Exhibit 10.16
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of
March 1, 1997 by and between Exogen, Inc., a Delaware corporation (the
"Company"), and Xxxxxxx X. XxXxxxxx ("Executive").
WHEREAS, the Company and the Executive entered into that certain
Employment Agreement dated as of January 15, 1994; and
WHEREAS, the Company and the Executive desire that the Executive
be employed by the Company for a second three-year term and that the terms and
conditions of such employment be defined;
NOW, THEREFORE, in consideration of the employment of the
Executive by the Company, the Company and Executive agree as follows:
1. Term of the Agreement. The Company shall employ Executive and
Executive shall accept employment with the Company for a three (3) year period
commencing on March 1, 1997 (the "Commencement Date") and continuing until the
third anniversary of the Commencement Date, subject, however, to prior
termination as hereinafter provided in Section 5.
2. Executive's Duties and Obligations.
a. Duties. Executive shall serve as President and Chief
Executive Officer of the Company. Executive shall be responsible for all
segments of the Company's business and all other officers of the Company shall
report to Executive. Executive shall at all times report to, and shall be
subject to the policies established by, the Company's Board of Directors.
b. Performance. Executive agrees that to the best of his
ability and experience he will at all times loyally and conscientiously perform
all of his duties and obligations under this Agreement.
c. Proprietary Information and Inventions Agreement. Executive
has executed the form of Proprietary Information and Inventions Agreement
attached to this Agreement as Exhibit A.
3. Devotion of Time to Company's Business; Noncompetition
Agreement.
a. Full-Time Efforts. During his employment with the Company,
Executive shall devote substantially all of his business time, attention and
efforts to the business of the Company.
b. No Other Employment. During his employment with the
Company, Executive shall not, whether directly or indirectly, render any
services of a commercial or professional nature to any other person or
organization, whether for compensation or otherwise, without the prior written
consent of the Company's Board of Directors.
c. Non-Competition During Employment. During his employment
with the Company, Executive shall not, directly or indirectly, either as an
employee, employer, consultant, agent, principal, partner, stockholder,
corporate officer, director, or in any other individual or representative
capacity, engage or participate in any business that is competitive with the
business or proposed business (as defined below) of the Company.
d. Non-Solicitation of Employees. Executive agrees that during
his employment with the Company and for one (1) year thereafter, he will not
encourage or solicit any employee of the Company to leave the Company for any
reason; provided, however, that this obligation shall not affect any
responsibility he may have as an employee of the Company with respect to the
bona fide hiring and firing of Company personnel; and provided, further, that
this obligation shall not prohibit Executive from soliciting his administrative
assistant if Executive leaves the employ of the Company.
e. Non-Competition After Employment. Executive agrees that for
one (1) year following the termination of his employment with the Company, he
will not (i) engage in any employment, business or activity that is competitive
with the business or proposed business (as defined below) of the Company, and
will not assist any other person or organization in competing with the Company
or in preparing to engage in competition with such business or proposed business
of the Company, or (ii) solicit, divert or take away, or attempt to divert or to
take away, the business or patronage of any of the clients, customers or
accounts which were contacted, solicited or served by Executive while employed
by the Company (provided, however, that Executive may solicit clients, customers
or accounts of the Company on behalf of a business totally unrelated to the
business or proposed business of the Company). Notwithstanding the foregoing, in
the event Executive is terminated by the Company without "Good Cause" (as
hereafter defined in paragraph 5.c), prior to March 1, 2000, the noncompete
provision set forth in this paragraph 3.e. shall be null and void.
f. Definitions; Exceptions. For the purpose of this paragraph
3, "proposed business" of the Company shall mean a business proposal which has
been the subject of material discussions by the Board of Directors of the
Company or a product or service under design or development by the Company.
Notwithstanding the provisions of this paragraph 3, nothing herein shall
prohibit Executive from (i) holding less than three percent (3%) of the
outstanding capital stock of a publicly-held corporation engaged in a business
that competes with the business or proposed business of the Company; (ii)
serving on one or more Boards of Directors of non-profit corporations (so long
as, in the aggregate, such commitments do not interfere with the performance of
Executive's duties for the Company); or (iii) being employed by a multi-division
company so long as Executive's responsibilities do not extend to the specific
division which competes with the Company.
g. Interpretation. If any restriction set forth in paragraphs
3.d. and 3.e. is found by any court of competent jurisdiction to be
unenforceable because it extends for too long a period of time or over too great
a range of activities or in too broad a geographic area, it shall be interpreted
to extend only over the maximum period of time, range of activities or
geographic area as to which it may be enforceable.
h. Equitable Remedies. The restrictions contained in
paragraphs 3.d. and 3.e. are necessary for the protection of the business and
goodwill of the Company and are considered by Executive to be reasonable for
such purpose. Executive agrees that any breach of paragraph 3.d. or 3.e. of this
Agreement is likely to cause the Company substantial and irrevocable damage and
therefore, in the event of any such breach, Executive agrees that the Company,
in addition to any other remedies which may be available, shall be entitled to
specific performance and other injunctive relief.
4. Compensation and Benefits.
a. Base Compensation. During the term of this Agreement, the
Company shall pay to Executive base monthly compensation of Sixteen Thousand Six
Hundred Sixty Seven ($16,667.00), less all required withholdings. Base
compensation shall be subject to review by the Compensation Committee of the
Board of Directors during the second and third years of the term of this
Agreement; provided that base compensation shall never be reduced below the base
compensation applicable to the first year.
b. Bonuses. In addition to base compensation, Executive shall
be entitled to participate in an executive performance bonus program to be
developed by Executive and approved by the Board of Directors of the Company.
c. Benefits. During his employment with the Company, Executive
will be entitled to (i) all such family health and medical benefits (including
dental) and all life insurance and disability insurance as are provided to other
officers of the Company, and (ii) a monthly car allowance of $600, a car phone,
and a computer and fax machine for use at Executive's home. The Company reserves
the right to modify, amend or terminate any benefits listed under clause (i)
above at any time for any reason (provided such modification, amendment or
termination is applicable to all executives receiving such benefits) but shall
in any case, provide reasonable health, life and disability benefits to
Executive while Executive is a full-time employee of the Company.
d. Administrative Assistant. Executive shall be entitled to
select and hire an administrative assistant.
5. Termination of Employment.
a. Termination After Term. After the third anniversary of the
Commencement Date, Executive's employment with the Company shall be "at will"
and may be terminated by either Executive or the Company at any time for any
reason, with or without cause by giving at least two (2) weeks' written notice
to the other party. No severance or other benefits, aside from unpaid
compensation accrued through the last day of Executive's employment, shall be
due upon such termination.
b. Death or Disability. This Agreement shall terminate if
Executive dies or is mentally or physically "Disabled" as herein defined. For
the purposes of this Agreement, "Disabled," shall mean a mental or physical
condition that renders Executive incapable of performing his duties and
obligations under this Agreement for three (3) or more consecutive months or for
a total of six (6) months during any twelve (12) consecutive months; provided,
that during such period the Company shall give Executive at least thirty (30)
days' written notice that it considers the time period for disability to be
running. If this Agreement is terminated under this paragraph 5.b, Executive or
his estate shall be entitled to any unpaid compensation accrued through the last
day of Executive's employment but shall not be entitled to any severance
benefit.
c. Termination for Good Cause. The Company may terminate
Executive's employment at any time for "Good Cause," as herein defined. For the
purposes of this Agreement, "Good Cause" includes, but is not limited to, gross
misconduct, gross neglect of duties, acts involving moral turpitude, material
breach by Executive of this Agreement or the Proprietary Information and
Inventions Agreement not cured within ten (10) business days after notice from
the Company (unless such breach is not capable of being cured within that time
period, in which case Executive shall have proposed a plan to cure such default
which plan is reasonably acceptable to the Board of Directors of the Company and
which Executive is diligently pursuing, and provided that no cure period shall
apply to a breach of the nondisclosure provisions of the Proprietary Information
and Inventions Agreement), or any act or omission involving fraud, embezzlement,
or misappropriation of any property or proprietary information of the Company by
Executive.
d. Termination without Good Cause. If Executive's employment
is terminated by the Company without Good Cause prior to the third anniversary
of the Commencement Date, the following provisions shall apply:
i) Executive shall be entitled to any unpaid compensation
accrued through the last day of Executive's employment;
ii) Executive shall be entitled to receive severance
payments, until the first to expire of (A) the twelve (12) month period
following such termination, and (B) the third anniversary of the Commencement
Date. Such severance shall be paid monthly in an amount equal to the monthly
base compensation in effect at the time of termination.
e. Termination by Executive. Executive may terminate this
Agreement by giving sixty (60) days' written notice to the Company. If Executive
terminates this Agreement under this paragraph 5.e., Executive shall only be
entitled to any unpaid compensation accrued through the last day of Executive's
employment, but in no event shall Executive be entitled to any severance
benefit.
6. Prior Agreements. Executive has delivered to the Company
true and complete copies of all agreements regarding employment,
non-competition, confidentiality or other matters related to employment to which
Executive is a party and which are still in effect (collectively, the "Prior
Agreements"). The Company will indemnify and hold harmless Executive from and
against any liability for reasonable legal fees and expenses and for reasonable
costs (but not for any judgment, settlement or other damages) that Executive may
incur in connection with the defense of any claim or suit made by or brought
against Executive for breach of any provision of the Prior Agreements.
7. Miscellaneous.
a. Governing Law. This Agreement shall be interpreted,
construed, governed and enforced according to the laws of the State of New
Jersey.
b. Arbitration. Any controversy between the parties hereto
involving the construction or application of any terms, covenants or conditions
of this Agreement or any other agreement executed in connection herewith, or any
claim arising out of or relating to this Agreement, except with respect to
prejudgment remedies, will be submitted to and be settled by final and binding
arbitration in New York, New York or such other place as the parties may agree,
in accordance with the rules of the American Arbitration Association then in
effect, and judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof.
c. Amendments. No amendment or modification of the terms or
conditions of this Agreement shall be valid unless in writing and signed by the
parties hereto.
d. Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
construed, if possible, so as to be enforceable under applicable law, else, such
provision shall be excluded from this Agreement and the balance of the Agreement
shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
e. Successors and Assigns. The rights and obligations of the
Company under this Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of the Company. Executive shall not be entitled
to assign any of his rights or obligations under this Agreement.
f. Notices. All notices required or permitted under this
Agreement shall be in writing and shall be deemed effective upon personal
delivery or two days after deposit in the United States Post Office, by
registered or certified mail, postage prepaid, addressed to the other party at
the address shown below such party's signature, or at such other address or
addresses as either party shall designate to the other in accordance with this
paragraph 7.f.
g. Entire Agreement. This Agreement, including the exhibits
attached hereto, constitutes the entire agreement between the parties with
respect to the employment of Executive.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date set forth above.
EXOGEN, INC.
By: /s/Xxxx X. Xxxxx
----------------
Xxxx X. Xxxxx,
Chairman of the Board
Address: 00 Xxxxxxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
EXECUTIVE:
/s/Xxxxxxx X. XxXxxxxx
----------------------
Xxxxxxx X. XxXxxxxx
Address: 0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
