EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit
10.43
AGREEMENT,
dated as of the 4th day of December, 2006, by and between Arrhythmia Research
Technology, Inc., a Delaware corporation (“ART”) having an office and place of
business at 00 Xxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter,
together with any consolidated subsidiary, referred to as the “Company”) and
Xxxxx X. Xxxxx, an individual (hereinafter referred to as
“Executive”).
W
I T N E
S S E T H:
WHEREAS,
the Company recognizes the Executive’s past and potential contribution to the
growth and success of the Company and the Board of Directors, on the advice
of
its Compensation Committee, desires to assure the Executive’s employment in an
executive capacity and Executive desires to continue to render services to
the
Company in such capacity; and
WHEREAS,
Executive is currently employed by the Company pursuant to an Employment
Agreement dated October 5,2001, and
WHEREAS,
the parties desire to further the goals of stability and security, both with
respect to the Company and with respect to the Executive by entering into this
Executive Employment Agreement (this “Agreement”);
NOW,
THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the Company and Executive hereby agree as follows:
1. Employment.
During
the Period of Employment (as hereinafter defined), and subject of the provisions
of this Agreement, the Company agrees to employ Executive, and Executive agrees
to be so employed in the capacity of President and Chief Executive Officer
of
ART and its wholly-owned subsidiary, Micron Products, Inc.
2. Term.
This
Agreement shall be effective as of October 5, 2006, (the “Effective Date”).
Subject to the terms hereinafter provided, the term of employment shall be
from
the Effective Date through the fifth anniversary of the Effective Date (the
“Period of Employment”).
3. Duties.
Executive agrees to perform such reasonable responsibilities and duties
commensurate with such executive and managerial positions as set forth in the
respective Bylaws of ART and Micron and shall at all times during the Period
of
Employment discharge his duties, in accordance with the policies of the Company
as established from time to time, under the supervision and direction of the
Company's Board of Directors. Executive shall conscientiously devote all of
his
time and attention and best efforts during working hours in the discharging
of
his duties. It is understood and agreed that Executive’s present duties
generally require a minimum of forty (40) hours during each working
week.
4. Compensation.
For all
services rendered by the Executive in any capacity during the Period of
Employment, including, without limitation, services as an executive officer,
director or member of any committee of the Company, or any subsidiary, affiliate
or division thereof, the Executive shall be compensated as follows:
a. Base
Compensation.
The
Company shall pay to Executive base compensation at the rate of $230,000 per
annum, commencing as of October 5, 2006, which base compensation shall be paid
to Executive in installments in accordance with the general practice of the
Company, subject to withholding and other applicable taxes. The Executive’s base
compensation, bonus and other perquisites shall be subject to an annual review
and modification by the Board of Directors in its discretion upon the
recommendation of the Compensation Committee, provided, however, that
Executive’s base compensation shall be increased by at least $10,000 as of
October 5, 2007, and by at least $10,000 as of October 5, 2008.
b. Bonus
Compensation and Option Plans.
In
addition to his base compensation set forth in Section 4(a) above, Executive
shall be entitled to participate in such bonus compensation and employee benefit
plans as the Company may institute from time to time in the discretion of the
Compensation Committee upon the approval of the Board of Directors, including
fringe benefit, defined compensation and stock option and stock award plans
or
programs of the Company, if any, to the extent that his position, tenure and
other qualifications make him eligible to participate, subject to the terms
of
such plans or programs and the discretion of the Compensation
Committee.
c. Expenses.
The
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him in accordance with the policies and procedures
established by the Board for the senior executive officers of the Company in
performing services hereunder and as required to preserve any deductions for
federal income taxation purposes to which the Company may be
entitled.
d. Other
Benefits.
The
Company agrees to provide to Executive such hospital, surgical, dental and
medical benefits and at a cost that is normally provided to its other executive
officers under the Company's group health plans together with paid sick leave,
all in accordance with the policies of the Company. In addition, the company
agrees to purchase, at its expense, a term life insurance policy on the life
of
the Executive in the amount of $500,000 for the benefit of Executive’s estate or
other beneficiary selected by Executive from time to time.
5. Non-Disclosure,
Inventions, Non-Solicitation and Non-Compete.
The
parties hereto recognize that it is fundamental to the business and operation
of
the Company, its affiliates, subsidiaries and divisions thereof to preserve
the
specialized knowledge, trade secrets, and confidential information of the
Company including, but not limited to, the research, development, design,
manufacturing processes, formulas, data, engineering and manufacturing,
know-how, design, improvements, discoveries, strategies, forecasts, projections,
proprietary software programs, trade secrets, licenses, prices, costs, supplier
lists, marketing practices, pricing practices, profit margins, analytical
techniques, concepts, ideas, customer and client agreements, vendor and supplier
agreements and information with respect to the Company’s proprietary processes
(whether or not patentable) which are not in the public domain (collectively,
the “Confidential Information”). In addition, the strength and good will of the
Company is derived from the specialized knowledge, trade secrets, and
confidential information generated from experience through the activities
undertaken by the Company, its affiliates, subsidiaries and divisions thereof.
The disclosure of any of such information and the knowledge thereof on the
part
of competitors would be beneficial to such competitors and detrimental to the
Company, its affiliates, subsidiaries and divisions thereof. By reason of his
position with the Company, in the course of his employment, the Executive has
or
shall have access to, and has obtained or shall obtain, specialized knowledge,
trade secrets and confidential information such as that described herein about
the business and operation of the Company, its affiliates, subsidiaries and
divisions thereof. Therefore, the Executive hereby agrees as follows,
recognizing and acknowledging that the Company is relying on the following
in
entering into this Agreement:
a. Confidential
Information.
Except
as required in the course of performing his duties hereunder, the Executive
shall keep secret and retain in strict confidence the Confidential Information,
and shall not use, disclose to others, or publish any information, other than
information which is in the public domain or becomes publicly available through
no wrongful act on the part of the Executive (which information shall be deemed
not to be Confidential Information) relating to the business, operation or
other
affairs of the Company, any affiliates, subsidiaries and divisions thereof,
including but not limited to Confidential Information and any and all other
trade secrets and Confidential Information acquired by him in the course of
his
past or future services for the Company or any affiliate, subsidiary or division
thereof. The Executive shall hold as the Company's property all notes,
memoranda, books, records, papers, letters, formulas and other data and all
copies thereof and therefrom in any way relating to the business, operation
or
other affairs of the Company, its affiliates, subsidiaries and divisions
thereof, whether made by him or otherwise coming into his possession. Upon
termination of his employment or upon the demand of the Company, at any time,
the Executive shall deliver the same to the Company within twenty-four (24)
hours of such termination or demand.
Executive
represents that he has not previously, other than as required to perform his
duties as an executive officer of the Company, disclosed any information or
knowledge that would have fallen within the definition of "Confidential
Information", that he has not transferred the physical embodiment of such
information or knowledge, and that he has not appropriated such information
or
knowledge for the benefit of himself or any third party.
b. Inventions.
Executive hereby assigns and conveys and agrees to assign and convey to the
Company all of his right, title,
and
interest in and to any Proprietary Inventions (as hereinafter defined) and
acknowledges that the Company is and shall be the exclusive owner of any
Proprietary Inventions, including patents and other rights related to any
discovery, invention, improvement, process, formula, or technique, whether
or
not patentable, that Executive made, may make, conceived, or reduced to
practice, either alone or with others, either (i) in the course of performing
work for the Company or at the Company's expense, or (ii) that results from
tasks assigned to him by the Company, or (iii) which relates to the business
of
the Company whose creation ordinarily would be associated with his then current
responsibilities as an Executive of the Company (hereinafter “Proprietary
Inventions”).
Executive
will promptly disclose to the Company all such Proprietary Inventions and will
help the Company, at its expense, obtain and enforce patents or Proprietary
Inventions in any countries it selects, and Executive will execute any related
documents, including, without limitation, application papers for patents,
assignments, affidavits and oaths of facts within his knowledge, and assignment
of his right, title and interest in and to Proprietary Inventions and related
patent applications and patents to the Company or its designee. Executive will
do any other things the Company requests to convey to, or vest in, the Company
the rights, titles, benefits, and privileges intended to be conveyed.
Executive's obligation under this paragraph shall continue after the termination
of his employment, subject to the Company's compensating him at a reasonable
rate for time actually spent by him at the Company's request after termination.
Executive
acknowledges that all works of authorship (including, without limitation, works
or authorship that contain software program code) that Executive produces
during, and within the scope of, his employment by the Company under this
Agreement or any prior or subsequent employment agreement, whether they are
or
are not created on the Company's premises or during hours in which he is
supposed to be rendering services to the Company, are works made for hire and
are the property of the Company, and that copyrights in those works of
authorship are the property of the Company. If for any reason it appears that
the Company is not the author of any such works of authorship for copyright
purposes, Executive hereby expressly assigns all of his rights in and to that
work to the Company and agrees to sign any instrument of specific assignment
requested.
If
Executive is identified as an inventor in any application for any United States
or foreign patent where the invention (i) is claimed to have been made,
conceived, or reduced to practice during the first year after termination of
his
employment by the Company and (ii) would have been a Proprietary Invention
relating to the Company’s business if it occurred before the termination of his
employment, then that invention shall be rebuttably presumed to be a Proprietary
Invention.
c. Non-Competition.
While
Executive is employed by the Company and for a period which is the greater
of
(i) two (2) years after Executive’s employment by the Company terminates or (ii)
the period for which Executive receives payments in accordance with Section
7(d)
hereof, he will not directly or indirectly engage in activities in competition
with the business activities of the Company, its subsidiaries and divisions,
or
perform services for or invest in any person, entity, or organization
competitive with the Company, whether as an individual, owner, partner,
stockholder, director, officer, employee, representative or consultant,
provided, however, that nothing herein shall limit or restrict the Executive’s
investment in less than 5% of the securities of a corporation subject to the
reporting requirements of Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended.
d. Non-Solicitation.
While
Executive is employed by the Company and for a period which is the greater
of
(i) two (2) years after Executive’s employment by the Company terminates or (ii)
the period for which Executive receives payments in accordance with Section
7(d)
hereof, he will not individually, or on behalf of or through any third party,
directly or indirectly, solicit, entice or persuade any employee, other
executive officer of or consultant to the Company to leave the services of
the
Company for any reason.
6. Assignment.
The
rights and obligations of the parties hereto shall bind and inure to the benefit
of each of the parties hereto and shall also bind and inure to the benefit
of
any successor or successors of the Company by reorganization, merger or
consolidation and any assignee of all or substantially all of the Company’s
business and properties, but, except as to any such successor or assignee of
the
Company, neither this Agreement nor any rights or benefits hereunder may be
assigned by the Company or the Executive.
7. Termination.
This
Agreement may be terminated during the Period of Employment as
follows:
a. Termination
for Cause by the Company; without Good Reason by Executive.
If the
Company terminates the Executive’s employment for “Cause” (as hereinafter
defined) or the Executive terminates his employment other than for “Good Reason”
(as hereinafter defined), the Period of Employment shall terminate immediately
and Executive shall be entitled to the compensation earned prior to the date
of
termination as provided for in this Agreement, computed pro rata up to and
including the date of termination. Executive shall be entitled to no further
compensation or benefits under this Agreement.
For
purposes of this Agreement, “Cause” for Executive’s termination shall exist at
any time after the happening of one or more of the following
events:
i. Executive
shall have committed any material breach of any material provisions or covenants
herein which the Executive does not or is unable to cure within fifteen (15)
days after the Company provides written notice of such breach to the Executive,
or
ii. Executive
shall have (x) committed any act of malfeasance or dishonesty against the
Company, or (y) been convicted of, or pleaded guilty or no contest to, fraud,
misappropriation or embezzlement or a felony involving a crime of moral
turpitude, or (z) engaged in conduct materially injurious to the Company; or
iii. Executive
shall have (x) willfully violated one or more written policies of the Company,
(y) failed or refused to comply with a lawful directive of the Board of
Directors, or (z) engaged in willful or gross neglect of duties for which the
Executive is employed (other than on account of a medically determinable
Disability (as hereinafter defined) which renders the Executive incapable of
performing such services).
For
purposes of this section, except upon failure to comply with a lawful directive
of the Board, no act or failure to act on the Executive’s part shall be
considered “willful” if done or omitted to be done by him in good faith and upon
reasonable belief that his act or omission was in the best interest of the
Company.
b. Termination
for Other Specified Causes.
The
Period of Employment shall terminate immediately on the occurrence of any one
of
the following events:
i. The
occurrence of circumstances that make it impossible or impracticable for the
business of the Company to be continued (other than a Change of Control (as
hereinafter defined));
ii. The
death
of Executive; or
iii. The
Disability (as hereinafter defined) of Executive, unless waived by the
Company.
For
purposes of this Agreement, “Disability” shall mean the continued incapacity
(due to a cause other than an industrial accident) on the part of Executive
(i)
because of which the Executive is unable to perform the principal duties of
his
employment for a continuous period of 180 days or (ii) which, in the judgment
of
the Board of Directors based on a written certificate of a physician (reasonably
acceptable to the Company and the Executive or Executive’s personal
representative) renders the Executive incapable of performing the principal
duties of his employment. The determination of the physician selected under
this
Paragraph 7(b)(iii) will be binding on both parties. The Executive must submit
to a reasonable number of examinations by the physician making the determination
of disability under this Section 7(b) and the Executive hereby authorizes the
disclosure and release to the Company of such determination and all supporting
medical records. If the Executive is not legally competent, the Executive’s
legal guardian or duly authorized attorney-in-fact will act in the Executive’s
stead for the purposes of selecting the physician, submitting the Executive
to
the examinations, and providing the authorization of disclosure as required
under this Section 7(b). If the Company and Executive (or Executive’s
representative) are unable to agree upon an acceptable physician, then the
determination of Disability shall be made by the majority vote of a panel of
three (3) physicians, one selected by Employer, one selected by Executive (or
Executive’s representative) and the third selected by the first
two.
In
the
event of the termination of the Period of Employment for any of the reasons
set
forth in Paragraphs 7(b)(i), (ii) or (iii) Executive shall be entitled to the
compensation earned prior to the date of termination as provided for in this
Agreement, computed pro rata up to and including the date of termination. In
addition, in the event of termination of the Period of Employment for reasons
set forth in Paragraph 7(b)(ii) or (iii), the Executive, or the Executive’s
surviving spouse and dependents in the event of Executive’s death, shall be
entitled to continued coverage under the Company’s hospital, surgical, dental
and medical plans to the same extent as provided prior to the death or
Disability of Executive for the greater of the remaining Period of Employment
as
in effect immediately prior to such termination or two (2) years following
the
death or Disability of Executive.
c. Termination
Without Cause by Company; For Good Reason by Executive.
If the
Company terminates the Executive’s employment during the Period of Employment
without Cause upon giving thirty (30) days’ notice to Executive, or if the
Executive terminates his employment with Good Reason upon giving thirty (30)
days’ notice to the Company, the Period of Employment shall immediately upon the
conclusion of such notice period terminate and the Executive shall be entitled
to no further payments or benefits hereunder except that the Company shall
pay
to Executive the greater of his then current annual base compensation for the
remaining Period of Employment as in effect immediately prior to such
termination or his then current annual base compensation for a period of
twenty-four (24) months from the date of termination. Any such payment shall
be
payable in four (4) bi-annual payments, the first of which must be paid within
thirty (30) days of such termination. Executive shall also be entitled to all
hospital, surgical, dental and medical benefits to which he would be entitled
if
he remained in the employ of the Company until the earlier of (i) twenty-four
(24) months from the date of termination or (ii) the date Executive becomes
eligible to be enrolled in a new employer-sponsored medical insurance plan.
Executive shall not be entitled to any other severance payment.
“Good
Reason” shall mean the occurrence of any of the following during the Period of
Employment:
i. Any
reduction in the Executive’s then current annual base compensation without the
Executive’s prior written consent; or
ii. A
material change in the Executive’s position causing it to be of materially less
stature or responsibility or a material change in the Executive’s duties,
authorities, responsibilities or reporting relationship, but in each case only
without the Executive’s prior consent and if the Company does not cure such
change within thirty (30) days after the Executive provides written notice
of
such material change to the Company; or
iii. The
Company materially breaches this Agreement and does not cure such breach within
thirty (30) days after the Executive provides written notice of such breach
to
the Company.
d. Termination
Following Change of Control.
If
during the Period of Employment the Company terminates the Executive’s
employment or the Executive terminates his employment for Good Reason, in either
case in accordance with Section 7(c), during the pendency of or following a
Change of Control (as hereinafter defined), the Period of Employment shall
immediately thereafter terminate and the Executive shall be entitled to no
further payments or benefits hereunder, other than accrued payments or benefits
and benefits in accordance with this Section 7(d), except that the Company
shall
pay to Executive the greater of two (2) times the Executive’s then current
annual base compensation or the Executive’s then current annual base
compensation for the remaining Period of Employment as in effect immediately
prior to such termination. Any such payment shall be payable in four (4)
bi-annual payments, the first of which must be paid within thirty (30) days
of
such termination. Executive shall also be entitled to all hospital, surgical,
dental and medical benefits to which he would be entitled if he remained in
the
employ of the Company until the earlier of (i) twenty-four (24) months from
the
date of termination or (ii) the date Executive becomes eligible to be enrolled
in a new employer-sponsored medical insurance plan. As used in this Section
7(d)
the term “Company” shall mean the resulting or surviving transferee corporation,
partnership or joint venture or other entity upon conclusion of a Change of
Control.
For
purposes of this Agreement, a “Change of Control” shall be deemed to occur upon
closing of the following:
i. A
merger,
consolidation, liquidation or reorganization of the Company into or with another
company or other legal person, after which merger, consolidation, liquidation
or
reorganization the capital stock of the Company outstanding prior to
consummation of the transaction is not converted into or exchanged for or does
not represent more than 50% of the aggregate voting power of the surviving
or
resulting entity;
ii. The
direct or indirect acquisition by any person (as the term “person” is used in
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended)
of more than fifty percent (50%) of the voting capital stock of the Company,
in
a single or series of related transactions; or
iii. The
sale,
exchange, or transfer of all or substantially all of the Company’s assets (other
than a sale, exchange or transfer to one or more entities where the stockholders
of the Company immediately before such sale, exchange or transfer retain,
directly or indirectly, at least a majority of the beneficial interest in the
voting stock of the entity or entities to which the assets were
transferred).
8. Remedies
for Breach.
The
parties recognize that the services to be performed by Executive are special
and
unique. Accordingly, if Executive breaches the terms and conditions of this
Agreement, or shall threaten a breach of any such terms and conditions, then
the
Company shall be entitled to institute legal and equitable proceedings in any
court of competent jurisdiction. Notwithstanding anything else contained herein,
the Company may seek to obtain damages for any breach of this Agreement, to
enforce its specific performance by Executive, or to obtain injunctive relief,
without the necessity of posting a bond, to protect itself from such
breach.
9. Partial
Invalidity.
Wherever possible each provision of this Agreement shall be interpreted in
such
manner as to be effective and valid under applicable law. Moreover, in the
event
that any one or more of the provisions hereof shall be held to be excessively
broad as to duration, geographic scope, activity or subject, such provision
shall be construed by limiting and reducing it in accordance with a judgment
of
a court of competent jurisdiction, so as to be enforceable under the specific
circumstances of the particular case. Such holding shall, to the extent
possible, not affect the validity or enforceability of any other provision
hereof or of this Agreement as a whole. The parties acknowledge that they have
closely examined and carefully negotiated the terms of this Agreement, deem
such
terms fair and adequate and wish them to be preserved.
10. Notices.
Any
notice to be delivered under this Agreement shall be deemed sufficiently given
if in writing and delivered personally or mailed by certified mail, postage
prepaid, to Executive at his then current residence address as on file with
the
Company, and to the Company at 00 Xxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx
00000, Attn: Chairman of the Board, or to any changed address that either party
may designate by like notice. The effective date of such notice shall be its
mailing date.
11. Surviving
Clauses.
The
provisions of Sections 5, 7, 9 and 12(f) will survive the expiration or
termination of this Agreement and will continue in full force and
effect.
12. Miscellaneous.
a. Entire
Agreement.
This
Agreement contains the entire agreement between the parties with respect to
its
subject matter and supersedes any previous oral or written communications,
representations, understandings or agreements. Any amendment, modification
or
waiver of this Agreement shall be effective only if evidenced by a written
instrument executed by both parties, and in the case of the Company, upon
written authorization of the Company's Board of Directors.
b. Binding
Effect.
All
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties, and their respective heirs,
successors, assigns, and legal representatives.
c. Non-Waiver.
No
delay or omission in enforcing any of the terms or conditions of this Agreement
shall be construed as or constitute a waiver thereof or bar thereto; nor shall
a
waiver on any one occasion be construed as a bar to or waiver of any right
or
remedy on any future occasion.
d. Applicable
Law.
This
Agreement shall be governed by, subject to, and interpreted in accordance with
the laws of the Commonwealth of Massachusetts.
e. Headings.
Headings in this Agreement shall not be used to interpret or construe its
provisions.
f. Arbitration.
Any
controversy or claim arising out of or relating to this Agreement or to the
breach thereof shall be first submitted to mediation within thirty (30) days
of
either party requesting same and, if not successful, shall be settled by binding
arbitration in accordance with the laws of the State of Massachusetts conducted
in the City of Boston or some other mutually agreed upon location, in accordance
with the commercial rules of the American Arbitration Association. Judgment
upon
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. The arbitrator shall have the authority to award any
and
all remedies, whether equitable or compensable that could have been awarded
by
any court of competent jurisdiction, including attorney’s fees and costs, if
appropriate. The cost of any arbitration proceeding conducted hereunder shall
be
borne equally between the Executive and the Company.
g. Counterparts.
This
Agreement may be executed in two counterparts, each of which is an original
but
which shall together constitute one and the same instrument.
EXECUTED
under seal as of the date set forth above.
|
ARRHYTHMIA
RESEARCH TECHNOLOGY, INC.
|
||
|
By:
|
/s/
X.X. Xxxxxxx
|
|
|
X.X.
Xxxxxxx, Chairman of the Board
|
||
|
EXECUTIVE:
|
||
|
/s/
Xxxxx X. Xxxxx
|
||
|
Xxxxx
X. Xxxxx
|
||
