Executive Employment Agreement between Maxxim Medical, Inc. and Russell D. Hays

Summary

This agreement outlines the employment terms for Russell D. Hays as Vice Chairman, CEO, and Board Member of Maxxim Medical, Inc., starting June 18, 2001, for a five-year term. Hays will receive a base salary, bonuses, stock, options, and benefits, with specific terms for severance, equity, and expense reimbursement. The agreement includes conditions for termination, arbitration of disputes, and requirements for confidentiality and non-competition after employment. Both parties must sign for the agreement to be valid, and it is governed by New York law.

EX-10.1 3 g71623ex10-1.txt RUSSELL D. HAYS EMPLOYMENT AGREEMENT 1 MAXXIM MEDICAL, INC. EXECUTIVE EMPLOYMENT AGREEMENT THE FOLLOWING CONSTITUTES THE EXECUTIVE EMPLOYMENT AGREEMENT ("AGREEMENT") BETWEEN MAXXIM MEDICAL, INC. ("MAXXIM") AND RUSSELL D. HAYS ("CEO"): POSITIONS & TITLES: Vice Chairman, Chief Executive Officer and Member of the Board of Directors (the "Board") of Maxxim. REPORTING: CEO will report to the Chairman of the Board and the Board of Directors of Maxxim. Maxxim's President, Chief Financial Officer and other senior executive officers will report to CEO. START DATE: June 18, 2001. TERM: 5 years. ANNUAL CASH COMPENSATION: Base salary of $700,000, plus bonus earned as follows: (i) $400,000 for the Company's annual business plan proposed by CEO and as approved by the Board (the "Plan"), plus (ii) $150,000 for making material progress in respect of the annual Corporate Goals established by the Board. CEO must be employed by the Company and in good standing on the date the Company's auditors approve the prior fiscal year's financial statements to be eligible for a bonus in respect of such prior fiscal year. EQUITY PACKAGE: MAXXIM SHARES AND OPTIONS with purchase and strike price of $5.00 per share (split adjusted) all as set forth below. STOCK: 200,000 SHARES - CEO will pay cash of $500,000 for 100,000 shares and Maxxim will loan CEO $500,000 for 100,000 shares. The loan will be evidenced by CEO's non-cash pay note that will (i) be a 9-year balloon; (ii) bear interest at the lowest rate allowable by the Internal Revenue Service which avoids the imputation of interest income to CEO, compounding annually, but with no interest payments required until maturity or an earlier acceleration; (iii) be prepayable out of and accelerate to

2 the extent of after tax proceeds from the disposition of Maxxim shares and options; (iv) become due and payable (accelerate) upon termination of employment for any reason; and (v) be secured by a pledge of CEO's Company stock and options. STOCK OPTIONS: 2,000,000 OPTIONS, with an exercise price of $5.00 per share, having a term of 10 years, to vest 20% on each of the first five anniversaries of employment, with acceleration upon a change in control. Vesting ceases and the term of unvested options lapse upon termination of employment for any reason. Vested options may be exercised for 90 days following a termination of employment, except upon a termination for cause.

3 SEVERANCE: In the event of the termination of CEO's employment by the Board other than for cause of disability, CEO shall receive the lesser of (i) $500,000 to be paid over 12 months if such termination occurs during the initial 4 years of the term of this Agreement or (ii) $41,667 each month for the remaining term of this Agreement if such termination occurs during the last year of the term of this Agreement. As a condition to the receipt of such payments, CEO shall execute a general release in favor of the Company. For purposes of this Agreement, "cause" shall mean (i) that CEO is charged with a felony or other crime involving moral turpitude, (ii) CEO commits fraud, embezzlement or other conduct adverse to the interests of the Company of its affiliates, or (iii) CEO substantially fails to perform his duties or obligations to the Company as a director or officer. AUTOMOBILE ALLOWANCE: CEO will receive an annual automobile allowance of $15,000. COMMUTING EXPENSES: Maxxim will reimburse CEO for all reasonable and documented business-related commuting expenses incurred in connection with CEO's performance of his duties and obligations under this Agreement, including reasonable apartment/hotel expenses, auto rental expenses, and air transportation. ADDITIONAL BENEFITS: CEO will participate in Maxxim's health and other benefit plans and programs for senior executives and be covered under Maxxim's D&O insurance and corporate indemnification policies. MISCELLANEOUS: This Agreement is to be governed by and construed in accordance with the laws of the State of New York, without reference to principles of conflict of laws. Any dispute between Maxxim and CEO arising out of, related to, or in connection with any relationship between them, contractual or otherwise (including without limitation those created by or in connection with this Agreement), shall be subject to binding confidential arbitration in New York, New York in accordance with the rules of the Commercial Panel of the American Arbitration Association (the "AAA" and not in accordance with the Employment Dispute Resolution Rules of the AAA). This agreement (i) supersedes all other offers, agreements, promises, and representations between Maxxim and CEO, and shall only be binding on Maxxim and CEO if and when Maxxim and CEO execute the Agreement below and (ii) may only be amended by a writing executed by Maxxim and CEO. For purposes of the prior two sentences, "Maxxim" includes

4 Maxxim Medical, Inc., its subsidiaries and related entities; Fox Paine & Company, LLC, its subsidiaries and related entities including without limitation Fox Paine Capital, LLC, Fox Paine Capital Fund, L.P., Fox Paine Capital Fund II GP, LLC, Fox Paine Capital Fund II, L.P., and all persons and entities that are partners or shareholders or members in any such related entities) and all partners, members, directors, employees, shareholders and agents of any of the foregoing. Maxxim and CEO agree to further document the provisions of this Agreement as need be and to enter into other agreements regarding (i) protection of Maxxim's corporate trade secrets and the like and (ii) CEO's post-Maxxim employment non-competition and non-solicitation of Maxxim employees and customers for a period of twelve (12) months.

IN WITNESS WHEREOF, the parties executed this agreement as of June 13, 2001. MAXXIM MEDICAL, INC. BY: /s/ Saul A. Fox ---------------------------------- SAUL A. FOX CHAIRMAN OF THE BOARD OF DIRECTORS /s/ Russell D. Hays ---------------------------------- RUSSELL D. HAYS Address: 9 Stratford Way Lincoln, MA 01773