Exhibit 10.10
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), dated as of May 1, 2006, by
and among HeartWare, Inc., a Delaware corporation (the "Company"), having its
principal offices at 0000 Xxxxxxxxx Xxx, Xxxxxxx, Xxxxxxx 00000-0000, and Xxxxx
XxXxxxxx, an individual with an address at 000 Xxxxxx Xxxx, Xxxxxxx, Xxx Xxxxx
Xxxxx, Xxxxxxxxx 0000 (the "Executive"), and HeartWare Limited, an Australian
corporation and the owner of all of the issued and outstanding voting stock of
the Company (the "Parent").
RECITALS
A. The Executive has served as the Chief Financial Officer and Company
Secretary of the Parent pursuant to a service agreement, dated on or about
February 2005, between them ("Parent Agreement"); and
B. At the request of the Parent and the Company, the Executive has agreed
to relocate to Florida, and the Company wishes to hire the Executive to serve as
its Chief Financial Officer; and
C. The Executive agrees to be so employed upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, the parties, intending to be legally bound and in
consideration of the agreements and covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, agree as follows:
1. Employment, Duties and Acceptance.
(a) The Company employs the Executive to render exclusive and
full-time services as the Chief Financial Officer of the Company and, in
connection therewith, to perform such duties as are customarily assigned to
individuals serving in such positions and such other duties as the
Executive shall reasonably be directed to perform by the President of the
Company. The Executive shall report directly to the President of the
Company. Notwithstanding the foregoing, the Executive shall continue to
serve as the Chief Financial Officer and Company Secretary of the Parent.
(b) The Executive accepts such employment and shall render the
services referred to above. The Executive shall devote his full working
time and energies (excluding his services on behalf of the Parent as well
as periods of vacation and sick leave to which he is entitled) to the
business and affairs of the Company and agrees to use his best efforts,
skills and abilities to promote the Company's interests. Notwithstanding
the foregoing, the Executive may devote such reasonable time as may be
necessary, to the extent that it does not interfere with the performance of
his duties and responsibilities hereunder, to (i) participate in
charitable, civic, educational, professional or community affairs or serve
on the board of directors or advisory committees of non-profit entities;
and (ii) manage his private investments. The Executive shall not serve on
the board of
directors or advisory committees of for profit entities or engage in any
consulting activity without the prior written consent of the Board of
Directors of the Company (the "Board").
(c) The Executive and the Parent acknowledge that the Parent
Agreement, including all accrued benefits (e.g., annual leave), shall be
"frozen" for the duration of the Executive's employment with the Company
and shall, except in the case of termination for Cause (as defined below)
or the Executive's voluntary termination with the Parent and the Company,
recommence on termination of the Executive's employment with the Company.
In the event that the Executive's employment with the Company is terminated
for whatever reason and the Executive does not recommence his employment
with the Parent for whatever reason, then the Parent will immediately pay
to the Executive all accrued entitlements and related benefits under the
Parent Agreement. For the avoidance of the doubt, nothing in this Agreement
shall effect the Executive's rights and entitlements to share options that
have been provided to the Executive under the Company's Employee Share
Option Plan (as at the date of this Agreement).
2. Compensation and Benefits. Subject to the Executive's reasonable
adherence to all of his responsibilities under this Agreement and all other
written agreements with the Company, the Executive shall be entitled to receive
the following compensation and benefits during his employment with the Company:
(a) As compensation for all services to be rendered to the Company by
the Executive, the Company shall pay the Executive a salary at a rate of
$225,000 per annum together with a relocation allowance of $108,000 per
annum. The salary component shall be reviewed by the Company at least
annually and for the purposes of this Agreement, the higher of the above
salary amount and the reviewed salary amount (if any), together with the
above relocation allowance, shall be referred to as the "Base Salary". The
Base Salary shall not be subject to reduction without the written consent
of the Executive, except that if the Board reduces the salary of all senior
managers of the Company, the Base Salary shall be reduced by the same
percentage as the percentage reduction in salary of such senior managers.
(b) The Executive shall be eligible to receive an annual bonus with
respect to each fiscal year of the Company while this Agreement is in
effect, subject to the attainment of objective performance goals and other
criteria, as determined by the Board in its sole discretion, and approved
by the Nomination and Remuneration Committee of the Parent.
(c) All such compensation shall be payable in accordance with the
payroll and bonus policies of the Company as from time to time in effect,
less such deductions as shall be required to be withheld by applicable law
and regulations.
(d) The Executive shall be permitted during his employment, if and to
the extent eligible, to participate in all group insurance programs and
other fringe benefit plans that the Company shall make available to its
executive employees.
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(e) The Executive shall be entitled to four (4) weeks of vacation
annually. Vacation time shall accrue pro-rata and otherwise in accordance
with the Company's vacation policies as in effect from time to time.
(f) Subject to such policies as may from time to time be established
by the Company, the Company shall pay or reimburse the Executive for all
reasonable and necessary expenses actually incurred or paid by the
Executive in the course of performing his duties hereunder upon
presentation of expense statements or vouchers or such other supporting
information as the Company may reasonably require.
3. Relocation Expenses.
(a) At the request of the Company and with the consent of the Parent,
the Executive and his family are relocating to Miramar, Florida or a
reasonably proximate city or town. The Company shall provide the
"Relocation Benefits" (as defined below) for the Executive and his family
to relocate from Sydney to Miramar, Florida.
(b) For the purposes of this Agreement, "Relocation Benefits" means
relocation benefits in accordance with the Heartware International
Relocation Policy which is annexed as Exhibit B to this Agreement.
(c) The Company shall provide the Executive with the Relocation
Benefits for the Executive and his family to relocate from the United
States of America to Sydney Australia, unless the Executive accepts a new
position with another employer that covers his relocation expenses, in
which case the Company shall pay to the Executive the excess of the
Relocation Benefits over the expenses actually paid by such new employer:
(i) if the Company terminates the employment of the Executive at
any time for any reason other than for "Cause" (as defined
below); or
(ii) if the Executive terminates his employment for any reason
after the expiration of a period of two (2) years from the
date of this agreement; or
(iii) if the Executive terminates his employment for any reason
after a "Change of Control" (as defined below) occurs; or
(iv) if the Executive terminates his employment for "Good Reason"
(as defined below).
(d) The Relocation Benefits referred to in (c) above shall not be less
than the amounts agreed to be paid by the Company in relation to the
relocation referred to at (a) above.
(e) The Relocation Benefits payable pursuant to the above shall be
paid prior to the relocation of the Executive and his family.
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(f) In addition to the above, the Company shall, at its expense,
provide the Executive and his family with a return trip to Sydney,
Australia on completion of each year of service with the Company under this
Agreement.
4. Employment at Will.
(a) This Agreement describes the compensation and benefits that the
Executive is entitled to receive for so long as he remains employed by the
Company, but is not a guarantee of employment for any particular period of
time. At all times the Executive will remain an employee at will, and he
and the Company are free to terminate his employment at any time for any
reason. Except as otherwise set forth in this Section 4 and in Section 3
above, should the Executive's employment with the Company terminate for any
reason, he shall be entitled to receive only the pro rata portion of his
Base Salary through the date of such termination, together with such other
compensation or benefits to which the Executive may be entitled by law or
under the terms of the Company's compensation and benefit plans then in
effect.
(b) In addition to the above, the Company shall pay the Executive a
severance payment equal to six (6) months' salary calculated using the Base
Salary ("Severance Payment") if:
(i) the Company terminates the employment of the Executive for
any reason other than for Cause; or
(ii) the Executive terminates his employment for Good Reason (as
defined below).
(c) The Company shall pay the Executive a further severance payment
equal to 50% of the Severance Payment if:
(i) the termination of the employment of the Executive by the
Company occurs following a Change of Control; and
(ii) the Company did not give the Executive three (3) months
notice of termination of the employment of the Executive.
(d) The amounts payable pursuant to (b) and (c) above shall be paid to
the Executive:
(i) within two (2) weeks of the effective date of such
termination less withholdings as required by law; and
(ii) subject to the Executive executing and delivering to the
Company a general release and waiver (in a form reasonably
satisfactory to the
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Company) of all claims against the Company, the Parent, any
subsidiaries and their respective shareholders, officers and
directors.
(e) Notwithstanding anything to the contrary in this Section 4, in no
event shall any amounts under Section 4(b) or (c) be payable to the
Executive if he is terminated for Cause.
(f) As used in this Agreement, the following terms shall mean:
1. "Cause" shall mean any of (A) a material breach by the Executive of
his obligations under this Agreement or any other written agreement
between the Executive and the Company, including the Proprietary
Information Agreement (as defined in Section 5 below); (B) the willful
neglect by the Executive of the duties he is expected to perform
hereunder; (C) the commission by the Executive of an act of fraud,
embezzlement, material misrepresentation or theft, or other act of
moral turpitude; (D) conviction of, or the Executive's written
admission to, a felony, or (E) any willful misconduct or any willful
act or omission that is materially injurious to the financial
condition or business reputation of the Company; provided, however,
that in the event of a potential termination for any Cause specified
in clauses (A), (B) or (E) above, such termination shall not be
effective unless the Executive shall have received notice from the
Company setting forth in reasonable detail the basis of the proposed
termination and the Executive shall have been provided a period of ten
(10) business days from receipt of such notice to cure or correct the
conduct (if it is reasonably susceptible of cure or correction) giving
rise to such potential termination.
2. "Change in Control Transaction" means the occurrence in a single
transaction or in a series of related transactions of any one or more
of the following events:
- any person (within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended) becomes the owner,
directly or indirectly, of securities of the Company or the
Parent representing more than fifty percent (50%) of the combined
voting power of the Company's or the Parent's (as the case may
be) then outstanding securities other than by virtue of a merger,
consolidation or similar transaction;
- there is consummated a merger, consolidation or similar
transaction involving (directly or indirectly) the Company and /
or the Parent and, immediately after the consummation of such
merger, consolidation or similar transaction, the stockholders of
the Company or the Parent (as the case may be) immediately prior
thereto do not own, directly or indirectly, outstanding voting
securities representing more than fifty percent (50%) of the
combined outstanding voting power of the surviving entity in such
merger, consolidation or similar transaction or more than fifty
percent (50%) of the combined outstanding voting power of the
parent of the surviving entity in such merger, consolidation or
similar transaction, provided, however, that any merger,
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consolidation or similar transaction undertaken by the Company or
the Parent in connection with or in contemplation of a Public
Offering shall not be deemed a Change in Control Transaction
hereunder; or
- there is consummated a sale, lease, exclusive license or other
disposition of all or substantially all of the consolidated
assets of the Company and / or the Parent and its subsidiaries,
other than a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and /
or the Parent and its subsidiaries to an entity, more than fifty
percent (50%) of the combined voting power of the voting
securities of which are owned by stockholders of the Company in
substantially the same proportions as their ownership of the
Company immediately prior to such sale, lease, license or other
disposition.
3. "Good Reason" shall mean a termination by the Executive, upon
thirty (30) days' prior written notice to the Company (the
"Termination Notice") stating in reasonable detail the basis for his
termination as a result of (1) the Executive's duties and/or
responsibilities being so materially diminished that they are no
longer consistent with the duties and/or responsibilities of the Chief
Financial Officer and Company Secretary of the Parent and the Company,
unless the Executive consents to such diminution in duties and/or
responsibilities in writing, or (2) a material reduction of the
Executive's Base Salary; provided, however, that if, during such
thirty (30) day notice period, the Company restores the Executive's
title or duties and responsibilities to the level required by this
Section 4(f).3, then the Executive's Termination Notice shall not be
effective; and provided, further that it shall be a condition to the
effectiveness of a termination for Good Reason that the Company
receive a Termination Notice from the Executive with the time frame
set forth above.
5. Proprietary Information Agreement. Concurrently with the execution and
delivery of this Agreement, the Executive shall execute and deliver to the
Company a copy of its standard form of Proprietary Information, Confidentiality
and Inventions Assignment Agreement, in the form attached hereto as Exhibit A
(the "Proprietary Information Agreement").
6. Non-Disparagement. The Executive agrees not to take any action or make
any statement, written or oral, that disparages the Company or the Parent or any
of their respective shareholders, directors, officers, employees or agents, or
that has the intended or foreseeable effect of harming the reputation of the
Company or the Parent or the personal or business reputation of any of the
directors, officers, employees or agents of the Company or the Parent.
7. Representations and Warranties of the Executive. The Executive
represents and warrants to the Company that he has the legal right to enter into
this Agreement and the Proprietary Information Agreement and to perform all of
the obligations on his part to be performed hereunder and thereunder in
accordance with their respective terms, and that he is not a party to any
agreement or understanding, written or oral, that could prevent him from
entering
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into this Agreement or the Proprietary Information Agreement or performing all
of his obligations hereunder and thereunder.
8. General Provisions.
(a) Severability. The invalidity or unenforceability of any provision
of this Agreement shall in no way affect the validity or enforceability of
any other provisions or any part hereof.
(b) Interpretation. The singular includes the plural, and the plural
includes the singular. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
"herein", "hereof", "hereunder" and words of like import shall refer to
this Agreement as a whole and not to any particular section or subdivision
of this Agreement.
(c) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Florida without regard
to conflict of laws rules.
(d) Dispute Resolution. Any claim or controversy arising out of or
relating to this Agreement shall be settled by arbitration administered by
JAMS/ENDISPUTE under its Streamlined Arbitration Rules & Procedures (the
"Rules"). An arbitration may be initiated by either party by sending a
written demand for arbitration to the other party, specifying in reasonable
detail the matter in dispute and requesting the appointment of an
arbitrator, who shall be selected by the parties or, if they are unable to
agree on such selection within 10 days after commencement of the
arbitration, shall be made in accordance with the Rules. The situs of the
arbitration will be Miami, Florida. Any judgment reached by the arbitrator
shall be final and binding on the Company and the Executive, and may be
entered in any court of competent jurisdiction.
(e) Enforcement. The Executive recognizes and agrees that enforcement
of this Agreement and the Proprietary Information Agreement is necessary to
ensure the preservation, protection and continuity of the business,
confidential and proprietary information and goodwill of the Company, and
accordingly agrees that the covenants, agreements and restrictions set
forth herein are reasonable as to time and scope. The Executive also
acknowledges and agrees that any actual or threatened breach by the
Executive of this Agreement would result in irreparable damage to the
Company and that money damages would not provide an adequate remedy to the
Company. Accordingly, the Executive agrees that in the event of any such
breach, the Company shall have, in addition to any and all remedies of law,
the right to have the provisions of this Agreement and the Proprietary
Information Agreement specifically enforced and to obtain injunctive and
other equitable relief to enforce the provisions of this Agreement. Each of
the undertakings of the Executive set forth in this Agreement shall be
construed as independent covenants and the existence of any claim or cause
of action by the Executive against the Company, whether predicated on this
Agreement or otherwise, shall not
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constitute a defense to the enforcement by the Company of the restrictions
imposed on the Executive by, and the undertakings of the Executive set
forth in, this Agreement.
(f) Entire Agreement; No Representations. Except as provided above,
this Agreement constitutes the entire agreement between the Executive and
the Company or the Parent concerning the terms and conditions of the
Executive's employment with the Company, and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, between the Executive and the Company or the
Parent Agreement.
(g) Consultation with Counsel; No Representations. The Executive
acknowledges and agrees that he has had a full and complete opportunity to
consult with counsel of his own choosing concerning the terms,
enforceability and implications of this Agreement, and that the Company has
not made any warranties, representations or promises to the Executive
regarding the meaning or implication of any provision of this Agreement,
other than as stated herein or therein.
(h) Modification; Waiver. This Agreement may be amended or modified
only by a written instrument signed by the Executive and the Company. The
failure of either party at any time to require the performance of any
provision of this Agreement shall in no manner affect the right of such
party at a later time to enforce the same provision.
(i) Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
heirs, legal representatives, successors and assigns and to the benefit of
the Company's directors, officers, employees and agents, provided that the
Executive may not assign this Agreement or any of his rights hereunder to
any other person.
(j) Notices. All notices and other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given
when delivered in person (including by any commercial courier service) or
five (5) days after mailing by United States certified or registered mail,
return receipt requested, postage prepaid, to a party at his or its address
set forth at the beginning of this Agreement or such other address as
either party may furnish to the other by notice in writing, except that
notices of change of address shall be effective only upon receipt.
(k) Counterparts. This Agreement may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an
original and all of which together shall constitute one and the same
agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
EXECUTIVE:
/s/ Xxxxx XxXxxxxx
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Xxxxx XxXxxxxx
COMPANY:
HEARTWARE, INC.
By: /s/ Xxxxxx XxXxxxxxx
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President and CEO
PARENT:
HEARTWARE LIMITED
By: /s/ Xxxxxx XxXxxxxxx
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Name: Xxxxxx XxXxxxxxx
Title:
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