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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Agreement is made by and between LifeQuest Medical, Inc. (the
"Company"), a Delaware corporation, and William H. Bookwalter ("Employee").
ARTICLE 1
COMPENSATION AND TERM
1.01 Basic Compensation. As compensation for the services to be
rendered hereunder, the Company shall pay Employee a salary of $8,333 per month
("Base Salary"), which shall be payable in at least monthly installments during
the term of this Agreement. Employee shall also be entitled to receive cash
commissions upon the terms set forth in Section 1.02 below.
In addition, the Company, Inc. ("LifeQuest") and the Employee have
entered into a Non-Qualified Stock Option Agreement of even date herewith
pursuant to which LifeQuest has granted to Employee non-qualified stock options
to receive up to 60,000 shares of Common Stock, $.001 par value ("Common
Stock"), of the Company, Inc. upon the terms and conditions set forth in such
agreement.
1.02 Commission. As additional compensation for the services to be
rendered hereunder, the Company shall pay Employee, within 30 days after the
end of each fiscal quarter in which Employee is employed by the Company, a
commission equal to 2% of Gross Annual Profit during the preceding calendar
quarter, beginning with the calendar quarter ending December 31, 1997.
For the purpose of calculating Employee's commission, "Gross Annual
Profit" shall mean the gross profit of the Company on sales of "WHB Products"
sold during each 12-month period during the term of this Agreement beginning
with the 12-month period ending September 30, 1998, as determined according to
generally accepted accounting principles but excluding commissions. The term
"WHB Products" as used herein shall mean those general surgical products
(excluding minimally invasive surgical products) and repair services sold or
initiated by Employee or any of the Company's sales force under the management
of Employee located in the States of Maine, Vermont, New Hampshire,
Connecticut, Massachusetts, Rhode Island, New York, New Jersey, Virginia and
such other states as the Company, in its sole discretion, may designate from
time to time.
1.03 Term. Subject to earlier termination pursuant to Article 5
hereof, this Agreement shall have a term commencing as of the execution date of
this Agreement and ending on September 30, 2000.
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ARTICLE 2
DUTIES OF EMPLOYEE
2.01 Duties. The Company hereby employs Employee to serve as Vice
President of the Company and General Manager of the W.H. Bookwalter business
operations of the Company, or in such other capacities as the Board of the
Company may direct from time to time, reporting directly to the Chief Executive
Officer of the Company, and Employee agrees to perform the duties of such
office as set forth in the bylaws of the Company or as the Board of the Company
may direct from time to time.
2.02 Other Activities. During the term of this Agreement Employee
shall devote his full-time efforts to his duties hereunder.
ARTICLE 3
EMPLOYEE BENEFITS
3.01 Medical and Dental Benefits. The Company agrees to include
Employee in any hospital, surgical, medical, disability and dental benefit
plan(s) that it or LifeQuest may adopt for their respective employees of the
Company.
3.02 Other Benefits. Employee shall be entitled to reasonable and
customary holidays and other benefits that are generally made available to
employees of the Company.
ARTICLE 4
OBLIGATIONS OF THE COMPANY
4.01 Office and Support Staff. The Company shall provide
Employee with such support services as are reasonable to Employee's position or
required for the performance of his duties.
ARTICLE 5
TERMINATION OF EMPLOYMENT
5.01 Termination by the Company for Cause. The Company may at its
option terminate this Agreement for "Cause" (as hereinafter defined) by giving
10 days written notice of termination to Employee.
The term "Cause" shall be limited to the occurrence of the following
events, as determined by the Board of Directors of the Company in its
reasonable judgment: (i) Employee breaches any of the terms of this Agreement,
and fails to cure such breach within 20 days after written notice by the
Company to Employee of such breach; (ii) Employee is convicted of a felony;
(iii) Employee fails, after at least one written warning, to perform duties
ordinarily and reasonably assigned to a vice president of the Company (other
than a failure due to death or physical or mental disability); (iv) Employee
intentionally engages in conduct which is demonstrably and materially injurious
to LifeQuest or one of its subsidiaries (the Company and
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LifeQuest and all of their affiliates and subsidiaries are hereinafter
collectively referred to as the "LifeQuest Parties") subject to any applicable
limitations and procedures contained in the Company's Employee Handbook; (v)
Employee commits fraud or theft of personal or the LifeQuest Parties' property
from any of the LifeQuest Parties' premises; (vi) Employee falsifies any of the
LifeQuest Parties' documents or records; (vii) Employee engages in acts of
gross carelessness or willful negligence to endanger life or property on any of
the LifeQuest Parties' premises; (viii) Employee engages in sexual harassment;
(ix) Employee uses, distributes, possesses or is under the influence of illegal
drugs, alcohol or any other intoxicant on any of the LifeQuest Parties'
premises; or (x) Employee intentionally violates state, federal or local laws
and regulations.
5.02 Termination on Grounds Other Than for Cause. This Agreement
shall terminate immediately on the occurrence of any one of the following
events:
(a) The occurrence of circumstances that make it
impossible or impracticable for the business of the
Company to be continued.
(b) The death of Employee.
(c) The loss of legal capacity by Employee.
(d) Insolvency of the Company.
(e) The continued incapacity on the part of Employee, in
the reasonable opinion of the Company, to perform his
duties for a continuous period of 60 days, unless
waived by the Company and a reasonable determination
by the Company that Employee has not performed his
duties during such period.
5.03 Option to Terminate if Employee Permanently Disabled. If
Employee becomes permanently disabled because of sickness, physical or mental
disability, or any other reason, so that it reasonably appears that Employee
will be unable to perform the essential aspects of his duties under this
Agreement, the Company shall have the option to terminate this Agreement
immediately by giving written notice of termination to Employee.
5.04 Effect of Termination on Compensation. In the event of the
termination of this Agreement prior to the completion of the term of employment
specified in it, pursuant to Section 5.01, 5.02 or 5.03, Employee shall be
entitled to the basic compensation earned by Employee under Section 1.01 to the
date of termination as provided in the Agreement, computed pro rata up to and
including that date, and 2.0% of Adjusted Gross Profit, if any, from the
preceding October 1, to the date of termination, and Employee shall be entitled
to no further compensation, including any compensation under Section 1.02 or
1.03, after the date of such termination.
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ARTICLE 6
PROPRIETARY PROPERTY; CONFIDENTIAL
INFORMATION; NON-COMPETITION
6.01 Duties. Employee understands and agrees that during the term
of this Agreement Employee's duties will include the conception and development
of valuable technology during the course and scope of employment, to be
collectively referred to in this Agreement as "Proprietary Information".
6.02 Ownership. Employee understands and agrees that Company
shall own all right, title and interest in and to all Proprietary Information
created within the scope of Employee's employment. In the case of works
authored or created by Employee, such works are considered a "work made for
hire" under 17 United States Code Section 101. All information and technology,
if any, created by Employee prior to his employment with the Company, and in
which Employee claims ownership, is shown in Schedule 6.2 attached hereto, and
shall not be included in the Proprietary Information.
6.03 Notice and Assistance. Employee shall give adequate written
notice to the Company as soon as practicable of all Proprietary Information
created by Employee during Employee's employment with the Company, assist the
Company in evaluating the Proprietary Information for patent, trade secret and
copyright protection and sign all documents and do all things necessary at the
expense of the Company to assist the Company in the protection, development,
marketing or transfer of such Proprietary Information.
6.04 Assignment. Employee hereby assigns and agrees to assign all
right, title and interest in and to such Proprietary Information to the Company
or its nominee. At the request of the Company, whether during or after the
termination of Employee's employment, Employee shall timely execute or join in
executing all papers or documents required for the filing of patent
applications and copyright registrations in the United States of America and
such foreign countries as the Company may in its sole discretion select, and
shall assign all such patent applications and copyrights to the Company or its
nominee, and shall provide the Company or its agents or attorneys with all
reasonable assistance in the preparation and prosecution of patent applications
and copyright registrations, including drawings, specifications, and the like,
all at the expense of the Company, and shall do all that may be necessary to
establish, protect or maintain the rights of the Company or its nominee in the
inventions, patent applications, Letters Patent and copyrights in accordance
with the spirit of this Agreement.
6.05 Confidential Information. Employee agrees to keep
confidential (i) all Proprietary Information, and (ii) all other information
protected by any of the LifeQuest Parties as trade secrets during the term of
this Agreement (including any leaves of absence) and will neither use nor
disclose the confidential information without written authorization by the
applicable LifeQuest Party for ten years thereafter. For the purposes of this
Agreement, such confidential information shall include information set forth in
any application for Letters Patent unless and until such information is
ultimately published. The Company and Employee mutually agree that the
following types of information shall not be protected by this Agreement:
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(a) Information already in the public domain at the time
Employee received it;
(b) Information which although disclosed in confidence to
Employee is later disseminated by the Company into the public domain;
(c) Information which although received in confidence by
Employee is subsequently disseminated into public domain by a third party
who has not breached any duty to any other party in disseminating such
information; and
(d) Information given by any of the LifeQuest Parties in
confidence to Employee which Employee is expressly authorized in writing by
the applicable LifeQuest Party to use or disclose thereafter.
Employee also understands and agrees that he will maintain in confidence all
information known to him by reason of his employment even if such information
is included in a redacted deposit of a work filed with an application for
copyright registration, if such deposit has been abridged in order to protect
the confidentiality of the information deposited with the Copyright Office.
For purposes of this Agreement, a trade secret "...may consist of any formula,
pattern, device or compilation of information which is used in one's business,
and which gives him an opportunity to obtain an advantage over competitors who
do not know or use it. It may be a formula for a chemical compound, a process
of manufacturing, trading or preserving materials, a pattern for machine or
other device, or a list of customers..." as commonly interpreted by the courts
of the State of Texas. Upon the termination of this Agreement, regardless of
how such termination may be brought about, Employee shall deliver to the
Company any and all documents, instruments, notes, papers or other expressions
or embodiments of Proprietary Property or confidential information which are in
Employee's possession or control.
6.06 Fiduciary Relationship. Employee, by virtue of his high
position of trust and reliance on him by the LifeQuest Parties, understands
that Employee enjoys a fiduciary relationship with the LifeQuest Parties in
carrying out his obligations under this Article 6. Accordingly, Employee
agrees to honor his obligations under this Agreement by conducting himself with
the highest degree of fairness and trust toward the LifeQuest Parties.
6.07 Customer Lists; Non-Solicitation. In consideration of the
benefits of this Agreement, including Employee's access to and limited use of
proprietary and confidential information of the Company, as well as training,
education and experience provided to Employee by the Company directly and/or as
a result of work projects assigned by the Company with respect thereto,
Employee hereby further covenants and agrees that for a period of one year
following the termination of this Agreement for any reason other than an
occurrence of an event described in the provisions of Sections 5.02(a) and
5.02(d) herein, Employee shall not, directly or indirectly, (a) use or make
known to any person or entity the names or addresses of any clients or
customers of any of the LifeQuest Parties, or any other information pertaining
to them, (b) call on, solicit, take away or attempt to call on, solicit or take
away any clients or customers of any of the LifeQuest Parties, nor (c) solicit
for employment, recruit, hire or attempt to recruit or hire any employees of
any of the LifeQuest Parties.
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6.08 Covenants Independent. The covenants contained in Section
6.07 of this Agreement will be construed as independent of any other provision
in this Agreement; and the existence of any claim or cause of action by
Employee against the Company will not constitute a defense to the enforcement
by the Company of said provisions. Employee understands that the provisions
contained in Section 6.07 are essential elements of the employment of Employee
and, but for the agreement of Employee to Section 6.07, the Company would not
have agreed to enter into this Agreement. Employee has been advised to consult
with counsel in order to be informed in all respects concerning the
reasonableness and propriety of Section 6.07 with specific regard to the nature
of the business conducted by the Company and Employee acknowledges that Section
6.07 is reasonable in all respects.
6.09 Equitable Relief. In the event of a breach or a threatened
breach by Employee of any of the provisions contained in Article 6 of this
Agreement, Employee acknowledges that the LifeQuest Parties will suffer
irreparable injury not fully compensable by money damages and, therefore, will
not have an adequate remedy available at law. Accordingly, any of the
LifeQuest Parties shall be entitled to obtain such injunctive relief or other
equitable remedy from any court of competent jurisdiction as may be necessary
or appropriate to prevent or curtail any such breach, threatened or actual. The
foregoing shall be in addition to and without prejudice to any other rights
that any of the LifeQuest Parties may have under this Agreement or at law or in
equity, including, without limitation, the right to sue for damages.
ARTICLE 7
GENERAL PROVISIONS
7.01 Notices. All notices or other communications required under
this Agreement may be effected either by personal delivery in writing or by
certified mail, return receipt requested. Notice shall be deemed to have been
given when delivered or mailed to the parties at their respective addresses as
set forth above or when mailed to the last address provided in writing to the
other party by the addressee.
7.02 Entirety of Agreement. This Agreement supersedes all other
agreements, either oral or in writing, between the parties to this Agreement,
with respect to the employment of the Employee by the Company. This Agreement
contains the entire understanding of the parties and all of the covenants and
agreements between the parties with respect to such employment.
7.03 Arbitration. Except for the provisions of Section 6 of this
Agreement, with respect to which the Company expressly reserves the right to
petition a court directly for injunctive and other relief, any controversy of
any nature whatsoever, including, but not limited to, tort claims or contract
disputes between the parties to this Agreement or between Employee, his heirs,
executors, administrators, legal representatives, successors and assigns, and
the LifeQuest Parties and their affiliates arising out of or related to this
Agreement, including the implementation, applicability and interpretation
thereof, shall, upon the written request of one party served upon the other, be
submitted to and settled by arbitration in San Antonio, Texas pursuant to the
rules of the American Arbitration Association. If the two parties cannot
jointly select a single arbitrator to determine the matter, one arbitrator
shall be chosen by each party
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(or, if a party fails to make a choice, by the American Arbitration Association
on behalf of such party) and the two arbitrators so chosen will select a third.
The decisions of the single arbitrator jointly selected by the parties, or, if
three arbitrators are selected, the decision of any two of them, will be final
and binding upon the parties and the judgment of a court of competent
jurisdiction may be entered thereon. Fees of the arbitrators and costs of
arbitration shall be borne by the parties in such manner as shall be determined
by the arbitrator or arbitrators.
7.04 Governing Law; Venue. This Agreement shall be subject to and
governed by the laws of the State of Texas. Non-exclusive venue for any action
permitted hereunder shall be proper in San Antonio, Bexar County, Texas, and
Employee hereby consents to such venue.
7.05 Assignment. The rights and obligations of the Company under
this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Company. Employee's rights under this Agreement
are not assignable and any attempted assignment thereof shall be null and void.
7.06 Headings. The headings of sections and subsections of this
Agreement are for convenience only and shall not in any way affect the
interpretation of any provision of this Agreement or of the Agreement itself.
7.07 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law. If any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
7.08 Waiver. The waiver by any party of a breach of any provision
hereof shall not be deemed to constitute the waiver of any prior or subsequent
breach of the same provision or any other provisions hereof. Further, the
failure of any party to insist upon strict adherence to any term of this
Agreement on one or more occasions shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence to that term
or any other term of this Agreement unless such party expressly waives such
provision pursuant to a written instrument which refers to this Agreement and
is signed by such party.
7.09 Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. This Agreement
shall be binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of the parties reflected hereon as
signatories.
EXECUTED the day of September, 1997.
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LIFEQUEST MEDICAL, INC.
By:
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Herbert H. Spoon,
President and Chief Executive Officer
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William H. Bookwalter
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SCHEDULE 6.2
PROPRIETARY PROPERTY CLAIMED BY EMPLOYEE
Proprietary Property Claimed:*
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* None, if left blank