EMPLOYMENT AGREEMENT
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Worldwide Medical Corporation, a Delaware Corporation, located at 00
Xxxxxxxx Xxxxxx Xxxxx, Xxxx Xxxxxx, XX 00000, hereinafter referred to as
"Employer", and Xxxxx X. Xxxxxxxx (home address of __________________________,
________), hereinafter referred to as "Employee", in consideration of the mutual
promises made herein, agree as follows:
ARTICLE 1. TERM OF EMPLOYMENT
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SECTION 1. 01. SPECIFIED PERIOD. Employer hereby employs Employee and
Employee hereby accepts employment with Employer for a period of three (3) years
beginning on October 1, 2002, and terminating on October 1, 2005.
SECTION 1. 02. AUTOMATIC RENEWAL. This agreement shall be renewed
automatically for succeeding terms of three (3) years each, unless either party
gives notice to the other at least ninety (90) days prior to the expiration of
any term of his or its intention not to renew. These dates shall be calendared.
SECTION 1. 03. "EMPLOYMENT TERM" DEFINED. As used herein, the phrase
"employment term" refers to the entire period of employment of Employee by
Employer hereunder, whether for the periods provided above, or whether
terminated earlier as hereinafter provided or extended by mutual agreement
between Employer and Employee.
SECTION 1. 04. ANNUAL REVIEW. The compensation committee will grant
Employee an annual review.
ARTICLE 2. DUTIES AND OBLIGATIONS OF EMPLOYEE
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SECTION 2. 01. GENERAL DUTIES. Employee shall serve as the both the
Chief Operating Officer and Chief Financial Officer of Worldwide Medical
Corporation. In that capacity, Employee shall do and perform all services,
acts, or things necessary or advisable to manage and conduct the business of
Employer, including the hiring and firing of all employees other than the
officers of Employer, subject at all times to the policies set by Employer's
Board of Directors, and to the consent of the Board when required by the terms
of this contract.
SECTION 2. 02. MATTERS REQUIRING CONSENT OF BOARD OF DIRECTORS.
Employee shall not, without specific approval of Employer's Board of Directors,
do or contract to do any of the following:
(1) Purchase capital equipment for amounts in excess of the amounts budgeted
for expenditure by the Board of Directors;
(2) Terminate the services of any other officer of Employer or hire any
replacement of any officer whose services have been terminated; or
(3) Commit Employer to the expenditure of more than $50,000.
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SECTION 2. 03. DEVOTION TO EMPLOYER'S BUSINESS.
(a) Employee shall devote his entire Productive time, ability, and
attention to the business of Employer during the term of this contract.
(b) Employee shall not engage in any other business duties or pursuits
whatsoever, or directly or indirectly render any services of a business,
commercial, or professional nature to any other person or organization, whether
for compensation or otherwise, without the prior written consent of Employer's
Board of Directors. However, the expenditure of reasonable amounts of time for
educational, charitable, or professional activities shall not be deemed a breach
of this agreement if those activities do not materially interfere with the
services required under this agreement and shall not require the prior written
consent of Employer's Board of Directors.
(c) This agreement shall not be interpreted to prohibit Employee from
making passive personal investments or conducting private business affairs if
those activities do not interfere or conflict with the services required under
this agreement. However, as more specifically set forth in Section 2. 04,
herein, Employee shall not directly or indirectly acquire, hold, or retain any
interest in any business competing with or similar in nature to the business of
Employer.
SECTION 2. 04. COMPETITIVE ACTIVITIES. During the term of this
contract, and for a period of twelve months after termination (whether the
Employee is terminated with or without cause and whether the Employee is
terminated by the Company or the Employee quits), Employee shall not, directly
or indirectly, either as an employee, employer, consultant, agent, principal
partner, stockholder, corporate officer, director, or in any other individual or
representative capacity, engage or participate in any business that is in
competition in any manner whatsoever with the business of Employer. Employee
further acknowledges that this non-compete provision itself survives the
termination of the employment agreement.
SECTION 2. 05. UNIQUENESS OF EMPLOYEE'S SERVICES. Employee hereby
represents and agrees that the services to be performed under the terms of this
contract are of a special, unique, unusual, extraordinary, and intellectual
character that gives them a peculiar value, the loss of which cannot be
reasonably or adequately compensated in damages in an action at law. Employee
therefore expressly agrees that Employer, in addition to any other rights or
remedies that Employer may posses, shall be entitled to injunctive and other
equitable relief to prevent or remedy a breach of this contract by Employee.
SECTION 2. 06. EMPLOYEE INDEMNIFICATION FOR NEGLIGENCE OR MISCONDUCT.
Employee shall indemnify and hold Employer harmless from all liability for loss,
damage, or injury to persons or property resulting from the negligence or
misconduct of Employee.
SECTION 2. 07. TRADE SECRETS.
(a) The parties acknowledge and agree that during the term of this
agreement and in the course of the discharge of his duties hereunder, Employee
shall have access to and become acquainted with information concerning the
operation and processes of Employer, including without limitation, financial,
personnel, sales, and other information that is owned by Employer's business,
and that such information constitutes Employer's trade secrets.
(b) Employee specifically agrees that he shall not misuse,
misappropriate, or disclose any such trade secrets, directly or indirectly to
any other person or use them in anyway, either during the term of this agreement
or at any other time thereafter, except as is required in the course of his
employment hereunder.
(c) Employee acknowledges and agrees that the sale or unauthorized use
or disclosure of any of Employer's trade secrets obtained by Employee during the
course of his employment under this agreement, including information concerning
Employer's current or any future and proposed work, services, or products, the
facts that any such work production, as well as any descriptions thereof,
constitute engage in any unfair competition with Employer, either during the
term of this agreement or at any other time thereafter.
(d) Employee further agrees that all files, records, documents,
drawing, specifications, equipment, and similar items relating to Employer's
business, whether prepared by Employee or others, are and shall remain
exclusively the property of Employer and that they shall be removed from the
premises of Employer only with the express prior written consent of Employer's
Board of Directors. Employee shall not solicit or hire any client(s) or
employee(s) of Employer for twelve (12) months following termination of
employment. Confidential Information does not include: (1) information that was
in the public domain at the time of disclosure; or (2) information that
subsequently becomes part of public knowledge or literature through a deliberate
act of Employer or Employee as of the date of its becoming public.
ARTICLE 3. OBLIGATIONS OF EMPLOYER
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SECTION 3. 01. GENERAL DESCRIPTION. Employer shall provide Employee
with the compensation, incentives, benefits, and business expense reimbursement
specified elsewhere in this agreement.
SECTION 3. 02. OFFICE AND STAFF. Employer shall provide Employee with
an office, secretarial service, office equipment, supplies, and other facilities
and services, suitable to Employee's position and adequate for the performance
of his duties.
ARTICLE 4. COMPENSATION OF EMPLOYEE
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SECTION 4. 01. ANNUAL SALARY.
(a) As compensation for the services to be rendered hereunder, Employee
shall receive an annual salary at the rate of $150,000.00 PER ANNUM, payable not
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less than twice each month (or otherwise as agreed by the parties) during the
employment term.
(b) Employee shall receive such annual increases in salary as may be
determined by Employer's Board of Directors in its sole discretion on the
anniversary of this agreement.
SECTION 4. 02. TAX WITHHOLDING. Employer shall have the right to
deduct or withhold from the compensation due to Employee hereunder any and all
sums required for federal income and Social Security taxes and all state or
local taxes now applicable or that may be enacted and become applicable in the
future.
ARTICLE 5. EMPLOYEE INCENTIVES
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SECTION 5. 01. ANNUAL PROFIT SHARING. Employee will be eligible to
participate in the Employer's Annual Profit Sharing program as approved by the
Company's Board of Directors in amounts equal to other officers of the Company.
The bonus criteria will be established by management and the Compensation
Committee prior to the start of the 2003 Fiscal Year.
SECTION 5. 02. ANNUAL STOCK OPTIONS. Employee will be granted stock
options in the amount and vesting schedule detailed below:
- 150,000 options to purchase Worldwide Medical Corporation Common Stock
with a strike price of $0.40, vested monthly (evenly) over one (1) year.
In the event that the Company is acquired, there is a change in control, or
similar event, all options become immediately vested. Employee will be eligible
to participate in such other annual stock option grants as awarded other
Officers and Directors of the Company.
SECTION 5. 03. SIGN ON BONUS. In consideration of this agreement, and
as inducement for Employee to so execute this agreement, Employee will be issued
100,000 shares of Worldwide Medical Corporation restricted Common Stock as soon
as practical after this agreement is executed.
ARTICLE 6. EMPLOYEE BENEFITS
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SECTION 6. 01. ANNUAL VACATION. Employee shall be entitled to fifteen
(15) days vacation time each year, based on the Employer's fiscal year, without
loss of compensation. In the event that Employee is unable for any reason to
take the total amount of vacation time authorized herein during any year, he may
accrue that time and add it to vacation time for any following year, up to a
maximum of twenty (20) vacation days.
SECTION 6. 02 ILLNESS. Employee shall be entitled to five (5) days per
year as sick leave with full pay. There shall be no accrual of unused sick
leave.
SECTION 6. 03. MEDICAL COVERAGE. Employer agrees to provide Employee &
Family coverage for medical, major medical, hospital, dental, eye care insurance
and life insurance (in the amount of $500,000) with beneficiary to be designated
by Employee. The cost of such coverage will be the responsibility of Employer.
The company will use its best efforts provide a disability insurance policy in
the name of the Employee, to provide benefits to compensate Employee for
termination under section 8.02b.
ARTICLE 7. BUSINESS EXPENSES
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SECTION 7. 01. REIMBURSEMENT OF OTHER BUSINESS EXPENSES.
(a) Employer shall promptly reimburse Employee for all other reasonable
business expenses incurred by Employee in connection with the business of
Employer.
(b) Each such expenditure shall be reimbursable only if it is of a
nature qualifying it as a proper deduction on the federal and state income tax
return of Employer.
(c) Each such expenditure shall be reimbursable only if Employee
furnishes to Employer adequate records and other documentary evidence required
by federal and state statutes and regulations issued by the appropriate taxing
authorities for the substantiation of each such expenditure as an income tax
deduction.
ARTICLE 8. TERMINATION OF EMPLOYMENT
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SECTION 8. 01. TERMINATION UPON DEATH. Employee's employment hereunder
shall terminate upon his death, in which event the Employer shall pay to such
person as the Employee shall have designated in a written notice filed with the
Employer, or if no such person shall have been designated to his estate, all
salary, amounts due under benefit plans and profit sharing plans, and
reimbursement of business expenses through the date of termination.
SECTION 8. 02. TERMINATION UPON DISABILITY. If, as a result of a
permanent mental or physical disability, Employee shall have been absent from
his duties hereunder on a full-time basis for three (3) consecutive months,
("Disability") and, within thirty (30) days after the Employer notifies Employee
in writing that it intends to replace him, (which notice can be given at the end
of the second month during such three-month period), Employee shall not have
returned to the performance of his duties on a full-time basis, the Employer
shall be entitled to terminate Employee's employment. In addition, Employee
shall, upon his Disability, have the right to terminate his employment with
Employer. If such employment is terminated (whether by the Employer or
Employee) as a result of Employee's Disability, then Employer shall pay to
Employee all salary, amounts due under benefit plans and profit sharing plans,
and reimbursement of business expenses, through the date of termination.
SECTION 8. 03. TERMINATION FOR CAUSE. The Employer shall be
entitled to terminate Employee's employment for Cause, in which event Employee
shall be entitled to all salary, amounts due under benefit plans and profit
sharing plans, and reimbursement of business expenses, through the date of
termination. For purposes of this agreement, "Cause" shall mean (i) the
conviction of Employee of a felony which can reasonably be expected to have a
material adverse impact on the Employer's business or reputation, (ii) the
commission by Employee of an act of fraud or embezzlement involving assets of
the Employer or its customers, suppliers or affiliates, (iii) the commission by
Employee of an act of moral turpitude as determined by the Employer's Board of
Directors, (iv) a willful breach or habitual neglect of Employee's duties which
he is required to perform under the terms of his employment, or (v) failure to
timely produce any and all documentation, including financial statements and
supporting documentation, to the Board of Directors or any committee appointed
by the Board of Directors, upon request therefrom. Notwithstanding the
foregoing, Employee shall not be deemed to have been terminated for Cause unless
and until there shall have been delivered to Employee a notice of termination
which specifies the grounds for termination and a statement of supporting facts.
If such employment is terminated for Cause, then Employer shall pay to Employee
all salary, amounts due under benefit plans and profit sharing plans, and
reimbursement of business expenses, through the date of termination.
SECTION 8. 04. TERMINATION OTHER THAN FOR CAUSE. Employee shall be
entitled to terminate Employee's employment at any time and the Employer shall
be entitled to terminate Employee's employment at any time (a termination for
"Good Reason"). If such employment is terminated by Employer for Good Reason
after the second year of employment (including upon the voluntary or involuntary
dissolution of Employer as a result of a merger or consolidation in which
Employer is not the surviving corporation, or a transfer of all or substantially
all of the assets of Employer (a "Merger")), then Employer (or its successor in
the event of a Merger) shall pay to Employee all amounts due as reimbursement of
business expenses through the date of termination, plus all salary and amounts
due under benefit plans and profit sharing plans for a period of six (6) months
following the termination date. If such employment is terminated by Employer
for Good Reason during the first or second year of employment (including as a
result of a Merger), then Employer (or its successor in the event of a Merger)
shall pay to Employee all amounts due as reimbursement of business expenses
through the date of termination, plus all salary and amounts due under benefit
plans and profit sharing plans for a period of three (3) months following the
termination date. If such employment is terminated by Employee for Good Reason,
then Employer (or its successor in the event of a Merger) shall pay to Employee
all amounts due as reimbursement of business expenses through the date of
termination.
ARTICLE 9. GENERAL PROVISIONS
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SECTION 9. 01. NOTICES. Any notices to be given hereunder by either
party to the other shall be in writing and may be transmitted by personal
delivery or by email, mail, registered or certified, postage prepaid with return
receipt requested. Mailed notice shall be addressed to the parties at the
addresses appearing in the introductory paragraph of this agreement, but each
party may change that address by written notice in accordance with this section.
Notices delivered personally shall be deemed communicated as of the date of
actual receipt; mailed notices shall be deemed communicated as of seven (7) days
after the date of mailing.
SECTION 9. 02. ARBITRATION.
(a) Any controversy between Employer and Employee involving the
construction or application of any of the terms, provisions, or conditions of
this agreement shall on written request of either party served on the other be
submitted to arbitration. Arbitration shall comply with and be governed by the
provisions of the California Arbitration Act.
(b) Employer and Employee shall each appoint one person to hear and
determine the dispute. If the two (2) persons so appointed are unable to agree,
then those persons shall select a third impartial arbitrator whose decision
shall be final and conclusive upon both parties.
(c) The cost of arbitration shall be borne by the losing party or in
such proportions as the arbitrators decide.
SECTION 9. 03. ATTORNEY'S 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 that party may
be entitled. This provision shall be construed as applicable to the entire
contract.
SECTION 9. 04. ENTIRE AGREEMENT. This agreement supersedes any and all
other agreements, either oral or in writing, between the parties hereto with
respect to the employment of Employee by Employer and contains all of the
covenants and agreements between the parties with respect to that employment in
any manner whatsoever. Each party to this agreement acknowledges that no
representation, inducements, promises, or agreements, orally or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise not
contained in this agreement shall be valid or binding on either party.
SECTION 9. 05. MODIFICATIONS. Any modification of this agreement will
be effective only if it is in writing and signed by the party to be charged.
SECTION 9. 06. EFFECT OF WAIVER. The failure of either party to insist on
strict compliance with any of the terms, covenants, or conditions of this
agreement by the other party shall not be deemed a waiver or relinquishment of
any right or power at any one time or times be deemed a waiver or relinquishment
of that right or power for all or any other times.
SECTION 9. 07. PARTIAL INVALIDITY. If any provision in this
agreement is held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions shall nevertheless continue in full
force without being impaired or invalidated in any way.
SECTION 9. 08. LAW GOVERNING AGREEMENT. This agreement shall be governed by
and construed in accordance with the laws of the State of California.
SECTION 9. 09. UNDERSTANDING AGREEMENT. Employee has read and fully
understands the points listed above and has agreed to adhere to all sections as
presented.
Executed on September 16, 2002, at Lake Forest, California.
Worldwide Medical Corporation,
A Delaware Corporation
By: /s/ Xxxxxx X. XxXxxxx
______________________
Its: President
______________________
"Employer"
/s/ Xxxxx X. Xxxxxxxx
______________________
"Employee"
