EXHIBIT 10.21
EMPLOYMENT CONTRACT
AGREEMENT dated and effective this 30th day of September by and between
Xxxxx X. Xxxxxx, a resident of Spring, Texas ("Employee"), and Integrated
Orthopaedics, Inc. (the "Company").
WITNESSETH
For and in consideration of the mutual promises and covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Employee agree as
follows:
ARTICLE I
DUTIES
1.1 DUTIES. During the term of this Agreement, the Company agrees to
employ Employee as Senior Vice President of Development for the Company, and
Employee agrees to serve the Company in such capacity or in such other
capacities as the President of the Company may direct, all upon the terms and
subject to the conditions set forth in this Agreement.
1.2 TERM. The term of this Agreement shall commence on the date and year
first written and shall continue for a period of one-year (the "Initial Term");
unless sooner terminated in accordance with the provisions of the Agreement
hereinafter set forth. The Initial Term shall automatically be extended on each
anniversary of this Agreement for an additional one-year term (each an
"Extension Term") unless either party hereto notifies the other of intent to
terminate this Agreement as hereinafter set forth.
1.3 COMPENSATION AND BENEFITS.
A. As compensation for services rendered hereunder, Employee is paid in the
following manner: $150,000 for one year. If this agreement continues beyond the
initial time frame, the raises will be determined by Company policy. In
addition to such amount, the Company, may on, it's sole discretion, may award to
Employee a bonus of up to 50% of the current year's salary. The bonus will be
based on annual performance objectives as set by the Company.
B. Employee shall be entitled to receive all of the employee benefits that
may, from time to time, be provided by the Company to its employees. Employee
shall also be entitled to receive liability insurance covering those acts,
omissions, or other conditions specifically related to or resulting from the
course and scope of Employee's duties as Senior Vice President of Development
for the Company.
1.4 LONG TERM INCENTIVE PLAN. If Employee is eligible, participation in the
Long Term Incentive Plan will be offered in separate documents. Only Employees
who are eligible will receive contracts.
1.5 EXPENSES: The Company shall reimburse Employee for all expenses
reasonably incurred by Employee on behalf of the Company in accordance with the
prevailing practice and policy of the Company.
1.6 CONFIDENTIAL INFORMATION: Employee acknowledges that in and as a result
of his employment hereunder, he will be making use of, acquiring, and/or adding
to confidential information of a special and unique nature and value relating to
such matters as the Company's trade secrets, systems, procedures, manuals,
confidential reports, and lists of clients, ("Confidential Information"). As a
material inducement to the Company to enter into this Agreement and to pay to
Employee the compensation and benefits stated herein, Employee covenants and
agrees that he shall not, at any time during or for one (1) year following the
term of his employment, directly or indirectly, divulge or disclose for any
purpose whatsoever any Confidential Information that has been obtained by, or
disclosed to, him as a result of his employment by the Company. In the event of
a breach or threatened breach by Employee of any of the provisions of this
paragraph, the Company, in addition to and not in limitation of, any other
rights, remedies, or damages available to the Company at law or in equity, shall
be entitled to a permanent injunction in order to prevent or restrain any such
breach by Employee or Employee's partners, agents, representatives, servants,
employers, employees, and/or any and all persons directly or indirectly acting
for or with him. This section shall not apply to the extent information divulged
or accessed by Employee (i) is already known to him at the time of disclosure,
(ii) is generally available to the public or otherwise was part of public domain
at the time of disclosure, (iii) became generally available to the public after
disclosure through no act or omission of Employee, (iv) was disclosed to
Employee by a third party who had no obligation to restrict disclosure, and (v)
Employee can show that such information was independently developed by Employee
without use of any Confidential Information.
1.7 RESTRICTIVE COVENANT. Employee acknowledges that the services he is to
render are of a special and unusual character with a unique value to the
Company, the loss of which cannot adequately be compensated by damages in an
action at law. In view of the unique value to the Company of the services of
Employee for which the Company has contracted hereunder, because of the
confidential information to be obtained by or disclosed to Employee, as
hereinabove set forth, and as a material inducement to the Company to enter into
this Agreement and to pay to Employee the compensation stated herein as well as
any additional benefits stated in Section 1.3 of this Agreement, as well as any
additional benefits stated herein.
For the period commencing with the date of the Agreement and ending one (1)
year following the termination of this Agreement (severance period), for
whatever reason, the Employee agrees that he will not directly or indirectly,
for his own account or for the account of others, whether as principal or agent
or through the agency of any corporation, partnership, association or other
business entity, engage in any business activity which shall be competitive to
any business of the Company. For purposes hereof, a business will be deemed,
until proven otherwise, to be competitive if it involves providing physician
practice management or network development services, including consulting
services related to physician practice management companies, related to
orthopaedics or the treatment of musculoskeletal injuries or illnesses.
Activities specifically excluded from the definition of competitive business,
for purposes hereof, are (i) accepting employment to directly manage an
independent individual physician practice not associated with a competitive
physician practice management company and (ii) providing individual self-
employed consulting services directly representing an individual physician
practice, but not representing a company providing physician practice management
or network development services to multiple physician practices. The Employee
agrees further that, for a period commencing with the date of this Agreement and
ending one (1) year following termination of this Agreement, for whatever
reason, Employee shall not, directly or indirectly, make known to any person,
firm or corporation, the names and addresses of any clients, customers,
employees or any other information pertaining to them nor call on, solicit, take
away, contract with, employ or hire or attempt to call on, solicit, take away,
contract with,
employ or hire any of the clients, customers, or employees, including, but not
limited to, those upon whom the Employee called or with whom he became
acquainted during the performance of the services pursuant to this Agreement,
whether for personal purposes or for any other person, firm or corporation.
Nothing contained in this Section 1.7 shall prohibit the Employee from
purchasing and holding as an investment not more than 5% of any class of the
issued and outstanding and publicly traded (on a recognized national or regional
securities exchange or in the over-the-counter market) capital stock of any such
corporation which conducts a business in competition with the business of the
Company. Should the foregoing covenant not to compete be held invalid or
unenforceable because of the scope of the actions restricted thereby, or the
period of time within which such agreement is operative in the judgment of a
court of competent jurisdiction, the parties agree that and hereby authorize
such court to define the maximum actions subject to and restricted by this
Section 1.7 and the period of time during which such agreement is enforceable.
The provisions of this Section 1.7 shall be applicable for the period indicated,
regardless of the termination of this Agreement for any reason prior to the
expiration of such period.
1.8 PROPRIETARY PROPERTY ASSIGNMENT. Any files or lists, notes, reference
materials, client lists, sketches, diagrams, manuals, reproductions, training or
education material, memoranda, documentation, and records incorporating or
reflecting any of the information or proprietary property, or developed as a
result of Employee's services to the Company (hereinafter collectively referred
to as "Proprietary Property"), shall belong exclusively to the Company and shall
be delivered to the Company upon termination of this Agreement for whatever
reason said termination occurs.
1.9 SPECIFIC PERFORMANCE. Employee acknowledges that a remedy at law for
any breach or attempted breach of Sections 1.6, 1.7 and 1.8 of this Agreement
will be inadequate; (i) Employee agrees that the Company shall be entitled to
specific performance and injunctive and other equitable relief in case of any
such breach or attempted breach; and (ii) the remedy provided in this Section
1.9 is in addition to, and not in lieu of, any other rights and remedies
available to the Company under law and in equity.
1.10 CERTAIN ACTIVITIES. Unless otherwise agreed to in writing by the
parties hereto, all income generated by Employee from his/her services and other
activities for or on behalf of the Company, including, but not limited to,
consulting activities, speaking engagements, publication of articles and
research, shall be the property of the Company.
ARTICLE II
TERMINATION
2.1 TERMINATION FOR CAUSE. Notwithstanding any other provision hereof,
the Company may terminate Employee's employment under this Agreement at any time
for cause. The termination shall be evidenced by written notice thereof to the
Employee, which shall specify the cause for termination. For purposes hereof,
the term "cause" shall include, without limitation, the inability of the
Employee, through sickness or other incapacity, to perform his duties under this
Agreement for a period in excess of 120 substantially consecutive days;
dishonesty; theft; conviction of a crime; unethical business conduct; and a
material breach of this Agreement. The term "cause" shall also include the
failure of Employee for any reason, within 5 days after receipt by Employee of
written notice thereof from the Company, to correct, cease, or otherwise alter
any insubordination, failure to comply with instructions, or other action or
omission to act that in the opinion of the Company does or may materially or
adversely affect its business or operations. The Company's obligations hereunder
shall terminate upon any
termination for cause pursuant to this Section 2.1; provided, however, if such
termination results from sickness or other incapacity of Employee, the Company
may, in its sole discretion (without any obligation), extend to Employee certain
benefits relating to such termination.
2.2 TERMINATION WITHOUT CAUSE. Notwithstanding any other provision
hereof, the Company or Employee may terminate this Agreement without cause upon
30 days prior written notice thereof given to the other party hereto. In the
event the Company terminates this Agreement without cause pursuant to this
paragraph, the Company shall pay Employee, 9 months of his annual base salary,
through the regularly scheduled payroll cycle. In addition, the Company shall
extend to the Employee health, dental, Long Term Disability & Life Insurance
Benefits until end of severance period or upon employment with another employer,
which ever comes first under Section 1.3 hereof. Payment by the Company in
accordance with this paragraph shall constitute Employee's full severance pay
and the Company shall have no further obligation to Employee arising out of or
subsequent to such termination.
ARTICLE III
ARBITRATION
Any controversy of any nature whatsoever, including but not limited to tort
claims or contract disputes, between the parties to this Agreement or between
the Employee, his heirs, executors, administrators, legal representatives,
successors, and assigns and the Company and its affiliates, arising out of or
related to the Employee's employment with the Company, any resignation from or
termination of such employment and/or the terms and conditions of the Agreement,
including the implementation. applicability and interpretation thereof, shall,
upon the written request of one party served upon the other, be submitted to and
settled by arbitration in accordance with the provisions of the Federal
Arbitration Act, 9 U.S.C. ~(S) 1-15, as amended. Each of the parties to this
Agreement shall appoint one person as an arbitrator to hear and determine such
disputes, and if they should be unable to agree, then the two arbitrators shall
choose a third arbitrator from a panel made up of experienced arbitrators
selected pursuant to the procedures of the American Arbitration Association (the
"AAA") and. once chosen, the third arbitrator's decision shall be final, binding
and conclusive upon the parties to this Agreement. Each party shall be
responsible for the fees and expenses of its arbitrator and the fees and
expenses of the third arbitrator shall be shared equally by the parties. The
terms of the commercial arbitration rules of AAA shall apply except to the
extent they conflict with the provisions of this paragraph. It is further agreed
that any of the parties hereto may petition the United States District Court for
the District of Houston, Texas, for a judgment to be entered upon any award
entered through such arbitration proceedings.
ARTICLE IV
MISCELLANEOUS
4.1 NOTICES. All notices, requests, consents and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been delivered on the date personally delivered or on the date mailed, postage
prepaid, by certified mail, return receipt requested, or telegraphed or telexed
and confirmed if addressed to the respective parties as follows:
If to the Employee:
Xxxxx X. Xxxxxx
00000 Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
If to the Company:
Integrated Orthopaedics, Inc.
0000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Human Resources
provided, however, that any party shall have the right to change such party's
address for notice hereunder to any location by giving of notice to the other
party in the manner set forth hereinabove.
4.2 GOVERNING LAW: This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Texas and venue for any
dispute arising hereunder shall be deemed proper in Xxxxxx County, Texas.
4.3 WAIVER. The waiver of any provision hereof shall not be deemed to
constitute the waiver of such provision or any other provisions hereof
4.4 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law. If any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
4.5 BINDING EFFECT. Subject to the provisions of Section 2.2 hereof, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and the successors and assigns of the Company and Employee.
4.6 CAPTIONS AND HEADINGS. The section and paragraph headings in this
Agreement are for reference purposes only and in no way define, limit or
describe the scope or content of this Agreement or any paragraph hereof.
4.7 ENTIRE AGREEMENT: AMENDMENT. This Agreement represents the entire
agreement by and between the parties hereto relating to the subject matter
hereof this Agreement may not be changed except by written agreement duly
executed by the parties hereto.
4.8 SUCCESSORS AND ASSIGNS
A. Except as otherwise expressly provided herein, Employee agrees on behalf
of his executors and administrators, heirs, legatees, distributees and any other
person or persons claiming any benefits under his by virtue of this Agreement,
that this Agreement and the rights, interests and benefits hereunder shall not
be assigned, transferred, pledged or hypothecated in any way by Employee or any
executor, administrator, heir, legatee, distributee or person claiming under
Employee by virtue of this Agreement and shall not be subject to execution,
attachment or similar process. An attempt at assignment, transfer, pledge or
hypothecation or other disposition of this Agreement or of such rights, interest
and benefits contrary to the foregoing provision, or the levy of any attachment
or similar process thereupon, shall be null and void and without effect except
as provided in Section 4.2.
B. The Company shall be permitted to assign this Agreement to its
successors and assigns and all covenants and agreements hereunder shall inure to
the benefit of and be enforceable by or against such successors or assigns. The
terms "successors" and "assigns" shall include any person that buys all or
substantially all of the Company's assets, or at least thirty-five percent (35%)
of its voting equity, or with which the Company merges or consolidates.
4.9 THIRD PARTY BENEFICIARIES. This Agreement does not create, and shall
not be construed as creating, any rights enforceable by any person or entity not
a party to this Agreement (except as provided in Section 4.9).
4.10 OBLIGATIONS OF THE COMPANY. Subject to Section 4.9, Employee agrees
to look solely to the Company for the performance of all of the Company's
obligations under this Agreement, and no other person or entity, including
without limitation any shareholder or creditor of the Company, shall have any
liability for the performance of any of the obligations of the Company under
this Agreement.
4.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts; each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
EMPLOYEE
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Xxxxx X. Xxxxxx
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Date
COMPANY:
Integrated Orthopaedics, Inc.
By:
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Name:
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Title:
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Date
