RESIGNATION AGREEMENT
Exhibit 10.1
This Resignation Agreement (the “Agreement”) is entered into between Xxxxxxx X.
X’Xxxxxx (“Xx. X’Xxxxxx”) and Medwave, Inc. (“Medwave” or the “Company”).
For purposes of this Agreement, Xx. X’Xxxxxx and Medwave are collectively referred to as the
“Parties.” This Agreement is effective on the Effective Date, as defined below.
For good and sufficient consideration more fully described below, the Parties agree to the
following terms.
1. Resignation, Pay and Benefits.
1.1. Resignation Date. This confirms that Xx. X’Xxxxxx has resigned from all offices
he holds at the Company, including without limitation as President and Chief Executive Officer,
effective on September 21, 2006. Xx. X’Xxxxxx shall cease to be an employee of the Company as of
September 30, 2006.
1.2. Severance Pay. Xx. X’Xxxxxx shall be paid a lump sum in the amount of Two
Hundred Seventy Thousand Dollars ($270,000.00) (the “Severance Pay”). The Company shall
pay Xx. X’Xxxxxx the Xxxxxxxxx Pay on October 2, 2006 (the “Payment Date”).
1.3. Salary and Vacation Pay. On the Payment Date, the Company shall pay Xx. X’Xxxxxx
all remaining Salary due based on his employment to September 30, 2006. The Company shall also pay
Xx. X’Xxxxxx for 122 hours of vacation time, which the Parties agree constitutes his balance of
unused accrued vacation time as of September 30, 2006.
1.4. Dental Insurance. Effective as of the Payment Date, Xx. X’Xxxxxx shall become
eligible to receive group dental plan coverage, pursuant to 29 U.S.C. § 1161 et seq.
(“COBRA”). Xx. X’Xxxxxx’x rights to receive such coverage shall be subject to the
provisions of COBRA. Subject to Xx. X’Xxxxxx’x continued eligibility for COBRA continuation
coverage and the following sentence, the Company shall pay the full premium for such COBRA
continuation coverage until the earlier of: (i) September 30, 2007; or (ii) Xx. X’Xxxxxx’x
commencement of other employment pursuant to which he has the right to obtain group dental
insurance coverage that is at least partially paid by his employer. If Xx. X’Xxxxxx remains
eligible for COBRA coverage and chooses to continue to receive such coverage after September 30,
2007, he will be responsible for the entire cost of the dental care premiums.
1.5. Medical Insurance. Consistent with the Company’s policies and practices for
Massachusetts-based employees and with the availability of post-termination group health plan
continuation rights under COBRA, the Company shall reimburse 80% of Xx. X’Xxxxxx’x premiums for the
personal family medical insurance policy he currently maintains (the “Premiums”) effective
until September 30, 2007; provided that if prior to September 30, 2007, Xx. X’Xxxxxx commences
employment pursuant to which he has the right to obtain group medical insurance coverage that is at
least partially paid by his employer, the Company’s obligation to reimburse 80% of the Premiums
shall expire on the date such coverage becomes available to him.
1.6. Reporting. To assist in administering the foregoing provisions and Section 5.1
below, Xx. X’Xxxxxx shall report to the Company the following in writing and promptly after he
accepts any new employment that is scheduled to commence before September 30, 2007: (i) the
identity of the employer; (ii) his anticipated start date; (iii) the timing of his earliest
eligibility to obtain group dental plan coverage from such employer; and (iv) the timing of his
earliest eligibility to obtain group medical plan coverage from such employer. Xx. X’Xxxxxx shall
also respond fully to any reasonable requests initiated by the Company for any of the foregoing
information.
1.7. Other Benefits. Except as and to the extent specifically referenced in this
Agreement, and notwithstanding the terms of any other benefits plans, programs or policies, Xx.
X’Xxxxxx shall not be entitled to any other fringe benefits effective after September 30, 2006.
2. Bonus Payment/Stock Plan.
2.1. Bonus Payment. In lieu of any payment under any bonus, incentive or commission
plan of the Company, the Company shall pay Xx. X’Xxxxxx a lump sum of One Hundred Thirty-five Thousand
Dollars ($135,000.00) (“Bonus Payment”). The Company shall pay Xx. X’Xxxxxx the Bonus
Payment on the Payment Date.
2.2. Stock Plan. For purposes of the Company’s 2002 Amended and Restated Stock Option
Plan, Xx. X’Xxxxxx’x resignation shall be deemed a retirement and Xx. X’Xxxxxx will therefore have
until December 31, 2006 to exercise stock options granted to him under said Plan.
3. Tax Treatment.
3.1. The Company shall undertake to make deductions, withholdings and tax reports with respect
to payments under this Agreement to the extent that it reasonably and in good faith determines that
it is required to make such deductions, withholdings and tax reports. Payments under this
Agreement shall be in amounts net of any such deductions or withholdings. Nothing in this
Agreement shall be construed to require the Company to make any payments to compensate Xx. X’Xxxxxx
for any adverse tax effect associated with any payments or benefits or for any deduction or
withholding from any payment or benefit.
4. Return of Property; Non-Competition, Proprietary Information and Inventions
Agreement.
4.1. Return of Property. Xx. X’Xxxxxx confirms that, to the best of his knowledge, he
has returned to the Company all Company property that is in his possession, custody or control,
including, without limitation, computer equipment, including any laptop computer, software, keys
and access cards, credit cards, files and any documents (including computerized data and any copies
made of any computerized data or software) containing information concerning the Company, its
business or its business relationships (in the latter two cases, actual or prospective). Xx.
X’Xxxxxx also commits to deleting and finally purging any duplicates of files or documents that may
contain Company information from any computer or other device that remains his property after the
end of his employment on September 30, 2006. In the event that Xx. X’Xxxxxx discovers that he
continues to retain any such property, he shall return it to the Company immediately.
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4.2. Non-Competition, Proprietary Information and Inventions Agreement. Xx. X’Xxxxxx
agrees to the terms and conditions of the Non-Competition, Proprietary Information and Inventions
Agreement (“Inventions Agreement”) incorporated hereto and attached as Exhibit A as if he
had entered into them upon commencement of his employment with the Company, except that this
Agreement supersedes Section 1 of the Inventions Agreement.
5. Noncompetition.
5.1. For the period of one (1) year following the Payment Date, Xx. X’Xxxxxx shall not,
directly or indirectly, whether as owner, partner, shareholder, consultant, agent, employee,
co-venturer, work for or otherwise assist or invest in Tensys Medical, Inc., Xxxxx Xxxxx, Inc. or
the Critikon Division of General Electric Company (the “Competitors”) at or for any
location in the United States or Canada. Xx. X’Xxxxxx agrees that the scope of these restrictions
encompasses anywhere in the United States. Notwithstanding the foregoing, Xx. X’Xxxxxx may own up
to one percent of the outstanding common stock of the Competitors. Xx. X’Xxxxxx understands that
the restrictions set forth in this Section 4.1 are intended to protect the Company’s interest in
its Confidential Information and established employee, customer and supplier relationships and
goodwill. Xx. X’Xxxxxx agrees that such restrictions are reasonable and appropriate for this
purpose.
6. Nondisparagement.
6.1. Xx. X’Xxxxxx agrees not to make any disparaging statements concerning the Company or
current or former officers, directors, shareholders, employees or agents. The Company shall
instruct the current members of its Board of Directors not to make disparaging statements about Xx.
X’Xxxxxx during such persons’ service on its Board of Directors. These nondisparagement
obligations shall not in any way affect Xx. X’Xxxxxx’x or any director’s obligation to testify
truthfully in any legal proceeding.
7. Mutual Releases.
7.1. Release by Xx. X’Xxxxxx. In exchange for the consideration described in this
Agreement, Xx. X’Xxxxxx hereby agrees that he, on behalf of himself and his representatives,
agents, estate, heirs and assigns, absolutely and unconditionally releases, forever discharges, and
holds harmless the Company, its affiliated and related entities, and its current and former
directors, shareholders, officers, employees, attorneys, representatives and/or agents of the
Company both individually and in their official capacities (collectively and individually the
“Company Releasees”), from any and all actions or causes of action, suits, claims,
complaints, contracts, liabilities, agreements, promises, contracts, torts, debts, damages,
controversies, judgments, rights and demands of any kind and nature, whether existing or
contingent, known or unknown (collectively, “Claims”) that Xx. X’Xxxxxx now has, owns or
holds, or claims to have, own or hold, or at any time had, owned or held, or claimed to have had,
owned or held, against any of the Company Releasees. This general release of Claims includes,
without express or
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implied limitation, all Claims against any of the Company Releasees that relate
to Xx. X’Xxxxxx’x employment with the Company and all Claims that arise from the agreement to
separate from employment pursuant to this Agreement. This release further includes, without
limitation, all Claims against any of the Company Releasees based on any federal or state law or
regulation concerning employment or employment discrimination, including those laws or
regulations concerning discrimination on the basis of age (including without limitation the Age
Discrimination in Employment Act); any contract, whether oral or written, express or implied; any
breach of the implied covenant of good faith and fair dealing, any tort; any claim for defamation
or damage to reputation; any Claim for equity or ownership interest (other than pursuant to Section
2.2); any Claim for salary or benefits; any Claim for attorney’s fees; and/or any statutory or
common law claims. Xx. X’Xxxxxx acknowledges that actions undertaken pursuant to and in
conformance with this Agreement, including without limitation the separation of his employment,
shall not give rise to any Claims. Except to the extent specifically provided above, Xx. X’Xxxxxx
is not releasing his rights, if any, to vested benefits as a terminated employee under the terms of
any employee benefit plan (as defined by the Employee Retirement Income Security Act) maintained by
the Company, including without limitation the Company’s SARSEP plan, nor is he releasing his rights
under this Agreement.
Xx. X’Xxxxxx further agrees that he shall not seek or accept damages of any nature, other
equitable or legal remedies for his own benefit, attorney’s fees, or costs from any of the
Releasees with respect to any Claim released by this Agreement. As a material inducement to the
Company to enter into this Agreement, Xx. X’Xxxxxx represents that he has not assigned to any third
party and he has not filed with any agency or court any Claim released by this Agreement.
7.2. Release by the Company. In exchange for the consideration described in this
Agreement, the Company, on behalf of itself and its representatives, agents, estates, heirs,
successors and assigns, hereby absolutely and unconditionally releases, forever discharges and
holds harmless Xx. X’Xxxxxx and his estate, heirs and attorneys (the “X’Xxxxxx Releasees”),
from any and all Claims that any of them now has, owns or holds, or claims to own or hold, or at
any time had, owned or held, or claimed to have had, owned or held, against any of the X’Xxxxxx
Releasees. This general release of Claims includes, without express or implied limitation, all
Claims that relate to Xx. X’Xxxxxx’x employment with the Company. This release further includes,
without limitation, all Claims against any of the X’Xxxxxx Releasees based on any contract, express
or implied; any tort; and any statutory or common law Claim. Except to the extent specifically
provided above, nothing herein shall be deemed to release or waive any right to seek enforcement of
the terms of this Agreement or of any plan, benefit or agreement expressly preserved pursuant to
this Agreement. In addition, nothing herein shall be deemed to release or waive any civil Claims
based on conduct of Xx. X’Xxxxxx that satisfies the elements of a criminal offense (“Excepted
Claims”). The Company represents that none of its directors currently has knowledge of any
basis for asserting any Excepted Claims against Xx. X’Xxxxxx.
7.3. Covenant Not to Xxx. Each Party agrees that he or it shall not seek or accept
damages of any nature, other equitable or legal remedies for his or its own benefit, attorney’s
fees or costs with respect to any Claim released by this Agreement. Each Party represents that he
or it has not assigned to any third party and has not filed with any agency or court any Claim
released by this Agreement.
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8. Future Cooperation.
8.1. Xx. X’Xxxxxx agrees to cooperate reasonably with the Company (including its outside
counsel) in connection with the contemplation, prosecution and defense of all phases of existing,
past and future litigation or proceedings before any governmental regulatory body about which the
Company believes Xx. X’Xxxxxx may have knowledge or information. Xx. X’Xxxxxx also agrees to
cooperate reasonably with the Company (including its outside counsel) in connection with or in
response to any inquiry of the Company by a governmental regulatory body. Xx. X’Xxxxxx further
agrees to make himself available at mutually convenient times during and outside of regular
business hours as reasonably deemed necessary by the Company’s counsel. Xx. X’Xxxxxx agrees to
appear without the necessity of a subpoena to testify truthfully in any legal proceedings or
proceedings before a regulatory governmental agency in which the Company calls him as a witness.
The Company shall also reimburse Xx. X’Xxxxxx for any pre-approved reasonable business travel
expenses that he incurs on the Company’s behalf as a result of his litigation and/or regulatory
compliance cooperation services, after receipt of appropriate documentation consistent with the
Company’s business expense reimbursement policy. In addition, for all time that Xx. X’Xxxxxx
reasonably expends in cooperation with the Company pursuant to this Section 8.1, the Company shall
compensate Xx. X’Xxxxxx at the rate of $190.00 per hour; provided that Xx. X’Xxxxxx’x right to such
compensation shall not apply to time spent in activities that could have been compelled pursuant to
a subpoena, including testimony and related attendance at depositions, hearings or trials.
9. Enforcement.
9.1. Jurisdiction. Xx. X’Xxxxxx and the Company hereby agree that the Superior Court
of the Commonwealth of Massachusetts and the United States District Court for the District of
Massachusetts shall have the exclusive jurisdiction to consider any matters related to this
Agreement, including without limitation any claim for violation of this Agreement. With respect to
any such court action, Xx. X’Xxxxxx (i) submits to the jurisdiction of such courts, (ii) consents
to service of process, and (iii) waives any other requirement (whether imposed by statute, rule of
court or otherwise) with respect to personal jurisdiction or venue.
9.2. Relief. Xx. X’Xxxxxx agrees that it would be difficult to measure any harm
caused to the Company that might result from any breach by him of his promises set forth in
Sections 4, 5, 6 and 8, and that in any event money damages would be an inadequate remedy for any
such breach. Accordingly, Xx. X’Xxxxxx agrees that if he breaches, or propose to breach, any
portion of his obligations under Sections 4, 5, 6 and 8, the Company shall be entitled, in addition
to all other remedies it may have, to an injunction or other appropriate equitable relief to
restrain any such breach, without showing or proving any actual damage to the Company and without
the necessity of posting a bond. In the event that the Company prevails in any action to enforce
Sections 4, 5, 6 and 8, then Xx. X’Xxxxxx also shall be liable to the Company for attorney’s fees
and costs incurred by the Company in enforcing such provision(s).
9.3. Enforcement. This Agreement shall be deemed to be made and entered into in the
Commonwealth of Massachusetts, and shall in all respects be interpreted, enforced and governed
under Massachusetts law, without giving effect to the conflict of laws principles of Massachusetts
law. The language of all parts of this Agreement shall in all cases be construed as a whole,
according to its fair meaning, and not strictly for or against any of the Parties.
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10. Agreement With Xx. X’Xxxxxx.
10.1. In addition to any other conditions to the effectiveness of this Agreement, this
Agreement shall not take effect unless Xxxxxxxx X’Xxxxxx and the Company enter into a Resignation
Agreement.
11. Severability.
11.1. Should any provision of this Agreement be declared or be determined by any court to be
illegal or invalid, the validity of the remaining parts, terms, or provisions shall not be affected
thereby and said illegal or invalid part, term or provision shall be deemed not to be a part of
this Agreement.
12. Time for Consideration; Effective Date.
12.1. Xx. X’Xxxxxx acknowledges that he has been given the opportunity, if he desired, to
consider this Agreement for twenty-one (21) days before executing it. If Xx. X’Xxxxxx does not
sign this Agreement and return it to counsel for the Company so that such counsel receives this
Agreement within twenty-one (21) days of his receipt of this Agreement, this Agreement will not be
valid. In the event that Xx. X’Xxxxxx executes and returns this Agreement within less than
twenty-one (21) days, he acknowledges that such decision was entirely voluntary and that he
understood that he had the opportunity to consider this Agreement for the entire twenty-one (21)
day period.
12.2. The Company acknowledges that for a period of seven (7) days from the date of Xx.
X’Xxxxxx’x execution of this Agreement, Xx. X’Xxxxxx shall retain the right to revoke this
Agreement by written notice that Medwave receives before the end of such period, and that this
Agreement shall not become effective or enforceable until the expiration of such revocation period.
12.3. This Agreement shall become effective on the business day immediately following the
expiration of the revocation period (the “Effective Date”), provided that Xx. X’Xxxxxx does
not revoke this Agreement during that revocation period. If the Company makes any payments to Xx.
X’Xxxxxx in anticipation of the effectiveness of this Agreement but this Agreement does not become
effective, Xx. X’Xxxxxx shall immediately return any and all such payments to the Company
immediately.
12.4. Xx. X’Xxxxxx acknowledges that he has been advised to discuss all aspects of this
Agreement with his attorney, that he has carefully read and fully understands all of the provisions
of this Agreement, and that he is voluntarily entering into this Agreement.
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13. No Transfer.
13.1. Each Party represents that such Party has not assigned, transferred, or purported to
assign or transfer, to any person or entity, any Claim or any portion of any Claim or interest
therein.
14. No Reliance.
14.1. Each Party represents and acknowledges that in executing this Agreement, such Party has
not relied upon any representation or statement made by any of the other Party’s Releasees with
regard to the subject matter, basis or effect of this Agreement, other than the promises and
representations made in this Agreement.
15. Binding Nature of Agreement.
15.1. This Agreement shall be binding upon each of the Parties and upon their respective
representatives, successors and assigns and shall inure to the benefit of each Party and to their
representatives, successors and assigns.
16. Modification of Agreement.
16.1. This Agreement may be amended, revoked, changed or modified only upon a written
agreement executed by all Parties. No waiver of any provision of this Agreement will be valid
unless it is in writing and signed by the Party against whom such waiver is charged.
17. Entire Agreement.
17.1. This Agreement sets forth the entire agreement between the Parties hereto, and fully
supersedes any and all prior agreements or understandings between Xx. X’Xxxxxx and the Company,
except that: (a) this Agreement shall not supersede the agreement referenced in Section 4.2 of this
Agreement and (b) nothing in this Agreement shall affect Xx. X’Xxxxxx’x SARSEP plan rights.
17.2. Notwithstanding anything in this Agreement to the contrary, Xx. X’Xxxxxx shall retain
indemnification rights he may have under the Company’s By-Laws.
18. Authority.
18.1. Each of the persons executing this Agreement represents and warrants that he has full
power and authority to enter into this Agreement on behalf of the Party for which he is signing and
that each and every provision of this Agreement that purports to bind or obligate each such Party
is a valid and enforceable obligation of that Party.
19. Counterparts.
19.1. This Agreement may be executed in counterparts. Each counterpart when executed shall
have the efficacy of a signed original.
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This Agreement has been executed as a sealed instrument by the Parties.
| /s/ Xxxxxxx X. X’Xxxxxx
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September 22, 2006
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| Then personally appeared before
me Xxxxxxx X’Xxxxxx and stated that
the execution of this
Resignation Agreement was his free act and deed |
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My commission expires: 12/15/2011 |
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| MEDWAVE, INC | |||
| By: /s/ Xxxxx X. Xxxxxxx
Title: CEO (interim) |
September 23, 2006
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| Then personally appeared before me
the above signatory and stated that
the execution of
this Resignation Agreement was such signatory’s free act and deed |
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|
My commission expires: |
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