EMPLOYMENT AGREEMENT
EXHIBIT
10.13
|
EMPLOYMENT
AGREEMENT
|
THIS
EMPLOYMENT AGREEMENT (the "Agreement") is made as of 5/12/00,
2000,
by and between CRITICARE SYSTEMS, INC., a Delaware corporation (the "Company"),
and Xxxxxxx X. Xxxx ("Employee").
RECITALS
A. Employee
is currently employed by the Company as its Director of Marketing.
B. The
Company desires to make certain agreements with Employee in order to induce
Employee to remain in such employ and in exchange for Employee's covenants
herein.
C. The
parties desire to evidence their agreement as to the terms of the Company's
employment of Employee.
AGREEMENT
In
consideration of the foregoing recitals and mutual covenants contained herein,
the parties hereby agree as follows:
1. Employment.
The
Company hereby continues its employment of Employee as the Company's Director
of
Marketing, and Employee hereby accepts such employment, subject to the
provisions of this Agreement.
2. Duties
and Authority.
Employee shall be employed as the Company's Director of Marketing. Employee
shall have such duties and authority as are customary for the Director of
Marketing of a publicly-held corporation with similar authority and as the
Company's President may from time to time reasonably assign Employee consistent
with the foregoing and the other provisions of this Agreement. Employee agrees
to devote Employee's entire business time, energy and skills to such employment.
However, it is understood that Employee shall not be required to devote more
than the usual and customary hours per calendar week to such employment as
are
generally expected of similarly situated employees of publicly-held companies.
At all times, Employee shall be subject to the direction of the Company's
President.
3. Compensation
and Benefits.
Employee shall be entitled to the following compensation and benefits for
services rendered to the Company:
(a) Compensation.
Employee shall receive an annual base salary payable in equal installments
not
less frequently than monthly. Employee's base salary shall be reviewed annually
within 30 days prior to the end of each fiscal year (but such annual base salary
shall not be reduced to less than the prior year's annual base salary without
Employee's written consent).
(b) Bonus
Plan.
Employee shall be eligible to receive a bonus annually, based on Employee's
and
the Company's financial performance, in the discretion of the Board of Directors
and/or President.
(c) Expense
Reimbursements.
The
Company shall reimburse Employee for actual out-of-pocket costs incurred for
reasonable business expenses, other than automobile expenses (which are covered
in Section 3(d)) in accordance with the policies and procedures of the Company
in effect from time to time.
(d) Automobile
Allowance.
Employee shall receive a Company car or car allowance subject to Company
policies in effect from time to time with respect to reimbursement for personal
use.
(e) Vacations.
Employee shall be entitled to paid vacations of not more than three weeks each
calendar year, which may be taken in Employee's discretion; provided, however,
that such vacation shall not unreasonably interfere with the Company's needs
at
such time. Unused vacation time for a calendar year shall not be carried over
from one year to the next.
(f) Health
Insurance.
Employee shall be entitled to family health insurance coverage under the
Company's group plan on a premium-sharing basis then in effect.
(g) Disability
Insurance.
Employee shall be entitled to participate in the Company's group life insurance
and disability insurance in effect from time to time.
(h) Severance
Pay.
(i) This
Agreement may be terminated by the Company at any time for Cause (as hereinafter
defined), and in such event Employee shall not be entitled to receive any
further compensation. For purposes of this Agreement, the term "Cause" shall
mean acts of fraud, repeated material misconduct, or intentional dishonesty
by
Employee in the course of Employee's employment with the Company, or the
commission of a felony.
(ii) In
the
event that Employee voluntarily terminates Employee's employment by the Company,
Employee shall not be entitled to receive any further compensation; provided,
however, that if such voluntary termination occurs at any time after Employee
has completed three (3) months of employment
by the
Company after the occurrence of a Change in Control (as hereinafter defined),
Employee shall be entitled to receive severance benefits for a period of twelve
(12) months after the date of termination or until Employee secures new
employment, whichever is shorter, consisting of the following:
|
A.
|
Employee's
base salary, and
|
|
B.
|
The
amount which the Company pays for group health insurance benefits
with
respect to such Employee and Employee's family and the continuation
of
Employee's company provided life insurance or equivalent coverage,
and
|
2
|
C.
|
Continuation
of use of the company car or an equivalent car
allowance.
|
(iii) Notwithstanding
anything to the contrary herein, Employee's employment hereunder may be
terminated by the Company without Cause at any time either prior to or after
a
Change in Control (as hereinafter defined); however, in such event, Company
shall pay Employee for a period of 12 months after the date of termination
as
severance benefits consisting of the following:
|
A.
|
Employee's
base salary, and
|
|
B.
|
The
amount which the Company pays for group health insurance benefits
with
respect to such
Employee and Employee's family and the continuation of Employee's
company
provided life insurance or equivalent coverage,
and
|
|
C.
|
Continuation
of
use of the company car or an equivalent car
allowance.
|
A
termination without Cause shall be deemed to have occurred if Company, without
Employee's consent, materially reduces Employee's responsibilities, reduces
Employee's salary or requires Employee to relocate or transfer to a site further
than 30 miles from Employee's current place of employment.
The
term
"Change in Control" shall mean a sale, assignment or exchange of more than
51%
of the voting stock outstanding immediately after such sale or the sale,
assignment or exchange of substantially all of the assets of the Company. The
date of the Change in Control shall mean the date upon which a sale is closed,
or in a series of transactions, the date upon which beneficial ownership of
the
voting stock or assets is transferred.
All
amounts payable to Employee under this Section 3 shall be paid in normal payroll
installments on normal payroll dates less all applicable withholding. Except
as
otherwise provided in this Section 3, as of the effective date of termination,
all obligations of the Company to pay Employee compensation shall terminate
and
the Company shall have no further obligation to Employee after the date of
termination.
Upon
termination of employment for any reason, Employee will deliver to the Company
all data, records and information, including without limitation, all documents,
correspondence, files, notebooks, reports, computer programs, software, manuals,
customer information, samples and all other materials and copies thereof
relating to the Company's business which Employee may possess or which are
under
Employee's control.
4. Options.
In the
event of a Change in Control of the Company as those terms are defined in the
Agreement, stock options held by Employee shall become immediately exercisable
without regard to vesting and/or applicable benchmarks unless the agreement
governing the exercise of such options contains provisions expressly to the
contrary. In the event of a sale or exchange of assets or stock anticipated
to
constitute a Change in Control, the Company agrees that it shall make provisions
for the conversion or exchange of shares to be received upon the exercise of
such options for the consideration to be received by stockholders of the Company
generally; provided, however, that Employee may be required to provide to the
Company an irrevocable notice of exercise a reasonable period of time prior
to
the actual closing date to facilitate such exchange.
3
5. Confidentiality.
Employee covenants that Employee shall at all times keep confidential the
Company's financial statements and other financial information, except to the
extent (a) disclosure of financial information (but not financial statements)
is
incidental to the performance of Employee's duties for the Company, (b)
disclosure is required by applicable law, or (c) the Company's Board of
Directors authorizes disclosure.
6. Other
Company Employees.
For a
period of one year from the date Employee's employment by the Company
terminates, Employee shall not (a) solicit another Company employee to leave
the
Company's employ and work for the Employee or another person or entity, or
(b)
participate in the hiring of another Company employee by another person or
entity away from the Company.
7. Restrictive
Covenant.
(a) As
used
in this Section 7, the following definitions apply:
"Products"
mean xxxxx xxxxx medical monitoring equipment primarily marketed for use in
hospital and alternate care medical facilities.
"Protected
Territory" means the United States of America and all countries outside of
the
United States of America.
(b) The
Employee
expressly acknowledges that:
(i) Important
and essential assets of the Company's business are the identity of the Company's
customers for its Products in the Protected Territory and the identity of
relationships in its distribution network for its Products in the Protected
Territory and their goodwill toward the Company relating to the marketing and
distribution of the Company's Products in the Protected Territory,
and
(ii) The
Company through Employee has expended substantial time, money and effort in
acquiring its customers and distribution network for its Products in the
Protected Territory, and the business and goodwill which the Company enjoys
are
dependent to a high degree upon their personal relationships with
Employee;
(iii) Selling
and servicing the Company's Products in the Protected Territory requires special
skills and knowledge which are valuable assets of the Company.
(c) Employee
expressly agrees that during the term of this Agreement and for the period
of 12
months after Employee's voluntary termination of employment or for the period
of
12 months after the Company's termination of Employee's employment with or
without Cause (the running of said 12 month periods being tolled during any
breach of the provisions of this section):
4
(i) The
Employee will not, either directly or indirectly, for Employee or on behalf
of
or in conjunction with any other person, firm, partnership, corporation,
association or other entity, contact in the Protected Territory any customer
of
the Company to whom the Company has sold any of its Products within the 18
months immediately preceding Employee's termination or to whom the Company
or
any
member
of its distribution network has made a proposal in the Protected Territory
for
the sale of the Company's Products within the six months preceding Employee's
termination or to whom Employee or Company's distribution network called upon
in
the Protected Territory during the periods described above for the primary
purpose of soliciting such customer in the Protected Territory with respect
to
purchasing or obtaining services with respect to Products for use in the
Protected Territory which compete with Products manufactured and sold by the
Company, and
(ii) Employee
will not directly or indirectly solicit or communicate with members of the
Company's distribution network in the Protected Territory at the time Employee's
employment is terminated or who were members of such distribution network in
the
Protected Territory within 12 months immediately preceding such termination
date
(y) for the purpose of encouraging such persons to leave or terminate
their
relationship with the Company, or (z) for the primary purpose of encouraging
such members to represent any other person, firm, partnership, corporation,
association or other entity with respect to the sale, lease or servicing of
Products in the Protected Territory which compete with Products manufactured
and
sold by the Company.
(d) Employee
further expressly agrees that at no time during the term of this Agreement
will
Employee engage in or have a financial interest in any business which is
offering, selling, supplying, manufacturing, or servicing Products which are
competitive with any Products offered, sold or supplied by the Company to any
person, firm, partnership, corporation, or other entity.
(e) Employee
further agrees that the remedy at law for any breach for any of the provisions
of this section will be inadequate and that the Company, its successors or
assigns shall be entitled to injunctive relief in addition to any other rights
or remedies which the Company may have for any such breach.
8. Arbitration.
Any
controversy or claims arising out of or relating to this Agreement shall be
submitted to binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association in Waukesha County, Wisconsin,
and
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. If the parties cannot agree on the choice of a
single arbitrator within 15 days after receipt of a notice of arbitration,
then
the parties shall contact the chairperson of the Alternative Dispute Resolution
section of the Wisconsin Bar, who shall select an independent arbitrator, and
the arbitration shall be decided by such independent arbitrator. Each of the
parties reserves the right to file with a court of competent jurisdiction an
application for temporary or preliminary injunctive relief or a temporary
protective order on the grounds that the arbitration award to which the
applicant may be entitled may be rendered ineffective in the absence of such
relief. The arbitration award shall be in writing, and shall specify the factual
and legal bases for the award. The losing party shall pay all costs and expenses
of the arbitrator.
5
9. Notices.
Any
notice, request, approval, consent, demand, permission or other communication
required or permitted by this Agreement shall be effective only if it is in
a
writing signed by the party giving same and shall be deemed to have been sent,
given and received only either (a) when personally received by the intended
recipient, or (b) three days after depositing in the United States Mail,
registered or certified mail, return receipt requested, with first-class postage
prepaid, addressed as follows:
If
the
Employee:
Xxxxxxx
X. Xxxx
0000
Xxxxx Xxxxxxxx Xxxxxx, Xxx. 0000
Xxxxxxxxx,
XX 00000
If
to the
Company:
Criticare
Systems, Inc.
00000
Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attn:
President
or
to
such other address as the intended recipient may have theretofore specified
by
notice given to the sender as provided in this section.
10. Assignability.
This
Agreement requires the personal services of Employee, and Employee's rights
or
obligations hereunder may not be assigned or delegated except as set forth
in
this Agreement. In the event of a sale of the stock of the Company, or
consolidation or merger of the Company with or into another company or entity,
or the sale of all or any substantial part of the assets of the Company to
another corporation, entity or individual, the Company may assign this Agreement
to any successor in interest and upon such assignment, Company shall have no
further liability hereunder and the successor in interest shall be subject
to
all obligations and be entitled to enforce all rights of the Company under
this
Agreement. Subject to the foregoing, this Agreement shall bind and inure to
the
benefit of the parties and their respective successors and assigns.
11. Other
Agreements.
This
Agreement contains the entire agreement between the Company and Employee with
respect to the subject matter hereof, and merges and supersedes all prior
agreements, understandings or negotiations whatsoever with respect to the
subject matter hereof.
12. Amendments
and Waivers.
No
amendment to this Agreement or any waiver of any of its provisions shall be
effective unless expressly stated in a writing signed by both parties. No delay
or omission in the exercise of any right, power or remedy under or for this
Agreement shall impair such right, power or remedy or be construed as a waiver
of any breach. Any waiver of a breach of any provision of this Agreement shall
not be treated as a waiver of any other provision of this Agreement or of any
subsequent breach of the same or any other provision of this
Agreement.
6
13. Severability.
If any
provision of this Agreement shall be held illegal, invalid or otherwise
unenforceable under controlling law, the remaining provisions of this Agreement
shall not be affected thereby but shall continue in effect.
14. Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of Wisconsin.
CRITICARE
SYSTEMS, INC.
BY:
/s/
Xxxx X.
Xxxxx
Its
PRES/CEO
EMPLOYEE:
/s/
Xxxxxxx X.
Xxxx
Xxxxxxx
X. Xxxx
7
