Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into effective
as of the 1st day of October, 2003, by and between Rubicon Medical Corporation,
a Delaware corporation (the "Company"), and Xxxxxxx X. Xxxxxx ("Executive").
PREMISES
A. The Company desires to employ Executive as its President and
Executive desires to accept employment in such position.
B. The parties desire to enter into this Agreement to set forth each
party's rights and obligations under the employment relationship.
AGREEMENT
NOW, THEREFORE, FOR AND IN CONSIDERATION of the mutual covenants
contained herein and of the mutual benefits to be derived hereunder, the parties
agree as follows:
1. Employment. Company hereby employs Executive as President and Chief
Executive Officer ("CEO") of the Company to perform those duties customarily
associated with such position and such other duties as may be assigned to
Executive by the Company's Board of Directors (the "Board") from time to time.
Executive accepts and agrees to such employment on the terms and conditions set
forth in this Agreement.
2. Term. The term of this Agreement shall be for four (4) years and
three (3) months, commencing effective as of October 1, 2003 (the "Effective
Date"), and expiring at midnight on December 31, 2007, unless earlier terminated
in accordance with the provisions of this Agreement.
3. Duties. Executive shall be employed by Company as its President and
CEO or in such other senior executive positions of comparable status, dignity
and responsibility as requested by the Board from time to time. Executive shall
also serve in similar positions with such subsidiaries of Company as shall, from
time to time, be requested by Company's board of directors, and serve as a
member of the Board. Executive shall not receive any additional compensation for
service as a member of the Board or as an officer of any subsidiaries of the
Company unless otherwise directed by the Board.
Executive shall devote substantially all of his working time and
efforts to the business of Company and its subsidiaries and shall not during the
term of this Agreement be engaged in any other business activities that will
significantly interfere or conflict with the reasonable performance of his
duties hereunder, except where approved by the Board. Executive may serve or
continue to serve as a member of the board of directors of any companies or
organizations which, in the Board's reasonable judgment, will not present any
conflict of interest with the Company or any of its subsidiaries or materially
adversely affect the performance of Executive's duties under this Agreement.
4. Compensation.
(a) Base Salary. For all services rendered by Executive,
Company shall pay to Executive a base salary of $150,000 per year
throughout the term of this Agreement, payable in equal monthly
installments on the last day of each calendar month. All salary
payments shall be subject to withholding and other applicable taxes.
The Board shall review Executive's base salary on not less than an
annual basis and may increase (but not decrease) Executive's base
salary based on such factors as the Board may deem appropriate in its
discretion.
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(b) Annual Bonus. Executive will be entitled to an annual cash
bonus in an amount not to exceed one hundred percent (100%) of
Executive's Base Salary, as determined by the Board of Directors (the
"Annual Bonus"). Within three (3) months following the end of each
fiscal year occurring during the term of this Agreement, the Board of
Directors shall review Executive's performance during the preceding
twelve months and declare and pay a bonus or bonuses following such
review(s). Notwithstanding the foregoing, (i) the initial review shall
take place within four months following October 1, 2003 and shall cover
the fiscal year ended December 31, 2003 and (ii) the final review shall
take place on or before December 31, 2007 with respect to the year then
ended.
(c) Closing Bonus. Promptly after the execution of the
Transaction Agreement dated October 29, 2003 among Boston Scientific
Corporation, Nemo I Acquisition, Inc., the Company and Executive as
Stockholders' Representative (as defined therein) the Company shall pay
Executive a success bonus equal to $150,000, less any applicable
withholdings (the "Closing Bonus").
(d) Stock Options and Stock Awards. Executive will be entitled
to participate in the Company's stock option and stock award plans and
to receive awards thereunder commensurate with Executive's position,
seniority, and performance with the Company.
(e) Executive Benefits. The Company shall provide such health
and medical insurance for Executive in the form and program chosen by
the Company for its full-time employees. Executive shall be entitled to
participate in any other health, medical, retirement, pension,
profit-sharing, disability, death and dismemberment, life insurance,
stock option, vacation and other benefit plans and programs as in
effect from time to time on the same basis as other members of senior
management. The Company shall also provide Executive with the use of a
Company automobile.
(f) Vacation. Executive shall be entitled to paid vacation in
accordance with the most favorable plans, policies, programs and
practices of the Company and its affiliated companies with respect to
members of senior management. Executive shall initially be entitled to
four weeks paid vacation per calendar year.
5. Reimbursement of Expenses. The Company will promptly reimburse
Executive for expenses incurred in connection with Company's business, including
expenses for travel, lodging, meals, beverages, entertainment, and other items
on Executive's periodic presentation of an account of such expenses.
6. Working Facilities. The Company shall provide to Executive offices
and facilities appropriate to Executive's position and suitable for the
performance of Executive's duties.
7. Nondisclosure of Confidential Information. For purposes of this
Agreement, the term "Confidential Information" means information (i) disclosed
to or known by Executive as a consequence of or through his/her employment with
the Company, (ii) not generally known outside the Company, and (iii) which
relates to the Company's business. Confidential Information includes, but is not
limited to, information of a technical nature, such as methods and materials,
trade secrets, inventions, processes, formulas, systems, computer programs, and
studies, and information of a business nature such as project plans, market
information, costs, customer lists, and so forth. Confidential Information does
not include information that (i) is or becomes generally available to the public
other than as a result of a direct or indirect disclosure by Executive in
violation of this Agreement, or (ii) was already in Executive's possession at
the time his initial employment with the Company commenced.
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Recognizing that the Company is presently engaged, and may hereafter
continue to be engaged, in the research and development of processes and the
performance of services which involve experimental and inventive work, and that
the success of the Company's business may depend upon the protection of its
processes, products and services by patent, copyright or secrecy, and that
Executive has had, or during the course of his engagement may have, access to
Confidential Information, as herein defined, Executive agrees and acknowledges
that:
(a) The Company has exclusive right and title to all
Confidential Information and Executive hereby assigns all rights he
might otherwise possess in any Confidential Information to the Company.
Except as required in the performance of his duties to the Company,
Executive will not at any time during or after the term of his
employment or engagement by the Company, which term shall include any
time in which Executive may be retained by the Company as a consultant,
directly or indirectly use, communicate, disclose or disseminate any
Confidential Information.
(b) All documents, records, notebooks, notes, memoranda and
similar repositories of, or containing Confidential Information or any
other information of a secret, proprietary, confidential or generally
undisclosed nature relating to the Company or its operations and
activities made or compiled by Executive at any time or made available
to him during the term of his employment or engagement by the Company,
including any and all copies thereof, shall be the property of the
Company, shall be held by him in trust solely for the benefit of the
Company, and shall be delivered to the Company by him on the
termination of his employment or at any other time on the request of
the Company.
(c) Executive will not assert against the Company any rights
in, to or under any inventions, trademarks, copyrights, discoveries,
concepts or ideas, or improvements thereof, or know-how related
thereto, as having been made or acquired by him during the term of his
employment or engagement if based on or otherwise related to
Confidential Information.
8. Assignment of Inventions.
(a) All discoveries, concepts, and ideas, whether or not
patentable or subject to copyright protection, including but not
limited to know-how, data, processes, methods, trade secrets, formulae,
and techniques, as well as improvements thereof, or know-how related
thereto, concerning or relating to any past, present or prospective
activities of the Company which Executive makes, discovers or conceives
during the hours of his engagement or with the material use of the
Company's facilities, materials or personnel, either solely or jointly
with others during his employment by the Company or any affiliate and,
if based on or related to Confidential Information, at any time after
termination of such employment (collectively, the "Inventions"), shall
be the sole and exclusive property of the Company, and Executive agrees
to perform the provisions of this Section 8 with respect thereto
without the payment by the Company of any royalty or any consideration
therefor other than the regular compensation paid to Executive in his
capacity as an executive or consultant.
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(b) Any written notebooks maintained by Executive with respect
to Inventions and studies or research projects undertaken on the
Company's behalf shall at all times be the property of the Company and
shall be surrendered to the Company upon termination of Executive's
engagement or, upon the request of the Company, at any time prior
thereto.
(c) Executive hereby assigns to the Company any and all of his
right, title and interest in and to Inventions.
(d) Executive shall sign, acknowledge and deliver promptly to
the Company, without charge to the Company, but at its expense, such
written instruments (including applications and assignments) and take
such other acts, such as giving testimony in support of Executive's
inventorship, as may be necessary or desirable in the reasonable
opinion of the Company to obtain, maintain, protect, extend, reissue or
enforce United States and/or foreign letters patent and copyrights
relating to Inventions invented by Executive and to record, protect,
perfect or otherwise effect the assignment of Executive's entire right,
title and interest in and to Inventions to the Company or its nominee.
Executive further acknowledges and agrees that any copyright developed
or conceived of by Executive during the term of his employment which is
related to the business of the Company shall be, to the greatest extent
permitted by law, a "work for hire" under the copyright law of the
United States and other applicable jurisdictions.
(e) Executive further agrees that if the Company is unable,
after reasonable effort, to secure Executive's signature on any
documents required by the Company under this Agreement, including, but
not limited to, such documents described in Section 8(d) hereunder, any
executive officer of the Company shall be entitled to execute any such
documents as Executive's agent and attorney-in-fact, and Executive
hereby irrevocably designates and appoints each executive officer of
the Company as his agent and attorney-in-fact to execute any such
documents on his behalf, and to take any and all actions as the Company
may deem necessary or desirable in order to protect its rights and
interests in any Inventions, under the conditions described in this
Agreement.
(f) Executive represents that his performance of all the terms
of this Agreement and as an Executive of or consultant to the Company
does not and will not breach any trust or contract entered into prior
to his employment by the Company. Executive agrees not to enter into
any agreement either written or oral in conflict herewith and
represents and agrees that he has not brought and will not bring with
him to the Company or use in the performance of his responsibilities at
the Company any materials or documents of a former employer which are
not generally available to the public, unless he has obtained written
authorization from the former employer for their possession and use and
provided a copy of such authorization to the Company.
(g) No provisions of this Paragraph shall be deemed to limit
the restrictions applicable to Executive under Sections 9 and 10.
9. Shop Rights. Unless waived by the Board, the Company shall also have
the royalty-free right to use in its business, and to make, use and sell
products, processes and/or services derived from any inventions, discoveries,
concepts and ideas, whether or not patentable, including but not limited to
processes, methods, formulas and techniques, as well as improvements thereof or
know-how related thereto, which are not within the scope of Inventions as
defined above but which are conceived of or made by Executive during the period
he is employed or engaged by the Company and with the material use or material
assistance of the Company's facilities, materials, or personnel.
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10. Non-Compete. Executive hereby agrees that during the term of this
Agreement and for the period of one year from the expiration or earlier
termination hereof the ("Restricted Period"), Executive will not:
(a) Own, manage, operate, or control, directly or indirectly,
any business that is directly competitive with any business conducted
or proposed to be conducted by the Company or any subsidiary thereof
during the term of this Agreement in any geographic market in which the
Company or any subsidiary thereof conducts business or proposes to
conduct business during the term of this Agreement. For purposes of
this paragraph, ownership of securities of not in excess of five
percent (5%) of any class of securities of a public company listed on
the OTC Bulletin Board, a national securities exchange or on the
National Association of Securities Dealers Automated Quotation System
(NASDAQ) shall not be considered to be competition with the Company or
any subsidiary thereof;
(b) Act as, directly or indirectly, or become employed as, an
officer, director, executive, consultant or agent of any business
within the medical products industry which is directly competitive with
the Company or any subsidiary thereof during the term of this Agreement
in any geographic market within the medical products industry in which
the Company or any subsidiary thereof conducts business or proposes to
conduct business during the term of this Agreement.
(c) Solicit, directly or indirectly, any similar business to
that of the Company's from, or sell any products or services that are
in direct competition with the Company's products and services to, any
company which was within one year prior to the date of termination of
Executive's employment, a customer or client of the Company or any of
its subsidiaries; or
(d) Solicit the employment of any employee, consultant or
agent of the Company or its subsidiaries..
11. Termination.
(a) Death. Executive's employment shall terminate
automatically upon Executive's death during the term of this Agreement.
(b) Disability. If Executive is absent from his full-time
duties with the Company as a result of incapacity due to mental or
physical illness ("Disability") and such absence continues
uninterrupted for a period of two (2) consecutive months, the base
salary and annual bonus payable to Executive under this Agreement shall
be reduced by 50% until such time as Executive resumes the performance
of his full-time duties with the Company or this Agreement is
terminated. If Executive's Disability continues for four (4)
consecutive months, the Company may terminate Executive's employment
effective on the 30th day after delivery to Executive of a notice to
that effect (the "Disability Termination Date"), unless Executive
returns to the full-time performance of his duties prior to the
Disability Termination Date.
(c) Cause. The Company may terminate Executive's employment
during the term of this Agreement for Cause. For purposes of this
Agreement, "Cause" shall mean: (i) Executive being convicted of, or
pleads no contest to, a felony; (ii) a willful act of personal
dishonesty taken by Executive in connection with his responsibilities
as Executive ; (iii) the willful and continued failure of Executive to
perform substantially Executive's duties with the Company or its
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affiliates (other than any such failure resulting from Disability),
after a written demand for substantial performance is delivered to
Executive by the Board which specifically identifies the manner in
which the Board believes Executive has not substantially performed
Executive's duties and Executive has not performed such duties within
30 calendar days of such notice, or (iv) the willful engaging by
Executive in illegal conduct or gross misconduct which is materially
injurious to the Company or its affiliates. For purposes of this
provision, no act or failure to act, on the part of Executive, shall be
considered "willful" unless it is done, or omitted to be done, by
Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Company. Any act,
or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be
done, by Executive in good faith and in the best interests of the
Company. The cessation of employment of Executive shall not be deemed
to be for Cause unless and until there shall have been delivered to
Executive 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 such purpose (except for the
conduct described in subparagraph (i)), after reasonable notice is
provided to Executive and Executive is given an opportunity, together
with counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, Executive is guilty of the conduct
described in subparagraph (ii), (iii) or (iv) above, and specifying the
particulars thereof in detail.
(d) Good Reason. Executive's employment may be terminated by
Executive at any time within ninety (90) days after the occurrence of
an event constituting Good Reason. For purposes of this Agreement,
"Good Reason" shall mean:
(i) the assignment to Executive of any duties
inconsistent in any material respect with Executive's position
(including offices, titles and reporting requirements),
authority, duties or responsibilities, or any other action by
the Company which results in a material diminution in such
position, authority, duties or responsibilities, excluding for
this purpose an action not taken in bad faith and which is
remedied by the Company promptly after receipt of written
notice thereof given by Executive; provided that if the
Company is no longer a publicly traded company, such event
shall not by itself constitute a material diminution of
Executive's authority, position, duties or responsibilities;
(ii) the failure by the Company to comply with any of
the material terms of this Agreement, other than a failure not
occurring in bad faith and which is remedied by the Company
promptly after receipt of written notice thereof given by
Executive;
(iii) the Company's requiring Executive to be based
at any office or location more than 15 miles from the location
of the Company's offices at the commencement of this Agreement
or the Company's requiring Executive to travel on Company
business to a substantially greater extent than required
during the first twelve (12) months of this Agreement; or
(v) removal from the Company's Board for reasons
other than Cause.
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(f) Notice of Termination. Any termination by the Company for
Cause, or by Executive for Good Reason, shall be communicated by Notice
of Termination to the other party hereto in accordance with Section 17
of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's employment
under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than
thirty days after the giving of such notice). The failure by Executive
or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company, respectively, or
preclude Executive or the Company, respectively, from asserting such
fact or circumstance in enforcing Executive's or the Company's rights
hereunder.
(g) Date of Termination. "Date of Termination" means (i) if
Executive's employment is terminated by the Company for Cause, or by
Executive for Good Reason, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be,
(ii) if Executive's employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be thirty (30)
days after the date on which the Company notifies Executive of such
termination, and (iii) if Executive's employment is terminated by
reason of death or Disability, the Date of Termination shall be the
date of death of Executive or the Disability Termination Date.
12. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause. If, during the term of
this Agreement, the Company shall terminate Executive's employment
other than for Cause, or Executive shall terminate employment for Good
Reason:
(i) The Company shall pay to Executive the aggregate
of the following amounts:
A. The sum of (aa) Executive's Annual Base Salary
through the Date of Termination to the extent not
theretofore paid, (bb) Executive's Annual Bonus
through the Date of Termination to the extent not
theretofore paid, (cc) reimbursement for any and all
monies advanced in connection with Executive's
employment through the Date of Termination, and (dd)
all other payments and benefits to which Executive
may be entitled under the terms of any benefit plan
of the Company (collectively, the "Accrued
Obligations") shall be paid to Executive in a lump
sum in cash within 30 days after the Date of
Termination. Where applicable, such payments shall be
prorated based on a 360 day year and the number of
days elapsed during the year in question.
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B. Subject to Executive's execution of a general form
of release in a form satisfactory to the Company, an
amount equal to the sum of one (1) times Executive's
then Annual Base Salary and Annual Bonus, provided,
however, that in the event Executive's employment is
terminated by the Company without Cause or by
Executive for Good Reason during the twelve month
period immediately following the Effective Date, the
Company shall pay Executive an amount equal to one
and one-half times Executive's then Annual Base
Salary and Annual Bonus. Such amount shall be paid to
Executive in equal installments in accordance with
the Company's payroll practices over a twelve month
period (or, in the event Executive's employment
terminates during the twelve month period commencing
on the Effective Date, eighteen months) immediately
following the Date of Termination. For purposes of
this subparagraph, Executive's Annual Bonus shall be
deemed to be equal to the Annual Bonus paid to
Executive by the Company for the most recently
completed fiscal year; provided, however, that the
maximum amount of such Annual Bonus that may be
considered in calculating the payments to be made to
Executive is thirty percent (30%) of Executive's
Annual Base Salary. Notwithstanding the foregoing, in
no event shall the Annual Bonus include the Closing
Bonus or any other bonus paid to Executive.
C. During the 18 month period following the Date of
Termination, the Company shall at its expense provide
Executive and his family with continuation health
coverage in accordance with the Consolidated Omnibus
Budget Reconciliation Act of 1986 ("COBRA") under the
Company's medical plan .
D. To the extent not theretofore paid or provided,
the Company shall timely pay or provide to Executive
any other amounts or benefits required to be paid or
provided or which Executive is eligible to receive
under any plan, program, policy or practice or
contract or agreement of the Company and its
affiliated companies in accordance with the terms of
such arrangements (such other amounts and benefits
shall be hereinafter referred to as the "Other
Benefits").
(b) Death. If Executive's employment is terminated by reason
of Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to Executive's legal
representatives under this Agreement, other than for payment of Accrued
Obligations, the timely payment or provision of Other Benefits, and the
Company shall, at its expense, provide COBRA continuation health
coverage to Executive's family for a period of one year from the date
of Executive's death under the Company's medical plan. Executive's
estate, unless otherwise directed by Executive, shall receive all
vested Options upon Executive's Death. Accrued Obligations shall be
paid to Executive's estate or beneficiary, as applicable, in a lump sum
in cash within 30 days of the Date of Termination and Other Benefits
shall be paid as soon as practicable in accordance with the most
favorable practices, policies and procedures followed by the Company
with respect to members of senior management.
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(c) Disability. If Executive's employment is terminated by
reason of Executive's Disability during the term of this Agreement,
this Agreement shall terminate without further obligations to
Executive, other than for payment of Accrued Obligations, the timely
payment or provision of Other Benefits, and the Company shall, at its
expense, provide COBRA continuation health coverage to Executive and
his family for a period of one year from the Disability Termination
Date under the Company's medical plan. Accrued Obligations shall be
paid to Executive in a lump sum in cash within 30 days of the Date of
Termination and Other Benefits shall be paid as soon as practicable in
accordance with the most favorable practices, policies and procedures
followed by the Company with respect to members of senior management.
(d) Cause; Other than for Good Reason. If Executive's
employment shall be terminated for Cause during the term of this
Agreement, this Agreement shall terminate without further obligations
to Executive other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. If Executive voluntarily
terminates employment during the Employment Period, excluding a
termination for Good Reason, this Agreement shall terminate without
further obligations to Executive, other than for Accrued Obligations
and the timely payment or provision of Other Benefits. In either event,
all Accrued Obligations shall be paid to Executive in a lump sum in
cash within 30 days of the Date of Termination.
13. Change of Control. Upon the occurrence of a Change of Control (as
defined below), and in the event the benefits provided for in this Agreement or
otherwise payable to Executive constitute "parachute payments" within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code") and will be subject to the excise tax imposed by Section 4999 of the
Code, then Executive shall receive (i) payment from the Company sufficient to
pay such excise tax, plus (ii) an additional payment from the Company sufficient
to pay the excise tax and federal and state income and employment taxes arising
from the payments made by the Company to Executive pursuant to this sentence.
Unless the Company and Executive otherwise agree in writing, the determination
of Executive's excise tax liability and the amount required to be paid under
this Section shall be made in writing by the Company's independent auditors who
are primarily used by the Company immediately prior to the Change of Control
(the "Accountants"). For purposes of making the calculations required by this
Section, the Accountants may make reasonable assumptions and approximations
concerning applicable taxes and may rely on good faith interpretations
concerning the application of Sections 280G and 4999 of the Code. The Company
and Executive shall furnish to the Accountants such information and documents as
the Accountants may reasonably request in order to make a determination under
this Section. The Company shall bear all reasonable costs and expenses incurred
in connection with the performance of the calculations contemplated by this
Section.
For purposes of this Agreement, "Change of Control" shall mean:
(i) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
30% or more of either (aa) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common
Stock") or (bb) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for
purposes of this Agreement, the following acquisitions shall
not constitute a Change of Control: (aa) any acquisition
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directly from the Company, (bb) any acquisition by the
Company, (cc) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, (dd) any acquisition by
any corporation pursuant to a transaction which complies with
clauses (aa), (bb) and (cc) of subsection (iii) below, or (ee)
any acquisition of additional shares by Xxxxx Xxxxxx and/or
Xxxxxx Family Enterprises, FLP, who, together, currently own
in excess of 20% of the Outstanding Company Common Stock; or
(ii) (aa) Individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination
for election by the Company's shareholders, was approved by a
vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or
removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board or (bb) a majority of the members
of the Board ceases to be comprised of Directors whose most
recent election to the Board was approved by at least a
majority of the Incumbent Board prior to such election; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a "Business
Combination"), in each case, unless, following such Business
Combination, (aa) all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more
than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the
corporation resulting from such Business Combination
(including, without limitation, a corporation which as a
result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may be,
(bb) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related
trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or
indirectly, 30% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business
Combination and (cc) at least a majority of the members of the
board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination;
or
(iv) Approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
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14. Nontransferability. Neither Executive, Executive's spouse,
Executive's designated contingent beneficiary, nor their estates shall have any
right to anticipate, encumber, or dispose of any payment due under this
Agreement. Such payments and other rights are expressly declared nonassignable
and nontransferable except as specifically provided herein.
15. Indemnification. Company shall indemnify Executive and hold
Executive harmless from liability for acts or decisions made by Executive while
performing services for Company to the greatest extent permitted by the Delaware
General Corporation Law and shall advance funds to Executive for the defense of
any action, suit or proceeding prior to the conclusion thereof to the maximum
extent permitted by the Delaware General Corporation Law. The Company shall use
its best efforts to obtain coverage for Executive under a directors and officers
liability insurance policy which is issued by a recognized insurer of national
standing acceptable to Executive and which provides coverages customarily
contained in director and officer liability insurance policies carried by public
companies engaged in business in the medical devices sector of the economy.
16. Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party.
17. Notice. Any notices or other communications required or permitted
hereunder shall be shall be in writing and shall be given by hand delivery to
the other party, by registered or certified mail, return receipt requested,
postage prepaid, or by a commercially recognized overnight delivery service
providing confirmation of delivery, addressed as follows:
If to Executive, to: Xxxxxxx X. Xxxxxx
C/O Rubicon Medical Corporation
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
If to the Company, to: Rubicon Medical Corporation
Attn: Chairman of the Board
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
18. Entire Agreement. This Agreement is and shall be considered to be
the only agreement or understanding between the parties hereto with respect to
the employment of Executive by the Company. All negotiations, commitments, and
understandings acceptable to both parties have been incorporated herein. No
letter, telegram, or communication passing between the parties hereto covering
any matter during this contract period, or any plans or periods thereafter,
shall be deemed a part of this Agreement; nor shall it have the effect of
modifying or adding to this Agreement unless it is distinctly stated in such
letter, telegram, or communication that it is to constitute a part of this
Agreement and is attached as an amendment to this Agreement and is signed by the
parties to this Agreement.
19. Prior Agreement Superceded. This Agreement supercedes and replaces
the employment agreement entered into between Rubicon Medical, Inc. and
Executive, dated as of March 31, 2000, which is hereby terminated effective as
of the date hereof.
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20. Enforcement. Each of the parties to this Agreement shall be
entitled to any remedies available in equity or by statute with respect to the
breach of the terms of this Agreement by the other party. Executive hereby
specifically acknowledges and agrees that a breach of the agreements, covenants
and conditions contained in Sections 7, 8, 9 and 10 of this Agreement may cause
irreparable harm and damage to the Company, that the remedy at law, for the
breach or threatened breach of such provisions of this Agreement may be
inadequate, and that, in addition to all other remedies available to the Company
for such breach or threatened breach (including, without limitation, the right
to recover damages), the Company shall be entitled to injunctive relief for any
breach or threatened breach of such sections of this Agreement.
21. Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Utah.
22. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against
Executive or others. In no event shall Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not Executive obtains other employment.
Following a Change in Control, the Company agrees to pay as incurred, to the
full extent permitted by law, all legal fees and expenses which Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by Executive about the amount of
any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code").
23. Severability. If and to the extent that any court of competent
jurisdiction holds any provision or any part thereof of this Agreement to be
invalid or unenforceable, such holding shall in no way affect the validity of
the remainder of this Agreement.
24. Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement, or condition of this Agreement or
to exercise any right or remedy consequent upon a breach hereof shall constitute
a waiver of any such breach or of any covenant, agreement, term, or condition.
25. Litigation Expenses. If Executive or Company retain legal counsel
and/or incurs other costs and expenses in connection with the enforcement of any
or all of the provisions of this Agreement, the prevailing party shall be
entitled to recover from the other party reasonable attorneys' fees, costs, and
expenses incurred by the prevailing party in connection with the enforcement of
this Agreement. Notwithstanding the foregoing, in the event that following a
Change of Control Executive engages legal counsel to enforce Executive's rights
or seek a determination under this Agreement, the Company shall pay the expenses
of such legal counsel regardless of the outcome of any legal proceeding
resulting therefrom; provided that such claim is not determined by a trier of
fact to be frivolous or in bad faith.
26. Survivability. The provisions of sections 7, 8, 9, 10, 12, and 13
shall survive termination of this Agreement.
27. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
[The remainder of this page left blank intentionally]
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IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto effective as of the date first above written.
The Company:
Rubicon Medical Corporation
By /s/ Xxxxx X. Xxxxxx
---------------------------
Xxxxx X. Xxxxxx
Chairman of the Board
Executive:
By /s/ Xxxxxxx X. Xxxxxx
---------------------------
Xxxxxxx X. Xxxxxx
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