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EXHIBIT 10.15
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of the 10th day of
December 1996, between INFOMED HOLDINGS, INC. (the "Company") and XXXX
X. XXXXXX (the "Executive").
INTRODUCTION
The Company and the Executive desire to enter into an employment
agreement embodying the terms and conditions of Executive's employment.
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS.
(a) "Affiliate" means any person, firm, corporation, partnership,
association or entity that, directly or indirectly or through one or more
intermediaries, controls, is controlled by or is under partial or complete
common control with the Company.
(b) "Applicable Period" means the period of the Executive's
employment hereunder and for 1 year after termination of his employment with
the Company, provided, that such one (1) year period shall not apply if within
six (6) months before or two (2) years after a Change in Control, the Executive
terminates his employment with the Company for Good Reason or the Company
terminates his employment without Cause.
(c) "Area" means the states of Texas and California and all states
of the United States east of the Mississippi River. The Area may be adjusted
from time-to-time but only pursuant to a written agreement between the
Executive and the Company.
(d) "Board" means the Board of Directors of the Company.
(e) "Business of the Company" means any business that: (i)
involves the marketing, sale or performance of administrative, management,
consulting or information management or resource services to the home
healthcare industry.
(f) "Cause" means the occurrence of all conditions specified in
Section 4(f) of this Agreement.
(g) "Change in Control" means the consummation of (i) a merger,
consolidation, share exchange, combination, reorganization, or like transaction
involving the Company in which the shareholders of the Company immediately
prior to such transaction do not own at least fifty percent (50%) of the value
or voting power of the issued and outstanding capital stock of the Company or
its successor immediately after such transaction, (ii) the sale or transfer
(other than as security for the Company's obligations) of more than fifty
percent (50%) of the assets of the
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Company in any transaction, a series of related transactions, or a series of
transactions occurring within a one (1) year period, in which the Company, any
corporation controlled by the Company, or the shareholders of the Company
immediately prior to the transaction do not own at least fifty percent (50%) of
the value or voting power of the issued and outstanding equity securities of
the acquiror immediately after the transaction (iii) except as a result of a
Public Offering, the sale or transfer of fifty percent (50%) or more of the
value or voting power of the issued and outstanding capital stock of the
Company by the holders thereof in a single transaction, a series of related
transactions, or a series of transactions occurring within a one (1) year
period, in which the Company, any corporation controlled by the Company, or the
shareholders of the Company immediately prior to such transaction do not own at
least fifty percent (50%) of the value or voting power of the issued and
outstanding equity securities of the acquiror immediately after the
transaction, (iv) the dissolution or liquidation of the Company, (v) the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of voting securities of the
Company where such acquisition causes such person to own 25% or more of the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of this
subsection (v), the following shall not be deemed to result in a Change in
Control: (A) any acquisition directly from the Company, (B) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, (C) any acquisition by
merger, consolidation, share exchange, combination, reorganization, sale, or
transfer or like transaction not described in Paragraph (i) or (iii) above and
in which no Person (other than an employee benefit plan or related trust
sponsored or maintained by the Company, any corporation controlled by the
Company, or company resulting from such business combination) becomes the
beneficial owner of 25% or more of the combined voting power of the then
outstanding voting securities of such company as a result of the transaction,
or (D) the acquisition of beneficial ownership of voting securities of the
Company by the Executive or a Person who beneficially owns 25% of the voting
power of the outstanding voting securities of the Company as of the date
hereof; and provided, further, that if any Person's beneficial ownership of the
Outstanding Company Voting Securities reaches or exceeds 25% as a result of a
transaction described in clause (A) above, and such Person subsequently
acquires beneficial ownership of additional voting securities of the Company
other than as a result of a transaction in clause (A) above, such subsequent
acquisition shall be treated as an acquisition that causes such Person to own
25% or more of the Outstanding Company Voting Securities; or (vi) individuals
who as of the date hereof, constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company's shareholders, was
approved by a vote of at least two-thirds of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
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actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board. Notwithstanding the foregoing, the consummation of
the transactions contemplated by the Amended and Restated Agreement and Plan of
Merger by and among InfoMed Holdings, Inc., Xxxxxxx Central Holding, Inc. and
InfoSub, Inc. dated as of September 5, 1996 shall not result in a Change in
Control for purposes of this Agreement.
(h) "Company Invention" means any Invention which is conceived by
the Executive alone or in a joint effort with others during the period of the
Executive's employment hereunder or during the Executive's employment with the
Company or an Affiliate prior or subsequent to the term of this Agreement which
(i) may be reasonably expected to be used in a product of the Company or an
Affiliate, or a product similar to a Company or Affiliate product, (ii) results
from work that the Executive has been assigned as part of his duties as an
employee of the Company, (iii) is in an area of technology which is the same or
substantially related to the areas of technology with which the Executive is
involved in the performance of his duties as an employee of the Company, or
(iv) is useful, or which the Executive reasonably expects may be useful, in any
manufacturing or product design process of the Company.
(i) "Competing Business" means any person, firm, corporation,
joint venture or other business entity which is engaged in the Business of the
Company (or any aspect thereof) within the Area.
(j) "Confidential Information" means data and information relating
to the business of the Company or an Affiliate (which does not rise to the
status of a Trade Secret) which is or has been disclosed to the Executive or of
which the Executive became aware as a consequence of or through its
relationship to the Company and which has value to the Company and is not
generally known to its competitors. Confidential Information shall not include
any data or information that has been voluntarily disclosed to the public by
the Company (except where such public disclosure has been made by the Executive
without authorization) or that has been independently developed and disclosed
by others, or that otherwise enters the public domain through lawful means.
The provisions in this Agreement restricting the use of Confidential
Information shall survive for a period of two (2) years following termination
of this Agreement.
(k) "Disability" means a disability of the Executive within the
meaning of Section 72(m)(7) of the Internal Revenue Code; that is, the
Executive is unable to engage in any substantial gainful activity with the
Company or any other employer, by reason of any medically determinable physical
or mental impairment which can be expected to result in death or to be of long
continued and indefinite duration. If the Executive claims to have a
Disability, he shall submit to the Company a written request for Disability
within the meaning of this definition. The Company may then elect to have the
Executive submit to an examination by a licensed physician selected by the
Company. The determination as to whether the Executive is subject to a
Disability shall be made at the sole reasonable discretion of the Company based
on medical evidence submitted by either or both of the physicians.
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(l) "Good Reason" means the occurrence of any of the following
events: (i) the Executive's job title described in Section 2 hereof is
modified without the Executive's written consent, (ii) the Executive is
required to report to anyone other than the Board without the Executive's
written consent, or (iii) the Company changes the location where the Executive
is based to more than seventy-five (75) miles from his present job location
without the Executive's written consent.
(m) "Invention" means any discovery, whether or not patentable,
including, but not limited to, any useful process, method, formula, technique,
machine, manufacture, composition of matter, algorithm or computer program, as
well as improvements thereto, which is new or which the Executive has a
reasonable basis to believe may be new.
(n) "Public Offering" means the offering or sale by the Company of
equity securities pursuant to a registration statement filed in accordance with
the Securities Act of 1933, as amended, or any comparable law then in effect,
and the effective date of any such Public Offering shall be the first day on
which the securities covered thereby may lawfully be offered and sold pursuant
to such registration statement.
(o) "Termination Date" means the date which corresponds to the
first to occur of (i) the death or Disability of the Executive, (ii) the last
day of the Term as provided in Section 4(a) below or (iii) the date set forth
in a notice given pursuant to Section 4(b) below.
(p) "Trade Secrets" means information including, but not limited
to, technical or nontechnical data, formulas, patterns, compilations, programs,
devices, methods, techniques, drawings, processes, financial data, financial
plans, product plans or lists of actual or potential customers or suppliers
which (i) derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons
who can obtain economic value from its disclosure or use, and (ii) is the
subject of efforts that are reasonable under the circumstances to maintain its
secrecy. The provisions in this Agreement restricting the use of Trade Secrets
shall survive termination of this Agreement for so long as is permitted by the
Georgia Trade Secrets Act of 1990, O.C.G.A Section Section 10-1-760-10-1-767.
(q) "Work" means a copyrightable work of authorship, including
without limitation, any technical descriptions for products, user's guides,
illustrations, advertising materials, computer programs (including the contents
of read only memories) and any contribution to such materials.
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2. TERMS AND CONDITIONS OF EMPLOYMENT.
(a) Employment. The Company hereby employs the Executive as its
Chief Executive Officer, and the Executive accepts such employment with the
Company subject to the terms and conditions hereof. The Executive also agrees
to act as the Chairman of the Board, if duly elected. The Executive shall have
such duties and responsibilities as are assigned by the Board (but to be
commensurate with Executive's position(s)) and shall have the general
supervision, direction and control of the business of the Company, subject to
overall control of the Board. The Executive shall be required to report only
to the Board.
(b) Throughout the Executive's employment hereunder, the Executive
shall devote sufficient time, energy and skill to faithfully and industriously
perform his duties hereunder, and shall diligently follow and implement all
management policies and decisions of the Company.
3. COMPENSATION.
(a) Base Salary. In consideration for the Executive's services
hereunder, the Company shall pay to the Executive an annual base salary in the
amount of $329,000 for the first full twelve calendar months of the Term.
Executive's annual base salary may be reviewed annually by the Company, and the
Company may increase the Executive's annual base salary in its discretion. The
Company shall pay annual base salary in accordance with the normal payroll
payment practices of the Company and subject to such deductions and
withholdings as law or policies of the Company, from time to time in effect,
require.
(b) Bonus. The Executive shall be entitled to an annual bonus of
$70,000 for each calendar year, starting with the calendar year ending December
31, 1997, if the Company's earnings before interest, taxes, depreciation and
amortization ("EBITDA") for such year as determined in accordance with
generally accepted accounting principles by the Company's Chief Financial
Officer equals or exceeds 80% of the target EBITDA established by the Board for
such year. Such bonus will be payable, if so earned, as soon as feasible after
the receipt by the Company of certified financial statements from its certified
public accountants for such year. The Executive may be entitled to any other
bonuses determined by the Board in accordance with an operating budget or other
specific bonus criteria, if any, adopted by the Board for purposes of executive
bonus calculations.
(c) Car Allowance. The Company shall pay the Executive a monthly
car allowance of $2,000.
(d) Memberships. The Company shall reimburse the Executive for
memberships in business, social or recreational clubs in an aggregate amount
not to exceed $4,000 for each twelve months of the Term.
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(e) Insurance. The Company shall reimburse the Executive for
premiums on life and/or disability insurance policies owned by him in an
aggregate amount not to exceed $18,000 for each twelve months of the Term.
(f) Vacation. The Executive shall be entitled to such vacation
and time off with pay as generally may be available to executive employees of
the Company from time to time.
(g) Benefits. In addition to the annual base salary, bonus, and
other benefits payable to the Executive as set forth in this Agreement, the
Executive shall be entitled to such benefits as generally may be made available
to executive employees of the Company from time to time; provided, however,
that nothing contained herein shall require the establishment or continuation
of any particular plan or program.
(h) Expenses. The Executive shall be entitled to be reimbursed in
accordance with the policies of the Company, as adopted and amended from time
to time, for all reasonable and necessary expenses incurred by the Executive in
connection with the performance of the Executive's duties of employment
hereunder; provided, however, the Executive shall, as a condition of such
reimbursement, submit verification of the nature and amount of such expenses in
accordance with the reimbursement policies from time to time adopted by the
Company.
4. TERM, TERMINATION AND TERMINATION PAYMENTS.
(a) Term. The term of this Agreement (the "Term") shall commence
as of the date of this Agreement first set forth above (the "Commencement
Date") and shall expire on the third anniversary of the Commencement Date.
This Agreement shall be automatically renewed at the end of the initial term,
and at the end of each term thereafter, for a period of one (1) year on the
same terms and conditions provided herein, unless written notice of termination
is provided by either party at least sixty (60) days prior to the expiration of
the term then in force.
(b) Termination. This Agreement and the Executive's employment by
the Company hereunder may only be terminated (i) by mutual written agreement of
the Executive and the Company; (ii) by the Executive without Good Reason upon
not less than two (2) months prior to the Company; (iii) by the Executive with
Good Reason upon not less than two (2) weeks prior notice to the Company; (iv)
by the Company without Cause; or (v) by the Company for Cause. This Agreement
shall also terminate immediately upon the death or the Disability of the
Executive. Notice of termination by either the Company or the Executive shall
be given in writing and shall specify the basis for termination and the
effective date of termination.
(c) Effect of Termination. Upon termination of this Agreement and
the Executive's employment hereunder, the Company shall have no further
obligation to the Executive or the Executive's estate with respect to this
Agreement, except for payment of amounts, if any, for services rendered by
Executive through the Termination Date accrued pursuant to Section 3 hereof and
unpaid at the Termination Date, and termination payments set forth in Section
4(e)
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hereof, if applicable. Nothing contained herein shall limit or impinge any
other rights or remedies of the Company or the Executive under any other
agreement or plan to which the Executive is a party or of which the Executive
is a beneficiary.
(d) Survival. The covenants of the Executive in Sections 5, 6, 7,
8 and 9 hereof shall survive the termination of this Agreement and the
Executive's employment hereunder and shall not be extinguished thereby.
(e) Termination by Company without Cause, or by Executive with
Good Reason. Except as set forth in Section 4(b)(i) and 4(g) hereof, upon
termination of Executive's employment (y) by the Company without Cause or (z)
by Executive for Good Reason subject to the requirements of this Subsection,
the Company shall be obligated to (i) pay the Executive a cash amount equal to
(I) the sum of salary under Section 3(a) plus bonus under Section 3(b) plus
payments and reimbursements under Section 3(c), (d) and (e) of Executive for
the immediately preceding calendar year multiplied by (II) the number of years
(including fractions thereof) remaining on the unexpired Term (if the Agreement
was not effective for the full year, such amounts shall be extrapolated based
on a full year and if the Agreement was not in effect at all during the
preceding calendar year, such amounts shall be based on the current calendar
year and shall be extrapolated based on a full year, and if the Executive did
not have a bonus for the applicable period, he shall be deemed for purposes of
this severance calculation to have had an annual bonus for the applicable
period of at least $46,667), plus (ii) at the Company's option, either provide
Executive all benefits made available to Executive pursuant to Section 3(g),
for the remaining Term, or pay Executive, a cash amount equal to the Company's
cost of providing coverage for such benefits for the remaining Term if
Executive had remained employed; provided however, that if the payments and
benefits under this Section 4(e) when combined with all other "payments in the
nature of compensation" (within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code") would result in a "parachute
payment" within the meaning of Code Section 280G as determined by the Company,
then the aggregate payments and benefits hereunder shall not exceed the largest
amount (when combined with all other "payments in the nature of compensation")
as determined by the Company that can be paid to Executive without resulting in
a "parachute payment." The cash amounts payable hereunder may be payable at the
Company's option either in one lump sum within thirty (30) days of termination
or in substantially equal installments payable no less frequently than monthly
over the remaining Term commencing within thirty (30) days of termination. If
the Company terminates Executive's employment without Cause or Executive
terminates his employment for Good Reason, the Company shall be required
thereupon to cause the Executive to be immediately released from all existing
obligations of the Executive to guaranty the indebtedness of the Company and
its subsidiaries to third parties. In order to be entitled to the severance
described in this Subsection, the Executive must, within 120 days after the
earlier of the date the Executive becomes aware or should have become aware of
the occurrence of the event constituting Good Reason, give the Company written
notice of the facts and circumstances giving rise to the occurrence of the
event constituting Good Reason, and the Company must thereafter have failed to
cure the event as provided below. The Company shall
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have ten (10) days after the date of Executive's notice of the event
constituting Good Reason to cure or begin a cure if completing a cure within
ten (10) days is not feasible. For purposes of this Subsection, "cure" means,
in the case of an event of Good Reason described in (a) Section 1(l)(i), the
Company prospectively restoring the Executive's job title to his job title
immediately before the event or obtaining his written consent to another job
title, (b) Section 1(l)(ii), the Company prospectively requiring the Executive
to report to the position to which he was required to report immediately before
the event or obtaining his written consent to his reporting to another, (c)
Section 1(l)(iii), the Company prospectively moving the location where the
Executive is based to seventy-five (75) miles or less from the job location
where the Executive was based immediately before the event or obtaining his
written consent to another job location. The occurrence of each separate event
constituting Good Reason shall give the Executive the right to terminate his
employment with Good Reason, subject to compliance with the procedures in this
Subsection, and the failure of the Executive to notify timely the Company of
the occurrence of an event allowing the Executive to terminate his employment
with Good Reason shall not operate as a waiver to prevent the Executive from
terminating his employment for Good Reason in the event of the occurrence of
another event (including an event of the same type) with respect to which the
Executive satisfies the notice requirements herein.
(f) Termination with Cause. Subject to the provisions of this
Section 4(f) and notwithstanding anything herein to the contrary, the Company
may terminate this Agreement in the event that Executive; (i) commits any act
of fraud or embezzlement against the Company or any affiliate; (ii) commits any
act of gross negligence or gross mismanagement in the performance of his duties
hereunder; (iii) is convicted of a felony; (iv) uses alcohol or drugs in a
habitual and disabling manner; (v) breaches any of the covenants or conditions
of Section 5, 6, 7, 8, or 9 of this Agreement; or (vi) willfully and
continually fails to perform any of his duties described in Section 2 hereof.
Provided, any omission resulting from temporary disability which does not
constitute a "Disability" as defined in section 1(j) hereof shall not be deemed
on that basis to constitute gross negligence or gross mismanagement. The
grounds for termination detailed in this Section 4(f) are the sole grounds for
termination for which the Company may terminate Executive "with Cause".
Termination by the Company on any other grounds (other than the disability or
death of Executive) or lack thereof, is hereby deemed "without Cause".
Excepting only claims of fraud against the Company or embezzlement of funds,
the Company shall provide, within 120 days after the date the Board becomes
aware of the occurrence of the event constituting Cause, Executive with written
notice of any claim by it that Executive has committed grounds for termination
with Cause and Executive shall thereafter have thirty (30) days to cure by (i)
restoring the Company to the same position it would have been in but for the
alleged breach; or (ii) with respect to Subsection (f)(iv) in the absence of
other grounds for termination with Cause, ceasing any such habitual or
disabling use. If the Executive is unable or otherwise fails to so cure within
said thirty (30) days, then the Company may proceed with the termination with
Cause pursuant to the terms of this subsection. The occurrence of each
separate event constituting Cause shall give the Company the right to terminate
the Executive with Cause, subject to compliance with the procedures in this
Subsection, and the failure of the Company to notify timely the Executive of
the occurrence of an event allowing the Company
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to terminate his employment with Cause shall not operate as a waiver to prevent
the Company from terminating the Executive's employment with Cause in the event
of the occurrence of another event (including an event of the same type) with
respect to which the Company satisfies the notice requirements herein. Until
the earlier of (i) the rendering of a decision by an arbitrator supporting the
Company's determination that the Executive's termination was with Cause as
provided below, or (ii) 90 days following the date of the Company's written
notice to the Executive of the grounds for Executive's termination of
employment with Cause, the Company shall pay Executive severance in
installments pursuant to Section 4(e) as if such termination were without
Cause. At the end of such period, the Company shall have no further obligation
to make payments pursuant to Section 4(e), unless the Company shall fail
(before or after the end of such period) to establish pursuant to a decision
rendered by an arbitrator that Executive's termination was with Cause. If the
Company fails to establish pursuant to a decision rendered by an arbitrator
that the termination was with Cause, Executive shall be deemed to have been
terminated without Cause and shall thereupon be entitled to his remaining
severance payments pursuant to Section 4(e), with any past due payments being
immediately paid in a cash lump sum. If the Company establishes pursuant to a
decision rendered by an arbitrator that Executive's termination was with Cause,
Executive shall immediately repay to the Company all severance payments he
received pursuant to Section 4(e). In the event that the Company properly
terminates this Agreement with Cause pursuant to this Section 4(f), it shall be
obligated to Executive for all obligations under this Agreement accruing prior
to the date of termination, but shall be relieved from all obligations under
this Agreement accruing subsequent to the date of termination. Notwithstanding
any other provision hereof, if the Company terminates Executive's employment
with Cause, the Company shall be required thereupon to cause the Executive to
be immediately released from all existing obligations of the Executive to
guaranty the indebtedness of the Company and its subsidiaries to third parties.
If the Company fails for any reason to satisfy its obligation to cause the
Executive to be so released, the Company shall be required to continue to pay
Executive's base salary as if he were still employed for the period after the
date of termination of employment that Executive remains liable under any such
guaranty; provided, however, that such payments shall not excuse the Company's
failure to cause such releases to occur and shall not limit any of the
Executive's rights to specific performance and/or damages relating to such
failure.
(g) Limitation on Section 4(e). Among other things, it is the
intent of this Agreement to continue to provide Executive with certain
compensation and benefits (as set forth in Section 4(e) of this Agreement) in
the event that the Company terminates this Agreement without Cause. However,
notwithstanding anything to the contrary, in the event that Executive in his
capacity as an officer, director or shareholder of the Company or any of its
subsidiaries, specifically and directly votes to terminate without Cause or not
to renew this Agreement, then, in such event, Executive shall not be entitled
to any of the compensation or benefits he would otherwise be entitled to under
Section 4(e) in the event the Company terminated without Cause.
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5. AGREEMENT NOT TO COMPETE AND NOT TO SOLICIT CUSTOMERS.
(a) Agreement Not to Compete. The Executive agrees that
commencing on the Commencement Date and continuing through the Applicable
Period he will not (except on behalf of or with the prior written consent of
the Company, which consent may be withheld in the Company's sole discretion),
within the Area, either directly or indirectly, on the Executive's own behalf,
or in the service of or on behalf of others, engage in or provide managerial,
supervisory, sales, marketing, financial, management information,
administrative or consulting services or assistance (collectively "Prohibited
Services") to, or own (other than ownership of less than five percent (5%) of
the outstanding voting security of an entity whose voting securities are traded
on a national securities exchange or quoted on the National Association of
Securities Dealers, Inc. Automated Quotation System) a beneficial or legal
interest in any Competing Business. Notwithstanding anything to the contrary,
however, this, section 5(a) shall not prohibit the Executive from engaging in
or providing the Prohibited Services to a Competing Business if and only if:
(i) that Competing Business is itself a home healthcare agency or hospice (and
not a business providing services to a home healthcare agency or hospice); (ii)
that Competing Business was not an actual or actively sought prospective
acquisition candidate, client or customer of the Company or an Affiliated
during the Executive's last year of employment with the Company; and (iii) the
Executive's performance of the Prohibited Services will inure only to the
benefit of that individual and specific Competing Business, and will not be
directly or indirectly sold, marketed, used, or made available to other
Competing Businesses. For purposes of this Section 5(a), the Executive
acknowledges and agrees that the Business of the Company is conducted in the
Area. Notwithstanding the foregoing, the Executive may (i) perform services
for Medical Center-West, Inc. pursuant to his employment agreement dated
October 31, 1996 and (ii) have an ownership interest in Healthfield, Inc.
(b) Agreement Not to Solicit Customers. The Executive agrees that
commencing on the Commencement Date and continuing through the Applicable
Period, he will not, either directly or indirectly, on the Executive's own
behalf or in the service of or on behalf of others, solicit or divert, or
attempt to solicit or divert, for the purpose of providing managerial,
supervisory, buying, sales, marketing, financial, management information
services, administrative or consulting services or assistance, any individual
or entity which was an actual or actively sought prospective acquisition
candidate, client or customer of the Company or an Affiliate and with whom the
Executive had direct or indirect contact as part of his employment during the
Executive's last year of employment with the Company. For purposes of this
Section 5(b), the Executive acknowledges and agrees that he/she is engaged in
performing services under this Agreement related to actual and actively sought
prospective acquisition candidate, clients or customers.
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6. AGREEMENT NOT TO SOLICIT EMPLOYEES.
The Executive agrees that commencing on the Commencement Date and
continuing through the Applicable Period, he will not, either directly or
indirectly, on the Executive's own behalf or in the service of or on behalf of
others, solicit, divert of hire, or attempt to solicit, divert or hire to any
Competing Business any person employed by the Company or an Affiliate, whether
or not such employee is a full-time employee or a temporary employee of the
Company or an Affiliate and whether or not such employment is pursuant to
written agreement and whether or not such employment is for a determined period
or is at will.
7. OWNERSHIP AND PROTECTION OF PROPRIETARY INFORMATION.
(a) Confidentiality. All Confidential Information and Trade
Secrets and all physical embodiments thereof received or developed by the
Executive while employed by the Company are confidential to and are and will
remain the sole and exclusive property of the Company. Except to the extent
necessary to perform the duties assigned to him by the Company or as required
by judicial process after at least ten (10) days written notice to the Company,
the Executive will hold such Confidential Information and Trade Secrets in
trust and strictest confidence, and will not use, reproduce, distribute,
disclose or otherwise disseminate the Confidential Information and Trade
Secrets or any physical embodiments thereof and may in no event take any action
causing or fail to take the action necessary in order to prevent, any
Confidential Information and Trade Secrets disclosed to or developed by the
Executive to lose its character or cease to qualify as Confidential Information
or Trade Secrets.
(b) Return of Company Property. Upon request by the Company, and
in any event upon termination of the employment of the Executive with the
Company for any reason, as a prior condition to receiving any final
compensation hereunder (including any payments pursuant to Section 4 hereof),
the Executive will promptly deliver to the Company all property belonging to
the Company, including, without limitation, all Confidential Information and
Trade Secrets (and all embodiments thereof) then in the Executive's custody,
control or possession.
(c) Survival. The covenants of confidentiality set forth herein
will apply on and after the date hereof to any Confidential Information and
Trade Secrets disclosed by the Company or developed by the Executive prior to
or after the date hereof. These covenants restricting the use of Confidential
Information will continue and be maintained by the Executive for a period of
two years following the termination of this Agreement. The covenants
restricting the use of Trade Secrets will continue and be maintained by the
Executive following termination of this Agreement for so long as permitted by
the Georgia Trade Secrets Act of 1990, O.C.G.A. Section 10-1-760-10-1-767.
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8. INVENTIONS.
(a) Company Inventions. The Executive agrees that all Company
Inventions conceived or first reduced to practice by the Executive at any time
during his employment with the Company or an Affiliate, and all patent rights
and copyrights to such Company Inventions shall become and remain the property
of the Company, and the Executive hereby irrevocably assigns to the Company all
of his rights to all Company Inventions. If the Executive conceives an
Invention at any time during his employment with the Company or an Affiliate,
for which there is a reasonable basis to believe that the conceived Invention
is a Company Invention, the Executive shall promptly provide a written
description of the conceived Invention to the Company adequate to allow
evaluation thereof for a determination by the Company as to whether the
Invention is a Company Invention. Notwithstanding the foregoing, the
provisions of this Section 8(a) shall not apply to any Invention that the
Executive may develop without using the Company's equipment, supplies,
facilities, or trade secret information, except for any Inventions that either
(i) relate at the time of conception or reduction to practice of the Invention
to the Business of the Company, or to actual or demonstrably anticipated
research or development of the Company; or (ii) result from any work performed
at any time by the Executive for the Company.
(b) Prior Inventions. If prior to the date the Executive first
became employed by the Company or an Affiliate he conceived any Invention or
acquired any ownership interest in any Invention which (i) is the property of
the Executive, or of which the Executive is a joint owner with another person
or entity, (ii) is not described in any issued patent as of the Commencement
Date, and (iii) would be a Company Invention if such Invention were made during
his employment with the Company or an Affiliate, then, with respect to any such
Invention, the Executive hereby grants to the Company and Affiliates a
non-exclusive, paid up royalty-free license to use such Invention. Subject
only to this non-exclusive license, the Invention is and shall remain the
property of the Executive.
(c) Prior Patents. The Executive represents to the Company that
the Executive owns no (i) patents, (ii) copyrights or Works, or (iii)
Inventions related to the Business of the Company, individually or jointly with
others.
(d) Patent Applications. The Executive agrees that should the
Company elect to file an application for patent protection, either in the
United States or in any foreign country, on a Company Invention of which the
Executive was an inventor, the Executive will execute all necessary truthful
papers, including formal assignments to the Company relating to such patent
applications. The Executive further agrees to cooperate with any attorneys or
other persons designated by the Company by explaining the nature of any Company
Invention for which the Company elects to file an application for patent
protection, reviewing applications and other papers and providing any other
cooperation reasonably required for orderly prosecution of such patent
applications. The Company shall be responsible for all expenses incurred for
the
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preparation and prosecution of all patent applications on Company Inventions
filed by the Company.
9. COPYRIGHTS.
(a) Ownership and Assignment. The Executive acknowledges and
agrees that any Works created by the Executive in the course of his employment
with the Company or an Affiliate are subject to the "Work for Hire" provisions
contained in Sections 101 and 201 of the United States Copyright Law, Title 17
of the United States Code, and that all right, title and interest to copyrights
in all Works which have been or will be prepared by the Executive within the
scope of his employment shall be the property of the Company. The Executive
further acknowledges and agrees that, to the extent the provisions of Title 17
of the United States Code do not vest in the Company the copyrights to any such
Works, the Executive will assign and hereby does assign to the Company all
right, title and interest to copyrights which the Executive may have in such
Works.
(b) Registration. The Executive agrees to disclose to the Company
all Works referred to in the immediately preceding paragraph and execute and
deliver all applications for registration, registrations, and other documents
relating to the copyrights to the Works and provide such additional assistance,
as the Company may deem necessary and desirable to secure the Company's title
to the copyrights in the Works. The Company shall be responsible for all
expenses incurred in connection with the registration of all such copyrights.
10. REMEDIES.
The Executive agrees that the covenants and agreements contained in
Sections 5, 6, 7, 8 and 9 hereof are of the essence of this Agreement; that
each of such covenants is reasonable and necessary to protect and preserve the
interests and properties of the Company and the Business of the Company; that
the Company is engaged in and throughout the Area in the Business of the
Company; that irreparable loss and damage will be suffered by the Company
should the Executive breach any of such covenants and agreements; that each of
such covenants and agreements is separate, distinct and severable not only from
the other of such covenants and agreements but also from the other and
remaining provisions of this Agreement; that the unenforceability of any such
covenant or agreement shall not affect the validity or enforceability of any
other such covenant or agreements or any other provision or provisions of this
Agreement; and that, in addition to other remedies available to it, the Company
shall be entitled to specific performance of this Agreement and to both
temporary and permanent injunctions to prevent a breach or contemplated breach
by the Executive of any of such covenants or agreements.
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11. NO SET-OFF.
The existence of any claim, demand, action or cause of action by the
Executive against the Company, or any Affiliate of the Company, whether
predicated upon this Agreement or otherwise, shall not constitute a defense to
the enforcement by the Company of any of its rights hereunder. The existence
of any claim, demand, action or cause of action by the Company against the
Executive, whether predicated upon this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Executive of any of his rights
hereunder.
12. NOTICE.
All notices, requests, demands and other communications required
hereunder shall be in writing and shall be deemed to have been duly given if
delivered or if mailed, by United States certified or registered mail, prepaid
to the party to which the same is directed at the following addresses (or at
such other addresses as shall be given in writing by the parties to one
another):
If to the Company: InfoMed Holdings, Inc.
0000 Xxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: General Counsel
If to the Executive: Xxxx X. Xxxxxx
0000 Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Notices delivered in person shall be effective on the date of delivery.
Notices delivered by mail as aforesaid shall be effective upon the third
calendar day subsequent to the postmark date hereof.
13. MISCELLANEOUS.
(a) Assignment. Neither this Agreement nor any right of the
parties hereunder may be assigned or delegated by any party hereto without the
prior written consent of the other party; provided, however, that the Company
may assign to an Affiliate in which case the Affiliate will be deemed to be the
Company for relevant purposes of this Agreement. Notwithstanding any such
assignment by the Company to an Affiliate the assignor (i.e., the Company)
shall remain liable jointly and severally with the assignee for the obligations
of the Company hereunder.
(b) Waiver. The waiver by the Company of any breach of this
Agreement by the Executive shall not be effective unless in writing, and no
such waiver shall constitute the waiver of the same or another breach on a
subsequent occasion.
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(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Georgia.
(d) Entire Agreement. This Agreement embodies the entire
agreement of the parties hereto relating to the subject matter hereof and
supersedes all oral agreements, and to the extent inconsistent with the terms
hereof, all other written agreements.
(e) Amendment. This Agreement may not be modified, amended,
supplemented or terminated except by a written instrument executed by the
parties hereto.
(f) Severability. Each of the covenants and agreements
hereinabove contained shall be deemed separate, severable and independent
covenants, and in the event that any covenant shall be declared invalid by any
court of competent jurisdiction, such invalidity shall not in any manner affect
or impair the validity or enforceability of any other part or provision of such
covenant or of any other covenant contained herein.
(g) Captions and Section Headings. Except as set forth in Section
1 hereof, captions and section headings used herein are for convenience only
and are not a part of this Agreement and shall not be used in construing it.
14. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be resolved exclusively by arbitration
before a single arbitrator in Atlanta, Georgia, in accordance with the rules of
the American Arbitration Association ("AAA") then in effect, subject to the
procedures agreed to below. Either party may serve upon the other party by
providing notice by registered mail and otherwise in accordance with Section 12
of this Agreement, a written demand that the dispute, specifying in detail its
nature, be submitted to arbitration. The written demand shall be brought as
soon as practicable after the dispute or controversy arose. The arbitrator
shall be selected by the joint agreement of the parties, but if they do not
agree within ten (10) days of the written demand, then selection shall be made
pursuant to the rules from the panels of arbitrators maintained by AAA. The
parties agree to cooperate in causing the arbitration proceeding to proceed
expeditiously. Any award rendered by the arbitrator shall be accompanied by a
written opinion of the arbitrator giving the reasons for the award. The award
shall be conclusive and binding upon the parties, and there shall be no right
of appeal therefrom. The arbitrator's award shall be specifically enforceable,
and judgment may be entered on the award in any court having appropriate
jurisdiction. Subject to Section 15, each party shall pay its own expenses of
arbitration, and the expenses of the arbitrator shall be equally shared.
Nothing contained in this section 14 shall prevent the parties from settling
any dispute by mutual agreement at any time.
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15. EXECUTIVE'S EXPENSES. The Company shall pay all of the Executive's
legal and other advisory fees and expenses incurred by the Executive: (a) in
defending the validity of this Agreement, and (b) to the extent he prevails on
the merits, in contesting in good faith any determinations by the Company that
his termination was with Cause or concerning the amounts payable (or
reimbursable) by the Company to the Executive hereunder.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Company and the Executive have each executed
and delivered this Agreement.
COMPANY:
WITNESS: INFOMED HOLDINGS, INC.
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------- -----------------------------------
Xxxxx X. Xxxxxxxx
Title: President
---------------------------------
[CORPORATE SEAL]
WITNESS: EXECUTIVE:
/s/ Xxxxx X. Xxxxxxxx /s/ Xxxx X. Xxxxxx
--------------------------- ---------------------------------------
Xxxx X. Xxxxxx
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