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Exhibit 10.10
EXECUTIVE EMPLOYMENT AGREEMENT
Xxxxxx X. Xxxxx
This Employment Agreement is made and entered into this 1st day of January,
1999, by and between Myo Diagnostics, Inc., a California corporation
(hereinafter "Myo"), and Xxxxxx X. Xxxxx (hereinafter "Xxxxx").
RECITALS
A. Myo is engaged in developing and marketing a medical diagnostic technique
known as Muscle Pattern Recognition (referred to herein as "MPR") pursuant to an
exclusive license with respect to the MPR technology from Toomim Research Group.
It is anticipated that Myo will design, develop and create derivatives of the
MPR technology and new applications of the MPR technology, and may develop,
design, create, license or otherwise acquire other technology, which may or may
not be related to MPR.
X. Xxxxx is an executive employee of Myo and, in connection with his
employment, has been and/or will be exposed to Confidential Information (as
defined below) and will participate in the design, development, creation,
production, management, exploitation and/or sales and marketing activities of
Myo, in addition to many other confidential aspects of Myo's business.
C. Myo desires assurance of the continued association and services of Xxxxx in
order to retain his experience, abilities, and knowledge, and is therefore
willing to engage his services on the terms and conditions set forth below.
X. Xxxxx desires to continue in the employ of Myo and is willing to do so on
the terms and conditions set forth below.
DEFINITIONS
"Board" shall mean the Board of Directors of Myo.
"Myo Group" shall mean Myo and each Person which Myo directly or indirectly
Controls.
"Confidential Information" is defined as confidential records, including, but
not limited to, scientific, engineering, development, marketing, organizational,
financial, managerial, administrative, manufacturing, production, distribution
and sales information, data, specifications, secret inventions and processes,
computer software and hardware, presently owned or at any time hereafter
developed by Myo, or used presently or at any time hereafter in the course of
its business. This includes, without limitation, all of Myo's price lists,
pricing information, customer lists, customer information, financial
information, trade secrets, formulas, patterns, compilations, devices, methods,
techniques, processes, procedures, confidential trade knowledge, scripts and
computer programs and like information that is essential to the goodwill of the
business of Myo. Confidential Information shall also include any information
which, if disclosed, would be detrimental to Myo or its customers, whether or
not such information is identified as Confidential Information.
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"Control" shall mean, with respect to any Person or entity, 0 the beneficial
ownership of more than 50% of the outstanding voting securities of such Person,
or (ii) the power, directly or indirectly, by proxy, voting trust or otherwise,
to elect a majority of the outstanding directors, trustees or other managing
persons of such Person.
"Employee Handbook" shall mean Myo's Employee Handbook, as from time to time in
effect.
"Employment Commencement Date" shall mean January 1, 1998.
"For Cause" shall mean, in the context of a basis for termination of Xxxxx'x
employment with Myo, that:
(a) Xxxxx materially breaches any obligation, duty or agreement under this
Agreement, which breach is not reasonably cured or corrected within 30 days of
written notice thereof from Myo (except for breaches of Sections 8 and 9 of this
Agreement, which cannot be cured and for which Myo need not give any opportunity
to cure); or
(b) Xxxxx is guilty of gross misconduct in the performance of services to Myo,
or commits any act of personal dishonesty, fraud, breach of fiduciary duty or
trust that, in the reasonable judgment of the Board, renders Xxxxx unsuitable
for his position; or
(c) Xxxxx is convicted of, or pleads guilty or nolo contenders with respect to,
theft, fraud, crime involving moral turpitude, or felony under federal or
applicable state law; or
(d) Xxxxx commits any act of personal conduct that is proven in a, court of law
that results in liability under federal or applicable state law for
discrimination or sexual or other forms of harassment or other similar
liabilities to subordinate employees; or
(e) Xxxxx commits continued and repeated substantive violations of specific
written directions of the Board and/or Chief Executive Officer of Myo, which
directions are consistent with this Agreement and Xxxxx'x position as an
executive officer, or continued and repeated substantive failure to perform
duties assigned by or pursuant to this Agreement including;
i. failure to reduce the debt existing at the time of this contract;
ii. failure to provide at least $1,000,000 financing from September l, 1998
to September 1, 1999;
iii. failure to initiate marketing efforts that result in revenue that is
equal to a minimum of 50% of operating expenses in the fourth quarter of
1999;
iv. failure to fully develop an operational support system to automatically
electronically process MPR reports, provided that no discharge shall be
deemed for Cause under this subsection (e) unless Xxxxx first receives
written notice from Myo advising Xxxxx of the specific acts or omissions
alleged to constitute violations of written directions or a material
failure to perform his duties, and such violations or material failure
continue after Xxxxx shall have had a reasonable opportunity to correct
the acts or omissions so complained of; or
(f) Xxxxx made any material misrepresentation or omission regarding his
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employment history, education or experience in connection with his negotiations
to become an employee of Myo; or
(g) Xxxxx acts in a repeated manner that, as adjudicated in a court of law, has
a direct and measurably substantial adverse effect on Myo's reputation.
"Person" shall mean an individual or a partnership, corporation, trust,
association, limited liability company, governmental authority or other entity.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing facts and the mutual
covenants, agreements and representations, and in exchange for good and valuable
consideration of Xxxxx'x employment, the wages, training and other benefits of
such employment, Myo and Xxxxx agree as follows:
1. Engagement and Responsibilities
(a) Upon the terms and subject to the conditions set forth in this Agreement,
Myo hereby engages and employs Xxxxx as an officer of Myo, with the title and
designation "Chief Executive Officer and President." Xxxxx hereby accepts such
engagement and employment. Unless the parties agree otherwise in writing, during
the employment term Xxxxx shall perform the services he is required to perform
under this Agreement at Myo's offices, located at 0000 X. Xxxxxxxxx Xxxx.,
Xxxxxx Xxxx, Xxxxxxxxxx 00000; provided, however, that Myo may from time to time
require Xxxxx to travel temporarily to other locations on Myo's business.
(b) Xxxxx'x duties and responsibilities shall be those incident to the
position(s) set forth in Section 1 (a) as set forth in the Bylaws of Myo and
those which are normally and customarily vested in such offices of a
corporation. In addition, Xxxxx'x duties shall include those duties and services
for Myo and its affiliates as the Board of Myo, shall, in their sole and
absolute discretion, from time to time reasonably direct which are not
inconsistent with Xxxxx'x positions described in Section 1 (a).
(c) Xxxxx agrees to devote his best efforts and abilities to Myo and such time,
interest and effort to the performance of this Agreement as may be fairly and
reasonably necessary for Xxxxx to faithfully and diligently promote Myo's
business interests. For so long as Xxxxx is employed by Myo, or for so long as
Xxxxx is receiving severance under Section 6 of this Agreement, Xxxxx shall not,
directly or indirectly, either as an employee, employer, consultant, agent,
investor, principal, partner, stockholder (except as the holder of less than 3%
of the issued and outstanding stock of a publicly held corporation), corporate
officer or director, or in any other individual or representative capacity,
engage or participate in any business that is in direct competition with the
business of Myo, as such businesses are now or hereafter conducted. Subject to
the foregoing prohibition and provided such services or investments do not
violate any applicable law, regulation or order, or interfere in any way with
the faithful and diligent performance by Xxxxx of the services to Myo otherwise
required or contemplated by this Agreement, Myo expressly acknowledges that
Xxxxx may:
(i) make and manage personal business investments of Xxxxx'x choice without
consulting the Board; and
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(ii) serve in any capacity with any civic, educational, charitable or trade
organization without consulting with the Board,
(d) Xxxxx represents to Myo that he has no other outstanding commitments
inconsistent with any of the terms of this Agreement or the services to be
rendered under it.
2. Compensation and Benefits
Myo shall compensate Xxxxx pursuant to the terms of Attachment "l", attached
hereto and incorporated herein by this reference.
3. Term of Employment and Termination
Xxxxx'x employment pursuant to this Agreement shall commence on the Employment
Commencement Date and shall terminate on the earliest to occur of the following:
(a) upon the death of Xxxxx;
(b) upon delivery to Xxxxx of written notice of termination by Myo if Xxxxx
shall suffer a physical or mental disability which renders Xxxxx, in the
reasonable judgement of the Board and/or Chief Executive Officer, unable to
perform his duties and obligations under this Agreement for 90 consecutive days
or 140 days in any 12-month period;
(c) upon 90 days' prior written notice of resignation from Xxxxx to Myo;
(d) upon delivery to Xxxxx of written notice of termination by Myo For Cause;
(e) upon delivery to Xxxxx of written notice of termination by Myo Without
Cause such notice to be issued 90 days prior written notice.
(f) upon delivery by Xxxxx to Myo of Xxxxx'x voluntary retirement, which
retirement shall be effective on the last day of any fiscal year, provided that
day occurs after Xxxxx'x 64th birthday, and provided three (3) months' prior
written notice of the retirement shall have been given by Xxxxx to Myo.
4. Rights to Terminate or Assign Agreement
This Agreement shall not be terminated by Myo's voluntary or involuntary
dissolution or by any merger in which Myo is or is not the surviving or
resulting corporation, or on any transfer of all or substantially all of Myo's
assets. In the event of any such merger or transfer of assets, the provisions of
this Agreement shall be binding on and inure to the benefit of the surviving
business entity or the business entity to which such assets shall be
transferred.
5. Severance Compensation
(a) If Xxxxx'x employment is terminated pursuant to Section 3(a) (death) or
Section 3(b) (disability), Xxxxx shall be entitled to compensation equal to the
base compensation received in the immediate past year including bonuses. Stock
options for the year in which death or disability occurs shall be vested on the
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date earned to the date of the death or disability;
(b) If Xxxxx'x employment is terminated pursuant to Section 3(c) (by Xxxxx),
Xxxxx shall be entitled to: salary, all other benefits and all bonus and stock
options (pro-rata or otherwise up to the date of termination) as earned up to
that date as provided with respect to the Employment Year period during which
his employment is terminated;
C. If Xxxxx'x employment is terminated pursuant to Section 3(d) (by Myo For
Cause), Xxxxx shall be entitled to compensation only to the date of such
termination. All benefits will terminate as of that date and all stock options
not vested shall be cancelled. Any loan to Xxxxx from Myo for the purchase of
stock shall be due in full within thirty (30) days of the date of termination.
Payment of this loan will be in cash or surrender of the number of shares of
equivalent market value of the loan, up to the total shares purchased with the
proceeds of the loan. Myo shall be entitled to offset against any payments due
Xxxxx the loss and damage, if any, which shall have been suffered by Myo as a
result of the acts or omissions of Xxxxx giving rise to termination under
Section 3(d)(i). The foregoing shall not be construed to limit any cause of
action, claim or other rights which Myo may have against Xxxxx in connection
with such acts or omissions.
d. In the event of termination of Xxxxx'x employment pursuant to Section 3(e)
by Myo without Cause), Xxxxx shall be entitled to:
i. compensation for the balance of the term of the Agreement or an amount
equal to the immediate past two years compensation including bonuses and stock
options, whichever is greater;
ii. forgiveness of all notes held by the Company for purchase of stock and
shall pay any state and federal income taxes resultant of that forgiveness the
balance of the notes shares of Myo and payment of all state and federal taxes on
the amounts forgiven.
iii. all other benefits specifically provided in this Agreement for a period
ending one year after the third anniversary of the Employment Commencement date;
iv. severance pay equal to the base compensation and bonus earned in the year
previous to the period in which termination occurred.
(e) In the event of termination of Xxxxx'x employment pursuant to Section 3(f)
(voluntary retirement) pursuant to the terms of this Agreement or earlier by
mutual agreement of Myo and Xxxxx, Xxxxx shall be entitled to compensation
according to this Section5(d) unless otherwise mutually agreed by the parties.
(f) Xxxxx acknowledges that in the event of termination of his employment for
any reason, Xxxxx shall not be entitled to any severance or other compensation
from Myo except as specifically provided in this Section 5. Without limitation
on the generality of the foregoing, this Section supersedes any plan or policy
of Myo which provides for severance to its officers or employees, and Xxxxx
shall not be entitled to any benefits under any such plan or policy.
(g) Xxxxx shall have no obligation to offset any payments he receives from Myo
following the termination of his employment by any payments he receives from his
subsequent employer, except that any payments Xxxxx receives under the employee
benefit plans or programs of a subsequent employer shall offset any
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payments he receives from comparable employment benefit plan or program of Myo.
6. Stock Options
Myo shall provide stock options to Xxxxx pursuant to the terms of Attachment
"2", attached hereto and incorporated herein by this reference.
7. Covenant Not To Compete/Solicit
(a) During the term of Xxxxx'x employment with Myo, Xxxxx shall not
directly or indirectly, promote, participate, or engage in any activity or other
business competitive with Myo's business.
(b) Because of his employment by Myo, Xxxxx will have access to trade
secrets and Confidential Information about Myo, its products, its customers, and
its methods of doing business.
In consideration of his access to this information, Xxxxx agrees that for a
period of three years after termination of his employment, he will not, directly
or indirectly, compete with Myo in the field of diagnosis or treatment of soft
tissue muscle injuries of the back, neck, arms or legs in the following
locations: the state of California and any other location where Myo has
distributed its products. Xxxxx understands that direct competition means
design, development, production, promotion, or sale of products or services
competitive with those of Myo. Indirect competition means employment by any
competitor or third party providing products competing with Myo's products, for
whom Xxxxx will perform the same or similar function as he performs for Myo.
C. During the period from the date Xxxxx'x employment with Myo terminates
through the first anniversary of such date, Xxxxx will not directly or
indirectly, either alone or by action in concert with others:
i. induce or attempt to influence any employee of any member of Myo Group to
engage in any activity in which Xxxxx is prohibited from engaging by Section
1(c) of this Agreement or to terminate his employment with any member of Myo
Group;
ii. employ or offer employment to any person who was employed by any member of
Myo Group at the time of termination of Xxxxx'x employment with Myo;
iii. induce or attempt to induce any customer, supplier, licensee or other
business relationship of any member of Myo Group to cease or reduce its business
with any member of Myo Group, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relationship and any
member of Myo Group; or
iv. solicit business from any of Myo's customers.
8. Confidentiality, Ownership and Assignment of Rights
(a) Xxxxx shall not, at any time from and after the date hereof, directly or
indirectly disclose, reveal or permit access to all or any portion of the
Confidential Information, or any tangible expressions or embodiments thereof
(including any facilities, apparatus or equipment which embody or employ all or
any portion of the Confidential Information), to any Person without the written
consent of Myo, except to Persons designated or employed by Myo, or in the
course of Xxxxx'x ordinary and reasonable business activities, or as required
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by law.
(b) Without the prior written consent of Myo, Xxxxx shall not directly or
indirectly use or exploit the Confidential Information at any time from and
after the date hereof for any purpose other than in connection with his
employment duties and obligations to Myo.
(c) Xxxxx agrees to assign and does hereby irrevocably assign to Myo all of his
right, title and interest in and to any Confidential Information devised,
developed, designed or discovered by [him or her] or in which he may otherwise
obtain, or has otherwise obtained, any rights, while in the employ of Myo.
(d) Xxxxx agrees to take any actions, including the execution of documents or
instruments, which Myo may reasonably require to effect the Xxxxx'x assignment
of rights pursuant to this Agreement, and Xxxxx hereby constitutes and appoints,
with full power of substitution and resubstitution, the President of Myo as his
attorney-in-fact to execute and deliver any documents or instruments which Xxxxx
is obligated to execute and deliver pursuant to this Agreement.
(e) At the request of Myo, Xxxxx shall assist Myo in applying for and obtaining
both domestic and foreign patents, or copyrights, as the case may be, on all
Confidential Information that Xxx xxxxx to be patentable or copyrightable,
devised, developed, designed or discovered by Xxxxx or in which he may otherwise
obtain, or has otherwise obtained, any rights, while in the employ of Myo, and
Xxxxx shall execute at any time or times any and all documents and perform all
acts reasonably requested by Myo which Xxx xxxxx to be necessary or desirable in
order to obtain such patents or copyrights or otherwise to vest in Myo full and
exclusive title and interest in and to all such Confidential Information, to
protect the same against infringement by others and otherwise to aid Myo in
connection with any continuations, renewals or reissues of any patents or
copyrights, or in the conduct of any proceedings or litigation in regard
thereto. All expenses of procuring any patent or copyright shall be paid by Myo.
Xxxxx specifically acknowledges and agrees that all tangible expressions of the
Confidential Information, including, without limitation, all documents,
instruments, sketches, drawings, notes, records, plans, specifications, manuals
and tapes, and all reproductions, copies or facsimiles thereof, have been
developed, made or invented exclusively for the benefit of and are the sole and
exclusive property of Myo, its successors and assigns and constitute "Work For
Hire" under Section 201 of Title 17 of the United States Code.
(g) Xxxxx shall not remove any tangible expressions of the Confidential
Information from the premises of Myo, except as is reasonably necessary for
Xxxxx to conduct business on behalf of Myo.
(h) Upon either the written request of Myo, or upon termination of Xxxxx'x
employment with Myo (as herein defined), Xxxxx shall deliver to Myo all tangible
expressions of the Confidential Information which are in the possession or under
the control of Xxxxx.
9. Indemnification
(a) Myo shall, to the maximum extent permitted by law and its Bylaws, indemnify
and hold Xxxxx harmless for any acts or decisions made in good faith while
performing services for Myo. To the same extent, Myo will pay, and subject to
any legal limitations, advance all expenses, including reasonable
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attorney fees and costs, actually and necessarily incurred by Xxxxx in
connection with the defense of any action, suit or proceeding and in connection
with any appeal, which has been brought against Xxxxx by reason of his service
as an officer or agent of Myo.
(b) Myo shall use its best efforts to obtain coverage for Xxxxx (provided it
may be obtained at a reasonable cost) under any liability insurance policy or
policies now in force or hereafter obtained during the term of this Agreement
that cover other officers of Myo having comparable or lesser status and
responsibility.
10. Resolution of Disputes/Arbitration
(a) Except as provided in subsection (b) below, any controversy or claim
between Myo and Xxxxx relating to Xxxxx'x employment with Myo, including but not
limited to those arising out of or relating to this Agreement, shall at the
request of any party be determined by arbitration. The arbitration shall be
conducted with the United States Arbitration Act (Title 9, U.S. Code),
notwithstanding any choice of law provision in this Agreement, and under the
Commercial Rules of the American Arbitration Association ("AAN"). The parties
shall have the right to review and approve a panel of prospective arbitrators
supplied by AAA, but the arbitration shall be conducted by a single arbitrator
selected from the approved panel by AAA or by stipulation of the parties. The
arbitrator(s) shall give effect to statutes of limitation in determining any
claim. Any controversy concerning whether an issue is arbitrable shall be
determined by the arbitrator(s). The arbitrator(s) shall be entitled to order
specific performance of the obligations imposed by this Agreement. Judgment upon
the arbitration award may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.
(b) Subsection (a) above does not prohibit a party from seeking and obtaining
injunctive relief pending the outcome of arbitration . Moreover, Xxxxx
acknowledges that the injury that would be suffered by Myo as a result of a
breach or threatened breach of Section 1 (c), 7 or 8 -would be irreparable and
that an award of monetary damages to Myo for such breach would be an inadequate
remedy. Consequently, Myo, without posting any bond, shall be entitled to obtain
equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which may
then be available.
11. Miscellaneous
(a) Notices. All notices, requests, demands and other communications
(collectively, "Notices") given pursuant to this Agreement shall be in writing,
and shall be delivered by personal service, courier, facsimile transmission or
by United States first class, registered or certified mail, addressed to the
following addresses:
(i) If to Myo, to:
Myo Diagnostics, Inc.
0000 Xxxxx Xxxxxxxxx Xxxxxxxxx Xxxxxx Xxxx, XX 00000
Attn: Chairman of the Board/Chief Executive Officer
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(ii) If to Xxxxx, to:
The last known address as set forth on the books and records of Myo
Any Notice, other than a Notice sent by registered or certified mail, shall be
effective when received; a Notice sent by registered or certified mail, postage
prepaid return receipt requested, shall be effective on the earlier of when
received or the third day following deposit in the United States mails (or on
the seventh day if sent to or from an address outside the United States). Any
party may from time to time change its address for further Notices hereunder by
giving notice to the other party in the manner prescribed in this Section.
(b) Entire Agreement This Agreement contains the sole and entire agreement and
understanding of the parties with respect to the entire subject matter of this
Agreement, and any and all prior discussions, negotiations, commitments and
understandings, whether oral or otherwise, related to the subject matter of this
Agreement are hereby merged herein. No representations, oral or otherwise,
express or implied, other than those contained in this Agreement have been
relied upon by any party to this Agreement. Notwithstanding the foregoing, Xxxxx
acknowledges that Myo has relied on his resume and other documents which may
have been provided by Xxxxx, and oral statements regarding Xxxxx'x employment
history, education and experience, in determining to enter into the Agreement,
and material misrepresentations (or omissions) in connection with such documents
may constitute the basis of termination For Cause, as contemplated by the
definition of For Cause herein.
(c) Severability. In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, in whole or
in part, the remaining provisions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.
(d) Governing Law. This Agreement has been made and entered into in the State
of California and shall be construed in accordance with the laws of the State of
California.
(e) Captions. The various captions of this Agreement are for reference only and
shall not be considered or referred to in resolving questions of interpretation
of this Agreement.
Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
(g) Business Day. If the last day permissible for delivery of any notice under
any provision of this Agreement, or for the performance of any obligation under
this Agreement, shall be other than a business day, such last day for such
notice or performance shall be extended to the next following business day
(provided, however, under no circumstances shall this provision be construed to
extend the date of termination of this Agreement).
(h) Attorneys' Fees. If any action or proceeding is brought to enforce or
interpret any provision of this Agreement, the prevailing party shall be
entitled to recover as an element of its costs, and not its damages, its
reasonable attorneys' fees, costs and expenses. The prevailing party is the
party who is entitled to recover its costs in the action or proceeding. A
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party not entitled to recover its costs may not recover attorneys' fees. No sum
for attorneys' fees shall be counted in calculating the amount of a judgment for
purposes of determining whether a party is entitled to recover its costs or
attorneys' fees.
(i) Advice from Independent Counsel The parties hereto understand that this
Agreement is legally binding and may affect such party's rights. Each party
represents to the other that it has had the opportunity to seek and obtain legal
advice from counsel of its choice regarding the meaning and legal significance
of this Agreement to which it is a party.
(j) Judicial Interpretation. Should any provision of this Agreement require
judicial interpretation, it is agreed that a court interpreting or construing
the same shall not apply a presumption that the terms hereof shall be more
strictly construed against any Person by reason of the rule of construction that
a document is to be construed more strictly against the Person who itself or
through its agent prepared the same, it being agreed that all Parties have
participated in the preparation of this Agreement.
(k) Waiver of Jury Trial. If notwithstanding the agreement that all disputes be
submitted to binding arbitration, a dispute is submitted to a court, each party
hereto waives the right to a trial by jury in any dispute in connection with or
relating to this Agreement, any related agreement or any matters described or
contemplated herein or therein, and agree to take any and all action necessary
or appropriate to effect such waiver. In the event of litigation, this Agreement
may be filed as written consent to a trial by the court.
IN WITNESS WHEREOF, this Agreement is made and entered into as of the dates
indicated hereinbelow.
Dated: "MYO"
MYO DIAGNOSTICS, INC.
By:
Its:
Dated: "Xxxxx"
Signature:
Print Name:
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EXECUTIVE EMPLOYMENT AGREEMENT
ATTACHMENT "1"
1. TERM OF EMPLOYMENT
Xxxxx shall be employed for a period of three years commencing January 1,1999,
this term being defined as employment for a minimum of two years and a
consulting term of one year thereafter.
2. POSITION
During the first year, Chairman, CEO and President. After the first year,
position will be subject to change upon mutual agreement of Xxxxx and the Board.
A change in position shall have no impact on base compensation defined within
this agreement and bonus except as outlined in this Attachment 1 2(D)(3).
3. COMPENSATION AND BENEFITS
a. Base Salary. Myo shall pay to Xxxxx a base salary at an annual rate of
not less than $150,000 during the term of his employment pursuant to this
Agreement. The base salary and additional benefits shall be reviewed for
increase by the Board no less frequently than every twelve months,
commencing January 1, 2000 provided, however, that Myo shall be under no
obligation to increase such base salary and additional benefits. The base
salary shall be payable as current salary in installments in the same
manner and at the same times Myo pays base salaries to other senior
officers of Myo, but in no event less frequently than equal bi-monthly
installments.
i. In the event that Xxxxx is a consultant in the third year of this
agreement he shall be paid at the base salary and is not eligible for
participation in the employee's Bonus pool for that year.
xx.Xx the event that Xxxxx agrees to defer a portion of that salary,
the deferred amounts shall be paid no later than one year from the date
deferred unless mutually agreed by the parties.
b. Incentive Compensation. In addition to the Base Salary provided for
above, Myo shall pay Xxxxx as incentive compensation, the following sums:
x. Xxxxx shall receive incentive compensation for Xxxxx'x signing this
contract in the amount of $25,000 to be paid by the end of the first
year of employment and shall receive previous salaries deferred in 1998
and 1997 unless the parties mutually agree upon a program for further
deferral.
ii.Xxxxx shall participate in the Myo bonus pool established for its
employees. The annual bonus for 1999 shall be a minimum sum of $50,000
subject to reasonable performance and progress toward accomplishing the
Company's objectives as defined in Xxxxx'x annual Management
Objectives. In the event that Myo is unable to pay incentive bonus
earned, Xxxxx at his sole option may accept deferral or stock option in
lieu of such bonus.
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iii. Xxxxx shall receive incentive compensation a minimum of $100,000
for Xxxxx'x second and third year of employment with Myo subject to the
same terms as (2) above. The bonus shall be determined by the Board and
paid semi-annually. In the event that Xxxxx'x role and responsibilities
in the company in the second year are reduced, the minimum shall be
reduced but in no instance shall it be reduced by more than 50% except
if he is acting as a consultant per the 3(B) above.
c. Stock Purchase. Upon execution of this Agreement, Myo shall sell to Xxxxx
300,000 shares of its stock at a price of $1.00 per share or the current
market value whichever is lower, according to following terms;
i. Shares shall be paid by an interest bearing loan provided by the
Company, the shares to serve as collateral for the loan. If the shares
are sold during the term of the agreement, the outstanding balance of
the loan shall be repaid by Xxxxx in full;
ii.If the shares are retained beyond the term of the Agreement or if,
at any time after they are purchased, the shares are sold due to a
merger or acquisition in which more than 50% of Myo's shares are
acquired, the loan shall be repaid by forgiveness by Myo over a period
of five years including the payment of all state and federal taxes
arising from this transaction;
iii. If the shares are sold at any time during the five year period,
Xxxxx shall pay 50% of the outstanding balance of the loan with 30 days
of the completion of the sale and the balance shall be forgiven per the
terms of 3(C)(c) above.
d. Stock Options. Non-qualified options to purchase Three Hundred and
Seventy Five Thousand (375,000) shares of Myo's stock shall be granted as
follows;
i. Options to purchase 125,000 shares at $1.00 per share shall be
granted and shall be vested at the date of execution of this Agreement;
ii.Options to purchase 125,000 shares at $1.50 per share shall be
granted on the date of execution of this Agreement and shall be vested
one year from that date;
iii. Options to purchase 125,000 shares at $2.00 per share shall be
granted on the date of execution of this Agreement and shall be vested
two from that date;
iv. All options shall expire seven years from the date of their
vesting.
e. Insurance Benefits. During Xxxxx'x employment with Myo, Xxxxx shall be
entitled to all other benefits of employment generally available to Myo's
other executive and managerial employees when and as he becomes eligible
for them, including medical and dental insurance benefits. Upon
termination of this Agreement for any reason except by Myo for Cause,
Xxxxx shall receive insurance benefits for an additional twenty four (24)
months.
f. Expense Reimbursement. Xxxxx shall be entitled to prompt reimbursement
from Myo for all reasonable costs and expenses that Xxxxx incurs in
connection with the performance of his duties and obligations under this
Agreement. Reimbursement shall be in a manner consistent with Myo's
practices and policies. Reasonable costs and expenses include
13
expenses related to travel, entertainment, business meetings and
professional dues, made and substantiated in accordance with the policies
and procedures established from time to time by Myo with respect to
Xxxxx'x other executive and managerial employees.
g. Automobile Allowance. Xxxxx shall be entitled to an automobile allowance
of no more than $1,000 per month . The automobile allowance shall include
all costs associated with the operation Xxxxx'x auto including fuel,
repairs, insurance, depreciation, parking and maintenance so long as
those costs are not covered by warranties or other insurance.
Reimbursement shall be paid in a manner consistent with Myo's practices
and policies therefor.
h. Additional Benefit Plans. Xxxxx shall be entitled to participate in any
pension, savings and group term life, medical, dental, disability and
other group benefit plans which Myo makes available to its employees
generally.
i. Vacation. Xxxxx shall be entitled to eight weeks vacation each
twelve-month period, which shall accrue on a prorata basis from the date
employment commences under this Agreement. Vacation time will continue to
accrue so long as Xxxxx'x total accrued vacation does not exceed Myo's
policies as defined in its Employee Handbook.
j. Disability. In the event of any disability or illness of Xxxxx, if Xxxxx
shall receive payments as a result of such disability or illness under
any disability plan maintained by Myo, Myo shall be entitled to deduct
the amount of such payments received from Base Salary payable to Xxxxx
during the period of such illness and/or disability.
k. Withholding. Myo may deduct from any compensation payable to Xxxxx
(including payments made pursuant to Section 3 of this Agreement in
connection with or following termination of employment), amounts
sufficient to cover Xxxxx'x share of applicable federal, state and/or
local income tax withholding, old-age and survivors' and other social
security payments, state disability and other insurance premiums and
payments.
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