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EXHIBIT 10.33
AMENDED EMPLOYMENT AGREEMENT
This Amended Employment Agreement is made by and between
LifeQuest Medical, Inc. (the "Company"), located at 00000 Xxxx Xxxxxxx, Xxxxx
0000, Xxx Xxxxxxx, Xxxxx 00000, and Xxxxxxx X. Xxxxxxxxx ("Employee"), whose
address is 000 Xxxxxxxx Xxxx Xxxxx, Xxxxx, Xxxxxxxxxxxx 00000, and amends the
Employment Agreement dated effective May 11, 1998 between the Company and
Employee (the "Previous Employment Agreement").
ARTICLE 1
COMPENSATION AND TERM
1.01 Basic Compensation. As compensation for the services to be
rendered hereunder, the Company shall pay Employee a salary at a rate not less
than $14,583.33 per month ("Base Salary"), subject to standard deductions, which
shall be payable in at least monthly installments during the Initial Term (as
hereinafter defined) and each Extension Term (as hereinafter defined), if any.
Such basic compensation shall be subject to annual review for possible increase
by the Compensation Committee of the Board of Directors of the Company based
upon Employee's performance, as determined at the discretion of the Company's
Compensation Committee based in part upon the achievement of goals agreed upon
by the Board of Directors of the Company and Employee, the performance of the
Company's stock price and the earnings of the Company. In addition, the Company
and the Employee have entered into a Non-Qualified Stock Option Agreement of
even date herewith pursuant to which the Company has granted to Employee
non-qualified stock options to purchase up to 350,000 shares of Common Stock,
$.001 par value, of the Company upon the terms and conditions set forth in such
agreement.
1.02 Incentive Compensation. Employee shall be eligible to receive
an annual cash bonus in an amount up to 200% of Employee's Base Salary, the
amount of which shall be determined by the Compensation Committee of the Company
in its sole discretion and shall be based upon Employee's performance, the
achievement of goals agreed upon by the Board of Directors of the Company and
Employee, the performance of the Company's stock price and the earnings of the
Company, all as determined in the sole discretion of the Company's Compensation
Committee. Any such bonus shall be paid by the Company within 90 days after the
end of each calendar year.
1.03 Term. Subject to earlier termination pursuant to Article 5
hereof, the initial term (the "Initial Term") of this Agreement shall be three
(3) years commencing as of the execution date of this Agreement and ending on
May 10, 2002; provided, however, the Initial Term shall be automatically
extended for successive periods of one (1) year each (each such one-year period,
an "Extension Term") unless either party shall have given to the other party
written notice of termination not less than sixty (60) days prior to the end of
the Initial Term or the Extension Term then in effect, as the case may be.
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ARTICLE 2
DUTIES OF EMPLOYEE
2.01 Duties. The Company hereby employs Employee to serve as
President and Chief Executive Officer of the Company or in such other capacities
as may be agreed upon by the Board of Directors of the Company and Employee from
time to time, and Employee agrees to perform the customary duties of such
offices in accordance with the bylaws of the Company and as the Board of
Directors of the Company may direct from time to time. Employee will be the
chief executive officer of the Company and, therefore, will report only to the
Board of Directors.
2.02 Other Activities. During the Initial Term and each Extension
Term, if any, Employee shall devote substantially all of his full-time efforts
to his duties hereunder and will not undertake any material business commitments
without obtaining the prior consent of the Board of Directors of the Company,
which consent may be granted or withheld in the sole discretion of the Board of
Directors of the Company.
ARTICLE 3
EMPLOYEE BENEFITS
3.01 Medical and Dental Benefits. The Company agrees to include
Employee in any hospital, surgical, medical, disability and dental benefit
plan(s) that it may adopt for its employees.
3.02 Temporary Housing Arrangements and Living Expenses. The
Company will reimburse Employee for reasonable temporary living arrangements and
living expenses for a period of up to twelve (12) months after the execution
date hereof; provided, however, the amount which shall be reimbursed by the
Company to Employee shall not exceed $2,000 per month. Arrangements for
temporary living accommodations will be made by the Company through its
administrative staff.
3.03 Attorneys' Fees. The Company will reimburse Employee for
reasonable attorneys' fees charged to Employee by the firm of Saul, Ewing,
Xxxxxx & Xxxx in connection with the negotiation of this Agreement.
3.04 Other Benefits. Employee shall be entitled to reasonable and
customary holidays and other benefits that are available to senior management or
key employees, including three weeks paid vacation.
ARTICLE 4
OBLIGATIONS OF THE COMPANY
4.01 Office and Support Staff. The Company shall provide Employee
with such support services as are reasonable to Employee's position or required
for the performance of his duties.
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ARTICLE 5
TERMINATION OF EMPLOYMENT
5.01 Termination by the Company for Cause. The Company may at its
option terminate this Agreement for Cause (as hereinafter defined) by giving 10
days written notice of termination to Employee. Any such notice shall specify
with particularity the events or circumstances which the Board of Directors of
the Company has determined constituted such Cause.
The term "Cause" shall be limited to the occurrence of the following
events, as determined by the Board of Directors of the Company in its sole
judgment: (i) Employee breaches any of the material terms of this Agreement and
fails to remedy such breach within 10 days following written notice by the
Company to Employee of such breach; (ii) Employee is convicted of a felony;
(iii) Employee fails, after at least one written warning from the Company, to
perform duties assigned under this Agreement (other than a failure due to death
or physical or mental disability); (iv) Employee intentionally engages in
conduct which is demonstrably and materially injurious to the Company; (v)
Employee commits fraud or theft of personal or Company property from Company
premises; (vi) Employee falsifies Company documents or records; (vii) Employee
engages in acts of gross carelessness or willful negligence to endanger life or
property on Company premises; (viii) Employee engages in sexual harassment
involving employees of the Company or on premises of the Company or with respect
to business of the Company; (ix) Employee uses, distributes, possesses or is
under the influence of illegal drugs, alcohol or any other intoxicant on Company
premises; or (x) Employee intentionally violates state, federal or local laws
and regulations relating to the business of the Company. Any notice referred to
in the preceding sentence shall state with particularity the events or
circumstances which the Board of Directors of the Company has determined
constituted such Cause.
5.02 Option to Terminate if Employee Permanently Disabled, Etc.
The Company shall have the option to terminate this Agreement immediately by
giving written notice of termination to Employee upon the occurrence of any one
of the following events:
(a) Employee becomes permanently disabled because of sickness,
physical or mental disability, or any other reason, so that it
reasonably appears to the Board of Directors of the Company that
Employee will be unable to perform the essential aspects of his duties
under this Agreement;
(b) The death of Employee; or
(c) The continued incapacity on the part of Employee to perform
his duties for a continuous period of 60 days, unless waived by the
Company, and a reasonable determination by the Board of Directors of
the Company that Employee has not performed his duties during such
period.
5.03 Effect of Termination on Compensation. In the event of the
termination of this Agreement prior to the expiration of the Initial Term or the
Extension Term then in effect, as the case may be, pursuant to Section 5.01 or
Section 5.02, Employee shall be entitled to Employee's Base
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Salary (subject to standard deductions) at the rate then in effect to the date
of such termination, computed pro rata up to and including that date, and
Employee shall be entitled to no further compensation after the date of such
termination.
5.04 Company's Option to Terminate. This Agreement may be
terminated by the Company immediately at any time without Cause pursuant to this
Section 5.04 upon notice given by the Company to the Employee, after due
authorization by the Board of Directors. Such notice shall specify the date when
such termination shall be effective. A notice given by the Company pursuant to
Section 1.03 to terminate this Agreement at the end of the Initial Term or any
Extension Term, as the case may be, shall be deemed to be a termination without
Cause pursuant to this Section 5.04. In the event of the termination of this
Agreement by the Company without Cause pursuant to this Section 5.04, the
Company shall continue to pay to Employee, not less frequently than monthly, his
Base Salary (subject to standard deductions) at the rate in effect as of such
termination from the date of such termination through the date which is the
latest to occur of the following: (a) the date on which the Initial Term or
Extension Term then in effect, as the case may be, expires, (b) the date which
is twelve (12) months after the date of the Company's termination of this
Agreement without Cause pursuant to this Section 5.04 or (c) the date on which
the Non-Competition Period (as hereinafter defined) expires. As used herein, the
term "Non-Competition Period" shall mean the two-year period after the
termination of this Agreement referred to in Section 6.08; provided, however, in
the event that the Company shall give notice to Employee pursuant to this
Section 5.04 that the Company shall not require Employee to comply with the
provisions of Section 6.08 after a date prior to the expiration of such two-year
period after the termination of this Agreement, the "Non-Competition Period"
shall mean the period commencing on the date of the termination of this
Agreement and ending on the date specified in the Company's notice respecting
the shortening or elimination of the period for compliance with Section 6.08, as
the case may be. The Company shall have no further obligations to Employee
hereunder after the termination of this Agreement pursuant to this Section 5.04
except for the payments of Base Salary as set forth in this Section 5.04.
5.05 Survival of Provisions. The terms and provisions of this
Article 5 shall survive the termination of this Agreement and shall be fully
enforceable despite and after any such termination.
ARTICLE 6
PROPRIETARY PROPERTY; CONFIDENTIAL
INFORMATION; NON-COMPETITION
6.01 Duties. Employee understands and agrees that, during the
Initial Term and each Extension Term, if any, Employee's duties will include the
conception of improvements and inventions (whether or not ultimately issuing as
Letters Patent in any country), the creation of confidential information
protected by the Company as trade secrets and the authoring of "works" as
defined under the copyright laws of the United Xxxxxx xx Xxxxxxx xxxxx xx 00
Xxxxxx Xxxxxx Code. Such information is collectively referred to in this
Agreement as "Proprietary Information".
6.02 Ownership. Employee understands and agrees that for all
Proprietary Information created within the scope of Employee's employment, the
Company shall own all right,
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title and interest thereto. In the case of works authored or created by
Employee, such works are considered a "work made for hire" under 00 Xxxxxx
Xxxxxx Code ss. 101 - the copyright laws. All Proprietary Information, if any,
created by Employee prior to his employment with the Company, and in which
Employee claims ownership, is shown in Schedule 6.02 attached hereto.
6.03 Notice and Assistance. Employee shall give adequate written
notice to the Company as soon as practicable of all Proprietary Information
created by Employee during Employee's employment with the Company, assist the
Company in evaluating the Proprietary Information for patent, trade secret and
copyright protection and sign all documents and do all things necessary at the
expense of the Company to assist the Company in the protection, development,
marketing or transfer of such Proprietary Information.
6.04 Assignment. Employee hereby assigns and agrees to assign all
right, title and interest into such Proprietary Information to the Company or
its nominee. At the request of the Company, whether during or after the
termination of Employee's employment, Employee shall timely execute or join in
executing all papers or documents required for the filing of patent applications
and copyright registrations in the United States of America and such foreign
countries as the Company may in its sole discretion select, and shall assign all
such patent applications and copyrights to the Company or its nominee, and shall
provide the Company or its agent or attorneys with all reasonable assistance in
the preparation and prosecution of patent application and copyright
registrations, including drawings, specifications, and the like, all at the
expense of the Company, and shall do all that may be necessary to establish,
protect or maintain the rights of the Company or its nominee in the inventions,
patent applications, Letters Patent and copyrights in accordance with the spirit
of this Agreement.
6.05 Confidential Information. Employee agrees to keep
confidential all information protected by the Company as trade secrets during
the Initial Term and each Extension Term, if any, (including any leaves of
absence) and will neither use nor disclose the confidential information without
written authorization by the Company for ten years thereafter. For the purposes
of this Agreement, such confidential information shall include information set
forth in any application for Letters Patent unless and until such information is
ultimately published. The Company and Employee mutually agree that the following
types of information shall not be protected by this Agreement:
(a) Information already in the public domain at the time Employee
received it;
(b) Information which although disclosed in confidence to Employee
is later disseminated by the Company into the public domain;
(c) Information which although received in confidence by Employee
is subsequently disseminated into public domain by a third party who has
not breached any duty to any other party in disseminating such information;
and
(d) Information given by the Company in confidence to Employee
which Employee is expressly authorized in writing by the Company to use or
disclose thereafter.
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Employee also understands and agrees that he will maintain in confidence all
information known to him by reason of his employment even if such information is
included in a redacted deposit of a work filed with an application for copyright
registration, if such deposit has been abridged in order to protect the
confidentiality of the information deposited with the Copyright Office. For
purposes of this Agreement, a trade secret "...may consist of any formula,
pattern, device or compilation of information which is used in one's business,
and which gives him an opportunity to obtain an advantage over competitors who
do not know or use it. It may be a formula for a chemical compound, a process of
manufacturing, trading or preserving materials, a pattern for machine or other
device, or a list of customers..." as commonly interpreted by the courts of the
State of Texas. Upon the termination of this Agreement, regardless of how such
termination may be brought about, Employee shall deliver to the Company any and
all documents, instruments, notes, papers or other expressions or embodiments of
Proprietary Property or confidential information which are in Employee's
possession or control.
6.06 Publicity. During the Initial Term and each Extension Term,
if any, and for a period of ten years thereafter, Employee shall not, directly
or indirectly, originate or participate in the origination of any publicity,
news release or other public announcements, written or oral, whether to the
public press or otherwise, relating to this Agreement, to any amendment hereto,
to Employee's employment hereunder or to the Company, without the prior written
approval of the Company.
6.07 Fiduciary Relationship. Notwithstanding any provision of
Section 2.02 which may permit Employee to engage in business activities other
than Employee's duties hereunder, Employee, by virtue of his high position of
trust and reliance on him by the Company, understands that Employee enjoys a
fiduciary relationship with the Company in carrying out his obligations under
this Agreement. Accordingly, Employee agrees to honor his obligations under this
Agreement by conducting himself with the highest degree of fairness and trust
toward the Company.
6.08 Non-Competition. Notwithstanding any provision of Section
2.02 which may permit Employee to engage in business activities other than
Employee's duties hereunder, in consideration of the benefits of this Agreement,
including Employee's access to and limited use of proprietary and confidential
information of the Company, as well as training, education and experience
provided to Employee by the Company directly and/or as a result of work projects
assigned by the Company with respect thereto, Employee hereby covenants and
agrees that during the Initial Term and each Extension Term, if any, and for a
period of two years following termination of this Agreement, Employee shall not,
directly or indirectly, as proprietor, partner, stockholder, director, officer,
employee, consultant, joint venturer, investor or in any other capacity, engage
in, or own, manage, operate or control, or participate in the ownership,
management, operation or control, of any entity which engages, in the United
States or Canada, in any business activity in which the Company participates
during Employee's employment with the Company; provided, however, the foregoing
shall not prohibit Employee from purchasing and holding as an investment not
more than 5% of any class of publicly traded securities, or 10% of any class of
other securities, of any entity which is engaged in the design, manufacturing,
marketing, sale or distribution of minimally invasive surgery products, so long
as Employee does not participate in any way in the management, operation or
control of such entity.
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6.09 Judicial Reformation. Employee acknowledges that, given the
nature of the Company's business, the covenants contained in Section 6.08
establish reasonable limitations as to time, geographic area and scope of
activity to be restrained and do not impose a greater restraint than is
reasonably necessary to protect and preserve the goodwill of the Company's
business and to protect its legitimate business interests. If, however, Section
6.08 is determined by any court of competent jurisdiction to be unenforceable by
reason of its extending for too long a period of time or over too large a
geographic area or by reason of it being too extensive in any other respect or
for any other reason, it will be interpreted to extend only over the longest
period of time for which it may be enforceable and/or over the largest
geographic area as to which it may be enforceable and/or to the maximum extent
in all other aspects as to which it may be enforceable, all as determined by
such court.
6.10 Customer Lists; Non-Solicitation. In consideration of the
benefits of this Agreement, including Employee's access to and limited use of
proprietary and confidential information of the Company, as well as training,
education and experience provided to Employee by the Company directly and/or as
a result of work projects assigned by the Company with respect thereto, Employee
hereby further covenants and agrees that, notwithstanding any provision of
Section 2.02 which may permit Employee to engage in business activities other
than Employee's duties hereunder, during the Initial Term and each Extension
Term, if any, and for a period of one year following the termination of this
Agreement, Employee shall not, directly or indirectly, (a) use or make known to
any person or entity the names or addresses of any clients or customers of the
Company or any other information pertaining to them, (b) call on, solicit, take
away or attempt to call on, solicit or take away any clients or customers of the
Company on whom Employee called or with whom he became acquainted during his
employment with the Company, nor (c) recruit, hire or attempt to recruit or hire
any employees of the Company.
6.11 Equitable Relief. In the event of a breach or a threatened
breach by Employee of any of the provisions contained in Article 6 of this
Agreement, Employee acknowledges that the Company will suffer irreparable injury
not fully compensable by money damages and, therefore, will not have an adequate
remedy available at law. Accordingly, the Company shall be entitled to obtain
such injunctive relief or other equitable remedy from any court of competent
jurisdiction as may be necessary or appropriate to prevent or curtail any such
breach, threatened or actual. The foregoing shall be in addition to and without
prejudice to any other rights that the Company may have under this Agreement, at
law or in equity, including, without limitation, the right to xxx for damages.
6.12 Survival of Provisions. The terms and provisions of this
Article 6 shall survive the termination of this Agreement and shall be fully
enforceable despite and after any such termination.
ARTICLE 7
GENERAL PROVISIONS
7.01 Notices. All notices or other communications required under
this Agreement may be effected either by personal delivery in writing or by
certified mail, return receipt requested. Notice shall be deemed to have been
given when delivered or mailed to the parties at their respective
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addresses as set forth above or when mailed to the last address provided in
writing to the other party by the addressee.
7.02 Entirety of Agreement. This Agreement supersedes all
other agreements, including the Previous Employment Agreement, either oral or in
writing, between the parties to this Agreement, with respect to the employment
of the Employee by the Company. This Agreement contains the entire understanding
of the parties and all of the covenants and agreements between the parties with
respect to such employment. The Previous Employment Agreement is hereby
terminated as of the date of this Agreement.
7.03 Governing Law. This Agreement shall be governed by the laws
of the State of Texas and deemed performable in Bexar County, Texas.
7.04 Binding Agreement. This Agreement shall be binding upon all
parties hereto and their respective heirs, legal representatives and successors.
EXECUTED effective the 15th day of December, 1998.
LIFEQUEST MEDICAL, INC.
By:
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Name:
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Title:
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XXXXXXX X. XXXXXXXXX
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SCHEDULE 6.02
PROPRIETARY PROPERTY CLAIMED BY EMPLOYEE
Proprietary Property Claimed:*
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* None, if left blank
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