EXHIBIT 10.01
CONCEPTUS, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is effective as of August 11,
2004 (the "Effective Date"), by and between Xxxx X. Xxxxxxxxxx ("Executive") and
Conceptus, Inc., a Delaware corporation (the "Company"). Certain capitalized
terms used in the Agreement are defined in Section 7 below.
RECITALS
WHEREAS, the Board of Directors of the Company believes that it is
in the best interests of the Company and its stockholders to provide Executive
with an incentive to continue his employment with the Company and to motivate
Executive to maximize the value of the Company in the event of a Change of
Control for the benefit of its stockholders;
WHEREAS, the Company and Executive have entered into that certain
letter agreement defining the terms of Executive's employment with the Company
dated as of April 15, 2003 (the "Prior Agreement"); and
WHEREAS, the Company and Executive intend that the Prior Agreement
be superseded in all respects by this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein, the parties hereby agree as follows:
1. TERM OF AGREEMENT. This Agreement shall commence on the Effective
Date and shall have a term of three (3) years (such period, including any
extensions pursuant to this Section 1, the "Term"). This Agreement shall be
automatically renewable for one-year periods after the expiration of the initial
three-year period, unless otherwise terminated pursuant to Section 5. This
Agreement may be terminated by either party, with or without cause, at the end
of the then-current Term with six (6) months' advance written notice to the
other party.
2. DUTIES.
(a) POSITION. Executive shall be employed as President and Chief
Executive Officer of the Company. In such capacity he shall have overall
responsibility for the management of the Company and report to and be subject to
the direction and control of the Company's Board of Directors. So long as
Executive remains the Chief Executive Officer of the Company, and subject to the
fiduciary duties of the Board of Directors as directors of the Company,
Executive will be nominated to, and if elected by the stockholders of the
Company, be a member of, the Company's Board of Directors.
(b) OBLIGATIONS TO THE COMPANY. Executive agrees to the best of
his ability and experience that he will at all times loyally and conscientiously
perform all of the duties and obligations required of and from Executive
pursuant to the express and implicit terms hereof, and to the reasonable
satisfaction of the Company. During the term of Executive's employment
relationship with the Company, Executive further agrees that he will devote all
of his business time and attention to the business of the Company, Executive
will not render commercial or professional services of any nature to any person
or organization, whether or not for compensation, without the prior written
consent of the Company's Board of Directors, and Executive will not directly or
indirectly engage or participate in any business that is competitive in any
manner with the business of the Company. Nothing in this Agreement will prevent
Executive from accepting speaking or presentation engagements in exchange for
honoraria or from serving on boards of charitable organizations, or from owning
no more than 1% of the outstanding equity securities of a corporation whose
stock is listed on a national stock exchange. Executive will comply with and be
bound by the Company's operating policies, procedures and practices from time to
time in effect during the term of Executive's employment.
3. AT-WILL EMPLOYMENT. The Company and Executive acknowledge that
Executive's employment is and shall continue to be at-will, as defined under
applicable law, and that Executive's employment with the Company may be
terminated by either party at any time for any or no reason. If Executive's
employment terminates for any reason, Executive shall not be entitled to any
payments, benefits, damages, award or compensation other than as provided in
this Agreement. The rights and duties created by this Section 3 may not be
modified in any way except by a written agreement executed by the Board of
Directors of the Company and Executive.
4. COMPENSATION. For the duties and services to be performed by
Executive hereunder, the Company shall pay Executive, and Executive agrees to
accept, the salary, stock options, bonuses and other benefits described below in
this Section 4.
(a) SALARY. Executive shall receive an annual salary of $408,000
(the "Base Salary"). Executive's Base Salary will be payable biweekly pursuant
to the Company's normal payroll practices. The Base Salary shall be reviewed
annually by the Company's Board of Directors or its Compensation Committee, and
adjusted as necessary following such review, and any increase will be effective
as of the date determined appropriate by the Board of Directors or its
Compensation Committee and will thereafter be deemed a part of Base Salary for
purposes of Sections 6(a) and 6(b) of this Agreement.
(b) BONUSES.
(i) ANNUAL "TARGET" BONUS. In addition to the Base Salary,
for each fiscal year ending during the Term, Executive shall have the
opportunity to earn an annual performance bonus (the "Annual Target Bonus") in
an amount up to 100% of Executive's Base Salary, 75% of which will be cash and
25% of which will be an equity component, which may include stock options and
restricted stock. The exact amount and composition of the Annual Bonus will be
determined by the Board of Directors in consultation with Executive, based upon
mutually agreed performance objectives, both personal and corporate.
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(ii) SIGNING BONUS. In addition to the Base Salary and Annual
Bonus, Executive shall receive a one-time cash bonus of $50,000, upon his
signing of the Agreement.
(iii) ADDITIONAL ANNUAL INCENTIVE BONUS. In addition to the
Annual "Target" Bonus, Executive will be eligible for an additional incentive
bonus of up to an additional 50% of Executive's Base Salary in the event of
Company performance a certain amount above such performance objectives, which
will be determined by the Board of Directors in consultation with the Executive,
based upon mutually agreed performance objectives and may be cash, stock options
or restricted stock, or some combination.
(c) OPTION ACCELERATION UPON A CHANGE OF CONTROL. Subject to any
additional acceleration of exercisability described in Section 6(a) below, upon
a Change of Control (as defined in Section 7 below), the vesting and
exercisability of Executive's outstanding options and/or restricted stock shall
be automatically accelerated as to 100% of the then-unvested shares subject
thereto at the time of the Change of Control. The exercisability of such options
and/or restricted stock shall be extended to a total of twelve (12) months from
the date of such Change of Control. The foregoing provision is hereby deemed to
be a part of each such option and/or grant of restricted stock and to supersede
any contrary provision in any agreement relating thereto.
(d) ADDITIONAL BENEFITS. Executive shall be eligible to
participate in the Company's employee benefit plans of general application,
including without limitation, those plans covering medical, disability and life
insurance in accordance with the rules established for individual participation
in any such plan and under applicable law. Executive shall be eligible for
vacation and sick leave in accordance with the policies in effect during the
Term of this Agreement and will receive such other benefits as the Company
generally provides to its other employees of comparable position and experience.
In addition, the Company shall provide the following benefits to Executive at
the Company's expense:
(i) an annual physical examination, with Executive's
agreement that the doctor performing such examination shall provide a copy of
the examination report to the Compensation Committee of the Board of Directors;
(ii) the reimbursement of attorneys' fees and expenses
incurred by Executive in connection with the negotiation and execution of this
Agreement, up to a maximum of $5,000.
(e) REIMBURSEMENT OF EXPENSES. Executive shall be authorized to
incur on behalf and for the benefit of, and shall be reimbursed by, the Company
for reasonable expenses, provided that such expenses are substantiated in
accordance with Company policies.
5. TERMINATION OF AGREEMENT. This Agreement may be terminated during
its Term upon the occurrence of any of the following events:
(i) The Company's termination of Executive for Cause (as
defined in Section 7 below) ("Termination for Cause");
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(ii) The Company's termination of Executive without Cause (as
defined in Section 7 below), which determination may be made by the Company at
any time at the Company's sole discretion, for any or no reason ("Termination
Without Cause");
(iii) The effective date of a written notice sent to the
Company from Executive stating that Executive is electing to terminate his
employment with the Company ("Voluntary Termination"); or
(iv) Executive's death or Disability (as defined in Section 7
below).
6. SEVERANCE BENEFITS. Executive shall be entitled to receive severance
benefits upon termination of employment only as set forth in this Section 6:
(a) TERMINATION FOLLOWING A CHANGE OF CONTROL.
(i) INVOLUNTARY TERMINATION. If Executive's employment with
the Company is terminated at any time within twenty-four (24) months after a
Change of Control as a result of an Involuntary Termination, then Executive
shall be entitled to receive the following severance and other benefits:
(A) SEVERANCE PAY. During the Continuation Period,
Executive shall be entitled to receive as severance an amount equal to the sum
of (i) Executive's Current Compensation that would otherwise have been payable
during the Continuation Period if Executive's service had not been terminated,
plus (ii) either: (x) if Executive's employment with the Company is terminated,
at any time within twenty-four (24) months after a Change of Control as a result
of an Involuntary Termination, prior to April 16, 2006, an amount equal to the
cash portion of Executive's Annual Target Bonus for the fiscal year in which the
termination occurs (with it deemed that all performance goals have been met at
100% of budget or plan) multiplied by three, or (y) if Executive's employment
with the Company is terminated, at any time within twenty-four (24) months after
a Change of Control as a result of an Involuntary Termination, on or following
April 16, 2006, an amount equal to fifty percent (50%) of Executive's Base
Salary for the fiscal year in which the termination occurs multiplied by three.
Such severance payments will be made periodically in the same amounts and at the
same intervals as the Base Salary were paid immediately prior to termination of
employment. In addition, during the Continuation Period, the Company shall
continue to make available to Executive and Executive's spouse and dependents
any group health plans, life insurance plans and other benefit plans and
programs of the Company on the date of such termination of employment, to the
extent permitted by law and subject to the terms and conditions of the relevant
plan or program. For purposes of this Section 6(a)(i)(A), benefits will not
include future participation in any discretionary bonus or equity incentive
pool, other than amounts as contemplated in this subsection A.
(B) MEDICAL BENEFITS. Executive may elect coverage
for, and the Company shall reimburse Executive for, the amount of his premium
payments, for group health coverage, if any, elected by the Executive pursuant
to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"); provided, however, that (1) such reimbursement shall not exceed
$650.00 per month, and (2) Executive shall be solely responsible
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for all matters relating to his continuation of coverage pursuant to COBRA,
including (without limitation) his election of such coverage and his timely
payment of premiums; provided, further, that (3) upon the earlier to occur of
(x) the time that Executive no longer constitutes a Qualified Beneficiary (as
such term is defined in Section 4980(B)(g)(1) of the Code) and (y) the date
thirty-six (36) months following Executive's termination, the Company's
obligations to reimburse Executive under this subsection (B) shall cease;
provided, further, that if the Company's obligations under this subsection (B)
cease pursuant to clause (3), the Company shall make a lump sum payment to
Executive equal to the product of the last monthly reimbursement paid to
Executive pursuant to this subsection (B) multiplied by eighteen (18).
(C) OUTPLACEMENT SERVICES. During the Continuation
Period, Executive shall be entitled to outplacement services at the Company's
expense, the actual cost of which is not to exceed $15,000. Such services shall
be provided by a firm selected by Executive from a list compiled by the Company.
(ii) VOLUNTARY TERMINATION; TERMINATION FOR CAUSE. If
Executive's employment with the Company is terminated at any time within
twenty-four (24) months after a Change of Control as a result of a Voluntary
Termination or Termination for Cause, then Executive shall not be entitled to
receive payment of any severance benefits. Executive will receive payment(s) for
all salary and unpaid vacation accrued as of the date of Executive's termination
of employment and Executive's benefits will be continued under the Company's
then existing benefit plans and policies in accordance with such plans and
policies in effect on the date of termination and in accordance with applicable
law.
(b) TERMINATION APART FROM A CHANGE OF CONTROL.
(i) INVOLUNTARY TERMINATION. If Executive's employment with
the Company terminates at any time prior to the occurrence of a Change of
Control or after the 24-month period following the effective date of a Change of
Control as a result of an Involuntary Termination, Executive will be entitled to
receive the following severance and other benefits:
(A) SEVERANCE PAY. The Company shall pay to Executive
in an amount equal to (i) Executive's Current Compensation (on a monthly basis)
multiplied by eighteen (18), plus (ii) an amount equal to the cash portion of
Executive's Annual Target Bonus for the fiscal year in which the termination
occurs (with it deemed that all performance goals have been met at 100% of
budget or Plan) multiplied by one hundred fifty percent (150%). Such severance
payments may be in one lump sum or be made periodically in the same amounts and
at the same intervals as the Base Salary were paid immediately prior to
termination of employment, at the sole discretion of the Board of Directors. In
addition, for a period of eighteen (18) months following Executive's termination
pursuant to this Section 6(b)(i)(A), the Company shall continue to make
available to Executive and Executive's spouse and dependents any group health
plans, life insurance plans and other benefit plans and programs of the Company
on the date of such termination of employment, to the extent permitted by law
and subject to the terms and conditions of the relevant plan or program. For
purposes of this Section 6(b)(i)(A), benefits will not include future
participation in any discretionary bonus or equity incentive pool, other than
continuation of amounts as contemplated in this subsection A.
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(B) MEDICAL BENEFITS. Executive may elect coverage
for, and the Company shall reimburse Executive for, the amount of his premium
payments, for group health coverage, if any, elected by Executive pursuant to
COBRA; provided, however, that (1) such reimbursement shall not exceed $650.00
per month, and (2) Executive shall be solely responsible for all matters
relating to his continuation of coverage pursuant to COBRA, including (without
limitation) his election of such coverage and his timely payment of premiums;
provided, further, that (3) upon the earlier to occur of (x) the time that
Executive no longer constitutes a Qualified Beneficiary (as such term is defined
in Section 4980(B)(g)(1) of the Code) and (y) the date eighteen (18) months
following Executive's termination, the Company's obligations to reimburse
Executive under this subsection (B) shall cease.
(C) OUTPLACEMENT SERVICES. For a period of eighteen
(18) months following Executive's termination pursuant to this Section
6(b)(i)(A), Executive shall be entitled to outplacement services at the
Company's expense, the actual cost of which is not to exceed $15,000. Such
services shall be provided by a firm selected by Executive from a list compiled
by the Company.
(D) OPTION/RESTRICTED STOCK ACCELERATION. The vesting
and exercisability of each option and/or grant of restricted stock shall be
automatically accelerated as to the amount of the unvested shares subject
thereto at the time of the Involuntary Termination which would have vested had
the Executive remained employed by the Company for eighteen (18) months
following the date of such Involuntary Termination. The foregoing provision is
hereby deemed to be a part of each such option and/or restricted stock agreement
and to supersede any contrary provision in any agreement relating thereto.
(ii) VOLUNTARY TERMINATION; TERMINATION FOR CAUSE. If
Executive's employment with the Company is terminated at any time prior to a
Change of Control or after the 24-month period following the effective date of a
Change of Control as a result of a Voluntary Termination (other than an
Involuntary Termination, in which case Section 6(b)(i) will apply) or a
Termination for Cause, then Executive shall not be entitled to receive payment
of any severance or other benefits described in this Section 6. Executive will
receive payment(s) for all salary and unpaid vacation accrued as of the date of
Executive's termination of employment and Executive's benefits will be continued
under the Company's then existing benefit plans and policies in accordance with
such plans and policies in effect on the date of termination and in accordance
with applicable law.
7. DEFINITION OF TERMS. The following terms referred to in this
Agreement shall have the following meanings:
(a) "Cause" shall mean:
(i) gross negligence or willful misconduct in the
performance of Executive's duties to the Company where such gross negligence or
willful misconduct has resulted or is likely to result in substantial and
material damage to the Company or its subsidiaries,
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(ii) Executive's repeated unexplained or unjustified absence
from the Company,
(iii) Executive's material and willful violation of any
federal or state law,
(iv) Executive's commission of any act of fraud with respect
to the Company, or
(v) conviction of a felony or a crime involving moral
turpitude causing material harm to the standing and reputation of the Company,
in each case as determined in good faith by the Board of Directors of the
Company.
(b) "Change of Control" shall mean the occurrence of any of the
following events:
(i) any "Person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the
"Beneficial Owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing forty percent (40%) or
more of the total voting power represented by the Company's then outstanding
voting securities; or
(ii) a merger or consolidation of the Company whether or not
approved by the Board of Directors of the Company, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets; or
(iii) a change in the composition of the Board of Directors of
the Company, as a result of which fewer than a majority of the directors are
Incumbent Directors. "Incumbent Directors" shall mean directors who either (A)
are directors of the Company as of the date of Executive's hire or (B) are
elected, or nominated for election, to the Board of Directors of the Company
with the affirmative votes of at least a majority of those Incumbent Directors
at the time of such election or nomination (but shall not include an individual
whose election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Company).
(c) "Continuation Period" shall mean, in the event of an
Involuntary Termination within twenty-four (24) months after a Change of
Control, the period of time commencing with termination of Executive's
employment in an Involuntary Termination during the Term of this Agreement and
ending with the expiration of thirty-six (36) months following the date of
Executive's termination.
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(d) "Current Compensation" shall mean an amount equal to
Executive's Base Salary for the fiscal year of Executive's termination.
(e) "Disability" shall mean that Executive has been unable to
perform his duties under this Agreement as a result of his incapacity due to
physical or mental illness, and such inability, at least twenty-six (26) weeks
after its commencement, is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to Executive or
Executive's legal representative (such Agreement as to acceptability not to be
unreasonably withheld). Termination resulting from Disability may only be
effected after at least thirty (30) days' prior written notice by the Company of
its intention to terminate Executive's employment. In the event that Executive
resumes the performance of substantially all of his duties hereunder before the
termination of his employment become effective, the notice of intent to
terminate shall automatically be deemed to have been revoked.
(f) "Involuntary Termination" shall mean:
(i) any termination by the Company (other than for Cause),
or
(ii) Executive's voluntary termination, upon thirty (30)
days' prior written notice to the Company, following (A) any reduction of
Executive's Base Salary (other than in connection with similar decreases of
other similarly situated employees of the Company); (B) any material diminution
in Executive's title, perquisite, benefits or terms and conditions of
employment; provided however, that if following a Change of Control, the Company
becomes a division of or, a business unit of another corporation or other
business entity and the Executive remains the Chief Executive Officer of the
division or business unit comprised of the Company, such a change of the
Executive's title or terms and conditions of employment which would reflect
these circumstances shall not be deemed to be a material diminution which would
give rise, in and of itself, to Executive's Involuntary Termination; or (C)
Executive's refusal to relocate to a location more than fifty (50) miles from
the Company's current location.
8. GOLDEN PARACHUTE EXCISE TAX. Notwithstanding anything contained in
this Agreement to the contrary, in the event that the benefits provided for in
this Agreement to Executive together with all other payments and the value of
any benefit received or to be received by Executive:
(a) constitute "parachute payments" within the meaning of Section
280G of the Code, and
(b) but for this Section, would be subject to the excise tax
imposed by Section 4999 of the Code, then Executive's benefits pursuant to the
terms of this Agreement shall be payable either:
(i) in full, or
(ii) as to such lesser amount which would result in no
portion of such benefits being subject to excise tax under Section 4999 of the
Code, whichever of the foregoing amounts, taking into account the applicable
federal, state and local income taxes and the excise tax imposed by Section
4999, results in the receipt by Executive on an after-tax basis, of the
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greatest amount of benefits under this Agreement, notwithstanding that all or
some portion of such benefits may be subject to the excise tax imposed under
Section 4999 of the Code. Unless the Company and Executive otherwise agree in
writing, any determination required under this Section 8 shall be made in
writing by the Company's independent public accountants serving immediately
before the Hostile Takeover or Change of Control (the "Accountants"), whose
determination shall be conclusive and binding upon Executive and the Company for
all purposes. For purposes of making the calculations required by this Section
8, the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code. The Company
shall cause the Accountants to provide detailed supporting calculations of its
determinations to Executive and the Company. Executive and the Company shall
furnish to the Accountants such information and documents as the Accountants may
reasonably request in order to make a determination under this Section. The
Company shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section 8.
9. CONFIDENTIALITY AGREEMENT. Executive has signed an Employment,
Proprietary Information and Invention Assignment Agreement in the form attached
hereto as Exhibit A that covers protection of the Company's proprietary
information and assignment of inventions (the "Confidentiality Agreement").
Executive hereby represents and warrants to the Company that he has complied
with all obligations under the Confidentiality Agreement and agrees to continue
to abide by the terms of the Confidentiality Agreement and further agrees that
the provisions of the Confidentiality Agreement shall survive any termination of
this Agreement or of Executive's employment relationship with the Company.
10. NONCOMPETITION COVENANT. Executive hereby agrees that he shall not,
during the Term of this Agreement and the Continuation Period, if applicable,
without the prior written consent of the Company's Board of Directors, carry on
any business or activity (whether directly or indirectly, as a partner,
shareholder, principal, agent, director, affiliate, employee or consultant)
which is competitive with the business conducted by the Company (as conducted
now or during the Term of this Agreement), nor engage in any other activities
that conflict with Executive's obligations to the Company.
11. NONSOLICITATION COVENANT. Executive hereby agrees that he shall not,
during the Term of this Agreement and for twelve (12) months after the end of
the Continuation Period, if applicable, do any of the following without the
prior written consent of the Company's Board of Directors:
(a) SOLICIT BUSINESS. Solicit or influence or attempt to influence
any client, customer or other person either directly or indirectly, to direct
his or its purchase of the Company's products and/or services to any person,
firm, corporation, institution or other entity in competition with the business
of the Company; and
(b) SOLICIT PERSONNEL. Solicit or influence or attempt to
influence any person employed by the Company to terminate or otherwise cease his
employment with the Company or become an employee of any competitor of the
Company.
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12. CONFLICTS. Executive represents that his performance of all the
terms of this Agreement will not breach any other agreement to which Executive
is a party. Executive has not, and will not during the Term of this Agreement,
enter into any oral or written agreement in conflict with any of the provisions
of this Agreement. Executive further represents that he is entering into or has
entered into an employment relationship with the Company of his own free will.
13. SUCCESSORS. Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise)
to all or substantially all of the Company's business and/or assets shall assume
the obligations under this Agreement and agree expressly to perform the
obligations under this Agreement in the same manner and to the same extent as
the Company would be required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term "Company" shall
include any successor to the Company's business and assets that executes and
delivers the assumption agreement described in this Section 13 or which becomes
bound by the terms of this Agreement by operation of law. The terms of this
Agreement and all of Executive's rights hereunder shall inure to the benefit of,
and be enforceable by, Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
14. INDEMNIFICATION AGREEMENT. The Company and the Executive have
entered into an Indemnification Agreement substantially in the form attached
hereto as Exhibit B.
15. MISCELLANEOUS PROVISIONS.
(a) NO DUTY TO MITIGATE. Executive shall not be required to
mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new employment or in any other manner), nor, except as otherwise
provided in this Agreement, shall any such payment be reduced by any earnings
that Executive may receive from any other source.
(b) AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended or waived only with the written consent of the parties. No waiver by
either party of any breach of, or of compliance with, any condition or provision
of this Agreement by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another time.
(c) SOLE AGREEMENT. This Agreement, including any Exhibits hereto,
constitutes the sole agreement of the parties and supersedes all oral
negotiations and prior writings with respect to the subject matter hereof,
including the Prior Agreement.
(d) NOTICES. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient upon receipt, when delivered
personally, by facsimile or by a nationally recognized delivery service (such as
Federal Express or UPS), or forty-eight (48) hours after being deposited in the
U.S. mail as certified or registered mail with postage prepaid, if such notice
is addressed to the party to be notified at such party's address as set forth
below or as subsequently modified by written notice. Any termination by the
Company for Cause or by Executive as a result of an Involuntary Termination
shall be communication by a notice of termination to the other party hereto
given in accordance with this Section. Such notice shall
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indicate the specific termination provision in this Agreement relied upon, shall
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination under the provision so indicated, and shall specify the
termination date (which shall be not more than 15 days after the giving of such
notice). The failure by Executive to include in the notice any fact or
circumstance which contributes to a showing of Involuntary Termination shall not
waive any right of Executive hereunder or preclude Executive from asserting such
fact or circumstance in enforcing his rights hereunder.
(e) CHOICE OF LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California, without giving effect to the principles of conflict of laws.
Executive hereby consents to the personal jurisdiction of the state and federal
courts located in California for any action or proceeding arising from or
relating to this Agreement or relating to any arbitration in which the parties
are participants.
(f) SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.
(g) COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
(h) ARBITRATION. Any dispute or claim arising out of or in
connection with this Agreement shall be finally settled by binding arbitration
in San Jose, California in accordance with the rules of the American Arbitration
Association by one arbitrator appointed in accordance with said rules. The
arbitrator shall apply California law, without reference to rules of conflicts
of law or rules of statutory arbitration, to the resolution of any dispute.
Judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. Notwithstanding the foregoing, the parties may
apply to any court of competent jurisdiction for preliminary or interim
equitable relief, or to compel arbitration in accordance with this paragraph,
without breach of this arbitration provision. This Section 15(h) shall not apply
to the Confidentiality Agreement.
(i) NO ASSIGNMENT OF BENEFITS. The rights of any person to
payments or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this subsection (i) shall be
void.
(j) EMPLOYMENT TAXES. All payments made pursuant to this Agreement
will be subject to withholding of applicable income and employment taxes.
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(k) ASSIGNMENT BY COMPANY. The Company may assign its rights under
this Agreement to an affiliate, and an affiliate may assign its rights under
this Agreement to another affiliate of the Company or to the Company; provided,
however, that no assignment shall be made if the net worth of the assignee is
less than the net worth of the Company at the time of assignment. In the case of
any such assignment, the term "Company" when used in a Section of this Agreement
shall mean the corporation that actually employs Executive.
(l) ADVICE OF COUNSEL. EXECUTIVE ACKNOWLEDGES THAT, IN EXECUTING
THIS AGREEMENT, HE HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT
LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF
THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY
REASON OF THE DRAFTING OR PREPARATION HEREOF.
[Signature Page Follows]
12
The parties have executed this Agreement September 30, 2004.
CONCEPTUS, INC.
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------------
Title: Chairman of the Board of Directors
Address: 0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
XXXX X. XXXXXXXXXX
Signature: /s/ Xxxx. X. Xxxxxxxxxx
---------------------------------
Address: 0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
13
EXHIBIT A
EMPLOYEE CONFIDENTIALITY AGREEMENT
PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT
The following confirms an agreement between me and Conceptus, Inc., a
California corporation, its subsidiaries, affiliates or successors (hereinafter
referred to collectively as the "Company"), which is a material part of the
consideration for my employment by the Company:
A. I understand that the Company possesses and will possess "PROPRIETARY
INFORMATION" which is important to its business. For purposes of this Agreement,
"PROPRIETARY INFORMATION" is information that was or will be developed, created,
or discovered by or on behalf of the Company, or which became or will become
known by, or was or is conveyed to the Company, which has commercial value in
the Company's business. "PROPRIETARY INFORMATION" includes, but is not limited
to, trade secrets, copyrights, ideas, techniques, know-how, inventions (whether
patentable or not), and/or any other information of any type relating to
designs, configurations, toolings, documentation, recorded data, schematics,
source code, object code, master works, master databases, algorithms, flow
charts, formulae, circuits, works of authorship, mechanisms, research,
manufacturing processes, improvements, marketing, forecasts, pricing, customers,
the salaries, duties, qualifications, performance levels, and terms of
compensation of other employees, and/or cost or other financial data concerning
any of the foregoing or the Company and its operations generally. I understand
that my employment creates a relationship of confidence and trust between me and
the Company with respect to PROPRIETARY INFORMATION.
B. I understand that the Company possesses or will possess "COMPANY
MATERIALS" which are important to its business. For purposes of this Agreement,
"COMPANY MATERIALS" are documents or other media or tangible items that contain
or embody Proprietary Information or any other information concerning the
business, operations or plans of the Company, whether such material has been
prepared by me or by others. "COMPANY MATERIALS" include, but are not limited
to, blueprints, drawings, photographs, charts, graphs, notebooks, customer
lists, computer disks, tapes or printouts, sound recordings and other printed,
typewritten or handwritten documents, as well as samples, prototypes, models,
products and the like.
C. In consideration of my employment by the Company and the compensation
received by me from the Company from time to time, I hereby agree as follows:
1. All Proprietary Information and all title, patents, patent rights,
copyrights, and other intellectual property rights anywhere in the world
(collectively "Rights") in connection therewith shall be the sole property of
the Company. I hereby assign to the Company any Rights I may have or acquire
in such Proprietary Information. At all times, both during my employment by
the Company and after its termination, I will keep in confidence and trust
and will not use or disclose any Proprietary Information or anything relating
to it without the prior written consent of an officer of the Company, except
as may be necessary in the ordinary course of performing my duties to the
Company. Nothing contained herein will prohibit an employee from disclosing
to anyone the amount of his or her wages.
2. All Company Materials shall be the sole property of the Company. I agree that
during my employment by the Company, I will not remove any Company Materials
from the business premises of the Company or deliver any Company Materials to
any person or entity outside the Company, except as I am required to do in
connection with performing the duties of my employment. I further agree that,
immediately upon the termination of my employment by me or by the Company for
any reason, or during my employment if so requested by the Company, I will
return all Company Materials, apparatus, equipment and other physical
property, or any reproduction of such property, excepting only (i) my
personal copies of records relating to my compensation; (ii) my personal
copies of any materials previously distributed generally to stockholders of
the Company; and (iii) my copy of this Agreement.
3. I will promptly disclose in writing to my immediate supervisor, with a copy
to the President of the Company, or to any persons designated by the Company,
all "Inventions", which includes all improvements, inventions, works of
authorship, trade secrets, technology, computer programs, formulas,
compositions, ideas, designs, processes, techniques, know-how and data,
whether or not patentable, made or conceived or reduced to practice or
developed by me, either alone or jointly with others, during the term of my
employment. I will also disclose to the President of the Company, without
breaching any confidentiality restrictions imposed by a third party, all
things that would be Inventions if made during the term of my employment,
conceived, reduced to practice, or developed by me within one (1) year of the
termination of my employment with the Company. Such disclosures do not extend
the assignment made in Section 4 below. I will not disclose Inventions to any
person outside
the Company unless I am requested to do so by management
personnel of the Company.
4. I agree that all Inventions which I make, conceive, reduce
to practice or develop (in whole or in part, either alone or
jointly with others) during my employment shall be the sole
property of the Company to the maximum extent permitted by
Section 2870 of the California Labor Code, a copy of which
is attached, and hereby assign such Inventions and all
Rights therein to the Company. No assignment in this
Agreement shall extend to inventions, the assignment of
which is prohibited by Labor Code Section 2870. The Company
shall be the sole owner of all patents, copyrights and other
intellectual property or other rights in connection
therewith.
5. I agree to perform, during and after my employment, all acts
deemed necessary or desirable by the Company to permit and
assist it, at the Company's expense, in evidencing,
perfecting, obtaining, maintaining, defending and enforcing
Rights and/or my assignment with respect to such Inventions
and improvement in any and all countries. Such acts may
include, but are not limited to, execution of documents and
assistance or cooperation in legal proceedings. I hereby
irrevocably designate and appoint the Company, and its duly
authorized officers and agents, as my agents and
attorneys-in-fact to act for and in my behalf and instead of
me, to execute and file any documents and to do all other
lawfully permitted acts to further the above purposes with
the same legal force and effect as if executed by me.
6. Any assignment of copyright hereunder includes all rights of
paternity, integrity, disclosure and withdrawal and any
other rights that may be known as or referred to as "moral
rights" (collectively "Moral Rights"). To the extent such
Moral Rights cannot be assigned under applicable law and to
the extent the following is allowed by the laws in the
various countries where Moral Rights exist, I hereby waive
such Moral Rights and consent to any action of the Company
that would violate such Moral Rights in the absence of such
consent. I will confirm any such waivers and consents from
time to time as requested by the Company.
7. I have attached hereto a complete list of all existing
Inventions or improvements to which I claim ownership as of
the date of this Agreement and that I desire to remove from
the operation of this Agreement, and I acknowledge and agree
that such list is complete. If no such list is attached to
this Agreement, I represent that I have
3
no such Inventions and improvements at the time of signing this
Agreement.
8. During the term of my employment and for one (1) year thereafter,
I will not encourage or solicit any employee or consultant of the
Company to leave the Company for any reason. However, this
obligation shall not affect any responsibility I may have as an
employee of the Company with respect to the bona fide hiring and
firing of Company personnel.
9. I agree that during my employment with the Company I will not
engage in any employment, business, or activity that is in any
way competitive with the business or proposed business of the
Company, and I will not assist any other person or organization
in competing with the Company or in preparing to engage in
competition with the business or proposed business of the
Company. The provisions of this paragraph shall apply both during
normal working hours and at all other times including, but not
limited to, nights, weekends and vacation time, while I am
employed by the Company.
10. I represent that my performance of all the terms of this
Agreement will not breach any agreement to keep in confidence
proprietary information acquired by me in confidence or in trust
prior to my employment by the Company. I have not entered into,
and I agree I will not enter into, any agreement either written
or oral in conflict herewith or in conflict with my employment
with the Company.
D. I agree that I have the right to resign and the Company has the right
to terminate my employment at any time, for any reason, with or without cause.
This is the full and complete agreement between myself and the Company on this
term.
E. I agree that my obligations under paragraphs C(1) through C(6) and
paragraphs C(8) and C(10) of this Agreement shall continue in effect after
termination of my employment, regardless of the reason or reasons for
termination, and whether such termination is voluntary or involuntary on my
part, and that the Company is entitled to communicate my obligations under this
Agreement to any future employer or potential employer of mine.
F. I agree that any dispute concerning the meaning, effect or validity of
this Agreement shall be resolved in accordance with the laws of the State of
California without regard to the conflict of laws provisions thereof. I further
agree that any dispute I may have with the Company, or any of its employees,
which arises out of my employment or the termination of that employment, shall
be resolved through final and binding arbitration in San Mateo County of the
State of California.
4
This shall include, without limitation, any controversy, claim or
dispute of any kind, including disputes relating to my employment with the
Company or the termination thereof, claims for breach of contract or breach of
the covenant of good faith and fair dealing, and any claims of discrimination or
other claims under Title VII of the Civil Rights Act of 1964, the California
Fair Employment and Housing Act, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, the Employee Retirement Income Securities Act,
or any other federal, state or local law or regulation now in existence or
hereinafter enacted and as amended from time to time concerning in any way the
subject of my employment with the Company or my termination.
The only claims not covered by this agreement are claims for
benefits under the workers' compensation or unemployment insurance laws, which
will be resolved pursuant to those laws. Each party will split the cost of the
arbitration filing and hearing fees and the cost of the arbitrator; each side
will bear its own attorneys' fees, that is, the arbitrator will not have the
authority to award attorneys' fees unless a statutory section at issue in the
dispute authorizes the award of attorneys' fees to the prevailing party, in
which case the arbitrator has authority to make such award as permitted by the
statute in question. The arbitration shall be instead of any civil litigation;
this means that I am waiving any right to a jury trial, and that the
arbitrator's decision shall be final and binding to the fullest extent permitted
by law and enforceable by any court having jurisdiction thereof.
G. I further agree that if one or more provisions of this Agreement are
held to be illegal or unenforceable under applicable California law, such
provision(s) shall be limited or excluded from this Agreement and the balance of
the Agreement shall be interpreted as if such provisions were so limited or
excluded and shall be enforceable in accordance with its terms.
H. This Agreement shall be effective as of the date I execute this
Agreement and shall be binding upon me, my heirs, executors, assigns, and
administrators and shall inure to the benefit of the Company, its subsidiaries,
successors and assigns.
I. This Agreement can only be modified by a subsequent written
agreement executed by the Chief Executive Officer of the Company and me.
5
I HAVE READ THIS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE
OBLIGATIONS WHICH IT IMPOSES UPON ME WITHOUT RESERVATION. NO PROMISES OR
REPRESENTATIONS HAVE BEEN MADE TO ME TO INDUCE ME TO SIGN THIS AGREEMENT. I
SIGN THIS AGREEMENT VOLUNTARILY AND FREELY.
Dated:
----------------
-------------------------------
(Signature of Employee)
-------------------------------
(Print Name of Employee)
6
1. The following is a complete list of all inventions or improvements
relevant to the subject matter of my employment with the Company that have been
made or conceived or first reduced to practice by me alone or jointly with
others prior to my employment with the Company that I desire to remove from the
operation of the Company's Proprietary Information and Inventions Agreement.
_____ No inventions or improvements
_____ See below:
_____ Additional sheets attached
2. I propose to bring to my employment the following materials and
documents of a former employer:
_____ No materials or documents
_____ See below:
_____________________________________
Employee
7
California Labor Code
Section 2870. APPLICATION OF PROVISION PROVIDING THAT EMPLOYEE SHALL
ASSIGN OR OFFER TO ASSIGN RIGHTS IN INVENTION TO EMPLOYER.
(a) Any provision in an employment agreement which provides that an
employee shall assign or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer.
(2) Result from any work performed by the employee for his employer.
(b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable.
8
EXHIBIT B
INDEMNIFICATION AGREEMENT
CONCEPTUS, INC.
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT ("Agreement") is made as of the date set
forth in the signature page hereto, by and between CONCEPTUS, INC., a Delaware
corporation (the "Company"), and the person whose name appears on the signature
page hereto ("Indemnitee").
WHEREAS, the Company and Indemnitee recognize the increasing difficulty
in obtaining directors' and officers' liability insurance, the significant
increases in the cost of such insurance and the general reductions in the
coverage of such insurance;
WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting officers and directors
to expensive litigation risks at the same time as the availability and coverage
of liability insurance has been severely limited and is not currently available
to the Company;
WHEREAS, Indemnitee does not regard the current protection available as
adequate under the present circumstances, and Indemnitee and other officers and
directors of the Company may not be willing to continue to serve as officers and
directors without additional protection; and
WHEREAS, the Company desires to attract and retain the services of
highly qualified individuals, such as Indemnitee, to serve as officers and
directors of the Company and to indemnify its officers and directors so as to
provide them with the maximum protection permitted by law.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. INDEMNIFICATION.
(a) Third Party Proceedings. The Company shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while an
officer or director or by reason of the fact that Indemnitee is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) actually and reasonably incurred by
Indemnitee in connection with such action, suit or proceeding if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe Indemnitee's
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that Indemnitee did
not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that Indemnitee's conduct was unlawful.
(b) Proceedings By or in the Right of the Company. The Company
shall indemnify Indemnitee if Indemnitee was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Company or any subsidiary of the Company to procure a judgment
in its favor by reason of the fact that Indemnitee is or was a director,
officer, employee or agent of the Company, or any subsidiary of the Company, by
reason of any action or inaction on the part of Indemnitee while an officer or
director or by reason of the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees) and amounts paid in settlement actually and
reasonably incurred by Indemnitee in connection with the defense or settlement
of such action or suit if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, except that no indemnification shall be made in respect of any
claim, issue or matter as to which Indemnitee shall have been adjudged to be
liable to the Company unless and only to the extent that the Court of Chancery
of the State of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, Indemnitee is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
of the State of Delaware or such other court shall deem proper.
(c) Mandatory Payment of Expenses. To the extent that Indemnitee
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Subsections (a) and (b) of this Section 1 or the
defense of any claim, issue or matter therein, Indemnitee shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
Indemnitee in connection therewith.
2. AGREEMENT TO SERVE. In consideration of the protection afforded by
this Agreement, if Indemnitee is a director of the Company then Indemnitee
agrees to serve at least for the balance of the current term as a director and
not to resign voluntarily during such period without the written consent of a
majority of the Board of Directors. If Indemnitee is an officer of the Company
not serving under an employment contract, then Indemnitee agrees to serve in
such capacity at least for the balance of the current fiscal year of the Company
and not to resign voluntarily during such period without the written consent of
a majority of the Board of Directors. Following the applicable period set forth
above, Indemnitee agrees to continue to serve in such capacity at the will of
the Company (or under separate agreement, if such agreement exists) so long as
he is duly appointed or elected and qualified in accordance with the applicable
provisions of the Bylaws of the Company or any subsidiary of the Company or
until such time as he tenders his resignation in writing. Nothing contained in
this Agreement is intended to create in Indemnitee any right to continued
employment.
-2-
3. EXPENSES; INDEMNIFICATION PROCEDURE.
(a) Advancement of Expenses. The Company shall advance all
expenses incurred by Indemnitee in connection with the investigation, defense,
settlement or appeal of any civil or criminal action, suit or proceeding
referenced in Section l(a) or (b) hereof. Indemnitee hereby undertakes to repay
such amounts advanced only if, and to the extent that, it shall ultimately be
determined that the Indemnitee is not entitled to be indemnified by the Company
as authorized hereby. The advances to be made hereunder shall be paid by the
Company to the Indemnitee within twenty (20) days following delivery of a
written request therefor by Indemnitee to the Company, accompanied by reasonable
documentation therefor.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a
condition precedent to his right to be indemnified under this Agreement, give
the Company notice in writing as soon as practicable of any claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the Chief Executive
Officer of the Company at the address shown on the signature page of this
Agreement (or such other address as the Company shall designate in writing to
Indemnitee). Notice shall be deemed received on the third business day after the
date postmarked if sent by domestic certified or registered mail, properly
addressed; otherwise notice shall be deemed received when such notice shall
actually be received by the Company. In addition, Indemnitee shall give the
Company such information and cooperation as it may reasonably require and as
shall be within Indemnitee's power.
(c) Procedure. Any indemnification and advances provided for in
Section 1 and this Section 3 shall be made no later than forty-five (45) days
after receipt of the written request of Indemnitee. If a claim under this
Agreement, under any statute, or under any provision of the Company's
Certificate of Incorporation or Bylaws providing for indemnification, is not
paid in full by the Company within forty-five (45) days after a written request
for payment thereof has first been received by the Company, Indemnitee may, but
need not, at any time thereafter bring an action against the Company to recover
the unpaid amount of the claim and, subject to Section 13 of this Agreement,
Indemnitee shall also be entitled to be paid for the expenses (including
attorneys' fees) of bringing such action. It shall be a defense to any such
action (other than an action brought to enforce a claim for expenses incurred in
connection with any action, suit or proceeding in advance of its final
disposition) that Indemnitee has not met the standards of conduct which make it
permissible under applicable law for the Company to indemnify Indemnitee for the
amount claimed, but the burden of proving such defense shall be on the Company
and Indemnitee shall be entitled to receive interim payments of expenses
pursuant to Subsection 3(a) unless and until such defense may be finally
adjudicated by court order or judgment from which no further right of appeal
exists. It is the parties' intention that if the Company contests Indemnitee's
right to indemnification, the question of Indemnitee's right to indemnification
shall be for the court to decide, and neither the failure of the Company
(including its Board of Directors, any committee or subgroup of the Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination that indemnification of Indemnitee is proper in the circumstances
because Indemnitee has met the applicable standard of conduct required by
applicable law, nor an actual determination by the Company (including its Board
of Directors, any committee or subgroup of the Board of Directors, independent
legal
-3-
counsel, or its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not
met the applicable standard of conduct.
(d) Notice of Insurers. If, at the time of the receipt of a notice
of a claim pursuant to Section 3(b) hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
(e) Selection of Counsel. In the event the Company shall be
obligated under Section 3(a) hereof to pay the expenses of any proceeding
against Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, upon the
delivery to Indemnitee of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same proceeding, provided that (i) Indemnitee
shall have the right to employ his counsel in any such proceeding at
Indemnitee's expense; and (ii) if (A) the employment of counsel by Indemnitee
has been previously authorized by the Company, (B) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and Indemnitee in the conduct of any such defense or (C) the Company
shall not, in fact, have employed counsel to assume the defense of such
proceeding, then the fees and expenses of Indemnitee's counsel shall be at the
expense of the Company.
4. ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.
(a) Scope. Notwithstanding any other provision of this Agreement,
the Company hereby agrees to indemnify the Indemnitee to the fullest extent
permitted by law, notwithstanding that such indemnification is not specifically
authorized by the other provisions of this Agreement, the Company's Certificate
of Incorporation, the Company's Bylaws or by statute. In the event of any
change, after the date of this Agreement, in any applicable law, statute, or
rule which expands the right of a Delaware corporation to indemnify a member of
its board of directors or an officer, such changes shall be, ipso facto, within
the purview of Indemnitee's rights and Company's obligations, under this
Agreement. In the event of any change in any applicable law, statute or rule
which narrows the right of a Delaware corporation to indemnify a member of its
board of directors or an officer, such changes, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement shall have
no effect on this Agreement or the parties' rights and obligations hereunder.
(b) Nonexclusivity. The indemnification provided by this Agreement
shall not be deemed exclusive of any rights to which Indemnitee may be entitled
under the Company's Certificate of Incorporation, its Bylaws, any agreement, any
vote of stockholders or disinterested Directors, the General Corporation Law of
the State of Delaware, or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such office. The
indemnification provided under this Agreement shall continue as to Indemnitee
for any
-4-
action taken or not taken while serving in an Indemnified capacity even though
he may have ceased to serve in an Indemnified capacity at the time of any
action, suit or other covered proceeding.
5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually or reasonably
incurred by him in the investigation, defense, appeal or settlement of any civil
or criminal action, suit or proceeding, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of
such expenses, judgments, fines or penalties to which Indemnitee is entitled.
6. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge
that in certain instances, federal law or public policy may override applicable
state law and prohibit the Company from indemnifying its directors and officers
under this Agreement or otherwise. For example, the Company and Indemnitee
acknowledge that the Securities and Exchange Commission (the "SEC") has taken
the position that indemnification is not permissible for liabilities arising
under certain federal securities laws, and federal legislation prohibits
indemnification for certain ERISA violations. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the SEC to submit the question of indemnification to a court in
certain circumstances for a determination of the Company's right under public
policy to indemnify Indemnitee.
7. OFFICER AND DIRECTOR LIABILITY INSURANCE. The Company shall, from
time to time, make the good faith determination whether or not it is practicable
for the Company to obtain and maintain a policy or policies of insurance with
reputable insurance companies providing the officers and directors of the
Company with coverage for losses from wrongful acts, or to ensure the Company's
performance of its indemnification obligations under this Agreement. Among other
considerations, the Company will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage. In all policies of
director and officer liability insurance, Indemnitee shall be named as an
insured in such a manner as to provide Indemnitee the same rights and benefits
as are accorded to the most favorably insured of the Company's directors, if
Indemnitee is a director; or of the Company's officers, if Indemnitee is not a
director of the Company but is an officer; or of the Company's key employees, if
Indemnitee is not an officer or director but is a key employee. Notwithstanding
the foregoing, the Company shall have no obligation to obtain or maintain such
insurance if the Company determines in good faith that such insurance is not
reasonably available, if the premium costs for such insurance are
disproportionate to the amount of coverage provided, if the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient
benefit, or if Indemnitee is covered by similar insurance maintained by a parent
or subsidiary of the Company.
8. SEVERABILITY. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach of
this Agreement. The provisions of this Agreement shall be severable as provided
in this Section 8. If this Agreement or any portion hereof shall be invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this
-5-
Agreement that shall not have been invalidated, and the balance of this
Agreement not so invalidated shall be enforceable in accordance with its terms.
9. EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
(a) Claims Initiated by Indemnitee. To indemnify or advance
expenses to Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except with respect
to proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the Delaware General Corporation Law, but such indemnification or
advancement of expenses may be provided by the Company in specific cases if the
Board of Directors finds it to be appropriate;
(b) Lack of Good Faith. To indemnify Indemnitee for any expenses
incurred by Indemnitee with respect to any proceeding instituted by Indemnitee
to enforce or interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by Indemnitee in such
proceeding was not made in good faith or was frivolous;
(c) Insured Claims. To indemnify Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) which
have been paid directly to Indemnitee by an insurance carrier under a policy of
officers' and directors' liability insurance maintained by the Company; or
(d) Claims under Section 16(b). To indemnify Indemnitee for
expenses or the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute.
10. CONSTRUCTION OF CERTAIN PHRASES.
(a) For purposes of this Agreement, references to the "Company"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and employees
or agents, so that if Indemnitee is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as Indemnitee
would have with respect to such constituent corporation if its separate
existence had continued.
(b) For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on Indemnitee with respect to an employee
benefit plan; and references to "serving at the request of the Company" shall
include any service as a director, officer, employee or agent of the Company
which imposes duties on, or involves services by, such director, officer,
employee or agent with
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respect to an employee benefit plan, its participants, or beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan, Indemnitee shall be deemed to have acted in a manner "not opposed to the
best interests of the Company" as referred to in this Agreement.
11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
the Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.
13. ATTORNEYS' FEES. In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that each of the material assertions made by Indemnitee as a basis for such
action were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement or to enforce
or interpret any of the terms of this Agreement, Indemnitee shall be entitled to
be paid all court costs and expenses, including attorneys' fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee's
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines that each of Indemnitee's material defenses to such
action were made in bad faith or were frivolous.
14. NOTICE. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by certified or registered mail with postage prepaid,
on the third business day after the date postmarked. Addresses for notice to
either party are as shown on the signature page of this Agreement, or as
subsequently modified by written notice.
15. CONSENT TO JURISDICTION. The Company and the Indemnitee each
hereby irrevocably consent to the jurisdiction of the courts of the State of
Delaware for all purposes in connection with any action or proceeding which
arises out of or relates to this Agreement and agree that any action instituted
under this Agreement shall be brought only in the state courts of the State of
Delaware.
16. CHOICE OF LAW. This Agreement shall be governed by and its
provisions construed in accordance with the laws of the State of Delaware, as
applied to contracts between Delaware residents entered into and to be performed
entirely within Delaware.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CONCEPTUS, INC.
By: ________________________
Its:________________________
0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxxxxxxxx 00000
AGREED TO AND ACCEPTED:
INDEMNITEE: ____________________
_____________________________________________________
(Signature)
Address:
_______________________________________
_______________________________________
_______________________________________
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