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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of
October 15, 1997 (the "Effective Date") between Ocular Sciences, Inc., a
Delaware corporation with its principal offices located at 000 Xxxxxx Xxxxxx,
Xxxxx Xxx Xxxxxxxxx, XX 00000 (the "Company"), and Xxxxxxx Xxxxxxxxx, a resident
of California ("Employee").
In consideration of the promises, terms and conditions set forth in this
Agreement, the parties agree as follows:
1. POSITION. During the term of this Agreement, Company will employ
Employee, and Employee will serve Company, as the Company's President and Chief
Operating Officer. Employee will be elected to the Company's Board of Directors
promptly after the commencement of his employment.
2. DUTIES. Employee's duties will be as set forth in the Company's
Bylaws and, subject to such provisions, shall include primary responsibility
for manufacturing, sales, marketing, information systems, domestic operations,
regulatory affairs and human resources. Employee will report to the Company's
Chief Executive Officer and be subject to the direction of the Company's Chief
Executive Officer and Board of Directors. Employee will comply with and be
bound by the Company's operating policies, procedures, and practices from time
to time in effect during Employee's employment, including any xxxxxxx xxxxxxx
policies. Employee understands that he will be subject to the provisions of the
Securities Exchange Act of 1934, as amended, applicable to officers of
companies with securities registered under such act. Employee will perform his
duties under this Agreement at the offices of Company, provided, that Employee
may be required to travel in connection with the performance of his duties
hereunder. Employee hereby represents and warrants that he is free to enter
into and fully perform this Agreement and the agreements referred to herein
without breach of any agreement or contract to which he is a party or by which
he is bound.
3. EXCLUSIVE SERVICE. Employee will devote his full working time
exclusively to this employment and will use his best efforts to carry out his
duties and advance the Company's interests. Employee will not have any other
employment, consulting or similar relationship during the term of his
employment by the Company. Notwithstanding the foregoing, after employee has
been employed by the Company for 12 months he may accept and maintain a
position on the Board of Directors of another corporation, upon advance written
notice to the Company, so long as the Company's Board of Directors does not, in
its sole discretion, determine that such outside Board membership will or is
likely to have an adverse impact on Employee's ability to satisfactorily
discharge his responsibilities to the Company.
4. TERM OF AGREEMENT. This Agreement will commence on the Effective Date,
and will continue until the earlier of three (3) years after the Effective Date
or when terminated pursuant to Section 9 hereof.
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5. COMPENSATION AND BENEFITS.
5.1 BASE SALARY. The Company agrees to pay Employee an initial salary
(the "Base Salary") of Three Hundred Thousand Dollars ($300,000) per year. Such
salary will be reviewed each year by the Company's Board of Directors or
Compensation Committee. Employee's salary will be payable as earned in
accordance with the Company's customary payroll practice and will be subject to
such deductions or withholdings as are required by law.
5.2 EMPLOYEE BENEFIT PLANS; VACATION. Employee will be eligible to
participate in Company's employee benefit plans of general application,
including life, health, and dental insurance, in accordance with the rules
established for individual participation in any such plan and applicable law.
Employee will be entitled to twenty (20) days of vacation per year in
accordance with the Company's vacation policy.
5.3 EXPENSES. The Company will reimburse Employee for all reasonable
and necessary expenses incurred by Employee in connection with the Company's
business, provided that such expenses are in accordance with the Company's
applicable policy and are properly documented and accounted for in accordance
with Company policy.
5.4 CASH BONUS. Employee will be eligible to earn a cash bonus
("Cash Bonus") of up to fifty percent (50%) of his Base Salary for calendar
year 1998 and each full calendar year thereafter, based on performance criteria
(the "Criteria") to be agreed to between Company and Employee. Notwithstanding
the foregoing, the Cash Bonus for calendar year 1998 may be up to sixty percent
(60%) of Base Salary to offset that no bonus will be payable for any of 1997.
As soon as practical after December 31 of each applicable year, the Company's
Board of Directors or Compensation Committee will approve the payment to the
Employee of a Cash Bonus based on actual performance relative to the Criteria.
5.5 STOCK OPTIONS. Employee shall be granted one or more
non-qualified options under the Company's 1997 Equity Incentive Plan (the
"Options") to purchase Three Hundred Thousand (300,000) shares of the Company's
Common Stock at the fair market value of such stock as determined by the
Company's Board of Directors or Compensation Committee on the date that
Employee's employment commences. The Options shall vest over 5 years at the
rate of 20% per year, with such vesting commencing 6 months from the Effective
Date, have a term of 6 years and otherwise be pursuant to the terms of the
Company's current standard stock option documents.
6. RELOCATION ASSISTANCE
6.1 COSTS ASSOCIATED WITH SALE OF OLD RESIDENCE. The Company shall
reimburse Employee for any brokerage commissions and other costs incurred upon
the sale of his current residence in Corona Del Mar, California (the "Old
Residence"), up to a maximum of $60,000.
6.2 COSTS ASSOCIATED WITH MOVE. The Company will reimburse
Employee's costs associated with moving his household goods and motor vehicles
from his Old Residence to the San Francisco Bay Area, up to a maximum of $8,000.
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6.3 INTERIM EXPENSES. The Company will reimburse Employee's
temporary living expenses in the San Francisco Bay Area and weekly round-trip
travel to Orange County, until the earlier of Employee's relocation to the San
Francisco Bay Area or six months from the date hereof, up to a maximum of
$31,000.
6.4 COSTS ASSOCIATED WITH PURCHASE OF NEW RESIDENCE. The Company
will reimburse employee for the "one time" costs associated with the purchase
of a house in the San Francisco Bay Area (the "New Residence"), including
payment of up to two loan points, up to a maximum of $20,000.
6.5 TAX GROSS-UP. The Company will "gross-up" Employee for any
Federal and California income taxes payable by Employee on account of any
expenses that are not deductible by Employee and that are reimbursed by the
Company pursuant to Sections 6.1 through 6.4 above, up to a maximum of $40,000.
6.6 REPAYMENT BY EMPLOYEE IN EVENT OF VOLUNTARY TERMINATION OR
TERMINATION FOR CAUSE WITHIN 12 MONTHS. In the event that Employee voluntarily
terminates his employment with the Company within 12 months of the date hereof
(other than pursuant to disability or death), or Company terminates Employee
for Cause (as defined below) within such 12 month period, then Employee shall
repay to Company, within six months, any amounts paid to Employee pursuant to
this Section 6.
7. COMPANY LOAN(S) TO EMPLOYEE.
7.1 $450,000 LOAN UPON PURCHASE OF NEW RESIDENCE. Upon Employee's
purchase of the New Residence, the Company will provide Employee with an
interest free loan of Four Hundred Fifty Thousand Dollars ($450,000) (the
"$450,000 Loan"). The $450,000 Loan shall be secured by a deed of trust (the
$450,000 Deed of Trust") on the New Residence and by a security interest in the
Options and any shares issued upon exercise of the Options (the "Underlying
Securities"). The $450,000 Deed of Trust shall be subordinate to any deed of
trust Employee grants on the New Residence to a bank or other financial
institution for a loan to purchase the New Residence. Employee will be
prohibited from selling, transferring or otherwise disposing of any interest in
the New Residence, the Options or the Underlying Securities while any
obligations are outstanding under the $450,000 Loan. The $450,000 Loan shall be
due and payable in full on the earlier of: (i) 5 years from the Effective date;
(ii) 6 months after Employee's voluntary resignation or termination by the
Company for Cause, (iii) Employee's default under any loan secured by the New
Residence or (iv) the sale, transfer or other disposition of the New Residence.
Notwithstanding the foregoing, the $450,000 Loan shall be forgiven if Employee
remains continuously employed by the Company from the date hereof through
October 15, 2000. In the event that any portion of principal of the $450,000
Loan is paid by Employee and Employee subsequently becomes entitled to
forgiveness of the $450,000 Loan pursuant to the preceding sentence, then the
amount of principal paid by the Employee shall be returned to him. Employee
shall be responsible for all taxes arising from any loan forgiveness and the
Company will be entitled to withhold appropriate amounts for tax purposes.
7.2 POSSIBLE ADDITIONAL LOANS. If Employee is unable to sell the
Old residence prior to the purchase of the New Residence, then the Company will
either (i) arrange
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for a bank or other financial institution to provide Employee with a loan in
the amount of the purchase price of the New Residence less $450,000 or (ii)
loan such amount to Employee itself, each up to a maximum of $1,100,000. Any
obligation taken on by the Company in connection with such loan (e.g., a
guarantee) or any amount so loaned by the Company, shall be released or paid,
as the case may be, on the earlier of (i) six months after the date of the loan
or (ii) the date the $450,000 Loan is due. Any such loan will be on standard
terms for similar loans and will include a first deed of trust on the New
Residence. Employee will enter into any documentation reasonably requested by
the Company to support any guaranty provided by the Company pursuant to this
Section 7.2
7.3 OTHER LOAN TERMS. In connection with the loans set forth in
Section 7.1 and 7.2 above (the "Loans") Employee and Employee's spouse shall
execute any documents reasonably requested by the Company or the institution
granting the Loans, including loan and security agreements, promissory notes
and deeds of trust. Such documents shall have such other terms and provisions
as are typical for residential loans, including standard default provisions and
a provision regarding the payment of fees and expenses, including reasonable
attorneys' fees, incurred enforcing or collecting the Loans.
8. PROPRIETARY RIGHTS. Employee hereby agrees to execute an Employee
Invention Assignment and Confidentiality Agreement with the Company in
substantially the form attached hereto as Exhibit A.
9. TERMINATION.
9.1 EVENTS OF TERMINATION. Employees employment with the Company
shall terminate upon any one of the following:
(a) the Company's termination of Employee for "cause" as
defined under Section 9.2 below ("Termination for Cause"); or
(b) the effective date of a written notice sent to Employee
stating that the Company is terminating his employment, without cause, which
notice can be given by the Company at any time after the Effective Date at the
Company's sole discretion, for any reason or for no reason ("Termination
Without Cause"); or
(c) the effective date of Employee's voluntary termination
of his employment with the Company ("Voluntary Termination").
9.2 "CAUSE" DEFINED. For purposes of this Agreement, "cause" for
Employee's termination will exist at any time after the happening of one or
more of the following events:
(a) a material failure or refusal by Employee to diligently
perform his duties to the Company, including his obligations under this
Agreement; provided that if reasonably possible, the Company will provide
Employee with 30 days advance notice to remedy the situation, and provided
further that the Company will not be required to provide such notice more than
once during the term of this Agreement.
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(b) conduct by Employee that is materially detrimental to, or
materially discredits, the reputation, character or standing of the
Company, including the commission of a felony crime;
(c) conduct by Employee that is intended to do injury to the Company;
or
(d) disability that prevents Employee from performing his duties
more than 90 days in any 360 day period; or Employee's death.
10. EFFECT OF TERMINATION.
10.1 TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION. In the event of
any termination of this Agreement pursuant to Sections 9.1(a) or 9.1(c), the
Company shall pay Employee the compensation and benefits otherwise payable to
Employee under Section 5 through the date of termination. Employee's rights
under the Company's benefit plans of general application shall be determined
under the provisions of those plans.
10.2 TERMINATION WITHOUT CAUSE. In the event of any termination of
this Agreement pursuant to Section 9.1(b),
(a) the Company shall pay Employee the compensation and benefits
otherwise payable to Employee under Section 5 through the date of
termination,
(b) for one (1) year after the date of termination the Company shall
continue to pay Employee his Base Salary under Section 5.1 above at
Employee's then-current salary, less applicable deductions and withholding
taxes, payable on the Company's normal payroll dates during that period,
provided, however, that if Employee secures other employment during the
period that Section 5.1 remains in effect pursuant to this Section 10.2,
the Company will be entitled to set off, dollar for dollar, whatever is
earned in such employment against the amount owed to Employee hereunder,
(c) Employee's rights under the Company's benefit plans of general
application shall be determined under the provisions of those plans;
(d) if the $450,000 Loan has not been forgiven pursuant to the last
three sentences of Section 7.1, then the Company shall forgive 50% of the
outstanding principal under the $450,000 Loan.
As a condition to the Company's obligations under Section 10.2(b) and (d)
hereof, the Company may require Employee to enter into a mutual release in form
and substance satisfactory to the Company in its reasonable discretion.
11. NON-SOLICITATION. So long as Employee is an employee of the Company
and for one (1) year thereafter, Employee shall not, directly or indirectly,
either for himself or for any other person or entity, directly or indirectly,
solicit, induce or assist another to solicit or induce
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any employee, consultant, customer or supplier of the Company to terminate his,
her or its relationship with the Company.
12. MISCELLANEOUS.
12.1 ARBITRATION. Employee and the Company agree to submit to
mandatory binding arbitration any controversy or claim arising out of, or
relating to, this Agreement or any breach hereof, provided, however, that the
Company retains its right to, and shall not be prohibited, limited or in any
other way restricted from, seeking or obtaining equitable relief from a court
having jurisdiction over the parties. Such arbitration shall be conducted in
accordance with the commercial arbitration rules of the American Arbitration
Association in effect at that time, and judgment upon the determination or
award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
12.2 SEVERABILITY. If any provision of this Agreement shall
be found by any arbitrator or court of competent jurisdiction to be invalid or
unenforceable, then the parties hereby waive such provision to the extent that
it is found to be invalid or unenforceable and to the extent that to do so
would not deprive one of the parties of the substantial benefit of its bargain.
Such provision shall, to the extent allowable by law and the preceding
sentence, be modified by such arbitrator or court to effect the intent of the
parties to the extent possible, and as modified, shall be enforced as any other
provision hereof, all the other provisions continuing in full force and effect.
12.3 NO WAIVER. The failure by either party at any time to
require performance or compliance by the other of any of its obligations or
agreements shall in no way affect the right to require such performance or
compliance at any time thereafter. The waiver by either party of a breach of any
provision hereof shall not be taken or held to be a waiver of any preceding or
succeeding breach of such provision or as a waiver of the provision itself. No
waiver of any kind shall be effective or binding, unless it is in writing and is
signed by the party against whom such waiver is sought to be enforced.
12.4 ASSIGNMENT. This Agreement and all rights hereunder
are personal to Employee and may not be transferred or assigned by Employee
at any time. The Company may assign its rights, together with its obligation
hereunder, to any parent or successor, or in connection with any sale,
transfer or other disposition of all or substantially all of its business
and/or assets, provided, however, that any such assignee assumes the Company's
obligations hereunder.
12.5 WITHHOLDING. All sums payable to Employee hereunder
shall be reduced by all federal, state, local and other withholding and similar
taxes and payments required by applicable law.
12.6 ENTIRE AGREEMENT. This Agreement constitutes the
entire and only agreement between the parties relating to the subject matter
hereof, and this Agreement supersedes and cancels any and all previous
contracts, arrangements or understandings with respect thereto.
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12.7 AMENDMENT. This Agreement may be amended, modified,
superseded, canceled, renewed or extended only by an agreement in writing
executed by both parties hereto.
12.8 NOTICES. All notices and other communications required
or permitted under this Agreement shall be in writing and sent by (i) hand
delivery, (ii) certified mail, return receipt requested, postage pre-paid, or
(iii) nationally recognized express courier service. Such notices and other
communications shall be effective upon receipt if hand delivered or, two (2)
business days after mailing, if sent by mail, or after delivery to the courier
if sent by express courier, to the following addresses, or such other addresses
as any party shall notify the other parties:
If to the Company: Ocular Science, Inc.
000 Xxxxxx Xxxxxx
Xxxxx Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxx
If to Employee: Xxxxxxx Xxxxxxxxx
450 Santa Xxxx Ave
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Palo Xxxx, XX 00000
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12.9 HEADINGS. The headings contained in this Agreement are
for reference purposes only and shall in no way affect the meaning or
interpretation of this Agreement. In this Agreement, the singular includes the
plural, the plural includes the singular, the masculine gender includes both
the male and female, and the word "or" is used in the inclusive sense.
12.10 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but both of
which, taken together, constitute one and the same agreement.
12.11 GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereto shall be construed in accordance with the
laws of the State of California, without giving effect to the principles of
conflict of laws.
IN WITNESS WHEREOF, the Company and Employee have executed this
Employment Agreement as of the date first above written.
OCULAR SCIENCES, INC. EMPLOYEE
By: Xxxx X. Xxxxx /s/ XXXXXXX XXXXXXXXX
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Xxxxxxx Xxxxxxxxx
Its: C.E.O.
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