Exhibit 10.24
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), is dated as of August 17,
2001, by and between NovaMed Eyecare Services, LLC, a Delaware limited liability
company (the "Company"), and Xxxxxxx X. Xxxxxx ("Employee").
PRELIMINARY RECITALS
A. The Company is an eye care services company engaged in the business of:
(i) providing comprehensive eye care services to eye care providers and
businesses ancillary thereto, including, without limitation, providing
financial, administrative, information technology, marketing and managed care
services and ophthalmic surgical equipment to ophthalmic and optometric
providers; (ii) owning, operating and/or managing ambulatory surgery centers,
refractive centers, excimer lasers, optical dispensaries, wholesale optical
laboratories, an optical supplies and equipment purchasing organization and a
marketing services and products company that provides marketing services and
products to eye care providers; and (iii) providing clinical research and site
management services to the eye care pharmaceutical and device industries
(collectively, the "Business").
B. The Company and Employee entered into an Employment Agreement dated
August 21, 1995, which was subsequently amended and restated as of February 17,
1999 and further amended as of March 9, 2000 (the "Restated Agreement").
C. In consideration for the continued employment of Employee, the parties
hereto desire to amend the terms and conditions of the Restated Agreement, all
on the terms and conditions set forth herein.
D. The Company desires to continue to employ Employee, and Employee desires
to continue to be employed by the Company, as the President and Chief Executive
Officer of the Company on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the premises, the mutual covenants of
the parties hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
Employment
1.1 Engagement of Employee. The Company agrees to employ Employee, and
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Employee accepts such employment by the Company, for the period beginning August
17, 2001 (the "Effective Date") and ending on August 16, 2004 (the "Initial
Employment Period"). THE
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INITIAL EMPLOYMENT PERIOD AND ANY RENEWAL PERIOD (AS HEREINAFTER DEFINED) SHALL
AUTOMATICALLY BE RENEWED AND EXTENDED ON THE SAME TERMS AND CONDITIONS CONTAINED
HEREIN FOR CONSECUTIVE ONE-YEAR PERIODS (THE "RENEWAL PERIODS"), UNLESS NOT
LATER THAN SIXTY (60) DAYS PRIOR TO THE END OF THE INITIAL EMPLOYMENT PERIOD OR
ANY RENEWAL PERIOD, EITHER PARTY SHALL GIVE WRITTEN NOTICE TO SUCH OTHER PARTY
ELECTING TO TERMINATE THIS AGREEMENT. The Initial Employment Period and the
Renewal Periods are hereinafter referred to as the "Employment Period." For
purposes of this Agreement, any notice of termination electing not to renew this
Agreement pursuant to this Section 1.1 shall be deemed: (i) a termination
without Cause if such notice is delivered by the Company; or (ii) a voluntary
termination of employment if such notice is delivered by Employee; provided,
however, that if the Employment Period is terminated pursuant to this Section
1.1 by Employee (except as provided in Section 3.4), then notwithstanding
Article III, the Company shall have no further obligations hereunder or
otherwise with respect to Employee's employment from and after the expiration of
the Employment Period (except payment of Employee's Base Salary accrued through
the expiration of the Employment Period). Notwithstanding anything to the
contrary contained herein, the Employment Period is subject to termination
pursuant to Article III below. This Agreement replaces the Restated Agreement,
in its entirety, effective as of the Effective Date.
1.2 Duties and Powers. During the Employment Period, Employee will have
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such responsibilities, duties and authorities, and will render such services or
act in such other capacity for the Company and its affiliates as the Board of
Directors (the "Board") of NovaMed Eyecare, Inc. (the "Parent"), the manager and
parent of the Company (or any designated officer of the Parent or the Company),
may from time to time direct. Employee will devote his best efforts, energies
and abilities and his full business time, skill and attention (except for
permitted vacation periods and reasonable periods of illness or other
incapacity) to the business and affairs of the Company, and shall perform the
duties and carry out the responsibilities assigned to him, to the best of his
ability, in a diligent, trustworthy, businesslike and efficient manner for the
purpose of advancing the Company. Employee acknowledges that his duties and
responsibilities will require his full-time business efforts and agrees that
during the Employment Period he will not engage in any other business activity
or have any business pursuits or interests except activities or interests which
do not conflict with the business of the Company, the Parent and any of their
affiliated entities or interfere with the performance of Employee's duties
hereunder.
1.3 No Violation. Employee represents and warrants that the execution of
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this Agreement by Employee and the performance by Employee of his duties as an
employee of the Company will not violate, conflict with or result in a breach or
default under any agreements, arrangements or understandings to which Employee
is or was a party, or by which he is or was bound, nor will the performance of
Employee's duties as an employee of the Company be limited, restricted or
impaired in any manner as a result of any agreements, arrangements or
understandings to which Employee is or was a party.
ARTICLE II
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Compensation
2.1 Base Salary. During the Employment Period, the Company will pay
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Employee a base salary at the rate of $325,000 per annum (the "Base Salary"),
payable in regular installments in accordance with the Company's general payroll
practices for salaried employees. If the Employment Period is terminated
pursuant to Section 3 (subject to any severance provisions in Section 3.3 or
Section 3.4), Employee's Base Salary for any partial year will be prorated based
upon the number of days elapsed in such year during which services were actually
performed by Employee. The Board or any designated officer shall perform an
annual review of Employee's Base Salary based on Employee's performance of his
duties and the Company's other compensation policies; provided that any increase
in the Base Salary shall require approval of the Board or its Compensation
Committee.
2.2 Discretionary Bonus. Following the end of each fiscal year, the Board
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or its Compensation Committee, in its sole discretion, may elect to cause the
Company to award to Employee a bonus for such year, in an amount to be
determined by the Board or its Compensation Committee, based on such performance
targets as shall be established, and adjusted from time to time, by the Board or
its Compensation Committee.
2.3 Benefits. In addition to the Base Salary payable to Employee
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hereunder, Employee will be entitled to the following benefits during the
Employment Period, unless otherwise altered by the Board with respect to all
management employees of the Company (collectively, the "Benefits"):
(a) hospitalization, disability, life and health insurance, to the
extent offered by the Company and subject to the Company's policies in effect
from time to time, and in amounts consistent with Company policy, for all
management employees, as reasonably determined by the Board;
(b) paid vacation each year with salary, consistent with Company
policy for all management employees;
(c) reimbursement for reasonable out-of-pocket business expenses
incurred by Employee in the ordinary course of his duties, subject to the
Company's policies in effect from time to time with respect to travel,
entertainment and other expenses, including without limitation, requirements
with respect to reporting and documentation of such expenses;
(d) other benefit arrangements to the extent made generally available
by the Company to its management employees;
(e) participation in the Parent's Stock Incentive Plan such that
Employee is granted options to purchase an amount of the common equity interest
in the Parent consistent with the determination of the Board or its Compensation
Committee pursuant to such plan; and
(f) an automobile allowance of $750 per month.
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2.4 Taxes, etc. All compensation payable to Employee hereunder is stated
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in gross amount and shall be subject to all applicable withholding taxes, other
normal payroll and any other amounts required by law to be withheld.
ARTICLE III
Termination
3.1 Termination By Employee or the Company. The Employment Period (i)
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shall automatically terminate immediately upon Employee's resignation or death,
or (ii) may be terminated immediately by the Company as set forth herein for
Cause or without Cause, or by reason of Employee's Permanent Disability.
"Cause" as used herein means the occurrence of any of the following events:
(a) a material breach by Employee of any of the terms and conditions
of this Agreement; provided that Employee shall have a reasonable period of time
during which to cure such material breach following the date on which Employee
receives the Company's written notice of such material breach;
(b) Employee's material failure or willful refusal to substantially
perform his duties; provided that Employee shall have a reasonable period of
time during which to cure such failure following the date on which Employee
receives the Company's written notice of such failure;
(c) Employee's failure, as notified by the Company in writing, to
comply with any of the Company's written guidelines or procedures promulgated by
the Company and furnished to Employee, including, without limitation, any
guidelines or procedures relating to marketing or community relations; provided
that Employee shall have a reasonable period of time during which to cure such
failure following the date on which Employee receives the Company's written
notice of such failure; or
(d) the determination by the Board in the exercise of its reasonable
judgment that Employee has committed an act or acts constituting a felony or
other act involving dishonesty, disloyalty or fraud against the Company.
"Permanent Disability" as used herein shall mean that Employee is unable to
perform, with or without reasonable accommodation, by reason of physical or
mental incapacity, the essential functions of his or her position. The Board
shall determine, according to the facts then available, whether and when a
Permanent Disability has occurred. Such determination shall not be arbitrary or
unreasonable, and shall be final and binding on the parties hereto.
3.2 Termination by Employee. Employee has the right to terminate his
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employment under this Agreement at any time, for any or no reason, upon ninety
(90) days written notice to the Company; provided, however, that such ninety
(90) day notice is not required for a termination of employment during the
Window Period (as defined in Section 3.4(g)).
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3.3 Compensation After Termination.
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(a) Except as described in Section 3.4 hereof, or except as may be
specifically required by law, if the Employment Period is terminated (i) by the
Company for Cause or due to the death or Permanent Disability of Employee, or
(ii) by Employee (including a termination resulting from Employee's election not
to renew this Agreement under Section 1.1 hereof), then the Company shall have
no further obligations hereunder or otherwise with respect to Employee's
employment from and after the termination or expiration date (except payment of
Employee's Base Salary accrued through the date of termination or expiration),
and the Company shall continue to have all other rights available hereunder
(including, without limitation, all rights under Article IV hereof) at law or in
equity;
(b) Except as described in Section 3.4 hereof, if the Employment
Period is terminated by the Company without Cause (including a termination
resulting from the Company's election not to renew this Agreement under Section
1.1 hereof): (i) Employee shall be entitled to receive all items described in
Section 3.3(a) above; and (ii) subject to the conditions hereinafter set forth,
Employee shall be entitled to receive as severance compensation, the following
(collectively, the "Severance Pay"): (A) Employee's then-current monthly Base
Salary hereunder for a period of eighteen (18) months (such time period to be
hereinafter referred to as the "Severance Period" (unless modified by Section
3.4)), payable in regular installments in accordance with the Company's general
payroll practices for salaried employees; (B) the bonus, if any, that Employee
would have been entitled under Section 2.2 hereof at the end of the year during
which termination without Cause occurs had such termination not occurred, which
bonus shall be (1) prorated based on the amount of time that Employee was
employed by the Company during the year (not including the Severance Period) for
which such bonus is being calculated, and (2) determined and paid to Employee
contemporaneously with the determination and payment of bonuses for comparable
employees of the Company; and (C) continuation of the welfare benefits described
in Section 2.3(a) for the Severance Period, to the extent permissible under the
terms of the relevant benefit plans. The bonus described in subclause (B) above
shall not be the "Target Bonus" (as defined in Section 3.4(b)), but rather the
bonus that would have been payable pursuant to Section 2.2 hereof, as modified
by this Section 3.3(b). Employee's right to receive Severance Pay hereunder is
conditioned upon: (x) Employee executing and delivering to the Company a written
separation agreement and general release of all claims, in form and substance
acceptable to the Company, which shall among other things, contain a general
release by Employee of all claims arising out of his employment and termination
of employment by the Company; and (y) Employee's compliance with all of his
obligations which survive termination of this Agreement, including without
limitation those described in Article IV below. The Severance Pay is intended to
be in lieu of all other payments to which Employee might otherwise be entitled
in respect of his termination without Cause. The Company shall have no further
obligations hereunder or otherwise with respect to Employee's employment from
and after the date of termination of employment with the Company for any reason
(the "Termination Date"), and the Company shall continue to have all other
rights available hereunder (including without limitation, all rights hereunder
(including without limitation, all rights under Article IV hereof) at law or in
equity.
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3.4 Compensation After Termination Following a Change in Control.
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(a) If the Employment Period is terminated following a Change in
Control (as defined below) (i) by the Company for Cause or due to the death or
Permanent Disability of Employee or (ii) by Employee (including a termination
resulting from Employee's election not to renew this Agreement under Section 1.1
hereof) other than for Good Reason (as defined below) or during the Window
Period (as defined below), then the Company shall have no further obligations
hereunder or otherwise with respect to Employee's employment from and after the
termination or expiration date (except payment of Employee's Base Salary accrued
through the date of termination or expiration), and the Company shall continue
to have all other rights available hereunder (including without limitation, all
rights under Article IV hereof) at law or in equity.
(b) If the Employment Period is terminated following a Change in
Control (i) by the Company without Cause (including a termination resulting from
the Company's election not to renew this Agreement under Section 1.1 hereof) or
(ii) by Employee for Good Reason, then subject to the conditions described in
Section 3.4(d) below, Employee shall be entitled to receive the following as
Severance Pay in lieu of any amounts payable under Section 3.3: (A) two (2)
times the sum of Employee's Base Salary and Target Bonus, payable within 30 days
following the Termination Date and (B) continuation of the welfare benefits
described in Section 2.3(a) for twenty-four (24) months (the "Severance Period")
to the extent permissible under the terms of the relevant benefit plans. For
purposes of this Agreement, "Target Bonus" shall mean the greater of (x) an
amount equal to the bonus that would have been payable to Employee following the
calendar year in which the Termination Date occurs pursuant to the Company's
Executive Compensation Plan (the "Executive Plan"), based on attaining one
hundred percent (100%) of Employee's applicable target measure established
pursuant to the Executive Plan or (y) fifty percent (50%) of Base Salary. The
Target Bonus shall not be adjusted based on whether the Company anticipates
attaining such target measure as of the Termination Date, whether the target
measure is ultimately attained or whether any bonus amounts payable under the
Executive Plan would have ultimately been approved by either the Compensation
Committee or the Board.
(c) If the Employment Period is terminated following a Change in
Control by Employee for any reason or no reason during the Window Period, then
subject to the conditions described in Section 3.4(d) below, Employee shall be
entitled to receive the following as Severance Pay in lieu of any amounts
payable under Section 3.3: (i) one times the sum of Employee's Base Salary and
Target Bonus, payable within thirty (30) days following the Termination Date and
(ii) continuation of the welfare benefits described in Section 2.3(a) for twelve
(12) months (the "Severance Period") to the extent permissible under the terms
of the relevant benefit plans.
(d) Employee's right to receive any Severance Pay under Section 3.4(b)
or Section 3.4(c) above is conditioned upon (i) Employee executing and
delivering to the Company a written separation agreement and general release of
all claims, in form and substance acceptable to the Company, which shall, among
other things, contain a general release by Employee of all claims arising out of
his employment and termination of employment by the Company; (ii) Employee's
compliance with all terms of that separation agreement and general release; and
(iii) Employee's compliance with all of his obligations which survive
termination of this Agreement, including without limitation those described in
Article IV below. The Severance Pay is intended to be in lieu
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of all other payments to which Employee might otherwise be entitled in respect
of his termination without Cause. The Company shall have no further obligations
hereunder or otherwise with respect to Employee's employment from and after the
Termination Date, and the Company shall continue to have all other rights
available hereunder (including without limitation, all rights under Article IV
hereof) at law or in equity.
(e) For the purpose of this Agreement, a "Change in Control" means:
(i) the acquisition, other than from the Parent, 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) of beneficial ownership of
30% or more of the then outstanding shares of common stock of the Parent or
the combined voting power of the then outstanding voting securities of the
Parent entitled to vote generally in the election of directors; provided,
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however, that any acquisition by the Parent or any of its subsidiaries, or
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any employee benefit plan (or related trust) of the Parent or its
subsidiaries, or any corporation with respect to which, following such
acquisition, more than 50% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entities
who were the beneficial owners respectively, of the common stock and voting
securities of the Parent in substantially the same portion as their
ownership, immediately prior to such acquisition, of the then outstanding
shares of common stock of the Parent or the combined voting power of the
then outstanding voting securities of the Parent entitled to vote generally
in the election of directors as the case may be, shall not constitute a
Change in Control; or
(ii) approval by the shareholders of the Parent of a
reorganization, merger or consolidation of the Parent, in each case, with
respect to which the individuals and entities who were the respective
beneficial owners of the common stock and voting securities of the Parent
immediately prior to such reorganization, merger or consolidation do not,
following such reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 50% of, respectively, the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such
reorganization, merger or consolidation, or a complete liquidation or
dissolution of the Parent or of the sale or other disposition of all or
substantially all of the assets of the Parent.
(f) "Good Reason" shall mean without the written consent of Employee:
(i) a material change in Employee's duties or responsibilities
which results in or reflects a material diminution of the scope or
importance of Employee's position;
(ii) a reduction in Employee's Base Salary;
(iii) a material reduction in the level of Benefits available or
awarded to Employee;
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(iv) a relocation by the Company of Employee's primary
employment location to a location which is more than 50 miles from
Employee's primary employment location before the Change in Control; or
(v) any failure by the Company to comply with Section 3.5 of
this Agreement.
(g) "Window Period" shall mean the 30-day period following the first
anniversary of a Change in Control.
3.5 Special Tax Payments.
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(a) Anything in this Agreement to the contrary notwithstanding, if it
is determined that any payment or distribution by the Company to or for the
benefit of Employee, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise (any such payment or
distribution being referred to herein individually as a "Payment"), would
constitute an "excess parachute payment" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code") (or any successor
provision), the Company will pay Employee an additional amount (the "Gross-Up
Payment") such that the net amount retained by Employee after deduction of any
excise tax imposed under Section 4999 of the Code (or any successor provision),
and any Federal, state and local income, employment and excise tax imposed upon
any Gross-Up Payment shall be equal to the Payment. For purposes of determining
the amount of the Gross-Up Payment, Employee shall be deemed to pay Federal
income tax and employment taxes at the highest marginal rate of Federal income
and employment taxation in the calendar year in which the Gross-Up Payment is to
be made and state and local income taxes at the highest marginal rate of
taxation in the state and locality of Employee's residence on the Termination
Date, net of the maximum reduction in Federal income taxes that may be obtained
from the deduction of such state and local taxes.
(b) All determinations to be made under this Section 3.5 will
initially be made, at the Company's expense, by the Company's independent public
accountant immediately prior to the Change in Control (the "Accounting Firm").
The Accounting Firm shall provide detailed supporting legal authorities,
calculations and documentation both to the Company and Employee. If the
Accounting Firm makes the initial determination that no excise tax is payable by
Employee with respect to any Payment, Employee will have the right to dispute
the determination (a "Dispute") within 20 business days after receipt by
Employee of the Accounting Firm's determination and the related supporting
information. The Company will pay the Gross-Up Payment, if any, as determined by
the Accounting Firm, to Employee within five business days after Employee's
receipt of the Accounting Firm's initial determination. The existence of a
Dispute will in no way affect Employee's right to receive the Gross-Up Payment
in accordance with the Accounting Firm's initial determination. If there is no
Dispute, the Accounting Firm's initial determination will be binding, final and
conclusive upon the Company and Employee, subject in all respects, however, to
the provisions of Sections 3.5(c) and 3.5(d), below. As a result of the
uncertainty in the application of Sections 4999 and 280G of the Code, it is
possible that a Gross-Up Payment (or portion thereof) should have been made by
the
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Company and was not made (an "Underpayment"). If upon any reasonable written
request by Employee or the Company to the Accounting Firm, or upon the
Accounting Firm's own initiative, the Accounting Firm (at the Company's expense)
thereafter determines that Employee is required to make payment of any excise
tax or any additional excise tax, as the case may be, the Accounting Firm will
determine the amount of the Underpayment that has occurred and the Company will
pay any such Underpayment to Employee promptly. If (i) Employee delivers to the
Company a notice from the Internal Revenue Service stating in effect that an
excise tax is due with respect to any Payment, or (ii) Employee delivers to the
Company an opinion of tax counsel selected by Employee and acceptable to the
Company (and such acceptance may not be unreasonably withheld) that all or a
portion of a Payment is subject to excise tax and the applicable amount of
excise tax, in each case, together with a written claim based upon such notice
or such opinion that there has been an Underpayment (a "Notice of
Underpayment"), the Company will promptly, but in no event later than five
business days after receipt of the Notice of Underpayment, pay to Employee in
cash the amount of the Underpayment set forth in the Notice of Underpayment.
(c) The Company will defend, hold harmless and indemnify Employee on a
fully grossed-up after tax basis from and against any and all claims, losses,
liabilities, obligations, damages, interest, penalties, impositions,
assessments, demands, judgments, settlements, costs and expenses (including
reasonable attorneys', accountants' and experts' fees and expenses)
(collectively, "Damages") with respect to any tax liability of Employee
resulting from any Underpayment, and will promptly, but in no event later than
five business days after receipt of any reasonable notice from Employee to the
Company of any claim for Damages, pay to Employee in cash the amount of Damages
set forth in such notice.
(d) If any Underpayment or Damages are ultimately determined to be
less than the applicable amount previously paid by the Company to Employee,
Employee will promptly pay to the Company the amount of any overpayment
previously paid by the Company to Employee with respect to such purported
Underpayment or Damages.
ARTICLE IV
Restrictive Covenants
4.1 Employee's Acknowledgment. Employee acknowledges that:
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(a) the Company is and will be engaged in the Business during the
Employment Period and thereafter;
(b) Employee is one of a limited number of persons who will be
developing the Business;
(c) Employee will occupy a position of trust and confidence with the
Company after the date of this Agreement, and during such period and Employee's
employment under this Agreement, Employee will become familiar with the
Company's trade secrets and with other proprietary and confidential information
concerning the Company and the Business;
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(d) the agreements and covenants contained in this Article IV are
essential to protect the Company and the goodwill of the Business and are a
condition precedent to the Company entering into this Agreement;
(e) Employee's employment with the Company has special, unique and
extraordinary value to the Company and the Company would be irreparably damaged
if Employee were to provide services to any person or entity in violation of the
provisions of this Agreement;
(f) Employee has means to support himself and his dependents other
than by engaging in the Business, or a business similar to the Business, and the
provisions of this Article IV will not impair such ability; and
(g) for purposes of this Article IV, the term "Company" shall include
the Company, the Parent and any of their respective subsidiaries and affiliates.
4.2 Non-Compete. Employee hereby agrees that for a period commencing
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on the date hereof and ending on the Termination Date, and thereafter, through
the later of (a) the period ending on the first anniversary of the Termination
Date or (b) the period ending at the conclusion of the Severance Period
(collectively, the "Restrictive Period"), he shall not, directly or indirectly,
as employee, agent, consultant, stockholder, director, co-partner or in any
other individual or representative capacity, own, operate, manage, control,
engage in, invest in or participate in any manner in, act as a consultant or
advisor to, render services for (alone or in association with any person, firm,
corporation or entity), or otherwise assist any person or entity (other than the
Company) that engages in or owns, invests in, operates, manages or controls any
venture or enterprise that directly or indirectly engages or proposes to engage
in any element of the Business anywhere within a 100-mile radius of the Chicago
metropolitan area or within a 100-mile radius of any area (or in the event such
area is a major city, the metropolitan area relating to such city) in which the
Company on the Termination Date engages in any element of the Business (the
"Territory"); provided, however, that nothing contained herein shall be
construed to prevent Employee from investing in the stock of any competing
corporation listed on a national securities exchange or traded in the
over-the-counter market, but only if Employee is not involved in the business of
said corporation and if Employee and his associates (as such term is defined in
Regulation 14(A) promulgated under the Securities Exchange Act of 1934, as in
effect on the date hereof), collectively, do not own more than an aggregate of
3% of the stock of such corporation. With respect to the Territory, Employee
specifically acknowledges that the Company intends to expand the Business into
and throughout the United States.
4.3 Interference with Relationships. Without limiting the generality
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of the provisions of Section 4.2 hereof, Employee hereby agrees that, during the
Restrictive Period, he will not, directly or indirectly, solicit or encourage,
or participate as employee, agent, consultant, stockholder, director, partner or
in any other individual or representative capacity, in any business which
solicits or encourages (a) any person, firm, corporation or other entity which
has executed, or proposes to execute, a management services agreement or other
services agreement with the Company at any time during the term of this
Agreement, or from any successor in interest to any such person, firm,
corporation or other entity, for the purpose of securing business or contracts
related to any element of the Business, or (b) any present or future customer or
patient of the Company or any of its
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affiliated practices or facilities to terminate or otherwise alter his, her or
its relationship with the Company or such affiliated practice or facility;
provided, however, that nothing contained herein shall be construed to prohibit
or restrict Employee from soliciting business from any such parties on behalf of
the Company in performance of his duties as an employee of the Company required
under and as specifically contemplated by Section 1.2 above. In addition, at all
times from and after the Termination Date, Employee shall not contact or
communicate in any manner with any of the Employer's suppliers or vendors, or
any other third party providing services to Employer, regarding Employer or any
Employer-related matter (which suppliers, vendors or third party service
providers will include, without limitation, any third party with whom Employer
was, during the term of Employee's employment with Employer, contemplating
engaging, or negotiating with, for the future provision of products or
services).
4.4 Nonsolicitation. Other than in the performance of his duties
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hereunder, during the Restrictive Period, Employee shall not, directly or
indirectly, as employee, agent, consultant, stockholder, director, co-partner or
in any other individual or representative capacity, employ or engage, recruit or
solicit for employment or engagement, any person who is or becomes employed or
engaged by the Company or any of its affiliated practices during the Restrictive
Period, or otherwise seek to influence or alter any such person's relationship
with the Company.
4.5 Confidential Information. Other than in the performance of his
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duties hereunder, during the Restrictive Period and thereafter, Employee shall
keep secret and retain in strictest confidence, and shall not, without the prior
written consent of the Company, furnish, make available or disclose to any third
party or use for the benefit of himself or any third party, any Confidential
Information. As used in this Agreement, "Confidential Information" shall mean
any information relating to the business or affairs of the Company or the
Business, including but not limited to any technical or non-technical data,
formulae, compilations, programs, devices, methods, techniques, designs,
processes, procedures, improvements, models, manuals, financial data,
acquisition strategies and information, information relating to operating
procedures and marketing strategies, and any other proprietary information used
by the Company in connection with the Business, irrespective of its form;
provided, however, that Confidential Information shall not include any
information which is in the public domain or becomes known in the industry
through no wrongful act on the part of Employee. Employee acknowledges that the
Confidential Information is vital, sensitive, confidential and proprietary to
the Company.
4.6 Inventions and Discoveries.
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(a) Employee understands and agrees that all inventions, discoveries,
ideas, improvements, whether patentable, copyrightable or not, pertaining to the
Business of the Company or relating to the Company's actual or demonstrably
anticipated research, development or inventions (collectively, "Inventions and
Discoveries") that result from any work performed by Employee solely or jointly
with others for the Company which Employee, solely or jointly with others,
conceives, develops, or reduces to practice during the course of Employee's
employment with the Company, are the sole and exclusive property of the Company.
Employee will promptly disclose all such matters to the Company and will assist
the Company in obtaining legal protection for Inventions and Discoveries.
Employee hereby agrees on behalf of himself, his executors, legal
11
representatives and assignees that he will assign, transfer and convey to the
Company, its successors and assigns the Inventions and Discoveries.
(b) THE COMPANY AND EMPLOYEE ACKNOWLEDGE AND AGREE THAT SECTION 4.6(a)
SHALL NOT APPLY TO AN INVENTION OF EMPLOYEE FOR WHICH NO EQUIPMENT, SUPPLIES,
FACILITY OR TRADE SECRET INFORMATION OF THE COMPANY WAS USED AND WHICH WAS
DEVELOPED ENTIRELY ON EMPLOYEE'S OWN TIME, UNLESS (A) THE INVENTION RELATED (I)
TO THE BUSINESS OF THE COMPANY OR (II) TO THE COMPANY'S ACTUAL OR DEMONSTRABLY
ANTICIPATED RESEARCH OR DEVELOPMENT, OR (B) THE INVENTION RESULTS FROM ANY WORK
PERFORMED BY EMPLOYEE FOR THE COMPANY. EMPLOYEE AND THE COMPANY FURTHER
ACKNOWLEDGE AND AGREE THAT SECTION 4.6(a) SHALL NOT APPLY TO ANY INVENTIONS OR
WORK PRODUCT DEVELOPED OR VESTED BY EMPLOYEE PRIOR TO THE EFFECTIVE DATE.
(c) EMPLOYEE ACKNOWLEDGES THAT HE HAS READ THIS SECTION 4.6 AND FULLY
UNDERSTANDS THE LIMITATIONS WHICH IT IMPOSES UPON HIM AND HAS RECEIVED A
DUPLICATE COPY OF THIS AGREEMENT FOR HIS RECORDS.
4.7 Blue-Pencil. If any court of competent jurisdiction shall at any time
-----------
deem the term of this Agreement or any particular Restrictive Covenant (as
defined) too lengthy or the Territory too extensive, the other provisions of
this Article IV shall nevertheless stand, the Restrictive Period herein shall be
deemed to be the longest period permissible by law under the circumstances and
the Territory herein shall be deemed to comprise the largest territory
permissible by law under the circumstances. The court in each case shall reduce
the time period and/or Territory to permissible duration or size.
4.8 Remedies. Employee acknowledges and agrees that the covenants set
--------
forth in this Article IV (collectively, the "Restrictive Covenants") are
reasonable and necessary for the protection of the Company's business interests,
that irreparable injury will result to the Company if Employee breaches any of
the terms of said Restrictive Covenants, and that in the event of Employee's
actual or threatened breach of any such Restrictive Covenants, the Company will
have no adequate remedy at law. Employee accordingly agrees that in the event of
any actual or threatened breach by him of any of the Restrictive Covenants, the
Company shall be entitled to immediate temporary injunctive and other equitable
relief, without bond and without the necessity of showing actual monetary
damages, subject to hearing as soon thereafter as possible. Nothing contained
herein shall be construed as prohibiting the Company from pursuing any other
remedies available to it for such breach or threatened breach, including the
recovery of any damages which it is able to prove.
4.9 Covenant Not to Disparage. During the Restrictive Period and
-------------------------
thereafter, Employee shall not disparage, denigrate or derogate in any way,
directly or indirectly, any of the Company, its agents, officers, directors,
employees, parent, subsidiaries, affiliates, affiliated practices, affiliated
doctors, representatives, attorneys, executors, administrators, successors and
assigns (collectively, the "Protected Parties"), nor shall Employee disparage,
denigrate or derogate in any way, directly
12
or indirectly, his experience with any Protected Party, or any actions or
decisions made by any Protected Party.
ARTICLE V
Miscellaneous
5.1 Notices. Any notice provided for in this Agreement must be in writing
-------
and must be either (i) personally delivered, (ii) mailed by registered or
certified first class mail, prepaid with return receipt requested or (iii) sent
by a recognized overnight courier service, to the recipient at the address below
indicated:
To the Company:
NovaMed Eyecare Services, LLC
000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxxxxx, Xx.
with a copy to:
Xxxxxx Xxxxxx & Xxxxx
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
To Employee: at his home address then on file with the Company.
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 (a) on the date
such notice is personally delivered, (b) three (3) days after the date of
mailing if sent by certified or registered mail, or (c) one (1) day after the
date such notice is delivered to the overnight courier service if sent by
overnight courier.
5.2 Severability. Whenever possible, each provision of this Agreement will
------------
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
5.3 Entire Agreement. This Agreement, those documents expressly referred
----------------
to herein and other documents of even date herewith embody the complete
agreement and understanding
13
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.
5.4 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.
5.5 Successors and Assigns. This Agreement is intended to bind and inure
----------------------
to the benefit of and be enforceable by Employee and the Company and their
respective successors and permitted assigns. Employee may not assign any of his
rights or obligations hereunder without the written consent of the Company.
5.6 No Strict Construction. The language used in this Agreement will be
----------------------
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any party
hereto.
5.7 Amendments and Waivers. Any provision of this Agreement may be amended
----------------------
or waived only with the prior written consent of the Company and Employee.
5.8 Governing Law. This Agreement shall be construed and enforced in
-------------
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Agreement shall be governed by, the laws
of the State of Illinois, without giving effect to provisions thereof regarding
conflict of laws.
5.9 Income Tax Treatment. Employee and the Company acknowledge that it is
--------------------
the intention of the Company to deduct all amounts paid under this Agreement as
ordinary and necessary business expenses for income tax purposes. Employee
agrees and represents that he will treat all such amounts as ordinary income for
income tax purposes, and should he report such amounts as other than ordinary
income for income tax purposes, he will indemnify and hold the Company harmless
from and against any and all taxes, penalties, interest, costs and expenses,
including reasonable attorneys' and accounting fees and costs, which are
incurred by Company directly or indirectly as a result thereof.
5.10 CONSENT TO JURISDICTION. THE COMPANY AND EMPLOYEE HEREBY CONSENT TO
-----------------------
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF
XXXX, STATE OF ILLINOIS AND IRREVOCABLY AGREE THAT SUBJECT TO THE COMPANY'S
ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EMPLOYEE ACCEPTS FOR HIMSELF AND IN
CONNECTION WITH HIS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH THIS AGREEMENT.
14
5.11 WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE
--------------------
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF
THIS TRANSACTION AND THE RELATIONSHIP THAT IS BEING ESTABLISHED. THE PARTIES
HERETO ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT
FOR THIS WAIVER, BE REQUIRED OF THE OTHER PARTY. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, DISCRIMINATION
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE PARTIES HERETO
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. THE COMPANY AND EMPLOYEE FURTHER WARRANT AND REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER WITH THEIR RESPECTIVE LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES THEIR RESPECTIVE JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTION CONTEMPLATED
HEREBY. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
15
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
THIS AGREEMENT CONTAINS AUTOMATIC RENEWAL PROVISIONS.
COMPANY:
-------
NovaMed Eyecare Services, LLC, a Delaware
limited liability company
By: /s/ E. XXXXXXX XXXXXXX
-------------------------------------
E. Xxxxxxx Xxxxxxx
Executive Vice President Operations
EMPLOYEE:
--------
/s/ XXXXXXX X. XXXXXX
-----------------------------------------
Xxxxxxx X. Xxxxxx
16
