EXHIBIT 10.29
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered
into effective as of December 6, 2001, by and between THORATEC CORPORATION, a
California corporation (the "Company"), and D. Xxxxx Xxxxxxxx ("Employee").
THE PARTIES AGREE AS FOLLOWS:
1. Employment; Nomination to Board. During the term of this Agreement,
Employee shall serve as the President and Chief Executive Officer of the
Company, subject to policies of the Company and the terms and conditions of this
Agreement regarding termination. If there is any conflict or contradiction
between this Agreement and any written Company policy, this Agreement shall
control. Employee agrees to perform to the best of his ability and on a
full-time basis the employment duties assigned to him by the Company. Employee
shall report to the Board of Directors of the Company. During the period that
Employee serves as President and Chief Executive Officer he shall be nominated
as a member of management's slate for election to the Board of Directors.
2. Compensation.
2.1 Base Salary and Bonus. The Company agrees to pay Employee
and Employee agrees to accept, for Employee's services under this Employment
Agreement, base salary at the annual rate of $350,000.00 and a bonus of up to
seventy-five percent (75%) of such amount per calendar year. Bonuses shall be
paid based on achievement of mutually agreed goals for the Company. Employee and
one or more representatives of the Board of Directors of the Company shall meet
on or before January 31 of each year to determine the goals and formula for
bonus payment for each year of employment under this Agreement. Notwithstanding
the foregoing, the base salary may be increased annually at the sole discretion
of the Board of Directors and the Compensation and Option Committee of the Board
of Directors (the "Committee") consistent with the review of Employee as
provided in Section 2.2 of this Agreement.
2.2 Review. Salary and performance reviews will occur each year
so that this salary information can be submitted in the preliminary budget
submission to the Board. Specific goals and formula for bonus payment will be
finalized and included in the approved budget for the next year.
3. Stock Options. Employee will be eligible for annual grants of stock
options in such amounts, if any, determined by the sole discretion of the Board
of Directors and the Committee. Notwithstanding the terms of any agreements
related to the grant of stock options to Employee to the contrary, all options
granted to Employee shall immediately vest and become one hundred percent (100%)
exercisable upon the earliest
to occur of the death or "Disability" of Employee (as hereinafter defined) or
upon the occurrence of a "Change in Control," in each case as such latter two
quoted terms are defined in the Company's Executive Officer Severance Benefit
Plan dated July 11, 1998 (the "Severance Plan"). For purposes of this Section 3,
"Disability" or "Disabled" shall mean a bodily or mental injury or disease which
prevents Employee from engaging in any executive employment for a period of six
(6) consecutive months prior to termination, as determined and certified to the
Company and Employee by one or more physicians licensed in the State of
California and designated for that purpose by the Board of Directors, the fees
of which physician(s) fees for such determination and certification will be paid
by the Company. Options must be exercised within the time period specified in
the option agreement and option plan related to any such option as if such death
or Disability were treated as a termination of employment.
4. Restricted Stock. Employee may be eligible for the granting to him of
restricted stock as described in this Section 4, for such number of shares, if
any, as is determined by the Board of Directors and the Committee in the sole
discretion of the Board and the Committee. Notwithstanding the terms of any
agreements related to the grant of such restricted stock to Employee to the
contrary, upon the occurrence of a Change in Control, as defined in the
Severance Plan (which definition is incorporated herein by reference), (a) the
restrictions on each share of restricted stock granted to Employee shall, upon
such occurrence, immediately lapse as to fifty percent (50%) of the number of
shares thereunder that at such date are still restricted, and (b) upon the
earlier of (i) the one (1) year anniversary of the effective date of such Change
in Control, or (ii) such date after the date of such Change in Control as
Employee's employment is voluntarily terminated for "Good Reason" (as defined in
Section 8 hereof) or his employment is involuntary terminated for any reason,
the restrictions on each share of restricted stock shall immediately lapse as to
the remainder, if any, of the shares under such grant that are then still
otherwise restricted.
5. Benefits.
5.1 Benefits Generally. Employee shall be provided health
insurance and the other benefit programs, including any long-term disability
benefits, as are available to senior management employees of the Company.
5.2 Life Insurance. The Company agrees to purchase and maintain
an insurance policy on the life of the Employee, the form and terms of which to
be acceptable to both Company and Employee, with a benefit payment to the
beneficiary of Employee's designation equal to $5,000,000.00, which insurance
policy shall be in addition to other benefits for which Employee is eligible as
part of any group life insurance benefits provided to all employees of the
Company.
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5.3 Previous Severance Plan. In addition to the benefits provided in
this Agreement, Employee shall also be eligible for all of the benefits provided
in accordance with the Severance Plan subject to the following limitations:
(a) the benefits provided in the Severance Plan under the
captions "Severance Pay Benefit -- Standard" and "Severance Pay Benefit --
Change in Control" shall not be available to Employee and instead the benefits
provided in Section 8 of this Agreement shall apply to Employee in lieu of such
Severance Plan benefits; and
(b) the benefits provided in the Severance Plan under the
caption "Gross-Up for Excise Tax" shall apply to any benefits provided pursuant
to this Agreement.
A copy of the Severance Plan as in effect on the date hereof is attached
to this Agreement.
6. Outside Employment.
6.1 Other Affiliations. Employee shall not perform consultation
or other services for any other company, corporation, or other commercial
enterprise (other than for subsidiaries or affiliates of the Company), during
the term of his employment under this Agreement; provided, however, that with
the prior consent of the Board of Directors Employee may serve as a member of
the Board of Directors of one or more corporations that do not directly or
indirectly compete with the Company, as determined in the sole discretion of the
Board of Directors. Notwithstanding the foregoing, Employee shall be subject to
Section 7 of this Agreement related to confidential information of the Company
at all times that Employee serves on any such other Board of Directors.
6.2 Conflict of Interest. Employee warrants that (a) he is not
obligated under any other employment, consulting, or other agreement which would
affect the Company's rights, or Employee's duties, under this Agreement and (b)
this Agreement is not in conflict with Employee's commitments to any party.
7. Confidentiality.
7.1 Protection of Information. Employee shall not, without the
prior written consent of the Company, divulge to unauthorized persons, or use
for any unauthorized purpose, either during or after his employment, any
Confidential Information (as defined in Section 7.3 hereof). Employee shall use
his best efforts and exercise due diligence to protect and guard Confidential
Information within his possession and/or under his control.
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7.2 Records. All notes, memoranda, reports, drawings, manuals,
materials, data and any papers or records of every kind which are now in
Employee's possession owned by the Company or developed or generated by Employee
in the course of his employment under this Employment Agreement which contain
Confidential Information shall be the sole and exclusive property of the
Company. This property shall be surrendered to the Company upon termination of
this Agreement or upon request by the Company at any time either during or after
the termination of employment, and no copies, notes, or excerpts thereof shall
be retained by Employee.
7.3 Confidential Information. For the purposes of this
Employment Agreement, "Confidential Information" shall mean information as set
forth below disclosed to Employee or known to Employee as a consequence of or
through performance of services for the Company and its subsidiaries or
affiliates, whether or not related to his duties as an employee of the Company.
Such information shall include trade secrets or any other like information of
value relating to the business, including actual research and development, of
the Company or of any corporation, firm or partnership directly or indirectly
controlled by or controlling the Company or in which the Company or any of its
affiliates has more than a twenty percent (20%) ownership interest for which
Employee renders services. Information shall be considered, for purposes of this
Employment Agreement, to be confidential if not known publicly, even though such
information has been disclosed to one or more third parties pursuant to
distribution agreements, or other agreements entered into by the Company or any
of its affiliates. For purposes of this Employment Agreement, information shall
not be considered confidential to the extent that such information is or becomes
through no fault of Employee, part of the public domain, such information is
independently known to Employee, or such information is lawfully furnished to
Employee by a third party without restriction on disclosure.
8. Term and Termination.
8.1 Term. This Agreement shall have a term of five (5) years
commencing December 6, 2001.
8.2 Termination.
(a) With Cause. This Agreement may be terminated by the
Company with "Cause" (as defined as provided in Section 8.3 hereof) immediately
upon written notice by the Company to Employee. This Agreement may be terminated
by Employee at any time and for any reason upon at least thirty (30) days' prior
written notice to the Company of such termination. If this Agreement is
terminated by the Company for Cause or by Employee, except for Good Reason,
Employee shall receive no termination benefits.
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(b) Disability. If Employee shall become Disabled or die
while employed, he (or his estate) shall not be entitled to receive any
severance payment but shall receive only the benefit payments pursuant to any
applicable Company benefit plans, including any long-term disability plans
adopted by the Company and disability benefits set forth in the Severance Plan.
(c) Without Cause. If this Agreement is terminated by
the Company without Cause, or is terminated by Employee for Good Reason,
Employee shall receive a termination payment of two (2) times his then current
base salary which shall be payable ratably during the twelve (12) months after
termination in accordance with the Company's normal payroll procedures or within
thirty (30) days after termination as a lump sum payment, at Employee's
discretion communicated by him to the Company in writing, and in each case
subject to any necessary withholdings. This Section 8.2(c) shall be in lieu of
all benefits of the Severance Plan under the caption "Severance Pay Benefit --
Standard".
(d) Change in Control. If this Agreement is terminated
by Employee for "Good Reason" after a Change in Control, or if Employee is
terminated by the Company for any reason after a Change in Control, Employee
shall receive a termination payment of two and one-half times the sum of (i) his
then current base salary, and (ii) the greatest of (a) the prior year's target
bonus, (b) the current year's actual bonus, or (c) the current year's target
bonus which shall be payable ratably during the 12 months after termination in
accordance with the Company's normal payroll procedures or within 30 days after
termination as a lump sum payment, at Employee's discretion, in each case
subject to any necessary withholdings. This Section 7.2(d) shall be in lieu of
all change in control benefits of the Severance Plan under the caption
"Severance Pay Benefit -- Change in Control."
8.3 Cause. "Cause" shall have the meaning set forth in the
Severance Plan.
8.4 Good Reason. "Good Reason" shall have the meaning set forth
in the Severance Plan.
8.5 Change in Control. "Change in Control" shall have the
meaning set forth in the Severance Plan.
8.6 Good Faith and Fair Dealing. The Company acknowledges its
obligation of good faith and fair dealing under California law in the
performance of this Agreement and further acknowledges that any determination
pursuant to Sections 8.3 and Section 8.4 hereof shall be made in good faith by
the Board of Directors and not with a view to unfairly deny Employee the
benefits of this Agreement.
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9. Injunctive Relief. Employee acknowledges that the Company will suffer
substantial damages not readily ascertainable or compensable in terms of money
in the event of a breach of any Employee's obligations under Sections 5 and 6 of
this Agreement. Employee therefore agrees that the Company shall be entitled
(without limitation of any other rights or remedies otherwise available to the
Company) to obtain an injunction from any court of competent jurisdiction
prohibiting the continuance or recurrence of any such breach of this Agreement
by Employee.
10. Binding Effect. This Agreement shall constitute the respective
legal, valid and binding obligation of Employee and the Company in accordance
with its terms, and shall inure to the benefit of and be binding upon the
Company and Employee and their respective successors and assigns, and Employee's
heirs, executors and administrators.
11. Notice. Any notice required or permitted hereunder shall be in
writing and shall be given by personal delivery, facsimile or Unites States
mail, certifies or registered with return receipt requested, postage prepaid,
and shall be deemed to have been duly given three (3) days after the mailing or
on the date of service if delivered personally or the first day after
transmission if sent by facsimile to the other party at the following addresses,
or such other address as one party may from time to time give the other in
writing:
If to the Company: Thoratec Corporation
Attention: Chairman
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
If to Employee: D. Xxxxx Xxxxxxxx
c/o Thoratec Corporation
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
12. Survival of Certain Agreements. The covenants and agreements
contained in Section 7 of this Agreement shall be continuous and shall survive
the termination of this Agreement and shall remain in full force and effect
regardless of the cause of such termination.
13. Captions. The captions to Sections of this Agreement have been
inserted for identification and reference purposes and shall not by themselves
determine the construction or interpretation of this Agreement.
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14. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but both of which together shall
constitute one and the same instrument.
15. Governing Law. This Agreement shall be construed in accordance with,
and shall be governed by, the procedural and substantive laws of the State of
California.
16. Arbitration. Any and all disputes arising from or related to this
Agreement shall be resolved by binding arbitration, pursuant to the rules of the
American Arbitration Association then in effect, to be held in the county in
which the Company's headquarters are located.
17. Entire Agreement and Modifications. This Agreement, together with
the Severance Plan, including such provisions thereof as are modified by this
Agreement, constitutes and contains the entire agreement of the parties as to
the specific subject matter than and supersedes any an all prior and
contemporaneous negotiations, correspondence, understandings and agreements
between the parties respecting the subject matter hereof, provided that all of
Employee's rights under his Employment Agreement with the Company immediately
preceding the Effective Date which are not discharged as of the Effective Date
shall survive the termination of such prior Employment Agreement by this
Agreement until discharged. This Agreement may be amended only by a written
instrument signed by the Company and by Employee or his duly authorized
representative.
THORATEC CORPORATION
By: /s/ J. Xxxxxx Xxxx
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J. Xxxxxx Xxxx
Chairman of the Board
AGREED:
/s/ D. Xxxxx Xxxxxxxx
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D. Xxxxx Xxxxxxxx
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