Exhibit 10.22
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This EMPLOYMENT AND NONCOMPETITION AGREEMENT, dated as of November 3,
2000, is made and entered into between Endocardial Solutions, Inc., a Minnesota
corporation (the "Company") and Xxxxx X. Xxxxxxx, an individual resident of the
state of Minnesota ("Executive").
WHEREAS, the Company and Executive are parties to a Change in Control
Agreement dated November 3, 2000 ("Change in Control Agreement");
WHEREAS, the Company and Executive are parties to a Proprietary
Information and Inventions Agreement ("Proprietary Information Agreement") dated
May 31, 1994;
WHEREAS, the Company and Executive have agreed to enter into this
Agreement to set forth the terms and conditions of Executive's employment and
termination of employment in circumstances other than those addressed in the
Change in Control Agreement; and
WHEREAS, Executive agrees that this Agreement provides good and
valuable consideration for a non-competition provision and that such provision
is necessary and reasonable to protect the legitimate business interest of the
Company.
The Company and Executive hereby agree as follows:
1. EMPLOYMENT. The Company hereby employs Executive, and
Executive agrees to perform services for the Company, upon the terms and
conditions set forth in this Agreement.
2. AT-WILL EMPLOYMENT. Executive shall be employed on an at-will
basis. Executive or the Company may terminate their employment relationship at
anytime for any reason or for no reason. In the event of termination, the
parties' respective rights and obligations shall be governed by this Agreement
or the Change in Control Agreement, as applicable.
3. POSITION AND DUTIES.
3.01 SERVICE WITH THE COMPANY. Executive agrees to serve as
the President and Chief Executive Officer of the Company, and he
agrees to perform such employment duties as the Company shall assign
to Executive from time to time. Executive also agrees to serve, for
any period for which Executive may be elected, as a Director of the
Company and Executive shall receive no additional compensation for
serving as a Director.
3.02 PERFORMANCE OF DUTIES. Executive agrees to serve the
Company faithfully and to the best of Executive's ability and to
devote Executive's full time, attention and efforts to the business
and affairs of the Company during Executive's employment.
4. Compensation.
4.01 BASE SALARY. As base compensation for all services to
be rendered by Executive under this Agreement, the Company shall pay
to Executive an annualized salary of $260,000. Executive's salary
shall be paid in accordance with the Company's normal payroll
procedures and policies, as such procedures and policies may be
modified from time to time.
4.02 BONUS. Executive's entitlement to a bonus, if any,
shall be determined by the Board of Directors.
4.03 PARTICIPATION IN BENEFITS. During Executive's
employment with the Company, Executive shall be entitled to
participate in the employee benefits offered generally by the Company
to its employees, to the extent that Executive's position, tenure,
salary, health, and other qualifications make Executive eligible to
participate. Executive's participation in such benefits shall be
subject to the terms of the applicable plans, as the same may be
amended from time to time. The Company does not guarantee the
adoption or continuance of any particular employee benefit during
Executive's employment, and nothing in this Agreement is intended to,
or shall in any way restrict the right of the Company, to amend,
modify or terminate any of its benefits during Executive's
employment.
4.04 EXPENSES. In accordance with the Company's normal
policies for expense reimbursement, the Company will reimburse
Executive for all reasonable and necessary expenses incurred by
Executive in the performance of Executive's duties under this
Agreement, subject to the presentment of receipts or other
documentation acceptable to the Company.
5. OTHER EMPLOYMENT POLICIES. Executive shall comply with all of
the applicable policies generally in effect for employees of the Company.
6. TERMINATION.
6.01 TERMINATION DUE TO EXECUTIVE'S DEATH OR DISABILITY.
Executive's employment shall terminate automatically in the event of
Executive's death or Executive's disability which results in
Executive's inability to perform the essential functions of
Executive's position, with or without reasonable accommodation,
provided Executive has exhausted Executive's entitlement to any
applicable leave, if Executive desires to take and satisfies all
eligibility requirements for such leave.
6.02 TERMINATION BY THE COMPANY WITH CAUSE. Executive's
employment shall terminate immediately in the event the Company shall
determine, in its sole discretion, that there is "cause" to terminate
Executive's employment, which shall include any of the following:
(i) Repeated violations by Executive of any of his
duties or his repeated failures or omissions to carry out
lawful and reasonable orders which, in the reasonable judgment
of the Company, are willful and deliberate and which are
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not cured within a reasonable period after Executive's receipt
of written notice thereof from the Company;
(ii) Any act or acts of personal dishonesty by
Executive which are intended to result in the personal
enrichment of Executive at the expense of the Company;
(iii) Any willful and deliberate misconduct that is
materially and demonstrably injurious to the Company; or
(iv) Any criminal indictment, presentment, or
conviction for a felony, whether or not the Company is the
victim of such offense.
6.03 TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company
may terminate Executive's employment at any time for any reason, and
without notice, as outlined in Section 6.06 below.
6.04 TERMINATION BY EXECUTIVE. Executive may terminate his
employment at any time by giving 60 days' written notice thereof to
Employer's Board of Directors. Upon notice of termination by
Executive, the Company may at its option elect to have Executive
cease to provide services immediately, provided that during such
60-day notice period Executive shall be entitled to earn and be paid
his base salary, as described in Section 4.01.
6.05 TERMINATION BY THE COMPANY OR EXECUTIVE IN CONNECTION
WITH A CHANGE IN CONTROL. In the event of a termination of Executive
in connection with a Change in Control, as that term is defined in
the Change in Control Agreement, the rights and responsibilities of
the Company and Executive shall be governed solely by the terms of
the Change in Control Agreement and this Agreement shall be of no
further force or effect. In the event of a termination of Executive
by the Company which occurs more than twelve (12) months after a
Change in Control as that term is defined in the Change in Control
Agreement, this Agreement shall govern the parties rights and
obligations in connection with the termination of Executive. The rest
of this Section 6.05 notwithstanding, Executive shall have continuing
obligations as set forth in Section 6.07.
6.06 EFFECT OF AND COMPENSATION UPON TERMINATION.
Notwithstanding any termination of Executive's employment with the
Company, in the event of termination under this Agreement, Executive,
in consideration of Executive's 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.
In addition, in the event that Executive's employment
terminates due to Executive's death or disability, or the Company
terminates Executive's employment in accordance with Section 6.02, or
Executive terminates his employment under Section 6.04, Executive
shall not be entitled to receive any further compensation under the
provisions of this Agreement after the date of such termination,
subject to applicable law.
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If the Company terminates Executive's employment under
Section 6.03, Executive will receive salary continuation consisting
of Executive's base salary as of the date of termination, payable on
normal payroll periods, for the shorter of: (1) eighteen months or
(2) until he accepts a position of comparable employment for another
employer ("Salary Continuation"). Executive shall only be entitled to
such Salary Continuation if Executive signs a comprehensive release
of claims in a form acceptable to the Company. If Executive does not
sign such a release or if it is signed, but then rescinded, Executive
shall not be entitled to any further compensation from the Company,
except that Executive shall be paid amounts due to him for salary as
of the date of termination and Executive will be paid, on a pro rata
basis, any bonus to which he was entitled as of the date of
termination. In the event that Executive's employment is terminated
without cause under circumstances governed by the Change in Control
Agreement, Executive shall not be entitled to any compensation under
this Agreement, and specifically under this Section 6.06, beyond the
payment of salary and a pro rata payment of his bonus, if any, earned
up to the date of termination.
Notwithstanding any other provision in this Agreement, should
Executive's employment be terminated for any reason, he will not earn
and will have no right to receive any compensation except as
expressly provided in this Agreement or the Change in Control
Agreement, or in the terms and conditions of the Company's
compensation plan or program referenced herein; under no
circumstances shall Executive be entitled to compensation under this
Agreement if he is entitled to compensation under the Change in
Control Agreement.
6.07 SURRENDER OF RECORDS AND PROPERTY. Upon termination of
Executive's employment with the Company, Executive shall deliver
promptly to the Company all records, manuals, books, blank forms,
documents, letters, memoranda, notes, notebooks, reports, computer
disks, computer software, computer programs (including source code,
object code, on-line files, documentation, testing materials and
plans and reports) designs, drawings, formulae, data, tables or
calculations or copies thereof, which are the property of the Company
or which relate in any way to the business, products, practices or
techniques of the Company and all other property, trade secrets and
confidential information of the Company , including, but not limited
to, all tangible, written, graphical, machine readable and other
materials (including all copies) which in whole or in part contain
any trade secrets or confidential information of the Company which in
any of these cases are in Executive's possession or under Executive's
control.
7. NON-COMPETE.
7.01 AGREEMENT CONCERNING NON-COMPETITION. Executive
acknowledges that the Company needs to be protected against the
potential for unfair competition and impairment of the Company's
goodwill by Executive's use of the Company's training, assistance,
and trade secret, confidential, and proprietary information in direct
competition with the Company. Executive therefore covenants and
agrees that, while Executive is employed with the Company, and for a
period of twelve (12) months following the termination of Executive's
employment with the Company for any reason, whether occasioned by
Executive or the Company, Executive will not, directly or
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indirectly, engage in any business activity, in any part of the
world, either on Executive's own behalf or as an investor, owner,
adviser, principal, agent, partner, officer, director, stockholder,
employee, limited liability company member, licensor, licensee,
consultant, member of any association or in any capacity which calls
for rendering of services, advice, acts of management, operation or
control, which is the same as, similar to, or competitive with any
business of the Company or which is engaged in the development,
design, manufacture, production, assembly, marketing, or sale of
products intended to compete with business of the Company. Without
limiting the generality of the foregoing, "the business of the
Company" means the design, manufacture, and sale of diagnostic
equipment and disposables for the diagnosis of complex arrhythmia,
and any other business that has been or subsequently is conducted
during Executive's employment with the Company. In the event that
Executive receives Salary Continuation, pursuant to Section 6.06, for
a period in excess of twelve (12) months but no greater than eighteen
(18) months ("Additional Period"), Executive shall abide by the terms
of this Section 7 for any such Additional Period. Further, the
Company, in its sole discretion, may elect to pay Executive Salary
Continuation for any and all of the Additional Period up to eighteen
(18) months and Executive shall abide by the terms of this Section 7
for any portion of the Additional Period for which he receives Salary
Continuation.
7.02 LIMITATION ON RESTRICTIONS AND AGREEMENTS. Ownership
by Executive of any securities now owned by Executive, or Executive's
future ownership, as a passive investment, of less than 1% of the
outstanding shares of capital stock of any corporation listed on a
national securities exchange or publicly traded on any nationally
recognized over-the-counter market shall not constitute a breach of
Section 7.01 of this Agreement.
7.03 DISCLOSURE OF AGREEMENT. If Executive seeks employment
with another employer or organization while Executive is employed by
the Company or during the period of time for which is bound by
Section 7.01 following the termination of Executive's employment with
the Company for any reason (whether occasioned by Executive or the
Company), Executive will inform any potential future employer and any
organization that may retain Executive for any purpose, prior to
accepting any new employment or other engagement, of the existence of
this Agreement and will provide such employer or organization with a
copy of this Agreement.
8. MISCELLANEOUS.
8.01 GOVERNING LAW AND VENUE SELECTION. This Agreement is
made under and shall be governed by and construed in accordance with
the laws of the State of Minnesota without regard to conflicts of
laws principles thereof, of any of the United States of America, or
of any other country or province thereof. The parties agree that any
litigation in any way relating to this Agreement or to Executive's
employment by the Company, including but not limited to the
termination of this Agreement or of Executive's employment, will be
venued in the State of Minnesota, Hennepin County District Court, or
the United States District Court for the District of Minnesota.
Executive and the Company hereby consent to the personal jurisdiction
of these courts and waive any objection that such venue is
inconvenient or improper.
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8.02 PRIOR AGREEMENTS. This Agreement (including other
agreements specifically mentioned in this Agreement), the Proprietary
Information Agreement and the Change in Control Agreement contain the
entire agreement of the parties relating to the employment of
Executive by the Company and the other matters discussed herein and
supersedes all prior promises, contracts, agreements and
understandings of any kind, whether express or implied, oral or
written, with respect to such subject matter (including, but not
limited to, any promise, contract or understanding, whether express
or implied, oral or written, by and between the Company and
Executive), and the parties hereto have made no agreements,
representations or warranties relating to the subject matter of this
Agreement which are not set forth herein or in the other agreements
mentioned herein.
8.03 WITHHOLDING TAXES. The Company, as applicable, may
take such action as it deems appropriate to insure that all
applicable federal, state, city and other payroll, withholding,
income or other taxes ("Taxes") arising from any compensation,
benefits or any other payments made pursuant to this Agreement, or
any other contract, agreement or understanding which relates, in
whole or in part, to Executive's employment with the Company, are
withheld or collected from Executive. In connection with the
foregoing, Executive agrees to notify the Company promptly upon
entering into any contract, agreement or understanding relating to
Executive's employment with the Company (other than this Agreement
and those agreements expressly provided for herein) and also to
notify the Company promptly of any payments or benefits paid or
otherwise made available pursuant to any such agreements.
8.04 AMENDMENTS. No amendment or modification of this
Agreement shall be deemed effective unless made in writing and signed
by Executive and the Company.
8.05 NO WAIVER. No term or condition of this Agreement
shall be 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 as specifically set forth in the waiver.
8.06 ASSIGNMENT. This Agreement shall not be assignable,
in whole or in part, by any party without the written consent of the
other party, except that the Company 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, or of which 50% or
more of the equity investment and of the voting control is owned,
directly or indirectly, by, or is under common ownership with, the
Company. After any such assignment by the Company, the Company 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 8.06.
8.07 INJUNCTIVE RELIEF. Executive acknowledges and agrees
that the services to be rendered by Executive hereunder are of a
special, unique and extraordinary character,
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that it would be difficult to replace such services and that any
violation of Sections 5, 6.06 or 7 hereof would be highly injurious
to the Company, and that it would be extremely difficult to
compensate the Company fully for damages for any such violation.
Executive further agrees that the provisions of sections 5, 6.06 and
7 are reasonable and necessary to protect the legitimate business
interests of the Company. Executive specifically agrees that the
Company, shall be entitled to temporary and permanent injunctive
relief to enforce the provisions of Sections 5, 6.06 and 7 and that
such relief may be granted without the necessity of proving actual
damages and without necessity of posting any bond. This provision
with respect to injunctive relief shall not, however, diminish the
right of the Company to claim and recover damages, or to seek and
obtain any other relief available to it at law or in equity, in
addition to injunctive relief.
8.08 SEVERABILITY. To the extent any provision of this
Agreement shall be determined to be invalid or unenforceable, such
provision shall be deemed to be deleted from this Agreement, and the
validity and enforceability of the remainder of this Agreement shall
be unaffected.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date set forth in the first paragraph.
ENDOCARDIAL SOLUTIONS, INC.
By /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Director
/s/ Xxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxx
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