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EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the 1st day of May, 1999, by and between
American Medical Systems, a Delaware Corporation, whose principal place of
business is located at 00000 Xxxx Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxx 00000,
hereinafter called "AMS", and Xxxxxx Xxxxx, residing at 0000 Xxxxx Xxxxxxxxx,
X.X., Xxxxxxxxxxx, Xxxxxxxxx, hereinafter called "Employee", both of whom
understand as follows:
WITNESSETH:
WHEREAS, is it the desire of AMS to: (1) secure and retain the services
of Employee and to provide inducement for him/her to remain in such employment;
(2) to make possible full work productivity by assuring Employee's morale and
peace of mind with respect to future security; and (3) to provide a just means
for terminating Employee's services at such time as he/she may be unable fully
to discharge his/her duties or when AMS may desire to otherwise terminate
his/her/her employ, and;
WHEREAS, it is the desire of AMS to provide certain benefits, establish
certain conditions of employment, set working conditions of Employee and protect
its confidential and proprietary business and technical information that has
been acquired and is being developed by the Company at substantial expense;
WHEREAS, Employee desires to accept employment under this Agreement.
For the reasons set forth above, and in consideration of the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1: EMPLOYMENT
AMS hereby agrees to the employment of the Employee as Vice President
of Research and Development, and Employee hereby accepts the employment of AMS,
subject to the general supervision and pursuant to the orders, advice, and
direction of AMS. Employee shall perform such other duties as are customarily
performed by one holding such position in other, same, or similar businesses or
enterprises as that engaged in by employer, and shall also additionally render
such other related services and duties as may be assigned to him/her from time
to time by AMS.
SECTION 2: BEST EFFORTS OF EMPLOYEE
Employee agrees that he/she will at all times, faithfully,
industriously, and to the best of his/her ability, experience, and talents,
perform all of the duties that may be required of and from him/her pursuant to
the express and implicit terms hereof, to the reasonable satisfaction of AMS.
Such duties shall be performed at the principal place of business of AMS as
stated above, and at such other place or places as AMS shall in good faith
require or as the interest, needs, business, or opportunity of AMS shall
require.
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SECTION 3: EMPLOYMENT AT-WILL
Nothing in this Agreement is intended to establish any minimum period
of Employee's continuing employment, and such employment continues to be on an
"at-will" basis. Employee acknowledges that his or her employment with Company
is terminable at will at any time by either party.
SECTION 4: SALARY
AMS agrees to pay employee for his/her services rendered pursuant
hereto an annual base salary of $150,000, payable in installments at the same
time as other similar employees of AMS are paid. In addition, AMS agrees to
increase said base salary and/or other benefits of Employee in such amounts and
to such an extent as AMS may determine that it is desirable to do so on the
basis of a salary review of Employee made at the same time as similar
consideration is given other employees generally as determined by reference to
the personnel policies of AMS.
SECTION 5: TERMINATION DUE TO DISCONTINUANCE OF BUSINESS
Anything herein contained to the contrary notwithstanding, in the event
that AMS shall discontinue operating its business, or a major part thereof in
which the Employee is engaged, then this Agreement shall terminate as of the
last day of the month on which AMS ceases its operations or part thereof.
SECTION 6: OTHER EMPLOYMENT
Employee shall within normal working hours devote all of his/her time,
attention, knowledge and skills solely to the business and interest of AMS, and
AMS shall be entitled to all of the benefits, profits, or other issues arising
from or incident to all work, services, and advice of Employee during this time.
Employee shall not, during the term hereof, be interested directly or
indirectly, in any manner, as partner, officer, director, stockholder, advisor,
employee or in any other capacity in any Conflicting Organization as that term
is defined in SECTION 12 of this Agreement; provided, however, that nothing
herein contained shall be deemed to prevent or limit the right of Employee to
invest any of his/her surplus funds in the capital stock or other securities of
any corporation whose stock or securities are publicly owned or are regularly
traded on any public exchange, nor shall anything herein contained be deemed to
prevent Employee from investing or limit Employee's right to invest his/her
surplus funds in real estate.
SECTION 7: RECOMMENDATIONS FOR IMPROVING OPERATIONS
Employee shall make available to AMS all information of which Employee
shall have any knowledge and shall make all suggestions and recommendations that
will be of mutual benefit to AMS and himself/herself.
SECTION 8: SEVERANCE PAY
If Employee's employment is terminated by AMS for any reason other than
Cause, as defined below, death or disability (i) Employee shall continue to
receive his/her then base salary (less any applicable withholding or similar
taxes) at the rate in effect hereunder on the date of
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such termination periodically, in accordance with AMS's prevailing payroll
practices, for a period of six (6) months following the date of such termination
(the "Severance Term"); (ii) Employee shall be entitled to receive, in a lump
sum, any bonus Employee would have been eligible to receive for the year in
which termination occurs, pro-rated based on Employee's period of employment
during such year (less any applicable withholding or similar taxes) and (iii) to
the extent permissible under AMS's health and welfare plans, Employee shall
continue to receive any health and welfare benefits provided to him/her as of
the date of such termination during the Severance Term, on the same basis and at
the same cost as during employment. Following the end of the Severance Term,
Employee shall be entitled to elect health care continuation coverage permitted
under Section 601 through 608 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), as if his employment had then terminated. In the
event Employee accepts other employment prior to the last date of the Severance
Term, Employee shall forthwith notify AMS and AMS shall be entitled to set off
from amounts and benefits due Employee under this Section 8 (other than in
respect of the bonus) the amounts paid to and benefits received by Employee in
respect of such other employment. The payments and benefits to be provided to
Employee as set forth in this Section 8 shall be lieu of any and all benefits
otherwise provided under any severance pay policy, plan or program maintained
from time to time by AMS for its employees. Notwithstanding the March 31, 1999
letter from AMS to Employee, severance payments under this Section 8 shall not
be payable if Employee's employment is terminated due to Employee's death.
For purposes of this Agreement, "Cause" shall mean: (i) Employee's
failure, neglect or refusal to perform his duties hereunder which failure,
neglect or refusal shall not have been corrected by Employee within 30 days of
receipt by Employee of written notice from AMS of such failure, neglect or
refusal, which notice shall specifically set forth the nature of said failure,
neglect or refusal, (ii) any willful or intentional act of Employee that has the
effect of injuring the reputation or business of AMS or its affiliates in any
material respect; (iii) any continued or repeated absence from AMS, unless such
absence is (A) approved or excused by the Chief Executive Officer or (B) is the
result of Employee's illness, disability or incapacity; (iv) use of illegal
drugs by Employee or repeated drunkenness; (v) conviction of Employee for the
commission of a felony; or (vi) the commission by Employee of an act of fraud or
embezzlement against AMS.
SECTION 9: CONFIDENTIAL INFORMATION
A. Unless employee shall first secure AMS's written consent, Employee
shall not disclose or use directly or indirectly at any time either during or
subsequent to his/her employment by AMS, any information, or compilation of
information that the Employee learns or develops during the course of his/her
employment that derives independent economic value from not being generally
known, or readily ascertainable by proper means, by other persons who can obtain
economic value from its disclosure or use. Such information includes, but is not
limited to, trade secrets and may relate to such matters as research and
development, manufacturing processes, management systems, product designs,
customer lists, and sales and marketing plans and information.
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B. Upon the request of AMS, Employee shall, in addition to agreeing to
be bound by the above provision, execute an "Invention and Confidential
Information Agreement" in such form as set out by AMS.
SECTION 10: EMPLOYEE'S INABILITY TO CONTRACT FOR EMPLOYER
Notwithstanding anything herein contained to the contrary, Employee
shall not have the right to make any contracts or commitments for or on the
behalf of AMS without first obtaining the written consent of AMS.
SECTION 11: DOCUMENTS AND TANGIBLE ITEMS
All documents and tangible items provided to the Employee by AMS or
created by the Employee for use in connection with his/her employment are the
property of AMS and shall be promptly returned to AMS on termination of
employment together with all copies, recordings, abstracts, notes or
reproductions or any kind made from or about the documents and tangible items or
the information they contain.
SECTION 12: NONCOMPETITION
Employee agrees that, for a period of one year after termination of
his/her employment with AMS in any manner, whether with or without cause,
Employee will not:
A. If Employee has been or is employed by AMS in a sales capacity,
Employee will not render services, directly or indirectly, to any CONFLICTING
ORGANIZATION in connection with the sale, merchandising, education, or promotion
of or about CONFLICTING PRODUCTS to any customer of AMS upon whom Employee
called, or whose account Employee supervised on behalf of AMS, at any time
during the last two years of his/her employment with AMS.
B. If Employee has been or is employed by AMS in a non-sales capacity,
Employee will not render services, directly or indirectly, to any CONFLICTING
ORGANIZATION, except that Employee may accept employment with a CONFLICTING
ORGANIZATION that is a large diversified organization with separate and distinct
divisions which would not be a CONFLICTING ORGANIZATION, provided AMS, prior to
Employee accepting such employment, shall receive separate written assurances
from such CONFLICTING ORGANIZATION and from Employee, that he/she will not
render services directly or indirectly to any division that would be a
CONFLICTING ORGANIZATION.
C. Employee will not employ or attempt to employ (by soliciting or
assisting anyone else in the solicitation of) any of AMS's then employees on
behalf of any other entity, whether or not such entity is a CONFLICTING
ORGANIZATION.
D. CONFLICTING PRODUCT means any product or process of any person or
organization other than AMS, in existence or under development, which resembles
or competes with a product or process upon which or with which the Employee
worked in either a Sales or Non-sales capacity during the last two years of
his/her employment by AMS, or about which Employee acquired confidential
information through his/her work with AMS.
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E. CONFLICTING ORGANIZATION means any person or organization which is
engaged in, or about to become engaged in, research on or development,
production, marketing or selling of a CONFLICTING PRODUCT.
F. Employee represents and warrants to AMS that he/she is not currently
subject to a non-competition, confidentiality or other such agreement with a
former employer which prohibits the Employee from working for AMS.
SECTION 13: MODIFICATION OF AGREEMENT
No waiver or modification of this Agreement or of any covenant,
condition or limitation herein contained shall be valid unless in writing and
duly executed by the party to be charged therewith. No evidence of any waiver or
modification shall be offered or received in evidence of any proceeding,
arbitration, or litigation between the parties hereto arising out of or
affecting this Agreement, or the rights or obligations of the parties hereunder,
unless such waiver or modification is in writing, duly executed as set forth
above. The parties further agree that the provisions of this section may not be
waived except as herein set forth.
SECTION 14: SEVERABILITY
If any provision, or any portion thereof, contained in this Agreement
is held to be unconstitutional, invalid, or unenforceable the remainder of this
Agreement, or portion thereof, shall be deemed severable, shall not be affected
and shall remain in full force and effect. To the extent that any provision of
this Agreement is unenforceable because it is overbroad, that provision shall be
limited to the extent required by applicable law and enforced as so limited.
SECTION 15: ENTIRE AGREEMENT
This Agreement, the offer of employment letter, dated March 29, 1999,
from AMS to Employee, the letter dated March 31, 1999, from AMS to Employee and
the Invention and Confidential Information Agreement, dated April 26, 1999,
between AMS and Employee, contain the complete agreement concerning the
employment arrangement between the parties and shall, as of the effective date
hereof, supersede all other agreements between the parties. The parties
stipulate that neither of them has made any representation, with respect to the
subject matter of this Agreement or any representation, including the execution
and delivery hereof except such representation as are specifically set forth
herein and each of the parties hereto acknowledges that he/she or it has relied
on its own judgment in entering into this Agreement. The parties hereto further
acknowledge that any payments or representations that my have heretofore been
made by either of them to the other are of no effect and that neither of them
has relied thereon in connection with his/her or its dealings with the other.
SECTION 16: TRANSFERABILITY
The right and obligations of AMS hereunder may be transferred to its
successors and assigns. Employee may not, however, transfer or assign his/her
rights or obligations in this Agreement.
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SECTION 17: APPLICABLE LAW
The validity, enforceability, construction and interpretation of this
Agreement shall be governed by the laws of the State of Minnesota.
SECTION 18: No Adequate Remedy
Employee understands that if Employee fails to fulfill the Employee's
obligations under this Agreement, the damages to AMS would be very difficult to
determine. Therefore, in addition to any other rights or remedies available to
AMS at law, in equity, or by statute, the Employee hereby consents to the
specific enforcement of this Agreement by AMS through an injunction or
restraining order issued by an appropriate court.
IN WITNESS WHEREOF, American Medical Systems, Inc. has caused this
Agreement to be signed and executed in its behalf by its Vice President, Human
Resources, and the Employee has signed and executed this Agreement, both in
duplicate as of the day and year first written above.
/s/ Jan Dick /s/ Xxxxxx Xxxxx
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Jan Dick Xxxxxx Xxxxx
Vice President of Human Resources
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