Exhibit 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), effective as of November 23, 2004,
is entered into, by and between MedAire, Inc., a Nevada corporation ("MedAire")
and Xxxxx X. Xxxx ("Xxxx").
In consideration of Lara's continued employment by MedAire and the promises
set forth below, the sufficiency of which is hereby acknowledged, the parties
agree as follows:
1. Duties. MedAire agrees to employ Lara as its President and Chief
Operating Officer under the terms of this Agreement, and Lara accepts such
employment under the terms of this Agreement. During the term of this Agreement,
Lara agrees to devote his best efforts and entire business time to furthering
the interests of MedAire; to devote the necessary time and attention to his
duties; and to perform such duties to the best of his abilities. During the term
of this Agreement, Lara agrees that he shall maintain loyalty to MedAire; shall
take no action that would be injurious of MedAire's interests; and will comply
with all rules, policies and regulations of MedAire. See Exhibit A for
description of Lara's duties as President and Chief Operating Officer.
2. Employment Period.
(a) Initial Term: Lara shall be employed by MedAire from November 23,
2004, to December 31, 2007 (the "Initial Term"), unless sooner terminated in
accordance with the terms of this Agreement.
(b) Automatic Renewal: This Agreement will be renewed automatically
for additional one (1) year periods (each a "Renewal Term"), unless either party
serves written notice of an intent not to renew this Agreement at least six (6)
months before the end of the Initial Term or any subsequent Renewal Term.
(c) Termination For Cause: Notwithstanding any other section of this
Agreement, MedAire may terminate Lara's employment immediately by written notice
to Lara if the Board of Directors of MedAire determines that there is cause for
termination. A determination of the Board of Directors that cause exists to
terminate Lara's employment shall be conclusive. For the purpose of this
Subsection 2(c), "cause" is defined to be any of the following: (i) any act or
omission by Lara which constitutes dishonesty, disloyalty, fraud, deceit, gross
negligence, willful misconduct or recklessness, and which is material and
directly or indirectly detrimental to MedAire's best interests; (ii) Lara's
insubordination in any material respect in the performance of the duties and
responsibilities of his position in accordance with the legal directives of the
Chief Executive Officer or the Board of Directors of MedAire; (iii) Lara's gross
inattention to, gross neglect of, or any other material failure to competently
perform any assigned duties or follow reasonable policies or directives after
receiving thirty (30) days' written notice and opportunity to cure; (iv) any act
or omission by Lara that constitutes a felony under the laws of the state of
Arizona or the United States; or (v) any material breach of this Agreement by
Lara. In the event of termination for cause, Lara shall only be entitled to
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receive salary and benefits accrued through the date of termination.
Notwithstanding the foregoing and for the avoidance of doubt, in the event of
disagreement between Lara and the Chief Executive Officer regarding Lara's
duties or the performance thereof which are not resolved by them, it shall not
be considered insubordination for Lara to bring such matter to the attention of
the Board of Directors for resolution.
(d) Death or Disability: The terms of this Agreement shall expire upon
Lara's death or disability. For purposes of this Subsection 2(d), Lara shall be
deemed disabled if due to Lara's physical or mental condition and with or
without reasonable accommodation to the extent required under the Americans With
Disabilities Act, he is unable to perform, on a full-time basis, the regular
activities of his employment for (i) a period exceeding three (3) consecutive
months, or (ii) a total of 14 weeks during any consecutive 12-month period;
provided that authorized vacations or other leaves of absence shall not be
counted. The date of the disability shall be the date on which the earlier of
the requirements stated in (i) or (ii) of this Subsection 2(d) are satisfied.
Upon disability or death of Lara during the term of this Agreement, Lara shall
only be entitled to receive salary and benefits accrued through the date of
termination; provided however that MedAire shall continue to provide to Lara
and/or his eligible dependents for a period of six (6) months, at MedAire's sole
expense, the same level of health insurance as was in effect at the time of the
disability or death of Lara.
(e) Termination Without Cause: MedAire and Lara acknowledge and agree
that either MedAire or Lara may terminate the employment relationship for any
reason or no reason and without cause by serving upon the other party written
notice of an intent to terminate this Agreement at least thirty (30) days prior
to the effective termination date. If this Agreement is terminated by MedAire
without cause, and other than as a result of the death or disability (as
described in Section 2(d) above) of Lara or as provided in Subsection 2(f) or
Section 8 hereof, (i) Lara shall be entitled to receive payments of his base
salary for a period of twelve (12) months from the date of termination, (ii)
after a period of 12 months from the date of employment, Lara shall vest as to
any unvested shares subject to the equity participation program described in
Exhibit B as of the date of termination in an amount equal to the shares subject
to such equity participation program in the year of termination regardless of
any vesting conditions (including service, performance, or otherwise) related to
such year described in Exhibit B, and (iii) MedAire shall maintain in effect for
Lara and his eligible beneficiaries, at MedAire's sole expense, Lara's benefits
pursuant to MedAire benefit plans in which he was entitled to participate
immediately prior to such termination for a period of 12 months, which period
shall be counted as a part of any COBRA benefit eligibility available to Lara.
If Lara's continued participation is not permitted under the general terms and
provisions of MedAire's benefit plans, MedAire shall, at MedAire's sole expense,
arrange to provide Lara with benefits for a period of twelve months
substantially equivalent to those which he was entitled to receive under such
plans. For purposes of this Subsection 2(e), termination by MedAire without
cause shall be deemed to include Lara's resignation as the result of a
significant diminution in his position, duties or responsibilities, or the
assignment to him of duties and responsibilities inconsistent with the position
of President and Chief Operating Officer.
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(f) Background Check; Drug Screening: As soon as practicable, but in
any event not later than ninety (90) days after the date hereof, MedAire shall
complete a background check of Lara, and Lara shall submit to a drug screening
test, in accordance with MedAire's standard hiring policies. If the results of
such background check or drug screening test are not reasonably satisfactory to
MedAire, MedAire may terminate this Agreement immediately by written notice to
Lara without any further obligation other than with respect to salary and
benefits accrued through the date of termination.
3. Compensation, Benefits And Expenses.
(a) Salary: During the Initial Term of this Agreement, MedAire shall
pay Lara a base salary of Two Hundred Ten Thousand Dollars and No Cents
($210,000.00) per year, subject to applicable withholdings, and payable in
accordance with MedAire's payroll practices in effect from time to time.
Compensation will be reviewed from time to time, but at least annually, by the
Compensation Committee of the MedAire Board of Directors. If this Agreement is
renewed pursuant to Subsection 2(b), the then current salary shall be reviewed
by the Compensation Committee of the MedAire Board of Directors.
(i) Incentive Compensation: Commencing with the Initial Term,
Lara shall be eligible to participate in the MedAire Bonus Plan for Senior
Managers with the exception of the equity awards. Lara's Equity Participation is
covered in section 3. (a) (ii) below. This incentive compensation program is as
defined and approved by the Compensation Committee of the MedAire Board of
Directors on an annual basis.
(ii) Equity Participation: An equity participation program for
Lara is a part of this Agreement. The terms of such equity participation program
have been determined by the Board of Directors and are set forth on Exhibit B.
Notwithstanding the foregoing, the parties acknowledge and agree that the terms
of Lara's equity participation program are subject to regulations of the
Australian Stock Exchange. MedAire shall use its best efforts to obtain such
approval as soon as reasonably practicable.
(b) Benefits: MedAire shall provide Lara all benefits, including
health insurance, life insurance up to $100,000 effective January 1, 2005, and
vacation (per MedAire's policy vacation is currently set at three (3) weeks per
year) which MedAire in its sole and absolute discretion may, from time to time,
provide to its employees of Lara's classification.
(c) Automobile Allowance: MedAire shall provide Lara an automobile
allowance equal to Five Hundred Dollars and No Cents ($500.00) per month.
(d) Relocation Allowance: MedAire shall provide Lara with a relocation
allowance on the terms set forth on Exhibit C.
4. Disclosure of Information. During the course of his employment, Lara
will become exposed to a substantial amount of confidential and proprietary
information
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concerning MedAire and its operations, including, but not limited to financial
information, annual reports, audited and unaudited financial reports,
operational budgets and strategies, methods of operation, patient lists, patient
treatment information, strategic plans, business plans, marketing plans and
strategies, new business strategies, merger and acquisition strategies,
management systems programs, computer systems, personnel and compensation
information and payroll data, and other such reports, documents or information
(collectively, the "Confidential Information"). Lara acknowledges that the
Confidential Information is the property of MedAire and a valuable business
asset, which MedAire wishes to keep secret to protect its legitimate business
interests. Accordingly, Lara promises that, during the term of his employment
with MedAire and after the expiration or termination thereof, for any reason or
no reason, he will not use the Confidential Information for the benefit of
himself or any other party other than MedAire, and that he will not disclose the
Confidential Information to any third party, in whole or in part, in any manner
either directly or indirectly. Lara further agrees that, following the
expiration or termination of his employment with MedAire, for any reason or no
reason, he will not make or retain copies of the Confidential Information in any
form or manner whatsoever (including computer printouts, computer tapes, floppy
disks, CD roms, etc.). Excluded from this Agreement is information that is or
becomes known to the general public through no act or omission by Lara or that
the Chief Executive Officer of MedAire provides prior written consents to be
disclosed. The provisions of this Section 4 shall survive termination of this
Agreement.
5. Non-Competition. During the term of this Agreement and for a period of
two (2) years thereafter, Lara shall not, directly or indirectly, alone or as a
partner, joint venturer, officer, director, member, employee, consultant, agent,
independent contractor or stockholder, own, manage, operate, control, be
employed by, engage or participate in any manner in any business or entity
engaged in competition with any aspect of MedAire's business as conducted or a s
contemplated to be conducted at any time during the term of this Agreement. The
provisions of this Section 5 shall survive termination of this Agreement.
6. Arbitration. Any controversy or claim between the parties to this
Agreement, arising out of the employment relationship, or claims of employment
discrimination, shall be resolved through arbitration administered by the
American Arbitration Association under its National Rules for the Resolution of
Employment Disputes and judgment upon the award rendered by the arbitrator(s)
may be entered in any court having jurisdiction thereof.
7. Assignment. Lara understands and agrees that his obligations under this
Agreement are personal in nature and, as a result, Lara may not assign his
rights or delegate his duties under this Agreement. Lara further understands and
agrees that MedAire may assign all of its rights and obligations under this
Agreement to any person or entity without notice to, or the consent of, Lara.
8. Lara Equity Investment. In consideration of the covenants of MedAire
hereunder, Lara agrees to make purchases of MedAire common stock at prevailing
market prices in the total aggregate investment amount of at least $50,000 and
up to
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$100,000 as soon as practicable (a) taking into consideration timing and volume
limitations on executive officer purchases under applicable securities rules and
company policies as determined by the Chief Executive Officer of MedAire and (b)
at such times and in such amounts as the Chief Executive Officer of MedAire
determines will not have a material affect on the share price of MedAire common
stock. For the avoidance of doubt it is the intent of the parties that Lara
shall make such purchases as soon as practicable in 2005 but that in any case
Lara shall continue to make purchases within the limitations described in the
preceding sentence until he has invested at least $50,000. In the event that as
of December 31, 2005 Lara has had sufficient opportunities to make such
purchases in the amount of at least $50,000 as certified by the Chief Executive
Officer to Lara in writing and Lara has failed to do so, MedAire shall be
entitled to immediately terminate this Agreement by written notice to Lara,
without any further obligation to Lara other than with respect to salary and
benefits accrued through the date of termination.
9. Miscellaneous.
(a) Controlling Law, Venue: This Agreement shall be construed and
enforced in accordance with the laws of the State of Arizona. The parties agree
that the proper venue for any dispute arising out of or relating to this
Agreement shall exist only in either of the two following forums: (i) Arizona
Superior Court, Maricopa County; (ii) United States District Court for the
District of Arizona, Phoenix Division.
(b) Voluntary Agreement: Lara represents and warrants that he has been
afforded a reasonable opportunity to review this Agreement and discuss it with
an attorney of his choice. Lara represents and warrants that he fully
understands the terms and conditions specified in the Agreement, and that he
knowingly and voluntarily enters into this Agreement.
(c) Integration: This Agreement is the entire understanding between
the parties and supersedes all other prior written or oral agreements,
representations or implied promises.
(d) Modification or Waiver: The provisions of this Agreement may not
be waived or modified, unless in writing and signed by both parties.
(e) Counterparts: This Agreement may be executed in counterparts, each
of which constitute an original document, and all of which constitute a single
document.
(f) Severability: If for any reason any provision of this Agreement is
determined by a court or arbitrator of competent jurisdiction to be invalid,
illegal or unenforceable, its invalidity shall not affect the validity and
effect of the other provisions herein.
(g) No Waiver For Delay: Any party's delay in exercising any right or
remedy under this Agreement shall not: (i) impair any right or remedy which the
party may have; or (ii) be construed as a waiver of any such right or remedy
under this
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Agreement, unless specifically waived by the party in writing. Further, any
party's waiver of any breach or default under this Agreement shall not be a
waiver of any other or subsequent breach or default committed by the other
party, or of the continuance of the same breach or default after any written
notice demanding strict performance.
(h) Notices: All communications required by or given in connection
with this Agreement shall be in writing and deemed given and received if: (i)
personally delivered, on the date of delivery; (ii) if mailed, three (3) days
after deposit in the U.S. mail, registered or certified, return receipt
requested, postage prepaid and addressed as provided below; or (iii) if by a
courier delivery service providing overnight or "next-day" delivery, on the next
business day after deposit with such service, addressed as follows:
If to Employer: MedAire, Inc.
00 Xxxx Xxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxx, XX 00000
Attn: Chief Executive Officer
With a copy to: _____________________________
If to Employee: _____________________________
ADDRESS
With a copy to: _____________________________
(i) Attorneys' Fees: If either party initiates a legal action against
the other party to enforce any right or obligation under this Agreement, the
non-prevailing party shall pay the prevailing party's reasonable attorneys' fees
and costs.
(j) Currency References: All references to currency in this Agreement
are made with respect to U.S. Dollars.
IN WITNESS WHEREOF, MedAire has caused this Agreement to be executed
by its duly authorized representative, and Xxxxx Xxxx has signed and entered
into this Agreement, on the 23 day of November, 2004, to be deemed effective as
of November 23, 2004.
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MEDAIRE, INC.
By: /s/ Xxxx Xxxxxxxx Xxxxxxx /s/ Xxxxx Xxxx
--------------------------------- ----------------------------------------
XXXXX X. XXXX
Its: CEO
--------------------------------
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EXHIBIT A
MEDAIRE JOB DESCRIPTION: PRESIDENT/CHIEF OPERATING OFFICER
JOB TITLE: President/Chief Operating Officer AUTHOR: X. Xxxxxx
DEPARTMENT: Administration APPROVED BY X. Xxxx
FLSA STATUS: Exempt REVISION DATE 11/2004
SALARY GRADE: N/A
EEO CLASSIFICATION: 1
SUMMARY
Directs and coordinates the activities of the organization in accordance with
policies, goals, and objectives established by the Chief Executive Officer and
Board of Directors. Ensures the achievement of short and long-term goals for all
operations, human resources, financial performance, and growth.
ESSENTIAL DUTIES AND RESPONSIBILITIES
- Leads strategic planning process to identify and exploit markets and
products/services providing optimized growth and profit opportunities.
- Drives the process management development effort to achieve the most
efficient and effective possible operations companywide. Oversees the
development, implementation, and monitoring of systems, policies and
operational business plans, strategies, and controls that support the
strategic direction of the organization.
- Manages staff to achieve objectives in the strategic plan ensuring
effective and efficient alignment of staff, resources, and
communications. Recruits top management personnel.
- Drives operational processes, measurements, and efficiencies to ensure
optimization of financial and operational results. Drives the annual
business planning process and the process for reviewing performance
against the plan.
- Leads customer needs and satisfaction assessment activities to ensure
alignment of corporate goals with customer expectations and
product/service delivery results.
- Serves as an officer of the company subject to the ByLaws of the
company and will serve as an elected executive member of the Board of
Directors.
- Ensures effective communications is maintained with the Board of
Directors and the Board's committees. Bring to the Board all actions
requiring Board attention and carry out fully all Board approved
actions.
- Maintains effective ongoing communications with the Chairman. Assists
the Chairman by identifying opportunities to coordinate her actions to
achieve the strategic and annual plan. Informs and consults with the
Chairman regularly to ensure consistency of the actions of the
Chairman and President.
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- Assists in the investor relations process by developing effective
messages and assisting in presentations. Responds to investor
questions.
- Leads ISO 9001-2000 efforts.
- Other duties as assigned.
QUALIFICATIONS
- Bachelor's degree or equivalent; Master's degree preferred.
- Minimum 15 years progressively responsible business management and/or
financial management experience.
- Demonstrated competency in a senior leadership role in a successful
public company.
- Demonstrated expertise with strategic plan development and
implementation, financial analysis, and operational metrics.
- Demonstrated effective strong leadership and management skills.
- Proven effective communication skills, including but not limited to
verbal and written skills and the ability to deliver persuasive group
presentations.
- Proven aptitude to conduct effective analysis, exercise excellent
judgment and make superior decisions.
- Proven competency with the use of various systems and software
programs.
- Proven effective interpersonal, problem solving, and decision making
skills.
PHYSICAL DEMANDS
- Must be able to operate a personal computer.
WORK ENVIRONMENT
- General office environment; noise level is usually moderate.
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EXHIBIT B
OUTLINE OF EQUITY PARTICIPATION PROGRAM
MedAire shall grant to Lara a total of 1,740,000 warrants to purchase
shares of common stock of MedAire at an exercise price of $0.68 per share. Such
warrants shall be awarded in three equal annual increments on the condition that
MedAire exceeds EBITDA targets established by the Board of Directors for the
fiscal years ending December 31, 2005, 2006 and 2007, respectively. All shares
subject to the warrants, and awarded, shall vest and become exercisable in the
event that MedAire's EBITDA for the fiscal year ending December 31, 2007 equals
or exceeds $5.6 million. In calculating EBITDA, appropriate adjustments will be
made to exclude the effect of subsequent acquisitions and stock issuances by
MedAire, except where such acquisitions are acquired out of operating cash flow
or stock issuance net expenses. At the discretion of the board, flexibility may
be exercised in the 2005 EBITDA results and subsequent allocation of option
warrants. MedAire and Lara shall cooperate in good faith to establish the terms
of such adjustments as well as the definitive form of the documentation
evidencing the grant of warrants to Lara consistent with the foregoing terms.
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EXHIBIT C
RELOCATION ALLOWANCE
MedAire agrees to reimburse Lara up to a maximum of Twenty Thousand Dollars and
No Cents ($20,000.00) for expenses associated with his move from Knoxville, TN
to the Phoenix, AZ metropolitan area, upon receipt by MedAire of reasonable
documentation evidencing such expenses. The parties agree that MedAire shall
treat such reimbursement as nontaxable to Lara to the extent permitted under
applicable law.
During the relocation process, MedAire agrees to provide up to two round trips
between Knoxville, TN and Phoenix, AZ.
MedAire agrees to provide at its cost temporary housing, of its choosing, until
such time as Lara has taken occupancy of a primary residence in the Phoenix, AZ
metropolitan area, for a period of time not to exceed six (6) months.
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Amendment to Employment Agreement
This Amendment relates to that certain Employment Agreement ("Agreement"),
effective as of November 23, 2004, entered into by and between MedAire, Inc., a
Nevada corporation ("MedAire") and Xxxxx X. Xxxx ("Xxxx"). Capitalized terms
expressly defined in the Agreement shall have the same meanings in this
Amendment. For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, MedAire and Lara agree as follows:
1. Section 2(e) of the Agreement is hereby amended to read in its entirety
as follows:
(e) Termination Without Cause: MedAire and Lara acknowledge and agree that
either MedAire or Lara may terminate the employment relationship for any reason
or no reason and without cause by serving upon the other party written notice of
an intent to terminate this Agreement at least thirty (30) days prior to the
effective termination date. If this Agreement is terminated by MedAire without
cause, and other than as a result of the death or disability (as described in
Section 2(d) above) of Lara or as provided in Subsection 2(f) or Section 8
hereof, and such termination qualifies as a "separation from service" within the
meaning of Section 409A of the Internal Revenue Code, as amended ("Section
409A"), (i) Lara shall be entitled to receive payments of his base salary for a
period of twelve (12) months from the date of termination, (ii) after a period
of 12 months from the date of employment, Lara shall vest as to any unvested
shares subject to the equity participation program described in Exhibit B as of
the date of termination in an amount equal to the shares subject to such equity
participation program in the year of termination regardless of any vesting
conditions (including service, performance, or otherwise) related to such year
described in Exhibit B, and (iii) MedAire shall maintain in effect for Lara and
his eligible beneficiaries, at MedAire's sole expense, Lara's benefits pursuant
to MedAire benefit plans in which he was entitled to participate immediately
prior to such termination for a period of 12 months, which period shall be
counted as a part of any COBRA benefit eligibility available to Lara. If Lara's
continued participation is not permitted under the general terms and provisions
of MedAire's benefit plans, MedAire shall, at MedAire's sole expense, arrange to
provide Lara with benefits for a period of twelve months substantially
equivalent to those which he was entitled to receive under such plans. For
purposes of this Subsection 2(e), termination by MedAire without cause shall be
deemed to include Lara's resignation as the result of a significant diminution
in his position, duties or responsibilities, or the assignment to him of duties
and responsibilities inconsistent with the position of President and Chief
Operating Officer.
2. Section 2 is further amended by adding thereto the following
subsections:
(g) For purposes of Section 000X, Xxxx hereby elects to receive, and
the Company hereby agrees to pay, each amount payable under this Agreement at
the times, and on the terms and conditions, set forth herein.
(h) Notwithstanding Section 2(e) above, if Section 409A of the Code
would impose any additional tax on payments within the first six months
following Lara's separation from service, such
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payments shall be delayed to the minimum extent necessary to avoid such
additional tax. However, if it becomes necessary to delay payments for health
benefits, MedAire shall take such actions as are necessary to ensure that
continued coverage is available to Lara and shall pay or reimburse Lara for, as
appropriate, all deferred payments after the deferral period.
3. Except as amended as set forth above, the Agreement remains in full
force and effect in accordance with its terms.
Dated August 23, 2005.
MEDAIRE, INC.
By: /s/ Xxxx Xxxxxxxx Xxxxxxx /s/ Xxxxx Xxxx
--------------------------------- ----------------------------------------
XXXXX X. XXXX
Its: CEO
--------------------------------
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Second Amendment to Employment Agreement
This Second Amendment relates to that certain Employment Agreement
("Agreement"), effective as of November 23, 2004, entered into by and between
MedAire, Inc., a Nevada corporation ("MedAire") and Xxxxx X. Xxxx ("Lara"), as
previously amended. Capitalized terms expressly defined in the Agreement shall
have the same meanings in this Second Amendment. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
MedAire and Lara agree as follows:
1. To the extent, but only to the extent, necessary to comply with the
Listing Rules of the Australian Stock Exchange ("ASX"), Lara agrees that
payments under Section 2(e) of the Agreement shall not exceed the amount
permissible under such Listing Rules.
2. This Second Amendment shall terminate automatically at such time as
MedAire is no longer listed on the ASX.
3. Except as amended as set forth above, the Agreement remains in full
force and effect in accordance with its terms.
Dated September 15, 2005.
MEDAIRE, INC.
By: /s/ Xxxx Xxxxxxxx Xxxxxxx /s/ Xxxxx Xxxx
--------------------------------- ----------------------------------------
XXXXX X. XXXX
Its: CEO
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