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Exhibit 10.5
EMPLOYMENT AGREEMENT
This Agreement is made and entered into this 31st day of March, 2000, by and
between RUBICON MEDICAL, INC. ("Rubicon") and Xxxxxxx X. Xxxxxx ("Employee").
RECITALS:
WHEREAS, Rubicon is engaged in the business of developing, manufacturing and
marketing medical products and other lawful business; and
WHEREAS, Employee has been engaged in, and has substantial experience with,
the development, design, and manufacture of medical products; and
WHEREAS, Employee is willing to be employed by Rubicon, and Rubicon is willing
to employ Employee on the terms, covenants and conditions hereafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and agreements
hereinafter set forth, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto mutually agree as follows:
Employment. Employer hereby employs, engages, and hires Employee as President
and Chief Executive Officer with the responsibilities set forth below, and
Employee hereby accepts and agrees to such hiring, engagement, and employment,
subject to the general supervision and pursuant to the orders, advice, and
direction of Employer. Employee shall perform such other duties as are
customarily performed by one holding such position in other, same or similar
businesses or enterprises as that engaged in by Employer, and shall also
additionally render such other and unrelated services and duties as may be
assigned from time to time by Employer. Employee's duties shall include, but
are not limited to, the following:
1. Assuming all responsibility for the performance of the company in all
aspects of operations, sales and marketing, accounting, general and
administrative, engineering and product development, investor and public
relations, quality systems, strategic and long-term planning, and legal.
2. Oversee all negotiations and transactions relating to the company
that have a large impact on the firm.
3. Manage and supervise the executives of the company.
4. Perform other related duties and tasks as required.
5. Best Efforts of Employee. Employee agrees that he will at all times
faithfully, industriously, and to the best of his ability, experience, and
talents, perform all of the duties that may be required of and from him
pursuant to the express and implicit terms hereof, to the reasonable
satisfaction of Employer. Such duties shall be rendered at such place or
places as Employer shall in good faith require or as the interest, needs,
business, or opportunity of Employer shall require.
6. Terms of Employment. The term of this Agreement shall be a period of
five (5) years, commencing as of April 1, 2000, and continuing for successive
terms of five (5) years thereafter as an employee or consultant, subject,
however, to prior termination as hereinafter provided.
7. Compensation of Employee. Employer shall pay Employee, and Employee
shall accept from Employer in full payment for employee's services hereunder,
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compensation as set forth in Exhibit "A" attached hereto and incorporated
herein by reference. Employee's compensation reflects the fact that Employee
may have to work more than forty (40) hours some weeks to perform his duties
hereunder.
8. Other Employment. Employee shall devote all his time, attention,
knowledge, and skills solely to the business and interests of Employer, unless
Employer agrees otherwise in writing, and Employer shall be entitled to all of
the benefits, profits or other issues arising from or incident to all work,
services, and advice of Employee including, but not limited to, designs,
inventions, design concepts, patents, work in progress, product proposals and
any writings incorporating or setting forth the foregoing, and Employee shall
not, during the term hereof, be interested directly or indirectly, in any
manner, as partner, officer, director, stockholder, advisor, employee or in
any other capacity in any other business similar to Employer's business or any
allied trade; provided, however, that nothing herein contained shall be deemed
to prevent or limit the right of Employee to invest any of his surplus funds
in the capital stock or other securities of any corporation whose stock or
securities are publicly owned or are regularly traded on any public exchange,
nor shall anything herein contained be deemed to prevent Employee from
investing or limit Employee's right to invest his surplus funds in real
estate.
9. Recommendations for Improving Operations. Employee shall make
available to Employer all information of which Employee shall have any
knowledge and shall make all suggestions and recommendations that will be of
mutual benefit to Employer and Employee.
10. Trade Secret. Employee shall not at any time or in any manner,
either directly or indirectly, divulge, disclose or communicate to any person,
firm, or corporation in any manner whatsoever any information concerning any
matters affecting or relating to the business of Employer, including, without
limiting the generality of the foregoing, any of its customers, the prices it
obtains or has obtained from the sale of, or at which it sells or has sold,
its products, its designs, design concepts, product plans, or any other
information concerning the business of Employer, its manner of operation, its
plans, processes or other data without regard to whether all of the foregoing
matters will be deemed confidential, material or important, the parties hereto
stipulating that as between them, the same are important, material, and
confidential and gravely affect the effective and successful conduct of the
business of Employer and Employer's good will. Any breach of the terms of
this paragraph shall be a material breach of this Agreement.
11. All of the terms of this Section shall remain in full force and
effect for the period of three (3) years after the termination of Employee's
employment for any reason, and during such three (3) year period, Employee
shall not make or permit the making of any public announcement or statement of
any kind that he was formally employed by, or connected with, Employer.
12. Covenant Not to Compete. As a material part of the consideration of
this Agreement, Employee agrees, for a period of two (2) years from the date
this Agreement terminates or expires:
A. Not to directly or indirectly engage in any business which is in any
way competitive with the business of Employer, whether as an employee,
officer, shareholder, partner or otherwise, within the United States of
America, which Employee acknowledges is the business trade area of Employer;
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B. Not to consult with or advise any such business which is in any way
competitive with the business of Employer;
C. Not to solicit or receive, or attempt to solicit or receive, directly
or indirectly, for the benefit of Employee or any other, any patronage from
any customer of Employer at any time during Employee's employment with
Employer, or encourage or solicit any other Employee of Employer to terminate
his or her employment with Employer; and
D. Not to solicit or receive, or attempt to solicit or receive, directly
or indirectly, for the benefit of Employee or any other, any patronage from
any customer of Employer within the United States of America, including any
customer that may later cease being serviced by Employer and new customers
that Employer may acquire during the period of this covenant.
Employee further agrees that new customers developed and current
customers of Employer, as well as all medical product design and design
concepts developed by Employee during the term of his employment, shall be,
and are, the proprietary property and trade secrets of Employer, as that term
is used and defined in this Agreement, and are subject to this covenant not to
compete.
In the event a court of competent jurisdiction should determine that the
time or geographic area is longer or broader than said court will permit, then
the time period and the geographic area shall be for the time, and covering
the area, permitted by the court. In the event Employee is in default under
this paragraph, said time period shall not be counted in determining the
period of non-competition set forth in this paragraph.
13. Special Remedies. Employee and Employer specifically agree that
Employer would suffer irreparable harm and shall be entitled to injunctive or
other extraordinary relief, without notice to Employee, and without being
required to furnish a bond, to protect Employer in the event of any breach of
Employee of the trade secret and covenant not to compete terms and conditions
of the Agreement, or the breach of any other term or condition of the
Agreement that threatens or cause irreparable harm to Employer.
14. Agreements Outside of Contract. This contract contains the complete
agreement concerning the employment arrangements between the parties and
shall, as of the effective date hereof, supersede all other agreements between
the parties. The parties stipulate that neither of them has made any
representation with respect to the subject matter of this Agreement or any
representations, including the execution and delivery hereof, except such
representations as are specifically set forth herein and each of the parties
hereto acknowledges that he or she has relied on their own judgment in
entering into this Agreement.
The parties hereto further acknowledge that any payments or
representations that may have heretofore been made by either of them to the
other are of no effect and that neither of them has relied thereon in
connection with his or her dealings with the other.
15. Modification of Agreement. No waiver or modification of this
Agreement or of any covenant, condition or limitation herein contained shall
be valid unless in writing and duly executed by the party to be charged
therewith, and no evidence of any waiver or modification shall be offered or
received in evidence of any proceeding, arbitration or litigation between the
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parties hereto arising out of or affecting this Agreement, or the rights or
obligations of the parties hereunder, unless such waiver or modification is in
writing, duly executed as aforesaid, and the parties further agree that the
provisions of this section may not be waived except as herein set forth.
16. Fidelity Bond. Upon request of Employer, Employee will immediately
make application for a fidelity or a surety bond, to any company designated by
Employer, in such amount as may be specified by Employer. Employer shall pay
the premium on such bond, and such bond shall continue in force in such
amounts as Employer may from time to time require, and in the event such bond
is refused, or is ever cancelled, except with the approval of Employer,
Employee may be terminated immediately and Employee shall be entitled to
compensation to the date of such termination only.
17. Termination. This Agreement may be terminated by Employer upon two
hundred seventy five (275) days' prior written notice if Employee is being
terminated at no cause of the Employee. Employee shall receive from Employer
severance benefits equal to the compensation and benefits that the Employee
earned as of the date of termination for a period of two hundred seventy five
(275) days after the date of termination. In the event Employer becomes
insolvent, Employee shall receive the same compensation and benefits severance
for a period of thirty (30) days after the date of termination. In either
event, Employee shall be paid all bonuses and deferred compensation that would
have accrued during the severance period.
Notwithstanding any provision hereof to the contrary, in the event of any
violation by Employee of any of the terms of this Agreement, Employer thereon
may terminate Employee's employment without notice. However, Employer shall
provide severance benefits to Employee, equal to the compensation and benefits
that Employee earned as of the date of termination, for a period of one
hundred twenty (120) days after the date of termination. Employee shall be
paid all bonuses and deferred compensation that would have accrued during the
one hundred twenty (120) day severance period.
18. Severability. All agreements and covenants contained herein are
severable, and in the event any of them shall be held to be invalid by any
competent court, this Agreement shall be interpreted as if such invalid
agreements or covenants were not contained herein.
19. Choice of Law and Forum. It is the intention of the parties hereto
that this Agreement and the performance hereunder and all suits and special
proceedings hereunder be construed in accordance with, and pursuant to the
laws of, the State of Utah, and that any action, special proceeding, or other
proceeding that may be brought arising out of, in connection with, or by
reason of, this Agreement, the laws of the State of Utah shall be applicable
and shall govern to the exclusion of the law of any other forum. The parties
further agree that jurisdiction and venue lies exclusively in the State of
Utah for any legal proceedings between the parties concerning this Employment
Agreement or involving the employment of Employee, and Employee waives any
objection to personal jurisdiction in the State of Utah.
20. Return of Company Property. Upon termination of Employee's
employment, whether under this Agreement or for any period thereafter,
Employee agrees to return to Employer all property of Employer or any other
affiliate or subsidiary of Employer of which he has had custody and to deliver
to Employer all documents, keys, credit cards, forms, contracts, notebooks and
other data relating to customers, management studies conducted by him or her,
inventions designed by him or her while employed by Employer, and any personal
property of Employer in Employee's possession at the time of termination.
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IN WITNESS WHEREOF, the parties have executed this Agreement in Salt Lake
City, Salt Lake County, State of Utah, on the day and year first above
written.
EMPLOYER:EMPLOYEE:
RUBICON MEDICAL, INC.XXXXXXX X. XXXXXX
By
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Xxxxx X. Xxxxxx, Chairman
EXHIBIT "A"
The following represents the current cash compensation portion of the salary
of Xxxxxxx X. Xxxxxx, President and Chief Executive Officer of Rubicon
Medical:
Annual Base Salary:$90,000.00
1. Car Allowance/Insurance:$1,273.96 per month ($15,287.52/year)
*Car Gas and Maintenance:Charged to Rubicon's corporate VISA card as incurred
and paid for by Rubicon
2. Annual Bonus Eligible:$20,000.00 (payable each December prior to
Christmas)
3. Health & Dental Insurance:Premiums paid 100% by Rubicon Medical
4. AD&D/Life:Premiums paid 100% by Rubicon Medical
5. 401(k):Match 50% per dollar contributed up to 8% of salary
