EXHIBIT 10.27
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), is dated as of October
16, 2001, by and between NovaMed Eyecare Services, LLC, a Delaware limited
liability company (the "Company"), and Xxxxx X. Xxxxxxxx ("Employee").
PRELIMINARY RECITALS
A. The Company is an eye care services company engaged in the
business of: (i) providing comprehensive eye care services to eye care
providers and businesses ancillary thereto, including, without limitation,
providing financial, administrative, information technology, marketing and
managed care services and ophthalmic surgical equipment to ophthalmic and
optometric providers; (ii) owning, operating and/or managing ambulatory surgery
centers, refractive centers, excimer lasers, optical dispensaries, wholesale
optical laboratories, an optical supplies and equipment purchasing organization
and a marketing services and products company that provides marketing services
and products to eye care providers; and (iii) providing clinical research and
site management services to the eye care pharmaceutical and device industries
(collectively, the "Business").
B. The Company desires to employ Employee, and Employee desires to
be employed by the Company, as Executive Vice President and Chief Financial
Officer of the Company on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
of the parties hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I
EMPLOYMENT
1.1 Engagement of Employee. The Company agrees to employ Employee,
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and Employee accepts such employment by the Company, for the period beginning
October 24, 2001 (the "Effective Date") and ending on October 23, 2003 (the
"Initial Employment Period"). THE INITIAL EMPLOYMENT PERIOD AND ANY RENEWAL
PERIOD (AS HEREINAFTER DEFINED) SHALL AUTOMATICALLY BE RENEWED AND EXTENDED ON
THE SAME TERMS AND CONDITIONS CONTAINED HEREIN FOR CONSECUTIVE ONE-YEAR PERIODS
(THE "RENEWAL PERIODS"), UNLESS NOT LATER THAN SIXTY (60) DAYS PRIOR TO THE END
OF THE INITIAL EMPLOYMENT PERIOD OR ANY RENEWAL PERIOD, EITHER PARTY SHALL GIVE
WRITTEN NOTICE TO SUCH OTHER PARTY ELECTING TO TERMINATE THIS AGREEMENT. The
Initial Employment Period and the Renewal Periods are hereinafter referred to
as the "Employment Period." For purposes of this Agreement, any notice of
termination electing not to renew this Agreement pursuant to this Section 1.1
shall be deemed: (i) a termination without Cause if such notice is delivered by
the Company; or
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(ii) a voluntary termination of employment if such notice is delivered by
Employee; provided, however, that if the Employment Period is terminated
pursuant to this Section 1.1 by Employee (except as provided in Section 3.4),
then notwithstanding Article III, the Company shall have no further obligations
hereunder or otherwise with respect to Employee's employment from and after the
expiration of the Employment Period (except payment of Employee's Base Salary
accrued through the expiration of the Employment Period). Notwithstanding
anything to the contrary contained herein, the Employment Period is subject to
termination pursuant to Article III below.
1.2 Duties and Powers. During the Employment Period, Employee will
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have such responsibilities, duties and authorities, and will render such
services or act in such other capacity for the Company and its affiliates as
the Board of Directors (the "Board") of NovaMed Eyecare, Inc. (the "Parent"),
the manager and parent of the Company, or the President, Chairman of the Board,
and Chief Executive Officer (or any other designated officer of the Parent or
the Company), may from time to time direct. Employee will devote his best
efforts, energies and abilities and his full business time, skill and attention
(except for permitted vacation periods and reasonable periods of illness or
other incapacity) to the business and affairs of the Company, and shall perform
the duties and carry out the responsibilities assigned to him, to the best of
his ability, in a diligent, trustworthy, businesslike and efficient manner for
the purpose of advancing the Company. Employee acknowledges that his duties and
responsibilities will require his full-time business efforts and agrees that
during the Employment Period he will not engage in any other business activity
or have any business pursuits or interests except activities or interests which
do not conflict with the business of the Company, the Parent and any of their
affiliated entities or interfere with the performance of Employee's duties
hereunder.
1.3 No Violation. Employee represents and warrants that the
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execution of this Agreement by Employee and the performance by Employee of his
duties as an employee of the Company will not violate, conflict with or result
in a breach or default under any agreements, arrangements or understandings to
which Employee is or was a party, or by which he is or was bound, nor will the
performance of Employee's duties as an employee of the Company be limited,
restricted or impaired in any manner as a result of any agreements,
arrangements or understandings to which Employee is or was a party.
ARTICLE II
COMPENSATION
2.1 Base Salary. During the Employment Period, the Company will pay
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Employee a base salary at the rate of $230,000 per annum (the "Base Salary"),
payable in regular installments in accordance with the Company's general
payroll practices for salaried employees. If the Employment Period is
terminated pursuant to Section 3 (subject to any severance provisions in
Section 3.3 or Section 3.4), Employee's Base Salary for any partial year will
be prorated based upon the number of days elapsed in such year during which
services were actually performed by Employee. The Board or any designated
officer shall perform an annual review of Employee's Base Salary based on
Employee's performance of his duties and the Company's other compensation
policies; provided that any increase in the Base Salary shall require approval
of the Board or its Compensation Committee.
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2.2 Discretionary Bonus. Following the end of each fiscal year, the
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Board or its Compensation Committee, in its sole discretion, may elect to cause
the Company to award to Employee a bonus for such year, in an amount to be
determined by the Board or its Compensation Committee, based on such
performance targets as shall be established, and adjusted from time to time, by
the Board or its Compensation Committee.
2.3 Benefits. In addition to the Base Salary payable to Employee
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hereunder, Employee will be entitled to the following benefits during the
Employment Period, unless otherwise altered by the Board with respect to all
management employees of the Company (collectively, the "Benefits"):
(a) hospitalization, disability, life and health insurance,
to the extent offered by the Company and subject to the Company's policies in
effect from time to time, and in amounts consistent with Company policy, for
all management employees, as reasonably determined by the Board;
(b) paid vacation each year with salary, consistent with
Company policy for all management employees;
(c) reimbursement for reasonable out-of-pocket business
expenses incurred by Employee in the ordinary course of his duties, subject to
the Company's policies in effect from time to time with respect to travel,
entertainment and other expenses, including without limitation, requirements
with respect to reporting and documentation of such expenses;
(d) other benefit arrangements to the extent made generally
available by the Company to its management employees; and
(e) participation in the Parent's Stock Incentive Plan such
that Employee is granted options to purchase an amount of the common equity
interest in the Parent consistent with the determination of the Board or its
Compensation Committee pursuant to such plan.
2.4 Taxes, etc. All compensation payable to Employee hereunder is
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stated in gross amount and shall be subject to all applicable withholding
taxes, other normal payroll and any other amounts required by law to be
withheld.
ARTICLE III
TERMINATION
3.1 Termination By Employee or the Company. The Employment Period
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(i) shall automatically terminate immediately upon Employee's resignation or
death, or (ii) may be terminated immediately by the Company as set forth herein
for Cause or without Cause, or by reason of Employee's Permanent Disability.
"Cause" as used herein means the occurrence of any of the following
events:
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(a) a material breach by Employee of any of the terms and
conditions of this Agreement; provided that Employee shall have a reasonable
period of time during which to cure such material breach following the date on
which Employee receives the Company's written notice of such material breach;
(b) Employee's material failure or willful refusal to
substantially perform his duties; provided that Employee shall have a
reasonable period of time during which to cure such failure following the date
on which Employee receives the Company's written notice of such failure;
(c) Employee's failure, as notified by the Company in
writing, to comply with any of the Company's written guidelines or procedures
promulgated by the Company and furnished to Employee, including, without
limitation, any guidelines or procedures relating to marketing or community
relations; provided that Employee shall have a reasonable period of time during
which to cure such failure following the date on which Employee receives the
Company's written notice of such failure; or
(d) the determination by the Board in the exercise of its
reasonable judgment that Employee has committed an act or acts constituting a
felony or other act involving dishonesty, disloyalty or fraud against the
Company.
"Permanent Disability" as used herein shall mean that Employee is
unable to perform, with or without reasonable accommodation, by reason of
physical or mental incapacity, the essential functions of his or her position.
The Board shall determine, according to the facts then available, whether and
when a Permanent Disability has occurred. Such determination shall not be
arbitrary or unreasonable, and shall be final and binding on the parties hereto.
3.2 Termination by Employee. Employee has the right to terminate
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his employment under this Agreement at any time, for any or no reason, upon
ninety (90) days written notice to the Company; provided, however, that such
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ninety (90) day notice is not required for a termination of employment during
the Window Period (as defined in Section 3.4(g)).
3.3 Compensation After Termination.
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(a) Except as described in Section 3.4 hereof, or except
as may be specifically required by law, if the Employment Period is terminated
(i) by the Company for Cause or due to the death or Permanent Disability of
Employee, or (ii) by Employee (including a termination resulting from
Employee's election not to renew this Agreement under Section 1.1 hereof) other
than for Locale Reason (as defined below), then the Company shall have no
further obligations hereunder or otherwise with respect to Employee's
employment from and after the termination or expiration date (except payment of
Employee's Base Salary accrued through the date of termination or expiration),
and the Company shall continue to have all other rights available hereunder
(including, without limitation, all rights under Article IV hereof) at law or
in equity;
(b) Except as described in Section 3.4 hereof, (i) if the
Employment Period is terminated by the Company without Cause (including a
termination resulting from the Company's
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election not to renew this Agreement under Section 1.1 hereof) or (ii) if the
Employment Period is terminated by Employee for Locale Reason: (A) Employee
shall be entitled to receive all items described in Section 3.3(a) above; and
(B) subject to the conditions hereinafter set forth, Employee shall be entitled
to receive as severance compensation, the following (collectively, the
"Severance Pay"): (1) Employee's then-current monthly Base Salary hereunder for
a period of twelve (12) months (such time period to be hereinafter referred to
as the "Severance Period" (unless modified by Section 3.4)), payable in regular
installments in accordance with the Company's general payroll practices for
salaried employees; (2) the bonus, if any, that Employee would have been
entitled under Section 2.2 hereof at the end of the year during which the
termination without Cause or termination for Locale Reason occurs had such
termination not occurred, which bonus shall be (a) prorated based on the amount
of time that Employee was employed by the Company during the year (not
including the Severance Period) for which such bonus is being calculated, and
(b) determined and paid to Employee contemporaneously with the determination
and payment of bonuses for comparable employees of the Company; and (3)
continuation of the welfare benefits described in Section 2.3(a) for the
Severance Period, to the extent permissible under the terms of the relevant
benefit plans. The bonus described in subclause (2) above shall not be the
"Target Bonus" (as defined in Section 3.4(b)), but rather the bonus that would
have been payable pursuant to Section 2.2 hereof, as modified by this Section
3.3(b). Employee's right to receive Severance Pay hereunder is conditioned
upon: (x) Employee executing and delivering to the Company a written separation
agreement and general release of all claims, in form and substance acceptable
to the Company, which shall among other things, contain a general release by
Employee of all claims arising out of his employment and termination of
employment by the Company; and (y) Employee's compliance with all of his
obligations which survive termination of this Agreement, including without
limitation those described in Article IV below. The Severance Pay is intended
to be in lieu of all other payments to which Employee might otherwise be
entitled in respect of his termination without Cause or termination for Locale
Reason. The Company shall have no further obligations hereunder or otherwise
with respect to Employee's employment from and after the date of termination of
employment with the Company for any reason (the "Termination Date"), and the
Company shall continue to have all other rights available hereunder (including
without limitation, all rights hereunder (including without limitation, all
rights under Article IV hereof) at law or in equity. As used herein, "Locale
Reason" shall mean without the written consent of Employee a relocation by the
Company of Employee's primary employment location to a location which is more
than 50 miles from 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx.
3.4 Compensation After Termination Following a Change in Control.
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(a) If the Employment Period is terminated following a
Change in Control (as defined below) (i) by the Company for Cause or due to the
death or Permanent Disability of Employee or (ii) by Employee (including a
termination resulting from Employee's election not to renew this Agreement
under Section 1.1 hereof) other than for Good Reason (as defined below) or
during the Window Period (as defined below), then the Company shall have no
further obligations hereunder or otherwise with respect to Employee's
employment from and after the termination or expiration date (except payment of
Employee's Base Salary accrued through the date of termination or expiration),
and the Company shall continue to have all other rights available hereunder
(including without limitation, all rights under Article IV hereof) at law or in
equity.
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(b) If the Employment Period is terminated following a
Change in Control (i) by the Company without Cause (including a termination
resulting from the Company's election not to renew this Agreement under Section
1.1 hereof) or (ii) by Employee for Good Reason, then subject to the conditions
described in Section 3.4(d) below, Employee shall be entitled to receive the
following as Severance Pay in lieu of any amounts payable under Section 3.3:
(A) one (1) times the sum of Employee's Base Salary and Target Bonus, payable
within 30 days following the Termination Date and (B) continuation of the
welfare benefits described in Section 2.3(a) for twelve (12) months (the
"Severance Period") to the extent permissible under the terms of the relevant
benefit plans. For purposes of this Agreement, "Target Bonus" shall mean the
greater of (x) an amount equal to the bonus that would have been payable to
Employee following the calendar year in which the Termination Date occurs
pursuant to the Company's Executive Compensation Plan (the "Executive Plan"),
based on attaining one hundred percent (100%) of Employee's applicable target
measure established pursuant to the Executive Plan or (y) thirty-five percent
(35%) of Base Salary. The Target Bonus shall not be adjusted based on whether
the Company anticipates attaining such target measure as of the Termination
Date, whether the target measure is ultimately attained or whether any bonus
amounts payable under the Executive Plan would have ultimately been approved by
either the Compensation Committee or the Board.
(c) If the Employment Period is terminated following a
Change in Control by Employee for any reason or no reason during the Window
Period, then subject to the conditions described in Section 3.4(d) below,
Employee shall be entitled to receive the following as Severance Pay in lieu of
any amounts payable under Section 3.3: (i) fifty percent (50%) of the sum of
Employee's Base Salary and Target Bonus, payable within thirty (30) days
following the Termination Date and (ii) continuation of the welfare benefits
described in Section 2.3(a) for six (6) months (the "Severance Period") to the
extent permissible under the terms of the relevant benefit plans.
(d) Employee's right to receive any Severance Pay under
Section 3.4(b) or Section 3.4(c) above is conditioned upon (i) Employee
executing and delivering to the Company a written separation agreement and
general release of all claims, in form and substance acceptable to the Company,
which shall, among other things, contain a general release by Employee of all
claims arising out of his employment and termination of employment by the
Company; (ii) Employee's compliance with all terms of that separation agreement
and general release; and (iii) Employee's compliance with all of his
obligations which survive termination of this Agreement, including without
limitation those described in Article IV below. The Severance Pay is intended
to be in lieu of all other payments to which Employee might otherwise be
entitled in respect of his termination without Cause. The Company shall have no
further obligations hereunder or otherwise with respect to Employee's
employment from and after the Termination Date, and the Company shall continue
to have all other rights available hereunder (including without limitation, all
rights under Article IV hereof) at law or in equity.
(e) For the purpose of this Agreement, a "Change in
Control" means:
(i) the acquisition, other than from the Parent,
by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934) of beneficial ownership of 30% or more of the then
outstanding shares of common stock of the Parent or the
combined voting power of the then
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outstanding voting securities of the Parent entitled to vote
generally in the election of directors; provided, however, that
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any acquisition by the Parent or any of its subsidiaries, or
any employee benefit plan (or related trust) of the Parent or
its subsidiaries, or any corporation with respect to which,
following such acquisition, more than 50% of, respectively, the
then outstanding shares of common stock of such corporation and
the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners respectively, of
the common stock and voting securities of the Parent in
substantially the same portion as their ownership, immediately
prior to such acquisition, of the then outstanding shares of
common stock of the Parent or the combined voting power of the
then outstanding voting securities of the Parent entitled to
vote generally in the election of directors as the case may be,
shall not constitute a Change in Control; or
(ii) approval by the shareholders of the Parent of
a reorganization, merger or consolidation of the Parent, in
each case, with respect to which the individuals and entities
who were the respective beneficial owners of the common stock
and voting securities of the Parent immediately prior to such
reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 50% of, respectively, the
then outstanding voting securities entitled to vote generally
in the election of directors, as the case may be, of the
corporation resulting from such reorganization, merger or
consolidation, or a complete liquidation or dissolution of the
Parent or of the sale or other disposition of all or
substantially all of the assets of the Parent.
(f) "Good Reason" shall mean without the written consent
of Employee:
(i) a material change in Employee's duties or
responsibilities which results in or reflects a material
diminution of the scope or importance of Employee's position;
(ii) a reduction in Employee's Base Salary;
(iii) a material reduction in the level of Benefits
available or awarded to Employee;
(iv) a relocation by the Company of Employee's
primary employment location to a location which is more than
50 miles from Employee's primary employment location before the
Change in Control; or
(v) any failure by the Company to comply with
Section 3.5 of this Agreement.
(g) "Window Period" shall mean the 30-day period following
the first anniversary of a Change in Control.
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3.5 Special Tax Payments.
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(a) Anything in this Agreement to the contrary
notwithstanding, if it is determined that any payment or distribution by the
Company to or for the benefit of Employee, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (any such payment or distribution being referred to herein
individually as a "Payment"), would constitute an "excess parachute payment"
within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code") (or any successor provision), the Company will pay
Employee an additional amount (the "Gross-Up Payment") such that the net amount
retained by Employee after deduction of any excise tax imposed under Section
4999 of the Code (or any successor provision), and any Federal, state and local
income, employment and excise tax imposed upon any Gross-Up Payment shall be
equal to the Payment. For purposes of determining the amount of the Gross-Up
Payment, Employee shall be deemed to pay Federal income tax and employment
taxes at the highest marginal rate of Federal income and employment 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 rate of taxation in the state and
locality of Employee's residence on the Termination Date, net of the maximum
reduction in Federal income taxes that may be obtained from the deduction of
such state and local taxes.
(b) All determinations to be made under this Section 3.5
will initially be made, at the Company's expense, by the Company's independent
public accountant immediately prior to the Change in Control (the "Accounting
Firm"). The Accounting Firm shall provide detailed supporting legal
authorities, calculations and documentation both to the Company and Employee.
If the Accounting Firm makes the initial determination that no excise tax is
payable by Employee with respect to any Payment, Employee will have the right
to dispute the determination (a "Dispute") within 20 business days after
receipt by Employee of the Accounting Firm's determination and the related
supporting information. The Company will pay the Gross-Up Payment, if any, as
determined by the Accounting Firm, to Employee within five business days after
Employee's receipt of the Accounting Firm's initial determination. The
existence of a Dispute will in no way affect Employee's right to receive the
Gross-Up Payment in accordance with the Accounting Firm's initial
determination. If there is no Dispute, the Accounting Firm's initial
determination will be binding, final and conclusive upon the Company and
Employee, subject in all respects, however, to the provisions of Sections
3.5(c) and 3.5(d), below. As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up Payment (or
portion thereof) should have been made by the Company and was not made (an
"Underpayment"). If upon any reasonable written request by Employee or the
Company to the Accounting Firm, or upon the Accounting Firm's own initiative,
the Accounting Firm (at the Company's expense) thereafter determines that
Employee is required to make payment of any excise tax or any additional excise
tax, as the case may be, the Accounting Firm will determine the amount of the
Underpayment that has occurred and the Company will pay any such Underpayment
to Employee promptly. If (i) Employee delivers to the Company a notice from the
Internal Revenue Service stating in effect that an excise tax is due with
respect to any Payment, or (ii) Employee delivers to the Company an opinion of
tax counsel selected by Employee and acceptable to the Company (and such
acceptance may not be unreasonably withheld) that all or a portion of a Payment
is subject to excise tax and the applicable amount of excise tax, in each case,
together with a written claim based upon such
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notice or such opinion that there has been an Underpayment (a "Notice of
Underpayment"), the Company will promptly, but in no event later than five
business days after receipt of the Notice of Underpayment, pay to Employee in
cash the amount of the Underpayment set forth in the Notice of Underpayment.
(c) The Company will defend, hold harmless and indemnify
Employee on a fully grossed-up after tax basis from and against any and all
claims, losses, liabilities, obligations, damages, interest, penalties,
impositions, assessments, demands, judgments, settlements, costs and expenses
(including reasonable attorneys', accountants' and experts' fees and expenses)
(collectively, "Damages") with respect to any tax liability of Employee
resulting from any Underpayment, and will promptly, but in no event later than
five business days after receipt of any reasonable notice from Employee to the
Company of any claim for Damages, pay to Employee in cash the amount of Damages
set forth in such notice.
(d) If any Underpayment or Damages are ultimately
determined to be less than the applicable amount previously paid by the Company
to Employee, Employee will promptly pay to the Company the amount of any
overpayment previously paid by the Company to Employee with respect to such
purported Underpayment or Damages.
ARTICLE IV
RESTRICTIVE COVENANTS
4.1 Employee's Acknowledgment. Employee acknowledges that:
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(a) the Company is and will be engaged in the Business
during the Employment Period and thereafter;
(b) Employee is one of a limited number of persons who
will be developing the Business;
(c) Employee will occupy a position of trust and
confidence with the Company after the date of this Agreement, and during such
period and Employee's employment under this Agreement, Employee will become
familiar with the Company's trade secrets and with other proprietary and
confidential information concerning the Company and the Business;
(d) the agreements and covenants contained in this Article
IV are essential to protect the Company and the goodwill of the Business and
are a condition precedent to the Company entering into this Agreement;
(e) Employee's employment with the Company has special,
unique and extraordinary value to the Company and the Company would be
irreparably damaged if Employee were to provide services to any person or
entity in violation of the provisions of this Agreement;
(f) Employee has means to support himself and his
dependents other than by engaging in the Business, or a business similar to the
Business, and the provisions of this Article IV will not impair such ability;
and
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(g) for purposes of this Article IV, the term "Company"
shall include the Company, the Parent and any of their respective subsidiaries
and affiliates.
4.2 Non-Compete. Employee hereby agrees that for a period
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commencing on the date hereof and ending on the Termination Date, and
thereafter, through the period ending on the first anniversary of the
Termination Date (collectively, the "Restrictive Period"), he shall not,
directly or indirectly, as employee, agent, consultant, stockholder, director,
co-partner or in any other individual or representative capacity, own, operate,
manage, control, engage in, invest in or participate in any manner in, act as a
consultant or advisor to, render services for (alone or in association with any
person, firm, corporation or entity), or otherwise assist any person or entity
(other than the Company) that engages in or owns, invests in, operates, manages
or controls any venture or enterprise that directly or indirectly engages or
proposes to engage in any element of the Business anywhere within a 100-mile
radius of the Chicago metropolitan area or within a 100-mile radius of any area
(or in the event such area is a major city, the metropolitan area relating to
such city) in which the Company on the Termination Date engages in any element
of the Business (the "Territory"); provided, however, that nothing contained
herein shall be construed to prevent Employee from investing in the stock of
any competing corporation listed on a national securities exchange or traded in
the over-the-counter market, but only if Employee is not involved in the
business of said corporation and if Employee and his associates (as such term
is defined in Regulation 14(A) promulgated under the Securities Exchange Act of
1934, as in effect on the date hereof), collectively, do not own more than an
aggregate of 3% of the stock of such corporation. With respect to the
Territory, Employee specifically acknowledges that the Company intends to
expand the Business into and throughout the United States.
4.3 Interference with Relationships. Without limiting the
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generality of the provisions of Section 4.2 hereof, Employee hereby agrees
that, during the Restrictive Period, he will not, directly or indirectly,
solicit or encourage, or participate as employee, agent, consultant,
stockholder, director, partner or in any other individual or representative
capacity, in any business which solicits or encourages (a) any person, firm,
corporation or other entity which has executed, or proposes to execute, a
management services agreement or other services agreement with the Company at
any time during the term of this Agreement, or from any successor in interest
to any such person, firm, corporation or other entity, for the purpose of
securing business or contracts related to any element of the Business, or (b)
any present or future customer or patient of the Company or any of its
affiliated practices or facilities to terminate or otherwise alter his, her or
its relationship with the Company or such affiliated practice or facility;
provided, however, that nothing contained herein shall be construed to prohibit
or restrict Employee from soliciting business from any such parties on behalf
of the Company in performance of his duties as an employee of the Company
required under and as specifically contemplated by Section 1.2 above. In
addition, at all times from and after the Termination Date, Employee shall not
contact or communicate in any manner with any of the Employer's suppliers or
vendors, or any other third party providing services to Employer, regarding
Employer or any Employer-related matter (which suppliers, vendors or third
party service providers will include, without limitation, any third party with
whom Employer was, during the term of Employee's employment with Employer,
contemplating engaging, or negotiating with, for the future provision of
products or services).
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4.4 Nonsolicitation. Other than in the performance of his duties
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hereunder, during the Restrictive Period, Employee shall not, directly or
indirectly, as employee, agent, consultant, stockholder, director, co-partner
or in any other individual or representative capacity, employ or engage,
recruit or solicit for employment or engagement, any person who is or becomes
employed or engaged by the Company or any of its affiliated practices during
the Restrictive Period, or otherwise seek to influence or alter any such
person's relationship with the Company.
4.5 Confidential Information. Other than in the performance of his
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duties hereunder, during the Restrictive Period and thereafter, Employee shall
keep secret and retain in strictest confidence, and shall not, without the
prior written consent of the Company, furnish, make available or disclose to
any third party or use for the benefit of himself or any third party, any
Confidential Information. As used in this Agreement, "Confidential Information"
shall mean any information relating to the business or affairs of the Company
or the Business, including but not limited to any technical or non-technical
data, formulae, compilations, programs, devices, methods, techniques, designs,
processes, procedures, improvements, models, manuals, financial data,
acquisition strategies and information, information relating to operating
procedures and marketing strategies, and any other proprietary information used
by the Company in connection with the Business, irrespective of its form;
provided, however, that Confidential Information shall not include any
information which is in the public domain or becomes known in the industry
through no wrongful act on the part of Employee. Employee acknowledges that the
Confidential Information is vital, sensitive, confidential and proprietary to
the Company.
4.6 Inventions and Discoveries.
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(a) Employee understands and agrees that all inventions,
discoveries, ideas, improvements, whether patentable, copyrightable or not,
pertaining to the Business of the Company or relating to the Company's actual
or demonstrably anticipated research, development or inventions (collectively,
"Inventions and Discoveries") that result from any work performed by Employee
solely or jointly with others for the Company which Employee, solely or jointly
with others, conceives, develops, or reduces to practice during the course of
Employee's employment with the Company, are the sole and exclusive property of
the Company. Employee will promptly disclose all such matters to the Company
and will assist the Company in obtaining legal protection for Inventions and
Discoveries. Employee hereby agrees on behalf of himself, his executors, legal
representatives and assignees that he will assign, transfer and convey to the
Company, its successors and assigns the Inventions and Discoveries.
(b) THE COMPANY AND EMPLOYEE ACKNOWLEDGE AND AGREE THAT
SECTION 4.6(a) SHALL NOT APPLY TO AN INVENTION OF EMPLOYEE FOR WHICH NO
EQUIPMENT, SUPPLIES, FACILITY OR TRADE SECRET INFORMATION OF THE COMPANY WAS
USED AND WHICH WAS DEVELOPED ENTIRELY ON EMPLOYEE'S OWN TIME, UNLESS (A) THE
INVENTION RELATED (I) TO THE BUSINESS OF THE COMPANY OR (II) TO THE COMPANY'S
ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR (B) THE
INVENTION RESULTS FROM ANY WORK PERFORMED BY EMPLOYEE FOR THE COMPANY. EMPLOYEE
AND THE COMPANY FURTHER ACKNOWLEDGE AND AGREE
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THAT SECTION 4.6(a) SHALL NOT APPLY TO ANY INVENTIONS OR WORK PRODUCT DEVELOPED
OR VESTED BY EMPLOYEE PRIOR TO THE EFFECTIVE DATE.
(c) EMPLOYEE ACKNOWLEDGES THAT HE HAS READ THIS SECTION
4.6 AND FULLY UNDERSTANDS THE LIMITATIONS WHICH IT IMPOSES UPON HIM AND HAS
RECEIVED A DUPLICATE COPY OF THIS AGREEMENT FOR HIS RECORDS.
4.7 Blue-Pencil. If any court of competent jurisdiction shall at
-----------
any time deem the term of this Agreement or any particular Restrictive Covenant
(as defined) too lengthy or the Territory too extensive, the other provisions
of this Article IV shall nevertheless stand, the Restrictive Period herein
shall be deemed to be the longest period permissible by law under the
circumstances and the Territory herein shall be deemed to comprise the largest
territory permissible by law under the circumstances. The court in each case
shall reduce the time period and/or Territory to permissible duration or size.
4.8 Remedies. Employee acknowledges and agrees that the covenants
--------
set forth in this Article IV (collectively, the "Restrictive Covenants") are
reasonable and necessary for the protection of the Company's business
interests, that irreparable injury will result to the Company if Employee
breaches any of the terms of said Restrictive Covenants, and that in the event
of Employee's actual or threatened breach of any such Restrictive Covenants,
the Company will have no adequate remedy at law. Employee accordingly agrees
that in the event of any actual or threatened breach by him of any of the
Restrictive Covenants, the Company shall be entitled to immediate temporary
injunctive and other equitable relief, without bond and without the necessity
of showing actual monetary damages, subject to hearing as soon thereafter as
possible. Nothing contained herein shall be construed as prohibiting the
Company from pursuing any other remedies available to it for such breach or
threatened breach, including the recovery of any damages which it is able to
prove.
4.9 Covenant Not to Disparage. During the Restrictive Period and
-------------------------
thereafter, Employee shall not disparage, denigrate or derogate in any way,
directly or indirectly, any of the Company, its agents, officers, directors,
employees, parent, subsidiaries, affiliates, affiliated practices, affiliated
doctors, representatives, attorneys, executors, administrators, successors and
assigns (collectively, the "Protected Parties"), nor shall Employee disparage,
denigrate or derogate in any way, directly or indirectly, his experience with
any Protected Party, or any actions or decisions made by any Protected Party.
ARTICLE V
MISCELLANEOUS
5.1 Notices. Any notice provided for in this Agreement must be in
-------
writing and must be either (i) personally delivered, (ii) mailed by registered
or certified first class mail, prepaid with return receipt requested or (iii)
sent by a recognized overnight courier service, to the recipient at the address
below indicated:
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To the Company:
NovaMed Eyecare Services, LLC
000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxxxxx, Xx.
with a copy to:
Xxxxxx Xxxxxx & Xxxxx
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
To Employee:
Xxxxx X. Xxxxxxxx
1419 Saranell
Xxxxxxxxxx, Xxxxxxxx 00000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given (a) on the date
such notice is personally delivered, (b) three (3) days after the date of
mailing if sent by certified or registered mail, or (c) one (1) day after the
date such notice is delivered to the overnight courier service if sent by
overnight courier.
5.2 Severability. Whenever possible, each provision of this
------------
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
5.3 Entire Agreement. This Agreement, those documents expressly
----------------
referred to herein and other documents of even date herewith embody the
complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof
in any way.
5.4 Counterparts. This Agreement may be executed on separate
------------
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
13
5.5 Successors and Assigns. This Agreement is intended to bind and
----------------------
inure to the benefit of and be enforceable by Employee and the Company and
their respective successors and permitted assigns. Employee may not assign any
of his rights or obligations hereunder without the written consent of the
Company.
5.6 No Strict Construction. The language used in this Agreement
----------------------
will be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
party hereto.
5.7 Amendments and Waivers. Any provision of this Agreement may
----------------------
be amended or waived only with the prior written consent of the Company and
Employee.
5.8 Governing Law. This Agreement shall be construed and enforced
-------------
in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Agreement shall be governed by, the laws
of the State of Illinois, without giving effect to provisions thereof regarding
conflict of laws.
5.9 Income Tax Treatment. Employee and the Company acknowledge
--------------------
that it is the intention of the Company to deduct all amounts paid under this
Agreement as ordinary and necessary business expenses for income tax purposes.
Employee agrees and represents that he will treat all such amounts as ordinary
income for income tax purposes, and should he report such amounts as other than
ordinary income for income tax purposes, he will indemnify and hold the Company
harmless from and against any and all taxes, penalties, interest, costs and
expenses, including reasonable attorneys' and accounting fees and costs, which
are incurred by Company directly or indirectly as a result thereof.
5.10 CONSENT TO JURISDICTION. THE COMPANY AND EMPLOYEE HEREBY
-----------------------
CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE
COUNTY OF XXXX, STATE OF ILLINOIS AND IRREVOCABLY AGREE THAT SUBJECT TO THE
COMPANY'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EMPLOYEE ACCEPTS FOR HIMSELF
AND IN CONNECTION WITH HIS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
5.11 WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY WAIVE THEIR
--------------------
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS TRANSACTION AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED. THE PARTIES HERETO ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON
SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE OTHER PARTY. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
14
AGREEMENT, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, DISCRIMINATION CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS. THE PARTIES HERETO ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO
RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE COMPANY AND EMPLOYEE
FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH THEIR
RESPECTIVE LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES THEIR
RESPECTIVE JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE TRANSACTION CONTEMPLATED HEREBY. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
15
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.
THIS AGREEMENT CONTAINS AUTOMATIC RENEWAL PROVISIONS.
COMPANY:
-------
NovaMed Eyecare Services, LLC, a Delaware limited
liability company
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
EMPLOYEE:
--------
/s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxxx
16
