EXHIBIT 10.21
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated effective
the 19th day of May, 1995, between MEDICAL INNOVATIONS, INC., a Delaware
corporation (the "Company"), and XXXXXX X. XXXX (the "Employee"). The Company
and Employee may sometimes hereinafter be referred to singularly as a "Party" or
collectively as the "Parties."
WITNESSETH:
That for and in consideration of the mutual covenants,
promises and undertakings hereinafter contained, the Parties hereby undertake
and agree as follows:
1. EMPLOYMENT TERM. The Company hereby employs the
Employee commencing on the date hereof for a term of three (3) years, unless
sooner terminated as hereinafter provided. The term of this Agreement may be
renewed or extended for one or more successive additional one (1) year terms
upon mutual agreement of the Parties prior to the expiration of the initial term
or any such renewal term. Sections 14 and 15 of this Agreement shall survive the
completion or termination of this Agreement or at such time when the Employee
ceases to be employed, for any reason whatsoever, with the Company. Section 15,
however, shall not survive termination of this Agreement by Employee pursuant to
Section 12 hereof. The Employee accepts such employment and agrees to perform
the services specified herein, all upon the terms and conditions hereinafter
stated.
2. DUTIES. The Employee shall serve as President of
the Company's wholly-owned subsidiary, Hospital HomeCare Corporation ("HHCC"),
and agrees to devote his full time and efforts to the faithful performance of
his duties to the Company. The Employee also agrees to perform, without
additional compensation, such other services for the Company, and for any
parent, subsidiary or affiliate corporations of the Company and any partnerships
in which the Company may from time to time have an interest (herein collectively
called "Affiliates"), as the Chief Executive Officer of the Company may from
time to time specify, if such services are of the nature consistent with the
duties associated with the position for which the Employee has been hired
pursuant to the terms hereof. The term "Company" as used herein shall be deemed
to include and refer to all such Affiliates.
3. EXTENT OF SERVICE. The Employee shall devote his
full time, attention and energy to the business of the Company, and shall not be
engaged in any other business activity during the term of this Agreement. The
foregoing shall not be construed as preventing the Employee from acting as
executor or trustee of certain estates or making passive investments in other
businesses or enterprises, including a partnership owning rental property, if
(i) such investments will not require services on the part of the Employee which
would in any way impair the performance of his duties under this Agreement, (ii)
such other businesses or enterprises are not engaged in any business that is in
any way competitive with the business of the Company, (iii) such other
businesses or enterprises do not transact business with the Company or any
Affiliate, and (iv) the Employee has complied with Sections 13, 14 and 15 of
this Agreement with respect to such passive investment.
4. COMPENSATION. As payment for the services to be
rendered by the Employee hereunder during the initial term, the Employee shall
be entitled to receive a salary in the amount of $4,166.67 per month effective
as of the date hereof, which shall be payable during the term of this Agreement,
or until the earlier termination of employment by the Employee, in accordance
with the payroll policies of the Company in effect from time to time.
5. BONUS. Beginning with the fiscal year ending
December 31, 1995, Employee shall be entitled to receive an annual bonus to be
determined in the sole discretion of the Board. Such bonus shall be paid on an
annual basis within ninety (90) days after each fiscal year end.
6. STOCK OPTIONS. As additional compensation to the
Employee for services to be performed hereunder, MI will grant to the Employee
stock options pursuant to MI's 1988 Stock Option Plan that will entitle the
Employee to purchase 100,000 shares of common stock, $0.0075 par value, of the
Company at the last reported sales price for such stock on May 19, 1995.
7. EXPENSES. During the term of this Agreement, the
Company shall pay or reimburse the Employee for all reasonable out-of-pocket
expenses for travel, meals, hotel accommodations and similar items incurred by
him in connection with the business of the Company and approved by the Chief
Executive Officer or the Board of Directors of the Company, upon submission by
him of an appropriate statement documenting such expenses as required by the
Internal Revenue Code, as amended from time to time.
8. EMPLOYEE BENEFITS. During the term of this
Agreement, the Employee shall be entitled to participate in all employee benefit
plans from time to time made available to the employees of the Company,
including any retirement plan, profit-sharing plan, group life plan, health or
accident insurance or other employee benefit plans. For so long as the Company
provides any of its employees with the use of automobiles owned by the Company,
the Employee will have the use of such an automobile designated by the Company.
9. VACATION. During the term of this Agreement, the
Employee shall be entitled to annual vacation time determined in accordance with
the vacation policies of the Company in effect from time to time, during which
time his compensation shall be paid in full. Unused vacation time shall not
accrue from year to year. Notwithstanding the Company's vacation policy in
effect, the Employee will be entitled to three (3) weeks of vacation in the
Company's fiscal year ending December 31, 1995.
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10. TERMINATION OF EMPLOYMENT FOR CAUSE. The Company
may terminate the employment of the Employee For Cause. As used herein, the term
"For Cause" shall mean any one or more of the following:
(a) material or repeated violation by the Employee of the
terms of this Agreement or his material or repeated failure to perform his
duties as described in Section 2 in a manner consistent with his position;
(b) excessive absenteeism on the part of the Employee not
related to illness;
(c) the Employee's indictment for a felony;
(d) the Employee's commission of fraud, embezzlement, theft or
crimes constituting moral turpitude, in any case whether or not involving the
Company, that, in the reasonable opinion of the Company, renders the Employee's
continued employment harmful to the Company;
(e) the voluntary resignation of the Employee without the
prior consent of the Company unless such resignation arises from the breach of
the Company of this Agreement or actions of the Company that violate applicable
laws;
(f) substance abuse on the part of the Employee; or
(g) the Employee knowingly acting in bad faith relative to the
Company's business interests.
In the event of termination of his employment For Cause, the Employee shall be
entitled to receive his compensation, as determined in Section 4 of this
Agreement and excluding any profit sharing or other bonuses, due or accrued on a
pro rata basis to the date of termination.
11. DISABILITY. As used herein, "Disability" shall
mean a physical or mental incapacity of the Employee that, in the good faith
determination of the Company, has prevented him from performing the duties
assigned him by the Company for ninety (90) consecutive days or for a period of
more than ninety (90) days in the aggregate in any eighteen (18) month period
and that, in the determination of the Company after consultation with a medical
doctor appointed by the Company, may be expected to prevent the Employee for any
period of time thereafter from devoting his full time and energies to his duties
as provided hereunder. The Employee's employment hereunder shall cease as of the
date of such determination. The Employee agrees to submit to medical
examinations, at the Company's sole cost and expense, to determine whether a
Disability exists pursuant to reasonable requests that the Company may provide
from time to time. During the Period of such physical or mental incapacity as
provided above, the salary otherwise payable to the Employee may, in the
absolute discretion of the Company, be reduced by the
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amount of any disability benefits or payments received by the Employee from the
Company or any health plan funded in whole or in part by the Company (excluding
health insurance benefits or other reimbursement of medical expenses
attributable to insurance policies).
12. TERMINATION BY EMPLOYEE FOR CAUSE. The Employee
may terminate this Agreement upon the occurrence of any Event of Default. As
used herein, the term "Event of Default" shall mean (i) the material breach of
any provision of this Agreement by the Company, (ii) if the Employee is not
elected as a member of the Board of Directors of the Company on or before June
30, 1995, or (iii) if the Employee is removed, or is not reelected, as a member
of the Board of Directors of the Company or HHCC. Notwithstanding any provision
hereof to the contrary, however, the Employee may not terminate this Agreement
until it has provided to the Company (i) written notice of the occurrence of an
Event of Default, and (ii) ten (10) days in which to cure the Event of Default.
In the event of termination of this Agreement due to the occurrence of an Event
of Default, the Employee shall have no further obligations hereunder, and the
provisions of Section 15 hereof shall have no further force or effect and shall
not survive termination of this Agreement.
13. BUSINESS OPPORTUNITIES. For as long as the
Employee shall be employed by the Company, the Employee agrees that with respect
to any new and future business opportunity or other new and future business
proposal which is offered to, or comes to the attention of, the Employee and
which is in any way related to, or connected with, the business of the Company
or its Affiliates, the Company shall have the right to take advantage of such
business opportunity or other business proposal for its own benefit. The
Employee agrees to promptly deliver notice to the Board of Directors of the
Company in writing (the "Notice of Opportunity") of the existence of such
opportunity or proposal and the Employee may take advantage of such opportunity
only if the Company does not elect to exercise its right to take advantage of
such opportunity.
14. CONFIDENTIAL INFORMATION. The Employee
acknowledges that in the course of his employment with the Company, he will
receive, and be made aware of, and exposed to certain trade secrets, know-how,
lists of customers, employee records and other confidential information and
knowledge concerning the business of the Company (hereinafter collectively
referred to as "Information") which the Company desires to protect. The Employee
understands that such Information is confidential and he agrees that he will not
reveal such Information to anyone outside the Company. The Employee further
agrees that during the term of this Agreement and thereafter he will not use
such Information in competing with the Company. Upon termination of his
employment hereunder, the Employee shall surrender to the Company all papers,
documents, writings and other property produced by him or coming into his
possession by or through his employment hereunder and relating to the
information referred to in this Section 14, which are not general knowledge in
the industry, and the Employee agrees that all such materials will at all times
remain the property of the Company.
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15. COVENANT NOT TO COMPETE. Employee recognizes
that the Company has business goodwill and other legitimate business interests
which must be protected. In addition, Employee acknowledges that he would not
have access to the Information except through his employment with Company.
Therefore, in exchange for access to the Information and the benefits of
employment with the Company, the Employee agrees not to compete with Company for
a period of two (2) years from the date of the termination of the Employee for
any reason (subject to Section 10 hereof), in accordance with the following
provisions:
A. Employee will not in any capacity or
relationship enter into, engage in, or be connected with any business or
business operation or activity which consists in whole or in part of the
business of the Company, within the United States of America. For purposes of
this Agreement, the business of the Company is acknowledged and agreed to be
providing health care services in the home or providing consulting or management
services to hospitals and free-standing home healthcare agencies regarding home
health care programs (the "Company's Business"); and
B. Employee will not call upon any customer
whose account is serviced in whole or in part by the Company at the time of the
termination of Employee's employment, with the purpose of selling or attempting
to sell to any such customer any goods included within the product lines of the
Company; and
C. Employee will not intentionally divert,
solicit or take away any customer, supplier or employee of the Company, or the
patronage of any customer or supplier of the Company, or otherwise interfere
with or disturb the relationship existing between the Company and any of its
customers, suppliers or employees, directly or indirectly.
It is mutually understood and agreed that if any of the
provisions relating to the scope, time or territory in this paragraph 14 are
more extensive than is enforceable under applicable laws or are broader than
necessary to protect the goodwill and legitimate business interests of the
Company, then the Parties agree that they will reduce the degree and extent of
such provisions by whatever minimal amount is necessary to bring such provisions
within the ambit of enforceability under applicable law.
The Parties acknowledge that the remedies at law for breach of
Employee's covenants contained in this Section 15 are inadequate, and they agree
that the Company shall be entitled, at its election, to injunctive relief
(without the necessity of posting bond against such breach or attempted breach),
and to specific performance of said covenants in addition to any other remedies
at law or equity that may be available to the Company.
16. NOTICES. All notices, requests, consents and
other communications under this Agreement shall be in writing and shall be
deemed to have been delivered on the date personally delivered or on the date
mailed, postage prepaid, by certified mail, returned receipt requested, or
telegraphed and confirmed if addressed to the respective parties as follows:
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If to Company: Medical Innovations, Inc.
Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Chief Executive Officer
Facsimile No. (000) 000-0000
Copy to: Xxxxx, Xxxxx & Xxxxxx Incorporated
Nine Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxx, Xx.
Facsimile No. (000) 000-0000
If to Employee: Xx. Xxxxxx X. Xxxx
0000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Either Party hereto may designate a different address by providing written
notice of such new address to the other Party hereto.
17. SPECIFIC PERFORMANCE. The Employee acknowledges
that a remedy at law for any breach or attempted breach of Sections 11, 12 or 13
of this Agreement will be inadequate, the Employee agrees that the Company shall
be entitled to specific performance and injunctive and other equitable relief in
case of any such breach or attempted breach, and further agrees to waive any
requirement for the securing or posting of any bond in connection with the
obtaining of any such injunctive or any other equitable relief.
18. SEVERABILITY. Whenever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provisions shall be
ineffective to the extent of such provision or invalidity only, without
invalidating the remainder of such provision or the remainder of such provision
or the remaining provisions of this Agreement.
19. ASSIGNMENT. This Agreement may not be assigned
by the Employee. Neither the Employee, his spouse nor their estates shall have
any right to encumber or dispose of any right to receive payments hereunder, it
being understood that such payments and the right thereto are nonassignable and
nontransferable.
20. BINDING EFFECT. Subject to the provisions of
Section 19 of this Agreement, this Agreement shall be binding upon and inure to
the benefit of the Parties hereto, the Employee's heirs and personal
representatives, and the successors and assigns of the Company.
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21. GOVERNING LAW. This Agreement shall be construed
and enforced in accordance with and governed by the laws of the State of Texas.
In the event of a dispute concerning this Agreement, venue shall lie in the
appropriate federal or state district courts located in, or if not applicable,
closest to Houston, Texas.
22. PRIOR EMPLOYMENT AGREEMENTS. Employee represents
and warrants to the Company that he has fulfilled all of the terms and
conditions of all prior employment agreements to which he may be or have been a
party, and at the time of execution of this Agreement is not a party to any
other employment agreement. This Agreement shall specifically replace and
supersede any employment agreement the Employee may presently have or have had
in the past with the Company.
23. PAROLE EVIDENCE. This Agreement constitutes the
sole and complete agreement between the Parties hereto, and no verbal or other
statements, inducements or representations have been made to or relied upon by
either Party, and no modification hereof shall be effective unless in writing
signed and executed in the same manner as this Agreement, provided, however, the
amount of compensation to be paid Employee for services to be performed for
Company may be changed from time to time by the Parties hereto by written
agreement without in any other way modifying, changing or affecting this
Agreement and the performance by Employee of any of the duties of his employment
with Company.
24. WAIVER. Any waiver to be enforceable must be in
writing and executed by the Party against whom the waiver is sought to be
enforced.
IN WITNESS WHEREOF, the Parties hereto have executed
this Agreement as of the date and year first above written.
THE COMPANY:
MEDICAL INNOVATIONS, INC.
By: /s/ XXXX X. XXXXXX
Xxxx X. Xxxxxx, Chairman of the Board,
President and Chief Executive Officer
THE EMPLOYEE:
/s/ XXXXXX X. XXXX
Xxxxxx X. Xxxx
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