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EMPLOYMENT AGREEMENT
This agreement, effective as of March 2, 2001 (the "Agreement") is made by
and between MEDICAL TECHNOLOGY SYSTEMS, INC., a Delaware corporation (the
"Company") , and MICHAEL P. CONROY, a resident of the State of Florida (the
"Executive").
BACKGROUND
The Company desires to continue to obtain the benefit of services by the
Executive, and the Executive desires to continue to render services to the
Company.
The Compensation Committee of the Board of Directors of the Company (the
"Board") has determined that it is in the Company's best interest and that of
its stockholders to recognize the substantial contribution that the Executive
has made and is expected to make in the future to the Company's business and to
continue to retain his services in the future.
Accordingly, in consideration of the mutual covenants and representations
contained set forth below, the Company and the Executive agree as follows:
TERMS
1. Employment
a. The Executive agrees to accept employment with the Company or one or
more of the Company's subsidiary corporations to render the services
specified in this Agreement upon the terms and conditions and for the
compensation provided in this Agreement. All compensation paid to the
Executive by the Company or any subsidiary of the Company, and all
benefits and perquisites received by the Executive from the Company or
any of its subsidiaries, will be aggregated in determining whether the
Executive has received the compensation and benefits provided for
herein.
b. Term. The term (the "Term") of this contract shall commence on March
1, 2001, and shall continue without interruption until February 28,
2006.
2. Duties
a. General Duties. The Executive shall serve as Vice President and Chief
Financial Officer of the Company and shall continue to serve in those
positions, with duties and responsibilities that are customary for
such executives.
b. Full Time Employment. During the term of this Agreement and excluding
any periods of vacation, family or sick leave or holidays to which the
Executive is entitled, the Executive shall devote his full business
time and energy to the business, affairs and interests of the Company
and its subsidiaries, and matters related thereto, and shall use his
reasonable commercial efforts and ability to promote the interests of
the Company and its subsidiaries. The Executive will diligently
endeavor to promote the business, affairs and interests of the Company
and its subsidiaries and perform services contemplated by this
Agreement in accordance with the policies established by the Board
from time to time.
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c. Certain Permissible Activities. The Executive may serve as a director
or in any other capacity of any business enterprise, including an
enterprise whose activities may involve or relate to the business of
the Company or any of its subsidiaries but only if such service is
expressly approved by the Company in writing. The Executive may (i)
make and manage personal business investments of his choice, (ii)
teach at educational institutions and deliver lectures, and (iii)
serve in any capacity with any civic, educational or charitable
organization, or any governmental entity or trade association, in each
such case without seeking or obtaining approval by the Company so long
as such activities and service do not materially interfere or conflict
with the performance of his duties hereunder. It is agreed that to the
extent that the Company shall have approved any service of the
Executive pursuant to the first sentence of this Section 3(c) prior to
a Change in Control Date (as defined in Section 7 below), or to the
extent that the Executive may have engaged in activities pursuant to
the second sentence of this Section 3(c) prior to such Change in
Control Date, the continued conduct of such activities or the conduct
of activities during the thirty-six months subsequent to such Change
in Control Date shall be permissible and not in violation of any
provisions of this Agreement and such Company approval may not be
revoked or limited in any material respect during the thirty-six
months following such Change in Control Date.
3. Compensation and Expenses.
a. Base Salary. For the services of the Executive to be rendered under
this Agreement, the Company will pay the Executive an annual base
salary (the "Base Salary") as follows: [4% a year increases]
(i) For the year March 1, 2001 through February 28, 2002, the amount
of $148,720;
(ii) For the year March 1, 2002 through February 28, 2003, the amount
of $154,668;
(iii)For the year March 1, 2003 through February 28, 2004, the amount
of $160,855;
(iv) For the year March 1, 2004 through February 28, 2005, the amount
of $167,289; and
(v) For the year March 1, 2005 through February 28, 2006, the amount
of $173,981;
Provided, however, that such Base Salary shall be pro rated
accordingly over the time period that the Executive performs services
under this Agreement in any calendar year during which this Agreement
shall terminate before February 28th of such year.
The Executive shall have the right, at his election and subject to
compliance with all applicable securities laws including without
limitation those laws governing insider trading, to receive
compensation in the form of the Company's restricted common stock.
Such stock shall be valued at sixty percent (60%) of the closing bid
price of the Company's common stock as quoted on an established
exchange as of the date of Executive's election. Such election may be
for all or part of the Executive's compensation. At the beginning of
each quarter, Executive shall give the Company notice of his election
to exercise his option to receive restricted common stock in lieu of
cash compensation.
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The Company shall pay the Executive his Base Salary in equal
installments no less than semi-monthly.
b. Base Salary Adjustment. The Base Salary may not be decreased
hereunder during the term of this Agreement, but may be increased
upon review by and within the sole discretion of the Board.
c. Bonus. Executive shall be entitled to receive bonus compensation
in accordance with Exhibit A. Such bonuses may be paid in cash or
issued in shares of the Company's common stock on such terms as
recommended by the Compensation Committee and approved by the
Board.
d. _______ Expenses. In addition to any compensation received
pursuant to Section 3, the Company will reimburse or advance
funds to the Executive for all reasonable, ordinary and necessary
travel, educational, seminar, trade shows, entertainment, and
miscellaneous expenses incurred in connection with the
performance of his duties under this Agreement, provided that the
Executive properly accounts for such expenses to the Company in
accordance with the Company's practices. Such reimbursement shall
include travel, lodging and food costs for Executive's immediate
family to the extent they accompany Executive on business related
travel.
e. _______ Subsidiary and Affiliate Payments. In recognition of the
fact that in the course of the performance of his duties
hereunder the Executive may provide substantial benefits to the
Company's subsidiaries or affiliated companies, the Executive and
the Company may at any time and from time to time agree that all
or any portion of the compensation due the Executive under this
Agreement may be paid directly to the Executive by one or more of
the Company's subsidiaries or affiliated companies.
4. Benefits
a. Vacation. For each year during the Term during which the Executive is
employed, the Executive shall be entitled to 15 vacation days (which
shall accrue and vest, except set forth below on each March 1st)
without loss of compensation or other benefits to which he is entitled
under this Agreement.
If the Executive is unable to take all of his vacation days during a
year for which he becomes vested, then the Executive, at his sole
option, may elect (a) to carry over any unused vacation to the next
calendar year to be used solely in that next year or (b) to receive an
appropriate pro rata portion of his Base Salary corresponding to the
year in which the vacation days vested.
The Executive shall take his vacation at such times as the Executive
may select and the affairs of the Company or any of its subsidiaries
or affiliates may permit.
b. Employee Benefit Programs. In addition to the compensation to which
the Executive is entitled pursuant to the provisions of Section 3 of
this Agreement, during the Term, the Executive will be entitled to
participate in any stock option plan, stock purchase plan, pension or
retirement plan, insurance or other employee benefit plan that is
maintained at that time by the Company for its employees, including
programs of life, disability, basic medical and dental, supplemental
medical and dental insurance.
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Notwithstanding any provision of this Agreement to the contrary, the
Company shall not be obligated to provide the Executive with any of
the benefits contained in this Section 4 (b) if the Executive, for any
reason, is or becomes uninsurable with respect to coverage relating to
any such benefit(s).
c. Automobile Allowance. During the term of this Agreement, the Company
shall pay Executive an additional $650.00 per month as an automobile
allowance to be applied to any automobile expense incurred by
Executive.
d. Financial and Tax Planning. During the term of this Agreement, and as
additional consideration hereunder, Executive shall be reimbursed for
personal financial planning, tax preparation services and accounting
and legal fees related to such financial and tax planning, up to a
maximum of $2,000 per year.
5. Termination.
a. Termination for Cause. The Company may terminate the Executive's
employment pursuant to this Agreement at any time for cause upon
written notice. Such termination will become effective upon the giving
of such notice. Upon any such termination for cause, the Executive
shall have no right to compensation, bonus or reimbursement under
Section 3 or to participate in any employee benefit programs or other
benefits to which he may be entitled under Section 4 for any period
subsequent to the effective date of termination. For purposes of this
Agreement, the term "cause" shall mean:
(i) the Executive's conviction of a felony and all appeals with
respect thereto have been extinguished or abandoned by the
Executive;
(ii) the Executive's conviction of misappropriating assets or
otherwise defrauding the Company or any of its subsidiaries or
affiliates;
(iii)a material breach by the Executive of any provision of this
Agreement, after thirty (30) days written notice, and thirty days
to materially cure such breach.
b. Death or Disability. This Agreement and the Company's obligations
under this Agreement will terminate upon the death or disability of
the Executive. For purposes of this Section 5(b), "disability" shall
mean that for a period of six months in any twelve-month period the
Executive is incapable of substantially fulfilling the duties set
forth in this Agreement because of physical, mental or emotional
incapacity resulting from injury, sickness or disease as determined by
an independent physician mutually acceptable to the Company and the
Executive. Upon any such termination upon death or disability, the
Company will pay the Executive or his legal representative, as the
case may be, his Base Salary (which may include any accrued, but
unused vacation time) at such time pursuant to Section 3(a) through
the date of such termination of employment (or, if terminated as a
result of a disability, until the date upon which the disability
policy maintained pursuant to Section 4 (b) (ii) begins payment of
benefits) plus any other compensation that may be due and unpaid. In
the event of death or disability of the Executive, any obligations
that the Executive may owe the Company for repayment of loans or other
amounts shall be forgiven.
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c. VoluntaryTermination. Prior to the termination of this Agreement, the
Executive may, on sixty days prior written notice to the Company, at
any time terminate his employment. Upon any such termination, the
Company shall pay the Executive his Base Salary at such time pursuant
to Section 3(a) through the date of such termination of employment
(which shall include any vested and accrued, but unused vacation
time).
d. Additional Severance Upon Triggering Event. Upon any event, which (a)
causes a change of control as defined in Section 7.a.; and (b) the
Executive is terminated without cause (i.e., any reason other than
death, disability or termination for cause), ([a] and [b] referred to
as a Triggering Event), the following shall occur immediately and
without further notice or action by Executive:
(i) All of the Company's obligations under this Agreement to
Executive shall accelerate and become immediately performable and
due and payable except for salary for the balance of the term of
this agreement, which shall become due and payable only to the
extent set forth in Section (d)(ii).
(ii) In addition to any and all other compensation to Executive under
this Agreement, the Company shall pay to Executive an amount
equal to 2.99 times the Executive's base salary for the fiscal
year of the Company following the fiscal year in which the
triggering event occurs;
(iii)At his option, notwithstanding the payment of the above items,
Executive may terminate his obligations to the Company under this
Agreement, including any loans payable to the Company; and
(iv) The Company shall immediately assign to Executive any life
insurance policy insuring Executive's life. The Company shall,
prior to the assignment, satisfy the balance of all premiums owed
on the assigned policies and shall insure that the designated
beneficiary is not changed.
(v) If any of the above benefits are deemed to violate Internal
Revenue Code 280G and related regulations thereunder, as amended,
then any excess benefits will be paid during the next tax year if
permitted by applicable law.
6. Restrictive Covenants.
a. Competition with the Companies. The Executive covenants and agrees
that, during the Term of this Agreement, the Executive will not,
without the prior written consent of Company, directly or indirectly
(whether as a sole proprietor, partner, stockholder, director,
officer, employee or in any other capacity as principal or agent) ,
compete with the Company. Notwithstanding this restriction, Executive
shall be entitled to invest in stock of other competing public
companies so long as his ownership is less than 5% of such company's
outstanding shares.
b. Disclosure of Confidential Information. The Executive acknowledges
that during his employment he will gain and have access to
confidential information regarding the Company and its subsidiaries
and affiliates. The Executive acknowledges that such confidential
information as acquired and used by the Company or any of its
subsidiaries or affiliates constitutes a special, valuable and unique
asset in which the Company or any of its subsidiaries or affiliates,
as the case may be, hold a legitimate business interest. All records,
files, materials and confidential informant (the "Trade Secrets")
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obtained by the Executive in the course of his employment with the
Company shall be hereby deemed confidential and proprietary and shall
remain the exclusive property of the Company or any of its
subsidiaries or affiliates, as the case may be. The Executive will
not, except in connection with and as required by his performance of
his duties under this Agreement, for any reason use for his own
benefit or the benefit of any person or entity with which he may be
associated, disclose any Trade Secrets to any person, firm,
corporation, association or other entity for any reason or purpose
whatsoever without the prior written consent of the Board of Directors
of the Companies, unless such information previously shall have become
public knowledge through no action by or omission of the Executive.
c. Subversion, Disruption or Interference. At no time during the term
hereof shall Executive, directly or indirectly, interfere, induce,
influence, combine or conspire with, or attempt to induce, influence,
combine or conspire with, any of the employees or sponsors of, or
consultants to, the Company to terminate their relationship with or
compete or ally against the Company or any of its subsidiaries or
affiliates of the Company in the business in which the Company or any
one of its subsidiaries or affiliates is presently engaged.
d. Enforcement of Restrictions. The parties hereby agree that any
violation by Executive of the covenants contained in this Section 6
will cause irreparable damage to the Company or any of its
subsidiaries and affiliates and may, as a matter of course, be
restrained by process issued out of a court of competent jurisdiction,
in addition to any other remedies provided by law.
7. Change of Control.
a. For the purposes of this Agreement, a "Change of Control" shall be
deemed to have taken place if any person, other than the JADE
Partnership or the Siegel Family Revocable Trust, including a "group"
as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended, becomes the owner or beneficial owner of the Company's
securities, after the date of this Agreement, having more than 50% of
the combined voting power of the then outstanding securities of the
Company that may be cast for the election of directors of the Company
(other than as a result of an issuance of securities specifically
approved by the Company and specifically excluded from the provisions
of this Section 7 by subsequent written agreement of the Executive);
provided, however, that a Change of Control shall not be deemed to
have occurred if the person who becomes the owner of more than 50% of
the combined voting power of the Company is Todd E. Siegel or an
entity (or entities) controlled by Todd E. Siegel.
b. The Company and Executive agree that, if Executive is in the employ of
the Company on the date on which a Change of Control occurs (the
"Change of Control Date") , the Company will continue to employ the
Executive and the Executive will remain in the employ of the Company
for the period commencing on the Change of Control Date and ending on
the expiration of the Term, to exercise such authority and perform
such executive duties as are commensurate with the authority being
exercised and duties being performed by the Executive immediately
prior to the Change of Control Date. If after a Change of Control, the
Executive is requested, and, in his sole and absolute discretion,
consents to change his principal business location outside of Pinellas
or Hillsborough Counties, Florida, the Company will reimburse the
Executive for his relocation expenses, including without limitation,
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moving expenses, temporary living and travel expenses for a time while
arranging to move his residence to the changed location, closing
costs, if any, associated with the sale of his existing residence and
the purchase of a replacement residence at the changed location, plus
an additional amount representing a gross-up of any state or federal
taxes payable by Executive as a result of any such reimbursements. If
the Executive shall not consent to change his business location, the
Executive may continue to provide the services required of him under
this Agreement in Pinellas County, Florida and the Company shall
continue to maintain an office for the Executive at that location
similar to the Company's office prior to the Change of Control Date.
c. During the remaining Term after the Change of Control Date, the
Company will (i) continue to honor the terms of this Agreement,
including as to Base Salary and other compensation set forth in
Section 3, and (ii) continue employee benefits as set forth in Section
4 at levels in effect on the Change of Control Date (but subject to
such reductions as may be required to maintain such plans in
compliance with applicable federal law regulating employee benefits).
d. If during the remaining Term on or after the Change of Control Date
(i) the Executive's employment is terminated by the Company other than
for cause (as defined in Section 5), or (ii) there shall have occurred
a material reduction in Executive's compensation or employment related
benefits, or a material change in Executive's status, working
conditions or management responsibilities, or a material change in the
business objectives or policies of the Company and the Executive
voluntarily terminates employment within sixty days of any such
occurrence, or the last in a series of occurrences, then the Executive
shall be entitled to receive, subject to the provisions of
subparagraphs (e) and (f) below, a lump-sum payment equal to 299% of
Executive's current Base Salary in addition to any other compensation
that may be due and owing to the Executive under Section 3.
e. The amounts payable to the Executive under any other compensation
arrangement maintained by the Company which became payable, after
payment of the lump-sum provided for in paragraph (d), upon or as a
result of the exercise by Executive of rights which are contingent on
a Change of Control (and would be considered a "parachute payment"
under Internal Revenue Code 280G and regulations thereunder), shall be
reduced to the extent necessary so that such amounts, when added to
such lump-sum, do not exceed 299% of the Executive's Base Salary (as
computed in accordance with provisions of the Internal Revenue Code of
1986, as amended and any regulations promulgated thereunder) for
determining whether the Executive has received an excess parachute
payment. Any such excess amount shall be deferred and paid in the next
tax year.
f. In the event of a proposed Change in Control, the Company will
allow the Executive to participate in all meetings and related
negotiations related.
8. Assignability. 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, provided that such successor or assign shall
acquire all or substantially all of the assets and business of the Company.
The Executive's rights and obligations under this Agreement may not be
assigned or alienated and any attempt to do so by the Executive will be
void and constitute a material breach hereunder.
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9. Indemnification. The Company and the Executive acknowledge that the
Executive's service as an officer of the Company exposes the Executive to
risks of personal liability arising from, and pertaining to, the
Executive's participation in the management of the Company. The Company
shall defend, indemnify and hold harmless the Executive from any actual
cost, loss, damages, attorneys fees, or liability suffered or incurred by
the Executive arising out of, or connected to, the Executive's service as
an officer of the Company or any of its current, former, or future
subsidiaries to the fullest extent allowed by law. The Company will not
have any obligation to the Executive under this section for any loss
suffered if the Executive voluntarily pays, settles, compromises, confesses
judgment for, or admits liability with respect to without the approval of
the Company. Within thirty days after the Executive receives notice of any
claim or action which may give rise to the application of this section, the
Executive shall notify the Company in writing of the claim or action. The
Executive's failure to timely notify the Company of the claim or action
will relieve the Company from any obligation to the Executive under this
section.
10. Severability. If any provision of this Agreement otherwise is deemed to be
invalid or unenforceable or is prohibited by the laws of the state or
jurisdiction where it is to be performed, this Agreement shall be
considered divisible as to such provision and such provision shall be
inoperative in such state or jurisdiction and shall not be part of the
consideration moving from either of the parties to the other. The remaining
provisions of this Agreement shall be valid and binding and of like effect
as though such provision were not included.
11. Prior Employment Agreements. The Executive represents that he has not
executed any agreement with any previous Company which may impose
restrictions on his employment with the Company.
12. Notice. Notices given pursuant to the provisions of this Agreement shall be
sent by certified mail, postage prepaid, or by overnight courier, or
telecopier to the following addresses:
If to the Company:
Medical Technology Systems, Inc.
12920-M Automobile Blvd.
Clearwater, FL 34622
If to the Executive:
Michael P. Conroy
20 Stanton Circle
Oldsmar, FL 34677
Either party may, from time to time, designate any other address to which
any such notice to it or him shall be sent. Any such notice shall be deemed
to have been delivered upon the earlier of actual receipt or four days
after deposit in the mail, if by certified mail.
13. Miscellaneous
a. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws Florida without giving effect to
the conflict of laws rules thereof.
b. Waiver/Amendment. The waiver by any party to this Agreement of a
breach of any provision hereof by any other party shall not be
construed as a waiver of any subsequent breach by any party. No
provision of this Agreement may be terminated, amended, supplemented,
waived or modified other than by an instrument in writing signed by
the party against whom the enforcement of the termination, amendment,
supplement, waiver or modification is sought.
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c. Attorney's Fees. In the event any action is commenced to enforce any
provision of this agreement, the prevailing party shall be entitled to
reasonable attorneys fees, costs and expenses.
d. Entire Agreement. This Agreement, and the attached Exhibits A and B,
comprise the entire agreement between the Executive and the Company.
This Agreement supersedes all prior agreements and understandings
between the parties with respect to the subject matter hereof and may
not be modified or terminated orally. No modification, termination, or
attempted waiver shall be valid unless it is in writing and is
executed by each of the parties.
e. Counterparts. This Agreement may be executed in counterparts, all of
which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Executive have executed this
9Agreement as of the day and year first above written.
WITNESSES: EXECUTIVE
- --------------------------------- --------------------------------------
MICHAEL P. CONROY
Print Name: ____________________
- -----------------------------------
Print Name: _________________________
COMPANY
MEDICAL TECHNOLOGY SYSTEMS, INC.,
___________________________________ a Delaware corporation
Print Name: _______________________ By: ___________________________________
___________________________________ Print Name: ___________________________
Print Name: _________________________ As: ___________________________________
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EXHIBIT A
BONUS PROGRAM
Executive shall be entitled to receive a quarterly performance bonus equal to:
2% of the Company's net income after taxes. Such bonuses may be paid in cash or
issued in shares of the Company's common stock subject to compliance with all
applicable securities laws including without limitation those laws governing
insider trading. Such stock shall be valued at sixty percent (60%) of the
closing bid price of the Company's common stock as quoted on an established
exchange as of the date of Executive's election. For the purposes of this
Agreement, "net income after income taxes" shall mean with respect to each
fiscal quarter of the Company, the sum of the net income after income taxes, but
without taking into account any unusual, non-recurring gains or losses
recognized during such quarter; and any amount of the performance bonus payable
under this Bonus Program for such fiscal quarter, which has been accrued as an
expense and included in the Company's payroll and related expenses for such
fiscal quarter in arriving at the amount of the Company's net income after
income taxes. For purposes of this Agreement, net income after income taxes for
any quarter shall be as reported on a consolidated basis in the Company's
quarterly reports filed with the Securities and Exchange Commission for such
fiscal quarter.