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EXHIBIT 10.7
EMPLOYMENT AGREEMENT
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AGREEMENT dated as of September 6, 1996 by and between I-Flow
Corporation (the "Company"), having its principal address at 0000 Xxxxx Xxxx,
Xxxxxx, XX 00000 and Xxxxx X. Dal Porto ("Employee").
WHEREAS, the Company wishes to encourage Employee to continue to
render services to the Company by granting Employee certain rights upon
termination or upon a "Change in Control" as hereinafter defined,
WHEREAS, the Employee wishes to enter into this Agreement;
NOW, THEREFORE, the parties agree as follows:
1. Employment.
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The Company agrees to employ Employee and Employee agrees to serve in
such employment capacities as may be requested from time to time by the
Chief Executive Officer or the Board of Directors of the Company.
Employee hereby accepts such employment upon the terms and conditions
set forth herein. Nothing in this Agreement is intended to create and
should not be interpreted to create an employment contract for any
specified length of time between Company and Employee.
2. Termination of Employment.
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Employee's employment may be terminated at any time, without cause, by
either party upon sixty days written notice. Employee's employment may
be terminated at any time for cause, without notice. For purposes of
this Agreement, cause shall be defined to include but shall not be
limited to dishonesty, nonperformance of duties, immoral conduct
detrimental to the Company, conviction of a felony, or unfaithfulness
or a failure to act or not act in accordance with the direction of the
Company.
3. Severance Pay.
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(a) Termination of Employment for Cause. In the event Employee's
employment by Company is terminated for cause, or Employee
voluntarily resigns, Company shall have no obligations to pay any
severance pay to Employee.
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(b) Termination for Reasons Other than Cause. The Employee shall
be entitled to a severance package consisting of (i) a one time
payment equal to one year of his base salary at the time of
termination and (ii) immediate vesting of all Stock Options
granted up to the time of termination, with the exercise period
being no less than one year from the date of termination. To
receive this severance package one of the following must be
true:
(1) The Employee is terminated without cause.
(2) The Employee is asked to accept a significant change in
job responsibility that is clearly a demotion.
(3) The Employee is asked to relocate in order to remain
employed.
(4) The Employee is asked to accept a reduction in salary
and/or benefits.
4. Change in Control.
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(a) In the event of a Change in Control as hereinafter defined, all
of Employee's Stock Options shall immediately vest and becomes
fully exercisable and the exercise period remaining shall be no
less than one year from the date of Change in Control.
(b) In the event of a Change in Control as hereinafter defined,
all of Employee's Sock Options shall immediately vest and
become fully exercisable and the exercise period remaining
shall be no less than one year from the date of Change in
Control.
(b) "Change in Control" shall mean the occurrence of any of the
following: (i) any "person" (as such term is used in Section
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") is or becomes a "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing 30%
or more of the voting power of the then outstanding securities
of the Corporation; (ii) during any period of two consecutive
calendar years there is a change of 25% or more in the
composition of the Board of Directors of the Corporation in
office at the beginning of the period except for changes
approved by at least two-thirds of the Directors then in office
who were Directors at the beginning of the period; (iii) the
stockholders of the Corporation approve an agreement providing
for (A) the merger or consolidation of the Corporation with
another corporation where the stockholders of the Corporation,
immediately after the merger or consolidation, would not
beneficially own, immediately after the merger or
consolidation, shares
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entitling such stockholders to 50% or more of all votes (without
consideration of the rights of any class of stock to elect Directors
by a separate class vote) to which all stockholders of the
corporation issuing cash or securities in the merger of
consolidation would be entitled in the election of directors or
where the members of the Board, immediately prior to the merger or
consolidation, would not, immediately after the merger or
consolidation, constitute a majority of the Board of Directors of
the corporation issuing cash or securities in the merger or
consolidation or (B) the sale or other disposition of all or
substantially all the assets of the Corporation, or a liquidation,
dissolution or statutory exchange of the Corporation; or (iv) any
person has commenced, or announced an intention to commence, a
tender offer or exchange offer for 30% or more of the voting power
of the then-outstanding securities of the Corporation.
5. Nothing herein shall be construed as requiring the Company to
continue the employment of Employee except in the circumstances
herein stated.
6. This Agreement shall be governed and construed in accordance with
the laws of the State of California.
7. This Agreement shall be binding upon successors and assigns of
the Company by merger, consolidation, purchase of assets or
otherwise.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above stated.
I-FLOW CORPORATION
By: /s/ XXXXXX X. XXXXXXX By: /s/ XXXXX X. DAL PORTO
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Xxxxxx X. Xxxxxxx Xxxxx X. Dal Porto
Chairman, President & CEO Employee
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