Exhibit 10.32
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Confidentiality and Severance Agreement
This Confidentiality and Severance Agreement (the "Agreement") is made as of
this 31st day of May, 2000, by and between Xxxxxx X. Xxxxxxxxxxx, an individual
residing at 0000 Xxxxx Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx 00000 (the
"Employee"), and Surgical Laser Technologies, Inc., a Delaware corporation (the
"Company").
WHEREAS, the Company desires to engage the services of the Employee as Vice
President, Business Planning and also as President of its wholly-owned
subsidiary, Surgical Innovations and Services, Inc., a Delaware corporation
("SIS"), and the Employee desires to assume such roles as Vice President and
President, respectively, pursuant to the terms of a letter dated April 20, 2000
from the President of the Company to the Employee (the "Offer Letter"); and
WHEREAS, the Offer Letter provides that the terms of confidentiality,
severance and related matters will be set forth in a collateral written
agreement;
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Confidentiality.
(a) From its inception, the Company has provided to and confided in the
Employee, and may provide to him and confide in him in the future, business
methods and systems, techniques, methods of operation, discoveries and
inventions developed at great expense by the Company ("Trade Secrets") and
which the Employee recognizes to be unique assets of the Company's
business. The Employee shall not, during or at any time after his
employment by the Company or SIS, directly or indirectly, in any manner
utilize or disclose to any person, firm, corporation, association or other
entity, except to directors, consultants or employees of the Company or SIS
in the course of his duties and when required by law: (i) any such Trade
Secrets, (ii) any sales prospects, customer lists, products, research or
data of any kind, or (iii) any information relating to strategic plans,
sales, costs, profits or the financial condition of the Company or SIS or
any of its customers or prospective customers, which are not generally
known to the public or recognized as standard practice in the industries in
which the Company shall be engaged. The Employee further covenants and
agrees that he will promptly deliver to the Company all tangible evidence
of the knowledge and information described in (i), (ii) and (iii), above,
prior to or at the termination of the Employee's employment by the Company
or SIS.
(b) The Employee shall not, either during his employment or at any time
after the termination thereof, make any public statement (including a
private statement reasonably likely to be repeated publicly) reflecting
adversely on the Company or SIS or their business prospects, except for
such statements which during the Employee's employment he may be required
to make in the ordinary course of his service as an employee of the Company
or SIS.
2. Severance.
(a) In the event that the Company should terminate the Employee's
employment from the Company and SIS without cause (as defined in Section
2(c) hereof), then for a period of one (1) year from such termination date
(the "Restricted Period"), the Company shall continue to pay the Employee
his then base salary under the Company's normal payroll procedures and
shall further continue to provide at no cost to the Employee all fringe
benefits which he had enjoyed immediately prior to termination, with the
following exceptions: vacation pay and entitlement to bonus shall cease to
accrue to the Employee during the Restricted Period and the Employee shall
cease to receive from the Company a car allowance, whether paid directly to
him or by way of making lease payments on his behalf. In the event that the
Company should terminate the Employee for cause or in the event that the
Employee voluntarily terminates his employment from the Company or SIS,
then the Company shall have no obligation hereunder to continue during the
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Restricted Period to pay Employee his base salary or to continue any fringe
benefits, except as may otherwise be prescribed by law.
(b) At the end of the Restricted Period, the Employee will be given the
option to take over the payments and ownership of any of any disability and
life insurance policies which the Company may have been providing for the
Employee's benefit, provided that such an option exists under the terms of
the applicable policy.
(c) For purposes of Section 2(a) hereof, "cause" shall include any of the
following: (i) habitual intoxication or being under the influence of
alcohol or illegal substances while performing services for the Company;
(ii) indictment by a grand jury for commission of a felony unless such
indictment is dismissed within 60 days of is issuance; (iii) theft,
misappropriation, embezzlement of Company or SIS assets or other fraud or
dishonesty resulting or intended to result directly or indirectly in
personal enrichment at the expense of the Company or SIS; (iv) regularly
failing or refusing to follow the policies or directives reasonably
established by the Company or SIS; (v) willfully and persistently failing
to the attend to the Employee's duties; or (vi) committing acts amounting
to gross negligence or willful misconduct to the detriment of the Company
or its affiliates.
3. Non-competition.
(a) Subject to the geographic limitation of Section 3(b), and irrespective
of whether the Employee's termination of employment from the Company and
SIS was voluntary or involuntary, the Employee shall not, during the period
of his employment and during the Restricted Period engage in, or in any way
be concerned with or negotiate for, or acquire or maintain any ownership
interest in, any business or activity which is the same as or competitive
with that which was conducted by the Company or SIS or which has been
engaged in or developed by the Company at any time during the term of
employment for specific implementation in the immediate future by the
Company, irrespective of whether any such activity is conducted directly or
indirectly by the Employee, and irrespective of whether any such activity
was conducted on the Employee's own behalf or on behalf of any other
person, firm, corporation, association or other entity, whether as an
employee or otherwise; provided that the foregoing shall not prohibit the
ownership of less than 1% of the outstanding capital stock of a company
whose capital stock is listed for trading on a national securities exchange
or quoted on the Nasdaq Stock Market.
(b) The Employee acknowledges that the Company is engaged in business
throughout the United States and in many foreign countries and that the
Company intends to continue expanding the geographic scope of its
activities, and especially those of SIS. Accordingly, and in view of the
nature of his positions and responsibilities, the Employee agrees that the
provisions of Section 3(a) shall be applicable to each State and each
foreign country, possession or territory in which the Company or SIS may be
engaged in business at the time of the termination of his employment.
(c) The Employee agrees that during the period of his employment and during
the Restricted Period he will not, directly or indirectly, for himself or
on behalf of any third party, at any time in any manner: (i) request or
cause any of the Company's or SIS's customers to cancel or terminate any
existing or continuing relationship with the Company or SIS; (ii) solicit,
entice, persuade, induce, request or otherwise cause any employee, officer
or agent of the Company or SIS to refrain from rendering services to the
Company or SIS or to terminate his or her relationship, contractual or
otherwise, with the Company or SIS; (iii) induce or attempt to influence
any supplier to cease or refrain from doing business or to decline to do
business with the Company or SIS; (iv) divert or attempt to divert any
supplier from the Company or SIS; or (v) induce or attempt to influence any
supplier to decline to do business with any businesses of the Company or
SIS as such businesses are constituted immediately prior to the termination
of his employment.
(d) The Employee agrees that during the period of his employment and during
the Restricted period, he will not, directly or indirectly, for himself or
on behalf of any third party, solicit for business, accept any business
from or otherwise do or contract to do business with, any person or entity
who, at the time of, or any time during the twelve (12) months preceding,
such termination, was an active customer or was actively
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solicited by the Company or SIS according to the books and records of the
Company or SIS and within the actual or constructive knowledge of the
Employee, provided, however, that nothing herein shall prohibit the
Employee during the Restricted Period from transacting business he solicits
which is not competitive with services or products offered, furnished or
sold by the Company or SIS to such person or entity. During the period of
his employment, the Employee shall not engage in any activity or investment
if such activity or investment substantially interferes with his duties as
an employee of the Company or SIS.
4. Discoveries.
The Employee shall, without additional compensation, promptly disclose in
writing to the President of the Company all ideas, formulae, programs,
systems, improvements, devices, processes, business concepts, discoveries
and inventions (hereinafter referred to singly as a "Discovery" and
collectively as "Discoveries"), whether or not suitable for patent or
copyright, which the Employee, while employed by the Company or SIS,
conceives, makes, develops, acquires or reduces to practice, whether alone
or with others and whether during or after usual working hours, and which
are related in any respect to the Company's business or interests, or those
of SIS, or which are used or usable by the Company or SIS, whether such
Discovery is a machine, apparatus, process, article or other object. The
Employee transfers and assigns to the Company all right, title and interest
in and to each of such Discoveries, including any and all domestic and
foreign patent rights or copyrights therein and any renewals thereof. On
request of the Company, the Employee shall (without additional
compensation) from time to time during his employment or after the
termination thereof, execute such further instruments (including without
limitation copyright registrations, applications for letters patent and
assignments of either) and do all such other acts and things as may be
deemed necessary or desirable by the Company to protect and/or enforce its
rights in respect of such Discoveries. All expenses of filing or
prosecuting or defending any copyright or any patent application shall be
borne by the Company, but the Employee shall cooperate in filing,
prosecuting or defending any such application.
5. Notice.
Any notice required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been given when sent by certified
mail, postage prepaid, addressed as follows:
If to the Company:
Surgical Laser Technologies, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxxxxx, XX 00000
Attn: the President
If to the Employee, at his personal residence as set forth above.
Any party may change the persons and addresses to which notice or other
communications are to be sent by giving written notice of such change to
the other party in the manner provided for giving notice.
6. Unenforceability, Invalidity.
If any term or provision of this Agreement is held to be invalid or
unenforceable for any reason, such invalidity or unenforceability shall not
affect any other term or provision hereof, and this Agreement shall
continue in full force and effect as if such invalid or unenforceable term
or provision (to the extent of the invalidity or unenforceability) had not
been contained herein.
7. Waivers, Changes.
No waiver by either party of any condition or of the breach by the other of
any term or covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances shall be deemed or
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construed as a further or continuing waiver of any such condition or breach
or a waiver of any other condition or of the breach of any other term or
covenant set forth in the Agreement. Moreover, the failure of either party
to exercise any rights hereunder shall not bar the later exercise thereof.
8. Governing Law.
This Agreement is entered into and shall be construed in accordance with
the laws of the Commonwealth of Pennsylvania.
9. Equitable Remedies.
The Employee acknowledges that his compliance with the covenants in
Sections 1, 3 and 4 of this Agreement is necessary to protect the good will
and other proprietary interests of the Company and SIS and that, in the
event of any violation by the Employee of the provisions of Sections 1, 3
or 4, the Company will sustain serious, irreparable and substantial harm to
its business or to the business of SIS, the extent of which will be
difficult to determine and impossible to remedy by an action at law for
money damages. Accordingly, the Employee agrees that in the event of such
violation or threatened violation by the Employee, the Company shall be
entitled to an injunction before trial from any court of competent
jurisdiction as a matter of course and upon the posting of not more than a
nominal bond, in addition to all such other legal and equitable remedies as
may be available to the Company. The Employee further agrees that, in the
event any of the provisions of Sections 1, 3 or 4 of this Agreement are
determined by a court of competent jurisdiction to be contrary to any
applicable statute, law or rule, or for any reason to be unenforceable as
written, such court may modify any of such provisions so as to permit
enforcement thereof as thus modified.
10. Arbitration.
Except as provided in Section 9, any controversy or claim arising out of or
relating to this Agreement, or the breach hereof, shall be settled by
arbitration in Philadelphia, Pennsylvania, in accordance with the laws of
the Commonwealth of Pennsylvania by three (3) arbitrators, one of whom
shall be appointed by the Company, one by the Employee and the third of
whom shall be appointed by the first two arbitrators. If either party fails
to select an arbitrator within 30 days after written notice of demand for
arbitration from the other, the other party may have such arbitrator
appointed by the American Arbitration Association. If the first two
arbitrators cannot agree on the appointment of a third arbitrator within 30
days after their selection, then the third arbitrator shall be appointed by
the American Arbitration Association. The arbitration shall be conducted in
accordance with the rules of the American Arbitration Association. Judgment
upon the award rendered by the arbitrators may be entered in any court
having jurisdiction hereof. In the event that it shall be necessary or
desirable for the Company and/or the Employee to retain legal counsel
and/or incur other costs and expenses in connection with the enforcement of
any or all of either party's rights under this Agreement, each party shall
bear its own costs and expenses in connection with the enforcement of its
rights (including any arbitration award in court), regardless of the final
outcome.
11. Successors.
The Agreement shall inure to the benefit of and be binding on the parties
and their respective successors in interest. The Employee shall not pledge,
hypothecate, anticipate or in any way create a lien upon any amounts
provided under this Agreement. This Agreement and the benefits payable
hereunder shall not be assignable by either party without the prior written
consent of the other; provided, however, that nothing in this Section 11
shall preclude the Employee from designating a beneficiary to receive any
benefit payable hereunder upon his death or preclude the executors,
administrators or other legal representatives of the Employee or his estate
from assigning any rights hereunder to which they become entitled, to the
person or persons entitled thereto.
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12. Entire Agreement.
(a) This Agreement constitutes the full and complete understanding and
agreement of the Employee and the Company respecting the subject matter
hereof, and supersedes all prior understandings and agreements, oral or
written, express or implied. This Agreement may not be modified or amended
orally, but only by an agreement in writing, signed by the party against
whom enforcement of any waiver, change, modification, extension or
discharge is sought. It is understood and agreed that this Agreement does
not constitute an employment agreement, but that the Employee's employment
by the Company and SIS is terminable at will by either party.
(b) The section headings of this Agreement are for convenience of reference
only and are not to be considered in the interpretation of the terms and
conditions of this Agreement.
(c) This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date fist
written:
Witness:
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxxxxxx
--------------------- -----------------------------------
Xxxxxx X. Xxxxxxxxxxx
Attest: Surgical Laser Technologies, Inc.
/s/ Xxxxx Xxxxxxxx, Sec'y By: /s/ Xxxxxxx X. Xxxxxxx
------------------------- -----------------------------------
Xxxxxxx X. Xxxxxxx, President & CEO
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