EXHIBIT 10(p)
EMPLOYMENT AND NON-COMPETE AGREEMENT
Agreement made as of November 1, 1996, between Hanger Orthopedic Group,
Inc., a Delaware corporation (the "Company"), and H.E. Thranhardt
("Executive").
WITNESSETH:
WHEREAS, Executive has great expertise in the Company's and its
Subsidiaries' businesses;
WHEREAS, Executive's use of such expertise in competition with the
Company and its Subsidiaries would have an extremely detrimental effect on the
Company and its Subsidiaries; and
WHEREAS, the Company desires to retain the services of Executive and to
assure itself that Executive does not engage in competition with the Company
and its Subsidiaries.
NOW, THEREFORE, the parties hereto agree as follows:
1. EMPLOYMENT. The Company agrees to employ Executive and Executive
accepts such employment by the Company upon the terms and conditions set forth
in this Agreement, for the period beginning on the date of this Agreement, and
ending upon termination pursuant to paragraph 4 hereof (the "Employment
Period").
2. COMPENSATION. During the Employment Period, the Company will pay
Executive a base salary at the rate of $250,000 per annum in consideration for
the services to be rendered to the Company by Executive (the "Base Salary").
Executive's Base Salary may be increased from time to time as determined by
the Board of Directors of the Company (the "Board"). In addition to the Base
Salary, Executive also will be entitled to reimbursement for preapproved
travel expenses during the Employment Period.
3. SERVICES. During the Employment Period, Executive shall devote his
best efforts and a sufficient amount of his business time and attention to the
affairs of the Company or its Subsidiaries as may be necessary to perform his
duties hereunder. During the Employment Period, Executive agrees to render
such services of an executive and administrative character to the Company and
its Subsidiaries as the Board may from time to time direct.
4. TERMINATION. The Employment Period will be for a period of three (3)
years, unless terminated earlier by (a) Executive's death or permanent
disability (as determined by the Board in its good faith judgment), (b) by
Executive's resignation upon prior written notice to the Company of not less
than three (3) months, (c) the Board for Cause, or (d) the Board without
Cause. For purpose of this paragraph 4, "Cause" shall mean (i) the failure or
refusal of Executive to follow the lawful directives of the Board (except due
to sickness, injury or disabilities), (ii) inattention to duty or any other
willful, reckless or negligent act (or omission to act) by Executive, which,
in the good faith judgment of the Board, materially injures the Company or one
of its Subsidiaries, including the repeated failure to follow the policies and
procedures of the Company or one of its Subsidiaries, (iii) a material breach
of this Agreement by Executive, (iv) the commission by Executive of a felony
or other crime involving moral turpitude or the commission by Executive of an
act of financial dishonesty against the Company or one of its Subsidiaries or
(v) a proper business purpose of the Company, including but not limited to a
decrease in the staffing of the office in which Executive is working or the
elimination of the position filled by Executive.
If Executive's employment is terminated by the Executive in any manner
other than clauses (a) or (b) above, the Company will have the remedies
enumerated in paragraph 16.
If Executive's employment is terminated for any reason prior to end of
three (3) years from the date of this Agreement, then Executive shall be
entitled to receive the remainder of his Base Salary over the remainder of
such 3-year period at such times as the regular payments (monthly or
bi-monthly) of his Base Salary would have been paid to him in the event his
employment with the Company had not been terminated prior to the end of such
3-year period.
5. NON-COMPETE.
(a) Executive agrees that during the Employment Period and for a period
of thirty-six (36) months thereafter (the "Non-Compete Period"), Executive
will not directly or indirectly (whether as employee, director, owner,
stockholder, consultant, partner (limited or general) or otherwise) own,
manage, control, participate in, consult with, render services for or in any
manner engage in any Competitive Business or solicit any other Person to
engage in any of the foregoing activities or knowingly request, induce or
attempt to influence any then existing customer of the Company or its
Subsidiaries to curtail or cause any business they are currently, or in the
last 36 months have been, transacting with the Company and its Subsidiaries
(the "Non-Compete"). Nothing herein will prevent Executive from being a
passive owner of not more than 1% of the outstanding stock of any class of a
corporation which is a competitor of the Company or its Subsidiaries and which
is publicly traded, so long as Executive has no participation in the business
of such corporation. During the Non-Compete Period, Executive shall not,
without the Company's prior written consent, directly or indirectly, knowingly
solicit or encourage or attempt to influence any employee to leave the
employment of the Company or any of its Subsidiaries.
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"Competitive Business" shall mean engaging in "Business" within the
"Restricted Territory." "Business" shall mean manufacturing, distributing,
wholesaling or retailing of orthotics or prosthetics, or the operation of
clinics to fit patients for orthotics or prosthetics, or any other related
businesses which the Company and its Subsidiaries are engaged in during and at
the expiration of the Employment Period. "Restricted Territory" shall mean the
United States of America, the District of Columbia and any U.S. territory in
which the Company or any one or more of its Subsidiaries conducts Business
during and at the expiration of the Employment Period.
(b) If, at the time of enforcement of any provision of paragraph 5(a)
above, a court holds that the restrictions stated therein are unreasonable
under circumstances then existing, the parties hereto agree that the maximum
period, scope, and geographical area reasonable under such circumstances will
be substituted for the stated period, scope or area.
(c) The parties hereto agree and acknowledge that money damages may not
be an adequate remedy for any breach of the provisions of this paragraph 5;
therefore, in the event of a breach by Executive of any of the provisions of
this paragraph 5, the Company or its successors or assigns may, in addition to
other rights and remedies existing in its favor, apply to any court of law or
equity of competent jurisdiction for specific performance and/or injunctive or
other relief in order to enforce or prevent any violations of the provisions
hereof.
6. CONFIDENTIAL INFORMATION. Executive acknowledges that the information,
observations, data and trade secrets (collectively, "Confidential
Information") obtained by him during the course of his performance under this
Agreement, and previously as an employee of the Company and/or its
Subsidiaries, concerning the business or affairs of the Company or any of its
Subsidiaries are the property of the Company and its Subsidiaries. For
purposes of this Agreement, "trade secret" means any method, program or
compilation of information which is used in the Company's or any Subsidiary's
business, including but not limited to: (a) techniques, plans and materials
used by the Company and its Subsidiaries, (b) marketing methods and strategies
employed by the Company and its Subsidiaries, and (c) all lists of past,
present or prospective customers, suppliers, referring physicians and all
other referral sources of the Company and its Subsidiaries. Executive agrees
that he will not disclose to any unauthorized Person or use for his own
account any of such Confidential Information without the Board's written
consent, unless and to the extent that the aforementioned matters become
generally known to and available for use by the public other than as a result
of the Executive's acts or omissions to act or become known to the Executive
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lawfully outside the scope of his employment under this Agreement. Executive
agrees to deliver to the Company at the termination of his employment, or at
any other time the Company may request, all memoranda, notes, plans, records,
reports and other documents and its Subsidiaries which he may then possess or
have under his control.
7. INVENTIONS AND PATENTS. Executive agrees that all Confidential
Information and all inventions, innovations or improvements in the Company's
and its Subsidiaries' method of conducting their respective businesses, or any
reasonable development or extension of such businesses (including new
contributions, improvements, ideas and discoveries, whether patentable or
not), conceived or made by him (whether individually or in conjunction with
other Persons) during the Employment Period belong to the Company and its
Subsidiaries. Executive will promptly disclose such inventions, innovations or
improvements to the Board and perform all actions reasonably requested by the
Board to establish and confirm such ownership.
8. OTHER BUSINESSES. During the Employment Period, Executive agrees that
he will not, except with the express written consent of the Board, become
engaged in, render services for, or permit his name to be used in connection
with, any Competitive Business other than the business of the Company and its
Subsidiaries. Notwithstanding anything else contained herein to the contrary,
the Company agrees that Executive may continue to serve on the board of
directors of CRP Springlite.
9. NO INCONSISTENT AGREEMENTS. Any and all employment, consulting or
other similar agreements heretofore executed between the Company and/or its
Subsidiaries on the one hand and Executive on the other are hereby terminated.
10. NOTICES. Any notice provided for in this Agreement must be in writing
and must be either personally delivered, sent by overnight courier (E.G.,
Federal Express) or mailed by first class mail, to the recipient at the
address below indicated:
To the Company:
Hanger Orthopedic Group, Inc.
0000 Xxx Xxxxxxxxxx Xxxx (Xxxxxx Xxxxx)
Xxxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
To Executive:
H.E. Xxxxxxxxxx
X.X. Hanger, Inc. of Georgia
0000 XxXxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
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With a copy of any of the foregoing notices to:
Freedman, Levy, Xxxxx & Xxxxxxx
0000 Xxxxxxxxxxx Xxxxxx, X.X. (Xxxxx 000)
Xxxxxxxxxx, X.X. 00000
Attention: Xxx X. Xxxxxxxx, Esq.
or such other address or to the attention of such other Person as the
recipient party shall have specified by prior written notice to the sending
party. Any notice under this Agreement will be deemed to have been given when
so delivered, sent or mailed.
11. SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law. The parties agree that (i) the provisions of this Agreement
shall be severable in the event that any of the provisions hereof are for any
reason whatsoever invalid, void or otherwise unenforceable, (ii) such invalid,
void or otherwise unenforceable provisions shall be automatically replaced by
other provisions which are as similar as possible in terms to such invalid,
void or otherwise unenforceable provisions but are valid and enforceable and
(iii) the remaining provisions shall remain enforceable to the fullest extent
permitted by law.
12. COMPLETE AGREEMENT. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the
complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way.
13. COUNTERPARTS. This Agreement may be executed on separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
14. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and inure
to the benefit of and be enforceable by Executive and the Company, and their
respective successors and assigns. Executive may not assign his rights or
delegate his obligations hereunder without the prior written consent of the
Company. The Company may assign its rights and delegate its duties hereunder
without the consent of the Executive to Permitted Transferees.
15. GOVERNING LAW. All questions concerning the construction, validity
and interpretation of the Agreement will be governed by the internal law, and
not the law of conflicts of the State of Maryland.
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16. REMEDIES. Each of the parties to this Agreement will be entitled to
enforce its rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in its favor. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement. Executive acknowledges that in
his past, present and future capacity as an executive officer of the Company
and/or its Subsidiaries, he was, is and will be critical to the success of the
Company and its Subsidiaries and that the Company would not have consummated
the Purchase unless Executive entered into this Agreement. Executive further
acknowledges that his material breach of this Agreement would cause the
Company and its Subsidiaries material adverse harm, including lost sales,
profits and growth potential. Executive believes it would be just and
equitable for a court to consider the foregoing factors when accessing damages
against Executive for his material breach of this Agreement.
17. AMENDMENTS AND WAIVERS; THIRD PARTY BENEFICIARIES. Any provision of
this Agreement may be amended or waived only with the prior written consent of
the Company and Executive. The failure of either party to insist, in any one
or more instances, upon performance of the terms or conditions of this
Agreement shall not be construed as a waiver or a relinquishment of any right
granted hereunder or of the future performance of any such term, covenant or
condition. Each direct and indirect Subsidiary of the Company shall be a third
party beneficiary of the Executive's obligations under this Agreement,
provided that this Agreement may be amended in any manner without the consent
of such third party beneficiaries.
18. DEFINITIONS. "Person" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a governmental entity or any department or agency thereof.
"Permitted Transferee" shall mean (a) any successor by merger or consolidation
to the Company or any Permitted Transferee; (b) any purchaser of all or
substantially all of the Company's or any Permitted Transferee's assets; and
(c) any lender to (i) the Company, (ii) any Permitted Transferee and/or (iii)
any affiliate of the Company or of any Permitted Transferee. "Subsidiary"
shall mean any Person which the Company has the direct or indirect right to
control, direct or cause direction of management and policies of, whether
through the ownership of voting securities, by contract or otherwise,
including but not limited to X.X. Xxxxxx, Inc. of Georgia.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
HANGER ORTHOPEDIC GROUP, INC.
HANGER ORTHOPEDIC GROUP, INC.
By:__________________________ __________________________
Xxxx X. Xxxxx H.E. Thranhardt
President and Chief Executive
Officer
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AMENDMENT NO. 1 TO EMPLOYMENT AND NON-COMPETE AGREEMENT
Amendment No. 1, dated as of January 1, 1997 (the "Amendment"), to the
Employment and Non-Compete Agreement, dated as of November 1, 1996 (the
"Agreement"), between Hanger Orthopedic Group, Inc., a Delaware corporation
(the "Company"), and H.E. Thranhardt ("Executive").
WHEREAS, Executive and the Company wish to reflect the cessation of
executive management services by Executive to the Company, although Executive
will continue to be employed by and provide non-management services to the
Company through Southern Prosthetic Supply, Inc., a wholly-owned subsidiary of
the Company.
NOW, THEREFORE, the parties hereto agree as follows:
1. AMENDMENT OF AGREEMENT. The Agreement is amended only as hereinafter
provided. All terms of the Agreement which are not herein amended shall remain
in full force and effect. All capitalized terms used herein shall have the
meanings ascribed to them in the Agreement unless otherwise provided herein.
2. COMPENSATION. During the remaining thirty-four (34) months of the
Employment Period from and after the date of this Amendment, unless earlier
terminated in accordance with the terms of the Agreement, the Company will pay
Executive a base salary at the gross, pre-tax rate of $25,000 per annum in
consideration for the services to be rendered to the Company by Executive (the
"Base Salary"). In addition to the Base Salary, Executive also will be
entitled to benefits as provided by the Company. During the Employment Period,
the Company will also pay Executive a termination fee (the "Termination Fee")
in the gross, pre-tax amount of $19,166.67 per month in consideration for the
termination of the executive management services of Executive as a result of
the acquisition by merger of Southern Prosthetic Supply, Inc. (formerly known
as X.X. Xxxxxx, Inc. of Georgia) by the Company. If Executive's employment is
terminated for any reason prior to end of the remaining 34 months of the
Employment Period, then Executive shall be entitled to receive the remainder
of his Base Salary and Termination Fee over the remainder of such 34-month
period at such times as the regular payments of his Base Salary and
Termination Fee would have been paid to him in the event his employment with
the Company had not been terminated prior to the end of such 34-month period.
3. COUNTERPARTS. This Amendment may be executed on separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year first above written.
HANGER ORTHOPEDIC GROUP, INC.
By:__________________________ __________________________
Xxxx X. Xxxxx H.E. Thranhardt
President and Chief Executive
Officer
