EMPLOYMENT AGREEMENT
EXHIBIT 10.2
THIS EMPLOYMENT AGREEMENT (“Agreement”), effective as of April 1, 2007 (the “Effective
Date”), is made between Xxxxxx Medical Technology, Inc., a Delaware corporation (the “Company”) and
Xxxx X. Xxxxxx (the “Employee”).
1. Employment. The Company hereby employs the Employee and the Employee hereby
accepts employment all upon the terms and conditions herein set forth.
2. Duties. Employee has been employed by the Company as Executive Vice President,
North American Sales and now desires to work less than full time. The Company desires to continue
the employment of Employee in a different, less time-consuming capacity while retaining the
expertise and services of the Employee to assure a smooth management transition and provide
continuity in the Company’s sales management and distributor relations as well as for the benefit
other special projects that may be assigned from time to time. Therefore, as of the Effective
Date, the Employee is engaged as the Special Assistant to the President of the Company and hereby
promises to perform and discharge well and faithfully the duties which may be assigned to him from
time to time by the President and Chief Executive Officer, his designee, or the Board of Directors
of the Company (the “Board”) in connection with the conduct of the Company’s business.
3. Extent of Services. The Employee shall devote at least thirty (30) hours per week
of his entire time, attention, and energies to the business of the Company. The methods utilized
by the Employee in accomplishing the work of Employee shall be subject to the control of the
President and Chief Executive Officer, his designee, or the Board of Directors, who shall also have
the right to determine the Employee’s hours and schedule for work. The Employee shall be
classified as an exempt, part time regular employee of the Company with a work schedule of not less
than thirty (30) hours per week. The Employee shall provide a monthly, written report to the
President summarizing the duties performed and the services provided to the Company during the
previous calendar month. These reports shall be reviewed and approved by the President and filed
as evidence of performance of the duties required herein.
4. Compensation Matters.
(a) Base Salary. For services rendered under this Agreement, the Company shall pay
the Employee an aggregate salary of $12,500 per month (the “Base Salary”), payable (after deduction
of applicable payroll taxes) in accordance with the customary payroll practices of the Company, as
may exist from time to time.
(b) Benefits and Bonus. During the Employee’s employment hereunder, in addition to
Base Salary, the Employee shall be eligible for and participate in such fringe benefits as shall be
generally provided to executives of the Company subject to whatever qualifications are required in
relation thereto, including medical insurance and retirement programs which may be adopted from
time to time during the term hereof by the Company. The Employee shall be responsible for making
any generally applicable employee contributions required under such fringe benefit programs. After
the end of the first calendar quarter of 2007, the Employee shall not be eligible to participate in
the Employee Incentive Plan or Management Incentive Plans established for calendar years beginning
January 1, 2007 and thereafter.
(c) Future Option Incentive Grants. During the term of this Agreement, the Employee
shall be eligible for participation in the Amended and Restated Xxxxxx Medical Group, Inc. 1999
Equity Incentive Plan (the “Stock Option Plan”), as may be amended from time to time, and any
other stock option plan administered by the Compensation Committee of the Board of Directors.
(d) [Reserved]
5. Sick Leave and Vacation. During the term of this Agreement, the Employee shall be
entitled to annual vacation as permitted by Company policy, to be taken at his discretion, in a
manner consistent with his obligations to the Company under this Agreement. The actual dates of
such vacation periods shall be agreed upon mutual discussions between the Company and Employee;
provided, however, that the Company shall have the ultimate decision with respect to the actual
vacation dates to be taken by Employee, which decision shall not be unreasonable. The Employee
shall also be entitled to sick leave consistent with Company policy.
6. Expenses. During the term of this Agreement, the Company shall reimburse the
Employee for all reasonable out-of-pocket expenses incurred by the Employee in connection with the
business of the Company and in performance of his duties under this Agreement upon the Employee’s
presentation to the Company of an itemized accounting of such expenses with reasonable supporting
data.
7. Term.
(a) The Employee employment under this Agreement shall commence on the Effective Date and
shall expire on December 31, 2007 (“Initial Term”). Notwithstanding the foregoing, the Company may
at its election, subject to paragraph 7(b) below, terminate the obligations of the Company as
follows:
(i) Upon 30 days’ notice if the Employee becomes physically or mentally incapacitated or is
injured so that he is unable to perform the services required of him hereunder and such inability
to perform continues for a period in excess of three (3) months and is continuing at the time of
such notice; or
(ii) For “Cause” upon notice of such termination to the Employee. For purposes of this
Agreement, the Company shall have “Cause” to terminate its obligations hereunder upon (A) the
determination by the President or Board that the Employee has ceased to perform his duties
hereunder (other than as a result of his incapacity due to physical or mental illness or injury),
which failure amounts to an intentional and extended neglect of his duties hereunder, (B) the
Employee’s death, (C) the determination of the President or Board that the Employee has engaged or
is about to engage in conduct materially injurious to the Company, (D) the Employee’s having been
convicted of a felony, or (E) the Employee’s participation in activities proscribed by the
provisions of paragraphs 9 or 10 hereof or material breach of any of the other covenants herein.
(b) (i) If this Agreement is terminated pursuant to paragraph 7(a)(i) above, the Employee
shall receive salary continuation pay from the date of such termination until December 31, 2007 at
the rate of 100% of the Base Salary, reduced by applicable payroll taxes and further reduced by the
amount received by the Employee during such period under any Company-maintained disability
insurance policy or plan or under Social Security or similar laws. Such salary continuation
payments shall be paid periodically to the Employee as provided in paragraph 4(a) for the payment
of the Base Salary.
(ii) If this Agreement is terminated pursuant 7(a)(ii) above, the Employee shall receive no
salary continuation pay or severance pay.
(c) (i) At the conclusion of the Initial Term, the employment under this Agreement may be
extended for additional terms of six (6) month periods by mutual, written agreement of the parties
(“Subsequent Terms”). The Base Salary for Subsequent Terms shall be determined by mutual, written
agreement of the parties.
(ii) Subsequent Terms may be terminated by either party upon 30 days’ written notice of such
termination.
(iii) If this Agreement is terminated pursuant to paragraph 7(c)(ii) above, the Employee shall
receive no salary continuation pay or severance pay.
(iv) Subsequent Terms may be terminated for “Cause,” as defined in paragraph 7(a)(ii) above,
immediately upon notice of such termination to the Employee whereupon the Employee shall receive no
salary continuation pay or severance pay.
(d) Notwithstanding any other provision herein, either party may terminate this agreement upon
30 days’ notice of such termination to the other party whereupon the Employee shall receive no
salary continuation pay or severance pay.
8. Representations. The Employee hereby represents to the Company that (a) he is
legally entitled to enter into this Agreement and to perform the services contemplated herein, and
(b) he has the full right, power and authority, subject to no rights of third parties, to grant to
the Company the rights contemplated by paragraph 10 hereof.
9. Disclosure of Information. The Employee recognizes and acknowledges that the
Company’s and its predecessors’ trade secrets, know-how and proprietary processes as they may exist
from time to time are valuable, special and unique assets of the Company’s businesses, access to
and knowledge of which are essential to the performance of the Employee’s duties hereunder. The
Employee will not, during or after the term of his employment by any of the Company, in whole or
in part, disclose such secrets, know-how or processes to any person, firm, corporation, association
or other entity for any reason or purpose whatsoever, nor shall the Employee make use of any such
property for his own purposes or for the benefit of any person, firm, corporation or other entity
(except the Company) under any circumstances during or after the term of his employment, provided
that after the term of his employment these restrictions shall not apply to such secrets, know-how
and processes which are then in the public domain (provided further that the Employee was not
responsible, directly or indirectly, for such secrets, know-how or processes entering the public
domain without the Company’s consent).
10. Inventions. The Employee hereby sells, transfers and assigns to the Company or to
any person, or entity designated by the Company all of the entire right, title and interest of the
Employee in and to all inventions, ideas, disclosures and improvements, whether patented or
unpatented, and copyrightable material, made or conceived by the Employee, solely or jointly,
during the term hereof which relate to methods, apparatus, designs, products, processes or devices,
sold, leased, used or under consideration or development by the Company or any of its
predecessors, or which otherwise relate to or pertain to the business, functions or operations of
the Company or any of its predecessors or which arise from the efforts of the Employee during the
course of his employment for the Company or any of its predecessors. The Employee shall
communicate promptly and disclose to the Company, in such form as the Company requests, all
information, details and data pertaining to the aforementioned inventions, ideas, disclosures and
improvements; and the Employee shall execute and deliver to the Company such formal transfers and
assignments and such other papers and documents as may be necessary or required of the Employee to
permit the Company or any person or entity designated by the Company to file and prosecute the
patent applications and, as to copyrightable material, to obtain copyright thereof. Any invention
relating to the business of the Company and disclosed by the Employee within one year following the
termination of this Agreement shall be deemed to fall within the provisions of this paragraph
unless proved to have been first conceived and made following such termination.
11. Covenants Not To Compete or Interfere. During the term of this Agreement
(including any Subsequent Terms), and for a period ending twelve (12) months from and after the
termination of the Employee’s employment hereunder, the Employee shall not (whether as an officer,
director, owner, employee, partner or other direct or indirect participant) engage in any in
Competitive Business. “Competitive Business” shall mean the manufacturing, supplying, producing,
selling, distributing or
providing for sale of any orthopaedic product, device or instrument manufactured or sold by
the Company or its subsidiaries or in clinical development sponsored by the Company or its
subsidiaries, in each case, as of the date of termination of the Employee’s employment. For such
period, the Employee shall also not interfere with, disrupt or attempt to disrupt the relationship,
contractual or otherwise, between the Company or its subsidiaries and any customer, supplier,
lessor, lessee or employee of the Company or its subsidiaries. It is the intent of the parties
that the agreement set forth in this paragraph 11 apply in all parts of North America.
Employee agrees that a monetary remedy for a breach of the agreement set forth in this
paragraph 11 will be inadequate and impracticable and further agrees that such a breach would cause
the Company irreparable harm, and that the Company shall be entitled to temporary and permanent
injunctive relief without the necessity of proving actual damages. In the event of such a breach,
Employee agrees that the Company shall be entitled to such injunctive relief, including temporary
restraining orders, preliminary injunctions and permanent injunctions as a court of competent
jurisdiction shall determine.
It is the desire and intent of the parties that the provisions of this paragraph 11 shall be
enforced to the fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular portion of this
paragraph 11 shall be adjudicated to be invalid or unenforceable, this paragraph 11 shall be deemed
curtailed, whether as to time or location, to the minimum extent required for its validity under
the applicable law and shall be binding and enforceable with respect to the Employee as so
curtailed, such curtailment to apply only with respect to the operation of this paragraph in the
particular jurisdiction in which such adjudication is made. If a court in any jurisdiction, in
adjudicating the validity of this paragraph 11, imposes any additional terms or restrictions which
respect to the agreement set forth in this paragraph 11, this paragraph 11 shall be deemed amended
to incorporate such additional terms or restrictions.
12. Injunctive Relief. If there is a breach or threatened breach of the provisions of
paragraphs 9, 10 or 11 of this Agreement, the Company shall be entitled to an injunction
restraining the Employee from such breach. Nothing herein shall be construed as prohibiting the
Company from pursuing any other remedies for such breach or threatened breach.
13. [Reserved].
14. [Reserved].
15. Insurance. The Company may, at its election and for its benefit, insure the
Employee against accidental loss or death, and the Employee shall submit to such physical
examination and supply such information as may be required in connection therewith.
16. Notices. Any notice required or permitted to be given under this Agreement shall
be sufficient if in writing and if sent by certified, registered, or express mail to 000 Xxxxx
Xxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000, in the case of the Employee, or to Xxxxxx
Medical Technology, Inc., 0000 Xxxxxxx Xxxx, Xxxxxxxxx, XX 00000, Attn: General Counsel, in the
case of the Company, or to such other address as either party shall notify the other.
17. Waiver of Breach. A waiver by the Company or Employee of a breach of any
provision of this Agreement by the other party shall not operate or be construed as a waiver of any
subsequent breach of the other party.
18. Governing Law. This Agreement shall be governed by and construed by and enforced
in accordance with the laws of the state of Tennessee, without reference to the conflicts of laws
principles therein.
19. Assignment. This Agreement may be assigned, without the consent of the Employee,
by the Company to any person, partnership, corporation, or other entity which has purchased
substantially all the assets of such Company, provided such assignee assumes all the liabilities of
such Company hereunder.
20. Entire Agreement. This instrument contains the entire agreement of the parties
with respect to the subject matter referred to herein and supersedes any and all agreements,
letters of intent or understandings between the Employee and the Company, its subsidiaries, or any
of the Company’s principal shareholders with respect thereto. These Agreements may be changed only
by an agreement or agreements in writing signed by a party against whom enforcement of any waiver,
change, modification, extension, or discharge is sought.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
AGREED AND ACCEPTED:
| XXXXXX MEDICAL TECHNOLOGY, INC. | EMPLOYEE | |||||||
By:
|
/s/ Xxxxx X. Xxxx
|
/s/ Xxxx X. Xxxxxx
|
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Title:
|
General Counsel and Secretary | |||||||
