EXHIBIT 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered
into by and between HemaCare Corporation (the "Company"),
located at 0000 Xxx Xxxx Xxxxxxxxx, Xxxxxxx Xxxx, XX 00000,
and Xxxxxx Xxxx, M.D. (the "Employee") as of March 22,
2000.
1. Employment
The Company employs the Employee, and the Employee accepts
employment (hereinafter, the "Employment"), upon the terms and
conditions of this Agreement.
2. Duties
Employee shall perform the duties of National Medical
Director, including (i) providing medical oversight for the
Company's operations (including those relating to therapeutic
apheresis and blood product collection and distribution), (ii)
reviewing, approving and monitoring the Company's standard
operating procedures and compliance therewith, (iii) providing
leadership and general supervision and direction to regional
medical directors, (iv) providing support and training to
physicians treating patients and supervising therapeutic
apheresis procedures performed by the Company's nursing
personnel, (v) promoting the appropriate use of therapeutic
apheresis in the healthcare community through educational
activities, (vi) providing medical input to the Company's
management and Board of Directors, (vii) arranging for backup, on
call coverage by other physicians when on vacation and otherwise
unavailable, and (viii) performing such other duties of a
responsible nature consistent with his position as may be
prescribed from time to time by the Board of Directors. Employee
shall devote substantially all of his working time and efforts to
the business and affairs of the Company; provided, however, that
during the Term hereof the Employee may continue to devote
substantially the same time and attention to his medical practice
as he devoted thereto immediately before the Effective Date.
During the Employment, Executive shall report directly to the
Executive Chairman and from time to time the Board of Directors
of the Company.
3. Term
Unless otherwise terminated as provided below, the initial
term (the "Term") of this Agreement shall begin on March 22, 2000
(the "Effective Date") and shall terminate on the first
anniversary thereof and, thereafter, shall be renewed
automatically for subsequent one year terms unless written notice
of termination is given by either party to the other not less
than ninety (90) days before the end of the initial term or any
subsequent one year renewal term. The effective date of such
termination is referred to hereinafter as the "Termination Date."
4. Compensation
1. Base Salary
The Company shall pay the Employee for all services rendered
a salary of $200,000 per year (the "Base Salary") which may be
adjusted by the Board of Directors of the Company as recommended
by the Board Compensation Committee, payable in semi-monthly
installments or in such other manner as the Company shall pay its
executives.
2. Incentive Compensation
For each fiscal year of the Company which ends during the
Term, the Company shall pay to Employee an annual bonus equal to
ten percent (10%) of the increase, if any, in the Company's net
operating profits from therapeutic apheresis services realized
during such fiscal year when compared to the prior fiscal year,
which bonus shall be payable within ninety (90) days after the
end of such fiscal year. Such bonus shall be in addition to any
other bonus awarded at the discretion of the Board of Directors.
All bonus calculations shall exclude the revenues and net
operating profits, if any, resulting from therapeutic apheresis
services performed for patients of Employee's medical practice.
3. Fringe Benefits
Employee shall be eligible for all fringe benefits as stated
in the HemaCare Corporation Personnel Manual, plus the following
additions/modifications and those which are from time to time
provided to other employees of the Company holding senior
executive positions.
1. Vacation: 4 weeks
2. Health/dental insurance commencing on the first
day of the month following the date of employment.
3. Long term disability insurance equal to two-thirds
of Base Salary pursuant to the terms of such insurance policy,
provided that such insurance is available on commercially
reasonable terms.
4. Term life insurance in an amount of $1,000,000,
provided that such insurance is available on commercially
reasonable terms.
5. Participation in the Company's employee retirement
programs including the Company's 401(K) Plan.
5. Change of Control
In the event of a Change of Control (as defined in
Exhibit A hereto) which occurs during the Employment and within
twelve months thereafter either (i) the Employment is terminated
by the Company without Cause or (ii) the principal place of the
Employment is changed from Southern California, Employee shall be
entitled to receive two (2) times the amount of the severance
payment determined pursuant to paragraph X below.
6. Extent of Services
During the Term, Employee shall not, without the prior
written consent of the Company, be engaged in any other business
activity whether or not such business activity is pursued for
gain, profit or other pecuniary advantage; provided, however,
that during the Term hereof the Employee may continue to
devote substantially the same time and attention to his
medical practice as he devoted thereto immediately before
the Effective Date. This shall not be construed as
preventing Employee from investing his assets in such form
or manner as will not require the performance of services of
Employee in the operation of the affairs of the enterprises
or companies in which said investments are made.
7. Non-Disclosure; Nonsolicitation; Nondisparagement
A. Employee shall not, during the Term or at any time
thereafter, (i) disclose to any person not employed by the
Company or any person, firm or corporation engaged to render
services to Company except during the Term for the benefit of
Company, or (ii) use for the benefit of himself, or others, any
Confidential Information (as defined below) obtained by Employee
prior to the Effective Date, including, without limitation,
"know-how," trade secrets, details of the Company's contracts
with third parties, pricing policies, financial data, operational
methods, marketing and sales information or strategies, product
development techniques or plans or any strategies relating
thereto, technical processes, designs and design projects, and
other proprietary information of Company ("Confidential
Information"); provided, however, that this provision shall not
preclude Employee from (x) upon advice of counsel and after
reasonable notice to Company, making any disclosure required by
any applicable law or (y) using or disclosing information known
generally to the public (other than information known generally
to the public as a result of any violation of this paragraph VI
by or on behalf of Employee).
B. As requested by the Company from time to time and upon
the termination of the Employment for any reason, Employee shall
promptly deliver to the Company all copies and embodiments, in
whatever form, of all Confidential Information in Employee's
possession or within Employee's control (including, but not
limited to, written records, notes, photographs, manuals,
notebooks, documentation, program listings, flow charts, magnetic
media, disks, diskettes, tapes and all other materials containing
any such Confidential Information) regardless of the location or
form of such material and, if requested by the Company, shall
provide the Company with written confirmation that all such
materials have been delivered to the Company.
C. The Employee shall not, either directly or indirectly,
call on, solicit or take away or assist to be called on,
solicited or taken away, any of the customers, other employees or
independent contractors of the Company on whom the Employee
called or with whom the Employee became acquainted during the
Employee's employment with or hiring by the Company, either for
the Employee's own benefit, or for the benefit of any other
person, firm or corporation. The Employee shall not disclose the
name of any employee, customer, sales representative or other
employee of the Company to any third party, unless the disclosure
occurs during the Employee's employment with the Company and is
reasonably required by the Employee's position with the Company.
The Employee shall not now or in the future disrupt, damage,
impair or interfere with the business of the Company in any
manner, including, without limitation, inducing an employee to
leave the employ of the Company or inducing an employee, a
consultant, a sales representative or an independent contractor
to sever that person's relationship with the Company either by
interfering with or raiding the Company's employees or sales
representatives, disrupting its relationships with customers,
agents, independent contractors, representatives or vendors, or
otherwise.
In the event of a breach or threatened breach by Employee of
the provisions of this paragraph, the Company will be entitled to
injunctive or other equitable relief restraining Employee from
any breach or threatened breach of this paragraph VI. Nothing
herein shall be construed as prohibiting the Company from
pursuing any other remedies available to the Company for such
breach or threatened breach, including the recovery of damages
from Employee.
8. Expenses
The Employee may incur reasonable expenses, in accordance
with Company policies for such expenses, for promoting the
Company's business, including expenses for entertainment, travel
and similar items. The Company shall reimburse the Employee for
all such expenses upon the Employee's presentation of an itemized
account of such expenditures and supporting documentation, in
accordance with Company policy.
9. Termination by the Company for Cause
This Agreement may be terminated by the Company under any of
the following circumstances:
1. Upon the death of Employee; or
2. Upon the inability of Employee to perform all of his
duties hereunder by reason of illness, physical, mental or
emotional disability or other incapacity, which inability shall
continue for more than three (3) successive months or six (6)
months in the aggregate during any period of twelve (12)
consecutive months; or
3. For cause, defined as:
(i) the willful failure of Employee (other than for
the reasons described in subparagraph VIII(B) above) to
substantially perform his duties hereunder. No act, or failure
to act, on Employee's part shall be considered "willful" unless
done, or omitted to be done, by him not in good faith and without
reasonable belief that his action or omission was in the best
interest of the Company;
(ii) conviction of a crime involving a felony,
fraud, embezzlement or the like,
(iii) the engaging by Employee in conduct, or the
taking by Employee of any action, which is materially injurious
to the Company,
(iv) habitual insobriety or habitual abuse of a
controlled substance,
(v) misappropriation of the Company's funds,
(vi) the failure of Employee to comply with the
provisions of Paragraphs V or VI above, or
(vii) the failure of Employee to remain licensed to
practice medicine in the State of California.
Termination pursuant to this subsection may only occur after
written notice from the Company to the Employee specifying the
grounds for termination and the Employee fails within ten (10)
days after receipt of such notice to cure such failure.
10. Termination by Employee for Cause
This Agreement may be terminated by Employee under any of
the following circumstances:
1. The failure of the Company to observe or comply with
any of the material terms or provisions of this Employment
Agreement after written notice from Employee to Company specify
to grounds for termination and the Company fails within ten (10)
days after receipt of such notice to cure such failure;
2. Any material reduction in Employee's Base Salary, or a
material reduction in Employee's fringe benefits or any other
material failure by the Company to comply with Sections II and IV
hereof;
3. The Company sells substantially all of its assets to a
single purchaser or to a group of associated purchasers;
4. At least two-thirds of the outstanding shares of each
class of the Company's capital stock are sold, exchanged, or
otherwise disposed of, in one transaction or a series of related
transactions; or
5. The Company dissolves or liquidates its business.
Termination pursuant to this subsection may only occur after
written notice from the Employee to the Company specifying the
grounds for termination and the Company fails within ten (10)
days after receipt of such notice to cure such failure.
11. Severance
In the event this Agreement is terminated by the Company,
without cause, or in the event this Agreement is terminated by
the Employee for any of those causes listed in paragraph IX the
Company shall continue to pay the Employee his then current Base
Salary and provide the benefits set forth in paragraph IV(C)(2),
(3) and (4) above for the period commencing on the Termination
Date and expiring twelve (12) months after the Termination Date.
The Company may, at its option and at any time, discharge all
its obligations to Employee under this paragraph in a single
payment in an amount equal to the net present value (at a
discount rate equal to the prime rate announced from time to time
by Bank of America NT&SA) of all amounts then payable hereunder.
As of the date of payment of all amounts required to be paid by
the Company under this paragraph, the Company will have no
further obligation to Employee with respect to the payment of
severance pay.
10. Waiver of Breach
The waiver by either party of a breach of any provision of
this Agreement by the other shall not operate or be construed as
a waiver of any subsequent breach.
11. Arbitration
Any dispute arising out of or relating to this Agreement or
the transactions contemplated hereby shall be finally resolved
and determined by mandatory, binding arbitration before a single
arbitrator in Los Angeles, California, in accordance with the
then-prevailing commercial arbitration rules of the American
Arbitration Association; provided, however, that no claim for
specific performance or injunctive relief shall be required to be
submitted to arbitration; provided, further, that the arbitrator
shall apply the internal laws of the State of California. Each
of the parties hereto submits to the jurisdiction of the
arbitrator appointed in accordance with such rules and (without
limiting the effect of the foregoing arbitration clause) to the
jurisdiction of any state or federal court sitting in Los Angeles
County, California, in any action or proceeding arising out of or
relating to this Agreement and agrees that all claims in respect
of the action or proceeding may be heard and determined in any
such court. Each of the parties hereto waives any defense of
inconvenient forum to the maintenance of any action or proceeding
so brought and waives any bond, surety, or other security that
might be required of any other party with respect thereto.
Nothing in this paragraph XII, however, shall affect the right of
any party to bring any action or proceeding arising out of or
relating to this Agreement or the transactions contemplated
hereby in any other court or to serve legal process in any other
manner permitted by law or at equity, for the purposes of
compelling arbitration, enforcing any award in arbitration, or
seeking specific performance or injunctive relief. Any party
hereto may make service on any other party by sending or
delivering a copy of the process to the party to be served at the
address and in the manner provided for the giving of notices in
paragraph XVI hereof. Each party hereto agrees that a final
award in any such arbitration or final judgment in any such
action or proceeding so brought shall be conclusive and may be
enforced by entry of such award in any court of competent
jurisdiction, suit on the award or judgment, or in any other
manner provided by law or at equity. In the event of legal
action or arbitration to construe or enforce this Agreement, the
prevailing party (as determined by the court or arbitrator, as
applicable) shall be entitled to recover its reasonable
attorneys' fees and costs.
12. Assignment
The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon
the successors and assigns of the Company, but the rights and
obligations of Employee are personal and may not be assigned or
delegated without the Company's prior written consent.
13. Entire Agreement
This Agreement and the Exhibits attached hereto contain the
entire Agreement of the parties and may not be changed orally,
but only by an agreement in writing executed by the party against
whom enforcement of any waiver, change, modification, extension
or discharge is sought.
14. Law Applicable
This Agreement shall be governed in all respects, whether as
to validity, construction, capacity, performance or otherwise, by
the laws of the State of California applicable to contracts made
and to be performed wholly within that state. In the event any
provision of this Agreement shall be held invalid by a court with
jurisdiction over the parties to this Agreement, such provision
shall be deleted from the Agreement, which shall then be
construed to give effect to the remaining provisions thereof.
15. Notices
Any notice to the Company required or permitted under this
Agreement shall be given in writing to Company, either by
personal service or by registered or certified mail, postage
prepaid, addressed to the Chairman of the Company at its then
principal place of business. Any such notice to Employee shall
be given in a like manner and, if mailed, shall be addressed to
Employee at his home address then shown in the Company's files.
For the purpose of determining compliance with any time limit in
this Agreement, a notice shall be deemed to have been duly given
(a) on the date of service, if served personally on the party to
whom notice is to be given, or (b) on the second business day
after mailing, if mailed to the party to whom the notice is to be
given in the manner provided in this paragraph.
IN WITNESS WHEREOF, the parties intending to be legally
bound, have executed this Agreement the day and year first above
stated.
HEMACARE CORPORATION EMPLOYEE
/s/ Xxxx X. Xxxxxxxxxx /s/ Xxxxxx Xxxx
____________________________ __________________________
Xxxx X. Xxxxxxxxxx, Chairman of Xxxxxx Xxxx, M.D.
the Board of Directors
Exhibit "A"
As used in this Agreement, the phrase "Change of Control" shall
mean:
(a) Except as provided by subparagraph (b) hereof, the
acquisition by any person, entity or "group," within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 50% or more of the combined voting power of the then
outstanding securities entitled to vote generally in the election
of directors of the Company; or
(b) Approval by the Board of a reorganization, merger or
consolidation of the Company with any other person, entity or
corporation, other than:
(i) a merger or consolidation which would result in
the voting securities of the Company immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into voting securities of another entity) more
than 50% of the combined voting power of the securities entitled
to vote generally in the election of directors of the Company or
such other entity outstanding immediately after such merger or
consolidation; or
(ii) a merger or consolidation effected to implement a
recapitalization of the Company or similar transaction in which
no person, entity or group acquires beneficial ownership of 50%
or more of the combined voting power of the securities entitled
to vote generally in the election of directors of the Company
outstanding immediately after such merger or consolidation; or
(iii) Approval by the Board of a plan of complete
liquidation of the Company or an agreement for the sale or other
disposition by the Company of all or substantially all of the
Company's assets pursuant to which all or substantially all of
the Company's assets continue to be owned by an affiliate of the
Company.
