Exhibit 10.25
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into effective
January 31, 2001, (the "Effective Date") between SURGI+GROUP, INC., a Texas
corporation (the "Company"), and XXXXX X. XXXXXXX, of 0000 Xxxxxx Xxxxx,
Xxxxxxx, Xxxxx 00000 ("Employee"). All capitalized terms not defined herein
shall have the meanings ascribed to such terms in the "Merger Agreement" (as
defined below). This Agreement is one of several contemplated by the Merger
Agreement and related agreements (the "Merger Documentation"). The Company by
this Agreement employs Employee and Employee accepts employment on the terms and
conditions that follow:
1. POSITION; DUTIES; PRINCIPAL OFFICE. Employee will be employed with
the titles, positions, and responsibilities (the "Duties") of President of the
Company, a wholly owned subsidiary of Dynacq International, Inc., a Nevada
corporation ("DYI") and he shall serve as one of three (3) Directors serving on
the Board of Directors of the Company (f/k/a DII New Corp., a Texas corporation)
into which the former Texas corporation known as Surgi+Group, Inc. (the
"Target") merged (the "Merger) on or about February 7, 2001 (the "Effective
Time") and in connection therewith DII New Corp. as the surviving corporation
amended its Articles of Incorporation pursuant to the Articles of Merger to
change its name to Surgi+Group, Inc. as described in the Agreement and Plan of
Merger (the "Merger Agreement") by and among the foregoing parties and the
shareholders of Target. This Employment Agreement shall be null and void
together with the Incentive Stock Option Agreement (the "ISO Agreement")
referred to below if the Merger does not become effective.
Employee shall perform his Duties to the best of his ability and with
diligence and competence. His Duties shall include such executive duties on
behalf of the Company and its subsidiaries or affiliates (the "Company Group")
as may from time to time be assigned to him by the Board of Directors of the
Company, its CEO or a senior officer of the Board of Directors of DYI. Employee
shall devote his full time, attention, loyalty and energies to the business of
the Company, and shall not, during the term of this Agreement, be engaged in any
other business activity whether or not such business activity is pursued for
gain, profit or other pecuniary advantages; but this shall not be construed as
preventing Employee from investing his assets in stocks, bonds, commodities or
other securities or forms of passive investments, provided that such investments
do not detract from his devotion of time or attention to the Company and will
not require any services on the part of Employee in the operation of the affairs
of the companies or entities in which such investments are made. Notwithstanding
the foregoing, it is acknowledged that Employee is involved pursuant to an
existing agreement with Vital Weight Control, Inc. d/b/a NeWeigh, to provide
limited marketing services which will not detract from his Duties and full-time
employment responsibilities and commitment hereunder. Employee further agrees
that during the term of this Agreement, he will act exclusively for the Company
Group performing services in the field of healthcare services and, in
particular, the development and expansion of the Company's ambulatory surgical
center ("ASC") business. Employee shall not solicit business opportunities for
any other persons or entities or for personal gain (except for passive
investments of the type referred to above). Employee shall follow the Company's
rules and regulations applicable to its employees and those of its affiliates
including DYI. Employee may devote reasonable time to participating in
professional, educational, philanthropic, public interest and social and
charitable activities provided that such activities do not materially interfere
with the regular performance of his Duties and responsibilities hereunder.
Employee shall have day-to-day supervision and control over the
development of the Company's ASC business and shall form a strategic business
plan and goals for the direction of such business group and shall have such
powers, duties, authority and responsibility usually incident to the positions
and office of a senior executive officer of a subsidiary of a public corporation
in charge of the strategic growth and development of its core business division.
Employee shall supervise and have general day-to-day control over the Company,
as DYI's ASC development subsidiary, and shall work closely with DYI's Vice
President - Operations and Strategic Planning and report to DYI directly through
such officer.
Employee shall perform his Duties at 00000 Xxxxxxxxxx Xxxx, Xxxxx 000,
located in Xxxxxxx, Xxxxx 00000-0000 and at DYI's offices if and when requested.
Employee shall be required to travel as frequently as necessary to develop the
Company's ASC business nationwide. Employee may continue to office out of his
current location referenced above with the costs of such location to be paid by
Employee out of the expense allowance referred to in Section 4 below.
2. SALARY. Employee will be paid an annual salary (the "Base Salary")
of $120,000, payable in accordance with the normal payroll practices of the
Company.
3. TERM. The term of employment under this Agreement shall be a period
of three (3) years commencing on the Effective Date of this Agreement, and
ending on the third anniversary of such date, unless earlier terminated as
provided in this Agreement.
4. EXPENSES. Employee will be reimbursed for all reasonable expenses
incurred in the performance of Employee's Duties including, but not limited to
travel and entertainment expenses, hotel and/or lodging expenses while traveling
or on temporary assignment of Company business. Employee will receive an expense
grant of $3,300 per month, out of which Employee shall pay the office expenses
for his separate office referred to above. Any undocumented or documented
expenses not in accordance with the Company's standard expense policies shall be
accounted for as required by the Company's policies and applicable legal
requirements.
5. EMPLOYEE BENEFITS AND VACATION. Employee will be entitled to
participate in the Company's health plan and in any other benefit plans provided
by DYI or the Company to its employees, subject to Employee's qualification to
participate on the same basis as other employees (length of service, health
status, etc.). In addition, Employee shall be entitled to a minimum three (3)
weeks of paid vacation per year, and additional time if needed and agreed to by
the CEO of the Company.
6. EXECUTIVE BENEFITS. Employee will be provided an automobile
allowance of $750.00 per month to purchase and/or lease an automobile of recent
make that befits his professional and business status with the Company and shall
be eligible to participate in the Company's executive bonus plans or programs
which may be adopted from time-to-time by the Company or DYI on the same or a
similar basis with other executive officers of his level and productivity,
subject to a final determination by the Compensation Committee of the Board of
Directors of DYI in its sole discretion in view of Employee's existing benefits,
bonus participation, salary, stock options and other remuneration, all of which
shall be considered.
7. INCENTIVE STOCK OPTION GRANT. Employee is hereby granted an
incentive stock option grant the ("Option") pursuant to the ISO Agreement
referred to below with respect to options under the Dynacq International, Inc.
Year-2000 Stock Incentive Plan (the "Stock Plan"), a copy of which has been
provided to Employee to purchase 100,000 shares of the Company's common stock,
$.001 par value (the "Common Stock") at an exercise price equal to the Fair
Market Value as defined in Section 2.22 of the Stock Plan ($8.875 per share)
which represents the closing sales price per share on the date the Company and
Employee agreed to the material Employment Agreement terms and material Option
terms, including the number thereof, the expiration date for vesting and
exercise, the exercise price, and other terms and conditions on December 6,
2000. The right to purchase Common Stock issuable pursuant to the Option (the
"Option Shares") will vest over a three-year period with: (i) 30% vesting after
the first full year of employment; (ii) 30% vesting after the second full year
of employment; and (iii) 40% vesting after the third full year of employment.
Except as specifically provided for to the contrary in the event of termination
without cause in years two and three of the vesting period as set forth in the
ISO Agreement, vesting shall be contingent upon the achievement of the "Final
Performance Goals of the Company and/or DYI as defined and set forth in the ISO
Agreement entered into between DYI and Employee effective December 6, 2000, when
they agreed to the material Option terms (the "ISO Agreement"), which is
attached hereto as EXHIBIT A and incorporated herein by reference.
Notwithstanding anything in this Agreement to the contrary with respect to the
grant of the Option, the terms thereof, the rights and obligations of Employee
with respect thereto or any ambiguity, conflict, interpretive question or matter
not specifically addressed and answered herein which may arise out of this
Employment Agreement, the ISO Agreement or the Stock Plan (the "ISO Issues") the
terms of the Stock Plan shall first control, secondly the terms of the ISO
Agreement shall control subject to the terms of the Stock Plan and lastly the
terms of this Employment Agreement shall control. If ISO Issues remain after
reviewing the foregoing agreements the Employee and Company agree that the
Compensation Committee of DYI (the "Compensation Committee" or the "Committee")
shall be entitled to resolve any ISO Issues as provided for in Section 3 of the
Stock Plan and elsewhere therein. In addition, the Company shall cause its
Compensation Committee to provide Employee with evidence of its separate and
formal approval acting in its official capacity as the Compensation Committee of
the ISO Agreement and this Agreement, although its members have previously
approved the ISO Agreement, the Employment Agreement and all other Merger
Documentation (with the exception of Schedule
1 to the ISO Agreement which has not been completed, but which shall be
completed as to the Final Performance Goals on or before March 9, 2001.
If Employee and DYI are not able to agree within the thirty (30) day
period ending March 9, 2001, as to the Final Performance Goals to be utilized in
connection with the performance vesting requirements of the Option, each of Xxxx
Xxxx, Xxxxxx Xxxx and Employee shall submit a written position paper outlining
their material concerns and proposals including what has been agreed to and the
Compensation Committee shall conclusively determine the Final Performance Goals
to include in SCHEDULE 1 to the ISO Agreement in their sole discretion, which
goals may include, but are not limited to:
a. Net Profit or Profit Growth.
b. Revenue Growth.
c. EPS or EPS Growth.
d. Return on Equity or Assets.
e. The number of ASC's acquired and the number of start-up de novo ASC
developments undertaken.
f. Overall compensatory arrangements within the industry including
performance goal benefits available under benefit plans for
similarly situated public companies.
The Final Performance Goals may be subject to yearly change as approved by the
Compensation Committee and Employee. The Compensation Committee shall be
authorized in advance to have prepared a peer review compensation survey by a
reputable executive benefits consulting firm comparing the benefits and
remuneration provided by other public companies of similar size and success to
those provided by the Company or DYI for executive officers and directors.
8. TERMINATION OF EMPLOYMENT - WITHOUT CAUSE. If Employee is
terminated without cause, all of Employee's Options outstanding under the ISO
Agreement (but only to the extent specifically provided for therein) and/or the
Stock Plan (if not previously forfeited and/or vested and subject to the terms
of the ISO Agreement) on the date of such termination shall immediately vest and
become immediately and fully exercisable for a period of three (3) months from
the date of termination, and Employee will receive six months severance pay
(based on Employee's base salary during the year of termination) within 30 days
of such termination in addition to the consideration payable pursuant to Section
15 below for Employee's Covenant Not to Compete (the "Non-Compete Covenant"), if
such covenant is not waived by the Company in its sole and absolute discretion.
9. CHANGE OF CONTROL - In the event of a "change in control", as
defined in the Stock Plan ("Change in Control"), all of Employee's outstanding
incentive stock options will immediately vest and become immediately and fully
exercisable, as provided herein or in accordance with the terms of any other
applicable stock option or other agreement or in the Stock Plan, whichever shall
provide the greatest benefit to Employee as Employee may elect, and if Employee
is terminated within six (6) months following the Change-in-Control, (and the
Company shall have used its best efforts to require the corporation or person
acquiring control to assume the terms of this Agreement) other than for cause,
death or disability, Employee will receive six (6) months severance pay in
addition to the consideration provided for in Section 15 below for the
Non-Compete Covenant, if the covenant is not waived by the Company or its legal
successor in interest or assigns in its sole and absolute discretion.
10. EMPLOYMENT AGREEMENT. At such time as the Company Group enters into
employment and/or incentive agreements with its key employees, Employee shall
have the opportunity to negotiate for substantially equivalent terms with the
Company Group and the Company Group shall negotiate in good faith with Employee
to achieve a result in the best interests of the Company and its shareholders;
provided, however, the terms of this Employment Agreement and any stock
incentive or performance related agreement shall not be changed unless Employee
and the Company (through the Compensation Committee of DYI) enter into a new
written agreement, duly executed by both parties, in form and substance
satisfactory to each in their sole and absolute discretion.
11. DIRECTORS AND OFFICERS INSURANCE. As an executive officer, Employee
will be provided with evidence of adequate director and officer insurance
coverage when and if obtained by the Company and/or DYI upon terms and at a cost
acceptable to the Company and/or DYI in its or their sole discretion. If not
obtained by August 7, 2001, the Company and DYI, on one hand and Employee on the
other, shall negotiate an Indemnification Agreement providing Employee with the
maximum indemnification provided by Texas and/or Nevada law and such other
permissible benefits, including the advancement of expenses to Employee to cover
reasonable legal fees and costs, to the maximum extent permitted by the
applicable laws of such states.
12. PROPRIETARY INFORMATION.
(a) In connection with the performance of the Duties, the Employee
acknowledges that he may acquire Proprietary Information (as
defined below) from the Company and/or its affiliates
(collectively the "Company Group"). The use of the word Company
in this Agreement when referring to the rights and obligations
of the Company or Employee hereunder shall include the Company
Group as appropriate or applicable in the context used.
Accordingly, the Employee agrees that all Proprietary
Information acquired by him hereunder shall be safeguarded with
the same degree of control and care as a reasonably prudent
person would exercise with respect to his or her own similar
information, and that the same shall be returned to the owner
of such Proprietary Information upon the owner's request.
(b) The Employee agrees (i) to treat in strict confidence any
proprietary or other confidential information received from the
Company Group (whether tangible or intangible), including,
without limitation, client lists, lists of referral sources,
business prospects, pricing and cost information, operating
results of individual healthcare facilities, employees' names,
compensation and other information, regulatory and legal
issues, accounting and reporting matters, trade secrets,
patents, copyrights, concepts, inventions, processes, formulas,
know-how, data and information, whether such information is of
a technical or a business nature, and all copies of any of the
foregoing whether or not in writing or in any electronic or
computer storage medium ("Proprietary Information"), (ii) that
he will not disclose any Proprietary Information to third
parties, except as specifically permitted herein, and (iii)
that he will not use any Proprietary Information for any
purpose not contemplated by this Agreement without the written
permission of the Company, including any use for personal gain
or benefit whether directly or indirectly.
(c) Information that is to be excluded from the term "Proprietary
Information" is any information that:
(i) has been published or is otherwise in the public domain
at the time of the disclosure;
(ii) becomes public through no fault of Employee or of the
party receiving such information;
(iii) was already in the possession of Employee prior to
employment or the party receiving such information is
rightfully in possession thereof without knowledge of, or
a breach of, any applicable confidentiality requirements
or other restrictions;
(iv) is obtained from a third party who is lawfully in
possession of said information and is not subject to a
contractual or fiduciary relationship to the party
receiving or providing such information or any other
person; or
(v) is disclosed pursuant to a mandatory requirement of a
governmental agency or by operation of law.
(d) The provisions of this Section 12 shall apply for so long as
Employee provides services to the Company Group in any
capacity, whether or not pursuant to this Agreement, and shall
survive the termination of this Agreement for so long as the
information remains Proprietary Information.
13. INTELLECTUAL PROPERTY RIGHTS. Except for Proprietary Information
owned by the Employee which is designated in writing to the Company prior to the
execution hereof in EXHIBIT B hereto, the Employee agrees that all ideas,
business contacts, proposals, valuation processes, ASC economic models, profiles
or operating processes or architectural design, insights, knowledge, writings,
drawings, inventions, designs, parts, machines or processes developed as a
result of, or in the course of, the Duties rendered to the Company Group or by
the Employee during the term of this Agreement, whether or not patentable or
subject to copyright, shall be the property of the Company Group. Subject to the
foregoing exception, the Employee herewith assigns all rights in the foregoing
intellectual property to the Company Group and shall supply all assistance, both
while an Employee of the Company and after leaving the Company for any reason,
reasonably requested in securing for the benefit of the Company Group any
patent, copyright, trademark, service xxxx, license, right or other evidence of
ownership of any such intellectual property, and shall provide full information
regarding any such item and execute all appropriate documentation prepared by
the Company Group in applying or otherwise registering, in the name of the
appropriate entity comprising part of the Company Group, all rights, to any such
item. The Employee shall prominently xxxx all written information with an
appropriate legend that the material contained therein is the property of the
Company and that the information is confidential and proprietary and not to be
reproduced or used by other parties. The Company Group shall have the right to
sell, or grant licenses to use, any of such intellectual property to others,
including, without limitation, any such intellectual property derived from any
business practices journal prepared in connection with the Duties provided. If
the Employee's assistance is required after the departure of the Employee from
the Company, the Company will reimburse Employee for any out-of-pocket expenses
incurred in the performance of the needed assistance.
14. TERMINATION OF EMPLOYMENT.
(a) FOR CAUSE. Nothing herein shall prevent the Company from
terminating the Employee, without prior notice, for "Cause" (as
hereinafter defined), in which event the Employee shall be entitled
to receive his Base Salary on a pro rata basis to the date of
termination. In the event of such termination for Cause, all other
rights and benefits the Employee may have under any employee
benefit, bonus and stock option plans and programs of the Company
shall be determined in accordance with the terms and conditions of
Section 15 of this Agreement and any loans, advances or
undocumented expenses (not previously included by the Company in a
W-2 or Form 1099) shall be immediately due and payable. The term
"Cause" shall mean (i) the Employee has committed a willful serious
act, such as fraud, embezzlement or theft, against the Company
Group, intending to enrich himself at the expense of the Company
Group, (ii) the Employee has been convicted of a felony (or entered
a plea of nolo contendere to a felony charge), (iii) the Employee
has engaged in conduct that has caused material injury, monetary or
otherwise, to the Company Group, including the violation of any
material law or regulation applicable to the Company Group, (iv)
the Employee, in carrying out his Duties hereunder, has been guilty
of gross neglect or gross misconduct, or any act or omission
involving intentional misconduct or a knowing violation of law, (v)
the Employee has refused to carry out his Duties as they now exist
or as changed from time-to-time or to follow the reasonable written
direction of the Board of Directors of the Company or DYI or any
senior officer of the foregoing and, after receiving written notice
to such effect from the Compensation Committee of DYI, and the
Employee fails to cure the existing problem within fifteen (15)
days, with notice not being required if it is determined the
problem is not curable, (vi) the Employee has materially breached
this Agreement and has not remedied such breach within fifteen (15)
days after receipt of written notice from the Compensation
Committee of DYI that a breach of this Agreement has occurred
(written notice being required only if the breach can be remedied
or cured), or (vii) the Employee has breached (as determined by the
written legal advice or opinion of independent outside counsel
appointed by the Compensation Committee) any legal duties to the
Company or the Company Group as provided by the laws of any
applicable state of incorporation, whether Texas or any other state
(if reincorporated by merger or otherwise, to another state),
including, primarily, those applicable to officers and directors
including, but not limited to, breach of the duty of loyalty,
receiving improper benefits, not
disclosing material conflicts of interest or an act or omission for
which the liability of an officer or director is expressly provided
for by statute.
(b) DEATH. If the Employee dies, this Agreement shall terminate on the
date of death. In the event of such termination due to death, all
other rights and benefits the Employee (or his estate) may have
under any employee benefit, bonus and/or stock option plans and
programs of the Company or the Company Group, generally, shall be
determined in accordance with the terms and conditions of such
plans and programs.
(c) DISABILITY. In the event the Employee suffers a "disability" (as
hereinafter defined), this Agreement shall terminate on the date on
which the Disability occurs and the Employee shall be entitled to
his Base Salary for six (6) months offset by any Disability pay
under the Company's Disability insurance program which shall apply
first in any such determination of salary payable. In the event of
such termination due to Disability, all other rights and benefits
the Employee may have under the employee benefit, bonus and/or
stock option plans and programs of the Company shall be determined
in accordance with the terms and conditions of such plans and
programs. For purpose of this Agreement, "Disability" shall mean
the inability or incapacity (by reason of a medically determinable
physical or mental impairment) of the Employee to perform the
duties and responsibilities related to the job or position with the
Company described in Section 1 for a period that can be reasonably
expected to last more than ninety (90) days. Such inability or
incapacity shall be documented to the reasonable satisfaction of
the Company by appropriate correspondence from registered
physicians reasonably satisfactory to the Company. Nothing in this
Section 14 or in this Agreement shall be deemed to require or
permit the Company to take an illegal or wrongful act under the
Americans With Disabilities Act or any other applicable law or
regulation.
(d) CESSATION OF OPERATIONS. In the event the Board of Directors
determines that the Company should cease operations, whether
through dissolution and liquidation or otherwise, this Agreement
shall terminate thirty (30) days following the date of such
determination or at such earlier time as the parties may agree. In
such event: (i) Employee shall be entitled to receive his Base
Salary for six (6) months after termination of his employment
hereunder, as liquidated damages under this Agreement, (ii) the
Company shall be deemed to have performed all of its obligations
under this Agreement, and (iii) all rights and benefits the
Employee may have under any employee benefit, bonus and/or stock
option plans of the Company shall be determined in accordance with
the terms and conditions of such plans and programs.
(e) VOLUNTARY TERMINATION. The Employee may voluntarily terminate his
employment under this Agreement at any time by providing at least
ninety (90) days' prior written notice to the Company, provided,
however, the notice requirement and the remaining employment period
may be waived or reduced, respectively, by the Company in writing.
In such event, the Employee shall be entitled to receive his Base
Salary until the date his employment terminates, and all other
benefits the Employee may have under the employee benefit, bonus
and/or stock option plans and programs of the Company shall be
determined in accordance with the terms and conditions of such
plans and programs. Voluntary Termination shall not include
"Resignation For Good Reason" defined as follows:
(i) the assignment to the Employee of any lesser duties
inconsistent with the Employee's executive position (including
status, offices, titles or reporting relationships), authority,
duties or responsibilities as contemplated by Section 1 hereof,
that results in a long-term material diminution in such
position, authority, duties or responsibilities, but excluding
for these purposes (i) any isolated and insubstantial action
not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Employee,
(ii) the hiring of additional senior officers whose rank may
exceed Employee's or changes in, or the assignment of
additional Duties which are required as part of the Company's
business needs but do not result in a substantial and material
diminution of Employee's position and responsibilities as a
senior officer, or (iii) any lesser Duties, position or rank or
office associated with a determination by the Compensation
Committee that Employee is not satisfactorily complying with
or carrying out the Duties assigned.
(ii) any material failure by the Company to honor its material
obligations under this Agreement but only after Employee
provides the Company thirty (30) days written notice and an
opportunity to cure such failure within such period;
(iii) any failure by the Company to obtain an assumption of this
Agreement by a successor corporation as required under
Subsection 14(f) hereof;
(iv) any purported termination by the Company of the Employee's
employment otherwise than as expressly permitted by this
Agreement; or
(v) a material reduction in salary, bonus, benefits or overall
remuneration unrelated to the performance of Employee's
Duties or as a result of the Company's financial condition,
in which case the compensatory and benefit reductions shall
be on a basis not materially inconsistent with those of other
executive officers.
(f) TERMINATION IN THE EVENT OF A CHANGE OF CONTROL. In the event of a
Change of Control (as defined in DYI's Stock Plan) in which
subsection (d) above does not apply, either Company or Employee may
terminate this Agreement upon written notice at any time after such
Change of Control occurs (but in any event not later than six (6)
months after the Change of Control). In the event of the
termination of this Agreement by either party under this
subsection, (i) all of Employee's outstanding incentive stock
options or other awards granted under the Stock Plan will
immediately vest and become immediately and fully exercisable and
any restrictions or requirements with respect to any prior grants
of Restricted Stock or Performance Shares as defined in the Stock
Plan will be deemed waived or met, and (ii) the Company or its
successor shall be obligated (Y) to pay Employee the consideration
provided in Section 9 above and in Section 15 below (unless the
Non-Compete Covenant is waived or not enforced by the Company or
its successors or assigns), and (Z) to continue the Employee under
the Company's health plan and to pay the premiums therefor to the
extent such plan remains in effect and Employee remains eligible to
participate in same, in lieu of any other rights, claims or
benefits created or receivable under this Agreement.
15. COVENANT NOT TO COMPETE. It was a mandatory and material condition
imposed by the Company and DYI for Employee to enter into this Agreement in
connection with the Merger Agreement, the Success Fee Agreement and the other
Merger Documentation by the Company and DYI in exchange for the Non-Compete
Covenant not to compete contained herein, and in consideration of those
agreements and the consideration provided for thereunder and herein. Employee
agrees with the Company that during the period of his employment and for a
period of two (2) years following his termination of employment for any reason,
whether by resignation (with or without good reason), termination by the Company
for cause or without cause, or any other reason whatsoever, Employee will not
compete, whether directly or indirectly as an owner, partner, shareholder,
member, sole proprietor, consultant, manager, officer, director or in any other
capacity except as a passive investor without managerial responsibilities, with
the Company Group in the ownership or operation of ASC's or hospitals in (i)
Houston, Texas, Xxxxxx County, Texas, and in all contiguous counties, and (ii)
in such other counties (including all contiguous counties) where the Company
Group or its affiliates own and/or operate, whether directly or indirectly, any
ASC or hospital in the State of Texas or any other of the forty-nine (49) states
of the United States of America. In the event Employee voluntarily terminates
his employment, he shall not be entitled to severance pay or any additional
payments of consideration for this covenant not to compete. In the event
Employee's employment is terminated without cause, he shall be entitled to the
consideration provided for in Section 8 and he shall be additionally entitled to
his full Base Salary in effect as of the date of termination, payable in monthly
installments commencing in month seven (7) following his termination of
employment through the final month of this covenant not to compete. If
Employee's employment is terminated for cause, Employee shall not be entitled to
any severance benefits, and Employee's outstanding Options under the Stock Plan
or any other benefits provided for thereunder including but not limited to
restricted stock, stock appreciation rights, performance shares or cash bonus
programs which are not then vested, exercised and paid in full will terminate
and Employee shall receive no additional consideration for Employee's covenant
not to compete. The Company or its legal successors or
permitted assigns may waive its rights under this Section 15 and in that event
Employee shall not be entitled to the consideration for the covenant not to
compete specified in this Section 15 and may compete with the Company or Company
Group in any area or in any legal manner; provided, however, the provisions and
restrictions relating to the use or disclosure of Proprietary Information shall
continue to apply.
16. NOTICES. Any notices required or permitted hereunder shall be
sufficient if in writing and sent by certified mail, return receipt requested
with postage prepaid to the other party at the appropriate address set forth
below, or to such other address as may be designated by written notice similarly
given by either party to the other. All notices shall also be effective if in
writing, when received, with confirmation thereof, by mail as provided above,
fax, personal delivery, courier service or electronic transmission if proof of
delivery is obtained, and if sent via e-mail, proof of sending and the opening
of the e-mail is required, followed by written notification in any manner
provided above.
(i) If to the Company:
Dynacq International, Inc.
0000 X Xxxxx
Xxxxxxxx, Xxxxx 00000
Attn: Chairman and CEO
cc: Xxxxxx Xxxx, CFO
cc: Xxxx Xxxxxx, General Counsel
(ii) If to the Employee:
Xxxxx X. Xxxxxxx
0000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
17. GOVERNING LAW, JURISDICTION, VENUE, AND ATTORNEYS' FEES. THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF. IN THE EVENT OF ANY CONFLICT RELATING
TO OR ARISING OUT OF THIS AGREEMENT, IN WHOLE OR IN PART, THE PARTIES AGREE TO
THE EXCLUSIVE JURISDICTION OF THE STATE OR FEDERAL DISTRICT COURTS IN HOUSTON,
XXXXXX COUNTY, TEXAS AND AGREE TO EXCLUSIVE VENUE IN SUCH COURTS. IN THE EVENT
OF LEGAL PROCEEDINGS HEREUNDER, THE PARTY SUBSTANTIALLY PREVAILING ON THE MERITS
SHALL BE ENTITLED TO AN AWARD OF ATTORNEYS' FEES AND COSTS. ANY PARTY MAY
REQUEST AND OBTAIN A NON-BINDING MEDIATION HEARING AFTER FILING A LAWSUIT
HEREUNDER IN HOUSTON, TEXAS, WITH COSTS TO BE SHARED EQUALLY, AND THE MEDIATOR
SHALL BE APPOINTED BY THE COURT IF THE PARTIES CANNOT AGREE TO A MEDIATOR.
18. ENTIRE AGREEMENTS AND AMENDMENTS. This Agreement together with the
Merger Agreement and Merger Documentation contains the entire agreement of the
Employee and the Company relating to the matters contained herein (except with
respect to the Options as defined in the Stock Plan, whether referred to herein
or hereafter arising, the terms of the Stock Plan and/or any agreement relating
to any grant of benefits thereunder shall control) and supersedes all prior
agreements and understandings, oral or written, between the Employee and the
Company with respect to the subject matter hereof; this Agreement may not be
amended or modified except by an agreement in writing signed by the party
against whom enforcement of any waiver or modification is sought. In the event
of any conflict, ambiguity, inconsistency, or outright differences between the
parties' rights under the Merger Documentation, the agreement that addresses the
matter with the greatest specificity shall control.
19. HEADINGS. The headings of Sections and subsections hereof are
included solely for convenience of reference and shall not control the meaning
or interpretation of any of the provisions of this Agreement.
20. SEPARABILITY. If any provisions of this Agreement are rendered or
declared illegal, invalid, or unenforceable by reason of any existing or
subsequently enacted legislation or by the final judgment of any court of
competent jurisdiction, the Employee and the Company shall promptly meet and
negotiate substitute provisions for those rendered or declared illegal or
unenforceable to preserve the original intent of this Agreement to the extent
legally possible, but all other provisions of this Agreement shall remain in
full force and effect.
21. ASSIGNMENTS. The Company may assign this Agreement to any person or
entity succeeding to all or substantially all the business interests of the
Company by merger or otherwise. The rights and obligations of the Employee under
this Agreement are personal to him, and no such rights, benefits or obligations
shall be subject to voluntary or involuntary alienation, assignment or transfer,
except to a successor in interest to substantially all of the assets or business
interests or ownership of the Company or the Company Group, whether directly or
indirectly, as provided above.
22. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by facsimile, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
23. SURVIVAL OF CERTAIN TERMS. The terms contained in Sections 12, 13,
14 and 15 shall survive the termination of this Agreement for any reason,
whether terminated by Company or Employee.
24. CONSTRUCTION OF AGREEMENT. The parties hereto acknowledge,
stipulate and agree that this Agreement was jointly prepared, negotiated and
drafted by the parties and their respective counsel, and agree that the
presumption of a favorable interpretation for the non-drafting party in the
event of ambiguity or any other matter of interpretation shall not apply.
25. BREACH OF EMPLOYEE'S COVENANTS. If Employee breaches or threatens
to breach Sections 12, 13 or 15 hereof, Employee specifically acknowledges that
such breach or breaches shall be conclusively presumed to cause irreparable harm
to the Company and the Company Group entitling it to all equitable relief
available at law or in equity including but not limited to a temporary
restraining order, a temporary injunction and a permanent injunction and
Employee stipulates and acknowledges that monetary recovery shall not be
sufficient alone to compensate the Company in such events and waives proof
thereof and the necessity for the Company to post a bond, except for the minimum
amount permitted by law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date stated in the initial paragraph above.
EMPLOYEE:
___________________________
Xxxxx X. Xxxxxxx
EMPLOYER:
SURGI+GROUP, INC.
By: ________________________
Xxxxxx Xxxx, CEO
EXHIBIT A
INCENTIVE STOCK OPTION AGREEMENT
EXHIBIT B
EMPLOYEE'S INTELLECTUAL PROPERTY
RIGHTS OR PROPRIETARY INFORMATION
PRIOR TO EMPLOYMENT
NONE.
