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EXHIBIT 10.23
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (this "Agreement") is
made and entered into as of June 21, 2001 (the "Effective Date"), by and between
Xxxxx X. Dal Porto ("Dal Porto") and I-Flow Corporation, a Delaware corporation
(the "Company").
BACKGROUND
The Company and Dal Porto previously entered into that certain
Employment Agreement dated as of September 16, 1996. The parties wish to amend
and restate their prior agreement as provided herein.
AGREEMENT
1. EMPLOYMENT. The Company agrees to employ Dal Porto, and Dal Porto
agrees to serve, in the capacity of Executive Vice President and Chief Operating
Officer as well as a Director. The Company's Board of Directors (the "Board")
may provide such additional designations of title to Dal Porto as the Board, in
its discretion, may deem appropriate. The Company shall employ Dal Porto at
will, and either Dal Porto or the Company may terminate Dal Porto's employment
with the Company at any time and for any reason, with or without cause.
2. EMPLOYMENT COMPENSATION AND BENEFITS.
(a) Base Salary. Dal Porto's base salary as of the Effective Date of
this Agreement shall be at the annual rate of One-Hundred Ninety Four Thousand
and Forty Dollars ($194,040.00). This salary level shall be reviewed at least
annually by the Board's Compensation Committee on the basis of Dal Porto's
performance and the Company's financial success and progress. During the term of
this Agreement, Dal Porto's base salary shall not be reduced.
(b) Annual Bonus and Stock Options. In addition to the base salary
specified in subsection (a) above, Dal Porto shall be entitled to earn an annual
bonus in accordance with the terms of each year's management bonus program as
reasonably determined by the Board. In addition, Dal Porto is eligible to
participate in the equity incentive programs as established by the Company from
time to time. The level of such participation shall be determined by the Board
in the reasonable exercise of its discretion.
(c) Vacation. Dal Porto shall be entitled to at least four (4) weeks
paid vacation during each year of this Agreement. In the event Dal Porto does
not use such vacation, he shall receive, at the end of each year of this
Agreement (or upon termination of this Agreement, if earlier), vacation pay for
all unused vacation calculated at the base salary rate then in effect as set
forth in Section 2(a) above.
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(d) Automobile Allowance. During the term of this Agreement, the
Company shall pay Dal Porto an automobile expense allowance of $1,000 per month,
grossed up for income tax purposes, and shall reimburse Dal Porto for all
gasoline and maintenance expenses incurred by him in operating his automobile.
(e) Expense Reimbursement. The Company shall reimburse Dal Porto for
all reasonable business expenses incurred by Dal Porto in the course of
performing services for the Company.
(f) Life Insurance. The Company shall provide Dal Porto, at the
Company's cost, with a life insurance policy on the life of Dal Porto, which
policy shall be owned personally by Dal Porto or his assignee. The amount of
such policy shall be at least equal to two times Dal Porto's base salary, as
determined from time to time under Section 2(a) above. Dal Porto shall be
entitled to increase the amount of such policy by reimbursing the Company for
the additional premium attributable to such increase.
(g) Other Benefits. The Company shall provide Dal Porto with such
other employment benefits, including, without limitation, medical and dental
insurance, as is provided by the Company to its other executive employees.
3. SEVERANCE PAY.
(a) Termination of Employment With Good and Valid Cause. In the
event Dal Porto's employment by the Company is terminated for "good and valid
cause," or Dal Porto voluntarily resigns, the Company shall have no obligation
to pay any severance pay to Dal Porto. For purposes of this Section 3(a), the
term "good and valid cause" shall mean:
(i) Conviction of a felony.
(ii) The death of Dal Porto.
(iii) Dal Porto's malfeasance in connection with his employment
or habitual neglect of his duty hereunder not cured after written
notification thereof by the Board of Directors, which notice shall
specify the alleged instances of neglect of his duty, and shall provide
Dal Porto with 60 days in which to remedy such malfeasance or neglect.
(b) Termination Without Cause. In the event Dal Porto's
employment as provided herein is terminated by the Company without
cause, or in the event Dal Porto resigns his employment because his job
location is transferred (without his prior, voluntary consent) to a site
more than thirty (30) miles away from his current place of employment,
the Company shall be obligated to pay and provide and Dal Porto shall be
entitled to receive, as severance, the following payments and benefits:
(i) A cash payment equal to two (2) times the sum of (A) Dal
Porto's annual salary in effect at the time of termination, plus (B) the
average annual bonus earned by Dal Porto in the previous three full
fiscal years;
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(ii) Any bonus, or relevant pro rata portion thereof, earned by
Dal Porto for the fiscal year in which the termination occurs;
(iii) For the 24-month period following Dal Porto's termination
without cause, Dal Porto shall be entitled to continue to participate at
the Company's expense in the group medical insurance programs (including
health, drug, dental, and vision insurance) which had been made
available to him (including his family) before his termination (or a
substantively equivalent program). The programs shall be continued in
the same way and at the same level as immediately prior to Dal Porto's
termination without cause. Dal Porto's participation in such group
medical insurance programs shall be terminated prior to the 24-month
anniversary of Dal Porto's termination if and when Dal Porto receives
group medical insurance benefits as a result of concurrent coverage
through another employer's program; and
(iv) Dal Porto's unvested and outstanding stock options shall
immediately become fully vested and exercisable, and all of Dal Porto's
stock options shall remain exercisable for their remaining term.
Notwithstanding the foregoing or anything in this Agreement, Dal Porto
shall be entitled to receive whatever additional severance pay and
other benefits, if any, for which he may qualify according to the terms
of the "Agreement Re: Change in Control" entered into as of June 21,
2001 between the Company and Dal Porto.
(c) Disability.
(i) In the event that Dal Porto is terminated as a result of a
Disability (as defined below), Dal Porto shall receive amounts equal to 60% of
his total compensation in effect at the time of such termination until Dal Porto
achieves the age of 65, or until such time as Dal Porto shall have recovered
from such disability and is able to secure full time employment, whichever first
occurs. To this end, the Company shall secure disability coverage for Dal Porto,
which coverage shall be sufficient to pay Dal Porto the amounts set forth in the
foregoing sentence. During any such period of disability, options granted to Dal
Porto shall not lapse by virtue of such disability.
(ii) "Disability" shall mean a physical or mental incapacity that
results in Dal Porto becoming unable to continue to perform his responsibilities
for the Company and its affiliated companies and which, at least six (6) months
after its commencement, is determined to be total and permanent by a physician
agreed to by the Company and Dal Porto, or in the event of Dal Porto's inability
to designate a physician, his legal representative. In the absence of agreement
between the Company and Dal Porto, each party shall nominate a qualified
physician and the two physicians so nominated shall select a third physician who
shall make the determination as to Disability.
(d) No Mitigation Required. Dal Porto shall not be required to mitigate
the amount of any payments or benefits provided for in Section 3(b) by seeking
other employment or otherwise, nor shall the amount of any payments or benefits
provided for in Section 3(b) be reduced by any compensation earned by Dal Porto
as the result of employment by another employer after the date of Dal Porto's
termination by the Company or otherwise.
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4. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Dal Porto agrees to
execute, deliver and perform, during the term of his employment with the Company
and thereafter, all reasonable confidentiality and nondisclosure agreements,
concerning the Company and its products, which are executed by other key
employees and executives of the Company.
5. SUCCESSORS. This Agreement is personal to Dal Porto, and without the
prior written consent of the Company, shall not be assignable by Dal Porto other
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by Dal Porto's legal representatives. The
rights and obligations of the Company under this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of the Company.
6. GOVERNING LAW. This Agreement is made and entered into in the State
of California, and the internal laws of California shall govern its validity and
interpretation in the performance by the parties hereto of their respective
duties and obligations hereunder.
7. MODIFICATIONS. This Agreement may be amended or modified only by an
instrument in writing executed by all of the parties hereto.
8. ENTIRE AGREEMENT. Except as otherwise set forth herein, this
Agreement, together with the exhibits attached hereto, supercedes any and all
prior written or oral agreements between Dal Porto and the Company, and contains
the entire understanding of the parties hereto with respect to the terms and
conditions of Dal Porto's employment with the Company; provided, however, that
this Agreement is not intended to supercede the Agreement re: Change in Control
between Dal Porto and the Company, which they entered into as of June ___, 2001,
or any agreements which Dal Porto may previously have entered into regarding the
protection of trade secrets and confidential information.
9. DISPUTE RESOLUTION.
(a) Any controversy or dispute between the parties involving the
construction, interpretation, application or performance of the terms,
covenants, or conditions of this Agreement or in any way arising under this
Agreement (a "Covered Dispute") shall, on demand by either of the parties by
written notice served on the other party in the manner prescribed in Section 10
hereof, be referenced pursuant to the procedures described in California Code of
Civil Procedure ("CCP") Sections 638, et seq., as they may be amended from time
to time (the "Reference Procedures"), to a retired Judge from the Superior Court
for the County of Orange for a decision.
(b) The Reference Procedures shall be commenced by either party by
the filing in the Superior Court of the State of California for the County of
Orange of a petition pursuant to CCP Section 638(1) (a "Petition"). Said
Petition shall designate as a referee a Judge from the list of retired Orange
County Superior Court Judges who have made themselves available for trial or
settlement of civil litigation under said Reference
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Procedures. If the parties hereto are unable to agree on the designation of a
particular retired Orange County Superior Court Judge or the designated Judge is
unavailable or unable to serve in such capacity, request shall be made in said
Petition that the Presiding or Assistant Presiding Judge of the Orange County
Superior Court appoint as referee a retired Orange County Superior Court Judge
from the aforementioned list.
(c) Except as hereafter agreed by the parties, the referee shall
apply the internal law of California in deciding the issues submitted hereunder.
Unless formal pleadings are waived by agreement among the parties and the
referee, the moving party shall file and serve its complaint within 15 days from
the date a referee is designated as provided herein, and the other party shall
have 15 days thereafter in which to plead to said complaint. Each of the parties
reserves its respective rights to allege and assert in such pleadings all
claims, causes of action, contentions and defenses which it may have arising out
of or relating to the general subject matter of the Covered Dispute that is
being determined pursuant to the Reference Procedures. Reasonable notice of any
motions before the referee shall be given, and all matters shall be set at the
convenience of the referee. Discovery shall be conducted as the parties agree or
as allowed by the referee. Unless waived by each of the parties, a reporter
shall be present at all proceedings before the referee.
(d) It is the parties' intention by this Section 9 that all issues
of fact and law and all matters of a legal and equitable nature related to any
Covered Dispute will be submitted for determination by a referee designated as
provided herein. Accordingly, the parties hereby stipulate that a referee
designated as provided herein shall have all powers of a Judge of the Superior
Court including, without limitation, the power to grant equitable and
interlocutory and permanent injunctive relief.
(e) Each of the parties specifically (i) consents to the exercise of
jurisdiction over his person by a referee designated as provided herein with
respect to any and all Covered Disputes; and (ii) consents to the personal
jurisdiction of the California courts with respect to any appeal or review of
the decision of any such referee.
(f) Each of the parties acknowledges that the decision by a referee
designated as provided herein shall be a basis for a judgment as provided in CCP
Section 644 and shall be subject to exception and review as provided in CCP
Section 645.
10. NOTICES. Any notice or communications required or permitted to be
given to the parties hereto shall be delivered personally or be sent by United
States registered or certified mail, postage prepaid and return receipt
requested, and addressed or delivered as follows, or at such other addresses the
party addressed may have substituted by notice pursuant to this Section:
I-Flow Corporation Xxxxx X. Dal Porto
00000 Xxxxxxx Xxxxx 00 Xxxxxxxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000 Xxxx xx Xxxx, Xxxxxxxxxx 00000
Attn: Chief Executive Officer
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11. CAPTIONS. The captions of this Agreement are inserted for
convenience and do not constitute a part hereof.
12. SEVERABILITY. In case any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein and there shall be deemed substituted for such invalid,
illegal or unenforceable provision such other provision as will most nearly
accomplish the intent of the parties to the extent permitted by the applicable
law. In case this Agreement, or any one or more of the provisions hereof, shall
be held to be invalid, illegal or unenforceable within any governmental
jurisdiction or subdivision thereof, this Agreement or any such provision
thereof shall not as a consequence thereof be deemed to be invalid, illegal or
unenforceable in any other governmental jurisdiction or subdivision thereof.
13. ATTORNEYS' FEES. In the event any party institutes any action or
proceeding to enforce any provision of this Agreement, the prevailing party
shall be entitled to receive from the losing party actual attorneys' fees and
costs incurred in such action or proceeding.
14. FURTHER ASSURANCES. Each party hereto shall promptly execute and
deliver such further instruments and take such further actions as the other
party may reasonably require or request in order to carry out the intent of this
Agreement.
15. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one in the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered effective as of the day and year first written above
in Lake Forest, California.
I-FLOW CORPORATION XXXXX X. DAL PORTO
By:
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Name: Xxxxxx X. Xxxxxxx Xxxxx X. Dal Porto
Title: President & CEO
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