GENERAL RELEASE AND SEPARATION AGREEMENT
Exhibit
10.72
This
General Release and Separation Agreement (hereafter “Agreement”) is
entered into between Xxxxxxx X. Xxxx (the “Executive”), and
ArthroCare Corporation (the “Company”)
(collectively referred to as the “Parties”), effective
eight days after the Executive’s signature (the “Effective Date”),
unless he revokes his acceptance as provided in Paragraph 7(b),
below.
WHEREAS,
the Executive was the Senior Vice President and Chief Financial Officer of the
Company;
WHEREAS,
the Executive tendered his resignation, and the Company accepted such
resignation effective as of December 18, 2008;
WHEREAS,
the Company and the Executive now wish to document the termination of their
employment relationship and fully and finally to resolve all matters between
them;
THEREFORE,
in exchange for the good and valuable consideration set forth herein, the
adequacy of which is specifically acknowledged, the Executive and the Company
hereby agree as follows:
1. Resignation of
Employment. The Executive hereby confirms his resignation of
his employment and all positions that the Executive held as an officer of the
Company and all subsidiaries of the Company, and the Company confirms its
acceptance of such resignations, effective December 18, 2008 (the “Resignation
Date”).
2. Payment of Accrued Wages and
Expenses. The Executive shall be paid an amount equal to all
accrued wages through the Resignation Date, including accrued, unused vacation
or paid time off, less applicable withholding. The Company shall pay the
Executive these amounts within seven (7) days of the Effective Date of this
Agreement. The Executive shall be promptly reimbursed for all
reasonable and necessary expenses incurred and submitted for reimbursement on or
before December 31, 2008 in accordance with the Company’s expense reimbursement
policies.
3. Bonus for the Calendar Year
Ending December 31, 2008. The Executive agrees that he shall
not be eligible for a bonus for the calendar year ending December 31,
2008.
4. Separation
Payment. Within seven (7) days of the Effective Date, the
Company shall pay the Executive $128,900 (one hundred twenty-eight thousand nine
hundred dollars) (the “Separation Payment”), less applicable
taxes. The Separation Payment shall be dated and considered paid
effective December 31, 2008.
5. Equity
Awards. All equity awards granted to the Executive shall be
treated in accordance with the terms of the applicable Plan(s), Agreement(s) and
Notice(s) of Grant.
6. [Intentionally
Omitted.]
7. General Release of
Claims.
(a) The
Executive, on behalf of himself and his executors, heirs, administrators,
representatives and assigns, hereby agrees to release and forever discharge the
Company and all predecessors, successors and their respective parent
corporations, affiliates, related, and/or subsidiary entities, and all of their
past and present investors, directors, shareholders, officers, general or
limited partners, employees, attorneys, agents and representatives, and employee
benefit plans in which the Executive is or has been a participant by virtue of
his employment with the Company (the “Company Parties”), from any and all
claims, debts, demands, accounts, judgments, rights, causes of action, equitable
relief, damages, costs, charges, complaints, obligations, promises, agreements,
controversies, suits, expenses, compensation, responsibility and liability of
every kind and character whatsoever (including attorneys’ fees and costs),
whether in law or equity, known or unknown, asserted or unasserted, suspected or
unsuspected (collectively, “Claims”), which the Executive has or may have had
against such entities based on any events or circumstances arising or occurring
on or prior to the date hereof or on or prior to the Resignation Date, arising
directly or indirectly out of, relating to, or in any other way involving in any
manner whatsoever the Executive's employment by the Company or the separation
thereof, and any and all claims arising under federal, state, or local laws
relating to employment, including without limitation claims of wrongful
discharge, breach of express or implied contract, fraud, misrepresentation,
defamation, or liability in tort, claims of any kind that may be brought in any
court or administrative agency, any claims arising under Title VII of the Civil
Rights Act; the Civil Rights Act of 1866; the Xxxxxxxx-Xxxxx Act; the Age
Discrimination in Employment Act; the Equal Pay Act; the Fair Labor Standards
Act; the Employee Retirement Income Security Act; the Americans with
Disabilities Act; the Family Medical Leave Act; and/or any other local, state or
federal law governing discrimination in employment and/or the payment of wages
and benefits; and claims arising under the SVP Continuity Agreement entered into
between the Company and the Executive.
Notwithstanding the generality of the
foregoing, the Executive does not release the following claims and
rights:
(i) Claims
for unemployment compensation or any state disability insurance benefits
pursuant to the terms of applicable state law;
(ii) Claims
to continued participation in certain of the Company's group benefit plans
pursuant to the terms and conditions of the federal law known as
COBRA;
(iii) The
Executive’s right to file a charge with any state or federal agency; provided,
however, that the Executive does release his right to secure any damages for the
conduct alleged in such charge; and
(iv) The
Executive’s rights under this Agreement, his rights as a shareholder, and his
right to indemnification from the Company pursuant to the Company’s
Certificate of Incorporation, its Bylaws, the General Corporation Law of the
State of Delaware, any applicable statute or common law, any applicable
insurance policy, and the terms of the Indemnification Agreement attached as
Exhibit A
hereto.
(b) In
accordance with the Older Workers Benefit Protection Act of 1990, the Executive
acknowledges that he is aware of the following:
(i)
This Section 7, and this Agreement are written in a manner calculated to be
understood by the Executive.
(ii)
The waiver and release of claims under the Age Discrimination in Employment Act
contained in this Agreement does not cover rights or claims that may arise after
the date on which the Executive signs this Agreement.
(iii) This
Agreement provides for consideration in addition to anything of value to which
the Executive is already entitled.
(iv) The
Executive has been advised to consult an attorney before signing this
Agreement.
(v)
The Executive has been granted forty-five (45) days after he is presented
with this Agreement to decide whether or not to sign this
Agreement. If the Executive executes this Agreement prior to the
expiration of such period, he does so voluntarily and after having had the
opportunity to consult with an attorney, and hereby waives the remainder of the
consideration period.
(vi) The
Executive has the right to revoke this Agreement within seven (7) days of
signing it. In the event this Agreement is revoked, it will be null
and void in its entirety, and the Executive will not receive the benefits of
this Agreement, except for the payment of accrued wages, unused vacation, and
unreimbursed business expenses as of the Resignation Date.
If the
Executive wishes to revoke this agreement, he must deliver written notice
stating that intent to revoke, in accordance with the notice provisions of
Section 14, on or before 5:00 p.m. on the seventh (7th) day
after the date on which the Executive signs this Agreement.
8. Nondisparagement. The
Executive agrees that neither he nor anyone acting by, through or in concert
with him shall disparage or otherwise communicate negative statements or
opinions about the Company, its Board members, officers, employees or
business. The Company agrees that neither its Board members nor its
officers shall disparage or otherwise communicate negative statements or
opinions about the Executive. Notwithstanding the foregoing, nothing
herein shall be construed to prohibit any person from making truthful statements
to any governmental agency or providing truthful testimony under oath in any
legal or administrative proceeding.
9. Cooperation. The
Executive agrees to give reasonable cooperation, at the Company’s request and
with the assistance of counsel of his choosing, in any pending or future
litigation or arbitration brought against the Company and in any investigation
the Company may conduct. The Company shall reimburse the Executive
for all expenses (excluding attorney’s fees) reasonably incurred by him in
compliance with this Section 9. Notwithstanding the foregoing, the
Company shall have no obligation to pay the Executive for time spent and
expenses incurred by the Executive in any pending or future litigation or
arbitration where the Executive is a co-defendant or party to the arbitration or
litigation, unless the Executive is entitled to indemnification from the Company
pursuant to the Company’s Certificate of Incorporation, its Bylaws, the General
Corporation Law of the State of Delaware, any applicable statute or common law,
any applicable insurance policy, and the terms of the Indemnification
Agreement.
10. Executive’s Representations
and Warranties. The Executive represents and warrants
that:
(a) He
has been paid all wages owed to him by the Company, including all accrued,
unused vacation or paid time off, through the Resignation Date;
(b) During
the course of the Executive’s employment, he did not sustain any injuries for
which he might be entitled to compensation pursuant to applicable workers
compensation law;
(c) The
Executive has not initiated any adversarial proceedings of any kind against the
Company or against any other person or entity released herein, nor will he do so
in the future, except as specifically allowed by this
Agreement.
11. Confidential Information;
Return of Company Property. The Executive hereby expressly
confirms his continuing obligations to the Company pursuant to the Employment,
Proprietary Information and Invention Assignment Agreement (the “Confidentiality
Agreement”) executed by the Executive on December 1, 2004.
The
Executive shall deliver to the Company within 10 days of the Resignation Date
all originals and copies of correspondence, drawings, manuals, letters, notes,
notebooks, reports, programs, plans, proposals, financial documents, or any
other documents concerning the Company’s customers, business plans, marketing
strategies, products, processes or business of any kind and/or which contain
proprietary information or trade secrets which are in the possession or control
of the Executive or his agents or representatives.
The
Executive shall return to the Company within 10 days of the Resignation Date all
equipment of the Company in his possession or control. However, the
Company agrees that the Executive shall be entitled to retain possession of the
cell phone he was using as of the Resignation Date.
12. In the Event of a Claimed
Breach. All controversies, claims and disputes arising out of
or relating to this Agreement, including without limitation any alleged
violation of its terms, shall be resolved final and binding arbitration before a
single neutral arbitrator in Austin, Texas in accordance with the Employment
Dispute Resolution Rules of the American Arbitration Association (“AAA”). The
arbitration shall be commenced by filing a demand for arbitration with the AAA
within 14 (fourteen) days after the filing party has given notice of such breach
to the other party. The arbitrator shall award the prevailing party
attorneys’ fees and expert fees, if any. Notwithstanding the
foregoing, it is acknowledged that it will be impossible to measure in money the
damages that would be suffered if the parties fail to comply with any of the
obligations imposed on them under Section 11(a) and (b) hereof, and that in the
event of any such failure, an aggrieved person will be irreparably damaged and
will not have an adequate remedy at law. Any such person shall,
therefore, be entitled to injunctive relief, including specific performance, to
enforce such obligations, and if any action shall be brought in equity to
enforce any of the provisions of Section 11(a) and (b) of this Agreement, none
of the parties hereto shall raise the defense that there is an adequate remedy
at law..
13. Choice of
Law. This Agreement shall in all respects be governed and
construed in accordance with the laws of the State of Texas, including all
matters of construction, validity and performance, without regard to conflicts
of law principles.
14. Notices. All
notices, demands or other communications regarding this Agreement shall be in
writing and shall be sufficiently given if either personally delivered or sent
by facsimile or overnight courier, addressed as follows:
|
(a)
|
If
to the Company:
|
ArthroCare Corporation
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxx Xxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: General
Counsel
Tel: 000-000-0000
Fax: 000-000-0000
|
(b)
|
If
to the Executive:
|
Xxxxxxx X. Xxxx
0000 Xxxxxx Xxxxx
Xxxxxx, XX 00000
15. Severability. Except
as otherwise specified below, should any portion of this Agreement be found void
or unenforceable for any reason by a court of competent jurisdiction, the
parties intend that such provision be limited or modified so as to make it
enforceable, and if such provision cannot be modified to be enforceable, the
unenforceable portion shall be deemed severed from the remaining portions of
this Agreement, which shall otherwise remain in full force and
effect. If any portion of this Agreement is so found to be void or
unenforceable for any reason in regard to any one or more persons, entities, or
subject matters, such portion shall remain in full force and effect with respect
to all other persons, entities, and subject matters. This paragraph
shall not operate, however, to sever the Executive's obligation to provide the
binding release to all entities intended to be released hereunder.
16. Understanding and
Authority. The parties understand and agree that all terms of
this Agreement are contractual and are not a mere recital, and represent and
warrant that they are competent to covenant and agree as herein
provided.
17. Integration
Clause. This Agreement contains the entire agreement of the
parties with regard to the separation of the Executive's employment, and
supersedes any prior agreements as to that matter. This Agreement may not be
changed or modified, in whole or in part, except by an instrument in writing
signed by the Executive and an authorized officer of the Company.
18. Execution in
Counterparts. This Agreement may be executed in counterparts
with the same force and effectiveness as though executed in a single
document.
The
parties have carefully read this Agreement in its entirety; fully understand and
agree to its terms and provisions; and intend and agree that it is final and
binding on all parties.
IN
WITNESS WHEREOF, and intending to be legally bound, the parties have executed
the foregoing on the dates shown below.
|
XXXXXXX
X. XXXX
|
ARTHROCARE
CORPORATION
|
||||
|
/s/ Xxxxxxx X. Xxxx
|
By:
|
/s/ Xxxxxxx X. Xxxxx
|
|||
|
Title:
|
President
and CEO
|
||||
|
Date:
|
December
31, 2008
|
Date:
|
December
31, 2008
|
||
EXHIBIT
A
INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement (the “Agreement”) is made
as of December 17, 2008 by and between ArthroCare Corporation, a Delaware
corporation (the “Company”), and
Xxxxxxx X. Xxxx (the “Indemnitee”), with
effect as of the first date of the Indemnitee’s employment with the
Company.
RECITALS
The
Company and Indemnitee recognize the increasing difficulty in obtaining
liability insurance for directors, officers and key employees, the significant
increases in the cost of such insurance and the general reductions in the
coverage of such insurance. The Company and Indemnitee further
recognize the substantial increase in corporate litigation in general,
subjecting directors, officers and key employees to expensive litigation risks
at the same time as the availability and coverage of liability insurance has
been severely limited. Indemnitee does not regard the current
protection available as adequate under the present circumstances, and Indemnitee
and agents of the Company may not be willing to continue to serve as agents of
the Company without additional protection. The Company desires to
attract and retain the services of highly qualified individuals, such as
Indemnitee, and to indemnify its directors, officers and key employees so as to
provide them with the maximum protection permitted by law.
AGREEMENT
In
consideration of the mutual promises made in this Agreement, and for other good
and valuable consideration, receipt of which is hereby acknowledged, the Company
and Indemnitee hereby agree as follows:
1. Indemnification.
(a) Third Party
Proceedings. The Company shall indemnify Indemnitee if
Indemnitee is or was a party, or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while an
officer or director or by reason of the fact that Indemnitee is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees), judgments, fines and amounts paid
in settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) actually and reasonably incurred by
Indemnitee in connection with such action, suit or proceeding if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe Indemnitee’s
conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company, or, with
respect to any criminal action or proceeding, that Indemnitee had reasonable
cause to believe that Indemnitee’s conduct was unlawful.
(b) Proceedings By or in the
Right of the Company. The Company shall indemnify Indemnitee
if Indemnitee was or is a party or is threatened to be made a party to any
threatened, pending or completed action or proceeding by or in the right of the
Company or any subsidiary of the Company to procure a judgment in its favor by
reason of the fact that Indemnitee is or was a director, officer, employee or
agent of the Company, or any subsidiary of the Company, by reason of any action
or inaction on the part of Indemnitee while an officer or director or by reason
of the fact that Indemnitee is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys’ fees)
and, to the fullest extent permitted by law, amounts paid in settlement (if such
settlement is approved in advance by the Company, which approval shall not be
unreasonably withheld), in each case to the extent actually and reasonably
incurred by Indemnitee in connection with the defense or settlement of such
action or suit if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and its stockholders, except that no indemnification shall be made in respect of
any claim, issue or matter as to which Indemnitee shall have been finally
adjudicated by court order or judgment to be liable to the Company in the
performance of Indemnitee’s duty to the Company and its stockholders unless and
only to the extent that the court in which such action or proceeding is or was
pending shall determine upon application that, in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.
(c) Mandatory Payment of
Expenses. To the extent that Indemnitee has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in Section 1(a) or Section 1(b) or the defense of any claim, issue or
matter therein, Indemnitee shall be indemnified against expenses (including
attorneys’ fees) actually and reasonably incurred by Indemnitee in connection
therewith.
2. No Employment
Rights. Nothing contained in this Agreement is intended to
create in Indemnitee any right to continued employment.
3. Expenses; Indemnification
Procedure.
(a) Advancement of
Expenses. The Company shall advance all expenses incurred by
Indemnitee in connection with the investigation, defense, settlement or appeal
of any civil or criminal action, suit or proceeding referred to in
Section l(a) or Section 1(b) hereof (including amounts actually paid
in settlement of any such action, suit or
proceeding). Indemnitee hereby undertakes to repay such amounts
advanced only if, and to the extent that, it shall ultimately be determined that
Indemnitee is not entitled to be indemnified by the Company as authorized
hereby. Any advances to be made under this Agreement shall be paid by
the Company to Indemnitee within twenty (20) days following delivery of a
written request therefor by Indemnitee to the Company.
(b) Notice/Cooperation by
Indemnitee. Indemnitee shall, as a condition precedent to his
or her right to be indemnified under this Agreement, give the Company notice in
writing as soon as practicable of any claim made against Indemnitee for which
indemnification will or could be sought under this Agreement. Notice
to the Company shall be directed to the Chief Executive Officer of the Company
and shall be given in accordance with the provisions of Section 12(d)
below. In addition, Indemnitee shall give the Company such
information and cooperation as it may reasonably require and as shall be within
Indemnitee’s power.
(c) Procedure. Any
indemnification and advances provided for in Section 1 and this
Section 3 shall be made no later than forty-five (45) days after receipt of
the written request of Indemnitee. If a claim under this Agreement,
under any statute, or under any provision of the Company’s Certificate of
Incorporation or Bylaws providing for indemnification, is not paid in full by
the Company within forty-five (45) days after a written request for payment
thereof has first been received by the Company, Indemnitee may, but need not, at
any time thereafter bring an action against the Company to recover the unpaid
amount of the claim and, subject to Section 11 of this Agreement,
Indemnitee shall also be entitled to be paid for the expenses (including
attorneys’ fees) of bringing such action. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in connection with any action, suit or proceeding in advance of its
final disposition) that Indemnitee has not met the standards of conduct which
make it permissible under applicable law for the Company to indemnify Indemnitee
for the amount claimed, but the burden of proving such defense shall be on the
Company and Indemnitee shall be entitled to receive interim payments of expenses
pursuant to Section 3(a) unless and until such defense may be finally
adjudicated by court order or judgment from which no further right of appeal
exists. It is the parties’ intention that if the Company contests
Indemnitee’s right to indemnification, the question of Indemnitee’s right to
indemnification shall be for the court to decide, and neither the failure of the
Company (including its Board of Directors, any committee or subgroup of the
Board of Directors, independent legal counsel, or its stockholders) to have made
a determination that indemnification of Indemnitee is proper in the
circumstances because Indemnitee has met the applicable standard of conduct
required by applicable law, nor an actual determination by the Company
(including its Board of Directors, any committee or subgroup of the Board of
Directors, independent legal counsel, or its stockholders) that Indemnitee has
not met such applicable standard of conduct, shall create a presumption that
Indemnitee has or has not met the applicable standard of conduct.
(d) Notice to
Insurers. If, at the time of the receipt of a notice of a
claim pursuant to Section 3(b) hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such proceeding
in accordance with the terms of such policies.
(e) Selection of
Counsel. In the event the Company shall be obligated under
Section 3(a) hereof to pay the expenses of any proceeding against Indemnitee,
the Company, if appropriate, shall be entitled to assume the defense of such
proceeding, with counsel approved by Indemnitee, upon the delivery to Indemnitee
of written notice of its election so to do. After delivery of such
notice, approval of such counsel by Indemnitee and the retention of such counsel
by the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees of counsel subsequently incurred by Indemnitee with
respect to the same proceeding, provided that (i) Indemnitee shall
have the right to employ counsel in any such proceeding at Indemnitee’s expense;
and (ii) if (A) the employment of counsel by Indemnitee has been
previously authorized by the Company, (B) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee in the conduct of any such defense or (C) the Company shall not,
in fact, have employed counsel to assume the defense of such proceeding, then
the fees and expenses of Indemnitee’s counsel shall be at the expense of the
Company.
4. Additional Indemnification
Rights; Nonexclusivity.
(a) Scope. Notwithstanding
any other provision of this Agreement, the Company hereby agrees to indemnify
the Indemnitee to the fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other provisions of this
Agreement, the Company’s Certificate of Incorporation, the Company’s Bylaws or
by statute. In the event of any change, after the date of this
Agreement, in any applicable law, statute, or rule which expands the right of a
Delaware corporation to indemnify a member of its board of directors or an
officer, such changes shall be deemed to be within the purview of Indemnitee’s
rights and the Company’s obligations under this Agreement. In the
event of any change in any applicable law, statute or rule which narrows the
right of a Delaware corporation to indemnify a member of its board of directors
or an officer, such changes, to the extent not otherwise required by such law,
statute or rule to be applied to this Agreement shall have no effect on this
Agreement or the parties’ rights and obligations hereunder.
(b) Nonexclusivity. The
indemnification provided by this Agreement shall not be deemed exclusive of any
rights to which Indemnitee may be entitled under the Company’s Certificate of
Incorporation, its Bylaws, any agreement, any vote of stockholders or
disinterested members of the Company’s Board of Directors, the General
Corporation Law of the State of Delaware, or otherwise, both as to action in
Indemnitee’s official capacity and as to action in another capacity while
holding such office. The indemnification provided under this
Agreement shall continue as to Indemnitee for any action taken or not taken
while serving in an indemnified capacity even though he or she may have ceased
to serve in any such capacity at the time of any action, suit or other covered
proceeding.
5. Partial
Indemnification. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of the
expenses, judgments, fines or penalties actually or reasonably incurred in the
investigation, defense, appeal or settlement of any civil or criminal action,
suit or proceeding, but not, however, for the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion of such expenses,
judgments, fines or penalties to which Indemnitee is
entitled.
6. Mutual
Acknowledgment. Both the Company and Indemnitee acknowledge
that in certain instances, Federal law or public policy may override applicable
state law and prohibit the Company from indemnifying its directors and officers
under this Agreement or otherwise. For example, the Company and
Indemnitee acknowledge that the Securities and Exchange Commission (the “SEC”) has taken the
position that indemnification is not permissible for liabilities arising under
certain federal securities laws, and federal legislation prohibits
indemnification for certain ERISA violations. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the SEC to submit the question of indemnification to a court in
certain circumstances for a determination of the Company’s right under public
policy to indemnify Indemnitee.
7. Officer and Director
Liability Insurance. The Company shall, from time to time,
make the good faith determination whether or not it is practicable for the
Company to obtain and maintain a policy or policies of insurance with reputable
insurance companies providing the officers and directors of the Company with
coverage for losses from wrongful acts, or to ensure the Company’s performance
of its indemnification obligations under this Agreement. Among other
considerations, the Company will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage. In all
policies of director and officer liability insurance, Indemnitee shall be named
as an insured in such a manner as to provide Indemnitee the same rights and
benefits as are accorded to the most favorably insured of the Company’s
directors, if Indemnitee is a director; or of the Company’s officers, if
Indemnitee is not a director of the Company but is an officer; or of the
Company’s key employees, if Indemnitee is not an officer or director but is a
key employee. Notwithstanding the foregoing, the Company shall have
no obligation to obtain or maintain such insurance if the Company determines in
good faith that such insurance is not reasonably available, if the premium costs
for such insurance are disproportionate to the amount of coverage provided, if
the coverage provided by such insurance is limited by exclusions so as to
provide an insufficient benefit, or if Indemnitee is covered by similar
insurance maintained by a parent or subsidiary of the Company.
8. Severability. Nothing
in this Agreement is intended to require or shall be construed as requiring the
Company to do or fail to do any act in violation of applicable
law. The Company’s inability, pursuant to court order, to perform its
obligations under this Agreement shall not constitute a breach of this
Agreement. The provisions of this Agreement shall be severable as
provided in this Section 8. If this Agreement or any portion
hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Company shall nevertheless indemnify Indemnitee to the
full extent permitted by any applicable portion of this Agreement that shall not
have been invalidated, and the balance of this Agreement not so invalidated
shall be enforceable in accordance with its terms.
9. Exceptions. Any
other provision herein to the contrary notwithstanding, the Company shall not be
obligated pursuant to the terms of this Agreement:
(a) Claims Initiated by
Indemnitee. To indemnify or advance expenses to Indemnitee
with respect to proceedings or claims initiated or brought voluntarily by
Indemnitee and not by way of defense, except with respect to proceedings brought
to establish or enforce a right to indemnification under this Agreement or any
other statute or law or otherwise as required under Section 145 of the
Delaware General Corporation Law, but such indemnification or advancement of
expenses may be provided by the Company in specific cases if the Board of
Directors finds it to be appropriate;
(b) Lack of Good
Faith. To indemnify Indemnitee for any expenses incurred by
Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or
interpret this Agreement, if a court of competent jurisdiction determines that
each of the material assertions made by Indemnitee in such proceeding was not
made in good faith or was frivolous;
(c) Insured
Claims. To indemnify Indemnitee for expenses or liabilities of
any type whatsoever (including, but not limited to, judgments, fines, ERISA
excise taxes or penalties, and amounts paid in settlement) to the extent such
expenses or liabilities have been paid directly to Indemnitee by an insurance
carrier under a policy of officers’ and directors’ liability insurance
maintained by the Company; or
(d) Claims under Section
16(b). To indemnify Indemnitee for expenses or the payment of
profits arising from the purchase and sale by Indemnitee of securities in
violation of Section 16(b) of the Securities Exchange Act of 1934, as
amended, or any similar successor statute.
10. Construction of Certain
Phrases.
(a) For
purposes of this Agreement, references to the “Company” shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
if Indemnitee is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, Indemnitee shall stand in
the same position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.
(b) For
purposes of this Agreement, references to “other enterprises”
shall include employee benefit plans; references to “fines” shall include
any excise taxes assessed on Indemnitee with respect to an employee benefit
plan; and references to “serving at the request of
the Company” shall include any service as a director, officer, employee
or agent of the Company which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit plan,
its participants, or beneficiaries; and if Indemnitee acted in good faith and in
a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner “not opposed to the best
interests of the Company” as referred to in this Agreement.
11. Attorneys’
Fees. In the event that any action is instituted by Indemnitee
under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys’ fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that each of the material assertions made by Indemnitee as a basis for such
action were not made in good faith or were frivolous. In the event of
an action instituted by or in the name of the Company under this Agreement or to
enforce or interpret any of the terms of this Agreement, Indemnitee shall be
entitled to be paid all court costs and expenses, including attorneys’ fees,
incurred by Indemnitee in defense of such action (including with respect to
Indemnitee’s counterclaims and cross-claims made in such action), unless as a
part of such action the court determines that each of Indemnitee’s material
defenses to such action were made in bad faith or were frivolous.
12. Miscellaneous.
(a) Governing
Law. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of Delaware,
without giving effect to principles of conflict of law.
(b) Entire Agreement;
Enforcement of Rights. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter herein
and merges all prior discussions between them. No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
shall be effective unless in writing signed by the parties to this
Agreement. The failure by either party to enforce any rights under
this Agreement shall not be construed as a waiver of any rights of such
party.
(c) Construction. This
Agreement is the result of negotiations between and has been reviewed by each of
the parties hereto and their respective counsel, if any; accordingly,
this Agreement shall be deemed to be the product of all of the parties hereto,
and no ambiguity shall be construed in favor of or against any one of the
parties hereto.
(d) Notices. Any
notice, demand or request required or permitted to be given under this Agreement
shall be in writing and shall be deemed sufficient when delivered personally or
sent by telegram or forty-eight (48) hours after being deposited in the U.S.
mail, as certified or registered mail, with postage prepaid, and addressed to
the party to be notified at such party’s address as set forth below or as
subsequently modified by written notice.
(e) Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one
instrument.
(f) Successors and
Assigns. This Agreement shall be binding upon the Company and
its successors and assigns, and inure to the benefit of Indemnitee and
Indemnitee’s heirs, legal representatives and assigns.
(g) Subrogation. In
the event of payment under this Agreement, the Company shall be subrogated to
the extent of such payment to all of the rights of recovery of Indemnitee, who
shall execute all documents required and shall do all acts that may be necessary
to secure such rights and to enable the Company to effectively bring suit to
enforce such rights.
The
parties hereto have executed this Agreement as of the day and year set forth on
the first page of this Agreement.
|
ARTHROCARE
CORPORATION
|
||
|
By:
|
/s/ Xxxxxxx X.
Xxxxx
|
|
|
Name:
|
Xxxxxxx
X. Xxxxx
|
|
|
Title:
|
President
and CEO
|
|
|
Address:
|
0000
Xxxxxx Xxxxxxxxx
|
|
|
Xxxxxxxx
Xxx, Xxxxx 000
|
||
|
Xxxxxx,
Xxxxx 00000
|
||
|
Date:
|
December
31, 2008
|
|
AGREED TO AND
ACCEPTED:
INDEMNITEE
/s/ Xxxxxxx
Xxxx
Xxxxxxx
Xxxx
|
Address:
|
0000
Xxxxxx Xxxxx
Xxxxxx,
Xxxxx 00000
|
Date:
December 31, 2008
