ARTHROCARE CORPORATION EMPLOYMENT AGREEMENT
Exhibit
10.75
ARTHROCARE
CORPORATION
This
Employment Agreement (the “Agreement”) is
effective as of April 2, 2009 (the “Effective Date”), by
and between Xxxx Xxxxxx (“Executive”) and
ArthroCare Corporation, a Delaware corporation (the “Company”). Certain
capitalized terms used in the Agreement are defined in Section 7
below.
RECITALS
WHEREAS, the Board of
Directors of the Company believes that it is in the best interests of the
Company and its stockholders to provide Executive with an incentive to commence
his employment with the Company and to motivate Executive to maximize the value
of the Company in the event of a Change of Control for the benefit of its
stockholders; and
WHEREAS, the Company and
Executive wish to set forth the terms and conditions related to Executive’s
employment in this Agreement.
AGREEMENT
NOW, THEREFORE, in
consideration of the mutual promises and agreements contained herein, the
parties hereby agree as follows:
1. Term
of Agreement. The Agreement shall
commence on the Effective Date and shall expire on the first anniversary of the
Effective Date (such period, including any extensions pursuant to this Section
1, the “Term”). This Agreement shall be
automatically renewable for one-year periods after the expiration of the initial
period, unless otherwise terminated pursuant to Section 5. This
Agreement may also be terminated by either party, with or without cause, at the
end of the then-current Term with six months’ advance written notice to the
other party.
2. Duties
and Scope of Employment. The Company shall employ
the Executive in the position of Senior Vice-President and Chief Financial
Officer, as such position was defined in terms of responsibilities and
compensation as of the Effective Date; provided, however, that the Board of Directors shall have
the right, subject to the other provisions of this Agreement, at any time prior
to the occurrence of a Change of Control, to revise such responsibilities and
compensation as the Board of Directors in its discretion may deem necessary or
appropriate. The Executive shall comply with and be bound by the Company's
operating policies, procedures and practices from time to time in effect during
his employment. During the term of the Executive's employment with
the Company, the Executive shall devote his full time, skill and attention to
his duties and responsibilities, and shall perform them faithfully, diligently
and competently, and the Executive shall use his best efforts to further the
business of the Company and its affiliated entities.
3. At-Will
Employment. The
Company and Executive acknowledge that Executive’s employment is and shall
continue to be at-will, as defined under applicable law, and that Executive’s
employment with the Company may be terminated by either party at any time for
any or no reason. If Executive’s employment terminates for any
reason, Executive shall not be entitled to any payments, benefits, damages,
award or compensation other than as provided in this Agreement. The
rights and duties created by this Section 3 may not be modified in any way
except by a written agreement executed by the Chief Executive Officer of the
Company and Executive.
4. Compensation. For the duties and services
to be performed by Executive hereunder, the Company shall pay Executive, and
Executive agrees to accept, the salary, Equity Awards (as defined in Section 7
below), bonuses and other benefits described below in this Section
4.
(a) Salary. Executive shall receive an
annual salary of $285,000 (the “Base
Salary”). Executive’s Base Salary
will be payable biweekly pursuant to the Company’s normal payroll
practices. The Base Salary shall be reviewed annually by the
Company’s Board of Directors or its Compensation Committee, and adjusted as
necessary following such review, and any increase will be effective as of the
date determined appropriate by the Board of Directors or its Compensation
Committee and will thereafter be deemed a part of Base Salary for purposes of
Sections 6(a) and 6(b) of this Agreement.
(b) Annual
Bonus. In
addition to the Base Salary, for each fiscal year ending during the Term,
Executive shall have the opportunity to earn an annual performance bonus (the
“Annual
Bonus”) in an amount up to
60% of Executive’s Base Salary. The exact amount of the Annual Bonus
will be determined by the Board of Directors or its Compensation Committee in
consultation with the Chief Executive Officer and Executive, based upon mutually
agreed performance objectives, both personal and corporate.
(c) Equity
Awards. Subject
to the discretion of the Company’s Board of Directors (or its Compensation
Committee), Executive shall be eligible to receive additional Equity Awards,
from time to time in the future, on such terms and subject to such conditions as
the Board of Directors (or its Compensation Committee) shall determine as of the
date of any such grant. To the extent permitted by Section 422(d) of
the Internal Revenue Code of 1986, as amended (the “Code”), any stock options shall be incentive
stock options.
(i) Equity
Award Acceleration Upon a Change of Control. Subject to any
additional acceleration of vesting and exercisability and lapse of transfer or
forfeiture restrictions described in Section 6(a) below, upon a Change of
Control (as defined in Section 7 below), the vesting and exercisability of all
of Executive’s outstanding Equity Awards shall be automatically accelerated and
any transfer or forfeiture restrictions on such Equity Awards automatically
lapse as to 50% of the then-unvested shares subject thereto at the time of the
Change of Control. The foregoing provision is hereby deemed to be a
part of each Equity Award and to supersede any contrary provision in any
agreement regarding such Equity Award.
(ii) Equity
Award Acceleration Upon a Hostile Takeover. Subject to any
additional acceleration of vesting and exercisability and lapse of transfer or
forfeiture restrictions described in Section 6(a) below, upon a Hostile Takeover
(as defined in Section 7 below), the vesting and exercisability of all of
Executive’s outstanding Equity Awards shall be automatically accelerated and any
transfer or forfeiture restrictions on such Equity Awards automatically lapse as
to 100% of the shares subject thereto. The foregoing provision is
hereby deemed to be a part of each Equity Award and to supersede any contrary
provision in any agreement relating thereto.
2
(d) Additional
Benefits.
(i) General. Executive shall be eligible
to participate in the Company’s employee benefit plans of general application,
including without limitation, those plans covering medical, disability and life
insurance in accordance with the rules established for individual participation
in any such plan and under applicable law. Executive shall be
eligible for vacation and sick leave in accordance with the policies in effect
during the Term of this Agreement and will receive such other benefits as the
Company generally provides to its other employees of comparable position and
experience.
(ii) Relocation
Assistance. In connection with Executive’s commencement of employment, the Company will pay Executive
an amount equal to $1,500
per month for the first six months following the Effective Date (the
“Relocation
Assistance Payments”). In the event that Executive’s employment terminates within six (6) months after
the Effective Date due to a Voluntary Termination or a Termination for Cause,
Executive will be obligated
to repay to the Company,
on a prorated
basis, the amount of any
Relocation Assistance Payments previously made by the Company (with such
repayment to be made within ten (10) days after the date of Executive’s
termination of employment).
(e) Reimbursement
of Expenses. Executive shall be
authorized to incur on behalf and for the benefit of, and shall be reimbursed
by, the Company for reasonable expenses, provided that such expenses are
substantiated in accordance with Company policies.
5. Termination
of Agreement. This Agreement may be
terminated during its Term upon the occurrence of any of the following
events:
(i) The Company’s termination of Executive
for Cause (as defined in Section 7 below) (“Termination
for Cause”);
(ii) The Company’s termination of Executive
without Cause (as defined in Section 7 below), which determination may be made
by the Company at any time at the Company’s sole discretion, for any or no
reason (“Termination
Without Cause”);
(iii) The effective date of a written notice
sent to the Company from Executive stating that Executive is electing to
terminate his employment with the Company (“Voluntary
Termination”);
or
(iv) Executive’s death or Disability (as
defined in Section 7 below).
6. Severance
Benefits. Executive shall be entitled to receive
severance benefits upon termination of employment only as set forth in this
Section 6:
(a) Termination
Following a Change of Control.
3
(i) Involuntary
Termination. If
Executive’s employment with the Company is terminated at any time within 24
months after a Change of Control as a result of an Involuntary Termination,
then, subject to Executive
executing and not revoking a general mutual release of claims in a form
acceptable to the Company (which Executive must execute and deliver to the Company
within fifty (50) days following the date of termination and shall not have been revoked by
Executive within any period permitted under applicable law),
Executive shall be entitled
to receive the following severance and other benefits, provided that such termination of
employment with the Company constitutes a Separation from Service:
(A) Severance
Pay. During the
Continuation Period, Executive shall be entitled to receive as severance an
amount equal to the sum of (i) Executive’s Base Salary (on a monthly basis)
multiplied by the length of the Continuation Period, plus (ii) an amount equal
to the cash portion of Executive’s target Annual Bonus for the fiscal year in
which the termination occurs (with it deemed that all performance goals have
been met at 100% of budget or plan) multiplied by (x) the number of months in
the Continuation Period divided by (y) 12. Such severance payments
will be made periodically in the same amounts and at the same intervals as the
payments of Base Salary were made immediately prior to termination of
employment; provided,
however, that any such payments that would otherwise have been made before the
first normal payroll payment date falling on or after the First Payment Date
shall be made on the First
Payment Date. In addition, during the Continuation Period, the
Company shall continue to
make available to Executive and Executive’s spouse and dependents any group
health plans, life insurance plans and other benefit plans and programs of the
Company which were available to such individuals on the date of such termination
of employment (the “Benefit
Programs”), to the extent
permitted by law and subject to the terms and conditions of the relevant plan or
program. For purposes of this Section 6(a)(i)(A), Benefit Programs
will not include future participation in any discretionary bonus or equity
incentive pool, other than amounts as contemplated in this subsection
A.
(B) Medical
Benefits. During
the Continuation Period, Executive shall be entitled to receive a payment in an
amount equal to $1,500 per month, which shall be intended to reimburse
Executive’s premium payments, if any, for group health coverage elected by
Executive pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended (“COBRA”).
(C) Equity
Acceleration. The vesting and exercisability of all of
Executive’s outstanding Equity Awards shall be automatically accelerated and any
transfer or forfeiture restrictions on such Equity Awards automatically lapse as
to 100% of the shares subject thereto. The foregoing provision is
hereby deemed to be a part of each Equity Award and to supersede any contrary
provision in any agreement relating thereto.
(ii) Voluntary
Termination; Termination For Cause. If Executive’s employment
with the Company is terminated at any time within 24 months after a Change of
Control as a result of a Voluntary Termination or a Termination for Cause, then
Executive shall not be entitled to receive payment of any severance
benefits. Executive will receive payment(s) for all salary and unpaid
vacation accrued as of the date of Executive’s termination of employment and
Executive’s benefits will be continued under the Company’s then existing benefit
plans and policies in accordance with such plans and policies in effect on the
date of termination and in accordance with applicable law.
4
(b) Termination
Apart from a Change of Control.
(i) Involuntary
Termination. If
Executive’s employment with the Company terminates as a result of an Involuntary
Termination at any time prior to the occurrence of a Change of Control or after
the 24-month period following the effective date of a Change of Control, then,
subject to Executive executing and not revoking a general release of claims
against the Company in a form acceptable to the Company (which Executive must execute and deliver to the Company
within fifty (50) days following the date of termination and shall not have been revoked by
Executive within any period permitted under applicable law),
Executive will be entitled to receive the following severance and other
benefits, provided that
such termination of employment with the Company constitutes a Separation from
Service:
(A) Severance
Pay. The Company
shall pay to Executive in one lump-sum payment on the First Payment Date, an
amount equal to (i) Executive’s Base Salary (on a monthly basis) multiplied by
the length of the Continuation Period, plus (ii) an amount equal to the cash
portion of Executive’s target Annual Bonus for the fiscal year in which the
termination occurs (with it deemed that all performance goals have been met at
100% of budget or plan) multiplied by (x) the number of months in the
Continuation Period divided by (y) 12. In addition, during the
Continuation Period, the Company shall continue to make available to Executive
and Executive’s spouse and dependents the Benefit Programs, to the extent
permitted by law and subject to the terms and conditions of the relevant plan or
program. For purposes of this Section 6(b)(i)(A), Benefit Programs
will not include future participation in any discretionary bonus or equity
incentive pool, other than continuation of amounts as contemplated in this
subsection A.
(B) Medical
Benefits. During
the Continuation Period, Executive shall be entitled to receive a payment in an
amount equal to $1,500 per month, which shall be intended to reimburse
Executive’s premium payments, if any, for group health coverage elected by the
Executive pursuant to the COBRA.
(ii) Voluntary
Termination; Termination for Cause. If Executive’s employment
with the Company is terminated at any time prior to a Change of Control or after
the 24 month period following the effective date of a Change of Control as a
result of a Voluntary Termination (other than an Involuntary Termination, in
which case Section 6(b)(i) will apply) or a Termination for Cause, then
Executive shall not be entitled to receive payment of any severance or other
benefits described in this Section 6. Executive will receive
payment(s) for all salary and unpaid vacation accrued as of the date of
Executive’s termination of employment and Executive’s benefits will be continued
under the Company’s then existing benefit plans and policies in accordance with
such plans and policies in effect on the date of termination and in accordance
with applicable law.
(c) Termination
Resulting from Death or Disability. If Executive’s employment
is terminated as a result of Executive’s death or Disability, Executive shall
not be entitled to any other severance or other benefits described above in this
Section 6. Executive, or, as the case may be, Executive’s estate
or designated beneficiary(ies) will receive payment(s) for all salary and unpaid
vacation accrued as of the date of Executive’s termination of employment and
Executive’s benefits will be continued under the Company’s then existing benefit
plans and policies in accordance with such plans and policies in effect on the
date of termination and in accordance with applicable law.
5
7. Definition
of Terms. The following terms
referred to in this Agreement shall have the following
meanings:
(a) “Cause” for Executive’s termination will exist
at any time after the happening of one or more of the following events, in each
case as determined in good faith by the Company’s Board of
Directors:
(i) Executive’s gross negligence or willful
misconduct in performance of his duties hereunder where such gross negligence or
unique misconduct has resulted or is likely to result in substantial and
material damage to the Company or any of its subsidiaries;
(ii) Executive’s repeated and unjustified
absence from the Company;
(iii) Executive’s material and willful
violation of any federal or state law;
(iv) The commission of any act of fraud by
Executive with respect to the Company;
(v) Executive’s conviction of a felony or a
crime involving moral turpitude causing material harm to the standing and
reputation of the Company; or
(vi) Executive’s incurable material breach of
any element of the Company’s Confidential Information and Invention Assignment
Agreement, including without limitation, Executive’s theft or other
misappropriation of the Company’s proprietary information.
(b) “Change of
Control” shall mean the
occurrence of any of the following events, provided that such event constitutes
a change in the ownership or effective control of the Company or a change in the
ownership of a substantial portion of the assets of the Company, as described in
Treasury Regulation Section 1.409A-3(i)(5):
(i) A merger or consolidation of the Company
with any other corporation, other than a merger or consolidation that 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) more than 50% or more
of the total voting power represented by the Company’s then outstanding voting
securities;
(ii) The approval by the shareholders of the
Company of a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of the Company’s
assets;
6
(iii) A change in the composition of the
Board, as a result of which fewer than a majority of the directors are Incumbent
Directors. “Incumbent Directors” shall mean directors who either (A)
are directors of the Company as of the date hereof, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at least a
majority of those directors whose election or nomination was not in connection
with any transaction described in subsections (i) or (ii) or in connection with
an actual or threatened proxy contest relating to the election of directors of
the Company; or
(iv) Any “person” (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
becoming 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, without the approval of the Company’s Board of Directors.
(c) “Continuation
Period” shall mean a
period, commencing on the date of an Involuntary Termination, of a duration
equal to two (2) months for each full month of Executive’s employment as Senior
Vice-President and Chief Financial Officer of the Company, up to a maximum of
(i) 24 months, for purposes of an Involuntary Termination which occurs within 24
months after a Change of Control, or (ii) 12 months, for purposes of an
Involuntary Termination which occurs prior to a Change of Control or more than
24 months following a Change of Control.
(d) “Disability” shall mean that Executive has been
unable to perform his duties under this Agreement as a 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 Executive or
Executive’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 Executive’s employment. In the event that
Executive 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) “Equity
Award” shall mean a grant
of stock options, stock appreciation rights, restricted stock or restricted
stock units.
(f) “First
Payment Date” shall mean
the sixtieth (60th) day following the date of the Executive’s Separation from
Service.
(g) “Hostile
Takeover” shall mean any
“person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becoming 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, without the approval of the
Company’s Board of Directors.
7
(h) “Involuntary
Termination” shall include
any Termination Without Cause and Executive’s Voluntary Termination, upon 30
days prior written notice to the Company within 90 days
following:
(i) The assignment of any duties, or the
removal from or reduction or limitation of duties or responsibilities, which in
any case is a significant change in Executive’s position, title, organization
level, duties, responsibilities, compensation and status with the Company,
without Executive’s express written consent;
(ii) A substantial reduction of the
facilities and perquisites provided to Executive (including office space or
relocation more than 30 miles from the Company’s then present
location);
(iii) A reduction in Executive’s Base Salary
(other than in connection with a general decrease in base salaries for officers
of the Company);
(iv) A material reduction in the kind or
level of Executive’s benefits (including percentage bonus opportunity) with the
result that the overall benefits package is significantly
reduced;
(v) any purported termination of the
Executive by the Company that is not effected for Disability or for Cause, or
any purported termination for which the grounds relied upon are not valid;
or
(vi) The failure of the Company to obtain the
assumption of this Agreement by any successors; provided, however, that no Involuntary Termination shall
be deemed to have occurred if any such successor substitutes an agreement for
this Agreement providing comparable severance benefits to those provided in this
Agreement.
(i) “Separation
from Service” shall mean a
termination of the Executive’s employment with the Company which
constitutes a separation from service within the meaning of Section 409A of the
Code and the regulations promulgated thereunder, including Treasury Regulation
Section 1.409A-1(h).
8. Golden
Parachute Excise Tax.
(a) Effect
of Excise Tax. In the event that it shall
be determined that any payment or other benefit by the Company to or for the
benefit of Executive under this Agreement, whether paid or payable (the
“Payments”), would be subject to the excise tax
imposed by Section 4999 of the Code (the “Excise
Tax”), then such Payments
shall be payable either (i) in full, or (ii) as to such lesser amount which
would result in no portion of such Payments being subject to the Excise Tax,
whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the Excise Tax, results in the receipt by
Executive, on an after-tax basis, of the greatest amount of Payments,
notwithstanding that all or some portion of such Payments may be subject to the
Excise Tax. To the extent that any reduction of Payments is required
pursuant to this Section 8(a), the specific Payments that shall be reduced and
the order of such reduction shall be determined by the Company in its sole
discretion.
8
(b) Determination. Unless the Company and
Executive otherwise agree in writing, any determination required under this
Section shall be made in writing by the nationally recognized firm of certified
public accountants (the “Accounting
Firm”) used by the Company
prior to the Change of Control (or, if such Accounting Firm declines to serve,
the Accounting Firm shall be a nationally recognized firm of certified public
accountants selected by the Company), whose determination shall be conclusive
and binding upon Executive and the Company for all purposes. For
purposes of making the calculations required by this Section, the Accountants
may make reasonable assumptions and approximations concerning applicable taxes
and may rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code. The Company and
Executive shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make their determination under
this Section. The Company shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this
Section.
9. Confidentiality
Agreement. Executive shall sign, as of
the Effective Date, the Company’s standard form of Employment, Proprietary
Information and Invention Assignment Agreement that covers protection of the
Company’s proprietary information and assignment of inventions (the
“Confidentiality
Agreement”). Executive hereby
represents and warrants to the Company that he agrees to abide by the terms of
the Confidentiality Agreement and further agrees that the provisions of the
Confidentiality Agreement shall survive any termination of this Agreement or of
Executive’s employment relationship with the Company.
10. Nonsolicitation
Covenant. Executive hereby agrees
that he shall not, during the Term of this Agreement and for 12 months
thereafter, do any of the following without the prior written consent of the
Company’s Board of Directors:
(a) Solicit
Business. Solicit or influence or
attempt to influence any client, customer or other person either directly or
indirectly, to direct his or its purchase of the Company’s products and/or
services to any person, firm, corporation, institution or other entity in
competition with the business of the Company; and
(b) Solicit
Personnel. Solicit or influence or
attempt to influence any person employed by the Company to terminate or
otherwise cease his employment with the Company or become an employee of any
competitor of the Company.
11. Conflicts. Executive represents that his
performance of all the terms of this Agreement will not breach any other
agreement to which Executive is a party. Executive has not, and will
not during the Term of this Agreement, enter into any oral or written agreement
in conflict with any of the provisions of this Agreement. Executive
further represents that he is entering into or has entered into an employment
relationship with the Company of his own free will.
12. Successors. Any successor to the
Company (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise), or to all or substantially all of the
Company’s business and/or assets shall assume the obligations of the Company
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 assets that executes
and delivers the assumption agreement described in this Section 12 or which
becomes bound by the terms of this Agreement by operation of law. The
terms of this Agreement and all of Executive’s rights hereunder shall inure to
the benefit of, and be enforceable by, Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
9
13. Indemnification
Agreement. The
Company and the Executive have entered into an Indemnification Agreement
substantially in the form filed as Exhibit 10.1 to the Company’s Registration
Statement on Form S-1 filed with the Securities and Exchange Commission
(Registration No. 33-80453).
14. Section
409A of the Code.
(a) Notwithstanding any provision to the
contrary in the Agreement, if Executive is deemed by the Company at the time of
his Separation from Service to be a “specified employee” for purposes of Section
409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion
of the termination benefits to which Executive is entitled under this Agreement is
required in order to avoid a prohibited distribution under Section
409A(a)(2)(B)(i) of the Code, such portion of the Executive’s termination benefits shall not be
provided to the Executive
prior to the earlier of
(i) the expiration of the six-month period
measured from the date of the Executive’s Separation from Service with the Company
or (ii) the date of the Executive’s death. Upon the first
business day following the expiration of the applicable Code Section
409A(a)(2)(B)(i) deferral period, all payments deferred pursuant to this Section
14(a) shall be paid in a lump sum to the
Executive, and any remaining payments due under
the Agreement shall be paid as otherwise provided herein, with all such payments
to be subject to all required tax withholding. For purposes of
Section 409A of the Code (including, without limitation, for purposes of
Treasury Regulation Section 1.409A-2(b)(2)(iii)), the Executive’s right to receive any installment payments payable pursuant to
this Agreement (the “Installment
Payments”) shall be treated
as a right to receive a series of separate payments and, accordingly, each
Installment Payment shall at all times be considered a separate and distinct
payment.
(b) In addition, any reimbursements payable to the
Executive pursuant to this Agreement shall be paid to the Executive no later
than December 31 of the year following the year in which the cost was
incurred. The amount of expenses reimbursed in one year shall not
affect the amount eligible for reimbursement in any subsequent year, and the
Executive’s right to reimbursement under this Agreement will not be subject to liquidation or
exchange for another benefit.
15. Miscellaneous
Provisions.
(a) No
Duty to Mitigate. Executive shall not be
required to mitigate the amount of any payment contemplated by this Agreement
(whether by seeking new employment or in any other manner), nor, except as
otherwise provided in this Agreement, shall any such payment be reduced by any
earnings that Executive may receive from any other source.
10
(b) Amendments
and Waivers. Any
term of this Agreement may be amended or waived only with the written consent of
the parties. 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) Entire
Agreement. This
Agreement, along with the Confidentiality Agreement and the Indemnification
Agreement referred to herein, constitute the entire agreement of the parties and
supersedes all oral negotiations and prior writings with respect to the subject
matter hereof.
(d) Notices. Any notice required or
permitted by this Agreement shall be in writing and shall be deemed sufficient
upon receipt, when delivered personally, by facsimile or by a nationally
recognized delivery service (such as Federal Express or UPS), or forty-eight
(48) hours after being deposited in the U.S. mail as certified or registered
mail with postage prepaid, if such notice is addressed to the party to be
notified at such party’s address as set forth below or as subsequently modified
by written notice. Any termination by the Company for Cause or by
Executive as a result of an Involuntary Termination shall be communication by a
notice of termination to the other party hereto given in accordance with this
Section. 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 15 days after the giving of such notice). The failure
by Executive to include in the notice any fact or circumstance which contributes
to a showing of Involuntary Termination shall not waive any right of Executive
hereunder or preclude Executive from asserting such fact or circumstance in
enforcing his rights hereunder.
(e) Choice
of Law. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Texas, without giving effect to the
principles of conflict of laws. Executive hereby consents to the
personal jurisdiction of the state and federal courts located in Texas for any action or proceeding arising
from or relating to this Agreement or relating to any arbitration in which the
parties are participants.
(f) Severability. If one or more provisions
of this Agreement are held to be unenforceable under applicable law, the parties
agree to renegotiate such provision in good faith. In the event that
the parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (i) such provision shall be excluded from this
Agreement, (ii) the balance of the Agreement shall be interpreted as if
such provision were so excluded and (iii) the balance of the Agreement
shall be enforceable in accordance with its terms.
(g) 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.
11
(h) Arbitration. Any dispute or claim arising out of or in
connection with this Agreement shall be finally settled by binding arbitration
in Austin, Texas in accordance with the rules of the
American Arbitration Association by one arbitrator appointed in accordance with said
rules. The arbitrator shall apply Texas law, without reference to rules of
conflicts of law or rules of statutory arbitration, to the resolution of any
dispute. Judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. Notwithstanding the
foregoing, the parties may apply to any court of competent jurisdiction for
preliminary or interim equitable relief, or to compel arbitration in accordance
with this paragraph, without breach of this arbitration
provision. This Section 15(h) shall not apply to the Confidentiality
Agreement.
(i) 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, garnishment, attachment or other
creditor’s process, and any action in violation of this subsection (i) shall be
void.
(j) Employment
Taxes. All
payments made pursuant to this Agreement will be subject to withholding of
applicable income and employment taxes.
(k) 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 Executive.
(l) ADVICE
OF COUNSEL. EXECUTIVE ACKNOWLEDGES THAT,
IN EXECUTING THIS AGREEMENT, HE HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL
COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS
AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY
REASON OF THE DRAFTING OR PREPARATION HEREOF.
[Signature
Page Follows]
12
The
parties have executed this Agreement as of the date first written
above.
| ARTHROCARE CORPORATION | |||
|
|
By:
|
/s/ Xxxxx Xxxxxxxxxx | |
| Xxxxx Xxxxxxxxxx | |||
| Title: | Acting Chief Executive Officer | ||
| Address: |
0000
Xxxxxx Xxxxxxxxx
Xxxxxxxx
Xxx, Xxxxx 000
Xxxxxx,
XX 00000
|
||
| XXXX XXXXXX | |||
|
|
Signature:
|
/s/ Xxxx Xxxxxx | |
| Address: | |||
|
000
Xxxxxxxxx Xxx
Xxx
Xxxxxxx, Xxxxx 00000
|
|||
13
