AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 99.3
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement is entered into as of June 17, 2008 between
Somanetics Corporation, a Michigan corporation (the “Company”), and Xxxxx X. Xxxxxxx (“Employee”).
In consideration of the mutual covenants contained in this Agreement, the Company and Employee
agree as follows:
1. Employment
During
the term of Employee’s employment under this Agreement (as defined in Sections 2 and
4), the Company shall employ Employee, and Employee hereby accepts such employment by the Company,
on a full time basis, in accordance with the terms and conditions set forth in this Agreement.
1.1. Position and Duties. Employee shall serve as President and Chief Executive
Officer of the Company. Employee shall perform all duties, services and responsibilities and have
such authority and powers for, and on behalf of, the Company as are customary and appropriate for
such position and as are established from time to time by, or in accordance with procedures
established by, the Company’s Board of Directors.
1.2. Performance. Employee shall perform the duties called for under this Agreement
to the best of his ability and shall devote all of his business time, energies, efforts and skill
to such duties during the term of his employment and shall not engage in any other business of any
nature whatsoever, in any capacity whatsoever, unless approved in writing in advance by the
Company’s Board of Directors. Employee shall be based in the Troy, Michigan area and perform his
duties in the State of Michigan except for travel incidental to the performance of his duties under
this Agreement and except as otherwise approved in writing by Employee and the Company.
2. Term
The term of Employee’s employment under this Agreement shall begin on the date of this
Agreement and shall continue until June 17, 2011, unless earlier
terminated pursuant to Section 4;
provided that such term shall automatically be extended for additional one year periods effective
one year before it would otherwise expire (i.e., so the remaining term will be two years) unless
Company or Employee provides the other with notice that such term shall not be extended and such
notice is provided at least one year before the term would otherwise expire, all unless earlier
terminated pursuant to Section 4.
3. Compensation
As full compensation for Employee’s performance of his duties pursuant to this Agreement, the
Company shall pay Employee during the term of this Agreement, and Employee shall accept as full
payment for such performance, the following amounts and benefits:
3.1. Salary. As salary for Employee’s services to be rendered under this Agreement,
the Company shall pay Employee an annual salary of $350,750, subject to increase, but not decrease,
in the discretion of the Company’s Board of Directors. Such salary shall be payable semi-monthly
in arrears (or at such other interval, not less frequently than monthly, as the Company shall
designate).
3.2. Bonus. The Company’s Board of Directors shall establish bonus plans in which
Employee shall be eligible to participate for each fiscal year of the Company during the term of
Employee’s employment under this Agreement. Such bonus plan shall provide Employee with a target
bonus (i.e., the bonus payable if targets are 100% met, but not necessarily the actual amount of
bonus payable under the plan) of at least 65% of Employee’s salary, which percentage is subject to
increase, but not decrease, in the discretion of the Company’s Board of Directors. Actual payments
under such bonus plan will be based on the terms and conditions of such plan and could be zero.
3.3. Benefits. Employee shall be eligible to participate in all fringe benefits, if
any, including insurance, vacation, other employee benefit plans and business expense
reimbursement, applicable to other similar employees of the Company, when and if adopted and made
available during the term of this Agreement to employees with similar periods of service, subject
to any eligibility or other requirements for participating in such fringe benefits and to the
actual existence of the respective plans.
3.4. Indemnification. The Company shall, to the fullest extent authorized or
permitted by the Michigan Business Corporation Act, defend, indemnify and hold Employee, his heirs,
executors, administrators and other legal representatives, harmless from and against any and all
claims, suits, debts, causes of action, proceedings or other actions, at law or in equity, which
any person or entity may have had, now has or may in the future have with respect to Employee’s
service to the Company as an officer, director, employee or agent thereof.
4. Termination
4.1. Death. Employee’s employment under this Agreement shall terminate immediately
upon Employee’s death.
4.2. Disability. The Company shall have the right, upon written notice to Employee,
to terminate Employee’s employment under this Agreement upon Employee’s “Disability” (as defined in
Section 4.5.1). Such termination shall be effective immediately when such notice is deemed given to
Employee pursuant to Section 11, or upon such later date, if any, provided in such notice. Employee
shall continue to receive compensation pursuant to Section 3 during the period before termination
of Employee’s employment pursuant to this Section 4.2, if Employee’s employment is not otherwise
terminated pursuant to this Agreement, less any disability benefits Employee receives pursuant to
any disability insurance policy or its equivalent provided to Employee by the Company with respect
to such period. There shall be no such deduction for disability benefits received by Employee if
Employee pays the premiums on such disability insurance policy.
4.3. With Cause. The Company shall have the right, upon written notice to Employee,
to terminate Employee’s employment under this Agreement for
“Cause” (as defined in Section 4.5.2).
Such termination shall be effective immediately when such notice is deemed given to Employee
pursuant to Section 11.1, or upon such later date, if any, provided in such notice.
4.4. Without Cause.
4.4.1. The Company shall have the right, upon written notice to Employee, to terminate
Employee’s employment under this Agreement without Cause. Such termination shall be
effective when such notice is deemed given to Employee pursuant to
Section 11.1, or upon such
later date, if any, provided in such notice.
4.4.2. Employee shall have the right, upon written notice to the Company, to terminate
his employment under this Agreement. Such termination shall be effective 30 days after such
notice is deemed given to the Company pursuant to Section 11.1, or upon such later date, if
any, provided in such notice.
4.5. Definitions.
4.5.1. Disability. For purposes of this Agreement, “Disability” means (1) if
Employee is covered by a Company-, Successor- or affiliate-provided disability insurance
policy, the definition of disability contained in, and entitling Employee to benefits under,
that policy, or (2) if Employee is not covered by such a policy, Employee’s inability,
whether physical or mental, to perform the normal duties of his position for six consecutive
months. If there is any disagreement as to the nature, extent, duration or cause of
Employee’s absence or disability, such matter shall be determined by a doctor chosen by the
Company and a doctor chosen by Employee, and, if necessary, a doctor mutually chosen by such
doctors; provided that Employee shall be deemed subject to a “Disability” if Employee shall
fail or refuse to submit to physical examinations by such doctors.
4.5.2. Cause. For purposes of this Agreement “Cause” means (1) Employee’s
continued failure (after notice and at least 30 days to cure such failure) to make a good
faith effort to perform Employee’s employment duties, (2) any breach by Employee of the
provisions of Section 6, or (3) Employee’s conviction of a felony involving dishonesty or
fraud.
4.5.3. Change in Control. For purposes of this Agreement, a “Change in
Control” shall mean:
(a) Acquisition of Shares. the acquisition by any individual, entity
or group (a “Person”), including any “person” within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
of beneficial ownership within the meaning of Rule 13d-3 promulgated under the
Exchange Act, of 40% or more of either (1) the then outstanding Common Shares of the
Company (the “Outstanding Common
Shares”) or (2) the combined voting power of the then outstanding securities of
the Company entitled to vote generally in the election of directors (the
“Outstanding Voting Securities”); excluding, however, the following: (A) any
acquisition directly from the Company (excluding any acquisition resulting from the
exercise of an exercise, conversion or exchange privilege unless the security being
so exercised, converted or exchanged was acquired directly from the Company), (B)
any acquisition by the Company, (C) any acquisition by an employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation controlled
by the Company, or (D) any acquisition by any corporation pursuant to a transaction
which complies with clauses (1), (2) and (3) of
Section 4.5.3(c); provided further, that
for purposes of clause (B), if any Person (other than the Company or any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company) shall become the beneficial owner of 40% or
more of the Outstanding Common Shares or 40% or more of the Outstanding Voting
Securities by reason of an acquisition by the Company, and such Person shall, after
such acquisition by the Company, become the beneficial owner of any additional
Outstanding Common Shares or any additional Outstanding Voting Securities and such
beneficial ownership is publicly announced, such additional beneficial ownership
shall constitute a Change in Control;
(b) Change in Board Control. individuals who, as of the date hereof,
constitute the Company’s Board of Directors (the “Incumbent Board”) cease for any
reason to constitute at least a majority of such Board; provided that any individual
who becomes a director of the Company subsequent to the date hereof whose election,
or nomination for election, by the Company’s shareholders was approved by the vote
of at least a majority of the directors then comprising the Incumbent Board shall be
deemed a member of the Incumbent Board;
(c) Reorganization, Merger or Asset Sale. the consummation of a
reorganization, merger or consolidation, or sale or other disposition of all or
substantially all of the assets, of the Company (a “Corporate Transaction”);
excluding, however, a Corporate Transaction pursuant to which (1) all or
substantially all of the individuals or entities who are the beneficial owners,
respectively, of the Outstanding Common Shares and the Outstanding Voting Securities
immediately prior to such Corporate Transaction will beneficially own, directly or
indirectly, more than 60% of, respectively, the outstanding Common Shares, and the
combined voting power of the outstanding securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Corporate Transaction (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or indirectly) in substantially the same
proportions relative to each other as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Common Shares and the Outstanding Voting
Securities, as the case may be, (2) no Person (other than: the Company; any employee
benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the Company; the
corporation resulting from such Corporate Transaction; and any Person which
beneficially owned, immediately prior to such Corporate Transaction, directly or
indirectly, 40% or more of the Outstanding Common Shares or the Outstanding Voting
Securities, as the case may be) will beneficially own, directly or indirectly, 40%
or more of, respectively, the outstanding Common Shares of the corporation resulting
from such Corporate Transaction or the combined voting power of the outstanding
securities of such corporation entitled to vote generally in the election of
directors and (3) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of directors of the
corporation resulting from such Corporate Transaction; or
(d) Dissolution or Liquidation. the consummation of a plan of complete
liquidation or dissolution of the Company.
4.5.4. Entity. For purposes of this Agreement, the “Entity” shall mean (1) in
connection with a Change in Control that results in an entity other than the Company being a
successor to the Company’s business, such new entity (the “Successor”) beginning on the date
of the Change in Control, but the Successor shall be the Entity only if the Successor is
either bound by the terms of this Agreement as a successor to the Company or offers to
employ Employee beginning on the date of the Change in Control on such terms that would not
constitute “Good Reason” (as defined in Section 4.5.5) for termination of Employee’s employment
if imposed by the Company, and (2) in all other cases, the Company. For purposes of this
Section 4.5.4, Employee shall not be deemed to have terminated his employment with the Entity
for Good Reason and the Entity shall not be deemed to have terminated Employee’s employment
without Cause if (1) a Successor who has purchased all or substantially all of the Company’s
assets has offered to employ Employee on such terms that would not constitute Good Reason
for termination of Employee’s employment if imposed by the Company, (2) Employee refuses
such employment, and (3) the Company terminates Employee’s employment for any reason or for
no reason.
4.5.5. Good Reason. For purposes of this Agreement, termination of Employee’s
employment with the Entity for “Good Reason” means Employee’s termination of employment with
the Entity within one year following the initial existence of, one or more of the following
conditions arising without Employee’s consent:
(a) A material diminution in Employee’s base compensation;
(b) A material diminution in Employee’s authority, duties or responsibilities;
(c) A material diminution in the authority, duties or responsibilities of the
supervisor to whom Employee is required to report, including a requirement that
Employee report to a corporate officer or employee instead of reporting directly to
the board of directors of a corporation (or similar governing body with respect to
an Entity other than a corporation);
(d) A material diminution in the budget over which Employee retains authority;
(e) A material change in the geographic location at which Employee must perform
the services; or
(f) Any other action or inaction that constitutes a material breach of the
Entity of this Agreement or any other agreement under which Employee provides
services;
provided that Employee must provide notice to the Entity of the existence of the applicable
condition within 90 days of the initial existence of such condition and must provide the
Entity with at least 30 days to remedy the applicable condition. Employee’s death,
Disability or “Retirement” (as defined in Section 4.5.6), or Employee’s resignation other than
as provided in the preceding sentence shall not constitute a condition under which
Employee’s employment with the Entity may be terminated for Good Reason. Employee’s
termination of employment with the Entity for Good Reason will not exist until Employee
provides the Entity with notice of the applicable condition and the cure period and the cure
period passes without the Entity remedying the applicable condition.
4.5.6. Retirement. For purposes of this Agreement, “Retirement” means
Employee’s termination of employment on account of his retirement from the Entity.
4.5.7. Termination of employment. For purposes of this Agreement, “termination
of employment” means a “separation from service” as defined under Treasury Regulations
Section 1.409A-1(h).
5. Effects of Termination
5.1.
Provisions Applicable to All Terminations of Employment.
Subject to Section 5.2,
if Employee’s employment under this Agreement terminates, the Company’s obligations under this
Agreement, including obligations under Section 3, shall end except for the Company’s obligation to:
(1) reimburse Employee (or his estate) for all out-of-pocket expenses incurred and all benefits
actually due pursuant to Section 3.3, accrued and unpaid through the date of termination, other than
any accrued vacation, which shall be deemed cancelled, terminated and not accrued upon such
termination; and (2) pay to Employee (or his estate) any salary
and bonus compensation, pursuant to Sections 3.1 and 3.2, actually earned, accrued and unpaid through the date of termination, each in
accordance with the Company’s regular payroll and expense reimbursement policies.
5.2. Termination of Employment By Employee For Good Reason or By the Company Without
Cause.
5.2.1.
Subject to Sections 5.2.2, 5.2.3 and 5.3, if (1) Employee terminates Employee’s employment
with the Entity pursuant to Section 4.4.2 for Good Reason, or
(2) the Entity terminates Employee’s employment without
Cause pursuant to Section 4.4.1, in addition to its obligations
under Section 5.1, the Company shall (1) for a
period of 12 months beginning immediately after the effective date of such termination,
subject to earlier termination upon the occurrence of any of the events described in
Sections 4.1, 4.2 or 4.3, provide Employee, at the Company’s expense, with the benefits set forth
in Section 3.3, other than vacation and business expense reimbursement, and (2) within 10
business days after the effective date of such termination, pay Employee in one undiscounted
lump sum an amount in cash equal to (a) one times Employee’s annualized base salary at the
rate in effect on the date of this Agreement, or, if higher, Employee’s base salary in
effect immediately before the earlier of Employee’s termination of employment or the date
the Change in Control occurs, if any, plus (b) an amount equal to (i) (A) one plus the
fraction of the year in which the termination occurs before the effective date of such
termination, times (B) the target bonus payable to Employee with respect to the fiscal year
in which the effective date of such termination occurs, minus (ii) the amount of bonuses
actually paid to Employee with respect to the fiscal year in which the effective date of
such termination occurs.
5.2.2. If Employee is a “specified employee” (as defined under Treasury Regulations
Section 1.409A-1(i)) of the Entity as of the date of his termination of employment, then the
Entity shall pay to Employee that portion of any amount payable under
Section 5.2.1 that exceeds
the maximum allowable separation pay amount under Treasury Regulations Section
1.409A-1(b)(9)(iii)(A) and that otherwise constitutes deferred compensation subject to
Section 409A of the Internal Revenue Code of 1986, as amended, on the date that is six
months after the date of his termination of employment (or, if earlier, the date of his
death).
5.2.3. The Company may withhold from the amounts payable to Employee under this
Section 5.2 all federal, state, city and other taxes to the extent such taxes are required to
be withheld by applicable law.
5.3. Termination of Employment By Employee For Good Reason or By the Company Without Cause
in Connection with a Change in Control.
5.3.1.
Subject to Sections 5.3.2 and 5.3.3 and instead of the benefits
provided in Section 5.2,
if (1) a Change in Control occurs during the term of Employee’s employment under this
Agreement (determined pursuant to Section 2, without regard to Section 4), and (2) at any
time during the period beginning 90 days before the Change in Control occurs and ending one
year after the Change in Control occurs, Employee terminates Employee’s employment with the
Entity pursuant to Section 4.2.2 for Good Reason, or the Entity terminates Employee’s employment
without Cause pursuant to Section 4.4.1, in addition to its
obligations under Section 5.1, the
Company shall (1) for a period of 24 months beginning immediately after the effective date
of such termination, subject to earlier termination upon the occurrence of any of the events
described in Sections 4.1, 4.2 or 4.3, provide Employee, at the Company’s expense, with the
benefits set forth in Section 3.3, other than vacation and business expense reimbursement, and
(2) within 10 business days after the effective date of such termination, pay Employee in
one undiscounted lump sum an amount in cash equal to (a) two times Employee’s annualized
base salary at the rate in effect on the date of this Agreement, or, if higher, Employee’s
base salary in effect immediately before the earlier of Employee’s termination of
employment or the date the Change in Control occurs, if any, plus (b) an amount equal
to (i) (A) two plus the fraction of the year in which the termination occurs before the
effective date of such termination, times (B) the target bonus payable to Employee with
respect to the fiscal year in which the effective date of such termination occurs, minus
(ii) the amount of bonuses actually paid to Employee with respect to the fiscal year in
which the effective date of such termination occurs.
5.3.2. If Employee is a “specified employee” (as defined under Treasury Regulations
Section 1.409A-1(i)) of the Entity as of the date of his termination of employment, then the
Entity shall pay to Employee that portion of any amount payable under
Section 5.3.1 that exceeds
the maximum allowable separation pay amount under Treasury Regulations Section
1.409A-1(b)(9)(iii)(A) and that otherwise constitutes deferred compensation subject to
Section 409A of the Internal Revenue Code of 1986, as amended, on the date that is six
months after the date of his termination of employment (or, if earlier, the date of his
death).
5.3.3. The Company may withhold from the amounts payable to Employee under this
Section 5.3 all federal, state, city and other taxes to the extent such taxes are required to
be withheld by applicable law.
5.4. General Effects of Termination. Termination of Employee’s employment under this
Agreement shall not affect either party’s rights and obligations
under Sections 3 (subject to the
limitations set forth in this Section 5), 5 and 6 through 17, such rights and obligations shall
continue and survive the termination of Employee’s employment and this Agreement, for any reason,
notwithstanding any breach of this Agreement by Employee or by the Company.
6. Invention, Confidentiality, Non-Competition, and Non-Solicitation.
In consideration of both Employee’s initial and continued employment with the Company, of the
consideration paid to Employee in connection with Employee’s employment with the Company and of the
positions that Employee now holds or may in the future hold, which may include having access to, or
learning information concerning, the business activities of the Company and acquiring confidential
or otherwise proprietary facts and information concerning technological and other activities of the
Company, Employee agrees to the provisions of this Section 6.
6.1. Inventions.
6.1.1. Company Ownership. Any and all improvements, discoveries, innovations,
inventions, conceptions and/or reductions to practice, “Confidential Information” (as
defined in Section 6.2.2), problem solutions and, in general, all technological conceptions and
developments, whether patentable or not, (collectively referred to in this Agreement as
“Inventions”) which Employee makes or comes to know of, either alone or with others, during
the term of Employee’s employment or other association with the Company, and relating in any
way to the business interests or business activities of the Company, whether past or present
or future, or relating to its technological or product research and/or development programs,
are understood and
agreed to be, and are by this Agreement expressly made to be, the exclusive property of
the Company.
6.1.2. Disclosure to the Company. Employee shall disclose promptly and fully
to the Company and to its attorneys all Inventions, and Employee shall, when requested to do
so either before or after the termination of Employee’s employment with the Company,
formally assign and convey to the Company Employee’s entire right, title and interest in and
to all Inventions; Employee shall assist the Company and its agents in preparing patent
applications, both United States and foreign, covering any Invention; Employee shall
promptly review, execute and deliver all said applications and assignments of the same to
the Company, and shall, as promptly as reasonably possible, generally give all information
and testimony, sign all papers and do all things which may be needed or requested by the
Company, to the end that the Company may obtain, extend, reissue, maintain and enforce
United States and foreign patents covering said Inventions.
6.1.3. Company Expenses. It is and shall be the sole responsibility of the
Company to bear all expenses incurred in obtaining, extending, reissuing, maintaining and
enforcing the aforementioned patents and in vesting and perfecting title thereto in the
Company and also to pay all reasonable expenses which Employee incurs at the Company’s
request.
6.2. Confidentiality.
6.2.1. Obligation to Keep Confidential. Except as authorized in writing by the
Company, Employee shall not at any time, either prior to, during or after Employee’s
association with the Company, disseminate, disclose or otherwise appropriate, directly or
indirectly, any Confidential Information of the Company of which Employee gains knowledge
prior to, during or after termination of such employment, and Employee shall retain all such
information in trust in a fiduciary capacity for the sole use and benefit of the Company.
Employee acknowledges that the Confidential Information of the Company is valuable, special
and unique to its business, that on such Confidential Information the Company’s business
depends, that such Confidential Information is proprietary to the Company, and that the
Company wishes to protect such Confidential Information by keeping it secret and
confidential for the sole use and benefit of the Company. Employee shall take all steps
necessary, and all steps reasonably requested by the Company, to ensure that all such
Confidential information is kept secret and confidential for the sole use and benefit of the
Company.
6.2.2. “Confidential Information”. Confidential Information of the Company
means information known or apprehended by the Company and/or developed by or for the
Company, by any person, including Employee, which is not otherwise explicitly, consciously,
properly, legally and generally known in any industry in which the Company is or may become
engaged. Confidential Information includes, but is not limited to, such information,
whether now possessed or hereafter obtained, concerning plans, marketing and sales methods,
materials, processes, procedures or devices utilized or considered by the Company, or by
consultants, technicians, employees, or medical clinics or other medical organizations with
which the Company deals (or organizations or
other entities or persons associated with such medical clinics or other medical
organizations), or by contractors, representatives and customers of the Company, plans for
development of new products, services and expansion into new areas or markets, internal
operations, trade secrets, Inventions, patent applications, trade names, trademarks, service
marks, copyrights, proprietary information and other confidential information of any type,
together with all written, graphic, and other materials relating to all or any part of the
same (collectively, “Confidential Information”).
6.2.3. Property of the Company. All records and other materials pertaining to
the Confidential Information, whether developed by Employee or not, shall be and remain the
exclusive property of the Company. Upon termination of Employee’s association with the
Company or at any other time the Company may in writing so request, Employee shall promptly
deliver to the Company all materials concerning any Invention or Confidential Information,
copies thereof and any other materials of the Company which are in Employee’s possession or
under Employee’s control, and Employee shall not make or retain any copy or extract thereof.
6.3. Non-Compete. During the term of Employee’s employment with the Company and for a
period of one year following the termination of Employee’s employment with the Company under this
Agreement (voluntarily or involuntarily and with or without Good Reason or Cause), Employee shall
not, directly or indirectly, himself, or through or for any individual, person or entity wherever
located:
6.3.1. Competing Activities. Engage in any activities or perform any services
in connection with, or sell, any products that are patches for ventricular restoration,
cerebral and/or somatic oximeters, related sensors, or other products sold by the Company
during the term of Employee’s employment with the Company; or
6.3.2. Employee or Owner of Competitor. Be employed by, consult with, own any
capital stock of, or have any financial interest of any kind in, any individual, person or
entity, wherever located, that manufactures, assembles or sells patches for ventricular
restoration, cerebral and/or somatic oximeters, related sensors, or other products sold by
the Company during the term of Employee’s employment with the Company; provided that
Employee may own, for investment purposes only, up to 3% of the stock of any publicly traded
business, if Employee is not otherwise affiliated with such business; or
6.3.3. Solicit Customers. Solicit any entity that, to Employee’s knowledge,
was a customer of the Company within the year before that date Employee’s employment with
the Company terminates to supply patches for ventricular restoration, cerebral and/or
somatic oximeters, related sensors, or other products sold by the Company during the term of
Employee’s employment with the Company to such customer.
6.4. Non-Solicitation. During the term of Employee’s employment with the Company and
for a period of five years following the termination of Employee’s employment with the Company
(voluntarily or involuntarily and with or without Good Reason or Cause), Employee shall not,
directly or indirectly, himself, or through or for any individual, person or entity
wherever located (1) solicit or attempt to hire any person who is then employed by, or is a
consultant to, the Company or who, to Employee’s knowledge, was employed by, or was a consultant
to, the Company at any time during the year before the termination of Employee’s employment with
the Company, except for (a) persons whose employment or consultation with the Company has been
terminated by the Company, and (b) persons whose employment or consultation with the Company has
been terminated for at least six months (persons within these two exceptions shall not be covered
by this Section 6.4), or (2) encourage any such person to terminate his or her employment or
consultation with the Company.
6.5.
Equitable Remedies. Sections 6.1, 6.2, 6.3, and 6.4 are intended, among other things, to
protect the Confidential Information described in Section 6.2.2 and the Company’s technology,
proprietary information and personnel, and Employee acknowledges and agrees that the covenants and
undertakings contained in this Section 6 relate to matters which are of a special, unique and
extraordinary character, and a violation or any of their terms will cause irreparable injury to the
Company, the amount of which will be extremely difficult, if not impossible, to estimate or
determine and which cannot be adequately compensated by monetary damages alone. Therefore,
Employee agrees that if Employee breaches or threatens to breach any of those sections, in addition
to any other rights and remedies which may be available to the Company under this Agreement, under
the applicable law or at law or equity, the Company shall be entitled, as a matter of course, to
obtain an injunction, restraining order, or other equitable relief from any court of competent
jurisdiction, restraining any violation or threatened violation of any such terms by Employee
and/or by such other persons and entities as the court shall order.
6.6. Company right to Adapt and Develop. It is understood and agreed that the Company
shall have the royalty-free, worldwide, assignable right to use, or to adapt and to develop in any
way, all Inventions conceived or made by Employee, whether or not patentable, including, but not
limited to, processes, methods, formulae, and techniques, as well as improvements thereof or
know-how related thereto, or not to use them at all should the Company so choose.
7. Employee’s Remedies
Employee’s remedy against the Company for breach of this Agreement and/or wrongful termination
of his employment is the collection of any compensation due him as
provided in Sections 3 and 5 and
such other remedies available to Employee under law or in equity.
8. Representation
Employee represents and warrants that (1) Employee’s performance of this Agreement does not
and will not breach any agreement or duty that Employee has to anyone else to keep in confidence
confidential information belonging to others, and (2) Employee is not now a party to or bound in
any way by any agreement, commitment, obligation or company policy (written or otherwise),
including any with Employee’s former employer, that in any way restricts Employee’s ability to
enter into, or perform Employee’s obligations under, this Agreement or under which a breach or
default occurs, or with notice, lapse of time or both will occur, as a result of Employee’s entry
into, or performance of Employee’s obligations under, this Agreement.
9. Assignment
The Company shall not be required to make any payment under this Agreement to any assignee or
creditor of Employee, other than to Employee’s legal representative on death. Employee’s
obligations under this Agreement are personal and may not be assigned, delegated or transferred in
any manner and any attempt to do so shall be void. Employee, or his legal representative, shall
have no rights by way of anticipation or otherwise to assign or otherwise dispose of any right of
Employee under this Agreement. The Company may assign this Agreement without Employee’s consent to
any successor to the Company’s business. This Agreement shall be binding upon, and shall inure to
the benefit of, the Company, Employee and their permitted successors and assigns.
10. Company’s Obligations Unfunded
Except for any benefits under any benefit plan of the Company that are required by law or by
express agreement to be funded, it is understood that the Company’s obligations under this
Agreement are not funded, and it is agreed that the Company shall not be required to set aside or
escrow any monies in advance of the due date of the payment of such monies to Employee.
11. Notices
11.1. To Employee. Any notice to be given under this Agreement by the Company to
Employee shall be deemed to be given (1) when delivered to Employee in person, (2) on the date
delivery is guaranteed if sent by courier that guarantees delivery, or (3) three business days
after mailed to him by certified or registered mail, postage prepaid, return receipt requested, to:
Xxxxx X. Xxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
or at such other address as Employee shall have advised the Company by notice in writing.
11.2. To the Company. Any notice to be given by Employee to the Company shall be
deemed to be given (1) on the date delivery is guaranteed if sent by courier that guarantees
delivery, or (2) three business days after mailed by certified or registered mail, postage prepaid,
return receipt requested, to:
Somanetics Corporation
0000 Xxxx Xxxxx Xxxx
Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxx Xxx Xxxxxx, Vice President, Chief Administrative
Officer and Secretary
0000 Xxxx Xxxxx Xxxx
Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxx Xxx Xxxxxx, Vice President, Chief Administrative
Officer and Secretary
With a copy to:
Xxxxxx X. Xxxxxxx
Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx LLP
Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx LLP
2290 First National Building
000 Xxxxxxxx Xxx.
Xxxxxxx, Xxxxxxxx 00000-0000
000 Xxxxxxxx Xxx.
Xxxxxxx, Xxxxxxxx 00000-0000
or at such other address as the Company shall have advised Employee by notice in writing.
12. Amendments
This Agreement shall not be amended, in whole or in part, except by an agreement in writing
signed by the Company and Employee.
13. Entire Agreement
This Agreement together with any Invention and Confidentiality Agreement between Employee and
the Company constitute the entire agreement between the parties with respect to their subject
matter and all prior agreements or understandings, oral or written, are merged in this Agreement or
any such Invention and Confidentiality Agreement and are of no further force or effect. This
Agreement replaces and supersedes the Amended and Restated Employment Agreement dated as of
April 19, 2006, between the Company and Employee, which Amended and Restated Employment Agreement,
Employee and the Company agree is terminated as of the date of this Agreement. The parties
acknowledge that they are not relying on any representations, express or implied, oral or written,
(relating to any aspect of Employee’s current or future employment or otherwise), except for those
stated in this Agreement or any Invention and Confidentiality Agreement. Employee further
acknowledges that his sole rights and remedies with respect to any aspect of his employment or
termination of his employment are provided for in this Agreement.
14. Captions
The captions of this Agreement are included for convenience only and shall not affect the
construction of any provision of this Agreement.
15. Governing Law and Forum
The laws of the State of Michigan shall govern this Agreement, its construction, and the
determination of any rights, duties or remedies of the parties arising out of or relating to this
Agreement, except for any provisions of Michigan law which direct the application of other states’
laws, and except that if any provision of this Agreement would be illegal, void, invalid or
unenforceable under such Michigan laws, then the laws of such other jurisdiction which would render
such provisions valid and enforceable shall govern so far as is necessary to sustain the validity
and enforceability of the terms of this Agreement. The parties acknowledge that the United States
District Court for the Eastern District of Michigan or the Michigan Circuit Court for the County of
Oakland shall have exclusive jurisdiction over any case or controversy arising out of or relating
to this Agreement and that all litigation arising out of or relating to this Agreement shall be
commenced in the United States District Court for the Eastern District of Michigan or in the
Oakland County (Michigan) Circuit Court. Each party consents to be subject to personal
jurisdiction of the courts of or in Michigan.
16. Severability
The provisions of this Agreement will be deemed severable, and if one or more of the
provisions contained in the Agreement shall, for any reason, be held invalid, illegal or
unenforceable in any respect, (1) such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provision has never been contained in this Agreement, and (2) such
provisions may be changed to the extent reasonably necessary to make the provision, as so changed,
legal, valid and binding. If, moreover, any one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to time, duration, geographical
scope, activity or subject, it shall be construed by limiting and reducing it so as to be
enforceable to the extent compatible with the applicable law as it shall then appear.
17. No Waiver
No waiver of any breach of any agreement or provision contained in this Agreement shall be
deemed a waiver of any preceding or succeeding breach of such agreement or provision or of any
other agreement or provision contained in this Agreement. No extension of time for performance of
any obligation or acts shall be deemed an extension of time for the performance of any other
obligation or act.
18. Consultation with Counsel
Employee acknowledges that he has been given the opportunity to consult with his personal
legal counsel concerning all aspects of this Agreement and the Company has urged Employee to so
consult with such counsel.
IN WITNESS WHEREOF, the Company and Employee have duly executed this Agreement as of the date
and year first above written.
| SOMANETICS CORPORATION |
||||
| By: | ||||
| Its: | ||||
| XXXXX X. XXXXXXX | ||||
