EXHIBIT 10.6
CYNOSURE, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as
of ___________September 2003 by and between Cynosure, Inc., a Delaware
corporation (the "Company") and Xxxxxxx Xxxxxxx ("Employee").
BACKGROUND
A. The Company desires to retain the services of Employee as National
Sales Director(for the U.S. only) of the Company from the date of this Agreement
(the "Effective Date"). The Company also desires to provide employment security
to Employee, thereby inducing Employee to continue employment with the Company
and enhancing Employee's ability to perform effectively.
B. Employee is willing to be employed by the Company on the terms and
subject to the conditions set forth in this Agreement.
THE PARTIES AGREE AS FOLLOWS:
1. EMPLOYMENT. Company hereby employs Employee, and Employee hereby accepts
such employment, upon the terms and conditions set forth herein.
2. DUTIES.
2.1 Position. Employee is employed as the National Sales Director (for the
U.S. only) of the Company and shall have the duties and responsibilities
assigned by the Board of Directors or the Chief Executive Officer of the
Company, both upon initial hire and as may be reasonably assigned from
time to time. Employee shall perform faithfully and diligently all duties
assigned to Employee.
2.2 Best Effort/Full-time. Employee will expend Employee's best efforts on
behalf of Company, and will abide by all policies and decisions made by
Company, as well as all applicable federal, state and local laws,
regulations or ordinances. Employee will act in the best interest of
Company at all times, Employee shall devote Employee's full business time
and efforts to the performance of Employee's assigned duties for Company,
unless Employee notifies Company in advance of Employee's intent to engage
in other paid work and receives Company's express written consent to do
so.
2.3 Work Location. Employee's principal place of work shall be located in
New Jersey or such other location as the parties may agree upon from time
to time.
3. TERM. The employment relationship pursuant to this Agreement shall
be without a term, and can be terminated in accordance with Section 7
below.
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4. COMPENSATION.
4.1 Base Salary. As compensation for Employee's performance of Employee's
duties hereunder, Company shall pay to Employee an initial Base Salary of
$100,000 Per year, subject to annual review and adjustment by the Board of
Directors, payable in accordance with the normal payroll practices of
Company, less required deductions for state and federal withholding tax,
social security and all other employment taxes and payroll deductions.
Notwithstanding the foregoing, for the period ending December 31, 2003,
employee will be eligible to receive a monthly base salary of $12,666, and
to the bonus compensation defined in section 4.3 below. In the event
Employee's employment under this Agreement is terminated by either party,
for any reason, Employee will earn the Base Salary, accrued bonus and
fringe benefits prorated to the date of termination.
4.2 Incentive Compensation. Employee will be eligible to earn incentive
compensation beginning January 1st, 2004.
(a) Sales incentive: Employee will be eligible an incentive based on
yearly National (U.S. only) revenues for Laser Systems ("Revenues")
For 2004, Employee will receive a 1% commission for all Revenues
within Budget ($10 Million), 2% commission for all Revenues over
Budget up to $12.5 Million, and 2.5% commission for all Revenues
over 125% of budget. Payments for the first six months will be
effected monthly on the assumption of monthly Revenues equal to
(1/12) of yearly Budget, and will be considered in account. After
the first six months, an adjustment will be effected based on actual
sales for the 6 months, and from then on payments will be effected
according to actual revenues of the previous month. All commission
payments will be made less required deductions for state and federal
withholding tax, social security, and other employment taxes and
payroll deductions.
(b) Margin Incentive: For 2004, Employee will be eligible to receive
payment of $10,000 bonus upon achievement of the National Sales
budget and an increase of 2% (points) of the Gross margin percentage
on National Revenues with respect to the Gross margin percentage on
National Sales for year 2003. Upon achievement of the bonus target,
$10,000 of extra bonus will be assigned for every further 2%
increase of the Gross margin percentage on National sales with
respect to the year 2003 benchmark. Payment will be made less
required deductions for state and federal withholding tax, social
security, and other employment taxes and payroll deductions.
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4.3 Bonus incentive. For the period ending December 31, 2003, employee
will be eligible to receive a bonus compensation for a maximum of
$12,000 based upon achievement of selected targets to be agreed upon with
the CEO. All bonus payments will be made less required deductions for
state and federal withholding tax, social security, and other employment
taxes and payroll deductions.
4.4 Performance and Salary Review. After the first year of employment,
Company will periodically review Employee's performance on no less than an
annual basis. Adjustments to salary or other compensation, if any, will be
made by Company in its sole and absolute discretion.
4.4 Stock Compensation. Employee will be granted stock purchase rights
under the Cynosure Stock Compensation Plan in accordance with the draft
Stock Compensation Plan, Stock Purchase Rights Agreement, and Tax Bonus
attached hereto, as soon as possible after approval by the Company's
shareholders and directors.
5. EMPLOYEE FRINGE BENEFITS AND OTHERS.
5.1 Customary Fringe Benefits. Employee will be eligible for all customary
and usual fringe benefits generally available to executives of the
Company, including but not limited to medical, dental and life insurance
and participation in the Company's 401k plan, subject to the terms and
conditions of the Company's benefit plan documents. The Company reserves
the right to change or eliminate the fringe benefits on a prospective
basis, at any time, effective upon notice to Employee.
5.2 Vacation. Employee is entitled to a total of two weeks paid leave per
year.
5.3 Car Allowance. Employee is entitled to a monthly car allowance of
$700.00.
6. BUSINESS EXPENSES. Employee will be reimbursed for all reasonable, out-of
pocket business expenses incurred in accordance with the Company's travel
policies in the Performance of Employee's duties on behalf of Company. To
obtain reimbursement, expenses must be submitted promptly with appropriate
supporting documentation in accordance with Company's policies.
7. TERMINATION OF EMPLOYEE'S EMPLOYMENT.
7.1 Termination for Cause by Company. Although Company anticipates a
mutually rewarding employment relationship with Employee, Company may
terminate Employee's employment immediately at any time for Cause. For
purposes of this Agreement, "Cause" is defined as: (a) acts or omissions
constituting gross negligence, recklessness or willful misconduct on the
part of Employee with respect to Employee's obligations to the Company or
otherwise relating to the business of Company, in each case as determined
in good faith by the Company; (b) Employee's material breach of this
Agreement or the Company's Employee Innovations and Proprietary Rights
Agreement; (c) Employee's conviction or entry of a plea of nolo contendere
for fraud, misappropriation or embezzlement, or any felony or crime of
moral turpitude;
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(d) Employee's willful neglect of duties as determined in the good faith
by Company; (e) Employee's failure to perform the essential functions of
Employee's position, with reasonable accommodation, due to a mental or
physical disability (f) Employee's knowingly withholding material
information (in his or her area of responsibility) from the CEO or the
Board of Directors. In the event Employee's employment is terminated in
accordance with this subsection 7.1, Employee shall be entitled to receive
only the Base Salary then in effect, prorated to the date of termination.
All other Company obligations to Employee pursuant to this Agreement will
become automatically terminated and completely extinguished. In addition,
Employee will not be entitled to receive the Severance Payment described
in subsection 7.2 below.
7.2 Termination Without Cause by Company/Severance. Company may terminate
Employee's employment under this Agreement without Cause at any tune on
thirty (30) days' advance written notice to Employee In the event any such
termination shall occur, Employee will receive the Base Salary and fringe
benefits then in effect, prorated to the date of termination, and a
"Severance Payment" equivalent to TWELVE (_12_) months of Employee's Base
Salary then in effect on the date of termination, provided that Employee,
(a) complies with all surviving provisions of this Agreement as specified
in subsection 14.8 below; and (b) executes a full general release,
releasing all claims, known or unknown, that Employee may have against
Company arising out of or any way related to Employee's employment or
termination of employment with Company.
7.3 Resignation by Employee for Good Cause. Employee may resign Employee's
position with the Company at any time for Good Reason as defined below. In
the event of such termination, Employee will receive from the Company the
Base Salary and fringe benefits then in effect, prorated to the date of
termination, and a Severance Payment as set forth in Section 7.2. For
purposes of this Agreement, "Good Reason" is defined as a good faith
determination by Employee that there has (i) a diminution in Employee's
position, authority or responsibilities and a reduction by 10% in
Employee's salary or benefits; (ii) a breach by the Company of this
Agreement.
7.4 Voluntary Resignation by Employee. Employee may voluntarily resign
Employee's position with Company at any time on thirty (30) days' advance
written notice. In the event of such resignation, Employee will be
entitled to receive only the Base Salary, and fringe benefits for the
thirty-day notice period, and Employee will not be entitled to receive the
Severance Payment described in subsection 7.2 above.
8. NO CONFLICT OF INTEREST. During the term of Employee's employment with
Company, Employee must not engage in any work, paid or unpaid, that
creates an actual or potential conflict of interest with Company. Such
work shall include, but is not limited to, directly or indirectly
competing with Company in any way, or acting as an officer, director,
employee, consultant, stockholder (in excess of 5% of publicly traded
companies), volunteer, lender, or agent of any business enterprise of the
same nature as, or which is in direct competition with, the business in
which Company is now engaged or in which Company becomes engaged during
the term of Employee's, employment with Company, as may be determined by
Company in its sole discretion, if Company believes such a conflict exists
during the term of this Agreement, Company may ask Employee to choose
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to discontinue the other work or resign employment with Company. In
addition, Employee agrees not to refer any client or potential client of
Company to competitors of Company, without obtaining Company's prior
written consent, during the term of Employee's employment.
9. POST-TERMINATION NON-COMPETITION.
9.1 Consideration For Promise To Refrain From Competing. Employee agrees
that Employee's services are special and unique, that Company's disclosure
of confidential, proprietary information and specialized training and
knowledge to Employee, and that Employee's level of compensation and
benefits and post-termination severance, as applicable, are partly in
consideration of and conditioned upon Employee not competing with Company.
Employee acknowledges that such consideration for Employee's services
under this Agreement is adequate consideration for Employee's promises
contained within this Section 9.
9.2 Promise To Refrain From Competing. Employee understands Company's need
for Employee's promise not to compete with Company is based on the
following: (a) Company has expended, and will continue to expend,
substantial time, money and effort in developing its confidential and
proprietary information; (b) Employee will in the course of Employee's
employment develop, be personally entrusted with and exposed to such
confidential and proprietary information; (c) both during and after the
term of Employee's employment, Company will be engaged in the highly
competitive laser manufacturing industry; (d) Company provides products
and services nationally and may provide products and services
internationally in the future; and (e) Company will suffer great loss and
irreparable harm if Employee were to enter into competition with Company.
Therefore, in exchange for the consideration described in subsection 9.1
above, Employee agrees that for the period of one (1) year following the
date Employee ceases to render services to Company (the "Covenant
Period"), Employee will not either directly or indirectly, whether as a
owner, director, officer, manager, consultant, agent or employee: (i) work
for a competitor, which is defined to include any individual, firm, entity
or business enterprise that manufactures, sells or distributes lasers,
"IPL" and "LED" devices with cosmetic and/or competing medical
applications, other than Company (or such parent, affiliate or subsidiary,
in any geographical area where Company is now engaged in business, or
becomes engaged, during the term of Employee's employment ("Restricted
Business"); or (ii) make or hold any investment in any Restricted Business
in the United States, whether such investment be by way of loan, purchase
of stock or otherwise, provided that there shall be excluded from the
foregoing the ownership of not more than one percent (1%) of the listed or
traded stock of any publicly held corporation. For purposes of this
Section 9, the term "Company" shall mean and include Company, any
successor to the business of Company (by merger, consolidation, sale of
assets or stock or otherwise) and any other corporation or entity of which
Employee may serve as a director, officer or employee at the request of
Company or any successor of Company.
9.3 Reasonableness of Restrictions. Employee represents and agrees that
the restrictions on competition, as to time, geographic area, and scope of
activity, required by this
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Section 9 are reasonable, do not impose a greater restraint than is
necessary to protect the goodwill and business interests of Company, and
are not unduly burdensome to Employee. Employee expressly acknowledges
that Company competes on a worldwide basis and that the geographical scope
of these limitations is reasonable and necessary for the protection of
Company's trade secrets and other confidential and proprietary
information. Employee further agrees that these restrictions allow
Employee an adequate number and variety of employment alternatives, based
on Employee's varied skills and abilities. Employee represents that
Employee is willing and able to compete in other employment not prohibited
by this Agreement.
9.4 Reformation if Necessary. In the event a court of competent
jurisdiction determines that the geographic area, duration, or scope of
activity of any restriction under this Section 9 and its subsections is
unenforceable, the restrictions under this Section and its subsections
shall not be terminated but shall be reformed and modified to the extent
required to render them valid and enforceable. Employee further agrees
that the court may reform this Agreement to extend the one (1) year period
of this covenant not to compete by an amount of time equal to any period
in which Employee is in breach of this covenant.
10. CONFIDENTIALITY AND PROPRIETARY RIGHTS. Employee agrees to read, sign and
abide by Company's [EMPLOYEE INNOVATIONS AND PROPRIETARY RIGHTS ASSIGNMENT
AGREEMENT], which is incorporated herein by reference.
11. NON-SOLICITATION.
11.1 Nonsolicitation of Customers or Prospects. Employee acknowledges that
information about Company's customers is confidential and constitutes
trade secrets. Accordingly, Employee agrees that during the term of this
Agreement and for a period of one (1) year after the termination of this
Agreement, Employee will not either directly or indirectly, separately or
in association with others, interfere with, impair, disrupt or damage
Company's relationship with any of its customers or customer prospects by
soliciting or encouraging others to solicit any of them for the purpose of
diverting or taking away business from Company.
11.2 Nonsolicitation of Company's Employees. Employee agrees that during
the term of this Agreement and for a period of one (1) year after the
termination of this Agreement, Employee will not, either directly or
indirectly, separately or in association with others, interfere with,
impair, disrupt or damage Company's business by soliciting, encouraging or
attempting to hire any of Company's employees or causing others to solicit
or encourage any of Company's employees to discontinue their employment
with Company.
12. INJUNCTIVE RELIEF. Employee acknowledges that Employee's breach of any of
the covenants contained in sections 8-11 (collectively "Covenants") would
cause irreparable injury to Company and agrees that in the event of any
such breach, Company shall be entitled to seek temporary, preliminary and
permanent injunctive relief without the necessity of proving actual
damages or posting any bond or other security.
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13. AGREEMENT TO ARBITRATE. To the fullest extent permitted by law, Employee
and Company agree to arbitrate any controversy, claim or dispute between
them arising out of or in any way related to this Agreement, the
employment relationship between Company and Employee and any disputes upon
termination of employment, including but not limited to breach of contract
tort, discrimination, harassment, wrongful termination, demotion,
discipline, failure to accommodate, family and medical leave, compensation
or benefits claims, constitutional claims; and any claims for violation of
any local, state or federal law, statute, regulation or ordinance or
common law. Claims for workers' compensation, unemployment insurance
benefits, breach of the Company's Employee Innovations and Proprietary
Rights Agreement and Company's right to obtain injunctive relief pursuant
to Section 12 above are excluded. For the purpose of this Agreement to
arbitrate, references to "Company" include all parent, subsidiary or
related entities and their employees, supervisors, officers, directors,
agents, fiduciaries, administrators, affiliates and all successors and
assigns of any of them, and this Agreement shall apply to them to the
extent Employee's claims arise out of or relate to their actions on behalf
of Company.
13.1 Consideration. The mutual promise by Company and Employee to
arbitrate any and all disputes between them (except for those referenced
above) rather than litigate them before the courts or other bodies,
provides the consideration for this Agreement to arbitrate.
13.2 Initiation of Arbitration. Either party may exercise the right to
arbitrate by providing the other party with written notice of any and all
claims forming the basis of such right in sufficient detail to inform the
other party of the substance of such claims. In no event shall the request
for arbitration be made after the date when institution of legal or
equitable proceedings based on such claims would be barred by the
applicable statute of limitations.
13.3 Arbitration Procedure. The arbitration will be conducted in Boston,
Massachusetts by a single neutral arbitrator and in accordance with the
then current rules for resolution of employment disputes of the American
Arbitration Association ("AAA"). The parties are entitled to
representation by an attorney or other representative of their choosing.
The arbitrator shall have the power to enter any award that could be
entered by a judge of the trial court of the State of Massachusetts, and
only such power, and shall follow the law. In the event the arbitrator
does not follow the law, the arbitrator will have exceeded the scope of
his or her authority and the parties may, at their option, file a motion
to vacate the award in court. Subject to the foregoing, the parties agree
to abide by and perform any award rendered by the arbitrator. Judgment on
the award may be entered in any court having jurisdiction thereof.
13.4 Costs of Arbitration. Each party shall bear one half the cost of the
arbitration filing and hearing fees, and the cost of the arbitrator.
14. GENERAL PROVISIONS.
14.1 Successors and Assigns. The rights and obligations of Company under
this
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Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of Company. Employee shall not be entitled to
assign any of Employee's rights or obligations under this Agreement.
14.2 Waiver. Either party's failure to enforce any provision of this
Agreement shall not in any way be construed as a waiver of any such
provision, or prevent that party thereafter from enforcing each and every
other provision of this Agreement.
14.3 Attorneys' Fees. Each side will bear its own attorneys' fees in any
dispute unless a statutory Section at issue, if any, authorizes the award
of attorneys' fees to the prevailing party.
14.4 Severability. In the event any provision of this Agreement is found
to be unenforceable by an arbitrator or court of competent jurisdiction,
such provision shall be deemed modified to the extent necessary to allow
enforceability of the provision as so limited, it being intended that the
parties shall receive the benefit contemplated herein to the fullest
extent permitted by law. If a deemed modification is not satisfactory in
the judgment of such arbitrator or court, the unenforceable provision
shall be deemed deleted, and the validity and enforceability of the
remaining provisions shall not be affected thereby.
14.5 Interpretation; Construction. The headings set forth in this
Agreement are for convenience only and shall not be used in interpreting
this Agreement. This Agreement has been drafted by legal counsel
representing Company, but Employee has participated in the negotiation of
its terms. Furthermore, Employee acknowledges that Employee has had an
opportunity to review and revise the Agreement and have it reviewed by
legal counsel, if desired, and, therefore, the normal rule of construction
to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of this Agreement.
14.6 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the United States and the Commonwealth of
Massachusetts.
14.7 Notices. Any notice required or permitted by this Agreement shall be
in writing and shall be delivered as follows with notice deemed given as
indicated, (a) by personal delivery when delivered personally; (b) by
overnight courier upon written verification of receipt: (c) by telecopy or
facsimile transmission upon acknowledgment of receipt of electronic
transmission, or (d) by certified or registered mail, return receipt
requested, upon verification of receipt. Notice shall be sent to the
addresses set forth below, or such other address as either party may
specify in writing.
14.8 Survival. Sections 9 ("Post-Termination Non-Competition"), 10
("Confidentiality and Proprietary Rights"), 11 ("Non-Solicitation"), 12
("Injunctive Relief'), 13 ("Agreement to Arbitrate"), 14 ("General
Provisions") and 15 ("Entire Agreement") of this Agreement shall survive
Employee's employment by Company.
15. ENTIRE AGREEMENT. This Agreement, including the Company Employee
Innovations and Proprietary Rights Assignment Agreement incorporated
herein by reference, constitutes
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the entire agreement between the parties relating to this subject
matter and supersedes all prior or simultaneous representations,
discussions, negotiations, and agreements, whether written or oral.
This Agreement may be amended or modified only with the written
consent of both Employee and the Company. No oral waiver, amendment
or modification will be effective under any circumstances
whatsoever.
THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY
UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE
PARTIES HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN BELOW.
[Remainder of page left blank intentionally]
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date set forth in the first paragraph.
CYNOSURE, INC.
By: /s/ Xxxxxx Xxxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxxx
Title: President
Address: 00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
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/s/ Xxxxxxx X. Xxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxx
Address: 000 Xxxxxxxxxx Xx.
Xxxxxxxxx, X.X. 00000
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