EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT is made and entered into this 7th day of
October, 1999, between BEI MEDICAL SYSTEMS, INC., a Delaware corporation
(hereinafter referred to as "BEI") and XXXXXXX X. XXXXXX (hereinafter referred
to as "Xxxxxx").
RECITALS
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X. Xxxxxx has been employed by BEI as President and Chief
Executive Officer under the terms and conditions of a letter agreement between
BEI and Xxxxxx dated January 24, 1999 ("the Letter Agreement.") A copy of the
Letter Agreement is attached to and is incorporated herein. The Letter Agreement
and this Employment Agreement collectively shall be referred to as " the
Agreement."
B. Contemporaneously with the execution of this Agreement, BEI
is selling substantially all of its assets to CooperSurgical Acquisition Corp.
("CooperSurgical.") As an essential element of that transaction, CooperSurgical
has insisted that Xxxxxx sign a Non-Competition Agreement. In addition, after
the closing of that transaction, BEI desires that Xxxxxx remain employed by BEI.
X. Xxxxxx has agreed to sign the Non-Competition Agreement with
CooperSurgical and to accept employment with BEI following the transaction under
the terms and conditions of this Agreement.
D. The Board of Directors of BEI considers it essential to the
best interests of BEI that Xxxxxx continue his employment with BEI. In order to
induce Xxxxxx to accept employment and/or continued employment with BEI, BEI
desires to enter into this Agreement with Xxxxxx.
NOW, THEREFORE, in consideration of the foregoing Recitals, which
form an integral part of this Agreement, and of the mutual covenants, terms and
conditions set forth in this Agreement, and for other good and valuable
consideration, BEI and Xxxxxx agree as follows:
1. EMPLOYMENT
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1.1. BEI employs Xxxxxx, and Xxxxxx accepts employment with
BEI, under the terms and conditions of this Agreement. BEI hereby re-affirms the
terms and conditions of the Letter Agreement as if set forth in full in this
Agreement. In the event
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of any conflict between the terms of the Employment Agreement and the Letter
Agreement, the terms of the Employment Agreement first shall control.
2. MODIFICATIONS TO THE LETTER AGREEMENT
2.1. BEI agrees to pay Xxxxxx the single lump sum of $80,000.00
upon the closing of the transaction between BEI and CooperSurgical described in
Recital B above, and the parties agree that this payment shall fully satisfy any
obligations BEI may have to Xxxxxx (a) under paragraph 2 of the Letter
Agreement, with respect to any such bonus for 1999 only, and (b) under paragraph
4 of the Letter Agreement, at any time.
2.2. In addition to the terms of paragraph 6 of the Letter
Agreement, BEI agrees to reimburse Xxxxxx for all travel, living and related
expenses arising from or reasonably related to (a) his normal commutation to the
offices of BEI, wherever located, and (b) any litigation, arbitration or other
legal proceedings involving Xxxxxx, BEI, CooperSurgical, or any other person or
entity, with respect to the business of BEI or Xxxxxx'x employment by BEI;
provided, however, that BEI shall not reimburse Xxxxxx for any such expenses if
BEI and Xxxxxx are opposed to one another in any such proceeding.
2.3. Paragraph 8 of the Letter Agreement is modified to read as
follows: The term of this Agreement shall be for a term equal to the time Xxxxxx
is subject to any restriction contained in the Non-Competition Agreement with
CooperSurgical, and thereafter until terminated. Therefore, Xxxxxx shall be
entitled to full salary and all other benefits under this Agreement for a
minimum period equal to the time he is subject to any restriction contained in
the Non-Competition Agreement with CooperSurgical, and for such additional
periods beyond the expiration of the last of the restrictions under that
Non-Competition Agreement as he may remain employed by BEI or any "Successor,"
defined for the purposes of this Agreement as any person or entity that succeeds
to all or substantially all of the business and/or assets and/or shares and/or
voting control of BEI, whether by purchase, merger, change of control, sale of
assets, consolidation or otherwise, and for such additional periods as provided
in this Agreement. In the event Xxxxxx leaves the employ of BEI before the end
of the term of the last to expire of the restrictions under the Non-Competition
Agreement, he shall receive from BEI and/or from any Successor, and BEI and/or
any Successor shall be obligated to pay Xxxxxx, at a minimum the same salary and
benefits as provided in this Agreement for the remaining term of the last to
expire of the restrictions under the Non-Competition Agreement. However, if
Xxxxxx leaves the employ of BEI before the end of the term of the last to expire
of the restrictions under the Non-Competition Agreement and finds other
employment, BEI's obligations to pay salary and bonus shall be reduced by the
salary and bonus Xxxxxx receives from such other employment.
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2.4. Paragraph 9 of the Letter Agreement is modified as
follows:
(a) The preamble of Paragraph 9 is amended to read: If
BEI is sold or undergoes any other change of control by January 31, 2001 (or
such other extended date to which the parties may later agree in writing), or if
Xxxxxx is terminated for any reason before BEI is sold or undergoes any other
change of control, or if BEI is not sold or does not undergo any other change of
control by January 31, 2001 (or such other extended date to which the parties
may later agree in writing), you shall have the option of departing BEI with the
following package:
(b) Paragraph 9(A) is amended to read as follows:
Payment of salary until the last to expire of the restrictions under the
Non-Competition Agreement.
(c) Paragraph 9(B) is amended by adding at the end
thereof the following: Payment shall be made within thirty (30) days after the
date of Xxxxxx'x invoice or other request for payment.
(d) Without limiting the provisions of paragraph 3.2
below, paragraph 9(E) is amended by adding at the end thereof the following:
Such coverage shall continue in effect until the last to expire of the
restrictions under the Non-Competition Agreement. If for any reason such
coverage is cancelled or unavailable to BEI or its Successor, then BEI and its
Successor shall reimburse Xxxxxx for the full costs and all expenses in
connection with Xxxxxx'x procurement of substitute coverage in equivalent
amounts.
(e) Paragraph 9(G) is amended to read as follows: BEI
may not terminate Xxxxxx'x employment without cause during the period in which
he is subject to any restriction in the Non-Competition Agreement
(f) Paragraph 9(H) is amended by adding at the end
thereof the following: ", or upon the termination of Xxxxxx'x employment."
2.5. It is acknowledged that the parties disagree as to whether
the sale of assets by BEI to CooperSurgical described in Recital B above
constitutes a sale of BEI pursuant to paragraph 9 of the Letter Agreement.
Notwithstanding this, so long as BEI remains in compliance with this Agreement
Xxxxxx agrees not to assert any rights he may have under paragraph 9 with
respect to such transaction.
2.6 Paragraph 10 of the Letter Agreement is deleted.
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3. ADDITIONAL TERMS AND CONDITIONS
3.1. Indemnification.
(a) Definitions. As used in this Agreement:
(1) The Term "Proceeding" shall include all
threatened, pending or completed actions, suits or proceedings, whether brought
by or against BEI or Xxxxxx and whether of a civil, criminal, administrative or
investigative nature with respect to the business of BEI or Xxxxxx'x employment
by BEI. Without limiting the foregoing, "Proceeding" also includes (i) actions,
suits or proceedings brought under and/or predicated upon the Securities Act of
1933, as amended, and/or the Securities Exchange Act of 1934, as amended, and/or
their respective state counterparts and/or any rule or regulation promulgated
thereunder, in which Xxxxxx may be or may have been involved as a party or
otherwise by reason of the fact that Xxxxxx is or was a director and/or officer
of BEI, by reason of any action taken by him or of any inaction on his part
while acting as such director and/or officer or by reason of the fact that he is
or was serving at the request of BEI as a director, officer, employee or agent
of or advisor to another company, partnership, joint venture, trust or other
enterprise, whether or not he is serving in such capacity at the time any
liability or expense is incurred for which indemnification or reimbursement can
be provided under this Agreement, and (ii) actions, claims, suits or proceedings
brought under or pursuant to the Non-Competition Agreement with CooperSurgical.
(2) The term "Expenses" includes, without
limitation, all monetary obligations, costs, and expenses arising from, related
to, or connected with any Proceedings, including, without limitation, all
liabilities, judgments, settlements, injunctions, bonds, fines, penalties,
investigations, judicial or administrative proceedings or appeals, attorneys'
fees and disbursements, and any costs of establishing a right to indemnification
under this Agreement.
(b) Indemnity. BEI shall indemnify Xxxxxx and shall
hold him harmless from and against all Proceedings and all Expenses and actually
and reasonably incurred by Xxxxxx in connection with the defense, settlement, or
other resolution of any Proceeding. PROVIDED, HOWEVER, that if Xxxxxx is not
employed by BEI at the time any Expense is incurred, and if Xxxxxx is employed
elsewhere and eligible for indemnification by his new employer for Expenses
arising from or related to Proceedings, then Xxxxxx agrees to resort first to
such new employer for reimbursement, defense, and indemnification, and BEI shall
be responsible for any portion of Expenses not reimbursed by Xxxxxx'x new
employer.
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(c) Advances of Expenses. While Xxxxxx is employed by
BEI, or if Xxxxxx is employed elsewhere and not eligible for indemnification for
Expenses arising from Proceedings, then all Expenses shall be paid by BEI in
advance and on or prior to the date when payment of such Expenses is due. If
Xxxxxx is not employed by BEI at the time Expenses are incurred and is eligible
for indemnification for Expenses arising from Proceedings, then BEI agrees to
pay its portion, if any, arising under paragraph 3.1(b) within thirty days after
receiving a request for payment from Xxxxxx.
(d) Indemnification Hereunder Not Exclusive. The
indemnification provided by this Agreement shall not be deemed exclusive of any
other rights to which Xxxxxx may be entitled under the Certificate of
Incorporation, the Bylaws, any agreement, any vote of stockholders or
disinterested directors, the General Corporation Law of the BEI's state of
incorporation, or otherwise.
3.2. BEI and its Successors agree that for the period of
Xxxxxx'x employment hereunder, and for and additional period of three (3) full
calendar years thereafter, BEI shall maintain in effect for Xxxxxx all Director
and Officers Liability insurance coverage in effect for other officers and
directors of BEI.
4. MISCELLANEOUS
4.1. Successors; Binding Agreement. BEI will require any
Successor, by agreement in form and substance satisfactory to Xxxxxx, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that BEI would be required to perform it if no such succession
had taken place. Failure of BEI to obtain such agreement before the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle Xxxxxx to compensation from BEI and its Successors in the same
amount and on the same terms as Xxxxxx would be entitled hereunder if his
employment terminated under this Agreement, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the date of termination. This Agreement shall inure to
the benefit of and shall be enforceable by Xxxxxx'x personal or legal
representatives, executors, administrators, Successors, heirs, distributes,
devisees and legatees. If Xxxxxx should die or become disabled while any amounts
would still be payable to him hereunder if he had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to Xxxxxx'x devisees, legatee or other designee or, if
there be no such designee, to his estate.
4.2. Notices. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given if delivered personally or sent by certified express
mail, return receipt requested, postage prepaid, to the parties to this
Agreement at the following addresses or
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to such other address as either party to this Agreement shall specify by notice
to the other:
If to BEI:
BEI Medical Systems, Inc,
Xxx Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, Chairman
With copies to:
Xxxxxxxxxxx Xxxxxxxx, Esq.
Xxxxxx Godward LLP
Xxx Xxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
-- and --
Xxxxxx X. Xxxxxxxxxx, Esq.
Xxxxxx XxXxxxxxxx & Xxxxxx
721 Route 202-206
XX Xxx 0000
Xxxxxxxxxx, XX 00000-0000
if to Xxxxxx:
Xxxxxxx X. Xxxxxx
0 Xxxxx Xxxx
Xxxxxxxx. XX 00000
With copies to:
Xxxxxxx X. Xxxxxx, Esq.
XxXxxxxx & English LLP
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
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4.3. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New Jersey
applicable to agreements made and to be performed within New Jersey, without
regard to the principles of conflict of laws.
4.4. Resolution of Conflict. Any and all disputes, claims and
controversies between the parties hereto concerning the validity,
interpretation, performance, termination or breach of this Agreement, which
cannot be resolved by the parties within sixty (60) days after such dispute,
claim or controversy arises shall, at the option of either party, be referred to
and finally settled by arbitration. Such arbitration shall be initiated by the
initiating party giving notice (the "Arbitration Notice") to the other party
(the "Respondent") that it intends to submit such dispute, claim or controversy
to arbitration. The arbitration shall be conducted by a single arbitrator
according to the rules of the American Arbitration Association as in effect on
the date the notice of submission to arbitration is given (the "Rules"). The
arbitrator shall be selected by mutual agreement between the parties, or, in the
absence of such agreement, pursuant to the Rules. Such arbitration shall be held
in New Jersey in accordance with the Rules except as otherwise expressly
provided herein. The arbitrator shall render a written decision stating reasons
therefor in reasonable detail within three (3) months after the appointment of
the arbitrator. Each party shall bear its own costs and attorneys fees. All
other costs and expenses of arbitration shall be apportioned between the
parties. The award of the arbitrator shall be made in United States currency and
shall be final and binding, and judgment thereon may be rendered by any court
having jurisdiction thereof, or application may be made to such court for the
judicial acceptance of the award and an order of enforcement as the case may be.
4.5. Entire Agreement. This Agreement and its attachments sets
forth the entire agreement and understanding of the parties relating to the
subject matter hereof, and from and after the date hereof supersedes all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof; provided, however, that the benefits conferred under this
Agreement are in addition to, and not in lieu of, any and all benefits conferred
under plans and arrangements currently in effect for Xxxxxx.
4.6. Assignment. This Agreement is binding upon and shall
insure to the benefit of the BEI and Xxxxxx and his Successors, heirs, estate
and personal representatives.
4.7. Modification; Waiver. This Agreement may be amended,
modified, superseded, canceled, renewed or extended, and the terms or covenants
hereof may be waived, only by a written instrument executed by both of the
parties hereto or in the case of a waiver, by the party waiving compliance.
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4.8. Authorization. BEI warrants and represents that the
execution of this Agreement has been duly authorized by the Board of Directors
of BEI, and is binding on BEI, and all permitted Successors and assigns.
4.9. Surviving Terms. The terms and conditions of this
Agreement which are required to survive in order to give effect to the letter
and intent of this Agreement shall survive termination of this Agreement or
Xxxxxx'x employment with BEI.
4.10. Choice of Counsel. At all times Xxxxxx shall be entitled
to the attorneys of his choice to represent his personal or other interests, and
wherever this Agreement, or any other agreement or corporate document entitles
Xxxxxx to the reimbursement of expenses, Xxxxxx also shall be entitled to
reimbursement of his personal attorneys' fee and costs.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.
BEI MEDICAL SYSTEMS, INC. XXXXXXX X. XXXXXX
By: /s/Xxxxxxx Xxxxxxx /s/Xxxxxxx X. Xxxxxx
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Xxxxxxx Xxxxxxx Xxxxxxx X. Xxxxxx
Chairman of the Board
Date: Date:
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April 19, 0000
Xxxxxxx X. Xxxxxx
President
BEI Medical Systems Company Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Dear Dick:
This letter agreement is to confirm that the Board of Directors of BEI Medical
Systems, Inc. (the "Company") has approved a modification to your letter
agreement dated January 24, 1999 ("Letter Agreement") and your employment
agreement dated October 7, 1999 (collectively with the Letter Agreement, the
"Agreement"). Copies of the Letter Agreement and the Employment Agreement are
attached.
The Agreement is modified as follows:
The current term of your employment with the Company expires December 8, 2002.
Thereafter, your employment with the Company shall continue on an at-will basis,
unless you and the Company agree to a new term of employment or until your
employment is terminated by either you or the Company, PROVIDED, HOWEVER, that
in the event you wish to terminate your employment with the Company, you have
agreed to give the Company 60 days written notice of the termination. You and
the Company will negotiate in good faith the terms of any continued employment
after December 8, 2002. Upon the termination of your employment with the
Company, regardless of when the termination occurs and whether it is voluntary
or involuntary, with or without cause, the Company will pay you, in addition to
all accrued salary and benefits earned through your last day of employment, your
compensation and medical benefit (subject to meeting all eligibility criteria
for such benefit), at the levels set forth in Paragraphs 1 and 6 of the Letter
Agreement and as in effect as of the date of your termination, net of applicable
withholding and deductions, for a period of twelve months following your last
day of employment, payable on the Company's regular payroll dates commencing
with the first payday after your last day of employment. You have agreed to work
with the Company, upon the Company's request, to the extent possible in the
transition to new executive management.
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This letter agreement has been authorized by the Board of Directors of BEI
Medical Systems, Inc and is binding on both parties as of the date of this
letter. In all other respects, the Agreement remains unchanged. In the event of
a conflict between the Agreement and this letter agreement, this letter
agreement shall control.
BEI MEDICAL SYSTEMS, INC.
By: /s/ Xxxxxxx Xxxxxxx
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Charles, Crocker, Chairman of the Board
ACKNOWLEDGE AND AGREED:
/s/ Xxxxxxx X. Xxxxxx 4/19/2002
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XXXXXXX X. XXXXXX
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