EXHIBIT 10.4
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") dated as of December 30, 2002,
by and between EMERGENT GROUP INC., a Nevada corporation having an office at 000
Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 ("Company"), and Xxxxx Xxxxxx
("Buther") residing at 000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx 00000.
W I T N E S S E T H:
WHEREAS, Company desires to engage the services of Xxxxx Xxxxxx
("Buther") and Buther desires to provide the services to Company in connection
with Company's business; and
WHEREAS, both parties desire to clarify and specify the rights and
obligations which each have with respect to the other in connection with
Buther's services.
NOW, THEREFORE, in consideration of the agreements and covenants herein
set forth, the parties hereby agree as follows:
1. Employment
Buther hereby agrees to be employed by Company as the President of
Company, and Buther hereby agrees to render his services as Company's President,
for the Term (as hereinafter defined), all subject to and on the terms and
conditions herein set forth.
2. Duties and Responsibilities of Buther
(a) Buther will be the President of Company, subject to the other
provisions of this Section 2. Buther shall be required to travel from
time to time, and spend as much time as necessary at the Company's
Glendale office to perform his duties hereunder. Buther shall not be
required to relocate from the New York, New York metropolitan area
without Buther's prior written consent, which consent may be withheld
by Buther in his absolute discretion. Buther shall also perform duties
as he deems appropriate for the Company's subsidiaries.
(b) During the term of this Agreement, Buther will exercise such
authority, perform such executive duties and functions and discharge
such responsibilities as are customarily vested in the chief operating
officer of a public company, including, authority with respect to among
other matters, purchasing, pricing, sales and the hiring, compensating
and discharging of employees, all subject to the overall authority of
the Chairman of the Board of Directors and the Board of Directors of
the Company consistent with the By-Laws of the Company. As such, Buther
shall be primarily responsible for the management of the sales,
marketing and operations of the Company. Buther shall use his best
efforts to maintain and enhance the business and reputation of Company
and shall perform such other duties commensurate with his position as
may, from time to time, be designated to Buther by the Board or the
Chairman of the Board.
3. Exclusivity of Service
The Company and Buther agree that Buther shall be required to devote
his full business time, effort and attention to the business and efforts of the
Company.
4. Compensation; Bonus
(a) In consideration for Buther's services to be performed under this
Agreement and as compensation therefor, Company shall pay to Buther, commencing
as of the date set forth above, in addition to all other benefits provided for
in this Agreement, a base salary at the rate of One Hundred Sixty One ($161,000)
Dollars per annum, (the "Buther Base Salary") which Buther Base Salary may be
increased in the sole discretion of the Board. All payments of Buther Base
Salary shall be payable in semi-monthly installments or otherwise in accordance
with Company's policies.
(b) In addition to the Buther Base Salary, in the event that Buther
attains the milestones ("Milestones") that are established from time to time in
accordance with Schedule I annexed hereto, Buther shall be entitled to an annual
bonus (the "Milestone Bonus") as indicated on Schedule I. The Milestone Bonus,
if any, shall be paid within thirty (30) days after the end of each fiscal year
end of the Company. Should this Agreement be terminated prior to the end of any
fiscal year for any reason other than that provided in paragraph 10(a), a
prorata portion of the Milestone Bonus shall be paid within 30 days of such
termination.
5. Benefits and Indemnification
Buther shall be entitled to the following during and in respect of the
term of this Agreement:
(a) Company shall provide Buther with hospitalization, medical and dental
insurance coverage and 401(k) benefits as is customary for other Most Senior
Officers of the Company.
(b) Buther shall be entitled to 3 weeks paid vacation to be taken at times
mutually and reasonably agreed upon by Buther and Company in addition to all
other holidays established as part of Company's standard practice.
(c) Buther shall be entitled to reimbursement for all reasonable
travel, reasonable entertainment and other reasonable expenses incurred in
connection with Company's business, provided that such expenses are adequately
documented and vouchered in accordance with Company's policies.
(d) The Company shall provide to Buther to the full extent provided
for under the laws of the Company's state of incorporation and the Company's
Certificate of Incorporation and Bylaws, indemnification for any claim or
lawsuit which may be asserted against Buther when acting in such capacity for
the Company and/or any subsidiary or affiliated business. The Company shall use
reasonable best efforts to include Buther as an insured under all applicable
directors' and officers' liability insurance policies maintained by the Company,
and any other subsidiary or affiliated business.
6. "Left Intentionally Blank"
7. Term of Employment
The term of Buther's employment hereunder shall be from the date hereof
for a period of eighteen (18) months (the "Term"), unless terminated prior
thereto in accordance with Section 10 hereof. The Agreement shall be renewable
annually thereafter unless either party gives the other ninety days written
notice prior to the end of the Term.
Notwithstanding anything herein to the contrary, the employment of
Buther shall commence effective December 30, 2002. However, Buther shall not
assume the title or the responsibilities of President until such time as the
Company is current with all filings under the Securities Exchange Act of 1934,
as amended.
8. Confidentiality; Inventions; Product Development, Etc.
(a) Restrictions on Proprietary Information. Buther acknowledges that
(i) because of his responsibilities at Company, Buther will help develop and
create, and will be exposed to, Company's business strategies, information on
customers and clients and other valuable confidential, proprietary and trade
secret information of Company (as more fully defined below, "Proprietary
Information"), (ii) in such capacity Buther will become familiar with procedures
and methods by which Company develops and conducts its business, (iii) Buther
will have access to Company's clients, channels for developing clients, and
other Proprietary Information, (iv) it would be unfair to Company if Buther were
to appropriate to himself or others the benefits of Company's resources expended
to develop such business relationships, (v) it would be unfair to Company if
Buther were to appropriate to himself or others the benefits of the business
which are critical to the success and survival of Company, and personnel and
other Proprietary Information which Company has developed and continues to
develop in the conduct of its business, and (vi) it is therefore fair that
reasonable restrictions should be placed on certain of Buther's activities
during and after the term of this Agreement.
All Proprietary Information shall be the sole property of Company, and
Company shall be the sole owner of all patents, copyrights, and other rights in
connection therewith. Buther hereby assigns to Company any rights he may have or
acquire in such Proprietary Information. At all times, both during the term of
this Agreement and after its termination for whatever reason, Buther will keep
in strictest confidence and trust all Proprietary Information, and Buther will
not use or disclose any Proprietary Information except as may be necessary in
the ordinary course of Buther performing his duties hereunder, as determined by
Buther. Except as required in his authorized duties on behalf of Company, Buther
will not use, copy, publish, summarize, or remove from Company's premises
Proprietary Information, or remove from the premises any other property of the
Company. In the event of termination of this Agreement for any reason, Buther
will deliver to Company all documents, notes, drawings, specifications, data,
and other materials of any nature pertaining to Buther's work with Company
and/or containing Proprietary Information, and Buther will not take with him any
of the foregoing, any reproduction of any of the foregoing, or any Proprietary
Information that is embodied in a tangible medium of expression. Buther agrees
that client or customer lists, business contracts and related items are the
property of Company.
(b) Definition of Proprietary Information. "Proprietary Information"
means all information and any idea in whatever form, tangible or intangible,
whether disclosed to or learned by Buther, pertaining in any manner to the
business of Company (or any of its affiliates) including, without limitation:
(i) client lists, client prospects, and business development information; (ii)
company lists, profiles and reports; (iii) training and research materials and
methodologies; (iv) structure, operations, pricing, financial and personnel
information; (v) information systems design and procedures; (vi) computer
technology designs, hardware configuration systems, and software designs and
implementations; (vii) information databases, interactive procedures,
navigation, functionality, web site design,, tests, analysis and studies
developed by or for the benefit of Company; (viii) plans, designs, inventions,
formulas, research and technology developed by or for the benefit of Company;
(ix) business information and business secrets of Company and its clients; (x)
trade secrets of Company; (xi) plans, prospects, policies, practices, and
procedures of Company which are not generally known in the industry; (xii)
licenses and agreements of any nature; and (xiii) all other proprietary and
confidential information of every nature and source. Proprietary Information
does not include information which: (A) is or becomes generally available to the
public through no breach of this Agreement or any other agreement to which
Company is a party; (B) was received from a third party free to disclose such
information without restriction; (C) is approved for release in writing by the
Board, subject to whatever conditions are imposed by the Board; or (D) is
required by law or regulation to be disclosed, but only to the extent necessary
and only for the purpose required. The foregoing definition of Proprietary
Information shall not be deemed to include an idea developed by Buther in the
exercise of his own mental faculties unless specifically and exclusively
developed for the use of the Company.
(c) Third-Party Information. Buther acknowledges that Company has
received and in the future will receive from third parties their confidential
information subject to a duty on Company's part to maintain the confidentiality
of this information and to use it only for certain limited purposes. Buther
agrees that he owes Company and these third parties, during and after the term
of this Agreement, a duty to hold all such confidential information in the
strictest confidence and not to disclose or use it, except as necessary to
perform any obligations hereunder and as is consistent with Company's agreement
with third parties.
(d) Inventions. Buther will promptly disclose to Company (or any
persons designated by it) all processes, formulas, data, computer programs,
software and documentation, know-how, improvements, discoveries, developments,
designs, algorithms, inventions, techniques, strategies and new products,
whether or not patentable or registrable under copyright or similar statutes,
made or conceived or reduced to practice or learned by Buther, either alone or
jointly with others, during the period of his employment that are related to or
useful in the business of Company, result from tasks assigned to Buther by
Company, or result from the use of premises owned, leased, or contracted for by
Company (all such processes, formulas, data, computer programs, software and
documentation, know-how, improvements, discoveries, developments, designs,
algorithms, inventions, techniques, strategies and new products are hereinafter
referred to as "Inventions"). Buther will also promptly disclose to Company, and
Company hereby agrees to receive all such disclosures in confidence, all other
processes, formulas, data, computer programs, software and documentation,
know-how, improvements, discoveries, developments, designs, algorithms,
inventions, techniques, strategies and new products, whether or not patentable
or registrable under copyright or similar statutes, made or conceived or reduced
to practice or learned by Buther, either alone or jointly with others, during
the period of his employment for the purpose of determining whether they
constitute "Inventions", as defined above.
Buther agrees that all Inventions shall be the sole property of
Company, and Company shall be the sole owner of all patents, copyrights, and
other rights in connection therewith. Buther hereby assigns to Company any
rights he or it may have or acquire in such Inventions. Buther also hereby
waives all claims to moral rights in any Invention. Buther further agrees as to
all such Inventions to assist Company as may be reasonably required (but at
Company's expense) to obtain and from time to time enforce patents, copyrights,
and other rights and protections relating to said Inventions in any and all
countries, and to that end Buther will execute all documents for use in applying
for and obtaining such patents, copyrights, and other rights and protections on
and enforcing such Inventions, as Company may desire, together with any
assignments thereof to Company or persons designated by it. Buther's obligation
to assist Company in obtaining and enforcing patents, copyrights, and other
rights and protections relating to such Inventions in any and all countries
shall continue beyond the termination of this Agreement, but Company shall
compensate Buther at a reasonable rate after the termination hereof for time
actually spent by Buther at Company's request on such assistance, provided: that
such assistance shall not interfere with Buther's subsequent employment. In the
event Company is unable, after reasonable effort, to secure Buther's signature
on any document or documents needed to apply for or prosecute any patent,
copyright, or other right of protection relating to an Invention, for any reason
whatsoever, Buther hereby irrevocably designates and appoints Company and its
duly authorized officers and agents as his agent and attorney-in-fact, to act
for and in his or its behalf and stead to execute and file any such application
or applications and to do all other lawfully permitted acts to further the
prosecution and issuance of patents, copyrights, or similar protections thereon
with the same legal force and effect as if executed by Buther. The foregoing
definition of Inventions shall not be deemed to include an idea developed by
Buther in the exercise of his own mental faculties unless specifically and
exclusively developed for the use of the Company.
(e) Records of Invention Ideas. Buther agrees to maintain adequate and
current written records on the development in connection with his employment of
all technology, ideas, and inventions, collectively referred to in this
Agreement as "Invention Ideas," and to disclose promptly to Company all
Invention Ideas and relevant records, which records will remain the sole
property of Company.
(f) Assignment. Subject to Section 8(g), Buther agrees to assign to
Company, without further consideration, his entire right, title, and interest
(throughout the United States and in all foreign countries), free and clear of
all liens and encumbrances, in and to each Invention Idea, which shall be the
sole property of Company, and, to the maximum extent permitted by applicable
law, shall be deemed works made for hire. In the event any Invention Idea shall
be deemed by Company to be patentable or otherwise registrable, Buther will
assist Company (at its expense) in obtaining letters patent or other applicable
registrations thereon and Buther will execute all documents and do all other
things (including testifying at Company's expense) necessary or proper to obtain
letters patent or other applicable registrations thereon and to vest Company
with full title thereto. Should Company be unable for any reason to secure
Buther's signature on any document necessary to apply for, prosecute, obtain or
enforce any patent, copyright, or other right or protection relating to any
Invention Idea, whether due to Buther's mental or physical incapacity or any
other cause, Buther hereby irrevocably designates and appoints Company and each
of its duly authorized officers and agents as their agent and attorney-in-fact,
to act for and in his behalf and stead, to execute and file any such document,
and to do all other lawfully permitted acts to further the prosecution,
issuance, and enforcement of patents, copyrights, or other rights or protections
with the same force and effect as if executed and delivered by him. The
power-of-attorney granted pursuant to this section 8(f) is coupled with an
interest and is irrevocable.
(g) License for Other Inventions. Except as Company may otherwise
agree, if, in the course of this Agreement, Buther incorporates into Company
property an Invention Idea owned by Buther or in which Buther has an interest,
Company is granted a nonexclusive, royalty-free, irrevocable, perpetual,
worldwide license to make, modify, use and sell his Invention Idea as part of
and in connection with Company property.
(h) Patent and Copyright Registration. Buther agrees to assist Company,
or its designee, at Company's expense, in every proper way to secure Company's
rights in the Invention Ideas and any copyrights, patents, mask work rights or
other intellectual property rights relating thereto in any and all countries,
including the disclosure to Company of all pertinent information and data with
respect thereto, the execution of all applications, specifications, oaths,
assignments and all other instruments which Company shall deem necessary in
order to apply for and obtain such rights and in order to assign and convey to
Company, its successors, assignees, and nominees the sole and exclusive rights,
title and interest in and to such Invention Ideas, and any copyrights, patents,
mask work rights or other intellectual property rights relating thereto. Buther
further agrees that the obligation to execute or cause to be executed, when it
is in his power to do so, any such instrument or papers shall continue after the
termination of this Agreement.
9. Non-Competition; Non-Solicitation
(a) Buther hereby agrees and covenants that during the Term hereof and
for a period of six (6) months thereafter that he will not directly or
indirectly engage in or become interested (whether as an owner, principal,
agent, stockholder, member, partner, trustee, venturer, lender or other
investor, director, officer, employee, consultant or through the agency of any
corporation, limited liability company, partnership, association or agent or
otherwise) in any business enterprise which is engaged in the current business
of the Company during the Term, it being agreed that the current business of the
Company is the rental of surgical equipment to healthcare providers on a per
procedure basis; provided, however, that ownership of not more than 5% of the
outstanding securities of any class of any entity that are listed on a national
securities exchange or traded in the over-the-counter market shall not be
considered a breach of this Section 9.
(b) Buther agrees and covenants that during the Term hereof and for a
period of six (6) months immediately thereafter, he and his agents will not
(without first obtaining the written permission of Company) directly or
indirectly participate in the solicitation of any business of any type conducted
by Company during the period of this Agreement from any person or entity which
was a client or customer of Company during the period of this Agreement, or was
a prospective customer of Company from which Buther solicited business or for
which a proposal for submission was prepared during the period.
(c) Buther agrees and covenants that during the Term and for a period
of six (6) months following this Agreement he will not (without first obtaining
the written permission of Company) directly or indirectly recruit for
employment, or induce or seek to cause such person to terminate his or her
employment with Company, any person who then is an employee of Company or who
was an employee of Company during the preceding six (6) months; provided,
however that the provisions of this Section 9 shall not apply to Xxxxx X. Xxxxx
or Xxxx Xxxx.
10. Termination
(a) Termination by the Company with Cause. Notwithstanding the terms
of this Agreement, Company may terminate this Agreement for cause ("Cause") in
the event (i) of Buther's commission of an act involving fraud, embezzlement, or
theft against the property or personnel of Company, (ii) Buther shall be
convicted of, or plead nolo contendere to a felony or engages in other criminal
conduct that could reasonably be expected to have a material adverse affect on
the business, assets, properties, prospects, results of operations or financial
condition of Company, or (iii) of the breach by Buther of the restrictive
covenants set forth in Sections 8 and 9 hereof. In the event this Agreement is
terminated pursuant to this Section 10(a), Buther's Base Salary and any unearned
Milestone Bonus and all benefits under Section 5a), b) and c) hereof shall
terminate immediately upon such discharge, and Company shall have no further
obligations to Buther except for payment and reimbursement for any monies due
which right to payment or reimbursement accrued prior to such termination.
(b) Death or Disability. The Company may terminate this Agreement upon
the disability or death of Buther by giving written notice to Buther. In the
case of disability, such termination will become effective immediately upon the
giving of such notice unless otherwise specified by the Company. For purposes of
this Section 10(b), "disability" shall mean that for a period of more than three
consecutive months in any 12-month period Buther is unable to perform the
essential functions of his position because of physical, mental or emotional
incapacity resulting from injury, sickness or disease. Upon any such
termination, the Company shall be relieved of all its obligations under this
Agreement, except for payment of the Buther Base Salary and Milestone Bonus
earned and unpaid through the effective date of termination. Nothing in this
provision is intended to violate state or federal laws.
(c) Termination by Buther. Buther may terminate this Agreement at any
time by giving thirty (30) days prior written notice to the Company. The Company
shall be relieved of all of its obligations under this Agreement, except for
payment of the Buther Base Salary and Milestone Bonus earned and unpaid through
the effective date of termination and those obligations in paragraph 5(d).
11. Violation of Other Agreements and Authority
(a) Buther represents and warrants to Company that he is legally able
to enter into this Agreement; that he is not prohibited by the terms of any
agreement, understanding or policy from entering into this Agreement; that the
terms hereof will not and do not violate or contravene the terms of any
agreement, understanding or policy to which Buther is or may be a party, or by
which Buther may be bound; that Buther is under no physical or mental disability
that would materially interfere with the performance of his duties under this
Agreement. Buther agrees that, as it is a material inducement to Company that
Buther make the foregoing representations and warranties and that they be true
in all material respects.
(b) Authority Relative to this Agreement. The Company has the requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement. The Board of
Directors of the Company has duly authorized the execution and delivery of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated on its part by this Agreement, and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or for the
Company to consummate the transactions contemplated by it. The Company has duly
validly executed and delivered this Agreement and it is a valid and binding
Agreement of the Company, enforceable against the Company in accordance with its
terms, subject to bankruptcy or insolvency laws affecting creditors' rights
generally and to general principles of equity.
12. Specific Performance; Damages
In the event of a breach of the provisions of Sections 8 and 9 hereof,
Buther agrees that the injury which could be suffered by Company would be of a
character which could not be fully compensated for solely by a recovery of
monetary damages. Accordingly, Buther agrees that in the event of a breach of
Sections 8 and 9 hereof, in addition to and not in lieu of any damages sustained
by Company and any other remedies which Company may pursue hereunder or under
any applicable law, Company shall have the right to seek equitable relief,
including issuance of a temporary or permanent injunction, by any court of
competent jurisdiction against the commission or continuance of any such breach
or threatened breach.
13. Stock Issuance Agreement
Simultaneously herewith, the Company acknowledges that it is entering
into that certain Stock Issuance Agreement dated December 30, 2002 with BJH
Management, LLC ("BJH") pursuant to which BJH is acquiring 11,502,970 shares of
common stock, par value $.001 per share, of the Company.
14. "Left Intentionally Blank"
15. Notices
Any and all notices, demands or requests required or permitted to be
given under this Agreement shall be given in writing and sent, by registered or
certified U.S. mail, return receipt requested, by hand, or by overnight courier,
addressed to the parties hereto at their addresses set forth above or such other
addresses as they may from time-to-time designate by written notice, given in
accordance with the terms of this Section, together with copies thereof as
follows:
In the case of Company, with a copy to:
Xxxxxx Xxxxx, P.C.
000 Xxxxx Xxxx Xxxx., Xxxxx 00
Xxxxx Xxxx, Xxx Xxxx, 00000
Attn: Xxxxxx Xxxxx, Esq.
In the case of Buther, with a copy to:
Xxxxx Xxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
Notice given as provided in this Section shall be deemed effective: (i) on the
date hand delivered, (ii) on the first business day following the sending
thereof by overnight courier, and (iii) on the third calendar day (or, if it is
not a business day, then the next succeeding business day thereafter) after the
depositing thereof into the exclusive custody of the U.S. Postal Service.
16. Waivers
No waiver by any party of any default with respect to any provision,
condition or requirement hereof shall be deemed to be a waiver of any other
provision, condition or requirement hereof; nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
17. Preservation of Intent
Should any provision of this Agreement be determined by a court having
jurisdiction in the premises to be illegal or in conflict with any laws of any
state or jurisdiction or otherwise unenforceable, Company agree that such
provision shall be modified to the extent legally possible so that the intent of
this Agreement may be legally carried out.
18. Entire Agreement
This Agreement sets forth the entire and only agreement or
understanding between the parties relating to the subject matter hereof and
supersedes and cancels all previous agreements, negotiations, letters of intent,
correspondence, commitments and representations in respect thereof among them,
and no party shall be bound by any conditions, definitions, warranties or
representations with respect to the subject matter of this Agreement except as
provided in this Agreement.
19. "Intentionally Left Blank"
20. Inurement; Assignment
The rights and obligations of Company under this Agreement shall inure
to the benefit of and shall be binding upon any successor of Company or to the
business of Company, subject to the provisions hereof. Neither this Agreement
nor any rights or obligations Buther hereunder shall be transferable or
assignable by Buther.
21. Amendment
This Agreement may not be amended in any respect except by an
instrument in writing signed by the parties hereto.
22. Headings
The headings in this Agreement are solely for convenience of reference
and shall be given no effect in the construction or interpretation of this
Agreement.
23. Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which when taken together shall
constitute one and the same instrument.
24. Governing Law
This Agreement shall be governed by, construed and enforced in accordance with
the internal laws of the State of New York, without giving reference to
principles of conflict of laws. Each of the parties hereto irrevocably consents
to the venue and exclusive jurisdiction of the federal and state courts located
in the State of New York, County of New York. The parties hereby knowingly,
irrevocably, voluntarily and intentionally waive any right they may have to a
trial by jury in respect of any action, proceeding or counterclaim based on this
employment Agreement or the transactions contemplated in it, or any course of
conduct, course of dealing, statements (whether verbal or written) or actions of
any party to it.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
Xxxxx Xxxxxx
By:/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Chief Executive
Officer
SCHEDULE I
MILESTONES BONUSES
A) Milestone Bonuses will be based on the following:
Profit Before Management Bonuses of at Least Bonus
$1,035,000 $50,000
$1,150,000 $75,000
over $1,150,000
$75,000 plus 6%
of the pretax
profit over
$1,150,000
