Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the sixth
(12th) day of August, 1995, between Care Concepts, Inc.,,a Nevada corporation
(the "Company"), and Xxxx X. Xxxxxx (the "Employee").
RECITALS
A. The Company is engaged, among other things, in the business of
developing, building and marketing specialized motor vehicles for physically
handicapped drivers and passengers. The Employee has been employed by the
Company since its inception and has substantial experience and expertise in
managing and operating the business of the Company.
B. The Company desires to retain the services of the Employee as its
President and Chief Executive Officer, and the Employee desires and is willing
to continue employment with the Company in that capacity.
C. The Company and Employee desire to embody the terms and conditions of
the Employee's employment in a written agreement, which will supersede all prior
agreements of employment, whether written or oral, pursuant to the terms and
conditions hereinafter set forth.
NOW, THEREFORE THE PARTIES AGREE AS FOLLOWS:
TERMS AND CONDITIONS
1. Employment. The Employee is employed as President and Chief Executive
Officer of the Company from the Effective Date (as hereinafter defined) through
the Term of this Agreement (as hereinafter defined). The Employee shall have
such duties and responsibilities as shall be allocated to him from time to time
by the Board of Directors of the Company (the "Board") in his capacity as the
President and as the Chief Executive Officer of the Company. During the Term of
this Agreement, the Employee shall be based in the principal offices of the
Company in Phoenix, Arizona, and shall not be required to be based anywhere
other than Phoenix, Arizona, except for travel as reasonably required in the
performance of his duties hereunder.
2. Term. The Term of this Agreement shall be f or a period of five (5)
years, commencing on the Effective Date.
3. Effective Date. The Effective Date of this Agreement shall be the, date
hereof.
4. Salary. Subject to the further provisions of this Agreement, the Company
agrees to pay the Employee: during the first (lst) year of salary at an annual
rate-equal to an annual rate of $70,000 with an increase of 10% in each
subsequent year of the Term of this Agreement. Notwithstanding the foregoing,
the salary of the Employee shall not be decreased at any time during the Term of
this Agreement from the amount of salary then in effect. Participation in
deferred compensation, bonus, retirement and other employee benefit plans and in
fringe benefits shall not reduce the salary payable to the Employee under this
Section 4. The salary under this Section 4 shall be payable by the Company to
the Employee in advance in equal bi-weekly installments, or on such other
periodic basis as the Company and the Employee may agree but in any case not
less frequently than monthly.
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5. Bonuses. Subject to the further provisions of this Agreement, during the
Term of this Agreement, the Employee shall be entitled to participate in an
equitable manner with all other senior executives of the Company in such
bonuses, including but not limited to, bonuses provided pursuant to any
management bonus plan that the Company may adopt (based upon the performance of
the Employee and the Company), as may be authorized, declared and paid by the
Board to its senior executives or paid by any person in control of the Company
to that person's senior executives (the "Annual Bonus"). No other compensation
provided for in this Agreement shall be deemed a substitute for the Employee's
right to participate in such bonuses when and as declared by such Board of
Directors or person in control of the Company. Nothing in this Section shall be
deemed to limit the ability of the Employee to be paid and receive bonuses from
the Company, based solely on the Employee's performance, without regard to the
payment of bonuses to any other officers of the Company.
Without limiting the foregoing or any other provisions of this Agreement,
the Company shall pay to the Employee, within thirty (30) days, or within such
other period as the Employee and the Company may designate, of the filing of the
Company's Form 10K with the Securities and Exchange Commission for each of the
next five (5) years commencing with the year ending December 31, 1995, a bonus
equal to one point sixty seven percent (1.67%) of each year's pre-tax income of
the Company as shown on the Form 10K for each such year provided pre-tax income
is in excess of $1,000,000 (the "1.67% Bonus").
6. Participation in Retirement and- Employee Benefit Plans. The Employee
shall be entitled to participate in any plan of the Company relating to stock
options, restricted stock awards, stock purchases, pension, thrift, profit
sharing, life insurance, medical coverage, education or other retirement or
employee benefits that the Company has adopted or may adopt for the benefit of
its senior executives.
7. Fringe Benefits. In addition to the benefit plans referred to in Section
6 hereof, the Employee shall be entitled to participate in any other fringe
benefits which are now or may be or become applicable to the Company's senior
executives, and any other benefits which are commensurate with the duties and
responsibilities to be performed by the Employee under this Agreement.
Notwithstanding the foregoing, the benefits provided under this Section 7 shall
not be decreased following a Change in Control (as hereinafter defined) without
the written consent of the Employee, which consent may be withheld for any
reason; provided, however, that the benefits provided under this Section 7 shall
cease upon the Employee I s Date of Termination (as herein after defined).
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8. Voluntary Absences; Vacations. The Employee shall be entitled, without
loss of pay, to be absent voluntarily for reasonable periods of time from the
performance of the duties and responsibilities of the Employee under this
Agreement. All such voluntary absences shall count as paid vacation time, unless
the Board otherwise determines. As of the Effective Date, the Employee shall be
entitled to an annual paid vacation of twenty-five (25) days per year or such
longer period as the Board may approve, which vacation time shall be in addition
to Saturdays, Sundays and holidays recognized by the Company. The timing of paid
vacations shall be scheduled in a manner reasonably acceptable to the Company.
9. Termination.
(a) Termination for Disability. If, as a result of the Employee's
incapacity due to physical or mental illness, the Employee shall have been
absent from the full-time performance of the Employee's duties with the Company
for six (6) consecutive months, and within thirty (30) days after written notice
of termination is given, the Employee shall not have returned to the full-time
performance of the Employee's duties, the Employee's employment may be
terminated by the Company for "Disability."
(b) Termination for Cause. Subject to the notice provisions set forth in
subsection (c) below, the Company may terminate the Employee's employment for
"Cause" at any time. "Cause" shall mean termination upon (i) the willful failure
by the Employee to substantially perform the Employee's duties with the Company
(other than any such failure resulting from the Employee's incapacity due to
physical or mental illness), after a written demand for substantial performance
is delivered to the Employee by the Board, which demand specifically identifies
the manner in which the Board believes that the Employee has not substantially
performed the Employee's duties,, (ii) the willful engaging by the Employee in
conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise, or (iii) the conviction of the Employee of a felony.
For purposes of this subsection (b), no act,, or failure to act, on the
Employee's part shall be deemed "willful,, unless done, or omitted to be done,
by the Employee not in.good faith and without the reasonable belief that such
action or omission was in the best interest of the Company. Notwithstanding the
foregoing, the Employee shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to the Employee a copy of a
resolution duly adopted by the affirmative vote of not less than two-thirds
(2/3) of the entire membership of the Board (exclusive of the Employee if the
Employee is a member of the Board) at a meeting of such Board (after reasonable
notice to the Employee and an opportunity for the Employee, together with the
Employee's counsel, to be heard before such Board) , finding that the Employee
has engaged in the conduct set forth above in this subsection (b) and specifying
the particulars thereof in detail.
(c) Notice of Termination. Any termination of the Employee's employment by
the Company or by the Employee shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 13. "Notice of
Termination" shall mean a notice that shall indicate the specific termination
provision of this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for the termination of
the Employee's employment under the provision so indicated.
(d) Date of Termination, Etc. The term "Date of Termination"shall mean (i)
if the Employee's employment is terminated by the Employee's death, the last day
of the sixth month after the date of his death; (ii) if the Employee's
employment is terminated for Disability, thirty (30) days after the Notice of
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Termination is given (provided that the Employee shall not have returned to the
full-time performance of the Employee's duties during such thirty (30)-day
period); (iii) if the Employee's employment is terminated for Cause, the date
specified in the Notice of Termination (which shall not be less than thirty (30)
days from the date such Notice of Termination is given) ; and (iv) if the
Employee's employment is terminated for any other reason, the date specified in
the Notice of Termination.
(e) Change in Control. A "Change in Control" shall be deemed to have
occurred if the conditions set forth in any one of the following paragraphs
shall have been satisfied:
(i) Any "person" (as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the"Exchange Act") or "persons"
acting in concert, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing twenty five percent (25%) or more of the combined voting
power of the Company's then outstanding securities; provided that the term
"person" for purposes of this Section 9 (e) (i) shall exclude the Company; any
trustee or other fiduciary holding securities under an employee benefit plan of
the Company; or
(ii) In the event Xxxx X. Xxxxxx, Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx, or
the nominees of any of them or their personal representatives or estates cease
for any reason to constitute a majority of the Board other than by reason of
voluntary withdrawal or resignation; or
(iii) The stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than (A) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving-
entity), in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, at least
seventy-five percent (75%) of the combined voting power of the voting securities
of the Company or such surviving entity outstanding immediately after such
merger or consolidation, or (B) a merger or consolidation effected to implement
a recapitalization of the Company (or similar transaction) in which no person
acquires more than fifty percent (50%) of the combined voting power of the
Company's then outstanding securities; or
(iv) The stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement f or the sale or disposition by the Company of
all or substantially all the Company=s assets.
For purposes of Section 9(e)(ii), a nominee means a person serving on the
Board of Directors in place of and occupying the seat formerly occupied by Xxxx
X. Xxxxxx, Xxxxx X. Xxxxxx or Xxxxxx X. Xxxxxx who shall have been voluntarily
nominated by any of them or their personal representatives or estates.
(f) Termination for Good Reason. At any time following a Change in Control,
the Employee may terminate his employment hereunder for "Good Reason". "Good
Reason" shall mean the occurrence (without the Employee's express written
consent, which consent may be withheld for any reason) of any one of the
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following acts by the Company, or failures by the Company to act, unless, in
the case of any act or failure to act described in paragraphs (i), (v), (vi)
or (vii) below, such act or failure to act is corrected prior to the Date of
Termination specified in the Notice of Termination given in respect thereof:
(i) The assignment to the Employee of any duties inconsistent with the
Employee's status as the senior executive of the Company or a substantially
adverse alteration in the nature or status of the Employee's responsibilities
from those in effect immediately prior to the Change in Control;
(ii) A reduction by the Company in the Employee's annual base salary
as in ef f ect on the date hereof or as the same may be increased from time to
time;
(iii) The relocation of the Company's principal offices to a location
outside of Phoenix, Arizona (or, if different, the metropolitan area in which
such offices are located immediately prior to the Change in Control) or the
Company's requiring the Employee to be based anywhere other than the Company's
principal executive office (or, if different, the metropolitan area in which
such offices are located immediately prior to the Change in Control), except for
required travel on the Company's business to an extent substantially consistent
with the Employee's present business travel obligations;
(iv) The failure by the Company, without the Employee's consent, to
pay to the Employee any portion of the Employee's current compensation, or to
pay to the Employee any portion of an installment of deferred compensation under
any deferred compensation program of the Company, within seven (7) days of the
date such compensation is due;
(v) The failure by the Company to continue in effect any compensation
plan in which the Employee participates immediately prior to the capital change
in capital control which is material to the Employee's total compensation,
unless an equitable arrangement approved in writing by the Employee (embodied in
an ongoing substitute or alternative plan) has been made with respect to such
plan, or the failure by the Company to continue the Employee's participation
therein (or in such substitute or alternative plan) on a basis not materially
less favorable, both in terms of the amount of benef its provided and the level
of the Employee's participation relative to other participants, as existed
immediately prior to the Change in Control;
(vi) The f ailure by the Company to continue to provide the Employee
with benef its substantially similar to those enjoyed by the Employee under any
of the Company's pension, life insurance, medical, health and accident,
disability or other plans in which the Employee was participating immediately
prior to the Change in Control, the taking oi any action by the Company which
would directly or indirectly materially reduce any of such benefits or deprive
the Employee of any material fringe benefit enjoyed by the Employee immediately
prior to the Change in Control, or the failure by the Company to provide the
Employee with the number of paid vacation days to which the Employee is entitled
on the basis of years of service with the Company in accordance with the
Company's normal vacation policy in effect immediately prior to the Change in
Control; or
(viii) Any purported termination of the Employee's employment which is
not ef f ected pursuant to a Notice of Termination satisfying the requirements
of this Agreement; f or purposes of this Agreement, no such purported
termination shall be effective. The Employee=s right to terminate the Employee's
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employment for Good Reason shall not be affected by the Employee's incapacity
due to physical or mental illness. The Employee Is continued employment shall
not constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason hereunder.
10. Compensation upon Termination or During Disability. The Employee shall
be entitled to the following benefits during a period of disability, or upon
termination of the Employee's employment, as the case may be, provided that such
period or termination occurs during the Term of this Agreement;
(a) During any period that the Employee fails to perform his full-time
duties with the Company as a result of incapacity due to physical or mental
illness, the Employee shall continue to receive the Employee's base salary at
the rate in effect at the commencement of any such period, together with all
compensation payable to the Employee under the Company's disability plan or
program or other plan during such period, until the Employee's employment is
terminated pursuant to Section 9(a) hereof. Thereafter, or in the event the
Employee's employment shall be terminated by reason of the Employee's death, the
Employee's benefits shall be determined under the Company's retirement,
insurance and other compensation programs then in effect in accordance with the
terms of such programs.
(b) If at any time the Employee's employment shall be terminated (i)
by reason of the Employee's death, (ii) by the, Company for Cause or Disability
or (iii) by the Employee for any reason (other than, following the occurrence of
a Change in Control, for Good Reason), the Company shall pay him or the
appropriate payee, as the case may be (as determined in accordance with Section
11(b) hereof) the Employee's full base salary through the Date of Termination at
the rate in effect at the time Notice of Termination is given, plus all other
amounts to which the Employee is entitled under any compensation plan of the
Company At the time such payments are due, and the Company shall have no further
obligations to the Employee under this Agreement.
(c) If, prior to a Change in Control, the Employee's employment should
be terminated by the Company other than for Cause or Disability, the Employee
shall be entitled to the benefits provided below:
(i) The Company shall pay to the Employee his full base salary through
the Date of Termination at the rate in effect at the time the Notice of
Termination is given, no later than the fifth (Sth) day following the Date of
Termination, plus all other amounts to which he is entitled under any
compensation plan of the Company, at the time such payments are due;
(ii) The Company shall pay the Employee, in a lump sum payment, no
later than the fifth (Sth) day following the Date of Termination, all salary,
annual bonus payments and two percent (2%) bonus payments that would have been
payable to the Employee pursuant to this Agreement had the Employee continued to
be employed for the remaining Term of this Agreement, assuming for the purpose
of such continuing payments that the Employee's salary for each year of such
remaining Term is equal to his salary at the Date of Termination and that his
annual bonus and two percent (2%) bonus for each year of such remaining Term is
equal to the average of the annual bonuses and two percent (2%) bonuses paid to
him by the Company with respect to the three (3) fiscal years ended immediately
prior to the fiscal year in which the Date of Termination occurs; and
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(iii) The Company shall continue in effect for the benefit of the
Employee all insurance or other provisions for indemnification and defense of
officers or directors of the Company which are in effect on the date the Notice
of Termination is sent to the.Employee with respect to all of his acts an
omissions while an officer or director as fully and completely as if such
termination had not occurred, and until the final expiration or running of all
periods of limitation against actions which may be applicable to such acts or
omissions.
(d) If, following a Change in Control, the Employee's employment
should be terminated by the Company other than for Cause or Disability, of the
Employee's employment should be terminated by the Employee for Good Reason, he
shall be entitled to the benefits provided below:
(i) The Company shall pay to the Employee in a lump sum payment no
later than the fifth (5th) day following the Date of Termination all salary
through the Date of Termination at the rate in effect at the time the Notice of
Termination is given, plus all salary, annual bonus payments and two percent
(2%) bonus payments that would have been payable to the Employee pursuant to
this Agreement had the Employee continued to be employed for the remaining Term
of this Agreement, assuming for the purpose of such payments that his salary for
each year of such remaining Term is equal to his salary at the Date of
Termination and that his annual bonus and two percent (2%) bonus for each year
of such remaining Term is equal to the average of the annual bonuses and two
percent (2%) bonuses paid to him by the Company with respect to the three (3)
fiscal years ended immediately prior to the fiscal year in which the Date of
Termination occurs; plus all other amounts to which he is entitled under any
compensation plan of the Company, and
(ii) An amount equal to 2.98 times the total compensation paid and
payable to the employee under this agreement during and f or the year in which
the change of control occurs in a total lump sum to be paid to Employee under
Section 10(d)(i), above.
(iii) The Company shall continue in effect for the benefit o the
Employee all insurance or other provisions for indemnification and def ense of
of f icers or directors of the Company which are in ef f ect on the date the
Notice of Termination is sent to the Employee with respect to all of his acts
and omissions while an officer or director as f ully and completely Ai3 if such
termination had not o'ccurred, and until the final expiration or running of all
periods of limitation against actions which may be applicable to such acts or
omissions.
(e) The Employee shall not be required to mitigate the amountof any
payment provided for in this Section 10 by seeking other employment or
otherwise.
(f) In the event the employment of the Employee is terminated by the
Company without Cause or the Employee's employment is terminated by the Employee
under conditions entitling him to payment hereunder and the Company f ails to
make timely payment of the amounts then owed to the Employee under this
Agreement, the Employee shall be entitled to interest on such amounts at the
rate of five percent (5%) above the prime rate (defined as the base rate on
corporate loans at large U.S. money center commercial banks as published by the
Wall Street Journal), compounded monthly, for the period from the date such
amounts were otherwise due until payment is made to the Employee (which interest
shall be in addition to all rights which the Employee is otherwise entitled to
under this Agreement.)
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11. No Assignments. This Agreement is personal to each of the parties
hereto. No party may assign or delegate any rights or obligations hereunder
without first obtaining the written consent of the other party hereto, except
that this Agreement shall be binding upon and inure to the benefit of any
successor corporation to the Company.
(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes this Agreement by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by
the Employee and his personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Employee should die while any amount would still be payable to him hereunder had
he continued to live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to his devisee, legatee
or other designee or, if there is no such designee, to his estate.
12. Noncompetition. As part of the Employee's employment with the Company,
the parties acknowledge that the Employee has executed and delivered to the
Company a Nondisclosure and Noncompetition Agreement, dated as of the date
hereof.
13. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below, or to such other
addresses as either party may have furnished to the other in writing in
accordance herewith, except that notice of a change of address shall be
effective only upon actual receipt:
To the Company: Care Concepts, Inc.
Attention: Secretary 0000 X. Xxxxx
Xxxxxxx, Xxxxxxx 00000
To the Employee: Xxxx X. Xxxxxx
0000 X. Xxxxx
Xxxxxxx, Xxxxxxx 00000
14. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by all parties hereto.
15. Section Headings. The section headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation.of this Agreement.
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16. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not af f
ect the validity or enf orceability of the other provisions hereof.
17. Counterparts. This Agreement may be executed in several counter-parts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
18. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration, conducted
before a panel of three (3) arbitrators in Phoenix, Arizona in accordance with
the rules of the American Arbitration Association then in effect. Judgment may
be entered on the arbitrators award in any court having jurisdiction; provided,
however, that the Employee shall be entitled to seek specific performance of his
right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement. The
costs and expenses of such arbitration shall be borne in accordance with the
determination of the arbitrators.
19. Miscellaneous. No provision of this Agreement may be modified, waived,
or discharged unless such waiver, modification, or discharge is agreed to in
writing and signed by the Employee and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
pr3.or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Arizona without regard to its conflicts of law
principles.
All references to sections of the Exchange Act shall be deemed also to refer to
any successor provisions to such sections. Any payments provided for hereunder
shall be paid net of any applicable withholding required under federal, state or
local law. The obligations of the Company under section 10 and Section 12 shall
survive the expiration of the Term of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the date first indicated above.
THE COMPANY:
CARE CONCEPTS, INC.
a Nevada corporation
Attest: By:
------------------------------- -------------------------------
Xxxxxx X. Xxxxxx Secretary Xxxxx X. Xxxxxx, Executive
Vice President
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EMPLOYEE:
----------------------------------------
Xxxx X. Xxxxxx
XX 1st year $70,000 95 96
2nd year $77,000 96 97
3rd year $84,700 97 98
4th year $93.170 98 99 /12 = 7,674.16 x 4 months $31,057
5th year $102,487 99 00 93,170/26=3,983.46
BK 1st year $65,000
2nd year $71,500
3rd year $78,650
4th year $86,525 /12 = 7,209.58 86,515/26=3,327.50
5th year $95,165
DK 1st year $60,000
2nd year $66,000
3rd year $72,600
4th year $79,860 /12 = 6,655.00 79,860/26= 3,071,53
5th year $87,846
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JK 5th year $102,487 (first 6 months 99 $93,170 annually)
BK 5th year $ 95,165
DK 5th year $ 87,846
Paid July 99 one month $4,829.12 New Bridge Products, Inc. (Owed 5 months pay)
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