FORM OF EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of November __,
2000 between RADIOLOGIX, INC., a Delaware corporation (the "Company"), and
Xxxx X. Xxxxx ("Xxxxx").
In consideration of the mutual covenants and conditions set forth herein, the
parties hereby agree as follows:
1. EMPLOYMENT. The Company hereby employs Xxxxx in the capacity of
Chairman of the Board and Chief Executive Officer. Xxxxx accepts such
employment and agrees to perform such services as are customary to such
office and as shall from time to time be assigned to him by the Board of
Directors.
2. TERM. The employment hereunder shall be for a period of 3 years,
commencing on the date of the closing of the merger (the "Merger")
contemplated by the Amended and Restated Agreement and Plan of Merger dated
as of September 12, 2000 by and among the Company, SKM-RD LLC and SKM-RD
Acquisition Corp. (the "Commencement Date"), and shall be automatically
renewed for successive one-year periods unless earlier terminated as provided
in Section 4. Xxxxx'x employment will be on a full-time basis requiring the
devotion of such amount of his productive time as is necessary for the
efficient operation of the business of the Company.
3. COMPENSATION AND BENEFITS.
3.1 SALARY. For the performance of Xxxxx'x duties hereunder, the
Company shall pay Xxxxx an annual salary of $425,000, payable (less required
withholdings) no less frequently than twice monthly (the "Base Salary").
3.2 BONUS. The Company shall also pay Xxxxx an annual cash bonus,
which bonus shall be payable in a single installment within 30 days following
the end of the employment year for which it is earned. The annual bonus for
the calendar year 2000 (the "First Employment Year") will be determined in
accordance with the bonus plan in effect for the Company prior to the Merger.
For each calendar year thereafter (the "Additional Employment Years"), the
annual bonus for Xxxxx will be determined in accordance with a performance
matrix to be adopted by the Board of Directors (the "Matrix"); provided that
the potential amount of such bonus will in no event be less than 60% of the
Base Salary in effect for such Additional Employment Year (such amount
determined by the Board of Directors in accordance with the Matrix, the
"Bonus").
3.3 STOCK OPTIONS. Following the Commencement Date, the Company
will xxxxx Xxxxx, pursuant to an option agreement in the form of EXHIBIT A
hereto, options under the Radiologix, Inc. 2000 Stock Option Plan (the "Stock
Option Plan") to purchase 475,000 shares of the Company's common stock at an
exercise price of $7.35 per share. Thereafter, Xxxxx will participate in the
Stock Option Plan and other plans granting options or stock awards to top
executives. The options will vest in accordance with the plan and option
award agreement under which such options are granted.
3.4 BENEFITS. Xxxxx shall be entitled to such medical, dental,
disability and life insurance coverage, paid time-off and holiday benefits,
if any, and any other benefits as are made available to the Company's top
executive personnel, all in accordance with the Company's benefits program in
effect from time to time.
3.5 REIMBURSEMENT OF EXPENSES. Xxxxx shall be entitled to be
reimbursed for all reasonable expenses, including but not limited to expenses
for travel, meals and entertainment, incurred by Xxxxx in connection with and
reasonably related to the furtherance of the Company's business.
3.6 ANNUAL REVIEW. In the first week of December of each
Additional Employment Year, the Board of Directors will review Xxxxx'x
performance and compensation hereunder (including salary, bonus and stock
options and/or other equity incentives) and will consider whether to increase
such compensation, but will not have authority, as the result of such review,
to decrease the then applicable Base Salary or maximum amount of the
potential Bonus without the written consent of Xxxxx.
4. TERMINATION.
4.1 TERMINATION EVENTS. The employment hereunder will terminate
upon the occurrence of any of the following events:
(a) Xxxxx dies;
(b) the Company, by written notice to Xxxxx or his personal
representative, discharges Xxxxx due to the inability to perform the duties
assigned to him hereunder for a continuous period exceeding 120 days by
reason of injury, physical or mental illness or other disability, which
condition has been certified by a physician; provided, however, that prior to
discharging Xxxxx due to such disability, the Company shall give a written
statement of findings to Xxxxx or his personal representative setting forth
specifically the nature of the disability and the resulting performance
failures, and Xxxxx shall have a period of ten (10) days thereafter to
respond in writing to the Board of Directors' findings;
(c) Xxxxx is discharged by the Board of Directors of the
Company for Cause. As used in this Agreement, the term "Cause" shall mean:
(i) Xxxxx'x conviction of (or pleading guilty or
nolo contendere to) any misdemeanor involving dishonesty or moral turpitude
or a felony; provided, however, that prior to discharging Xxxxx for Cause,
the Company shall give a written statement of findings to Xxxxx setting forth
specifically the grounds on which Cause is based, and Xxxxx shall have a
period of ten (10) days thereafter to respond in writing to the Board of
Directors' findings;
(ii) (A) the willful and continued failure of Xxxxx
to substantially perform his duties with the Company (other than any such
failure resulting from illness or disability) after a
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written demand for substantial performance is requested by the Company's
Board of Directors, which specifically identifies the manner in which it is
claimed Xxxxx has not substantially performed his duties, or (B) the personal
dishonesty, willful misconduct or breach of a fiduciary duty in respect of
any matter which has, or can reasonably be expected to have, a direct and
material adverse effect on the Company or its reputation. For purposes of
this Section, no act or failure to act on Xxxxx'x part shall be considered
"willful" if done, or omitted to be done, by Xxxxx in good faith and with
reasonable belief that Xxxxx'x action or omission was in the best interest of
the Company;
(iii) the willful breach by Xxxxx of any written
covenant or agreement with the Company not to disclose confidential
information pertaining to the Company or not to compete or interfere with the
operation of the Company's business; or
(iv) the abuse of alcohol or illegal drugs by Xxxxx
while performing his employment-related duties that affects the performance
by Xxxxx of his employment-related duties.
No termination shall be effected for Cause unless Xxxxx has been
provided with specific information as to the acts or omissions which form the
basis of the allegation of Cause, and Xxxxx has had an opportunity to be
heard, with counsel if so desired, before the Board of Directors and such
Board determines, by majority vote, in good faith that Xxxxx was guilty of
conduct constituting "Cause" as herein defined, specifying the particulars
thereof in detail;
(d) Xxxxx is discharged by the Board of Directors of the Company
without Cause, which the Company may do at any time, with at least 30 days
advance written notice;
(e) Xxxxx voluntarily terminates his employment due to either (i)
a default by the Company in the performance of any of its obligations
hereunder, or (ii) an Adverse Change in Duties (as defined below), which
default or Adverse Change in Duties remains unremedied by the Company for a
period of ten days following its receipt of written notice thereof from
Xxxxx;
As used herein, "Adverse Change in Duties" means an action or series
of actions taken by the Company, without Xxxxx'x prior written consent, which
results in:
(1) A material change in Xxxxx'x reporting responsibilities, titles,
job responsibilities or offices which results in a material diminution of his
status, control or authority; or
(2) The assignment to Xxxxx of any positions, duties or
responsibilities which are materially inconsistent with Xxxxx'x positions,
duties and responsibilities or status with the Company; or
(3) A requirement by the Company that Xxxxx be based or perform his
duties anywhere other than (i) at the Company's corporate office location on
the date of this Agreement, or (ii) if the Company's corporate office
location is moved after the date of this Agreement, at a new location that is
no more than 60 miles from such prior location; or
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(4) A failure by the Company to provide for Xxxxx'x participation in
any current or future benefits or plans at a level or to an extent
commensurate with that of other top executives of the Company;
(f) Xxxxx voluntarily terminates his employment for any reason
other than the Company's default or an Adverse Change in Duties, which Xxxxx
may do at any time with at least 30 days advance notice; or
(g) Xxxxx is discharged by the Board of the Directors as a result
of a material underperformance by the Company as measured against the
Company's business plan, with such underperformance to be reasonably
determined by the Board of Directors in good faith (a "Material
Underperformance").
4.2 EFFECTS OF TERMINATION.
(a) Upon termination of Xxxxx'x employment hereunder for any
reason, the Company will promptly pay Xxxxx all compensation owed to Xxxxx
and unpaid through the date of termination (including, without limitation,
salary, accrued paid time off, accrued but unpaid Bonus for the prior
employment year in the event Xxxxx is terminated following the end of such
prior employment year and employee expense reimbursements).
(b) In addition, if the employment is terminated under Section
4.1(d) at a time at which there is not a Material Underperformance or under
Sections 4.1(b) or (e), the Company shall also pay Xxxxx, immediately upon
such termination of employment, a lump sum severance amount equal to two and
one-half times the then applicable Base Salary, excluding Bonus. In addition,
if Xxxxx is terminated pursuant to the foregoing sentence, Xxxxx shall also
be entitled to receive an additional six months of his then applicable Base
Salary, excluding Bonus, if he is unable to secure a position with (i)
reasonably equivalent duties and (ii) a cash compensation package
substantially similar to his Base Salary at the time of termination (an
"Equivalent Position"); provided, however, that payments pursuant to this
sentence would be paid monthly and only until such time as Xxxxx secured an
Equivalent Position. If the employment is terminated under Section 4.1(d) at
a time at which there is a Material Underperformance or under Section 4.1(g),
the Company shall only pay Xxxxx, immediately upon such termination of
employment, a lump sum severance amount equal to one-half of the then
applicable Base Salary, excluding Bonus. If Xxxxx is terminated under
Sections 4.1(a), (c) or (f), Xxxxx will not be entitled to any severance
payment.
(c) Xxxxx agrees that, during the term of his employment and for
the one year period following the Termination Event (subject to any
limitations set forth below):
(i) Xxxxx will not directly or indirectly, whether
as an individual, employee, director, consultant or advisor, or in any other
capacity whatsoever, provide services to any person, firm, corporation or
other business enterprise which is involved in the acquisition and management
of radiology physician practices or diagnostic imaging centers, unless he
obtains the prior written consent of the Board of Directors; provided,
however, that in the event that Xxxxx is terminated under Section 4.1(d) at a
time at which there is a Material Underperformance or under Section 4.1(g),
the limitations contemplated by this Section 4.2(c)(i)
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will be effective only during the term of his employment and for six months
following such Termination Event.
(ii) Xxxxx will not directly or indirectly encourage
or solicit, or attempt to encourage or solicit, any individual to leave the
Company's employ for any reason or interfere in any other manner with the
employment relationships at the time existing between the Company and its
current or prospective employees.
(iii) Xxxxx will not induce or attempt to induce any
provider, payor, customer, supplier, distributor, licensee or other business
relation of the Company to cease doing business with the Company or in any
way interfere with the existing business relationship between any such
customer, supplier, distributor, licensee or other business relation and the
Company.
(iv) Xxxxx will not disclose or use for himself or
others, directly or indirectly (except for information disseminated by Xxxxx
in the good faith performance of his duties for the Company prior to a
Termination Event), any trade secrets or confidential information in written,
oral, electronic or other form regarding the Company and its affiliates and
their respective businesses, equipment, products or employees.
Xxxxx acknowledges that monetary damages may not be sufficient to
compensate the Company for any economic loss which may be incurred by reason
of breach of the foregoing restrictive covenants. Accordingly, in the event
of any such breach, the Company shall, in addition to any remedies available
to the Company at law, be entitled to obtain equitable relief in the form of
an injunction precluding Xxxxx from continuing to engage in such breach.
If any restriction set forth in this paragraph is held to be
unreasonable, then Xxxxx and the Company agree, and hereby submit, to the
reduction and limitation of such prohibition to such area or period as shall
be deemed reasonable.
5. GENERAL PROVISIONS.
5.1 ASSIGNMENT. Neither party may assign or delegate any of his or
its rights or obligations under this Agreement without the prior written
consent of the other party.
5.2 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes
any and all prior agreements between the parties (including the Company's
predecessors) relating to such subject matter, including the Employment
Agreement, dated as of May 29, 1998, between American Physician Partners,
Inc. and Xxxxx, and the amendments thereto.
5.3 MODIFICATIONS. This Agreement may be changed or modified only
by an agreement in writing signed by both parties hereto.
5.4 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
inure to the benefit of, and be binding upon, the Company and its successors
and permitted assigns and Xxxxx and Xxxxx'x legal representatives, heirs,
legatees, distributees, assigns and transferees by
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operation of law, whether or not any such person shall have become a party to
this Agreement and have agreed in writing to join and be bound by the terms
and conditions hereof.
5.5 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas.
5.6 SEVERABILITY. If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force and effect.
5.7 FURTHER ASSURANCES. The parties will execute such further
instruments and take such further actions as may be reasonably necessary to
carry out the intent of this Agreement.
5.8 NOTICES. Any notices or other communications required or
permitted hereunder shall be in writing and shall be deemed received by the
recipient when delivered personally or, if mailed, five (5) days after the
date of deposit in the United States mail, certified or registered, postage
prepaid and addressed, in the case of the Company, to Radiologix, Inc. c/o
SKM-RD LLC, 000 Xxxxxx Xxxxx, Xxxxxxxx, XX 00000, Attn: Xxxxxxx Xxxxxx,
Facsimile No.: (000) 000-0000, and in the case of Xxxxx, to the address shown
for Xxxxx on the signature page hereof, or to such other address as either
party may later specify by at least ten (10) days advance written notice
delivered to the other party in accordance herewith.
5.9 NO WAIVER. The failure of either party to enforce any
provision of this Agreement shall not be construed as a waiver of that
provision, nor prevent that party thereafter from enforcing that provision or
any other provision of this Agreement.
5.10 LEGAL FEES AND EXPENSES. In the event of any disputes under
this Agreement, each party shall be responsible for their own legal fees and
expenses which it may incur in resolving such dispute, unless otherwise
prohibited by applicable law or a court of competent jurisdiction.
5.11 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company and Xxxxx have executed this
Agreement, effective as of the day and year first above written.
COMPANY XXXXX
RADIOLOGIX, INC., a Delaware corporation
By: By:
----------------------------- -----------------------------
Name: Xxxx X. Xxxxx
Title: Address:
00 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
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