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EXHIBIT 10.1
AGREEMENT
Between
Xxxx X. Xxxxxxxx and Gypsy Hill, L.L.C. and AccuMed International, Inc.
This Agreement (the "Agreement") is made this 13th day of April 1998, by and
between AccuMed International, Inc., a Delaware corporation (the "Corporation"),
and Xxxx X. Xxxxxxxx and Gypsy Hill L.L.C., a South Dakota Limited Liability
Company (the "Executive").
WHEREAS, Executive has served as President and CEO, of Corporation since
January 29, 1998 (the "Effective Date") and;
WHEREAS , Corporation desires to formalize Executive's duties, responsibilities
and position and Executive is willing to accept such duties, responsibilities
and position, and this Agreement contains the parties' entire agreement and
understanding as to the matters contemplated herein, and supersedes any and all
prior oral or written agreements.
WHEREAS, Corporation desires to retain Executive and Executive is willing to
accept such assignment, all upon the terms and conditions hereinafter set
xxxxx.XXX, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties hereto agree as follows:
1. ASSIGNMENT AND DUTIES. Corporation hereby retains Executive and
Executive accepts assignment with Corporation as Chairman & CEO
reporting to the Board of Directors of the Corporation, and Executive
shall perform those duties as usual and customary as a Chairman & CEO
(i.e., to include but not be limited to General Management, Financial
and Administrative duties). Executive shall perform such other or
additional duties as shall be required of Executive from time to time
by the Board of Directors and consistent with his position.
2. COMPENSATION AND BENEFITS. During the term of this Agreement,
Corporation shall pay Executive the following compensation:
a. ANNUAL PAYMENT Executive shall receive an annual payment for
services rendered which shall be no less than $225,000.00
payable semi-monthly in accordance with Corporation's regular
payroll procedures. Executive shall also receive annual
performance and compensation reviews which will be conducted
by the Board of Directors, or its designee.
b. BONUS Executive shall be eligible to receive annual bonuses
which shall be up to thirty percent (30%) of Executive's
annual payment, based upon performance of mutually agreed upon
goals/objectives. The bonus year shall be the calendar year.
The Board of Directors, at its sole and absolute discretion
may pay Executive a bonus in excess of thirty percent (30%) of
his annual payment.
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c. STOCK OPTIONS On January 30, 1998 the Board of Directors
granted to Executive 1,500,000 Shares of the Corporation's
Common Stock at a price of $.75 per share.
(i) Vesting will occur as follows:
500,000 Shares vested immediately and 500,000 Shares will vest
each year thereafter on the anniversary date of the grant for
the next two (2) years. In the event the control of the
Company changes, the entire 1,500,000 Shares shall become
immediately vested.
(ii) From time to time Stock Options may be granted by the
Compensation Committee of the Board of Directors on behalf of
the full Board to provide an appropriate long term incentive
opportunity and/or to recognize Executive's contributions to
the Company.
d. BENEFITS The Executive shall be eligible for such Corporation
benefits as exist for senior executives of Corporation and
subject to the terms and conditions of third party policies.
Should Executive not be eligible to receive any of the
Corporation's benefits or should any carrier decline to cover
Executive, Corporation will use commercially reasonable
efforts to obtain, pay for and retain a comparable replacement
policy on an individual basis.
(i) At Corporation's expense:
Medical Insurance for Executive and
Dependents with $20,000 Life/AD&D for
Executive, fully paid by Corporation.
(ii) At Executive's expense:
(1) Excess Life and AD&D Benefit 1 1/2times annual
payment (less $20,000) up to $150,000 cap
(2) Short Term Disability $500/wk benefit for 26 weeks
(3) Long Term Disability 60% of annual payment (maximum
of $6000/mo. cap) to age 65
(4) Dental Insurance for Executive and Dependents
c. EXPENSES Reimbursement of normal business expenses with
submission of expense reports and receipts. The Company will
reimburse reasonable travel and living expenses incurred in
commuting between Chicago and Executive's home in South
Dakota.
d. OTHER COMPENSATION Nothing herein shall preclude Executive
from receiving any additional compensation or from
participating in the present or future life, major medical,
hospitalization, profit sharing, pension or retirement,
sickness or disability or other plan for the benefit of the
executives of Corporation. In each case, Executive will
participate to the extent and in the manner approved or
determined by the Board of Directors or otherwise determined.
3. EXTENT OF SERVICES. Executive shall devote his entire attention and
energy to the business and affairs of Corporation on a full-time basis.
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4. TERM. The term of this Agreement shall be evergreen, commencing
January 29, 1998, subject to the following:
a. ILLNESS OR DISABILITY If Executive is absent from assignment
by reason of illness or other incapacity for more than 180
consecutive days', Corporation may, after such 180 days, but
only if Executive has not returned to assignment with
Corporation, terminate Executive's assignment by furnishing
him with at least 30 days written notice of such intention to
termination. Corporation shall be obligated to pay Executive's
payment to the date of termination, less that amount equal to
the weekly Short Term Disability Benefit, which date shall be
for all purposes of this Agreement, the date of termination of
his assignment.
b. DEATH. If Executive shall die, thereupon his assignment shall
terminate, and Corporation shall be only obligated to pay
Executive's payment for six (6) months after Executive's
death.
c. TERMINATION BY CORPORATION. Upon written notice, Corporation
may terminate this Agreement at any time:
(i) For Cause. As used herein, "Cause" is defined to mean (1) any
act of fraud, misappropriation, embezzlement, or like act of
dishonesty; (2) conviction of a felony; (3) other behavior
which adversely reflects on the reputation of Corporation; or
(4) material failure to perform the services and duties
described herein, (5) material violation of any other
provisions set forth herein, or material breach of any
fiduciary duty to Corporation, if the material failure,
violation, or breach unreasonably continues after written
notice thereof is given to the Executive by the Corporation
and further provided that Executive is given a fair and
reasonable opportunity to cure.
(ii) Without Cause. If Corporation shall terminate Executive's
assignment without Cause, Corporation shall pay Executive's
annual payment up to the date of the delivery of such notice
of termination, which date shall be for all purposes of this
Agreement, the date of termination of his assignment. If the
Executive is to be terminated without cause, he shall be given
twelve (12) months notice in writing by Corporation.
d. TERMINATION BY EXECUTIVE. Executive may terminate this
Agreement for any reason after providing one (1) month of
written notice. If Corporation is in breach of this Agreement,
Executive may, in addition and without prejudice to any other
remedies for a breach hereof, terminate this Agreement, after
providing written notice to the Corporation and providing
Corporation with a reasonable opportunity to cure. If the
Corporation thereafter fails to cure, all of Executive's
further obligations hereunder shall terminate, except for the
requirements of Sections 8 and 10 hereof.
5. SEVERANCE.
a. If Corporation terminates this Agreement without Cause, in
addition to the notice requirement provided in Section
4(c)(ii) above, Corporation will pay Executive his then
current annual payment, concurrent with the notice period, as
a lump sum, or for twelve (12) months, semi-monthly, in
accordance with Corporation's regular payroll procedures; or
some other payment terms not to exceed the annual payment
amount; any of the preceeding payment arrangements per choice
of the executive.
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6. VACATION. Executive will be immediately eligible for four weeks of
vacation per calendar year.
7. RESTRICTIVE COVENANT. Executive shall not in any manner engage in any
business directly competitive with Corporation, for a period of one
year from the date of the termination of this Agreement under the
following circumstances:
a. If this Agreement is terminated for "Cause" by the
Corporation, pursuant to Section 4(c)(i) above; or
b. If this Agreement is terminated by Executive, pursuant to
Section 4(d) above, for reasons other than a breach by
Corporation.
In the event that Executive engages in any business directly
competitive with the Corporation, Executive surrenders his right to the
continuation of his severance payments under Section 5 above. If a lump
sum payment or an amount the pro rata share due Executive, from the
time of termination to the time of his employment with the direct
competitor, is made to Executive, Executive will refund the overage to
the Corporation.
8. CONFIDENTIAL INFORMATION AND DISCOVERIES. Executive agrees that
all information of a technical or business nature such as know-how,
trade secrets, secret business information, plans, data, processes,
techniques, customer information, inventions, discoveries, formulae,
patterns, devices, etc. (the "Confidential Information"), acquired by
Executive in the course of his assignment under this Agreement, is a
valuable business property right of the Corporation. Executive agrees
that such Confidential Information, whether in written, verbal or model
form, shall not be disclosed to anyone outside the of Corporation
without the express written authorization of Corporation, unless said
individual is subject to the Corporation's non-disclosure agreement or
other appropriate contractual arrangement. This disclosure restriction
shall be limited to (a) disclosures for use in any market in which the
Corporation may then be doing business or may have taken any steps
toward entering, and (b) for that period of time until the Confidential
Information is generally available to the trade.
Any and all improvements, inventions, discoveries, formulae or
processes in any way related to Corporation's business which Executive
may conceive or make during his regular working hours or otherwise
shall be the sole and exclusive property of Corporation and Executive
will disclose the same to Corporation and will, whenever requested by
Corporation to do so (either during the term of this Agreement or
thereafter), execute and assign any and all applications, assignments
and/or other instruments and do all things which Corporation may deem
necessary or appropriate in order to apply for, obtain, maintain,
enforce and defend patents, copyrights, trademarks or other forms or
protection, or in order to assign and convey or otherwise make
available to Corporation the sole and exclusive right, title and
interest in and to said improvements, inventions, discoveries,
formulae, processes, applications or patents. After the termination of
this Agreement, Corporation will compensate Executive for his time and
effort to comply with the terms of this paragraph 8 and the Executive
may not decline to comply with any reasonable request.
No provision in this Agreement is intended to require assignment of any
of Executive's rights in an invention if no equipment, supplies,
facilities, or trade secret information of Corporation was used, and
the invention was developed entirely on Executive's own time; and the
invention does not relate to the
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business of Corporation or to Corporation's actual or demonstrably
anticipated research or development; and does not result from any work
performed by Executive for Corporation.
9. ENFORCEMENT. Both parties recognize that the services to be rendered
under this Agreement by Executive are special, unique and of
extraordinary character and that in the event of the breach by
Executive of any of the terms and conditions of this Agreement to be
performed by Executive, then Corporation shall be entitled, if it so
elects, to institute and prosecute proceedings in any court of
competent jurisdiction, either in law or in equity, to obtain damages
for any breach hereof, or to enforce the specific performance hereof by
Executive or to enjoin Executive from performing acts prohibited above
during the period herein covered, but nothing herein contained shall be
construed to prevent such other remedy in the courts as Corporation may
elect to invoke.
10. RETURN OF DOCUMENTS. Upon the termination of this Agreement for any
reason, Executive shall forthwith return and deliver to Corporation and
shall not retain any original or copies of any books, papers, price
lists or customer contacts, bids or customer lists, files, books of
account, notebooks and other documents and data relating to the
performance of services rendered by Executive hereunder, which were
provided to or made available to Executive by Corporation, all of which
materials are hereby agreed to be the property of Corporation.
11. MISCELLANEOUS.
a. NOTICES Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing and if sent
by registered or certified mail to Executive or Corporation at
the address set forth below their signatures at the end of
this Agreement or to such other address as they shall notify
each other in writing.
b. ASSIGNMENT This Agreement shall be binding upon and inure to
the benefit of Corporation and its successors and assigns and
Executive and his personal representatives, heirs, legatees
and beneficiaries, but shall not be assignable by Executive.
c. APPLICABLE LAW This Agreement shall be deemed to have been
made in South Dakota, regardless of the order in which the
signatures of the parties shall be affixed hereto, and shall
be interpreted, and the rights and liabilities of the parties
determined, in accordance with the laws of the State of South
Dakota. As part of the consideration for the execution of this
Agreement, it is hereby agreed that all actions or proceedings
arising directly or indirectly from this Agreement shall be
litigated only in the courts of the State of South Dakota or
United States courts located therein, and all parties to this
Agreement hereby consent to the jurisdiction of any local,
state or federal court located within the State of South
Dakota.
d. HEADINGS Sections headings and numbers herein are included for
convenience of reference only and this Agreement is not to be
construed with reference thereto. If there be any conflict
between such numbers and headings and the text hereof, the
text shall control.
e. SEVERABILITY If for any reason any portion of this Agreement
shall be held invalid or unenforceable, it is agreed that the
same shall not affect the validity or enforceability of the
remainder hereof.
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f. ENTIRE AGREEMENT This Agreement, and its attachments, contains
the entire agreement of the parties with respect to its
subject matter and supersedes all previous agreements between
the parties pertaining to the subject. No officer, executive
or representative of Corporation has any authority to make any
representation or promise in connection with this Agreement or
the subject matter hereof that is not contained herein, and
Corporation represents and warrants he has not executed this
Agreement in reliance upon any such representation or promise.
No modification of this Agreement shall be valid unless made
in writing and signed by the parties hereto.
g. WAIVER OF BREACH The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach.
h. COUNTERPARTS This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one agreement.
IN WITNESS WHEREOF, The parties have caused this Agreement to be duly executed
on the date first above written.
Designee of Board of Directors for: EXECUTIVE:
ACCUMED INTERNATIONAL, INC.
By: \S\ J. XXXXXX XXXXXX By: \S\ XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx
Member, Board of Directors Chairman & CEO
Address: 000 X. Xxxxxxxx, Xxxxx 000 00 Xxxxx Xx. X.X.
Xxxxxxx, XX 00000 Xxxxx, XX 00000
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