<PAGE> 1
CONFORMED
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998 OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____________ TO _____________
COMMISSION FILE NUMBER 33-23786-LA
AMDL, INC.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
DELAWARE 87-0188822
--------------------------------- ------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
14272 FRANKLIN AVE., SUITE 106
TUSTIN, CALIFORNIA 92780-7039
---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
(714) 505-4460
- --------------------------------------------------------------------------------
(Issuer's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of August 10, 1998, the Company had outstanding 33,754,903 shares of its
common stock, par value $.001.
Transitional Small Business Disclosure Format
(Check one):
Yes No X
--- ---
<PAGE> 2
AMDL, INC.
(A Development Stage Company)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I FINANCIAL INFORMATION....................................................... 3
ITEM 1. FINANCIAL STATEMENTS........................................................ 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION................... 3
Preliminary Note Regarding Forward Looking Financial Statements......... 3
Balance Sheets as of June 30, 1998 and December 31, 1997................ 6
Statements of Operations for the six months ended
June 30, 1998 and 1997 and for the period from inception
(July 10, 1987) to June 30, 1998........................................ 7
Statements of Cash Flows for the six months
ended June 30, 1998 and 1997 and for the period
from inception (July 10, 1987) to June 30, 1998......................... 8
Notes to the Financial Statements....................................... 9
PART II OTHER INFORMATION........................................................... 10
</TABLE>
-2-
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The financial statements included herein have been prepared by AMDL, INC. (the
"Company"), without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information normally included in the
financial statements prepared in accordance with generally accepted accounting
principles has been omitted pursuant to such rules and regulations. However, the
Company believes that the disclosures are adequate to make the information
presented not misleading. These financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's annual report on Form 10-KSB for the fiscal year ended December 31,
1997, as filed with the Securities and Exchange Commission.
The financial statements are included after Item 2.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
In February 1998, the Board adopted a resolution authorizing the Company to make
a $7,500 investment in a newly formed entity, Sino-American Medical, Inc.
("SAM"), a Delaware corporation. The Board also authorized certain AMDL
personnel and a related party to accept executive positions with SAM and utilize
a small portion of their employment schedule at AMDL for SAM related activities.
SAM reimburses the Company for incidental expenses such as telephone and
postage. Douglas C. MacLellan, a Director of the Company accepted the position
of Chairman of the Board and Secretary of SAM. The other Company personnel
include That. T. Ngo, Ph.D., the Company's President and Chief Executive Officer
and Director, Harry Berk, Vice President, Chief Financial Officer, Secretary and
Treasurer and Thomas V. Tilton, Director of Corporate Development. Dr. Ngo
accepted the position of Director, President and CEO of SAM. Harry Berk accepted
the position of Treasurer and Thomas V. Tilton accepted the position of Vice
President of SAM. SAM was created to participate in a joint venture in China
leading to the privatization of a Chinese pharmaceutical firm. It was the AMDL
Board's position that AMDL did not have the financial resources to pursue the
SAM opportunity and that the nominal investment in SAM and permission to permit
certain AMDL personnel to engage in limited SAM activities was in the best
interests of AMDL and that the terms of the SAM transaction were fair and
reasonable. AMDL made the $7,500 investment in SAM in April 1998. The investment
is being accounted for under the equity method.
PRELIMINARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-QSB contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 ("Exchange Act"). The Company's actual results
may differ materially from the results projected in the forward-looking
statements. Factors that might cause such a difference include, but are not
limited to, those discussed below.
GENERAL
Since inception, the Company has been in the development stage and has devoted
its resources to research and development, obtaining regulatory approval and the
commercialization of its proposed diagnostics for cancer and other diseases. For
the six month period ended June 30, 1998, the Company generated $97,531 in net
sales of products. Historically, the Company's income has come from the sale of
licenses, royalties and options to purchase marketing rights. The Company has
incurred losses since inception and expects to incur a significant operating
loss for the fiscal year ending December 31, 1998. The Company will require
-3-
<PAGE> 4
substantial additional funding for continuing research and development,
obtaining regulatory approval and for commercialization of its products. There
can be no assurances that the Company will be able to obtain such funding when
needed or at all, or if available, what the terms thereof will be.
LIQUIDITY AND CAPITAL RESOURCES
Historically, operations have been funded principally through private placements
of its equity securities, and income received from the sale of licenses,
royalties and options to acquire marketing rights. The Company requires
significant funding for the continued development of its test kit systems,
clinical trials and other actions necessary to obtain regulatory approvals and
to engage in continued marketing and sales activities. The amount of
expenditures required to maintain operations and to continue product development
far exceeds existing cash, which was $413,551. The availability of sources of
cash for such expenditures is presently unknown. From December 31, 1997 to June
30, 1998, the Company's cash, cash equivalents and short-term investments
decreased to $568,854 as a result of working capital requirements. Cash is being
depleted at the rate of between $100,000 and $150,000 per month depending on the
level of operations and activities. The Company is also hopeful of obtaining
additional revenues from product sales, but there is no commitment by any person
for purchase of any of the Company's products. In the absence of significant
sales and profits, the Company may seek to raise additional funds to meet its
working capital needs principally through the additional sales of its
securities. However, there is no assurance that the Company will be able to
obtain sufficient additional funds when needed, or that such funds, if
available, will be obtainable on terms satisfactory to the Company. The Company
can make no prediction as to when, if ever, it will be profitable.
The Company believes that its present cash and cash equivalents balances are
sufficient only for operations through the third quarter of 1998, assuming the
Company is able to extend forbearance of collection efforts on its outstanding
indebtedness. However, certain scheduled activities were substantially reduced
or cancelled after the end of second quarter and will remain reduced or
cancelled until additional operating capital is obtained. The Company is
continuing its efforts to raise capital to finance continuing operations,
provide assistance to ICD in connection with international market development
for DR-70(TM), accelerate international and domestic market development for the
Company's other products, develop and commercialize new products and obtain the
required regulatory approvals. There can be no assurance as to the success of
these efforts, or, if successful, what the cost or terms thereof will be.
Currently, the Company does not anticipate any significant changes in the number
of employees. The Company may not be able to retain its present employees if
additional financing is not obtained. If such financing is obtained, the Company
may also seek to add employees to further its efforts to commercialize its
products.
At June 30, 1998, the Company was indebted for $571,407 for accrued salaries
payable to five persons who are officers and other employees and former
employees, four of whom agreed to payments equal to their proportionate share of
five percent of sales revenues, if any, of the Company, but not less than $500
per month per person. In addition, effective July 16, 1998, 50% of executive
compensation is being accrued pursuant to agreement with four executives.
RESULTS OF OPERATIONS
Reference is made to the Company's annual report on Form 10-KSB for the fiscal
year ended December 31, 1997 for a detailed discussion and analysis of the
Company's financial condition and results of operations for the periods covered
by that report. The net loss for the six months ended June 30, 1998 was
approximately $895,000 and the Company anticipates a net loss for the quarter
ending September 30, 1998 of approximately $400,000.
-4-
<PAGE> 5
Revenues
During the quarter ended June 30, 1998, the Company received $54,928 in revenue
from the sales of cancer diagnostic kits and OEM products as compared to
revenues of $31,036 for the second quarter 1997. No significant sales are
expected for the third quarter of 1998.
Research and Development and General and Administrative Expenses
Research and development expenses for the quarter ended June 30, 1998, were
76.0% lower than the previous quarter and 66.0 % lower than the second quarter
of 1997. However, for the six months ended June 30, 1998 as compared to the six
months ended June 30, 1997, research and development expenses were not
significantly reduced. Expense categories reflecting decreases during second
quarter 1998 include the research and development expenses associated with the
now completed additional clinical trial data required for the PyloriProbe(TM)
application resubmission to the U. S. Food and Drug Administration and
laboratory expense, tHE research and development portion of payroll and the
reversal of previously accrued consulting expenses reflecting the Company's
attempt to reduce these costs.
General and administrative expenses for the quarter ended June 30, 1998 were
3.7% lower than the prior year quarter. On a year-to -date basis, general and
administrative expenses were 5.5 % lower compared with the first six months of
the prior year.
During the three month period ended June 30, 1998, the Company realized interest
income of $9,799 compared to $32,523 of interest income for the equivalent
period in the prior year due to available funds for investments. Interest income
will significantly decline as short term investments are used in operations.
-5-
<PAGE> 6
AMDL, INC.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, Dec. 31,
1998 1997
----------- ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 568,854 $ 1,498,540
Accounts receivable 13,007 --
------------ ------------
Total current assets 581,861 1,498,540
OTHER ASSETS 7,863 7,863
------------ ------------
$ 589,724 $ 1,506,403
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 25,000 $ 25,000
Accounts payable and accrued expenses 124,644 125,748
Accrued payroll and related expenses 657,939 674,669
Customer deposit 3,735 32,235
------------ ------------
Total current liabilities 811,318 857,652
------------ ------------
COMMITMENTS
STOCKHOLDERS' EQUITY
Preferred stock, 10,000,000 shares authorized, no shares issued
or outstanding at June 30, 1998 and December 31, 1997 -- --
------------ ------------
Common stock, $0.001 par value, 50,000,000 shares authorized,
33,754,903 shares issued and outstanding at
June 30, 1998 and December 31, 1997 33,755 33,755
Additional paid-in capital 11,934,541 11,909,699
Deficit accumulated during the development stage (12,189,890) (11,294,703)
------------ ------------
(221,594) 648,751
------------ ------------
$ 589,724 $ 1,506,403
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
-6-
<PAGE> 7
AMDL, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
From
Inception on
For the Three Months Ended For the Six Months Ended July 10, 1987
June 30, June 30, through
---------------------------- --------------------------- June 30,
1998 1997 1998 1997 1998
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NET SALES $ 54,928 $ 31,036 $ 97,531 $ 31,036 $ 139,967
COSTS OF SALES 45,674 17,339 79,832 17,339 102,871
------------ ------------ ------------ ------------ ------------
Gross Profit 9,254 13,697 17,699 13,697 37,096
------------ ------------ ------------ ------------ ------------
OPERATING EXPENSES:
Research and development 73,998 217,463 381,565 411,543 6,275,203
General and administrative 246,777 263,984 549,559 589,530 7,270,257
------------ ------------ ------------ ------------ ------------
320,775 481,447 931,124 1,001,073 13,545,460
------------ ------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (311,521) 467,750 (913,425) (987,376) (13,508,364)
------------ ------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense -- -- -- -- (561,016)
Interest income 9,799 32,523 25,738 68,609 235,454
Loss on equity investment (7,500) -- (7,500) -- (7,500)
Other 1,651,536
------------ ------------ ------------ ------------ ------------
2,299 32,523 18,238 68,609 1,318,474
------------ ------------ ------------ ------------ ------------
NET LOSS $ (309,222) $ (435,227) $ (895,187) $ (918,767) $(12,189,890)
============ ============ ============ ============ ============
BASIC AND DILUTED NET LOSS
PER SHARE $ (0.01) $ (0.01 $ (0.03) $ (0.03)
============ ============ ============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING
33,754,903 33,641,860 33,754,903 33,587,362
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
-7-
<PAGE> 8
AMDL, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
INCEPTION
SIX SIX (JULY 10, 1987)
MONTHS ENDED MONTHS ENDED TO
JUNE 30, JUNE 30, JUNE 30,
1998 1997 1998
------------- ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (895,187) $ (918,767) $(12,189,890)
Adjustments to reconcile net loss to net cash
used in operating activities -
Depreciation and amortization -- -- 497,288
Amortization of deferred interest -- -- 312,000
Loss on equity investment 7,500 -- 7,500
Common stock subscribed -- -- 300,000
Stock issued for services -- 17,000 312,541
Warrants or options issued for services
(calculated pursuant to FAS 123) 24,842 -- 686,371
Increase in accounts receivable (13,007) -- (13,007)
Increase in other assets -- -- (7,863)
Increase (decrease) in accounts payable and
accrued expenses (1,104) (59,286) 150,099
Increase (decrease) in accrued payroll and
related expenses (16,730) (217,678) 657,939
Increase (decrease) in customer deposit (28,500) -- 3,735
------------ ------------ ------------
Net cash used in operating activities (922,186) (1,178,731) (9,283,287)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment -- -- (225,930)
Expenditures for patents -- -- (154,682)
Equity investment (7,500) (7,500)
------------ ------------ ------------
Net cash used in investing activities (7,500) -- (388,112)
------------ ------------ ------------
Cash flows from financing activities:
Borrowings under notes payable, net -- -- 59,115
Repayments under capital lease obligation -- (17,951) (116,676)
Proceeds from issuance of common stock -- 25,000 10,240,747
Net effect of merger with cvi -- -- 57,067
------------ ------------ ------------
Net cash provided by financing activities -- 7,049 10,240,253
------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents (929,686) (1,171,682) 568,854
Cash and cash equivalents, beginning of period 1,498,540 3,504,660 --
------------ ------------ ------------
Cash and cash equivalents, end of period $ 568,854 $ 2,332,978 $ 568,854
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
-8-
<PAGE> 9
AMDL, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
NOTE 1 - MANAGEMENT OPINION
The financial statements included herein have been prepared by AMDL,
INC. (the Company), without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information normally included in the financial statements prepared
in accordance with generally accepted accounting principles has been
omitted pursuant to such rules and regulations. However, the Company
believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that the financial
statements be read in conjunction with the financial statements and
notes thereto included in the Company's annual report on Form 10-KSB
for the fiscal year ended December 31, 1997, as filed with the
Securities and Exchange Commission.
NOTE 2 - STOCK BASED COMPENSATION PLANS
The following is a status of the stock options outstanding at June
30, 1998:
<TABLE>
<CAPTION>
Shares Weighted Average
(000) Exercise Price
------ ----------------
<S> <C> <C>
Outstanding, December 31, 1997 4,650 $ 0.824
Granted 300 0.138
Exercised -- --
Expired/Forfeited (57) (0.802)
------ -------
Outstanding, June 30, 1998 4,893 $ 0.782
====== =======
Exercisable at June 30, 1998 4,531 $ 0.812
====== =======
</TABLE>
The following is a status of the warrants outstanding at June 30,
1998:
<TABLE>
<CAPTION>
Shares Weighted Average
(000) Exercise Price
------ ----------------
<S> <C> <C>
Outstanding, December 31, 1997 1,889 $0.8236
Granted 150 0.160
Exercised -- --
Expired/Forfeited -- --
----- ------
Outstanding, June 30, 1998 2,039 $0.786
===== ======
</TABLE>
All of the warrants are exercisable at June 30, 1998.
-9-
<PAGE> 10
NOTE 3 - BASIC AND DILUTED NET LOSS PER SHARE
Basic and diluted net loss per share is calculated using the weighted
average number of shares outstanding for the period. Common
equivalent shares are excluded from the computation as their effect
is antidilutive.
NOTE 4 - INVESTMENT IN NEWLY FORMED ENTITY
The Board of Directors authorized the Company to make a $7,500
investment in a newly formed entity, Sino-American Medical, Inc.
(SAM). This investment was made in April 1998. Three of the Company's
current employees (the President, Chief Executive Officer and
Director; the Chief Financial Officer, Secretary and Treasurer, and
the Director of Corporate Development) have been authorized by the
Board of Directors to utilize some efforts of their employment
schedules at AMDL for SAM related activities. At June 30, 1998, the
Company maintained a 17 percent ownership in SAM. Due to the
Company's significant presence at SAM, the investment has been
accounted for under the equity method. Among other provisions, the
equity method requires the Company to recognize unrealized
gains/losses for their proportionate ownership share of the net
income/losses of SAM. Unrealized losses are limited to the investment
made by the Company in SAM. During the second quarter, the Company's
proportionate share of the loss in SAM was in excess of $7,500.
Accordingly, $7,500 has been included as a loss in equity investment
on the accompanying statement of operations.
NOTE 5 - RECLASSIFICATIONS
Certain reclassifications have been made to the financial statements
at June 30, 1997 in order to conform to classifications used in the
current quarter.
PART II - OTHER INFORMATION
Item 1 Legal Proceedings.
Inapplicable.
Item 2 Changes in Securities and Use of Proceeds.
Inapplicable.
Item 3 Defaults Upon Senior Securities.
Inapplicable.
Item 4 Submission of Matters to a Vote of Security Holders.
Inapplicable.
Item 5 Other Information.
Inapplicable
-10-
<PAGE> 11
Item 6 Exhibits and Reports on Form 8-K.
(a) Exhibits and Index of Exhibits
<TABLE>
<S> <C>
10.36 Salary Continuation Agreement dated May 21, 1998 with That
T. Ngo, Ph.D.
10.37 Salary Continuation Agreement dated May 21, 1998 with
Thomas V. Tilton.
10.38 Salary Continuation Agreement dated May 21, 1998 with
Harry Berk.
10.39 Salary Continuation Agreement dated May 21, 1998 with Gary
L. Dreher.
10.40 Agreement dated May 21, 1998 with William M. Thompson, M.D.
10.41 Amendment No. 1 to Employment Agreement dated July 1, 1998
with That T. Ngo, Ph.D.
10.42 Agreement Relating to Salary Deferral dated July 1, 1998
with Thomas V. Tilton.
10.43 Agreement Relating to Salary Deferral dated July 1, 1998
with Harry Berk.
27 Financial Data Schedule
</TABLE>
(b) Reports of Form 8-K.
The Company filed a Form 8-K dated July 1, 1998 relating to the
accrual of 50% of executive compensation effective July 16, 1998
and other internal belt-tightening measures.
The Company filed a Form 8-K dated August 3, 1998 regarding
receipt of FDA approval for marketing of its PyloriProbe(TM).
-11-
<PAGE> 12
SIGNATURES
In accordance with the requirements of the Exchange Act , the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
AMDL, INC.
August 10, 1998 By: /s/ HARRY BERK
-----------------------------------
Harry Berk
Chief Accounting Officer
August 10, 1998 By: /s/ THAT T. NGO
-----------------------------------
That T. Ngo
President
-12-
<PAGE> 13
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.36 Salary Continuation Agreement dated May 21, 1998 with That T.
Ngo, Ph.D.
10.37 Salary Continuation Agreement dated May 21, 1998 with Thomas
V. Tilton.
10.38 Salary Continuation Agreement dated May 21, 1998 with Harry
Berk.
10.39 Salary Continuation Agreement dated May 21, 1998 with Gary L.
Dreher.
10.40 Agreement dated May 21, 1998 with William M. Thompson, M.D.
10.41 Amendment No. 1 to Employment Agreement dated July 1, 1998
with That T. Ngo, Ph.D.
10.42 Agreement Relating to Salary Deferral dated July 1, 1998 with
Thomas V. Tilton.
10.43 Agreement Relating to Salary Deferral dated July 1, 1998 with
Harry Berk.
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 10.36
SALARY CONTINUATION AGREEMENT DATED MAY 21, 1998 WITH THAT T. NGO, PH.D.
SALARY CONTINUATION AGREEMENT
This Salary Continuation Agreement, dated as of May 21, 1998
("Agreement"), by and between AMDL, INC., a Delaware corporation (the "Company")
and THAT T. NGO, PH.D. (the "Employee"), sets forth certain benefits to be
received by the Employee upon the occurrence of a Termination Event (as defined
in Section 2.3 below) following a Change in Control of the Company (as defined
in Section 2.2 below).
I
RECITALS
1.1 The Company considers it essential to the best interests of its
shareholders to foster the continuous employment of certain key management
personnel. In this connection, the board of directors of the Company (the
"Board") recognizes that, as is the case with many publicly held corporations,
the possibility of a Change in Control of the Company may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of certain key management
personnel, including the Employee, to the detriment of the Company and its
shareholders.
1.2 The Board has determined that the continued employment of the
Employee is essential to the best interests of the Company's shareholders and to
reinforce and encourage the Employee's continued attention and dedication to his
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control of the Company, the Company
desires to enter into this Agreement with the Employee.
II
AGREEMENT
2.1 Termination Following a Change in Control. After a Change in
Control of the Company and the occurrence of a Termination Event, the Employee
shall be entitled to Termination Benefits (as defined in Section 2.4) during the
term of this Agreement, all as provided in this Agreement.
2.2 Definition of "Change in Control". A "Change in Control" of the
Company shall be deemed to have occurred upon the occurrence of any one or more
of the following events:
(a) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other
than the Employee or a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, hereafter becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the combined voting power
of the Company's then outstanding securities;
(b) during any period (other than any period prior to the execution of
this Agreement), individuals who at the beginning of such period constitute the
Board and any new directors (other than directors designated by a person who has
entered into an agreement with the Company to effect a transaction described in
paragraph (a) or (c) of this Section 2.2) whose election by the Board or
nomination for election by the Company's shareholders was approved by a vote of
at least a majority of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or
(c) the shareholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 51% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation; or
-1-
<PAGE> 2
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
2.3 Definition of "Termination Event". A Termination Event shall be
deemed to have occurred upon the occurrence of any one or more of the following
events:
(a) Termination by the Company of Employee's employment for a reason
other than the Employee's willful and continued failure to substantially perform
the duties with the Company (other than any such failure resulting from
incapacity due to physical or mental illness or any such actual or anticipated
failure by the Employee for reasons set forth in Section 2.3(b) below) after a
written demand for substantial performance is delivered to the Employee by the
Board, which demand specifically identifies the manner in which the Board
believes that the Employee has not substantially performed his duties.
For purposes of this Section 2.3(a), no act, or failure to act, on the
part of the Employee shall be deemed "willful" unless done, or omitted to be
done, not in good faith and without reasonable belief that such action or
omission was in the best interest of the Company.
(b) The occurrence of any of the following events described in
subparagraphs (i) - (vii) of this paragraph (b), without the express written
consent of the Employee. Notwithstanding any other provision of this Agreement,
the Employee's continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting a Termination Event as
described in this Section 2.3(b).
(i) the assignment of any duties inconsistent with the Employee's
status as a President of the Company or a substantial adverse alteration in the
nature or status of his responsibilities from those in effect immediately prior
to the Change in Control of the Company;
(ii) a reduction of the Employee's annual salary by the Company as
in effect on the date thereof or as the same may be increased from time to time
except for across-the-board salary reductions similarly affecting all senior
executives of the Company and all senior executives of any person in control of
the Company;
(iii) the relocation of the Company's principal executive offices
to a location more than fifty (50) miles from the location of such offices
immediately prior to the Change in Control of the Company or the Company's
requirement that the Employee be based anywhere other than the Company's
principal executive offices except for required travel on the Company's business
to an extent substantially consistent with the Employee's present business
travel obligations;
(iv) the failure by the Company, without the consent of the
Employee, to pay any portion of the Employee's current compensation except
pursuant to an across-the-board compensation deferral similarly affecting all
senior executives of the Company and all senior executives of any person in
control of the Company, within seven days of the date such compensation is due;
(v) the failure by the Company to continue in effect any
compensation plan in which the Employee participates immediately prior to the
Change in Control of the Company which is material to the Employee's total
compensation, including but not limited to the Company's profit sharing plan, or
any substitute plans adopted prior to the Change in Control of the Company,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure by the
Company to continue the Employee's participation therein (or in such substitute
or alternative plan) on a basis not materially less favorable, both in terms of
the amount of benefits provided and the level of the Employee's participation
relative to other participants, as existed at the time of the Change in Control
of the Company;
(vi) the failure by the Company to continue to provide the Employee
with benefits substantially similar to those currently enjoyed under any of the
Company's pension, life insurance, medical, health and accident, or disability
plans in which the Employee was participating at the time of the Change in
Control of the Company, the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits or deprive the
Employee of any material fringe benefit enjoyed by the Employee at the time of
the Change in Control of the Company, or the failure by the Company to provide
the Employee with the number of paid vacation days to which the Employee is
entitled on the basis of years of service with the Company in accordance with
the Company's normal vacation policy in effect at the time of the Change in
Control of the Company; or
-2-
<PAGE> 3
(vii) the failure of the Company to obtain a satisfactory
agreement from any successor to assume and agree to perform this Agreement, as
contemplated in Section 3.1.
(c) Except as provided in Section 3.1(a), the term "date of
termination" used in this Agreement shall mean the date on which a Termination
Event is deemed to have occurred.
2.4 Definition of "Termination Benefits"; Payment of Termination
Benefits. (a) The term "Termination Benefits" shall mean the payment or
provision of all of the following at such times as provided below:
(i) salary through the date of termination at the rate in effect at
that time, plus all other amounts to which the Employee is entitled under any
compensation plan of the Company, shall be paid at the time such payments are
due, but in any event no later than six (6) months after the date of
termination;
(ii) commencing thirty (30) days after the date of termination, the
payment in six (6) equal monthly installments of all prior unpaid or deferred
salary due Employee, which the parties acknowledge to be the amount of
$39,083.36 as of the date hereof;
(iii) a severance payment (in an amount equal to six (6) months'
salary at the rate in effect on the termination date (hereinafter, "Severance
Payment")) shall be paid in six (6) equal monthly payments after the date of
termination; provided, however, that the Severance Payment will be reduced to
the maximum amount, determined under Section 280G(b) of the Internal Revenue
Code of 1986, as amended (the "Code"), which may be paid to the Employee and not
be deemed "excess parachute payments" (as defined in Section 280G(b) of the
Code), if any;
(iv) the Company shall pay all legal fees and expenses incurred by
the Employee as a result of such termination (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by this Agreement or
in connection with any tax audit or proceeding to the extent attributable to the
application of Section 280G(b) of the Code, to any payment or benefit provided
hereunder), within five days after request for payment by the Employee
accompanied with such evidence of fees and expenses incurred as the Company
reasonably may require;
(v) the Company shall continue to provide the Employee for a period
of six (6) months after the date of termination with benefits substantially
similar to those enjoyed by the Employee under the Company's medical plan in
which the Employee was participating at the time the Change in Control of the
Company occurred;
(vi) any and all options to purchase securities of the Company held
by the Employee on the date of termination (whether issued prior to or after the
date hereof and whether or not otherwise fully vested and immediately
exercisable by the Employee) shall be fully vested and immediately exercisable
by the Employee from and after the date of termination; and
(vii) Employee shall be entitled to assume any and all life
insurance policies on the life of the Employee and Company shall transfer all
such policies to Employee upon written request to do so. In the event any of
such insurance policies are whole life policies or have a paid up cash surrender
value as at the date of transfer, Employee shall purchase such policies for an
amount equal to their cash surrender value as of the Termination Date.
(b) The Employee shall not be required to mitigate the amount of any
payment provided for in this Section 2.4 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section 2.4 be reduced by any compensation earned by the Employee as the result
of employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Employee to the Company, or otherwise.
(c) The Company will vigorously and diligently defend any contest or
dispute between the Employee or the Company and the Internal Revenue Service in
connection with any tax audit or proceeding to the extent attributable to the
application of Section 280G(b) of the Code to the payments made or to be made to
the Employee pursuant to this Section 2.4. The Company agrees to indemnify and
hold the Employee harmless from any loss or expense experienced by the Employee
as the result of the failure by the Company to fully perform its obligation
under this Section 2.4.
-3-
<PAGE> 4
2.5 Termination in the Absence of a Change in Control. The Employee
hereby acknowledges and agrees that the rights and benefits provided under this
Agreement shall be triggered to benefit the Employee only after a Change in
Control of the Company and the occurrence of a Termination Event and shall not
be triggered to benefit the Employee in the absence of a Change in Control of
the Company. This Agreement has been entered into solely to address the
legitimate concerns of the Company arising as the result of a possible Change in
Control of the Company, all as summarized in the Recitals to this Agreement. The
provisions of this Agreement are not intended to and do not purport to provide
any assurances or rights to the Employee's continued employment with the
Company.
2.6 Term of Agreement. This Agreement shall commence on the date hereof
and shall continue in effect through May 21, 2000 provided, however, that
commencing on May 22, 2000, and each May 22 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless, not
later than December 31 of the preceding year, the Company shall have given
notice that it does not wish to extend this Agreement. If a Change in Control of
the Company shall have occurred during the original or extended term of this
Agreement, this Agreement shall continue in effect for a period of 24 months
beyond the month in which such Change in Control of the Company occurred.
2.7 Payment of Termination Benefits is in Addition to Amounts Payable
under Employment Agreement. The Termination Benefits provided under this
Agreement are in addition to any other amount payable to the Employee under any
Employment Agreement with the Company. Any amount payable as Termination Benefit
shall not cause any reduction, offset or diminution of amounts payable to the
Employee under any Employment Agreement.
III
STANDARD PROVISIONS
3.1 Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Employee to Termination Benefits from the Company as provided
in this Agreement, except that, for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the date of
termination for purposes of this Agreement. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement,
by operation of law or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by
the Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees. In the event the Employee
should die while any amount would still be payable to him hereunder if the
Employee had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Employee's devisee, legatee or other designee or, if there is no such designee,
to the Employee's estate.
3.2 Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or mailed by United
States, registered or certified mail, return receipt requested, postage prepaid,
addressed to the respective parties as provided in this Section 6.3; provided
that all notice to the Company shall be directed to the attention of the Board
with a copy to the Secretary of the Company, or to such other addresses as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.
COMPANY: AMDL, Inc.
14272 Franklin Avenue, Suite 106
Tustin, California 92780-7039
Attention: Harry Berk, Chief Financial Officer
EMPLOYEE: That T. Ngo, Ph.D.
20 Sandstone
Irvine, California 92604
-4-
<PAGE> 5
3.3 Modifications, Waivers or Discharge of Agreement. No provision of
this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by the Employee and
such officer as may be specifically designated by the Board. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California. All references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state or local law. The obligations of the Company under this
Agreement shall survive the expiration of the term of this Agreement.
3.4 Validity. The invalidity or unenforceability or any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
3.5 Attorneys Fees. In the event it becomes necessary to commence any
proceeding or action to enforce the provision of this Salary Continuation
Agreement, the court before whom the same shall be tried, may award to the
prevailing party all costs and expenses thereof, including but not limited to,
reasonable attorneys' fees, the usual, customary and lawfully recoverable court
costs and all other expenses in connection therewith.
3.6 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, this Salary Continuation Agreement shall be
effective as of and on the date first written above.
COMPANY:
AMDL, INC., A DELAWARE CORPORATION
By: /s/ HARRY BERK
-------------------------------
Name: Harry Berk
Title: Chief Financial Officer
EMPLOYEE:
By: /s/ THAT T. NGO, PH.D.
------------------------------------
That T. Ngo, Ph.D.
-5-
<PAGE> 1
EXHIBIT 10.37
SALARY CONTINUATION AGREEMENT DATED MAY 21, 1998 WITH THOMAS V. TILTON.
SALARY CONTINUATION AGREEMENT
This Salary Continuation Agreement, dated as of May 21, 1998
("Agreement"), by and between AMDL, INC., a Delaware corporation (the "Company")
and THOMAS V. TILTON (the "Employee"), sets forth certain benefits to be
received by the Employee upon the occurrence of a Termination Event (as defined
in Section 2.3 below) following a Change in Control of the Company (as defined
in Section 2.2 below).
I
RECITALS
1.1 The Company considers it essential to the best interests of its
shareholders to foster the continuous employment of certain key management
personnel. In this connection, the board of directors of the Company (the
"Board") recognizes that, as is the case with many publicly held corporations,
the possibility of a Change in Control of the Company may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of certain key management
personnel, including the Employee, to the detriment of the Company and its
shareholders.
1.2 The Board has determined that the continued employment of the
Employee is essential to the best interests of the Company's shareholders and to
reinforce and encourage the Employee's continued attention and dedication to his
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control of the Company, the Company
desires to enter into this Agreement with the Employee.
II
AGREEMENT
2.1 Termination Following a Change in Control. After a Change in Control
of the Company and the occurrence of a Termination Event, the Employee shall be
entitled to Termination Benefits (as defined in Section 2.4) during the term of
this Agreement, all as provided in this Agreement.
2.2 Definition of "Change in Control". A "Change in Control" of the
Company shall be deemed to have occurred upon the occurrence of any one or more
of the following events:
(a) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other
than the Employee or a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, hereafter becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the combined voting power
of the Company's then outstanding securities;
(b) during any period (other than any period prior to the execution of
this Agreement), individuals who at the beginning of such period constitute the
Board and any new directors (other than directors designated by a person who has
entered into an agreement with the Company to effect a transaction described in
paragraph (a) or (c) of this Section 2.2) whose election by the Board or
nomination for election by the Company's shareholders was approved by a vote of
at least a majority of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or
(c) the shareholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 51% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation; or
-1-
<PAGE> 2
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
2.3 Definition of "Termination Event". A Termination Event shall be
deemed to have occurred upon the occurrence of any one or more of the following
events:
(a) Termination by the Company of Employee's employment for a reason
other than the Employee's willful and continued failure to substantially perform
the duties with the Company (other than any such failure resulting from
incapacity due to physical or mental illness or any such actual or anticipated
failure by the Employee for reasons set forth in Section 2.3(b) below) after a
written demand for substantial performance is delivered to the Employee by the
Board, which demand specifically identifies the manner in which the Board
believes that the Employee has not substantially performed his duties.
For purposes of this Section 2.3(a), no act, or failure to act, on the
part of the Employee shall be deemed "willful" unless done, or omitted to be
done, not in good faith and without reasonable belief that such action or
omission was in the best interest of the Company.
(b) The occurrence of any of the following events described in
subparagraphs (i) - (vii) of this paragraph (b), without the express written
consent of the Employee. Notwithstanding any other provision of this Agreement,
the Employee's continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting a Termination Event as
described in this Section 2.3(b).
(i) the assignment of any duties inconsistent with the Employee's
status as a Director of Operations of the Company or a substantial adverse
alteration in the nature or status of his responsibilities from those in effect
immediately prior to the Change in Control of the Company;
(ii) a reduction of the Employee's annual salary by the Company as
in effect on the date thereof or as the same may be increased from time to time
except for across-the-board salary reductions similarly affecting all senior
executives of the Company and all senior executives of any person in control of
the Company;
(iii) the relocation of the Company's principal executive offices
to a location more than fifty (50) miles from the location of such offices
immediately prior to the Change in Control of the Company or the Company's
requirement that the Employee be based anywhere other than the Company's
principal executive offices except for required travel on the Company's business
to an extent substantially consistent with the Employee's present business
travel obligations;
(iv) the failure by the Company, without the consent of the
Employee, to pay any portion of the Employee's current compensation except
pursuant to an across-the-board compensation deferral similarly affecting all
senior executives of the Company and all senior executives of any person in
control of the Company, within seven days of the date such compensation is due;
(v) the failure by the Company to continue in effect any
compensation plan in which the Employee participates immediately prior to the
Change in Control of the Company which is material to the Employee's total
compensation, including but not limited to the Company's profit sharing plan, or
any substitute plans adopted prior to the Change in Control of the Company,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure by the
Company to continue the Employee's participation therein (or in such substitute
or alternative plan) on a basis not materially less favorable, both in terms of
the amount of benefits provided and the level of the Employee's participation
relative to other participants, as existed at the time of the Change in Control
of the Company;
(vi) the failure by the Company to continue to provide the Employee
with benefits substantially similar to those currently enjoyed under any of the
Company's pension, life insurance, medical, health and accident, or disability
plans in which the Employee was participating at the time of the Change in
Control of the Company, the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits or deprive the
Employee of any material fringe benefit enjoyed by the Employee at the time of
the Change in Control of the Company, or the failure by the Company to provide
the Employee with the number of paid vacation days to which the Employee is
entitled on the basis of years of service with the Company in accordance with
the Company's normal vacation policy in effect at the time of the Change in
Control of the Company; or
-2-
<PAGE> 3
(vii) the failure of the Company to obtain a satisfactory
agreement from any successor to assume and agree to perform this Agreement, as
contemplated in Section 3.1.
(c) Except as provided in Section 3.1(a), the term "date of termination"
used in this Agreement shall mean the date on which a Termination Event is
deemed to have occurred. 2.4 Definition of "Termination Benefits"; Payment of
Termination Benefits. (a) The term "Termination Benefits" shall mean the payment
or provision of all of the following at such times as provided below:
(i) salary through the date of termination at the rate in effect at
that time, plus all other amounts to which the Employee is entitled under any
compensation plan of the Company, shall be paid at the time such payments are
due, but in any event no later than six (6) months after the date of
termination;
(ii) commencing thirty (30) days after the date of termination, the
payment in six (6) equal monthly installments of all prior unpaid or deferred
salary due Employee, which the parties acknowledge to be the amount of
$128,869.41 as of the date hereof;
(iii) a severance payment (in an amount equal to six (6) months'
salary at the rate in effect on the termination date (hereinafter, "Severance
Payment")) shall be paid in six (6) equal monthly payments after the date of
termination; provided, however, that the Severance Payment will be reduced to
the maximum amount, determined under Section 280G(b) of the Internal Revenue
Code of 1986, as amended (the "Code"), which may be paid to the Employee and not
be deemed "excess parachute payments" (as defined in Section 280G(b) of the
Code), if any;
(iv) the Company shall pay all legal fees and expenses incurred by
the Employee as a result of such termination (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by this Agreement or
in connection with any tax audit or proceeding to the extent attributable to the
application of Section 280G(b) of the Code, to any payment or benefit provided
hereunder), within five days after request for payment by the Employee
accompanied with such evidence of fees and expenses incurred as the Company
reasonably may require;
(v) the Company shall continue to provide the Employee for a period
of six (6) months after the date of termination with benefits substantially
similar to those enjoyed by the Employee under the Company's medical plan in
which the Employee was participating at the time the Change in Control of the
Company occurred; and
(vi) any and all options to purchase securities of the Company held
by the Employee on the date of termination (whether issued prior to or after the
date hereof and whether or not otherwise fully vested and immediately
exercisable by the Employee) shall be fully vested and immediately exercisable
by the Employee from and after the date of termination.
(b) The Employee shall not be required to mitigate the amount of any
payment provided for in this Section 2.4 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section 2.4 be reduced by any compensation earned by the Employee as the result
of employment by another employer, by retirement benefits, by offset against
any amount claimed to be owed by the Employee to the Company, or otherwise.
(c) The Company will vigorously and diligently defend any contest or
dispute between the Employee or the Company and the Internal Revenue Service in
connection with any tax audit or proceeding to the extent attributable to the
application of Section 280G(b) of the Code to the payments made or to be made to
the Employee pursuant to this Section 2.4. The Company agrees to indemnify and
hold the Employee harmless from any loss or expense experienced by the Employee
as the result of the failure by the Company to fully perform its obligation
under this Section 2.4.
2.5 Termination in the Absence of a Change in Control. The Employee
hereby acknowledges and agrees that the rights and benefits provided under this
Agreement shall be triggered to benefit the Employee only after a Change in
Control of the Company and the occurrence of a Termination Event and shall not
be triggered to benefit the Employee in the absence of a Change in Control of
the Company. This Agreement has been entered into solely to address the
legitimate concerns of the Company arising as the result of a possible Change in
Control of the Company, all as summarized in the Recitals to this Agreement. The
provisions of this Agreement are not intended to and do not purport to provide
any assurances or rights to the Employee's continued employment with the
Company.
-3-
<PAGE> 4
2.6 Term of Agreement. This Agreement shall commence on the date hereof
and shall continue in effect through May 21, 2000 provided, however, that
commencing on May 22, 2000, and each May 22 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless, not
later than December 31 of the preceding year, the Company shall have given
notice that it does not wish to extend this Agreement. If a Change in Control of
the Company shall have occurred during the original or extended term of this
Agreement, this Agreement shall continue in effect for a period of 24 months
beyond the month in which such Change in Control of the Company occurred.
2.7 Payment of Termination Benefits is in Addition to Amounts Payable
under Employment Agreement. The Termination Benefits provided under this
Agreement are in addition to any other amount payable to the Employee under any
Employment Agreement with the Company. Any amount payable as Termination Benefit
shall not cause any reduction, offset or diminution of amounts payable to the
Employee under any Employment Agreement.
III
STANDARD PROVISIONS
3.1 Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Employee to Termination Benefits from the Company as provided
in this Agreement, except that, for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the date of
termination for purposes of this Agreement. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement,
by operation of law or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by
the Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees. In the event the Employee
should die while any amount would still be payable to him hereunder if the
Employee had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Employee's devisee, legatee or other designee or, if there is no such designee,
to the Employee's estate.
3.2 Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or mailed by United
States, registered or certified mail, return receipt requested, postage prepaid,
addressed to the respective parties as provided in this Section 6.3; provided
that all notice to the Company shall be directed to the attention of the Board
with a copy to the Secretary of the Company, or to such other addresses as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.
COMPANY: AMDL, Inc.
14272 Franklin Avenue, Suite 106
Tustin, California 92780-7039
Attention: That T. Ngo, Ph.D., President
EMPLOYEE: Thomas V. Tilton
31782 Via Pato
Coto de Caza, California 92678
3.3 Modifications, Waivers or Discharge of Agreement. No provision of
this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by the Employee and
such officer as may be specifically designated by the Board. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or
-4-
<PAGE> 5
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of California. All references to sections of the
Exchange Act or the Code shall be deemed also to refer to any successor
provisions to such sections. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state or local law.
The obligations of the Company under this Agreement shall survive the expiration
of the term of this Agreement.
3.4 Validity. The invalidity or unenforceability or any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
3.5 Attorneys Fees. In the event it becomes necessary to commence any
proceeding or action to enforce the provision of this Salary Continuation
Agreement, the court before whom the same shall be tried, may award to the
prevailing party all costs and expenses thereof, including but not limited to,
reasonable attorneys' fees, the usual, customary and lawfully recoverable court
costs and all other expenses in connection therewith.
3.6 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, this Salary Continuation Agreement shall be
effective as of and on the date first written above.
COMPANY:
AMDL, INC., A DELAWARE CORPORATION
By: /s/ THAT T. NGO, PH.D.
-------------------------------
Name: That T. Ngo, Ph.D.
Title: President
EMPLOYEE:
By: /s/ THOMAS V. TILTON
------------------------------------
Thomas V. Tilton
-5-
<PAGE> 1
EXHIBIT 10.38
SALARY CONTINUATION AGREEMENT DATED MAY 21, 1998 WITH HARRY BERK.
SALARY CONTINUATION AGREEMENT
This Salary Continuation Agreement, dated as of May 21, 1998
("Agreement"), by and between AMDL, INC., a Delaware corporation (the "Company")
and HARRY BERK (the "Employee"), sets forth certain benefits to be received by
the Employee upon the occurrence of a Termination Event (as defined in Section
2.3 below) following a Change in Control of the Company (as defined in Section
2.2 below).
I
RECITALS
1.1 The Company considers it essential to the best interests of its
shareholders to foster the continuous employment of certain key management
personnel. In this connection, the board of directors of the Company (the
"Board") recognizes that, as is the case with many publicly held corporations,
the possibility of a Change in Control of the Company may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of certain key management
personnel, including the Employee, to the detriment of the Company and its
shareholders.
1.2 The Board has determined that the continued employment of the
Employee is essential to the best interests of the Company's shareholders and to
reinforce and encourage the Employee's continued attention and dedication to his
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control of the Company, the Company
desires to enter into this Agreement with the Employee.
II
AGREEMENT
2.1 Termination Following a Change in Control. After a Change in Control
of the Company and the occurrence of a Termination Event, the Employee shall be
entitled to Termination Benefits (as defined in Section 2.4) during the term of
this Agreement, all as provided in this Agreement.
2.2 Definition of "Change in Control". A "Change in Control" of the
Company shall be deemed to have occurred upon the occurrence of any one or more
of the following events:
(a) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other
than the Employee or a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, hereafter becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the combined voting power
of the Company's then outstanding securities;
(b) during any period (other than any period prior to the execution of
this Agreement), individuals who at the beginning of such period constitute the
Board and any new directors (other than directors designated by a person who has
entered into an agreement with the Company to effect a transaction described in
paragraph (a) or (c) of this Section 2.2) whose election by the Board or
nomination for election by the Company's shareholders was approved by a vote of
at least a majority of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or
(c) the shareholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 51% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation; or
-1-
<PAGE> 2
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
2.3 Definition of "Termination Event". A Termination Event shall be
deemed to have occurred upon the occurrence of any one or more of the following
events:
(a) Termination by the Company of Employee's employment for a reason
other than the Employee's willful and continued failure to substantially perform
the duties with the Company (other than any such failure resulting from
incapacity due to physical or mental illness or any such actual or anticipated
failure by the Employee for reasons set forth in Section 2.3(b) below) after a
written demand for substantial performance is delivered to the Employee by the
Board, which demand specifically identifies the manner in which the Board
believes that the Employee has not substantially performed his duties.
For purposes of this Section 2.3(a), no act, or failure to act, on the
part of the Employee shall be deemed "willful" unless done, or omitted to be
done, not in good faith and without reasonable belief that such action or
omission was in the best interest of the Company.
(b) The occurrence of any of the following events described in
subparagraphs (i) - (vii) of this paragraph (b), without the express written
consent of the Employee. Notwithstanding any other provision of this Agreement,
the Employee's continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting a Termination Event as
described in this Section 2.3(b).
(i) the assignment of any duties inconsistent with the Employee's
status as a Chief Financial Officer of the Company or a substantial adverse
alteration in the nature or status of his responsibilities from those in effect
immediately prior to the Change in Control of the Company;
(ii) a reduction of the Employee's annual salary by the Company as
in effect on the date thereof or as the same may be increased from time to time
except for across-the-board salary reductions similarly affecting all senior
executives of the Company and all senior executives of any person in control of
the Company;
(iii) the relocation of the Company's principal executive offices to
a location more than fifty (50) miles from the location of such offices
immediately prior to the Change in Control of the Company or the Company's
requirement that the Employee be based anywhere other than the Company's
principal executive offices except for required travel on the Company's business
to an extent substantially consistent with the Employee's present business
travel obligations;
(iv) the failure by the Company, without the consent of the
Employee, to pay any portion of the Employee's current compensation except
pursuant to an across-the-board compensation deferral similarly affecting all
senior executives of the Company and all senior executives of any person in
control of the Company, within seven days of the date such compensation is due;
(v) the failure by the Company to continue in effect any
compensation plan in which the Employee participates immediately prior to the
Change in Control of the Company which is material to the Employee's total
compensation, including but not limited to the Company's profit sharing plan, or
any substitute plans adopted prior to the Change in Control of the Company,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure by the
Company to continue the Employee's participation therein (or in such substitute
or alternative plan) on a basis not materially less favorable, both in terms of
the amount of benefits provided and the level of the Employee's participation
relative to other participants, as existed at the time of the Change in Control
of the Company;
(vi) the failure by the Company to continue to provide the Employee
with benefits substantially similar to those currently enjoyed under any of the
Company's pension, life insurance, medical, health and accident, or disability
plans in which the Employee was participating at the time of the Change in
Control of the Company, the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits or deprive the
Employee of any material fringe benefit enjoyed by the Employee at the time of
the Change in Control of the Company, or the failure by the Company to provide
the Employee with the number of paid
-2-
<PAGE> 3
vacation days to which the Employee is entitled on the basis of years of service
with the Company in accordance with the Company's normal vacation policy in
effect at the time of the Change in Control of the Company; or
(vii) the failure of the Company to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Section 3.1.
(c) Except as provided in Section 3.1(a), the term "date of termination"
used in this Agreement shall mean the date on which a Termination Event is
deemed to have occurred.
2.4 Definition of "Termination Benefits"; Payment of Termination
Benefits. (a) The term "Termination Benefits" shall mean the payment or
provision of all of the following at such times as provided below:
(i) salary through the date of termination at the rate in effect at
that time, plus all other amounts to which the Employee is entitled under any
compensation plan of the Company, shall be paid at the time such payments are
due, but in any event no later than six (6) months after the date of
termination;
(ii) commencing thirty (30) days after the date of termination, the
payment in six (6) equal monthly installments of all prior unpaid or deferred
salary due Employee, which the parties acknowledge to be the amount of
$84,749.36 as of the date hereof;
(iii) a severance payment (in an amount equal to six (6) months'
salary at the rate in effect on the termination date (hereinafter, "Severance
Payment")) shall be paid in six (6) equal monthly payments after the date of
termination; provided, however, that the Severance Payment will be reduced to
the maximum amount, determined under Section 280G(b) of the Internal Revenue
Code of 1986, as amended (the "Code"), which may be paid to the Employee and not
be deemed "excess parachute payments" (as defined in Section 280G(b) of the
Code), if any;
(iv) the Company shall pay all legal fees and expenses incurred by
the Employee as a result of such termination (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by this Agreement or
in connection with any tax audit or proceeding to the extent attributable to the
application of Section 280G(b) of the Code, to any payment or benefit provided
hereunder), within five days after request for payment by the Employee
accompanied with such evidence of fees and expenses incurred as the Company
reasonably may require;
(v) the Company shall continue to provide the Employee for a period
of six (6) months after the date of termination with benefits substantially
similar to those enjoyed by the Employee under the Company's medical plan in
which the Employee was participating at the time the Change in Control of the
Company occurred; and
(vi) any and all options to purchase securities of the Company held
by the Employee on the date of termination (whether issued prior to or after the
date hereof and whether or not otherwise fully vested and immediately
exercisable by the Employee) shall be fully vested and immediately exercisable
by the Employee from and after the date of termination.
(b) The Employee shall not be required to mitigate the amount of any
payment provided for in this Section 2.4 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section 2.4 be reduced by any compensation earned by the Employee as the result
of employment by another employer, by retirement benefits, by offset against
any amount claimed to be owed by the Employee to the Company, or otherwise.
(c) The Company will vigorously and diligently defend any contest or
dispute between the Employee or the Company and the Internal Revenue Service in
connection with any tax audit or proceeding to the extent attributable to the
application of Section 280G(b) of the Code to the payments made or to be made to
the Employee pursuant to this Section 2.4. The Company agrees to indemnify and
hold the Employee harmless from any loss or expense experienced by the Employee
as the result of the failure by the Company to fully perform its obligation
under this Section 2.4.
2.5 Termination in the Absence of a Change in Control. The Employee
hereby acknowledges and agrees that the rights and benefits provided under this
Agreement shall be triggered to benefit the Employee only after a Change in
Control of the Company and the occurrence of a Termination Event and shall not
be triggered to benefit the Employee in the absence of a Change in Control of
the Company. This Agreement has been entered into solely to address the
legitimate concerns of the Company arising as the result of a possible Change
-3-
<PAGE> 4
in Control of the Company, all as summarized in the Recitals to this Agreement.
The provisions of this Agreement are not intended to and do not purport to
provide any assurances or rights to the Employee's continued employment with the
Company.
2.6 Term of Agreement. This Agreement shall commence on the date hereof
and shall continue in effect through May 21, 2000 provided, however, that
commencing on May 22, 2000, and each May 22 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless, not
later than December 31 of the preceding year, the Company shall have given
notice that it does not wish to extend this Agreement. If a Change in Control of
the Company shall have occurred during the original or extended term of this
Agreement, this Agreement shall continue in effect for a period of 24 months
beyond the month in which such Change in Control of the Company occurred.
2.7 Payment of Termination Benefits is in Addition to Amounts Payable
under Employment Agreement. The Termination Benefits provided under this
Agreement are in addition to any other amount payable to the Employee under any
Employment Agreement with the Company. Any amount payable as Termination Benefit
shall not cause any reduction, offset or diminution of amounts payable to the
Employee under any Employment Agreement.
III
STANDARD PROVISIONS
3.1 Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Employee to Termination Benefits from the Company as provided
in this Agreement, except that, for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the date of
termination for purposes of this Agreement. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement,
by operation of law or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by
the Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees. In the event the Employee
should die while any amount would still be payable to him hereunder if the
Employee had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Employee's devisee, legatee or other designee or, if there is no such designee,
to the Employee's estate.
3.2 Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or mailed by United
States, registered or certified mail, return receipt requested, postage prepaid,
addressed to the respective parties as provided in this Section 6.3; provided
that all notice to the Company shall be directed to the attention of the Board
with a copy to the Secretary of the Company, or to such other addresses as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.
COMPANY: AMDL, Inc.
14272 Franklin Avenue, Suite 106
Tustin, California 92780-7039
Attention: That T. Ngo, Ph.D., President
EMPLOYEE: Harry Berk
P.O. Box 921527
Sylmar, California 91392
-4-
<PAGE> 5
3.3 Modifications, Waivers or Discharge of Agreement. No provision of
this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by the Employee and
such officer as may be specifically designated by the Board. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California. All references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state or local law. The obligations of the Company under this
Agreement shall survive the expiration of the term of this Agreement.
3.4 Validity. The invalidity or unenforceability or any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
3.5 Attorneys Fees. In the event it becomes necessary to commence any
proceeding or action to enforce the provision of this Salary Continuation
Agreement, the court before whom the same shall be tried, may award to the
prevailing party all costs and expenses thereof, including but not limited to,
reasonable attorneys' fees, the usual, customary and lawfully recoverable court
costs and all other expenses in connection therewith.
3.6 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, this Salary Continuation Agreement shall be
effective as of and on the date first written above.
COMPANY:
AMDL, INC., A DELAWARE CORPORATION
By: /s/ THAT T. NGO, PH.D.
------------------------------
Name: That T. Ngo, Ph.D.
Title: President
EMPLOYEE:
By: /s/ HARRY BERK
------------------------------------
Harry Berk
-5-
<PAGE> 1
EXHIBIT 10.39
SALARY CONTINUATION AGREEMENT DATED MAY 21, 1998 WITH GARY L. DREHER
SALARY CONTINUATION AGREEMENT
This Salary Continuation Agreement, dated as of May 21, 1998
("Agreement"), by and between AMDL, INC., a Delaware corporation (the "Company")
and GARY L. DREHER (the "Employee"), sets forth certain benefits to be received
by the Employee upon the occurrence of a Termination Event (as defined in
Section 2.3 below) following a Change in Control of the Company (as defined in
Section 2.2 below).
I
RECITALS
1.1 The Company considers it essential to the best interests of its
shareholders to foster the continuous employment of certain key management
personnel. In this connection, the board of directors of the Company (the
"Board") recognizes that, as is the case with many publicly held corporations,
the possibility of a Change in Control of the Company may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of certain key management
personnel, including the Employee, to the detriment of the Company and its
shareholders.
1.2 The Board has determined that the continued employment of the
Employee is essential to the best interests of the Company's shareholders and to
reinforce and encourage the Employee's continued attention and dedication to his
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control of the Company, the Company
desires to enter into this Agreement with the Employee.
II
AGREEMENT
2.1 Termination Following a Change in Control. After a Change in Control
of the Company and the occurrence of a Termination Event, the Employee shall be
entitled to Termination Benefits (as defined in Section 2.4) during the term of
this Agreement, all as provided in this Agreement.
2.2 Definition of "Change in Control". A "Change in Control" of the
Company shall be deemed to have occurred upon the occurrence of any one or more
of the following events:
(a) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other
than the Employee or a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, hereafter becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the combined voting power
of the Company's then outstanding securities;
(b) during any period (other than any period prior to the execution of
this Agreement), individuals who at the beginning of such period constitute the
Board and any new directors (other than directors designated by a person who has
entered into an agreement with the Company to effect a transaction described in
paragraph (a) or (c) of this Section 2.2) whose election by the Board or
nomination for election by the Company's shareholders was approved by a vote of
at least a majority of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or
(c) the shareholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 51% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation; or
-1-
<PAGE> 2
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
2.3 Definition of "Termination Event". A Termination Event shall be
deemed to have occurred upon the occurrence of any one or more of the following
events:
(a) Termination by the Company of Employee's employment for a reason
other than the Employee's willful and continued failure to substantially perform
the duties with the Company (other than any such failure resulting from
incapacity due to physical or mental illness or any such actual or anticipated
failure by the Employee for reasons set forth in Section 2.3(b) below) after a
written demand for substantial performance is delivered to the Employee by the
Board, which demand specifically identifies the manner in which the Board
believes that the Employee has not substantially performed his duties.
For purposes of this Section 2.3(a), no act, or failure to act, on the
part of the Employee shall be deemed "willful" unless done, or omitted to be
done, not in good faith and without reasonable belief that such action or
omission was in the best interest of the Company.
(b) The occurrence of any of the following events described in
subparagraphs (i) - (vii) of this paragraph (b), without the express written
consent of the Employee. Notwithstanding any other provision of this Agreement,
the Employee's continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting a Termination Event as
described in this Section 2.3(b).
(i) the assignment of any duties inconsistent with the Employee's
status as a Vice President, Sales and Marketing of the Company or a substantial
adverse alteration in the nature or status of his responsibilities from those in
effect immediately prior to the Change in Control of the Company;
(ii) a reduction of the Employee's annual salary by the Company as
in effect on the date thereof or as the same may be increased from time to time
except for across-the-board salary reductions similarly affecting all senior
executives of the Company and all senior executives of any person in control of
the Company;
(iii) the relocation of the Company's principal executive offices to
a location more than fifty (50) miles from the location of such offices
immediately prior to the Change in Control of the Company or the Company's
requirement that the Employee be based anywhere other than the Company's
principal executive offices except for required travel on the Company's business
to an extent substantially consistent with the Employee's present business
travel obligations;
(iv) the failure by the Company, without the consent of the
Employee, to pay any portion of the Employee's current compensation except
pursuant to an across-the-board compensation deferral similarly affecting all
senior executives of the Company and all senior executives of any person in
control of the Company, within seven days of the date such compensation is due;
(v) the failure by the Company to continue in effect any
compensation plan in which the Employee participates immediately prior to the
Change in Control of the Company which is material to the Employee's total
compensation, including but not limited to the Company's profit sharing plan, or
any substitute plans adopted prior to the Change in Control of the Company,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure by the
Company to continue the Employee's participation therein (or in such substitute
or alternative plan) on a basis not materially less favorable, both in terms of
the amount of benefits provided and the level of the Employee's participation
relative to other participants, as existed at the time of the Change in Control
of the Company;
(vi) the failure by the Company to continue to provide the Employee
with benefits substantially similar to those currently enjoyed under any of the
Company's pension, life insurance, medical, health and accident, or disability
plans in which the Employee was participating at the time of the Change in
Control of the Company, the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits or deprive the
Employee of any material fringe benefit enjoyed by the Employee at the time of
the Change in Control of the Company, or the failure by the Company to provide
the Employee with the number of paid vacation days to which the Employee is
entitled on the basis of years of service with the Company in accordance with
the Company's normal vacation policy in effect at the time of the Change in
Control of the Company; or
-2-
<PAGE> 3
(vii) the failure of the Company to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Section 3.1.
(c) Except as provided in Section 3.1(a), the term "date of termination"
used in this Agreement shall mean the date on which a Termination Event is
deemed to have occurred. 2.4 Definition of "Termination Benefits"; Payment of
Termination Benefits. (a) The term "Termination Benefits" shall mean the payment
or provision of all of the following at such times as provided below:
(i) salary through the date of termination at the rate in effect at
that time, plus all other amounts to which the Employee is entitled under any
compensation plan of the Company, shall be paid at the time such payments are
due, but in any event no later than six (6) months after the date of
termination;
(ii) sales commission for twelve (12) months after the date of
termination based on the formula provided in that certain Employment Agreement
dated January 15, 1998, by and between the Company and the Employee; provided
that such sales commission shall be calculated solely on the basis of net sales
receipts attributable to the business of the Company immediately prior to the
occurrence of Change of Control so as to result in the payment of sales
commission contemplated under the aforesaid Employment Agreement;
(iii) a severance payment (in an amount equal to twelve (12) months'
salary at the rate in effect on the termination date (hereinafter, "Severance
Payment")) shall be paid in twelve (12) equal monthly payments after the date of
termination; provided, however, that the Severance Payment will be reduced to
the maximum amount, determined under Section 280G(b) of the Internal Revenue
Code of 1986, as amended (the "Code"), which may be paid to the Employee and not
be deemed "excess parachute payments" (as defined in Section 280G(b) of the
Code), if any;
(iv) the Company shall pay all legal fees and expenses incurred by
the Employee as a result of such termination (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by this Agreement or
in connection with any tax audit or proceeding to the extent attributable to the
application of Section 280G(b) of the Code, to any payment or benefit provided
hereunder), within five days after request for payment by the Employee
accompanied with such evidence of fees and expenses incurred as the Company
reasonably may require; and
(v) any and all options to purchase securities of the Company held
by Employee on the date of termination (whether issued prior to or after the
date hereof and whether or not fully vested and immediately excercisable) shall
be fully vested and immediately exercisable by the Employee from and after the
date of termination.
(b) The Employee shall not be required to mitigate the amount of any
payment provided for in this Section 2.4 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section 2.4 be reduced by any compensation earned by the Employee as the result
of employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Employee to the Company, or otherwise.
(c) The Company will vigorously and diligently defend any contest or
dispute between the Employee or the Company and the Internal Revenue Service in
connection with any tax audit or proceeding to the extent attributable to the
application of Section 280G(b) of the Code to the payments made or to be made to
the Employee pursuant to this Section 2.4. The Company agrees to indemnify and
hold the Employee harmless from any loss or expense experienced by the Employee
as the result of the failure by the Company to fully perform its obligation
under this Section 2.4.
2.5 Termination in the Absence of a Change in Control. The Employee
hereby acknowledges and agrees that the rights and benefits provided under this
Agreement shall be triggered to benefit the Employee only after a Change in
Control of the Company and the occurrence of a Termination Event and shall not
be triggered to benefit the Employee in the absence of a Change in Control of
the Company. This Agreement has been entered into solely to address the
legitimate concerns of the Company arising as the result of a possible Change in
Control of the Company, all as summarized in the Recitals to this Agreement. The
provisions of this Agreement are not intended to and do not purport to provide
any assurances or rights to the Employee's continued employment with the
Company.
-3-
<PAGE> 4
2.6 Term of Agreement. This Agreement shall commence on the date hereof
and shall continue in effect through May 21, 2000 provided, however, that
commencing on May 22, 2000, and each May 22 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless, not
later than December 31 of the preceding year, the Company shall have given
notice that it does not wish to extend this Agreement. If a Change in Control of
the Company shall have occurred during the original or extended term of this
Agreement, this Agreement shall continue in effect for a period of 24 months
beyond the month in which such Change in Control of the Company occurred.
2.7 Payment of Termination Benefits is in Addition to Amounts Payable
under Employment Agreement. The Termination Benefits provided under this
Agreement are in addition to any other amount payable to the Employee under any
Employment Agreement with the Company. Any amount payable as Termination Benefit
shall not cause any reduction, offset or diminution of amounts payable to the
Employee under any Employment Agreement.
III
STANDARD PROVISIONS
3.1 Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Employee to Termination Benefits from the Company as provided
in this Agreement, except that, for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the date of
termination for purposes of this Agreement. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement,
by operation of law or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by
the Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees. In the event the Employee
should die while any amount would still be payable to him hereunder if the
Employee had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Employee's devisee, legatee or other designee or, if there is no such designee,
to the Employee's estate.
3.2 Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or mailed by United
States, registered or certified mail, return receipt requested, postage prepaid,
addressed to the respective parties as provided in this Section 6.3; provided
that all notice to the Company shall be directed to the attention of the Board
with a copy to the Secretary of the Company, or to such other addresses as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.
COMPANY: AMDL, Inc.
14272 Franklin Avenue, Suite 106
Tustin, California 92780-7039
Attention: That T. Ngo, Ph.D., President
EMPLOYEE: Gary L. Dreher
6301 Acacia Hill Drive
Yorba Linda, California 92886
3.3 Modifications, Waivers or Discharge of Agreement. No provision of
this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by the Employee and
such officer as may be specifically designated by the Board. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The
-4-
<PAGE> 5
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of California. All references to sections
of the Exchange Act or the Code shall be deemed also to refer to any successor
provisions to such sections. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state or local law.
The obligations of the Company under this Agreement shall survive the expiration
of the term of this Agreement.
3.4 Validity. The invalidity or unenforceability or any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
3.5 Attorneys Fees. In the event it becomes necessary to commence any
proceeding or action to enforce the provision of this Salary Continuation
Agreement, the court before whom the same shall be tried, may award to the
prevailing party all costs and expenses thereof, including but not limited to,
reasonable attorneys' fees, the usual, customary and lawfully recoverable court
costs and all other expenses in connection therewith.
3.6 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, this Salary Continuation Agreement shall be
effective as of and on the date first written above.
COMPANY:
AMDL, INC., A DELAWARE CORPORATION
By: /s/ THAT T. NGO, PH.D.
------------------------------
Name: That T. Ngo, Ph.D.
Title: President
EMPLOYEE:
By: /s/ GARY L. DREHER
------------------------------------
Gary L. Dreher
-5-
<PAGE> 1
EXHIBIT 10.40
AGREEMENT DATED MAY 21, 1998 WITH WILLIAM M. THOMPSON, M.D.
AGREEMENT
This Agreement, dated as of May 21, 1998 ("Agreement"), by and between
AMDL, INC., a Delaware corporation (the "Company") and WILLIAM M. THOMPSON, M.D.
(the "Director"), sets forth certain benefits to be received by the Director
upon the occurrence of a Termination Event (as defined in Section 2.3 below)
following a Change in Control of the Company (as defined in Section 2.2 below).
I
RECITALS
1.1 The Company considers it essential to the best interests of its
shareholders to foster the continuous employment of certain key management
personnel. In this connection, the board of directors of the Company (the
"Board") recognizes that, as is the case with many publicly held corporations,
the possibility of a Change in Control of the Company may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of certain key management
personnel, including the Director, to the detriment of the Company and its
shareholders.
1.2 The Board has determined that to reinforce and encourage the
Director's continued attention and dedication to his duties without distraction
in the face of potentially disturbing circumstances arising from the possibility
of a Change in Control of the Company, the Company desires to enter into this
Agreement with the Director.
II
AGREEMENT
2.1 Termination Following a Change in Control. After a Change in Control
of the Company and the occurrence of a Termination Event, the Director shall be
entitled to Termination Benefits (as defined in Section 2.4) during the term of
this Agreement, all as provided in this Agreement.
2.2 Definition of "Change in Control". A "Change in Control" of the
Company shall be deemed to have occurred upon the occurrence of any one or more
of the following events:
(a) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other
than the Director or a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, hereafter becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the combined voting power
of the Company's then outstanding securities;
(b) during any period (other than any period prior to the execution of
this Agreement), individuals who at the beginning of such period constitute the
Board and any new directors (other than directors designated by a person who has
entered into an agreement with the Company to effect a transaction described in
paragraph (a) or (c) of this Section 2.2) whose election by the Board or
nomination for election by the Company's shareholders was approved by a vote of
at least a majority of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or
(c) the shareholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 51% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation; or
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
-1-
<PAGE> 2
2.3 Definition of "Termination Event". A Termination Event shall be
deemed to have occurred upon the failure to re-elect the Director or the failure
of the Board to nominate the Director for re-election at a meeting of
stockholders (whether at a held meeting or by written consent) after a Change in
Control.
2.4 Definition of "Termination Benefits"; Payment of Termination
Benefits. The term Termination Benefits" shall mean the payment in six (6) equal
monthly installments commencing thirty (30) days after a Termination Event of
all prior unpaid or deferred salary due Director, which the parties acknowledge
to be the amount of $227,250 as of the date hereof;
2.5 Termination in the Absence of a Change in Control. The Director
hereby acknowledges and agrees that the rights and benefits provided under this
Agreement shall be triggered to benefit the Director only after a Change in
Control of the Company and the occurrence of a Termination Event and shall not
be triggered to benefit the Director in the absence of a Change in Control of
the Company. This Agreement has been entered into solely to address the
legitimate concerns of the Company arising as the result of a possible Change in
Control of the Company, all as summarized in the Recitals to this Agreement. The
provisions of this Agreement are not intended to and do not purport to provide
any assurances or rights to the Director's continued employment with the
Company.
2.6 Term of Agreement. This Agreement shall commence on the date hereof
and shall continue in effect through May 21, 2000 provided, however, that
commencing on May 22, 2000, and each May 22 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless, not
later than December 31 of the preceding year, the Company shall have given
notice that it does not wish to extend this Agreement. If a Change in Control of
the Company shall have occurred during the original or extended term of this
Agreement, this Agreement shall continue in effect for a period of 24 months
beyond the month in which such Change in Control of the Company occurred.
III
STANDARD PROVISIONS
3.1 Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Director to Termination Benefits from the Company as provided
in this Agreement, except that, for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the date of
termination for purposes of this Agreement. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement,
by operation of law or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by
the Director's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees. In the event the Director
should die while any amount would still be payable to him hereunder if the
Director had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Director's devisee, legatee or other designee or, if there is no such designee,
to the Director's estate.
3.2 Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or mailed by United
States, registered or certified mail, return receipt requested, postage prepaid,
addressed to the respective parties as provided in this Section 6.3; provided
that all notice to the Company shall be directed to the attention of the Board
with a copy to the Secretary of the Company, or to such other addresses as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.
-2-
<PAGE> 3
COMPANY: AMDL, Inc.
14272 Franklin Avenue, Suite 106
Tustin, California 92780-7039
Attention: That T. Ngo, Ph.D., President
EMPLOYEE: William M. Thompson, M.D.
16342 Niantic Circle
Huntington Beach, CA 92649
3.3 Modifications, Waivers or Discharge of Agreement. No provision of
this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by the Director and
such officer as may be specifically designated by the Board. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California. All references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state or local law. The obligations of the Company under this
Agreement shall survive the expiration of the term of this Agreement.
3.4 Validity. The invalidity or unenforceability or any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
3.5 Attorneys Fees. In the event it becomes necessary to commence any
proceeding or action to enforce the provision of this Salary Continuation
Agreement, the court before whom the same shall be tried, may award to the
prevailing party all costs and expenses thereof, including but not limited to,
reasonable attorneys' fees, the usual, customary and lawfully recoverable court
costs and all other expenses in connection therewith.
3.6 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, this Salary Continuation Agreement shall be
effective as of and on the date first written above.
COMPANY:
AMDL, INC., A DELAWARE CORPORATION
By: /s/ THAT T. NGO, PH.D.
------------------------------
Name: That T. Ngo, Ph.D.
Title: President
EMPLOYEE:
By: /s/ WILLIAM M. THOMPSON, M.D.
------------------------------------
William M. Thompson, M.D.
-3-
<PAGE> 1
EXHIBIT 10.41
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT DATED JULY 1, 1998
WITH THAT T. NGO, PH.D.
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
This AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this "Amendment"), is
entered into as of July 1, 1998, by and between AMDL, Inc. (the "Company") and
That T. Ngo, Ph.D. ("Employee"), to amend that certain Employment Agreement,
executed as of October 1, 1996 ("1996 Agreement" and together with this
Amendment, the "Agreement"), between the aforesaid parties.
R E C I T A L S
WHEREAS, pursuant to Section 4(a) of the 1996 Agreement, the Employee is
entitled to a base salary of $18,500 per month ("Base Salary"); and
WHEREAS, the Company and the Employee desire to amend Section 4(a) of
the 1996 Agreement so as to defer one-half (1/2) of the Base Salary to be paid
from a portion of equity funding proceeds;
A G R E E M E N T
1. Section 4, paragraph (a) of the 1996 Agreement is hereby amended to
read as follows:
(a) Base Compensation. During the term of this Agreement, the
Company agrees to pay Employee a base salary at the rate of $18,500 per
month ("Base Salary"). One-half (1/2) of such Base Salary, in the amount
of $9,250.00, shall be payable in accordance with the Company's
practices from time to time. The payment of the remaining one-half (1/2)
of the Base Salary, in the amount of $9,250.00, shall be deferred
commencing on July 15, 1998, accruing interest at the rate of 8.50% per
annum until the payment of such deferred Base Salary ("Deferred
Salary").
The Company agrees to pay Deferred Salary from ten percent (10%)
of equity funding proceeds received in excess of $500,000.00 ("Available
Equity Proceeds"). As of the date of this Amendment, the Company will
agree to pay certain other deferred salary from Available Equity
Proceeds. Accordingly, in the event that Available Equity Proceeds are
insufficient to pay all of the outstanding deferred salary, Employee
shall receive a pro rated amount of Deferred Salary consisting such
amount as the Available Equity Proceeds compares to the total deferred
salary intended to be paid from Available Equity Proceeds.
2. Other than as specifically provided in this Amendment, all other
provisions of the 1996 Agreement shall remain effective.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
"COMPANY"
AMDL, INC.,
a Delaware corporation
By: /s/ HARRY BERK
-----------------------------------
Harry Berk, Chief Financial Officer
EMPLOYEE:
By: /s/ THAT T. NGO, PH.D.
---------------------------------------
That T. Ngo, Ph.D.
-1-
<PAGE> 1
EXHIBIT 10.42
AGREEMENT RELATING TO SALARY DEFERRAL DATED JULY 1, 1998
WITH THOMAS V. TILTON
AGREEMENT RELATING TO SALARY DEFERRAL
This AGREEMENT RELATING TO SALARY DEFERRAL (this "Agreement"), is
entered into as of July 1, 1998, by and between AMDL, Inc. (the "Company") and
Thomas V. Tilton ("Employee").
R E C I T A L S
WHEREAS, the Employee is entitled to a base salary of $6,667.00 per
month ("Base Salary"); and
WHEREAS, the Company and the Employee desire to defer $3,333.33 of the
Base Salary to be paid from a portion of equity funding proceeds;
A G R E E M E N T
1. Amount and Payment of Base Salary. The Company and Employee hereby
agree that the Employee is currently receiving a monthly salary of $6,667.00
("Base Salary"). The amount of $3,333.67 shall be paid to Employee in accordance
with the Company's practices each month. The payment of the remaining $3,333.33
of Base Salary shall be deferred commencing on July 15, 1998, accruing interest
at the rate of 8.50% per annum until the payment of such deferred Base Salary
("Deferred Salary").
The Company agrees to pay Deferred Salary from ten percent (10%) of
equity funding proceeds received in excess of $500,000.00 ("Available Equity
Proceeds"). As of the date of this Agreement, the Company will agree to pay
certain other deferred salary from Available Equity Proceeds. Accordingly, in
the event that Available Equity Proceeds are insufficient to pay all of the
outstanding deferred salary, Employee shall receive a pro rated amount of
Deferred Salary consisting such amount as the Available Equity Proceeds compares
to the total deferred salary intended to be paid from Available Equity Proceeds.
The provisions relating to the amount and payment of Base Salary
provided in this Section shall remain unchanged until such time as when the
parties to this Agreement shall have entered into another agreement.
2. Amendment. This Agreement may be amended at any time by the written
agreement of the Company and the Employee.
3. Severability. In the event that any provision of this Agreement shall
be held invalid or unenforceable, such provision shall be severable from, and
such invalidity or unenforceability shall not be construed to have any effect
on, the remaining provisions of this Agreement.
4. Further Acts. Each party agrees to perform any further acts and
execute and deliver any documents which may be necessary to carry out the
provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
"COMPANY"
AMDL, INC.,
a Delaware corporation
By: /s/ THAT T. NGO, PH.D.
-------------------------------
That T. Ngo, Ph.D., President
"EMPLOYEE"
By: /s/ THOMAS V. TILTON
----------------------------------
Thomas V. Tilton
-1-
<PAGE> 1
EXHIBIT 10.43
AGREEMENT RELATING TO SALARY DEFERRAL DATED JULY 1, 1998
WITH HARRY BERK
AGREEMENT RELATING TO SALARY DEFERRAL
This AGREEMENT RELATING TO SALARY DEFERRAL ("Agreement"), is entered
into as of July 1, 1998, by and between AMDL, Inc. (the "Company") and Harry
Berk ("Employee").
R E C I T A L S
WHEREAS, the Employee is entitled to a base salary of $6,667.00 per
month ("Base Salary"); and
WHEREAS, the Company and the Employee desire to defer $3,333.33 of the
Base Salary to be paid from a portion of equity funding proceeds;
A G R E E M E N T
1. Amount and Payment of Base Salary. The Company and Employee hereby
agree that the Employee is currently receiving a monthly salary of $6,667.00
("Base Salary"). The amount of $3,333.67 shall be paid to Employee in accordance
with the Company's practices each month. The payment of the remaining $3,333.33
of Base Salary shall be deferred commencing on July 15, 1998, accruing interest
at the rate of 8.50% per annum until the payment of such deferred Base Salary
("Deferred Salary").
The Company agrees to pay Deferred Salary from ten percent (10%) of
equity funding proceeds received in excess of $500,000.00 ("Available Equity
Proceeds"). As of the date of this Amendment, the Company will agree to pay
certain other deferred salary from Available Equity Proceeds. Accordingly, in
the event that Available Equity Proceeds are insufficient to pay all of the
outstanding deferred salary, Employee shall receive a pro rated amount of
Deferred Salary consisting such amount as the Available Equity Proceeds as
compared to the total deferred salary intended to be paid from Available Equity
Proceeds.
The provisions relating to the amount and payment of Base Salary
provided in this Section shall remain unchanged until such time as when the
parties to this Agreement shall have entered into another agreement.
2. Amendment. This Agreement may be amended at any time by the written
agreement of the Company and the Employee.
3. Severability. In the event that any provision of this Agreement shall
be held invalid or unenforceable, such provision shall be severable from, and
such invalidity or unenforceability shall not be construed to have any effect
on, the remaining provisions of this Agreement.
4. Further Acts. Each party agrees to perform any further acts and
execute and deliver any documents which may be necessary to carry out the
provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
"COMPANY"
AMDL, INC.,
a Delaware corporation
By: /s/ THAT T. NGO, PH.D.
---------------------------------------
That T. Ngo, Ph.D.
EMPLOYEE:
By: /s/ HARRY BERK
---------------------------------------
Harry Berk, Chief Financial Officer
-1-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 568,854
<SECURITIES> 0
<RECEIVABLES> 13,007
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 581,861
<PP&E> 7,863
<DEPRECIATION> 0
<TOTAL-ASSETS> 589,724
<CURRENT-LIABILITIES> 811,318
<BONDS> 0
0
0
<COMMON> 33,755
<OTHER-SE> (255,349)
<TOTAL-LIABILITY-AND-EQUITY> 589,724
<SALES> 97,531
<TOTAL-REVENUES> 97,531
<CGS> 79,832
<TOTAL-COSTS> 79,832
<OTHER-EXPENSES> 931,425
<LOSS-PROVISION> 913,425
<INTEREST-EXPENSE> (18,238)
<INCOME-PRETAX> (895,187)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (895,187)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
