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BIOSTAR, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (the "AGREEMENT") is made and entered into as
of the 1st day of September, 1997, by and between BioStar, Inc., a Delaware
corporation (the "COMPANY"), and Xxxxxx X. Xxxxxxxxx ("EXECUTIVE").
WHEREAS, Executive is currently serving as Vice President, Finance and
Manufacturing and in such position Executive is considered to be a key employee
of the Company;
WHEREAS, the Company and Executive acknowledge that Executive's
knowledge, abilities and services are unique and important to the success of
the Company; and
WHEREAS, the Company and Executive desire to set forth in writing the
terms of their agreement with respect to Executive's continued employment by
the Company.
NOW, THEREFORE, the parties hereto agree as follows:
1. EMPLOYMENT; DUTIES. Subject to the terms and conditions set forth
herein, the Company agrees to employ Executive and Executive hereby accepts
such employment. Executive shall serve in an executive capacity and shall
perform such duties as are customarily associated with his then current title,
consistent with the Bylaws of the Company and as required by the President or
Board of Directors of the Company. During the term of his employment with the
Company, Executive will devote his best efforts and substantially all of his
business time and attention to the business of the Company. This Agreement is
for at-will-employment.
2. SALARY AND BENEFITS
(a) BASE SALARY AND PERFORMANCE BONUS. Executive will receive for
services to be rendered hereunder an annualized base salary of One Hundred Ten
Thousand Dollars ($110,000), payable on a bi-weekly basis, subject to
adjustment in accordance with the policies of the Company. Executive may
receive such discretionary performance bonuses as the Compensation Committee of
the Board of Directors of the Company, in its sole discretion and from time to
time, deems appropriate. Executive shall be eligible for a cash performance
bonus of no less than twenty percent (20%) of Executive's base salary based
upon Executive's achievement of performance targets and based upon the overall
performance of the Company, all as determined by the Compensation Committee of
the Board of Directors. All such payments are subject to ordinary withholdings
for tax and social security purposes.
(b) VACATION. Executive will accrue paid vacation time pursuant
to the Company's general vacation policy, which will not be less than the
vacation policy in effect on the date of this Agreement.
(c) BENEFITS. Executive will be entitled to participate in the
Company's standard Executive benefit programs, including medical and disability
programs, and in such additional
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benefit programs, as may in the future be made available by the Company to the
extent that he is eligible under the general provisions thereof. Benefit
programs made available to Executive in the future will be no less favorable
benefit programs made available to Executive in effect on the date of this
Agreement.
(d) MANAGEMENT INCENTIVE PLAN. Executive is currently allocated 4
Units out of the total 100 Units available to management of the Company in the
Management Incentive Plan in effect as of the date hereof (the "Plan").
Executive shall be compensated for such Units in accordance with the terms of
the Plan. In any event, the payment made to Executive from the Plan shall not
exceed $100,000.
3. TERMINATION.
(a) MUTUAL AGREEMENT. This Agreement may be terminated at any
time by the mutual written agreement of the Company and Executive.
(b) TERMINATION OTHER THAN FOR CAUSE OR CONSTRUCTIVE TERMINATION.
If Executive is terminated by the Company for any reason other than for Cause
(as defined in Section 5 below) or is Constructively Terminated by the Company
(as defined in Section 5 below), and in exchange for Executive signing a waiver
of claims against the Company as of the termination date in a form acceptable
to the Company, Executive will receive the following for three (3) full
calendar months following such termination:
(i) The Company shall pay to Executive six and one-half
(6.5) times his last base bi-weekly salary prior to termination, net of any
necessary taxes or deductions, payable in a lump sum or with the Company's
normal payroll timetable, at the Company's option;
(ii) The Company shall pay Executive all accrued
compensation, including payment for accrued but unused vacation days,
unreimbursed expenses to the date of termination as provided herein, as well as
any expenses incurred by the Executive with the Company's prior written
approval, such as expenses incurred in returning Company records);
(iii) Pursuant to the provisions of COBRA, the Company
shall provide Executive and his or her family with all group health benefits
which the Company provided immediately prior to such termination; provided,
however, that such benefits will be terminated if Executive subsequently joins
or becomes employed by another organization which provides Executive and his
family with group health benefits comparable to those provided by the Company
under this paragraph. The Company shall be responsible for paying all COBRA
premiums for no more than twelve (12) months;
(iv) Three (3) months of vesting for all stock options
held by Executive shall automatically be accelerated to the date of termination
and all vested options may be exercised by Executive according to their terms;
and
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(v) If Executive is terminated, other than for Cause, or
is Constructively Terminated within one hundred twenty (120) days of the day
that the Company enters into a binding agreement for the Sale of the Company,
which sale is consummated pursuant to the terms of such binding agreement, then
Executive shall be entitled to receive the full amount of consideration for his
Units in the Plan. The payment under the Plan will be payable at the same time
that any other employees of the Company receive the consideration for their
units under the Plan.
(c) FOR CAUSE OR MUTUAL AGREEMENT. The Company may terminate this
Agreement at any time for Cause effective immediately upon written notice to
Executive (except termination for Cause which requires advance notice as set
forth in the definition of Cause set forth in Section 5 below). If the Company
terminates this Agreement for Cause, or if this Agreement is terminated by
Executive and the Company by mutual agreement, Executive shall not be entitled
to any further payments except (i) unreimbursed expenses to the date of
termination and (ii) any accrued compensation, including accrued benefits,
excluding any compensation under the Plan. Executive shall forfeit his units
under the Plan and accelerated stock vesting pursuant to Section 3(b)(iv) if
this Agreement is terminated pursuant to this Section.
(d) DISABILITY OR DEATH. The Company may terminate this Agreement
upon the death or disability of Executive. For purposes of this Agreement,
Executive shall be considered disabled if he is unable to perform his duties
under this Agreement as a result of injury, illness or other disability for a
period of one hundred eighty (180) consecutive days, or one hundred eighty
(180) days in a three hundred sixty-five (365) day period, and shall not have
returned to the performance of duties within thirty (30) days after receiving
written notice of termination. If the Company terminates this Agreement upon
the death or disability of Executive:
(i) The Company shall pay Executive or his estate a lump
sum equal to all accrued compensation, including accrued benefits, and
unreimbursed expenses to the date of termination as provided herein;
(ii) If the Company terminates this Agreement upon the
death or disability of Executive within one hundred twenty (120) days of the
day that the Company enters into a binding agreement for the Sale of the
Company, which sale is consummated pursuant to the terms of such binding
agreement, then Executive, or Executive's estate, shall be entitled to receive
the full amount of consideration for his units in the Plan. The payment under
the Plan will be payable at the same time that any other employees of the
Company receive the consideration for their units under the Plan.
(e) DATE OF TERMINATION; PAYMENT. In each of the foregoing cases,
except those provisions where termination is automatic upon notice to
Executive, termination is the date of actual termination, not the date notice
of termination is given. All payments for unpaid monthly compensation shall be
made based upon the normal payroll processing schedule and all payments for
reimbursement shall be made within forty-five (45) days after the end of the
month following the month in which termination occurred.
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4. MISCELLANEOUS.
(a) ASSIGNMENT. This Agreement may not be assigned by any party
hereto; provided, however, that the Company may assign this Agreement in
connection with a Sale of the Company so long as the assignee assumes all of
the Company's obligations thereunder.
(b) NOTICES. Any notices provided hereunder must be in writing
and shall be deemed effective upon the earlier of personal delivery (including
personal delivery by telex) or the third day after mailing by first class mail
to the recipient at the address indicated below:
To the Company:
BioStar, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: President
Phone: (000) 000-0000
Fax: (000) 000-0000
To Executive:
Xxxxxx X. Xxxxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
or to such other address or to the attention of such other person as the
recipient party will have specified by prior written notice to the sending
party.
(c) WAIVER. A waiver by the Company or Executive of a breach of
any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.
(d) GOVERNING LAW. This Agreement shall be deemed a contract made
under, and for all purposes shall be construed in accordance with, the laws of
the State of Colorado.
(e) SEVERABILITY. In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions or portions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.
(f) ENTIRE AGREEMENT. This Agreement and the Plan contain the
entire agreement of the parties with respect to the subject matter hereof.
This Agreement may be changed only by an agreement in writing signed by the
parties.
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(g) COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
5. DEFINITIONS. As used herein, the following terms shall have the
following meanings:
(a) "CAUSE" as used herein shall mean: (i) dishonesty which is
not the result of an inadvertent or innocent mistake of Executive with respect
to the Company or any of its subsidiaries; (ii) willful misfeasance or
nonfeasance of duty by Executive that materially injures the reputation,
business or business relationships of the Company or any of its subsidiaries or
any of their respective officers, directors or Executives; (iii) any conduct
which would be sufficient to criminally charge Executive with the commission of
a crime involving moral turpitude or a crime other than a vehicle offense which
could reflect in some material fashion unfavorably upon the business or
business relationships of the Company or any of its subsidiaries or any of
their respective officers, directors or Executives; (iv) willful or prolonged
absence from work by Executive (other than by reason of disability due to
physical or mental illness) or failure, neglect or refusal by Executive to
perform his duties and responsibilities without the same being corrected upon
thirty (30) days prior written notice; or (v) if Executive materially violates
any term of this Agreement or the Company's employment policies and procedures
(including but not limited to the Company's policies with respect to sexual
harassment and discrimination) and such action or failure is not remedied or
reasonable steps to effect such remedy are not commenced within thirty (30)
days of written notice.
(b) "CONSTRUCTIVE TERMINATION" as used herein shall mean: (i) if
the Company materially violates any term of this Agreement, or (ii) if, after a
Sale of the Company (as defined below): (A) the Company moves the Company's
headquarters more than 35 miles from the Company's location in Boulder,
Colorado; or (B) if the Company unilaterally makes significant detrimental
changes in Executive's job responsibilities or title, and such action or
failure is not remedied after twenty (20) days written notice, and in the case
of either (A) and (B), Executive elects to terminate this Agreement immediately
upon written notice to the Company.
(c) "SALE OF THE COMPANY" as used herein shall have the same
meaning as set forth in the Plan.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
BIOSTAR, INC. EXECUTIVE
By: /s/ Xxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxx Xxxxxx X. Xxxxxxxx
President/Chief Executive Officer
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