Exhibit 10.12
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT (the "Agreement") by and between Medical
Resources, Inc., a Delaware corporation (the "Company"), and Xxxxxxxx X. Xxxxxx
(the "Executive"), dated as of the 23rd day of March, 1998.
W I T N E S S E T H:
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1. Employment Period. Subject to the terms and conditions of this
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Agreement, the Company hereby agrees to employ the Executive and the Executive
hereby agrees to remain in the employ of the Company, for the period commencing
on March 23, 1998 (the "Effective Date") and ending on the date this Agreement
is terminated in accordance with Section 3 (the "Employment Period").
2. Terms of Employment. (a) Position and Duties. (i) Commencing on the
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Effective Date and for the remainder of the Employment Period, the Executive
shall be Senior Vice President - Finance and Chief Financial Officer of the
Company, shall report exclusively to the Company's Chief Executive Officer
("CEO") and shall have such duties, responsibilities and authority as are
customary to the office of Chief Financial Officer of a publicly traded United
States corporation. The Executive shall be based at the Company's offices in
Hackensack, New Jersey, provided that the Executive shall perform such duties
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and responsibilities not involving a permanent transfer of his base of
operations outside of Hackensack, New Jersey at such other places as shall from
time to time be necessary to fulfill his obligations hereunder.
(ii) During the Employment Period, and excluding any periods of vacation
and sick leave to which the Executive is entitled, the Executive agrees to
devote full time during normal business hours to the business and affairs of the
Company and to use the Executive's best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period the Executive
shall not be engaged in any other business activity whether or not such business
activity is pursued for gain, profit or other pecuniary advantage, but this
shall not be construed as preventing the Executive from investing his personal
assets in businesses which do not compete with the Company in such form or
manner as will not require any services on the part of the Executive in the
operation of the affairs of the companies in which such investments are made and
in which his participation is solely that of an investor, and except that the
Executive may purchase securities in any corporation whose securities are
regularly traded provided that such purchase shall not result in
his owning beneficially at any time, other than through a registered investment
company, one percent (1%) or more of the equity securities of any corporation
engaged in a business competitive with that of the Company.
(b) Compensation. (i) Base Salary. During the Employment Period, the
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Executive shall receive an annual base salary ("Annual Base Salary") of
$185,000. The Annual Base Salary shall be paid in accordance with the normal
payroll practices of the Company and may be increased (but not decreased) from
time to time at the discretion of the Company's Board of Directors (the
"Board").
(ii) Annual Bonus. In addition to Annual Base Salary, the Executive
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shall be eligible to receive an annual bonus (the "Annual Bonus") for each
calendar year during the Employment Period, provided that the Executive is
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employed on the last day of such calendar year. Subject to the foregoing
proviso, for calendar year 1998, the Executive shall receive an Annual Bonus in
an amount not less than $100,000. For all other calendar years during the
Employment Period, the target amount of the Annual Bonus for any year shall be
fifty percent (50%) of the Annual Base Salary in effect for that year. Subject
to the foregoing proviso for a minimum Annual Bonus for calendar year 1998, the
actual amount of the Annual Bonus for any calendar year shall be determined by
the Board at its discretion and paid no later than March 15 of the calendar year
following the calendar year for which the Annual Bonus is awarded.
(iii) Stock Options. The Executive shall be granted, on the Effective
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Date, nonqualified stock options (the "Options") to acquire 160,000 shares of
the common stock of the Company, $0.01 par value per share (the "Common Stock"),
at an exercise price per share of $10.625. The Options shall have a term of ten
years from the date of grant and twenty-five percent (25%) of the Options shall
vest and become exercisable on each of the first, second, third and fourth
anniversaries of the Effective Date, provided Executive remains in the employ of
the Company on each such anniversary date; provided, however, that in the event
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of a "Change in Control" (as defined in Section 7), any outstanding unvested
Options shall become immediately vested and exercisable.
(iv) Benefit Plans. During the Employment Period, the Executive and/or
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the Executive's family, as the case may be, shall be eligible for participation
in and shall receive all benefits under employee benefit plans provided by the
Company (including, without limitation, medical, prescription, dental,
disability, group life, accidental death and travel accident insurance plans and
programs, and incentive, savings and retirement plans and programs) to the
extent applicable generally to other senior executives of the Company. In
addition, the
Company shall use its best efforts to obtain, pay for, and keep in
force during the Employment Period, a term life insurance policy in favor of a
beneficiary named by the Executive providing a death benefit in the amount of
$350,000 (subject to the
Executive passing any physical examinations required by the insurance carrier).
(v) Insurance. The Company shall maintain such insurance for the
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protection of the Executive as is appropriate and customary for the officers and
directors of entities engaged in the Company's business. Such insurance shall
cover Executive with respect to his services for the Company and affiliates
thereof (including as a director, if applicable).
(vi) Expenses. During the Employment Period, the Company shall pay or
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promptly reimburse the Executive for all reasonable business expenses upon
presentation of receipts therefor in accordance with the normal practices of the
Company. In addition, the Company shall reimburse the Executive, upon
presentation of appropriate receipts, for the reasonable expenses incurred by
the Executive in transporting his household belongings to one location in the
Hackensack, New Jersey area from Lancaster, Pennsylvania, and for the cost of a
reasonable and customary real estate commission incurred by the Executive on the
sale of his home in Lancaster, Pennsylvania.
(vii) Automobile Allowance. During the Employment Period, the Executive
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shall receive an automobile allowance in an amount equal to $650.00 per month to
cover the cost of leasing or purchasing an automobile, as well as other related
expenses. The allowance shall be increased as of each January 1 in the
Employment Period to reflect increases in the United States Consumer Price Index
for All Urban Consumers.
(viii) Vacation. During the Employment Period, the Executive shall be
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entitled to four weeks of paid vacation per year.
(ix) Temporary Housing. The Company will reimburse Executive for the
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cost of renting a temporary home in the Hackensack, New Jersey area, at a total
cost not to exceed $2,000 per month, for the period commencing on the Effective
Date (or such later date on which the Executive first rents such home) and
ceasing on the earlier of (A) the date the Executive closes the sale of his real
property in Lancaster, Pennsylvania or (B) the six-month anniversary of the
Effective Date (the "Relocation Period"). In addition, the Company shall
reimburse the Executive for the cost of (X) one round-trip visit for the
Executive from the Hackensack, New Jersey area to Lancaster, Pennsylvania for
each two weeks of the Relocation Period and (Y) three trips to the Hackensack,
New Jersey area for the Executive's spouse to
assist the Executive in obtaining a permanent residence, including the cost of
round-trip travel by car or train from Lancaster, Pennsylvania, and reasonable
local travel and food expenses during such trips.
3. Termination of Employment. (a) Death or Disability. The Executive's
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employment shall terminate automatically upon the Executive's death during the
Employment Period. If the Board determines in good faith that the "Disability"
(as defined below) of the Executive has occurred during the Employment Period,
it may terminate the Executive on account of such Disability. For purposes of
this Agreement, "Disability" shall mean the absence of the Executive from the
Executive's duties with the Company on a full-time basis for 90 consecutive
days, or 90 out of 120 consecutive days, as a result of incapacity due to mental
or physical illness which is determined by the Board to prevent the Executive
from performing his duties to the Company.
(b) With or Without Cause. The Company may terminate the Executive's
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employment during the Employment Period with or without Cause. For purposes of
this Agreement, "Cause" shall mean: (i) a material breach by the Executive of
the terms of this Agreement, (ii) the conviction of, plea of guilty or no
contest to, a felony or crime involving moral turpitude, or (iii) a failure by
the Executive to follow the reasonable lawful instructions of the CEO; provided
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that the Executive may be terminated for Cause pursuant to clause (iii) above
only after a written demand for substantial performance is delivered to the
Executive by the CEO, which specifically identifies the manner in which the CEO
believes that the Executive has not followed the lawful instructions of the CEO,
and the Executive fails to cure such noncompliance within thirty days after
receipt of such demand.
(c) With or Without Good Reason. The Executive's employment may be
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terminated by the Executive with or without Good Reason. For purposes of this
Agreement, "Good Reason" shall mean, without the Executive's prior written
consent, a material breach by the Company of this Agreement (and without
limitation, any breach by the Company of its obligations pursuant to Section
2(a)(i) hereof shall be a material breach), other than a breach which is
remedied by the Company within 30 days after receipt of notice thereof given by
the Executive.
(d) Notice of Termination. Any termination by the Company or by the
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Executive shall be communicated to the other party by a "Notice of Termination"
(as defined below) to the other party hereto given in accordance with Section
10(e) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated and (iii) if the "Date of Termination" (as defined in Section 3(e)) is
other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than thirty days after the giving of such notice).
The failure by the Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause, whether or not known at the time, shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
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Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be; (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, or
by the Executive without Good Reason, the Date of Termination shall be the date
of receipt of the Notice of Termination or any later date specified therein, as
the case may be; and (iii) if the Executive's employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of death of
the Executive or the first date on which the Board makes the determination that
the Executive shall be terminated as a result of his having been absent from his
duties to the extent required by the definition of Disability set forth in
Section 3(a) of this Agreement, as the case may be.
4. Obligations of the Company Upon Termination. (a) Good Reason; Other Than
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for Cause or Disability. If the Executive shall terminate employment for Good
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Reason or the Company shall terminate the Executive's employment other than for
Cause or Disability:
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the sum of (A) the Executive's
Annual Base Salary through the Date of Termination to the extent not previously
paid ("Accrued Salary"), (B) if such termination occurs following the end of a
calendar year and, prior to or following such termination, an Annual Bonus for
such calendar year is determined by the Board acting in good faith to have been
earned, the amount of such Annual Bonus ("Accrued Bonus"), and (C) if such
termination occurs prior to the end of a calendar year, thereby causing
Executive to be ineligible for an Annual Bonus pursuant to Section 2(b)(ii)
hereof, an amount of bonus determined by the Board acting in good faith to have
been
earned for the portion of such calendar year that Executive was employed
("Partial Bonus");
(ii) the Company shall continue to pay to the Executive his Annual
Base Salary, in effect as of the Date of Termination, for a period of twelve
(12) months following the Date of Termination, payable in accordance with the
Company's normal payroll practices; provided, however, that if the Executive
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becomes reemployed with another employer, the amounts to be paid under this
Section 4(a)(ii) shall be reduced, on a dollar for dollar basis, by any
compensation received from such employer which is attributable to services
performed by the Executive in the period in which such amounts under this
Section 4(a)(ii) otherwise would have been paid; further, provided that any such
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compensation shall be promptly reported by the Executive to the Company;
further, provided, that if such termination shall occur within twelve (12)
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months following a Change in Control, in addition to the benefits provided under
Section 4(a)(i) and (iii) hereof, the Executive shall receive a lump sum cash
payment, within 30 days after the Date of Termination, in an amount equal to
twelve (12) months of his then current Annual Base Salary, which amount shall
not be subject to reduction for any compensation earned from another employer;
and
(iii) the Company shall continue to provide to the Executive for a
period of twelve (12) months following the Date of Termination, benefits under
"employee welfare plans" (as defined in Section 3(1) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), other than the life
insurance policy referenced in the last sentence of Section 2(b)(iv), at least
equal to those which were provided to the Executive immediately prior to the
Date of Termination; provided, however, that if the Executive becomes reemployed
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with another employer and is eligible to receive any of such benefits under
another employer provided plan at the other employer's cost, other than
reasonable and customary employee contributions (whether or not he actually
elects to receive such benefits), the corresponding benefits described herein
shall be terminated; further, provided, however, that the Company shall not be
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required to provide any such benefit if the effect thereof would be to violate
the terms of any law, plan or insurance policy or jeopardize the tax benefit
associated with such benefit to which the Company otherwise would be entitled,
but in such event, the Company shall pay to the Executive, in cash, an amount
equal to the cost of providing such benefit. Any such benefits provided by
another employer shall be promptly reported by the Executive to the Company as
the Executive becomes eligible therefor.
(b) Death, Disability, With Cause, Without Good Reason. If the
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Executive's employment is terminated by reason of the Executive's death,
Disability, termination by the Company with
Cause or termination by the Executive without Good Reason, this Agreement shall
terminate without further obligations to the Executive or his legal
representatives under this Agreement, other than for payment of Accrued Salary
and, in the case of a termination by reason of death or Disability, payment of
Accrued Bonus and Partial Bonus, which shall be paid to the Executive or his
estate or beneficiary, as applicable, in a lump sum in cash within 30 days
following the Date of Termination. If the Executive's employment is terminated
for Cause, nothing in this Agreement shall prevent the Company from pursuing any
other available remedies against the Executive.
5. Confidential Information; Nonsolicitation; Noncompetition;
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Nondisparagement. (a) The Executive shall hold in a fiduciary capacity for the
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benefit of the Company all secret or confidential information, knowledge or data
relating to the Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during the
Executive's employment by the Company and which shall not be or become public
knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). After termination of the Executive's
employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it.
(b) The Executive hereby covenants and agrees that for eighteen (18) months
following the termination of the Executive's employment for any reason, the
Executive shall not, directly or indirectly, employ or seek to employ any person
who is at the Date of Termination, or was at any time within the six-month
period preceding the Date of Termination, an employee of the Company or any of
its subsidiaries or affiliates or otherwise cause or induce any employee of the
Company or any of its subsidiaries or affiliates to terminate such employee's
employment with the Company or such subsidiary or affiliate for the employment
of another company.
(c) The Executive hereby covenants and agrees that during the Employment
Period and for twelve (12) months following the termination of the Executive's
employment for any reason, the Executive will not, without the prior written
consent of the Company, engage in "Competition" (as defined below) with the
Company. For purposes of this Agreement, if the Executive takes any of the
following actions he will be engaged in "Competition": engaging in or carrying
on, directly or indirectly, any enterprise, whether as an advisor, principal,
agent, partner, officer, director, employee, stockholder, associate or
consultant to any person, partnership, corporation or any other business
entity, that is principally engaged in any business in which the Company is
engaged, or is contemplating becoming engaged, on the Date of Termination, in
any area in which the Company is then engaged, or is then contemplating being
engaged, in such business; provided, however, that "Competition" will not
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include (i) the mere ownership of securities in any enterprise and exercise of
rights appurtenant thereto or (ii) participation in management of any enterprise
or business operation thereof other than in connection with the competitive
operation of such enterprise.
(d) The Executive hereby covenants and agrees that during the Employment
Period and for twelve (12) months following the termination of the Executive's
employment for any reason, the Executive will not assist a third party in
preparing or making an unsolicited bid for the Company, engaging in a proxy
contest with the Company, or engaging in any other similar activity.
(e) During the Employment Period and following the termination of the
Executive's employment for any reason, the parties hereto each agree not to make
disparaging public statements concerning the other, provided that nothing herein
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shall prevent either party hereto from enforcing its rights hereunder; further,
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provided that the foregoing shall not prohibit Executive and the Company from
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making good faith comparative claims regarding the products and services of the
Company and those of an entity by which Executive may be employed following
termination of his employment hereunder, if the making of such claims does not
otherwise violate this Agreement.
(f) The Executive acknowledges that a breach of any of the covenants
contained in Section 5(a), (b), (c), (d) or (e) may result in material
irreparable injury to the Company for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injury precisely and
that, in the event of such a breach or threat thereof, the Company shall be
entitled to a temporary restraining order and/or a preliminary or permanent
injunction, restraining the Executive from engaging in such prohibited
activities or such other relief as may be required specifically to enforce any
of the covenants contained therein. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies for such breach or
threatened breach.
(g) The restrictions set forth in Section 5(a), (b), (c), (d) and (e) are
considered by the parties hereto to be reasonable for the purposes of protecting
the business of the Company. However, if any such restriction is found by a
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it is the intention of the parties
that such restriction shall be interpreted to extend only over the maximum
period of time, range of activities or geographic area as to which it may be
enforceable.
6. Post-Termination Assistance. The Executive agrees that after his
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employment with the Company has terminated he will provide, upon reasonable
notice, such information and assistance to the Company as may reasonably be
requested by the Company in connection with any audit, governmental
investigation or litigation in which it or any of its affiliates is or may
become a party; provided, however, that (a) any such assistance may not
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unreasonably interfere with the then-current employment of the Executive, and
(b) the Company agrees to pay the Executive (i) for any related out-of-pocket
expenses incurred, including travel expenses, and (ii) reasonable compensation
for his time based on his rate of Annual Base Salary at the time of termination,
unless the Executive is then being paid severance pursuant to Section 4(a)(ii)
or the date on which such assistance is needed is within the 12-month period
following the Executive's receipt of a lump sum severance payment pursuant to
Section 4(a)(ii).
7. Change in Control. For purposes of this Agreement, a "Change in Control"
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shall mean:
(a) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more (on a
fully diluted basis) of either (i) the then outstanding shares of Common Stock,
taking into account as outstanding for this purpose such shares issuable upon
the exercise of options or warrants, the conversion of convertible shares or
debt, and the exercise of any similar right to acquire shares (the "Outstanding
Company Common Stock") or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors or member managers (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this Section 7(a), the following
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acquisitions shall not constitute a Change in Control: (A) any acquisition by
the Company or any "affiliate" of the Company, within the meaning of 17 C.F.R.
(S) 230.405 (an "Affiliate"), (B) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any Affiliate of
the Company, (C) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of Section 7(c), or (D) any
acquisition by any entity in which the Executive has a direct or indirect equity
interest of greater than five percent; or
(b) Individuals who, as of the Effective Date, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
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the Effective Date whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of
the then outstanding shares of common stock or interests and the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation or other
entity resulting from such Business Combination (including, without limitation,
a corporation or entity which as a result of such transaction owns the Company
or all or substantially all of the Company's assets either directly or through
one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be, and (ii) no Person (excluding (A) any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Affiliate of the Company,
or such corporation resulting from such Business Combination or any Affiliate of
such corporation, or (B) any entity in which the Executive has a direct or
indirect equity interest of greater than five percent or any Affiliate of such
entity) beneficially owns, directly or indirectly, 50% or more (on a fully
diluted basis) of, respectively, the then outstanding shares of common stock or
interests of the corporation or entity resulting from such Business Combination,
taking into account as outstanding for this purpose such common stock or
interests issuable upon the exercise of options or warrants, the conversion of
convertible stock, interests or debt, and the exercise of any similar right to
acquire such common stock or interests, or the combined voting power of the then
outstanding voting securities of such
corporation or other entity except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors or equivalent governing body of the corporation or
other entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or
(d) Approval by the shareholders or equityholders of the Company of a
complete liquidation or dissolution of the Company.
8. Successors (a) This Agreement is personal to the Executive and without
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the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
heirs and personal and legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
9. Indemnification. (a) Indemnification. Executive shall be indemnified
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held harmless by the Company to the fullest extent permitted by applicable law,
as the same exists or may hereafter be amended, against all expenses, liability
and loss (including attorneys' fees, judgments, fines, and amounts paid or to be
paid in any settlement approved in advance by the Company, such approval not to
be unreasonably withheld) (collectively, "Indemnifiable Expenses") actually
incurred or suffered by Executive in connection with any present or future
threatened, pending or contemplated investigation, claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative, to which
Executive is a defendant, is threatened to be made a defendant, or is or has
been identified as a target in connection with any criminal investigation or
proceeding by reason of any action or inaction taken by Executive, within the
scope of Executive's present or former employment by, or service as a director
for, the Company in Executive's capacity as an officer, employee or director of
the Company or any of its subsidiaries or affiliates (collectively,
"Indemnifiable Litigation").
(b) Advance Payment of Interim Expenses. The Company agrees to pay prompt
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Indemnifiable Expenses incurred by Executive in connection with any
Indemnifiable Litigation in advance of the final disposition thereof, provided
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that the Company has received an undertaking by or on behalf of Executive, to
the extent required by law, to repay the amount so advanced to the extent that
it is finally adjudicated by court order or judgment from which no further right
of appeal exists that
Executive is not entitled to be indemnified by the Company under this Agreement
or otherwise. The advances to be made hereunder shall be paid by the Company to
Executive within ten (10) business days following delivery of a written request
therefor by Executive to the Company.
(c) Provision of Counsel Where Executive Is Not A Defendant Or Target. The
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Company shall provide Executive with legal representation, at no cost to the
Executive, in the event that the Executive shall be called upon to provide sworn
testimony in connection with any investigation, claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative
(collectively a "Non-Party Proceeding") as to which Executive is not a defendant
or target. The Company may designate one counsel to represent both the Company
and/or one or more directors or officers of the Company. Executive may reject
the counsel designated and require the Company to designate other counsel only
in the event that designated counsel has a disqualifying conflict of interest.
Executive may, at his own expense, retain counsel of his own choosing at any
time.
(d) Procedure for Making Demand. Executive shall, as a condition precedent
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to his rights under this Section 9, give the Company notice in writing as soon
as practicable of any claim or demand made against Executive for which
indemnification or the provision of counsel will or could be sought under this
Section 9. No failure to give such notice shall relieve the Company from any
obligations hereunder, except to the extent, if any, such failure shall
materially and adversely affect and prejudice the Company. Notice to the Company
shall be directed to the Company at the address set forth in Section 10(e)
hereof (or such other address as the Company shall designate in writing to
Executive). In addition, Executive shall give the Company such information and
cooperation as it may reasonably require and as shall be within Executive's
power, unless prohibited by law. Any indemnification or appointment of counsel
provided for hereunder shall be made no later than ten (10) business days after
receipt of the written request of Executive.
(e) Failure to Indemnify. (i) If a claim under this Section 9 for
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indemnification or appointment of counsel is not paid in full by the Company or
satisfied within ten (10) business days after a written request for payment
thereof has been received by the Company, Executive may, but need not, at any
time thereafter bring an action against the Company and, if successful in whole
or in part, Executive shall also be entitled to be paid all expenses (including
attorneys' fees and expenses) of bringing such action.
(ii) It shall be a defense to such action (other than an action brought to
enforce a claim for expenses incurred in
connection with any action, suit or proceeding in advance of its final
disposition) that Executive has not met the standards of conduct which make it
permissible under applicable law for the Company to indemnify Executive for the
amount claimed, but the burden of proving such defense shall be on the Company
and Executive shall be entitled to receive interim payments of interim expenses
pursuant to Section 9(b) hereof unless and until such defense may be finally
adjudicated by court order or judgment from which no further right of appeal
exists. It is the parties' intention that if the Company contests Executive's
right to indemnification, the question of Executive's right to indemnification
shall be for the Court to decide, and neither the failure of the Company
(including the Board, independent legal counsel or its stockholders) to have
made a determination that indemnification of Executive is proper in the
circumstances because Executive has met the applicable standard of conduct
required by applicable law, nor an actual determination by the Company
(including the Board, any committee or subgroup of the Board, independent legal
counsel, or its stockholders) that Executive has not met such applicable
standard of conduct, shall create a presumption that Executive has or has not
met the applicable standard of conduct.
(f) Notice to Insurers. At the time of the receipt of a notice of a claim
------------------
pursuant to Section 9(d) hereof, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective director and officer liability insurance
policies. The Company shall thereafter take all necessary or desirable action
to cause such insurers to pay, on behalf of the Executive, all amounts payable
as a result of such proceeding in accordance with the terms of such policies.
(g) Retention of Counsel. In the event that the Company shall be obligated
--------------------
to pay Indemnifiable Expenses under Section 9(a) of this Agreement as a result
of any proceeding against Executive, the Company shall be entitled to assume the
defense of such proceeding, with counsel approved by Executive, which approval
shall not be unreasonably withheld, upon the delivery to Executive of written
notice of its election to do so. The Executive may withhold such approval if he
reasonably concludes that there may be a conflict of interest or position on any
significant issue between the Company and the Executive in the conduct of the
defense of such proceeding. After delivery of such notice, approval of such
counsel by Executive and the retention of such counsel by the Company to
represent the Executive, the Company will not be liable to Executive under this
Agreement for any fees of any other counsel subsequently incurred by Executive
with respect to that same proceeding; provided, however, that in the event of a
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proceeding brought by shareholders of the Company in the right of the Company,
the Company agrees to retain counsel
which is different and separate from the Company's counsel to represent
Executive in such proceeding, subject to the other terms and conditions of this
Section 9(g).
(h) Contract Rights Not Exclusive. The contract rights conferred by this
-----------------------------
Section 9 shall be in addition to, but not exclusive of, any right which
Executive may have or may hereafter acquire under any statute, provision of the
Company's Certificate of Incorporation or Bylaws, agreement, vote of
shareholders or disinterested directors, or otherwise. Nothing in this Section
9 shall be construed to affect or modify any such right.
(i) Attorneys' Fees. In the event that any action is instituted by
----------------
Executive under this Agreement to enforce or interpret any of the terms of this
Section 9 and Executive prevails or substantially prevails in such action,
Executive shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Executive with respect to such action.
In the event of an action instituted by or in the name of the Company under this
Section 9 to enforce or interpret any terms hereof and Executive prevails or
substantially prevails in such action, Executive shall be entitled to be paid
all court costs and expenses, including attorneys' fees, incurred by Executive
in defense of such action (including with respect to Executive's counterclaims
and cross-claims made in such action).
10. Miscellaneous. (a) Governing Law. This Agreement shall be governed
------------- -------------
by and construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws.
(b) Captions and Amendments. The captions of this Agreement are not part
-----------------------
of the provisions hereof and shall have no force or effect. This Agreement may
not be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(c) Stipulation. Executive hereby stipulates to the Company that on the
-----------
date of this Agreement, neither Executive nor his affiliates has any claim of
any type against the Company, except claims that may arise under this Agreement,
and represents and warrants that this Agreement does not conflict with any other
agreement to which Executive is a party.
(d) Construction. The parties have participated jointly in the negotiation
------------
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(e) Notices. All notices and other communications hereunder shall be in
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writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
-------------------
Xxxxxxxx X. Xxxxxx
Medical Resources, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Tel: 000 000-0000
Fax: 000 000-0000
If to the Company:
------------------------------
Medical Resources, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxx
Tel: 000 000-0000
Fax: 000 000-0000
With a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Tel: 000 000-0000
Fax: 000 000-0000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
f. Enforceability. The invalidity or unenforceability of any provision of
--------------
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
g. Withholding. The Company may withhold from any amounts payable under
-----------
this Agreement such Federal, state, local or foreign
taxes as shall be required to be withheld pursuant to any applicable law or
regulation.
h. No Waiver. The Executive's or the Company's failure to insist upon
---------
strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or the Company may
have hereunder shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement. No waiver of any provision of
this Agreement by the Company or the Executive shall be effective unless it is
in writing signed by the party against whom enforcement is sought.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from its Board of Directors, the Company
has caused this Agreement to be executed in its name on its behalf, all as of
the day and year first above written.
This instrument may be executed in any number of counterparts, each of
which shall be deemed to be an original, and such counterparts together shall
constitute one and the same instrument.
XXXXXXXX X. XXXXXX
________________________
MEDICAL RESOURCES, INC.
By: _________________________
Name: Xxxxx X. Xxxxxxxxx
Title: President and Chief
Executive Officer
