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EMPLOYMENT AGREEMENT
BY AND BETWEEN
BACKGENESIS, INC.
AND
▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
THIS EMPLOYMENT AGREEMENT (the "Agreement") is to be effective
as of _____________, 1999 (the "Commencement Date") by and between BackGenesis,
Inc., a Delaware corporation (the "Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
("Employee").
WHEREAS, the Company is engaged in the medical surgery and
pain therapy business (such activities, present and future, being hereinafter
referred to as the "Business"); and
WHEREAS, the Company and Employee desire to enter into this
Agreement to memorialize their oral understanding, to assure the Company of the
services of Employee for the benefit of the Company and to set forth the
respective rights and duties of the parties hereto.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants, terms and conditions set forth herein, the Company and
Employee agree as follows:
ARTICLE I
EMPLOYMENT
1.1 EMPLOYMENT AND TITLE. As of the Commencement Date, the
Company employs Employee, and Employee accepts such employment, as interim Chief
Executive Officer and President of the Company all upon the terms and conditions
set forth herein. Employee shall also remain President of the Company's
wholly-owned subsidiary, Valley Pain Centers, Inc.("VPC"), all upon the terms
and conditions set forth in that certain Employment Agreement dated __________,
1999. This Employment Agreement and the Employment Agreement with VPC are
separate and distinct agreements and each shall be read, interpreted and acted
upon independent of each other unless specifically stated otherwise herein.
1.2 DUTIES. Subject to the power of the Board of Directors of
Employer to elect and remove officers, Employee will serve as Chief Executive
Officer of the and President of the Company. Employee will faithfully and
diligently perform the services and functions relating to such offices or
otherwise reasonable incident to such offices, provided that all such services
and functions will be reasonable and within Employee's area of expertise.
Employee will during the term of this Agreement (or any extension thereof),
devote his attention and skills and best efforts to the promotion of the
business of Employer and VPC. The foregoing will not be construed as preventing
Employee from acting as President of VPC or making investments in other business
or enterprises.
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1.3 LOCATION. The principal place of employment and the
location of Employee's principal office shall be in the greater metropolitan
area of Orlando, Florida (which shall also be true with respect to the VPC
Employment Contract); provided, however, Employee shall, when requested by the
Board of Directors, or may, if he determines it to be reasonably necessary,
temporarily perform outside of such area, such services as are reasonably
required for the proper execution of his duties under this Agreement.
1.4 REPRESENTATIONS. Each party represents and warrants to the
other that he/it has full power and authority to enter into and perform this
Agreement and that his/its execution and performance of this Agreement shall not
constitute a default under or breach of any of the terms of any agreement to
which he/it is a party or under which he/it is bound. Each party represents that
no consent or approval of any third party is required for his/its execution,
delivery and performance of this Agreement or that all consents or approvals of
any third party required for his/its execution, delivery and performance of this
Agreement have been obtained.
ARTICLE II
TERM
2.1 TERM. The term of Employee's employment hereunder (the
"Term") shall commence as of the Commencement Date and shall continue until
relieved of his duties by the Board of Directors (the "Scheduled Termination
Date") unless a set term is otherwise established between the parties.
ARTICLE III
COMPENSATION
3.1 SALARY. As compensation for the services to be rendered by
Employee, the Company shall pay Employee no additional base compensation unless
otherwise agreed as Employee is presently entitled under the VPC Employment
Agreement to an annual base salary of not less than Two Hundred Thousand Dollars
($200,000.00) provided VPC profits and cash flow are sufficient to pay such
amount. The base salary will be reviewed annually, or, as appropriate, by the
Board of Directors. At any time the salary may be increased if so determined by
the Board of Directors of Employer after a review of Employee's performance of
his duties.
3.2 INCENTIVE COMPENSATION. The Company may also pay Employee
such incentive compensation as the Board of Directors deems appropriate. It is
acknowledged that Employee is entitled to annual incentive compensation under
the VPC Employment Agreement equal to a percentage of VPC's pre-tax net income
as determined as of December 31st of each year by the Company's independent
certified accountants based upon generally accepted accounting principles
("VPC's") as follows:
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3.2.1 Ten (10) percent of VPC's Profits over
$1,000,000.00 through $1,500,000.00;
3.2.2 Fifteen (15) percent of VPC's Profits over
$1,500,000.00 through $2,000,000.00;
3.2.3 Twenty (20) percent of VPC's Profits over
$2,000,000.00 through $2,500,000.00; and
3.2.4 Twenty-five (25) percent of VPC's Profits over
$2,500,000.00.
Such VPC incentive compensation shall be paid on or before
April 1 of each year for VPC's immediately preceding fiscal year ending December
31st.
3.3 NONQUALIFIED STOCK OPTIONS. As approved by the stock
option committee, the Company may grant to Employee stock options to acquire its
restricted common stock.
3.4 BENEFITS. Employee shall be entitled, during the Term
hereof, to the same medical, hospital, pension, profit sharing, dental,
disability and life insurance coverage and benefits as are presently in effect
under the VPC Employment Agreement.
3.5 WITHHOLDING. Any and all amounts payable under this
Agreement, including, without limitation, amounts payable under this Article III
and Article VII, which are subject to withholding for such federal, state and
local taxes as the Company, in its reasonable judgment, determines to be
required pursuant to any applicable law, rule or regulation.
ARTICLE IV
WORKING FACILITIES, EXPENSES AND INSURANCE
4.1 WORKING FACILITIES AND EXPENSES. Employee shall be
furnished with an office at a location within the greater metropolitan area of
Orlando, Florida, or at such other location as agreed to by Employee and the
Company, and other working facilities and secretarial and other assistance
suitable to his position and reasonably required for the performance of his
duties hereunder. The Company shall reimburse Employee for all of Employee's
reasonable expenses incurred while employed and performing his duties under and
in accordance with the terms and conditions of this Agreement, subject to
Employee's full and appropriate documentation, including, without limitation,
receipts for all such expenses in the manner required pursuant to Company's
policies and procedures and the Internal Revenue Code of 1986, as amended (the
"Code") and applicable regulations as are in effect from time to time.
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4.2 INSURANCE. The Company may secure in its own name or
otherwise, and at its own expense, life, disability and other insurance covering
Employee or Employee and others, and Employee shall not have any right, title or
interest in or to such insurance other than as expressly provided herein.
Employee agrees to assist the Company in procuring such insurance by submitting
to the usual and customary medical and other examinations to be conducted by
such physicians(s) as the Company or such insurance company may designate and by
signing such applications and other written instruments as may be required by
any insurance company to which application is made for such insurance.
ARTICLE V
ILLNESS OR INCAPACITY
5.1 RIGHT TO TERMINATE. If a term certain is hereafter agreed
to by the parties and during such term, Employee shall be unable to perform in
all material respects his duties hereunder for a period exceeding six (6)
consecutive months by reason of illness or incapacity, this Agreement may be
terminated by the Company in its reasonable discretion pursuant to Section 7.2
hereof.
5.2 RIGHT TO REPLACE. If Employee's illness or incapacity,
whether by physical or mental cause, renders him unable for a minimum period of
thirty (30) consecutive calendar days to carry out his duties and
responsibilities as set forth herein, the Company shall have the right to
designate a person to replace Employee temporarily in the capacity described in
Article I hereof; provided, however, that if Employee returns to work from such
illness or incapacity within the six (6) month period following his inability
due to such illness or incapacity, he shall be entitled to be reinstated in the
capacity described in Article I hereof with all rights, duties and privileges
attendant thereto.
5.3 RIGHTS PRIOR TO TERMINATION. Employee shall be entitled to
his full remuneration and benefits hereunder during such illness or incapacity
unless and until an election is made by the Company to terminate this Agreement
in accordance with the provisions of this Article.
5.4 DETERMINATION OF ILLNESS OR INCAPACITY. For purposes of
this Article V, the term "illness or incapacity" shall mean Employee's inability
to perform his duties hereunder substantially on a full-time basis due to
physical or mental illness as determined by a physician selected by the Company
and the Employee.
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ARTICLE VI
CONFIDENTIALITY
6.1 CONFIDENTIALITY. During the Term of this Agreement and
thereafter for a period of two (2) years, Employee shall not divulge,
communicate, use to the detriment of the Company, or for the benefit of any
other business, firm, person, partnership or corporation, or otherwise misuse,
any "Confidential Information", pertaining to the Company including, without
limitation, all (i) data or trade secrets, including secret processes, formulas
or other technical data; (ii) production methods; (iii) customer lists; (iv)
personnel lists; (v) proprietary information; (vi) financial or corporate
records; (vii) operational, sales, promotional and marketing methods and
techniques; (viii) development ideas, acquisition strategies and plans; (ix)
financial information and records; (x) "know-how" and methods of doing business;
and (xi) computer programs, including source codes and/or object codes and other
proprietary, competition-sensitive or technical information or secrets developed
with or without the help of Employee. Employee acknowledges that any such
information or data he may have acquired was received in confidence and by
reason of his relationship to the Company. Confidential Information, data or
trade secrets shall not include any information which: (a) at the time of
disclosure is within the public domain; (b) after disclosure becomes a part of
the public domain or generally known within the industry through no fault, act
or failure to act, error, effort or breach of this Agreement by Employee; (c) is
known to the recipient at the time of disclosure; (d) is subsequently discovered
by Employee independently of any disclosure by the Company; (e) is required by
order, statute or regulation, of any governmental authority to be disclosed to
any federal or state agency, court or other body; or (f) is obtained from a
third party who has acquired a legal right to possess and disclose such
information.
6.2 RECORDS. All documents, papers, materials, notes, books,
correspondence, drawings and other written and graphic records relating to the
Business of the Company which Employee shall prepare or use, or come into
contact with, shall be and remain the sole property of the Company and,
effective immediately upon the termination of the Employee's employment with the
Company for any reason, shall not be removed from the Company's premises without
the Company's prior written consent and any such documents, papers, materials,
notes, books, correspondence, drawings and other written and graphic records
upon request shall be returned to the Company.
ARTICLE VII
TERMINATION
7.1 TERMINATION FOR CAUSE. This Agreement and the employment
of Employee may be terminated by the Company "For Cause" under any one of the
following circumstances:
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(a) Employee has committed any material act of fraud,
misappropriation or theft against the Company.
(b) Employee's default breach of any material provision of
this Agreement; provided, that Employee shall not be in default
hereunder unless (i) he shall have failed to cure such default or
breach within thirty (30) days of written notice thereof by the Company
to Employee or (ii) Employee shall have duly received notice of at
least three (3) prior instances of such breach or default (whether or
not cured by Employee).
(c) Employee is engages in willful misconduct, gross
misconduct or is grossly negligent in the performance of his duties
hereunder.
(d) At the election of the Employee.
(e) Employee is convicted of or pleads guilty to a felony
offense which is directly related to his duties and responsibilities to
the Company or that might otherwise materially adversely affect the
Company or Employee's ability to carry out his duties and
responsibilities pursuant to this Agreement.
A termination For Cause under this Section 7.1 shall be
effective upon the date set forth in a written notice of termination.
7.2 TERMINATION WITHOUT CAUSE. This Agreement and the
employment of the Employee may be terminated "Without Cause" as follows:
(a) By mutual agreement of the parties hereto.
(b) At the election of the Company by its giving not less than
sixty (60) days prior written notice to Employee in the event of an
illness or incapacity described in Article 5.1.
(c) Upon the removal of Employee from the office of Chief
Executive Officer of the Company or in the event the Company fails to
afford Employee the power and authority generally commensurate with the
position of Chief Executive Officer.
(d) Upon Employee's death.
(e) At the election of the Employee if the Company requires
Employee to relocate his residence outside of Orlando, Florida.
A termination Without Cause under Section 7.2(b) or (e) hereof
shall be effective upon the date set forth in a written notice of termination
delivered in accordance with the notice provisions of such sections. A
termination Without Cause under Sections 7.2(a) or (d) shall be
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automatically effective upon the date of mutual agreement or the date of death
of the Employee, as the case may be. A termination Without Cause under Section
7.2(c) shall be automatically effective upon the date such event takes place.
7.3 EFFECT OF TERMINATION FOR CAUSE. If Employee's employment
is terminated "For Cause":
(a) Employee shall be entitled to his base salary under
Section 3.1 hereof, if any, through the date of termination.
(b) Employee shall be entitled to accrued incentive
compensation under Section 3.2 hereof, if any, through the date of
termination.
(c) Employee shall be entitled to reimbursement for expenses
accrued through the date of termination in accordance with the
provisions of Section 4.1 hereof.
(d) All unvested Option Shares under Section 3.3 hereof shall
be forfeited.
(f) Except as provided in Article XI, this Agreement shall
thereupon terminate and cease to be of any further force or effect.
7.4 EFFECT OF TERMINATION WITHOUT CAUSE. If Employee's
employment is terminated "Without Cause":
(a) Employee shall be entitled to accrued base salary under
Section 3.1, if any, hereof through the date of termination.
(b) Employee shall be entitled to reimbursement for expenses
accrued through the date of termination in accordance with the
provisions of Section 4.1 hereof.
(c) Employee shall be entitled to receive all amounts of
incentive compensation as would have been payable under Section 3.2
hereof through the expiration of the Term hereof, which amounts shall
be paid as and when the same would have been paid under the Agreement
had it not been terminated.
(e) Employee shall be entitled to receive all benefits as
would have been awarded under Section 4.1 hereof through the expiration
of the Term hereof, which benefits shall be awarded as and when the
same would have been awarded under the Agreement had it not been
terminated.
(f) All unvested Option Shares under Section 3.3 hereof shall
immediately vest in full.
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(g) All debts, obligations and/or guarantees for which
Employee is personally responsible and for which the Company has
received a benefit shall be satisfied or Employee shall be released to
his satisfaction from such debts and obligations.
(h) Except as provided in Article XI, this Agreement shall
thereupon terminate and cease to be of any further force or effect.
ARTICLE VIII
NON-COMPETITION AND NON-INTERFERENCE
8.1 NON-COMPETITION. Employee agrees that during the Term of
this Agreement and, in the case of a termination "For Cause", for a period of
two (2) years thereafter, Employee will not, directly, indirectly, or as an
agent on behalf of or in conjunction with any person, firm, partnership,
corporation or other entity, own, manage, control, join, or participate in the
ownership, management, operation, or control of, or be financially interested in
or advise, lend money to, or be employed by or provide consulting services to,
or be connected in any manner with any person engaged in business which competes
with the Company and/or its subsidiaries anywhere within the United States of
America.
8.2 NON-INTERFERENCE. Employee agrees that during the Term of
this Agreement and, in the case of a termination "For Cause", for a period of
two (2) years thereafter, Employee will not, directly, indirectly or as an agent
on behalf of or in conjunction with any person, firm, partnership, corporation
or other entity, induce or entice any employee of the Company to leave such
employment or cause anyone else to do so.
8.3 SEVERABILITY. If any covenant or provision contained in
Article VIII is determined to be void or unenforceable in whole or in part, it
shall not be deemed to affect or impair the validity of any other covenant or
provision. If, in any arbitral or judicial proceeding, a tribunal shall refuse
to enforce all of the separate covenants deemed included in this Article VIII,
then such unenforceable covenants shall be deemed eliminated from the provisions
hereof for the purpose of such proceedings to the extent necessary to permit the
remaining separate covenants to be enforced in such proceedings.
ARTICLE IX
INDEMNIFICATION
9.1. INDEMNIFICATION. The Employer shall to the full extent
permitted by law indemnify, defend and hold harmless Employee from and against
any and all claims, demands, liabilities, damages, losses and expenses
(including reasonable attorney's fees, court costs and disbursements) arising
out of the performance by him of his duties hereunder except in the case
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of his willful misconduct and will carry directors and officers' insurance of at
least $1,000,000 with $25,000 deductible.
ARTICLE X
MISCELLANEOUS
10.1 NO WAIVERS. The failure of either party to enforce any
provision of this Agreement shall not be construed as a waiver of any such
provision, nor prevent such party thereafter from enforcing such provision or
any other provision of this Agreement.
10.2 NOTICES. Any notice to be given to the Company and
Employee under the terms of this Agreement may be delivered personally, by
telecopy, telex or other form of written electronic transmission, or by
registered or certified mail, postage prepaid, and shall be addressed as
follows:
IF TO THE COMPANY: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
IF TO EMPLOYEE:
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Either party may hereafter notify the other in writing of any change in
address. Any notice shall be deemed duly given (i) when personally delivered,
(ii) when telecopied, telexed or transmitted by other form of written electronic
transmission (upon confirmation of receipt) or (iii) on the third day after it
is mailed by registered or certified mail, postage prepaid, as provided herein.
10.3 SEVERABILITY. The provisions of this Agreement are
severable and if any provision of this Agreement shall be held to be invalid or
otherwise unenforceable, in whole or in part, the remainder of the provisions,
or enforceable parts thereof, shall not be affected thereby.
10.4 SUCCESSORS AND ASSIGNS. The rights and obligations of the
Company under this Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the Company, including the survivor upon any
merger, consolidation, share exchange or combination of the Company with any
other entity. Employee shall not have the right to assign, delegate or otherwise
transfer any duty or obligation to be performed by him hereunder to any person
or entity.
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10.5 ENTIRE AGREEMENT. This Agreement supersedes all prior and
contemporaneous agreements and understandings between the parties hereto, oral
or written, and may not be modified or terminated orally. No modification,
termination or attempted waiver shall be valid unless in writing, signed by the
party against whom such modification, termination or waiver is sought to be
enforced. This Agreement was the subject of negotiation by the parties hereto
and their counsel. The parties agree that no prior drafts of this Agreement
shall be admissible as evidence (whether in any arbitration or court of law) in
any proceeding which involves the interpretation of any provisions of this
Agreement.
10.6 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Florida without
reference to the conflict of law principles thereof.
10.7 SECTION HEADINGS. The section headings contained herein
are for the purposes of convenience only and are not intended to define or limit
the contents of said sections.
10.8 FURTHER ASSURANCES. Each party hereto shall cooperate and
shall take such further action and shall execute and deliver such further
documents as may be reasonably requested by the other party in order to carry
out the provisions and purposes of this Agreement.
10.9 GENDER. Whenever the pronouns "he" or "his" are used
herein they shall also be deemed to mean "he" or "his" or "it" or "its" whenever
applicable. Words in the singular shall be read and construed as though in the
plural and words in the plural shall be read and construed as though in the
singular in all cases where they would so apply.
10.10 COUNTERPARTS. This Agreement may be executed in
counterparts, all of which taken together shall be deemed one original.
ARTICLE XI
SURVIVAL
11.1 SURVIVAL. The provisions of Articles VI, VII, VIII, and
X, of this Agreement shall survive the termination of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
BackGenesis, Inc.
a Delaware Corporation,
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EMPLOYEE
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▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.