EXECUTIVE EMPLOYMENT AGREEMENT
|
AMENDMENT
NO. 1
|
Execution
Copy
|
This
Amendment No. 1 (this “Amendment”) to Executive Employment Agreement dated
November 27, 2007 (the “Agreement”) is made effective as of the 27th
day of November, 2010, by and between STAAR Surgical Company, a Delaware
corporation (collectively with its subsidiaries, “STAAR”), and Xxxxx Xxxxxx
(“Executive”), in
consideration of the mutual promises made herein and other good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged.
1. The
parties agree and acknowledge that STAAR has duly delivered a Non-Renewal Notice
pursuant to Section 5.11 of
the Agreement, and that the terms and conditions of any further employment of
Executive by STAAR after November 27, 2010, and the rights and obligations
of the parties under the Agreement, shall be exclusively as expressly set forth
in this Amendment.
2. The
following shall be conditions precedent to the effectiveness of this
Amendment: (a) STAAR shall have paid (subject to any applicable
withholding) all wages due and owing as of November 27, 2010
and payment for 46.5 days of accrued vacation in the amount of CHF
80,172.40, (b) STAAR shall have reimbursed all business expenses incurred
through November 27, 2010 that are reimbursable pursuant to the Agreement,
including car allowance, and (c) Executive shall have signed and delivered a
General Release in the form attached as Exhibit A on
November 27, 2010. It is also a condition for the effectiveness
of this Amendment that Executive not revoke that General Release during any
period in which Executive has a right of revocation.
3. Capitalized
terms used but not defined in this Amendment shall have the meanings ascribed to
them in the Agreement. In the event of any conflict between the
Agreement and this Amendment, the terms, conditions and definitions of this
Amendment shall control.
4. Employment. Sections
1.2, 1.3, 8.1 and 8.2 of the Agreement, and Articles 2, 3, 4 and 5 of the
Agreement are of no further force or effect and are superseded and replaced in
their entirety by this Section 4.
4.1 Term. Executive shall be
employed for the period that commences on November 28, 2010 at 12:00 a.m.
Pacific Standard Time and ends at 11:59 p.m. Pacific Daylight Time on May 27,
2011, or on any earlier Date of Termination as defined below in this Amendment
(the “New Term”).
Executive’s service as employee under this Amendment shall be deemed continued
service without any break from previous service under the Agreement for all
purposes under Executive’s existing equity award agreements.
4.2 Position. Executive
shall be employed in an advisory capacity and shall report to STAAR’s Vice
President and General Counsel. Although he is referred to herein as
“Executive” for purposes of consistency with the Agreement, Executive’s
employment during the New Term will not involve the duties of an executive or be
subject to the obligations of an executive.
4.3 Duties and
Conditions. During the New Term, Executive’s duties will
principally be as set forth on Schedule I hereto, and his conditions of work
will include those set forth on Schedule II
hereto.
4.4 Compensation. During
each month of the New Term STAAR shall pay Executive a monthly salary of CHF
40,425 (the “Monthly
Compensation Amount”), which consists of (A) Monthly Base Salary of CHF
37,500, plus (B) CHF 2,925, representing Monthly Base Salary times 7.8% (the
“Average Bonus
Rate”). STAAR shall deduct or withhold from the compensation
and benefits payable to Executive hereunder any and all sums required for any
national, provincial, state or local income and employment taxes that may, based
on Executive’s residency and tax status, be currently applicable, or that may be
enacted and become applicable during the term of Executive’s employment, and
that are due as Executive’s contributions or payments from the Executive, but
not such amounts as are due as employer contributions or payments. Executive
shall not receive, nor be eligible to earn, any other salary or bonus during the
New Term and, after the completion of the New Term, shall only be entitled to
remuneration and benefits provided under Sections 4.11 and 4.12.
4.5
Business
Expenses. If expressly authorized by STAAR in advance and in
writing, business-related travel and other expenses will be reimbursed in
accordance with STAAR’s policies. As a condition to reimbursement under this
Section 4.5, Executive shall
furnish to STAAR on a timely basis adequate records and other documentary
evidence required by applicable laws and regulations for the substantiation of
each expenditure. Executive acknowledges and agrees that failure to
furnish the required documentation may result in STAAR denying all or part of
the expense for which reimbursement is sought.
4.6 Vacation. During
the New Term, Executive shall take up to 12.5 days of vacation with no reduction
in pay. Executive agrees to take all vacation days prior to the
expiration of the New Term and failure to do so shall be a breach of the
Agreement as modified by this Amendment; provided that STAAR shall
make no Discharge for Cause for failure to take vacation except pursuant to
Section 4.8(c)(i) and a notice of breach allowing sufficient opportunity to take
all accrued vacation.
4.7 Benefits. During
the New Term, STAAR will provide Executive with the insurance and pension
benefits specified on Schedule
III. To the extent Executive is excluded from any such policy
or plan by the rules of the provider, STAAR may instead provide Executive with a
cash payment in the amount of STAAR’s current cost for such item shown on Schedule
III. Any such payments will be prorated, if necessary, to
correspond to the New Term. For avoidance of doubt, except as
provided on Schedule
III, Executive will not be eligible for any other benefits that may be
provided under the Agreement or any other policy or plan of STAAR, or its
employee handbook, or otherwise. The vesting and exercisability of
equity awards, including restricted stock awards and stock options plans are not
addressed by this provision, but are addressed in Section 4.13
below. After the New Term, STAAR’s obligations to provide Executive
with insurance and pension benefits shall be governed exclusively by Section
4.12 below.
4.8 Termination of Employment.
Executive’s employment by STAAR shall terminate automatically at 11:59
p.m., Pacific Daylight Time, on May 27, 2011. Executive’s employment
may be terminated earlier under the following circumstances (each an “Early
Termination”):
(a) Termination upon
Death. Executive’s employment shall terminate immediately upon
Executive’s death.
(b) Termination for Disability.
Subject to and in compliance with all state and federal workers’ compensation,
disability, family and medical leave, and any other potentially applicable laws,
STAAR may immediately terminate Executive’s employment by delivery of a Notice
of Termination if Executive is absent from work or, in the opinion of a
competent physician selected by the Board, is unable to discharge the essential
functions of Executive’s position, with or without reasonable accommodation, due
to legal, physical or mental incapacity for a period of more than 120 days in
any 180-day period.
(c) Discharge for
Cause. STAAR may terminate Executive’s employment hereunder
for Cause (a “Discharge for
Cause”). For purposes of the Agreement as modified by this
Amendment, “Cause” shall be limited to only six types of events:
-2-
|
(i)
|
failure
to perform reasonably requested duties within a reasonable period of time,
and failure to cure such nonperformance within a reasonable period (no
less than two weeks) after delivery of notice of nonperformance by STAAR’s
Vice President and General
Counsel;
|
|
(ii)
|
any
breach of the restrictions applicable to Executive in connection with his
employment by STAAR during the New Term and pursuant to the last bullet
point of Schedule II;
|
|
(iii)
|
any
act of dishonesty, fraud, insubordination, misrepresentation, gross
negligence or willful
misconduct;
|
|
(iv)
|
intentional
violation of any STAAR
policy;
|
|
(v)
|
any
material breach of the general release described in Section 2
of this Amendment;
|
|
(vi)
|
any
material breach of any provision of Articles 6 or
7 of the
Agreement.
|
Notwithstanding
the foregoing, no act or failure to act on Executive’s part shall be deemed
“willful” unless done, or omitted to be done, by Executive not in good faith and
without reasonable belief that the action or omission was in the best interest
of STAAR.
(d) Procedure for Discharge for
Cause. A Discharge for Cause may be made only subject to (A) a
request by STAAR’s Vice President and General Counsel delivered to the
independent members of STAAR’s Board of Directors, with a copy delivered to
Executive, setting forth with specificity the basis of the action, and (B)
delivery of a Notice of Termination confirming that the independent members of
the Board of Directors have unanimously voted to take such action. Such
termination will be without prejudice to any other remedy to which STAAR may be
entitled either at law, in equity, or under the Agreement as amended hereby or
hereafter, or under the terms of the Release attached hereto as Exhibit A.
(e) Voluntary
Resignation. Executive may terminate Executive’s employment
hereunder by a written Notice of Resignation, which will be effective upon
delivery to STAAR.
(f) No Other
Termination. The above list of bases for termination is
exhaustive. For avoidance of doubt, Sections 5.4, 5.5 and 5.10 of the
Agreement (“Discharge Without Cause,” “Voluntary Resignation for Good
Reason,” and “Severance Payments and Benefits following a Change in Control”)
shall be void and of no further force or effect.
4.9 Effect of
Termination. Upon any termination described in Section 4.8,
this Section 4.9 will apply. On the Date of Termination, the
employment relationship between STAAR and Executive shall cease, and, with the
exception of Articles
6 and 7 and Sections 8.3 to 8.14 of the Agreement, all duties of
Executive shall cease. If there has been an Early Termination, STAAR
shall promptly pay to Executive (or Executive’s heirs in the event of
Executive’s death), as salary, the prorated amount of the Monthly Compensation
Amount from the beginning of the month through the Date of
Termination. STAAR will reimburse any expenses incurred by Executive
prior to the Date of Termination if they are reimbursable under Section 4.5. Remuneration
and benefits following the Date of Termination shall be provided under, and
governed exclusively by, Sections 4.11
and 4.12. The
occurrence of an Early Termination shall have no impact on Executive’s or
Executive’s heirs’ entitlement to payments and benefits under Sections 4.11 and
4.12.
4.10 Date of
Termination. The “Date of Termination” means May 27, 2011 or,
in the event of an Early Termination means the date of death, or the date on
which a Notice of Termination or Notice of Resignation is deemed given pursuant
to Section 8.6 of the Agreement.
-3-
4.11 Severance Payments. Subject to
and in consideration of Section 5 of this
Amendment, following any termination STAAR will pay the following as
severance: (a) a single non-recurring payment of the prorated amount
of the Monthly Compensation Amount for the remainder of any partial month
following any Early Termination, and (b) at regular payroll intervals, the
Monthly Compensation Amount for each month from the Date of Termination through
November 27, 2011. Except as otherwise expressly provided in this
Amendment (including, but not limited to, potential payments related to
Continued Benefits pursuant to Section 4.12 below), Executive will not be
entitled to any other compensation or benefits of any kind beyond the Date of
Termination, except as otherwise required by law or by the express terms of any
outstanding equity award agreements and the related equity plans.
4.12 Continued Benefits. Subject to
and in consideration of Section 5 of this
Amendment, following any Date of Termination STAAR will through November 27,
2011 provide Executive with the insurance and pension benefits specified on
Schedule III,
provided that, at its discretion, STAAR may instead provide Executive with a
cash payment on a monthly basis in the amount of STAAR’s current cost for such
item shown on Schedule
III. If this Agreement is terminated for death or disability,
and the right to payment under death or disability insurance does not require
further premium payments, STAAR will have no obligation to continue to pay such
premiums or the cash equivalent, provided that such action does not reduce or
otherwise adversely impact any benefits entitlement.
4.13 Equity Awards. All
rights under outstanding equity awards shall be governed exclusively by the
terms and conditions of the relevant award agreements and related
plans. If the restricted stock granted to Executive on March 5,
2010 vests in accordance with its terms on March 5, 2011, the parties will
cooperate to arrange for related tax withholding, if any, and for prompt
delivery of the shares in salable form to the broker designated by Executive on
March 6, 2011 or as soon as practicable thereafter.
4.14 Code Section 409A. This
Agreement is intended to comply with the requirements of Internal Revenue Code
Section 409A and this Agreement shall be interpreted in accordance with such
intention. Each payment made pursuant to any provision of this
Agreement (as amended) shall be considered a separate payment and not one of a
series of payments for purposes of Code Section 409A. Notwithstanding
any provision in this Agreement to the contrary, if upon Executive’s “separation
from service” within the meaning of Code Section 409A, Executive is then a
“specified employee” (as defined in Code Section 409A), then to the extent
necessary to comply with, and avoid the imposition of taxes under, Code Section
000X, XXXXX shall defer payment of nonqualified deferred compensation subject to
Code Section 409A payable as a result of and within six (6) months following
such separation from service until the earlier of: (i) the first business day of
the seventh month following Executive’s separation from service; or (ii) ten
(10) days after STAAR receives notification of Executive’s death. Any
such delayed payments shall not accrue interest. Employee's obligation (if any) to pay
U.S. federal or applicable state income tax on amounts payable under the
Agreement shall be determined under applicable law, and nothing in this
Amendment shall be interpreted as an explicit or implicit acknowledgement by
either STAAR or the Employee that any such tax liability
exists
5. Additional Release of Claims.
Notwithstanding anything else in the Agreement or this
Amendment, it shall be a condition precedent to any obligation of
STAAR to provide severance pursuant to Section 4.11 or
continued benefits pursuant to Section 4.12
that Executive (a) within seven days after the Date of Termination, but not
before such date, executes and delivers to STAAR a general release substantially
in the form attached to this Agreement as Exhibit B, and (b)
does not revoke such release during any period in which Executive has a right of
revocation. Executive agrees that if he does not so execute and
deliver the additional release, or if he revokes it, he will permanently waive
any right to such severance payments or such continued
benefits. STAAR will provide the general release agreement for
Executive’s execution, which shall be substantially in the form attached to this
Agreement as Exhibit
B, by May 13, 2011.
-4-
6. Entire Agreement and
Modification. The Agreement, as modified by this Amendment
(the “Amended
Agreement”), together with any indemnification agreements or equity award
agreements entered into prior to or contemporaneously with this Amendment,
constitutes the entire agreement between the parties relating to the employment
of Executive by STAAR and post-employment rights and duties of the parties, and
there are no representations, warranties or commitments, other than those set
forth herein which relate to such subject matter. The Amended
Agreement may be amended or modified only by an instrument in writing executed
by all of the parties hereto, and shall not be affected by any description or
disclosure of the Agreement or the Amended Agreement in any securities filing.
The Amended Agreement supersedes any term sheet of the parties, and any
discrepancy between the terms of the Amended Agreement and any other
communication of the parties, whether written or oral, is entirely
intentional.
The
next page is the signature page.
-5-
IN
WITNESS WHEREOF, the parties have each executed this Amendment No. 1 to the
Executive Employment Agreement on the date set forth below.
EXECUTIVE
EMPLOYEE
/s/ Xxxxx
Xxxxxx Date:
November 10,
2010
Xxxxx
Xxxxxx
Address
for Notices under Section 8.6 of the Agreement:
_____________________________________
_____________________________________
_____________________________________
STAAR
SURGICAL COMPANY
/s/ Xxxxx X.
Xxxxxxxx Date:
November 10,
2010
Xxxxx X.
Xxxxxxxx
President
and Chief Executive Officer
Schedule
I
Duties
Executive
shall loyally, conscientiously, and professionally perform all duties and
responsibilities reasonably assigned by STAAR and the Executive’s superiors, and
shall comply with all of STAAR’s personnel policies and procedures, including
without limitation those contained in STAAR’s Employee Handbook.
Services
to be performed will include services commensurate with Executive’s level of
experience and prior roles with the Company, including participating in
developing the Company’s recent Strategic Plan. Services may be provided either
in oral or written form as requested by the Company under the supervision of
General Counsel. The services which may be requested by the Company
include:
|
·
|
Review
and comment on potential companies with whom the Company may partner
through an alliance or acquisition to fill current gaps in the Strategic
Plan.
|
|
·
|
Review
and comment on new technologies that may assist the Company’s ability to
fulfill the Strategic Plan.
|
|
·
|
Review
and comment on new technologies that may create obstacles for the Company
to fulfill the Strategic Plan.
|
|
·
|
Review
and comment on the Company’s decisions on whether to continue business in
certain regions in a direct distribution model or consider distribution
alternatives.
|
|
·
|
Review
and comment on the Company’s organizational efforts to transition the
Japanese business model to a very focused sales, marketing and research
and development organization.
|
|
·
|
Review
and comment on issues related to the Company’s existing alliance with
Nidek.
|
|
·
|
Provide
input to the new President of Asia Pacific on past practices and
transactions of the region as
requested.
|
|
·
|
Provide
guidance on other transition matters as they may arise concerning the
international business of the
Company.
|
Schedule
II
Conditions
|
·
|
The
intended work location of Executive is STAAR’s facility in Nidau,
Switzerland.
|
|
·
|
The
Company will maintain an office in Nidau for Executive and provide phone
and computer services at the expense of
Company.
|
|
·
|
STAAR
will supply Executive with a portable personal computer and such other
equipment and supplies deemed necessary by STAAR for Executive to perform
his duties hereunder during the New Term, subject to an obligation to
return all property of STAAR promptly after the Termination
Date. STAAR will not provide Executive with an automobile or
automobile allowance during the New
Term.
|
|
·
|
Executive’s
duties will not require access to confidential financial information of
STAAR and, to the extent practicable, STAAR will avoid exposing Executive
to the type of information that would subject him to STAAR’s quarterly
trading blackouts.
|
|
·
|
The
Company has the right to require travel to perform requested
services. Travel must be first approved by the Company and the
Company will reimburse expenses per
agreement.
|
|
·
|
The
Company has the right to require the sequence in which requested services
are provided in the event that more than one requested service is being
requested at the same time.
|
|
·
|
Executive
cannot perform similar services related to the ophthalmic industry for
other companies during the term of employment on a full time
basis. Part-time work that does not interfere with or conflict
with Executive’s duties, and that is performed for a company that does not
compete with STAAR, may be accepted with STAAR’s prior written
consent.
|
-8-
Schedule
III
Benefits
|
Item
|
Provider
|
Description
|
Monthly
Cost (CHF) |
|
|
1
|
Medical
Health Insurance
|
CSS
Versicherungen
|
Covers
medical, dental and vision costs.
|
1,241.70
|
|
2
|
Pension
and Life Insurance -
Mandatory
pension contribution to the STAAR Surgical AG plan
|
Allianz
Suisse
|
Provides
benefits after retirement and in case of disability or death (benefits for
widow and orphan).
|
3,655.55
|
|
3
|
Pension
and Life Insurance -
Additional
voluntary contribution to the STAAR Surgical AG plan
|
Allianz
Suisse
|
Provides
enhanced, executive-level benefits after retirement and in case of
disability or death (benefits for widow and orphan)
|
3,212.10
|
|
4
|
Accident
insurance
|
SUVA
|
Covers
costs in case of accidents.
|
145.70
|
|
5
|
Daily
allowance insurance
|
SWICA
Healthcare Organization
|
Provides
percentage of salary in case of long-term sickness (over two
months).
|
348.20
|
|
6
|
AHV/IV/EO/ALV*
|
State
of Switzerland
|
Provides
minimum benefits in case of retirement, disability, military service and
unemployment.
|
3,008.70
|
|
*
|
Invalidenversicherung
,Erwerbsersatzordung ,Arbeitslosenversicherung (old age
and surviving dependents’ insurance, disability insurance, military income
loss insurance, unemployment
insurance).
|
-9-
