EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into by and
between GISH BIOMEDICAL, INC., a California corporation ("Company"), and RON
GANGEMI ("Employee").
RECITALS
A. The Company is acquiring certain assets of Creative Medical
Development, Inc. ("CMD") pursuant to an Asset Purchase Agreement dated
September 13, 1995, ("CMD Acquisition"); and
B. Employee has been employed by CMD since 19__ . The Company desires to
employ Employee once the CMD Acquisition is completed, and Employee desires to
accept such employment, on the terms and conditions set forth in this Agreement;
Therefore, the parties agree as follows:
1. EMPLOYMENT: Employee shall be employed as a General Manager of the
Company reporting to Jack Brown, and shall faithfully and diligently perform all
duties and responsibilities required of such position or assigned by the Company
from time to time.
2. TERM: This Agreement and Employee's employment shall commence on
April 17, 1996 and shall continue until April 17, 1997 ("Initial Term"), unless
terminated earlier in accordance with this Agreement, and thereafter Employee
shall be employed by the Company for an indefinite term until terminated in
accordance with this Agreement.
3. LOCATION: Unless the parties otherwise agree in writing, Employee
shall be employed at the facilities located at 870 Gold Flat Road, Nevada City,
CA 95959, or elsewhere in the Grass Valley/Nevada City area, but from time to
time may be required to travel temporarily to other locations to perform
assigned duties and responsibilities.
4. COMPENSATION AND BENEFITS: In consideration for all services to be
performed under this Agreement, Employee shall receive the following
compensation and benefits:
A. SALARY: Employee shall be paid a base salary at the rate of One
Hundred Ten Thousand Dollars ($110,000) per year.
B. STOCK AWARD: Employee shall be awarded 4,687.5 shares of the
Company's common stock on each of the following dates: July 17, 1996,
October 17, 1996, January 17, 1997 and April 17, 1997, for a total award of
18,750 shares, unless the Employee is terminated earlier for Cause as
provided in Section 5(C) of this Agreement, in which case Employee shall
not be entitled to any further awards of stock (or any pro rata portion)
under this subsection after the effective date of such termination.
C. STOCK BONUS: Employee shall be awarded an additional 18,750
shares of the Company's common stock upon completion all of the following
upgrades to the 480 pump: (1) ultrasonic air detector; (2) modem
communication software; and (3) circadian rhythm software.
D. STOCK OPTIONS: Employee shall be granted options to purchase the
following number of shares of the Company's common stock pursuant to the
Company's Incentive Stock Option, Nonqualified Stock Option and Restricted
Stock Purchase Plan-1987 to be vested and exercisable in accordance with
the terms of the Plan upon achievement each of the following milestones:
(1) Options to purchase 12,500 shares exercisable upon the
completion of the "compounder" determined by receipt of 510k market
approval and customer acceptance in the field;
(2) Options to purchase 12,500 shares exercisable at such time,
if any, within one (1) year from the closing date of the CMD
Acquisition that the net sales of products derived from the Assets
aggregate $3,000,000 for the prior 12 month period; and
(3) Options to purchase 12,500 shares exercisable at such time,
if any, within two (2) years from the closing date of the CMD
Acquisition that the net sales of products derived from the Assets
aggregate $6,000,000 for the prior 12 month period.
E. VACATION: Employee shall accrue vacation in accordance with the
Company's vacation policy for comparable employees, except that Employee's
seniority with the Company shall be calculated from Employee's date of hire
by CMD solely for purposes of vacation accrual.
F. EMPLOYEE BENEFIT PLANS: Employee shall be entitled to participate
in such group medical, dental, visual, and other benefit plans as the
Company may offer from time to time for personnel of comparable stature.
G. AUTOMOBILE ALLOWANCE: Employee shall be paid an allowance of Four
Hundred Fifty Dollars ($450) per month of active employment toward the
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use and maintenance of an automobile in connection with Employee's
employment under this Agreement.
H. EXPENSE REIMBURSEMENT: The Company shall reimburse Employee for
all reasonable and properly documented business expenses necessarily
incurred in connection with Employee's performance of his duties under this
Agreement.
5. TERMINATION: This Agreement and Employee's employment can be
terminated at any time during or after the Initial Term as follows:
A. DEATH: This Agreement shall terminate immediately upon Employee's
death, in which event the Company's only obligation shall be to pay all
compensation owing for services rendered by Employee prior to the date of
his death.
B. DISABILITY: To the extent permitted by law, the Company may
terminate Employee's employment in the event that Employee is disabled from
performing the essential functions of his position, with reasonable
accommodation, in which event the Company's only obligation shall be to pay
all compensation owing for services rendered by Employee prior to the date
of his termination.
C. TERMINATION FOR CAUSE: The Company may terminate this Agreement
immediately upon written notice to Employee in the event Employee (i)
commits any material misconduct, willful breach, or habitual neglect of his
duties, (ii) commits any material violation of any policy or procedure of
the Company, or (iii) engages in poor performance that is not cured after
counseling by the Company. In such event, the Company's sole obligation to
Employee shall be to pay all compensation owing for services rendered by
Employee prior to notice of termination under this subsection.
D. TERMINATION WITHOUT CAUSE: The Company in its sole discretion may
also terminate Employee's employment at any time without cause or prior
warning. In the event such termination without cause takes effect during
the Initial Term, the Company's sole obligations shall be as follows: (i)
to continue paying Employee's base salary through regular payroll, minus
appropriate withholding and payroll deduction, for the remainder of the
Initial Term; (ii) to provide Employee with the stock awards described in
Section 4(B) of this Agreement for the remainder of the Initial Term; (iii)
to provide Employee with the stock bonus described in Section 4(C) of this
Agreement but only if the conditions described in that Section are
fulfilled within one year from the date such termination without cause
takes effect; and (iv) to provide Employee with the stock options described
in Section 4(D) of this Agreement, if any, but only if milestones described
in that Section are achieved within one year from the date
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such termination without cause takes effect. In the event Employee is
terminated by the Company without cause after the Initial Term, the
Company's sole obligations shall be: (vi) to provide two (2) weeks notice
or pay in lieu thereof through the Company's regular payroll, minus
appropriate withholding and payroll deductions; (vii) to provide Employee
with the stock bonus described in Section 4(C) of this Agreement, but only
if all of the conditions described in that Section are fulfilled prior to
the effective date of Employee's termination; (viii) to provide Employee
with the stock options described in Section 4(D)(1) or (2) or both of this
Agreement but only if the respective milestones described in those Sections
are achieved within six (6) months after the effective date of Employee's
termination; and (ix) to provide Employee with the stock bonus described in
Section 4(D)(3) of this Agreement but only if the milestones described in
that Section are achieved within twelve (12) months after the effective
date of Employee's termination.
E. FAILURE TO COMPLETE CMD ACQUISITION: Notwithstanding any
provision of this Agreement to the contrary, in the event the CMD
Acquisition is not completed for any reason, whether or not Employee has
already commenced employment with the Company, the Company may terminate
this Agreement and Employee's employment without cause or prior warning in
which case the Company's sole obligation shall be to pay all compensation
owing for the services rendered by Employee, if any, prior to notice of
termination.
F. TERMINATION BY EMPLOYEE: Employee may terminate his employment at
any time after the Initial Term by giving written notice to the Company in
accordance with the Company's policy on notice of resignation by comparable
employees, in which case the Company's sole obligation shall be to pay all
compensation owing for the services rendered by Employee prior to notice of
termination.
G. COMPANY'S SOLE OBLIGATION: In the event of any termination
pursuant to this Section 4, the payment of the amounts set forth in
subsections (A) through (F) above as applicable constitute the sole
obligations of the Company and are in lieu of any damages or other
compensation that Employee may claim in connection with this Agreement.
H. RETURN OF COMPANY PROPERTY: Upon termination of employment for
any reason, Employee shall immediately return to the Company without
condition all files, records, keys, and other property of the Company.
6. CONFIDENTIALITY: Employee acknowledges and agrees that Employee will
be entrusted with trade secrets and proprietary information regarding the
products, processes, methods of manufacture and delivery, know-how, designs,
formula, work in progress, research and development, computer software and data
bases,
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copyrights, trademarks, patents, marketing techniques, and future business
plans, as well as customer lists and information concerning the identity, needs,
and desires of actual and potential customers of the Company and its
subsidiaries, joint ventures, partners, and other affiliated persons and
entities ("Confidential Information"), all of which derive significant economic
value from not being generally known to others outside the Company.
Confidential Information shall not include information which has become known or
readily accessible to the trade through lawful and proper means.
A. During the entire term of Employee's employment with the Company,
and at all times thereafter, Employee shall not disclose or exploit any
Confidential Information except as necessary in the performance of
Employee's duties under this Agreement or with the Company's express
written consent.
B. During the entire term of Employee's employment by the Company and
for one year thereafter, Employee shall not induce or attempt to induce any
employee of the Company to leave the Company's employ except for the sole
benefit of the Company or with its express written consent.
C. Employee acknowledges and agrees that any violation of this
Section 5 would cause immediate irreparable damage to the Company, and that
it would be extremely difficult or impossible to determine the amount of
damage caused to the Company. Employee therefore consents to the issuance
of a temporary restraining order, preliminary and permanent injunction, and
other appropriate relief to restrain any actual or threatened violation of
this Section, without limiting any other remedies the Company may have.
7. INVENTIONS: Any and all patents, copyrights, trademarks, inventions,
discoveries, developments, or trade secrets developed or perfected by Employee
during or as the result of his employment with the Company shall constitute the
sole and exclusive property of the Company. Employee shall disclose all such
matters to the Company, assign all right, title and interest Employee may have
in them, and cooperate with the Company in obtaining and perfecting any patent,
copyright, trademark, or other legal protection. This Section 6 shall not apply
to any invention which qualifies fully under California Labor Code section 2870,
a true copy of which is attached to this Agreement as Exhibit A.
8. CONFLICT OF INTERESTS: During the term of this Agreement, Employee
shall devote Employee's full working time, ability, and attention to the
business of the Company, and shall not accept other employment or engage in any
other outside business activity which interferes with the performance of
Employee's duties and responsibilities under this Agreement or which involves
actual or potential competition with the business of the Company, except with
the express written consent of the President.
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9. EMPLOYEE BENEFIT PLANS: All of the employee benefit plans referred to
or contemplated by this Agreement shall be governed solely by the terms of the
underlying plan documents and by applicable law. Nothing in this Agreement
shall impair the Company's right to amend, modify, replace, and terminate any
and all such plans in its sole discretion as provided by law, or to terminate
this Agreement in accordance with its terms. This Agreement is for the sole
benefit of Employee and the Company, and is not intended to create an employee
benefit plan or to modify the terms of existing plans.
10. ASSIGNMENT: This Agreement may not be assigned by Employee, but may
be assigned by the Company to any successor in interest to its business. This
Agreement shall bind and inure to be benefit of the Company's successors and
assigns, as well as Employee's heirs, executors, administrators, and legal
representatives.
11. NOTICES: All notices required by this Agreement may be delivered by
first class mail at the following addresses:
To the Company: Gish Biomedical, Inc.
2681 Kelvin Avenue
Irvine, CA 92714-5821
To Employee: Ron Gangemi
11950 Willow Valley Rd.
Nevada City, CA 95959
12. AMENDMENT: This Agreement may be modified only by written agreement
signed by the party against whom any amendment is to be enforced.
13. CHOICE OF LAW: This Agreement shall be governed by the laws of the
State of California.
14. PARTIAL INVALIDITY: In the event any provision of this Agreement is
void or unenforceable, the remaining provisions shall continue in full force and
effect.
15. WAIVER: No waiver of any breach of this Agreement shall constitute a
waiver of any subsequent breach.
16. ARBITRATION: Any dispute involving the interpretation or enforcement
of this Agreement or relating in any manner to Employee's employment,
compensation, or termination shall be resolved by impartial arbitration in
Orange County, California, under the auspices of the American Arbitration
Association. The decision of the arbitrator shall be final and binding. Both
parties acknowledge they are waiving the right to trial by jury on any matter
encompassed by this provision. Each party shall bear its own costs and
attorneys' fees in any such arbitration.
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17. COMPLETE AGREEMENT: This Agreement contains the entire agreement
between the parties with respect to the terms and conditions of Employee's
employment by the Company, and supersedes any and all prior and contemporaneous
oral and written agreements or negotiations which shall have no further force
and effect.
"Employee"
/s/ RON GANGEMI Dated: April 17, 1996
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Ron Gangemi
"Company"
GISH BIOMEDICAL, INC.
Dated: April 17, 1996
- ------------------------
Name: Jack Brown
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Title: President
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EXHIBIT A
CALIFORNIA LABOR CODE SECTION 2870
EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS
"(a) Any provision in an employment agreement which provides that an
employee shall assign or offer to assign any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer.
(2) Result from any work performed by the employee for the employer.
(b) To the extent a provision in an employment agreement purports to require
an employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable."
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