Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of August 7, 1998, by and between
LAB HOLDINGS, INC., a Missouri corporation (the "Company"), and P. Xxxxxxx
Xxxxxx (the "Executive").
WHEREAS, the Company desires to employ the Executive as President and Chief
Executive Officer of the Company; and
WHEREAS, the Executive desires to be employed on the terms and subject
to the conditions hereinafter stated.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Employment Agreement, the parties hereby agree as follows:
SECTION 1
POSITION AND RESPONSIBILITIES
During the Term of this Employment Agreement, the Executive shall
perform such duties for such compensation and subject to such terms and
conditions as are hereinafter set forth.
SECTION 2
TERM AND DUTIES
2.1 Term; Extension. The term of this Employment Agreement (the "Term
of this Employment Agreement") will commence as of the date hereof and shall
continue until the third anniversary of such date; provided that the Term of
this Employment Agreement shall be automatically extended for successive one
year periods on each anniversary of this Agreement unless notice of
non-extension is given by either party to the other prior to such anniversary.
If such notice is given, the Term of this Employment Agreement shall not
thereafter be automatically extended on succeeding anniversaries of this
agreement. Termination of the Executive's employment pursuant to this Employment
Agreement, other than upon expiration of the Term of this Employment Agreement,
shall be governed by Sections 4 and 5.
2.2 Duties. The Executive shall devote appropriate time, attention and
efforts during normal business hours to the Company's affairs, but the Company
and Executive agree that Executive's position and responsibilities with the
Company will not require Executive's full time and attention and Executive is
entitled to pursue other employment opportunities simultaneously with his duties
hereunder. The Executive shall have such duties and responsibilities as are
assigned to him from time to time by the Board of Directors. As of the effective
date of this Employment Agreement, the Executive shall have senior management
authority and responsibility with respect to the long term management of the
Company, consistent with directions from the Board of Directors.
2.3 Location. The duties of the Executive shall be performed at such
locations and places
as may be directed by the Board of Directors.
SECTION 3
COMPENSATION AND BENEFITS
3.1 Base Compensation. The Company shall pay the Executive a base
salary ("Base Salary") of $100,000 per annum, subject to applicable
withholdings. Base Salary shall be payable according to the customary payroll
practices of the Company but in no event less frequently than once each month.
The Base Salary shall be reviewed annually and shall be subject to increase or
decrease according to the policies and practices adopted by the Board of
Directors from time to time; provided, however, that in no event shall the Base
Salary for any year be decreased by more than five percent (5%) from the
immediately preceding year's Base Salary as a result of any such annual review.
3.2 Additional Benefits. The Executive will be entitled to participate
in all employee benefit plans or programs and receive all benefits and
perquisites to which any salaried employees are eligible under any existing or
future plans or programs established by the Company for salaried employees. The
Executive will participate to the extent permissible under the terms and
provisions of such plans or programs in accordance with program provisions.
Nothing in this Agreement will preclude the Company from amending or terminating
any of the plans or programs applicable to salaried employees or senior
executives. The Executive will be entitled to an annual paid vacation as
established by the Board of Directors.
3.3 Business Expenses. The Company will reimburse the Executive for all
reasonable travel and other expenses incurred by the Executive in connection
with the performance of his duties and obligations under this Employment
Agreement.
3.4 Withholding. The Company may directly or indirectly withhold from
any payments under this Employment Agreement all federal, state, city or other
taxes that shall be required pursuant to any law or governmental regulation.
SECTION 4
DEATH BENEFIT; DISABILITY COMPENSATION; KEY MAN INSURANCE
4.1 Payment in Event of Death. In the event of the death of the
Executive during the Term of this Employment Agreement, the Company's obligation
to make payments under this Employment Agreement shall cease as of the date of
death, except for earned but unpaid Base Salary.
4.2 Disability Compensation. Notwithstanding the disability of the
Executive, the Company will continue to pay the Executive during the Term of
this Employment Agreement, according to the compensation provisions of this
Employment Agreement. In the event the disability continues for a period of
three (3) months, the Company may thereafter terminate this Employment Agreement
and the Executive's employment as of the end of said period. Following such
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termination, the Company will pay the Executive amounts equal to his regular
installments of Base Salary, as of the time of termination, for a period of six
(6) months.
4.3 Responsibilities in the Event of Disability. During the period the
Executive is receiving payments following his disability and as long as he is
physically and mentally able to do so, the Executive will furnish information
and assistance to the Company and from time to time will make himself available
to the Company to undertake assignments consistent with his position or prior
position with the Company and his physical and mental health. If the Company
fails to make a payment or provide a benefit required as part of this Employment
Agreement, the Executive's obligation to provide information and assistance will
end.
4.4 Definition of Disability. The term "disability" will have such
meaning as is determined in the reasonable discretion of the Board of Directors.
4.5 Key-Man Life Insurance. Upon request by the Company, the Executive
agrees to cooperate with the Company in obtaining "key man" life insurance on
the life of the Executive, with death benefits payable to the Company. Such
cooperation shall include the submission by the Executive to a medical
examination and his response to inquiries regarding his medical history.
4.6 Advancement of Expenses In Connection With Any Proceedings. In
addition to any indemnification provided to Executive by law, the Articles of
Incorporation of the Company, its bylaws or any contract, the Company agrees
that expenses (including attorneys' fees and expenses) incurred by the Executive
in connection with any claim or proceeding with respect to which Executive may
be entitled to indemnity shall be paid by the Company in advance upon the
written request of the Executive, if Executive shall provide the Company with an
unsecured written undertaking to repay such amount if it shall ultimately be
determined by a final adjudication of a court of competent jurisdiction that the
Executive is not entitled to indemnification.
SECTION 5
TERMINATION OF EMPLOYMENT
Notwithstanding anything herein to the contrary, this Employment
Agreement and the Executive's employment with the Company may be terminated
under the circumstances and subject to the terms and provisions of this Section
5.
5.1 Termination Without Cause. If the Executive suffers a Termination
Without Cause (hereinafter defined), the Company will continue to pay the
Executive amounts equal to his Base Salary, as in effect at the time of the
Termination Without Cause, for the remaining Term of this Employment Agreement,
but in no event shall such payments continue for a period of more than two years
following such termination. For the remaining Term of this Employment Agreement,
the Company shall reimburse the Executive for the cost of the Executive's health
insurance as in effect at the date of termination. The exercisability of stock
options granted to the Executive shall be governed by any applicable stock
option agreements and the terms of the respective stock option
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plans.
5.2 Termination With Cause; Voluntary Termination. If the Executive
suffers a Termination with Cause or the Executive voluntarily terminates his
employment with the Company (a "Voluntary Termination"), then, the Company will
not be obligated to pay the Executive any amounts of compensation or benefits
following the date of termination. However, earned but unpaid Base Salary
through the date of termination will be paid in a lump sum at such time. A
Voluntary Termination shall not be deemed to include a resignation tendered at
the request of the Board or following or in connection with a Change In Control.
5.3 Definitions. For purposes of this Employment Agreement, the
following terms have the following meanings:
(a) A "Change in Control" shall be deemed to have occurred
upon the occurrence of any of the events specified in Sections 6.8, 6.9 or 6.10
of the Lab Holdings, Inc. 1997 Directors' Stock Option Plan or upon consummation
of a merger or consolidation involving the Company, if by the terms of the
agreement of merger or consolidation or other contemporaneous related document
the Executive's term as an officer of the Company is not to continue after the
consummation of the merger or consolidation or is limited in time to a period
following such merger or consolidation which does not extend at least until the
end of the Term of This Agreement.
(b) "Termination With Cause" means termination of the
Executive's employment by the Company, acting in good faith, by written notice
to the Executive specifying the event relied upon for such termination, either
(i) due to the Executive's serious, willful misconduct with respect to his
duties under this Employment Agreement or (ii) due to an act or omission for
which the Executive's is convicted of a felony, the Executive's perpetration of
a fraud, embezzlement or other act of dishonesty or the Executive's breach of a
trust or fiduciary duty, and if any such act or omission materially adversely
affects the Company or its shareholders or (iii) due to activities by the
Executive in Executive's other employment or business which materially conflict
with the Company's business.
(c) "Termination Without Cause" means termination of the
Executive's employment with the Company other than due to the Executive's death
or disability, Voluntary Termination or Termination With Cause.
SECTION 6
OTHER DUTIES OF THE EXECUTIVE DURING AND AFTER THE TERM OF
THIS EMPLOYMENT AGREEMENT
6.1 Additional Information. The Executive will, upon reasonable notice,
during or after the Term of this Employment Agreement, furnish information as
may be in his possession and cooperate with the Company as may reasonably be
requested in connection with any claims or legal
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actions in which the Company is or may become a party. The Executive shall
receive reasonable compensation for the time expended by him pursuant to this
Section 6.1.
6.2 Confidentiality. The Executive recognizes and acknowledges that all
information pertaining to the affairs, business, clients, customers or other
relationships of the Company, as hereinafter defined, is confidential and is a
unique and valuable asset of the Company. Access to and knowledge of this
information are essential to the performance of the Executive's duties under
this Employment Agreement. The Executive will not during the Term of this
Employment Agreement or thereafter, except to the extent reasonably necessary in
the performance of his duties under this Agreement, give to any person, firm,
association, corporation or governmental agency any information concerning the
affairs, business, clients, customers or other relationships of the Company
except as required by law. The Executive will not make use of this type of
information for his own purposes or for the benefit of any person or
organization other than the Company. The Executive will also use his best
efforts to prevent the disclosure of this information by others. All records,
memoranda, etc. relating to the business of the Company whether made by the
Executive or otherwise coming into his possession are confidential and will
remain the property of the Company.
6.3 Noncompetition.
(a) During the Term of Employment. The Executive will not
Compete with the Company at any time while he is employed by the Company or
receiving payments from the Company.
(b) Voluntary Termination; Termination With Cause. In the
event of a Voluntary Termination or a Termination With Cause, the Executive will
not Compete (hereinafter defined) with the Company for a period consisting of
the remaining Term of this Employment Agreement plus one (1) year.
(c) Termination Without Cause; Non-Extension of the Term. In
the event of a Termination Without Cause or in the event the Company gives
notice under Section 2.1 that the Term of this Employment Agreement will not be
automatically extended, the Executive will not Compete with the Company for the
then remaining Term of this Employment Agreement.
(d) Definition of "Compete" with the Company. For the purposes
of this Section 6, the term "Compete with the Company" means action by the
Executive, direct or indirect, for his own account or for the account of others,
either as an officer, director, stockholder, owner, partner, member, promoter,
employee, consultant, advisor, agent, manager, creditor or in any other
capacity, resulting in the Executive having any pecuniary interest, legal or
equitable ownership, or other financial or non-financial interest in, or
employment, association or affiliation with, any corporation, business trust,
partnership, limited liability company, proprietorship or other business or
professional enterprise that engages in a business substantially similar to or
in competition with any business engaged in by the Company or in which the
Company has an equity interest exceeding
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5%.
(e) Reasonableness of Scope and Duration; Remedies. The
Executive acknowledges that the covenants contained herein are reasonable as to
geographic and temporal scope. The Executive acknowledges that his breach or
threatened or attempted breach of any provision of Section 6 would cause
irreparable harm to the Company not compensable in monetary damages and that the
Company shall be entitled, in addition to all other applicable remedies, to a
temporary and permanent injunction and a decree for specific performance of the
terms of Section 6 without being required to prove damages or furnish any bond
or other security.
SECTION 7
CONSOLIDATION, MERGER OR SALE OF ASSETS
Nothing in this Employment Agreement shall preclude the Company from
consolidating or merging into or with, or transferring all or substantially all
of its assets to, another corporation or organization which assumes this
Employment Agreement and all obligations and undertakings of the Company
hereunder. Upon such a consolidation, merger or sale of assets, the term "the
Company" as used herein will mean or include the other corporation or
organization and, unless terminated as herein provided, this Employment
Agreement shall continue in full force and effect. This Section 7 is not
intended to modify or limit the rights of the Executive hereunder.
SECTI0N 8
MISCELLANEOUS
8.1 Entire Agreement. This Employment Agreement contains the entire
understanding between the Company and the Executive with respect to the subject
matter and supersedes any prior employment or severance agreements between the
Company and its affiliates, and the Executive.
8.2 Amendment; Waiver. This Employment Agreement may not be modified or
amended except in writing signed by the parties. No term or condition of this
Employment Agreement will be deemed to have been waived except in writing by the
party charged with waiver. A waiver shall operate only as to the specific term
or condition waived and will not constitute a waiver for the future or act on
anything other than that which is specifically waived.
8.3 Severability; Modification of Covenant. Should any part of this
Employment Agreement be declared invalid for any reason, such invalidity shall
not affect the validity of any remaining portion hereof and such remaining
portion shall continue in full force and effect as if this Employment Agreement
had been originally executed without including the invalid part. Should any
covenant of this Employment Agreement be unenforceable because of its geographic
scope or term, its geographic scope or term shall be modified to such extent as
may be necessary to render such covenant enforceable.
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8.4 Effect of Captions. Titles and captions in no way define, limit,
extend or describe the scope of this Employment Agreement nor the intent of any
provision thereof.
8.5 Counterpart Execution. This Employment Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
8.6 Governing Law; Arbitration. This Employment Agreement has been
executed and delivered in the State of Missouri and its validity,
interpretation, performance and enforcement shall be governed by the laws of
that state. Any dispute among the parties hereto shall be settled by arbitration
in the Kansas City, Missouri area, in accordance with the rules then obtaining
of the American Arbitration Association and judgment upon the award rendered may
be entered in any court having jurisdiction thereof. All provisions hereof are
for the protection and are intended to be for the benefit of the parties hereto
and enforceable directly by and binding upon each party. Each party hereto
agrees that the remedy at law of the other for any actual or threatened breach
of this Employment Agreement would be inadequate and that the other party shall
be entitled to specific performance hereof or injunctive relief or both, by
temporary or permanent injunction or such other appropriate judicial remedy,
writ or orders as may be decided by a court of competent jurisdiction in
addition to any damages which the complaining party may be legally entitled to
recover together with reasonable expenses of litigation, including attorney's
fees incurred in connection therewith, as may be approved by such court.
8.7 Certain Expenses. The Company agrees to indemnify and hold harmless
the Executive from and against any cost or expense, including Executive's
reasonable attorney's fees and expenses, incurred in connection with any claim
made or proceeding brought by Executive to enforce the provisions of Sections 3,
4 or 5 of this agreement. The Executive agrees to indemnify and hold harmless
the Company from and against any cost or expense, including Executive's
reasonable attorney's fees and expenses, incurred in connection with any claim
made or proceeding brought by Executive to enforce any provision of Section 6 of
this agreement.
8.8 Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been made when
delivered or mailed first-class postage prepaid by registered mail, return
receipt requested, or when delivered if by hand, overnight delivery service or
confirmed facsimile transmission, to the following:
(1) If to the Company, at 0000 Xxxx 00xx Xxxxxx,
Xxxxx 000, Xxxxxxx Xxxxxxx, Xxxxxx 00000,
Attention: Chairman of the Compensation
Committee, or at such other address as may
have been furnished to the Executive by the
Company in writing; or
(2) If to the Executive, at [address omitted for
XXXXX document], or such other address as
may have been furnished to the Company by
the Executive in writing.
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8.9 Binding Agreements. This Employment Agreement shall be binding on the
parties' successors, heirs and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Employment
Agreement as of the date first above written.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION
WHICH MAY BE ENFORCED BY THE PARTIES.
LAB HOLDINGS, INC.
By: s/Xxxx X. Xxxxxxxx, Xx.
Chairman of the Compensation Committee
EXECUTIVE:
s/P. Xxxxxxx Xxxxxx
P. Xxxxxxx Xxxxxx
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