EMPLOYMENT AGREEMENT

 

 

 

THIS EMPLOYMENT AGREEMENT, entered into this 1st day of May, 2008, by and between CAS Medical Systems, Inc., a Delaware corporation (the “Company”), and Paul Benni  (hereinafter called the “Employee”).

WITNESSETH:

WHEREAS, the Company desires that the Employee serve as Chief Scientific Officer of the Company and the Employee is willing to serve the Company in such capacity.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the parties hereto agree as follows:

Effective as of May 1, 2008, the Company will employ the Employee and the Employee will perform services for the Company on the terms and conditions set forth in this Agreement and for the period specified in Section 3 hereof (“Term of Employment”).

The Employee, during the Term of Employment, will serve the Company as its Chief Scientific Officer.  The Employee shall not be deemed an “executive officer” of the Company for SEC reporting purposes.  The Employee will have such duties and responsibilities as are assigned to him by the President and Chief Executive Officer of the Company commensurate with his positions as Chief Scientific Officer of the Company.  The Employee will perform his duties hereunder faithfully and to the best of his abilities and in furtherance of the business of the Company, and will devote his full business time, energy, attention and skill to the business of the Company and to the promotion of its interests, except as otherwise agreed by the Company.  The Employee warrants and represents that he is free to enter into this Agreement and is not restricted by any prior or existing agreement and the Company may rely on such representation in entering into this Agreement.

The Employee’s employment hereunder shall be “at will” and is terminable at any time by either party, subject to the provisions of Section 9 hereof.

The Employee will receive, as compensation for his duties and obligations to the Company pursuant to this Agreement, a base salary at the annual rate of One Hundred Twelve Thousand Dollars ($112,000), payable in substantially equal installments in accordance with the Company’s payroll practice.  It is agreed between the parties that the Company will review the base annual salary annually and in light of such review may (but will not be obligated to), at the discretion of the Company, increase such annual base salary taking into account any change in the Employee’s responsibilities, increases in the cost of living, performance by the Employee, and other pertinent factors.

During the Term of Employment, the Employee may be eligible for an annual bonus in the form of cash or Company common stock as determined at the sole discretion of the Company.

Subject to any applicable probationary or similar periods, during the Term of Employment, the Employee will be entitled to participate in all employee benefit programs of the Company, as such programs may be in effect from time to time.  Subject to any applicable probationary or similar periods, during the Term of Employment, the Employee will also be entitled to participate in all retirement programs of the Company for which current employees are eligible, as such programs may be in effect from time to time (including the Company’s 401(k) plan).

All reasonable travel and other out-of-pocket expenses incidental to the rendering of services by the Employee hereunder will be paid by the Company and if expenses are paid in the first instance by the Employee, the Company will reimburse him therefor upon presentation of proper invoices; subject in each case to compliance with the Company’s reimbursement policies and procedures.

The Employee will be entitled to holidays, reasonable vacation and reasonable sick leave each year, in accordance with policies of the Company.

(a)           Termination by the Company for Serious Cause.  In the event of Serious Cause (as defined below), the Company may terminate the Employee’s employment and the Term of Employment upon written notice of such termination stating the Serious Cause upon which the Company relies for its termination.  The Employee’s employment and the Term of Employment will be terminated effective as of the date specified in such notice, which will in no event be earlier than the effective date of such notice as provided in Section 18.

“Serious Cause” means (i) the willful and continued failure by the Employee to perform substantially his duties hereunder, other than by reasons of health, after demand for substantial performance is delivered by the Company that identifies the manner in which the Company believes the Employee has not substantially performed his duties; (ii) the Employee will have been indicted by any federal, state or local authority in any jurisdiction for, or will have pleaded guilty or nolo contendere to, an act constituting a felony, (iii) the Employee will have habitually abused any controlled substance (such as narcotics or alcohol), or (iv) the Employee will have (A) engaged in acts of fraud, material dishonesty or gross misconduct in connection with the business of the Company, or (B) committed a material breach of this Agreement.

(b)           Termination by Employee for Good Reason.  The Employee may terminate his employment and the Term of Employment in the event of Good Reason (as defined below) upon thirty (30) days’ prior written notice of such termination stating the Good Reason upon which the Employee relies for his termination.  The Employee’s employment and the Term of Employment will be terminated effective as of the date specified in such notice, which in no event will be earlier than the effective date of such notice as provided in Section 18.

“Good Reason” means (i) a material breach of this Agreement by the Company, such as a reduction in the Employee’s salary or benefits other than an across-the-board reduction of benefits affecting all members of senior management or (ii) the Company requires the Employee to change the location of the Employee’s principal office, so that Employee will be based at a location more than thirty miles from the location of Employee’s current principal office (i.e., the Company’s executive offices located at 44 East Industrial Road, Branford, Connecticut).

(c)           Effect of Termination for Serious Cause or Without Good Reason.  In the event of termination of the Employee’s employment and the Term of Employment by the Company for Serious Cause or by the Employee without Good Reason, the Employee will forfeit all bonus amounts for the then current fiscal year, and the Company will be liable to the Employee only for (i) any accrued but unpaid base salary and vacation, (ii) any earned but unpaid bonus from a prior fiscal year (subject, if applicable, to the terms of any deferred compensation arrangements), and (iii) reimbursement of business expenses incurred prior to the date of termination.

(d)           Death, Retirement, Disability.  In the event of the death, Retirement or Disability of the Employee, the Employee’s employment and Term of Employment will be terminated as of the date of such death, Retirement or Disability and the Company will pay the Employee, or the Employee’s estate or legal representative, as appropriate, (i) any accrued but unpaid base salary and vacation, (ii) any earned but unpaid bonus from a prior fiscal year (subject, if applicable, to the terms of any deferred compensation arrangements), and (iii) reimbursement of business expenses incurred prior to the date of termination.

“Disability” means the Employee’s inability, for reasons of health, to carry out the functions of his position for a total of one hundred eighty (180) days during any twelve (12) month period.  “Retirement” will mean retirement from employment upon or after attaining age sixty-five (65) or such earlier age agreed to by the Company.

(e)           Effect of Termination Without Serious Cause or With Good Reason.  If (i) the Company terminates the Term of Employment and the Employee’s employment herein without Serious Cause, or (ii) the Employee terminates the Term of Employment and his employment hereunder for Good Reason, the Company will continue to pay the Employee his then-current base salary provided under this Agreement for a period of six (6) months from the date of such termination.  In addition, the Employee will be entitled to prompt payment of (A) any accrued but unpaid salary and vacation, (B) any earned but unpaid bonus from a prior fiscal year (subject, if applicable, to the terms of any deferred compensation arrangements), (C) the Company’s health benefit plans (with standard employee payment in an amount not to exceed the payment level immediately prior to termination) for the period of six (6) months, and (D) reimbursement of business expenses incurred prior to the date of termination.

(f)           No Other Obligations.  In the event of the termination of the Employee’s employment and the Term of Employment pursuant to Sections 9 herein, the Company will have no obligations to the Employee other than those set forth in Sections 9 herein.

(a)           Covenant Not to Compete.  The Employee hereby covenants and agrees that at no time during the Term of Employment nor for a period of six (6) months immediately following the termination of the Employee’s employment will he for himself or on behalf of any other person, partnership, company or corporation, directly or indirectly, acquire any financial or beneficial interest in (except as provided in the next sentence), provide consulting or other services to, be employed by, or own, manage, operate or control any entity engaged in the medical device business substantially similar to the business engaged in by the Company or its subsidiaries at the time of such termination of employment.  For avoidance of doubt, work at an academic institution that does not involve the commercial development of medical device products substantially similar to those made by the Company or its subsidiaries shall not constitute a breach of this Section 10(a).  Notwithstanding the first sentence of this Section 10(a), the Employee will not be prohibited from owning less than one percent (1%) of any publicly traded corporation, whether or not such corporation is in competition with the Company.

(b)           Non-Solicitation.  The Employee hereby covenants and agrees that, at all times during the Term of Employment and for a period of six (6) months immediately following the termination thereof, the Employee will not directly or indirectly employ or seek to employ any person or entity employed at that time by the Company or any of its subsidiaries, or otherwise encourage or entice such person or entity to leave such employment.

Section 11.

Confidential Information

The Employee agrees to keep secret and retain in the strictest confidence all confidential matters which relate to the Company or any affiliate of the Company, including, without limitation, customer lists, client lists, trade secrets, pricing policies and other business affairs of the Company and any affiliate of the Company learned by him from the Company or any such affiliate or otherwise before or after the date of this Agreement, and not to disclose any such confidential matter to anyone outside the Company, or any of its affiliates, whether during or after his period of service with the Company, except as may be required in the course of a legal or governmental proceeding.  Upon request by the Company, the Employee agrees to deliver promptly to the Company upon termination of his services for the Company, or at any time thereafter as the Company may request, all Company or affiliate memoranda, notes, records, reports, manuals, drawings, designs, computer files in any media and other documents (and all copies thereof) relating to the Company’s or any affiliate’s business and all property of the Company or any affiliate associated therewith, which he may then possess or have under his control.

Section 12.

Remedy

(a)           Should the Employee engage in or perform, either directly or indirectly, any of the acts prohibited by Sections 10 or 11 hereof, it is agreed that any and all severance payments and related benefits hereunder shall immediately terminate and the Company will also be entitled to full injunctive relief, to be issued by any competent court of equity, enjoining and restraining the Employee and each and every other person, firm, organization, association, or corporation concerned therein, from the continuance of such violative acts. The foregoing remedies available to the Company will not be deemed to limit or prevent the exercise by the Company of any or all further rights and remedies which may be available to the Company hereunder or at law or in equity.

(b)           The Employee acknowledges and agrees that the covenants contained in this Agreement are fair and reasonable in light of the consideration paid hereunder, and the invalidity or unenforceability of any particular provision, or part of any provision, of this Agreement will not affect the other provisions or parts hereof.  If any provision hereof is determined to be invalid or unenforceable and if any such provision will be so determined to be invalid or unenforceable by reason of the duration or geographical scope of the covenants contained therein, such duration or geographical scope, or both, will be reduced to a duration or geographical scope solely to the extent necessary to cure such invalidity.

Section 13.

Inventions

(a)           The Employee agrees that any improvements or inventions made by him, either alone or with others, during his Term of Employment by the Company, or within one (1) year thereafter, as a result of any information disclosed, invention conceived or work done during the Term of Employment, so far as the same relates to the Company’s confidential information, business, products, processes and developments, and all his rights, title and interest in and to the same shall be deemed as made and held by him in a fiduciary capacity and solely for the benefit of  Company, shall not be disclosed to others without the written consent of the Board of Directors and are and shall be without any further action or acknowledgment by the Employee being required, the sole and exclusive property of Company.

 

(b)           The Employee shall disclose promptly and fully in writing to Company all such improvements and inventions.  The Employee, when requested so to do, shall:

 

execute such further agreements as the Company deems useful or necessary to more fully assign and convey to the Company his entire right, title and interest in and to said improvements and inventions;

 

assist the Company and its agents in preparing copyright or patent applications, United States and foreign, covering the same;

 

sign and deliver all applications and assignments of the same to the Company; and

 

generally give all information and testimony, sign all papers and do all things which may be needed or requested by the Company, to the end that the Company may obtain, extend, reissue, maintain and enforce United States and foreign copyrights and patents covering such improvements and inventions.

 

(c)           The Company agrees to bear all expenses that are incurred in obtaining, reissuing, maintaining, and enforcing said copyrights and patents and in vesting and perfecting title thereto in the Company, and agrees to pay the Employee for any time which it may require of him after the Term of Employment, such payment to be at an hourly rate equivalent to the rate at which the Employee was paid at the time this Agreement was terminated, said calculation to be based upon a work year of 2000 hours.

Section 14.

Successors and Assigns

This Agreement will be binding upon and inure to the benefit of the Employee, his heirs, executors, administrators and beneficiaries, and the Company and its successors and assigns.

This Agreement will be governed by and construed and enforced in accordance with the laws of the State of Connecticut, without reference to rules relating to conflicts of law.

This Agreement constitutes the full and complete understanding and agreement of the parties and supersedes all prior understandings and agreements as to employment of the Employee.  This Agreement cannot be amended, changed, modified or terminated without the written consent of the parties hereto.

The waiver of either party of a breach of any term of this Agreement will not operate nor be construed as a waiver of any subsequent breach thereof.

Any notice, report, request or other communication given under this Agreement will be written and will be effective upon delivery when delivered personally, by overnight courier or by fax.  Unless otherwise notified by any of the parties, notices will be sent to the parties as follows: (i) if to the Employee, at the address set forth in the Company’s records, and (ii) if to the Company, to CAS Medical Systems, Inc., 44 East Industrial Road, Branford, CT 06405, Attention: President and Chief Executive Officer.

If any one or more of the provisions contained in this Agreement will be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality and enforceability of the remaining provisions contained herein will not in any way be affected or impaired thereby.

This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument.  Delivery of signatures by facsimile or electronic image shall be valid for all purposes hereunder.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

The Company:

CAS MEDICAL SYSTEMS, INC.

By:          /s/ Andrew Kersey                         

Name:          Andrew Kersey

Title:            President and Chief Executive Officer

 

 

Employee:

 

                       Paul Benni