EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("this Agreement") is made and entered into as of
the 1st day of June. 2002, by and between Surgical Safety Products, Inc, a New
York corporation (the "Company"), and R. Xxxx Xxxx, an individual ("Xxxx", "he",
"his", or "him") (referred to hereinafter, each as a "Party", and collectively
as the "Parties").
WHEREAS, the Company desires to employ Xxxx as the Company's Executive
Vice-President & Chief Financial Officer (CFO) to perform the duties as set
forth in this Agreement; and
WHEREAS, Xxxx is willing to accept such employment upon the terms and
conditions set forth in this Agreement, and further conditioned upon the
Company's continued and faithful performance of its duties and obligations under
this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the promises contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties, intending to be legally bound,
agree as follows:
1. Effective Date and Term:
1.01 Term and Effective Date: The term of Xxxx'x employment shall commence
on the date hereof (the "Effective Date") and shall, continue until terminated
pursuant to the provisions for termination as hereinafter provided in ss.5 of
this Agreement.
2. Xxxx'x Duties and Authority
2.01 Duties: Xxxx shall be assigned and perform those duties of the type,
nature and dignity normally assigned to the Executive Vice President & Chief
Financial Officer of an entity similar in type and nature to that of the
Company. Xxxx shall devote 100% of his work time (excepting periods of vacation,
illness, disability, and Permitted Activities as hereinafter defined), services
and abilities to the Company and its accounting and financial affairs and
requirements, during the normal business hours of the Company.
2.02 Authority: Xxxx shall participate in and manage all decisions
regarding the Company's operational, administrative, business, and financial
affairs of the Company. Xxxx shall be responsible to, and shall report directly
to Company CEO. Xxxx shall be kept advised and timely informed of information,
issues, or problems relevant to operational, administrative, business, and
financial affairs of the Company.
1
2.03 Support: Xxxx shall be afforded office space, computer support
(including legal and corporate data bases), reference materials, subscriptions,
Continuing professional education ("CPE") and other materials and support
necessary to perform his duties and responsibilities, and maintain professional
proficiency and skill. Xxxx shall be provided reasonable administrative and
in-house professional support, including the right to engage, at his discretion,
the services and advice of outside auditors and accountants to assist him in the
performance of his duties, including providing accounting and auditing expertise
and advice in matters and areas in which he, in his discretion, feels desirable,
and he shall have the authority and discretion to terminate the services of any
such outside support.
3. Compensation
3.01 Base Salary: Xxxx shall be paid an annual base salary ("Base Salary")
of One Hundred Fifty Thousand ($150,000.) Dollars, payable in no less frequent
installments than twice monthly. Upon the first anniversary form the Effective
Date his Base Salary shall be increased by an amount equal to not less than ten
(20%) percent and shall be paid on the same basis and frequency as provided
above; and over that paid payable for the immediately preceding term, or in such
greater amount as the Company and Xxxx shall agree.
3.02 Discretionary Bonus Compensation: In the discretion of the Company's
President & CEO, and based upon his annual performance evaluation Xxxx may be
awarded cash bonuses, in addition to his Base Salary, the amount of said bonus
to be based upon the extent to which the Company's gross revenues have increased
during the period, up to a maximum of 100% of Xxxx'x Base Salary for the period
in which the bonus is awarded ("Discretionary Bonus"). The Discretionary Bonus
shall be in addition to, not in lieu of, bonuses, awards, and benefits given or
received by Xxxx underss.3.03 andss.4 of this Agreement.
3.03 Withholding of Taxes: The Company shall cause to be withheld from
Xxxx'x taxable compensation or benefits, and remitted to the appropriate taxing
authority, all federal, state and local taxes as shall be required to be
withheld by law, regulation or ruling.
2
4. Benefits and reimbursement
4.01 Business Related Benefits, Payments and Reimbursements: Xxxx shall
receive the following benefits in addition to the compensation provided inss.3
of this Agreement: i) fully paid family health insurance under the company group
plan; ii) fully paid family dental insurance under company group plan; iii)
payment or reimbursement of all business related use of telephone (including
cellular), home fax, and other business related productivity devices; v) payment
or reimbursement of all business related travel expenses; and iv) fully
compensated leave and vacation at his discretion reasonably exercised in
recognition of his duties and performance requirements.
4.02 Fringe Benefits: Xxxx shall be entitled to receive all fringe benefits
afforded to, and upon the same basis as, the highest executives of the Company,
including, but not limited to: participation in the Company's 401k Plan; life
insurance (including any tax sheltered annuity plan "split dollar" plan, and
executive term life coverage available); awards under all stock option, bonus,
and incentive plans of the Company; Company paid health and reimbursement
(medical and dental) coverage for him and his spouse; short term sick leave and
long term disability benefits coverage; and accident insurance coverage.
4.03 Rights Regarding Stock. (a) Company stock issued or acquired by Xxxx,
or, if applicable, Company stock acquired through the exercise of any option to
purchase such stock shall i) be issued to Xxxx without restriction on his
immediate sale or disposition of such stock; ii) shall be fully registered, or
if no registration statement has yet been made effective, will have "Piggy-Back"
rights whereby Xxxx may elect, and the Company shall give Xxxx adequate notice
for him to make such election, to have such shares included on the next
registration statement filed by the Company after such payment or grant at the
Company's sole expense; iii) shall not, without Xxxx'x written consent, be
subject to any "Lock-up", or "Stand-still" agreement ; provided however, that if
such an agreement is required by an underwriter of, and as a condition of, a
public offering of such stock, then Xxxx may, in his discretion, "put" such
number of shares to the Company as he shall elect, at such price per share as
may be agreed to by the Parties, and the Company shall, as a condition precedent
to Xxxx'x consent, pay Xxxx in full for such shares and Xxxx shall thereupon
give his written consent to and shall enter into such agreement.
(b) With reference to any options to purchase Company Stock which may be
granted to Xxxx, should at anytime: i) the Company elect to make a public
offering of its stock; or ii) should there occur a "change in control" of the
Company whereby (and which shall, for the purposes of this Agreement be defined
as) any "Person" (as that term is defined or used for purposes ofss.13(d) or
14(d) of the Exchange Act acquires "Beneficial Ownership"(within the meaning of
Rule 13d-3 under the Exchange Act)) voting securities of the Company ("Voting
Securities") representing 20% or more of the combined voting power of the
Company's then outstanding Voting Securities; or iii) should there occur w) an
acquisition of 30% or more of the Company's assets, x) a merger, y) a
consolidation, or z) a reorganization, involving the Company; then upon the
occurrence of any of the aforesaid any options still unvested at the time of
such occurrence shall become immediately vested and exercisable.
3
5. Termination
5.01 Termination by the Company for Cause: (a) The Company may terminate
this Agreement for "Cause" by giving Xxxx thirty (30) days written notice.
"Cause shall be defined as and shall be only upon the following conditions:
1) conviction of a criminal offense, other than a traffic related offense;
2) gross disregard or intentional misconduct in the performance of his
duties as set out inss.2, including engaging in activities for profit outside
of his duties for the Company, except for Permitted Activities;
3) any intentional act which materially damages the Company's
reputation; and
4) inability to substantially perform his duties and responsibilities by reason
of physical or mental disability, which shall be determined, at the Company's
expense, by the opinion of at least two of a panel of three licensed
physicians, two of whom may be selected by Xxxx, one or more of whom must
specialize in the area of Xxxx'x allegedly disabling condition.
In the event of termination of this Agreement for Cause under 1), 2), or 3)
of thisss.5.01(a), Xxxx shall be entitled to no further salaried compensation or
bonuses after the effective date of termination, except as provided in ss.5.04.
Such termination may be made effective immediately upon the Company's payment in
full upon such effective date of Xxxx'x salaried compensation under this
Agreement which would become due over the thirty (30) day notice period,
together with such other sums as provided underss.5.04.
In the event that this Agreement is terminated for Cause as specified under
4) of thisss.5.01(a), Xxxx shall receive Termination Payments (as defined
inss.5.02(b)) for 90 days from the effective date of termination.
5.02 Involuntary Termination: (a) The Company shall be entitled to
terminate Xxxx'x employment for any reason other than Cause only by giving him
ninety (90) days written notice ("Involuntary Termination"). The Company shall
have the right to make such termination effective at any time prior to the
expiration of the 90-day notice period by paying Xxxx immediately upon the
giving of such notice of termination all compensation and benefits due and to
become due under this Agreement for the 90-day notice period, and such portion,
if any, of the bonus compensation underss.ss.3.02 and 3.03 as shall be due but
unpaid to him as of the expiration of the 90-day period.
4
(b) If the Company terminates this Agreement for any reason other than
Cause then in addition to the payments provided in (a) of thisss.5.02, the
Company shall pay and provide to Xxxx, all of the compensation provided
underss.3.01 andss.3.02 of this Agreement, at the rate and level as shall then
be in effect; plus the insurance fringe benefits provided underss.4.02
(collectively, the "Termination Payments") and shall continue to pay and provide
to him following the effective date upon which such termination shall occur, for
(i) 6 months if termination occur prior to six months from the Effective Date,
or (ii) 3 months should the termination occur thereafter ("Post Termination
Period").
Termination by Xxxx: (a) Xxxx may terminate his employment with the
Company, at any time, at his discretion ("Resign") upon the giving of written
notice to the Company. In the event that Xxxx Resigns for other than Good Reason
(as hereinafter defined), he shall receive no Termination Payments, or any other
or further compensation except as provided inss.5.04 of this Agreement.
Provided, however, that should Xxxx Resign for Good Reason (as hereinafter
defined) he shall be entitled to receive, and shall receive, as provided
inss.5.02, Termination Payments for 6 months following the effective date upon
which he Resigns. "Good Reason" shall be defined, and shall be deemed to exist
or occur for any one of the following: i) if Xxxx'x position, day-to-day duties,
or responsibilities with the Company are diminished or otherwise changed or
modified without his consent; ii) should his working relationship or treatment
by the Company's senior management be degraded, or should he be required or
demanded to take or commit an act or omission which Gray deems, in his
reasonable discretion, to be illegal or unethical; iii) should for any reason
his then current cash or stock compensation be reduced, or his benefits and
perquisites underss.4 be materially reduced, or any of the foregoing not be
timely paid or provided; iv) if there occurs or exists a change in the
management control of the Company or in its Board of Directors; v) if their
occurs a "change in control" as defined inss.3.03(a); vi) if the Company
relocates Xxxx'x daily work-place to a location outside of a 000-xxxx xxxxxx xx
Xxxxxxxx, Xxxxxxx, except for reasonably required and occasional travel on the
Company's business; or vii) if the Company fails or refuses to timely provide or
perform any of its duties, obligations, commitments, or undertakings under this
Agreement.
(b) If Xxxx Resigns his employment for Good Reason then in addition to the
payments provided in ofss.5.02(a), the Company shall pay and provide to Xxxx,
and shall continue to pay and provide to him Benefits for the Post Termination
Period.
5.04 Effect of Termination Under Certain Circumstances On Unvested Option
Grants: In the event that Xxxx'x employment shall terminate either: i)
involuntarily for Cause underss.5.01(a), 4); or ii) involuntarily underss.5.02;
or iii) because Xxxx Resigns with Good Reason underss.5.03, all stock options
which are yet unvested as of the effective date of such termination shall upon
such effective date become immediately vested and exercisable.
5
5.05 Unpaid Compensation: In addition to and notwithstanding any other
payments provided under this Agreement, including thisss.5, upon his
termination, regardless of the reason or cause therefor, Xxxx shall be paid any
and all earned or accrued but unpaid benefits and compensation including,
without limitation, reimbursement for incurred expenses, and any bonus
compensation earned but unpaid as of the effective date of such termination.
6. Miscellaneous Provisions
6.01 Notices: Notices required or permitted to be given under this
Agreement shall be sufficient if in writing and delivered by hand, or sent by
certified or registered mail--return receipt requested and postage prepaid, to
the Parties at their respective addresses as follows, or to such other recipient
as the Parties, or either of them, shall designate in writing to the other:
To the Company: Surgical Safety Products, Inc.
Attn: The Board of Directors
One Sarasota Tower
0 Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 FAX
To Xxxx: R. Xxxx Xxxx
00000 Xxxx Xxxxxx XX
Xxxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 FAX
6.02 Non-waiver of Breach: The waiver by a Party of a breach of any
provision(s) of this Agreement shall neither be deemed, operate, nor be
construed as a waiver by either Party of any other, or subsequent, breach.
6.04 Amendment: This Agreement may neither be amended nor modified except
by a writing executed by both of the Parties.
6.05 Governing Law: This Agreement shall be governed by the laws of the
Commonwealth of Virginia.
6.06 Separability: Should any provision, condition, or term of this
Agreement, or part thereof, be deemed or determined to be illegal, prohibited,
6
or null and void, it shall not effect the enforceability of any other of the
remaining provisions, conditions, or terms hereof, and the remaining provisions,
conditions, and terms shall be enforced as though the provision, condition, or
term so deemed or determined had not been contained herein.
6.07 Arbitration: The Parties agree that disputes, controversies, or claims
arising out of or related to this Agreement, which can not be settled by
agreement of the Parties, including a claim of breach thereof, and including the
issue of arbitrability, shall be determined by a single arbitrator appointed by
agreement of the Parties, or if unable to agree, then by the American
Arbitration Association ("the AAA"). The arbitration shall be conducted in
accordance with the then current Commercial Arbitration Rules of the AAA, or
such other rules as to which the Parties may agree. The Parties shall each bear
their respective costs and expenses of the arbitration. The decision of the
arbitrator shall be final and binding upon the Parties, and a fully enforceable
judgment may be entered upon the award in any court of competent jurisdiction.
6.08 Successors and Assigns: (a) This Agreement shall be binding upon and
shall inure to the benefit of the Company and its successors and assigns, and
the Company shall require any successor or assign 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 there had been no such succession or
assignment. The term "successors and assigns" shall mean a corporation or other
entity, or individual acquiring all or substantially all the assets and business
of the Company whether by operation of law or otherwise; and the term "the
Company", as used herein, shall be deemed to include such successors and
assigns.
(b) Neither this Agreement nor any right or interest hereunder shall be
assignable or transferable by Xxxx, his beneficiaries or legal representatives,
except by will or the applicable laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Xxxx'x personal
representative.
6.09 Indemnification: The Company shall indemnify Xxxx and hold him
harmless from any and all suits, claims, demands, and liability of any and every
kind and nature ("Proceeding"), against all Expenses (as hereinafter defined)
incurred or suffered by him in connection therewith, including those to which he
is threatened to be made a party, arising out of or related, in whole or in
part, to acts or omissions in connection with, or within the scope of, his
employment or activities with the Company, provided that such act or omission
was taken or performed, or omitted to be taken or performed, in good faith by
Xxxx, and in a manner which he reasonably believed to be not opposed to the
Company's best interest. As used in this Agreement, the term "Expenses" shall
include, without limitation, damages, losses, judgments, liabilities, fines,
penalties, excise taxes, settlements, and costs, attorneys' fees, accountants'
fees, investigations, and any expenses of establishing a right to
indemnification under this Agreement. Expenses incurred by Xxxx in connection
with any Proceeding shall be paid by the Company in advance upon request of Xxxx
that the Company pay such Expenses. Such indemnification obligation shall
continue as to Xxxx even if he has ceased to be an officer, director, or agent,
or is no longer employed by the Company and shall inure to the benefit of his
heirs, executors and administrators. The company shall not, without Xxxx'x prior
written consent, settle any action or claim in any manner that would not include
a full and unconditional release of Xxxx. Neither the Company nor Xxxx will
unreasonably withhold or delay their consent to any proposed settlement. The
7
Company shall provide Xxxx coverage equal to that afforded the highest executive
of the Company under the directors' and officers' liability policy currently and
from time to time in force, or, if none, a policy commercially acceptable to
Xxxx; but in no event shall Xxxx be obligated or required to satisfy or
contribute to any self-insured retention, deductible or similar provision under
such policies, as those terms are used in their commercial meaning within the
insurance industry.
6.10 Entire Understanding: This Agreement represents the full, complete and
entire understanding of the Parties with respect to the matters contained in
this Agreement, and there are no other contracts, representations,
understandings, agreements, undertakings, conditions precedent or subsequent, or
other obligations of any kind or nature, expressed or implied, written or oral,
which are not set forth in, or have been or shall be made or entered into
pursuant to, this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement, the Company
acting by and through its duly authorized officer, as of the date first above
written.
Surgical Safety Products, Inc.
("the Company"):
By:/s/ Xxxxxxx Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: CEO & Chairman of the Board
Employee:
By:/s/ R. Xxxx Xxxx
Name: R. Xxxx Xxxx
Title: Executive Vice President & CFO
