EMPLOYMENT AGREEMENT
Exhibit 10.5
This Employment Agreement is made and entered into by and between MiMedx Group, Inc. (the
“Company”) and Xxxxxxx X. Xxxxxxxx (“Executive”)
as of May 16, 2008 (the “Effective Date”).
1. Position and Duties. Executive shall be employed by the Company as its Chief
Financial Officer reporting to Xxxxxx X. X’Xxxxxx and Xxxx X. Xxxxxx, Xx. the Chief Executive
Officer and Chief Financial Officer, respectively, of MiMedx Group, Inc., the parent corporation of
which the Company is a wholly owned subsidiary. Executive agrees to devote his full-time business
time, energy and skill to his duties at the Company. These duties shall include all those duties
customarily performed by a chief financial officer and the Executive’s services shall be performed
primarily at the Company’s offices, Tampa, Florida.
2. Term of Employment: Executive’s employment as an employee of the Company will be
for a two-year term, renewable for consecutive one-year terms upon mutual agreement of the parties.
However, subject to the terms and conditions hereof, such employment may be terminated by
Executive or the Company at any time, with or without good reason. Upon the termination of
Executive’s employment as an employee of the Company, for any reason, neither Executive nor the
Company shall have any further obligation or liability under this Agreement to the other, except
for the accrued rights of the Executive hereunder and as set forth in this paragraph and paragraphs
5 and 6 below.
3. Compensation: Executive shall be compensated by the Company for his services as
follows:
Base Salary: Executive shall be paid a monthly Base Salary of $12,500.00 per month
($150,000 on an annualized basis), subject to applicable withholding, in accordance with the
Company’s normal payroll procedures. Executive’s salary shall be reviewed on at least an annual
basis. In the event of such an increase, that increased amount shall become Executive’s Base
Salary. The parties acknowledge that Executive will be eligible as additional compensation of up
to 20% of the Base Salary if certain MiMedx objectives are achieved. Such objectives and metrics
to be mutually agreed upon and the achievement of those objectives shall be determined by the
Company’s Board of Directors.
4. Benefits: Executive shall have the right to participate in and to receive benefits
under any of the Company’s employee benefit plans, as such plans may be modified from time to time.
In addition, Executive shall be entitled to the benefits afforded to other members of senior
management.
5. Benefits Upon Termination: In the event of Executive’s voluntary termination from
employment with the Company, or in the event that Executive’s employment terminates as a result of
his death, Executive shall be entitled to no compensation or benefits from the Company other than
those earned under paragraph 3 above through the date of his termination or in the case of any
stock, vested through the date of his termination.
6. Benefits Upon Other Termination. Executive agrees that his employment may be
terminated by the Company at any time, with or without good reason. In the event of the
termination of Executive ‘s employment by the Company for the reasons set forth below, he shall be
entitled to the following:
(a) Termination for Good Reason: If Executive’s employment is terminated by the
Company for good reason as defined below, Executive shall be entitled to no compensation or
benefits from the Company other than those earned under paragraph 3.
For purposes of this Agreement, a termination “for good reason” occurs if Executive is
terminated for any of the following reasons:
(i) theft, dishonesty, or falsification of any employment or Company records;
(ii) conviction of a felony or any act involving moral turpitude;
(iii) consistent poor performance, as determined by the Board in its sole discretion;
(iv) improper disclosure of the Company’s confidential or proprietary information;
(v) any intentional act by Executive that has a material detrimental effect on the Company’s
reputation or business; or
(vi) any material breach of this Agreement, which breach, if curable, is not cured within
thirty (30) days following written notice of such breach from the Company.
(b) Termination Without Good Reason: If the Company (i) materially breaches this
Employment Agreement or (ii) requires the Executive to based at any office or location other than
that which the Executive initially is employed at within thirty days of this Employment Agreement,
except for travel reasonably required in the performance of the Executive’s responsibilities
consistent with practices in effect prior to the Effective Date, this shall constitute termination
without good reason. If Executive’s employment is terminated by the Company following the
Effective Date for any reason other than for good reason, Executive shall be entitled to the
following separation benefits:
(i) all accrued compensation and benefits through the date of termination including any option
grants that have been vested through that date; and
(ii) continued payment of Executive’s salary at his Base Salary rate together with applicable
fringe benefits (including any COBRA expense) as provided to other executive employees, less
applicable withholding, until the lesser of either (i) the end of the Term of Employment as set
forth in this Employment Agreement or (ii) six months. In no case shall this be less than six
months.
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(c) Change of Control: In the event the Executive’s employment is terminated during the term
hereof by either the Executive or the Company (not for good reason) after the occurrence of a
“Change of Control”, such termination shall be deemed to be a termination without good reason For
the purposes of this Agreement a “Change of Control” shall be deemed to occur upon any of the
following: (x) the acquisition, directly or indirectly,
following the Effective Date by any person (as such term is defined in Section 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended), in one transaction or a series of
related transactions, of securities of the Company representing in excess of fifty percent (50%) or
more of the combined voting power of the Company’s then outstanding securities if such person or
his or its affiliate(s) do not own in excess of 50% of such voting power on the Effective Date, or
(y) the date of the closing of a disposition by the Company (whether direct or indirect, by sale
of assets or stock, merger, consolidation or otherwise) of all or substantially all of its business
and/or assets in one transaction or series of related transactions, where the Company an affiliate
of the Company or a control person of the Company immediately prior to the transaction(s) in
question is not the controlling entity or person after such transaction(s).
Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred in the
event the Company forms a holding company as a result of which the holders of the Company’s voting
securities immediately prior to the transaction hold, in approximately the same relative
proportions as they hold prior to the transaction, substantially all of the voting securities of a
holding company owning all of the Company’s voting securities after the completion of the
transaction.
A Change in Control shall not be deemed to have occurred as a result of an initial public
offering of the common stock of the Company, or the creation or development of a public market for
the shares of common stock of the Company through a “reverse merger” into a public company or other
similar transaction.
7. Employee Inventions and Proprietary Rights Assignment Agreement: Executive agrees
to execute and abide by the terms and conditions of the Company’s standard Employee Inventions and
Proprietary Rights Assignment Agreement, which shall not be materially different from the form
attached as Exhibit A hereto.
8. Agreement Not To Compete Unfairly: Employee agrees that in the event of his
termination at any time and for any reason, she shall not compete with the Company in any unfair
manner, including, without limitation, using any confidential or proprietary information of the
Company to compete with the Company in any way.
9. Dispute Resolution: In the event of any dispute or claim relating to or arising
out of this Agreement (including, but not limited to, any claims of breach of contract, wrongful
termination or age, sex, race or other discrimination), Employee and the Company agree that all
such disputes shall be fully and finally resolved by binding arbitration conducted by the American
Arbitration Association in Atlanta, Georgia in accordance with its National Employment Dispute
Resolution rules, as those rules are currently in effect (and not as they may be modified in the
future). Employee acknowledges that by accepting this arbitration provision he is waiving any
right to a jury trial in the event of such dispute. Provided, however, that this arbitration
provision shall not apply to any disputes or claims relating to or arising out of the misuse or
misappropriation of trade secrets or proprietary information.
10. Interpretation: Executive and the Company agree that this Agreement shall be
interpreted in accordance with and governed by the laws of the State of Florida.
11. Successors and Assigns: This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. In view of the personal nature of the
services to be performed under this Agreement by Executive, he shall not have the right to assign
or transfer any of his rights, obligations or benefits under this Agreement, except as
otherwise noted herein.
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12. Entire Agreement: This Agreement constitutes the entire employment agreement
between Executive and the Company regarding the terms and conditions of his employment, with the
exception of (i) the agreement described in paragraph 8 and (ii) any stock or option agreements
between Executive and the Company. This Agreement (including the documents described in (i) and
(ii) herein) supersedes all prior negotiations, representations or agreements between Executive and
the Company, whether written or oral, concerning Executive’s employment by the Company.
13. Validity: If any one or more of the provisions (or any part thereof) of this
Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions (or any part thereof) shall not in any way be
affected or impaired thereby.
14. Modification: This Agreement may only be modified or amended by a supplemental
written agreement signed by Executive and the Company.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year written
below.
| MIMEDX GROUP, INC. | ||||||
| By: | /s/: Xxxx X. Xxxxxx, Xx.
|
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| /s/: Xxxxxxx X. Xxxxxxxx
|
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EXHIBIT A
EMPLOYEE INVENTION ASSIGNMENT
CONFIDENTIALITY AGREEMENT
CONFIDENTIALITY AGREEMENT
In consideration of, and as a condition of my employment with MiMedx Group, Inc., a Florida
corporation (the “Company”), I hereby represent to, and agree with the Company as follows:
1. Purpose of Agreement. I understand that the company is engaged in a continuous
program of research, development, production and marketing in connection with its business and that
it is critical for the company to preserve and protect its “proprietary information” (as defined in
Section 6 below), its rights in “inventions” (as defined in Section 2 below) and in all related
intellectual property rights. Accordingly, I am entering into this employee invention Assignment
and Confidentiality Agreement (this “Agreement”) as a condition of my employment with the Company,
whether or not I am expected to create inventions of value for the Company.
2. Disclosure of Inventions. I will promptly disclose in confidence to the Company
all (“Inventions”) defined as, improvements, designs, original works of authorship, formulas,
processes, compositions of matter, computer software programs, databases, mask works and trade
secrets that I make or conceive or first reduce to practice or create, either alone or jointly with
others, during the period of my employment, whether or not in the course of my employment, and
whether or not such Inventions are patentable, copyrightable or protectable as trade secrets.
17. Work for Hire; Assignment of Inventions. I acknowledge and agree that any
copyrightable works prepared by me within the scope of my employment are “works for hire” under the
Copyright Act and that the Company will be considered the author and owner of such copyrightable
works. I agree that all Inventions that (i) are developed using equipment, supplies, facilities or
trade secrets of the Company, (ii) result from work performed by me for the Company, or
(iii) relate to the Company’s business or current or anticipated research and development, will be
the sole and exclusive property of the Company and are hereby irrevocably assigned by me to the
Company.
18. Assignment of Other Rights. In addition to the foregoing assignment of Inventions
to the Company, I hereby irrevocably transfer and assign to the Company: (i) all worldwide patents,
patent applications, copyrights, mask works, trade secrets and other intellectual property rights
in any Invention; and (ii) any and all “Moral Rights” (as defined below) that I may have in or with
respect to any Invention. I also hereby forever waive and agree never to assert any and all Moral
Rights I may have in or with respect to any Invention, even after termination of my work on behalf
of the Company. “Moral Rights” mean any rights to claim authorship of an Invention, to object to or
prevent the modification of any Invention, or to
withdraw from circulation or control the publication or distribution of any Invention, and any
similar right, existing under judicial or statutory law of any country in the world, or under any
treaty, regardless of whether or not such right is denominated or generally referred to as a “moral
right”.
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19. Assistance. I agree to assist the Company in every proper way to obtain for the
Company and enforce patents, copyrights, mask work rights, trade secret rights and other legal
protections for the Company’s Inventions in any and all countries. I will execute any documents
that the Company may reasonably request for use in obtaining or enforcing such patents, copyrights,
mask work rights, trade secrets and other legal protections. My obligations under this paragraph
will continue beyond the termination of my employment with the Company for any reason or no reason,
provided that the Company will compensate me at a reasonable rate after such termination for time
or expenses actually spent by me at the Company’s request on such assistance. I hereby constitute
and appoint the Company as my agent and attorney in fact to execute and deliver any such
assignments or documents, including applications for patent or copyright protection that I fail or
refuse to execute and deliver, this power and agency being coupled with an interest and being
irrevocable.
20. Proprietary Information. I understand that my employment by the Company creates a
relationship of confidence and trust with respect to any information of a confidential or secret
nature that may be disclosed to me by the Company that relates to the business of the Company or to
the business of any parent, subsidiary, affiliate, customer or supplier of the Company or any other
party with whom the Company agrees to hold information of such party in confidence (the
“Proprietary Information”). Such Proprietary Information includes, but is not limited to,
Inventions, marketing plans, product plans, business strategies, financial information, forecasts,
personnel information, customer lists and domain names.
21. Confidentiality. At all times, both during my employment and after its
termination, I will keep and hold all such Proprietary Information in strict confidence and trust.
I will not use or disclose any Proprietary Information without the prior written consent of the
Company, except as may be necessary to perform my duties as an employee of the Company for the
benefit of the Company. Upon termination of my employment with the Company, I will promptly
deliver to the Company all documents and materials of any nature pertaining to my work with the
Company. I will not take with me any documents or materials or copies thereof containing any
Proprietary Information.
22. No Breach of Prior Agreement. I represent that my performance of all the terms of
this Agreement and my duties as an employee of the Company will not breach any invention
assignment, proprietary information, confidentiality or similar agreement with any former employer
or other party. I represent that I will not bring with me to the Company or use in the performance
of my duties for the Company any documents or materials or intangibles of a former employer or
third party that are not generally available to the public or have not been legally transferred to
the Company.
23. Efforts; Duty Not to Compete. I understand that my employment with the Company
requires my attention and effort during normal business hours. While I am employed by the Company,
I will not, without the Company’s express prior written consent, provide services to, or assist in
any manner, any business or third party which competes with the current or planned business of the
Company.
24. Notification. I hereby authorize the Company to notify my actual or future
employers of the terms of this Agreement and my responsibilities hereunder.
25. Non-Solicitation of Employees/Consultants. During my employment with the Company
and for a period of one (1) year thereafter, I will not directly or indirectly solicit away
employees or consultants of the Company for my own benefit or for the benefit of any other person
or entity.
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26. Non-Solicitation of Suppliers/Customers. During my employment with the Company
and after termination of my employment, I will not directly or indirectly solicit or take away
suppliers or customers of the Company if the identity of the supplier or customer or information
about the supplier or customer relationship is a trade secret or is otherwise deemed confidential
information under applicable law.
27. Injunctive Relief. I understand that in the event of a breach or threatened
breach of this Agreement by me the Company may suffer irreparable harm and will therefore be
entitled to injunctive relief to enforce this Agreement.
28. Governing Law; Severability. This Agreement will be governed by and construed in
accordance with the laws of the State of Florida, without giving effect to that body of laws
pertaining to conflict of laws. If any provision of this Agreement is determined by any court or
arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such
provision will be enforced to the maximum extent possible given the intent of the parties hereto.
If such clause or provision cannot be so enforced, such provision shall be stricken from this
Agreement and the remainder of this Agreement shall be enforced as if such invalid, illegal or
unenforceable clause or provision had (to the extent not enforceable) never been contained in this
Agreement. Notwithstanding the forgoing, if the value of this Agreement based upon the substantial
benefit of the bargain for any party is materially impaired, which determination as made by the
presiding court or arbitrator of competent jurisdiction shall be binding, then this Agreement will
not be enforceable against such affected party and both parties agree to renegotiate such
provision(s) in good faith.
29. Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered will be deemed an original, and all of which together shall
constitute one and the same agreement.
30. Titles and Headings. The titles, captions and headings of this Agreement are
included for ease of reference only and will be disregarded in interpreting or construing this
Agreement. Unless otherwise specifically stated, all references herein to “sections” and
“exhibits” will mean “sections” and “exhibits” to this Agreement.
31. Entire Agreement. This Agreement and the documents referred to herein constitute
the entire agreement and understanding of the parties with respect to the subject matter of this
Agreement, and supersede all prior understandings and agreements, whether oral or written, between
or among the parties hereto with respect to the specific subject matter hereof.
32. Amendment and Waiver. This Agreement may be amended only by a written agreement
executed by each of the parties hereto. No amendment of, waiver of, or modification of, any
obligation under this Agreement will be enforceable unless set forth in writing signed by the party
against which enforcement is sought. Any amendment effected in accordance with this
section will be binding upon all parties hereto and each of their respective successors and
assigns. No delay or failure to require performance of any provision of this Agreement shall
constitute a waiver of that provision as to that or any other instance. No waiver granted under
this Agreement as to any one provision herein shall constitute a subsequent waiver of such
provision or of any other provision herein, nor shall it constitute the waiver of any performance
other than the actual performance specifically waived.
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33. Successors and Assigns; Assignment. Except as otherwise provided in this
Agreement, this Agreement, and the rights and obligations of the parties hereunder, will be binding
upon and inure to the benefit of their respective successors, assigns, heirs, executors,
administrators and legal representatives. The Company may assign any of its rights and obligations
under this Agreement. No other party to this Agreement may assign, whether voluntarily or by
operation of law, any of its rights and obligations under this Agreement, except with the prior
written consent of the Company.
34. Further Assurances. The parties agree to execute such further documents and
instruments and to take such further actions as may be reasonably necessary to carry out the
purposes and intent of this Agreement.
| MiMedx Group, Inc. | Employee: | |||||||||
| By: | /s/: Xxxx X. Xxxxxx, Xx. | /s/: Xxxxxxx X. Xxxxxxxx | ||||||||
| Name: | Xxxx
X. Xxxxxx, Xx.
|
Xxxxxxx X. Xxxxxxxx |
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| Name (Please print) | ||||||||||
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