EXHIBIT 10.14
March 1, 1999
CONFIDENTIAL
Xxxx X. Xxxxx
[ADDRESS OMITTED]
Dear Xxxx:
The purpose of this letter is to set forth an agreement between St. Jude
Medical, Inc. (the "Company") and you with respect to your voluntary
resignation. You will resign as a member of the Board of Directors of St. Jude
Medical, Inc., effective March 1, 1999 and you will resign as an employee and
officer of St. Jude Medical, as well as any other position you hold with the
Company or its affiliates, effective March 31, 1999, (hereinafter "Resignation
Date"). You will be eligible for all employee benefits, consistent with employee
status until your Resignation Date. The following is our proposal for
compensation for you after March 31, 1999:
COMPENSATION/BENEFITS:
1) In exchange for signing the attached Release, which must be executed
effective on the day after your Resignation Date, the Company will
provide you continuation of base pay plus perquisite allowance for an
additional twelve (12) months (including the employer portion of FICA)
until March 31, 2000, to be paid on each regularly scheduled pay day.
By signing the Release and accepting the payments described above, you
release the Company from all claims you may have against the Company
relating to your employment with the Company. You acknowledge and agree
that the Company is under no obligation to provide you with the
payments described above, prior to execution of this Agreement. If you
elect not to sign the Release, the payments described in this letter
will not be provided to you.
a) Your participation in all employee fringe benefit programs
will terminate as of your Resignation Date. Any accrued and
unused vacation will be paid to you following the Resignation
Date.
b) The Company agrees to pay its portion of the medical and
dental insurance premiums for your COBRA coverage through
March 31, 2000, (you will be responsible for the employee
portion) or until you obtain alternative employment, whichever
occurs first. You have the right under federal law (COBRA) to
continue medical and dental insurance for eighteen (18) months
from the Resignation Date.
c) Your life insurance coverage will terminate as of the
Resignation Date. Payment for continued coverage after that
date will be your sole responsibility. Please contact Xxxxx
Xxxxxx, Manager, Corporate Benefits to coordinate your
continued coverage.
Xx. Xxxx X. Xxxxx
March 1, 1999
Page 2
d) Your interest in the St. Jude Medical, Inc. Employee Profit
Sharing & Savings Plan will be valued in accordance with the
provisions of the plan. St. Jude Medical will continue to
match your 401(k) contributions until the Resignation Date,
however, you will not be eligible for a profit sharing
contribution in 1999.
e) You will be entitled to a pro rata portion of your bonus for
1999, (i.e. until March 31, 1999), should one become due under
the terms of the 1999 Management Incentive Compensation
Program.
f) Your vested interest in the St. Jude Medical, Inc. Management
Savings Plan will be distributed within thirty (30) days from
the close of the quarter in which the termination occurs.
g) The Company agrees to reimburse you for expenses associated
with outplacement services through an outplacement group to be
selected by you in an amount not to exceed $22,500.
h) If you are a participant in the Employee Stock Purchase Plan
your contribution will be paid out to you with interest.
i) Per your request, the Company has offered to sell you, upon
your Resignation Date, your laptop computer and office chair
at their current book value as of March 31, 1999.
2) You understand that you are bound by the terms and conditions of the
Non-Competition Agreement you signed on December 12, 1997. A copy is
attached for your reference.
3) If you have been unable to secure employment by year end December 31,
1999, and you so wish, the Company will reimburse you for the actual
cost of moving your household goods and automobiles from
Minneapolis/St. Xxxx to any contiguous 48 states, but not to exceed the
cost of the move to Boston provided such move occurs within twelve (12)
months of your Resignation Date. Other expenses of relocation such as
realtor's fees, closing costs, attorney's fees, new auto licenses and
other miscellaneous expenses will not be reimbursed. The sale of any
residence will be your responsibility.
4) The Company's records indicate that you hold options covering the
purchase of St. Jude Medical, Inc. Common stock. Under the terms of the
option agreements, you are entitled to exercise any vested options
within ninety (90) days from your Termination Date. Stock options that
have not vested as of your Termination Date will terminate effective
upon your termination of employment per their terms.
Xx. Xxxx X. Xxxxx
March 1, 1999
Page 3
----------------------- ---------- ---------- ----------- -----------
UNITS VESTED REMAINING GRANT EXERCISE
DATE PRICE
----------------------- ---------- ---------- ----------- -----------
100,000 25,000 75,000 01/02/98 $31.625
(TIME VESTING)
----------------------- ---------- ---------- ----------- -----------
100,000 0 100,000 01/02/98 $31.625
(PERFORMANCE VESTING)
----------------------- ---------- ---------- ----------- -----------
5) You will continue to be covered as former officer and director and for
all positions and functions which you have held at St. Jude Medical by
your indemnification agreement.
6) You agree that you will keep the terms, amount and facts of this
Agreement confidential and that, unless required to do so by law or
court order, or if necessary to enforce this Agreement or defend
yourself against claims by the company or its affiliates, you will not
disclose any information about this Agreement to anyone other than your
spouse, attorneys, tax advisors, and applicable governmental
authorities, if any. Similarly, the Company agrees that it will keep
the terms, amount and facts of this Agreement confidential and that
unless required to do so by law or court order, or if necessary to
enforce this Agreement or defend itself against claims by you, it will
not disclose any information about this Agreement to anyone other than
those within the Company or its affiliates with a need to know, and the
attorneys, tax advisors, and applicable governmental authorities, if
any, of the Company and its affiliates.
7) You agree that you will not disparage or otherwise make any unfavorable
statements, oral or written, or perform any act or omission, which is
detrimental to the reputation or goodwill of the Company. For purpose
of the prior sentence, the Company shall mean the Company, its
successors and affiliates and their officers, directors, employees.
Similarly, the Company agrees that it will not disparage or otherwise
make any unfavorable statements, oral or written, or perform any act or
omission, which is detrimental to your reputation or goodwill.
Xx. Xxxx X. Xxxxx
March 1, 1999
Page 4
8) In further consideration of the benefits provided to you under this
Agreement, you acknowledge your obligation to maintain in confidence
and not to use for any purpose other than the benefit of the company,
all confidential information of the Company you received during your
employment.
9) This agreement and the accompanying Release set forth the entire
agreement between you, on the one hand, and the Company and its
affiliates, on the other hand, concerning the subject matters addressed
here, and supersedes any prior oral and/or written agreements or
communications between you and the Company and/or any of its affiliates
concerning these subjects. This Agreement and the accompanying Release
shall be construed and interpreted in accordance with the laws of
Minnesota without regard to its conflict of law principles.
DUTIES:
(1) You agree to not solicit St. Jude Medical employees for employment
elsewhere for a period of two (2) years from your Resignation Date,
without receiving prior written consent from me.
(2) Any communications released by the Company or you regarding your
resignation will be mutually agreed upon prior to release or will be
required to be made by the Company under law, as determined by the
Company's counsel.
Please sign both originals of this Letter Agreement and Release where indicated,
thereby signifying your acceptance of the terms and return one set of originals
to me.
Xxxx, I sincerely appreciate the very professional and thoughtful manner in
which you have conducted yourself in this matter. I trust these terms are
consistent with our discussion and they strike me as fair to both you and St.
Jude. I wish you and Xxxxxx the best in the future.
Sincerely, AGREED AND ACCEPTED BY:
/S/ X. X. XXXXXXXXXX /S/ XXXX X. XXXXX
Xxxxxx X. Xxxxxxxxxx -----------------------------------------
Xxxx X. Xxxxx
RAM/kmj
