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EXHIBIT 10.6
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated as of December 17, 1996 (this
"Agreement"), is made and entered into by and between X. X. Xxxx, an individual
resident of the State of Oregon ("Executive"), and Brim, Inc., an Oregon
corporation (the "Company").
Recitals
1. The Company desires to secure the services of Executive as an
employee of the Company for the period provided in this Agreement.
2. Executive is willing to enter into this Agreement for such period
and on the terms and conditions hereinafter set forth.
3. This Agreement is being entered into in connection with the
transactions contemplated by that certain Investment Agreement (the
"Agreement") dated as of the date hereof among the Company, and Golder, Thoma,
Cressey, Rauner, Inc.
Agreement
In consideration of the promises and covenants herein contained, the
Company and Executive hereby agree as follows:
Section 1. Employment
(a) During the term of employment set forth in Section 2 of this
Agreement, the Company shall employ Executive, and Executive shall serve, in
the capacity and with the title described in Schedule A to this Agreement, or
shall serve in such other similar capacity, with such other similar title, as
the Board of Directors of the Company shall reasonably determine from time to
time consistent with the skills and experience of Executive. Executive agrees
to perform faithfully his duties under this Agreement to the best of his
ability.
(b) Executive shall perform the duties and have such responsibilities
described in Schedule A to this Agreement and/or such additional or other
duties as shall be reasonably designated from time to time by the Board of
Directors of the Company.
Section 2. Term and Place of Employment. Executive's term of employment
under this Agreement shall be for a period of three years commencing on the
date hereof, unless sooner terminated as provided in Section 8 below. Executive
shall perform his duties principally in Portland, Oregon, and shall not be
required to change his place of residence in connection with his employment
hereunder.
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Section 3. Compensation. For all services to be rendered by Executive
to the Company under this Agreement, the Company shall pay to Executive the
base salary described in Schedule A to this Agreement payable in accordance
with the Company's standard payroll practices (the "Base Salary").
Section 4. Benefits. During the term of employment hereunder, Executive
shall be entitled, to the extent that he is otherwise eligible, to participate
in the benefits listed on Schedule A attached hereto with such changes as may
be adopted from time to time for all similarly situated officers of the
Company. In addition, the Company shall honor any sick leave and vacation time
of Executive whether earned or accrued and unpaid as of the date of this
Agreement.
Section 5. Reimbursement of Expenses. The parties recognize that in the
course of performing his duties hereunder, Executive will necessarily incur
out-of-pocket expenses for the account of the Company. Executive shall be
entitled to reimbursement for all reasonable out-of-pocket expenses so
incurred by him in the performance of his duties hereunder, upon submission of
an adequate accounting for such expenses.
Section 6. Covenant Not to Compete.
(a) During the term of Executive's Employment, Executive shall not,
except as to the personal investments disclosed in Schedule B to this
Agreement, directly or indirectly, engage in any business whether as an
employee, consultant, partner, principal, agent, representative or stockholder
or in any other corporate or representative capacity, if it involves:
(i) owning, operating, managing or leasing a business that the
Company, or any of its subsidiaries or affiliates, was actively conducting at
the time of the termination of Executive's employment with the Company, in
competition with the Company or any subsidiary or affiliate, within a 25-mile
radius of any facility owned, leased or managed by the Company or any of its
Subsidiaries which is engaged in such line of business as the Company or any
such subsidiary or affiliate; provided, however, that ownership of less than
five percent of the stock of any private or publicly traded corporation shall
not be deemed to violate this paragraph;
(ii) assisting any other entity to enter into any line of business
that the Company or any subsidiary or affiliate was actively conducting at the
time of the termination of Executive's employment, within a 25-mile radius of
any facility owned, leased or managed by the Company or any of its Subsidiaries
which is engaged in such line of business as the Company or any such subsidiary
or affiliate;
(iii) taking any action within a 25-mile radius of any facility
owned, leased or managed by the Company or any of its Subsidiaries to divert
from the Company, or from any subsidiary or affiliate, any business in which
the Company, or by any subsidiary or affiliate, was already engaged at the time
of the termination of Executive's employment;
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(iv) inducing customers, suppliers, agents, franchisees or other
persons under contract or franchise or otherwise doing business with the
Company and its subsidiaries or affiliates at the time of the termination of
Executive's employment, to terminate, reduce or alter business with or from the
Company or any subsidiary or affiliate; or
(v) substantially causing any executive in the employment of the
Company or any of its subsidiaries or affiliates to terminate such employment,
accept employment with anyone other than the Company or any subsidiary or
affiliate or interfere in any material manner with the business in which the
Company or any subsidiary or affiliate was already engaged at the time of the
termination of Executive's employment.
(b) It is the intent of the parties that the restrictions contained in
this Section 6 be reasonable in both duration and geographic scope. If any
court of competent jurisdiction shall find the provisions of this Section
unreasonable, the restrictions contained in this Section shall be reduced in
duration and/or geographic scope to the extent necessary to be deemed
reasonable by such court, and shall be enforceable as so modified.
Section 7. Confidential Information.
(a) The Executive shall not, during the term of his employment or
thereafter, without the prior written consent of the Company, divulge, disclose
or make accessible to any other person, firm, partnership or corporation,
except while employed by the Company in the business of and for the benefit of
the Company or when required to do so by a lawful order of a court of competent
jurisdiction, Confidential Information (as defined herein). "Confidential
Information" shall mean all nonpublic information respecting the business of
the Company and its subsidiaries including, but not limited to, their products,
research and development, processes, customer lists, marketing plans and
strategies. Confidential Information does not include information that is or
becomes available to the public unless such availability occurs through an
unauthorized act on the part of Executive.
(b) Except as may be otherwise consented to in writing by the Company,
Executive shall proffer to an appropriate officer of the Company, at the
termination of his employment, all memoranda, diaries, notes, records, cost
information, customer lists, marketing plans and strategies, and any other
documents containing any Confidential Information made or compiled by, or
delivered or made available to, or otherwise obtained by Executive in his
possession or subject to his control at such time except that Executive may
proffer a legible copy, and retain the original, of any personal diary or
personal notes.
(c) Executive agrees that the provisions of this Section shall survive
the termination of this Agreement.
Section 8. Termination; Termination Benefits. The term of employment
hereunder shall be terminated upon the first to occur of the following:
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(a) The expiration of the term of employment pursuant to Section 2 of
this Agreement;
(b) Executive's death or permanent disability. "Permanent disability"
shall mean physical or mental incapacity of a nature which prevents Executive,
in the judgement of an independent qualified physician of good standing, from
performing his duties under this Agreement for a period of three months. If the
term of employment is terminated because of Executive's death or disability,
the Company shall pay (in the case of death) to Executive's beneficiary or
beneficiaries designated in writing to the Company, or to Executive's estate in
the absence or lapse of such designation, or (in the case of permanent
disability) to Executive or his representative, any insurance proceeds
attributable to Executive's death or disability;
(c) Executive's employment being terminated by the Board of Directors
of the Company for Cause. Termination "for Cause" shall mean termination
because of: (1) the refusal, neglect or failure without good reason of
Executive to perform a major portion of the services to be performed by him
under this Agreement, provided Executive shall first have been given notice of
such refusal, neglect or failure for a period of thirty (30) days after the
delivery to Executive of such notice or shall fail to use reasonable best
efforts to cure such refusal, neglect or failure; (2) gross negligence or
willful misconduct in the performance of Executive's duties hereunder, (3) the
habitual intoxication or inexcusable repeated or prolonged absence from work of
Executive; (4) the perpetration by Executive of a fraud against the Company; or
(5) the conviction of Executive of a felony. Termination for Cause shall occur
upon delivery to Executive a written notice of such action by the Board of
Directors of the Company, which written notice shall specify the grounds for
such termination. If Executive's employment is terminated for Cause, the
Company's only obligation to Executive shall be payment of the Base Salary for
such period of time as is consistent with the standard practice of the Company;
(d) Executive's voluntary termination of employment with the Company.
"Voluntary Termination" shall mean the termination of Executive's employment
with the Company as a result of his resignation or by mutual agreement between
Executive and the Company. If Executive's employment is terminated as a result
of a Voluntary Termination, the Company's only obligation to Executive shall be
payment of the Base Salary for such period of time as is consistent with the
standard practice of the Company, but not less that 90 days from the date such
termination occurs; or
(e) Executive's employment being terminated by the Board of Directors
of the Company without Cause. Termination "without cause" shall mean
termination by the Company of Executive's employment on any basis other than
those provided in paragraphs (a), (b), (c) or (d) of this Section 8. If the
term of employment is terminated without cause, the Board of Directors of the
Company shall give 10 days written notice thereof to Executive and Executive
shall be entitled to receive in full at the time of termination the Base Salary
as if earned in full, in respect of the unexpired portion of the term of
employment in the amounts and at the times provided in Section 3.
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Section 9. Injunctive Relief, Executive acknowledges that Company has
no adequate remedy at law and would be irreparably harmed if the Executive
breaches or threatens to breach the provisions of Section 6 or Section 7 above,
and, therefore, agrees that the Company shall be entitled to injunctive relief
to prevent any breach or threatened breach of any of those sections, and to
specific performance of the terms of each of such sections in addition to any
other legal or equitable remedy it may have. Executive further agrees that he
shall not, in any equity proceeding involving him relating to the enforcement
of Section 6 or Section 7 above, raise the defense that the Company has an
adequate remedy at law. Nothing in this Agreement shall be construed as
prohibiting the Company from pursuing any other remedies at law or in equity
that it may have or any other rights that it may have under any other
agreement.
Section 10. Withholding of Taxes. Any payments to Executive, or to his
designated beneficiary or beneficiaries, pursuant to the terms of this
Agreement shall be reduced by such amounts as may be required to be withhold
with respect thereto under all present and future federal, state and local tax
laws and regulations and other laws and regulations.
Section 11. Notice. Any notice, demand, approval or other
communication which may or is required to be given under this Agreement shall
be in writing and shall be deemed to have been given on the earlier of the day
actually received or on the close of business on the third business day next
following the day when deposited in the United States mail, postage prepaid,
registered or certified, addressed to the party at the address set forth after
its name below or such other address as may be given by such party in writing
to the other:
If to Executive:
X. X. Xxxx
0000 X. X. Xxxxxxx
Xxxxxxxx, XX 00000
If to the Company:
c/o Principal Hospital Company
0000 Xxxxxxx Xxxxxxx Xxxxx
Xxxxx X-00
Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxx, President
Phone: 000-000-0000
Fax: 000-000-0000
Section 12. Full and Complete Agreement. This Agreement, including the
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exhibits and schedules hereto constitutes the full and complete understanding
and agreement of the parties and supersedes all prior understandings and
agreements regarding Executive's employment by the Company, Brim or any of
their respective subsidiaries or affiliates.
Section 13. Amendment. This Agreement may be modified only by a
written instrument executed by both parties.
Section 14. Nonassignability. This Agreement and the rights and
benefits hereunder are personal to the Company and are not assignable or
transferable, nor may the services to be performed hereunder be assigned by the
Company to any person, firm or corporation; provided, however, that this
Agreement and the rights and benefits hereunder shall be assigned by the
Company to any corporation acquiring all or substantially all of the assets of
the Company or to any corporation into which the Company may be merged or
consolidated, and this Agreement and the rights and benefits hereunder will
automatically be deemed assigned to any such corporation without any future
action by Executive or the Company. Executive's right and interests under this
Agreement may not be assigned, pledged or encumbered by Executive. The
provisions of this Agreement shall inure to the benefit of Executive's heirs,
executors, administrators and successors in interest.
Section 15. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee.
Section 16. Execution in Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
Section 17. Titles and Headings. Titles and section headings herein
are for purposes of reference only, and shall in no way limit, define or
otherwise affect the meaning or interpretation of any of the provisions of this
Agreement.
Section 18. Severability. If any portion of this Agreement is deemed
invalid or unenforceable for any reason by a court of competent jurisdiction,
then such provision will continue in effect only to the extent that it remains
valid, and all other provisions in this Agreement in all other respects shall
remain valid and enforceable.
Section 19. Attorney Fees. In the event that suit or action is
instituted to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to recover his or its attorney fees and costs,
including those incurred on appeal, as determined by the court.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first set forth above.
BRIM, INC.
By /s/
--------------------------
Name:
Title:
/s/ X. X. Xxxx
---------------------------
X. X. Xxxx
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SCHEDULE A
EMPLOYEE: X. X. XXXX
BASIC DUTIES AND RESPONSIBILITIES:
Executive shall assist in the transition contemplated under the
Investment Agreement, and such other duties and responsibilities, commensurate
with his skills and experience, as he may be from time to time be called upon
to perform.
Executive shall be available on a half time basis, the timing of which
availability shall be mutually agreed upon by the parties.
Executive shall also serve as a member of the Board of Directors of
Principal Hospital Company, it being understood that his duties as an employee
are separate therefrom.
TITLE WITHIN THE COMPANY:
Director of Principal Hospital Company and Chairman Emeritus.
COMPENSATION:
1. Employment Date = 10/01/71
2. Executive's base salary shall be paid at the rate of $121,680.00 per
year. Executive shall also be entitled to such annual incremental increases as
may be given to similarly situated executives of the Company.
3. Executive shall be entitled to retain the standard employee benefits
package provided by the Company to Executive immediately prior to the
consummation of the transaction which is the subject of the Investment
Agreement. Such benefits shall not be reduced due to or as a result of
Executive's contemplated half-time status.
Executive shall be entitled to participate in any stock option/stock
purchase plans or similar equity programs to be developed for key employees
pursuant to Section 6.03(a)(ii) of the Investment Agreement or otherwise.
Executive shall retain his current office located in the Brim, Inc.
corporate office in Portland, Oregon, and shall be provided such secretarial
support as may be appropriate and necessary for Executive to carry out his
duties and responsibilities.
Executive shall be entitled to retain his current combined
automobile and expense
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(SCHEDULE A Cont.)
allowance in the amount of $600.00 per month, and the Company shall pay the
dues associated with Executive's membership in the Portland Arlington Club.
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