise specifically provided herein, all
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed, certified or registered mail, return receipt requested, with postage
prepaid at the following addresses, and/or to such other addresses and/or
persons which either party may designate by like notice:
(a) If to the Employee, to:
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Xxxxxx Xxxxxxxxx
00000 Xxxxxxxx Xx.
Xxxxxxxxx, XX 00000
(b) If to the Employer, to:
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Attn: Board of Directors
Zynex Medical, Inc.
0000 XxxxxXxxx Xxx, X0
Xxxxxxxxx, XX 00000
With a copy to:
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Xxx Xxxxxxxx, Esq.
Xxxx Xxxxx P.C.
000 Xxxxxxxxxxx Xxxxxx
Xxxxx 0000 Xxxxx Xxxxx
Xxxxxx, XX 00000
Fax No.: 000.000.0000
13. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Colorado without regard to
conflict of law provisions. Any disputes with respect to the interpretation of
this Agreement or the rights and obligations of the parties hereto shall be
exclusively brought in any federal or state court of competent jurisdiction
located in the State of Colorado. Each of the parties waives any right to object
to the jurisdiction or venue of such courts or to claim that such courts are an
inconvenient forum.
14. Additional Provisions.
(a) This Agreement shall inure to the benefit of, and be binding upon, the
Employer, its successors and assigns and shall inure to the benefit of, and be
binding upon, the Employee, his executors, administrators and heirs. The
Employee may not assign or delegate the performance of any of his rights and/or
obligations under this Agreement.
(b) This Agreement constitutes the entire Agreement, representation and
understanding of the parties hereto with respect to the subject matter hereof,
and no amendment or modification hereof shall be valid or binding unless made in
writing and signed by the parties hereto.
(c) No waiver of any provision of this Agreement shall be valid unless the same
is in writing and signed by the party against whom it is sought to be enforced.
No waiver of any default or breach of this Agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.
(d) Employee acknowledges that prior to the execution of this Agreement he had
full opportunity to consult with his independent attorneys and advisors as he
deemed appropriate and he fully understands the nature and scope of his rights
and obligations hereunder.
(e) If any provision of this Agreement is invalid or unenforceable in any
jurisdiction such provision shall, as to such jurisdiction, be ineffective to
the extent of such invalidity or unenforceability, but the foregoing shall not
render invalid or unenforceable in such jurisdiction the remainder of this
Agreement or the remainder of such provision or affect the validity or
unenforceability of any provision of this Agreement in any other jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement or caused this
Agreement to be executed on the date first above written.
Zynex Medical, Inc., "Employer"
/S/ XXXXXX XXXXXXXXX
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Secretary Board of Directors
By: Resolution of Board of Directors
Xxxxxx Xxxxxxxxx, "Employee"
/s/ Xxxxxx Xxxxxxxxx
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