AMENDED EMPLOYMENT AGREEMENT
THIS AMENDED EMPLOYMENT AGREEMENT is made and entered into this 25th
day of April, 2000, by and between THE MED-DESIGN CORPORATION, a Delaware
corporation and Med-Design Research Limited, a California Corporation which is a
wholly owned subsidiary of The Med-Design Corporation (hereinafter collectively
referred to as "Employer"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, an individual (hereinafter
referred to as "Employee") as follows:
WHEREAS, Employer entered into a contract of employment with Employee on
November 11, 1999 whereby Employee assumed the position of Chief Operating
Officer and Executive Vice President; and
WHEREAS, the parties desire to reconfirm and re-ratify the terms of that
contract of employment with certain amended provisions as are hereinafter set
forth;
NOW THEREFORE, IN CONSIDERATION of the above recitals, the mutual
undertakings hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. TERM
1.01 The Employer hereby employs the Employee and the employee hereby accepts
employment with the Employer for a period of three (3) years from November 11,
1999 to November 10, 2002, renewable for additional one year terms unless
terminated pursuant to the terms of Paragraph 8 of this Agreement. This
employment term is subject to annual review by the Employer on each anniversary
date of this Agreement and Employer may terminate Employee's employment after
such review at its sole discretion with no further obligation.
1.02 This employment may be extended by mutual agreement of the parties. As used
herein, the phrase "Employment Term" refers to the entire period of employment
of the Employee by the Employer hereunder, whether for the period provided
above, or if terminated earlier as hereinafter provided, or as extended by
mutual agreement of the parties.
2. DUTIES
2.01 The Employee shall serve as the Executive Vice President and Chief
Operating Officer of the Employer. He shall do and perform all services, acts,
or things necessary or advisable to manage and conduct the responsibilities of
the Executive Vice President and Chief Operating Officer of the Employer,
subject to the policies set by the Chief Executive Officer and Board of
Directors. The Employee shall perform the specific functions and tasks as set
forth below:
A. Perform the duties and responsibilities of the
Executive Vice President and Chief Operating Officer
as set forth in the corporate Bylaws of the Employer.
B. Manage the implementation of the research,
development and manufacturing facilities.
C. Advise the Chief Executive Officer and Board of
Directors with respect to the management and the
implementation of the corporate operations planning,
research and development.
D. Develop the corporate operations plan including
goals, objectives, policies, and strategy for
implementation of the plan.
E. Prepare and monitor the research, development, and
manufacturing plan, and assist the Chief Financial
Officer in budgeting and cost control systems, and
the monitoring of cost controls.
F. Assist the Chief Executive Officer in organization
and executive administration, and in marketing, sales
and financial planning and strategy.
G. Manage the research, development, and manufacturing
organization, operations planning, budgeting and cost
control, regulatory processing, purchasing,
contracts, personnel, and the administration of
product research, development and manufacturing.
3. LOCATION OF EMPLOYMENT
3.01 The aforesaid services shall be rendered primarily at Employer's facilities
in Ventura, California; provided, however, that Employee acknowledges that he
may be required to perform services on temporary assignments in other locations
from time to time and that he may be reassigned, from time to time, by Employer
for extended periods to other locations; provided, however, Employee consents in
advance to such temporary assignment in other locations.
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4. EMPLOYEE REPRESENTATIONS
4.01 Employee represents and warrants that he is currently not a party to any
employment agreement, consulting agreement or other arrangement which would in
any manner interfere with the duties and responsibilities he will be required to
perform under this Agreement. Employee hereby further agrees that he will
undertake no activity either directly or indirectly outside of his employment
with Employer which would either conflict with his duties under this Agreement
or be detrimental to the interests of Employer. In order to best assure that
these covenants are not breached, any outside employment of whatsoever nature
shall require the advance written consent of Employer.
5. COMPENSATION
5.01 As compensation for his services hereunder, the Employee shall receive a
salary at the rate set forth in the attached Schedule "A", for full time
employment payable in accordance with Employer's standard practices for payment
of salary to its employees.
6. EMPLOYEE BENEFITS
6.01 Employee shall have and retain all those benefits as are from time to time
determined by the Board of Directors, including but not limited to health
insurance, life insurance, vacation, holidays and sick leave. It is agreed by
Employer that Employee shall be granted benefits that are received by other
senior Employees of the Employer. Long term disability insurance as offered by
Employer must be paid for by Employee and maintained as a condition of
employment.
7. BUSINESS EXPENSES
7.01 The services required by the Employer may require the Employee to incur
reasonable business expenses, including travel expenses on behalf of the
Employer. The Employer shall promptly reimburse the Employee for all reasonable
business expenses incurred by the Employee in connection with the business of
the Employer, which shall include, but not be limited to automobile mileage,
airfare, ground transportation, lodging and subsistence, entertainment and
promotional expenses, printing and reproduction, long distance telephone and
facsimile charges, and postage and freight costs.
8. TERMINATION
8.01 The Employee's employment hereunder may be terminated by the Employer
without any breach of this Agreement or any obligation to make severance payment
under the circumstances described below in subparagraph 8.04:
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8.02 The Employee's employment hereunder shall terminate upon Employee's death.
In event of the death of the Employee during the term of employment, the date of
termination shall be on the date of death.
8.03 As a result of the Employee's incapacity due to physical or mental illness,
the Employer may terminate the Employee's employment hereunder by giving written
notice to such effect to the Employee. In the event of the termination of the
Employee's employment hereunder pursuant to this paragraph 8.03, the date of
termination shall be the date on which notice of termination is received by the
Employee or Employee's personal representative.
8.04 The Employer may terminate the Employee's employment under this Agreement
at any time for cause. For purposes of this Agreement, the term "cause" shall be
limited to the following: (i) acts by Employee involving moral turpitude which
reflect materially and adversely on the Employer, its reputation, or its assets;
(ii) gross and continued neglect by the Employee of Employee's duties, which
neglect continues for more than thirty (30) days after written notice specifying
the nature thereof is received by the Employee; (iii) conviction of a crime
involving moral turpitude, including, without limitation, theft or embezzlement;
(iv) continuing alcohol or drug abuse; or (v) a material breach of this
Agreement which breach remains uncured for a period of thirty (30) after written
notice specifying the nature of such breach by the Employee; provided, however,
that if the nature of such breach by Employee; is such that more than thirty
(30) days are reasonably required for its cure, then the Employer shall not have
the right to terminate this Agreement if the Employee commences such cure within
such thirty (30) day period and thereafter diligently prosecutes such cure to
completion. Termination pursuant to this paragraph 8.04 shall be by written
notice to the Employee which notice shall specify the cause for termination.
9. RIGHTS TO WORK
9.01 All inventions, new products, manufacturing processes and work product made
pursuant to this Agreement and Employee's contributions thereto (hereinafter
referred to as "Work") shall be the sole and exclusive property of Employer.
Employer shall have the perpetual and exclusive right to use, manufacture,
distribute, sell or license throughout the world any Work, or part thereof, in
which Employee's services are utilized in the medical device and equipment
industry which is now known or may hereafter exist, including, without
limitation, inventions, new product developments and designs, and the
development of manufacturing processes for the medical device and equipment
industry. All revenue that Employer derives from the distribution, sales or
licensing of such Work shall be the sole and exclusive property of Employer.
9.02 All processes, inventions, design, patents, copyrights, trademarks and
other intangible rights that Employee may conceive or develop, either alone or
with others, during the term of Employee's employment, in which the equipment,
supplies, facilities or trade secret information of Employer was used, or which
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relate at the time of conception or reduction to practice of the invention to
the business of Employment or to Employer's actual or demonstrably anticipated
research and development, or which result from any work that Employee performed
for Employer, shall be the sole property of the Employer. Employee shall
disclose to Employer all inventions conceived during the term of employment,
whether or not the property of Employer under the terms of the preceding
sentence, provided that such disclosure shall be received by Employer in
confidence. Employee shall execute all documents, including patent applications
and assignments, that Employer requires to establish Employer's rights under
this Section.
9.03 The parties understand and agree that the rights granted to Employer in
this paragraph shall continue in effect after the termination or expiration of
this Agreement to the extent necessary for Employer's full enjoyment of such
rights.
10. COVENANT NOT TO COMPETE
10.01 The Employee agrees that, during the term of employment, including any
renewal thereof, he will not act as an officer, director or consultant or
Employee of, or have any direct or indirect financial interest (excluding
financial interests in publicly traded corporations) in any business competing
with the business of the Employer or its successor. In addition, while Employee
is employed by Employer and for three (3) years after termination of that
employment, Employee will not, except on behalf of Employer, directly or
indirectly, solicit or accept business in competition with Employer from any
persons or entities which have been customers of Employer.
10.02 Employee acknowledges that it is the policy of Employer to maintain as
secret and confidential all valuable and unique information heretofore or
hereafter acquired, developed or used by employer relating to the business,
operations, employees, new products, manufacturing processes and work product of
Employer, all of which gives Employer a competitive advantage in its business
(all such information which is hereinafter referred to as "Employer Confidential
Information"). Employee hereby acknowledges that Employer Confidential
Information constitutes "trade secrets" within the meaning of California Civil
Code 426.1(d), the use of which would constitute an unfair business practice and
a violation of the Uniform Trade Secrets Act (California Civil Code
3426-3426.10). Employee further recognizes that the services to be performed by
him are special and unique and that by reason of his duties, will acquire
Employer Confidential Information. In consideration of Employer entering into
this Agreement, Employee agrees that:
A. Use of Confidential Information. Employee shall not
use Employer Confidential Information directly or
indirectly, or use, publish, disseminate or otherwise
disclose any Employer Confidential Information
without the prior written consent of Employer.
B. Protection. Employee shall exercise all due and
diligent precautions to protect the integrity of all
Employer Confidential Information, including but not
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limited to new products, manufacturing processes,
mailing lists and sources thereof, statistical data
and compilations, agreements, contracts, manuals or
other documents embodying any Employer Confidential
Information and Employee shall return all such
documents in his possession or control upon the
request of Employer.
C. Irreparable Harm. Employee acknowledges that
irreparable injury would result to Employer, its
business and its property, in the event Employee
fails to perform his obligations under this Paragraph
10. Accordingly, Employee acknowledges and agrees
that in the event of his failure to perform his
obligations hereunder, Employer shall be entitled, in
addition to any other remedies and damages available
to it, to whatever injunctive relief may be
appropriate to restrain the breach or compel the
performance of this Paragraph 10.
D. Nonsolicitation. Employee further agrees that he
shall neither solicit any employee, independent
contractor, consultant, customer, vendor, competitor,
attorney or accountant of Employer, nor solicit or
communicate with by way of announcement, publication,
advertisement or otherwise (except to the extent
necessary to perform his duties and responsibilities
under this Agreement) any person or entity with whom
Employer has a business relationship or who or which
competes with Employer for a period of one (1) year
from the date of termination of Employee's employment
pursuant to this Agreement. Employee further
recognizes that irreparable injury will result to
Employer, its business and its property, in the event
that Employee fails to perform his obligations under
this Paragraph 10.02 D. Accordingly, Employee
acknowledges and agrees that in such event, Employer
shall be entitled, in addition to any other remedies
and damages available to it, to whatever injunctive
relief may be appropriate to restrain the breach or
compel the performance of this paragraph of Paragraph
10.02D.
11. NOTICES
11.01 All notices, requests, demands or other communications required to or
permitted to be given under this Agreement shall be in writing and shall be
conclusively deemed to have been duly given (1) when hand delivered to the other
party; (2) when received when sent by telex or facsimile at the address and
number set forth below (provided, however, that notices given by facsimile shall
not be effective unless either (a) a duplicate copy of such facsimile notice is
promptly given by depositing same in a United States post office with first
class postage prepaid and addressed to the parties as set forth below, or (b)
the receiving party delivers a written confirmation or receipt for such notice
either by facsimile or any other method permitted under this paragraph;
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additionally, any notice given by telex or facsimile shall be deemed received on
the next business day if such notice is received after 5:00 p.m. (recipient's
time) or on a non-business day; (3) three business days after the same have been
deposited in a United States post office with first-class or certified-mail
return-receipt-requested postage prepaid and addressed to the parties as set
forth below; or (4) the next business day after same have been deposited with a
national overnight delivery service reasonably approved by the parties, postage
prepaid, addressed to the parties as set forth below with next-business-day
delivery guaranteed, provided that the sending party receives a confirmation of
delivery from the delivery service provider.
To Employer: The Med-Design Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Executive Officer
To Employee: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
12. ENTIRE AGREEMENT
This Agreement supersedes any and all other agreements, either oral or
in writing, between the parties hereto with respect to the employment of the
Employee in the positions herein above-described and contains all of the
covenants and agreements between the parties with respect to such employment in
any manner whatsoever. Each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, orally or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding.
13. MODIFICATION
Any modification to this Agreement will be effective only if it is in
writing signed by the parties hereto.
14. SEVERABILITY
If any provision in this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remaining provisions
shall nevertheless continue in full force without being impaired or invalidated
in any way, except to the extent that either Employees' obligations to provide
the services herein outlined, or Employer's obligation to compensate Employee
therefore shall be determined to be void, illegal or unenforceable, in which
event the entire Agreement shall be terminable at the option of either party.
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15. CONSTRUCTION AND JURISDICTION
This Agreement shall be interpreted, construed and enforced in
accordance with the laws of the State of California irrespective of such state's
choice-of-law principles. The parties hereto agree that all actions or
proceedings arising in connection with this Agreement shall be tried and
litigated exclusively in the State and Federal courts having jurisdiction over
Ventura California. The aforementioned choice of venue is intended by the
parties to be mandatory and not permissive in nature, thereby precluding the
possibility of litigation between the parties with respect to or arising out of
this Agreement in any jurisdiction other than that specified in this paragraph.
16. ARBITRATION
The parties shall submit any dispute concerning the interpretation of
or the enforcement of rights and duties under this Agreement to final and
binding arbitration pursuant to the American Arbitration Association Rules.
Arbitration shall be conducted by a neutral arbitrator or arbitrators appointed
in accordance with the American Arbitration Association Rules in the Los
Angeles, California office or any office more convenient to the parties in or
around Ventura, California. Notwithstanding the foregoing, a party may apply to
a court of competent jurisdiction for relief in the form of a temporary
restraining order or preliminary injunction, or other provisional remedy pending
final determination of a claim through arbitration in accordance with this
paragraph.
17. SUCCESSORS AND ASSIGNS
Subject to the provisions of this Agreement regarding assignment, this
Agreement shall be binding upon the heirs, executors, administrators, legal
representatives, successors, and assigns of the respective contracting parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written with full knowledge of the contents and
intending thereby to be legally bound.
ATTEST: EMPLOYER:
THE MED-DESIGN CORPORATION
a Delaware Corporation
__________________________________ By: _______________________
Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
ATTEST: MDC RESEARCH, LIMITED
a California Corporation
___________________________________ By: _______________________
Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
WITNESS: EMPLOYEE:
____________________________________ ___________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Schedule A to the Amended Employment Agreement
Between The Med-Design Corporation and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
A. Base Compensation
Employee's annual base compensation shall be $165,000.00 per annum.
Annual bonuses will be determined at the discretion of the Board's Compensation
Committee upon recommendation by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Executive Officer.
Incentive Stock Options will similarly be awarded on an annual basis at the
discretion of the Board's Compensation Committee upon review by ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Chief Executive Officer.
B. Warrant Compensation
Employee will receive Warrants for 50,000 shares of Employer stock
priced at the close of the market on November 11, 1999, the date Employee began
assuming his duties with the Employer, $7.875. These Warrants will be in the
standard Med-Design Warrant form providing for immediate vesting and a five (5)
year life during which the Warrants may be exercised.
C. Additional Warrant Compensation
In addition to the Warrants received in the above paragraph B, the
Employer shall immediately issue a Warrant to Employee for sixty six thousand
(66,000) shares of Employer's common stock priced as of the close on April 25,
2000, $11.875 per share. The Warrants will provide that thirty three thousand
(33,000) shares shall vest on November 11, 2000 and thirty three thousand
(33,000) shares shall vest on November 11, 2001. The Warrants will be
exercisable five (5) years from the dates of vesting. The Warrant shall provide
that vesting shall be immediate upon Employee's death or upon a change in
control of Employer, but the unvested shares shall not vest before the vesting
date in the event that Employee either voluntarily terminates his employment or
is terminated for cause by Employer.
D. Additional Expense Allocation
Employer shall lease an automobile for Employee's use in Ventura.
Employee can select said automobile not to exceed a purchase price of $45,000.
E. Special Incentive Shares
If during the course of Employee's employment with Employer, the
Employer is merged into or acquired by another entity successfully, the Employer
will cause to be issued to Employee 200,000 shares of the Employer's common
stock at no cost to Employee.
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Or in the alternative;
If at any time while Employee is employed by the Employer, the
Employer's common stock trades over $22.00 per share for thirty (30) consecutive
trading days, Employer shall give Employee the right to receive the same 200,000
shares at no cost to Employee (it being understood that the total special
incentive grant of shares will never exceed 200,000 shares) in the following
manner:
1. Sixty six thousand six hundred sixty seven (66,667)
shares shall vest upon the sooner of (a) one year
after the 30th day of the above-described trading or
(b) the date that such shares are registered.
2. Sixty six thousand six hundred sixty seven (66,667)
shares shall vest two (2) years after the 30th day of
the above-described trading.
3. Sixty six thousand six hundred sixty six (66,666)
shares shall vest three (3) years after the 30th day
of the above-described trading.
4. In the event that Employer's Common Stock does not
trade over $22.00 per share for thirty (30)
consecutive trading days by November 11, 2004, the
200,000 shares, at no cost to Employee, shall vest on
that date.
Vesting of the above-described incentive shares shall be immediate upon
Employee's death or upon a change in control of Employer, but the unvested
shares shall not vest before the vesting date in the event that Employee either
voluntarily terminates his employment or is terminated for cause by Employer.
Notwithstanding the aforesaid conditions, in the event that Employee
completes the three (3) year term of this Agreement and Employer declines to
renew or extend this Agreement, Employee shall still be entitled to the
above-described vesting of incentive shares although no longer employed by
Employer.
This incentive compensation is granted subject to Shareholder approval.
ATTEST: EMPLOYER:
THE MED-DESIGN CORPORATION
a Delaware Corporation
____________________________________________ By: _______________________
Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
ATTEST: MDC RESEARCH, LIMITED
a California Corporation
____________________________________________ By: _______________________
Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
WITNESS: EMPLOYEE:
____________________________________________ ___________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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