EXHIBIT 10.33
CONSULTING AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st day of January,
1998, between Xxxxxx X. XxXxxxx and CryoLife, Inc., a Florida corporation (the
"Company").
W I T N E S S E T H:
WHEREAS, Xx. XxXxxxx is a founder and Senior Vice President, Clinical
Research of the Company;
WHEREAS, Xx. XxXxxxx has special knowledge and expertise relating to
the Company's operations and technology;
WHEREAS, Xx. XxXxxxx desires to retire from full time employment on
January 2, 1998; and,
WHEREAS, the Company desires to engage Xx. XxXxxxx and Xx. XxXxxxx
desires to accept engagement after January 2, 1998 as a part-time consultant in
order to maintain the benefit of Xx. XxXxxxx'x special knowledge and expertise.
NOW THEREFORE, in consideration of the premises, the promises
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Duties.
(a) Engagement. The Company hereby engages Xx. XxXxxxx as an
independent consultant to assist the Company as assigned by the Company
President in (i) evaluating new ideas and concepts for services and products,
(ii) maintaining and improving relationships with regulatory and governmental
agencies, (iii) maintaining and improving professional and medical community
relationships, (iv) making presentations to professional groups and governmental
agencies, (v) providing expert advice or testimony, (vi) facilitating in any
transition activities related to Xx. XxXxxxx'x retirement from the Company's
fulltime employ, and (vii) facilitating continuation of the Company's annual
"Naugie" awards.
(b) Scope of Engagement. Xx. XxXxxxx accepts the engagement and agrees
to make himself available when called upon to provide up to 60 days per year of
consulting services to the Company throughout the Term; provided, however, that
Xx. XxXxxxx may not be required to provide more than five days of service in any
one calendar month.
(c) Liability Limitation. Company agrees not to hold Xx. XxXxxxx
responsible for any inaccuracies, errors and omissions, however caused, in the
information and advice given under this Agreement nor for loss or damage
resulting from the use of the information or
advice so given, except for any information and advice given by Xx. XxXxxxx
which is known to Xx. XxXxxxx to be false.
2. Duration. This Agreement shall commence on 3rd day of January, 1998
and, unless earlier terminated pursuant to Section 5 hereof, shall continue
until the 2nd day of January, 2001 (the "Term").
3. Remuneration.
(a) Monetary Remuneration. Xx. XxXxxxx shall be compensated for all
services rendered at the rate of $50,000 per year payable in bi-monthly
installments of $2,083.33. Any services performed in excess of 60 days per
calendar year must receive prior approval by the Company President and will be
reimbursed at a rate of $1,000.00 per day.
(b) Expense Reimbursement. Subject to such policies as may from time
to time be established by the Company, the Company shall pay or reimburse Xx.
XxXxxxx for all reasonable and necessary expenses actually incurred or paid by
Xx. XxXxxxx during the Term in the performance of Xx. XxXxxxx'x duties
hereunder, upon submission and approval of expense statements or other
supporting information in accordance with the then customary practices of the
Company. Air travel in the U.S. will be reimbursed for coach fare. Air travel
overseas will be reimbursed for business class.
(c) Other Remuneration. At the Company's December 1997 Compensation
Advisory Committee meeting, the Company accelerated the vesting of options under
Xx. XxXxxxx'x December 15, 1995 Incentive Stock Option Grant (copy attached) by
amending the vesting schedule in paragraph 2 thereof to read as follows:
Cumulative Percentage
of Option Shares
Exercise Date Exercisable
First Anniversary of Grant Date 20%
Second Anniversary of Grant Date 60%
January 1, 1998 100%
In consideration of the foregoing acceleration, Xx. XxXxxxx agrees to the
foregoing amendment and to waive his right to exercise any vested option more
than three months after January 2, 1998, his last day of employment with the
Company.
4. Independent Contractor. Xx. XxXxxxx is engaged hereunder as an
independent contractor of the Company and, accordingly, the Company shall not
withhold or be responsible for any federal or state income taxes, social
security payments or engagement
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taxes with respect to the payment of compensation to Xx. XxXxxxx hereunder. As
an independent contractor, Xx. XxXxxxx shall not have any power or authority to
bind the Company to any obligations whatsoever to third parties.
5. Termination. This Agreement may be terminated at any time by the
mutual agreement of the parties or by delivery of 30 days written notice from
either party to the other party. The provisions of Sections 4, 5, 6, 7, 8, 9, 10
and 11 shall survive any termination or expiration of this Agreement; provided,
however, that Section 8 shall not survive a termination on 30 days notice by the
Company if the Company's notice fails to identify a breach by Xx. XxXxxxx of the
terms of this Agreement as a cause for the termination.
6. Notice. Any notice required to be given under the terms of this
Agreement may be given by letter, addressed and mailed, with postage paid, to
the other party at the address set forth below its signature below or such other
address as such party shall notify the other party in writing. Notices may also
be delivered by other means.
7. Proprietary Rights Covenants of Xx. XxXxxxx.
(a) Confidential Material. "Confidential Material", when used herein,
means the confidential, proprietary information of the Company which was
received, learned, produced or discovered by Xx. XxXxxxx during his prior
employment by the Company or which is received, learned, produced or discovered
by Xx. XxXxxxx in the course of his performing his duties under this Agreement.
Xx. XxXxxxx agrees that all drawings, recordings, notes, tapes, disks,
documents, and other media and all copies thereof relating to the Confidential
Material shall be and remain the sole and exclusive property of the Company.
(b) Use Limitations. Xx. XxXxxxx agrees to utilize the Confidential
Material only for the purposes of the Company and in the manner provided herein
and not to disclose any of the Confidential Material to anyone other than
Company employees without the prior written consent of the Company's President
and then only under circumstances approved in writing by the Company.
(c) Inventions and Discoveries. Xx. XxXxxxx hereby assigns to the
Company any and all rights he may have in and to the Confidential Material and
agrees to promptly disclose all Confidential Material to the Company. Xx.
XxXxxxx agrees to execute such further documents and instruments as the Company
may reasonably request in order to further evidence the transfer contemplated
hereunder. All inventions and designs relating to the Confidential Material and
the benefit of all patents obtainable with respect thereto shall be included in
the foregoing transfer and thereby belong to Company.
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(d) Return of Information. Upon request, and in any event upon
termination or expiration of this Agreement, Xx. XxXxxxx shall promptly deliver
or destroy all Confidential Material in his possession or under his control,
without retaining any copies or excerpts thereof.
(e) Exclusions to Confidential Material. Confidential Material shall
not include information which (i) is or becomes generally available to the
public other than as a result of any improper action of Xx. XxXxxxx, (ii) is
known from a source independent of any restrictions imposed by the Company, or
becomes known to Xx. XxXxxxx from such a source, (iii) is reasonably
demonstrated to have been known to or hereafter developed by Xx. XxXxxxx
independently of any disclosure of Confidential Material by the Company or (iv)
is approved for release by the Company's publication review committee.
(f) Publication Review. Xx. XxXxxxx agrees to submit to the Company's
publications review committee any articles or writings Xx. XxXxxxx proposes to
publish relating to the Confidential Material, whether or not the Confidential
Material is identified as the Company's in the article, and to permit the
committee a reasonable period of time consistent with its general practices to
review such material and to require deletions of Confidential Material prior to
publication. The review committee shall also be entitled delay publication of
any article up to nine months for the convenience of the Company or longer, if
necessary, to protect the Company's ability to file for patent protection.
(g) Disclosure of Conflicting Activities. Xx. XxXxxxx agrees to
disclose promptly any outside activities or interests that conflict or may
conflict with the business of the Company.
8. Exclusivity. Until January 2, 2001, Xx. XxXxxxx will not, directly or
indirectly, whether as owner, partner, shareholder, consultant, agent, employee,
co-venturer or otherwise, (i) compete with the Company's business by assisting
any other company or individual in the business of developing, producing or
marketing any (A) homograft or allograft heart valves, (B) homograft vein or
connective tissue, or (C) blood fraction derived adhesives or cross linking
agents, or (ii) attempt to hire any employee or agent of the Company or any of
its affiliates, assist in such hiring by any other person, encourage any such
employee or agent to terminate his or her relationship with the Company or any
of its affiliates, or solicit or encourage any customer of the Company or any of
its affiliates to terminate its relationship with the Company or any of its
affiliates or to conduct with any other person any business or activity which
such customer conducts or could conduct with the Company or any of its
affiliates. This exclusivity provision shall apply only within the United
States, the European Common Market, Argentina or Japan. This exclusivity shall
not prohibit Xx. XxXxxxx from assisting Kanto Biomedical in producing or
marketing any of the products or services identified in subpart (i) of the first
sentence of this paragraph provided those products or services are produced or
marketed pursuant to a license granted by the Company.
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9. Rights and Remedies Upon Breach. If Xx. XxXxxxx breaches any of
provisions of Sections 7 or 8 (collectively, the "Restrictive Covenants"), the
Company shall have the following rights and remedies, each of which shall be
independent of the other and severally enforceable, and all of which shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Company under law or in equity:
(a) Specific Performance. Xx. XxXxxxx recognizes and agrees that the
violation of any of the Restrictive Covenants may not be reasonably or
adequately compensated in monetary damages and that, in addition to any other
relief to which the Company may be entitled by reason of such violation, the
Company shall also be entitled to permanent and temporary injunctive and
equitable relief and, pending determination of any dispute with respect to such
violation, no bond or security shall be required in connection therewith.
Without limiting the generality of the foregoing, Xx. XxXxxxx specifically
acknowledges that a showing by the Company of any breach of any Restrictive
Covenant shall constitute, for the purposes of all judicial determinations on
the issue of injunctive relief, conclusive proof of all of the elements
necessary to entitle the Company to interim and permanent injunctive relief
against Xx. XxXxxxx with respect to such breach. Xx. XxXxxxx agrees that the
Restrictive Covenants shall be enforceable by a decree of specific performance.
(b) Severability of Covenants. If any of the Restrictive Covenants, or
any part thereof, or any of the other provisions of this Section 7, 8 or 9 is
held by a court of competent jurisdiction or any other governmental authority to
be invalid, void, unenforceable or against public policy for any reason, the
remainder of the Restrictive Covenants or such other provisions shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and such court or authority shall be empowered to substitute, to the extent
enforceable, provisions similar thereto or other provisions so as to provide to
the Company to the fullest extent permitted by applicable law, the benefits
intended by such provisions.
10. Lock-Up Agreement. Xx. XxXxxxx has been advised that the Company
currently proposes to conduct an underwritten offering of securities during the
first half of 1998. Xx. XxXxxxx agrees that he will not, directly or indirectly,
without the prior written consent of the Company, from the date hereof through
May 15, 1998 (the "Lock-Up Period"), offer, sell, contract to sell, pledge,
grant any option for the sale of, or otherwise dispose or cause the disposition
of, any shares of Company Common Stock, or any securities convertible into or
exchangeable or exercisable for any shares of Company Common Stock, owned by the
undersigned, whether owned on the date hereof or hereafter acquired (other than
the disposal or disposition of any derivative securities upon the exercise of
stock options). In addition, Xx. XxXxxxx agrees to enter into any lock-up
arrangement required by the underwriters of any public offering of securities of
the Company conducted during calendar 1998, for a period of up to 120 days from
the date of the prospectus utilized in connection with such offering, or for
such shorter period as shall be required of the officers and directors of the
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Company. The Company agrees to use its reasonable best efforts to enable Xx.
XxXxxxx to sell up to 24,000 shares of Company Common Stock during the Lock-Up
Period, either on the open market or through participation in an underwritten
public offering of the Company's Common Stock, to the extent that the
underwriters thereof allow the participation of selling shareholders and do not
object to the inclusion of Xx. XxXxxxx.
11. Miscellaneous. This Agreement, and Xx. XxXxxxx'x rights and
obligations hereunder, may not be assigned by Xx. XxXxxxx. If any provision of
this Agreement is held invalid or otherwise unenforceable, the enforceability of
the remaining provisions shall not be impaired thereby. This Agreement shall be
construed in accordance with the laws of the State of Georgia and contains the
entire agreement between the parties with respect to consulting services and
supersedes all prior contracts and other agreements, written or oral, with
respect thereto; provided, however, that this Agreement shall be in addition to
and shall not supersede any agreement, if any exists, between the parties
respecting confidentiality, invention rights, proprietary rights,
nonsolicitation or noncompetition. This Agreement may be changed only by an
agreement in writing. The waiver by one party of a breach of any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any subsequent breach of the same or any other provision by the other party.
If any action at law or in equity is necessary to enforce the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees,
costs, and expenses, in addition to any other relief to which such prevailing
party may be entitled.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first hereinabove set forth.
CryoLife, Inc. Xxxxxx X. XxXxxxx, Ph.D.
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxx X. XxXxxxx
__________________________ __________________________________
Xxxxxx X. Xxxxxxxx Xxxxxx X. XxXxxxx, Ph.D.
Chairman, President and CEO 0000 Xxxxx Xxxx Xxxxx
0000 Xxxxxxx Xxxxxxxxx, XX Xxxxxxxx, Xxxxxxx 00000-0000
Xxxxxxxx, Xxxxxxx 00000
(000) 000-0000
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