EMPLOYMENT AGREEMENT
Exhibit 10.23
THIS AGREEMENT is made as of the 5th day of December, 2007 between TLC Vision
Corporation, a New Brunswick corporation (“Corporation”), and Xxxxx Xxxxxxxxx, who resides at 0000
X. Xxxxxxxxxx, Xxxxxxx, Xxxxxxxx 00000 (“Employee”).
WHEREAS, Employee is currently employed by the Corporation in the capacity as Regional Vice
President; and
WHEREAS, the Corporation and the Employee wish to enter into this Agreement to set forth the
rights and obligations of each of them with respect to the Employee’s employment with the
Corporation in an expanded capacity.
THEREFORE, in consideration of the mutual covenants and undertakings contained in this
Agreement and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Corporation and the Employee agree as follows:
1. Definitions
1.1 In this Agreement:
1.1.1 “Affiliate” has the meaning set forth in Section 5001 of the Delaware Code as the
same may be amended from time to time, and any successor legislation thereto;
1.1.2 “Agreement” means this agreement and all schedules attached to this agreement, in each
case as they may be amended or supplemented from time to time, and the expressions “hereof,”
“herein,” “hereto,” “hereunder,” “hereby” and similar expressions refer to this agreement and
unless otherwise indicated, references to Section s are to Section s in this agreement;
1.1.3 “Salary” has the meaning attributed to such term in Section 5.1;
1.1.4 “Benefits” has the meaning attributed to such term in Section 5.3;
1.1.5 “Business Day” means any day, other than Saturday, Sunday or any holiday on which the
employees of the Corporation are not required to report for work;
1.1.6 “Change of Control” for the purposes of this Agreement shall be deemed to have occurred
when:
1.1.6.1 any Person acquires or becomes the beneficial owner of, or a combination of
Persons acting jointly and in concert acquires or becomes the beneficial owner of, directly
or indirectly, more than 40% of the voting securities of the Corporation, whether through the
acquisition of previously issued and outstanding voting securities, or of voting securities
that have not been previously issued, or any combination thereof, or any other transaction
having a similar effect; such percentage being determined on a undiluted basis without regard
to options and warrants then outstanding and unexercised;
1.1.6.2 the Corporation amalgamates with one or more corporations other than a
Subsidiary or Affiliate;
1.1.6.3 the Corporation sells, leases or otherwise disposes of all or substantially of
its assets, whether pursuant to one or more transactions;
1.1.6.4 any Person not part of existing management of the Corporation or any Person not
controlled by the Corporation or by any Affiliate enters into any arrangement to provide
management services to the Corporation that results in either (i) the termination by the
Corporation of the employment of any two of the Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer and General Counsel for any reason other than Just Cause; or
(ii) the termination by the Corporation for any reason other than Just Cause of the
employment of all such senior executive personnel for any reason other than Just Cause within
six months of the date that such arrangement is entered into;
1.1.6.5 the Corporation enters into any transaction or arrangement which would have the
same or similar effect as the transactions referred to in Sections 1.1.6.1, 1.1.6.2, 1.1.6.3
or 1.1.6.4 above.
1.1.7 “Confidential Information” means all confidential or proprietary information,
intellectual property (including but not limited to trade secrets, customer lists,
projections, business plans) and confidential facts relating to the business or affairs of
the Corporation or any of its Affiliates or Subsidiaries which is treated as confidential or
proprietary;
1.1.8 “Disability”
1.1.8.1 Employee shall be deemed permanently disabled if (i) Employee is unable to
provide the Corporation at least thirty (30) hours per week of continuous service of
the work time that would normally be given by him during a continuous six (6) month
period and if (ii) at the expiration of said six (6) month period insofar as can be
reasonably foreseen Employee will thereafter be unable to give at least thirty (30)
hours per week of normal effective working time.
1.1.8.2 Until the expiration of the six (6) month period of disability, Employee shall
be entitled to receive his regularly established salary, less any monthly disability
income insurance payments, whether offered by the Corporation or otherwise.
1.1.8.3 In the event the parties hereto are unable to agree on the existence of a
disability or the date on which the aforesaid six (6) month period of disability
began, the Corporation and Employee shall each designate a physician and the two
physicians so designated shall then select a third physician, which third physician
shall then determine whether a permanent disability exists within the meaning of this
Agreement and when the disability commenced if it does exist. The determination of
the said third physician shall bind the parties hereto. For convenience of
determining the rights of the parties under this provision, a permanent disability
shall be deemed to begin on the first day of the month which immediately follows the
date on which the disability actually occurred, or is judged by the aforesaid third
physician to have occurred. If the said third physician determines that Employee is
not capable of performing the services required of him hereunder, the Corporation
shall have the right to require Employee to submit to additional periodic examinations
(not to exceed one per month), at the Corporation’s expense, by that physician for so
long as Employee purports to be disabled.
1.1.8.4 The foregoing to the contrary notwithstanding, in the event the Corporation
terminates the employment of Employee due to the disability of Employee and if, after
such termination and prior to the normal termination date of this Agreement (or any
extension or renewal hereof) Employee is judged by the aforesaid third physician to be
able to return to his normal duties, then the Corporation shall hire Employee as a
consultant to the Corporation for the balance of the term of this Agreement (or any
extension or renewal hereof), at Employee’s salary as of the date of termination and
subject to all other terms and conditions of this Agreement.
1.1.9 “Employment Period” has the meaning attributed to such term in Section 4;
1.1.10 “Good Reason” means:
1.1.10.1 a reduction of more than ten percent (10%) by the Corporation in the
Employee’s Salary (set forth in Section 5.1);
1.1.10.2 the taking of any action by the Corporation that would materially and
adversely affect the Employee’s participation in, or materially reduce the Employee’s
Benefits and other similar plans in which the Employee is participating at the date
hereof (or such other plans as may be implemented after the date hereof that provide
the Employee with substantially similar benefits), or the taking of any action by the
Corporation that would deprive the Employee of any material fringe benefit enjoyed by
him at the date hereof unless such action by the Corporation affects all employees or
reduces or deprives all or a majority of the Corporation’s employees of benefits
previously enjoyed.
1.1.10.3 The taking of any action by the Corporation that would materially and
adversely affect Employee’s duties under this Agreement.
1.1.10.4 The Corporation relocates Employee’s principal office outside the Greater
Chicago, Illinois area.
1.1.10.5 In the event of a breach or a claimed breach of this Agreement by the
Corporation under this Section 1.1.10, Employee shall give notice to the Corporation
of any such claimed breach and the Corporation shall have thirty (30) days from the
date of receipt of such notice to cure any such claimed breach.
1.1.11 “Just Cause” shall mean that the Employee has been convicted of any crime involving
larceny, embezzlement, conversion or any other act involving the misappropriation of
Corporation funds in the course of his employment or that Employee materially fails to
perform or fulfill the duties and responsibilities as set forth in Section 2 or Section 3 of
this Agreement;
1.1.12 “Person” means any individual, partnership, limited partnership, joint venture,
syndicate, sole proprietorship, limited liability Corporation, Corporation or corporation
with or without share capital, unincorporated association, trust, trustee, executor,
administrator or other legal personal representative, regulatory body or agency, government
or governmental agency, authority or entity however designated or constituted;
1.1.13 “Subsidiaries” has the meaning attributed to such term by Section 5001 of the Delaware
Code as the same may be amended from time to time and any successor legislation thereto; and
1.1.14 “Year of Employment” means any twelve (12) month period commencing on Effective Date
(defined herein) or on any anniversary of such date.
2. Employment of the Employee
The Corporation shall employ the Employee, and the Employee shall serve the Corporation, in
the position of Vice President. In such position, the Employee shall perform and fulfill such
duties and responsibilities as the Corporation may designate from time to time. The Employee shall
report to the President, Refractive Centers of the Corporation or such other person or persons as
designated by the President, Refractive Centers from time to time. Employee shall be covered under
the Corporation’s policy or policies of Directors and Officers insurance. Employee shall perform
his duties hereunder in the Chicago, Illinois metropolitan area and at such other location or
locations as are mutually agreed between Employee and the Corporation.
3. Performance of Duties
During the Employee’s employment, the Employee shall faithfully, honestly and diligently serve
the Corporation and its Subsidiaries as contemplated above. The Employee shall devote all of his
working time and attention to his employment hereunder and shall use his best efforts to promote
the interests of the Corporation and not take any action contrary to the duties and
responsibilities as the Corporation may designate from time to time.
4. Employment Period
Subject to the terms and conditions hereinafter provided, the term of the Executive’s
employment pursuant to this Agreement shall commence on December 1st, 2007 (“Effective
Date”). Upon the Effective Date, the Executive’s employment shall continue unless and until sooner
terminated under this Agreement.
5. Remuneration
5.1 Salary. The Corporation shall pay the Employee a salary minus applicable
deductions and withholdings in respect of each Year of Employment of this Agreement calculated at
the rate of Two Hundred Thousand Dollars ($200,000.00) per annum (“Salary”), payable in equal
installments according to the Corporation’s regular payroll practices. Subsequent to the initial
year of employment under this Agreement, Employee’s salary may be increased, but shall not be
reduced from the base amount paid to Employee during the previous year.
5.2 Bonus. The Employee is eligible to receive a bonus equal to a maximum amount of
50% of Employee’s Salary, less applicable deductions and withholdings. The payment of any bonus
will be based on the Employee’s performance within a specific area of responsibility and/or the
Corporation achieving its financial objectives for the fiscal year. The amount of any such bonus
and whether any bonus is earned shall be determined by the Corporation in its sole discretion.
5.3 Benefits. The Corporation shall provide to the Employee, in addition to Salary
and stock options, the benefits (“Benefits”) described in the Corporation’s Employee Handbook,
such Benefits to be provided in accordance with and subject to the
terms and conditions of the Handbook as such is amended from time to time. Employee shall
also be covered under the Corporation’s liability insurance policy for directors and officers under
the same terms and conditions that apply to other directors and officers of the Corporation.
5.4 Pro-Rata Entitlement in the Event of Termination. If the Employee’s employment is
terminated pursuant to Section 8 or if the Employee dies during a Year of Employment, the Employee
shall be entitled to receive that portion of the Salary in respect of the Year of Employment
representing the number of days the Employee actually worked.
6. Expenses
Subject to the terms of the Corporation’s expense policy, as such may be revised from time to
time, the Corporation shall pay, or reimburse the Employee for, all authorized and appropriate
travel and out-of-pocket expenses reasonably incurred or paid by the Employee in the performance of
his duties and responsibilities, upon presentation of expense statements and receipts and such
other supporting documentation as the Corporation may reasonably require.
7. Vacation
The Employee shall be entitled during each Year of Employment to paid vacation equal to the
standard award offered to all, and such vacation shall accrue at the rate each month in accordance
with the Corporation’s policy. Vacation shall be taken by the Employee at such time(s) as may be
acceptable to the Corporation. Except with the prior written consent of the Chief Executive
Officer of the Corporation: (i) no more than two (2) weeks of vacation shall be taken
consecutively, and (ii) no more than five (5) days of the vacation entitlement earned in any Year
of Employment can be carried forward to a subsequent Year of Employment. Notwithstanding the
foregoing, in the event that the Employee’s employment is terminated pursuant to this Agreement,
the Employee shall not be entitled to receive any payment in lieu of any vacation to which Employee
was entitled and that had not already been taken by Employee.
8. Termination
8.1 Notice. The Employee’s employment may be terminated at any time:
8.1.1 by the Corporation without prior notice and without obligation to the Employee
if for reasons of Just Cause or Disability of Employee;
8.1.4 by the Corporation for any reason other than Just Cause or
Disability of Employee; or
8.1.5 by the Employee on one (1) month written notice to the
Corporation.
Notwithstanding the terms herein, the Employee’s employment shall be automatically
terminated, without further obligation to the Employee or his heirs, in the event of his
death.
8.2 Effective Date. The effective date on which the Employee’s employment shall be
terminated shall be:
8.2.1 in the case of termination under Section 8.1.1, the day the Employee is deemed,
under Section 17, to have received notice from the Corporation of such termination;
8.2.2 in the case of termination under Section 8.1.2, on the date of the event giving
rise to the termination;
8.2.3 in the case of termination under Section 8.1.3, on the date one (1) month after
notice to the Corporation, provided the Corporation utilizes Employee’s services
during this one (1) month after notice; and
8.2.4 in the event of the death of the Employee, on the date of his death.
| 9. | Rights of Employee on Termination and Payment |
Where the Employee’s employment under this Agreement has been terminated by the Corporation
under Section 8.1.2, the Employee shall be entitled, upon receipt by the Corporation of a waiver
and release in a form acceptable to the Corporation, to receive from the Corporation, in addition
to accrued but unpaid Salary, if any, a payment equal to twelve (12) months Salary, less any
amounts owing by the Employee to the Corporation for any reason and applicable deductions and
withholdings, payable in twelve (12)
equal monthly installments. Except as provided above in this Section 9, where the Employee’s
employment has been terminated by the Employee or by the Corporation for any reason, the Employee
shall not be entitled to receive any payment as severance pay, in lieu of notice, or as damages.
10. Change of Control
10.1. Termination of Employment for Good Reason. If at any time during this
Agreement and within twelve (12) months following a Change of Control, the Employee’s employment is
terminated by the Employee for Good Reason, the Employee shall be entitled, upon receipt by the
Corporation of a waiver and release in a form acceptable to the Corporation, to receive from the
Corporation, a payment equal to twelve (12) months Salary, less any amounts owning by the Employee
to the Corporation for any reason and applicable deductions and withholdings, payable in twelve
(12) equal monthly installments. For greater certainty, this Section 10.1 does not apply in the
event of the termination of the employment of the Employee as a result of death, Disability or
retirement of the Employee or by the Corporation for Just Cause, or by the Employee without Good
Reason.
10.2 Limitation on Payments Following a Change in Control. Notwithstanding any other
provision of this Agreement, if any payment to or for the benefit of the Employee under this
Agreement either alone or together with other payments to or for the benefit of the Employee would
constitute a “parachute payment” (as defined in Section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”), the payments under this Agreement shall be reduced to the largest amount
that will eliminate both the imposition of the excise tax imposed by Section 4999 of the Code and
the disallowance of deductions to the Company under Section 280G of the Code for any such payments.
The amount and method of any reduction in the payments under this Agreement pursuant to this
Section 10.2 shall be as reasonably determined by the Compensation Committee of the Board of
Directors of the Corporation.
11. No Obligation to Mitigate
The Employee shall not be required to mitigate the amount of any payment or Benefits provided
for in this Agreement by seeking other employment or otherwise, nor (except as specifically
provided herein), shall the amount of any payment provided for in this Agreement be reduced by any
compensation earned by the Employee as a result of employment by another employer after termination
or otherwise.
12. Non-Competition
The Employee shall not, either during his employment and for a one (1) year period following
the termination of Employee’s employment (“Restricted Period”), within the United States of America
or Canada, directly or indirectly, in any manner whatsoever including, without limitation, either
individually, or in partnership, jointly or in conjunction with any other Person, or as employee,
principal, agent, director or shareholder:
12.1 be engaged in any undertaking related to refractive laser vision corrective surgery;
12.2 have any financial or other interest (including an interest by way of royalty or other
compensation arrangements) in or in respect of the business of any Person that carries on a
business of refractive laser corrective surgery; or
12.3 advise, lend money to, guarantee the debts or obligations of or permit the use of the
Employee’s name or any parts thereof by any Person engaged in the refractive laser corrective
surgery business during the Employee’s employment or at the end thereof, as the case may be.
Notwithstanding the foregoing, nothing herein shall prevent the Employee from owning not more
than five percent (5%) of the issued shares of a corporation, the shares of which are listed on a
recognized stock exchange or traded in the over the counter market in Canada or the United States,
that carries on a business that is the same as or substantially similar to or that competes with or
would compete with the business of the Corporation or any of its Affiliates or Subsidiaries.
The Employee acknowledges that given the nature of the business of the Corporation and its
Affiliates and Subsidiaries, the covenants set forth in this Section 12 contain reasonable
limitations as to time, geographic area and scope of activity to be restrained, and do not impose a
greater restraint than is necessary to protect and preserve for the benefit of the goodwill of the
Corporation and its Affiliates and Subsidiaries and to protect the legitimate business interests of
the Corporation and its Affiliates and Subsidiaries. If, however, this Section 12 is determined
by any court of competent jurisdiction to be unenforceable by reason of its extending for too long
a period of time or over too large a geographic area or by reason of its being too extensive in any
other respect or for any other reason it will be interpreted to extend only over the longest period
of time for which it may be enforceable and/or over the largest
geographic area as to which it may be enforceable and/or to the maximum extent in all other
aspects as to which it may be enforceable, all as determined by such court and in such action.
13. No Solicitation of Patients
The Employee shall not, either during his employment or the Restricted Period, directly or
indirectly, contact or solicit any customers or patients of the Corporation or any of its
Affiliates or Subsidiaries for the purpose of selling to those patients any products or services
that are the same as or substantially similar to, or in any way competitive with, refractive laser
corrective. For the purpose of this Section , a designated patient means a Person who was a
patient of the Corporation or of any of its Subsidiaries during some part of Employee’s employment.
14. No Solicitation of Employees
The Employee shall not, either during his employment or the Restricted Period, directly or
indirectly, employ or retain as an independent contractor any employee of the Corporation or any of
its Affiliates or Subsidiaries or induce or solicit, or attempt to induce, any such person to leave
his/her employment.
15. Confidentiality
The Employee shall not, either during his employment or at any time thereafter, directly or
indirectly, use or disclose to any Person any Confidential Information; provided, however, that
nothing in this Section shall preclude the Employee from disclosing or using Confidential
Information if:
15.1 the Confidential Information is available to the public or in the public domain at the
time of such disclosure or use, without breach of this Agreement; or
15.2 disclosure of the Confidential Information is required by law or legal process or is
directly necessary in connection with any legal action or proceeding initiated against
Employee. In such event, Employee shall notify the Corporation in writing of the disclosure
to be made and afford the Corporation the reasonable opportunity to seek a protective order
or take other reasonable steps to maintain the confidentiality of any such material.
The Employee acknowledges and agrees that the obligations under this Section are to remain in
effect in perpetuity and shall exist and continue in full force and effect notwithstanding any
breach or repudiation, or alleged breach or repudiation, by the Corporation of this Agreement.
16. Remedies
The Employee acknowledges that a breach or threatened breach by the Employee of the provisions
of any of Section s 12 to 15 inclusive will result in the Corporation and its shareholders
suffering irreparable harm which is not capable of being calculated and which cannot be fully or
adequately compensated by the recovery of damages alone. Accordingly, the Employee agrees that the
Corporation and any successor corporation shall be entitled to temporary and permanent injunctive
relief, specific performance and other equitable remedies, in addition to any other relief to which
the Corporation or any successor corporation may become entitled.
17. Notices
Any notice or other communication required or permitted to be given hereunder shall be in
writing and shall be given via certified or registered mail return receipt requested, by facsimile
with confirmation of receipt or via national and reputable overnight delivery service, except that
any notice of termination by the either party shall be given by certified mail return receipt
requested. Any such notice shall be deemed to have been received on the day of delivery. Notice
of change of address shall also be governed by this Section . Notices and other communications
shall be addressed as follows:
c) if to the Employee:
Xxxxx Xxxxxxxxx
0000 X. Xxxxxxxxxx
Xxxxxxx, XX 00000
0000 X. Xxxxxxxxxx
Xxxxxxx, XX 00000
d) if to the Corporation:
TLC Vision Corporation
00000 Xxxxxxxx Xxxxx Xxxx, #000
Xx. Xxxxx, XX 00000
Attention: General Counsel
Telecopier number: (000) 000-0000
00000 Xxxxxxxx Xxxxx Xxxx, #000
Xx. Xxxxx, XX 00000
Attention: General Counsel
Telecopier number: (000) 000-0000
18. Headings
The inclusion of headings in this Agreement is for convenience of reference only and shall not
affect the construction or interpretation hereof.
19. Invalidity of Provisions
Each of the provisions contained in this Agreement is distinct and severable and a declaration
of invalidity or unenforceability of any such provision by a court of competent jurisdiction shall
not affect the validity or enforceability of any other provision hereof.
20. Entire Agreement
This Agreement constitutes the entire agreement among the parties and any Affiliates or
Subsidiaries of the Corporation pertaining to the subject matter of this Agreement. This Agreement
supersedes and replaces all prior agreements, if any, written or oral, with respect to the
Employee’s employment by the Corporation and any rights that the Employee may have by reason of any
such prior agreement or by reason of the Employee’s prior employment, if any, by the Corporation or
by reason of the Employee’s prior services to the Corporation or its Affiliates or Subsidiaries.
There are no warranties, representations or agreements among the parties and the Corporation’s
Affiliates and Subsidiaries in connection with the subject matter of this Agreement except as
specifically set forth or referred to in this Agreement.
21. Waiver, Amendment
Except as expressly provided in this Agreement, no amendment or waiver of this Agreement shall
be binding unless executed in writing by the party to be bound thereby. No waiver of any provision
of this Agreement shall constitute a waiver of any other provision nor shall any waiver of any
provision of this Agreement constitute a continuing waiver unless otherwise expressly provided.
22. Currency
Except as expressly provided in this Agreement, all amounts in this Agreement are stated and
shall be paid in U.S. currency.
23. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of
Missouri, without regard to its conflict of laws rules, which are deemed inapplicable herein. The
parties hereto each consent to the personal jurisdiction of the federal and state courts of the
State of Missouri.
24. Counterparts
This Agreement may be signed in counterparts, and each of such counterparts shall constitute
an original document, and such counterparts, taken together, shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
| EMPLOYEE |
||||
| /s/ Xxxxx Xxxxxxxxx | ||||
| Xxxxx Xxxxxxxxx | ||||
| TLC VISION CORPORATION |
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| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Xxxxx X. Xxxxxxxx, | ||||
| Chief Executive Officer | ||||
