May 26, 2004
Mr. James M. Stolze
446 Twin Creek Road
St. Louis, MO 63141
I am pleased to extend you an offer to join Stereotaxis as Vice President and
Chief Financial Officer. You will be responsible for the overall management of
the financial, administrative, accounting, compliance, reporting, human
resource, IT and investor relations functions of Stereotaxis, and will report
directly to me.
Your annualized base salary will be $275,000 payable semi-monthly. As a member
of the Senior Management team, you will be eligible for an annual bonus of up to
25% of your base salary (prorated to your start date) based on overall corporate
goals to be finalized within the next 30 days. The bonus will be paid in
accordance with the Company's normal practices, generally in the first quarter
of 2005, to persons employed as of January 31 of the year following the bonus
year. Further, you will be eligible for a performance and salary review at the
end of 2004 in accordance with standard Company practices (calendar year
I will recommend that the Board of Directors grant you options to purchase up to
400,000 shares of the Company's stock at $1.95 per share (the Stereotaxis
of the Board of Directors has already approved this
grant). These options will be granted under the Company's 2002 Stock Incentive
Plan and will vest over a 4-year period with 25% vesting one year from the date
of your employment and the remainder vesting monthly thereafter. It is our
intent that these options be incentive (qualified) stock options. Under the
terms of the 2002 Stock Incentive Plan, should Stereotaxis experience a change
of control and your employment be terminated or materially adversely changed,
100% of your unvested options would become vested. A copy of the 2002 Stock
Incentive Plan is included for your review.
You will be entitled to the standard benefits made available by the Company from
time to time including medical and dental insurance for you and your family
(subject to employee contributions) and paid time off for vacation and sick time
(PTO) of twenty five days per year initially, prorated to your start date. A
summary of our benefits is included for your review.
Stereotaxis is an "at-will" employer, which means that you or Stereotaxis may
terminate your employment at any time, with or without cause and without notice.
You will be required to execute the Company's standard At-Will-Employment
Agreement and Confidentiality and Non-compete Agreement (included), which
include provisions relating to arbitration of employment disputes.
Stereotaxis, Inc o 4041 Forest Park Avenue o St. Louis, MO o 63108
o (314) 615-6940 o (314) 615-6948 Fax
Mr. James M. Stolze
May 26, 2004
If you are involuntarily terminated without cause, you will receive base salary
and benefits continuation for a period of six (6) months. Such compensation will
be paid in accordance with normal payroll procedures. However, if you are
re-employed at any time in a comparable position (by Stereotaxis or another
employer) during the salary continuation period, all further salary and benefit
continuation payments will end. For purposes of this Agreement, termination for
cause shall mean gross misconduct or gross negligence such as (but not limited
to) gross breach of fiduciary duty, dishonesty, theft or commission of a crime
involving moral turpitude. Termination for cause shall also include the
Employee's failure to comply with the provisions of this offer letter.
The Stereotaxis senior management team and I are enthusiastic about working with
you to build our company. This letter contains all the terms and conditions of
the Company's offer of employment to you and any previous discussions,
understandings or agreements are superseded by this letter. This offer is
contingent upon the Company's satisfactory completion of its checks on your
background. By signing this letter, you agree that you have provided us with
copies of any employment agreement, non-compete agreement or confidentiality
agreement that might be inconsistent with your agreement with Stereotaxis and
that you are authorized to work in the United States for Stereotaxis. If the
foregoing terms are acceptable, please indicate your agreement by signing this
letter in the space provided below at your earliest convenience but not later
than five days from the date of this letter.
Bevil J. Hogg
President and CEO
ACCEPTED and AGREED this _____ day of May 2004.
My starting date will be the ____ day of ______ 2004
James M. Stolze
It is understood and agreed that the employment by Stereotaxis, Inc., a Delaware
corporation (the "Company" or "Stereotaxis"), of the employee named below
("Employee") shall be subject to the terms and conditions of this At-Will
1. Position; Base Salary; Incentive Compensation.
Employee shall serve as the Vice President and Chief Financial Officer or in
such other capacity or capacities as Stereotaxis may from time to time direct.
Employee shall report to Bevil Hogg or such other person as the Company may from
time to time direct. Employee's supervisor shall schedule employee's hours of
work and Employee's position with the Company is Exempt.
Employee shall be paid according to the terms of his or her offer letter. Such
payments shall be subject to applicable withholdings and deductions.
2. Vacation and Sick Leave Benefits.
Company-paid vacation and sick leave will be governed by the Employee Handbook.
3. Company Benefits.
While Employed by the Company, Employee shall be entitled to receive the
benefits of employment as the Company may offer from time to time. Employee
agrees that as a condition of Employee's employment by the Company that Employee
will be bound and subject to the terms and conditions of the Company's Employee
Handbook. The Employee Handbook may be revised from time to time at the sole
discretion of the Company with or without prior notice.
4. Attention to Duties; Conflict of Interest.
While employed by the Company, Employee shall devote Employee's full business
time, energy and abilities exclusively to the business and interests of
Stereotaxis, and shall perform all duties and services in a faithful and
diligent manner and to the best of Employee's abilities. Employee shall not,
without the Company's prior written consent, render to others, services of any
kind for compensation, or engage in any other business activity that would
materially interfere with the performance of Employee's duties under this
Agreement. Employee represents that Employee has no other outstanding
commitments inconsistent with any of the terms of this Agreement or the services
to be rendered to Stereotaxis. While employed by the Company, Employee shall
not, directly or indirectly, whether as a partner, employee, creditor,
shareholder, or otherwise, promote, participate or engage in any activity or
other business competitive with the Company's business. Employee shall not
invest in any company or business, which competes in any manner with the
Company, except those companies whose securities are listed on the national
The Company acknowledges that Employer serves as a Director of ESCO Corporation
and Maryville University and Employee represents that such service will not
materially interfere with the performance of Employee's duties under this
5. Proprietary Information.
Employee agrees to be bound by the terms of the Confidentiality and Noncompete
Agreement and exhibits thereto, which are attached as Exhibit A and incorporated
by this reference ("Confidentiality and Noncompete Agreement"), and, by the
rules of confidentiality promulgated by Stereotaxis from time to time.
The Company is an "at-will" employer. This means that the Company may terminate
Employee's employment at any time, with or without cause, and that Employee may
terminate Employee's employment at any time, with our without cause. Stereotaxis
makes no promise that Employee's employment will continue for a set period of
time, nor is there any promise that it will be terminated only under particular
circumstances. No raise or bonus, if any, shall alter Employee's status as an
"at-will" employee or create any implied contract of employment. Discussion of
possible or potential benefits in future years is not an express or implied
promise of continued employment. No manager, supervisor or officer of
Stereotaxis has the authority to change Employee's status as an "at-will"
employee. The "at-will" nature of the employment relationship with Employee can
only be altered by a written agreement signed by each member of the Board of
Directors of Stereotaxis. No position within Stereotaxis is considered
6. Binding Arbitration.
Any dispute, claim or controversy with respect to Employee's termination of
employment with the Company (whether the termination of employment is voluntary
or involuntary), and any dispute, claim or controversy with respect to incidents
or events leading to such termination or the method or manner of such
termination, and any question of arbitrability hereunder, shall be settled
exclusively by arbitration.
Employee and Stereotaxis each waive their constitutional rights to have such
matters determined by a jury. Instead of a jury trial, Stereotaxis and Employee
shall choose an arbitrator. Arbitration is preferred because, among other
reasons, it is quicker, less expensive and less formal than litigation in court.
The provisions governing arbitration shall be described in detail in
Stereotaxis's Employee Handbook.
The arbitrator shall not have the authority to alter, amend, modify, add to or
eliminate any condition or provision of this Agreement, including, but not
limited to, the "at-will" nature of the employment relationship. The arbitration
shall be held in St. Louis, Missouri. The award of the arbitrator shall be final
and binding on the parties. Judgment upon the arbitrator's award may be entered
in any court, state or federal, having jurisdiction over the parties. If a
written request for arbitration is not made within one (1) year of the date of
the alleged wrong or violation, all remedies regarding such alleged wrong or
violation shall be waived.
Should any court determine that any provision(s) of this Agreement to arbitrate
is void or invalid, the parties specifically intend every other provision of
this Agreement to arbitrate to remain enforceable and intact. The parties
explicitly and definitely prefer arbitration to recourse to the courts, for the
reasons described above, and have prescribed arbitration as their sole and
exclusive method of dispute resolution.
7. No Inconsistent Obligations.
Employee represents that Employee is not aware of any obligations, legal or
otherwise, inconsistent with the terms of this Agreement or Employee's
undertakings under this Agreement.
Stereotaxis may assign this Agreement and Employee's employment to an affiliated
entity to which the operations it currently manages are transferred.
No promises or changes in Employee's status as an employee of the Company or any
of the terms and conditions of this Agreement can be made unless they are made
in writing and approved by the Board of Directors of Stereotaxis. This Agreement
and the terms and conditions described in it cannot be changed orally or by any
conduct of either Employee or Stereotaxis or any course of dealings between
Employee, or another person and Stereotaxis.
Unless otherwise agreed upon in writing by the parties, Employee, after
termination of any employment, shall not seek nor accept employment with the
Company in the future and the Company is entitled to reject without cause any
application for employment with the Company made by Employee, and not hire
Employee. Employee agrees that Employee shall have no cause of action against
the Company arising out of any such rejection.
This agreement and performance under it, and any suits or special proceedings
brought under it, shall be construed in accordance with the laws of the United
States of America and the State of Missouri and any arbitration, mediation or
other proceeding arising hereunder shall be filed and adjudicated in St. Louis,
If any term or condition, or any part of a term or condition, of this Agreement
shall prove to be invalid, void or illegal, it shall in no way affect, impair or
invalidate any of the other terms or conditions of this Agreement, which shall
remain in full force and effect.
The failure of either party to enforce any provision of this Agreement shall not
be construed as a waiver of or acquiescence in or to such provision.
The Parties to this Agreement represent and acknowledge that in executing this
Agreement they do not rely and have not relied upon any representation or
statement made by the other party or the other party's agents, attorneys or
representatives regarding the subject matter, basis, or effect of this Agreement
or otherwise, other than those specifically stated in this written Agreement.
This Agreement shall be interpreted in accordance with the plain meaning of its
terms and not strictly for or against any party. This Agreement shall be
construed as if each party was its author and each party hereby adopts the
language of this Agreement as if it were his, her or its own. The captions to
this Agreement and its sections, subsections, tables and exhibits are inserted
only for convenience and shall not be construed as part of this Agreement or as
a limitation on or broadening of the scope of this Agreement or any section,
subsection, table or exhibit.
Employee and Stereotaxis have executed this Agreement and agree to enter into
and be bound by the provisions hereof as of _________________________.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
Name: Peggy S. Stohr
Title: V.P. Administration/Controller
James M. Stolze
CONFIDENTIALITY AND NONCOMPETE AGREEMENT
This Confidentiality and Noncompete Agreement ("Agreement") is made and entered
into this ____day of May 2004, by and between Stereotaxis, Inc., a Delaware
corporation ("Company"), and James M. Stolze ("Employee").
WHEREAS, Company is engaged in, among other things, the business of researching,
marketing and selling medical devices. The Company is headquartered and its
principal place of business is located in St. Louis, Missouri;
WHEREAS, Company has expended a great deal of time, money and effort to develop
and maintain its proprietary Confidential and Trade Secret Information (as
defined herein) which provides it with a significant competitive advantage;
WHEREAS, the success of Company depends to a substantial extent upon the
protection of its Confidential and Trade Secret Information and customer
goodwill by all of its employees;
WHEREAS, Employee desires to be employed, or to continue to be employed, by
Company to provide managerial, administrative, technical and/or sales services
for Company; to be eligible for opportunities for advancement within Company
and/or compensation increases which otherwise would not be available to
Employee; and to be given access to Confidential and Trade Secret Information of
Company which is necessary for Employee to perform his or her job, but which
Company would not make available to Employee but for Employee's signing and
agreeing to abide by the terms of this Agreement as a condition of Employee's
employment and continued employment with Company. Employee recognizes and
acknowledges that Employee's position with Company has provided and/or will
continue to provide Employee with access to Company's Confidential and Trade
WHEREAS, Company compensates its employees to, among other things, develop and
preserve goodwill with its customers on Company's behalf and business
information for Company's ownership and use;
WHEREAS, If Employee were to leave Company, Company, in all fairness, would need
certain protections in order to prevent competitors of Company from gaining an
unfair competitive advantage over Company and/or diverting goodwill from
Company, and to prevent misuse or misappropriation by Employee of the
Confidential and Trade Secret Information;
WHEREAS, Company desires to obtain the benefit of the services of Employee and
Employee is willing to render such services on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the compensation and other benefits of
Employee's employment by Company and the recitals, mutual covenants and
agreements hereinafter set forth, Employee and Company agrees as follows:
1. Employment Services.
1.1 Employee agrees that throughout Employee's employment with
Company, Employee will (i) faithfully render such services as
may be delegated to Employee by Company, (ii) devote
Employee's entire business time, good faith, best efforts,
ability, skill and attention to Company's business, and (iii)
follow and act in accordance with all of Company's rules,
policies and procedures of Company, including, but not limited
to, working hours, sales and promotion policies and specific
1.2 "Company" means Stereotaxis, Inc. or one of its subsidiaries;
whichever is Employee's employer. The "Subsidiary" means any
corporation, joint venture or other business organization in
which Stereotaxis, Inc. now or hereafter, directly or
indirectly, owns or controls more than fifty percent (50%)
2. Confidential and Trade Secret Information.
2.1 Employee agrees to keep secret and confidential, and not to
use or disclose to any third parties, except as directly
required for Employee to perform Employee's employment
responsibilities for Company, any of Company's proprietary
Confidential and Trade Secret Information.
2.2 "Confidential and Trade Secret Information" includes any
information pertaining to Company's business which is not
generally known in the medical devices industry, such as, but
not limited to, trade secrets, know-how, processes, designs,
products, documentation, quality control and assurance
inspection and test data, production schedules, research and
development plans and activities, equipment modifications,
product formulae and production and recycling records,
standard operating procedure and validation records, drawings,
apparatus, tools, techniques, software and computer programs
and derivative works, inventions (whether patentable or not),
improvements, copyrightable material, business and marketing
plans, projections, sales data and reports, confidential
evaluations, the confidential use, nonuse and compilation by
the Company of technical or business information in the public
domain, margins, customers, customer requirements, costs,
profitability, sales and marketing strategies, pricing
policies, operational methods, strategic plans, training
materials, internal financial information, operating and
financial data and projections, distribution or sales methods,
prices charged by or to Company, inventory lists, sources of
supplies, supply lists, lists of current or past employees,
mailing lists and information concerning relationships between
Company and its employees or customers.
2.3 During Employee's employment, Employee will not copy,
reproduce or otherwise duplicate, record, abstract, summarize
or otherwise use, any papers, records, reports, studies,
computer printouts, equipment, tools or other property owned
by the Company, except as expressly permitted or required for
the proper performance of his or her duties on behalf of the
3. Post-Termination Restrictions.
Employee recognizes that (i) Company has spent substantial money, time and
effort over the years in and in developing its Confidential and Trade Secret
Information; (ii) Company pays its employees to, among other things, develop and
preserve business information, customer goodwill, customer loyalty and customer
contacts for and on behalf of Company; and (iii) Company is hereby agreeing to
employ and pay Employee based upon Employee's assurances and promises contained
herein not to put himself or herself in a position following Employee's
employment with Company in which the confidentiality of Company's information
might somehow be compromised. Accordingly, Employee agrees that during
Employee's employment with Company, and for a period of two years thereafter,
regardless of how Employee's termination occurs and regardless of whether it is
with or without cause, Employee will not, directly or indirectly (whether as
owner, partner, consultant, employee or otherwise):
3.1 engage in, assist or have an interest in, enter the employment
of, or act as an agent, advisor or consultant for, any person
or entity which is engaged, or will be engaged, in the
development, manufacture, supplying or sale of a product,
process, apparatus, service or development which is
competitive with a product, process, apparatus, service or
development on which Employee worked or with respect to which
Employee has or had access to Confidential or Trade Secret
Information while at Company ("Competitive Work"), and which
Employee seeks to serve in any market which was being served
Employee at the time of Employee's termination or was served
at any time during Employee's last six (6) months of
employment by Company. Competitive Work shall be limited to
the field of magnetic instrument guidance and related magnetic
navigation therapeutic devices or agents;
3.2 solicit, call on or in any manner cause or attempt to cause,
or provide any Competitive Work to any customer or active
prospective customer of the Company with whom Employee dealt,
or on whose account he or she worked for which Employee was
responsible, or with respect to which Employee was provided or
had access to Confidential and Trade Secret Information to
divert, terminate, limit, modify or fail to enter into any
existing or potential relationship with Company; and
3.3 induce or attempt to induce any other employee, consultant or
advisor of Company to accept employment or an affiliation with
any other person or entity.
4. Acknowledgment Regarding Restrictions.
Employee recognizes and agrees that the restraints contained in Section 3 are
reasonable and enforceable in view of Company's legitimate interests in
protecting its Confidential and Trade Secret Information and customer goodwill.
Employee understands that the post-employment restrictions contained herein will
preclude, for a time, Employee's employment with such major competitors of
Company in magnetic instrument guidance. Employee understands that the
restrictions of Section 3 are not limited geographically in view of Company's
nationwide operations and the Confidential and Trade Secret Information and
customers to which Employee had access.
5.1 Any and all ideas, inventions, discoveries, patents, patent
applications, continuation-in-part patent applications,
divisional patent applications, technology, copyrights,
derivative works, trademarks, service marks, improvements,
trade secrets and the like, which are developed, conceived,
created, discovered, learned, produced and/or otherwise
generated by Employee, whether individually or otherwise,
during the time that Employee is employed by Company, whether
or not during working hours, that relate to (i) current and
anticipated businesses and/or activities of Company, (ii)
Company's current and anticipated research or development, or
(iii) any work performed by Employee for Company, shall be the
sole and exclusive property of Company, and Company shall own
any and all right, title and interest to such. Employee
assigns and agrees to assign to Company any and all right,
title and interest in and to any such ideas, inventions,
discoveries, patents, patent applications,
continuation-in-part patent applications, divisional patent
applications, technology, copyrights, derivative works,
trademarks, service marks, improvements, trade secrets and the
like, whenever requested to do so by Company, at Company's
expense, and Employee agrees to execute any and all
applications, assignments or other instruments which Company
deems desirable or necessary to protect such interests.
5.2 Paragraph 5(*.1) shall not apply to any invention for which no
equipment, supplies, facilities or Confidential and Trade
Secret Information of Company was used and which was developed
entirely on Employee's own time, unless (i) the invention
relates to Company's business or to Company's actual or
demonstrably-anticipated research or development, or (ii) the
invention results from any work performed by Employee for
6. Company Property.
Employee acknowledges that any and all notes, records, sketches, computer
diskettes, training materials and other documents relating to the Company
obtained by or provided to Employee, or otherwise made,
produced or compiled during the course of Employee's employment with Company
regardless of the type of medium in which they are preserved, are the sole and
exclusive property of Company and shall be surrendered to Company upon
Employee's termination of employment and on demand at any time by Company.
7. Non-Waiver of Rights.
Company's failure to enforce at any time any of the provisions of this Agreement
or to require at any time performance by Employee of any of the provisions
hereof shall in no way be construed to be a waiver of such provisions or to
affect either the validity of this Agreement, or any part hereof, or the right
of Company thereafter to enforce each and every provision in accordance with the
terms of this Agreement.
8. Company's Right to Injunctive Relief.
In the event of a breach or threatened breach of any of Employee's duties and
obligations under the terms and provisions of Sections 2, 3 and 5 hereof,
Company shall be entitled, in addition to any other legal or equitable remedies
it may have in connection therewith (including any right to damages that may
suffer), to temporary, preliminary and permanent injunctive relief restraining
such breach or threatened breach. Employee hereby expressly acknowledges that
the harm which might result to Company's business as a result of any
noncompliance by Employee with any of the provisions of Sections 2, 3 or 5 would
be largely irreparable. Employee specifically agrees that if there is a question
as to the enforceability of any of the provisions of Sections 2, 3 or 5 hereof,
Employee will not engage in any conduct inconsistent with or contrary to such
Sections until after the question has been resolved by a final judgement of a
court of competent jurisdiction.
9. Invalidity of Provisions.
If any provision of this Agreement is adjudicated to be invalid or unenforceable
under applicable law in any jurisdiction, the validity or enforceability of the
remaining provisions thereof shall be unaffected as to such jurisdiction and
such adjudication shall not affect the validity or enforceability of such
provisions in any other jurisdiction. To the extent that any provision of this
Agreement is adjudicated to be invalid or unenforceable because it is overbroad,
that provision shall not be void, but rather shall be limited only to the extent
required by applicable law and enforced as to limited. The parties expressly
acknowledge and agree that this Section is reasonable in view of the parties'
10. Employee Representations.
Employee represents that the execution and delivery of the Agreement and
Employee's employment with Company do not violate any previous employment
agreement or other contractual obligation of Employee.
11. Company's Right to Recover Costs and Fees.
Employee agrees that if Employee breaches or threatens to breach this Agreement,
Employee shall be liable for any attorneys' fees and costs incurred by the
Company in enforcing its rights under this Agreement in the event that a court
determines that Employee has breached this Agreement or if the Company obtains
injunctive relief against the Employee and is successful on the merits of its
claim against employee.
12. Employment at Will.
Employee acknowledges that employee is, and at all times will be, an
employee-at-will of Company and nothing contained herein shall be construed to
alter or affect such employee-at-will status.
13. Exit Interview.
To ensure a clear understanding of this Agreement, Employee agrees, at the time
of termination of Employee's employment, to engage in an exit interview with
Company at a time and place designated by Company and at Company's expense.
Employee understands and agrees that during said exit interview, Employee may be
required to confirm that Employee will comply with Employee's obligations under
Sections 2, 3 and 5 of this Agreement. Company may elect, at its option, to
conduct the exit interview by telephone.
No modification, amendment or waiver of any of the provisions of this Agreement
shall be effective unless in writing specifically referring hereto, and signed
by the parties hereto. This Agreement supersedes all prior agreements and
understandings between Employee and Company to the extent that any such
agreements or understandings conflict with the terms of this Agreement.
This Agreement shall be freely assignable by Company to, and shall inure to the
benefit of, and be binding upon, Company, its successors and assigns and/or any
other entity which shall succeed to the business presently being conducted by
Company. Being a contract for personal services, neither this Agreement nor any
rights hereunder shall be assigned by Employee.
16. Choice of Forum and Governing Law.
In light of Company's substantial contacts with the State of Missouri, the
parties' interests in ensuring that disputes regarding the interpretation,
validity and enforceability of this Agreement are resolved on a uniform basis,
and Company's execution of, and the making of this Agreement in Missouri, the
parties agree that: (i) any litigation involving any noncompliance with or
breach of the Agreement, or regarding the interpretation, validity and/or
enforceability of the Agreement, shall be filed and conducted exclusively in the
state or federal courts in St. Louis County, Missouri; and (ii) the Agreement
shall be interpreted in accordance with and governed by the laws of the State of
Missouri, with regard for any conflict of law principles.
Section headings are provided in this Agreement for convenience only and shall
not be deemed to substantively alter the content of such sections.
PLEASE NOTE: BY SIGNING THIS AGREEMENT, EMPLOYEE IS HEREBY CERTIFYING THAT
EMPLOYEE (A) HAS RECEIVED A COPY OF THIS AGREEMENT FOR REVIEW AND STUDY BEFORE
EXECUTING IT; (B) HAS READ THIS AGREEMENT CAREFULLY BEFORE SIGNING IT; (C) HAS
HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING THE AGREEMENT TO ASK ANY QUESTIONS
EMPLOYEE HAS ABOUT THE AGREEMENT AND HAS RECEIVED SATISFACTORY ANSWERS TO ALL
SUCH QUESTIONS; AND (D) UNDERSTANDS EMPLOYEE'S RIGHTS AND OBLIGATIONS UNDER THE
IN WITNESS WHEREOF, the parties hereof have caused this Agreement to be executed
as of the day and year first above written.
James M. Stolze
Peggy S. Stohr, VP Administration/Controller