EXHIBIT 10.10
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is effective as of May 8,
1996, by and between Xxxxxxx X. Xxxxxx (the "Employee") and Perclose, Inc., a
Delaware corporation (the "Company").
R E C I T A L S
A. The Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company and its stockholders to
assure that the Company will have the continued dedication and objectivity of
the Employee, notwithstanding the possibility, threat or occurrence of a
Change of Control (as defined below) of the Company.
B. The Board believes that it is imperative to provide the Employee
with certain severance benefits upon the Employee's termination of employment
following a Change of Control which provide the Employee with enhanced
financial security and provide sufficient incentive and encouragement to the
Employee to remain with the Company following a Change of Control.
C. In order to accomplish the foregoing objectives, the Board of
Directors has directed the Company, upon execution of this Agreement by the
Employee, to agree to the terms provided herein.
D. Certain capitalized terms used in the Agreement are defined in
Section 6 below.
In consideration of the mutual covenants herein contained, and in
consideration of the continuing employment of Employee by the Company, the
parties agree as follows:
1. DUTIES AND SCOPE OF EMPLOYMENT; CANCELLATION OF EXISTING CONTRACTS.
(a) POSITION. The Company shall employ the Employee in the
position of Vice President, as such position was defined in terms of
responsibilities and compensation as of the effective date of this Agreement;
provided, however, that the Board of Directors shall have the right, prior to
the occurrence of a Change of Control, to revise such responsibilities and
compensation from time to time as the Board of Directors may deem necessary
or appropriate.
(b) OBLIGATIONS. The Employee shall devote his full business
efforts and time to the Company and its subsidiaries. The foregoing,
however, shall not preclude the Employee from engaging in such activities and
services as do not interfere or conflict with his responsibilities to the
Company, including finishing certain consulting projects, such projects not
to exceed three days and to be completed by June 15, 1996.
(c) EXISTING CONTRACTS. The Company and Employee agree that the
terms of any existing employment agreement will be superseded by the terms
herein at the time there is a Change of Control.
2. BASE COMPENSATION. The Company shall pay the Employee as
compensation for his services a base salary at the annualized rate of
$145,000. Such salary shall be reviewed at least annually and shall be
increased from time to time subject to accomplishment of such performance and
contribution goals and objectives as may be established from time to time by
the Board of Directors. Such salary shall be paid periodically in accordance
with normal Company payroll. The annual compensation specified in this
Section 2, together with any increases in such compensation that the Board of
Directors may grant from time to time, is referred to in this Agreement as
"Base Compensation."
3. EMPLOYEE BENEFITS. The Employee shall be eligible to participate
in the employee benefit plans and executive compensation programs maintained
by the Company applicable to other key executives of the Company, including
(without limitation) retirement plans, savings or profit-sharing plans,
deferred compensation plans, supplemental retirement or excess-benefit plans,
stock option, incentive or other bonus plans, life, disability, health,
accident and other insurance programs, paid vacations, and similar plans or
programs, subject in each case to the generally applicable terms and
conditions of the plan or program in question and to the determination of any
committee administering such plan or program.
4. TERM OF EMPLOYMENT. The Company and the Employee acknowledge that
the Employee's employment is at will, as defined under applicable law. If
the Employee's employment terminates for any reason, the Employee shall not
be entitled to any payments, benefits, damages, awards or compensation other
than as provided by this Agreement, or as may otherwise be available in
accordance with the Company's established employee plans and policies at the
time of termination. The terms of this Agreement shall terminate upon the
earlier of (i) the date that all obligations of the parties hereunder have
been satisfied or (ii) twelve (12) months after a Change of Control. A
termination of the terms of this Agreement pursuant to the preceding sentence
shall be effective for all purposes, except that such termination shall not
affect the payment or provision of compensation or benefits on account of a
termination of employment occurring prior to the termination of the terms of
this Agreement.
5. SEVERANCE BENEFITS.
(a) TERMINATION FOLLOWING A CHANGE OF CONTROL. If the Company
terminates the Employee's employment at any time within 12 months after a
Change of Control, then the Employee shall be entitled to receive severance
benefits as follows:
(i) VOLUNTARY RESIGNATION; INVOLUNTARY TERMINATION. If the
Employee's employment terminates either by Employee's voluntary resignation
or as a result of Involuntary Termination other than for Cause, then the
Employee shall be entitled to receive (a) severance pay
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equal to six months salary in the case of voluntary resignation and twelve
months salary in the case of Involuntary Termination other than for Cause,
(b) vacation pay equal to the amount of compensation for accrued but unused
vacation time, payable in a lump sum at the time of or prior to the
Termination Date and (c) life, medical, dental, accident and disability
insurance and other similar benefits as are provided by the Company to other
key executives of the Company for six months following the Termination Date
in the case of voluntary resignation and for twelve months following the
Termination Date in the case of Involuntary Termination without Cause. Any
Severance Payment to which Employee is entitled pursuant to this Section
shall be paid on the Termination Date.
(ii) TERMINATION FOR CAUSE. If the Employee is terminated
for Cause, then the Employee shall not be entitled to receive severance or
other benefits except for those (if any) as may then be established under the
Company's then existing severance and benefits plans and policies at the time
of such termination.
(iii) DISABILITY; DEATH. If the Company terminates the
Employee's employment as a result of the Employee's Disability, or such
Employee's employment is terminated due to the death of the Employee, then
the Employee shall not be entitled to receive severance or other benefits
except for those (if any) as may then be established under the Company's then
existing severance and benefits plans and policies at the time of such
Disability or death.
(b) TERMINATION APART FROM CHANGE OF CONTROL. In the event the
Employee's employment is terminated for any reason, either prior to the
occurrence of a Change of Control or after the 12-month period following a
Change of Control, then the Employee shall be entitled to receive severance
and all other benefits for six months following such termination.
(c) OPTIONS. Subject to Section 9 below, upon a Change of Control
100% of the unvested portion of any stock option held by the Employee under
the Company's stock option plans shall automatically be accelerated and the
Employee or the Employee's representative, as the case may be, shall have the
right to exercise all or any portion of such stock option, in addition to any
portion of the option exercisable prior to the Change of Control.
6. DEFINITION OF TERMS. The following terms referred to in this
Agreement shall have the following meanings:
(a) CHANGE OF CONTROL. "Change of Control" shall mean the
occurrence of any of the following events:
(i) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 50% or more of the
total voting power represented by the Company's then outstanding voting
securities; or
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(ii) The stockholders 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 fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the
stockholders 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 the Company's assets.
(b) INVOLUNTARY TERMINATION. "Involuntary Termination" shall mean
(i) without the Employee's express written consent, the assignment to the
Employee of any duties or the significant reduction of the Employee's duties,
either of which is inconsistent with the Employee's position with the Company
and responsibilities in effect immediately prior to such assignment, or the
removal of the Employee from such position and responsibilities; (ii) without
the Employee's express written consent, a substantial reduction, without good
business reasons, of the facilities and perquisites (including office space
and location) available to the Employee immediately prior to such reduction;
(iii) a reduction by the Company in the Base Compensation of the Employee as
in effect immediately prior to such reduction; (iv) a material reduction by
the Company in the kind or level of employee benefits to which the Employee
is entitled immediately prior to such reduction with the result that the
Employee's overall benefits package is significantly reduced; (v) the
relocation of the Employee to a facility or a location more than 25 miles
from the Employee's then present location, without the Employee's express
written consent; (vi) any purported termination of the Employee by the
Company which is not effected for Disability or for Cause, or any purported
termination for which the grounds relied upon are not valid; or (vii) the
failure of the Company to obtain the assumption of this Agreement by any
successors contemplated in Section 7 below.
(c) CAUSE. "Cause" shall mean (i) any act of personal dishonesty
taken by the Employee in connection with his responsibilities as an employee
and intended to result in substantial personal enrichment of the Employee,
(ii) the conviction of a felony, (iii) a willful act by the Employee which
constitutes gross misconduct and which is injurious to the Company, and (iv)
continued violations by the Employee of the Employee's obligations under
Section 1 of this Agreement which are demonstrably willful and deliberate on
the Employee's part after there has been delivered to the Employee a written
demand for performance from the Company which describes the basis for the
Company's belief that the Employee has not substantially performed his duties.
(d) DISABILITY. "Disability" shall mean that the Employee has been
unable to perform his duties under this Agreement as the result of his
incapacity due to physical or mental illness, and such inability, at least 26
weeks after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the
Employee or the Employee's legal representative (such Agreement as to
acceptability not to be unreasonably withheld). Termination resulting from
Disability may only be effected after at least 30 days' written notice by the
Company of its intention to terminate the Employee's employment. In the
event that
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the Employee resumes the performance of substantially all of his duties
hereunder before the termination of his employment becomes effective, the
notice of intent to terminate shall automatically be deemed to have been
revoked.
(e) TERMINATION DATE. "Termination Date" shall mean (i) if this
Agreement is terminated by the Company for Disability, thirty (30) days after
notice of termination is given to the Employee (provided that the Employee
shall not have returned to the performance of the Employee's duties on a
full-time basis during such thirty (30) day period), (ii) if the Employee's
employment is terminated by the Company for any other reason, the last date
of regular employment, as provided for in the notice of termination, provided
that if within thirty (30) days after the Company gives the Employee notice
of termination, the Employee notifies the Company that a dispute exists
concerning the termination, the Termination Date shall be the date on which
the dispute is finally determined, either by mutual written agreement of the
parties, by final judgment, order or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired and no appeal
having been perfected), or (iii) if the Agreement is terminated by the
Employee, the date on which the Employee delivers the notice of termination
to the Company.
7. SUCCESSORS.
(a) COMPANY'S SUCCESSORS. Any successor to the Company (whether
direct or indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's
business and/or assets shall assume the obligations under this Agreement and
agree expressly to perform the obligations under this Agreement in the same
manner and to the same extent as the Company would be required to perform
such obligations in the absence of a succession. For all purposes under this
Agreement, the term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in this subsection (a) or which becomes bound by the terms of this
Agreement by operation of law.
(b) EMPLOYEE'S SUCCESSORS. The terms of this Agreement and all
rights of the Employee hereunder shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
8. NOTICE.
(a) GENERAL. Notices and all other communications contemplated by
this Agreement shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by U.S. registered or
certified mail, return receipt requested and postage prepaid. In the case of
the Employee, mailed notices shall be addressed to him at the home address
which he most recently communicated to the Company in writing. In the case
of the Company, mailed notices shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention of its
Secretary.
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(b) NOTICE OF TERMINATION. Any termination by the Company for
Cause or by the Employee as a result of a voluntary resignation or an
Involuntary Termination shall be communicated by a notice of termination to
the other party hereto given in accordance with Section 8 of this Agreement.
Such notice shall indicate the specific termination provision in this
Agreement relied upon, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination under the provision
so indicated, and shall specify the termination date (which shall be not more
than 30 days after the giving of such notice). The failure by the Employee
to include in the notice any fact or circumstance which contributes to a
showing of Involuntary Termination shall not waive any right of the Employee
hereunder or preclude the Employee from asserting such fact or circumstance
in enforcing his rights hereunder.
9. MISCELLANEOUS PROVISIONS.
(a) NO DUTY TO MITIGATE. The Employee shall not be required to
mitigate the amount of any payment contemplated by this Agreement, nor shall
any such payment be reduced by any earnings that the Employee may receive
from any other source.
(b) WAIVER. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed
to in writing and signed by the Employee and by an authorized officer of the
Company (other than the Employee). No waiver by either party of any breach
of, or of compliance with, any condition or provision of this Agreement by
the other party shall be considered a waiver of any other condition or
provision or of the same condition or provision at another time.
(c) WHOLE AGREEMENT. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into
by either party with respect to the subject matter hereof.
(d) CHOICE OF LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California.
(e) SEVERABILITY. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full
force and effect.
(f) ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court
having jurisdiction. Punitive damages shall not be awarded.
(g) NO ASSIGNMENT OF BENEFITS. The rights of any person to
payments or benefits under this Agreement shall not be made subject to option
or assignment, either by voluntary or involuntary assignment or by operation
of law, including (without limitation) bankruptcy, garnish-
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ment, attachment or other creditor's process, and any action in violation of
this subsection (g) shall be void.
(h) EMPLOYMENT TAXES. All payments made pursuant to this Agreement
will be subject to withholding of applicable income and employment taxes.
(i) ASSIGNMENT BY COMPANY. The Company may assign its rights under
this Agreement to an affiliate, and an affiliate may assign its rights under
this Agreement to another affiliate of the Company or to the Company;
provided, however, that no assignment shall be made if the net worth of the
assignee is less than the net worth of the Company at the time of assignment.
In the case of any such assignment, the term "Company" when used in a
section of this Agreement shall mean the corporation that actually employs
the Employee.
(j) COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement,
in the case of the Company by its duly authorized officer, as of the date set
forth above.
COMPANY PERCLOSE, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Plain, Jr.
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Title: President and Chief Executive Officer
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EMPLOYEE Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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