Exhibit 99.3
EXHIBIT E
EMPLOYMENT AGREEMENT - GUSTILO
This EMPLOYMENT AGREEMENT ("Agreement"), which is dated as of December
14, 2001, is made by and between XCEL Healthcare, Inc., a California
corporation, located at 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx Xxxxx,
Xxxxxxxxxx 00000 and hereinafter referred to as "Company", and Xxx X. Xxxxxxx,
whose address is ___________________, hereinafter referred to as "Executive",
based upon the following:
RECITALS
WHEREAS, Company wishes to retain the continuing services of Executive,
and Executive wishes to continue to render services to Company, as its Chief
Financial Officer, Secretary and Director of Pharmacy;
WHEREAS, Company and Executive wish to set forth in this Agreement the
duties and responsibilities that Executive has agreed to undertake on behalf of
Company;
WHEREAS, Company and Executive intend that this Agreement will
supersede and replace any and all other employment agreements or arrangements
for employment entered into by and between Company and Executive, and that any
such employment agreements or arrangements shall have no further force or
effect.
THEREFORE, in consideration of the foregoing and of the mutual promises
contained in this Agreement, Company and Executive (who are sometimes
individually referred to as a "party" and collectively referred to as the
"parties") agree as follows:
AGREEMENT
1. SPECIFIED PERIOD.
Pursuant to the terms of this Agreement, Company hereby employs
Executive, and Executive hereby accepts employment with Company, for the period
beginning on the execution date of this Agreement and ending on December 31,
2004 (the "Term").
2. GENERAL DUTIES.
Executive shall report to Company's Board of Directors. Executive shall
devote his entire productive time, ability, and attention to Company's business
during the term of this Agreement. In his capacity as Chief Financial Officer,
Secretary and Director of Pharmacy, Executive shall do and perform all services,
acts, or things necessary or advisable that an individual performing like duties
would customarily be empowered and authorized to do and perform in order to
discharge his duties under this Agreement, by law and under Company's Bylaws.
Executive shall also perform such other duties that may, from time to time, be
prescribed by Company through its Board of Directors. Executive agrees to
cooperate with and work to the best of his ability with Company's management
team, which includes the Board of Directors and the officers and other
employees, to continually improve Company's reputation in its industry for
quality products and performance.
1
3. NONSOLICITATION AND NONINTERFERENCE AND PROPRIETARY PROPERTY AND
CONFIDENTIAL INFORMATION PROVISIONS.
(a) NONSOLICITATION AND NONINTERFERENCE.
(1) COVENANTS. Executive hereby covenants and agrees
that during the term of this Agreement, and for a period of one (1) year from
the date this Agreement terminates or expires, Executive shall not, either for
Executive's own account or directly or indirectly in conjunction with or on
behalf of any person, partnership, corporation or other entity or venture:
i. Solicit or employ or attempt to solicit or employ
any person who is then or has, within twelve (12) months prior thereto,
been an officer, partner, manager, agent or employee of Company or any
affiliate of Company whether or not such a person would commit a breach
of that person's contract of employment with Company or any affiliate
of Company, if any, by reason of leaving the service of Company or any
affiliate of Company (the "Nonsolicitation Covenant"); or
ii. On behalf of, directly or indirectly, any
competitive business, or for the purpose of or with the reasonably
foreseeable effect of harming the business of Company, solicit the
business of any person, firm or company which is then, or has been at
any time during the preceding twelve (12) months prior to such
solicitation, a customer, client, contractor, supplier or vendor of
Company or any affiliate of Company (the "Noninterference Covenant)".
(2) ACKNOWLEDGEMENTS. Each of the parties
acknowledges that: (i) the covenants and the restrictions contained in the
Nonsolicitation and Noninterference Covenants are necessary, fundamental, and
required for the protection of the business of Company; (ii) such Covenants
relate to matters which are of a special, unique and extraordinary value; and
(iii) a breach of either of such Covenants will result in irreparable harm and
damages which cannot be adequately compensated by a monetary award.
(3) JUDICIAL LIMITATION. Notwithstanding the
foregoing, if at any time, despite the express agreement of Company and
Executive, a court of competent jurisdiction holds that any portion of any
Nonsolicitation or Noninterference Covenant is unenforceable by reason of its
extending for too great a period of time or by reason of its being too extensive
in any other respect, such Covenant shall be interpreted to extend only over the
maximum period of time or to the maximum extent in all other respects, as the
case may be, as to which it may be enforceable, all as determined by such court
in such action.
(b) PROPRIETARY PROPERTY; CONFIDENTIAL INFORMATION.
(1) "APPLICABLE DEFINITIONS" For purposes of this
section 3(b), the following capitalized terms shall have the definitions set
forth below:
i. "CONFIDENTIAL INFORMATION" - The term
"Confidential Information" is collectively and severally defined as any
information, matter or thing of a secret, confidential or private
nature, whether or not so labeled, which is connected with Company's
business or methods of operation or concerning any of Company's
suppliers, customers, licensors, licensees or others with whom Company
has a business relationship, and which has current or potential value
to Company or the unauthorized disclosure of which could be detrimental
2
to Company. Confidential Information shall be broadly defined and shall
include, by way of example and not limitation: (i) matters of a
business nature available only to management and owners of Company of
which Executive may become aware (such as information concerning
customers, vendors and suppliers, including their names, addresses,
credit or financial status, buying or selling habits, practices,
requirements, and any arrangements or contracts that Company may have
with such parties, Company's marketing methods, plans and strategies,
the costs of materials, the prices Company obtains or has obtained or
at which Company sells or has sold its products or services, Company's
manufacturing and sales costs, the amount of compensation paid to
employees of Company and other terms of their employment, financial
information such as financial statements, budgets and projections, and
the terms of any contracts or agreements Company has entered into) and
(ii) matters of a technical nature (such as product information, trade
secrets, know-how, formulae, innovations, inventions, devices,
discoveries, techniques, formats, processes, methods, specifications,
designs, patterns, schematics, data, compilation of information, test
results, and research and development projects). For purposes of the
foregoing, the term "trade secrets" shall mean the broadest and most
inclusive interpretation of trade secrets as defined by Section
3426.1(d) of the California Civil Code (the Uniform Trade Secrets Act)
and cases interpreting the scope of said Section.
ii. "PROPRIETARY PROPERTY" - The term "Proprietary
Property" is collectively and severally defined as any written or
tangible property owned or used by Company in connection with Company's
business, whether or not such property also qualifies as Confidential
Information. Proprietary Property shall be broadly defined and shall
include, by way of example and not limitation, products, samples,
equipment, files, lists, books, notebooks, records, documents,
memoranda, reports, patterns, schematics, compilations, designs,
drawings, data, test results, contracts, agreements, literature,
correspondence, spread sheets, computer programs and software, computer
print outs, other written and graphic records, and the like, whether
originals, copies, duplicates or summaries thereof, affecting or
relating to the business of Company, financial statements, budgets,
projections, invoices.
(2) OWNERSHIP OF PROPRIETARY PROPERTY. Executive
acknowledges that all Proprietary Property which Executive may prepare, use,
observe, come into possession of and/or control shall, at all times, remain the
sole and exclusive property of Company. Executive shall, upon demand by Company
at any time, or upon the cessation of Executive's employment, irrespective of
the time, manner, cause or lack of cause of such cessation, immediately deliver
to Company or its designated agent, in good condition, ordinary wear and tear
and damage by any cause beyond the reasonable control of Executive excepted, all
items of the Proprietary Property which are or have been in Executive's
possession or under his control, as well as a statement describing the
disposition of all items of the Proprietary Property beyond Executive's
possession or control in the event Executive has not previously returned such
items of the Proprietary Property to Company.
(3) AGREEMENT NOT TO USE OR DIVULGE CONFIDENTIAL
INFORMATION. Executive agrees that he will not, in any fashion, form or manner,
unless specifically consented to in writing by Company, either directly or
indirectly use, divulge, transmit or otherwise disclose or cause to be used,
divulged, transmitted or otherwise disclosed to any person, firm or corporation,
in any manner whatsoever (other than in Executive's performance of duties for
Company or except as required by law) any Confidential Information of any kind,
nature or description. The foregoing provisions shall not be construed to
prevent Executive from making use of or disclosing information which is in the
public domain through no fault of Executive, provided, however, specific
information shall not be deemed to be in the public domain merely because it is
encompassed by some general information that is published or in the public
domain or in Executive's possession prior to Executive's employment with
Company.
3
(4) ACKNOWLEDGEMENT OF SECRECY. Executive
acknowledges that the Confidential Information is not generally known to the
public or to other persons who can obtain economic value from its disclosure or
use and that the Confidential Information derives independent economic value
thereby, and Executive agrees that he shall take all efforts reasonably
necessary to maintain the secrecy and confidentiality of the Confidential
Information and to otherwise comply with the terms of this Agreement.
(5) INVENTIONS, DISCOVERIES. Executive acknowledges
that any inventions, discoveries or trade secrets, whether patentable or not,
made or found by Executive in the scope of his employment with Company
constitute property of Company and that any rights therein now held or hereafter
acquired by Executive individually or in any capacity are hereby transferred and
assigned to Company, and agrees to execute and deliver any confirmatory
assignments, documents or instruments of any nature necessary to carry out the
intent of this section when requested by Company without further compensation
therefor, whether or not Executive is at the time employed by Company. Provided,
however, notwithstanding the foregoing, Executive shall not be required to
assign his rights in any invention which qualifies fully under the provisions of
Section 2870(a) of the California Labor Code, which provides, in pertinent part,
that the requirement to assign "shall not apply to any invention that the
employee developed entirely on his or her own time without using employer's
equipment, supplies, facilities or trade secret information except for those
inventions that either:
(i) Relate at the time of conception or reduction to
practice of the invention to the employer's business, or actual or
demonstrably anticipated research or development of the employer; or
(ii) Result from any work performed by the employee
for the employer."
Executive understands that he bears the full burden of proving
to Company that an invention qualifies fully under Section 2870(a). By signing
this Agreement, Executive acknowledges receipt of a copy of this Agreement and
of written notification of the provisions of Section 2870.
4. COMPENSATION.
(a) SALARY. During the Term, Company shall pay to Executive a
salary of $125,000 per year. If, during the Term, gross revenues earned by
Company in a fiscal year increase by at least 10% (as computed using generally
accepted accounting principles) over the prior fiscal year, then Executive's
annual salary shall be increased by 10% over the prior year's salary.
(b) EMPLOYEE BENEFIT PLANS. Executive shall be entitled,
during the specified period of this Agreement, to participate equally with other
employees of a similar rank in any retirement, pension, profit-sharing,
insurance, or other plans which may now be in effect or which may be adopted by
Company. The benefit plans shall be with such underwriters and shall contain
such provisions as Company, in its sole discretion, may determine from time to
time. Company may delete benefit plans and otherwise amend and change the type
and quantity of benefit plans it provides in its sole discretion.
4
(c) STOCK GRANT. Upon execution of this Agreement and pursuant
to the Health Sciences Group, Inc. Equity Incentive Plan (the "Plan"), Health
Sciences Group, Inc. ("Parent Company") grants to Executive 21,000 shares of
Parent Company's common stock, pursuant to a Health Sciences Group, Inc. Stock
Grant Agreement substantially in the form of Exhibit A attached hereto.
Executive agrees to be bound by the terms of the Plan as adopted.
(d) OPTIONS GRANT. Parent Company grants to Executive an
option to purchase 120,000 shares of the common stock of Parent Company, subject
to the provisions set forth in this subsection (d) if, during the term of this
Agreement, Executive increases Company's earnings and revenue growth as set
forth herein. The option shall vest as follows:
(i) if earnings growth for any fiscal quarter during
the first twelve month period following execution of this Agreement equals or
exceeds 20% (as computed using generally accepted accounting principles),
Executive shall be entitled to purchase 1,000 shares of Parent Company's common
stock at a price of $4.00 per share; if revenue growth for any fiscal quarter
during the first twelve month period following execution of this Agreement
equals or exceeds 20% (as computed using generally accepted accounting
principles), Executive shall be entitled to purchase 1,500 shares of Parent
Company's common stock at a price of $4.00 per share
(ii) if earnings growth for any fiscal quarter during
the first twelve month period following execution of this Agreement equals or
exceeds 30% (as computed using generally accepted accounting principles),
Executive shall be entitled to purchase an additional 1,000 shares of Parent
Company's common stock at a price of $4.00 per share; if revenue growth for any
fiscal quarter during the first twelve month period following execution of this
Agreement equals or exceeds 30% (as computed using generally accepted accounting
principles), Executive shall be entitled to purchase an additional 1,500 shares
of Parent Company's common stock at a price of $4.00 per share
(iii) if earnings growth for any fiscal quarter
during the second twelve month period following execution of this Agreement
equals or exceeds 20% (as computed using generally accepted accounting
principles), Executive shall be entitled to purchase 1,000 shares of Parent
Company's common stock at a price of $5.00 per share; if revenue growth for any
fiscal quarter during the second twelve month period following execution of this
Agreement equals or exceeds 20% (as computed using generally accepted accounting
principles), Executive shall be entitled to purchase 1,500 shares of Parent
Company's common stock at a price of $5.00 per share
(iv) if earnings growth for any fiscal quarter during
the second twelve month period following execution of this Agreement equals or
exceeds 30% (as computed using generally accepted accounting principles),
Executive shall be entitled to purchase an additional 1,000 shares of Parent
Company's common stock at a price of $5.00 per share; if revenue growth for any
fiscal quarter during the second twelve month period following execution of this
Agreement equals or exceeds 30% (as computed using generally accepted accounting
principles), Executive shall be entitled to purchase an additional 1,500 shares
of Parent Company's common stock at a price of $5.00 per share
5
(v) if earnings growth for any fiscal quarter during
the third twelve month period following execution of this Agreement equals or
exceeds 20% (as computed using generally accepted accounting principles),
Executive shall be entitled to purchase 1,000 shares of Parent Company's common
stock at a price of $6.00 per share; if revenue growth for any fiscal quarter
during the third twelve month period following execution of this Agreement
equals or exceeds 20% (as computed using generally accepted accounting
principles), Executive shall be entitled to purchase 1,500 shares of Parent
Company's common stock at a price of $6.00 per share.
(vi) if earnings growth for any fiscal quarter during
the second twelve month period following execution of this Agreement equals or
exceeds 30% (as computed using generally accepted accounting principles),
Executive shall be entitled to purchase an additional 1,000 shares of Parent
Company's common stock at a price of $6.00 per share; if revenue growth for any
fiscal quarter during the second twelve month period following execution of this
Agreement equals or exceeds 30% (as computed using generally accepted accounting
principles), Executive shall be entitled to purchase an additional 1,500 shares
of Parent Company's common stock at a price of $6.00 per share
The options shall be granted pursuant to the Plan.
Executive agrees to be bound by the terms of the Plan as adopted.
(e) CASH BONUS. In addition to the foregoing compensation,
Executive shall receive an annual cash bonus each fiscal year of XCEL, to the
extent XCEL's and BioSelect's combined growth rate exceeds 30%. The annual cash
bonus due under this Section 4(e) shall be calculated as follows:
Annual $Bonus = Annual $ Base Salary x [.75 x (Annual Revenue Growth Rate - 30%)
+ 1.25 x (Annual Net Earnings Growth Rate - 30%)]
Attached hereto as Exhibit B is a matrix of examples
to illustrate the application of the above formula.
(f) DISABILITY INSURANCE. The Company shall make reasonable
efforts to keep in force a policy of disability insurance, at its expense,
throughout the Term for the benefit of Executive, commencing no later than 90
days following the date of this Agreement. If, for any reason, the Company is
unable, after making a good faith attempt, to acquire a policy of disability
insurance, such shall not constitute a breach of this Agreement.
5. REIMBURSEMENT OF BUSINESS EXPENSES.
Company shall promptly reimburse Executive for all reasonable
business expenses incurred by Executive in connection with the business of
Company. However, each such expenditure shall be reimbursable only if Executive
furnishes to Company adequate records and other documentary evidence required by
federal and state statutes and regulations issued by the appropriate taxing
authorities for the substantiation of each such expenditure as an income tax
deduction.
6. ANNUAL VACATION/SICK LEAVE.
Executive shall be entitled to vacation time each year without
loss of compensation and to sick leave in accordance with Company's general
policy for its employees.
6
7. INDEMNIFICATION OF LOSSES.
So long as Executive's actions were taken in good faith and in
furtherance of Company's business and within the scope of Executive's duties and
authority, Company shall indemnify and hold Executive harmless to the full
extent of the law from any and all claims, losses and expenses sustained by
Executive as a result of any action taken by him to discharge his duties under
this Agreement, and Company shall defend Executive, at Company's expense, in
connection with any and all claims by stockholders or third parties which are
based upon actions taken by Executive to discharge his duties under this
Agreement.
8. PERSONAL CONDUCT.
Executive agrees promptly and faithfully to comply with all
present and future policies, requirements, directions, requests and rules and
regulations of Company in connection with Company's business. Executive further
agrees to conform to all laws and regulations and not at any time to commit any
act or become involved in any situation or occurrence tending to bring Company
into public scandal, ridicule or which will reflect unfavorably on the
reputation of Company.
9. TERMINATION FOR CAUSE.
Company reserves the right to declare Executive in default of
this Agreement if Executive willfully breaches or habitually neglects the duties
which he is required to perform under the terms of this Agreement, or if
Executive commits such acts of dishonesty, fraud, misrepresentation, gross
negligence or willful misconduct as would prevent the effective performance of
his duties or which results in material harm to Company or its business. Company
may terminate this Agreement for cause by giving written notice of termination
and the cause therefor to Executive. With the exception of the covenants
included in section 3 above, upon such termination the obligations of Executive
and Company under this Agreement shall immediately cease. Such termination shall
be without prejudice to any other remedy to which Company or Executive may be
entitled either at law, in equity, or under this Agreement. If Executive's
employment is terminated pursuant to this section, Company shall pay to
Executive, immediately upon such termination, any deferred or accrued but unpaid
compensation to which Executive is entitled on the date of such termination.
10. TERMINATION WITHOUT CAUSE.
(a) DEATH. Executive's employment shall terminate upon the
death of Executive. Upon such termination, the obligations of Executive and
Company under this Agreement shall immediately cease. In the event of a
termination pursuant to this section, Executive shall be entitled to receive any
amounts accrued but unpaid pursuant to section 4(a) of this Agreement. All other
rights Executive has under any benefit or stock option plans and programs shall
be determined in accordance with the terms and conditions of such plans and
programs.
(b) DISABILITY. Company reserves the right to terminate
Executive's employment upon 10 days written notice if, for a period of 60
consecutive days, Executive is prevented from discharging his duties under this
Agreement due to any physical or mental disability. With the exception of the
covenants included in section 3 above, upon such termination the obligations of
Executive and Company under this Agreement shall immediately cease. In the event
of a termination pursuant to this section, Executive shall be entitled to
receive any accrued and unpaid amounts earned pursuant to section 4(a) of this
Agreement. All other rights Executive has under any benefit or stock option
plans and programs shall be determined in accordance with the terms and
conditions of such plans and programs.
7
(c) ELECTION BY EXECUTIVE. Executive's employment may be
terminated at any time by Executive upon not less than 60 days written notice by
Executive to the Board. With the exception of the covenants included in section
3 above, upon such termination the obligations of Executive and Company under
this Agreement shall immediately cease. In the event of a termination pursuant
to this section, Executive shall be entitled to receive any accrued and unpaid
amounts earned pursuant to section 4(a) of this Agreement. All other rights
Executive has under any benefit or stock option plans and programs shall be
determined in accordance with the terms and conditions of such plans and
programs.
(d) ELECTION BY COMPANY. Company may terminate Executive's
employment upon not less than 60 days written notice by Company to Executive.
With the exception of the covenants included in section 3 above, upon such
termination the obligations of Executive and Company under this Agreement shall
immediately cease. In the event of a termination pursuant to this section,
Executive shall be entitled to receive (i) any amount earned but unpaid pursuant
to section 4(a), and (ii) compensation equal to Executive's annual salary for
the remainder of the Term; PROVIDED, HOWEVER, that HESG may, in its sole
discretion, elect to pay such remainder amount either (A) in one lump sum upon
Executive's termination, or (B) at least bi-weekly. All other rights Executive
has under any benefit or stock option plans and programs shall be determined in
accordance with the terms and conditions of such plans and programs.
(e) TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive may
terminate this Agreement immediately if Company terminates the employment of
either Xxxxxx X. Xxxxxx or Xxxxxxx X. Xxxxxxxxxxx without cause. In the event of
a termination pursuant to this section, Executive shall be entitled to receive
(i) any amount earned but unpaid pursuant to section 4(a), and (ii) compensation
equal to Executive's annual salary for the remainder of the Term; PROVIDED,
HOWEVER, that HESG may, in its sole discretion, elect to pay such remainder
amount either (A) in one lump sum upon Executive's termination, or (B) at least
bi-weekly. With the exception of the covenants included in section 3 above, upon
such termination the obligations of Executive and Company under this Agreement
shall immediately cease. All other rights Executive has under any benefit or
stock option plans and programs shall be determined in accordance with the terms
and conditions of such plans and programs.
11. MISCELLANEOUS.
(a) PREPARATION OF AGREEMENT. It is acknowledged by each party
that such party either had separate and independent advice of counsel or the
opportunity to avail itself or himself of same. In light of these facts it is
acknowledged that no party shall be construed to be solely responsible for the
drafting hereof, and therefore any ambiguity shall not be construed against any
party as the alleged draftsman of this Agreement.
(b) COOPERATION. Each party agrees, without further
consideration, to cooperate and diligently perform any further acts, deeds and
things and to execute and deliver any documents that may from time to time be
reasonably necessary or otherwise reasonably required to consummate, evidence,
confirm and/or carry out the intent and provisions of this Agreement, all
without undue delay or expense.
8
(c) INTERPRETATION.
(i) ENTIRE AGREEMENT/NO COLLATERAL REPRESENTATIONS.
Each party expressly acknowledges and agrees that this Agreement, including all
exhibits attached hereto: (1) is the final, complete and exclusive statement of
the agreement of the parties with respect to the subject matter hereof; (2)
supersedes any prior or contemporaneous agreements, promises, assurances,
guarantees, representations, understandings, conduct, proposals, conditions,
commitments, acts, course of dealing, warranties, interpretations or terms of
any kind, oral or written (collectively and severally, the "Prior Agreements"),
and that any such prior agreements are of no force or effect except as expressly
set forth herein; and (3) may not be varied, supplemented or contradicted by
evidence of Prior Agreements, or by evidence of subsequent oral agreements. Any
agreement hereafter made shall be ineffective to modify, supplement or discharge
the terms of this Agreement, in whole or in part, unless such agreement is in
writing and signed by the party against whom enforcement of the modification or
supplement is sought.
(ii) WAIVER. No breach of any agreement or provision
herein contained, or of any obligation under this Agreement, may be waived, nor
shall any extension of time for performance of any obligations or acts be deemed
an extension of time for performance of any other obligations or acts contained
herein, except by written instrument signed by the party to be charged or as
otherwise expressly authorized herein. No waiver of any breach of any agreement
or provision herein contained shall be deemed a waiver of any preceding or
succeeding breach thereof, or a waiver or relinquishment of any other agreement
or provision or right or power herein contained.
(iii) REMEDIES CUMULATIVE. The remedies of each party
under this Agreement are cumulative and shall not exclude any other remedies to
which such party may be lawfully entitled.
(iv) SEVERABILITY. If any term or provision of this
Agreement or the application thereof to any person or circumstance shall, to any
extent, be determined to be invalid, illegal or unenforceable under present or
future laws effective during the term of this Agreement, then and, in that
event: (A) the performance of the offending term or provision (but only to the
extent its application is invalid, illegal or unenforceable) shall be excused as
if it had never been incorporated into this Agreement, and, in lieu of such
excused provision, there shall be added a provision as similar in terms and
amount to such excused provision as may be possible and be legal, valid and
enforceable, and (B) the remaining part of this Agreement (including the
application of the offending term or provision to persons or circumstances other
than those as to which it is held invalid, illegal or unenforceable) shall not
be affected thereby and shall continue in full force and effect to the fullest
extent provided by law.
(v) NO THIRD PARTY BENEFICIARY. Notwithstanding
anything else herein to the contrary, the parties specifically disavow any
desire or intention to create any third party beneficiary obligations, and
specifically declare that no person or entity, other than as set forth in this
Agreement, shall have any rights hereunder or any right of enforcement hereof.
(vi) HEADINGS; REFERENCES; INCORPORATION; GENDER. The
headings used in this Agreement are for convenience and reference purposes only,
and shall not be used in construing or interpreting the scope or intent of this
Agreement or any provision hereof. References to this Agreement shall include
all amendments or renewals thereof. Any exhibit referenced in this Agreement
shall be construed to be incorporated in this Agreement. As used in this
Agreement, each gender shall be deemed to include the other gender, including
neutral genders or genders appropriate for entities, if applicable, and the
singular shall be deemed to include the plural, and vice versa, as the context
requires.
9
(d) ENFORCEMENT.
(i) APPLICABLE LAW. This Agreement and the rights and
remedies of each party arising out of or relating to this Agreement (including,
without limitation, equitable remedies) shall be solely governed by, interpreted
under, and construed and enforced in accordance with the laws (without regard to
the conflicts of law principles thereof) of the State of California, as if this
agreement were made, and as if its obligations are to be performed, wholly
within the State of California.
(ii) CONSENT TO SPECIFIC PERFORMANCE AND INJUNCTIVE
RELIEF AND WAIVER OF BOND OR SECURITY. Each party acknowledges that Company may,
as a result of Executive's breach of the covenants and obligations included in
section 3 of this Agreement, sustain immediate and long-term substantial and
irreparable injury and damage which cannot be reasonably or adequately
compensated by damages at law. Each party agrees that in the event of
Executive's breach or threatened breach of the covenants and obligations
included in section 3, Company shall be entitled to obtain equitable relief from
a court of competent jurisdiction or arbitration without proof of any actual
damages that have been or may be caused to Company by such breach or threatened
breach and without the posting of bond or other security in connection
therewith.
(iii) Any and all actions brought by a party to
enforce such party's rights under this Agreement shall be brought exclusively in
the state or federal courts located in Los Angeles County. The prevailing party
in any such action shall be entitled to reasonable attorneys' fees, costs and
disbursements in addition to any other relief to which such party may be
entitled.
(e) NO ASSIGNMENT OF RIGHTS OR DELEGATION OF DUTIES BY
EXECUTIVE. Executive's rights and benefits under this Agreement are personal to
him and therefore (i) no such right or benefit shall be subject to voluntary or
involuntary alienation, assignment or transfer; and (ii) Executive may not
delegate his duties or obligations hereunder.
(f) NOTICES. Unless otherwise specifically provided in this
Agreement, all notices, demands, requests, consents, approvals or other
communications (collectively and severally called "Notices") required or
permitted to be given hereunder, or which are given with respect to this
Agreement, shall be in writing, and shall be given by: (A) personal delivery
(which form of Notice shall be deemed to have been given upon delivery), (B) by
telegraph or by private airborne/overnight delivery service (which forms of
Notice shall be deemed to have been given upon confirmed delivery by the
delivery agency), (C) by electronic or facsimile or telephonic transmission,
provided the receiving party has a compatible device or confirms receipt thereof
(which forms of Notice shall be deemed delivered upon confirmed transmission or
confirmation of receipt), or (D) by mailing in the United States mail by
registered or certified mail, return receipt requested, postage prepaid (which
forms of Notice shall be deemed to have been given upon the fifth {5th} business
day following the date mailed). Each party, and their respective counsel, hereby
agree that if Notice is to be given hereunder by such party's counsel, such
counsel may communicate directly with all principals, as required to comply with
the foregoing notice provisions. Notices shall be addressed to the address
hereinabove set forth in the introductory section of this Agreement, or to such
other address as the receiving party shall have specified most recently by like
Notice, with a copy to the other parties hereto. Any Notice given to the estate
of a party shall be sufficient if addressed to the party as provided in this
subsection.
10
(g) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument, binding on all parties
hereto. Any signature page of this Agreement may be detached from any
counterpart of this Agreement and reattached to any other counterpart of this
Agreement identical in form hereto by having attached to it one or more
additional signature pages.
(h) EXECUTION BY ALL PARTIES REQUIRED TO BE BINDING;
ELECTRONICALLY TRANSMITTED Documents. This Agreement shall not be construed to
be an offer and shall have no force and effect until this Agreement is fully
executed by all parties hereto. If a copy or counterpart of this Agreement is
originally executed and such copy or counterpart is thereafter transmitted
electronically by facsimile or similar device, such facsimile document shall for
all purposes be treated as if manually signed by the party whose facsimile
signature appears.
IN WITNESS WHEREOF, the parties have executed this Agreement.
COMPANY:
XCEL Healthcare, Inc.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------
Xxxx X. Xxxxxxx, Director
EXECUTIVE:
/s/ Xxx X. Xxxxxxx
--------------------------------------------
Xxx X. Xxxxxxx
11
EXHIBIT A
HEALTH SCIENCES GROUP, INC.
STOCK GRANT AGREEMENT
---------------------
THIS HEALTH SCIENCES GROUP, INC. STOCK GRANT AGREEMENT (this
"Agreement") is made this 14th day of December, 2001 (the "Effective Date"), by
and between Health Sciences Group, Inc. a Colorado corporation (the "Company"),
and Xxx X. Xxxxxxx, an individual who is the recipient of an Award (the
"Recipient") under the Health Sciences Group, Inc. Equity Incentive Plan (the
"Plan").
All capitalized terms in this Agreement shall have the meaning assigned
to them in this Agreement or in the Plan.
1. STOCK AWARD
1.1 AWARD. The Recipient is hereby granted 21,000 shares of the
Company's Common Stock (the "Shares") pursuant to the terms of that certain
Employment Agreement of even date herewith between XCEL Healthcare, Inc. and the
Recipient.
1.2 SHAREHOLDER RIGHTS. The Recipient (or any successor in interest)
shall have all the rights of a shareholder (including voting, dividend and
liquidation rights) with respect to the Shares, subject, however, to the
transfer restrictions of Section 2 below.
2. TRANSFER RESTRICTIONS
2.1 RESTRICTION ON TRANSFER. Except for a Permitted Transfer, the
Recipient shall not engage in a Disposition (as defined below) of any of the
Shares except in accordance with the terms of this Agreement. During the 90 day
period immediately following the Effective Date (the "Lock-Up Period"), the
Recipient shall not engage in a Disposition of more than 7,000 Shares during any
30 day period without the consent of the Company.
2.2 PERMITTED TRANSFER. A "Permitted Transfer" shall mean (i) a
gratuitous transfer of the Purchased Shares, provided and only if Recipient
obtains the Company's prior written consent to such transfer or (ii) a transfer
of title to the Purchased Shares effected pursuant to Recipient's will or the
laws of intestate succession following Recipient's death.
2.3 DISPOSITION. A "Disposition" (other than a Permitted Transfer)
shall mean to directly or indirectly offer to sell, contract to sell or
otherwise sell or dispose of any of the Shares, or enter into any other
transaction which is designed to, or might reasonably be expected to, result in
the disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) of any right, title or interest in any of
the Shares.
2.4 SALE ACCOMMODATOR. During the Lock-Up Period, the Recipient shall
deposit the Shares into a brokerage account established by Xxxx Xxxxxxxx for the
benefit of Recipient with instructions to Xx. Xxxxxxxx to sell the Shares only
pursuant to the terms of this Agreement. Upon the expiration of the Lock-Up
Period, Xx. Xxxxxxxx will immediately transfer any Shares remaining in the
account to the Recipient.
12
2.5 INDEMNITY. The Recipient recognizes that the issuance of the Shares
will be based upon his representations, warranties and agreements set forth in
this Agreement and the Recipient agrees on demand to indemnify and hold harmless
the Company from any and all loss, damage, liability or expense, including costs
and reasonable attorneys' fees, to which it may be subject or which it may incur
by reason of or in connection with a sale or distribution of any of the Shares
in violation of this Agreement.
3. GENERAL PROVISIONS
3.1 NOTICES. Unless otherwise specifically provided in this Agreement,
all notices, demands, requests, consents, approvals or other communications
(collectively and severally called "Notices") required or permitted to be given
hereunder, or which are given with respect to this Agreement, shall be in
writing, and shall be given by: (A) personal delivery (which form of Notice
shall be deemed to have been given upon delivery), (B) by telegraph or by
private airborne/overnight delivery service (which forms of Notice shall be
deemed to have been given upon confirmed delivery by the delivery agency), or
(C) by mailing in the United States mail by registered or certified mail, return
receipt requested, postage prepaid (which forms of Notice shall be deemed to
have been given upon the fifth {5th} business day following the date mailed).
Notices shall be addressed to the address set forth in the signature page of
this Agreement, or to such other address as the receiving party shall have
specified most recently by like Notice, with a copy to the other parties hereto.
3.2 NO WAIVER. The failure of either party to this Agreement in any
instance to exercise his or its rights under this Agreement shall not constitute
a waiver of any such rights that may subsequently arise under the provisions of
this Agreement or any other agreement between the Company and the Recipient. No
waiver of any breach or condition of this Agreement shall be deemed to be a
waiver of any other or subsequent breach or condition, whether of like or
different nature.
4. MISCELLANEOUS PROVISIONS
4.1 RECIPIENT UNDERTAKING. The Recipient hereby agrees to take whatever
additional action and execute whatever additional documents the Company may deem
necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either the Recipient or the Shares
pursuant to the provisions of this Agreement.
4.2 AGREEMENT IS ENTIRE CONTRACT. This Agreement constitutes the entire
contract between the parties hereto with regard to the subject matter hereof.
This Agreement is made pursuant to the provisions of the Plan and shall in all
respects be construed in conformity with the terms of the Plan.
4.3 GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California without resort to that
State's conflict-of-laws rules.
4.4 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
4.5 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Company and its successors and
assigns and upon the Recipient, the Recipient's permitted assigns and the legal
representatives, heirs and legatees of the Recipient's estate, whether or not
any such person shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms hereof.
13
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first indicated above.
Health Sciences Group, Inc. a Colorado corporation
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Executive Officer
Address: Xxxxxx Xxxxxx Center
0000 Xxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
RECIPIENT
/s/ Xxx X. Xxxxxxx
--------------------------------------------------
Xxx X. Xxxxxxx
Address:
------------------------------------------
--------------------------------------------------
14
EXHIBIT B
BONUS FORMULA ILLUSTRATION
REVENUES
--------------------------------------------------------------------------------------------------------
30% 40% 50% 60% 70% 80% 90% 100% 200% 250%
--------------------------------------------------------------------------------------------------------
N 30% 0.0% 7.5% 15.0% 22.5% 30.0% 37.5% 45.0% 52.5% 127.5% 165.0%
E -------------------------------------------------------------------------------------------------
T 40% 12.5% 20.0% 27.5% 35.0% 42.5% 50.0% 57.5% 65.0% 140.0% 177.5%
-------------------------------------------------------------------------------------------------
E 50% 25.0% 32.5% 40.0% 47.5% 55.0% 62.5% 70.0% 77.5% 152.5% 190.0%
A -------------------------------------------------------------------------------------------------
R 60% 37.5% 45.0% 52.5% 60.0% 67.5% 75.0% 82.5% 90.0% 165.0% 202.5%
N -------------------------------------------------------------------------------------------------
I 70% 50.0% 57.5% 65.0% 72.5% 80.0% 87.5% 95.0% 102.5% 177.5% 215.0%
N -------------------------------------------------------------------------------------------------
G 80% 62.5% 70.0% 77.5% 85.0% 92.5% 100.0% 107.5% 115.0% 190.0% 227.5%
S -------------------------------------------------------------------------------------------------
90% 75.0% 82.5% 90.0% 97.5% 105.0% 112.5% 120.0% 127.5% 202.5% 240.0%
-------------------------------------------------------------------------------------------------
100% 87.5% 95.0% 102.5% 110.0% 117.5% 125.0% 132.5% 140.0% 215.0% 252.5%
-------------------------------------------------------------------------------------------------
200% 212.5% 220.0% 227.5% 235.0% 242.5% 250.0% 257.5% 265.0% 340.0% 377.5%
-------------------------------------------------------------------------------------------------
250% 275.0% 282.5% 290.0% 297.5% 305.0% 312.5% 320.0% 327.5% 402.5% 440.0%
--------------------------------------------------------------------------------------------------------
15
