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EXHIBIT 10.25
[CARDIAC PATHWAYS CORPORATION LETTERHEAD]
May 18,1999
Xxxxxx X. Xxxxxxxx
0000 Xxxxxxxxx Xxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Dear Xxx:
This letter when signed by you will constitute an agreement between Cardiac
Pathways Corporation (the "Company") and you concerning your employment.
1. The Company hereby hires you and you hereby accept employment as
President and Chief Executive Officer ("CEO") of the Company.
2. It is expected that your first day of employment with the Company
will be May 24, 1999.
3. The Company agrees to pay you an annual base salary of $225,000
payable in accordance with the Company's standard payroll policy.
Your base salary will be reevaluated at least annually in
accordance with the Company's standard practices.
4. Upon approval of the Compensation Committee of the Board of
Directors, the Company shall grant you options to acquire a total
of 1,236,532 shares of the Company's Common Stock, at a per share
exercise price equal to the lower of (i) $ 1.00 or (ii) the
average trading price of the Company's common stock on the five
(5) trading days immediately prior to the date of the public
announcement of the Company's Series B Convertible Preferred
Stock Purchase Agreement. 300,000 options will be granted to you
under stock option plans currently approved by the Company's
shareholders (this grant will take place at a special meeting of
the board of directors held as soon as practicable after the date
of your hiring). The remaining stock options (936,532) will be
granted to you under a newly authorized option plan approved by
the Company's shareholders at the Closing of the Company's Series
B Convertible Preferred Stock Purchase Agreement (this grant will
take place at the first board meeting following the
aforementioned Closing of the Series B Convertible Preferred
Stock Purchase Agreement). The options will vest over a four-year
period with 25% of the total shares vesting on July 1, 2000 and
an additional 25% vesting on July 1 of 2001, 2002 and 2003,
assuming you remain a Company employee on each such date. The
option will be governed by the Company's Incentive Stock Option
Plan and your written option agreement which will follow the
Company's standard form of option agreement.
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May 18,1999
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5. Less than one month after the Closing of the Company's Series B
Convertible Preferred Stock Purchase Agreement, you will purchase
$250,000 worth of the Company's Series B Convertible Preferred
Stock according to the same terms and conditions that BankAmerica
Ventures has purchased Series B Convertible Preferred Stock. If
necessary, the Company will loan you money to help you make this
purchase. Such loan will be repayable in twelve equal quarterly
installments commencing with the third anniversary of the loan.
This loan will bear interest at 7%. Interest will be payable in
cash or can be accrued by you at your option.
6. a. The term of this Agreement shall commence on your first day
of employment and shall continue until terminated by either
party in accordance with the provisions of this Section 5.
b. This Agreement may be terminated by the Company at any time
for Justifiable Cause (as hereinafter defined) provided that
the Company shall pay you an amount equal to one month of
your then current base salary as a severance payment. For the
purpose of this Agreement, the term "Justifiable Cause" shall
include the occurrence of any of the following events: (i)
your conviction for, or plea of nolo contendere, a felony or
a crime involving moral turpitude, (ii) your commission of an
act of personal dishonesty or breach of fiduciary duty
involving personal profit in connection with the Company,
(iii) your commission of an act, or failure to act, which the
Board shall reasonably have found to have involved misconduct
or gross negligence on the part of you, in the conduct of
your duties hereunder, (iv) habitual absenteeism, alcoholism
or drug dependency that interferes with the performance of
your duties hereunder, (v) your willful and material breach
or refusal to perform your services as provided herein, (vi)
any other material breach of this Agreement or (vii) the
willful and material failure or refusal to carry out a direct
request of the Board of Directors. The payment to you of the
severance payment described in this Section 6(b) will
discharge all of the Company's obligations to you, other than
vested stock options, if any, which shall be governed by the
written stock option agreement.
c. This Agreement may be terminated by the Company at any time
without Justifiable Cause provided that the Company shall
continue to pay your then current monthly base pay as a
severance payment for a period of twelve (12) months
following the date of termination (the "Severance Period").
Any payments made pursuant to this Section 6(c) shall be
reduced to the extent you receive any other earnings from
employment or consulting, or unemployment or disability
compensation, during the Severance Period. The payment to you
of the severance payment described in this Section 6(c) will
discharge all of the Company's obligations (subject to the
provisions noted in Section 7) to you, other than vested
stock options, if any, which shall be governed by the written
stock option agreement. If such termination without
Justifiable Cause takes place in the first year of your
employment with the Company, the incentive stock option will
vest at 1/48th per full month of employment.
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May 18,1999
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d. You may terminate this Agreement at any time in which case the
Company shall have no severance or other obligations to you.
7. Notwithstanding anything set forth in this Section 7, upon your
involuntary termination of employment from the Company (for any
reason other than for Justifiable Cause) on or after an
Acquisition (as defined below), the 1,236,532 shares of Common
Stock described in Section 4 above shall be fully and immediately
exercisable. For purposes of this Section 7, an Acquisition shall
be defined as a merger, reorganization, or sale of all or
substantially all of the assets of the Company in which
shareholders of the Company immediately prior to the transaction
possess less than fifty percent (50%) of the voting stock of the
surviving entity (or its parent) immediately after the
transaction. Your Constructive Termination (as defined below)
shall be treated as an involuntary termination of employment
under this Section 7. For purposes of this Section 7, a
Constructive Termination shall mean a material reduction in
salary or benefits, a material diminution of responsibilities, a
requirement to relocate to office relocations that would increase
your one-way commute distance by more than thirty-five (35)
miles.
8. You will be eligible to participate in any insurance or other
benefit plan as may be sponsored or maintained by the Company
from time to time for its employees or executives. The Company
will provide you with life insurance coverage equal to six (6)
times your annual base salary.
9. To help you search for a home in the San Francisco Bay area, the
Company will pay the cost of reasonable travel, lodging, and
meals from St. Louis to San Francisco and return for you and your
family in an amount not to exceed $7,000.
10. The Company will pay the following expenses, to help move you to
the Bay area:
a. All expenses incurred in packing, loading, transporting
and temporary storage (if required) for your personal
belongings from the St. Louis area to the San Francisco
Bay area in an amount not to exceed $40,000.
b. Real estate commissions paid by you to your real estate
broker in connection with the sale of your home in the St.
Louis area along with other closing costs not to exceed
$50,000. Based upon your effective State and Federal tax
rate at the time of the house sale, the Company will gross
up this payment to cover State and Federal taxes.
c. Closing costs up to $16,000 on the purchase of a
residential dwelling in the San Francisco Bay area during
your tenure at the Company. This amount will be taxable to
you.
d. A $75,000 bonus to help compensate you for the increased
cost of housing in the Bay area to be payable by June 25,
1999.
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May 18, 1999
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e. Under the above Sections (a) through (c), the offer of
payment for stated expenses will expire twelve (12) months
from your hire date.
11. For each fiscal year of the Company during which you remain CEO,
you will be eligible for a bonus of up to 25% of your base salary
for the year, based upon the attainment of goals established by
the Board of Directors.
12. This offer is contingent upon you signing and returning to the
Company a copy of its standard Proprietary Information agreement.
13. In accordance with Federal immigration law, on your first day of
employment, we will need to see documents proving your identity
and eligibility to work in the United States. Documents that can
satisfy these requirements are a valid driver's license and a
social security card or a United States passport.
14. Your employment is at will, as defined under applicable law. If
your employment terminates for any reason, you shall not be
entitled to any payments, benefits, damages, awards or
compensation other than as provided above, or as otherwise may be
available in accordance with the Company's established employee
plans and policies at the time of termination.
15. Prior to your first day of employment with the Company, you will
be expected to travel to the Company's offices or a place where
the Company conducts business, to familiarize yourself with the
Company. The Company will reimburse you for all reasonable travel
expenses associated with your visits, in accordance with standard
Company policies.
16. This offer of employment will expire on May 20,1999, at 5:00 p.m.
17. This letter sets forth the entire agreement regarding the subject
matter hereof. It supersedes any prior representations or
agreements, oral or written, and it can only be modified by a
written agreement signed by a duly authorized officer of the
Company.
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If the terms of this letter are agreeable, please sign and return one copy of
this letter and the agreement to our Human Resources Department. We look forward
to working with you at Cardiac Pathways.
Best personal regards,
/s/ XXXXXXX X. XXXXXXXX
Xxxxxxx X. Xxxxxxxx
President and Chief
Executive Officer
Agreed and Accepted.
/s/ XXXXXX X. XXXXXXXX 5/20/99
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XXXXXX X. XXXXXXXX
