EXHIBIT 10(R)
EMPLOYMENT AGREEMENT OF XXXXXX X. XXXXX DATED
AS OF NOVEMBER 2, 1995
DIAGNOSTIC LEASING CORP.
000 XXXXXX XXXXXXX
XXXXXX XXXXX, XXX XXXX 00000
November 2, 1995
Xxxxxx X. Xxxxx
000 Xxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Dear Xx. Xxxxx:
This letter will constitute our agreement ("Agreement") concerning your
employment at Diagnostic Leasing Corp., a New York corporation ("Company") as a
Vice-President.
You and the Company hereby agree as follows:
1. TERM OF EMPLOYMENT. Subject to the terms and conditions
hereinafter set forth, the Company hereby employs you and you hereby enter into
the employment of the Company, for an employment term commencing on the date
hereof and terminating on the fifth anniversary of the date hereof. Such term
or such shorter period as may be contemplated by this Agreement during which you
are employed pursuant to this Agreement is hereinafter called the "Term of
Employment".
2. SCOPE OF EMPLOYMENT. During the Term of Employment, you shall be
employed as an officer of Company's parent, Micro Bio-Medics, Inc., with the
title of Vice President (MBM"). As a Vice-President, your duties will be to
perform such reasonable executive and managerial services consistent with those
of other operating officers of the Company, all within the directions and the
budgetary limitations of the Board of Directors, the President or any other
authorized officer of the Company, as may be assigned to you, from time to time,
by or under the authority of the Board of Directors or the President of the
Company. You will devote your full time and efforts to the business and affairs
of the Company and of its parent, subsidiaries and affiliates, as now or
hereafter conducted, and shall be at all times subject to the direction and
control of the Board of Directors and President of the Company and of its
parent, subsidiaries and affiliates. You shall render such services to the best
of
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your ability and shall use your best efforts to promote the interests of the
Company and of its parent, subsidiaries and affiliates. You will not engage
in any capacity or activity which is, or may be, contrary to the welfare,
interest or benefit of the business now or hereafter conducted by the Company
or its parent, subsidiaries and affiliates. You shall be employed at the
Company's offices in New York City or in Westchester, Nassau or Suffolk
County and you shall be obligated to travel to the extent reasonably
necessary or appropriate for you to carry out your duties and perform
services as contemplated in this Agreement.
3. COMPENSATION. As full compensation for all services provided for
herein, the Company will pay, or cause to be paid or delivered, to you, and you
will accept:
(a) a salary during the Term of Employment at an annual rate of
one hundred fifteen thousand ($115,000) Dollars to be paid in regular
installments in accordance with the Company's usual paying practices, but not
less frequently than monthly; and
(b) a bonus ("Bonus"), payable on April 30, 1997, in the
following amount, determined on the basis of the "net paid sales" (as
hereinafter defined) of Stone Medical Supply Corporation, or of the subsidiary
or division of the Company succeeding to the business of Stone Medical Supply
Corporation (collectively, "Stone"), during the year ended December 31, 1996, on
the following terms and conditions:
(i) If Stone and the Company both continue to be
qualified bidders under the United States DPSC program throughout such year and
if Stone has net paid sales during such year in excess of eleven million
($11,000,000) Dollars, the Bonus will be twenty-five thousand ($25,000) Dollars;
(ii) If Stone and the Company both continue to be qualified
bidders under the United States DPSC program throughout such year and if Stone
has net paid sales during such year in excess of ten million ($10,000,000)
Dollars and less than or equal to eleven million ($11,000,000) Dollars, the
Bonus will be twelve thousand five hundred ($12,500) Dollars;
(iii) If Stone and the Company both continue to be
qualified bidders under the United States DPSC program throughout such year and
if Stone does not have net paid sales during such year equal to or in excess of
ten million ($10,000,000) Dollars, there shall be no Bonus;
(iv) If Stone and the Company do not both continue to be
qualified bidders under the United States DPSC program throughout such year and
if Stone has net paid sales during such year in excess of ten million
($10,000,000) Dollars, the Bonus will be twenty-five thousand ($25,000) Dollars;
(v) If Stone and the Company do not both continue to be
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qualified bidders under the United States DPSC program throughout such year and
if Stone has net paid sales during such year in excess of nine million
($9,000,000) Dollars and less than or equal to ten million ($10,000,000)
Dollars, the Bonus will be twelve thousand five hundred ($12,500) Dollars; and
(vi) If Stone and the Company do not both continue to be
qualified bidders under the United States DPSC program throughout such year and
if Stone does not have net paid sales during such year equal to or in excess of
nine million ($9,000,000) Dollars, there shall be no Bonus.
(vii) For the purpose hereof "net paid sales" shall mean
the net amount actually received and collected by the Company on all orders
solicited by Stone and accepted by the Company, less the amount of all returns,
allowances, discounts and credits (the granting of which shall be in the
Company's sole discretion) and less all bad debts, commissions, trade discounts,
freight beyond the point of manufacture and excise taxes. The parties shall
jointly agree on the categories of net paid sales which are net paid sales of
Stone; however, the Company shall not be obligated to maintain Stone as a
separate division or subsidiary of the Company or of MBM. The Company's
determination of the amount of "net paid sales" shall be final and binding upon
the parties hereto unless you object in writing to the Company to such
determination within 15 days of your receipt of notice of such determination.
During and in respect of subsequent years of the Term of Employment the Company
will pay to you, and you will accept, such bonus, if any, as is determined, at
any time or from time to time, by the Company's Board of Directors in its sole
and absolute discretion.
All such payments of compensation will be subject to such deductions by the
Company as the Company is from time to time required to make pursuant to law,
government regulation or order or by your agreement or consent. Such payments
may be made by check or checks of the Company or any of its parent, subsidiaries
or affiliates as the Company may, from time to time, find proper and
appropriate.
4. EXPENSES. You shall be entitled to an expense allowance of ten
thousand ($10,000) Dollars per year for which you need not account and, in
addition thereto, to reimbursement by the Company for reasonable expenses
actually incurred by you on its behalf, in the course of your employment by the
Company and approved by the Company, upon the presentation by you, from time to
time, of an itemized account of such expenditures together with such vouchers
and other receipts as the Company may request.
5. AUTOMOBILES. The Company throughout the Term of Employment shall
pay the expenses of financing a Mercedes-Benz S320 in the amount of $1,000 per
month and shall reimburse you for gasoline, maintenance and repairs, insurance
premiums and car phone expenses in connection therewith in accordance with
paragraph 4 of this Agreement.
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6. VACATION. You shall be entitled to vacations in accordance with
Micro Bio-Medic, Inc.'s then prevailing policy for its operating executives.
7. DEATH OR DISABILITY. If, during the Term of Employment, you
shall be unable, for a period of more than the lesser of (x) hundred eighty
(180) consecutive days or (y) the applicable period before full benefits are
payable and are being paid in accordance with any applicable disability
insurance policy in any fifty-two (52) consecutive weeks to perform the services
provided for herein as a result of illness, incapacity or a physical or other
disability of any nature, the Company may, upon not less than thirty (30) days
notice, terminate your employment hereunder. You will receive full salary and
benefits in accordance with the terms of this Agreement until you are entitled
to receive full disability payments as defined in the Company's Group Disability
Insurance Policy. Thereafter and for the remainder of the Term of Employment,
you will only be entitled to receive the amount of any disability insurance
payments which you receive in accordance with the aforementioned policy and the
Company shall have no further obligation to pay you compensation hereunder.
Your entitlement to benefits, including without limitation group life insurance
and health insurance benefits, in accordance with paragraph 8 of this Agreement
shall continue for the remainder of the Term of Employment, without regard to
termination under this paragraph 7. In the event of your death during the Term
of Employment, the Company's obligations hereunder shall terminate and the
Company shall only be liable to pay salary until the end of the month in which
your death occurs.
8. BENEFITS. During the Term of Employment you shall be entitled to
participate in all group life insurance, group disability insurance, medical and
hospitalization plans, and pension and profit sharing trusts as are presently
being offered by the Company or which may hereafter, during the Term of
Employment, be offered by the Company generally to its operating executives and,
so long as you are insurable at customary rates, including the maintenance by
the Company of an insurance policy owned by the Company insuring your life in a
face amount of Seven Hundred Fifty Thousand ($750,000) Dollars as of the date
hereof naming such person or persons as you may, from time to time and in a
manner acceptable to the applicable insurance carrier, designate as beneficiary.
The amount of such insurance required to be maintained by the Company shall
decline by One Hundred Fifty Thousand ($150,000) Dollars on each anniversary of
the date hereof. All obligations of the Company to provide insurance benefits
to you under this paragraph 8 shall cease upon the end of the Term of Employment
EXCEPT THAT the Company shall continue to provide coverage to you and your
immediate family under the group life and medical and hospitalization plans, as
generally offered by the Company to its operating executives from time to time,
through the date ten (10) years from the date of the expiration or termination
of the Term of Employment.
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9. DISCLOSURE. You will not at any time, directly or indirectly,
disclose or furnish to any other person, firm or corporation:
(a) any information concerning the methods of conducting or
obtaining business, of manufacturing or advertising products, or of obtaining
customers of the Company, its parent, subsidiaries and affiliates;
(b) any information acquired by you during the course of your
employment by the Company, including, without limiting the generality of the
foregoing, the names of any customers or prospective customers of, or any
person, firm or corporation, who or which have or shall have traded or dealt
with the Company (whether such customers have been obtained by you or
otherwise);
(c) any information regarding the "mix" of Products sold to
customers or the price at which Products are sold to customers; and/or
(d) any information relating to the products, designs, styles,
processes, discoveries, materials, ideas, creations, inventions or properties of
the Company, its parent, subsidiaries and affiliates.
10. COVENANTS NOT TO COMPETE.
You acknowledge that the Company's customer lists and other
confidential information of the Company are trade secrets of the Company, are a
valuable and unique aspect of its business, that they contain information not
readily ascertainable from public sources and that they have been secured by and
through the expenditure of substantial time, effort and money by the Company.
You further acknowledge that the Company has made a significant investment and
has extended significant effort in making such information, along with other
confidential information of the Company concerning its methods of conducting or
obtaining business, available to you in order to better enable you to fulfill
your position with the Company and to earn compensation under this Agreement.
In consideration of the foregoing:
(a) during the Term of Employment, you agree not to engage,
directly or indirectly, in any business which is competitive with the business
now or at any time during the Term of Employment conducted by the Company, its
parent or any subsidiary or affiliate of the Company.
(b) you agree that if you terminate your employment with the
Company prior to or at the end of the Term of Employment, or if your employment
is terminated by the Company for cause (as hereinafter defined), for a period of
eighteen (18) months after the Term of Employment, you will not:
(i) engage, directly or indirectly, within the states of
New York, New Jersey or Connecticut in any business involving the sale and
distribution of health care related products directly to physicians, podiatrists
hospitals, veterinarians, home care dealers and other health care providers,
which is directly
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competitive with the business now conducted by the Company, its parent or any
subsidiary or affiliate of the Company;
(ii) directly or indirectly solicit, induce (or attempt to
induce), or have any part in, the diversion of employees, or former employees
within six (6) months after the termination of their employment, of the Company,
its parent or any subsidiary or affiliate of the Company or suppliers from their
relationships with the Company, its parent or any subsidiary or affiliate of the
Company;
(iii) other than on behalf of the Company engage, directly
or indirectly, in solicitation from any of the customers or any parent,
subsidiary or affiliate thereof of any business which is competitive with the
business now or then conducted by the Company, its parent or any subsidiary or
affiliate of the Company;
(iv) take any action which is intended, or would reasonably
be expected, to harm the Company or its parent or any subsidiary or affiliate or
any director, officer, employer or agent thereof or the reputation of any of the
foregoing or which would reasonably be expected to lead to unwanted or
unfavorable publicity to the Company or its parent or any subsidiary or
affiliate of the Company or materially adversely impact their relationships with
their employees, customers or suppliers; or
(v) directly or indirectly engage in any business which
uses as its name, in whole or in part, Stone, MBM, Micro Bio-Medics, Xxxxx,
Xxxxxxx or any other name used during the Term of Employment by the Company, its
parent or any subsidiary or affiliate of the Company.
(c) For the purposes of this paragraph 10, you will be deemed
directly or indirectly engaged in a business if you participate in such business
as proprietor, partner, joint venturer, stockholder, director, officer, lender,
manager, employee, consultant, advisor or agent or if you control such business.
You shall not for purposes of this paragraph be deemed a stockholder or lender
if you hold less than two (2%) percent of the outstanding equity or debt of any
publicly owned corporation engaged in the same or similar business to that of
the Company, provided that you shall not be in a control position with regard to
such corporation or if you hold a portion of the outstanding equity of
Physicians Laboratory Management Co.
11. INVENTIONS. As between you and the Company, all products,
designs, styles, processes, discoveries, materials, ideas, creations, inventions
and properties, whether or not furnished by you, created, developed, invented,
or used in connection with your employment hereunder or prior to this Agreement,
will be the sole and absolute property of the Company for any and all purposes
whatever in perpetuity, whether or not conceived, discovered and/or developed
during regular working hours. You will not have, and will not claim to have,
under this Agreement or otherwise, any right, title or interest of any kind or
nature whatsoever in or to any such products designs, styles, processes,
discoveries, materials, ideas, creations, inventions and properties.
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12. SAMPLES. All advertising or sales material or information, price
lists, customer lists, samples, notebook or laptop computers and the data
contained therein or other material or data of any kind furnished to you by the
Company, or prepared by you on its behalf or at its direction, or for its use or
in connection with your retention as an employee of the Company, shall remain
the Company's sole property and at any time during the Term of Employment upon
the Company's request, or at the termination of this Agreement, you will
immediately deliver all such material to the Company.
13. CONSENT TO JURISDICTION AND APPOINTMENT OF AGENT FOR SERVICE OF
PROCESS. The parties hereto irrevocably consent and submit to the non-exclusive
jurisdiction of the Supreme Court of the State of New York in New York County
and the United States District Court for the Southern District of New York in
connection with any action, proceeding or claim arising out of or relating to
this Agreement. You hereby irrevocably appoint and designate the law firm of
Ruskin, Moscou, Xxxxx & Faltischek, P.C. (or its successor in business) as your
agent for service of process in New York and agree to consider any legal process
or any demand or notice made or served on said agent as being made on you. You
hereby agree that separate confirmation by such agent of the foregoing
irrevocable appointment as agent for service of process is not required.
14. WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY WAIVE TRIAL BY
JURY IN ANY ACTION OR PROCEEDING OF ANY KIND WITH RESPECT TO, IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT, ANY INSTRUMENT, DOCUMENT OR GUARANTY DELIVERED
PURSUANT HERETO, OR THE VALIDITY, PROTECTION, INTERPRETATION, ADMINISTRATION,
COLLECTION OR ENFORCEMENT HEREOF.
15. INJUNCTIVE RELIEF. The parties hereto recognize that irreparable
damage may result to the Company and its business and properties if you fail or
refuse to perform your obligations under this Agreement, that a violation of
this Agreement would be a proper subject of injunctive relief and would be
necessary to protect the Company's legitimate business interests and that the
remedy at law for any such failure or refusal will be inadequate. Accordingly,
it is understood that the Company shall be entitled to provisional remedies
(including, without limitation, injunctive relief) and damages.
16. ABSENCE OF RESTRICTIONS. You represent and warrant that you are
not a party to any agreement or contract pursuant to which there is any
restriction or limitation upon your entering into this Agreement or performing
the services called for by this Agreement.
17. FURTHER INSTRUMENTS. You will execute and deliver all such other
further instruments and documents as may be necessary, in the opinion of the
Company, to carry out the purposes of this Agreement.
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18. TERMINATION AND CANCELLATION FOR CAUSE.
(a) In addition to the provisions for the cancellation and/or
termination hereof hereinabove provided, the Company may, at any time and in its
sole discretion, terminate and/or cancel this Agreement and terminate the Term
of Employment for cause (as hereinafter defined) by sending notice to you of its
intention to so cancel and/or terminate. If the Company has cause to terminate
and/or cancel this Agreement and the Term of Employment, cancellation and/or
termination under this paragraph shall become effective upon your receipt of
notice under this paragraph, without your having any recourse against the
Company for damages.
(b) For purposes of this Agreement, "cause" shall be defined to
mean, (i) refusal to comply or default in complying with the Company's
reasonable directions and/or failure to comply or perform any of the material
terms and/or obligations of this Agreement and such refusal, default or failure
continues for a period of more than thirty (30) days after receipt by you of
written notice from the Company setting forth in reasonable detail the activity
by you which the Company deems to be cause for termination of this Agreement,
(ii) fraud, dishonesty or similar malfeasance, (iii) your conviction of any
crime (whether or not involving the Company or any of its parent, affiliates or
subsidiaries) constituting a felony in the jurisdiction involved, or (iv) any
substantiated, willful act involving moral turpitude or any willful act which
subjects, or if generally know, would subject, the Company or any of its parent,
affiliates or subsidiaries to public ridicule or embarrassment. If the Company
asserts "cause" under subparagraph (i) of this paragraph, it shall provide you
with a detailed statement of the facts on which the Company's assertion of
"cause" is based, and an opportunity, during the ten (10) day period prior to
termination, for you to refute such assertion. The Company may, nonetheless,
remove you from your duties pending your refutation of such assertion.
19. INVALIDITY AND SEVERABILITY. If any provisions of this Agreement
are held invalid or unenforceable, such invalidity or unenforceability shall not
affect the other provisions of this Agreement, and, to that extent, the
provisions of this Agreement are intended to be and shall be deemed severable.
In particular and without limiting the foregoing sentence, if any provision of
paragraph 10 of this Agreement shall be held to be invalid or unenforceable by
reason of geographic or business scope or the duration thereof, such invalidity
or unenforceability shall attach only to such provision and shall not affect or
render invalid or unenforceable any other provision of this Agreement, and this
Agreement and any such provision shall be construed as if the geographic or
business scope or the duration of such provision had been more narrowly drawn so
as to be valid and enforceable.
20. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if delivered by hand or by
Federal Express or other nationally recognized overnight delivery service or if
sent by registered or certified mail as follows:
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As to Employee: Xxxxxx X. Xxxxx
000 Xxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
As to the Company: Diagnostic Leasing Corp.
000 Xxxxxx Xxxxxxx
Xxxxxx Xxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, President
or to such other address as either party hereto may designate by notice given in
accordance with this Agreement.
21. ASSIGNMENT. A party hereto may not assign this Agreement or any
rights or obligations hereunder without the consent of the other party hereto;
PROVIDED, HOWEVER, that upon the sale or transfer of all or substantially all of
the assets of the Company, or upon the merger by the Company into, or the
combination with, another corporation, this Agreement will (subject to the
provisions of paragraph 1 hereof) inure to the benefit of and be binding upon
the person or entity purchasing such assets, or the corporation surviving such
merger or consolidation, as the case may be. The Company may also, at any time
or from time to time, assign this Agreement to any of its parent, subsidiaries
or affiliates. No assignment of this Agreement shall, however, release the
Company from its obligations under this Agreement. The provisions of this
Agreement where applicable are binding upon your heirs and legal representatives
and upon the successors and assigns of the parties hereto.
22. WAIVER OF BREACH. Waiver by either party of a breach of any
provision of this Agreement by the other shall not operate or be construed as a
waiver of any subsequent breach by such other party.
23. ENTIRE AGREEMENT. This instrument contains the entire Agreement
of the parties as to the subject matter hereof. It may not be changed orally,
but only by an Agreement in writing signed by the party against whom enforcement
of any waiver, change, modification, extension or discharge is sought.
24. APPLICABLE LAW. This Agreement shall be construed in accordance
with the laws of the State of New York.
25. NEGOTIATIONS. This Agreement is the product of full and complete
negotiations at arm's length by the parties hereto. In view of the negotiations
which have culminated in the execution of this Agreement, no prior drafts,
letters or memoranda prepared by either party hereto shall be used to construe
or interpret any provision hereof, nor shall either party hereto be considered
the "drafter" of this Agreement for the purpose of construing the terms,
conditions and obligations set forth herein.
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26. ATTORNEYS' FEES AND EXPENSES.
(a) If the Company brings legal proceedings to enforce its
rights under this Agreement and is successful in doing so, it shall be entitled,
in addition to all other remedies, to reimbursement by you for its costs and
expenses, including reasonable attorneys' fees. If the Company brings such
proceedings and is unsuccessful, the Company shall reimburse you for your costs
and expenses, including reasonable attorneys' fees.
(b) If you bring legal proceedings to enforce your rights under
this Agreement and are successful in doing so, you shall be entitled, in
addition to all other remedies, to reimbursement by the Company for your costs
and expenses, including reasonable attorneys' fees. If you bring such
proceedings and are unsuccessful, you shall reimburse the Company for its costs
and expenses, including reasonable attorneys' fees.
If you accept the terms set forth in this Agreement, please indicate your
acceptance by signing your name in the lower left hand corner in the space
provided.
DIAGNOSTIC LEASING CORP.
By:/s/ Xxxxx X. Xxxxx
---------------------
Title: President
[SIGNATURES CONTINUED ON NEXT PAGE]
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
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Accepted:
/s/ Xxxxxx X. Xxxxx
--------------------
XXXXXX X. XXXXX
The undersigned hereby guarantees payment by the Company of its
obligations under this Agreement.
MICRO BIO-MEDICS, INC.
By: /s/ Xxxxx X. Xxxxx
--------------------
Title: President
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