Exhibit 10m
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of the 1st
day of January, 2002, (the "Commencement Date") by and between Atrion
Corporation, a Delaware corporation (the "Company"), and Xxxxx X. Xxxxxx (the
"Executive").
W I T N E S S E T H:
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WHEREAS, the Executive currently is employed by the Company as the Chairman of
the Board of Directors of the Company (the "Board") and as its President and
Chief Executive Officer;
WHEREAS, the Company and the Executive desire to continue the Executive's
employment by the Company upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, the mutual provisions
contained herein, and for other good and valuable consideration, the parties
hereto agree as follows:
1. EMPLOYMENT.
(a) Continuation of Employment. The Company hereby agrees to continue to
employ the Executive and the Executive hereby accepts continued employment as
the Company's Chairman of the Board ("Chairman") and President and Chief
Executive Officer on the terms and conditions hereinafter set forth. The
Executive shall perform such duties, and have such powers, authority, functions,
and responsibilities (commensurate with his position and title), as may be
reasonably assigned to him from time to time by the Board which are not (except
with the Executive's prior written consent) inconsistent with and which do not
interfere with or detract from those vested in or being performed by the
Executive for the Company.
(b) Duties. During the Employment Term (as defined below), the Executive
shall devote such time and effort as is reasonably necessary to perform his
duties and responsibilities as Chairman and President and Chief Executive
Officer of the Company; provided, however that the Executive shall be allowed,
to the extent that such activities do not materially interfere with the
performance of his duties and responsibilities hereunder, to manage his personal
financial affairs and to serve on corporate, civic, not-for-profit, charitable
industry boards and advisory committees.
2. TERM. The initial term of the Executive's employment under this Agreement
shall be for period of five (5) years from the Commencement Date (the "Initial
Term"). The term of the Executive's employment under this Agreement shall be
automatically renewed for additional one (1) year terms (each referred to as an
"Additional Term") at the end of the Initial Term
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and at the end of each Additional Term, as the case may be, unless either party
delivers written notice of termination to the other at least thirty (30) days
prior to the end of the Initial Term or Additional Term, as the case may be. The
Initial Term and the Additional Terms shall be referred to herein as the
"Employment Term."
3. COMPENSATION. The Company shall pay the Executive the following, subject to
withholding and other applicable employment taxes:
(c) Base Salary and Bonuses. The Company shall pay the Executive a base
salary (the "Base Salary") of Five Hundred Thousand and no/100 Dollars
($500,000.00) for calendar year 2002, and for each calendar year in the
Employment Term after 2002 the Base Salary shall be increased by twelve percent
(12%) over the Base Salary for the preceding calendar year.
In addition to the Base Salary, the Company shall pay the Executive a cash
bonus (the "Annual Bonus") for each calendar year in the Employment Term in such
amount as the Board may determine but in no event less than, or in the event the
Board makes no such determination in an amount equal to, fifty percent (50%) of
the Base Salary for such calendar year.
The Base Salary shall be payable in intervals consistent with the Company's
normal payroll schedules (but in no event less frequently than monthly). The
Base Salary, as in effect from time to time, may be increased but not reduced
without the written consent of the Executive. The Annual Bonus for each calendar
year in the Employment Term shall be payable during the January immediately
following the end of such calendar year.
In addition to the Base Salary and the Annual Bonus, the Company shall pay
the Executive such other incentive compensation as the Company may from time to
time determine.
(d) Benefits and Expenses. The Executive shall have the right to
participate in the employee benefit plans, insurance contracts, policies,
arrangements or agreements maintained by the Company for the benefit of its
employees and relating to retirement, health, disability and other employee
benefits, subject to the Executive's qualification for participation in such
benefit plans pursuant to the terms and conditions under which such benefit
plans are offered, at a level commensurate with the Executive's position. The
Executive's rights and entitlements with respect to any such benefits shall be
subject to the provisions of the relevant agreements, contracts, policies,
arrangements or plans providing such benefits. Nothing contained herein shall be
deemed to impose any obligation on the Company to adopt or maintain any such
plans, policies, arrangements, contracts or agreements. In accordance with its
policies and procedures, the Company shall pay or reimburse the Executive for
all reasonable or necessary travel and other out-of-pocket expenses incurred by
the Executive in performing his obligations under this Agreement. The Executive
shall comply with all such policies and procedures applicable to the Company's
senior executive employees relating to the nature and extent of reimbursable
expenses, the manner of accounting therefor and the manner or reimbursement of
same. The Company shall also furnish the Executive with such office and clerical
assistance as shall be suitable to the character of the Executive's position
with the Company and adequate for the performance of his duties hereunder.
(e) Vacation and Holidays. The Executive shall be entitled to such vacation
with
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pay during each fiscal year of the Company as determined by the Company, but in
no event less than four (4) weeks per year, such vacation to be taken at such
time or times as shall be approved by the Company, which approval shall not be
unreasonably withheld. In addition, the Executive shall be entitled to such
holidays with pay as the Company makes available to its other senior executive
employees. Unless otherwise agreed between the parties, unused days of vacation
and unused holidays may not be carried over from one fiscal year of the Company
to another.
4. TERMINATION.
(f) Termination by the Company. The Company may terminate the employment of
the Executive prior to the expiration of the Employment Term (i) for "just
cause" (as defined below) by delivering written notice of termination to the
Executive or (ii) without "just cause" upon thirty (30) days written notice of
termination to the Executive.
(g) Termination by Executive. The Executive may terminate his employment
under this Agreement prior to the expiration of Employment Term (i) for "good
reason" (as defined below) by written notice to the Company or (ii) without
"good reason" by giving the Company thirty (30) days written notice of his
intention to terminate such employment.
(h) Termination Upon Death or Disability. The Executive's employment shall
terminate immediately upon his death. In the event that the Executive becomes
subject to a Disability (as defined below), the Executive's employment may be
terminated upon thirty (30) days written notice by either party to the other.
(i) Definitions. For purposes of this Agreement, the following terms shall
have the respective meanings indicated below:
(i) Just Cause. The term "just cause" shall mean (A) the Executive's
continuing willful failure to perform his material duties and obligations
under this Agreement (except by reason of his death or incapacity due to
his Disability) after written notice thereof by the Company to the
Executive, and the Executive's failure or refusal to perform such duties
and obligations within thirty (30) days after the receipt of such notice by
the Executive or (B) the conviction of, or the entering of a plea of nolo
contendere by, the Executive with respect to a felony (other than as a
result of a traffic violation or as a result of vicarious liability),
provided that on or after a Change in Control (as defined in Exhibit A
hereto), "just cause" shall be limited to only subsection (B) above. For
purposes of this Section 4(d)(i), no act, or failure to act, on Executive's
part shall be considered "willful" unless done, or omitted to be done, by
him not in good faith and without reasonable belief that his action or
omission was in the best interests of the Company. The Company must assert
a "just cause" termination event no later than ninety (90) days after
discovery of such event.
The date of termination for a termination for "just cause" shall be
the date indicated in the Notice of Termination (as defined herein). A
"Notice of Termination" for "just cause" shall mean a notice that shall
indicate the specific termination provision in Section 4(d)(i) relied upon
and shall set forth in reasonable detail the facts and circumstances which
provide for a basis for termination for "just cause." Further, a Notice for
Termination for "just cause" shall be required to include a copy of a
resolution duly adopted by at least two-thirds (2/3) of the entire
membership of the
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Board at a meeting of the Board which was called for the purpose of
considering such termination and which Executive and his representative had
the right to attend and address the Board, finding that, in the good faith
of the Board, Executive engaged in conduct set forth in the definition of
"just cause" herein and specifying the particulars thereof in reasonable
detail. Any purported termination for "just cause" which is held by an
arbitrator not to have been based on the grounds set forth in this
Agreement or not to have followed the procedures set forth in this
Agreement shall be deemed a termination by the Company without "just
cause."
(ii) Good Reason. The term "good reason" shall mean any one or more of
the following:
(A) Without the Executive's express written consent, any
diminution in the Executive's titles, authorities, responsibilities or
the assignment of the Executive to any duties inconsistent with his
position, duties, responsibilities and status with the Company as its
Chairman, President and Chief Executive Officer or the removal by the
Board, or the failure or refusal of the Board to re-elect, the
Executive as the Chairman, President and Chief Executive Officer of
the Company at any time during the term of this Agreement. For
purposes hereof, a "diminution in the Executive's titles, authorities
or responsibilities" shall be deemed to have occurred if the Company
is no longer required to file reports pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended.
(B) The Company's breach of any provision of this Agreement or
any other agreement between the Company and the Executive and failure,
within the ten (10) day period following its receipt of written notice
from the Executive describing such breach in reasonable detail, to
promptly commence in good faith to cure such breach (if curable);
provided that such cure must be effected no later than thirty (30)
days following such notice and provided further that such cure right
shall not be available on more than one occasion in any twelve (12)
month period.
(C) Adoption by a majority of the Board of any resolution or
series of related resolutions that, individually or collectively, has
or could reasonably be expected to have a material effect on the
strategic direction, operations, financial condition or results of
operations of the Company and that is voted against by the Executive
in a good faith exercise of his fiduciary duty or the failure or
refusal of a majority of the Board to adopt a proposed resolution or
series of related resolutions that, individually or collectively, has
or could reasonably have been expected to have a material effect on
the strategic direction, operations, financial condition or results of
operations of the Company and that the Executive proposed, by a motion
or series of motions (whether or not seconded), be adopted by the
Board in a good faith exercise of his fiduciary duty.
(D) Failure of the Company to obtain the assumption in writing (a
copy of which is delivered to the Executive) of the Company's
obligations hereunder to the Executive by any successor to the Company
prior to or at the time of a merger, acquisition, consolidation,
disposition of substantially all of the
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assets of the Company or similar transaction.
The Executive must assert a "good reason" termination event no later than
ninety (90) days after the Executive discovers such event.
(iii) Disability. The Executive shall be considered to be subject
to a "Disability" if, as a result of physical or mental sickness or
incapacity or accident, the Executive is unable to perform the normal
duties of his employment with the Company for a period of ninety (90)
days in any one hundred twenty (120) day period. If there is any
disagreement between the Company and the Executive as to whether the
Executive was unable to perform the normal duties of his employment
due to Disability, the same shall be determined after examination of
the Executive by a physician selected by the Executive (or, if the
Executive is unable to make such selection, it shall be made by the
Executive's spouse or, if the Executive is not married or if his
spouse is unable or unwilling to make the selection, by any other
adult member of the Executive's immediate family) and approved by the
Company. The costs and expenses of such examination shall be borne by
the Company. The determination of such physician shall be conclusive
evidence as to whether the Executive was unable to perform the normal
duties of his employment due to Disability. If the Executive does not
permit such examination by such physician, then, for purposes hereof,
the determination as to whether the Executive was unable to perform
the normal duties of his employment due to Disability shall be made by
the Board. Nothing herein shall have any effect upon the Executive's
eligibility to receive any disability benefits from the Company
pursuant to the terms and conditions of any disability plan or other
arrangement which the Company may have in effect from time to time.
(j) Termination Payment.
(i) Termination for Just Cause. In the event the Company
terminates the Executive's employment pursuant to Section 4(a)(i) of
this Agreement, the Company shall have no further obligation hereunder
except to pay the Executive any compensation earned but not yet paid,
including without limitation, the Base Salary and Annual Bonus for the
calendar year in which the date of termination falls, in each case
prorated for the number of days of the calendar year that elapsed
prior to the date of termination, any accrued vacation pay payable
pursuant to the Company's policies, and any unreimbursed business
expenses (collectively the "Accrued Amounts").
(ii) Termination Without Just Cause. In the event the Company
terminates Executive's employment pursuant to Section 4(a)(ii) of this
Agreement, the Executive's employment under this Agreement shall
terminate at the expiration of said thirty (30) day period, and the
Company shall have no further obligation hereunder except to pay to
the Executive a cash lump sum amount equal to the sum of:
(A) the Accrued Amounts; and
(B) the Executive's Base Salary and Annual Bonus for the
remainder of the Initial Term or Additional Term, as
applicable (collectively, the "Severance Payment");
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which sum shall be paid by the Company as soon as
practicable after the termination date, but in no event
later than ten (10) days after the termination of the
Executive's employment. Notwithstanding the foregoing, in
the event the Company terminates Executive's employment
pursuant to Section 4(a)(ii), the Company may, at its
option, require the Executive to cease providing services
hereunder and serving as an employee of the Company at any
time during said thirty (30) day period. In addition, all
stock options and/or equity granted to the Executive shall
fully vest and become exercisable upon the termination date.
The Company shall continue to provide the Executive (and his
spouse and dependents) with group health plan benefits (or
substantially similar substitute arrangements), at its sole
expense, for the remainder of the Initial Term or Additional
Term, as applicable (the "Medical Benefits").
(iii) Termination for Good Reason. In the event the Executive
terminates the Executive's employment pursuant to Section 4(b)(i) of
this Agreement, the Company shall have no further obligation hereunder
except to pay to the Executive a cash lump sum equal to the Accrued
Amounts and the Severance Payment, which shall be paid by the Company
as soon as practicable after the termination date, but in no event
later than ten (10) days after the termination of the Executive's
employment. In addition, all stock options and/or equity granted to
the Executive shall fully vest and become exercisable upon the
termination date. The Company shall also provide the Executive (and
his spouse and dependents) with the Medical Benefits for the remainder
of the Initial Term or Additional Term, as applicable.
(iv) Termination Without Good Reason. In the event the Executive
terminates the Executive's employment pursuant to Section 4(b)(ii) of
this Agreement, the Executive's employment under this Agreement shall
terminate at the expiration of said thirty (30) day period, and the
Company shall have no further obligation hereunder except to pay the
Executive a cash lump sum equal to the Accrued Amounts as soon as
practicable after the termination date, but in no event later than ten
(10) days after the termination of Executive's employment.
Notwithstanding the foregoing, in the event the Executive terminates
his employment pursuant to Section 4(b)(ii), the Company may, at its
option, require the Executive to cease providing services hereunder
and serving as an employee of the Company at any time during said
thirty (30) day period; provided that the Executive shall be entitled
to such payments as would have otherwise been due to him had he
continued in the employment of the Company for such thirty (30) day
period, including, without limitation, payments of the Accrued Amounts
and amounts to be paid under any other plan, agreement or policy which
survives the termination of this Agreement.
(v) Termination upon Death or Disability. In the event the
Executive's employment is terminated pursuant to Section 4(c) hereof,
the Company shall have no further obligation hereunder except to pay
to the Executive (or his personal representative or guardian) a cash
lump sum amount equal to the Accrued Amounts and the Severance
Payment, which shall be paid by the Company as soon as practicable
after the termination date, but in no event later than ten (10) days
after the termination of the Executive's employment. In addition, all
stock options and/or equity granted to the Executive shall fully vest
and become exercisable upon the termination date. The Company shall
also provide the Executive (and his spouse and dependents) with the
Medical Benefits for the remainder of the Initial Term or Additional
Term, as applicable.
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5. WITHHOLDING. The Company shall be entitled to withhold from amounts to be
paid to the Executive hereunder any federal, state, or local withholding or
other taxes or charges which it is from time to time required to withhold;
provided, that the amount so withheld shall not exceed the minimum amount
required to be withheld by law in light of the circumstances. The Company shall
be entitled to rely on an opinion of tax counsel if any question as to the
amount or requirement of any such withholding shall arise.
6. NOTICES. All notices provided for by this Agreement shall be in writing and
shall be (a) personally delivered to the party thereunto entitled or (b)
deposited in the United States mail, postage prepaid, addressed to the party to
be notified at the address listed below (or at such other address as may have
been designated by written notice), certified or registered mail, return receipt
requested. The notice shall be deemed to be received (a) if by personal
delivery, on the date of its actual receipt by the party entitled thereto or (b)
if by mail, two (2) days following the date of deposit in the United States
mail.
To the Company: Atrion Corporation
Xxx Xxxxxxxxx Xxxxxxx
Xxxxx, XX 00000
Attention: Chief Financial Officer
To Executive: Xxxxx X. Xxxxxx
To the most recent address
on file with the Company.
7. PARTIES BOUND. This Agreement and the rights and obligations hereunder
shall be binding upon and inure to the benefit of the Company, Executive, and
their respective heirs, personal representatives, successors and assigns;
provided, however, that Executive may not assign any rights or obligations
hereunder without the express written consent of Company. This Agreement shall
also bind and inure to the benefit of any successor of the Company by merger or
consolidation, or any assignee of all or substantially all of the Company's
properties.
8. INVALID PROVISIONS. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable; this Agreement shall
be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part hereof; and the remaining provisions hereof
shall remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance herefrom.
9. EXCISE TAX GROSS-UP.
(k) Payment of Excise Tax Amount. In the event any of the payments or
benefits provided to the Executive hereunder or under any other plan, agreement
or arrangement (the "Company Payments") will be subject to the tax (the "Excise
Tax") imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code") (or any similar tax that may be imposed by any taxing authority),
the Company shall pay to the Executive at the time specified below an additional
amount (the "Gross-up Payment") such that the net amount retained by the
Executive, after the deduction of any Excise Tax on the Company Payments and any
U.S. federal, state and local income or payroll tax on the Gross-Up Payment
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provided for herein but before deduction for any federal, state or local income
or payroll tax on the Company Payments, shall be equal to the Company Payments.
(l) Applicability of Excise Tax. For purposes of determining whether any of
the Company Payments and Gross-up Payments (collectively the "Total Payments")
will be subject to the Excise Tax and the amount of such Excise Tax, (x) the
Total Payments shall be treated as "parachute payments" within the meaning of
Section 280G(b)(2) of the Code, and all "parachute payments" in excess of the
"base amount" (as defined under Section 280G(b)(3) of the Code) shall be treated
as subject to the Excise Tax, to the extent that, in the opinion of a national
independent accounting firm designated by the Executive or tax counsel with a
nationally-recognized law firm selected by such accountants (the "Accountants"),
such Total Payments (in whole or in part) constitute "parachute payments," do
not represent reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4) of the Code in excess of the "base amount" or are
otherwise subject to the Excise Tax, and (y) the value of any non-cash benefits
or any deferred payment or benefit shall be determined by the Accountants in
accordance with the principles of Section 280G of the Code.
(m) Amount of Gross-Up Payment. For purposes of determining the amount of
the Gross-up Payment, the Executive shall be deemed to pay U.S. federal income
taxes at the highest marginal rate of U.S. federal income taxation in the
calendar year in which the Gross-up Payment is to be made and state and local
income taxes at the highest marginal rate of taxation in the state and locality
of the Executive's residence for the calendar year in which the Company Payment
is to be made, net of the maximum reduction in U.S. federal income taxes which
could be obtained from deduction of such state and local taxes if paid in such
year. In the event that the Excise Tax is subsequently determined by the
Accountants to be less than the amount taken into account hereunder at the time
the Gross-up Payment is made, the Executive shall repay to the Company, at the
time that the amount of such reduction in Excise Tax is finally determined, the
portion of the prior Gross-up Payment attributable to such reduction (plus the
portion of the Gross-up Payment attributable to the Excise Tax and U.S. federal,
state and local income tax imposed on the portion of the Gross-up Payment being
repaid by the Executive if such repayment results in a reduction in Excise Tax
or a U.S. federal, state and local income tax deduction), plus interest on the
amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the
Code. Notwithstanding the foregoing, in the event any portion of the Gross-up
Payment to be refunded to the Company has been paid to any U.S. federal, state
and local tax authority, repayment thereof (and related amounts) shall not be
required until actual refund or credit of such portion has been made to the
Executive, and interest payable to the Company shall not exceed the interest
received or credited to the Executive by such tax authority for the period it
held such portion. The Executive and the Company shall mutually agree upon the
course of action to be pursued (and the method of allocating the expense
thereof) if the Executive's claim for refund or credit is denied.
In the event that the Excise Tax is later determined by the Accountants or
the Internal Revenue Service to exceed the amount taken into account hereunder
at the time the Gross-up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-up
Payment), the Company shall make an additional Gross-up Payment in respect of
such excess (plus any interest or penalties payable with respect to such excess)
at the time that the amount of such excess is finally determined.
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(n) Time of Payment. The Gross-up Payment or portion thereof provided for
in subsection (c) above shall be paid not later than the thirtieth (30th) day
following an event occurring which subjects the Executive to the Excise Tax;
provided, however, that if the amount of such Gross-up Payment or portion
thereof cannot be finally determined on or before such day, the Company shall
pay to the Executive on such day an estimate, as determined in good faith by the
Accountants, of the minimum amount of such payments and shall pay the remainder
of such payments (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code), subject to further payments pursuant to subsection
(c) hereof, as soon as the amount thereof can reasonably be determined, but in
no event later than the ninetieth day after the occurrence of the event
subjecting the Executive to the Excise Tax. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to the Executive, payable on
the fifth day after demand by the Company (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code).
(o) Procedures. In the event of any controversy with the Internal Revenue
Service (or other taxing authority) with regard to the Excise Tax, the Executive
shall permit the Company to control issues related to the Excise Tax (at its
expense), provided that such issues do not potentially materially adversely
affect the Executive, but the Executive shall control any other issues. In the
event the issues are interrelated, the Executive and the Company shall in good
faith cooperate so as not to jeopardize resolution of either issue, but if the
parties cannot agree the Executive shall make the final determination with
regard to the issues. In the event of any conference with any taxing authority
as to the Excise Tax or associated income taxes, the Executive shall permit the
representative of the Company to accompany the Employee, and the Executive and
the Executive's representative shall cooperate with the Company and its
representative.
(p) Costs. The Company shall be responsible for all charges of the
Accountant.
(q) Notices. The Company and the Executive shall promptly deliver to each
other copies of any written communications, and summaries of any verbal
communications, with any taxing authority regarding the Excise Tax.
10. NO MITIGATION; NO SET-OFF.
(a) No Duty to Mitigate. In the event of any termination of employment
hereunder, Executive shall be under no obligation to seek other employment and
there shall be no offset against any amounts due Executive under this Agreement
on account of any remuneration attributable to any subsequent employment that
Executive may obtain.
(b) Other Payments. Any amounts or benefits payable to the Executive under
this Agreement are, in addition to, and are not in lieu of, amounts payable to
the Executive under any other salary continuation or cash severance arrangement
of the Company or any other type of agreement entered into between the parties,
and to the extent paid or provided under any other such arrangement or agreement
shall not be offset from the amounts or benefits due hereunder, except to the
extent expressly provided in such other arrangement or agreement.
11. ATTORNEYS' FEES AND COSTS. In the event that it becomes necessary for the
Executive to seek legal counsel with regard to a dispute , claim or issue under
this Agreement
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or the Executive deems it necessary to initiate arbitration in order to enforce
his rights hereunder, then the Company shall bear and, upon notification to the
Company by the Executive, immediately advance to the Executive all expenses of
such dispute, claim, issue or arbitration, including the reasonable fees and
expenses of the counsel of the Executive incurred in connection with such
dispute, claim, issue or arbitration, unless an arbitrator determines that the
Executive's position was frivolous or otherwise taken in bad faith, in which
case an arbitrator may determine that Executive shall bear his own legal fees.
Notwithstanding any existing or prior attorney-client relationship between the
Company and the counsel selected by the Executive, the Company irrevocably
consents to the Executive's entering into an attorney-client relationship with
such counsel, and in that connection the Company and the Executive agree that a
confidential relationship shall exist between the Executive and such counsel.
12. ARBITRATION. All disputes and controversies arising under or in connection
with this Agreement, shall be settled by arbitration conducted before one (1)
arbitrator sitting in New York, New York, or such other location agreed by the
parties hereto, in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association then in effect. The
determination of the arbitrator shall be final and binding on the parties.
Judgment may be entered on the award of the arbitrator in any court having
proper jurisdiction. All expenses of such arbitration, including the fees and
expenses of the counsel of the Executive, shall be borne by the Company unless
the arbitrator determines that Executive's position was frivolous or otherwise
taken in bad faith, in which case the arbitrator may determine that Executive
shall bear his own legal fees.
13. LEGAL FEES. The Company shall pay the Executive's reasonable legal fees and
costs associated with entering into this Agreement.
14. INDEMNIFICATION. The Company shall indemnify and hold harmless Executive to
the fullest extent permitted under the Company's Bylaws as in effect on the
Commencement Date or the date of termination of employment, if on such date the
Bylaws provide the Executive with greater rights to indemnification, and to the
fullest extent permitted by law for any action or inaction of Executive while
serving as an officer or director of the Company or, at the Company's request,
as an officer or director of any other entity or as a fiduciary of any benefit
plan. The Company shall cover the Executive under directors and officers
liability insurance both during and, while potential liability exists, after the
Employment Term (but in no event for a period which is less than six (6) years
after termination) in the same amount and to the same extent as the Company
covers its other officers and directors as of the Commencement Date or the date
of termination of employment, if on such date the Executive will receive greater
coverage under such insurance.
15. WAIVERS AND CONSENTS. One or more waivers of any breach of any covenant,
term or provision of this Agreement by any party shall not be construed as a
waiver of a subsequent breach of the same covenant, term or provision, nor shall
it be considered a waiver of any other then existing or subsequent breach of a
different covenant, term or provision. The consent or approval of either party
to or of any act by the other party requiring such consent or approval shall not
be deemed to waive or render unnecessary consent to or approval or any
subsequent similar act. No custom or practice of the parties shall constitute a
waiver of either party's rights to insist upon strict compliance with the terms
hereof.
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16. SECTION HEADINGS. The headings contained in this Agreement are for
reference purposes only and do not affect in any way the meaning or
interpretation of this Agreement.
17. MULTIPLE COUNTERPARTS. This Agreement may be executed in counterparts, each
of which for all purposes is to be deemed an original, and both of which
constitute, collectively, one agreement; but in making proof of this Agreement,
it shall not be necessary to produce or account for more than one such
counterpart.
18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to its
conflict-of-law rules.
19. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties hereto, and supersedes all prior agreements and understandings, oral or
written, if any, between the parties hereto, with respect to the subject matter
hereof. No modification or amendment of any of the terms, conditions, or
provisions herein may be made otherwise than by written agreement signed by the
parties hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
ATRION CORPORATION
By:/s/ Xxxxxxx Xxxxxxxxxx
--------------------------------------------
Vice President and Chief Financial Officer,
Secretary and Treasurer
/s/ Xxxxx X. Xxxxxx
-----------------------------------------------
XXXXX X. XXXXXX
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Exhibit A
(a) For purposes of the Agreement, the term "Change in Control" shall mean the
occurrence of any one of the following events:
(i) any person (as the term "person" is used in Section 13(d) (3) or
Section 14(d) (2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (other than the Company, any of its subsidiaries, or any
trustee or other fiduciary holding securities of the Company under an employee
benefit plan of the Company or any of its subsidiaries) becomes the beneficial
owner (as the term "beneficial owner" is defined under Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange Act) of securities
of the Company representing 25% or more of the combined voting power of the
then-outstanding voting securities of the Company
(ii) the Company is merged, consolidated or reorganized into or with
another corporation or other person and as a result of such merger,
consolidation or reorganization less than 75% of the combined voting power of
the then-outstanding securities of such corporation or person immediately after
such transaction are held in the aggregate by the holders of voting securities
of the Company immediately prior to such transaction;
(iii) the stockholders of the Company approve a plan of complete
liquidation of the Company or the Company sells all or substantially all of its
assets to any other corporation or other person and as a result of such sale
less than 75% of the combined voting power of the then-outstanding voting
securities of such corporation or person immediately after such transaction are
held in the aggregate by the holders of voting securities of the Company
immediately prior to such sale; or
(iv) during any period of two consecutive years, individuals who, at
the beginning of any such period, constitute the directors of the Company cease
for any reason to constitute at least a majority thereof unless the election or
the nomination for election by the Company's stockholders of each director of
the Company first elected during such period was approved by a vote of at least
two-thirds of the directors of the Company then still in office who were
directors of the Company at the beginning of any such period.
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