EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement"), made and entered into
this 28th day of February, 2000, by and between LABONE, INC., a Missouri
corporation ("LabOne"),and Xxxx X. XxXxxxx("Employee").
WITNESSETH:
WHEREAS, LabOne is a laboratory specializing in clinical and insurance
testing and related services ("Lab Business"); and
WHEREAS, Employee is knowledgeable and has substantial experience in
the clinical laboratory testing business; and
WHEREAS, in accordance with the terms and provisions of this
Agreement, LabOne desires to employ Employee to obtain the benefit of his
knowledge and experience, and Employee desires to be employed by LabOne;
and
WHEREAS, LabOne and Employee agree that the restrictive covenants and
confidentiality agreements contained in this Agreement are essential to the
growth and stability of the Lab Business of LabOne and to the continuing
viability of the Lab Business in the event the employment of Employee is
terminated;
NOW, THEREFORE, in consideration of LabOne's agreement to employ
Employee and the mutual promises herein contained, the parties hereto agree
as follows:
1. Employment. LabOne hereby agrees to employ Employee, and Employee
hereby agrees to accept such employment and to perform his duties and
obligations hereunder, in accordance with the terms and conditions
hereinafter set forth.
2. Term. The term of Employee's employment pursuant to this
Agreement shall commence on April 1, 2000 and shall continue until
terminated in accordance with the provisions of Paragraph 13 hereof.
3. Duties and Responsibilities. Employee shall serve as Chief
Financial Officer of LabOne, shall serve in such other capacities as the
Officers or Board of Directors of LabOne may from time to time prescribe,
shall perform all duties and responsibilities incidental to such positions
and shall cooperate fully with the Board of Directors and Officers of
LabOne. Employee shall devote all of his business time, attention and
energy to the performance of such duties and responsibilities.
4. Compensation. During the term of Employee's employment
pursuant to this Agreement, Employee shall be paid a salary of $14,583
per calendar month, or such other amount, which shall not be less than
said base salary, as may from time to time be determined by LabOne,
payable in arrears. Employee shall also be entitled to a car allowance
of $400 per calendar month.
5. Relocation Expenses. LabOne will reimburse Employee in an
amount up to $50,000 for his expenses of relocating his residence from
Scottsdale, Arizona to the Greater Kansas City Area. Relocation Expense
shall include: costs associated with the sale of Employee's residence
in Phoenix, Arizona; moving of contents; and up to three house-hunting
trips in Kansas City.
6. Stock Option. Employee shall be entitled to a grant of a Non-
Qualified Stock Option under the LabOne, Inc. 1997 Long-Term Incentive
Plan for Seventy Thousand (70,000) shares of the common stock of LabOne,
at an option price equal to the fair market value per share of the
common stock of LabOne on earlier of the date of grant or date of first
employment, as determined by the Long-Term Incentive Plan Committee,
such Stock Option Agreement to be in the form attached hereto as
Exhibit A.
7. Annual Incentive Bonus and Other Fringe Benefits. During the
term hereof, Employee shall be eligible to receive an annual incentive
bonus based upon the performance of LabOne in relation to pre-determined
financial goals established by the Compensation Committee of the Board
of Directors of LabOne, after consultation with Employee. Employee
shall be eligible for a bonus for three-fourths (3/4) of a year of
service for the year 2000. Employee shall also be entitled to
participate in such fringe benefit programs as LabOne may make available
from time to time to its executive officers, which shall include
reasonable hospital and major medical insurance coverage, long-term
disability and life insurance, in amounts and on terms no less favorable
than those provided to other executive officers of LabOne.
8. Inventions. All inventions, products, discoveries, improvements,
processes, manufacturing, marketing and service methods and techniques,
formulae, design, styles, specifications, databases, computer programs
(whether in source code or object code), know-how, strategies and data,
whether or not patentable or registrable under copyright or similar
statutes, made, developed or created by Employee (whether or not at the
request or suggestion of LabOne, alone or in conjunction with others, and
whether during regular hours at work or otherwise) during Employee's period
of employment with LabOne (collectively, "Inventions"), shall be promptly
and fully disclosed by Employee to an appropriate executive of LabOne.
Employee hereby assigns, transfers and conveys to LabOne all rights in and
to all Inventions as its exclusive property. Employee shall give evidence
and promptly execute and/or deliver to an appropriate executive of LabOne,
without any additional compensation therefor, all papers, drawings, models,
programs, data, documents and other material:
(a) pertaining to or in any way relating to or evidencing any
Inventions, or
(b) necessary or desirable to document such transfer, or to
enable LabOne to file and process applications for and to
acquire, maintain and enforce any and all patents,
trademarks, registrations or copyrights with respect to any
such Inventions, or to obtain any extension, validation,
reissue, continuance or renewal of any such patent, trademark
or copyright.
LabOne will be responsible for the preparation of any such
instruments, documents and papers and for the implementation of any such
proceedings and will reimburse Employee for all reasonable expenses
incurred by Employee in complying with the provisions of this Section.
EMPLOYEE IS HEREBY NOTIFIED THAT the provisions of this Paragraph 8 shall
not apply to an Invention for which no equipment, supplies, facility or
trade secret information of LabOne was used and which was developed
entirely on Employee's own time, unless:
(i) the Invention relates directly to the business of LabOne or
to its actual or demonstratively anticipated research or
development, or
(ii) the Invention results from any work performed by Employee
for LabOne.
9. Property of LabOne. All correspondence, notes, recordings,
documents, customer lists and other materials and reproductions thereof
pertaining to any aspect of the business of LabOne shall be the property of
and shall be delivered to and retained by LabOne upon termination of his
employment pursuant to this Agreement.
10. Confidentiality. During the term of and at any time after the
termination of his employment pursuant to this Agreement, Employee will
hold in trust and confidence and will not divulge, disclose or convey to
any person, firm, corporation or other entity and will keep secret and
confidential all trade secrets, proprietary information and confidential
information heretofore or hereafter acquired by him concerning LabOne or
its subsidiaries, and will not use the same for himself or others in any
manner, except to the extent that such information should become no longer
a trade secret, proprietary or confidential. Such trade secrets,
proprietary information and confidential information shall be deemed to
include, but shall not be limited to, information, whether written or not
and not approved for disclosure by the Board of Directors for LabOne:
(a) of a technical nature, such as but not limited to,
technology, inventions, discoveries, improvements,
processes, formulae, ideas, know-how, methods,
compositions, computer software programs or research
projects, including the identity of research organizations
and researchers,
(b) of a business nature, such as but not limited to
information concerning costs, profits, supplies, suppliers,
marketing, sales or lists of customers, and
(c) pertaining to future developments, such as but not limited
to information concerning research and development or
future marketing methods.
11. Restrictive Covenants. In consideration of Employee's employment
with LabOne and in further consideration of the compensation provided to
Employee hereunder and the post-termination payments, if any, provided for
in Paragraph 13 hereof, Employee agrees that during the term of his
employment pursuant to this Agreement, and for a period of two (2) years
after the termination for any reason of his employment pursuant to this
Agreement, Employee will not, without the prior written consent of LabOne,
directly or indirectly, individually or in concert with other, or through
the medium of any other corporation, partnership, syndicate, association,
joint venture, or other entity or as an employee, officer, director, agent,
consultant, partner, member or otherwise:
(a) solicit, accept, divert or service, or attempt to solicit,
accept, divert or service, any business similar to the type
and character of business then engaged in by LabOne from
any person, corporation or other entity who was as of the
date of the termination of Employee's employment a customer
of LabOne,
(b) solicit, induce or encourage any employee, contractor or
agent of LabOne to terminate employment or any other
relationship with LabOne or to compete with LabOne in any
manner, or
(c) compete with LabOne in the Lab Business or in any other
business conducted by LabOne as of the date of termination
of Employer's employment.
It is understood and agreed that Paragraph 11(c) shall apply only with
respect to the following geographic area: All territory in which LabOne or
its representatives or agents, as of the date of the termination of
Employee's employment pursuant hereto, sells or offers for sale LabOne's
products or services.
12. Judicial Relief. LabOne and Employee agree that in the event
that any court shall finally hold that any provision of Paragraph 11 of
this Agreement is void or constitutes an unreasonable restriction against
Employee, the provisions of Paragraph 11 shall not be rendered void, but
shall apply with respect to such time or territory or to such other extent
as such court may judicially determine or indicate constitutes a reasonable
restriction under the circumstances. LabOne shall be entitled to
appropriate injunctive relief in any court of competent jurisdiction to
enforce its rights under Paragraphs 8, 9, 10 and 11 of this Agreement, in
addition to any other rights and remedies available to LabOne at law or in
equity, it being agreed that any violation of Paragraphs 8, 9, 10 or 11 of
this Agreement by Employee is reasonably likely to cause irreparable damage
to LabOne which will be difficult or impossible to value in monetary
damages.
13. Termination. Employee's employment pursuant to this Agreement
shall terminate upon the occurrence of any of the following events:
(a) Death. In the event that Employee dies during the term of
this Agreement, LabOne shall pay to his executors or
administrators an amount equal to the installments of his
salary payable for the month in which he dies, and
thereafter, LabOne shall have no further liability or
obligation hereunder to his executors, heirs or assigns or
any other person claiming under or through him.
(b) Disability. In the event that Employee continues to be
unable to fully perform his duties and responsibilities
hereunder by reason of illness, injury or mental or
physical disability or incapacity for ninety (90)
consecutive days, during which time he shall continue to be
compensated for monthly installments of salary as provided
in Paragraph 4 hereof, Employee's employment pursuant to
this Agreement may be terminated by LabOne, and LabOne
shall thereafter have no further liability or obligation
hereunder to Employee. Employee agrees in the event of any
dispute under this paragraph to submit to a physical
examination by a licensed physician selected by LabOne and
to accept LabOne's decision based on the results thereof.
(c) Voluntary Termination. Employee's employment may be
voluntarily terminated by Employee giving thirty (30) days'
prior written notice to LabOne. In the event Employee
voluntarily terminates employment, LabOne shall have no
further liability or obligation hereunder to Employee.
(d) Termination for Cause. Employee's employment may be
involuntarily terminated by LabOne at any time for cause.
In the event that Employee is involuntarily terminated by
LabOne for cause, LabOne shall thereafter have no further
liability or obligation hereunder to Employee.
(e) Termination Without Cause. Employee's employment may be
involuntarily terminated by LabOne at any time without
cause by LabOne giving thirty (30) days' prior written
notice to Employee. In the event that Employee is
involuntarily terminated without cause by LabOne, LabOne
shall pay to Employee in a lump sum an amount equal to
twelve (12) months' base salary. Said amount shall be paid
to Employee within thirty (30) days of LabOne's giving
notice of termination to Employee and shall be determined
by the aggregate of the last twelve (12) months' base
salary of Employee preceding the month LabOne transmits
such notice of termination. Upon such payment, LabOne
shall have no further liability or obligation hereunder to
Employee.
(f) Termination Subsequent to Change in Control.
Notwithstanding any other provision of this Agreement to
the contrary, in the event that (i) a change of control of
LabOne shall occur at any time during which Employee is in
the full-time employment of LabOne or its successor and
(ii) within one (1) year after such a change in control,
Employee's employment with LabOne or its successor is
terminated by LabOne or its successor for any reason other
than permanent disability, death or normal retirement, or
is voluntarily terminated by Employee for any reason at his
sole discretion, LabOne will promptly pay to Employee as
termination compensation the lump sum amount described
below.
The lump sum compensation payable to Employee shall be
equal to three (3) times the average annual compensation
includible in Employee's gross income for the most recent
five (5) taxable years ending before the date of the change
in control. If Employee has been an employee of LabOne for
less than 5 years, Employee's lump sum payment shall be
equal to 3 times the average annual compensation includible
in Employee's gross income based on the portion of the 5
year period during which officer performed services for
LabOne. To the extent that any amount required to be paid
hereunder would constitute an "excess parachute payment"
within the meaning of Section 28OG(b) of the Internal
Revenue Code of 1986, that excess amount need not be paid.
For purposes of this Section (f), a "change of control"
shall be deemed to have taken place if there shall have
occurred (i) the sale or other disposition resulting in the
transfer of legal or beneficial ownership of, or the right
to vote, more than fifty percent (50%) of the outstanding
capital stock of LabOne to one or more third-party
purchasers, except in connection with an underwritten
public offering of the common stock of LabOne, (ii) a
merger or consolidation of LabOne with or into any entity,
or (iii) a sale or other transfer of substantially all of
the assets of LabOne to any person or entity.
In the event of termination of employment under the circumstances
described above, LabOne shall pay to Employee the installments of his base
salary through the date of termination of employment, any annual incentive
bonus for the previous year if such has been approved but not paid and the
lump sum amount as termination compensation described above. Such payments
to Employee and the arrangements provided for by any stock option or other
agreement between LabOne and Employee in effect at the time and by any
other applicable plan of LabOne will constitute the entire obligation of
LabOne to Employee with respect to such termination, and will also
constitute full settlement of any claim under law or in equity that
Employee might otherwise assert against LabOne or any of its employees on
account of such termination.
14. Survival. Notwithstanding the termination of Employee's
employment pursuant to the provisions of Paragraph 13 hereof, Employee's
obligations under Paragraphs 8, 9, 10 and 11 hereof and the provisions for
relief against Employee in Paragraph 12 hereof shall continue in full force
and effect. Any right or power conferred upon LabOne or the Board of
Directors of LabOne by the terms of this Agreement shall inure to the
benefit of any person(s) of entity(ies) into which LabOne is consolidated,
merged or liquidated, and the Board of Directors or other governing body of
any such corporation of other entity.
15. Law Governing. This Agreement shall be governed by and
interpreted under the laws of the State of Missouri.
16. Notices. All notices and other communications required or
permitted hereunder or necessary or convenient shall be deemed to have been
given when mailed by certified or registered mail, postage prepaid,
addressed as follows:
If to Employee, to: Xxxx X. XxXxxxx,
12501 Sagamore
Leawood, Kansas
and if to LabOne, to: W. Xxxxxx Xxxxx XX
President and Chief Executive Officer
LabOne, Inc.
00000 Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxx 00000,
or such other persons and addresses as have been furnished by Employee or
LabOne to the other in writing. The failure of Employee or LabOne to
require strict performance of any provision of this Agreement by the other,
or the forbearance to exercise any right or remedy, shall not be construed
as a waiver by such party of any such right or remedy, nor shall any single
or partial exercise of any right or remedy preclude any other or further
exercise thereof or the exercise of any other right or remedy.
17. Contents of Agreement, Amendment and Assignment. This Agreement
sets forth the entire understanding between the parties with respect to the
subject matter hereof and cannot be changed, modified or terminated except
in writing. All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the
respective heirs, representatives, successors and assigns of the parties
hereto, except that the duties and responsibilities of Employee hereunder
are of a personal nature and shall not be assignable in whole or in part by
Employee.
18. Severability. If any provision of this Agreement or the
application thereof under any circumstance is adjudicated to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any
other provision or application of this Agreement which can be given effect
without the invalid or unenforceable provision or application.
19. Gender. Masculine pronouns used herein shall refer to the
masculine or feminine gender as appropriate.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
LABONE, INC.
By: /s/ W. Xxxxxx Xxxxx XX
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W. XXXXXX XXXXX XX, President
/s/ XXXX X. XxXXXXX
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XXXX X. XxXXXXX
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