EXHIBIT 10.7
EMPLOYMENT CONTRACT
This Employment Contract ("Contract" or "Agreement") is entered in to this 17th
day of November, 2004 by and between Xxxxxxx X. Xxxxxx ("Executive") and U.S.
MEDSYS CORP. ("Company"). Executive and Company are sometimes referred to
collectively herein as the "Parties."
W I T N E S S E T H :
WHISEAS, the Company desires to enter into the Agreement in order to
employ Executive according to the terms set forth in this Agreement; and
WHEREAS, Executive desires to accept such employment upon the terms set
forth in the Agreement;
NOW THEREFORE, in consideration of the promises and mutual covenants
contained herein and for other good and valuable consideration, the adequacy and
receipt of which are hereby acknowledged, the Parties agree as follows:
1. EMPLOYMENT.
(a) The Company hereby employs (the "Employment") Executive Vice President
and Chief Financial Officer. It is the intention of the Parties to vest full
authority to control all accounting and financial reporting operations of the
Company with Executive, subject to the oversight of the Company's Chief
Executive Officer ("CEO") and Board of Directors of the Company (the "Company
Board"). Executive hereby accepts the Employment and agrees to: (i) render such
executive services; (ii) perform such executive duties; and (iii) exercise such
executive supervision and powers to, for and with respect to the Company for the
period and upon the terms set forth in this Agreement.
(b) Executive's primary place of employment will be based at the Company's
principle executive offices, which during the Term shall be at 000 Xxxxx 00
Xxxxx, Xxxxxxxxx Xxxxxxx, Xxx Xxxxxx.
2. TERM. Except as otherwise specifically provided in Section 5 below, the
term of this Agreement (including any renewal periods, the "Term") shall
commence on November 17, 2004 (the "Effective Date"), and shall continue until
November 17, 2005; provided, however, this Agreement shall be automatically
renewed annually, unless
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either party provides the other with written notice at least 60 days prior to
the expiry of the then applicable Term that they with to terminate the agreement
at the end of such Term.
3. COMPENSATION.
3.1. BASE SALARY. Executive shall be paid a base salary (the "Base
Salary") at an annual rate of one hundred and seventy five thousand dollars
($175,000), payable in equal monthly installments. During the Term, the Base
Salary shall be reviewed at least annually by the Company Board, and may not be
decreased in connection with any such review. Any increase in the Base Salary
effected at such review shall not serve to limit or reduce any other obligation
to Executive under this Agreement. The Base Salary shall not be reduced after
any such increase and the term "Base Salary" shall refer to the Base Salary as
so increased.
3.2 AUTO ALLOWANCE. Executive shall receive the equivalent of $600.00 per
month for auto expenses on an after tax basis, computed using a 40% marginal tax
rate. In addition, Executive shall also be reimbursed in full for all business
related fuel, tolls, and parking costs.
3.3 HEALTH INSURANCE. During the Term, (i) Executive shall be entitled to
participate in all incentive, savings and retirement plans, practices, policies
and programs of the Company and any affiliated companies to the same extent as
senior executives of the Company, if, as and when the Company adopts any such
plans, practices, policies and programs; and (ii) Executive and/or Executive's
family shall be eligible for participation in, and shall receive all benefits
under, all welfare benefit plans, practices, policies and programs provided by
the Company and its affiliated companies (including, without limitation,
medical, prescription, dental, disability, salary continuance, employee life
insurance, group life insurance, accidental death and travel accident insurance
plans and programs) to the same extent as senior executives of the Company, if,
as and when the Company adopts any such plans, practices, policies and programs.
In addition, the Company shall reimburse Executive for all of his COBRA payments
and other related costs to maintain his current health insurance benefits until
Executive is participating, without exclusions, in comparable welfare benefit
plans, practices, policies and programs provided by the Company and its
affiliated companies.
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3.4 VACATION AND SICK TIME. Executive shall be entitled to three weeks'
paid vacation per year and up to ten paid sick/personal days per year; provided
that, subject to, and in accordance with, Company policies applicable to all
similarly situated executives, any vacation not taken during any given year
shall accrue and must be taken by Executive by April 30th of the subsequent
year.
3.5 STOCK OPTION PLAN. Executive shall be entitled to participate in a
Company stock option plan to the same extent as other executives of the Company,
if, as and when the Company adopts any such plan.
4. EXPENSES. Executive is expected and is authorized, to incur expenses in
the performance of his duties hereunder, including, without limitation, the
costs of entertainment, travel, and similar business expenses, all in accordance
with Company policies applicable to all similarly situated executives. The
Company shall promptly reimburse Executive for all such expenses upon periodic
presentation by Executive of an accounting of such expenses on terms applicable
to senior executives of the Company, all in accordance with Company policies
applicable to all similarly situated executives.
5. CONSEQUENCES OF TERMINATION OF EMPLOYMENT.
5.1. DEATH. In the event of the death of Executive during the Term,
Executive's Employment hereunder shall be terminated as of the date of his death
and Executive's designated beneficiary, or, in the absence of such designation,
the estate or other legal representative of Executive (collectively, the
"Estate"), shall promptly be paid Executive's unpaid Base Salary through the end
of the month in which the death occurs and any unreimbursed expenses. The Estate
shall be entitled to all other death benefits in accordance with the terms of
the Company's benefit programs and plans in which Executive is enrolled.
5.2. DISABILITY. In the event Executive shall be unable to render the
services or perform his duties hereunder by reason of illness, injury or
incapacity (whether physical, mental, emotional or psychological) (any of the
foregoing shall be referred to herein as a "Disability") for a period of thirty
(30) consecutive business days and a physician selected by the Company or its
insurers, and acceptable to Executive or Executive's legal representative, has
determined that such Disability is likely to continue beyond 90 business days,
the Company shall have the right to terminate this Agreement by giving
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Executive written notice which shall be effective on the 30th day after receipt
of such notice by Executive (the "Disability Effective Date"), unless Executive
returns to full-time performance of Executive's duties before the Disability
Effective Date. If Executive's Employment hereunder is so terminated, Executive
shall be paid, in addition to payments under any disability insurance policy in
effect, Executive's unpaid Base Salary, through the end of the month in which
the termination occurs and any unreimbursed expenses. Thereafter, the Company
shall have no further obligation to Executive. It is the intent of the parties
that in the event of the Executive's Disability that Executive be eligible for
payments under the Company's disability insurance policies in effect, including
applicable long-term disability insurance policies. The Company does not
currently have any disability insurance policies but intends to enter into such
policies subsequent to the date hereof, if the provisions of this Section 5.2
would prohibit Executive from receiving benefits under any such policies, the
provisions of this section 5.2 shall be deemed to be amended to the extent
required for Executive to be eligible for an receive all benefits under any such
policies, including, without limitation, to modify the definition of Disability,
and the Parties agree to enter into such further agreements as necessary to give
effect to the provisions of this Section 5.2
5.3. TERMINATION OF EMPLOYMENT OF EXECUTIVE BY THE COMPANY FOR CAUSE OR BY
EXECUTIVE FOR GOOD REASON.
(a) The Company may terminate Executive's Employment for Cause (as defined
below) or without Cause pursuant to the terms of this Agreement. From and after
the date of such termination and other than as provided in the previous
sentence, Executive shall no longer be entitled to any of the benefits of this
Agreement and the Company shall have no further obligations to Executive;
provided, however, any rights and benefits which Executive may have in respect
of any other compensation or any employee benefit plans or programs of the
Company shall be determined in accordance with the terms of such other
compensation arrangements or plans or programs. The term "Cause," as used
herein, shall mean any of the following: (i) the continued failure of Executive
to substantially perform Executive's duties under this Agreement (other than as
a result of physical or mental illness or injury), after the Company Board
delivers to Executive a written demand for substantial performance that
specifically identifies the manner in
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which the Company Board believes that Executive has not substantially performed
Executive's duties; or illegal conduct or gross misconduct by Executive, in
either case that results in material and demonstrable damage to the business or
reputation of the Company. No act or failure to act on the part of Executive
shall constitute cause, if it is done, or omitted to be done, by Executive in
good faith or with the reasonable belief that Executive's action or omission was
in the best interests of the Company or, if applicable, in accordance with the
instructions of the Company Board or CEO. Any act or failure to act that is
based upon authority given pursuant to a resolution duly adopted by the Company
Board, or on the advice of counsel for the Company, shall be conclusively
presumed to be done, or omitted to be done, by Executive in good faith and in
the best interests of the Company. A termination of Executive's employment for
Cause may only be effected in accordance with the following procedures. The
Company shall give Executive written notice ("Notice of Termination for Cause")
of its intention to terminate Executive's employment for Cause, setting forth in
reasonable detail the specific conduct of Executive that it considers to
constitute Cause and the specific provision(s) of this Agreement on which it
relies, and stating the date, time and place of a special meeting of the Company
Board (the "Special Board Meeting"), that takes place not less than five and not
more than fifteen business days after Executive receives the Notice of
Termination for Cause. Executive shall be given an opportunity, together with
counsel, to be heard at the Special Board Meeting. Executive's termination for
Cause shall be effective when and if a resolution is duly adopted at the Special
Board Meeting by affirmative vote of the entire membership of the Company Board,
stating that in the good faith opinion of the Company Board, Executive is guilty
of the conduct described in the Notice of Termination for Cause, and that
conduct constitutes Cause under this Agreement.
(b) Executive may terminate employment for Good Reason or without Good
Reason. "Good Reason" means (i) the assignment to Executive of any duties
inconsistent in any respect with paragraph (a) of Section 1 of this Agreement,
or any other action by the Company that results in a diminution in Executive's
position, authority, duties or responsibilities, other than an isolated,
insubstantial and inadvertent action that is not taken in bad faith and is
remedied by the Company promptly after receipt of notice thereof from Executive;
(b) any failure by the Company to comply with any provision of
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Section 3 of this Agreement, other than an isolated, insubstantial and
inadvertent failure that is not taken in bad faith and is remedied by the
Company promptly after receipt of notice thereof from Executive; (c) any
requirement by the Company that Executive's services be rendered primarily at a
location or locations other than that provided for in paragraph (b) of Section 1
of this Agreement; (d) the occurrence of any event which constitutes a Change of
Control; (d) any purported termination of Executive's employment by the Company
for a reason or in a manner not expressly permitted by this Agreement. A
termination of Executive's employment by Executive without Good Reason shall be
effected by giving the Company written notice of the termination.
(c) If, during the Term, the Company terminates Executive's employment,
other than for Cause or Disability, or Executive terminates his employment for
Good Reason, the Company shall pay the amounts described in subparagraph (i)
below to Executive in a lump sum in cash, within 30 days after the date of
termination and shall continue the benefits described in subparagraph. The
payments provided pursuant to this paragraph (c) of Section 5.3 are intended as
liquidated damages for a termination of Executive's employment by the Company
other than for Cause or Disability or for the actions of the Company leading to
a termination of Executive's employment by Executive for Good Reason.
(i) The amounts to be paid in a lump sum are:
A. In the event that Executive is terminated during the
initial Term of this Agreement, severance pay equal to
the Annual Base Salary less any amounts paid during the
current term through the date of termination; or
B. In the event that Executive is terminated after the
initial term of this Agreement, severance pay equal to
the Annual Base Salary in effect on the date of
termination.
(ii) The benefits to be continued as described above are benefits to
Executive and/or Executive's family at least as favorable as those that would
have been provided to them under Section 3.5 of this Agreement if Executive's
employment had
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continued until the first anniversary of the date of termination; provided,
however, that during any period when Executive is eligible to receive such
benefits under another employer-provided plan, the benefits provided by the
Company under this subparagraph may be made secondary to those provided under
such other plan.
6. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered personally or sent
by facsimile transmission, overnight courier, or certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally or sent by facsimile transmission (provided that a
confirmation copy is sent by overnight courier), one day after deposit with an
overnight courier, or if mailed, five (5) days after the date of deposit in the
United States mails, as follows:
If to the Company, to:
U.S. MEDSYS CORP.
000 Xxxxx 00 Xxxxx
Xxxxxxxxx Xxxxxxx, Xxx Xxxxxx 00000
If to Executive, to:
Xxxxxxx X. Xxxxxx
0 Xxxx Xxxxx
Xxxxxxx Xxxxxx, XX 00000
7. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
the Parties. The Parties specifically acknowledge that there exist no verbal or
implied agreements between them and that the terms of this Agreement constitute
the sole agreement between them.
8. BINDING EFFECT. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the Company and Executive and
their successors and assigns. "Successors and assigns" shall mean, in the case
of the Company, any successor pursuant to a Change of Control or otherwise. For
purposes of this agreement, a Change of Control shall mean any (1) merger,
consolidation, sale or other transfer of all or substantially all of the assets
or equity of the Company, (2) acquisition by any individual, entity or group
(other than such persons who are the beneficial owners of the
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outstanding securities of the Company as of the date of this Agreement) of
beneficial ownership of 50% or more of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors, (3) the approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company, or (4) there is consummated
any similar event or transaction with respect to the Company.
9. NO ASSIGNMENT. This Agreement shall not be assignable or otherwise
transferable by either party.
10. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
for which Executive may qualify, nor, shall anything in this Agreement limit or
otherwise affect such rights as Executive may have under any contract or
agreement with the Company or any of its affiliated companies. Vested benefits
and other amounts that Executive is otherwise entitled to receive under any
plan, policy, practice or program of, or any contract or agreement with, the
Company or any of its affiliated companies on or after the date of termination
shall be payable in accordance with such plan, policy, practice, program,
contract or agreement, as the case may be, except as explicitly modified by this
Agreement.
11. FULL SETTLEMENT. The Company's obligation to make the payments
provided for in, and otherwise to perform its obligations under, this Agreement
shall not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action that the Company may have against Executive or others. In
no event shall Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to Executive under any of the
provisions of this Agreement and, such amounts shall not be reduced, regardless
of whether Executive obtains other employment.
12. AMENDMENT, MODIFICATION, WAIVER. No provision of this Agreement may be
amended or waived unless such amendment or waiver is agreed to in writing,
signed by Executive and the CEO of the Company. Except as otherwise specifically
provided in this Agreement, no waiver by either party hereto of any breach by
the other party hereto of any condition or provision of this Agreement to be
performed by such other party shall be
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deemed a waiver of a similar or dissimilar provision or condition at the same or
at any prior or subsequent time and neither Executive's nor the Company's
failure to insist upon strict compliance with any provision of, or to assert any
right under, this Agreement (including, without limitation, the right of
Executive to terminate employment for Good Reason) shall be deemed to be a
waiver of such provision or right or of any other provision of or right under
this Agreement.
13. DISPUTE RESOLUTION AND BINDING ARBITRATION. Any disputes that arise
between the Parties regarding this Agreement, the Parties' respective rights or
obligations hereunder, and any other dispute between the Parties whatsoever
shall be resolved exclusively through binding arbitration before a three member
panel of the American Arbitration Association in accord with the rules of the
American Arbitration Association. The arbitration shall take place in Essex
County, New Jersey. In the event that (i) Executive makes any claim against the
Company under this Agreement, (ii) the Company disputes such claim, and (iii)
Executive prevails with respect to such disputed claim, then the Company shall
reimburse Executive for his reasonable costs and expenses (including, without
limitation, reasonable attorney's fees) incurred by Executive in pursuing such
disputed claim; otherwise each of the Parties shall be responsible for all of
their costs and expenses incurred relating to the arbitration of any dispute.
The Parties understand that this provision is a waiver of each party's right to
a trial by jury and the Parties knowingly agree to waive such right. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
14. GOVERNING LAW. The validity, interpretation, construction, performance
and enforcement of this Agreement shall be governed by the laws of the State of
New Jersey, without regard to its conflicts of law rules.
15. TITLES. Titles to the Sections in this Agreement are intended solely
for convenience and no provision of this Agreement is to be construed by
reference to the title of any Section.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, which together shall constitute one agreement. It shall not be
necessary for each party to sign each counterpart so long as each party has
signed at least one counterpart.
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17. SEVERABILITY. Any term or provision of this Agreement which is
determined invalid or unenforceable, shall be ineffective to the extent of such
invalidity or unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms and provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.
/s/ Xxxxxxx X. Xxxxxx
--------------------------
Executive
By: Xxxxxxx X. Xxxxxx
Dated:
/s/ Xxxxx Xxxxx
--------------------------
U.S. MEDSYS CORP.
By: Xxxxx Xxxxx, CEO
Dated:
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