SEVERANCE AGREEMENT
This Severance Agreement ("Agreement") is entered into as of August 20,
1996, between United Medicorp, Inc., a Delaware corporation (together with any
successor, the "Company"), and Xxxx X. Xxxxxx (the "Executive").
RECITALS:
WHEREAS, the Executive is a key management employee of the Company, being
employed by the Company as its VICE PRESIDENT M.I.S.;
WHEREAS, the Board of Directors of the Company is considering various
alternatives for the Company, some of which may result in a Change in Control
(as defined below) of the Company;
WHEREAS, in connection with Executive's continued employment at will with
the Company, the Company and the Executive wish to provide Executive with
certain severance assurances, upon the terms herein provided;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the parties hereto agree as follows:
1. DEFINITIONS. The following terms used in this Agreement with their
initial letters capitalized shall have the meanings ascribed to them below:
(a) BASE SALARY. "Base Salary" shall mean the base salary paid, as
of the date hereof, to the Executive by the Company in equal weekly
installments, which Base Salary is $63,000 annually.
(b) CAUSE. "Cause," with respect to the termination of the
Executive's employment with the Company, shall mean, in addition to any
definition of cause under Texas law:
(i) the willful failure by the Executive to perform the duties
of the Executive's position or the habitual neglect by the Executive
of the performance of such duties after demand for performance is
delivered by the Company specifically identifying the manner in which
the Company believes the Executive has not performed or has neglected
such duties; or
(ii) the willful misconduct by the Executive (including, but not
limited to, the Executive's misappropriating or misusing Company
funds, accepting bribes or kickbacks, acting as a principal, employee
or in any other capacity whatsoever for an enterprise in competition
with the Company, engaging in other conduct
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disloyal to the Company, refusing to comply with any lawful express
directive or instruction of the Company's Board of Directors, refusing
to comply with any reasonable and material written policies, standards
and regulations of Company, or being convicted of any crime of moral
turpitude).
For purposes of subparagraph (ii), no act, or failure to act, on the
Executive's part shall be considered "willful" unless done, or omitted to
be done, by the Executive not in good faith and without reasonable belief
that the Executive's action or omission was not opposed to the best
interests of the Company.
(c) CHANCE IN CONTROL. "Change in Control" shall mean the occurrence
of any of the following events which occur subsequent to the date hereof:
(1) there shall be consummated (a) any consolidation, merger or other
transaction in which the holders of the Company's Common Stock immediately
prior to such transaction have ownership of less than fifty percent (50%)
of the common stock of the surviving corporation (calculated on a fully
diluted basis) immediately after such transaction, (b) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of 90% or more of the assets of the Company, or (c) a series
of partial liquidations of the Company that is dejure or defacto part of a
plan of complete liquidation of the Company, (2) the stockholders of the
Company approve any plan or proposal for the liquidation or dissolution of
the Company (whether or not in connection with the sale of the Company's
assets), (3) any change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended, or any successor provision (the "Exchange Act"), whether or not
the Company is then subject to such reporting requirement, (4) during any
period of one year, individuals who at the beginning of such period
constituted the entire Board of Directors cease, for any reason, to
constitute a majority of the directors unless the election of each new
director by the Company's stockholders was approved by a majority vote of
the directors who were also directors at the beginning of the one year
period, (5) any consolidation or merger of the Company with or into another
corporation (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding
shares of Common Stock), or (6) any recapitalization of the Company or any
reclassification of the Common Stock into another form of capital stock of
the Company.
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(d) GOOD REASON. "Good Reason," with respect to the Executive's
termination of his or her employment with the Company following a Change in
Control, shall mean
(i) a substantial change in the nature or scope of the
Executive's authorities, powers, functions, duties or responsibilities
at the Company;
(ii) a relocation or transfer by the Company of the Executive or
the Company's principal executive offices to a location more than
twenty five miles from the Company's current principal executive
offices in Dallas, Texas, unless the Company promptly pays all
reasonable moving expenses incurred by the Executive relating to a
change of his principal residence in connection with any such
relocation or transfer;
provided, however, that none of the circumstances described in
subparagraphs (i) and (ii) above shall constitute Good Reason if it occurs
at the Executive's written request or with the Executive's prior written
consent.
(e) TRIGGERING EVENT. "Triggering Event" shall mean a Change in
Control of the Company has occurred or is the subject of a binding
agreement and either (x) the Executive has not been offered continued
employment with the Company following the Change in Control, or (y) the
employment of the Executive with the Company or its successor entity has
been terminated by the Company without Cause within 730 days following the
Change in Control, or (z) the Executive has terminated employment with the
Company for Good Reason within 730 days following the Change in Control.
2. COMPENSATION AND OTHER RIGHTS UPON TRIGGERING EVENT. The Executive
shall be entitled to the following compensation and other rights from the
Company upon the occurrence of a Triggering Event during the Term (as defined
in SECTION 3(b)), in full discharge of the Company's obligations:
(a) COMPENSATION. The Executive shall be entitled to receive from
the Company salary a lump sum payment of an amount equal to his or her Base
Salary for a period of two months for each full or partial year of the
Executive's service to the Company and its corporate predecessors, up to a
maximum of six months' Base Salary. As of the date hereof, the Executive
has 2.9 years of service to the Company and its corporate predecessors.
(b) MITIGATION. The Executive shall not be required to mitigate the
amount of any payment provided for in this SECTION 2 by seeking other
employment or otherwise, nor shall the amount of any payment provided for
in this SECTION 2 be
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reduced by any compensation earned by the Executive as the result of
employment by another employer after the Date of Termination or otherwise.
3. OTHER PROVISIONS RELATING TO TERMINATION COMPENSATION.
(a) TERMINATION OTHER THAN PURSUANT TO A TRIGGERING EVENT. If during
the Term (i) Company shall terminate the Executive's employment other than
as a Triggering Event or (ii) the Executive shall voluntarily terminate his
or her employment with Company other than as a Triggering Event, the
Company promptly shall pay the Executive his or her base salary through the
Date of Termination (hereinafter defined) at the rate in effect at the time
Notice of Termination is given and the Company shall have no further
obligations to the Executive.
(b) TERM OF AGREEMENT. This Agreement shall be in effect from and
after the date hereof through and including the third annual anniversary of
the date hereof (the "Term").
(c) NOTICE OF TERMINATION. Any termination of the Executive's
employment by the Company or by the Executive shall be communicated by
written Notice of Termination to the other party hereto. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice that shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment.
(d) DATE OF TERMINATION. For purposes of this Agreement, "Date of
Termination" shall mean (i) if the Executive's employment is terminated by
the Company or by the Executive, then the date specified in the Notice of
Termination (not later than 14 days following the date such Notice of
Termination is given); and (ii) if the Executive's employment is terminated
for any other reason, the date upon which the Executive's termination of
employment is effective under applicable law.
(e) INTEREST. Until paid, all past due amounts required to be paid by
the Company under any provision of this Agreement shall bear interest at an
annual interest rate of 10%, compounded quarterly, not to exceed the
highest nonusurious rate permitted by applicable federal, state or local
law.
4. CERTAIN PAYMENTS. If the Executive should die after a termination of
his employment during the Term, any amounts that would be due and payable to him
hereunder if he had continued to live shall be paid in accordance with the terms
of this Agreement to the Executive's estate.
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5. SUCCESSORS; BINDING AGREEMENT. This Agreement shall be binding upon,
and inure to the benefit of, the Company, the Executive and their respective
successors, assigns, personal and legal representatives, executors,
administrators, heirs, distributees, devisees and legatees, as applicable.
6. NOTICES. For purposes of this Agreement, subject to SECTION 3(b),
notices and all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when (i) delivered
personally; (ii) sent by telefacsimile or similar electronic device and
confirmed; (iii) delivered by courier or overnight express; or (iv) three days
after sent by registered or certified mail, postage prepaid, addressed as
follows:
If to the Executive:
Xxxx X. Xxxxxx
Rt.1 Box 137 XX
Xxxxx City, TX 75189
If to the Company:
United Medicorp, Inc.
00000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: President
with a copy to:
Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx & Xxxxxxx, P.C.
3400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
7. MISCELLANEOUS. No provision of this Agreement may be modified,
waived, or discharged unless such waiver, modification, or discharge is agreed
to in writing signed by the Executive and the Company. No waiver by either
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. The captions set forth in this Agreement are for ease of
reference only, and shall not be relevant to the interpretation of the subject
matter hereof. No agreements or representations, oral or otherwise, express or
implied, with
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respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. EXECUTIVE ACKNOWLEDGES THAT
CURRENTLY EXECUTIVE IS NOT PARTY TO A CONTRACT OF EMPLOYMENT WITH THE
COMPANY. THIS AGREEMENT SHALL NOT BE CONSTRUED AS A CONTRACT OF EMPLOYMENT.
THE EXECUTIVE SHALL HAVE NO RIGHT TO EMPLOYMENT OR ANY RIGHTS APPURTENANT
THERETO BY VIRTUE OF THIS AGREEMENT; PROVIDED, HOWEVER, THAT THIS AGREEMENT
SHALL NOT ENHANCE OR DIMINISH ANY VESTED RIGHT EXECUTIVE MAY HAVE UNDER ANY
COMPANY EMPLOYEE BENEFIT PLAN.
8. GOVERNING LAW. This Agreement is being made and executed in, and is
intended to be performed, in the State of Texas, and shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the State of Texas.
9. ATTORNEY FEES. All legal fees and costs incurred by the Executive in
connection with the resolution of any dispute or controversy under or in
connection with this Agreement shall be reimbursed by the Company promptly upon
the final determination of such dispute or controversy, unless the dispute or
controversy is finally determined in favor of the Company.
10. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
11. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original, but all of which together will
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
UNITED MEDICORP, INC.
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, President
EXECUTIVE:
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
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