EXHIBIT 2.1
FORM OF
CONSULTING AGREEMENT
This CONSULTING AGREEMENT (the "Agreement") is entered into as of
November 21, 1995 between PSICOR, Inc., a Pennsylvania corporation (the
"Company"), and Xxxxxxx X. Xxxxxxx ("Xx. Xxxxxxx").
WHEREAS, Xx. Xxxxxxx founded the Company in 1968, is a controlling
shareholder of the Company and, as of the date hereof, serves as the Chief
Executive Officer, Chairman of the Board and President of the Company; and
WHEREAS, the Company desires to retain the services of Xx. Xxxxxxx as
a consultant to the Company in the event of the termination of his employment by
the Company for any reason other than for cause within two (2) years from the
date hereof; and
WHEREAS, Xx. Xxxxxxx is willing to agree to serve as a consultant to
the Company, on the terms and conditions provided herein, and to receive the
benefits hereof in lieu of any agreement or other arrangement regarding
severance or similar benefits.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties contained herein, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. RETENTION AS A CONSULTANT. During the Consulting Period (as
defined below) (i) the Company shall retain Xx. Xxxxxxx, and Xx. Xxxxxxx shall
serve the Company, as an independent consultant on the terms and conditions set
forth herein and (ii) Xx. Xxxxxxx shall provide such consulting services to the
Company as the Company may reasonably request under the direction of the
Company's Board of Directors consistent with its overall objectives in an amount
not to exceed (x) 40 hours per month for the first three months of the
Consulting Period and (y) 20 hours per month thereafter. Xx. Xxxxxxx may
perform his duties hereunder at such locations as may be agreed upon between Xx.
Xxxxxxx and the Company (provided, that if requested to perform such
duties in any location other than the San Diego, California, area the Company
shall reimburse Xx. Xxxxxxx for his reasonable out-of-pocket expenses incurred
in connection therewith in accordance with Section 3(e) hereof) or by telephone
consultation, written communication and/or by fax as appropriate. As an
independent consultant, Xx. Xxxxxxx shall not be authorized to act for or enter
into any agreement on behalf of the Company without written authorization from
the Company's Board of Directors. The Company acknowledges that Xx. Xxxxxxx has
other business interests and that he intends to travel from the San Diego area
frequently on personal business and that Xx. Xxxxxxx may, as a result, be
unavailable to the Company from time to time.
2. CONSULTING PERIOD. (a) If Xx. Xxxxxxx'x employment is terminated
either (i) by the Company other than for "Cause" (as defined below) or (ii) by
Xx. Xxxxxxx for "Good Reason" (as defined below), in each case during the "Two-
Year Period" (as defined below), Xx. Xxxxxxx shall be retained by the Company as
a consultant and shall provide the services specified herein for a period of
three (3) years from the date of such termination (such date, the "Effective
Date," and such period, the "Consulting Period"). Following the termination of
the Consulting Period, except as otherwise specifically provided herein (i) the
Company's obligations under this Agreement shall cease and the Company shall
have no further obligations to Xx. Xxxxxxx under this Agreement and (ii) Xx.
Xxxxxxx'x obligation to the Company to provide the consulting services
contemplated by Section 1 hereof shall cease. If, during the Two-Year Period,
Xx. Xxxxxxx'x employment is not terminated by the Company other than for cause,
or by Xx. Xxxxxxx for good reason, this Agreement shall expire without further
obligation of either the Company or Xx. Xxxxxxx as of the end of the Two-Year
Period. As used herein, the "Two-Year Period" shall mean the two-year period
beginning on the date hereof, and the parties acknowledge that Xx. Xxxxxxx is
an employee of the Company on the date hereof.
(b) As used herein, "Cause" shall mean:
i) Xx. Xxxxxxx'x willful failure to perform or habitual
neglect of his duties as an employee of the Company or a subsidiary
thereof;
ii) Xx. Xxxxxxx'x commission or conviction of any crime or
criminal offense involving theft, fraud, embezzlement, misappropriation of
assets, malicious mischief, or any felony; or
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iii) Xx. Xxxxxxx'x willful engaging in conduct which is
injurious to the Company or a subsidiary thereof monetarily or otherwise,
including, but not limited to, conduct that constitutes competitive
activity or other activity inconsistent with the terms of Section 4
hereof.
(c) As used herein, "Good Reason" shall mean any diminution in the
nature or status of Xx. Xxxxxxx'x authority, duties and responsibilities or any
diminution in Xx. Xxxxxxx'x base salary, in each case from those in effect as of
the date hereof.
3. COMPENSATION AND RELATED MATTERS. As compensation for the
services to be rendered by Xx. Xxxxxxx and the noncompetition and
confidentiality agreements provided for hereunder, and in lieu of any severance
or termination benefits to which Xx. Xxxxxxx might otherwise be entitled in
connection with the termination of his employment, the Company shall make the
following payments and provide the following benefits to Xx. Xxxxxxx during the
Consulting Period:
(a) CONSULTING FEE. During the Consulting Period the Company
shall pay Xx. Xxxxxxx a consulting fee payable no less frequently than monthly
at the rate of $20,000.00 per month.
(b) HEALTH BENEFITS. During the Consulting Period, Xx. Xxxxxxx
shall be entitled to health care benefits no less favorable on the whole to Xx.
Xxxxxxx than the benefits provided to Xx. Xxxxxxx under the terms of the health
plans maintained by the Company in which he is a participant as of the date
hereof.
(c) TRANSFER OF "KEY MAN" LIFE INSURANCE POLICIES. Within five
(5) business days following the Effective Date, the Company shall transfer to
Xx. Xxxxxxx or his designee any and all rights and interests of the Company
under the "key man" life insurance policies identified on Schedule 3 hereto
(including without limitation the cash values thereof as of the Effective Date),
and Xx. Xxxxxxx and his designee shall assume any and all obligations and
liabilities of the Company thereunder. Xx. Xxxxxxx hereby agrees to pay or
otherwise discharge, or cause to be paid or otherwise discharged, from and after
the Effective Date, any and all obligations or liabilities of the Company under
the policies identified on Schedule 3 hereto when such obligations and
liabilities become due and the Company shall have no further obligation or
liability with respect thereto. Within five (5) business days following the
Effective Date, the
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Company, Xx. Xxxxxxx and any designee of Xx. Xxxxxxx shall enter into an
assignment and assumption agreement, together with the insurers of such
policies, with respect to the matters contemplated by this Section 3(c).
(d) OFFICE; SECRETARIAL SERVICES. During the Consulting Period,
the Company shall provide Xx. Xxxxxxx with an office in the Company's
headquarters and reasonable access to secretarial services.
(e) REIMBURSEMENT OF EXPENSES. The Company shall provide Xx.
Xxxxxxx with reimbursement for reasonable and necessary business expenses to the
extent such expenses are incurred upon the request of the Company and provided
that such expenses are accounted for in accordance with the policies and
procedures established by the Company from time to time for its senior
executives.
4. NON-COMPETITION; NON-DISCLOSURE. Xx. Xxxxxxx recognizes and
expressly acknowledges that (i) he has developed a highly valuable expertise in
the business of cardiovascular perfusion and ancillary services, including
without limitation delivery of perfusion services and sales of supplies in
connection therewith, which expertise is of a special, unique and extraordinary
character (as such perfusion and related business is presently conducted by the
Company and its Subsidiaries, the "Company Business"); (ii) the Company would be
irreparably damaged if Xx. Xxxxxxx were to (x) engage in any activity competing
with the Company Business in violation of the terms of this Agreement, or (y)
disclose in violation of this Agreement, or make unauthorized use of, any
confidential information concerning the Company Business; (iii) he is
voluntarily entering into this Agreement, including without limitation this
Section 4, with the intent that the covenants in this Section 4 shall be valid
and enforceable; and (iv) the terms and conditions of this Agreement and this
Section 4 are fair and reasonable to him in all respects and will not create any
hardship for him.
(a) In light of the foregoing, and for and in consideration of
benefits derived directly and indirectly from this Agreement, Xx. Xxxxxxx
covenants and agrees as follows:
(i) During the Consulting Period, Xx. Xxxxxxx shall not, alone
or as a member, employee or agent of any partnership or as an officer, agent,
employee, consultant, director, shareholder (except for passive investments of
not more than (x) two percent (2%) of the outstanding shares of, or any other
equity interest in, any company or entity (other than one listed or traded on a
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national securities exchange or on an over-the-counter securities market) and
(y) five percent (5%) of the outstanding shares of, or any other equity interest
in, any company or entity listed or traded in a national securities exchange or
over-the-counter securities market) of any corporation or entity, directly or
indirectly manage, operate, join, control or participate in the management,
operation or control of, or work for (as an employee, consultant, independent
contractor or otherwise) or permit the use of his name by, or be connected in
any manner with any business or activity which is in competition with the
Company Business in any town, county, parish or other municipality in any state
of the United States in which the Company Business is presently conducted and in
any town, county, parish or municipality adjacent thereto;
(ii) During the Consulting Period, Xx. Xxxxxxx shall not,
directly or indirectly, solicit, induce, or attempt to solicit or induce (x)
any employee of the Company or its Subsidiaries, affiliates, successors or
assigns to terminate his or her employment relationship with the Company or its
Subsidiaries, affiliates, successors or assigns for the purpose of associating
with any competitor of the Company or its Subsidiaries, affiliates, successors
or assigns; or (y) any customer, client, vendor, supplier or consultant then
under contract to the Company or its Subsidiaries, affiliates, successors or
assigns, to terminate his, her or its relationship with the Company or its
Subsidiaries, affiliates, successors or assigns, for the purpose of associating
with any competitor of the Company or its Subsidiaries, affiliates, successors
or assigns; and
(iii) Unless otherwise required by any applicable law or rules
and regulations of any national securities exchange, Xx. Xxxxxxx shall not
disclose to any person any trade secrets or confidential information with
respect to any of the Company's patents, trademarks, products, improvements,
formulas, designs or styles, processes, customers, methods of distribution or
methods of manufacture; PROVIDED, HOWEVER, that such trade secrets or
confidential information shall not include any information known generally to
the public (other than as a result of unauthorized disclosure by Xx. Xxxxxxx).
(c) Xx. Xxxxxxx recognizes and acknowledges that his expertise
is of a special, unique and extraordinary character and that (i) in the event of
his failure to comply with any of the restrictions contained in this Section 4,
it may be impossible to measure in money the damage to the Company and (ii) in
the event of any such failure, the Company may not have an adequate remedy at
law. It is therefore agreed that the Company, in addition to any other rights
or remedies which it may have, shall be entitled to immediate injunctive
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relief to enforce such restrictions, and specific enforcement of the provisions
of this Section 4 in the event of any breach or threatened breach hereof.
(d) Xx. Xxxxxxx further acknowledges and agrees that these
covenants are reasonable and valid in geographic and temporal scope and in all
other respects and that if any court determines that any of these covenants, or
any part thereof, is invalid or unenforceable, the remainder of these covenants
shall not thereby be affected and shall be given full effect without regard to
the invalid portions. If any court determines that any of these covenants, or
any part thereof, is unenforceable because of the duration or scope of such
provision, such court shall have the power to reduce the duration or scope of
such provision, as the case may be, and, in its reduced form, such provision
shall then be enforceable.
(e) In the event that Xxxxxxx Holdings, Inc. ("Xxxxxxx
Holdings") acquires Psicor Office Laboratories, Inc. ("POL") then,
notwithstanding anything to the contrary in Section 4(a)(i) hereof, Xx. Xxxxxxx
shall not be prohibited from directly or indirectly owning, or participating in
the conduct of the physician office laboratory services business of, POL whether
such business is conducted by Xx. Xxxxxxx through POL or otherwise.
5. SUCCESSORS; BINDING AGREEMENT. The services to be performed by
Xx. Xxxxxxx hereunder are personal in nature, and the obligations to perform
such services and the conditions and covenants of this Agreement cannot be
delegated by Xx. Xxxxxxx. This Agreement will be binding upon, inure to the
benefit of and be enforceable by, the Company and its successors and assigns.
The Company may assign, in its sole discretion, any or all of its rights,
interests and obligations hereunder to any third party PROVIDED that the Company
shall also remain obligated hereunder.
6. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given upon personal delivery, facsimile
transmission (which is confirmed), telex or delivery by an overnight express
courier service (delivery, postage or freight charges prepaid), or on the fourth
day following deposit in the United States mail (if sent by registered or
certified mail, return receipt requested, delivery, postage or freight charges
prepaid),
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addressed to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to Xx. Xxxxxxx, to
Xxxxxxx Holdings, Inc.
00000 Xxxxxxx Xxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Telecopy No. (619) ___________
Attention: Xxxxxxx X. Xxxxxxx
with a copy to:
Xxxxx & XxXxxxxx
000 Xxxx Xxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Telecopy No. (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
If to the Company, to:
PSICOR, Inc.
00000 Xxx xxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Telecopy No. (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
7. WITHHOLDING. All amounts payable and benefits provided hereunder
shall be subject to, and reduced by, any withholding taxes as may be required by
law. In the case of the provision of benefits, the Company may withhold from
any cash payments payable hereunder any withholding taxes imposed on, or arising
from, the benefits provided hereunder.
8. MODIFICATION OF AGREEMENT; GOVERNING LAW. No provisions of this
Agreement may be modified, waived or discharged unless such waiver,
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modification or discharge is agreed to in writing signed by Xx. Xxxxxxx and such
officer of the Company as may be specifically designated by the Board of
Directors of the Company. No waiver by either party hereto at any time of any
term, provision or condition of this Agreement, whether by conduct or otherwise,
in any one or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such term, provision or condition or as a waiver of any
other term, provision or condition of this Agreement. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California without regard to its conflicts of law principles.
9. VALIDITY. The validity or enforceability of any provision or
provisions of this Agreement shall not be affected by the invalidity or
unenforceability of any other provision of this Agreement, and such valid and
enforceable provisions shall remain in full force and effect.
10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same instrument.
11. OBLIGATIONS AND CLAIMS; ENTIRE AGREEMENT. Xx. Xxxxxxx
acknowledges and agrees that (a) all obligations of the Company to him prior to
the date hereof (and, as of the Effective Date, prior to such date) in his
capacity as a director, officer or employee of the Company have been (and, as of
the Effective Date, will be) fully satisfied other than (i) any obligation of
the Company for indemnification of claims (x) pending as of the date hereof as
set forth on Exhibit A hereto and (y) not made as of the date hereof (and Xx.
Xxxxxxx represents and warrants to the Company that as of the date hereof he is
not aware, and as of the Effective Date he will not be aware, of any such claims
pending other than as set forth on Exhibit A hereto on the day hereof or on or
about the Effective Date), (ii) accrued but unpaid salary and benefits and
business expenses reimbursable by the Company in accordance with Company policy
and (iii) for amounts specifically accruing to Xx. Xxxxxxx under the terms of
this Agreement, and (b) he understands that the Company's willingness to enter
into this Agreement and its obligations hereunder are conditioned upon his
foregoing acknowledgement being true and correct as of the date hereof and as of
the Effective Date and his written confirmation thereof being delivered to the
Company within five (5) business days after the Effective Date. This Agreement
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sets forth the entire agreement of the parties hereto with respect to the
subject matter contained herein and supersedes all prior agreements, promises,
covenants, arrangements, communications, representations or warranties, whether
oral or written, by any officer, employee or representative of any party hereto,
and any other prior agreement of the parties hereto in respect of the subject
matter contained herein is hereby terminated and canceled.
12. ATTORNEYS' FEES. In the event of litigation relating to this
Agreement, if a court of competent jurisdiction determines that this Agreement
has been breached by either party, then the breaching party will reimburse the
non-breaching party for its reasonable costs and expenses (including without
limitation legal fees and expenses) incurred in connection with all such
litigation.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
PSICOR, INC.
By /s/ Xxxxx X. Xxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxx
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