Exhibit 10.9
EMPLOYMENT AGREEMENT
This
Employment Agreement, effective as of June 26, 2006, is by and
between MENTOR Corporation (“COMPANY”), with its
executive offices at 201 Mentor Drive, Santa Barbara, California
93111, and Joseph A. Newcomb (“EMPLOYEE”). Effective as
of December 21, 2007, the Agreement is amended and restated in
its entirety.
RECITALS
COMPANY is in
the business of manufacturing 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 Legal 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 Vice President/General Counsel. EMPLOYEE
shall perform the duties customarily performed by one holding such
position in a similar business as that engaged in by COMPANY. To
the extent that they do not 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 Mentor Corporation.
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, except that EMPLOYEE may serve as a
non-management director on the board of directors of a maximum of
two other public companies. 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.
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 Exchange 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 and shall
continue until terminated as provided in Section 4 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 Twenty-Seven Thousand Dollars ($327,000.)
less applicable withholdings, payable in equal installments no less
frequently than semi-monthly.
3.1.2 Cash
Incentive Bonus. EMPLOYEE shall be eligible for a cash
incentive bonus of up to Seventy-Five (75) Percent of
EMPLOYEE’s annual base salary, subject to applicable
withholdings and subject to approval by COMPANY’s
Compensation Committee and Board of Directors. 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/Equity Grants. Based upon satisfactory performance,
under the COMPANY’S then current stock equity or other
long-term incentive plans, COMPANY expects that EMPLOYEE will
qualify for grants of options or other equity awards to acquire or
receive 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. Employee will be
recommended to receive 125,000 (One Hundred Twenty-Five Thousand)
stock options, issued at the share price at the close of business
on the day the options are approved by the Mentor Board of
Directors. Employee will also be recommended to receive a grant of
20,000 (Twenty Thousand) restricted shares to meet mandatory equity
holding requirements, shares to be issued at the price of stock at
the close of business on the day the grant is approved by the
Mentor 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.
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:
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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 For
Convenience Of Party; Resignation by EMPLOYEE for Good Reason.
This Agreement and employment relationship is terminable by either
party, for convenience, 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,
position, or responsibilities as provided in this Agreement, or the
removal of EMPLOYEE from the position, duties, and responsibilities
contemplated by this Agreement; (ii) a material 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) EMPLOYEE must perform a significant portion of his
duties at a location more than 50 miles from COMPANY headquarters;
or (iv) COMPANY headquarters are relocated more than 50 miles
from the current location in Santa Barbara, California.
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 as defined under the provisions of
the applicable equity or other long-term incentive plan in effect
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 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
that COMPANY shall (i) 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, and (ii) administer the
benefits available to EMPLOYEE’s estate or designated
beneficiary upon death of EMPLOYEE under the COMPANY’s
applicable benefit and incentive plans.
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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 that COMPANY shall (i) distribute to
EMPLOYEE, or 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, and
(ii) administer the benefits available to EMPLOYEE, or
EMPLOYEE’s estate or designated beneficiary, upon disability
of EMPLOYEE under the COMPANY’s applicable benefit and
incentive plans.
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
Termination With Cause. Upon 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. Upon
termination of EMPLOYEE’s employment by COMPANY without cause
pursuant to Section 4.1.5, or if EMPLOYEE terminates this
Agreement at any time for Good Reason, 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
Sections 3.1.1 and 3.1.2, and reimbursable expenses owed by
COMPANY to EMPLOYEE through the termination date, less applicable
withholdings; and
(ii) Payment 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 lie
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