Exhibit 10.23
AGREEMENT dated as of the 22nd day of July, 1993 by and between NITINOL
MEDICAL TECHNOLOGIES, INC., (hereinafter called "Employer") and XXXXXXX X.
XXXXXXXXXX (hereinafter called "Executive").
WITNESSETH
----------
WHEREAS, Employer has developed and is developing medical devices,
including devices made of the shape memory metal alloy, nitinol, the first of
which is a patented xxxx xxxx filter;
WHEREAS, Executive has been employed by Employer as director of research
and development and quality control and assurance, and Employer and Executive
desire to enter into an agreement to continue such employment;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto hereby agree as follows:
1. Employment. Employer hereby agrees to employ Executive, and Executive
----------
agrees to serve for the term of this Agreement on the terms and conditions
hereinafter set forth.
2. Term. This Agreement shall be for a term of five (5) years commencing
----
June 1, 1993 and ending May 31, 1998. At the end of such term, or any additional
term, this Agreement shall automatically renew for an additional term of one
year on the same basis as that in effect at the end of any such term, unless one
party shall notify the other in writing, not later than three months prior to
the end of any term, that such party wishes to terminate employment at the end
of the then current term.
3. Extent of Services; Duties. Executive will devote his full time and
--------------------------
efforts to the business and affairs of the Employer and shall not, during the
term of this Agreement, be engaged in any other business activity. Executive
will work in the areas of research and development and quality control and
assurance, and will use his best efforts to promote the interests of Employer.
Executive will hold the office of Vice President, reporting to the Director of
Science and the President and such other person as directed by the President and
the Board of Directors of the Employer. Notwithstanding the foregoing, the
Executive shall not be precluded from devoting such time to his personal
financial affairs as shall not interfere with his duties hereunder, and shall be
entitled to holidays in accordance with the practice of Employer.
4. Compensation. Employer will compensate Executive for all services
------------
rendered hereunder at a salary of $80,000 per annum from June 1, 1993 through
May 31, 1994; $87,000 per annum from June 1, 1994 through May 31, 1995; $94,000
per annum from June 1, 1995 through May 31, 1996; $100,000 per annum from June
1, 1996 through May 31, 1997 and $105,000 per annum from June 1, 1997 through
May 31, 1998.
5. Career Incentive Bonus Plan. Executive was previously granted 30,000
---------------------------
Units under the Career Incentive Bonus Plan. Employer agrees to grant an
additional 120,000 Units under the Plan to Executive, effective as of July 1,
1993 in accordance with the
terms of the plan. All Units shall convert to common stock of the Company as
provided in the Plan, and when as and if the Company ceases to be an
S corporation.
6. Expenses. Employer shall reimburse Executive against appropriate
--------
vouchers for authorized business expenses reasonably incurred by him in the
performance of his duties pursuant to the terms of this Agreement.
7. Secrecy; Inventions.
-------------------
(a) Executive agrees that he shall not, during or after the
termination of this Agreement, for any reason whatsoever, divulge, furnish
or make accessible to any person, firm, corporation or other business
entity, any confidential information, including but not limited to,
inventions, processes, trade secrets, practices, methods, products or any
confidential or secret aspect of the business of the Employer without the
prior written consent of the Employer. This provision shall not apply to
any confidential information which, through no breach of this agreement by
Executive, becomes generally known in the medical device industry.
(b) Executive agrees to communicate and make known to the Employer in
a preservable manner all significant knowledge acquired by him during the
term of this Agreement, including laboratory notes and logs relating to any
methods, developments, and/or improvements, or know-how which concern, or
could concern the present or future business of the Employer.
(c) Executive agrees to assign to Employer any invention, idea,
discovery or improvement conceived of, developed or perfected, solely or
jointly, by Executive during the term of this Agreement or Executive's
prior Agreement with Employer relating to medical devices or to the making,
fabrication, training or use of nitinol, and to execute all documents and
do all further acts which may be necessary or appropriate to perfect such
assignment and at the request of Employer to cause a patent application to
be made and a patent to issue and/or to defend a patent application or a
patent on any such invention, in the United States and any other country,
provided that all expenses in connection herewith shall be paid by
Employer.
8. During the term of this Agreement and any renewal thereof, Employer
shall pay Executive a 1% royalty on the gross revenues resulting from the sale
of any product made and or sold in a jurisdiction where the Employer has a
patent, filed subsequent to the date of this agreement, on an invention of
Executive. Net Sales shall be the amount actually collected and shall not
include transportation charges. Royalties shall be paid to Executive quarterly
within 75 days after the end of each calendar quarter and Executive shall have
the right within one year after receipt of statement to have a public
accountant, during normal business hours, audit Employer's books to verify the
accuracy of the royalty payments due pursuant to this Section 8.
9. Restrictive Covenant.
--------------------
(a) Executive agrees that during the term hereof and for a period of
18 months next succeeding the termination of his employment with Employer
for any reason whatsoever, he will not directly or indirectly engage in any
business activity in competition with the business then being conducted or
actively contemplated by Employer, whether for Executive's own account or
as executive, partner, officer,
-2-
director, consultant or holder of more than 5% equity interest in any other
entity or person. Executive further agrees that during said 18 month period
he will not hire, offer to hire, entice away or try to persuade any
executive, employee, supplier or agent of Employer to discontinue the
relationship with the Employer, or assist any member of his immediate
family, any business associate or other person, for consideration or
otherwise, to do any of the aforesaid prohibited things. During the course
of said 18 month period, Executive shall advise Employer, in writing, if he
has received and wishes to accept any offer of employment from such a
competitor. Such writing shall be sufficiently detailed regarding the
nature and scope of the position and compensation offered. The Employer
shall then have thirty (30) days following the receipt of said written
notification to advise Executive of its election:
(i) To waive the provision of this Section 8, only in which case
Executive shall be free to accept such employment subject to all the
other terms and conditions set forth herein; or
(ii) To insist upon full compliance with the provisions of this
Paragraph 9, in which case Employer shall compensate Executive at the
base salary rate actually offered by its competitor for the duration of
the aforesaid 18 month period or until Executive shall be employed
elsewhere.
(b) If Executive shall breach any of this Section 9, all Career
Incentive Bonus Plan benefits, whether vested or unvested, shall lapse
until final resolution of any claims by Employer for money damages, and
Employer, in addition to any money damages, shall be entitled to an
injunction to be issued by a court of competent jurisdiction enjoining,
restraining or restricting Executive from such breach or violation.
10. Miscellaneous.
-------------
(a) Neither this Agreement nor its execution and delivery has been
induced by any representation, stipulation, warranty, agreement or
understanding of any kind other than those specifically set forth herein.
This Agreement constitutes the whole agreement between the parties hereto
and there are no terms other than those contained herein. No variation
hereof shall be deemed valid unless in writing and signed by the parties
hereto and no discharge of the terms hereof shall be deemed valid unless by
full performance by the parties hereto or by a writing signed by the
parties hereto. No waiver by either party of any breach of any provision or
condition of this Agreement shall be deemed a waiver of a breach of a
similar or dissimilar provision or condition at the same time or any prior
or subsequent time or of the provision or condition itself.
(b) Each provision of this Agreement is intended to be severable and
the invalidity or illegality of any portion of this Agreement shall not
affect the validity or legality of the remainder hereof. If any of the
provisions of this Agreement should be determined to be unenforceable by
reason of being unreasonable in duration or in area, then such provision is
intended to and shall extend only for such period of time and in such area
as is determined to be reasonable and enforceable.
(c) This Agreement supersedes and replaces the Agreement between the
parties dated June 1, 1991.
-3-
(d) All notices, requests, demands and other communications provided
for by this Agreement shall be in writing and shall be deemed to have been
given at the time mailed enclosed in a certified postage-paid envelope,
return receipt requested, addressed to the addresses of the respective
parties stated below or to such changed addresses as such parties may have
fixed by a notice, and simultaneously by facsimile telephone to the Fax
phone number provided by the parties; provided, however, that any notice of
any change of address or change of Fax number shall be effective only upon
receipt.
If to the Employer:
c/o C. Xxxxxxx Xxxxxx
000 Xxxxx Xxx. 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Fax (000) 000-0000
cc: Xxxx Xxxxxxxxx
0000 Xxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000-0000
If to the Executive:
000 Xxxxxxx Xxx
Xxxxxxxx, XX 00000
(e) This agreement shall inure to the benefit of and be binding upon
the Employer, its successors and assigns, and upon the Executive, his
heirs, executors, administrators and legal representatives.
(f) Captions contained in this Agreement are inserted only as a
matter of convenience and for reference and in no way define, limit, extend
or describe the scope of this Agreement or the intent of any provision
hereof.
(g) The terms and provisions of this Agreement and any dispute or
controversy arising hereunder shall be governed by the laws of the State of
New York applicable to contracts made and to be performed therein, without
giving effect to the principles of conflicts of laws thereof. Any dispute
or controversy arising out of this Agreement shall be submitted to binding
arbitration to be held in the City of New York in accordance with the rules
of the American Arbitration Association then in effect.
(h) This Agreement may be executed in several counterparts and all so
executed shall constitute one Agreement, binding on all parties hereto,
notwithstanding that all the parties are not signatories to the original or
the same counterpart.
-4-
IN WITNESS WHEREOF, the parties hereto have hereunder set their hands and
seals the day and year first above written.
NITINOL MEDICAL TECHNOLOGIES, INC.
By: /s/ C. Xxxxxxx Xxxxxx
------------------------------
C. Xxxxxxx Xxxxxx
Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxxx
-5-
SUPPLEMENTAL AGREEMENT
This Supplemental Agreement by and between NITINOL MEDICAL TECHNOLOGIES,
INC., (hereinafter referred to as "EMPLOYER") and XXXXXXX X. XXXXXXXXXX
(hereinafter referred to as "EXECUTIVE") is effective as of the First day of
June, 1994.
WHEREAS, EMPLOYER has entered into a License Development Agreement by and
between Boston Scientific Corporation and EMPLOYER dated as of the 1st day of
November, 1994 (The "License Agreement").
1. EMPLOYER and EXECUTIVE are parties to a prior Agreement dated as of the
22nd day of July, 1993 (the "Prior Agreement"), a copy of which is attached
hereto. The purpose of this Supplemental agreement is to amend the provisions of
paragraph 8 of the Prior Agreement; but the Prior Agreement shall otherwise
remain in full force and effect.
2. Paragraph 8 of the Prior Agreement is hereby amended to read as
follows:
8. (a) During the term of this Agreement and any renewal thereof,
EMPLOYER shall pay EXECUTIVE a royalty with respect to any product (other
than a product including a Stent, as that term is defined in Section 1.20
of the License Agreement, or a Xxxx Xxxx filter product) made, used or sold
by EMPLOYER or any licensee of EMPLOYER in any jurisdiction EMPLOYER has an
Executive Patent (as defined below) the claims of which cover such
manufacture, use or sale. With respect to any such product sold by
EMPLOYER, the royalty shall be 1% of EMPLOYER's Net Sales (defined
substantially as EMPLOYER'S gross sales adjusted as provided in the
definition of Net Sales in Section 1.14 of the License Agreement, with such
modifications as are appropriate to the circumstances) of such products;
with respect to any such products sold (or to be sold) by a third party
from which EMPLOYER directly or indirectly receives any payment with
respect to any Executive Patent, the royalty shall be 5% of such payments.
In the case of an Executive Patent in which EXECUTIVE is not the sole
inventor, the royalty shall be apportioned (e.g., if the product is covered
by only one Executive Patent as to which there are two inventors, EXECUTIVE
shall receive a royalty equal to one-half the royalty which he would have
received if he had been the sole inventor). Notwithstanding the foregoing
no royalty shall be paid to EXECUTIVE with respect to any such product if
EMPLOYER establishes that no invention which is the subject of any
Executive Patent contributed to the value of such product.
(b) EMPLOYER shall pay EXECUTIVE an amount equal to 5% of all
licensing fees actually collected by EMPLOYER in conjunction with the sale
or licensing of Stents or Products (as such terms are defined in Section
1.18 and 1.20 of the License Agreement). With respect to each Stent
Product, such amount shall be due and payable for a period of ten (10)
years following the first commercial sale of such product in any
jurisdiction. In the event that EMPLOYER collects any monies from a third
party as designated as an advance against future license fees, such monies
shall be considered to have been collected when fully vested in EMPLOYER.
(c) The payments to EXECUTIVE provided in subparagraphs (a) and (b)
above shall if such be reduced by 50% from and after the time when
EXECUTIVE's employment with EMPLOYER is terminated by EXECUTIVE voluntarily
(but not by reason of death, sickness or other disability) or by EMPLOYER
with due cause, but otherwise shall not be reduced, provided, however, that
if termination under such circumstances shall occur within three years of
the date of this Agreement said payment shall terminate.
(d) The payments to EXECUTIVE provided in subparagraphs (a) and (b)
above shall be made as promptly as practicable, but in any event within 75
days at the end of each calendar quarter with respect to payments received
by the EMPLOYER during such calendar quarter; if no payments are due with
respect to any calendar quarter, EMPLOYER shall provide EXECUTIVE a
statement to such effect within the 75 day period. EMPLOYER shall keep
complete and accurate books and records from which the amounts of such
payments may be ascertained, and within one year after receipt of any
payment or statement. EXECUTIVE, or a representative of EXECUTIVE, shall
have the right to examine such books and records during business hours once
in each calendar year to verify the accuracy of such payment or statement.
(e) EMPLOYER's obligations under this Paragraph 8 may be assigned only
in connection with the sale or other transfer of all or substantially all
of EMPLOYER's business to which the subject matter of this paragraph
relates, and then only if the assignee agrees to be bound thereby in a
writing delivered to EXECUTIVE in advance of such transfer.
(f) As used in this Paragraph 8,
"Executive Patent" means any patent issued, and any patent application
filed, after the effective date of the Prior Agreement in which EXECUTIVE
is a sole or joint inventor.
"Stent" shall have the same meaning as nitinol Stent in the Agreement
with Boston Scientific Corporation.
NITINOL MEDICAL TECHNOLOGIES, INC XXXXXXX X. XXXXXXXXXX
By: /s/ C. Xxxxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------- -----------------------------
C. Xxxxxxx Xxxxxx
Chief Executive Officer
Date: January 12, 1995 Date: January 22, 1995
------------------------ -----------------------
-2-
