Exhibit 10.8
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X.X. XXXXX DRUG COMPANY
EMPLOYMENT AGREEMENT
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This Employment Agreement is effective as of September 1, 1995, and is
executed as of January 7, 1997 by and between X.X. XXXXX DRUG COMPANY, a
Missouri corporation (the "Company") and XXXXXX X. XXXXXX (the "Executive").
WHEREAS, the Company believes it to be in its best interest to provide for
continuity of management and to provide protection for its valuable trade
secrets and confidential information; and
WHEREAS, the Company desires to employ the Executive and the Executive is
willing to render his services to the Company on the terms and conditions with
respect to such employment hereinafter set forth.
NOW, THEREFORE, in consideration of premises and the mutual terms and
conditions hereof, the Company and the Executive hereby agree as follows:
1. Employment. The Company hereby employs the Executive and the Executive
hereby accepts employment with the Company upon the terms and conditions
hereinafter set forth.
2. Exclusive Services. The Executive shall devote all necessary working
time, ability and attention to the business of the Company during the term of
this Agreement and shall not, directly or indirectly, render any material
services to any business, corporation, or organization whether for compensation
or otherwise, without the prior knowledge of the Board of Directors of the
Company (hereinafter referred to as the "Board").
3. Duties. The Executive is hereby employed as President and Chief
Executive Officer of the Company and shall render his services at the principal
business offices of the Company, as such may be located from time to time,
unless otherwise agreed between the Board and the Executive. The Executive
shall have such authority and shall perform such duties as are specified by the
bylaws of the Company for the office of President; subject, however, to such
limitations, instructions, directions, and control as the Board may specify from
time to time in its sole discretion.
4. Term. This Agreement shall have an initial term through February 28,
1999, and shall renew for successive one year terms thereafter unless either
party gives notice of nonrenewal at least 60 days prior to the end of the
initial term or of any renewal term; provided, however, that this Agreement is
always subject to termination as provided in Paragraph 13, below.
5. Compensation. As compensation for his services rendered under this
Agreement, the Executive shall be entitled to receive the initial compensation
set forth on the attached Executive Individual Salary and Incentive Plan
Schedule. The Base Salary component of the compensation shall not be reduced by
the Company during the term hereof except in accordance with a general Base
Salary reduction implemented across all executive level positions.
a. Base Salary. Base salary shall be paid in 26 equal installments during
the term of this Agreement, prorated for any partial employment month.
Such salary ("Base Salary") may be increased (but not decreased except as
provided above) by the Board in its sole discretion.
b. Additional Compensation. The Executive shall be paid such additional
compensation and bonuses, as may be determined and authorized in the sole
discretion of the Board.
6. Benefits. In addition to the compensation to be paid to the Executive
pursuant to Paragraph 5 hereof, the Executive shall further be entitled to
receive the following:
a. Participation in Employee Plans. The Executive shall be entitled to
participate in any health, disability, group term life insurance plan, any
pension, retirement or profit sharing plan, executive bonus plan or any
other fringe benefits which may be extended generally from time to time to
senior management employees of the Company. In addition, the Executive
shall be entitled to the supplemental benefits described on the attached
Supplemental Benefits Schedule.
b. Disability Salary Continuation. If the Executive becomes disabled
during the term of this Agreement, the Company shall continue to pay the
Executive his Base Salary during the first 90 day period of such disability
and shall continue to pay the Executive, but at the rate of forty percent
(40%) of his Base Salary, for second 90 day period of such disability.
"Disability" as used herein shall have the same meaning as given that term
in the long term disability insurance policy of the Company as in effect
from time to time. All payments under this Paragraph shall cease upon the
expiration or other termination of this Agreement or of the Executive's
employment.
c. Vacation. The Executive shall be entitled to three weeks vacation with
full salary and benefits each year, measured from the anniversary of his
original employment with the Company. No cash or other payment will be
due, however, for unused vacation and vacation may not be carried over from
each such year to the next.
7. Reimbursement of Expenses. Subject to such rules and procedures as
from time to time are specified by the Company, the Company shall reimburse the
Executive on a monthly basis for reasonable business expenses necessarily
incurred in the performance of his duties under this Agreement.
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8. Confidentiality/Trade Secrets. The Executive acknowledges that his
position with the Company is one of the highest trust and confidence both by
reason of his position and by reason of his access to and contact with the trade
secrets and confidential and proprietary business information of the Company.
Both during the term of this Agreement and thereafter, the Executive covenants
and agrees as follows:
a. he shall use his best efforts and exercise utmost diligence to protect
and safeguard the trade secrets and confidential and proprietary
information of the Company including but not limited to the identity of its
customers and suppliers, its arrangements with customers and suppliers, and
its technical and financial data, records, compilations of information,
processes, recipes and specifications relating to its customers, suppliers,
products and services;
b. he shall not disclose any of such trade secrets and confidential and
proprietary information, except as may be required in the course of his
employment with the Company or by law; and
c. he shall not use, directly or indirectly, for his own benefit or for the
benefit of another, any of such trade secrets and confidential and
proprietary information.
All files, records, documents, drawings, specifications, memoranda, notes,
or other documents relating to the business of the Company, whether prepared by
the Executive or otherwise coming into his possession, shall be the exclusive
property of the Company and shall be delivered to the Company and not retained
by the Executive upon termination of his employment for any reason whatsoever or
any other time upon request of the Board.
9. Discoveries. The Executive covenants and agrees that he will fully
inform the Company of and disclose to the Company all inventions, designs,
improvements, discoveries and processes ("Discoveries") which he has now or may
hereafter have during his employment with the Company and which pertain or
relate to the business of the Company or to any experimental work, products,
services or processes of the Company in progress or planned for the future,
whether conceived by the Executive alone or with others, and whether or not
conceived during regular working hours or in conjunction with the use of any
Company assets. All such Discoveries shall be the exclusive property of the
Company whether or not patent or trademark applications are filed thereon. The
Executive shall assist the Company, at any time during or after his employment,
in obtaining patents on all such Discoveries deemed patentable by the Company
and shall execute all documents and do all things necessary to obtain letters
patent, vest the Company with full and exclusive title thereto, and protect the
same against infringement by others. If such assistance takes place after his
employment is terminated the Executive shall be paid by the Company at a
reasonable rate for any time actually spent in rendering such assistance at the
request of the Company.
10. Noncompetition. Taking into consideration the nature, scope and
volume of the Company's operations, the Executive agrees that during the period
of his employment and (i) if
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he elects to receive a Severance Payment pursuant to Section 13(b) or 13(f) then
also for the Severance Payment Period, or (ii) if he resigns other than for Good
Reason, as defined below, or if he is terminated for Cause as defined below,
then for a period of two years after such resignation or termination, he will
not, within the United States or any other country in which the Company,
directly or indirectly, owns or operates a business engaged in the distribution
or wholesale of pharmaceuticals, medicines, health aids or sundries, directly or
indirectly, own, manage, operate, control, or be employed by, participate in, or
be connected in any matter with the ownership (other than ownership of
securities of publicly held corporations of which Executive owns less than 2% of
any class of outstanding securities), management, operation, or control of any
business engaged in the distribution or wholesale of pharmaceuticals, medicines,
health aids or sundries.
11. Nonsolicitation. The Executive agrees that during the period of his
employment and the Severance Payment Period he will not, either directly or
indirectly, for himself or for any third party, solicit, induce, recruit, or
cause another person in the employ of the Company to terminate his/her
employment for the purpose of joining, associating or becoming employed with any
other business or activity. The Company and the Executive specifically
acknowledge and agree that the foregoing covenants of the Executive in Sections
10 and 11 are reasonable in content and scope and are given by the Executive for
adequate consideration.
12. Remedies for Breach of Covenants of the Executive. The covenants set
forth in Paragraphs 8 and 9 of this Agreement shall continue to be binding upon
the Executive, notwithstanding the termination of his employment with the
Company for any reason whatsoever. Such covenants shall be deemed and construed
as separate agreements independent of any other provisions of this Agreement and
any other agreement between the Company and the Executive. The existence of any
claim or cause of action by the Executive against the Company, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of any or all of such covenants. It is expressly
agreed that the remedy at law for the breach of any such covenant is inadequate
and injunctive relief shall be available to prevent the breach or any threatened
breach thereof.
13. Termination.
a. The Company may terminate this Agreement and the Executive's
employment hereunder at any time, with or without Cause, upon written
notice to the Executive. The Executive may either resign upon 30 days
written notice to the Company or may terminate this Agreement and his
employment hereunder with Good Reason at any time. Upon any termination of
this Agreement and the Executive's employment hereunder, all benefits
provided pursuant to Paragraph 6 hereof shall cease.
b. In the event of termination by the Company without Cause, the
effective date thereof shall be stated in a written notice to the
Executive, which shall not be earlier than 30 days from the date such
notice is delivered to the Executive. In the event the Company effects a
termination without Cause, the Executive shall be entitled to receive (i)
any bonus amounts as may be payable and accrued but held back pursuant to
the terms
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of any written plans in which the Executive was a participant prior to the
effective date of the termination, (ii) all bonus payments determined as of
the end of the fiscal year in which the termination occurred, as if the
Executive had remained employed throughout such year, and (iii) a Severance
Payment for each month through the remaining term of this Agreement as
provided in Paragraph 4, above, beginning with and prorated for the month
in which the termination occurs.
c. Upon the effective date of any termination by the Company for
Cause, or upon the resignation of the Executive, the Executive shall only
be entitled to receive his salary through such date and any bonus amounts
as may be payable pursuant to the terms of any written plans in which the
Executive was a participant immediately prior to the effective date of the
termination. The Executive shall also be entitled to exercise his rights
under COBRA.
d. The following shall constitute "Cause":
(i) The Executive is convicted of a criminal offense
constituting a felony or involving dishonesty, deceit or moral
turpitude; or
(ii) The Executive breaches any material provision of this
Agreement or fails to perform his duties, or breaches his fiduciary
duty to the Company, and such breach or neglect is not corrected
within 10 days after receipt of written notice from the Company; or
(iii) The Executive dies or becomes permanently disabled from
continuing to provide the level of service required under this
Agreement.
e. The provisions of Paragraphs 8, 9, 10, 11, 12, 14, 15, 16 and 17
shall survive any termination for Cause.
f. The Executive shall have Good Reason to effect a termination in
the event the Company (i) breaches its obligations to pay any salary,
benefit or bonus due hereunder, (ii) requires the Executive to relocate
more than 50 miles from the greater St. Xxxxxx, Missouri area, (iii)
substantially diminishes the responsibilities of the Executive, or (iv)
substantially increases the Executive's required travel schedule. Upon any
such termination, the Executive shall be entitled to receive a lump sum
payment equal to a Severance Payment multiplied by 12, and the provisions
of Paragraphs 8, 9, 10, 11, 12, 14, 15, 16, and 17 shall survive the
termination. If the Executive waives his right to receive such lump sum
payment, only the provisions of Paragraphs 8, 9, 12, 14, 15, 16 and 17
shall survive the termination. The Executive shall also be entitled to
exercise his rights under COBRA. No termination may be effected by the
Executive for Good Reason unless he shall have delivered written notice to
the Company of the breach and the Company shall not have cured such breach
within 10 days thereafter.
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g. A "Severance Payment" is an amount equal to one-twelfth of the
sum of the Executive's base salary at the last effective annual rate.
h. A "Severance Payment Period" is any month in which the Executive
receives a Severance Payment or in the event of a termination under
Paragraph 13(f), the Severance Payment Period is 12 months.
14. Arbitration of Disputes.
a. Any dispute or claim arising out of or relating to this Agreement
or any termination of the Executive's employment shall be settled by final
and binding arbitration in St. Xxxxxx, Missouri in accordance with the
Commercial Arbitration rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof.
b. In the event that the Company does not submit to arbitration
hereunder or submits to arbitration but seeks to nullify or reverse the
effect of such arbitration by alleging that arbitration is unenforceable
against it, the Company shall pay all costs (including expenses and
attorneys' fees) incurred by the Executive as a result of such action by
the Company.
c. Except as contemplated in subparagraph b., above, the Company
shall reimburse the Executive for any attorneys' fees and expenses incurred
by the Executive related to any arbitration hereunder, and including any
actions taken by either party to appeal or enforce the judgment rendered
therein, up to a maximum amount of $10,000.00 if the Executive is
determined by the arbitration panel to have substantially prevailed in the
arbitration proceeding. Such reimbursement shall be made by direct payment
to the Executive upon delivery to the Company of valid invoices and/or
receipts relating to such attorneys' fees and expenses.
d. Except as contemplated in subparagraph b., the fees and expenses
of the arbitration panel shall be borne by the Company.
e. In the event the Executive does not submit to arbitration
hereunder or submits to arbitration but later seeks to nullify or reverse
the effect of such arbitration by alleging that arbitration is
unenforceable against him, then the Company shall be relieved of all
payment obligations under subparagraph c., above.
15. Mitigation. The Executive shall have no duty to attempt to mitigate
the level of benefits payable by the Company to him hereunder but the Company
shall be entitled to set off against the amounts payable hereunder any amounts
received by the Executive from any other employment or consulting source.
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16. Notices. Any notices to be given hereunder by either party to the
other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid, with return receipt requested. Mailed
notices shall be addressed as follows:
a. If to the Company:
X.X. Xxxxx Drug Company
0000 X. 00xx Xxxxxxx
Xx. Xxxxxx, Xxxxxxxx 00000
b. If to the Executive:
Xxxxxx X. Xxxxxx
RR4 - Xxx 000
Xxxxxxxxxxx, Xxxxxxxx 00000
Either party may change its address for notice by giving notice in accordance
with the terms of this Paragraph 16.
17. General Provisions.
a. Law Governing. This Agreement shall be governed by and construed
in accordance with the laws of the State of Missouri.
b. Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable, such provision shall be fully
severable and this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part
hereof; and the remaining provisions hereof shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance herefrom. Furthermore, in lieu of such
illegal, invalid, or unenforceable provision there shall be added
automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid, or unenforceable provision as may be possible and
still be legal, valid or enforceable.
c. Entire Agreement. This Agreement sets forth the entire
understanding of the parties and supersedes all prior agreements or
understandings, whether written or oral, with respect to the subject matter
hereof. No terms, conditions, warranties, other than those contained
herein, and no amendments or modifications hereto shall be binding unless
made in writing and signed by the parties hereto. All pre-existing
employment agreements (including earlier versions of this agreement) are
hereby superseded and null and void.
d. Binding Effect. This Agreement shall extend to and be binding
upon and inure to the benefit to the parties hereto, their respective
heirs, representatives, successors and assigns. This Agreement may not be
assigned by the Executive.
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e. Waiver. The waiver by either party hereto of a breach of any term
or provision of this Agreement shall not operate or be construed as a
waiver of a subsequent breach of the same provision by any party or of the
breach of any other term or provision of this Agreement.
f. Titles. Titles of the paragraphs herein are used solely for
convenience and shall not be used for interpretation or construing any
work, clause, paragraph, or provision of this Agreement.
g. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date and year first above written above.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.
EXECUTIVE: X.X. XXXXX DRUG COMPANY
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx Xxxxxxxxx
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XXXXXX X. XXXXXX Title: CFO
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