EMPLOYMENT AGREEMENT
THIS
AGREEMENT
made in
Iselin, New Jersey this 1st day of May, 2007 between SyntheMed, Inc., a Delaware
corporation (the "Company"), and -------------------Xxxx X. Sportsman, the
undersigned individual ("Executive").
1. Agreement
Term.
The
term
of this Agreement shall be the three-year period commencing as of May 1, 2007
(the "Employment Date") and ending on the third anniversary of the Employment
Date (the "Agreement Term"). Subject to earlier termination as provided in
Section 5, the Agreement Term shall automatically be renewed for annual
increments as of the third anniversary of the Employment Date and each
subsequent anniversary thereof, subject to the right of either party to
terminate the Agreement at the end of the initial Agreement Term or any such
renewal term upon at least six months’ prior written notice to the other party.
2. Employment.
(a) Employment
by the Company.
Executive agrees to be employed by the Company for the Agreement Term upon
the
terms and subject to the conditions set forth in this Agreement. Executive
shall
have the title of Vice President of Sales and such other titles, if any, as
shall be mutually agreed. Executive shall report to the President and Chief
Executive Officer and shall have such duties, consistent with the customary
business practices for those with the agreed upon titles, as may be prescribed
by the Com-pany and shall serve in such other and/or additional position(s)
as
shall be mutually agreed from time to time. The Company will at all times treat
the Executive with dignity, honesty and respect, and will provide Executive
with
such resources as in the Company's judgement shall enable the Executive to
discharge his responsibilities.
(b) Performance
of Duties.
Throughout the Agreement Term, Executive shall faithfully and diligently perform
Executive's duties in conformity with the directions of the Company and serve
the Company to the best of Executive's ability. Executive shall devote
Executive's entire working time, attention and energies to the business and
affairs of the Com-pany, subject to vacations and sick leave as provided herein
and in accordance with Company policy.
(c) Place
of Performance.
During
the Agreement Term, except as otherwise mutually agreed, Executive shall,
subject to travel requirements on behalf of the Company, be based at the
Executive’s residence in the continental United States.
3. Compensation
and Benefits.
(a) Base
Salary.
The
Company agrees to pay to Executive for employment hereunder a base salary ("Base
Salary") at the annual rate of $240,000. The Base Salary shall
be
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increased
prospectively on each anniversary of the Employment Date during the Agreement
Term, by such amount as the Board of Directors of the Company shall determine
is
necessary and appropriate to give effect to increases in the cost of living.
The
Base Salary shall be pay-able in installments consistent with the Company's
payroll practices then in effect.
(b) Benefits
and Perquisites; Bonus and Stock Options.
Executive shall be entitled to participate in, to the extent Executive is
otherwise eligible under the terms thereof, the benefit plans and programs,
including medical and savings and retirement plans, and receive the benefits
and
perquisites, generally provided to employees of the same level and
responsibility as Executive. Executive shall be entitled to a car allowance
of
$700.00 per month during the Agreement Term, payable monthly. Executive shall
be
entitled to four (4) weeks vacation during each year of the Agreement Term.
Nothing in this Agreement shall preclude the Company from terminating or
amending from time to time any employee benefit plan or program. Executive
shall
be eligible for bonuses and stock options, at such times and in such amounts
as
shall be determined at the discretion of the Board of Directors of the Company
based on their assessment of Executive's performance of his duties and on the
financial performance of the Company.
(c) Travel
and Business Expenses.
Upon
submission of itemized expense statements with supporting receipts in the manner
specified by the Company, Executive shall be entitled to reimbursement for
reasonable travel and other reasonable business expenses duly incurred by
Executive in the performance of Executive's duties under this Agreement in
accordance with the policies and procedures established by the Company from
time
to time for employees of the same level and responsibility as
Executive.
(d) No
Other Compensation or Benefits; Payment.
The
compensation and benefits specified in Sections 3 and 5 of this Agreement shall
be in lieu of any and all other compensation and benefits, except as may become
due and owing under a Change in Control Agreement entered into contemporaneously
herewith and except as may otherwise be agreed in writing between the parties
subsequent to the date hereof. Payment of all compensation and benefits to
Executive hereunder shall be made in accordance with the relevant Company
policies in effect from time to time, including normal payroll practices, and
shall be subject to all applicable employment and with-holding taxes.
(e) Cessation
of Employment.
In the
event Executive shall cease to be employed by the Company for any reason, then
Executive's compensation and benefits shall cease on the date of such event,
except as otherwise provided herein or in any applicable employee benefit plan
or program.
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4.
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Exclusive
Employment; Noncompetition.
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(a) No
Conflict; No Other Employment.
During
the period of Executive’s employment with the Company, Executive shall not
engage in any activity which conflicts or interferes with or derogates from
the
performance of Executive’s duties hereunder nor shall
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Executive
engage in any other business activity, whether or not such business activity
is
pursued for gain or profit, except as approved in advance in writing by the
President & CEO of the Company.
(b) No
Competition.
Without
limiting the generality of the provisions of Section 2(b) and so long as the
Company fulfills its obligations under this Agreement including, without
limitation, its obligations under Section 5, during the period of Executive's
employment with the Company, and for 12 months thereafter (the "Restricted
Period"), Executive shall not, directly or indirectly, own, manage, operate,
join, control, participate in, invest in or otherwise be con-nected or
associated with, in any manner, including as an officer, director, employee,
partner, stockholder, joint venturer, lender, consultant, advisor, agent,
proprietor, trustee or investor, any Competing Business located in the United
States or in any other location where the Company operates or sells its products
or services.
(i) As
used
in this Agreement, the term "Competing Business" shall mean any business or
venture which engages in any business area, or sells or provides products or
services that compete or overlap with any business area, in which the Company
engages or is actively developing products or technology to engage in at any
time during the Agreement Term, or any business or venture which sells or
provides products or services that com-xxxx or overlap with the products or
services as sold or provided, or are being actively developed to be sold or
provided, by the Company at any time during the Agreement Term. For the
avoidance of doubt, and without limiting the foregoing, “Competing Business”
includes any business or venture that offers for sale products or services
to
reduce or prevent formation of adhesions in patients following surgical
procedures.
(ii) For
purposes of this Section 4(b), the term "invest" shall not preclude an
investment in not more than one percent (1%) of the outstanding capital stock
of
a corporation whose capital stock is listed on a national securities exchange
or
included in the NASDAQ Stock Market, so long as Executive does not have the
power to control or direct the management of, or is not otherwise associated
with, such corpora-tion.
(c) No
Solicitation.
During
the Restricted Period, Executive shall not solicit or encourage any employee
or
consultant of the Company to leave the employ, or cease his or her relationship
with, the Company for any reason, nor employ or retain such an individual in
a
Competing Business or any other business.
(d) Company
Customers.
Executive shall not, during the Restricted Period, directly or indirectly,
contact, solicit or do business with any "customers" (as hereinafter defined)
of
the Company for the purpose of selling or providing any product or service
then
sold or provided by the Company to such customers or being actively developed
to
be sold or pro-vided to such customers during Executive's employment by the
Company or at the time of termination of Executive's employment
hereunder.
For
the
purposes of the provisions of this Section 4(d), "customer" shall include any
entity that purchased any product or service from the Company or its
distributors within twelve
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months
of
the termination of Executive's employment hereunder, without regard to the
reason for such termina-tion. The term "customer" also includes any former
customer or potential customer of the Company which the Company has solicited
within twelve months of such termination, for the purpose of selling or
providing any product or service then sold or provided, or then actively being
developed to be sold or provided, by the Company.
(e) Modification
of Covenants.
The
restrictions against competition set forth in this Section 4 are considered
by the parties to be reasonable for the purposes of protecting the business
of
the Company. However, if any such restriction is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of
time or over too great a range of activities or in too broad a geographic area,
it shall be interpreted to extend only over the maximum period of time, range
of
activities or geographic area as to which it may be enforceable.
5. Termination
of Employment.
(a) Termination.
The
Company may terminate Executive's employment for Cause (as hereinafter defined)
in which case the provisions of Section 5(b) shall apply. The Company may also
terminate Executive's employment in the event of Executive's Disability (as
hereinafter defined), in which case the provisions of Section 5(c) shall apply.
The Company may also terminate the Executive's employment for any other reason
by written notice to Executive, in which case the provisions of Section 5(d)
shall apply. If Executive's employment is terminated by reason of Executive's
death, retirement or voluntary resignation without Good Reason, the provisions
of Section 5(b) shall apply.
(b) Termination
for Cause; Termination by Reason of Death or Retirement or Voluntary Resignation
without Good Reason.
(1) In
the
event that Executive's employment hereunder is terminated during the Agreement
Term (i) by the Company for Cause (as hereinafter defined), (ii) by reason
of
Executive's death or retirement or (iii) by reason of Executive's voluntary
resignation without Good Reason, then the Company shall pay to Executive, within
thirty (30) days of the date of such termination, only the Base Salary through
such date of termination.
(2) For
purposes of this Agreement, "Cause" shall mean
(i)
gross
neglect or misconduct in the perform-ance of Executive's duties
hereunder;
(ii)
the Executive’s engaging in any act that constitutes neglect or willful
misconduct and that is injurious to the Company or any of its affiliates
including without limitation engaging in conduct in violation of the Company’s
Code of Business Conduct or Xxxxxxx Xxxxxxx Policy, as the same may be in effect
from time to time, or making a written certification that the Executive knows
or
should know is erroneous and that contributes to a material error in the
Company’s filings with any governmental agency; (iii) the Executive’s conviction
of, or entering a plea of guilty, nolo contendere (or similar plea) to a crime
that constitutes a felony or any crime of moral turpitude; or (iv) the
Executive’s breach of any provision of this Agreement
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(3) In
the
event the Company desires to terminate Executive's employment for Cause as
defined in clauses (i) or (iv) of the definition thereof, the Com-pany shall
first attempt to resolve the matter(s) at issue through a meeting between
Executive and the Chairman of the Board of Directors of the Company. If such
meeting fails to resolve the matter(s), then Executive will meet with the Board
of Directors of the Company and attempt to resolve the matter(s). The decision
of the Board of Directors of the Company as to the matter(s) shall be final
and
binding on the parties and not subject to review or appeal by any other person.
(c) Disability.
If, as
a result of Executive's incapacity due to physical or mental illness, Executive
shall have been absent from Executive's duties hereunder on a full time basis
for either (i) ninety (90) days within any six-month period, or (ii) sixty
(60)
consecutive days, and within thirty (30) days after written notice of
termination is given shall not have returned to the performance of Executive's
duties hereunder on a full time basis, the Company may terminate Executive's
employment hereunder for "Disability". In that event, the Company shall pay
to
Executive, within thirty (30) days of the date of such termination, only the
Base Salary through such date of termination. During any period that Executive
fails to perform Executive's duties hereunder as a result of incapacity due
to
physical or mental illness (a "Dis-ability Period"), Executive shall continue
to
receive the compensation and benefits provided by Section 3 hereof until
Executive's employment hereunder is terminated; provided, however, that the
amount of compensation and benefits received by Executive during the Disability
Period shall be reduced by the aggregate amounts, if any, payable to Executive
under disability benefit plans and programs of the Company or under the Social
Security disability insurance program.
(d) Termination
By Company For Any Other Reason; Termination for Good Reason by Executive
In
the
event that Executive's employment hereunder is terminated by the Company during
the Agreement Term for any reason other than as provided in Sections 5(b) or
5(c) hereof (including, without limitation, termination by the Company as
provided in Section 1. that has the effect of preventing automatic renewal
at
the end of the Agreement Term) or is terminated for Good Reason by Executive,
then the Company shall pay to Executive (i) within thirty (30) days of the
date
of such termination, the Base Salary through such date of termination and (ii)
in lieu of any further compensation and benefits under the Agreement, severance
pay equal to the Base Salary plus the cost of premiums for health insurance
benefits that Executive would otherwise have been entitled to receive during
the
period of six months from the effective date of such termination (the “Severance
Period”), commencing with such date of termination at the times and in the
amounts such Base Salary and premiums would otherwise have become payable;
provided, however, that if termination of employment occurs as a result of
failure by the Company to renew the Agreement Term, the Severance Period shall
terminate on the earlier to occur of six months from the effective date of
termination or the date on which the Executive obtains comparable employment;
further provided, however, that in the event that Executive shall breach
Sections 4, 6, 7 or 9(m) hereof, in addition to any other remedies the Company
may have in the event Executive breaches this Agreement, the Company's
obligation pursuant to this Section 5(d) to continue such severance payments
shall cease and Executive's rights thereto shall terminate and shall be
forfeited. “Good
Reason” shall mean (i) the assignment to Executive of duties inconsistent with
his title, (ii) a reduction by the Company in the Base Salary as in effect
on
the date hereof or as it may be
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increased
from time to time, other than a reduction of not more than 15% for a period
of
no more than six months, provided the same is made in connection with a
Company-wide reduction program or (iii) the failure by the Company to continue
any compensation or benefit plan then promised to the Executive and that is
material to Executive’s total compensation. Notwithstanding the foregoing, “Good
Reason” shall not be deemed to exist unless (i) the Executive has, within 90
days of the initial occurrence of the condition giving rise to the claim of
termination for Good Reason, given notice of the condition to the Company and
(ii) if such notice has been timely given, within 30 days thereof the Company
has failed to remedy the condition.
(e)
No
Further Liability; Release.
Payment
made and performance by the Company in accordance with this Section 5 shall
operate to fully discharge and release the Company and its directors, officers,
employees, subsidiaries, affiliates, stockholders, successors, assigns, agents
and representatives from any further obligation or liability with respect to
Execu-tive's employment and termination of employment. Other than paying
Executive's Base Salary through the date of termination of Executive's
employment and making any severance payment pursuant to and in accordance with
this Section 5 (as applicable), the Company and its directors, officers,
employees, subsidiaries, affiliates, stock-holders, successors, assigns, agents
and repre-sentatives shall have no further obligation or liability to Executive
or any other person under this Agreement. The Company shall have the right
to
condition the payment of any severance or other amounts pursuant to Sections
5(c) or 5(d) hereof upon the delivery by Executive to the Company of a release
in form and substance satisfactory to the Company of any and all claims
Executive may have against the Company and its directors, officers, employees,
subsidiaries, affiliates, stockholders, successors, assigns, agents and
representatives arising out of or related to Executive's employment by the
Company and termination of such employment.
6. Confidential
Information.
(a) Existence
of Confidential Information.
The
Company owns and has developed and compiled, and will develop and compile,
certain proprietary technology, know-how and confidential information which
have
great value to its business (referred to in this Agreement, collectively, as
(“Confidential Information”). Confidential Information includes not only
information disclosed by the Company to Executive, but also information
developed or learned by Executive during the course or as a result of employment
with the Company, which information shall be the property of the Company. By
way
of example and without limitation, Confidential Information includes all
infor-mation that has or could have commercial value or other utility in the
business in which the Company is engaged or contemplates engaging, and all
information of which the unauthorized disclosure could be detrimental to the
interests of the Company, whether or not such information is specifically
labeled as Confidential Information. By way of example and without limitation,
Confidential Information includes any and all information developed, obtained,
licensed by or to or owned by the Company concerning trade secrets, techniques,
know-how (including research data, designs, plans, procedures, merchandising,
marketing, distribution and warehousing know-how, processes, and research
records), software, computer programs, and any other intellectual property
created, used or sold (through a license or otherwise) by the
Company,
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product
know-how and processes, innovations, discoveries, improvements, research,
develop-ment, test results, reports, specifications, data, formats, marketing
data and plans, business plans, strategies, forecasts, unpublished financial
information, orders, agreements and other forms of documents, price and cost
information, merchandising opportunities, expansion plans, budgets, projections,
customer, supplier, licensee, licensor and subcontractor identities,
charac-teristics, agreements and operating procedures, and salary, staffing
and
employment information.
(b) Protection
of Confidential Information.
Executive acknowledges and agrees that in the performance of duties hereunder
Executive develops and acquires, and the Company discloses to and entrusts
Executive with, Confidential Information which is the exclu-sive property of
the
Company and which Executive may possess or use only in the performance of duties
for the Company. Executive also acknowledges that Executive is aware that the
unau-thorized disclosure of Confidential Information, among other things, may
be
prejudicial to the Company's interests, an invasion of privacy and an improper
disclosure of trade secrets. Execu-tive shall not, directly of indirectly,
use,
make available, sell, disclose or otherwise communicate to any corporation,
partnership, individual or other third party, other than in the course of
Executive's assigned duties and for the benefit of the Company, any Confidential
Information, either during the Agreement Term or thereafter. In the event
Executive desires to publish the results of Executive's work for or experiences
with the Company through literature, interviews or speeches, Executive will
submit requests for such interviews or such literature or speeches to the Board
of Directors of the Company at least fourteen (14) days before any anticipated
dissemination of such information for a determination of whether such disclosure
is in the best interests of the Company, including whether such disclosure
may
impair trade secret status or constitute an invasion of privacy. Executive
agrees not to publish, disclose or otherwise dissem-inate such information
without the prior written approval of the Board of Directors of the
Company.
(c) Delivery
of Records, Etc.
In the
event Executive's employment with the Company ceases for any reason, Executive
will not remove from the Company's premises without its prior written consent
any records, notes, notebooks, files, drawings, documents, equipment, materials
and writings received from, created for or belonging to the Company, including
those which relate to or contain Confidential Information, or any copies
thereof. Upon request or when employment with the Company terminates, Executive
will immediately deliver the same, whether located on the Company’s premises or
otherwise, to the Company.
7. Invention
and Patents.
(a) Executive
will promptly and fully disclose to the Company any and all inventions,
discoveries, trade secrets and improvements, whether or not patentable or
whether or not they are made, conceived or reduced to practice during working
hours or using the Company's data or facilities, which Executive shall develop,
make, conceive or reduce to practice during Executive's employment by the
Company, either solely or jointly with others (collectively, "Developments").
All such Developments shall be the sole property of the Com-pany, and Executive
hereby assigns to the Company, without further compensation, all his right,
title and interest in and to such
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Developments
and any and all related patents, patent applica-tions, copyrights, copyright
applications, trademarks and trade names in the United States and
elsewhere.
(b) Executive
shall keep and maintain adequate and current written records of all Developments
(in the form of notes, sketches, drawings and as may be specified by the
Company), which records shall be available to and remain the sole property
of
the Company at all times.
(c) Executive
shall assist the Company in obtaining and enforcing patent, copyright and other
forms of legal protection for the Developments in any country. Upon request,
Executive shall sign all applications, assignments, instruments and papers
and
perform all acts necessary or desired by the Company and to enable the Company
its successors, assigns and nominees, to secure and enjoy the full exclusive
benefits and advantages thereof.
(d) Executive
understands that Executive’s obligations under this section will continue after
the termination of his employment with the Company and that Executive shall
perform such obligations without further compensation, except (i) for
reimbursement of expenses incurred at the request of the Company and (ii) that
after the termination of Executive’s employment with the Company and
notwithstanding anything in this Section 7 to the contrary, Executive shall
not
be required to provide assistance to the Company in accordance with this Section
7 or Section 9(m) for more than 50 hours during any twelve-month period. If
the
Company desires assistance beyond such 50-hour limitation, such assistance
shall
be subject to Executive’s consent, not to be unreasonably withheld, and the
Company will compensate Executive on a per diem basis at a per diem rate that
is
determined by dividing the Base Salary in effect when the Employment Term was
terminated by 250 days.
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8.
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Assignment
and Transfer
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(a) Company.
This
Agreement shall inure to the benefit of and be enforceable by, and may be
assigned by the Company to, any purchaser of all or substantially all of the
Company's business or assets, any successor to the Company or any assignee
thereof (whether direct or indirect, by purchase, merger, consolidation or
otherwise). The Company will require any such purchaser, successor or assignee
to expressly assume and agree to perform this Agree-ment in the same manner
and
to the same extent that the Company would be required to perform it if no such
purchase, succession or assignment had taken place.
(b) Executive.
Executive's rights and obligations under this Agreement shall not be
transferable by Executive by assignment or otherwise, and any purported
assignment, transfer or delegation thereof shall be void; provided, however,
that if Executive shall die, all amounts then payable to Executive hereunder
shall be paid in accordance with the terms of this Agreement to Executive's
devisee, legatee or other designee or, if there be no such designee, to
Executive's estate.
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9. Miscellaneous.
(a) Other
Obligations.
Executive represents and warrants that he is not a party to any other employment
agreement and that neither Executive's employment with the Company nor
Executive's performance of Executive's obligations hereunder will conflict
with
or violate or otherwise are inconsistent with any other agreements to which
Executive is or has been a party or with any other obligations, legal or
otherwise, which Executive may have.
(b) Nondisclosure;
Prior Employers.
Executive will not disclose to the Com-pany, or use, or induce the Company
to
use, any proprietary information, trade secrets or confidential business
information of others. Executive represents and warrants that Executive has
returned all property, proprietary information, trade secrets and confidential
business infor-mation belonging to all prior employers.
(c) Cooperation.
Following termination of employment with the Company, Executive shall cooperate
with the Company, as requested by the Company, to affect a transition of
Executive's responsibilities and to ensure that the Company is aware of all
matters being handled by Executive. As compensation for such cooperation, the
Company shall pay the Executive on a mutually agreed upon per diem basis. Such
compensation shall be over and above any payments due the Executive as defined
herein.
(d) Protection
of Reputation.
During
the Agreement Term and thereafter, Executive agrees that he will take no action
which is intended, or could reasonably be expected, to harm the Company or
its
reputation or which could reasonably be expected to lead to unwanted or
unfavorable publicity to the Company.
(e) Governing
Law; Arbitration.
(i) Governing
Law.
This
Agreement, including the validity, interpreta-tion, construction and performance
of this Agreement, shall be governed by and construed in accord-ance with the
laws of the State of New Jersey applicable to agreements made and to be
per-formed in such state without regard to such states conflicts of law
principles.
(ii) Arbitration.
Subject
to Section 9(k) hereof, any controversy or claim which arises out of or relating
to this Agreement, or the breach thereof shall be settled by arbitration in
accordance with the Rules of the American Arbitration Association then in
effect. The controversy or claim shall be submitted to three arbitrators, one
of
whom shall be chosen by the Employee, one of whom shall be chosen by the
Company, and one of whom shall be chosen by the two so selected. The party
desiring arbitration shall give written notice to the other party of its desire
to arbitrate the particular matter in question, naming the arbitrator selected
by it. If the other party shall fail within a period of 15 days after such
notice shall have been given to reply in writing naming the arbitrator chosen
as
above provided, or if the two arbitrators selected by the parties shall fail
within 15 days after their selection to agree upon the third arbitrator, then
either party may apply
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to
the
American Arbitration Association for the appointment of an arbitrator to fill
the place so remaining vacant. The decision of any two of the arbitrators shall
be final and binding upon the parties hereto. Judgment upon the award rendered
by the arbitrators may be entered in any court having jurisdiction thereof.
The
pro-ceedings shall be held in New York, New York. The arbitrators shall have
no
power to award punitive or exemplary damages or to ignore or vary the terms
of
this Agreement, and shall be bound to apply controlling law. Arbitration shall
be binding and the remedy for the settlement of the controversy or claims
(except as set forth in the preceding paragraph of this Section).
(f) Entire
Agreement.
This
Agreement (including the Exhibits hereto) con-tains the entire agreement and
understanding between the parties hereto in respect of the subject matter hereof
and supersedes, cancels and annuls any prior or contemporaneous written or
oral
agreements, understandings, commitments and practices between them respecting
the subject matter hereof, including all prior employment agreements, if any,
between the Company and Executive, which agreement(s) hereby are terminated
and
shall be of no further force or effect.
(g) Amendment.
This
Agreement may be amended only by a writing which makes express reference to
this
Agreement as the subject of such amendment and which is signed by Executive
and,
on behalf of the Company, by its duly authorized officer.
(h) Severability.
If any
term, provision, covenant or condition of this Agree-ment or part thereof,
or
the application thereof to any person, place or circumstance, shall be held
to
be invalid, unenforceable or void, the remainder of this Agreement and such
term, provision, covenant or condition shall remain in full force and effect,
and any such invalid, unenforceable or void term, provision, covenant or
condition shall be deemed, without further action on the part of the parties
hereto, modified, amended and limited to the extent necessary to render the
same
and the remainder of this Agreement valid, enforceable and lawful. In this
regard, Executive acknowledges that the provisions of Sections 4 and 6 are
reasonable and necessary for the protection of the Company.
(i) Construction.
The
headings and captions of this Agreement are provided for convenience only and
are intended to have no effect in construing or interpreting this Agree-ment.
The language in all parts of this Agreement shall be in all cases construed
according to its fair meaning and not strictly for or against the Company or
Executive. The use herein of the word "including," when following any general
provision, sentence, clause, statement, term or matter, shall be deemed to
mean
"including, without limitation". As used herein, "Company" shall mean the
Company and its subsidiaries and any purchaser of, successor to or assignee
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
of
all or substan-tially all of the Company's business or assets which is obligated
to perform this Agreement by operation of law. As used herein, the words "day"
or "days" shall mean a calendar day or days.
(j) Nonwaiver.
Neither
any course of dealing nor any failure or neglect of either party hereto in
any
instance to exercise any right, power or privilege hereunder or under law shall
constitute a waiver of any other right, power or privilege or of the same right,
power or
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privilege
in any other instance. All waivers by either party hereto must be contained
in a
written instrument signed by the party to be charged and, in the case of the
Company, by its duly authorized officer.
(k) Remedies
for Breach.
The
parties hereto agree that Executive is obligated under this Agreement to render
personal services during the Agreement Term of a special, unique, unusual,
extraordinary and intellectual character, thereby giving this Agreement peculiar
value, and, in the event of a breach or threatened breach of any covenant of
Executive herein, the injury or imminent injury to the value and the goodwill
of
the Company's business could not be reasonably or adequately compensated in
damages in an action at law. Accordingly, Executive expressly acknowledges
that
the Company shall be entitled to specific performance, injunctive relief or
any
other equitable remedy against Executive, without the posting of a bond, in
the
event of any breach or threatened breach of any provision of this Agreement
by
Executive (including Sections 4 and 6 hereof). Without limiting the generality
of the foregoing, if Execu-tive breaches Sections 4 or 6 hereof, such breach
will entitle the Company to enjoin Executive from disclosing any Confidential
Information to any Competing Business, to enjoin such Com-peting Business from
receiving Executive or using any such Confidential Information and/or to enjoin
Executive from rendering personal services to or in connection with such
Competing Business. The rights and remedies of the parties hereto are cumulative
and shall not be exclu-sive, and each such party shall be entitled to pursue
all
legal and equitable rights and remedies and to secure performance of the
obligations and duties of the other under this Agreement, and the enforcement
of
one or more of such rights and remedies by a party shall in no way preclude
such
party from pursuing, at the same time or subsequently, any and all other rights
and reme-dies available to it.
(l) Notices.
Any
notice, request, consent or approval required or permitted to be given under
this Agreement or pursuant to law shall be sufficient if in writing, and if
and
when sent by certified or registered mail, return receipt requested, with
postage prepaid, to Executive's
residence
(as reflected in the Company's records or as otherwise designated by Executive
on thirty (30) days' prior written notice to the Company) or to the Company's
princi-pal executive office, attention: Chairman of the Board (with copies
to
the General Counsel), as the case may be. All such notices, requests, consents
and approvals shall be effective upon being deposited in the United States
mail.
However, the time period in which a response thereto must be given shall
commence to run from the date of receipt on the return receipt of the notice,
request, consent or approval by the addressee thereof. Rejection or other
refusal to accept, or the inability to deliver because of changed address of
which no notice was given as provided herein, shall be deemed to be receipt
of
the notice, request, consent or approval sent.
(m) Assistance
in Proceedings, Etc.
Executive shall, without additional com-pensation, during and after expiration
of the Agreement Term, upon reasonable notice, furnish such information and
proper assistance to the Company as may reasonably be required by the Company
in
connection with any legal or quasi-legal proceeding, including any external
or
internal investigation, involving the Company or any of its affiliates or in
which any of them is, or may become, a party, unless
Executive is adverse to the Company in such proceeding or unless Executive
and
the Company are both defendants in such proceeding and assisting the
Company
-11-
may
impair Executive’s ability to defend himself in such proceeding. After the
Agreement Term Executive shall provide the same assistance under the same
conditions, except that Executive shall not be required to provide assistance
to
the Company in accordance with this Section or Section 7 for more than 50 hours
during any twelve-month period. If the Company desires assistance beyond such
50-hour limitation, such assistance shall be subject to Executive’s consent, not
to be unreasonably withheld, and the Company will compensate Executive on a
per
diem basis at a per diem rate that is determined by dividing the Base Salary
in
effect when the Employment Term was terminated by 250 days.
(n) Survival.
Cessation or termination of Executive's employment with the Company shall not
result in termination of this Agreement. The respective obligations of
Execu-tive and rights and benefits afforded to the Company as provided in this
Agreement shall survive cessation or termination of Executive's employment
hereunder. This Agreement shall not termi-nate upon, and shall remain in full
force and effect following, expiration of the Agreement Term and all rights
and
obligations of the parties hereto as and to the extent provided herein shall
survive such expiration.
(o) Section
409A. Notwithstanding
anything to the contrary in this Agreement, if the Company determines
(a) that on the date the Executive’s employment with the Company terminates
or at such other time that the Company determines to be relevant, the Executive
is a “specified employee” (as such term is defined under Section 409A of the
Internal Revenue Code )
of the
Company and (b) that any payments to be provided to the Executive pursuant
to this Agreement are or may become subject to the additional tax under Section
409A(a)(1)(B)
of the Code or any other taxes or penalties imposed under Section 409A
of
the Code (“Section 409A
Taxes”)
if provided at the time otherwise required under this Agreement, then such
payments shall be delayed until the date (the “ Deferred Payment Date”) that is
six months after the date of the Executive’s “separation from service” (as such
term is defined under Section 409A
of the
Code) with the Company, or such shorter period that, as determined by the
Company, is sufficient to avoid the imposition of Section 409A
Taxes;
it being understood that any payments so delayed shall become payable in the
aggregate on the Deferred Payment Date. It
is the
intent of the parties that the provisions of this Agreement comply with
Section 409A of the Code and related regulations and Department of the
Treasury pronouncements. Accordingly, notwithstanding any provision in this
Agreement to the contrary, this Agreement will be interpreted, applied and
to
the minimum extent necessary, unilaterally amended by the Company in its sole
discretion, without the consent of Executive, as the Company deems appropriate
for the Agreement to satisfy the requirements of Section 409A and to avoid
the imposition of Section 409A Taxes.
-12-
IN
WITNESS WHEREOF,
the
Company has caused this Agreement to be duly executed on its behalf by an
officer thereunto duly authorized and Executive has duly executed this
Agreement, all as of the date and year first written above.
By:
/s/
Xxxxxx X. Xxxxxx
Xxxxxx
X.
Xxxxxx
President
& CEO
EXECUTIVE
/s/
Xxxx
X. Sportsman
Xxxx
X.
Sportsman
