EMPLOYMENT AGREEMENT
Exhibit 10.9
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made by and between LeMaitre Vascular, Inc., a Delaware corporation with an address at 00 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx (the “Company”) and Xxxxx Xxxxx, an individual with a residence at 00 Xxxxx Xxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxxx (the “Executive”) as of May 27, 2005.
IN CONSIDERATION of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS.
“Board” means the Board of Directors of the Company.
“Cause” means any of (a) the Executive’s continued failure to perform the Executive’s duties with the Company as such duties relate to the Company’s pre-determined performance objectives for thirty (30) days after a written demand for performance is delivered to the Executive by the Company’s Board (or the compensation subcommittee thereof) which specifically identifies the manner in which the Executive has not performed the Executive’s duties, (b) the engaging by the Executive in acts of dishonesty or moral turpitude, illegal conduct or gross misconduct, including, without limitation, fraud, misrepresentation, theft, embezzlement, (c) the Executive’s violation of company policy or refusal to follow a lawful directive of the Chief Executive Officer or the Board, which violation or refusal is not remedied within ten (10) days after receipt of notice thereof from the Company, (d) the Executive’s breach of this Agreement or the Employee Obligations Agreement, (e) the engaging by the Executive in conduct that is likely to affect adversely the business and/or reputation of the Company or (f) the death or Disability of the Executive.
“Change of Control” means a transfer of greater than fifty (50%) percent of the voting securities of the Company from the prior controlling parties to any other parties not directly or indirectly affiliated with such prior controlling parties, subject to the following: (a) Any event occasioned by the sale of voting securities to the public under the Securities Act of 1933 shall not constitute a “Change of Control” and from and after any such event a “Change of Control” shall not be deemed to have occurred, notwithstanding any other provision of this Agreement. (b) Any event occasioned by a corporate reorganization shall not constitute a “Change of Control.” (c) The sale of all or substantially all of the assets of the Company shall constitute a “Change of Control.”
“Compensation” means the Executive’s salary and bonus referred to in Sections 4.1 (a) - (b) of this Agreement.
“Compensation Committee” means the Compensation Committee of the Board;
“Disability” means the inability to engage in the performance of the Executive’s duties with the Company for a period of at least one-hundred eighty (180) days in any three hundred sixty (360) day period by reason of a physical or mental impairment, with reasonable accommodations.
“Employee Obligations Agreement” means that certain Employee Obligations Agreement between the Company and the Executive dated October 4, 2004.
“Good Reason” means any of (a) a material reduction in the Executive’s responsibilities, (b) a reduction of the Executive’s base salary and benefits, other than a reduction that is common (on either an absolute or proportional basis) either to all employees of the Company or to all members of the Company’s Executive Committee, or (c) a relocation of the Executive’s place of work without the Executive’s consent to a location outside a sixty (60) mile radius of 00 Xxxxx Xxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxxx.
“Lump Sum Payment” shall mean a single payment of the applicable sum hereunder, paid to the Executive no later than thirty (30) days from the execution and delivery of the release referenced in Section 5.2(c).
“Severance Pay” shall mean: (a) prior to a Change of Control, six (6) months of the Executive’s base salary as of the date of Termination; and (b) following a Change of Control, nine-twelfths (9/12th) of the Executive’s average Compensation for the two completed calendar years prior to the date of Termination, in each case less applicable withholding and other taxes.
“Termination” means a termination of employment of the Executive: (a) by the Company without Cause; or (b) by the Executive for Good Reason. Notwithstanding anything to the contrary herein, a Termination shall not include termination of the employment of Executive in connection with a merger, reorganization, sale of the Company’s business, assets or similar transaction, provided that the Executive is immediately rehired on comparable terms by the Company’s successor entity. For the avoidance of doubt, a “Termination” shall not include a termination of employment of the Executive (a) by the Company for Cause; or (b) by the Executive without Good Reason.
2. EMPLOYMENT AND SCOPE.
2.1 The Company hereby employs the Executive and the Executive hereby accepts employment as Vice President – Sales, North America, on the terms and conditions more fully set forth herein. The Executive’s initial responsibilities shall include but not be limited to acting as Vice President - Sales, North America and such other duties and responsibilities that may be assigned by the Company from time to time.
2.2 The Executive will use best efforts to faithfully, diligently and efficiently perform such duties on behalf of the Company consistent with such office as may be assigned to the Executive from time to time by the Company. The Executive agrees to abide by the reasonable rules, regulations, instructions, personnel practices and policies of the Company and any changes therein which may be adopted from time to time. The Executive’s actions shall at all times be consistent with and further the interests of the Company. Under no circumstances will the Executive knowingly take any action contrary to the best interests of the Company.
3. PLACE OF WORK.
3.1 The Executive shall primarily perform the duties assigned hereunder at the Company’s office, presently located in Burlington, Massachusetts.
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3.2 The Executive shall be required to travel an average of approximately three days per week, subject to periodic review and modification by mutual agreement of the Company and the Executive.
4. COMPENSATION AND BENEFITS.
4.1 Compensation: The Executive’s initial compensation package shall consist of the following:
(a) Salary: The Executive shall receive a base salary at a rate of $175,000 in 2005, such salary to be paid in accordance with the Company’s normal payroll procedures and subject to applicable tax deductions and withholdings. The salary shall be reviewed annually in accordance with the Company’s review policy. Modification of the Executive’s salary, if any, shall be in the Company’s discretion, consistent with industry norms, Company norms, and norms of the Company’s Executive Committee (in all instances taking into account the Executive’s Stock Option grant referred to in section 4.1(c) below). Any modification is subject to the approval of the Compensation Committee and shall be notified to the Executive in writing.
(b) Bonus: The Executive shall be eligible to earn quarterly performance bonus and commission payments that shall, in 2005, equal $65,000 at plan, and shall in successive years approximate at plan twenty-seven (27%) percent of the Executive’s then-current Compensation, based upon achievement of tangible, pre-determined success measures as may be designated by the Company from time to time. The Company shall determine the success measure annually, in consultation with Executive. Any modification is subject to the approval of the Compensation Committee and shall be notified to the Executive in writing. The Company and the Executive agree to discuss in good faith the possibility of converting some the quarterly performance bonus/commission program to an annual program commencing January 1, 2006.
(c) Stock Options: Subject to the prior approval of the Compensation Committee, the Executive shall receive (i) an Incentive Stock Option for 47,845 shares of the Company’s Common Stock, vesting over 5 years, and (ii) a Non-Qualified Stock Option for 19,028 shares off the Company’s Common Stock, each at the then-current fair market value as determined by the Board of Directors. Such awards shall be governed by the Company’s 2000 Stock Option Plan and shall be conditioned upon the Executive’s execution of stock option agreements with the Company on the Company’s then-current standard form, with such modifications as necessary to provide that, immediately following a Change of Control, one half of the Executive’s then-unvested shares will immediately become vested.
4.2 Benefits: The Executive shall be eligible to receive the various benefits offered by the Company to its employees, including holidays, vacation (three (3) weeks during the first five (5) years of employment, four (4) weeks thereafter), medical, dental, disability, 401(k), and life insurance, and such other benefits as may be determined from time to time by the Company. These benefits may be modified or eliminated from time to time at the sole discretion of the Company. Where a particular benefit is subject to a formal plan (for example, medical insurance), eligibility to participate in and receive the particular benefit shall be governed solely by the applicable plan document.
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4.3 Expenses: Executive shall be entitled to reimbursement for reasonable out-of-pocket expenses incurred for the Company’s business (including travel and entertainment) in accordance with the policies, practices and procedures of the Company.
4.4 One-Time Moving Expenses: The Company will reimburse the Executive any sales commissions paid by the Executive to the Executive’s real estate broker related to the Executive’s sale of his residence in Longmeadow, Massachusetts, such reimbursement not to exceed the broker’s commission customary in Longmeadow, Massachusetts. The Company will further reimburse the Executive up to an additional $25,000 for miscellaneous closing costs, household improvements and moving costs in connection with the Executive’s purchase of a new residence within reasonable daily commuting distance of the Company’s office, provided that, in each case, such expenses are approved in advance by the Company. Any reimbursement made pursuant to this Section 4.4 shall be made to the Executive on a post-tax basis.
5. TERMINATION OF EMPLOYMENT
5.1 Employment-At-Will: The Executive acknowledges and understands that his employment with the Company is at-will and, subject to the Company’s severance obligations set forth in Section 5.2 below, can be terminated by either party for no reason or for any reason not otherwise specifically prohibited by law. Nothing in this Agreement is intended to alter the Executive’s at-will employment status or obligate the Company to continue to employ the Executive for any specific period of time, or in any specific role or geographic location.
5.2 Severance
(a) Upon a Termination of the Executive, provided that the Executive complies with Section 5.2(c) below, and subject to Section 6 below, the Executive shall receive the Severance Pay as a Lump Sum Payment.
(b) Upon a Termination of the Executive, provided that the Executive complies with Section 5.2(c) below, and subject to Section 6 below, the Company will pay its customary share of the premiums for continuation of the Executive’s health coverage under COBRA (the “Premium Payments”) for a period of six (6) months commencing on the date of Termination, unless the Executive becomes eligible for alternative coverage from or under another employer’s group plan for any portion of the aforementioned six (6) month period, in which case the Company shall have no obligation to make the Premium Payments.
(c) The receipt by the Executive of the Severance Pay and Premium Payments shall be in full and final satisfaction of the Executive’s rights and claims under this Agreement (or otherwise) and is subject to and conditioned upon (i) the Executive’s delivery of a signed nondisparagement agreement and release of known and unknown claims related to the Executive’s employment in a form satisfactory to the Company, (ii) the resignation by the Executive as an officer of the Company, and (iii) the Executive’s delivery to the Company of all property of the Company which may be in the Executive’s possession, custody or control.
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6. EMPLOYEE OBLIGATIONS AGREEMENT.
The Executive hereby ratifies and confirms each of the terms of the Employee Obligations Agreement. If the Executive is at any time found to have in any manner breached the Employee Obligations Agreement, then the Company’s duty to pay any Severance Pay to the Executive and make any Premium Payments shall terminate from the date that such breach occurred and Executive shall immediately reimburse the Company for any Severance Pay payments and Premium Payments made by the Company after the first date on which such breach occurred.
7. GENERAL
7.1 This Agreement shall be deemed to have been made in the Commonwealth of Massachusetts, shall take effect as an instrument under seal, and the validity, interpretation and performance of this Agreement shall be governed by, and construed in accordance with, the internal law of Commonwealth of Massachusetts, without giving effect to conflict of law principles.
7.2 The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. This Agreement and the Employee Obligations Agreement contain the entire agreement of the parties relating to the subject matter hereof and supersede all oral or written employment, consulting, change of control or similar agreements between the Executive, on the one hand, and the Company, on the other hand. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. This Agreement is binding upon and inures to the benefit of both parties and their respective successors and assigns, including any corporation with which or into which the Company may be merged or which may succeed to its assets or business, although the obligations of the Executive are personal and may be performed only by him.
7.3 The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
| EXECUTIVE | LEMAITRE VASCULAR, INC. | |||
| /s/ Xxxxx Xxxxx |
By: | /s/ Xxxxxx X. XxXxxxxx | ||
| Xxxxx Xxxxx | Name: | Xxxxxx X. XxXxxxxx | ||
| Title: | Chairman, President and CEO | |||
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