EXHIBIT 10.32
February 17, 2004
Xx. Xxxx X. Xxxxxx
0000 000xx Xxxxxx XX
Xxxxxxxxxxx, Xxxxxxxxxx 00000
Dear Xxxx,
This letter sets forth the substance of the Transition Agreement ("Agreement")
to aid in your employment transition. If you execute this agreement, the Company
agrees to provide you with the following transition benefits, after the
expiration of the seven-day revocation period described in Paragraph 18 below
upon which the Agreement becomes effective (hereinafter "Effective Date"),
provided that you have not revoked this Agreement as described in Paragraphs 15,
18 and 19; and have not resigned from employment on or before the Separation
Date. We refer to you in certain places in this letter as "Employee".
1) Your last day as an employee of Xxxxxxx Cardiology Inc. ("the Company")
will be Friday, February 27, 2004 ("Separation Date"), pursuant to your
letter of resignation (Exhibit A hereto).
2) It is agreed that you will remain employed during a nine-month
transition period on a substantially reduced work schedule commencing
March 1, 2004 and ending November 30, 2004 ("Transition Period").
During the Transition Period you will continue to receive your current
bi-weekly rate of $5,769.23, less standard withholding taxes and any
amounts owed by you to the Company, in accordance with the Company's
regular payroll practices. You agree that said payment will be mailed
to your home or direct deposited on regularly scheduled payroll date(s)
through the Transition Period;
3) The Company will subsidize COBRA continuation coverage under the
Company's medical and dental insurance plans (collectively "Health
Plan") for the nine-months beginning March 1, 2004 and ending November
30, 2004 but coverage subsidy will cease with you and your dependents
eligibility under a new employers' benefit plan. Information regarding
your rights and obligations under COBRA will be mailed to you
separately within 14 days following your separation date. Xxxxxxx
reserves the right to change the monthly amount should the Company
experience a rate increase during the subsidy period.
To the extent permitted under terms of the basic and voluntary Life
Insurance policies, you may be eligible for continued coverage under
the Company's Life Insurance program for the duration of your
Transition Period, and if provided under such policies you may elect to
convert to an individual policy on the coverage cancellation date;
4) The Company will pay you all accrued and unused vacation earned and
unused on the customary payroll date following February 27, 2004. You
will not accrue additional vacation days or sick leave after your
separation date.
1.
5) During the Transition Period you will continue to be eligible to
participate in the Employee Stock Purchase Plan and the 401k Savings
Plan.
6) During the Transition Period of March 1, 2004 through November 30,
2004:
a) You agree to provide from time to time general support
services to the Company in the area of your expertise upon the
request of the Chief Executive Officer, and will report
directly to the Chief Executive Officer, or as otherwise
specified by the Chief Executive Officer. You agree to
exercise the highest degree of professionalism and utilize
your expertise and creative talents in performing these
services.
b) You will have no responsibility or authority and agree not to
represent or purport to represent the Company in any manner
whatsoever to any third party unless authorized by the Chief
Executive Officer, in writing, to do so.
c) Pursuant to regular business practice, the Company will
reimburse you for documented business expenses incurred during
an authorized engagement, provided that these expenses have
been pre-approved by the Chief Executive Officer, in writing,
or are expenses which the Company would reasonably expect you
to incur in a manner otherwise customary for employees under
the Company's standard travel and expense policy.
7) You acknowledge and agree that through this continued payment, Xxxxxxx
will have satisfied all of its obligations as set forth in your
employment offer-letter dated February 7, 2000 from the Company to you
("Offer Letter") but also as deemed expired on February 7, 2001 as
agreed and signed by you on February 12, 2002; or any subsequent
agreements related to your duties as a Vice President, and you have no
other rights to salary, bonuses, stock options, benefits, or other
compensation after the Separation Date, except as otherwise noted
elsewhere in this Agreement. Further, if you engage in any activity
that is competitive with the Company during the Transition Period, the
Company shall have no further payment obligations under this Agreement;
provided however that your engagement as a consultant to a person or
entity that does not compete or seek to compete with the Company is
permissible under this Agreement. You agree to notify the Company, in
writing, upon your acceptance of full time employment or engagement in
any consultative activity that may be deemed a competitive activity.
8) Stock Options: Stock Vesting, Cancellations
a) You hereby agree, as of the commencement of your Transition
Period, that you are vested in 45,454 shares of your initial
stock option grant dated August 14, 2000, 2,982 shares of your
stock option grant dated May 10, 2001, 2,708 shares of your
stock option grant dated June 27, 2002, and 1,875 shares of
your stock option grant dated February 10, 2003, for a total
vested stock option grant holding of 53,019 (split adjusted)
shares.
2.
b) In addition, provided that you continue to comply with the
terms of this Agreement through the Transition Period, your
existing stock option grants will continue vesting through the
completion of the Transition Period in accordance with the
normal vesting schedule.
c) Based upon (a) and (b), above, and unless you exercise some or
all of your vested stock options between now and November 30,
2004, as of November 30, 2004 you will be vested in 45,454
shares, 3,409 shares, 3,645 shares and 3,281 shares of your
respective August 14, 2000, May 10, 2001, June 27, 2002 and
February 10, 2003 option grants, respectively. All remaining
unvested options at November 30, 2004 will be cancelled.
d) In accordance with the terms of the related stock option
plans, the vested options must be exercised within 90 days of
the end of your Transition Period, or the options will
automatically cancel.
9) Employee specifically acknowledges and agrees that this consideration
exceeds the amount he would otherwise be entitled to receive upon
termination of his employment, and that these payments and other
benefits are in exchange for entering into this Agreement. Employee
agrees that he will not at any time seek consideration from the Company
other than what is set forth in this Agreement. Employee specifically
acknowledges and agrees that the Company has made no representations to
him regarding the tax consequences of any amounts received by him or
for his benefit pursuant to this Agreement. In consideration for the
mutual promises and agreements contained herein, and for other valuable
consideration, Employee agrees to pay all federal or state taxes, if
any, which are required by law to be paid with respect to this
Agreement, save and except those amounts withheld by the Company in
satisfaction of such taxes as provided in customary payroll deductions,
including supplement income tax if applicable. Employee further agrees
to indemnify and hold the Company, its predecessors, officers,
directors, employees, attorneys, representatives, successors and
assigns harmless from any claims, demands, deficiencies, levies,
assessments, executions, judgments or recoveries by any governmental
entity against the Company, or any of the foregoing persons or
entities, for any amounts claimed due on account of this Agreement or
pursuant to claims made under any federal or state tax laws, and any
costs, expenses or damages sustained by them by reason of any such
claims, including any amounts paid by the Company, its predecessors,
officers, directors, employees, attorneys, representatives, successors
and assigns as taxes, attorneys' fees, deficiencies, levies,
assessments, fines, penalties, interest or otherwise.
10) Employee represents that he has not filed, and will not file, any
complaints, lawsuits, administrative complaints or charges arising from
or relating to his employment with, or termination of employment from,
the Company. Notwithstanding the provisions of any law stating that a
general release does not extend to claims which the creditor does not
know of or suspect to exist in his favor at the time of executing the
release, Employee agrees to release the Company, its Board of
Directors, officers, employees, agents and assigns, from any and all
claims, charges, complaints, causes of action or demands of whatever
kind or nature that Employee now has or has ever had against the
Company, whether known or unknown, arising from or relating to
Employee's employment with or discharge from the Company, including but
not limited to: wrongful or tortious termination, specifically
including actual or constructive termination in violation of public
policy; implied or express employment contracts and/or estoppel;
discrimination and/or retaliation under any federal, state or local
statute or regulation, specifically including any claims Employee may
have
3.
under the Fair Labor Standards Act, Age Discrimination in Employment
Act, the Older Workers Benefit Protection Act, the Americans with
Disabilities Act, Title VII of the Civil Rights Act of 1964 as amended,
the Family and Medical Leave Act, the Washington Minimum Wage Act, and
the Washington Law Against Discrimination; any and all claims brought
under any applicable state employment discrimination or other statutes;
any claims brought under any federal or state statute or regulation for
non-payment of wages or other compensation (including bonuses due after
the Separation Date), and libel, slander, or breach of contract other
than the breach of this Agreement. This release specifically excludes
claims, charges, complaints, causes of action or demands of whatever
kind or nature that post-date the Separation Date or the Effective
Date, whichever is later, and that are based on factual allegations
that do not arise from or relate to Employee's present employment with
or discharge from the Company
11) Subject to certain exceptions noted below and elsewhere within this
Agreement, on the Separation Date, you agree to return to the Company
all Company documents (and copies thereof) and other Company property
that you have in your possession or control, including, but not limited
to, Company files, notes, drawings, records, business plans and
forecasts, financial information, specifications, training materials,
computer-recorded information, tangible property including, but not
limited to, entry cards, identification badges and keys, and any
materials of any kind that contain or embody any proprietary or
confidential information of the Company (and all reproductions
thereof).
a. You may retain the use of certain property, including office
computer, software, e-mail access, cell phone, and documents
or materials necessary to supporting your Transition Period.
You agree to return the aforementioned property immediately
upon the conclusion of your Transition Period or upon written
request from the Company, whichever occurs first.
12) Employee acknowledges and affirms that he has previously executed a
Non-Disclosure Agreement (confidentiality agreement) on February 9,
2000, that his obligations not to use or disclose the Company's
confidential information are ongoing, and that the terms and conditions
of said confidentiality agreement are not affected by this Agreement.
Employee represents that he will return all property belonging to the
Company prior to the Separation Date.
13) Communications
a) You and the Company shall draft and agree upon the content of
any announcement regarding your separation.
b) Both you and the Company agree not to disparage the other
party, and the other party's officers, directors, employees,
shareholders, affiliates and agents, in any manner likely to
be harmful to them and their business reputation or personal
reputation; provided that both you and the Company shall
respond accurately and fully to any question, inquiry or
request for information when required by law or legal process.
14) The provisions of this Agreement will be held in strictest confidence
by you and the Company and will not be publicized or disclosed in any
manner whatsoever, provided, however, that: (a) you may disclose this
Agreement to your immediate family, attorney, accountant and financial
advisor, and as necessary in seeking consulting work or employment; (b)
the Company may disclose this Agreement as may be necessary in the
4.
conduct of its business, including but not limited to, required filings
with the Securities and Exchange Commission, and other public
announcements required as a publicly-traded company; and (c) the
parties may disclose this Agreement as may be necessary to enforce its
terms or as otherwise required by law. In particular, and without
limitation, you will not disclose the provisions of this Agreement to
any current or former employee of the Company, except as required by
law.
15) Employee warrants that no promise or inducement has been offered for
this Agreement other than as set forth herein and that this Agreement
is executed without reliance upon any other promises or
representations, oral or written. Any modification of this Agreement
must be made in writing and be signed by Employee and the Company. This
Agreement supersedes all prior understandings between the Parties and
represents the entire Agreement between the Parties with respect to all
matters involving Employee's employment with or termination from the
Company, except as stated herein.
16) If any provision of this Agreement or compliance by Employee or the
Company with any provision of this Agreement constitutes a violation of
any law, or is or becomes unenforceable or void, then such provision,
to the extent only that it is in violation of law, unenforceable or
void, will be deemed modified to the extent necessary so that it is no
longer in violation of law, unenforceable or void, and such provision
will be enforced to the fullest extent permitted by law. If such
modification is not possible, said provision, to the extent that it is
in violation of law, unenforceable or void, will be deemed severable
from the remaining provisions of this Agreement, which provisions will
remain binding on both Employee and the Company. This Agreement is
governed by the laws of the State of Washington.
17) The King County Superior Court of Washington shall have exclusive
jurisdiction of any lawsuit arising from or relating to Employee's
employment with, or termination from, the Company, or arising from or
relating to this Agreement. Employee consents to such venue and
personal jurisdiction. The prevailing party in any such lawsuit will be
entitled to an award of attorneys' fees and reasonable litigation
costs. Employee agrees that he will indemnify and hold the Company
harmless from any breach of this Agreement by Employee. EMPLOYEE
FURTHER AGREES THAT IF HE CHALLENGES THIS AGREEMENT OR FILES ANY CLAIMS
AGAINST THE COMPANY ARISING FROM OR RELATING TO HIS EMPLOYMENT WITH, OR
TERMINATION FROM, THE COMPANY, EXCLUDING ANY CLAIM CHALLENGING THE
VALIDITY OF HIS WAIVER OF RIGHTS UNDER THE AGE DISCRIMINATION IN
EMPLOYMENT ACT, HE WILL RETURN ALL MONIES AND BENEFITS RECEIVED BY HIM
FROM THE COMPANY PURSUANT TO THIS AGREEMENT. In the event Employee
challenges the validity of his waiver of rights under the Age
Discrimination in Employment Act, he agrees that the Company may
recover money and benefits paid under this Agreement if Employee's
challenge and subsequent Age Discrimination in Employment Act claim are
successful and he obtains a monetary award.
18) Employee specifically agrees and acknowledges: (A) that his waiver of
rights under this Agreement is knowing and voluntary as required under
the Older Workers Benefit Protection Act; (B) that he understands the
terms of this Agreement; (C) that he has been advised in writing by the
Company to consult with an attorney prior to executing this Agreement;
(D) that the Company has given him a period of up to twenty-one (21)
days within which to consider this Agreement; (E) that, following his
execution of this Agreement he has seven (7) days in which to revoke
his agreement to this Agreement and that, if he chooses not to so
5.
revoke, the Agreement shall then become effective and enforceable and
the payment and extension of benefits listed above shall then be made
to him in accordance with the terms of this Agreement; and (F) nothing
in this Agreement shall be construed to prohibit Employee from filing a
charge or complaint, including a challenge to the validity of the
waiver provision of this Agreement, with the Equal Employment
Opportunity Commission or participating in any investigation conducted
by the Equal Employment Opportunity Commission. However, he has waived
any right to monetary relief. To cancel this Agreement, Employee
understands that he must give a written revocation to Company
headquarters either by hand delivery or certified mail within the
seven-day period. If he revokes the Agreement, it will not become
effective or enforceable and he will not be entitled to any of the
benefits set forth above.
19) Employee further specifically agrees that modifications to this
Agreement, whether material or immaterial, do not restart the running
of the twenty-one (21) day period referenced in Paragraph 18.
20) This Agreement shall be binding upon the parties hereto and upon their
heirs, administrators, representatives, executors, successors,
employees, agents and assigns, and shall inure to the benefit of said
parties and each of them and to their heirs, administrators,
representatives, executors, successors, employees, agents and assigns.
Employee expressly warrants that he has not transferred to any person
or entity any rights, causes of action, or claims released in this
Agreement.
21) This Agreement in no way alters the at-will nature of Employee's
employment with the Company through and including the Separation Date.
22) EMPLOYEE ACKNOWLEDGES AND AGREES THAT HE HAS CAREFULLY READ AND
VOLUNTARILY SIGNED THIS AGREEMENT, THAT HE HAS HAD AN OPPORTUNITY TO
CONSULT WITH AN ATTORNEY OF HIS CHOICE, AND THAT HE SIGNS THIS
AGREEMENT WITH THE INTENT OF RELEASING THE COMPANY AND ITS OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS FROM ANY AND ALL CLAIMS.
ACCEPTED AND AGREED TO:
/s/ Xxxx X. Xxxxxx /s/ Xxxx X. Xxxxxx
---------------------------------------- ------------------------------------
Xxxx Xxxxxx, Chief Executive Officer Xxxx X. Xxxxxx
Xxxxxxx Cardiology, Inc. Employee's Signature
Dated: February 17, 2004 Dated: February 19, 2004
6.
[XXXXXXX LOGO]
EXHIBIT A
To Chief Executive Officer
Xxxxxxx Cardiology, Inc.
I, Xxxx X. Xxxxxx, hereby tender my resignation as a full-time officer
and employee of Xxxxxxx Cardiology Inc., and its subsidiaries,
effective February 27, 2004, and agree to accept a modified work
schedule through November 30, 2004 subject to the terms set forth in
the Severance and Transition Agreement.
/s/ Xxxx X. Xxxxxx February 19, 2004
----------------------------------- ---------------------------
Xxxx X. Xxxxxx Date
7.
