1
EXHIBIT 10.21
AMENDMENT #1
TO
EMPLOYMENT AGREEMENT
THIS AMENDMENT #1 TO EMPLOYMENT AGREEMENT (this "Amendment") is made and
entered into as of the 21st day of June, 2001 (the "Effective Date") by and
between XXXXXX X. XXXXXXX, an individual ("Employee") and I-FLOW CORPORATION, a
Delaware corporation ("Company").
BACKGROUND
A. The Company and Employee previously entered into that certain
Employment Agreement dated May 16, 1990 (the "Agreement"). Capitalized terms in
this Amendment and not otherwise defined herein shall have the meanings given
them in the Agreement.
B. The Company and Employee wish to amend and modify certain provisions
in the Agreement as provided herein and effective as of the Effective Date
hereof, while leaving unchanged all other provisions of the Agreement.
AGREEMENT
1. DUTIES. In light of Employee's promotions since 1990, the first three
sentences of Section 1.2 of the Agreement are hereby deleted in their entirety
and are replaced with the following sentences:
DURING THE TERM OF THIS AGREEMENT, THE COMPANY SHALL EMPLOY EMPLOYEE
AS THE COMPANY'S CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
TOGETHER WITH ANY ADDITIONAL DESIGNATIONS OF TITLE AS THE COMPANY'S
BOARD OF DIRECTORS, IN ITS DISCRETION, MAY PROVIDE TO EMPLOYEE.
2. BASE SALARY. In light of Employee's base salary increases since 1990,
the second sentence of Section 2.1 of the Agreement is hereby deleted and is
replaced with the following sentence:
DURING THE TERM OF THIS AGREEMENT, EMPLOYEE'S BASE SALARY SHALL NOT
BE REDUCED.
3. BONUS. To provide greater flexibility to the Company and Employee in
determining the form of payment for any annual bonuses that Employee may earn,
Sections 2.2(b) and 2.2(c) of the Agreement are hereby deleted in their
entirety.
4. VACATION. To provide an additional two (2) weeks of vacation in light
of Employee's more than 11 years of service to the Company, the first sentence
of Section 2.4(a) of the Agreement is hereby deleted and replaced with the
following sentence:
EMPLOYEE SHALL BE ENTITLED TO SIX (6) WEEKS PAID VACATION DURING EACH
YEAR OF THIS AGREEMENT.
2
5. AUTOMOBILE ALLOWANCE. To address the effects of inflation since 1990
when Employee's automobile allowance was set at $750 per month plus gasoline
expenses, the text of Section 2.4(b) of the Agreement is hereby deleted in its
entirety and replaced with the following sentence:
DURING THE TERM OF THIS AGREEMENT, THE COMPANY SHALL PAY EMPLOYEE AN
AUTOMOBILE EXPENSE ALLOWANCE OF $1,000 PER MONTH, GROSSED UP FOR
INCOME TAX PURPOSES, AND SHALL REIMBURSE EMPLOYEE FOR ALL GASOLINE
AND MAINTENANCE EXPENSES INCURRED BY HIM IN OPERATING HIS
AUTOMOBILE.
6. TERMINATION WITHOUT CAUSE. To provide Employee with an additional 1
year of severance and continued health insurance benefits in the event of his
termination without cause, and to provide the Company with a deferred payment
option, Section 2.5(b) of the Agreement is hereby deleted in its entirety and
replaced with the following:
(b) TERMINATION WITHOUT CAUSE. IN THE EVENT EMPLOYEE'S EMPLOYMENT AS
PROVIDED HEREIN IS TERMINATED BY THE COMPANY WITHOUT CAUSE, OR IN
THE EVENT EMPLOYEE RESIGNS HIS EMPLOYMENT BECAUSE HIS JOB LOCATION
IS TRANSFERRED (WITHOUT HIS PRIOR, VOLUNTARY CONSENT) TO A SITE MORE
THAN THIRTY (30) MILES AWAY FROM HIS CURRENT PLACE OF EMPLOYMENT,
THE COMPANY SHALL BE OBLIGATED TO PAY AND PROVIDE AND EMPLOYEE SHALL
BE ENTITLED TO RECEIVE, AS SEVERANCE, THE FOLLOWING PAYMENTS AND
BENEFITS:
(i) A CASH PAYMENT EQUAL TO THREE (3) TIMES THE SUM OF (A)
EMPLOYEE'S ANNUAL SALARY RATE IN EFFECT AT THE TIME OF
TERMINATION, PLUS (B) THE AVERAGE ANNUAL BONUS EARNED BY
EMPLOYEE IN THE PREVIOUS THREE FULL FISCAL YEARS; PROVIDED,
HOWEVER, THAT THE COMPANY MAY, AT ITS ELECTION, PAY TO EMPLOYEE
ONE-HALF OF SUCH SUM AT THE TIME OF EMPLOYEE'S TERMINATION WITH
THE REMAINING ONE-HALF TO BE PAID IN EQUAL MONTHLY INSTALLMENTS
OVER THE 24 MONTHS IMMEDIATELY FOLLOWING THE DATE OF
TERMINATION;
(II) ANY BONUS, OR RELEVANT PRO RATA PORTION THEREOF, EARNED BY
EMPLOYEE FOR THE FISCAL YEAR IN WHICH THE TERMINATION OCCURS,
TOGETHER WITH ANY AND ALL DEFERRED AND UNPAID BONUS AMOUNTS
EARNED BY EMPLOYEE PRIOR TO THE EFFECTIVE DATE OF THIS AMENDMENT
WHICH WERE SUBJECT TO THE DEFERRED PAYMENT PROVISIONS OF (OLD)
SECTIONS 2.2(B) AND 2.2(C) OF THIS AGREEMENT;
(III) FOR THE 36-MONTH PERIOD FOLLOWING EMPLOYEE'S TERMINATION
WITHOUT CAUSE, EMPLOYEE SHALL BE ENTITLED TO CONTINUE TO
PARTICIPATE AT THE COMPANY'S EXPENSE IN THE GROUP MEDICAL
INSURANCE PROGRAMS (INCLUDING HEALTH, DRUG, DENTAL, AND VISION
INSURANCE) WHICH HAD BEEN MADE AVAILABLE TO HIM (INCLUDING HIS
FAMILY) BEFORE HIS TERMINATION (OR A SUBSTANTIVELY EQUIVALENT
PROGRAM). THE PROGRAMS SHALL BE CONTINUED IN THE SAME WAY AND AT
THE SAME LEVEL AS IMMEDIATELY PRIOR TO EMPLOYEE'S TERMINATION
WITHOUT CAUSE. EMPLOYEE'S PARTICIPATION IN
2
3
SUCH GROUP MEDICAL INSURANCE PROGRAMS SHALL BE TERMINATED PRIOR
TO THE 36-MONTH ANNIVERSARY OF EMPLOYEE'S TERMINATION IF AND
WHEN EMPLOYEE RECEIVES GROUP MEDICAL INSURANCE BENEFITS AS A
RESULT OF CONCURRENT COVERAGE THROUGH ANOTHER EMPLOYER'S
PROGRAM; AND
(IV) EMPLOYEE'S UNVESTED STOCK OPTIONS WHICH ARE OUTSTANDING
SHALL IMMEDIATELY BECOME FULLY VESTED AND EXERCISABLE, AND ALL
OF EMPLOYEE'S STOCK OPTIONS SHALL REMAIN EXERCISABLE FOR THEIR
REMAINING TERM.
Nothwithstanding the foregoing or anything in this Amendment or the Agreement,
Employee shall be entitled to receive whatever additional severance pay and
other benefits, if any, for which he may qualify according to the terms of the
"Agreement Re: Change in Control" entered into as of June 21, 2001 between the
Company and Employee.
7. CHANGE IN CONTROL. In light of the Agreement Re: Change in Control
entered into between the Company and Employee, Section 2.6 of the Agreement is
deleted in its entirety and references to Section 2.6 found in Section 2.7 of
the Agreement shall be deemed references to the Agreement Re: Change in Control
between the parties.
8. NOTICES. Employee's address for notices has been changed to 00 Xxx
Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000.
9. NO OTHER CHANGES. Except as otherwise set forth in this Agreement,
all terms and provisions of the Agreement remain unchanged and in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have entered into this Amendment
as of the Effective Date.
I-FLOW CORPORATION XXXXXX X. XXXXXXX
By: By:
----------------------------------- -----------------------------
Xxxxx X. Dal Porto Xxxxxx X. Xxxxxxx
Executive VP, COO
3
