Exhibit 10.16
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), entered into as of the 6th
day of January, 1997 by and between Medical Industries of America (formerly
Heart Labs of America, Inc.), a Florida corporation (hereinafter referred to as
"Employer"), and Xxxx X. Xxxxxxx ("Employee").
W I T N E S S E T H:
WHEREAS, Employer and Employee wish to enter into an employment agreement.
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledge, the parties hereto
agree as follows:
1. EMPLOYMENT. Employer hereby agrees to employ Employee and
Employee hereby accepts employment with Employer upon the terms and
conditions hereinafter set forth.
2. DUTIES. Subject to the power of the Board of Directors of Employer to
elect and remove officers, Employee will serve as President and Chief Operating
Officer and will faithfully and diligently perform the services and functions
relating to such offices or otherwise reasonable incident to such offices,
provided that all such services and functions will be reasonable and within
Employee's area of expertise. Employee will during the term of this Agreement
(or any extension thereof), devote his full business time, attention and skills
and best efforts to the promotion of the business of Employer. The foregoing
will not be construed as preventing Employee from making investments in other
business or enterprises provided that (a) Employee agrees not to become engaged
in any other business activity that interferes with his ability to discharge his
duties and responsibilities to Employer and (b) Employee does not violate any
other provision of this Agreement.
3. TERM. The term of this Agreement will commence as of the date hereof
and will end on that date in the year 2002, unless earlier terminated by either
party pursuant to the terms hereof. The term of this agreement is referred to
herein as the "Term". Assuming all conditions of this Agreement have been
satisfied and there has been no breach of the Agreement during its initial term,
Employer and Employee may mutually extend the term for an additional one (1)
year term at their election ("Extended Term").
4. COMPENSATION. As compensation for the services rendered under
this Agreement, Employee will be entitled to receive the following:
(a) SALARY Commencing upon the date of this Agreement, Employee will
be paid a minimum annual salary of $150,000 per year, payable in accordance with
the then
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current payroll policies of Employer or as otherwise agreed to by the parties
(the "Salary), subject to adjustment in accordance with subparagraph (g) hereof.
At any time the Salary may be increased for the remaining portion of the term if
so determined by the Board of Directors of Employer after a review of Employee's
performance of his duties.
(b) OPTIONS. See Section 20.
(c) EXPENSES. Upon submission of a detailed statement and reasonable
documentation, Employer will reimburse Employee in the same manner as other
executive officers for all reasonable and necessary or appropriate out-of-pocket
travel and other expenses incurred by Employee in rendering services required
under this Agreement.
(d) BENEFITS, INSURANCE.
(i) MEDICAL DENTAL AND VISION BENEFITS. During this Agreement,
Employee and his dependents will be entitled to receive such group medical
dental and vision benefits as Employer may provide to its other employees,
provided such coverage is reasonably available, or be reimbursed if Employee is
carrying or has to carry his own similar insurance.
(ii) BENEFIT PLANS. The Employee will be entitled to
participate in any benefit plan or program of the Employer which may
currently be in place or implemented in the future.
(iii) OTHER BENEFITS. During the Term, Employee will be
entitled to receive, in addition to and not in lieu of base salary, bonus or
other compensation, such as other benefits as Employer may provide for its
officers in the future.
(iv) DISABILITY INSURANCE. Up to $60,000.
(e) VACATION. Employee will be entitled to up to (4) weeks of
paid vacation per year.
(f) AUTOMOBILE. The Employer shall provide an auto and usual
auto expenses not to exceed $1,000 per month..
(g) Salary. Salary to be increased by minimum of CPI plus increases
based on performance, increase in earnings and revenues approved by the
compensation committee.
5. CONFIDENTIALITY. In the course of the performance of Employee's duties
hereunder, Employee recognizes and acknowledges that Employee may have access to
certain confidential and proprietary information of Employer or any of its
affiliates. Without the prior written consent of Employer, Employee shall not
disclose any such confidential or proprietary information to any person or firm,
corporation, association, or other entity for any reason or purpose whatsoever,
and shall not use such information, directly or indirectly, for Employee's
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own behalf or on behalf of any other party. Employee agrees and affirms that
all such information is the sole property of Employer and that at the
termination and/or expiration of this Agreement, at Employer's written
request, Employee shall promptly return to Employer any and all such information
so requested by Employer.
The provisions of this Section 5 shall not, however, prohibit Employee
from disclosing to others or using in any manner information that:
(a) has been published or has become part of the public domain other
than by acts, omissions or fault of Employee;
(b) has been published or has become part of the public domain other
than by acts, omissions or fault of Employee;
(c) was in the possession of Employee prior to obtaining such
information from Employer in connection with the performance of this
Agreement; or
(d) is required to be disclosed by law.
6. INDEMNIFICATION. The Employer shall to the full extent permitted by law
indemnify, defend and hold harmless Employee from and against any and all
claims, demands, liabilities, damages, losses and expenses (including reasonable
attorney's fees, court costs and disbursements) arising out of the performance
by him of his duties hereunder except in the case of his willful misconduct and
will carry directors and officers' insurance of $3,000,000 with $500,000
deductible.
7. TERMINATION. This Agreement and the employment relationship
created hereby will terminate upon the occurrence of any of the following
events:
A. TERMINATION WITHOUT CAUSE BY THE COMPANY. The Company may terminate the
Employee's employment pursuant to the terms of this Agreement without cause by
written notice to the Employee. Such termination will become effective upon the
date specified in such notice, provided that such date is at least 60 days from
the date of such notice. In the event of such termination, the Company shall pay
the Employee all salary due for the remainder of the employment term and all
stock options shall vest immediately at the highest range (Section 20). The
Company shall pay the Employee an amount equal to a minimum of 24 months salary
plus vesting of all stock options Such compensation shall be paid at the same
dates due to be paid as if this agreement were still in effect.
B. DEATH OR DISABILITY. This Agreement and the obligations
hereunder will terminate upon the death or disability of the Employee. For
purposes of this Section 7(C), "Disability" shall mean for a period of six
months in any twelve month period the Employee is incapable of
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substantially fulfilling the duties set forth in Section 2 of this Agreement
because of physical, mental or emotional incapacity resulting from an injury,
sickness or disease. Upon any such termination upon death or disability, the
Employer will pay the Employee or his legal representative, as the case may be,
his annual salary to the end of the agreement, but in no case
less than one year. at such time pursuant to Section 4 through the date of
such termination of employment all vested options become exercised.
C. CONTINUING EFFECT. Notwithstanding, any termination of the
Employee's employment as provided in this Section 7, the provisions of
Section 5 shall remain in full force and effect.
D. CONSIDERATION. The payments (if any) required to be paid by
the Employer to Employee pursuant to Section 7 shall be in full and complete
satisfaction of any and all obligations owing to Employee under this
Agreement.
8. WAIVER OF BREACH. The waiver by any party hereto of a breach of
any provision of this Agreement will not operate or be construed as a waiver
of any subsequent breach by any party.
9. COSTS. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party
will be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which he or it may be
entitled.
10. NOTICES. Any notices,demands, requests, approvals and other
communications to be given under this agreement by either party to the other
will be deemed to have been duly given in writing and personally delivered or
within two (2) days if sent by mail, registered or certified, postage prepaid
with return receipt requested as follows:
If to Employer: Medical Industries of America
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
If to Employee: Xxxx X. Xxxxxxx
00000 Xxxxx Xxx Xxxxx
Xxxx Xxxxx, XX 00000
Notices delivered personally will be deemed communicated as of actual receipt.
11. MEDICAL BENEFITS for wife and family until age 65.
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12. ENTIRE AGREEMENT. This Agreement and the agreements contemplated
hereby constitute the entire agreement of the parties regarding the subject
matter hereof, and supersede all prior agreements and understanding, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof.
13. GOVERNING LAW. This Agreement and the rights and obligations of
the parties will
be governed by and construed and enforced in accordance with the substantive
laws (but not the rules governing conflicts of laws) of the State of Florida.
14. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
this Agreement, such provision will be fully severable and this Agreement will
be construed and enforced as if such illegal, invalid or unenforceable provision
never comprised a part hereof; and the remaining provisions hereof will remain
in full force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom. Furthermore, in lieu of
such illegal, invalid or unenforceable provision there will be added
automatically as part of this Agreement a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
16. CAPTIONS. The captions in this Agreement are for convenience of
reference only and will not limit or otherwise affect any of the terms or
provisions hereof.
17. GENDER AND NUMBER. When the context requires the gender of
all words used herein will include the masculine, feminine and neuter and the
number of all words will include the singular and plural.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument, but only one of which
need be produced.
19. OFFICER'S LIFE INSURANCE FOR BENEFIT OF COMPANY. Life insurance
policy for $1,000,000 with company as beneficiary. The company will also
provide a whole life insurance policy for the individual for his
beneficiaries in the amount of $1,000,000.
20. STOCK OPTIONS
YEAR OF VESTING # OF OPTIONS
--------------- ------------
For 1997 Signing Bonus Options 250,000
For 1997 150,000-200,000
For 1998 175,000-225,000
For 1999 200,000-250,000
For 2000 250,000-250,000
---------------
Total 1997-2000 775,000-925,000
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This will be part of Company's Stock Option Plan. The option price as of January
9, 1997 was $.50 per share, market value at date of agreement.
Upon sale of business or change in control all options vest and are exercisable.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
EMPLOYER:
MEDICAL INDUSTRIES OF AMERICA, INC.
BY: /S/ XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx
Chief Executive Officer
EMPLOYEE:
/S/ XXXX X. XXXXXXX
Xxxx X. Xxxxxxx
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