Exhibit 10.58
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") dated as of July 19, 2001,
between Bio-Plexus, Inc., a Delaware corporation having its principal offices at
000 Xxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxx 00000 (the "Company"), and Xxxxxxxxxxx
X. Xxxx ("Employee").
PREAMBLE
WHEREAS, the Company desires to employ Employee as Executive Vice
President of Sales; and
WHEREAS, the Company and Employee desire to set forth in writing the
terms and conditions of such employment.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the sufficiency and
receipt whereof is hereby acknowledged, the parties agree as follows:
1. Definitions. Unless otherwise defined herein, the following terms shall
have the following respective meanings:
"Benefit" means those benefits set forth in Section 3.4(a), (b), (c) and
(d) hereof.
"Cause" means (i) any felony conviction or admission of guilt, (ii) any
breach or nonobservance by Employee of any material covenant set forth herein,
(iii) any willful, intentional or deliberate disobedience or neglect by Employee
of the lawful and reasonable orders or directions of the Board of Directors of
the Company; provided that the Board of Directors of the Company has given
Employee written notice of such disobedience or neglect and Employee has failed
to cure such disobedience or neglect within a period reasonable under the
circumstances, or (iv) any willful or deliberate misconduct by employee that is
materially injurious to the Company.
"Change in Control" means (i) any consolidation or merger involving the
Company if the shareholders of the Company immediately before such merger or
consolidation do not own, directly or indirectly, immediately following such
merger or consolidation, more than fifty percent (50%) of the combined voting
power of the outstanding voting securities of the corporation resulting from
such merger or consolidation in substantially the same proportion as their
ownership of the shares of Common Stock immediately before such merger or
consolidation; (ii) any sale, lease, license, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the business and/or assets of the Company or assets
representing over 50% of the operating revenue of the Company; or (iii) any
person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
who is not on the Commencement Date, a "controlling person" (as defined in Rule
405 under the Securities Act of 1933, as amended) (a "Controlling Person") of
the Company who becomes (x) the beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act) of over 50% of the combined voting power of the
Company's then outstanding voting securities entitled to vote generally or (y) a
Controlling Person of the Company. Notwithstanding the foregoing, the Company
and Employee acknowledge and agree that a "Change in Control" shall not include
any transaction between the Company and Appaloosa Management L.P. and its
affiliates and related funds.
"Common Stock" means the common stock of the Company, without par value.
"Diminution in Responsibility" means a material diminution in Employee's
duties or responsibilities or the assignment to Employee of duties which are
materially inconsistent with his duties as Executive Vice President, Sales and
are not comparable in responsibility or which materially impair Employee's
ability to function in his position; provided, however, that no Diminution in
Responsibility shall be deemed to have occurred solely as a result of the
consummation by the Company of a strategic corporate alliance, partnership or
joint venture (in whatever form) pursuant to which any substantial portion of
the Company's marketing and sales activities, or research and development
activities, or manufacturing activities come under the control of another
company (and its affiliates) or any entity unaffiliated with the Company on the
Commencement Date.
"Long-Term Incentive Plan" means the Company's 2001 Long-Term Incentive
Plan, as amended.
"Long Term Disability" means Employee's inability to substantially perform his
duties and responsibilities hereunder by reason of any physical or mental
incapacity for a period of 180 consecutive days, or two or more periods of 90
consecutive days each in any 360-day period.
2. Employment.
Subject to the terms and conditions of this Agreement, Employee is
hereby employed by the Company to serve as its Executive Vice President of
Sales. Employee accepts such employment, and agrees to discharge all of the
duties normally associated with said positions, to faithfully and to the best of
his abilities perform such other services consistent with his position as a
senior executive officer as may from time to time be assigned to him by the
Board of Directors of the Company, and to devote all of his business time, skill
and attention to such services.
3. Compensation and Benefits.
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3.1 Base Salary. During the term of Employee's employment hereunder, the
Company shall pay Employee a salary at the annual rate of $150,000 or such
greater amount as the Company's Board of Directors may from time to time
establish pursuant to the terms hereof (the "Base Salary"). Such Base Salary
shall be reviewed annually and may be increased, but not decreased, by the Board
of Directors in its sole discretion. The Base Salary shall be payable in
accordance with the Company's customary payroll practices for its senior
management personnel.
3.2 Bonus. For each fiscal year or "Bonus Period" established by the
Board of Directors during the Employment Term (as hereinafter defined), Employee
shall be eligible to participate in the Company's management bonus plan in an
amount up to 100% of salary. Such plan will be established annually by the Board
based on the Company's earnings before interest, taxes, and depreciation (EBITD)
and other Performance Targets established for both the Company and Employee.
With the exception of certain possible bonus payments to Employee based on
attainment of specific sales objectives to be set by the Company for calendar
year 2001 and for the avoidance of doubt, no bonus shall be paid in the event
that the Company's EBITD during the Bonus Period fails to meet or exceed the
total of all amounts to be paid under the Bonus Plan for that period. In the
event of shortfall, the Employee's bonus shall be reduced proportionately with
that of the other participants in the management bonus plan.
3.3 Stock Options.
(a) As soon as practical following the occurrence of the Effective
Date, the Company will issue to Employee Restricted Shares and Incentive Stock
Options (the "Initial Options") for a total of 100,000 shares in combination
such that Restricted Shares account for no less than 25% of the total award. The
Initial Options and Restricted Shares will vest in accordance with the following
schedule and shall contain such other terms and conditions as are reasonable and
customary:
Number of Years That Have Number of Options
Expired Since the Effective Date Available for Exercise
-------------------------------- ----------------------
1 33 1/3%
2 33 1/3%
3 33 1/3%
The exercise price for the Initial Options shall be $2.283.
In the event that Employee determines that adverse tax consequences would result
from the award of Restricted Shares, Employee may elect to receive Additional
Options in lieu
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of Restricted Shares. The exercise price for the Additional Options will be
mutually agreed to by the Company and Employee. Such Additional Options will
vest in accordance with the schedule for the Initial Options.
(b) In addition to (i) the Initial Options and (ii) any Bonus to
which Employee may be entitled pursuant to Section 3.2, the Employee will be
eligible for an award of up to twenty-five thousand (25,000) Incentive Stock
Options (the "Performance Options"). Any such award will be made at the
discretion of the Board of Directors in good faith based on certain individual
performance objectives to be agreed upon. The exercise price on the Performance
Options will be $2.283. The Performance Options will vest in accordance with the
schedule for the Initial Options
(c) Notwithstanding anything to the contrary, the stock option
agreements pursuant to which the Initial Options and the Performance Options, if
any, are issued shall provide, among other things, that upon Employee's death
any of such options which are exercisable by Employee at the time of his death
may be exercised by Employee's estate or successor for a one (1) year period
following Employee's death.
(d) Upon change in control, the Initial Options previously granted
shall immediately become fully vested, regardless of transaction value, and any
Performance Options previously granted shall become fully vested and exercisable
at the discretion of the Board of Directors.
3.4 Benefits.
(a) Benefit Plans. During the Employment Term, Employee may
participate, on the same basis and subject to the same qualifications as other
personnel of the Company, in any benefit plans and policies of the Company in
effect or that will be developed over time.
(b) Reimbursement of Expenses. During the Employment Term, Company
shall pay or promptly reimburse Employee, upon submission of proper invoices in
accordance with the Company's normal procedures, for all reasonable
out-of-pocket business, entertainment and travel expenses incurred by Employee
in the performance of his duties hereunder.
(c) Vacation. During the Employment Term, Employee shall be entitled
to three weeks of vacation per year.
(d) Withholding. The Company shall be entitled to withhold from
amounts payable or benefits accorded to Employee under this Agreement all
federal, state and local income, employment and other taxes, as and in such
amounts as may be required by applicable law.
4. Employment Term.
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The term of this Agreement (the "Employment Term") shall commence upon
the Effective Date and shall end on the close of business eighteen (18) months
after the Effective Date. The Employment Term will automatically renew for
successive period of 12-month increments unless written decision to terminate is
received by employee four (4) months prior to the end of the term.
5. Termination; Severance Benefits.
5.1 Generally. Either the Board of Directors of the Company or Employee
may terminate Employee's employment hereunder, for any reason, at any time, upon
sixty (60) days prior written notice to the other party. If termination is by
the Company for Cause in accordance with clause (i), (ii) or (iv) of the
definition of Cause in Section 1 hereof, then no notice shall be required. If
termination is by the Company for Cause in accordance with clause (iii) of the
definition of Cause in Section 1 hereof, then such notice shall be given as
provided in such clause. Upon termination of Employee's employment hereunder for
any reason, Employee shall be deemed simultaneously to have resigned from any
other position or office he may at the time hold with the Company or any of its
affiliates.
5.2 Termination by Employee. (a) No Reason. If prior to the expiration
of the Employment Term, Employee voluntarily resigns from his employment other
than for Cause, Employee shall (i) be entitled only to that portion of Base
Salary accrued through the date of termination of employment hereunder (the
"Accrued Salary"), (ii) receive no further Base Salary or Bonus hereunder and
(iii) cease to be covered under or be permitted to participate in or receive any
of the Benefits. In addition, except as otherwise provided for herein or in the
Long Term Incentive Plan or in the agreement pursuant to which such options are
granted, the Initial Options and, if applicable, the Performance Options, shall
automatically cease to vest and the exerciseability of any of such options which
have vested prior to the termination of Employee's employment shall be governed
by the agreement(s) pursuant to which such options are granted.
(b) Diminution in Responsibility. If, prior to the expiration of the
Employment Term, Employee terminates his employment hereunder due to a
Diminution in Responsibility, Employee shall be entitled to (i) the Accrued
Salary, (ii) salary continuation for six (6) months at Employee's Base Salary as
in effect as of the termination date and (iii) benefits provided by the Company
for which the Employee is enrolled as of the termination date. In addition, a
pro-rata portion (based on the number of days which have elapsed in the
Employment Term) of all of the Initial Grant and Performance Options previously
granted shall immediately become fully vested.
5.3 Termination by the Company
(a) Without Cause. If, prior to the expiration of the Employment
Term, the Company terminates Employee's employment hereunder without Cause,
Employee shall be entitled to (i) the Accrued Salary, (ii) salary continuation
for six (6)
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months at Employee's Base Salary as in effect as of the termination date and
(iii) benefits provided by the Company for which the Employee is enrolled as of
the termination date. In addition, a pro-rata portion (based on the number of
days which have elapsed in the Employment Term) of all of the Initial Options
and any Performance Options previously granted shall immediately become fully
vested. Notwithstanding the foregoing, if Employee's employment is terminated
pursuant to this section during the first six months of the Employment Term and
subsequent to such termination Employee secures new employment in a Competitive
Business (as hereinafter defined), Employee shall so notify the Company and the
Company's obligation to make salary continuation payments to Employee as
provided in this Section 5.2(a)(ii) shall cease as of the date of receipt of
such notice and the Restrictive Covenants (as hereinafter defined) provided for
in Section 7 shall automatically be of no further force or effect with respect
to Employee. The provisions of the foregoing sentence shall have no effect on
any other rights or obligations of the Company or Employee provided for herein.
(b) For Cause. If, prior to the expiration of the Employment Term,
the Company terminates Employee's employment hereunder for Cause, Employee shall
(i) receive no further Base Salary or Bonus hereunder and (ii) cease to be
covered under or be permitted to participate in or receive any of the Benefits.
In addition, except as otherwise provided for herein or in the Long Term
Incentive Plan or in the agreement pursuant to which such options are granted,
the Initial Options and, if applicable, the Performance Options, shall
automatically cease to vest and the exerciseability of any of such options which
have vested prior to the termination of Employee's employment shall be governed
by the agreement(s) pursuant to which such options are granted. Notwithstanding
the foregoing, if Employee is terminated for Cause hereunder solely as a result
of being convicted of a felony, which conviction is ultimately reversed on
appeal or pardoned, Employee shall be deemed to have been terminated without
Cause as of the date of such termination for Cause. In such case, Employee shall
be entitled to the payments to which he would otherwise be entitled under
Section 5.3(a).
(c) Upon Long Term Disability. If, prior to the expiration of the
Employment Term, the Company terminates Employee's employment hereunder upon
Employee's Long Term Disability, Employee shall be entitled to (i) the Accrued
Salary and (ii) salary continuation for six (6) months at Employee's Base Salary
as in effect as of the termination date. In addition, a pro-rata portion (based
on the number of days which have elapsed in the Employment Term) of all of the
Initial Options and any Performance Options previously granted shall immediately
become fully vested. Employee shall not be entitled to any of the Benefits
except to the extent provided in the benefit plans and programs of the Company
in which Employee was a participant prior to his termination due to Long Term
Disability
(d) Upon Death. If, prior to the expiration of the Employment Term,
Employee dies, Employee (or Employee's estate or successors) shall (i) be
entitled to the Accrued Base Salary accrued through the date of Employee's
death, (ii) be entitled to any
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Bonus and/or Performance Options to which Employee is entitled for services
provided in a prior fiscal year of the Company and which Bonus and/or
Performance Options have not yet been paid and/or issued, as the case may be,
prior to Employee's death and (iii) cease to be covered under or receive any of
the Benefits, except as may be provided in the benefit plans and programs of the
Company in which Employee was a participant prior to his death.
6. Confidentiality
Employee agrees to execute and deliver the Company's standard form
of confidentiality and inventions agreement.
7. Non-competition
(a) For so long as Employee is an officer, director, or employee of
the Company, and for a period of time equal to (i) in the case of the
termination of Employee's employment pursuant to Sections 5.2(a) or 5.3(b), six
months after the date of such termination and (ii) in the case of the
termination of Employee's employment pursuant to Sections 5.2(b), 5.3(a) or
5.3(c), the period of salary continuation provided for in such section, Employee
shall not, in any county and/or city in the State of Connecticut, the United
States of America or any county or political subdivision in any state or country
in the world, for any reason whatsoever, (A) directly or indirectly engage in a
Competitive Business whether such engagement shall be as an employer, officer,
director, owner, employee, partner, member or other participant; provided,
however, that Employee shall not be deemed to be engaged in a Competitive
Business solely by his ownership of less than 5% of any class of securities
which class of securities have been registered under Section 12 of the
Securities Exchange Act of 1934, as amended or (B) assist others, whether as a
consultant, agent or independent contractor, in engaging in a Competitive
Business; or (C) induce (whether through recruitment, solicitation of employment
or otherwise) employees of the Company or any of its affiliates to terminate
their employment therewith. For purposes of this Agreement, "Competitive
Business" shall mean any business involving the development of, or sales and
marketing of safety needles and related products.
(b) If Employee breaches, or threatens to commit a breach of any of
the provisions of this Section 7 (the "Restrictive Covenants"), the Company
shall have the right and remedy to have the Restrictive Covenants specifically
enforced by any court of competent jurisdiction, including but not limited to
the right to entry against Employee of restraining orders and injunctions
(preliminary, mandatory, temporary and permanent) against violations, threatened
or actual, and whether or not continuing, of any of the Restrictive Covenants,
it being acknowledged and agreed by Employee that any breach or threatened
breach of any of the Restrictive Covenants would cause irreparable and
continuing injury to the Company and that money damages would not provide an
adequate remedy to the Company. The foregoing right and remedy shall be in
addition
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to, and not in lieu of, any other rights and remedies available to the Company
at law or in equity.
(c) Employee acknowledges and agrees that the Restrictive Covenants
are reasonable and valid in geographic and temporal scope and in all other
respects. The Company and Employee further acknowledge and agree that if any
court of competent jurisdiction determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable for any reason, (i)
the Restrictive Covenants contained herein shall be restricted to such extent as
such court determines to be reasonable and (ii) that it is clearly the intent of
the parties that the remainder of the Restrictive Covenants and parts thereof
shall not thereby be affected and shall be given full effect, without regard to
the invalid portions. No provision herein shall be dependent upon the validity
of any other provision. Any modification of the Restrictive Covenants, or any
part thereof, by any court of competent jurisdiction shall only be effective
with respect to the operation of such covenant (or part thereof) in the
particular jurisdiction in which such adjudication is made.
8. General.
8.1 Governing Law. This Agreement shall be construed, interpreted and
governed by the laws of the State of Connecticut, without regard to the
conflicts of law rules thereof.
8.2 Authority. The Company hereby represents and warrants that it has
all corporate authority necessary to enter into this Agreement.
8.3 Binding Effect. This Agreement shall extend to and be binding upon
Employee, his legal representatives, heirs and distributees and upon the
Company, its successors and assigns regardless of any change in the business
structure of the Company, be it through spin-off, merger, sale of stock, sale of
assets or any other transaction.
8.4 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder shall be assigned or delegated by any party without the
prior written consent of the other party.
8.5 Entire Agreement. Except for any stock option or stock award
agreements between the parties, and the confidentiality and inventions agreement
between the parties, this Agreement contains the entire agreement of the parties
with respect to the subject matter hereof. No waiver, modification or change of
any provision of this Agreement shall be valid unless in writing and signed by
both parties.
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8.6 Waiver. The waiver of any breach of any duty, term or condition of
this Agreement shall not be deemed to constitute a waiver of any preceding or
succeeding breach of the same or any other duty, term or condition of this
Agreement.
8.7 Severability. If any provision of this Agreement shall be
unenforceable in any jurisdiction in accordance with its terms, the provision
shall be enforceable to the fullest extent permitted in that jurisdiction and
shall continue to be enforceable in accordance with its terms in any other
jurisdiction and the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby.
8.8 Resolution of Disputes. Except for actions by the Company with
respect to Section 7 hereof, any disputes arising under or in connection with
this Agreement between Employee and the Company (or any officer, director,
employee or agent of the Company) shall be resolved by confidential binding
arbitration before a panel of three arbitrators, to be held in Hartford,
Connecticut (or in such other location as the Company may at the time be
headquartered) in accordance with the then-current National Rules for the
Resolution of Employment Disputes of the American Arbitration Association.
Judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.
8.9 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which shall together constitute
one and the same agreement.
[Signature page follows this page]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
WITNESS
____________________________ ________________________________
Name: XXXXXXXXXXX X. XXXX
BIO-PLEXUS, INC.
WITNESS
____________________________ By _________________________________
Name: Name: XXXX XXXX
Title: PRESIDENT & CHIEF EXECUTIVE
OFFICER
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