EXHIBIT 10.72
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
May, 8, 2002, by and between Xxxxxx X. Xxxxxx, an individual resident of the
State of Minnesota ("Employee"), and Horizon Medical Products, Inc., a Georgia
corporation ("Employer");
W I T N E S S E T H:
WHEREAS, Employer desires to employ Employee and Employee desires to be
employed by Employer, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
SECTION 1 EMPLOYMENT.
Subject to the terms hereof, the Employer hereby employs Employee, and
Employee hereby accepts such employment. Employee will serve as Chief Operating
Officer of Employer and will be responsible for the operating plans, policies,
and profitability of the total company, subject to the direction of the Chief
Executive Officer, the Board of Directors, or the Executive Committee, with
specific duties to include those matters set forth in Exhibit "A" attached
hereto. Employee agrees to devote his full business time and best efforts to the
performance of such duties and other duties that the Chief Executive Officer or
the Board of Directors of Employer (the "Board of Directors") or the Executive
Committee may assign to Employee from time to time, and will report to the Chief
Executive Officer.
SECTION 2 TERM OF EMPLOYMENT.
The term of Employee's employment hereunder (the "Term") shall be from
May 8, 2002 (the "Effective Date") until termination upon the occurrence of any
of the following events, provided that the Term shall expire on December 31,
2002 if not previously terminated:
(A) The death or total disability of Employee (total
disability meaning the failure to fully perform his normal required services
hereunder for a period of three (3) consecutive months during the Term hereof,
as determined by the Board of Directors, by reason of mental or physical
disability);
(B) The termination by Employer of Employee's employment
hereunder, upon prior written notice to Employee, for "good cause". For purposes
of this Agreement, "good cause" for termination of Employee's employment shall
exist (i) if Employee is convicted of, pleads guilty to, or confesses to any
felony or any act of fraud, misappropriation, or
embezzlement, (ii) if Employee has engaged in a dishonest act to the material
damage or prejudice of Employer or a subsidiary of Employer, or in misconduct or
unlawful or improper activities materially damaging to the business of Employer
or a subsidiary of Employer, or (iii) if Employee fails to comply with the terms
of this Agreement, and, within thirty (30) days after written notice from
Employer of such failure, Employee has not corrected such failure or, having
once received such notice of failure and having so corrected such failure,
Employee at any time thereafter again so fails, provided, that Employee will be
given the opportunity to explain his position in the matter at a meeting of the
Board of Directors of Employer prior to any termination under this clause (iii),
or (iv) if Employee wilfully neglects or breaches his duties or engages in
intentional misconduct in discharging his duties as an officer and employee of
Employer;
(C) The termination of this Agreement by Employee upon at
least ninety (90) days prior written notice;
(D) The termination of this Agreement by Employer without
cause upon at least thirty (30) days prior written notice; or
(E) The termination of this Agreement by mutual written
agreement of Employer and Employee.
XXXXXXX 0X XXXXXXXXX XX XXXX OF EMPLOYMENT.
Employer and Employee will commence discussions and negotiations no
later than September 30, 2002 for an extension of the Term hereunder on the
following terms and will conclude negotiations no later than November 1, 2002:
(A) A one year term for the extension.
(B) Employee would be both Chief Operating Officer and
President of Employer during the renewal term;
(C) Base salary during the renewal term would be
$225,000;
(D) Under such renewal, options under the Plan (as
defined below) would vest as provided in Section 4 below; and
(E) Employee would be entitled to receive a bonus for the
one year renewal term of (i) seventy-five percent (75%) of the base salary,
during the renewal term if the MBOs established for Employee by the Chief
Executive Officer and the Executive Committee of the Board of Directors for
fiscal 2003 are satisfied and (ii) an additional twenty-five percent (25%) of
base salary if such MBOs are exceeded by five percent (5%) or more for fiscal
2003, payable when the financial statements for 2003 are finalized and approved
by the Audit Committee of the Board of Directors.
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SECTION 3 COMPENSATION.
3.1 TERM OF EMPLOYMENT. Employer will provide Employee
with the following salary, expense reimbursement, and additional employee
benefits during the term of employment hereunder:
(A) SALARY. Employee will be paid a salary (the
"Salary") of no less than Two Hundred
Thousand Dollars ($200,000.00) per annum,
less deductions and withholdings required by
applicable law, prorated during the Term.
The Salary shall be paid to Employee in
equal monthly installments (or on such more
frequent basis as other executives of
Employer are compensated).
(B) BONUS. Employee will receive a bonus of
Sixty-Five Thousand Dollars ($65,000.00) if
the MBOs established for Employee by the
Chief Executive Officer and the Executive
Committee of the Board of Directors for the
third and fourth quarters of 2002 are
satisfied. Such bonus will be payable when
the financial statements for the fourth
quarter of 2002 are finalized and approved
by the Audit Committee of the Board of
Directors.
(C) CAR ALLOWANCE. Employer shall provide
Employee with a monthly automobile allowance
of Nine Hundred Dollars ($900.00) with no
reimbursement for any rental car expense.
(D) VACATION. Employee shall receive four (4)
weeks vacation time per calendar year during
the term of this Agreement commencing with
the year 2002 with partial calendar years
prorated. Any unused vacation days in any
calendar year may not be carried over to
subsequent years.
(E) EXPENSES. Employer shall reimburse Employee
for all reasonable and necessary expenses
incurred by Employee at the request of and
on behalf of Employer. Reimbursement
requests will comply with the Employer's
procedures and policies and must be approved
by the Chief Executive Officer.
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(F) BENEFIT PLANS. Employee may participate in
such medical, dental, disability,
hospitalization, life insurance, and other
benefit plans (such as pension and profit
sharing plans) as Employer maintains from
time to time for the benefit of its senior
managers (excluding Xxxxxxxx X. Xxxx and
Xxxxxxx X. Xxxxxxxx, Xx.), on the terms and
subject to the conditions set forth in such
plans, including without limitation
Employer's 401(k) Plan.
(G) COMMUTING EXPENSES AND APARTMENT. Employer
shall provide Employee with a monthly
commute expense allowance of One Thousand
Dollars ($1,000.00) for all expenses
incurred by Employee in commuting from and
to his home in Minnesota. Employer will make
available to Employee its apartment in
Manchester for use by Employee prior to his
permanent move to Georgia.
3.2 EFFECT OF TERMINATION. Except as hereinafter
provided, upon the termination of the employment of Employee hereunder for any
reason, Employee shall be entitled to all compensation and benefits earned or
accrued under Section 3.1 as of the effective date of Termination (the
"Termination Date"), but from and after the Termination Date no additional
compensation or benefits shall be earned by Employee hereunder. If Employee's
employment hereunder is terminated by Employer without good cause after June 30,
2002, Employee shall be deemed to have earned any bonus payable with respect to
the quarter in which the Termination Date occurs on a prorated basis (with the
bonus calculated as of the end of the quarter in which the Termination Date
occurs and with proration through the Termination Date).
If Employee's employment hereunder is terminated by Employer
pursuant to Section 2(d) hereof, then, in addition to any other amount payable
hereunder, Employer shall continue to pay Employee his normal Salary pursuant to
Section 3.1(a) during the Termination Period (as defined below) in periodic
payments (on the same basis as if Employee continued to serve as an employee
hereunder for such period) and Employee shall continue to be eligible to receive
his automobile allowance and to have Employer pay his individual premiums for
his COBRA health insurance benefits during the applicable Termination Period
without any additional expense to Employee. The "Termination Period" shall mean
a period that commences on the Termination Date and continues thereafter through
December 31, 2002.
SECTION 4 OPTIONS UNDER INCENTIVE STOCK PLAN.
The Executive Committee of the Board of Directors of the Employer will
grant to Employee options to purchase 225,000 shares of common stock of Employer
under and subject to Employer's 1998 Stock Incentive Plan (the "Plan"), and
Employer will use its best efforts to finalize such grant on Employee's initial
day of employment hereunder; provided, however, that
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such grant shall be conditioned upon the approval of an increase in the number
of shares authorized under the Plan from 1,400,000 to 6,000,000 shares by the
shareholders of Employer at the 2002 annual meeting of shareholders. Under the
Plan, the option price will be the closing stock price on the day the options
are granted by the Executive Committee. The options will vest on the following
schedule under the Plan: 100,000 shares shall vest and become exercisable under
and subject to the Plan on December 31, 2002 if Employee is an employee of
Employer on such date. In the event that the Term is renewed pursuant to Section
2A above, then the remaining option for 150,000 shares shall vest and become
exercisable under and subject to the Plan in increments as follows: one-third
(_) on December 31, 2003 if Employee is an employee of Employer on such date,
one-third (_) on December 31, 2004 if Employee is an employee of Employer on
such date, and the remaining one-third (_) on December 31, 2005 if Employee is
an employee of Employer on such date.
SECTION 5 NON-COMPETE COVENANTS.
During the twelve (12) month period after Employee's employment with
Employer has ended (for whatever reason), Employee shall not, within the United
States, engage in manufacturing, selling, or distributing medical products that
compete with medical products sold by Employer during the last six (6) months of
Employee's employment with Employer, on behalf of any manufacturer or
distributor whose products compete with Employer's products. During the eighteen
(18) month period after Employee's employment with Employer has ended (for
whatever reason), Employee shall not, on his own behalf or on behalf of others,
hire or solicit for employment any person who at the time of such hiring or
solicitation is an employee of Employer.
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SECTION 6 NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
6.1 TRADE SECRETS. During the term of the Employee's
employment by the Employer and after the termination of such employment, whether
such termination is by the Employee or the Employer, the Employee shall not use
or disclose, or permit any unauthorized person access to, any Trade Secrets
belonging to the Employer or any third party whose Trade Secrets are in the
possession of the Employer.
6.2 CONFIDENTIAL INFORMATION. During the term of the
Employee's employment by the Employer and for a period of two (2) years after
termination of such employment, whether such termination is by the Employee or
by the Employer, the Employee shall not use or disclose, or permit any
unauthorized person access to, any Confidential Information belonging to the
Employer or any third party whose Confidential Information is in the possession
of the Employer.
6.3 DELIVERY OF INFORMATION. Upon request of the Employer
and in any event upon the termination of employment with the Employer, the
Employee shall deliver to the Employer all memoranda, notes, records, tapes,
documentation, disks, manuals, files, or other documents, and all copies
thereof, concerning or containing Confidential Information or Trade Secrets that
are in the Employee's possession, whether made or compiled by the Employee or
furnished to the Employee by the Employer.
6.4 DEFINITION OF TRADE SECRETS. For purposes of this
Agreement, "Trade Secrets" shall refer to the trade secrets of the Employer as
that term is defined in the Official Code of Georgia Annotated, ss.10-1-761, as
amended from time to time. Trade Secrets also include any information described
herein which the Employer obtains from a third party, which Employer or such
third party treats as proprietary or designates as Trade Secrets, whether or not
owned or developed by the Employer.
6.5 DEFINITION OF CONFIDENTIAL INFORMATION. For purposes
of this Agreement, "Confidential Information" shall mean any data or
information, other than Trade Secrets, that is of value to the Employer and is
not generally known to competitors of the Employer and that is treated by the
Employer as confidential (whether or not such material or information is marked
"confidential"). To the extent consistent with the foregoing and to the extent
not Trade Secrets, Confidential Information includes, but is not limited to,
lists of any information about the Employer's executives and employees,
marketing techniques, price lists, pricing policies, business methods,
manufacturing processes and records, regulatory files and information, supplier
and vendor information and contracts, and financial information. Confidential
Information also includes any information described in this paragraph which the
Employer obtains from a third party, which the Employer or the third party
treats as proprietary or designates as Confidential Information, whether or not
owned or developed by the Employer.
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6.6 DEFINITION OF EMPLOYER. For purposes of this Section
6, the term Employer shall include Horizon and its subsidiaries.
6.7 INVENTIONS. Any invention developed by Employee
during the course of his employment while working at Employer shall be the sole
property of Employer, and Employee agrees to execute an appropriate assignment
instrument upon request by Employer transferring all rights in any such
invention to Employer.
SECTION 7 MISCELLANEOUS.
7.1 SEVERABILITY. The covenants in this covenants
independent of one another and as obligations distinct from any other contract
between Employee and Employer. Any claim that Employee may have against Employer
shall not constitute a defense to enforcement by Employer of this Agreement. The
invalidity or unenforceability of any particular provision of this Agreement
shall not affect the other provisions hereof, and this Agreement shall be
construed in all respects as if such unvalid or unenforceable provision were
omitted.
7.2 NOTICES.
EMPLOYER: Horizon Medical Products, Inc.
ATTN: CHIEF EXECUTIVE OFFICER
Seven North Parkway Square
0000 Xxxxxxxxx Xxxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
EMPLOYEE: Xxxxxx X. Xxxxxx
00000 Xxxxxxx Xxxx
Xxxxx Xxxxxx, Xxxxxxxxx 00000
or at such other address or number for a party as shall be specified by like
notice. Any notice which is delivered in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party or its agent.
7.3 BINDING EFFECT. This Agreement inures to the benefit
of, and is binding upon, Employer and its successors and assigns, and Employee,
together with Employee's executor, administrator, personal representative,
heirs, and legatees.
7.4 ENTIRE AGREEMENT. This Agreement is intended by the
parties hereto to be the final expression of their agreement with respect to the
subject matter hereof and is the complete and exclusive statement of the terms
thereof, notwithstanding any representations, statements, or agreements to the
contrary heretofore made. This Agreement supersedes and terminates all prior
employment and compensation agreements, arrangements,
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and understandings between or among Employer and Employee. This Agreement may be
modified only by a written instrument signed by all of the parties hereto.
7.5 GOVERNING LAW. This Agreement shall be deemed to be
made in, and in all respects shall be interpreted, construed, and governed by
and in accordance with, the laws of the State of Georgia. No provision of this
Agreement shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial authority or by any
board of arbitrators by reason of such party or its counsel having or being
deemed to have structured or drafted such provision.
7.6 HEADINGS. The section and paragraph headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
7.7 SPECIFIC PERFORMANCE. Each party hereto hereby agrees
that any remedy at law for any breach of the provisions contained in Section 5
or 6 of this Agreement shall be inadequate and that the other parties hereto
shall be entitled to specific performance and any other appropriate injunctive
relief in addition to any other remedy such party might have under this
Agreement or at law or in equity.
7.8 COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
7.9 DISPARAGEMENT. During the term of this Agreement and
thereafter, Employee shall not disparage Employer or its products, officers,
Directors, or employees, and Employer shall not disparage Employee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
HORIZON MEDICAL PRODUCTS, INC.
By: /s/ Xxxxxxxx X. Xxxx
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Xxxxxxxx X. Xxxx,
Chief Executive Officer
EMPLOYEE:
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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Exhibit "A" to Employment Agreement
Specific duties include the following:
- Achievement of sales and profit objectives for Horizon
- Compliance with the policies and procedures of Horizon
- Utilization and direction of the manufacturing division
- Utilization and direction of sales and marketing of Horizon
- Successful development, introduction, and management of new
products and processes
- Build long-term relationships with employees, customers, and
vendors
