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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Agreement is made by and between LifeQuest Medical, Inc. (the
"Company"), located at 00000 Xxxx Xxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxx
00000, and Xxxxxxx X. Xxxxxxxxx ("Employee"), whose address is 00000 Xxxxx
Xxxxx, Xxx Xxxxxxx, Xxxxx 00000.
ARTICLE 1
COMPENSATION AND TERM
1.01 Basic Compensation. As compensation for the services to be
rendered hereunder, the Company shall pay Employee a salary of $12,500 per
month ("Base Salary"), which shall be payable in at least monthly installments
during the term of this Agreement. Such basic compensation shall be subject to
annual review for possible increase by the Compensation Committee of the
Company based upon Employee's performance, as determined at the discretion of
the Company's Compensation Committee based in part upon the achievement of
goals agreed upon by the Company and Employee, the performance of the Company's
stock price and the earnings of the Company. In addition, the Company and the
Employee have entered into a NonQualified Stock Option Agreement of even date
herewith under the Company's 1989 Stock Option Plan pursuant to which the
Company has granted to Employee non-qualified stock options to receive up to
50,000 shares of Common Stock, $.001 par value, of the Company upon the terms
and conditions set forth in such agreement.
1.02 Signing Bonus. On the date of execution of this Agreement, or as
soon thereafter as practicable, the Company shall pay to Employee by Company
check a one time signing bonus in the amount of $25,000.
1.03 Incentive Compensation. Employee shall have the opportunity to
earn an annual cash bonus, the amount of which shall be determined by the
Compensation Committee of the Company and shall be based upon Employee's
performance, as determined at the discretion of the Company's Compensation
Committee based in part upon the achievement of goals agreed upon by the
Company and Employee, the performance of the Company's stock price and the
earnings of the Company. Such bonus shall be paid by the Company within 90 days
after the end of each calendar year.
1.04 Term. Subject to earlier termination pursuant to Article 5
hereof, this Agreement shall have a term commencing as of the execution date of
this Agreement and ending on March 31, 2001.
ARTICLE 2
DUTIES OF EMPLOYEE
2.01 Duties. The Company hereby employs Employee to serve as Executive
Vice President and Chief Financial Officer of the Company, or in such other
capacities as the Board of Directors of the Company may direct from time to
time, and Employee agrees to perform the duties of such offices as set forth in
the bylaws of the Company or as the Board of Directors of the Company may
direct from time to time.
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2.02 Other Activities. During the term of this Agreement, Employee
shall devote his full-time efforts to his duties hereunder.
ARTICLE 3
EMPLOYEE BENEFITS
3.01 Medical and Dental Benefits. The Company agrees to include
Employee in any hospital, surgical, medical, disability and dental benefit
plan(s) that it may adopt for its employees.
3.02 Other Benefits. Employee shall be entitled to reasonable and
customary holidays and other benefits that are available to senior management
or key employees, including three weeks paid vacation.
ARTICLE 4
OBLIGATIONS OF THE COMPANY
4.01 Office and Support Staff. The Company shall provide Employee with
such support services as are reasonable to Employee's position or required for
the performance of his duties.
ARTICLE 5
TERMINATION OF EMPLOYMENT
5.01 Termination by the Company for Cause. The Company may at its
option terminate this Agreement for Cause (as hereinafter defined) by giving 10
days written notice of termination to Employee.
The term "Cause" shall be limited to the occurrence of the following
events, as determined by the Board of Directors of the Company in its sole
judgment: (i) Employee breaches any of the material terms of this Agreement and
fails to remedy such breach within 10 days following written notice by the
Company to Employee of such breach; (ii) Employee is convicted of a felony;
(iii) Employee fails, after at least one written warning from the Company, to
perform duties assigned under this Agreement (other than a failure due to death
or physical or mental disability); (iv) Employee intentionally engages in
conduct which is demonstrably and materially injurious to the Company; (v)
Employee commits fraud or theft of personal or Company property from Company
premises; (vi) Employee falsifies Company documents or records; (vii) Employee
engages in acts of gross carelessness or willful negligence to endanger life or
property on Company premises; (viii) Employee engages in sexual harassment
involving employees of the Company or on premises of the Company or with
respect to business of the Company; (ix) Employee uses, distributes, possesses
or is under the influence of illegal drugs, alcohol or any other intoxicant on
Company premises; or (x) Employee intentionally violates state, federal or
local laws and regulations relating to the business of the Company.
5.02 Termination on Grounds Other Than for Cause. This Agreement shall
terminate immediately on the occurrence of any one of the following events:
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(a) The occurrence of circumstances that make it impossible or
impracticable for the business of the Company to be continued.
(b) The death of Employee.
(c) The loss of legal capacity by Employee.
(d) Insolvency of the Company.
(e) The continued incapacity on the part of Employee to perform his
duties for a continuous period of 60 days, unless waived by the Company,
and a reasonable determination by the Company that Employee has not
performed his duties during such period.
5.03 Option to Terminate if Employee Permanently Disabled. If Employee
becomes permanently disabled because of sickness, physical or mental
disability, or any other reason, so that it reasonably appears that Employee
will be unable to perform the essential aspects of his duties under this
Agreement, the Company shall have the option to terminate this Agreement
immediately by giving written notice of termination to Employee.
5.04 Effect of Termination on Compensation. In the event of the
termination of this Agreement prior to the completion of the term of employment
specified in it pursuant to Section 5.01, 5.02 or 5.03, Employee shall be
entitled to the compensation earned by Employee to the date of termination as
provided in the Agreement, computed pro rata up to and including that date, and
Employee shall be entitled to no further compensation after the date of such
termination.
5.05 Company's Option to Terminate. This Agreement may be terminated
by the Company immediately at any time without Cause upon notice given by the
Company to the Employee. In the event the Company so elects to terminate this
Agreement without Cause, the Company shall continue to pay to the Employee his
monthly base salary (subject to standard deductions) through the lesser of (a)
the balance of the term of this Agreement or (b) twelve (12) months, whereupon
the Company shall have no further obligations to Employee; provided, however;
in the event that the Company elects to require Employee to comply with the
restrictions of Section 6.08 for any period (the "Uncompensated Period") of
time during which Employee is not receiving from the Company salary or
termination payments (the Company shall advise Employee of such election at the
time of termination), then the Company shall pay Employee on the first day of
each calendar month during the Uncompensated Period his then effective current
monthly salary.
ARTICLE 6
PROPRIETARY PROPERTY; CONFIDENTIAL
INFORMATION; NON-COMPETITION
6.01 Duties. Employee understands and agrees that during the term of
this Agreement Employee's duties will include the conception of improvements
and inventions (whether or not ultimately issuing as Letters Patent in any
country), the creation of confidential
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information protected by the Company as trade secrets and the authoring of
"works" as defined under the copyright laws of the United Xxxxxx xx Xxxxxxx
xxxxx xx 00 Xxxxxx Xxxxxx Code. Such information is collectively referred to in
this Agreement as "Proprietary Information".
6.02 Ownership. Employee understands and agrees that for all
Proprietary Information created within the scope of Employee's employment, the
Company shall own all right, title and interest thereto. In the case of works
authored or created by Employee, such works are considered a "work made for
hire" under 00 Xxxxxx Xxxxxx Code Section 101 - the copyright laws. All
Proprietary Information, if any, created by Employee prior to his employment
with the Company, and in which Employee claims ownership, is shown in Schedule
6.2 attached hereto.
6.03 Notice and Assistance. Employee shall give adequate written
notice to the Company as soon as practicable of all Proprietary Information
created by Employee during Employee's employment with the Company, assist the
Company in evaluating the Proprietary Information for patent, trade secret and
copyright protection and sign all documents and do all things necessary at the
expense of the Company to assist the Company in the protection, development,
marketing or transfer of such Proprietary Information.
6.04 Assignment. Employee hereby assigns and agrees to assign all
right, title and interest into such Proprietary Information to the Company or
its nominee. At the request of the Company, whether during or after the
termination of Employee's employment, Employee shall timely execute or join in
executing all papers or documents required for the filing of patent
applications and copyright registrations in the United States of America and
such foreign countries as the Company may in its sole discretion select, and
shall assign all such patent applications and copyrights to the Company or its
nominee, and shall provide the Company or its agent or attorneys with all
reasonable assistance in the preparation and prosecution of patent application
and copyright registrations, including drawings, specifications, and the like,
all at the expense of the Company, and shall do all that may be necessary to
establish, protect or maintain the rights of the Company or its nominee in the
inventions, patent applications, Letters Patent and copyrights in accordance
with the spirit of this Agreement.
6.05 Confidential Information. Employee agrees to keep confidential
all information protected by the Company as trade secrets during the term of
this Agreement (including any leaves of absence) and will neither use nor
disclose the confidential information without written authorization by the
Company for ten years thereafter. For the purposes of this Agreement, such
confidential information shall include information set forth in any application
for Letters Patent unless and until such information is ultimately published.
The Company and Employee mutually agree that the following types of information
shall not be protected by this Agreement:
(a) Information already in the public domain at the time Employee
received it;
(b) Information which although disclosed in confidence to Employee is
later disseminated by the Company into the public domain;
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(c) Information which although received in confidence by Employee is
subsequently disseminated into public domain by a third party who has not
breached any duty to any other party in disseminating such information;
and
(d) Information given by the Company in confidence to Employee which
Employee is expressly authorized in writing by the Company to use or
disclose thereafter.
Employee also understands and agrees that he will maintain in confidence all
information known to him by reason of his employment even if such information
is included in a redacted deposit of a work filed with an application for
copyright registration, if such deposit has been abridged in order to protect
the confidentiality of the information deposited with the Copyright Office. For
purposes of this Agreement, a trade secret "...may consist of any formula,
pattern, device or compilation of information which is used in one's business,
and which gives him an opportunity to obtain an advantage over competitors who
do not know or use it. It may be a formula for a chemical compound, a process
of manufacturing, trading or preserving materials, a pattern for machine or
other device, or a list of customers..." as commonly interpreted by the courts
of the State of Texas. Upon the termination of this Agreement, regardless of
how such termination may be brought about, Employee shall deliver to the
Company any and all documents, instruments, notes, papers or other expressions
or embodiments of Proprietary Property or confidential information which are in
Employee's possession or control.
6.06 Publicity. During the term of this Agreement and for a period of
ten years thereafter, Employee shall not, directly or indirectly, originate or
participate in the origination of any publicity, news release or other public
announcements, written or oral, whether to the public press or otherwise,
relating to this Agreement, to any amendment hereto, to Employee's employment
hereunder or to the Company, without the prior written approval of the Company.
6.07 Fiduciary Relationship. Employee, by virtue of his high position
of trust and reliance on him by the Company, understands that Employee enjoys a
fiduciary relationship with the Company in carrying out his obligations under
this Section 6. Accordingly, Employee agrees to honor his obligations under
this Agreement by conducting himself with the highest degree of fairness and
trust toward the Company.
6.08 Non-Competition. In consideration of the benefits of this
Agreement, including Employee's access to and limited use of proprietary and
confidential information of the Company, as well as training, education and
experience provided to Employee by the Company directly and/or as a result of
work projects assigned by the Company with respect thereto, Employee hereby
covenants and agrees that during the term of this Agreement and for a period of
two years following termination of this Agreement except pursuant to Section
5.02(a) or (d), Employee shall not, directly or indirectly, as proprietor,
partner, stockholder, director, officer, employee, consultant, joint venturer,
investor or in any other capacity, engage in, or own, manage, operate or
control, or participate in the ownership, management, operation or control, of
any entity which engages, in the United States or Canada, in any business
activity in which the Company participates during Employee's employment with
the Company; provided, however, the foregoing shall not prohibit Employee from
purchasing and holding as an investment not more than 5% of any class of
publicly traded securities, or 10% of any class of
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other securities, of any entity which is engaged in the design, manufacturing,
marketing, sale or distribution of minimally invasive surgery products, so long
as Employee does not participate in any way in the management, operation or
control of such entity.
6.09 Judicial Reformation. Employee acknowledges that, given the
nature of the Company's business, the covenants contained in Section 6.08
establish reasonable limitations as to time, geographic area and scope of
activity to be restrained and do not impose a greater restraint than is
reasonably necessary to protect and preserve the goodwill of the Company's
business and to protect its legitimate business interests. If, however, Section
6.08 is determined by any court of competent jurisdiction to be unenforceable
by reason of its extending for too long a period of time or over too large a
geographic area or by reason of it being too extensive in any other respect or
for any other reason, it will be interpreted to extend only over the longest
period of time for which it may be enforceable and/or over the largest
geographic area as to which it may be enforceable and/or to the maximum extent
in all other aspects as to which it may be enforceable, all as determined by
such court.
6.10 Customer Lists; Non-Solicitation. In consideration of the
benefits of this Agreement, including Employee's access to and limited use of
proprietary and confidential information of the Company, as well as training,
education and experience provided to Employee by the Company directly and/or as
a result of work projects assigned by the Company with respect thereto,
Employee hereby further covenants and agrees that for a period of one year
following the termination of this Agreement, except pursuant to Section 5.02(a)
or (d), Employee shall not, directly or indirectly, (a) use or make known to
any person or entity the names or addresses of any clients or customers of the
Company or any other information pertaining to them, (b) call on, solicit, take
away or attempt to call on, solicit or take away any clients or customers of
the Company on whom Employee called or with whom he became acquainted during
his employment with the Company, nor (c) recruit, hire or attempt to recruit or
hire any employees of the Company.
6.11 Equitable Relief. In the event of a breach or a threatened breach
by Employee of any of the provisions contained in Section 6 of this Agreement,
Employee acknowledges that the Company will suffer irreparable injury not fully
compensable by money damages and, therefore, will not have an adequate remedy
available at law. Accordingly, the Company shall be entitled to obtain such
injunctive relief or other equitable remedy from any court of competent
jurisdiction as may be necessary or appropriate to prevent or curtail any such
breach, threatened or actual. The foregoing shall be in addition to and without
prejudice to any other rights that the Company may have under this Agreement,
at law or in equity, including, without limitation, the right to xxx for
damages.
ARTICLE 7
GENERAL PROVISIONS
7.01 Notices. All notices or other communications required under this
Agreement may be effected either by personal delivery in writing or by
certified mail, return receipt requested. Notice shall be deemed to have been
given when delivered or mailed to the parties at their respective addresses as
set forth above or when mailed to the last address provided in writing to the
other party by the addressee.
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7.02 Entirety of Agreement. This Agreement supersedes all other
agreements, either oral or in writing, between the parties to this Agreement,
with respect to the employment of the Employee by the Company. This Agreement
contains the entire understanding of the parties and all of the covenants and
agreements between the parties with respect to such employment.
7.03 Governing Law. This Agreement shall be governed by the laws of
the State of Texas and deemed performable in Bexar County, Texas.
7.04 Binding Agreement. This Agreement shall be binding upon all
parties hereto and their respective heirs, legal representatives and
successors.
EXECUTED effective the 1st day of April, 1998.
LIFEQUEST MEDICAL, INC.
By:
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Name:
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Title:
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XXXXXXX X. XXXXXXXXX
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SCHEDULE 6.2
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PROPRIETARY PROPERTY CLAIMED BY EMPLOYEE
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Proprietary Property Claimed:*
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* None, if left blank
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