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EXHIBIT 10.5
EMPLOYMENT AGREEMENT
This Agreement dated as of August 6, 1996 is among Leisegang Medical,
Inc. ("LMI"), a Florida corporation with its principal offices at 0000 Xxxxxxxx
Xxxxxx, Xxxx Xxxxx, Xxxxxxx 00000, W. Xxx Xxxxxx (the "Employee") residing at
00000 Xxxxxxxxx Xxx, Xxxx Xxxxx, Xxxxxxx 00000, and Galileo Electro-Optics
Corporation ("Galileo"), a Delaware corporation with its principal offices at
Galileo Park, X.X. Xxx 000, Xxxxxxxxxx, XX 00000. This Agreement is entered into
in connection with Galileo's acquisition of LMI pursuant to the Agreement and
Plan of Merger dated as of July 17, 1996. Employee was a principal stockholder
of LMI prior to the acquisition. In order to preserve the value of LMI's
goodwill, Galileo desires to continue the employment of Employee by LMI and to
protect LMI's and Galileo's confidential information after the acquisition.
Accordingly, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT OF EMPLOYEE.
1.1 Employment. Subject to the terms and conditions of this Agreement,
LMI agrees to employ Employee in a full time capacity as president and general
manager of LMI with such specific duties as may reasonably be assigned to the
Employee from time to time by the Board of Directors or Chief Executive Officer
of LMI for the period commencing on the date hereof and terminating three years
hereafter, unless earlier terminated as herein provided. During Employee's
employment hereunder, Employee will continue to serve as a director of LMI and
Employee's principal place of work will remain within 20 miles of the Boca Raton
municipal limits unless otherwise agreed by him. Employee hereby accepts such
employment for the term hereof. Neither LMI nor Employee shall have any
obligation to continue employment after the term hereof. If Employee remains
employed after the term hereof, Employee's employment and compensation may be
terminated at will, with or without cause and with or without notice, at any
time at the option of LMI or Employee.
SECTION 2. COMPENSATION. For all services to be rendered by Employee to
LMI pursuant to this Agreement, LMI shall pay to and provide the Employee with
the following compensation and benefits:
2.1 Base Salary and Bonus. LMI shall pay to Employee a base salary at
the rate of $225,000 per year, payable in substantially equal monthly
installments, subject to annual review by the Board of Directors of LMI,
provided that base salary shall not be decreased during the term hereof.
Employee will have the opportunity to earn an annual incentive cash bonus of 40%
of base salary based upon net sales of LMI as follows (with equitable
adjustments for periods of employment hereunder prior to and following the
annual periods set forth below):
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12 Months Net Sales
Ending (000's)
------ -------
September 30, 1997 $7,000
September 30, 1998 $8,000
September 30, 1999 $9,200
Galileo will provide LMI with sufficient working capital to support the
foregoing net sales and will undertake such product development efforts as it
determines will be commercially reasonable and make all of its new products in
the OB/GYN field available for sale by LMI. The Board of Directors of LMI may
set additional personal and corporate goals and increase or decrease the bonus
opportunity percentage, subject to the consent of Employee, which shall not be
unreasonably withheld.
2.2 Stock Options. Galileo has granted to Employee non-qualified
options to purchase 20,000 shares of its common stock under its 1991 Stock
Option Plan, exercisable on the terms and under the conditions set forth in the
option agreement delivered to Employee on this date. The exercise price is the
closing price of Galileo's common stock on The Nasdaq National Market on the day
preceding the date employment commences hereunder.
2.3 Participation in Benefit Plans. Employee shall be entitled to
participate in all employee benefit plans or programs of Galileo to the extent
that Employee's position, title, tenure, salary, age, health and other
qualifications make Employee eligible to participate. Neither LMI nor Galileo
guarantees the adoption or continuance of any particular employee benefit plan
or program during the term of this Agreement, and Employee's participation in
any such plan or program shall be subject to the provisions, rules and
regulations applicable thereto. Employee shall be entitled to vacation each year
for a period of four weeks during which compensation shall be paid in full, with
any additional vacation time to be allowed only in accordance with applicable
Galileo policy.
2.4 Expenses. LMI shall reimburse Employee for all ordinary and
necessary business expenses incurred in the performance of Employee's duties
under this Agreement, provided that Employee accounts properly for such expenses
to LMI in accordance with the general corporate policy of LMI as determined by
LMI's Board of Directors or Chief Executive Officer and in accordance with the
requirements of the Internal Revenue Service regulations relating to
substantiation of expenses.
SECTION 3. CONFIDENTIAL INFORMATION. Employee agrees to be bound by the
terms of the attached Galileo agreement as if set forth herein, including
without limitation the terms relating to confidential information, inventions
and Galileo employees. For purposes of such agreement, the term "Galileo" shall
include LMI and Galileo. The obligations of Employee under such agreement shall
survive termination of this Agreement for any reason.
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SECTION 4. TERMINATION AND SEVERANCE PAYMENT.
4.1 Early Termination. Employee's employment hereunder shall terminate
prior to the expiration of the term specified in Section 1.1:
(a) Upon Employee's death or inability by reason of physical
or mental impairment to perform substantially all of Employee's services as
contemplated herein for 90 days or more within any six-month period;
(b) By LMI or Employee without cause upon not less than 30
days' prior written notice to the other; or
(c) By LMI in the event of Employee's breach of any material
duty or obligation hereunder, or intentional or grossly negligent conduct that
is materially injurious to LMI as reasonably determined by LMI's Board of
Directors, or willful failure to follow the reasonable directions of LMI's Board
of Directors.
4.2 Severance Payment. In the event of termination of the Employee's
employment by LMI under Section 4.1(b), LMI shall pay to Employee as severance
an amount equal to base salary at the rate specified in Section 2.1 and the full
amount of his bonus (assuming all applicable goals are achieved) for the balance
of the term, and a non-accountable expense allowance at the annual rate of
$7,500, in each case payable in equal monthly installments. In addition, LMI
will continue the health insurance benefits of Employee in effect at such
termination for the balance of the term but not after Employee secures other
employment.
SECTION 5. NONCOMPETITION. Employee agrees that so long as he is
employed by LMI and until the later of (i) two years after termination of his
employment with LMI for any reason and (ii) four years after the date hereof,
Employee will not, directly or indirectly, except as a passive investor in
publicly held companies, engage in competition with LMI, or own or control any
interest in, or act as a director, officer or employee of, or consultant to, any
firm, corporation or institution directly or indirectly engaged in competition
with LMI.
SECTION 6. MISCELLANEOUS.
6.1 Assignment. This Agreement may not be assigned, in whole or in
part, by any party without the written consent of the other parties, except that
LMI and Galileo may, without the consent of Employee, assign their respective
rights and obligations under this Agreement to any corporation, firm or other
business entity with or into which LMI or Galileo, as the case may be, may merge
or consolidate, or to which LMI or Galileo may sell or transfer all or
substantially all of their respective assets, or of which 50% or more of the
equity investment and of the voting control is owned, directly or indirectly,
by, or is under common ownership with, either LMI or Galileo. After any such
assignment by LMI or Galileo as the case may be, such assignor shall be
discharged from all further liability hereunder and such assignee shall have all
the rights and obligations of the assignor under this Agreement.
6.2 Notices. All notices, requests, demands and other communications to
be given pursuant to this Agreement shall be in writing and shall be deemed to
have been duly given if delivered by hand, transmitted by telecopy or sent by
recognized overnight delivery service for
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next day delivery to the addresses set forth below or such other address as a
party shall have designated by notice in writing to the other parties:
If to LMI or Galileo:
X.X. Xxx 000
Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Telecopy No: (000) 000-0000
Attention: President
with a copy to:
Xxxxx X. Xxxxxxx, Xx., Esq.
Xxxxxx & Dodge LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy No: (000) 000-0000
If to Employee:
00000 Xxxxxxxxx Xxx
Xxxx Xxxxx, XX 00000
Telecopy No: (000) 000-0000
6.3 Integration. This Agreement is the entire agreement of the parties
with respect to the subject matter hereof and supersedes any prior agreement or
understanding relating to Employee's employment with or compensation by LMI and
Galileo, including without limitation, the Employment Agreement between LMI and
the Employee dated December 31, 1993, which shall be deemed terminated as of the
date hereof. This Agreement may not be amended, supplemented or otherwise
modified except in writing signed by the parties hereto.
6.4 Binding Effect. Subject to Section 6.1, this Agreement shall inure
to the benefit of and be binding upon the parties hereto and their successors,
assigns, heirs and personal representatives.
6.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
6.6 Severability. If any provision hereof shall for any reason be held
to be invalid or unenforceable in any respect, such invalidity or
unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if such invalid or unenforceable provision had not been
included herein. If any provision hereof shall for any reason be held by a court
to be excessively broad as to duration, geographical scope, activity or subject
matter, it shall be construed by limiting and reducing it to make it enforceable
to the extent compatible with applicable law as then in effect.
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6.7 Enforcement Costs; Consent to Representation. If any action is
brought to enforce any right under this Agreement, the party prevailing in such
action shall be entitled to reimbursement from the other party of its reasonable
legal fees and expenses in such action as determined by the court. Galileo and
LMI hereby consent to the legal representation by Xxxxxxx X. Xxxxxxxx, Esq. of
Executive in connection with his entering into, and any legal proceedings
arising out of, this agreement and of LMI in unrelated matters.
6.8 Governing Law. This Agreement shall be governed by the laws of
Florida without regard to its conflict of law provisions.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Agreement as of the date first stated above.
LEISEGANG MEDICAL, INC.
By:__________________________________________
Title:
GALILEO ELECTRO-OPTICS CORPORATION
By:__________________________________________
Title:
EMPLOYEE
_____________________________________________
W. Xxx Xxxxxx
