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EXHIBIT 10.24
COMPENSATION AGREEMENT
This Agreement is made this 24th day of February, 1996, between Xxxxx
Xxxxxxx ("Executive") and DS Medical Products Co., a corporation ("DS
Medical").
W I T N E S S E T H:
WHEREAS, DS Medical wishes to assure itself of continuity of
management in the event of any Change of Control of DS Medical or Biochem
International Inc. (the "Company"); and
WHEREAS, DS Medical believes it is important that Executive be able to
assess and advise the Company and DS Medical whether supporting a Change of
Control would be in the best interests of the Company and its shareholders
without being influenced by the uncertain effect of such a change upon
Executive's role within the Company and DS Medical; and
WHEREAS, the Company and the Executive have entered into a
Compensation Agreement, dated the same date hereof (the "Company Agreement"),
to provide the Executive certain rights and benefits from the Company; and
WHEREAS, DS Medical wishes to insure that the Executive will continue
to advise and be an employee of the Company and DS Medical, and to provide such
services as are required in such position, for a period of at least one year,
following any Change of Control of the Company or DS Medical; and
WHEREAS DS Medical wishes to maximize and protect the value of its
assets, including the stock of the Company, and believes the continuing
employment of the Executive will further these goals;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
ARTICLE I. OPERATION OF AGREEMENT.
1.1. This Agreement will be binding immediately upon its execution
by the parties hereto. Notwithstanding the foregoing, if, prior to any Change
of Control, Executive resigns from the Company, is dismissed for Cause, as
defined in paragraph 2.2 below, or dies, this Agreement shall terminate. The
termination of this Agreement will relieve DS Medical of the obligation to
provide Executive, in accordance with the terms hereof, the payments to which
he has become entitled under this Agreement.
1.2. "Change of Control" means a change of control of the Company
of a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange Act of 1934
(the "Act"), whether or not the Company is then subject to such reporting
requirement; provided, however, that, without limitation, such a Change of
Control shall be deemed to have occurred if:
(a) any person or group (as such terms are used in connection with
Sections 13(d) and 14(d) of the Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 and 13d-5 under
the Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the
Company's then outstanding securities; or
(b) the Company is a party to a merger, consolidation, sale of
assets or other reorganization, or a proxy contest, as a
consequence of which members of the Board of Directors in
office immediately prior to
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such transaction or event constitute less than a majority of
the Board of Directors thereafter.
Notwithstanding the foregoing provisions of this paragraph 1.2, a
"Change of Control" will not be deemed to have occurred solely because of the
acquisition of securities of the Company (or any reporting requirement under
the Act relating thereto) by an employee benefit plan maintained by the Company
for its employees.
ARTICLE II. ADDITIONAL BONUS PAYMENT.
2.1. Unless Executive's employment is terminated by the Company
during the one year period following the Change in Control for "Cause" (as
defined in paragraph 2.2 below) DS Medical will pay Executive, or his
beneficiary (as designated pursuant to Section 4.7 of the Company Agreement) or
estate, at the time payment is due under Article IV of the Company Agreement a
lump sum cash payment, in an amount equal to the amount due to Executive under
Section 4.1 of the Company Agreement, without taking into account the
limitation set forth in Article VI of the Company Agreement, less the amount of
lump sum payment received by the Executive under Section 4.1 of the Company
Agreement.
2.2. If Executive is dismissed by the Company for Cause, he will
not be entitled to payments provided under paragraph 2.1 above. "Cause" means
only the willful commission by Executive of theft, embezzlement or other
serious and substantial crimes against the Company. For purposes of this
definition, no act or omission shall be considered to have been "willful"
unless it was not in good faith and Executive had knowledge at the time that
the act or omission was not in the best interest of the Company.
ARTICLE III. EXPENSES
It is the intent of DS Medical that the Executive not be required to
incur any expenses associated with the enforcement of his rights under this
Agreement by legal action or arbitration proceeding because the cost and
expense thereof would substantially detract from the benefits intended to be
extended to the Executive hereunder. Accordingly, if Executive determines in
good faith that DS Medical has failed to comply with any of its obligations
under this Agreement, or if DS Medical or any other person takes any action to
declare this Agreement void or unenforceable, or institutes any legal action or
arbitration proceeding designed to deny Executive, or to recover from him, the
benefits intended to be provided hereunder, DS Medical irrevocably authorizes
Executive from time to time to retain counsel of his choice, at the expense of
DS Medical as hereafter provided, to represent Executive in connection with any
and all actions and proceedings, whether by or against the Company, DS Medical,
or any director, officer, stockholder or other person affiliated with the
Company, which may adversely affect Executive's rights under this Agreement.
In addition, notwithstanding any existing or prior attorney-client relationship
between DS Medical and such counsel, DS Medical irrevocably consents to
Executive's entering into an attorney-client relationship with such counsel and
agrees that a confidential relationship shall exist between Executive and such
counsel. Without limiting the effect of the foregoing provisions of this
Article III, DS Medical shall pay or cause to be paid and shall be solely
responsible for any and all attorneys' and related fees and expenses incurred
by Executive as a result of DS Medical's failure to perform under this
Agreement.
ARTICLE IV. WITHHOLDING
All payments required to be made by DS Medical hereunder to Executive
or his dependents, beneficiaries or estate will be subject to the withholding
of such amounts relating to tax and/or other payroll deductions as may be
required by law.
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ARTICLE V. AMENDMENT
No amendment, change or modification of this Agreement may be made
except in writing, signed by both parties.
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ARTICLE VI. GENERAL
6.1. The provisions of this Agreement shall be binding upon and
shall inure to the benefit of Executive, his executors, administrators, legal
representatives and assigns, and DS Medical and its successors.
6.2. The validity, interpretation and effect of this Agreement
shall be governed by the laws of the State of Wisconsin.
6.3. There shall be no right of set-off or counterclaim, in respect
of any claim, debt or obligation, against any payments to Executive, his
dependents, beneficiaries or estate provided for in this Agreement.
6.4. No right or interest to or in any payments shall be assignable
by Executive; provided, however, that this provision shall not preclude him
from designating one or more beneficiaries to receive any amount that may be
payable after his death and shall not preclude the legal representative of his
estate from assigning any right hereunder to the person or persons entitled
thereto under his will or, in the case of intestacy, to the person or persons
entitled thereto under the laws of intestacy applicable to his estate. The
term "beneficiaries" as used in this Agreement shall mean a beneficiary or
beneficiaries so designated to receive any such amount, or if no beneficiary
has been so designated, the legal representative of the Executive's estate.
6.5. No right, benefit or interest hereunder, shall be subject to
anticipation, alienation, sale, assignment, encumbrance, charge, pledge,
hypothecation, or set-off in respect of any claim, debt or obligation, or to
execution, attachment, levy or similar process, or assignment by operation of
law. Any attempt, voluntary or involuntary, to effect any action specified in
the immediately preceding sentence shall, to the full extent permitted by law,
be null, void and of no effect.
6.6. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision.
IN WITNESS WHEREOF, DS Medical and Executive have each caused this
Agreement to be duly executed and delivered as of the date set forth above.
DS Medical Products Co.
By
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ATTEST:
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Xxxxx Xxxxxxx
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