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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
April 12th, 2001, by and between Xxxxxxx X. Xxxx, an individual resident of the
State of Georgia ("Employee"), and Horizon Medical Products, Inc., a Georgia
corporation (the "Employer").
W I T N E S S E T H:
WHEREAS, Employer desires to employ Employee and Employee desires to be
employed by Employer, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
SECTION 1 EMPLOYMENT.
Subject to the terms hereof, the Employer hereby employs Employee, and
Employee hereby accepts such employment. Employee will serve as Chief Operating
Officer of Employer and will be responsible for the day-to-day operations of
Employer, subject to the direction of the Board of Directors and as outlined in
the job description attached hereto as Exhibit "A". Employee agrees to devote
his full business time and best efforts to the performance of such duties that
the Board of Directors of Employer (the "Board of Directors") may assign
Employee from time to time and will report to the Board of Directors.
SECTION 2 TERM OF EMPLOYMENT.
The term of Employee's employment hereunder (the "Term") shall be from
April 16, 2001 (the "Effective Date") until termination upon the occurrence of
any of the following events, provided that the Term shall expire on April 16,
2004 if not previously terminated:
(I) The death or total disability of Employee (total
disability meaning the failure to fully perform his
normal required services hereunder for a period of
three (3) consecutive months during the Term hereof,
by reason of mental or physical disability);
(II) The termination by Employer of Employee's employment
hereunder, upon prior written notice to Employee, for
"good cause". For purposes of this Agreement, "good
cause" for termination of Employee's employment shall
exist (A) if Employee is convicted of, pleads guilty
to, or confesses to any felony or any act of fraud,
misappropriation, or embezzlement, (B) if Employee
has engaged in a dishonest act to the material damage
or prejudice of Employer or any subsidiary of
Employer, or in misconduct or unlawful or improper
activities materially damaging to the business of
Employer or any subsidiary of Employer, or (C) if
Employee fails to comply with the terms of this
Agreement, and, within thirty
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(30) days after written notice from Employer of such
failure, Employee has not corrected such failure or,
having once received such notice of failure and
having so corrected such failure, Employee at any
time thereafter again so fails, provided, that
Employee will be given the opportunity to explain his
position in the matter at a meeting of the Board of
Directors of Employer prior to any termination under
this clause (C), or (D) if Employee wilfully neglects
or breaches his duties or engages in intentional
misconduct in discharging his duties as an officer
and employee of the Employer, or (E) if Employee
fails to meet either quarterly or annual management
business objectives that are specifically established
for Employee by the Board of Directors or the
Compensation Committee of the Board of Directors and
that are agreed to by Employee;
(III) The termination of this Agreement by Employee upon at
least ninety (90) days prior written notice;
(IV) The termination of this Agreement by Employer without
cause upon at least thirty (30) days prior written
notice; or
(V) The termination of this Agreement by mutual written
agreement of Employer and Employee.
SECTION 3 COMPENSATION.
3.1 TERM OF EMPLOYMENT. Employer will provide Employee
with the following salary, expense reimbursement, and additional employee
benefits during the term of employment hereunder:
(A) SALARY. Employee will be paid a salary (the "Salary")
of no less than Two Hundred Thousand Dollars
($200,000.00) per annum, less deductions and
withholdings required by applicable law. The Salary
shall be paid to Employee in equal monthly
installments (or on such more frequent basis as other
executives of Employer are compensated). The Salary
shall be reviewed by the Board of Directors or the
Compensation Committee of the Board of Directors (the
"Compensation Committee") of Employer on at least an
annual basis, but shall not be below $200,000.00.
(B) BONUS. For each calendar year during the Term
commencing with the year 2001 and each quarter
beginning with the second quarter of 2001, Employee
will be entitled to earn (i) a quarterly bonus of
$15,000.00, based upon quarterly management business
objectives established by the Compensation Committee
or the Chief Executive Officer of Employer, and (ii)
an annual bonus of
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$60,000.00 for each calendar year, based upon
criteria established by the Compensation Committee or
the Chief Executive Officer of Employer.
(C) CAR ALLOWANCE. Employer shall provide Employee with a
monthly automobile allowance of $1,000.00.
(D) VACATION. Employee shall receive four (4) weeks
vacation time per calendar year during the term of
this Agreement commencing with the year 2001. Any
unused vacation days in any calendar year may not be
carried over to subsequent years.
(E) EXPENSES. Employer shall reimburse Employee for all
reasonable and necessary expenses incurred by
Employee at the request of and on behalf of Employer.
Reimbursement requests will comply with the
Employer's procedures and policies and must be
approved by the Chief Executive Officer.
(F) BENEFIT PLANS. Employee may participate in such
medical, dental, disability, hospitalization, life
insurance, and other benefit plans (such as pension
and profit sharing plans) as Employer maintains from
time to time for the benefit of vice-president
executives of Employer, on the terms and subject to
the conditions set forth in such plans, including
without limitation Employer's 401(k) Plan.
3.2 EFFECT OF TERMINATION. Except as hereinafter
provided, upon the termination of the employment of Employee hereunder for any
reason, Employee shall be entitled to all compensation and benefits earned or
accrued under Section 3.1 as of the effective date of Termination (the
"Termination Date"), but from and after the Termination Date no additional
compensation or benefits shall be earned by Employee hereunder. Except in the
case of a termination of the employment of Employee pursuant to Section 2(ii)
hereof or a termination by Employee of Employee's employment pursuant to Section
2(iii) hereof, Employee shall be deemed to have earned any bonus payable with
respect to the quarter and calendar year in which the Termination Date occurs on
a prorated basis (with the bonus calculated as of the end of the quarter and the
year in which the Termination Date occurs and with proration through the
Termination Date).
If Employee's employment is terminated by Employer pursuant to
Section 2(ii) hereof prior to April 16, 2002, then Employer shall continue to
pay Employee his normal Salary pursuant to Section 3.1(a) for six (6) months
during the Termination Period (as defined below) in periodic payments (on the
same basis as if Employee continued to serve as an employee hereunder for such
period), and Employee shall continue to be eligible to receive his automobile
allowance and to have Employer pay his individual premiums for his COBRA health
insurance benefits during such six (6) month Termination Period without any
additional expense to Employee. If Employee's employment hereunder is terminated
by Employer pursuant to Section 2(iv) hereof, then, in addition to any other
amount payable hereunder, Employer shall continue to
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pay Employee his normal Salary pursuant to Section 3.1(a) during the applicable
Termination Period (as defined below) in periodic payments (on the same basis as
if Employee continued to serve as an employee hereunder for such period) and
Employee shall continue to be eligible to receive his automobile allowance and
to have Employer pay his individual premiums for his COBRA health insurance
benefits during the applicable Termination Period without any additional expense
to Employee. The "Termination Period" shall mean a period that commences on the
Termination Date and continues thereafter for (i) six (6) months if Employee is
given notice of termination by Employer prior to April 16, 2002 under either
Section 2(ii) or Section 2(iv) hereof, and (ii) twelve (12) months if Employee
is given notice of termination by Employer under Section 2(iv) hereof after
April 15, 2002.
If within thirty (30) days after the effective date of an
acquisition of Employer (as a result of a merger, sale of substantially all of
Employer's assets, sale of more than fifty percent (50%) of Employer's
outstanding shares, or otherwise), Employer or its successor has not offered to
Employee a position of employment (under which employment Employee would have an
office within a fifty (50) mile radius of his home in Suwanee or a fifty (50)
mile radius of the Employer's office in Manchester, Georgia) that is mutually
acceptable to Employee and Employer or its successor, then Employee may
thereafter resign from his employment under Section 2(iii) above and in the
event of such resignation Employer or its successor shall continue to pay
Employee his normal Salary pursuant to Section 3.1(a) during the Termination
Period in periodic payments (on the same basis as if Employee continued to serve
as an employee hereunder for such period) and Employee shall continue to be
eligible to receive his automobile allowance and to have Employer pay his
individual premiums for his COBRA health insurance benefits during the
Termination Period without any additional expense to Employee.
SECTION 4 STOCK OPTIONS.
The Compensation Committee of the Board of Directors of the Employer
will grant to Employee options to purchase One Hundred Fifty Thousand (150,000)
shares of common stock of Employer under and subject to Employer's 1998 Stock
Incentive Plan (the "Plan"), and Employer will use its best efforts to finalize
such grant prior to May 1, 2001. The option price will be the closing stock
price on the day the options are granted by the Compensation Committee. The
options will vest on the following schedule under the Plan: one-third on the
first anniversary date of the Effective Date, one-third on the second
anniversary date of the Effective Date, and one-third on the third anniversary
date of the Effective Date.
If the shareholders of Employer at the annual meeting of shareholders
scheduled for May 8, 2001 approve the proposed increase in the number of shares
that are authorized and available for options under the Plan, the Compensation
Committee will grant to Employee options to purchase fifty thousand (50,000)
shares of common stock of Employer under and subject to the Plan. The option
price will be the closing stock price on the date the options are granted by the
Compensation Committee, and the options will vest on the following schedule
under the Plan: one-third on the first anniversary date of the Effective Date,
one-third on the second anniversary date of the Effective Date, and one-third on
the third anniversary date of the Effective Date.
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Any of the options that are granted to Employee and that are not vested
shall fully and immediately vest and become exercisable upon a Change in Control
of Employer (as defined in the Plan).
SECTION 5 NON-DISCLOSURE OF TRADE SECRETS AND CONFIDENTIAL
INFORMATION; INVENTIONS.
5.1 TRADE SECRETS. During the term of the Employee's
employment by the Employer and after the termination of such employment, whether
such termination is by the Employee or the Employer, the Employee shall not use
or disclose, or permit any unauthorized person access to, any Trade Secrets
belonging to the Employer or any third party whose Trade Secrets are in the
possession of the Employer.
5.2 CONFIDENTIAL INFORMATION. During the term of the
Employee's employment by the Employer and for a period of two (2) years after
termination of such employment, whether such termination is by the Employee or
by the Employer, the Employee shall not use or disclose, or permit any
unauthorized person access to, any Confidential Information belonging to the
Employer or any third party whose Confidential Information is in the possession
of the Employer.
5.3 DELIVERY OF INFORMATION. Upon request of the
Employer and in any event upon the termination of employment with the Employer,
the Employee shall deliver to the Employer all memoranda, notes, records, tapes,
documentation, disks, manuals, files, or other documents, and all copies
thereof, concerning or containing Confidential Information or Trade Secrets that
are in the Employee's possession, whether made or compiled by the Employee or
furnished to the Employee by the Employer.
5.4 DEFINITION OF TRADE SECRETS. For purposes of this
Agreement, "Trade Secrets" shall refer to the trade secrets of the Employer as
that term is defined in the Official Code of Georgia Annotated, ss.10-1-761, as
amended from time to time. Trade Secrets also include any information described
herein which the Employer obtains from a third party, which Employer or such
third party treats as proprietary or designates as Trade Secrets, whether or not
owned or developed by the Employer.
5.5 DEFINITION OF CONFIDENTIAL INFORMATION. For purposes
of this Agreement, "Confidential Information" shall mean any data or
information, other than Trade Secrets, that is of value to the Employer and is
not generally known to competitors of the Employer and that is treated by the
Employer as confidential (whether or not such material or information is marked
"confidential"). To the extent consistent with the foregoing and to the extent
not Trade Secrets, Confidential Information includes, but is not limited to,
lists of any information about the Employer's executives and employees,
marketing techniques, price lists, pricing policies, business methods,
manufacturing processes and records, product design or inventions, regulatory
files and information, supplier and vendor information and contracts, and
financial information. Confidential Information also includes any information
described in this paragraph which the Employer obtains from a third party, which
the Employer or the third party
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treats as proprietary or designates as Confidential Information, whether or not
owned or developed by the Employer.
5.6 DEFINITION OF EMPLOYER. For purposes of this Section
5, the term "Employer" includes Horizon Medical Products, Inc. and its
subsidiaries.
5.7 INVENTIONS. Any invention developed by Employee
during the course of his employment while working at Employer shall be the sole
property of Employer, and Employee agrees to execute an appropriate assignment
instrument upon request by Employer transferring all rights in any such
invention to Employer.
SECTION 6 NON-COMPETITION AND NON-SOLICITATION OF EMPLOYEES.
6.1 NON-COMPETITION. During the Term and for the period
of years described below after the termination of Employee's employment with
Employer, whether such termination is by Employee or Employer, or after
expiration of the Term, Employee shall not, on his own behalf or on behalf of
others, engage within the United States as chief executive officer or chief
operating officer for any company or firm (or chief executive officer or head of
any business unit or division of any such company or firm) that manufactures or
markets products that compete with any products of the Employer. The period of
years for the non-competition covenant in the preceding sentence shall be (i)
six (6) months after such termination of employment if Employee's employment is
terminated prior to April 16, 2002, and (ii) one (1) year after such termination
of employment if Employee's employment is terminated on or after April 16, 2002,
and (iii) one (1) year after expiration of the Term.
6.2 NON-SOLICITATION. For a period of two (2) years after
the termination of his employment with Employer, whether such termination is by
Employee or Employer, Employee, on his own behalf or on behalf of others, shall
not hire or induce or solicit to leave employment with Employer any employee of
Employer.
SECTION 7 MISCELLANEOUS.
7.1 INDEMNIFICATION. Employee is entitled to
indemnification from Employer for claims against Employee in his capacity as an
officer or employee of Employer in the manner provided in the bylaws of Employer
and Georgia law.
7.2 SEVERABILITY. The covenants in this Agreement shall
be construed as covenants independent of one another and as obligations distinct
from any other contract between Employee and Employer. The invalidity or
unenforceability of any particular provision of this Employment Agreement shall
not affect the other provisions hereof, and this Employment Agreement shall be
construed in all respects as if such invalid or unenforceable provision were
omitted. Any claim that Employee may have against Employer shall not constitute
a defense to enforcement by Employer of this Agreement.
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7.3 NOTICES. Any and all notices hereunder should be
given in writing by personal delivery or by certified United States mail (return
receipt requested), and addressed to such party at the addresses designated
below:
EMPLOYER: Horizon Medical Products, Inc.
ATTN: CHIEF EXECUTIVE OFFICER
Seven North Parkway Square
0000 Xxxxxxxxx Xxxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
EMPLOYEE: Xxxxxxx X. Xxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
or at such other address or number for a party as shall be specified by like
notice. Any notice which is delivered in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party or its agent.
7.4 BINDING EFFECT. This Agreement inures to the
benefit of, and is binding upon, Employer and its successors and assigns, and
Employee, together with Employee's executor, administrator, personal
representative, heirs, and legatees.
7.5 ENTIRE AGREEMENT. This Agreement is intended by the
parties hereto to be the final expression of their agreement with respect to the
subject matter hereof and is the complete and exclusive statement of the terms
thereof, notwithstanding any representations, statements, or agreements to the
contrary heretofore made. This Agreement supersedes and terminates all prior
employment and compensation agreements, arrangements, and understandings between
or among Employer and Employee. This Agreement may be modified only by a written
instrument signed by all of the parties hereto.
7.6 GOVERNING LAW. This Agreement shall be deemed to be
made in, and in all respects shall be interpreted, construed, and governed by
and in accordance with, the laws of the State of Georgia. No provision of this
Agreement shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial authority or by any
board of arbitrators by reason of such party or its counsel having or being
deemed to have structured or drafted such provision.
7.7 HEADINGS. The section and paragraph headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
7.8 SPECIFIC PERFORMANCE. Each party hereto hereby
agrees that any remedy at law for any breach of the provisions contained in
Section 5 or Section 6 of this Agreement shall be inadequate and that the other
parties hereto shall be entitled to specific performance and any other
appropriate injunctive relief in addition to any other remedy such party might
have under this Agreement or at law or in equity.
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7.9 COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
HORIZON MEDICAL PRODUCTS, INC.
By: /s/ Xxxxxxxx X. Xxxx
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Xxxxxxxx X. Xxxx, Chief Executive Officer
EMPLOYEE:
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
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EXHIBIT "A" TO EMPLOYMENT AGREEMENT
Horizon Medical Products, Inc.
Description of Duties
He is responsible for the plans, policies, and profitability of the total
company. His major objective is to achieve the plan, which will maximize value
for the shareholders and creditors. He is responsible for bank relations and
communications. He serves much as the CEO and should be promotable to that
position within two years. Specific duties are as follows, but not limited to:
- Board relations and communications
- Bank relations and communications
- Achievement of the sales and profit objectives of the company
- Compliance with the policies and procedures of the company
- Compliance and modifications where necessary to the Business
Strategic Plan for 2001-2004
- Utilization of the Chairman and Vice Chairman to assist him in
the accomplishment of this objectives
- Utilization and direction of the manufacturing division of the
company
- Utilization and direction of sales and marketing of the
company
- Direction and utilization of IT and financial/administrative
functions.
In summary, he is responsible for all that happens or fails to happen in the
company.
