Exhibit 10.8
EMPLOYMENT AGREEMENT
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.”)
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 EXECUTIVE AND ADMINISTRATIVE
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 similarly sized companies and such 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 change 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.
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 on non-renewal at least 120 days
prior to the date of the automatic renewal. In the event the COMPAY
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
($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 for a cash
incentive bonus of up to 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/Equity Grants . 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.
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.
2
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, 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 Sections 4.2.6(i) through
4.2.6(v).
3
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
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.
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 4.1.5, or if EMPLOYEE terminates this Agreement at any
time f
| 
