1
Exhibit 10.40
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered into as
of September 28, 1998, by and between Sabratek Corporation, a Delaware
corporation, with its principal office located at 0000 Xxxxx Xx. Xxxxx Xxxxxx,
Xxxxxx, Xxxxxxxx 00000 (together with its successors and assigns permitted under
this Agreement, "Sabratek") and Xxxxx X. Xxxxxxx ("Employee").
WITNESSETH:
WHEREAS, Sabratek has determined that it is in the best interests of
Sabratek and its stockholders to continue to employ Employee and to set forth in
this Agreement the obligations and duties of both Sabratek and Employee; and
WHEREAS, Sabratek wishes to assure itself of the services of Employee for
the period hereinafter provided, and Employee is willing to be employed by
Sabratek for said period, upon the terms and conditions provided in this
Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, Sabratek and Employee (individually a "Party"
and together the "Parties" ) agree as follows:
1
2
1. DEFINITIONS.
(a) "BENEFICIARY" shall mean the person or persons named by Employee
pursuant to Section 14 below or, in the event that no such person is named who
survives Employee, his estate.
(b) "BOARD" shall mean the Board of Directors of Sabratek.
(c) "CAUSE" shall mean:
(i) Employee being found guilty of a felony or an act of fraud or
embezzlement, in each case related to Sabratek or its business;
(ii) any repeated and demonstrated failure by Employee to discharge
faithfully the responsibilities of his position that the Board in
good faith determines is extremely detrimental to the current and
future interests of Sabratek; or
(iii) a material breach by Employee of any provision of this Agreement.
(d) "CHANGE IN CONTROL" shall mean the occurrence of any of the following
events:
(i) Consummation of the acquisition by any person (as such term is
defined in Section 13(d) or 14(d) of the Securities Exchange Act
of 1934, as amended (the "1934 Act")) of beneficial ownership
(within the meaning of Rule l3d-3 promulgated under the 0000 Xxx)
of 40 percent or more of the combined voting power of the then
outstanding voting securities of Sabratek; or
(ii) The individuals who, as of the date hereof, are members of the
Board cease for any reason to constitute a majority of the Board,
unless the election, or nomination for election by the
stockholders of Sabratek, of any new director or directors was
approved by a vote of a majority of the Board, in which case such
new director or directors shall, for purposes of this Agreement,
be considered as a member or members of the Board; or
2
3
(iii) Approval by stockholders of Sabratek of (A) a merger or consolidation
of Sabratek if the stockholders immediately before such merger or
consolidation do not, as a result of such merger or consolidation,
own, directly or indirectly, more than 60 percent of the combined
voting power of the then outstanding voting securities of the entity
resulting from such merger or consolidation in substantially the same
proportion as their ownership of the combined voting power of the
voting securities of Sabratek outstanding immediately before such
merger or consolidation; or (B) a complete liquidation or
dissolution, or an agreement for the sale or other disposition, of
all or substantially all of the assets of Sabratek.
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because 40 percent or more of the combined voting power of the then
outstanding securities is acquired by (i) a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained for employees of
Sabratek, or (ii) any corporation that, immediately prior to such acquisition,
is owned directly or indirectly by the stockholders of Sabratek in the same
proportion as their ownership of stock of Sabratek immediately prior to such
acquisition.
(e) "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(f) "COMMITTEE" shall mean the Compensation Committee of the Board.
(g) "DISABILITY" shall mean the illness or other mental or physical
disability of Employee, as determined under the long-term disability plan of
Sabratek covering Employee, or if no such plan exists, Employee's failure (i) to
perform substantially his material duties under this Agreement for a period of
six consecutive months, or for an aggregate of 270 days during any 12-
3
4
month period, and (ii) to return to the performance of his duties within 30 days
after receiving written notice of termination.
(h) "SALARY" shall mean the annual salary provided for in Section 3 below,
as adjusted from time to time.
(i) "TERM OF EMPLOYMENT" OR "TERM" shall mean the period specified in
Section 2(b) below.
(j) "YEAR" shall mean the calendar year, which is the fiscal year of
Sabratek.
2. EMPLOYMENT TERM, POSITIONS AND DUTIES.
(a) EMPLOYMENT OF EMPLOYEE. Sabratek hereby continues to employ Employee,
and Employee hereby accepts continued employment with Sabratek, in the positions
and with the duties and responsibilities set forth below and upon such other
terms and conditions as are hereinafter stated.
(b) TERM OF EMPLOYMENT. The Term of Employment shall commence on the date
hereof and shall terminate on September 27, 2001; provided, however, that at the
end of each 12-month period after September 27, 1999 (unless either Party gives
three months' written notice to the other that the Term shall not continue), the
Term shall thereafter automatically extend for an additional 12-month period
(with the result that, in the absence of such notice, the Term shall never be
less than two years in length), unless the Term is sooner terminated as provided
in Section 8 below.
(c) TITLES AND DUTIES.
(i) Until the date of termination of his employment hereunder, Employee
shall be employed as Vice President of International Operations, Chief
Administrative Officer and
4
5
Secretary, reporting to the Chief Executive Officer or his designee. In his
capacity as Vice President of International Operations, Chief Administrative
Officer and Secretary, Employee shall have the customary powers,
responsibilities and authorities of vice president of international operations,
chief administrative officer and secretary of corporations of the size, type
and nature of Sabratek.
(ii) During the Term of Employment, Sabratek shall uses its best efforts to
secure the election of Employee to the Board and to the vice-chairmanship
thereof.
(d) TIME AND EFFORT.
(i) Employee agrees to devote his full business time to the affairs of
Sabratek in order to carry out his duties and responsibilities under this
Agreement.
(ii) Notwithstanding the foregoing, nothing shall preclude Employee from
(A) serving on the boards of a reasonable number of trade associations,
charitable organizations and/or businesses not in competition with Sabratek, (B)
engaging in charitable activities and community affairs, and (C) managing his
personal investments and affairs; provided, however, that, such activities do
not materially interfere with the proper performance of his duties and
responsibilities specified in Section 2 (c).
3. SALARY.
Employee shall receive from Sabratek a Salary, payable in accordance with
the regular payroll practices of Sabratek, in a minimum amount of $145,000.
During the Term the Chief Executive Officer or his designee shall review his
Salary no less often than once each Year, commencing January 1, 1999. On the
basis of any such review, the Chief Executive Officer or his designee may in its
sole discretion adjust Employee's Salary accordingly. The term "Salary" as used
in this Agreement shall refer to his Salary at any time as so adjusted.
5
6
4. BONUSES.
(a) ANNUAL BONUS. Employee shall be eligible to receive an annual bonus for
each Year or portion thereof during the Term, which bonus shall not be (i) less
than 30% of his Salary if he achieves 80% of specified performance objectives,
(ii) less than 40% of his Salary if he achieves 100% of specified performance
objectives, or (iii) less than 50% of his Salary if he achieves 120% of
specified performance objectives for any Year. The performance objectives shall
be determined and approved at the beginning of each Year by the Chief Executive
Officer or his designee and agreed to by Employee.
(b) SPECIAL BONUS. Employee shall be eligible to receive additional bonuses
during the Term. The Chief Executive Officer or his designee shall determine, in
its discretion, the occasion for payment, and the amount, of any such bonus.
5. LONG-TERM INCENTIVE COMPENSATION.
During the Term, Employee shall be entitled to participate in Sabratek's
Long-Term Incentive Compensation Plan (the "LTIP"), a copy of which is attached
hereto as Attachment I, and receive awards thereunder in accordance with its
terms.
6. EQUITY OPPORTUNITY.
During the Term, Employee shall be eligible to receive grants of options to
purchase shares of Sabratek's stock and awards of shares of Sabratek's stock,
either or both as determined by the Chief Executive Officer or his designee,
under and in accordance with the terms of applicable plans of Sabratek and
related option and award agreements.
6
7
7. EXPENSE REIMBURSEMENT; CERTAIN OTHER COSTS.
During the Term, Employee shall be entitled to prompt reimbursement by
Sabratek for all reasonable out-of-pocket expenses incurred by him in performing
services under this Agreement, upon his submission of such accounts and records
as may be reasonably required by Sabratek. In addition, Employee shall be
entitled to payment by Sabratek of all reasonable costs and expenses, including
attorneys' and consultants' fees and disbursements, incurred by him in
connection with adoption of this Agreement and any related compensatory
arrangements that Sabratek adopts solely for his benefit.
8. EMPLOYEE BENEFIT PLANS.
During the Term Employee shall be entitled to all benefits specifically
established for him, and to participate in all employee benefit plans and
programs made available to Sabratek's senior executives or to its employees
generally, as such plans or programs may be in effect from time to time,
including, without limitation, pension and other retirement plans,
profit-sharing plans, savings and similar plans, group life insurance,
accidental death and dismemberment insurance, travel accident insurance,
hospitalization insurance, surgical insurance, major and excess major medical
insurance, dental insurance, short-term and long-term disability insurance, sick
leave (including salary continuation arrangements), holidays, vacation and any
other employee benefit plans or programs that may be sponsored by Sabratek from
time to time, including plans that supplement the above-listed types of plans,
whether funded or unfunded.
9. TERMINATION OF EMPLOYMENT.
(a) VOLUNTARY TERMINATION AND TERMINATION BY MUTUAL AGREEMENT. Employee may
terminate his employment voluntarily at any time. If he does so, his entitlement
hereunder shall be
7
8
the same as if Sabratek had terminated his employment for Cause. The Parties may
terminate this Agreement by mutual agreement at any time. If they do so,
Employee's entitlement shall be as the Parties mutually agree.
(b) GENERAL. Notwithstanding anything to the contrary herein, in the event
of termination of Employee's employment under this Agreement, he or his
Beneficiary, as the case may be, shall be entitled to receive (in addition to
payments and benefits under, and except as specifically provided in, subsections
(c) through (h) below, as applicable):
(i) his Salary through the date of termination;
(ii) any unused vacation from prior years according to Sabratek's
vacation policy;
(iii) any annual or special bonus awarded but not yet paid to him;
(iv) any deferred compensation payable under any deferred compensation
plan of Sabratek;
(v) any other compensation or benefits, including without limitation
long-term incentive compensation described in Section 5 above, benefits under
equity grants and awards described in Section 6 above and employee benefits
under plans described in Section 8 above, that have vested through the date of
termination or to which he may then be entitled in accordance with the
applicable terms and conditions of each grant, award or plan; and
(vi) reimbursement in accordance with Section 7 above of any business
expenses incurred by Employee through the date of termination but not yet paid
to him.
(c) TERMINATION DUE TO DEATH. In the event that Employee's employment is
terminated due to his death, his Beneficiary shall be entitled, in addition to
the compensation and benefits specified in Section 9(b), to:
8
9
(i) Employee's Salary, at the rate in effect immediately before such
termination, payable through the end of the month in which the proceeds of his
life insurance under Sabratek's group plan are paid; and
(ii) a prorated annual bonus for the Year in which his death occurs.
(d) TERMINATION DUE TO DISABILITY. In the event of Disability, Sabratek or
Employee may terminate Employee's employment. If Employee's employment is
terminated due to Disability, he shall be entitled, in addition to the
compensation and benefits specified in Section 9(b), to a prorated annual bonus
for the Year in which his termination for Disability occurs.
(e) TERMINATION BY SABRATEK FOR CAUSE. Sabratek may terminate Employee's
employment hereunder for Cause only upon written notice to Employee not less
than 45 days prior to any intended termination date, which notice shall specify
the grounds for such termination in reasonable detail. Upon receipt of such
notice, Employee (and his counsel) shall have 30 days to present to the Chief
Executive Officer his position regarding any dispute relating to the existence
of such Cause. Unless rescinded by the Chief Executive Officer, termination
shall be effective on the date specified in the original notice.
In the event that Employee's employment is terminated for Cause, he shall
be entitled only to the compensation and benefits specified in Section 9(b).
(f) TERMINATION WITHOUT CAUSE.
(i) Termination without Cause shall mean: (A) termination of Employee's
employment by Sabratek and shall include any reason for termination other than
(i) due to death, Disability or Cause, (ii) by Employee voluntarily, or (iii) by
mutual agreement of Employee and Sabratek; or (B) Sabratek changes the primary
employment location of Employee to a place that is
9
10
outside of the Chicago metropolitan area. Sabratek shall provide Employee ten
days' prior written notice of termination by it without Cause.
(ii) In the event of termination by Sabratek of Employee's employment
without Cause, he shall be entitled, in addition to the compensation and
benefits specified in Section 9(b), to:
(A) his Salary, at the rate in effect immediately before such
termination, for the longer of the remainder of the Term or two years; and
(B) a prorated annual bonus for any partial year and an annual
bonus for each remaining Year of the Term equal to the average of the three
highest annual bonuses awarded to him during the five Years preceding the Year
of termination, such bonuses to be paid at the same time annual bonuses are
regularly paid; and
(C) continued coverage under the health program maintained by
Sabratek for the remainder of the Term; and
(D) the Cumulative Unit Value (as defined in and calculated under
the LTIP) for each unit awarded under the LTIP prior to the date of termination
to be paid in accordance with the terms thereof; and
(E) notwithstanding anything in this Section 9(f) to the contrary,
Sabratek shall have no further obligation to make any salary or bonus payments
for any period following the first date on which Employee takes any action which
would fall within the definition of "Restrictive Covenant" as provided in
Section 12(a) hereof, whether or not such action occurs within the Restrictive
Period (as defined in Section 12(a) hereof).
10
11
(G) VOLUNTARY TERMINATION BY EMPLOYEE. Employee shall have the right, upon
60 days' prior written notice, voluntarily to terminate his employment. If he
exercises this right, his employment shall cease and the Term shall terminate as
of the date stated in such notice, and he shall be entitled to receive
compensation and benefits as if Sabratek had terminated his employment for
Cause, as provided in Section 9(e).
(H) NOTICE THAT THE EMPLOYMENT TERM SHALL NOT RENEW. In the event that
either Party notifies the other that the Employment Term shall not renew
pursuant to the terms of Section 2(b) above, Employee shall continue to render
services to Sabratek through the end of the Term as in effect on the date of
delivery of such notice, unless: (A) the non-renewal decision was made by
Sabratek, in which case, the Chief Executive Officer or his designee or Employee
may elect to treat the notice as a termination without Cause of Employee's
employment; or (B) the non-renewal decision was made by Employee, in which case,
the Chief Executive Officer or his designee may elect to treat the notice as a
voluntary termination of employment by Employee.
(I) CHANGE IN CONTROL. (I) Notwithstanding anything to the contrary in this
Section 9, if, within twelve months following a Change in Control (A) Employee's
employment is terminated for any reason other than death or Disability, or (B)
Employee terminates his employment, he shall be entitled to the compensation and
benefits provided in Sections 9(b) and 9(f)(ii), including, but not limited to,
any other compensation or benefits, including the Maximum Cumulative Unit Value
(as defined in the LTIP) for each unit awarded under the LTIP to the date of
termination, benefits under equity grants and awards described in Section 6
above and employee benefits under plans
11
12
described in Section 8 above, that have vested through the date of termination
or to which he may then be entitled in accordance with the applicable terms and
conditions of each grant, award or plan.
(II) Immediately upon: (A) the filing by a third-party with the United
States Securities and Exchange Commission of any proxy or tender offer material
evidencing an intent to gain control of the Company; (B) the mailing of a proxy
statement by the Company to shareholders requesting an affirmative vote
regarding a Change in Control; or (C) the receipt of information by the Company
that 40 percent or more of its outstanding common stock has been acquired by any
person (as defined under the 1934 Act), the Company shall contribute to an
irrevocable grantor trust (a "Rabbi Trust") an amount sufficient to enable all
potential amounts due to Employee under this Section to be paid. The Company
shall provide Employee with a certification of the payment to such trust of all
such amounts. All such amounts which are due to Employee shall be paid using the
assets of said trust except to the extent its terms preclude such payment, in
which event payment shall be made by the Company from its own funds, or unless
the Company elects to pay any or all such amounts from its own funds.
10. PARACHUTES.
(a) APPLICATION. If all, or any portion, of the payments provided under
this Agreement, and/or any other payments and benefits that Employee receives or
is entitled to receive from Sabratek, including, but not limited to, amounts
generated from the exercise and sale of options granted to Employee, constitutes
an excess "parachute payment" within the meaning of Section 280G(b) of the Code,
whether or not under an existing plan, arrangement or other agreement (each such
parachute payment, a "Parachute Payment") and will result in the imposition on
Employee of an excise tax under Section 4999 of the Code, then, in addition to
any other benefits to which
12
13
Employee is entitled under this Agreement, Sabratek shall pay him an amount in
cash equal to the sum of the excise taxes payable by him by reason of receiving
such Parachute Payments, plus the amount necessary to put him in the same
after-tax position (taking into account any and all applicable federal, state
and local excise, income or other taxes at the highest possible applicable rates
on such Parachute Payments (including without limitation any payments under this
Section 10) as if no excise taxes had been imposed with respect to Parachute
Payments (the "Parachute Gross-up").
(b) COMPUTATION. The amount of any payment under this Section 10 shall be
computed by Sabratek's certified public accounting firm in consultation with
legal counsel acceptable to Employee. Employee and Sabratek shall provide the
accounting firm with all information that it reasonably deems necessary in order
to compute the Parachute Gross-up. The cost and expenses of the accounting firm
retained to perform the computations shall be borne by Sabratek.
(c) PAYMENT. In any event, Sabratek shall pay to Employee, or pay on his
behalf, the Parachute Gross-up as computed by the accounting firm by the time
any taxes payable by him as a result of the Parachute Payments become due.
In the event that the Internal Revenue Service ("IRS") determines that the
amount of excise taxes thereon initially paid was insufficient to discharge
Employee's excise tax liability, Sabratek shall make additional payments to him
as may be necessary to reimburse him for discharging the full liability.
13
14
11. CONFIDENTIALITY AND LOYALTY.
(a) GENERAL.
(i) Employee hereby acknowledges that as a result of his employment
with Sabratek he has produced and had access to, and may hereafter produce and
have access to, material, records, data, trade secrets, inventions and
information not generally available to the public (collectively, "Confidential
Information") regarding Sabratek and that any such Confidential Information is
the exclusive property of Sabratek.
(ii) Accordingly, Employee hereby agrees that, during and subsequent
to the Term, he shall hold in confidence and not directly or indirectly
disclose, use, copy or make lists of any such Confidential Information, except
to the extent that such information is or thereafter becomes lawfully available
from public sources, or such disclosure is authorized in writing by Sabratek,
required by a law or any competent administrative agency or judicial authority,
or otherwise as reasonably necessary or appropriate in connection with
performance by Employee of his duties hereunder.
(b) RETURN OF DOCUMENTS. All records, files, documents and other materials
or copies thereof relating to Sabratek's business that Employee prepares or uses
shall be and remain the sole property of Sabratek and shall not be removed from
Sabratek's premises without its written consent. Upon termination of Employee's
employment with Sabratek for any reason, he shall promptly deliver to Sabratek
all such items that are then in his possession or control.
(c) DUTY OF LOYALTY. Employee hereby agrees to abide by Sabratek's
reasonable policies, as in effect from time to time, respecting avoidance of
interests conflicting with those of Sabratek.
14
15
(d) REMEDIES AND SANCTIONS. In the event that Employee is found to be in
violation of Section 11(a), (b) or (c), Sabratek shall be entitled to relief as
provided in Section 13 below.
12. NONCOMPETITION/NONSOLICITATION.
(a) RESTRICTIVE COVENANT. Employee hereby agrees that, except with the
express prior written consent of Sabratek, for a period of one year after
termination of his employment with Sabratek for any reason (the "Restrictive
Period"), he will not directly or indirectly compete with the business of
Sabratek as conducted on the date of such termination, including, but not by way
of limitation, by (i) directly or indirectly owning, managing, operating,
controlling, financing, (ii) directly or indirectly serving as an employee,
officer or director of or consultant to, or (iii) soliciting or inducing, or
attempting to solicit or induce, any employee or agent of Sabratek to terminate
employment with Sabratek and become employed by, any person, firm, partnership,
corporation, trust or other entity that owns or operates an entity that is
engaged in the same or similar business as Sabratek as conducted on the date of
such termination (the "Restrictive Covenant").
If Employee violates the Restrictive Covenant and Sabratek brings legal
action for injunctive or other relief, Sabratek shall not, as a result of the
time involved in obtaining such relief, be deprived of the benefit of the full
period of the Restrictive Covenant. Accordingly, the Restrictive Covenant shall
be deemed to endure for the period specified in this Section 12(a), computed
from the date the relief is granted but reduced by the time between the period
when the Restrictive Period began to run and the date of the first violation of
the Restrictive Covenant by Employee.
(b) EXCEPTIONS. Notwithstanding anything to the contrary in Section 12(a),
the Restrictive Covenant shall not:
15
16
(i) apply if Sabratek terminates Employee's employment without Cause,
as provided in Section 9(f) above; or
(ii) prohibit Employee from owning directly or indirectly capital stock
or similar securities which do not represent more than five percent of the
outstanding capital stock of any business similar to that of Sabratek as
conducted on the date of such termination.
(c) REMEDIES AND SANCTIONS. In the event that Employee is found to be in
violation of Section 12(a) above, Sabratek shall be entitled to relief as
provided in Section 13 below.
13. REMEDIES/SANCTIONS.
Employee hereby acknowledges that the restrictions contained in Sections 11
(a), (b) and (c) and 12(a) above are reasonable and necessary for the protection
of the legitimate business interests of Sabratek, for which monetary damages
alone may not provide an adequate remedy, that any violation of these
restrictions would cause substantial injury to Sabratek and such interests, that
Sabratek would not have entered into this Agreement without receiving the
additional consideration offered by Employee in binding himself to these
restrictions and that such restrictions were a material inducement to Sabratek
to enter into this Agreement.
In the event of any violation or threatened violation of these
restrictions, Sabratek (a) shall be relieved of any further obligations under
the Agreement, (b) shall be entitled to monetary damages resulting from such
violation, and (c) in addition to and not in limitation of, any other rights,
remedies or damages available to Sabratek under this Agreement or otherwise at
law or in equity, shall be entitled to preliminary and permanent injunctive
relief to prevent or restrain any such violation by Employee and any and all
persons directly or indirectly acting for or with him, as the case may be.
16
17
14. BENEFICIARIES/REFERENCES.
Employee shall be entitled to select (and change, to the extent permitted
under any applicable law) a Beneficiary or Beneficiaries to receive any
compensation or benefit payable under this Agreement following his death by
giving Sabratek written notice thereof. In the event of Employee's death, or of
a judicial determination of his incompetence, reference in this Agreement to
Employee shall be deemed to refer, as appropriate, to his Beneficiary, estate or
other legal representative.
15. WITHHOLDING TAXES.
All payments to Employee or his Beneficiary under this Agreement shall be
subject to withholding on account of federal, state and local taxes as required
by law.
16. INDEMNIFICATION AND LIABILITY INSURANCE.
Nothing herein is intended to limit Sabratek's indemnification of Employee,
and Sabratek shall indemnify him to the fullest extent permitted by applicable
law consistent with Sabratek's Certificate of Incorporation and By-Laws as in
effect at the beginning of the Term, with respect to any action or failure to
act on his part while he is an officer, director or employee of Sabratek.
Sabratek shall cause Employee to be covered at all times by directors' and
officers' liability insurance on terms no less favorable than the directors' and
officers' liability insurance maintained by Sabratek in effect on the date
hereof in terms of coverage and amounts. Sabratek shall continue to indemnify
Employee as provided above and maintain such liability insurance coverage for
him after the Term for any claims that may be made against him with respect to
his service as a director or officer of Sabratek.
17
18
17. EFFECT OF AGREEMENT ON OTHER BENEFITS.
The existence of this Agreement shall not prohibit or restrict Employee's
entitlement to participate fully in compensation, employee benefit and other
plans of Sabratek in which senior executives are eligible to participate.
18. ASSIGNABILITY; BINDING NATURE.
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, heirs (in the case of Employee) and
assigns. No rights or obligations of Sabratek under this Agreement may be
assigned or transferred by Sabratek except pursuant to (a) a merger or
consolidation or (b) sale or liquidation of all or substantially all of the
assets of Sabratek, provided that the surviving entity or assignee or transferee
is the successor to all or substantially all of the assets of Sabratek and, in
the case of a sale or other transfer of assets or a merger in which Sabratek is
not the surviving entity, such surviving entity or assignee or transferee agrees
in writing to assume the liabilities, obligations and duties of Sabratek under
this Agreement. Notwithstanding such assignment, Sabratek shall remain liable
and responsible for fulfillment of the terms and conditions of this Agreement;
and provided further, that in no event shall such assignment of this Agreement
adversely affect Employee's right upon a Change in Control, as provided in
Section 9(i) above. No rights or obligations of Employee under this Agreement
may be assigned or transferred by him.
19. REPRESENTATIONS.
The Parties respectively represent and warrant that each is fully
authorized and empowered to enter into this Agreement and that the performance
of its or his obligations, as the case may be, under this Agreement will not
violate any agreement between such Party and any other person, firm
18
19
or organization. Sabratek represents and warrants that this Agreement has been
duly authorized by all necessary corporate action and is valid, binding and
enforceable in accordance with its terms.
20. ENTIRE AGREEMENT.
Except to the extent otherwise provided herein, this Agreement contains the
entire understanding and agreement between the Parties concerning the subject
matter hereof and supersedes any prior agreements, whether written or oral,
between the Parties concerning the subject matter hereof, provided that the
execution of this Agreement shall not adversely affect (i) any award previously
made to Employee under any compensation plan maintained by Sabratek, or (ii) any
statements regarding the vesting of options or other benefits in such prior
agreements. Payments and benefits provided under this Agreement are in lieu of
any payments or other benefits under any severance program or policy of Sabratek
to which Employee would otherwise be entitled.
21. AMENDMENT OR WAIVER.
No provision in this Agreement may be amended unless such amendment is
agreed to in writing and signed by both Employee and an authorized officer of
Sabratek. No waiver by either Party of any breach by the other Party of any
condition or provision contained in this Agreement to be performed by such other
Party shall be deemed a waiver of a similar or dissimilar condition or provision
at the same or any prior or subsequent time. Any waiver must be in writing and
signed by the Party to be charged with the waiver. No delay by either Party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof.
22. SEVERABILITY.
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this Agreement
19
20
shall be unaffected thereby and shall remain in full force and effect to the
fullest extent permitted by law.
23. SURVIVAL.
The respective rights and obligations of the Parties under this Agreement
shall survive any termination of Employee's employment with Sabratek.
24. GOVERNING LAW/JURISDICTION.
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of Illinois, without reference to principles of
conflict of laws.
25. ARBITRATION.
Any dispute or controversy other than a dispute or controversy arising
under Sections 11 or 12 hereof (actions regarding which may be brought in any
court (i) having situs within Xxxx County, Illinois and (ii) having jurisdiction
over the dispute or controversy) arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by Employee within thirty
(30) miles from the main office of Sabratek, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that the
Executive shall be entitled to seek specific performance of his right to be paid
through the date of termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement.
26. LEGAL FEES.
All reasonable expenses and legal fees paid or incurred by Employee
pursuant to any bona fide dispute or question of interpretation relating to this
Agreement, including all such expenses and
20
21
fees, if any, incurred in contesting any termination of this Agreement by
Sabratek or in seeking to obtain or enforce any right or benefit provided by
this Agreement, shall be paid or reimbursed by Sabratek, provided, however, that
if this Agreement is terminated for Cause or if this Agreement is terminated
voluntarily by Employee other than due to a breach of this Agreement by
Sabratek, Sabratek shall be obligated to pay any of Employee's expenses and
legal fees arising therefrom only if Employee is successful on the merits
pursuant to a legal judgment, arbitration or settlement.
27. NOTICES.
Any notice given to either Party shall be in writing and shall be deemed to
have been given when delivered either personally, by fax, by overnight delivery
service (such as Federal Express) or sent by certified or registered mail
postage prepaid, return receipt requested, duly addressed to the Party concerned
at the address indicated below or to such changed address as the Party may
subsequently give notice of:
If to Sabratek or the Board:
Sabratek Corporation
0000 Xxxxx Xx. Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: President
FAX: (000) 000-0000
with a copy to:
Xxxx & Xxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx
PHONE: (000) 000-0000
FAX: (000) 000-0000
21
22
If to Employee:
Sabratek Corporation
0000 Xxxxx Xx. Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
FAX: (000) 000-0000
and
Xxxxx X. Xxxxxxx
1817 North Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
28. HEADINGS.
The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
29. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have Agreement as of the date first
written above.
SABRATEK CORPORATION
By:_______________________________________
K. Xxxx Xxxxx, Chairman
and Chief Executive Officer
_______________________________________
Xxxxx X. Xxxxxxx
22
