SEPARATION AGREEMENT
This Agreement is made by and between EVEREST MEDICAL CORPORATION
("Employer") and R. XXXXX XXXXX ("Employee").
RECITALS
A. WHEREAS, Employee has been employed by Employer in the position of
Vice- President of Sales; and
B. WHEREAS, Employee has been granted incentive stock options pursuant
to Incentive Stock Option Agreements as follows:
(1) Agreement dated February 6, 1995 for 15,000 shares of
common stock, a true and correct copy of which is attached hereto as Exhibit A;
(2) Agreement dated July 19, 1994 for 25,000 shares of common
stock, a true and correct copy of which is attached hereto as Exhibit B;
(3) Agreement dated June 15, 1993 for 5,000 shares of common
stock, a true and correct copy of which is attached hereto as Exhibit C; and
(4) Agreement dated July 31, 1992 for 10,000 shares of common
stock, a true and correct copy of which is attached hereto as Exhibit D; and
C. WHEREAS, Employer and Employee have decided that it is mutually
beneficial for their employment relationship to terminate; and
D. WHEREAS, the parties are mindful of the costs and uncertainties of
litigation and wish to effect a full and final resolution of any and all
disputes between them;
NOW THEREFORE, the parties agree as follows.
AGREEMENTS
1. In exchange for and consideration of the mutual promises and
covenants contained herein, Employer will:
A. Continue to employ Employee in his current position with
his current responsibilities at his current level of compensation and
benefits through October 25, 1996; provided that Employee's last date
of work shall be October 15, 1996 and he shall use vacation for the
period October 16 through October 25, 1996;
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B. Pay to Employee, in accordance with Employer's normal
policies and procedures, commissions on all orders placed on or before
October 15, 1996 including those orders which are delivered after that
date;
C. Pay, on October 25, 1996, to Employee the total sum of
$10,800.00, less required withholding for taxes, as and for 240 hours
of accrued vacation pay;
D. Provide Employee with reasonable amounts of time away from
the work premises to pursue his search for employment to begin after
October 15, 1996;
E. Pay to Employee the total gross amount of $4,130.00, less
required withholding for taxes, per Employer's normal biweekly pay
period during the "Severance Period," pursuant to Employer's normal
payroll procedures; provided that any payment(s) that would otherwise
be due prior to the Effective Date of this Agreement, as defined in
Paragraph 11 hereof, shall become due and payable on the normal payroll
date next following that Effective Date.
F. Continue to pay the employer portion of monthly premiums
for Employee's group medical and life insurance policies as were in
effect on August 1, 1996, during the "Severance Period," provided that
Employee timely exercises his election to continue such insurance
coverages pursuant to those federal and state laws providing for
continuation of such insurance upon separation from employment;
Employer further agrees to provide to Employee in a timely manner the
necessary documents to allow Employee to make such election;
G. Provide outplacement services to Employee through an
outplacement counseling service to be named by Employer; and
H. Reimburse Employee's ordinary and reasonable business
expenses provided that documentation of such expenses is received by
Employer on or before November 15, 1996; provided that Employee shall
not incur any such expenses after October 15, 1996 and Employer shall
have no liability to reimburse Employee for any expenses incurred after
that date.
I. Issue a grant of a non-qualified option to purchase a
certain number of shares of Employer's common stock, represented by
"S," in the following formula to be used to calculate the number of
shares to be included within such option.
(9,000N - 16,830) + (10,000N - 15,600) + (1250N - 2737.6) = S
----------------- ------------------ ----------------
( 1.87 ) ( 1.56 ) ( 2.19 )
"N" equals the market price per share at the close of trading on the
Effective Date of this Agreement as defined in Paragraph 11 hereof,
which shall also be the date on which such option is granted.
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The option will expire on December 31, 1999. In consideration therefor,
Employee hereby agrees to the cancellation of and waives and releases
any and all rights with regard to all nonvested options pursuant to
Exhibits A through C hereof.
J. To pay one-half of Employee's reasonable attorney's fees
and costs incurred by Employee for legal services in connection with
review and execution of this Separation Agreement; provided that
Employer's obligation under this Paragraph 1.K. shall not exceed
$250.00. Payment shall be made to Xxxxxx X. X'Xxxxx on the thirtieth
day following Employer's receipt of a statement delineating such fees,
or on the Effective Date of this Agreement as described in Paragraph 11
hereof, whichever date occurs later.
2. In exchange for and consideration of the mutual promises and
covenants contained herein, Employee will:
A. Remain employed by Employer as provided in Paragraphs 1.A.
and 1.B. hereof and use his best efforts to fulfill the
responsibilities of that position;
B. Notify Employer promptly when Employee becomes re-employed
and eligible for group health insurance coverage through his new
employer.
C. Return to Employer, by the close of business on October 15,
1996, all of Employer's property within Employee's custody or control;
provided that the parties agree that Employee may keep Employer's
laptop computer which is currently assigned to Employee and within his
possession.
D. Take no action which would in any way cause any question to
arise with respect to the validity of any patent held by Employer.
3. The parties further agree that Employee shall remain available, at
times which are reasonably convenient to Employee, during the "Severance Period"
to respond to Employer's inquiries and provide services to Employer related to
those services which he has provided during the term of his employment.
4. The parties further agree that the "Severance Period" shall be
defined as the period of October 26, 1996 through April 25, 1997 provided that
Employer shall have no obligation to make any payment of salary or insurance
premiums on behalf of Employee in that event that Employee (a) ceases prior to
October 15, 1996, to provide services to Employer as provided in Paragraphs 1, 2
and 3 hereof or (b) violates the terms of Paragraph 5 hereof.
5. Restriction Against Competition. Employee acknowledges that Employee
has been employed in a position of trust and confidence and has had access to
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and become familiar with the unique methods, services and procedures used by
Employer and that as part of Employee's duties, Employee developed and
maintained close working relationships with Employer's customers. Employee
further acknowledges that disclosure of any of Employer's confidential or
proprietary information, trade secrets or other information relating to
operation of Employer's business or use of or access to such information by
Employer's competitors, would have a serious detrimental effect upon Employer,
the monetary loss from which would be difficult, if not impossible, to measure.
In consequence of the foregoing acknowledgements, Employee agrees:
A. Employee will not at any time during his employment by
Employer or thereafter, disclose the list of Employer's customers,
trade secrets, information about Employer's marketing, pricing,
merchandising, products in research and development, sales plans or
strategies or information about Employer's business operations deemed
to be confidential, to any person, firm, corporation, association, or
other entity for any reason or purpose whatsoever.
B. For the period of October 16, 1996 through October 15,
1997, Employee agrees that Employee will not, at any place within the
United States, directly or indirectly, own, manage, operate, control,
be employed by, participate in or be connected in any manner with the
ownership, management, operation or control of any business engaged in
the development, manufacture, marketing, sale and or distribution of
bipolar surgical instruments which compete directly with the current or
demonstrably anticipated products of Everest Medical Corporation. Such
restriction shall be limited to the following market segments; (i)
gastroenterological endoscopic procedures, (ii) general surgical
laparoscopic procedures, (iii) gynecological laparoscopic procedures,
and (iv) cardiovascular thoracoscopic procedures specifically including
saphenous vein harvesting for cardiac bypass surgery. Demonstrably
anticipated shall mean products which are currently in development and
are scheduled to be released to the market within twelve (12) months
from the date of this Agreement.
C. Employee agrees that Employee will not at any time from the
date of during his employment by Employer or during the period October
16, 1996 through October 15, 1997, directly or indirectly, either as an
individual for his own account, or on behalf of another person or
persons, corporation, partnership, or other entity, solicit any present
or future employee of Employer for any purpose of hiring or attempting
to hire such employee.
D. In the event that Employee shall violate any of the
foregoing provisions of this Paragraph 6, then Employer shall have the
right to seek injunctive relief or any other remedy allowed to it in
law or equity, and to collect from the Employee a reasonable attorney's
fee incurred in bringing such legal or equitable action or otherwise
enforcing the terms and conditions of this Agreement. Disputes arising
under this Paragraph 6 shall not be subject to the provisions of
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Section 10. In the event of a court of competent jurisdiction
determines that the provisions of this Paragraph 6 are unreasonable, it
may limit such provision to the extent it deems reasonable, without
declaring the provision invalid in its entirety.
6. The parties further agree that the terms of this Agreement shall
remain confidential provided that Employer may disclose such terms as is
necessary to effectuate the terms of the Agreement and/or for the operation of
its business and that Employee may disclose such terms to his spouse, tax and
financial advisers and attorney. Provided further, that the provisions of this
Paragraph 6 shall not apply to the terms contained in Paragraph 5 hereof.
7. The parties further agree that not to make any disparaging or
defamatory statements concerning one another. For the purposes of this Paragraph
7, Employer shall be defined as the officers, directors and managerial employees
of Employer.
8. Employee further agrees in consideration of and exchange for all the
mutual promises and covenants and promises contained herein to and hereby does
release, agree not to xxx and forever discharge Employer, its past and present
officers, directors, shareholders, employees, consultants, agents and
representatives, from all claims and demands he has or might have against them
or any of them, whether in law or equity, contract or tort, arising out of or in
connection with his employment by Employer, or the termination of that
employment or otherwise. This release includes, without limiting the generality
of the foregoing, any claims he may have for wages, commissions, penalties,
vacation pay or other benefit, defamation or improper discharge (based on
contract, at common law or under any federal, state or local statute or
ordinance prohibiting discrimination in employment particularly discrimination
based on race, sex, national origin, age, color, religion, marital status,
disability or affectional preference, including the Age Discrimination in
Employment Act) or attorney's fees or other costs or expenses and any claims he
may have with respect to intellectual property including but not limited to
patents, copyrights, inventions, trademarks or the registration thereof;
provided that nothing herein shall release or waive any right or claim that
Employee has or may have arising under that Agreement attached hereto as Exhibit
D.
9. All disputes arising out of or in connection with this Agreement
and/or with Employee's employment or termination of employment, other than
disputes arising under Paragraph 5, shall be determined by arbitration in
accordance with the commercial arbitration rules of the American Arbitration
Association. The arbitration proceedings shall be held in Minneapolis,
Minnesota, or at such other place as may be mutually agreeable to the parties.
10. Employee acknowledges that he has been advised to consult with an
attorney prior to signing this Agreement. Employee further acknowledges that he
has had at least 21 days to consider whether to sign this Agreement.
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11. Employee acknowledges that he may rescind, that is, cancel, this
Agreement by delivering written notice of that rescission by certified mail,
return receipt requested, postmarked within fifteen days of his signing the
Agreement. The notice of rescission must be addressed to Xxxx Xxxxxxx, Everest
Medical Corporation, 00000 Xxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, XX 00000-0000, or by
hand delivery to Xxxx Xxxxxxx at the same address within the 15-day period. The
sixteenth day following Employee's execution of this Agreement shall be the
Effective Date.
12. Employee acknowledges that Employer shall have no obligation
hereunder, except with respect to Paragraphs 1.A., 1.B., 1.C., and 1.H., prior
to the Effective Date of this Agreement, as defined in Paragraph 11 hereof.
13. No purported amendment, modification or waiver of any provision
hereof shall be binding unless set forth in a writing signed by both parties (in
the case of amendments or modifications) or by the party to be charged thereby
(in the case of waivers).
14. Any waiver shall be limited to the circumstances or event
specifically referenced in the written waiver document and shall not be deemed a
waiver of any other term of this Agreement or of the same circumstance or event
upon any recurrence thereof.
15. This Agreement, together with the Exhibits attached hereto,
constitutes the entire Agreement between the parties and supersedes any and all
prior and contemporaneous oral or written understandings between the parties
relating to the subject matter hereof.
EVEREST MEDICAL CORPORATION
Date: October 12, 1996 By: /s/ Xxxx X. Xxxxxxx, Xx.
Its President & Chief Executive Officer
"Employer"
R. XXXXX XXXXX
Date: October 12, 1996 /s/ R. Xxxxx Xxxxx
R. Xxxxx Xxxxx
"Employee"
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