EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT ("Agreement") made as of this 11th
day of May, 2009 by and between MedLink International, Inc., a Delaware
corporation, having an office at 0 Xxxxxxxx Xxxxx, Xxxxxxxxxx XX 00000
(hereinafter referred to as "Employer") and Xxxxx Xxxx, an
individual with a business address c/o the Company(hereinafter referred
to as "Employee");
W
I T N E S S E T H:
WHEREAS,
Employer desires to employ, Employee as Chief Financial Officer of Employer;
and
WHEREAS,
Employee is willing to be employed as the Chief Financial Officer of
Employer in the manner provided for herein, and to perform the duties
of the Chief Financial Officer of Employer upon the terms and conditions
herein set forth;
WHERAS, It is expected
that the Company from time to time will consider the possibility of
an acquisition by another company or other change of control. The Board
of Directors of the Company (the “Board”) recognizes that
such consideration can be a distraction to Executive and can cause Executive
to consider alternative employment opportunities. The Board has determined
that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication and objectivity
of Executive, notwithstanding the possibility, threat or occurrence
of a Change of Control.
WHEREAS, The Board
believes that it is in the best interests of the Company and its stockholders
to provide Executive with an incentive to continue his or her employment
and to motivate Executive to maximize the value of the Company for the
benefit of its stockholders.
WHERAS, The Board
believes that it is imperative to provide Executive with certain severance
benefits (“Severance Package”) which include twelve (12) months
salary, at his then current yearly salary rate, all outstanding stock
options not earned or exercised due to the Employee with options vesting
immediately and exercisable on the date that is 3 months from the issuance
date of the Options unless otherwise stipulated in writing.
NOW, THEREFORE,
in consideration of the promises and mutual covenants herein set forth
it is agreed as follows:
1. Employment
of Chief Financial Officer of Employer. Employer hereby
employs Employee as Chief Financial Officer of Employer.
2. Term.
Subject to
Section 9 and Section 10 below, the term of this Agreement shall be
for a period of Sixty (60) months commencing on June 1, 2009 (the Term).
The Term of this Agreement shall be automatically extended for an additional
(2) year period, unless either party notifies the other in writing at
least ninety (120) days prior to the expiration of the then existing
Term of its intention not to extend the Term. During the Term,
Employee shall devote substantially all of his business time and efforts
to Employer and its subsidiaries and affiliates.
3. Duties.
The Employee shall perform those functions generally performed by persons
of such title and position, shall attend all meetings of the stockholders
and the Board (if invited to attend), shall perform any and all related
duties and shall have any and all powers as may be prescribed by resolution
of the Board, and shall be available to confer and consult with and
advise the officers and directors of Employer at such times that may
be required by Employer. Employee shall report directly and solely
to the Board.
4. Compensation.
a. (i) Employee
shall be paid a base pay of $324,000 per year during the Term of this
Agreement. Employee shall be paid periodically in accordance with
the policies of the Employer during the term of this Agreement, but
not less than bi-monthly. During the Term Employee shall be the
second highest paid employee of the Company or any of its subsidiaries
in terms of monetary compensation. In the event another employee
other than the Chief Executive Officer of Employer or any of its subsidiaries
is paid a monetary compensation that is higher than Employee’s, Employee’s
monetary compensation shall be adjusted to equal such employee’s monetary
compensation plus an additional 4%.
(ii) Employee
is eligible for an annual bonus, if any, which will be determined and
paid in accordance with policies set from time to time by the compensation
committee of the Board.
b. At the
beginning of each 12 month period during the Term, Employer shall grant
Employee 1,800,000 options (“Options”) to purchase shares of the
Company’s common stock pursuant to the Company’s Stock Option Plan
then in effect, at an exercise price per share equal to the Fair Market
Value of the Company’s common stock. The Options shall be exercisable
for a period of seven (7) years from their date of issuance. The
Options shall vest and become exercisable on the date that is 12 months
from the issuance date of the Options.
c. Employer
shall include Employee in its health insurance program, payment of premiums
in accordance with company policy.
d. Employee shall receive an automobile allowance in the amount of $1000.00 per month.
e. Employee
shall have the right to participate in any other employee benefit plans
established by Employer.
f. (i) In
the event of a "Change of Control" whereby:
(A) A person
(other than a person who is an officer or a Director of Employer on
the effective date hereof), including a "group" as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, after execution
of this Agreement becomes, or obtains the right to become, the beneficial
owner of Employer securities having 50% or more of the combined voting
power of then outstanding securities of the Employer that may be cast
for the election of directors of the Employer;
(B) At any
time, a majority of the Board-nominated slate of candidates for the
Board is not elected;
(C) Employer
consummates a merger in which it is not the surviving entity;
(D) Substantially
all Employer's assets are sold; or
(E) Employer's
stockholders approve the dissolution or liquidation of Employer; then
(ii) All stock options
and warrants ("Rights") granted by Employer to Employee under
any plan or otherwise prior to the effective date of the Change of Control,
shall become vested, accelerate and become immediately exercisable with
the employee option of cashless exercise; any time within twelve months
after the effective date of the change of control, adjusted for any
stock splits and capital reorganizations having a similar effect, subsequent
to the effective date hereof. In the event Employee owns or is entitled
to receive any unregistered securities of Employer, then Employer shall
use its best efforts to effect the registration of all such securities
as soon as practicable, but no later than 120 days after the Change
of Control; provided, however, that such period may be extended or delayed
by Employer for one period of up to 60 days if, upon the advice of counsel
at the time such registration is required to be filed, or at the time
Employer is required to exercise its best efforts to cause such registration
statement to become effective, such delay is advisable and in the best
interests of Employer because of the existence of non-public material
information, or to allow Employer to complete any pending audit of its
financial statements.
5.
Expenses. Employee shall be reimbursed for all of
his actual out-of-pocket expenses incurred in the performance of his
duties hereunder, provided such expenses are acceptable to Employer,
which approval shall not be unreasonably withheld, for business related
travel and entertainment expenses, and that Employee shall submit to
Employer detailed receipts, according to IRS guidelines, with respect
thereto.
6. Vacation.
Employee shall be entitled to receive four (4) weeks paid vacation time
during each year of employment with dates agreed upon by Employer. Vacation
time may not be accrued beyond the end of the calendar year. In the
event of separation of employment, for any reason, vacation time accrued
and not used, in that calendar year, shall be paid at the salary rate
of Employee in effect at the time of employment separation.
7. Secrecy.
At no time shall Employee disclose to anyone any confidential or secret
information (not already constituting information available to the public)
concerning (a) internal affairs or proprietary business operations of
Employer or (b) any trade secrets, new product developments, patents,
programs or programming, especially unique processes or methods.
8.
Covenant Not to Compete.
(a) Subject
to, and limited by, Section 10(b), Employee will not, at any time, during
the term of this Agreement, and for one (1) year thereafter, either
directly or indirectly, engage in, with or for any enterprise, institution,
whether or not for profit, business, or company, competitive with the
business (as identified herein) of Employer as such business may be
conducted on the date thereof, as a creditor, guarantor, or financial
backer, stockholder, director, officer, consultant, advisor, employee,
member, inventor, producer, director, or otherwise of or through any
corporation, partnership, association, sole proprietorship or other
entity; provided, that an investment by Employee, her spouse or her
children is permitted if such investment is not more than four percent
(4%) of the total debt or equity capital of any such competitive enterprise
or business and further provided that said competitive enterprise or
business is a publicly held entity whose stock is listed and traded
on a national stock exchange or through the NASDAQ Stock Market.
As used in this Agreement, the business of Employer shall be deemed
to include the development and marketing of Healthcare IT systems.
(b) For a
period one year from the date of termination of this agreement Employee
shall not contact or solicit any of the Companies customers, employees
or suppliers.
(c) During
the entire time of employment, any outside consulting (paid or unpaid),
employment, business venture or compensated activities must receive
the written approval of the compensation committee, established by the
board of directors, or any other committee of the board of directors
serving such function.
9.
Termination.
- Termination by Employer
(i) Employer
may terminate this Agreement upon written notice for Cause. For
purposes hereof, "Cause" shall mean (A) Employee's misconduct
as could reasonably be expected to have a material adverse effect on
the business and affairs of Employer, (B) the Employee's disregard of
lawful instructions of Employers Board of Directors consistent with
Employee's position relating to the business of Employer or neglect
of duties or failure to act, which, in each case, could reasonably be
expected to have a material adverse effect on the business and affairs
of Employer,(C) engaging by the Employee in conduct that constitutes
activity in competition with Employer, including any unapproved activities
identified in section 8(c) of this agreement; and/or (D) the conviction
of Employee for the commission of a felony. Notwithstanding anything
to the contrary in this Section 9(a)(i), Employer may not terminate
Employee's employment under this Agreement for Cause unless Employee
shall have first received notice from the Board advising Employee of
the specific acts or omissions alleged to constitute Cause, and such
acts or omissions continue after Employee shall have had a reasonable
opportunity (at least 10 days from the date Employee receives the notice
from the Board) to correct the acts or omissions so complained of.
In no event shall alleged incompetence of Employee in the performance
of Employee's duties be deemed grounds for termination for Cause.
(ii) If Employer
shall terminate this Agreement under Section 9(a)(i), Employee shall
be entitled to receive the greater of: (a) the remaining salary due
to Employee under this Agreement, or (b) twelve (12) months salary,
at his then current yearly salary rate, all outstanding stock options
not earned or exercised due to the Employee with options vesting immediately
and exercisable on the date that is 3 months from the issuance date
of the Options(the “Severance Payment”), and Employer shall
pay 100% of the C.O.B.R.A. premiums for twelve (12) months after such
termination.
(iii) This
agreement automatically shall terminate upon the death of Employee,
except that Employee's estate shall be entitled to receive any amount
accrued under Section 4(a).
b. Termination
by Employee
(i) Employee
shall have the right to terminate his employment under this Agreement
upon 30 days' notice to Employer given within 90 days following the
occurrence of any of the following events (A) through (F) or within
three years following the occurrence of event (G):
(A) Employee
is not appointed or retained as Chief Financial Officer (or a substantially
similar position).
(B) Employer
acts to materially reduce Employee's duties and responsibilities hereunder.
Employee's duties and responsibilities shall not be deemed materially
reduced for purposes hereof solely by virtue of the fact that Employer
is (or substantially all of its assets are) sold to, or is combined
with, another entity, provided that Employee shall continue to have
the same duties and responsibilities with respect to Employer's business,
and Employee shall report directly to the board of directors of the
entity (or individual) that acquires Employer or its assets.
(C) Employer
acts to change the geographic location of the performance of Employee's
duties from the Suffolk County of New York area.
(D) A Material
Reduction (as hereinafter defined) in Employee's rate of base compensation,
or Employee's other benefits. "Material Reduction" shall
mean a ten percent (10%) differential;
(E) A failure
by Employer to obtain the assumption of this Agreement by any successor;
(F) A material
breach of this Agreement by Employer, which is not cured within thirty
(30) days of written notice of such breach by Employer;
(G) A Change
of Control.
(ii)
Anything herein to the contrary notwithstanding, Employee may terminate
this Agreement upon thirty (30) days written notice to Employer.
(iii)
If Employee shall terminate this Agreement under Section 9(b)(i), Employee
shall be entitled to receive the greater of: (a) the remaining salary
due to Employee under this Agreement, or (b) twelve (12) months salary,
at his then current yearly salary rate, all outstanding stock options
not earned or exercised due to the Employee with options vesting immediately
and exercisable on the date that is 3 months from the issuance date
of the Options(the “Severance Payment”), and Employer shall
pay 100% of the C.O.B.R.A. premiums for twelve (12) months after such
termination. Other than the Severance Payment and the payment of C.O.B.R.A.
premiums described in this section 9(b)(iii), Employer shall have no
further obligation to compensate Employee pursuant to Section 4 above.
c. Termination
by Board of Directors actions due to economic hardship of the Employer.
(i) In the
event the Employer, under direction from its board of directors due
to financial distress, is required to take actions that may effect any
or all of the Section 9(b)(i) events (A) through (F)
(ii)
Within thirty (30) days of such board action, Employee may voluntarily
terminate this Agreement with written notice to Employer.
(iii)
If Employee shall terminate this Agreement under Section 9(c)(ii), Employee
shall be entitled to “Severance Payment”
and Employer shall pay 100% of the C.O.B.R.A. premiums for twelve (12)
months after such termination. Other than the payments set forth in
this section 9(c)(iii) and the payment of C.O.B.R.A. premiums described
in this section 9(c)(iii), Employer shall have no further obligation
to compensate Employee pursuant to Section(s) 4 or 9(b)above.
If Employee shall terminate this Agreement pursuant to Section 9(c)(ii),
Employee shall not be entitled to the Severance Payment or any additional
compensation as provided in Section 4 or 9(b)above.
10. Consequences of Breach by Employer;
Employment
Termination
a.
If the Employer shall terminate Employee's employment under this Agreement
in any way that is a breach of this Agreement by Employer, the following
shall apply:
(i) Employee
shall be entitled to receive the “Severance Payment”, and
Employer shall pay 100% of the C.O.B.R.A. premiums for twelve (12) months
after such termination. Other than the Severance Payment and the payment
of C.O.B.R.A. premiums described, Employer shall have no further obligation
to compensate Employee pursuant to Section(s) 4 or 9 above; and
(ii) Employee
shall be entitled to payment of any previously declared bonus as provided
in Section 4(a) above.
b. In the
event of termination of Employee's employment pursuant to Section 9(b)(i)
of this Agreement, Sections 8(a) and 8(b) shall apply to Employee for
the number of months remaining under this Agreement at the time of termination
plus a period of six (6) months thereafter.
11. Remedies
Employer
recognizes that because of Employee's special talents, stature and opportunities
in the Healthcare industry, and because of the nature of and compensation
practices of said industry and the material impact that individual projects
can have on the Company's results of operations, in the event of termination
by Employer hereunder (except under Section 9(a)(i) or (ii), or in the
event of termination by Employee under Section 9(b)(i) before the end
of the agreed term), the Employer acknowledges and agrees that the provisions
of this Agreement regarding further payments of base salary, bonuses
and the exercisability of Rights constitute fair and reasonable provisions
for the consequences of such termination, do not constitute a penalty,
and such payments and benefits shall not be limited or reduced by amounts'
Employee might earn or be able to earn from any other employment or
ventures during the remainder of the agreed term of this Agreement.
12. Excise Tax. In the event that any payment or benefit received or to be received by Employee in connection with a termination of his employment with Employer would constitute a "parachute payment" within the meaning of Code Section 280G or any similar or successor provision to 280G and/or would be subject to any excise tax imposed by Code Section 4999 or any similar or successor provision then Employer shall assume all liability for the payment of any such tax and Employer shall immediately reimburse Employee on a "grossed-up" basis for any income taxes attributable to Employee by reason of such Employer payment and reimbursements.
13. Attorneys'
Fees and Costs. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which he may be entitled.
14. Entire
Agreement; Survival. This Agreement contains the entire
agreement between the parties with respect to the transactions contemplated
herein and supersedes, effective as of the date hereof any prior agreement
or understanding between Employer and Employee with respect to Employee's
employment by Employer. The unenforceability of any provision of this
Agreement shall not effect the enforceability of any other provision.
This Agreement may not be amended except by an agreement in writing
signed by the Employee and the Employer, or any waiver, change, discharge
or modification as sought. Waiver of or failure to exercise any
rights provided by this Agreement and in any respect shall not be deemed
a waiver of any further or future rights.
b. The provisions
of Sections 4, 7, 8, 9(a)(ii), 9(b)(iii), 10, 11, 12, 14, 16, 17 and
18 shall survive the termination of this Agreement.
15. Assignment.
This Agreement shall not be assigned to other parties.
16.
Governing Law. This Agreement and all the amendments
hereof, and waivers and consents with respect thereto shall be governed
by the laws of the State of New York, without regard to the conflicts
of laws principles thereof.
17. Notices.
All notices, responses, demands or other communications under this Agreement
shall be in writing and shall be deemed to have been given when
a. delivered
by hand;
b. sent be
telex or telefax, (with receipt confirmed), provided that a copy is
mailed by registered or certified mail, return receipt requested; or
c.
received by the addressee as sent be express delivery service (receipt
requested) in each case to the appropriate addresses, telex numbers
and telefax numbers as the party may designate to itself by notice to
the other parties:
(i) if to the Employer:
0 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telefax: (000) 000-0000
Telephone:(000)-000-0000
(ii) if to the Employee:
0 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telefax: (000) 000-0000
Telephone:(000)-000-0000
18. Severability
of Agreement. Should any part of this Agreement for any
reason be declared invalid by a court of competent jurisdiction, such
decision shall not affect the validity of any remaining portion, which
remaining provisions shall remain in full force and effect as if this
Agreement had been executed with the invalid portion thereof eliminated,
and it is hereby declared the intention of the parties that they would
have executed the remaining portions of this Agreement without including
any such part, parts or portions which may, for any reason, be hereafter
declared invalid.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned have executed this agreement
as of the day and year first above written.
Employee
Signature: /s/ Xxxxx Xxxx
Printed Name: Xxxxx Xxxx
Date:
By: /s/ Xxx Xxxxx
Name: Xxx Xxxxx
Title: Chief Executive Officer
Date:
