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Exhibit 10.9
ORTHOPAEDIC BIOSYSTEMS LTD., INC.
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 29 day of April, 1997, by and between
ORTHOPAEDIC BIOSYSTEMS LTD., INC., an Arizona corporation with its principal
place of business at 7320 East Butherus, Suite 206, Scottsdale, Arizona 85260
(hereinafter the "Company"), and JEFFRY SKIBA (hereinafter the "Employee").
WHEREAS, the Company is engaged in the business of developing and
marketing medical products, including orthopaedic devices and equipment;
WHEREAS, the Employee has particular expertise in the engineering and
manufacture of biomedical devices; and
WHEREAS, Employee desires to be employed by the Company and the Company
desires to employ the Employee in a capacity in which the Employee will be given
access to Confidential Information:
NOW, THEREFORE, in consideration of such employment, and other good and
valuable consideration, it is agreed:
1. Definitions.
As used in this Agreement:
(a) "Company" means Orthopaedic Biosystems Ltd., Inc. and its
successors and assigns, and any of its present or future subsidiaries, or
organizations controlled by, controlling or under common control with it.
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(b) "Confidential Information" means information developed by,
disclosed to, or otherwise known by the Employee as a consequence of or through
his employment by the Company which is comprised of or relates in any way to (i)
the processes used and to be used in Company's business; (ii) the methods and
results of Company's research and development activities; (iii) any invention
(whether or not patentable), discovery, technological development, manufacturing
design or technique, process, system, machine, device or improvement, computer
software program, composition, or data and information which Employee produces,
discovers or compiles, and (iv) any other technical and non-technical
information and data relating to Company's business, except such items which
Employee can prove by clear and convincing evidence were (x) publicly and openly
known prior to the date of Employee's initial employment by the Company, and
therefore in the public domain, or (y) subsequent to the date of Employee's
initial employment by the Company became publicly and openly known through no
fault or wrongful act of the Employee.
(c) "Inventions" mean discoveries, concepts, and ideas,
whether patentable or not, including but not limited to processes, methods,
formulas, 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.
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2. Employment.
Commencing on or continuing from the date hereof, the Company shall
employ Employee (or shall continue to employ Employee, as the case may be), and
Employee shall serve as an employee of the Employer upon the terms and
conditions herein set forth.
3. Scope of Employment.
During the term of this Agreement, Employee shall devote the Employee's
entire business time, attention and energy to the business, and to seeking
improvement in the profitability, of the Company. He shall serve as vice
president of engineering and manufacturing for the Company and shall have the
authority and responsibility for all of the Company's research and development
activities, including developing and supervising the manufacture of the
Company's orthopaedic devices, instruments, equipment and related medical
products, and Employee shall perform all duties incident to such position.
Employee shall have such other powers and duties, and shall perform such other
services as shall be assigned to Employee from time to time by the Company.
During the term of this Agreement, Employee shall not engage in any other
business activity which, in the reasonable judgment of the Company's Board of
Directors conflicts with the duties of Employee hereunder, whether or not such
activity is pursued for gain, profit or other pecuniary advantage; provided,
however, that it is understood that this Section 3 shall not preclude Employee
from making passive investments in other business entities as long as Employee
notifies the Board of Directors in advance in the event that the Employee
intends to make a passive investrnent in the Company's industry.
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4. Term.
4.1 The term of this Agreement shall commence on the date hereof and
continue until December 31, 1997 and shall be automatically renewable thereafter
for consecutive terms of one year each unless and until terminated as of the end
of any such period by either party giving notice of termination in writing to
the other parry not less than sixty (60) days before the end of the period in
question and subject, however, to earlier termination pursuant to Section 4.2 or
Section 6 hereof.
4.2 Notwithstanding the term of employment provided for in Section 4.1,
this Agreement shall immediately terminate upon Employee's death or Permanent
Disability. For purposes of this Agreement, Permanent Disability shall mean any
physical or mental condition which materially interferes with the performance of
Employee's customary duties in Employee's capacity as President of the Company
where such disability has continued for a period of ninety (90) consecutive
days.
5. Compensation.
5.1 Employee shall be paid a base salary of one hundred thousand
dollars ($100,000.00) per year, subject to review and adjustment by the Company
at its sole discretion from time to time. Such base salary shall be payable no
less often than in monthly installments and shall be subject to withholding and
other deductions as required by law.
5.2 Employee will be eligible to participate in any group health plan,
life insurance plan and any other employee benefit or incentive compensation
plan or arrangement now in
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effect or hereafter adopted by the Company; provided, however, that the Company
reserves the right to modify or discontinue any such plan or arrangement at any
time for any reason it deems appropriate, and the Company may do so for reasons
other than financial necessity. Employee's participation in any such plan or
arrangement shall be commensurate with the Employee's compensation and position
with the Company, and will otherwise be subject to the provisions of any
document setting forth the terms and conditions of any such plan or arrangement.
Notwithstanding any contrary provision hereof, this Agreement does not modify
the provisions of any such plan or arrangement.
5.3 Employee shall be entitled to a number of paid vacation days as
shall be determined by the Company in its sole discretion.
5.4 Company will reimburse the Employee, in accordance with its
policies in effect from time to time, for reasonable business expenses incurred
by Employee in promoting the business of the Company upon presentation by
Employee of an itemized account of such expenses.
6. Discharge by Company.
The Company shall be entitled to terminate this Agreement and to
discharge the Employee, but only for "cause." The term "cause" shall be limited
to the following grounds:
(a) The Employee's failure (for reasons other than disability)
or refusal to perform the Employee's duties and responsibilities as set
forth in Section 3 hereof, continuing after written warning;
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(b) Dishonesty affecting the Company;
(c) Excessive use of illegal drugs or alcohol that is not
being medically treated as alcoholism which materially interfere with
performance of the Employee's obligations under this Agreement which
continue after written warning from the Company;
(d) Conviction of a felony or of any crime involving moral
turpitude, fraud or misrepresentation;
(e) The commission by the Employee of any willful or
intentional act which could reasonably be expected to materially injure
the reputation, business or business relationships of the Company; and
(f) Any material breach (not covered by any of the clauses (a)
through (e)) of any of the provisions of this Agreement, if such breach
is not cured within 10 days after written notice thereof to the
Employee by the Company.
7. Employee's Representations and Warranties.
Employee covenants, represents and warrants to the Company that (i)
Employee has not entered into, and will not enter into, any agreement or
obligation that may interfere with Employee's full compliance with the terms of
this Agreement, and (ii) Employee currently has no property rights or claims
relating to any invention, discovery, concept or idea, or any improvement
thereof, or know how related thereto, acquired at any time which has not been
disclosed to the Company in writing by the Employee prior to the date hereof.
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8. Inventions.
With respect to Inventions made or conceived by the Employee, whether
or not during the hours of his employment or with the use of the Company
facilities, materials, or personnel, either solely or jointly with others during
his employment by the Company, or within two (2) years after termination of such
employment if based on or related to Confidential Information:
(a) The Employee shall inform the Company promptly and fully
of such Inventions by a written report, setting forth in detail a description of
the Invention and any processes associated with its promotion. A detailed
written report also will be submitted by the Employee upon completion of any
studies or research projects undertaken on the Company's behalf, whether or not
in the Employee's opinion a given project has resulted in an Invention.
(b) The Employee shall apply, at the Company's request and
expense, for United States and foreign letters patent either in the Employee s
name or otherwise as the Company shall desire.
(c) The Employee hereby assigns and agrees to assign without
further consideration to the Company or its nominee all of his rights to such
Inventions, and to applications for United States and/or foreign letters patent
and to United States and/or foreign letters patent granted upon such Inventions.
(d) The Employee shall acknowledge and deliver promptly to the
company, without charge to the Company but at its expense, such written
instruments and do such other acts, such as giving testimony in support of any
patent application, as may be necessary in the
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opinion of the Company to obtain and maintain United States and/or foreign
letters patent and to vest the entire right and title thereto in the Company.
(e) The Company- shall also have the royally-free right to use
in its business, and to make, use and sell products, processes and/or services
derived from any inventions, discoveries, concepts, and ideas, whether or not
patentable, including but not limited to processes, methods, formulas, and
techniques, as well as improvements thereof or know-how related thereto, which
are not within the scope of Inventions as defined herein but which are conceived
or made by the Employee during the hours which he is employed by the Company or
with the use or assistance of the Company's facilities, materials or personnel.
9. Restrictive Covenants.
9.1 Employee agrees that he will not, either during his employment or
at any time after cessation of such employment, impart or disclose any of the
Confidential Information to any person, firm or corporation other than Company,
or use any of such Confidential Information, directly or indirectly for the
Employee's own benefit or for the benefit of any person, firm or corporation
other than Company or its affiliates. Employee's obligations under this Section
9.1 shall cease with respect to any such Confidential Information if such
information (i) was already known to Employee at the time of disclosure, free of
any obligation to keep it confidential, or (ii) was subsequently disclosed to
Employee without breach of this Agreement by a third person who rightfully
received and disclosed it without breaching any confidentiality obligation to
the Company. It is also understood by the parties that Employee may be required
to
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disclose Confidential Information (a) pursuant to subpoena or other court
process, (b) at the express direction of any other authorized government agency
or (c) otherwise as required by law or regulation. Disclosure of Confidential
Information or any part thereof in such circumstances will not constitute a
breach of the confidentiality provisions set forth in this Agreement, provided
that Employee notifies Company in advance of any such disclosure and cooperates
with Company in any efforts that Company may make to seek a protective order
with respect to such disclosure.
9.2 In addition to the foregoing agreements relating to the Company's
Confidential Information, during the term of this Agreement (including any
renewals thereof) and during the term of the "Post-Employment Period" (as
defined herein), Employee will not, without the Company's prior written consent,
(i) solicit any of the employees of Company for the purpose of hiring or
retaining any such employees, (ii) hire or retain or cause to be hired or
retained any of the employees of Company or (iii) become involved in any manner,
including without limitation as an officer, director, employee, consultant,
representative, xxanner, owner or shareholder (except as a holder of less than a
two percent (2%) equity interest in a public entity) in any business located in
the United States which is in the business of inventing, developing,
manufacturing, marketing, providing or selling products competitive with the
products that the Company has developed, manufactured, marketed, produced or
sold, or is in the process of developing (and reasonably expect to bring to
market within one (1) year after the expiration or the Post-Employment Period or
longer if required by the U.S. Food and Drug Administration
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clearance or approval process), manufacturing, marketing, producing or selling
as of the date that Employee's employment terminates. For purposes of this
Agreement, the term "Post Employment Period" shall mean the period commencing on
the date that this Agreement is terminated for any reason and ending two (2)
years from the date of such termination.
9.3 Employee agrees that all memoranda, lab books, notes, records,
charts, formulae, specifications, lists and other documents made, compiled,
received, held or used by Employee while employed by Company, concerning any
phase of Company's business or its Confidential Information, shall be Company's
property and shall be delivered by Employee to Company upon termination of
Employee's employment or at any earlier time on the request of Company.
9.4 Employee acknowledges that given his access to information
regarding Company, the provisions of this Section 9 are reasonable and necessary
to protect Company's business. Employee further acknowledges that Employee has
carefully reviewed the provisions of this Section 9, that Employee fully
understands the economic consequences thereof, that Employee has assessed the
respective advantages and disadvantages to Employee of entering into this
Agreement and Employee has concluded that, in light of Employee's education,
skills and abilities, the restrictions set forth in this Section 9 will not
prevent Employee from earning a living after the termination of this Agreement.
Employee agrees that each of the provisions of this Section 9, including,
without limitation. the period of time, geographical area and types and scope of
the restrictions on Employee's activities specified herein, are intended to be
and shall be divisible. Employee further acknowledges that reasonableness of
these provisions as an integral
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part of the terms of Employee's employment. If any provision of this Section 9
(including any sentence, clause or part thereof) shall be adjudicated to be
invalid or unenforceable, such provision shall be deemed amended to delete
therefrom the portion thus adjudicated to be invalid or unenforceable such
deletion to apply only with respect to the operation of such provision in the
particular jurisdiction in which such adjudication is made. In addition, if any
particular provision contained in this Agreement shall for any reason be held to
be excessively broad as to duration, geographical scope, activity or subject, it
shall be construed by limiting and reducing such provision as to such
characteristic so that the provision is enforceable to the fullest extent
compatible with the applicable law as it shall then appear.
9.5 As it would be very difficult to measure the damages which would
result to Employer from a breach of any of the covenants contained in this
Section 9, in the event of such a breach, Company shall have the right to have
such covenants specifically enforced by a court of competent jurisdiction.
Employee hereby recognizes and acknowledges that irreparable injury or damage
shall result to the business of Company in the event of a breach or threatened
breach by Employee of the terms and provisions of this Section 9. Therefore,
Employee agrees that Company shall be entitled to an injunction restraining
Employee from engaging in any activity constituting such breach or threatened
breach. Nothing contained herein shall be construed as prohibiting Company from
pursuing any other remedies available to Company at law or in equity for such
breach or threatened breach, including, but not limited to, recovery of damages
from
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Employee and, if Employee is still employed by Company, terminating the
employment of Employee in accordance with the terms and provisions hereof.
10. Notices.
For the purposes of this Agreement, notices and all other
communications provided for or relating to the Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered, sent by
facsimile with a facsimile confirmation of transmission, delivered by overnight
courier, or mailed by United States certified or express mail, return receipt
requested, postage prepaid, addressed as follows:
If to Employee: At the Employee's most recent residence
address reflected on the Company's records.
If to the Company: Orthopaedic Biosystems Ltd., Inc.
7320 East Butherus, Suite 206
Scottsdale, Arizona 85260
with a copy to: Steven P. Davis
Aronberg Goldgehn Davis & Garmisa
One IBM Plaza, Suite 3000
Chicago, Illinois 60611
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
11. General.
11.1 No modification, amendment, extension or waiver of this Agreement
shall be binding upon the Company or Employee unless made in a writing signed by
an officer of the Company and Employee which expressly purports to modify this
Agreement.
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11.2 This Agreement is the entire agreement between the parties
involving the subject hereof and supersedes any discussion, negotiations,
representations or prior or similar agreements upon the same subject. Company
has offered Employee no inducements to enter into this Agreement other than as
fully disclosed herein.
11.3 This Agreement is personal to and not assignable by Employee
without the Company's advance written consent. This Agreement shall inure to the
benefit of, be binding upon and be enforceable by the Company, its successors
and assigns, and shall be binding upon Employee and Employee's heirs, permitted
assigns and legal representatives.
11.4 This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Arizona, without reference to principles
of conflicts of law.
11.5 The language set forth in this Agreement shall be deemed to be the
language chosen by both parties to express their mutual intent, and no rule of
strict construction shall be applied against either party hereto.
11.6 If a court of competent jurisdiction determines that any specific
provision hereof is invalid and unenforceable and refuses to any reason to
reform such provision as contemplated by the parties, the validity and
enforceability of the remaining provisions of this Agreement shall not be
affected, and the Agreement shall thereafter be construed as if the invalid
provision had not been included in the Agreement, unless the elimination of such
provision destroys the underlying business purpose of this Agreement.
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11.7 In the event a dispute relating to this Agreement is litigated,
the prevailing party shall be entitled to recover the costs and fees incurred in
prosecuting such action, including, but not limited to, reasonable attorneys
fees and the fees of any expert witnesses.
11.8 This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
ORTHOPAEDIC BIOSYSTEMS LTD., INC.
By: /s/ D. Ronald Yagoda
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ATTEST:
/s/ Steven Davis
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Secretary
EMPLOYEE:
/s/JEFFRY B. SKIBA
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Signature
JEFFRY B. SKIBA
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Printed Name