EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into by
and between MEDCATH INCORPORATED, a North Carolina corporation (the
"Company") and Xxxxxxx X. Post, a resident of Dallas, Texas ("Employee")
and is effective the 24th day of September, 1996.
WHEREAS, the Company desires to employ Employee as a full-time employee and
Employee desires to accept that position in accordance with the terms hereof.
NOW, THEREFORE, it is agreed as follows:
1. EMPLOYMENT. Employee shall be employee as Chief Financial Officer. For
new and very valuable consideration described herein, the Company shall
employ Employee and Employee accepts employment upon the terms and conditions
hereinafter set forth, with such employment to commence on the 30th day of
September, 1996.
2. DUTIES. Employee shall be a full-time employee of the Company and,
accordingly, shall devote a commensurate amount of time and effort in the
performance of Employee's duties hereunder. Employee shall be responsible for
the supervision and direction of all financial matters of the Company,
including but not limited to financial reporting, financial planning and
forecasts, and relationships with third parties such as stock analysts,
creditors, and joint venturers. Employee shall also have such other duties
as assigned to Employee from time to time by the Company's President. Employee
shall become a full-time resident of either Charlotte, North Carolina or a
community within a reasonable commuting distance thereof as soon as reasonably
possible.
During the term of employment hereunder, Employee shall not be engaged in
any other business activity whether or not such business activity is pursued
for gain, profit, or other pecuniary advantage.
3. COMPENSATION. For and in consideration of the services to be rendered by
Employee hereunder, the Company shall pay to Employee an annual salary of One
Hundred Forty-Five Thousand Dollars ($145,000) which shall be paid on a monthly
basis unless otherwise agreed to by the parties hereto. Employee's salary shall
be reviewed by the President of the Company or other officers or senior
management team members of the Company as designated by the President from
time to time. Employee shall also be eligible to participate in an annual bonus
compensation plan each year of employment in accordance with the Company's
senior executive compensation plan as implemented from time to time by the
Company's Compensation Committee. Employee will only be eligible for any bonus
award if Employee is employed by the Company on the day that is thirty (30)
days prior to the end of the year for which the bonus applies.
4. MISCELLANEOUS BENEFITS. During Employee's employment, the Company shall
provide Employee with additional benefits substantially equivalent to those
which are generally
provided to other similar employees of the Company. The Company shall
reimburse Employee for reasonable expenses incurred by Employee
in the course of Employee's employment with the Company provided those
expenses are consistent with reasonable policies established from time to time
by the Company. The Company shall pay up to Ten Thousand Dollars ($10,000) for
Employee's relocation and moving expenses upon the receipt of proper
documentation of such expenses by Employee.
5. TERMINATION OF EMPLOYMENT.
(a) BY THE COMPANY FOR CAUSE. The Company shall have the right to
terminate Employee's employment for cause as provided herein by giving
written notice thereof. "Cause" shall mean that Employee commits a willful act
of fraud, dishonesty or disloyalty toward the Company; is convicted of
criminal conduct resulting in a jail sentence (whether or not such sentence
is suspended); engages in conduct significantly injurious to the Company
monetarily; violates a material term of this Agreement including, but not
limited to, failure to fulfill the duties assigned to Employee by the
Company; becomes disabled; or submits a notice of resignation to the Company.
Employee shall be deemed disabled if he has been unable for a period of thirty
(30) days, by reason of physical or mental infirmity, to perform on a full-
time basis Employee's assigned responsibilities. The existence of disability
shall be reasonably determined by the Board of Directors of the Company.
(b) By the Company Without Cause. Subject to (e) below, the Company
may terminate Employee's employment at any time without cause by giving
Employee written notice thereof.
(c) Change of Control. The Company shall terminate Employee's
employment immediately upon a Change of Control of the Company, as defined
herein. For purposes of this Agreement, a "Change of Control" shall mean
the earliest date on which either of the following events shall occur;
(i) An individual, enmity or group shall acquire otherwise than
directly from the Company, beneficial ownership of forty percent (40%)
or more of the outstanding common stock or voting power of the
Company, provided that no such individual, entity or group shall be
deemed to beneficially own any securities held by:
(1) the Company or any of its subsidiaries,
(2) any employee benefit plan of the Company or any of its
subsidiaries, or
(3) any current employee of the Company; or
(ii) The persons who were directors of the Company on the
effective date of this Agreement, together with those who subsequently
became directors of the Company and whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at
least a majority of the directors who were directors on the effective
date of this Agreement, or directors whose nomination or election was
approved as provided above, shall cease to constitute a majority of
the
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Board of Directors of the Company or of its successor by merger,
consolidation or sale of assets.
If the Company terminates Employee's employment as the result of a
Change of Control, then within thirty (30) days of the event causing such
termination, the Company shall pay to Employee in a lump sum, an amount
equal to two (2) times the total cash compensation earned by Employee
during the immediately preceding fiscal year of the Company, regardless of
when such compensation was paid, plus an amount equal to the then present
value of two (2) years' worth of normal health, life insurance and
retirement benefits as provided to Employee pursuant to Paragraph 4 above
(but excluding any relocation and moving expenses). If the Company
terminates Employee's employment as the result of a Change in Control, all
options in the Company's common stock granted to Employee by Company shall
vest immediately.
(d) By Employee. Employee may terminate Employee's employment upon at
least thirty (30) days' written notice.
(e) Salary and Benefits.
(i) If the Company terminates Employee's employment under this
Agreement for any reason other than cause or Change of Control, the
Company will continue to be liable for Employee's salary and all
awarded bonuses, to be paid on a monthly basis for a period of five
(5) months following the date of termination, as long as and only if
Employee is not otherwise in default hereunder during that period;
provided, however, that Employee's salary shall not be payable once
Employee becomes employed substantially full-time or otherwise earns,
on a monthly basis, at least 75% of Employee's monthly salary
hereunder.
(ii) Upon any termination of Employee's employment for cause,
Employee shall not be entitled to any further salary, bonuses or
benefits following the date of termination of Employee's employment.
(iii) Upon termination of Employee's employment for any reason,
Employee shall be entitled to receive only such additional benefits
which have accrued or become payable to Employee prior to the end of
Employee's actual employment.
(iv) Upon termination, Employee shall not be entitled to any
additional salary or benefits other than those accrued prior to the
date of termination or as provided in paragraph 5(c) or paragraph
5(e)(i) above, if any. Notwithstanding anything in this Agreement to
the contrary, no further salary or benefits shall be due to Employee
once Employee begins to receive the proceeds of any disability
insurance policy.
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6. CONFIDENTIALITY, NON-DISCLOSURE AND NON-COMPETITION.
(a) IN GENERAL. For purposes of this Paragraph 6, all references to the
Company shall include all affiliates of the Company. During the course of
Employee's employment, Employee will be exposed and have access to substantial
quantities of information and technology (the "Confidential Information")
relating to the Company's business that are valuable trade secrets or
confidential information, including, but not limited to, information concerning
customers, operations, pricing, technology, marketing strategies, methods of
operations, design of facilities and terms of agreements to which the Company
is a party.
The Confidential Information was developed, compiled and/or tested by the
Company at considerable amounts of money in building upon and expanding that
Confidential Information. The Confidential Information enables the Company to
conduct its business with success and with a competitive advantage as long as
the Confidential Information remains not generally known to others, whether
those others operate in direct competition with the Company or its customers
or begin operations in geographical areas which are of interest to the Company,
specifically within the United States.
Employee, by reason of Employee's role as an employee of the Company, is
familiar with and has access to the Company's customers and their needs and
to the marketing and pricing pursued by the Company with respect to those
customers and the Company's products and services.
This Paragraph is designed to prohibit Employee from using the Confidential
Information and knowledge and relationships developed as an insider of the
Company for Employee's own benefit or for the benefit of parties other than
the Company. The Company would not give Employee access to the Confidential
Information and authority without Employee's execution of this Agreement
and Employee willingly signs this Agreement because Employee has received
additional consideration to do so and because Employee believes Employee's
relationship with the Company is and will be in Employee's own best interest.
Both parties agree that the provisions of this Paragraph 6 should be construed
broadly in favor of the Company. In light of the foregoing, Employee agrees
to the terms of subparagraph (b) and (c) below.
(b) Confidential Information. Employee promises that:
(i) Employee will take all reasonable precautions to safeguard all
Confidential Information at all times so that it is not exposed to, or taken
by, unauthorized persons, and, when entrusted to Employee, will exercise
Employee's best efforts to assure its safekeeping; and
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(ii) During or after termination of Employee's relationship with the
Company, Employee will not, directly or indirectly, use, or disclose or make
available to anyone outside the Company, any Confidential Information.
(c) Competition.
(i) Employee agrees that:
(A) Employee will not, during the period of Employee's employment with
the Company, engage or be interested, directly or indirectly, in any manner,
as a partner, owner, officer, director, advisor, employee or in any other
capacity in any Competitive Business; and
(B) In the event Employee's employment with the Company ceases for any
reason, Employee will not engage in, for a period of eighteen (18) months
after that termination, in any manner directly or indirectly, whether as an
employee, officer, owner, partner, shareholder, consultant, agent or otherwise,
any Competitive Business within fifty (50) miles of any location which the
Company (1) has provided facilities or services of any type whatsoever during
Employee's employment with the Company, or (2) is actively developing any
facility or service.
(ii) For purposes of this subparagraph (c), a "Competitive Business"
shall include:
(A) A hospital;
(B) Any health care facility or service providing primarily cardiology
related facilities or services;
(C) Any other health care facility or service which provides any facility
or service similar to that provided by the Company during Employee's
employment by the Company; or
(D) Any health care facility or service which the Company was actively
developing, or actively considering the development of, during
Employee's employment by the Company.
7. ENFORCEMENT. If there is a breach or threatened breach of the provisions
of Paragraph 6 of this Agreement, in addition to other remedies at law or
equity, the Company shall be entitled to injunctive relief. The parties
desire and intend that the provisions of Paragraph 6 shall be enforced to the
fullest extent permissible under the law and public policies applied. In the
event that any paragraph, subparagraph, sentence, clause, phrase, word, or
figure is found by any applicable authority to be invalid or unenforceable,
such unenforceable provision shall be deemed to be deleted from this
Agreement and the balance of Paragraph 6 shall thereupon be modified in order to
render the same valid and enforceable.
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8. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be sent by registered mail, by other
reasonable means of delivery providing overnight service, or by hand to
Employee at the Company's address set forth below until the Company is
notified otherwise in writing by Employee; to the Company at 0000 Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, Attention: President. Notice shall
be deemed to have been given when deposited with the Postal Service or other
delivery service or, if delivered by hand, when received by the addressee.
A party may change the address to which notice it must be given by advising
the other parties in writing of the new address.
9. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the waiving party.
10. ASSIGNMENT. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Company. As a personal service contract the
rights and obligations of Employee under this Agreement may not be
assigned by Employee.
11. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding
the parties with respect to the subject matter hereof and cannot be amended
orally but only by a writing signed by the party against whom enforcement of
any waiver, change, modification, extension or discharge is sought.
12. APPLICABLE LAW. This Agreement shall be construed in accordance with
the laws of the State of North Carolina applicable to contracts made and
to be performed in North Carolina, without reference to choice of laws
principles, and that law shall be applied in connection with its
enforcement in other states and jurisdictions to the fullest extent possible.
13. COUNTERPART EXECUTIONS: Facsimiles. This Agreement may be executed in
any number of counterparts with the same effect as if all of the parties had
signed the same document. Such executions may be transmitted to the parties
by facsimile and such facsimile execution shall have the full force and
effect of an original signature. All fully executed counterparts, whether
original executions or facsimile executions or a combination, shall be
construed together and shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
following execution page(s) effective as of the day and year first above
written.
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EXECUTION PAGE
TO
EMPLOYMENT AGREEMENT
MEDCATH INCORPORATED
9/24/96 By: /s/ Xxxxxxx X. Xxxxxxx
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Date Xxxxxxx X. Xxxxxxx, President
9/24/96 /s/ Xxxxxxx X. Post (SEAL)
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Date Xxxxxxx X. Post
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