Corindus Vascular Robotics, Inc. 10-Q [cvrs-10q_093016.htm]

 

EXHIBIT 10.3

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into on October 10, 2016
by and between Corindus Vascular Robotics, Inc., a Delaware corporation with its
principal office in Waltham, Massachusetts (the “Company”), and Jeff Lemaster
(the “Executive”). Any reference herein to “Corindus” shall mean Corindus, Inc.,
a wholly-owned subsidiary of the Company.

WHEREAS, subject to the terms and conditions set forth herein, the Company
desires to employ the Executive as its Chief Commercial Officer, and the
Executive wishes to enter into such employment on the basis set forth in this
Agreement.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1.       Period of Employment. The Company hereby agrees to employ the
Executive, and the Executive hereby accepts employment with the Company upon the
terms set forth in this Agreement, on an at will basis for the period commencing
on October 10, 2016 (the ”Commencement Date”) and ending on the date the
Executive’s employment is terminated pursuant to the terms of this Agreement
(with such period being referred to herein as the ”Employment Period”). The
Executive’s employment with the Company is voluntary and he is free to resign at
any time, subject to the provisions of this Agreement. Further, the Company will
be free to terminate the Executive’s employment at any time, with or without
cause and without further obligation or liability, subject to the provisions of
this Agreement.

2.       Title; Capacity.

2.1       The Executive shall serve as Chief Commercial Officer of the Company
and as the Chief Executive Officer shall determine from time to time, including
but not limited to as an officer of any subsidiary or affiliate of the Company,
including Corindus. The Executive’s job duties are set forth in the Chief
Commercial Officer Job Description attached hereto as Exhibit A, and such other
duties as are assigned to the Executive by the Chief Executive Officer as are
consistent with his position as Chief Commercial Officer. The Executive shall
generally perform his duties from his home office, located at [       ];
provided that, the Executive understands and agrees that he will be required to
travel to and from the Company’s headquarters in Waltham, Massachusetts or such
other place or places as are necessary to satisfactorily perform his job duties.
The Executive shall be subject to the supervision of, and shall have such
authority as is delegated to the Executive by the Chief Executive Officer.

2.2       The Executive hereby accepts such employment and agrees to undertake
the duties and responsibilities inherent in such position (including but not
limited to those set forth in the charter or bylaws of the Company and on
Exhibit A) and such other duties and responsibilities as the Chief Executive
Officer shall from time to time reasonably assign to the Executive. The
Executive agrees to abide by the rules, regulations, instructions, personnel
practices and policies of the Company and any changes therein which may be
adopted from time to time by the Company. The compensation and benefits
specified under this Agreement shall constitute the sole remuneration for the
duties and responsibilities described in this Section 2.

 

 

 

 

3.       Compensation and Benefits.

3.1       Base Salary. The Company or Corindus shall pay the Executive, in
periodic installments in accordance with the Company’s customary payroll
practices, an annual base salary of $300,000 subject to annual review for
adjustment as determined by the Board, it being understood that such review may
be conducted by the compensation committee designated by the Board (the
“Committee”). The parties agree that the compensation hereunder was set in
advance of the Commencement Date, is fair market value for the Services, is
consistent with arms-length bargaining and is unrelated to the volume or value
of other business between the parties.

3.2       Annual Bonus. The Executive will be eligible for a bonus payment of up
to 25% (or such higher percentage set by the Board) of his annual salary for the
year immediately preceding payment of such bonus based on achievement of
performance objectives (as reasonably determined by the Board) contained in an
annual plan approved by the Board. Any bonus award will be paid on or before
March 15 of the fiscal year following the fiscal year in which the bonus is
earned, and conditioned upon the Executive’s employment with the Company at the
end of the immediately preceding fiscal year. For the 2016 fiscal year, the
Executive will not be eligible for a bonus.

3.3       Commission. The Executive will also be eligible to participate in the
Corindus variable compensation plan, with an annual target of $150,000 based on
100% completion of the goals and objectives established by Corindus. Corindus
will guarantee variable income at 70% ($105,000) to target for the first months
(12) months of the Executive’s employment to be paid in equal installments in
the next pay cycle following the end of the month and contingent upon completion
of quarterly MBOs (Management By Objectives) which will be mutually defined and
agreed upon by the Executive and the Chief Executive Officer.

3.4       Stock Option. The Company will grant the Executive effective on the
Commencement Date a non-qualified stock option for the purchase of an aggregate
of 550,000 shares of Common Stock of the Company pursuant to the terms of the
Corindus Vascular Robotics, Inc. 2014 Stock Award Plan (the ”Stock Plan”) and
the Company’s standard form of non-qualified stock option agreement with a
strike price equal to the closing stock price on the date of grant (the
“Option”). Subject to the Executive’s continued employment, the Option shall
vest over a period of four (4) years, with the first 25% of the Option vesting
on the one (1) year anniversary of the Commencement Date and the remaining 75%
vesting ratably monthly over the following three (3) years.

3.5       Fringe Benefits; Vacation. The Executive shall be entitled to
participate in all fringe benefit programs that the Company established and
makes available to its employees, if any, in accordance with such terms of such
programs. The Executive shall be entitled to four (4) weeks paid vacation per
year, to be taken at such times as may be approved by the Chief Executive
Officer. Nothing contained herein shall be construed to limit the time the
Company’s ability to amend, suspend, or terminate any fringe benefit program at
any time without providing the Executive notice, and the right to do so
expressly reserved.

 

 

 

3.6       Reimbursement of Expenses. The Company shall reimburse the Executive
for all reasonable travel, lodging and other expenses incurred or paid by the
Executive in connection with, or related to, the performance of his duties,
responsibilities or services under this Agreement, in accordance with policies
and procedures, and subject to limitations, adopted by the Company from time to
time.

3.7       Withholding; Section 409A. All salary and other compensation payable
to the Executive shall be subject to applicable withholding taxes. All
reimbursements and in-kind benefits provided under this Agreement shall be made
or provided in accordance with the requirements of Section 409A of the Internal
Revenue Code and the guidance issued thereunder (“Section 409A”) to the extent
that such reimbursements or in-kind benefits are subject to Section 409A,
including, where applicable, the requirements that (a) any reimbursement be for
expenses incurred during Executive’s lifetime (or during a shorter period of
time specified in this Agreement), (b) the amount of expenses eligible for
reimbursement during a calendar year may not affect the expenses eligible for
reimbursement in any other calendar year, (c) the reimbursement of an eligible
expense will be made on or before the last day of the calendar year following
the year in which the expense is incurred and (d) the right to reimbursement is
not subject to set off or liquidation or exchange for any other benefit.

4.       Termination of Employment Period. The employment of the Executive by
the Company pursuant to this Agreement shall terminate upon the occurrence of
any of the following:

4.1       At the election of the Company, for Cause (as defined below),
immediately upon written notice by the Company to the Executive. For the
purposes of this Section 4.1 and this Agreement, “Cause” shall mean (a) the
Executive has failed or refused to perform his assigned duties for the Company,
(b) the Executive has engaged in dishonesty, breach of fiduciary duty,
embezzlement, fraud, gross negligence, misconduct, a breach of the Company’s
Code of Ethics, or a violation of the Sarbanes-Oxley requirements for officers
of public companies, (c) the Executive’s commission of, conviction of, or plea
of guilty or nolo contendere to, any crime involving moral turpitude or any
felony, or (d) a material breach by the Executive of this Agreement.

4.2       Upon the death or disability of the Executive. As used in this
Agreement, the term “disability” shall mean the inability of the Executive, due
to a physical or mental disability, for a period of ninety (90) days, whether or
not consecutive, during any 360-day period to perform the services contemplated
under this Agreement, with or without reasonable accommodation as that term is
defined under state or federal law. A determination of disability shall be made
by a physician selected by the Company.

4.3       At the discretion of either party upon thirty (30) days’ written
notice of termination. In the event of termination for any reason hereunder, the
parties will not enter into a similar agreement on differing financial terms
until at least one (1) calendar year following the Commencement Date.

 

 

 

5.       Effect of Termination. In the event that the Executive’s employment is
terminated for any reason, by either the Company or the Executive, the Company
shall provide the Executive with (a) all accrued but unpaid base salary through
the date of employment termination, and (b) any unpaid or unreimbursed expenses
incurred through the date of employment termination in accordance with Section
3.4 above (the “Accrued Obligations”). The Accrued Obligations shall be the sole
amounts owing to the Executive upon termination of the Executive’s employment
and Executive shall not be eligible for any other payments or other forms of
compensation or benefits.

6.       Change In Control Stock Option Acceleration. Upon a Change in Control,
one hundred percent (100%) of the Executive’s outstanding unvested Options will
automatically vest upon a Change in Control, provided that the Executive is then
employed with the Company. For purposes of this Agreement, a “Change in Control”
shall mean a “Change in Control” as defined under the Stock Plan, as in effect
on the Commencement Date.

7.       Non-Competition and Non-Solicitation.

7.1       Restricted Activities. While the Executive is employed by the Company
and for a period of twelve (12) months after the termination or cessation of
such employment for any reason, the Executive will not directly or indirectly:

(a)       Engage in any business or enterprise (whether as owner, partner,
officer, director, employee, consultant, investor, lender or otherwise, except
as the holder of not more than 1% of the outstanding stock of a publicly-held
company) that is competitive with the Company’s Business, including but not
limited to any business or enterprise that develops, manufactures, markets,
licenses, sells or provides any product or service that competes with any
product or service developed, manufactured, marketed, licensed, sold or
provided, or planned to be developed, manufactured, marketed, licensed, sold or
provided, by the Company while the Executive was employed by the Company; or

(b)       Either alone or in association with others (i) solicit, or permit any
organization directly or indirectly controlled by the Executive to solicit, any
employee of the Company to leave the employ of the Company, or (ii) solicit for
employment, hire or engage as an independent contractor, or permit any
organization directly or indirectly controlled by the Executive to solicit for
employment, hire or engage as an independent contractor, any person who was
employed by the Company during the last two (2) years of the Executive’s
employment with the Company.

(c)       For purposes of this Section 7.1, “Company’s Business” shall mean the
development, manufacture, marketing, licensing or sales of the products or
services of the Company in the field of vascular robotics.

(d)       For purposes of Section 7 and Section 8, the term “Company” includes
the Company’s subsidiaries, including Corindus.

7.2       Extension. If the Executive violates the provisions of Section 7.1,
the Executive shall continue to be bound by the restrictions set forth in
Section 7.1 until a period of twelve (12) months has expired without any
violation of such provisions.

 

 

 

7.3       Interpretation. If any restriction set forth in Section 7.1 is found
by any court of competent jurisdiction to be unenforceable because it extends
for too long a period of time or over too great a range of activities or in too
broad a geographic area, it shall be interpreted to extend only over the maximum
period of time, range of activities or geographic area as to which it may be
enforceable.

7.4       Equitable Remedies. The restrictions contained in this Section 7 are
necessary for the protection of the business and goodwill of the Company and are
considered by the Executive to be reasonable for such purpose. The Executive
agrees that any breach of this Section 7 is likely to cause the Company
substantial and irrevocable damage which is difficult to measure. Therefore, in
the event of any such breach or threatened breach, the Executive agrees that the
Company, in addition to such other remedies which may be available, shall have
the right to apply for an injunction from a court restraining such a breach or
threatened breach and the right to specific performance of the provisions of
this Section 7.

8.       Proprietary Information and Developments.

8.1       Proprietary Information.

(a)       The Executive agrees that all information, whether or not in writing,
of a private, secret or confidential nature concerning the Company’s business,
business relationships, technologies, products, product development and
marketing strategies or financial affairs (collectively, “Proprietary
Information”) is and shall be the exclusive property of the Company. By way of
illustration, but not limitation, Proprietary Information may include
inventions, products, processes, methods, trade secrets, formulas, compositions,
compounds, projects, developments, plans, research data, clinical data,
financial data, personnel data, computer programs, customer and supplier lists,
and knowledge of customers or prospective customers of the Company. The
Executive will not disclose any Proprietary Information to any person or entity
other than employees of the Company or use the same for any purposes (other than
in the performance of his duties as an employee of the Company) without written
approval by an officer of the Company, either during or after his employment
with the Company, unless and until such Proprietary Information has become
public knowledge without fault by the Executive.

(b)       The Executive agrees that all files, letters, memoranda, reports,
records, data, sketches, drawings, laboratory notebooks, program listings, or
other written, photographic, or other tangible material containing Proprietary
Information, whether created by the Executive or others, which shall come into
his custody or possession, shall be and are the exclusive property of the
Company to be used by the Executive only in the performance of his duties for
the Company. All such materials or copies thereof and all tangible property of
the Company in the custody or possession of the Executive shall be delivered to
the Company, upon the earlier of (i) a request by the Company or (ii)
termination of his employment. After such delivery, the Executive shall not
retain any such materials or copies thereof or any such tangible property.

(c)       The Executive agrees that his obligation not to disclose or to use
information and materials of the types set forth in paragraphs (a) and (b)
above, and his obligation to return materials and tangible property, set forth
in paragraph (b) above, also extends to such types of information, materials and
tangible property of customers of the Company or suppliers to the Company or
other third parties who may have disclosed or entrusted the same to the Company
or to the Executive.

 

 

 

8.2       Developments.

(a)       The Executive will make full and prompt disclosure to the Company of
all inventions, improvements, discoveries, methods, developments, software, and
works of authorship, whether patentable or not, which are created, made,
conceived or reduced to practice by him or under his direction or jointly with
others during his employment by the Company, whether or not during normal
working hours or on the premises of the Company (all of which are collectively
referred to in this Agreement as “Developments”).

(b)       The Executive agrees to assign and does hereby assign to the Company
(or any person or entity designated by the Company) all his right, title and
interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications. However, this paragraph (b)
shall not apply to Developments which do not relate to the business or research
and development conducted or planned to be conducted by the Company at the time
such Development is created, made, conceived or reduced to practice and which
are made and conceived by the Executive not during normal working hours, not on
the Company’s premises and not using the Company’s tools, devices, equipment or
Proprietary Information. The Executive understands that, to the extent this
Agreement shall be construed in accordance with the laws of any state which
precludes a requirement in an employee agreement to assign certain classes of
inventions made by an employee, this paragraph (b) shall be interpreted not to
apply to any invention which a court rules and/or the Company agrees falls
within such classes. The Executive also hereby waives all claims to moral rights
in any Developments.

(c)       The Executive agrees to cooperate fully with the Company, both during
and after his employment with the Company, with respect to the procurement,
maintenance and enforcement of copyrights, patents and other intellectual
property rights (both in the United States and foreign countries) relating to
Developments; provided that, after his employment with the Company, such
cooperation shall be conditioned upon reimbursement by the Company of the
Executive’s reasonable costs and expenses incurred in connection therewith. The
Executive shall sign all papers, including, without limitation, copyright
applications, patent applications, declarations, oaths, formal assignments,
assignments of priority rights, and powers of attorney, which the Company may
deem necessary or desirable in order to protect its rights and interests in any
Development. The Executive further agrees that if the Company is unable, after
reasonable effort, to secure the signature of the Executive on any such papers,
any executive officer of the Company shall be entitled to execute any such
papers as the agent and the attorney-in-fact of the Executive, and the Executive
hereby irrevocably designates and appoints each executive officer of the Company
as his agent and attorney-in-fact to execute any such papers on his behalf, and
to take any and all actions as the Company may deem necessary or desirable in
order to protect its rights and interests in any Development, under the
conditions described in this sentence,

8.3       United States Government Obligations. The Executive acknowledges that
the Company from time to time may have agreements with other parties or with the
United States Government, or agencies thereof, which impose obligations or
restrictions on the Company regarding inventions made during the course of work
under such agreements or regarding the confidential nature of such work. The
Executive agrees to be bound by all such obligations and restrictions which are
made known to the Executive and to take all appropriate action necessary to
discharge the obligations of the Company under such agreements.

 

 

 

8.4       Equitable Remedies. The restrictions contained in this Section 8 are
necessary for the protection of the business and goodwill of the Company and are
considered by the Executive to be reasonable for such purpose. The Executive
agrees that any breach of this Section 8 may cause the Company substantial and
irrevocable damage which is difficult to measure. Therefore, in the event of any
such breach or threatened breach, the Executive agrees that the Company, in
addition to such other remedies which may be available, shall have the right to
apply for an injunction from a court restraining such a breach or threatened
breach and the right to specific performance of the provisions of this Section
8.

9.       Miscellaneous.

9.1       Notices. Any notices delivered under this Agreement shall be deemed
duly delivered four (4) business days after it is sent by registered or
certified mail, return receipt requested, postage prepaid, or one business day
after it is sent for next-business day delivery via a reputable nationwide
overnight courier service, in each case to the address of the recipient set
forth in the introductory paragraph hereto. Either party may change the address
to which notices are to be delivered by giving notice of such change to the
other party in the manner set forth in this Section 9.1.

9.2       Pronouns. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice
versa.

9.3       Entire Agreement. This Agreement contains the entire understanding
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement. No
provision of this Agreement shall be interpreted to mean that Executive is
subject to receiving fewer benefits than those available to him without
reference to this Agreement.

9.4       Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Executive.

9.5       Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts (without reference
to the conflicts of laws provisions thereof). Any action, suit or other legal
proceeding arising under or relating to any provision of this Agreement shall be
commenced only in a court of The Commonwealth of Massachusetts (or, if
appropriate, a federal court located within Massachusetts), and the Company and
the Executive each consents to the jurisdiction of such a court.

9.6       Successors and Assigns; Third Party Beneficiaries. This Agreement
shall be binding upon and inure to the benefit of both the Company and its
successors and assigns, including any corporation with which, or into which, the
Company may be merged or which may succeed to the Company’s assets or business;
provided, however, that the obligations of the Executive are personal and shall
not be assigned by him. Corindus and each of the Company’s other direct and
indirect subsidiaries are designated as a third party beneficiary of this
Agreement and shall be entitled to enforce the terms hereof as if it were a
party hereto.

 

 

 

9.7       Section 409A. The parties agree that this Agreement shall be
interpreted to comply with or be exempt from Section 409A, and all provisions of
this Agreement shall be construed in a manner consistent with the requirements
for avoiding taxes or penalties under Section 409A. Notwithstanding the
immediately preceding sentence, in no event shall the Company, Corindus or any
of their respective subsidiaries be liable for any additional tax, interest, or
penalties that may be imposed on Executive as a result of Section 409A or any
damages for failing to comply with Section 409A (other than for withholding
obligations or other obligations applicable to employers under the Code).

9.8       Waivers. No delay or omission by the Company in exercising any right
under this Agreement shall operate as a waiver of that or any other right. A
waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.

9.9       Captions. The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.

9.10     Severability. In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.

9.11     Survival. Anything in this Agreement to the contrary notwithstanding,
to the extent applicable, Sections 5, 7, 8, 9.1, 9.2, 9.3, 9.4, 9.5, 9.6, 9.8,
9.9, 9.10, and 9.11 shall survive the termination of this Agreement for any
reason.

9.12     Compliance with Laws. The Company and the Executive will at all times
comply with all applicable state and federal laws, rules, regulations and
standards of any and all governmental authorities and regulatory and
accreditation bodies.

9.13     Employment Eligibility. The Immigration Reform and Control Act requires
employers to verify the employment eligibility and identity of new employees.
The Executive shall provide the Company with the appropriate documentation for
verification prior to the Commencement Date.

[signature page immediately follows]

 

 

 

THE EXECUTIVE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT CAREFULLY AND
UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS IN THIS AGREEMENT.

IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the
day and year set forth above.

CORINDUS VASCULAR ROBOTICS, INC.         By:   /s/ Mark J. Toland     Mark
Toland     President and Chief Executive Officer         EXECUTIVE       /s/
Jeff Lemaster   Jeff Lemaster  

 

 

EXHIBIT A

CHIEF COMMERCIAL OFFICE JOB DESCRIPTION

Role and Responsibilities

Chief Commercial Officer Job Description

The Chief Commercial Officer is a key member of the Senior Executive team. This
role will be responsible for Marketing and Sales and is responsible for driving
profitable revenue growth and market adoption, working closely with the senior
leadership team to devise and implement strategies to grow relationships with
existing customers, as well as to penetrate and expand within new key customers.

Specific Duties

The Chief Commercial Officer’s duties shall include, but not be limited to:

•  Lead and execute revenue and commercial strategy for the organization,
driving predictable and profitable revenue growth.

•  Develop and provide leadership for a high performing product management team
to drive the execution of strategic marketing plans for meeting overall business
objectives.

•  Participate in strategic planning to define the company’s strategy and
execution plans.

•  Work closely with other functional heads to ensure alignment and delivery of
all functional needs as it relates to the Sales, Marketing and other Commercial
Functions.

•  Introduce and continuously improve best practice business processes related
to sales operations – build all processes for managing, measuring and reporting
sales force performance.

•  Recruit and develop world class commercial talent and build organizational
capability through goal setting, coaching, performance management, and
succession planning.

•  Active engagement in business development opportunities to include alliances,
partnerships, and acquisitions.

Desired Qualifications:

•  Highly accomplished commercial leader with 15 years + management experience.

•  Minimum of 10 years experience in medical device with a focus on
interventional cardiology.

•  Strategic and innovative thinker with proven ability to communicate a vision
and drive results.

•  Demonstrated management, organizational and interpersonal skills.

•  Ability to solve problems and execute on initiatives.

•  Ability to work collaboratively internally and externally.

•  Self-assured and results oriented.