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EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
this 1st day of December 1997, by and between MICRO THERAPEUTICS, INC., a
Delaware corporation (the "Company"), and XXXXXX X. XXXXXXX, an individual (the
"Employee").
R E C I T A L
The Company desires to employ Employee in the capacity hereinafter
stated, and the Employee desires to enter into the employ of the Company in that
capacity for the period and pursuant to the terms and conditions set forth
herein.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the Company and the Employee,
intending to be legally bound, hereby agree as follows:
1. EMPLOYMENT. The Company hereby employs the Employee as the Chief
Financial Officer, and Employee accepts such employment and agrees to devote all
of his efforts and skills diligently and on such basis as shall be assigned to
him by the Company as provided herein in performing his duties hereunder for the
benefit of the Company.
2. TERM. The term of the Employee's employment hereunder shall be for a
period of eighteen months (18), commencing on the date of this Agreement,
subject to earlier termination as hereafter specified. Thereafter, Employee will
continue employment as an "at will" employee of the Company.
3. POSITION AND DUTIES.
3.1 SERVICE WITH THE COMPANY. During the term of this Agreement,
the Employee agrees to perform such duties and on such basis as shall be
assigned to him from time to time by the Company's Chief Executive Officer (the
"CEO"), the Board of Directors of the Company; such duties, however, to be
commensurate with the Employee's position as the Chief Financial Officer.
3.2 NO CONFLICTING DUTIES. During the term hereof, the Employee
shall not serve as an officer, director, employee, consultant or advisor to any
other business; provided, however, that the Employee may serve as a director of
another corporation so long as (i) such corporation does not compete, directly
or indirectly, with the Company or any of its Affiliates (as defined in Section
8.7), (ii) such services do not adversely effect Employee's ability to perform
his duties under this Agreement, and (iii) such service is first approved by the
Board of Directors of the Company. The Employee hereby confirms that he is under
no contractual commitments inconsistent with his obligations set forth in this
Agreement, and agrees that during the term of this Agreement he will not render
or perform services, or enter into any contract to do so, for any other
corporation, firm, entity
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or person which are inconsistent with the provisions of this Agreement.
4. COMPENSATION.
4.1 BASE SALARY. As compensation for all services to be rendered
by the Employee under this Agreement, the Company shall pay to the Employee a
base annual salary of One Hundred Thirty-five Thousand Dollars ($135,000) (the
"Base Salary"), which shall be paid on a regular basis in accordance with the
Company's normal payroll procedures and policies. The amount of the Base Salary
shall be reviewed annually by the Board of Directors, and the Company's Board of
Directors shall determine, in its sole discretion, whether Employee's Base
Salary shall be increased, such determination to be made on the basis of an
evaluation of the Employee's performance, the performance of the Company and
such other factors as the Board of Directors deem appropriate.
4.2 INCENTIVE COMPENSATION PLANS.
(i) GENERAL TERMS. Commencing the date hereof, Employee
shall become eligible to participate in an incentive compensation plan as
specifically provided for herein for 1998 and as later agreed upon for future
years based upon the plan developed by the Company and Employee. All amounts to
which Employee may be entitled under such incentive compensation plan shall be
subject to the provisions of Section 5 below with respect to the effect of any
termination of employment on compensation of the Employee and to the provisions,
rules and regulations of any such plan.
(ii) PAYMENT OF BONUSES. The Company shall pay the bonuses
provided in this Section 4.2 on a quarterly basis forty-five (45) days following
the end of each calendar quarter.
(iii) INCENTIVE STOCK OPTION. Concurrent herewith, the
Company shall grant Employee an incentive stock option to purchase Fifty
Thousand (50,000) shares of the Company's Common Stock pursuant to the terms and
conditions of that certain Incentive Stock Option Agreement of even date
herewith, at an exercise price of Five and 75/100 Dollars ($5.75) per share, of
which twenty-five percent (25%) of such options shall vest on December 1, 1998
and 1,042 Shares shall vest in equal monthly installments over the next three
years, subject to the provisions of such Incentive Stock Option Agreement until
1,030 Shares vest on December 1, 2001.
4.3 PARTICIPATION IN BENEFIT PLANS. Employee shall be entitled to
participate in all employee benefit plans or programs generally available to
employees of the Company, to the extent that his position, title, tenure,
salary, age, health and other qualifications make him eligible to participate
therein.
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4.4 EXPENSES. In accordance with the Company's policies
established from time to time, the Company will pay or reimburse the Employee
for all reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the presentment of
appropriate vouchers, including reimbursement of travel expenses, provided that
such travel expenses are approved in advance by the Company.
5. COMPENSATION UPON THE TERMINATION OF THE EMPLOYEE'S EMPLOYMENT BY THE
COMPANY.
5.1 VOLUNTARY TERMINATION. In the event that the Employee ceases
to be employed by the Company by reason of a voluntary termination by Employee
pursuant to Section 6.5 below, then he shall not be entitled to any compensation
or any other sum other than the portion of his then current Base Salary which
has accrued through his date of termination and Employee shall forfeit any
Performance Bonus to which the Employee would, but for such termination of
employment, be entitled as of the date of termination. All payments required to
be made by the Company to the Employee pursuant to this Section 5.1 shall be
paid on a regular basis in accordance with the Company's normal payroll
procedures and policies.
5.2 INVOLUNTARY TERMINATION FOR CAUSE. In the event that the
Employee ceases to be employed by the Company by reason of the termination of
Employee's employment by the Company pursuant to Section 6.1, 6.2 or 6.3 below,
then he shall not be entitled to any compensation, nor shall the Company have
any obligation to pay any sum or have any liability to Employee whether as
compensation for his services or as a result of such termination of employment,
other than (i) the portion of his then current Base Salary which has accrued
through his date of termination, and (ii) only in the event of the termination
of Employee's employment pursuant to Section 6.1 or 6.2, Employee shall receive
that portion of the Performance Bonus to which the Employee would have been
entitled to if he remained in employment through the end of the current quarter
multiplied by a fraction the numerator of which is the number of full months
Employee was employed by the Company for such quarter and the denominator is
three. All payments required to be made by the Company to the Employee pursuant
to this Section 5.2 shall be paid in accordance with the Company's normal
payroll procedures and policies.
5.3 INVOLUNTARY TERMINATION WITHOUT CAUSE. In the event that the
Employee ceases to be employed by the Company by reason of the involuntary
termination of Employee by the Company without Cause pursuant to Section 6.4
below, Employee shall not be entitled to any compensation, nor shall the Company
have any obligation to pay any sum or have any liability to Employee, whether as
compensation for his services or as a result of such termination of employment,
other than (i) the portion of his then current Base Salary which has accrued
through his date of termination, and (ii) Employee shall receive that portion of
the Performance Bonus to which Employee would have been entitled to if he
remained in employment through the end of the then current calendar quarter
multiplied by a fraction the numerator of which is the number of full months
Employee was employed by the Company for such quarter and the denominator is
three. In the event that the Employee ceases to be employed by the Company by
reason of the involuntary termination of Employee by the Company without Cause
pursuant to Section 6.4 below following a Change of Control of the Company
occurring during the first twelve months of the term of this Agreement and such
termination occurs within six months of the Change of Control, then the Company
shall pay the amounts in items (i) and (ii) above plus the Company shall pay
Employee an amount of severance of
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One Hundred Fifty Thousand Dollars ($150,000) ("Severance Amount"). All payments
required to be made by the Company to the Employee pursuant to this Section 5.3
shall be paid in a single payment at the time of such termination on a basis in
accordance with the Company's normal payroll procedures and policies.
6. TERMINATION PRIOR TO EXPIRATION OF THE TERM.
6.1 DISABILITY. Employee's employment shall terminate
immediately, without notice, upon the Employee's becoming totally disabled. For
purposes of this Agreement, the term "totally disabled" or "total disability"
means an inability of Employee, due to a physical or mental illness, injury or
impairment, to perform a substantial portion of his duties for a period of 90 or
more days during any twelve month period hereunder, as determined by the
Company's Board of Directors.
6.2 DEATH OF EMPLOYEE. Employee's employment shall terminate
immediately, without notice, upon the death of Employee.
6.3 TERMINATION FOR CAUSE. The Company may terminate Employee's
employment at any time for "Cause" (as hereinafter defined) immediately upon
written notice to Employee. As used herein, the term "Cause" shall mean Employee
(i) commits a material breach of his covenants under this Agreement; (ii)
commits an action that (A) under applicable law or government regulations, could
either be held to constitute the commission of any felony, or a misdemeanor
involving moral turpitude, or subject the Company to significant civil
liabilities or penalties, (B) in the reasonable judgment of the CEO or Board of
Directors of the Company could materially adversely affect, or has materially
adversely affected, the reputation of the Company or any Affiliate, or the
relationship of the Company with any client or customer or any government
agency; or (iii) has refused or failed to perform any of his material duties to
the reasonable satisfaction of the CEO or the Board of Directors of the Company
and such refusal or failure has continued after Employee has received at least
one (1) written warning specifically advising the Employee of such failure or
refusal and the remedial action which are necessary to be taken by him and he
has been given a reasonable time period after such warning to take such remedial
action.
6.4 TERMINATION WITHOUT CAUSE. The Company may terminate
Employee's employment without Cause immediately upon written notice to Employee.
6.5 VOLUNTARY TERMINATION. Employee may terminate his employment
for any reason or no reason at any time upon thirty (30) days' prior written
notice to the Company's CEO; provided, however, that, at the CEO's sole election
the effective date of such termination may be shortened to any date between the
fifth (5th) and the thirtieth (30th) day following the date of the Employee's
notice of termination hereunder.
7. ASSIGNMENT. This Agreement shall not be assignable, in whole or in
part, by either party without the written consent of the other party, except
that the Company may, without the consent of the Employee, assign its rights and
obligations under this Agreement to an Affiliate or to any corporation, firm or
other business entity (i) with or into which the Company may merge or
consolidate, or (ii) to which the Company may sell or transfer all or
substantially all of its assets. After any such assignment by the Company, the
Company shall be discharged from all further liability hereunder and such
assignee shall thereafter be deemed to be the Company for the purposes of all
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provisions of this Agreement including this Section 7.
8. MISCELLANEOUS.
8.1 GOVERNING LAW. This Agreement is made under and shall be
governed by and construed in accordance with the laws of the State of
California.
8.2 PRIOR AGREEMENTS. This Agreement together with the employment
letter from the Company to Employee and the Employee's Confidentiality Agreement
contain the entire agreement of the parties relating to the subject matter
hereof and supersedes all agreements and understanding with respect to such
subject matter not described herein, and the parties hereto have made no other
agreements, representations or warranties relating to the subject matter of this
Agreement which are not set forth herein.
8.3 WITHHOLDING TAXES. The Company may withhold from any salary
and benefits payable under this Agreement, including, without limitation, the
Shares to be delivered hereunder, all federal, state, city or other taxes or
amounts as shall be required to be withheld pursuant to any law or governmental
regulation or ruling.
8.4 AMENDMENTS. No amendment or modification of this Agreement
shall be deemed effective unless made in writing signed by the parties hereto.
8.5 NO WAIVER. No term or condition of this Agreement shall be
deemed to have been waived nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
8.6 SEVERABILITY. To the extent any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted herefrom and
the remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect. In furtherance and not in limitation of
the foregoing, should the duration or geographical extent of, or business
activities covered by any provision of this Agreement be in excess of that which
is valid and enforceable under applicable law, then such provision shall be
construed to cover only the maximum duration, extent or activities which may be
validly and enforceably covered under applicable law. The Employee acknowledges
the uncertainty of the law in this respect and expressly stipulates that this
Agreement shall be given the construction which renders its provisions valid and
enforceable to the maximum extent (not exceeding its express terms) possible
under applicable law.
8.7 DEFINITIONS. As used in this Agreement, the term "Affiliate"
means any corporation, association or other business entity of which more than
50% of the total voting power of shares of stock entitled to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by the Company. The term "monthly Base
Salary" shall refer to an amount equal to one-twelfth of Employee's annual Base
Salary. Term "Change of Control" as used in Section 5.3 shall mean (i) the
acquisition, directly or indirectly, by any person or group (within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of the
beneficial ownership of more than fifty percent (50%) of the outstanding
securities of the
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Company; (ii) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state in which the Company is incorporated; (iii) the sale, transfer
or other disposition of all or substantially all of the assets of the Company;
(iv) a complete liquidation or dissolution of the Company; or (v) any reverse
merger in which the Company is the surviving entity but in which securities
possessing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to such
merger.
8.8 COUNTERPART EXECUTION. This Agreement may be executed by facsimile
and in counterparts, each of which shall be deemed an original and all of which
when taken together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year set forth above.
"Company"
MICRO THERAPEUTICS, INC. a Delaware corporation
By: /s/ XXXXXX XXXXXXX
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Xxxxxx Xxxxxxx, Chief Executive Officer
"Employee"
/s/ XXXXXX XXXXXXX
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Xxxxxx X. Xxxxxxx
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