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EXHIBIT 10.36
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of August 21, 2000, by and between RADIANCE MEDICAL SYSTEMS, INC., a Delaware
corporation (the "Company"), and Xxxxxx Xxxxxx, an individual (the "Executive").
R E C I T A L
The Company desires to employ Executive in the capacity hereinafter
stated, and the Executive desires to enter into the employ of the Company in
that capacity pursuant to the terms and conditions set forth herein.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the Company and the Executive,
intending to be legally bound, hereby agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Executive as the
Vice President of Operations of the Company, reporting to the Chief Operating
Officer ("COO") of the Company, and the Executive accepts such employment and
agrees to devote substantially all his business time and efforts and skills on
such reasonable duties as shall be assigned to him by the Company commensurate
with such position.
2. TERM. The term of this Agreement will begin on August 21, 2000, (the
"Effective Date"), and shall continue thereafter for a one (1) year period and
shall be extended on each day for one (1) day so that the remaining term hereof
is always one (1) year unless either party elects to terminate this Agreement in
accordance with its provisions. Executive's employment is subject to earlier
termination as hereafter specified.
3. POSITION AND DUTIES.
3.1 SERVICE WITH THE COMPANY. During the term of this
Agreement, the Executive agrees to perform such reasonable duties and on such
basis as shall be assigned to him from time to time by the COO; such duties,
however, to be commensurate with the Executive's position as Vice President of
Operations of the Company. In particular, and without limitation, such duties
shall include, within the guidelines set by the COO, setting up long-range
Operations plans, guidance of day-to-day Manufacturing, Quality, Materials and
Manufacturing Engineering operations of the Company, preparing operating budgets
for presentation to the COO, and implementation of Operations plans as approved
by the COO.
3.2 NO CONFLICTING DUTIES. Except as provided in Exhibit A
hereto, during the term hereof, the Executive shall not serve as an officer,
director, employee, consultant or advisor to any other business; provided,
however, that the Executive may serve as a director of another corporation so
long as (i) such corporation does not compete, directly or indirectly, with the
Company or any of its Affiliates for such products as defined as "Competitive
Products" in Exhibit B attached to this Agreement, and (ii) such services do not
adversely affect Executive's ability to perform his duties under this Agreement,
unless such other service is approved by the COO, Chief Executive Officer or
Board of Directors of the Company. For purposes of this Agreement, the term
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"Affiliate" means any corporation, association or other business entity of which
more than 50% of the total voting power of shares of stock entitled to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled by the Company. Notwithstanding the foregoing, nothing contained
herein shall prevent Executive from making and expending any time of passive
personal investments and/or expending reasonable amounts of time for educational
and charitable activities. Except as provided in Exhibit A hereto, the Executive
confirms that he is under no contractual commitment inconsistent with his
obligations set forth in this Agreement.
4. COMPENSATION.
4.1 BASE SALARY. As compensation for all services to be
rendered by the Executive under this Agreement, the Company shall pay to the
Executive a base salary of $125,000 per year ("Base Salary"), which shall be
paid on a regular basis in accordance with the Company's normal payroll
procedures and policies. The amount of the Base Salary shall be reviewed by the
Compensation Committee of the Board of Directors, which may annually increase
Executive's Base Salary in amounts consistent with industry practices as
determined in its sole discretion. Executive's performance, the performance of
the Company and such other factors as the Compensation Committee of the Board of
Directors deem appropriate shall also be considered.
4.2 INCENTIVE COMPENSATION PLANS. In addition to the Base
Salary, Executive shall be eligible to participate in management incentive
compensation plans approved by the Company's Board of Directors, such
participation to be on terms similar to those afforded to other management
employees holding positions with the Company. In addition to the Base Salary,
the Executive shall be entitled to a bonus of up to twenty-five percent (25%) of
his Base Salary as incentive compensation. All amounts to which the Executive
may be entitled under any incentive compensation plans shall be subject to the
provisions, rules and regulations of any such plan which apply to other
management employees.
4.3 PARTICIPATION IN BENEFIT PLANS. During the term of this
Agreement, Executive shall be entitled to participate in all employee benefit
plans, profit-sharing, stock options, vacation and other perquisite plans and
programs for which key employees of the Company are generally eligible. The
Executive's participation in any such plan or program shall be subject to the
provisions, rules and regulations thereof that are generally available to all
participants thereon, provided, however, in no event shall Executive's benefits
be less than the benefits described in Exhibit C.
4.4 EXPENSES. In accordance with the Company's policies
established from time to time, the Company will pay or reimburse the Executive
for all reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, provided that Executive submits
appropriate vouchers and expense reports substantiating the amount thereof and
the business purposes for which such expenses were incurred.
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4.5 ACCELERATION OF OPTIONS. Notwithstanding any provisions of
the Company's option or stock incentive plan, or of the Executive's stock option
or restricted stock agreements, in the event of a "Corporate Transaction" or
"Change of Control," as defined below, during the period of the Executive's
employment hereunder; all of the Executive's stock options shall vest in full
and all rights of the company to repurchase restricted stock of the Executive
shall terminate. For purposes hereof, "Change in Control" shall mean a change in
ownership or control of the Company effected through either of the following
transactions:
(i) the acquisition, directly or indirectly, by any
person or related group of persons (other than the Company or a person
that directly or indirectly controls, is controlled by, or is under
common control with, the Company), of beneficial ownership (within the
meaning of Rule 13d-3 of the 0000 Xxx) of securities possessing more
than fifty percent (50%) of the total combined voting power of the
Company's outstanding securities pursuant to a tender or exchange offer
made directly to the Company's stockholders which the Board does not
recommend such stockholders to accept, or
(ii) a change in the composition of the Board over a
period of thirty-six (36) consecutive months or less such that a
majority of the Board members ceases, by reason of one or more
contested elections for Board membership, to be comprised of
individuals who either (A) have been Board members continuously since
the beginning of such period or (B) have been elected or nominated for
election as Board members during such period by at least a majority of
the Board members described in clause (A) who were still in office at
the time the Board approved such election or nomination.
"Corporate Transaction" shall mean either of the following
stockholder-approved transactions to which the Company is a party:
(i) a merger or consolidation in which securities
possessing more than fifty percent (50%) of the total combined voting
power of the Company's outstanding securities are transferred to a
person or persons different from the persons holding those securities
immediately prior to such transaction; or
(ii) the sale, transfer or other disposition of all
or substantially all of the Company's assets in complete liquidation or
dissolution of the Company.
5. TERMINATION.
5.1 TERMINATION BY THE COMPANY FOR CAUSE. Any of the following
acts or omissions shall constitute grounds for the Company to terminate the
Executive's employment pursuant to this Agreement for "cause":
(a) Willful misconduct by Executive causing material
harm to the Company but only if Executive shall not have discontinued such
misconduct within 30 days after receiving written notice from the Company
describing the misconduct and stating that the Company will consider the
continuation of such misconduct as cause for termination of this Agreement.
(b) Any material act or omission by the Executive
involving gross negligence in the performance of the Executive's duties to, or
material deviation from any of the policies or directives of, the Company, other
than a deviation taken in good faith by the Executive for the benefit of the
Company;
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(c) Any illegal act by the Executive which materially
and adversely affects the business of the Company or any felony committed by
Executive, as evidenced by conviction thereof, provided that the Company may
suspend the Executive with pay while any allegation of such illegal or felonious
act is investigated.
Termination by the Company for cause shall be
accomplished by written notice to the Executive and shall be preceded by a
written notice providing a reasonable opportunity for the Executive to correct
his conduct.
5.2 TERMINATION FOR DEATH OR DISABILITY. In addition to
termination for cause pursuant to Section 5.1 hereof, the Executive's employment
pursuant to this Agreement shall be immediately terminated without notice by the
Company (i) upon the death of the Executive or (ii) upon the Executive becoming
totally disabled. For purposes of this Agreement, the term "totally disabled"
means an inability of Executive, due to a physical or mental illness, injury or
impairment, to perform a substantial portion of his duties for a period of one
hundred eighty (180) or more consecutive days, as determined by a competent
physician selected by the Company's Board of Directors and reasonably agreed to
by the Executive, following such one hundred eighty (180) day period.
5.3 TERMINATION FOR GOOD REASON. Executive's employment
pursuant to this Agreement may be terminated by the Executive for "good reason"
if the Executive voluntarily terminates his employment as a result of any of the
following:
(a) Without the Executive's prior written consent, a
reduction in his then current Base Salary;
(b) Without Executive's prior written consent, a
relocation of the Executive's place of employment outside of Orange County,
California;
(c) Resignation as a result of unlawful
discrimination, as evidenced by a final court order;
(d) A reduction in duties and responsibilities which
results in the Executive no longer having duties customary for a Vice President
of Operations; or
(e) The Company materially breaches any provision of
this Agreement.
5.4 TERMINATION WITHOUT CAUSE. The Company may terminate this
Agreement, and the employment of the Executive under this Agreement, without
cause at any time upon at least thirty (30) days prior written notice to the
Executive.
5.5 PAYMENTS UPON REMOVAL OR TERMINATION. If during the term
of this Agreement, the Executive resigns for one of the reasons stated in
Section 5.3, or the Company terminates the Executive's service, except as
provided in Sections 5.1 or 5.2 hereof, the Executive shall be entitled to the
following compensation: (i) the portion of his then current Base Salary which
has accrued through his date of termination, (ii) any payments for unused
vacation and reimbursement expenses, which are due, accrued or payable at the
date of Executive's termination, (iii) severance payment in an amount (the
"Severance Amount") equal to Executive's then-current
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Base Salary, payable for the remainder of the Term; and (iv) to the extent not
already vested under Section 4.5 or otherwise all of Executive's options to
purchase shares of the Company's common stock and restricted stock shall
accelerate and automatically vest by one additional year, and such options shall
otherwise be exercisable in accordance with their terms. In addition, in such
event, Executive shall be entitled to (a) a prorated payment equal to the target
bonus amount for which Executive would be eligible for the year in which such
resignation or termination occurred, and (b) continuation of the insurance
benefits set forth in Exhibit C and, to the extent permissible, participation in
the Company's 401k plan, for the remainder of the Term.
All payments required to be made by the Company to the
Executive pursuant to this Section 5.5 shall be paid on a regular basis in
accordance with the Company's normal payroll procedures and policies, including,
without limitation, the Severance Amount which shall be paid at such times and
in such amounts consistent with the Company's normal payroll procedures and
policies over the number of months immediately succeeding the date of
termination that is equal to the number of months of Base Salary payable as the
Severance Amount. If the Company terminates the Executive's employment pursuant
to Sections 5.1 or 5.2, or if the Executive voluntarily resigns (except as
provided in Section 5.3), then the Executive shall be entitled to only the
compensation set forth in items (i) and (ii) of the first paragraph of this
Section 5.5.
To the extent that any or all of the payments and benefits
provided for in this Agreement constitute "parachute payments" within the
meaning of Section 280G of the Internal Revenue Code (the "Code") and, but for
this paragraph, would be subject to the excise tax imposed by Section 4999 of
the Code, then at the Executive's election:
(A) the Executive shall receive all such payments and
benefits the Executive is entitled to receive hereunder, and any
liability for taxes pursuant to the above shall be the liability solely
of the Executive; or
(B) the aggregate amount of such payments and
benefits shall be reduced such that the present value thereof (as
determined under the Code and applicable regulations) is equal to 2.99
times the Executive's "base amount" (as defined in the Code).
The determination of any reduction or increase of any payment
or benefits under this paragraph 5 pursuant to the foregoing provision shall be
made by a nationally recognized public accounting firm chosen by the Company in
good faith, and such determination shall be conclusive and binding on the
Company and the Executive.
6. ASSIGNMENT. This Agreement shall not be assignable, in whole or in
part, by either party without the written consent of the other party, except
that the Company may, without the consent of the Executive, assign its rights
and obligations under this Agreement to an Affiliate or to any corporation, firm
or other business entity (i) with or into which the Company may merge or
consolidate, or (ii) to which the Company may sell or transfer all or
substantially all of its assets. After any such assignment by the Company, the
Company shall be discharged from all further liability hereunder and such
assignee shall thereafter be deemed to be the Company for the purposes of all
provisions of this Agreement including this Section 6.
7. SUCCESSORS. This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amounts are still payable to
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him hereunder, all such amounts, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to the Executive's devisee,
legatee, or other designee or, if there be no such designee, to the Executive's
estate.
8. MISCELLANEOUS.
8.1 GOVERNING LAW. This Agreement is made under and shall be
governed by and construed in accordance with the laws of the State of
California.
8.2 PRIOR AGREEMENTS. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
all prior agreements and understanding with respect to such subject matter, and
the parties hereto have made no agreements, representations or warranties
relating to the subject matter of this Agreement which are not set forth herein.
8.3 ARBITRATION. In the event of any controversy, claim or
dispute between the parties hereto arising out of or relating to this Agreement,
the matter shall be determined by arbitration, which shall take place in Orange
County, California, under the rules of the American Arbitration Association. The
arbitrator shall be a retired Superior Court judge mutually agreeable to the
parties and if the parties cannot agree such person shall be chosen in
accordance with the rules of the American Arbitration Association. The
arbitrator shall be bound by applicable legal precedent in reaching his or her
decision. Any judgment upon such award may be entered in any court having
jurisdiction thereof. Any decision or award of such arbitrator shall be final
and binding upon the parties and shall not be appealable. The parties hereby
consent to the jurisdiction of such arbitrator and of any court having
jurisdiction to enter judgment upon and enforce any action taken by such
arbitrator. The fees payable to the American Arbitration Association and the
arbitrator shall be paid by the Company.
8.4 WITHHOLDING TAXES. The Company may withhold from any
salary and benefits payable under this Agreement all federal, state, city or
other taxes or amounts as shall be required to be withheld pursuant to any law
or governmental regulation or ruling.
8.5 AMENDMENTS. No amendment or modification of this Agreement
shall be deemed effective unless made in writing signed by the parties hereto.
8.6 NO WAIVER. No term or condition of this Agreement shall be
deemed to have been waived nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
8.7 SEVERABILITY. To the extent any provision of this
Agreement shall be invalid or unenforceable, it shall be considered deleted
herefrom and the remainder of such provision and of this Agreement shall be
unaffected and shall continue in full force and effect.
8.8 COUNTERPART EXECUTION. This Agreement may be executed by
facsimile and in counterparts, each of which shall be deemed an original and all
of which when taken together shall constitute but one and the same instrument.
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8.9 ATTORNEYS FEES. Should any legal action or arbitration be
required to resolve any dispute over the meaning or enforceability of this
Agreement or to enforce the terms of this Agreement, the prevailing party shall
be entitled to recover its or his reasonable attorneys fees and costs incurred
in such action, in addition to any other relief to which that party may be
entitled.
8.10 NOTICES. Any notice required or permitted to be given
hereunder shall be in writing and may be personally served or sent by United
States Mail, and shall be deemed to have been given when personally served or
two days after having been deposited in the United States Mail, registered mail,
return receipt requested, with first class postage prepaid and properly
addressed as follows:
If to Executive: Xxxxxx Xxxxxx
00000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
If to the Company: Radiance Medical Systems, Inc.
00000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Chief Executive Officer
8.11 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT.
Executive agrees to sign the Company's standard form of employee proprietary
information and inventions agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year set forth above.
"COMPANY"
RADIANCE MEDICAL SYSTEMS, INC.,
a Delaware corporation
By:
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Its:
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"EXECUTIVE"
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Xxxxxx Xxxxxx
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Exhibit A
Xxxxxx Xxxxxx Board of Director Memberships
None.
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Exhibit B
"Competitive Products"
1. PTCA Catheters
2. Conventional Coronary Stents - Without Drug Delivery
3. Conventional Coronary Stents - with Radiation
4. Coronary and Peripheral Vascular Radiation Catheters
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Exhibit C
Xxxxxx Xxxxxx Benefits
--Health Insurance
--Dental Insurance
--Long Term Disability Insurance
--Prescription Drug Insurance
--Group Life Insurance
--401K Program Participation
--Employee Stock Purchase Program Participation
--Paid Company Holidays
--Paid vacation per company policy
