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Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into at
Las Vegas, Nevada, on the date hereinafter set forth, by and between XXXX X.
XXXXX (hereinafter referred to as the "Employee"), and INAMED CORPORATION, a
Florida corporation (hereinafter referred to as the "Corporation").
The parties hereto, intending to be legally bound, do hereby agree as
follow:
1. EMPLOYMENT
1.1 POSITIONS AND DUTIES
The Corporation does hereby employ the Employee and the Employee
hereby accepts such employment as EXECUTIVE VICE PRESIDENT upon the terms and
provisions set forth in this Agreement. The Employee shall be one of three
members of the Executive Committee responsible for the management of the
Corporation and all of its worldwide operating subsidiaries. The Employee shall
report to the Chief Executive Officer. The Employee shall have overall senior
executive responsibility for the Corporation's legal and regulatory affairs,
financing activities and the profit and cash flow improvement program, as well
as such other tasks and duties as may be assigned to him from time to time by
the Chief Executive Officer. The Employee shall be elected as a member of the
Board of Directors and shall be nominated to serve as a director at each
successive annual meeting during the term of this Agreement. The Employee shall
perform all the duties assigned to him by the Corporation, shall observe and
comply with the Corporation's rules and regulations regarding the performance of
his duties, and shall carry out and perform all orders, directions, and policies
stated to him by the Corporation periodically, either orally or in writing. The
Employee shall at all times carry out the duties assigned to him in a loyal,
trustworthy and businesslike manner. The Employee agrees that this Agreement may
be terminated as provided in Paragraph 7 hereof.
1.2 PLACE OF EMPLOYMENT
Unless the parties agree otherwise in writing, during the term of
this Agreement, the Employee shall perform the services required by this
Agreement at either Las Vegas, Nevada, or Santa Barbara, California (as the
Corporation and Employee may mutually agree is appropriate); it being understood
that the Employee shall not be required to relocate from the New York City area,
and may retain an office in New York City and travel from time to time to the
Corporation's offices.
2. TERM
This Agreement shall commence as of January 23, 1998 and shall
continue for a period of three (3) years from the date of this Agreement; and at
the end of every month of this Agreement, the term of Employee's employment
shall automatically be extended by one month, unless either party gives 60 days'
prior written notice of its intention to discontinue this automatic extension.
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3. COMPENSATION
3.1 AMOUNT OF COMPENSATION
The Employee's compensation is set forth in Exhibit A hereto. The
Corporation may, from time to time, increase, but not reduce, Employee's
compensation. These changes will be recorded in subsequent amendments.
3.2 REIMBURSEMENTS
The Employee shall be reimbursed by the Corporation only for
amounts actually expended by the Employee in the course of performing duties for
the Corporation where:
3.2.1 AUTHORIZATION
The Employee has been authorized by the Corporation to incur such
expenses that are reasonably consistent with practices or policies of the
Corporation. The Corporation agrees to reimburse Employee for the reasonable
expenses of maintaining an office in New York City.
3.2.2 DOCUMENTATION
The Employee tenders receipts or other documentation
substantiating the amounts as required by the Corporation.
3.3 FRINGE BENEFITS
The Employee shall be entitled to receive, on the same basis as
the Corporation's other executive employees, all other benefits maintained by
the Corporation for its executive employees generally, including but not limited
to a cellular phone, leased automobile, county club fees, paid leave, medical,
dental, life and disability insurance and any other health and welfare benefit
plans and perquisites, as in effect from time to time. The Employee will be
granted paid leave consistent with the Corporation's paid leave policy in effect
from time to time.
3.4 WARRANTS AND STOCK OPTIONS
(a) WARRANTS. The Employee will, concurrently with the signing of
this Agreement, receive an Executive Officer Warrant ("Warrant") as specified in
Exhibit D hereto. This employment warrant is not a part of the Corporation's
Stock Compensation Plan, and is not transferable and may be exercised only by
the Employee, or by the Employee's estate or personal representative within
three (3) months of the Employee's death. In the event of the termination of
this Agreement pursuant to Paragraph 7.1.2, the Warrants that at the time of
termination have vested may be exercised by the Employee or his estate or
personal representative within twelve (12) months of such termination. Subject
to the foregoing, employment with the Corporation is a condition of exercise of
the Warrant.
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(b) LOCK-UP AGREEMENTS. The Employee will execute any other
documents reasonably required by the Corporation in connection with said
Warrants, and hereby agrees to execute any lock-up or similar agreements
required by the Corporation's underwriters in connection with an offering or
offerings of the Corporation's securities.
4. COMPETITION
The Employee agrees that during the term of this Agreement he
shall diligently devote his time and efforts to the duties and responsibilities
assigned to him by the Corporation, and without prior express written
authorization of the Corporation's Board of Directors, the Employee shall not,
directly or indirectly, either alone or in concert with others, during the term
of this Agreement:
4.1 OTHER SERVICES
Perform or render any services of a business, professional or
commercial nature, relating to service or products competitive with the
Corporation, to or for the benefit of any other person or firm, whether for
compensation or otherwise, except for personal investments, and for other
activities approved by the Corporation. It is understood and agreed that the
Employee may continue to practice law, on an "of counsel" basis; provided,
however, that those activities shall not impair the Employee's agreement to
devote at least 75% of his time to the Corporation.
4.2 COMPETITION
Engage in any activity directly or indirectly in competition with
or adverse to the Corporation;
4.3 SOLICITATION
Engage in any activity for purposes of influence or attempting to
influence the Corporation's customers, either directly or indirectly, to conduct
business with any business enterprise in competition with the Corporation;
4.4 COMPETING ENTERPRISE
Undertake or participate in any planning for or organization of
any business activity that is or will be in competition with the Corporation in
any field(s) or area(s) in which the Employee has worked or with which the
Employee has come into contact, or of which the Employee has gained knowledge
during the term of his employment under this Agreement; or
4.5 OTHER ACTIVITIES
Engage in any other business activity that would materially
interfere with the performance of any of the Employee's obligations and duties
under this Agreement.
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5. PROHIBITION AGAINST COMPETITION
5.1 AGREEMENT NOT TO COMPETE
As a result of the Employee's employment, the Employee will have
access to trade secrets and confidential information about the Corporation, its
products, its services, its customers and its methods of doing business. In
consideration for access to this information and the sale of the Corporation's
stock by the Employee to the Corporation, pursuant to the Repurchase Option, the
Employee agrees that for a period of one (1) year after termination of
employment, the Employee will not, directly or indirectly, compete with the
Corporation without the Corporation's prior express written approval.
5.2 COMPETITION DEFINED
"Competition" shall mean any participation in, assistance of,
employment by, ownership of any interest in, acceptance of business from or
assistance, promotion or organization of any person partnership, corporation,
firm, association or other business organization, entity or enterprise which,
directly or indirectly, is engaged in, or hereinafter engages in, research on,
or development, production, marketing, leasing or selling of, any product,
process or service which is the same as, similar to, or in competition with, any
line of business or research in which the Corporation, its parent, subsidiary or
affiliated company, is now engaged or hereinafter engages, whether as an agent,
consultant, employee, officer, director, investor, partner, shareholder,
proprietor or in any other individual or representative capacity, but excluding
the holding for investment of less that 5% of the outstanding securities of any
corporation which are regularly traded on a recognized stock exchange.
5.3 FURTHER EMPLOYEE AGREEMENTS
For a period of one (1) year after the termination of the
Employee's employment, the Employee will not undertake any employment or
activity competitive with the Corporation wherein the loyal and complete
fulfillment of the duties of the competitive employment or activity would call
upon the Employee to make judgements on or otherwise to use any confidential
business information concerning the Corporation. The Employee will not, directly
or indirectly, either for himself or for any other person, firm or corporation,
divert or take away (or attempt to divert or take away), any of the
Corporation's present, former or prospective customers, including, but not
limited to, those upon whom he called, met with or became acquainted with while
engaged as an employee of the Corporation. The Employee will not interfere with
the contractual or business relationships of the Corporation, will not solicit
or attempt to solicit any employees or clients of the Corporation, nor slander
or disparage the Corporation, or undertake any activity which adversely impacts
the goodwill of the Corporation and its business opportunities.
5.4 SEPARATE COVENANTS
Each of the covenants of Paragraph 5 shall be construed as
separate covenants covering their subject matter in each of the separate
counties, countries and states in the United States and governmental
subdivisions outside of the United States (collectively, the "Governmental
Subdivisions"); to the extent that any covenant shall be judicially
unenforceable in any one or
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more of said counties, states or countries, said covenant shall not be affected
with respect to each other Governmental Subdivision, each covenant with respect
to each Governmental Subdivision being construed as severable and independent.
6. INTELLECTUAL PROPERTY AND CONFIDENTIALITY AGREEMENT
The Employee has executed or will concurrently execute the
Corporation's Intellectual Property and Confidentiality Agreement, the terms of
which are incorporated herein by reference. The terms of this Employment
Agreement shall prevail in the case of any discrepancy between the Corporation's
Intellectual Property and Confidentiality Agreement and this Agreement. The
Corporation's Intellectual Property and Confidentiality Agreement is attached
hereto as Exhibit C.
7. TERMINATION OF AGREEMENT
7.1 GROUNDS
This Agreement shall terminate upon the occurrence of any of
the following events:
7.1.1 EXPIRATION OF TERM
At any time upon expiration of the term specified in Paragraph 2
hereof;
7.1.2 THIRTY (30) DAY TERMINATION BY EMPLOYEE
By the Employee, upon thirty (30) days' prior written notice to
the Corporation.
7.1.3 TERMINATION BY EMPLOYER (FOR CAUSE)
This Agreement may be immediately terminated by the Corporation
for the following causes: The Employee's personal dishonesty, lack of
trustworthiness, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule or regulation (other than minor misdemeanors such as
minor traffic violation) or a material breach of any provision of this
Agreement, or any other agreement between the Employee and the Corporation.
7.2 DISABILITY
7.2.1 TERMINATION
In the event that the Employee is unable to perform his assigned
duties and responsibilities due to illness, physical or mental disability or any
other reason, and such disability continues for a period of six (6) consecutive
months after all available sick leave has been utilized, the Corporation may
terminate this Agreement upon ten (10) days' written notice.
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7.2.2 DEATH
Upon the death of the Employee.
8. SEVERANCE COMPENSATION
If the Corporation should terminate the Employee's employment
hereunder during the Term (as defined in Section 2) for reasons other than cause
(as defined in Section 7.1.3) or Employee's death or disability (as defined in
Section 7.2), or if Employee should resign his employment for Good Reason, as
defined below, the Employee shall be entitled to the following Severance
compensation:
(a) Payment of his base salary in effect at the time of
termination from the date of termination until the expiration date of this
Agreement under Paragraph 2.
(b) Continuation of all benefits, including, without
limitation, medical, dental and life insurance, during the Post-Termination
Period or until the date on which the Employee first becomes eligible for
insurance coverage of a similar nature provided by a firm that employs him
following termination of employment by the Corporation, whichever occurs first.
Notwithstanding the foregoing, nothing in this Employment Agreement shall
require the Corporation to make any payment or to provide any benefit to the
Employee that the Corporation is otherwise required to provide under any other
contract, agreement or arrangement, including, without limitation, the Employee
Severance Agreement between the Corporation and the Employee, attached hereto as
Exhibit F, and the Employee Retention Agreement between the Corporation and the
Employee, attached hereto as Exhibit G, both incorporated by reference herein.
8.1 TERMINATION BY EMPLOYEE FOR GOOD REASON
The Employee shall have Good Reason for terminating his
employment with the Corporation under this Employment Agreement if one or more
of the following occurs:
(a) an involuntary change in the Employee's status or position with the
Corporation which constitutes a demotion from the Employee's then current status
or position;
(b) layoff or involuntary termination of the Employee's employment,
except in connection with the termination of the Employee's employment for Cause
or as a result of the non-renewal of this Agreement or of the Employee's
disability, death or retirement;
(c) a reduction by the Corporation in the Employee's base salary,
excluding bonuses, other than in the case of reductions in salary with respect
to the Corporation's other executive officers generally;
(d) any action or inaction by the Corporation that would adversely
affect the Employee's continued participation in any Benefit Plan on at least as
favorable a basis as was the case at the time of such action or inaction, or
that would materially reduce the Employee's benefits in the future under the
Benefit Plan or deprive him of any material benefits that he then
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enjoyed, except to the extent that such action or inaction by the Corporation
(i) is also taken or not taken, as the case may be, in respect of all employees
generally, (ii) is required by the terms of any Benefit Plan as in effect
immediately before such action or inaction; or (iii) is necessary to comply with
applicable law or to preserve the qualification of any Benefit Plan under
section 401 (a) of the Internal Revenue Code;
(e) the Corporation's failure to obtain express assumption of this
Employment Agreement by any successor to the Corporation; and
(f) any material violation by the Corporation of any agreement,
including this Employment Agreement, between the Corporation and the Employee.
Notwithstanding the foregoing, no action by the Corporation shall give rise to a
Good Reason if it results from the Employee's termination for Cause, death or
retirement, and no action by the Corporation specified in paragraphs (a) through
(c) of this section shall give rise to a Good Reason if it results from the
Employee's disability.
For purposes of this Section 8, "Benefit Plan" shall mean any
compensation plan, such as an incentive or stock option plan, or any employee
benefit plan, such as a thrift, pension, profit-sharing or, stock bonus,
long-term performance award, medical disability, accident or life insurance
plan, or any other plan, program or policy of the Corporation that is intended
to benefit employees.
9. MISCELLANEOUS
9.1 NOTICES
Any notice required to be given pursuant to this Agreement shall
be effective only if in writing and delivered personally or by mail. If given by
mail, such notice must be sent by registered or certified mail, postage prepaid,
mailed to the parties at the addresses set forth on the signature page hereof,
or at such other addresses as the parties may designate, from time to time, by
written notice. Mailed notices shall be deemed received two (2) business days
after the date of deposit in the mail.
9.2 REMEDIES
9.2.1 EQUITABLE REMEDIES
The Employee acknowledges and agrees that in the event of any
breach, violation or evasion of the terms, conditions and provisions of Sections
4, 5, 7, and 8 above, or this Section 9, such breach, violation or evasion shall
result in immediate and irreparable injury and harm to the Corporation and shall
entitle the Corporation to injunctive relief, as well as to all other legal or
equitable remedies to which the Corporation may be entitled.
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9.2.2 TERMINATION OF AGREEMENT
It is further agreed that in the event of such breach, the
Corporation may forthwith terminate this Agreement, notwithstanding anything
herein to the contrary.
9.3 PARTIAL INVALIDITY
If any term or provision of this Agreement or the application
thereof to any person or circumstance shall be held to be invalid or
unenforceable to any extent, the remainder of this Agreement or application of
such term or provision to persons or circumstances other than those to which it
is held invalid or unenforceable shall not be affected thereby, and each term
and provision of the Agreement shall be valid and be enforced to the fullest
extent permitted by law.
9.4 WAIVER
No waiver of any right hereunder shall be effective for any
purpose unless in writing, signed by the party hereto possessing said right, nor
shall any waiver be construed to be a waiver of any subsequent right, term or
provision of this Agreement.
9.5 ASSIGNMENT; EFFECT ON AGREEMENT
It is hereby acknowledged and agreed that the Employee's rights
and obligations under this Agreement are personal in nature and shall not be
assigned or delegated. This agreement shall be binding on and inure to the
benefit of the heirs, personal representatives, successors and assigns of the
parties, subject, however, to the restrictions on assignment and delectation
contained herein.
9.6 DISPUTES AND ARBITRATION
Any dispute arising in connection with the interpretation or
enforcement of the provisions of this Agreement, or its application or validity,
will be submitted to arbitration. Such arbitration proceedings will be held in
Las Vegas, Nevada, in accordance with the rules then existing of the American
Arbitration Association. This agreement to arbitrate is specifically
enforceable.
Any award rendered in any such arbitration proceeding will be
final and binding on each of the parties, and judgment may be entered thereon in
any court of competent jurisdiction. The costs and fees of any such arbitration
proceeding (including the legal fees incurred by the Employee) will be borne by
the Corporation. The arbitrators may in their discretion award costs and
reasonable attorneys' fees to the prevailing party.
9.7 GOVERNING LAW
This Agreement shall be governed by and construed in accordance
with the laws of the State of Nevada.
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9.8 ENTIRE AGREEMENT
This Agreement (and the Exhibits attached hereto which are part of
this Agreement) contains the entire agreement and understanding between the
parties and supersedes all prior agreements and understandings, oral or written.
No modification, termination or attempted waiver shall be valid, unless in
writing and signed by both parties.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 22nd day of January, 1998.
"CORPORATION"
INAMED CORPORATION
By:/s/ Xxxxxx X. XxXxxx
------------------------
Xxxxxx X. XxXxxx
Title: Chairman of the Board
ADDRESS:
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxx 00000
"EMPLOYEE"
/s/ Xxxx X. Xxxxx
-----------------
Xxxx X. Xxxxx
ADDRESS:
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
SOCIAL SECURITY NUMBER: ###-##-####
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EXHIBIT A TO EMPLOYMENT AGREEMENT
EMPLOYEE COMPENSATION
1. SALARY
The Employee's Annual Salary shall be FOUR HUNDRED THOUSAND
DOLLARS ($400,000), payable in accordance with the Corporation's pay policy,
with applicable federal, state and local taxes withheld. The Salary shall be
reviewed periodically (but not less than annually) by the Compensation Committee
and approved by the Board of Directors.
2. BONUS
The Employee will be entitled to a bonus based on a yet to be
determined program that will be developed by Management, presented to the
Compensation Committee and approved by the Board of Directors. Employee
understands that the bonus program may not apply to the initial year of
employment or may only apply to a portion of the initial year of employment.
This Exhibit A may only be amended by an Amendment to the Employment
Agreement in the form attached hereto as Exhibit B.
IN WITNESS WHEREOF, the undersigned has executed this Exhibit A to
Employment Agreement this 22nd day of January, 1998:
SIGNED BY: ACCEPTED BY:
EMPLOYEE INAMED CORPORATION
/s/ Xxxx X. Xxxxx /s/Xxxxxx X. XxXxxx
------------------ -------------------
Xxxx X. Xxxxx Xxxxxx X. XxXxxx
Its: Chairman of the Board
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Exhibit F To Employment Agreement
INAMED "Innovation and Medicine" INAMED Corporation
0000 Xxxxxx Xxxxxx Xxxx.
Xxxxx 0000
Xxx Xxxxx, XX 00000
EMPLOYEE SEVERANCE AGREEMENT (000) 000-0000
FAX: (000) 000-0000
Xxxxxxx 00, 0000
Xxxx X. Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ilan:
INAMED Corporation and its subsidiaries (the "Corporation") considers it
essential to the best interests of the Corporation and its stockholders to
xxxxxx the continuous employment of key management personnel. In this
connection, the Board of Directors of the Corporation (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
change in control of the Corporation may exist, and that such possibility and
the uncertainty and questions which it may raise among management, may result in
the departure or distraction of management personnel to the detriment of the
Corporation and its stockholders.
The Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Corporation's
management, including yourself, to their assigned duties without distraction in
the face of potentially disturbing circumstances arising from the possibility of
a change in control of the Corporation.
In order to induce you to remain in the employ of the Corporation, the
Corporation agrees that you shall receive the severance benefits set forth in
this letter agreement (this "Agreement") in the event your employment with the
Corporation is terminated under the circumstances described below subsequent to
a "change in control of the Corporation" (as defined in Section 2).
1. TERM OF AGREEMENT. This Agreement shall commence on January 23,
1998, and shall continue in effect throughout the term of the Employment
Agreement (as set forth in Paragraph 2 thereof) being entered today. If a change
in control of the Corporation, as defined in Section 2, shall have occurred
during the term of this Agreement, notwithstanding any provision to the contrary
in the Employment Agreement or any other agreement between you and the
Corporation, this Agreement shall continue in effect for a period of not less
than twenty-four (24) months beyond the month in which such change in control
occurred.
2. CHANGE IN CONTROL. No benefit shall be payable hereunder unless
there shall have been a change in control of the Corporation, as set forth
below. For purposes of this Agreement, a "change in control of the Corporation"
shall be deemed to have occurred if:
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(i) Any "person" as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than the Corporation, any trustee or other fiduciary
holding securities under an employee benefit plan of the Corporation,
or any corporation owned, directly or indirectly, by the stockholders
of the Corporation in substantially the same proportions as their
ownership of stock of the Corporation), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing 20% or more
of the combined voting power of the Corporation's then outstanding
securities (except that Appaloosa Management Company and its affiliates
shall not be deemed to be included within this subsection at such time
as its beneficial ownership is exempted from the Corporation's
Shareholder Rights Plan, as may be amended from time to time);
(ii) During any period of two consecutive years (not including
any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board, and any new
director (other than a director designated by a person who has entered
into an agreement with the Corporation to effect a transaction
described in clause (i), (iii) or (iv) of this Section) whose election
by the Board or nomination for election by the Corporation's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved cease for any reason to constitute at least
a majority thereof;
(iii) The stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other than
(a) a merger or consolidation which would result in the voting
securities of the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 50%
of the combined voting power of the voting securities of the
Corporation or such surviving entity outstanding immediately after such
merger or consolidation or (b) a merger or consolidation effected to
implement a recapitalization of the Corporation (or similar
transaction) in which no "person" (as hereinabove defined) acquires
more than 20% of the combined voting power, of the Corporation's then
outstanding securities; or
(iv) the stockholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the
Corporation's assets.
3. TERMINATION FOLLOWING CHANGE IN CONTROL.
(i) General. If any of the events described in Section 2
constituting a change in control of the Corporation occurs, you shall
be entitled to the benefits provided in Section 4(iii) upon the
subsequent termination of your employment during the term of this
Agreement unless such termination is (a) because of your death or
disability, (b) by the Corporation for cause, or (c) by you other than
for good reason. In the event your employment with the Corporation is
terminated for any reason and subsequently a change in control of the
Corporation should occur, you shall not be entitled to any benefits
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hereunder.
(ii) Disability. If, as a result of your incapacity due to
physical or mental illness, you are absent from the full-time
performance of your duties with the Corporation for six (6) consecutive
months, and within thirty (30) days after written notice of termination
is given you shall not have returned to the full-time performance of
your duties, your employment may be terminated for "Disability".
(iii) Cause. Termination by the Corporation of your employment
for "Cause" shall mean termination (a) upon the willful and continued
failure by you to substantially perform your duties with the
Corporation in accordance with the terms of the Employment Agreement
(other than any such failure resulting from your incapacity due to
physical or mental illness or any such actual or anticipated failure
after the issuance of a Notice of Termination (as defined in Subsection
3(v)) after written demand for substantial performance is delivered to
you by the Board, which specifically identifies the manner in which the
Board believes that you have not substantially performed your duties
(for purposes of this Subsection, no act, or failure to act, on your
part shall be deemed "willful" unless done, or omitted to be done, by
you without good faith and without reasonable belief that your action
was in the best interest of the Corporation) or (b) notwithstanding the
foregoing, you shall not be terminated for Cause unless and until a
copy of a resolution duly adopted by the unanimous affirmative vote of
the entire membership of the Board of Directors (other than yourself)
at a meeting of the Board (after reasonable notice to you and an
opportunity for you, together with counsel, to be heard before the
Board), finding that in the good-faith opinion of the Board you were
guilty of conduct set forth above in this Subsection and specifying the
particulars thereof in written detail which has been delivered to you.
(iv) Good Reason. You shall be entitled to terminate your
employment for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean, without your express written consent, the
occurrence after a change in control of the Corporation of any of the
following circumstances unless, in the case of paragraphs (a), (e),
(f), (g) or (h), such circumstances are fully corrected prior to the
Date of Termination (as defined in Section 3(vi)) specified in the
Notice of Termination (as defined in Section 3(v)) given in respect
thereof:
(a) The assignment to you of any duties inconsistent
with the position in the Corporation that you held immediately
prior to the change in control of the Corporation, or a
significant adverse alteration in the nature or status of your
responsibilities or the conditions of your employment from those
in effect immediately prior to such change in control;
(b) A reduction by the Corporation in your annual
base salary as in effect on the date hereof;
(c) The relocation of your office in New York City,
or the relocation of the Corporation's principal offices
immediately prior to the date of the change in control of the
Corporation to a location more than 50 miles, or the Corporation
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requiring you to be based anywhere other than in accordance with
Section 1.2 of the Employment Agreement;
(d) The failure by the Corporation to pay to you any
portion of your current compensation or to pay to you any portion
of an installment of deferred compensation under any deferred
compensation program of the Corporation within seven (7) days of
the date such compensation is due;
(e) The failure by the Corporation to continue in
effect any material compensation or benefit plan in which you
participate immediately prior to the change in control of the
Corporation, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect
to such plan, or the failure by the Corporation to continue your
participation therein (or in such substitute or alternative plan)
on a basis not materially less favorable, both in terms of the
amount of benefits provided, and other compensation agreements as
existed at the time of the change in control of the Corporation;
(f) The failure by the Corporation to continue to
provide you with benefits substantially similar to those enjoyed
by you under any of the Corporation's life insurance, medical,
health and accident, or disability plans in which you were
participating at the time of the change in control of the
Corporation, the failure by the Corporation to provide you with
the number of paid vacation days to which you are entitled on the
basis of years of service with the Corporation in accordance with
the Corporation's normal vacation policy, or as stated within your
Employment Agreement, Compensation Agreement or like same
agreements, regardless of the type or form of said Agreements, in
effect at the time of the change in control of the Corporation;
(g) The failure of the Corporation to obtain a
satisfactory agreement from any successor to assume and agree to
perform this Agreement, as contemplated in Section 5 hereof; or
(h) Any purported termination of your employment
that is not effected pursuant to a Notice of Termination
satisfying the requirements of Subsection (v) hereof (and, if
applicable, the requirements of Subsection (iii) hereof), which
purported termination shall not be effective for purposes of this
Agreement.
Your right to terminate your employment pursuant to this Subsection shall not be
affected by your incapacity due to physical or mental illness. Your continued
employment shall not constitute consent to, or a waiver of, rights with respect
to any circumstances constituting Good Reason hereunder.
(v) Notice of Termination. Any purported termination of your
employment by the Corporation or by you shall be communicated by
written Notice of Termination to the other party hereto in accordance
with Section 6. "Notice of Termination" shall mean a notice that shall
indicate the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and
circumstances claimed to
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provide a basis for termination of your employment under the
provision so indicated.
(vi) Date of Termination, etc. "Date of Termination" shall
mean (a) if your employment is terminated for Disability, thirty (30)
days after Notice of Termination is given (provided that you have not
returned to the full-time performance of your duties during such
thirty-day (30) period), and (b) if your employment is terminated
pursuant to Subsection (iii) or (iv) hereof or for any other reason
(other than Disability), the date specified in the Notice of
Termination (which, in the case of a termination for Cause shall not be
less than sixty (60) days from the date such Notice of Termination is
given, and in the case of a termination for Good Reason, not less than
thirty (30) nor more than ninety (90) days from the date such Notice of
Termination is given); provided, however, that if within thirty (30)
days after any Notice of Termination is given, or if later, prior to
the Date of Termination (as determined without regard to this
provision), the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination, then the
Date of Termination shall be the date on which the dispute is finally
determined, either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or decree of a
court of competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has expired and no
appeal has been perfected); provided, further, that the Date of
Termination shall be extended by a notice of dispute only if such
notice is given in good faith and the party giving such notice pursues
the resolution of such dispute with reasonable diligence.
Notwithstanding the fact that any such dispute is pending, the
Corporation will continue to pay you your full compensation in effect
when the notice giving rise to the dispute was given (including, but
not limited to, base salary) and continue you as a participant in all
compensation, benefit and insurance plans in which you were
participating when the notice giving rise to the dispute was given,
until the dispute is finally resolved in accordance with this
Subsection. Amounts paid under this Subsection are in addition to all
other amounts due under this Agreement, and shall not be offset against
or reduce any other amounts due under this Agreement and shall not be
reduced by any compensation earned by you as the result of employment
by another employer.
4. COMPENSATION UPON TERMINATION OR DURING DISABILITY. Following a
change in control of the Corporation, you shall be entitled to the following
benefits during a period of disability, or upon termination of your employment,
as the case may be, provided that such period or termination occurs during the
term of this Agreement:
(i) During any period that you fail to perform your full-time
duties with the Corporation as a result of incapacity due to physical
or mental illness, you shall continue to receive your base salary at
the rate in effect at the commencement of any such period, together
with all compensation payable to you under the Corporation's disability
plan or program or other similar plan during such period, until this
Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter,
or in the event your employment shall be terminated by reason of your
death, your benefits shall be determined under the Corporation's
retirement, insurance and other compensation programs then in effect in
accordance with the terms of such programs.
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(ii) If your employment shall be terminated by the Corporation
for Cause or by you other than for Good Reason, the Corporation shall
pay you your full base salary through the Date of Termination at the
rate in effect at the time Notice of Termination is given, plus all
other amounts to which you are entitled under any compensation plan of
the Corporation at the time such payments are due, and the Corporation
shall have no further obligations to you under this Agreement.
(iii) If your employment by the Corporation shall be
terminated by you for Good Reason or by the Corporation other than for
Cause or Disability, then you shall be entitled to the benefits
provided below:
(a) The Corporation shall pay to you your full base
salary through the Date of Termination at the rate in effect
at the time Notice of Termination is given, no later than the
fifth day following the Date of Termination, plus all other
amounts to which you are entitled under any compensation plan
of the Corporation, at the time such payments are due;
(b) In lieu of any further salary payment to you for
periods subsequent to the Date of Termination, the Corporation
shall pay as severance pay to you, at the time specified in
Subsection (v), a lump sum severance payment (together with
the payments provided in paragraphs (c) and (e) below, the
"Severance Payments") equal to 300% of your annual base salary
in effect as of the Date of Termination or immediately prior
to the change in control of the Corporation, whichever is
greater, and 300% of the highest annual bonus awarded to you
pursuant to the Corporation's Incentive Profit Share Plan or
any successor plan thereto, with respect to three (3) fiscal
years preceding the change in control of the Corporation;
(c) In lieu of shares of common stock of the
Corporation ("Common Shares") issuable upon exercise of
outstanding warrants or options, the Corporation shall pay to
you, at the time specified in Subsection (v), an amount in
cash equal to the product of (1) the excess of the higher of
the closing price of the Common Stock as reported on Nasdaq on
or nearest the Date of Termination or the highest per share
price for Common Shares actually paid in connection with any
change in control of the Corporation, over the per share
option price of each Option held by you (whether or not fully
vested or exercisable), and (2) the number of Common Shares
covered by each such Option;
(d) The Corporation shall pay to you all legal fees
and expenses incurred by you as a result of such termination
(including all such fees and expenses, if any, incurred in
contesting or disputing any such termination or in seeking to
obtain or enforce any right or benefit provided by this
Agreement or in connection with any tax audit or proceeding to
the extent attributable to the application of Section 4999 of
the Code, to any payment or benefit provided hereunder); and
(e) For a twenty-four (24) month period after such
termination, the
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Corporation shall arrange to provide you with life,
disability, dental, accident and group health insurance
benefits substantially similar to those which you were
receiving immediately prior to the Notice of Termination.
Notwithstanding the foregoing, the Corporation shall not
provide any benefit otherwise receivable by you pursuant to
this paragraph (e) if an equivalent benefit is actually
received by you during the twenty-four (24) month period
following your termination, and any such benefit actually
received by you shall be reported to the Corporation;
(iv) In the event that you become entitled to the Severance
Payments, if any of the Severance Payments will be subject to the tax
(the "Excise Tax") imposed by Section 4999 of the Code (or any similar
tax that may hereafter be imposed), the Corporation shall pay to you
at the time specified in Subsection (v) below, an additional amount
(the "Gross-Up Payment") such that the net amount retained by you,
after deduction of any Excise Tax on the Severance Payments and any
federal, state and local income tax and Excise Tax upon the payment
provided for by this Subsection, shall be equal to the Severance
Payments. For purposes of determining whether any of the Severance
Payments will be subject to the Excise Tax and the amount of such
Excise Tax, (a) any other payments or benefits received or to be
received by you in connection with a change in control of the
Corporation or your termination of employment (whether pursuant to the
terms of this Agreement or any other plan, arrangement or agreement
with the Corporation, any person whose actions result in a change in
control of the Corporation or any person affiliated with the
Corporation or such person) shall be treated as "parachute payments"
within the meaning of Section 280G(b)(2) of the Code, and all "excess
parachute payments" within the meaning of Section 280G(b)(1) shall be
treated as subject to the Excise Tax, unless in the opinion of tax
counsel selected by the Corporation's independent auditors and
acceptable to you such other payments or benefits (in whole or in
part) do not constitute parachute payments, or such excess parachute
payments (in whole or in part) represent reasonable compensation for
services actually rendered within the meaning of Section 280G(b)(4) of
the Code in excess of the base amount within the meaning of Section
280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax, (b) the amount of the Severance Payments which shall be treated
as subject to the Excise Tax shall be equal to the lesser of (1) the
total amount of the Severance Payments or (2) the amount of excess
parachute payments within the meaning of Section 280G(b)(1) (after
applying clause (a), above), and (c) the value of any non-cash
benefits or any deferred payment or benefit shall be determined by the
Corporation's independent auditors in accordance with the principles
of Sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, you shall be deemed to
pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is
to be made and state and local income taxes at the highest marginal
rate of taxation in the state and locality of your residence on the
Date of Termination, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local
taxes. In the event that the Excise Tax is subsequently determined to
be less than the amount taken into account hereunder at the time of
termination of your employment, you shall repay to the Corporation at
the time that the amount of the reduction in Excise Tax is finally
determined the portion of the Gross-Up Payment attributable to such
reduction (plus the portion of the Gross-Up Payment attributable to
the Excise Tax and federal and state and
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local income tax imposed on the Gross-Up Payment being repaid by you
if such repayment results in a reduction in Excise Tax and/or a
federal and state and local income tax deduction) plus interest on the
amount of such repayment at the rate provided in Section
1274(b)(2)(b). In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder at the time of the
termination of your employment (including by reason of any payment the
existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Corporation shall make an additional Gross-Up
Payment in respect of such excess (plus any interest payable with
respect to such excess) at the time that the amount of such excess is
finally determined.
(v) The payments provided for in Subsections 4(iii)(b) and (c)
and Subsection 4(iv) above shall be made not later than the fifth day
following the Date of Termination; provided, however, that if the
amounts of such payments cannot be finally determined on or before such
day, the Corporation shall pay to you on such day an estimate, as
determined in good faith by the Corporation, of the minimum amount of
such payments and shall pay the remainder of such payments (together
with interest at the rate provided in Section 1274(b)(2)(B) of the
Code) as soon as the amount thereof can be determined but in no event
later than the thirtieth day after the Date of Termination. In the
event that the amount of the estimated payments exceeds the amount
subsequently determined to have been due, such excess shall constitute
a loan by the Corporation to you, payable on the fifth day after demand
by the Corporation (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code).
(vi) In the event of Termination of Employment or Change of
Control, the Corporation shall without contest forgive any and all
Officer and/or Director advancement, loans or draws, direct or
indirect, current, past or future due and payable, under any and all
types of agreement regardless of said amounts, terms, etc. This shall
occur no later than the day following the Termination Date or Change of
Control effective date.
(vii) Except as provided in Subsection (iii)(e) hereof, you
shall not be required to mitigate the amount of any payment provided
for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section
4 be reduced by any compensation earned by you as a result of
employment by another employer, by retirement benefits, by offset
against any amount claimed to be owed by you to the Corporation, or
otherwise.
5. SUCCESSORS; BINDING AGREEMENT.
(i) The Corporation will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the
Corporation to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Corporation would be
required to perform it if no such succession had taken place. Failure
of the Corporation to obtain such assumption and agreement prior to
the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to compensation from the Corporation
in the same amount and on the same terms to which you would be
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entitled hereunder if you terminate your employment for Good Reason
following a change in control of the Corporation, except that for
purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination.
As used in this Agreement, "Corporation" shall mean the Corporation as
hereinbefore defined and any successor to its business and/or assets
as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
(ii) This Agreement shall inure to the benefit of and be
enforceable by you and your personal or legal heirs, distributees,
devisees and legatees. If you should die while any amount would still
be payable to you hereunder had you continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to your devisee, legatee or other
designee or, if there is no such designee, to your estate.
6. NOTICE. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States postage
prepaid, addressed to the respective addresses set forth on the first page of
this Agreement, provided that all notices to the Corporation shall be directed
to the attention of the Board with a copy to the Secretary of the Corporation,
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of address shall be
effective only upon receipt.
7. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by you and such officer as may be specifically designated
by the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be, at your
discretion, governed by the laws of the State of Florida, the State of Nevada,
or the State of California without regard to its conflicts of law principles.
All references to sections of the Exchange Act or the Code shall be deemed also
to refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under
federal, state or local law. The obligations of the Corporation under Section 4
shall survive the expiration of the term of this Agreement.
8. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
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10. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in the State of Nevada, in the
State of California, in the State of New York, or in the State of Florida, to be
at your option, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction; provided, however, that you shall be entitled to
seek specific performance of your right to be paid until the Date of Termination
during the pendency of any dispute or controversy arising under or in connection
with this Agreement.
11. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes the provisions of the General Policy as well as all prior agreements,
provisos, covenants, arrangements, communications, representations or
warranties, whether oral or written, by any officer, employee or representative
of any party hereto; and any prior agreement of the parties hereto in respect of
the subject matter contained herein is hereby terminated and canceled.
If this letter sets forth our Agreement on the subject matter hereof,
kindly sign and return to the Corporation the enclosed copy of this letter,
which will then constitute our Agreement on this subject.
Sincerely,
INAMED CORPORATION AND SUBSIDIARIES
By:/s/ Xxxxxx X. XxXxxx
--------------------
Xxxxxx X. XxXxxx
Title: Chairman of the Board
AGREED TO THIS 22ND DAY OF JANUARY, 1998
/s/ Xxxx X. Xxxxx
-----------------
Xxxx X. Xxxxx, Employee
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