EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") dated February 5, 1996, is entered
into by and between American Blood Institute, Inc., a Delaware corporation, AKA
SeraCare (the "Company") and Xxxxx Xxxxx (the "Employee").
l. EMPLOYMENT AND EFFECTIVENESS. The Company hereby employs the
Employee, and the Employee accepts employment, as of the date first set forth
above (the "Commencement Date"), under the terms and conditions of this
Agreement.
2. TERM. The employment of the Employee pursuant to this Agreement shall
begin as of the Commencement Date and shall continue to and through the date
which is the third anniversary of the Commencement Date (the "Employment Term"),
unless terminated earlier as provided herein.
3. POSITION AND DUTIES. The Employee shall be employed as Chairman of
the Board, President, and Chief Executive Officer and shall have the duties,
responsibilities and authority as may from time to time be assigned by the
Company's Board of Directors that are consistent with and normally associated
with such positions. The Employee shall devote sufficient amounts of his
business time, effort and energies exclusively to the business of the Company to
fulfill the duties of his office. Employee shall not be employed by or act in
any capacity on behalf of any company which competes with the Company's plasma
collection business and shall not serve as an active principal or director or
officer or employee of any other company or entity without the prior written
consent of the Board of Directors, except that the Employee may serve as a
director or officer of any trade association, civic, educational or charitable
organization without such consent. The Employee shall also serve without
additional compensation as an officer and director of the Company and any of its
subsidiaries, if so elected or appointed, but if not so elected or appointed the
compensation hereunder shall in no way be affected. The Employee shall devote
his or her best efforts to advancing the interests of the Company.
4. COMPENSATION AND BENEFITS.
(a) During the Employment Term, the Company shall pay the Employee a
base salary at the annual rate of seventy-five thousand dollars ($75,000)
(the "Base Salary"), payable in accordance with the normal payroll
practices established by the Company. The Employee shall be entitled to
such increases in the Base Salary as may be determined from time to time by
the Company's Board of Directors or pursuant to its delegation. If the
Base Salary is increased during the Employment Term, the new salary shall
thereafter constitute the "Base Salary" for purposes of this Agreement.
(b) In addition to Base Salary, the Employee shall be entitled to the
following stock option grants:
(i) Options to purchase 56,147 shares of common stock of the
Company for a calculated price which is the mean average between $.74
and the weighted average of the closing bid price for the Company's
common stock for the thirty trading days prior to the vesting date.
The vesting date shall be an anniversary date of January 24 and,
contingent upon the Company achieving the performance criteria set
forth in section (v) below, the options will vest one-third each year
beginning on January 24, 1997 and shall remain excercisable by
Employee for a period of five (5) years from the vesting date.
-1-
(ii) Options to purchase 50,000 shares of common stock of the
Company for the price of $1.00 per share which shall vest on the one
year anniversary of the date of this Agreement in 1997, contingent
upon the Company achieving the performance criteria set forth in
section (v) below, and shall remain excercisable by Employee for a
period of five (5) years from the vesting date.
(iii) Options to purchase 50,000 shares of common stock of the
Company for the price of $2.00 per share which shall vest on the
second year anniversary of the date of this Agreement in 1998,
contingent upon the Company achieving the performance criteria set
forth in section (v) below, and shall remain excercisable by Employee
for a period of five (5) years from the vesting date.
(iv) Options to purchase 50,000 shares of common stock of the
Company for the price of $3.00 per share which shall vest on the third
year anniversary of the date of this Agreement in 1999, contingent
upon the Company achieving the performance criteria set forth in
section (v) below, and shall remain excercisable by Employee for a
period of five (5) years from the vesting date.
(v) The options granted in sections (i), (ii), (iii), and (iv)
above shall vest only if Employee is an employee of the Company on the
date the options are to vest and then only if the Company has achieved
the projected operating results as reflected in the Five Year Post
Emergence Forecast, a copy of which is attached hereto. However, if
the Company fails to obtain the outside funding for the acquisition
centers in a timely fashion, then the calculation of the performance
criteria will be made utilizing the projected results of the base six
centers for the year (which includes corporate overhead) plus a pro-
rata calculation of the projected operating results of the acquisition
centers for the year based upon the percentage of the outside
secondary financing actually received by the Company compared to the
projected financing. For example, if the projections contemplate the
acquisition of 12 centers during year one utilizing outside financing
of $2,400,000 ($200,000 per center) and only $1,200,000 or 504 is
actually funded, then the performance target for the option vesting
will equal 100% of the projected operating results from the six
centers ($365,556), plus 50% of the one year projected operating
results of the projected acquisition centers ($50% x $450,198 =
$225,099), or a total of $590,655. If any of the options do not vest
on the vesting date, such option rights shall terminate immediately
and be of no further effect.
(vi) Options to purchase 100,000 shares of common stock in the
Company for the price of $1.00 per share, such options to vest upon
the execution of this Agreement and remain in effect for a period of 5
years from such date.
(vii) If the Company is sold, merged into, or consolidated with
another entity, or the Company is substantially reorganized by a 50%
or more change in ownership (exclusive of the conversion of Debtors
Notes), and either Employee s position, duties, or compensation is
reduced, then all options granted under this Agreement shall become
immediately vested and exercisable.
(c) The Employee shall be eligible to participate in other employee
benefit plans maintained by the Company during the Employment Term, and to
receive all fringe benefits, for which his or her status and level of
employment qualify in accordance with the Company's usual
-2-
policies and arrangements and the terms of such plans, policies and
arrangements. Such benefits and plans may include vacation pay, medical
insurance programs and retirement programs.
(d) The Company will pay to or on behalf of Employee, the costs, up
to a maximum of $10,000 per year, of Employee's Blue Cross/ Blue Shield
medical insurance coverage and a term life insurance policy in the face
amount of $500,000.
5. TERMINATION. This Agreement shall terminate upon the earlier of the
following:
(a) The date provided under the provisions of Section 2 hereof.
(b) Upon the determination by the Board of Directors that good cause
exists to justify the termination of the Employee for gross misconduct.
For purposes of this Agreement, "gross misconduct" shall be defined as
theft, dishonesty, alcohol or drug abuse, unethical business conduct, gross
negligence, commission of an illegal act detrimental to the Company or its
reputation, fraud, or a material breach of this Agreement by Employee.
Upon any termination under this subsection (b) Employee shall be paid an
amount equal to thirty days of his base salary, and no other compensation
or benefits other than the receipt of his vested options.
(c) At the Company's option, upon the occurrence of a physical or
mental condition which prevents the Employee from performing the duties for
which he or she is responsible for a period of 120 consecutive days or 180
days in total during the term of this Agreement,
(d) Upon the determination by the Board of Directors that Employee
has engaged in acts detrimental to the Company, including without
limitation insubordination, failure to comply with instructions, and
actions or associations which materially and adversely affect the Company's
reputation, business, stock price, or ability to raise capital, and
Employee has failed to cease or correct such actions within ten (10) days
of his receipt of written notice from the Board of Directors. In the event
of a termination under this subsection (d) Employee shall be entitled to
severance pay equal to his base salary amount for the lesser of twelve
months or the remaining term of this Agreement and his vested options, and
no other compensation or benefits.
(e) Upon Employee's death, voluntarily ceasing to perform his
duties,other than by reason of a disability under subsection (d), or
agreement to terminate this Agreement. Except as specified above, all
rights to compensation and options which have not vested under this
Agreement shall cease upon the termination of this Agreement.
6. COVENANTS.
(a) The Employee shall not, during the term of the employment or at
any time thereafter, directly or indirectly, publish or disclose to any
person, firm, corporation or other entity, whether or not a competitor of
the Company, or use other than on behalf of the Company any confidential
information concerning the assets, business or affairs of the Company
unless required by a court of law or governing governmental authority
pursuant to a specific right to know. Confidential information includes,
without limitation, any trade secrets, sources of supply, costs, pricing
practices, customer lists, financial data, employee information, strategic
plans, or organizational data.
(b) The Employee shall not during the Employment Term and for a
period of two (2) years thereafter, engage in or be interested in (as
owner, partner, shareholder, employee, director, officer, agent, consultant
or otherwise, except as a less than 1% shareholder of a publicly listed
-3-
company) with or without compensation, any business which is competitive
with the business being conducted by the Company at any time during the
Employee's employment, including any business which owns or operates a
blood collection center within 50 miles of any of the Company's collection
centers. The Employee shall not during this time period, directly or
indirectly, solicit or contact any employee of the Company, with the view
to induce or encourage such employee to leave the employ of the Company for
the purpose of being hired by the Employee, an employer affiliated with the
Employee or any competitor of the Company.
(c) Employee agrees that all files, records, documents and items
relating to the Company's business, whether prepared by Employee or others,
are the property of the Company and, upon termination of this Agreement or
Employee's employment, Employee shall promptly return to the Company any
and all such documents and any other property of the Company which is in
the custody or control of Employee.
(d) Employee agrees that during the term of this Agreement and
afterwards, Employee shall not, in any way or by any means, disrupt,
damage, disparage, impair or interfere with the Company's business or its
reputation.
(e) The Employee acknowledges that the provisions of this Section 5
are reasonable and necessary for the protection of the Company and that the
Company will be irrevocable damaged if such covenants are not specifically
enforced. Accordingly, the Employee agrees that, in addition to any other
relief or remedies available to the Company in the form of actual or
punitive damages, the Company shall be entitled to seek and obtain
injunctive relief from a court of competent jurisdiction for the purposes
of restraining the Employee from any actual or threatened breach of such
covenants.
7. INDEMNIFICATION. The Company shall indemnify, defend and hold the
Employee harmless, to the maximum extent permitted by law, from any and all
claims, litigation or suits arising out of the activities of the Employee
reasonable taken in the performance of the duties hereunder, including all
reasonable expenses and professional fees that may relate thereto. In addition,
the Company agrees to seek appropriate directors and officers liability
insurance for errors and omissions of such type and in such amount as is
customary for similarly situated companies, if available at a reasonable cost.
8. ARBITRATION. Any controversy or dispute between the Company and
Employee involving the construction, application or breach of any of the terms,
provisions or conditions of this Agreement shall be resolved by binding
arbitration in accordance with the agreement of the parties or, if no agreement
is reached, by the rules of the American Arbitration Association then in effect
(the "AAA Rules"). Such arbitration shall take place in Los Angeles, California
and shall be conducted by three arbitrators selected from a panel of arbitrators
experienced in such disputes as provided by the AAA, with one arbitrator
selected by each party and the third arbitrator selected by the other two
arbitrators within the time limits established by the AAA Rules. The cost of
such arbitration, including the associated attorneys' fees, arbitrator fees,
filing fees, AAA fees, and other costs shall be borne by the losing party.
9. EMPLOYEE'S REMEDIES. In the event the Company terminates Employee's
employment other than pursuant to the provisions of Section 5 of this Agreement,
the Employee's complete and exclusive remedy shall be the payment in cash,
within 30 days of the termination, of the unpaid balance of the full
compensation which would be due under the full term of this Agreement,
-4-
including base salary and options, and the continuation of Employee's then
current medical and insurance benefits for a period of twelve months from the
date of the termination.
10. GENERAL TERMS.
(a) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California applicable to
agreements made and to be performed in that State.
(b) NOTICE. Any notice or other communication under this Agreement
shall be in writing and shall be considered given when delivered
personally, or one day after being sent by commercial overnight carrier, or
three business days after mailing by U. S. registered mail, return receipt
requested, to the parties at the following addresses or at such other
address as a party may specify by notice to the other.
If to the Employee: Xxxxx Xxxxx
00000 Xxxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
If to the Company: American Blood Institute, Inc.
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Board of Directors
with a copy to: Xxxxxx Xxxxx, Inc.
0000 Xxxxxx xx xxx Xxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
(c) ENTIRE AGREEMENT: AMENDMENT. This Agreement shall supersede all
existing agreements, whether written or oral, between the Employee and the
Company relating to the terms of the Employee's employment with the Company. It
may not be amended except by a written agreement signed by both parties.
(d) WAIVER. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver thereof
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
(e) ASSIGNMENT. Subject to the limitation below, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, representatives, successors and assigns. This Agreement shall
not be assignable by the Employee, and shall be assignable by the Company only
to any corporation or other entity resulting from the reorganization, merger or
consolidation of the Company with any other corporation or entity or any
corporation or entity to or with which the Company's business or substantially
all of its assets may be sold, exchanged or transferred, and it must be so
assigned by the Company to, and accepted as binding upon it by, such other
entity in connection with any such reorganization, merger, consolidation, sale,
exchange or transfer.
(f) HEADINGS. Section headings are used herein for convenience of
reference only and shall not affect the meaning of any provision of this
Agreement.
(g) WITHHOLDING. Employee authorizes Company to withhold and/or deduct
from his compensation (including, without limitation, salary and wages),
deductions to recover any amounts
-5-
loaned by the Company to Employee or paid on Employee's behalf which, under the
terms of said loan or payment, must be repaid to the Company including loans of
money and the value of Company property taken but not returned by Employee.
(h) SEVERABILITY. If any provision of this Agreement is found to be
invalid or unenforceable for any reason, the remaining provisions shall continue
in full force and effect and, to the extent required, shall be modified to
preserve the validity and intent of this Agreement.
(i) ATTORNEYS' FEES; In the event of any litigation or arbitration
between or among the parties Hereto arising from or relating to this Agreement,
the prevailing party shall be entitled to recover its costs, including
reasonable attorneys' fees, incurred in connection with such litigation or
arbitration. Any judgment shall include an provision which shall entitle the
judgment creditor to recover its costs, including reasonable attorneys' fees,
incurred to enforce the judgment.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
American Blood Institute, Inc.
By: /s/ XXXXX XXXXXXX
---------------------------------
Xxxxx Xxxxxxx
Title: Executive Vice President
Employee
/s/ XXXXX XXXXX
---------------------------------
Xxxxx Xxxxx
-6-
