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Exhibit 10.22
SEVERANCE COMPENSATION
AND
RESTRICTIVE COVENANT AGREEMENT
This Severance Compensation and Restrictive Covenant Agreement
("Agreement") is dated as of October 2, 1995 and is effective as of the date
provided in Section 1(a) below between Healthdyne, Inc., a Georgia corporation
(the "Company"), and Xxxxx X. Xxxxxx (the "Executive").
WHEREAS, simultaneously with its execution of this Agreement, the
Company is entering into an Agreement and Plan of Merger (the "Merger
Agreement") with Xxxxx/Healthdyne Acquisition Company, Inc. ("Newco") and Xxxxx
Medical Corporation (Delaware) ("TM"), pursuant to which the Company and TM
will merge with and into Newco (the "Surviving Company") (such transaction
shall hereafter be referred to as the "Merger"), and such Merger will
constitute a Change in Control as defined herein; and
WHEREAS, TM's willingness to execute the Merger Agreement is
conditioned on Executive entering into the restrictive covenants contained in
this Agreement, and the parties hereto acknowledge the reasonableness of such
covenants, given the significant value that Executive will receive, directly
and indirectly, as a result of the Merger and given the payments to be made to
Executive pursuant to this Agreement in consideration of these covenants; and
WHEREAS, the Board of Directors of the Company has determined that it
is appropriate to reinforce and encourage the continued attention and
dedication of members of the Company's management, including the Executive, to
their assigned duties without distraction in potentially disturbing
circumstances arising from the Merger or any subsequent Change in Control; and
WHEREAS, the severance benefits payable by the Company to Executive as
provided herein are in part intended to ensure that Executive receives
reasonable compensation given the specific circumstances of Executive's
employment history with the Company;
NOW, THEREFORE, in consideration of their respective obligations to
one another set forth in this Agreement, and other good and valuable
consideration, the receipt, sufficiency and adequacy of which the parties
hereby acknowledge, the parties to this Agreement, intending to be legally
bound, hereby agree as follows:
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1. Term.
(a) This Agreement shall become effective immediately prior
to the Effective Time of the Merger (as defined in Section 2.2 of the Merger
Agreement), provided that the Executive is still employed by the Company at
such time. If the Merger does not become effective on or before May 31, 1996
or the Executive is not employed by the Company at the Effective Time, then
this Agreement shall be deemed never to have been in effect.
(b) This Agreement shall terminate, except to the extent that
any obligation of the Company hereunder remains unpaid as of such time, upon
the earliest of (i) three years after the Effective Time if a Change in Control
(other than the Merger) has not occurred after the Effective Time; (ii) the
Date of Termination of the Executive based on death, Disability (as defined in
Section 3(b)), Retirement (as defined in Section 3(c)) or Cause (as defined in
Section 3(d)) or by the Executive other than for Good Reason (as defined in
Section 3(e)); or (iii) three years from the date of a Change in Control (as
defined in Section 2) occurring after the Merger if the Executive's employment
with the Company has not terminated as of such time.
2. Change in Control. For purposes of this Agreement, a Change
in Control shall be deemed to have occurred if (a) there shall be consummated
(i) any consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the
Company's common stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of the
Company's common stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, or (b) the stockholders of the
Company approve any plan or proposal for the liquidation or dissolution of the
Company, or (c) any person (as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), shall
become the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of 30% of the Company's outstanding Common Stock, or (d) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the entire Board of Directors of the Company shall cease for
any reason to constitute a majority thereof unless the election, or the
nomination for election by the Company's stockholders, of each new director was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of the period; provided, however, that, in
the absence of a majority vote of the directors specified in subsection (d) of
this Section 2 to the contrary, the sale, lease, exchange or other disposition
(in one transaction or a series of related transactions) of less than 70%
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of the total fair market value of all of the assets of the Company immediately
prior to such transaction or transactions shall not be deemed to be a Change in
Control and provided further that the transaction or transactions which involve
the sale, lease, exchange or other disposition of 70% or more of the total fair
market value of all of the assets of the Company immediately prior to such
transaction or transactions shall be deemed to be a Change in Control even if
approved by the Board of Directors of the Company.
3. Termination Following Change in Control.
(a) If the Executive is still an employee of the Company
at the Effective Time or at the time of any other Change in Control, the
Executive shall be entitled to the compensation and benefits provided in
Section 4 upon the subsequent termination of the Executive's employment with
the Company by the Executive or by the Company during the term of this
Agreement, unless such termination is as a result of (i) the Executive's death;
(ii) the Executive's Disability; (iii) the Executive's Retirement; (iv) the
Executive's termination by the Company for Cause; or (v) the Executive's
decision to terminate employment other than for Good Reason.
(b) Disability. The term "Disability" as used in this
Agreement shall mean termination of the Executive's employment by the Company
as a result of the Executive's incapacity due to physical or mental illness,
provided that the Executive shall have been absent from his duties with the
Company on a full-time basis for six consecutive months and such absence shall
have continued unabated for 30 days after Notice of Termination as described in
Section 3(f) is thereafter given to the Executive by the Company.
(c) Retirement. The term "Retirement" as used in this
Agreement shall mean termination of the Executive's employment by the Company
based on the Executive's having attained age 65 or such later retirement age as
shall have been established pursuant to a written agreement between the Company
and the Executive. Termination of Executive's employment at a time when
Executive is eligible to receive benefits under the Company's Retirement
Benefit Award or the Company's Protective Umbrella for Lifelong Security of
Employees Program shall not constitute Retirement unless Executive shall have
attained such age.
(d) Cause. The term "Cause" for purposes of this
Agreement shall mean the Company's termination of the Executive's employment on
the basis of criminal or civil fraud on the part of the Executive involving a
material amount of funds of the Company. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to the
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Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Company's Board of
Directors at a meeting of the Board called and held for such purpose (after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board) finding
that in the good faith opinion of the Board the Executive was guilty of conduct
set forth in the first sentence of this Section 3(d) and specifying the
particulars thereof in detail. For purposes of this Agreement only, the
preparation and filing of fictitious, false or misleading claims in connection
with any federal, state or other third party medical reimbursement program, or
any other violation of any rule or regulation in respect of any federal, state
or other third party medical reimbursement program by the Company or any
subsidiary of the Company shall not be deemed to constitute "criminal fraud" or
"civil fraud".
(e) Good Reason. For purposes of this Agreement, "Good
Reason" shall mean any of the following actions taken by the Company without
the Executive's express written consent:
(i) The assignment to the Executive by the Company of
duties inconsistent with, or the reduction of the powers and functions
associated with, the Executive's position, duties, responsibilities and status
with the Company prior to a Change in Control, or an adverse change in the
Executive's titles or offices as in effect prior to a Change in Control, or any
removal of the Executive from or any failure to re-elect the Executive to any
of such positions, except in connection with the termination of his employment
for Disability, Retirement or Cause or as a result of the Executive's death or
by the Executive other than for Good Reason;
(ii) A reduction by the Company in the Executive's
base salary as in effect on the date hereof or as the same may be increased
from time to time during the term of this Agreement or the Company's failure to
increase (within 12 months of the Executive's last increase in base salary) the
Executive's base salary after a Change in Control in an amount which at least
equals, on a percentage basis, the average annual percentage increase in base
salary for all corporate officers of the Company effected in the preceding 36
months;
(iii) Any failure by the Company to continue in
effect any benefit plan, program or arrangement (including, without limitation,
any profit sharing plan, group annuity contract, group life insurance
supplement, or medical, dental, accident and disability plans) in which the
Executive was eligible to participate at the time of a Change in Control (or
any other plans providing the Executive with substantially similar benefits)
(hereinafter referred to as "Benefit Plans"), or the taking of any action by
the Company which would adversely affect the Executive's participation in or
materially reduce the
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Executive's benefits under any such Benefit Plan or deprive the Executive of
any fringe benefit enjoyed by the Executive at the time of a Change in Control;
(iv) Any failure by the Company to continue in effect
any incentive plan or arrangement (including, without limitations, any bonus or
contingent bonus arrangements and credits and the right to receive performance
awards and similar incentive compensation benefits) in which the Executive is
participating at the time of a Change in Control (or any other plans or
arrangements providing him with substantially similar benefits) (hereinafter
referred to as "Incentive Plans") or the taking of any action by the Company
which would adversely affect the Executive's participation in any such
Incentive Plan or reduce the Executive's benefits under any such Incentive
Plan, expressed as a percentage of his base salary, by more than five
percentage points in any fiscal year as compared to the immediately preceding
fiscal year, or any action to reduce Executive's bonuses under any Incentive
Plan by more than 20% of the average annual bonus previously paid to Executive
with respect to the preceding three fiscal years;
(v) Any failure by the Company to continue in effect
any plan or arrangement to receive securities of the Company (including,
without limitation, the Company's 1981 Incentive Stock Option Plan, 1983
Incentive Stock Option Plan, 1984 Nonqualified Stock Option Plan, 1985
Nonqualified Stock Option Plan, 1991 Stock Option Plan and 1993 Stock Option
Plan, Employee Stock Purchase Plan and any other plan or arrangement to receive
and exercise stock options, stock appreciation rights, restricted stock or
grants thereof) in which the Executive is participating or has the right to
participate in prior to a Change in Control (or plans or arrangements providing
him with substantially similar benefits) (hereinafter referred to as
"Securities Plans") or the taking of any action by the Company which would
adversely affect the Executive's participation in or materially reduce the
Executive's benefits under any such Securities Plan;
(vi) A relocation of the Company's principal
executive offices to a location outside of Marietta, Georgia, or the
Executive's relocation to any place other than the location at which the
Executive performed the Executive's duties prior to a Change in Control, except
for required travel by the Executive on the Company's business to an extent
substantially consistent with the Executive's business travel obligations
immediately prior to a Change in Control;
(vii) Any failure by the Company to provide the
Executive with the number of paid vacation days (or compensation therefor at
termination of employment) accrued to the Executive through the date of a
Change in Control, together with any earned but unused vacation days for the
vacation year in question;
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(viii) Any material breach by the Company of any
provision of this Agreement;
(ix) Any failure by the Company to obtain the
assumption of this Agreement by any successor or assign of the Company effected
in accordance with the provisions of Section 7(a) hereof;
(x) Any purported termination of the Executive's
employment which is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 3(f), and for purposes of this Agreement, no such
purported termination shall be effective; or
(xi) Any proposal or request by the Company after the
Effective Date to require that the Executive enter into a non-competition
agreement with the Company where the terms of such agreement as to its scope or
duration are greater than the terms set forth in Section 5 hereof .
(f) Notice of Termination. Any termination of the
Executive's employment by the Company for a reason specified in Section 3(b),
3(c) or 3(d) shall be communicated to the Executive by a Notice of Termination
prior to the effective date of the termination. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which shall
indicate whether such termination is for the reason set forth in Section 3(b),
3(c) or 3(d) and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. For purposes of this Agreement,
no termination of the Executive's employment by the Company shall constitute a
termination for Disability, Retirement or Cause unless such termination is
preceded by a Notice of Termination.
(g) Date of Termination. "Date of Termination" shall
mean (a) if the Executive's employment is terminated by the Company for
Disability, 30 days after a Notice of Termination is given to the Executive
(provided that the Executive shall not have returned to the performance of the
Executive's duties on a full-time basis during such 30-day period) or (b) if the
Executive's employment is terminated by the Company or the Executive for any
other reason, the date on which the Executive's termination is effective;
provided that, if within 30 days after any Notice of Termination is given to
the Executive by the Company the Executive notifies the Company that a dispute
exists concerning the termination, the Date of Termination shall be the date
the dispute is finally determined whether by mutual agreement by the parties or
upon final judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected).
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4. Compensation and Benefits upon Termination of Employment.
(a) If the Company shall terminate the Executive's
employment after a Change in Control other than pursuant to Section 3(b), 3(c)
or 3(d) and Section 3(f), or if the Executive shall terminate his employment
for Good Reason, then the Company shall pay to the Executive, as severance
compensation and in consideration of the Executive's adherence to the terms of
Section 5 hereof, the following:
(1) On the Date of Termination, the Company shall
become liable to the Executive for an amount equal to three times the
Executive's average annual compensation from the Company (as reported on Form
W-2 pursuant to applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code")) for the five years ending prior to the Date of
Termination, which amount shall be paid to the Executive in cash on or before
the fifth day following the Date of Termination.
(2) For a period of three years following the
Date of Termination, the Executive and anyone entitled to claim under or
through the Executive shall be entitled to all benefits under the group
hospitalization plan, health care plan, dental care plan, life or other
insurance or death benefit plan, or other present or future similar group
employee benefit plan or program of the Company for which key executives are
eligible at the date of a Change in Control, to the same extent as if the
Executive had continued to be an employee of the Company during such period and
such benefits shall, to the extent not fully paid under any such plan or
program, be paid by the Company.
(3) For a period of three years after the Date of
Termination, the Company shall allow the Executive to utilize for his business
and personal use any Company leased automobile previously furnished to him or
an equivalent type and style of automobile and shall reimburse the Executive
for the maintenance and repair costs of such automobile and extend full
insurance coverage relating to such automobile in favor of the Executive, as
additional named insured, during such three-year period. In addition, the
Executive shall be entitled, at the Executive's sole discretion, to exercise
any option to acquire such automobile pursuant to the terms which may be
provided in the lease agreement for the automobile in question.
(b) The parties hereto agree that the payments provided
in Section 4(a) hereof are reasonable compensation in light of the Executive's
services rendered to the Company and in consideration of the Executive's
adherence to the terms of Section 5 hereof. Neither party shall contest the
payment of such benefits as constituting an "excess parachute payment" within
the meaning of Section 280G(b)(1) of the Code. In the event that the Executive
becomes entitled to the compensation and benefits described in Section 4(a)
hereof (the "Compensation Payments") and the Company has determined,
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based upon the advise of tax counsel selected by the Company's independent
auditors and acceptable to the Executive, that, as a result of such
Compensation Payments and any other benefits or payments required to be taken
into account under Code Section 280G(b)(2) ("Parachute Payments"), any of such
Parachute Payments must be reported by the Company as "excess parachute
payments" and are therefore not deductible by the Company, the Company shall
pay to the Executive at the time specified in Section 4(a) above an additional
amount (the "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any of the tax imposed on the Executive by
Section 4999 of the Code (the "Excise Tax") and any Federal, state and local
income tax and Excise Tax upon the Gross-Up Payment, shall be equal to the
Parachute Payments determined prior to the application of this paragraph. The
value of any non-cash benefits or any deferred payment or benefit shall be
determined by the Company's independent auditors. For purposes of determining
the amount of the Gross-Up Payment, the Executive shall be deemed to pay
Federal income taxes at the highest marginal rate of Federal income taxation in
the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rates of taxation in the state and
locality of the Executive's residence on the Date of Termination, net of the
maximum reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes. In the event that the Excise Tax
payable by the Executive is subsequently determined to be less than the amount,
if any, taken into account hereunder at the time of termination of the
Executive's employment, the Executive shall repay to the Company at the time
that the amount of such reduction in Excise Tax is finally determined the
portion of the Gross-Up Payment attributable to such reduction plus interest on
the amount of such repayment at the rate provided for in Section 1274(b)(2)(B)
of the Code ("Repayment Amount"). In the event that the Excise Tax payable by
the Executive is determined to exceed the amount, if any, taken into account
hereunder at the time of the termination of the Executive's employment
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess (plus any interest and
penalty payable with respect to such excess) immediately prior to the time that
the amount of such excess is required to be paid by Executive ("Additional
Gross-up"), such that the net amount retained by the Executive, after deduction
of any Excise Tax on the Parachute Payments and any Federal, state and local
income tax and Excise Tax upon the Additional Gross-Up Payment, shall be equal
to the Parachute Payments determined prior to the application of this
paragraph. The obligation to pay any Repayment Amount or Additional Gross-up
shall remain in effect under this Agreement for the entire period during which
the Executive remains liable for the Excise Tax, including the period during
which any applicable statute of limitation remains open.
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(c) The payments provided in Section 4(a) above shall be
in lieu of any other severance compensation otherwise payable to Executive
under the Company's established severance compensation policies; provided,
however, that nothing in this Agreement shall affect or impair Executive's
vested rights under any other employee benefit plan or policy of the Company.
(d) Unless the Company determines that any Parachute
Payments made hereunder must be reported as "excess parachute payments" in
accordance with the third sentence of Section 4(b) above, neither party shall
file any return taking the position that the payment of such benefits
constitutes an "excess parachute payment" within the meaning of Section
280G(b)(1) of the Code. If the Internal Revenue Service proposes an assessment
of Excise Tax against the Executive in excess of the amount, if any, taken into
account at the time specified in Section 4(a), then, if the Company notifies
Executive in writing that the Company elects to contest such assessment at its
expense, unless the Executive waives the right to an Additional Gross-Up
Payment, the Executive (i) shall in good faith cooperate with the Company in
contesting such proposed assessment; and (ii) such Executive shall not settle
such contest without the written consent of the Company. Any such contest
shall be controlled by the Company, provided, however, that the Executive may
participate in such contest.
5. Protective Covenants
(a) Definitions
This Subsection sets forth the definition of certain
capitalized terms used in Subsections (a) through (f) of this Section 5.
(i) "Competing Business" shall mean a business
(other than the Company) that, directly or through a controlled subsidiary or
through an affiliate, (a) develops, markets and/or sells products for uterine
contraction monitoring in the home or products that would be used in lieu of or
in competition with uterine contraction monitoring products ("Competing
Products"), and/or (b) provides obstetrical home care services, including,
without limitation, programs for monitoring patients who are at risk of preterm
delivery, programs for managing patients suffering from obstetrical
hypertension or diabetes, infusion therapy services involving drugs to control
preterm labor, nursing services and maternity management services for both low
and high risk pregnancies ("Competing Services"). Notwithstanding the
foregoing, no business shall be deemed a "Competing Business" unless, within at
least one of the business's three most recently concluded fiscal years, that
business, or a division of that business, derived more than twenty percent
(20%) of its gross revenues or more than $2,000,000 in gross
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revenues from the development, marketing or sale of Competing Products and/or
the provision of Competing Services; provided, however, that neither Healthdyne
Technologies, Inc., a Georgia corporation and the manufacturer of medical
devices utilized by the Company ("HTI"), nor Healthdyne Information
Enterprises, Inc., a Georgia corporation engaged in healthcare information
services ("HIE"), shall constitute a Competing Business unless it provides
patient care services to obstetrical patients in the home.
(ii) "Competitive Position" shall mean: (A) the
Executive's direct or indirect equity ownership (excluding ownership of less
than one percent (1%) of the outstanding common stock of any publicly held
corporation) or control of any portion of any Competing Business; or (B) any
employment, consulting, partnership, advisory, directorship, agency,
promotional or independent contractor arrangement between the Executive and any
Competing Business where the Executive performs services for the Competing
Business substantially similar to those the Executive performed for the
Company, provided, however that Executive shall not be deemed to have a
Competitive Position solely because of (y) Executive's position as a director
or holder of more than one percent (1%) of the outstanding stock of HTI or HIE,
if Executive had such position at the Effective Time or (z) Executive's
services for a Competing Business that are not directly related to the sale of
Competing Products or the provision of Competing Services, unless more than
thirty-five percent (35%) of the gross revenues of the Competing Business are
derived from the sale of Competing Products and/or the provision of Competing
Services.
(iii) "Covenant Payments" shall mean the payments
and benefits under this Agreement that are made or provided to the Executive
under Section 4 of this Agreement in exchange for the Executive's agreeing to
the covenants in Subsections (b) through (e) (collectively, the "Protective
Covenants"). The parties hereby stipulate that the value of the Covenant
Payments is Four Hundred Thousand Dollars ($400,000).
(iv) "Covenant Period" shall mean the period of time
from the Effective Date to the date that is three (3) years after the later of
(A) the Effective Date or (B) the effective date of any Change in Control that
occurs within three years after the Effective Date where the Executive's
employment with the Company has not terminated as of the effective date of such
subsequent Change in Control.
(v) "Customers" shall mean actual customers,
clients, referral sources or managed care organizations or actively sought
prospective customers, clients, referral sources or managed care organizations
of the Company (A) during the two (2) years prior to the Effective Date and (B)
during the Covenant Period.
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(vi) "Restricted Territory" shall mean a one hundred
fifty (150) mile radius of the currently existing Company locations listed on
Schedule A, all of which are locations from which the Company Products are
developed, produced, marketed, sold or distributed. The Executive agrees to
sign any amendment to Schedule A proposed by the Company, which amendment adds
or deletes Company locations so that Schedule A accurately reflects all then
current Company locations from which the Company's products or services are
developed, marketed, sold or provided.
(b) Limitation on Competition Ancillary to and as a
condition precedent to the Merger, in connection with which the Executive will
receive, both directly and indirectly, significant benefits and value, and in
consideration of the Covenant Payments payable by the Company to the Executive
under this Agreement, the Executive agrees that during the Covenant Period, the
Executive will not, without the prior written consent of the Company, anywhere
within the Restricted Territory, either directly or indirectly, alone or in
conjunction with any other party, accept, enter into or take any action in
conjunction with or in furtherance of a Competitive Position (other than action
to reject an unsolicited offer of a Competitive Position).
(c) Limitation on Soliciting Customers Ancillary to and
as a condition precedent to the Merger, in connection with which the Executive
will receive, both directly and indirectly, significant benefits and value, and
in consideration of the Covenant Payments payable by the Company to the
Executive under this Agreement, the Executive agrees that during the Covenant
Period, the Executive will not, without the prior written consent of the
Company, alone or in conjunction with any other party, solicit, divert or
appropriate or attempt to solicit, divert or appropriate on behalf of a
Competing Business with which Executive has a Competitive Position any Customer
located in the Restricted Territory (or any other Customer with which the
Executive had any direct contact on behalf of the Company) for the purpose of
providing the Customer or having the Customer provided with a Competing Product
or Competing Service.
(d) Limitation on Soliciting Personnel or Other Parties
Ancillary to and as a condition precedent to the Merger, in connection with
which the Executive will receive, both directly and indirectly, significant
benefits and value, and in consideration of the Covenant Payments payable by
the Company to the Executive under this Agreement, the Executive hereby agrees
that he will not, without the prior written consent of the Company, alone or in
conjunction with any other party, solicit or attempt to solicit any employee,
consultant, contractor, independent broker or other personnel of the Company to
terminate, alter or lessen that party's affiliation with the Company or to
violate the terms of any agreement or understanding between such employee,
consultant, contractor or other person and the Company.
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(e) Acknowledgement The parties acknowledge and agree
that the covenants of the Executive in Subsection (b) through (d) are and shall
be treated, under law, as "ancillary to the sale of the Company's business."
The parties acknowledge and agree that the Protective Covenants are reasonable
as to time, scope and territory given the Company's need to protect its trade
secrets and confidential business information and given the substantial
payments and benefits to which the Executive is entitled in connection with the
Merger and otherwise pursuant to this Agreement.
(f) Remedies The parties acknowledge that any breach or
threatened breach of a Protective Covenant by the Executive is reasonably
likely to result in irreparable injury to the Company, and therefore, in
addition to all remedies provided at law or in equity, the Executive agrees
that the Company shall be entitled to a temporary restraining order and a
permanent injunction to prevent a breach or contemplated breach of the
Protective Covenant. If the Company seeks an injunction, the Executive waives
any requirement that the Company post a bond or any other security.
6. No Obligation to Mitigate Damages; No Effect on Other
Contractual Rights.
(a) All compensation and benefits provided to the
Executive under this Agreement are in consideration of the Executive's services
rendered to the Company and of the Executive's adhering to the terms set forth
in Section 5 hereof and the Executive shall not be required to mitigate damages
or the amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer after the Date of Termination, or
otherwise.
(b) The provisions of this Agreement, and any payment
provided for hereunder, shall not reduce any amounts otherwise payable, or in
any way diminish the Executive's existing rights, or rights which would accrue
solely as a result of the passage of time, under any Benefit Plan, Incentive
Plan or Securities Plan, employment agreement or other contract, plan or
arrangement.
7. Successor to the Company.
(a) The Company will require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to the Executive, expressly,
absolutely and unconditionally to assume and agree to perform this Agreement in
the same manner and to the same extent that the
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Company would be required to perform it if no such succession or assignment had
taken place. Any failure of the Company to obtain such agreement prior to the
effectiveness of any such succession or assignment shall be a material breach
of this Agreement and shall entitle the Executive to terminate the Executive's
employment for Good Reason. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor or assign to its business
and/or assets as aforesaid, including without limitation, the Surviving Company
in the Merger. If at any time during the term of this Agreement the Executive
is employed by any corporation a majority of the voting securities of which is
then owned by the Company, "Company" as used in Sections 3, 4, 12 and 14 hereof
shall in addition include such employer. In such event, the Company agrees
that it shall pay or shall cause such employer to pay any amounts owed to the
Executive pursuant to Section 4 hereof.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amounts are still payable to him or her
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's devisee,
legatee, or the designee or, if there be no such designee, to the Executive's
estate.
8. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt required, postage prepaid, as follows:
If to Company:
Healthdyne, Inc.
0000 Xxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
If to Executive:
Xxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxxx Xxxx Xxxx
Xxxxxx, Xxxxxxx 00000
or such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
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9. Miscellaneous. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. This Agreement shall be governed by
and construed in accordance with the laws of the State of Georgia.
10. Validity. The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
12. Legal Fees and Expenses. The Company shall pay all legal
fees, expenses and damages which the Executive may incur as a result of the
Executive's instituting legal action to enforce his rights hereunder, or in the
event the Company contests the validity, enforceability or the Executive's
interpretation of, or determinations under, this Agreement. If the Executive
is the prevailing party or recovers any damages in such legal action, the
Executive shall be entitled to receive in addition thereto pre-judgment and
post-judgment interest on the amount of such damages.
13. Severability, Modification. All provisions of this Agreement
are severable from one another, and the unenforceability or invalidity of any
provision of this Agreement shall not affect the validity or enforceability of
the remaining provisions of this Agreement, but such remaining provisions shall
be interpreted and construed in such a manner as to carry out fully the
intention of the parties. Should any judicial body interpreting this Agreement
deem any provision of this Agreement to be unreasonably broad in time,
territory, scope or otherwise, it is the intent and desire of the parties that
such judicial body, to the greatest extent possible, reduce the breadth of such
provision to the maximum legally allowable parameters rather than deeming such
provision totally unenforceable or invalid.
14. Confidentiality. The Executive acknowledges that he or she
has previously entered into, and continues to be bound by the terms of, a
Confidentiality Agreement with the Company.
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15. Agreement Not an Employment Contract. This Agreement shall
not be deemed to constitute or be deemed ancillary to an employment contract
between the Company and the Executive, and nothing herein shall be deemed to
give the Executive the right to continue in the employ of the Company or to
eliminate the right of the Company to discharge the Executive at any time.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first above written.
HEALTHDYNE, INC.
By /s/ Xxxxxx X. Xxxxx
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/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Executive
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