EXHIBIT 10.15
EMPLOYMENT AGREEMENT
THIS AGREEMENT is effective as of September 15, 1996 between ANGEION
CORPORATION, a Minnesota corporation (the "Company"), and XXXXXXX X. XXXXXXXX
(the "Employee").
WHEREAS, the parties wish to provide for the employment of the Employee
by the Company;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the Company and the Employee, each intending to be legally bound, agree
as follows:
1. Employment. Subject to all of the terms and conditions of this
Agreement, the Company agrees to employ the Employee as the Chief Executive
Officer and President of the Company , and the Employee accepts
this employment.
2. Duties.
(a) The Employee will diligently and conscientiously perform
the duties of Chief Executive Officer and President of the Company
within the general guidelines to be determined by the Board of
Directors of the Company (the "Board"). The Employee will make the best
use of his energy, knowledge and training in advancing the Company's
interests and will not actively be engaged in other employment with any
other entity or concern.
(b) During the term of this Agreement, the Employee will also
serve as a director of the Company and will perform all duties incident
to such service.
3. Term. The Employee's initial term of employment will commence on the
date of this Agreement and will continue for a period of two years, subject to
earlier termination in accordance with Section 4 hereof. Thereafter, the term of
this Agreement will be extended automatically without action by either the
Company or the Employee for consecutive one-year terms, unless either party
gives written notice to the other not to renew such employment within 60 days
before the expiration of the then current term.
4. Termination. Subject to the respective continuing obligations of the
Company and the Employee under Sections 8, 9, 10 and 11 hereof:
(a) This Agreement may be terminated by the Company on 10
days' written notice to the Employee "for cause," with the basis for
termination specified in such notice.
(b) This Agreement may be terminated upon the Employee's death
or Total Disability. For purposes of this Agreement, "Total Disability"
will be as defined in the long-term disability plan of the Company then
in effect or, if no such plan exists, will mean such disability that
prevents the Employee from performing his duties under Section 2 of
this Agreement for a continuous period of 90 days.
(c) This Agreement may be terminated by either the Company or
the Employee at any time upon 30 days' written notice to the Company or
the Employee, as the case may be.
(d) For purposes of this Agreement, "for cause" will mean (i)
dishonesty, fraud, gross misrepresentation, embezzlement or material
and deliberate injury or attempted injury, in each case related to the
Company or its business, (ii) any unlawful or criminal activity of a
serious nature, (iii) any willful breach of duty, habitual neglect of
duty or, if not corrected within 60 days after written notice thereof,
unreasonable job performance, or (iv) a material breach of any
provision of this Agreement.
5. Compensation.
(a) Base Salary. In consideration of the Employee's services
under this Agreement, the Company agrees to pay the Employee an annual
base salary (the "Base Salary"), which will be determined on each
anniversary of this Agreement by the Board in its discretion. The Base
Salary will initially be set at $243,000 and will increase to $255,150
on the first anniversary of this Agreement. Thereafter, the Board will
conduct a performance and salary review at the end of each year of this
Agreement for the purpose of determining the Base Salary for each
ensuing year of this Agreement, which review will be based upon both
individual and corporate performance. The Base Salary will be payable
in accordance with the standard payroll practices of the Company.
(b) Bonuses. During the period commencing on the date hereof
and ending on March 15, 1996, the Employee will diligently work with
the Board to agree upon the milestones and other terms and conditions
to be used in connection with a bonus program for the Employee.
(c) Tax Preparation. During the term of this Agreement, the
Employee will be entitled to receive reimbursement from the Company for
reasonable costs associated with the Employee's annual personal tax
preparation; provided, however, that such reimbursement may not exceed
$3,500 during any year of this Agreement.
(d) Benefit Plans. The Employee will be eligible to
participate in and receive benefits under any other benefit plans or
programs or additional compensation or remuneration plans or programs
of the Company of the type and in an amount comparable to that provided
to other executive officers of the Company; provided, however, that the
Company is not obligated to adopt or continue any such benefit plans or
programs during the term of this Agreement, and the Employee's
participation in any such plans or programs will be subject to the
provisions, limitations and rules applicable to such plans or programs.
In addition to the life insurance provided by the Company to all
employees of the Company, so long as the costs to the Company are
reasonable the Company agrees to provide the Employee with such
additional life insurance as is necessary to provide the Employee at
all times during the term of this Agreement with personal life
insurance benefits totaling $500,000.
(e) Expenses. The Company will pay or reimburse the Employee
for all reasonable expenses (including, without limitation, expenses
for entertainment, travel, personal business education, meals, hotel
accommodations) that the Employee incurs while performing his duties
under this Agreement, provided that the Employee accounts properly for
such expenses to the Company in accordance with Company policies.
(f) Automobile. The Employee will be entitled to an automobile
allowance of $750 per month during the term of this Agreement, plus
reasonable costs for fuel and automobile insurance.
6. Change in Control.
(a) For purposes of this Section 6, a "Change in Control" of
the Company will mean the following:
(i) the sale, lease, exchange or other
transfer, directly or indirectly, of substantially all of the
assets of the Company (in one transaction or in a series of
related transactions) to a person or entity that is not
controlled by the Company;
(ii) the approval by the shareholders of the
Company of any plan or proposal for the liquidation or
dissolution of the Company;
(iii) a merger or consolidation to which the
Company is a party if the shareholders of the Company
immediately prior to effective date of such merger or
consolidation have "beneficial ownership" (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), immediately following the effective
date of such merger or consolidation, of securities of the
surviving corporation representing (A) more than 50%, but not
more than 80%, of the combined voting power of the surviving
corporation's then outstanding securities ordinarily having
the right to vote at elections of directors, unless such
merger or consolidation has been approved in advance by the
Incumbent Directors, or (B) 50% or less of the combined voting
power of the surviving corporation's then outstanding
securities ordinarily having the right to vote at elections of
directors (regardless of any approval by the Incumbent
Directors);
(iv) any person becomes after the effective
date of this Agreement the "beneficial owner" (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of
(A) 20% or more, but not 50% or more, of the combined voting
power of the Company's outstanding securities ordinarily
having the right to vote at elections of directors, unless the
transaction resulting in such ownership has been approved in
advance by the Incumbent Directors, or (B) 50% or more of the
combined voting power of the Company's outstanding securities
ordinarily having the right to vote at elections of directors
(regardless of any approval by the Incumbent Directors);
(v) the Incumbent Directors cease for any
reason to constitute at least a majority of the Board; or
(vi) any other change in control of the
Company of a nature that would be required to be reported
pursuant to Section 13 or 15(d) of the Exchange Act, whether
or not the Company is then subject to such reporting
requirements.
(b) For purposes of this Section 6, the Incumbent Directors
will mean any individual who is a member of the Board on the effective
date of this Agreement and any individual who subsequently becomes a
member of the Board whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority
of the Incumbent Directors (either by specific vote or by approval of
the proxy statement of the Company in which such individual is named as
a nominee for director without objection to such nomination).
7. Payments Upon Termination.
(a) If this Agreement is terminated by the Company pursuant to
Section 4(a) of this Agreement or is terminated by the Employee
pursuant to Section 4(c) of this Agreement, the Employee will be paid
(i) his Base Salary through the date of termination, (ii) any benefits
payable to the Employee pursuant to the terms and conditions of any
benefit plan in which the Employee participated during the term of his
employment, the right to which had vested on the date of his
termination under the terms and conditions of such plans, and (iii) any
unpaid expense reimbursement.
(b) If this Agreement is terminated pursuant to Section 4(b)
of this Agreement, the Employee will be paid (i) his Base Salary
through the end of the month following his death or termination as a
result of Total Disability, (ii) any bonus, determined in accordance
with Section 5(b) of this Agreement, to which the Employee would have
been entitled for the fiscal year in which his death or termination for
Total Disability occurred, pro rated to the end of the month following
his death or termination for Total Disability, (iii) any benefits
payable to the Employee pursuant to the terms and conditions of any
benefit plan in which the Employee participated during the term of his
employment, the right to which had vested on the date of his death or
termination under the terms and conditions of such plans, and (iv) any
unpaid expense reimbursement.
(c) If this Agreement is terminated by the Company pursuant to
Section 4(c) of this Agreement or, following a Change in Control, is
terminated by the Employee pursuant to Section 4(c) of this Agreement
for Good Reason, the Employee (i) will continue to be paid his then
current Base Salary, at the same times and in the same manner as prior
to his termination, for the remainder of the then current term of this
Agreement and for one year thereafter, provided that such payments will
continue only so long as the Employee continues to comply with all of
the terms and conditions of Sections 8, 9 and 10 of this Agreement,
(ii) will be paid any bonus, determined in accordance with Section 5(b)
of this Agreement, to which the Employee would have been entitled for
the entire fiscal year in which he was terminated had his employment
with the Company not been terminated; (iii) will be paid any benefits
payable to the Employee pursuant to the terms and conditions of any
benefit plan in which the Employee participated during the term of his
employment, the right to which had vested on the date of his
termination under the terms and conditions of such plans, and (iv) will
be paid any unpaid expense reimbursement.
(d) For purposes of this Section 7, "Good Reason" will mean
the good faith determination by the Employee, in his sole judgment,
that any one or more of the following events has occurred, without the
Employee's written consent, following a Change in Control:
(i) an adverse change in the Employee's
status or position as an executive of the Company as in effect
immediately prior to the Change in Control, including, without
limitation, any adverse change in the Employee's status or
position as a result of a material diminution in his or her
duties or responsibilities (other than, if applicable, any
such change directly attributable to the fact that the Company
is no longer publicly owned) or the assignment to the Employee
of any duties or responsibilities that, in the Employee's
reasonable judgment, are inconsistent with such status or
position, or any removal of the Employee from or any failure
to reappoint or reelect the Employee to such position (except
in connection with the termination of his employment "for
cause" or as a result of his death or Total Disability or by
the Employee other than for Good Reason); provided, however,
that Good Reason will not include an adverse change in the
Employee's status or position caused by an insubstantial and
inadvertent action that is remedied by the Company promptly
after receipt of notice of such change is given by the
Employee;
(ii) a reduction by the Company in the
Employee's annual Base Salary, or an adverse change in the
form or timing of the payment thereof, as in effect
immediately prior to the Change in Control or as thereafter
increased;
(iii) the failure by the Company to continue
in effect any benefit plan in which the Employee (including,
for purposes of this paragraph, his family or dependents) is
participating at any time during the 90-day period immediately
preceding the Change in Control (or benefit plans providing
the Employee with at least substantially similar benefits)
other than as a result of the normal expiration of any such
benefit plan in accordance with its terms as in effect
immediately prior to the 90-day period immediately preceding
the Change in Control, or the taking of any action, or the
failure to act, by the Company that would adversely affect an
Employee's continued participation in any of such benefit
plans on at least as favorable a basis to such Employee as is
the case immediately prior to the Change in Control or that
would materially reduce the Employee's benefits in the future
under any such benefit plans or deprive an Employee of any
material benefit enjoyed by such Employee immediately prior to
the Change in Control;
(iv) the Company's requiring the Employee to
be based more than 30 miles from where his or her office is
located immediately prior to the Change in Control, except for
required travel pursuant to the Company's business travel
obligations that the Employee undertook on behalf of the
Company during the 90-day period immediately preceding the
Change in Control;
(v) the failure of the Company to obtain an
assumption of the obligations of the Company to perform this
Agreement by any successor to the Company; or
(vi) any material breach of this Agreement
by the Company.
(e) Notwithstanding any other provisions of this Agreement or
any other agreement, contract or understanding heretofore or hereafter
entered into between the Company and the Employee, if any "payments"
(including, without limitation, any benefits or transfers of property
or the acceleration of the vesting of any benefits) in the nature of
compensation under any arrangement that is considered contingent on a
Change in Control for purposes of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), together with any other payments
that the Employee has the right to receive from the Company or any
corporation that is a member of an "affiliated group" (as defined in
Section 1504(a) of the Code without regard to Section 1504(b) of the
Code) of which the Company is a member, would constitute a "parachute
payment" (as defined in Section 280G of the Code), such payments will
be reduced to the largest amount as will result in no portion of such
payments being subject the excise tax imposed by Section 4999 of the
Code; provided, however, that the Employee will be entitled to
designate those payments that will be reduced or eliminated in order to
comply with the foregoing provision.
8. Inventions.
(a) "Inventions," as used in this Section 8, means any
discoveries, improvements, formulae, proprietary rights or data, trade
secrets, shop rights, ideas and know-how (whether or not they are in
writing or reduced to practice) or works of authorship (whether or not
they can be patented or copyrighted) that the Employee makes, authors,
or conceives (either alone or with others) and that:
(i) concern directly the Company's business
or the Company's present or possible future research or
development;
(ii) result from any work the Employee
performs for the Company;
(iii) use the Company's equipment, supplies,
facilities, or trade secret information; or
(iv) the Employee develops during any such
time that Section 2 above obligates him to perform his
employment duties.
(b) The Employee agrees that all Inventions he makes during or
within six months after the term of this Agreement will be the
Company's sole and exclusive property. The Employee will, with respect
to any such Invention:
(i) keep current, accurate, and complete
records, which will belong to the Company and be kept and
stored on the Company's premises while the Employee is
employed by the Company;
(ii) promptly and fully disclose the
existence and describe the nature of the Invention to the
Company in writing (and without request);
(iii) assign (and the Employee does hereby
assign) to the Company all of his rights to the Invention, any
applications he makes for patents or copyrights in any
country, and any patents or copyrights granted to him in any
country; and
(iv) acknowledge and deliver promptly to the
Company any written instruments, and perform any other acts
necessary in the Company's opinion to preserve property rights
in the Invention against forfeiture, abandonment, or loss and
to obtain and maintain letters patents and/or copyrights on
the Invention and to vest the entire right and title to the
Invention in the Company.
The requirements of this subsection 8(b) do not apply to an Invention
for which no equipment, supplies, facility or trade secret information
of the Company was used and which was developed entirely on the
Employee's own time, and (x) which does not relate directly to the
Company's business or to the Company's actual or demonstrably
anticipated research or development, or (y) which does not result from
any work the Employee performed for the Company. Except as previously
disclosed to the Company in writing, the Employee does not have, and
will not assert, any claims to or rights under any Inventions as having
been made, conceived, authored or acquired by the Employee prior to his
employment by the Company.
9. Confidential Information.
(a) "Confidential Information," as used in this Section 9,
means information that is not generally known and that is proprietary
to the Company or that the Company is obligated to treat as
proprietary. This information includes, without limitation:
(i) trade secret information about the
Company and its products;
(ii) "Inventions," as defined in Section
8(a) hereof;
(iii) information concerning the Company's
business, as the Company has conducted it during the last five
years or as it may conduct it in the future; and
(iv) information concerning any of the
Company's past, current, or possible future products,
including (without limitation) information about the Company's
research, development, engineering, purchasing, manufacturing,
accounting, marketing, selling or leasing.
Any information that the Employee reasonably considers or that the
Company treats as Confidential Information will be presumed to be
Confidential Information (whether the Employee or others originated it
and regardless of how he obtained it).
(b) Except as required in his duties to the Company, the
Employee will never, either during or after his employment by the
Company, use or disclose Confidential Information to any person not
authorized by the Company to receive it. When the Employee's employment
with the Company ends, he will promptly turn over to the Company all
records and any compositions, articles, devices, apparatus and other
items that disclose, describe or embody Confidential Information,
including all copies, reproductions and specimens of the Confidential
Information in his possession, regardless of who prepared them.
10. Competitive Activities. The Employee agrees that during his
employment with the Company and, unless the Employee is terminated following a
Change in Control other than for cause, for a period of three years after his
employment with the Company ends:
(a) He will not alone, or in any capacity with another firm:
(i) directly or indirectly engage in any
commercial activity that competes with the Company's business,
as the Company has conducted it during the five years before
the Employee's employment with the Company ends, (A) within
any state in the United States, or (B) within any country in
which the Company directly or indirectly markets or services
products or provides services or reasonably intends during
such period to market or service products or provide services;
(ii) in any way interfere or attempt to
interfere with the Company's relationships with any of its
current or potential customers; or
(iii) employ or attempt to employ any of the
Company's then employees on behalf of any other entity
competing with the Company.
(b) He will, prior to accepting employment with any new
employer, inform that employer of this Agreement and provide that
employer with a copy of this Agreement.
(c) The Employee may, however, accept employment with an
entity competing with the Company so long as the business of such
entity is diversified and, as to a separately managed and operated part
of its business, does not compete with the Company; provided, however,
that prior to accepting such employment, the Employee and such
competing entity will provide the Company with written assurances
satisfactory to the Company that the Employee will not render services
directly or indirectly to any part of such entity's business that
competes with the business of the Company.
11. Conflicting Business. The Employee agrees that he will not transact
business with the Company personally, or as agent, owner, partner or shareholder
of any other entity; provided, however, that the Employee may enter into any
business transaction that is, in the opinion of the Board, reasonable, prudent
or necessary to the Company, so long as any such business transaction is at
arm's-length as though between independent and prudent individuals.
12. No Adequate Remedy. The Employee understands that if he fails to
fulfill his obligations under this Agreement, the damages to the Company would
be very difficult to determine. Therefore, in addition to any other rights or
remedies available to the Company at law, in equity or by statute, the Employee
hereby consents to the specific enforcement by the Company of Sections 8, 9 and
10 of this Agreement through an injunction or restraining order issued by an
appropriate court.
13. Miscellaneous.
(a) Successors and Assigns. Except as provided in the next
sentence, this Agreement may not be assigned without the Employee's
consent, which consent will not be unreasonably withheld. In any event,
the Company may assign this Agreement without the consent of the
Employee in connection with a merger, consolidation, assignment, sale,
or other disposition of substantially all of its assets or business.
(b) Modification. This Agreement may be modified or amended
only by a writing signed by each of the parties hereto.
(c) Governing Law. The laws of the State of Minnesota will
govern the validity, construction, and performance of this Agreement,
without regard to the conflict of laws provisions of any jurisdictions.
Any legal proceeding related to this Agreement will be brought in an
appropriate Minnesota court, and each of the parties hereto hereby
consents to the exclusive jurisdiction of that court for this purpose.
(d) Construction. Wherever possible, each provision of this
Agreement will be interpreted so that it is valid under applicable law.
If any provision of this Agreement is to any extent invalid under
applicable law in any jurisdiction, that provision will still be
effective to the extent it remains valid. The remainder of this
Agreement also will continue to be valid, and the entire Agreement will
continue to be valid in other jurisdictions.
(e) Non-Waiver. No failure or delay by either the Company or
the Employee in exercising any right or remedy under this Agreement
will waive any provision of the Agreement. Nor will any single or
partial exercise by either the Company or the Employee of any right or
remedy under this Agreement preclude either of them from otherwise or
further exercising these rights or remedies, or any other rights or
remedies granted by any law or any related document.
(f) Counterparts. This Agreement may be executed in two or
more counterparts, each of which will constitute an original, but all
of which, when taken together, will constitute one and the same
instrument.
(g) Entire Agreement. This Agreement supersedes all previous
and contemporaneous oral negotiations, commitments, writings, and
understandings among the parties hereto concerning the matters in this
Agreement, including, without limitation, any policy or personnel
manuals of the Company or any of its subsidiaries or affiliates.
(h) Notices. All notices and other communications required or
permitted under this Agreement will be in writing and hand delivered or
sent by registered first-class mail, postage prepaid, and will be
effective upon receipt if hand delivered, and five (5) business days
after mailing if sent by mail, to the following addresses or such other
addresses as either party will have notified the other party:
If to the Company: Angeion Corporation
0000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxx 00000
If to the Employee: Xxxxxxx X. XxXxxxxx
000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of the date first above written.
ANGEION CORPORATION
By: /s/Xxxxx X. Xxxxxxxxxxxxxx
Its: Chief Financial Officer
/s/Xxxxxxx X. XxXxxxxx
Xxxxxxx X. XxXxxxxx
