Exhibit 10.31
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of March 15, 2000, but
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is only effective as of the Effective Date (as defined below), by and among
XxxxxxXxxxxxx.xxx, a Delaware corporation ("HCC"), Xxxxxxxx.xxx, Inc., a
Delaware corporation ("VC"), and Xxxxxx X. Xxxx ("Employee").
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BACKGROUND
This Agreement is entered into in connection with and is ancillary to an
Agreement and Plan of Reorganization and Merger (the "Plan"), dated as of March
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15, 2000 among HCC, Acquisition Corp., a Delaware corporation and wholly owned
subsidiary of HCC ("Acquisition Corp"), and VC, pursuant to which Acquisition
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Corp is to merge with and into VC (the "Merger"), VC will continue as the
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surviving corporation in the merger, and the shares of VC capital stock
outstanding immediately prior to the effective time of the merger will be
converted into shares of HCC Common Stock. The date on which the Merger becomes
effective will be the effective date of this Agreement (the "Effective Date").
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In consideration for HCC's entering into and performing under the Plan,
Employee has agreed to concurrently enter into the Confidentiality Agreement and
the Non-Competition Agreement (as provided in Section 5).
VC and HCC are sometimes together referred to herein as the "Company".
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
of the parties contained herein, HCC and Employee hereby agree as follows:
1. Duties. Employee will be employed as a full-time employee of HCC and
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initially will serve as its President of VC, and agrees to perform such services
as are commensurate with such a position and as may be reasonably required or
directed by the Chief Executive Officer of HCC. Employee agrees to perform such
other duties and responsibilities, commensurate with Employee's position, as may
be reasonably required of him by the Chief Executive Officer of HCC. Employee
agrees that, to the best of Employee's ability and experience, Employee will at
all times conscientiously perform all of the duties and obligations assigned to
Employee in accordance with this Agreement.
2. Full-Time Employment. Employee's employment will be on a full-time
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basis, in accordance with standard employee policies for HCC. Except for such
activities, if any, as may be set forth in Schedule 1 attached hereto or as may
hereafter be consented to by HCC in its sole discretion, during Employee's
employment hereunder, Employee will not engage in any other business or render
any commercial or professional services, directly or indirectly, to any other
person or organization, whether for compensation or otherwise, provided that
Employee may (i) provide incidental assistance to family members on matters of
family business, and (ii) sit on the boards of charitable and nonprofit
organizations which do not compete with HCC, provided in each case that such
activities do not conflict with or materially interfere with Employee's
obligations to HCC. Employee may make personal investments in nonpublicly
traded
corporations, partnerships or other entities, which are not engaged in: (i) a
pharmacy or retail drugstore business (including but not limited to a business
involved in the provision of prescription, over-the-counter and health and
beauty products) that operates interactively via electronic media, including
over the Internet or (ii) a business, other than a manufacturing business, that
provides health information, products and services directly to the general
public (including linkages between consumers and health providers, payors and
ancillary entities) in various communications media, including but not limited
to radio, television, Internet, interactive television, interactive cable and
satellite (the foregoing description of business activities and markets shall be
referred to in this Agreement as "Competitive Businesses"). Notwithstanding
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anything to the contrary contained in this Agreement, Employee may make personal
investments in publicly traded corporations regardless of the business they are
engaged in, provided that Employee does not at any time own in excess of 1% of
the issued and outstanding stock of any such publicly traded corporation that is
engaged in any Competitive Businesses.
3. Place of Employment. During the term of employment, Employee shall
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render his services principally at the principal executive offices of the
Company, as mutually agreed. In addition, Employee shall do such traveling as
shall be reasonably necessary in connection with his duties and responsibilities
hereunder.
4. Compensation.
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(a) Salary. Employee's initial monthly base salary rate shall be
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$12,500 per month (the "Monthly Base Salary") ($150,000 on an annualized basis),
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subject to review and increase from time to time thereafter in accordance with
the Company's policies. Such salary shall be paid in accordance with the
Company's normal payroll practices.
(b) Business Expenses. The Company shall reimburse Employee for all
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reasonable business expenses incurred by Employee in the course of performing
services for the Company under this Agreement in accordance with the Company's
then existing policy relating to reimbursement of business expenses for the
Company's employees.
(c) Other Benefits. Employee will be entitled to participate in or
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receive benefits commensurate with Employee's position and those of similarly
situated employees of HCC in accordance with HCC's standard employee policies in
effect from time to time. HCC may change, amend, modify or terminate any
benefit plan from time to time.
(d) Withholding, Etc. The Company may make such deductions,
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withholdings and other payments from all sums payable pursuant to this Agreement
which are required by law or as Employee requests in writing for taxes and other
charges.
(e) Vacation. Employee shall be entitled to no less than three weeks
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of paid vacation or personal time off during each full calendar year of his
employment hereunder (and a pro rata portion thereof for any period of such
employment that is less than a full calendar year) or such greater amount of
vacation, personal and other leave as HCC provides to similarly situated
employees of HCC.
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5. Confidentiality. Simultaneously with the execution of this Agreement,
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Employee is executing and delivering and hereby adopts and agrees to be bound by
the form of Confidential Information and Invention Assignment Agreement attached
hereto as Schedule 2 (the "Confidentiality Agreement").
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6. Termination. Employee's employment with the Company will be on an "at
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will" basis, which means that either Employee or HCC may terminate Employee's
employment at any time for any reason or no reason, without further obligation
or liability, subject to the terms and conditions of this Agreement. Except in
the case of Employee's fraud or theft or misappropriation of Company property,
the Company's sole recourse against Employee for breaches under this Agreement
shall be to exercise its right to terminate Employee's employment with the
Company. In particular,
(a) Employee's employment shall terminate upon the death of Employee.
(b) The Company may terminate Employee's employment by written notice
to Employee in the event Employee is unable, for a period of three or more
consecutive months or 150 calendar days during any consecutive twelve-month
period, due to illness, accident or other physical or mental incapacity, to
perform his duties hereunder.
(c) The Company may terminate Employee's employment for "Cause" (as
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defined below) by written notice to Employee.
(d) The Company may terminate Employee's employment for any other
reason by written notice to Employee.
(e) Employee may terminate Employee's employment for any reason at any
time by written notice to the Company.
(f) The Confidentiality Agreement, the Non-Competition Agreement
executed by the Employee concurrently herewith and Sections 5, 6, 7, 8 and 9 of
this Agreement shall survive the termination of this Agreement as a result of
the termination of Employee's employment for any reason.
7. Definition of "Cause." As used in this Agreement, the term "Cause"
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shall mean:
(a) Employee personally engaging in knowing and intentional illegal
conduct which is seriously injurious to HCC or its affiliates;
(b) Employee being convicted of a felony, or committing a material act
of dishonesty or fraud against, or the material misappropriation of property
belonging to, HCC or its affiliates;
(c) Employee habitually neglecting his duties hereunder,
(d) Employee knowingly and intentionally breaching any material term
of this Agreement, the Confidentiality Agreement or the Noncompetition Agreement
executed by the
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Employee concurrently herewith (the "Noncompetition Agreement");
(e) Employee's commencement of employment with another employer while
he is an employee of HCC; or
(f) any material breach by Employee of any material provision of this
Agreement or the Confidentiality Agreement or the Non-Competition Agreement
executed by the Employee concurrently herewith which continues incurred for
thirty (30) days following notice thereof.
8. Severance Payment. If HCC terminates Employee's employment pursuant to
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Section 6(d) during the period beginning on the Effective Date and ending one
year thereafter (the "Severance Period"), then HCC will pay Employee on a
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monthly basis and at a monthly rate the Monthly Base Salary for the greater of
(i) six (6) months or (ii) each month remaining in the Severance Period (subject
to proration for any partial month so remaining), subject to Employee's
continued compliance with all the terms of the Confidentiality Information and
the Non-Competition Agreement and the surviving terms of this Agreement, and
provided, however, that if Employee begins rendering services as an employee or
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consultant in excess of thirty (30) hours per week to any person or entity
during the Severance Period and receives salary for such services, then the
Company will cease making such severance payments at such time. Employee has no
obligation to seek employment during the Severance Period.
9. Miscellaneous.
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(a) Notices. Any and all notices permitted or required to be given
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under this Agreement must be in writing. Notices will be deemed given (i) when
personally received or when sent by facsimile transmission (as evidenced by the
sender's confirmation receipt), (ii) on the first business day after having been
sent by commercial overnight courier with written verification of receipt, or
(iii) seventy-two (72) hours after having been sent by registered or certified
mail from a location on the United States mainland, return receipt requested,
postage prepaid, whichever occurs first, at the address set forth below or at
any new address, notice of which will have been given in accordance with this
Section 9(a):
If to HCC:
XxxxxxXxxxxxx.xxx
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Chief Executive Officer
If to Employee:
Xxxxxx X. Xxxx
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with a copy to:
Venable, Baetjer, Xxxxxx and Civiletti, LLP
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx X. Xxxxxxxxxxx
Tel. No. (000) 000-0000
Facsimile No. (000) 000-0000
(b) Entire Agreement; Amendments. This Agreement, the Confidentiality
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Agreement and the Noncompetition Agreement contain the entire agreement and
supersede and replace all prior agreements between HCC or Company and Employee
concerning the subject matter contained in this Agreement. This Agreement may
not be changed or modified in whole or in part except by a writing signed by the
party against whom enforcement of the change or modification is sought.
(c) Successors and Assigns. This Agreement will not be assignable by
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either Employee or HCC, except that the rights and obligations of HCC under this
Agreement may be assigned to a corporation which becomes the successor or HCC to
HCC or Company as the result of a merger or other change of control in the
ownership of HCC or Company.
(d) Governing Law. This Agreement will be governed by and interpreted
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according to the substantive laws of the State of Delaware without regard to
such state's conflicts law. Each party hereto agrees to submit to the
jurisdiction of the state and Federal courts located within the State of
Delaware and agrees that venue for any dispute hereunder shall lie exclusively
in such courts.
(e) No Waiver. The failure of either party to insist on strict
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compliance with any of the terms of this Agreement in any instance or instances
will not be deemed to be a waiver of any term of this Agreement or of that
party's right to require strict compliance with the terms of this Agreement in
any other instance.
(f) Severability. Employee and HCC recognize that the limitations
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contained herein are reasonably and properly required for the adequate
protection of the interests of HCC. If for any reason a court of competent
jurisdiction or binding arbitration proceeding finds any provision of this
Agreement, or the application thereof, to be unenforceable, the remaining
provisions of this Agreement will be interpreted so as best to reasonably effect
the intent of the parties. The parties further agree that the court or
arbitrator shall replace any such invalid or unenforceable provisions with valid
and enforceable provisions designed to achieve, to the extent possible, the
business purposes and intent of such unenforceable provisions.
(g) Counterparts. This Agreement may be executed in counterparts
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which when taken together will constitute one instrument. Any copy of this
Agreement with the original signatures of all parties appended will constitute
an original.
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(h) Attorneys' Fees. In the event any dispute arises hereunder the court
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shall have the authority to award costs and attorneys' fees to the prevailing
party.
IN WITNESS WHEREOF, this Agreement is made and effective as of the
Effective Date.
XXXXXXXXXXXXX.XXX EMPLOYEE
By: /s/ Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxx
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XXXXXX X. XXXX
Title: President and CEO
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XXXXXXXX.XXX, INC.
By: /s/ Xxxxxx X. Xxxx
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Title: President
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SCHEDULE 1
PERMITTED ACTIVITIES
Xxxxxx X Xxxx Insurance Trust 1986
RMH Investment Associates LLC
XXXXXX XXXX CAPITAL L.L.C.
XXXXXX XXXX GROUP L.L.C.
Home Health L.L.C
Xxxxxxxxx Xxxxx LLC
Xxxxx Xxxxxxxx LLC
Xxxxxxxx Xxxxxx LLC
Xxxxxxxxxxxx.xxx
Xxxxxxxxx.xxx
Intrepid Connecticut Ave. L.L.C.
Intrepid C Street L.L.C.
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SCHEDULE 2
CONFIDENTIALITY AGREEMENT
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SCHEDULE 3
NONCOMPETITION AGREEMENT
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