EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of June 18, 2003 by and
between Dimension Distributing, Inc., a Connecticut corporation (the "Company"),
and Xxx Xxxx, an individual residing in the State of Maine ("Employee").
W I T N E S S E T H:
WHEREAS, Company is in the business of marketing and selling health
care supplies, materials, devices and equipment;
WHEREAS, pursuant to a Share Purchase Agreement (the "Share Purchase
Agreement") entered into by Company's owner and Valesc Holdings Inc. ("Valesc"),
Valesc will acquire 100% of the Company's capital stock (the "Acquisition");
WHEREAS, it is a condition to the closing of the Acquisition that the
Company and Employee enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Employment. Company hereby employs Employee and Employee hereby
accepts employment with Company for the period and upon the terms and conditions
contained in this Agreement.
2. Office and Duties.
(a) Employee shall serve Company as the President and shall
have all of the rights and duties of a president of a
Connecticut corporation. Employee shall oversee and be
responsible for the operations of Company including, but not
limited to, decisions related to hiring, termination, finance,
marketing, strategy, and for ensuring the profitability and
success of Company. Company shall also appoint Employee to
serve on Company's Board of Directors during the term of this
Agreement.
(b) Throughout the term of this Agreement, Employee shall
devote his working time, energy, skill and best efforts to the
performance of his duties hereunder in a manner which will
faithfully and diligently further the business and interests
of Company.
3. Term. This Agreement shall be for an initial term commencing on the
date hereof and ending on June 18, 2008 (the "Initial Term"), and shall be
automatically extended for successive periods of one year each (each, a "Renewal
Term") upon the same terms and conditions set forth in this Agreement unless
this Agreement is terminated by either party by giving the other party written
notice of termination at least three months before the expiration of
the then current term. (The Initial Term and all Renewal Terms (if any) shall be
collectively referred to herein as the "term".)
4. Compensation.
(a) Salary. For all of the services rendered by Employee to
Company under this Agreement, during each year of the Initial
Term of his employment, Employee shall receive a base salary
of the greater of (i) $20,000 or (ii) such other amount as is
necessary to satisfy applicable payroll deductions and benefit
contributions. Employee's salary shall be payable in
bi-monthly installments or otherwise in accordance with
Company's regular payroll practices. Employee shall also
receive as compensation at the close of each calendar quarter
an amount equal to Company's net profits for that quarter,
which amounts shall be paid no later than ten (10) business
days after the calculation of the quarter's net sales as
reasonably determined by the Company and after any
distributions have been made pursuant to Section 11 of the
Share Purchase Agreement.
(b) Bonus. Employee shall be eligible to participate in
bonuses awarded to senior management to the extent that such
bonuses are awarded or authorized by the Board of Directors of
Company from time to time during the term of this Agreement.
5. Benefits; Expenses.
(a) Throughout the term of this Agreement and as long as they
are kept in force by Company, Employee shall be entitled to
participate in and receive the benefits of any profit sharing
or retirement plans and any health, life, accident or
disability insurance plans or programs made available to other
similarly situated employees of Company, subject to all of the
terms and conditions of such plans and programs.
(b) Company will reimburse Employee for all reasonable
expenses incurred by Employee in connection with the
performance of Employee's duties hereunder upon receipt of
receipts therefor and in accordance with Company's regular
reimbursement procedures and practices in effect from time to
time.
6. Ownership.
(a) Any and all writings, inventions, improvements, processes,
procedures and/or techniques which Employee may make,
conceive, discover or develop, either solely or jointly with
any other person or persons, at any time during the term of
this Agreement, which relate to or are useful in connection
with the Company's business, shall be the sole and exclusive
property of Company. Employee shall make full disclosure to
Company of all such writings, inventions, improvements,
processes, procedures and techniques, and shall do everything
necessary or desirable to vest absolute title thereto in
Company. Employee shall
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not be entitled to any additional or special compensation or
reimbursement regarding any and all such writings, inventions,
improvements, processes, procedures and techniques.
(b) Employee acknowledges and agrees that all copyrightable
material generated or developed in connection with the
services he provides to Company, if any, will be considered
works made for hire and that such material will, upon its
creation, be owned exclusively by Company. To the extent that
Employee may be entitled to claim any ownership interest in
any of the writings, inventions, improvements, processes,
procedures and/or techniques described in paragraph (a) above,
whether copyrightable, patentable or otherwise, Employee
hereby assigns and transfers to Company all of his right,
title and interest in and to such materials, under patent,
copyright, trade secret, trademark other applicable laws, in
perpetuity or for the longest period otherwise permitted by
law.
7. Termination of Employment; Severance. Notwithstanding any other
provision of this Agreement:
(a) Termination "for cause" by Company. During the term of
this Agreement, Company may, by action of its Board of
Directors (with Employee abstaining from the vote on any such
action), terminate Employee's employment with Company "for
cause" (as defined below) by sending written notice to
Employee specifying with reasonable particularity the basis
for such termination. Upon any such termination, Employee's
right to any further compensation hereunder shall cease and
terminate, except that Employee shall be entitled to receive,
on the terms and at the times specified in this Agreement: (i)
any salary earned through the date of termination of
employment and an amount equal to Company's net profits earned
through the three months immediately following the date of
termination of employment; (ii) the reimbursement of any
expenses incurred prior to the date of termination; and (iii)
a severance payment equal to $25,000. For purposes of this
paragraph (a), termination by Company "for cause" shall mean
and include Employee's: (a) material breach, as reasonably
determined by the Company's Board of Directors (with Employee
abstaining from the vote on any such action), of any
proprietary information or confidentiality agreement entered
into with Company or Valesc, including without limitation, the
theft or other misappropriation of Company's or Valesc's
Confidential Information; (b) conviction (including any plea
of nolo contendere) of any felony or any crime involving fraud
or dishonesty (whether or not related to his employment); (c)
participation in any fraud against Company or Valesc; or (d)
material breach, as determined by the Company's Board of
Directors (with Employee abstaining from the vote on any such
action), of his duties to Company, which breach Employee shall
have failed to correct within 30 days of receipt of written
notification of the same by Company or Valesc.
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(b) Termination "without cause" by Company. During the term of
this Agreement, Company may, by action of its Board of
Directors (with Employee abstaining from the vote on any such
action), terminate Employee's employment with Company "without
cause" (as defined below) by sending written notice to
Employee specifying with reasonable particularity the basis
for such termination. Upon any such termination, Employee's
right to any further compensation hereunder shall cease and
terminate, except that Employee shall be entitled to receive,
on the terms and at the times specified in this Agreement: (i)
any salary earned through the date of termination of
employment and an amount equal to Company's net profits earned
through the three months immediately following the date of
termination of employment; (ii) the reimbursement of any
expenses incurred by Employee prior to the date of
termination; and (iii) a severance package, in which Employee
shall receive an amount equal to Company's average monthly net
profits for the 12 months immediately preceding the date of
termination (which shall be no less than $15,000 and no more
than $35,000), multiplied by the number of months remaining in
the Initial Term or any Renewal Term, as applicable. For
purposes of this paragraph (b), an event or occurrence
constituting termination "without cause" shall be any
termination by Company that is not termination "for cause" as
described in paragraph (a) above, including without limitation
the failure of Company to renew Employee's employment at the
end of the Initial Term.
(c) Termination "for good reason" by Employee. During the term
of this Agreement, Employee may terminate his employment with
Company "for good reason" (as defined below) by sending
written notice to Company specifying with reasonable
particularity the basis for such termination. Upon any such
termination, Employee's right to any further compensation
hereunder shall cease and terminate, except that Employee
shall be entitled to receive, on the terms and at the times
specified in this Agreement: (i) any salary earned through the
date of termination of employment and an amount equal to
Company's net profits earned through the three months
immediately following the date of termination of employment;
(ii) the reimbursement of any expenses incurred by Employee
prior to the date of termination; and (iii) a severance
package, in which Employee shall receive an amount equal to
Company's average monthly net profits for the 12 months
immediately preceding the date of termination (which shall be
no less than $15,000 and no more than $35,000), multiplied by
the number of months remaining in the Initial Term or any
Renewal Term, as applicable. For purposes of this paragraph
(c), termination "for good reason" by Employee shall mean and
include: (a) a forced relocation of Employee; or (b) a
material breach of this Agreement by Company, which breach
Company shall have failed to correct within 30 days of receipt
of written notification of the same by Employee.
(d) Voluntary Termination by Employee. If Employee desires to
voluntarily terminate his employment with Company for any
reason other than "for good reason" (as defined above), then
Employee must give Company at least one
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month's prior written notice of his intention to do so. Upon any
such termination, Employee's right to any further compensation
hereunder shall cease and terminate, except that Employee shall be
entitled to receive, on the terms and at the times specified in
this Agreement: (i) any salary earned through the date of
termination of employment and an amount equal to Company's net
profits earned through the three months immediately following the
date of termination; (ii) the reimbursement of any expenses
incurred by Employee prior to the date of termination; and (iii) a
severance payment equal to $25,000. For purposes of this paragraph
(d), an event or occurrence constituting voluntary termination
shall be any termination by Employee that is not termination "for
good reason" as described in paragraph (c) above.
(e) Termination on Disability. If, during the term of this
Agreement, Employee has become "disabled" (as defined below),
then Company may, by action of its Board of Directors (with
Employee abstaining from the vote on any such action),
terminate Employee's employment with Company, upon written
notice to Employee. Upon any such termination, Employee's
right to any further compensation hereunder shall cease and
terminate, except that Employee shall be entitled to receive,
on the terms and at the times specified in this Agreement: (i)
any salary earned through the date of termination of
employment and an amount equal to Company's net profits earned
through the three months immediately following the date of
termination; (ii) the reimbursement of any expenses incurred
by Employee prior to the date of termination; and (iii) a
severance package, in which Employee shall receive an amount
equal to Company's average monthly net profits for the 12
months immediately preceding the date of termination (which
shall be no less than $15,000 and no more than $35,000),
multiplied by the number of months remaining in the Initial
Term or any Renewal Term, as applicable. For purposes of this
paragraph (e), Employee shall be deemed to be "disabled" if,
in the opinion of a medical doctor selected by Company's Board
of Directors, he has been unable to perform, due to physical
or mental disability, substantially all of his duties of
employment for a period of six months within any 12
consecutive calendar months; provided, however, that a
resumption by Employee of full-time and normal duties
associated with his employment for a continuous period of 30
days shall be deemed to be resumption of full-time and normal
duties hereunder, and any subsequent disability shall not
include a period of previous disability. In the event of a
dispute as to whether or not Employee shall be considered to
be disabled, such facts shall be determined by a medical
doctor selected jointly by each of the medical doctors engaged
by Employee and Company's Board of Directors.
(f) Termination on Death. In the event of Employee's death
during the term of this Agreement, then this Agreement shall
automatically terminate upon the date of death. Upon any such
termination, Employee's right to any further compensation
hereunder shall cease and terminate, except that Employee's
estate (or a beneficiary otherwise designated in writing by
Employee) shall be entitled to
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receive, on the terms and at the times specified in this Agreement:
(i) any salary earned through the last day of the month of
Employee's death and an amount equal to Company's net profits
earned through the three months immediately following the date of
Employee's death; (ii) the reimbursement of any expenses incurred
by Employee prior to the date of death; and (iii) a severance
package, in which Employee's estate (or designated beneficiary)
shall receive an amount equal to Company's average monthly net
profits for the 12 months immediately preceding the date of
termination (which shall be no less than $15,000 and no more than
$35,000), multiplied by the number of months remaining in the
Initial Term or any Renewal Term, as applicable. .
(g) Resignation on Termination. Upon the termination of this
Agreement, whether by reason of its expiration or non-renewal,
Employee shall promptly submit to Company a written
resignation from all positions held in Company, if any,
including without limitation any position as an officer or
director of Company.
(h) Timing of Payments. Any payments required to be made under
this Section to Employee shall be due and payable within 60
days after the date of termination.
8. Survival. Except as specifically provided herein, the provisions
of Sections 6, 8 and 10 hereof shall survive any expiration, termination or
non-renewal of this Agreement.
9. Prior Agreements. Employee represents to Company: (a) that there are
no restrictions, agreements or understandings whatsoever to which Employee is a
party which would prevent or make unlawful his execution of this Agreement or
his employment hereunder; and (b) that his execution of this Agreement and his
employment hereunder shall not constitute a breach of any contract, agreement or
understanding, oral or written, to which he is a party or by which he is bound.
10. Miscellaneous.
(a) Notices. All notices, requests, demands and other
communications required or permitted to be made hereunder
shall be in writing and shall be given by personal delivery,
by registered or certified mail, return receipt requested,
first class postage prepaid, or by nationally recognized
overnight delivery service, in each case addressed to the
party entitled to receive the same at the address specified
below:
(i) If to Employee, then to: (ii) If to Company, then to:
c/o Valesc Inc.
0 Xxxxxxxx Xxxx 00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX Xxxxxxx, XX 00000
Attn: Xx. Xxx Xxxx Attn: Xxxxxx Xxxxx
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Any party may alter the address to which communications are to be sent by giving
notice of such change of address in conformity with the provisions of this
Section providing for the giving of notice. Notice shall be deemed to be
effective, if personally delivered, when delivered; if mailed, at midnight on
the third business day after being sent by registered or certified mail; and if
sent by nationally recognized overnight delivery service, on the next business
day following delivery to such delivery service.
(b) Amendment and Modification. This Agreement may be
amended, modified and supplemented only by written agreement
duly executed and delivered by each of the parties hereto.
(c) Waivers. No waiver of any of the provisions of this
Agreement shall be valid or effective unless in writing and
signed by the parties against whom such waiver is sought to be
enforced, and no waiver of any breach or condition of this
Agreement shall be deemed to be a continuing waiver or a
waiver of any other breach or condition.
(d) Governing Law. This Agreement and the legal relations
among the parties hereto shall be governed by and construed in
accordance with the laws of the State of Maine.
(e) Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which
shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
(f) Headings. The headings of the sections of this Agreement
are for reference purposes only and shall not constitute a
part hereof or affect in any way the meaning or interpretation
of this Agreement.
(g) Entire Agreement. This Agreement sets forth the entire
agreement and understanding between and among the parties with
respect to the subject matter hereof, and supersedes all prior
agreements, understandings, inducements and conditions,
whether express or implied, oral or written, except as herein
contained. The express terms hereof shall control and
supersede any course of performance and/or usage of trade
inconsistent with any of the terms hereof.
(h) Successors and Assigns. Neither party shall have the
right or power to assign or transfer any of its rights or
delegate any of its duties hereunder without the express prior
written consent of all other parties hereto, except that
Company may assign this Agreement to any successor-in-interest
to all or substantially all of its business. Subject to the
foregoing restriction, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their
respective heirs, successors and permitted assigns.
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(i) Severability. The provisions of this Agreement are
independent of and separable from each other, and no provision
shall be affected or rendered invalid or unenforceable by
virtue of the fact that for any reason any other or others of
them may be found to be invalid or unenforceable in whole or
in part under applicable law.
(j) Arbitration. Any dispute arising under or in connection
with this Agreement or the transactions contemplated herein
shall be subject to arbitration in the State of Maine,
pursuant to the governing rules of the American Arbitration
Association for employment disputes. The Company shall bear
the costs of the tribunal and arbitrator, and each side shall
bear its own attorney's fees. Such tribunal, however, shall
have the right to award reasonable legal fees and
disbursements incurred to the winning party. Any arbitration
award rendered between the parties hereto shall be binding,
unless modified or vacated by a court of competent
jurisdiction.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized agents on the day and year first above
written.
Dimension Distributing, Inc.
By: ___________________________
Name: Xxx Xxxx
Title: President
-------------------------------
Xxx Xxxx
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