EXHIBIT 10.8
CARDIAC SCIENCE, INC.
EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT (the "Agreement") is dated as of January 28, 2002
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by and between XXX X.X. SOHIE ("Employee") and CARDIAC SCIENCE INC., a Delaware
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corporation (the "Company").
1. Term of Agreement. This Agreement shall commence on the date
executed and shall be a term of twelve (12) months (the "Original Term"). This
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Agreement shall continue after the end of Original Term and shall automatically
renew for successive 12-month periods under the same terms and conditions of
this Agreement, with Compensation in Section 4, which may be revised based upon
mutual agreement. The Original Term and any 12-month period commencing
immediately after the end of any Term shall each be referred to as a "Term."
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2. Duties.
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(a) Position. Employee shall be employed as Sr. Vice President,
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Operations and as such will have responsibility for the duties typically
associated with such positions and will report to the Company's Chief Executive
Officer and Board of Directors.
(b) Obligations to the Company. Employee agrees to the best of
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his ability and experience that he will perform all of the duties and
obligations reasonably required of and from Employee pursuant to the express and
implicit terms hereof. During the term of Employee's employment relationship
with the Company, Employee further agrees that he will devote his business time
and attention to the business of the Company.
3. At-Will Employment. The Company and Employee acknowledge that
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Employee's employment is and shall continue to be at-will, as defined under
applicable law, and that Employee's employment with the Company may be
terminated by either party at any time after the Original Term for any or no
reason. If Employee's employment terminates for any reason, Employee shall not
be entitled to any payments, benefits, damages, award or compensation other than
as provided in this Agreement. The rights and duties created by this Section 3
may not be modified in any way except by a written agreement executed by the
Company.
4. Compensation. For the duties and services to be performed by
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Employee hereunder, the Company shall pay Employee, and Employee agrees to
accept the salary, stock options, bonuses and other benefits described below in
this Section 4.
(a) Salary. Renewal of Employment Agreement to include a base
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salary of $185,000 ($15,416.67 per month). Employee's monthly salary will be
payable pursuant to the Company's normal payroll practices. In the event this
Agreement is extended beyond the Original Term, the base salary shall be
reviewed at the time of such extension by the Board of Directors, its
Compensation Committee or the Chief Executive Officer of the Company, and any
increase will be effective as of the date determined appropriate by the Board,
its Compensation Committee or the Chief Executive Officer.
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(b) Bonuses. Employee will be eligible to receive a target
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bonus opportunity of $40,000, to be paid as follows:
1. Closing of Denmark factory and establishing "Parts, Service, and Accessories"
operation by July 15, 2002.......................................................... $15,000 bonus (as occurs)
2. Completion of the "corrective action" program within the allotted 6 months.......... $5,000 bonus (as occurs)
3. CRM in commercial production by March 31, 2002...................................... $5,000 bonus (end of year)
4. 2002 COGs reduction of 15% on AEDs.................................................. $5,000 bonus (end of year)
5. 2002 Direct Labor cost reduction of 15% on AEDs..................................... $5,000 bonus (end of year)
6. Implementation of "Quality College" in 2002........................................ $5,000 bonus (end of year)
In the event of Employee's Involuntary Termination (as defined below),
death or Disability (as defined below) or a Change of Control (as defined below)
during the term of this Agreement, the Company shall pay to Employee or
Employee's estate a pro rata portion of Employee's target bonus for such year
based on the portion of the year Employee worked for the Company.
(c) Additional Benefits. Employee will be eligible to participate
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in the Company's employee benefit plans of general application, including
without limitation, those plans covering medical, disability and life insurance
in accordance with the rules established for individual participation in any
such plan and under applicable law. Employee will receive three (3) weeks paid
vacation and will be eligible for sick leave in accordance with the policies in
effect during the term of this Agreement and will receive such other benefits as
the Company generally provides to its other employees of comparable position and
experience.
(d) Stock Options and Other Incentive Programs. Employee shall
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be eligible to participate in any stock option or other incentive programs
available to officers or employees of the Company.
(e) Reimbursement of Business Expenses. Employee shall be
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authorized to incur on behalf and for the benefit of, and shall be reimbursed
by, the Company for reasonable expenses, provided that such expenses are
substantiated in accordance with Company policies.
5. Confidential Information
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5.1 Employee acknowledges that, because of his employment
hereunder, he will be in a confidential relationship with the Company and will
have access to confidential information and trade secrets of the Company.
Employee acknowledges and agrees that the following constitutes confidential
and/or trade secret information belonging exclusively to Company (collectively
"Confidential Information"):
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(a) all information related to customers including, without
limitation, customer lists, the identities of existing, past or prospective
customers, prices charged or proposed to be charged to customers, customer
contacts, special customer requirements and all related information;
(b) marketing plans, materials and techniques; and
(c) all know-how, devices, compilations of information,
copyrightable material and technology and technical information, relating to
the business of the Company.
5.2 Employee agrees that except in the limited performance of
his duties under this Agreement, Employee shall not use for his own benefit or
disclose to any third-party Confidential Information acquired by reason of his
employment under this Agreement or his former status as officer of the Company.
5.3 This Section 5 shall survive termination of this Agreement.
6. Company Property.
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6.1 Any patents, inventions, discoveries, applications or
processes, software and computer programs devised, planned, applied, created,
discovered or invented by Employee in the course of his employment under this
Agreement and which pertain to any aspect of the business of the Company, or its
subsidiaries, affiliates or customers, shall be the sole and absolute property
of the Company, and Employee shall make prompt report thereof to the Company and
promptly execute any and all documents reasonably requested to assure the
Company the full and complete ownership thereof.
6.2 All records, files, lists, drawings, documents, equipment
and similar items relating to the Company's business which Employee shall
prepare or receive from the Company shall remain the Company's sole and
exclusive property. Upon termination of this Agreement, Employee shall return
promptly to the Company all property of the Company in his possession and
Employee represents that he will not copy, or cause to be copied, printed,
summarized or compiled, any software, documents or other materials originating
with and/or belonging to the Company. Employee further represents that he will
not retain in his possession any such software, documents or other materials in
machine or human readable forms.
6.3 This Section 6 shall survive termination of this Agreement.
7. Termination of Employment and Severance Benefits.
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(a) Termination of Employment. Employee's employment under
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this Agreement shall terminate immediately upon a Change of Control (as defined
below) and may be terminated during the Original Term (or any subsequent Term)
upon the occurrence of any of the following events:
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(i) The effective date of a written notice sent to the
Company from Employee stating that Employee is electing to terminate his
employment with the Company voluntarily ("Voluntary Termination");
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(ii) The Company's determination that it is terminating
Employee without Cause, which determination may be made by the Company at any
time at the Company's sole discretion, for any reason or no reason
("Termination Without Cause");
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(iii) A change in Employee's status such that a Constructive
Termination (as defined below) has occurred;
(iv) The Company's reasonable, good faith determination
that it is terminating Employee for Cause (as defined below) ("Termination for
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Cause"); or
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(v) Following Employee's death or Disability.
(b) Severance Benefits. Employee shall be entitled to receive
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severance benefits upon termination of employment only as set forth in this
Section 7(b):
(i) Voluntary Termination. If Employee's employment
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terminates by Voluntary Termination, then Employee shall not be entitled to
receive payment of any severance benefits. Employee will receive payment for all
salary and unpaid vacation accrued as of the date of Employee's termination of
employment and Employee's benefits will be continued under the Company's then
existing benefit plans and policies in accordance with such plans and policies
in effect on the date of termination and in accordance with applicable law.
(ii) Involuntary Termination. If Employee's employment
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terminates due to Termination Without Cause or Constructive Termination
(collectively, "Involuntary Termination"), Employee will be entitled to receive
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payment of severance benefits equal to Employee's regular monthly salary for an
additional six (6) months following the date of such Involuntary Termination
(the "Severance Period"). Such payment shall be made ratably over the Severance
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Period according to the Company's standard payroll schedule. On the date of such
Involuntary Termination, Employee shall also receive the pro rata portion of
Employee's target bonus for such then current Term, based on the portion of the
current Term that Employee has worked. Health insurance benefits with the same
coverage provided to Employee prior to the termination (e.g. medical, dental,
optical, mental health) and in all other respects significantly comparable to
those in place immediately prior to the termination will be provided at the
Company's cost over the Severance Period. Any unvested stock options or shares
of restricted stock held by Employee as of the date of Employee's termination of
employment shall continue to vest through the end of the Severance Period
according to the vesting schedule set forth in any agreement between Employee
and the Company governing the issuance to Employee of such securities.
(iii) Termination for Cause. If Employee's employment is
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terminated for Cause, then Employee shall not be entitled to receive payment of
any severance benefits. Employee will receive payment for all salary and unpaid
vacation accrued as of the date of Employee's termination of employment and
Employee's benefits will be continued under the
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Company's then existing benefit plans and policies in accordance with such plans
and policies in effect on the date of termination and in accordance with
applicable law.
(iv) Termination by Reason of Death or Disability. In the
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event that Employee's employment with the Company terminates as a result of
Employee's death or Disability (as defined below), Employee or Employee's estate
or representative will receive all salary and unpaid vacation accrued as of the
date of Employee's death or Disability and any other benefits payable under the
Company's then existing benefit plans and policies in accordance with such plans
and policies in effect on the date of death or Disability and in accordance with
applicable law. In addition, Employee's estate or representative shall also
receive the pro rata portion of Employee's target bonus for the current Term,
based on the portion of the current Term that Employee has worked.
(v) Change of Control. Notwithstanding the preceding
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clauses of this Section 7(b), upon a Change of Control, Employee will be
entitled to receive payment of severance benefits equal to Employee's regular
monthly salary for a period of six (6) months following said Change of Control.
(the "Change of Control Severance Period"). Such payment shall be made ratably
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over the Change of Control Severance Period according to the Company's standard
payroll schedule. On the date of such Change of Control, Employee shall also
receive the pro rata portion of Employee's target bonus for the current Term,
based on the portion of the current Term that Employee has worked. Health
insurance benefits with the same coverage provided to Employee prior to the
Change of Control (e.g. medical, dental, optical, mental health) and in all
other respects significantly comparable to those in place immediately prior to
the Change of Control will be provided at the Company's cost over the Change of
Control Severance Period. Any unvested stock options or shares of restricted
stock held by Employee on the date of Employee's termination of employment shall
become 100% vested and shall be immediately exercisable.
(vi) Noncompete. If Employee shall at any time during a
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Severance Period or a Change of Control Severance Period, act as an owner
(other than a shareholder in a publicly traded company) or employee of a
business that directly competes with the business conducted by the Company as
conducted on the date of Employee's termination of employment, then, effective
upon Employee's commencement of such activities as a competing owner or
employee, Employee shall not receive any severance payment or other benefits
under Sections 7(b)(ii) or (v) beyond what he would have received had he been
Terminated for Cause. The term directly competes, as set forth in this Section
shall be limited to companies that derive at least 50% of their revenue from the
sales of external defibrillators and accessories.
8. Definitions. For purposes of this Agreement,
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(a) "Cause" for Employee's termination will exist at any time after
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the happening of one or more of the following events:
(i) Employee's willful misconduct or gross negligence in
performance of his duties hereunder, including Employee's refusal to comply in
any material respect with the legal directives of the Company's Board of
Directors so long as such directives are not inconsistent with the Employee's
position and duties, and such refusal to comply is not remedied
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within fifteen (15) working days after written notice from the Company, which
written notice shall state that failure to remedy such conduct may result in
Termination for Cause;
(ii) Dishonest or fraudulent conduct related and materially
adverse to the activities of the Company, a deliberate attempt to do a material
injury to the Company, or conduct that materially discredits the Company or is
materially detrimental to the reputation of the Company, including conviction of
a felony; or
(iii) Employee's knowing and intentional material breach
(which can not be cured) of any element of the Company's Confidential
Information and Invention Assignment Agreement, including without limitation,
Employee's theft or other misappropriation of the Company's proprietary
information.
(b) "Constructive Termination" shall be deemed to occur if
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(i)(A) there is a significant reduction in Employee's duties, positions or
responsibilities causing such position to be of reduced stature or
responsibility or, (B) a reduction in Employee's base compensation or benefits,
or (C) Employee's refusal to relocate to a facility or location more than 30
miles from the Company's current location; and (ii) within the 60-day period
immediately following such material change or reduction Employee elects to
terminate his employment voluntarily.
(c) "Disability" shall mean that Employee has been unable to
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perform his duties hereunder as the result of his incapacity due to physical or
mental illness, and such inability, which continues for at least 60 consecutive
calendar days or 90 calendar days during any consecutive twelve-month period, if
shorter, after its commencement, is determined to be total and permanent by an
independent and impartial physician selected by the Company and its insurers and
acceptable to Employee or to Employee's legal representative (with such
agreement on acceptability not to be unreasonably withheld).
(d) "Change of Control" shall mean the occurrence of any of
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the following events: (i) an acquisition of the Company by another entity by
means of any transaction or series of related transactions (including, without
limitation, any reorganization, merger or consolidation but excluding any merger
effected exclusively for the purpose of changing the domicile of the Company),
or (ii) a sale of all or substantially all of the assets of the Company
(collectively, a "Merger"), so long as in either case (x) the Company's
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stockholders of record immediately prior to such Merger will, immediately after
such Merger, hold less than 50% of the voting power of the surviving or
acquiring entity, or (y) the Company's stockholders of record immediately prior
to such Merger will, immediately after such Merger, hold less than 60% of the
voting power of the surviving or acquiring entity and a majority of the members
of the Board of Directors of the surviving or acquiring entity immediately after
such Merger were not members of the Board of Directors of the Company
immediately prior to such Merger.
Notwithstanding the above, in the event that (i) Employee's employment
is terminated by the Company or a successor to the Company other than for Cause
(as defined below), or (ii) Employee's job duties, responsibilities and
requirements are materially reduced or changed such that they are inconsistent
with Employee's prior duties, responsibilities and requirements, in either case
in connection with, or as a result of, a Change of Control, 100% of the option
that has
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not yet become exercisable shall become exercisable on the effective
date of such termination, reduction or change.
9. Successors. Any successor to the Company (whether direct or indirect
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and whether by purchase, lease, merger, consolidation, liquidation or otherwise)
to all or substantially all of the Company's business and/or assets shall assume
the obligations under this Agreement and agrees expressly to perform the
obligations under this Agreement in the same manner and to the same extent as
the Company would be required to perform such obligations in the absence of a
succession. The terms of this Agreement and all of Employee's rights hereunder
shall inure to the benefit of, and be enforceable by, Employee's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
10. Miscellaneous Provisions.
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(a) No Duty to Mitigate. Employee shall not be required to
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mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new employment or in any other manner), nor, except as otherwise
provided in this Agreement, shall any such payment be reduced by any earnings
that Employee may receive from any other source.
(b) Amendments and Waivers. Any term of this Agreement may be
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amended or waived only with the written consent of the parties.
(c) Sole Agreement. This Agreement, including any Exhibits hereto,
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constitutes the sole agreement of the parties and supersedes all oral
negotiations and prior writings with respect to the subject matter hereof.
(d) Notices. Any notice required or permitted by this Agreement
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shall be in writing and shall be deemed sufficient upon receipt, when
delivered personally or by a nationally-recognized delivery service (such as
Federal Express or UPS), or 48 hours after being deposited in the U.S. mail as
certified or registered mail with postage prepaid, if such notice is addressed
to the party to be notified at such party's address as set forth below or as
subsequently modified by written notice.
(e) Choice of Law. The validity, interpretation, construction
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and performance of this Agreement shall be governed by the laws of the State of
California, without giving effect to the principles of conflict of laws.
(f) Severability. If one or more provisions of this Agreement
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are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision, then
(i) such provision shall be excluded from this Agreement, (ii) the balance of
the Agreement shall be interpreted as if such provision were so excluded and
(iii) the balance of the Agreement shall be enforceable in accordance with its
terms.
(g) Counterparts. This Agreement may be executed in counterparts,
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each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
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[Signature Page Follows]
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The parties have executed this Agreement the date first written above.
CARDIAC SCIENCE INC.
By:________________________________________
Title:_____________________________________
Address: 00000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
__________________________________________
Xxx X. X. Sohie, Ph.D.
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