EMPLOYMENT, CONFIDENTIALITY AND NON-COMPETE AGREEMENT
Exhibit 10.48
EMPLOYMENT, CONFIDENTIALITY AND NON-COMPETE AGREEMENT
This EMPLOYMENT, CONFIDENTIALITY AND NON-COMPETE AGREEMENT (the “Agreement”) is made and
entered into by and between MEDCATH INCORPORATED, a North Carolina corporation (the “Company”) and
XXXXX X. XXXXXX, a resident of North Carolina (“Employee”) and is effective the 18th day
of February, 2001.
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 employed as Treasurer for MedCath Incorporated. For
new and 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 or before February 26, 2001.
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 as
assigned by the Company.
While employed by the Company, 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 and the Employee’s agreement to comply with the provisions contained in the Agreement,
the Company shall pay to Employee a bi-weekly salary of Five Thousand Five Hundred Seventy Six
Dollars and Ninety-Two Cents ($5,576.92). While Employee remains employed by the Company,
Employee’s salary shall be reviewed by the Company on an annual basis.
Employee shall be eligible for a sign-on bonus of Twelve Thousand Five Hundred Dollars and
Zero Cents ($12,500.00). Employee agrees that if employment is terminated by the Company for cause
on or before February 26, 2002, Employee will reimburse the Company the full amount of the bonus
paid to him within thirty (30) days of termination. If employment is terminated by the Company
without cause, Employee will not be responsible to reimburse any sign-on bonus amount to the
Company.
Employee shall be eligible to participate in an annual bonus compensation plan each fiscal
year of employment with the Company, provided that such participation complies with the terms,
conditions and guidelines established for eligible employees’ participation. Employee will be
eligible for a bonus the first fiscal year of employment of up to forty (40%) percent of Employee’s
base compensation, based upon the Company’s review of Employee’s performance. Any bonus for the
Employee’s first fiscal year of employment with the Company will be
pro-
rated based upon the Employee’s commencement of employment with the Company as of February 26,
2001; Company shall pay Employee at least fifty percent (50%) of such pro-rated, first fiscal year
bonus potential. While Employee remains employed by the Company, Employee’s eligibility for,
participation in, and terms of the annual bonus compensation plan will be reviewed, and may be
revised, by the Company on at least an annual basis. Performance will include, but not be limited
to, the accomplishment of any objectives outlined by the Company for Employee. Employee
understands that the purpose of the annual bonus compensation plan is to provide participants with
an incentive to remain with the Company. Therefore, in order to be eligible for any bonus, Employee
must be actively employed by the Company at the time the bonus is paid and satisfy all eligibility
criteria imposed by applicable Company policy and law. Employee further understands that the bonus
is not actually earned by Employee unless Employee remains actively employed by the Company
throughout this period, which includes the date of payment.
4. Miscellaneous Benefits. During Employee’s employment with the Company, Employee
shall be eligible for additional benefits, including life insurance, medical insurance, paid time
off, etc., under the same terms and conditions as those which apply to similar employees of the
Company, as they may be changed from time to time. Employee shall be entitled to twenty (20) days
of vacation annually.
With regard to business expenses, the Company shall reimburse Employee for reasonable business
related expenses incurred in the course of Employee’s employment with the Company, provided those
expenses are consistent with the policies established from time to time by the Company. Employee
must submit acceptable documentation of the expenses in order to receive reimbursement.
5. Termination of Employment.
(a) By the Company for Cause. The Company shall have the right to terminate
Employee’s employment immediately and without prior notice in the event that the Company believes
it has cause to terminate employment. “Cause” includes, but is not limited to, fraud; dishonesty;
disloyalty; conviction of criminal conduct; conduct which is or threatens significant injury to the
Company monetarily; conduct which may have a significant or threatened negative impact upon the
image of the Company; failure to fulfill the duties assigned to Employee by the Company; violation
of this Agreement; submission of a notice of resignation to the Company; engaging in or condoning
sexual or other improper harassment; failure to abide by applicable laws, rules, regulations and
work rules; or actions or omissions which the Company considers to be of a similar nature or
degree.
In the event that Employee is terminated for cause, Employee shall not be entitled to receive
any further salary, bonus or benefit following the date of termination of the Employee’s
employment, except as provided by applicable law or Company policy.
(b) By the Company Without Cause. The Company may terminate Employee’s employment at
any time, without cause, by giving Employee at least thirty (30) days written notice thereof.
The Company reserves the right to elect to give pay in lieu of notice.
In the event the Company terminates Employee’s employment without cause, the Company will
continue to pay Employee his/her current bi-weekly salary, less applicable lawful deductions, for a
period of six (6) months following the date of notice of termination of employment, or until
Employee secures other substantially full-time employment or earns, on a monthly basis, at least
75% of Employee’s monthly salary hereunder, whichever occurs first. Employee shall be entitled to
receive pro-rata vacation if terminated without cause, plus other benefits as provided by
applicable law or by Company policy.
(c) By Employee. Employee may terminate Employee’s employment with the Company at any
time. The Company requests the Employee provide the Company with thirty (30) days written notice.
In the event of such termination, Employee shall not be entitled to receive any further salary,
bonus or benefit following Employee’s actual termination, except as provided either by applicable
law or Company policy. The Company reserves the right to elect to provide pay in lieu of allowing
Employee to work during the notice period.
6. Confidentiality and Non-Disclosure Agreements. During the course of Employee’s
employment with the Company, the Company will provide Employee with access to and Employee will be
exposed and/or have access to substantial quantities of confidential information relating to the
Company’s business (including the business of all affiliates and operations of the Company), such
as customer information, vendors, operations and operating procedures, pricing, financial
information, technology, marketing strategies, design of facilities, employment practices,
contractual agreements, and trade secrets (the “Confidential Information”).
Employee agrees that both while employed by the Company and following termination of
Employee’s employment with the Company at any time in the future:
(i) Employee will take all reasonable precautions to safeguard all Confidential Information at
all times so that it is not communicated to, exposed to, available to, or taken by any unauthorized
individual or entity;
(ii) Employee will not personally use or disclose such information; and
(iii) Employee will exercise Employee’s best efforts to assure the safekeeping of the Company’s
Confidential Information.
Upon termination of Employee’s employment with the Company, Employee agrees to immediately
return to the Company all Confidential Information and other Company property, including without
limitation all originals, copies, computer data, or other records or information. It is understood
and agreed that Confidential Information and other property of the Company shall remain at all
times the property of the Company.
7. Non-Competition Agreement. Recognizing the fact that Employee will be given or
have access to the Confidential Information described in Section 6 above, and that the employee
owes a duty of full loyalty to the Company and its name, reputation and operational interests,
Employee agrees that during the period of Employee’s employment with the Company, Employee will not
engage in or have an interest in, either directly or indirectly, in any manner,
whether as a partner, owner, investor, officer, director, advisor, employee, consultant, or in any
other capacity, any Competitive Business.
Employee further agrees that in the event that Employee’s employment with the Company is
terminated for any reason by either party, for a period of one (1) year from the date of
termination of employment, Employee will not seek, accept, or engage in any employment or work of a
similar or related nature to the work Employee performed for the Company where the employment or
work will be with a Competitive Business which is located or operates within fifty (50) miles of:
(i) any one of the Company or its affiliates’ facilities or a location where the Company or
one of its affiliates has provided services during the term of Employee’s employment with the
Company, or
(ii) any location where the Company was actively developing a facility or service before the
termination of Employee’s employment with the Company.
For purposes of this section, “Competitive Business” shall be defined as a hospital or any
other health care employer, facility, or service providing primarily cardiology related facilities
or services.
8. Non-Solicitation Agreement. Employee acknowledges and agrees that during the
course of Employee’s employment with the Company, Employee will become familiar with many of the
Company’s employees, their knowledge, skills, abilities, compensation, benefits, and other matters
with respect to such employees not generally known to the public. Employee further acknowledges
and agrees that any solicitation, luring away, inducement to have any third party or individual
cease or modify its relationship with the Company, or hiring of the employees of the Company, or
other direct or indirect participation in such activities, would be highly detrimental to the
business of the Company and would cause the Company great and irreparable harm. Consequently,
Employee agrees that for a period of one (1) year following the end of Employee’s employment with
the Company, Employee will not, directly or indirectly, solicit, lure, or hire any employees of the
Company, or induce any third party or individual to cease or modify its relationship with the
Company, or assist or aid in any such activity.
9. Enforcement. In the event that there is a breach of this Agreement by either
party, it is understood and agreed that the other party can seek damages and other remedies
available to it at law or in equity. In addition to those remedies, however, in the event that
Employee breaches Section 6, Section 7 or Section 8 of this Agreement, or in the event that there
is a threat of such a breach of either of those sections, the Company shall have the right to seek
and shall be entitled to injunctive relief and attorney’s fees and court costs. The parties
desire and intend that the provisions of Sections 6, 7, and 8 be enforced to the fullest extent
permissible under the law. Employee’s right to receive the payments and benefits after termination
of employment, as set forth in Section 5, is conditioned on Employee’s complying with the
provisions of Sections 6, 7 and 8. Failure to comply will result in the forfeiture of any rights
Employee may have to such benefits.
In the event that any provision of Section 6, Section 7 or Section 8 of this Agreement is
found by any applicable authority to be invalid or unenforceable, the parties agree that either
(i) the court shall at the time the provision is declared invalid or unenforceable, if
permissible by law, modify the invalid or unenforceable provision to reflect, in a lawful manner,
the objectives of the parties in entering into these agreements in Sections 6, Section 7 and
Section 8 or, in the alternative,
(ii) the parties or their representatives shall meet within one (1) week of the applicable
decision and shall agree to modify that provision which was found to be invalid or unenforceable in
order to allow the Company to obtain the objectives, to the extent allowed by law, of the
provisions found to be invalid or unenforceable. Should Employee fail or refuse to meet within the
one (1) week period, or should no agreement be reached by the parties during the meeting, Employee
agrees that the Company may unilaterally modify the provision(s) declared to be invalid or
unenforceable to comply with the law, provided that the Company notifies Employee of the change in
the language of the Agreement within three (3) weeks of the decision of the Court and pays to
Employee the sum of One Hundred Dollars ($100.00). In no event may language unilaterally selected
by the Company expand the scope of the Confidentiality, the Non-Competition, or the
Non-Solicitation Agreement beyond that originally agreed upon.
10. Notices. Any written notice required or permitted to be given under this
Agreement shall be given to the Company by hand-delivering said notice directly to Employee’s
supervisor or by mailing by registered mail or by other reasonable means of delivery providing
overnight service, such notice to the Company at the following address:
Mr. Xxxxx Xxxxxxx
Vice President Human Resources
MedCath Incorporated
00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Vice President Human Resources
MedCath Incorporated
00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Notice to Employee may be given by hand-delivering said notice or by mailing such notice to
the last address Employee provided the Company in writing. Notice shall be deemed to have been
given one day after depositing said notice with the postal service or other delivery service or, if
hand-delivered, when received by the addressee.
11. 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.
12. 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.
Without limiting any other rights of Company hereunder, Employee acknowledges that if upon written
notice to Employee, Company assigns this Agreement and its rights hereunder to an affiliate of the
Company which, directly or indirectly, owns an interest in and/or is involved in managing the
hospital at which Employee provides his fulltime services, then such assignee shall be entitled to
the benefit of, and to enforce, all of the Company’s rights under this
Agreement, and further, in such event the reference to Company in Sections 6, 7, 8, and 9
shall continue to mean MedCath Incorporated, the affiliate to which this Agreement has then been
assigned and all other affiliates and business operations of MedCath Incorporated. As a personal
service contract the rights and obligations of Employee under this agreement may not be assigned by
him/her.
13. Entire Agreement. This Agreement sets forth the entire understanding between the
parties with respect to the subject matter hereof and cannot be amended orally, but may only be
amended by a writing signed by Employee and either the individual executing the Agreement on behalf
of the Company or an individual in a higher position with the Company. This Agreement sets forth
the entire agreement between the Company and Employee regarding the matters herein and fully
supersedes any prior agreements or understandings between the Company and Employee regarding the
matters herein.
14. Severability. Should any provision of this Agreement be declared illegal or
unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, such
provision shall immediately become null and void, leaving the remainder of this Agreement in full
force and effect.
15. 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.
16. 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 facsimiles executions or a combination, shall be construed together and
shall constitute one and the same agreement.
17. It is understood and agreed that Employee will not disclose or release the existence or
the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto execute this Agreement.
| COMPANY: MEDCATH INCORPORATED | ||||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Title: | CFO | |||
| Date: | August 7, 2003 | |||
| EMPLOYEE: | /s/ Xxxxx X. Xxxxxx | |||
| Xxxxx X. Xxxxxx | ||||
| Date: | August 7, 2003 | |||
