EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of December 15,
2004, between Orion HealthCorp, Inc., a Delaware corporation, with an executive
office located at 0000 Xxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000
(together with its successors and assigns permitted under this Agreement, the
"Company"), and Xxxxxxx X. Xxxxxxx, who resides at the address set forth on
Schedule I hereto (the "Executive").
WITNESSETH:
WHEREAS, the Company and the Executive desire to enter into an employment
arrangement; and
WHEREAS, the Company has determined that it is in the best interests of
the Company and its stockholders to enter into this Agreement setting forth the
obligations and duties of both the Company and the Executive; and
WHEREAS, the Company wishes to assure itself of the services of the
Executive for the period hereinafter provided, and the Executive is willing to
be employed by the Company for said period, upon the terms and conditions
provided in this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive (individually, a
"Party" and together, the "Parties") agree as follows:
1. Employment. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to serve the Company, on the terms and conditions set
forth herein.
2. Term. Subject to the provisions for earlier termination as hereinafter
provided, the term of this Employment Agreement will begin on the date hereof
and will continue for five (5) years hereafter (the "Initial Term of
Employment"). This Agreement will be automatically renewed at the end of the
Initial Term of Employment and each successive renewal term thereafter for
successive two (2) year terms unless either party sends written notice of
termination to the other party not less than one hundred and eighty (180) days
prior to the expiration of the then current Term of Employment (as hereinafter
defined). The Initial Term of Employment together with any renewal terms is
referred to herein as the "Term of Employment." The nonrenewal of the term of
this Agreement by the Company will not be a termination without Cause (as
defined in Section 8(c)).
3. Position and Duties; Place of Performance.
(a) The Executive will serve as Chief Financial Officer of the
Company and will perform all duties customarily attendant to the position
of Chief Financial Officer and such other duties as may reasonably be
assigned from time-to-time by the Board of Directors (the "Board") that
are consistent with his position as Chief Financial Officer.
(b) The Executive will devote his full business time and best
efforts to his employment and perform diligently such duties as are
consistent with his capacity as Chief Financial Officer of the Company and
such other duties as the Board reasonably determines that are consistent
with his position. The Executive will devote his entire working time and
attention to the performance of his responsibilities hereunder; provided,
the Executive may make personal investments, engage in outside
non-competitive business activities or engage in other activities for any
charitable or other non-profit institution, provided that such activities
do not interfere with the performance of the Executive's duties hereunder.
(c) In connection with the Executive's employment by the Company,
the Executive will be based at the Company's place of business which on
the date hereof is located in Atlanta, Georgia, or such other location as
may, subject to Section 8(d), be designated from time to time by the
Board.
4. Base Salary. The Executive will receive from the Company an annual base
salary of One Hundred Seventy-Five Thousand Dollars ($175,000) (as from time to
time adjusted, the "Base Salary"), payable in accordance with the standard
practice of the Company with respect to the payment of salaries of its
employees. The Board will review the Base Salary annually, and may, in its
reasonable discretion, adjust the Base Salary.
5. Annual Bonus. The Executive may be paid a bonus annually based upon the
attainment of objectives determined by the Board after consultation with the
Executive. Within 90 days after the start of each fiscal year, the Board will
communicate to the Executive the objectives applicable to such fiscal year and,
unless the Board and the Executive shall mutually agree otherwise, such
objectives shall apply to such fiscal year.
6. Other Benefits.
(a) During the Term of Employment, the Executive will be provided
with such medical, hospitalization, insurance, pension plan, profit
sharing and employee benefits, cell phone and such other similar
employment privileges and benefits ("Benefits") as are afforded generally
from time to time to other executive employees of the Company, and four
(4) weeks paid vacation each year.
(b) During the term of this Agreement, the Executive shall receive
Five Hundred Dollars ($500) per month (pre-tax) as an automobile
allowance. The Company shall pay all reasonable maintenance and repair
expenses with respect to the automobile used primarily for business
purposes by the Executive, procure and maintain in force collision,
comprehensive, and liability insurance coverage with respect to the
automobile, and pay operating expenses with respect to the automobile.
7. Expense Reimbursement. During the Term of Employment, the Executive
will be entitled to prompt reimbursement by the Company for all reasonable
out-of-pocket expenses
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incurred by him in performing services under this Agreement, upon submission of
such accounts and records as may be required under Company policy.
8. Termination of Employment. The Executive's employment may be terminated
under the following circumstances:
(a) Death. The Executive's employment is terminated upon his death.
(b) Disability. The Executive's employment may be terminated by the
Company due to illness or other physical or mental disability of the
Executive, resulting in his inability to perform substantially his duties
under this Agreement for a period of ninety (90) or more consecutive days
or for one hundred eighty (180) days in the aggregate during any
consecutive twelve (12) month period ("Disability").
(c) Cause. The Executive's employment may be terminated by the
Company for Cause. For purposes of this Agreement, the Company will have
"Cause" to terminate the Executive's employment upon:
(i) the Executive's indictment for any crime involving monies
or other property or any felony, crime or any offense of moral
turpitude, or his commission of fraud, embezzlement, theft,
dishonesty, willful misconduct or deliberate injury to the Company
or its subsidiaries;
(ii) the Executive's intentional or grossly negligent refusal
or failure to perform his duties or carry out directions of the
Company's chief executive officer or Board, which refusal or failure
remains uncured or continues more than thirty (30) days after notice
from the Company specifying in reasonable detail the nature of the
breach, or recurs within such period;
(iii) the Executive's breach of any of his fiduciary duties to
the Company or making of a willful misrepresentation or omission,
which breach or misrepresentation or omission might reasonably be
expected to have a material adverse effect on the Company's business
and which remains uncured or continues more than thirty (30) days
after notice from the Company specifying in reasonable detail the
nature of the breach or misrepresentation or omission, or recurs
within such period;
(iv) the Executive's breach of any material provision of this
Agreement, which breach, if curable, remains uncured or continues
more than thirty (30) days after notice from the Company specifying
in reasonable detail the nature of the breach, or recurs within such
period; or
(v) any misappropriation by the Executive of funds or property
of the Company or any affiliate of the Company.
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Any termination for "Cause" will not be in limitation of any other right
or remedy the Company may have under this Agreement or otherwise.
(d) Good Reason. The Executive may terminate his employment under
this Agreement for Good Reason. For purposes of this Agreement, the
Executive will have "Good Reason" to terminate the Executive's employment
upon the occurrence of any of the following circumstances, without the
Executive's express written consent: (i) a material diminution in the
Executive's position or authority (except during periods when the
Executive is unable to perform all or substantially all of the Executive's
duties and/or responsibilities as a result of the Executive's illness
(either physical or mental) or other incapacity); (ii) a requirement by
the Company that the Executive change the Executive's principal place of
business to a place more than thirty (30) miles from its location on the
date of this Agreement; (iii) a termination of employment by the Executive
within ninety (90) days following a Change in Control (as defined below),
provided, that Good Reason will not exist if the Executive has accepted or
agreed to continue employment following the Change of Control with the
surviving or successor entity and such surviving or successor entity has
agreed to continue or assume this Agreement, provided, further, in the
event of a Change of Control, the Executive is under no obligation to
continue or accept employment with the surviving or successor entity and
may instead elect to terminate his employment for Good Reason upon such
Change of Control; (iv) a breach of this Agreement by the Company which is
not cured within thirty (30) days of written notice by the Company; or (v)
any reduction in the Executive's Base Salary. The Executive's right to
terminate employment pursuant to this subsection 8(d) will not be affected
by the Executive's Disability. The Executive's continued employment will
not constitute consent to, or a waiver of rights with respect to, any
circumstance constituting consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason; provided, however, that the
Executive will be deemed to have waived his rights pursuant to
circumstances constituting Good Reason if he has not provided to the
Company a Notice of Termination (as defined below) within ninety (90) days
following his knowledge of the circumstances constituting Good Reason. A
waiver with respect to the circumstances constituting Good Reason will not
act as a waiver with respect to other future circumstances constituting
Good Reason.
Any termination of the Executive's employment by the Executive must
be communicated by written Notice of Termination to the Company in
accordance with Section 19. For purposes of this Agreement, a "Notice of
Termination" means a notice which indicates the specific termination
provision in this Agreement relied upon and sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so
indicated.
For purposes of this Agreement, a "Change in Control" will occur:
(i) upon the sale or other disposition of 50% or more of the consolidated
assets of the Company taken as a whole; (ii) if shares representing a
majority of the voting power of the Company are acquired by a person or
group (as such term is used in Rule 13d-5 promulgated under the Securities
Exchange Act of 1934, as amended) of persons other than the holders of the
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capital stock of the Company as of the date of this Agreement; (iii) upon
a merger or consolidation pursuant to which the holders of the equity
securities of the Company before the merger or consolidation do not own
equity securities representing a majority of the voting power of the
surviving entity after the merger or consolidation; or (iv) upon approval
by the shareholders of the Company of a complete liquidation or
dissolution of the Company.
9. Compensation Upon Termination.
(a) If the Executive's employment is terminated as a result of the
Executive's death or Disability, he, or his estate, will be entitled to:
(i) any Base Salary earned but not yet paid;
(ii) any bonus awarded pursuant to Section 5 of this Agreement
but not yet paid, payable as soon as administratively feasible
following termination of employment;
(iii) a prorated bonus for the year in which his employment
terminates, prorated based on the number of days worked, minus any
bonus payments made pursuant to Section 5 of this Agreement in
respect of the year containing the date of termination, payable as
soon as administratively feasible following the end of the then
current fiscal year of the Company;
(iv) reimbursement in accordance with this Agreement of any
business expense incurred by the Executive but not yet paid, payable
as soon as administratively feasible following termination of
employment; and
(v) other benefits accrued and earned by the Executive through
the date of his death or Disability in accordance with applicable
plans and programs of the Company.
(b) If the Executive's employment is terminated by the Company for
Cause, or by the Executive other than for Good Reason, or as a result of
notice of nonrenewal provided by the Company or the Executive under
Section 2, he will be entitled to:
(i) any Base Salary earned but not yet paid;
(ii) reimbursement in accordance with this Agreement of any
business expense incurred by the Executive but not yet paid, payable
as soon as administratively feasible following termination of
employment;
(iii) other benefits accrued and earned by the Executive
through the date of his termination in accordance with applicable
plans and programs of the Company;
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(iv) if the Executive's employment is terminated as a result
of notice of nonrenewal provided by the Executive under Section 2,
he will be entitled to a prorated bonus for the year in which his
employment terminates, prorated based on the number of days worked,
minus any bonus payments made pursuant to Section 5 of this
Agreement in respect of the year containing the date of termination,
payable as soon as administratively feasible following the end of
the then current fiscal year of the Company; and
(v) if the Executive's employment is terminated as a result of
notice of nonrenewal provided by the Company under Section 2, he
will be entitled to full vesting of any unvested equity incentives,
including without limitation stock options, restricted stock and
deferred restricted stock units.
(c) If the Executive's employment is terminated by the Company
without Cause, or by the Executive for Good Reason, he will be entitled
to:
(i) any Base Salary earned but not yet paid;
(ii) any bonus awarded pursuant to Section 5 of this Agreement
but not yet paid, payable as soon as administratively feasible
following termination of employment;
(iii) continuation of his Base Salary, at the rate in effect
on the date of his termination of employment (which, in the case of
a termination of the Executive for Good Reason pursuant to Section
8(d)(v), shall be deemed to be the rate in effect prior to giving
any effect to the reduction in Base Salary giving rise to such Good
Reason), until the expiration of the Non-Competition Period (as
defined below);
(iv) the greater of: (A) a prorated bonus for the year in
which employment terminates, prorated based on the number of days
worked, or (B) an amount equal to fifty percent (50%) of the average
of the bonus payments made pursuant to Section 5 of this Agreement
during the two (2) calendar years preceding such termination, if
any, minus any bonus payments made pursuant to Section 5 of this
Agreement in respect of the year containing the date of termination,
payable in either event as soon as administratively feasible
following the end of the then fiscal year of the Company; provided,
however, that this clause (iv) shall not be applicable in the event
that the Executive's employment is terminated upon notice of
nonrenewal provided by the Company under Section 2;
(v) until the expiration of the Non-Competition Period,
subject to any employee contribution applicable to the Executive on
the date of termination, continued participation in all of the
Company's group medical and dental insurance plans in which he was
participating on the date of his termination of
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employment, provided that the Executive is entitled to continue such
participation under applicable law and plan terms;
(vi) reimbursement in accordance with this Agreement of any
business expenses incurred by the Executive but not yet paid to him
on the date of his termination of employment, payable as soon as
administratively feasible following termination of employment; and
(vii) full vesting of any unvested equity incentives,
including without limitation stock options, restricted stock and
deferred restricted stock units.
In the event that, under the terms of any employee benefit plan
referred to in subsection 9(c)(v) above, the Executive may not continue
his participation, he will be provided with the after-tax economic
equivalent of the benefits provided under any plan in which he was
previously eligible to participate for the period specified in subsection
9(c)(v) above. The economic equivalent of any benefit foregone will be
deemed to be the cost that would be incurred by the Executive in obtaining
such benefit on the lowest available individual basis.
(d) Any amounts due under this Section 9 are in the nature of
severance payments or liquidated damages or both, and will fully
compensate the Executive and his dependents or beneficiaries, as the case
may be, for any and all direct damages and consequential damages that any
of them may suffer as a result of termination of the Executive's
employment, and they are not in the nature of a penalty.
(e) Notwithstanding anything contained herein, any obligation of the
Company to the Executive under Sections 9(c)(iii), (iv), (v) and (vii) is
conditioned upon (i) the Executive signing a release of claims in the form
attached hereto as Exhibit A (the "Employee Release") within twenty-one
days (or such greater period as the Company may specify) following the
later of the date on which the Executive (or, in the case of termination
by the Executive for Good Reason, the Company) receives notice of
termination of employment or the date the Executive receives a copy of the
Employee Release and upon the Executive not revoking the Employee Release
in a timely manner thereafter and (ii) the Executive's continuing
compliance with the provisions of Section 10. If the Executive breaches
any provision of Section 10, upon written notice of such breach and
request for repayment from the Company, the Executive shall promptly pay
to the Company an amount equal to the sum of any cash payments previously
paid to the Executive pursuant to Sections 9(c)(iii), (iv), (v) and (vii).
Any such repayment shall not be the exclusive remedy for any such breach
and the Company shall retain all rights to pursue other available remedies
(whether at law or equity) for any such breach.
10. Confidentiality and Non-Competition.
(a) The Executive acknowledges that he has had or will have
unlimited access to confidential information and business methods relating
to the Company's business and
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operations and that the Company would be irreparably injured and the
goodwill of the Company would be irreparably damaged if the Executive were
to breach the covenants set forth in this Section 10. The Executive
further acknowledges that the covenants set forth in this Section 10 are
reasonable in scope and duration and do not unreasonably restrict the
Executive's association with other business entities, either as an
employee or otherwise as set forth herein.
(b) During the Term of Employment and thereafter, except as may be
required by law or necessary in connection with any dealings with any
public agency or authority or in the ordinary course of business during
the Term of Employment pursuant to customary non-disclosure agreements,
the Executive will not disclose, disseminate, divulge, discuss, copy or
otherwise use or suffer to be used, including but not limited to in
competition with, or in a manner harmful to the interests of, the Company,
any confidential information (written or oral) respecting any material
aspect of the Company's business, excepting only use of such data or
information as is (i) at the time disclosed, through no act or failure to
act on the part of the Executive, generally known or available; (ii)
furnished to the Executive by a third party as a matter of right and
without restriction on disclosure; or (iii) required to be disclosed by
court order. Upon termination of the Term of Employment, the Executive
will return to the Company any and all materials in tangible or electronic
form containing confidential information belonging to the Company.
(c) During the Term of Employment and the Non-Competition Period,
the Executive will not in the states of California, Florida, Georgia,
Illinois, Iowa, New Jersey, Ohio or Texas, directly or indirectly, whether
as an individual on the Executive's own account, or as a shareholder,
partner, member, joint venturer, director, officer, employee, consultant,
creditor and/or agent, of any person, firm or organization or otherwise:
(i) own, manage, control or participate in the ownership,
management or control of, or be employed or engaged by or otherwise
affiliated or associated as a consultant, independent contractor or
otherwise with, any other corporation, partnership, proprietorship,
firm, association or other business entity or otherwise engage in
any business that is engaged in the business of the Company or any
of the Company's subsidiaries (collectively, "Subsidiaries"), as
such business is conducted on the applicable date during the Term of
Employment, or in the case of the Non-Competition Period, as of the
date the Executive ceases to be employed by the Company, in any
capacity, including as a consultant;
(ii) directly or indirectly solicit, encourage or induce any
person who is a present or future employee, officer, agent,
affiliate or customer of the Company or any Subsidiary to terminate
or materially alter such person's relationship with the Company or
such Subsidiary;
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(iii) induce any supplier of the Company or any Subsidiary, to
refuse to do business with the Company or any Subsidiary, on as
favorable terms as previously done with the Company or any
Subsidiary, as the case may be; or
(iv) engage in disparagement (which will not include the
providing of accurate information without invidious intent) of the
Company or any Subsidiary by any means to any person.
For purposes of this Agreement, "Non-Competition Period" shall mean the
period during the Term of Employment and thereafter until the second
anniversary of the date of termination of the Executive's employment with
the Company; provided, however, that the Company may, by written notice to
the Executive (whether given before or after the date of termination of
the Executive's employment with the Company), shorten the portion of the
Non-Competition Period occurring following the date of termination of the
Executive's employment with the Company to any date specified in such
notice which occurs on or after the earlier of (x) the second anniversary
of the date of termination of the Executive's employment with the Company
and (y) the date of expiration of the then current Term of Employment.
Notwithstanding the foregoing, in the event that the Company or the
Executive provides notice of nonrenewal under Section 2, then: (1) the
Company shall have the option to continue to pay the Executive his Base
Salary, at the rate in effect on the date of his termination of
employment, until the expiration of the Non-Competition Period; (2) if the
Company exercises such option, it may discontinue the payment of Base
Salary at any time; (3) the Executive shall be subject to Section 10(c)(i)
only for so long as the Company continues to pay the Executive his Base
Salary; and (4) if the Company stops paying the Executive his Base Salary,
then the Executive shall no longer be subject to Section 10(c)(i), but
shall remain subject to the rest of this Section 10.
(d) Notwithstanding anything herein to the contrary, the Executive
will be permitted to own shares of any class of capital stock of any
publicly held corporation so long as the aggregate holdings of the
Executive represent less than one percent (1%) of the outstanding shares
of such class of capital stock.
11. Rights and Remedies Upon Breach.
(a) The Executive expressly agrees and understands that the remedy
at law for any breach by the Executive of Section 10 will be inadequate
and that the damages flowing from such breach are not readily susceptible
to being measured in monetary terms. Accordingly, it is acknowledged that
upon adequate proof of the Executive's violation of Section 10, the
Company will be entitled, among other remedies, to injunctive relief and
may obtain a temporary restraining order restraining any threatened or
further breach. Nothing in this Section 11(a) will be deemed to limit the
Company's remedies at law or in equity for any breach by the Executive of
any of the provisions of this Agreement which may be pursued or availed of
by the Company.
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(b) In the event any court of competent jurisdiction determines that
the specified time period or geographical area set forth in Section 10 is
unreasonable, arbitrary or against public policy, then a lesser time
period or geographical area that is determined by the court to be
reasonable, non-arbitrary and not against public policy may be enforced.
12. Withholding Taxes. All payments to the Executive or his beneficiary
will be subject to withholding on account of federal, state and local taxes as
required by law. If any payment hereunder is insufficient to provide the amount
of such taxes required to be withheld, the Company may withhold such taxes from
any other payment due the Executive or his beneficiary.
13. Assignability; Binding Nature. This Agreement will be binding upon and
inure to the benefit of the Parties and their respective successors, heirs (in
the case of the Executive) and assigns. No rights or obligations of the Company
under this Agreement may be assigned or transferred by the Company except that
such rights or obligations may be assigned or transferred pursuant to (i) a
merger or consolidation in which the Company is not the continuing entity or
(ii) a sale or liquidation of all or substantially all of the assets of the
Company, provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee
assumes the liabilities, obligations and duties of the Company, as contained in
this Agreement, either contractually or as a matter of law. The Company further
agrees that, in the event of a sale of assets or liquidation as described in the
preceding sentence, it will use its best efforts to cause such assignee or
transferee to expressly assume the liabilities, obligations and duties of the
Company hereunder. No obligations of the Executive under this Agreement may be
assigned or transferred by the Executive.
14. Entire Agreement. Except to the extent otherwise provided herein, this
Agreement contains the entire understanding and agreement between the Parties
concerning the subject matter hereof and supersedes any prior agreements,
whether written or oral, between the Parties concerning the subject matter
hereof.
15. Amendment or Waiver. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by both the Executive
and an authorized officer of the Company. No waiver by either Party of any
breach by the other Party of any condition or provision contained in this
Agreement to be performed by such other Party will be deemed a waiver of a
similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by the Executive or an
authorized officer of the Company, as the case may be.
16. Severability. In the event that any provision or portion of this
Agreement is determined to be invalid or unenforceable for any reason, in whole
or in part, the remaining provisions of this Agreement will be unaffected
thereby and will remain in full force and effect to the fullest extent permitted
by law.
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17. Survivorship. The respective rights and obligations of the Parties
hereunder will survive any termination of the Executive's employment with the
Company to the extent necessary to the intended preservation of such rights and
obligations as described in this Agreement.
18. Governing Law. This Agreement will be governed by and construed and
interpreted in accordance with the laws of the State of Georgia, without
reference to principles of conflict of laws.
19. Notices. Any notice given to either Party must be in writing and will
be deemed to have been given when delivered personally or one (1) day after
having been sent by overnight courier service or three (3) days after having
been sent by certified or registered mail, postage prepaid, return receipt
requested, duly addressed to the Party concerned at the address indicated below
or to such changed address as such Party may subsequently give such notice of:
If to the Company or the Board: Orion HealthCorp, Inc.
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
With a copy to: Xxxxxxxx Partners
0000 Xxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxx
and: Ropes & Xxxx LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
If to the Executive: Xxxxxxx X. Xxxxxxx
Address set forth on Schedule I hereto
20. Headings. The headings of the sections contained in this Agreement are
for convenience only and will not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date and year first above written.
ORION HEALTHCORP, INC.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Chief Executive Officer
XXXXXXX X. XXXXXXX
By: /s/ Xxxxxxx X. Xxxxxxx
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