EMPLOYMENT AGREEMENT
This employment agreement ("Agreement") is made and entered into this
23rd day of October 2000, by and between SPECIALIZED HEALTH PRODUCTS, INC., a
Utah corporation ("Corporation"), and Xxxxxx X. Xxxxxxx ("Employee").
WHEREAS, Corporation and Employee desire that the term of this
Agreement begin on October 23rd, 2000 ("Effective Date").
WHEREAS, Corporation desires to employ Employee as its Vice President,
Chief Technical Officer and Employee is willing to accept such employment by
Corporation, on the terms and subject to the conditions set forth in this
Agreement.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
Section 1. Duties. During the term of this Agreement, Employee agrees to be
employed by and to serve Corporation on a full time basis as its Vice President,
Chief Technical Officer, and Corporation agrees to employ and retain Employee in
such capacities. Employee shall also be appointed to the Corporation's Executive
Committee. Employee shall report to the Corporation's President and at all times
during the term of this Agreement shall have powers and duties at least
commensurate with his position as Vice President, Chief Technical Officer.
Section 2. Term of Employment.
2.1 Definitions. For the purposes of this Agreement the following terms
shall have the following meanings:
2.1.1 "Termination For Cause" shall mean termination by
Corporation of Employee's employment by Corporation by reason of Employee's
willful dishonesty towards, fraud upon, or deliberate injury or attempted injury
to, Corporation or by reason of Employee's willful material breach of this
Agreement which has resulted in material injury to Corporation.
2.1.2 "Termination Other Than For Cause" shall mean
termination by Corporation of Employee's employment by Corporation (other than
in a Termination for Cause) and shall include constructive termination of
Employee's employment by reason of material breach of this Agreement by
Corporation, such constructive termination to be effective upon notice from
Employee to Corporation of such constructive termination.
2.1.3 "Voluntary Termination" shall mean termination by
Employee of Employee's employment by Corporation other than (i)Termination Other
Than For Cause, and (ii) termination by reason of Employee's death or disability
as described in Sections 2.5 and 2.6.
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2.2 Initial Term. The term of employment of Employee by Corporation
shall be for a period of three (3) years beginning with Effective Date ("Initial
Term"), unless terminated earlier pursuant to this Section. At any time prior to
the expiration of the Initial Term, Corporation and Employee may by mutual
written agreement extend Employee's employment under the terms of this Agreement
for such additional periods as they may agree.
2.3 Termination For Cause. Termination For Cause may be effected by
Corporation at any time during the term of this Agreement and shall be effected
by written notification to Employee. Upon Termination For Cause, Employee shall
promptly be paid all accrued salary, bonus compensation to the extent earned,
vested deferred compensation (other than pension plan, profit sharing plan and
stock option plan benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of the Corporation in which Employee is a
participant to the full extent of Employee's rights under such plans, accrued
vacation pay and any appropriate business expenses incurred by Employee in
connection with his duties hereunder, all to the date of termination, but
Employee shall not be paid any other compensation or reimbursement of any kind,
including without limitation, severance compensation.
2.4 Termination Other Than For Cause. Notwithstanding anything else in
this Agreement, Corporation may effect a Termination Other Than For Cause at any
time upon giving written notice to Employee of such termination. Upon any
Termination Other Than For Cause, Employee shall promptly be paid all accrued
salary, bonus compensation to the extent earned, vested deferred compensation
(other than pension plan, profit sharing plan and stock option plan benefits
which will be paid in accordance with the applicable plan), any benefits under
any plans of the Corporation in which Employee is a participant to the full
extent of Employee's rights under such plans (other than pension plan, profit
sharing plan and stock option plan benefits which will be paid in accordance
with the applicable plan), accrued vacation pay and any appropriate business
expenses incurred by Employee in connection with his duties hereunder, all to
the date of termination, with the exception of salary and medical benefits which
shall continue through the expiration of this Agreement.
2.5 Termination by Reason of Disability. If, during the term of this
Agreement, Employee, in the reasonable judgment of the Board of Directors of
Corporation, has failed to perform his duties under this Agreement on account of
illness or physical or mental incapacity, and such illness or incapacity
continues for a period of more than twelve (12) consecutive months, Corporation
shall have the right to terminate Employee's employment hereunder by written
notification to Employee and payment to Employee of all accrued salary, bonus
compensation to the extent earned, vested deferred compensation (other than
pension plan, profit sharing plan and stock option plan benefits which will be
paid in accordance with the applicable plan), any benefits under any plans of
the Corporation in which Employee is a participant to the full extent of
Employee's rights under such plans, accrued vacation pay and any appropriate
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business expenses incurred by Employee in connection with his duties hereunder,
all to the date of termination.
2.6 Death. In the event of Employee's death during the term of this
Agreement, Employee's employment shall be deemed to have terminated as of the
last day of the month during which his death occurs and Corporation shall
promptly pay to his estate or such beneficiaries as Employee may from time to
time designate all accrued salary, bonus compensation to the extent earned,
vested deferred compensation (other than pension plan, profit sharing plan and
stock option plan benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of the Corporation in which Employee is a
participant to the full extent of Employee's rights under such plans, accrued
vacation pay and any appropriate business expenses incurred by Employee in
connection with his duties hereunder, all to the date of termination, but
Employee's estate shall not be paid any other compensation or reimbursement of
any kind, including without limitation, severance compensation.
2.7 Notice of Termination. Corporation may effect a termination of this
Agreement pursuant to the provisions of this Section upon giving thirty (30)
days' written notice to Employee of such termination. Employee shall not effect
a Voluntary Termination during the term of this Agreement.
Section 3. Salary, Benefits and Bonus Compensation.
3.1 Base Salary. As payment for the services to be rendered by Employee
as provided in Section 1 and subject to the terms and conditions of Section 2,
Corporation agrees to pay to Employee a "Base Salary" for the twelve (12)
calendar months beginning the Effective Date at the rate of $165,000 per annum
payable in no fewer than 12 equal monthly installments of $13,750.00. Employee's
Base Salary shall be reviewed annually by the Compensation Committee of the
Board of Directors ("Compensation Committee"), and the Base Salary for each year
(or portion thereof) shall be determined by the Compensation Committee which
shall authorize an increase in Employee's Base Salary for such year in an amount
which, at a minimum, shall be equal to the cumulative cost-of-living as
determined by the Corporation's board of directors.
3.2 Bonuses. Employee shall be eligible to receive a discretionary
bonus for each year (or portion thereof) during the term of this Agreement and
any extensions thereof, with the actual amount of any such bonus to be
determined in the sole discretion of the Board of Directors based upon its
evaluation of Employee's performance during such year. All such bonuses shall be
reviewed annually by the Compensation Committee.
3.3 Additional Benefits. During the term of this Agreement, Employee
shall be entitled to the following fringe benefits:
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3.3.1 Employee Benefits. Employee shall be eligible to
participate in such of Corporation's benefits and deferred compensation plans as
are now generally available or later made generally available to the officers of
the Corporation.
3.3.2 Vacation. Employee shall be entitled to four (4) weeks
of vacation during each year during the term of this Agreement and any
extensions thereof, prorated for partial years. Vacation time may be accrued.
3.3.3 Reimbursement for Expenses. During the term of this
Agreement, Corporation shall reimburse Employee for reasonable and properly
documented out-of-pocket business and/or entertainment expenses incurred by
Employee in connection with his duties under this Agreement.
Section 4. Ownership of Work Product. Work Product shall include all copyrights,
patents, trade secrets, or other intellectual property rights associated with
any ideas, concepts, techniques, inventions, processes, or works of authorship
developed or created by Employee during the course of performing work for SHP,
whether or not during normal hours of employment, which relate to the actual or
anticipated business of SHP at the time of such development or creation, or
related to actual or anticipated research and development (collectively, the
"Work Product"). Work product excludes ideas, concepts, techniques, inventions,
processes, or works of authorship developed or created by Employee
(collectively, "New Product Idea") reduced to writing and witnessed before SHP
is in a business related to the New Product Idea and any previous contracts or
licensing arrangements and personal property of Employee at the time of
employment listed on the attached statement, affixed hereto, if any. Any
exceptions must be reviewed and found to be not related to any business that SHP
anticipates or is already engaged and subsequently approved by the Executive
Committee. Work Product shall belong exclusively to SHP. Employee automatically
assigns, at the time of creation of the Work Product, without any requirement of
further consideration, any title, or interest it or they may have in such Work
Product, including any copyrights or other intellectual property rights
pertaining thereto, all such Work Product. Upon request of SHP, Employee shall
take such further actions including execution and delivery of instruments of
conveyance, as may be appropriate to give full and proper effect to such
assignment.
Section 5. Non-Compete. In recognition and consideration of Employee's
employment, compensation and benefits, the training in and information regarding
SHP's business which SHP will give Employee, Employee's introduction to SHP's
customers, and the carefully guarded methods of doing business which SHP
utilizes and deems crucial to the success of its business, Employee shall not
during the term of this Agreement, and for a period of one (1) year following
the termination of Employee's employment with SHP, regardless of the reason for
termination, either directly or indirectly, engage in the business of
developing, marketing, distributing, licensing, and/or selling products or
services having any function similar to, competitive with, or substitutable for,
SHP's products or services which are in the research and/or development stage
and/or
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for which development has been completed (collectively and individually, the
"Products"), anywhere in the United States, except with SHP's consent (which may
be withheld in SHP's sole discretion). In addition, Employee shall not engage in
any such activity, directly or indirectly, on Employee's own behalf or in the
service of or on behalf of others. Employee acknowledges and agrees that the
current market for the Products extends throughout the entire United States, and
it is therefore reasonable to prohibit Employee from competing with SHP anywhere
in the United States. The following Sections 5.1 through 5.5 shall not apply if
Employee is terminated for cause or Employee voluntarily terminates employment
with SHP. Termination for cause shall mean termination by SHP of Employee's
employment with SHP by reason of Employee's willful dishonesty towards, fraud
upon, or deliberate injury to, SHP or by reason of Employee's willful material
breach of this Agreement which has resulted in material injury to SHP.
5.1 If the employee is unable to obtain employment consistent with
their training, expertise and experience due to the provisions of this agreement
with respect to a company that markets, develops, or manufacturers products
similar to, or substitutable for, SHP's, such prohibition shall bind the
individual only as long as SHP shall make payments to the individual equal to
their monthly base pay at termination (exclusive of extra compensation and
employee benefits).
5.2 The employee will, for each month of such unemployment for which a
claim is being made, provide SHP a detailed written account of his or her
efforts to obtain employment and to include a statement that the employee has
conscientiously and diligently sought employment. The employee will submit the
report to SHP within fifteen (15) days following the end of each calendar month
of unemployment, and SHP shall make a payment to the employee equal to the
employee's base pay at the time of termination.
5.3 It is understood that SHP shall, at its option, be relieved of
making monthly payments where the employee has failed to submit the report to
SHP or failed to diligently seek other employment.
5.4 If after termination of employment with SHP, the employee obtains
other employment but due to the provisions of this agreement, the employee's
position is such that the gross monthly income is less than that received from
SHP as a regular monthly base pay, then SHP's obligation to make payments will
be limited to the difference between the amount the employee received at SHP as
a regular monthly base pay and the gross monthly income at the employee's new
employment.
5.5 If SHP, at any time, within the period specified in Section 5
following termination of the employee, gives the employee a written release from
the provisions of Section 5 of this agreement, SHP will no longer have any
obligation to make payments required in this agreement. Alternatively, if SHP
and employee agree to a mutually acceptable list of specific companies and
product or services area wherein the employee agrees not to seek employment,
directly or indirectly, SHP will have no obligation to make payments required
hereunder.
Section 6. Confidentiality. Employee will hold in a fiduciary capacity for the
benefit of Corporation, its affiliates, subsidiaries, related entities, and
designees, and shall not disclose to any person or entity other than Corporation
or persons or entities designated by Corporation, any secret, confidential or
proprietary information, knowledge, data and/or information, patents, trade
secrets, customer identities, marketing and other business methods, techniques,
processes, practices, procedures,
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plans and strategies regarding Corporation, its subsidiaries and affiliated
corporations or business enterprises, and their customers obtained by Employee
in the course of Employee's employment with Corporation, and any other secret,
confidential or proprietary information pertaining to Corporation, its parent,
subsidiaries and affiliated corporations or business enterprises, and their
customers, during the term of this Agreement and five (5) years after Employee's
termination of employment with Corporation, unless Corporation in writing
consents to the contrary. Notwithstanding the foregoing, Employee shall have no
confidentiality obligation with respect to information that: (a) was legally in
the public domain prior to the time of disclosure to the Employee, (b) is now or
subsequently becomes generally available to the public through no fault of
Employee; or (c) is required by law, regulation, rule, act, or order of any
governmental authority or agency to be disclosed by the Employee.
Section 7. Return of Materials. Immediately upon notice of termination of
employment, Employee shall give to Corporation the originals and all copies of
all documents, correspondence, memoranda, records, notes, manuals, materials,
customer and prospective customer lists and information, including without
limitation computer data, and other things relating to Corporation's business,
including, but not limited to, secret, confidential or proprietary information,
in Employee's possession, custody or control, unless otherwise agreed to by
Corporation.
Section 8. Non-Solicitation. Employee shall not employ, solicit for employment,
or advise or recommend to any other person that they employ or solicit for
employment or retention as a consultant, any person who is, or was at any time
within one (1) year prior to the Employee's date of termination of employment
with Corporation, an employee of, or exclusive consultant to, Corporation.
Section 9. Avoidance of Conflict of Interest. While employed by Corporation,
Employee shall not engage in any other business activity that conflicts with
Employee's duties to Corporation. Under no circumstances may Employee work for
any competitor or have any financial interest in any competitor of Corporation;
provided, however, that this Agreement does not prohibit investment of a
reasonable part of Employee's assets in the stock or securities of any
competitor whose stock or securities are traded on a national exchange.
Section 10. Withholdings. All compensation and benefits to Employee hereunder
shall be reduced by all federal, state, local and other withholdings and similar
taxes and payments required by applicable law.
Section 11. Indemnification. In addition to any rights to indemnification to
which Employee is entitled to under the Corporation's Articles of Incorporation
and Bylaws, Corporation shall indemnify Employee at all times during and after
the term of this Agreement to the maximum extent permitted under Utah Revised
Business Corporation Act or any successor provision thereof and any other
applicable state law, and shall pay Employee's expenses in defending any civil
or criminal action, suit, or proceeding in
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advance of the final disposition of such action, suit or proceeding, to the
maximum extent permitted under such applicable state laws.
Section 12. Notices. Any notices permitted or required under this Agreement
shall be deemed given upon the date of personal delivery or forty-eight (48)
hours after deposit in the United States mail, postage fully prepaid, return
receipt requested, addressed to the Corporation at:
000 Xxxx 000 Xxxxx
Xxxxxxxxx, Xxxx 00000
addressed to the Employee at:
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or at any other address as any party may, from time to time, designate by notice
given in compliance with this Section.
Section 13. Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State of Utah.
Section 14. Titles and Captions. All section titles or captions contained in
this Agreement are for convenience only and shall not be deemed part of the
context nor effect the interpretation of this Agreement.
Section 15. Entire Agreement. This Agreement contains the entire understanding
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement.
Section 16. Agreement Binding. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
Section 17. Attorney Fees. In the event an arbitration, suit or action is
brought by any party under this Agreement to enforce any of its terms, or in any
appeal therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
Section 48. Computation of Time. In computing any period of time pursuant to
this Agreement, the day of the act, event or default from which the designated
period of time begins to run shall be included, unless it is a Saturday, Sunday,
or a legal holiday, in which event the period shall begin to run on the next day
which is not a Saturday,
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Sunday, or legal holiday, in which event the period shall run until the end of
the next day thereafter which is not a Saturday, Sunday, or legal holiday.
Section 19. Pronouns and Plurals. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, neuter, singular, or plural as
the identity of the person or persons may require.
Section 20. Presumption. This Agreement or any section thereof shall not be
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.
Section 21. Further Action. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.
Section 22. Parties in Interest. Nothing herein shall be construed to be to the
benefit of any third party, nor is it intended that any provision shall be for
the benefit of any third party.
Section 23. Savings Clause. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed.
SPECIALIZED HEALTH PRODUCTS, INC. EMPLOYEE
By: /s/ Xxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxx
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Its: President Xxxxxx X. Xxxxxxx
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