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Exhibit 10.47
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, made as of March 15, 1996, by and
between JEFFCO EXPRESS MEDICAL SUPPLY, INC., a New York corporation having its
principal place of business at 000 Xxxx Xxxxxxxxxxx Xxxx, Xxxxx Xxxxxx, Xxx Xxxx
00000 (the "Company"), and XXXX XXXXXXXX, residing at 00 Xxxxxx Xxxxx, Xxxx
Xxxxxxxxx, Xxx Xxxx 00000 (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is the sole stockholder of
the Company;
WHEREAS, the Company desires to retain the Executive
as its President and Chief Operating Officer to advance the business and
interests of the Company on the terms and conditions set forth herein;
WHEREAS, the Executive desires to provide his services to the
Company in such capacities, on and subject to the terms and conditions hereof.
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein and other good and valuable consideration, the
parties hereto hereby agree as follows:
1. EMPLOYMENT. Subject to all of the terms and conditions
hereof, the Company does hereby employ the Executive, effective as of March 15,
1996 (the "Effective Date"), for a term commencing on the date hereof and ending
on the date which is five
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(5) years after the date hereof (subject to early termination as provided
herein) (the "Employment Term"), as its President and Chief Operating Officer,
and the Executive does hereby accept such employment.
2. DUTIES OF EXECUTIVE. The Executive shall, during the term
of employment hereunder, perform such executive and administrative duties and
functions as may from time to time be appropriate, subject at all times to the
control and direction of the Board of Directors and the Chairman of the Board
and Chief Executive Officer of the Company. The Executive agrees to devote all
of his business time to the business and affairs of the Company. The Executive
agrees to perform his duties hereunder faithfully, diligently and to the best of
his abilities and to refrain from engaging in any other business activity that
does, will or could be deemed to interfere with the performance of his duties
hereunder or does, will or could reasonably be deemed to conflict with the best
interests of the Company. The Executive agrees to accept the payments to be made
to him under this Agreement as full and complete compensation for the services
required to be performed by, and the covenants of, the Executive under this
Agreement.
3. COMPENSATION.
3.1 BASE SALARY. The Company agrees to pay the
Executive an annual base salary at the rate of One Hundred Fifty Thousand
Dollars ($150,000) per annum (the "Base Salary") payable
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in substantially equal installments every week or in such other manner as the
Company may generally pay its employees. The Base Salary may be increased, but
not decreased, from time to time; provided, however, that this Agreement shall
not be deemed abrogated or terminated if the Company shall determine to increase
the Base Salary (or any other compensation of the Executive) for any period of
time, or if the Executive shall accept such increase. The Company agrees to
review the Base Salary of the Executive on an annual basis; but nothing
contained herein shall be deemed to obligate the Company to increase the Base
Salary at such time, or at any other time. Notwithstanding anything contained
herein, the Base Salary may not be decreased by the Company without the consent
of the Executive.
3.2 REGULAR BENEFITS. The Executive shall be entitled to
participate in any health insurance, accident insurance, hospitalization
insurance, life insurance, pension, or any other similar plan or benefit
afforded to its officers generally, if and to the extent that the Executive is
eligible to participate in accordance with the provisions of any such insurance,
plan or benefit generally (such benefits, collectively, the "Regular Benefits").
Nothing contained herein is intended, or shall be construed, to require the
Company to institute or retain any Regular Benefit, or any particular plan,
insurance or benefits.
3.3 BONUS PROGRAM. In order to provide performance-based
incentive compensation to the Executive, the
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Company hereby agrees to pay the Executive, in addition to the Base Salary, a
bonus (the "Cash Bonus") in respect of the first year during the Employment Term
(the "Initial Year"), in an amount equal to ten (10) percent of the excess of
the "pre-tax income" of the Company, which shall be based upon the financial
statements of the Company and prepared in accordance with generally accepted
accounting principles on a "stand-alone" basis, over $300,000. The Company's
pre-tax income shall be determined by the Board of Directors of the Company (or
a subcommittee thereof appointed for such purpose) based on the unaudited
financial statements of the Company with respect to the Initial Year, which
shall be prepared in accordance with generally accepted accounting principles on
a "stand-alone" basis (i.e., actual costs and expenses of the Company and direct
and indirect allocable costs and expenses shall be taken into account in the
preparation of the unaudited financial statements on a "stand-alone" basis). The
Board of Directors of the Company (or a subcommittee thereof appointed for such
purpose) shall determine the extent, if any, to which the Cash Bonus shall have
been earned, which determination shall be made on or before the ninetieth (90th)
day (the "Determination Date") following the completion of the Initial Year. The
Cash Bonus, if any, shall be paid to the Executive on or before the tenth (10th)
day following the Determination Date (the "Payment Date"). In any event, all
matters pertaining to the determination of the Company's pre-tax income and the
payment of the Cash Bonus to the Executive hereunder, shall be administered by
the Board of Directors of the
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Company (or a subcommittee thereof appointed for such purpose) in its reasonable
discretion consistent with the terms hereof, the determination of which shall be
final, conclusive and binding for all purposes. Following the Initial Year, a
new bonus program will be developed which will be mutually acceptable to the
Executive and the Company and it is intended that this new bonus program will be
an upward modification of the first year's plan.
3.4 AUTOMOBILE ALLOWANCE. The Company recognizes that
the Executive will require the use of an automobile for business purposes.
Therefore, the Company will provide the Executive with an automobile allowance
of $500 per month. In addition, the Company will reimburse the Executive for his
gas and normal repair expenses for the operation of the automobile for business
purposes.
4. TERMINATION AND SEVERANCE ARRANGEMENTS.
(a) The Executive's employment hereunder may be
terminated under the following circumstances:
(i) The Executive may terminate his
employment hereunder at any time on not less than ninety (90) days' prior
written notice to the Company.
(ii) In the event of the death of or
adjudicated incompetency or adjudicated insanity of the Executive during the
Employment Term, this Agreement and all benefits payable hereunder shall
terminate on the date of death or adjudication of incompetency or adjudicated
insanity of the Executive.
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(iii) If the Executive, because of illness,
injury or other incapacitating condition, is unable to perform the services
required to be performed by him under this Agreement for a period or periods
aggregating more than sixty (60) days in any twelve (12) consecutive months or a
period of forty-five (45) consecutive days during any twelve (12) month period,
then the Company, in its sole discretion, may terminate this Agreement by giving
notice thereof to the Executive, and this Agreement and all benefits payable
hereunder shall terminate upon the date of such notice.
(iv) The Company may terminate the
Executive's employment at any time "for Cause". For purposes of this Agreement,
the term "Cause" shall mean: (A) gross negligence of the Executive in the
performance of his duties, (B) the Executive's commission of any felony or any
misdemeanor involving violence, drugs, dishonesty or a breach of trust, (C) any
material misappropriation, or material conversion of any property of the Company
or any of its "affiliates" (as such term is defined herein) (whether or not a
felony or misdemeanor), or any embezzlement of the Company's or its affiliates'
property, (D) the willful engagement by the Executive in conduct which is
materially injurious to the Company or any of its affiliates, (E) the
Executive's material breach of any of the covenants contained herein. As used
herein, the term "affiliates" shall have the meaning ascribed to such term in
Rule 405 of the Securities Act of
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1933, as amended, and shall include, but not be limited to, all direct and
indirect subsidiaries.
(b) Upon any termination of the Executive's
employment under Section 4(a) of this Employment Agreement, the Executive shall
be entitled to receive solely all amounts and benefits to be paid or provided by
the Company under Sections 3.1 and 3.2 of this Employment Agreement to the date
of such termination.
5. EXECUTIVE COVENANTS.
5.1 NON-COMPETITION COVENANT.
(a) The Executive expressly covenants and agrees
that, during the period commencing on the Effective Date and ending on the
Termination Date (as hereinafter defined), subject to extension as provided
herein, the Executive will not compete, directly or indirectly, own, manage,
operate, join, control or participate in or be connected with as an officer,
employee, consultant, partner, stockholder, lender, or otherwise, any
Competitor, as defined below, or any subsidiary or affiliate thereof. For
purposes hereof, a "Competitor" shall be deemed to mean any business,
individual, partnership, firm, corporation or organization (other than the
Company or any direct or indirect subsidiary or affiliate of the Company
(collectively, the Company Affiliates")) anywhere in the United States which is
(i) in competition with the then-business of the Company or any Company
Affiliate, or (ii) involved in the business of the Company or any Company
Affiliate (i.e., the medical products business) as then
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conducted by any person, firm or corporation which shall succeed to all or a
substantial part of the business of the Company or any Company Affiliate.
(b) Nothing in this Agreement is intended, or shall
be construed, to prevent Executive during the term hereof or thereafter from
investing in the stock or other securities listed on a national securities
exchange or traded in the over-the-counter market of any corporation which is at
the time a Competitor provided that Executive and members of his immediate
family shall not, directly or indirectly, hold, beneficially or otherwise, in
the aggregate, more than one percent (1%) of any issue of such stock or other
securities of any one (1) such corporation.
(c) During the period commencing on the date hereof
and ending on the Termination Date, the Executive agrees that he will not,
directly or indirectly, interfere with or solicit (i) any of the business,
customers or accounts of the Company or any of the Company Affiliates which
existed at any time during the period commencing on the Effective Date and
ending on the Termination Date, or (ii) any prospective customer of the Company
or any Company Affiliate whose business the Company or any Company Affiliate is
in the process of soliciting at any time during the period commencing on the
Effective Date and ending on the Termination Date; and during the period
commencing on the date hereof and ending on the Termination Date, the Executive
agrees that he will not, directly or indirectly, solicit (i) the employment of
or hire any employee or representative of the Company
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or any of the Company Affiliates who was so employed, or otherwise had a
commercial relationship with the Company or any Company Affiliate, at any time
during the period commencing on the Effective Date and ending on the Termination
Date, or (ii) any supplier of the Company or any of the Company Affiliates at
any time during the period commencing on the Effective Date and ending on the
Termination Date, or induce or request any such person or business entity to
curtail or terminate its commercial or employment relationship with the Company
or any of the Company Affiliates.
(d) As used herein, "Termination Date" means the
later to occur of (i) the fifth (5th) anniversary of the Effective Date of this
Agreement, or (ii) the date as of which the Executive ceases to be engaged by
the Company, or any of the Company Affiliates, in a capacity substantially
similar to the Executive's duties and responsibilities as outlined herein, plus
two (2) years if the Company exercises its Non-Competition Extension Option (as
hereinafter defined).
(e) In the event this Employment Agreement is not
renewed or otherwise renegotiated on terms and conditions mutually agreeable to
the Company and the Executive on or before the one hundred twentieth (120th) day
prior to the fifth (5th) anniversary of the Effective Date of this Employment
Agreement, the terms and provisions of the non-competition covenant contained in
Section 5.1 of this Employment Agreement shall be of no force and effect, unless
the Company, in its sole discretion, notifies the Executive
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on or before the ninetieth (90th) day prior to the fifth (5th) anniversary date
of the Effective Date of this Employment Agreement of its decision to continue
to compensate the Executive for an additional two (2) year period (the
"Non-Competition Extension Option") at an annual rate in an amount equal to the
average Base Salary and bonus earned plus all Regular Benefits over the
Employment Term, in which case, all of the terms and provisions of the
non-competition covenant contained in Section 5.1 of this Employment Agreement
shall remain in full force and effect for such additional two (2) year period.
5.2 CONFIDENTIAL INFORMATION. The Executive expressly
covenants and agrees that he will not at any time, whether during or after his
employment by the Company, directly or indirectly, use or permit the use of any
trade secrets, confidential information, or proprietary information (including,
without limitation, customer lists, costing information, technical information,
software techniques, business plans, marketing data, financial information or
similar items) of the Company, or any affiliate of the Company, in connection
with any activity or business, whether for his own account or otherwise (except
solely the business of the Company, if and to the extent that the Executive is
then an employee of the Company) and will not divulge such trade secrets,
confidential information, proprietary information or terms of this Employment
Agreement to any person, firm, corporation or other entity whatsoever.
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5.3 OWNERSHIP BY COMPANY. The Executive acknowledges
and agrees that all of his work product created, produced or conceived in
connection with his association with the Company shall be deemed work for hire
and shall be deemed owned exclusively by the Company. Without limiting the
generality of the foregoing, the Executive agrees that the Company shall have
and possess all proprietary rights, patent rights, copyright rights and trade
secret rights as may exist in such work product or as which are inherent therein
or appurtenant thereto. The Executive agrees to execute and deliver all
documents required by the Company to document or perfect the Company's
proprietary rights in and to the Executive's work product.
5.4 REMEDIES. In the event of the breach by Executive
of any of the terms and conditions of this Agreement on his part to be performed
hereunder, or in the event of the breach or threatened breach by Executive of
any of the terms and provisions of this Section 5, then the Company shall be
entitled, if it so elects, to institute and prosecute any proceedings in any
court of competent jurisdiction, either in law or equity, for such relief as it
deems appropriate, including, without limiting the generality of the foregoing,
any proceedings to obtain provable damages for any breach of this Agreement, to
enforce the specific performance thereof by Executive or to obtain an injunction
against the commission, threatened commission or continuance of any such breach
or threatened breach without the necessity of proving actual damages or that
damages would be inadequate or of posting a bond.
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In any such action, if the Company is successful, in whole or in part, Executive
shall further, as an element of the Company's damages, be liable for the
reasonable attorney's fees and expenses of the Company in the prosecution of
such action or proceeding; provided, however, that if the Executive prevails, in
whole or in part, in any such action or proceeding, and the matter is not
otherwise settled by mutual agreement of the parties, the Company shall
reimburse the Executive for the reasonable attorneys' fees and expenses of the
Executive in defending against such action or proceeding.
5.5 COVENANTS NON-EXCLUSIVE. The Executive
acknowledges and agrees that the covenants contained in this Section 5 shall not
be deemed exclusive of any common law rights of the Company in connection with
the relationships contemplated hereby; and that the Company shall have any and
all rights as may be provided by law in connection with the relationships
contemplated hereby.
6. GENERAL.
6.1 APPLICABLE LAW AND EXPENSES. This document shall,
in all respects, be governed by the laws of the State of New York. With regard
to such choice of law, the parties acknowledge that all of the negotiations
relating to this Agreement were conducted in New York State, and that this
Agreement has been executed by both parties in New York State. In any action or
proceeding between the Company and the Executive, the prevailing
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party shall be entitled to recover reasonable attorney's fees and costs as well
as any damages to which such party may be entitled.
6.2 VENUE; PROCESS. The parties to this Agreement
agree that jurisdiction and venue shall properly lie in the Supreme Court of the
State of New York, Suffolk County, or in the United States District Court for
the Eastern District of New York, with respect to any legal proceedings arising
from this Agreement. Such jurisdiction and venue are merely permissive;
jurisdiction and venue shall also continue to lie in any court where
jurisdiction and venue would otherwise be proper. The parties agree that they
will not object that any action commenced in the foregoing jurisdictions is
commenced in a forum non conveniens. Notwithstanding the foregoing, however,
nothing contained in this Section 6 shall be deemed to limit or waive any right
of the parties to remove any dispute to federal court which might otherwise
properly be removed to such court.
6.3 SURVIVAL. Except as otherwise provided herein,
the parties hereto agree that the covenants contained in Section 5 hereof shall
survive any termination of employment by the Executive (other than wrongful
termination by the Company) and any termination of this Agreement. In addition,
the parties hereto agree that any compensation or right which shall have
accrued, wholly or partly to the Executive as of the date of any termination of
employment or termination hereof shall survive any such termination and shall be
paid when due to the extent accrued on the date of such termination.
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6.4 CLAIMS BY EXECUTIVE'S PRIOR EMPLOYER. The
Executive represents and warrants to the Company (a) that, except for the
original shareholders' agreement dated June 30, 1993 (and Rider), which by its
terms expired on June 30, 1995, and has not been renewed in any respect by the
parties thereto, he is not a party to any written employment agreement,
stockholders' agreement, covenant not to compete, confidentiality agreement,
non- solicitation of customer agreement or any other written agreement,
arrangement or understanding with Jofra Enterprises, Inc. or any of its
subsidiaries or affiliates, Xxxxxx Xxxxxx, Xxxx Xxxxxxxxxx or any of their
respective representatives or agents (collectively, the "Prior Employer") which
otherwise restricts or limits the Executive's employment with the Company in any
manner (collectively, the "Restrictive Agreements), and (b) that he is not a
party to any Restrictive Agreement. Subject to the representations and
warranties contained in this Section 6.5 being true and correct in all respects
on and as of the date hereof and at all times hereafter, the Company shall,
subject to the terms and conditions contained herein, defend the Executive and
hold him harmless from and against any and all demands, claims, and lawsuits
(collectively, "Claims") by and on behalf of the Prior Employer, directly or
indirectly, arising out of, or related to the circumstances of, the negotiation
and execution of this Agreement, and the Executive's commencement and
continuation of employment hereunder and otherwise generally acting on the
Company's behalf in competition with the Prior Employer; provided, however, such
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indemnification provisions shall not apply (i) in the event it is determined
that the representations and warranties contained in this Section 6.5 are not
true and correct in all respects on and as of the date hereof and at all times
hereafter, or (ii) to any Claims, directly or indirectly, arising out of, or
related to the Executive's acts or omissions during his employment with the
Prior Employer (including, but not limited to, any breach of a fiduciary duty),
other than the Executive's act of terminating his employment with his Prior
Employer.
The Company shall contest or defend any Claim at its
sole cost and expense and through counsel of its own choosing, which counsel
shall be reasonably acceptable to the Executive. The Company shall have the
right to settle or compromise any Claim without the consent of the Executive.
The Executive shall make available to the Company or its agents all records and
other materials in his possession reasonably required by it for its use in
contesting or defending any Claim and shall otherwise cooperate, at the expense
of the Company, in the defense thereof in such manner as the Company reasonably
requests.
6.5 NOTICES. Any and all notices required or desired
to be given hereunder by any party shall be in writing and shall be validly
given or made to another party if delivered either personally, by telex,
facsimile transmission, same day delivery service, overnight expedited delivery
service, or if deposited in the United States Mail, certified or registered,
postage prepaid, return receipt requested. If notice is served personally,
notice
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shall be deemed effective upon receipt. If notice is served by telex or by
facsimile transmission, notice shall be deemed effective upon transmission,
provided that such notice is confirmed in writing by the sender within one day
after transmission. If notice is served by same day delivery service or
overnight expedited delivery service, notice shall be deemed effective the day
after it is sent, and if notice is given by United States mail, notice shall be
deemed effective five days after it is sent. In all instances, notice shall be
sent to the parties at the following addresses:
If to the Company:
000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Chairman of the Board and
Chief Executive Officer
If to the Executive:
Mr. Xxxx Xxxxxxxx
00 Xxxxxx Xxxxx
Xxxx Xxxxxxxxx, Xxx Xxxx 00000
With a copy to:
Xxxxxxx Xxxxxxxxxxx, Esq.
Smith, Finklestein, Xxxxxxxx,
Xxxxx & Yakaboski
X.X. Xxx 000
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Any party may change its address for the purpose of receiving
notices by a written notice given to the other party.
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6.6 MODIFICATIONS OR AMENDMENTS. No amendment, change
or modification of this document shall be valid unless in writing and signed by
all of the parties hereto.
6.7 WAIVER. No reliance upon or waiver of one or more
provisions of this Agreement shall constitute a waiver of any other provisions
hereof.
6.8 SUCCESSORS AND ASSIGNS. All of the terms and
provisions contained herein shall inure to the benefit of and shall be binding
upon the parties hereto and their respective heirs, personal representatives,
successors and assigns. However, no party shall voluntarily assign any rights
hereunder, or delegate any duties hereunder, except upon the prior written
consent of the other.
6.9 SEPARATE COUNTERPARTS. This document may be
executed in one or more separate counterparts, each of which, when so executed,
shall be deemed to be an original. Such counterparts shall, together, constitute
and shall be one and the same instrument.
6.10 HEADINGS. The captions appearing at the
commencement of the sections hereof are descriptive only and are for convenience
of reference. Should there be any conflict between any such caption and the
section at the head of which it appears, the substantive provisions of such
section and not such caption shall control and govern in the construction of
this document.
6.11 FURTHER ASSURANCES. Each of the parties hereto
shall execute and deliver any and all additional papers,
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documents and other assurances, and shall do any and all acts and things
reasonably necessary in connection with the performance of their obligations
hereunder and to carry out the intent of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
JEFFCO EXPRESS MEDICAL
SUPPLY, INC.
By: /s/ Jeffco Express /s/ Xxxx Xxxxxxxx
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Name: XXXX XXXXXXXX
Title:
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