EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ( "Agreement") dated as of January 1, 2000,
between Palomar Medical Technologies, Inc., a Delaware corporation (the
"Company"), and Xxxxxx Xxxxxx, an individual (the "Executive"),
WITNESSETH THAT:
WHEREAS, the Company desires to employ Executive as its Chief Financial
Officer for the period and upon and subject to the terms herein provided; and
WHEREAS, the Company desires to be assured that Executive will not
compete with the Company for the period and within the geographical areas
hereinafter specified; and
WHEREAS, Executive is willing to agree to be employed by the Company
for the period and upon and subject to the terms herein provided; and
WHEREAS, Executive does not desire to work for the Company in a
position lower than that of Chief Financial Officer and is willing to agree not
to compete with the Company;
NOW, THEREFORE, in consideration of the premises, the parties hereto
covenant and agree as follows:
Section 1. Term of Employment; Compensation. The Company agrees to
employ Executive from January 1, 2000 until December 31, 2001 (the "Term") as
its Chief Financial Officer, with the responsibilities normally associated with
such position (the "Executive Position"). The Company will pay Executive for his
services during the term of his employment hereunder at an annual rate of Two
Hundred Fifty Thousand Dollars ($250,000.00) subject to increases thereafter as
determined by the Company's Board of Directors and Compensation Committee,
payable in arrears, in equal installments, in accordance with standard Company
practice, but in any event not less often than monthly, subject only to such
payroll and withholding deductions as are required by law. Thereafter, this
Agreement shall be automatically renewed for successive periods of one (1) year,
unless you or the Company shall give the other party not less than three (3)
months prior written notice of non-renewal.
Section 2. Office and Duties. Executive shall have the usual duties,
responsibilities and authority (the "Executive's Authority") of a Chief
Financial Officer, and shall report to the Board of Directors of the Company,
and shall perform such specific other tasks, consistent with his position as
Chief Financial Officer, as may from time to time be assigned to him by the
Board of Directors. Executive shall devote substantially all of his business
time, labor, skill, undivided attention and best ability to the performance of
his duties hereunder. Executive may not, without Executive's consent, be
required to perform Executive's duties at any location that is more than fifty
(50) miles from the Company's principal office in Burlington, Massachusetts,
except that Executive agrees that he will travel to whatever extent is
reasonably necessary in the conduct of the Company's business.
Section 3. Expenses. Executive shall be entitled to reimbursement for
expenses incurred by him in connection with the performance of his duties
hereunder upon receipt of vouchers therefor in accordance with such procedures
as the Company has heretofore or may hereafter establish. The Company will
reimburse you for automobile expenses during the term of this Agreement.
Section 4. Vacation During Employment. Executive shall be entitled to
such reasonable vacations as may be allowed by the Company in accordance with
general practices to be established, but in any event not less than four (4)
weeks during each twelve (12) month period.
Section 5. Additional Benefits. The Company shall make available to
Executive at least those perquisites presently granted to Executive. Nothing
herein contained shall preclude Executive, to the extent he is otherwise
eligible, from participation in all group insurance programs or other fringe
benefit plans which the Company may hereafter in its sole and absolute
discretion make available generally to its employees, but the Company shall not
be required to establish or maintain any such program or plan.
Section 6. Termination by the Company. The Company shall have the right
to terminate Executive's employment at any time for "Cause". For purposes of
this Agreement, "Cause" shall mean (a) termination by action of a majority of
the members of the Company's Board of Directors, acting on the written opinion
of counsel, because of Executive's willful and continued refusal, without proper
cause, to perform substantially Executive's duties under this Agreement; or (b)
the conviction of Executive of a felony or an act of fraud or embezzlement
against the Company or any of its divisions, subsidiaries of affiliates (which
through lapse of time or otherwise is not subject to appeal). Such termination
shall be effected by written notice thereof, personally hand delivered by the
Company to Executive, and, except as hereinafter provided, shall be effective as
of the thirtieth (30th) calendar day after such notice; provided, however, that
if within such thirty (30) calendar day period Executive shall cease Executive's
refusal and shall use Executive's best efforts to perform such obligations, the
termination shall not be effective.
Section 7. Termination by Death. In the event Executive dies during the
Term, Executive's employment shall terminate (effective on the date of
Executive's death) and the provisions of Section 10 shall be applicable.
Section 8. Termination by Disability. In the event that Executive
suffers a disability which prevents Executive from substantially performing
Executive's duties under this Agreement for a period of at least one hundred
eighty (180) consecutive or nonconsecutive calendar days within any three
hundred sixty-five (365) calendar day period, the Company shall have the right,
after such one hundred eighty (180) calendar day period has elapsed, to
terminate Executive's employment hereunder upon thirty (30) calendar days
written notice to Executive and the provisions of Section 10 shall be
applicable.
Section 9. Termination by Executive. Notwithstanding any other
provisions of this Agreement, Executive may terminate Executive's employment
either (i) in the event of a "Change in Control" or (ii) by written notice
served upon the Company within thirty (30) calendar days after Executive has
knowledge of an event constituting "Good Reason."
For purposes of this Agreement, "change in control" shall be deemed to
be (i) the sale of all or substantially all of the assets of the Company; (ii)
any person, together with its affiliates and associates (as defined in Rule
12b-2 under the Securities Exchange Act of 1934, or any successor rule thereto)
shall become the beneficial owner (as defined in Rule 13d-3 under the Securities
Exchange Act), including by merger or otherwise, of more than fifty percent
(50%) of the total voting power of all classes of voting stock of the Company;
or (iii) that any person, together with its affiliates and associates (as
defined in Rule 12b-2 under the Securities Exchange Act of 1934, or any
successor rule thereto) has succeeded as the result of or in response to actual
or threatened election contests, whether by settlement or otherwise, in having
elected to the Board of Directors of the Company, whether at one time or on a
cumulative basis, a sufficient number of nominees to constitute (x) more than
thirty percent (30%) of the members of the Company's Board of Directors, rounded
down to the nearest whole number, if the number of directors on the Company's
Board is eight or less, or (y) more than forty percent (40%) of the members of
the Company's Board, rounded down to the nearest whole number, if the number of
directors on the Company's Board is nine or more.
For purposes of this Agreement, the term "Good Reason" shall mean:
(i) any action by the Company which results in a diminution in the
Executive Position or in the Executive's Authority;
(ii) any failure by the Company to timely pay the amounts or provide
the benefits described in this Agreement, other than an isolated failure not
occurring in bad faith and which is remedied promptly after receipt of written
notice thereof given by Executive; or
(iii) a material breach by the Company of any of the provisions of this
Agreement which failure or breach shall have continued for thirty (30) days
after written notice from Executive to the Company specifying the nature of such
failure or breach; or
(iv) any action by the Company that would result in a violation of
Section 2.
Section 10. Effect of Termination. (a) For Cause; and Death. In the
event of termination of this Agreement (i) by the Company for Cause, or (ii) by
reason of the death of the Executive, the Company shall pay Executive (or
Executive's beneficiary in the event of the Executive's death) any base salary
or other compensation earned (and a pro rata portion of the bonus payable with
respect to the year in which termination occurred) but not paid to Executive
prior to the effective date of such termination and, in the case of termination
by reason of death, the Company shall pay Executive's beneficiary (i) the base
salary that Executive would have earned for a period of one (1) year following
his death, plus (ii) a pro rata portion of any bonuses or other incentive
compensation that Executive would have earned if he had been employed for the
full fiscal year in which he died payable at the time of payment of similar
bonuses made to other Executives of the Company, plus (iii) any death benefits
that Executive is entitled to under the Company's policies in effect on
Executive's date of death.
(b) Without Cause; For Good Reason. In the event of (i) termination or
non-renewal of this Agreement by the Company other than for Cause, (ii)
termination of this Agreement by Executive for Good Reason without a Change in
Control, the Company shall pay Executive, in a lump sum within thirty (30) days
after termination under this Section 10(b), the sum of (A) the amount described
in Section 10(a) of this Agreement (other than the payments to be paid in case
of termination by death), and (B) the amount equal to one time (lx) the
Executive's Annual Compensation in effect at the time of termination under this
Section 10(b), and the Company shall continue all of the benefits and
perquisites set forth in Section 5 for a period of one (1) year, notwithstanding
the fact that Executive may no longer be an employee eligible to participate in
one or more of the employee benefit plans maintained by the Company.
(c) Change in Control. In the event of termination or non-renewal of
this Agreement by Executive or the Company within one (1) year after a Change in
Control, the Company shall pay Executive, in a lump sum payment within thirty
(30) days after termination under this Section 10(c), the sum of (A) the amount
described in Section 10(a) of this Agreement (other than the payments to be made
in case of termination by death), and (B) the amount equal to three (3x) times
Executive's Annual Compensation, and the Company shall continue for a period of
two (2) years all of the benefits and perquisites set forth in Section 5,
notwithstanding the fact that Executive may no longer be an employee eligible to
participate in one or more of the employee benefit plans maintained by the
Company.
For purposes of this Section 10(c) of this Agreement the term
"Executive's Annual Compensation" shall mean (i) the sum of (A) the Executive's
then-current salary pursuant to Section 1 and (B) any bonus compensation to
which Executive would have been entitled if Executive continued to be employed
under this Agreement or the Executive's last annual bonus, whichever is higher.
(d) Disability. In the event of termination of this Agreement by reason
of disability, the Company shall continue to pay Executive's Annual Compensation
at the time of such termination for a period of one (1) year, reduced by the
maximum amount of salary which may be insured under the Company's Long Term
Disability Plan at the time of disability.
Section 11. Acceleration and Expiration of Options. Any options or
warrants to purchase capital stock of the Company (collectively, the "Options")
granted by the Company to Executive that have not yet become exercisable shall
become exercisable upon the earliest to occur of (a) the termination of
Executive's employment as a result of Executive's death or disability; (b) the
termination by Executive with Good Reason; (c) the termination by Executive
after a Change in Control; or (d) termination by the Company without Cause.
Notwithstanding the foregoing, all Options, whether currently exercisable or
not, shall expire and cease to be exercisable as follows:
(a) if the Company terminates Executive's employment for Cause,
immediately upon the effective date of such termination;
(b) if the Company terminates the Executive's employment without cause
or if Executive terminates Executive's employment with the Company with Good
Reason or after a Change in Control, ninety (90) days after the effective date
of such termination (but in no event later than the date the Term would expire
without giving effect to any automatic renewal).
(c) if Executive dies while employed by the Company, six (6) calendar
months after Executive's death; and
(d) if Executive's employment is terminated as a result of disability,
six (6)calendar months after the effective date of such termination.
Section 12. No Mitigation; No Offset. Executive shall be under no
obligation to mitigate damages or the amount of any payment provided for under
this Agreement by seeking other employment or otherwise, and there shall be no
offset against amounts due Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that Executive may
obtain.
Section 13. Disclosure and Assignment of Intellectual Property.
(a) Executive agrees that the Company, and its successors and assigns
shall own all right, title and interest throughout the world in and to all
research, information, inventions, designs, procedures, developments,
discoveries, improvements, patents and applications therefor, trademarks and
applications therefor, copyrights and applications therefor, trade secrets,
drawings, plans, systems, methods, specifications, and all other manufacturing,
engineering, technical, research and development data and know-how (herein
sometimes "Intellectual Property") made, conceived, developed and/or acquired by
him solely or jointly with others during the period of his employment with the
Company or within one year thereafter, which relate to the manufacture,
production or processing of any products developed or sold by the Company during
the term of this Agreement or which are within the scope of or usable in
connection with the Company's business as it may, from time to time, hereafter
be conducted or proposed to be conducted, whether or not made during my regular
working hours and whether or not made on the Company's premises.
(b) Executive agrees that any such Intellectual Property shall
constitute a work made for hire under the copyright laws of the United States
and, to the extent any such Intellectual Property shall be determined not to be
a work made for hire, Executive hereby assigns, and, to the extent any such
assignment cannot be made at the present time, Executive hereby agrees to
assign, to the Company all of my right, title and interest throughout the world,
including, without limitation, copyright, patent and trade secret rights, in and
to the Intellectual Property, together with Executive's right to file for and/or
own wholly without restriction United States and foreign patents, trademarks and
copyrights with respect thereto. Executive specifically agrees and acknowledges
that the foregoing assignment covers all results, outputs and products of his
work for the Company prior to January 1, 1997, whether as an employee or as a
consultant, and all related copyrights, patents and other proprietary rights,
and that all such results, outputs and products shall be Intellectual Property
hereunder and the sole property of the Company hereafter.
(c) Executive agrees to execute all appropriate patent applications
securing all United States and foreign patents on all Intellectual Property, and
to do, execute and deliver any and all acts and instruments that may be
necessary or proper to vest all Intellectual Property in the Company or its
nominee or designee and to enable the Company, or its nominee or designee, to
obtain all such patents; and Executive agrees to render to the Company, or its
nominee or designee, all such assistance as it may require in the prosecution of
all such patent applications and applications for the re-issue of such patents,
and in the prosecution or defense of all interferences which may be declared
involving any of said patent applications or patents, but the expense of all
such assignments and patent applications, or all other proceedings referred to
herein above, shall be borne by the Company. Executive shall be entitled to fair
and reasonable compensation for any such assistance requested by the Company or
its nominee or designee and furnished by him after the termination of his
employment. Executive shall make and maintain adequate and current written
records of all Intellectual Property, and Executive shall disclose all
Intellectual Property promptly, fully and in writing to the Company immediately
upon development of the same and at any time upon request.
Section 14. Confidentiality. Executive shall not, either during the
period of his employment with the Company or thereafter, reveal or disclose to
any person outside the Company or use for his own benefit, without the Company's
specific written authorization, whether by private communication or by public
address or publication or otherwise, any Confidential Information, as
hereinafter defined. The term "Confidential Information" as used throughout this
Agreement shall mean all trade secrets, proprietary information and other data
or information (and any tangible evidence, record or representation thereof),
whether prepared, conceived or developed by an employee of the Company or
received by the Company from an outside source, which is in the possession of
the Company (whether or not the property of the Company), which in any way
relates to the present or future business of the Company, which is maintained in
confidence by the Company, or which might permit the Company or its customers to
obtain a competitive advantage over competitors who do not have access to such
trade secrets, proprietary information, or other data or information. All
originals and copies of any of the foregoing, relating to the business of the
Company, however and whenever produced, shall be the sole property of the
Company, not to be removed from the premises or custody of the Company without
in each instance first obtaining written consent or authorization of the
Company. Upon the termination of Executive's employment in any manner or for any
reason, Executive shall promptly surrender to the Company all copies of any of
the foregoing, together with any other documents, materials, data, information
and equipment belonging to or relating to the Company's business and in his
possession, custody or control, and Executive shall not thereafter retain or
deliver to any other person, any of the foregoing or any sunnnary or memorandum
thereof.
Section 15. Restriction. The Company has invested and may in the future
be required to invest substantial sums of money, directly or indirectly, to
continue and expand the business heretofore conducted by it and in connection
therewith, and as Executive recognizes that the Company would be substantially
injured by Executive disclosing to others, or by Executive using for his own
benefit, any Intellectual Property or any of the other types of information
referred to in Section 15 as Confidential Information, Executive agrees that
during the period of his employment hereunder and for a period ending twelve
(12) months after the term of this Agreement:
(a) He will not, directly or indirectly, for his own account or as
employee, officer, director, partner, joint venturer or otherwise, engage within
the United States or Canada, in any phase of the business of manufacturing,
distributing or selling of lasers for use in medical or cosmetic procedures.
(b) Executive shall not solicit, induce, attempt to hire, or hire any
employee of the Company (or any other person who may have been employed by the
Company during the term of his employment with the Company), or assist in such
hiring by any other person or business entity or encourage any such employee to
terminate his or her employment with the Company.
Executive and the Company are of the belief that the period of time,
the geographic area and the range of activities limited by this Section 16 are
reasonable, in view of the nature of the business in which the Company is
engaged and proposes to engage, the state of its product development and
Executive's knowledge of this business. However, if such period, or range of
activities area should be adjudged unreasonable in any judicial proceeding, then
the period of time shall be reduced by such number of months, such area shall be
reduced by elimination of such portion of such area, and/or such range of
activities shall be reduced by elimination of such activities, as are deemed
unreasonable, so that this covenant may be enforced in such area and during such
period of time as is adjudged to be reasonable.
Section 16. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given when delivered or
three (3) days after mailing if mailed by first-class, registered or certified
mail, postage prepaid, addressed (a) if to Executive, at the address set forth
below his name on the signature page hereof, or to such other person(s) or
addresses) as Executive shall have furnished to the Company in writing; and (b)
if to the Company, at 00 Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000, Attn: Xx. Xxxxx
X. Xxxxxxx, with a copy to General Counsel, Palomar Medical Technologies, Inc.,
00 Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000, or to such other person(s) or
addresses) as the Company shall have furnished to Executive in writing.
Section 17. Assignability. In the event that the Company shall be
merged with, or consolidated into, any other corporation, or in the event that
it shall sell and transfer substantially all of its assets to another
corporation, the terms of this Agreement shall inure to the benefit of, and be
assumed by, the corporation resulting from such merger or consolidation, or to
which the Company's assets shall be sold and transferred. This Agreement shall
not be assignable by Executive, but it shall be binding upon, and shall inure to
the benefit of, his heirs, executors, administrators and legal representatives.
Section 18. Entire Agreement. This Agreement contains the entire
agreement between the Company and Executive with respect to the subject matter
hereof and there have been no oral or other agreements of any kind whatsoever as
a condition precedent or inducement to the signing of this Agreement or
otherwise concerning this Agreement or the subject matter hereof. This Agreement
supersedes the Amended and Restated Employment Agreement dated June 30, 1999 by
and between the Executive and the Company.
Section 19. Expenses. Each party shall pay its own expenses incident to
the performance or enforcement of this Agreement, including all fees and
expenses of its counsel for all activities of such counsel undertaken pursuant
to this Agreement, except as otherwise herein specifically provided.
Section 20. Equitable Relief. Executive recognizes and agrees that the
Company's remedy at law for any breach of the provisions of Sections 14, 15 or
16 hereof would be inadequate, and he agrees that for breach of such provisions,
the Company shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in this Agreement, be entitled to injunctive
relief and to enforce its rights by an action for specific performance to the
extent permitted by law.
Section 21. Waivers and Further Agreements. Any waiver of any terms or
conditions of this Agreement shall not operate as a waiver of any other breach
of such terms or conditions or any other term or condition, nor shall any
failure to enforce any provision hereof operate as a waiver of such provision or
of any other provision hereof; provided, however, that no such written waiver,
unless it, by its own terms, explicitly provides to the contrary, shall be
construed to effect a continuing waiver of the provision being waived and no
such waiver in any instance shall constitute a waiver in any other instance or
for any other purpose or impair the right of the party against whom such waiver
is claimed in all other instances or for all other purposes to require full
compliance with such provision. Each of the parties hereto agrees to execute all
such further instruments and documents and to take all such further action as
the other party may reasonably require in order to effectuate the terms and
purposes of this Agreement.
Section 22. Amendments. This Agreement may not be amended, nor shall
any waiver, change, modification, consent or discharge be effected except by an
instrument in writing executed by or on behalf of the party against whom
enforcement of any waiver, change, modification, consent or discharge is sought.
Section 23. Severability. If any provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative or unenforceable
as applied to any particular case in any jurisdiction or jurisdictions, or in
all jurisdictions or in all cases, because of the conflicting of any provision
with any constitution or statute or rule of public policy or for any other
reason, such circumstance shall not have the effect of rendering the provision
or provisions in question, invalid, inoperative or unenforceable in any other
jurisdiction or in any other case or circumstance or of rendering any other
provision or provisions herein contained invalid, inoperative or unenforceable
to the extent that such other provisions are not themselves actually in conflict
with such constitution, statute or rule of public policy, but this Agreement
shall be reformed and construed in any such jurisdiction or case as if such
invalid, inoperative or unenforceable provision had never been contained herein
and such provision reformed so that it would be valid, operative and enforceable
to the maximum extent permitted in such jurisdiction or in such case.
Section 24. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and in pleading or
proving any provision of this Agreement, it shall not be necessary to produce
more than one of such counterparts.
Section 25. Section Headings. The headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 26. General Provisions.
(a) Executive further agrees that his obligations under Sections 14, 15
and 16 of this Agreement shall be binding upon him irrespective of the duration
of his employment by the Company, the reasons for any cessation of his
employment by the Company, or the amount of his compensation and shall survive
the termination of this Agreement (whether such termination is by the Company,
by Executive, upon expiration of this Agreement or otherwise).
(b) Executive represents and warrants to the Company that he is not now
under any obligations to any person, firm or corporation, and has no other
interest which is inconsistent or in conflict with this Agreement, or which
would prevent, limit or impair, in any way, the performance by him of any of the
covenants or his duties in his said employment.
Section 27. Gender. Whenever used herein, the singular number shall
include the plural, the plural shall include the singular, and the use of any
gender shall include all genders.
Section 28. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the law (other than the law governing
conflict of law questions) of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have executed or caused to be executed
this Agreement as of the date first above written.
PALOMAR MEDICAL TECHNOLOGIES, INC.
By:/S/ XXXXX X. XXXXXXX
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Name:XXXXX X. XXXXXXX
Title:PRESIDENT
BY PLACING MY SIGNATURE HEREUNDER, I ACKNOWLEDGE THAT I HAVE READ ALL
THE PROVISIONS OF THIS AGREEMENT AND THAT I AGREE TO ALL OF ITS TERMS.
EXECUTIVE:
XXXXXX X. XXXXXX
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Notice Address:
00 XXXXXXXXX XXXXXX
XXXXXXXXXX, XX 00000
