Consulting Agreement
Exhibit 10.2
THIS CONSULTING AGREEMENT (this “Agreement”) is made and entered into effective as of August
15, 2005, by and between THORATEC CORPORATION, a California corporation (the “Company”), and D.
Xxxxx Xxxxxxxx (“Executive” and, together with the Company, the “Parties”).
RECITALS
A. WHEREAS, Executive is currently Chief Executive Officer of the Company;
B. WHEREAS, Executive desires to transition out of his employment with the Company so that he
may pursue other interests and opportunities; and
C. WHEREAS, the Company wishes to engage Executive as a consultant for a period following the
termination of his employment with the Company in order to enable the new Chief Executive Officer
to fully run the Company following the termination of Executive’s employment, and Executive desires
to enter into a consulting relationship with the Company.
NOW, THEREFORE, in consideration of the foregoing premises and for the purposes hereinafter
set forth and for other good and valuable consideration, the adequacy and receipt of which are
hereby acknowledged, the Parties hereto agree as follows:
AGREEMENT
1. Consulting Relationship. Executive agrees that, for a period of nine (9) months
following the date on which his employment with the Company terminates (the “Separation Date”),
Executive will serve as a consultant to the Company so that the Company may continue to benefit
from Executive’s experience and knowledge of the Company’s operations (the “Consulting Period”).
The Company agrees to retain Executive as a consultant during the Consulting Period on the terms
set forth herein.
2. Services, Term and Compensation. During the Consulting Period, Executive shall
assist the new Chief Executive Officer as requested by him or her to enable the new Chief Executive
Officer to fully run the Company after the Separation Date. Executive shall be available to
provide consultation to the Chief Executive Officer and the Company’s Board of Directors at
mutually-convenient times for no more than ten (10) hours per month. As consideration for such
consulting services, Executive shall receive payment for his services hereunder of Five Thousand
Dollars ($5,000) per month, payable at the end of each month, during the Consulting Period. With
respect to any stock options granted to Executive by the Company, the Parties agree that
Executive’s service as a consultant hereunder constitutes “employment” for purposes of Section
6.1.7 of the Company’s 1997 Stock Option Plan.
3. Competitive Activities. Executive expressly acknowledges that, during the
Consulting Period, he will continue to have access to the Company’s trade secrets and other
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confidential and sensitive information proprietary to the Company. Executive agrees that during
the Consulting Period, Executive shall not advise, consult, accept employment with, or render
services to, directly or indirectly, any “Company Competitor”, as defined below, whether as a
partner, employee, shareholder, consultant or otherwise, nor shall Executive promote, participate
or engage in any activity on behalf of a Company Competitor (“Competitive Activities”). For
purposes of this Agreement, “Company Competitor” shall be defined as any company or operating
division of a company that is either developing or marketing a device or devices for mechanical
circulatory support in congestive heart failure patients, designed to compete with any of
Thoratec’s devices in the bridge-to-transplant, destination therapy or postcardiotomy recovery
markets.
During the Consulting Period, Executive may accept employment or become otherwise involved with any
company other than a Company Competitor.
In the event Executive fails to complete the consulting engagement by engaging in Competitive
Activities in violation of this Agreement, the Company will have the right to terminate the
consulting engagement and shall have no further obligation to pay Executive any amount pursuant to
Section 2, except as otherwise required by law.
4. Termination of Consulting Relationship. By their mutual written agreement, or upon
notice of one party to the other of a breach of this Consulting Agreement, the Company and
Executive may end the consulting relationship described herein at any time prior to the end of the
Consulting Period.
5. Conflict of Interest. Executive hereby represents and warrants to the Company that
(a) he is not obligated under any other employment, consulting, or other agreement which would
affect the Company’s rights, or Executive’s duties, under this Agreement and (b) this Agreement is
not in conflict with Executive’s commitments to any entity or person.
6. Board of Directors. The Company’s Board of Directors shall use its best efforts,
subject to the provisions of the Company’s by-laws, to nominate Executive as a director of the
Company during the Consulting Period; provided, however, that if Executive engages in Competitive
Activities in violation of this Agreement, and in any event upon the termination of the consulting
relationship for any reason, Executive agrees to resign from the Board immediately when requested
to do so by the Company. During the Consulting Period and thereafter, Executive shall be
compensated for his Company Board of Director service in the same manner that other non-employee
directors are compensated for such service, with the exception that Employee will not be entitled
to the grant for initial election or appointment provided to new Company Directors under the 1996
Nonemployee Directors Stock Option Plan of Thoratec Corporation.
7. Confidentiality.
7.1 Protection of Information. Executive shall not, without the prior written consent of the
Company, divulge to unauthorized persons, or use for any unauthorized purpose, either during or
after the Consulting Period, any Confidential Information (as defined in Section
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7.3 hereof).
Executive shall use his best efforts and exercise due diligence to protect and guard Confidential
Information within his possession and/or under his direct or indirect control.
7.2 Records. Except as set forth in the Parties’ Amended and Restated Employment Agreement
dated as of August 15, 2005 (the “Amended Agreement”), all notes, memoranda, reports, drawings,
manuals, materials, data and any papers or records of every kind, and any computers or wireless
communications devices, which are now in Executive’s possession owned by the Company or developed
or generated by Executive in the course of his providing consulting services under this Agreement
that contain Confidential Information shall be the sole and exclusive property of the Company.
Other than any property described in Section 3.2 of the Amended Agreement, this property shall be
surrendered to the Company upon termination of this Agreement or upon request by the Company at any
time either during or after the termination of the Consulting Period, and no copies, notes, or
excerpts thereof shall be retained by Executive.
7.3 Confidential Information. For purposes of this Agreement, “Confidential Information”
shall mean information as set forth below disclosed to Executive or known to Executive as a
consequence of or through performance of services for the Company and its subsidiaries or
affiliates, whether or not related to his duties as a consultant to the Company, whether or not in
his capacity as a consultant or director. Such information shall include trade secrets or any
other like information of value relating to the business, including actual research and
development, of the Company or of any corporation, limited liability company, firm or partnership
or other business enterprise directly or indirectly controlled by or controlling the Company or in
which the Company or any of its affiliates has more than a twenty percent (20%) ownership interest
for which Executive renders services. Information shall be considered, for purposes of this
Agreement, to be confidential if not known publicly, even though such information has been
disclosed to one or more third parties pursuant to distribution agreements, or other agreements
entered into by the Company or any of its affiliates. For purposes of this Agreement, information
shall not be considered confidential to the extent that such information is or becomes, through no
fault of Executive, part of the public domain, such information is independently known to
Executive, or such information is lawfully furnished to Executive by a third party without
restriction on disclosure.
7.4 Continuing Obligations. Executive acknowledges that Executive’s obligations with respect
to Confidential Information as set forth in this Section 7 are continuing and will survive the
termination of this Agreement and the termination of Executive’s consulting relationship with the
Company.
8. Injunctive Relief. The parties hereto agree that damages would be an inadequate
remedy for the Company in the event of a breach or threatened breach of Section 7 of this Agreement
by Executive and, in the event of any such breach or threatened breach, the Company may, either
with or without pursuing any potential damage remedies, obtain and enforce an injunction
prohibiting Executive from violating this Agreement and requiring Executive to comply with the
terms of this Agreement. The parties hereby agree to submit to the jurisdiction of the courts of
the State of California and the Federal courts of the United States of America located within the
County of Alameda in the State of California for any action to seek equitable relief.
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9. Binding Effect. This Agreement shall constitute the respective legal, valid and
binding obligation of Executive and the Company in accordance with its terms, and shall inure to
the benefit of and be binding upon the Company and Executive and their respective successors
and assigns, and Executive’s heirs, executors and administrators.
10. Notice. Any notice required or permitted hereunder shall be in writing and shall
be given by personal delivery, facsimile or Unites States mail, certified or registered with return
receipt requested, postage prepaid, and shall be deemed to have been duly given three (3) days
after the mailing or on the date of service if delivered personally or the first day after
transmission if sent by facsimile to the other party at the following addresses, or such other
address as one party may from time to time give the other in writing:
| If to the Company: | Thoratec Corporation | |||
| Attention: General Counsel | ||||
| 0000 Xxxxxxxxxx Xxxxx | ||||
| Xxxxxxxxxx, XX 00000 | ||||
| Fax: (000) 000-0000 | ||||
| If to Executive: | D. Xxxxx Xxxxxxxx | |||
| c/o 0000 Xxxxxxxxxx Xxxxx | ||||
| Xxxxxxxxxx, XX 00000 | ||||
| Fax: (000) 000-0000 |
11. Captions. The captions to Sections of this Agreement have been inserted for
identification and reference purposes and shall not by themselves determine the construction or
interpretation of this Agreement.
12. Counterparts. This Agreement may be executed by facsimile and in counterparts,
each of which shall be deemed an original, but both of which together shall constitute one and the
same instrument.
13. Governing Law. This Agreement shall be construed and enforced in accordance with
the laws of the State of California without regard to principles of conflict of laws.
14. Entire Agreement, Modification, Costs. This Agreement constitutes the complete,
final and exclusive embodiment of the entire agreement between Executive and the Company with
regard to the subject matter hereof. It is entered into without reliance on any promise or
representation, written or oral, other than those expressly contained herein, and it supersedes any
other such promises, warranties or representations. This Agreement may not be modified or amended
except in a writing signed by Executive and a duly authorized officer of the Company. If any
provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this
determination will not affect any other provision of this Agreement and the provision in question
will be modified by the court so as to be rendered enforceable. The Company shall reimburse
Executive for his costs, expenses, and reasonable attorneys’ fees incurred in negotiating and
finalizing this Agreement.
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15. Dispute Resolution and Binding Arbitration. If there is any dispute arising out
of or related to interpretation or enforcement of this Agreement which cannot be settled by good
faith negotiation between the parties, such dispute will be submitted to JAMS for non-binding
mediation, and the Company shall be responsible for paying the mediator’s fees. If complete
agreement cannot be reached within forty-five (45) days of submission to mediation, any remaining
issues in dispute will be submitted to JAMS for final and binding arbitration pursuant to JAMS
Arbitration Rules and Procedures for Employment Disputes. Notwithstanding any provisions to the
contrary found in such procedures, in the event of final and binding arbitration pursuant to this
paragraph, except for the arbitrator’s fees which the Company shall be responsible for paying, each
party will be responsible for paying its own costs and attorneys’ fees in connection with the
arbitration. The arbitrator shall not be authorized to award the prevailing party costs and
attorneys’ fees, except as expressly provided by statute. The dispute resolution provision of this
Section 15 is without prejudice to the Company’s right to seek injunctive relief in a court of law
for a breach by Executive of Section 7 hereof as provided in Section 8 of this Agreement.
REMANDER OF PAGE INTENTIONALLY BLANK
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Signature Page to Consulting Agreement
dated as of August 15, 2005
dated as of August 15, 2005
| THORATEC CORPORATION |
||||
| By: | /s/ J. Xxxxxx Xxxx | |||
| J. Xxxxxx Xxxx | ||||
| Chairman of the Board | ||||
| AGREED: |
||||
| By: | /s/ D. Xxxxx Xxxxxxxx | |||
| D. Xxxxx Xxxxxxxx | ||||
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