EMPLOYMENT AGREEMENT
This Agreement is made and entered into by and between CARDIOTRONICS
SYSTEMS, INC., a Colorado corporation, hereinafter referred to as "Employer,"
and Bruno T. Bisceglia, Jr. hereinafter referred to as "Employee":
WHEREAS, Employee has been Vice President of Key Accounts for Employer and
has heretofore faithfully and diligently performed his duties on behalf of
Employer; and
WHEREAS, Employer and Employee desire to set out the terms of Employee's
employment, all as more particularly set forth below.
NOW, in consideration of the mutual promises of the parties and the mutual
benefits they will gain by their performances thereof, all in accordance with
the provisions hereinafter set forth,
IT IS, THEREFORE, AGREED:
1. TERM OF EMPLOYMENT.
a. BASIC TERM. Employer hereby agrees to employ Employee to
render services to Employer in the position and with the duties and
responsibilities described in Section 2 for a period ("Period of Employment") of
one (1) year commencing on April 1, 1996. This Agreement shall terminate upon
the earlier of (i) April 1, 1997 , or as extended under Section 1(b) (the "Term
Date"); or (ii) the date this Agreement is terminated in accordance with Section
4. Employee hereby accepts and agrees to such hiring, engagement and
employment.
b. RENEWAL.
(1) Subject to Section 4, Employee's employment will be
automatically renewed for an additional one (1) year period (without any action
by either party) on the Term Date and on each anniversary date thereof, unless
Employer gives written notice of termination to Employee at least sixty (60)
days prior to the expiration of the then-current term of the Agreement.
Employer's right to terminate the Period of Employment under this Section 1(b),
instead of renewing the Agreement, shall be without cause and shall entitle
Employee to the benefits and compensation set forth in Section 4(a)(1);
(2) If the Term Date is less than six (6) months after a
change in "control" of the Employer as defined in Rule 405 of the Securities Act
of 1933, the Period of Employment shall be extended for six (6) months, so that
the Term Date following a change of "control" a shall be either the original
Term Date or six (6) months after the change in "control,"
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whichever is longer. Following an adjustment of a Term Date under this
provision, any subsequent renewal shall be pursuant to Section 1(b)(1).
2. POSITION, DUTIES, RESPONSIBILITIES.
a. POSITION. Employee hereby accepts employment at Employer's
facility in San Diego with Employer as Vice President of Key Accounts for
Employer. Employee shall devote his best efforts and his full time and
attention to the performance of the services customarily incident to such office
and to such other services as may be reasonably requested by Employer. Employer
shall retain full direction and control of the means and methods by which
Employee performs the above services.
b. OTHER ACTIVITIES. Except upon the prior written consent of
the Board of Directors of Employer, Employee, during the Period of Employment,
will not (i) accept any other employment or (ii) engage, directly or indirectly,
in any other business activity (whether or not pursued for pecuniary advantage)
that is or may be competitive with, or that might place him in a competing
position to that of Employer. However, Employee is not prohibited from
investing his personal assets in businesses which do not compete with Employer
in such form or manner as will not require any services on the part of the
Employee in the operation of the affairs of the companies in which such
investments are made and in which his participation is solely that of an
investor. Nor shall Employee be prohibited from purchasing securities in any
corporation whose securities are regularly traded provided that such purchase
shall not result in his collectively owning beneficially at any time one percent
(1%) or more of the equity securities of any corporation engaged in a business
competitive to that of Employer.
3. COMPENSATION, BENEFITS, EXPENSES.
a. COMPENSATION. In consideration of the services to be
rendered hereunder, Employee shall be paid a base annual salary at the rate of
Sixty Thousand Dollars ($60,000) per year, payable in equal biweekly payments on
Employer's normal payroll dates.
b. SALARY INCREASES. Employee is entitled to reasonable annual
increases in Employee's base salary to be established at the discretion of
Employer's Board of Directors.
c. COMMISSIONS. In addition to the base salary and other
compensation specified herein, the Employee may earn commissions in accordance
with a commission plan established by Employer's Board of Directors for him.
d. ANNUAL BONUS. In addition to the base salary and other
compensation specified herein, the Employee may earn an annual bonus, targeted
to be Twenty Thousand Dollars ($20,000), provided he attains individual
objectives and Employer attains corporate objectives established by Employer's
Board of Directors.
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e. STOCK OPTIONS. In addition to the base salary and other
compensation specified herein, Employee may receive additional options to
purchase shares of Common Stock of Employer pursuant to Employer's Stock Option
Plan, at the discretion of Employer's Board of Directors.
f. BENEFITS. Employee shall also be eligible for and
participate in such fringe benefits on the same terms as provided for other
employees, including health, dental, life and disability insurance and
retirement programs which may be adopted from time to time by Employer.
g. VACATION. Employee shall earn paid vacation time according
to Employer's current policy.
h. EXPENSES. Employer shall reimburse Employee on a monthly
basis for receipts he submits for all reasonable and necessary travel and other
business expenses incurred by Employee in the performance of his duties
hereunder, consistent with Employer's normal expense reimbursement policy.
4. TERMINATION OF PERIOD OF EMPLOYMENT.
a. TERMINATION BY COMPANY.
(1) TERMINATION WITHOUT CAUSE. Employer may terminate this
Agreement at its option, without cause, upon written notice to Employee. In the
event of such a termination, Employer agrees to provide Employee with the
following:
(a) if there has not been a change in "control" of the
Employer, as defined in Rule 405 of the Securities Act of 1933, as amended,
salary continuation in the amount of Ten Thousand Dollars ($10,000.00) per
month, less applicable taxes, payable biweekly until Employee obtains employment
or for twelve (12) months, whichever time period is shorter; or
(b) if there has been a change in "control" of the
Employer as defined in Rule 405 of the Securities Act of 1933, (i) a lump sum
payment of Sixty Thousand Dollars ($60,000.00), less applicable payroll taxes,
and (ii) in the event Employee has not obtained employment six (6) months after
his termination, salary continuation in the amount of Ten Thousand Dollars
($10,000.00) per month, less applicable payroll taxes, payable biweekly until
Employee obtains employment or for six (6) months, whichever time period is
shorter; and
(c) a pro rata payment of Employee's target bonus to
be determined pursuant to Employer's Incentive Plan;
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(d) accelerated vesting of all stock options granted
Employee prior to the date of termination;
(e) payment of Employee's COBRA premium, less
Employee's current contribution prior to termination, for continuation of
medical and dental insurance for twelve (12) months, or until Employee obtains
employment, whichever time period is shorter; and
(f) out-placement assistance with a firm of Employee's
choosing to a maximum of Five Thousand Dollars ($5,000).
(2) TERMINATION FOR CAUSE. Employer may terminate, without
liability, this Agreement for cause as defined below. Employer shall pay
Employee the compensation to which he is entitled pursuant to section 3(a)
through the end of the day upon which notice is given, and thereafter Employer's
obligations hereunder shall terminate. Termination shall be for cause if:
(a) the death of Employee;
(b) the physical or mental disability of Employee
which prevents him from performing the essential job functions of his position
for a period of at least 90 days;
(c) the conviction of Employee of a felony;
(d) misconduct, dishonesty, habitual neglect, or
incompetence in the management of the affairs of the Employer;
(e) the refusal or failure by Employee to act in
accordance with any lawful direction or order of the Employer, or the act or
failure to act by Employee which is in bad faith and to the detriment of the
Employer; or
(f) the breach of any term of this Agreement.
b. TERMINATION BY EMPLOYEE. Employee may terminate this
Agreement by giving 30 days' written notice to Employer at Employer's principal
place of business. In such event, Employer's obligations hereunder shall
terminate after paying Employee the compensation provided for in section 3(a)
and (g) through the last day he works. However, a termination by Employee shall
be a termination without cause pursuant to Section 4(a)(1) if caused by any of
the following:
1. Employer's request or direction that Employee relocate
geographically more than fifty (50) miles from Employer's current location; or
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2. any substantial change by Employer of Employee's
compensation, benefits, or job responsibilities.
5. TRADE SECRETS/CONFIDENTIAL INFORMATION. Employer intends to and
has expended substantial sums of money and devoted a great deal of time, labor
and effort to the development, creation and acquisition of a large body of
confidential information that is used by it in its business and is not generally
known or available to the public. Such confidential information gives Employer a
valuable advantage over its competitors and prospective competitors and is
proprietary to Employer. Employee agrees to treat any information of Employer
which is not readily publicly available as a Trade Secret of Employer unless
Employer advises Employee otherwise in writing. Employee acknowledges that
Trade Secrets include not only technical information, but any business
information that Employer treats as confidential. Trade Secrets include, but
are not limited to, all information protected under the Uniform Trade Secrets
Act. Employee agrees that he will not, without Employer's prior written
consent, publish, disclose or otherwise use at any time either during or
subsequent to his employment with Employer, any Trade Secrets or other
confidential information of Employer. Upon termination of Employee's
employment, Employee agrees to promptly return to Employer all correspondence,
drawings, blueprints, manuals, letters, notes, notebooks, reports, flowcharts,
programs, proposals, computer records, computer disks or any other physical
items or documents relating to Employer's Trade Secrets or other confidential
information, and agrees that he will not make or retain any unauthorized copies
or other reproductions of such materials.
6. INVENTIONS.
(a) The Employee hereby sells, transfers and assigns to Employer
or to any person, entity designated by Employer all of the entire right, title
and interest of the Employee in and to all inventions, ideas, disclosures and
improvements, whether patented or unpatented, and copyrightable material, made
or conceived by the Employee, solely or jointly, during the term hereof which
relate to methods, apparatus, designs, products, processes or devices, sold,
leased, used or under consideration or development by Employer or any of its
subsidiaries, or which otherwise relate to or pertain to the business, functions
or operations of Employer or any of its subsidiaries or which arise from the
efforts of the Employee during the course of his employment for Employer or any
of its subsidiaries. The Employee shall communicate promptly and disclose to
Employer, in such form as Employer requests, all information, details and data
pertaining to the aforementioned inventions, ideas, disclosures and
improvements; and the Employee shall execute and deliver to Employer such formal
transfers and assignments and such other papers and documents as may be
necessary or required of the Employee to permit Employer or any person or entity
designated by Employer to file and prosecute the patent applications and, as to
copyrightable material, to obtain copyright thereof. Any invention relating to
the business of Employer and disclosed by the Employee within one year following
the termination of this Agreement shall be deemed to fall within the provisions
of this paragraph unless proved to have been first conceived and made following
such termination.
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(b) The Employee has been notified and understands that the
provisions of this paragraph 6 do not apply to any of the aforementioned
inventions, ideas, disclosures and improvements that qualify fully under the
provisions of Section 2870 of the California Labor Code, which states as
follows:
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, or
(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.
7. COVENANTS NOT TO COMPETE OR INTERFERE.
(a) For a period ending twelve months from and after the date of
termination of the Employee's employment hereunder, except for a termination of
employment for disability or without cause, the Employee shall not engage in any
business (whether as an officer, director, owner, employee, partner or other
direct or indirect participant) which is engaged in the manufacturing,
distribution or research and development of any products being sold by, or under
development by, Employer or its subsidiaries as of the date of such termination
of employment, in any geographic area where Employer or such subsidiaries are
then so manufacturing or distributing such products, nor shall the Employee
interfere with, disrupt or attempt to disrupt the relationship, contractual or
otherwise, between Employer and any customer, supplier, lessor, lessee or
employee of Employer.
(b) For a period ending twelve months from and after the date of
termination of the Employee's employment hereunder the Employee shall not
solicit, encourage or take any other action which is intended to induce any
employee of Employer to terminate employment with Employer.
(c) It is the desire and intent of the parties that the
provisions of this paragraph 7 shall be enforced to the fullest extent
permissible under the laws and public policies
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applied in each jurisdiction in which enforcement is sought. Accordingly, if
any particular portion of this paragraph 7 shall be adjudicated to be invalid
or unenforceable, this paragraph 7 shall be deemed amended to delete therefrom
the portion thus adjudicated to be invalid or unenforceable, such deletion to
apply only with respect to the operation of this paragraph in the particular
jurisdiction in which such adjudication is made.
8. INJUNCTIVE RELIEF. If there is a breach or threatened breach of
the provisions of paragraphs 5, 6 or 7 of this Agreement, Employer shall be
entitled to an injunction restraining the Employee from such breach. Nothing
herein shall be construed as prohibiting Employer from pursuing any other
remedies for such breach or threatened breach.
9. INSURANCE. Employer may, at its election and for its benefit,
insure the Employee against accidental loss or death, and the Employee shall
submit to such physical examination and supply such information as may be
required in connection therewith.
10. HEADINGS. The headings and captions of this Agreement are
inserted for convenience only and shall not be used to interpret or construe any
provisions of this Agreement.
11. NOTICES. All notices or other communications required hereunder
shall be made in writing and shall be deemed to have been duly given immediately
if delivered by hand or two (2) business days after being mailed, if mailed,
postage prepaid, by certified or registered mail, return receipt requested, and
addressed to Employer at:
Cardiotronics Systems, Inc.
5966 La Place Court
Carlsbad, California 92008
or to Employee at:
4983 Marin Drive
Oceanside, California 92058
Notice of change of address shall be effective only when done in accordance with
this Section.
12. ENTIRE AGREEMENT.
a. This Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
employment of Employee by Employer. This Agreement contains all of the
covenants and agreements between the parties with respect to such employment,
except as provided herein. The terms of this Agreement are intended by the
parties to be the final expression of their agreement and may not be
contradicted by evidence of any prior, contemporaneous or subsequent agreement.
The parties further intend that this Agreement shall constitute the complete and
exclusive statement of its terms and that no extrinsic evidence whatsoever may
be introduced in a judicial, administrative or other legal
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proceeding involving this Agreement. The terms of this Agreement may only be
modified if done so in writing and signed by the parties.
b. Notwithstanding Subsection (a) of this Section, this
Agreement shall have no effect upon any existing loan agreements, stock option
plans or other agreements affecting the ownership of common stock or other
securities of Employer, which plans or agreements shall nonetheless remain in
full force and effect according to their terms. Nothing in this Agreement is
intended to alter the terms of any written employee benefit plans or employee
welfare plans applicable to Employee.
c. In the event Employer has or will promulgate a general
employee manual or other written employment policies for its employees,
appropriate policies shall apply to Employee except to the extent such policies
are contrary to this Agreement.
13. ASSIGNMENT. This Agreement may be assigned, without the consent
of Employee, by Employer to any person, partnership, corporation, or other
entity which has purchased substantially all the assets of Employer, provided
such assignee assumes all the liabilities of Employer hereunder.
14. ARBITRATION. Any controversy between Employer and Employee
involving the terms or enforceability of this Agreement or claims arising out of
Employee's employment or termination shall, on the written request of either
party, be submitted to binding arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect.
Arbitration under this provision shall be the full and exclusive remedy of the
parties and the award of the arbitrator shall be final and binding upon the
parties.
15. ATTORNEYS' FEES. In the event of any arbitration or judicial
proceeding concerning the execution, performance, termination or other aspect of
this Agreement, or of the employment relationship between Employee and Employer,
the prevailing party in any such dispute shall be entitled to an award of
reasonable attorneys' fees and costs including, without limitation, expert
witness fees and disbursements.
16. AMENDMENTS AND WAIVERS. This Agreement may not be modified,
amended or terminated except as provided in the Agreement or by an instrument in
writing, signed by Employee and by a duly authorized representative of Employer
other than Employee. Through an instrument in writing similarly executed,
either Employee or Employer, as the case may be, may waive compliance by the
other party with any provision of this Agreement that such other party was or is
obligated to comply with or perform, provided, however, that such waiver shall
not operate as a waiver of, or estoppel with respect to, any other or subsequent
failure. The failure of any party to insist in any one or more instances upon
performance with any term or condition of this Agreement shall not be construed
as a waiver of its or his future performance. The obligations of either party
with respect to such term, covenant or condition shall continue in full force
and effect.
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17. LAW GOVERNING AGREEMENT. The validity, interpretation,
enforceability and performance of this Agreement shall be governed by and
construed in accordance with the laws of the State of California.
18. SEVERABILITY AND ENFORCEMENT. If any terms, covenants or
conditions in this Agreement, or the applications thereof to any person, party,
place or circumstance, shall be held by an arbitrator or court of competent
jurisdiction to be invalid, unenforceable or void, the remainder of this
Agreement or the application of such terms, covenants or conditions as applied
to other persons, parties, places and circumstances shall remain in full force
and effect.
19. EMPLOYEE ACKNOWLEDGMENT. Employee acknowledges (i) that he has
consulted with or has had the opportunity to consult with independent counsel of
his own choice, concerning this Agreement and has been advised to do so by
Employer, and (ii) that he has read and understands the Agreement, is fully
aware of its legal effect and has entered into it freely based on his own
judgment.
20. JOINT PREPARATION. This Agreement is deemed to have been
prepared jointly by the parties hereto and to any uncertainty or ambiguity
existing herein, if any, shall not be interpreted against any party, but shall
be interpreted according to the application of the rules of interpretation for
arms length agreements taking into account the specific intention of the parties
wherever such intention is discernable.
EMPLOYER: CARDIOTRONICS SYSTEMS, INC.
By: /s/ Robert S. Grimes Dated: 10 May 96
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Title: Chairman - Board of Directors
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EMPLOYEE: Bruno T. Bisceglia, Jr.
By: /s/ Bruno T. Bisceglia, Jr. Dated: 10 May 96
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