EXHIBIT 10.3
XXXXXXX X. XXXXX
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "AGREEMENT") is
made effective as of February 13, 2009 (the "EFFECTIVE DATE"), by and between
MAKO Surgical Corp., a Delaware corporation (the "COMPANY"), and Xxxxxxx X.
Xxxxx (the "EXECUTIVE").
WHEREAS, Executive is and has been employed by Company and is currently
the Company's Senior Vice President, General Counsel and Secretary;
WHEREAS, Company desires to continue to employ Executive and Executive
desires to continue to be employed by Company on the terms contained herein;
WHEREAS, Executive and Company entered into that certain Employment
Agreement dated as of January 1, 2005, for which the current term was effective
as of January 1, 2009 (the "ORIGINAL EFFECTIVE DATE"), as amended by that
certain Amendment to Employment Agreement dated as of February 5, 2007
(collectively, the "PRIOR Agreement"); and
WHEREAS, Company and Executive desire to amend and restate the Prior
Agreement in its entirety as of the Effective Date by entering into this
Agreement that will fully supersede the Prior Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereby
agree as follows:
1. Employment. Subject to the termination provisions contained in
Sections 4 and 5 hereof, the term of this Agreement shall extend from the
Effective Date until the first anniversary of the Original Effective Date (the
period during which the Executive is employed hereunder being hereinafter
referred to as the "TERM"). If either the Company or Executive does not wish to
renew this Agreement when it expires at the end of the current term hereof, or
any subsequent renewal term, as hereinafter provided, or if either the Company
or Executive wishes to renew this Agreement on different terms than those
contained herein, it or he shall give written notice in accordance with Section
10.4 below of such intent to the other party at least ninety (90) days prior to
the expiration date. In the absence of such notice, this Agreement shall be
renewed on the same terms and conditions contained herein for a term of one (1)
year from the date of expiration. The parties expressly agree that designation
of a term and renewal provisions in this Agreement does not in any way limit the
right of the parties to terminate this Agreement at any time as hereinafter
provided. Reference herein to the Term of this Agreement shall refer both to the
current term and any successive term as the context requires.
2. Duties. The Executive, in his capacity as Senior Vice President,
General Counsel and Secretary, shall faithfully perform for the Company the
duties of said office, a listing of which is on file with the Company, and shall
perform such other duties consistent with his position of an executive,
managerial or administrative nature as shall be specified and designated from
time to time by the Company's board of directors or similar governing body of
the Company (the "BOARD") (including the performance of services for, and
serving on the Board of Directors of, any subsidiary or affiliate of the Company
without any additional compensation). The Executive shall devote substantially
all of the Executive's business time and effort to the performance of the
Executive's duties hereunder, provided that in no event shall this sentence
prohibit the Executive from performing personal, investment and charitable
activities and any other activities, including serving on the board of directors
of other companies, so long as such activities do not materially and adversely
interfere with the Executive's duties for the Company. The Board may delegate
its authority to take any action under this Agreement to the Compensation
Committee of the Board (the "COMPENSATION COMMITTEE").
3. Compensation.
3.1 Salary. The Company shall pay the Executive during the Term an
annual salary (the "ANNUAL SALARY"), payable consistent with the Company's
payroll schedule and subject to regular deductions and withholdings as required
by law. The Annual Salary may be increased annually by an amount as may be
approved by the Board or the Compensation Committee, and, upon such increase,
the increased amount shall thereafter be deemed to be the Annual Salary for
purposes of this Agreement.
3.2 Performance Bonus. The Executive's performance cash bonus for any
year under this Agreement shall be as determined by the Board and calculated
based on Executive's performance (as an individual and as part of the Company).
The decision about whether the necessary criteria have been met for a
performance cash bonus and whether to award such performance bonus shall be in
the sole and absolute discretion of the Board and is final.
3.3 Benefits - In General. The Executive shall be permitted during the
Term to participate in any group life, hospitalization or disability insurance
plans, health programs, pension and profit sharing plans and similar benefits
that may be available to other senior executives of the Company generally, on
the same terms as may be applicable to such other executives, in each case to
the extent that the Executive is eligible under the terms of such plans or
programs.
3.4 Vacation. During the Term, the Executive shall be entitled to paid
time off (PTO) as described in the Company's Human Resources Policy Manual, in
effect from time to time.
3.5 Expenses. Subject to approval by the Company's Chief Executive
Officer, the Company shall pay or reimburse the Executive for all ordinary and
reasonable out-of-pocket expenses and reasonable expenses relating to the
Executive's professional continuing education requirements (if applicable) and
professional licensing fees.
3.6 Equity Awards in the Event of a Change in Control. In the event of
a Change in Control (as defined in Section 6.2), all equity awards 'held by
Executive that vest based on time shall become vested and all other terms of
such awards shall be governed by the plans and programs and the agreements and
other documents pursuant to which such awards were granted.
4. Termination Due to Death or Disability.
4.1 Death. In the event of Executive's death and the termination of
Executive's employment, the Term will terminate, all obligations of the Company
and Executive under Sections 1 through 3 will immediately cease except for
obligations which expressly continue after death, and the Company will pay
Executive's beneficiary or estate, and Executive's beneficiary or estate will be
entitled to receive, the following:
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(i) Executive's Compensation Accrued at Termination;
(ii) All equity awards held by the Executive at termination that
vest based on time shall become vested and all other terms of
such awards shall be governed by the plans and programs and
the agreements and other documents pursuant to which such
awards were granted; and
(iii) All other rights under any other compensatory or benefit plan
shall be governed by such plan. In addition, at Company
expense, Executive's spouse and dependent children shall be
entitled to continuation of health insurance coverage under
any applicable law for a period of six months.
4.2 Disability. The Company may terminate the employment of Executive
hereunder due to the Disability (as defined in Section 6.4) of Executive. Upon
termination of employment, the Term will terminate, all obligations of the
Company and Executive under Sections 1 through 3 will immediately cease except
for obligations which expressly continue after termination of employment due to
Disability, and the Company will pay Executive, and Executive will be entitled
to receive, the following:
(i) Executive's Compensation Accrued at Termination;
(ii) Any earned but unused paid time off pursuant to Section 3.4
hereof;
(iii) All equity awards held by Executive at termination that vest
based on time shall become vested and all other terms of such
awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such awards
were granted;
(iv) Disability benefits shall be payable in accordance with the
Company's plans, programs and policies; and
(v) All other rights under any other compensatory or benefit plan
shall be governed by such plan. In addition, at Company
expense, Executive and his spouse and dependent children shall
be entitled to continuation of health insurance coverage under
any applicable law for a period of six months.
5. Termination of Employment For Reasons Other Than Death or
Disability.
5.1 Termination by the Company for Cause. The Company may terminate the
employment of Executive hereunder for Cause (as defined in Section 6.1) at any
time. At the time Executive's employment is terminated for Cause, the Term will
terminate, all obligations of the Company and Executive under Sections 1 through
3 will immediately cease, and the Company will pay Executive, and Executive will
be entitled to receive, the following:
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(i) Executive's Compensation Accrued at Termination;
(ii) The vesting and exercisability of stock options, restricted
stock, RSUs and other equity awards held by Executive at
termination and all other terms of such awards shall be
governed by the plans and programs and the agreements and
other documents pursuant to which such equity awards were
granted; and
(iii) All other rights under any other compensatory or benefit plan
shall be governed by such plan. In addition, at Executive's
expense, Executive and his spouse and dependent children shall
be entitled to continuation of health insurance coverage under
any applicable law.
5.2 Termination by Executive Other Than For Good Reason. Executive may
terminate his employment hereunder voluntarily for reasons other than Good
Reason (as defined in Section 6.5) at any time upon at least sixty (60) days'
advance written notice to the Company. An election by Executive not to extend
the Term pursuant to Section 1 hereof shall be deemed to be a termination of
employment by Executive for reasons other than Good Reason at the date of
expiration of the Term. At the time Executive's employment is terminated by
Executive other than for Good Reason, the Term will terminate, all obligations
of the Company and Executive under Sections 1 through 3 will immediately cease,
and the Company will pay Executive, and Executive will be entitled to the same
compensation and rights specified in Section 5.1.
5.3 Termination by the Company Without Cause. The Company may terminate
the employment of Executive hereunder without Cause upon at least 30 days'
written notice to Executive at any time during the Term. An election by the
Company not to extend the Term pursuant to Section 2 hereof shall be deemed to
be a termination of employment by the Company Without Cause at the date of
expiration of the Term. At the time Executive's employment is terminated by the
Company (i.e., at the expiration of such notice period), the Term will
terminate, all remaining obligations of the Company and Executive under Sections
1 through 3 will immediately cease (except as expressly provided below), and the
Company will pay Executive, and Executive will be entitled to receive, the
following:
(i) Executive's Compensation Accrued at Termination;
(ii) Any earned but unused paid time off pursuant to Section 3.4
hereof;
(iii) A single severance payment in cash in an aggregate amount
equal to nine (9) months of the Executive's Annual Salary;
provided, however, that if such termination shall occur in
anticipation of a Change in Control (as defined in Section
6.2) or on or within nine (9) months after a Change in
Control, such severance payment shall be equal to eighteen
(18) months of the Executive's Annual Salary;
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(iv) All equity awards held by Executive at termination that vest
based on time shall become vested and all other terms of such
equity awards shall be governed by the plans and programs and
the agreements and other documents pursuant to which such
awards were granted; and
(v) All other rights under any other compensatory or benefit plan
shall be governed by such plan. In addition, at Company's
expense, Executive and his spouse and dependent children shall
be entitled to continuation of health insurance coverage
(i.e., medical, dental and vision) under the Company's group
health plan(s) in which the Executive was participating on the
date of termination, or if such plan(s) have been terminated,
in the plan(s) in which senior executives of the Company
participate, for a period of nine (9) months after the date
Executive's employment terminates.
Payments and benefits under this Section 5.3 are subject to Section 5.6.
5.4 Termination by Executive for Good Reason. Executive may terminate
his employment hereunder for Good Reason by providing written notice to the
Company. At the time Executive's employment is terminated by Executive for Good
Reason, the Term will terminate, all obligations of the Company and Executive
under Sections 1 through 3 will immediately cease (except as expressly provided
below), and the Company will pay Executive, and Executive will be entitled to
receive, the same compensation and rights specified in Section 5.3.
If any payment or benefit under this Section 5.4 is based on Annual Salary at
the time of Executive's termination and if a reduction in such Annual Salary was
the basis for Executive's termination for Good Reason, then the Annual Salary in
effect before such reduction shall be used to calculate payments or benefits
under this Section 5.4.
5.6 Limitations Under Code Section 409A. Anything in this Agreement to
the contrary notwithstanding, if (A) on the date of termination of Executive's
employment with the Company or a subsidiary, any of the Company's stock is
publicly traded on an established securities market or otherwise (within the
meaning of Section 409A(a)(2)(B)(i) of the Internal Revenue Code, as amended
(the "CODE")), (B) if Executive is determined to be a "specified employee"
within the meaning of Section 409A(a)(2)(B) of the Code, (C) the payments exceed
the amounts permitted to be paid pursuant to Treasury Regulations section
1.409A-1(b)(9)(iii) and (D) such delay is required to avoid the imposition of
the tax set forth in Section 409A(a)(1) of the Code, as a result of such
termination, the Executive would receive any payment that, absent the
application of this Section 5.6, would be subject to interest and additional tax
imposed pursuant to Section 409A(a) of the Code as a result of the application
of Section 409A(a)(2)(B)(i) of the Code, then no such payment shall be payable
prior to the date that is the earliest of (1) six (6) months after the
Executive's termination date, (2) the Executive's death or (3) such other date
as will cause such payment not to be subject to such interest and additional tax
(with a catch-up payment equal to the sum of all amounts that have been delayed
to be made as of the date of the initial payment).
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It is the intention of the parties that payments or benefits payable under this
Agreement not be subject to the additional tax imposed pursuant to Section 409A
of the Code. To the extent such potential payments or benefits could become
subject to such Section 409A, the parties shall cooperate to amend this
Agreement with the goal of giving the Executive the economic benefits described
herein in a manner that does not result in such tax being imposed.
6. Definitions Relating to Termination Events.
6.1 "Cause". For purposes of this Agreement, "Cause" shall mean
Executive's:
(i) willful, knowing or grossly negligent and continued failure or
refusal to substantially perform Executive's duties hereunder
or to follow the reasonable directions of the Company's Chief
Executive Officer (other than such failure resulting from
Executive's incapacity due to physical or mental illness),
which failure is not remedied within 30 calendar days after
written demand for substantial performance is delivered by the
Board which specifically identifies the manner in which the
Company believes that Executive has not substantially
performed Executive's duties;
(ii) conviction for commission of, or a plea of guilty or nolo
contendere to, a felony;
(iii) material and willful misfeasance or malfeasance in connection
with the performance of his duties under this Agreement;
(iv) willful commission of any act of theft, fraud, embezzlement or
misappropriation against the Company or its subsidiaries or
affiliates;
(v) willful or material breach or violation of any law, rule,
regulation (other than traffic violations or similar
offenses);
(vi) breach of any fiduciary duty to the Company or any subsidiary
for which the Executive is required to perform services under
this Agreement;
(vii) material breach or default of any provision of this Agreement
that has continued for thirty (30) days following notice of
such breach or default from the Board;
(viii) abuse of drugs or alcohol to the detriment of the Company; or
(ix) not maintaining his primary residence in the South Florida
region.
Executive shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to Executive a copy of the resolution approving
such termination duly adopted by the affirmative vote of not less than
two-thirds (2/3) of the Board at a meeting of the Board (after five (5) days'
advance notice of such meeting has been provided to Executive and Executive is
given the opportunity to speak at such meeting).
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6.2 "Change in Control". For purposes of this Agreement, a "Change in
Control" means the following:
(i) A transaction or series of transactions (other than an
offering of the Company's stock to the general public through
a registration statement filed with the Securities and
Exchange Commission) whereby any "person" or related "group"
of "persons" (as such terms are used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT")) (other than the Company, any of its
subsidiaries, an employee benefit plan maintained by the
Company or any of its subsidiaries or a "person" that, prior
to such transaction, directly or indirectly controls, is
controlled by, or is under common control with, the Company)
directly or indirectly acquires beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company and immediately after such
acquisition possesses more than 50% of the total combined
voting power of the Company's securities outstanding
immediately after such acquisition; or
(ii) During any period of two consecutive years, individuals who,
at the beginning of such period, constitute the Board together
with any new director(s) (other than a director designated by
a person who shall have entered into an agreement with the
Company to effect a transaction described in Section 6.2(i)
hereof or Section 6.2(iii) hereof) whose election by the Board
or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the
beginning of the two-year period or whose election or
nomination for election was previously so approved, cease for
any reason to constitute a majority thereof; or
(iii) The consummation by the Company (whether directly involving
the Company or indirectly involving the Company through one or
more intermediaries) of (x) a merger, consolidation,
reorganization, or business combination or (y) a sale or other
disposition of all or substantially all of the Company's
assets in any single transaction or series of related
transactions or (z) the acquisition of assets or stock of
another entity, in each case other than a transaction:
(A) Which results in the Company's voting securities
outstanding immediately before the transaction
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the Company or the person that, as a
result of the transaction, controls, directly or
indirectly, the Company or owns, directly or
indirectly, all or substantially all of the Company's
assets or otherwise succeeds to the business of the
Company (the Company or such person, the "SUCCESSOR
ENTITY")) directly or indirectly, at least a majority
of the combined voting power of the Successor
Entity's outstanding voting securities immediately
after the transaction; and
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(B) After which no person or group (as such terms are
used in Sections 13(d) and 14(d)(2) of the Exchange
Act) beneficially owns (within the meaning of Rule
13d-3 under the Exchange Act) voting securities
representing 50% or more of the combined voting power
of the Successor Entity; provided, however, that no
person or group shall be treated for purposes of this
Section 6.2(iii)(B) as beneficially owning 50% or
more of combined voting power of the Successor Entity
solely as a result of the voting power held in the
Company prior to the consummation of the transaction;
or
(iv) The Company's stockholders approve a liquidation or
dissolution of the Company and all material contingencies to
such liquidation or dissolution have been satisfied or waived.
6.3 "Compensation Accrued at Termination". For purposes of this
Agreement, "Compensation Accrued at Termination" means the following:
(i) The unpaid portion of Annual Salary at the rate payable, in
accordance with Section 3.1 hereof, at the date of Executive's
termination of employment, pro rated through such date of
termination, payable in accordance with the Company's regular
pay schedule;
(ii) Except as otherwise provided in this Agreement, all earned and
unpaid and/or vested, non-forfeitable amounts owing or accrued
at the date of Executive's termination of employment under any
compensation and benefit plans, programs, and arrangements set
forth or referred to in Sections 3.2-3.3 hereof (including any
earned and vested performance bonus) in which Executive
theretofore participated, payable in accordance with the terms
and conditions of the plans, programs and arrangements (and
agreements and documents thereunder) pursuant to which such
compensation and benefits were granted or accrued; and
(iii) Reasonable expenses incurred by Executive prior to Executive's
termination of employment, to be reimbursed to Executive, as
authorized under Section 3.5, in accordance the Company's
reimbursement policies as in effect at the date of such
termination.
6.4 "Disability". For purposes of this Agreement, "Disability" means
the Executive is unable due to a physical or mental condition to perform the
essential functions of his position, with or without reasonable accommodation,
for a period of ninety (90) days during any six (6) month period, but in no
event shall the provisions of this Section 6.4 be interpreted and applied
inconsistently with the Americans with Disabilities Act, the Family and Medical
Leave Act, Section 409A of the Code and other applicable law.
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6.5 "Good Reason". For purposes of this Agreement, "Good Reason" shall
mean, without Executive's express written consent, the occurrence of any of the
following circumstances unless, if correctable, such circumstances are fully
corrected within 30 days of the notice of termination given in respect thereof:
(i) The assignment to Executive of duties materially
inconsistent with Executive's position and
status hereunder, or an alteration, materially adverse to
Executive, in the nature of Executive's duties,
responsibilities, and authorities, Executive's positions or
the conditions of Executive's employment from those
specified in Section 2 or otherwise hereunder (other than
inadvertent actions which are promptly remedied); except the
foregoing shall not constitute Good Reason if occurring in
connection with the termination of Executive's employment
for Cause, Disability, as a result of Executive's death, or
as a result of action by or with the consent of Executive;
(ii) a decrease in Executive's Annual Salary not equally applied
(on a percentage basis) to all employees subject to an
employment agreement with the Company;
(iii) the relocation of the Company's Fort Lauderdale, Florida
office to a location that is more than one hundred (100)
miles from its current location; or
(iv) a breach by the Company with respect to (1) its compensation
obligations under this Agreement that has not been cured not
been cured after thirty (30) days' written notice by the
Executive or (2) its notice of non-renewal of the current
term or any successive term pursuant to Sections 1 and 10.4
hereof.
7. Discoveries and Works; Confidentiality; Non-Competition and
Non-Solicitation.
7.1 Discoveries and Works. The Executive understands and agrees that
any and all Confidential Information (as hereinafter defined) of the Company
which he has access to, uses or creates during his employment with the Company
is and shall at all times remain the sole and exclusive property of the Company,
and the Executive further agrees to assign to the Company any right, title or
interest he may have in such Confidential Information to the Company. The
Executive also agrees that, if he is asked by the Company (at its expense), he
will do all things and sign all necessary documents reasonably necessary in the
opinion of the Company to eliminate any ambiguity as to the right of the Company
in such Confidential Information including but not limited to providing his full
cooperation to the Company in the event of any litigation to protect, establish
or obtain such rights of the Company.
The Executive understands that this Section 7.1 does not waive or transfer his
rights to any invention for which no equipment, supplies, facility or trade
secret or Confidential Information of the Company was used and which was
developed entirely on his own time, unless the invention relates to the business
of the Company, or to the Company's actual demonstratively anticipated research
or development, or the invention results from any work that he performed for the
Company during the Term.
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The Executive hereby assigns and transfers to the Company, its successors, legal
representatives and assigns, his entire right, title, and interest in and to any
and all present and future works of authorship, inventions, know-how,
confidential information, proprietary information, or trade secrets resulting
from work done by him on behalf of the Company (collectively, the "INTELLECTUAL
PROPERTY"). The Executive agrees to waive all moral rights relating to the
Intellectual Property developed or produced, including without limitation any
and all rights of identification of authorship, any and all rights of approval,
restriction or limitation on use or subsequent modifications and any and all
rights to prevent any changes prejudicial to his honor or reputation. The
Executive further agrees to provide all assistance reasonably requested by the
Company in the establishment, preservation and enforcement of its rights in the
Intellectual Property, such assistance to be provided at the Company's expense,
but without any additional compensation to the Executive.
7.2 Confidential Information. The Executive acknowledges that, during
the course of his employment with the Company, the Executive may receive special
training and/or may be given access to or may become acquainted with
Confidential Information (as hereinafter defined) of the Company. As used in
this Section 7.2, "Confidential Information" of the Company means all trade
practices, business plans, price lists, supplier lists, customer lists,
marketing plans, financial information, software and all other compilations of
information which relate to the business of the Company, or to any of its
subsidiaries, and which have not been disclosed by the Company to the public, or
which are not otherwise generally available to the public.
The Executive acknowledges that the Confidential Information of the Company, as
such may exist from time to time, are valuable, confidential, special and unique
assets of the Company and its subsidiaries, expensive to produce and maintain
and essential for the profitable operation of their respective businesses. The
Executive agrees that, during the course of his employment with the Company, or
at any time thereafter, he shall not, directly or indirectly, communicate,
disclose or divulge to any Person (as such term is hereinafter defined), or use
for his benefit or the benefit of any Person, in any manner, any Confidential
Information of the Company or its subsidiaries acquired during his employment
with the Company or any other confidential information concerning the conduct
and details of the businesses of the Company and its subsidiaries, except as
required in the course of his employment with the Company or as otherwise may be
required by law. For purposes if this Agreement, "Person" shall mean any
individual, partnership, corporation, trust, unincorporated association, joint
venture, limited liability company or other entity or any government,
governmental agency or political subdivision.
All documents relating to the businesses of the Company and its affiliates
including, without limitation, Confidential Information of the Company, whether
prepared by the Executive or otherwise coming into the Executive's possession,
are the exclusive property of the Company and such respective subsidiaries, and
must not be removed from the premises of the Company, except as required in the
course of the Executive's employment with the Company. The Executive shall
return all such documents (including any copies thereof) to the Company when the
Executive ceases to be employed by the Company or upon the earlier request of
the Company or the Board.
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7.3 Noncompetition; Non-Solicitation. During the Term of this Agreement
(including any extensions thereof) and for a period of one (1) year following
the termination of the Executive's employment under this Agreement for any
reason, which period shall be extended to eighteen (18) months if such
termination occurs in anticipation of a Change in Control (as defined in Section
6.2) or on or within eighteen (18) months after a Change in Control, the
Executive shall not, except with the Company's express prior written consent,
directly or indirectly, in any capacity, for the benefit of any entity or person
(including the Executive):
(i) Become employed by, own, operate, manage, direct, invest in
(except through a mutual fund or ownership of less than one
percent (1%) of the securities of a public company in
competition with the Business), or otherwise, directly or
indirectly, engage in, or be employed by, any entity or person
which competes with the Business (as hereinafter defined)
within the Territory. For purposes of this Agreement,
"Business" shall mean an image guided surgical device and/or
software used in combination with any surgical robotic device
and/or software in the field of orthopedics. For purposes of
this Agreement, "Territory" shall mean the United States of
America.
(ii) Divert or take away any customer or client of the Company, or
any of its subsidiaries, or solicit, service or promote a
competing service that competes with the Business to any
customer, client or employee of the Company, its subsidiaries
or any of its respective businesses.
(iii) Solicit or hire any employee of the Company, or any of its
subsidiaries.
7.4 Cooperation With Regard to Litigation. Executive agrees to
cooperate with the Company, during the Term and thereafter (including following
Executive's termination of employment for any reason), by making himself
available to testify on behalf of the Company or any subsidiary or affiliate of
the Company, in any action, suit, or proceeding, whether civil, criminal,
administrative or investigative, and to assist the Company, or any subsidiary or
affiliate of the Company, in any such action, suit or proceeding, by providing
information and meeting and consulting with the Board or its representatives or
counsel, or representatives or counsel to the Company, or any subsidiary or
affiliate of the Company, as may be reasonably requested and after taking into
account Executive's post-termination responsibilities and obligations. The
Company agrees to reimburse Executive for all reasonable expenses actually
incurred in connection with his provision of testimony or assistance and if such
cooperation is provided more than one (1) year after Executive's termination of
employment, Executive shall be paid a reasonable per diem fee.
7.5 Non-Disparagement. Executive shall not, at any time during the Term
and thereafter make statements or representations, or otherwise communicate,
directly or indirectly, in writing, orally, or otherwise, or take any action
which may, directly or indirectly, disparage or be damaging to the Company, its
subsidiaries or affiliates or their respective officers, directors, employees,
advisors, businesses or reputations, nor shall members of the Board of Directors
or Executive's successor in office, or other executive officers of the Company,
make any such statements or representations regarding Executive. Notwithstanding
the foregoing, nothing in this Agreement shall preclude Executive or his
successor or members of the Board of Directors or other executive officers of
the Company from making truthful statements that are required by applicable law,
regulation or legal process.
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7.6 Release of Employment Claims. Executive agrees, as a condition to
receipt of any termination payments and benefits provided for in Sections 4 and
5 herein (other than Compensation Accrued at Termination), that he will execute
a general release in substantially the form attached hereto as Exhibit A.
7.7 Survival. The provisions of this Section 7 shall survive the
termination of the Term and any termination or expiration of this Agreement.
7.8 Remedies. Executive agrees that any breach of the terms of this
Section 7 would result in irreparable injury and damage to the Company for which
the Company would have no adequate remedy at law; Executive therefore also
agrees that in the event of said breach or any threat of breach and
notwithstanding Section 9 the Company shall be entitled to an immediate
injunction and restraining order from a court of competent jurisdiction to
prevent such breach and/or threatened breach and/or continued breach by
Executive and/or any and all persons and/or entities acting for and/or with
Executive, without the necessity of posting any bond, but if a bond is
nonetheless required by the court entertaining the motion for the injunction,
the parties to this Agreement agree that a bond in the amount of one thousand
dollars ($1,000.00) is appropriate. The existence of any claim or cause of
action that the Executive or any such other person or entity may have against
the Company shall not constitute a defense or bar to the enforcement of any
provision under this Section 7. The availability of injunctive relief shall be
in addition to any other remedies to which the Company may be entitled at law or
in equity, but remedies other than injunctive relief may only be pursued in an
arbitration brought in accordance with Section 9.
8. Reliance. The Executive acknowledges that his compliance with the
provisions of Sections 7.2 and 7.3 of this Agreement (hereinafter referred to as
the "RESTRICTIVE COVENANTS") is a material part of the consideration bargained
for by the Company under this Agreement. The Executive agrees that such
covenants are reasonable as to scope and duration and agrees to be bound by such
Restrictive Covenants to the maximum extent permitted by laws, it being the
intent and spirit of the parties to this Agreement that the Restrictive
Covenants hereof shall be enforceable. If the Restrictive Covenants shall for
any reason be held to be excessively broad as to duration, geographic scope,
property, subject or similar factor, then the court making such determination
shall have the power to reduce or limit such duration, geographic scope,
property, subject or similar factor so as to be enforceable to the maximum
extent compatible with applicable law, and the Restrictive Covenants shall then
be enforceable in their reduced or limited form.
9. Governing Law; Disputes; Arbitration.
9.1 Governing Law. This Agreement is governed by and is to be
construed, administered, and enforced in accordance with the laws of the
Florida, without regard to conflicts of law principles. If under the governing
law, any portion of this Agreement is at any time deemed to be in conflict with
any applicable statute, rule, regulation, ordinance, or other principle of law,
such portion shall be deemed to be modified or altered to the extent necessary
to conform thereto or, if that is not possible, to be omitted from this
Agreement. The invalidity of any such portion shall not affect the force,
effect, and validity of the remaining portion hereof. If any court determines
that any provision of Section 9 is unenforceable because of the duration or
geographic scope of such provision, it is the parties' intent that such court
shall have the power to modify the duration or geographic scope of such
provision, as the case may be, to the extent necessary to render the provision
enforceable and, in its modified form, such provision shall be enforced.
12
9.2 Arbitration. Any dispute or controversy arising under or relating
to Sections 1 through 6 of this Agreement shall be settled exclusively by
arbitration in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association in effect at the
time of submission to arbitration, except the parties agree the matter shall be
handled by a single arbitrator. The award rendered in any arbitration proceeding
under this Section shall be final and binding. Judgment may be entered on the
arbitrators' award in any court having jurisdiction. Any demand for arbitration
must be made and filed within one hundred eighty days (180) days after the date
the requesting party knew or reasonably should have known of the event giving
rise to the controversy or claim. Any claim or controversy not submitted to
arbitration in accordance with this Section 9 shall be considered waived, and,
therefore, no arbitration panel or tribunal or court shall have the power to
rule or make any award on such claim or controversy. The prevailing party in any
arbitration proceeding pursuant to this Section 9 shall be entitled to recover
reasonable expenses, including attorney's fees and costs.
10. Miscellaneous.
10.1 Integration. This Agreement cancels and supersedes any and all
prior agreements and understandings between the parties hereto with respect to
the employment of Executive by the Company, any parent or predecessor company,
and the Company's subsidiaries during the Term, but excluding existing contracts
relating to compensation under executive compensation and employee benefit plans
of the Company and its subsidiaries. This Agreement constitutes the entire
agreement among the parties with respect to the matters herein provided, and no
modification or waiver of any provision hereof shall be effective unless in
writing and signed by the parties hereto. Executive shall not be entitled to any
payment or benefit under this Agreement that duplicates a payment or benefit
received or receivable by Executive under such prior agreements and
understandings or under any benefit or compensation plan of the Company.
10.2 Successors and Assigns. This Agreement shall be assignable by the
Company, in its sole discretion:
(i) upon a sale or acquisition of the Company; or
(ii) to any affiliate of the Company,
without the Executive's consent and upon such assignment, shall inure to the
benefit of, and be binding upon, both the Executive and person or entity
purchasing such assets, business or goodwill, or surviving such merger or
resulting from such consolidation, or the successor company, as the case may be,
in the same manner and to the same extent as though such other person or entity
or the successor company were the Company. Neither this Agreement nor the rights
or obligations hereunder of the parties hereto shall be transferable or
assignable by Executive, except in accordance with the laws of descent and
distribution or as specified in Section 10.3. Notwithstanding the foregoing,
this Agreement shall be binding upon and shall inure to the benefit of the
parties to this Agreement and their respective personal representatives, heirs,
successors and assigns.
13
10.3 Beneficiaries. Executive shall be entitled to designate (and
change, to the extent permitted under applicable law) a beneficiary or
beneficiaries to receive any compensation or benefits provided hereunder
following Executive's death.
10.4 Notices. Whenever under this Agreement it becomes necessary to
give notice, such notice shall be in writing, signed by the party or parties
giving or making the same, and shall be served on the person or persons for whom
it is intended or who should be advised or notified, by Federal Express or other
similar overnight service or by certified or registered mail, return receipt
requested, postage prepaid and addressed to such party at the address set forth
below or at such other address as may be designated by such party by like
notice:
If to the Company:
MAKO Surgical Corp.
Attn: Chief Financial Officer
0000 Xxxxx Xxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
If to Executive:
Xxxxxxx X. Xxxxx
-------------------------------
-------------------------------
-------------------------------
If the parties by mutual agreement supply each other with fax numbers for the
purposes of providing notice by facsimile, such notice shall also be proper
notice under this Agreement. In the case of Federal Express or other similar
overnight service, such notice or advice shall be effective when sent, and, in
the cases of certified or registered mail, shall be effective two days after
deposit into the mails by delivery to the U.S. Post Office.
10.5 Reformation. The invalidity of any portion of this Agreement shall
not be deemed to render the remainder of this Agreement invalid.
10.6 Headings. The headings of this Agreement are for convenience of
reference only and do not constitute a part hereof.
10.7 No General Waivers. The failure of any party at any time to
require performance by any other party of any provision hereof or to resort to
any remedy provided herein or at law or in equity shall in no way affect the
right of such party to require such performance or to resort to such remedy at
any time thereafter, nor shall the waiver by any party of a breach of any of the
provisions hereof be deemed to be a waiver of any subsequent breach of such
provisions. No such waiver shall be effective unless in writing and signed by
the party against whom such waiver is sought to be enforced.
14
10.8 Withholding. All payments to be made to Executive under this
Agreement, including under Sections 4 and 5, or otherwise by the Company, will
be subject to withholding to satisfy required withholding taxes and other
required deductions.
10.9 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10.10 Due Authority and Execution. The execution, delivery and
performance of this Agreement have been duly authorized by the Company and this
Agreement represents the valid, legal and binding obligation of the Company,
enforceable against the Company according to its terms.
10.11 Representations of Executive. Executive represents and warrants
to the Company that he has the legal right to enter into this Agreement and to
perform all of the obligations on his part to be performed hereunder in
accordance with its terms and that he is not a party to any agreement or
understanding, written or oral, which prevents him from entering into this
Agreement or performing all of his obligations hereunder. In the event of a
breach of such representation or warranty on Executive's part or if there is any
other legal impediment which prevents him from entering into this Agreement or
performing all of his obligations hereunder, the Company shall have the right to
terminate this Agreement forthwith in accordance with the same notice and
hearing procedures specified above in respect of a termination by the Company
for Cause pursuant to Section 5.1 and shall have no further obligations to
Executive hereunder. Notwithstanding a termination by the Company under this
Section 10.11, Executive's obligations under Section 9 shall survive such
termination.
11. D&O Insurance. The Company shall provide industry standard
Director's and Officer's ("D&O") Insurance during the Term. Executive, if an
officer of the Company, shall be named as an insured under the policy.
12. Adherence to Legal and Ethical Requirements. Executive agrees and
covenants that he shall at all times conduct himself in full compliance with all
legal and ethical regulations and industry guidelines applicable to his position
with the Company, including, without limitation Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C. 1320d-1329d-8; 42 U.S.C. 1320d-2)
("HIPAA") and Advanced Medical Technology Association ("AdvaMed") Code of Ethics
on Interactions with Health Care Professionals.
13. Certain Definitions. For purposes of this Agreement:
(i) An "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with,
such first person, and includes subsidiaries.
15
(ii) A "business day" means the period from 9:00 am to 5:00 pm on
any weekday that is not a banking holiday in New York City,
New York.
(iii) A "subsidiary" of any person means another person, an amount
of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least
a majority of its board of directors or other governing body
(or, if there are no such voting interests or no board of
directors or other governing body, 50% or more of the equity
interests of which) is owned directly or indirectly by such
first person.
* * * * * *
IN WITNESS WHEREOF, the parties hereto have signed their names as of
the day and year first above written.
MAKO SURGICAL CORP.
By: /s/ S. Xxxxx Xxxxxxxxxx, Ph.D.
-----------------------------------
Name: S. Xxxxx Xxxxxxxxxx, Ph.D.
Title: Chairman, Compensation Committee
/s/ Xxxxxxx X.. Xxxxx
----------------------------------------------
Xxxxxxx X. Xxxxx
16
EXHIBIT A (1)
For and in consideration of the payments and other benefits due to Xxxxxxx X.
Xxxxx (the "EXECUTIVE") pursuant to the Amended and Restated Employment
Agreement dated as of February 13, 2009 (the "EMPLOYMENT AGREEMENT"), by and
between MAKO Surgical Corp. (the "COMPANY") and the Executive, and for other
good and valuable consideration, the Executive hereby agrees, for the Executive,
the Executive's spouse and child or children (if any), the Executive's heirs,
beneficiaries, devisees, executors, administrators, attorneys, personal
representatives, successors and assigns, to forever release, discharge and
covenant not to xxx the Company, or any of its divisions, affiliates,
subsidiaries, parents, branches, predecessors, successors, assigns, and, with
respect to such entities, their officers, directors, trustees, employees,
agents, shareholders, administrators, general or limited partners,
representatives, attorneys, insurers and fiduciaries, past, present and future
(the "RELEASED PARTIES") from any and all claims of any kind arising out of, or
related to, his employment with the Company, its affiliates and subsidiaries
(collectively, with the Company, the "AFFILIATED ENTITIES") or the Executive's
separation from employment with the Affiliated Entities, which the Executive now
has or may have against the Released Parties, whether known or unknown to the
Executive, by reason of facts which have occurred on or prior to the date that
the Executive has signed this Release. Such released claims include, without
limitation, any and all claims relating to the foregoing under federal, state or
local laws pertaining to employment, including, without limitation, the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. Section 2000e et. seq., the Fair Labor Standards Act, as
amended, 29 U.S.C. Section 201 et. seq., the Americans with Disabilities Act, as
amended, 42 U.S.C. Section 12101 et. seq. the Reconstruction Era Civil Rights
Act, as amended, 42 U.S.C. Section 1981 et. seq., the Rehabilitation Act of
1973, as amended, 29 U.S.C. Section 701 et. seq., the Family and Medical Leave
Act of 1992, 29 U.S.C. Section 2601 et. seq., and any and all state or local
laws regarding employment discrimination and/or federal, state or local laws of
any type or description regarding employment, including but not limited to any
claims arising from or derivative of the Executive's employment with the
Affiliated Entities, as well as any and all such claims under state contract or
tort law.
The Executive has read this Release carefully, acknowledges that the Executive
has been given at least 21 days to consider all of its terms and has been
advised to consult with any attorney and any other advisors of the Executive's
choice prior to executing this Release, and the Executive fully understands that
by signing below the Executive is voluntarily giving up any right which the
Executive may have to xxx or bring any other claims against the Released
Parties, including any rights and claims under the Age Discrimination in
Employment Act. The Executive also understands that the Executive has a period
of seven days after signing this Release within which to revoke his agreement,
and that neither the Company nor any other person is obligated to make any
payments or provide any other benefits to the Executive pursuant to the
Agreement until eight days have passed since the Executive's signing of this
Release without the Executive's signature having been revoked other than any
accrued obligations or other benefits payable pursuant to the terms of the
Company's normal payroll practices or employee benefit plans. Finally, the
Executive has not been forced or pressured in any manner whatsoever to sign this
Release, and the Executive agrees to all of its terms voluntarily.
Notwithstanding anything else herein to the contrary, this Release shall not
affect: (i) the Company's obligations under any compensation or employee benefit
plan, program or arrangement (including, without limitation, obligations to the
Executive under the Employment Agreement, any stock option, stock award or
agreements or obligations under any pension, deferred compensation or retention
plan) provided by the Affiliated Entities where the Executive's compensation or
benefits are intended to continue or the Executive is to be provided with
compensation or benefits, in accordance with the express written terms of such
plan, program or arrangement, beyond the date of the Executive's termination;
(ii) rights to indemnification the Executive may have under the Employment
Agreement or a separate agreement entered into with the Company; or (iii) rights
Executive may have as a stockholder of the Company.
This Release is final and binding and may not be changed or modified except in a
writing signed by both parties. Section 9 of the Employment Agreement shall
apply to this Release.
------------------------- -------------------------
Date Xxxxxxx X. Xxxxx
------------------------- -------------------------
Date MAKO Surgical Corp.
-------------------------
(1) This release may be amended by the Company to reflect new laws and changes
in applicable laws.
