EMPLOYMENT AGREEMENT
AGREEMENT is effective as of the 20th day of January 2004 by and
between CALYPTE BIOMEDICAL CORPORATION, having a place of business at 0000
Xxxxxx Xxx Xxxxxxx, Xxxxxxx, XX 00000 (hereinafter referred to as "EMPLOYER")
and J. XXXXXXX XXXXXX, residing at 0000 Xxxxxxxxxxx Xxx, Xxxxxxxxxxx XX 00000
(hereinafter referred to as "EMPLOYEE").
W I T N E S S E T H:
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WHEREAS, the EMPLOYER is engaged in the business of developing and
marketing urine-based diagnostic products and services for Human
Immunodeficiency Virus (HIV-1); and
WHEREAS, the EMPLOYER is desirous of employing EMPLOYEE, and EMPLOYEE
wishes to be employed by EMPLOYER in accordance with the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL
COVENANTS AND PROMISES AND OTHER GOOD AND
VALUABLE CONSIDERATION, THE RECEIPT OF WHICH
IS HEREBY ACKNOWLEDGED, IT IS MUTUALLY AGREED
AS FOLLOWS:
1. EMPLOYMENT DUTIES AND TERM: EMPLOYER and EMPLOYEE agree to enter
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into an Employment Agreement, and the within Employment Agreement is effective
as of the date first written above. The EMPLOYER does hereby employ, engage and
hire the EMPLOYEE as President and Chief Executive Officer of EMPLOYER for a
period of three (3) years commencing January 20, 2004 and terminating January
19, 2007. The duties of EMPLOYEE shall include, but not be limited to, acting as
President and Chief Executive Officer of EMPLOYER. EMPLOYEE will perform
services on behalf of EMPLOYER with respect to the management and general
supervision of the business of EMPLOYER.
2. GOOD FAITH PERFORMANCE OF DUTIES: The EMPLOYEE agrees that he will,
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at all times, faithfully, industriously, and to the best of his ability,
experience and talent, perform all of the duties that may be required of and
from him, pursuant to the expressed and implicit term hereof.
3. COMPENSATION: EMPLOYER shall pay to the EMPLOYEE, and the EMPLOYEE
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agrees to accept from the EMPLOYER, in full payment for the
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EMPLOYEE's services hereunder, compensation at the rate of $250,000 per annum.
EMPLOYEE will be paid bi weekly during the term of the within Agreement.
In addition, subject to the approval of the
Company's 2004 Incentive Plan by its stockholders, EMPLOYER agrees to award to
EMPLOYEE 5,000,000 stock options to purchase 5,000,000 shares of common stock
pursuant to the Company's 2004 Incentive Plan for a term of 10 years from date
of grant, which date shall be on or as soon as reasonably practicable after the
date the Company's stockholders shall approve the 2004 Incentive Plan. The
exercise price and the vesting schedule of the options shall be as determined by
the Company's Compensation Committee and consistent with other 2004 grants to
executive officers and key employees.
In addition, EMPLOYER agrees to reimburse
EMPLOYEE for all verifiable expenses incurred by EMPLOYEE during the term of his
employment. EMPLOYEE agrees to provide adequate written documentation as may be
required with respect to said expenses.
4. VACATION: Paid vacation (taken consecutively or in segments) in
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accordance with the EMPLOYER's policies generally applicable to other executives
of the Company from time to time, taken at such times as is reasonably
consistent with proper performance by Employee of Employee's duties and
responsibilities hereunder.
5. TERMINATION WITHOUT CAUSE OR CHANGE IN CONTROL: In the event that
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the Employment Agreement is terminated by EMPLOYER without cause, or EMPLOYER
sells an amount of its outstanding and issued common stock to any entity or
third party which results in a change of control of EMPLOYER, then in such
event, all stock options granted to EMPLOYEE in addition to options granted as
per Paragraph "3" of this Agreement will be immediately vested in EMPLOYEE, and
all payments due to EMPLOYEE for the full term of the Agreement will be due to
EMPLOYEE.
6. DEDICATION OF TIME: EMPLOYEE shall devote all of his working time,
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attention, knowledge and skill solely and exclusively to the business and
interest of the EMPLOYER. The EMPLOYEE expressly agrees that he will not, during
the term hereof or for one (1) year from the termination of this Agreement, be
involved directly or indirectly, in any form, fashion or manner, as a partner,
officer, director, stockholder (owning in excess of 4.9%), advisor, consultant
or employee in any other business similar to or in any way competing with the
business of the EMPLOYER. Nothing herein contained shall, however, limit the
rights of the EMPLOYEE to own up to 5% of the capital stock or other securities
of any corporation, whose stock or securities are publicly owned or traded
regularly on a public exchange or in the over-the-counter market, or to prevent
the EMPLOYEE from investing financially in, or limiting the EMPLOYEE's rights to
invest financially in, other businesses not allied with or competing with the
business of the EMPLOYER, as long as EMPLOYEE continues to
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devote all of his working time, attention, knowledge and skill, solely and
exclusively to the business and interest of the EMPLOYER. EMPLOYEE will be
permitted to serve on the Board of Directors of publicly owned companies.
7. CONFIDENTIALITY: During the terms of EMPLOYEE's employment under
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this Agreement, and for one (1) year thereafter, the EMPLOYEE specifically
agrees that he will not, at any time, in any fashion, form or manner, either
directly or indirectly, use, divulge, disclose or communicate to any person,
firm or corporation, in any manner whatsoever, any confidential or proprietary
information of any kind, nature or description concerning any matters affecting
or relating to the business of the EMPLOYER including, without limiting the
generality of the foregoing, any of its customers, its manner of operations, its
plans, its ideas, processes, programs, its intellectual property or other data,
information or materials of any kind, nature or description, without regard to
whether any or all of the foregoing matters shall be deemed confidential,
material or important. The parties hereto stipulate that, as between them, the
same are important, material, confidential and gravely affect the effective and
successful conduct of the business of the EMPLOYER and its goodwill, and that
any breach of the terms of this Paragraph is a material breach thereof, except
where the EMPLOYEE shall be acting on behalf of the EMPLOYER. EMPLOYEE
understands and agrees that, in the event that EMPLOYEE violates the terms and
conditions, as stated in this Paragraph, that he will be subject to an
injunction and damages, and understands and agrees that EMPLOYER's remedy to
prevent further or continued damages will include a petition for injunctive
relief. EMPLOYEE expressly acknowledges that the restrictions contained in this
Paragraph are reasonable and are properly required for the adequate protection
of the EMPLOYER's interests.
EMPLOYEE further understands and agrees that
EMPLOYER, in entering into this Agreement, is relying upon EMPLOYEE's
representation and warranty that all trade secrets and other proprietary
information of EMPLOYER will be kept strictly confidential by EMPLOYEE and not
utilized by EMPLOYEE in any manner whatsoever other than on EMPLOYER's behalf
during the course of EMPLOYEE's employment with EMPLOYER.
8. NON-COMPETITION: EMPLOYEE agrees that, during the term of this
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Agreement and for one (1) year after termination hereof, he shall not, for
himself or any third party, directly or indirectly, divert or attempt to divert
from the EMPLOYER or its subsidiaries or affiliates any business of any kind in
which it is engaged or employed, solicit for employment, or recommend for
employment any person employed by the EMPLOYER or by any of its subsidiaries or
affiliates, during the period of such person's employment and for a period of
one (1) year thereafter. EMPLOYEE expressly acknowledges that the restrictions
contained in this paragraph are reasonable and are properly required for the
adequate protection of the EMPLOYER's interests.
9. EARLY TERMINATION: It is expressly understood and agreed
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that the terms of this Agreement, may be terminated by the EMPLOYER prior to
January 19, 2007, upon the occurrence of any of the following events:
(a) Automatically and without notice upon
the death of the EMPLOYEE; it is also understood that EMPLOYEE will be entitled
to three (3) months' salary which will be payable to his estate;
(b) Persistent absenteeism on the part of
the EMPLOYEE, which in the reasonable judgment of the Board of Directors of the
Company is having or will have a material adverse effect on the performance of
the EMPLOYEE's duties under this Agreement;
(c) Deliberate and willful failure to
perform normal services and duties required of EMPLOYEE pursuant to this
Agreement, except if the performance of such duties or services would result in
a violation of EMPLOYEE's fiduciary responsibility to the Company and its
shareholders or is in a violation of applicable laws;
(d) Any willful act or failure to act, which
in the reasonable opinion of the Board, is in bad faith and to the material
detriment of the EMPLOYER;
(e) Conviction of a felony involving moral
turpitude or dishonesty;
(f) Total or partial disability of the
EMPLOYEE for a period of three (3) consecutive months or ninety (90) days, in
the aggregate, so that he is prevented from satisfactorily performing a
substantial part of his duties; it being further understood and agreed that any
proceeds received by EMPLOYEE from a policy of disability benefits insurance or
any other proceeds received from any Federal, State or Municipal agency of
government will be credited to the amount of compensation paid to EMPLOYEE by
EMPLOYER; and
(g) Fraudulent misconduct of the EMPLOYEE.
The Agreement shall not be terminated by
any:
(a) Merger or consolidation, where the
Company is not the consolidating or surviving; or
(b) Transfer of all or a substantial
majority of the assets of the Company;
(c) Acquisition or control of fifty percent
(50%) or more of the Company's issued and voting equity share capital by any
party, or by parties
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acting in concert or under common control.
In the event of any merger or consolidation
or transfer of all, or a substantial majority, of the assets of the Company or
acquisition or control of fifty percent (50%) (or an amount of stock ownership
that has the ability to elect the Board of Directors of EMPLOYER) or more of the
Company's issued and voting equity share capital by any party or by parties
acting in concert or under common control, the surviving or resulting entity or
the transferee or transferees of the Company's assets or its issued and voting
equity share capital, shall be bound by, and shall have the benefit of, the
provision of this Agreement, and the Company shall endeavor to take all actions
necessary to ensure that such entity or transferee or transferees shall be bound
by the provisions of the Agreement. Moreover, in the event of such merger or
consolidation, or transfer of all or a substantial majority of the assets of the
Company or acquisition of the Company of the Company's issued and voting equity
share capital as aforesaid, the EMPLOYEE may, at his option, continue his
employment under the terms of this Agreement, or upon giving not less than
thirty (30) days notice, no later than thirty(30) days (or as soon thereafter as
a merger or consolidation or transfer of all or a substantial majority of assets
is announced) prior to the announced or anticipated date of merger or
consolidation or transfer of all or a substantial majority of assets of the
Company, by registered mail, to the registered office of the Company, requiring
the Company to effect full settlement of all the EMPLOYEE's entitlements under
the terms of this Agreement, which settlement shall also include the payment of
EMPLOYEE's remuneration for the full term of the Agreement.
10. BENEFITS: EMPLOYER agrees that EMPLOYEE will be entitled, during
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the term, to all fringe benefits in effect for executive officers of the
EMPLOYER, such as Blue Cross/ Blue Shield and Major Medical
11. NO WAIVER: The parties hereto do further agree that no waiver or
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modification of this Agreement or of any covenant, condition or limitation
herein contained, shall be valid, unless in writing and duly executed by the
party to be charged therewith, and that no evidence of any proceedings or
litigation between either of the parties arising out of or affecting this
Agreement or the rights and obligations of any party hereunder shall be valid
and binding unless such waiver or modification is in writing, duly executed, and
the parties further agree that the provisions of this paragraph may not be
waived except as herein set forth.
12. GOVERNING LAW: The parties hereto agree that it is their intention
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and covenant that this Agreement and the performance hereunder shall be
construed in accordance with and under the laws of the State of California, and
that the terms hereof may be enforced in any court of competent jurisdiction in
an action for specific performance which may be instituted under this Agreement,
and that in the event of any dispute or claim under the within Agreement, that
same will be resolved in the Courts of the State of California.
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13. LIMITED INDEMNIFICATION: EMPLOYER indemnifies and holds harmless
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EMPLOYEE from any claims of any type against EMPLOYER that arise prior to the
date of the commencement of this Agreement.
14. OPPORTUNITY TO REVIEW: EMPLOYEE and EMPLOYER warrant and represent
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that each has had sufficient and adequate opportunity to consult with
independent counsel concerning the within Agreement, and has requested that the
firm of Xxxxxxx & Xxxxxxxxx prepare the within Agreement, and is aware that said
firm is relying upon the within representation prior to the parties entering
into the Agreement herein.
15. NOTICES: All notices required or permitted to be given by either
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party hereunder shall be in writing and mailed by registered mail, return
receipt requested and by regular mail to the other party addressed as follows:
If to EMPLOYER at:
CALYPTE BIOMEDICAL CORPORATION
0000 Xxxxxx Xxx Xxxxxxx
Xxxxxxx, XX 00000
If to EMPLOYEE at:
J. XXXXXXX XXXXXX 0000 Xxxxxxxxxxx Xxx
Xxxxxxxxxxx, XX 00000
Any notice mailed, as provided above, shall be deemed completed on the date of
receipt, or five (5) days from the postmark on said postal receipt.
16. CAPTION HEADINGS: Caption headings in this Agreement are provided
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merely for convenience and are of no force and effect.
17. ENTIRE AGREEMENT: This Agreement contains the total and entire
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Agreement between the parties and shall, as of the effective date hereof,
supersede any and all other Agreements between the parties. The parties
acknowledge and agree that neither of them has made any representations that are
not specifically set forth herein, and each of the parties hereto acknowledges
that he or it has relied upon his or its own judgment in entering into same, and
that the within Agreement has been approved by the EMPLOYERS compensation
committee and its board of directors.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
the day, month and year first above written.
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CALYPTE BIOMEDICAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx for the
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Compensation Committee
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/s/ J. Xxxxxxx Xxxxxx
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J. XXXXXXX XXXXXX
