EXHIBIT 10.17
EMPLOYMENT AGREEMENT
AGREEMENT, made and entered into as of the 27th day of August, 2001 by and
between Viasys Healthcare Inc., a Delaware corporation (together with its
successors and assigns permitted under this Agreement, the "Company"), and Xx.
Xxxxxxx X. Xxxxxxxx (the "Executive").
W I T N E S S E T H:
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WHEREAS, the Company desires to employ the Executive and to enter into an
agreement embodying the terms of such employment (this "Agreement") and the
Executive desires to enter into this Agreement and to accept such employment,
subject to the terms and provisions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is mutually acknowledged, the Company and the Executive
(each individually, a "Party" and together, the "Parties") hereby agree as
follows:
1. DEFINITIONS.
(a) "Affiliate" of a person or other entity shall mean a person or other
entity that directly or indirectly controls, is controlled by, or is under
common control with the person or other entity specified.
(b) "Base Salary" shall mean the salary provided for in Section 4 hereof or
any increased salary granted to the Executive pursuant thereto.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Cause" shall mean the occurrence of any one or more of the following
events:
(i) the Executive shall have been convicted of a felony or any crime
involving moral turpitude; or
(ii) in carrying out his duties, the Executive shall have engaged in
conduct that constitutes gross neglect or gross misconduct or any material
violation of this Agreement or any material violation of a significant
Company rule or policy of which the Executive is aware (or should
reasonably have been aware), the violation of which amounts to gross
neglect or gross misconduct.
(e) "Change in Control" shall mean an event or occurrence set forth in
Section 1.1 of the Post Spin-Off Executive Retention Agreement.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(g) "Disability" or "disabled" shall mean the Executive's inability due to
physical or mental incapacity, as determined by a medical doctor selected by the
Company and the Executive, to substantially perform his duties and
responsibilities under this Agreement. If the Parties cannot agree on a medical
doctor for such purpose, each Party shall select one medical doctor and such
doctors will jointly select a third medical doctor who shall be the approved
medical doctor for such purpose.
(h) "Effective Date" shall mean August 27, 2001.
(i) "Good Reason" shall mean the occurrence of any one or more of the
following events without the Executive's consent:
(i) a reduction in the Executive's then current Base Salary;
(ii) the removal of the Executive from the position described in
Section 3 hereof (other than due to a termination of his employment for
Cause, Disability or death);
(iii) a material diminution in the Executive's duties or
responsibilities under this Agreement;
(iv) a change in the reporting structure so that the Executive reports
to someone other than the Chief Operating Officer;
(v) a Pre Spin-Off Sale of the Company unless (A) there is a single
successor to businesses of the Company with aggregate revenue for the then
most recently completed fiscal year in excess of 75% of the revenue in
aggregate amount of the entire Company during such fiscal year, (B) such
successor assumes in writing the Company's obligation to perform this
Agreement within fifteen (15) days of such Pre Spin-Off Sale (other than
the equity components hereof), and (C) the Executive voluntarily terminates
his employment with such successor by the 6-month anniversary of the
effective date of such assumption of the Company's obligation to perform
this Agreement;
(vi) neither a Spin-Off nor a Pre Spin-Off Sale occurs on or prior to
the Measurement Date or there is formal public disclosure by Thermo
Electron prior to the Measurement Date of its intent not to effectuate the
Spin-Off or a Pre Spin-Off Sale; or
(vii) a change by the Company in the location at which the Executive
performs his principal duties for the Company to a new location that is
outside a radius of 50 miles from the Executive's principal residence on
the Effective Date.
(j) "Measurement Date" means APRIL 15, 2004.
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(k) "Notice of Termination" shall mean a written notice from one Party to
the other Party given in accordance with Section 27 hereof, terminating the
Executive's employment hereunder. Any Notice of Termination shall (i) indicate
the specific termination provision hereunder relied on by the Party giving such
notice and (ii) to the extent applicable, set forth in reasonable detail the
facts and circumstances providing a basis for termination of the Executive's
employment under the provision so indicated. The failure by the Executive or the
Company to set forth any fact or circumstance that contributes to a showing of
Good Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively,
from asserting any such fact or circumstance in enforcing their respective
rights hereunder. Any Notice of Termination for (x) Cause given by the Company
must be given within 90 days from the Company becoming aware of the event(s) or
circumstance(s) that constitute(s) Cause and (y) Good Reason given by the
Executive must be given within 30 days from the Executive becoming aware of the
event(s) and circumstance(s) that constitute(s) Good Reason except for a Notice
of Termination for Good Reason given by the Executive pursuant to Section
1(i)(v) for which such notice must be given prior to the 6-month anniversary of
the effective date of the assumption by the successor referred to in such
Section of the Company's obligation to perform this Agreement.
(l) "Pre Spin-Off Sale" shall mean an event or occurrence of any one or
more of the following prior to the Spin-Off:
(i) the consummation of a sale or other disposition (other than a
spin-off) of 50% or more of the outstanding Stock of the Company; or
(ii) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving the Company or a
sale or other disposition of all or substantially all of the assets of the
Company in one or a series of transactions (a "Business Combination"),
unless, immediately following such event, Thermo Electron Corporation, a
Delaware corporation ("Thermo"), beneficially owns, directly or indirectly,
more than 50% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding securities entitled to vote
generally in the election of directors, respectively, of the acquiring or
resulting entity in such Business Combination (which shall include, without
limitation, a corporation which as a result of such transaction owns the
Company or substantially all of the Company's assets either directly or
through one or more subsidiaries). As used in this Section 1(l)(ii), the
term "substantially all of the assets" shall mean businesses with aggregate
revenue for the then most recently completed fiscal year in excess of 75%
of the revenue in aggregate amount for the entire Company during such
fiscal year.
(m) "Post Spin-Off Executive Retention Agreement" shall mean the Executive
Retention Agreement attached hereto as Exhibit A and incorporated herein by
reference,
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which the Company and the Executive shall enter into on the Effective Date with
respect to the period of time after a Spin-Off.
(n) "Spin-Off" shall mean the distribution by Thermo to its stockholders of
all or substantially all of the shares of Stock held beneficially by it in a
tax-free spin-off under Section 355 of the Code.
(o) "Spin-Off Date" shall mean the date on which the Spin-Off shall be
effective.
(p) "Stock" shall mean the common stock, $0.01 par value per share, of the
Company.
(q) "Termination Date" shall mean, with respect to any termination of the
Executive's employment hereunder, the effective date of such termination
pursuant to Section 11 hereof.
2. TERM OF EMPLOYMENT. The Executive's employment under this Agreement
shall commence on the Effective Date and shall continue until the earlier of (i)
August 28, 2004 or (ii) the Spin-Off Date (the "Employment Period"). In the
event that a Spin-Off shall have occurred on or prior to both August 28, 2004
and the Termination Date, the Employment Period shall automatically extend for
an additional three-year period (the "Employment Renewal Period") commencing on
the Spin-Off Date. If the Company elects not to extend the Term of Employment on
terms and conditions substantially similar to those set forth in this Agreement,
it shall provide the Executive with written notice at least six months prior to
the end of the then current Term. For the purpose of this Agreement, "Term" or
"Term of Employment" shall mean the Employment Period and the Employment Renewal
Period, if any. Notwithstanding the foregoing, the Term of Employment may be
earlier terminated in accordance with the provisions of Section 11 hereof.
3. POSITION, DUTIES AND RESPONSIBILITIES.
(a) Commencing on the Effective Date, the Executive shall be employed as
President, Medical/Surgical, Business Unit & International Sales of the Company
("President, Medical/Surgical"), and shall have such duties and responsibilities
as are reasonably consistent with the position of President, Medical/Surgical
and such other duties and responsibilities reasonably consistent with such
position as shall be assigned to him from time to time by the Chief Operating
Officer of the Company or any other officer designated by the Board of Directors
or the Chief Executive Officer.
(b) During the Term of Employment, the Executive shall devote his entire
business time, attention and energies to the business and interest of the
Company and in performing his duties and responsibilities under this Agreement,
subject to usual vacation periods and personal and sick leave in accordance with
this Agreement and the
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Company's policies, and to that end, the Executive shall not serve on the board
of directors of other corporations or entities without the prior approval of the
Board in each case; PROVIDED, that notwithstanding any such approval, such
position(s) do not materially interfere with the proper performance of the
Executive's duties and responsibilities set forth in Section 3 hereof
Notwithstanding anything contained in this Section 3(b) to the contrary, nothing
herein shall preclude the Executive from (i) serving on the boards of directors
of a reasonable number of trade associations and/or charitable organizations,
(ii) engaging in charitable activities and community affairs, and (iv) managing
his personal investments and affairs, PROVIDED, that such activities do not
materially interfere with the proper performance of his duties and
responsibilities set forth in Section 3 hereof.
(c) The Executive, in carrying out his duties and responsibilities under
this Agreement, shall report directly to the Chief Operating Officer of the
Company.
(d) In the event of a termination of employment of the Executive for any
reason, the Executive shall immediately resign as a member of each of the boards
of directors of the Company's Affiliates upon which the Executive serves (if
any).
4. BASE SALARY. The Executive shall be paid an annualized base salary,
payable in accordance with the regular payroll practices of the Company, of
$210,000, which amount may be increased from time to time in the discretion of
the Board, provided that such amount may not be decreased.
5. ANNUAL CASH INCENTIVE AWARD. During the Term of Employment, the
Executive shall participate in the annual cash incentive program of the Company.
Under such program, the Executive shall be eligible to receive an annual bonus
in an amount equal to (a) 50% of his base salary (the "Reference Amount"),
prorated for any partial calendar year of service, times (b) a number ranging
from 0 to 2 (the "Multiplier") determined in accordance with the subjective and
objective standards established by the Board for such year.
6. INITIAL STOCK OPTION AWARD. As soon as practicable after the date
hereof, the Company shall grant to the Executive a 7-year non-qualified stock
option to purchase 150,000 shares of Stock, assuming a 40,000,000 share
capitalization of the Company (the "Initial Stock Option") at an exercise price
per share equal to the then fair market value of a share of Stock as determined
by X.X. Xxxxxx & Co. based on current conditions and December 31, 2000 year-end
financial statements and third quarter of 2001 financial performance (the "X.X.
Xxxxxx Valuation"). Such grant shall be substantially in accordance with and
subject to the terms and conditions of the Stock Option Agreement attached
hereto as Exhibit B and incorporated herein by reference, which the Company and
the Executive shall enter into as soon as practicable after the date hereof.
7. EMPLOYEE BENEFIT PROGRAMS. During the Term of Employment, the Executive
shall be entitled to participate in all employee pension and welfare benefit
plans and programs made available to the Company's senior level executives or to
its
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employees generally, as such plans or programs may be in effect from time to
time, including, without limitation, pension, profit sharing, savings and other
retirement plans or programs, medical, dental, hospitalization, short-term and
long-term disability and life insurance plans, accidental death and
dismemberment protection, travel accident insurance, and any other pension or
retirement plans or programs and any other employee welfare benefit plans or
programs that may be sponsored by the Company from time to time, including any
plans that supplement the above-listed types of plans or programs, whether
funded or unfunded. The Executive shall be entitled to 4 weeks paid vacation per
year of employment.
8. PERQUISITES. During the Term of Employment, the Executive shall be
entitled to participate in all of the Company's executive perquisites in
accordance with the terms and conditions of such arrangements as are in effect
from time to time for the Company's senior-level executives.
9. REIMBURSEMENT OF BUSINESS AND OTHER EXPENSES. The Executive is
authorized to incur reasonable expenses in carrying out his duties and
responsibilities under this Agreement including, without limitation, reasonable
legal fees incurred in the negotiation and preparation of this Agreement, and
the Company shall promptly reimburse him for such expenses, subject to
documentation in accordance with the Company's policy.
10. TERMINATION OF EMPLOYMENT. The Executive's employment hereunder shall
terminate effective immediately upon the earlier to occur of the following
events:
(a) death of the Executive;
(b) receipt by either Party of a Notice of Termination for Disability
from the other Party, but in any event not until the Executive is
determined to be disabled in accordance with Section 1(h) hereof;
(c) receipt by the Executive of a Notice of Termination for Cause from
the Company;
(d) the 31st day following receipt by the Company of a Notice of
Termination for Good Reason from the Executive if the Company fails to cure
within the 30-day period following the Company's receipt of such written
notice;
(e) the 31st day following receipt by the Executive of a Notice of
Termination Without Cause from the Company; and
(f) the 31st day following receipt by the Company of a Notice of
Termination Without Good Reason from the Executive.
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11. RIGHTS AND REMEDIES UPON TERMINATION OF EMPLOYMENT.
(a) TERMINATION DUE TO DEATH. In the event that the Executive's employment
is terminated due to his death, his estate or his beneficiaries, as the case may
be, shall be entitled to the following benefits:
(i) the Executive's then current Base Salary through the Termination
Date, which shall be payable in lump sum within thirty days of the
Termination Date;
(ii) an annual cash incentive bonus award for the year in which the
Termination occurs, pro-rated through the Termination Date, determined in
accordance with the provisions of Section 6 hereof (the "Pro-Rated Annual
Bonus"), which shall be payable when annual cash incentive awards are
normally paid to senior executives; and
(iii) Stock Options.
(A) if the Spin-Off shall not have occurred prior to the
Termination Date, then, effective upon the Termination Date, each
outstanding option to purchase shares of Stock of the Company held by
the Executive, whether or not issued under this Employment Agreement,
shall immediately cease to vest and shall be forfeited to the Company
and cancelled;
(B) if the Spin-Off shall have occurred on or prior to both the
Measurement Date and the Termination Date, then, effective upon the
Termination Date, each outstanding option to purchase shares of Stock
of the Company held by the Executive, whether or not issued under this
Employment Agreement, that have not previously vested prior to that
date shall immediately vest and shall remain exercisable until one
year from the Termination Date (but in no event beyond the end of each
such option's exercise period);
(C) if the Spin-Off shall have occurred after the Measurement
Date but prior to the Termination Date, then, effective upon the
Termination Date, each outstanding option to purchase shares of Stock
of the Company held by the Executive, whether or not issued under this
Employment Agreement, that have not previously vested prior to that
date, shall immediately cease to vest and shall be forfeited to the
Company and cancelled.
(b) TERMINATION DUE TO DISABILITY. In the event that the Executive's
employment is terminated by either Party due to his Disability, he shall be
entitled to the following benefits:
(i) disability benefits in accordance with the long-term disability
("LTD") program then in effect for senior executives of the Company;
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(ii) the Executive's then current Base Salary through the end of the
LTD elimination period, which shall be payable in lump sum within thirty
days of the Termination Date;
(iii) the Pro-Rated Annual Bonus, payable when annual cash incentive
awards are normally paid to senior executives;
(iv) Stock Options.
(A) if the Spin-Off shall not have occurred prior to the
Termination Date, then, effective upon the Termination Date, each
outstanding option to purchase shares of Stock of the Company held by
the Executive, whether or not issued under this Employment Agreement,
shall immediately cease to vest and shall be forfeited to the Company
and cancelled;
(B) if the Spin-Off shall have occurred on or prior to both the
Measurement Date and the Termination Date, then, effective upon the
Termination Date, each outstanding option to purchase shares of Stock
of the Company held by the Executive, whether or not issued under this
Employment Agreement, that have not previously vested prior to that
date shall immediately vest and shall remain exercisable until one
year from the Termination Date (but in no event beyond the end of each
such option's exercise period);
(C) if the Spin-Off shall have occurred after the Measurement
Date but prior to the Termination Date, then, effective upon the
Termination Date, each outstanding option to purchase shares of Stock
of the Company held by the Executive, whether or not issued under this
Employment Agreement, that have not previously vested prior to that
date, shall immediately cease to vest and shall be forfeited to the
Company and cancelled; and
(v) continued participation at the Company's expense in all medical
and dental insurance coverage in which he was participating on the date of
his termination until the earlier of (A) 12 months following the
Termination Date, and (B) the date, or dates, he receives substantially
equivalent coverage and benefits under the plans and programs of a
subsequent employer.
(c) TERMINATION BY THE COMPANY FOR CAUSE. In the event that the Company
terminates the Executive's employment for Cause:
(i) the Executive shall be entitled to receive his current Base Salary
through the Termination Date, which shall be payable in lump sum within
thirty days of the Termination Date;
(ii) Stock Options.
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(A) if the Spin-Off shall not have occurred prior to the
Termination Date, then, effective upon the Termination Date, each
outstanding option to purchase shares of Stock of the Company held by
the Executive, whether or not issued under this Employment Agreement,
shall immediately cease to vest and shall be forfeited to the Company
and cancelled;
(B) if the Spin-Off shall have occurred on or prior to both the
Measurement Date and the Termination Date, then, effective upon the
Termination Date, each outstanding option to purchase shares of Stock
of the Company held by the Executive, whether or not issued under this
Employment Agreement, (1) that have not previously vested prior to
that date shall immediately cease to vest and shall be forfeited to
the Company and cancelled and (2) that have previously vested prior to
the Termination Date shall remain exercisable until three months from
the Termination Date (but in no event beyond the end of each such
option's exercise period);
(C) if the Spin-Off shall have occurred after the Measurement
Date but prior to the Termination Date, then, effective upon the
Termination Date, each outstanding option to purchase shares of Stock
of the Company held by the Executive, whether or not issued under this
Employment Agreement, that have not previously vested prior to that
date, shall immediately cease to vest and shall be forfeited to the
Company and cancelled; and
(iii) except as otherwise set forth in this Section 12, the Executive
shall not be entitled to any benefits, severance or other compensation
after termination.
(d) TERMINATION FOR GOOD REASON. In the event the Executive's employment is
terminated by the Executive for Good Reason, the Executive shall be entitled to
the following benefits:
(i) the Executive's then current Base Salary through the Termination
Date, which shall be payable in lump sum within thirty days of the
Termination Date;
(ii) the Pro-Rated Annual Bonus, payable when annual cash incentive
awards are normally paid to senior executives;
(iii) an amount equal to the sum of (A) the Executive's then current
Base Salary and (B) the higher of the Reference Amount or the most recent
cash incentive award paid or awarded to the Executive pursuant to Section 5
hereof, payable in lump sum on or before the 90th day immediately following
the Termination Date;
(iv) Stock Options.
(A) if the Spin-Off shall not have occurred prior to the
Termination Date, then, effective upon the Termination Date, each
outstanding option to purchase shares of Stock of the Company held by
the Executive, whether or not issued
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under this Employment Agreement, shall immediately cease to vest and
shall be forfeited to the Company and cancelled;
(B) if the Spin-Off shall have occurred on or prior to both the
Measurement Date and the Termination Date, then, effective upon the
Termination Date, each outstanding option to purchase shares of Stock
of the Company held by the Executive, whether or not issued under this
Employment Agreement, that have not previously vested prior to that
date shall immediately vest and shall remain exercisable until one
year from the Termination Date (but in no event beyond the end of each
such option's exercise period;
(C) if the Spin-Off shall have occurred after the Measurement
Date but prior to the Termination Date, then, effective upon the
Termination Date, each outstanding option to purchase shares of Stock
of the Company held by the Executive, whether or not issued under this
Employment Agreement, that have not previously vested prior to that
date, shall immediately cease to vest and shall be forfeited to the
Company and cancelled; and
(v) continued participation at Company expense in all medical and
dental insurance coverage in which he was participating on the date of his
termination until the earlier of (A) 12 months following the Termination
Date and (B) the date, or dates, he receives substantially equivalent
coverage and benefits under the plans and programs of a subsequent
employer.
(e) TERMINATION WITHOUT GOOD REASON; TERMINATION WITHOUT CAUSE.
(i) WITHOUT GOOD REASON. A termination of employment by the Executive
on his own initiative, other than (A) due to death, (B) due to Disability
or (C) for Good Reason, ("Without Good Reason") shall have the same
consequences as provided in Section 12(c) above for a termination of the
Executive's employment by the Company for Cause.
(ii) WITHOUT CAUSE. A termination of the Executive's employment by the
Company, other than (A) due to death, (B) due to Disability or (C) for
Cause, ("Without Cause") shall have same consequences as provided in
Section 12(d) for a termination of the Executive's employment by the
Executive for Good Reason.
(f) OTHER TERMINATION BENEFITS. In the case of any of the foregoing
terminations, to the extent not previously paid or provided or otherwise
contrary to the terms and conditions of this Agreement, the Executive or his
estate or beneficiaries, as the case may be, shall also be entitled to the
balance of any incentive awards due the Executive but not yet paid (including
awards due for performance periods that have been completed, but have not yet
been paid), any expense reimbursements due the Executive, and other benefits, if
any, in accordance with applicable plans or programs of or contracts or
agreements of the Executive with the Company.
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(g) TERMINATION FOLLOWING A CHANGE IN CONTROL. Notwithstanding anything to
the contrary in this Agreement or in the Post Spin-Off Executive Retention
Agreement, in the event the Executive's employment with the Company is
terminated within 18 months following a Change in Control, the Executive shall
be entitled to benefits equal to the greater of (i) the benefits due and payable
to him under Section 4 of the Post Spin-Off Executive Retention Agreement as a
result of such termination, or (ii) the benefits due and payable to him under
Section 12 of this Employment Agreement as a result of such termination. In
furtherance thereof, it is the Parties' understanding that in the event of a
termination under such circumstances, the Executive shall only be entitled to
receive benefits payable under one or the other of the foregoing agreements (but
not both) determined on a benefit by benefit basis by the Executive and that the
term "Other Benefits" as defined in the Post Spin-Off Executive Retention
Agreement shall not include benefits payable under this Employment Agreement.
(h) OUTPLACEMENT SERVICES. In the event that the Executive's employment is
terminated in accordance with Section 12(e)(ii) hereof without Cause or Section
12(d) for Good Reason, the Company shall provide outplacement services through
one or more outside firms of the Executive's choosing up to an aggregate of
$15,000, with such services to extend until the earlier of (i) 12 months
following the Termination Date or (ii) the date on which the Executive secures
full time employment.
(i) NATURE OF PAYMENTS. Any amounts due under this Section 12 are in the
nature of severance payments considered to be reasonable by the Company and are
not in the nature of a penalty.
(j) NO MITIGATION; NO OFFSET. The Executive shall not be required to
mitigate the amount of any payment or benefit provided in this Section 12 by
seeking other employment or otherwise. Further, except as provided in Sections
12(b)(v) and 12(d)(v), the amount of any payment or benefits provided for in
this Section 12 shall not be reduced by any compensation eamed by the Executive
as a result of employment by another employer or be offset by any amount claimed
to be owed by the Executive to the Company.
12. CONFIDENTIALITY & ASSIGNMENT OF INVENTIONS.
(a) The Executive shall execute and deliver to the Company on the Effective
Date the Company's standard employee Confidentiality and Assignment of
Inventions Agreement, substantially in the form attached hereto as EXHIBIT C.
(b) Upon the termination of the Executive's employment, the Executive (or
in the event of his death, the Executive's personal representative) shall
promptly surrender to the Company the original and all copies of any materials
containing confidential information of the Company which are then in the
Executive's possession or control, provided, however, that the Executive shall
not be required to surrender his rolodexes, personal diaries and other items of
a personal nature.
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13. NON-COMPETITION; NON-SOLICITATION.
(a) The Executive acknowledges (i) that in the course of his employment
with the Company he will become familiar with trade secrets and customer lists
of, and other confidential information concerning, the Company and its
Affiliates, customers, and clients and (ii) that his services will be of
special, unique and extraordinary value to the Company.
(b) The Executive agrees that during the Term of Employment and for a
period of one year following his termination of employment for any reason (the
"Non-Competition Period") he shall not in any manner, directly or indirectly,
through any person, firm, corporation or enterprise, alone or as a member of a
partnership or as an officer, director, stockholder, investor or employee of or
advisor or consultant to any person, firm, corporation or enterprise or
otherwise, engage or be engaged, or assist any other person, firm, corporation
or enterprise in engaging or being engaged (collectively, the "Restricted
Activity"), in any Competitive Activity (as defined below). For the purposes of
this Section 14, a "Competitive Activity" shall mean a business that (i) is
being conducted by the Company or any Affiliate at the time in question and (ii)
was being conducted, or was under active consideration to be conducted, by the
Company or any Affiliate, at the date of the termination of the Executive's
employment; provided that Competitive Activity shall not include a business of
the Company contributing less than 1% of the Company's revenues for the year in
question; and provided further that an activity shall not be deemed to be a
Competitive Activity if the activity contributes less than 1% of the revenues
for the year in question of the business by which the Executive is employed or
with which he is otherwise associated. It is agreed and understood that the
prohibitions provided for in this Section 14(b) shall not restrict the Executive
from engaging in Restricted Activity for any subsidiary, division or Affiliate
or unit of a company (collectively a "Related Entity") if that Related Entity is
not engaged in Competitive Activity, irrespective of whether some other Related
Entity of that company engages in what would otherwise be considered to be
Competitive Activity (as long as Executive does not engage in Restricted
Activity for such other Related Entity).
(c) The Executive further agrees that during the Non-Competition Period he
shall not (i) in any manner, directly or indirectly, hire or cause to be hired
any employee of or advisor or consultant (which advisor or consultant is a
natural person and not a bona fide business entity) to the Company or any of its
Affiliates for any purpose or in any capacity whatsoever, or (ii) in connection
with any business to which Section 14(b) applies, call on, service, solicit or
otherwise do business with any customer of the Company or any of its Affiliates;
provided, however, that the restriction contained in clause (i) of this Section
14(c) shall not apply to, or interfere with, the proper performance by the
Executive of his duties and responsibilities under Section 3 of this Agreement.
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(d) Nothing in this Section 14 shall prohibit the Executive from being a
passive owner of not more than two percent of the outstanding common stock,
capital stock and equity of any firm, corporation or enterprise so long as the
Executive has no active participation in the management of business of such
firm, corporation or enterprise.
If the restrictions stated herein are found by a court to be unreasonable, the
parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area and that the court shall revise the restrictions contained herein
to cover the maximum period, scope and area permitted by law.
14. REMEDIES. Each of the parties to this Agreement shall be entitled to
enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorney's fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages would not be
an adequate remedy for any breach of the provisions of this Agreement and that
any party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement. Nothing in this Section 15 is
intended to prevent the parties from raising any and all defenses with respect
to the necessity for, and scope of, such injunctive or equitable relief.
15. RESOLUTION OF DISPUTES. Subject to the provisions of Section 15 hereof
regarding specific performance and/or injunctive relief, any disputes arising
under or in connection with this Agreement shall be resolved by binding
arbitration, to be held (a) in Boston, Massachusetts with respect to disputes
arising under or in connection with this Agreement on or prior to the Spin-Off
Date or (b) in Philadelphia, Pennsylvania with respect to disputes arising under
or in connection with this Agreement after the Spin-Off Date, in each case in
accordance with the rules and procedures of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
16. EXPENSES. Subject to the provisions of Sections 15 and 16 hereof, in
the event any party hereto (for the purposes of this Section 17, the "Aggrieved
Party") seeks a judicial adjudication of, or an award in arbitration to enforce,
the Aggrieved Party's rights under, or to recover damages for the breach of,
this Agreement, the Aggrieved Party shall be entitled to recover from the other
party or parties, as the case may be, and shall be indemnified by the other
party or parties, as the case may be, against, any and all costs actually and
reasonably incurred by the Aggrieved Party in such judicial adjudication or
arbitration, including, without limitation, reasonable attorney's fees, but only
if the Aggrieved Party prevails in such proceeding.
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17. LIABILITY INSURANCE. The Company agrees to obtain, continue and
maintain a directors' and officers' liability insurance policy covering the
Executive to the extent the Company provides such coverage for its other senior
executives. The Parties shall enter into an Indemnification Agreement on the
Effective Date in the form attached hereto as EXHIBIT D.
18. ASSIGNABILITY; BINDING NATURE. This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective successors, heirs (in
the case of the Executive) and assigns. Rights or obligations of the Company
under this Agreement may be assigned or transferred by the Company pursuant to a
merger or consolidation in which the Company is not the continuing entity, or
the sale or liquidation of all or substantially all of the assets of the
Company, provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee
assumes the liabilities, obligations and duties of the Company, as contained in
this Agreement, either contractually or as a matter of law. The Company further
agrees that, in the event of a sale of assets or liquidation as described in the
preceding sentence, it shall take whatever action it reasonably can in order to
cause such assignee or transferee to expressly assume the liabilities,
obligations and duties of the Company hereunder. No rights or obligations of the
Executive under this Agreement may be assigned or transferred by the Executive
other than his rights to compensation and benefits, which may be transferred
only by will or operation of law.
19. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants that it has all requisite corporate
power and authority to enter into this Agreement and that the performance by the
Company of its obligations under this Agreement will not violate any agreement
to which it is a party.
(b) The Executive represents that the execution of this Agreement by the
Executive and the performance by him of his obligations hereunder will not
violate any agreement to which he is a party.
(c) The Executive hereby represent and warrants that he is not bound by the
terms of any agreement with any previous employer or other party to refrain from
competing, directly or indirectly, with the business of such previous employer
or any other party. The Executive further represents and warrants that
Executive's performance of all the terms of this Agreement and as an employee of
the Company does not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by the Executive in
confidence or in trust prior to Executive's employment with the Company. The
Executive will not disclose to the Company or induce the Company to use any
confidential or proprietary information or material belonging to any previous
employer or others. The Executive will not hereafter grant anyone any rights
inconsistent with the terms of this Agreement.
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20. ENTIRE AGREEMENT. This Agreement and the Exhibits attached hereto and
incorporated herein by reference contain the entire understanding and agreement
between the Parties concerning the subject matter hereof and thereof and
supersede all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the Parties with respect thereto.
This is an integrated document.
21. AMENDMENT OR WAIVER. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by the Executive and an
authorized officer of the Company, other than the Executive. No waiver by either
Party of any breach by the other Party of any condition or provision contained
in this Agreement to be performed by such other Party shall be deemed a waiver
of a similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any such waiver must be in writing and signed by the Executive
or an authorized officer of the Company, other than the Executive, as the case
may be.
22. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law so as to achieve the purposes of this Agreement.
23. SURVIVORSHIP. Except as otherwise expressly set forth in this
Agreement, the respective rights and obligations of the Parties hereunder shall
survive any termination of the Executive's employment. This Agreement itself (as
distinguished from the Executive's employment) may not be terminated by either
Party without the written consent of the other Party.
24. REFERENCES. In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative.
25. GOVERNING LAW/JURISDICTION. This Agreement shall be governed in
accordance with the laws of the Commonwealth of Massachusetts without reference
to principles of conflict of laws.
26. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed given when (a) delivered
personally, (b) sent by certified or registered mail, postage prepaid, return
receipt requested or (c) delivered by overnight courier (provided that a written
acknowledgment of receipt is obtained by the overnight courier) to the Party
concerned at the address indicated below or to such changed address as such
Party may subsequently give such notice of:
If to the Company: Viasys Healthcare Inc.
c/o Thermo Respiratory & Sensormedics
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00000 Xxxx Xxxxx Xxxxxxx
Xxxxx Xxxxx, XX 00000
Attention: Chief Operating Officer
Copy to: Chairman, Medical/Surgical Business Unit
Committee of the Board of Directors
Prior to the Spin-Off Date, copy to: Thermo Electron Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
If to the Executive: Xxxxxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
27. HEADINGS. The headings of the sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
28. COUNTERPARTS. This Agreement may be executed in counterparts.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
VIASYS HEALTHCARE INC.
By: /s/ XXXXX X. XXXXXXX
------------------------------------
Name: Xxxxx X.Xxxxxxx
Title: President and Chief
Executive Officer
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Executive
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