EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this 28th day of
Feb, 1997 ("Effective Date"), by and between INTUITIVE SURGICAL DEVICES, INC.,
a Delaware corporation (the "Company") and XXXXXX XXXXX ("Executive").
RECITALS
A. The Company desires assurance of the association and services of
Executive in order to retain Executive's experience, skills, abilities,
background and knowledge, and is willing to engage Executive's services on
the terms and conditions set forth in this Agreement.
B. Executive desires to be in the employ of the Company, and is
willing to accept such employment on the terms and conditions set forth in
this Agreement.
C. In consideration of the foregoing promises and the mutual covenants
and agreements contained herein, and for other good and valuable
consideration the adequacy of which is hereby acknowledged, the parties
hereby agree as follows:
AGREEMENT
1. EMPLOYMENT.
(a) The Company hereby agrees to employ Executive and Executive
hereby agrees to accept employment by the Company, upon the terms and
conditions set forth in this Agreement.
(b) The Company and Executive each agree and acknowledge that
Executive is employed by the Company as an "at-will" employee and that either
Executive or the Company has the right at any time to terminate Executive's
employment with the Company, with or without cause or advance notice, for any
reason or for no reason. The Company and Executive wish to set forth the
compensation and benefits which Executive shall be entitled to receive in the
event that Executive's employment with the Company terminates under the
circumstances described herein.
2. POSITION AND DUTIES.
(a) Executive shall be the Chief Executive Officer of the
Company, reporting directly to the Board of Directors, and shall serve in
such other capacity or capacities as the Board of Directors of the Company
may from time to time prescribe.
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(b) Executive shall serve as a director of the Company during his
employment by the Company, and shall serve in such capacity for such
compensation, if any, as is provided to other employee directors.
(c) Executive shall do and perform all services, acts or things
necessary or advisable to manage and conduct the business of the Company,
provided however, that at all times during his employment Executive shall be
subject to the direction and policies from time to time established by the
Board of Directors of the Company. Executive's duties shall include, but not
be limited to providing strong leadership for the Company's operations, and
playing a major role in the development of new products, technology, external
collaborations and corporate alliances. The Company particularly expects
Executive to serve as a role model for staff development and scientific
excellence.
(d) Executive shall devote his full time and attention during
normal business hours to the business affairs of the Company except for
reasonable vacations and except for illness or incapacity, but nothing in
this Agreement shall preclude Executive from devoting reasonable time
required for serving as a director or a member of a committee of any
organization involving no conflict of interest with the interest of the
Company, from engaging in charitable and community activities, and from
managing his personal affairs, provided that such activities do not
materially interfere with the regular performance of his duties and
responsibilities under this Agreement.
3. COMPENSATION AND BENEFITS.
(a) SALARY AND BENEFITS. During the period of Executive's
employment hereunder, the Company shall pay to Executive an annual salary in
an amount of three hundred thousand dollars ($300,000), less standard
deductions and withholdings, payable in installments in accordance with
Company policy. Executive also shall be entitled to all rights and benefits
for which he meets applicable eligibility conditions under such group
insurance and other Company benefit programs, including sick and vacation
leave and the 1996 Equity Incentive Plan, (Exhibit D) which may be in force
from time to time and provided to Executive or for the Company's employees
generally. The Company reserves the right to modify Executive's compensation
and benefits from time to time as it deems necessary.
(b) BONUS. To the extent determined by the Compensation
Committee of the Board, Executive shall be eligible to participate in such
management bonus programs as may be adopted by the Company from time to time,
if any.
(c) STOCK OPTIONS. The Company intends and agrees that Executive
will be granted an option to purchase capital stock of the Company. Upon the
commencement of Executive's employment, the Company agrees to grant Executive
an option to purchase seven hundred thousand (700,000) shares of the
Company's common stock under the Company's 1996 Equity Incentive Plan. The
exercise price per share of the option shall be equal to one hundred percent
(100%) of the fair market value of the Company's common stock as determined
under
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the 1996 Equity Incentive Plan on the date of grant. The option shall vest as
to one sixtieth (1/60th) of the shares subject to the option for each full
month of completed service, beginning on the date of the grant. If the
Company enters into an Acquisition, then the option shall vest as to all the
shares subject to the option immediately prior to the closing of such
Acquisition. For purposes of this Agreement, "Acquisition" shall mean any
consolidation or merger of the Corporation with or into any other corporation
or other entity or person, or any other corporate reorganization in which the
shareholders of the Corporation prior to such consolidation, merger or
reorganization or any transaction or series of related transactions shall own
less than fifty percent (50%) of the voting stock of the continuing or
surviving entity of such consolidation, merger or reorganization, or any
transaction of series of related transactions in which in excess of fifty
percent (50%) of the Corporation's voting power is transferred. The Company
intends and agrees that Executive will be allowed to purchase five hundred
thousand dollars ($500,000) worth of the Series C Preferred Stock of the
Company, at the same price and on the same terms and conditions as the
institutional investors, when the Company closes the sale of its Series C
Preferred Stock. Notwithstanding the foregoing, Executive acknowledges and
agrees that there are no further commitments or obligations on the part of
the Company to grant to Executive any additional options.
(d) EXPENSES. Executive shall be entitled to receive
reimbursement of all actual and reasonable expenses incurred by Executive in
performing Company services, including expenses related to travel and expenses
while away from home on business. Such expenses shall be accounted for under
the policies and procedures established by the Company.
(e) RELOCATION EXPENSES. In connection with Executive's
relocation, Executive shall be entitled to receive reimbursement of the
closing costs associated with selling Executive's principal residence, the
cost of moving Executive's furnishings and family, and expenses for temporary
local housing. Such reimbursement shall not exceed one hundred thousand
($100,000) dollars.
4. TERMINATION BY THE COMPANY. Executive's employment with the Company
may be terminated by the Company in the following circumstances.
(a) DEATH. Upon Executive's death, the termination date shall be
the last day of the month in which Executive's death occurs.
(b) DISABILITY. If Executive becomes incapacitated due to
physical or mental illness, injury, or if Executive is absent from his
full-time duties for twelve (12) consecutive weeks on account of physical or
mental illness, the Company shall continue to pay to Executive an amount
which, when combined with disability or income-continuance benefits pursuant
to a Company plan or provided under state law and received by Executive,
shall equal but not exceed Executive's base salary, less standard deductions
and withholdings. However, Executive must submit claims for any and all such
disability benefits to which he may be entitled. For any waiting period
during which Executive receives no benefits under any disability plan, the
Company shall pay his entire base salary, less standard deductions and
withholdings. The
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Company shall continue to integrate such salary payments with benefits until
such time as Executive returns to work or Executive's employment is
terminated but in no event for longer than twelve (12) weeks.
(c) FOR CAUSE. If the Company terminates Executive's employment
for Cause, Executive shall not be entitled to receive any payments or
benefits under the provisions of this Agreement, except as otherwise
specifically set forth herein, and the Company shall cease paying
compensation or providing benefits to Executive as of Executive's termination
date. For purposes of this Agreement, Cause shall mean misconduct, including:
(i) conviction of any felony or any crime involving moral turpitude or
dishonesty; (ii) participation in a fraud or act of dishonesty against the
Company; (iii) wilful breach of the Company's policies; (iv) intentional
damage to the Company's property; or (v) material breach of this Agreement or
Executive's Proprietary Information and Inventions Agreement attached hereto
as Exhibit B. Physical or mental disability shall not constitute Cause.
(d) WITHOUT CAUSE. The Company shall have the right to terminate
Executive's employment at any time, without Cause, effective on the date
determined by the Company. If the Company terminates Executive's employment
without Cause, then Executive shall be paid the following:
(i) SEVERANCE PAYMENTS. The Company shall continue to pay
Executive his base salary in effect at the time of such termination for
twelve months following the date of termination ("Severance Payments"). The
Severance Payments shall be made on the Company's normal payroll dates and
will be subject to standard deductions and withholdings. Notwithstanding the
foregoing, pursuant to Sections 6(b) and 10 of this Agreement (relating to a
termination of benefits in the event Executive competes with the Company or
solicits on behalf of another person or entity), the Severance Payments shall
cease as of the date Executive enters into an activity in competition with
the Company or solicits the Company's employees, consultants or independent
contractors, as determined solely by the Company, and Executive shall have no
further rights to such benefits.
(ii) HEALTH INSURANCE. To the extent permitted by law and by
the Company's group health insurance plans, Executive will be eligible, after
the date of termination, to continue his health insurance benefits under the
federal COBRA law, at his own expense for up to eighteen (18) months and,
later, to convert to an individual policy if he wishes. Executive will be
provided with a separate notice of his COBRA rights. If Executive elects
COBRA continuation, the Company agrees to pay Executive's health insurance
continuation premiums for twelve (12) months following the termination date
("Benefit Period"). The Company's obligation to make such payments shall
cease immediately if, during the Benefit Period, (A) Executive becomes
eligible for other health insurance benefits at the expense of a new
employer; or (B) in accordance with Section 6(b) of this Agreement, Executive
competes with the Company or solicits on behalf of another person or entity.
Executive agrees to notify a duly authorized officer of the Company, in
writing, at least ten (10) business days prior to his
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acceptance of any employment which provides health insurance benefits, or his
engagement in prohibited activity defined in Section 6(b).
(iii) STOCK OPTIONS. Vesting under Executive's stock option
will cease immediately. Executive's rights with respect to vested shares will
be as set forth in the stock option.
5. TERMINATION BY EXECUTIVE. Executive may terminate his employment
with the Company (1) for Good Reason within sixty (60) consecutive days
following the occurrence of an event or events constituting such Good
Reasons; or (2) for the convenience of Executive.
(a) GOOD REASON. If Executive voluntarily terminates his
employment with Good Reason, Executive shall receive the Severance Payments
and other benefits set forth in Section 4(d) above. For the purposes of this
Agreement, Good Reason means (i) substantial reduction of Executive's rate of
compensation as in effect immediately prior to the Effective Date of this
Agreement; (ii) failure to provide a package of welfare benefit plans which,
taken as a whole, provide substantially similar benefits to those in which
the Executive is entitled to participate (except that employee contributions
may be raised to the extent of any cost increases imposed by third parties)
or any action by the Company which would adversely affect Executive's
participation or substantially reduce Executive's benefits under any of such
plans; (iii) change in Executive's responsibilities, authority, title or
office resulting in diminution of position, excluding for this purpose an
isolated, insubstantial and inadvertent action not taken in bad faith which
is remedied by the Company promptly after notice thereof is given by
Executive; (iv) request that Executive relocate his current residence, unless
Executive accepts such relocation request; (v) material reduction in
Executive's duties; (vi) failure or refusal of a successor to the Company to
assume the Company's obligations under this Agreement; or (vii) material
breach by the Company or any successor to the Company of any of the material
provisions of this Agreement.
(b) CONVENIENCE. If Executive voluntarily resigns his employment
without Good Reason as defined below, the Company shall pay Executive his
base salary, less standard deductions and withholdings, through the date of
termination at the rate in effect at the time of the notice of termination.
Thereafter, the Company shall have no further obligations to Executive under
this Agreement.
6. LIMITATIONS AND CONDITIONS ON BENEFITS; AMENDMENT OF AGREEMENT
(a) REDUCTION IN PAYMENTS AND BENEFITS. The benefits provided
under this Agreement are in lieu of any other benefit provided under any
group severance plan of the Company in effect at the time of termination.
(b) EARLY CESSATION OF PAYMENTS AND OTHER BENEFITS. In the event
that Executive, at any time during his employment with the Company, or while
receiving Severance Payments, (i) performs work for any business entity, or
engages in any other work activity
5.
which is in competition, or is preparing to compete, with the Company; or
(ii) either directly or through others, solicits or attempts to solicit any
employee, consultant, or independent contractor of the Company to terminate
his or her relationship with the Company in order to become an employee,
consultant or independent contractor to or for any other person or entity,
then, except as otherwise specifically provided herein, the Company's
obligations to pay Executive any amounts, including but not limited to
Severance Payments, health insurance premiums, or provide any benefits under
the terms of this Agreement shall all cease immediately. For purposes of this
Agreement, the holding of less than one percent (1%) of the outstanding
voting securities of any firm or business organization in competition with
the Company shall not constitute activities or services precluded by this
Agreement. Executive agrees to notify the Company, in writing, at least ten
(10) business days prior to (i) engaging in any work for any business purpose
other than work for the Company; or (ii) soliciting or attempting to solicit
any employee, consultant, or independent contractor of the Company to
terminate his other relationship with the Company on behalf of another person
or entity. The Company shall not seek to recover any amounts paid or benefits
provided to Executive prior to his engagement in such competitive or
solicitation activities.
(c) RELEASE AND WAIVER OF CLAIMS. Prior to the receipt of any
Severance Payments and other benefits provided under this Agreement following
termination of Executive's Employment, and prior to the beginning of the
Consulting Period, Executive shall, as of the date of termination, execute a
Release and Waiver of Claims in the form attached hereto as Exhibit A
("Release"). In the event Executive does not execute the Release within the
specified period set forth in the Release, no further amounts shall be
payable and no further benefits shall be provided under this Agreement, and
this Agreement shall be null and void.
(d) CERTAIN REDUCTIONS IN PAYMENTS OR BENEFITS.
(i) In the event that any payments or other benefits received
or to be received by Executive pursuant to this Agreement ("Payments") would
(A) constitute a "parachute payment" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code"), and (B) but for
this subsection (d), be subject to the excise tax imposed by Section 4999 of
the Code (the "Excise Tax"), then, in accordance with this subsection 6(d),
such Payments shall be reduced to the maximum amount that would result in no
portion of the Payments being subject to the Excise Tax. For such purpose,
the maximum amount of Payments that may be paid without incurring the Excise
Tax shall be determined by Ernst & Young, LLP or any other nationally
recognized accounting firm which is the Company's outside auditor at the time
of such determination (the "Accounting Firm") and shall be the largest
amount for which there is substantial authority (within the meaning of
Section 6662(d)(2)(B) of the Code) for no portion of the Payments being
treated as subject to the Excise Tax. Any such determination shall be
conclusive and binding on Executive and the Company. For purposes of making
the calculations required by this subsection 6(d)(i), the Accounting Firm may
make reasonable assumptions and approximations concerning applicable taxes
and may rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code. All fees and expenses of
the Accounting Firm shall be borne solely by the
6.
Company. If the Internal Revenue Service (the "IRS") determines that a
Payment is subject to the Excise Tax, then subsection 6(d)(ii) hereof shall
apply.
(ii) If, notwithstanding any reduction described in
subsection 6(d)(i) hereof (or in the absence of any such reduction), the IRS
determines that Executive is liable for the Excise Tax as a result of the
receipt of Payments, then Executive shall be obligated to pay back to the
Company, within 30 days after final IRS determination, an amount of the
Payments sufficient that none of the Payments retained by Executive
constitute a "parachute payment" within the meaning of Code Section 280G that
is subject to the Excise Tax.
(e) CERTAIN DEFERRAL OF PAYMENTS. Notwithstanding the other
provisions of this Agreement, to the extent that any amounts payable
hereunder would not be deductible by the Company for federal income tax
purposes on account of the limitations of Section 162(m) of the Code, the
Company may defer payment of such amounts to the earliest one or more
subsequent calendar years in which the payment of such amounts would be
deductible by the Company.
(f) AMENDMENT OR TERMINATION OF THIS AGREEMENT. This Agreement
may be changed or terminated only upon the mutual written consent of the
Company and Executive. The written consent of the Company to a change or
termination of this Agreement must be signed by an appropriate officer of the
Company other than Executive, which may be the Company's Chief Financial
Officer, Vice President of Human Resources or other officer authorized by the
Compensation Committee of the Board, after such change or termination has
been approved by the Compensation Committee of the Board.
7. CONFIDENTIAL INFORMATION; EXECUTIVE'S DUTIES UPON TERMINATION.
Executive recognizes that his employment with the Company will involve
contact with information of substantial value to the Company, which is not
old and generally known in the trade, and which gives the Company an
advantage over its competitors who do not know or use it, including but not
limited to, techniques, designs, drawings, processes, inventions,
developments, equipments, prototypes, sales and customer information, and
business and financial information relating to the business, products,
practices and techniques of the Company, (hereinafter referred to as
"Confidential Information"). Executive will at all times regard and preserve
as confidential such Confidential Information obtained by Executive from
whatever source and will not, either during his employment with the Company
or thereafter, publish or disclose any part of such Confidential Information
in any manner at any time, or use the same except on behalf of the Company,
without the prior written consent of the Company. As a condition of this
Agreement, Executive will sign and return a copy of the Company's
"Proprietary Information and Inventions Agreement," attached as Exhibit B.
8. NONEXCLUSIVITY. Nothing in the Agreement shall prevent or limit
Executive's continuing or future participation in any benefit, bonus,
incentive or other plans, programs, policies or practices provided by the
Company and for which Executive may otherwise qualify, nor shall anything
herein limit or otherwise affect such rights as Executive may have under any
7.
stock option or other agreements with the Company; provided, however, that
any benefits provided hereunder shall be in lieu of any other severance
payments to which Executive may otherwise be entitled, including without
limitation, under any employment contract or severance plan. Except as
otherwise expressly provided herein, amounts which are vested benefits or
which Executive is otherwise entitled to receive under any plan, policy,
practice or program of the Company at or subsequent to the date of
termination shall be payable in accordance with such plan, policy, practice
or program.
9. CONFIDENTIALITY. The parties mutually agree not to disclose
publicly the terms of this Agreement except to the extent that disclosure is
mandated by applicable law.
10. NONSOLICITATION. Executive agrees that for two (2) years after his
employment with the Company is terminated he will not, either directly or
through others, solicit or attempt to solicit any employee, consultant, or
independent contractor of the Company to terminate his or her relationship
with the Company in order to become an employee, consultant or independent
contractor to or for any other person or entity.
11. NOTICES. Any notices called for under this Agreement shall be
given as follows or to such other addresses as either party may furnish the
other from time to time:
IF TO EXECUTIVE: Xxxxxx Xxxxx
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
IF TO THE COMPANY: Intuitive Surgical Devices, Inc.
Xxxxxxxx X. Xxxx
Director
000 Xxxxxx Xxx
Xxxx Xxxx, XX 00000
12. CONFIDENTIAL ARBITRATION. To ensure rapid and economical
resolution of any and all disputes which may arise under this Agreement, the
Company and Executive each agree that any and all disputes or controversies,
whether of law or fact of any nature whatsoever (including, but not limited
to, all state and federal statutory and common law discrimination claims),
with the sole exception of those disputes which may arise from Executive's
Proprietary Information Agreement, arising from or regarding the
interpretation, performance, enforcement or breach of this Agreement, or any
other disputes or claims arising from or related to Executive's employment or
the termination of his employment, shall be resolved by final and binding
confidential arbitration under the procedures set forth in Exhibit C to this
Agreement and the then existing Judicial Arbitration and Mediation Services
Rules of Practice and Procedure (except insofar as they are inconsistent with
the procedures set forth in Exhibit C).
13. SEVERABILITY. If a court of competent jurisdiction determines that
any term or provision of this Agreement is invalid or unenforceable, in whole
or in part, then the remaining
8.
terms and provisions hereof shall be unimpaired. Such court will have the
authority to modify or replace the invalid or unenforceable term or provision
with a valid and enforceable term or provision that most accurately
represents the parties' intention with respect to the invalid or
unenforceable term or provision.
14. WAIVER. If either party should waive any breach of any provisions
of this Agreement, he or it shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement.
15. ENTIRE AGREEMENT. This Agreement, including Exhibits A, B and C,
constitutes the complete, final and exclusive embodiment of the entire
agreement between Executive and the Company with regard to the subject matter
hereof and supersedes any and all prior agreements relating to such subject
matter. This Agreement is entered into without reliance on any promise or
representation, written or oral, other than those expressly contained herein.
It may not be modified except in a writing signed by Executive and a duly
authorized officer of the Company. Each party has carefully read this
Agreement, has been afforded the opportunity to be advised of its meaning and
consequences by his or its respective attorneys, and signed the same of his or
its own free will.
16. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and the Company, and
their respective successors, assigns, heirs, executors and administrators,
except that Executive may not assign any of his duties hereunder and he may
not assign any of his rights hereunder without the written consent of the
Company, which consent shall not be withheld unreasonably.
17. ATTORNEY FEES. If either party hereto brings any action to enforce
his or its rights hereunder, each party in any such action shall be
responsible for his or its costs and attorneys fees incurred in connection
with such action.
18. COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which shall be deemed an original, all of which together shall
constitute one and the same instrument.
9.
19. HEADINGS. The headings of the Sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.
IN WITNESS WHEREOF, the parties have duly authorized and caused this
Agreement to be executed as follows:
XXXXXX XXXXX, INTUITIVE SURGICAL DEVICES, INC.,
an individual a corporation
/s/ Xxxxxx Xxxxx By: /s/ A. Xxxxx Xxxxxxxx
----------------------------- -----------------------------
Xxxxxx Xxxxx Title: Director
--------------------------
Date: 2/28, 1997 Date: 10/2, 1996
---- ----
10.
EXHIBIT A
RELEASE AND WAIVER OF CLAIMS
In exchange for the Severance Payments and other benefits to which I
would not otherwise be entitled, I hereby furnish Intuitive Surgical Devices,
Inc. (the "Company") with the following release and waiver.
I hereby release, and forever discharge the Company, its officers,
directors, agents, employees, stockholders, attorneys, successors, assigns
and affiliates, of and from any and all claims, liabilities, demands, causes
of action, costs, expenses, attorneys fees, damages, indemnities and
obligations of every kind and nature, in law, equity, or otherwise, known and
unknown, suspected and unsuspected, disclosed and undisclosed, arising at
any time prior to and including my employment termination date with respect to
any claims relating to my employment and the termination of my employment,
including but not limited to, claims pursuant to any federal, state or local
law relating to employment, including, but not limited to, discrimination
claims, claims under the California Fair Employment and Housing Act, and the
Federal Age Discrimination in Employment Act of 1967, as amended ("ADEA"),
or claims for wrongful termination, breach of the covenant of good faith,
contract claims, tort claims, and wage or benefit claims, including but not
limited to, claims for salary, bonuses, commissions, stock, stock options,
vacation pay, fringe benefits, severance pay or any form of compensation.
I also acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A GENERAL RELEASE DOES NOT
EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." I hereby expressly waive
and relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to any claims I may have against
the Company.
I acknowledge that, among other rights, I am waiving and releasing any
rights I may have under ADEA, that this waiver and release is knowing and
voluntary, and that the consideration given for this waiver and release is in
addition to anything of value to which I was already entitled as an employee
of the Company. I further acknowledge that I have been advised, as required
by the Older Workers Benefit Protection Act, that: (a) the waiver and release
granted herein does not relate to claims which may arise after this agreement
is executed; (b) I have the right to consult with an attorney prior to
executing this agreement (although I may choose voluntarily not to do so);
(c) I have twenty-one (21) days from the date I receive this agreement, in
which to consider this agreement (although I may choose voluntarily to
execute this agreement earlier); (d) I have seven (7) days following the
execution of this agreement to revoke my consent to the agreement; and (e)
this agreement shall not be effective until the seven (7) day revocation
period has expired.
Date: By:
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EXHIBIT B
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
INTUITIVE SURGICAL DEVICES, INC.
EMPLOYEE PROPRIETY INFORMATION
AND INVENTIONS AGREEMENT
In consideration of my employment or continued employment by INTUITIVE
SURGICAL DEVICES, INC. (the "COMPANY"), and the compensation now and
hereafter paid to me, I hereby agree as follows:
1. NONDISCLOSURE
1.1 RECOGNITION OF COMPANY'S RIGHTS; NONDISCLOSURE. At all times during
my employment and thereafter, I will hold in strictest confidence and will not
disclose, use, lecture upon or publish any of the Company's Proprietary
Information (defined below), except as such disclosure, use or publication
may be required in connection with my work for the Company, or unless an
officer of the Company expressly authorizes such in writing. I will obtain
Company's written approval before publishing or submitting for publication
any material (written, verbal, or otherwise) that relates to my work at
Company and/or incorporates any Proprietary Information. I hereby assign to
the Company any rights I may have or acquire in such Proprietary Information
and recognize that all Proprietary Information shall be the sole property of
the Company and its assigns.
1.2 PROPRIETARY INFORMATION. The term "PROPRIETARY INFORMATION" shall
mean any and all confidential and/or proprietary knowledge, data or
information of the Company. By way of illustration but not limitation,
"PROPRIETARY INFORMATION" includes (a) information relating to products,
processes, know-how, designs, drawings, clinical data, test data, formulas,
methods, samples, media and/or cell lines, developmental or experimental
work, improvements, discoveries, plans for research, new products,
manufacturing, marketing and selling, business plans, budgets and unpublished
financial statements, licenses, prices and costs, suppliers and customers,
and information regarding the skills and compensation of other employees of
the Company (hereinafter collectively referred to as "INVENTIONS");
(b) information regarding plans for research, development, new products,
marketing and selling, business plans, budgets and unpublished financial
statements, licenses, prices and costs, suppliers and customers; and
(c) information regarding the skills and compensation of other employees of
the Company. Notwithstanding the foregoing, it is understood that, at all such
times, I am free to use information which is generally known in the trade or
industry, which is not gained as a result of a breach of this Agreement, and
my own, skill, knowledge, know-how and experience to whatever extent and in
whichever way I wish.
1.3 THIRD PARTY INFORMATION. I understand, in addition, that the
Company has received and in the future will receive from third parties
confidential or proprietary information ("THIRD PARTY INFORMATION") subject
to a duty on the Company's part to maintain the confidentiality of such
information and to use it only for certain limited purposes. During the term
of my employment and thereafter, I will hold Third Party Information in the
strictest confidence and will not disclose to anyone (other than Company
personnel who need to know such information in connection with their work for
the Company) or use, except in connection with my work for the Company, Third
Party Information unless expressly authorized by an officer of the Company in
writing.
1.4 NO IMPROPER USE OF INFORMATION OF PRIOR EMPLOYERS AND OTHERS.
During my employment by the Company I will not improperly use or disclose any
confidential information or trade secrets, if any, of any former employer or
any other person to whom I have an obligation of confidentiality, and I will
not bring onto the premises of the Company any unpublished documents or any
property belonging to any former employer or any other person to whom I have
an obligation of confidentiality unless consented to in writing by that former
employer or person. I will use in the performance of my duties only
information which is generally known and used by persons with training and
experience comparable to my own, which is common knowledge in the industry or
otherwise legally in the public domain, or which is otherwise provided or
developed by the Company.
2. ASSIGNMENT OF INVENTIONS.
2.1 PROPRIETARY RIGHTS. The term "PROPRIETARY RIGHTS" shall mean all
trade secret, patent, copyright, mask work and other intellectual property
rights throughout the world.
2.2 PRIOR INVENTIONS. Inventions, if any, patented or unpatented, which
I made prior to the commencement of my employment with the Company are
excluded from the scope of this Agreement. To preclude any possible
uncertainty, I have set forth on EXHIBIT B (Previous Inventions) attached
hereto a complete list of all
1.
Inventions that I have, alone or jointly with others, conceived, developed or
reduced to practice or caused to be conceived, developed or reduced to
practice prior to the commencement of my employment with the Company, that I
consider to be my property or the property of third parties and that I wish
to have excluded from the scope of this Agreement (collectively referred to as
"PRIOR INVENTIONS"). If disclosure of any such Prior Invention would cause me
to violate any prior confidentiality agreement, I understand that I am not to
list such Prior Inventions in EXHIBIT B but am only to disclose a cursory
name for each such invention, a listing of the party(ies) to whom it belongs
and the fact that full disclosure as to such inventions has not been made for
that reason. A space is provided on EXHIBIT B for such purpose. If no such
disclosure is attached, I represent that there are no Prior Inventions. If,
in the course of my employment with the Company, I incorporate a Prior
Invention into a Company product, process or machine, the Company is hereby
granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual,
worldwide license (with rights to sublicense through multiple tiers of
sublicensees) to make, have made, modify, use and sell such Prior Invention.
Notwithstanding the foregoing, I agree that I will not incorporate, or permit
to be incorporated, Prior Inventions in any Company Inventions without the
Company's prior written consent.
2.3 ASSIGNMENT OF INVENTIONS. Subject to Sections 2.4, and 2.6, I
hereby assign and agree to assign in the future (when any such Inventions or
Proprietary Rights are first reduced to practice or first fixed in a tangible
medium, as applicable) to the Company all my right, title and interest in and
to any and all Inventions (and all Proprietary Rights with respect thereto)
whether or not patentable or registrable under copyright or similar statutes,
made or conceived or reduced to practice or learned by me, either alone or
jointly with others, during the period of my employment with the Company.
Inventions assigned to the Company, or to a third party as directed by the
Company pursuant to this Section 2, are hereinafter referred to as "COMPANY
INVENTIONS."
2.4 NONASSIGNABLE INVENTIONS. This Agreement does not apply to an
Invention which qualifies fully as a nonassignable Invention under Section
2870 of the California Labor Code (hereinafter "SECTION 2870"). I have
reviewed the notification on EXHIBIT A (Limited Exclusion Notification) and
agree that my signature acknowledges receipt of the notification.
2.5 OBLIGATION TO KEEP COMPANY INFORMED. During the period of my
employment and for six (6) months after termination of my employment with the
Company, I will promptly disclose to the Company fully and in writing all
Inventions authored, conceived or reduced to practice by me, either alone or
jointly with others. In addition, I will promptly disclose to the Company all
patent applications filed by me or on my behalf within a year after
termination of employment. At the time of each such disclosure, I will advise
the Company in writing of any Inventions that I believe fully qualify for
protection under Section 2870; and I will at that time provide to the Company
in writing all evidence necessary to substantiate that belief. The Company
will keep in confidence and will not use for any purpose or disclose to third
parties without my consent any confidential information disclosed in writing
to the Company pursuant to this Agreement relating to Inventions that qualify
fully for protection under the provisions of Section 2870. I will preserve the
confidentiality of any Invention that does not fully qualify for protection
under Section 2870.
2.6 GOVERNMENT OR THIRD PARTY. I also agree to assign all my right,
title and interest in and to any particular Invention to a third party,
including without limitation the United States, as directed by the Company.
2.7 WORKS FOR HIRE. I acknowledge that all original works of authorship
which are made by me (solely or jointly with others) within the scope of my
employment and which are protectable by copyright are "works made for hire,"
pursuant to United States Copyright Act (17 U.S.C., Section 101).
2.8 ENFORCEMENT OF PROPRIETARY RIGHTS. During and after my employment
with the Company, I will assist the Company in every proper way to obtain,
and from time to time enforce, United States and foreign Proprietary Rights
relating to Company Inventions in any and all countries. To that end I will
execute, verify and deliver such documents and perform such other acts
(including appearances as a witness) as the Company may reasonably request
for use in applying for, obtaining, perfecting, evidencing, sustaining and
enforcing such Proprietary Rights and the assignment thereof. In addition, I
will execute, verify and deliver assignments of such Proprietary Rights to
the Company or its designee. My obligation to assist the Company with respect
to Proprietary Rights relating to such Company Inventions in any and all
countries shall continue beyond the termination of my employment, but the
Company shall compensate me at a reasonable rate after my termination for the
time actually spent by me at the Company's request on such assistance.
In the event the Company is unable for any reason, after reasonable
effort, to secure my signature on any document needed in connection with the
actions specified
2.
in the preceding paragraph. I hereby irrevocably designate and appoint the
Company and its duly authorized officers and agents as my agent and attorney
in fact, which appointment is coupled with an interest, to act for and in my
behalf to execute, verify and file any such documents and to do all other
lawfully permitted acts to further the purposes of the preceding paragraph
with the same legal force and effect as if executed by me. I hereby waive and
quitclaim to the Company any and all claims, of any nature whatsoever, which
I now or may hereafter have for infringement of any Proprietary Rights
assigned hereunder to the Company.
3. RECORDS. I agree to keep and maintain adequate and current records (in
the form of notes, sketches, drawings and in any other form that may be
required by the Company) of all Proprietary Information developed by me and
all Inventions made by me during the period of my employment at the Company,
which records shall be available to and remain the sole property of the
Company at all times.
4. ADDITIONAL ACTIVITIES. I agree that during the period of my employment
by the Company I will not, without the Company's express written consent,
engage in any employment or business activity which is competitive with, or
would otherwise conflict with, my employment by the Company.
5. NON-SOLICITATION. I agree that, during the term of my employment with
the Company, and for a period of one (1) year following the date of my
termination of employment with the Company, I will not form a business
relationship with, offer to employ, or arrange employment of, anyone who is
at that time employed by the Company or has been employed by the Company for
any period of time during the previous six (6) months, nor shall I induce any
employee of the Company to leave the employ of the Company.
6. NO CONFLICTING OBLIGATION. I represent that my performance of all the
terms of this Agreement and as an employee of the Company does not and will
not breach any agreement to keep in confidence information acquired by me in
confidence or in trust prior to my employment by the Company. I have not
entered into, and I agree I will not enter into, any agreement either written
or oral in conflict herewith.
7. RETURN OF COMPANY DOCUMENTS. When I leave the employ of the Company, I
will deliver to the Company any and all drawings, notes, memoranda,
specifications, devices, formulas, and documents, together with all copies
thereof, and any other material containing or disclosing any Company
Inventions, Third Party Information or Proprietary Information of the
Company. I further agree that any property situated on the Company's
premises and owned by the Company, including disks and other storage media,
filing cabinets or other work areas, is subject to inspection by Company
personnel at any time with or without notice. Prior to leaving, I will
cooperate with the Company in completing and signing the Company's
termination statement.
8. LEGAL AND EQUITABLE REMEDIES. Because my services are personal and
unique and because I may have access to and become acquainted with the
Proprietary Information of the Company, the Company shall have the right to
enforce this Agreement and any of its provisions by injunction, specific
performance or other equitable relief, without bond and without prejudice to
any other rights and remedies that the Company may have for a breach of this
Agreement.
9. NOTICES. Any notices required or permitted hereunder shall be given
to the appropriate party at the address specified below or at such other
address as the party shall specify in writing. Such notice shall be deemed
given upon personal delivery to the appropriate address or if sent by
certified or registered mail, three (3) days after the date of mailing.
10. NOTIFICATION OF NEW EMPLOYER. In the event that I leave the employ of
the Company, I hereby consent to the notification of my new employer of my
rights and obligations under this Agreement.
11. GENERAL PROVISIONS.
11.1 GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This Agreement
will be governed by and construed according to the laws of the State of
California, as such laws are applied to agreements entered into and to be
performed entirely within California between California residents. I hereby
expressly consent to the personal jurisdiction of the state and federal
courts located in Santa Xxxxx County, California for any lawsuit filed there
against me by Company arising from or related to this Agreement.
11.2 SEVERABILITY. In case any one or more of the provisions contained
in this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. If moreover, any one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively
broad as to duration, geographical scope, activity or subject, it shall be
construed by limiting and
3.
reducing it, so as to be enforceable to the extent compatible with the
applicable law as it shall then appear.
11.3 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon my
heirs, executors, administrators and other legal representatives and will be
for the benefit of the Company, its successors, and its assigns.
11.4 SURVIVAL. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the
Company to any successor in interest or other assignee.
11.5 AT-WILL EMPLOYMENT. I agree and understand that nothing in this
Agreement shall confer any right with respect to continuation of employment
by the Company, nor shall it interfere in any way with my right or the
Company's right to terminate my employment at any time, for any reason, with
or without cause, and with or without notice.
11.6 WAIVER. No waiver by the Company of any breach of this Agreement
shall be a waiver of any preceding or succeeding breach. No waiver by the
Company of any right under this Agreement shall be construed as a waiver of
any other right. The Company shall not be required to give notice to enforce
strict adherence to all terms of this Agreement.
11.7 ENTIRE AGREEMENT. The obligations pursuant to Sections 1 and 2 of
this Agreement shall apply to any time during which I was previously
employed, or am in the future employed, by the Company as a consultant if no
other agreement governs nondisclosure and assignment of inventions during
such period. This Agreement is the final, complete and exclusive agreement
of the parties with respect to the subject matter hereof and supersedes and
merges all prior discussions between us. No modification of or amendment to
this Agreement, nor any waiver of any rights under this Agreement, will be
effective unless in writing and signed by the party to be charged. Any
subsequent change or changes in my duties, salary or compensation will not
affect the validity or scope of this Agreement.
This Agreement shall be effective as of the first day of my employment
with the Company, namely:
4/1/97 .
------------
4.
I HAVE READ THIS AGREEMENT CAREFULLY AND ACCEPTED AND AGREED TO:
UNDERSTAND ITS TERMS. I HAVE COMPLETELY
FILLED OUT EXHIBIT B TO THIS AGREEMENT. INTUITIVE SURGICAL DEVICES, INC.
Dated: 2/28/97 By:
-------------------- --------------------------
/s/ Xxxxxx X. Xxxxx
---------------------------------- Title:
Signature -----------------------
Xxxxxx X. Xxxxx
---------------------------------- Address: 000 Xxxxxx Xxx
(Printed Name) Xxxx Xxxx, XX 00000
00 Xxxxxxxx Xxxx
----------------------------------
(Address)
Xxxxxxxxxx, Xx 00000
----------------------------------
5.
EXHIBIT A
LIMITED EXCLUSION NOTIFICATION
THIS IS TO NOTIFY you in accordance with Section 2872 of the California
Labor Code that the foregoing Agreement between you and the Company does not
require you to assign or offer to assign to the Company any invention that
you developed entirely on your own time without using the Company's
equipment, supplies, facilities or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to practice of the
invention to the Company's business, or actual or demonstrably anticipated
research or development of the Company;
(2) Result from any work performed by you for the Company.
To the extent a provision in the foregoing Agreement purports to require
you to assign an invention otherwise excluded from the preceding paragraph,
the provision is against the public policy of this state and is unenforceable.
This limited exclusion does not apply to any patent or invention covered
by a contract between the Company and the United States or any of its
agencies requiring full title to such patent or invention to be in the United
States.
I ACKNOWLEDGE RECEIPT of a copy of this notification.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Xxxxxx Xxxxx
Date: 2/28/97
-----------------------------
WITNESSED BY:
-----------------------------
(Printed Name of Representative)
Dated:
----------------------
A-1.
EXHIBIT B
TO: Intuitive Surgical Devices, Inc.
FROM: Xxxxxx Xxxxx ( /s/ Xxxxxx Xxxxx )
-------------------
signature
DATE: 2/28/97
SUBJECT: Previous Inventions
1. Except as listed in Section 2 below, the following is a complete
list of all inventions or improvements relevant to the subject matter of my
employment by [Company] (the "COMPANY") that have been made or conceived or
first reduced to practice by me alone or jointly with others prior to my
engagement by the Company:
/x/ No inventions or improvements.
/ / See below:
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
/ / Additional sheets attached.
2. Due to a prior confidentiality agreement, I cannot complete the
disclosure under Section 1 above with respect to inventions or improvements
generally listed below, the proprietary rights and duty of confidentiality
with respect to which I owe to the following party(ies):
INVENTION OR IMPROVEMENT PARTY(IES) RELATIONSHIP
1. ------------------------- -------------------- -----------------------
2. ------------------------- -------------------- -----------------------
3. ------------------------- -------------------- -----------------------
/ / Additional sheets attached.
B-1.
EXHIBIT C
ARBITRATION PROCEDURE
1. The parties agree that any dispute that arises in connection with
this Agreement or the termination of this Agreement shall be resolved by
binding arbitration in the manner described below.
2. A party intending to seek resolution of any dispute under the
Agreement by arbitration shall provide a written demand for arbitration to
the other party, which demand shall contain a brief statement of the issues
to be resolved.
3. The arbitration shall be conducted in San Jose, California by a
mutually acceptable retired judge from the panel of Judicial Arbitration and
Mediation Services, Inc. ("JAMS"). At the request of either party,
arbitration proceedings will be conducted in the utmost secrecy and, in such
case, all documents, testimony and records shall be received, heard and
maintained by the arbitrator in secrecy under seal, available for inspection
only by the parties to the arbitration, their respective attorneys, and their
respective expert consultants or witnesses who shall agree, in advance and in
writing, to receive all such information confidentially and to maintain such
information in secrecy, and make no use of such information except for the
purposes of the arbitration, unless compelled by legal process.
4. The arbitrator is required to disclose any circumstances that
might preclude the arbitrator from rendering an objective and impartial
determination. In the event the parties cannot mutually agree upon the
selection of a JAMS arbitrator, the President and Vice-President of JAMS
shall designate the arbitrator.
The party demanding arbitration shall promptly request that JAMS conduct
a scheduling conference within fifteen (15) days of the date of that party's
written demand for arbitration or on the first available date thereafter on
the arbitrator's calendar. The arbitration hearing shall be held within
thirty (30) days after the scheduling conference or on the first available
date thereafter on the arbitrator's calendar. Nothing in this paragraph shall
prevent a party from at any time seeking temporary equitable relief, from
JAMS or any court of competent jurisdiction, to prevent irreparable harm
pending the resolution of the arbitration.
5. Discovery shall be conducted as follows: (a) prior to the
arbitration any party may make a written demand for lists of the witnesses to
be called and the documents to be introduced at the hearing; (b) the lists
must be served within fifteen days of the date of receipt of the demand, or
one day prior to the arbitration, whichever is earlier; and (c) each party
may take no more than two depositions (pursuant to the procedures set forth
in the California Code of Civil Procedure) with a maximum of five hours of
examination time per deposition, and no other form of pre-arbitration
discovery shall be permitted.
6. It is the intent of the parties that the Federal Arbitration Act
("FAA") shall apply to the enforcement of this provision unless it is held
inapplicable by a court with jurisdiction over the dispute, in which event
the California Arbitration Act ("CAA") shall apply.
7. The arbitrator shall apply California law, including the
California Evidence Code, and shall be able to decree any and all relief of
an equitable nature, including but not limited to such relief as a temporary
restraining order, a preliminary injunction, a permanent injunction, or
replevin of Company property. The arbitrator shall also be able to award
actual, general or consequential damages, but shall not award any other form
of damage (e.g., punitive damages).
8. Each party shall pay its pro rata share of the arbitrator's fees
and expenses, in addition to other expenses of the arbitration approved by
the arbitrator, pending the resolution of the arbitration. The arbitrator
shall have authority to award the payment of such fees and expenses to the
prevailing party, as appropriate in the discretion of the arbitrator. Each
party shall pay its own attorneys fees, witness fees and other expenses
incurred for its own benefit.
9. The arbitrator shall render a written award setting forth the
reasons for his or her decision. The decree or judgment of an award rendered
by the arbitrator may be entered and enforced in any court having
jurisdiction over the parties. The award of the arbitrator shall be final and
binding upon the parties without appeal or review except as permitted by the
FAA, or if the FAA is not applicable, as permitted by the CAA.
