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EXHIBIT 10.49
SABRATEK CORPORATION
EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made as of February 25, 1997, between Sabratek
Corporation, a Delaware corporation ("Sabratek"), and Xxxxxx X. Xxxxxxx
("Executive").
Pursuant to an Asset Purchase Agreement (the "Purchase Agreement") among
Sabratek, Xxxxxx X. Xxxxxxx and Xxxxx, Inc., a Massachusetts corporation
("Xxxxx"), Sabratek will acquire the assets of Xxxxx and will operate the
business currently operated by Xxxxx (the "Business") from and after the closing
under the Purchase Agreement through a new subsidiary of Sabratek or as a
division of Sabratek (either, the "Company").
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment. The Company shall employ Executive, and Executive hereby
accepts employment with the Company, upon the terms and conditions set forth in
this Agreement for the period beginning on the date hereof and ending as
provided in paragraph 5 hereof (the "Employment Period").
2. Position and Duties.
(a) During the Employment Period, Executive shall serve as the Vice
President of Operations of the Business and shall have the duties and
responsibilities delegated to Executive by the Company's board of directors (the
"Board") or the Company's Chief Executive Officer (the "CEO") or the Company's
President (the "President").
(b) Executive shall report directly to the President (or to another senior
executive of the Business designated by the President) and shall devote his best
efforts and his full business time and attention (except for permitted vacation
periods and reasonable periods of illness or other incapacity) to the business
and affairs of the Company. Executive shall perform his duties and
responsibilities to the best of his abilities in a diligent, trustworthy,
businesslike and efficient manner.
3. Base Salary and Benefits.
(a) During the Employment Period, Executive's base salary shall be $100,000
per annum or such higher rate as the CEO may designate from time to time (the
"Base Salary"), which salary shall be payable in regular installments in
accordance with the Company's general payroll
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practices and shall be subject to customary withholding. The Executive's base
salary level shall be reviewed annually, and Executive shall be eligible for
performance based increases on the same basis as other employees of Sabratek.
In addition, during the Employment Period, Executive shall be eligible to
participate in all of the Company's employee benefit programs.
(b) The Company shall reimburse Executive for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement
which are consistent with the Company's policies in effect from time to time
with respect to travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and documentation of such
expenses.
(c) In addition to the Base Salary, Executive may be awarded a cash or
stock bonus or options to purchase Sabratek common stock following the end of
each fiscal year during the Employment Period based upon Executive's performance
and the Company's operating results during each year.
4. Stock Options.
(a) As of the date of this Agreement, Executive is hereby granted options
to acquire 20,000 shares of Sabratek's common stock (the "Options") pursuant to
Sabratek's Amended and Restated 1993 Stock Option Plan (the "Option Plan"). The
Options shall have a 10-year term and shall have an exercise price per share
equal to the closing sales price for the Sabratek common stock on the trading
day prior to the date of grant. Subject to the provisions of this paragraph 4,
the Options shall vest and become exercisable by Executive as follows: (i)
Options to purchase 2,000 shares shall be fully vested and exercisable at the
date hereof; (ii) Options to purchase 4,500 shares shall vest and become
exercisable on the first anniversary of the date hereof; (iii) Options to
purchase 4,500 shares shall vest and become exercisable on the second
anniversary of the date hereof; (iv) Options to purchase 4,500 shares shall vest
and become exercisable on the third anniversary of the date hereof; and (v)
Options to purchase 4,500 shares shall vest and become exercisable on the fourth
anniversary of the date hereof.
(b) If the Employment Period is terminated by the Company for Cause (as
defined below), all unvested Options will immediately be forfeited to the
Company and Executive will have no further rights in respect thereof.
(c) If the Employment Period is terminated by the Company without Cause,
or if the Employment Period is terminated because of the death or permanent
disability or incapacity (which shall mean the inability on a permanent basis to
carry out the duties and responsibilities of the position on an effective basis
due to casualty, illness, injury, or other impairment of mental, physical or
emotional faculties, as determined by the President or CEO exercising reasonable
judgement) of Executive, the unvested Options that are scheduled to vest on the
next anniversary of the date hereof under paragraph 4(a) will immediately vest
and become exercisable and all other unvested Options will immediately be
forfeited to the Company and Executive will have no further rights in respect
thereof.
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(d) In the event of a Sabratek Change of Control (as defined below), all
unvested Options will immediately vest and become exercisable.
(e) If the Employment Period is terminated by the resignation of Executive,
all unvested Options will immediately be forfeited to the Company and Executive
will have no further rights in respect thereof.
(f) Following termination of the Employment Period for any reason, all
vested Options shall be exercisable by Executive (or his executor, administrator
or other legal representative) for a period of 60 days from the date of
termination.
(g) At the time of the grant of the Options, Executive shall be issued an
option grant letter in the form customarily used by the Company for option
grants made under the Option Plan, and the Options shall be subject to the terms
and conditions of the Option Plan in addition to the terms set forth in this
Agreement.
(h) For purposes of this paragraph 4, a "Sabratek Change of Control" shall
be deemed to occur upon (i) the sale of all or substantially all of the assets
of Sabratek, (ii) a merger or consolidation of Sabratek with another
corporation, or an exchange of the securities of Sabratek for the securities of
another corporation, with the result that the shareholders of Sabratek
immediately before such merger, consolidation or exchange own less than a
majority of the outstanding voting securities of the surviving corporation of
such merger or consolidation, or of the corporation in which such shareholders
own securities as a result of and following such exchange, immediately after
such merger, consolidation or exchange, or (iii) the acquisition by any person
or group (within the meaning of Section 13(d) under the Securities Exchange Act
of 1934, as amended) of a majority of the outstanding common stock of Sabratek
in one or a series of related transactions. Notwithstanding the foregoing, a
change of control shall not be deemed to occur as a result of any of the
foregoing transactions if the corporate existence of Sabratek is not affected by
such transaction and Sabratek's chief executive officer and directors retain
their positions with Sabratek (and constitute at least a majority of the board
of directors) following the transaction.
5. Term.
(a) The Employment Period shall terminate upon the date of Executive's
resignation, death or permanent disability or incapacity (which shall mean the
inability on a permanent basis to carry out the duties and responsibilities of
the position on an effective basis due to casualty, illness, injury, or other
impairment of mental, physical or emotional faculties, as determined by the
President or CEO exercising reasonable judgement), and the Employment Period may
be terminated by the Company at any time prior to such date for Cause (as
defined below) or without Cause by delivery of notice to Executive of such
termination.
(b) If the Employment Period is terminated by the Company without Cause,
Executive shall be entitled to receive his Base Salary (i) through the second
anniversary of the date of this Agreement, in the event such termination occurs
prior to the first anniversary of the date hereof or (ii) for one year following
such termination, in the event such termination occurs on or
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after the first anniversary of the date hereof, provided that Executive shall be
entitled to such continuation of his Base Salary if and only if Executive has
not breached in any material respect the provisions of paragraphs 6 through 10
hereof. In the event that Executive is terminated without Cause by the Company,
the company shall pay the reasonable relocation expenses of Executive to
relocate his family to the Commonwealth of Massachusetts, if Executive's
principal place of business is in any other state at the time of such
termination. The amounts payable pursuant to this paragraph 5(b) shall be
reduced by the amount of any compensation Executive receives with respect to any
other employment during such Base Salary continuation period.
(c) If the Employment Period is terminated by the Company for Cause or is
terminated by the Executive's resignation, death, or disability pursuant to
paragraph 5(a) above, Executive shall be entitled to receive his Base Salary
through the date of termination.
(d) All of Executive's rights to fringe benefits and bonuses hereunder (if
any) which accrue after the termination of the Employment Period shall cease
upon such termination.
(e) For purposes of this Agreement, "Cause" shall mean (i) a material
breach of this Agreement by Executive, (ii) a material breach of Executive's
duty of loyalty to Sabratek or any of its subsidiaries or any act of dishonesty
or fraud with respect to Sabratek or any of its subsidiaries, (iii) the
commission by Executive of a felony, a crime involving moral turpitude or other
act or omission causing material harm to the standing and reputation of Sabratek
and its subsidiaries, or (iv) Executive's continued failure to perform his
duties as directed by the Board or the President or CEO as contemplated by this
Agreement.
(f) The Company may offset any amounts Executive owes it or its
subsidiaries against any amounts it owes Executive hereunder.
6. Confidential Information. Executive acknowledges that the information,
observations and data obtained by him while employed by Sabratek and its
subsidiaries (including those obtained while employed by Xxxxx prior to the date
of this Agreement and the acquisition of Xxxxx'x assets by the Company)
concerning the business or affairs of Sabratek (including the Business) or any
subsidiary of Sabratek ("Confidential Information") are the property of Sabratek
or such subsidiary. Therefore, Executive agrees that he shall not disclose to
any unauthorized person or use for his own purposes any Confidential Information
without the prior written consent of the President or CEO, unless and to the
extent that the aforementioned matters become generally known to and available
for use by the public other than as a result of Executive's acts or omissions.
Executive shall deliver to Sabratek at the termination of the Employment Period,
or at any other time Sabratek may request, all memoranda, notes, plans, records,
reports, computer tapes, printouts and software and other documents and data
(and copies thereof) relating to the Confidential Information, Work Product (as
defined below) or the business of Sabratek or any subsidiary of Sabratek which
he may then possess or have under his control.
7. Inventions and Patents. Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable) which
relates to Sabratek's or any of its
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subsidiaries' actual or anticipated business, research and development or
existing or future products or services and which are conceived, developed or
made by Executive while employed by Sabratek and its subsidiaries, or by Xxxxx
("Work Product") belong to Sabratek or such subsidiary. Executive shall promptly
disclose such Work Product to the President or CEO and perform all actions
reasonably requested by the President or CEO (whether during or after the
Employment Period) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other instruments).
8. Non-Compete. In further consideration of the compensation to be
paid to Executive hereunder, Executive acknowledges that in the course of his
employment with the Sabratek or any of its subsidiaries he shall become
familiar, and during his employment with Xxxxx he has become familiar, with the
trade secrets of the Business and with other Confidential Information concerning
Sabratek and its predecessors and its subsidiaries and that his services have
been and shall be of special, unique and extraordinary value to Xxxxx and to
Sabratek and its subsidiaries. Therefore, Executive agrees that, during the
Employment Period and until the later of (i) the second anniversary of the date
of this Agreement and (ii) the first anniversary of the expiration of the
Employment Period (the "Non-Compete Period"), he shall not directly or
indirectly own any interest in, manage, control, participate in, consult with,
render services for, or in any manner engage in any business competing with the
businesses of Sabratek or its subsidiaries, as the businesses of Sabratek and
its subsidiaries exist or are in process on the date of the termination of
Executive's employment, within any geographical area in which Sabratek or its
subsidiaries engage or plan to engage in such businesses. Nothing herein shall
prohibit Executive from (i) employment as a pharmacist in a retail pharmacy
business or in a pharmacy business maintained as part of a hospital, health
maintenance organization or other similar entity providing health services to
the public where such pharmacy business is only serving such entity providing
health services or (ii) being a passive owner of not more than 2% of the
outstanding stock of any class of a corporation which is publicly traded, so
long as Executive has no active participation in the business of such
corporation.
9. Non-Solicitation During the Employment Period and until the
later of (i) the second anniversary of the date of this Agreement and (ii) the
first anniversary of the expiration of the Employment Period (the
"Non-Solicitation Period"), Executive shall not directly or indirectly through
another entity (i) induce or attempt to induce any employee of Sabratek or any
of its subsidiaries (including the Company) to leave the employ of Sabratek or
such subsidiary, or in any way interfere with the relationship between Sabratek
or any such subsidiary and any employee thereof, or (ii) induce or attempt to
induce any customer, supplier, licensee, licensor, franchisee or other business
relation of Sabratek or any such subsidiary to cease doing business with
Sabratek or such subsidiary, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and Sabratek
or any such subsidiary (including, without limitation, making any negative
statements or communications about Sabratek or its subsidiaries).
10. Enforcement. If, at the time of enforcement of paragraph 6, 7, 8
or 9 of this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area. Because
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Executive's services are unique and because Executive has access to Confidential
Information and Work Product, the parties hereto agree that money damages would
not be an adequate remedy for any breach of this Agreement. Therefore, in the
event a breach of threatened breach of this Agreement, Sabratek or its
successors or assigns may, in addition to other rights and remedies existing in
their favor, apply to any court of competent jurisdictions for specific
performance and/or injunctive or other relief in order to enforce, or prevent
any violations of, the provisions hereof (without posting a bond or other
security). In addition, in the event of an alleged breach or violation by
Executive of paragraph 9 and/or 10, the Non-Compete Period and/or
Non-Solicitation Period, as applicable, shall be tolled until such breach or
violation has been duly cured. Executive agrees that the restrictions contained
in paragraphs 9 and 10 are reasonable.
11. Executive's Representations. Executive hereby represents and warrants
to the Company that (i) the execution, delivery and performance of this
Agreement by Executive do not and shall not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound, (ii) Executive is
not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity, and (iii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall
be the valid and binding obligation of Executive, enforceable in accordance with
its terms. Executive hereby acknowledges and represents that he has consulted
with independent legal counsel regarding his rights and obligations under his
Agreement and that he fully understands the terms and conditions contained
herein.
12. Survival. Paragraphs 7 through 10 and paragraphs 12 through 20 shall
survive and continue in full force in accordance with their terms
notwithstanding any termination of the Employment Period.
13. Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed by first class mail,
return receipt requested, to the recipient at the address below indicated:
Notices to Executive: Xxxxxx X. Xxxxxxx
0 Xxxxxxxxxxxx Xxx
Xxxxxx, XX 00000
with a copy to: Xxxxxxx X. Xxxxxxxxxx, Esq.
Cossingham Law Office, P.C.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxxxx, XX 00000
Notices to Sabratek: Sabratek Corporation
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx, XX 00000
Attn: Chief Executive Officer
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with a copy to: Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxx X. Berkshire
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice in accordance with this
paragraph to the sending party. Any notice under this Agreement shall be deemed
to have been given when so delivered or mailed.
14. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
15. Complete Agreement. This Agreement, the Purchase Agreement,
those documents expressly referred to herein and other documents of even date
herewith embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or representations by
or among the parties, written or oral, which may have related to the subject
matter hereof in any way.
16. No Strict Construction. The language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
17. Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
18. Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive, Sabratek and their
respective heirs, successors and assigns, except that Executive may not assign
his rights or delegate his obligations hereunder without the prior written
consent of Sabratek.
19. Choice of Law. All issues and questions concerning the
construction, validity, enforcement and interpretation of this agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the state of Illinois, without giving effect to any choice of
law or conflict of law rules or provisions (whether of the state of Illinois or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the state of Illinois.
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20. Amendment and Waiver. The provisions of this Agreement may be amended
or waived only with the prior written consent of Sabratek and Executive, and no
course of conduct or failure or delay in enforcing the provisions of this
Agreement shall affect the validity, binding effect or enforceability of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SABRATEK CORPORATION
By /s/ Xxxxxxx X. Xxxxxx
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Its SVP and CFO
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XXXXXX X. XXXXXXX
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SABRATEK CORPORATION
By
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Its
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/s/ Xxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXX
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