Exhibit 10.8
EMPLOYMENT AGREEMENT
AGREEMENT, made and entered into as of this 6th day of July 1998, by and
between Rochester Medical Corporation, a Minnesota corporation (the
"Corporation"), and Xxxxx X. Xxxxxx ("Employee").
WHEREAS, the Corporation and the Employee desire to record the terms of
Employee's employment by the Corporation;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. TERM OF EMPLOYMENT. Subject to the terms and conditions of this
Agreement, the Corporation hereby employs Employee and Employee hereby accepts
employment for the period commencing July 6, 1998, and continuing thereafter
until the employment is terminated according to the provisions of this
Agreement.
2. DUTIES. During the term of this Agreement, Employee shall perform the
duties of Vice President Sales and Marketing and such additional duties as may
be prescribed from time to time by the Board of Directors or the Chief Executive
Officer of the Corporation.
3. BASE SALARY; OTHER COMPENSATION.
3.1 Base Salary. The Corporation shall pay Employee a initial Base
Salary ("Base Salary") of One Hundred Twenty Five Thousand Dollars ($125,000)
per annum commencing July 6, 1998. The Base Salary shall be paid according to
the Corporation's regular payroll procedure, in equal increments not less
frequently than monthly. The Base Salary shall be subject to annual review and
merit increase adjustment in accordance with the Corporation's customary
practices, as may be then in effect, for salary planning and administration.
3.2 Incentive Bonuses. Employee shall be entitled to receive an
initial bonus payment in the amount of Fifteen Thousand Dollars ($15,000)
payable with his first regular payroll. Employee shall also be eligible to
participate in the Corporation's
Xxxxx X. Xxxxxx
Employment Agreement
bonus incentive plan with a targeted bonus ("Bonus") determined in accordance
with the Corporation's Executive Bonus Program. The targets and performance
necessary to earn the Bonus or any portion thereof shall be set annually by the
Corporation; provided, that the Bonus payable to Employee for the Corporation's
fiscal year ending September 30, 1998, shall be in the amount of Twenty Eight
Thousand One Hundred Twenty Five Dollars ($28, 125).
3.3 Relocation Allowance. In addition to any other compensation to
which Employee may be entitled by this agreement, The Corporation shall pay
Employee a Relocation Allowance (the "Relocation Allowance") consisting of (i)
all direct moving costs and expenses incurred by Employee in connection with
Employee's associated relocation to the Rochester, Minnesota, area, (ii)
reimbursement of all realtor's commissions and closing costs paid by Employee in
connection with the sale of his present home, (iii) reimbursement of closing
costs paid by Employee in connection with the purchase of his new home, (iv)
reimbursement of all expenses for meals and lodging, not to exceed eight days,
in connection with Employee's travel to the Rochester, Minnesota, area for
purposes of finding a new home, and (v) income tax gross-up to the extent any
payments to or on behalf of employee hereunder are taxable as income to
Employee.
3.3 Incentive Stock Option. In addition to any other compensation to
which Employee may be entitled by this agreement, Employee shall be entitled to
receive an Incentive Stock Option for Eighty Thousand (80,000) shares of the
Corporation under the Corporation's 1991 Stock Option Plan according to the
Incentive Stock Option Agreement appended hereto as Exhibit 1. The exercise
price of the Incentive Stock Option shall be fair market value, as determined
according to the 1991 Stock Option Plan, as of the close of business on the date
of grant by the Corporation's Board of Directors. Employee acknowledges
receiving a copy of the 1991 Stock Option Plan.
4. BENEFITS.
4.1 Vacation. During each year of his employment, Employee shall be
entitled to four (4) weeks annual vacation and to reasonable holidays and sick
leave. Vacations shall be taken by Employee during the year earned at such time
or times and for such periods as Corporation and Employee shall agree.
4.2 Benefit Programs, Insurance. Employee shall be entitled to
participate in customary employee benefit programs as may be from time to time
determined by the Board of Directors including, but not limited to, life
insurance, hospitalization,
2
Xxxxx X. Xxxxxx
Employment Agreement
surgical and major medical coverage, and long-term disability as are or may be
made available from time to time to other salaried employees of the Corporation.
5. TERMINATION.
5.1 Events of Termination. This Agreement may be terminated upon the
occurrence of any one of the following events:
(a) Voluntary. Employee may terminate this Agreement at
any time during the term of this Agreement by giving 30 days prior
written notice of termination to the Board.
(b) Involuntary Without Cause. The Corporation may
terminate this Agreement without cause by 30 days written notice to
Employee.
(c) Involuntary With Cause. The Corporation may
terminate this Agreement immediately for cause for (i) Employee's
material breach of any agreement with the Corporation, (ii)
Employee's deliberate, willful or gross misconduct in the
performance or Employee's duties on behalf of the Corporation, or
(iii) Employee's being charged with a crime punishable by
imprisonment
(d) Death. This Agreement shall automatically terminate
upon the death of the Employee.
(e) Disability. This Agreement shall automatically
terminate upon the permanent disability of Employee. For the
purposes of this Agreement, Employee shall be deemed permanently
disabled if any ailment, illness or other incapacity prevents his
from performing his duties as specified in this Agreement for a
period of three consecutive months or for an aggregate of three
months in any twelve month period from the date of this Agreement.
5.2 Consequences of Termination. In the event of the termination of
this Agreement in accordance with Subparagraph 5.1 above, Employee (or his
estate) shall be entitled to Base Salary earned by his prior to the date of
termination as provided herein computed on a pro rata basis to and including
such date of termination. In addition, Employee shall also be reimbursed for his
reasonable business expenses incurred prior to the date of termination.
6. INVENTIONS; CONFIDENTIALITY.
3
Xxxxx X. Xxxxxx
Employment Agreement
6.1 Definitions. For purposes of this Section 6, the following words
and phrases have the meanings ascribed to them, respectively:
(a) "Confidential Information" means all formulas,
processes, customer lists, computer user identifiers and passwords,
and all purchasing, engineering, accounting, marketing and other
information that is proprietary to the Corporation and not generally
known or readily ascertainable by proper means, relating to
research, development, manufacture or sale of the Corporation's
products, as well as formulas, processes and other information
received by the Corporation from third parties under an obligation
of secrecy. All information disclosed to Employee or to which
Employee has access during the period of his employment, which he
has reasonable basis to believe to be Confidential Information, or
which is treated by the Corporation as being Confidential
Information, shall be presumed to be Confidential Information.
(b) "Inventions" means all formulas, processes,
discoveries, improvements, ideas and works of authorship, whether
patentable or copyrightable or not, which Employee learns, has
access to, has a part in developing, first conceives or first
reduces to practice, alone or with others (1) that are developed on
the Corporation's time, or (2) that relate directly to the
Corporation's business or actual or anticipated research, or (3) for
which any of the Corporation's property, including Confidential
Information, is used, or (4) that result from any of Employee's work
for the Corporation.
6.2. Disclosure and Assignment. Except as provided elsewhere in this
Agreement, Employee shall treat as for the Corporation's sole benefit and fully
and promptly disclose to the Corporation, without additional compensation, all
ideas, discoveries, inventions and improvements, whether patentable or not,
which, while the Employee is employed by the Corporation, are made conceived or
reduced to practice by Employee, alone or with others, during or after usual
working hours, either on or off the job, and Employee hereby assigns to the
Corporation all such ideas, discoveries, inventions and improvements to be the
Corporation's exclusive property.
6.3 Further Documents. Employee will acknowledge and deliver
promptly without charge all documents to the Corporation, and will do such other
acts as may be necessary in the Corporation's opinion to obtain and maintain
patents (including divisional, reissued or extended Letters Patent) or
copyrights and to vest the
4
Xxxxx X. Xxxxxx
Employment Agreement
entire right and title in the Corporation to such patents, copyrights and
Inventions in all countries.
6.4 Confidentiality. Employee will not use or disclose any
Confidential Information, either during or after employment by the Corporation,
except as required by his duties to the Corporation, and Employee acknowledges
and understands that the obligation to maintain the confidentiality of the
Corporation's Confidential Information is unconditional and shall not be excused
by any conduct on the part of the Corporation except its prior voluntary
disclosure of the information. Upon termination of employment, Employee agrees
that (a) all Confidential Information, including all copies, excerpts and
summaries in his possession or control (whether prepared by the Corporation, the
Employee or others), and also all other the Corporation property, including
keys, credit cards, software, reports and the like, shall be left with the
Corporation and (b) Employee will stop use of all Confidential Information.
Employee shall not at any time during the term of this Agreement or thereafter,
or in any manner, either directly or indirectly, divulge, disclose or
communicate to any person, firm or corporation in any manner whatsoever any
information concerning any matters affecting or relating to the business of the
Corporation, including without limiting the generality of the foregoing, any of
its customers, the prices it obtains or has obtained from the sale of, or at
which it sells or has sold, its products, or any other information concerning
the business of the Corporation, its manner of operation, its plans, processes,
or other data without regard to whether all of the foregoing matters will be
deemed confidential, material, or important, the parties hereto stipulating that
as between them, the same are important, material, and confidential and gravely
affect the effective and successful conduct of the business of the Corporation,
and the Corporation's good will, and that any breach of the terms of this
Section 6 shall be a material breach of this Agreement.
6.5 Limitation; First Refusal. The obligations of Section 6.2 and
6.3 shall not apply to any ideas, discoveries, inventions and improvements for
which no equipment, supplies, facility or trade secret information of the
Corporation was used, and which was developed entirely on Employee's own time,
and (1) which does not relate (a) directly to the business of the Corporation or
(b) to the Corporation's actual or demonstrably anticipated research or
development, or (2) which does not result from any work performed by Employee
for the Corporation. Employee will, nonetheless, promptly disclose all such
ideas, discoveries, inventions and improvements to the Corporation and offer to
the Corporation the right of first refusal to enter into a license or purchase
agreement covering the subject idea, discovery, invention or improvement on
terms mutually agreed to by Employee and the Corporation. In the event the
Corporation and Employee cannot agree on terms and Employee receives an offer to
enter into a license or purchase agreement with some other party on terms more
favorable to that other party than the terms offered to the Corporation, then
the
5
Xxxxx X. Xxxxxx
Employment Agreement
Corporation shall have the right and Employee shall have the obligation to
offer to the Corporation the idea, discovery, invention or improvement on such
favorable terms. When such an offer is made to the Corporation pursuant to the
preceding sentence, it must be accepted by the Corporation within thirty (30)
days; or if not accepted, the right of first refusal hereunder as to that offer
shall terminate.
NOTICE: SECTION 6 HEREOF REQUIRES EMPLOYEE TO ASSIGN RIGHTS TO
INVENTIONS TO THE CORPORATION OR ITS SUCCESSORS. MINNESOTA STATUTES SS.181.78
LIMITS THE SCOPE OF AGREEMENTS REQUIRING THE INVENTIONS BE ASSIGNED TO
EMPLOYERS. THE STATUTE STATES THAT SUCH ASSIGNMENT AGREEMENTS DO NOT APPLY:
"TO AN INVENTION FOR WHICH NO EQUIPMENT, SUPPLIES,
FACILITY OR TRADE SECRET INFORMATION OF THE EMPLOYER WAS
USED AND WHICH WAS DEVELOPED ENTIRELY ON THE EMPLOYEE'S
OWN TIME, AND (1) WHICH DOES NOT RELATE (a) DIRECTLY TO
THE BUSINESS OF THE EMPLOYER OR (b) TO THE EMPLOYER'S
ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR
DEVELOPMENT, OR (2) WHICH DOES NOT RESULT FROM ANY WORK
PERFORMED BY THE EMPLOYEE FOR THE EMPLOYER."
PLEASE NOTE THAT SECTION 6 OF THIS AGREEMENT USES THESE STATUTORY
TERMS TO DEFINE THE INVENTIONS WHICH ARE NOT AUTOMATICALLY ASSIGNED TO THE
CORPORATION BUT INSTEAD ARE SUBJECT TO A RIGHT OF FIRST REFUSAL IN FAVOR OF THE
CORPORATION.
6.6. Assistance to the Corporation. Employee shall give the
Corporation, at the Corporation's expense, all assistance the Corporation
reasonably requires to perfect, protect, and exercise the rights to all ideas,
discoveries, inventions or improvements acquired by the Corporation pursuant to
the assignment provisions or the right of first refusal provisions of this
Section 6.
6.7 Remedies. The Employee's obligations set forth in Section 6 of
this Agreement shall continue to be binding upon Employee, notwithstanding the
termination of his employment with the Corporation for any reason whatsoever.
Such obligations shall be deemed and construed as separate agreements
independent of any other provisions of this Agreement. The existence of any
claim or cause of action by Employee against the Corporation, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Corporation or any or all of such obligations. It is
expressly agreed that the remedy at law for the breach of any such obligation is
inadequate and that temporary and permanent injunctive relief shall be available
to prevent the breach or any threatened breach thereof, without the necessity of
proof of actual damages
7. NOTICES. Any notices to be given hereunder by either party to the
other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid, with return receipt requested.
Personal delivery to the Corporation shall mean personal delivery to the Chief
Executive Officer of the Corporation. Mailed notices shall be addressed to the
respective addresses shown below. Either party may
6
Xxxxx X. Xxxxxx
Employment Agreement
change its address for notice by giving written notice according to the terms of
this Section 7.
(a) If to Employee:
Xxxxx X. Xxxxxx
00000 00xx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxx 00000
7
Xxxxx X. Xxxxxx
Employment Agreement
(b) If to the Corporation:
Rochester Medical Corporation
Xxx Xxxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Chairman of the Board
8. GENERAL PROVISIONS.
8.1 Law Governing. This Agreement shall be governed by and construed
according to the laws of the State of Minnesota.
8.2 Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid, or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its severance
herefrom. Furthermore, in lieu of such illegal, invalid, or unenforceable
provision there shall be added automatically as a part of this Agreement a
provision as similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and still be legal, valid or enforceable.
8.3 Entire Agreement. This Agreement sets forth the entire
understanding of the parties and supersedes all prior agreements or
understandings, whether written or oral, with respect to the subject matter
hereof. No terms, conditions, warranties, other than those contained herein, and
no amendments or modifications hereto shall be binding unless made in writing
and signed by the parties hereto.
8.4 Binding Effect. This Agreement shall extend to and be binding
upon and inure to the benefit of the parties hereto, their respective heirs,
representatives, successors and assigns. This Agreement may not be assigned by
Employee.
8.5 Waiver. The waiver by either party hereto of a breach of any
term or provision of this Agreement shall not operate or be construed as a
waiver of a subsequent breach of the same provision by any party or of the
breach of any other term or provision of this Agreement.
8.7 Titles. Titles of the paragraphs herein are used solely for
convenience and shall not be used for interpretation or construing any word,
clause, paragraph, or provision of this Agreement.
8
Xxxxx X. Xxxxxx
Employment Agreement
8.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
8.9 Merger. This Agreement merges and supersedes any and all prior
negotiations or agreements between the Employee and the Corporation.
IN WITNESS WHEREOF, the Corporation and Employee have executed this
Agreement as of the date and year first written above.
"Employee" Rochester Medical Corporation
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
----------------------------- -------------------------------
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx
Chief Executive Officer
9
