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EXHIBIT 10.14
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, made as of November 15, 1996, between
Professional Medical Management Company, a Delaware corporation (the
"Company"), and Xxxx X. Xxxxxxx ("Executive").
WHEREAS, Company and Executive were parties to that certain Employment
Agreement of November 15, 1994;
NOW THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT. The Company shall employ Executive, and Executive
accepts employment with the Company, under the terms and conditions set forth
in this Agreement for the period beginning on the date hereof and ending as
provided in paragraph 4 hereof (the "Employment Period"). The date on which
Executive ceases to be employed by the Company and/or its Subsidiaries (as
defined below) or its successors or assigns is referred to herein as the
"Termination Date."
2. POSITION AND DUTIES.
(a) During the Employment Period, Executive shall perform such
duties for the Company, its affiliates and its Subsidiaries
as the Company's Chief Executive Officer or other Company
officer to whom Executive reports may from time to time
direct. Executive shall serve as a Vice President of the
Company.
(b) Executive shall report to the Company's Chief Operating
Officer, but reporting relationship may change as Company
develops. Executive shall devote his best efforts and his
full business time and attention (except for permitted
vacation periods and reasonable periods of illness or other
incapacity) to the business and affairs of the Company, its
affiliates and its Subsidiaries. Executive shall perform his
duties and responsibilities to the best of his abilities in a
diligent, trustworthy, businesslike and efficient manner.
(c) For purposes of this Agreement, "Subsidiaries" shall mean any
corporation of which the securities having at least 50% of
the voting power in electing directors are, at the time of
determination, owned by the Company, directly or through one
or more Subsidiaries.
3. BASE SALARY AND BENEFITS.
(a) During the Employment Period, Executive's base salary shall
be $160,000 per annum or such higher rate as the Compensation
Committee may designate from time to time (the "Base
Salary"), provided that the Base Salary shall be subject to
annual increases of no less than the increase in the Consumer
Price Index announced from time to time. The Base Salary
shall be payable in regular installments in accordance with
the Company's general payroll practices.
(b) The Company shall reimburse Executive for all reasonable
expenses incurred by him in the course of performing his
duties under this Agreement which are consistent with the
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Company's policies in effect from time to time with respect
to travel, entertainment and other business expenses, subject
to the Company's requirements with respect to reporting and
documentation of such expenses.
(c) In addition to the Base Salary, the Company may award a bonus
to Executive following the end of each fiscal year during the
Employment Period based upon the Company's achievement of
operating goals during such fiscal year. The percentage and
goals shall be approved by the Compensation Committee for
each such fiscal year.
(d) In addition to the Base Salary and any bonuses payable to
Executive pursuant to this paragraph, during the Employment
Period Executive shall be entitled to participate in all
benefit plans adopted by Company for all or a select group of
its employees, including:
(i) term life insurance, health insurance and disability
insurance coverage,
(ii) participation in a stock option program with grants as
approved by the Option Committee from time to time, and
(iii) annual paid vacation in accordance with Company's
policies as from time to time established.
(e) Terms relating to the stock purchase by Executive at the time
of initial employment remain in effect as follows: If
Executive is termianted prior to November 15, 1998, Company
shall have the right to purchase 20,000 shares (adjusted for
the split date October 1995) of the stock for Executive's
purchase price, unless a "Change of Control" (as later
defined herein) occurs or a termination without cause, in
which case the Company's right to repurchase shall terminate.
4. TERM.
(a) Unless renewed by the mutual agreement of the Company and
Executive, the Employment Period shall end on November 14,
1998, provided that (i) the Employment Period shall terminate
prior to such date upon Executive's resignation, death or
permanent disability or incapacity (as determined by the
Board in its good faith judgement) and (ii) the Employment
Period may be terminated by the Company at any time prior to
such date For Cause (as defined below) or Without Cause. The
Employment Period is automatically extended for successive
years unless notice to the contrary is given not later than
ninety (90) days preceding November 14 of the final year of
the contract.
(b) If the Employment Period is terminated by the Company Without
Cause prior to the second anniversary of the date of this
Agreement, Executive shall be entitled to receive his Base
Salary, as in effect immediately prior to the Termination
Date, through the second anniversary of this Agreement, so
long as Executive has not breached the provisions of
paragraphs 5, 6 and 7 hereof. The Base Salary payments
described in this paragraph 4(b) shall be payable in regular
installments in accordance with the Company's general payroll
practice. Any earned, but deferred bonus amount will be
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paid out in quartelry payments during the two (2) year
post-employment non-compete period. The amounts payable
pursuant to this paragraph 4(b) shall be reduced by the
amount of any compensation Executive receives with respect to
any other employment or consulting during the period prior to
the second anniversary hereof. Upon request from time to
time, Executive shall furnish the Company with a true and
complete certificate specifying any such compensation due to
or received by him.
(c) If the Employment Period is terminated by the Company For
Cause or is terminated as a result of Executive's resignation
or normal expiration of the Agreement, Executive shall be
entitled to receive only his Base Salary through the
Termination Date.
(d) All of Executive's rights to fringe benefits and bonuses
hereunder (if any) accruing after the termination of the
Employment Period shall cease upon termination.
(e) For purposes of this Agreement, "Cause" shall mean (i) the
commission of a felony or a crime involving moral turpitude
(ii) the commission of any other act involving dishonesty,
embezzelment or fraud with respect to the Company or any of
its Subsidiaries, (iii) conduct tending to bring the Company
or any of its Subsidiaries into substantial public disgrace
or disrepute, (iv) failure to perform duties as reasonably
directed by the Company's Chief Executive Officer, (v) gross
negligence or willful misconduct with respect to the Company
or any of its Subsidiaries, (vi) Executive's violation of
sections 5, 6 or 7 (vii) Executive's material breach of any
dutied owned to the Company, included without limitation, the
duty of loyalty or (viii) any other material breach of this
Agreement, all of the above as determined solely by the Chief
Executive Officer ("CEO"). Cause shall not include acts or
failure to act if Executive has exercised substantial efforts
in good faith to perform the duties reasoanbly asisgned or
appropirate to his position, as determind solely by the CEO.
(f) If a "Change of Control" occurs and the Employment Period is
terminated or Executve voluntarily resigns within 12 months,
such termination shall constitute a termination Without
Cuase. For this purpose, a "Change of Control" occurs when:
- any "Person" or "Group" (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of
1934 ("Exchange Act")), other than the Executive or the
Founders (Xxxxxxx X. Xxxxxxxx, H. Xxxxx Xxxxx, E.
Xxxxxx Xxxxxx, and Xxxx X. XxXxxxxx), or an entity the
majority of the voting stock of which is owned or
controlled by the Executive or the Founders becomes the
"beneficial owner" (within the meaning of Rule 13d-3
and/or Rule 13d-5 under the Exchange Act, except that a
Person shall be deemed to have "beneficial ownership" of
all shares that such Person has the right to acquire
without condition, other than the passage of time,
whether such right is exercisable immediately or only
after the passage of time), direclty or indirectly 30%
or more of the total voting power of the then
outstanding voting stock of the Company; or
- the Company consolidates with or merges into another
Person or conveys, transfers or leases all or
substantially all of its assets to any Person, or any
corporation consodliates with or merges into the Company
pursuant to a transaction in which the outstandin votin
stock of the Company is changed into or exchanged for
cash,
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securities or other property, other htan a transaction
between the Company and (i) an Affiliate of the Company,
or (ii) any other entity owned or controlled by the
Founders.
In addition to the severance rights provided in section 4(b), if a
Change of Control occurs, any unvestd options will vest
immediately and Executive shall have 36 months to exercise all
options. Notwithstanding the 36 month exercise peirod, the
exercise of an option shall not be permitted more than ten years
after the date on which the option was granted.
5. CONFIDENTIAL INFORMATION. The Executive acknowledges that the
information, observations and data obtained by him while employed by the
Company concerning the business or affairs of the Company, any of its
affiliates or any Subsidiary ("Confidential Information") are the property of
the Company or such affiliate or Subsidiary, as the case may be. Therefore,
Executive agrees not to disclose to any unauthorized person or use for
Executive's own account any Confidential Information without the prior written
consent of the Board, unless and to the extent that the aforementioned matters
become generally known to and available for use by the public other than as a
result of Executive's acts or omissions to act. Executive shall deliver to the
Company at the termination of the Employment Period, or at any other time the
Company may request, all memoranda, notes, plans, records, reports, computer
tapes and software and other documents and data (and copies thereof) relating
to the Confidential Information, Work Product or the business of the Company,
any of its affiliates or any Subsidiary which Executive may then possess or
have under his control.
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6. INVENTIONS AND PATENTS. Executive agrees that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports, and all similar or related information which relates to the Company's
or any of its Subsidiaries' actual or anticipated business, research and
development or existing or future products or services and which are conceived,
developed or made by Executive while employed by the Company and/or its
Subsidiaries ("Work Product") belong to the Company or such Subsidiary.
Executive will promptly disclose such Work Product to the Board and perform all
actions reasonably requested by the Board (whether during or after the
Employment Period) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other instruments).
7. NON-COMPETE, NON-SOLICITATION.
(a) Executive acknowledges that in the course of his employment
with the Company he will become familiar with the information
concerning the Company, its affiliates, Subsidiaries and its
predecessors and that his services have been and will be of
special, unique and extraordinary value to the Company.
Therefore, Executive agrees that, during the Employment
Period and for the period of two years thereafter, the
Executive shall not directly or indirectly own, manage,
control, participate in, consult with, render services for,
or in any manner engage in any business competing with the
business of the Company or its Subsidiaries as such
businesses exist or are in process on the date of the
termination of Executive's employment, within any geographic
area in which the Company, its affiliates or its Subsidiaries
engage or plan to engage in such businesses. Nothing herein
shall prohibit Executive from being a passive owner of not
more than 3% of the outstanding stock of any class of a
corporation which is publicly traded, so long as Executive
has no active participation in the business of such
corporation.
(b) During the Non-compete Period, Executive shall not directly
or indirectly through another entity (i) induce or attempt to
induce any employee of the Company, any of its affiliates or
any Subsidiary to leave the employ of the Company or such
affiliate or Subsidiary, or in any way interfere with the
relationship between the Company, any of its affiliates or
any Subsidiary and any employee thereof, (ii) hire any person
who was an employee of the Company, any of its affiliates or
any Subsidiary at any time during the Employment Period, or
(iii) induce or attempt to induce any customer, supplier,
licensee or other business relation of the Company, any of
its affiliates or any Subsidiary to cease doing business with
the Company or such affiliate or Subsidiary, or in any way
interfere with the relationship between any such customer,
supplier, licensee or business relation and the Company, any
of its affiliates or any Subsidiary.
(c) If Executive is terminated by the Company Without Cause or
the Company is liquidated, the Non-compete provisions of this
Agreement will also terminate upon the Termination Date or
date of liquidation.
8. ENFORCEMENT. If, at the time of enforcement of paragraph 5, 6 or
7 of this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area.
Because Executive's services are unique and because Executive has access to
Confidential Information and Work Produce, the parties
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hereto agree that money damages would be an inadequate remedy for any breach of
this Agreement. Therefore, in the event a breach or threatened breach of this
Agreement, the Company or its successors or assigns may, in addition to other
rights and remedies existing in their favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief in
order to enforce, or prevent any violations of, the provisions hereof (without
posting a bond or other security).
9. EXECUTIVE REPRESENTATIONS. Executive hereby represents and
warrants to the Company that (i) the execution, delivery and performance of
this Agreement by Executive does not and will not conflict with, breach,
violate or cause a default under any contract, agreement, instrument, order,
judgement or decree to which Executive is a party or by which he is bound, (ii)
Executive is not a party to or bound by an employment agreement, non-compete
agreement or confidentiality agreement with any other person or entity and
(iii) upon the execution and delivery of this Agreement by the Company, this
Agreement shall be the valid and binding obligation of Executive, enforceable
in accordance with its terms.
10. SURVIVAL. Paragraphs 5, 6 and 7 shall survive and continue in
full force in accordance with their terms notwithstanding any termination of
the Employment Period, unless such termination was without cause.
11. NOTICES. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed by first class
mail, return receipt requested, to the recipient at the address indicated
below:
Notice to Executive: 0000 Xxx Xxxx Xxxxx
Xxx Xxxxx, Xx. 00000
Notices to Company 000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xx. 00000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or mailed.
12. SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
13. COMPLETE AGREEMENT. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the
complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may be related to the subject matter hereof in
any way.
14. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which is deemed to be in an original and all of which
taken together constitute one and the same agreement.
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15. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns, except that Executive may not assign
his rights or delegate his obligations hereunder without the prior written
consent of the Company.
16. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Texas, without giving
effect to any choice of law or conflict of law provision or rule (whether of
the State of Texas or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of Texas. In furtherance
of the foregoing, the internal law of the State of Texas shall control the
interpretation and construction of this Agreement, even though under that
jurisdiction's choice of law or conflict of law analysis, the substantive law
of some other jurisdiction would ordinarily apply.
17. AMENDMENT AND WAIVER. The provisions of this Agreement may be
amended or waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
18. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
19. NO STRICT CONSTRUCTION; INTERPRETATION. The language used in this
agreement will be deemed to be the language chosen by the parties hereto to
express their mutual intent and no rule of strict construction will be applied
against any person. The term "including" as used in this Agreement is used to
list items by way of example and shall not be deemed to constitute a limitation
of any term or provision contained herein. As used in this Agreement, the
singular or plural number shall be deemed to include the other whenever the
context so requires.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
ProMedCo, Inc.
BY: /s/ H. XXXXX XXXXX
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H. Xxxxx Xxxxx
ITS: President and CEO
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"Executive"
/s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx
