EXHIBIT 10.38
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), which is dated for
identification purposes only as of May 6, 1996, is made by and between STAAR
SURGICAL COMPANY, a Delaware corporation, located at 1911 Walker Avenue,
Monrovia, California, 91016 and hereinafter referred to as "Company", and DONALD
D. FERGUSON, whose address is 416 Gordon Terrace, Pasadena, California 91105,
hereinafter referred to as "Executive", based upon the following:
RECITALS
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WHEREAS, Company wishes to retain the services of Executive as its
Vice President of International Sales and to set forth in this Agreement the
duties and responsibilities that Executive has agreed to undertake on behalf of
Company; and
WHEREAS, Executive wishes to render services to Company as its Vice
President of International Sales and to have set forth in this Agreement the
duties and responsibilities he has agreed to undertake on behalf of Company.
THEREFORE, in consideration of the foregoing and of the mutual
promises contained in this Agreement, Company and Executive (who are sometimes
individually referred to as a "party" and collectively referred to as the
"parties") agree as follows:
AGREEMENT
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1. "COMPANY" DEFINED.
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The term "Company" as used in this Agreement shall mean STAAR Surgical
Company, any surviving corporation into which it may be merged or any
corporation resulting from its consolidation with any other corporation or
corporations.
2. SPECIFIED PERIOD.
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Company hereby employs Executive pursuant to the terms of this
Agreement and Executive hereby accepts employment with Company pursuant to the
terms of this Agreement for the period beginning on January 1, 1996 and ending
on December 31, 1998.
3. GENERAL DUTIES.
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Executive shall report only to Company's Chief Executive Officer.
Executive shall devote his entire productive time, ability, and attention to
Company's business during the term of this Agreement. Unless otherwise modified
by the Board of Directors (the "Board"), Executive shall serve as the Company's
Vice President of International Sales. In this capacity, Executive shall do and
perform all services, acts, or things necessary or
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advisable to discharge his duties under this Agreement, including, but not
limited to, overseeing international marketing and sales, recruiting and hiring
direct sales persons and/or distributors internationally and supervising their
performance, establishing and meeting Company international sales goals,
preparing sales forecasts and reporting to the Company on international sales.
Executive shall perform such other duties as are commonly performed by a Vice
President of a publicly traded corporation or which may from time to time be
prescribed by the Board. Furthermore, Executive agrees to cooperate with and
work to the best of his ability with Company's management team, which includes
the Board and the officers, to continually improve Company's reputation in its
industry for quality products and performance.
4. NONCOMPETITION, NONSOLICITATION AND NONINTERFERENCE
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AND PROPRIETARY PROPERTY AND CONFIDENTIAL
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INFORMATION PROVISIONS.
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(A) NONCOMPETITION.
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(1) "Applicable Definitions" For purposes of this paragraph
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4, the following capitalized terms shall have the definitions set forth below:
i. "Business Segments" - The term "Business Segments" is
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defined as each of Company's (or Company's affiliates') products or product
lines.
ii. "Competitive Business" - The term "Competitive Business" is
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defined as any business that is or may be competitive with or similar to or
adverse to any of Company's (or Company's affiliates') Business Segments,
whether such business is conducted by a proprietorship, partnership,
corporation or other entity or venture.
iii. "Territory" - The term "Territory" is defined as the
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geographic area (both within the United States and internationally) in
which each Business Segment is carried on including, by way of example and
not limitation, the entire geographic area in which Company conducts
various phases of such Business Segment, including purchasing, production,
distribution, promotional and marketing activities, sales, and location of
plants and warehouses.
(2) Covenant Not To Compete. Executive hereby covenants and
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agrees that during the term of this Agreement, and for a period of one (1) year
from the date this Agreement is terminated or expires, Executive shall not, with
respect to each Business Segment and within the boundaries of the Territory
applicable to such Business Segment, without the prior written consent of
Company (which consent may be withheld in the sole and absolute discretion of
Company), directly or indirectly, either
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alone or in association or in connection with or on behalf of any person, firm,
partnership, corporation or other entity or venture now existing or hereafter
created: (i) be or become interested or engaged in, directly or indirectly, with
any Competitive Business including, without limitation, being or becoming an
organizer, investor, lender, partner, joint venturer, stockholder, officer,
director, employee, manager, independent sales representative, associate,
consultant, agent, supplier, vendor, vendee, lessor, or lessee to any
Competitive Business, or (ii) in any manner associate with, or aid or abet or
give information or financial assistance to any Competitive Business, or (iii)
use or permit the use of Executive's name or any part thereof to be used or
employed in connection with any Competitive Business (collectively and
severally, the "Noncompetition Covenants"). Notwithstanding the foregoing, the
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provisions of this paragraph 4(a)2. shall not be deemed to prevent the purchase
or ownership by Executive as a passive investment of the outstanding capital
shares of any publicly held corporation, so long as any other obligation or duty
under the Noncompetition Covenants are not breached.
(3) Separate Covenants. The Noncompetition Covenants shall be
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construed to be divided into separate and distinct Noncompetition Covenants with
respect to (i) each Business Segment and (ii) each matter or type of conduct
described therein. Each of such divided Noncompetition Covenants shall be
separate and distinct from all such other Noncompetition Covenants with respect
to the same or any other Business Segment.
(4) Acknowledgements. Executive acknowledges that: (i) the covenants
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and the restrictions contained in the Noncompetition Covenants are necessary,
fundamental, and required for the protection of Company's business; (ii) the
Noncompetition Covenants relate to matters which are of a special, unique and
extraordinary value; and (iii) a breach of any of the Noncompetition Covenants
will result in irreparable harm and damages which cannot be adequately
compensated by a monetary award.
(5) Judicial Limitation. Notwithstanding the foregoing, if at any
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time a court of competent jurisdiction holds that any portion of any
Noncompetition Covenant is unenforceable by reason of its extending for too
great a period of time or over too great a geographical area or by reason of its
being too extensive in any other respect, such Noncompetition Covenant shall be
interpreted to extend only over the maximum period of time, maximum geographical
area, or maximum extent in all other respects, as the case may be, as to which
it may be enforceable, all as determined by such court in such action.
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(B) NONSOLICITATION AND NONINTERFERENCE.
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(1) Covenants. Executive hereby covenants and agrees that
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during the term of this Agreement, and for a period of one (1) year from the
date this Agreement terminates or expires, Executive shall not, either for
Executive's own account or directly or indirectly in conjunction with or on
behalf of any person, partnership, corporation or other entity or venture:
i. Solicit or employ or attempt to solicit or employ any person
who is then or has, within twelve (12) months prior thereto, been an
officer, partner, manager, agent or employee of Company or any affiliate of
Company whether or not such a person would commit a breach of that person's
contract of employment with Company or any affiliate of Company, if any, by
reason of leaving the service of Company or any affiliate of Company (the
"Nonsolicitation Covenant"); or
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ii. On behalf of, directly or indirectly, any Competitive
Business (as such term is defined in paragraph 4 (a)1.ii.), or for the
purpose of or with the reasonably foreseeable effect of harming the
business of Company, solicit the business of any person, firm or company
which is then, or has been at any time during the preceding twelve (12)
months prior to such solicitation, a customer, client, contractor, supplier
or vendor of Company or any affiliate of Company (the "Noninterference
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Covenant)".
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(2) Acknowledgements. Each of the parties acknowledges that:
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(i) the covenants and the restrictions contained in the Nonsolicitation and
Noninterference Covenants are necessary, fundamental, and required for the
protection of the business of Company; (ii) such Covenants relate to matters
which are of a special, unique and extraordinary value; and (iii) a breach of
either of such Covenants will result in irreparable harm and damages which
cannot be adequately compensated by a monetary award.
(3) Judicial Limitation. Notwithstanding the foregoing, if at
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any time, despite the express agreement of Company and Executive, a court of
competent jurisdiction holds that any portion of any Nonsolicitation or
Noninterference Covenant is unenforceable by reason of its extending for too
great a period of time or by reason of its being too extensive in any other
respect, such Covenant shall be interpreted to extend only over the maximum
period of time or to the maximum extent in all other respects, as the case may
be, as to which it may be enforceable, all as determined by such court in such
action.
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(C) PROPRIETARY PROPERTY; CONFIDENTIAL INFORMATION.
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(1) "Applicable Definitions" For purposes of this paragraph
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4(c), the following capitalized terms shall have the definitions set forth
below:
i. "Confidential Information" - The term "Confidential
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Information" is collectively and severally defined as any information,
matter or thing of a secret, confidential or private nature, whether or not
so labelled, which is connected with Company's business or methods of
operation or concerning any of Company's suppliers, customers, licensors,
licensees or others with whom Company has a business relationship, and
which has current or potential value to Company or the unauthorized
disclosure of which could be detrimental to Company. Confidential
Information shall be broadly defined and shall include, by way of example
and not limitation,: (i) matters of a business nature available only to
management and owners of Company of which Executive may become aware (such
as information concerning customers, vendors and suppliers, including their
names, addresses, credit or financial status, buying or selling habits,
practices, requirements, and any arrangements or contracts that Company may
have with such parties, Company's marketing methods, plans and strategies,
the costs of materials, the prices Company obtains or has obtained or at
which Company sells or has sold its products or services, Company's
manufacturing and sales costs, the amount of compensation paid to employees
of Company and other terms of their employment, financial information such
as financial statements, budgets and projections, and the terms of any
contracts or agreements Company has entered into) and (ii) matters of a
technical nature (such as product information, trade secrets, know-how,
formulae, innovations, inventions, devices, discoveries, techniques,
formats, processes, methods, specifications, designs, patterns, schematics,
data, compilation of information, test results, and research and
development projects). For purposes of the foregoing, the term "trade
secrets" shall mean the broadest and most inclusive interpretation of trade
secrets as defined by Section 3426.1(d) of the California Civil Code (the
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Uniform Trade Secrets Act) and cases interpreting the scope of said
Section.
ii. "Proprietary Property" - The term "Proprietary Property" is
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collectively and severally defined as any written or tangible property
owned or used by Company in connection with Company's business, whether or
not such property also qualifies as Confidential Information. Proprietary
Property shall be broadly defined and shall include, by way of example and
not limitation, products, samples, equipment, files, lists, books,
notebooks, records, documents, memoranda, reports, patterns, schematics,
compilations, designs,
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drawings, data, test results, contracts, agreements, literature,
correspondence, spread sheets, computer programs and software, computer
print outs, other written and graphic records, and the like, whether
originals, copies, duplicates or summaries thereof, affecting or relating
to the business of Company, financial statements, budgets, projections,
invoices.
(2) Ownership of Proprietary Property. Executive acknowledges
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that all Proprietary Property which Executive may prepare, use, observe, come
into possession of and/or control shall, at all times, remain the sole and
exclusive property of Company. Executive shall, upon demand by Company at any
time, or upon the cessation of Executive's employment, irrespective of the time,
manner, cause or lack of cause of such cessation, immediately deliver to Company
or its designated agent, in good condition, ordinary wear and tear and damage by
any cause beyond the reasonable control of Executive excepted, all items of the
Proprietary Property which are or have been in Executive's possession or under
his control, as well as a statement describing the disposition of all items of
the Proprietary Property beyond Executive's possession or control in the event
Executive has not previously returned such items of the Proprietary Property to
Company.
(3) Agreement Not to Use or Divulge Confidential Information.
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Executive agrees that he will not, in any fashion, form or manner, unless
specifically consented to in writing by Company, either directly or indirectly
use, divulge, transmit or otherwise disclose or cause to be used, divulged,
transmitted or otherwise disclosed to any person, firm or corporation, in any
manner whatsoever (other than in Executive's performance of duties for Company
or except as required by law) any Confidential Information of any kind, nature
or description. The foregoing provisions shall not be construed to prevent
Executive from making use of or disclosing information which is in the public
domain through no fault of Executive, provided, however, specific information
shall not be deemed to be in the public domain merely because it is encompassed
by some general information that is published or in the public domain or in
Executive's possession prior to Executive's employment with Company.
(4) Acknowledgement of Secrecy. Executive acknowledges that the
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Confidential Information is not generally known to the public or to other
persons who can obtain economic value from its disclosure or use and that the
Confidential Information derives independent economic value thereby, and
Executive agrees that he shall take all efforts reasonably necessary to maintain
the secrecy and confidentiality of the Confidential Information and to otherwise
comply with the terms of this Agreement.
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(5) Inventions, Discoveries. Executive acknowledges that any
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inventions, discoveries or trade secrets, whether patentable or not, made or
found by Executive in the scope of his employment with Company constitute
property of Company and that any rights therein now held or hereafter acquired
by Executive individually or in any capacity are hereby transferred and assigned
to Company, and agrees to execute and deliver any confirmatory assignments,
documents or instruments of any nature necessary to carry out the intent of this
paragraph when requested by Company without further compensation therefor,
whether or not Executive is at the time employed by Company. Provided, however,
notwithstanding the foregoing, Executive shall not be required to assign his
rights in any invention which qualifies fully under the provisions of Section
2870(a) of the California Labor Code, which provides, in pertinent part, that
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the requirement to assign "shall not apply to any invention that the employee
developed entirely on his or her own time without using employer's equipment,
supplies, facilities or trade secret information except for those inventions
that either:
(i) Relate at the time of conception or reduction to practice of
the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer; or
(ii) Result from any work performed by the employee for the
employer."
Executive understands that he bears the full burden of proving to
Company that an invention qualifies fully under Section 2870(a). By signing this
Agreement, Executive acknowledges receipt of a copy of this Agreement and of
written notification of the provisions of Section 2870.
5. COMPLIANCE WITH SECURITIES LAWS. Executive acknowledges that Company
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and Executive will be subject to the provisions of Sections 10(b), 16(a) and
16(b) of the Securities Exchange Act of 1934. Executive acknowledges that
Section 16(a) of the Securities Exchange Act requires Executive to report the
ownership or transfer of his stock or other securities in Company to the
Securities and Exchange Commission and that Sections 10(b) and 16(b) can
prohibit Executive from selling or transferring his stock or securities in
Company. Executive agrees that he will comply with Company's policies, as stated
from time to time, relating to selling or transferring his stock or securities
in Company.
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6. COMPENSATION.
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(A) SALARY. During the term of this Agreement, Company shall pay to
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Executive a base salary of One Hundred Twenty Thousand Dollars ($120,000) per
year. Executive's annual salary shall be reviewed periodically by Company for
the purpose of determining whether Executive's salary shall be increased. In no
event shall this review take place less frequently than annually. Executive
shall also be entitled to receive such bonuses or other compensation from time
to time as may be granted to him by Company's Board, in its discretion.
(B) ADDITIONAL COMPENSATION. As additional compensation to be paid
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during the first year of the term of this Agreement, Executive shall receive
one-half of one percent of all net international sales of products manufactured
by Company up to $15 million, which percentage shall be reduced to one-quarter
of one percent of all net international sales in excess of $15 million. "Net
international sales" shall be defined as gross international sales less returns,
shipping, handling, sales taxes, chargebacks and allowances. International sales
shall not include sales made in North America, South America, the Caribbean,
Japan, sales made pursuant to the Agreement between Company and China Eye Joint
Venture, or sales made to any existing or future joint venture partner or other
entity with which Company establishes a business relationship and to which
Company sells its products without the services of direct sales persons or
distributors. After December 31, 1996, Company shall have the right to review
the additional compensation prior to each subsequent year of the term of this
Agreement and, at the election of Company, Company shall determine if it will
continue to pay the additional compensation or if it will modify the computation
of the additional compensation.
(C) EMPLOYEE BENEFIT PLANS. Executive shall be entitled, during the
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term of this Agreement, to participate in any retirement, pension, profit-
sharing, insurance, or other plans which may now be in effect or which may be
adopted by Company. During the term of this Agreement, Company, at its sole cost
and expense, shall provide to Executive: (i) disability insurance, the terms of
which shall be determined in the sole discretion of the Board; and (ii) life
insurance on the life of Executive in the face amount of Two Hundred Thousand
Dollars ($200,000).
(D) STOCK OPTIONS. Executive shall be included in the 1996 STAAR
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Surgical Company Non-Qualified Stock Plan (the "Plan") as adopted by Company.
Pursuant to the terms of the Plan, Executive shall be entitled to purchase
thirty thousand (30,000) shares of Company's common stock, which options shall
vest over a period of five (5) years (six thousand (6,000) shares each on May 6,
1997, May 6, 1998, May 6, 1999, May 6, 2000 and May 6, 2001, respectively), and
all of which option rights shall expire on May
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6, 2006. The purchase price per share shall be $12.50. Stock issued pursuant to
the Plan shall be restricted stock, although Company shall reserve the right to
issue registered shares if it so decides. Executive agrees to be bound by the
terms of the Plan as adopted. These options shall be non-qualified stock
options.
(E) SEVERANCE PAY UPON CHANGE OF CONTROL. Upon the sale or
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disposition by Company of substantially all of its business or assets or the
sale of the capital stock of Company in connection with the sale or transfer of
a controlling interest in Company to a third party or the merger or
consolidation of Company with another corporation as part of a sale or transfer
of a controlling interest in Company to a third party, Executive shall receive,
as additional compensation and not in lieu of his rights under this Agreement,
one (1) year's salary. "A controlling interest" shall be defined as 50% or more
of the common stock of the Company. "One (1) year's salary" shall be defined as
only the cash compensation paid to Executive pursuant to subparagraph (a) above,
as it may be modified from time to time, and shall not include employee
benefits, incentive stock options, automobile allowance or debt forgiveness, if
any. Executive shall be entitled to receive this additional compensation if
Executive's employment is terminated as a result of the change of control
described herein or, if Executive, at Executive's election, terminates his
employment as a result of such change of control.
(F) LOANS MADE TO EXECUTIVE. If Company makes any loan to Executive,
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including any loan that Company may, in its discretion, make to Executive by
Company for the purpose of exercising the stock options discussed in
subparagraph (d) above, Executive shall be required to keep any such loan
adequately secured throughout its term by transferring to Company collateral
having a value which is not less than 110% of the unpaid principal and accrued
and unpaid interest of the loan. If the value of the collateral is impaired or
decreases, Executive shall transfer to Company additional collateral so that the
collateral securing repayment of any loan will always equal or exceed 110% of
the unpaid principal and accrued and unpaid interest of the loan.
7. REIMBURSEMENT OF BUSINESS EXPENSES.
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(A) REIMBURSEMENT FOR ORDINARY EXPENSES. Company shall promptly
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reimburse Executive for all reasonable business expenses incurred by Executive
in connection with the business of Company. However, each such expenditure shall
be reimbursable only if Executive furnishes to Company adequate records and
other documentary evidence required by federal and state statutes and
regulations issued by the appropriate taxing authorities for the substantiation
of each such expenditure as an income tax deduction.
(B) REIMBURSEMENT FOR EXTRAORDINARY EXPENSES. Any single business
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expense with a cost in excess of Five Thousand
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Dollars ($5,000) shall be deemed to be an extraordinary business expense.
Executive shall not incur any extraordinary business expense unless the expense
has been approved by the Chief Executive Officer. If Executive fails to obtain
the approval of the Chief Executive Officer, Company may refuse to reimburse
Executive for that expense.
8. ANNUAL VACATION/SICK LEAVE.
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Executive shall be entitled to at least four (4) weeks vacation time
each year without loss of compensation. Executive shall be entitled to sick
leave in accordance with Company's general policy for its employees.
9. INDEMNIFICATION OF LOSSES.
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So long as Executive's actions were taken in good faith and in
furtherance of Company's business and within the scope of Executive's duties and
authority, Company shall indemnify and hold Executive harmless to the full
extent of the law from any and all claims, losses and expenses sustained by
Executive as a result of any action taken by him to discharge his duties under
this Agreement, and Company shall defend Executive, at Company's expense, in
connection with any and all claims by stockholders or third parties which are
based upon actions taken by Executive to discharge his duties under this
Agreement.
10. PERSONAL CONDUCT.
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Executive agrees promptly and faithfully to comply with all present
and future policies, requirements, directions, requests and rules and
regulations of Company in connection with Company's business. Executive further
agrees to conform to all laws and regulations and not at any time to commit any
act or become involved in any situation or occurrence tending to bring Company
into public scandal, ridicule or which will reflect unfavorably on the
reputation of Company.
11. TERMINATION FOR CAUSE.
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(A) TERMINATION BY COMPANY. Company reserves the right to declare
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Executive in default of this Agreement if Executive willfully breaches or
habitually neglects the duties which he is required to perform under the terms
of this Agreement, or if Executive commits such acts of dishonesty, fraud, or
misrepresentation as would prevent the effective performance of his duties and
results in material harm to Company's business, taken as a whole. Company may
terminate this Agreement for cause by giving written notice of termination to
Executive. With the exception of the covenants included in paragraph 4 above,
upon such termination the obligations of Executive and Company under this
Agreement shall immediately cease. Such termination shall be
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without prejudice to any other remedy to which Company may be entitled either at
law, in equity, or under this Agreement. If Executive's employment is terminated
pursuant to this paragraph, Company shall pay to Executive, within two (2)
business days of such termination, any deferred or unpaid compensation to which
Executive is entitled at the time of such termination.
(B) TERMINATION BY EXECUTIVE. Executive may terminate this Agreement
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if, in his sole but reasonable judgment, Executive determines that Company has:
(i) breached or failed to fulfill any of the representations, warranties, or
covenants in any agreements entered into between Company and Executive;
(ii) demoted Executive; (iii) required Executive to participate in any felony or
other serious crime; (iv) committed any act which may adversely reflect upon the
name and reputation of Executive; (v) effectuated any of the following actions
(unless Executive voted, in any of his capacities as a director or shareholder
of Company, in favor of such action): (A) authorized the future sale or
disposition by Company of substantially all of the business or assets of
Company, (B) authorized the sale of the capital stock of Company in connection
with the sale or transfer of a controlling interest in Company to a third party
or parties and its/their affiliates who are not presently affiliated with the
present stockholders of Company, (C) authorized the merger or consolidation of
Company with another corporation as part of a sale or transfer of a controlling
interest in Company to a third party or parties and its/their affiliates who are
not presently affiliated with the present stockholders of Company, or (D)
authorized the dissolution or liquidation of Company.
12. TERMINATION WITHOUT CAUSE.
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(A) DEATH. Executive's employment shall terminate upon the death of
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Executive. Upon such termination, the obligations of Executive and Company under
this Agreement shall immediately cease.
(B) DISABILITY. Company reserves the right to terminate Executive's
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employment upon ten (10) days written notice if, for a period of sixty (60)
days, Executive is prevented from discharging his duties under this Agreement
due to any physical or mental disability. With the exception of the covenants
included in paragraph 4 above, upon such termination the obligations of
Executive and Company under this Agreement shall immediately cease.
(C) ELECTION. Executive's employment may be terminated at any time
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by Executive upon not less than one hundred eighty (180) days written notice by
Executive to the Board. With the exception of the covenants included in
paragraph 4 above, upon such termination the obligations of Executive and
Company under this Agreement shall immediately cease.
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13. MISCELLANEOUS.
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(A) PREPARATION OF AGREEMENT. It is acknowledged by each party that
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such party either had separate and independent advice of counsel or the
opportunity to avail itself or himself of same. In light of these facts it is
acknowledged that no party shall be construed to be solely responsible for the
drafting hereof, and therefore any ambiguity shall not be construed against any
party as the alleged draftsman of this Agreement.
(B) COOPERATION. Each party agrees, without further consideration,
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to cooperate and diligently perform any further acts, deeds and things and to
execute and deliver any documents that may from time to time be reasonably
necessary or otherwise reasonably required to consummate, evidence, confirm
and/or carry out the intent and provisions of this Agreement, all without undue
delay or expense.
(C) INTERPRETATION.
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(i) Entire Agreement/No Collateral Representations. Each party
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expressly acknowledges and agrees that this Agreement, including all exhibits
attached hereto: (1) is the final, complete and exclusive statement of the
agreement of the parties with respect to the subject matter hereof;
(2) specifically supersedes and replaces the "Employment Contract for Director
of European Sales" entered into by and between Company and Executive on March
23, 1992 as well as any prior or contemporaneous agreements, promises,
assurances, guarantees, representations, understandings, conduct, proposals,
conditions, commitments, acts, course of dealing, warranties, interpretations or
terms of any kind, oral or written (collectively and severally, the "Prior
Agreements"), and that any such prior agreements are of no force or effect
except as expressly set forth herein; and (3) may not be varied, supplemented or
contradicted by evidence of Prior Agreements, or by evidence of subsequent oral
agreements. Any agreement hereafter made shall be ineffective to modify,
supplement or discharge the terms of this Agreement, in whole or in part, unless
such agreement is in writing and signed by the party against whom enforcement of
the modification or supplement is sought.
(ii) Waiver. No breach of any agreement or provision herein
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contained, or of any obligation under this Agreement, may be waived, nor shall
any extension of time for performance of any obligations or acts be deemed an
extension of time for performance of any other obligations or acts contained
herein, except by written instrument signed by the party to be charged or as
otherwise expressly authorized herein. No waiver of any breach of any agreement
or provision herein contained shall be deemed a waiver of any preceding or
succeeding breach thereof, or a waiver or relinquishment of any other agreement
or provision or right or power herein contained.
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(iii) Remedies Cumulative. The remedies of each party under
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this Agreement are cumulative and shall not exclude any other remedies to which
such party may be lawfully entitled.
(iv) Severability. If any term or provision of this Agreement
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or the application thereof to any person or circumstance shall, to any extent,
be determined to be invalid, illegal or unenforceable under present or future
laws effective during the term of this Agreement, then and, in that event: (A)
the performance of the offending term or provision (but only to the extent its
application is invalid, illegal or unenforceable) shall be excused as if it had
never been incorporated into this Agreement, and, in lieu of such excused
provision, there shall be added a provision as similar in terms and amount to
such excused provision as may be possible and be legal, valid and enforceable,
and (B) the remaining part of this Agreement (including the application of the
offending term or provision to persons or circumstances other than those as to
which it is held invalid, illegal or unenforceable) shall not be affected
thereby and shall continue in full force and effect to the fullest extent
provided by law.
(v) Time is of the Essence. It is expressly understood and
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agreed that time of performance is strictly of the essence with respect to each
and every term, condition, obligation and provision hereof and that the failure
to timely perform any of the terms, conditions, obligations or provisions hereof
by any party shall constitute a material breach and a noncurable (but waivable)
default under this Agreement by the party so failing to perform.
(vi) No Third Party Beneficiary. Notwithstanding anything else
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herein to the contrary, the parties specifically disavow any desire or intention
to create any third party beneficiary obligations, and specifically declare that
no person or entity, other than as set forth in this Agreement, shall have any
rights hereunder or any right of enforcement hereof.
(vii) No Reliance Upon Prior Representation. The parties
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acknowledge that no other party has made any oral representation or promise
which would induce them prior to executing this Agreement to change their
position to their detriment, partially perform, or part with value in reliance
upon such representation or promise; the parties acknowledge that they have
taken such action at their own risk; and the parties represent that they have
not so changed their position, performed or parted with value prior to the time
of their execution of this Agreement.
(viii) Headings; References; Incorporation; Gender. The headings
-------------------------------------------
used in this Agreement are for convenience and reference purposes only, and
shall not be used in construing or
13
interpreting the scope or intent of this Agreement or any provision hereof.
References to this Agreement shall include all amendments or renewals thereof.
All cross-references in this Agreement, unless specifically directed to another
agreement or document, shall be construed only to refer to provisions within
this Agreement, and shall not be construed to be referenced to the overall
transaction or to any other agreement or document. Any exhibit referenced in
this Agreement shall be construed to be incorporated in this Agreement. As used
in this Agreement, each gender shall be deemed to include the other gender,
including neutral genders or genders appropriate for entities, if applicable,
and the singular shall be deemed to include the plural, and vice versa, as the
context requires.
(D) ENFORCEMENT.
-----------
(i) Applicable Law. This Agreement and the rights and
--------------
remedies of each party arising out of or relating to this Agreement (including,
without limitation, equitable remedies) shall be solely governed by, interpreted
under, and construed and enforced in accordance with the laws (without regard to
the conflicts of law principles thereof) of the State of California, as if this
agreement were made, and as if its obligations are to be performed, wholly
within the State of California.
(ii) Consent to Jurisdiction; Service of Process. Any
-------------------------------------------
action or proceeding arising out of or relating to this Agreement shall be filed
in and heard and litigated solely before the state courts of California located
within the County of Los Angeles. Each party generally and unconditionally
accepts the exclusive jurisdiction of such courts and to venue therein, consents
to the service of process in any such action or proceeding by certified or
registered mailing of the summons and complaint in accordance with the notice
provisions of this Agreement, and waives any defense or right to object to venue
in said courts based upon the doctrine of "Forum Non Conveniens". Each party
irrevocably agrees to be bound by any judgement rendered thereby in connection
with this Agreement.
(iii) Waiver of Right to Jury Trial. Each party hereby
-----------------------------
waives such party's respective right to a jury trial of any claim or cause of
action based upon or arising out of this Agreement. Each party acknowledges that
this waiver is a material inducement to each other party hereto to enter into
the transaction contemplated hereby, that each other party has already relied
upon this waiver in entering into this Agreement, and that each other party will
continue to rely on this waiver in their future dealings. Each party warrants
and represents that such party has reviewed this waiver with such party's legal
counsel, and that such party has knowingly and voluntarily waived its jury trial
rights following consultation with legal counsel.
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(vi) Consent to Specific Performance and Injunctive Relief and Waiver
----------------------------------------------------------------
of Bond or Security. Each party acknowledges that Company may, as a result of
- -------------------
Executive's breach of the covenants and obligations included in paragraph 4 of
this Agreement, sustain immediate and long-term substantial and irreparable
injury and damage which cannot be reasonably or adequately compensated by
damages at law. Each party agrees that in the event of Executive's breach or
threatened breach of the covenants and obligations included in paragraph 4,
Company shall be entitled to obtain from a court of competent jurisdiction or
arbitration, as the case may be under this Agreement, equitable relief,
including, without limitation, enforcement of all of the provisions of this
Agreement by specific performance and/or temporary, preliminary and/or permanent
injunctions enforcing any of Company's rights, requiring performance by
Executive, or enjoining any breach by Executive, all without proof of any actual
damages that have been or may be caused to Company by such breach or threatened
breach and without the posting of bond or other security in connection
therewith. Executive waives the claim or defense that Company has an adequate
remedy at law and Executive shall not allege or otherwise assert the legal
position that any such remedy at law exists. Each party agrees and acknowledges:
(1) that the terms of this paragraph are fair, reasonable and necessary to
protect the legitimate interests of the other party; (2) that this waiver is a
material inducement to the other party to enter into the transaction
contemplated hereby; (3) that the other party has already relied upon this
waiver in entering into this Agreement; and (4) that each party will continue to
rely on this waiver in their future dealings. Each party warrants and represents
that such party has reviewed this provision with such party's legal counsel, and
that such party has knowingly and voluntarily waived its rights following
consultation with legal counsel.
(v) Attorneys' Fees and Costs. If any party institutes or should the
-------------------------
parties otherwise become a party to any Action Or Proceeding (as defined below)
based upon or arising out of this Agreement including, without limitation, to
enforce or interpret this Agreement or any provision hereof, or for damages by
reason of any alleged breach of this Agreement or any provision hereof, or for a
declaration of rights in connection herewith, or for any other relief, including
equitable relief, in connection herewith, the Prevailing Party in any such
Action Or Proceeding, whether or not such Action Or Proceeding proceeds to final
judgement or determination, shall be entitled to receive from the non-Prevailing
Party as a cost of suit, and not as damages, all Costs And Expenses (as defined
below) of prosecuting or defending the Action Or Proceeding, as the case may be,
including, without limitation, reasonable Attorneys' And Other Fees.
(vi) Definitions. The term "Action Or Proceeding" is defined as any
-----------
and all claims, suits, actions, notices,
15
inquiries, proceedings, hearings, arbitrations or other similar proceedings,
including appeals and petitions therefrom, whether formal or informal,
governmental or non-governmental, or civil or criminal. The term "Prevailing
Party" is defined as the party who is determined to prevail by the Court after
its consideration of all damages and equities in the Action Or Proceeding,
whether or not the Action Or Proceeding proceeds to final judgment. The Court
shall retain the discretion to determine that no party is the Prevailing Party
in which case no party shall be entitled to recover its Costs And Expenses under
this subparagraph 12(d). The term "Attorneys' And Other Fees" is defined as
attorneys' fees, accountants' fees, fees of other professionals, witness fees
(including experts engaged by the parties, but excluding shareholders, officers,
employees or partners of the parties), and any and all other similar fees
incurred in the prosecution or defense of the Action Or Proceeding. The term
"Costs And Expenses" is defined as the cost to take depositions, the cost to
arbitrate this dispute, if applicable, and the costs and expenses of travel and
lodging incurred with respect to the Action Or Proceeding, provided, however,
the party incurring said travel and lodging expense must ordinarily travel over
one hundred (100) miles, one way, from his or her residence in incurring such
expense.
(E) NO ASSIGNMENT OF RIGHTS OR DELEGATION OF DUTIES BY EXECUTIVE.
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Executive's rights and benefits under this Agreement are personal to him and
therefore (i) no such right or benefit shall be subject to voluntary or
involuntary alienation, assignment or transfer; and (ii) Executive may not
delegate his duties or obligations hereunder.
(F) NOTICES. Unless otherwise specifically provided in this
-------
Agreement, all notices, demands, requests, consents, approvals or other
communications (collectively and severally called "Notices") required or
permitted to be given hereunder, or which are given with respect to this
Agreement, shall be in writing, and shall be given by: (A) personal delivery
(which form of Notice shall be deemed to have been given upon delivery), (B) by
telegraph or by private airborne/overnight delivery service (which forms of
Notice shall be deemed to have been given upon confirmed delivery by the
delivery agency), (C) by electronic or facsimile or telephonic transmission,
provided the receiving party has a compatible device or confirms receipt thereof
(which forms of Notice shall be deemed delivered upon confirmed transmission or
confirmation of receipt), or (D) by mailing in the United States mail by
registered or certified mail, return receipt requested, postage prepaid (which
forms of Notice shall be deemed to have been given upon the fifth {5th} business
day following the date mailed). Each party, and their respective counsel, hereby
agree that if Notice is to be given hereunder by such party's counsel, such
counsel may communicate directly with all principals, as required to comply with
the foregoing notice provisions. Notices shall be addressed to the address
hereinabove set forth in the introductory
16
paragraph of this Agreement, or to such other address as the receiving party
shall have specified most recently by like Notice, with a copy to the other
parties hereto. Any Notice given to the estate of a party shall be sufficient if
addressed to the party as provided in this subparagraph.
(G) COUNTERPARTS. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument, binding on all parties hereto. Any
signature page of this Agreement may be detached from any counterpart of this
Agreement and reattached to any other counterpart of this Agreement identical in
form hereto by having attached to it one or more additional signature pages.
(H) EXECUTION BY ALL PARTIES REQUIRED TO BE BINDING; ELECTRONICALLY
---------------------------------------------------------------
TRANSMITTED DOCUMENTS. This Agreement shall not be construed to be an offer and
- ---------------------
shall have no force and effect until this Agreement is fully executed by all
parties hereto. If a copy or counterpart of this Agreement is originally
executed and such copy or counterpart is thereafter transmitted electronically
by facsimile or similar device, such facsimile document shall for all purposes
be treated as if manually signed by the party whose facsimile signature appears.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
26th day of May, 1996.
EXECUTIVE: COMPANY:
STAAR SURGICAL COMPANY, a Delaware
corporation
/s/ Donald D. Ferguson
- ------------------------ BY: /s/ John R. Wolf
Donald D. Ferguson -------------------------
17