EXHIBIT 10(ss)
DRAFT DATED 4/26/96
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") made as of May 1, 1996,
between Palomar Medical Technologies, Inc., a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxxxx, M.D., F.A.C.P., an individual residing at
0000 Xxxxxxx Xxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000 (the "Employee"),
W I T N E S S E T H T H A T:
WHEREAS, the Company desires to employ Employee as one of its senior
executive officers for the period and upon and subject to the terms herein
provided; and
WHEREAS, the Company desires to be assured that Employee will not
compete with the Company for the period and within the geographical areas
hereinafter specified; and
WHEREAS, Employee is willing to agree to be employed by the Company for
the period and upon and subject to the terms herein provided; and
WHEREAS, Employee does not desire to work for the Company in a position
lower than that of a managerial capacity and is willing to agree not to compete
with the Company;
NOW, THEREFORE, in consideration of the premises, the parties hereto
covenant and agree as follows:
Section 1. Term of Employment; Compensation. The Company agrees to
employ Employee from the date hereof until May 31, 2001 in a senior managerial
capacity, initially as Vice President and Medical Director. The Company will pay
Employee for his services during the term of his employment hereunder at an
annual rate of Three Hundred Fifty Thousand Dollars ($350,000), payable in
arrears, in equal installments, in accordance with standard Company practice,
but in any event not less often than monthly, subject only to such payroll and
withholding deductions as are required by law or requested by the Employee (the
"Base Salary"). The Base Salary shall be increased 10% per year on each
anniversary of this Agreement. Employee shall also be entitled to an annual
bonus of not less than 10% and not more than 30% of his Base Salary to be
granted based upon the achievement of mutually agreed upon performance criteria.
Upon execution of this Agreement, Employee will be paid a signing bonus
of Two Hundred Fifty Thousand Dollars ($250,000) and will be granted options to
purchase 400,000 shares of the common stock, $.01 par value per share, of the
Company at a purchase price of $9.50 per share such option to vest at the rate
of 150,000 on the first anniversary hereof, 150,000 on the second anniversary
hereof, and 100,000 on the third anniversary hereof. The Options shall vest
immediately upon a
change in control of the Company, as defined in the option agreement or upon
termination of Employee's employment under Section 6(e) of this Agreement.
The Company will also pay Employee's costs to maintain his personal and
family health insurance from his current employer under provisions of C.O.B.R.A.
(Continuation of Benefits Reconciliation Act) for a period not to exceed
eighteen months from the date hereof, and provide continuously during the term
of this Agreement coverage for the Employee under the Company's directors and
officers liability insurance policy and shall maintain such other medical
malpractice and liability insurance coverage for the Employee as shall be
sufficient to cover the Employee's activities on behalf of the Company. In the
event that Employee is sued by ThermoLase Corporation during the term of this
Agreement and such suit is based upon either (i) previous employment-related
negotiations between ThermoLase and Employee, or (ii) wrongful disclosure of
proprietary information to the Company, the Company shall defend and indemnify
Employee against any loss, cost or liability arising out of any such lawsuit
including, but not limited to reasonable retainers, expert witness fees,
attorney's fees, settlement costs, judgments and litigation costs (herein
referred to as "Defense Costs"). Employee may retain independent counsel of
Employee's choosing to represent Employee is any such litigation. Any insurance
policy required to be carried by the Company for the benefit of Employee under
this Agreement shall provide as follows: (i) that Defense Costs related to any
covered claim, shall be advanced and paid to, or on behalf of, Employee as and
when any such Defense Costs are incurred, and (ii) that Employee shall have the
right to retain independent counsel of Employee's choosing to defend Employee
with respect to any such covered claim. To the extent nor covered by insurance
carried by the Company, the Company agrees to defend and indemnify Employee
against any loss, costs or liability, including Defense Costs, arising out of
Employee's employment with the Company except liability resulting from
Employee's willful misconduct. In defending Employee under this paragraph, the
Company shall advance and pay Employee's Defense Costs as and when they are
incurred, and Employee shall have the right to retain independent counsel of
Employee's choosing.
Section 2. Office and Duties. Employee's principal responsibilities
shall include (1) assisting the Company in developing its strategy to achieve a
dominant position in the cosmetic laser markets, including transitioning from a
capital equipment supplier to a broad service provider, (2) providing product
development and product application guidance for medical and cosmetic laser
procedures, (3) directing clinical trials for laser applications, (4) assisting
and directing training and educational programs, (5) serving as the Company's
spokesman with the medical research, clinician and practitioner communities as
well as with the investor community to increase awareness of promising and
effective laser treatments, (6) assisting in the evaluation of new technologies,
products and procedures which may be of interest to the Company, and (7)
operating and managing a Company facility in Sacramento, California, staffed and
equipped to do product, procedure and clinical evaluations. The Company shall
provide at its expense for Employee the standard level of medical malpractice
insurance to protect his medical license from litigation related to the practice
of medicine within the scope of employment by the Company as well as continuing
"tail" coverage for a period of three (3) years in the event of termination of
employment. Employee shall devote substantially all of his business time, labor,
skill, undivided attention and best ability to the performance of his duties
hereunder in a manner which will faithfully and diligently further the business
and interests of the Company. During the term of his employment, Employee shall
not directly or indirectly pursue any other business activity, except personal
investments not related to the Company or its business, and those professional
medical
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activities related to service to professional medical publications as editor or
reviewer or professional medical societies as elected officer, elected board
member or appointed committee member or chair, without the Company's prior
written consent. Employee agrees that he will travel to whatever extent is
reasonably necessary in the conduct of the Company's business. The Employee's
principal office shall be located in Sacramento, California, and Employee shall
not be required to move from that location without his consent. The Company
agrees to fully fund the operations and overhead of Employee's Principal office
for the duration of this Agreement in amounts sufficient to fully support
Employee's duties as set forth herein.
Nothing in this Agreement shall affect in any way the Company's right
to manage its business, and the Company retains its full management prerogatives
and discretion to manage and direct its business affairs, including, without
limitation, the adoption, amendment or modification of advisory, research,
development, production or marketing decisions as it sees fit, notwithstanding
any interest in or expectation which Employee may have regarding a particular
position, business program or product.
Section 3. Expenses. Employee shall be entitled to reimbursement for
expenses incurred by him in connection with the performance of his duties
hereunder upon receipt of vouchers therefor in accordance with such procedures
as the Company has heretofore or may hereafter establish. In addition, Employee
shall be reimbursed for moving expenses of personal and professional belongings
from Albuquerque, New Mexico, to Sacramento, California.
Section 4. Employee Leave During Employment. (a) Employee shall be
entitled to such reasonable vacations as may be allowed by the Company in
accordance with general practices to be established, but in any event not less
than four (4) weeks during each twelve (12) month period.
(b) In addition, Employee shall also be entitled to a minimum
of at least three (3) weeks of paid educational leave per year, to attend
approved professional medical society meetings as necessary to maintain
professional credentials and qualifications for medical licensure. This leave
will be taken, whenever possible, at times as may be approved by the President
of the Company.
Section 5. Additional Benefits. If otherwise eligible, Employee shall
not be excluded, without his prior written consent, from participation in all
group insurance programs or other fringe benefit plans which the Company may
hereafter in its sole and absolute discretion make available generally to its
employees, but the Company shall not be required to establish or maintain any
such program or plan.
Section 6. Termination of Employment. Notwithstanding any other
provision of this Agreement, Employee's employment may be terminated:
(a) By the Company in the event of his wilful misconduct in
the performance of his duties hereunder, or his conviction of a crime involving
moral turpitude.
(b) By the Company upon ninety (90) days' notice to Employee
if he should be prevented by illness, accident or other disability (mental or
physical) from discharging
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his duties hereunder for one or more periods totaling six (6) months during any
consecutive twelve (12) month period.
(c) By either the Company or Employee for any material breach
by the other of the terms hereof, but only if such breach continues for ten (10)
days (or such longer period as is reasonably required to cure such breach with
diligent and good faith effort) after written notice to the other specifying the
breach relied on for such termination.
(d) In the event of Employee's death during the term of his
employment, the Company's obligation to pay further compensation hereunder shall
cease forthwith, except that Employee's legal representative shall be entitled
to receive his fixed compensation for the period up to the last day of third
month after the month in which such death shall have occurred.
(e) By the Company without cause, after the second anniversary
hereof, upon not less than thirty (30) days' written notice in which event the
Company shall pay to Employee an amount equal to eighteen months salary based on
then applicable Base Salary and all non-salary benefits shall continue for a
period of eighteen (18) months at Company expense.
Section 7. Disclosure and Assignment of Intellectual Property. Employee
shall promptly disclose to the Company and any successor or assign, and grant to
the Company, and its successors and assigns (without any separate remuneration
or compensation other than that received by him from time to time in the course
of his employment) his entire right, title and interest throughout the world in
and to all research, information, inventions, designs, procedures, developments,
discoveries, improvements, patents and applications therefor, trademarks and
applications therefor, copyrights and applications therefor, trade secrets,
drawings, plans, systems, methods, specifications, and all other manufacturing,
engineering, technical, research and development data and know-how made,
conceived, developed and/or acquired by him solely or jointly with others during
the period of his employment with the Company or within one year thereafter,
which relate to the manufacture, production or processing of any products
developed or sold by the Company during the term of this Agreement or which are
within the scope of or usable in connection with the Company's business as it
may, from time to time, hereafter be conducted or proposed to be conducted
(herein sometimes "Intellectual Property"). (It is understood and agreed that
Employee has heretofore disclosed to the Company, and assigned to it, all
Intellectual Property now known to him over which he has any control and the
disclosure of which will not subject the Employee to liability for breach of
contract, breach of a confidentiality agreement or violation of any law or
resolution.) Employee agrees to execute all appropriate patent applications
securing all United States and foreign patents on all Intellectual Property, and
to do, execute and deliver any and all acts and instruments that may be
necessary or proper to vest all Intellectual Property in the Company or its
nominee or designee and to enable the Company, or its nominee or designee, to
obtain all such patents; and Employee agrees to render to the Company, or its
nominee or designee, all such assistance as it may require in the prosecution of
all such patent applications and applications for the re-issue of such patents,
and in the prosecution or defense of all interferences which may be declared
involving any of said patent applications or patents, but the expense of all
such assignments and patent applications, or all other proceedings referred to
herein above, shall be borne by the Company. Employee shall be entitled to fair
and reasonable compensation for any such assistance requested by the Company or
its nominee or designee and furnished by him
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after the termination of his employment. Employee shall make and maintain
adequate and current written records of all Intellectual Property, and Employee
shall disclose all Intellectual Property promptly, fully and in writing to the
Company immediately upon development of the same and at any time upon request.
Section 8. Confidentiality. Employee shall not, either during the
period of his employment with the Company or thereafter, reveal or disclose to
any person outside the Company or use for his own benefit, without the Company's
specific written authorization, whether by private communication or by public
address or publication or otherwise, any Confidential Information, as
hereinafter defined. The term "Confidential Information" as used throughout this
Agreement shall mean all trade secrets, proprietary information and other data
or information (and any tangible evidence, record or representation thereof),
whether prepared, conceived or developed by an employee of the Company or
received by the Company from an outside source, which is in the possession of
the Company (whether or not the property of the Company), which in any way
relates to the present or future business of the Company, which is maintained in
confidence by the Company, or which might permit the Company or its customers to
obtain a competitive advantage over competitors who do not have access to such
trade secrets, proprietary information, or other data or information. All
originals and copies of any of the foregoing, relating to the business of the
Company, however and whenever produced, shall be the sole property of the
Company, not to be removed from the premises or custody of the Company without
in each instance first obtaining written consent or authorization of the
Company. Upon the termination of Employee's employment in any manner or for any
reason, Employee shall promptly surrender to the Company all copies of any of
the foregoing, together with any other documents, materials, data, information
and equipment belonging to or relating to the Company's business and in his
possession, custody or control, and Employee shall not thereafter retain or
deliver to any other person, any of the foregoing or any summary or memorandum
thereof.
Section 9. Restriction. The Company has invested and may in the future
be required to invest substantial sums of money, directly or indirectly, to
continue and expand the business heretofore conducted by it and in connection
therewith, and as Employee recognizes that the Company would be substantially
injured by Employee disclosing to others, or by Employee using for his own
benefit, any Intellectual Property or any of the other types of information
referred to in Section 8 or Confidential Information, Employee agrees that
during the period of his employment hereunder and for a period ending two (2)
years after the term of this Agreement:
(a) Neither he nor any member of his immediate family will be
interested, directly or indirectly, as an investor in any other business or
enterprise similar to that of the Company or in competition with the Company
(except as an investor in securities listed on a national securities exchange or
actively traded over the counter so long as such investments are in amounts not
significant as compared to his total investments or to the aggregate of the
outstanding securities of the issuer of the same class or issue); and
(b) He will not, directly or indirectly, for his own account
or as employee, officer, director, partner, joint venturer or otherwise, engage
anywhere in the world, in any phase of the business of developing,
manufacturing, distributing or selling lasers for medical or cosmetic use or
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otherwise compete with the Company in such geographic area in any other business
in which the Company is engaged and for which he has responsibility.
(c) During Employee's employment with the Company and for a
period of three years after the termination thereof for any reason, Employee
shall not solicit, induce, attempt to hire, or hire any employee of the Company
(or any other person who may have been employed by the Company during the term
of his employment with the Company), or assist in such hiring by any other
person or business entity or encourage any such employee to terminate his or her
employment with the Company.
Employee and the Company are of the belief that the period of time and
the area herein specified are reasonable, in view of the nature of the business
in which the Company is engaged and proposes to engage, the state of its product
development and Employee's knowledge of this business. However, if such period
or such area should be adjudged unreasonable in any judicial proceeding, then
the period of time shall be reduced by such number of months or such area shall
be reduced by elimination of such portion of such area, or both, as are deemed
unreasonable, so that this covenant may be enforced in such area and during such
period of time as is adjudged to be reasonable.
Section 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given when delivered or
three (3) days after mailing if mailed by first-class, registered or certified
mail, postage prepaid, addressed (a) if to Employee, at 0000 Xxxxxxx Xxxxx, Xxxx
Xxxx, Xxxxxxxxxx 00000, with a copy to
___________________________________________________, Attn:___________________,
Esq., or to such other person(s) or address(es) as Employee shall have furnished
to the Company in writing; and (b) if to the Company, at 00 Xxxxxx Xxxx Xxxxx,
Xxxxxxx, Xxxxxxxxxxxxx 00000, with a copy to Xxxxx, Xxxx & Xxxxx, Xxx Xxxx
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attn: Xxxxx X. Xxxxxxxx, Esq. or to
such other person(s) or address(es) as the Company shall have furnished to
Employee in writing.
Section 11. Assignability. In the event that the Company shall be
merged with, or consolidated into, any other corporation, or in the event that
it shall sell and transfer substantially all of its assets to another
corporation (a "Transaction"), the terms of this Agreement shall inure to the
benefit of the Employee and the corporation resulting from such Transaction (the
"Resulting Corporation"), and be assumed by, the Resulting Corporation. This
Agreement shall not be assignable by Employee, but it shall be binding upon, and
to the extent provided in Section 6, shall inure to the benefit of, his heirs,
executors, administrators and legal representatives.
Section 12. Entire Agreement. This Agreement contains the entire
agreement between the Company and Employee with respect to the subject matter
hereof and there have been no oral or other agreements of any kind whatsoever as
a condition precedent or inducement to the signing of this Agreement or
otherwise concerning this Agreement or the subject matter hereof.
Section 13. Expenses. Each party shall pay its own expenses incident to
the performance or enforcement of this Agreement, including all fees and
expenses of its counsel for all activities of such counsel undertaken pursuant
to this Agreement, except as otherwise herein specifically provided.
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Section 14. Equitable Relief. Employee recognizes and agrees that the
Company's remedy at law for any breach of the provisions of Sections 7, 8 or 9
hereof would be inadequate, and he agrees that for breach of such provisions,
the Company shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in this Agreement, be entitled to injunctive
relief and to enforce its rights by an action for specific performance to the
extent permitted by law.
Section 15. Waivers and Further Agreements. Any waiver of any terms or
conditions of this Agreement shall not operate as a waiver of any other breach
of such terms or conditions or any other term or condition, nor shall any
failure to enforce any provision hereof operate as a waiver of such provision or
of any other provision hereof; provided, however, that no such written waiver,
unless it, by its own terms, explicitly provides to the contrary, shall be
construed to effect a continuing waiver of the provision being waived and no
such waiver in any instance shall constitute a waiver in any other instance or
for any other purpose or impair the right of the party against whom such waiver
is claimed in all other instances or for all other purposes to require full
compliance with such provision. Each of the parties hereto agrees to execute all
such further instruments and documents and to take all such further action as
the other party may reasonably require in order to effectuate the terms and
purposes of this Agreement.
Section 16. Amendments. This Agreement may not be amended, nor shall
any waiver, change, modification, consent or discharge be effected except by an
instrument in writing executed by or on behalf of the party against whom
enforcement of any waiver, change, modification, consent or discharge is sought.
Section 17. Severability. If any provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative or unenforceable
as applied to any particular case in any jurisdiction or jurisdictions, or in
all jurisdictions or in all cases, because of the conflicting of any provision
with any constitution or statute or rule of public policy or for any other
reason, such circumstance shall not have the effect of rendering the provision
or provisions in question, invalid, inoperative or unenforceable in any other
jurisdiction or in any other case or circumstance or of rendering any other
provision or provisions herein contained invalid, inoperative or unenforceable
to the extent that such other provisions are not themselves actually in conflict
with such constitution, statute or rule of public policy, but this Agreement
shall be reformed and construed in any such jurisdiction or case as if such
invalid, inoperative or unenforceable provision had never been contained herein
and such provision reformed so that it would be valid, operative and enforceable
to the maximum extent permitted in such jurisdiction or in such case.
Section 18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and in pleading or
proving any provision of this Agreement, it shall not be necessary to produce
more than one of such counterparts.
Section 19. Section Headings. The headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 20. General Provisions.
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(a) Employee further agrees that his obligations under
Sections 7, 8 and 9 of this Agreement shall be binding upon him irrespective of
the duration of his employment by the Company, the reasons for any cessation of
his employment by the Company, or the amount of his compensation and subject to
the time limits set forth in Sections 7, 8 and 9, shall survive the termination
of this Agreement (whether such termination is by the Company, by Employee, upon
expiration of this Agreement or otherwise).
(b) Employee represents and warrants to the Company that he is
not now under any obligations to any person, firm or corporation, and has no
other interest which is inconsistent or in conflict with this Agreement, or
which would prevent, limit or impair, in any way, the performance by him of any
of the covenants or his duties in his said employment.
Section 21. Gender. Whenever used herein, the singular number shall
include the plural, the plural shall include the singular, and the use of any
gender shall include all genders.
Section 22. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the law (other than the law governing
conflict of law questions) of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have executed or caused to be executed
this Agreement as of the date first above written.
PALOMAR MEDICAL TECHNOLOGIES, INC.
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
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Title: Chairman & CEO
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BY PLACING MY SIGNATURE HEREUNDER, I ACKNOWLEDGE THAT I HAVE READ ALL
THE PROVISIONS OF THIS AGREEMENT AND THAT I AGREE TO ALL OF ITS TERMS.
EMPLOYEE:
/s/ Xxxxxx X. Xxxxxxxx, M.D.
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Xxxxxx X. Xxxxxxxx, M.D., F.A.C.P.
Dated: 5/1/96
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