SEPARATION AGREEMENT
EXHIBIT 10
THIS SEPARATION AGREEMENT (this “Agreement”) is made and entered into as of May 31, 2007 by
and between Xxxxx X. Xxxxxx (the “Executive”), and Arrow International, Inc., a Pennsylvania
corporation, having its principal offices at 0000 Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx 00000 (the
“Company”).
WITNESSTH:
WHEREAS, the Executive had been engaged by the Company as the Company’s Senior Vice President
of Manufacturing; and
WHEREAS, the Company has terminated the Executive’s employment.
WHEREAS, the Executive and the Company desire to settle fully and finally all matters between
them to date, including, but in no way limited to, any issues that might arise out of the
Executive’s employment or the termination of his employment by the Company;
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the
parties hereto, intending to be legally bound hereby, agree as follows:
1. Termination of Employment. The Executive ceased to be the Company’s Senior Vice
President of Manufacturing as of May 31, 2007 (the “Termination Date”) and ceased all other
positions and associations of any kind with the Company and its subsidiaries and affiliates.
2. Severance Benefits. Subject to the terms of this Agreement, and contingent upon
execution and effectiveness of the general release attached hereto as Exhibit A, the Company shall
pay or provide to the Executive the following benefits:
(a) Severance Pay. Equal payments of $21,676 (each, a “Severance Payment”) paid on a
monthly basis for 24 months following the Termination Date (the “Severance Period”), commencing
with the first day of the month following the Termination Date. For the purposes of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), each such monthly payment
shall be considered a separate payment. Notwithstanding the foregoing, if the Executive is
employed by any entity or person (other than self-employment or employment for an entity in which
the Executive owns more than 50% of the voting interests in such entity) (a “Subsequent Employer”),
then the Severance Payment made on the first of a month shall be reduced on a dollar for dollar
basis for all compensation paid by the Subsequent Employer to the Executive in the month prior to
the month in which the Severance Payment is made.
(b) Equity. The Executive will become fully vested in all outstanding, unvested stock
options granted to the Executive by the Company (the “Options”), such Options will remain
exercisable in accordance with the terms of the applicable company plan or option agreement under
which such Options were granted.
(c) Medical. The Executive and the Executive’s spouse will receive continuation of
medical benefits in effect as of the Termination Date (or such benefits as the Company or its
successor may subsequently provide from time to time to the senior executives of the Company) at
the Company’s (or its successor’s) sole expense until the earliest of (i) the date on which the
Executive attains age 65, (ii) the date on which the Executive becomes eligible for medical
benefits under a group health plan of any employer or (iii) the date on which the Executive dies.
Additionally, solely with respect to continuation of medical benefits for the Executive’s spouse,
such coverage shall immediately cease on the date on which the Executive’s spouse attains age 65,
if earlier than any date so provided in the foregoing sentence. Any claims for reimbursement of a
proper medical expense shall be paid as soon as administratively feasible following the proper
submission of such expense; provided however, that all such claims must be submitted and paid by
the end of the year following the year in which such expense is incurred.
(d) Restrictive Covenants. Additionally, the payments and benefits contained in
Section 2 shall be contingent upon the Executive’s compliance with the restrictive covenants
contained in this Agreement.
3. Confidential Information and Non-Disparagement.
(a) Confidential Information. The Executive shall not, without the prior express
written consent of the Company, directly or indirectly divulge, disclose or make available or
accessible any Confidential Information (as defined below) to any person, firm, partnership,
corporation, trust or any other entity or third party (other than when required to do so by a
lawful order of a court of competent jurisdiction, any governmental authority or agency, or any
recognized subpoena power). In addition, the Executive shall not create any derivative work or
other product based on or resulting from any Confidential Information (except in the good faith
performance of his duties under this Agreement). The Executive shall also proffer to the designee
of the Board of Directors of the Company (the “Board”), no later than the Termination Date, and
without retaining any copies, notes or excerpts thereof, all memoranda, computer disks or other
media, computer programs, diaries, notes, records, data, customer or client lists, marketing plans
and strategies, and any other documents consisting of or containing Confidential Information that
are in the Executive’s actual or constructive possession or which are subject to his control at
such time. For purposes of this Agreement, “Confidential Information” shall mean all information
respecting the business and activities of the Company, or any affiliate of the Company, including,
without limitation, the clients, customers, suppliers, employees, consultants, computer or other
files, projects, products, computer disks or other media, computer hardware or computer software
programs, marketing plans, financial information, methodologies, know-how, processes, practices,
approaches, projections, forecasts, formats, systems, data gathering methods and/or strategies of
the Company or any affiliate. Notwithstanding the immediately preceding sentence, Confidential
Information shall not include any information that is, or becomes, generally available to the
public (unless such availability occurs as a result of the Executive’s breach of any portion of
this Section 3(a) or any information or knowledge possessed by the Executive other than by reason
of his employment by the Company).
(b) Non-disparagement. The Executive shall not, directly or indirectly, make or
publish any disparaging statements (whether written or oral) regarding the Company or any of
its affiliated companies or businesses, or the affiliates, directors, officers, agents,
principal stockholders or customers of any of them.
4. Announcement. The parties agree that any announcement by the Executive with
respect to the termination of the Executive’s employment will be disclosed to the Company prior to
its issuance or publication and will not be announced, issued or otherwise published until and
unless the Company consents in writing to the content of such announcement.
5. Standstill Restrictions. The Executive agrees that until one year from the date of
this Agreement (the “Restricted Period”), neither the Executive nor any of the Executive’s
affiliates or representatives will, in any manner, directly or indirectly, unless requested by the
Board (i) acquire or make any proposal to acquire any securities, or rights or options to acquire
securities, or property of the Company, (ii) propose to enter into any merger or business
combination involving the Company or purchase a material portion of the assets of the Company,
(iii) make or participate in any solicitation of proxies to vote, or seek to advise or influence
any person with respect to the voting of any securities of the Company, (iv) form, join or
participate in a “group” (within the meaning of Section 13(d)(3) of the Securities Exchange Act of
1934) with respect to any voting securities of the Company, (v) otherwise act or seek to control or
influence the management, Board or policies of the Company, (vi) disclose any intention, plan or
arrangement inconsistent with the foregoing, (vii) take any action which might require the Company
to make a public announcement regarding the possibility of a business combination or merger or
(viii) advise, assist or encourage or direct any person to advise, assist or encourage any other
persons in connection with the foregoing. The Executive also agrees during the Restricted Period
not to request the Company (or its directors, officers, employees, agents or representatives) to
amend or waive any provision of this Section 5 unless specifically invited to do so by the Board.
6. Non-Compete and Non-Solicitation.
(a) Non-Competition. The Executive shall not, during the Restricted Period, directly
or indirectly, within or with respect to any country where the Company does business as of the
Termination Date, (1) engage, without the prior express written consent of the Company, in any
business or activity, whether as an employee, consultant, partner, principal, agent,
representative, director, stockholder or in any other individual, corporate or representative
capacity, or render any services or provide any advice to any business, activity, service, person
or entity, if such business, activity, service, person or entity, directly or indirectly, competes
in any material manner with (A) the Company, (B) any subsidiary or affiliate of the Company, or (C)
any product, service or other business of any such entities which is in production, distribution or
development as of the Termination Date, including without limitation, rendering advice or other
services to or in respect of the development, manufacture or marketing of catheters and/or other
medical products used in critical and/or cardiac care, and/or (2) meaningfully assist, help or
otherwise support, without the prior express written consent of the Company, any person, business,
corporation, partnership or other entity or activity, whether as an employee, consultant, partner,
principal, agent, representative, director, stockholder or in any other individual, corporate or
representative capacity, to create, commence or otherwise initiate, or to develop, enhance or
otherwise further, any business or activity if such business or activity,
directly or indirectly, competes (or is reasonably likely to compete) in any manner with any
significant business or activity of the Company or any subsidiary or affiliate of the Company,
including without limitation, rendering advice or other services to or in respect of the
development, manufacture or marketing of catheters and/or other medical products used in critical
and/or cardiac care. Notwithstanding the foregoing, the Executive shall not be prohibited during
the Restricted Period from being a passive investor where the Executive owns not more than five
percent (5%) of the outstanding capital stock of any publicly-held company.
(b) Non-Solicitation. The Executive shall not, directly or indirectly, during the
Restricted Period or, if later, during the period in which the Executive is receiving any severance
benefits under Section 2 above, including without limitation any medical benefits provided under
Section 2(c), (1) take any action to solicit or divert any business (or potential business) or
clients or customers away from the Company or any subsidiary or affiliate of the Company, (2)
induce customers, clients, business partners, suppliers, agents or other persons under contract or
otherwise associated or doing business with the Company or any subsidiary or affiliate of the
Company to terminate, reduce or alter any such association or business with or from the Company or
any subsidiary or affiliate, and/or (3) induce any person in the employment of the Company or any
subsidiary or affiliate of the Company or any consultant to the Company or any subsidiary or
affiliate of the Company to (A) terminate such employment, or consulting arrangement, (B) accept
employment, or enter into any consulting arrangement, with anyone other than the Company or any
subsidiary or affiliate, and/or (C) interfere with the customers, suppliers, or clients of the
Company, any subsidiary or affiliate of the Company in any manner or the business of the Company,
any subsidiary, or any affiliate in any manner. For purposes of this Section 6(b), “potential
business” shall mean any current or reasonably foreseeable commercial activity or any current or
reasonably foreseeable commercial opportunities associated in any way with the Company’s
activities.
7. Scope of Agreement Enforceability. This Agreement constitutes the entire
understanding and agreement between the Company and the Executive with regard to all matters herein
and supersedes all prior oral and written agreements and understandings of the parties with respect
to such matters, whether express or implied. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s heirs, beneficiaries and/or legal representatives. This Agreement
shall inure to the benefit of and be enforceable by the Company and its respective successors and
assigns. If any term or provision of this Agreement, or the application thereof to any person or
circumstances, will to any extent be invalid or unenforceable, the remainder of this Agreement, or
the application of such term or provision to persons or circumstances other than those as to which
it is invalid or unenforceable, will not be affected thereby, and each term and provision of this
Agreement will be valid and enforceable to the fullest extent permitted by law.
8. Material Inducements. The provisions of Sections 3, 4, 5 and 6 of this Agreement
are material inducements to the Company entering into and performing this Agreement. In the event
of any breach or threatened breach of the provisions of Sections 3, 4, 5 and/or 6 of this Agreement
by the Executive, in addition to all other remedies at law or in equity possessed by the Company,
the Company shall have the right to (i) terminate and not pay any amounts payable to the Executive
hereunder and (ii) cease the provision of any benefits otherwise due to the Executive hereunder
and/or (iii) require that the Executive repay any
payments received by the Executive from any Options accelerated by virtue of Section 2(b)
above. The Executive acknowledges and agrees that the Company will have no adequate remedy at law,
and would be irreparably harmed, if the Executive breaches or threatens to breach any of the
provisions of Sections 3, 4, 5 and/or 6 of this Agreement. The Executive further agrees that the
Company shall be entitled to equitable and/or injunctive relief to prevent any breach or threatened
breach of Sections 3, 4, 5 and/or 6 of this Agreement, and to specific performance of each of the
terms of such Sections in addition to any other legal or equitable remedies that the Company may
have, without any requirement to post bond or other security. The Executive also agrees that he
shall not, in any equity proceeding relating to the enforcement of the terms of this Agreement,
raise the defense that the Company has an adequate remedy at law.
9. Assistance. The Executive agrees to personally provide reasonable assistance and
cooperation to the Company in activities related to the prosecution or defense of any pending or
future lawsuits or claims involving the Company.
10. Amendments/Waiver. This Agreement may not be amended, waived, or modified
otherwise than by a written agreement executed by the parties to this Agreement or their respective
successors and legal representatives. No waiver by any party to this Agreement of any breach of
any term, provision or condition of this Agreement by the other party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same time, or any prior or subsequent time.
11. Notices. All notices and other communications hereunder shall be in writing and
shall be deemed given when received by hand-delivery to the other party, by facsimile transmission,
by overnight courier, or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive, at his residence address most recently filed with the Company;
and
If to the Company:
|
Arrow International, Inc. | |
| 0000 Xxxxxxxxx Xxxx | ||
| Xxxxxxx, Xxxxxxxxxxxx 00000 | ||
| Att: Corporate Secretary | ||
with a copy to:
|
Xxxxxxx X. Xxxxxxxxxx, Esq. | |
| Dechert LLP | ||
| 00 Xxxxxxxxxxx Xxxxx | ||
| Xxx Xxxx, Xxx Xxxx 00000 |
or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notices and communications shall be effective when actually received by the addressee.
12. Governing Law. This Agreement shall be construed and enforced in accordance with
the laws of the Commonwealth of Pennsylvania without reference to its choice
of law provisions and shall be binding upon the parties and their respective heirs, executors,
successors and assigns. Each party agrees that the state and federal courts of Pennsylvania shall
have sole and exclusive jurisdiction over the parties hereto and the subject matter herein.
Neither party to this Agreement shall contest such jurisdiction or assert that Pennsylvania is a
forum non convenience in respect of any dispute. No dispute shall be submitted for arbitration
without the express written consent of each party hereto.
13. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute one and the
same instrument.
14. Withholding. All payments hereunder shall be subject to any required withholding
of federal, state and local taxes pursuant to any applicable law or regulation.
15. Section Headings. The section headings in this Agreement are for convenience of
reference only, and they form no part of this Agreement and shall not affect its interpretation.
IN WITNESS WHEREOF, the Company and the Executive have caused this Agreement to be executed as of
the date first above written.
| ARROW INTERNATIONAL, INC. |
||||
| By: | /s/ R. Xxxxx Xxxxxxxx | |||
| Name: | R. Xxxxx Xxxxxxxx | |||
| Title: | Board of Directors Chairman | |||
| XXXXX X. XXXXXX |
||||
| /s/ Xxxxx X. Xxxxxx | ||||
| Xxxxx X. Xxxxxx | ||||
| WITNESS: |
||||
| /s/ Xxxxxxx X. Xxxxxx | ||||
| XXXXXXX X. XXXXXX, ESQ. | ||||
EXHIBIT A
Form of General Release
IN CONSIDERATION OF good and valuable consideration, the receipt of which is hereby acknowledged,
and in consideration of the terms and conditions contained in the Separation Agreement, dated as of
May 31, 2007, (the “Separation Agreement”) by and between Xxxxx X. Xxxxxx (the “Executive”) and
Arrow International, Inc. (the “Company”), the Executive on behalf of himself and his heirs,
executors, administrators, and assigns, releases and discharges the Company and its past present
and future subsidiaries, divisions, affiliates and parents, and their respective current and former
officers, directors, employees, agents, and/or owners, and their respective successors, and assigns
and any other person or entity claimed to be jointly or severally liable with the Company or any of
the aforementioned persons or entities (the “Released Parties”) from any and all manner of actions
and causes of action, suits, debts, dues, accounts, bonds, covenants, contracts, agreements,
judgments, charges, claims, and demands whatsoever (“Losses”) which the Executive and his heirs,
executors, administrators, and assigns have, had, or may hereafter have, against the Released
Parties or any of them arising out of or by reason of any cause, matter, or thing whatsoever from
the beginning of the world to the date hereof, including without limitation, any and all matters
relating to the Executive’s employment by the Company and the cessation thereof, and any and all
matters arising under any federal, state, or local statute, rule, or regulation, or principle of
contract law or common law, including but not limited to, the Family and Medical Leave Act of 1993,
as amended, 29 U.S.C. §§ 2601 et seq., Title VII of the Civil
Rights Act of 1964, as amended, 42 U.S.C. §§ 2000 et seq., the Age
Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §§ 621 et
seq. (the “ADEA”), the Americans with Disabilities Act of 1990, as amended,
42 U.S.C. §§ 12101 et seq., the Worker Adjustment and Retraining Notification Act
of 1988, as amended, 29 U.S.C. §§2101 et seq., the Employee
Retirement Income Security Act of 1974, as amended, 29 U.S.C. §§ 1001 et
seq., the Pennsylvania Human Relations Act, as amended, 43 P.S. §§ 955
et. seq., and any other equivalent or similar federal, state, or local statute;
provided, however, that the Executive does not release or discharge the Released Parties from any
of the Company’s obligations to him under: the Separation Agreement; any vested benefit the
Executive may be due under a tax qualified plan sponsored or maintained by the Company; or Losses
arising under the ADEA which arise after the date on which the Executive executes this general
release. It is understood that nothing in this general release is to be construed as an admission
on behalf of the Released Parties of any wrongdoing with respect to the Executive, any such
wrongdoing being expressly denied.
The Executive represents and warrants that he fully understands the terms of this general release,
that he has been encouraged to seek, and has sought, the benefit of advice of legal counsel, and
that he knowingly and voluntarily, of his own free will, without any duress, being fully informed,
and after due deliberation, accepts its terms and signs below as his own free act. Except as
otherwise provided herein, the Executive understands that as a result of executing this general
release, he will not have the right to assert that the Company or any other of the Released Parties
unlawfully terminated his employment or violated any of his rights in connection with his
employment or otherwise.
The Executive further represents and warrants that he has not filed, and will not initiate, or
cause to be initiated on his behalf any complaint, charge, claim, or proceeding against any of the
Released Parties before any federal, state, or local agency, court, or other body relating to any
claims barred or released in this General Release, and will not voluntarily participate in such a
proceeding. However, nothing in this general release shall preclude or prevent the Executive from
filing a claim, which challenges the validity of this general release solely with respect to the
Executive’s waiver of any Losses arising under the ADEA. The Executive shall not accept any relief
obtained on his behalf by any government agency, private party, class, or otherwise with respect to
any claims covered by this General Release.
The Executive may take twenty-one (21) days to consider whether to execute this General Release.
Upon the Executive’s execution of this general release, the Executive will have seven (7) days
after such execution in which he may revoke such execution. In the event of revocation, the
Executive must present written notice of such revocation to the office of the Company’s Corporate
Secretary. If seven (7) days pass without receipt of such notice of revocation, this General
Release shall become binding and effective on the eighth (8th) day after the execution hereof (the
“Effective Date’).
INTENDING TO BE LEGALLY BOUND, I hereby set my hand below:
Dated:
