Exhibit 10.30
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is dated December 31,
1996, by and among Summit Medical Systems, Inc., a Minnesota corporation
("Purchaser"), X. X. XxXxxxxx & Associates, Inc. (the "Company"), and Xxxxxxx X.
XxXxxxxx, an individual resident of the state of Maryland ("Executive").
WHEREAS, Executive has heretofore been employed as an executive
officer of the Company;
WHEREAS, Purchaser has agreed to acquire the Company pursuant to an
Agreement and Plan of Merger, dated December 31, 1996 by and among Purchaser,
CLM Acquisition Corp., a Minnesota corporation ("Merger Subsidiary") and the
Company (the "Merger Agreement"), which provides for the merger of the Company
with and into Merger Subsidiary (the "Merger") (all capitalized terms not
defined herein are as defined in the Merger Agreement);
WHEREAS, Purchaser and the Company have further agreed on, among other
things, the execution of this Agreement; and
WHEREAS, the Company desires to retain the services of Executive
subsequent to the consummation of the Merger, and Executive desires to be
employed by the Company, on the terms and subject to the conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the respective covenants and
commitments of Purchaser, the Company and Executive set forth below, and as an
inducement to Purchaser to consummate the Merger, the Company and Executive
hereby agree as follows:
1. Employment. The Company hereby employs Executive, and Executive
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accepts such employment and agrees to perform services for the Company, for the
period and upon the other terms and conditions set forth in this Agreement.
Purchaser agrees that it is jointly and severally liable with the Company for
all duties and obligations undertaken by the Company under this Agreement,
including, but not limited to, payment of Executive's compensation and provision
of his benefits.
2. Term. Unless terminated at an earlier date in accordance with
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Section 9 of this Agreement, the term of Executive's employment hereunder shall
commence on the day following the Effective Time and shall extend for a
continuous period until three years from the date thereof. Thereafter, the terms
of this Agreement shall be extended for successive one year periods unless
Purchaser, the Company or Executive objects to such extension by written notice
to the other party at least 90 days prior to the expiration of such initial term
or any extension thereof.
3. Position and Duties.
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3.01 Service with Company. During the term of this
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Agreement, Executive agrees to serve as President of the Company and Vice
President of the Purchaser and to perform such employment duties, consistent
with the position of President of the Company and Vice President of the
Purchaser, as shall be assigned to him from time to time. Purchaser agrees to
appoint Executive, and Executive agrees to serve, as a member of the Board of
Directors of the Company, and as a member of the executive council of the
Purchaser.
3.02 Performance of Duties. Executive agrees to serve the
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Company faithfully and to the best of his ability and to devote his full time,
attention and efforts to the business and affairs of the Company during the term
of his employment. Executive hereby confirms that he is under no contractual
commitments inconsistent with his obligations set forth in this Agreement and
that, during the term of his employment, he will not render or perform any
services for any other corporation, firm, entity or person which are
inconsistent with the provisions of this Agreement or which would otherwise
impair his ability to perform his duties hereunder.
4. Compensation.
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4.01 Base Salary. As base compensation for all services to
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be rendered by Executive under this Agreement during the term of this Agreement,
the Company shall pay to Executive an annual salary of $175,000 in accordance
with normal payroll procedures and policies.
4.02 Incentive Compensation. Executive shall be entitled to
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participate in such bonus or incentive compensation plans as may be established
by Purchaser's Board of Directors from time to time for Purchaser's executive
level employees.
4.03 Option. On the date Executive's employment hereunder
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with the Purchaser commences, the Purchaser shall grant Executive an employee
stock option to purchase 70,000 shares of Common Stock of the Purchaser under
the Purchaser's 1993 Stock Option Plan (the "Option Plan"), subject to the terms
of the Stock Option Agreement between the Purchaser and the Executive, dated
December 31, 1996.
4.04 Participation in Benefit Plans. During the term of
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Executive's employment by the Company, Executive shall be entitled to receive
such life, disability, medical, dental and other insurance coverage (including
directors and officers insurance) as are being provided by the Purchaser to its
executive level employees from time to time to the extent that Executive's age,
position or other
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factors qualify him for such fringe benefits. The current benefits to which
Executive is entitled are set forth on Schedule 4.04 hereto.
Nothing in this Agreement is intended to or shall in any way restrict
Purchaser's right to amend, modify or terminate any of its benefit plans during
the term of Executive's employment.
4.05 Expenses. In accordance with the Company's normal
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policies for expense verification, the Company will pay or reimburse Executive
for all reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the presentment of
appropriate documentation in accordance with Purchaser's normal policy for
expense verification.
5. Confidential Information. Except as permitted or directed by
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Purchaser, during the term of this Agreement or at any time thereafter,
Executive shall not divulge, furnish or make accessible to anyone or use in any
way (other than in the ordinary course of the business of the Company) any
confidential or secret knowledge or information of the Company or of any
affiliate of the Company including Purchaser and its other subsidiaries
(collectively, the "Purchaser Affiliates") which Executive has acquired or
become acquainted with prior to the term of this Agreement while working for the
Company or will acquire or become acquainted with during the term of this
Agreement, whether or not during regular working hours, in each case, whether
developed by himself or by others, concerning any trade secrets, confidential or
secret designs, processes, formulae, plans, devices or material (whether or not
patented or patentable) directly or indirectly useful in any aspect of the
business of the Company or of any Purchaser Affiliate, any customer or supplier
lists of the Company or of any Purchaser Affiliate, any confidential or secret
development or research work of the Company or of any Purchaser Affiliate, or
any other confidential information or secret aspects of the business of the
Company or of any Purchaser Affiliate. Executive acknowledges that the above-
described knowledge or information constitutes a unique and valuable asset of
the Company and of the respective Purchaser Affiliates and represents a
substantial investment of time and expense by the Company and by the Purchaser
Affiliates and that any disclosure or other use of such knowledge or information
other than for the sole benefit of the Company or of any Purchaser Affiliate
would be wrongful and would cause irreparable harm to such Purchaser Affiliate.
Both during and after the term of this Agreement, Executive will not
intentionally act in any manner that is reasonably likely to reduce the value of
such knowledge or information to any Purchaser Affiliate. The foregoing
obligations of confidentiality shall not apply to any knowledge or information
which before being divulged by the Executive (i) has become generally known to
the public through no wrongful act of the Executive; (ii) has been rightfully
received by the Executive from a third party without restriction on disclosure
and without breach of an obligation of confidentiality running either directly
or indirectly to any Purchaser Affiliate;
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(iii) has been approved for release and released to the general public by
written authorization of any Purchaser Affiliate; (iv) has been disclosed
pursuant to a requirement of a governmental agency or of law without similar
restrictions or other protections against public disclosure, or has been
required to be disclosed by operation of law; or (v) is independently developed
by the Executive without use, directly or indirectly, of any knowledge or
information that is proprietary knowledge or information of the Company or any
Purchaser Affiliate.
6. Ventures. If, during the term of Executive's employment
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pursuant to this Agreement, Executive is engaged in or associated with the
planning or implementing of any project, program or venture involving the
Company and a third party or parties, all rights in such project, program or
venture shall belong to the Company. Except as formally approved by Purchaser's
Board of Directors, Executive shall not be entitled to any interest in such
project, program or venture or to any commission, finder's fee or other
compensation in connection therewith other than the salary to be paid to
Executive as provided in this Agreement.
7. Intellectual Property.
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7.01 Assignment. Executive hereby assigns and agrees to assign
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to the Company, to the extent such rights are not already owned by the Company,
(a) all tangible embodiments of and intellectual property rights in developments
made or conceived by Executive solely or in collaboration with others prior to
his employment with the Company and provided to the Purchaser or the Company
directly, or indirectly through any predecessor entity to the Company, by
Executive and (b) all intellectual property rights in developments made or
conceived by Executive solely or in collaboration with others during the term of
his employment by the Company. Executive further agrees that all copyrightable
works made by Executive for the Company shall be considered "works made for
hire" for the benefit of the Company and to the extent not qualifying as "works
made for hire" are hereby assigned to the Company. Executive will disclose
promptly and fully to the Company all developments owned by the Company under
this Agreement. Executive warrants that his rights in developments assigned to
the Company by this Agreement have not been previously licensed, pledged,
assigned or encumbered by Executive.
7.02 Records. Executive will keep complete and accurate
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accounts, notes, data and records of all developments in the manner and form
requested by the Company. Such accounts, notes, data and records shall be the
property of the Company, and, upon request by the Company, Executive will
promptly surrender the same to it or, if not previously surrendered upon its
request or otherwise, Executive will surrender the same, and all copies thereof,
to the Company upon the conclusion of his employment.
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8. Noncompetition and Nonsolicitation Covenants.
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8.01 Agreement Not to Compete. Executive agrees that during
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the term of his employment by the Company and for one year thereafter (whether
termination of employment is with or without cause, or whether it is occasioned
by Executive or the Company), (the "Restricted Period"), subject to the
following proviso, he shall not, directly or indirectly, engage in competition
with the Company in any manner or capacity (e.g. as an adviser, principal,
agent, partner, officer, director, stockholder employee, member of an
association (other than an industry trade association or similar professional
society) or otherwise) in any phase of the business which the Company is
conducting during the term of this Agreement or any extensions thereof, provided
however in the event of termination pursuant to 9.01(d) or 9.01(e), Executive
shall be solely obligated not to engage in competition with the Company during
the Restricted Period in the business of clinical trials management.
8.02 Geographic Extent of Covenant. The obligations of
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Executive under Section 8.01 shall apply to all markets, domestic or foreign, in
which the Company has engaged in business during the term of this Agreement or
any extensions thereof, through production, promotional sales or marketing
activities or has otherwise established goodwill, business reputation or any
customer or supplier relationships.
8.03 Nonsolicitation; Non-hire and Noninterference. During
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the term of this Agreement and for the Restricted Period, Executive shall not
(a) induce or attempt to induce any employee of the Company or of any Purchaser
Affiliate to leave the employ of the Company or such Purchaser Affiliate,
respectively, or in any way interfere adversely with the relationship between
any such employee and such Purchaser Affiliate, (b) induce or attempt to induce
any employee of the Company or of any Purchaser Affiliate to work for, render
services or provide advice to or supply confidential business information or
trade secrets of any Purchaser Affiliate to any third person, firm or
corporation, (c) employ, or otherwise pay for services rendered by, any employee
of the Company or any Purchaser Affiliate in any business enterprise with which
Executive may be associated, connected or affiliated or (d) induce or attempt to
induce any customer, supplier, licensee, licensor or other business relation of
the Company or of any Purchaser Affiliate to cease doing business with the
Company or such Purchaser Affiliate, respectively, or in any way interfere with
the relationship between any such customer, supplier, licensee, licensor or
other business relation and the Company or such Purchaser Affiliate.
8.04 Indirect Competition or Solicitation. Executive agrees
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that, during the term of this Agreement and the period covered by Sections 8.01
or 8.03 hereof, he will not, directly or indirectly, assist or encourage any
other person in carrying out, directly or indirectly, any activity that would be
prohibited by the
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provisions of Sections 8.01 or 8.03 if such activity were carried out by
Executive, either directly or indirectly; and, in particular, Executive agrees
that he will not, directly or indirectly, induce any employee of the Company or
of any Purchaser Affiliate to carry out, directly or indirectly, any such
activity.
9. Termination.
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9.01 Grounds for Termination. This Agreement shall terminate
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prior to the expiration of the initial term set forth in Section 2 or any
extension thereof in the event that at any time during such initial term or any
extension thereof :
(a) Executive dies, or
(b) Executive becomes disabled (as defined below), so that he
cannot perform the essential functions of his position with
or without reasonable accommodation, or
(c) The Board of Directors of Purchaser elects to terminate this
Agreement for "cause" and notifies Executive in writing of
such election, or
(d) The Board of Directors of Purchaser elects to terminate this
Agreement without "cause" and notifies Executive in writing
of such election, or
(e) Executive elects to terminate this Agreement and notifies
Purchaser in writing of such election.
If this Agreement is terminated pursuant to the subsections of
this Section 9.01, such termination shall be effective immediately.
9.02 "Cause" Defined.
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(a) Executive has breached the provision of sections 5, 6, 7 or
8 of this Agreement in any material respect, or
(b) Executive has engaged in willful and material misconduct,
including willful and material failure to perform
Executive's duties as an officer of employee of the Company
and has failed to "cure" such default within thirty (30)
days after receipt of written notice of default from the
President of Purchaser, or
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(c) Executive has committed fraud, misappropriation or
embezzlement in connection with the Company's business, or
(d) Executive has been convicted (and all appeals therefrom have
been exhausted) or has pleaded nolo contendere to criminal
misconduct (except for parking violations, occasional minor
traffic violations and similar infractions), or
(e) Executive's established use of narcotics, liquor or illicit
drug has a detrimental effect on the performance of his
employment responsibilities, as determined in good faith by
Purchaser's Board of Directors.
In the event that Purchaser terminates Executive's employment for
"cause" pursuant to subsection 9.01(c) and Executive objects in writing to the
Board's determination that there was proper "cause" for such termination within
twenty (20) days after Executive is notified of such termination, the matter
shall be resolved by arbitration in accordance with the provisions of Section
10.01. If Executive fails to object to any such determination of "cause" in
writing within such twenty (20) day period, he shall be deemed to have waived
his right to object to that determination. If such arbitration determines that
there was not proper "cause" for termination, such termination shall be deemed
to be a termination pursuant to subsection 9.01(d) and Executive's sole remedy
shall be to receive the wage continuation benefits contemplated by Section 9.06.
9.03 Effect of Termination Notwithstanding any termination
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of this Agreement, Executive, in consideration of his employment hereunder to
the date of such termination, shall remain bound by the provisions of this
Agreement which specifically relate to periods, activities or obligations upon
or subsequent to the termination of Executive's employment.
9.04 "Disability" Defined. For the purposes of this Agreement,
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the term "disability" shall mean the physical or mental illness or disability of
the Executive, which renders him unable to perform his duties hereunder in a
significant respect for a period of at least three consecutive months or for
shorter periods totaling more than one hundred twenty (120) days during any 365
day period.
9.05 Surrender of Records and Property. Upon termination of
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his employment with the Company, Executive shall deliver promptly to the Company
all records, manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, data, tables, calculations or copies thereof, which are the
property of the Company or which relate in any way to the business, products,
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practices or techniques of the Company, and all other property, trade secrets
and confidential information of the Company, including, but not limited to, all
documents which in whole or in part contain any trade secrets or confidential
information of the Company, which in any of these cases are in his possession or
under his control.
9.06 Wage Continuation. If Executive's employment by the Company
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is terminated by the Company pursuant to subsection 9.01(d), the Company shall
continue to pay to Executive his base salary and shall continue to provide
health insurance benefits for Executive through the earlier of (a) the date that
Executive has obtained other full-time employment, or (b) the expiration of the
term of this Agreement; provided, however, that in the event Executive obtains
other full time employment, the Company shall continue to pay, until the
expiration of the term of this Agreement, the excess, if any, of Executive's
base salary over Executive's salary and bonus from his other full time
employment. In addition, if Executive's employment by the Company is terminated
pursuant to subsection 9.01(a), (b) or (d), Executive (or his guardian or his
estate as may be applicable) shall be entitled to receive a pro rata portion
(based on the number of days of employment during the fiscal year) of any bonus
payment that would have been payable to him for that fiscal year if Executive
had been in the employ of the Company for the full fiscal year. If this
Agreement is terminated pursuant to subsection 9.01(a), 9.01(b), 9.01(c) or
9.01(e), Executive's right to base salary and benefits shall immediately
terminate, except as may otherwise be required by applicable law or the
preceding sentence.
10. Settlement of Disputes.
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10.01 Arbitration. Except as provided in section 10.02, any
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claims or disputes of any nature between Company, Purchaser and Executive
arising from or related to the performance, breach, termination, expiration,
application, or meaning of this Agreement or any matter relating to Executive's
employment and the termination of that employment by Purchaser shall be resolved
exclusively by arbitration in Minneapolis, Minnesota, in accordance with the
applicable rules then obtaining of the American Arbitration Association. The
fees of the arbitrator(s) and other costs incurred by Executive and Purchaser in
connection with such arbitration shall be paid by the party who is unsuccessful
in such arbitration.
The decision of the arbitrator(s) shall be final and binding upon
both parties. Judgment of the award rendered by the arbitrator(s) may be entered
in any court having jurisdiction thereof. In the event of submission of any
dispute to arbitration, each party shall, not later than thirty (30) days prior
to the date set for hearing, provide to the other party and to the arbitrator(s)
a copy of all exhibits upon which the party intends to rely at the hearing and a
list of all persons each party intends to call at the hearing.
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10.02 Resolution of Certain Claims - Injunctive Relief. Section
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10.01 shall have no application to claims by Purchaser asserting a violation of
section 5, 6, 7, 8 or 9.05 or seeking to enforce, by injunction or otherwise,
the terms of section 5, 6, 7, 8 or 9.05. Such claims may be maintained by
Purchaser in a lawsuit subject to the terms of section 10.03. Executive agrees
that, in addition to, but not to the exclusion of any other available remedy,
Purchaser shall have the right to enforce the provisions of sections 5, 6, 7, 8
and 9.05 by applying for and obtaining temporary and permanent restraining
orders or injunctions from a court of competent jurisdiction without the
necessity of filing a bond therefor, and the successful party shall be entitled
to recover from the unsuccessful party its reasonable attorneys' fees and costs
in any actions related to sections 5, 6, 7, 8 and 9.05.
10.03 Venue. Any action at law, suit in equity, or judicial
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proceeding arising directly, indirectly, or otherwise in connection with, out
of, related to or from this Agreement or any provision hereof, shall be
litigated only in the courts of the state of Minnesota, County of Hennepin.
Executive waives any right the Executive may have to transfer or change the
venue of any litigation brought against Executive by Purchaser.
10.04 Severability. To the extent any provision of this Agreement
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shall be invalid or unenforceable, it shall be considered deleted herefrom and
the remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect. In furtherance and not in limitation of
the foregoing, should the duration or geographical extent of, or business
activities covered by, any provision of this Agreement be in excess of that
which is valid and enforceable under applicable law, then such provision shall
be construed to cover only that duration, extent or activities which may validly
and enforceably be covered. Executive acknowledges the uncertainty of the law in
this respect and expressly stipulates that this Agreement be given the
construction which renders its provisions valid and enforceable to the maximum
extent (not exceeding its express terms) possible under applicable law.
11. Miscellaneous.
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11.01 Governing Law. This Agreement is made under and shall be
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governed by and construed in accordance with the laws of the state of Minnesota.
11.02 Prior Agreements. This Agreement contains the entire
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agreement of the parties relating to the employment of Executive by Company and
the ancillary matters discussed herein and supersedes all prior agreements and
understandings with respect to such matters, and the parties hereto have made no
agreements, representations or warranties relating to such employment or
ancillary matters which are not set forth herein.
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11.03 Withholding Taxes. The Company may withhold from any
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benefits payable under this Agreement all federal, state, city or other taxes as
shall be required pursuant to any law or governmental regulation or ruling.
11.04 Amendments. No amendment or modification of this Agreement
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shall be deemed effective unless made in writing and signed by the both
Executive, Purchaser and the Company.
11.05 No Waiver. No term or condition of this Agreement shall be
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deemed to have been waived, nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
11.06 Assignment. This Agreement shall not be assignable, in
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whole or in part, by either party without the written consent of the other
party, except that Purchaser may, without the consent of Executive, assign its
rights and obligations under this Agreement to any corporation, firm or other
business entity with or into which the Company may merge or consolidate, or to
which the Company may sell or transfer all or substantially all of its assets.
After any such assignment by Purchaser, Purchaser shall be discharged from all
further liability hereunder and such assignee shall thereafter be deemed to be
the Company for the purposes of all provisions of this Agreement including this
Section 11.
11.07 Counterparts. This Agreement may be simultaneously executed
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in any number of counterparts, and such counterparts executed and delivered,
each as an original, shall constitute but one and the same instrument.
11.08 Captions and Headings. The captions and paragraph headings
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used in this Agreement are for convenience of reference only, and shall not
affect the construction or interpretation of this Agreement or any of the
provisions hereof.
11.09 Notices. Any notice or communication required or permitted
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hereunder shall be in writing and either delivered personally, telegraphed or
telecopied or sent by overnight courier, or by certified or registered mail,
postage prepaid, and shall be deemed to be given, dated and received when so
delivered personally or by courier, telegraphed or telecopied, or, if mailed,
five business days after the date of mailing to the following address or
telecopy number, or to such other address or addresses such person may
subsequently designate by notice given hereunder.
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(a) if to Purchaser or the Company, to:
Summit Medical Systems, Inc.
00000 Xxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxx
with a copy to:
Xxxxxx & Whitney LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxx
(b) if to the Executive, to:
X. X. XxXxxxxx & Associates, Inc.
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. XxXxxxxx
with a copy to:
Galland, Kharasch, Xxxxx & Xxxxxxxxx, P.C.
Canal Square
0000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
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IN WITNESS WHEREOF, Executive, Purchaser and the Company have executed
this Agreement as of the date set forth in the first paragraph.
___________________________
Xxxxxxx X. XxXxxxxx
X. X. XX XXXXXX & ASSOCIATES, INC.
By_________________________
Xxxxxxx X. XxXxxxxx
President
SUMMIT MEDICAL SYSTEMS, INC.
By_________________________
Xxxxx X. Xxxxx
President and Chief Executive Officer
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