EXHIBIT 10.11
EMPLOYMENT CONTRACT
This Employment Contract ("Contract" or "Agreement") is entered in to this 6th
day of December, 2004 by and between Xxxxx X. Xxxxx ("Executive") and U.S.
MEDSYS CORP. ("Company"). Executive and Company are sometimes referred to
collectively herein as the "Parties."
WITNESSETH:
WHEREAS, the Company desires to enter into the Agreement in order to
employ Executive according to the terms set forth in this Agreement; and
WHEREAS, Executive desires to accept such employment upon the terms set
forth in the Agreement;
NOW THEREFORE, in consideration of the promises and mutual covenants
contained herein and for other good and valuable consideration, the adequacy and
receipt of which are hereby acknowledged, the Parties agree as follows:
1. EMPLOYMENT.
(a) The Company hereby employs the Executive (the "Employment") as
Chairman. It is the intention of the Parties that Executive shall, in the role
of Chairman, preside at all meetings of shareholders and of the Board of
Directors and shall be the officer primarily responsible for developing
strategic plans, developing corporate and securities governance compliance
policies, and overseeing and supervising the other officers of the Company,
subject to the oversight of the Company's Board of Directors (the "Company
Board"). Executive hereby accepts the Employment and agrees to: (i) render such
executive services; (ii) perform such executive duties; and (iii) exercise such
executive supervision and powers to, for and with respect to the Company for the
period and upon the terms set forth in this Agreement.
(b) Executive's primary place of employment will be based at the
Company's offices at 0000 - 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx.
2. TERM. Except as otherwise specifically provided in Section 5 below,
the term of this Agreement (including any renewal periods, the "Term") shall
commence on December 6, 2004 (the "Effective Date"), and shall continue until
December 6, 2007;
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provided, however, this Agreement shall be automatically renewed annually
thereafter, unless either party provides the other with written notice at least
60 days prior to the expiry of the then applicable Term that they with to
terminate the agreement at the end of such Term.
3. COMPENSATION.
3.1. BASE SALARY. Executive shall be paid a base salary (the "Base
Salary") at an annual rate of one hundred and ninety five thousand dollars
($195,000), payable in equal monthly installments. During the Term, the Base
Salary shall be reviewed at least annually by the Company Board, and may not be
decreased in connection with any such review. Any increase in the Base Salary
effected at such review shall not serve to limit or reduce any other obligation
to Executive under this Agreement. The Base Salary shall not be reduced after
any such increase and the term "Base Salary" shall refer to the Base Salary as
so increased.
3.2 AUTO ALLOWANCE. Executive shall receive the $1,350.00 per month for
auto expenses. In addition, Executive shall also be reimbursed in full for all
business related fuel, tolls, and parking costs.
3.3 HEALTH INSURANCE. During the Term, (i) Executive shall be entitled
to participate in all incentive, savings and retirement plans, practices,
policies and programs of the Company and any affiliated companies to the same
extent as senior executives of the Company, if, as and when the Company adopts
any such plans, practices, policies and programs; and (ii) Executive and/or
Executive's family shall be eligible for participation in, and shall receive all
benefits under, all welfare benefit plans, practices, policies and programs
provided by the Company and its affiliated companies (including, without
limitation, medical, prescription, dental, disability, salary continuance,
employee life insurance, group life insurance, accidental death and travel
accident insurance plans and programs) to the same extent as senior executives
of the Company, if, as and when the Company adopts any such plans, practices,
policies and programs. In addition, the Company shall reimburse Executive for
all of his costs to maintain his current health insurance benefits until
Executive is participating, without exclusions, in comparable welfare benefit
plans, practices, policies and programs provided by the Company and its
affiliated companies.
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3.4 VACATION AND SICK TIME. Executive shall be entitled to four weeks'
paid vacation per year and up to ten paid sick/personal days per year; provided
that Executive shall be paid for any vacation not taken during any given year in
a lump sum cash payment by April 30th of the subsequent year.
3.5 STOCK OPTION PLAN. Executive shall be entitled to participate in a
Company stock option plan to the same extent as other executives of the Company,
if, as and when the Company adopts any such plan.
3.6 LIFE AND DISABILITY INSURANCE. Within 30 days, the Company shall
obtain, pay for, and maintain an insurance policy, for the duration of the Term
and any severance period, to provide $1,000,000 in coverage in the event of
death or permanent disability of Executive, payable to Executive's designated
beneficiary, or, in the absence of such designation, the estate or other legal
representative of Executive.
3.7 OFFICE ALLOWANCE. Executive shall receive the $2,500.00 per month
for office expense in Denver, Colorado. In addition, Executive shall also be
reimbursed full for all incidental office related costs.
4. EXPENSES. Executive is expected and is authorized, to incur expenses
in the performance of his duties hereunder, including, without limitation, the
costs of entertainment, travel, and similar business expenses, all in accordance
with Company policies applicable to all similarly situated executives. The
Company shall promptly reimburse Executive for all such expenses upon periodic
presentation by Executive of an accounting of such expenses on terms applicable
to senior executives of the Company, all in accordance with Company policies
applicable to all similarly situated executives.
5. CONSEQUENCES OF TERMINATION OF EMPLOYMENT.
5.1. DEATH. In the event of the death of Executive during the Term,
Executive's Employment hereunder shall be terminated as of the date of his death
and Executive's designated beneficiary, or, in the absence of such designation,
the estate or other legal representative of Executive (collectively, the
"Estate"), shall promptly be paid Executive's unpaid Base Salary through the end
of the month in which the death occurs and any unreimbursed expenses, plus a
lump sum equal to one year of Base Salary. The Estate shall be entitled to all
other death benefits in accordance with the terms of the Company's benefit
programs and plans in which Executive is enrolled.
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5.2. DISABILITY. In the event Executive shall be unable to render the
services or perform his duties hereunder by reason of illness, injury or
incapacity (whether physical, mental, emotional or psychological) (any of the
foregoing shall be referred to herein as a "Disability") for a period of ninety
(90) consecutive business days and a physician selected by the Company or its
insurers, and acceptable to Executive or Executive's legal representative, has
determined that such Disability is likely to continue beyond 180 business days,
the Company shall have the right to terminate this Agreement by giving Executive
written notice which shall be effective on the 30th day after receipt of such
notice by Executive (the "Disability Effective Date"), unless Executive returns
to full-time performance of Executive's duties before the Disability Effective
Date. If Executive's Employment hereunder is so terminated, Executive shall be
paid, in addition to payments under any disability insurance policy in effect,
Executive's unpaid Base Salary, through the end of the month in which the
termination occurs and any unreimbursed expenses. Thereafter, the Company shall
have no further obligation to Executive. It is the intent of the parties that in
the event of the Executive's Disability that Executive be eligible for payments
under the Company's disability insurance policies in effect, including
applicable long-term disability insurance policies. The Company does not
currently have any disability insurance policies but intends to enter into such
policies subsequent to the date hereof. If the provisions of this Section 5.2
would prohibit Executive from receiving benefits under any such policies, the
provisions of this section 5.2 shall be deemed to be amended to the extent
required for Executive to be eligible for and receive all benefits under any
such policies, including, without limitation, to modify the definition of
Disability, and the Parties agree to enter into such further agreements as
necessary to give effect to the provisions of this Section 5.2.
5.3. TERMINATION OF EMPLOYMENT OF EXECUTIVE BY THE COMPANY FOR CAUSE OR
BY EXECUTIVE FOR GOOD Reason.
(a) The Company may terminate Executive's Employment for Cause (as
defined below) or without Cause pursuant to the terms of this Agreement. From
and after the date of termination for Cause and other than as provided in this
Section, Executive shall no longer be entitled to any of the benefits of this
Agreement and the Company shall have no further obligations to Executive;
provided, however, any rights and benefits which
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Executive may have in respect of any other compensation or any employee benefit
plans or programs of the Company shall be determined in accordance with the
terms of such other compensation arrangements or plans or programs. The term
"Cause," as used herein, shall mean any of the following: (i) the continued
failure of Executive to substantially perform Executive's duties under this
Agreement (other than as a result of physical or mental illness or injury),
after the Company Board delivers to Executive a written demand for substantial
performance that specifically identifies the manner in which the Company Board
believes that Executive has not substantially performed Executive's duties; or
illegal conduct or gross misconduct by Executive, in either case that results in
material and demonstrable damage to the business or reputation of the Company.
No act or failure to act on the part of Executive shall constitute cause, if it
is done, or omitted to be done, by Executive in good faith or with the
reasonable belief that Executive's action or omission was in the best interests
of the Company or, if applicable, in accordance with the instructions of the
Company Board. Any act or failure to act that is based upon authority given
pursuant to a resolution duly adopted by the Company Board, or on the advice of
counsel for the Company, shall be conclusively presumed to be done, or omitted
to be done, by Executive in good faith and in the best interests of the Company.
A termination of Executive's employment for Cause may only be effected in
accordance with the following procedures. The Company shall give Executive
written notice ("Notice of Termination for Cause") of its intention to terminate
Executive's employment for Cause, setting forth in reasonable detail the
specific conduct of Executive that it considers to constitute Cause and the
specific provision(s) of this Agreement on which it relies, and stating the
date, time and place of a special meeting of the Company Board (the "Special
Board Meeting"), that takes place not less than five and not more than fifteen
business days after Executive receives the Notice of Termination for Cause.
Executive shall be given an opportunity, together with counsel, to be heard at
the Special Board Meeting. Executive's termination for Cause shall be effective
when and if a resolution is duly adopted at the Special Board Meeting by
affirmative vote of the entire membership of the Company Board, stating that in
the good faith opinion of the Company Board, Executive is guilty of the conduct
described in the Notice of Termination for Cause, and that conduct constitutes
Cause under this Agreement.
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(b) Executive may terminate employment for Good Reason or without Good
Reason. "Good Reason" means (i) the assignment to Executive of any duties
inconsistent in any respect with paragraph (a) of Section 1 of this Agreement,
or any other action by the Company that results in a diminution in Executive's
position, authority, duties or responsibilities, other than an isolated,
insubstantial and inadvertent action that is not taken in bad faith and is
remedied by the Company promptly after receipt of notice thereof from Executive;
(b) any failure by the Company to comply with any provision of Section 3 of this
Agreement, other than an isolated, insubstantial and inadvertent failure that is
not taken in bad faith and is remedied by the Company promptly after receipt of
notice thereof from Executive; (c) any requirement by the Company that
Executive's services be rendered primarily at a location or locations other than
that provided for in paragraph (b) of Section 1 of this Agreement; (d) the
occurrence of any event which constitutes a Change of Control; (d) any purported
termination of Executive's employment by the Company for a reason or in a manner
not expressly permitted by this Agreement. A termination of Executive's
employment by Executive without Good Reason shall be effected by giving the
Company written notice of the termination.
(c) If, during the Term, the Company terminates Executive's employment,
other than for Cause or Disability, or Executive terminates his employment for
Good Reason, the Company shall pay the amounts described in subparagraph (i)
below to Executive in a lump sum in cash, within 30 days after the date of
termination and shall continue the benefits described in subparagraph (ii). The
payments provided pursuant to this paragraph (c) of Section 5.3 are intended as
liquidated damages for a termination of Executive's employment by the Company
other than for Cause or Disability or for the actions of the Company leading to
a termination of Executive's employment by Executive for Good Reason.
(i) The amount of severance pay to be paid in a lump sum shall be the
greater of:
A. In the event that Executive is terminated during the
initial Term of this Agreement, an amount equal to
the aggregate Base Salary for the entire initial Term
less any amounts
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paid during the current term through the date of
termination; or
B. The annual Base Salary in effect on the date of
termination.
(ii) The benefits to be continued as described above are
benefits to Executive and/or Executive's family at least as favorable as those
that would have been provided to them under Section 3.5 of this Agreement if
Executive's employment had continued until the greater of the end of the Term in
effect or first anniversary of the date of termination; provided, however, that
during any period when Executive is eligible to receive such benefits under
another employer-provided plan, the benefits provided by the Company under this
subparagraph may be made secondary to those provided under such other plan.
6. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered personally or sent
by facsimile transmission, overnight courier, or certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally or sent by facsimile transmission (provided that a
confirmation copy is sent by overnight courier), one day after deposit with an
overnight courier, or if mailed, five (5) days after the date of deposit in the
United States mails, as follows:
If to the Company, to:
U.S. MEDSYS CORP.
000 Xxxxx 00 Xxxxx
Xxxxxxxxx Xxxxxxx, Xxx Xxxxxx 00000
If to Executive, to:
Xxxxx X. Xxxxx
0000 -00xx Xx., Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
7. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the Parties. The Parties specifically acknowledge that there exist no
verbal or implied
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agreements between them and that the terms of this Agreement constitute the sole
agreement between them.
8. BINDING EFFECT. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the Company and Executive and
their successors and assigns. "Successors and assigns" shall mean, in the case
of the Company, any successor pursuant to a Change of Control or otherwise. For
purposes of this agreement, a Change of Control shall mean any (1) merger,
consolidation, sale or other transfer of all or substantially all of the assets
or equity of the Company, (2) acquisition by any individual, entity or group
(other than such persons who are the beneficial owners of the outstanding
securities of the Company as of the date of this Agreement) of beneficial
ownership of 50% or more of the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors, (3) the approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company, or (4) there is consummated any
similar event or transaction with respect to the Company.
9. NO ASSIGNMENT. This Agreement shall not be assignable or otherwise
transferable by either party.
10. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
for which Executive may qualify, nor, shall anything in this Agreement limit or
otherwise affect such rights as Executive may have under any contract or
agreement with the Company or any of its affiliated companies. Vested benefits
and other amounts that Executive is otherwise entitled to receive under any
plan, policy, practice or program of, or any contract or agreement with, the
Company or any of its affiliated companies on or after the date of termination
shall be payable in accordance with such plan, policy, practice, program,
contract or agreement, as the case may be, except as explicitly modified by this
Agreement.
11. FULL SETTLEMENT. The Company's obligation to make the payments
provided for in, and otherwise to perform its obligations under, this Agreement
shall not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action that the
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Company may have against Executive or others. In no event shall Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to Executive under any of the provisions of this
Agreement and, such amounts shall not be reduced, regardless of whether
Executive obtains other employment.
12. AMENDMENT, MODIFICATION, WAIVER. No provision of this Agreement may
be amended or waived unless such amendment or waiver is agreed to in writing,
signed by Executive and an authorized officer of the Company. Except as
otherwise specifically provided in this Agreement, no waiver by either party
hereto of any breach by the other party hereto of any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of a
similar or dissimilar provision or condition at the same or at any prior or
subsequent time and neither Executive's nor the Company's failure to insist upon
strict compliance with any provision of, or to assert any right under, this
Agreement (including, without limitation, the right of Executive to terminate
employment for Good Reason) shall be deemed to be a waiver of such provision or
right or of any other provision of or right under this Agreement.
13. DISPUTE RESOLUTION AND BINDING ARBITRATION. Any disputes that arise
between the Parties regarding this Agreement, the Parties' respective rights or
obligations hereunder, and any other dispute between the Parties whatsoever
shall be resolved exclusively through binding arbitration before a three member
panel of the American Arbitration Association in accord with the rules of the
American Arbitration Association. The arbitration shall take place in Denver,
Colorado. In the event that (i) Executive makes any claim against the Company
under this Agreement, (ii) the Company disputes such claim, and (iii) Executive
prevails with respect to such disputed claim, then the Company shall reimburse
Executive for his reasonable costs and expenses (including, without limitation,
reasonable attorney's fees) incurred by Executive in pursuing such disputed
claim; otherwise each of the Parties shall be responsible for all of their costs
and expenses incurred relating to the arbitration of any dispute. In the event
the arbitrator determines that the Company acted with malice in terminating
Executive, the Company shall be liable to Executive for treble damages. The
Parties understand that this provision is a waiver of each party's right to a
trial by jury and the Parties knowingly agree to
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waive such right. Judgment may be entered on the arbitrator's award in any court
having jurisdiction.
14. GOVERNING LAW. The validity, interpretation, construction,
performance and enforcement of this Agreement shall be governed by the laws of
the State of Colorado, without regard to its conflicts of law rules.
15. TITLES. Titles to the Sections in this Agreement are intended
solely for convenience and no provision of this Agreement is to be construed by
reference to the title of any Section.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, which together shall constitute one agreement. It shall not be
necessary for each party to sign each counterpart so long as each party has
signed at least one counterpart.
17. SEVERABILITY. Any term or provision of this Agreement which is
determined invalid or unenforceable, shall be ineffective to the extent of such
invalidity or unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms and provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first set forth above.
/s/ Xxxxx X. Xxxxx
-------------------------------------
Executive
By: Xxxxx X. Xxxxx
/s/ Xxxxxx Xxxxxxxx
-------------------------------------
U.S. MEDSYS CORP.
By: Xxxxxx Xxxxxxxx, Vice President
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