EXHIBIT 10.1
GYNECARE, INC
EMPLOYMENT AGREEMENT
This Agreement dated as of the sooner of April 21, 1997 (the "Effective
Date") or the earlier date you report for employment, is made by and between
Gynecare, Inc. (the "Company") and Xxxxxxxx Xxxxxx ("Employee").
1. Duties and Scope of Employment.
(a) Employment and Duties. Beginning on the Effective Date, the
Company agrees to employ the Employee, and Employee agrees to be employed as
Chief Executive Officer of the Company, with responsibilities and authority
comparable to CEO's of similarly situated companies. Employee shall assume
and discharge such duties as are mutually agreed upon by the Company and
Employee and as are commensurate with such position. During the term of the
Employee's employment with the Company, the Employee shall devote her full
time, skill and attention to her duties and responsibilities, which the
Employee shall perform faithfully, diligently and competently, and the
Employee shall use her best efforts to further the business of the Company
and its affiliated entities. Nothing in this paragraph shall prohibit
Employee from serving simultaneously as a director on the board of a
charitable organization or other company, provided that such service does not
substantially detract from her service to the Company.
(b) Term of Employment. Employee's employment with the Company is
for no specified period and constitutes at will employment and either
Employee or the Company may terminate Employee's employment with the Company
at any time with or without cause.
2. Base Compensation. The Company shall pay the Employee as
compensation for her services hereunder a base salary at the annualized rate
of $200,000 (the "Base Salary"). Such salary shall be paid periodically in
accordance with normal Company payroll practices. Employee's Base Salary
shall not be reduced during the term of her employment, except consistent
with salary reductions affecting other members of senior management.
3. Stock Options.
(a) Incentive Stock Options. The Company agrees to grant, at the
next meeting of the Board of Directors following the Effective Date, (i) an
incentive stock option entitling Employee to purchase up to 50,000 shares of
Common Stock which shall be fully vested and exercisable on the date of grant
and (ii) an incentive stock option entitling Employee to purchase up to
250,000 shares of Common Stock which shall vest over four years in accordance
with the Company's standard form of option agreement. The exercise prices of
both such options shall be the fair market value of the Company's Common
Stock as determined by the Board in accordance with the Company's stock
option plan on the date of grant and the term of such options shall be ten
years from the date of grant. In addition, such options shall be subject to
the stockholder approval of an increase in the Company's stock option pool of
the 1997 annual meeting of stockholders of the Company.
(b) Performance Based Bonus Option. The Company agrees to grant,
at the next meeting of the Board of Directors following the Effective Date,
an incentive stock option to purchase up to 150,000 shares of Common Stock
which shall vest upon satisfaction of milestones to be mutually agreed upon
by the Board and the Employee within 90 days after execution of this
Agreement (provided, however, that such option shall become vested in full,
if not already vested on the last business day prior to expiration of the
option). The exercise price of such option shall be the fair market value of
the Company's Common Stock as determined by the Board in accordance with the
Company's stock option plan on the date of grant and the term of such option
shall be ten years from the date of grant. In addition, such option shall be
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subject to the stockholder approval of an increase in the Company's stock
option pool of the 1997 annual meeting of stockholders of the Company.
(c) Acceleration of Vesting. The option agreement evidencing the
250,000 share option grant specified in section 3 (a)(ii) above shall provide
that in the event that Employee's employment with the Company is terminated
without Cause (as defined in Section 6 below) by the Company, such option
shall be exercisable as of the date of such termination for the number of
shares of Common Stock for which such option was vested on such date plus
that number of additional shares as would have become vested under the terms
of such option had Employee remained employed by the Company for a period of
12 months following the date of Employee's termination. In addition, the
option agreement evidencing the 250,000 share option grant specified in
Section 3 (a)(ii) above shall provide that in the event of (i) the Company's
sale of all or substantially all of its assets or (ii) the merger of the
Company with or into another corporation such that the holders of the
outstanding voting equity securities of the Company immediately prior to such
transaction hold fewer than fifty percent (50%) of the voting equity
securities of the surviving entity immediately following such transaction,
such option shall become fully vested and exercisable.
4. Employee Benefits. The employee shall be eligible to participate
in the employee benefit plans and executive compensation programs maintained
by the Company applicable to other executives of the Company, including
(without limitation) retirement plans, savings or profit sharing plans, stock
option, incentive or other bonus plans, life, disability, health, accident
and other insurance programs, and similar plans or programs, subject, in each
case, to the generally applicable terms and conditions of the applicable plan
or program in question and to the determination of any committee or employee
administering such plan or program. In addition, Employee shall accrue three
weeks of paid vacation per year, which may be carried over from year to year
if not used, in accordance with the Company's policies for other members of
senior management.
5. Expenses. The Company will pay or reimburse Employee for
reasonable travel, entertainment or other expenses incurred by Employee in
the furtherance of or in connection with the performance of Employee's duties
hereunder in accordance with the Company's established policies. Such
reimbursement shall not be limited by the extent to which expenses may be
deductible by the Company for federal income tax purposes. Employee shall
furnish the Company with evidence of the incurrence of such expenses within a
reasonable period of time from the date that they were incurred. The Company
will pay or reimburse Employee for reasonable relocation expenses mutually
agreed to by the Company and Employee, but not to exceed $25,000.
6. Termination.
(a) Termination by Company. If Employee is terminated for Cause
(as defined below), then Employee shall not be entitled to receive severance
or other benefits. If the Company terminates Employee's employment other
than for Cause, then Employee shall be entitled to receive her Base Salary
for a period of 12 months from the date of such termination (the "Payment
Period") (less applicable withholding taxes and such amounts, if any, owed by
Employee to the Company); provided, however, the amount of Base Salary that
the Employee shall be entitled to receive shall be reduced by any other
employment or consulting based compensation (including any deferred cash
compensation but not including stock options) that Employee receives after
the date of such termination and prior to the end of Payment Period. Such
amounts shall be paid periodically in accordance with the Company's normal
payroll practices. The payment of any remaining Base Salary shall be the
sole amount due to Employee upon such a termination and Employee shall have
no other remedy from Company for termination of employment. In case of any
termination of Employee's Employment, Employee shall have the right to
convert her health insurance benefits to individual coverage pursuant to
COBRA. Should Employee so elect, the Company shall reimburse Employee for
health care coverage through the Payment Period.
(b) Termination by Employee. If Employee voluntarily terminates
her employment with the Company, then Employee shall not be entitled to
receive severance benefits, except for those, if any, as may then be
established and applicable under the Company's severance and benefits plan
and policies existing at the time of such termination. This limitation shall
not affect Employee's right to accrued vacation pay or stock option rights
vested under separate agreements.
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(c) Definition of Cause. For purposes of this Agreement, the term
"Cause" is defined as any one or more of the following occurrences:
(i) Employee's continued failure to perform her duties and
responsibilities in good faith and to the best of her ability for a period of
30 days after written notice thereof from the Company to the Employee; or
(ii) Employee's conviction by, or entry of a plea of guilty
or nolo contendere in, a court of competent and final jurisdiction for any
crime which constitutes a felony in the jurisdiction involved; or
(iii) Employee's commission of an act of fraud or
misappropriation of funds, whether prior or subsequent to the date hereof,
upon the Company; or
(iv) Employee's breach of material provision of this Agreement
or Employee's Confidential Information and Invention Assignment Agreement
with the Company; or
(v) Gross negligence by Employee in the scope of her services
to the Company; or
(vi) Employee's commencement of employment (as an employee or
a consultant) with another employer while she is an employee of the Company
(not including limited service as a board member as permitted under paragraph
1(a)); or
(vii) Material nonconformance with the Company's standard
business practices and policies generally, including but not limited to
policies against racial or sexual discrimination or harassment, made known to
Employee or delivered in writing to Employee.
(d) If Employee, following Company's merger with another company
or Company's sale of substantially all of its assets, is assigned a position
which is not substantially comparable to her CEO position under this
Agreement (in authority, responsibility and compensation), and Employee
therefore decides to leave the Company, the resulting termination shall be
treated as a termination by Company under paragraph 6(a) and not as a
termination by Employee under paragraph 6(b). This provision shall be
binding on the Company's successors and assigns.
7. Arbitration; Consent to Personal Jurisdiction.
(a) Employee agrees that any dispute or controversy arising out
of, relating to, or in connection with this Agreement, or the interpretation,
validity, construction, performance, breach, or termination thereof, shall be
settled by binding arbitration to be held in San Francisco, California, in
accordance with the California Employment Dispute Resolution Rules then in
effect of the American Arbitration Association (the "Rules"). The arbitrator
may grant injunctions or other relief in such dispute or controversy. The
decision of the arbitrator shall be final, conclusive and binding on the
parties to the arbitration. Judgment may be entered on the arbitrator's
decision in any court having jurisdiction.
(b) The arbitrator(s) shall apply California law to the merits of
any dispute or claim, without reference to rules of conflicts of law. The
arbitration proceedings shall be governed by federal arbitration law and by
the Rules, without reference to state arbitration law.
(c) The Company and Employee shall each pay one-half of the costs
and expenses of such arbitration, and each shall separately pay its counsel
fees and expenses provided that the arbitrator may award such costs and fees
to the substantially prevailing party.
(d) EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION 7, WHICH
DISCUSSES ARBITRATION. EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
EMPLOYEE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY,
CONSTRUCTION, PERFORMANCE BREACH OR TERMINATION THEREOF TO BINDING
ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER
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OF EMPLOYEE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL
DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP,
INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:
(i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT;
BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD
FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL
INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION;
NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC
ADVANTAGE; AND DEFAMATION.
(ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR
MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL
RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN
EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR
LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND
LABOR CODE SECTION 201, et seq;
(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND
REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
8. General Provisions.
(a) Entire Agreement. This Agreement represents the entire
agreement and understanding between the parties as to the subject matter
hereof, and supersedes all prior or contemporaneous agreements, whether
written or oral. No waiver, alteration, or modification, if any, of the
provisions of this Agreement shall be binding unless in writing and signed by
duly authorized representatives of the parties hereto.
(b) Severability. If one or more of the provisions of this
Agreement are deemed void by law, then the remaining provisions will continue
in full force and effect.
(c) Successors.
(i) Company's Successors. Any successor to the Company
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement
in the same manner and to the same extent as the Company would be required to
perform such obligations in the absence of a succession. For all purposes
under this Agreement, the term "Company" shall include any successor to the
Company's business and/or assets which executes and delivers the assumption
agreement described in this subsection (a) or which becomes bound by the
terms of this Agreement by operation of law.
(ii) Employee's Successors. The terms of this Agreement and
all rights of the Employee hereunder shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devises and legatees.
(d) Conflicting Obligations. Employee represents that he has not
entered into, and will not enter into, any oral or written agreement in
conflict herewith.
(e) Counterparts. This Agreement may be executed by either of the
parties hereto in counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the
same instrument.
(f) Governing Law; Consent to Personal Jurisdiction. This
Agreement shall be governed by and construed in accordance with the internal
substantive laws, and not the choice of law rules, of the State of
California.
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Employee hereby consents to the personal jurisdiction of the state and
federal courts located in California for any action or proceeding arising
from or relating to this Agreement or relating to any arbitration in which
the parties are participants.
(g) Notice. Any notice or communication required or permitted
under this Agreement shall be made in writing and delivered personally to the
other party or sent by certified or registered mail, return receipt requested
and postage prepaid at the address set forth on the signature page below.
Date: 3-30-97 /s/ XXXXXXXX XXXXXX
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Xxxxxxxx Xxxxxx
GYNECARE, INC.
Date: By: /s/ A. XXXXX XXXXXXXX
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A. Xxxxx Xxxxxxxx, Director of Gynecare, Inc.
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EXHIBIT A
LIST OF PRIOR INVENTIONS
AND ORIGINAL WORKS OF AUTHORSHIP
Title Date Identifying Number or Brief Description
--------------------------------------------------------------------------------
x No inventions or improvements
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Additional Sheets Attached
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Signature of Employee: /s/ XXXXXXXX XXXXXX
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Print Name of Employee: Xxxxxxxx Xxxxxx
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Date: 3-30-97
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