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EXHIBIT 10.31
[CARDIAC PATHWAYS CORPORATION LETTERHEAD]
March 6, 1998
VIA FACSIMILE
REVISED OFFER LETTER
THIS SUPERSEDES THE FEBRUARY 24,
1998 OFFER LETTER.
XXX XXXX, Ph.D.
25526 Xxx Xxxxx
Xxxxxxxx, XX 00000
Dear Xxx:
This letter when signed by you, will constitute an agreement between Cardiac
Pathways Corporation (the "Company") and you (the "Executive") concerning your
employment.
1. The Company hereby hires the Executive and the Executive hereby accepts
employment as Vice President -- International.
2. The Company agrees to pay the Executive an annual base salary of
$150,000.00 payable in accordance with the Company's standard payroll
policy.
3. Upon approval of the Board of Directors, and subject to all applicable
Federal and State securities laws, the Company shall grant you an option
to acquire 90,000 shares of the Company's Common Stock, at a purchase
price equal to the fair market value of such common stock on the date of
action by the Board. The vesting shall be over a four-year period with
12/48ths of the total shares vesting after one year of employment and
thereafter vesting 1/48th of the total remaining shares each month of
your continuing employment. Please refer to the Company's Stock Option
Plan for further details and terms.
4. It is expected that your first day of employment with Cardiac Pathways
will be April 6, 1998.
5. a. The term of this Agreement shall commence on your first day of
employment and shall continue until terminated by either party in
accordance with the provisions of this Section 5.
b. This Agreement may be terminated by the Company at any time for
Justifiable Cause (as hereinafter defined) provided that the
Company shall pay the Executive an amount equal to the sum of his
then current base salary as a severance payment for one month
following the date of termination. For the purpose of this
Agreement, the term "Justifiable Cause" shall include the
occurrence of any of the following events: (i) the Executive's
conviction for, or plea of nolo contendere, a felony or a crime
involving moral turpitude, (ii) the Executive's commission of an
act of personal dishonesty or breach of
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Offer Letter
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fiduciary duty involving personal profit in connection with the
Company, (iii) the Executive's commission of an act, or failure
to act, which the Executive's supervisor at the Company shall
reasonably have found to have involved misconduct or gross
negligence on the part of the Executive, in the conduct of his
duties hereunder, (iv) habitual absenteeism, alcoholism or drug
dependency on the part of the Executive which interfere with the
performance of his duties hereunder, (v) the Executive's willful
and material breach or refusal to perform his services as
provided herein, (vi) any other material breach of this Agreement
or (vii) the willful and material failure or refusal to carry out
a direct request of the Executive's supervisor. The payment to
the Executive of the severance payment described in this Section
5(b) will discharge all of the Company's obligations to the
Executive.
c. This Agreement may be terminated by the Company at any time
without Justifiable Cause provided that the Company shall pay the
Executive an amount equal to the sum of his then current monthly
base pay as a severance payment for a period of six months
following the date of termination, or until the Executive finds
other employment, whichever is shorter. Any payments made
pursuant to this Section 5(c) shall be reduced to the extent the
Executive received any other earnings related to employment or
consulting services or other unemployment or disability
compensation during the six month period. The payment of the
Executive of the severance payment described in this Section 5(c)
will discharge all of the Company's obligations (subject to the
provisions noted in Section 6) to the Executive. If such
termination takes place in the first year of the Executive's
employment with the company, the incentive stock option will vest
at 1/48th per month, and the one year waiting period pursuant to
Section 3 shall be waived.
d. This Agreement may be terminated by the Executive at any time
upon 30 days written notice, in which case the Company shall have
no severance or other obligations to the Executive.
6. Notwithstanding anything set forth in this Section 6, upon the
Executive's involuntary termination of employment from the Company (for
any reason other than for Justifiable Cause) on or after an Acquisition
(as defined below), the 90,000 shares of Common Stock described in
Section 3 above shall be fully and immediately exercisable. For purposes
of this Section 6, an Acquisition shall be defined as a merger,
reorganization, or sale of all or substantially all of the assets
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Offer Letter
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of the Company in which shareholders of the Company immediately prior
to the transaction possess less than fifty percent (50%) of the voting
power of the surviving entity (or its parent) immediately after the
transaction. The resignation of the Executive after a Constructive
Termination (as defined below) shall be treated as an involuntary
termination of employment under this Section 6. For purposes of this
Section 6, a Constructive termination shall mean a material reduction
in salary or benefits, a material change in responsibilities, a
requirement to relocate, except for office relocations that would not
increase the Executive's one-way commute distance by more than
thirty-five (35) miles.
7. The Executive will be eligible to participate in any insurance or other
benefit plan as may be sponsored or maintained by the Company from time
to time for its employees. Cardiac Pathways currently offers medical,
dental, vision, life and long-term disability insurance, a 401k,
flexible benefits and an Employee stock purchase plan.
8. As additional compensation, Cardiac Pathways Corporation, referred to as
the Company will pay up to S2,000 per month to the Executive for the
Executive's temporary living expenses (i.e. rent for an apartment or
home in the San Francisco Bay area). Based upon the effective State and
Federal tax rate of the Executive for the 1998/1999 tax years, the
Company will gross up the $2,000 per month payment to cover the State
and Federal taxes. The temporary living expense allowance will terminate
after twelve months. In addition, if the Executive utilizes the loan
program outlined in Section 11, the temporary living expense allowance
will terminate. The Company will also pay the cost of round-trip
airplane tickets to Burbank, California to expedite the transition to
the Bay area in an amount not to exceed $ 1,000.
9. The Company will also pay the following expenses, to help move the
Executive to the Bay area:
a. All expenses incurred in moving the Executive's personal
belongings, from the Valencia area to the San Francisco Bay area
in an amount not to exceed $16,000.
b. Real estate commissions paid by the Executive to the Executive's
real estate broker in connection with the sale of the Executive's
home in Valencia, California in an amount not to exceed $20,000.
Based upon the effective
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State and Federal tax rate of the Executive at the time of the
house sale, the Company will gross up this payment to cover
State and Federal taxes.
c. Closing costs up to $5,000 on the purchase of a residential
dwelling in the San Francisco Bay area during the Executive's
tenure at the Company. This amount will be taxable to the
Executive.
d. Under the above Sections (a) through (c), the offer of payment
for stated expenses will expire within twenty-four (24) months of
the Executive's hire date.
10. The total amount allowed under sections 8 and 9 will not exceed $66,000.
11. After the Executive has purchased a home in the San Francisco Bay area,
the Company will lend the Executive each month for a maximum period of
sixty (60) months an amount equal to the difference between the
Executive's monthly mortgage for the Executive's current residence and
the monthly mortgage payment for the Executive's home in the San
Francisco Bay area, up to a maximum of $1,000 per month. This loan will
be due on the earlier of (i) seven (7) years from the date of the first
monthly loan, or (ii) six months after the termination of the
Executive's employment with the Company. The loan will bear interest at
the applicable federal rate as defined in the Internal Revenue Code of
1986 and the regulation thereunder, and be secured by a trust deed on
the Executive's new residence. Under section 9, the offer of this loan
will expire within twenty-four (24) months of the Executive's hire date.
In the event the Company institutes a bankruptcy proceeding of itself or
all of its property under the laws of any jurisdiction prior to the loan
maturity date, the Company agrees to waive repayment of the loan.
12. Beginning in the Company's 1999 fiscal year, a bonus plan for the
Executive will be presented to the Board of Directors. The bonus plan
will allow for a maximum payout of $50,000 based upon the attainment of
goals for the Company's international business.
13. This offer is contingent upon Cardiac Pathways receiving the enclosed
Proprietary Information agreement which must be executed by you.
14. In accordance with Federal immigration law, on your first day of
employment, we
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XXX XXXX, Ph.D.
Offer Letter
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will need to see documents proving your identity and eligibility to work
in the United States. Documents which can satisfy these requirements are
a valid driver's license and a social security card or a United States
passport.
15. Your employment is at will, as defined under applicable law. If your
employment terminates for any reason, you shall not be entitled to any
payments, benefits, damages, awards or compensation other than as
provided above, or as otherwise be available in accordance with the
Company's established employee plans and policies at the time of
termination.
16. This offer of employment will expire on Monday, March 9, 1998 at 5: 00
p.m.
If the terms of this letter and the enclosed Proprietary Information agreement
are agreeable, please sign and return one copy of this letter and the agreement
to our Human Resources Department. We look forward to working with you at
Cardiac Pathways.
Best personal regards,
/s/ XXXXX X. XXXXXX, CFO
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FOR: Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
Enclosures
Accepted effective as of 9th March, 1998.
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Start date effective no later than April 6, 1998.
/s/ XXX XXXX
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XXX XXXX
