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EXHIBIT 10.21
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement") made and effective as of the 1st day
of April, 1997, by and between ENCORE ORTHOPEDICS, INC., a Texas corporation
(the "Company"), and XXXXX XXXXXXXXXX (the "Employee");
In consideration of the mutual promises contained herein, and of other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Employee agree as follows:
ARTICLE 1
EMPLOYMENT
1.1 Employment Term. The Company hereby employs the Employee for a
primary term commencing on the date set forth above and, subject to earlier
termination as provided in Section 1.5 hereof, ending August 26, 1999 (the
"Employment Term"). Employee agrees to accept such employment and to perform
the services specified herein, all upon the terms and conditions hereinafter
stated.
1.2 Duties. The Employee shall serve in the capacity as Director -
Human Resources of the Company, or in such other capacity as the Company may in
its sole discretion direct, and shall report to, and be subject to the general
direction and control of, the officers and directors of the Company. It is
further understood and agreed that any modification in or expansion of
Employee's duties hereunder shall not, unless specifically agreed in writing by
Company, result in any modification in, increase or decrease of Employee's
compensation referred to in Section 1.4 hereof.
1.3 Extent of Service. The Employee shall devote her full time,
attention, and energy to the business of the Company and, except as may be
specifically permitted by the Company and approved by either the Chief
Executive Officer or the Board of Directors of the Company, shall not be
engaged in any other business activity while in the employ of the Company.
1.4 Compensation
1.4.1 Salary. The Company shall pay to the Employee a base salary
at a rate of not less than Seventy Thousand Dollars ($70,000) per year, or at
such greater rate as the Chief Executive Officer of the Company shall from
time to time determine (the "Base Salary"). The Base Salary shall be subject to
review on an annual basis, beginning January 1, 1998 or, at the Company's
discretion, such earlier date as the Company may designate. Such salary is to
be payable in installments in accordance with the payroll policies of the
Company in effect from time to time during the Employment Term.
1.4.2 Other Benefits. The Employee shall be entitled to such
vacation days, sick days, insurance and other fringe benefit programs
(including pension, profit-sharing, and stock plans, if any) as are established
for other executive employees of the Company, on the same basis
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as such other executive employees are entitled thereto, it being understood
that the establishment, termination, or change of any such program shall be at
the instance of the Company, in exercise of its sole discretion, from time to
time, and any such termination or change in any such program shall not affect
this Agreement.
1.5 Termination.
1.5.1 Termination by Employee. At any time after one (1) year from
the commencement of the Employment Term, Employee may terminate this Agreement
on thirty (30) days' prior written notice.
1.5.2 Termination by Company. Prior to the end of the Employment
Term, the Company may upon ten (10) days' prior written notice discharge the
Employee with or without cause at its sole option without any further liability
hereunder to the Employee or her estate, other than, in the event such
termination was without cause, the Company shall be required to pay the
Employee, at the time of her discharge, for one (1) year's Base Salary, in
addition to any accrued, but unpaid Base Salary. The Employee will have no
further liability hereunder to the Company except pursuant to Article II and
Section 3.2 hereof. For purposes of this Agreement, a "discharge for cause"
shall mean a discharge resulting from Employee having (i) committed any act
involving moral turpitude, dishonesty, or fraud that, in the good faith opinion
of Company, cause a material harm to Company, (ii) failed or refused to follow
legal and reasonable policies or directives established and previously given to
Employee in writing by Company, (iii) willfully failed to attend to her duties
after ten (10) days prior written notice of failure to so act, (iv) committed
acts amounting to gross negligence or willful misconduct to the detriment of
Company, or (v) otherwise materially breached any of the terms or provisions of
this Agreement after ten (10) days prior written notice of such material breach
and failure to cure such breach. Employee shall be deemed to have been
discharged for cause upon delivery to Employee of a "Notice of Termination"
stating the "Date of Termination" and specifying the particulars of the conduct
justifying discharge for cause. Furthermore, if the Employee is terminated
without cause, then the Company agrees, if requested by Employee for the sole
purpose of exercising any vested options that Employee has the right to
exercise, to loan to the Employee an amount equal to (i) the full exercise
price of all vested options that the Employee has the right to exercise less
(ii) the par value of such shares as are to be exercised. The terms of the loan
shall be that it shall be (a) secured by the stock to be purchased, (b) be
otherwise non-recourse to the Employee, (c) bear interest at the prime rate of
interest as published from time to time in The Wall Street Journal, and (d) be
fully due and payable, principal and interest, two (2) years from the date of
termination.
ARTICLE 2
NON-COMPETITION AND DISCLOSURE OF INFORMATION
2.1 Non-competition. Employee acknowledges that her services to be
rendered hereunder are of a special and unusual character which have a unique
value to Company, the loss of which cannot adequately be compensated by damages
in an action at law. In view of the unique value to Company of the services of
Employee for which Company has contracted hereunder, and because of the
confidential information to be obtained by or disclosed to
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Employee, and as a material inducement to Company to enter into this Agreement,
and to pay to Employee the compensation referred to in Section 1.4 hereof,
Employee covenants and agrees that during Employee's employment hereunder and
for a period of one (1) year after she ceases to be employed by Company,
Employee shall not (a) directly or indirectly, solicit business from, divert
business from, or attempt to convert to other methods of using the same or
similar products or services as provided by Company, any client, account or
location of Company with which Employee has had any contact as a result of her
employment by Company hereunder; (b) engage in or carry on, directly or
indirectly, either for herself, as a member of a partnership, or as a
stockholder (except as limited partner or stockholder of less than one percent
(1%) of the issued and outstanding limited partnership interests or stock of a
publicly held partnership or corporation whose gross assets exceed $l,000,000),
as an investor, lender, guarantor, landlord, manager, officer, or director of
any person, partnership, corporation, or other entity (other than the Company
or its subsidiaries), or as an employee, agent, associate, broker, or
consultant of any person, partnership, corporation, or other entity (other than
the Company or its subsidiaries), any business that competes with any
operations of the Company within an one hundred (100)-mile radius of any
geographic area where Company is actually engaged in business, or maintains
sales or service representatives or employees; or (c) directly or indirectly,
solicit for employment or employ any employee of Company. Employee may elect,
by providing written notice to the Company, to shorten the term of this
non-compete to six (6) months, provided, however, in that event, the Company's
obligation to pay severance pay to the Employee pursuant to Section 1.5.2 shall
be reduced to an amount equal to six (6) months Base Salary.
2.2 Disclosures of Information. The Employee acknowledges that in the
course of her employment by the Company, she will receive certain trade
secrets, programs, methods of operation, financial information, lists of
customers, and other confidential information and knowledge concerning the
businesses of the Company (hereinafter collectively referred to as
"Information") that the Company desires to protect. As a material inducement to
Company to enter into this Agreement, and to pay to Employee the compensation
referred to in Section 1.4 hereof, Employee covenants and agrees that she shall
not, at any time during or following the term of her employment hereunder,
directly or indirectly, divulge or disclose, for any purpose whatsoever, any of
such Information which has been obtained by or disclosed to her as a result of
her employment by Company. The Employee further agrees that she will at no time
use the Information in competing with the Company. Upon termination of this
Agreement, the Employee shall surrender to the Company all lists, books,
financial information, records, literature, products, papers, documents,
writings, and other property produced by her or coming into her possession by
or through her employment or relating to the Information, and the Employee
agrees that all such materials will at all times remain the property of the
Company. In the event of a breach or threatened breach by Employee of any of
the provisions of this Article II, Company, in addition to and not in
limitation of any other rights, remedies or damages available to Company at law
or in equity, shall be entitled to a permanent injunction in order to prevent
or to restrain any such breach by Employee, or by Employee's partners, agents,
representatives, servants, employers, employees and/or any and all persons
directly or indirectly acting for or with her.
2.3 Accounting for Profits. Employee covenants and agrees that if she
shall violate any of her covenants or agreements under Article II hereof,
Company shall be entitled to an
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accounting and repayment of all profits, compensation, commissions,
remunerations or benefits which Employee directly or indirectly has realized
and/or may realize as a result of, growing out of or in connection with any
such violation; such remedy shall be in addition to and not in limitation of
any injunctive relief or other rights or remedies to which Company is or may be
entitled at law or in equity or under this Agreement.
2.4 Reasonableness of Restrictions.
2.4.1 Employee has carefully read and considered the provisions of
Article II hereof and, having done so, agrees that the restrictions set forth
in such Article (including, but not limited to, the time period of restriction
and the geographical areas of restriction set forth in Article II hereof) are
fair and reasonable and are reasonably required for the protection of the
interest of Company, its officers, directors and other employees.
2.4.2 In the event that, notwithstanding the foregoing, any of the
provisions of Article II hereof shall be held to be invalid or unenforceable,
the remaining provisions thereof shall nevertheless continue to be valid and
enforceable as though the invalid or unenforceable parts had not been included
therein. In the event that any provision of Article II relating to time period
and/or areas of restriction shall be declared by a court of competent
jurisdiction to exceed the maximum time period or areas such court deems
reasonable and enforceable, said time period and/or areas of restriction shall
be deemed to become and thereafter be the maximum time period and/or areas
which such court deems reasonable and enforceable.
ARTICLE 3
EMPLOYEE INVENTIONS
3.1 Employee Inventions. Employee shall promptly disclose to the
Company or its designee any and all ideas, inventions, works of authorship
(including, but not limited to computer programs, software and documentation),
improvements, discoveries, developments, or innovations (hereinafter referred
to as "said inventions"), whether patentable or unpatentable, copyrightable or
uncopyrightable, made, developed, worked on, or conceived by Employee, either
solely or jointly with others, whether or not reduced to drawings, written
description, documentation, models, or other tangible form: (a) during the
Employment Term that relate to, or arise out of, any developments, services,
research, or products of, or pertain to the business of, the Company and (b)
for a period of six (6) months after termination of the Employment Term, said
inventions that relate to, or arise out of, any developments, services,
research, or products that Employee has been concerned with during the term of
her employment.
3.2 Assignment. Employee hereby assigns and agrees to assign to the
Company, its successors and assigns, Employee's entire right, title, and
interest in and to any of said inventions. All of said inventions shall
forthwith and without further consideration become and be the exclusive
property of the Company, it successors and assigns.
3.3 Cooperation. Employee shall, without further compensation, do all
lawful things, including, but not limited to, maintaining invention records
that shall be the property of the
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Company, rendering assistance, giving of evidence and testimony, and executing
necessary documents, as requested, to enable the Company to file and obtain
patents in the United States and foreign countries on any of said inventions,
as well as to protect the Company's interest in any of said inventions.
ARTICLE 4
MISCELLANEOUS
4.1 Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be deemed to have been
delivered on the date personally delivered or on the date mailed, postage
prepaid, by certified mail, return receipt requested, or telegraphed or telexed
and confirmed if addressed to the respective parties as follows: (a) if to the
Employee to the address set forth below, and (b) if to the Company to Encore
Orthopedics, Inc., 0000 Xxxxxx Xxxx., Xxxxxx, Xxxxx 00000 ATTENTION: President.
Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto.
4.2 Specific Performance. The Employee acknowledges that a remedy at
law for any breach or attempted breach of Section 1.3 and Article II of this
Agreement will be inadequate, and agrees that the Company shall be entitled to
specific performance and injunctive and other equitable relief in case of any
such breach or attempted breach, and further agrees to waive any requirement
for the securing or posting of any bond in connection with the obtaining of any
such injunctive or any other equitable relief. In the event the Company brings
legal action to enforce its rights hereunder, the Employee shall pay all of the
Company's court costs and legal fees and expenses arising out of such action if
the Company prevails in such action.
4.3 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
4.4 Assignment. This Agreement may not be assigned by the Employee.
Neither the Employee nor her spouse shall have any right to commute, encumber,
or otherwise dispose of any right to receive payments hereunder, it being the
intention of the parties that such payments and the rights thereto are
nonassignable and nontransferable. This Agreement is only assignable by the
Company to a parent, subsidiary, successor or other affiliate of the Company.
4.5 Binding Effect. Subject to the provisions of Section 4.4 of this
Agreement, this Agreement shall be binding upon and inure to the benefit of the
parties hereto, the Employee's heirs and personal representatives, and the
successors and assigns of the Company.
4.6 Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Texas.
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4.7 Entire Agreement; Amendment. This Agreement contains the entire
understanding between the parties, and there are no agreements or
understandings among the parties except as set forth herein. The Employee
represents and warrants to the Company that at the time of execution of this
Agreement she is not a party to any other employment agreement. Employee
further represents and warrants that she neither has any proprietary
information of any other business nor is she providing any other business'
proprietary information to the Company. No alteration or modification of this
Agreement shall be valid except by subsequent written instrument executed by
the parties hereto. No waiver by either party of any breach by the other party
of any provision or condition of this Agreement in one circumstance shall be
deemed a waiver of such provision or condition in any other circumstances or be
deemed a waiver of any other provision or condition. The section and paragraph
headings in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
COMPANY:
ENCORE ORTHOPEDICS, INC.
By: /s/ XXXXX X. XXXXX
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Xxxxx X. Xxxxx, President
EMPLOYEE:
/s/ XXXXX XXXXXXXXXX
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XXXXX XXXXXXXXXX
11501 Cherry Hearst
Xxxxxx, Xxxxx 00000
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