Exhibit 10.11
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AMENDED EMPLOYMENT AGREEMENT
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THIS AMENDED EMPLOYMENT AGREEMENT ("Agreement"), made as of November 1,
1995, by and between LabOne, Inc., a Delaware corporation (hereinafter
referred to as "LabOne") and Xxxxxx X. Xxxxxxxx, a resident of the State of
Kansas (hereinafter referred to as "Officer");
WITNESSETH:
WHEREAS, LabOne and Officer entered into an Employment Agreement as of
August 5, 1993, as amended November 9, 1993 and December 30, 1994 ("Employment
Agreement"); and
WHEREAS, the parties desire to amend and restate the said Employment
Agreement in its entirety;
NOW, THEREFORE, in consideration of the continuation of employment of
Officer with LabOne for the term of this Agreement and of the mutual promises,
covenants, representations and warranties contained herein, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound, agree that the Employment Agreement is hereby amended
and restated in its entirety to read as follows:
SECTION I
EMPLOYMENT AND TERM
1.1 EMPLOYMENT. LabOne hereby employs Officer and Officer hereby
accepts such employment and agrees to perform the duties described in
Section 2 of this Agreement.
1.2 TERM.
(a) BASE TERM. The term of employment shall commence on November
1, 1995 and shall continue for a period of eighteen (18) months (the "Base
Term"), or until terminated as otherwise provided herein.
(b) TERMINATION SUBSEQUENT TO CHANGE IN CONTROL. Notwithstanding any
other provision of this Agreement to the contrary, in the event that (i) a
change of control of LabOne shall occur at any time during which Officer is
in the full-time employment of LabOne or its successor and (ii) within
one (1) year after such a change in control, Officer's employment with LabOne
or its successor is terminated by LabOne or its successor for any reason
other than permanent disability, death or normal retirement, or is
voluntarily terminated by Officer for any reason at his sole discretion,
LabOne will promptly pay to Officer as termination compensation the lump
sum amount described below.
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The lump sum compensation payable shall be equal to three (3) times
the average annual compensation includable in Officer's gross income for the
most recent five (5) taxable years ending before the date of the change
in control. If Officer has been an employee of LabOne for less than 5
years, Officer's lump sum payment shall be equal to 3 times the average
annual compensation includable in Officer's gross income based on the
portion of the 5 year period during which Officer performed services
for LabOne. To the extent that any amount required to be paid hereunder
would constitute an "excess parachute payment" within the meaning of
Section 280G(b) of the Internal Revenue Code of 1986, that excess amount
need not be paid.
For purposes of this Section 1.2(b), a "change of control" shall
be deemed to have taken place if there shall have occurred (i) the sale
or other disposition resulting in the transfer of legal or beneficial
ownership of, or the right to vote, more than fifty percent (50%) of
the outstanding capital stock of LabOne to one or more third-party
purchasers unaffiliated with Seafield Capital Corporation, its
shareholders or affiliates (as the term "affiliate" is defined in
Rule 12b-2 promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934), except in connection
with an underwritten public offering of the common stock of LabOne,
(ii) a merger or consolidation of LabOne with or into any entity other
than Seafield Capital Corporation or its affiliates, (iii) a sale or
other transfer of substantially all of the assets of LabOne to any
person or entity other than Seafield Capital Corporation or its
affiliates, (iv) the sale or other disposition resulting in the
transfer of legal or beneficial ownership of, or the right to vote,
more than fifty percent (50%) of the outstanding capital stock of
Seafield Capital Corporation to one or more third-party purchasers
(other than the affiliates of Seafield Capital Corporation), except
in connection with an underwritten public offering of the common
stock of Seafield Capital Corporation, (v) a merger or consolidation
of Seafield Capital Corporation with or into any entity other than
the affiliates of Seafield Capital Corporation, or (vi) a sale or
other transfer of substantially all of the assets of Seafield Capital
Corporation to any person or entity other than the affiliates of
Seafield Capital Corporation.
In the event of termination of employment under the circumstances
described above, LabOne shall pay to Officer the installments of his
base salary through the date of termination of employment, any annual
incentive bonus for the previous year if such has been approved but
not paid and the lump sum amount as termination compensation described
above, and any remaining term of this Agreement shall be cancelled.
Such payments to Officer and the arrangements provided for by any stock
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option or other agreement between LabOne and Officer in effect at
the time and by any other applicable plan of LabOne will constitute
the entire obligation of LabOne to Officer with respect to such
termination, and will also constitute full settlement of any claim
under law or in equity that Officer might otherwise assert against
LabOne or any of its employees on account of such termination.
(c) ANNUAL EXTENSION. Commencing on May 1, 1997 (the "Extension
Date") and on each succeeding anniversary of such Extension Date, unless
LabOne notifies Officer in accordance with the immediately following
sentence that Officer's employment under this Agreement will not be
extended, this Agreement and Officer's employment under this Agreement
shall automatically and without further action be extended for one (1)
year from such Extension Date or anniversary thereof on the same terms
and conditions as are set forth herein. If LabOne elects not to extend
Officer's employment under this Agreement as provided in the preceding
sentence, it shall do so by notifying Officer in writing at least sixty
(60) days prior to the Extension Date or the applicable anniversary
thereof. If LabOne elects not to extend Officer's employment under
this Agreement as provided above, such election shall be treated as
a termination of Officer without cause within the meaning of Section
9.1(e) of this Agreement and LabOne shall pay to Officer, in addition
to any other sums which may be due to Officer, the lump sum severance
payment provided for in Section 9.1(e).
SECTION 2
DUTIES
2.1 GENERAL DUTIES. Officer shall serve LabOne in the capacities
of Executive Vice President-Finance, Chief Financial Officer and Treasurer,
reporting directly to the Chairman of the Board of Directors of LabOne.
Officer shall be responsible for performing the duties generally required
of such positions and such other duties in relation to LabOne consistent
with Officer's positions as shall from time to time be assigned to Officer
by the Board of Directors or the Chairman of the Board of Directors.
2.2 FULL TIME. During the term hereof, Officer agrees to devote
his full time, attention and skill to the performance of his duties.
2.3 BEST EFFORTS. Officer agrees that he will at all times
faithfully, industriously and to the best of his ability, experience
and talents, perform all of the duties that may be required of and from
him as described above.
2.4 INDEMNIFICATION AND D & 0 INSURANCE. LabOne shall provide
to Officer coverage under LabOne's director and officer liability
insurance and indemnification By-laws, as fully and to the same extent
as the same are provided to similar executive officers of LabOne.
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SECTION 3
BASE SALARY
3.1 ANNUAL BASE SALARY. LabOne shall pay Officer, and Officer shall
accept from LabOne in full payment for Officer's full time services
hereunder, compensation at the rate of Two Hundred Thousand ($200,000)
per annum, payable monthly in periodic equal installments during the year.
Such salary shall be reviewed from time to time, but not less often than
annually, by the Board of Directors of LabOne and will be subject to
such increases, but not decreases, as the Board of Directors of LabOne
may determine, having due regard for the efforts of Officer and the
results, both financial and otherwise, of LabOne's operations during
Officer's tenure.
3.2 REIMBURSEMENT OF EXPENSES. LabOne shall reimburse Officer for
such reasonable out-of-pocket expenses as are incurred by Officer in
order to render the services contemplated hereunder.
3.3 TAX WITHHOLDINGS. LabOne shall deduct from the compensation
payable to Officer all federal, state, and local income tax, social
security, FICA, FUTA and other withholdings as required by law.
SECTION 4
BONUSES AND FRINGE BENEFITS
4.1 SPECIAL BONUS. As an incentive to induce Officer to continue
his employment with LabOne for the term of this Agreement, LabOne shall
pay to Officer upon his execution of this Agreement a special one-time
bonus of Fifty Thousand Dollars ($50,000).
4.2 ANNUAL INCENTIVE BONUS. During the term hereof, Officer shall
be eligible to receive an annual incentive bonus based upon the performance
of LabOne in relation to predetermined financial goals established by the
Compensation Committee of the Board of Directors of LabOne. Bonuses for
less than a full year of service may be granted at the discretion of the
Compensation Committee.
4.3 STOCK OPTION. Simultaneously with the execution and delivery
of this Agreement, the Long-Term Incentive Plan Committee of the Board
of Directors of LabOne has granted to Officer under the LabOne Long-Term
Incentive Plan a non-qualified stock option agreement for Fifty Thousand
(50,000) shares of the common stock of LabOne.
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4.4 OTHER FRINGE BENEFITS. Officer shall be entitled to an annual
vacation consistent with LabOne's vacation policies for similar executive
officers and to participate in such fringe benefit programs as LabOne may
make available from time to time to similar executive officers, which shall
include reasonable hospital and major medical insurance coverage, long term
disability and life insurance in amounts and on terms no less favorable
than those provided to similar executive officers of LabOne.
SECTION 5
NON-COMPETITION
5.1 RESTRICTIVE COVENANTS. In consideration for Officer's employment
with LabOne and in further consideration for the compensation provided to
Officer in Sections 3 and 4 hereof, Officer agrees that during the term of
his employment pursuant to this Agreement, and for a period of two (2)
years after the termination for any reason of his employment pursuant to
this Agreement, he will not, without the prior written consent of LabOne,
directly or indirectly, individually or in concert with others, or through
the medium of any other corporation, partnership, syndicate, association,
joint venture, or other entity or as an employee, officer, director, agent,
consultant or affiliate, compete with LabOne, within the hereinafter
described region, in (i) the urine or blood chemistry testing or analysis
business for the insurance industry, or (ii) the urine or blood chemistry
container or other supply business for the insurance industry, or (iii)
the clinical laboratory testing or substance abuse testing businesses, or
(iv) any other business engaged in by LabOne as of the date of the
termination of Officer's employment with LabOne, and Officer will not
solicit or accept any such business described in any of subparts (i)
through (iv) above and which competes with LabOne from any customer who
is served by LabOne as of the date of the termination of Officer's
employment pursuant hereto, or cause or induce any present or future
employee of LabOne to leave the employ of LabOne to accept employment
with Officer or with any such entity or person. The region referred
to above shall consist of any territory in which LabOne or any of its
representatives or agents, as of the date of the termination of
Officer's employment pursuant hereto, provides, sells, offers for sale
or solicits the sale of urine or blood chemistry testing or analysis,
or urine or blood chemistry containers or other supplies related thereto,
or clinical laboratory or substance abuse testing, or other services or
products. LabOne and Officer agree that in the event that any provision
of this Section 5.1 is void or constitutes an unreasonable restriction
against Officer, such provision shall not be rendered void, but shall apply
with respect to such time or territory or to such other extent as may
constitute a reasonable restriction under the circumstances. The
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foregoing provisions shall not prohibit Officer from owning not more than
3% of the total shares of all classes of stock outstanding of any publicly
held company.
5.2 INJUNCTIVE RELIEF. LabOne shall be entitled to appropriate
injunctive relief in any court of competent jurisdiction to enforce its
rights under Sections 5, 6, 7 and 8 of this Agreement, in addition to
any other rights and remedies available to LabOne at law or in equity,
it being agreed that any violation of Sections 5, 6, 7 or 8 of this
Agreement by Officer is reasonably likely to cause irreparable damage
to LabOne which will be difficult or impossible to value in monetary
damages.
5.3 CHARITABLE ACTIVITIES. Nothing in this Section 5 shall
be construed as preventing Officer from engaging in charitable,
professional, religious or civic activities such as serving on a
school board, or as a member of or officer of a professional organization,
provided such activity or organization does not compete directly with
LabOne.
SECTION 6
CONFIDENTIAL INFORMATION
6.1 CONFIDENTIALITY. During the term of and at any time after
the termination of this Agreement, Officer will hold in trust and
confidence and will not divulge, disclose or convey to any person,
firm, corporation or other entity and will keep secret and confidential
all trade secrets, proprietary information and confidential information
heretofore or hereafter acquired by him concerning LabOne, Head Office
Reference Laboratory Ltd., or Seafield Capital Corporation, and will
not use for himself or others the same in any manner, except to the
extent that such information should become no longer a trade secret,
proprietary or confidential. Such trade secrets, proprietary information
and confidential information shall be deemed to include, but shall not
be limited to, information, whether written or not:
(a) of a technical nature, such as but not limited to, technology,
inventions, discoveries, improvements, processes, formulae, ideas,
know-how, methods, compositions, computer software programs or research
projects, including the identity of research organizations and
researchers,
(b) of a business nature, such as but not limited to information
concerning costs, profits, supplies, suppliers, marketing, sales or lists
of customers, and
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(c) pertaining to future developments, such as but not limited
to information concerning research and development or future marketing
methods.
The restrictions contained above shall not apply to:
(i) information which at the time of disclosure by
LabOne to Officer is in the public domain; or
(ii) information which at the time of disclosure by
LabOne to Officer constituted confidential information
hereunder, but which thereafter becomes part of the public
domain by publication or otherwise through no fault of
Officer.
SECTION 7
DEVELOPMENTS
7.1 DEVELOPMENTS. Officer will promptly disclose to LabOne
(in form satisfactory to LabOne) all information, technology,
inventions, discoveries, improvements, processes, formulae, ideas,
know-how, methods, compositions, research projects, computer software
programs and developments, whether or not patentable or copyrightable
(collectively "Information"), that Officer by himself or in conjunction
with any other person or entity conceives, makes, develops or acquires
during the term of this Agreement, and that:
(a) are or relate or pertain to the assets, properties, or existing
or contemplated business or research activities of LabOne, or
(b) are suggested by, arise out of or result from, directly or
indirectly, Officer's association with LabOne, or
(c) arise out of or result, directly or indirectly, in part or
fully, from the use of LabOne's time, labor, materials facilities or
other resources (collectively "Developments").
Any Information fitting within any of the descriptions contained
in subsections (a), (b) or (c) of this Section 7.1 that is disclosed
to any other person, firm or other entity by Officer or used in any
manner by Officer within one (1) year following the termination of this
Agreement shall be presumed to have been conceived, made, developed or
acquired during the term of this Agreement and, thus, to constitute a
Development.
7.2 ASSIGNMENT TO LABONE. Officer hereby assigns, transfers and
conveys to LabOne all of his right, title and interest in and to any and
all such Developments, which Developments shall become and remain the sole
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and exclusive property of LabOne. At any time and from time to time, upon
the request of LabOne, Officer will execute and deliver any and all
instruments, documents and papers, give evidence and do any and all
other acts which, in the reasonable opinion of counsel for LabOne, are
or may be necessary or desirable to document such transfer, or to enable
LabOne to file and process applications for and to acquire, maintain and
enforce any and all patents, trademarks, registrations or copyrights with
respect to any such Developments, or to obtain any extension, validation,
re-issue, continuance or renewal of any such patent, trademark or copyright.
LabOne will be responsible for the preparation of any such instruments,
documents and papers and for the implementation of any such proceedings
and will reimburse Officer for all reasonable expenses incurred by him in
compliance with the provisions of this paragraph.
SECTION 8
PROPERTY OF LABONE
8.1 All correspondence, notes, recordings, documents and other
materials and reproductions thereof pertaining to any aspect of the
business of LabOne shall be the property of and shall be delivered to
and retained by LabOne upon termination of this Agreement.
SECTION 9
TERMINATION
9.1 TERMINATION. Officer's employment pursuant to this Agreement
shall terminate upon the occurrence of any of the following events:
(a) DEATH. In the event that Officer dies during the term of this
Agreement, LabOne shall pay to his executors or administrators an amount
equal to the installments of his base salary payable for the month in
which he dies and any annual incentive bonus for the previous year if
such has been approved but not paid, and such payments, together with
the arrangements provided for by any stock option or other agreement
between LabOne and Officer in effect at the time and by any other
applicable plan of LabOne will constitute the entire obligation of
LabOne to Officer and will also constitute full settlement of any
claim under law or in equity that Officer's executors, heirs or assigns
or any other person claiming under or through him might otherwise assert
against LabOne or any of its employees on account of his death.
(b) DISABILITY. In the event that Officer continues unable to
fully perform his duties and responsibilities hereunder by reason of
illness, injury or mental or physical disability or incapacity for ninety
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(90) consecutive days, during which time he shall continue to be compensated
for monthly installments of base salary and any annual incentive bonus for
the previous year if such has been approved but not paid, Officer's employment
pursuant to this Agreement may be terminated by LabOne, and such payments,
together with the arrangements provided for by any stock option or other
agreement between LabOne and Officer in effect at the time and by any other
applicable plan of LabOne will constitute the entire obligation of
LabOne to Officer and will also constitute full settlement of any claim
under law or in equity that Officer might otherwise assert against LabOne
or any of its employees on account of such termination. Officer agrees,
in the event of any dispute under this Section 9.1, to submit to a
physical examination by a reputable licensed physician selected by
LabOne and to accept LabOne's decision based on the results thereof.
(c) VOLUNTARY TERMINATION. Officer's employment may be
voluntarily terminated upon Officer giving sixty (60) days' prior
written notice to LabOne. In the event Officer voluntarily terminates
his employment, LabOne shall pay to Officer an amount equal to his base
salary payable through the date of termination of employment and any
annual incentive bonus for the previous year if such has been approved
but not paid, and such payments, together with the arrangements provided
for by any stock option or other agreement between LabOne and Officer
in effect at the time and by any other applicable plan of LabOne will
constitute the entire obligation of LabOne to Officer and will also
constitute full settlement of any claim under law or in equity that
Officer might otherwise assert against LabOne or any of its employees
on account of his termination.
(d) TERMINATION FOR CAUSE. Officer's employment may be terminated
by LabOne at any time for cause. In the event that Officer is terminated
by LabOne for cause, LabOne shall pay to Officer his base salary which
may have accrued to the date of termination and any annual incentive
bonus for the previous year if such has been approved but not paid, and
such payments, together with the arrangements provided for by any stock
option or other agreement between LabOne and Officer in effect at the
time and by any other applicable plan of LabOne will constitute the
entire obligation of LabOne to Officer and will also constitute full
settlement of any claim under law or in equity that Officer might
otherwise assert against LabOne or any of its employees on account of
his termination. Only the following actions, failures or events by or
affecting Officer shall constitute "cause" for termination of Officer
by LabOne (i) willful and continued failure by Officer to substantially
perform his duties provided herein after a written demand for substantial
performance is delivered to Officer by the Board of Directors of LabOne,
which demand identifies with reasonable specificity the manner in which
Officer has not substantially performed his duties, and Officer fails to
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comply with such demand within a reasonable time; (ii) the engaging by
Officer of gross misconduct or gross negligence materially injurious to
LabOne; or (iii) Officer's conviction of having committed a felony.
Notwithstanding the foregoing, Officer shall not be deemed to have been
terminated by LabOne for cause unless and until there shall have been
delivered to him a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the Board
of Directors of LabOne finding that, in the good faith opinion of the
Board of Directors, LabOne has cause for the termination of employment
of Officer as set forth in any of clauses (i) through (iii) above and
specifying the particulars thereof in reasonable detail. The findings
of the Board of Directors shall not be binding on the arbitrators or
other finders of fact in connection with any litigation or dispute
arising out of this Agreement.
(e) TERMINATION WITHOUT CAUSE. In the event that LabOne
terminates Officer's employment for reasons other than death,
disability, or cause as listed in subsection (d) above, then in
addition to any other sums to which Officer may be entitled under
this Agreement, LabOne shall pay to Officer, on or before the last
day of employment, a lump sum severance payment equal to (i) the
installments of base salary due for the balance of the then current
term of this Agreement, plus (ii) fifty percent (50%) of the annual
base salary payable to Officer by LabOne immediately prior to the
termination of employment, which payments, together with the
arrangements provided for by any stock option or other agreement
between LabOne and Officer in effect at the time and by any other
applicable plan of LabOne will constitute the entire obligation of
LabOne to Officer and will also constitute full settlement of any claim
under law or in equity that Officer might otherwise assert against LabOne
or any of its employees on account of his termination.
SECTION 10
SURVIVAL
10.1 Notwithstanding the termination of Officer's employment
pursuant to the provisions of Section 9 hereof, or the expiration of
the term of this Agreement, Officer's obligations under Sections 5, 6,
7 and 8 hereof, the provisions for injunctive relief against Officer
in Sections 5.2 and 12.2 hereof and the provisions for arbitration in
Section 12.1 hereof shall continue in full force and effect. Any right,
power or obligation imposed or conferred upon LabOne or the Board of
Directors of LabOne by the terms of this Agreement shall inure to the
benefit of and be binding upon any person or entity into which LabOne
is consolidated or merged and the Board of Directors or other governing
body of any such corporation or other entity.
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SECTION 11
ASSISTANCE IN LITIGATION
11.1 Officer shall, upon reasonable notice, furnish such information
and assistance to LabOne as may reasonably be required by LabOne in
connection with any litigation in which LabOne or any of its subsidiaries
or affiliates is or may become a party.
SECTION 12
ARBITRATION
12.1 METHODS. Except as provided in Section 12.2 below, any
difference, controversy, claim or dispute between the parties arising
out of this Agreement, or the breach thereof, shall be settled by binding
arbitration before a panel of three arbitrators selected as follows:
each party shall select one neutral arbitrator from the American
Arbitration Association's approved list of arbitrators. The two
arbitrators so selected by the parties shall select a third neutral
arbitrator and the three so selected shall settle the dispute under
the duly promulgated Commercial Arbitration Rules of the American
Arbitration Association or its successor. The arbitration shall be
conducted in Lenexa, Kansas. The award of the arbitrators may be
entered as a judgment in any Court in the State of Kansas or in any
court having jurisdiction thereof.
12.2 INJUNCTIVE RELIEF. Notwithstanding Section 12.1 above,
LabOne shall be entitled to seek judicial injunctive relief to enforce
its rights under Sections 5, 6, 7 and 8 of this Agreement as provided
in Section 5.2 hereof.
SECTION 13
MISCELLANEOUS
13.1 ASSIGNMENT BY OFFICER. This is a personal Agreement on the
part of Officer and may not be sold, assigned, transferred or conveyed
by Officer. This Agreement may not be sold, assigned, transferred or
conveyed by LabOne except in connection with a merger, consolidation or
sale of all or substantially all of the assets of LabOne and then only
to the successor to LabOne's operations.
13.2 ENTIRE AGREEMENT. This Agreement contains the entire
agreement among the parties hereto and there are no representations,
inducements, promises, agreements, arrangements, or undertakings,
oral or written, among the parties as to the subject matter covered.
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13.3 SEVERABILITY. Should any part of this Agreement be declared
invalid for any reason, such invalidity shall not affect the validity of
any remaining portion hereof and such remaining portion shall continue
in full force and effect as if this Agreement had been originally executed
without including the invalid part.
13.4 GOVERNING LAW. This Agreement and its performance shall be
interpreted and construed in accordance with the laws of the State of
Kansas.
13.5 TITLES. Titles and captions in no way define, limit, extend
or describe the scope of this Agreement or the intent of any provision
hereof.
13.6 AMENDMENTS. No changes, alterations, modifications, additions,
or qualifications to the terms of this Agreement shall be made or be
binding unless made in writing and executed by the parties in the same
manner as the Agreement.
13.7 NO WAIVER. Failure by either party to enforce any right
granted by this Agreement shall not constitute a waiver of such right
and waiver of any provision of this Agreement shall not constitute a
waiver of any other provision.
13.8 NOTICES. Any notice, instrument or communication required
or permitted under this Agreement shall be deemed to have been effectively
given and made if in writing and when served by personal delivery to the
party for whom it is intended, or three business days after being deposited,
postage prepaid, registered or certified mail, return receipt requested,
in the United States mail, addressed to the party for whom it is intended
at the following addresses, or at such other addresses as the party to
be notified may have designated in writing to the other:
Officer: Xxxxxx X. Xxxxxxxx
00000 X. 000xx Xxxxxxx
Xxxxxx, Xxxxxx 00000
LabOne: LabOne, Inc.
00000 X. 00xx Xxxxxxx
Xxxxxx, Xxxxxx 00000
Attn: Chairman of the Board of
Directors
13.9 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the day and year first above written.
LABONE, INC.
By: /s/ W. Xxxxxx Xxxxx XX
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W. Xxxxxx Xxxxx XX, President
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------
XXXXXX X. XXXXXXXX
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