EXHIBIT 10.37
RETENTION AGREEMENT
This RETENTION AGREEMENT ("Agreement") is entered into as of November 15,
2006, by and between Radiologix, Inc., a Delaware corporation (the "Company"),
Primedex Health Systems, Inc., a New York corporation ("Primedex") and Xxxxxxx
X. Xxxxxxxxx ("Employee").
RECITALS
WHEREAS, the Company has entered into a definitive agreement to be
acquired by Primedex; and
WHEREAS, Primedex and the Company anticipate that the transaction will be
completed on or about October 15, 2006 (the "Close Date"); and
WHEREAS, Employee is currently employed by the Company in the capacity of
Senior Vice President, Field Operations, reporting to the Company's Chief
Executive Officer; and
WHEREAS, the Company desires to retain the services of Employee in the
role of Senior Vice President, Field Operations through the Close Date; and
WHEREAS, Primedex desires to offer Employee the position of COO - Eastern
Operations with Primedex after the Close Date;
THEREFORE, in consideration of the mutual covenants and conditions set
forth herein, and other good and valuable consideration, the parties hereby
agree as follows:
1. RETENTION PROGRAM.
1.1 CONTINUED EMPLOYMENT. Employee shall be offered employment as COO
-Eastern Operations with Primedex, commencing on the Close Date. Employee's
salary shall be subject to annual review, but in no event shall be less than
$250,000 per year. Should Employee remain employed by Primedex at the first
anniversary of the Close Date, Primedex shall pay Employee, within three
business days of the first anniversary, a bonus of $125,000. Should employee
remain employed by Primedex at the second anniversary of the Close Date,
Primedex shall pay Employee, within three business days of the second
anniversary, a bonus equal to $250,000.
1.2 TERMINATION WITHOUT CAUSE. If Primedex terminates Employee's
employment hereunder prior to the first anniversary of the Close Date for any
reason other than for Disability or Cause (each as defined below), then Primedex
shall pay Employee, not later than the fifteenth business day after the
effective date of such termination of employment, a lump sum severance payment
in an amount equal to the Employee's then current annual salary for one year
multiplied by three.
If Primedex terminates Employee's employment hereunder on or after the
first of the Close Date and prior to the second anniversary of the Close Date
for any reason other than for Disability or Cause (each as defined below), then
Primedex shall pay Employee, not later than the fifteenth business day after the
effective date of such termination of employment, a lump sum severance payment
in an amount equal to the product of Employee's then current annual salary for
one year times two.
If Primedex terminates Employee's employment hereunder after the second
anniversary of the Close Date for any reason other than for Disability or Cause
(each as defined below), then Primedex shall pay Employee, not later than the
fifteenth business day after the effective date of such termination of
employment, a lump sum severance payment in an amount equal to the Employee's
then current annual salary for one year.
1.3 TERMINATION EVENTS. Employee's employment hereunder will terminate
upon the occurrence of any of the following events:
(a) Employee dies;
(b) Primedex, by written notice to Employee or his personal
representative, discharges Employee due to Employee's Disability (as
defined below);
As used in this Agreement, the term "Disability" shall mean that for
a period of at least 120 days during any twelve consecutive month period
on account of a mental or physical condition, Employee is unable to
perform the essential functions of his job for Primedex, even with
reasonable accommodation. The determination of Employee's Disability shall
be made (a) by a medical physician selected or agreed to by Primedex or
(b) upon mutual agreement of Primedex and Employee or his personal
representative. All costs relating to the determination of whether
Employee has incurred a Disability shall be paid by Primedex. Employee
shall submit to any examination that is reasonably required by an
examining physician for purposes of determining whether a Disability
exists.
(c) Employee is discharged by Primedex for Cause (as defined
below):
As used in this Agreement, the term "Cause" shall mean:
(i) Employee's conviction of (or plea of guilty or nolo
contendere to) (A) any felony or (B) any misdemeanor involving fraud
or dishonesty in connection with the performance of his duties
hereunder or moral turpitude; or
(ii) the willful and continued failure of Employee for a
total of 10 days (which need not be consecutive days) within any
fiscal year of Primedex to substantially perform his duties with
Primedex (other than any such failure resulting from illness or
Disability) after a written demand for substantial performance from
Primedex is delivered to Employee, which demand specifically
identifies the manner in which it is claimed Employee has not
substantially performed his duties, or
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(iii) Employee has willfully engaged in misconduct which has,
or can reasonably be expected to have, a direct and material adverse
monetary effect on Primedex.
For purposes of this Section, no act or failure to act on
Employee's part shall be considered "willful" unless Employee acted
in bad faith or without a reasonable belief that Employee's action
or omission was in the best interest of Primedex.
(d) Employee is discharged by Primedex for any reason other than
for Cause or Disability, which Primedex may do at any time;
(e) Employee voluntarily terminates his employment for any reason,
which Employee may do at any time with at least 30 days' advance notice.
Employee shall not be eligible for any retention bonus or severance
payment of any kind if his employment is terminated pursuant to Sections 1.3 (a)
(b) (c) or (e) above.
1.4 DELAY OF SEVERANCE PAYMENT. Notwithstanding anything to the contrary
contained herein, in the event any payments made upon termination of Employee's
employment pursuant to this Agreement are deemed subject to (and not otherwise
exempt from) the requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the "Code"), and Employee is deemed a "specified employee" (as
defined in Code Section 409A), then, if and to the extent required to avoid tax
penalties pursuant to Code Section 409A, Employee shall not be entitled to any
such payments until the first day of the seventh month following the date of his
termination.
2. COVENANT NOT TO COMPETE.
Immediately upon Employee's execution of this Agreement and on an on-going
basis, the Company and Primedex agree that they shall provide to Employee
confidential information and trade secrets of the Company and Primedex and their
businesses ("Confidential Information"). In consideration of, among other
things, the Company's and Primedex's obligation to disclose Confidential
Information to Employee and his receipt of Confidential Information, Employee
agrees that during his employment with the Company and/or Primedex and for the
twelve (12) month period following the termination of Employee's employment
hereunder for any reason, Employee will not, directly or indirectly, whether as
an individual, employee, director, consultant, investor, stockholder, partner,
agent, principal, lender or advisor, or in any other capacity whatsoever, and
whether personally or through other persons:
(i) provide services to any person, firm, corporation or other
business enterprise whose primary business involves (A) owning or
operating diagnostic imaging centers or the provision of diagnostic
imaging services, (B) providing administrative, management or other
information services to radiology practices or (C) providing management
services in the area of radiology, in each case unless he obtains the
prior written consent of the Company or Primedex. This covenant not to
compete shall apply only as to each of the geographic markets in which
Company or Primedex conducts business as of the date of termination of
Employee's employment with the Company or Primedex.
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(ii) solicit business from, attempt to do business with, or do
business with any customer of the Company or Primedex with whom the
Company or Primedex transacted business within the preceding 12 months,
and for which Employee contacted, called on, serviced, did business with
or had significant contact with during Employee's employment with the
Company or Primedex.
(iii) solicit, or attempt to encourage or solicit, any individual to
leave the Company's or Primedex's employ for any reason or interfere in
any other manner with the employment relationships between the Company and
Primedex and their current or prospective employees or any employee who
has been employed by the Company or Primedex within ninety days preceding
Employee's termination.
3. GENERAL PROVISIONS.
3.1 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior agreements between the parties relating to such subject matter. In
the case of any conflict between the terms of this Agreement and any option
agreement or similar instrument, the terms of this Agreement shall control.
3.2 MODIFICATIONS. This Agreement may be changed or modified only by an
agreement in writing signed by both parties hereto.
3.3 GOVERNING LAW. This Agreement is performable in whole or in part in
Baltimore County, Maryland wherein exclusive venue shall lie for any proceeding,
claim or controversy, and shall be governed by, and construed in accordance
with, the laws of the State of Maryland, without giving effect to any
conflict-of-laws principles.
3.4 SEVERABILITY. If any provision of this Agreement is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect.
3.5 NOTICES. Any notices or other communications required or permitted
hereunder shall be in writing and shall be deemed received by the recipient when
delivered personally or, if mailed, five days after the date of deposit in the
United States mail, certified or registered, postage prepaid and addressed, in
the case of the Company, to Radiologix, Inc., 3600 X.X. Xxxxxx Xxxxx Tower, 0000
Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000-0000, attention: General Counsel; in the case
of Primedex, 0000 Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000, attention:
General Counsel; and in the case of Employee, to the address shown for Employee
on the signature page hereof.
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3.6 NO WAIVER. The failure of either party to enforce any provision of
this Agreement shall not be construed as a waiver of that provision, nor prevent
that party thereafter from enforcing that provision of any other provision of
this Agreement.
3.7 LEGAL FEES AND EXPENSES. If any legal action or other proceeding,
including arbitration, is brought for the enforcement of this Agreement, or
because of an alleged dispute, breach, default, or misrepresentation in
connection with any of the provisions of this Agreement, the successful or
prevailing party shall be entitled to recover reasonable attorneys' fees and
other costs incurred in that action or proceeding, in addition to any other
relief to which it may be entitled.
3.8 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
3.9 TERMINATION OF AGREEMENT. This Agreement shall terminate and be of
no force and effect should the transaction contemplated in the recitals herein
not occur.
IN WITNESS WHEREOF, the parties have executed this Agreement, effective as
of the day and year first above written.
COMPANY EMPLOYEE
RADIOLOGIX, INC.,
By: /s/ Xxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------- --------------------------------
Name: Xxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxxxxx
Title: President and Chief Address: 0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxx Xxxxxxx Xxxxxxxxxxx, XX 00000
PRIMEDEX
PRIMEDEX HEALTH SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx, M.D.
-----------------------------------
Name: Xxxxxx X. Xxxxxx, M.D.
Title: Chairman, Chief Executive Officer and President
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