EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into this 25th day of
April, 2000, by and between THE MED-DESIGN CORPORATION, a Delaware corporation
and Med-Design Research, Limited a California Corporation which is a wholly
owned subsidiary of The Med-Design Corporation (hereinafter collectively
referred to as "Employer"), and XXXXXXXX X. XXXXX, an individual (hereinafter
referred to as "Employee"), with regard to the following facts:
WHEREAS, Employee has been working for The Med-Design Corporation and its wholly
owned California subsidiary, MDC Research, Limited and the term of his
Employment Agreement has expired; and
WHEREAS, Employee has performed valuable services for both the parent and
subsidiary Corporations that constitute the Employer; and
WHEREAS, Employer desires assurance of the continued association and services of
Employee in order to retain Employee's experience, skills, abilities, background
and knowledge, and is therefore willing to engage the services of the Employee
on the terms and conditions set forth below. Employee desires to continue in the
employ of Employer and hereby accepts and agrees to such employment, subject to
the provisions of this Agreement; and
WHEREAS, Employer now desires to continue the employment of Employee, and
Employee now desires to accept continued employment as Chief Financial Officer,
Executive Vice President, Treasurer and Assistant Secretary, principally
responsible for the day to day management of the Employer's financial and
accounting operations; and
WHEREAS, Employee will have the above-described positions in both Corporations,
but his salary and compensation will be solely as provided in this Agreement.
NOW THEREFORE, IN CONSIDERATION of the mutual promises and other good
and valuable consideration, the parties hereto agree as follows:
1. TERM
1.01 The Employer hereby employs the Employee and the employee hereby accepts
employment with the Employer for a period of two (2) years beginning on April
25, 2000 and terminating on April 24, 2002. This employment term is subject to
annual review by the employer on each anniversary date of this agreement and
employer may terminate employment after such review at its sole discretion with
no further obligation.
1.02 This employment may be extended by mutual agreement of the parties. As used
herein, the phrase "employment term" refers to the entire period of employment
of the Employee by the Employer hereunder, whether for the period provided
above, or whether terminated earlier as hereinafter provided, or extended by
mutual agreement of the parties.
2. DUTIES
2.01 The Employee shall serve as the Chief Financial Officer, Executive Vice
President, Treasurer and Assistant Secretary, principally responsible for the
day to day management of the Employer's financial and accounting operations. In
this capacity, he shall direct the planning, organizing, directing, and
controlling the financial, accounting, and control functions of the Employer and
its subsidiaries; general and cost accounting; SEC regulatory compliance and
reporting; investor relations; the conduct of the Employer's relationships with
banks and other lending institutions and the financial community; treasury
management; federal, state and local taxes, MIS; debt and lease negotiations;
preparation of short and long-range budgets and profit plans; liaison with
outside accounting firms; and other financial, accounting, and administrative
activities that affect the preparation and communications of timely, meaningful,
and accurate financial information to the board of directors, officers,
shareholders, and other interested parties and such other executive functions as
may be required as directed by the Employer's senior management. He shall do and
perform all services, acts, or things necessary or advisable to manage and
conduct the responsibilities of the Executive Vice President, and Chief
Financial Officer of the Employer, subject to the policies set by the Chief
Executive Officer and Board of Directors. The Employee shall perform the
specific functions and tasks as set forth above.
3. LOCATION OF EMPLOYMENT
3.01 The aforesaid services shall be rendered primarily at Employer's facilities
in Ventura, California; provided, however, that Employee acknowledges that he
may be required to perform services on temporary assignments in other locations
from time to time and that he may be reassigned, from time to time, by Employer
for extended periods to other locations; provided, however, Employee consents,
in advance, to such temporary assignment in other locations.
4. COMPENSATION
4.01 As compensation for his services hereunder, the Employee shall receive a
salary at the rate of one hundred forty thousand dollars ($140,000) per annum,
for full time employment of forty (40) hours per week, payable in accordance
with Employer's standard practices for payment of salary to its officers.
4.02 Employee shall receive a Warrant for sixty six thousand (66,000) shares of
the Employer's common stock at a per share price of $11.875, the closing price
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on April 25, 2000. The Warrant shall be issued as of April 25, 2000 and will be
exercisable until April 24, 2005. Thirty three thousand (33,000) of the shares
shall be vested immediately upon the issue of the Warrant and thirty three
thousand (33,000) shares shall be vested on April 25, 2001. The Warrant shall
provide that vesting shall be immediate upon Employee's death or upon a change
of control of Employer, but the unvested shares shall not vest before the
vesting date in the event that Employee either voluntarily terminates his
employment or is terminated for cause by Employer.
5. EMPLOYEE BENEFITS
5.01 Employee shall have and retain all benefits given to other officers and
Employees of Employer, as those benefits are from time to time determined by the
Board of Directors, including but not limited to health insurance, dental
insurance, life insurance, long term disability insurance, profit-sharing plan,
bonus plan, stock option plan, retirement plan, vacation, holidays and sick
leave. It is agreed by Employer that Employee shall be granted benefits that are
received by other executive officers of the Employer.
6. BUSINESS EXPENSES
6.01 The services required by the Employer will require the Employee to incur
reasonable business expenses, including travel expenses on behalf of the
Employer. The Employer shall promptly reimburse the Employee for all reasonable
business expenses incurred by the Employee in connection with the business of
the Employer, which shall include, but not be limited to automobile mileage,
airfare, ground transportation, lodging and subsistence, entertainment and
promotional expenses, printing and reproduction, long distance telephone and
facsimile charges, and postage and freight costs.
7. TERMINATION
7.01 The Employee's employment hereunder may be terminated by the Employer
without any breach of this Agreement or any obligation to make severance payment
except under the circumstances described below in 7.02:
A. The Employee's employment hereunder shall terminate
upon Employee's death. In event of the death of the
Employee during the term of employment, the date of
termination shall be on the date of death.
B. As a result of the Employee's incapacity due to
physical or mental illness, the Employer may
terminate the Employee's employment hereunder by
giving written notice to such effect to the Employee.
In the event of the termination of the Employee's
employment hereunder pursuant to this paragraph
7.01(b), the date of termination shall be the date on
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which notice of termination is received by the
Employee or Employee's personal representative.
C. The Employer may terminate the Employee's employment
under this Agreement at any time for cause. For
purposes of this Agreement, the term "cause" shall be
limited to the following: (i) acts by Employee
involving moral turpitude which reflect materially
and adversely on the Employer, its reputation, or its
assets; (ii) gross and continued neglect by the
Employee of Employee's duties, which neglect
continues for more than thirty (30) days after
written notice specifying the nature thereof is
received by the Employee; (iii) conviction of a crime
involving moral turpitude, including, without
limitation, theft or embezzlement; (iv) continuing
alcohol or drug abuse; or (v) a material breach of
this Agreement which breach remains uncured for a
period of sixty (60) after written notice specifying
the nature of such breach to the Employee; provided,
however, that if the nature of such breach is such
that more than sixty (60) days are reasonably
required for its cure, then the Employer shall not
have the right to terminate this Agreement if the
Employee commences such cure within such sixty (60)
day period and thereafter diligently prosecutes such
cure to completion. Termination pursuant to this
paragraph 7.01(c) shall be written notice to the
Employee which notice shall specify the cause for
termination.
7.02 If this employment is not terminated for cause, but rather as the result of
or subsequent to a change in control of the Employer as below defined, Employee
shall be paid a sum equal to one year's salary computed at his rate of pay at
the time of termination. This severance benefit shall be paid in lieu of and not
in addition to the salary which would have been paid to Employee had this
employment continued for the balance of the herein stated term.
Change in control is defined as:
A. The individuals who constitute the members of the
Board of Directors of the Employer on the date of
this Agreement cease for any reason to a majority
thereof;
B. The Shareholders of the Employer approve a merger or
consolidation of the Employer conveying the majority
of the voting power of the issued and outstanding
securities of the Employer to individuals different
than the individuals constituting a majority of the
Shareholders on the date of this Agreement;
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C. The Shareholders of the Employer approve an Agreement
for the sale or disposition by the Employer of all or
substantially all of the Employer's assets.
8. RIGHTS TO WORK
8.01 All inventions, new products, manufacturing processes and work product made
pursuant to this Agreement and Employee's contributions thereto (hereinafter
referred to as "Work") shall be the sole and exclusive property of Employer.
Employer shall have the perpetual and exclusive right to use, manufacture,
distribute, sell or license throughout the world any Work, or part thereof, in
which Employee's services are utilized in the medical device and equipment
industry which is now known or may hereafter exist, including, without
limitation, inventions, new product developments and designs, and the
development of manufacturing processes for the medical device and equipment
industry. All revenue that Employer derives from the distribution, sales or
licensing of such Work shall be the sole and exclusive property of Employer.
8.02 All processes, inventions, design, patents, copyrights, trademarks and
other intangible rights that Employee may conceive or develop, either alone or
with others, during the term of Employee's employment, in which the equipment,
supplies, facilities or trade secret information of Employer were used, or which
relate at the time of conception or reduction to practice of the invention to
the business of Employment or to Employer's actual or demonstrably anticipated
research and development, or which result from any work that Employee performed
for Employer, shall be the sole property of the Employer. Employee shall
disclose to Employer all inventions conceived during the term of employment,
whether or not the property of Employer under the terms of the preceding
sentence, provided that such disclosure shall be received by Employer in
confidence. Employee shall execute all documents, including patent applications
and assignments, that Employer requires to establish Employer's rights under
this Section.
8.03 The parties understand and agree that the rights granted to Employer in
this paragraph shall continue in effect after the termination or expiration of
this Agreement to the extent necessary for Employer's full enjoyment of such
rights.
9. COVENANT NOT TO COMPETE
9.01 The Employee agrees that, during the term of employment, including any
renewal thereof, he will not act as an officer, director or consultant or
Employee of, or have any direct or indirect financial interest (excluding
financial interests in publicly traded corporations) in any business competing
with the business of the Employer or its successors. In addition, while Employee
is employed by Employer and for three (3) years after termination of that
employment, Employee will not, except on behalf of Employer, directly or
indirectly, solicit or accept business in competition with Employer from any
persons or entities which have been customers of Employer.
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9.02 In the course of his employment, Employee may have access to confidential
information and trade secrets relating to the Employer's business. This
information includes confidential records and data pertaining to Employer's
customers, consultants, contractors and supplies, among others. Except as
required in the course of his employment with Employer, Employee will not,
without Employer's prior consent, during Employee's employment, either directly
or indirectly disclose to any third person such confidential information or
trade secrets. In addition, during and for three (3) years after termination of
his employment, Employee shall not induce or attempt to induce any Employee of
Employer to discontinue working for Employer for the purposes of working for any
competitor of Employer.
9.03 In the event that Employee is terminated without cause, the restrictions in
paragraph 9.01 are waived by Employer. The restrictions contained in paragraph
9.02 with respect to post-employment activities will remain in full force and
effect regardless of the time or reason for Employee's termination.
10. NOTICES
10.01 All notices, requests, demands or other communications required to or
permitted to be given under this Agreement shall be in writing and shall be
conclusively deemed to have been duly given (1) when hand delivered to the other
party; (2) when received when sent by telex or facsimile at the address and
number set forth below (provided, however, that notices given by facsimile shall
not be effective unless either (a) a duplicate copy of such facsimile notice is
promptly given by depositing same in a United States post office with first
class postage prepaid and addressed to the parties as set forth below, or (b)
the receiving party delivers a written confirmation or receipt for such notice
either by facsimile or any other method permitted under this paragraph.
Additionally, any notice given by telex or facsimile shall be deemed received on
the next business day, if such notice is received after 5:00 p.m. (recipient's
time) or on a non-business day; (3) three business days after the same have been
deposited in a United States post office with first-class or certified-mail
return-receipt-requested postage prepaid and addressed to the parties as set
forth below; or (4) the next business day after same have been deposited with a
national overnight delivery service reasonably approved by the parties, postage
prepaid, addressed to the parties as set forth below with next-business-day
delivery guaranteed, provided that the sending party receives a confirmation of
delivery from the delivery service provider.
To Employer: The Med-Design Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx, Chief Executive Officer
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To Employee: Xxxxxxxx X. Xxxxx
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
11. ENTIRE AGREEMENT
This Agreement supersedes any and all other agreements, either oral or
in writing, between the parties hereto with respect to the employment of the
Employee in the positions herein above-described and contains all of the
covenants and agreements between the parties with respect to such employment in
any manner whatsoever. Each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, orally or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding.
12. MODIFICATION
Any modification to this Agreement will be effective only if it is in
writing signed by the parties hereto.
13. SEVERABILITY
If any provision in this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remaining provisions
shall nevertheless continue in full force without being impaired or invalidated
in any way.
14. CONSTRUCTION AND JURISDICTION
This Agreement shall be interpreted, construed and enforced in
accordance with the laws of the State of California irrespective of such state's
choice-of-law principles. The parties hereto agree that all actions or
proceedings arising in connection with this Agreement shall be tried and
litigated exclusively in the State and Federal courts having jurisdiction over
Ventura California. The aforementioned choice of venue is intended by the
parties to be mandatory and not permissive in nature, thereby precluding the
possibility of litigation between the parties with respect to or arising out of
this Agreement in any jurisdiction other than that specified in this paragraph.
15. ARBITRATION
The parties shall submit any dispute concerning the interpretation of
or the enforcement of rights and duties under this Agreement to final and
binding arbitration pursuant to the American Arbitration Association Rules.
Arbitration shall be conducted by a neutral arbitrator or arbitrators appointed
in accordance with the American Arbitration Association Rules. Notwithstanding
the foregoing, a party may apply to a court of competent jurisdiction for relief
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in the form of a temporary restraining order or preliminary injunction, or other
provisional remedy pending final determination of a claim through arbitration in
accordance with this paragraph.
16. SUCCESSORS AND ASSIGNS
Subject to the provisions of this Agreement regarding assignment,
this Agreement shall be binding upon the heirs, executors, administrators, legal
representatives, successors, and assigns of the respective contracting parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date and years first above written with full knowledge of the contents
and intending thereby to be legally bound.
ATTEST: EMPLOYER:
THE MED-DESIGN CORPORATION
By:
-------------------------------- -------------------------------
Secretary Xxxxx X. Xxxxxxx
Chief Executive Officer
ATTEST: MDC RESEARCH, LIMITED
By:
-------------------------------- ------------------------------
Secretary Xxxxx X. Xxxxxxx
Chief Executive Officer
WITNESS: EMPLOYEE:
-------------------------------- ---------------------------------
Xxxxxxxx X. Xxxxx
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