EXECUTIVE EMPLOYMENT AGREEMENT

 

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made as of November 3, 2008 (the “Effective Date”), by and between Karen Davis (“Executive”) and Global Med Technologies, Inc. (the “Company”).

 

 

The Company wishes to retain the services of Executive pursuant to this Agreement, the terms and provisions of which are set forth below.

 

NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED AS FOLLOWS:

 

 

 

Commencing on the Effective Date and, unless terminated earlier pursuant to the terms of this Agreement, during the remaining Term of this Agreement, Executive’s annual base salary will be Two Hundred Ten Thousand Dollars ($210,000), payable in accordance with the Company’s customary payroll practices as are in effect from time to time (“Base Salary”).

 

Executive shall be eligible to receive a Cash Bonus to begin January 1, 2009, provided that (i) the Board of Directors (the “Board”) approves a bonus for executives and (ii) the Executive meets her specific bonus criteria:

 

(a) Cash bonus at plan - 30% of base; or

 

(b)

Cash bonus above plan - 50% of base (above plan to be defined in writing by the Compensation Committee; and

 

(c)

Executive shall receive a Signing Bonus of 5,000 shares of Restricted Stock, to vest on a pro-rata basis over three (3) years, at signing, priced at the closing price on October 31, 2008; and

(d)

Executive shall receive 200,000 stock options to purchase 200,000 shares of Global Med Common Stock, priced at the closing price on October 31, 2008; 40,000 shares to vest at the end of each calendar year for five (5) years beginning December 31, 2009 as long as the Executive is employed by the Company. Upon a Change of Control of the Company, all 200,000 stock options shall vest immediately. For purposes of this Agreement, a “Change of Control” means when: (i) there is any transaction or series of related transactions (including but not limited to a merger or reorganization) pursuant to which a person, other than the Employer, acquires directly or indirectly, the beneficial ownership of securities issued by the Employer having greater than fifty percent (50%) or more of the voting power of all of the voting securities issued by the Employer; or (ii) the Employer consolidates with or merges with or into any person or sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of its assets to any person; or (iii) individuals who on the Effective Date of the Change of Control of the Company constituted the Board of Directors of the Company cease for any reason to constitute a majority of such Board of Directors.

 

 

The “Initial Term” of this Agreement shall begin on the Effective Date and shall expire on the first (1^st) anniversary of the date hereof, unless sooner terminated in accordance with the provisions of this Agreement. The Initial Term and each renewal term thereafter shall be automatically renewed for successive one (1) year periods, unless one of the parties to this Agreement shall have provided written notice to the other party at least thirty (30) days prior to the expiration of the then current term of intent not to renew this Agreement (each extension period following the Initial Term shall be referred to as a “Renewal Term”). The Initial Term and all Renewal Term(s), if any, shall be referred to collectively as the “Term”.

 

 

Termination without Good Reason or Termination for Cause.

 

 

 

 

 

Payments Upon a Termination Without Cause or Termination with Good Reason. If, prior to the expiration of the Term, the Company terminates Executive’s employment for any reason other than Disability, Death or Cause (such termination or resignation being hereinafter referred to as “Termination Without Cause”) or after the first Renewal Term, the Company allows this Agreement to expire and thereafter terminates Executive without Cause or Employee terminates her employment for “Good Reason”, Executive shall be entitled to (A)  continuation of benefits for the remainder of the Initial Term or the then current Renewal Term, if any, (B) payment of any unreimbursed expenses, and (C) subject to Executive’s execution and delivery of a release in the form then deemed appropriate by the Company, severance consisting of continuation of her Base Salary, at the rate in effect on the date of Termination Without Cause, for six (6) months following the date of the Termination Without Cause. Notwithstanding the above, if the Executive’s contract is renewed after the first anniversary date of the date hereof, the Executive’s severance consisting of the continuation of her Base Salary, shall increase from six (6) months to twelve (12) months, with the same terms and conditions provided for herein. The date of termination of employment for Termination Without Cause shall be the date specified in the written notice of termination provided by the Company to Executive. Executive shall also be entitled to all of the Signing Bonus shares of Restricted Stock as if employed for over three (3) years as provided in Section 2(c), her pro-rata share of her cash bonus and if such Termination Without Cause occurs after May 1, 2011, vesting of all stock options as if Executive had been employed for over five (5) years as provided in Section 2(d). Except as specifically set forth above, Executive covenants and agrees that she shall not be entitled to any other form of severance benefits from the Company, including, without limitation, benefits otherwise payable under the Company’s regular severance policies, if any, in the event her employment ends for any reason and, except with respect to obligations of the Company expressly provided for herein, Executive unconditionally releases the Company and its subsidiaries and affiliates, and their respective directors, officers, employees and stockholders, or any of them, from any and all claims, liabilities, or obligations under any severance arrangements of the Company or any of its subsidiaries or affiliates.

Termination due to Disability. In the event of Executive’s Disability, the Company shall be entitled to terminate her employment. In the case that the Company terminates Executive’s employment due to Disability, Executive shall be entitled to her Base Salary, including any accrued but unused vacation time, up to and including the date of termination as well as any unpaid expense reimbursements. In addition, Executive shall also be entitled to all Signing Bonus shares of Restricted Stock that have vested at the time of termination, stock options that have vested at the time of termination and a pro-rata share of her cash bonus. As used in this Section 4(c), the term “Disability” shall mean the Company’s determination that due to physical or mental illness or incapacity, whether total or partial, Executive is substantially unable (with or without a reasonable accommodation) to perform her duties hereunder for a period of thirty (30) consecutive days or shorter periods aggregating sixty (60) days during any period of one hundred eighty (180) consecutive days.

Death. This Agreement shall terminate automatically on Executive’s death. Any Base Salary, including any accrued but unused vacation time, earned by Executive for services rendered prior to Executive’s death and any unpaid expense reimbursements shall be paid. In addition, all Signing Bonus shares of Restricted Stock that have vested at the time of death, stock options that have vested at the time of death and a pro-rata share of Executive’s cash bonus. Such payments will be paid to and such stock and options tendered to Executive’s surviving spouse, of if Executive does not leave a surviving spouse, to Executive’s estate. No other benefits shall be payable to Executive’s estate or heirs pursuant to this Agreement, but amounts may be payable pursuant to any life insurance or other benefit plans maintained in whole or in part by the Company for the benefit of Executive, her estate or heirs.

Timing of Payments. Notwithstanding any other provision with respect to the timing of payments under this Section 4, if, at the time of Executive’s termination, Executive is deemed to be a “specified employee” (within the meaning of Section 409A of the Internal Revenue Code (the “Code”), and any successor statute, regulation and guidance thereto) of the Company, then only to the extent necessary to comply with the requirements of Section 409A of the Code, any payments to which Executive may become entitled under this Section 4 which are subject to Section 409A of the Code (and not otherwise exempt from its application) will be withheld until the first (1^st) business day of the seventh (7^th) month following the termination of Executive’s employment with the Company, at which time Executive shall be paid an aggregate amount equal to six (6) months of payments otherwise due to Executive under the terms of this Section 4. After the first business day of the seventh (7^th) month following the termination of Executive’s employment and continuing each month thereafter, Executive shall be paid the regular payments otherwise due to Executive in accordance with the terms of the applicable provision of Section 4.

 

 

Inventions. The Company shall own all right, title and interest (including patient rights, copyrights, trade secret rights, mask work rights, trademark rights, and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all proprietary software and inventions (whether or not patentable), works of authorship, mask works, designations, designs, know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by Company or Executive prior to and during the Term of this Agreement in connection with or relating to the Company’s business (collectively, “Inventions”) and Executive will promptly disclose and provide all Inventions to the Company. All Inventions are work made for hire to the extent allowed by law and, in addition, Executive hereby makes all assignments necessary to accomplish the foregoing ownership. Executive shall further assist the Company, and execute any documents requested by the Company, at the Company’s expense, to further evidence, record and perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights assigned. By signing this Agreement, Executive acknowledges that she has been informed and advised of California Labor Code section 2870 relating to the assignment of inventions as set forth in the “Notice” attached as Exhibit “A” to this Agreement.

Proprietary Information. Executive agrees that all Inventions, and all other business, technical and financial information (including, without limitation, the identity of and information relating to customers or employees), the Company or Executive develops, learns or obtains prior to and during the term hereof that relate to the Company or the business or anticipated business of Company or that are received by or for the Company in confidence, which is not information in the public domain, constitute “Proprietary Information.” Executive will hold in confidence and not disclose or, except in performing hereunder, use any Proprietary Information. Upon termination and as otherwise requested by the Company, Executive will promptly return to the Company all items and copies containing or embodying Proprietary Information, including, but not limited to, any copies of documents, computer print-outs, computer tapes, floppy disks, CD ROMS, etc., in any form, format or manner whatsoever. Executive also recognizes and agrees that Executive has no expectation of privacy with respect to the Company’s telecommunications, networking or information processing systems (including, without limitation, stored computer files, e-mail messages and voice messages) and that Executive’s activity, and any files or messages, on or using any of those systems may be monitored at any time without notice.

Confidential Information. The parties acknowledge that during the Term, Executive will perform essential services for the Company, its employees and shareholders, and for customers of the Company. Therefore, Executive will be given an opportunity to meet, work with and develop close working relationships with the Company’s clients and customers on a first-hand basis and will gain valuable insight as to the clients’ operations, personnel and need for services. In addition, Executive will have access to, and be required to work with, a considerable amount of the Company’s Proprietary Information. All business practices, techniques or processes that (i) derive independent economic value, actual or potential from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy, are confidential ( the “Confidential Information”) and/or Proprietary. This includes, but is not limited to information concerning the Company’s intellectual property (including proprietary software), methods of operation, financial information, strategic planning, operational budgets and strategies, payroll data, management systems programs, computer systems, marketing plans and strategies, merger and acquisition strategies, customer lists, customer contracts, files, letters, memoranda, reports, records, data, employee lists, salary information, training manuals, and other materials and business information of a similar nature, including information about the Company itself, which Executive acknowledges and agrees has been compiled by the Company’s expenditure of a great amount of time, money and effort, and that contains detailed information that could not be created independently from public sources. Further, all data, spreadsheets, reports, records, know-how, verbal communication, proprietary and technical information and/or other confidential materials of a similar kind transmitted by the Company to Executive are also Confidential and/or Proprietary Information.

 

 

 

 

 

 

 

Notwithstanding the foregoing restricted unlawful conduct the parties agree that Executive may issue a general notification to customers upon the termination of the Agreement advising them of such termination and providing them with Executive’s contact information.

If Executive violates Executive’s obligations under this Section 7(a), then the time periods hereunder shall be extended by the period of time equal to that period beginning when the activities constituting such violation commenced and ending when the activities constituting such violation terminated.

Devotion to Employment. Executive shall devote substantially all of Executive’s business time and best efforts to the performance of Executive’s duties on behalf of the Company. During the Term, Executive shall not at any time or place or to any extent whatsoever, either directly or indirectly, without the express written consent of the Company (which consent can be withheld in the sole and absolute discretion of the Company), engage in any outside employment, or in any activity competitive with or adverse to Company’s business, practice or affairs, whether alone or as partner, member, officer, director, employee, shareholder of any corporation or as a trustee, fiduciary, consultant or other representative. This is not intended to prohibit Executive from engaging in nonprofessional activities such as personal investments or conducting to a reasonable extent private business affairs, as long as they do not conflict the with the Company as determined by the Company. Participation to a reasonable extent in civic, social or community activities is encouraged.

Competing Business. During the Term, Executive shall not, directly or indirectly, (including, without limitation, as a partner, member, director, officer or employee of, or lender or consultant to, any other personal entity, or shareholder (other than as the holder of less than five percent (5%) of the stock of a corporation the securities of which are traded on a national securities exchange or in the over-the-counter market)), for Executive, or on behalf of, or in conjunction with, any other person(s), company, partnership, corporation, or governmental entity, in any manner whatsoever, or in any other capacity, within, into or from the Restricted Territory (as defined below) engage or cause others to engage in the same or similar business as the Company and its subsidiaries affiliates or parent corporation or any aspect thereof, unless first authorized in writing by the Company, which authorization may be withheld in the sole and absolute discretion of Company. For purposes of this Section 7(c), the term “Restricted Territory” shall mean any geographical service area where the Company or any of its subsidiaries, affiliates or parent corporation is engaged in business sells products or performs services or has devoted resources to attempt to engage in business at any time, prior to the termination or at the time of termination or expiration. If Executive violates Executive’s obligations under this Section 7, then the time periods hereunder shall be extended by the period of time equal to that period beginning when the activities constituting such violation commenced and ending when the activities constituting such violation terminated.

Judicial Amendment. If the scope of any provision of this Section 7 is found by a court of competent jurisdiction to be too broad to permit enforcement to its full extent, then such provision shall be enforced to the maximum extent permitted by law. The parties agree that the scope of any provision of this Agreement may be modified by a judge in any proceeding to enforce this Agreement, so that such provision can be enforced to the maximum extent permitted by law. If any provision of this Agreement is found to be invalid or unenforceable for any reason, it shall not affect the validity of the remaining provisions of this Agreement.

 

Injunction. Executive acknowledges and agrees that a breach of Section 6 or 7 will cause immediate and irreparable injury and damage to the Company and that, upon a breach of Section 6 or 7, the Company cannot be made whole or have its interests completely protected solely by a monetary award of damages. Accordingly, Executive agrees that, if she breaches or threatens to breach any of the terms of Section 6 or 7, the Company shall be entitled to the issuance of a temporary and/or permanent injunction by any court of competent jurisdiction without the posting of any bond enjoining him from such unauthorized disclosure. The terms of Section 6 and 7 will survive the termination or expiration of this Agreement.

Termination of Options. In addition to the foregoing and any other remedies that the Company may have, Executive acknowledges and agrees that, if Executive breaches Section 6 or 7 of this Agreement, the Company shall have the right in its sole discretion to terminate any and all of Executive’s granted and vested Company stock options.

Additional Remedies. The foregoing remedies are in addition to any other rights or remedies available to the Company.

Attorney’s Fees. In the event Executive breaches or threatens to breach any of the terms of Section 6 or 7 of this Agreement, the Company shall be entitled to recover the actual attorneys' fees, costs and expenses incurred by the Company in connection therewith.

 

To the fullest extent permitted by applicable law, the Employer agrees to indemnify, defend and hold the Executive harmless from any and all claims, actions, costs, expenses, damages and liabilities, including, without limitation, reasonable attorneys’ fees, hereafter or heretofore arising out of or in connection with activities of the Employer or its employees, including the Executive, or other agents in connection with and within the scope of this Agreement or by reason of the fact that she is or was a director or officer of the Employer or any affiliate of the Employer. To the fullest extent permitted by applicable law, the Employer shall advance to the Executive expenses of defending any such action, claim or proceeding. However, the Employer shall not indemnify the Executive or defend the Executive against, or hold her harmless from any claims, damages, expenses or liabilities, including attorneys’ fees, resulting from unlawful conduct on the part of Executive if, at the time of the unlawful conduct, the Executive believed the conduct to be unlawful. The duty to indemnify shall survive the expiration or early termination of this Agreement as to any claims based on facts or conditions which occurred or are alleged to have occurred prior to expiration or termination.

 

 

All amounts paid to Executive hereunder shall be subject to all applicable federal, state and local wage withholding.

 

 

Executive represents and warrants that her entering into this Agreement does not, and that her performance under this Agreement and consummation of the transactions hereby will not, violate the provisions of any agreement or instrument to which Executive is a party or any decree, judgment or order to which Executive is subject, and that this Agreement constitutes a valid and binding obligation of Executive in accordance with its terms. A breach of this representation will render all of the Company’s obligations under this Agreement ab initio.

 

 

Any notice required or permitted to be given by either party under or in connection with this Agreement shall be in writing and shall be deemed duly given (i) if personally delivered, (ii) if sent by registered or certified mail, return receipt requested, or (iii) if sent via facsimile transmission upon electronic confirmation of receipt thereof during normal business hours; to the applicable party at the address indicated below:

 

If to the Company:	Global Med Technologies, Inc. 12600 West Colfax Avenue Suite C-420 Lakewood CO 80215-3734
	Attention:	Michael I. Ruxin, M.D.,
		Chairman and CEO
	Fax:	(303) 238-3368
With a copy to:	K&L Gates LLP 200 S. Biscayne Blvd., Suite 3900 Miami, FL 33131
	Attention:	Clayton E. Parker, Esq.
	Fax:	(305) 358-7095
If to Executive:	15353 Clementia Circle Rancho Murieta, CA 95683
	Attention:	Karen Davis
	Fax:	(636) 229-0407
With a copy to:	MURPHY AUSTIN ADAMS SCHOENFELD LLP 304 “S” Street Sacramento, CA 95811
	Attention:	Dennis R. Murphy
	Fax:	(916) 503-4000

 

or, to such other address as shall be designated by such party in a written notice to the other party pursuant to the provisions of this Section 12. All such notices, requests, demands and other communications shall be effective when sent.

 

 

This Agreement constitutes the entire agreement between the parties as to the subject matter hereof. Accordingly, there are no side agreements or verbal agreements other than those that are stated in this document. Any amendment, modification or change in said Agreements must be done so in writing and signed by both parties.

 

 

 

In the event a court or judge declares that any provision of this Agreement is invalid or unenforceable, it shall not affect or invalidate any of the remaining provisions. Further, the court shall have the authority to re-write that portion of the Agreement it deems unenforceable, to make it enforceable.

 

The laws of the State of California shall govern the interpretation and application of all of the provisions of this Agreement.

IN WITNESS WHEREOF, the Company and Executive have executed this Agreement effective on the date set forth above.

 

THE COMPANY:			EXECUTIVE:
GLOBAL MED TECHNOLOGIES, INC.
By:	/s/Michael I. Ruxin, M.D.		/S/ Karen Davis
Name:	Michael I. Ruxin		Karen Davis, Individually
Title:	CEO

(California Employees)

THIS IS TO NOTIFY you in accordance with Sections 2870 and 2872 of the California Labor Code that the invention assignment agreement between you and the Company does not require you to assign or offer to assign to the Company any invention that you developed entirely on your own time without using the Company’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 Company’s business, or actual or demonstrably anticipated research or development of the Company; or

 

2. Result from any work performed by you for the Company.

 

To the extent a provision in your employment agreement purports to require you to assign an invention otherwise excluded from being required to be assigned pursuant to the preceding paragraph, the provision is against the public policy of the State of California and is unenforceable.

 

This limited exclusion does not apply to any patent or invention covered by a contract between the Company and the United States or any of its agencies requiring full title to such patent or invention to be in the United States.

 

The employee bears the burden of proving that an invention created by the employee should be excluded from the invention assignment agreement.

 

I ACKNOWLEDGE RECEIPT of a copy of this notification.

 

By:	/S/Karen Davis
	Karen Davis
Date:	November 3, 2008