Employment Agreement - Inamed Corp. and Nicholas L. Teti
EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
the 23rd day of July, 2001, by and between Inamed Corporation, a Delaware
corporation (the "Corporation"), and Nicholas L. Teti (the "Executive")
(collectively, the "Parties"). The Parties hereto, intending to be legally
bound, do hereby agree as follow:
1. DEFINITIONS. In addition to certain terms defined elsewhere in this
Agreement, the following terms shall have the following respective meanings:
1.1 "AFFILIATE" shall mean any Person controlling, controlled by or under
common control with, the Corporation.
1.2 "BASE SALARY" shall mean the salary provided for in Section 4 of this
Agreement.
1.3 "BOARD" shall mean the Board of Directors of the Corporation.
1.4 "CAUSE" shall mean that the Executive:
(a) has been convicted of any felony or any crime involving fraud, theft,
embezzlement, dishonesty or moral turpitude;
(b) has engaged in conduct which is materially injurious to the
Corporation or its Affiliates, or any of their respective customer or
supplier relationships, financially or otherwise;
(c) has failed to perform his duties as required under Section 2 to the
reasonable satisfaction of the Board after being provided with notice
thereof and thirty (30) days opportunity to remedy such failure; or
(d) in carrying out his duties under this Agreement, has engaged in acts
or omissions constituting gross negligence or willful misconduct
resulting, in either case, in material harm to the Corporation.
1.5 "CHANGE IN CONTROL" shall be deemed to have occurred if:
(a) Any "person", as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Corporation, any trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation, or any
corporation owned, directly or indirectly, by the stockholders of the
Corporation in substantially the same proportions as their ownership
of stock of the Corporation), becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Corporation representing fifty-one percent (51%)
or more of the combined voting power of the Corporation's then
outstanding securities; provided, however, that a change in the
proportion of Appaloosa Management, L.P's ownership of stock of the
Corporation shall not constitute a Change in Control under this
Subsection 1.5(a);
(b) During any period of two (2) consecutive years (not including any
period prior to the execution of this Agreement), individuals who at
the beginning of such period constitute the Board, and any new
director (other than a director(s) designated by a person who has
entered into an agreement with the Corporation to effect a transaction
described in clause (a), (c) or (d) of this subsection) whose election
by the Board or nomination for election by the Corporation's
stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute at
least a majority thereof;
(c) The stockholders of the Corporation approve a merger or consolidation
of the Corporation with any other corporation, other than (i) a merger
or consolidation which would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to
represent (either
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by remaining outstanding or by being converted into voting securities
of the surviving entity) more than fifty (50%) of the combined voting
power of the voting securities of the Corporation or such surviving
entity outstanding immediately after such merger or consolidation or
(ii) a merger or consolidation effected to implement a
recapitalization of the Corporation (or similar transaction) in which
no "person" (as defined above) acquires more than twenty percent (20%)
of the combined voting power of the Corporation's then outstanding
securities; or
(d) the stockholders of the Corporation approve an agreement for the sale
or disposition by the Corporation of all or substantially all of the
Corporation's assets.
1.6 "CORPORATION PROPERTY" shall mean all items and materials provided by
the Corporation to the Executive, or to which the Executive has access, in the
course of his employment, including, without limitation, all files, records,
documents, drawings, specifications, memoranda, notes, reports, manuals,
equipment, computer disks, videotapes, drawings, blueprints and other documents
and similar items relating to the Corporation, its Affiliates or their
respective customers, whether prepared by the Executive or others, and any and
all copies, abstracts and summaries thereof.
1.7 "COMPETITION" shall mean any direct or indirect research on, or
development, production, marketing, leasing or selling of, any product, process
or service which is the same as, similar to, or in competition with, any line of
business or research in which the Corporation or any Affiliate is now engaged or
hereinafter engages.
1.8 "CONFIDENTIAL INFORMATION" shall mean all nonpublic and/or proprietary
information and trade secrets respecting the business of the Corporation or any
Affiliate, including, without limitation, its products, programs, projects,
promotions, marketing plans and strategies, business plans or practices,
business operations, employees, research and development, intellectual property,
software, databases, trademarks, pricing information and accounting and
financing data. Confidential Information also includes information concerning
the Corporation's or any Affiliate's customers or clients, such as their
identity, address or any other information kept by the Corporation or any
Affiliate concerning its customers whether or not such information has been
reduced to documentary form. Confidential Information does not include
information that is, or becomes, available to the public unless such
availability occurs through an unauthorized act on the part of the Executive. In
the course of his employment hereunder, the Executive shall not be provided with
confidential information concerning Appaloosa Management, L.P., and no such
information shall be deemed to be Confidential Information under this Agreement.
1.9 "DISABILITY" shall mean a physical or mental incapacity that prevents
the Executive from performing the essential functions of his position with the
Corporation for a period of one hundred eighty (180) days as determined (a) in
accordance with any long-term disability plan provided by the Corporation of
which the Executive is a participant, or (b) by the following procedure: The
Executive agrees to submit to medical examinations by a licensed healthcare
professional selected by the Corporation, in its sole discretion, to determine
whether a Disability exists. In addition, the Executive may submit to the
Corporation documentation of a Disability, or lack thereof, from a licensed
healthcare professional of his choice. Following a determination of a Disability
or lack of Disability by the Corporation's or the Executive's licensed
healthcare professional, the other Party may submit subsequent documentation
relating to the existence of a Disability from a licensed healthcare
professional selected by such other Party. In the event that the medical
opinions of such licensed healthcare professionals conflict, such licensed
healthcare professionals shall appoint a third licensed healthcare professional
to examine the Executive, and the opinion of such third licensed healthcare
professional shall be dispositive.
1.10 "GOOD REASON" shall mean and exist if, without the Executive's prior
written consent, one or more of the following events occurs:
(a) the Executive is assigned duties or responsibilities that are
inconsistent, in any significant respect, with the position of Chief
Executive Officer;
(b) the Executive's title as Chief Executive Officer is changed;
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(c) the Executive's Base Salary is decreased by the Corporation;
(d) the Executive is excluded from participation in any employee benefit
plan or program offered to other similarly executives of the
Corporation or his benefits under such plans or programs are
materially reduced;
(e) the Corporation fails to reimburse the Executive for business expenses
in accordance with the Corporation's policies, procedures or
practices;
(f) the Corporation materially breaches this Agreement in any manner not
set forth in (a) through (e) above;
(g) the Corporation fails to obtain a written agreement from any successor
or assign of the Corporation to assume the obligations under this
Agreement upon a Change in Control; or
(h) following a Change in Control, the Executive is required to relocate
his principal place of business more than sixty (60) miles from 5540
Ekwill Street, Santa Barbara, California;
provided, however, that none of the foregoing shall constitute Good Reason if:
(i) the Executive gives the Corporation timely notice of his intent to terminate
for Good Reason and the Corporation cures or remedies the reasons cited by the
Executive in said notice within thirty (30) days of receipt of said notice, or
(ii) sixty (60) days or more have passed between the event(s) constituting Good
Reason and the Executive's giving notice that he is terminating his employment
for Good Reason.
1.11 "PERSON" shall mean any individual, firm, partnership, association,
trust, company, corporation or other entity.
1.12 "TERM OF EMPLOYMENT" shall mean the period specified in Subsection 3.
2. POSITIONS AND DUTIES.
As of the Effective Date (as defined below), the Corporation shall employ
the Executive, and the Executive hereby accepts such employment, as Chief
Executive Officer of the Corporation upon the terms and provisions set forth in
this Agreement. The Executive shall report to the Board. The Executive shall
observe and comply with the Corporation's rules and regulations regarding the
performance of his duties and shall carry out and perform all orders, directions
and policies given to him by the Board. The Executive shall at all times carry
out the duties assigned to him in a loyal, trustworthy and businesslike manner.
3. TERM.
This Agreement shall be effective on July 23, 2001 (the "Effective Date"),
and shall continue for a period of three (3) years from the Effective Date;
provided, however, that this Agreement shall be extended automatically at the
end of the initial term for a one (1) year term and thereafter for successive
one (1) year terms if neither Party has advised the other in writing in
accordance with Subsection 10.1 at least sixty (60) days prior to the end of the
then current term that such term will not be extended for an additional one (1)
year term. The initial three (3) year term and each successive one (1) year term
(if any) shall be referred to herein as the "Term of Employment".
4. COMPENSATION AND BENEFITS.
4.1 BASE SALARY. The Executive's annual base salary (the "Base Salary")
shall be FOUR HUNDRED THOUSAND DOLLARS ($400,000.00), payable in accordance with
the Corporation's pay policy, with applicable federal, state and local taxes
withheld. The Corporation may, from time to time, increase, but not reduce, the
Executive's compensation. Any changes to the Executive's compensation will be
recorded in subsequent written amendments to this Agreement.
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4.2 INCENTIVE COMPENSATION.
4.2.1 The Corporation may pay the Executive an annual discretionary bonus
for each fiscal year ending during the Term of Employment in an amount that will
be determined by the Compensation Committee based on criteria, including the
Executive's performance and the performance of the Corporation, established in
the first (1st) quarter of each year. Any annual bonus that may be awarded to
the Executive shall be paid at the same time as annual bonuses are paid to other
senior officers of the Corporation, unless the Executive has elected to defer
receipt of all or part of the bonus amounts to which he is entitled in respect
of any such calendar year in accordance with the terms and provisions of any
deferred compensation program maintained by the Corporation.
4.2.2 Notwithstanding the foregoing, the Executive shall receive a
guaranteed bonus for the year 2001 in an amount of fifty percent (50%) of the
Executive's Base Salary, which bonus shall be pro-rated for the portion of the
year the Executive actually works.
4.3 FULL RECOURSE LOAN. No later than thirty (30) days following the
Effective Date, the Corporation shall provide the Executive with a full recourse
loan in the amount of TWO HUNDRED THOUSAND DOLLARS ($200,000) and bearing
interest at the minimum rate necessary to avoid imputed income under Section
7872 of the Internal Revenue Code of 1986, as amended (the "Code"). Repayment of
the principal of such loan shall be made by the Executive in one-third (1/3)
installments no later than February 28 of each of 2003, 2004 and 2005, with all
accrued interest due and payable on February 28, 2005. In the event of the
Executive's termination prior to full repayment, any separation payments due
under Section 8 will be reduced by the amount outstanding.
4.4 REIMBURSEMENTS. The Executive shall be reimbursed by the Corporation,
upon presentation of appropriate documentation, for reasonable expenses and
disbursements incurred by him in the course of the performance of his duties
hereunder.
4.5 BENEFIT PLANS. The Executive shall be entitled to participate, on the
same basis as the Corporation's other executive employees, in all benefit plans
(the "Benefit Plans") maintained by the Corporation for its executive employees
generally, including but not limited to group medical, dental, life and
disability insurance plans, incentive or stock option plans, thrift, pension,
profit-sharing, stock bonus and long-term performance award plans or any other
plan, program or policy of the Corporation that is intended to benefit
employees, as in effect from time to time.
4.6 FRINGE BENEFITS. The Executive shall be entitled to receive, on the
same basis as the Corporation's other executive employees, all other benefits
maintained by the Corporation for its executive employees generally, as in
effect from time to time. The Executive will be granted paid leave consistent
with the Corporation's paid leave policy in effect from time to time.
4.7 RELOCATION ASSISTANCE. The Corporation shall provide the Executive
with the relocation assistance set forth in the Relocation Agreement annexed as
Exhibit A hereto.
4.8 STOCK OPTIONS AND LOCK-UP AGREEMENTS.
4.8.1 STOCK OPTIONS. The Corporation shall grant to the Executive options
(the "Options") to purchase 300,000 shares of the Corporation's common stock, in
accordance with and subject to the Inamed Corporation Executive Officer Stock
Option Agreement between the Corporation and the Executive, dated as of the
Effective Date of this Agreement and attached hereto as Exhibit B.
4.8.2 LOCK-UP AGREEMENTS. The Executive will execute any other documents
reasonably required by the Corporation in connection with the Options,
including, without limitation, any reasonable lock-up or similar agreements
required by the Corporation's underwriters in connection with any offering of
the Corporation's securities.
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5. DUTY OF LOYALTY.
5.1 EXECUTIVE'S POSITION OF TRUST. As a result of the Executive's
employment, the Executive will have access to Confidential Information.
5.2 OBLIGATIONS DURING THE TERM. The Executive agrees that during the Term
of Employment he shall diligently devote his time and efforts to the duties and
responsibilities assigned to him by the Corporation, and without prior express
written authorization of the Board, the Executive shall not, directly or
indirectly, either alone or in concert with others, engage in any of the
following activities:
(a) Perform or render any services of a business, professional or
commercial nature, relating to services or products competitive with
the Corporation, to or for the benefit of himself or any other person
or entity, whether for compensation or otherwise, except for personal
investments and other activities approved by the Corporation;
(b) Engage in any activity directly or indirectly in competition with or
adverse to the Corporation;
(c) Engage in any activity for purpose of influencing or attempting to
influence the Corporation's customers, either directly or indirectly,
to conduct business with any business enterprise in competition with
the Corporation; or
(d) Undertake or participate in any planning for or organization of any
business activity that is or will be in competition with the
Corporation in any field(s) or area(s) in which the Executive has
worked or with which the Executive has come into contact, or of which
the Executive has gained knowledge during the Term of Employment.
5.3 POST-EMPLOYMENT OBLIGATIONS. As a condition of the Executive's having
access to Confidential Information, and in consideration of the payments and
benefits provided hereunder, the Executive agrees that for a period of twelve
(12) months after termination of his employment, regardless of the reason, the
Executive will not, directly or indirectly, either for himself or for any other
person or entity, whether as an agent, consultant, employee, officer, director,
investor, partner, shareholder, proprietor or in any other individual or
representative capacity (excluding the holding for investment of less that five
percent (5%) of the outstanding securities of any corporation which are
regularly traded on a recognized stock exchange), do any of the following:
(a) Engage in competition with the Corporation without the Corporation's
prior express written approval;
(b) Divert or take away (or attempt to divert or take away), any of the
Corporation's present, former or prospective customers, including, but
not limited to, those upon whom he called, met with or became
acquainted with while engaged as an employee of the Corporation;
(c) Interfere with the contractual or business relationships of the
Corporation;
(d) Solicit or attempt to solicit any employees or clients of the
Corporation; or
(e) Slander or disparage the Corporation, or undertake any activity which
adversely impacts, or is reasonably likely to impact, the goodwill of
the Corporation and its business opportunities.
The Parties agree that Article 5 of Exhibit C hereto (as identified in Section 6
below) shall apply only during the Term of Employment and for a period of twelve
(12) months thereafter.
5.4 CORPORATION PROPERTY. The Executive agrees that upon termination of
his employment by the Corporation for any reason, or at such earlier time as the
Corporation may request, the Executive shall forthwith return to the Corporation
all documents and other property in his possession belonging to the Corporation
or any of its Affiliates.
5.5 SEVERABILITY. Each of the covenants of Section 5 shall be construed as
separate covenant covering the subject matter in each of the separate counties
and states in the United States and governmental subdivisions outside of the
United States (collectively, the "Governmental Units"). To the extent that any
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covenant is determined by a court of competent jurisdiction to be unenforceable
in any one or more of said Governmental Units, said covenant shall not be
affected with respect to any other Governmental Unit, each covenant with respect
to each Governmental Unit being construed as severable and independent.
6. INTELLECTUAL PROPERTY AND CONFIDENTIALITY AGREEMENT.
6.1 The Executive has executed or will concurrently herewith execute the
Corporation's Intellectual Property and Confidentiality Agreement in the form
that is attached hereto as Exhibit C, the terms of which are incorporated herein
by reference. Nothing in Article 3 of Exhibit C shall prohibit the Executive
from removing any Corporation Property from the premises of the Corporation to
the extent necessary in the course of the Executive's performance of his duties
hereunder and/or for other legitimate purposes of the Corporation. In addition,
the Parties agree that the definition of "Company" in Article 8 of Exhibit C
shall not include Appaloosa Management, L.P. or any interest it has in any
entity outside of the Corporation and its consolidated group.
6.2 For a period of twelve (12) months after the termination of the
Executive's employment, the Executive will not undertake any employment or
activity competitive with the Corporation wherein the loyal and complete
fulfillment of the duties of the competitive employment or activity would call
upon the Executive to make judgments on or otherwise to use any Confidential
Information that is covered by this Agreement or the Intellectual Property and
Confidentiality Agreement.
7. TERMINATION.
7.1 GROUNDS. This Agreement, and the Executive's employment hereunder,
shall terminate upon the occurrence of any of the following events:
(a) EXPIRATION OF TERM. Upon or after the expiration of the Term of
Employment;
(b) TERMINATION BY THE EXECUTIVE. By the Executive (i) with Good Reason,
or (ii) without Good Reason, in each case upon thirty (30) days' prior
written notice to the Corporation;
(c) TERMINATION BY THE CORPORATION FOR CAUSE. By the Corporation
immediately for Cause;
(d) TERMINATION BY THE CORPORATION WITHOUT CAUSE. By the Corporation
without Cause, upon thirty (30) days' prior written notice to the
Executive;
(e) DISABILITY. In the event of the Executive's Disability; or
(f) DEATH. Upon the death of the Executive.
8. TERMINATION PAYMENTS.
8.1 TERMINATION DUE TO DEATH OR DISABILITY. In the event of a termination
due to the Executive's death or Disability, the Executive or his estate, as the
case may be, shall be entitled, in lieu of any other compensation whatsoever,
to:
(a) payment of his Base Salary at the rate in effect at the time of his
termination until the date of death or Disability;
(b) any annual bonus awarded but not yet paid;
(c) any annual bonus that would have been payable with respect to the year
of termination in the absence of the Executive's death or Disability,
pro-rated for the period the Executive worked prior to his death or
Disability, provided that the Executive worked at least six (6) months
in the year for which the annual bonus is payable;
(d) any deferred compensation or bonuses, including interest or other
credits on the deferred amounts, to the extent provided in the plans
or programs providing for deferral;
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(e) reimbursement of expenses incurred but not paid prior to such
termination of employment; and
(f) such rights to other benefits as may be provided in applicable plans
and programs of the Corporation, including, without limitation,
applicable employee benefit plans and programs, according to the terms
and provisions of such plans and programs.
8.2 TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. In the event that the
Corporation terminates the Executive's employment for Cause or the Executive
terminates his employment without Good Reason, the Executive shall be entitled,
in lieu of any other compensation and benefits whatsoever, to:
(a) payment of his Base Salary at the rate in effect at the time of his
termination through the date of termination of employment;
(b) any deferred compensation or bonuses, including interest or other
credits on the deferred amounts, to the extent provided in the plans
or programs providing for deferral; and
(c) such rights to other benefits as may be provided in applicable plans
and programs of the Corporation, including, without limitation,
applicable employee benefit plans and programs, according to the terms
and conditions of such plans and programs.
8.3 TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. In the event the
Corporation terminates the Executive's employment hereunder without Cause or the
Executive terminates his employment for Good Reason, the Executive shall be
entitled to the following payments and benefits:
(a) payment of his Base Salary in effect at the time of termination for a
period of: (i) twenty-four (24) months if termination occurs during
the initial three (3) year term, or (ii) twelve (12) months if
termination occurs during any subsequent one (1) year extension term,
in each case such payments to be made following the effective date of
termination (the "Post-Employment Period");
(b) any annual bonus awarded but not yet paid;
(c) any annual bonus that would have been payable with respect to the year
of termination, pro-rated for the period the Executive worked prior to
such termination, provided that the Executive worked at least six (6)
months in the year for which the annual bonus is payable;
(d) any deferred compensation or bonuses, including interest or other
credits on the deferred amounts, to the extent provided in the plans
or programs providing for deferral;
(e) reimbursement of expenses incurred but not paid prior to such
termination of employment; and
(f) continuation of participation in the Corporation's group medical,
dental and life insurance plans during the Post-Employment Period or
until the date on which the Executive first becomes eligible for
substantially equivalent insurance coverage provided by any other
entity following termination of employment by the Corporation,
whichever occurs first.
8.4 EXPIRATION OF TERM. In the event that the Executive's employment is
terminated by reason of the expiration of any Term of Employment, including as a
result of the Corporation giving notice of its intention not to extend any Term
of Employment under Section 3 of this Agreement, the Executive shall be entitled
to the following payments and benefits:
(a) payment of his Base Salary in effect at the time of termination for a
period of twelve (12) months;
(b) any annual bonus awarded but not yet paid;
(c) any annual bonus that would have been payable with respect to the year
of termination, pro-rated for the period the Executive worked prior to
such termination, provided that the Executive worked at least six (6)
months in the year for which the annual bonus is payable;
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(d) any deferred compensation or bonuses, including interest or other
credits on the deferred amounts, to the extent provided in the plans
or programs providing for deferral;
(e) reimbursement of expenses incurred but not paid prior to such
termination of employment; and
(f) such rights to other benefits as may be provided in applicable plans
and programs of the Corporation, including, without limitation,
applicable employee benefit plans and programs, according to the terms
and conditions of such plans and programs.
8.5 NON-DUPLICATION OF BENEFIT. Notwithstanding the foregoing, nothing in
this Agreement shall result in a duplication of payments or benefits provided
under this Section 8, nor shall anything in this Agreement require the
Corporation to make any payment or to provide any benefit to the Executive that
the Corporation is otherwise required to provide under any other contract,
agreement or arrangement.
8.6 GENERAL RELEASE. No payments or benefits payable to the Executive upon
the termination of his employment pursuant to this Section 8 shall be made to
the Executive unless and until he executes a general release in a form
satisfactory to the Corporation and such general release becomes effective
pursuant to its terms.
9. CHANGE IN CONTROL.
9.1 VESTING OF STOCK OPTIONS. In the event of a Change in Control, all
stock options granted by the Corporation to the Executive shall vest in
accordance with the vesting provisions set forth in Exhibit B.
9.2 TERMINATION BY THE CORPORATION WITHOUT CAUSE OR BY THE EXECUTIVE FOR
GOOD REASON AFTER A CHANGE IN CONTROL. If within twelve (12) months following a
Change in Control, the Executive's employment is terminated by the Corporation
without Cause or by the Executive for Good Reason, the Executive shall be
entitled, in lieu of any other compensation and benefits whatsoever under
Section 8 or otherwise, to:
(a) payment of his Base Salary at the rate in effect at the time of his
termination through the date of termination of employment;
(b) an amount equal to the greater of (i) three (3) times his Base Salary
at the time of the Change in Control or (ii) three (3) times his Base
Salary at the time of the termination of his employment, three-fifths
(3/5) of which shall be paid in a lump sum upon satisfaction of the
conditions set forth in Subsection 8.6 and two-fifths of which shall
be paid out in equal bi-weekly installments over a period of twelve
(12) months;
(c) any annual bonus awarded but not yet paid;
(d) reimbursement of expenses incurred but not paid prior to such
termination of employment; and
(e) continuation of participation in the Corporation's group medical,
dental and life insurance plans until the earlier of eighteen (18)
months from the date of termination or until the date on which the
Executive first becomes eligible for substantially equivalent
insurance coverage provided by any other entity following termination
of employment by the Corporation.
9.3 TERMINATION BY EXECUTIVE WITHOUT GOOD REASON AFTER A CHANGE IN
CONTROL. If the Executive terminates his employment without Good Reason after
the first (1st) anniversary of a Change in Control but within ninety (90) days
following such anniversary, the Executive shall be entitled, in lieu of any
other compensation and benefits under Section 8 or otherwise, to:
(a) payment of his Base Salary at the rate in effect at the time of his
termination through the date of termination of employment;
(b) an amount equal to the greater of (i) one and one-half (1 1/2) times his
Base Salary at the time of the Change in Control or (ii) one and one-half
(1 1/2) times his Base Salary at the time of the termination of his
employment, which shall be paid in a lump sum upon satisfaction of the
conditions set forth in Subsection 8.6;
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(c) any annual bonus awarded but not yet paid;
(d) reimbursement of expenses incurred but not paid prior to such termination
of employment; and
(e) continuation of participation in the Corporation's group medical, dental
and life insurance plans until the earlier of eighteen (18) months from the
date of termination or until the date on which the Executive first becomes
eligible for substantially equivalent insurance coverage provided by any
other entity following termination of employment by the Corporation.
9.4 If any payment or right accruing to the Executive under this Agreement
(without application of this Section 9.4), either alone or together with other
payments or rights accruing to the Executive from the Corporation or an
Affiliate ("Total Payments") would constitute a "parachute payment," as defined
in Section 280G of the Code and regulations thereunder, such payment or right
shall be reduced to the largest amount or greatest right that will result in no
portion of the amount payable or right accruing under this Agreement being
subject to an excise tax under Section 4999 of the Code or being disallowed as a
deduction under Section 280G of the Code. The Executive shall cooperate in good
faith with the Corporation in providing the necessary information for making a
determination of the applicability of Section 280G. The foregoing provisions of
this Section 9.4 shall apply only if after reduction for any applicable federal
excise tax imposed by Section 4999 of the Code and federal income tax imposed by
the Code, the Total Payments accruing to the Executive would be less than the
amount of the Total Payments as reduced, if applicable, and after reduction for
only federal income taxes.
10. MISCELLANEOUS.
10.1 NOTICES. Any written notice required or permitted to be given shall
be deemed delivered either when personally delivered or when mailed, registered
or certified, postage prepaid with return receipt requested, if to the
Executive, addressed to the last residence address of the Executive as shown in
the records of the Corporation, and if to the Corporation, addressed to the
Chairman of the Board at its principal office in Santa Barbara, California.
Mailed notices shall be deemed received two (2) business days after the date of
deposit in the mail.
10.2 REMEDIES.
10.2.1 EQUITABLE REMEDIES. The Executive acknowledges and agrees any
breach, violation or evasion of the terms, conditions and provisions of Sections
5 and 6 above, will result in immediate and irreparable injury and harm to the
Corporation and shall entitle the Corporation to injunctive relief, as well as
to all other legal or equitable remedies to which the Corporation may be
entitled.
10.2.2 CESSATION/REIMBURSEMENT OF PAYMENTS. If the Executive violates any
provision of Sections 5 or 6, the Corporation may, upon giving written notice to
the Executive, immediately cease all payments and benefits that it may be
providing to the Executive pursuant to Sections 8 or 9, and the Executive may be
required to reimburse the Corporation for any payments received from, and the
cash value of any benefits provided by, the Corporation between the first day of
the violation and the date such notice is given; provided, however, that the
foregoing shall be in addition to such other remedies as may be available to the
Corporation and shall not be deemed to permit the Executive to forego or waive
such payments in order to avoid his obligations under Sections 5 or 6.
10.3 PARTIAL INVALIDITY. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall be held to be invalid or
unenforceable to any extent, the remainder of this Agreement or application of
such term or provision to persons or circumstances other than those to which it
is held invalid or unenforceable shall not be affected thereby, and each term
and provision of the Agreement shall be valid and be enforced to the fullest
extent permitted by law.
10.4 WAIVER. No waiver of any right hereunder shall be effective for any
purpose unless in writing, signed by the Party hereto possessing said right, nor
shall any waiver be construed to be a waiver of any subsequent right, term or
provision of this Agreement.
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10.5 ASSIGNMENT; EFFECT ON AGREEMENT. It is hereby acknowledged and agreed
that the Executive's rights and obligations under this Agreement are personal in
nature and shall not be assigned or delegated. This Agreement shall be binding
on and inure to the benefit of the heirs, personal representatives, successors
and assigns of the Parties, subject, however, to the restrictions on assignment
and delegation contained herein.
10.6 DISPUTES RESOLUTION AND ARBITRATION.
10.6.1 Any dispute arising in connection with the interpretation or
enforcement of the provisions of this Agreement, or its application or validity,
will be submitted to arbitration. Such arbitration proceedings shall be
instituted in Santa Barbara, California, in accordance with the rules then
existing of the American Arbitration Association. This agreement to arbitrate is
specifically enforceable.
10.6.2 Any award rendered in any such arbitration proceeding will be final
and binding on each of the Parties, and judgment may be entered thereon in any
court of competent jurisdiction. The arbitrator shall have the authority to
compel the Party that does not substantially prevail in such proceeding to pay
the reasonable costs and fees of the prevailing Party (including reasonable and
customary legal fees and expenses) to the extent that the arbitrator deems
appropriate.
10.7 EXHIBITS. The terms and conditions of this Agreement shall prevail in
the case of any discrepancy or conflict between such terms and conditions and
the terms and conditions of any exhibit hereto.
10.8 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
10.9 ENTIRE AGREEMENT. Unless expressly provided to the contrary herein,
this Agreement (and the exhibits attached hereto) contains the entire agreement
and understanding between the Parties and supersedes all prior agreements and
understandings, oral or written. No modification or termination shall be valid
unless in writing and signed by both Parties.
11. ACKNOWLEDGEMENT.
The Executive represents and acknowledges the following:
(a) he has carefully read this Agreement in its entirety;
(b) he understands the terms and conditions contained herein;
(c) he has had the opportunity to review this Agreement, at his
discretion, with legal counsel of his own choosing and has not relied
on any statement made by the Corporation or its legal counsel as to
the meaning of any term or condition contained herein or in deciding
whether to enter into this Agreement; and
(d) he is entering into this Agreement knowingly and voluntarily.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the 23rd day of July, 2001.
INAMED CORPORATION EXECUTIVE
By: /s/ RICHARD G. BABBITT /s/ NICHOLAS L. TETI
---------------------------------------- --------------------------------------------
Richard G. Babbitt Nicholas L. Teti
Title: Chairman of the Board and President
Address: Address:
5540 Ekwill Street, Suite D 2809 Holly Road
Santa Barbara, California 93111 Santa Barbara, California 93105
Date: 7/27/01 Date: 8/7/01
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