Attached files
| file | filename |
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| 8-K - Symmetry Medical Inc. | v208306_8k.htm |
| EX-10.1 - Symmetry Medical Inc. | v208306_ex10-1.htm |
| EX-10.3 - Symmetry Medical Inc. | v208306_ex10-3.htm |
| EX-10.4 - Symmetry Medical Inc. | v208306_ex10-4.htm |
Exhibit
10.2 – Employment Agreement with Thomas J. Sullivan.
Mr.
Thomas J. Sullivan
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Re:
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Offer
of Employment with Symmetry Medical,
Inc.
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Dear
Tom:
On behalf of the Board of Directors of
Symmetry Medical, Inc., I am pleased to offer you the position of Symmetry’s
President and Chief Executive Officer. In your capacity as President
& CEO you will report directly to the Board of Directors and be responsible
for all facets of Symmetry’s business. Other terms and conditions of
this offer are set forth below for your review.
Your employment with Symmetry will
begin on January 17, 2011 (the “Commencement Date”). You will be appointed to the Board of Directors
of the Company within thirty (30) days of the
Commencement Date. We anticipate that you will be appointed to
the Board of Directors of many or all of our
subsidiaries. Compensation for service on any and all boards is
included in the terms set forth below.
You will
be based at our Warsaw, Indiana corporate offices, although would obviously
travel to all of Symmetry’s facilities and offices worldwide. You
will be expected to devote your full business time to the performance of your
duties to Symmetry.
We offer
a very competitive compensation package, consisting of both cash and equity
compensation, as well as a comprehensive benefits package. Details
regarding the compensation package to which you will be entitled upon acceptance
of our offer are set forth below:
Base
Salary
Your initial annual salary will be
$500,000. Your salary will be subject to periodic review by the Board
of Directors and will not be decreased during your employment without your
consent (the “Base Salary”).
Bonus
Plan
You will
be eligible to participate in the Company’s Incentive Bonus Plan, with a target
award at 70% of your Base Salary. Payment amounts under the Bonus
Plan are dependent upon your and the Company’s achievement of performance
metrics established by the Board of Directors with your input. Your
target bonus percent may be adjusted from 0 – 2 times the target, depending on
performance against those targets. We will guarantee you a bonus
during 2011 of 50% of your target bonus level.
Sign-On
Bonus
We
understand that you will forfeit certain amounts of compensation if you leave
your current employer prior to February 14, 2011; we also want you to begin your
employment with the beginning of 2011. To enable you to avoid that
loss, while starting at Symmetry on the Commencement Date, we will pay you the
amounts set forth in this paragraph, as well as additional restricted stock as
set forth in the following paragraph. Within thirty (30) days of the
Commencement Date, we will pay you $100,000, less applicable tax and other
deductions (the “Sign-On Bonus”) in cash or stock, at your election. The Sign-On
Bonus shall be repaid to the Company within thirty (30) days following any
termination of your employment (the date of any such termination, the
“Termination Date”) (x) by you without Good Reason (and not due to death or
Disability) as that term is defined in the Executive Benefit Agreement; or (y)
by Symmetry for Cause as that term is defined in the Executive Benefit
Agreement, in either case, prior to 24 months after the Commencement
Date. The amount that must be repaid is
100% of the Sign-On Bonus if such termination occurs on or before December 31,
2011 and 50% of the Sign-On Bonus if such termination occurs on or after January
1, 2012. If your employment begins after the Commencement Date
defined above, the Sign-On Bonus will not be offered.
Restricted Stock Grant and
Program
Within thirty (30) days of the
Commencement Date the Board of Directors will grant to you shares of Symmetry
common stock valued at $1,500,000 on the date of grant, pursuant to the
Company’s 2004 Equity Incentive Plan (the “Restricted Stock
Grant”). The Restricted Stock Grant will be vested on two different
terms described more fully below. Actual number of shares granted and
vesting is based on both the passage of time and performance.
This
figure contains $450,000 in value that is designed to compensate you for
compensation lost as a result of leaving your current employer prior to February
14, 2011 and meeting the Commencement Date. Accordingly, if your
employment begins after the Commencement Date, then the Restricted Stock Grant
will equal $1,050,000 rather than $1,500,000. This reduction will
reduce the first of the three “Time Based Vesting” groups from $300,000 to $0
and reduce the remaining 2 annual vesting groups by $75,000 each.
Time Based
Vesting
$900,000
in value of the Restricted Stock Grant (the “Time Based Grant”) will vest in
three amounts on different time periods. The first 1/3 of the Time
Based Grant will vest immediately. One half of the remaining Time
Based Grant will vest on the first anniversary of the Commencement Date and the
other half will vest on the second anniversary of the Commencement Date. If your separation is triggered by the
Company without “Cause” or by you for “Good Reason,” as defined in the Executive
Benefit Agreement set forth in Exhibit A to this letter, or if you die or become
disabled prior to the first anniversary of the Commencement Date then 50% of the
total Time Based Grant will vest. Should your separation be triggered
by the Company without “Cause” or by you for “Good Reason,” as defined in the
Executive Benefit Agreement set forth in Exhibit A to this letter, or if you die
or become disabled subsequent to the first anniversary of the Commencement Date
then all of the remaining unvested Time Based Grant will be
vested.
Performance Based
Vesting
The other
$600,000 of the Restricted Stock Grant (the “Performance Grant”) will be subject
to modification in number of shares based on performance against criteria
established by the Board, with your input, for 2011. Performance
above the established criteria will increase the number of shares in the
Performance Grant up to 200% of the target
amount, whereas performance below the criteria will result in the
forfeiture of some or all of the Restricted Stock Grant on a sliding
scale. The Board will work with you to allocate an additional number
of shares above 200% of the Performance Grant that will be based on “stretch”
goals for the year. All goals will be established at the April 2011
meeting of the Board of Directors so you will have ninety (90) days to become
established in the business and comfortable with your ability to achieve certain
goals in the year. Once the number of shares in the Performance Grant
is established those shares will fully vest 2 years thereafter.
The
Performance Grant represents a component of annual
compensation. Annually thereafter you will be eligible to receive
grants of Restricted Stock under the Plan in amounts comparable in value to the
Performance Grant. As with the Performance Grant, the actual grant in
any subsequent year will be reflective of performance milestones approved by the
Board of Directors.
Employee
Benefits
During
your employment you and your eligible dependents will be entitled to participate
in all group health, life, short and long term disability, 401k, automobile and
other employee benefit and perquisite plans and programs in which other senior
executives of the Company participate, as in effect from time to time and to the
extent consistent with applicable law and the terms of the applicable plans and
programs. We will also reimburse you for reasonable business expenses
incurred in the performance of your duties hereunder. In each full
calendar year you will be entitled to not less than 25 days of paid vacation
time in accordance with the Company’s policies.
In
addition, within thirty (30) days following the Commencement Date we will
reimburse you for the reasonable legal fees and expenses incurred in connection
with negotiating and documenting the terms of your employment with Symmetry,
subject to receiving customary back-up documentation regarding such fees and
expenses and an aggregate cap of $10,000.
We will
also offer you and your eligible dependents Company-paid, post-retirement
supplemental health insurance which will be designed to approximate the benefits
provided under the Company’s group health plans as they exist from time to time
through the time when you and/or your spouse are eligible for other coverage
(e.g. Medicare or another employer’s group plan). This benefit will
be available if your separation is triggered by retirement after you attain age 55, or if you die or become disabled at
any time during your employment. Further information regarding
this benefit is contained in the attached Executive Benefit Agreement under
Exhibit
A1.
Relocation
Assistance
We
understand that you may not relocate to Warsaw, Indiana. In the event
that you do not, we will reimburse you for reasonable travel and housing
expenses related to visits to Warsaw from your home.
In the
event you decide to relocate your primary residence to Warsaw, we will reimburse
you for the cost of reasonable moving expenses incurred in the cost of
commissions and professional services you incur in selling your current home,
purchasing a new home and moving your primary residence to a location within
fifty (50) miles of Warsaw (the “Relocation Expenses”). To the extent that the Relocation Expenses
result in your recognition of additional taxable income, you will be fully
grossed-up for any applicable taxes.
Term of
Employment
Pursuant
to Indiana law your employment is “at will” so either party is able to terminate
the employment relationship at any time. That said, the Company will
provide you with a comprehensive severance package pursuant to the terms of the
Executive Benefit Agreement set forth in Exhibit A1 attached
hereto. Those benefits are available to you if your employment ends
for any reason other than for “Cause” or your decision to terminate for any
reason other than “Good Reason” as those terms are defined in the Executive
Benefit Agreement. They include: severance equal to the sum of your Base Salary payable over 12
months (two times the sum of your Base
Salary plus your target bonus payable in a lump
sum if the termination relates to a change in control); a pro rata amount
of your annual bonus (assuming you had achieved
all individual objectives), reflective of the number of days you were
employed during the calendar year in which termination occurred; and
reimbursement of COBRA payments you make during the year following termination
(or 24 months in the event of termination following a change in
control). There are some important additional terms in the Executive
Benefit Agreement, and its terms will control.
Tom, we
are very excited about your joining the team at Symmetry. We make
this offer contingent upon there being no attempt to enforce any non-competition
agreements to which you are a party and it is expected that you will honor any
such agreements.
We
believe that your leadership would help achieve our growth objectives and we
welcome the chance to work with you in the future. In the meantime,
if you have any questions or comments regarding any aspect of this offer please
contact me at your convenience.
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Sincerely,
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s/ Craig B. Reynolds
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Craig
B. Reynolds
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Chairman
of the Board of Directors,
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Symmetry
Medical, Inc.
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Accepted:
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s/Thomas J. Sullivan
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EXHIBIT A1
EXECUTIVE
BENEFIT AGREEMENT
This
Executive Benefit Agreement (the "Agreement") is made and entered into as of
January 17, 2011 ("Effective Date") by and between Symmetry Medical, Inc., a
Delaware corporation, and Thomas J. Sullivan (the "Executive").
WITNESSETH
WHEREAS, Executive is an executive
officer of the Symmetry Medical, Inc. and/or its subsidiaries or other
affiliates (together, the "Company"); and
WHEREAS, the Company believes that
Executive has made and will continue to make valuable contributions to the
productivity and profitability of the Company; and
WHEREAS, the Company desires to
encourage Executive to continue to make such contributions and not to seek or
accept employment elsewhere; and
WHEREAS, the Company, therefore,
desires to assure Executive of certain benefits in the event of any termination
or significant redefinition of the terms of his employment with the
Company;
NOW, THEREFORE, in consideration of the
foregoing and of the mutual covenants herein contained and the mutual benefits
herein provided, the Company and Executive hereby agree as follows:
1. Employment
Term. The term of Executive's employment under this Agreement
shall commence on the Effective Date and continue until terminated at the
election of either the Company or Executive by giving notice of termination
pursuant to Section 3 or by Executive's death.
2. Qualifying
Terminations. The Company shall provide Executive with the
severance benefits set forth in Section 4 of this Agreement upon any Qualifying
Termination. As used in this Agreement, "Qualifying Termination"
shall mean Executive's resignation for Good Reason, as defined in Section 4.g,
or termination by the Company for any reason except the following:
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a.
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Termination
by reason of Executive's Disability. As used in this Agreement,
"Disability" means Executive's inability by reason of illness or other
physical or mental condition to perform the duties required by his
employment for any consecutive one hundred and twenty day (120) day
period.
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b.
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Termination
for Cause. As used in this Agreement, the term "Cause" shall
mean the occurrence of one or more of the following
events:
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i.
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Executive's
conviction of a felony or of any crime involving moral
turpitude;
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ii.
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Executive's
engaging in any fraudulent or dishonest conduct in his dealings with, or
on behalf of, the
Company;
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iii.
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Executive's
gross or habitual negligence in the performance of his employment duties
for the Company;
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iv.
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Executive's
material violation of the Company's business ethics or
conflict-of-interest policies, as such policies currently exist or as they
may be amended or implemented during Executive's employment with the
Company; or
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v.
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Executive's
misuse of alcohol or illegal drugs which interferes with the performance
of Executive's employment duties for the Company or which compromises the
reputation or goodwill of the
Company.
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In
addition, severance benefits shall not be payable if Executive's employment
terminates because of his resignation without Good Reason or because of his
death.
3. Procedural and Notice
Obligations. Any termination by Company of Executive's
employment or any resignation by Executive shall be communicated by a written
notice to the other party hereto. If the Company gives notice of
termination, the notice must state whether the Company believes the termination
is a Qualifying Termination and, if not a Qualifying Termination, the specific
provisions of this Agreement relied upon and the facts and circumstances, in
reasonable detail, claimed to provide a basis for such
termination. If Executive gives notice of termination, the notice of
termination must state whether Executive believes the termination to be a
Qualifying Termination and, if so, the specific provisions of this Agreement
relied upon and the facts and circumstances, in reasonable detail, claimed to
provide a basis for such termination. For the Executive to establish
a resignation for Good Reason: (i) the Executive must within ninety (90) days of
the initial occurrence of the event give written notice to the Company of such
occurrence; (ii) the Company must have failed to remedy that occurrence within
thirty (30) days after receiving such notice; and (iii) the Executive must
resign no later than sixty (60) days after giving such notice.
4. Severance
Benefits. Following a termination of employment for any
reason, Executive shall be paid, on the next regular payday, his earned but
unpaid salary, at his then effective rate, for services performed through the
date of termination and, within thirty (30) days following the termination, any
earned but unpaid incentive bonus for any previous completed year. In
addition, upon a Qualifying Termination, Executive shall receive the following
benefits ("Severance Benefits"), less any amounts required to be withheld under
applicable law, for twelve months following the Qualifying Termination (the
"Severance Period"), subject to the conditions set forth in Section 3,
Executive's execution of a Release Agreement, and the expiration of any
revocation period therein related to a Qualifying Termination.
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a.
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Company
shall pay to Executive an amount equal to Executive's annual base
salary as it existed prior to the Qualifying
Termination (which shall be at least equal to the Executive's base salary
on the date of this Agreement and any higher amount established after the
date of this Agreement). The payments due hereunder shall be
made on the Company's normal and customary pay days during the Severance
Period.
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b.
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If the Qualifying Termination occurs within six
(6) months preceding or twenty-four
(24) months following a Change in
Control, as defined in Section 4.g, in lieu of the payments described in Section 4.a
above and 4.c below, the Company shall pay Executive an amount equal to
two (2) times the sum of Executive's annual base salary plus his target
annual bonus as each existed prior to the Qualifying Termination (which
shall be at least equal to the Executive's base salary and target annual
bonus on the date of this Agreement and any higher amount established
after the date of this Agreement). Such amount shall be paid to
the Executive in a single lump sum. In addition, the number of months in the Severance Period
shall be twenty-four (24) rather than
twelve (12).
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c.
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Within
thirty (30) days following the last day of any computation period under an
incentive bonus plan or similar plan, Executive shall be paid a lump sum
payment equal to (i) any bonus to which Executive would have been entitled
if Executive had remained employed through the payment date and had
achieved all individual performance objectives, multiplied by (ii) a
fraction, the denominator of which is the number of days in any such
computation period and the numerator of which is the number of days during
the computation period the Executive was employed by the
Company. By way of example, should the computation period be
one year, during which the Executive worked 75 days, then the fraction
would be 75/365.
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d.
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The
following benefits and payments shall be provided during the Severance
Period. The Company shall reimburse Executive for any amounts
paid by Executive for COBRA continuation coverage for himself and his
eligible dependents, reduced by an amount equal to the payments Executive
made for such coverage immediately prior to the Qualifying
Termination. If Executive's right to COBRA continuation
coverage ends because Executive has enrolled in a group medical plan
offered by a subsequent employer, Executive's reimbursement under this
subsection shall end at the same time. If Executive's COBRA continuation
coverage expires because Executive has received the maximum of 18 months
of continuation coverage, the Company will continue to pay Executive the
same monthly reimbursement amount for the remaining months in the
Severance Period. Following the exhaustion of COBRA benefits,
the Company will provide to Executive and his eligible dependents a
supplemental medical benefit plan that approximates the benefits provided
to its employees under its group medical plan(s) as they exist from time
to time (the “Extended Health Benefits”). The Extended Health
Benefits will be provided through the date that Executive or his spouse is
eligible for other health care benefits, including but not limited to
those offered by another employer or the state or federal
governments.
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e.
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If,
as of the date Executive's employment terminates, Executive is a "key
employee" within the meaning of Section 416(i) of the Internal Revenue
Code (the "Code") and the Company has stock that is publicly traded on an
established securities market or otherwise, any payment that constitutes
deferred compensation because of employment termination will be suspended
until the first day of the seventh month following the month in which
Executive's last day of employment occurs. "Deferred
compensation" means compensation provided under a nonqualified deferred
compensation plan as defined in, and subject to, Section 409A of the
Code.
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f.
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In the event that any benefits payable to the
Executive as a result of a Change in Control (i) constitute “parachute
payments” within the meaning of Section 280G of the Code, and (ii) but for
this Section 4.f, would be subject to the excise tax imposed by Section
4999 of the Code, then any Change in Control benefits hereunder shall be
either (x) delivered in full, or (y) delivered as to such lesser extent
which would result in no portion of such benefits being subject to excise
tax under Section 4999 of the Code, whichever of the foregoing amounts,
taking into account the applicable federal, state and local income and
employment taxes and the excise tax imposed by Section 4999 of the Code
(and any equivalent state or local excise taxes), results in
the receipt by the Executive on an after-tax basis, of the greatest amount
of benefits, notwithstanding that all or some portion of such benefits may
be taxable under Section 4999 of the Code. Unless the Company
and the Executive otherwise agree in writing, any determination required
under this Section 4.f will be made in writing by independent public
accountants as the Company and the Executive agree (the “Accountants”),
whose determination will be conclusive and binding upon the Executive and
the Company for all purposes. For purposes of making the
calculations required by this Section 4.f, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and
may rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code. The Company
and the Executive agree to furnish to the Accountants such information and
documents as the Accountants may reasonably request in order to make a
determination under this provision. The Company will bear all
costs the Accountants may reasonably incur in connection with any
calculations contemplated by this provision. Any reduction in
payments and/or benefits required by this provision shall occur in the
following order: (1) reduction of cash payments; (2) reduction of vesting
acceleration of equity awards; and (3) reduction of other benefits paid or
provided to the Executive. In the event that acceleration of
vesting of equity awards is to be reduced, such acceleration of vesting
shall be cancelled in the reverse order of the date of grant for the
Executive’s equity awards. If two or more equity awards are
granted on the same date, each award will be reduced on a pro-rata
basis.
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g.
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As
used in this Agreement, a "Change in Control" of the Company
means:
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i.
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The
acquisition by any individual, entity or group (a "Person") of beneficial
ownership of fifty percent (50%) or more of the combined voting power of
the then outstanding voting securities of the
Company.
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ii.
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The
replacement of a majority of members of the Board of Directors during any
12-month period by members whose appointment or election is not endorsed
by a majority of the members of the Board of Directors prior to the date
of the appointment or election;
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iii.
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A
reorganization, merger or consolidation (a "Combination"), in each case,
unless, following such
Combination:
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a.
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more
than fifty percent (50%) of the then combined voting power of the
securities of the corporation resulting from such Combination is
beneficially owned by all or substantially all of the individuals and/or
entities who were the beneficial owners of the outstanding Company common
stock immediately prior to such Combination in substantially the same
proportions as their ownership of voting power immediately prior to such
Combination, and
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b.
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at
least a majority of the members of the board of directors of the
corporation resulting from such Combination were members of the Company's
Board at the time of the execution of the initial agreement providing for
such Combination;
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iv.
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A
complete liquidation or dissolution of the Company;
or
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v.
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The
sale or other disposition of all or substantially all of the assets of the
Company.
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Despite
any other provision of this Section 4.f to the contrary, an event shall not
constitute a Change in Control if it does not constitute a change in the
ownership or effective control, or in the ownership of a substantial portion of
the assets of, the Company within the meaning of Section 409A(a)(2)(A)(v) of the
Code and its interpretive regulations.
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h.
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As
used herein, any voluntary resignation by Executive shall be for "Good
Reason" if the resignation follows any of these events: a material
reduction in the Executive's base salary or target bonus from its level as
of the date of this Agreement or any higher level established hereafter
(in a single or multiple reductions); a material reduction in the
Executive's duties or responsibilities from those that exist on the date
of this Agreement or as established hereafter; or a material breach or
repudiation by the Company of its obligations under this Agreement or any
other agreement prescribing the terms and conditions of his
employment.
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5. Settlement and Waiver of Claims by
Executive. Executive acknowledges and agrees that Executive's
acceptance of the Company's payment of the severance benefits pursuant to
Section 4 of this Agreement shall be deemed to constitute a full settlement and
discharge of any and all obligations of the Company to Executive arising out of
this Agreement, Executive's employment with the Company and/or the termination
of Executive's employment with the Company, except for any vested rights
Executive may have under any insurance, stock option or equity compensation plan
or any other employee benefit plans sponsored by the
Company. Executive further acknowledges and agrees that as a
condition to receiving any of the severance benefits pursuant to Section 4 of
this Agreement, Executive will execute and not revoke a release agreement in
form and substance reasonably satisfactory to the Company pursuant to which
Executive will release and waive any and all claims against the Company (and its
officers, directors, shareholders, insurers, employees and representatives) that
exist as of the date of the release, including but not limited to any and all
claims arising out of this Agreement, Executive's employment with the Company,
and/or the termination of Executive's employment with the Company, and all
claims under any federal, state and local laws including the Age Discrimination
in Employment Act of 1967, as amended (the "Release
Agreement"). Notwithstanding the foregoing, the Release Agreement
shall not affect or relinquish (a) any vested rights Executive may have under
any insurance, stock option or equity compensation plan, or other employee
benefit plan sponsored by the Company, (b) any claims for reimbursement of
business expenses incurred prior to the employment termination date, (c) any
rights to severance benefits under Section 4 of this Agreement, (d) any claims for indemnification and/or coverage
under the Company’s Directors and Officers liability insurance coverage and
(e) any claims that cannot as a matter of law be
released. Company shall provide Executive with the Release Agreement
within ten (10) days of the date of any Qualifying Termination, and severance benefits shall commence (or be paid) on
the payroll date commensurate with or next following the 45th day following the
Qualifying Termination.
6. Executive's
Obligations. To induce the Company to enter into this
Agreement, Executive agrees as follows:
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a.
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Covenants
Not To Compete. During
Executive's employment with the Company and for a period of twelve (12)
months immediately after the termination of his employment, Executive will
not, directly or indirectly, without the prior written consent of the
Board of Directors (which consent will not be unreasonably
withheld):
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i.
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accept
employment with, or perform any services for any Competitor of the Company
or any of the Company's top ten (10) customers based on sales volume in
the prior fiscal year. For the purposes of this Section 6, the
term "Competitor"
means a company that manufactures orthopedic or aerospace products or
services that compete in the marketplace with products or services that
the Company provides at the time Executive's employment
ends;
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ii.
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accept
employment with or perform any services for any of the Company's customers
with whom Executive had contact within the last two (2) years of his
employment, if doing so would in any way reduce the level of business the
customer does with the Company or otherwise adversely affect the Company's
business relationship with the
customer;
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iii.
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accept
employment with or perform any services for any Competitor anywhere within
the Restricted Geographic Area (a) in the same or similar capacity or
function to that in which Executive worked for the Company, (b) in any
executive, officer or senior management capacity or function, (c) in any
sales, sales management, or customer management capacity or function, (d)
in any product development or product improvement capacity, or (e) in any
other capacity in which Executive's knowledge of the Company's
confidential information or the customer goodwill Executive helped to
develop on behalf of the Company would facilitate or support Executive's
work. For purposes of this Agreement, the term "Restricted
Geographic Area" means (i) each and every State of the United States of
America in which the Company is manufacturing or selling any of its
products or services at the time Executive's employment ends; and (ii)
each and every country in which the Company is manufacturing or selling
any of its products and services at the time Executive's employment
ends. However, if the Competitor has separate divisions,
business units or segments, some of which are not competitive with the
business of the Company, nothing herein shall prohibit Executive from
being employed by or working for only that segment of the business that is
not competitive with the business of the Company, provided Executive's
work does not involve any products or services that compete with the
Company's products and services;
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iv.
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urge,
induce or seek to induce any of the Company's customers to reduce or
terminate their business with the Company or in any manner interfere with
the Company's business relationships with its
customers;
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v.
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urge,
induce or seek to induce any of the Company's customers with whom
Executive had contact during the last two (2) years of his employment with
the Company, to reduce or terminate their business with the Company or in
any manner interfere with the Company's business relationships with its
customers;
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vi.
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acquire
or maintain an ownership interest in any Competitor, except passive
ownership of up to two percent (2%) of any publicly traded
securities;
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vii.
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either
on his own account or for any other person, firm or company solicit, hire,
employ or attempt to solicit, hire or employ, or endeavor to cause any
employee of the Company to leave his employment, or to induce or attempt
to induce any such employee to breach any employment agreement with the
Company.
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viii.
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urge,
induce or seek to induce any of the Company's independent contractors,
subcontractors, consultants, vendors or suppliers to reduce, terminate or
modify in any way their relationship with the
Company;
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ix.
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disparage
the Company, its directors, officers, employees, products, facilities or
other persons or things associated with the Company or otherwise publish
or communicate any information or opinions that would reasonably be
considered to be derogatory or critical of the Company, its Directors,
officers, employees, products, facilities or other persons or things
associated with the Company. The Company and its Directors and officers will
likewise neither disparage the Executive nor otherwise publish or
communicate any information or opinions that would reasonably be
considered to be derogatory or critical of the
Executive. Notwithstanding the foregoing, the Company shall not
be in breach of this provision for including truthful information in any
periodic or other filing with the
SEC.
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b.
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Confidentiality. Executive
will keep confidential and not, directly or indirectly, divulge or use for
any purpose whatsoever (other than in the performance of his duties for
the Company or as compelled by law), any of the Company's confidential
information, business secrets or trade secrets including, but not limited
to, information concerning such matters as the Company's products,
services, customers, finances and operations. All of the
Company's confidential information, business secrets and trade secrets
shall be the sole and exclusive property of the
Company. Executive's confidentiality obligations shall not
apply to any information that through lawful means has become generally
known outside the Company or is readily available in the public
domain.
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Upon the
termination of Executive's employment with the Company, or any time at the
Company's request, Executive shall immediately deliver to the Company any and
all memoranda, notes, records, drawings, manuals, computer programs,
documentation, diskettes, computer tapes, electronic data (in whatever form or
media), and all copies thereof, in Executive's possession or under Executive's
control, whether prepared by Executive or others, containing the Company's
confidential information, business secrets or trade secrets.
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c.
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Disclosure
of Developments. Executive agrees to disclose promptly to
Company all Developments made or conceived by Executive (whether at the business premises
of Company, at home, or elsewhere), either solely or jointly with others,
during Executive’s Employment
Period. "Developments" means all products, methods, inventions,
improvement, concepts, designs, formulas, techniques, processes,
discoveries, know-how, and ideas related to Company's
business.
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d.
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Ownership
of Developments.
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All
Developments made or conceived by Executive (whether at the business of
Company, at home, or elsewhere), either solely or jointly with others,
during Executive’s Employment Period
will be the sole and exclusive property of Company. Executive hereby assigns to Company all of
his rights, title, and interest in any and to all such Developments,
together with any Proprietary Rights related
thereto.
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Both
during Executive’s Employment Period
and thereafter, Executive agrees, at
Company's expense, to take such actions and to sign such applications,
assignments, and other documents as may be reasonably requested by Company
from time to time in order to protect Company's right, title, or interest
in any Developments and/or to obtain or maintain any Propriety Rights
related thereto.
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7. Survival
of Obligations/Extension/Severability/Remedies/Forfeiture.
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Survival
of Obligations. Executive
acknowledges and agrees that his obligations under Section 6 shall survive
the expiration or termination of this Agreement and the termination of his
employment with the Company, irrespective of the reason for the
termination of the Agreement and/or employment. Executive
further acknowledges and agrees that the post-employment restrictions set
forth in Section 6 of this Agreement are and shall be construed as
independent covenants and that no breach of any contractual or legal duty
by the Company shall be held sufficient to excuse or terminate Executive's
obligations under Section 6 of this Agreement or to preclude the Company
from obtaining injunctive or other relief for Executive's violation or
threatened violation of any provision in Section 6, and the existence of
any claim or cause of action by Executive against the Company, whether
predicated on this Agreement or otherwise, shall not constitute a defense
to the Company's enforcement of Executive's obligations under Section 6 of
this Agreement.
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b.
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Extension. In the
event Executive violates any of the restrictive covenants contained in
Section 6, the duration of such restrictive covenant shall automatically
be extended by the length of time during which Executive was in violation
of such restriction.
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c.
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Severability;
Modification of Restrictions. Executive
agrees and understands that the restrictions in Section 6 are reasonable
in light of Executive's position of trust with the Company, the highly
competitive nature of the Company's business and the fact that the Company
has invested substantial time, money and other resources developing the
confidential information, business secrets, trade secrets and
relationships with its customers, employees, vendors and
contractors. Executive also agrees and represents that the
restrictions in Section 6 will not impair his ability to find suitable
subsequent employment. Although Executive and the Company
consider the restrictions contained in Section 6 to be reasonable and
enforceable, Executive and the Company acknowledge and agree that if any
provision of Section 6 is determined to be unenforceable for any reason
(a) such unenforceability shall not affect the enforceability of the
remainder of the Agreement; and (b) the provision shall automatically be
deemed reformed so that it shall have the closest effect permitted by
applicable law to the original form and shall be enforced on that
basis.
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d.
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Remedies. Executive
recognizes that a breach or threatened breach of Section 6 of this
Agreement will give rise to irreparable injury to the Company and that
money damages will not be adequate relief for such injury. For
this reason, Executive agrees that the Company shall be entitled to obtain
injunctive relief, including, but not limited to, temporary restraining
orders, preliminary injunctions and/or permanent injunctions, without
having to post any bond or other security, to restrain or prohibit such
breach or threatened breach, in addition to any other legal remedies which
may be available, including the recovery of money damages. In
addition to all other relief to which it shall be entitled, the Company
shall be entitled to recover from Executive all litigation costs and
attorneys' fees incurred by the Company in any action or proceeding
relating to Section 6 of this Agreement in which the Company prevails in
any respect.
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e.
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Forfeiture. Executive
agrees that if he either fails to fully and completely comply with each
and every provision of Section 6 of this Agreement or challenges the
enforceability of any provision in Section 6, then in such event the
Company shall have the right to discontinue payment of any compensation
that would otherwise be payable to Executive under this Agreement without
any recourse by Executive, and Executive shall be obligated to repay
immediately all amounts the Company already has paid to Executive under
this Agreement. The Company and Executive acknowledge and agree
that such remedy is in addition to, and not in lieu of, any and all other
legal and/or equitable remedies that may be available to the Company in
connection with Executive's breach or threatened breach of Section
6. If Executive fails to comply with this provision, then in
addition to all other relief to which it may be entitled, the Company also
shall be entitled to recover from Executive all litigation costs and
attorneys' fees incurred by the Company in any action or proceeding
relating to this Section 7 in which the Company prevails in any
respect.
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8. Payments Upon Executive's
Death. Should Executive die while any amounts are payable
hereunder, this Agreement shall inure to the benefit of and be enforceable by
Executive's executors, administrators, heirs, devisees and legatees and all
amounts payable hereunder shall be paid in accordance with the terms of this
Agreement to Executive's devisee, legatee or other designee or if there be no
such designee, to his estate.
9. Notices. For
purposes of this Agreement, notices and all other communications provided for
herein shall be in writing and shall be deemed to have been given when delivered
or mailed by United States registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
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If
to Executive:
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Mr. Thomas J. Sullivan
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If to the
Company:
Symmetry
Medical Inc.
3724 N.
St. Rd. 15
Warsaw,
IN 46582
Attention: Chief
Executive Officer
Copy
to: General Counsel
or to
such other address as any party may have furnished to the other party in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
10. Venue, Choice of Law and
Jurisdiction. The validity, interpretation, and performance of
this Agreement shall be governed by the laws of the State of Indiana, except its
choice-of-law provisions. The parties agree that all legal disputes
regarding this Agreement will be resolved by the state or federal courts located
in Ft. Wayne, Indiana, and irrevocably consent to service of process in such
city for such purpose.
11. Waiver, Modification and Complete
Agreement. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by Executive and the Company. No waiver by any
party hereto at any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or any prior or subsequent time. No agreements
or representation, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by any party which are not set forth
expressly in this Agreement.
12. Severability. The
invalidity or unenforceability of any provisions of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
13. Execution in
Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same Agreement.
14. Assignment. This
Agreement is personal in nature and neither of the parties hereto shall, without
the consent of the other, assign or transfer this Agreement or any rights or
obligations hereunder, except as provided herein. Without limiting
the foregoing, Executive's right to receive payments hereunder shall not be
assignable or transferable, whether by pledge, creation of a security interest
or otherwise, other than a transfer by will or by the laws of descent and
distribution as set forth in Section 8 hereof, and in the event of any attempted
assignment or transfer contrary to this Section 14, the Company shall have no
liability to pay any amount so attempted to be assigned or
transferred.
15. Source of Payments; No Lien by
Executive. Any benefits payable under this Agreement shall be
paid solely from the general assets of the Company. Neither Executive
nor Executive's beneficiary shall have interest in any specific assets of the
Company under the terms of this Agreement. This Agreement shall not
be considered to create an escrow account, trust fund or other funding
arrangement of any kind or a fiduciary relationship between Executive and the
Company.
17. Other Agreements. Except as previously disclosed by Executive
to the Company in writing, Executive is not a party to or bound by any
employment agreement, noncompete agreement or confidentiality agreement that
would materially interfere with his ability to perform his duties for the
Company.
18. Indemnification; Insurance
Coverage. Executive will be
indemnified to the maximum extent permitted by law for his acts and omissions as
a director, officer and/or employee of the Company and its
subsidiaries. The Company will cover Executive under Directors and
Officers liability insurance both during his employment and for so long
thereafter as liability exists to the same extent as the Company covers its then
active officers and directors.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered as of the date set forth above.
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SYMMETRY
MEDICAL, INC.
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By:
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