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EXHIBIT 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of June 16, 1997, by
and between Xxxxxx Xxxxxx Xxxxxxxx ("Executive") and APACHE Medical Systems,
Inc., a Delaware corporation ("Company").
1. EMPLOYMENT TERM. The Company will employ Executive for a term commencing on
June 16, 1997 and ending on December 31, 1997 ("Employment Term"). The
Employment Term shall be automatically extended for additional one-year
terms, unless Executive or the Company's Board of Directors ("Board) provides
90 days' advance written notice to the other of his/its intention not to
renew.
2. EMPLOYMENT DUTIES. Executive will serve as Vice President, Chief Financial
Officer and Treasurer subject to the direction and control of the Chief
Executive Officer. Executive shall perform such duties as may be assigned
from time to time by the Chief Executive Officer, and shall, on a full-time
basis, serve the Company faithfully, diligently and competently and to the
best of his ability and in accordance with this Agreement and applicable
law.
3. COMPENSATION. In exchange for Executive's services under this Agreement,
the Company shall pay Executive as salary $145,000 per annum, which shall be
reviewed annually by the Compensation Committee of the Board during its
annual year-end compensation review ("Salary"). Salary shall be payable in
24 equal bi-monthly installments and otherwise in accordance with the
Company's ordinary payment practices. Any payments made to Executive
pursuant to this Section 3 shall be treated as wages for withholding and
employment tax purposes. Executive shall participate in the Company's
short-term cash incentive plan or any successor thereto (the "short-term
plan") and any stock option or stock incentive plan generally available to
executives pursuant to the applicable plan documents.
4. BENEFITS
(a) Executive shall be entitled during the Employment Term to participate
in such employee benefit plans and programs as are offered from time
to time to employees of the Company to the extent that his position,
tenure, compensation, age, health and other qualifications make him
eligible to participate. The Company does not promise the adoption
or continuance of any particular plan or program during the
Employment Term, and Executive's (and his dependents') participation
in any such plan or program shall be subject to the provisions,
rules, regulations and laws applicable thereto.
(b) Executive shall be entitled to paid vacation in accordance with the
Company's vacation policy applicable to senior executives.
c) The Company shall provide directors and officers liability insurance
coverage for Executive, which shall be pursuant to a "claims made"
policy covering senior executives generally.
(d) The Company shall reimburse Executive for his reasonable legal
expenses in connection with the initial execution of this Agreement
and its termination, as applicable.
5. REIMBURSEMENT OF EXPENSES. Executive shall be entitled to reimbursement for
ordinary, necessary and reasonable out-of-pocket business expenses which he
incurs in connection with performing his duties hereunder. The
reimbursement of all such expenses shall be made upon presentation of
satisfactory evidence of the amounts and nature of such expenses and shall
be subject to the Company's policies regarding business expenses and to the
reasonable approval of the Company's Chief Executive Officer.
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6. NON-COMPETITION, NON-SOLICITATION. Executive agrees to be bound by the
terms of his Proprietary Information, Inventions, Non-Competition and
Non-Solicitation Agreement executed on June 16, 1997.
7. TERMINATION FOR CAUSE. Notwithstanding any other provision of this
Agreement, Executive's employment with the Company and this Agreement may be
terminated by the Board (excluding Executive for this purpose) at any time
for Cause which shall include his (i) commission of an action against or in
derogation of the interests of the Company which constitutes an act of
fraud, dishonesty or moral turpitude or which, if proven in a court of law,
would constitute a violation of a criminal code or similar law, (ii)
material breach of any material duty or obligation imposed upon him pursuant
to this Agreement, (iii) breach of his Proprietary Information, Inventions,
Non-Competition and Non-Solicitation Agreement, and (iv) performance of any
similar action that the Board, in its sole discretion, may deem to be
sufficiently injurious to the interests of the Company so as to constitute
substantial cause for termination. If Executive is terminated for Cause as
defined in (ii) or (iv) above and if such Cause could be cured, the Company
will give Executive notice of termination stating the reason therefore and
Executive may cure the Cause during the 30 days following receipt of notice,
which cure may not be unreasonably rejected by the Board. The Company may
suspend Executive with pay during the cure period. In all other cases,
Executive's employment with the Company shall be terminated immediately and
Executive may arbitrate pursuant to Section 12(g) whether or not Cause
existed. In the event of termination under this Section 7, the Company's
obligations under this Agreement shall cease and, except as required by
applicable law, Executive shall forfeit all rights to receive any other
compensation or benefits under this Agreement, except that he shall be
entitled to his Salary for services performed through the date of such
termination. Without limitation, termination of Executive pursuant to this
Section 7 shall not relieve him of his obligations under Section 6.
8. INVOLUNTARY TERMINATION. During the term of this Agreement, Executive's
employment with the Company and this Agreement may be terminated for any
reason or no reason without Cause by the Board, provided that in the event
of such termination or removal, he shall be entitled to continuation of his
Salary and Company-provided health benefits, life insurance and other
welfare benefits for 24 months, and to a pro rata payment of the short-term
plan award that he would have been entitled to receive had he been employed
for the entire year in which termination occurs, with pro-ration based on
the number of days employed during such year. Such award shall be paid to
Executive at the time that plan payments for the applicable calendar year
are typically paid to senior executives. If the Company notifies Executive
of its intention not to renew this Agreement as provided in Section(1),
Executive shall be deemed to be terminated by the Company as of the last day
of the Employment Term and Executive shall be entitled to Salary, benefits
and a plan award as provided in this Section. Without limitation, a
termination of Executive pursuant to this Section 8 shall not relieve him of
his obligations under Section 6.
9. DISABILITY. If Executive becomes totally disabled during the Employment
Term, his employment and this Agreement may be terminated by the Board
(excluding Executive for this purpose) as of the date such total disability
is determined. Executive shall be considered to be totally disabled if he
is unable by reason of accident or illness (including mental illness) to
perform the material duties of his regular position with the Company and is
not expected to recover from his disability within a period of six months
from the commencement of the disability. If at any time Executive claims or
is claimed by the Board to be totally disabled, a physician acceptable to
both Executive and the Board (which acceptances shall not be unreasonably
withheld) shall be retained by the Company and shall examine him. Executive
shall cooperate fully with the physician. If the physician determines that
Executive is totally disabled, the physician shall deliver to the Board a
certificate certifying both that Executive is totally disabled and the date
upon which the condition of total disability commenced. The determination
of the physician shall be conclusive. Executive's rights to any
compensation and benefits under this Agreement shall cease upon his total
disability, except that he shall be entitled to continuation of his Salary
and Company-provided health benefits, life insurance and other welfare
benefits for 12 months, provided, however, that any such payments shall be
reduced by an amount
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equal to any payments and health coverage received by Executive under any
employment policy, arrangement or agreement, disability insurance policy or
other benefit plan of the Company or Social Security. Executive also shall
receive the short-term plan award that he would have been entitled to
receive had he been employed for the entire year in which termination
occurs and a pro-rated award for the next following year based on the
number of days during the year for which he received severance pay;
provided that Executive's awards for these two years shall be limited to
the award portion(s) based on Company performance, except that, to the
extent Executive was actively employed during a portion of the first year,
such award shall include the award portion(s) based on individual
performance pro-rated for the time of his active employment. Such awards
shall be paid to Executive at the time that plan payments for the
applicable calendar year are typically paid to senior executives. Any
termination by the Board pursuant to this Section 9 shall be made in
accordance with all applicable laws. Without limitation, a termination of
Executive pursuant to this Section 9 shall not relieve him of his
obligations under Section 6.
10. CHANGE IN RESPONSIBILITY. During the term of this Agreement, Executive may
terminate his employment with the Company and this Agreement upon 30 days'
advance written notice in the event of any Change in Responsibility, which
shall include a material change in his duties or authority, a reduction in
Salary or material change in his benefits, or a similar material change in
the terms and conditions of his employment; provided that the Company may
cure the Change in Responsibility during the 30-day notice period which
cure may not be unreasonably rejected by Executive. In the event that the
Company fails to cure, Executive shall be entitled to continuation of his
Salary and Company-provided health benefits, life insurance and other
welfare benefits for 24 months, and to a pro rata payment of the short-term
plan award that he would have been entitled to receive had he been employed
for the entire year in which termination occurs, with proration based on
the number of days employed during such year. Such award shall be paid to
Executive at the time that plan payments for the applicable calendar year
are typically paid to senior executives. Notice of termination under this
Section 10 shall be valid only if received by the Company within 120 days
after Change in Responsibility occurred. Without limitation, a termination
pursuant to this Section 10 shall not relieve Executive of his obligations
under Section 6.
11. CHANGE IN CONTROL.
(a) Executive shall give 90 days' written notice in advance of the 12 month
anniversary of a Change in Control as to whether he will terminate
voluntarily as of such anniversary date, such termination would entitle him
to continuation of his Salary and Company-provided health benefits, life
insurance and other welfare benefits for 12 months, and to a pro rata
payment of the short-term plan award that he would have been entitled to
receive had he been employed for the entire year in which termination
occurs, with pro-ration based on the number of days employed during such
year. Such award shall be paid to Executive at the time that plan payments
for the applicable calendar year are typically paid to senior executives.
(b) Each outstanding option issued to Executive and any future option issued to
Executive during the term of this Agreement shall be amended or provide or
shall provide, as the case may be, provisions to the effect that (i) such
option shall vest in full upon a Change in Control, and (ii) to the extent
that Executive receives severance benefits under this Agreement, the
exercise period for the portion of any option vested at the time of
termination of employment shall be extended so that such option may be
exercised during a period of at least 30 months; provided, however, in no
event shall the exercise period be longer than the original option period
established in the option agreement.
c) A Change in Control is the purchase or other acquisition by any person,
entity or group of persons, within the meaning of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934 or any comparable successor provisions,
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
such Act) of 30% or more or either the outstanding shares of common stock
or the combined voting power of the Company's then outstanding voting
securities entitled to vote generally;
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the approval by the stockholders of the Company of a reorganization, merger
or consolidation, in each case, with respect to which persons who were
stockholders of the Company immediately prior to such reorganization,
merger or consolidation do not, immediately thereafter, own more than 30%
of the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated Company's then
outstanding securities; a liquidation or dissolution of the Company; or the
sale of all or substantially all of the Company's assets.
(d) A Change in Control will not affect or diminish Executive's rights under any
provision of this Agreement, including, without limitation, Sections 8, 9
and 10. Without limitation, a termination pursuant to this Section 11
shall not relieve Executive of his obligations under Section 6.
12. MISCELLANEOUS.
(a) All notices hereunder shall be in writing and shall be deemed given when
delivered in person or when telecopied with hard copy to follow, or three
business days after being deposited in the United States mail, postage
prepaid, registered or certified mail, or two business days after delivery
to a nationally recognized express courier, expenses prepaid, addressed as
follows:
If to Executive:
Xxxxxx Xxxxxx Xxxxxxxx
00000 Xxxxxxxxx Xx.
Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
If to the Company:
Counsel
APACHE Medical Systems, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxx 000
XxXxxx, XX 00000-0000
Telecopy: (000) 000-0000
and/or at such other addresses as may be designated by notice given in
accordance with the provisions hereof.
(b) This Agreement shall be binding upon and inure to the benefit of both
parties and their respective heirs, successors and permitted assigns. No
party shall assign this Agreement or its rights hereunder without the prior
written consent of the other party; provided, however, that the Company
shall assign this Agreement to any person or entity acquiring all or
substantially all of the business of the Company (whether by sale of stock,
sale of assets, merger, consolidation or otherwise).
(c) This Agreement contains all of the agreements between the parties with
respect to the subject matter hereof, and this Agreement supersedes all
other agreements, oral or written, between the parties with respect to the
subject matter hereof.
(d) No change or modification of this Agreement shall be valid unless the same
shall be in writing and signed by both parties. No waiver of any
provisions of this Agreement shall be valid unless in writing and signed by
the waiving party. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing
waiver, unless so provided in the waiver.
(e) If any provisions of this Agreement (or portions thereof) shall, for any
reason, be considered invalid or unenforceable by any court of competent
jurisdiction, such provisions (or portions thereof) shall be ineffective
only to the extent of such invalidity or unenforceability, and the
remaining provisions of
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this Agreement (or portions thereof) shall nevertheless be valid,
enforceable and of full force and effect. The Company's rights under this
Agreement shall not be exclusive and shall be in addition to all other
rights and remedies available at law or in equity.
(f) The section headings or titles herein are for convenience of reference only
and shall not be deemed a part of this Agreement.
(g) In the event of a dispute between Executive and the Company that is not
resolved after a good faith effort by the parties, such dispute will be
submitted to arbitration. The arbitration will be conducted in accordance
with the rules of the American Arbitration Association in effect at the
time of the demand for arbitration and will be held in Washington, DC. The
arbitrator will be selected from an appropriate list of qualified
arbitrators, permit reasonable discovery, and make written findings of fact
and conclusions of law reflecting the appropriate substantive law. Either
party must deliver a request for arbitration in writing to the other party
within 60 days of the date the aggrieved party first has knowledge of the
event giving rise to the claim, otherwise the claim will be considered void
and waived. The decision of the arbitrator will be exclusive, final and
binding on Executive and the Company, and Executive is hereby giving up his
right to have any dispute decided in a court and by a jury. Executive and
the Company will share equally the cost of the arbitrator.
(h) This Agreement shall be governed and controlled as to validity,
enforcement, interpretation, construction, effect and in all other respects
by the laws of the State of Virginia applicable to contracts made in that
State (other than conflict of laws rule which might result in the
application of the laws of any other jurisdiction). Executive expressly
submits and consents in advance to the jurisdiction of the federal and
state courts of the State of Virginia for all purposes in connection with
any action or proceeding arising out of or relating to this Agreement.
(j) Any press release concerning termination of Executive's employment shall be
subject to Executive's review at least two days prior to release. Upon any
termination of employment other than as provided in Section 7, Executive
shall be entitled to retain his personal office and business equipment,
such as his Company-provided computer, cellular phone, computer printer,
facsimile machine, etc.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
XXXXXX XXXXXX XXXXXXXX
/s/ Xxxxxx X. Xxxxxxxx
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Executive
APACHE MEDICAL SYSTEMS, INC.
/s/ Xxxxxx X. Xxxxxx, Xx.
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Chairman and Chief Executive Officer
