Exhibit 10.43
-------------
PARADIGM MEDICAL INDUSTRIES, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
this 8th day of April, 2003, by and between PARADIGM MEDICAL INDUSTRIES, INC., a
Delaware corporation (the "Company") and XXXXXXX X. XXXXX (the "Employee"), to
be effective as of March 19, 2003 (the "Effective Date").
WITNESSETH:
WHEREAS, the Company desires to employee Employee, and Employee desires
to become employed by the Company;
NOW THEREFORE, In consideration of Employee's employment by the
Company, and the mutual promises and covenants contained in, and the mutual
benefits to be derived from this Agreement, and to set forth and establish the
terms and conditions upon which Employee shall be employed by the Company, the
parties hereto agree as follows:
1. Employment
The Company hereby employs Employee and Employee hereby accepts such
employment, upon the terms and conditions set forth herein.
2. Terms and Conditions of Employment.
(a) Employee shall be employed in the position of President and Chief
Executive Officer of the Company and shall supervise, control and be responsible
for all aspects of the business operations of the Company and its subsidiaries,
including direct supervision of the day- to-day operations of all departments of
the Company and its subsidiaries. Employee shall also perform such related
services and duties for the Company as may be assigned or delegated to him from
time to time by the Board of Directors.
(b) Throughout his employment hereunder, Employee shall devote his full
time, energy and skill to perform the duties of his employment (reasonable
vacations in accordance with this Agreement and reasonable absences due to
illness excepted), shall faithfully and industriously perform such duties, and
shall use his best efforts to follow and implement all management policies and
decisions of the Board of Directors.
1
3. Compensation and Benefits.
As the entire consideration for the services to be performed and the
obligations incurred by Employee hereunder, and subject to the terms and
conditions hereof, during the Term of this Agreement Employee shall be entitled
to the following:
(a) Salary. Commencing from the effective date of this Agreement, the
Company shall pay Employee an annual salary ("Annual Salary") of $175,000. Such
Annual Salary, which shall be pro-rated for any partial employment period, will
be payable in equal bi-monthly installments or at such other intervals as may be
established for the Company's customary pay schedule. The Annual Salary is
subject to such incremental increases as the Board of Directors may determine
from time to time in its sole discretion. The first review of the Annual Salary
by the Board of Directors shall be as of September 30, 2003.
(b) Bonus. As further compensation to Employee, and as further
consideration for his entering into this Agreement and the services to be
rendered by Employee hereunder, the Company may pay Employee annually following
the end of each fiscal year, a cash bonus. The Company's Board of Directors, in
its sole discretion, shall determine the amount of any bonuses and the terms and
conditions under which Employee shall receive the bonus. Such bonus shall be
paid to Employee upon the satisfaction by the Company of the performance
objectives that shall be determined by the Company's Board of Directors.
Employee shall have the right to prepare and submit a proposed bonus plan to the
Board of Directors for its review and consideration. Without limiting the
generality of the foregoing, one of the performance objectives shall be an
increase in the earnings per share (EPS) of the Company over the previous year's
earnings per share (EPS). Employee shall also have the right to direct any
portion of the bonus to be paid into a deferred compensation fund.
(c) Incentive Stock Option Plan. Employe shall be entitled to
participate in the Company's Company's 1995 Stock Incentive Plan to the extent
of Employee's eligibility under such plan. Upon execution of this Agreement, the
Company shall cause to be issued to Employee stock options for 1,000,000 shares
of the Company's common stock pursuant to the terms and conditions of said plan.
However, options for 800,000 shares of the Company's common stock shall vest
immediately and be exercisable at $.16 per share;options for an additional
100,000 shares of the Company's common stock shall vest on March 19, 2004, and
be exercisable at $.16 per share; and options for an additional 100,000 shares
of the Company's common stock shall vest on March 19, 2005, and be exercisable
at $.16 per share.
(d) Additional Benefits. Employee shall also be entitled to
participate, to the extent of Employee's eligibility, in any employee benefit
plans made available by the Company to its employees during the Term of this
Agreement, including, without limitation, such profit sharing plans, 401K and
cafeteria plans, and health, life, hospitalization, dental, disability or other
2
insurance plans as may be in effect from time to time. Such participation shall
be in accordance with the terms established from time to time by the Company for
individual participation in any such plans.
(e) Life Insurance. The Company shall provide Employee with a life
insurance policy in an amount equal to twice his Annual Salary.
(f) Vacation, Sick Leave, and Holidays. Employee shall be entitled to
four weeks of vacation, and also sick leave and holidays at full pay in
accordance with the Company's policies established and in effect from time to
time.
(g) Deductions. The Company shall have the right to deduct and withhold
from the compensation due to Employee hereunder, including Employee's Annual
Salary and Compensation Bonus, if any, such taxes and other amounts as may be
customary or required by law.
4. Business Expenses.
The Company shall promptly reimburse Employee for all reasonable
out-of-pocket business expenses incurred in performing Employee's duties
hereunder, in accordance with the Company's policies with respect thereto in
effect from time to time (including without limitation policies regarding prior
consent for significant expenditures), provided that Employee promptly furnishes
to the Company adequate records and other documentary evidence required by all
federal and state statutes and regulations issued by the appropriate taxing
authorities for the substantiation of each such business expense as a deduction
on the federal and state income tax returns of the Company.
5. Term and Termination.
(a) Term. The Term of this Agreement shall commence on the Effective
Date of this Agreement, and subject to earlier termination or extension as
provided below, and except for the provisions of this Agreement and the Exhibits
hereto which, by their terms, continue in force beyond the termination hereof,
the Term of this Agreement shall end on the third anniversary of the Effective
Date of this Agreement (March 19, 2006).
(b) Termination on Death and for Cause. This Agreement, and Employee's
employment hereunder, shall terminate upon Employee's death and is otherwise
immediately terminable for cause (as defined below) upon written notice from the
Company to Employee. As used in this Agreement, "cause" shall include: (i)
habitual neglect of or deliberate or intentional refusal to perform any of
Employee's duties or obligations under this Agreement or to follow Company
policies or procedures; (ii) fraudulent or criminal activities; (iii) any
3
grossly negligent or dishonest or unethical activity; (iv) breach of fiduciary
duty, deliberate breach of Company rules resulting in loss or damage to the
Company, or unauthorized disclosure of Company trade secrets or confidential
information; or (v) if Employee fails to fulfill the performance goals and
objectives, which shall be mutually determined by Employee and the Board of
Directors.
(c) Termination for Disability. The Company's Board of Directors may
terminate this Agreement, upon written notice to Employee, for the "disability"
(as defined below) of Employee at the expiration of a consecutive four week
period of disability if the Board of Directors determines in its sole discretion
that Employee's disability will prevent Employee from substantially performing
Employee's duties hereunder. As used in this Agreement, "disability" shall be
defined as (i) Employee's inability, by reason of physical or mental illness or
other cause, to perform substantially Employee's duties hereunder; or (ii), in
the discretion of the Board of Directors, as it is defined in any disability
insurance policy in effect at the Company during the time in question. Employee
shall receive full compensation, benefits, and reimbursement of expenses
pursuant to the terms of this Agreement from the date disability begins until
the date Employee receives notice of termination under this paragraph or until
Employee begins to receive disability benefits pursuant to a Company disability
insurance policy, whichever occurs first.
(d) Mutual Voluntary Termination. In the event the parties mutually
agree in writing to terminate this Agreement, Employee agrees, at the Company's
request, to continue providing services for a requested period of time up to,
but not more than, 30 days after such voluntary termination (the "Transition
Period") to facilitate transition. Employee shall be an independent contractor
and not an employee during the Transition Period and shall be available to
assist in the transition during such period. During the Transition Period,
Employee shall receive compensation equal to 100% of the Salary at the time of
the voluntary termination. Payment of such compensation shall be made at least
monthly. It is understood and agreed that Employee, during the Transition
Period, may be seeking other opportunities and will not be devoting 100 percent
of his time to the affairs of the Company. The Company may elect to terminate
the independent contractor relationship with Employee prior to the end of the
Termination Period once Employee accepts a full time position with another
company.
(e) Effect of Termination. In the event Employee's employment is
terminated hereunder, all obligations of the Company and all obligations of
Employee shall cease, except as otherwise provided herein. Upon such
termination, Employee or Employee's representative or estate shall be entitled
to receive only the compensation, benefits, and reimbursement earned or accrued
by Employee under the terms of this Agreement prior to the date of termination
computed pro rata up to and including the date of termination, but shall not be
entitled to any further compensation, benefits, or reimbursement from such date,
unless otherwise mutually agreed in writing by the parties.
4
6. Covenant Not to Compete
(a) Covenant. Employee hereby covenants and agrees that during the Term
of this Agreement and for a period of two years thereafter, he will not, except
as a director, officer, employee or consultant of the Company, or any subsidiary
or affiliate of the Company, directly or indirectly own, manage, operate, join,
control, or participate in the ownership, management, operation or control of,
or be connected with (as director, officer, employee, consultant, agent,
independent contractor of otherwise) in any other manner with any business
engaged in the Defined Business (as described below) which is the same or
substantially similar in nature to the business engaged in by the Company in the
State of Utah, and each of the other states in the United States, and each
foreign country, in which the Company may engage (whether directly or indirectly
through subsidiaries, affiliates, franchisees, licensees, representatives,
agents or otherwise) during the term of this Agreement and Employee's employment
with the Company.
(b) Definition of Defined Business. As used herein, the term "Defined
Business" shall mean the business of ophthalmic instrumentation and engaging in
the business of ophthalmic instrumentation and engaging in any business
currently engaged in by the Company or contemplated by the Company.
(c) Non-Solicitation Agreement. Employee shall not, directly or
indirectly, employ, solicit for employment, or advise or recommend to any other
person that they employ or solicit for employment, any employee of the Company
(or any subsidiary or affiliate), during the Term of this Agreement and
Employee's employment with the Company and for a term of two years thereafter;
provided however, that this paragraph shall not preclude Employee from giving an
employment reference at the request of any employee of the Company or at the
request of a prospective employer of such employee.
(d) Conflicting Employment. Employee shal not, during the Term of his
employment with the Company, engage in any other employment, occupation,
consulting or other business activity directly related to the business in which
the Company is now involved or becomes involved during the Term of his
employment, nor will Employee engage in any other activities that conflict with
his obligations to the Company.
(e) Unique and Essential Nature of Service of Employee. Employee
understands and acknowledges that the Company is entering into this Agreement in
reliance upon the unique and essential nature of the personal services Employee
is to perform as an employee of the Company and that irreparable injury would
befall the Company or its subsidiaries or affiliates should Employee serve a
competitor of, or compete, with the Company or any of its subsidiaries or
affiliates.
5
(f) Injunctive and Equitable Relief. Employee covenants and agrees that
the Company's remedy at law for any breach or violation of the provisions of
this Paragraph 6 are inadequate and that, in the event of any such breach or
violation, the Company shall be entitled to injunctive relief in addition to any
other remedy, at law or in equity, to which it may be entitled.
(g) Acknowledgment of Reasonableness of Restrictions. Employee
specifically acknowledges and agrees that the two-year post-employment
limitation upon his activities as specified above, together with the
geographical limitations set forth above, are reasonable limitations as to time
and place upon Employee's post-employment activities and that the restrictions
are necessary to preserve, promote and protect the business, accounts and
good-will of the Company and impose no greater restraint than is reasonably
necessary to secure such protection.
(h) Limitation on Scope or Duration. In the event that any provision of
this Paragraph 6 shall be held invalid or unenforceable by a court of competent
jurisdiction by reason of the geographic or business scope or the duration
thereof, such invalidity or unenforceability shall attach only to the scope or
duration of such provision and shall not affect or render invalid or
unenforceable any other provision of this Paragraph 6 and, to the fullest extent
permitted by law, this Paragraph shall be construed as if the geographic or
business scope or the duration of such provision had been more narrowly drafted
so as not to be invalid or unenforceable but rather to provide the broadest
protection to the Company permitted by law.
7. Confidential Information Agreement.
Employee agrees that Employee will keep confidential and will not,
during or after this Agreement, disclose, divulge, furnish or make accessible to
any person, firm, corporation or other business entity, any information, trade
secrets, customer information, marketing information, sales information, cost
information, technical data, know-how, secret processes, discoveries, methods,
patentable or unpatentable ideas, formulae, processing techniques or technical
operations relating to the business, business practices, methods, products,
processes, equipment or any confidential or secret aspect of the business of the
Company (collectively, the "Confidential Information") without the prior written
consent of the Company. Upon the termination of this Agreement for any reason,
and at any time prior thereto upon request by the Company, Employee shall return
to the Company all written records of any Confidential Information, together
with any and all copies of such records, in Employee's possession. Any
Confidential Information which Employee may conceive of or make during the Term
of this Agreement shall be and remain the property of the Company. Employee
agrees promptly to communicate and disclose all such Confidential Information to
the Company and to execute and deliver to the Company any instruments deemed
necessary by the Company to effect disclosure and assignment thereof to it.
6
8. Assignment.
This Agreement is for the unique personal services of Employee and is
not assignable or delegable in whole or in part by Employee without the consent
of the Board of Directors of the Company. This Agreement may be assigned or
delegated in whole or in part by the Company and, in such case, the terms of
this Agreement shall inure to the benefit of, be assumed by, and be binding upon
the entity to which this Agreement is assigned.
9. Inventions
(a) Disclosure of Inventions. Employee hereby agrees that if he
conceives, learns, makes, or first reduces to practice, either alone or jointly
with others, any inventions, improvements, original works of authorship,
formulas, processes, computer programs, techniques, know-how, or data relating
to the Defined Business (hereinafter referred to collectively as "Inventions")
while he is employed by the Company, he will promptly disclose such Inventions
to the Company or to any person designated by it. Notwithstanding the fact that
Employee may determine that the Company has no right to such Invention, he shall
nevertheless promptly disclose any such Invention to the Company or to any
person designated by it upon reasonable request.
(b) Ownership, Assignment, Assistance, and Power of Attorney. All
Inventions related to ophthalmic instrumentation shall be the sole and exclusive
property of the Company, and the Company shall have the right to use and to
apply for patents, copyrights, or other statutory or common law protection for
such Inventions in any country. Employee hereby assigns to the Company any
rights which he may acquire in such Inventions. Furthermore, Employee agrees to
assist the Company in every proper way at the Company's expense to obtain
patents, copyrights, and other statutory common law protections for such
Inventions in any country and to enforce such rights from time to time.
Specifically, Employee agrees to execute all documents as the Company may desire
for use in applying for and in obtaining or enforcing such patents, copyrights,
and other statutory or common law protections together with any assignments
thereof to the Company or to any person designated by the Company. In the event
the Company is unable for any reason whatsoever to secure Employee's signature
to any lawful document required to apply for or to enforce any patent,
copyright, or other statutory or common law protections for such Inventions,
Employee hereby irrevocably designates and appoints the Company and its duly
authorized officers and agents as his agents and attorneys-in-fact to act in his
stead to execute such documents and to do such other lawful and necessary acts
to further the issuance and protection of such patents, copyrights, or other
statutory or common law protection, such documents or such acts to have the same
legal force and effect as if such documents were executed by or such acts were
done by Employee.
7
10. Waiver or Modification.
Any waiver, modification or amendment of any provision of this
Agreement shall be effective only if in writing in a document that specifically
refers to this Agreement and such document is signed by the party against whom
enforcement of any waiver, change, modification, extension, or discharge is
sought. The waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a waiver of
any other provision hereof or any subsequent breach of the same provision
hereof.
11. Severability.
If any provision of this Agreement is found to be unenforceable by a
court of competent jurisdiction, the remaining provisions shall nevertheless
remain in full force and effect.
12. Notices.
Any notice required or permitted hereunder to be given by either party
shall be in writing and shall be delivered personally or sent by certified or
registered mail, postage prepaid, or by private courier, or by telex or telegram
to the party to the address set forth below or to such other address as either
party may designate from time to time according to the terms of this paragraph:
To Employee at: Xxxxxxx X. Xxxxx
X.X. Xxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
To the Company at: Paradigm Medical Industries, Inc.
0000 Xxxxx 0000 Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
With a copy to: Mackey Price & Xxxxxxxx
000 Xxxxxxxx Xxxxx II
00 Xxxx 000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
A notice delivered personally shall be effective upon receipt. A notice
sent by facsimile or telegram shall be effective 24 hours after the dispatch
thereof. A notice delivered by mail or by private courier shall be effective on
the 3rd day after the day of mailing.
8
13. Attorney's Fees.
In the event of any action at law or equity to enforce or interpret the
terms of this Agreement, the prevailing party shall be entitled to reasonable
attorney's fees and court costs in addition to any other relief to which such
party may be entitled.
14. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Utah applicable to contracts entered into and to be
performed entirely within such State.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first set forth above.
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
THE COMPANY:
PARADIGM MEDICAL INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Xxxxxxx X. Xxxxxx
Title: Chairman of the Board
9
