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Exhibit 10.54
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), dated March 1, 1998 (the "Effective
Date"), is made and entered into by and between RAYTEL MEDICAL CORPORATION, a
Delaware corporation (the "Company"), and F. Xxxxx Xxxxx (the "Employee").
RECITALS
A. The Company desires to continue the employment of the Employee as
its Senior Vice President and Executive Medical Director and its subsidiary
corporations, affiliated medical groups and joint venture interests in various
imaging centers, heart programs and diagnostic cardiac catheterization
laboratories, and the Employee desires to accept such continued employment. The
employment of the Employee by the Company pursuant to this Agreement is
hereinafter sometimes referred to as the "Employment"; and
B. The Company and the Employee hereby enter into this Agreement
setting forth each and all of the terms and conditions of the Employment.
NOW THEREFORE, in consideration of the premises and the agreements,
representations and warranties, contained in this Agreement, the Company and the
Employee hereby agree as follows:
1. Duties Term and Exclusive Employment.
1.1 Duties and Responsibilities. Within the limitations
established by the Company's Bylaws, the Employee shall have each and all of the
duties and responsibilities of the Company's Senior Vice President and Executive
Medical Director. As such, the Employee shall have responsibility and authority
with respect to the operations of the Company's contract research organization,
clinical aspects of the heart centers and physician practice management
services, subject to the direction of the Company's Chief Executive Officer.
1.2 Term of Employment. The Employment hereunder shall begin
on the Effective Date and, unless earlier terminated as provided in Paragraph 3
hereof, the Employment shall continue until midnight on the first anniversary of
the Effective Date. The Employment shall be extended automatically for
additional one (1) year terms upon each anniversary of the Effective Date,
beginning on March 1, 1999, unless either party gives written notice to the
other at least thirty (30) days prior to the expiration of the initial term (or,
if applicable, any extended term) of his or its election not to extend the
Employment for the subsequent term.
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1.3 No Other Employment or Business Activities. During the
term of the Employment, the Employee shall diligently and conscientiously devote
all of his working time and attention to discharging his duties to the Company
and shall not, without the express prior written consent of the Board of
Directors of the Company, render to any other person, corporation, partnership,
firm, company, joint venture or other entity any services of any kind for
compensation or engage in any other activity that would in any manner whatsoever
interfere with the performance of the Employee's duties on behalf of the
Company. The foregoing notwithstanding, nothing herein shall prevent the
Employee from engaging in charitable activities or activities of professional
associations, from managing any personal investments on his own personal time,
provided that such investments are not otherwise competitive with the Company.
1.4 Proprietary Information and Inventions Agreement. The
Employee acknowledges his obligations under the Employment Agreement Regarding
Proprietary Information and Inventions of even date herewith, attached hereto as
Appendix A (the "Proprietary Information and Inventions Agreement"), and agrees
to be bound by the provisions thereof.
1.5 Indemnity Agreement. The parties acknowledge their
respective obligations under the Indemnity Agreement of even date herewith,
attached hereto as Appendix B (the "Indemnity Agreement"), and agree to be bound
by the provisions thereof.
2. Compensation. In full and complete consideration for the Employment
and each and all of the services to be rendered to the Company, and any
subsidiary of affiliate of the Company, by the Employee, the Employee shall
receive compensation as follows, except as otherwise provided in Paragraph 3
hereof:
2.1 Base Salary. The Employee shall receive from the Company a
base salary, at the initial rate of Two Hundred Fifty Thousand Dollars
($250,000) per year, payable in periodic installments in accordance with the
Company's payroll policy as in effect from time to time. The base salary will be
reviewed at least annually during the continuation of the Employment and may be
increased (but not decreased) by the Company in the sole discretion of the Chief
Executive Officer based upon such factors as the Chief Executive Officer deems
relevant, including the clinical programs of the heart centers and physician
practice management services. From each salary payment the Company will withhold
any pay to the proper governmental authorities any and all amounts required by
law to be withheld for federal income tax, state income tax, federal social
security tax, state disability insurance premiums, and any and all other amounts
required by law to be withheld from the Employee's salary. The Company will also
deduct from the Employee's salary payments those sums, if any, authorized by the
Employee in writing and approved by the Company. The Company will make payments
and contribution, such as unemployment insurance premiums, workers' compensation
insurance premiums and the employer's portion of federal social security tax,
which are
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required by law to be made by the Company for the Employee's benefit without any
deduction from the Employee's salary payments.
2.2 Bonus Awards. The Employee will be eligible for
consideration for incentive compensation ("Bonus Awards"), although no Bonus
Awards are required to be paid hereunder. All Bonus Awards shall be determined
by the Company's Chief Executive Officer in its sole discretion for such fiscal
periods as it shall determine and based upon such factors as it deems relevant.
Each Bonus award will be deemed to be earned at the end of the applicable fiscal
period and will be paid to the Employee within ninety (90) days following the
end of the fiscal period for which such award is made; provided, however, that
if, prior to the end of any such fiscal period, (i) the Employment is terminated
as a result of the Employee's death or disability; (ii) the Company terminated
the Employment other than For Cause pursuant to Paragraph 3.2 hereof; (iii) the
Employment is terminated by the Company giving notice pursuant to Paragraph 1.2
hereof; or (iv) the Employee terminates the Employment for Good Reason pursuant
to Paragraph 3.4 hereof, in each case, the Employee shall be entitled to receive
a prorated Bonus Award determined by multiplying the amount of the Bonus Award,
if any, that the Employee would have received had the Employee been employed for
the full fiscal period by a fraction, the numerator of which is the number of
full months of Employment completed during the fiscal period and the denominator
of which is the number of months in the fiscal period. Any such prorated bonus
award will be paid to the Employee within ninety (90) days following the end of
the fiscal period for which such award in made.
2.3 Deferred Compensation Plan. The Employee shall be entitled
to participate in the Company's Deferred Compensation Plan so long as it is
available generally to senior executives of the Company, and in any successor
plan which may be adopted and in effect from time to time during the Employment.
2.4 Stock Options. The Employee is presently the holder of
stock options granted under the Company's 1990 Stock Option Plan, which options
are subject to separate written Option Agreements. No such Option Agreement
constitutes an agreement of employment, and no provision of any such Option
Agreement shall operate to extend the term of the Employment hereunder. During
the Employment, the Employee will be eligible for the grant of additional
options at the sole discretion of the Company's Board of Directors based upon
such factors as it deems relevant.
2.5 Vacation. The Employee shall be entitled to paid vacation
in accordance with the Company's vacation policy for senior executives, as in
effect from time to time.
2.6 Automobile Allowance. The Employee shall be entitled to
the payment of a monthly allowance for automobile expenses throughout the term
of the Employment, in the same amount and in accordance with the arrangements
currently in
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effect, or to such alternate automobile allowance of comparable economic value
as may be in effect from time to time.
2.7 Insurance and Other Benefits. The Employee shall be
entitled to participate in any life, medical, dental and/or disability insurance
plans, together with nay supplemental insurance plans, as my be offered by the
Company to its executive employees from time to time during the Employment. The
Employee shall be eligible to participate in any other fringe benefits as may be
provided by the Company to its executives, generally, during the Employment.
3. Termination of Employment. The Employment may be terminated prior to
the end of the term specified in Paragraph 1.2 hereof upon the occurrence of any
of the following:
3.1 Death and Disability. The Employment shall automatically
terminate upon the death of the Employee. The Company shall have the right, but
not the obligation, to terminate the Employment at any time following
determination of the Employee's total disability (as defined pursuant to the
Company's long-term disability insurance plan covering the Employee if any such
plan is then in effect, or otherwise as determined by the Company's Board of
Directors). In the event of the Employee's total disability, the Employee's base
salary pursuant to Paragraph 2.1 hereof, shall be continued for the lesser of:
(i) the duration of the Employee's total disability, or (ii) the waiting period
determined in the Company's long-term disability policy then in effect or (iii)
one (1) year if no such policy is then in effect. In the event of the Employee's
death or total disability, the Employee or his estate shall be entitled to
receive: (A) the Employee's base salary through the date of termination of the
Employment (as extended, in the case of total disability), plus, (B) any Bonus
Award earned by the Employee as of the date of termination of the Employment
pursuant to Paragraph 2.2 hereof but not yet paid, plus, (C) any other benefits
to which the Employee is entitled pursuant to the plans described in Paragraphs
2.3 and 2.7 hereof. In the event of a partial disability that prevents the
Employee from effectively performing his duties and responsibilities hereunder,
the parties will attempt, in good faith, to negotiate a basis upon which the
Employee may continue as an employee of the Company in a reduced capacity and at
appropriately reduced compensation. If no such arrangement is agreed upon, the
Company may elect to treat the Employee's disability as a total disability for
purposes of this Paragraph 3.1.
3.2 Termination of Employment by the Company "For Cause". The
Company shall have the unrestricted right, but not the obligation, to terminate
the Employment at any time "For Cause" in the event of the Employee's: (i)
willful and repeated neglect of his duties hereunder (other than as a result of
a physical disability not related to substance abuse), (ii) conviction of a
crime involving moral turpitude, (iii) commission of any act of fraud or
dishonesty against the Company, or (iv) breach of the Employee's obligations
hereunder or under the Proprietary Information and Inventions Agreement which,
if curable, is not cured within ten (10) days following
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notice thereof by the Company. The decisions to terminate the Employment For
Cause, to take other action or to take no action in response to such occurrence
shall be in the sole and exclusive discretion of the Company. Upon any
termination of the Employment by the Company For Cause, the Employee shall be
entitled to receive: (A) the Employee's base salary through the date of such
termination, plus (B) any bonus Award earned by the Employee as of the date of
termination of the Employment pursuant to Paragraph 2.2 hereof but not yet paid,
plus any other benefits to which the Employee is entitled pursuant to the plans
described in Paragraphs 2.3 and 2.7 hereof.
3.3 Other Termination of Employment by the Company. The
Company may terminate the Employment hereunder at any time for any reason.
However, if the Employment is terminated by the Company for any reason other
than pursuant to Paragraphs 3.1 or 3.2 hereof (including a termination pursuant
to notice given under Section 1.2 hereof), the Employee shall be entitled to
receive his base salary through the date of termination of the Employment, plus
an amount (the "Severance Payment") equal to his then current base salary for a
period of twelve (12) months following the date of termination (the "Severance
Period"). The Severance Payment shall be paid in periodic installments during
the Severance Period, in accordance with the Company's payroll policy as in
effect from time to time, and shall be in lieu of any other severance pay or
other benefit to which the Employee might otherwise be entitled. In addition, in
the event of such a termination, the Company will, to the extent its plans
permit, continue to provide to the Employee coverage under its life, medical,
dental and/or disability plans, as in effect on the date of termination, during
the Severance Period. In the event that the Company may not continue to provide
the benefit of any such plans, the Severance Payment shall be increased by an
amount equal to the Employee's cost of providing such discontinued coverage for
himself and his dependents during the Severance Period, assuming, where
applicable, the timely compliance by the Employee with any notification
procedure required in order to obtain continuation coverage at group rates. The
Employee shall also be entitled, upon any such termination, to receive: (A) any
Bonus Award earned by the Employee as of the date of termination of the
Employment pursuant to Paragraph 2.2 hereof but not yet paid, plus, (B) any
other benefits to which the Employee is entitled pursuant to the plans described
in paragraphs 2.3 and 2.7 hereof.
3.4 Termination of Employment by the Employee for "Good
Reason". The Employee shall have the right to terminate the Employment at any
time for "Good Reason" in the event that, other than pursuant to Paragraphs 3.1
or 3.2 hereof, the Company, without the Employee's prior written consent, (i)
materially alters or reduces the Employee's duties, responsibilities and status
with the Company from those which exist as of the Effective Date; (ii)
materially breaches the terms of this Agreement in respect to the payment of
compensation or benefits or in any other material respect and such breach is not
cured within ten (10) days after notice thereof; (iii) requires the Employee ,
as a condition to the Employment, to be based more than one hundred (100) miles
form the location where he is based as of the Effective Date; or (iv) required
the Employee , as a condition to the Employment, to perform illegal or
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fraudulent acts or omissions. If the Employee voluntarily terminates the
Employment for Good Reason pursuant to this Paragraph 3.4, the Employee shall be
entitled to receive the payments and other benefits specified in paragraph 3.3
hereof with respect to a termination be the Company other than For Cause.
3.5 Termination of Employment by the Employee Without "Good
Reason". Upon any voluntary termination of the Employment by the Employee, other
than for Good Reason pursuant to Paragraph 3.4 hereof, the Employee shall be
entitled to receive (i) the Employee's base salary through the date of such
termination, plus (ii) any Bonus award earned by the Employee as of the date of
termination of the Employment pursuant to Paragraph 2.2 hereof but not yet paid,
plus (iii) any other benefits to which the Employee is entitled pursuant to the
plans described in Paragraphs 2.3 and 2.7 hereof.
4. Expenses. The Company will reimburse the Employee for those
customary, ordinary and necessary business expenses incurred by him in the
performance of his duties and activities on behalf of the Company. Such expenses
will be reimbursed upon presentation by the Employee of appropriate
documentation to substantiate such expenses pursuant to the policies and
procedures of the Company governing reimbursement of business expenses to its
executives.
5. Conflicts of Interest. The Employee covenants, warrants and
represents to the Company that he has the full right and authority to enter into
the Employment and this Agreement, that he has no agreement, duty, commitment or
responsibility of any kind or nature whatsoever with or to any other person,
corporation, partnership, firm, company, joint venture or other entity which
would conflict in any manner whatsoever with any of his duties, obligations or
responsibilities to the Company pursuant to the Employment and/or this
Agreement. As a condition of the Employment and of the Company's entering into
this Agreement, the Company requires that the Employee not, and the Employee
hereby specifically agrees, covenants, warrants and represents that during the
Employment he will not, without the Company's express prior written consent,
accept any employment, contractual or other relationship of any kind or nature
whatsoever or engage in any association or dealing of any kind or nature
whatsoever with any person, corporation, partnership, firm, company, joint
venture, or other entity in competition with any actual or proposed business of
the Company; provided that nothing herein shall prohibit Employee from owning up
to five percent (5%) of the outstanding shares of any class of equity securities
of a corporation engaged in any such prohibited activity whose securities are
listed on a national securities exchange or quoted daily in the over-the-counter
listings of The Wall Street Journal.
6. Duties of the Employee After Any Notice of Termination of the
Employment. Following any notice of termination of the Employment, the Employee
shall fully cooperate with the Company in all matters relating to the winding up
of the Employee's work on behalf of the Company and the orderly transfer of all
pending work and of the Employee's duties and responsibilities to such other
person or persons
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as may be designated by the Company in its sole discretion. Upon any termination
of the Employment, the Employee will immediately deliver to the Company any and
all of the Company's property of any kind or nature whatsoever in the Employee's
possession, custody or control, including, without limitation any and all
Confidential Information as that term is defined in the Proprietary Information
and Inventions Agreement.
7. No Solicitation. During the Employment and for two (2) years
following any termination of the Employment, the Employee will not, without
having received prior written permission of the Company's Chief Executive
Officer to do so, directly or indirectly, on his own behalf or in the service of
others, interfere with or raid the officers, employees, consultants, agents
and/or independent contractors of the Company or in any manner attempt to
persuade any such person to discontinue any relationship with the Company. The
Employee and the Company confirm that this Paragraph 7 is reasonable and
necessary for the protection of the trade secrets and proprietary information of
the Company.
8. Arbitration. Except as otherwise expressly provided in this
Agreement, any and all controversies, disputes and/or claims in any manner
arising out of or relating to this Agreement or the Employment shall be settled
solely be arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. Such arbitration proceeding shall take place
in the state and county of the Company's office where the Employee is based.
Judgment on any decision rendered by the arbitrator may be entered in any court
having jurisdiction thereof. Each party shall bear its own attorney's fees and
expenses and other costs in any arbitration proceeding. All administrative fees
and the fee of the arbitrator shall be borne by the parties equally. Except as
otherwise expressly provided in this Agreement, the arbitration provisions set
forth above in this Paragraph 8 are intended by the Employee and by the Company
to be absolutely exclusive for all purposes whatsoever, and applicable to each
and every controversy, dispute and/or claim in any manner arising out o f or
relating to this Agreement, and the Employment, the meaning, application and/or
interpretation of this Agreement, any breach or claimed breach thereof and/or
any voluntary or involuntary termination of this Agreement with or without
cause, including, without limitation, any such controversy, dispute and/or claim
which, if pursued through any state or federal court or administrative agency,
would arise at law, in equity and/or pursuant to statutory, regulatory and/or
common law rules, regardless of whether such dispute, controversy and/or claim
would arise in and/or from contract, tort or any other legal and/or equitable
theory or basis. Notwithstanding anything to the contrary contained in this
Paragraph 8, the Company shall at all times have and retain the full, complete
and unrestricted right to immediate and permanent injunctive and other relief as
provided in Paragraph 9 below.
9. The Company's Right to Immediate Injunctive Relief. The Employee
recognizes, acknowledges and agrees that any breach or any threatened breach of
any Paragraph, term, provision or covenant of any of Paragraphs 1.4, 5, 6, 7 or
8 of this
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Agreement or of the Proprietary Information and Inventions Agreement would cause
irreparable injury to the Company which could not be adequately compensable in
monetary damages and that the remedy at law for any such breach will be entirely
insufficient and inadequate to protect the Company's legitimate interests.
Therefore, the Employee specifically recognizes, acknowledges and agrees that
the Company shall at any and all times be and remain fully entitled to seek and
obtain immediate temporary, preliminary and permanent injunctive relief for any
such breach or threatened breach from any court of competent jurisdiction. The
prevailing party in any action instituted pursuant to this paragraph 8 shall be
entitled to recover form the other party its reasonable attorneys' fees and
other expenses incurred in such litigation.
10. Survival of Certain Provisions of this Agreement. Except as may
otherwise be provided herein, each and all of the terms provisions and covenants
of each of paragraphs 1,4, 6, 7, 8, 9, 10 and 11 of this Agreement shall, for
any and all purposes whatsoever, survive any termination of the Employment,
regardless of whether such termination is by the Employee, the Company, by
expiration or otherwise.
11. General.
11.1 Successors and Assigns. The provisions of this Agreement
shall inure to the benefit of and be binding upon the Company, the Employee and
each and all of their respective heirs, legal representatives, successors and
assigns. The duties, responsibilities and obligations of the Employee under this
Agreement shall be personal and not assignable or delegable by the Employee in
nay manner whatsoever to any person, corporation, partnerships, firm, company,
joint venture or other entity. The Employee may not assign, transfer, convey,
mortgage, pledge or in any other manner encumber the compensation or other
benefits to be received by him or nay rights which he may have pursuant to the
terms and provisions of this Agreement.
11.2 Waiver. No waiver of nay breach of any warranty,
representation, agreement, promise, covenant, paragraph, term or provision of
this Agreement shall be deemed to be a waiver of any proceeding or succeeding
breach of the same or any other warranty, representation, agreement, promise,
covenant, paragraph, term and/or provision of this Agreement. No extension of
the time for the performance of any obligation or other act required or
permitted by this Agreement shall be deemed to be an extension of the time of
the performance of any other obligation or any other act required or permitted
by this Agreement.
11.3 Sole and Entire Agreement. This Agreement, and the other
agreements referred to herein, including the Company's benefit plans, are the
sole, complete and entire contract, agreement and understanding between the
Company and the Employee concerning the Employment, the terms and conditions of
the Employment, the duration of the Employment, the termination of the
Employment and the compensation and benefits to be paid and provided by the
Company to the
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Employee pursuant to the Employment. Except as otherwise provided herein, the
Agreement supersedes any and all prior contracts, agreements, plans, agreements
in principle, correspondence, letters of intent, understandings, and
negotiations, whether oral or written, concerning the Employment, the terms and
conditions of the Employment, the duration of the Employment, the termination of
the Employment and the compensation and benefits to be paid by the Company to
the Employee pursuant to the Employment.
11.4 Amendments. No amendment, modification, waiver, or
consent relating to this Agreement will be effective unless and until it is
embodied in a written document signed by the Company and by the Employee.
11.5 Originals. The Agreement may be executed by the Company
and by the Employee in counterparts, each of which shall be deemed an original
and which together shall constitute one instrument.
11.6 Headings. Each and all of the headings contained in this
Agreement are for reference purposes only and shall not in any manner whatsoever
affect the construction or interpretation of this Agreement or be deemed a part
of this Agreement for any purpose whatsoever.
11.7 Savings Provision. To the extent that any provisions of
this Agreement or any Paragraph, term, provision, sentence, phrase, clause or
word of this Agreement shall be found to be illegal or unenforceable for any
reason, such Paragraph, term, provision, sentence, phrase, clause or word shall
be modified or deleted in such a manner as to make this Agreement, as so
modified, legal and enforceable under applicable laws. The remainder of this
Agreement shall continue in full force and effect.
11.8 Applicable Law. This Agreement and each and every
provision of this Agreement shall be interpreted solely pursuant to the internal
laws of the State of California without regard to any conflicts of law
principles thereof.
11.9 Construction. The language of this Agreement and of each
and every paragraph, term and provisions of this Agreement shall, in all cases,
for any and all purposes, and in any and all circumstances whatsoever be
construed as a whole, according to its fair meaning, not strictly for or against
the Employee or the Company, and with no regard whatsoever to the identity or
status of any person or persons who drafted all or any portion of this
Agreement.
11.10 Notices. Any notices to be given pursuant to this
Agreement by either party to the other party may be effected by personal
delivery or by registered or certified mail, postage prepaid with return receipt
requested. Mailed notices shall be addressed to the parties at the addresses
stated below, but each party may change its or his address by written notice to
the other in accordance with this Paragraph 11.10.
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Notices delivered personally shall be deemed received on the date of delivery.
Notices delivered by mail shall be deemed received on the third business day
after the mailing thereof.
Mailed notices to the Employee shall be addressed as follows:
F. Xxxxx Xxxxx, M.D.
00000 Xxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Mailed notices to the Company shall be addressed as follows:
Raytel Medical Corporation
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Chief Executive Officer
IN WITNESS THEREOF, the Company and the Employee have each duly
executed this Agreement as of the date first set forth above.
RAYTEL MEDICAL CORPORATION EMPLOYEE
By: : /s/ Xxxxxxx X. Xxxxx /s/ F. Xxxxx Xxxxx, M.D.
------------------------------------ -----------------------------
Xxxxxxx X. Xxxxx F. Xxxxx Xxxxx, M.D.
Its: Chairman and Chief Executive Officer
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