EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, made as of , February 10, 1996, between ProMedCo, Inc. a
Texas corporation (the "Company"), and Xxxx X. Xxxxxxx ("Executive").
In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment. The Company shall employ Executive, and Executive accepts
employment with the Company, under the terms and conditions set forth in this
Agreement for the period beginning on March 4, 1996 (or earlier if released by
present employer) and ending as provided in paragraph 4 hereof (the "Employment
Period"). The date on which Executive ceases to be employed by the Company
and/or its Subsidiaries (as defined below) or its successors or assigns is
referred to herein as the "Termination Date."
2. Position and Duties.
(a) During the Employment Period, Executive shall perform such
duties for the Company, its affiliates and its Subsidiaries as
the Company's Chief Executive Officer or other Company officer
to whom Executive reports may from time to time may direct.
Executive shall be Vice President of Managed Care for the
Company.
(b) Executive shall initially report to the Company's Chief
Operating Officer, but reporting relationship may change as
Company develops. Executive shall devote his best efforts and
his full business time and attention (except for permitted
vacation periods and reasonable periods of illness or other
incapacity) to the business and affairs of the Company, its
affiliates and its Subsidiaries. Executive shall perform his
duties and responsibilities to the best of his abilities in a
diligent, trustworthy, businesslike and efficient manner.
(c) For purposes of this Agreement, "Subsidiaries" shall mean any
corporation of which the securities having at least 50% of the
voting power in electing directors are, at the time of
determination, owned by the Company, directly or through one
or more Subsidiaries.
3. Base Salary and Benefits.
(a) During the Employment Period, Executive's base salary shall be
$100,000 per annum or such higher rate as the Compensation
Committee may designate from time to time (the "Base Salary"),
provided that the Base Salary shall be subject to annual
increases of no less than the increase in the Consumer Price
Index announced from time to time. The Base Salary shall be
payable in regular installments in accordance with the
Company's general payroll practices.
(b) The Company shall reimburse Executive for all reasonable
expenses incurred by him in the course of performing his
duties under this Agreement which are consistent with the
Company's policies in effect from time to time with respect to
travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and
documentation of such expenses.
(c) In addition to the Base Salary, the Company shall award a
bonus to Executive following the end of each fiscal year
during the Employment Period based upon the Company's
achievement of operating goals and other criteria as may be
adopted from time to time. The percentage and goals shall be
mutually agreed upon by the Company and Executive prior to
each such fiscal year.
(d) In addition to the Base Salary and any bonuses payable to
Executive pursuant to this paragraph, during the Employment
Period Executive shall be entitled to participate in all
benefit plans adopted by Company for all or a select group of
its employees, including:
(I) term life insurance, health insurance and disability
insurance coverage,
(ii) participation in a stock option program approved by
the Board of the Company granting options for an
initial 15,000 shares of Common Stock of the Company
at $6.00 per share,
(iii) annual paid vacation in accordance with Company's
policies as from time to time established.
4. Term.
(a) Unless renewed by the mutual agreement of the Company and Executive, the
Employment Period shall end on March 4, 1997, provided that (i) the
Employment Period shall terminate prior to such date upon Executive's
resignation, death or permanent disability or incapacity (as determined by
the Board in its good faith judgment) and (ii) the Employment Period may be
terminated by the Company at any time prior to such date For Cause (as
defined below) or Without Cause. The Employment Period is automatically
extended for successive years unless notice to the contrary is given not
later than ninety (90) days preceding the end of the final year of the
contract.
(b) If the Employment Period is terminated by the Company without Cause prior
to the second anniversary of the date of this Agreement. Executive shall be
entitled to receive his Base Salary, as in effect immediately prior to the
Termination Date, for a six month period, so long as Executive has not
breached the provisions of paragraphs 5, 6 and 7 hereof. The Base Salary
payments described in this paragraph 4(b) shall be payable in regular
installments in accordance with the Company's general payroll practice. The
amounts payable pursuant to this paragraph 4(b) shall be reduced by the
amount of any compensation Executive receives with respect to any other
employment or consulting during the period prior to the second anniversary
hereof. Upon request from time to time, Executive shall furnish the Company
with a true and complete certificate specifying any such compensation due
to or received by him.
(c) If the Employment Period is terminated by the Company For Cause or is
terminated as a result of Executive's resignation or normal expiration of
the Agreement, Executive shall be entitled to receive only his Base Salary
through the Termination Date.
(d) All of Executive's rights to fringe benefits and bonuses hereunder (if any)
accruing after the termination of the Employment Period shall cease upon
termination.
(e) For purposes of this Agreement, "Cause" shall mean (i) the commission of a
felony or
a crime involving moral turpitude or the commission of any other act
involving dishonesty, disloyalty or fraud with respect to the Company or
any of its Subsidiaries, (ii) conduct tending to bring the Company or any
of its Subsidiaries into substantial public disgrace or disrepute, (iii)
failure to perform duties as reasonably directed by the Company's Chief
Executive Officer or other Company Officer to whom Executive reports, (iv)
gross negligence or willful misconduct with respect to the Company or any
of its Subsidiaries, or (v) any other material breach of this Agreement,
all of the above as determined solely by the Chief Executive Officer of the
Company.
5. Confidential information. The Executive acknowledges that the information,
observations and data obtained by him while employed by the Company concerning
the business or affairs of the Company, any of its affiliates or any Subsidiary
("Confidential Information") are the property of the Company or such affiliate
or Subsidiary, as the case may be. Therefore, Executive agrees not to disclose
to any unauthorized person or use for Executive's own account any Confidential
Information without the prior written consent of the Board, 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 Executive's acts or omissions to
act. Executive shall deliver to the Company at the termination of the Employment
Period, or at any other time the Company may request, all memoranda, notes,
plans, records, reports, computer tapes and software and other documents and
data (and copies thereof) relating to the Confidential Information, Work Product
or the business of the Company, any of its affiliates or any Subsidiary which
Executive may then possess or have under his control.
6. Inventions and Patents. Executive agrees that all inventions, innovations,
improvements, developments, methods, designs, analyses, drawings, reports, and
all similar or related information which relates to the Company's or any of its
Subsidiaries' actual or anticipated business, research and development or
existing or future products or services and which are conceived, developed or
made by Executive while employed by the Company and/or its Subsidiaries ("Work
Product") belong to the Company or such Subsidiary. Executive will promptly
disclose such Work Product to the Board and perform all actions reasonably
requested by the Board (whether during or after the Employment Period) to
establish and confirm such ownership (including, without limitation,
assignments, consents, powers of attorney and other instruments).
7. Non-Compete, Non-Solicitation.
(a) Executive acknowledges that in the course of his employment with the
Company he will become familiar with the information concerning the
Company, its affiliates, Subsidiaries and its predecessors and that his
services have been and will be of special, unique and extraordinary value
to the Company. Therefore, Executive agrees that, during the Employment
Period and for the period of two years thereafter, the Executive shall not
directly or indirectly own, manage, control, participate in, consult with,
render services for, or in any manner engage in any business competing with
the business of the Company or its Subsidiaries as such businesses exist or
are in process on the date of the termination of Executive's employment,
within any geographic area in which the Company, its affiliates or its
Subsidiaries engage or plan to engage in such businesses. Nothing herein
shall prohibit Executive from being a passive owner of not more than 2% of
the outstanding stock of any class of a corporation which is publicly
traded, so long as Executive has no active participation in the business of
such corporation.
(b) During the non-compete Period, executive shall not directly or indirectly
through another entity (i) induce or attempt to induce any employee of the
Company, any of its affiliates
or any Subsidiary to leave the employ of the Company or such affiliate or
Subsidiary, or in any way interfere with the relationship between the
Company, any of its affiliates or any Subsidiary and any employee thereof,
(ii) hire any person who was an employee of the Company, any of its
affiliates or any Subsidiary at any time during the Employment Period, or
(iii) induce or attempt to induce any customer, supplier, licensee or other
business relation of the Company, any of its affiliates or any subsidiary
to cease doing business with the Company or such affiliate or Subsidiary,
or in any way interfere with the relationship between any such customer,
supplier, licensee or business relation and the Company, any of its
affiliates or any Subsidiary.
(c) If Executive is terminated by the Company Without Cause or the Company is
liquidated, the Non-compete provisions of this Agreement will also
terminate upon the Termination Date or date of liquidation.
8. Enforcement. If, at the time of enforcement of paragraph 5, 6 or 7 of this
Agreement, a court holds that the restrictions stated herein are unreasonable
under circumstances then existing, the parties hereto agree that the maximum
period, scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area. Because Executive's services
are unique and because Executive has access to Confidential Information and Work
Produce, the parties hereto agree that money damages would be an inadequate
remedy for any breach of this Agreement. Therefore, in the event of a breach or
threatened breach of this Agreement, the Company or its successors or assigns
may, in addition to other rights and remedies existing in their favor, apply to
any court of competent jurisdiction for specific performance and/or injunctive
or other relief in order to enforce, or prevent any violations of, the
previsions hereof (without posting a bond or other security).
9. Executive Representation. Executive hereby represents and warrants to the
Company that (i) the execution, delivery and performance of this Agreement by
Executive does not and will not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which Executive is a party or by which he is bound, (ii) Executive is not a
party to or bound by an employment agreement, non-compete agreement or
confidentiality agreement with any other person or entity and (iii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms.
10. Survival. Paragraphs 5, 6 and 7 shall survive and continue in full
force in accordance with their terms notwithstanding any termination of the
Employment Period, unless such termination was without cause.
11. Notices. Any notice provided for in this Agreement shall be in writing
and shall be either personally delivered, or mailed by first class mail, return
receipt requested, to the recipient at the Address indicated below:
Notice to Executive: Xxxx X. Xxxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Notices to Company: 000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
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 or mailed.
12. Severability. Whenever possible, each provision of this Agreement will be
interpreted in such a 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.
13. 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 be related to the subject matter hereof in any way.
14. Counterparts. This Agreement may be executed in separate counterparts, each
of which is deemed to be in an original and all of which taken together
constitute one and the same agreement.
15. Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive, the Company and their respective
heirs, successors and assigns, except that Executive may not assign his rights
or delegate his obligations hereunder without the prior written consent of the
Company.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Texas, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of Texas or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Texas. In furtherance of the
foregoing, the internal law of the State of Texas shall control the
interpretation and construction of this Agreement, even though under that
jurisdiction's choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily apply.
17. Amendment and Waiver. The provisions of this Agreement may be amended or
waived only with the prior written consent of the Company and Executive, and no
course of conduct or failure or delay in enforcing the provisions of this
Agreement shall affect the validity, binding effect or enforceability of this
Agreement.
18. Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
19. No Strict Construction; Interpretation. 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
person. The term "including" as used in this Agreement is used to list items by
way of example and shall not be deemed to constitute a limitation of any term or
provision contained herein. As used in this Agreement, the singular or plural
number shall be deemed to include the other whenever the context so requires.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
ProMedCo, Inc. "Executive"
By: /s/ H. XXXXX XXXXX /s/ XXXX X. XXXXXXX
H. Xxxxx Xxxxx
Its: President and Chief Executive Officer
