Exhibit 10.8
MEDEX, INC.
SEVERANCE AND NON-COMPETE AGREEMENT
This SEVERANCE AND NON-COMPETE AGREEMENT (this "AGREEMENT") is made as of
May 21, 2003, by and between Medex, Inc., an Ohio corporation (the "COMPANY"),
and Xx. Xxxxx Xxxxxxxxx (the "EXECUTIVE").
RECITALS
WHEREAS, the Company desires to continue the employment of the Executive
with Medex Medical Holding GmbH ("GmbH"), and the Executive desires to remain
employed by GmbH, in accordance with terms and conditions set forth herein;
WHEREAS, during the course of such employment, the Executive will
participate in the development of, and will be privy to, proprietary and
confidential information of MedVest Holdings Corporation ("MEDVEST"), the
Company and its Subsidiaries (collectively, the "MEDVEST ENTITIES" and,
individually, an "MEDVEST ENTITY"), including without limitation, trade secrets,
customer lists, strategic business plans, pricing and billing practices,
relationships with vendors and know-how involved in the operation of the
Company's and its Subsidiaries' businesses (collectively, the "CONFIDENTIAL
INFORMATION");
WHEREAS, to obtain the services of the Executive and to protect the
Confidential Information and goodwill of the MedVest Entities, the parties
desire to execute and deliver this Agreement; and
WHEREAS, the Executive will derive substantial benefits from this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. EMPLOYMENT AND DUTIES.
(a) The Company will cause GmbH to employ the Executive as the
Senior Vice President of European Operations and the Executive hereby accepts
and agrees to serve GmbH in the capacities described in SECTION 1(b), and in
such other capacities to which the Executive may be appointed consistent with
SECTION 3, in accordance with the terms and conditions hereinafter set forth.
(b) The Executive shall initially have the duties,
responsibilities and authority customary to an employee serving as the Senior
Vice President of European Operations. The Executive shall report to and take
direction from the Chief Executive Officer of the Company.
(c) Excluding reasonable vacations compatible with the Executive's
position and periods of illness, injury or other disability, the Executive shall
give his best efforts and devote substantially all of his business time and
attention to the business and interests of the
MedVest Entities. The Executive shall devote his business time, abilities and
attention to these activities and shall perform his duties in a professional,
ethical and businesslike manner.
(d) For purposes of the Agreement, (i) "SUBSIDIARIES" shall mean,
with respect to any Person, any corporation or other entity of which the equity
securities or other ownership interests having the voting power to elect a
majority of the board of directors or other governing body are, at the time of
determination, owned by such Person, directly or through one or more
Subsidiaries and (ii) "PERSON" shall mean a natural person, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization or other entity, or a
governmental entity or any department, agency or political subdivision thereof.
2. TERM OF EMPLOYMENT. The term of the Executive's employment shall be
at will and nothing in this Agreement shall provide Executive with any
contractual right to continued employment.
3. COMPENSATION AND BENEFITS. Initially, the Company shall pay or cause
GmbH to pay to the Executive, and the Executive shall accept from the Company or
GmbH, as full compensation for the Executive's services, compensation as
follows:
(a) BASE SALARY. The Executive shall be paid a base annual salary
equal to Euro 225,000.00 which shall be paid in accordance with the payroll
practices of the Company or GmbH as in effect from time to time (the "BASE
SALARY").
(b) ANNUAL BONUS. The Executive shall be entitled to receive an
annual year-end performance bonus determined in accordance with the procedures
and terms of the Company's or GmbH's performance bonus system in place
immediately prior to the date hereof (the "PERFORMANCE BONUS"). The Performance
Bonus shall be paid in accordance with the standard practices of the Company or
GmbH regarding such payments as in effect from time to time.
(c) OTHER BENEFITS. The Executive shall be entitled to the regular
benefits and perquisites in place for executives of the Company or GmbH
immediately prior to the date hereof, except to the extent that a benefit may be
reduced in the future for all applicable executives of the Company or GmbH with
the prior approval of the Chief Executive Officer.
(d) REIMBURSEMENT OF BUSINESS EXPENSES. The Company shall
reimburse the Executive for all reasonable expenses necessarily incurred by him
in connection with the performance of the Executive's duties hereunder upon
presentation of a voucher indicating the amount and business purpose and
supported by appropriate documentation, subject, however, to the Company's or
GmbH's written employee reimbursement policies and procedures relating to
business related expenses, if any, as in effect from time to time.
4. NON-COMPETE, NON-SOLICITATION.
(b) NON-COMPETE. The Executive covenants and agrees that for such
period as he shall be employed by any MedVest Entity and, in the event this
Agreement is terminated (other than by Executive pursuant to SECTION 5(g) due to
a breach of this Agreement by the
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Company or GmbH), whether voluntarily or involuntarily, for a period of
twenty-four (24) months after such termination (the "NONCOMPETE PERIOD"), the
Executive will not, without the prior written consent of the Company's Board of
Directors, either directly or indirectly through another Person, whether as
principal or as agent, officer, director, employee, consultant, stockholder,
investor (other than as a passive owner of not more than five percent (5%) of
any class of securities traded on a national or regional stock exchange) or
otherwise, alone or in association with any other Person, carry on, manage,
control, consult with, render services for, or be engaged, concerned or take
part in, or render like services to, or own any interest or share in earnings of
any Person competing with the businesses of the MedVest Entities, as such
businesses exist or are in process on the date of such termination, within any
geographical area in which the MedVest Entities engage at the time of
termination in such businesses.
(c) NON-SOLICITATION. During the Noncompete Period, the Executive
shall not directly or indirectly through another Person (i) induce or attempt to
induce any employee of any MedVest Entity to leave the employ of such MedVest
Entity, or in any way interfere with the relationship between any MedVest Entity
and any employee thereof, (ii) hire any person who is an employee of any MedVest
Entity at the time of termination, or (iii) induce or attempt to induce any
customer, supplier, licensee, licensor, franchisee or other business relation of
any MedVest Entity to cease doing business with any such MedVest Entity, or in
any way interfere with the relationship between any such customer, supplier,
licensee or business relation and any MedVest Entity (including, without
limitation, making any statement which is intended or reasonably calculated to
disparage or discredit any MedVest Entity).
(d) ENFORCEMENT. If, at the time of enforcement of this SECTION 4,
a court shall hold that the duration, scope or area restrictions stated herein
are unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law. The Executive acknowledges that the
restrictions contained in this SECTION 4 are reasonable and that he has reviewed
the provisions of this Agreement with his legal counsel.
(e) REMEDIES AND EQUITABLE RELIEF. In the event of the breach or a
threatened breach by the Executive of any of the provisions of this SECTION 4,
the Company, in addition and supplementary to other rights and remedies existing
in its favor, shall be entitled to specific performance and/or injunctive or
other equitable relief from a court of competent jurisdiction in order to
enforce or prevent any violations of the provisions hereof (without posting a
bond or other security). In addition, in the event of a breach or violation by
the Executive of this SECTION 4, the Noncompete Period shall be tolled until
such breach or violation has been duly cured.
5. TERMINATION. Employment of the Executive may terminate for any of
the following reasons.
(a) MUTUAL AGREEMENT. By the mutual, written agreement of the
Company or GmbH and the Executive.
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(b) DEATH OR DISABILITY. Automatically upon the death or
disability of the Executive. The Executive will be deemed to be "disabled" if
the Board determines in good faith that the Executive is unable to substantially
perform with reasonable accommodation the duties hereunder by reason of
disability or incapacity due to physical or mental illness, for a period in
excess of one hundred eighty (180) consecutive days in any twelve (12) month
period or one hundred eighty (180) days in the aggregate in any twenty-four (24)
month period. The Executive's employment may be terminated by the Company or
GmbH pursuant to this paragraph only if the Executive does not return to work
within and for a continuous period of at least thirty (30) days after a notice
of termination has been provided to the Executive by the Company or GmbH.
(c) CAUSE. By the Company or GmbH at any time for "cause". For
purposes of this Agreement, "CAUSE" shall mean the occurrence of one or more of
the following events in each case as determined by a two-thirds vote of the
disinterested members of the Board in good faith:
(i) the commission of a felony or the commission of any act
or omission involving dishonesty, disloyalty or fraud with respect
to and damaging any of the MedVest Entities;
(ii) chronic drug or alcohol abuse or other repeated conduct
causing any of the MedVest Entities substantial public disgrace or
disrepute or economic harm; or
(iii) the continued failure by the Executive substantially to
perform his duties hereunder (other than as a result of total or
partial disability or incapacity due to physical or mental illness)
after a written demand for substantial performance is delivered to
the Executive by the Company or GmbH, which demand identifies the
manner in which the Company or GmbH, believes that the Executive has
not substantially performed his duties.
(d) BY EXECUTIVE. By the Executive upon thirty (30) days' written
notice to the Company and GmbH.
(e) RETIREMENT. Automatically upon the Executive's retirement.
(f) WITHOUT CAUSE. By the Company or GmbH at any time without
cause.
(g) FOR GOOD REASON. By the Executive for Good Reason. For
purposes of this Agreement, "GOOD REASON" shall mean (A) a material adverse
change in connection with the Executive's title or job duties or responsibility;
(B) a material breach by the Company or GmbH of any material obligation under
this Agreement that is not curable or that is not cured within thirty (30) days
after written notice thereof by the Executive to the Company or GmbH; (C)
relocation from the present metropolitan area of employment, without the
Executive's consent, of the Executive; or (D) the termination of employment by
the Executive at any time during the forty-five (45) day period after the first
anniversary of the consummation of a transaction or a series of related
transactions involving (a) the sale of eighty percent (80%) or more of the
assets (based on their fair market value) of the Company, (b) any sale to a
person not affiliated with a
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then current stockholder of voting stock representing more than fifty percent
(50%) of the votes eligible to be cast by stockholders of the Company in the
election of members of the Board of Directors or (c) any consolidation, merger
or recapitalization of the Company with the same effect as clause (b) or (c).
6. COMPENSATION UPON TERMINATION.
(a) TERMINATION BY MUTUAL AGREEMENT. In the event that the
Agreement is terminated by the parties pursuant to a written agreement in
accordance with SECTION 5(a), the Executive shall be entitled to receive the
compensation specified in any written agreement between the parties regarding
the termination of Executive's employment.
(b) TERMINATION BY EXPIRATION OF AGREEMENT; ON ACCOUNT OF DEATH;
DISABILITY; FOR CAUSE; OR BY THE EXECUTIVE. In the event the Agreement is
terminated pursuant to SECTIONS 5(b), 5(c), 5(d) or 5(e) the Executive shall not
be entitled to any compensation for any period after termination except for the
continuation of medical coverage as required by law; PROVIDED, HOWEVER, that the
Executive shall be entitled to any Base Salary and any other vested compensation
earned or accrued but not paid to the Executive prior to the termination of this
Agreement; PROVIDED, FURTHER, that in the event the Agreement is terminated
pursuant to SECTION 5(b), the Executive also shall be entitled to the
Executive's Performance Bonus pro-rated for the then current year.
(c) TERMINATION BY THE COMPANY OR GmbH WITHOUT CAUSE OR BY THE
EXECUTIVE FOR GOOD REASON. In the event the Executive's employment is terminated
pursuant to SECTION 5(f) OR 5(g), the Executive shall be entitled to (i) two
times base annual compensation then in effect, (ii) a pro rata portion of
Executive's Performance Bonus for the then current year, calculated at one
hundred (100%) per cent of target, for the period prior to termination, (iii)
two times the Executive's target bonus for the then current year, calculated at
one hundred (100%) per cent of target, and (iv) the continuation of medical
insurance coverage for the Executive and his family, at the Company's expense,
for two (2) years (or, if not permitted, an amount equal to the amount necessary
for the Executive to secure such coverage in the market generally). The payments
required under this SECTION 3(c) shall be payable in twenty-four (24) equal
monthly installments commencing on the last day of the month in which the
Executive shall execute and deliver a release of claims against the Company and
GmbH containing standard employment release terms reasonably acceptable to the
Company and GmbH and Executive and shall continue until the earlier of (A) full
payment and (B) a material breach by Executive of any covenant contained in this
Agreement. The obligation of Executive to provide a release under this Section
shall be conditioned upon the willingness of the Company and GmbH to provide
Executive with a release containing standard employment release terms reasonably
acceptable to Executive.
7. RETENTION BONUS AND NON-COMPETE FEE. The Company shall make, or
cause GmbH to make, an aggregate cash payment to the Executive of $1,486,250.00.
The foregoing cash payment shall be made as follows (i) in consideration for
remaining in the employment of GmbH and entering into this Agreement,
$831,937.50 on the date hereof, $342,562.50 payable on January 1, 2004 and
$163,125.00 payable on January 1, 2005, and (ii) in consideration of the
covenants of the Executive set forth in SECTION 4 above, the Company shall pay,
or cause GmbH
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to pay, $92,437.50 on the date hereof, $38,062.50 payable on January 1, 2004 and
$18,125.00 payable on January 1, 2005.
8. CONFIDENTIAL INFORMATION. The Executive acknowledges that all
Confidential Information is the property of the MedVest Entities. Therefore, the
Executive agrees that he shall not disclose to any unauthorized Person or use
for his own purposes any Confidential Information without the prior written
consent of the Board, unless and to the extent that the Confidential Information
becomes generally known to and available for use by the public other than as a
result of the Executive's acts or omissions or as requested or required by law
or court order (provided that the Executive shall notify the Company promptly of
such request or requirement so that the Company may seek an appropriate
protective order). The Executive shall deliver to the Company at the termination
of his employment hereunder, or at any other time the Company may request, all
memoranda, notes, plans, records, reports, computer tapes, printouts and
software and other documents and data (and copies thereof) embodying or relating
to the Confidential Information, Work Product (as defined below) or the business
of the MedVest Entities which he may then possess or have under his control.
9. INVENTIONS AND PATENTS. The Executive acknowledges that all
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable) which relate to the MedVest Entities' actual business, research and
development or existing or future products or services and which are conceived,
developed or made by the Executive while employed by the Company or GmbH ("WORK
PRODUCT") belong to the MedVest Entities. The Executive shall promptly disclose
such Work Product to the Board and, at the Company's expense, perform all
actions reasonably requested by the Board (whether during or after the Term) to
establish and confirm such ownership (including, without limitation,
assignments, consents, powers of attorney and other instruments).
10. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
and be binding upon the parties hereto and their respective legal
representatives, heirs, or successors and permitted assigns; PROVIDED, HOWEVER,
that the Executive may not sell, assign, pledge, hypothecate, or otherwise
transfer this Agreement or any part hereof without the prior written consent of
the Company. The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or the assets of the Company to assume expressly and to agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
11. INDEMNIFICATION. To the fullest extent permitted by law, the Company
agrees to, and shall provide in its code of regulations all necessary provisions
so as to cause the Company to, indemnify and hold the Executive harmless against
and from any and all loss, cost, liability or expense that may be imposed upon
or reasonably incurred by him in connection with or resulting from any claim,
action, suit or proceeding to which he may be a party or in which he may be
involved by reason of any action taken or failure to act in his capacity as an
officer of the Company during this Agreement. The Company further agrees, at all
times while the Executive remains employed by the Company, to provide reasonable
and adequate coverage for the benefit of the Executive under the Company's D&O
policy provided coverage under such D&O
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insurance is commercially available and can be obtained at reasonable cost. The
foregoing right of indemnification shall not be exclusive of any other right to
which the Executive may be entitled to as a matter of law or otherwise, or any
power that the Company may have to indemnify him or hold him harmless, but shall
be subject to any applicable restrictions imposed by the code of regulations of
the Company from time to time and any applicable law and shall not apply in
respect of any loss, cost, liability or expense that is found, in a final
judgment by a court of competent jurisdiction from which no appeal can be or has
been taken, to have resulted principally from the Executive's bad faith, gross
negligence or willful misconduct.
12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED UNDER THE LAWS OF THE STATE OF OHIO WITHOUT REGARD TO ITS
CONFLICT OF LAWS PROVISIONS.
13. INTERPRETATION. This Agreement is the result of negotiations between
the parties and accordingly, shall not be construed for or against either party
regardless of which party drafted this Agreement or any portion thereof.
14. NOTICES. All notices required or permitted to be given pursuant to
this Agreement shall be in writing and shall be deemed to have been delivered
upon the earlier of personal delivery, or upon first attempted delivery by the
United Postal Service or the overnight carrier if sent by certified mail, return
receipt requested, postage prepaid or by recognized overnight carrier addressed:
(i) in the case of the Company or GmbH, to the Company at its principal office
and (ii) in the case of the Executive, at the last known residence as shown on
the Company's records.
15. WAIVER. A delay or failure by either party to require strict
performance by the other party of any undertakings or agreements contained in
this Agreement will not waive, affect or diminish any right of such party
thereafter to demand strict compliance and performance therewith. Any waiver by
either party of any default by the other party under this Agreement will not
waive or affect any other such default, whether such default is prior or
subsequent thereto and whether of the same or a different type.
16. SEVERABILITY. In the event that any provision of this Agreement
shall be held by a court of competent jurisdiction to be invalid, illegal or
unenforceable, it shall not affect any other provision hereof, and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein, unless to do so would cause this
Agreement to fail of its essential purpose.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding and agreement between the Company and the Executive with respect
to the terms and conditions of the Executive's employment by GmbH during the
Term and supersedes all previous agreements and arrangements (if any), oral or
written, relating to the employment of the Executive by the Company, GmbH or any
other MedVest Entity (which shall be deemed to have been terminated by mutual
consent). There are no other agreements, conditions, or representations, oral or
written, express or implied with regard thereto.
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18. AMENDMENT OF AGREEMENT. This Agreement may be modified, amended or
rescinded only by means of a writing duly executed by the Company and the
Executive.
19. SURVIVORSHIP. The respective rights and obligations of the parties
hereunder will survive any termination of this Agreement to the extent necessary
to the intended preservation of such rights and obligations.
20. COUNTERPARTS. This Agreement may be executed simultaneously in
counterparts, each of which shall be deemed an original but which taken together
shall constitute a single agreement between the parties.
21. HEADINGS. The Section headings herein are inserted for convenience
of reference only, do not constitute a part of this Agreement, and shall not be
deemed to limit or affect the meaning or interpretation of any of the provisions
herein.
22. SUCCESSOR-IN-INTEREST. The Executive may designate a Successor (or
Successors) in Interest to receive any and all amounts due the Executive in
accordance with this Agreement should the Executive be deceased at any time of
payment. Such designation of Successor(s) in Interest shall be made in writing
and signed by the Executive. Any such designation may be made to any legal
person, persons, trust or the Executive's estate as he shall determine in his
sole discretion. In the event any designation shall be incomplete, or in the
event the Executive shall fail to designate a Successor-in-Interest, his estate
shall be deemed to be his Successor-in-Interest to receive such portion or all
of the payments due hereunder. The Executive may amend, change or revoke any
such designation at any time and from time to time, in the same manner.
[signature page follows]
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IN WITNESS WHEREOF, the parties have duly executed this Severance and
Non-Compete Agreement as of the date first above written.
MEDEX, INC.
By: /s/ Xxxxxxxx X. Arena
--------------------------------
Name: Xxxxxxxx X. Arena
Title: President and CEO
/s/ Xxxxx Xxxxxxxxx
---------------------------------
Xx. Xxxxx Xxxxxxxxx
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