EMPLOYMENT AGREEMENT
Exhibit 10.25
This EMPLOYMENT AGREEMENT (the “Agreement”) is by and between Cardiovascular Systems, Inc. (the
“Corporation”) and Xxxxx Xxxxxxxxx (“Employee”).
RECITALS
A. The Corporation is engaged in the business of designing, developing, manufacturing and marketing
its Orbital Atherectomy System.
B. The Corporation, through its research, development and expenditure of funds, has developed
confidential and proprietary information, including trade secrets.
C. The Corporation understands from you that you are not subject to any agreement that would
restrict your ability to work for the Corporation, such as a non-compete agreement with a former
employer. If our understanding is incorrect, please contact Xxxxx Xxxxxxxx immediately. It is the
Corporation’s expectation that you will not disclose or use the confidential or trade secret
information of any former employer or third party in connection with your employment with the
Corporation or to benefit the Corporation in any way.
D. Employee desires to commence his/her employment with the Corporation and the Corporation desires
to employ Employee under the terms and conditions of this Agreement.
E. During his/her employment, Employee will have access to the Corporation’s valuable Confidential
Information (as defined below), may contribute to Confidential Information and acknowledges that
the Corporation will suffer irreparable harm if Employee uses Confidential Information outside
his/her employment or makes unauthorized disclosure of Confidential Information to any third party.
AGREEMENT
In consideration of the above recitals and the promises set forth in the Agreement, the parties
agree as follows:
1. Nature and Capacity of Employment. The Corporation hereby agrees to employ Employee as
Chief Financial Officer, pursuant to the terms of this Agreement. Employee agrees to perform, on a
full time basis, the functions of this position, pursuant to the terms of this Agreement. The
employee will report to the CEO, Xxxx Xxxxxx.
2. Term of Employment. The term of employment under this Agreement shall commence on a
date on or about April 14, 2008 with the Employee’s execution of this
Agreement and continue until terminated by either party as provided for in Paragraph 8 hereunder.
3. Base Salary. The full-time base salary for this position currently is eight thousand
six hundred fifty three dollars and eighty four cents ($8,653.84), payable biweekly, equivalent of
two hundred twenty five thousand dollars ($225,000.00) per year, less required and authorized
deductions and withholdings. Employee will be eligible for a performance and salary review
approximately one year following the date of this Agreement.
4. Bonus. Employee will be eligible to participate in the Management Bonus Plan, payable
up to 40% of base salary annualized.
5. Restricted Stock Grant. Employee will be eligible to receive a restricted stock grant
in the amount of 75,000 shares of common stock. The restricted stock will vest over a three year
period, 1/3 of the total shares on each of the first three anniversaries of the date of grant
provided continuous employment with the Company through these dates. Further details of the
restricted stock grant will be provided in a separate RESTRICTED STOCK GRANT AGREEMENT. The
restricted stock grant may be made only by the Company’s Board of Directors and will be effective
only upon such approval. Management of the Company will present the proposed grant to the Board for
approval by the Board at its next regularly scheduled meeting.
6. Employee Benefits; Vacation. Employee will be entitled to participate in all retirement
plans and all other employee benefits and policies made available by the Corporation to its
full-time employees, to the extent Employee meets applicable eligibility requirements. All
payments or other benefits paid or payable to Employee under such employee benefit plans or
programs of the Corporation shall not be affected or modified by this Agreement and shall be in
addition to the annual base salary payable by the Corporation to Employee from time to time under
this Agreement. Employee will be eligible to accrue and use paid vacation pursuant to the
Corporation’s normal vacation accrual policies. Nothing in this Agreement is intended to or shall
in any way restrict the Corporation’s right to amend, modify or terminate any of its benefits or
benefit plans during Employee’s employment.
7. Best Efforts/Undertakings of Employee. During Employee’s employment with the
Corporation, Employee shall serve the Corporation faithfully and to the best of his/her ability and
shall devote his/her full business and professional time, energy, and diligence to the performance
of the duties assigned to him/her. Employee shall perform such duties for the Corporation (i) as
are customarily incident to Employee’s position and (ii) as may be assigned or delegated to
Employee from time to time by the Chief Employee Officer, or his/her designees. During Employee’s
employment with the Corporation, Employee shall not engage in any other business activity that
would conflict or interfere with his/her ability to perform his/her duties under this Agreement (to
include not providing any services to any individual, company or other business entity that is a
competitor, supplier,
or customer of the Corporation, except in connection with Employee’s employment with the
Corporation). Furthermore, Employee agrees to be subject to the Corporation’s
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control, rules,
regulations, policies and programs. Employee further agrees that he/she shall carry on all
business and commercial correspondence, publicity and advertising in the Corporation’s name and
he/she shall not enter into any contract on behalf of the Corporation except as expressly
authorized by the Corporation.
8. Termination of Employment.
8.1 Employment At Will. Employee is employed “at-will.” That is, either Employee or
Corporation may terminate the employment relationship and this Agreement at any time, for any
reason, with or without cause, and with or without advance notice.
8.2 Payment Upon Termination. Except as provided in Section 8.3, after the effective
date of termination, Employee shall not be entitled to any compensation, benefits, or payments
whatsoever except for compensation earned through his last day of employment and any accrued
benefits.
8.3 Severance. If at any time after Employee has been continuously employed by the
Corporation for six months, Employee is terminated by the Corporation without Cause (as defined
below), or Employee terminates his employment for Good Reason (as defined below), and Employee
executes, returns and does not rescind a release of claims agreement in a form supplied by the
Corporation, then the Corporation shall: (i) pay Employee in a lump sum or at regular payroll
intervals, at the Corporation’s option (subject to the application of Code Section 409A as set
forth in Section 8.4 below), an amount equal to twelve (12) months of Employee’s then current base
salary; and (ii) continue to pay the Corporation’s ordinary share of premiums for twelve (12)
calendar months for Employee’s COBRA continuation coverage in the Corporation’s group medical,
dental, and life insurance plans (as applicable), provided Employee timely elects such continuation
coverage and timely pays Employee’s share of such premiums, if any.
| a. | Termination by the Corporation with Cause. For purposes of this Section 8.3, “Cause” shall be defined as: |
| (1) | Employee’s neglect of any of his material duties or his failure to carry out reasonable directives from the Chief Executive Officer or the Board of Directors or its designees; | ||
| (2) | Any willful or deliberate misconduct that is injurious to the Corporation; | ||
| (3) | Any statement, representation or warranty made to the Chief Executive Officer, the Board or its designees by Employee that Employee knows is false or materially misleading; or |
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| (4) | Employee’s commission of a felony, whether or not against the Corporation and whether or not committed during Employee’s employment. |
| b. | Termination by Employee for Good Reason. For purposes of this Section 8.3, “Good Reason” shall be defined as: |
| (1) | The assignment to Employee, without Employee’s written consent, of employment responsibilities that are not of comparable responsibility and status to the employment responsibilities described in this Agreement; | ||
| (2) | The Corporation’s reduction of Employee’s base salary without Employee’s written consent, unless pursuant to a cost reduction effort approved by the Board of Directors that also results in the reduction of salaries of other executive officers; or | ||
| (3) | The Corporation’s failure to provide Employee, without Employee’s written consent, those employee benefits specifically required by this Agreement. |
8.4 IRC Section 409A. Notwithstanding the foregoing Section 8.3, if the severance
payments described in Section 8.3 are subject to the requirements of Internal Revenue Code Section
409A and the Corporation determines that Employee is a “specified employee” as defined in Code
Section 409A as of the date of the termination, such payments shall not be paid or commence earlier
than the date that is six months after the termination, but shall be paid or commence during the
calendar year following the year in which the termination occurs and within 30 days of the earliest
possible date permitted under Code Section 409A.
9. Return of Property. Immediately upon termination for any reason (or at such earlier
time as requested by the Corporation), Employee shall deliver to the Corporation all of its
property, including but not limited to all work in progress, research data, equipment, models,
prototypes, originals and copies of documents and software, customer information and lists,
financial information, and all other material in his/her possession or control that belongs to the
Corporation or its customers or contains Confidential Information.
10. Confidential Information. “Confidential Information” means any information that
Employee learns or develops or has learned or developed during the course of employment that
derives independent economic value from being not generally known or readily ascertainable by other
persons who could obtain economic value from its
disclosure or use, and includes, but is not limited to, trade secrets, and may relate to such
matters as research and development, manufacturing processes, management systems and techniques of
sales and marketing.
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Employee agrees not to directly or indirectly use or disclose any Confidential Information for the
benefit of anyone other than the Corporation either during the course of employment or after the
termination of employment. For purposes hereof, Confidential Information shall also include any
information beneficial to the Corporation or its subsidiaries which is not generally known and
shall include, but is not limited to, methods of research and testing, customer lists, vendor lists
and financial information. Employee recognizes that the Confidential Information constitutes a
valuable asset of the Corporation and hereby agrees to act in such a manner as to prevent its
disclosure and use by any person unless such use is for the benefit of the Corporation. Employee’s
obligations under this paragraph are unconditional and shall not be excused by any conduct on the
part of the Corporation, except prior voluntary disclosure to the general public by the Corporation
of the information.
11. Inventions. “Invention” shall mean any invention, discovery, design, improvement,
business method, or idea, whether patentable or copyrightable or not, and whether or not shown or
described in writing or actually or constructively reduced to practice. Employee shall promptly
and fully disclose in writing to the Corporation, and will hold in trust for the Corporation’s sole
right and benefit, any Invention that Employee, during the period of employment and for two (2)
years thereafter, makes, conceives, or reduces to practice or causes to be made, conceived, or
reduced to practice, either alone or in conjunction with others, that:
(1) Relates to any subject matter pertaining to Employee’s employment; or
(2) Relates to or is directly or indirectly connected with the Corporation’s business,
products, processes, or Confidential Information; or
(3) Involves the use of any of the Corporation’s time, material, or facility.
Employee shall keep accurate, complete, and timely records for such Inventions, which records shall
be the Corporation’s property. Employee hereby assigns to the Corporation all of Employee’s right,
title, and interest in and to all such Inventions and, upon the Corporation’s request, Employee
shall execute, verify, and deliver to the Corporation such documents, including without limitation,
assignments, affidavits, declarations, and patent applications, and shall perform such other acts,
including, without limitation, appearing as a witness in any action brought in connection with this
Agreement that is necessary to enable the Corporation to obtain the sole right, title, and benefit
to all such Inventions. Employee agrees, and is hereby notified, that the above agreement to
assign Inventions to the Corporation does not apply to any Invention for which no equipment,
supplies, facility, or Confidential Information of the Corporation’s was used, which was developed
entirely on Employee’s own time, and (a) which does not relate: (i) directly to the Corporation’s
business; or (ii) to the Corporation’s actual or demonstrably anticipated
research or development; or (b) which does not result from any work performed by Employee for the
Corporation. Employee has disclosed and identified in the attached Exhibit A entitled
“Inventions and Developments Prior to Employment with the
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Corporation” all of the Inventions in
which Employee possesses any right, title, or interest prior to his/her employment with the
Corporation or execution of this Agreement and which are not subject to this Agreement’s terms.
12. Copyrights. Employee agrees that he/she is employed by the Corporation and that any
computer, software, and/or network (including internet) applications, designs, documentation, or
other work of authorship (hereinafter referred to as “Works”) prepared by Employee for the benefit
of the Corporation or its customers or prepared at the request of the Corporation or its customers
(as well as Employee’s contributions to any other Works relating to the Corporation), shall each be
considered “work made for hire” within the meaning of U.S. Copyright law and that all such Works
shall belong to the Corporation. To the extent that any such Works cannot be considered a “work
made for hire,” Employee agrees to disclose and assign, and hereby does assign, to the Corporation
all right, title, and interest in and to such Works, and agrees to assist the Corporation by
executing any such documents or applications as may be useful to evidence such ownership of such
Works. To the extent such Works are based on preexisting work in which Employee has an ownership
interest, Employee grants the Corporation all right, title, and interest in such Works free and
clear of any claim based on the preexisting work. To the extent that any Works cannot be so
assigned under any applicable law, Employee hereby grants an exclusive, perpetual, fully paid,
transferable, sublicenseable, irrevocable, worldwide right and license to use, display, perform,
copy, modify, distribute, sell, create derivative works of, and otherwise exploit the Works.
13. Non-Competition. “Corporate Product” means any product or service, (including any
component thereof and any research to develop information useful in connection with a product or
service) that is being designed, developed, manufactured, marketed or sold by the Corporation or
with respect to which the Corporation has acquired Confidential Information which it intends to use
in the design, development, manufacture, marketing or sale of a product or service.
“Competitive Product” means any product or service (including any components thereof and any
research to develop information useful in connection with the product or service) that is being
designed, developed, manufactured, marketed or sold by anyone other than the Corporation, and is of
the same general type, performs similar functions, or is used for the same purposes as a Corporate
Product which Employee worked on or assisted the Corporation in marketing or about which Employee
received or had bad knowledge of Confidential Information.
Employee agrees that, during employment and for one (1) year following termination of employment
with the Corporation, whether voluntary or involuntary, Employee will not, directly or indirectly,
attempt to or render services (as an employee, director, officer, agent, partner of or consultant
to, a stockholder of (except a stockholder of a public company in which Employee owns less than
five percent (5%) of the issued and
outstanding capital stock of such company) or otherwise) to any person or entity in connection with
the design, development manufacture, marketing or sale of a Competitive Product that is sold or
intended for use or sale in any geographic area in
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which the Corporation actively markets a
Corporate Product, or intends to actively market a Corporate Product of the same general type or
function.
Employee understands and acknowledges that, at the present time, (i) Corporate Products include the
products currently being sold by the Corporation, and (ii) the geographic market in which the
Corporation is actively marketing its Corporate Products is the United States of America. Employee
understands and acknowledges that the foregoing description of Corporate Products and geographic
market may change, and the provisions of this section shall apply to the Corporate Products and
geographic market of the Corporation in effect upon the termination of Employee’s employment with
the Corporation.
14. Miscellaneous.
14.1 Survival of Restrictions. The parties agree that the obligations and
restrictions contained in Paragraphs 9, 10, 11, 12 and 13 of this Agreement shall survive the
termination of this Agreement and Employee’s employment and shall apply no matter how Employee’s
employment terminates and regardless of whether his/her termination is voluntary or involuntary.
The parties also agree that the obligations and restrictions contained in Section 8.3 of this
Agreement shall survive the termination of this Agreement and Employee’s employment.
14.2 Remedies. The parties acknowledge and agree that, if Employee breaches or
threatens to breach the terms of Paragraphs 9, 10, 11, 12 and 13 of this Agreement, the Corporation
shall be entitled as a matter of right to injunctive relief and reasonable attorneys’ fees, costs,
and expenses, in addition to any other remedies available at law or equity. The parties further
agree that, if Employee breaches any of the restrictions contained in Paragraph 13 of this
Agreement, then the time period for such restriction shall be extended by the length of time that
Employee was in breach.
14.3 Understandings. Employee acknowledges and agrees that Paragraphs 9, 10, 11, 12
and 13 of this Agreement are reasonable and necessary in order to allow Corporation to protect its
valuable confidential and proprietary information which comprise trade secrets of Corporation.
Employee further acknowledges and agrees that Paragraphs 9, 10, 11, 12 and 13 of this Agreement
will not prevent him/her from earning a living. Employee agrees that the restrictions and
obligations in Agreement are reasonable and necessary to protect the Corporation’s business.
14.4 Integration. This agreement embodies the entire agreement and understanding
among the parties relative to subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter.
14.5 Applicable Law. This Agreement and the rights of the parties shall be governed
by and construed and enforced in accordance with the laws of the state of
Minnesota. The venue for any action hereunder shall be in the state of Minnesota, whether or not
such venue is or subsequently becomes inconvenient, and the parties
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consent to the jurisdiction of
the courts of the state of Minnesota, County of Hennepin, and the U.S. District Court, District of
Minnesota.
14.6 Counterparts. This Agreement may be executed in counterparts and as so executed
shall constitute one agreement binding on the parties hereto.
14.7 Successor and Assigns. This Agreement shall inure to the benefit of and be
binding upon the Corporation and its successors and assigns. The Corporation may assign this
Agreement without the consent of Employee. The services to be performed by Employee are personal
and are not assignable by Employee.
14.8 Captions. The captions set forth in this Agreement are for the convenience only
and shall not be considered as part of this Agreement or as in any way limiting or amplifying the
terms and conditions hereof.
14.9 No Conflicting Obligations. Employee represents and warrants to the Corporation
that he/she is not under, or bound to be under in the future, any obligation to any person or
entity that is or would be inconsistent or in conflict with this Agreement or would prevent, limit,
or impair in any way the performance by him/her of obligations hereunder, including but not limited
to any duties owed to any former employers not to compete or use or disclose confidential
information.
14.10 Waivers. The failure of a party to require the performance or satisfaction of
any term or obligation of this Agreement, or the waiver by a party of any breach of this Agreement,
shall not prevent subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
14.11 Severability. In the event that any provision hereof is held invalid or
unenforceable by a court of competent jurisdiction, the Corporation and Employee agree that that
part should be modified by the court to make it enforceable to the maximum extent possible. If the
part cannot be modified, then that part may be severed and the other parts of this Agreement shall
remain enforceable.
14.12 Notices. Any notices given hereunder shall be in writing and delivered or
mailed by registered or certified mail, return receipt requested:
(a) If to the Corporation: The Corporation’s principal place of business, addressed to the
attention of the Chief Executive Officer.
(b) If to Employee: The Employee’s last known address on record with the Corporation.
NOW, THEREFORE, with the intention of being bound hereby, the parties have executed this Agreement
as of the dates set forth below.
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| CARDIOVASCULAR SYSTEMS, INC. |
||||
| By: | /s/ Xxxxx X. Xxxxxxxx | Date: 4/7/08 | ||
| Xxxxx X. Xxxxxxxx | ||||
| Its Chief Administrative Officer | ||||
| EMPLOYEE: |
||||
| /s/ Xxxxxxxx X. Xxxxxxxxx | Date: 4/7/08 | |||
| Xxxxx Xxxxxxxxx | ||||
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EXHIBIT A
INVENTIONS AND DEVELOPMENTS PRIOR TO EMPLOYMENT
WITH THE CORPORATION
WITH THE CORPORATION
In the space provided below, please disclose and identify all of the Inventions in which you
currently possess any right, title, or interest and which you believe are not subject to the terms
and conditions of the attached Employment Agreement.
If none, please write NONE.
NONE.
I verify that the information I have written above is truthful and complete.
| Date: 4/7/08 | Signed: | /s/ Xxxxxxxx X. Xxxxxxxxx | ||
| Print Name: | Xxxxx Xxxxxxxxx | |||
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