EXHIBIT 10.3
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of the 12th day of June 1995 (the
"Effective Date"), by and between BELMAC CORPORATION, a Florida corporation (the
"Employer") and Xxxxxxx X. Xxxxx (the "Employee"), as the same may be modified,
supplemented, amended or restated from time to time in the manner provided
herein.
RECITALS
The Employer desires to employ the Employee, and the Employee desires to be
employed by the Employer, all upon the terms and provisions and subject to the
conditions set forth in this Agreement.
WITNESSETH
NOW THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree to be legally bound as follows:
1. EMPLOYMENT. The Employer hereby employs the Employee, and the Employee
hereby accepts such employment as the Vice President, Chief Financial Officer,
Secretary and Treasurer, upon the terms and subject to the conditions set forth
in this Agreement.
2. TERM. Subject to the termination provisions hereinafter contained, the
term of employment under this Agreement shall be for an initial term commencing
on the Effective Date and terminating on June 12, 1998. This Agreement and the
Employee's employment hereunder shall thereafter be automatically renewed for
successive one (1) year terms, unless terminated as hereinafter provided.
3. COMPENSATION, REIMBURSEMENT, ETC.
(a) Base Salary. The Employer shall pay to the Employee as
compensation for all services rendered by the Employee a base salary, the first
year of which shall equal $115,000 per annum.
(b) Expense Reimbursement. The Employer shall reimburse the
Employee on a semi-monthly basis for all reasonable expenses incurred by the
Employee in the performance of his duties under this Agreement; provided
however, that the Employee shall have previously furnished to the Employer an
itemized account, satisfactory to the Employer, in substantiation of such
expenditures.
(c) Benefits. The Employee shall be entitled to health and
other benefits on the same terms and conditions as the Employer makes available
to its other participants in the corporate health provisions. The Employer shall
obtain a term life insurance policy for the
Employee with a value equal to one year's salary payable to the estate of the
Employee upon the Employee's death as provided in Section 7 (a) hereof.
(d) Bonuses. The Employee shall be entitled to bonuses of up
to 40% of his annual salary each year, in stock and/or cash, the grant of which
shall be upon the recommendation and at the discretion of the Compensation
Committee of the Employer.
(e) Annual Review. The Employee shall be reviewed by the Board
of Directors of the Employer on an annual basis and entitled to receive a merit
increase in salary, stock options and/or bonuses annually from the Effective
Date of this Agreement.
(f) Stock Option Plan. The Employee shall be eligible for
periodic stock option grants as determined by the Management and Compensation
Committees.
4. DUTIES. The Employee is engaged as the Vice President, Chief Financial
Officer, Secretary and Treasurer of the Employer. In addition, the Employee
shall have such other duties and hold such offices as may from time to time be
reasonably assigned to him by the Board of Directors of the Employer.
5. EXTENT OF SERVICES. During the term of employment under this Agreement,
the Employee shall devote his full time, energy and attention to the benefit and
business of the Employer and its affiliates and shall not be employed by another
entity, except as a consultant to or as a director of a non-competitive company
approved, IN ADVANCE, by the Employer's Board of Directors.
6. VACATION AND DAYS OFF. The Employee may take a maximum of four weeks of
vacation each calendar year, at times to be determined in a manner most
convenient to the business of the Employer. A maximum of 5 unused days of
vacation may be carried over from one calendar year to the next, but without
recompense. The carryover provision will be effective beginning December 31,
1996.
7. TERMINATION FOLLOWING DEATH OR INCAPACITY.
(a) Death. All rights of the Employee under this Agreement
shall terminate upon death (other than rights accrued prior thereto). All stock
options will immediately vest and transfer to the Employee's estate and be
exercisable for a period of 5 years or the period of time indicated in the
option contract, whichever is greater. The Employer shall pay to the estate of
the Employee any unpaid salary and other benefits due as well as reimbursable
expenses accrued and owing to the Employee prior to his death. The Employer
shall have no additional financial obligation under this Agreement to the
Employee or his estate beyond the term-life insurance benefit which pays his
estate one year's salary.
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(b) Disability.
(i) During any period of disability, illness or incapacity
during the term of this Agreement which renders the Employee at least
temporarily unable to perform the services required under this Agreement, the
Employee shall receive throughout which time, his salary payable under Section 3
(a) of this Agreement, less any benefits received by him under any insurance
carried by or provided by the Employer; provided however, all rights of the
Employee under this Agreement (other than rights already accrued) shall
terminate as provided below upon the Employee's permanent disability (as defined
below).
(ii) The term "permanent disability" as used in this
Agreement shall mean the inability of the Employee, as determined by the Board
of Directors of the Employer, by reason of physical or mental disability to
perform the duties required of him under this Agreement after a period of: (a)
120 consecutive days of such disability; or (b) disability for at least six
months during any twelve month period. Upon such determination, the Board of
Directors may terminate the Employee's employment under this Agreement upon ten
(10) days prior written notice.
(iii) If any determination of the Board of Directors with
respect to permanent disability is disputed by the Employee, the parties hereto
agree to abide by the decision of a panel of three physicians. The Employee and
Employer shall each appoint one member, and the third member of the panel shall
be appointed by the other two physicians. The Employee agrees to make himself
available for and to submit to reasonable examinations by such physicians as may
be directed by the Employer. Failure to submit to any such examination shall
constitute a material breach of this Agreement. In the event such a panel is
convened, the party whose position is not sustained by the panel shall bear all
associated costs.
8. OTHER TERMINATIONS.
(a) Without Cause.
(i) Either the Employee or the Employer may terminate this
Agreement upon written notice, ninety (90) days prior to the end of the initial
term or any one-year extension of this Agreement.
(ii) If the Employee gives notice pursuant to paragraph
(i) above, the Employer shall have the right to either (a) relieve the Employee,
in whole or in part, of his duties under this Agreement (without reduction in
compensation) or (b) to accelerate the date of termination to coincide with the
date on which the written notice is received (without reduction in compensation
for the notice period).
(iii) Notwithstanding any provisions hereof to the
contrary, the Employer may terminate this Agreement without cause at any time.
If the Employer terminates
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this Agreement pursuant to the provisions of this paragraph 8(a) (iii), it shall
pay to the Employee as a severance benefit an amount equal to one-year of the
Employee's then current Base Salary and all options theretofore awarded to the
Employee shall immediately vest and be exercisable by the Employee for a period
of 5 years or the period of time indicated in the option contract, whichever is
greater.
(b) For Cause.
(i) The Employer may terminate this Agreement without
notice (a) upon the Employee's breach of any material provision of this
Agreement, or (b) for other "good cause" (as defined below).
(ii) The term "good cause" as used in this Agreement
shall include, but shall not be limited to: (a) conduct disloyal to the
Employer; (b) conviction of any crime involving moral turpitude; and (c)
substantial dependence, as determined by the Board of Directors of the Employer,
on any addictive substance, including but not limited to alcohol, amphetamines,
barbiturates, methadone, cannabis, cocaine, PCP, THC, LSD, or narcotic drug.
Should the Employee dispute such a determination, the parties hereto agree to
abide by the decision of a panel of three physicians selected in a manner
provided in Section 7(b)(iii) of this Agreement. In the event such a panel is
convened, the party whose position is not sustained by the panel shall pay all
associated costs and expenses. The Employee agrees to make himself available for
and to submit to an annual examination and such other reasonable periodic
examinations by such panel as may be directed by the Employer at the Employer's
sole expense. Failure to submit to any such examination shall constitute a
material breach of this Agreement.
(c) Payment On Termination. If this Agreement is terminated
pursuant to Section 8(b), the Employer shall pay to the Employee any unpaid
salary and other benefits and reimbursable expenses accrued and owing to the
Employee. Such payment shall be in full and complete discharge of any and all
liabilities or obligations of the Employer to the Employee hereunder except as
provided in Section 9 hereof. The Employee shall be entitled to no further
benefits under this Agreement other than extension of health benefits at the
Employee's expense and options awarded to the Employee shall immediately vest
and be exercisable for a period of 5 years.
9. TERMINATION OF EMPLOYMENT UPON CHANGE IN CONTROL.
(a) For purposes hereof, a "Change in Control" shall be deemed
to have occurred (i) if there has occurred a "change in control" as such term is
used in Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as in effect at the date hereof (hereinafter
referred to as the "Act"); (ii) if there has occurred a change in control as the
term "control" is defined in Rule 12b-2 promulgated under the Act; (iii) when
any "person" (as such term is defined in Sections 3 (a) (9) and 13 (d) (3) of
the Act), during the term of this Agreement, becomes a beneficial owner,
directly or indirectly, of securities of the
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Employer representing 20% or more of the Employer's then outstanding securities
having the right to vote on the election of directors; (iv) if the stockholders
of the Employer approve a plan of complete liquidation or dissolution of the
Employer or a merger or consolidation in which the Employer is not the surviving
corporation; (v) if there has occurred a change in ownership or effective
control of the Employer or a change in the ownership of a substantial portion of
the assets of the Employer (within the meaning of Section 280G (b) (2) (A) of
the Internal Revenue Code of 1986, as amended (the "Code")); or (vi) when the
individuals who are members of the Board of Directors of the Employer on the
date hereof shall cease to constitute at least a majority of the Board of
Directors, PROVIDED, HOWEVER, that any new director whose election to the Board
of Directors or nomination for election to the Board of Directors by the
Employer's stockholders was approved by a vote of at least 50% of the directors
then still in office, shall not be deemed to have replaced his or her
predecessor.
(b) The Employee may terminate his employment at any time
within 12 months after a Change in Control and in the event that any of the
following events has occurred: (i) an assignment to the Employee of any duties
inconsistent with the status of the Employee's office and/or position with the
Employer as constituted immediately prior to the Change in Control or a
significant adverse change in the nature or scope of the Employee's authorities,
powers, functions or duties as constituted immediately prior to the Change in
Control, (ii) a failure by the Employer, after having received written notice
from the Employee specifying a material breach of its obligations pursuant to
this Agreement, to cure such breach within 30 days after receipt of such notice,
or (iii) the headquarters of the Employer is moved to a new location which is
more than 100 miles from its current location.
An election by the Employee to terminate his employment following a
Change in Control shall not be deemed a voluntary termination of employment by
the Employee for the purpose of interpreting the provisions of this Agreement or
any of the Employer's employee benefit plans and arrangements. The Employee's
continued employment with the Employer for any period of time during the term of
this Agreement after a Change in Control shall not be considered a waiver of any
right he may have to terminate his employment to the extent permitted under this
Section 9 (b).
If the Employer terminates the Employee without cause pursuant to
Section 8 (a) hereof within six months after a Change in Control has occurred,
such termination shall be deemed an election by the Employee to terminate his
employment pursuant to this Section 9.
In addition, in the event of such termination, the Employee shall
continue to have the obligations provided for in Sections 11 and 12 (b) hereof.
(c) If the Employee's employment with the Employer is
terminated under Section 9 (b) hereof, (i) the Employee shall be entitled to any
benefits to which he would have been entitled under Section 8 (a) (iii) hereof
had the Employee been terminated "without cause", to the extent such benefits
would have accrued as of the expiration of the term of this Agreement;
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(ii) in addition, the Employee shall be paid in a lump sum, within 30 days after
termination of employment, in cash, severance pay in an amount equal to two
years' salary or that amount of salary that would have been due to the Employee
through the expiration of the term of this Agreement, whichever is greater;
(iii) the Employee shall be issued a number of stock options to purchase Common
Stock of the Employer, at an exercise price of $3.75 per share, equal to the
number of stock options held by the Employee immediately prior to the effective
date of any Change of Control; and (iv) all stock options held by the Employee
immediately prior to the effective date of the Change of Control and those
options granted pursuant to Section 9 (c) (iii) shall immediately vest and
become fully exercisable for a period of 5 years or the period of time indicated
in the option contract, whichever is greater. The lump sum severance payment
described in this Section 9 (c) (i)-(iv) is hereinafter referred to as the
"Termination Compensation". The amount of the Termination Compensation shall be
determined, at the expense of the Employer, by its regular certified public
accountant immediately prior to the Change in Control (the "Accountant"). Upon
payment of the Termination Compensation and any other accrued compensation, this
Agreement shall terminate (except for the Employee's obligations pursuant to
Sections 11 and 12 (b) hereof) and be of no further force or effect.
(d) After a Change in Control has occurred, the Employer shall
honor the Employee's exercise of the Employee's outstanding stock options and
any other stock related rights, in accordance with this Employment Agreement.
After a Change in Control has occurred and the Employee's employment is
terminated as a result thereof, the Employee (or his designated beneficiary or
personal representative) shall also receive, except to the extent already paid
pursuant to Section 9 (c) (i) hereof or otherwise, the sums the Employee would
otherwise have received (whether under this Agreement, by law or otherwise) by
reason of termination of employment if a Change in Control had not occurred.
(e) Notwithstanding anything in this Agreement to the
contrary, the Employee shall have the right, prior to the receipt by him of any
amounts due hereunder, to waive the receipt thereof or, subsequent to the
receipt by him of any amounts due hereunder, to treat some or all of such
amounts as a loan from the Employer which the Employee shall repay to the
Employer, within 90 days from the date of receipt, with interest at the rate
provided in Section 7872 of the Code. The repayment of the loan balance will be
with the deferred severance funds which will then be supplied by the Employer.
Notice of any such waiver or treatment of amounts received as a loan shall be
given by the Employee to the Employer in writing and shall be binding upon the
Employer.
(f) The Employee shall not be required to mitigate the payment
of the Termination Compensation or other benefits or payments by seeking other
employment. To the extent that the Employee shall, after the term of this
Agreement, receive compensation from any other employment, the payment of
Termination Compensation or other benefits or payments shall not be adjusted.
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10. DISCLOSURE, PROPRIETARY RIGHTS. The Employee agrees that during the
term of his employment by the Employer, he will disclose only to the Employer
all ideas, methods, plans, formulas, processes, trade secrets, developments, or
improvements known by him which relate directly or indirectly to the business of
the Employer, including any lines of business, acquired by the Employee during
his employment by the Employer; provided, that nothing in this Section 10 shall
be construed as requiring any such communication where the idea, plan, method or
development is lawfully protected from disclosure, including but not limited to
trade secrets of third parties. For purposes of this Agreement, the term "the
business of the Employer" shall include, without limitation, the following: the
design, development, obtaining regulatory approval, production, manufacturing,
marketing and licensing of prescription and non-prescription drugs, medical
devices, medical instruments and methods for the diagnosis, evaluation,
treatment or correction of any disease, injury, illness or other medical or
health condition and such other lines of business as the Employer shall engage
in during the term hereof. The parties further agree that any inventions,
formulas, trade secrets, ideas, or secret processes which shall arise from any
disclosure made by the Employee pursuant to this paragraph, whether or not
patentable, shall be and remain the sole property of the Employer.
11. CONFIDENTIALITY. The Employee agrees to keep in strict secrecy and
confidence any and all information the Employee assimilates or to which he has
access during his employment by the Employer and which has not been publicly
disclosed and is not a matter of common knowledge in the fields of work of the
Employer. The Employee agrees that both during and after the term of employment
by the Employer, he will not, without prior written consent of the Employer,
disclose any such confidential information to any third person, partnership,
joint venture, company, corporation, or other organization.
12. CONFLICT OF INTEREST.
(a) Conflict Of Interest. The Employee shall devote his full
time, energy and attention to the benefit and business of the Employer and its
affiliates and shall not be employed by another entity, except as permitted in
Section 5.
(b) Covenant Not To Solicit. During employment with the
Employer, and for a period of two years thereafter, the Employee agrees he will
refrain from and will not, directly or indirectly, as independent contractor,
employee, consultant, agent, partner, joint venturer or otherwise, solicit or
encourage any of the employees of the Employer to terminate their employment.
(c) Essential Element. It is understood by and between the
parties hereto that the foregoing restrictive covenants set forth in Sections
11, 12(a), 12(b) and 13 are essential elements of this Agreement, and that but
for the agreement of the Employee to comply with such covenants, the Employer
would not have agreed to enter into this Agreement. Notwithstanding anything to
the contrary in this Agreement, the terms and provisions of Sections 12(a), 12
(b) and 13 of this Agreement, together with any definitions used in such terms
and provisions, shall
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survive the termination or expiration of this Agreement. The existence of any
claim or cause of action of the Employee against the Employer, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Employer of such covenants.
13. SPECIFIC PERFORMANCE. The Employee agrees that damages at law will be
insufficient remedy to the Employer if the Employee violates the terms of
Sections 10, 11, or 12 of this Agreement and that the Employer shall be
entitled, upon application to a court of competent jurisdiction, to obtain
injunctive or other equitable relief to enforce the provisions of such Sections,
which injunctive or other equitable relief shall be in addition to any other
rights or remedies available to the Employer, and the Employee agrees that he
will not raise and hereby waives any objection or defense that there is an
adequate remedy available at law.
14. COMPLIANCE WITH OTHER AGREEMENTS. The Employee represents and warrants
that the execution of this Agreement by him and his performance of his
obligation hereunder will not conflict with, result in the breach of any
provision of, terminate, or constitute a default under any Agreement to which
the Employee is or may be bound.
15. WAIVER OF BREACH. The waiver by the Employer of a breach of any of the
provisions of this Agreement by the Employee shall not be construed as a waiver
of any subsequent breach by the Employee.
16. D&O INSURANCE; INDEMNIFICATION. The Employer hereby agrees to maintain
in full force and effect for the duration of this Agreement, Director's and
Officer's Liability Insurance of at least $2,000,000 and to indemnify and hold
harmless to the full extent permitted by law, the Employee for acts performed by
him in carrying out his duties and responsibilities in accordance with this
Agreement.
17. BINDING EFFECT, ASSIGNMENT. The rights and obligations of the Employer
under this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Employer. This Agreement is a personal employment
contract and the rights, obligations and interests of the Employee hereunder may
not be sold, assigned, transferred, pledged or hypothecated.
18. SUCCESSORS AND ASSIGNS; ASSIGNMENT. Whenever in this Agreement
reference is made to any party, such reference shall be deemed to include the
successors, assigns, heirs, and legal representatives of such party, and,
without limiting the generality of the foregoing, all representations,
warranties, covenants and other agreements made by or on behalf of the Employee
in this Agreement shall inure to the benefit of the successors and assigns of
the Employer; PROVIDED, HOWEVER, that nothing herein shall be deemed to
authorize or permit the Employee to assign any of his rights or obligations
under this Agreement to any other person (whether or not a family member or
other affiliate or the Employee other than stated in Section 7 of this
Agreement), and the Employee covenants and agrees that he shall not make any
such assignments.
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19. MODIFICATION, AMENDMENT, ETC. Each and every modification and amendment
of this Agreement shall be in writing and signed by all of the parties hereto,
and each and every waiver of, or consent to any departure from, any
representation, warranty, covenant or other term or provision of this Agreement
shall be in writing and signed by each affected party hereto.
20. NOTICE. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by certified or
registered mail, first class, return receipt requested, to the parties at the
following addresses:
To the Employer: Belmac Corporation
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000-0000
To the Employee: Xxxxxxx X. Xxxxx
00000 Xxxxxxxxxxx Xxxxx
Xxxxx, XX 00000
21. SEVERABILITY. It is agreed by the Employer and Employee that if any
portion of the covenants set forth in this Agreement are held to be
unreasonable, arbitrary or against public policy, then that portion of such
covenants shall be considered divisible both as to time and geographical area.
The Employer and Employee agree that if any court of competent jurisdiction
determines the specified time period or the specified geographical area
applicable to this Agreement to be unreasonable, arbitrary or against public
policy, then a lesser time period or geographical area which is determined to be
reasonable, non-arbitrary and not against public policy may be enforced against
the Employee. The Employer and Employee agree that the foregoing covenants are
appropriate and reasonable when considered in light of the nature and extent of
the business conducted by the Employer.
22. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
the Employer and the Employee and supersedes all prior agreements and
understandings, oral or written, with respect to the subject matter hereof.
Notwithstanding the provisions with respect to vesting requirements, option
prices, terms of options, or termination of employment contained in the 1991
Stock Option Plan or any other plan under which stock options have been or may
be granted, it is expressly agreed that the terms of this Employment Agreement
supersede and override such provisions and shall govern the treatment of such
subject matter.
23. HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
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24. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Florida.
25. COUNTERPARTS. This Agreement may be executed in two counterpart copies
of the entire document or of signature pages to the document, each of which may
be executed by one or more of the parties hereto, but all of which, when taken
together, shall constitute a single agreement binding upon all of the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written.
BELMAC CORPORATION
By: /S/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
Chairman, President and CEO
Belmac Corporation
EMPLOYEE
By: /S/ XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx
Vice President, Chief Financial
Officer
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