EXHIBIT 10.60
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
CARDIAC SCIENCE CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇
VICE PRESIDENT, SALES PRIMARY CARE
DATED AS OF SEPTEMBER 20, 2006
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (this "Agreement"), dated
as of September 20, 2006, is between Cardiac Science Corporation, a Delaware
corporation (the "the Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President, Sales
Primary Care ("Executive");
W I T N E S S E T H:
WHEREAS, Executive and ▇▇▇▇▇▇▇ Cardiology Systems, Inc. ("▇▇▇▇▇▇▇
Cardiology") are parties to an Employment Agreement dated as of February 6, 2004
(the "Original Agreement");
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of February
28, 2005, as amended, ▇▇▇▇▇▇▇ Cardiology and Cardiac Science, Inc. were combined
by means of the merger of ▇▇▇▇▇▇▇ Cardiology into the Company and the merger of
a subsidiary of the Company into Cardiac Science, Inc. (the "Merger");
WHEREAS, as a result of the Merger, the Original Agreement was assigned to
the Company by operation of law;
WHEREAS, the Company and Executive desire to amend and restate the
Original Agreement upon the terms and conditions set forth herein.
A G R E E M E N T S:
NOW, THEREFORE, for and in consideration of the foregoing premises and for
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the Company and Executive hereby agree to enter into an
employment relationship in accordance with the terms and conditions set forth
below.
1. EMPLOYMENT
The Company will continue to employ Executive and Executive will continue
to accept employment by the Company as its Vice President, Sales Primary Care,
and continue to report to the Chief Executive Officer. Changes may be made from
time to time by Employer in its sole discretion to the duties, reporting
relationships and title of Executive. Executive will perform the duties of Vice
President, Sales Primary Care, and will devote full time and attention to
achieving the purposes and
discharging of responsibilies afforded the position, and such other duties as
may be assigned from time to time by the Chief Executive Officer, which relate
to the business of the Company and are reasonably consistent with Executive's
position.
During Executive's employment, the Executive will not engage in any other
business activity which, in reasonable judgment of the Chief Executive Officer,
conflicts with the duties of the Executive under this agreement, whether or not
such activity is pursued for gain, profit or other advantage.
Executive will comply with the policies, procedures, and applicable laws and
regulations that govern the Company, and will take reasonable steps to ensure
that the operations the Executive manages are in compliance with all applicable
policies, procedures, laws and regulations.
2. COMPENSATION AND BENEFITS
The Company agrees to pay or cause to be paid to Executive, and Executive
agrees to accept in exchange for the services rendered hereunder by him, the
following compensation:
2.1 ANNUAL SALARY
Executive's compensation shall consist of an annual base salary (the "
Salary") of two hundred thousand dollars ($200,000), payable bi-weekly and in
accordance with the payroll practices of the company. The Salary shall be
reviewed, and shall be subject to change, by the Board of Directors of the
Company (or the Compensation Committee thereof) at least annually while
Executive is employed hereunder.
2.2 BONUS
Executive shall be eligible to participate in Employer's annual incentive
bonus plan, and in accordance with executive bonus plans, which shall be adopted
and modified from time to time in the sole discretion of the Board of Directors
(or the Compensation Committee of the Board of Directors) of the Company.
2.3 BENEFITS
Executive will be eligible to participate, subject to and in accordance
with applicable eligibility requirements, in such benefit programs as shall be
provided from time to time by action of the Company's Board of Directors, which
shall include, at a minimum, basic health, dental and vision insurance.
2.4 VACATION AND OTHER PAID TIME-OFF BENEFITS
Executive shall be entitled to four (4) weeks vacation each year, unless
years of service warrant additional vacation under the Company vacation policy
as offered all other employees, and during which time Executive's base
compensation will continue in full. Vacation will be scheduled by mutual
agreement. Executive will be provided such holidays and sick leave as Employer
makes available to its all other employees.
3. TERMINATION
The employment of Executive pursuant to this Agreement may be terminated
as follows:
3.1 AUTOMATIC TERMINATION ON DEATH OR TOTAL DISABILITY
This Agreement and Executive's employment hereunder shall terminate
automatically upon the death or total disability of Executive. The term "total
disability" as used herein shall mean Executive's inability, with or without
reasonable accommodation, provided that no accommodation that imposes undue
hardship on Employer will be required to perform the essential responsibilities
associated with Executive's position set forth in Section 1 hereof for a period
or periods aggregating ninety (90) days during any period of one hundred eighty
days (180) consecutive days (or such other period as may be required by
disability law) in any twelve-month period as a result of physical or mental
illness, loss of legal capacity or any other cause beyond Executive's control,
unless Executive is granted a leave of absence by the Board of Directors of the
Company (or the Compensation Committee thereof). Executive and the Company
hereby acknowledge that Executive's ability to perform the duties specified in
paragraph 1 hereof is of the essence of this Agreement. Termination hereunder
shall be deemed to be effective (a) at the end of the calendar month in which
Executive's death occurs or (b) immediately upon a determination by the Board of
Directors of the Company (or the Compensation Committee thereof) of Executive's
total disability, as defined herein. In the case of termination of employment
under this Section 3.1, Executive shall not be entitled to receive any payments
or benefits under this Agreement other than any unpaid Salary and unused
vacation which has accrued as of the date Executive's employment terminates.
3.2 OTHER TERMINATION EXCLUDING CHANGE OF CONTROL
Either the Company or Executive may terminate this agreement at any time
for any reason, with or without notice. Except as provided in Section 3.3.1
below, upon such termination, Executive shall not be entitled to receive any
payments or benefits under this Agreement other than any unpaid Salary for the
bi-weekly period up to the
date of termination and vacation time which has accrued as of the date
Executive's employment terminates.
Executive acknowledges and understands that employment with the Company is
at-will and can be terminated by either party for no reason or for any reason
not otherwise specifically prohibited by law or provided for in this Agreement.
Nothing in this Agreement is intended to alter Executive's at-will employment
status or obligate the Company to continue to employ Executive for any specific
period of time, or in any specific role or geographic location.
3.3 TERMINATION AS A RESULT OF CHANGE OF CONTROL
3.3.1 TERMINATION BY THE COMPANY OR SUCCESSOR EMPLOYER
If (a) during the period commencing on the date the Company enters into a
definitive agreement with respect to a transaction that would constitute a
Change of Control (as defined below) and ending on the date the definitive
agreement therefore is terminated or the Change of Control is consummated, the
Company terminates Executive's employment without cause (as defined below), (b)
during the period commencing upon the consummation of the Change of Control and
ending twenty-four months thereafter, the Company or, if applicable, the
surviving or successor employer ("Successor Employer") terminates Executive's
employment without Cause (as defined below), or (c) during the period commencing
upon the consummation of the Change of Control and ending twenty-four (24)
months thereafter, Executive resigns for Good Reason (as defined below), then
Executive shall be entitled to receive the following termination payments and
benefits:
(1) severance payments equal to six (6) months salary (the higher of
that in effect immediately prior to Change of Control or that in effect
immediately prior to termination), to be paid out over six (6) months in
the course of the Company's or the Surviving Employer's regularly
scheduled payroll;
(2) continuation of health, dental and vision insurance, at
substantially equivalent coverage to those in place as of the termination
date, and Life Insurance, including supplemental coverage, if and as
allowed under the policy's portability clause, for no less than six (6)
months, and other benefits substantially equivalent to those in place as
of the termination date, for six (6) months;
(3) any unpaid salary and accrued, unused vacation as of the date
Executive's employment terminates;
(4) bonus at the target or budgeted amount for the year in which
termination occurs, based on any bonus plan in place for that year,
pro-rated for through the date of termination; and
(5) accelerated vesting of 100% of Executive's then unvested options
to purchase shares of the Company's common stock or the options to
purchase common stock of the Successor Employer issued in substitution
therefor in connection with the Change of Control, any restricted stock
units or other similar stock based awards.
The severance payments and benefits described in this paragraph are
expressly contingent upon Executive's signing upon termination a full release in
a form acceptable to Successor Employer, and are further contingent upon
Executive's full compliance with the terms of the Confidentiality Agreement (as
defined in paragraph 5 below) with the Company.
3.3.2 TERMINATION FOR CAUSE
If, during either of the periods set forth in clauses (a) or (b) of
Section 3.3.1, Executive is terminated by the Company or the Successor Company
for Cause, Executive shall not be entitled to receive any payments or benefits
hereunder other than any unpaid Salary and accrued, unused vacation as of the
date Executive's employment terminates, payable on the next regularly scheduled
payroll following the Executive's termination date.
3.3.3 TERMINATION BY EXECUTIVE
If, during either of the periods set forth in clauses (a) or (b) of
Section 3.3.1, Executive voluntarily terminates his employment other than for
Good Reason, Executive shall not be entitled to receive any payments or benefits
hereunder other than any unpaid Salary and accrued, unused vacation as of the
date Executive's employment terminates, payable on the next regularly scheduled
payroll following the Executive's termination date.
3.3.4 CAUSE
Wherever reference is made in this Agreement to termination being with or
without Cause, "Cause" shall be limited to the occurrence of one or more of the
following events:
(a) willful misconduct, insubordination, or dishonesty in the
performance of Executive's duties or other knowing and material violation
of the Company's or the Successor Employer's policies and procedures in
effect
from time to time which results in a material adverse effect on the
Company or the Successor Employer;
(b) the continued failure of Executive to satisfactorily perform his
duties after receipt of written notice that identifies the areas in which
Executive's performance is deficient;
(c) willful actions in bad faith (or intentional failures to act in
good faith) by Executive with respect to the Company or the Successor
Employer that materially impair the Company's or the Successor Employer's
business, goodwill or reputation;
(d) conviction of a felony or midsdemeanor or failure to contest
prosecution for a felony or misdemeanor; the Employer's reasonable belief
that Executive engaged in a violation of any statute, rule or regulation
governing the Company, any of which is harmful to the Employer's business
or reputation; the Employer's reasonable belief that Employee engage in
unethical practices, dishonesty or disloyalty;
(e) current use by the Executive of illegal substances; or
(f) any material violation by Executive of Executive's
Confidentiality Agreement.
3.3.5 GOOD REASON
For the purposes of this Agreement, "Good Reason" shall mean that
Executive, without his/her consent, has either:
(a) incurred a material reduction in title, status, authority or
responsibility at the Company or the Successor Employer (relative to
title, status, authority or responsibility immediately prior to the Change
of Control);
(b) incurred a reduction in Executive's Annual Salary or bonus
opportunity; or material adverse modifications to the stock option awarded
to Executive, or the Stock Plan (or any similar stock option plan);
(c) suffered a material breach of this Agreement by the Company or
the Successor Employer; or
(d) been required to relocate or travel more than 50 miles from
his/her then current place of employment in order to continue to perform
the duties and responsibilities of his/her position (not including
customary travel as may be required by the nature of his/her position).
Employer, or Successor Employer, shall have thirty (30) days to cure any
such alleged breach, assignment, reduction or requirement under subsections (a),
(b), (c) and (d) above, after Executive provides Employer written notice of the
actions or omissions constituting such breach, assignment, reduction or
requirement.
3.3.6 CHANGE OF CONTROL
For purposes of this Agreement, "Change of Control" means:
(a) a merger or consolidation of the Company with or into any other
company, entity or person or
(b) a sale, lease, exchange or other transfer in one transaction or
a series of transactions undertaken with a common purpose of all or
substantially all of the Company's then outstanding securities or all or
substantially all of the Company's assets; provided, however, that a
Change of Control shall not include a Related Party Transaction. A Change
of Control shall also include (i) the purchase of a significant portion of
the Company's common stock without approval of a majority of the Company's
incumbent directors and (ii) a successful proxy contest, which is stated
in terms of the board becoming composed of a majority of persons that are
not incumbent directors (or appointed or nominated by incumbent
directors).
A "Related Party Transaction" means:
(a) a merger or consolidation of the Company in which the holders of
the outstanding voting securities of the Company outstanding immediately
prior to the merger or consolidation hold at least a majority of the
outstanding voting securities of the surviving or successor entity
immediately after the merger or consolidation,
(b) a sale, lease, exchange or other transfer of the Company's
assets to a majority-owned subsidiary company,
(c) a transaction undertaken for the principal purpose of
restructuring the capital of the Company, including but not limited to
reincorporating the Company in a different jurisdiction, or
(d) a corporate dissolution or liquidation.
3.3.7 GROSS-UP PAYMENT
(a) Notwithstanding anything in this Agreement to the contrary, in
the event that Executive becomes entitled to receive or receives any
payment
or benefit under this Agreement or under any other plan, agreement, or
arrangement with the Company, any person whose actions result in a Change
of Control or any person affiliated with the Company or such person (all
such payments and benefits, excluding the Gross-Up Payment, being referred
to herein as the "Total Payments") and it is determined that any of the
Total Payments will be subject to any excise tax pursuant to Section 4999
of the Internal Revenue Code of 1986, as amended (the "Code") or any
similar or successor provision (the "Excise Tax"), the Company shall make
an additional lump-sum cash payment to Executive (the "Gross-Up Payment")
in an amount such that the net amount retained by Executive from the Total
Payments, after deduction of (i) the Excise Tax on the Total Payments, and
(ii) any federal, foreign, state or local income or employment tax and
Excise Tax imposed on the Gross-Up Payment, but before deduction for any
federal, foreign, state or local income or employment tax withholding on
the Total Payments, shall be equal to the Total Payments. For purposes of
determining the amount of the Gross-Up Payment, the Gross-Up Payment shall
be deemed to be subject to federal income taxes at the highest rate of
federal income taxation applicable to individuals that is in effect for
the calendar year in which the Gross-Up Payment is to be made, and state
and local income taxes at the highest rate of taxation applicable to
individuals in the state and locality of Executive's residence on the date
of termination of Executive's employment, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state
and local taxes (as determined by assuming that such deduction is subject
to the maximum limitation applicable to itemized deductions under Section
68 of the Code and any other limitations applicable to the deduction of
state and local income taxes under the Code).
(b) All determinations required to be made under this Section 3.3.7,
including whether a Gross-Up Payment is required and the amount of such
Gross-Up Payment, shall be made by a reputable independent public
accounting firm or independent tax counsel appointed by the Company (the
"Firm"). All determinations made by the Firm under this Section 3.3.7
shall be conclusive and binding on both the Company and Executive, and the
Firm shall provide its determinations and any supporting calculations to
the Company and Executive within ten (10) business days after Executive's
employment terminates under any of the circumstances described in Section
3.3.1, or such earlier time as is requested by the Company. In the event
that the Firm determines that a Gross-Up Payment is required, the Company
shall pay such Gross-Up Payment to or for the benefit of Executive as
promptly as practical after the Company's receipt of the Firm's
determination, but not later than ten (10) days after such receipt. For
purposes of making its determinations under this Section 3.3.7, the Firm
may rely on reasonable, good
faith interpretations concerning the application of Sections 280G and 4999
of the Code. The Company and Executive shall furnish to the Firm such
information and documents as the Firm may reasonably request in making its
determinations. The Company shall bear all fees and expenses charged by
the Firm in connection with its services.
(c) As a result of the uncertainty in the application of Section
280G and Section 4999 of the Code, it is possible that amounts will have
been paid or distributed by the Company to or for the benefit of Executive
pursuant to this Agreement (including a Gross-Up Payment) that should not
have been so paid or distributed (an "Overpayment") or that the Company
will fail to pay or distribute amounts to or for the benefit of Executive
pursuant to this Agreement (including a Gross-Up Payment) that should have
been made (an "Underpayment"). In the event it is established pursuant to
a final determination of a court or an Internal Revenue Service proceeding
(a "Final Determination") that an Overpayment has been made, any such
Overpayment shall be treated for all purposes as a loan by the Company to
Executive, which loan shall be repaid by Executive upon demand together
with interest calculated at the lowest interest rate authorized for such
loans under the Code without a requirement that further interest be
imputed. In the event it is established pursuant to a Final Determination
that an Underpayment has occurred, any such Underpayment promptly shall be
paid by the Company to Executive, together with interest calculated at the
lowest interest rate authorized for such loans under the Code without a
requirement that further interest be imputed. The determination of
Overpayment or Underpayment, as the case may be, for purposes of this
Section 3.3.7 shall be subject to the confirmation by the Firm.
4. CONFIDENTIALTY AGREEMENT
Executive recognizes that Employer's business and continued success depend
upon the use and protection of confidential information and proprietary
information, and therefore Executive is subject to, and this Employment
Agreement is conditioned on agreement to, the terms of the Non-Disclosure
Agreement (the "Confidentiality Agreement") entered into by Executive and the
terms of the Confidentiality Agreement shall survive the termination of
Executive's employment with the Company or Successor Employer.
5. ASSIGNMENT
This Agreement is personal to Executive and shall not be assignable by
Executive. The Company may assign its rights hereunder to (a) any Successor
Employer; (b) any other corporation resulting from any merger, consolidation or
other reorganization to which the Company is a party or (c) any other
corporation, partnership, association or other person to which the Company may
transfer all or substantially all of the assets and business of the Company
existing at such time. All of the terms and provisions of this Agreement shall
be binding upon and shall inure to the benefit of and be enforceable by the
parties hereto and their respective successors and permitted assigns.
6. ARBITRATION
Any controversies or claims arising out of or relating to this Agreement
shall be fully and finally settled by arbitration in accordance with the
Employment Arbitration Rules of the American Arbitration Association then in
effect (the "AAA Rules"), conducted by one arbitrator either mutually agreed
upon by the Company and Executive or chosen in accordance with the AAA Rules,
except that the parties thereto shall have any right to discovery as would be
permitted by the Federal Rules of Civil Procedure for a period of 90 days
following the commencement of such arbitration and the arbitrator thereof shall
resolve any dispute which arises in connection with such discovery. The
prevailing party shall be entitled to costs, expenses and reasonable attorneys'
fees, and judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof. It is further agreed by the parties that
the venue for any arbitration proceedings shall be within the state of
Washington.
7. AMENDMENTS IN WRITING
No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor consent to any departure therefrom by either
party hereto, shall in any event be effective unless the same shall be in
writing, specifically identifying this Agreement and the provision intended to
be amended, modified, waived, terminated or discharged and signed by the Company
and Executive, and each such amendment, modification, waiver, termination or
discharge shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by the Company and Executive.
8. APPLICABLE LAW
This Agreement shall in all respects, including all matters of
construction, validity and performance, be governed by, and construed and
enforced in accordance with, the laws of the State of Washington, without regard
to any rules governing conflicts of laws.
9. ENTIRE AGREEMENT
This Agreement, on and as of the date hereof, constitutes the entire
agreement between the Company and Executive with respect to the subject matter
hereof and all prior or contemporaneous oral or written communications,
understandings or agreements between the Company and Executive with respect to
such subject matter are hereby superseded.
10. SEVERABILITY
Whenever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law and in
compliance with the requirements of Section 409A of the Code ("Section 409A"),
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or any action in any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein. Moreover, upon a determination by either party that any
provision of this Agreement may subject Executive to additional tax under
Section 409A, the parties shall negotiate in good faith to modify this Agreement
so as to effect the original intent of the parties as closely as possible to the
end that the transactions contemplated hereby are fulfilled to the fullest
extent possible and such transactions either do not constitute nonqualified
deferred compensation subject to the requirements of Section 409A or satisfy
such requirements in all material respects.
11. ORIGINAL AGREEMENT
The Original Agreement is amended, restated and superseded in its entirety
by this Agreement; provided, however, that notwithstanding the amendment,
restatement and supersedure of the Original Agreement, the parties acknowledge
and agree that for purposes of Section 4.3, the Merger is deemed to have been a
Change of Control and Executive shall be entitled to the benefits set forth in
Section 4.3.1 in the event Executive's employment is terminated by the Company
without Cause or by Executive for Good Reason on or prior to September 1, 2007.
IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the date set forth above.
EXECUTIVE:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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CARDIAC SCIENCE CORPORATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its Senior Vice President and CFO