EMPLOYMENT AGREEMENT
(Amended and Restated)
THIS EMPLOYMENT AGREEMENT (this "Agreement"), shall be effective the
15th day of April, 1994, by and between Laboratory Specialists of America,
Inc. (the "Company"), an Oklahoma corporation, and John Simonelli, an
individual ("Simonelli").
WHEREAS, the parties hereto entered into this Employment Agreement on
April 15, 1994, which was amended and restated on September 9, 1994, April
23, 1996 and September 26, 1997;
WHEREAS, the parties have determined that it is in the best interest of
the Company that this Agreement be further amended to extend the term of this
Agreement, effective as of the date hereof;
NOW, THEREFORE, for and in consideration of the conditions hereinbelow
to be performed on the part of the respective parties hereto, and in
consideration of the mutuality thereof, the parties hereto agree as follows:
1. TERM OF EMPLOYMENT. The Company hereby agrees to employ Simonelli,
and Simonelli hereby agrees to serve the Company, during the period beginning
on April 15, 1996 and ending on April 15, 2000 (the "Period of Employment"),
or on such earlier date as provided in Sections 4 and 5 hereof; provided,
however, that the Period of Employment shall be extended an additional one
year period to next April 15 immediately following the end of each full year
of employment with the Company that Simonelli completes pursuant to and
accordance with this Agreement.
2. DUTIES. Substantially all of the duties and responsibilities of
Simonelli, subject to such travel as the duties of Simonelli hereunder may
reasonably require, shall be performed by Simonelli at and from the corporate
offices of the Company in Oklahoma City, Oklahoma.
2.1 During the Employment Period, Simonelli shall devote such time,
attention, skill, energy and best efforts to the duties assigned to him
from time to time by management and/or the Board of Directors of the
Company, and shall, but without obligation hereunder, serve the Company in
the executive officer positions to which he may be elected or appointed by
the Board of Directors of the Company, subject to acceptance by Simonelli
of such executive officer position or positions. Notwithstanding the
foregoing, Simonelli shall be required to devote not less than 50 percent
of his full business time, attention, skill, energy and efforts to the
performance of his duties hereunder; provided, however, that Simonelli may
engage in any other employment or pursuit of other endeavors which does not
conflict with his ability to perform his duties to the business interests
of the Company, provided that such other employment or pursuit of other
endeavors does not violate the duty of loyalty and care which Simonelli has
to the Company by reason of this Agreement or in his capacity as an
executive officer of the Company.
2.2 As an employee of the Company, Simonelli shall be subject to the
overall supervision and instructions of management of the Company and, if
applicable, that are associated with the executive officer position or
positions held by Simonelli which shall be subject to the overall
supervision and instructions of the Board of Directors to the Company.
3. COMPENSATION AND OTHER BENEFITS. During the Employment Period, the
Company shall pay or provide to Simonelli and Simonelli shall be entitled to
receive or have maintained for his benefit, the following:
3.1 Effective July 1, 1998, the Company shall compensate Simonelli
for the services to be rendered by him thereunder at the rate of one
hundred fifty-two thousand five hundred dollars ($152,500) per year,
payable in equal semi-monthly installments on the first and fifteen day of
each month, commencing on July 15,
1
1998.
3.2 In addition to the compensation payable to Simonelli pursuant to
Section 3.1 hereof, within 90 days following the end of each fiscal year of
Laboratory Specialists of America, Inc. ending during the Employment
Period, the Company shall pay Simonelli a bonus equal to one percent of the
net income from continuing operations of Laboratory Specialists, Inc.
before provision for income taxes determined in accordance with generally
accepted accounting principles as reflected on the audited financial
statements of Laboratory Specialists of America, Inc. for the immediately
preceding fiscal year. The bonus payable pursuant to this Section 3.2
shall be deemed earned by Simonelli as of the end of each such fiscal year
of Laboratory Specialists of America, Inc. for all intents and purposes,
including for federal income tax purposes, notwithstanding termination of
the employment of Simonelli on or after the end of such fiscal year of
Laboratory Specialists of America, Inc. To the extent that bonuses or
stock options are paid or granted by the Board of Directors to its
executive officers, Simonelli shall be deemed to be a member of the bonus
group or group to which stock options are granted, and his bonus or stock
option grants shall be determined in the same manner as are the bonuses or
stock option grants of other executives in the group.
3.3 Simonelli is hereby authorized to incur reasonable expenses for
the promotion of the Company's business, including entertainment, travel
and similar expenses, and he shall be reimbursed therefore by the Company
upon his presentation of itemized accounts of such expenditures.
3.4 The Company shall provide to Simonelli health and disability
insurance benefits comparable to those provided to the executive officers
of the Company either as a group or individually.
3.5 Simonelli shall be entitled to reasonable periods of vacation
with pay in each year, and reasonable periods of sick leave with pay
commensurate with his position, in accordance with Company policy as
established by the Board of Directors.
3.6 The Company shall provide to Simonelli and maintain insurance, at
the Company's cost and expense, covering the life of Simonelli in the face
amount of five hundred thousand dollars ($500,000), the proceeds of which
shall be payable to such beneficiary that Simonelli shall designate or in
the event of failure to designate a named beneficiary shall be payable to
the estate of Simonelli.
3.7 The Company shall pay to Simonelli an automobile allowance of
five hundred dollars ($500) per month, payable on the fifteen day of each
month while employed pursuant to this Agreement, and shall provide at the
sole cost and expense of the Company a mobile phone to assist Simonelli in
the performance of his duties and responsibilities as an employee and, if
applicable, executive officer of the Company.
4. DISABILITY OR DEATH.
4.1 In the event the Board of Directors of the Company determines in
good faith that Simonelli is unable, because of physical or mental illness
or disability, to render services of the character contemplated hereby and
that such disability reasonably may be expected to be permanent or to
continue for a period of at least six (6) consecutive months (or for
shorter periods totaling more than six (6) months during any period of
eighteen (18) consecutive months), in such event the Board of Directors of
the Company may elect to terminate the employment of Simonelli hereunder
upon written notice by the Company to Simonelli effective on the next first
or fifteenth day of the month following the date of such notice. At any
time and upon reasonable request therefor by the Company, Simonelli shall
submit to medical examination by a physician designated by the Company in
Oklahoma City, Oklahoma, for the purpose of determining the existence,
nature and extent of any such disability. In the event the Board of
Directors elects to terminate the employment of Simonelli pursuant to this
Section 4.1, Simonelli shall be entitled to receive any amount of
compensation determined pursuant to Section 3.1 up to the date of the
termination of the employment of Simonelli payable
2
on the dates established pursuant to Section 3.1.
4.2 In the event Simonelli shall die during the Employment Period,
this Agreement shall terminate effective on the next first or fifteenth day
of the month following the date of death, and the Company shall pay to the
spouse of Simonelli, or if unmarried at the time of his death, to the
estate of Simonelli, the compensation payable to Simonelli pursuant to
Section 3.1 for a period of three (3) months following the effective date
of termination of this Agreement pursuant to this Section 4.2, payable on
the dates provided for such compensation payment thereunder.
4.3 In the event of termination of this Agreement pursuant to Section
4.1 and/or Section 4.2 of this Agreement, Simonelli (or his spouse or if
unmarried on the date of his death his estate) shall be entitled to receive
accrued and unpaid expense reimbursements, automobile allowance and any
unpaid bonus amounts awarded to Simonelli prior to such termination and
stock option grants awarded to Simonelli prior to such termination
exercisable in accordance with the terms of such stock option grants.
5. TERMINATION FOR CAUSE. In the event the Board of Directors of the
Company determines in good faith that Simonelli is guilty of gross negligence
or fraud materially injurious to the Company, the Company may terminate this
Agreement, and all obligations hereunder shall thereupon terminate.
6. NON-COMPETITION. During the Employment Period, or, if longer, the
period of employment of Simonelli by the Company, Simonelli will not engage
in competition with the Company, either directly or indirectly, in any manner
or capacity as an employee or executive officer of a competitor company in
any phase of the business carried on by the Company at any time.
7. CONFIDENTIALITY. During the Employment Period, or, if longer, the
period of employment of Simonelli by the Company, and for a period of three
(3) years thereafter, Simonelli will not divulge to anyone, other than the
Company or persons designated by the Company in writing, any confidential
material information directly or indirectly useful in any aspect of the
business of the Company or any of its subsidiaries, as conducted from time to
time, as to which Simonelli is now, or at any time during employment shall
become, informed and which is not then generally known to the public or
recognized as standard practice.
8. CERTAIN PROVISIONS TO SURVIVE TERMINATION; ETC. Notwithstanding any
termination of his employment under this Agreement, Simonelli, in
consideration of his employment hereunder to the date of such termination,
shall remain bound by the provisions of Section 6 and 7, and consequently, in
addition to all other remedies that may be available to it, the Company shall
be entitled to injunctive relief for any actual or threatened violation of
such Sections.
9. NON-ASSIGNABILITY. Neither party hereto shall have the right to
assign this Agreement or any rights or obligations hereunder without the
written consent of the other party.
10. ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Rules of the American Arbitration Association and
judgment upon the award rendered by the arbitrator or arbitrators may be
entered in any court having jurisdiction thereof. The arbitration
proceedings shall be conducted in Oklahoma City, Oklahoma unless otherwise
agreed by the parties hereto. The arbitrator or arbitrators shall be deemed
to possess the powers to issue mandatory orders and restraining orders in
connection with such arbitration; provided, however, that nothing in this
Section 10 shall be construed so as to deny the Company the right and power
to seek and obtain injunctive relief in a court of equity for any breach or
threatened breach by Simonelli of any of his covenants contained in Sections
6 and 7 hereof.
11. NOTICE. All notices required or permitted to be given hereunder
shall be in writing and shall be deemed to have been given forty-eight (48)
hours after depositing in the United States mail, certified mail, postage
prepaid, addressed to the party to receive such notice at the address set
forth hereinbelow or such other address as either party
3
may give to the other in writing pursuant to written notice pursuant to this
Section:
If to Simonelli: Mr. John Simonelli
101 Park Avenue, Suite 810
Oklahoma City, Oklahoma 73112
If to the Company: Laboratory Specialists of America, Inc.
101 Park Avenue, Suite 810
Oklahoma City, Oklahoma 73112
Attention: Larry E. Howell
12. GENERAL. The terms and provisions herein contained (i) constitute
the entire Agreement between the Company and Simonelli with respect to the
subject matter hereof, (ii) may be amended or modified only by a written
instrument executed by the parties hereto, and (iii) shall be construed and
enforced in accordance with the laws in effect in the State of Oklahoma
without regard to its conflicts of law provisions. Failure by a party hereto
to require performance of any provision of this Agreement shall not affect,
impair or waive such party's right to require full performance at any time
thereafter.
It is acknowledged that the furniture, equipment and artwork in the
corporate offices of the Company in Oklahoma City, Oklahoma are the property
of Larry E. Howell and Simonelli.
This Agreement may be executed 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.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as amended and restated, on the 16th day of July, 1998, with an
effective date of the 1st day of July, 1998.
"Company" LABORATORY SPECIALISTS OF AMERICA, INC.
By:
--------------------------------------------
Larry E. Howell, President
"Simonelli"
--------------------------------------------
John Simonelli
4