Exhibit 10.33
EMPLOYMENT AGREEMENT
This Employment Agreement is effective as of December 15, 2002, between
Intraop Medical, Inc. ("Employer") and Xxxxxx Xxxxxxx ("Employee").
RECITALS:
A. Employer desires to obtain the association and services of Employee in
order to utilize the skills and abilities of Employee and is therefore willing
to engage Employee's services on the terms and conditions set forth below.
B. Employee desires to become associated with Employer and obtain the
benefits of such association and is willing to do so on the following terms and
conditions.
AGREEMENT:
In consideration of the above recitals and of the mutual promises and
conditions in the Agreement, it is agreed as follows:
1. Term. Employer agrees to employ Employee and Employee hereby accepts
such employment, in accordance with the terms of this Agreement, commencing
January 6, 2003 and ending December 31, 2005, unless this Agreement is earlier
terminated as provided herein. Provided, however, that unless Employer or
Employee gives notice to the other party to the contrary at least 60 days prior
to December 31 of each year beginning December 31, 2005, the term of this
Agreement shall automatically be extended for an additional term of one year
from its then termination date.
2. Compensation and Benefits.
a. Employer shall pay Employee an initial salary at the rate of
$135,000 per year, payable semi-monthly. The Board of Directors shall review
Employee's salary and benefits then being paid to Employee not less frequently
than every twelve (12) months. Following such review, Employer may, in its
discretion increase (but shall not be required to increase) the salary or any
other benefits of Employee. In addition, Employer may provide additional
incentive bonuses to Employee at certain levels of productivity or
profitability, to be determined at the sole discretion of Employer's Board of
Directors.
b. During the term of employment, Employee shall be entitled to receive
all benefits of employment generally available to Employer's other executive and
managerial employees when and as he becomes eligible for them, such as sick
leave, participation in the Company's 401(k) retirement program or executive
retirement program, when established, and stock options and executive
performance bonus programs when they are established by the Board of Directors.
In regard to group health insurance benefits, Employee will be eligible to
receive health and dental benefits for both the Employee and his family.
Employer will purchase a life term life policy covering Employee and made
payable to an Employee designated beneficiary in the amount of $750,000. In the
event of employee's termination, Employee may elect to continue the policy at
Employee's own expense.
c. During the term of this Agreement, to the extent that such
expenditures satisfy the criteria under the Internal Revenue Code for
deductibility by Employer (whether or not fully deductible by Employer) for
federal income tax purposes as ordinary and necessary business expenses,
Employer shall reimburse Employee for reasonable out-of-pocket expenses incurred
in connection with Employer's business during the employment term, including
travel expenses, food and lodging while away from home, subject to such policies
as Employer may from time to time reasonably establish. Such expenses shall be
reimbursed only if Employee furnishes to Employer adequate records and other
documentary evidence required by federal and state statutes and regulations
issued by the appropriate taxing authorities for the substantiation of each such
expenditure as an income tax deduction.
d. Employer reserves the right to modify, suspend or discontinue any
and all of the above referenced benefit plans, practices, policies and programs
at any time, whether before or after termination of employment, without notice
to or recourse by Employee, so long as such action is taken generally with
respect to other similarly situated employees and does not single out Employee.
e. Employee shall be entitled to attend Employer's Board of Directors
meetings as an observer except when Employee's compensation matters are being
considered.
f. Subject to continuing Employer approval, Employee shall be entitled
to work from his home for two days per week.
3. Incentive Stock Options. Employee shall be granted Incentive Stock
Options on 175,000 shares of the Company's common stock at an exercise price of
$0.80 per share. One-third (1/3) of such stock options shall be vested
immediately, and so long as Employee is in the employ of Employer on the date
each month that vesting occurs, the remaining stock options shall vest ratably
each month over a three year period commencing on the date hereof. The options
shall accelerate 12-months upon a "Change in Control" of Employer (which shall
mean that Employer's existing shareholders as of the date of this Agreement
shall cease to have beneficial ownership of at least 50% of Employer's voting
shares of stock as a result of a single transaction or series of related
transactions). In addition, Employee's stock options shall vest entirely on a
"double-trigger" basis if following a Change of Control, either (i) Employer's
stock option plan is not assumed by the surviving company; or (ii) Employee is
terminated without Just Cause (as defined in Section 7(c)) during the period
beginning four (4) months prior to and ending six (6) months after a Change of
Control.
4. Employees Responsibilities. Employee shall serve as Chief Financial
Officer and Controller of Employer for the duration of this Agreement. Employee
shall also perform such other comparable duties as the Board of Directors, in
its discretion, shall determine. Employer shall report directly to Employer's
Chief Executive Officer ("CEO") and also shall be subject to the Board and to
such limits on Employee's authority as the Board of Directors may from time to
time impose. Employee agrees to observe and comply with the rules and
regulations of Employer as adopted by the CEO or Board of Directors respecting
the performance of Employee's duties and agrees to carry out and perform orders,
directions and policies of Employer and its Board of Directors as they may be,
from time to time, stated either orally or in writing.
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5. Prohibited Activities. Notwithstanding any other provisions of this
Agreement, Employee shall not take any of the following actions on behalf of
Employer without the express approval of the Board of Directors (whether by
resolution or written consent):
a. Sell, pledge, transfer or otherwise encumber assets of Employer.
b. Borrow money in the name of Employer.
c. Buy or lease extraordinary capital equipment in excess of the
amounts budgeted and approved for such expenditures.
d. Sell any single capital asset of Employer having a market value in
excess of $5,000 or a total of capital assets during any one fiscal year having
a market value in excess of $25,000.
e. Permit any customer of Employer to become indebted to Employer in an
amount in excess of $25,000, except as may be allowed under the Company's
standard Terms and Conditions of Sale.
f. Terminate the services of any other officer of Employer or hire any
replacement of any officer whose services have been terminated.
g. Conduct himself (whether on Employer's business or not) in a manner
which would bring substantial embarrassment, shame or ridicule to Employer under
circumstances having a direct and adverse financial impact on Employer, or
business as a result of the actions of Employee. This subparagraph does not
apply to any actions undertaken by Employee based on his good faith exercise of
reasonable sound business discretion or judgment.
6. Executive Service.
a. During his employment, Employee shall devote his full energies,
interests, abilities and productive time to the business, affairs and interests
of Employer and matters related thereto and shall use Employee's best efforts to
promote Employer's interests and perform this Agreement in accordance with
policies established by and under Employer's Board of Directors. Employee shall
not, without the prior written consent of Employer's Board of Directors, render
to others services of any kind for present or future compensations, or engage in
any other activity that would materially interfere with the performance of his
duties under this Agreement, including but not limited to acting as a partner,
officer, director or employee or significant investor of any other entity (an
investment of 5% or more of the outstanding capital or equity securities of an
entity shall be deemed significant for these purposes). The Employee shall not
serve as Director on other company boards of directors without the written
consent of Intraop's Board of Directors.
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b. Employee represents to Employer that he has no other outstanding
commitments inconsistent with any of the terms of this Agreement or the services
to be rendered hereby.
c. The position held by Employee assumes a "nominal" 40 hour work week,
but both Employee and Employer recognize that the Company is a start-up and, in
addition, that the capital medical equipment business is very dynamic and that
to continue to be successful in this position requires spending many additional
hours each week in the capacity of Chief Financial Officer. Employee must use
his own judgment in managing his time to help operate and develop the company in
Employer's best interests. This extra activity is considered part of the job
responsibilities for which there is no additional compensation.
d. It is recognized and agreed by both Employer and Employee that the
specific nature of this job involves the exercise of considerable initiative,
discretion, independent judgment and management by Employee. Employee
acknowledges and agrees that the nature of his responsibilities make his
position exempt from any local, federal or state overtime requirements; Employee
further agrees not, either during or after employment with Employer, to seek
additional compensation beyond the terms of this Agreement for overtime claims,
except where legal grounds exist for doing so.
e. Travel is sometimes required on weekends or at night and is to be
considered part of the job for which there is no additional compensation.
7. Termination.
a. Upon termination of Employee's employment pursuant to the terms of
this Agreement, the obligations of the parties under this Agreement shall
terminate, except those obligations which survive termination of employment,
including, without limitation, the obligations set forth in this Section 7 and
in Section 8 Post-Employment Covenants.
b. If Employee's employment is terminated on the basis of 60 day notice
from Employer or upon any other basis except for Just Cause or voluntary
resignation by Employee, Employee shall receive a severance payment as follows:
(i) if termination occurs within six months of the effective date of this
agreement and a Change in Control has not occurred prior to termination,
Employee will receive a lump sum severance payment immediately upon termination
equivalent to two months of his current salary; or (ii) if termination occurs
thereafter and a Change in Control has not occurred prior to termination,
Employee will receive a severance payment equivalent to two weeks of salary,
based on the rate Employee was receiving at the time of termination, times the
number of months that Employee has been employed at the company, provided
however that under no circumstances shall Employee's severance payment exceed
twelve months of salary based on the rate Employee was receiving at the time of
termination; or (iii) if a Change in Control occurs prior to termination or
within the four months following a termination, twelve months of salary based on
the rate Employee was receiving at the time of termination. Employee will
receive a lump sum payment immediately at the time of termination equivalent to
two months of salary. The remaining payments will be made monthly beginning on
the first day of the third month following the date of termination. Except upon
a Change in Control that occurs during the period beginning four (4) months
prior to and ending six (6) months following termination, this severance payment
shall be reduced by the amount of any salary or self-employment income received
by Employee in the year after termination, except that in no event shall this
severance payment be less than the equivalent of two months of Employee's salary
at the time of termination. Any severance payment under this Agreement will be
due to Employee in addition to any and all other sums or benefits due by virtue
of any other provision of this Agreement or by operation of law.
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c. "Just Cause" is defined as (i) breach of the Agreement, (ii)
conviction for any felony or misdemeanor (except for -minor traffic violations
or similar offenses), any act of fraud, personal dishonesty, incompetence,
negligence or willful or negligent conduct, material violation of any duty of
loyalty or fiduciary loyalty to the Company or willful failure or refusal to
perform duties or responsibilities under this Agreement. It also includes breach
of the separate proprietary rights agreement signed by Employee. Employee
acknowledges and agrees that if terminated for Just Cause he will have no claim
or right to the severance payment set forth in paragraph b.
d. Employer may terminate Employee's employment at any time without
cause upon 30 days written notice to Employee. Upon such notice of termination
Employer retains the right to reassign the duties of Employee for the remaining
days of the notice period. Employee agrees that, as a condition of receiving the
remaining compensation due under this Agreement, he will sign an appropriate
Employer's Settlement Agreement and General Release form provided by Employer
which relieves Employer from all claims of liabilities by Employee not due under
this Agreement.
e. Employer may terminate Employee's employment at any time without
notice if there is Just Cause for termination, but the terms of subparagraphs b
shall apply unless employee has engaged in gross misconduct.
f. To the extent that Employee is substantially unable to perform his
duties as Chief Financial Officer and Controller by reason of physical or mental
disability not arising out of or in the course of his employment, and if said
disability has a substantial adverse affect on Employer's ability to conduct its
business, Employer may elect to terminate this Agreement if such termination
conforms with all applicable federal and state laws and regulations. Any such
termination under this subparagraph shall not be deemed a termination on the
basis of gross misconduct or voluntary resignation within the meaning of this
Agreement. Any worker's compensation or other disability benefits received due
to the condition causing Employee's disability will be deducted from any
severance payment due from Employer. However, any disability benefits paid for
by the Employee, independent of Intraop, Inc. shall not be deducted from any
severance payment due the Employee from the Employer.
g. After the initial contract period of three years, Employee may
voluntarily resign his employment at any time by giving 30 days written advance
notice to Employer. Employer retains the option to assign Employee to other
duties during the final 30 days.
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h. Upon a merger or a sale of all or substantially all of Employer's
assets, Employer may, with Employee's consent (i) assign this Agreement and all
rights and obligations under it to any business entity that succeeds to all or
substantially all of Employer's business through that merger or sale of assets;
or (ii) on at least 30 days prior written notice to Employee, terminate
Employee's employment effective on the date of the merger or sale of assets, in
which case the terms of subparagraphs b and c shall apply.
8. Post-Employment Covenants.
a. If Employee accepts an alternative position of employment within 18
months of termination of this Agreement with Employer, and if said employment is
with any entity directly competitive with Employer at the time of said
re-employment, Employee agrees to notify Employer of the name and location of
said new employer.
b. Employee agrees not to maintain or attempt to maintain any business
contact for a period of six (6) months after termination of Agreement with
Employer's customers and clients existing at the time of termination. In
addition, during and for twelve (12) months after termination of his employment,
Employee shall i) not induce or attempt to induce any employee of Employer to
discontinue representation of or employment with Employer; or ii) leave
Employer's employ for the purpose of representation of or employment with any
entity directly competitive with Employer.
c. Employee agrees that for a period of 18 months, he will not accept
employment from any entity which is directly competitive with Employer, if
Employee's duties for said entity are or will be within the area of direct
competition. In order to protect Employer's Confidential Information as defined
in that certain Non Disclosure Agreement dated July 29, 2002 by and between
Employer and Employee, Employee agrees that for a period of 18 months after
termination of this Agreement, Employee shall not, directly or indirectly,
whether as an owner, partner, shareholder, agent, employee, creditor or
otherwise, promote, participate or engage in any activity or other business
competitive with Employer's business in California if such activity or other
business involves any use by Employee of any of the Confidential Information.
d. Nothing contained in this Section shall be deemed a waiver of the
separate Confidentiality Agreement, and if there is any conflict or
inconsistency between the provisions of this Section and those other provisions,
the terms of those other provisions shall control. The covenants of this Section
shall be construed as separate covenants covering their subject matter in each
of the separate counties and states in the United States in which Employer
transacts business. To the extent that any covenant shall be judicially
unenforceable in any one or more of said counties or states, that covenant shall
not be affected with respect to each other county and state; each covenant with
respect to each county and state being construed as severable and independent.
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9. Arbitration. Any controversy or claim arising out of or relating to this
Agreement, or breach of this Agreement, may be submitted by the parties to
arbitration in accordance with the commercial Arbitration Rules of the American
Arbitration Association, and judgment on the award rendered by the arbitrators
may be entered in any court having jurisdiction. There shall be three
arbitrators, one to be chosen directly by each party, and the third arbitrator
to be selected by the two arbitrators so chosen. Each party shall pay the fees
of the arbitrators that party selects and of that party's own attorneys, and the
expenses of witnesses and all other expenses connected with presenting that
party's case. Other costs of the arbitration, including the cost of any record
or transcripts of the arbitration, administrative fees, and the fee of the third
arbitrator and all other fees and costs, shall be borne equally by the parties.
10. Injunctive Relief. Employee is obligated under this Agreement to render
services of a special, unique, unusual, extraordinary and intellectual
character, which give the Agreement peculiar value. The loss of these services
cannot be reasonably or adequately compensated in damages in any action at law.
Accordingly, in addition to other remedies provided by law or this Agreement,
Employer shall have the right to obtain injunctive relief to prevent or remedy
any breach of the Agreement.
11. Remedies Cumulative. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given under this Agreement or now or hereafter existing at law or
in equity, or by statute or otherwise. The election of any one or more than one
remedy shall not preclude the availability of any other remedy. However, to the
extent that any controversy concerning this Agreement is submitted to
arbitration, the resulting decision shall be treated as final and binding within
the meaning of the California Arbitration Act. In the event any action is
brought in any court of law to enforce or interpret this Agreement, the
prevailing party shall recover all attorney's fees and expenses incurred.
12. Effect of Waiver. The failure of either party to insist on strict
compliance with any of the terms, covenants or conditions of this Agreement by
the other party shall not be deemed a waiver of that term, covenant or
condition, nor shall any waiver or relinquishment of any right or power at any
one time or times be deemed a waiver or relinquishment of that right or power
for all or any other times.
13. Employee's Representations. Employee represents and warrants that he is
free to enter into this Agreement and to perform each to the terms and covenants
of it. Employee represents and warrants that he is not restricted or prohibited,
contractually or otherwise, from entering into and performing this Agreement,
and that his execution of this Agreement is not a violation or breach of any
other agreement between Employee and any other person or entity.
14. Entire Agreement. This agreement and any documents to which this
Agreement expressly refers, or which it incorporates by reference, contains the
entire agreement between the parties and supersedes all prior oral and written
agreements, understandings, commitments and practices between the parties
relating to the subject matter hereof. All amendments to this Agreement must be
made in writing and signed by both parties thereto.
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15. Construction and Headings. The formation, construction and performance
of this Agreement shall be construed in accordance with the laws of California,
without reference to conflicts of law provisions. The subject headings of the
sections and subsections of this Agreement are included for purposes of
convenience only and shall not affect the interpretation or construction of any
of its provisions.
16. Notice. Any notice to Employer required or permitted under this
Agreement shall be given in writing to Employer, either by personal services or
by registered or certified mail, postage prepaid, addressed to the Board of
Directors of Employer at its then principal place of business. Any such notice
to Employee shall be given in a like manner and, if mailed, shall be addressed
to employee at his home address then shown in Employees files. For the purpose
of determining compliance with any time limit in this Agreement, a notice shall
be deemed to have been duly given: (a) on the date of service, if served
personally on the party to whom notice is to be given, or (b) on the second
business day after mailing, if mailed to the party to whom the notice is to be
given in the manner provided in this Section.
17. Invalidity. If any provisions of this Agreement is held invalid or
unenforceable by a court of competent jurisdiction, the remainder of this
Agreement shall nevertheless remain in full force and effect. If any provision
is held invalid or unenforceable with respect to particular circumstances, it
shall nevertheless remain in full force and effect in all other circumstances to
the extent permissible.
18. Successors.
a. The Employee. This Agreement is personal to the Employee and,
without the prior express written consent of the Employer, shall not be
assignable by the Employee, except that the Employee's rights to receive any
compensation or benefits under this Agreement may be transferred or disposed of
pursuant to testamentary disposition, intestate succession or pursuant to a
qualified domestic relations order. This Agreement shall inure to the benefit of
and be enforceable by the Employee's heirs, beneficiaries and/or legal
representatives.
b. Employer. This Agreement shall inure to the benefit of and be
binding upon the Employer and its successors and assigns. The Employer shall use
its reasonable best efforts to obtain from any successor to all or substantially
all of its business and/or assets, whether direct or indirect, by purchase,
merger, consolidation, acquisition of stock, or otherwise, an assumption by such
successor of the obligations of the Employer under this Agreement.
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19. Miscellaneous.
a. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to
principles of conflict of laws.
b. Amendments/Waiver. This Agreement may not be amended, waived, or
modified otherwise than by a written agreement executed by the parties to this
Agreement or their respective successors and legal representatives. No waiver by
any party to this Agreement of any breach of any term, provision or condition of
this Agreement by the other party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same time, or any prior or subsequent
time.
c. Withholding. The Company may withhold from any amounts payable under
this Agreement such taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
d. Survivorship. The respective rights and obligations of the parties
to this Agreement shall survive any termination of this Agreement or the
Employee's employment hereunder for any reason to the extent necessary to the
intended preservation of such rights and obligations.
Dated this 15th day of December, 2002.
EMPLOYEE: EMPLOYER:
Intraop Medical, Inc.
/s/ Xxxxxx Xxxxxxx /s/ Xxxxxx X. Goer
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Xxxxxx Xxxxxxx Xxxxxx X. Goer
Chief Executive Officer
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