CEO Employment Agreement - William L. Lagamba

Exhibit 10.1


EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT, dated effective as of April 1, 2003 (the " Agreement"), is by and between DrugMax, Inc., a Nevada corporation (the " Company"), and William L. LaGamba (the " Employee").

WHEREAS, the Company is a full-line, wholesale distributor of pharmaceuticals, over-the-counter products, health and beauty care aids, and nutritional supplements;


WHEREAS, the Company wishes to assure itself of the services of Employee for the period provided in this Agreement and Employee is willing to serve in the employ of the Company for such period upon the terms and conditions hereinafter set forth.

NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties, intending to be legally bound, hereby agree as follows:


1. EMPLOYMENT . The Company hereby agrees to employ Employee upon the terms and conditions herein contained, and Employee hereby accepts such employment for the term described below. Employee agrees to serve as the President and Chief Operating Officer of the Company during the term of this Agreement and shall report to (title). In such capacity, Employee shall have such powers and responsibilities consistent with Employee's position as the President and Chief Operating Officer may assign to Employee. Throughout the term of this Agreement, Employee shall devote Employee's best efforts and substantially all of Employee's business time and services to the business and affairs of the Company.

2. TERM OF AGREEMENT . The three (3) year initial term of the employment under this Agreement shall commence as of the date set forth above (the " Effective Date"). After the expiration of such initial three-year period, the term of Employee's employment hereunder shall automatically be extended without further action by the parties for successive one (1) year renewal terms, provided that if either party gives the other party at least thirty (30) days advance written notice prior to the expiration of the then current term of such party's intention to not renew this Agreement for an additional term, the Agreement shall terminate upon the expiration of the current term.

3. SALARY AND BONUS

a. Employee shall receive an annual base salary during the term of this Agreement of $175,000, payable in installments consistent with the Company's normal payroll schedule; provided that the annual base salary shall be subject to periodic review and adjustment by the Compensation Committee and/or the Board of Directors of the Company in its discretion.

b. Employee shall also be eligible to participate in any executive bonus plan created by the Board of Directors in the same manner and to the same extent as the other executives of the Company in the discretion of the Board of Directors.

4. WELFARE AND FRINGE BENEFITS.

a. Life Insurance . The Company shall pay a maximum of $1,000 per year towards a redeemable life insurance policy on the life of Employee, the proceeds of which shall be payable to Employee's family.


b. Automobile and Other Allowances . During the term hereof, the Company shall also provide Employee with an automobile allowance of up to $750.00 per month and a club allowance of up $ 300.00 per month and also shall pay the dues on behalf of Employee for one airline club membership per year.


c. Expenses . The Company shall reimburse Employee for all reasonable expenses he incurs in promoting the Company's business, including expenses for travel, entertainment of business associates, service and usage charges for business use of cellular phones and similar items, upon presentation by Employee from time to time of an itemized account of such expenditures in a form acceptable to the Company.

d. Vacation . Employee shall be entitled to an annual vacation of not less than four weeks, during which time his compensation shall be paid in full.

e. General . Employee shall be eligible to participate in such welfare benefit plans, programs, practices and policies of the Company as are generally applicable to other employees. Without limiting the foregoing, Employee shall be entitled to such other benefits as the Board of Directors and/or any Compensation and Stock Option Committee of the Board of Directors may from time to time approve for him.


5. TERMINATION


a. Involuntary Termination . The Company may terminate Employee's employment hereunder at any time by giving written notice to Employee of termination. However, if Employee's employment is terminated by the Company during the term of this Agreement pursuant to this Section 5(a) , Employee shall be entitled to receive Employee's base salary accrued through the date of termination plus one additional year of base salary payable in the same manner as base salary was previously paid to Employee.

b. Disability . The Company shall be entitled to terminate Employee's employment immediately if Employee becomes disabled (as defined below). Upon such termination, the amount Employee shall be entitled to receive from the Company shall be limited to Employee's base salary accrued through the date of termination and any payments as may be provided under any long-term disability plan or other disability program or insurance policies maintained or provided by the Company. " Disabled" shall mean that for a period of three (3) consecutive months or an aggregate of four (4) months in any twelve (12) month period Employee is incapable of fulfilling the duties of his or her position because of physical, mental or emotional incapacity, injury, sickness or disease. Any question as to the existence or extent of the disability upon which Employee and the Company cannot agree shall be determined by a qualified, independent physician selected by the Company. The determination of any such physician shall be final and conclusive for all purposes.

c. Termination for Cause . The Company may terminate Employee's employment hereunder for Cause (as defined below) immediately without notice. If Employee's employment is terminated by the Company for Cause, the amount Employee shall be entitled to receive from the Company shall be limited to Employee's base salary accrued through the date of termination.


For purposes of this Agreement, the term " Cause" shall be limited to (i) embezzlement, fraud, misappropriation of corporate assets or a breach of the covenants set forth in Sections 9, 10 and 11 below; (ii) Employee being arrested or indicted in connection with a felony; (iii) Employee being arrested or indicted of any lesser crime or offense committed in connection with the performance of Employee's duties hereunder or involving moral turpitude; (iv) the habitual failure or refusal by Employee to perform Employee's duties hereunder after being provided with written warnings and a reasonable period to cure; or (v) chronic absenteeism.


d. Voluntary Termination by Employee . If Employee resigns or otherwise voluntarily terminates Employee's employment before the end of the current term of this Agreement, other than pursuant to the provisions of Section 5(e) of this Agreement, the amount Employee shall be entitled to receive from the Company shall be limited to Employee's base salary accrued through the date of termination.


e. Termination for Good Reason by Employee . Employee may terminate this Agreement for "Good Reason" (as defined below), provided that he shall first provide the Company with prior written notice, which notice shall state with specificity the reason for the termination and provide the Company with thirty (30) days from and after the giving of such notice to cure the breach. If the Company fails to cure the breach within such thirty days, Employee shall be entitled to receive Employee's base salary accrued through the date of termination plus one additional year of base salary payable in the same manner as base salary was previously paid to Employee. For purposes ...