Exhibit 10.09
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") dated as of April 11, 2006, by
and between HeartWare, Inc., a Delaware corporation (the "Company"), having its
principal offices at 0000 Xxxxxxxxx Xxx, Xxxxxxx, Xxxxxxx 00000-0000, and Xxxxxx
Xxxx (the "Executive"), an individual with an address at 0000 XX 0xx Xxxxxx,
Xxxx Xxxxxxxxxx, Xxxxxxx 00000-0000.
RECITALS
A. WHEREAS, the Company wishes to hire Executive to serve as its Chief
Operating Officer; and
B. Executive agrees to be so employed upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, the parties, intending to be legally bound and in
consideration of the agreements and covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, agree as follows:
1. Employment, Duties and Acceptance.
(a) The Company employs the Executive to render exclusive and
full-time services as the Chief Executive Officer of the Company and, in
connection therewith, to perform such duties as are customarily assigned to
individuals serving in such positions and such other duties as the
Executive shall reasonably be directed to perform by the [President] of the
Company. Executive shall report directly to the President of the Company.
The Executive's employment shall commence on April 17, 2006 (the actual
date employment commences being referred to herein as the "Commencement
Date").
(b) The Executive accepts such employment and shall render the
services referred to above. The Executive shall devote his full working
time and energies (excluding periods of vacation and sick leave to which he
is entitled) to the business and affairs of the Company and agrees to use
his best efforts, skills and abilities to promote the Company's interests.
Notwithstanding the foregoing, the Executive may devote such reasonable
time as may be necessary, to the extent that it does not interfere with the
performance of his duties and responsibilities hereunder, to (i)
participate in charitable, civic, educational, professional or community
affairs or serve on the board of directors or advisory committees of
non-profit entities; and (ii) manage his private investments. The Executive
shall not serve on the board of directors or advisory committees of for
profit entities or engage in any consulting activity without the prior
written consent of the Board of Directors of the Company (the "Board").
Except as set out in Schedule A on _______.
2. Compensation and Benefits. Subject to the Executive's adherence to all
of his responsibilities under this Agreement and all other agreements with the
Company, the Executive shall be entitled to receive the following compensation
and benefits during his employment with the Company:
(a) As compensation for all services to be rendered to the Company by
the Executive, the Company shall pay the Executive a base salary at a rate
of $205,000.00 per annum (the "Base Salary"). The Base Salary shall be
reviewed by the Company at least annually. The Base Salary shall not be
subject to reduction without the consent of the Executive, except that if
the Board reduces the salary of all senior managers of the Company, the
Base Salary shall be reduced by the same percentage as the percentage
reduction in salary of such senior managers.
(b) The Executive shall also be eligible to receive an annual bonus,
targeted at 25% of the Base Salary, based on the attainment of objective
performance goals and other criteria, as determined by the Board in
consultation with you, and approved by the Compensation Committee of
HeartWare Limited, the Company's parent company (the "Parent").
(c) All such compensation shall be payable in accordance with the
payroll and bonus policies of the Company as from time to time in effect,
less such deductions as shall be required to be withheld by applicable law
and regulations.
(d) The Executive shall be permitted during his employment, if and to
the extent eligible, to participate in all group insurance programs and
other fringe benefit plans that the Company shall make available to its
executive employees.
(e) The Executive shall be entitled to twenty (20) days of vacation
annually.
(f) Subject to such policies as may from time to time be established
by the Company, the Company shall pay or reimburse the Executive for all
reasonable and necessary expenses actually incurred or paid by the
Executive in the course of performing his duties hereunder upon
presentation of expense statements or vouchers or such other supporting
information as the Company may require.
3. Equity Grants.
(a) The Board shall recommend to the Parent that the Executive be
granted options to purchase 1,000,000 ordinary shares of the Parent (the
"Option Shares"), at an exercise price equal to the be the five day
weighted average price for the shares as traded on the Australian Stock
Exchange plus AUD0.10, on the day the shares are issued of the Parent's
ordinary shares on the Australian Stock Exchange on the Commencement Date.
The Option Shares shall vest as follows: (i) 25% of the Option Shares shall
vest on the first anniversary of the Commencement Date, (ii) 25% of the
Option Shares shall vest on the second anniversary of the Commencement
Date, (iii) 25% of the Option Shares shall vest on the third anniversary of
the Commencement Date, and (iv) 25% of the Option Shares shall vest on the
fourth anniversary of the Commencement Date, in each case subject to the
Executive's continued employment with the Company through each vesting
date.
(b) If, within the twelve (12) month period following any Change of
Control Transaction (as defined below), the Company (or its successor in
interest) terminates the Executive other than for Cause, or the Executive
terminates his employment for Good
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Reason, twelve (12) months of vesting regarding the unvested Option Shares
that the Executive holds, on the date of and immediately prior to the
consummation of such Change of Control Transaction, shall accelerate and
become immediately exercisable. For purposes of this Agreement, "Change in
Control Transaction" means the occurrence in a single transaction or in a
series of related transactions of any one or more of the following events:
1. any person (within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended) becomes the owner,
directly or indirectly, of securities of the Company representing more
than fifty percent (50%) of the combined voting power of the Company's
then outstanding securities other than by virtue of a merger,
consolidation or similar transaction;
2. there is consummated a merger, consolidation or similar transaction
involving (directly or indirectly) the Company and, immediately after
the consummation of such merger, consolidation or similar transaction,
the stockholders of the Company immediately prior thereto do not own,
directly or indirectly, outstanding voting securities representing
more than fifty percent (50%) of the combined outstanding voting power
of the surviving entity in such merger, consolidation or similar
transaction or more than fifty percent (50%) of the combined
outstanding voting power of the parent of the surviving entity in such
merger, consolidation or similar transaction, provided, however, that
any merger, consolidation or similar transaction undertaken by the
Company in connection with or in contemplation of a Public Offering
shall not be deemed a Change in Control Transaction hereunder; or
3. there is consummated a sale, lease, exclusive license or other
disposition of all or substantially all of the consolidated assets of
the Company and its subsidiaries, other than a sale, lease, license or
other disposition of all or substantially all of the consolidated
assets of the Company and its subsidiaries to an entity, more than
fifty percent (50%) of the combined voting power of the voting
securities of which are owned by stockholders of the Company in
substantially the same proportions as their ownership of the Company
immediately prior to such sale, lease, license or other disposition.
4. Employment at Will.
(a) This Agreement describes the compensation and benefits that the
Executive is entitled to receive for so long as he remains employed by the
Company, but is not a guarantee of employment for any particular period of
time. At all times the Executive will remain an employee at will, and he
and the Company are free to terminate his employment at any time for any
reason. Except as otherwise set forth in this Section 4, should the
Executive's employment with the Company terminate for any reason, he shall
be entitled to receive only the pro rata portion of his Base Salary through
the date of such termination, together with such other compensation or
benefits to which the Executive may be entitled by law or under the terms
of the Company's compensation and benefit plans then in effect.
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(b) If (i) the Company terminates the Executive's employment other
than for "Cause" (as hereinafter defined) or (ii) the Executive terminates
his employment for "Good Reason" (as hereinafter defined), all of the
Executive's compensation and benefits (except as otherwise provided in the
Company's benefit plans) shall terminate on the date of termination of his
employment, and subject to the Executive executing and delivering to the
Company a general release and waiver (in a form reasonably satisfactory to
the Company) of all claims against the Company, the Parent, any
subsidiaries and their respective shareholders, officers and directors (the
"Release") and subject to the Executive's compliance with the terms and
conditions contained in this Agreement and the Proprietary Information
Agreement, the Company shall pay to the Executive severance compensation
for six (6) months following the termination of his employment at a rate
per annum equal to his annualized Base Salary as of the date of
termination, minus withholdings as required by law or as authorized by the
Executive, such severance compensation to be payable monthly or more
frequently in accordance with the payroll policies of the Company for
members of the management team as in effect from time to time.
(c) As used in this Section 4, the following terms shall mean:
1. "Cause" shall mean any of (A) a material breach by the Executive of
his obligations under this Agreement or any other written agreement
between the Executive and the Company, including the Proprietary
Information Agreement (as defined in Section 5 below); (B) the willful
neglect by the Executive of the duties he is expected to perform
hereunder; (C) the commission by the Executive of an act of fraud,
misrepresentation, embezzlement, theft or other act of moral
turpitude; (D) conviction of, or the Executive's written admission to,
a felony, or (E) any willful misconduct or any willful act or omission
that is materially injurious to the financial condition or business
reputation of the Company; provided, however, that in the event of a
potential termination for any Cause specified in clauses (A), (B) or
(E) above, such termination shall not be effective unless the
Executive shall have received notice from the Company setting forth in
reasonable detail the basis of the proposed termination and the
Executive shall have been provided a period of ten (10) business days
from receipt of such notice to cure or correct the conduct (if it is
susceptible of cure or correction) giving rise to such potential
termination.
2. "Termination For Good Reason" shall mean a termination by the
Executive, upon thirty (30) days' prior written notice to the Company
(the "Termination Notice") stating in reasonable detail the basis for
his termination as a result of (1) the Executive's duties and/or
responsibilities being so materially diminished that they are no
longer consistent with the duties and/or responsibilities of the Chief
Executive Officer of the Company or (2) a substantial reduction of the
Executive's salary (regardless of whether such change in title, duties
or responsibilities results from a merger, change of control of the
Company, action by the Board or otherwise); provided, however, that
if, during such thirty (30) day period, the Company restores the
Executive's title or duties and responsibilities to the level required
by this Section 4(c)(2), then the Executive's Termination Notice
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shall not be effective; and provided, further that it shall be a
condition to the effectiveness of a termination for Good Reason that
the Company receive a Termination Notice from the Executive with the
time frame set forth above.
5. Proprietary Information Agreement. Concurrently with the execution and
delivery of this Agreement, the Executive shall execute and deliver to the
Company a copy of its standard form of Proprietary Information, Confidentiality
and Inventions Assignment Agreement, in the form attached hereto as Exhibit A
(the "Proprietary Information Agreement").
6. Non-Disparagement. The Executive agrees not to take any action or make
any statement, written or oral, that disparages the Company or the Parent or any
of their respective shareholders, directors, officers, employees or agents, or
that has the intended or foreseeable effect of harming the reputation of the
Company or the Parent or the personal or business reputation of any of the
directors, officers, employees or agents of the Company or the Parent.
7. Representations and Warranties of the Executive. The Executive
represents and warrants to the Company that he has the legal right to enter into
this Agreement and the Proprietary Information Agreement and to perform all of
the obligations on his part to be performed hereunder and thereunder in
accordance with their respective terms, and that he is not a party to any
agreement or understanding, written or oral, that could prevent him from
entering into this Agreement or the Proprietary Information Agreement or
performing all of his obligations hereunder and thereunder.
8. General Provisions.
(a) Severability. The invalidity or unenforceability of any provision
of this Agreement shall in no way affect the validity or enforceability of
any other provisions or any part hereof.
(b) Interpretation. The singular includes the plural, and the plural
includes the singular. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
"herein", "hereof", "hereunder" and words of like import shall refer to
this Agreement as a whole and not to any particular section or subdivision
of this Agreement.
(c) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Florida without regard
to conflict of laws rules.
(d) Dispute Resolution. Any claim or controversy arising out of or
relating to this Agreement shall be settled by arbitration administered by
JAMS/ENDISPUTE under its Streamlined Arbitration Rules & Procedures
(located at xxxx://xxx.xxxxxxx.xxx/xxxxx/xxxxxxxxxxx.xxx#Xxxx0) (the
"Rules"). An arbitration may be initiated by either party by sending a
written demand for arbitration to the other party, specifying in reasonable
detail the matter in dispute and requesting the appointment of an
arbitrator, who shall be selected by the parties or, if they are unable to
agree on such selection within 10 days after commencement of the
arbitration, shall be made in accordance with the Rules. The situs of the
arbitration will be Miami, Florida. Any
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judgment reached by the arbitrator shall be final and binding on the
Company and the Executive, and may be entered in any court of competent
jurisdiction.
(e) Enforcement. The Executive recognizes and agrees that enforcement
of this Agreement and the Proprietary Information Agreement is necessary to
ensure the preservation, protection and continuity of the business,
confidential and proprietary information and goodwill of the Company, and
accordingly agrees that the covenants, agreements and restrictions set
forth herein are reasonable as to time and scope. The Executive also
acknowledges and agrees that any actual or threatened breach by the
Executive of this Agreement would result in irreparable damage to the
Company and that money damages would not provide an adequate remedy to the
Company. Accordingly, the Executive agrees that in the event of any such
breach, the Company shall have, in addition to any and all remedies of law,
the right to have the provisions of this Agreement and the Proprietary
Information Agreement specifically enforced and to obtain injunctive and
other equitable relief to enforce the provisions of this Agreement. Each of
the undertakings of the Executive set forth in this Agreement shall be
construed as independent covenants and the existence of any claim or cause
of action by the Executive against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of the restrictions imposed on the Executive by, and the
undertakings of the Executive set forth in, this Agreement.
(f) Entire Agreement; No Representations. This Agreement constitutes
the entire agreement between the Executive and the Company concerning the
terms and conditions of the Executive's employment with the Company and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, between the
Executive and the Company.
(g) Consultation with Counsel; No Representations. The Executive
acknowledges and agrees that he has had a full and complete opportunity to
consult with counsel of his own choosing concerning the terms,
enforceability and implications of this Agreement, and that the Company has
not made any warranties, representations or promises to the Executive
regarding the meaning or implication of any provision of this Agreement,
other than as stated herein or therein.
(h) Modification; Waiver. This Agreement may be amended or modified
only by a written instrument signed by the Executive and the Company. The
failure of either party at any time to require the performance of any
provision of this Agreement shall in no manner affect the right of such
party at a later time to enforce the same provision.
(i) Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
heirs, legal representatives, successors and assigns and to the benefit of
the Company's directors, officers, employees and agents, provided that the
Executive may not assign this Agreement or any of his rights hereunder to
any other person.
(j) Notices. All notices and other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given
when
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delivered in person (including by any commercial courier service) or five
(5) days after mailing by United States certified or registered mail,
return receipt requested, postage prepaid, to a party at his or its address
set forth at the beginning of this Agreement or such other address as
either party may furnish to the other by notice in writing, except that
notices of change of address shall be effective only upon receipt.
(k) Counterparts. This Agreement may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an
original and all of which together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
EXECUTIVE:
/s/ Xxxxxx Xxxx
----------------------------------------
Xxxxxx Xxxx
COMPANY:
HEARTWARE, INC.
By: /s/ Xxxxxx XxXxxxxxx
------------------------------------
President and CEO
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