EXHIBIT 10.7
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is dated March 14, 2002, between:
BIOJECT MEDICAL TECHNOLOGIES INC. ("BMT"), a Corporation incorporated
under the laws of the State of Oregon having its principal offices at
7620 SW Bridgeport Rd., Portland, Oregon 97224
BIOJECT INC., a Corporation incorporated under the laws of the State of
Oregon having its principal offices at 7620 S.W. Bridgeport Road,
Portland, Oregon, 97224 (collectively referred to as the "Company")
AND:
John Gandolfo
62 Terrace Road
Wayne, NJ 07470
(the "Executive")
RECITALS:
1. The Company desires to secure the services and expertise of the
Executive and to ensure the availability of the Executive to the
Company; and
2. The Executive desires to serve in the employ of the Company on a
full-time basis for the period and upon the terms and conditions
provided for in this agreement.
3. The Executive and the Company are parties to that certain Executive
Employment Agreement dated October 3, 2001 relating to Executive's
employment with the Company (the "Original Agreement"). The Executive
and the Company desire to make certain changes to and completely restate
the Original Agreement.
NOW THEREFORE, in consideration of the premises and mutual covenants contained
herein, the parties noted above agree amend, restate and supersede the Original
Agreement as follows:
SECTION 1
1.1 EMPLOYMENT
The Company appoints the Executive to and retains the Executive for the
position of Chief Financial Officer and Vice President of Finance for
the Company, and the
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Executive accepts such appointment. This appointment becomes effective
on October 15, 2001.
1.2 APPROVAL BY THE BOARD
The Company represents, if required by its Bylaws, that the appointment
of the Executive to the position referred to in Section 1.1 will be
approved by the Board of Directors of the Company (the "Board") and that
all corporate action required to effect the appointment will be taken.
1.3 DEFINITIONS
As used in this agreement:
a. "Confidential Information" means any of the company's customers,
employees, products, processes, services, financial information,
marketing techniques, merchandising, business strategies, or
plans, research, development, systems, inventions or any other
trade secret or information pertaining to any of the preceding
terms.
b. "Conflicting Product" means any product, process or service of
any person or organization other than the Company, in existence
or under development, which resembles or competes with the
current or projected products, processes or services of the
Company.
c. "Conflicting Organization" means any person or organization
engaged or about to become engaged in research, development,
production, marketing or selling of a Conflicting Product.
d. "Inventions" means discoveries, concepts, and ideas, whether
patentable or not, including but not limited to, procedures,
processes, methods, formulas, and techniques, as well as
improvements thereof or know-how related thereto, concerning any
present or prospective activities of the Company with which the
Employee becomes acquainted as a result of his employment by the
Company.
SECTION 2 - DUTIES/RESPONSIBILITIES
2.1 DUTIES/RESPONSIBILITIES
During the employment term and any renewals thereof, the Executive will
devote such time, attention, skill and efforts as may be necessary to
assure the full performance of his duties and responsibilities, to the
best of his abilities, with such
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authority as is customarily associated with the position of Chief
Financial Officer and Vice President of Finance. The Executive hereby
accepts and agrees to such engagement of services, and will devote
himself solely to the operation of the Company's business. The Executive
may continue his existing involvement in an advisory or board capacity
with non- competing organizations.
2.2 REPORTING
In conducting his duties under this Agreement, the Executive shall
report to the Chief Executive Officer and Chairman of the Board of
Directors of the Company.
2.3 LOCATION OF EMPLOYMENT
The Executive shall conduct his duties under this Agreement primarily at
the offices of the Company in New Jersey, or such other geographical
locations as shall be reasonably required in order to assure the
efficient and proper operation of the Company. In the event that the
primary location of the Executive's conducting his duties is moved
outside the state of New Jersey, the Executive will be offered a choice
to either relocate to the new location, or to accept a severance package
as described in Section 4.2 (b) (ii).
SECTION 3 - COMPENSATION
3.1 SALARY
For the Executive's services to the Company, the Executive shall be
entitled to receive a minimum annual gross salary of $305,000. Not less
than once during each year of employment, the Chief Executive Officer
shall review the Executive's performance, duties and compensation for
the purpose of promotion and/or increasing the compensation payable to
the Executive. Executive's salary shall be paid in bi-weekly
installments during the calendar year for the term of this Agreement.
The Company shall deduct or withhold from such payments to the Executive
the sums as are required under applicable laws for worker's
compensation, income taxes and other benefits in accordance with Company
policy.
3.2 BONUS PROGRAM
The Executive will receive a signing bonus of $100,000.00, which is
payable within 10 days of the date the Executive begins his employment
with the Company.
Exclusive of the signing bonus described above, the Executive shall not
be eligible to earn a cash bonus until the fiscal year following the
year the Company has
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achieved profitability. In the interim, the Executive is eligible to
earn bonuses in the form of stock options for fiscal years in which the
Company achieves its business performance objectives, including
operational, financial and budget projections. Specific bonus
requirements and objectives will be determined by the Chief Executive
Officer, and are subject to approval by the Board.
3.3 REIMBURSEMENT OF EXPENSES
The Company shall reimburse the Executive for all reasonable
out-of-pocket expenses, including, without limitation, all travel and
entertainment expenses payable or incurred by the Executive in
connection with his duties as an employee of Bioject under this
Agreement. It is the policy of the Company for employees to travel as
inexpensively as possible, utilizing economy airfare and standard rental
cars. All payments or reimbursements shall be made promptly upon
submission by the Executive of vouchers, bills or receipt for all
expenses.
3.4 DISABILITY
Should Executive become disabled and unable to perform substantially all
of his duties under this agreement, as documented by an independent
physician selected jointly by the Executive and the Company, the Company
will continue paying the Executive any bonus earned and previously
awarded, together with his then- current salary at seventy-five percent
(75%) of current salary for a period of not greater than six (6) months
from the disability date. Should the disability continue, payments by
the company will then be reduced to fifty percent (50%) of current
salary for any remaining period of disability not to exceed an
additional six (6) months. Health and dental insurance and other benefit
coverage will continue for the duration of these payments, for a maximum
time period not to exceed twelve (12) months. Should payments to
Executive under worker's compensation and/or disability insurance
programs, when combined with Company payments, exceed seventy-five
percent (75%) of employee's current salary, the Company will reduce its
payment by the excess amount.
SECTION 4 - TERMS OF EMPLOYMENT
4.1 DURATION
The term of this Agreement shall commence on October 15, 2001. It shall
continue for an initial term of two, consecutive one-year periods,
subject to the early termination provisions of this Section 4. Upon
expiration of the initial term, this Agreement will be automatically
renewed for successive one-year terms unless either the Executive or the
Company shall, upon three months written notice to the other, elect not
to renew this Agreement for any year. Non-renewal
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of the Agreement by the Company shall be deemed a termination pursuant
to Section 4.2 (a) (ii), and shall be subject to the severance
compensation provisions related to termination under that Section.
4.2 TERMINATION BY THE COMPANY
(a) The Company may terminate this Agreement:
(i) Immediately if it is determined by the Board of Directors
that the Executive's actions: (1) constitute a material
breach of his duties hereunder, followed by Executive's
failure to cure such breach within a reasonable period of
time after receiving written notice thereof, or (2)
constitute a criminal act reflecting adversely on the
business or reputation of the Company or (3) have resulted
in the Executive, in his personal capacity, being indicted
or sanctioned or his entering into a consent decree, in
connection with any investigation of, allegation of
wrongdoing by, or other formal proceeding against the
Executive, by the United States Food and Drug
Administration or the United States Securities and
Exchange Commission, whether related to the business of
the Company or to any other past employment or activity of
the Executive; or,
(ii) With or without other cause at any time by giving sixty
(60) days prior written notice to the Executive; or
(b) Upon termination of this Agreement by the Company:
(i) Pursuant to Sections 4.2(a)(i):
A. The salary and company sponsored benefits payable
to the Executive pursuant to Section 3.1 shall be
paid in regular bi- weekly installments for sixty
(60) days following the date of termination;
B. All other forms of compensation payable to the
Executive pursuant to Section 3 shall terminate on
the date of termination, except that as
expeditiously as possible following the
termination, the Company shall pay or reimburse the
Executive for all expenses incurred prior to the
termination pursuant to Section 3.3, together with
any bonuses earned by and previously awarded to the
Executive pursuant to Section 3.2 prior to the date
of termination.
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(ii) Pursuant to Section 4.2(a)(ii), Section 2.3, Section 4.1
and Section 4.5:
A. The salary and company sponsored benefits payable
to the Executive pursuant to Section 3.1 shall be
paid for the period commencing on the date of the
termination, and continuing for:
Twelve (12) months following the date of
termination.
B. All other forms of compensation payable to the
Executive pursuant to Section 3 shall terminate,
except that as expeditiously as possible after the
termination the Company shall pay or reimburse the
Executive for all expenses incurred prior to the
termination pursuant to Section 3.3, together with
any bonuses earned by and previously awarded to the
Executive pursuant to Section 3.2, prior to the
date of termination.
4.3 TERMINATION BY EXECUTIVE
The Executive may terminate this Agreement by giving sixty (60) days
prior written notice to the Company. Upon termination of this Agreement
by the Executive pursuant to this Section:
(a) The salary payable to the Executive pursuant to Section 3.1 shall
be prorated to the date of the termination;
(b) Except for the severance package made available to the Executive
pursuant to Section 2.3 and Section 4.2 (b) (ii), all other forms
of compensation payable to the Executive pursuant to Section 3
shall terminate on the date of the termination. As expeditiously
as possible after termination of the Executive's employment, the
Company shall pay or reimburse the Executive for all expenses
incurred prior to the termination pursuant to Section 3.3.
(c) Executive shall utilize his best efforts to continue to perform
all duties assigned by the Company in the manner stated in
paragraph 2.1 hereof, prior to the date of termination.
4.4 TERMINATION UPON DEATH
This Agreement shall terminate immediately upon the Executive's death.
In the event of the Executive's death:
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(a) The Company shall pay to the Executive's estate the salary
otherwise payable to the Executive pursuant to Section 3.1
through the last day of the calendar month in which the
Executive's death occurs and for a period of sixty (60) days
thereafter.
(b) As expeditiously as possible after the Executive's death the
Company shall pay or reimburse the Executive's estate for all
expenses incurred pursuant to Sections 3.3 prior to such death,
together with any bonuses earned by and awarded to the Executive
pursuant to Section 3.2, prior to the date of such death.
4.5 CHANGE IN CONTROL
If at any time during the term of this Agreement a Change in Control (as
defined below) of the Company occurs, then, as to such Change in
Control, the Company will utilize its best efforts to make appropriate
provisions to preserve the rights and interests of the Executive
pursuant to this Agreement. Failure of the Company to preserve such
rights and interests of the Executive will, at the Executives option, be
deemed a termination pursuant to Section 4.2 (a) (ii), and will be
subject to the severance compensation provisions related to termination
under that Section. For purposes of this Agreement, a "Change in
Control" shall mean the occurrence of any of the following events:
(a) The approval by the shareholders of BMT of:
(1) any consolidation, merger or plan of share exchange
involving BMT (a "Merger") as a result of which the
holders of outstanding securities of BMT ordinarily having
the right to vote for the election of directors ("Voting
Securities") immediately prior to the Merger do not
continue to hold at least 50% of the combined voting power
of the outstanding Voting Securities of the surviving or
continuing corporation immediately after the Merger,
disregarding any Voting Securities issued or retained by
such holders in respect of securities of any other party
to the Merger;
(2) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all,
or substantially all, the assets of BMT; or
(3) the adoption of any plan or proposal for the liquidation
or dissolution of BMT; or
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(b) Any "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Act")) shall, as a result of a tender or exchange offer, open
market purchases or privately negotiated purchases from anyone
other than BMT, have become the beneficial owner (within the
meaning of Rule 13d-3 under the Act), directly or indirectly, of
Voting Securities representing fifty percent (50%) or more of the
combined voting power of the then outstanding Voting Securities.
4.6 ACTS UPON TERMINATION
Upon termination of Executive's employment with the Company, all
computers, equipment, documents, records, notebooks, and similar
repositories of or containing Confidential Information, including copies
thereof, then in the Executive's possession, whether prepared by himself
or others will be delivered to the Company within thirty (30) days of
such termination. The obligations of the Executive in Sections 6.1 and
6.2 of this Agreement shall survive any termination of the Executive.
SECTION 5 - STOCK
5.1 GRANT OF STOCK OPTIONS
As soon as possible following the execution of the Original Agreement,
the Executive and the Company executed an Incentive Stock Option
Agreement granting the Executive the following:
150,000 options to purchase shares of BMT at a strike price equal
to the fair market value of the Company's stock on the date of
grant. These options vest as follows: 33.3% (50,000) on each of
the Executive's first three annual anniversaries of employment
with the Company, provided he remains employed by the Company
during each year. All options granted will be subject to the same
terms and conditions as provided in the Company's incentive stock
program.
The Executive will also receive an additional grant of 50,000
options to purchase shares of BMT on the first anniversary of his
employment by the Company; provided, however, that if prior to
such first anniversary, a Change in Control occurs or the Company
publicly announces that it has entered into an agreement or
letter of intent for a transaction that will constitute a Change
in Control if completed, the additional options shall be
immediately granted with a strike price equal to the closing
price of the Company's stock on the trading day preceding such
Change in Control or announcement. These options vest as follows:
33.3% on each of the
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Executive's next three annual anniversaries of employment with
the Company, provided he remains employed by the Company during
each year. All options granted will be subject to the terms and
conditions described in the Company's incentive stock program.
The Stock Option Agreements related to such options will provide that,
in the event of (A) a Change in Control, (B) termination of employment
pursuant to Section 4.2 (a) (ii) (including deemed termination pursuant
to such section pursuant to Section 4.1, or (C) the Executive's having
opted to receive a severance package in lieu of relocating pursuant to
Section 2.3, all stock options which have been awarded to the Executive,
but are not yet vested, will vest immediately.
5.2 REGISTRATION
It is understood that BMT is a reporting company within the requirements
of the Securities and Exchange Commission ("SEC") and has elected to
register the options granted hereunder with the SEC.
SECTION 6 - MISCELLANEOUS
6.1 DISCLOSURE OF INFORMATION AND EMPLOYEE RESTRICTIONS
Executive agrees to the following:
a. Executive agrees that he shall not, during his employment, either
as an individual or as part of an organization, throughout North
America or Europe, compete with the Company or render services
directly or indirectly, to any conflicting organization or
himself establish or acquire any interest, directly or
indirectly, in a conflicting organization, nor will he assist any
other person or entity to do so;
b. Executive will not during his employment solicit or sell to any
of the Company's present or future customers, a conflicting
product or service nor will he assist any other person or entity
to do so;
c. Except as required in his duties to the Company, the Executive
will never, during or after his employment, directly or
indirectly use, disseminate, disclose, lecture upon, or publish
any Confidential Information without Company's written consent.
In the event this Agreement is terminated, for whatever reason,
Executive agrees that he shall not, for two years following the date of
termination:
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a. Either as an individual or as part of an organization, throughout
Canada or the United States, compete with the Company or render
services directly or indirectly, to any conflicting organization
or himself establish or acquire any interest, directly or
indirectly, in a conflicting organization, nor will he assist any
other person or entity to do so; and
b. He will not employ, without the consent of the Company, directly
or indirectly, any past or present employees of the Company, nor
will he assist any other person or entity to do so; and
6.2 ARBITRATION AND JURISDICTION
As a matter of operating practice, Bioject expects to resolve
disagreements or conflicts by mutual negotiation in good faith. Subject
to the remedies stated in Section 6.1, any controversy or claim arising
out of or relating to this Agreement or any breach of this Agreement
shall be finally settled by arbitration in accordance with the
provisions of the Commercial Arbitration Rules of the American
Arbitration Association. Such arbitration shall be conducted in
Portland, Oregon by one arbitrator, with one discovery allowed by each
party to this agreement. This agreement is entered into and shall be
interpreted and enforced according to the laws of the State of Oregon;
both parties consent to personal jurisdiction for that purpose.
6.3 NOTICES
Any notice or other communication required or permitted to be given
under this Agreement shall be in writing, given by personal delivery or
sent by first class mail, postage prepaid, addressed as follows:
To the Executive: John Gandolfo
62 Terrace Road
Wayne, NJ 07470
To the Company: Secretary to the Board of Directors
Bioject Medical Technologies Inc.
7620 S.W. Bridgeport Road
Portland, Oregon 97224
Either party, by notice as provided above, may change the address to
which subsequent notice shall be given. Any notice given herein shall be
deemed received seven (7) days after posting in a post office box;
PROVIDED, HOWEVER, that if there should be a postal strike, slow-down or
other labor dispute which may effect the delivery of such notice through
the mail between the
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time of mailing and the actual receipt of the notice, then such notice
shall be effective only if actually delivered.
6.4 ASSIGNMENT
This Agreement is a personal employment agreement addressing services,
compensation and benefits. It may not be assigned by either party
without the prior written consent of the other party; however, during
his employment term, the Executive may by written assignment assign all
or any portion of the compensation or benefits to which he is entitled
under Section 3 to any member of his immediate family or to any
corporation, partnership or other business entity controlled by the
Executive. Except as required by law, no right to receive payments under
this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or
hypothecation or to execution, attachment, levy or similar process or
assignment by operation of law and any attempt, voluntary or
involuntary, to affect any such action shall be null, void, and of no
effect.
6.5 INDEMNITY
The Executive, his heirs, executors, administrators, estate and effects,
shall at all times be indemnified and held harmless by the Company from
and against:
a. All costs, charges and expenses whatsoever sustained or incurred
as a result of any action, suit or proceeding, whether civil,
criminal, administrative, or investigative, that is brought,
commenced or prosecuted for or in respect of any act, deed,
matter or thing whatsoever made, done or permitted in or about
the execution of the Executive's duties; and
b. All other costs, charges and expenses sustained or incurred in or
about or in relation to the affairs of the Company;
Except such costs, charges or expenses as are occasioned by the criminal
act, willful neglect or default of duties by the Executive. At all such
times that the Company obtains and maintains directors and officers
errors and omissions insurance, Executive shall be a beneficiary of such
policy(ies).
6.6 AMENDMENT AND SEVERABILITY
This Agreement may not be amended or otherwise modified except by an
instrument in writing signed by both parties. All agreements and
covenants herein contained in this Agreement are deemed to be severable,
and in the event any portion of this Agreement is declared to be
invalid, this Agreement shall be interpreted as if such invalid portion
or covenant were severed and not contained
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herein, with all other terms of this Agreement remaining valid and
binding on the parties hereto.
6.7 ENTIRE AGREEMENT
This agreement specifies all of the terms and conditions of an
employment agreement entered into between the parties on June 25, 2001,
which terms and conditions have been negotiated prior to that date.
6.8 BINDING EFFECT
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, personal representatives,
successors and assigns, except as otherwise expressly provided herein.
6.9 REVIEW OF LEGAL COUNSEL
The Executive acknowledges that he has had adequate time and opportunity
to consult with legal counsel of his own selection prior to entering
into and executing this Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement effective on the day
and year first written above.
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John Gandolfo
BIOJECT MEDICAL TECHNOLOGIES INC.
By:
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Name:
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Title:
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BIOJECT INC.
By:
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Name:
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Title:
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