EXHIBIT 10.25
AMENDED EMPLOYMENT AGREEMENT
PREAMBLE
This Employment Agreement defines the essential terms and conditions of our
employment relationship with you. The subjects covered in this Agreement are
vitally important to you and to the Company. Thus, you should read the document
carefully and ask any questions before signing the Agreement. Given the
importance of these matters to you and the Company, all employees shall sign the
Agreement as a condition of employment.
This EMPLOYMENT AGREEMENT, dated and effective this 4th day of August 2005
is entered into by and between Hill-Rom, Inc. ("Company") and Xxx Xxxxx
("Employee").
WITNESSETH:
WHEREAS, the Company and its affiliated entities are engaged in the
healthcare industry throughout the United States and abroad including, but not
limited to, the design, manufacture, sale, service and rental of hospital beds
and stretchers, hospital furniture, medical-related architectural products,
specialty sleep surfaces (including therapeutic surfaces), air clearing devices,
biomedical and asset management services, as well as other medical-related
accessories, devices and products;
WHEREAS, the Company is willing to employ Employee in an executive or
managerial position and Employee desires to be employed by the Company in such
capacity based upon the terms and conditions set forth in this Agreement;
WHEREAS, in the course of the employment contemplated under this Agreement
and as a continuation of Employee's past employment with the Company, it will be
necessary for Employee to acquire and maintain knowledge of certain trade
secrets and other confidential and proprietary information regarding the Company
as well as any of its parent, subsidiary and/or affiliated entities (hereinafter
jointly referred to as the "Companies"); and
WHEREAS, the Company and Employee (collectively referred to as the
"Parties") acknowledge and agree that the execution of this Agreement is
necessary to memorialize the terms and conditions of their employment
relationship as well as safeguard against the unauthorized disclosure or use of
the Company's confidential information and to otherwise preserve the goodwill
and ongoing business value of the Company;
NOW THEREFORE, in consideration of Employee's employment, the Company's
willingness to disclose certain confidential and proprietary information to
Employee and the mutual covenants contained herein as well as other good and
valuable consideration, the receipt of which is hereby acknowledged, the Parties
agree as follows:
1. Employment. As of the effective date of this Agreement, the Company agrees
to employ Employee as, and Employee agrees to serve as, Vice President,
Strategy and Shared Services. Employee agrees to perform all duties and
responsibilities traditionally assigned to, or falling within the normal
responsibilities of, an individual employed in the above-referenced
position. Employee also agrees to
perform any and all additional duties or responsibilities as may be
assigned by the Company in its sole discretion. The Parties acknowledge
that both this title and the underlying duties may change.
2. Best Efforts and Duty of Loyalty. During the term of employment with the
Company, Employee covenants and agrees to exercise reasonable efforts to
perform all assigned duties in a diligent and professional manner and in
the best interest of the Company. Employee agrees to devote his full
working time, attention, talents, skills and best efforts to further the
Company's business and agrees not to take any action, or make any omission,
that deprives the Company of any business opportunities or otherwise act in
a manner that conflicts with the best interest of the Company or is
otherwise detrimental to its business. Employee agrees not to engage in any
outside business activity, whether or not pursued for gain, profit or other
pecuniary advantage, without the express written consent of the Company.
Employee shall act at all times in accordance with the Xxxxxxxxxxx
Industries, Inc. Code of Ethical Business Conduct, and all other applicable
policies which may exist or be adopted by the Company from time to time.
3. At-Will Employment. Subject to the terms and conditions set forth below,
Employee specifically acknowledges and accepts such employment on an
"at-will" basis and agrees that both Employee and the Company retain the
right to terminate this relationship at any time, with or without cause,
for any reason not prohibited by applicable law upon proper notice.
Employee acknowledges that nothing in this Agreement is intended to create,
nor should be interpreted to create, an employment contract for any
specified length of time between the Company and Employee.
4. Compensation. For all services rendered by Employee on behalf of, or at the
request of, the Company, Employee shall be paid as follows:
(a) A base salary at the bi-weekly rate of Seven Thousand Six Hundred
Ninety-two Dollars and Thirty-one Cents ($7,692.31), less usual and
ordinary deductions;
(b) Incentive compensation, payable solely at the discretion of the
Company, pursuant to the Company's existing Incentive Compensation
Program or any other program as the Company may establish in its sole
discretion; and
(c) Such additional compensation, benefits and perquisites as the Company
may deem appropriate including, without limitation, those set forth in
the letter from the Company's CEO dated July 28, 2005 and the terms of
which shall be incorporated herein by reference to the extent not
inconsistent with the provisions of this Agreement.
5. Changes to Compensation. Notwithstanding anything contained herein to the
contrary, Employee acknowledges that the Company specifically reserves the
right to make changes to Employee's compensation in its sole discretion
including, but not limited to, modifying or eliminating a compensation
component. The Parties agree that such changes shall be deemed effective
immediately and a modification of this Agreement unless, within seven (7)
days after receiving notice of such change, Employee exercises his right to
terminate this Agreement without cause or for "Good Reason" as provided
below in Paragraph No. 11. The Parties anticipate that Employee's
compensation structure will be reviewed on an annual basis but acknowledge
that the Company shall have no obligation to do so.
6. Direct Deposit. As a condition of employment, and within thirty (30) days
of the effective date of this Agreement, Employee agrees to make all
necessary arrangements to have all sums paid pursuant to this Agreement
direct deposited into one or more bank accounts as designated by Employee.
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7. Warranties and Indemnification. Employee warrants that he is not a party to
any contract, restrictive covenant, or other agreement purporting to limit
or otherwise adversely affecting his ability to secure employment with any
third party. Alternatively, should any such agreement exist, Employee
warrants that the contemplated services to be performed hereunder will not
violate the terms and conditions of any such agreement. In either event,
Employee agrees to fully indemnify and hold the Company harmless from any
and all claims arising from, or involving the enforcement of, any such
restrictive covenants or other agreements.
8. Restricted Duties. Employee agrees not to disclose, or use for the benefit
of the Company, any confidential or proprietary information belonging to
any predecessor employer(s) that otherwise has not been made public and
further acknowledges that the Company has specifically instructed him not
to disclose or use such confidential or proprietary information. Based on
his understanding of the anticipated duties and responsibilities hereunder,
Employee acknowledges that such duties and responsibilities will not compel
the disclosure or use of any such confidential and proprietary information.
9. Termination Without Cause. The Parties agree that either party may
terminate this employment relationship at any time, without cause, upon
sixty (60) days' advance written notice or, if terminated by the Company,
pay in lieu of notice. In such event, Employee shall only be entitled to
such compensation, benefits and perquisites that have been paid or fully
accrued as of the effective date of his separation and as otherwise
explicitly set forth in this Agreement.
10. Termination With Cause. Employee's employment may be terminated by the
Company at any time "for cause" without notice or prior warning. For
purposes of this Agreement, "cause" shall mean the Company's good faith
determination that Employee has:
(a) Failed, refused or otherwise been deemed unable to fully and timely
comply with the terms and conditions of this Agreement, specifically
including any reasonable instructions or orders issued by the Company,
provided such non-compliance is not based primarily on Employee's good
faith compliance with applicable legal or ethical standards;
(b) Acquiesced or participated in any conduct that is dishonest,
fraudulent, illegal (at the felony level), unethical, involves moral
turpitude or is otherwise illegal and involves conduct that has the
potential, in the Company's reasonable opinion, to cause the Company,
it officers or its directors embarrassment or ridicule;
(c) Violated any Company policy or procedure, specifically including a
violation of Xxxxxxxxxxx Industries, Inc.'s Code of Ethical Business
Conduct or Associate Policy Manual;
(d) Disclosed without proper authorization any trade secrets or other
Confidential Information (as defined herein);
(e) Engaged in any act that, in the reasonable opinion of the Company, is
contrary to its best interests or would hold the Company, its officers
or directors up to probable civil or criminal liability, provided
that, if Employee acts in good faith in compliance with applicable
legal or ethical standards, such actions shall not be grounds for
termination for cause; or
(f) Engaged in such other conduct recognized at law as constituting cause.
Upon the occurrence or discovery of any event specified above, the Company
shall have the right to terminate Employee's employment, effective
immediately, by providing notice thereof to Employee
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without further obligation to him, other than accrued wages or other
accrued wages, deferred compensation or other accrued benefits of
employment (collectively referred to herein as "Accrued Obligations"),
which shall be paid in accordance with the Company's past practice and
applicable law. To the extent any violation of this Paragraph is capable of
being promptly cured by Employee (or cured within a reasonable period to
the Company's satisfaction), the Company agrees to provide Employee with a
reasonable opportunity to so cure such defect. Absent mutual agreement, the
Parties agree in advance that it is not possible for Employee to cure any
violations of sub-paragraph (b) or (d) and, therefore, no opportunity for
cure need be provided in those circumstances.
11. Termination by Employee for Good Reason. Employee may terminate this
Agreement and declare that this Agreement to have been terminated "without
cause" by the Company (and, therefore, for "Good Reason") upon the
occurrence, without Employee's consent, of any of the following
circumstances:
(a) The assignment to Employee of duties lasting more than sixty (60) days
that are materially inconsistent with Employee's then current position
or a material change in his reporting relationship to the CEO or his
successor;
(b) The failure to elect or reelect Employee as Vice President or other
officer of the Company (unless such failure is related in any way to
the Company's decision to terminate Employee for cause);
(c) The failure of the Company to continue to provide Employee with office
space, related facilities and support personnel (including, but not
limited to, administrative and secretarial assistance) within the
Company's principal executive offices commensurate with his
responsibilities to, and position within, the Company;
(d) A reduction by the Company in the amount of Employee's base salary or
the discontinuation or reduction by the Company of Employee's
participation at the same level of eligibility as compared to other
peer employees in any incentive compensation, additional compensation,
benefits, policies or perquisites subject to Employee's understanding
that such reduction(s) shall be permissible if the change applies in a
similar way to other peer level employees;
(e) The relocation of the Company's principal executive offices or
Employee's place of work to a location requiring an increase of more
than fifty (50) miles in Employee's daily commute; or
(f) A failure by the Company to perform its obligations under this
Employment Agreement.
12. Termination Due to Death or Disability. In the event Employee dies or
suffers a disability (as defined herein) during the term of employment,
this Agreement shall automatically be terminated on the date of such death
or disability without further obligation on the part of the Company other
than the payment of Accrued Obligations. For purposes of this Agreement,
Employee shall be considered to have suffered a "disability" upon a
determination that Employee cannot perform the essential functions of his
position as a result of a such a disability and the occurrence of one or
more of the following events:
(a) Employee becomes eligible for or receives any benefits pursuant to any
disability insurance policy as a result of a determination under such
policy that Employee is permanently disabled;
(b) Employee becomes eligible for or receives any disability benefits
under the Social Security Act; or
(c) A good faith determination by the Company that Employee is and will
likely remain unable to perform the essential functions of his duties
or responsibilities hereunder on a full-time basis, with or without
reasonable accommodation, as a result of any mental or physical
impairment.
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Notwithstanding anything expressed or implied above to the contrary, the
Company agrees to fully comply with its obligations under the Americans
with Disabilities Act as well as any other applicable federal, state, or
local law, regulation, or ordinance governing the protection of individual
with such disabilities as well as the Company's obligation to provide
reasonable accommodation thereunder.
13. Exit Interview. Upon termination of Employee's employment for any reason,
Employee agrees, if requested, to participate in an exit interview with the
Company and reaffirm in writing his post-employment obligations as set
forth in this Agreement
14. Section 409A Notification. Employee acknowledges that he has been advised
of the American Jobs Creation Act of 2004, which added Section 409A to the
Internal Revenue Code, and significantly changed the taxation of
nonqualified deferred compensation plans. Under regulations not yet
published as of the date of this Agreement, Employee has been advised that,
if he is determined to be a "key employee," as defined by Section 409A or
any similar law, his severance pay and other termination benefits may be
treated by the Internal Revenue Service as providing "nonqualified deferred
compensation," and therefore subject to Section 409A. In that event,
several provisions in Section 409A may affect Employee's receipt of
severance compensation, including the timing thereof. These include, but
are not limited to, a provision which requires that distributions to "key
employees" at public companies on account of separation from service may
not be made earlier than six (6) months after the effective date of
separation. If applicable, failure to comply with Section 409A can lead to
immediate taxation of such deferrals, with interest and a 20% penalty. As a
result of the requirements imposed by the American Jobs Creation Act of
2004, Employee agrees if he is covered by the provisions of Section 409A or
any similar law at the time of his termination and if severance payments
are covered as "nonqualified deferred compensation" or otherwise not
exempt, any severance pay (and other benefits to the extent applicable) due
Employee at time of termination shall not be paid until a date at least six
(6) months after Employee's Effective Termination Date.
15. Section 409A Acknowledgement. Employee acknowledges that, notwithstanding
anything contained herein to the contrary, both Parties shall be
independently responsible for accessing their own risks and liabilities
under Section 409A that may be associated with any payment made under the
terms of this Agreement or any other arrangement which may be deemed to
trigger Section 409A. Further, the Parties agree that each shall
independently bear responsibility for any and all taxes, penalties or other
tax obligations as may be imposed upon them in their individual capacity as
a matter of law. To the extent applicable, Employee understands and agrees
that he shall have the responsibility for, and he agrees to pay, any and
all appropriate income tax or other tax obligations for which he is
individually responsible and/or related to receipt of any benefits provided
in this Agreement not subject to federal withholding obligations. Employee
agrees to fully indemnify and hold the Company harmless for any taxes,
penalties, interest, cost or attorneys' fee assessed against or incurred by
the Company on account of such benefits having been provided to him or
based on any alleged failure to withhold taxes or satisfy any claimed
obligation. Employee understands and acknowledges that neither the Company,
nor any of its employees, attorneys, or other representatives has provided
or will provide him with any legal or financial advice concerning taxes or
any other matter, and that he has not relied on any such advice in deciding
whether to enter into this Agreement.
16. Severance. In the event Employee's employment is terminated by the Company
without cause, and subject to the normal terms and conditions imposed by
the Company as set forth herein and in the attached Separation and Release
Agreement, Employee shall be eligible to receive severance pay based upon
his base salary at the time of termination for a period determined in
accordance with any guidelines as may be established by the Company or for
a period up to twelve (12) months (whichever is longer).
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17. Enhanced Severance. In lieu of the above severance or any other severance
as may be offered by the Company, Employee shall be eligible for an
"Enhanced Severance Plan" for a period commencing on the date hereof and
continuing for a period of two (2) years following the election by the
Board of Directors of a successor for Xxxx X. Xxxxxxx as Chief Executive
Officer of Xxxxxxxxxxx Industries Inc. (hereinafter, the "Election Date").
Specifically, in the event Employee's employment is terminated by the
Company "without cause" or by Employee for "Good Reason" (as those terms
are defined above), within two (2) years following the Election Date,
Employee shall be eligible to receive severance pay based upon his base
salary at the time of termination in accordance with any guidelines as may
be subsequently established by the Company or for the period described
below (whichever is longer).
NUMBER OF MONTHS FOLLOWING THE ELECTION DATE ELIGIBLE NUMBER OF WEEKS OF SEVERANCE
-------------------------------------------- -------------------------------------
1-12 months 104 weeks
13 months 92 weeks
14 months 88 weeks
15 months 84 weeks
16 months 80 weeks
17 months 76 weeks
18 months 72 weeks
19 months 68 weeks
20 months 64 weeks
21 months 60 weeks
22 months 56 weeks
23 months 52 weeks
24 months 52 weeks
25 months and thereafter 52 weeks
18. Severance Payment Terms and Conditions. No severance pay shall be paid if
Employee voluntarily leaves the Company's employ without "Good Reason" (as
defined above) or is terminated for cause. Any severance pay made payable
under this Agreement shall be paid in lieu of, and not in addition to, any
other contractual, notice or statutory pay or other accrued compensation
obligation (excluding accrued wages and deferred compensation).
Additionally, such severance pay is contingent upon Employee fully
complying with the restrictive covenants contained herein and executing a
Separation and Release Agreement in a form not substantially different from
that attached as Exhibit A. Further, the Company's obligation to provide
severance hereunder shall be deemed null and void should Employee fail or
refuse to execute such standard Separation and Release Agreement (without
modification) within any time period as may be prescribed by law or, in
absence thereof, twenty-one (21) days. Any severance payable under the
terms of this Agreement shall be paid in accordance with the requirements
of Section 409A subject to all other applicable terms and conditions set
forth in this Agreement. Specifically, Employee will receive a lump sum
payment equivalent to six (6) months' severance on the day after the 6th
month anniversary of his termination with the balance to be paid in
bi-weekly installments commencing upon the next regularly scheduled payroll
date. Notwithstanding any other provision contained herein to the contrary,
any severance pay benefits paid pursuant to this Agreement shall not be
subject to termination upon reemployment (however, all other severance
benefits, e.g., continued healthcare, shall cease).
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19. Assignment of Rights.
(a) Copyrights. Employee agrees that all works of authorship fixed in any
tangible medium of expression by him during the term of this Agreement
relating to the Company's business ("Works"), either solely or jointly
with others, shall be and remain exclusively the property of the
Company. Each such Work created by Employee is a "work made for hire"
under the copyright law and the Company may file applications to
register copyright in such Works as author and copyright owner
thereof. If, for any reason, a Work created by Employee is excluded
from the definition of a "work made for hire" under the copyright law,
then Employee does hereby assign, sell, and convey to the Company the
entire rights, title, and interests in and to such Work, including the
copyright therein, to the Company. Employee will execute any documents
that the Company deems necessary in connection with the assignment of
such Work and copyright therein. Employee will take whatever steps and
do whatever acts the Company requests, including, but not limited to,
placement of the Company's proper copyright notice on Works created by
Employee to secure or aid in securing copyright protection in such
Works and will assist the Company or its nominees in filing
applications to register claims of copyright in such Works. The
Company shall have free and unlimited access at all times to all Works
and all copies thereof and shall have the right to claim and take
possession on demand of such Works and copies.
(b) Inventions. Employee agrees that all discoveries, concepts, and ideas,
whether patentable or not, including, but not limited to, apparatus,
processes, methods, compositions of matter, techniques, and formulae,
as well as improvements thereof or know-how related thereto, relating
to any present or prospective product, process, or service of the
Company ("Inventions") that Employee conceives or makes during the
term of this Agreement relating to the Company's business, shall
become and remain the exclusive property of the Company, whether
patentable or not, and Employee will, without royalty or any other
consideration:
(i) Inform the Company promptly and fully of such Inventions by
written reports, setting forth in detail the procedures employed
and the results achieved;
(ii) Assign to the Company all of his rights, title, and interests in
and to such Inventions, any applications for United States and
foreign Letters Patent, any United States and foreign Letters
Patent, and any renewals thereof granted upon such Inventions;
(iii) Assist the Company or its nominees, at the expense of the
Company, to obtain such United States and foreign Letters Patent
for such Inventions as the Company may elect; and
(iv) Execute, acknowledge, and deliver to the Company at the Company's
expense such written documents and instruments, and do such other
acts, such as giving testimony in support of his inventorship, as
may be necessary in the opinion of the Company, to obtain and
maintain United States and foreign Letters Patent upon such
Inventions and to vest the entire rights and title thereto in the
Company and to confirm the complete ownership by the Company of
such Inventions, patent applications, and patents.
20. Company Property. All records, files, drawings, documents, data in whatever
form, business equipment (including computers, PDAs, cell phones, etc.),
and the like relating to, or provided by, the Company shall be and remain
the sole property of the Company. Upon termination of employment, Employee
shall immediately return to the Company all such items without retention of
any copies and without additional request by the Company. De minimis items
such as pay stubs, 401(k) plan summaries, employee bulletins, and the like
are excluded from this requirement.
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21. Confidential Information. Employee acknowledges that the Company and its
affiliated entities (herein collectively referred to as "Companies")
possess certain trade secrets as well as other confidential and proprietary
information which they have acquired or will acquire at great effort and
expense. Such information may include, without limitation, confidential
information, whether in tangible or intangible form, regarding the
Companies' products and services, marketing strategies, business plans,
operations, costs, current or prospective customer information (including
customer identities, contacts, requirements, creditworthiness, preferences,
and like matters), product concepts, designs, prototypes or specifications,
research and development efforts, technical data and know-how, sales
information, including pricing and other terms and conditions of sale,
financial information, internal procedures, techniques, forecasts, methods,
trade information, trade secrets, software programs, project requirements,
inventions, trademarks, trade names, and similar information regarding the
Companies' business(es) (collectively referred to herein as "Confidential
Information"). Employee further acknowledges that, as a result of his
employment with the Company, Employee will have access to, will become
acquainted with, and/or may help develop, such Confidential Information.
Confidential Information shall not include information readily available in
the public through no fault of Employee or other wrong doing.
22. Restricted Use of Confidential Information. Employee agrees that all
Confidential Information is and shall remain the sole and exclusive
property of the Company and/or its affiliated entities. Except as may be
expressly authorized by the Company in writing, Employee agrees not to
disclose, or cause any other person or entity to disclose, any Confidential
Information to any third party while employed by the Company and for as
long thereafter as such information remains confidential (or as limited by
applicable law). Further, Employee agrees to use such Confidential
Information only in the course of Employee's duties in furtherance of the
Company's business and agrees not to make use of any such Confidential
Information for Employee's own purposes or for the benefit of any other
entity or person.
23. Acknowledged Need for Limited Restrictive Covenants. Employee acknowledges
that the Companies have spent and will continue to expend substantial
amounts of time, money and effort to develop their business strategies,
Confidential Information, customer identities and relationships, goodwill
and employee relationships, and that Employee will benefit from these
efforts. Further, Employee acknowledges the inevitable use of, or
near-certain influence by his knowledge of, the Confidential Information
disclosed to Employee during the course of employment if allowed to compete
against the Company in an unrestricted manner and that such use would be
unfair and extremely detrimental to the Company. Accordingly, based on
these legitimate business reasons, Employee acknowledges each of the
Companies' need to protect their legitimate business interests by
reasonably restricting Employee's ability to compete with the Company on a
limited basis.
24. Non-Solicitation. During Employee's employment and for a period of eighteen
(18) months thereafter, Employee agrees not to directly or indirectly
engage in the following prohibited conduct:
(a) Solicit, offer products or services to, or accept orders for, any
Competitive Products or otherwise transact any competitive business
with, any customer or entity with whom Employee had contact or
transacted any business on behalf of the Company (or any Affiliate
thereof) during the eighteen (18) month period preceding Employee's
date of separation or about whom Employee possessed, or had access to,
confidential and proprietary information;
(b) Attempt to entice or otherwise cause any third party to withdraw,
curtail or cease doing business with the Company (or any Affiliate
thereof), specifically including customers, vendors, independent
contractors and other third party entities;
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(c) Disclose to any person or entity the identities, contacts or
preferences of any customers of the Company (or any Affiliate
thereof), or the identity of any other persons or entities having
business dealings with the Company (or any Affiliate thereof);
(d) Induce any individual who has been employed by or had provided
services to the Company (or any Affiliate thereof) within the six (6)
month period immediately preceding the effective date of Employee's
separation to terminate such relationship with the Company (or any
Affiliate thereof);
(e) Assist, coordinate or otherwise offer employment to, accept employment
inquiries from, or employ any individual who is or had been employed
by the Company (or any Affiliate thereof) at any time within the six
(6) month period immediately preceding such offer, or inquiry;
(f) Communicate or indicate in any way to any customer of the Company (or
any Affiliate thereof), prior to formal separation from the Company,
any interest, desire, plan, or decision to separate from the Company;
or
(g) Otherwise attempt to directly or indirectly interfere with the
Company's business, the business of any of the Companies or their
relationship with their employees, consultants, independent
contractors or customers.
25. Limited Non-Compete. For the above-stated reasons, and as a condition of
employment to the fullest extent permitted by law, Employee agrees during
the Relevant Non-Compete Period not to directly or indirectly engage in the
following competitive activities:
(a) Employee shall not have any ownership interest in, work for, advise,
consult, or have any business connection or business or employment
relationship in any competitive capacity with any Competitor unless
Employee provides written notice to the Company of such relationship
prior to entering into such relationship and, further, provides
sufficient written assurances to the Company's satisfaction that such
relationship will not, jeopardize the Company's legitimate interests
or otherwise violate the terms of this Agreement;
(b) Employee shall not engage in any research, development, production,
sale or distribution of any Competitive Products, specifically
including any products or services relating to those for which
Employee had responsibility for the eighteen (18) month period
preceding Employee's date of separation;
(c) Employee shall not market, sell, or otherwise offer or provide any
Competitive Products within his Geographic Territory (if applicable)
or Assigned Customer Base, specifically including any products or
services relating to those for which Employee had responsibility for
the eighteen (18) month period preceding Employee's date of
separation; and
(d) Employee shall not distribute, market, sell or otherwise offer or
provide any Competitive Products to any customer of the Company with
whom Employee had contact or for which Employee had responsibility at
any time during the eighteen (18) month period preceding Employee's
date of separation
26. Non-Compete Definitions. For purposes of this Agreement, the Parties agree
that the following terms shall apply:
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(a) "Assigned Customer Base" shall include all accounts or customers
formally assigned to Employee within a given territory or geographical
area or contacted by him at any time during the eighteen (18) month
period preceding Employee's date of separation;
(b) "Competitive Products" shall include any product or service that
directly or indirectly competes with, is substantially similar to, or
serves as a reasonable substitute for, any product or service in
research, development or design, or manufactured, produced, sold or
distributed by the Company;
(c) "Competitor" shall include any person or entity that offers or is
actively planning to offer any Competitive Products and may include
(but not be limited to) any entity identified on the Company's
Illustrative Competitor List, attached hereto as Exhibit B, which
shall be amended from time to time to reflect changes in the Company's
business and competitive environment (updated competitor lists will be
provided to Employee upon reasonable request);
(d) "Geographic Territory" shall include any territory formally assigned
to Employee as well as all territories in which Employee has provided
any services, sold any products or otherwise had responsibility at any
time during the eighteen (18) month period preceding Employee's date
of separation;
(e) "Relevant Non-Compete Period" shall include the period of Employee's
employment with the Company as well as a period of eighteen (18)
months after such employment is terminated, regardless of the reason
for such termination provided, however, that this period shall be
reduced to the greater of (i) nine (9) months or (ii) the total length
of Employee's employment with the Company, including employment with
any parent, subsidiary or affiliated entity, if such employment is
less than eighteen (18) months;
(f) "Directly or indirectly" shall be construed such that the foregoing
restrictions shall apply equally to Employee whether performed
individually or as a partner, shareholder, officer, director, manager,
employee, salesman, independent contractor, broker, agent, or
consultant for any other individual, partnership, firm, corporation,
company, or other entity engaged in such conduct
27. Consent to Reasonableness. In light of the above-referenced concerns,
including Employee's knowledge of and access to the Companies' Confidential
Information, Employee acknowledges that the terms of the foregoing
restrictive covenants are reasonable and necessary to protect the Company's
legitimate business interests and will not unreasonably interfere with
Employee's ability to obtain alternate employment. As such, Employee hereby
agrees that such restrictions are valid and enforceable, and affirmatively
waives any argument or defense to the contrary. Employee acknowledges that
this limited non-competition provision is not an attempt to prevent
Employee from obtaining other employment in violation of IC Section
22-5-3-1 or any other similar statute. Employee further acknowledges that
the Company may need to take action, including litigation, to enforce this
limited non-competition provision, which efforts the Parties stipulate
shall not be deemed an attempt to prevent Employee from obtaining other
employment.
28. Survival of Restrictive Covenants. Employee acknowledges that the above
restrictive covenants shall survive the termination of this Agreement and
the termination of Employee's employment for any reason. Employee further
acknowledges that any alleged breach by the Company of any contractual,
statutory or other obligation shall not excuse or terminate the obligations
hereunder or otherwise preclude the Company from seeking injunctive or
other relief. Rather, Employee acknowledges that such obligations are
independent and separate covenants undertaken by Employee for the benefit
of the Company.
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29. Effect of Transfer. Subject to the provisions of Paragraph 11 above,
Employee agrees that this Agreement shall continue in full force and effect
notwithstanding any change in job duties, job titles or reporting
responsibilities. Employee further acknowledges that the above restrictive
covenants shall survive, and be extended to cover, the transfer of Employee
from the Company to its parent, subsidiary, sister corporation or any other
affiliated entity (hereinafter collectively referred to as an "Affiliate")
or any subsequent transfer(s) among them. Specifically, in the event of
Employee's temporary or permanent transfer to an Affiliate, he agrees that
the foregoing restrictive covenants shall remain in force so as to continue
to protect such company for the duration of the non-compete period,
measured from his effective date of transfer to an Affiliate. Additionally,
Employee acknowledges that this Agreement shall be deemed to have been
automatically assigned to the Affiliate as of his effective date of
transfer such that the above-referenced restrictive covenants (as well as
all other terms and conditions contained herein) shall be construed
thereafter to protect the legitimate business interests and goodwill of the
Affiliate as if Employee and the Affiliate had independently entered into
this Agreement. Employee's acceptance of his transfer to, and subsequent
employment by, the Affiliate shall serve as consideration for (as well as
be deemed as evidence of his consent to) the assignment of this Agreement
to the Affiliate as well as the extension of such restrictive covenants to
the Affiliate. Employee agrees that this provision shall apply with equal
force to any subsequent transfers of Employee from one Affiliate to another
Affiliate.
30. Post-Termination Notification. For the duration of his Relevant Non-compete
Period or other restrictive covenant period, which ever is longer, Employee
agrees to promptly notify the Company no later than five (5) business days
of his acceptance of any employment or consulting engagement. Such notice
shall include sufficient information to ensure Employee compliance with his
non-compete obligations and must include at a minimum the following
information: (i) the name of the employer or entity for which he is
providing any consulting services; (ii) a description of his intended
duties as well as (iii) the anticipated start date. Such information is
required to ensure Employee's compliance with his non-compete obligations
as well as all other applicable restrictive covenants. Failure to timely
provide such notice shall be deemed a material breach of this Agreement and
entitle the Company to return of any severance paid to Employee plus
attorneys' fees. Employee further consents to the Company's notification to
any new employer of Employee's rights and obligations under this Agreement.
31. Scope of Restrictions. If the scope of any restriction contained in any
preceding paragraphs of this Agreement is deemed too broad to permit
enforcement of such restriction to its fullest extent, then such
restriction shall be enforced to the maximum extent permitted by law, and
Employee hereby consents and agrees that such scope may be judicially
modified accordingly in any proceeding brought to enforce such restriction.
32. Specific Enforcement/Injunctive Relief. Employee agrees that it would be
difficult to measure any damages to the Company from a breach of the
above-referenced restrictive covenants, but acknowledges that the potential
for such damages would be great, incalculable and irremediable, and that
monetary damages alone would be an inadequate remedy. Accordingly, Employee
agrees that the Company shall be entitled to immediate injunctive relief
against such breach, or threatened breach, in any court having
jurisdiction. In addition, if Employee violates any such restrictive
covenant, Employee agrees that the period of such violation shall be added
to the term of the restriction. In determining the period of any violation,
the Parties stipulate that in any calendar month in which Employee engages
in any activity in violation of such provisions, Employee shall be deemed
to have violated such provision for the entire month, and that month shall
be added to the duration of the non-competition provision. Employee
acknowledges that the remedies described above shall not be the exclusive
remedies, and the Company may seek any other remedy available to it either
in law or in equity, including, by way of example only, statutory remedies
for misappropriation of trade
11
secrets, and including the recovery of compensatory or punitive damages.
Employee further agrees that the Company shall be entitled to an award of
all costs and attorneys' fees incurred by it in any attempt to enforce the
terms of this Agreement.
33. Publicly Traded Stock. The Parties agree that nothing contained in this
Agreement shall be construed to prohibit Employee from investing his
personal assets in any stock or corporate security traded or quoted on a
national securities exchange or national market system provided, however,
such investments do not require any services on the part of Employee in the
operation or the affairs of the business or otherwise violate the
Xxxxxxxxxxx Industries, Inc. Code of Ethical Business Conduct.
34. Notice of Claim and Contractual Limitations Period. Employee acknowledges
the Company's need for prompt notice, investigation, and resolution of any
claims that may be filed against it due to the number of relationships it
has with employees and others (and due to the turnover among such
individuals with knowledge relevant to any underlying claim). Accordingly,
Employee agrees prior to initiating any litigation of any type (including,
but not limited to, employment discrimination litigation, wage litigation,
defamation, or any other claim) to notify the Company, within One Hundred
and Eighty (180) days after the claim accrued, by sending a certified
letter addressed to the Company's General Counsel setting forth: (i)
claimant's name, address, and phone; (ii) the name of any attorney
representing Employee; (iii) the nature of the claim; (iv) the date the
claim arose; and (v) the relief requested. This provision is in addition to
any other notice and exhaustion requirements that might apply. For any
dispute or claim of any type against the Company (including but not limited
to employment discrimination litigation, wage litigation, defamation, or
any other claim), Employee must commence legal action within the shorter of
one (1) year of accrual of the cause of action or such shorter period that
may be specified by law.
35. Non-Jury Trials. Notwithstanding any right to a jury trial for any claims,
Employee waives any such right to a jury trial, and agrees that any claim
of any type (including but not limited to employment discrimination
litigation, wage litigation, defamation, or any other claim) lodged in any
court will be tried, if at all, without a jury.
36. Choice of Forum. Employee acknowledges that the Companies are primarily
based in Indiana, and Employee understands and acknowledges the Company's
desire and need to defend any litigation against it in Indiana.
Accordingly, the Parties agree that any claim of any type brought by
Employee against the Company or any of its employees or agents must be
maintained only in a court sitting in Xxxxxx County, Indiana, or Xxxxxx
County, Indiana, or, if a federal court, the Southern District of Indiana,
Indianapolis Division. Employee further understands and acknowledges that
in the event the Company initiates litigation against Employee, the Company
may need to prosecute such litigation in such state where the Employee is
subject to personal jurisdiction. Accordingly, for purposes of enforcement
of this Agreement, Employee specifically consents to personal jurisdiction
in the State of Indiana as well as any state in which resides a customer
assigned to the Employee. Furthermore, Employee consents to appear, upon
Company's request and at Employee's own cost, for deposition, hearing,
trial, or other court proceeding in Indiana or in any state in which
resides a customer assigned to the Employee.
37. Choice of Law. This Agreement shall be deemed to have been made within the
County of Xxxxxx, State of Indiana and shall be interpreted and construed
in accordance with the laws of the State of Indiana. Any and all matters of
dispute of any nature whatsoever arising out of, or in any way connected
with the interpretation of this Agreement, any disputes arising out of the
Agreement or the employment relationship between the Parties hereto, shall
be governed by, construed by and enforced in accordance with the laws of
the State of Indiana without regard to any applicable state's choice of law
provisions.
12
38. Titles. Titles are used for the purpose of convenience in this Agreement
and shall be ignored in any construction of it.
39. Severability. The Parties agree that each and every paragraph, sentence,
clause, term and provision of this Agreement is severable and that, in the
event any portion of this Agreement is adjudged to be invalid or
unenforceable, the remaining portions thereof shall remain in effect and be
enforced to the fullest extent permitted by law. Further, should any
particular clause, covenant, or provision of this Agreement be held
unreasonable or contrary to public policy for any reason, the Parties
acknowledge and agree that such covenant, provision or clause shall
automatically be deemed modified such that the contested covenant,
provision or clause will have the closest effect permitted by applicable
law to the original form and shall be given effect and enforced as so
modified to whatever extent would be reasonable and enforceable under
applicable law.
40. Assignment-Notices. The rights and obligations of the Company under this
Agreement shall inure to its benefit, as well as the benefit of its parent,
subsidiary, successor and affiliated entities, and shall be binding upon
the successors and assigns of the Company. This Agreement, being personal
to Employee, cannot be assigned by Employee, but his personal
representative shall be bound by all its terms and conditions. Any notice
required hereunder shall be sufficient if in writing and mailed to the last
known residence of Employee or to the Company at its principal office with
a copy mailed to the Office of the General Counsel.
41. Amendments and Modifications. Except as specifically provided herein, no
modification, amendment, extension or waiver of this Agreement or any
provision hereof shall be binding upon the Company or Employee unless in
writing and signed by both Parties. The waiver by the Company or Employee
of a breach of any provision of this Agreement shall not be construed as a
waiver of any subsequent breach. Nothing in this Agreement shall be
construed as a limitation upon the Company's right to modify or amend any
of its manuals or policies in its sole discretion and any such modification
or amendment which pertains to matters addressed herein shall be deemed to
be incorporated herein and made a part of this Agreement.
42. Outside Representations. Employee represents and acknowledges that in
signing this Agreement he does not rely, and has not relied, upon any
representation or statement made by the Company or by any of the Company's
employees, officers, agents, stockholders, directors or attorneys with
regard to the subject matter, basis or effect of this Agreement other than
those specifically contained herein.
43. Voluntary and Knowing Execution. Employee acknowledges that he has been
offered a reasonable amount of time within which to consider and review
this Agreement; that he has carefully read and fully understands all of the
provisions of this Agreement; and that he has entered into this Agreement
knowingly and voluntarily.
44. Entire Agreement. This Agreement constitutes the entire employment
agreement between the Parties hereto concerning the subject matter hereof
and shall supersede all prior and contemporaneous agreements between the
Parties in connection with the subject matter of this Agreement. Any
pre-existing Employment Agreements shall be deemed null and void. Nothing
in this Agreement, however, shall affect any separately-executed written
agreement addressing any other issues (e. g., the Inventions, Improvements,
Copyrights and Trade Secrets Agreement, etc.).
13
IN WITNESS WHEREOF, the Parties have signed this Agreement effective as of
the day and year first above written.
"EMPLOYEE" HILL-ROM, INC.
Signed: By:
----------------------------- ------------------------------------
Printed: Title:
---------------------------- ---------------------------------
Dated: Dated:
------------------------------ ---------------------------------
14
EXHIBIT A
SAMPLE SEPARATION AND RELEASE AGREEMENT
THIS SEPARATION and RELEASE AGREEMENT ("Agreement") is entered into by and
between Xxxxxx Xxxxx ("Employee") and Hill-Rom, Inc. (together with its
subsidiaries and affiliates, the "Company"). To wit, the Parties agree as
follows:
1. Employee's active employment by the Company shall terminate effective [DATE
OF TERMINATION] (Employee's "Effective Termination Date"). Except as
specifically provided by this Agreement, or in any other non-employment
agreement that may exist between the Company and Employee, Employee agrees
that the Company shall have no other obligations or liabilities to him
following his Effective Termination Date and that his receipt of the
Severance Benefits provided herein shall constitute a complete settlement,
satisfaction and waiver of any and all claims he may have against the
Company.
2. Employee further submits, and the Company hereby accepts, his resignation
as an employee, officer and director, as of his Effective Termination Date
for any position he may hold. The Parties agree that this resignation shall
apply to all such positions Employee may hold with the Company or any
parent, subsidiary or affiliated entity thereof. Employee agrees to execute
any documents needed to effectuate such resignation. Employee further
agrees to take whatever steps are necessary to facilitate and ensure the
smooth transition of his duties and responsibilities to others.
3. Employee acknowledges that he has been advised of the American Jobs
Creation Act of 2004, which added Section 409A to the Internal Revenue
Code, and significantly changed the taxation of nonqualified deferred
compensation plans. Under regulations not yet published as of the date of
this Agreement, Employee has been advised that if he is a "key employee"
covered by Section 409A or any similar law, his severance pay may be
treated by the Internal Revenue Service as providing "nonqualified deferred
compensation," and therefore subject to Section 409A. In that event,
several provisions in Section 409A may affect Employee's receipt of
severance compensation. These include, but are not limited to, a provision
which requires that distributions to "key employees" at public companies on
account of separation from service may not be made earlier than six (6)
months after the date of separation. If applicable, failure to comply with
Section 409A can lead to immediate taxation of deferrals, with interest and
a 20% penalty. As a result of the requirements imposed by the American Jobs
Creation Act of 2004, Employee agrees if he is covered by the provisions of
Section 409A or any similar law at the time of his termination and if
severance payments are covered as "non-qualified deferred compensation"
that the above severance pay benefits shall not be paid until a date at
least six (6) months after Employee's Effective Termination Date from
Company, as more fully explained by Paragraph 4, below.
4. In consideration of the promises contained in this Agreement and contingent
upon Employee's compliance with such promises, the Company agrees to
provide Employee the following:
(a) Severance pay, inclusive of any contractual, notice or statutory pay
obligations in the total amount of [INSERT AMOUNT] Dollars and [ ]
Cents ($[__________]), less applicable deductions or other set offs,
payable as follows:
(i) A lump payment in the gross amount of [INSERT AMOUNT EQUAL TO 6
MONTHS' PAY] Dollars and [___] Cents ($[_______]) payable the day
following the sixth (6tth) month anniversary of Employee's
Effective Termination Date; and.
(ii) Commencing on the next regularly scheduled payroll immediately
following the above-referenced lump sum payment, bi-weekly
payments based on Employee's bi-weekly base salary in the amount
of [INSERT BI-WEEKLY RATE] Dollars and [___________] Cents
($[__________]), less applicable deductions or other set-offs),
for a period up to and additional [INSERT REMAINING WEEKS]
([___]) weeks;
(b) Payment for any earned but unused vacation as of Employee's Effective
Termination Date, less applicable deductions permitted or required by
law; and
(c) Group Life Insurance coverage until the above-referenced Severance Pay
terminates.
5. Except as may be required by Section 409A, the above Severance Pay shall be
paid in accordance with the Company's standard payroll practices (e.g.
bi-weekly) and shall begin on the first normally scheduled payroll
following Employee's Effective Termination Date or the effective date of
this Agreement, whichever occurs last. The Parties agree that the initial
two (2) weeks of the foregoing Severance Pay shall be allocated as
consideration provided to Employee in exchange for his execution of a
release in compliance with the Older Workers Benefit Protection Act. The
balance of the severance benefits and other obligations undertaken by the
Company pursuant to this Agreement shall be allocated as consideration for
all other promises and obligations undertaken by Employee, including
execution of a general release of claims.
6. The Company further agrees to provide Employee with limited out-placement
counseling with a company of its choice provided that Employee participates
in such counseling immediately following termination of employment.
7. As of his Effective Termination Date, Employee will become ineligible to
participate in the Company's health insurance program and continuation of
coverage requirements under COBRA (if any) will be triggered at that time.
However, as additional consideration for the promises and obligations
contained herein (and except as may be prohibited by law), the Company
agrees to continue to pay the employer's share of such coverage as provided
under the health care program selected by Employee as of his Effective
Termination Date, subject to any approved changes in coverage based on a
qualified election, until the above-referenced Severance Pay terminates,
Employee accepts other employment or Employee becomes eligible for
alternative healthcare coverage, which ever comes first, provided Employee
(i) timely completes the applicable election of coverage forms and (ii)
continues to pay the employee portion of the applicable premium(s).
Thereafter, if applicable, coverage will be made available to Employee at
his sole expense (i.e., Employee will be responsible for the full COBRA
premium) for the remaining months of the COBRA coverage period made
available pursuant to applicable law. The medical insurance provided herein
does not include any disability coverage.
8. Should Employee become employed before the above-referenced Severance
Benefits are exhausted or terminated, Employee agrees to so notify the
Company in writing within five (5) business days of Employee's acceptance
of such employment, providing the name of such employer (or entity to whom
Employee may be providing consulting services), his intended duties as well
as the anticipated start date. Such information is required to ensure
Employee's compliance with his non-compete obligations as well as all other
applicable restrictive covenants. This notice will also serve to trigger
the Company's right to terminate all Company-paid or Company-provided
benefits consistent with
2
the above paragraphs. Failure to timely provide such notice shall be deemed
a material breach of this Agreement entitling the Company to recover as
damages the value of all benefits provided to Employee hereunder plus
attorneys fees.
9. Employee agrees to fully indemnify and hold the Company harmless for any
taxes, penalties, interest, cost or attorneys' fee assessed against or
incurred by the Company on account of such benefits having been provided to
him or based on any alleged failure to withhold taxes or satisfy any
claimed obligation. Employee understands and acknowledges that neither the
Company, nor any of its employees, attorneys, or other representatives has
provided him with any legal or financial advice concerning taxes or any
other matter, and that he has not relied on any such advice in deciding
whether to enter into this Agreement. To the extent applicable, Employee
understands and agrees that he shall have the responsibility for, and he
agrees to pay, any and all appropriate income tax or other tax obligations
for which he is individually responsible and/or related to receipt of any
benefits provided in this Agreement not subject to federal withholding
obligations
10. In exchange for the foregoing Severance Benefits, XXX XXXXX on behalf of
himself, his heirs, representatives, agents and assigns hereby RELEASES,
INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES (i) Hill-Rom, Inc.,
(ii) its parent, subsidiary or affiliated entities, (iii) all of their
present or former directors, officers, employees, shareholders, and agents,
as well as, (iv) all predecessors, successors and assigns thereof from any
and all actions, charges, claims, demands, damages or liabilities of any
kind or character whatsoever, known or unknown, which Employee now has or
may have had through the effective date of this Agreement.
11. Without limiting the generality of the foregoing release, it shall include:
(i) all claims or potential claims arising under any federal, state or
local laws relating to the Parties' employment relationship, including any
claims Employee may have under the Civil Rights Acts of 1866 and 1964, as
amended, 42 U.S.C. Sections 1981 and 2000(e) et seq.; the Civil Rights Act
of 1991; the Age Discrimination in Employment Act, as amended, 29 U.S.C.
Sections 621 et seq.; the Americans with Disabilities Act of 1990, as
amended, 42 U.S.C Sections 12,101 et seq.; the Fair Labor Standards Act 29
U.S.C. Sections 201 et seq.; the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. Sections 2101, et seq.; the Xxxxxxxx-Xxxxx Act
of 2002, specifically including the Corporate and Criminal Fraud
Accountability Act, 18 U.S.C. Section 1514,A et seq.; and any other
federal, state or local law governing the Parties' employment relationship;
(ii) any claims on account of, arising out of or in any way connected with
Employee's employment with the Company or leaving of that employment; (iii)
any claims alleged or which could have been alleged in any charge or
complaint against the Company; (iv) any claims relating to the conduct of
any employee, officer, director, agent or other representative of the
Company; (v) any claims of discrimination, harassment or retaliation on any
basis; (vi) any claims arising from any legal restrictions on an employer's
right to separate its employees; (vii) any claims for personal injury,
compensatory or punitive damages or other forms of relief; and (viii) all
other causes of action sounding in contract, tort or other common law
basis, including (a) the breach of any alleged oral or written contract,
(b) negligent or intentional misrepresentations, (c) wrongful discharge,
(d) just cause dismissal, (e) defamation, (f) interference with contract or
business relationship or (g) negligent or intentional infliction of
emotional distress.
12. Employee further agrees and covenants not to xxx the Company or any entity
or individual subject to the foregoing General Release with respect to any
claims, demands, liabilities or obligations release by this Agreement
provided, however, that nothing contained in this Agreement shall prevent
Employee from bringing an action under the Age Discrimination in Employment
Act (or any similar law) challenging the knowing and voluntary nature of
this Agreement.
3
13. The Parties acknowledge that it is their mutual and specific intent that
the above waiver fully complies with the requirements of the Older Workers
Benefit Protection Act (29 U.S.C. Section 626) and any similar law
governing release of claims. Accordingly, Employee hereby acknowledges
that:
(a) he has carefully read and fully understands all of the provisions of
this Agreement and that he has entered into this Agreement knowingly
and voluntarily;
(b) The Severance Benefits offered in exchange for Employee's release of
claims exceed in kind and scope that to which he would have otherwise
been legally entitled absent the execution of this Agreement;
(c) Prior to signing this Agreement, Employee had been advised, and is
being advised by this Agreement, to consult with an attorney of his
choice concerning its terms and conditions; and
(d) he has been offered at least [TWENTY-ONE (21)/FORTY-FIVE (45)] days
within which to review and consider this Agreement.
14. The Parties agree that this Agreement shall not become effective and
enforceable until the date this Agreement is signed by both Parties or
seven (7) calendar days after its execution by Employee, whichever is
later. Employee may revoke this Agreement for any reason by providing
written notice of such intent to the Company within seven (7) days after he
has signed this Agreement, thereby forfeiting Employee's right to receive
any Severance Benefits provided hereunder and rendering this Agreement null
and void in its entirety.
15. The Parties agree that nothing contained herein shall purport to waive or
otherwise affect any of Employee's rights or claims that may arise after he
signs this Agreement. . It is further understood by the Parties that
nothing in this Agreement shall affect any rights Employee may have under
any Company sponsored Deferred Compensation Program, Executive Life
Insurance Bonus Plan, Stock Grant Award, Stock Option Grant, Restricted
Stock Unit Award, Pension Plan and/or Savings Plan (i.e., 401(k) plan)
provided by the Company as of the date of his termination, such items to be
governed exclusively by the terms of the applicable agreements or plan
documents.
16. Similarly, notwithstanding any provision contained herein to the contrary,
this Agreement shall not constitute a waiver or release or otherwise affect
Employee's rights with respect to any vested benefits, any rights he has to
benefits which can not be waived by law, any coverage provided under any
Directors and Officers ("D&O") policy, any rights Employee may have under
any indemnification agreement he has with the Company prior to the date
hereof, any rights he has as a shareholder, or any claim for breach of this
Agreement, including, but not limited to the benefits promised by the terms
of this Agreement.
17. Except as provided herein, Employee acknowledges that he will not be
eligible to receive or vest in any additional stock options, stock awards
or restricted stock units ("RSUs") as of his Effective Termination Date.
Failure to exercise any vested options within the applicable period as set
for in the plan and/or grant will result in their forfeiture. Employee
acknowledges that any stock options, stock awards or RSUs held for less
than the required period shall be deemed forfeited as of the effective date
of this Agreement. All terms and conditions of such stock options, stock
awards or RSUs shall not be affected by this Agreement, shall remain in
full force and effect, and shall govern the Parties' rights with respect to
such equity based awards.
4
18. [OPTION A] Employee acknowledges that his termination and the Severance
Benefits offered hereunder were based on an individual determination and
were not offered in conjunction with any group termination or group
severance program and waives any claim to the contrary.
[OPTION B] Employee represents and agrees that he has been provided
relevant cohort information based on the information available to the
Company as of the date this Agreement was tendered to Employee. This
information is attached hereto as Exhibit A. The Parties acknowledge that
simply providing such information does not mean and should not be
interpreted to mean that the Company was obligated to comply with 29 C.F.R.
Section 1625.22(f).
19. Employee hereby affirms and acknowledges his continued obligations to
comply with the post-termination covenants contained in his Employment
Agreement, including but not limited to, the non-compete, trade secret and
confidentiality provisions. Employee acknowledges that a copy of the
Employment Agreement has been attached to this Agreement as Exhibit A [B]
or has otherwise been provided to him and, to the extent not inconsistent
with the terms of this Agreement or applicable law, the terms thereof shall
be incorporated herein by reference. Employee acknowledges that the
restrictions contained therein are valid and reasonable in every respect
and are necessary to protect the Company's legitimate business interests.
Employee hereby affirmatively waives any claim or defense to the contrary.
Employee hereby acknowledges that the definition of Competitor, as provided
in his Employment Agreement shall include but not be limited to those
entities specifically identified in the updated Competitor List, attached
hereto as Exhibit B [C].
20. Employee acknowledges that the Company as well as its parent, subsidiary
and affiliated companies ("Companies" herein) possess, and he has been
granted access to, certain trade secrets as well as other confidential and
proprietary information that they have acquired at great effort and
expense. Such information includes, without limitation, confidential
information regarding products and services, marketing strategies, business
plans, operations, costs, current or, prospective customer information
(including customer contacts, requirements, creditworthiness and like
matters), product concepts, designs, prototypes or specifications,
regulatory compliance issues, research and development efforts, technical
data and know-how, sales information, including pricing and other terms and
conditions of sale, financial information, internal procedures, techniques,
forecasts, methods, trade information, trade secrets, software programs,
project requirements, inventions, trademarks, trade names, and similar
information regarding the Companies' business (collectively referred to
herein as "Confidential Information").
21. Employee agrees that all such Confidential Information is and shall remain
the sole and exclusive property of the Company. Except as may be expressly
authorized by the Company in writing, or as may be required by law after
providing due notice thereof to the Company, Employee agrees not to
disclose, or cause any other person or entity to disclose, any Confidential
Information to any third party for as long thereafter as such information
remains confidential (or as limited by applicable law) and agrees not to
make use of any such Confidential Information for Employee's own purposes
or for the benefit of any other entity or person. The Parties acknowledge
that Confidential Information shall not include any information that is
otherwise made public through no fault of Employee or other wrong doing.
22. On or before Employee's Effective Termination Date or per the Company's
request, Employee agrees to return the original and all copies of all
things in his possession or control relating to the Company or its
business, including but not limited to any and all contracts, reports,
memoranda, correspondence, manuals, forms, records, designs, budgets,
contact information or lists (including customer, vendor or supplier
lists), ledger sheets or other financial information, drawings, plans
(including, but not limited to, business, marketing and strategic plans),
personnel or other business
5
files, computer hardware, software, or access codes, door and file keys,
identification, credit cards, pager, phone, and any and all other physical,
intellectual, or personal property of any nature that he received,
prepared, helped prepare, or directed preparation of in connection with his
employment with the Company. Nothing contained herein shall be construed to
require the return of any non-confidential and de minimis items regarding
Employee's pay, benefits or other rights of employment such as pay stubs,
W-2 forms, 401(k) plan summaries, benefit statements, etc.
23. Employee hereby consents and authorizes the Company to deduct as an offset
from the above-referenced severance payments the value of any Company
property not returned or returned in a damaged condition as well as any
monies paid by the Company on Employee's behalf (e.g., payment of any
outstanding American Express xxxx).
24. Employee agrees to cooperate with the Company in connection with any
pending or future litigation, proceeding or other matter which has been or
may be brought against or by the Company before any agency, court, or other
tribunal and concerning or relating in any way to any matter falling within
Employee's knowledge or former area of responsibility. Employee agrees to
immediately notify the Company, through the Office of the General Counsel,
in the event he is contacted by any outside attorney (including paralegals
or other affiliated parties) concerning or relating in any way to any
matter falling within Employee's knowledge or former area of responsibility
unless (i) the Company is represented by the attorney, (ii) Employee is
represented by the attorney for the purpose of protecting his personal
interests or (iii) the Company has been advised of and has approved such
contact. Employee agrees to provide reasonable assistance and completely
truthful testimony in such matters including, without limitation,
facilitating and assisting in the preparation of any underlying defense,
responding to discovery requests, preparing for and attending deposition(s)
as well as appearing in court to provide truthful testimony. The Company
agrees to reimburse Employee for all reasonable out of pocket expenses
incurred at the request of the Company associated with such assistance and
testimony.
25. Employee agrees not to make any written or oral statement that may defame,
disparage or cast in a negative light so as to do harm to the personal or
professional reputation of (a) the Company, (b) its employees, officers,
directors or trustees or (c) the services and/or products provided by the
Company and its subsidiaries or affiliate entities. Similarly, in response
to any written inquiry from any prospective employer or in connection with
a written inquiry in connection with any future business relationship
involving Employee, the Company agrees not to provide any information that
may defame, disparage or cast in a negative light so as to do harm to the
personal or professional reputation of Employee. The Parties acknowledge,
however, that nothing contained herein shall be construed to prevent or
prohibit the Company or the Employee from providing truthful information in
response to any court order, discovery request, subpoena or other lawful
request.
26. EMPLOYEE SPECIFICALLY AGREES AND UNDERSTANDS THAT THE EXISTENCE AND TERMS
OF THIS AGREEMENT ARE STRICTLY CONFIDENTIAL AND THAT SUCH CONFIDENTIALITY
IS A MATERIAL TERM OF THIS AGREEMENT. Accordingly, except as required by
law or unless authorized to do so by the Company in writing, Employee
agrees that he shall not communicate, display or otherwise reveal any of
the contents of this Agreement to anyone other than his spouse, legal
counsel or financial advisor provided, however, that they are first advised
of the confidential nature of this Agreement and Employee obtains their
agreement to be bound by the same. The Company agrees that Employee may
respond to legitimate inquiries regarding the termination of his employment
by stating that the Parties have terminated their relationship on an
amicable basis and that the Parties have entered into a Confidential
Separation and Release Agreement that prohibits him from further discussing
the specifics of his separation. Nothing contained herein shall be
construed to prevent Employee from discussing or otherwise advising
6
subsequent employers of the existence of any obligations as set forth in
his Employment Agreement. Further, nothing contained herein shall be
construed to limit or otherwise restrict the Company's ability to disclose
the terms and conditions of this Agreement as may be required by business
necessity.
27. In the event that Employee breaches or threatens to breach any provision of
this Agreement, he agrees that the Company shall be entitled to seek any
and all equitable and legal relief provided by law, specifically including
immediate and permanent injunctive relief. Employee hereby waives any claim
that the Company has an adequate remedy at law. In addition, and to the
extent not prohibited by law, Employee agrees that the Company shall be
entitled to discontinue providing any additional Severance Benefits upon
such breach or threatened breach as well as an award of all costs and
attorneys' fees incurred by the Company in any successful effort to enforce
the terms of this Agreement. Employee agrees that the foregoing relief
shall not be construed to limit or otherwise restrict the Company's ability
to pursue any other remedy provided by law, including the recovery of any
actual, compensatory or punitive damages. Moreover, if Employee pursues any
claims against the Company subject to the foregoing General Release, or
breaches the above confidentiality provision, Employee agrees to
immediately reimburse the Company for the value of all benefits received
under this Agreement to the fullest extent permitted by law.
28. Similarly, in the event that the Company breaches or threatens to breach
any provision of this Agreement, Employee shall be entitled to seek any and
all equitable or other available relief provided by law, specifically
including immediate and permanent injunctive relief. In the event Employee
is required to file suit to enforce the terms of this Agreement, the
Company agrees that Employee shall be entitled to an award of all costs and
attorneys' fees incurred by him in any wholly successful effort (i.e. entry
of a judgment in his favor) to enforce the terms of this Agreement. In the
event Employee is wholly unsuccessful, the Company shall be entitled to an
award of its costs and attorneys' fees.
29. Both Parties acknowledge that this Agreement is entered into solely for the
purpose of terminating Employee's employment relationship with the Company
on an amicable basis and shall not be construed as an admission of
liability or wrongdoing by the Company or Employee, both Parties having
expressly denied any such liability or wrongdoing.
30. Each of the promises and obligations shall be binding upon and shall inure
to the benefit of the heirs, executors, administrators, assigns and
successors in interest of each of the Parties.
31. The Parties agree that each and every paragraph, sentence, clause, term and
provision of this Agreement is severable and that, if any portion of this
Agreement should be deemed not enforceable for any reason, such portion
shall be stricken and the remaining portion or portions thereof should
continue to be enforced to the fullest extent permitted by applicable law.
32. This Agreement shall be governed by and interpreted in accordance with the
laws of the State of Indiana without regard to any applicable state's
choice of law provisions.
33. Employee represents and acknowledges that in signing this Agreement he does
not rely, and has not relied, upon any representation or statement made by
the Company or by any of the Company's employees, officers, agents,
stockholders, directors or attorneys with regard to the subject matter,
basis or effect of this Agreement other than those specifically contained
herein.
34. This Agreement represents the entire agreement between the Parties
concerning the subject matter hereof, shall supersede any and all prior
agreements which may otherwise exist between them concerning the subject
matter hereof (specifically excluding, however, the post-termination
7
obligations contained in an Employee's Employment Agreement or any
obligation contained in any other legally-binding document), and shall not
be altered, amended, modified or otherwise changed except by a writing
executed by both Parties.
PLEASE READ CAREFULLY. THIS SEPARATION AND RELEASE
AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.
IN WITNESS WHEREOF, the Parties have themselves signed, or caused a duly
authorized agent thereof to sign, this Agreement on their behalf and thereby
acknowledge their intent to be bound by its terms and conditions.
[EMPLOYEE] HILL-ROM, INC.
Signed: By:
----------------------------- ------------------------------------
Printed: Title:
---------------------------- ---------------------------------
Dated: Dated:
------------------------------ ---------------------------------
8
EXHIBIT B
ILLUSTRATIVE COMPETITOR LIST
The following is an illustrative, non-exhaustive list of Competitors with
whom Employee may not, during his relevant non-compete period, directly or
indirectly engage in any of the competitive activities proscribed by the terms
of his Employment Agreement.
- Kinetic Concepts, Inc.
- Huntleigh Technology PLC
- Stryker Corporation
- Modular Services Company
- Nemschoff Chairs, Inc.
- Universal Hospital Services, Inc.
- Dukane Communication Systems, a division of Xxxxxxx Systems
Technology, Inc.
- Versus Technology, Inc.
- Electromed Inc.
- BG Industries
- Invacare Corporation
- Xxxxxxx -- A Tyco International Ltd. Company
- Apria Healthcare Group, Inc.
- Getinge AB (Pegasus brand)
- Gaymar Industries, Inc.
- Amico Corporation
- Aramark Corporation
- Masterplan Inc.
- StatCom
- Tele-Tracking Technologies Inc.
- Primus Medical, LLC
- Xxxxxxx-Xxxx Corporation
- Wescom Products, Inc
- Simplex Xxxxxxxx -- A Tyco International Ltd. Company
- Radianse, Inc.
- Ascom
While the above list is intended to identify the Company's primary
competitors, it should not be construed as all encompassing so as to exclude
other potential competitors falling within the Non-Compete definitions of
"Competitor." The Company reserves the right to amend this list at any time in
its sole discretion to identify other or additional Competitors based on changes
in the products and services offered, changes in its business or industry as
well as changes in the duties and responsibilities of the individual employee.
An updated list will be provided to Employee upon reasonable request. Employees
are encouraged to consult with the Company prior to accepting any position with
any potential competitor.
(Revised list 7-26-2005)
