EXHIBIT 10.18
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EMPLOYMENT AGREEMENT
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THIS AGREEMENT ("Agreement") is made and entered into effective as of the
17th day of December, 1998 (the "Effective Date"), by and between MICROTEK
MEDICAL, INC., a Delaware corporation (hereinafter the "Company"), and X.X.
XXXXXX (hereinafter the "Employee").
RECITALS:
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R-1. The Company develops, manufactures and markets disposable, specialty
and safety products for use in medical, industrial and commercial markets.
R-2. The Company's markets are worldwide.
R-3. The Company maintains certain trade secrets and confidential
information which is proprietary to the Company, the disclosure or exploitation
of which would cause significant damage to the Company.
R-4. The Company desires to employ the Employee, and the Employee desires
to accept such employment, for which purposes each of the Company and the
Employee desire to enter into this Agreement to set forth and clarify certain of
the terms and conditions relevant to such employment.
NOW, THEREFORE, in consideration of the recitals, the covenants and
agreements herein contained and the benefits to be derived herefrom, the
parties, intending to be legally bound, agree as follows:
1. Recitals. The recitals set forth above constitute part of this
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Agreement and are incorporated herein by this reference.
2. Employment. From and after the date hereof and for the term herein
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provided, the Company agrees to employ the Employee, and the Employee accepts
such employment with the Company upon the terms and conditions hereinafter set
forth.
3. Term. The Employee's employment shall commence on the Effective
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4. Date and, subject to Section 8 of this Agreement, shall continue
through the third anniversary of the earlier to occur of (a) March 31, 1999 or
(b) the date of Employee's relocation of his residence to or near Columbus,
Mississippi.
5. Duties. The Employee agrees that: (a) he shall devote his full working
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time and attention to the business of the Company and its affiliated companies;
(b) he will perform all of his duties pursuant to this Agreement faithfully and
to the best of his abilities.
(a) Compensation. As full compensation for all services rendered
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by the Employee pursuant to this Agreement and as full consideration for all of
the terms of this Agreement, the Employee shall receive from the Company during
his employment under this Agreement the base salary, bonuses and fringe benefits
described below.
(b) Base Salary. For all services rendered pursuant to this
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Agreement, the Company shall pay or cause to be paid to the Employee an annual
base salary of $100,000. The annual salary may be increased from time to time
during the term of this Agreement in the discretion of the Company. The base
salary shall be payable in accordance with the customary practices of the
Company for payment of its employees, but in any event, in installments not less
frequently than once monthly.
(c) Bonus Compensation. To the extent that the Company shall
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establish, from time to time in its discretion, bonus compensation plans for the
benefit of all of its management level employees, the Employee shall be entitled
to participate in such bonus compensation plans in accordance with the terms and
provisions established by the Company.
(d) Fringe Benefits. The Company has adopted, or may from time to
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time adopt, policies in respect to fringe benefits for its management level
employees in the nature of health and life insurance, holidays, vacation, sick
leave policies, disability and other matters. The Company covenants and agrees
that the Employee shall be entitled to participate in any such fringe benefit
policies adopted by the Company to the same extent that such fringe benefits
shall be available to and for the benefit of all other management level
employees.
(e) Relocation Expenses. The Employee agrees to relocate from the
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Ashville, North Carolina metropolitan area to the Columbus, Mississippi area on
a schedule to be agreed upon between the Company and the Employee. The Company
agrees that the Employee shall be entitled to participate in the Company's
relocation policy (the "Relocation Policy") as from time to time in effect,
subject to the terms and conditions of such policy.
(f) Tax Withholdings and Other Deductions. The Company shall have the
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right to deduct from the base salary and any additional compensation payable to
the Employee all amounts required to be deducted and withheld in accordance with
social security taxes and all applicable federal, state and local taxes and
charges as may now be in effect or which may be hereafter enacted or required as
charges on the compensation of the Employee. The Company shall also have the
right to offset from the base salary and any additional compensation payable to
the Employee any loan or other amounts owed to the Company by the Employee.
6. Working Facilities. The Company, at its own expense, shall furnish the
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Employee with office, working space and such equipment as may be reasonably
necessary for the Employee's performance of his or her duties.
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7. Expenses. The Employee is required as a condition of employment to
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incur ordinary, necessary and reasonable expenses for the promotion of the
business of the Company and its affiliates and subsidiaries, including expenses
for entertaining, travel and similar items. The Employee is authorized to incur
reasonable expenses in connection with such business, including travel and
entertainment expenses, fees for seminars and courses, and expenses incurred in
attendance at executive meetings and conventions. If paid by the Employee, upon
presentation by the Employee of an itemized account of such expenditures in a
manner satisfactory to the Company, the Employee shall be entitled to receive
reimbursement for these expenses, subject to policies that may be established
from time to time by the Company. It is intended by the Company and the Employee
that all expenses incurred pursuant to this paragraph are to be ordinary and
necessary business expenses.
8. Termination. The Employee's employment may be terminated in accordance
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with the provisions of this section. The provisions for termination are as
follows:
(a) Death or Disability. The Employee's employment shall be
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terminated upon the death or total disability of the Employee (total disability
meaning the failure of the Employee to perform his or her duties and
responsibilities hereunder in the manner and to the extent required by this
agreement for a period of 180 consecutive days by reason of the Employee's
mental or physical disability as determined by the Company, which determination,
in the absence of a showing of bad faith, shall be conclusive upon the
Employee).
(b) Termination for Cause. The Employee's employment may be
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terminated by the Company for cause, which for purposes of this Agreement shall
be limited solely to (i) the Employee's material failure or refusal to comply
with the policies, standards and regulations of the Company from time to time
reasonably established and fairly administered by the Company, (ii) a material
breach by the Employee of the terms of Section 9 of this Agreement, or (iii) a
material breach by the Employee of any of the other terms of this Agreement
(including, without limitation, any resignation by the Employee prior to the
expiration of the term of this Agreement) or (iv) the indictment or conviction
of the Employee for any felony, the conviction of the Employee for a misdemeanor
involving the misuse of funds, or the adjudication by a court that the Employee
engaged in willful misconduct in connection with the activities of the Company.
(c) Termination Without Cause. The Employee's employment may be
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terminated by the Company without cause: provided, that, in the event of any
termination of the Employee's employment under this paragraph (c) (the Employee
shall be entitled to receive the base salary as set forth in Section 5(a) hereof
for the remaining term of this Agreement payable at the Company's election
either in a lump sum (present valued at a discount rate of 10%) or as otherwise
payable under Section 5(a). The Company's obligation to make payments under this
paragraph shall cease and terminate in the event of any breach by the Employee
of any of the provisions of Section 9 of this Agreement. The Company may
require, as a condition precedent to making any payments under this paragraph to
the Employee, that the Employee execute a
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customary release and covenant not to xxx in favor of the Company. Any payments
under this Section 8(c) shall be subject to Section 5(e).
9. Protective Covenants: Remedies.
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(a) Property Rights. The Employee acknowledges and agrees that
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all records of the accounts of customers, lists, prospect lists, vendor lists,
samples, desk calendars, briefcases, day timers, notebooks, computers, computer
records and software provided by the Company or any subsidiary or affiliate of
the Company (collectively, the "Company Group"), policy and procedure manuals,
price lists, catalogs, premises keys, written methods of pricing, lists of needs
and requirements of customers, written methods of operation of the Company
Group, manufacturing techniques and any other records and books relating in any
manner whatsoever to the customers of the Company Group or its business, whether
prepared by the Employee or otherwise coming into the Employee's possession, are
the exclusive property of the Company Group regardless of who actually purchased
or prepared the original book, record, list or other property. All such books,
records, lists or other property shall be immediately returned by the Employee
to the Company upon any termination of employment.
(b) Non-Disclosure of Confidential Information. The Employee
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acknowledges that through formal and informal training by the Company Group, the
Employee will become familiar with, among other things, the following:
Any scientific or technical information, design, process, procedure,
formula or improvement that is secret and of value, and information including,
but not limited to technical or nontechnical data, formula, patterns,
compilations, programs, devices, methods, techniques, drawings, processes and
financial data, which the Company takes reasonable efforts to protect from
disclosure, and from which the Company derives actual or potential economic
value due to its confidential nature (the foregoing being hereinafter
collectively referred to as the "Confidential Information ").
The Employee acknowledges that use of such Confidential information
will give the Employee an unfair competitive advantage over the Company Group in
the event that the Employee should go into competition with the Company Group
and agrees that during the term of this Agreement and for a period of two (2)
years subsequent to the termination of employment for any reason, the Employee
will not disclose to any person, or utilize for the Employee's benefit, any of
the Confidential Information. The Employee acknowledges that such Confidential
Information is of special and peculiar value to the Company; is the property of
the Company Group, the product of years of experience and trial and error; is
not generally known to the Company Group's competitors; and is regularly used in
the operation of the Company Group's business. The Employee acknowledges and
recognizes that applicable law prohibits disclosure of confidential information
and trade secrets indefinitely (i. e. without regard to the two year period
described in this paragraph), and the Company has the right to require the
Employee to comply with such law in addition to the Company's rights under this
paragraph.
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(c) Non-Interference With Employees. The Employee agrees not to
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solicit, entice or otherwise induce any employee of the Company Group to leave
the employ of the Company Group for any reason whatsoever, and not to otherwise
interfere with any contractual or business relationship between the Company
Group and any of its employees for two (2) years from the termination of the
Employee's employment.
(d) Acknowledgment Regarding Protective Covenants. The Employee
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acknowledges that the Employee has read and understands the terms of this
Agreement, that the same was specifically negotiated, and that the protective
covenants agreed upon herein are necessary for the protection of the Company
Group's business as a result of the business secrets that will be disclosed
during the employment. Further, the Employee acknowledges that the Company would
not employ the Employee without the specifically negotiated protective covenants
herein stated.
(e) Remedies. In addition to any other rights and remedies which are
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available to the Company, with respect to any breach or violation of the
protective covenants set forth herein, it is recognized and agreed that the
Company shall be entitled to obtain injunctive relief which would prohibit the
Employee from continuing any breach or violation of such protective covenants.
10. Disputes. In the event of any litigation between the Company and the
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Employee arising out of this Agreement, and the rights and obligations of the
parties hereunder, the prevailing party shall be entitled to recover his or its
reasonable attorney's fees and court costs.
11. Notices. Any notice required or permitted to be given under this
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Agreement shall be in writing and personally delivered or sent by registered or
certified mail, return receipt requested, in the case of the Company, to the
principal office of the Company, and in the case of the Employee, to the
Employee's last known residence address.
12. Construction. This Agreement shall be governed and interpreted in
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accordance with the laws of the State of Mississippi. The waiver by any party
hereto of a breach of any of the provisions of this Agreement shall not operate
or be construed as a waiver of any subsequent breach by any party.
13. Modification; Assignment. This Agreement may not be changed except by
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written agreement duly executed by the parties hereto. The rights and
obligations of the Company under this Agreement shall inure to the benefit of
and be binding upon the successors and assigns of the Company. This agreement,
being for the personal services of the Employee, shall not be assignable or
subject to anticipation by the Employee.
14. Severability. Each provision of this Agreement shall be considered
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severable. If for any reason any provisions herein are determined to be invalid
or unenforceable, this Agreement shall be construed in all respects as though
such invalid or unenforceable provisions were omitted, and such invalidity or
unenforceability shall not impair or otherwise affect the validity of the other
provisions of this Agreement. Moreover, the parties agree to replace such
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invalid provision with a substitute provision that will correspond to the
original intent of the parties.
15. Number of Agreements. This Agreement may be executed in any number of
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counterparts, each one of which shall be deemed an original.
16. Pronouns. The use of any word in any gender shall be deemed to include
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any other gender and the use of any word in the singular shall be deemed to
include the plural where the context requires.
17. Headings. The section headings used in this Agreement are for
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convenience only and are not to be controlling with respect to the contents
hereof.
18. Entire Agreement. This Agreement contains the complete and exclusive
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statement of the terms and conditions of the Employee's employment by the
Company, and there exists no other inducement or consideration between the
Company and the Employee relative to the employment contemplated by this
Agreement. All prior agreements relative to the subject matter of this Agreement
are terminated.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
MICROTEK MEDICAL, INC.
BY: _____________________ _____________________
X. X. XXXXXX
ITS: _____________________
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