EXHIBIT 10.18
EMPLOYMENT AGREEMENT
AGREEMENT, made and entered into as of this 6th day of July 1998, by
and between Rochester Medical Corporation, a Minnesota corporation (the
"Corporation"), and Xxxxx X. Xxxxxx ("Employee").
WHEREAS, the Corporation and the Employee desire to record the terms of
Employee's employment by the Corporation;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. TERM OF EMPLOYMENT. Subject to the terms and conditions of this
Agreement, the Corporation hereby employs Employee and Employee hereby accepts
employment for the period commencing July 6, 1998, and continuing thereafter
until the employment is terminated according to the provisions of this
Agreement.
2. DUTIES. During the term of this Agreement, Employee shall perform
the duties of Vice President Sales and Marketing and such additional duties as
may be prescribed from time to time by the Board of Directors or the Chief
Executive Officer of the Corporation.
3. BASE SALARY; OTHER COMPENSATION.
3.1 Base Salary. The Corporation shall pay Employee a initial
Base Salary ("Base Salary") of One Hundred Twenty Five Thousand Dollars
($125,000) per annum commencing July 6, 1998. The Base Salary shall be paid
according to the Corporation's regular payroll procedure, in equal increments
not less frequently than monthly. The Base Salary shall be subject to annual
review and merit increase adjustment in accordance with the Corporation's
customary practices, as may be then in effect, for salary planning and
administration.
3.2 Incentive Bonuses. Employee shall be entitled to receive
an initial bonus payment in the amount of Fifteen Thousand Dollars ($15,000)
payable with his first regular payroll. Employee shall also be eligible to
participate in the Corporation's bonus incentive plan with a targeted bonus
("Bonus") determined in accordance with
the Corporation's Executive Bonus Program. The targets and performance necessary
to earn the Bonus or any portion thereof shall be set annually by the
Corporation; provided, that the Bonus payable to Employee for the Corporation's
fiscal year ending September 30, 1998, shall be in the amount of Twenty Eight
Thousand One Hundred Twenty Five Dollars ($28,125).
3.3 Relocation Allowance. In addition to any other
compensation to which Employee may be entitled by this agreement, The
Corporation shall pay Employee a Relocation Allowance (the "Relocation
Allowance") consisting of (i) all direct moving costs and expenses incurred by
Employee in connection with Employee's associated relocation to the Rochester,
Minnesota, area, (ii) reimbursement of all realtor's commissions and closing
costs paid by Employee in connection with the sale of his present home, (iii)
reimbursement of closing costs paid by Employee in connection with the purchase
of his new home, (iv) reimbursement of all expenses for meals and lodging, not
to exceed eight days, in connection with Employee's travel to the Rochester,
Minnesota, area for purposes of finding a new home, and (v) income tax gross-up
to the extent any payments to or on behalf of employee hereunder are taxable as
income to Employee.
3.3 Incentive Stock Option. In addition to any other
compensation to which Employee may be entitled by this agreement, Employee shall
be entitled to receive an Incentive Stock Option for Eighty Thousand (80,000)
shares of the Corporation under the Corporation's 1991 Stock Option Plan
according to the Incentive Stock Option Agreement appended hereto as Exhibit 1.
The exercise price of the Incentive Stock Option shall be fair market value, as
determined according to the 1991 Stock Option Plan, as of the close of business
on the date of grant by the Corporation.s Board of Directors. Employee
acknowledges receiving a copy of the 1991 Stock Option Plan.
4. BENEFITS.
4.1 Vacation. During each year of his employment, Employee
shall be entitled to four (4) weeks annual vacation and to reasonable holidays
and sick leave. Vacations shall be taken by Employee during the year earned at
such time or times and for such periods as Corporation and Employee shall agree.
4.2 Benefit Programs, Insurance. Employee shall be entitled to
participate in customary employee benefit programs as may be from time to time
determined by the Board of Directors including, but not limited to, life
insurance, hospitalization, surgical and major medical coverage, and long-term
disability as are or may be made available from time to time to other salaried
employees of the Corporation.
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5. TERMINATION.
5.1 Events of Termination. This Agreement may be terminated
upon the occurrence of any one of the following events:
(a) Voluntary. Employee may terminate this Agreement at any
time during the term of this Agreement by giving 30 days prior
written notice of termination to the Board.
(b) Involuntary Without Cause. The Corporation may terminate
this Agreement without cause by 30 days written notice to Employee.
(c) Involuntary With Cause. The Corporation may terminate this
Agreement immediately for cause for (i) Employee's material breach
of any agreement with the Corporation, (ii) Employee's deliberate,
willful or gross misconduct in the performance or Employee's duties
on behalf of the Corporation, or (iii) Employee's being charged with
a crime punishable by imprisonment.
(d) Death. This Agreement shall automatically terminate upon
the death of the Employee.
(e) Disability. This Agreement shall automatically terminate
upon the permanent disability of Employee. For the purposes of this
Agreement, Employee shall be deemed permanently disabled if any
ailment, illness or other incapacity prevents his from performing
his duties as specified in this Agreement for a period of three
consecutive months or for an aggregate of three months in any twelve
month period from the date of this Agreement.
5.2 Consequences of Termination. In the event of the
termination of this Agreement in accordance with Subparagraph 5.1 above,
Employee (or his estate) shall be entitled to Base Salary earned by his prior to
the date of termination as provided herein computed on a pro rata basis to and
including such date of termination. In addition, Employee shall also be
reimbursed for his reasonable business expenses incurred prior to the date of
termination.
6. INVENTIONS; CONFIDENTIALITY.
6.1 Definitions. For purposes of this Section 6, the following
words and phrases have the meanings ascribed to them, respectively:
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(a) "Confidential Information" means all formulas, processes,
customer lists, computer user identifiers and passwords, and
all purchasing, engineering, accounting, marketing and other
information that is proprietary to the Corporation and not
generally known or readily ascertainable by proper means,
relating to research, development, manufacture or sale of the
Corporation's products, as well as formulas, processes and
other information received by the Corporation from third
parties under an obligation of secrecy. All information
disclosed to Employee or to which Employee has access during
the period of his employment, which he has reasonable basis to
believe to be Confidential Information, or which is treated by
the Corporation as being Confidential Information, shall be
presumed to be Confidential Information.
(b) "Inventions" means all formulas, processes, discoveries,
improvements, ideas and works of authorship, whether
patentable or copyrightable or not, which Employee learns, has
access to, has a part in developing, first conceives or first
reduces to practice, alone or with others (1) that are
developed on the Corporation's time, or (2) that relate
directly to the Corporation's business or actual or
anticipated research, or (3) for which any of the
Corporation's property, including Confidential Information, is
used, or (4) that result from any of Employee's work for the
Corporation.
6.2. Disclosure and Assignment. Except as provided elsewhere
in this Agreement, Employee shall treat as for the Corporation's sole benefit
and fully and promptly disclose to the Corporation, without additional
compensation, all ideas, discoveries, inventions and improvements, whether
patentable or not, which, while the Employee is employed by the Corporation, are
made conceived or reduced to practice by Employee, alone or with others, during
or after usual working hours, either on or off the job, and Employee hereby
assigns to the Corporation all such ideas, discoveries, inventions and
improvements to be the Corporation's exclusive property.
6.3 Further Documents. Employee will acknowledge and deliver
promptly without charge all documents to the Corporation, and will do such other
acts as may be necessary in the Corporation's opinion to obtain and maintain
patents (including divisional, reissued or extended Letters Patent) or
copyrights and to vest the entire right and title in the Corporation to such
patents, copyrights and Inventions in all countries.
6.4 Confidentiality. Employee will not use or disclose any
Confidential Information, either during or after employment by the Corporation,
except as required
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by his duties to the Corporation, and Employee acknowledges and understands that
the obligation to maintain the confidentiality of the Corporation's Confidential
Information is unconditional and shall not be excused by any conduct on the part
of the Corporation except its prior voluntary disclosure of the information.
Upon termination of employment, Employee agrees that (a) all Confidential
Information, including all copies, excerpts and summaries in his possession or
control (whether prepared by the Corporation, the Employee or others), and also
all other the Corporation property, including keys, credit cards, software,
reports and the like, shall be left with the Corporation and (b) Employee will
stop use of all Confidential Information. Employee shall not at any time during
the term of this Agreement or thereafter, or in any manner, either directly or
indirectly, divulge, disclose or communicate to any person, firm or corporation
in any manner whatsoever any information concerning any matters affecting or
relating to the business of the Corporation, including without limiting the
generality of the foregoing, any of its customers, the prices it obtains or has
obtained from the sale of, or at which it sells or has sold, its products, or
any other information concerning the business of the Corporation, its manner of
operation, its plans, processes, or other data without regard to whether all of
the foregoing matters will be deemed confidential, material, or important, the
parties hereto stipulating that as between them, the same are important,
material, and confidential and gravely affect the effective and successful
conduct of the business of the Corporation, and the Corporation's good will, and
that any breach of the terms of this Section 6 shall be a material breach of
this Agreement.
6.5 Limitation; First Refusal. The obligations of Section 6.2
and 6.3 shall not apply to any ideas, discoveries, inventions and improvements
for which no equipment, supplies, facility or trade secret information of the
Corporation was used, and which was developed entirely on Employee's own time,
and (1) which does not relate (a) directly to the business of the Corporation or
(b) to the Corporation's actual or demonstrably anticipated research or
development, or (2) which does not result from any work performed by Employee
for the Corporation. Employee will, nonetheless, promptly disclose all such
ideas, discoveries, inventions and improvements to the Corporation and offer to
the Corporation the right of first refusal to enter into a license or purchase
agreement covering the subject idea, discovery, invention or improvement on
terms mutually agreed to by Employee and the Corporation. In the event the
Corporation and Employee cannot agree on terms and Employee receives an offer to
enter into a license or purchase agreement with some other party on terms more
favorable to that other party than the terms offered to the Corporation, then
the Corporation shall have the right and Employee shall have the obligation to
offer to the Corporation the idea, discovery, invention or improvement on such
favorable terms. When such an offer is made to the Corporation pursuant to the
preceding sentence, it must be accepted by the Corporation within thirty (30)
days; or if not accepted, the right of first refusal hereunder as to that offer
shall terminate.
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NOTICE: SECTION 6 HEREOF REQUIRES EMPLOYEE TO ASSIGN RIGHTS TO
INVENTIONS TO THE CORPORATION OR ITS SUCCESSORS. MINNESOTA STATUTES SS.181.78
LIMITS THE SCOPE OF AGREEMENTS REQUIRING THE INVENTIONS BE ASSIGNED TO
EMPLOYERS. THE STATUTE STATES THAT SUCH ASSIGNMENT AGREEMENTS DO NOT APPLY:
"TO AN INVENTION FOR WHICH NO EQUIPMENT, SUPPLIES, FACILITY OR
TRADE SECRET INFORMATION OF THE EMPLOYER WAS USED AND WHICH
WAS DEVELOPED ENTIRELY ON THE EMPLOYEE'S OWN TIME, AND (1)
WHICH DOES NOT RELATE (a) DIRECTLY TO THE BUSINESS OF THE
EMPLOYER OR (b) TO THE EMPLOYER'S ACTUAL OR DEMONSTRABLY
ANTICIPATED RESEARCH OR DEVELOPMENT, OR (2) WHICH DOES NOT
RESULT FROM ANY WORK PERFORMED BY THE EMPLOYEE FOR THE
EMPLOYER."
PLEASE NOTE THAT SECTION 6 OF THIS AGREEMENT USES THESE STATUTORY TERMS
TO DEFINE THE INVENTIONS WHICH ARE NOT AUTOMATICALLY ASSIGNED TO THE CORPORATION
BUT INSTEAD ARE SUBJECT TO A RIGHT OF FIRST REFUSAL IN FAVOR OF THE CORPORATION.
6.6. Assistance to the Corporation. Employee shall give the
Corporation, at the Corporation's expense, all assistance the Corporation
reasonably requires to perfect, protect, and exercise the rights to all ideas,
discoveries, inventions or improvements acquired by the Corporation pursuant to
the assignment provisions or the right of first refusal provisions of this
Section 6.
6.7 Remedies. The Employee's obligations set forth in Section
6 of this Agreement shall continue to be binding upon Employee, notwithstanding
the termination of his employment with the Corporation for any reason
whatsoever. Such obligations shall be deemed and construed as separate
agreements independent of any other provisions of this Agreement. The existence
of any claim or cause of action by Employee against the Corporation, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Corporation or any or all of such obligations. It is
expressly agreed that the remedy at law for the breach of any such obligation is
inadequate and that temporary and permanent injunctive relief shall be available
to prevent the breach or any threatened breach thereof, without the necessity of
proof of actual damages.
7. NOTICES. Any notices to be given hereunder by either party to the
other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid, with return receipt requested.
Personal delivery to the Corporation shall mean personal delivery to the Chief
Executive Officer of the Corporation. Mailed notices shall be addressed to the
respective addresses shown below. Either party may change its address for notice
by giving written notice according to the terms of this Section 7.
(a) If to Employee:
Xxxxx X. Xxxxxx
00000 00xx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxx 00000
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(b) If to the Corporation:
Rochester Medical Corporation
Xxx Xxxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Chairman of the Board
8. GENERAL PROVISIONS.
8.1 Law Governing. This Agreement shall be governed by and
construed according to the laws of the State of Minnesota.
8.2 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or future laws
effective during the term hereof, such provision shall be fully severable and
this Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforce- able provision or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid, or
unenforceable provision there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and still be legal, valid or
enforceable.
8.3 Entire Agreement. This Agreement sets forth the entire
understanding of the parties and supersedes all prior agreements or
understandings, whether written or oral, with respect to the subject matter
hereof. No terms, conditions, warranties, other than those contained herein, and
no amendments or modifications hereto shall be binding unless made in writing
and signed by the parties hereto.
8.4 Binding Effect. This Agreement shall extend to and be
binding upon and inure to the benefit of the parties hereto, their respective
heirs, representatives, successors and assigns. This Agreement may not be
assigned by Employee.
8.5 Waiver. The waiver by either party hereto of a breach of
any term or provision of this Agreement shall not operate or be construed as a
waiver of a subsequent breach of the same provision by any party or of the
breach of any other term or provision of this Agreement.
8.7 Titles. Titles of the paragraphs herein are used solely
for convenience and shall not be used for interpretation or construing any word,
clause, paragraph, or provision of this Agreement.
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8.8 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
8.9 Merger. This Agreement merges and supersedes any and all
prior negotiations or agreements between the Employee and the Corporation.
IN WITNESS WHEREOF, the Corporation and Employee have executed this
Agreement as of the date and year first written above.
"Employee" Rochester Medical Corporation
By:
----------------------------------- -----------------------------------
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx,
Chief Executive Officer
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