EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), is made and entered into this
27th day of April, 2004 between MEDICORE, INC., with offices at 0000 Xxxx
00xx Xxxxxx, Xxxxxxx, Xxxxxxx and 000 Xxxxxxx Xxxxxx, Xxxxxxxxx Xxxxxxx, Xxx
Xxxxxx ("Medicore"), and XXXXXX X. XXXXXXXX, residing at 000 Xxxxxxx Xxxx,
Xxxxxxxx Xxxxx, Xxx Xxxxxx ("Xxxxxxxx").
R E C I T A L S
WHEREAS, Medicore and Xxxxxxxx have entered into employment contracts,
initially dated September 17, 1980, with the most recent dated September 1,
1998, whereby Xxxxxxxx is employed as Chief Executive Officer ("CEO"),
President and Chairman of the Board of Directors ("Chairman"); and
WHEREAS, the parties desire to continue the employment relationship; and
WHEREAS, the Board of Directors ("Board") has agreed to and approved
this Agreement.
NOW, THEREFORE, in consideration of continuing the employment
relationship by entering into this Agreement, and in consideration of the
covenants and promises contained herein, the parties intending to be legally
bound under the terms hereof, Medicore and Xxxxxxxx agree as follows:
1. Capacity and Services. Medicore hereby continues to employ Xxxxxxxx
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as its CEO and President and Xxxxxxxx accepts such employment. Xxxxxxxx
shall also serve as Chairman so long as he continues to be elected by
shareholders as a director. Xxxxxxxx'x duties are to be those customarily
performed by persons employed and serving in such capacities, together with
the perquisites commensurate thereto. As Chairman and CEO Xxxxxxxx shall (i)
preside over all meetings of the shareholders and Board; (ii) be an ex
officio member of all Board committees (except committees which only permit
outside directors pursuant to applicable securities or stock exchange rules
or regulations, which meetings he shall attend in a consulting capacity); and
(iii) see that all orders and resolutions of the Board are carried into
effect. Xxxxxxxx agrees to devote to Medicore during the Term as defined in
Section 2 of this Agreement, his proper attention, diligence and a
substantial portion of his time, and to such other activities (including
civic activities) as will be of benefit to Medicore. Medicore recognizes that
Xxxxxxxx is the sole owner-operator of Xxxx & Company, Inc. ("Xxxx"), a
securities brokerage firm registered with the Securities and Exchange
Commission and a member of the National Association of Securities Dealers,
Inc. Xxxxxxxx will devote only that necessary time to the activities of
Xxxx, which shall not interfere or be in conflict with his positions and
responsibilities to Medicore. It is recognized and understood that Xxxxxxxx
is also an officer and director of Dialysis Corporation of America ("DCA")
(and its subsidiaries), a public subsidiary of Medicore, to which company he
devotes and may continue to devote all necessary and required time and
effort. During the Term of this Agreement Xxxxxxxx shall also serve in such
other offices, directorships and positions no less than the status and level
he presently holds in Medicore and its subsidiaries to which he may be
elected or appointed by the Board for no further consideration except as may
be approved by the Board. Xxxxxxxx shall perform such duties under the
direction of and in conformity with all reasonable standards and policies
established by the Board.
2. Term. The Term of employment under the provisions of this Agreement
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shall be for a period of five (5) years with a commencement date effective as
of March 1, 2004 and terminating on February 28, 2009 ("Term").
3. Place of Employment. Xxxxxxxx'x place of employment shall be
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northern New Jersey and only such other locations as shall be acceptable to
and approved by Xxxxxxxx.
4. Compensation. In consideration of the services to be performed by
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Xxxxxxxx as herein set forth, Medicore agrees to and shall pay Xxxxxxxx an
annual salary of not less than THREE HUNDRED FIFTY-THREE THOUSAND FIVE
HUNDRED DOLLARS ($353,500.00) during the first year of this Agreement,
increasing in increments of no less than TWELVE THOUSAND DOLLARS ($12,000)
each year thereafter. This salary shall be subject to annual review for
increases and Xxxxxxxx shall receive a bonus each year of the Term, which
bonus amount shall be at the discretion of the Board. The annual salary is
to be paid in accordance with the payroll procedures and practices from time
to time applicable to executive officers. Such includes but is not limited
to withholding of all required federal, state, local and other taxes which
Medicore is required to withhold in accordance with applicable statutes and
regulations. In the event of employment for a fractional part of a month,
the monthly installments shall be pro rated accordingly.
5. Employee Benefits and Perquisites. Xxxxxxxx shall participate
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during the Term in employee benefit plans and other fringe benefits and
perquisite programs available to Medicore employees generally and to the
executive group of employees on the same terms and conditions applicable to
such employees generally and the executive group of employees. Xxxxxxxx
shall also be entitled to participate in any pension plan, profit sharing
plan, stock option plan, stock purchase plan, group life, accident or other
insurance plan presently in force or any similar plan that may be adopted by
Medicore.
6. Expenses. In addition to the salary, employee benefits and
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perquisites, Xxxxxxxx shall be entitled to reimbursement for such reasonable
expenses incurred in the performance of his duties hereunder and for the
benefit and promotion of the business of Medicore and its subsidiaries,
including but not limited to a reasonable allowance and expenses for
automobile, travel, entertainment and similar items, in all cases, in
conformity with applicable securities or stock exchange rules or regulations.
7. Termination of Employment.
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(a) Disability. In the event Xxxxxxxx shall be unable, or fails,
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to perform services and his duties pursuant to this Agreement through illness
or mental or physical disability, and such failure or disability shall exist
for any consecutive one hundred eighty (180) days, during which one hundred
eighty (180) day disability period Xxxxxxxx shall continue to receive his
full compensation as otherwise provided in this Agreement, Medicore shall
have the option (i) to continue the Agreement and pay Xxxxxxxx his full
compensation less any disability benefits payable to Xxxxxxxx under the terms
of any disability insurance program of Medicore and, to the extent that, at
the end of the Term, Medicore and Xxxxxxxx do not enter into a new employment
agreement, Medicore shall make the severance payment to Xxxxxxxx in
accordance with Section 8(c) hereof, or (ii) to terminate this Agreement at
any time such disability or failure continues to exist by giving written
notice to Xxxxxxxx of such termination, which termination shall be effective
on the 60th day after receipt of such notice by Xxxxxxxx (the "Disability
Effective Date"), and make the payments to Xxxxxxxx as set forth in Section
8(a) below, unless Xxxxxxxx returns to full-time performance of his duties
prior to the Disability Effective Date.
If Xxxxxxxx shall have been disabled and shall have returned to work
after the end of such disability, any new disability commencing thereafter
shall be deemed a new disability, the period of which shall not be added to
any earlier disability period, but shall be calculated on its own for
purposes of determining the rights of Xxxxxxxx hereunder.
At the end of any temporary disability, Xxxxxxxx shall return to
work, and this Agreement shall continue as though such disability had not
occurred, except where specifically provided to the contrary.
During the period of any disability, Xxxxxxxx shall be entitled to
receive his allowance for expenses as provided for in Section 6 above.
(b) Death. Xxxxxxxx'x employment shall automatically terminate
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upon his death.
(c) By Medicore.
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(i) Medicore may terminate Xxxxxxxx'x employment only for
Cause. "Cause" means:
A. the willful and continued failure of Xxxxxxxx to perform
his duties under this Agreement (other than as a result of physical or mental
illness or injury), after the Board delivers to Xxxxxxxx a written demand for
performance that specifically identifies the manner in which the Board
believes that Xxxxxxxx has not performed his duties; or
B. illegal conduct or gross misconduct by Xxxxxxxx, in
either case that is willful and results in material and demonstrable damage
to the business or reputation of Medicore.
No act or failure on the part of Xxxxxxxx shall be
considered "willful" unless it is done, or omitted to be done, by Xxxxxxxx in
bad faith or without reasonable belief that his action or omission was in the
best interests of Medicore. Any act or failure to act that is based upon
authority given pursuant to a resolution duly adopted by the Board, or the
advice of counsel for Medicore, shall be conclusively presumed to be done, or
omitted to be done, by Xxxxxxxx in good faith and in the best interests of
Medicore.
(ii) A termination of Xxxxxxxx'x employment for Cause shall be
effected in accordance with the following procedures. Medicore shall give
Xxxxxxxx written notice ("Notice of Termination for Cause") of its intention
to terminate his employment for Cause, setting forth in reasonable detail the
specific conduct of Xxxxxxxx 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 the Board Meeting for Cause. The "Board Meeting for
Cause" means a meeting of the Board at which Xxxxxxxx'x termination for Cause
will be considered, that takes place not less than ten (10) and not more than
twenty (20) business days after Xxxxxxxx receives the Notice of Termination
for Cause. Xxxxxxxx shall be given an opportunity, together with counsel, to
be heard at the Board Meeting for Cause. Xxxxxxxx'x termination for Cause
shall be effective when and if a resolution is duly adopted at the Board
Meeting for Cause by a two-thirds vote of the entire membership of the Board,
excluding employee directors, stating that in the good faith opinion of the
Board, Xxxxxxxx is guilty of the conduct described in the Notice of
Termination for Cause, and that conduct constitutes Cause under this
Agreement.
(d) Good Reason.
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(i) Xxxxxxxx may terminate employment for Good Reason or
without Good Reason. "Good Reason" means:
A. the assignment to Xxxxxxxx of any duties inconsistent in
any respect with Section 1 of this Agreement, or any other action by Medicore
that results in a diminution in Xxxxxxxx'x position, authority, duties, or
responsibilities, other than an isolated, insubstantial, and inadvertent
action that is not taken in bad faith and is remedied by Medicore promptly
after receipt of notice thereof from Xxxxxxxx;
B. any failure by Medicore to comply with any provision of
Sections 4, 5 and 6 of this Agreement, or the reduction of any compensation
or benefits as provided herein, other than an isolated, insubstantial and
inadvertent failure that is not taken in bad faith and is remedied by
Medicore promptly after receipt of notice thereof from Xxxxxxxx;
C. any failure by Medicore to comply with Section 9 of this
Agreement; or
D. any other substantial breach of this Agreement by
Medicore that either is not taken in good faith or is not remedied by
Medicore promptly after receipt of notice thereof from Xxxxxxxx.
(ii) A termination of employment by Xxxxxxxx for Good Reason
shall be effectuated by giving Medicore written notice ("Notice of
Termination") of the termination within three (3) months of the event
constituting Good Reason, setting forth in reasonable detail the specific
conduct of Medicore that constitutes Good Reason and the specific
provision(s) of this Agreement on which Xxxxxxxx relies. A termination of
employment by Xxxxxxxx for Good Reason shall be effective on the fifth (5th)
business day following the date when the Notice of Termination is given,
unless the notice sets forth a later date (which date shall in no event be
later than thirty (30) days after the Notice of Termination is given).
(iii) A termination of Xxxxxxxx'x employment by Xxxxxxxx
without Good Reason shall be effected by giving Medicore no less than thirty
(30) days' prior written notice of termination.
(e) Wrongful Termination. Any purported termination of Xxxxxxxx'x
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employment by Medicore for a reason or in a manner not expressly permitted by
this Agreement shall be deemed a "Wrongful Termination." A Wrongful
Termination of Xxxxxxxx by Medicore shall be effective on the fifth (5th)
business day following the date when the Notice of Termination is given by
Medicore, unless the notice sets forth a later date (which date shall in no
event be later than thirty (30) days after the Notice of Termination is
given). In case a dispute exists as to the propriety of any Wrongful
Termination of Xxxxxxxx'x employment, Medicore or any successor agrees to
continue to provide Xxxxxxxx with all the compensation, benefits and
perquisites described in this Agreement until the resolution of such dispute.
If such termination is deemed to constitute a Wrongful Termination, Medicore
or such successor agrees to promptly pay Xxxxxxxx, in addition to any other
payment as required under this Agreement, all of Xxxxxxxx'x attorneys' fees
and expenses arising from the dispute plus interest at the statutory rate for
all sums due to Xxxxxxxx.
(f) Date of Termination. The "Date of Termination" means the date
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of Xxxxxxxx'x death, the Disability Effective Date, the date on which the
termination of Xxxxxxxx'x employment by Medicore for Cause or Wrongful
Termination or by Xxxxxxxx for Good Reason is effective, or the date on which
Xxxxxxxx gives Medicore notice of a termination of employment without Good
Reason, as the case may be. Xxxxxxxx'x termination based upon Wrongful
Termination or Good Reason shall not be deemed a breach or default by
Xxxxxxxx of his obligations under this Agreement.
8. Obligations of Medicore Upon Termination.
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(a) Death, Disability, by Medicore for Cause or by Xxxxxxxx Other
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Than for Good Reason. If this Agreement is terminated upon the occurrence of
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Xxxxxxxx'x death or the Disability Effective Date, is terminated by Medicore
for Cause,or Xxxxxxxx voluntarily terminates employment during the Term
without Good Reason, in addition to any compensation together with benefits
and expenses through such Date of Termination that were earned and not yet
paid, Xxxxxxxx shall be entitled to receive from Medicore or its successor in
one lump sum payment (as severance allowance as provided in paragraph (c) of
this Section 8) an amount equal to Xxxxxxxx'x compensation, including
expenses, benefits and perquisites as provided herein, at such Date of
Termination for the next three years ("Lump Sum Payment"). The Lump
Sum Payment shall be made to Xxxxxxxx or, in the event of Xxxxxxxx'x death,
to Xxxxxxxx'x estate or other designee as provided in writing by Xxxxxxxx in
his Last Will and Testament or document of similar import and intent
("Will"), within thirty (30) days of the Date of Termination; provided, that
only with respect to termination due to the death of Xxxxxxxx, if Medicore
does not have sufficient cash to make the Lump Sum Payment as required in
this Section 8, then Medicore shall pay the amount of the Lump Sum Payment in
such amounts and installments as it is able within a period of but no later
than nine (9) months from date of Xxxxxxxx'x death. Interest will accrue at
a per annum rate on the amounts owed to Xxxxxxxx equal to the coupon issue
yield on a 52 week U.S. Treasury Xxxx determined as of the date that the Lump
Sum Payment is due ("Interest"). Interest shall accrue until the payment to
Xxxxxxxx is fully satisfied.
It is agreed that Xxxxxxxx or his estate, as the case may be, has
the option, at his or its sole discretion, to elect to obtain from Medicore
in lieu of such Lump Sum Payment, 400,000 shares of Medicore common stock,
$.01 par value, from authorized and unissued capital stock or treasury shares
or any combination of authorized and unissued shares and treasury shares (the
"Medicore Shares"), subject to adjustment as provided in this Agreement, as
soon as practicable upon notice to Medicore of his or its election to obtain
the Medicore Shares.
Medicore agrees to have sufficient capital stock available and to
amend, if necessary, its certificate of incorporation, from time to time,
based upon its obligation to issue the Medicore Shares to Xxxxxxxx; and, to
the extent that capital stock and/or treasury shares may then be insufficient
to cover the exercise of the option of Xxxxxxxx to obtain the Medicore Shares
in lieu of the Lump Sum Payment, Medicore agrees that it shall take and use
for Xxxxxxxx'x election such shares reserved for other purposes, and/or to
the extent additional shares of common stock of Medicore are required,
Medicore shall immediately repurchase said shares in the open market or in
privately negotiated transactions. Medicore further agrees to file and cause
to be approved any listing agreements that may be required by any exchange or
interdealer quotation system upon which the Medicore Shares may then be
trading with respect to any additional shares that may be authorized, issued
and/or transferred to Xxxxxxxx under his option to elect such Medicore Shares
in lieu of the Lump Sum Payment as provided in this Section 8(a). Medicore
shall take any and all action, through its officers and/or directors to cause
such Medicore Shares to be immediately issued to Xxxxxxxx. Xxxxxxxx shall
have the right to immediately vote the Medicore Shares, to receive dividends
and to have all the rights, privileges and obligations of a shareholder with
respect to the Medicore Shares upon his written notice to Medicore of his
election to obtain such Medicore Shares in lieu of the Lump Sum Payment to
which he is entitled under this Section 8(a) ("Election Notice"), pending the
ministerial acts of issuance of such Medicore Shares to Xxxxxxxx.
At Xxxxxxxx'x request and option, subject to any applicable
securities laws, Xxxxxxxx may designate his spouse, children, siblings or
other immediate family members, which includes relations up to and including
first cousins, or a trust for their benefit of which Xxxxxxxx is sole
trustee, to own and hold record or beneficial title to all or portions of
such Medicore Shares obtained by Xxxxxxxx under this Section 8(a).
(b) Wrongful Termination of Xxxxxxxx; Termination By Xxxxxxxx for
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Good Reason. Upon the Wrongful Termination of Xxxxxxxx by Medicore, or if
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Xxxxxxxx terminates his employment for Good Reason, in either case Medicore
(i) shall continue to provide Xxxxxxxx with the compensation, benefits,
perquisites and expenses as set forth in Sections 4 - 6, 12 and 14 as if he
had remained employed by Medicore pursuant to this Agreement through the Term
(referred to herein collectively as the "Remaining Compensation"); and (ii)
shall provide Xxxxxxxx with the Lump Sum Payment together with the option to
obtain the Medicore Shares in lieu thereof (as liquidated damages and, to the
extent permitted by law, without any obligation on Xxxxxxxx'x part to
mitigate damages through other employment or otherwise).
(c) Severance. If this Agreement terminates due to the expiration
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of time through the Term, and Medicore or Xxxxxxxx determines not renew or
otherwise enter into an employment arrangement with the other party, then
Medicore, in consideration of Xxxxxxxx'x services, shall pay Xxxxxxxx as a
xxxxxxxxx allowance the Lump Sum Payment coupled with the option given to
Xxxxxxxx to elect, in lieu thereof, the Medicore Shares. Upon receipt of the
severance allowance, Xxxxxxxx will provide Medicore with a general release,
waiver and discharge with respect to all charges, claims and causes of action
which Xxxxxxxx may have arising from or related to his employment or
termination of his employment.
9. Change in Control.
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(a) Definition. Change in Control shall mean there is an Acquiring
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Person, a Reorganization, Board Changes, or Liquidation and Dissolution as
defined herein:
(i) Acquiring Person. Any person and affiliated or associated
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persons ("Group") who have acquired beneficial ownership of twenty-five (25%)
percent or more of the outstanding shares of Medicore or who commence, or
announce an intention to make a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
Group of 25% or more of such outstanding shares of Medicore; provided, such
acquiring person or Group is not affiliated with Xxxxxxxx, nor was such
acquisition of Medicore shares initiated by Xxxxxxxx; and provided, further
that if any tender offer or exchange offer is not consummated or is
consummated to an extent of less than 25% of the outstanding shares of
Medicore, then it shall not be deemed a Change of Control as defined herein.
(ii) Reorganization. A reorganization shall mean substantially
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all of the assets of Medicore or DCA are acquired by another person or entity
other than the then existing Board or a reorganization involving the
acquisition of Medicore or DCA by another or of Medicore or DCA merging or
consolidating with another. The reorganization shall be deemed to have
occurred upon consummation of the reorganization transaction.
(iii) Board Changes. Board changes shall be a modified Board
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which occurs on the date that a majority of the Board shall be persons other
than persons (i) for whose election proxies shall have been solicited by the
existing Board, or (ii) who are then serving as directors appointed by two-
thirds (2/3) of the directors comprising the existing Board to fill vacancies
on the Board caused by death or resignation (but not by removal) or to fill
newly created directorships (hereafter, the "Board Change").
(iv) Liquidation and Dissolution. Upon approval by Medicore's
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shareholders, exclusive of Xxxxxxxx or current affiliates of Medicore, or
persons affiliated with Xxxxxxxx, of a complete liquidation and dissolution
of Medicore.
(b) Obligations to Xxxxxxxx Upon a Change of Control. Upon the
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occurrence of any Change in Control, (i) Medicore or any successor as a
result of a reorganization as provided for in Section 9(a) above shall,
simultaneous with such Change in Control, provide Xxxxxxxx with the Lump Sum
Payment calculated as of the date of such Change in Control together with the
option to obtain Medicore Shares (or securities of the successor entity
corresponding to the number of Medicore Shares Xxxxxxxx would have been
entitled to obtain pursuant to such option) in lieu of the Lump Sum Payment,
and (ii) this Agreement shall remain in full force and effect and, to the
extent that any person or entity succeeds to Medicore as a result of any
reorganization or otherwise, such successor person or entity shall assume, in
its entirety, the obligations of Medicore set forth herein, including,
without limitation, the payment of compensation, expenses, benefits and
perquisites pursuant to Sections 4 - 6 of this Agreement for the Term hereof.
(c) Liquidation and Dissolution; Termination Subsequent to Change
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in Control. Medicore or any such successor or surviving entity shall be
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further obligated as follows:
(i) In the event of a Change in Control resulting from the
liquidation and dissolution of Medicore, to pay Xxxxxxxx the Remaining
Compensation in one lump sum at the time of such liquidation and dissolution.
(ii) Solely with respect to a Change in Control Resulting from
the acquisition by another person of substantially all of the assets of
Medicore or DCA, in the event of Xxxxxxxx'x termination of employment
subsequent to such a Change in Control which termination was due to death,
the Disability Effective Date or termination by Xxxxxxxx without Good Reason,
to pay to Xxxxxxxx his compensation together with any and all other benefits
and expenses earned but not yet paid through such Date of Termination.
(iii) Upon the termination of Xxxxxxxx'x employment (other than
for Cause) in connection with or at any time subsequent to a Change in
Control (other than as set forth in item (ii) above) and prior to the
expiration of the Term hereof, to pay Xxxxxxxx the Remaining Compensation in
one lump sum at the time of such termination.
(iv) Upon the termination of Xxxxxxxx for Cause in connection
with or subsequent to a Change in Control (but prior to the expiration of the
Term hereof), to calculate the amount of Remaining Compensation from the Date
of Termination for Cause, and to the extent such amount exceeds the amount of
the Lump Sum Payment paid to Xxxxxxxx in connection with the Change in
Control, to pay Xxxxxxxx the difference representing the amount of the
Remaining Compensation that exceeds the Lump Sum Payment. To the extent that
the calculated amount of the Remaining Compensation is less than the Lump Sum
Payment paid to Xxxxxxxx upon the Change in Control there shall be no
additional payment obligation to Xxxxxxxx with respect to such Remaining
Compensation. In either case the obligation with respect to any compensation
benefits and expenses of Xxxxxxxx earned or accrued through the Date of
Termination for Cause and not yet paid shall remain in effect and be payable
to Xxxxxxxx as provided for herein.
10. Vesting and Redemption of Xxxxxxxx'x Convertible Securities.
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(a) Upon any termination of Xxxxxxxx'x employment as provided in
Section 8 hereof (other than termination of Xxxxxxxx by Medicore or a
successor or surviving entity for Cause or termination by Xxxxxxxx without
Good Reason), or upon a Change in Control as set forth in Section 9 hereof,
any options, warrants or similar rights to acquire securities of Medicore
owned by Xxxxxxxx (collectively "Options") notwithstanding anything in their
terms to the contrary, shall be fully vested and exercisable and Medicore or
any surviving or successor entity shall immediately redeem all of Xxxxxxxx'x
outstanding Options for cash in an amount equal to the excess over the Option
exercise price of the greater of (i) the price per share paid in an
acquisition by an Acquiring Person or in such Reorganization, or (ii) the
highest Fair Market Value of the stock of Medicore during ten (10) days
following a public announcement that an Acquiring Person has acquired the
requisite beneficial ownership of the outstanding stock or ten (10) days
following the commencement of or announcement of an intention to make a
tender offer or exchange offer the consummation of which would result in the
requisite beneficial ownership by an Acquiring Person, (iii) the Fair Market
Value upon (A) the Board Change, (B) the approval of a liquidation and
dissolution of Medicore, or (C) the Date of Termination of Xxxxxxxx'x
employment (in the case of a disability of Xxxxxxxx for which Medicore or a
successor entity has determined to continue this Agreement, the last day of
the 180 day disability period) in each case by delivering written notice to
Xxxxxxxx of the redemption of such Options setting forth the date and the
price at which the Options will be redeemed; provided, however, that
within ten (10) days of written notification to Xxxxxxxx of such redemption
of Options, Xxxxxxxx shall have the right to elect to keep his Options by
written notification to Medicore or any such successor or surviving entity
within five (5) days of the redemption notification.
(b) Fair Market Value means the closing price of a share of
Medicore common stock on the principal securities exchange on which such
shares are traded on the day immediately preceding the date as of which Fair
Market Value is being determined, or on the next preceding date on which such
shares are traded if no shares were traded on such immediately preceding day;
or if the shares are not traded on a securities exchange, Fair Market Value
shall be deemed to be the average of the high bid and low asked prices of the
shares in the over-the-counter market on the day immediately preceding the
date as of which Fair Market Value is being determined or on the next
preceding date on which such high bid and low asked prices were recorded as
reported by NASDAQ or such other quotation system or medium. If the shares
are not publicly traded, Fair Market Value shall be determined by the Board.
In no case shall Fair Market Value be less than the par value of a share, and
in no event shall Fair Market Value be determined with regard to restrictions
other than restrictions which, by their terms, will never lapse.
11. Registration and Piggy-Back Rights.
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(a) Medicore grants and Xxxxxxxx shall have the right immediately
upon his Election Notice and for a period of two years thereafter to demand
that Medicore register, on Form S-8 or other available registration form
under the Securities Act of 1933, as amended (the "Act") or on Form I-A or
other available qualified exemption form from registration under the Act
(hereinafter collectively referred to as "Registration") in whole or in part
(but not fewer than 50% of his Medicore Shares) the Medicore Shares he
obtains in lieu of his Lump Sum Payment as provided in Section 8 ("Demand
Registration"). Medicore shall pay all costs and expenses of such
Registration, excluding fees and expenses of counsel for and other
professionals advising Xxxxxxxx, and underwriting discounts, commissions or
expenses of Xxxxxxxx with respect to the sale of the Medicore Shares.
Medicore shall also register Xxxxxxxx'x Xxxxxxxx Shares in those
jurisdictions in which Xxxxxxxx expects to sell his Medicore Shares; provided
however, that Medicore shall not be required to qualify to do business in
such jurisdiction or commit to a general consent to service of process within
the jurisdiction.
(b) For a period of three years from any Xxxxxxxx Election Notice,
Medicore shall notify Xxxxxxxx of any Medicore proposed Registration of
Medicore's securities by Medicore. If Xxxxxxxx notifies Medicore within
thirty (30) days of such Medicore notification that he desires to have all or
any part of his Medicore Shares (but not fewer than 50% of his Medicore
Shares) covered by any such Registration, then Medicore shall use its best
efforts to include or cause its underwriter to include the specified number
of Medicore Shares in such Registration. If any of the Medicore Shares is
covered by such Registration, Xxxxxxxx shall be obligated to pay fees and
expenses of Xxxxxxxx'x counsel and other professionals incurred in connection
therewith, underwriting discounts, commissions and expenses, if any,
applicable to his Medicore Shares, and his pro rata share of the Registration
fees.
(c) In the case of a Registration pursuant to this Section 11,
Medicore (i) will keep Xxxxxxxx advised as to the initiation and progress of
proceedings for such Registration and as to the completion thereof, and (ii)
at its expense, subject to the limitations as provided above, will, with
respect to a Demand Registration only, keep such Registration effective for a
period of at least nine months from the initial effective date of the
Registration. Xxxxxxxx agrees to provide such information to Medicore as is
reasonably requested by Medicore which Medicore believes is necessary in
order for Medicore to register the Medicore Shares, and Xxxxxxxx shall
execute such documents, certificates and other instruments as Medicore
reasonably determines is necessary or appropriate in connection therewith.
(d) Medicore, at its expense, shall furnish to Xxxxxxxx such
reasonable number of prospectuses, offering circulars or other documents
incident to any Registration referred to in this Section 11 as Xxxxxxxx from
time to time may reasonably request.
(e) Subject to compliance with applicable securities laws, Xxxxxxxx
may transfer his Medicore Shares with the Registration rights attached
provided he notifies Medicore in writing with respect to the identity of the
new holder of the Medicore Shares with the Registration rights attached. The
Registration rights may not be transferred separately from the Medicore
Shares. Medicore may legend the certificates evidencing the Medicore Shares
which have Registration rights attached to provide that before the Medicore
Shares may be transferred with the Registration rights attached, the holder
shall notify Medicore in writing as to the identity of the new holder.
Notwithstanding anything herein to the contrary, failure to so notify
Medicore shall not affect the transfer of the Medicore Shares, nor be grounds
for Medicore to refuse to transfer the Medicore Shares.
(f) Medicore may, if it elects to do so in its sole and absolute
discretion, elect to register shares of its authorized and unissued common
stock, and/or shares of common stock owned by other stockholders of Medicore
in any Registration pursuant to which the Medicore Shares are registered.
(g) Medicore shall not be required to file more than one
Registration pursuant to Xxxxxxxx'x exercise of his Demand Registration
right. In the event of transfer by Xxxxxxxx of all or part of his Medicore
Shares, the Demand Registration right may be so exercised by a majority in
interest of the Medicore Shares.
12. Anti-Dilution Provisions. The following adjustments apply to the
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number of Medicore Shares obtainable by Xxxxxxxx at his election in lieu of
the Lump Sum Payment as provided by Section 8 of this Agreement.
In case Medicore shall at any time after the date of this Agreement:
12.1 pay a dividend or make a distribution in shares of common
stock; or
12.2 subdivide or combine its outstanding shares of common stock;
or
12.3 reclassify or change its outstanding shares of common stock
(other than a change in the par value to no par value or as a result of a
subdivision or combination) or consolidate with or merge into another
corporation (other than a consolidation or merger in which Medicore is the
surviving corporation and which does not result in any reclassification or
change of the outstanding shares of common stock, except a change as a result
of a subdivision or consolidation of such shares or a change in par value) or
sell or convey to another corporation substantially all of its property; or
12.4 make any distribution of its assets to holders of its common
stock as a liquidating or partial liquidating dividend;
then the Medicore Shares shall include those additional shares of
common stock to which Xxxxxxxx would have been entitled had he elected the
option to acquire the Medicore Shares in lieu of the Lump Sum Payment and
such Medicore Shares were then outstanding on the record date for the
determination of those security holders entitled to such distribution; and
further, with respect to any asset distribution or reclassification as
provided herein, then Xxxxxxxx shall be entitled to receive the amount of
such dividend, distribution and/or assets (or at the option of Medicore, a
sum equal to the value of any such assets at the time of such distribution as
defined by the Board in good faith) which would have been payable
to him had he been the holder of record of the Medicore Shares on the record
date for determination of those entitled to such distribution.
Medicore shall maintain appropriate reserves to ensure the
availability of additional funds, assets and shares, and the timely
performance of these anti-dilution provisions of this Section 11.
13. Full Settlement. Medicore's obligation to make the payments
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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 Medicore may have against
Xxxxxxxx or others. In no event shall Xxxxxxxx be obligated to seek other
employment or take any other action by way of mitigation of the amounts
payable to him under any of the provisions of this Agreement, and such
amounts shall not be reduced, regardless of whether Xxxxxxxx obtains other
employment.
14. Insurance. Medicore shall during the Term maintain universal and
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term life insurance in the aggregate face value amount of $1,600,000,
insuring the life of Xxxxxxxx, in amounts and combinations of universal,
whole life, term or other such life insurance to be determined by and between
Medicore and Xxxxxxxx, and the ownership and beneficiaries to be those
persons and/or entities as directed and designated from time to time in
writing by Xxxxxxxx. Medicore shall provide Xxxxxxxx with documentary proof
of the purchase and maintenance of said insurance policies on Xxxxxxxx'x
life. Alternatively, Xxxxxxxx has the right to purchase and maintain such
life insurance policies and pay for the same, and Medicore shall pay the
premiums for such directly to Xxxxxxxx.
15. Vacation. Xxxxxxxx shall be entitled to no less than four weeks
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vacation per annum and other days away from his employment during the Term in
accordance with the policies and procedures of Medicore from time to time in
effect.
16. Indemnification. To induce Xxxxxxxx to accept employment and
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continue as an officer and director of Medicore and its subsidiaries,
Medicore agrees to indemnify and hold Xxxxxxxx harmless from any losses,
expenses (including attorneys' fees), judgments, fines, amounts paid in
settlement, actual and reasonably incurred by him in any such investigation,
action, suit or proceeding, including any appeal thereof, and any other costs
in connection with any proceeding or claim made against Xxxxxxxx involving
him by reason of his being or having been an officer and/or director of
Medicore and/or its subsidiaries, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of
Medicore and/or its subsidiaries, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Such indemnification shall be equivalent to that provided for pursuant to the
Florida statutes, in particular the Florida Business Corporation Act, Title
18, Section 607, et seq. This indemnification provision is not to otherwise
modify or limit in any way the indemnification provided by said corporate law
of the State of Florida or that provided in Medicore's certificate of
incorporation or by-laws, and is to provide Xxxxxxxx with the fullest
indemnification in accordance with the law.
17. Non-competition. It is agreed for a period of one (1) year from
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and after the termination of his employment either by Medicore or a successor
or surviving entity for Cause or upon termination by Xxxxxxxx without Good
Reason, each as provided herein, Xxxxxxxx shall not engage in any business
either as partner, owner, employee, 5% shareholder, agent or otherwise, at
any place within a radius of ten (10) miles of Medicore's medical products
operations in Hialeah, Florida, or any of the then existing and operational
dialysis facilities owned in part or in whole by DCA or which are managed by
DCA (the "DCA Facilities"), which business competes directly with any
business then being conducted at Medicore's medical products facility or at
the DCA Facilities at the time of such termination.
Notwithstanding any provision in this Agreement herein contained to
the contrary, Xxxxxxxx shall be permitted to do any one of the following:
(a) Xxxxxxxx shall be entitled to engage in any business with
anyone in competition with Medicore or DCA, as long as such activities are
located outside of the ten (10) mile radius of the medical products facility
or the DCA Facilities as set forth above in this Section 17, even if
termination is pursuant to a dishonest practice; and
(b) Xxxxxxxx shall be entitled to conduct any activities for an
eleemosynary organization.
18. Confidentiality. Other than for Wrongful Termination of Xxxxxxxx,
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termination by Xxxxxxxx for Good Reason, or termination of Xxxxxxxx in
connection with a Change in Control as provided herein above (i) Xxxxxxxx,
directly or indirectly, shall not discuss, use, patent, publish, copyright or
divulge to others, either during or for a period of two (2) years after the
Term or Date of Termination, any secret or confidential information of
Medicore or DCA, or their subsidiaries, whether or not acquired or developed
by Xxxxxxxx in the course of his employment hereunder; and (ii) Xxxxxxxx will
not induce any employee of Medicore or DCA, or their subsidiaries, to leave
or otherwise take any employee of Medicore or DCA, or their subsidiaries,
with him upon Xxxxxxxx'x termination of employment or for one (1) year
thereafter.
For purposes of this Agreement, the term "Confidential Information"
includes all information relating to the financial, business, management and
other affairs of and information about Medicore, Techdyne and DCA, except
shall not include information which (a) becomes generally available to the
public other than as a result of an unlawful or improper disclosure, (b) is
available to another party on a non-confidential basis absent any
restrictions or limitations prior to its disclosure to such party by
Xxxxxxxx, or (c) becomes available to another party on a non-confidential
basis from a source other than Xxxxxxxx which such source is entitled to make
the disclosure to the other party without restriction or limitation.
19. Attorneys' Fees. Medicore agrees to pay, as incurred, to the
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fullest extent permitted by law, all legal fees and expenses that Xxxxxxxx
may reasonably incur as a result of any contest relating to (provided that
Xxxxxxxx is the prevailing party with respect to such contest) the validity
or enforceability of or liability under, or otherwise involving, any
provision of this Agreement, together with interest on any delayed payment at
the applicable federal rate provided for in Section 7872(f)(2)(A) of the
Internal Revenue Code of 1986, as amended.
20. Notices. Any notice required or permitted to be given under this
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Agreement shall be sufficient if in writing and delivered personally or if
sent by registered mail to his residence in the case of Xxxxxxxx, or to its
principal office in the case of Medicore. Either party may change the
address where such communications must be sent by sending notice of such
change to the other party as provided herein.
21. Binding on Successors. This Agreement shall inure to the benefit
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of and be binding upon the parties hereto and their respective legal
representatives, heirs, assignees and/or successors in interest of any kind
whatsoever; provided, however, that Xxxxxxxx acknowledges and agrees that
except as explicitly provided in this Agreement, he cannot assign or delegate
any of his rights, duties, responsibilities or obligations hereunder to any
other person or entity.
22. Waiver of Breach. The waiver by Medicore or Xxxxxxxx of a breach
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by either party of any provision hereof shall not operate or be construed to
operate as a waiver by either party of any subsequent breach of any other
provision hereof.
23. Entire Agreement. This instrument contains the entire final
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agreement of the parties with respect to, and supersedes any and all prior
agreements between the parties hereto, both oral and written, concerning the
subject matter hereof and may not be amended or otherwise changed orally, but
only by an agreement in writing and signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.
24. Governing Law. This Agreement shall be governed and construed
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pursuant to the laws of the State of Florida, without giving effect to
conflicts of laws principles.
25. Severability. If any provision of this Agreement is held by a
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court of competent jurisdiction to be invalid or unenforceable, the remainder
of the terms and provisions of this Agreement shall remain in full force and
effect and shall in no way be affected or invalidated.
26. Independent Counsel. Medicore and Xxxxxxxx agree that each of them
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have been, or were advised and fully understand that they are entitled to be,
represented by independent legal counsel with respect to all matters
contemplated herein, from the commencement of negotiations at all times
through the execution hereof.
27. Board Approval. By execution of this Agreement, Medicore
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acknowledges that this Agreement has been reviewed and adopted by a
resolution approved by a majority of the members of the Board.
[signatures on following page]
IN WITNESS WHEREOF, MEDICORE has caused this Agreement to be executed in
its corporate name by an authorized officer and its corporate seal to be
hereto affixed, and XXXXXX X. XXXXXXXX has affixed his signature, all as to
the date and year first above written.
MEDICORE, INC. XXXXXX X. XXXXXXXX
/ Xxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxxxx
By:------------------------------- By:-----------------------------------
XXXXXX X. XXXXX, Vice President XXXXXX X. XXXXXXXX
(Corporate Seal)
