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EXHIBIT 10.12
[I-FLOW LOGO]
EMPLOYMENT AGREEMENT
THIS AGREEMENT dated as of June 30, 2000 by and between I-Flow
Corporation (the "Company"), having its principal address at 00000 Xxxxxxx
Xxxxx, Xxxx Xxxxxx, XX 00000 and Xxxxx X. Xxxxxxxx ("Employee").
WHEREAS, the Company wishes to encourage Employee to continue to render
services to the Company by granting Employee certain rights upon termination or
upon a "Change in Control" as hereinafter defined.
WHEREAS, the Employee wishes to enter into this Agreement
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT
The Company agrees to employ Employee and Employee agrees to serve in such
employment capacities as may be requested from time to time by the Chief
Executive Officer or the Board of Directors of the Company. Employee hereby
accepts such employment upon the terms and conditions set forth herein.
Nothing in this Agreement is intended to create and should not be interpreted
to create an employment contract for any specified length of time between
Company and Employee.
2. TERMINATION OF EMPLOYMENT
Employee's employment may be terminated at any time, without cause by either
party upon sixty days written notice. Employee's employment may be terminated
at any time for cause, without notice. For purposes of this Agreement, cause
shall be defined to include but shall not be limited to dishonesty,
nonperformance of duties, immoral conduct detrimental to the Company,
conviction of a felony, or unfaithfulness or a failure to act or not act in
accordance with the direction of the Company.
3. SEVERANCE PAY.
(a) Termination of employment for Cause. In the event Employee's employment
by Company is terminated for cause, or Employee voluntarily resigns,
Company shall have no obligation to pay any severance pay to Employee
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(b) Termination for Reasons Other than Cause. The Employee shall be entitled
to a severance package consisting of (i) a one time payment equal to six
months of his base salary at the time of termination and (ii) immediate
vesting of all Stock Options granted up to the time of termination, with
the exercise period being no less than one year from the date of
termination. To receive this severance package one of the following must
be true.
(1) The Employee is terminated without cause.
(2) The Employee is asked to accept a significant change in job
responsibility that is clearly a demotion.
(3) The Employee is asked to relocate in order to remain employed.
(4) The Employee is asked to accept a reduction in salary and/or
benefits.
4. Change in Control.
(a) In the event of a Change in Control as hereinafter defined, the Company
agrees to employ Employee for a period of one year after the Change in
Control, or pay Employee in lieu of employment for the same compensation,
including incentive compensation and all employee benefits, the Employee
receives at the time of the Change in Control.
(b) In the event of a Change in Control as hereinafter defined, all of
Employee's Stock Options shall immediately vest and become fully
exercisable and the exercise period remaining shall be no less than one
year from the date of Change in Control.
(c) "Change in Control" shall mean the occurrence of any of the following:
(i) any "person" (as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") is or
becomes a "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation
representing 30% or more of the voting power of the then outstanding
securities of the Corporation; (ii) during any period of two consecutive
calendar years there is a change of 25% or more in the composition of the
Board of Directors of the Corporation in office at the beginning of the
period except for changes approved by at least two-thirds of the
Directors then in office who were Directors at the beginning of the
period ; (iii) the stockholders of the Corporation approve an agreement
providing for (a) the merger or consolidation of the Corporation with
another corporation where the stockholders of the Corporation,
immediately after the merger or consolidation, would not beneficially
own, immediately after the merger or consolidation, shares entitling such
stockholders to 50% or more of all votes (without consideration of the
rights of any class of stock to elect Directors by a separate class vote)
to which all stockholders of the corporation issuing cash or securities
in the merger or consolidation would be entitled in the election of
directors or where the members of the Board, immediately prior to the
merger or consolidation, would not, immediately after the merger or
consolidation, constitute a majority of the Board of Directors of the
corporation issuing cash or securities in the merger or consolidation or
(b) the sale or other disposition of all or substantially all the assets
of the Corporation, or a liquidation, dissolution or statutory exchange
of the Corporation; or (iv) any person has commenced, or announced an
intention to commence, a tender offer or exchange offer for 30% or more
of the voting power of the then-outstanding securities of the
Corporation.
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5. Nothing herein shall be construed as requiring the Company to continue the
employment of Employee except in the circumstances herein stated.
6. This Agreement shall be governed and construed in accordance with the laws
of the State of California.
7. This Agreement shall be binding upon successors and assigns of the Company
by merger, consolidation, purchase of assets or otherwise.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above stated.
I-FLOW CORPORATION
By:
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Xxxxxx X. Xxxxxxx Date Xxxxx X. Xxxxxxxx Date
Chairman, President & CEO Employee
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