Exhibit 10.10
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X. X. XXXXX DRUG COMPANY
EMPLOYMENT AGREEMENT
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This Employment Agreement is effective as of March 1, 1997, and is executed
as of July 8, 1997 by and between X.X. XXXXX DRUG COMPANY, a Missouri
corporation (the "Company") and Xxxxxx Xxxxxxx (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 Chief Compliance Officer
of X.X. Xxxxx Drug Co. and shall render her 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 Company for
the office of Chief Compliance Officer 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,
2000, and shall renew for successive one year terms thereafter unless either
party gives notice of nonrenewal of 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 her 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 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
in 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.
8. Confidentiality/Trade Secrets. The Executive acknowledges that her
position with the Company is one of the highest trust and confidence both by
reason of her position and by reason of her access to and contract with the
trade secrets and confidential and proprietary business information of the
Company and its affiliates. Both during the term of this Agreement and
thereafter, the Executive covenants and agrees as follows:
a. she shall use her best efforts and exercise utmost diligence to
protect and safeguard the trade secrets and confidential and proprietary
information of the Company and its affiliates 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. she shall not disclose any of such trade secrets and confidential
and proprietary information, except as may be required in the course of her
employment with the Company or by law; and
c. she shall not use, directly or indirectly, for her 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 and its affiliates,
whether prepared by the Executive or otherwise coming into his possession, shall
be the exclusive property of the Company and its affiliates 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 she will fully
inform the Company of and disclose to the Company all inventions, designs,
improvements, discoveries and processes ("Discoveries") which she has now or
may hereafter have during her employment with the Company and which pertain
or relate to the business of the Company or its affiliates 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 her 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 her 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 her employment and (i) if she elects to receive a Severance Payment
pursuant to Section 13(b) or 13(f) then also for the Severance Payment
Period, or (ii) if she resigns other than for Good Reason, as defined below,
or if she is terminated for Cause as defined below, then for a period of two
years after such resignation or termination, she 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
her employment and for two years thereafter she will not, either directly or
indirectly, for herself 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, 9 and 11 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 and the covenant
contained in Section 10 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 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 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 or pleads "nolo contendere"
to 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 breaches its obligations to pay any salary,
benefit or bonus due hereunder. 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, 11, 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.
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.
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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
attorney's 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 attorney's 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 attorney's 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 a duty to attempt to mitigate
the level of benefits payable by the Company to him hereunder and 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.
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, XX 00000
b. If to the Executive:
Xxxxxx Xxxxxxx
00 Xxxxxxxx Xxxxx
Xx. Xxxxxx, XX 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 insure to the benefit to the parties hereto, their respective
heirs, representatives, successors and assigns. This Agreement may not
be assigned by the Executive.
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 Xxxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx Xxxxxxx Title: Chairman
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