EMPLOYMENT AGREEMENT PARTIES
Exhibit
10.32
PARTIES
This
employment Agreement (this "Agreement"), dated as of the 12th day of October
2006, is entered into by and between CardioTech International, Inc., a
Massachusetts corporation having its principal place of business at 000 Xxxxxxx
Xxxxxx, Xxxxxxxxxx, XX 00000 and Xx. Xxxxxx Xxxx, an individual with an address
at 0000 Xxxxxxxxx Xxxxxxxx, Xxxxxxxxxx XX 00000, (the
"Employee").
TERMS OF
AGREEMENT
In
consideration of this-Agreement and the continued employment of the Employee by
the Company, the parties agree as follows:
1. Employment. The
Company hereby employs the Employee, on a full-time basis, to act as its Vice
President. and General Manager of CardioTech International, Inc.’s Catheter and
Disposables, Inc. subsidiary (the "Company") and to perform such acts and duties
and furnish such services to the Company in connection with and related to those
positions as is customary for persons with similar positions in like companies,
and as the Board of Directors of CardioTech International, Inc. (the "Board")
shall from time to time reasonably direct. The Employee hereby
accepts said employment. The Employee shall use his best and most
diligent efforts to promote the interests of the Company; shall discharge his
duties in a highly competent manner; and shall devote his full business time and
his best business judgment, skill and knowledge to the performance of his duties
and responsibilities hereunder. The Employee shall report directly to
the President and Chief Employee Officer of CardioTech International, Inc.
Nothing contained herein shall preclude the Employee from devoting incidental
and insubstantial amounts of time to activities other than the business of the
Company.
2 Term of Employment.
The Company
agrees to employ
the Employee for the period commencing on October 23, 2006 and ending on October
22, 2007 (the "Employment Period") Notwithstanding the foregoing,
both the Employee and the Company shall have the right to terminate the Employee
employment under this Agreement upon thirty (30) days written notice to the
other party, subject to the Company's obligation to pay severance benefits under
certain circumstances as provided in Sections 3.6 and 3.7 hereof. If
the Employee shall remain in the employ of the Company beyond the Employment
Period, in the absence of any other express agreement between the parties, this
Agreement shall be deemed to continue on a month-to-month basis (the "Extended
Employment Period).
3. Compensation and Benefits;
Disability.
3.1. Salary. During
the Employee’s
employment, the company shall pay the Employee an annualized base salary of One
Hundred Eighty Thousand Dollars ($180,000) (the "Base Salary"), payable in equal
installments pursuant to the Company's customary payroll policies in force at
the time of payment (but in no event less frequently than monthly) , less
required payroll deductions and state and federal withholdings. In
addition to the Base Salary the employee will be eligible for a car allowance of
eight thousand, four hundred dollars ($8,400). The Base Salary may be
adjusted from time to time in the sole discretion of the President and Chief
Executive Officer, in an amount to be determined by the Compensation Committee
of the Board.
3.2. Bonus
Payment. During the Employment Period, the Employee may
receive, in the sole discretion of the President and Chief Executive Officer, an
annual bonus payment in an amount, if any, to be determined by the Compensation
Committee of the Board.
3.3. Benefits. During
the Employment Period, the Employee shall receive such benefits as are
customarily provided to other officers and employees of the Company, including
but not limited to the following benefits:
(a) Health
Insurance. Contributory (20%) health insurance pursuant to a
health policy or
substantially similar policy; and
(b) Life
Insurance. Life insurance on the life of the Employee with an
Employee-directed beneficiary in the amount of 200% of the Base
Salary.
3.4. Paid time off The Employee may take 25
days of paid time off during each year at such times as shall be Consistent with
the Company's policies and with the Company's paid
time off schedule for officers and other employees.
3.5. Disability or
Death. If during the Employment Period, the Employee shall (I)
become ill, disabled or otherwise incapacitated so as to be unable to perform
his usual duties (a) for a period in excess of one hundred twenty (120)
consecutive days or (b) for more than one hundred eighty (180) days in-any
consecutive twelve (12) month period, or (ii) die, then the Company shall have
the right to terminate this Agreement, in accordance with applicable
laws, on thirty
(30) days written notice to the Employee or his estate.
3.6. Severance
Payment. In the event (I) the Company terminates
this Agreement without cause (i.e., other than pursuant to Section 3.5 or
Section 4 hereof) at any time (including during the Extended Employment Period),
or (ii) the Employee terminates his employment for Good Reason following a
Change in Control of the Company, or (iii) the Company fails to renew this
Agreement within- one (1) year following the occurrence of a Change in Control,
the Company shall pay the Employee a severance payment equal to the Employee’s
then current Base Salary multiplied by 1.00; such severance payment to be
adjusted to the extent necessary to avoid such payment being treated as an
"excess parachute payment" for purposes of Section 28OG of the Internal Revenue
Code of 1986.
"Good
Reason" shall mean, during the nine (9) month period following a Change -in
Control, (1) a good faith determination by the Employee that as a result of such
Change in Control he is not able to discharge his duties effectively or (2)
without the Employee's express written consent, the occurrence of any of the
following circumstances: (a) the assignment to the Employee of any duties
inconsistent (except in the nature of a promotion) with the position in the
Company that he held immediately prior to the Change in Control or a substantial
adverse alteration in the nature or status of his position or responsibilities
or the Conditions of his employment from those in effect immediately prior to
the Change in Control; (b) a reduction by the Company in the Base Salary as in
effect on the date of the Change in Control; (c) the Company's requiring the
Employee to be based more than twenty-five (25) miles from the Company's offices
at which he was principally employed immediately prior to the date of the Change
in Control except for required travel on the Company's business to an extent
substantially consistent with his present business travel obligations; or (d)
the failure by the Company to continue in effect any material compensation or
benefit plan in which the Employee participates immediately prior to the Change
in Control unless an equitable arrangement (embodied in an ongoing substitute or
alterative plan) has been made with respect to such plan, or the failure by the
Company to Continue the Employee’s participation therein (or in such substitute
or alterative plan) on a basis not materially less favorable, both in terms of
the amount of benefits provided and the level of his participation relative to
other participants than existed at the time of the Change in
Control. The Employee’s continued employment shall not constitute
consent to, or a waiver of rights with respect to, any circumstance constituting
Good Reason hereunder.
For
purposes of this Agreement, a "Change in Control" shall occur or be deemed to
have occurred only if any of the following events occur: (i) any person, as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act”), (other than any
majority owned subsidiary thereof, the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, any trustee or
other fiduciary of a trust treated for federal, income tax purposes as a grantor
trust of which the Company is the grantor, or any corporation owned directly or
indirectly by the Stockholders of the Company in substantially the same
proportion as their ownership of stock of the Company) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the company representing 50% or more of the
combined voting power of the Company's then outstanding securities on any matter
which could come before its stockholders for approval; (ii) individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company’s
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board (other than an election or nomination of an
individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of the
Company, as such terms are used in Rule14 a -11 of Regulation 14A under the
Exchange Act) shall be, for purposes of this Agreement, considered as though
such person were a member of the Incumbent Board; (iii) the stockholders of the
Company approve a merger or consolidation of the Company with any other
corporation, other than (A) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 80% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation or (B) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person (as hereinabove defined) acquires more
than 50% of the combined voting power of the Company’s then outstanding
securities; or (iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
3.7. Benefits After
Termination Except as otherwise required by law, the Employee
shall not be entitled to any employee benefits provided under Section 3.3 hereof
after termination of the employment of the Employee, whether or not severance
pay is being provided, except that if the Employee is entitled to the severance
payment described in Section 3.6 of this Agreement, (I) the Company shall
continue in full force and effect, at its expense, the life insurance provided
for in Section 3.3(b) hereof for a period of one (1) year after termination of
the Employee’s employment hereunder or until the Employee becomes employed,
whichever first occurs, and (ii) during the six (6) month period following the
termination of the Employee's employment, the Company shall reimburse the
Employee for out-of-pocket health insurance expenses incurred by the Employee
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986
("COBRA"). If the Employee elects not to maintain health insurance
pursuant to COBRA, the Company is under no obligation to reimburse the Employee
for his otherwise elected coverage. The Employee shall be obligated
to give the Company prompt notice of his employment.
4. Discharge for
Cause. The Company may discharge the Employee and terminate
his employment under this Agreement for Cause without further liability to the
Company by a majority vote of the Board, except that Employee, if a Director,
shall not be entitled to vote thereon. As used in this Agreement,
"Cause" shall mean any or all of the following:
(a) misconduct
of the Employee during the course of his employment which is materially
injurious to the Company and which is brought to the attention of the Employee
promptly after discovery by the Company, including but not limited to, theft or
embezzlement from the Company, the intentional provision of services to
competitors of the Company, or improper disclosure of proprietary information,
but not including any act or failure to act by the Employee that he believed in
good faith to be proper conduct not adverse to his duties
hereunder;
(b) willful
disregard or neglect by the Employee of his duties or of the Company's interests
that continues after being brought to the attention of the
Employee;
(c) unavailability
(except as provided in Section 3.5 hereof) of the Employee to substantially
perform the duties provided for herein;
(d) conviction
of a fraud or felony or any criminal offense involving dishonesty, breach of
trust or moral turpitude during the Employee’s employment;
(e) the
Employee’s breach of any of the material terms of this Agreement (including the
failure of the Employee to discharge his duties in a highly competent manner) or
any of the agreements executed in connection herewith as enumerated in Section
10.1 hereof.
In the
event the Company exercises its right to terminate the Employee’s employment
under this Section 4, the Employee shall not be entitled to receive any
severance pay or other termination benefits, except as required by
law.
5 . Termination Without
Cause. The
Company may terminate this Agreement without cause, without further liability to
the Company except as set forth in Sections 3.6 and 3.7 hereof, by a majority
vote of the Board. The Employee, if a Director, shall not be entitled
to vote on the termination of this Agreement without Cause.
6 . Expenses. Pursuant
to the Company' s customary policies in force at the time of payment, the
Employee shall be promptly reimbursed, against presentation of vouchers or
receipts therefore, for all authorized expenses properly incurred by him on the
Company's behalf in the performance of his duties hereunder.
7 . Additional
Agreements. The Employee has executed and delivered to the
Company a Non-Disclosure and Invention Assignment Agreement, dated October xx
206 which shall survive the expiration of or termination of this Agreement and
the termination of Employee’s employment with the Company for any
reason.
8. Arbitration. All disputes and claims
relating to this Agreement and the rights, obligations and performance of the
parties hereto shall be settled by a single arbitrator sitting in Boston,
Massachusetts under the applicable rules of the American Arbitration
Association.
9 . Notices. Any
notice of communication given by any party hereto to the other party or parties
shall be in writing and personally delivered, mailed by certified mail, return
receipt requested, postage prepaid, or delivered by a recognized overnight
carrier, to the addresses provided above. All notices shall be deemed
given when actually received. Any person entitled to receive notice
(or a copy thereof) may designate in writing, by notice to the others, another
address to which notices to such person shall thereafter be sent.
10. Miscellaneous.
10.1. Entire Agreement.
This Agreement contains the entire understanding of the parties in respect of
its subject matter and supersedes all prior agreements and understandings
between the parties with respect to such subject matter; provided, however, that
nothing in this Agreement shall affect the Employee’s or the Company's
obligations under the Non-Disclosure and Invention Assignment Agreement dated
October xx, 2006, between the parties hereto.
10.2. Amendment;
Waiver. This Agreement may not be amended, supplemented,
canceled or discharged, except by written instrument executed by the party
affected thereby. No failure to exercise, and no delay in exercising,
any right, power or privilege hereunder shall operate as a waiver
thereof. No waiver of any breach of any provision of this Agreement
shall be deemed to be a waiver of any preceding or succeeding breach of the same
or any other provisions.
10.3. Binding Effect;
Assignment. The rights and obligations of this Agreement shall
bind and inure to the benefit of any successor of the Company by reorganization,
merger or consolidation, or any assignee of all or substantially all of the
Company's business and properties. The Employee’s rights or
obligations under this Agreement may not be assigned by the Employee; except
that the Employee’s right to compensation to the earlier of the date of death,
disability pursuant to Section 3.5 hereof, or termination of actual employment,
shall pass to the Employee’s executor or administrator.
10.4. Headings. The
headings contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.
10.5. Governing Law:
Interpretation. This Agreement shall be construed in
accordance with and governed for all purposes by the laws and public policy of
the Commonwealth of Massachusetts applicable to contracts executed and to be
wholly performed within such Commonwealth. Service of process in any
dispute shall be effective (a) upon the Company, if service is made on any
officer of the Company other than the Employee; (b) upon the Employee, if served
at the Employee’s
residence last known to the Company with an information copy to the Employee at
any other residence, or in care of a subsequent employer of which the Company
may be aware.
10.6. Further
Assurances. Each of the parties agrees to execute,
acknowledge, deliver and perform, or cause to be executed, acknowledged,
delivered or performed, at any time, or from time to time, as the case may be,
all such further acts deeds, assignments, transfers, conveyances, powers of
attorney and assurances as may be necessary or proper to carry out the
provisions or intent of this Agreement.
10.7. Severability. If
any one or more of the terms, provisions, covenants or restrictions of this
Agreement shall be determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect, and shall in no way be affected, impaired or invalidated. If,
moreover, any one or more of the provisions contained in this Agreement shall
for any reason be determined by a court of competent jurisdiction to be
excessively broad as to duration, geographical scope, activity or subject, it
shall be construed by limiting or reducing it so as to be enforceable to the
extent compatible with then applicable law.
EXECUTION
The
parties executed this Agreement as a sealed instrument as of the date first above
written, whereupon it became binding in accordance with its terms.
CARDIOTECH
INTERNATIONAL, INC.
By: /s/ Xxxxxxx X.
Xxxxx
Name: Xxxxxxx
X. Xxxxx.
Title: President
and Chief Executive Officer
EMPLOYEE
By: /s/ Xxxxxx
Xxxx
Xxxxxx Xxxx
