EMPLOYMENT AGREEMENT
Exhibit 10.1
This Employment Agreement (hereinafter referred to as “Agreement”) dated as of January 1,
2011 (the “Effective Date”), by and between Vicor Technologies, Inc. (hereinafter referred to as
the “Company”) and Xxxxxxx X. Xxxxx, Ph.D. with an address of 0000 Xxxxxxxxx Xxxx., X.X., Xxxxx 000, Xxxx Xxxxx, XX 00000 (hereinafter referred to as “Executive”).
WHEREAS, the Company desires to secure the services of the Executive upon the terms and
conditions hereinafter set forth: and
WHEREAS, the Executive desires to render services to the Company upon the terms and conditions
hereinafter set forth which replaces his consulting agreement dated January 1, 2010.
NOW, THEREFORE, the parties mutually agree as follows:
1. Employment. The Company hereby employs Executive and the Executive hereby accepts such
employment as Chief Operating Officer, subject to the terms and conditions set forth in this
Agreement.
2. Duties. The Executive shall serve as the Chief Operating Officer of the Company as set
forth in Section 1 above. During the term of this Agreement, Executive shall devote all of his
business time to the performance of his duties hereunder. The Executive shall report directly to
the Chief Executive Officer.
3. Term of Employment.
(a) The term of the Executive’s employment shall be for a period of thirty-six (36) months
commencing on the date hereof, subject to earlier termination by the Company pursuant to Section 6
hereof (the “Term”)
4. Compensation of Executive.
a. Base Salary. The Company shall pay to Executive a base salary (the “Base Salary”) of
$150,000 Dollars per annum, less such deductions as shall be required to be withheld by applicable
law and regulations. Executive’s Base will be adjusted upward on each anniversary of the Effective
Date (or more frequently, at the Company’s discretion) by a percentage equal to not less than the
higher of the increase in the consumer price index for the preceding year or the increase in the
core rate of inflation for the preceding year, each as reported by the United Sates government, to
reflect cost of living increases.
b. Other Benefits. Executive will be entitled to participate in such incentive plans, bonus
plans and other benefits as are offered from time to time by the Company to its executive level
Executives, including medical coverage or reimbursement therefore for the Executive and his family
and an extended disability insurance plan, each at the Company’s cost, including any right to
receive any stock options. Executive will also be entitled to participate in any other benefits
that the Company may maintain from time to time for all Executives, provided that Executive meets
the respective eligibility requirements.
c. Expense Reimbursement. The Company agrees to reimburse Executive for all reasonable
expenses incurred by him in the discharge of his duties hereunder. The Executive agrees to
maintain records of such expenses in such form as the Company may request and make such records
available to the Company as and when requested.
d. Taxes. All sums payable to the Executive hereunder shall be subject to all federal, state
and municipal laws or governmental regulations now or hereafter in existence requiring the
withholding, deduction, or payment therefrom of sums for income or other taxes payable by or for or
assessable against the Executive.
e. Vacation. The Executive may take a maximum of four (4) weeks vacation during each twelve
(12) month period during the Term at times to be reasonably determined by mutual agreement between
the Company and Executive. Executive shall be entitled to carryover up to one (1) week per year of
unused vacation to future periods.
5. Inability to Perform Job Duties. If Executive becomes unable to substantially perform
his employment duties pursuant to this Agreement due to mental or physical incapacity (a
“Disability”), the Company shall continue his compensation under this Agreement at one-half of his
regular rate during the first three months of such Disability. Thereafter no compensation shall be
payable until such time as Executive becomes able to resume his job duties for the Company, except
to the extent any amounts are payable pursuant to any Company-maintained disability insurance. In
the event that Executive is Disabled for a cumulative period of greater than six (6) months within
any span of twelve (12) months, this Agreement and Executive’s employment may be terminated by the
Company. For purposes of this Agreement, Disability shall be determined by a medical doctor who is
mutually agreeable to the Company and the Executive; in the event that Company and Executive cannot
agree on a medical doctor, then each of Company and Executive shall select a medical doctor, and
the selected medical doctors shall select a third medical doctor who shall individually determine
whether Disability exists pursuant to this Section. Following a termination of this Agreement by
Company pursuant to this Section 5, Company shall pay to Executive all accrued compensation and
benefits and all normal post-termination benefits available under any of Company’s retirement plan,
insurance programs or other benefit plans.
6. Termination By Company For Cause. The Company may terminate this Agreement, and
Executive’s employment “for cause” at any time. As used herein, “for cause” shall mean any one of
the following:
a. The death of the Executive; or
b. The Executive has a guardian of his person or estate appointed by a court of competent
jurisdiction; or
c. The Executive is Disabled for a cumulative period of greater than six (6) months in any
twelve (12) month period; or
d. The conviction of the Executive of a felony or of any crime involving moral turpitude (but
excluding any offenses involving operation of a motor vehicle); or
e. The misuse, misappropriation or embezzlement of Company funds or property by Executive, or
f. Any willful gross neglect or willful gross misconduct of Executive resulting in material
economic harm to the Company; provided that the Company shall give Executive thirty (30) days’
written notice thereof during which thirty (30) day period Executive may cure same; or
g. The habitual and sustained use of alcohol or drugs by Executive which interferes with the
performance of Executive’s duties for the Company or.
h. The violation of Company written policy subject to cure provisions, if any, provided all
employees or executives under such written policy..
In the event the Company terminates Executive’s employment for cause, Executive’s right to
continued payment of salary and other compensation shall automatically terminate and be forfeited,
and the Company shall pay to Executive all compensation and benefits accrued through the date of
termination. In addition, Executive shall be entitled to any post-termination benefits to which
Executive would otherwise be entitled under any retirement plans, insurance programs or other
benefit plans.
7. Termination By Executive Without Cause. Executive may terminate this Agreement and his
employment with the Company without cause upon thirty (30) days prior written notice to the
Company. Executive may be required to perform his job duties and will be paid his regular
compensation up to the date of the termination. At the option of the Company, the Company may
require Executive to immediately terminate employment upon receiving said thirty (30) days’ notice
from Executive of the termination of this Agreement. In such event, the Company will pay to
Executive an amount equal to thirty (30) calendar days of his Base Salary.
8. Termination by the Company Without Cause or by the Executive for Good Reason.
a. The Executive may resign (and thereby terminate his employment under this Agreement) at any
time for Good Reason (as defined below), upon not less than thirty (30) days’ prior written notice
to the Company specifying in reasonable detail the reason therefor, provided, however, that if the
reason for resignation for Good Reason is susceptible of a cure, the Company shall have a period of
thirty (30) days after such written notice to effect a cure. For purposes of this Agreement, “Good
Reason” shall mean (a) any material failure by the Company to comply with any material obligation
imposed by this Agreement (including the failure of a successor to the Company to assume this
Agreement or any purported termination hereof which is not in compliance with any applicable notice
provisions hereof); (b) a reduction of Executive’s Base or a material reduction in the Executive’s
title, position, duties or responsibilities; (c) the Executive’s assignment to an office of the
Company located more than fifty (50) miles from the Company’s current Boca Raton, Florida office;
or (d) the Company’s creation of working conditions that a reasonable person in the Executive’s
position would consider unreasonable or intolerable, as conclusively determined by the Compensation
Committee. The Company may terminate the employment of Executive without cause and the Executive
may terminate the Agreement with Good Reason, in each case, at any time upon 30 days’ prior written
notice,
provided that in either such event the Company shall be obligated to pay Executive, in a lump
sum within fifteen (15) days of the date of termination of employment, an amount equal to 100% of
the sum of (a) Executive’s then current Base Salary, and (b) any bonuses paid to Executive during
the 12 month period preceding the date of such termination. In addition, the Company shall maintain
the Executive’s health insurance, life insurance and disability insurance at its expense on the
same terms and conditions as existed during the Executive’s employment for the unexpired Term of
this Agreement; provided, that such benefits will not be continued in the event that Executive
obtains similar benefits in connection with any future employment. Moreover, in such event,
Executive shall be entitled to receive all other customary post-termination benefits under the
Company’s retirement plans, insurance programs, and other benefit plans, and Executive shall be
entitled to acceleration of any vesting under any long-term incentive plans, including the vesting
of any unvested stock options or stock warrants.
9. Agreement Not to Use or Disclose Confidential or Proprietary Information. During the
term of this Agreement and a period of two (2) years thereafter, Executive promises and agrees that
he will not disclose or utilize any confidential or proprietary information acquired during the
course of service with the Company and/or its related business entities, Executive shall not
divulge, communicate, use to the detriment of the Company or for the benefit of any other person or
persons, or misuse in any way, any confidential or proprietary information pertaining to the
business of the Company. Any confidential or proprietary information or data now or hereafter
acquired by Executive with respect to the business of the Company (which shall include, but not be
limited to, information concerning the Company’s financial condition, prospects, technology,
customers, suppliers, methods of doing business and promotion of the Company’s products and
services) shall be deemed a valuable, special and unique asset of the Company that is received by
Executive in confidence and as a fiduciary. For purposes of this Agreement “confidential or
proprietary information” means information disclosed to Executive as a consequence of or through
his/her employment by the Company (including information conceived, originated, discovered or
developed by Executive) prior to or after the date hereof and not generally known or in the public
domain, about the Company or its business. This Section 12 is effective regardless of the reason
for the termination of the Agreement and regardless of whether the Agreement is terminated by the
Executive, the Company or by its own terms. This restrictive covenant may be assigned to and
enforced by any of the Company’s assignees or successors.
10. Covenant Not to Compete.
(a) Executive recognizes that the services to be performed by him hereunder are special,
unique and extraordinary. The parties confirm that it is reasonably necessary for the protection of
Company that Executive agree, and accordingly, Executive does hereby agree, that he shall not,
directly or indirectly, at any time during the term of the Agreement and the “Restricted Period”
(as defined in Section 10(e) below):
(i) except as provided in Subsection (d) below, be engaged in the research,
development/creation, marketing, sale or distribution of pharmaceutical and/or medical products
that compete directly or indirectly with the Company’s products or proposed products, or provide
technical assistance, advice or counseling regarding such competing products in any state in the
United States, either on his own behalf or as an officer, director, stockholder, partner,
consultant, associate, Executive, owner, agent, creditor, independent contractor, or
co-venturer of any third party; or
(ii) employ or engage, or cause or authorize, directly or indirectly, to be employed or
engaged, for or on behalf of himself or any third party, any Executive or agent of Company or any
affiliate thereof in a manner which directly or indirectly competes with the Company.
(b) Executive hereby agrees that he will not, directly or indirectly, for or on behalf of
himself or any third party, at any time during the term of the Agreement and during the Restricted
Period solicit any customers of the Company or any affiliate thereof in a manner which directly or
indirectly competes with the Company.
(c) If any of the restrictions contained in this Section 10 shall be deemed to be
unenforceable by reason of the extent, duration or geographical scope thereof, or otherwise, then
the court making such determination shall have the right to reduce such extent, duration,
geographical scope, or other provisions hereof, and in its reduced form this Section shall then be
enforceable in the manner contemplated hereby.
(d) This Section 10 shall not be construed to prevent Executive from owning, directly or
indirectly, in the aggregate, an amount less than or equal to one percent (I%) of the issued and
outstanding voting securities of any class of any company that directly or indirectly competes with
the Company whose voting capital stock is traded on a national securities exchange or on the
over-the-counter market other than securities of the Company. Furthermore, this Section 9 shall not
be construed to prevent Executive from owning, directly or indirectly, any number of issued and
outstanding voting securities of any company that does not directly or indirectly compete with the
Company.
(e) The term “Restricted Period,” as used in this Section 10, shall mean the period of
Executive’s actual employment hereunder plus a period of twelve (12) months thereafter.
(f) The provisions of this Section 10 shall survive the end of the Term as provided in Section
10(e) hereof.
11. Executive Conceptions and Developments. The Company shall own all Intellectual
Property Rights (as defined below) in and to, and, for the duration of such Intellectual Property
Rights shall have the exclusive rights to the commercial exploitation with respect to, all
Conceptions and Developments (as defined below) made individually or jointly by Executive during
the period while employed at Company (the “Covered Period”). Any Intellectual Property Rights as
to which Executive was an inventor, author or assignee, whether patentable or not, shall be
presumed to have been originally made during the Covered Period and subject to Company’s ownership.
For purposes hereof, the term “Conceptions and Developments” means all creative, expressive,
branding or technological conceptions, discoveries and developments related to the business of the
Company and the development of the Company’s products of any nature, including, without limitation,
conceptions for products and process, inventions, designs, writings, graphics, animations and other
works of authorship, specifications, drawings, methods,
formulas and branding proposals, and any implementations, improvements, derivative works or
modifications thereof and without regard to whether are patentable or copyrightable, and the term
“Intellectual Property Rights” means all U.S. and foreign patents, copyrights, trademarks, service
marks, tradenames, corporate names, trade secrets, rights of publicity and similar rights
(including without limitation all common law rights), domain names and all rights of priority under
international conventions to make application with respect thereto. All Conceptions and
Developments arising during the Covered Period are referred to as the “Covered Conceptions and
Developments”. In addition to any previous assignments, Executive assigns to the Company all
Intellectual Rights included the Covered Conceptions and Developments without regard to their being
patentable or copyrightable. All works of authorship included in the Covered Conceptions and
Developments that are eligible for protection under the Copyright Act shall be deemed “works made
for hire” to the extent they may qualify as such under 17 U.S.C. Section 101, and otherwise the
copyright therein shall be assigned by Executive to the Company at the time such works were made.
All Covered Conceptions and Developments, whether or not patentable, shall be promptly disclosed to
the Company in writing and shall be held in confidence by the Executive and treated as
“Confidential Information”, until such time as the Company, in its sole determination, shall elect
to make the subject matter thereof publicly known. Executive agrees that, at the expense of the
Company, he will, without additional compensation, take any such further action, including the
rendering of all lawful testimony and assistance; and the execution and delivery to such
instruments as the Company may require from time to time, to perfect, effectuate, register, record
or enforce the Company’s rights or interests in any of the Covered Conceptions and Developments.
Executive hereby irrevocably appoints the Company to be Executive attorney-in-fact to act in
Executive’s name, place and stead to do and execute any such act or instrument for the purpose of
this Section. The Company shall be under no liability to account to Executive for any revenue or
profit derived or resulting from the use, exploitation or licensing of any of the covered
Conceptions or Developments subject in this Section.
12. Injunctive Relief. In recognition of the unique services to be performed by Executive
and the possibility that any violation by Executive of Section 9, Section 10 or Section 11 of this
Agreement may cause irreparable or indeterminate damage or injury to Company, Executive expressly
stipulates and agrees that the Company shall be entitled, upon ten (10) days written notice to
Executive, to obtain an injunction from any court of competent jurisdiction restraining any
violation or threatened violation of this Agreement. Such right to an injunction shall be in
addition to, and not in limitation of, any other rights or remedies the Company may have for
damages.
13. Judicial Modification of Agreement. The Company and Executive specifically agree that
a court of competent jurisdiction (or an arbitrator, as appropriate) may modify or amend Section 9,
Section 10 or Section 11 of this Agreement if absolutely necessary to conform with relevant law or
binding judicial decisions in effect at the time the Company seeks to enforce any or all of said
provisions.
14. Resolution of Disputes by Arbitration. Any claim or controversy that arises out of or
relates to Executive’s employment, this Agreement, or the breach of this Agreement, will be
resolved by arbitration in Palm Beach County in accordance with the rules of the American
Arbitration Association. Judgment upon the award rendered by the arbitrator may be entered in
any court possessing jurisdiction over arbitration awards. This Section shall not limit or
restrict the Company’s right to obtain injunctive relief for violations of Section 9, Section 10 or
Section 11 of this Agreement directly from a court under Section 12 of this Agreement.
15. Miscellaneous.
a. Costs and Expenses. Each party hereto agrees to pay its own costs and expenses incurred in
negotiating this Agreement and consummating the transactions described herein. In the event either
party is required to seek legal counsel to enforce the terms and provisions of this Agreement, the
prevailing party in any action (including arbitration) shall be entitled to recover attorneys fees
and costs (including on appeal).
b. Choice of Law. This Agreement will be interpreted, construed and enforced in accordance
with the laws of the State of Florida and the proper jurisdiction and venue shall be the Circuit
Court in Palm Beach County, Florida.
c. Construction. The parties hereto and their respective legal counsel participated in the
preparation of this Agreement; therefore, this Agreement shall be construed neither against nor in
favor of any of the parties hereto, but rather in accordance with the fair meaning thereof.
d. Effect of Waiver. The failure of any party at any time or times to require performance of
any provision of this Agreement will in no manner affect the right to enforce the same. The waiver
by any party of any breach of any provision of this Agreement will not be construed to be a waiver
by any such party of any succeeding breach of that provision or a waiver by such party of any
breach of any other provision.
e. Counterparts. This Agreement may be executed in one or more counterparts, each of which
will be deemed an original and all of which together will constitute one and the same instrument.
f. Entire Agreement. This Agreement sets forth the entire agreement between the parties, and
supersedes any prior agreements or understanding between the Company and Executive. This Agreement
may be amended only in writing, signed by both parties.
g. Severability. If any provision of this Agreement is held invalid for any reason, such
invalidity shall not affect the enforceability of the remainder of this Agreement.
h. Notices. Any notices required or permitted or given pursuant to this Agreement to the
Company or Executive shall be in writing and shall be deemed given upon delivery in person or three
(3) days after sending by U.S. certified mail or registered mail, return receipt requested, first
class postage and registration fees prepaid, to the addresses listed below. The parties hereto
shall notify each other whenever their addresses shall change during the Term.
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, the parties have executed this Employment Agreement on the date set forth
below.
| Company | Executive | |||||||
| By: /s/ Xxxxx X. Xxxxx | /s/ Xxxxxxx X. Xxxxx | |||||||
Name:
|
Xxxxx X. Xxxxx | Xxxxxxx X. Xxxxx, Ph. D. | ||||||
Title:
|
Chief Executive Officer | |||||||
Date:
|
December 23, 2010 | Date: December 23, 2010 | ||||||
| 0000 Xxxxxxxxx Xxxx., X.X., Xxxxx 000 | 0000 Xxxxxxxxx Xxxx., X.X., Xxxxx 000 | |||||||
| Xxxx Xxxxx, XX 00000 | Xxxx Xxxxx, XX 00000 | |||||||
| (Address for Notices) | (Address for Notices) | |||||||
