EXHIBIT 10.2
CHANGE IN CONTROL AGREEMENT
February 1, 1999
B. Xxxxxxxx Xxxx, PhD.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxx 00000
Dear Xx. Xxxx:
You are presently the Vice President of Research and Development of
Bio-Vascular, Inc., a Minnesota corporation (the "Company"). The Company
considers the establishment and maintenance of a sound and vital management to
be essential to protecting and enhancing the best interests of the Company and
its shareholders. In this connection, the Company recognizes that, as is the
case with many publicly held corporations, the possibility of a Change in
Control may arise and that such possibility and the uncertainty and questions
which it may raise among management may result in the departure or distraction
of management personnel to the detriment of the Company and its shareholders.
Accordingly, the Board has determined that appropriate steps should be taken to
minimize the risk that Company management will depart prior to a Change in
Control, thereby leaving the Company without adequate management personnel
during such a critical period, and that appropriate steps also be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management to their assigned duties without distraction in
circumstances arising from the possibility of a Change in Control. In
particular, the Board believes it important, should the Company or its
shareholders receive a proposal for transfer of control, that you be able to
continue your management responsibilities without being influenced by the
uncertainties of your own personal situation.
The Board recognizes that continuance of your position with the Company involves
a substantial commitment to the Company in terms of your personal life and
professional career and the possibility of foregoing present and future career
opportunities, for which the Company receives substantial benefits. Therefore,
to induce you to remain in the employ of the Company, this Agreement, which has
been approved by the Board, sets forth the benefits which the Company agrees
will be provided to you in the event your employment with the Company is
terminated in connection with a Change in Control under the circumstances
described below.
The following terms will have the meaning set forth below unless the context
clearly requires otherwise. Terms defined elsewhere in this Agreement will have
the same meaning throughout this Agreement.
ARTICLE I.
DEFINITIONS
-----------
1. "Affiliate" means (i) any corporation at least a majority of whose
outstanding securities ordinarily having the right to vote at elections
of directors is owned directly or indirectly by
B. Xxxxxxxx Xxxx
Page 2
the Company or (ii) any other form of business entity in which the
Company, by virtue of a direct or indirect ownership interest, has the
right to elect a majority of the members of such entity's governing
body.
2. "Agreement" means this letter agreement as amended, extended or renewed
from time to time in accordance with its terms.
3. "Board" means the board of directors of the Company duly qualified and
acting at the time in question. On and after the date of a Change in
Control, any duty of the Board in connection with this Agreement is
nondelegable and any attempt by the Board to delegate any such duty is
ineffective.
4. "Cause" means:
a. your gross misconduct;
b. your willful and continued failure to perform substantially your
duties with the Company (other than any such failure (1)
resulting from your Disability or incapacity due to bodily
injury or physical or mental illness or (2) relating to changes
in your duties after a Change in Control which constitute Good
Reason) after a demand for substantial performance is delivered
to you by the chair of the Board which specifically identifies
the manner in which you have not substantially performed your
duties and provides for a reasonable period of time within which
you may take corrective actions; or
c. your conviction (including a plea of nolo contendere) of
willfully engaging in illegal conduct constituting a felony or
gross misdemeanor under federal or state law which is materially
and demonstrably injurious to the Company or which impairs your
ability to perform substantially your duties for the Company.
An act or failure to act will be considered "gross" or "willful" for
this purpose only if done, or omitted to be done, by you in bad faith
and without reasonable belief that it was in, or not opposed to, the
best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Company's
board of directors (or a committee thereof) or based upon the advice of
counsel for the Company will be conclusively presumed to be done, or
omitted to be done, by you in good faith and in the best interests of
the Company. It is also expressly understood that your attention to
matters not directly related to the business of the Company will not
provide a basis for termination for Cause so long as the Board did not
expressly disapprove in writing of your engagement in such activities
either before or within a reasonable period of time after the Board knew
or could reasonably have known that you engaged in those activities.
Notwithstanding the foregoing, you may not be terminated for Cause
unless and until there has been delivered to you a copy of a resolution
duly adopted by the affirmative vote of not less than a majority of the
entire membership of the Board at a meeting of the Board called and held
for the purpose (after reasonable notice to you and an opportunity for
you, together with your
B. Xxxxxxxx Xxxx
Page 3
counsel, to be heard before the Board), finding that in the good faith
opinion of the Board you were guilty of the conduct set forth above in
clauses a., b. or c. of this definition and specifying the particulars
thereof in detail.
5. "Change in Control" means any of the following:
a. the sale, lease, exchange or other transfer, directly or
indirectly, of all or substantially all of the assets of the
Company in one transaction or in a series of related
transactions, to any Person;
b. the approval by the shareholders of the Company of any plan or
proposal for the liquidation or dissolution of the Company, as
the case may be;
c. any Person is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
(1) 20 percent or more, but not more than 50 percent, of the
combined voting power of the outstanding securities of the
Company ordinarily having the right to vote at elections of
directors, unless the transaction resulting in such ownership
has been approved in advance by the "continuity directors" or
(2) more than 50 percent of the combined voting power of the
outstanding securities of the Company ordinarily having the
right to vote at elections of directors (regardless of any
approval by the continuity directors);
d. a merger or consolidation to which the Company is a party if the
shareholders of the Company immediately prior to the effective
date of such merger or consolidation have, solely on account of
ownership of securities of the Company at such time, "beneficial
ownership" (as defined in Rule 13d-3 under the Exchange Act)
immediately following the effective date of such merger or
consolidation of securities of the surviving company
representing (1) 50 percent or more, but not more than 80
percent, of the combined voting power of the surviving
corporation's then outstanding securities ordinarily having the
right to vote at elections of directors, unless such merger or
consolidation has been approved in advance by the continuity
directors, or (2) less than 50 percent of the combined voting
power of the surviving corporation's then outstanding securities
ordinarily having the right to vote at elections of directors
(regardless of any approval by the continuity directors);
e. the continuity directors cease for any reason to constitute at
least a majority the Board; or
f. a change in control of a nature that is determined by outside
legal counsel to the Company, in a written opinion specifically
referencing this provision of the Agreement, to be required to
be reported (assuming such event has not been "previously
reported") pursuant to section 13 or 15(d) of the Exchange Act,
whether or not the Company is then subject to such reporting
requirement, as of the effective date of such change in control.
B. Xxxxxxxx Xxxx
Page 4
For purposes of this Section 1(e), a "continuity director" means any
individual who is a member of the Board on January 16, 1998, while he or
she is a member of the Board, and any individual who subsequently
becomes a member of the Board whose election or nomination for election
by the Company's shareholders was approved by a vote of at least a
majority of the directors who are continuity directors (either by a
specific vote or by approval of the proxy statement of the Company in
which such individual is named as a nominee for director without
objection to such nomination).
6. "Code" means the Internal Revenue Code of 1986, as amended. Any
reference to a specific provision of the Code includes a reference to
such provision as it may be amended from time to time and to any
successor provision.
7. "Company" means Bio-Vascular, Inc. and/or any Affiliate.
8. "Confidential Information" means information which is proprietary to the
Company or proprietary to others and entrusted to the Company, whether
or not trade secrets. It includes information relating to business plans
and to business as conducted or anticipated to be conducted, and to past
or current or anticipated products or services. It also includes,
without limitation, information concerning research, development,
purchasing, accounting, marketing and selling. All information which you
have a reasonable basis to consider confidential is Confidential
Information, whether or not originated by you and without regard to the
manner in which you obtain access to that and any other proprietary
information.
9. "Date of Termination" following a Change in Control (or prior to a
Change in Control if your termination was either a condition of the
Change in Control or was at the request or insistence of any Person
related to the Change in Control) means:
a. if your employment is to be terminated for Disability, 30 days
after Notice of Termination is given (provided that you have not
returned to the performance of your duties on a full-time basis
during such 30-day period);
b. if your employment is to be terminated by the Company for Cause
or by you for Good Reason, the date specified in the Notice of
Termination, which date may not be less than 30 days or more
than 60 days after the date on which the Notice of Termination
is given unless you and the Company otherwise expressly agree;
c. if your employment is to be terminated by the Company for any
reason other than Cause, Disability, death or Retirement, the
date specified in the Notice of Termination, which in no event
may be a date earlier than 90 days after the date on which a
Notice of Termination is given, unless an earlier date has been
expressly agreed to by you in writing either in advance of, or
after; receiving such Notice of Termination; or
B. Xxxxxxxx Xxxx
Page 5
d. if your employment is terminated by reason of death or
Retirement, the date of death or Retirement, respectively.
In the case of termination by the Company of your employment for Cause,
if you have not previously expressly agreed in writing to the
termination, then within 30 days after receipt by you of the Notice of
Termination with respect thereto, you may notify the Company that a
dispute exists concerning the termination, in which event the Date of
Termination will be the date set either by mutual written agreement of
the parties or by the judge or arbitrators in a proceeding as provided
in Section 13 of this Agreement. During the pendency of any such
dispute, you will continue to make yourself available to provide
services to the Company and the Company will continue to pay you your
full compensation and benefits in effect immediately prior to the date
on which the Notice of Termination is given (without regard to any
changes to such compensation or benefits which constitute Good Reason)
and until the dispute is resolved in accordance with Section 13 of this
Agreement. You will be entitled to retain the full amount of any such
compensation and benefits without regard to the resolution of the
dispute unless the judge or arbitrators decide(s) that your claim of a
dispute was frivolous or advanced by you in bad faith.
10. "Disability" means a disability as defined in the Company's long-term
disability plan as in effect immediately prior to the Change in Control
or; in the absence of such a plan, means permanent and total disability
as defined in section 22(e)(3) of the Code.
11. "Exchange Act" means the Securities Exchange Act of 1934, as amended.
Any reference to a specific provision of the Exchange Act or to any rule
or regulation thereunder includes a reference to such provision as it
may be amended from time to time and to any successor provision.
12. "Good Reason" means:
a. change in your status, position(s), duties or responsibilities
as an executive of the Company as in effect immediately prior to
the Change in Control which, in your reasonable judgment, is an
adverse change (other than, if applicable, any such change
directly attributable to the fact that the Company is no longer
publicly owned) except in connection with the termination of
your employment for Cause, Disability or Retirement or as a
result of your death or by you other than for Good Reason;
b. a reduction by the Company in your base salary (or an adverse
change in the form or timing of the payment thereof) as in
effect immediately prior to the Change in Control or as
thereafter increased;
c. the failure by the Company to continue in effect any Plan in
which you (and/or your family) are eligible to participate at
any time during the 90-day period immediately preceding the
Change in Control (or Plans providing you (and/or your family)
with at least substantially similar benefits) other than as a
result of the normal expiration
B. Xxxxxxxx Xxxx
Page 6
of any such Plan in accordance with its terms as in effect
immediately prior to the 90-day period immediately preceding the
time of the Change in Control, or the taking of any action, or
the failure to act, by the Company which would adversely affect
your (and/or your family's) continued eligibility to participate
in any of such Plans on at least as favorable a basis to you
(and/or your family) as is the case on the date of the Change in
Control or which would materially reduce your (and/or your
family's) benefits in the future under any of such Plans or
deprive you (and/or your family) of any material benefit enjoyed
by you (and/or your family) at the time of the Change in
Control;
d. the Company's requiring you to be based more than 30 miles from
where your office is located immediately prior to the Change in
Control, except for required travel on the Company's business,
and then only to the extent substantially consistent with the
business travel obligations which you undertook on behalf of the
Company during the 90-day period immediately preceding the
Change in Control (without regard to travel related to or in
anticipation of the Change in Control);
e. the failure by the Company to obtain from any Successor the
assent to this Agreement contemplated by Section 6 of this
Agreement;
f. any purported termination by the Company of your employment
which is not properly effected pursuant to a Notice of
Termination and pursuant to any other requirements of this
Agreement, and for purposes of this Agreement, no such purported
termination will be effective;
g. any refusal by the Company to continue to allow you to attend to
matters or engage in activities not directly related to the
business of the Company which, at any time prior to the Change
in Control, you were not expressly prohibited in writing by the
Board from attending to or engaging in; or
h. your termination of your employment with the Company for any
reason other than death, Disability or Retirement during the
twelfth (12th) month following the month in which a Change in
Control occurs.
13. "Highest Monthly Compensation" means one-twelfth of the highest amount
of your compensation for any 12 consecutive calendar-month period during
the 36 consecutive calendar-month period prior to the month that
includes the Date of Termination. For purposes of this definition,
"compensation" means the amount reportable by the Company, for federal
income tax purposes, as wages paid to you by the Company, increased by
the amount of contributions made by the Company with respect to you
under any qualified cash or deferred arrangement or cafeteria plan that
is not then includable in your income by reason of the operation of
section 402(a)(8) or section 125 of the Code, and increased further by
any other compensation deferred for any reason.
B. Xxxxxxxx Xxxx
Page 7
14. "Notice of Termination" means a written notice given on or after the
date of a Change in Control (unless your termination before the date of
the Change in Control was either a condition of the Change in Control or
was at the request or insistence of any Person related to the Change in
Control) which indicates the specific termination provision in this
Agreement pursuant to which the notice is given. Any purported
termination by the Company or by you for Good Reason on or after the
date of a Change in Control (or before the date of a Change in Control
if your termination was either a condition of the Change in Control or
was at the request or insistence of any Person related to the Change in
Control) must be communicated by written Notice of Termination to be
effective; provided, that your failure to provide Notice of Termination
will not limit any of your rights under this Agreement except to the
extent the Company demonstrates that it suffered material actual damages
by reason of such failure.
15. "Person" means any individual, corporation, partnership, group,
association or other "person," as such term is used in section 14(d) of
the Exchange Act, other than the Company, any Affiliate or any employee
benefit plan(s) sponsored by the Company or an Affiliate.
16. "Plan" means any compensation plan, program, policy or agreement (such
as a stock option, restricted stock plan or other equity-based plan),
any bonus or incentive compensation plan, program, policy or agreement,
any employee benefit plan, program, policy or agreement (such as a
thrift, pension, profit sharing, medical, dental, disability, accident,
life insurance, relocation, salary continuation, expense reimbursements,
vacation, fringe benefits, office and support staff plan or policy) or
any other plan, program, policy or agreement of the Company intended to
benefit employees (and/or their families) generally, management
employees (and/or their families) as a group or you (and/or your family)
in particular.
17. "Retirement" means termination of employment on or after the day on
which you attain the age of 65.
18. "Successor" means any Person that succeeds to, or has the practical
ability to control (either immediately or solely with the passage of
time), the Company's business directly, by merger, consolidation or
other form of business combination, or indirectly, by purchase of the
Company's outstanding securities ordinarily having the right to vote at
the election of directors or, all or substantially all of its assets or
otherwise.
B. Xxxxxxxx Xxxx
Page 8
ARTICLE II.
TERM OF AGREEMENT
-----------------
This Agreement is effective immediately and will continue in effect until April
20, 1999; provided, however; that commencing on April 20, 1999 and each April 20
thereafter, the term of this Agreement will automatically be extended for 12
additional months beyond the expiration date otherwise then in effect, unless at
least 90 calendar days prior to any such April 20, the Company or you has given
notice that this Agreement will not be extended; and, provided, further; that if
a Change in Control has occurred during the term of this Agreement, this
Agreement will continue in effect beyond the termination date then in effect for
a period of 12 months following the month during which the Change in Control
occurs or, if later, until the date on which the Company's obligations to you
arising under or in connection with this Agreement have been satisfied in full.
ARTICLE III.
CHANGE IN CONTROL BENEFITS
--------------------------
1. Benefits upon a Change in Control Termination. You will become entitled
to the payments and benefits described in clauses (a) and (b) of this
Article III., subject to the limitations described in clause (c) of this
Article III., and to the benefit of the provisions described in clause
(d), if and only if (i) your employment with the Company is terminated
for any reason other than death, Cause, Disability or Retirement, or if
you terminate your employment with the Company for Good Reason; and (ii)
the termination occurs either within the period beginning on the date of
a Change in Control and ending on the last day of the twelfth month that
begins after the month during which the Change in Control occurs or
prior to a Change in Control if your termination was either a condition
of the Change in Control or was at the request or insistence of a Person
related to the Change in Control.
a. Cash Payment. Within five business days following the Date of
Termination or, if later, within five business days following
the date of the Change in Control, the Company will make a
lump-sum cash payment to you in an amount equal to the product
of (i) your Highest Monthly Compensation multiplied by (ii) 36.
b. Welfare Plans. The Company will maintain in full force and
effect, for the continued benefit of you and your dependents for
a period terminating 36 months after the Date of Termination,
all insured and self-insured employee welfare benefit Plans
(including, without limitation, medical, life, dental, vision
and disability plans) in which you were eligible to participate
at any time during the 90-day period immediately preceding the
Change in Control, provided that your continued participation is
possible under the general terms and provisions of such Plans
and any applicable funding media and without regard to any
discretionary amendments to such Plans by the Company following
the Change in Control (or prior to the Change in Control if
amended as a condition or at the request or insistence of a
Person (other than the Company) related to the Change in
Control) and provided that you continue to pay an amount equal
to your regular contribution under such
B. Xxxxxxxx Xxxx
Page 9
Plans for such participation (based upon your level of benefits
and employment status most favorable to you at any time during
the 90-day period immediately preceding the Change in Control).
The continuation period under federal and state continuation
laws, to the extent applicable, will begin to run from the date
on which coverage pursuant to this clause (b) ends. If, at the
end of the 36-month period, you have not previously received or
are not then receiving equivalent benefits from a new employer
(including coverage for any pre-existing conditions), the
Company will arrange, at its sole cost and expense, to enable
you to convert your and your dependents' coverage under such
Plans to individual policies or programs upon the same terms as
executives of the Company may apply for such conversions. In the
event that your or your dependents' participation in any such
Plan is barred, the Company, at its sole cost and expense, will
arrange to have issued for the benefit of you and your
dependents individual policies of insurance providing benefits
substantially similar (on a federal, state and local income and
employment after-tax basis) to those which you otherwise would
have been entitled to receive under such Plans pursuant to this
clause (b) or; if such insurance is not available at a
reasonable cost to the Company, the Company will otherwise
provide you and your dependents equivalent benefits (on a
federal, state and local income and employment after-tax basis).
You will not be required to pay any premiums or other charges in
an amount greater than that which you would have paid in order
to participate in such Plans.
c. Limitation on Payments and Benefits. Notwithstanding anything in
this Agreement to the contrary, if any of the payments or
benefits to be made or provided in connection with this
Agreement, together with any other payments, benefits or awards
which you have the right to receive from the Company, or any
corporation which is a member of an "affiliated group" (as
defined in section 1504(a) of the Code without regard to section
1504(b) of the Code) of which the Company is a member
("Affiliate"), constitute an "excess parachute payment" (as
defined in section 280G(b) of the Code), such payments, benefits
or awards to be made or provided in connection with this
Agreement, or any other agreement between you and the Company or
its Affiliates, may be reduced, eliminated, modified or waived
to the extent necessary to prevent all, or any portion, of such
payments, benefits or awards from becoming "excess parachute
payments" and therefore subject to the excise tax imposed under
section 4999 of the Code. You will have the sole right and
discretion to determine whether the payments, benefits or awards
to be made or provided in connection with this Agreement, or any
other agreement between you and the Company, should be reduced,
whether or not such other agreement with the Company or an
Affiliate expressly addresses the potential application of
Sections 280G or 4999 of the Code (including, without
limitation, that "payments" under such agreement be reduced).
You will also have the right to designate the particular
payments, benefits or awards that are to be reduced, eliminated,
modified or waived; provided that no such adjustment will be
made if it results in additional expense to the Company in
excess of expenses the Company would have experienced if no
adjustment had been made. The determination as to whether any
such decrease in
B. Xxxxxxxx Xxxx
Page 10
the payments or benefits is necessary must be made in good faith
by legal counsel or a certified public accountant selected by
you and reasonably acceptable to the Company, and such
determination will be conclusive and binding upon you and the
Company. The Company will pay or reimburse you on demand for the
reasonable fees, costs and expenses of the counsel or accountant
selected to make the determinations under this clause (c).
2. Disposition. If, on or after the date of a Change in Control, an
Affiliate is sold, merged, transferred or in any other manner or for any
other reason ceases to be an Affiliate or all or any portion of the
business or assets of an Affiliate are sold, transferred or otherwise
disposed of and the acquiror is not the Company or an Affiliate (a
"Disposition"), and you remain or become employed by the acquiror or an
affiliate of the acquiror (as defined in this Agreement but substituting
"acquiror" for "Company") in connection with the Disposition, you will
be deemed to have terminated employment on the effective date of the
Disposition for purposes of this section unless (a) the acquiror and its
affiliates jointly and severally expressly assume and agree, in a manner
that is enforceable by you, to perform the obligations of this Agreement
to the same extent that the Company would be required to perform if the
Disposition had not occurred and (b) the Successor guarantees, in a
manner that is enforceable by you, payment and performance by the
acquiror.
ARTICLE IV.
INDEMNIFICATION
---------------
Following a Change in Control, the Company will indemnify and advance expenses
to you to the full extent permitted by law and the Company's articles of
incorporation and bylaws for damages, costs and expenses (including, without
limitation, judgments, fines, penalties, settlements and reasonable fees and
expenses of your counsel) incurred in connection with all matters, events and
transactions relating to your service to or status with the Company or any other
corporation, employee benefit plan or other entity with whom you served at the
request of the Company.
ARTICLE V.
CONFIDENTIALITY
---------------
You will not use, other than in connection with your employment with the
Company, or disclose any Confidential Information to any person not employed by
the Company or not authorized by the Company to receive such Confidential
Information, without the prior written consent of the Company; and you will use
reasonable and prudent care to safeguard and protect and prevent the
unauthorized disclosure of Confidential Information. Nothing in this Agreement
will prevent you from using, disclosing or authorizing the disclosure of any
Confidential Information: (a) which is or hereafter becomes part of the public
domain or otherwise becomes generally available to the public through no fault
of yours; (b) to the extent and upon the terms and conditions that the Company
may have previously made the Confidential Information available to certain
persons; or (c) to the extent that you are required to disclose such
Confidential Information by law or judicial or administrative process.
B. Xxxxxxxx Xxxx
Page 11
ARTICLE VI.
SUCCESSORS
-----------
The Company will seek to have any Successor, by agreement in form and substance
satisfactory to you, assent to the fulfillment by the Company of the Company's
obligations under this Agreement. Failure of the Company to obtain such assent
at least three business days prior to the time a Person becomes a Successor (or
where the Company does not have at least three business days' advance notice
that a Person may become a Successor, within one business day after having
notice that such Person may become or has become a Successor) will constitute
Good Reason for termination by you of your employment. The date on which any
such succession becomes effective will be deemed the Date of Termination and
Notice of Termination will be deemed to have been given on that date. A
Successor has no rights, authority or power with respect to this Agreement prior
to a Change in Control.
ARTICLE VII.
OTHER PROVISIONS
----------------
1. Fees and Expenses. The Company, upon demand, will pay or reimburse you
for all reasonable legal fees, court costs, experts' fees and related
costs and expenses incurred by you in connection with any actual,
threatened or contemplated litigation or legal, administrative,
arbitration or other proceeding relating to this Agreement to which you
are or reasonably expect to become a party, whether or not initiated by
you, including, without limitation: (a) all such fees and expenses, if
any, incurred in contesting or disputing any such termination; or (b)
your seeking to obtain or enforce any right or benefit provided by this
Agreement; provided, however; you will be required to repay (without
interest) any such amounts to the Company to the extent that a court
issues a final and non-appealable order setting forth the determination
that the position taken by you was frivolous or advanced by you in bad
faith.
2. Binding Agreement. This Agreement inures to the benefit of, and is
enforceable by, you, your personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
If you die while any amount would still be payable to you under this
Agreement if you had continued to live, all such amounts, unless
otherwise provided in this Agreement, will be paid in accordance with
the terms of this Agreement to your devisee, legatee or other designee
or; if there be no such designee, to your estate.
3. No Mitigation. You will not be required to mitigate the amount of any
payments or benefits the Company becomes obligated to make or provide to
you in connection with this Agreement by seeking other employment or
otherwise. The payments or benefits to be made or provided to you in
connection with this Agreement may not be reduced, offset or subject to
recovery by the Company by any payments or benefits you may receive from
other employment or otherwise.
B. Xxxxxxxx Xxxx
Page 12
4. No Setoff. The Company has no right to setoff payments or benefits owed
to you under this Agreement against amounts owed or claimed to be owed
by you to the Company under this Agreement or otherwise.
5. Taxes. All payments and benefits to be made or provided to you in
connection with this Agreement will be subject to required withholding
of federal, state and local income, excise and employment-related taxes.
6. Notices. For the purposes of this Agreement, notices and all other
communications provided for in, or required under, this Agreement must
be in writing and will be deemed to have been duly given when personally
delivered or when mailed by United States registered or certified mail,
return receipt requested, postage prepaid and addressed to each party's
respective address set forth on the first page of this Agreement
(provided that all notices to the Company must be directed to the
attention of the chair of the Board), or to such other address as either
party may have furnished to the other in writing in accordance with
these provisions, except that notice of change of address will be
effective only upon receipt.
7. Disputes. If you so elect, any dispute, controversy or claim arising
under or in connection with this Agreement will be settled exclusively
by binding arbitration administered by the American Arbitration
Association in Minneapolis, Minnesota in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court
having jurisdiction; provided, that you may seek specific performance of
your right to receive payment or benefits until the Date of Termination
during the pendency of any dispute or controversy arising under or in
connection with this Agreement. The Company will be entitled to seek an
injunction or restraining order in a court of competent jurisdiction
(within or without the State of Minnesota) to enforce the provisions of
Section 5 of this Agreement.
8. Jurisdiction. Except as specifically provided otherwise in this
Agreement, the parties agree that any action or proceeding arising under
or in connection with this Agreement must be brought in a court of
competent jurisdiction in the State of Minnesota, and hereby consent to
the exclusive jurisdiction of said courts for this purpose and agree not
to assert that such courts are an inconvenient forum.
9. Related Agreements. To the extent that any provision of any other Plan
or agreement between the Company and you limits, qualifies or is
inconsistent with any provision of this Agreement, then for purposes of
this Agreement, while such other Plan or agreement remains in force, the
provision of this Agreement will control and such provision of such
other Plan or agreement will be deemed to have been superseded, and to
be of no force or effect, as if such other agreement had been formally
amended to the extent necessary to accomplish such purpose. Nothing in
this Agreement prevents or limits your continuing or future
participation in any Plan provided by the Company and for which you may
qualify, and nothing in this Agreement limits or otherwise affects the
rights you may have under any Plans or other agreements with the
Company. Amounts which are vested benefits or which
B. Xxxxxxxx Xxxx
Page 13
you are otherwise entitled to receive under any Plan or other agreement
with the Company at or subsequent to the Date of Termination will be
payable in accordance with such Plan or other agreement.
10. No Employment or Service Contract. Nothing in this Agreement is intended
to provide you with any right to continue in the employ of the Company
for any period of specific duration or interfere with or otherwise
restrict in any way your rights or the rights of the Company, which
rights are hereby expressly reserved by each, to terminate your
employment at any time for any reason or no reason whatsoever, with or
without cause.
11. Funding and Payment. Benefits payable under this Agreement will be paid
only from the general assets of the Company. No person has any right to
or interest in any specific assets of the Company by reason of this
Agreement. To the extent benefits under this Agreement are not paid when
due to any individual, he or she is a general unsecured creditor of the
Company with respect to any amounts due. The Company with whom you were
employed immediately before your Date of Termination has primary
responsibility for benefits to which you or any other person are
entitled pursuant to this Agreement but to the extent such Company is
unable or unwilling to provide such benefits, the Company and each other
Affiliate are jointly and severally responsible therefor to the extent
permitted by applicable law. If you were simultaneously employed by more
than one Company immediately before your Date of Termination, each such
Company has primary responsibility for a portion of the benefits to
which you or any other person are entitled pursuant to this Agreement
that bears the same ratio to the total benefits to which you or such
other person are entitled pursuant to this Agreement as your base pay
from the Company immediately before your Date of Termination bears to
your aggregate base pay from all such Companies.
12. Survival. The respective obligations of, and benefits afforded to, the
Company and you which by their express terms or clear intent survive
termination of your employment with the Company or termination of this
Agreement, as the case may be, including without limitation the
provisions of Articles III, IV, V and VI and Sections 1, 4, 5, 6 and 7
of Article VII of this Agreement, will survive termination of your
employment with the Company or termination of this Agreement, as the
case may be, and will remain in full force and effect according to their
terms.
B. Xxxxxxxx Xxxx
Page 14
ARTICLE VIII.
MISCELLANEOUS
-------------
1. Modification and Waiver. No provision of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is
agreed to in a writing signed by you and the chair of the Board. No
waiver by any party to this Agreement at any time of any breach by
another party to this Agreement of, or of compliance with, any condition
or provision of this Agreement to be performed by such party will be
deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.
2. Entire Agreement. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter to this Agreement
have been made by any party which are not expressly set forth in this
Agreement.
3. Governing Law. This Agreement and the legal relations among the parties
as to all matters, including, without limitation, matters of validity,
interpretation, construction, performance and remedies, will be governed
by and construed exclusively in accordance with the internal laws of the
State of Minnesota (without regard to the conflict of laws principles of
any jurisdiction).
4. Headings. Headings are for purposes of convenience only and do not
constitute a part of this Agreement.
5. Further Acts. The parties to this Agreement agree to perform, or cause
to be performed, such further acts and deeds and to execute and deliver
or cause to be executed and delivered, such additional or supplemental
documents or instruments as may be reasonably required by the other
party to carry into effect the intent and purpose of this Agreement.
6. Severability. The invalidity or unenforceability of all or any part of
any provision of this Agreement will not affect the validity or
enforceability of the remainder of such provision or of any other
provision of this Agreement, which will remain in full force and effect.
7. Counterparts. This Agreement may be executed in several counterparts,
each of which will be deemed to be an original, but all of which
together will constitute one and the same instrument.
If this letter correctly sets forth our agreement on the subject matter
discussed above, kindly sign and return to the Company the enclosed copy of this
letter which will then constitute our agreement on this subject.
Sincerely,
BIO-VASCULAR, INC.
B. Xxxxxxxx Xxxx
Page 15
By: /s/ M. Xxxxx Xxxxxx
-------------------------------------
Name: M. Xxxxx Xxxxxx
-----------------------------------
Title: President and CEO
----------------------------------
Agreed to this 1st day of February, 1999
/s/ B. Xxxxxxxx Xxxx
-----------------------------------------
B. Xxxxxxxx Xxxx
