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MEDICAL DEVICE ALLIANCE INC.
EXHIBIT 10.10
XXXXXXXXXX
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into at
Las Vegas, Nevada, on the date hereinafter set forth, by and between XXXXX X.
XXXXXXXXXX, M.D. (hereinafter referred to as the "Employee"), and MEDICAL DEVICE
ALLIANCE, INC., a Nevada corporation (hereinafter referred to as the
"Corporation").
The parties hereto, intending to be legally bound, do hereby agree as
follow:
1. EMPLOYMENT
1.1 POSITIONS AND DUTIES
The Corporation does hereby employ the Employee and the
Employee hereby accepts such employment as CHIEF EXECUTIVE OFFICER (CEO) upon
the terms and provisions set forth in this Agreement. The Employee shall perform
all the duties assigned to him by the Board of Directors of the Corporation,
shall observe and comply with the Corporation's rules and regulations regarding
the performance of his duties, and shall carry out and perform all orders,
directions, and policies stated to him by the Board of Directors of the
Corporation periodically, either orally or in writing. The Employee shall at all
times carry out the duties assigned to him in a loyal, trustworthy and
businesslike manner. The Employee agrees that this Agreement may be terminated
as provided in Paragraph 7 hereof.
1.2 PLACE OF EMPLOYMENT
Unless the parties agree otherwise in writing, during the
term of this Agreement, the Employee shall perform the services required by this
Agreement at the location mutually agreed by with the Board of Directors and the
Employee until such time a defined place of employment is determined for the CEO
function, provided, however, that the Corporation may, from time to time,
require the Employee to travel temporarily in carrying out his duties.
2. TERM
This Agreement shall commence as of the Effective Date specified
in Exhibit A hereto and shall continue for a period of five (5) years from the
date of this Agreement, and may be renewed for additional one (1) year periods
by mutual agreement of the parties, unless sooner terminated as provided in
Paragraph 7 hereof.
3. COMPENSATION
3.1 AMOUNT OF COMPENSATION
The Effective Date of this Agreement and the employee
compensation are set forth in Exhibit A hereto. The Corporation may, from time
to time, modify the employment conditions and compensation, subject to the other
terms and conditions of this Agreement. These changes will be recorded in
subsequent exhibits.
3.2 REIMBURSEMENTS
The Employee shall be reimbursed by the Corporation only
for amounts actually expended by the Employee in the course of performing duties
for the Corporation where:
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3.2.1 AUTHORIZATION
The Employee has been authorized by the Corporation
to incur such expenses that are reasonably consistent with practices or policies
of the Corporation.
3.2.2 DOCUMENTATION
The Employee tenders receipts or other
documentation substantiating the amounts as required by the corporation.
3.3 FRINGE BENEFITS
The Employee shall be entitled to receive, on the same
basis as the Corporation's other executive employees, all other benefits
maintained by the Corporation for its executive employees generally, including
but not limited to a cellular phone, leased automobile, country club fees, paid
leave, medical, dental, life and disability insurance and any other health and
welfare benefit plans and perquisites, as in effect from time to time. The
Employee will be granted paid leave consistent with the Corporation's paid leave
policy in effect from time to time.
3.4 WARRANTS AND STOCK OPTIONS
(a) WARRANTS. The Employee will, concurrently with the
signing of this Agreement, receive a Warrant as specified in Exhibit D hereto.
This employment warrant is not a part of the Corporation's Stock Compensation
Plan, and is not transferable and may be exercised only by the Employee, or by
the Employee's estate or personal representative within three (3) months of the
Employee's death. Employment with the Corporation is a condition of exercise of
the Warrant; providing that if Employee's employment with the Corporation is
terminated in a manner which gives Employee the right to Severance Compensation
under Section 8 of this Agreement, Employee shall have the right to exercise the
Warrant at any time during the 90-day period immediately following such
termination.
(b) STOCK OPTIONS. The Employee will receive stock options
to purchase One Hundred Thousand (100,000) shares of the Corporation's Common
Stock under the Corporation's Stock Compensation Plan at an original exercise
price per share of $5.00, vesting as follows: Twenty-Five percent (25%) on each
of the first, second, third and fourth anniversaries of the Effective Date as
defined herein. The Employee may receive additional stock options at later
date(s) as determined from time to time by the Corporation's Board of Directors.
The Stock Compensation Plan is specified in Exhibit E hereto.
(c) LOCK-UP AGREEMENTS. The Employee will execute any
other documents reasonably required by the Corporation in connection with said
Warrants and/or Stock Options, and hereby agrees to execute any lock-up or
similar agreements required by the Corporation's underwriters and executed by
other members of senior management of the Corporation in connection with an
offering or offerings of the Corporation's securities. If the Employee
terminates this Agreement or if the Corporation discontinues the Employment for
any reason other than Termination for Cause (Section 7.1.3) any lock-up
agreement will terminate immediately upon the occurrence of either event.
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3.5 REIMBURSEMENT FOR RELOCATION EXPENSES
The Corporation will reimburse the Employee for Relocation
Expenses under the terms and conditions of Exhibit F hereto.
4. NON-COMPETITION
The Employee agrees that during the term of this Agreement, he
shall diligently devote his time and efforts to the duties and responsibilities
assigned to him by the Corporation. In connection therewith:
4.1 NON-COMPETITION
The Employee agrees that during the term of this
Agreement, without the prior express written authorization of the Corporation's
Board of Directors, he shall not directly or indirectly engage in any
Competition (as defined in Section 4.7 herein) with the Corporation; provided,
however, that nothing contained in this Agreement shall be deemed to preclude
the Employee from continuing to be active with LifeCell Corporation, Ortho Fix
Corporation, and Howmedica-Leibinger to the degree necessary to continue his
previous consulting arrangements; provided, however, that those activities shall
not impair the Employee's agreement to devote his full-time attention to the
Corporation.
4.2 NON-COMPETITION FOLLOWING THE TERM OF THE AGREEMENT
For a period of one (1) year after termination of
employment, the Employee will not, directly or indirectly, without the prior
written consent of the Corporation, engage in any Competition with the
Corporation.
4.3 CIVIL AND CHARITABLE ACTIVITIES
The Employee may engage in civic, educational and
charitable activities. The Employee shall be entitled, with the approval of the
Corporation's Board, to serve as a director of any corporation other than a
corporation which, in the good faith opinion of the Corporation's Board, is in
competition with the Corporation. The Employee shall be entitled to receive
compensation from any corporation with respect to which he serves as a
consultant or as a director in accordance with this Section 4.3. Notwithstanding
anything to the contrary set forth herein, the Employee shall not be entitled to
engage in any of the activities set forth in this Section 4.3 if such
activities, in the good faith opinion of the Corporation's Board, interfere or
could reasonably be expected to interfere with the Employee's performance of his
duties and activities under this Agreement.
4.4 NON-SOLICITATION OF EMPLOYEES
After the termination of the Employee's employment
hereunder, the Employee shall not, either alone or jointly, with or on behalf of
others, either directly or indirectly whether as principal, partner, agent,
shareholder, director, officer, employee, consultant, or otherwise, at any time
during a period of one (1) year following such termination, offer employment to,
or solicit the employment or engagement of, or otherwise entice away from the
employment of the Corporation or any affiliated entity, either for the
Employee's own account or for any other person, firm, or company, any person who
is employed by the Corporation or any such affiliated entity, whether or not
such person would commit any breach
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of his or her contract of employment by reason of leaving the service of the
Corporation or any affiliated entity.
4.5 NON-SOLICITATION OF CUSTOMERS
After the termination of the Employee's employment
hereunder, the Employee shall not, either alone or jointly, with or on behalf of
others, either directly or indirectly whether as principal, partner, agent,
shareholder, director, officer, employee, consultant, or otherwise, at any time
during a period of one (1) year following such termination, engage in any
activity for the purpose of influencing or attempting to influence any of the
Corporation's customers, to conduct business with any business enterprise in
competition with the Corporation.
4.6 FURTHER EMPLOYEE AGREEMENTS
For a period of one (1) year after the termination of the
Employee's employment, the Employee will not undertake any employment or
activity competitive with the Corporation wherein the loyal and complete
fulfillment of the duties of the competitive employment or activity would call
upon the Employee to make judgements on or otherwise to use any confidential
business information concerning the Corporation. The Employee will not, directly
or indirectly, either for himself or for any other person, firm or corporation,
divert or take away (or attempt to divert or take away), any of the
Corporation's present, former or prospective customers, including, but not
limited to, those upon whom he called, met with or became acquainted with while
engaged as an employee of the Corporation. The Employee will not interfere with
the contractual or business relationships of the Corporation, will not solicit
or attempt to solicit any employees or clients of the Corporation, nor slander
or disparage the Corporation, or undertake any activity which adversely impacts
the goodwill of the Corporation and its business opportunities.
4.7 COMPETITION DEFINED
"Competition" shall mean any participation in, assistance
of, employment by, ownership of any interest in, acceptance of business from or
assistance, promotion or organization of any person, partnership, corporation,
firm, association or other business organization, entity or enterprise which,
directly or indirectly, is engaged in, or hereinafter engages in, research on,
or development, production, marketing, leasing or selling of, any product,
process or service which is the same as, similar to, or in competition with, any
line of business or research in which the Corporation, its parent, subsidiary or
affiliated company, is now engaged or hereinafter engages, whether as an agent,
consultant, employee, officer, director, investor, partner, shareholder,
proprietor or in any other individual or representative capacity, but excluding
the holding for investment of less that 5% of the outstanding securities of any
corporation which are regularly traded on a recognized stock exchange.
4.8 SEPARATE COVENANTS
Each of the covenants of this paragraph 4 shall be
construed as a separate covenant covering its subject matter in each of the
separate counties, countries, states in the United States and governmental
subdivisions outside the United States (collectively, the "Governmental
Subdivisions"); to the extent that any covenant shall be judicially
unenforceable in any one or more of said Governmental Subdivisions, said
covenant shall not be affected with
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respect to each other Governmental Subdivision, each covenant with respect to
each Governmental Subdivision being construed as severable and independent.
5. INTELLECTUAL PROPERTY AND CONFIDENTIALITY AGREEMENT
The Employee has executed or will concurrently execute the
Corporation's Intellectual Property and Confidentiality Agreement, the terms of
which are incorporated herein by reference. The terms of this Employment
Agreement shall prevail in the case of any discrepancy between the Corporation's
Intellectual Property and Confidentiality Agreement and this Agreement. The
Corporation's Intellectual Property and Confidentiality Agreement is attached
hereto as Exhibit C.
6. TERMINATION OF AGREEMENT
6.1 GROUNDS
This Agreement shall terminate upon the occurrence of any
of the following events:
(a) EXPIRATION OF TERM
At any time upon expiration of the terms specified
in Paragraph 2 hereof;
(b) THIRTY (30) DAY TERMINATION BY EMPLOYEE
By the Employee (whether for Good Reason or
otherwise), upon thirty (30) days' prior written notice to the Corporation.
(c) TERMINATION BY EMPLOYER (FOR CAUSE)
This Agreement may be immediately terminated by the
Corporation for "Cause". For purposes of Section 6.1, the phrase "for cause"
means: (a) the breach of a material provision of this Agreement by the Employee
which continues uncured for 10 days after receipt by the Employee of written
notice of such breach from the Corporation; (b) the Employee's failure to comply
with or adhere to any written policy of the Corporation or its Affiliates, which
failure continues for 10 days after receipt by the Employee of written notice
from the Corporation which specifically identifies such failure; (c) the
appropriation (or attempted appropriation) of a business opportunity of the
Corporation or its Affiliates, including attempting to secure or securing any
personal profit in connection with any transaction entered into on behalf of the
Corporation or its Affiliates; (d) the misappropriation (or attempted
misappropriation) of any of the funds or property of the corporation or its
Affiliates; (e) the conviction of, the indictment for (or its procedural
equivalent), or the entering of a guilty plea or plea of no contest with respect
to, a felony, the equivalent thereof, or any other crime with respect to which
imprisonment is a possible punishment; or (f) any willful conduct by the
Employee which is demonstrably and materially injurious to the reputation of the
Corporation or its Affiliates. The termination of the Employee's employment
hereunder shall not be deemed "for cause" unless and until there shall have been
delivered to the Employee a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the Board at a
meeting of the Board called and held for that purpose (after reasonable notice
to and an opportunity for the Employee to be heard before the Board), finding
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that in the good faith opinion of the Board, the Employee was guilty of the
conduct set forth in any one or more of clauses (a) through (f) above.
6.2 DISABILITY
(a) TERMINATION
In the event that the Employee is unable to perform
his assigned duties and responsibilities due to illness, physical or mental
disability or any other reason, and such disability continues for a period of
six (6) consecutive months after all available sick leave has been utilized, the
Corporation may terminate this Agreement upon ten (10) days' written notice.
(b) DEATH
Upon the death of the Employee.
6.3 TERMINATION BY EMPLOYEE FOR GOOD REASON
The Employee shall have a Good Reason for terminating his
employment with the Corporation under this Employment Agreement if one or more
of the following occurs:
(a) an involuntary change in the Employee's status or
position with the Corporation which the Corporation deems to represent a
demotion from the Employee's then current status or position;
(b) layoff or involuntary termination of the Employee's
employment, except in connection with the termination of the Employee's
employment for Cause or as a result of the non-renewal of this Agreement or of
the Employee's disability, death or retirement;
(c) a reduction by the Corporation in the Employee's base
salary, excluding bonuses, other than in the case of reductions in salary with
respect to the Corporation's other executive officers generally;
(d) any action or inaction by the Corporation that would
adversely affect the Employee's continued participation in any Benefit Plan on
at least as favorable basis as was the case at the time of such action or
inaction, or that would materially reduce the Employee's benefits in the future
under the Benefit Plan or deprive him of any material benefits that he then
enjoyed, except to the extent that such action or inaction by the Corporation
(i) is also taken or not taken, as the case may be, in respect of all employees
generally, (ii) is required by the terms of any Benefit Plan as in effect
immediately before such action or inaction; or (iii) is necessary to comply with
applicable law or to preserve the qualification of any Benefit Plan under
section 401(a) of the Internal Revenue Code;
(e) the Corporation's failure to obtain express assumption
of this Employment Agreement by any successor to the Corporation; and
(f) any material violation by the Corporation of any
agreement, including this Employment Agreement, between the Corporation and the
Employee.
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(g) following the establishment of a defined location with
respect to the performance of services by the Employee in accordance with
Section 1.2, the relocation of the Corporation's offices to a location more than
60 miles from such defined location;
(h) the failure by the Corporation to pay Employee any
portion of his salary or bonus compensation under this Agreement within seven
(7) days of the date such compensation is due;
(i) any purported termination of the employment of
Employee which is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 6.4 (and if applicable Section 6.1(c)), which
purported termination shall not be effective for purposes of this Agreement.
Notwithstanding the foregoing, no action by the Corporation shall give rise to a
Good Reason if it results from the Employee's termination for Cause, death or
retirement, and no action by the Corporation specified in paragraphs (a) through
(c) of this section shall give rise to a Good Reason if it results from the
Employee's disability.
6.4 NOTICE OF TERMINATION
Any purported termination of the Employee's employment by
the Corporation or by Employee shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 8.1. "Notice of
Termination" shall mean a notice that shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
Employee's employment under the provision so indicated.
7. SEVERANCE COMPENSATION
If the Corporation should terminate the Employee's employment
hereunder during the Term (as defined in Section 2) for reasons other than cause
(as defined in Section 6.1(c)) or Employee's death or disability (as defined in
Section 6.2), or if Employee should resign his employment for Good Reason as
defined in Section 6.3, the Employee shall be entitled to the following
Severance compensation:
(a) Payment of his base salary in effect at the time of
termination from the date of termination until March 31, 2003.
(b) Continuation of all benefits, including without limitation
medical, dental and life insurance, during the Post-Termination Period or until
the date on which the Employee first becomes eligible for insurance coverage of
a similar nature provided by a firm that employs him following termination of
employment by the Corporation, whichever occurs first.
Notwithstanding the foregoing, nothing in this Employment Agreement shall
require the Corporation to make any payment or to provide any benefit to the
Employee that the Corporation has made or otherwise provided under any other
contract, agreement or arrangement, including, without limitation, the Employee
Severance Agreement between the Corporation and the Employee, attached hereto as
Exhibit D, and the Employee Retention Agreement between the
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Corporation and the Employee, attached hereto as Exhibit E, both incorporated by
reference herein.
For purposes of this Section 7, "Benefit Plan" shall mean any compensation plan,
such as an incentive or stock option plan, or any employee benefit plan, such as
a thrift, pension, profit-sharing, stock bonus, long-term performance award,
medical disability, accident or life insurance plan, or any other plan, program
or policy of the Corporation that is intended to benefit employees.
8. MISCELLANEOUS
8.1 NOTICES
Any notice required to be given pursuant to this Agreement
shall be effective only if in writing and delivered personally or by mail. If
given by mail, such notice must be sent by registered or certified mail, postage
prepaid, mailed to the parties at the addresses set forth on the signature page
hereof, or at such other addresses as the parties may designate, from time to
time, by written notice. Mailed notices shall be deemed received two (2)
business days after the date of deposit in the mail.
8.2 REMEDIES
(a) EQUITABLE REMEDIES
The Employee acknowledges and agrees that in the
event of any breach, violation or evasion of the terms, conditions and
provisions of Sections 4, 6 and 7 above, or this Section 8, such breach,
violation or evasion shall result in immediate and irreparable injury and harm
to the Corporation and shall entitle the Corporation to injunctive relief, as
well as to all other legal or equitable remedies to which the Corporation may be
entitled.
(b) TERMINATION OF AGREEMENT
It is further agreed that in the event of such
breach, the Corporation may forthwith terminate this Agreement, notwithstanding
anything herein to the contrary.
8.3 PARTIAL INVALIDITY
If any term or provision of this Agreement or the
application thereof to any person or circumstance shall be held to be invalid or
unenforceable to any extent, the remainder of this Agreement or application of
such term or provision to persons or circumstances other than those to which it
is held invalid or unenforceable shall not be affected thereby, and each term
and provision of the Agreement shall be valid and be enforced to the fullest
extent permitted by law.
8.4 WAIVER
No waiver of any right hereunder shall be effective for
any purpose unless in writing, signed by the party hereto possessing said right,
nor shall any waiver be construed to be a waiver of any subsequent right, term
or provision of this Agreement.
8.5 ASSIGNMENT; EFFECT ON AGREEMENT
It is hereby acknowledged and agreed that the Employee's
rights and obligations under this Agreement are personal in nature and shall not
be assigned or delegated.
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This agreement shall be binding on and inure to the benefit of the heirs,
personal representatives, successors and assigns of the parties, subject,
however, to the restrictions on assignment and delegation contained herein.
8.6 DISPUTES AND ARBITRATION
Any dispute arising in connection with the interpretation
or enforcement of the provisions of this Agreement, or its application or
validity, will be submitted to arbitration. Such arbitration proceedings will be
held at the location which is established as the place of employment for the CEO
function in accordance with Section 1.2, or if such location has not been
established, Las Vegas, Nevada, in accordance with the rules then existing of
the American Arbitration Association. This agreement to arbitrate is
specifically enforceable.
Any award rendered in any such arbitration proceeding will
be made in writing and will be final and binding on each of the parties, and
judgment may be entered thereon in any court of competent jurisdiction. The
costs and fees of any such arbitration proceeding will be borne by the
respective parties. The arbitrators may in their discretion award costs and
reasonable attorneys' fees to the prevailing party.
8.7 GOVERNING LAW
This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada.
8.8 ENTIRE AGREEMENT
This Agreement contains the entire agreement and
understanding between the parties and supersedes all prior agreements and
understandings, oral or written. No modification, termination or attempted
waiver shall be valid, unless in writing and signed by both parties.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 19th day of March, 1998.
"CORPORATION"
MEDICAL DEVICE ALLIANCE, INC.
By: /s/ Xxxxxx X. XxXxxx
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Xxxxxx X. XxXxxx
Title: Chairman of the Board
ADDRESS:
0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxx 00000
"EMPLOYEE"
/s/ Xxxxx X. Xxxxxxxxxx, M.D.
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Xxxxx X. Xxxxxxxxxx, M.D.
ADDRESS:
00 Xxxxxx'x Xxxx Xxxx
Xxxxxx, Xxx Xxxx, 00000
SOCIAL SECURITY NUMBER: ###-##-####
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