AMERICAN MEDICAL SYSTEMS, INC. EMPLOYMENT AGREEMENT
Exhibit
10.2
AMERICAN MEDICAL SYSTEMS, INC.
THIS EMPLOYMENT AGREEMENT is made and entered into effective as of August 3, 2009, between
American Medical Systems, Inc., a Delaware corporation (the “Company”), and Xxxxxxxxxxx X.
Xxxxx (the “Executive”).
RECITALS
WHEREAS, the Company recognizes that the future growth, profitability and success of the
Company’s business will be substantially and materially enhanced by the employment of the Executive
by the Company; and
WHEREAS, the Company desires to employ the Executive and the Executive has indicated his
willingness to provide his services to the Company, on the terms and conditions set forth herein;
NOW, THEREFORE, on the basis of the foregoing premises and in consideration of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
Section 1. Employment. The Company hereby agrees to employ the Executive and the
Executive hereby accepts employment with the Company, on the terms and subject to the conditions
hereinafter set forth. The Executive shall serve as the Sr. Vice President and Chief Technology
Officer of American Medical Systems Holdings, Inc. (the “Parent Corporation”) and the
Company, and, in such capacity, shall report directly to the Company’s Chief Executive Officer and
shall have such duties as are typically performed by the Chief Technology Officer of a corporation,
together with such additional duties, commensurate with the Executive’s position as the Chief
Technology Officer of the Company, as may be assigned to the Executive from time to time by the
Company’s Chief Executive Officer. The principal location of the Executive’s employment shall be
at the Company’s principal executive office located in Minnetonka, Minnesota, although the
Executive understands and agrees that he may be required to travel from time to time for Company
business reasons.
Section 2. Term. Unless terminated pursuant to Section 6 hereof, the Executive’s
employment hereunder shall commence on August 3, 2009, and shall continue during the period ending
on August 2, 2010 (the “Initial Term”). Thereafter, the Executive’s employment hereunder
shall extend automatically for consecutive periods of one year unless either party shall provide
notice of termination not less than sixty (60) days prior to an anniversary date of this Agreement.
The Initial Term, together with any extension pursuant to this Section 2, is referred to herein as
the “Employment Term.” The Employment Term and this Agreement shall terminate upon any
termination of the Executive’s employment pursuant to Section 6.
Section 3. Compensation. During the Employment Term, the Executive shall be entitled
to the compensation and benefits outlined in sections 4 and 5.
Section 4. Salary. As compensation for the performance of the Executive’s services
hereunder, the Company shall pay to the Executive a base salary (the “Salary”) of
$290,000 per year with increases, if any, as may be approved by the Board of Directors or the
Compensation Committee of the Board. The Salary shall be payable in accordance with the customary
payroll practices of the Company as the same shall exist from time to time. In no event shall the
Salary be decreased during the Employment Term.
Section 5. Bonus. During the Employment Term, in addition to Salary, the Executive
shall be eligible to participate in the executive variable incentive plan or such other bonus plans
as may be adopted from time to time by the Board of Directors or the Compensation Committee of the
Board for officers of the Company (the “Bonus”) for each such fiscal year ending during the
Employment Period; provided that, unless the Board of Directors or the Compensation Committee of
the Board determines otherwise, the Executive must be employed on the last day of each fiscal
quarter or year, as of which the Bonus is determined under any bonus plan, in order to receive the
Bonus attributable to such fiscal quarter or year. The Executive’s entitlement to the Bonus for
any particular fiscal quarter or year shall be based on the attainment of performance objectives
established by the Board of Directors or the Compensation Committee of the Board in any such bonus
plan, and the Executive’s target Bonus for 100% achievement of performance objectives under such
bonus plan shall be 40% of base Salary. The Executive’s participation in the 2009 executive
variable incentive plan shall be effective as of the beginning of employment on a prorated basis.
(a) Stock Options.
(1) The Executive shall be granted on the date established by the Compensation
Committee per the date of the Resolution for the Option (the “Grant Date”)
a Non-Qualified Stock Option to acquire 130,000 shares of Common Stock of the Parent
Corporation under the Parent Corporation’s 2005 Stock Incentive Plan (the “2005
Plan”) at an exercise price equal to the Fair Market Value (as defined in the
2005 Plan) of one share of Common Stock on the Grant Date; such option to become
exercisable, on a cumulative basis, with respect to 25% of the shares covered by
such option on the first anniversary of the grant date, and with respect to 6.25% of
the shares covered by such option on the last day of each calendar quarter
thereafter, provided that the Executive has been continuously employed by or
providing service to the Company through, each such date; and such option to expire
seven years from the Grant Date. All of the terms and conditions relating to the
option, including the vesting and expiration dates, are set forth in the Stock
Option Certificate, dated the Grant Date, evidencing such option.
(b) Relocation Expenses. The Executive will be eligible for the Company’s
standard relocation benefits, which include, movement of household goods, up to 12 months
temporary housing if needed, closing costs on the purchase of a home in Minnesota, and other
benefits as set forth in the Relocation Program provided to the Executive. Additionally,
the Executive will receive reimbursement of up to $49,100 (gross) on loss on sale of his
current home, if applicable.
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(c) Benefits. Except as otherwise provided in this Agreement, in addition to
the Salary and Bonus, if any, the Executive shall be entitled during the Employment Term to
participate in medical, dental, life and disability insurance programs and other benefit
programs provided to officers of the Company on terms no less favorable than those available
to the officers of the Company. The Executive shall also be entitled to twenty seven (27)
paid-time-off days, same number of holidays and other benefits as are generally allowed to
other senior executives of the Company in accordance with the Company’s policies in effect
from time to time.
(d) Exclusivity. During the Employment Term, the Executive shall devote his
full time to the business of the Company and its subsidiaries, shall faithfully serve the
Company and its subsidiaries, shall use his best efforts to promote and serve the interests
of the Company and its subsidiaries and shall not engage in any other business activity,
whether or not such activity shall be engaged in for pecuniary profit, except that the
Executive may (i) participate in the activities of professional trade organizations related
to the business of the Company and its subsidiaries, (ii) engage in personal investing
activities and (iii) serve on the board of directors of not more than two (2) other
companies whose businesses are not in competition with the business interests of the
Company, and which have been approved by the Chief Executive Officer, provided that the
activities set forth in these clauses (i), (ii) and (iii), either singly or in the
aggregate, do not interfere in any material respect with the services to be provided by the
Executive hereunder.
(e) Reimbursement for Expenses. During the Employment Term, the Executive is
authorized to incur reasonable expenses in the discharge of the services to be performed
hereunder, including expenses for travel, entertainment, lodging and similar items in
accordance with the Company’s expense reimbursement policy, as the same may be modified by
the Company from time to time. The Company shall reimburse the Executive for all such
proper expenses upon presentation by the Executive of itemized accounts of such expenditures
in accordance with the financial policy of the Company, as in effect from time to time.
Section 6. Termination and Default.
(a) Death. The Executive’s employment shall automatically terminate upon his
death and upon such event, the Executive’s estate shall be entitled to receive the amounts
specified in Section 6(e) below.
(b) Disability. If the Executive is unable to perform the duties required of
him under this Agreement because of illness, incapacity, or physical or mental disability,
the Employment Term shall continue and the Company shall pay all compensation required to be
paid to the Executive hereunder, unless the Executive is disabled such that the Executive
would be entitled to receive disability benefits under the Company’s long-term disability
plan, or if no such plan exists, the Executive is unable to perform the duties required of
him under this Agreement for an aggregate of 180 days (whether or not consecutive) during
any 12-month period during the term of this Agreement, in which event the Executive’s
employment shall terminate.
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(c) Cause. The Company may terminate the Executive’s employment at any time,
with or without Cause. In the event of termination pursuant to this Section 6(c) for Cause
(as defined below), the Company shall deliver to the Executive written notice setting forth
the basis for such termination, which notice shall specifically set forth the nature of the
Cause which is the reason for such termination. Termination of the Executive’s employment
hereunder shall be effective upon delivery of such notice of termination. For purposes of
this Agreement, “Cause” shall mean: (1) the Executive’s failure (except where due
to a disability contemplated by subsection (b) hereof), neglect or refusal to perform his
duties hereunder which failure, neglect or refusal shall not have been corrected by the
Executive within 30 days of receipt by the Executive of written notice from the Company of
such failure, neglect or refusal, which notice shall specifically set forth the nature of
said failure, neglect or refusal, (2) any willful or intentional act of the Executive that
has the effect of injuring the reputation or business of the Company or its affiliates in
any material respect; (3) any continued or repeated absence from the Company, unless such
absence is (A) approved or excused by the Chief Executive Officer of the Company or (B) is
the result of the Executive’s illness, disability or incapacity (in which event the
provisions of Section 6(b) hereof shall control); (4) use of illegal drugs by the Executive
or repeated drunkenness; (5) conviction of the Executive for the commission of a felony; or
(6) the commission by the Executive of an act of fraud or embezzlement against the Company.
(d) Resignation. The Executive shall have the right to terminate his
employment at any time by giving notice of his resignation.
(e) Payments.
(1) In the event that the Executive’s employment terminates for any reason, the
Company shall pay to the Executive all amounts and benefits accrued but unpaid
hereunder through the date of termination in respect of Salary or unreimbursed
expenses, including accrued and unused paid-time-off days.
(2) In the event of the Executive’s Termination of Employment (defined below)
by the Company without Cause, whether during or upon expiration of the then current
term of this Agreement, and Executive executes within thirty days following
Termination of Employment (and does not revoke within the relevant statutory
periods) a Release and Separation Agreement in the form provided by the Company,
then in addition to the amounts specified in Section 6(e)(1), (i) the Company shall
continue to pay the Executive his Salary (less any applicable withholding or similar
taxes) at the rate in effect hereunder on the date of such termination periodically,
in accordance with the Company’s prevailing payroll practices, until the earlier of
(x) the date that is twelve (12) months after the date of such termination or (y)
the date the Executive begins full-time employment with another employer (the
“Severance Term”); and (ii) if the Executive elects COBRA continuation
coverage under the Company’s group medical and/or dental plans, then for each month
of the Severance Term, the Company will pay or reimburse the Executive an amount
equal to the excess of (A) the portion of the monthly cost for the Executive’s
coverage under the
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Company’s group health and/or dental plans that was borne by the Company
immediately prior to the Executive’s Termination of Employment (subject to the rule
for coverage changes discussed below) over (B) the portion of the monthly cost for
the Executive’s coverage under the Company’s group health and/or dental plans that
is borne by the Company during the Severance Term. If the level of the Executive’s
coverage changes during the Severance Term, as, for example, from single to family
coverage or to no coverage, the amount will be determined as if the new coverage
level had been the level of coverage in effect immediately prior to the Termination
of Employment. Any reimbursement made under this Section 6(e)(2) shall be made on
or before the last day of the calendar year following the calendar year in which the
expense was incurred. In the event the Executive accepts part-time employment or
engages in his own business, including consulting activity, prior to the last date
of the Severance Term, the Executive shall immediately notify the Company and the
Company shall be entitled to reduce the amounts due the Executive under this Section
6(e) by the amounts paid to the Executive in respect of such part-time employment or
other business activity.
(3) Further, in the event the Executive’s Termination of Employment without
Cause by reason of the Company having notified the Executive that this Agreement
will not be extended pursuant to Section 2, the Executive shall be entitled to
receive a pro-rated amount of the Bonus in a lump sum based on the Executive’s
period of employment during the calendar year in which such termination occurs (less
any applicable withholding or similar taxes), which Bonus shall be paid following
the end of the calendar year.
(4) Amounts owed by the Company in respect of the Salary or reimbursement for
expenses under the provisions of Section 5 hereof shall, except as otherwise set
forth in this Section 6(e), be paid promptly after the expiration of any rescission
periods contained in the release, but not more than 90 days following such
termination.
(5) The payments and benefits to be provided to the Executive as set forth in
this Section 6(e) in the event the Executive’s employment is terminated by the
Company without Cause and shall be lieu of any and all benefits otherwise provided
under any severance pay policy, plan or program maintained from time to time by the
Company for its employees.
(6) To the extent the Executive incurs a tax liability (including foreign,
federal, state and local taxes) in connection with the reimbursement under Section
6(e)(2) which the Executive would not have incurred had the Executive been an active
employee of the Company participating in the Company’s group health and dental
plans, the Company will make a payment to the Executive in an amount equal to such
tax liability plus an additional amount sufficient to permit the Executive to retain
a net amount after all taxes equal to the initial tax liability in connection with
the benefit. The payment pursuant to this Section 6(e)(6) will be made within 10
days after the Executive’s remittal of a written request for payment accompanied by
a statement indicating the basis for and amount of the
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Executive’s tax liability, but in no event later than December 31 of the calendar
year next following the calendar year in which the related taxes are remitted to the
appropriate taxing authority.
(7) Notwithstanding the foregoing, if, at the time of his or her Termination of
Employment, the Executive is a ‘specified employee’ (defined below), and the Company
reasonably determines that any salary continuation payment due under Section 6(e)(2)
constitutes deferred compensation subject to the requirements of Code Section 409A,
then such payments shall be suspended and not made until on or after the first day
after the end of the six (6) month period following the Executive’s Termination of
Employment but in no event later than seven (7) months following Termination of
Employment, or, if earlier, upon the Executive’s death. If any such suspended
payment is not made within 10 days of the end of such six month period, the Company
will pay the Executive interest, equal to the applicable Federal rate in effect for
each month, from the date of Termination of Employment through the date of payment.
The Executive is a ‘Specified Employee’ if on the date of his or her
Termination of Employment he or she is a ‘key employee’ (defined below), of the
Company (or any other entity with whom the Company would be treated as a single
employer under Section 414(b) or 414(c) of the Code). For this purpose, Executive
is a ‘key employee’ during the 12-month period beginning on the April 1 immediately
following a calendar year, if he or she was employed by the Company (or any other
entity with whom the Company would be treated as a single employer under Section
414(b) or 414(c) of the Code) and satisfied, at any time during such preceding
calendar year, the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the
Code (applied in accordance with the regulations issued thereunder and disregarding
Section 416(i)(5) of the Code). The Executive will not be treated as a Specified
Employee if he or she is not required to be treated as a Specified Employee under
Treasury regulations issued under Section 409A of the Code.
(8) When used in this Agreement, “Termination of Employment” means a
termination of Executive’s employment relationship with the Company and all
Affiliates or such other change in the Executive’s employment relationship with the
Company and all Affiliates that would be considered a “separation from service”
under Section 409A of the Code. The Executive’s employment relationship will be
treated as remaining intact while the Executive is on a military leave, a sick leave
or other bona fide leave of absence (pursuant to which there is a reasonable
expectation that the Executive will return to perform services for the Company or an
Affiliate) but only if the period of such leave does not exceed six (6) months, or
if longer, so long as the Executive retains a right to reemployment by the Company
or an Affiliate under applicable statute or by contract, provided, however, a
twenty-nine (29) month period of absence shall be substituted for such six (6) month
period of absence where the Executive’s leave is due to any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than six (6) months and such
impairment causes the Executive to be unable to perform the duties of his or her
position of employment or any
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substantially similar position of employment. In all cases, the Executive’s
Termination of Employment must constitute a “separation from service” under Section
409A of the Code and any “separation from service” under Section 409A of the Code
shall be treated as a Termination of Employment. For this purpose,
“Affiliate” means any entity that, together with the Company, is treated as
a single employer under Code Section 414(b) or (c).
Section 7. Restrictions on Competitive Activities. The Executive acknowledges that
the agreements and covenants contained in this Section 7 are essential to protect the value of the
Company’s business and assets and by his or her current employment with the Company, the Executive
has obtained and will obtain such knowledge, contacts, know-how, training and experience and there
is a substantial probability that such knowledge, know-how, contacts, training and experience could
be used to the substantial advantage of a competitor of the Company and to the Company’s
substantial detriment. In consideration of the foregoing and the other covenants and agreements of
the Company set forth herein, the Executive agrees to the restrictions contained in this Section 7.
(a) Non-Solicitation. The Executive agrees that the Executive will not, during
the Executive’s employment with the Company and for a period of two years following the date
of the Executive’s voluntary or the Company’s involuntary termination of the Executive’s
employment with the Company (the “Restrictive Period”), directly or indirectly
solicit, or assist anyone else in the solicitation of, any of the Company’s current
employees who worked for the Company for the purpose of hiring them, engaging them as
consultants, or inducing them to leave their employment with the Company. If the Executive
is approached by one of the Company’s employees regarding potential employment, consultation
or contract, as described above during the Restrictive Period of non-solicitation, the
Executive must immediately (1) fully inform the employee or former employee of the
Executive’s non-solicitation obligation described above; and (2) refrain from engaging in
any communication with the employee or former employee regarding potential employment,
consultation or contract.
(b) “Company Product” means any product, product line or service that has been
designed, developed, manufactured, marketed, sold or is under research, development, or is
being pursued through acquisition or licensure, or has been the subject of disclosure to the
Company in response to a due diligence process by the Company, at any time during the
Executive’s employment with the Company; provided, however, that if the Executive becomes
entitled to the benefits described in Section 2 of the CIC Severance Agreement, then the
definition of “Company Product” shall mean Company Product as of immediately prior to the
“change in control” as defined in the CIC Severance Agreement.
(c) “Competitive Product” means goods, products, product lines or services
developed, designed, manufactured, marketed, promoted, sold, serviced, or that are in
development or the subject of research by any Person that are the same or similar, perform
any of the same or similar functions, may be substituted for, or are intended or used for
any of the same purposes as a Company Product.
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(d) “Conflicting Organization” means any Person (including the Executive), and
any parent, subsidiary, partner or affiliate of any Person, that engages in, or is about to
become engaged in, the development, design, production, manufacture, promotion, marketing,
sale, support or service of a Competitive Product.
(e) Non-Competition. The Executive agrees that the Executive will not, during
the Restrictive Period, alone or in any capacity with another Person (e.g., as an advisor,
consultant, principal, agent, partner, officer, director, shareholder, employee or
otherwise), within any geographic area where the Company does business:
(1) directly or indirectly disclose to a Conflicting Organization the names or
any other information regarding the Company’s customers, or, on behalf of a
Conflicting Organization, call on, solicit, take away, or attempt to call on,
solicit, or take away any of the customers of the Company on whom the Executive
called, or otherwise had contact on behalf of the Company, or developed knowledge
regarding the customer’s need for or use of Competitive Product(s); or
(2) seek or obtain employment with, work for, consult with, or lend assistance
to any Conflicting Organization in a capacity which is the same as or similar to the
employment capacity the Executive performed on behalf of the Company; or
(3) directly or indirectly participate in or support in any capacity the
manufacture, invention, development, testing or research of any Competitive Product;
or
(4) disrupt, damage, impair, or interfere with the business of the Company
whether by way of interfering with or disrupting the Company’s relationship with
employees, customers, agents, representatives or vendors.
(f) Exception. During the Restrictive Period, the restrictions contained in
this Section 7 will not prevent the Executive from accepting employment with, or providing
consulting services to, a large diversified organization with separate and distinct
divisions that do not compete, directly or indirectly, with the Company. During the
Restrictive Period set forth in this Section 7, the Executive will inform any new employer,
prior to accepting employment or providing consulting services, of the existence of this
Agreement and provide such employer with a copy of this Agreement.
Section 8. Trade Secrets. The Company has, and is expected to develop certain
concepts, products, processes, information, designs, ideas, policies and procedures (collectively,
“Trade Secrets”) which it uses in its business which give the Company an advantage over
competitors who do not know, understand or use these secrets. Trade Secrets include the following
information:
(a) information which in any way relates to the Company’s design, engineering,
manufacturing or management activities, financial condition, financial operations,
purchasing activities, business plans and marketing activities;
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(b) information acquired or compiled by the Company regarding actual or potential
customers, including their identities, their development prospects, financial information
concerning their business operations, identity and quantity of products or services
purchased from the Company, and all related accounts receivable information;
(c) information concerning or resulting from the development of internal policies,
procedures, standards, quality or productivity measures or tools; and
(d) any other information (in whatever form) as may, from time to time, be designated
by the Company as “Proprietary” or a “Trade Secret.”
Except as may be required by the Executive’s employment with the Company or as
expressly agreed upon by the Company in writing, the Executive agrees that he will not,
during or after his employment with the Company, use or disclose any Trade Secrets or permit
any person to examine or copy any Trade Secrets. If any of the above classes of information
is found by a court to not constitute Trade Secrets, such information shall constitute
“Confidential Information” for purposes of this Agreement.
Section 9. Confidential Information. The Company has, and is expected to develop
other Confidential Information, concepts, designs, policies, and procedures having independent
economic value from not being generally known or ascertainable by proper means which the Executive
will or may learn in the course of employment but which does not constitute Trade Secrets as
described above. For purposes of this Agreement, “Confidential Information” means any
proprietary, confidential or competitively sensitive information and materials which are the
property of or relate to the Company including, without limitation:
(a) the identity of the Company’s past, present and prospective customers, clients or
business contacts, and all documents, information and materials which concern or relate to
such customers, clients or business contacts;
(b) marketing, sales, and advertising information; marketing and sales techniques,
strategies, efforts and data; business plans and product development and delivery schedules;
market research and forecasts;
(c) organizational information, such as personnel and salary data, merger, acquisition
and expansion information; information concerning methods of operation; divestiture
information, and competitive information pertaining to the Company’s distributors;
(d) technical information such as product specifications, compounds, formulas,
improvements, discoveries, developments, designs, inventions, techniques, and new products;
(e) information disclosed to the Executive as part of any specialized, proprietary
training process; and
(f) information of third parties provided to the Executive subject to non-disclosure
restrictions for use in the Executive’s business for the Company.
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Except as may be required by the Executive’s employment with the Company or as
expressly agreed upon in writing by the Company in writing, the Executive agrees that he
will not, during or at any time after his employment with the Company, use or disclose any
Confidential Information or permit any person to examine, copy or otherwise receive any
Confidential Information.
Section 10. Inventions.
(a) “Inventions” means any inventions, discoveries, improvements and ideas,
whether or not in writing or reduced to practice and whether or not patentable or
copyrightable, made, authored or conceived by the Executive, whether by his individual
efforts or in connection with the efforts of others, and that either (i) relate in any way
to the Company’s business, products or processes, past, present, anticipated or under
development, or (ii) result in any way from the Executive’s employment by the Company, or
(iii) use the Company’s equipment, supplies, facilities or trade secret information.
(b) The Executive agrees that all Inventions made by you during the period of your
employment with the Company and for six (6) months thereafter, whether made during the
working hours of the Company or on the Executive’s own time, will be the sole and exclusive
property of the Company. The Executive will, with respect to any Invention: (i) keep
current, accurate, and complete records, which will belong to the Company and be kept and
stored on the Company’s premises; (ii) promptly and fully disclose the existence and
describe the nature of the Invention to the Company in writing (and without request); (iii)
assign (and the Executive hereby assigns) to the Company all of his right, title and
interest in and to the Invention, any applications he makes for patents or copyrights in any
country, and any patents or copyrights granted to the Executive in any country; and (iv)
acknowledge and deliver promptly to the Company any written instruments, and perform any
other acts necessary in the Company’s opinion to preserve property rights in the Invention
against forfeiture, abandonment or loss and to obtain and maintain letters patent and/or
copyrights on the Invention and to vest the entire right and title to the Invention in the
Company, whether during or after the Executive’s employment with the Company.
(c) The Executive represents that, as of the date of this Agreement, you have no right
under and will make no claims against the Company with respect to any inventions,
discoveries, improvements, ideas or works of authorship which would be Inventions if made,
conceived, authored or acquired by you during the term of this Agreement.
(d) To the extent that any Invention qualifies as “work made for hire” as defined in 17
U.S.C. § 101 (1976), as amended, such Invention will constitute “work made for hire” and, as
such, will be the exclusive property of the Company.
(e) Pursuant to Minnesota law, this Section 10 does not apply to any invention for
which no equipment, supplies, facility, or trade secret information of the Company was used
and which was developed entirely on the Executive’s own time, and (i) which
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does not relate directly to any business of the Company or any of the Company’s actual
or demonstrably anticipated research or development, or (ii) which does not result from any
work the Executive performs for the Company.
Section 11. Injunctive Relief. Without intending to limit the remedies available to
the Company, the Executive acknowledges that in the event of a breach of any of the covenants
contained in Sections 7, 8, 9 or 10 may result in material irreparable injury to the Company or its
subsidiaries or affiliates for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event of such a breach or
threat thereof, the Company shall be entitled to obtain a temporary restraining order and/or a
preliminary or permanent injunction, without the necessity of proving irreparable harm or injury as
a result of such breach or threatened breach of Sections 7, 8, 9 or 10, restraining the Executive
from engaging in activities prohibited by Sections 7, 8, 9 and 10 or such other relief as may be
required specifically to enforce any of the covenants in Sections 7, 8, 9 and 10.
Section 12. Representations and Warranties of the Executive. The Executive represents
and warrants to the Company as follows:
(a) This Agreement, upon execution and delivery by the Executive, will be duly executed
and delivered by the Executive and (assuming due execution and delivery hereof by the
Company) will be the valid and binding obligation of the Executive enforceable against the
Executive in accordance with its terms.
(b) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby nor the performance of this Agreement in accordance with
its terms and conditions by the Executive (1) requires the approval or consent of any
governmental body or of any other person or (2) conflicts with or results in any breach or
violation of, or constitutes (or with notice or lapse of time or both would constitute) a
default under, any agreement, instrument, judgment, decree, order, statute, rule, permit or
governmental regulation applicable to the Executive. Without limiting the generality of the
foregoing, the Executive is not a party to any non-competition, non-solicitation, no hire or
similar agreement that prohibits or conflicts in any way the Executive’s employment
hereunder.
The representations and warranties of the Executive contained in this Section 12 shall survive
the execution and delivery of this Agreement and the consummation of the transactions contemplated
hereby.
Section 13. Representations and Warranties of the Company. The Company represents and
warrants to the Executive as follows:
(a) This Agreement, upon execution and delivery by the Company, will be duly executed
and delivered by the Company and (assuming due execution and delivery hereof by the
Executive) will be the valid and binding obligation of the Company enforceable against the
Company in accordance with its terms.
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(b) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby nor the performance of this Agreement in accordance with
its terms and conditions by the Company (1) requires the approval or consent of any
governmental body or of any other person or (2) conflicts with or results in any breach or
violation of, or constitutes (or with notice or lapse of time or both would constitute) a
default under, any agreement, instrument, judgment, decree, order, statute, rule, permit or
governmental regulation applicable to the Company.
The representations and warranties of the Company contained in this Section 13 shall survive
the execution and delivery of this Agreement and the consummation of the transactions contemplated
hereby.
Section 14. Successors and Assigns; No Third-Party Beneficiaries. This Agreement
shall inure to the benefit of, and be binding upon, the successors and assigns of each of the
parties, including, but not limited to, the Executive’s heirs and the personal representatives of
the Executive’s estate; provided, however, that neither party shall assign or
delegate any of the obligations created under this Agreement without the prior written consent of
the other party. Notwithstanding the foregoing, the Company shall have the unrestricted right to
assign this Agreement and to delegate all or any part of its obligations hereunder to any of its
subsidiaries or Affiliates, but in such event such assignee shall expressly assume all obligations
of the Company hereunder and the Company shall remain fully liable for the performance of all of
such obligations in the manner prescribed in this Agreement. Nothing in this Agreement shall
confer upon any person or entity not a party to this Agreement, or the legal representatives of
such person or entity, any rights or remedies of any nature or kind whatsoever under or by reason
of this Agreement.
Section 15. Waiver and Amendments. Any waiver, alteration, amendment or modification
of any of the terms of this Agreement shall be valid only if made in writing and signed by the
parties hereto; provided, however, that any such waiver, alteration, amendment or
modification is consented to on the Company’s behalf by the Board of Directors or Compensation
Committee of the Board. No waiver by either of the parties hereto of their rights hereunder shall
be deemed to constitute a waiver with respect to any subsequent occurrences or transactions
hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.
Section 16. Severability and Governing Law. The Executive acknowledges and agrees
that the covenants set forth in Section 7 hereof are reasonable and valid in geographical and
temporal scope and in all other respects. If any of such covenants or such other provisions of
this Agreement are found to be invalid or unenforceable by a final determination of a court of
competent jurisdiction (a) the remaining terms and provisions hereof shall be unimpaired and (b)
the invalid or unenforceable term or provision shall be deemed replaced by a term or provision that
is valid and enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision. This Agreement shall be governed by and construed in accordance
with the laws of the state of Minnesota applicable to contracts made and to be performed entirely
within such state.
Section 17. Notices.
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(a) All communications under this Agreement shall be in writing and shall be delivered
by hand or mailed by overnight courier or by registered or certified mail, postage prepaid:
(1) If to the Executive, at 0 Xxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxxxxx, 00000 or at
such other address as the Executive may have furnished the Company in writing, and
(2) If to the Company, at 00000 Xxxx Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxx 00000,
marked for the attention of Senior Vice President, Human Resources, or at such other
address as it may have furnished in writing to the Executive.
(b) Any notice so addressed shall be deemed to be given: if delivered by hand, on the
date of such delivery; if mailed by courier, on the first business day following the date of
such mailing; and if mailed by registered or certified mail, on the third business day after
the date of such mailing.
Section 18. Section Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof,
affect the meaning or interpretation of this Agreement or of any term or provision hereof.
Section 19. Entire Agreement. This Agreement, including the Stock Option
Certificates, and the CIC Severance Agreement constitutes the entire understanding and agreement of
the parties hereto regarding the employment of the Executive. This Agreement supersedes all prior
negotiations, discussions, correspondence, communications, understandings and agreements between
the parties relating to the subject matter of this Agreement.
Section 20. Survival of Operative Sections. Upon any termination of the Executive’s
employment, the provisions of Sections 6(e) and 7 through 21 of this Agreement shall survive to the
extent necessary to give effect to the provisions thereof.
Section 21. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together shall be considered one and the
same agreement. Facsimile execution and delivery of this Agreement shall be legal, valid and
binding execution and delivery for all purposes.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
| AMERICAN MEDICAL SYSTEMS, INC. |
||||
| By: | /s/ Xxxxxxx Xxxx | |||
| Xxxxxxx Xxxx | ||||
| Senior Vice President, Human Resources | ||||
| /s/ Xxxxxxxxxxx X. Xxxxx | ||||
| Xxxxxxxxxxx X. Xxxxx | ||||
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