EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into August
8, 2007 by and between IntegraMed America, Inc., a Delaware corporation, having
its principal place of business at Two Xxxxxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx
00000 ("Company"), and Kush X. Xxxxxxx, a resident of the state of Illinois,
residing at 000 Xxxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxx 00000 ("Employee"), for the
purpose of setting forth the terms and conditions of Employee's employment by
the Company and to protect the Company's interests, confidential information,
trade secrets and other proprietary information and to obtain assurance that
Employee will not compete with Company or solicit its customers or its other
employees during the term of employment and for a reasonable period of time
after termination of employment pursuant to this Agreement. This Agreement
contains the complete agreement between the parties and supersedes any prior
understandings, agreements or representations by or between the parties, written
or oral, which may have related to the subject matter hereof in any way.
Recitals:
WHEREAS, the Company desires to employ Employee as President and Chief
Executive Officer of Company's wholly-owned subsidiary, Vein Clinics of America,
Inc. ("VCA"), and Employee desires to accept and serve in that capacity; and
WHEREAS, Employee understands that such employment is expressly
conditioned on execution of this Agreement; and
WHEREAS, Company desires to employ Employee to render services for
Company on the terms and conditions set forth in this Agreement, and Employee
desires to be retained and employed by Company pursuant to such terms and
conditions.
NOW, THEREFORE, in consideration of Employee's employment by Company
and the foregoing premises, the mutual covenants set forth below and other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Company and Employee agree as follows:
Article I. Definitions
1.1 "Agreement" means this Employment Agreement, as from time to time
amended.
1.2 "Base Salary" means the total annual cash compensation payable on a
regular periodic basis, without regard to taxes and other items withheld, and
excluding all types of incentive pay, all forms of stock or equity based
compensation, fringe benefits, special pay or awards, commissions and bonuses.
Base Salary shall include amounts contributed by Employee to a qualified
retirement plan, nonqualified deferred compensation plan or similar plan
sponsored by the Company, but it shall not include earnings on those amounts.
1.3 "Board" means the Board of Directors of Company.
1.4 "Cause" means:
(a) the gross neglect or willful failure or refusal of
Employee to perform Employee's duties hereunder (other than for Good
Reason or as a result of Employee's Disability);
(b) perpetration of an intentional and knowing fraud against
or affecting Company or any customer, supplier, client, agent or
employee thereof;
(c) any willful or intentional act that injures the
reputation, business or business relationships of Company or Employee's
reputation or business relationships;
(d) conviction (including conviction on a nolo contendere
plea) of a felony or any crime involving fraud, dishonesty or moral
turpitude; or
(e) the breach by Employee of any material covenant set forth
in this Agreement (including without limitation the Confidentiality,
Non-compete or Inventions provisions of the Agreement).
For purposes of this Section 1.4, no act, or failure to act,
on Employee's part shall be considered "willful," "intentional" or
"deliberate" unless done, or omitted to be done, by Employee in bad
faith and without reasonable belief that Employee's action or omission
was in, or not opposed to, the best interest of Company. Any act, or
failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or based upon the advice of counsel for
Company shall be conclusively presumed to be done, or omitted to be
done, by Employee in good faith and in the best interests of Company.
1.5 "Change of Control" means the occurrence of any of the following
events:
(a) When any "Person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended) is or
becomes the "Beneficial Owner" (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of Company representing
more than fifty percent (50%) of the total voting power represented by
Company's then outstanding voting securities without the approval of
the Board; or
(b) The merger or consolidation of Company whether or not
approved by the Board, other than a merger or consolidation which would
result in the voting securities of Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity)
at least fifty percent (50%) of the total voting power represented by
the voting securities of Company or such surviving entity outstanding
immediately after such merger or consolidation, or the shareholders of
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Company approve a plan of complete liquidation of Company or an
agreement for the sale or disposition by Company of all or
substantially all of Company's assets; or
(c) One or more changes in the aggregate composition of the
Board as a result of which individuals, who, as of the date hereof,
constitute Company's Board (the "Incumbent Board"), together with
Employee (based on Employee's election to the Board pursuant to Section
2.1), subsequently cease for any reason to constitute at least a
majority of Company's Board; provided, however, that any individual
becoming a director of Company subsequent to the date hereof, whose
election, or nomination for election by Company's stockholders, shall
have been approved by a vote of at least a majority of the directors
then constituting the Incumbent Board shall be considered as though
such individual is a member of the Incumbent Board, but excluding as a
member of the Incumbent Board, any such individual whose initial
assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of Company;
and provided further that, if one or more events which would constitute
or reasonably be deemed likely to cause or result in a "Change of
Control" should occur, but Employee shall have approved such event(s)
either in writing or by vote at a meeting of Company's Board, no
"Change of Control" shall be deemed to have occurred for purposes of
this Agreement.
1.6 "Company" means, as the context requires, all of the following,
jointly and severally: (a) IntegraMed America, Inc.; (b) VCA (c) any Subsidiary;
and (d) any successor by merger, consolidation, purchase or otherwise.
1.7"Confidential Information" means any and all information in whatever
form, whether written, electronically stored, orally transmitted or memorized
pertaining to: Trade Secrets; customer lists, records and other information
regarding customers; price lists and pricing policies, financial plans, records,
ledgers and information; purchase orders, agreements and related data; business
development plans; products and technologies; product tests; manufacturing
costs; product or service pricing; sales and marketing plans; research and
development plans; personnel and employment records, files, data and policies
(regardless of whether the information pertains to Employee or other employees
of Company); tax or financial information; business and sales methods and
operations; business correspondence, memoranda and other records; Inventions,
improvements and discoveries; processes and methods; and business operations and
related data formulae; computer records and related data; know-how, research and
development; trademark, technology, technical information, copyrighted material;
and any other confidential or proprietary data and information which Employee
encounters during employment, all of which are held, possessed and/or owned by
the Company and all of which are continually used in the operations and business
of Company. Confidential Information does not include information which (i) now
is or hereafter enters the public domain not as a result of a breach of this
Agreement by Employee; or (ii) is disclosed to Employee by a third party which
has the legal right to disclose such information.
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1.8 "Disability" means Employee's inability, due to a physical or
mental impairment, to perform the essential functions of the Employee's
position, where such disability shall exist for an aggregate period of more than
120 days in any 365-day period or for any period of 90 consecutive days.
1.9 "Employee" means Kush X. Xxxxxxx.
1.10 "Good Reason" means:
(a) Company effects a material diminution of Employee's title
or duties;
(b) the failure by Company, or its successor, if any, to pay
compensation or provide benefits or perquisites to Employee as and when
required by the terms of this Agreement;
(c) any material breach by Company of this Agreement;
(d) any requirement that Employee perform duties inconsistent
with those of a senior executive officer holding Employee's titles;
(e) the failure, refusal or inability of the Company to
maintain in full force and effect directors and officers errors and
omissions insurance, or similar security for claims brought against
Employee as a result of Employee's good-faith performance of Employee's
duties; and provided Employee has not approved either in Employee's
role as President & CEO of VCA or member of the Board any action not to
maintain in full force and effect directors and officers errors and
omissions insurance;
(f) the failure of the Company to remain in full and timely
compliance with reporting requirements under the Federal Securities
laws; provided Employee has not approved either in Employee's role as
President & CEO of VCA or member of the Board any action not to
maintain compliance with reporting requirements under the Federal
Securities laws; or
(g) the failure, refusal or inability of the Company to make
tax payments the liability for which may fall upon Employee; provided
Employee has not approved either in Employee's role as President & CEO
of VCA or a member of the Board any action not to make tax payments the
liability for which may fall upon Employee.
1.11 "Invention" means any idea, invention, software, technique,
modification, process, development, design, know-how, data, formula, improvement
or similar items, whether or not reduced to writing or stored electronically or
otherwise, whether patentable or unpatentable and whether or not protectable by
patent, trademark, copyright or other intellectual property law, which is
created, conceived or developed by Employee or under Employee's direction,
whether solely or with others, during or within 12 months after Employee's
employment by Company, which is based upon or otherwise derives from or makes
use of the Confidential or Proprietary Information. Employee shall promptly
disclose any Employee Invention to Company in writing. Employee hereby
acknowledges that any and all of said Inventions are the property of Company and
hereby assigns and agrees to assign to Company any and all of Employee's right,
title and interest in and to any and all of said Inventions.
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1.12 "Plan" means any bonus or incentive compensation agreement, plan,
program, policy or arrangement sponsored, maintained or contributed to by
Company, to which Company is a party or under which employees of Company are
covered, including, without limitation, any stock option, restricted stock or
any other equity based compensation plan, and any employee benefit plan, such as
a thrift, pension, profit sharing, deferred compensation, medical, dental,
disability, accident, life insurance, automobile allowance, perquisite, fringe
benefit, vacation, sick or parental leave, severance or relocation plan or
policy or any other agreement, plan, program, policy or arrangement intended to
benefit employees or executive officers of Company.
1.13 "Proprietary Information" means any and all confidential and/or
proprietary knowledge, data or information of Company or used in the research,
development or marketing of Company's technology or business, including, but not
limited to, (a) Trade Secrets, Inventions, mask works, ideas, processes,
formulas, source and object codes, data, programs, customer lists, other works
of authorship, know-how, improvements, discoveries, developments, designs and
techniques; and (b) information regarding plans for research, development, new
products, marketing and selling, business plans, budgets and unpublished
financial statements, licenses, prices and costs, suppliers and customers; and
(c) information regarding the skills and compensation of other employees of
Company. Notwithstanding the foregoing, it is understood that, at all such
times, Employee will be free to use information that is generally known in the
trade or industry, that is not gained as a result of a breach of this Agreement
and Employee's own, skill, knowledge, know-how and experience to whatever extent
and in whichever way Employee desires.
1.14 "Subsidiary" means any corporation at least a majority of whose
securities having ordinary voting power for the election of directors (other
than securities having such power only by reason of the occurrence of a
contingency) is at the time owned by Company and/or one or more Subsidiaries.
1.15 "Trade Secrets" means any information (including any compilation,
device, method, technique or process) that: (a) derives independent economic
value, actual or potential, from not being generally known to, and not being
readily ascertainable by proper means by, other persons who can obtain economic
value from its disclosure or use, and (b) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. The existence of a
Trade Secret will not be negated merely because a person has acquired a Trade
Secret without express or specific notice that it is a Trade Secret if, under
all the circumstances, such person knows or has reason to know that the party
who owns the information or has disclosed it intends or expects the secrecy of
the type of information comprising the Trade Secret to be maintained. Trade
Secret
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information includes information of Company, its customers, suppliers, joint
ventures, licensors, licensees, distributors and other entities with which
Company does business.
1.16 "Term" means the period commencing August 8, 2007 and terminating
in accordance with this Agreement.
Article II. Employment, Term, and Duties
2.1 Employment. Company hereby employs Employee as President & Chief
Executive Officer of Vein Clinics of America, Inc., and Employee accepts such
employment and agrees to perform services for Company for the period and upon
the other terms and conditions set forth in this Agreement. Employee will report
to the President & CEO of IntegraMed America, Inc. or any successor company.
2.2 Term. The Term of this Agreement shall commence on August 8, 2007
and shall continue until terminated in accordance with this Agreement. Employee
agrees not terminate this Agreement without cause for the first two years of
this Agreement.
2.3 Position and Duties.
2.3.1 Service with Company. During the Term, Employee agrees
to perform such duties and responsibilities that are consistent with
the position of a senior executive officer holding Employee's titles
and (a) as are set forth for that position in the By-laws of VCA; (b)
as set forth in the position description for the President and Chief
Executive Officer of VCA; (c) as the Board shall assign to the Employee
from time to time; and (d) that the Employee undertakes or accepts
consistent with Employee's position. Employee acknowledges and agrees
that, from time to time, Employee will be required to perform duties
with respect to one or more of the Company's subsidiary or affiliate
companies and that Employee will not be entitled to any additional
compensation for performing those duties.
Employee also agrees to serve, for any period for which Employee is
elected, as a director of Company; provided, however, that Employee
shall not be entitled to any additional compensation for serving as a
director.
Employee understands that Employee's duties may include substantial
travel, and Employee agrees to engage in such travel as is required to
further Company's business objectives.
2.3.2 Performance of Duties. During the Term, Employee agrees
to serve Company faithfully and to the best of Employee's ability and
to devote Employee's full business time, attention and efforts to the
business and affairs of Company (exclusive of any period of vacation,
sick, disability or other leave to which Employee is entitled) during
normal business hours. Employee, prior to the date hereof, has resigned
as CEO of Hair Today Gone Tomorrow, but will remain a member of the
Board of Directors and a shareholder with no day-to-day involvement of
said business.
Page 6 of 21
(a) Employee will comply with all rules, policies and
procedures of Company, to the extent consistent with applicable law, as
modified from time to time, including without limitation, rules and
procedures set forth in Company's employee handbook, supervisor's
manuals and operating manuals provided, that to the extent such
policies and procedures are inconsistent with this Agreement, the
provisions of this Agreement shall control.
(b) Employee will perform all of Employee's responsibilities
in compliance with all applicable laws and will use Employee's best
efforts in good faith to ensure that the operations that Employee
manages are in compliance with all applicable laws.
(c) Employee hereby confirms that Employee is under no
contractual commitments inconsistent with Employee's obligations set
forth in this Agreement and that during the Term, Employee will not
render or perform services for any other corporation, firm, entity or
person that are inconsistent with the provisions of this Agreement,
whether or not such activity is pursued for gain, profit or other
pecuniary advantage.
(d) Employee agrees that, during the Term, Employee will not
render or perform any services for any other corporation, firm, social
organization, entity or person without the written consent of the
President & CEO of IntegraMed. With approval Employee shall be entitled
to hold up to two (2) positions on the Boards of Director of entities
that do not compete with Company and shall be entitled to engage in
charitable enterprises, provided that Employee's activities in
connection with such Board of Director positions and/or charitable
enterprises do not in any way interfere with the performance of
Employee's duties to Company.
Article III. Compensation, Benefits and Expenses
3.1 Base Salary. Subject to the provisions of Article IV of this
Agreement, during the Term, Company shall pay Employee a Base Salary at an
annual rate that is not less than Two Hundred Fifty Thousand Dollars
($250,000.00) or such higher annual rate as may from time to time be approved by
the Board, such Base Salary to be paid in substantially equal regular periodic
payments, less deductions and withholdings, in accordance with Company's regular
payroll procedures, policies and practices as such may be modified from time to
time. Employee shall be eligible, at the Board's sole discretion, for annual
salary increases consistent with such procedures, policies and practices.
Employee's Base Salary shall be reviewed for potential adjustment on the basis
of performance from time to time, but in all events not less frequently than
annually.
3.2 Equity Grants. Employee will be eligible for consideration for
grants of equity in the Company and in conformity with the practices and
procedures of the Company as in effect at such time.
Page 7 of 21
3.3 Participation in Benefits. During the Term of Employee's employment
by Company, Employee shall be entitled to participate in the employee benefits
offered generally by Company to its employees, to the extent that Employee's
position, tenure, salary, health and other qualifications make Employee eligible
to participate. Without limiting the foregoing, Employee shall be eligible to
participate in any pension plan, or group life, health or accident insurance or
any such other plan or policy that may presently be in effect or that may
hereafter be adopted by the Company for the benefit of its employees and
corporate officers generally. Employee's participation in such benefits shall be
subject to the terms of the applicable plans, as the same may be amended from
time to time. Company does not guarantee the adoption or continuance of any
particular employee benefit during Employee's employment, and nothing in this
Agreement is intended to, or shall in any way restrict the right of Company, to
amend, modify or terminate any of its benefits during the Term of this
Agreement.
3.4 Expenses. In accordance with Company's normal policies for expense
reimbursement, Company will reimburse Employee for all reasonable and necessary
expenses incurred by Employee in the performance of Employee's duties under this
Agreement, subject to the presentment of receipts or other documentation
acceptable to Company.
3.5 De Minimis Personal Expenses. Employee shall be permitted to use
Company equipment, such as telephones, copy machines and facsimile machines,
for de minimis personal matters.
3.6 Office and Facilities. During the Term, Company shall furnish
Employee with office space at least equivalent in size, quality, furnishings
and in other respects to the office space provided as of the date of this
Agreement, and full-time secretarial service, together with such other
reasonable facilities and services as are suitable, necessary and
appropriate.
3.7 Vacation. For the duration of Employee's employment under this
Agreement, Employee will be provided such holidays, sick leave and vacation as
Company makes available to its management level employees generally.
3.8 Right of Set-off. By accepting this Agreement, Employee consents to
a deduction from any amounts Company owes Employee from time to time (including
amounts owed to Employee as wages or other compensation, fringe benefits or
vacation pay, as well as any other amounts owed to Employee by Company), to the
extent of the amounts Employee may owe to Company; provided, however, that this
set-off right shall not include any amounts owed pursuant to the Stock Purchase
Agreement by and among Company, IDVC Acquisition Co., VCA and other parties
thereto dated August 8, 2007. Whether or not Company elects to make any set-off
in whole or in part, if Company does not recover by means of set-off the full
amount Employee may owe it, calculated as set forth above, Employee agrees to
pay immediately the unpaid balance to Company.
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Article IV. Termination and Compensation Following Termination
4.1 Termination. Subject to the respective continuing obligations of
the parties under this Agreement, the Term and Employee's employment hereunder
may be terminated prior to the end of the Term under the following
circumstances:
4.1.1 Cessation of Company Business. In the event Company
ceases doing business.
4.1.2 Mutual Agreement. By mutual written agreement of the
parties at any time.
4.1.3 Death. In the event of Employee's death in accordance
with the provisions of Section 4.4 (b).
4.1.4 Employee's Disability. In the event Employee becomes
disabled, as defined in Section 1.8.
4.1.5 Termination by Company for Cause. Company may terminate
this Agreement and Employee's employment hereunder for Cause at any
time after providing written notice to Employee.
4.1.6 Termination By Employee For Good Reason. Employee may
terminate Employee's employment hereunder for Good Reason. Employee
shall have Good Reason to terminate Employee's employment only if (i)
within 10 days following the Employee's actual knowledge of the event
which the Employee determines constitutes Good Reason, Employee
notifies the Company in writing that Employee has determined Good
Reason exists and specifies the event creating Good Reason, and (ii)
following receipt of such notice, the Company fails to remedy such
event within 30 days. If either condition is not met, the Employee
shall not have a Good Reason to terminate his employment.
4.1.7 Termination by Company Without Cause. Company may
terminate Employee's employment hereunder at any time for any reason,
including a Change in Control, or no reason and with 30 days written
notice.
4.1.8 Termination by Employee Without Good Reason. After this
Agreement has been in effect for two years, the Employee may terminate
Employee's employment hereunder at any time for any reason, including
Change in Control, or no reason and with 30 days written notice.
Company may, at its option, accelerate such termination date to any
date at least two weeks after Employee's notice of termination. Company
may also, at its option, relieve Employee of all duties and authority
after notice of termination has been provided.
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4.2 Effect of Termination. Notwithstanding any termination of this
Agreement and/or Employee's employment with Company, Employee, in consideration
of Employee's employment hereunder to the date of such termination, shall remain
bound by the provisions of this Agreement that specifically relate to periods,
activities or obligations upon or subsequent to the termination of Employee's
employment, including, but not limited to, the covenants contained in Articles
V, VI and VII of this Agreement.
4.3 Surrender of Records and Property. Upon termination of Employee's
employment with Company, Employee shall deliver promptly to Company all records,
manuals, books, blank forms, documents, letters, memoranda, notes, notebooks,
reports, computer disks, computer software, computer programs (including source
code, object code, on-line files, documentation, testing materials and plans and
reports), designs, drawings, sketches, devices, specifications, formulae, data,
tables or calculations or copies thereof, which are the property of Company or
any subsidiary or affiliate or which relate in any way to the business,
products, practices or techniques of Company or any Subsidiary or affiliate,
Trade Secrets, Inventions, Confidential Information, Proprietary Information and
all other property of Company or any Subsidiary or affiliate. Employee may
retain copies of such materials provided Employee does not utilize the same in
violation of the provisions of this Agreement.
4.4 Compensation Following Termination. In the event that Employee's
employment hereunder is terminated, Employee shall be entitled only to the
following compensation and benefits upon such termination:
(a) Termination by Mutual Agreement or Employee For No Reason.
In the event that Employee's employment is terminated by reason of
mutual agreement or by the Employee for no reason, Company shall,
within 14 calendar days following the date of Employee's employment
termination, pay to Employee any amounts due to Employee for Base
Salary through the date of employment termination, together with any
other unpaid and pro rata amounts to which Employee is entitled as of
the date of termination pursuant to Section 3.1 or 3.2 of this
Agreement, including, without limitation, amounts that Employee is
entitled to under any benefit plan of the Company in accordance with
the terms of such plan. Employee will have no rights to any unvested
benefits or any other compensation or payments coming due after the
date of Employee's employment termination.
(b) Termination by Reason of Employee's Death or Disability.
In the event that Employee's employment is terminated by reason of
Employee's death or Disability, the Company shall, within 30 calendar
days following the date of Employee's employment termination, pay to
Employee, Employee's spouse or Employee's estate, as the case may be,
any amounts due to Employee for Base Salary through the date of
employment termination, together with any other unpaid and pro rata
amounts to which Employee is entitled as of the date of termination
pursuant to Section 3.1 or 3.2 of this Agreement, including, without
limitation, amounts that Employee is entitled to under any benefit plan
of the Company in accordance with the terms of such plan. Employee xxxx
Xxxx 10 of 21
have no rights to any unvested benefits or any other compensation or
payments coming due after the date of Employee's employment
termination.
(c) Termination by Company for Cause or by Employee Without
Good Reason. If the Employee's employment is terminated by the Company
for Cause or the Employee voluntarily terminates employment without
Good Reason, the Company shall, within 14 calendar days following the
date of Employee's employment termination, pay to the Employee (i) any
Base Salary earned but not paid through the date of Employee's
employment termination, plus (ii) the amount of any other benefits to
which Employee is legally entitled as of such date under the terms and
conditions of any benefit plans of the Company in which Employee is
participating as of such date, plus (iii) earned, but unpaid Bonus, up
to the date of termination, including any hold-back amount that would
have been paid at year end. The Company shall have no further
obligations under this Agreement.
(d) Termination by Employee for Good Reason; Termination by
the Company Without Cause; Termination by Reason of Cessation of
Company Business. In the event that Employee's employment is terminated
by Employee for Good Reason or by the Company without Cause or by
reason of cessation of the Company's business, Company shall, within 30
calendar days following the date of Employee's employment termination
pay to Employee the following:
(i) any accrued but unpaid Base Salary (as determined
pursuant to Section 3.1) for services rendered to the date of
termination;
(ii) any accrued but unpaid expenses required to be
reimbursed pursuant to Sections 3.8 and 3.9;
(iii) the pro-rata monetary equivalent of any unused
vacation days accrued to the date of termination;
(iv) a lump sum amount, less authorized and required
withholdings, due to Employee for Base Salary for a 3-month
period following termination; and
(v) Upon payment of the amounts provided for in Section
4.4(d)(i)-(iv), the Company shall have no further obligations
under this Agreement. As a condition for such payments,
Employee shall execute and deliver a written release to
Company.
(e) Termination by Employee for Good Reason Following Change
of Control; Termination by the Company Without Cause Following Change
of Control. In the event that (i) Employee's employment is terminated
either by Company without Cause or by Employee for Good Reason, and
(ii) a Change of Control (as defined in Article I) has occurred within
the 18-month period preceding the date of such termination, Company
shall pay the following amounts to Employee within 30 days following
Employee's termination:
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(i) any accrued but unpaid Base Salary (as determined
pursuant to Section 3.1) for services rendered to the date of
termination;
(ii) any accrued but unpaid expenses required to be
reimbursed pursuant to Sections 3.8 and 3.9;
(iii) the pro-rata monetary equivalent of any unused
vacation days accrued to the date of termination;
(iv) a lump sum amount, less authorized and required
withholdings, due to Employee for Base Salary for a 12-month
period following termination;
(v) a lump sum amount, less required withholdings, due
Employee for Employee's Bonus for the year in which the
termination occurs.
(vi) Upon payment of the amounts provided for in
Section 4.4(e)(i)-(v), the Company shall have no further
obligations under this Agreement. As a condition for such
payments, Employee shall execute and deliver a written release
to Company.
Employee shall not be entitled to any payment under clause (d) or (e)
above if Employee is or has at any time been in breach of any covenant contained
in Articles V, VI and VII of this Agreement.
4.5 Benefits. Except as otherwise provided in this Agreement, the
benefits to which Employee (or, as applicable, Employee's spouse or estate) may
be entitled upon termination pursuant to the plans, policies and arrangements
specified in Section 3.3 of this Agreement shall be determined and paid in
accordance with the terms of such plans, policies and arrangements.
4.6 No Mitigation Obligation. Employee shall not be required to
mitigate damages or the amount of any payment provided to Employee under Section
4.4 of this Agreement by seeking other employment or otherwise, nor shall, the
amount of any payments provided to Employee under this Section 4.4 be reduced by
any compensation earned by Employee as the result of employment by another
employer after the termination of Employee's employment or otherwise.
4.7 No Other Benefits or Compensation. Except as may be provided under
this Agreement, under the terms of any incentive compensation, employee benefit
or fringe benefit plan applicable to Employee at the time of the termination of
Employee's employment, Employee shall have no right to receive any other
compensation or to participate in any other plan, arrangement or benefit, with
respect to any future period after such termination or resignation.
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Article V. Confidential Information
5.1 Purpose and Scope. Company will, in the course of Employee's
employment, rely upon Employee for and impart and disclose to Employee in
confidence Confidential Information. Employee acknowledges that Company operates
in a competitive environment and that Company has an interest in protecting its
Confidential Information. In consideration of Employee's employment hereunder,
Employee agrees to (1) maintain the confidentiality of Company's Confidential
Information; (2) use Company's Confidential Information for the exclusive
benefit of Company; (3) assign ownership of all Inventions to Company; and (4)
not to compete with Company. Employee further acknowledges and agrees that
Employee's employment hereunder, Employee's compensation and benefits,
Employee's access to Company's Confidential Information, Employee's access to
customers and other good and valuable consideration associated with Employee's
employment with Company, provide good and sufficient consideration for
Employee's obligations under this Agreement.
5.2 Confidential Information. Employee understands and agrees that as
an employee of Company, Employee will receive or contribute Confidential
Information. Employee agrees that at all times during the period of Employee's
employment and after the termination thereof for any reason whatsoever, Employee
shall keep secret Confidential Information and that Employee will not use or
make known the same to any person, firm or corporation without first obtaining
the written consent of Company. Employee acknowledges that Company's
Confidential Information constitutes a unique and valuable asset of Company and
represents a substantial investment of time and expense by Company and that any
disclosure or other use of such knowledge or information other than for the sole
benefit of Company would be wrongful and would cause irreparable harm to
Company. The foregoing obligations of confidentiality shall not apply to any
knowledge or information that is now published or that subsequently becomes
generally publicly known in the form in which it was obtained from Company,
other than as a direct or indirect result of the breach of this Agreement by
Employee.
5.3 Value to Company of the Confidential Information. Employee
understands and agrees that:
(a) the Confidential Information, whether or not developed by
Employee, shall at all times be Company's exclusive property;
(b) the Confidential Information has unique, unusual, original
and proprietary qualities and features that must remain private and
confidential;
(c) the Confidential Information is not generally available to
the public;
(d) the Confidential Information has been compiled and
developed by Company at great expense and over an extended period of
time and is continuously used in the business of Company;
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(e) the Confidential Information gives Company a competitive
advantage over other businesses in its industry and has actual and
potential economic value to Company, all of which would be damaged or
destroyed if any of the Confidential Information were obtained by,
disclosed to or used by any person or entity other than Company;
(f) Employee's promises herein do not constitute an
unreasonable hardship to Employee in working for Company or in
obtaining other employment;
(g) if Employee breaches any or all of the promises herein,
Company shall suffer immediate, material, immeasurable, continuing and
irreparable damage and harm, the remedies at law for Employee's breach
shall be inadequate (and Employee hereby waives the claim or defense
that an adequate remedy at law is available). Company shall be entitled
to injunctive relief against Employee in addition to any and all other
legal or equitable remedies (including, but not limited to, an action
and judgment for damages), and Employee hereby waives and relinquishes
any requirement that Company post a bond or other security for such
injunctive relief;
(h) the existence and economic survival of Company depend
directly upon Employee's adherence to Employee's promises made herein;
and
(i) if Employee had not agreed to the restrictive promises
herein pertaining to Company, Company would not have employed Employee,
would not permit Employee to obtain and use the Confidential
Information and would not have signed this Agreement.
(b) Nondisclosure. At all times during Employee's employment and
thereafter, Employee will hold in the strictest confidence and will not
disclose, use, lecture upon or publish any of Company's Confidential
Information, except as such disclosure, use or publication may be disclosed as a
result of the legal process or subpoena, required in connection with Employee's
work for Company or unless Company expressly authorizes such disclosure in
writing. Employee will obtain Company's written approval before publishing or
submitting for publication any material (written, verbal or otherwise) that
relates to Employee's work at Company and/or incorporates any Confidential
Information. Employee hereby assigns to Company any rights Employee may have or
acquire in the Confidential Information and recognize that all of the
Confidential Information is and shall be the sole property of Company and its
successors and assigns.
(c) Return of Company Documents and Tangible Property. When Employee's
employment with Company comes to an end for any reason, or at any other time
Company so requests, Employee will immediately return to Company all records and
any compositions, articles, devices, equipment, software, programs and other
items that disclose or contain Confidential Information. This includes all
copies or specimens in Employee's possession whether prepared or made by others
or Employee.
Page 14 of 21
(d) Third Party Information. Employee understands, in addition, that
Company has received and in the future will receive from third parties
confidential or Proprietary Information ("Third Party Information"), subject to
a duty on Company's part to maintain the confidentiality of such Third Party
Information and to use such Third Party Information only for certain limited
purposes. At all times during Employee's employment with Company and thereafter,
Employee will hold all Third Party Information in the strictest confidence and
will not disclose to anyone (other than Company personnel who need to know such
Third Party Information in connection with their work for Company) or use,
except in connection with Employee's work for Company, any such Third Party
Information unless expressly authorized by an officer of Company in writing in
advance
Article VI. Inventions
6.1 Disclosure of Information. As part of Employee's duties to Company,
Employee agrees that during employment by Company and for a period of twelve
(12) months following termination of employment, for whatever reason, Employee
shall promptly disclose in writing to Company all Inventions, as defined in
Section 1.11, and whether or not reduced to practice, which are conceived,
developed, made or acquired by Employee, either individually or jointly with
others, and which relate to the business, products or services of Company or its
Affiliates, irrespective of whether Employee used Company's time or facilities
and irrespective of whether such Invention was conceived, developed, discovered
or acquired by Employee on the job, at home or elsewhere. This obligation
extends to all types of information, ideas and concepts, including information,
ideas and concepts relating to new types of services, corporate opportunities,
acquisition prospects, the identity of key representatives within acquisition
prospect organizations, prospective names or service marks for Company's
business activities and the like.
6.2 Assignment of Inventions. All Inventions developed during
Employee's period of employment and for a period of twelve (12) months following
the termination of employment, for whatever reason, which are based upon or
otherwise derives from or makes use of the Confidential or Proprietary
Information, are and shall be the sole and exclusive property of Company.
Furthermore, all drawings, memoranda, notes, records, files, correspondence,
manuals, models, specifications, computer programs, maps and all other writings
or materials of any type embodying such information, ideas, concepts,
improvements, discoveries and Inventions are and shall be the sole and exclusive
property of the Company. Employee hereby specifically sells, assigns, transfers
and conveys to Company all worldwide right, title and interest in and to all
such information, ideas, concepts, improvements, discoveries or Inventions, and
any United States or foreign applications for patents, inventor's certificates
or other industrial rights that may be filed in respect thereof, including
divisions, continuations, continuations-in-part, reissues and/or extensions
thereof, and applications for registration of such names and service marks.
Employee shall assist Company and its nominee at all times during the period of
employment and thereafter in the protection of such information, ideas,
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concepts, improvements, discoveries or Inventions, both in the United States and
all foreign countries, which assistance shall include, but shall not be limited
to, the execution of all lawful oaths and all assignment documents requested by
Company or its nominee in connection with the preparation, prosecution, issuance
or enforcement of any application for United States or foreign letters patent,
including divisions, continuations, continuations-in-part, reissues and/or
extensions thereof, and any application for the registration of such names and
service marks.
6.3 Prior Inventions. If Employee made, conceived or acquired any
Inventions before Company employed Employee, Employee shall list them on an
attachment to this Agreement, and they shall remain Employee's, and not
Company's, property.
6.4 Works for Hire. Employee acknowledges that all original works of
authorship that are made by Employee (solely or jointly with others) within the
scope of Employee's employment with Company and that are protectable by
copyright shall be deemed to be "works made for hire," pursuant to the United
States Copyright Act (17 U.S.C. Section 101) and all interest, right and title
to such works made for hire shall be owned by Company.
6.5 Enforcement of Proprietary Rights; Power of Attorney. Employee will
assist Company in every proper way to obtain, and from time to time enforce, all
United States and foreign proprietary rights relating to the Inventions or
Company Inventions in any and all countries. To that end, Employee will execute,
verify and deliver such documents and perform such other acts (including
appearances as a witness) as the Company may reasonably request for use in
applying for, obtaining, perfecting, evidencing, sustaining and enforcing such
proprietary rights and the assignment thereof. In addition, the Employee will
execute, verify and deliver assignments of such proprietary rights to Company or
its designee. Employee's obligation to assist Company with respect to
Proprietary Rights relating to Inventions or Company Inventions in any and all
countries shall continue beyond the termination of Employee's employment, but
Company shall compensate Employee at a reasonable rate after the termination of
Employee's employment with Company for the time actually spent by Employee
assisting Company at its request. In the event Company is unable for any reason,
after reasonable effort, to secure Employee's signature on any document or
instrument needed in connection with the actions specified above in this
Section, Employee hereby irrevocably designates and appoints Company and its
duly authorized officers and agents as Employee's agent and attorney in fact,
which appointment is coupled with an interest, to act for and on Employee's
behalf to execute, verify and file any such documents or instruments and to do
all other lawfully permitted acts to further the purposes of this Section 6.5
with the same legal force and effect as if executed by Employee. Employee hereby
waives and quitclaims to Company any and all claims, of any nature whatsoever,
that Employee now has or may hereafter have for infringement of any proprietary
rights or Company Inventions assigned hereunder to Company.
Article VII. Non-competition and Non-solicitation
7.1 Non-competition Covenant. Company and Employee agree that, solely
due to Employee's position with Company, Employee will have access to certain
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Confidential Information of Company. Employee acknowledges that Company will
only release this Confidential Information upon the receipt of assurances that
Employee will not use the information to Company's disadvantage and,
accordingly, agrees to the following provisions.
(a) Agreement Not to Compete. During the Term of Employee's employment
by Company, and for a period of 24 consecutive months from the date of
termination of such employment in the event such termination is for cause by the
Company or without cause by Employee, Employee shall not, directly or
indirectly, in any place in the United States, render services to any
conflicting organization, or engage in competition with Company, in any manner
or capacity, nor direct any other individual or business enterprise to engage in
competition with Company in any manner or capacity, (e.g., as an advisor,
principal, agent, partner, officer, director, stockholder of more than 1% of the
outstanding shares of the capital stock of a publicly traded company, employee,
member of any association or limited liability company or otherwise) on any
products competitive with Company's existing products, any products competitive
with Company's announced products or any products competitive with Company's
pending products that have not yet been announced but which Employee has, or
should have, actual or constructive knowledge. For the purposes of this Section,
"conflicting organization" shall be defined as any person, corporation or entity
that competes with any product, process or service, in existence or under
development, of Company. Further, for purposes of this Section, in the event of
Employee's termination for any other reason, Employee agrees for a period of 12
consecutive months from the date of termination not to directly or indirectly
compete with Company.
(b) Agreement Not to Solicit. During the Term of Employee's employment
by Company, and for a period of 24 consecutive months from the date of
termination of such employment for whatever reason (whether occasioned by
Employee or Company), Employee shall not, directly or indirectly, divert,
solicit or accept business from any client or prospective client of Company that
was solicited or serviced directly by Employee, or that Employee supervised,
directly or indirectly, in whole or in part, the solicitation or services
activities related to such clients or prospects. Employee shall not, directly or
indirectly, in any way interfere, or attempt to interfere, with Company's
relationships with any of its actual or potential vendors or suppliers.
(c) Agreement Not to Solicit Employees. During the Term of Employee's
employment by Company, and for a period of 24 consecutive months from the date
of termination of such employment, for whatever reason (whether occasioned by
Employee or Company), Employee shall not, directly or indirectly, hire, engage
or solicit any person, who was an employee of Company at the time of the
termination of Employee's employment by Company, or whose employment terminated
within 12 months prior to Employee's termination of employment and whom Employee
worked or associated with, or supervised, in any manner or capacity, including,
but not limited to, as an employee, agent, consultant, partner, member, manager,
officer, director, shareholder or otherwise.
7.2 Acknowledgment. Employee agrees that the restrictions and
agreements contained in this Article VII are reasonable and necessary to protect
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the legitimate interests of Company and that any violation of this Article VII
will cause substantial and irreparable harm to Company that would not be
quantifiable and for which no adequate remedy would exist at law. Employee
further acknowledges that Employee has requested, or has had the opportunity to
request, that legal counsel review this Agreement, and having exhausted such
right, agrees to the terms herein without reservation. Accordingly, Employee
authorizes the issuance of injunctive relief by any court of appropriate
jurisdiction, without the requirement of posting bond, for any violation of this
Article VII.
7.3 Blue Pencil. In the event that any of the covenants in this Article
VII shall be determined by any court of competent jurisdiction to be
unenforceable by reason of extending for too great a period of time or over too
great a geographical area or by reason of being too extensive in any other
respect, it shall be interpreted to extend over the maximum period of time for
which it may be enforceable and to the maximum extent in all other respects as
to which it may be enforceable, and enforced as so interpreted, all as
determined by such court in such action. Employee acknowledges the uncertainty
of the law in this respect and expressly stipulates that this Agreement is to be
given the construction that renders its provisions valid and enforceable to the
maximum extent (not exceeding its express terms) possible under applicable law.
Article VIII. Miscellaneous Provisions
8.1 Tax Consequences. Employee acknowledges and agrees that Company has
made no representations or warranties with respect to the tax consequences of
any of the payments or other consideration provided by Company to Employee under
the terms of this Agreement, and that Employee is solely responsible for
Employee's compliance with any and all laws applicable to such payments or other
consideration.
8.2 Withholding Taxes. Company may take such action as it deems
appropriate to insure that all applicable federal, state, city and other
payroll, withholding, income or other taxes arising from any compensation,
benefits or any other payments made pursuant to this Agreement, or any other
contract, agreement or understanding that relates, in whole or in part, to
Employee's employment with Company, are withheld or collected from Employee.
8.3 Company Remedies. Employee acknowledges and agrees that the
restrictions and agreements contained in this Agreement are reasonable and
necessary to protect the legitimate interests of Company, that the services to
be rendered by Employee hereunder are of a special, unique and extraordinary
character, that it would be difficult to replace such services and that any
violation of Article V, VI or VII of this Agreement would be highly injurious to
Company, that Employee's violation of any of Article V, VI and VII of this
Agreement would cause Company irreparable harm that would not be adequately
compensated by monetary damages and that the remedy at law for any breach of any
of the provisions of Articles V, VI and VIII will be inadequate.
8.4 Assignment. This Agreement shall not be assignable, in whole or in
part, by any party without the written consent of the other party and any
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purported or attempted assignment or transfer of this Agreement or any of
Employee's duties, responsibilities or obligations hereunder shall be void. This
Agreement is binding upon Employee, Employee's heirs and personal
representatives. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
8.5 Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing, shall be deemed to have been duly
given on the date of service if personally served on the parties to whom notice
is to be given, or on the second day after mailing if mailed to the parties to
whom notice is given, by first class mail United States registered or certified
mail, return receipt requested, postage prepaid and properly addressed as
follows:
If to Company: President & CEO
IntegraMed America, Inc.
Two Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
If to Employee: Kush X. Xxxxxxx
000 Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000; or
(Last known address of Employee on record at
the Company)
Any party may change the address for the purpose of this Section by
giving the other written notice of the new address in the manner set forth
above.
8.6 Governing Law. The validity, interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of New
York, without regard to conflicts of laws principles thereof.
8.7 Construction. Notwithstanding the general rules of construction,
both Company and Employee acknowledge that both parties were given an equal
opportunity to negotiate the terms and conditions contained in this Agreement,
and agree that the identity of the drafter of this Agreement is not relevant to
any interpretation of the terms and conditions of this Agreement.
8.8 Severability. In the event any provision of this Agreement (or
portion thereof) shall be held illegal or invalid for any reason, said
illegality or invalidity shall not in any way affect the legality or validity of
any other provision of this Agreement. To the extent any provision (or portion
thereof) of this Agreement shall be determined to be invalid or unenforceable in
any jurisdiction, such provision (or portion thereof) shall be deemed to be
deleted from this Agreement as to such jurisdiction only, and the validity and
enforceability of the remainder of such provision and of this Agreement shall be
unaffected.
8.9 Arbitration. Except as provided in subsection 8.9(b), any claims or
disputes of any nature between the parties arising from or related to the
performance, breach, termination, expiration, application or meaning of this
Agreement shall be resolved exclusively by arbitration before the American
Page 19 of 21
Arbitration Association in Westchester County, New York pursuant to the
Association's rules for commercial arbitration.
(a) The decision of the arbitrator(s) shall be final and
binding upon both parties. Judgment on the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. In
the event of submission of any dispute to arbitration, each party
shall, not later than thirty (30) days prior to the date set for
hearing, provide to the other party and to the arbitrator(s) a copy of
all exhibits upon which the party intends to rely at the hearing and a
list of all persons whom each party intends to call as witnesses at the
hearing.
(b) This section shall have no application to claims by
Company asserting violation of or seeking to enforce, by injunction or
otherwise, the terms of Articles V, VI and VII above. Such claims may
be maintained by Company in a lawsuit before a court of competent
jurisdiction.
8.10 Disclosure. Employee agrees fully and completely to reveal the
applicable terms of this Agreement to any future employer or potential employer
of Employee and authorizes Company, at its election, to make such disclosure.
8.11 Entire Agreement. This is the final, complete and exclusive
agreement of the parties and sets forth the entire agreement between Company and
Employee with respect to Employee's employment by Company, and there are no
undertakings, covenants or commitments other than as set forth therein. The
Agreement may not be altered or amended, except by a writing executed by the
party against whom such alteration or amendment is to be enforced. This
Agreement supersedes, terminates, replaces and supplants any and all prior
understandings or agreements between the parties relating in any way to the
hiring or employment of Employee by Company or VCA.
8.12 Counterparts. This Agreement may be simultaneously executed in any
number of counterparts, and such counterparts executed and delivered, each as an
original, shall constitute but one in the same instrument.
8.13 Captions and Headings. The captions and paragraph headings used in
this Agreement are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.
8.14 Survival. The parties expressly acknowledge and agree that the
provisions of this Agreement that by their express or implied terms extend
beyond the expiration of this Agreement or the termination of Employee's
employment under this Agreement, shall continue in full force and effect,
notwithstanding Employee's termination of employment under this Agreement or the
expiration of this Agreement.
8.15 Waivers. No failure on the part of either party to exercise, and
no delay in exercising, any right or remedy under this Agreement shall operate
as a waiver thereof; nor shall any single or partial exercise of any right or
remedy under this Agreement preclude any other or further exercise thereof or
Page 20 of 21
the exercise of any other right or remedy granted hereby or by any related
document or by law. No single or partial waiver of rights or remedies hereunder,
nor any course of conduct of the parties, shall be construed as a waiver of
rights or remedies by either party (other than as expressly and specifically
waived).
8.16 Reliance by Third Parties. This Agreement is intended for the sole
and exclusive benefit of the parties hereto and their respective heirs,
executors, administrators, personal representatives, successors and permitted
assigns, and no other person or entity shall have any right to rely on this
Agreement or to claim or derive any benefit therefrom absent the express written
consent of the party to be charged with such reliance or benefits.
8.17 No Conflicting Obligations. Employee represents that Employee's
performance of all the terms of this Agreement and as an employee of Company
does not and will not breach any agreement to keep in confidence information
acquired by Employee in confidence or in trust prior to Employee's employment
with Company. Employee has not entered into, and Employee agrees not to enter
into, any agreement, either written or oral, in conflict with this Agreement.
8.18 Representation of Employee. Employee represents and warrants to
Company that Employee is free to enter into this Agreement and has no contract,
commitment, arrangement or understanding to or with any party that restrains or
is in conflict with Employee's performance of the covenants, services and duties
provided for in this Agreement. Employee agrees to indemnify Company and to hold
it harmless against any and all liabilities or claims arising out of any
unauthorized act or acts by Employee that, the foregoing representation and
warranty to the contrary notwithstanding, are in violation, or constitute a
breach, of any such contract, commitment, arrangement or understanding.
8.19 Read and Understood. Employee has read this Agreement carefully
and understands each of its terms and conditions. Employee has sought
independent legal counsel of Employee's choice to the extent Employee deemed
such advice necessary in connection with the review and execution of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
INTEGRAMED AMERICA, INC.
By:/s/Xxx Xxxxxx
------------------------------
Xxx Xxxxxx, President & CEO
EMPLOYEE:
/s/Kush X. Xxxxxxx
------------------------------
Kush X. Xxxxxxx
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