EXHIBIT 10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is
entered into by and between HemaCare Corporation (the
"Company"), located at 0000 Xxx Xxxx Xxxxxxxxx, Xxxxxxx
Xxxx, XX 00000, and Xxxxxxx X. Xxxxxx (the "Employee")
as of June 1, 2000.
I. Employment
The Company employs the Employee and the Employee
accepts employment (hereinafter, the "Employment") upon
the terms and conditions of this Agreement.
II. Duties
Employee shall perform the duties of Chief
Executive Officer (with primary responsibility for
Western U.S. Products/BMP Unit and focusing on the
California market, marketing, growth, profitability and
quality assurance) and such other duties of a
responsible nature consistent with his position as may
be prescribed from time to time by the Board of
Directors. Employee is to devote all of his working
time and efforts to the business and affairs of the
Company. During the Employment, Executive shall report
directly to the Executive Chairman and from to time to
the Board of Directors of the Company.
III. Term
The term of this Agreement shall begin on June 1,
2000 (the "Effective Date") and shall continue for an
indefinite period until terminated as provided herein.
This Agreement may be terminated by either party,
without cause, upon prior written notice to the other
party. The effective date of such termination is
referred to hereinafter as the "Termination Date."
IV. Compensation
A. Base Salary
The Company shall pay the Employee for all services
rendered a salary of $200,000 per year which may be
adjusted by the Board of Directors of the Company as
recommended by the Board Compensation Committee,
payable in semi-monthly installments or in such other
manner as the Company shall pay its executives.
B. Incentive Compensation
The Company may (but shall not be obligated to)
award Employee an annual or other bonus in such
amounts, and on such terms and conditions, as the Board
Compensation Committee and/or the Board of Directors of
the Company may determine in its sole discretion.
C. Stock Options
Stock options awarded to Employee in Section IV, C
of that certain Employment Agreement dated May 27, 1998
between the Company shall remain in full force and
effect in accordance with the terms thereof (it being
understood that Employee shall not be entitled to stock
options which have not vested as of the Termination
Date under this Agreement).
D. Fringe Benefits
Employee shall be eligible for all fringe benefits
as stated in the HemaCare Corporation Personnel Manual,
plus the following additions/modifications and those
which are from time to time provided to other employees
of the Company holding senior executive positions.
1. Vacation: 4 Weeks
2. Health/Dental Insurance commencing on the
first day of the month following the date of
employment.
3. To the extent the Company is able to
purchase an insurance policy therefor, long term
disability insurance equal to two-thirds of Base Salary
pursuant to the terms of such insurance policy.
Benefits under such policy will be payable to the
Employee on the same terms as other senior executive
officers of the Company notwithstanding the Company's
ability to terminate this Agreement for cause as stated
in Section VIII, B.
4. Term Life Insurance: On terms customary
for other employees of the Company.
5. Participation in the Company's employee
retirement programs including the Company's (401K)
Plan.
6. Car allowance of $600.00 per month.
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E. Change of Control
In the event of a Change of Control (as
defined in Exhibit A hereto) which occurs during the
Employment and within twelve months thereafter the
Employment is terminated by the Board without Cause,
Employee shall be entitled to receive two (2) times the
amount of the severance payment determined pursuant to
paragraph X below.
V. Extent of Services
During the Term, Employee shall not, without the
prior written consent of the Company, be engaged in any
other business activity whether or not such business
activity is pursued for gain, profit or other pecuniary
advantage. This shall not be construed as preventing
Employee from investing his assets in such form or
manner as will not require the performance of services
of Employee in the operation of the affairs of the
enterprises or companies in which said investments are
made.
VI. Non-Disclosure; Nonsolicitation; Nondisparagement
A. Employee shall not during the Term or at any
time thereafter (i) disclose to any person not employed
by the Company or any person, firm or corporation
engaged to render services to Company except during the
Term for the benefit of Company, or (ii) use for the
benefit of himself, or others, any Confidential
Information (as defined below) obtained by Employee
prior to the Effective Date, during the Term or any
time thereafter, including, without limitation,
"know-how", trade secrets, details of the Company's
contracts with third parties, pricing policies,
financial data, operational methods, marketing and
sales information or strategies, product development
techniques or plans or any strategies relating thereto,
technical processes, designs and design projects, and
other proprietary information of Company ("Confidential
Information"); provided, however, that this provision
shall not preclude Employee from (x) upon advice of
counsel and after reasonable notice to Company, making
any disclosure required by any applicable law or (y)
using or disclosing information known generally to the
public (other than information known generally to the
public as a result of any violation of this
paragraph VI by or on behalf of Employee).
B. As requested by the Company from time to time
and upon the termination of the Employment for any
reason, Employee will promptly deliver to the Company
all copies and embodiments, in whatever form, of all
Confidential Information in Employee's possession or
within Employee's control (including, but not limited
to, written records, notes, photographs, manuals,
notebooks, documentation, program listings, flow
charts, magnetic media, disks, diskettes, tapes and all
other materials containing any such Confidential
Information) regardless of the location or form of such
material and, if requested by the Company, will provide
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the Company with written confirmation that all such
materials have been delivered to the Company.
C. The Employee shall not, either directly or
indirectly, call on, solicit or take away or assist to
be called on, solicited or taken away, any of the
customers, other employees or independent contractors
of the Company on whom the Employee called or with whom
the Employee became acquainted during the Employee's
employment with or hiring by the Company, either for
the Employee's own benefit, or for the benefit of any
other person, firm or corporation. The Employee shall
not disclose the name of any employee, customer, sales
representative or other employee of the Company to any
third party, unless the disclosure occurs during the
Employee's employment with the Company and is
reasonably required by the Employee's position with the
Company. The Employee shall not now or in the future
disrupt, damage, impair or interfere with the business
of the Company in any manner, including, without
limitation, inducing an employee to leave the employ of
the Company or inducing an employee, a consultant, a
sales representative or an independent contractor to
sever that person's relationship with the Company
either by interfering with or raiding the Company's
employees or sales representatives, disrupting its
relationships with customers, agents, independent
contractors, representatives or vendors, or otherwise.
In the event of a breach or threatened breach by
Employee of the provisions of this paragraph, the
Company will be entitled to injunctive or other
equitable relief restraining Employee from any breach
or threatened breach of this paragraph VI. Nothing
herein shall be construed as prohibiting the Company
from pursuing any other remedies available to the
Company for such breach or threatened breach, including
the recovery of damages from Employee.
VII. Expenses
The Employee may incur reasonable expenses, in
accordance with Company policies for such expenses, for
promoting the Company's business, including expenses
for entertainment, travel and similar items. The
Company will reimburse the Employee for all such
expenses upon the Employee's presentation of an
itemized account of such expenditures and supporting
documentation, in accordance with Company policy.
VIII. Termination by the Company for Cause
This Agreement may be terminated by the Company
under any of the following circumstances:
A. Upon the death of Employee; or
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B. Upon the inability of Employee to perform all
of his duties hereunder by reason of illness, physical,
mental or emotional disability or other incapacity,
which inability shall continue for more than three (3)
successive months or six (6) months in the aggregate
during any period of twelve (12) consecutive months, or
C. For cause, defined as:
(i) the willful failure of Employee (other
than for the reasons described in subparagraph VIII(B)
above) to substantially perform his duties hereunder.
No act, or failure to act, on Employee's part shall be
considered "willful" unless done, or omitted to be
done, by him not in good faith and without reasonable
belief that his action or omission was in the best
interest of the Company;
(ii) conviction of a crime involving a
felony, fraud embezzlement or the like,
(iii) the engaging by Employee in conduct,
or the taking by Employee of any action, which is
materially injurious to the Company,
(iv) habitual insobriety or habitual abuse of a
controlled substance,
(v) misappropriation of the Company's funds,
or
vi) the failure of Employee to comply with the
provisions of Paragraphs V or VI above.
Termination pursuant to this subsection may only
occur after written notice from the Company to the
Employee specifying the grounds for termination and the
Employee fails within ten (10) days after receipt of
such notice to cure such failure.
Upon any termination of this Agreement (whether by
the Company or Employee), Employee shall be deemed to
have resigned from the Board without any further action
unless the Company and Employee agree otherwise.
IX. Termination by Employee for Cause
This Agreement may be terminated by Employee under
any of the following circumstances:
A. The failure of the Company to observe or
comply with any of the material terms or provisions of
this Employment Agreement after written notice from
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Employee to Company specify to grounds for termination
and the Company fails within ten (10) days after
receipt of such notice to cure such failure;
B. Any material reduction in Employee's Base
Salary Amount, or a material reduction in Employee's
fringe benefits or any other material failure by the
Company to comply with Sections II and IV hereof;
C. The Company sells substantially all of its
assets to a single purchaser or to a group of
associated purchasers;
D. At least two-thirds of the outstanding
corporate shares of the Company are sold, exchanged, or
otherwise disposed of, in one transaction or a series
of related transactions;
E. The Company dissolves or liquidates its
business.
Termination pursuant to this subsection may only
occur after written notice from the Employee to the
Company specifying the grounds for termination and the
Company fails within ten (10) days after receipt of
such notice to cure such failure.
X. Xxxxxxxxx
In the event this Agreement is terminated by the
Company, without cause, or in the event this Agreement
is terminated by the Employee for any of those causes
listed in paragraph IX, (i) the Company shall continue
to pay the Employee his then current Base Salary and
provide the benefits set forth in paragraph IV(D)(2),
(3) and (4) above for the period commencing on the
Termination Date and expiring on the sooner of (i) six
months after the Termination Date, or (ii) such date
that the Employee commences new full time employment
acceptable to the Employee. In the event of any
termination prior to year-end, the Employee shall not
be entitled to stock options which have not vested as
of the Termination Date. The Company may, at its
option and at any time, discharge all its obligations
to Employee under this paragraph in a single payment in
an amount equal to the net present value (at a discount
rate equal to the prime rate announced from time to
time by Bank of America NT&SA) of all amounts then
payable hereunder. As of the date of payment of all
amounts required to be paid by the Company under this
paragraph, the Company will have no further obligation
to Employee with respect to the payment of severance
pay.
XI. Waiver of Breach
The 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.
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XII. Arbitration
Any dispute arising out of or relating to this
Agreement or the transactions contemplated hereby shall
be finally resolved and determined by mandatory,
binding arbitration before a single arbitrator in Los
Angeles, California, in accordance with the then-
prevailing commercial arbitration rules of the American
Arbitration Association; provided, however, that no
claim for specific performance or injunctive relief
shall be required to be submitted to arbitration;
provided, further, that the arbitrator shall apply the
internal laws of the State of California. Each of the
parties hereto submits to the jurisdiction of the
arbitrator appointed in accordance with such rules and
(without limiting the effect of the foregoing
arbitration clause) to the jurisdiction of any state or
federal court sitting in Los Angeles County,
California, in any action or proceeding arising out of
or relating to this Agreement and agrees that all
claims in respect of the action or proceeding may be
heard and determined in any such court. Each of the
parties hereto waives any defense of inconvenient forum
to the maintenance of any action or proceeding so
brought and waives any bond, surety, or other security
that might be required of any other party with respect
thereto. Nothing in this paragraph XII, however, shall
affect the right of any party to bring any action or
proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby in any other
court or to serve legal process in any other manner
permitted by law or at equity, for the purposes of
compelling arbitration, enforcing any award in
arbitration, or seeking specific performance or
injunctive relief. Any party hereto may make service on
any other party by sending or delivering a copy of the
process to the party to be served at the address and in
the manner provided for the giving of notices in
paragraph XVI hereof. Each party hereto agrees that a
final award in any such arbitration or final judgment
in any such action or proceeding so brought shall be
conclusive and may be enforced by entry of such award
in any court of competent jurisdiction, suit on the
award or judgment, or in any other manner provided by
law or at equity. In the event of legal action or
arbitration to construe or enforce this Agreement, the
prevailing party (as determined by the court or
arbitrator, as applicable) shall be entitled to recover
its reasonable attorneys' fees and costs.
XIII. Assignment
The rights and obligations of the Company under
this Agreement shall inure to the benefit of and shall
be binding upon the successors and assigns of the
Company, but the rights and obligations of Employee are
personal and may not be assigned or delegated without
the Company's prior written consent.
XIV. Entire Agreement
This Agreement and the Exhibits attached herein,
contains the entire Agreement of the parties and may
not be changed orally, but only by an agreement in
writing executed by the party against whom enforcement
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of any waiver, change, modification, extension or
discharge is sought.
XV. Law Applicable
This Agreement shall be governed in all respects,
whether as to validity, construction, capacity,
performance or otherwise, by the laws of the State of
California. In the event any provision of this
Agreement shall be held invalid by a court with
jurisdiction over the parties to this Agreement, such
provision shall be deleted from the Agreement, which
shall then be construed to give effect to the remaining
provisions thereof.
XVI. Notices
Any notice to the Company required or permitted
under this Agreement shall be given in writing to
Company, either by personal service or by registered or
certified mail, postage prepaid, addressed to the
Chairman of the Company at its then principal place of
business. Any such notice to Employee shall be given
in a like manner and, if mailed, shall be addressed to
Employee at his home address then shown in the
Company's files. For the purpose of determining
compliance with any time limit in this Agreement, a
notice shall be deemed to have been duly given (a) on
the date of service, if served personally on the party
to whom notice is to be given, or (b) on the second
business day after mailing, if mailed to the party to
whom the notice is to be given in the manner provided
in this paragraph.
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IN WITNESS WHEREOF, the parties intending to be
legally bound, have executed this Agreement the day and
year first above stated.
HEMACARE CORPORATION EMPLOYEE
/s/ Xxxx X. Xxxxxxxxxx /s/ Xxxxxxx X. Xxxxxx
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Xxxx X. Xxxxxxxxxx, Chairman of Xxxxxxx X. Xxxxxx
the Board of Directors
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Exhibit "A"
As used in this Agreement, the phrase "Change of
Control" shall mean:
(a) Except as provided by subparagraph (b) hereof,
the acquisition by any person, entity or "group",
within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange
Act) of 50% or more of the combined voting power of the
then outstanding securities entitled to vote generally
in the election of directors of the Company; or
(b) Approval by the Board of a reorganization,
merger or consolidation of the Company with any other
person, entity or corporation, other than:
(i) a merger or consolidation which would
result in the voting securities of the Company
immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted
into voting securities of another entity) more than 50%
of the combined voting power of the securities entitled
to vote generally in the election of directors of the
Company or such other entity outstanding immediately
after such merger or consolidation; or
(ii) a merger or consolidation effected to
implement a recapitalization of the Company or similar
transaction in which no person, entity or group
acquires beneficial ownership of 50% or more of the
combined voting power of the securities entitled to
vote generally in the election of directors of the
Company outstanding immediately after such merger or
consolidation; or
(iii) Approval by the Board of a plan of
complete liquidation of the Company or an agreement for
the sale or other disposition by the Company of all or
substantially all of the Company's assets pursuant to
which all or substantially all of the Company's assets
continue to be owned by an affiliate of the Company.
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