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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
November 13, 2007
This Employment Agreement, effective as of November 13, 2007,
is by and between MENTOR Corporation ("COMPANY"), with its
executive offices at 201 Mentor Drive, Santa Barbara, California
93111, and Michael O'Neill ("EMPLOYEE").
RECITALS
COMPANY is in the business of manufacturing, distributing and
selling medical devices and related products. EMPLOYEE has
experience in this business and possesses valuable skills and
experience, which will be used in advancing COMPANY's interests.
EMPLOYEE is willing to be engaged by COMPANY and COMPANY is willing
to engage EMPLOYEE in an executive capacity responsible for all
Finance functions of COMPANY, upon the terms and conditions set
forth in this Agreement.
AGREEMENT
EMPLOYEE and COMPANY,
intending to be legally bound, agree as follows:
1.
SERVICES
1.1
General Services.
1.1.1 COMPANY shall employ EMPLOYEE as Chief Financial Officer
(CFO). EMPLOYEE shall have such duties, authorities and
responsibilities commensurate with the duties, authorities and
responsibilities of persons in similar capacities in similarly
sized companies and such other duties and responsibilities as the
Board of Directors of the COMPANY (the "Board") shall designate
that are consistent with the EMPLOYEE's position as CHIEF FINANCIAL
OFFICER of the COMPANY. To the extent that they do not
materially reduce the scope of the responsibilities described
above, EMPLOYEE's duties may change from time to time on reasonable
notice, based on the needs of COMPANY and EMPLOYEE's skills as
determined by COMPANY. These duties shall hereinafter be
referred to as "Services." EMPLOYEE shall report directly to
the President/CEO of the COMPANY or, from time to time, to a
designee of the President/CEO, provided that (i) EMPLOYEE's
Services, as described above, remain materially unchanged and (ii)
the changed reporting structure is consistent with reporting and
organizational structures that exist from time to time in similarly
sized companies
1.1.2 In the event that EMPLOYEE shall from time to
time serve COMPANY as a director or shall serve in any other office
during the term of this Agreement; EMPLOYEE shall serve in such
capacities without further compensation.
1.1.3. EMPLOYEE shall devote his entire working time,
attention, and energies to the business of COMPANY, and shall not,
during the term of this Agreement, be engaged in any other business
activity whether or not such business activity is pursued for gain,
profit or other pecuniary advantage, without the prior written
consent of the Board of Directors of COMPANY. This shall not
be construed as preventing EMPLOYEE from investing his assets in a
form or manner that does not require any services on the part of
EMPLOYEE in the operation or affairs of the entities in which such
investments are made, or from engaging in such civic, charitable,
religious, or political activities that do not interfere with the
performance of EMPLOYEE's duties hereunder.
1.2
Best Abilities. EMPLOYEE shall serve COMPANY
faithfully and to the best of EMPLOYEE's ability. EMPLOYEE
shall use EMPLOYEE's best abilities to perform the Services.
EMPLOYEE shall act at all times according to what EMPLOYEE
reasonably believes is in the best interests of COMPANY.
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1.3
Corporate Authority. EMPLOYEE, as an executive
officer, shall comply with all laws and regulations applicable to
EMPLOYEE as a result of this Agreement, including, but not limited
to, the Securities Act of 1933 and Securities Act of 1934. Prior to
the execution of this Agreement, EMPLOYEE has received and reviewed
COMPANY's Policies and Procedures and COMPANY's Employee
Handbook. EMPLOYEE shall comply with COMPANY's Policies and
Procedures, and practices now in effect or as later amended or
adopted by COMPANY, as required of similarly-situated executives of
COMPANY.
2. TERM
This Agreement shall commence upon the execution of this
Agreement (the "Effective Date") and shall have an initial term of
three (3) years unless terminated as provided in Section 4 of this
Agreement. On the third anniversary of the Effective Date,
this Agreement automatically will renew for an additional
three-year term, unless either party provides the other party with
written notice of non-renewal at least 120 days prior to the date
of the automatic renewal. In the event that the COMPANY provides
written notice of non-renewal to the EMPLOYEE as provided in the
preceding sentence, then EMPLOYEE shall be entitled to the payments
described in Section 4.2.5 below as of the date of the expiration
of this Agreement.
3. COMPENSATION
AND BENEFITS
3.1 Compensation. EMPLOYEE's total
compensation consists of base salary, bonus potential, stock
options, and medical and other benefits generally provided to
employees of COMPANY. Any compensation paid to EMPLOYEE shall
be pursuant to COMPANY's policies and practices for exempt
employees and shall be subject to all applicable laws and
requirements regarding the withholding of federal, state and/or
local taxes. Compensation provided in this Agreement is full
payment for Services and EMPLOYEE shall receive no additional
compensation for extraordinary services unless otherwise
authorized. EMPLOYEE's entire compensation package will be
reviewed annually by the Compensation Committee of the Board of
Directors, a practice which is consistent with COMPANY's Executive
Compensation Program.
3.1.1 Base
Compensation. COMPANY agrees to pay EMPLOYEE an
annualized base salary of THREE HUNDRED SEVENTY-FIVE THOUSAND
DOLLARS AND NO CENTS ($375,000) less applicable withholdings,
payable in equal installments no less frequently than
semi-monthly.
3.1.2 Cash
Incentive Bonus. EMPLOYEE shall be eligible to
participate in the COMPANY's Incentive Bonus Plans, as in effect
from time to time, for an annual or more frequent cash incentive
bonus, subject to applicable withholdings, of SEVENTY-FIVE (75%)
Percent of EMPLOYEE's annual base salary, for achievement of
target-level performance, and a maximum bonus of not less than
NINETY-NINE (99%) Percent of EMPLOYEE's base salary for achievement
of extraordinary performance thereunder, and subject to approval by
COMPANY's Compensation Committee of the Board . Any cash
incentive bonus shall accrue and become payable to EMPLOYEE only if
EMPLOYEE is employed with COMPANY on the last day of the fiscal
year for which the cash incentive bonus is calculated.
3.1.3 Stock
Options. Based upon satisfactory performance, under the Plan,
COMPANY expects that EMPLOYEE will qualify for grants of options to
acquire common stock of COMPANY subject to determination by the
Board of Directors, of an amount which is consistent with COMPANY's
Executive Compensation Program. Any such grants shall also be
subject to performance considerations as well as the determination
of the Board of Directors.
3.2 Business Expenses. COMPANY shall
reimburse EMPLOYEE for business expenses reasonably incurred in
performing Services according to COMPANY's Expense Reimbursement
Policy.
3.3 Additional Benefits. COMPANY
shall provide EMPLOYEE those additional benefits normally granted
by COMPANY to its employees subject to eligibility requirements
applicable to each benefit. COMPANY has no obligation to
provide any other benefits unless provided for in this Agreement.
Currently COMPANY provides major medical, dental, life, salary
continuation, long term disability benefits and eligibility to
participate in COMPANY's 401(k) plan.
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3.4 Vacation. EMPLOYEE shall accrue
vacation equal to TWENTY (20) days per year, at the rate of
approximately 1.67 days per month. The time or times for such
vacation shall be selected by EMPLOYEE and approved by the
President and Chief Executive Officer of COMPANY.
4.
TERMINATION
4.1 Circumstances Of Termination.
This Agreement and the employment relationship between COMPANY and
EMPLOYEE may be terminated as follows:
4.1.1 Death.
This Agreement shall terminate upon EMPLOYEE's death,
effective as of the date of EMPLOYEE's death.
4.1.2
Disability. COMPANY may, at its option, either
suspend compensation payments or terminate this Agreement due to
EMPLOYEE's Disability if EMPLOYEE is incapable, even with
reasonable accommodation by COMPANY, of performing the Services
because of accident, injury, or physical or mental illness for ONE
HUNDRED EIGHTY (180) consecutive days, or is unable or shall have
failed to perform the Services for a total period of ONE HUNDRED
EIGHTY (180) within a TWELVE (12) month period, regardless of
whether such days are consecutive. If COMPANY suspends
compensation payments because of EMPLOYEE's Disability, COMPANY
shall resume compensation payments when EMPLOYEE resumes
performance of the Services. If COMPANY elects to terminate
this Agreement due to EMPLOYEE's Disability, it must first give
EMPLOYEE TEN (10) WORKING days advance written notice.
4.1.3
Discontinuance Of Business. If COMPANY discontinues
operating its business, this Agreement shall terminate as of the
last day of the month on which COMPANY ceases its entire operations
with the same effect as if that last date were originally
established as termination date of this Agreement.
4.1.4 For
Cause. COMPANY may terminate this Agreement without
advance notice for Cause. For the purpose of this Agreement,
"Cause" shall mean any failure to comply in any material respect
with this Agreement or any Agreement incorporated herein; personal
or professional misconduct by EMPLOYEE (including, but not limited
to, criminal activity or gross or willful neglect of duty); breach
of EMPLOYEE's fiduciary duty to the COMPANY; conduct which
threatens public health or safety, or threatens to do immediate or
substantial harm to COMPANY's business or reputation; [or any other
misconduct, deficiency, failure of performance, breach or default,
reasonably capable of being remedied or corrected by EMPLOYEE. To
the extent that a breach pursuant to this Section 4.1.4 is curable
by EMPLOYEE] without harm to COMPANY and/or it's reputation,
COMPANY shall, instead of immediately terminating EMPLOYEE pursuant
to this Agreement, provide EMPLOYEE with notice of such breach,
specifying the actions required to cure such breach, and EMPLOYEE
shall have ten (10) days to cure such breach by performing the
actions so specified. If EMPLOYEE fails to cure such breach
within the ten (10) day period COMPANY may terminate this Agreement
without further notice. COMPANY's exercise of its right to
terminate under this section shall be without prejudice to any
other remedy to which COMPANY may be entitled at law, in equity, or
under this Agreement.
4.1.5. Resignation by
EMPLOYEE for Good Reason. This Agreement and employment
relationship is terminable by either party, with or without cause,
including but not limited to resignation by EMPLOYEE for Good
Reason, at any time upon THIRTY (30) days' advance written notice
to the other party. For purposes of this Agreement, "Good
Reason" shall mean the occurrence of any of the following without
EMPLOYEE's express written consent: (i) a significant reduction of
EMPLOYEE's material duties, authorities or responsibilities as
provided in this Agreement; provided however, except in the Change
of Control context, EMPLOYEE's reporting structure may be realigned
at any time, as described in Section 1.1.1, without triggering this
definition of Good Reason; (ii) a reduction in Base Compensation or
Cash Incentive Bonus other than a one-time reduction of not more
than 10% that also is applied to substantially all other senior
executives at the COMPANY; (iii) a material reduction in EMPLOYEE's
benefits as compared to the benefits in effect on the Effective
Date; (iv) EMPLOYEE must perform a significant portion of his
duties at a location other than COMPANY headquarters; or (v)
COMPANY headquarters are relocated more than 50 miles from the
current location in Santa Barbara, California.
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4.1.6. Change of
Control . If employment is terminated within TWELVE (12)
months after the occurrence of any of the events described as a
Change of Control under the provisions of the Long-Term Incentive
Plan as then defined at the time of such Change of Control,
EMPLOYEE shall be entitled to severance compensation pursuant to
Section 4.2.6 (i),(ii),(iii),(iv) and (v).
4.2 EMPLOYEE's Rights Upon
Termination
4.2.1 Death
. Upon termination of this Agreement because of death of
EMPLOYEE pursuant to Section 4.1.1 above, COMPANY shall have no
further obligation to EMPLOYEE under the Agreement except to
distribute to EMPLOYEE's estate or designated beneficiary any
unpaid compensation and reimbursable expenses, less applicable
withholdings, owed to EMPLOYEE prior to the date of EMPLOYEE's
death.
4.2.2
Disability. Upon termination of this Agreement
because of Disability of EMPLOYEE pursuant to Sections 4.1.2 above,
COMPANY shall have no further obligation to EMPLOYEE under the
Agreement except to distribute to EMPLOYEE's estate or designated
beneficiary any unpaid compensation and reimbursable expenses, less
applicable withholdings, owed to EMPLOYEE prior to the date of
EMPLOYEE's termination due to Disability.
4.2.3
Discontinuance Of Business. Upon termination of this
Agreement because of discontinuation of COMPANY's business pursuant
to Section 4.1.3, COMPANY shall have no further obligation to
EMPLOYEE under the Agreement except to distribute to EMPLOYEE any
unpaid compensation and reimbursable expenses, less applicable
withholdings, owed to EMPLOYEE prior to the date of termination of
this Agreement.
4.2.4 Voluntary
Termination without Good Reason; Termination With Cause.
Upon voluntary termination of EMPLOYEE's employment by
EMPLOYEE without Good Reason or termination of EMPLOYEE's
employment for Cause pursuant to Section 4.1.4, COMPANY shall
have no further obligation to EMPLOYEE under this Agreement except
to distribute to EMPLOYEE:
i. Any compensation and reimbursable expenses owed to
EMPLOYEE by COMPANY through the termination date, less applicable
withholdings; and
ii. Severance compensation as provided for in COMPANY's
Severance Policy, if any, less applicable withholdings.
4.2.5 Termination
Without Cause; Resignation for Good Reason; Non-renewal of
Agreement by COMPANY. Upon termination of EMPLOYEE's
employment by COMPANY without Cause pursuant to Section 4.1.4, or
if EMPLOYEE terminates this Agreement at any time for Good Reason,
or if Company does not renew the term of the Agreement as provided
in Section 2 above, then COMPANY shall have no further obligation
to EMPLOYEE under this Agreement except to distribute to
EMPLOYEE:
i. Any compensation then due EMPLOYEE in accordance
with Section 3.1.1 , and reimbursable expenses owed by COMPANY to
EMPLOYEE through the termination date, less applicable
withholdings; and
ii. Reimbursement of full COBRA premium for TWENTY-FOUR
(24) months following termination. Should EMPLOYEE
discontinue COBRA coverage or elect alternative coverage, a cash
payment will not be provided in lieu of payment of
premium;
iii. A pro-rated share of the Cash Incentive Bonus that
would be due to EMPLOYEE if EMPLOYEE had remained employed with
COMPANY through the last day of the fiscal year for which the cash
incentive bonus is calculated, less applicable withholdings and/or
any other applicable bonus or compensation progra
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