EXHIBIT 10.43
EMPLOYMENT AGREEMENT
Employment Agreement (the "Agreement"), dated March 30, 1998 by and between
Physicians Resource Group, Inc., a Delaware corporation (the "Company"), and
Xxxxxx Xxxxxxxxx ("Employee").
W I T N E S S E T H:
Section 1. EMPLOYMENT. The Company hereby agrees to employ Employee, and
Employee hereby accepts employment by the Company, upon the terms and subject to
the conditions hereinafter set forth.
Section 2. DUTIES. Employee shall serve as the Chief Financial Officer of
the Company. Employee agrees to devote her full time and best efforts to the
performance of her duties to the Company. Employee and the Company acknowledge
that the corporate finance office of the Company will be located in Houston,
Texas. In the event the Company moves the corporate finance office away from
Houston, Texas, Employee shall be entitled to terminate this Employment
Agreement in accordance with the provisions of Section 6(f) hereof. Employee
acknowledges that the corporate finance office is currently located in Dallas,
Texas and agrees to commute to Dallas for a reasonable period of time to
coordinate the transition of such office to Houston, Texas. The Company
acknowledges that the process of relocating the corporate finance function to
Houston will begin immediately.
Section 3. TERM. Except as otherwise provided in Section 6 hereof, the
term of this Agreement shall be for three years ("Initial Term"), commencing on
the date of this Agreement. This Agreement shall be automatically renewed
thereafter for successive one year terms ("Renewal Term") unless either party
gives to the other written notice of termination no fewer than thirty (30) days
prior to the expiration of any such term that it does not wish to extend this
Agreement.
Section 4. COMPENSATION AND BENEFITS. In consideration for the services
of the Employee hereunder, the Company will compensate Employee as follows:
(a) Base Salary. Commencing on the date hereof, Employee shall be
entitled to receive a base salary of $175,000 per annum or as increased
from time to time by the Board of Directors of the Company or the Option
and Compensation Committee of the Board of Directors ("Compensation
Committee") thereof.
(b) Bonus. During the Term of employment, Employee shall be eligible
to receive an annual cash bonus in an amount determined in accordance with
the employee incentive plan adopted by the Board of Directors of the
Company on January 24, 1998 (the "Employee Incentive Plan"). The Employee
Incentive Plan shall provide Employee with a target bonus opportunity of
fifty percent (50%) of Employee's salary range
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midpoint for each calendar year in the Term of employment if the Company
attains specified budgeted financial performance objectives for such year,
and an over achievement bonus opportunity of five percent (5%) of target
bonus for each one percent (1%) the Company exceeds such specified budgeted
financial performance objectives. The financial performance objectives
shall be determined by the Board of Directors on an annual basis each year
during the Term of employment. With respect to calendar year 1998, the
financial performance objectives of the Employee Incentive Plan are set
forth on Exhibit A, attached hereto and incorporated herein by reference.
All bonuses payable to Employee under the Employee Incentive Plan shall be
determined and paid within the first quarter of the year following the year
for which such bonus is payable.
(c) Benefits. During the term of this Agreement, Employee shall be
entitled to participate in and receive benefits under any and all employee
benefit plans and programs which are from time to time generally made
available to the executive employees of the Company, subject to approval
and grant by the appropriate committee of the Board of Directors of the
Company with respect to programs calling for such approvals or grants.
(d) Options. To induce Employee to enter into employment with the
Company and as a condition of Employee's acceptance of such employment,
effective upon the date of acceptance of employment, the Company shall
grant to Employee an option to purchase One Hundred Thousand (100,000)
shares of the Common Stock, par value $0.01 per share, of the Company (the
"Common Stock") at an exercise price of Three and Three Fourths Dollars
($3.75) per share (the "Option"). To evidence the Option, promptly after
the execution of this Agreement, the Company shall execute and deliver to
the Employee an option agreement, which shall contain terms and conditions
consistent with this Agreement and shall provide, among other things, for
the following:
(i) The Option shall be vested one-third immediately, one-third
on the first anniversary and one-third on the second anniversary, with an
ultimate expiration date of ten years from the date of grant.
(ii) The grant of the Option shall not be subject to any
approval by stockholders of the Company.
(iii) The shares of Common Stock of the Company issuable under
the Option shall be fully registered and freely tradeable and shall be of
the same class of voting common stock of the Company, with the same rights,
powers and privileges, as is currently publicly traded on the New York
Stock Exchange and registered with the United States Securities and
Exchange Commission. Without limiting the foregoing, such shares shall not
be subject to any restriction, on transfer, on exercise of any right, power
or privilege or otherwise, not applicable to all of such class of voting
common stock generally.
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(iv) In the event of a change in control or threatened change in
control of Employer, Employee's options granted pursuant to Section 4(d)
shall become immediately vested and exercisable. A "change in control"
will be deemed to have occurred for purposes hereof (i) upon the occurrence
of a change of stock ownership of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A
promulgated under the Exchange Act, and any successor Item of a similar
nature; or (ii) upon the acquisition of beneficial ownership, directly or
indirectly, by any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) of securities of the Company representing 33%
or more of the combined voting power of the Company's then outstanding
securities; or (iii) a change during any period of two consecutive years of
a majority of the members of the Board for any reason, unless the election,
or the nomination for election by the Company's stockholders, of each
director was approved by a vote of a majority of the directors then still
in office who were directors at the beginning of the period; provided that
a change in control will not be deemed to have occurred for purposes hereof
with respect to any person meeting the requirements of clauses (i) and (ii)
of Rule 13d-1(b)(1) promulgated under the Exchange Act.
Section 5. EXPENSES. It is acknowledged by the parties that Employee, in
connection with the services to be performed by her pursuant to the terms of
this Agreement, will be required to make payments for travel (including travel
and housing in Dallas during the transition period), entertainment of business
associates and similar expenses. The Company will reimburse Employee for all
reasonable expenses of types authorized by the Company and incurred by Employee
in the performance of her duties hereunder. Employee will comply with such
budget limitations and approval and reporting requirements with respect to
expenses as the Company may establish from time to time.
Section 6. TERMINATION. Employee's employment hereunder will commence on
the date of this Agreement and continue until the end of the Initial Term and
any renewals of such term, except that the employment of Employee hereunder will
terminate earlier upon the occurrence of the following events:
(a) Death or Disability. Employee's employment will terminate
immediately upon the death of Employee during the term of her employment
hereunder or, at the option of the Company, in the event of Employee's
disability, upon 30 days notice to Employee. Employee will be deemed
disabled if, as a result of Employee's incapacity due to physical or mental
illness, Employee shall have been absent from her duties with the Company
on a full-time basis for 120 consecutive business days. In the event of the
termination of this Agreement pursuant to this subsection, Employee will
not be entitled to any severance pay or other compensation except for any
portion of her base salary accrued but unpaid from the last monthly payment
date to the date of termination, accrued bonus, and expense reimbursements
under Section 5 hereof for expenses incurred
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in the performance of her duties hereunder prior to termination.
(b) For Cause. The Company may terminate the Employee's employment
for "Cause" upon five (5) days written notice by the Company to Employee.
For purposes of this Agreement, a termination will be for Cause if: (i)
Employee willfully and continuously fails to perform her duties with the
Company (other than any such failure resulting from incapacity due to
physical or mental illness), (ii) Employee willfully engages in gross
misconduct materially and demonstrably injurious to the Company or (iii)
Employee has been convicted of a felony. In the event of the termination
of this Agreement pursuant to this subsection, Employee will not be
entitled to any severance pay or other compensation except for any portion
of her base salary accrued but unpaid from the last monthly payment date to
the date of termination and expense reimbursements under Section 5 hereof
for expenses incurred in the performance of her duties hereunder prior to
termination.
(c) By Company Without Cause. The Company may terminate this
Agreement at any time for any reason without cause. In the event of the
termination of this Agreement pursuant to this subsection, the Company will
pay Employee, as Employee's sole remedy in connection with such
termination, severance pay in the amount determined by multiplying (i)
Employee's monthly base salary at the rate in effect immediately preceding
the termination of Employee's employment, by (ii) the greater of twelve
(12) months or the remaining number of months of employment in the Initial
Term payable in equal monthly payments in arrears. The Company will also
pay Employee the portion of her base salary accrued but unpaid from the
last monthly payment date to the date of termination, accrued bonus, and
expense reimbursements under Section 5 hereof for expenses incurred in the
performance of her duties hereunder prior to termination.
(d) By Employee for Good Reason. If the Company relocates the
corporate accounting office to a location other than Houston, Texas,
Employee may terminate this Agreement for good reason. In the event of
the termination of this Agreement pursuant to this subsection, the Company
will pay Employee severance pay in the amount determined by multiplying (i)
Employee's monthly base salary at the rate in effect immediately preceding
the termination of Employee's employment, by (ii) the greater of twelve
(12) months or the remaining number of months of employment in the Initial
Term payable in equal monthly payments in arrears. The Company will also
pay Employee the portion of her base salary accrued but unpaid from the
last monthly payment date to the date of termination, accrued bonus, and
expense reimbursements under Section 5 hereof for expenses incurred in the
performance of her duties hereunder prior to termination.
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Section 7. EFFECT OF TERMINATION ON OPTIONS. The Employee has been
granted options to purchase shares of the Company's Common Stock and may
continue to be granted such options from time to time. The effect of the
termination of the Employee's employment on such options shall be determined by
this Section.
(a) If the Employee voluntarily leaves the employment of the Company
in breach of this Agreement, her options will automatically expire.
(b) If Employee dies or becomes disabled, as defined in Section 6(a),
while employed by the Company, her options shall become fully vested and
exercisable on the date of her death or disability and shall expire twelve
(12) months thereafter unless by its terms any of such options expire
sooner.
(c) If the Employee's employment with the Company is terminated for
Cause, as defined in Section 6(b), her options will automatically expire.
(d) If the Employee's employment with the Company is terminated
without cause during the Initial Term, pursuant to Section 6(c) or by
Employee for Good Reason pursuant to Section 6(d), her options will remain
exercisable and will vest and expire in accordance with the terms of the
applicable option agreements.
(e) If the Employee's employment with the Company is terminated
without cause subsequent to the Initial Term, pursuant to Section 6(c), her
options shall be exercisable (to the extent exercisable on the date of
termination of employment) at any time within three months following the
date of termination of employment unless by its terms the option expires
earlier.
Section 8. CONFIDENTIAL INFORMATION. Employee recognizes and acknowledges
that certain assets of the Company and its affiliates, including without
limitation information regarding customers, pricing policies, methods of
operation, proprietary computer programs, sales, products, profits, costs,
markets, key personnel, formulae, product applications, technical processes, and
trade secrets (hereinafter called "Confidential Information") are valuable,
special and unique assets of the Company and its affiliates. Employee will not,
during or after her term of employment, disclose any of the Confidential
Information to any person, firm, corporation, association, or any other entity
for any reason or purpose whatsoever, directly or indirectly, except as may be
required pursuant to her employment hereunder, unless and until such
Confidential Information becomes publicly available other than as a consequence
of the breach by Employee of her confidentiality obligations hereunder. In the
event of the termination of her employment, whether voluntary or involuntary and
whether by the Company or Employee, Employee will deliver to the Company all
documents and data pertaining to the Confidential Information and will not take
with her any documents or data of any kind or any reproductions (in whole or in
part) of any items relating to the Confidential Information.
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Section 9. NONCOMPETITION. Until one (1) year after termination of
Employee's employment hereunder, Employee will not (i) engage directly or
indirectly, alone or as a shareholder, partner, officer, director, employee or
consultant of any other business organization, in any business activities which
relate to the acquisition and consolidation of medical practices which were
either conducted by the Company at the time of Employee's termination or
"Proposed to be Conducted" (as defined herein) by the Company at the time of
such termination (the "Designated Industry"), (ii) divert to any competitor of
the Company in the Designated Industry any customer of Employee, or (iii)
solicit or encourage any officer, employee, or consultant of the Company to
leave its employ for employment by or with any competitor of the Company in the
Designated Industry. The parties hereto acknowledge that Employee's
noncompetition obligations hereunder will not preclude Employee from (i) owning
less than 5% of the common stock of any publicly traded corporation conducting
business activities in the Designated Industry or (ii) serving as an officer,
director, stockholder or employee of an entity engaged in the healthcare
industry whose business operations are not competitive with those of the
Company. "Proposed to be Conducted", as used herein, shall include those
business activities which are the subject of a formal, written business plan
approved by the Board of Directors prior to termination of Employee's employment
and which the Company takes material action to implement within 12 months of the
termination of Employee's employment. Employee will continue to be bound by the
provisions of this Section 9 until their expiration and will not be entitled to
any compensation from the Company with respect thereto. If at any time the
provisions of this Section 9 are determined to be invalid or unenforceable, by
reason of being vague or unreasonable as to area, duration or scope of activity,
this Section 9 will be considered divisible and will become and be immediately
amended to only such area, duration and scope of activity as will be determined
to be reasonable and enforceable by the court or other body having jurisdiction
over the matter; and Employee agrees that this Section 9 as so amended will be
valid and binding as though any invalid or unenforceable provision had not been
included herein.
Section 10. GENERAL.
(a) Notices. Except as otherwise provided herein, all notices and
other communications hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if delivered
personally or if mailed by certified mail, return receipt requested or by
written telecommunication, to the relevant address set forth below, or to
such other address as the recipient of such notice or communication will
have specified to the other party hereto in accordance with this Section
10(a):
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If to the Company, to: with a copy to:
Physicians Resource Group, Inc. Physicians Resource Group, Inc.
Three Lincoln Centre, Suite 1540 Three Lincoln Centre, Suite 1540
5430 LBJ Freeway 0000 XXX Xxxxxxx
Xxxxxx, XX 00000 Xxxxxx, Xxxxx 00000
Attn: President Attn: General Counsel
Fax No.: (000) 000-0000 Fax No.: (000) 000-0000
If to Employee, to:
Xxxxxx Xxxxxxxxx
26 Xxxxxxxx
Xxxxx Xxxx, XX 00000
(b) Withholding; No Offset. All payments required to be made by the
Company under this Agreement to Employee will be subject to the withholding
of such amounts, if any, relating to federal, state and local taxes as may
be required by law. No payment under this Agreement will be subject to
offset or reduction attributable to any amount Employee may owe to the
Company or any other person.
(c) Equitable Remedies. Each of the parties hereto acknowledges and
agrees that upon any breach by Employee of her obligations under Section 9
hereof, the Company will have no adequate remedy at law, and accordingly
will be entitled to specific performance and other appropriate injunctive
and equitable relief.
(d) Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, such provision will be fully severable
and this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision never comprised a part hereof; and the
remaining provisions hereof will remain in full force and effect and will
not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as part of this
Agreement a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable.
(e) Waivers. No delay or omission by either party hereto in
exercising any right, power or privilege hereunder will impair such right,
power or privilege, nor will any single or partial exercise of any such
right, power or privilege preclude any further exercise thereof or the
exercise of any other right, power or privilege.
(f) Counterparts. This Agreement may be executed in multiple
counterparts, each of which will be deemed an original, and all of which
together will constitute one
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and the same instrument.
(g) Captions. The captions in this Agreement are for convenience of
reference only and will not limit or otherwise affect any of the terms or
provisions hereof.
(h) Reference to Agreement. Use of the words "herein," "hereof,"
"hereto" and the like in this Agreement refer to this Agreement only as a
whole and not to any particular subsection or provision of this Agreement,
unless otherwise noted.
(i) Binding Agreement. This Agreement will be binding upon and inure
to the benefit of the parties and will be enforceable by the personal
representatives and heirs of Employee and the successors of the Company.
If Employee dies while any amounts would still be payable to him hereunder,
such amounts will be paid to Employee's estate. This Agreement is not
otherwise assignable by Employee.
(j) Entire Agreement. This Agreement contains the entire
understanding of the parties, supersedes all prior agreements and
understandings relating to the subject matter hereof and may not be amended
except by a written instrument hereafter signed by each of the parties
hereto.
(k) Governing Law. This Agreement and the performance hereof will be
construed and governed in accordance with the laws of the State of Texas,
without regard to its choice of law principles.
EXECUTED as of the date and year first above written.
PHYSICIANS RESOURCE GROUP, INC.
By:
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Its:
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EMPLOYEE
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Xxxxxx Xxxxxxxxx
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