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EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is effective as of December
14, 1999 (the "Effective Date"), by and between HEARx Ltd., a Delaware
corporation ("HEARx"), and Xxxx X. Xxxxx, M.D. ("Executive").
RECITALS
1. HEARx operates a network of hearing care centers which provide
a full range of audiological products and services for the hearing impaired (the
"Business");
2. Executive is recognized as having experience in the management
and operation of companies that are in the Business;
3. HEARx's Board of Directors (the "Board") has determined that it
is in the best interests of HEARx and its stockholders to assure that HEARx will
have the continued dedication of Executive, notwithstanding the possibility,
threat or occurrence of a Change in Control (as defined in Section 4.7);
4. The Board believes it is imperative (a) to diminish the
inevitable and significant distractions of Executive and dilution of the time of
Executive, by virtue of the personal uncertainties and risks created by a
pending or threatened Change in Control, (b) to encourage Executive's full
attention and dedication to HEARx currently and in the event of any threatened
or pending Change in Control and (c) to provide Executive with compensation
arrangements in the event of a Change in Control which provide Executive with
financial security, which are competitive with those of other companies, and
which ensure that Executive receives the compensation and benefits intended to
be provided to Executive by HEARx through this Agreement and HEARx's various
employee benefit and compensation plans and arrangements without regard to any
Excise Tax (as defined in Section 4.11(a)); and
5. To accomplish the objectives described in the two immediately
preceding recitals, the Board desires to cause HEARx to enter into this
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by the
parties, HEARx and Executive agree as follows:
ARTICLE I
EMPLOYMENT, REPORTING AND DUTIES
1.1 EMPLOYMENT. On the terms and subject to the conditions of this
Agreement, HEARx hereby employs and engages the services of Executive to serve
as, and Executive agrees to serve as and perform the functions of, Chairman of
the Board and Chief Executive Officer (collectively, the "Office") of HEARx for
the Term (as defined in Section 4.1) and for the compensation and benefits
stated herein.
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1.2 MAJOR RESPONSIBILITIES; AUTHORITY. Executive shall have the
authorities, duties, responsibilities and status (including offices, titles and
reporting requirements) usually associated with the Office of companies having
operations and assets similar in nature and value to the operations and assets
of HEARx and at least commensurate in all material respects with the most
significant of those held, exercised and assigned at any time during the 90-day
period immediately preceding the Effective Date, and such other duties as the
Board shall determine and Executive shall accept from time to time.
1.3 EXTENT OF SERVICE. During the Term, and excluding any periods of
vacation and sick leave to which Executive is entitled, Executive agrees to
devote reasonable time and energies to the Business consistent with past
practice and shall not, during the Term, be engaged in any business activity
which would interfere or prevent Executive from carrying out his duties under
this Agreement; provided, however, that this Section 1.3 shall not be construed
as preventing Executive from investing his assets in such form or manner as will
not require services on the part of Executive in the operation of the affairs of
any company in which such investments are made.
1.4 LOCATION. Executive shall not be required to move from
Executive's home in Palm Beach County, Florida in the performance of his duties,
responsibilities and obligations hereunder.
ARTICLE II
COMPENSATION AND RELATED ITEMS
2.1 COMPENSATION.
(a) BASE SALARY. Until a Change in Control occurs, as
compensation and in consideration for the services to be rendered by Executive
under this Agreement and for the performance by Executive of the usual
obligations of such employment, HEARx agrees to pay Executive, and Executive
agrees to accept, a base salary (the "Base Salary") effective January 1, 2000 of
at least $300,000 per annum which shall be paid in accordance with HEARx's
standard payroll practice. Executive's Base Salary shall be subject to review
annually by the Board in accordance with HEARx's review policies and practices
for executives as in effect at the time of any such review. If a Change in
Control occurs, Executive's Base Salary for the next calendar year and each
subsequent calender year during the Term must increase by at least 20% over his
Base Salary during the previous calendar year.
(b) BONUS. At the end of each calendar year during the Term,
the Executive shall be eligible to receive an annual bonus (the "Annual Bonus"),
based upon a performance evaluation criteria which shall be consistent with the
criteria used by the Board for its current evaluation of Executive; provided
that, if, in any calender year during the Term, HEARx achieves the net income
target approved by the Board for such calendar year (the "Net Income Target")
the Executive must receive an Annual Bonus equal to at least 50% of Executive's
Base Salary for the previous calender year. For the purposes of this Agreement,
net income must be determined in accordance with generally accepted accounting
principles, consistently applied.
(c) PERCENTAGE OF NET INCOME. If, in any calender year
during the Term, HEARx achieves the Net Income Target approved by the Board for
such calendar year, no more than 100
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days after the end of such calender year, HEARx must pay to Executive an amount
equal to 1% of HEARx's net income for such calender year.
(d) 1999 BONUS. Notwithstanding the foregoing, for the
calendar year ended December 31, 1999, the Executive's Annual Bonus must not be
less than $125,000.
(e) ADDITIONAL COMPENSATION. In addition to the Base Salary
provided for in Section 2.1(a), Executive or Executive's family, as the case may
be, shall be entitled to:
(i) participate in, and shall receive all benefits
under:
(A) any and all welfare benefit and similar
employee benefit plans, programs, arrangements or
policies that are generally made available by HEARx and
its affiliates (as defined in Section 4.11(l)) now or at
any time in the future to other key employees or retired
key employees, including any hospitalization, medical,
prescription, dental, disability, salary continuance,
individual life insurance, executive life insurance,
group life insurance, accidental death insurance and
travel accident insurance plans, programs, arrangements
and policies; and
(B) in addition to the incentive
compensation provided for in Section 2.1(b), Executive
will be entitled to any and all incentive, savings,
retirement, profit sharing, pension, stock option,
restricted stock, employee stock ownership, supplemental
executive retirement and other employee benefit plans,
programs, arrangements and policies that are generally
made available by HEARx and its affiliates now or at any
time in the future to officers and other key employees;
additionally, pension benefits from HEARx when Executive
is eligible for and elects retirement shall be
calculated so as to provide a benefit based on actual
credited years and months of service with HEARx plus a
benefit calculated equivalent to an added ten years of
credited service;
(ii) annual vacations and sick leave in accordance
with the vacation and sick leave policies of HEARx and its affiliates
that are now or at any time in the future in effect with respect to
officers and other key employees, during which time Executive's
compensation shall be paid in full; and
(iii) fringe benefits in accordance with the fringe
benefit policies of HEARx and its affiliates that are now or at any time
in the future in effect with respect to officers and other key
employees.
2.2 EXPENSES. HEARx agrees that, during the Term, Executive shall be
allowed reasonable and necessary business expenses in connection with the
performance of his duties hereunder within guidelines established by the Board
as in effect at any time with respect to key employees ("Business Expenses"),
including reasonable and necessary expenses for food, travel, lodging,
entertainment and other items in the promotion of the Business within such
guidelines. HEARx shall promptly reimburse Executive for all Business Expenses
incurred by Executive upon Executive's presentation to HEARx of an itemized
account thereof, together with receipts, vouchers
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or other supporting documentation. After termination or expiration of the Term,
however such termination or expiration may come about, Executive shall have
ninety (90) days after the date of such termination or expiration to submit
Business Expenses incurred during the Term to HEARx for reimbursement.
ARTICLE III
EXCULPATION
HEARx agrees that Executive will not be liable for any losses, expenses,
costs or damages caused by or resulting from the recommendations, suggestions,
actions, errors, omissions or mistakes of Executive undertaken or proposed by
Executive if Executive acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of HEARx. Executive's
rights under this Article III shall not be deemed exclusive of, but shall be
cumulative with, any and all other rights (including rights of indemnification
and advancement of expenses) to which Executive may now or at any time in the
future be entitled under applicable law, HEARx's certificate of incorporation,
HEARx's bylaws, any agreement (including this Agreement), any vote of
stockholders, any resolution of directors, or otherwise. Nothing contained in
this Article III will prevent the termination of Executive's employment in
accordance with the provisions of this Agreement.
ARTICLE IV
TERM AND TERMINATION
4.1 TERM. Subject to Section 4.2, the term of this Agreement shall
be for five (5) years commencing on the Effective Date ("Term"); provided,
however, that if a Change in Control occurs prior to the second anniversary of
the Effective Date, the Term shall be extended to end on the fifth anniversary
of such Change in Control.
4.2 TERMINATION OF TERM. Except as may otherwise be provided herein,
the Term shall terminate:
(a) Thirty (30) days after written notice of termination is
given by either party to the other; or
(b) On Executive's death or, at HEARx's option, upon
Executive's becoming Disabled (as defined in Section 4.9).
Any notice of termination given by HEARx to Executive under Section 4.2(a) above
shall specify whether such termination is with or without Cause (as defined in
Section 4.4). Any notice of termination given by Executive to HEARx under
Section 4.2(a) above shall specify whether such termination is made with or
without Good Reason (as defined in Section 4.5) or Good Reason-Change in Control
(as defined in Section 4.6).
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4.3 OBLIGATIONS OF HEARX UPON TERMINATION.
(a) CAUSE; WITHOUT GOOD REASON; AND WITHOUT GOOD REASON-CHANGE IN
CONTROL. If HEARx terminates the Term with Cause pursuant to Section 4.2(a), or
if Executive terminates the Term without Good Reason or without Good
Reason-Change in Control pursuant to Section 4.2(a), the Term shall terminate
without further obligations to Executive, other than those obligations owing or
accrued to, vested in, or earned by Executive through the date of termination,
including:
(i) Executive's Base Salary in effect at the time of
such termination through the date of termination to the extent it
remains unpaid; and
(ii) all compensation previously deferred (together
with any accrued interest thereon) and not yet paid by HEARx, and any
accrued vacation pay not yet paid by HEARx; and
(iii) all other amounts or benefits owing or accrued
to, vested in or earned by Executive through the date of termination
under the then existing or applicable plans, programs, arrangements and
policies of HEARx and its affiliates, including any such plans,
programs, arrangements or policies described in Section 2.1(b).
The obligations owing or accrued to, vested in, or earned by Executive through
the date of termination, including such amounts and benefits specified in
clauses (i), (ii) and (iii) of this Section 4.3(a), are collectively referred to
as the "Accrued Obligations." The aggregate amount of such obligations owing or
accrued to, vested in, or earned by Executive through the date of termination,
including the Accrued Obligations, shall be paid by HEARx to Executive in
accordance with the plans, programs or agreements under which the Accrued
Obligations were earned.
(b) GOOD REASON. If Executive terminates the Term with Good
Reason pursuant to Section 4.2(a):
(1) HEARx shall pay the aggregate of the following
amounts to Executive in one lump sum within thirty (30) days after the
date of such termination or in a manner and at such later time as
specified by Executive, provided that all such payments must be made no
later than the end of the Term as in effect immediately before the date
of such termination:
(i) to the extent not theretofore paid,
Executive's Base Salary in effect at the time of such
termination (but prior to giving effect to any reduction of
Executive's Base Salary which may have precipitated such
termination) for the duration of the Term as in effect
immediately before the date of such termination; and
(ii) if more than three years of the Term
have elapsed on the date of such termination, an amount equal to
one (1) times Executive's Base Salary in
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effect at the time of such termination (but prior to giving
effect to any reduction of Executive's Base Salary which may
have precipitated such termination); and
(iii) an amount equal to (A) one (1) times the
average of all bonus, profit sharing and other incentive
payments made by HEARx to Executive in respect of the two (2)
calendar years immediately preceding such termination, and (B)
the pro-rata share of Executive's target bonus, profit sharing
and other incentive payments for the calendar year in which such
termination occurred based upon the proportion that the number
of days that have elapsed in such calendar year up to and
including the date of termination bears to 365; and
(iv) in the case of compensation previously
deferred by Executive, all amounts previously deferred (together
with any accrued interest thereon) and not yet paid by HEARx,
and any accrued vacation pay not yet paid by HEARx; and
(v) all other amounts or benefits owing or
accrued to, vested in, or earned by Executive through the date
of termination under the then existing or applicable plans,
programs, arrangements and policies of HEARx and its affiliates,
including any such plans, programs, arrangements or policies
described in Section 2.1(b); and
(vi) any and all other Accrued Obligations
not otherwise described in clauses (i), (ii), (iii) or (iv) of
this Section 4.3(b)(1); and
(2) Executive shall receive the following additional
benefits:
(i) for a 548-day period commencing on the
date of termination of the Term (the "Good Reason Benefits
Period"), Executive shall continue to be covered under each of
the medical, dental, life insurance, accident benefit and other
welfare benefit (exclusive of short- and long-term disability
benefit) programs of HEARx in effect and applicable to Executive
immediately prior to such termination, and HEARx shall pay the
costs therefor except to the extent that Executive already pays
all or any portion thereof; provided, however, that if Executive
obtains any of the welfare benefits provided for under this
sentence from a new employer, HEARx's obligation to provide such
welfare benefits should be secondary to that of such new
employer. Executive's coverage under HEARx's medical and dental
programs for the Good Reason Benefits Period shall be included
in the calculation of the "Period of Coverage" to be provided to
Executive pursuant to Section 4980B(f)(2)(B) of the Internal
Revenue Code of 1986, as amended (the "Code"), and Executive's
right to "Continuation Coverage" under Section 4980B(f)(2) of
the Code. The amount of the "Applicable Premium" to be charged
Executive under Section 4980B(f)(4) for Continuation Coverage
shall never be greater than the monthly amount charged Executive
for medical and dental coverage prior to the termination of the
Term; and
(ii) shall be fully vested in any and all
options, restricted stock, stock appreciation rights, cash
equivalent stock appreciation rights or any other
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similar rights based on the fair market value of or otherwise
relating to HEARx's common stock (collectively, "Stock Incentive
Rights") which are outstanding immediately prior to the
termination of the Term, and Executive may exercise any such
vested Stock Incentive Rights during the two year period
commencing on the date of termination of the Term,
notwithstanding any provision otherwise in any plan or agreement
awarding or granting any Stock Incentive Right to Executive; and
(iii) shall be fully vested in any and all
benefits accrued under any "employee pension benefit plan," as
defined in Section 3(2)(A) of the Employee Retirement Income
Security Act of 1947, as amended ("ERISA"), of HEARx
("Retirement Plan"); and
(iv) shall receive credit in the calculation
of the accrued benefit under HEARx's Pension Plan ("Pension
Plan") for (A) the compensation to be paid to Executive pursuant
to Section 4.3(b)(1)(ii) and (B) one (1) year of service in
addition to the service accrued by Executive through the date
that the Term is terminated. If the benefits set forth in this
clause would cause the Pension Plan to lose its qualification
under Section 401(a) of the Code, then the benefits accrued
hereunder shall accrue to Executive under HEARx's Supplemental
Executive Retirement Plan ("SERP").
(c) WITHOUT CAUSE BEFORE A CHANGE IN CONTROL. If HEARx
terminates the Term without Cause before the occurrence of a Change in Control
pursuant to Section 4.2(a):
(1) HEARx shall pay the aggregate of the following
amounts to Executive in one lump sum within thirty (30) days after the
date of such termination or in a manner and at such later time as
specified by Executive, provided that all such payments must be made no
later than the end of the Term as in effect immediately before the date
of such termination:
(i) to the extent not theretofore paid,
Executive's Base Salary in effect at the time of such
termination for the duration of the Term as in effect
immediately before the date of such termination; and
(ii) if more than three years of the Term
have elapsed on the date of such termination, an amount equal to
one (1) times Executive's Base Salary in effect at the time of
such termination; and
(iii) an amount equal to the sum of (A) one
(1) times the average of all bonus, profit sharing and other
incentive payments made by HEARx to Executive in respect of the
two calendar years immediately preceding such termination, and
(B) the pro-rata share of Executive's target bonus, profit
sharing and other incentive payments for the calendar year in
which such termination occurred based upon the proportion that
the number of days that have elapsed in such calendar year up to
and including the date of termination bears to 365; and
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(iv) in the case of compensation previously
deferred by Executive, all amounts previously deferred (together
with any accrued interest thereon) and not yet paid by HEARx,
and any accrued vacation pay not yet paid by HEARx; and
(v) all other amounts or benefits owing or
accrued to, vested in, or earned by Executive through the date
of termination under the then existing or applicable plans,
programs, arrangements and policies of HEARx and its affiliates,
including any such plans, programs, arrangements or policies
described in Section 2.1(b); and
(vi) any and all other Accrued Obligations
not otherwise described in clauses (i), (ii), (iii) or (iv) of
this Section 4.3(b)(1); and
(2) Executive shall receive the following additional
benefits:
(i) for a 548-day period commencing on the
date of termination of the Term (the "Without Cause Benefits
Period"), Executive shall continue to be covered under each of
the medical, dental, life insurance, accident benefit and other
welfare benefit (exclusive of short- and long-term disability
benefit) programs of HEARx in effect and applicable to Executive
immediately prior to such termination, and HEARx shall pay the
costs therefor except to the extent that Executive already pays
all or any portion thereof; provided, however, that if Executive
obtains any of the welfare benefits provided for under this
sentence from a new employer, HEARx's obligation to provide such
welfare benefits will thereupon cease. Executive's coverage
under HEARx's medical and dental programs for the Without Cause
Benefits Period shall be included in the calculation of the
"Period of Coverage" to be provided to Executive pursuant to
Section 4980B(f)(2)(B) of the Code, and Executive's right to
"Continuation Coverage" under Section 4980B(f)(2) of the Code.
The amount of the "Applicable Premium" to be charged Executive
under Section 4980B(f)(4) for Continuation Coverage shall never
be greater than the monthly amount charged Executive for medical
and dental coverage prior to the termination of the Term; and
(ii) shall be fully vested in any and all
Stock Incentive Rights which are outstanding immediately prior
to the termination of the Term, and Executive may exercise any
such vested Stock Incentive Rights during the two year period
commencing on the date of termination of the Term,
notwithstanding any provision otherwise in any plan or agreement
awarding or granting any Stock Incentive Right to Executive; and
(iii) shall be fully vested in any and all
benefits accrued under any Retirement Plan; and
(iv) shall receive credit in the calculation
of the accrued benefit under HEARx's Pension Plan for (A) the
compensation to be paid to Executive pursuant to Section
4.3(c)(1)(ii) and (B) one (1) year of service in addition to the
service accrued by Executive through the date that the Term is
terminated. If the
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benefits set forth in this clause would cause the Pension Plan
to lose its qualification under Section 401(a) of the Code, then
the benefits accrued hereunder shall accrue to Executive under
HEARx's SERP.
(d) GOOD REASON-CHANGE IN CONTROL; WITHOUT CAUSE ON OR
AFTER A CHANGE IN CONTROL. If Executive terminates the Term with Good
Reason-Change in Control pursuant to Section 4.2(a), or if HEARx terminates the
Term without Cause on or after the occurrence of a Change in Control pursuant to
Section 4.2(a):
(1) HEARx shall pay the aggregate of the following
amounts to Executive in one lump sum within thirty (30) days after the
date of such termination or in a manner and at such later time as
specified by Executive, provided that all such payments must be made no
later than the end of the Term as in effect immediately before the date
of such termination:
(i) to the extent not theretofore paid,
Executive's Base Salary in effect at the time of such
termination (but prior to giving effect to any reduction of
Executive's Base Salary which may have precipitated such
termination) for the duration of the Term as in effect
immediately before the date of such termination; and
(ii) an amount equal to the sum of (A) the
greater of (a) Executive's Base Salary times the number of years
remaining in the original five-year term of this Agreement or
(b) three (3) times Executive's Base Salary in effect at the
time of such termination (but prior to giving effect to any
reduction therein which may have precipitated such termination),
(B) three (3) times the average of all bonus, profit sharing and
other incentive payments made by HEARx to Executive in respect
of the two (2) calendar years immediately preceding such
termination and (C) the pro-rata share of Executive's target
bonus, profit sharing and other incentive payments for the
calendar year in which such termination occurred based upon the
proportion that the number of days that have elapsed in such
calendar year up to and including the date of termination bears
to 365; and
(iii) in the case of compensation previously
deferred by Executive, all amounts previously deferred (together
with any accrued interest thereon) and not yet paid by HEARx,
and any accrued vacation pay not yet paid by HEARx; and
(iv) all other amounts or benefits owing or
accrued to, vested in, or earned by Executive through the date
of termination under the then existing or applicable plans,
programs, arrangements and policies of HEARx and its affiliates,
including any such plans, programs, arrangements or policies
described in Section 2.1(b); and
(v) any and all other Accrued Obligations
not otherwise described in clauses (i), (ii), (iii) or (iv) of
this Section 4.3(d)(1); and
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(2) Executive shall receive the following additional
benefits:
(i) for the three year period commencing on
the date of termination of the Term (the "Three Year Period"),
Executive shall continue to be covered under each of the
medical, dental, life insurance, accident benefit and other
welfare benefit (exclusive of short- and long-term disability
benefit) programs of HEARx in effect and applicable to Executive
immediately prior to the time of such termination, and HEARx
shall pay the costs therefor except to the extent that Executive
already pays all or any portion thereof; provided, however, that
if Executive obtains any of the welfare benefits provided for
under this sentence from a new employer, HEARx's obligation to
provide such welfare benefits shall be secondary to that of such
new employer. Executive's coverage under HEARx's medical and
dental programs for the Three Year Period shall not be included
in the calculation of the "Period of Coverage" to be provided to
Executive pursuant to Section 4980B(f)(2)(B) of the Code, and
Executive's right to "Continuation Coverage" under Section
4980B(f)(2) of the Code for medical and dental benefits under
HEARx's medical and dental programs shall commence on the first
day following the end of the Three Year Period. The amount of
the "Applicable Premium" to be charged Executive under Section
4980B(f)(4) for Continuation Coverage shall never be greater
than the monthly amount charged Executive for medical and dental
coverage during the Three Year Period; and
(ii) shall be fully vested in any and all
Stock Incentive Rights which are outstanding immediately prior
to the termination of the Term, and Executive may exercise any
such vested Stock Incentive Rights during the Three Year Period,
notwithstanding any provision otherwise in any plan or agreement
awarding or granting any Stock Incentive Right to Executive; and
(iii) shall be fully vested in any and all
benefits accrued under any Retirement Plan; and
(iv) shall receive credit in the calculation
of the accrued benefit under the Pension Plan for (A) the
compensation to be paid to Executive pursuant to Section
4.3(d)(1)(ii) and (B) three (3) years of service in addition to
the service accrued by Executive through the date that the Term
is terminated. If the benefits set forth in this clause would
cause the Pension Plan to lose its qualification under Section
401(a) of the Code, then the benefits accrued hereunder shall
accrue to Executive under the SERP, and if the Executive is not
a participant in the SERP, the actual lump sum equivalent of the
benefit described in this clause shall be paid in accordance
with Section 4.3(d)(1).
(e) DEATH. If Executive's employment is terminated under
Section 4.2(b) by reason of Executive's death, HEARx shall pay to Executive's
legal representatives the full amount of the obligations owing or accrued to,
vested in or earned by Executive through the date of Executive's death,
including the Accrued Obligations in accordance with the plans, programs or
agreements under which the Accrued Obligations were earned. Notwithstanding the
provisions of
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any agreement pursuant to which Stock Incentive Rights were granted, any granted
but unvested Stock Incentive Rights will automatically vest on the date of
Executive's death. Executive's legal representative may exercise any Stock
Incentive Rights which vest pursuant to this Section 4.3(e) during a one year
period following Executive's death. Anything in this Agreement to the contrary
notwithstanding, Executive's family shall be entitled to receive benefits
provided by HEARx and any of its affiliates to surviving families under the then
existing or applicable plans, programs or arrangements and policies of HEARx and
its affiliates.
(f) DISABILITY. If Executive's employment is terminated
under Section 4.2(b) by reason of Executive's becoming Disabled, HEARx shall pay
to Executive or Executive's legal representative the full amount of the
obligations owing or accrued to, vested in or earned by Executive through the
date of termination, including the Accrued Obligations in accordance with the
plans, programs or agreements under which the Accrued Obligations were earned.
Notwithstanding the provisions of any agreement pursuant to which Stock
Incentive Rights were granted, any granted but unvested Stock Incentive Rights
will automatically vest on the date of Executive's termination by reason of his
becoming Disabled. Executive or Executive's legal representative may exercise
any Stock Incentive Rights which vest pursuant to this Section 4.3(f) during a
one year period following Executive's termination by reason of his becoming
Disabled.
4.4 CAUSE. As used in this Agreement, the term "Cause" means (a)
willful misconduct by Executive or gross neglect by Executive of his duties as
an employee, officer or director of HEARx which continues for more than thirty
(30) days after Executive's receipt of written notice from the Board to
Executive specifically identifying the willful misconduct or gross negligence of
Executive and directing Executive to discontinue the same, (b) the commission by
Executive of a crime constituting a felony or (c) the commission by Executive of
an act, other than an act taken in good faith within the course and scope of
Executive's employment, which is directly detrimental to HEARx and exposes HEARx
to material liability.
4.5 GOOD REASON. As used in this Agreement, the term "Good Reason"
means the breach of any material provision of this Agreement by HEARx (including
any removal of Executive, without Cause, from the position of the Office during
the Term) which is not cured within thirty (30) days after written notice from
Executive to HEARx specifically identifying such breach; provided, however, that
the term "Good Reason" shall not include any breach of any provision of this
Agreement that occurs after the occurrence of a Change in Control.
4.6 GOOD REASON-CHANGE IN CONTROL.
(a) Except as provided in Section 4.6(b), as used in this
Agreement, the term "Good Reason-Change in Control" means after the occurrence
of a Change in Control, a determination by Executive that any one or more of the
following events has occurred:
(i) a material change in the nature of Executive's
Office, including his authorities, duties, responsibilities or status
(including offices, titles or reporting requirements), from those in
effect immediately prior to the Change in Control; or
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(ii) the relocation of Executive's place of
employment to a location in excess of fifty (50) miles from the place of
Executive's employment immediately prior to the Change in Control,
except for required travel on HEARx business to an extent substantially
equivalent to Executive's business travel obligations immediately prior
to the Change in Control; or
(iii) any reduction by HEARx of Executive's Base
Salary, or a material reduction in his bonus, profit sharing or other
incentive benefits, from those in effect immediately prior to the Change
in Control; or
(iv) the failure by HEARx to increase Executive's
Base Salary in a manner consistent (both as to frequency and percentage
increase) with (A) HEARx's practices in effect immediately prior to the
Change in Control with respect to similarly positioned employees or (B)
HEARx's practices implemented subsequent to the Change in Control with
respect to similarly positioned employees, whichever is more favorable
to Executive; or
(v) the failure of HEARx to continue in effect
Executive's participation in (A) HEARx's employee benefit plans,
programs, arrangements and policies, at a level substantially equivalent
in value to and on a basis consistent with the relative levels of
participation of other similarly positioned employees, as in effect
immediately prior to the Change in Control or (B) HEARx's employee
benefit plans, programs, arrangements and policies implemented
subsequent to the Change in Control with respect to similarly positioned
employees, whichever is more favorable to Executive; or
(vi) the failure of HEARx to obtain from a successor
(including a successor to a material portion of the business or assets
of HEARx) a satisfactory assumption in writing of HEARx's obligations
under this Agreement; or
(vii) the failure of HEARx to continue to provide
Executive with office space, related facilities and support personnel
(including administrative and secretarial assistance) that are both
commensurate with the Office and Executive's responsibilities to and
position with HEARx immediately prior to the Change in Control and not
materially dissimilar to the office space, related facilities and
support personnel provided to other key executive officers of HEARx; or
(viii) HEARx notifies Executive of HEARx's intention
not to observe or perform one or more of the obligations of HEARx under
this Agreement; or
(ix) HEARx breaches any provision of this Agreement
and such breach is not cured within thirty (30) days after HEARx's
receipt of notice thereof from Executive.
(b) If, after the occurrence of a Change in Control,
Executive receives a written description from HEARx of the nature of Executive's
Office thereafter, stating Executive's authorities, duties, responsibilities,
status, salary, bonus and other employee benefits, or job location, and
Executive accepts such new authorities, duties, responsibilities, status,
salary, bonus and other employee benefits, or job location ("New Office") with
HEARx without determining that
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the New Office causes a Good Reason-Change in Control as set forth in Section
4.6(a), then for the remaining Term the New Office shall be the authorities,
duties, responsibilities, status, salary, bonus and other employee benefits, or
job location to be used by Executive in determining whether a Good Reason-Change
in Control occurs thereafter pursuant to Section 4.6(a).
4.7 CHANGE IN CONTROL. As used herein, the term "Change in Control"
shall mean the occurrence with respect to HEARx of any of the following events:
(a) a report on Schedule 13D is filed with the Securities
and Exchange Commission (the "SEC") pursuant to Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), disclosing that any
person, entity or group (within the meaning of Section 13(d) or 14(d) of the
Exchange Act), other than HEARx (or one of its subsidiaries) or any employee
benefit plan sponsored by HEARx (or one of its subsidiaries), is the beneficial
owner (as such term is defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of 30% or more of the outstanding common stock of
HEARx or the combined voting power of the then outstanding securities of HEARx;
(b) a report is filed by HEARx disclosing a response to
either Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act, Item 1 of Form 8-K promulgated under the Exchange Act, or any
similar reporting requirement hereafter promulgated by the SEC;
(c) any person, entity or group (within the meaning of
Section 13(d) or Section 14(d) of the Exchange Act), other than HEARx (or one of
its subsidiaries) or any employee benefit plan sponsored by HEARx (or one of its
subsidiaries), shall purchase securities pursuant to a tender offer or exchange
offer to acquire any common stock of HEARx (or securities convertible into
common stock) for cash, securities or any other consideration, provided that
after consummation of the offer, the person, entity or group in question is the
beneficial owner (as such term is defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of 30% or more of the combined voting
power of the then outstanding securities of HEARx (as determined under paragraph
(d) of Rule 13d-3 promulgated under the Exchange Act, in the case of rights to
acquire common stock);
(d) the stockholders of HEARx shall approve:
(i) any merger, consolidation or reorganization of
HEARx:
(A) in which HEARx is not the continuing or
surviving corporation,
(B) pursuant to which common stock of HEARx
would be converted into cash, securities or other property,
(C) with an entity which, prior to such
merger, consolidation or reorganization, owned 20% or more of
the combined voting power of the then outstanding securities of
HEARx, or
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(D) in which HEARx will not survive as an
independent, publicly owned corporation;
(ii) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or
substantially all the assets of HEARx, or
(iii) any liquidation or dissolution of HEARx;
(e) the stockholders of HEARx shall approve a merger,
consolidation, reorganization, recapitalization, exchange offer, purchase of
assets or other transaction after the consummation of which any person, entity
or group (within the meaning of Section 13(d) or Section 14(d) of the Exchange
Act) would own beneficially in excess of 30% of the outstanding common stock of
HEARx or in excess of 30% of the combined voting power of the then outstanding
securities of HEARx;
(f) HEARx's common stock is listed on none of the American
Stock Exchange, New York Stock Exchange and NASDAQ National Market System as a
result of a going-private transaction; or
(g) during any period of two consecutive years, the
individuals who at the beginning of such period constituted the Board cease for
any reason to constitute a majority of the Board, unless the election or
nomination for election by HEARx's stockholders of each new director during any
such two-year period was approved by the vote of two-thirds of the directors
then still in office who were directors at the beginning of such two-year
period.
4.8 DISABLED. As used herein, "Disabled" or "Disability" shall mean
a mental or physical impairment which, in the reasonable opinion of a qualified
doctor selected by HEARx, renders Executive unable to perform with reasonable
diligence the ordinary functions and duties of Executive on a full-time basis in
accordance with the terms of this Agreement, which inability continues for a
period of not fewer than 180 consecutive days.
4.9 RETURN OF MATERIALS; CONFIDENTIAL INFORMATION. In the event of
any termination of the Term, Executive shall promptly deliver to HEARx all
lists, books, records, literature, products and any other materials owned or
provided by HEARx in connection with Executive's employment hereunder. Executive
shall not at any time during or after the Term hereof use for himself or others,
or divulge to others, any secret or confidential information, knowledge or data
of HEARx obtained by Executive as a result of his employment unless authorized
by the Board.
4.10 CERTAIN ADDITIONAL PAYMENTS BY HEARX.
(a) Anything in this Agreement to the contrary
notwithstanding, if it shall be determined that any payment or distribution by
HEARx or any of its affiliates to or for the benefit of Executive, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (any such payments or distributions being individually
referred to herein as a "Payment," and any two or more of such payments or
distributions being referred to herein as
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"Payments"), would be subject to the excise tax imposed by Section 4999 of the
Code (such excise tax, together with any interest thereon, any penalties,
additions to tax, or additional amounts with respect to such excise tax, and any
interest in respect of such penalties, additions to tax or additional amounts,
being collectively referred herein to as the "Excise Tax"), then Executive shall
be entitled to receive and HEARx shall make an additional payment or payments
(individually referred to herein as a "Gross-Up Payment," and any two or more of
such additional payments being referred to herein as "Gross-Up Payments") in an
amount such that after payment by Executive of all taxes (as defined in Section
4.10(k)) imposed upon the Gross-Up Payment, Executive retains an amount of such
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 4.10(c) through
(i), any determination (individually, a "Determination") required to be made
under this Section 4.10(b), including whether a Gross-Up Payment is required and
the amount of such Gross-Up Payment, shall initially be made, at HEARx's
expense, by nationally recognized tax counsel mutually acceptable to HEARx and
Executive ("Tax Counsel"). Tax Counsel shall provide detailed supporting legal
authorities, calculations and documentation both to HEARx and Executive within
15 business days of the termination of Executive's employment, if applicable, or
such other time or times as is reasonably requested by HEARx or Executive. If
Tax Counsel makes the initial Determination that no Excise Tax is payable by
Executive with respect to a Payment or Payments, it shall furnish Executive with
an opinion reasonably acceptable to Executive that no Excise Tax will be imposed
with respect to any such Payment or Payments. Executive shall have the right to
dispute any Determination (a "Dispute") within 15 business days after delivery
of Tax Counsel's opinion with respect to such Determination. The Gross-Up
Payment, if any, as determined pursuant to such Determination shall, at HEARx's
expense, be paid by HEARx to Executive within five business days of Executive's
receipt of such Determination. The existence of a Dispute shall not in any way
affect Executive's right to receive the Gross-Up Payment in accordance with such
Determination. If there is no Dispute, such Determination shall be binding,
final and conclusive upon HEARx and Executive, subject in all respects, however,
to the provisions of Section 4.10(c) through (i) below. As a result of the
uncertainty in the application of Sections 4999 and 280G of the Code, it is
possible that Gross-Up Payments (or portions thereof) which will not have been
made by HEARx should have been made ("Underpayments"), and if upon any
reasonable written request from Executive or HEARx to Tax Counsel, or upon Tax
Counsel's own initiative, Tax Counsel, at HEARx's expense, thereafter determines
that Executive is required to make a payment of any Excise Tax or any additional
Excise Tax, as the case may be, Tax Counsel shall, at HEARx's expense, determine
the amount of the Underpayment that has occurred, and any such Underpayment
shall be promptly paid by HEARx to Executive.
(c) HEARx shall defend, hold harmless and indemnify
Executive on a fully grossed-up after tax basis from and against any and all
claims, losses, liabilities, obligations, damages, impositions, assessments,
demands, judgements, settlements, costs and expenses (including reasonable
attorneys', accountants', and experts' fees and expenses) with respect to any
tax liability of Executive resulting from any Final Determination (as defined in
Section 4.10(j)) that any Payment is subject to the Excise Tax.
(d) If a party hereto receives any written or oral
communication with respect to any question, adjustment, assessment or pending or
threatened audit, examination, investigation or
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administrative, court or other proceeding which, if pursued successfully, could
result in or give rise to a claim by Executive against HEARx under this Section
4.10(d) ("Claim"), including a claim for indemnification of Executive by HEARx
under Section 4.10(c), then such party shall promptly notify the other party
hereto in writing of such Claim ("Tax Claim Notice").
(e) If a Claim is asserted against Executive ("Executive
Claim"), Executive shall take or cause to be taken such action in connection
with contesting such Executive Claim as HEARx shall reasonably request in
writing from time to time, including the retention of counsel and experts as are
reasonably designated by HEARx (it being understood and agreed by the parties
hereto that the terms of any such retention shall expressly provide that HEARx
shall be solely responsible for the payment of any and all fees and
disbursements of such counsel and any experts) and the execution of powers of
attorney, provided that:
(i) within 30 calendar days after HEARx receives or
delivers, as the case may be, the Tax Claim Notice relating to such
Executive Claim (or such earlier date that any payment of the taxes
claimed is due from Executive, but in no event sooner than five calendar
days after HEARx receives or delivers such Tax Claim Notice), HEARx
shall have notified Executive in writing ("Election Notice") that HEARx
does not dispute its obligations (including its indemnity obligations)
under this Agreement and that HEARx elects to contest, and to control
the defense or prosecution of, such Executive Claim at HEARx's sole risk
and sole cost and expense; and
(ii) HEARx shall have advanced to Executive on an
interest-free basis, the total amount of the tax claimed for Executive,
at HEARx's request, to pay or cause to be paid the tax claimed, file a
claim for refund of such tax and, subject to the provisions of the last
sentence of Section 4.10(g), xxx for a refund of such tax if such claim
for refund is disallowed by the appropriate taxing authority (it being
understood and agreed by the parties hereto that HEARx shall only be
entitled to xxx for a refund and HEARx shall not be entitled to initiate
any proceeding in, for example, United States Tax Court) and shall
indemnify and hold Executive harmless, on a fully grossed-up after tax
basis, from any tax imposed with respect to such advance or with respect
to any imputed income with respect to such advance; and
(iii) HEARx shall reimburse Executive for any and all
costs and expenses resulting from any such request by HEARx and shall
indemnify and hold Executive harmless, on fully grossed-up after-tax
basis, from any tax imposed as a result of such reimbursement.
(f) Subject to the provisions of Section 4.10(e), HEARx
shall have the right to defend or prosecute, at the sole cost, expense and risk
of HEARx, such Executive Claim by all appropriate proceedings, which proceedings
shall be defended or prosecuted diligently by HEARx to a Final Determination;
provided, however, that (i) HEARx shall not, without Executive's prior written
consent, enter into any compromise or settlement of such Executive Claim that
would adversely affect Executive, (ii) any request from HEARx to Executive
regarding any extension of the statute of limitations relating to assessment,
payment or collection of taxes for the taxable year of Executive with respect to
which the contested issues involved in, and amount of, the Executive
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Claim relate is limited solely to such contested issues with respect to the
Executive Claim and Executive shall be entitled to settle or contest, in his
sole and absolute discretion, any other issue raised by the Internal Revenue
Service or any other taxing authority. So long as HEARx is diligently defending
or prosecuting such Executive Claim, Executive shall provide or cause to be
provided to HEARx any information reasonably requested by HEARx that relates to
such Executive Claim, and shall otherwise cooperate with HEARx and its
representatives in good faith to contest effectively such Executive Claim. HEARx
shall keep Executive informed of all developments and events relating to any
such Executive Claim (including providing to Executive copies of all written
materials pertaining to any such Executive Claim), and Executive or his
authorized representatives shall be entitled, at Executive's expense, to
participate in all conferences, meetings and proceedings relating to any such
Executive Claim.
(g) If, after actual receipt by Executive of an amount of a
tax claimed (pursuant to an Executive Claim) that has been advanced by HEARx
pursuant to Section 4.10(e)(ii), the extent of the liability of HEARx hereunder
with respect to such tax claimed has been established by a Final Determination,
Executive shall promptly pay or cause to be paid to HEARx any refund actually
received by, or actually credited to, Executive with respect to such tax
(together with any interest paid or credited thereon by the taxing authority and
any recovery of legal fees from such taxing authority related thereto), except
to the extent that any amounts are then due and payable buy HEARx to Executive,
whether under the provisions of this Agreement or otherwise. If, after the
receipt by Executive of an amount advanced by HEARx pursuant to Section
4.10(e)(ii), a determination is made by the Internal Revenue Service or other
appropriate taxing authority that Executive shall not be entitled to any refund
with respect to such tax claimed and HEARx does not notify Executive in writing
of its intent to contest such denial of refund prior to the expiration of thirty
days after such determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of any Gross-Up Payments and other payments required
to be paid hereunder.
(h) With respect to any Executive Claim, if HEARx fails to
deliver an Election Notice to Executive within the period provided in Section
4.10(e)(i) or, after delivery of such Election Notice, HEARx fails to comply
with the provisions of Section 4.10(e)(ii) and (iii) and Section 4.10(f), then
Executive shall at any time thereafter have the right (but not the obligation),
at his election and in his sole and absolute discretion, to defend or prosecute,
at the sole cost, expense and risk of HEARx, such Executive Claim. Executive
shall have full control of such defense or prosecution and such proceedings,
including any settlement or compromise thereof. If requested by Executive, HEARx
shall cooperate, and shall cause its affiliates to cooperate, in good faith with
Executive and his authorized representatives in order to contest effectively
such Executive Claim. HEARx may attend, but not participate in or control, any
defense, prosecution, settlement or compromise of any Executive Claim controlled
by Executive pursuant to this Section4.10(h) and shall bear its own costs and
expenses with respect thereto. In the case of any Executive Claim that is
defended or prosecuted by Executive, Executive shall, from time to time, be
entitled to current payment, on a fully grossed-up after tax basis, from HEARx
with respect to costs and expenses incurred by Executive in connection with such
defense or prosecution.
(i) In the case of any Executive Claim that is defended or
prosecuted to a Final Determination pursuant to the terms of this Section
4.10(i), HEARx shall pay, on a fully grossed-up
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after tax basis, to Executive in immediately available funds the full amount of
any taxes arising or resulting from or incurred in connection with such
Executive Claim that have not theretofore been paid by HEARx to Executive,
together with the costs and expenses, on a fully grossed-up after tax basis,
incurred in connection therewith that have not theretofore been paid by HEARx to
Executive, within ten calendar days after such Final Determination. In the case
of any Executive Claim not covered by the preceding sentence, HEARx shall pay,
on a fully grossed-up after tax basis, to Executive in immediately available
funds the full amount of any taxes arising or resulting from or incurred in
connection with such Executive Claim at least ten calendar days before the date
payment of such taxes is due from Executive, except where payment of such taxes
is sooner required under the provisions of this Section 4.10(i), in which case
payment of such taxes (and payment, on a fully grossed-up after tax basis, of
any costs and expenses required to be paid under this Section 4.10(i)) shall be
made within the time and in the manner otherwise provided in this Section
4.10(i).
(j) For purposes of this Agreement, the term "Final
Determination" shall mean (A) a decision, judgment, decree or other order by a
court or other tribunal with appropriate jurisdiction, which has become final
and non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit with respect to an overpayment of tax unless a suit
is filed on a timely basis; or (D) any final disposition by reason of the
expiration of all applicable statutes of limitations.
(k) For purposes of this Agreement, the terms "tax" and
"taxes" mean any and all taxes of any kind whatsoever (including any and all
Excise Taxes, income taxes, and employment taxes), together with any interest
thereon, any penalties, additions to tax or additional amounts with respect to
such taxes and any interest in respect of such penalties, additions to tax or
additional amounts.
(l) For purposes of this Agreement, the terms "affiliate"
and "affiliates" mean, when used with respect to any entity, individual or other
person, any other entity, individual or other person which, directly or
indirectly, through one or more intermediaries controls, or is controlled by, or
is under common control with, such entity, individual or person. The term
"control" and deviations thereof when used in the immediately preceding sentence
means the ownership, directly or indirectly, of 50% of more of the voting
securities of an entity or other person or possessing the power to direct or
cause the direction of the management and policies of such entity or other
person, whether through the ownership of voting securities, by contract or
otherwise.
4.11 LEGAL FEES AND EXPENSES. HEARx shall defend, hold harmless and
indemnify Executive on a fully grossed-up after tax basis from and against any
and all costs and expenses (including reasonable attorneys', accountants' and
experts' fees and expenses) incurred by Executive acting reasonably from time to
time as a result of any contest (regardless of the outcome) by HEARx or others
contesting the validity or enforcement of, or liability under, any term or
provision of this Agreement, plus in each case interest at the applicable
federal rate provided for in Section 7872(f)(2)(B) of the Code.
4.12 NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit Executive's continuing or future participation in any benefit,
bonus, incentive or other plan,
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program, arrangement or policy provided by HEARx or any of its affiliates
(including any plan, program, arrangement or policy described in Section 2.1(e))
and for which Executive and/or Executive's family may qualify, nor shall
anything herein limit or otherwise affect such rights as Executive and/or
Executive's family may have under any other agreements with HEARx or any of its
affiliates. Amounts which are vested benefits or which Executive and/or
Executive's family is otherwise entitled to receive under any plan, program,
arrangement or policy described in Section 2.1(e)) at or subsequent to the date
of termination of the Term shall be payable in accordance with such plan,
program, arrangement or policy.
4.13 FULL SETTLEMENT. HEARx's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which HEARx may have against Executive
or others. In no event shall Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to Executive
under any of the provisions of this Agreement.
ARTICLE V
SHARE OPTIONS
5.1 SHARE OPTIONS. Concurrent with the execution hereof, HEARx is
granting to Executive, nonqualified, five-year options to purchase 100,000
shares of HEARx's common stock, $0.10 par value per share (the "Common Stock"),
at an option price per share equal to the closing price of the Common Stock as
reported on the American Stock Exchange of the shares on the effective date of
this Agreement, subject to adjustment as provided in the Option Agreement dated
as of the date hereof (the "Options"). Such Options shall vest in and become
exercisable by Executive for all purposes as follows: 25% of such Options as of
each of the first four anniversary dates of the Effective Date, so that all of
such Options shall be fully vested in and exercisable by Executive as of the
fourth anniversary of the Effective Date. Also, if an Acceleration Event occurs,
all outstanding options to purchase HEARx's common stock, including those
options currently held by Executive, those Options granted hereunder and all
additional share options granted to Executive by HEARx after the Effective Date,
shall vest in and be exercisable by Executive (or, as the case may be, his
estate or representative) as of the Acceleration Event. "Acceleration Event"
shall mean for all purposes hereof any of the following events: (a) the Term is
terminated by Executive with Good Reason pursuant to Section 4.2(a) or by HEARx
without Cause, (b) Executive dies or (c) Executive becomes Disabled. The Option
Agreement shall provide that the shares of Common Stock issuable on exercise of
the options shall be treasury shares.
ARTICLE VI
GENERAL PROVISIONS
6.1 ARBITRATION OF DISPUTES.
(a) SCOPE OF AGREEMENT. HEARx and Executive agree to take
all reasonable steps to resolve any employment-related legal and/or judicial
disputes between them quickly and fairly. Should such matters remain unresolved,
HEARx and Executive agree that final and binding arbitration shall be the
exclusive remedy for any dispute between them relating to all common law,
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statutory, legal or judicial claims, including any claims for breach of contract
and for violation of laws forbidding discrimination on the basis of race, color,
religion, gender, age, national origin, disability, or any other legally
protected status.
(b) PROCEDURE. Arbitration shall be before a single
arbitrator in Miami, Florida, unless the parties mutually agree to hold the
arbitration in a different location. The arbitration will be administered in
accordance with the employment dispute rules of the American Arbitration
Association (AAA), and its procedures then in effect. If the parties cannot
agree on an arbitrator, then the AAA rules will govern selection. HEARx will pay
the fees of the AAA and the arbitrator. However, if Executive submits a matter
to arbitration, he shall be responsible for contributing to such fees an amount
equivalent to the amount required to file a complaint of the same type in the
state court which is geographically closest to the site of the arbitration if he
does not prevail in the arbitration.
The arbitrator's award is to be in writing, with reasons given and
evidence cited for the award. The arbitrator shall have the discretion to award
fees (including administrative charges, costs and/or reasonable attorney's fees
actually expended) to the prevailing party, in accordance with controlling law.
Any court of competent jurisdiction may enter judgment upon the award, either
by: (1) confirming the award, or (2) vacating, modifying or correcting the
award: (a) on any ground referred to in the U.S. Arbitration Act, (b) where the
findings of fact are not supported by substantial evidence, or (c) where the
conclusions of law are erroneous.
6.2 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the law of the State of Delaware.
6.3 ASSIGNABILITY. This Agreement is personal to Executive and
without the prior written consent of HEARx shall not be assignable by Executive
other than by will or the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by Executive's legal representatives
and heirs. This Agreement shall inure to the benefit of and be binding upon
HEARx and its successors and assigns. HEARx shall require any corporation,
entity, individual or other person who is the successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization or otherwise) to
all or substantially all of the business and/or assets of HEARx to expressly
assume and agree to perform, by a written agreement in form and substance
satisfactory to Executive, all of the obligations of HEARx under this Agreement.
As used in this Agreement, the term "HEARx" shall mean HEARx as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, written
agreement or otherwise.
6.4 WITHHOLDING. HEARx may withhold from any amounts payable under
this Agreement such federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
6.5 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the
entire agreement and understanding between Executive and HEARx and supersedes
any prior agreements or understandings, whether written or oral, with respect to
the subject matter hereof. Except as may be
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otherwise provided herein, this Agreement may not be amended or modified, except
by subsequent written agreement executed by both parties hereto.
6.6 MULTIPLE COUNTERPARTS. This Agreement may be executed in
multiple counterparts, each of which shall constitute an original, but all of
which together shall constitute one Agreement.
6.7 NOTICES. Any notice provided for in this Agreement shall be
deemed delivered upon deposit in the United States mails, registered or
certified mail, addressed to the party to whom directed at the addresses set
forth below or at such other addresses as may be substituted therefor by notice
given hereunder. Notice given by any other means must be in writing and shall be
deemed delivered only upon actual receipt.
If to HEARx:
0000 Xxxxxxxxxx Xxxxxxx
Xxxx Xxxx Xxxxx, XX 00000
Attn: President
If to Executive:
0000 Xxxxx Xxxxx Xxxxxxxxx
Xxxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxx, M.D.
6.8 WAIVER. The waiver of any breach of any term or condition of
this Agreement shall not be deemed to constitute the waiver of any breach of the
same or by any other term or condition of this Agreement.
6.9 SEVERABILITY. In the event any provision of this Agreement is
found to be unenforceable or invalid, such provision shall be severable from
this Agreement and shall not affect the enforceability or validity of any other
provision of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
HEARx LTD.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
------------------------------
Title: President and COO
------------------------------
/s/ Xxxx X. Xxxxx, M.D.
-------------------------------------
Xxxx X. Xxxxx, M.D.
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