EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, made as of January 4, 1995, between ProMedCo,
Inc., a Texas corporation (the "Company"), and R. Xxxx Xxxxxxxx ("Executive").
In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment. The Company shall employ Executive, and Executive accepts
employment with the Company, under the terms and conditions set forth in this
Agreement for the period beginning on the date hereof and ending as provided in
paragraph 4 hereof (the "Employment Period"). The date on which Executive ceases
to be employed by the Company and/or its Subsidiaries (as defined below) or its
successors or assigns is referred to herein as the "Termination Date."
2. Position and Duties.
(a) During the Employment Period, Executive shall perform such duties for the
Company, its affiliates and its Subsidiaries as the Company's Chief
Executive Officer or other Company officer to whom Executive reports may
from time to time direct. Executive shall be a Vice President of the
Company.
(b) Executive shall initially report to the Company's President, but reporting
relationship may change as Company develops. Executive shall devote his
best efforts and his full business time and attention (except for permitted
vacation periods and reasonable periods of illness or other incapacity) to
the business and affairs of the Company, its affiliates and its
Subsidiaries. Executive shall perform his duties and responsibilities to
the best of his abilities in a diligent, trustworthy, businesslike and
efficient manner.
(c) For purposes of this Agreement, "Subsidiaries" shall mean any corporation
of which the securities having at least 50% of the voting power in electing
directors are, at the time of determination, owned by the Company, directly
or through one or more Subsidiaries.
3. Base Salary and Benefits.
(a) During the Employment Period, Executive's base salary shall be $100,000 per
annum or such higher rate as the Compensation Committee may designate from
time to time (the "Base Salary"), provided that the Base Salary shall be
subject to annual increases of no less than the increase in the Consumer
Price Index announced from time to time. The Base Salary shall be payable
in regular installments in accordance with the Company's general payroll
practices.
(b) The Company shall reimburse Executive for all reasonable expenses incurred
by him in the course of performing his duties under this Agreement which
are consistent with the Company's policies in effect from time to time with
respect to travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and documentation of
such expenses.
(c) In addition to the Base Salary, the Company shall award a bonus to
Executive following the end of each fiscal year during the Employment
Period based upon the Company's
achievement of operating goals during such fiscal year. The
percentage and goals shall be mutually agreed upon by the
Company and Executive prior to each such fiscal year. The
initial Bonus Plan for the partial fiscal year ending June 30,
1995, is attached as Appendix A.
(d) In addition to the Base Salary and any bonuses payable to Executive
pursuant to this paragraph, during the Employment Period Executive shall be
entitled to participate in all benefit plans adopted by Company for all or
a select group of its employees, including:
(I) term life insurance, health insurance and disability
insurance coverage,
(ii) participation in a stock option program approved by
the Board of the Company granting options for an
initial 12,000 shares of Common Stock of the Company
at $1.00 per share,
(iii) annual paid vacation in accordance with Company's
policies as from time to time established.
(e) The Company shall issue to Executive 10,000 shares of the Company's Common
Stock on the date hereof. Purchase price of the stock is $1.00 per share.
Company will receive payment by withholding $5,000 per year, plus interest,
from Executive's payroll check in equal amounts each pay period, in
accordance with a promissory note, bearing interest at the rate of 6.2% per
annum. If Executive is terminated prior to the second anniversary of the
date of this Agreement, Company shall have the right to purchase the stock
for Executive's purchase price, less any amount still owed the Company by
Executive. If Executive is terminated after the second anniversary but
prior to the fourth anniversary of the date of this Agreement, Company
shall have the right to purchase one half of the shares for Executive's
purchase price, less any amount still owed the Company by Executive.
4. Term.
(a) Unless renewed by the mutual agreement of the Company and Executive, the
Employment Period shall end on November 14, 1996, provided that (i) the
Employment Period shall terminate prior to such date upon Executive's
resignation, death or permanent disability or incapacity (as determined by
the Board in its good faith judgment) and (ii) the Employment Period may be
terminated by the Company at any time prior to such date For Cause (as
defined below) or Without Cause. The Employment Period is automatically
extended for successive years unless notice to the contrary is given not
later than ninety (90) days preceding November 14 of the final year of the
contract. In the event the Company is liquidated and has cumulative net
losses at the time of liquidation, this Agreement will terminate with the
Company having no further obligation to Executive, beyond January 3, 1996.
(b) If the Employment Period is terminated by the Company without Cause prior
to the second anniversary of the date of this Agreement, except in the
event of liquidation as outlined in 4(a), Executive shall be entitled to
receive his Base Salary, as in effect immediately prior to the Termination
Date, through the second anniversary of this Agreement, so long as
Executive has not breached the provisions of paragraphs 5, 6 and 7 hereof.
The Base Salary payments described in this paragraph 4(b) shall be payable
in regular installments in accordance with the Company's
general payroll practice. The amounts payable pursuant to this
paragraph 4(b) shall be reduced by the amount of any
compensation Executive receives with respect to any other
employment or consulting during the period prior to the second
anniversary hereof. Upon request from time to time, Executive
shall furnish the Company with a true and complete certificate
specifying any such compensation due to or received by him.
(c) If the Employment Period is terminated by the Company For Cause or is
terminated as a result of Executive's resignation or normal expiration of
the Agreement, Executive shall be entitled to receive only his Base Salary
through the Termination Date.
(d) All of Executive's rights to fringe benefits and bonuses hereunder (if any)
accruing after the termination of the Employment Period shall cease upon
termination.
(e) For purposes of this Agreement, "Cause" shall mean (i) the commission of a
felony or a crime involving moral turpitude or the commission of any other
act involving dishonesty, disloyalty or fraud with respect to the Company
or any of its Subsidiaries, (ii) conduct tending to bring the Company or
any of its Subsidiaries into substantial public disgrace or disrepute,
(iii) substantial and repeated failure to perform duties as reasonably
directed by the Company's Chief Executive Officer or other Company Officer
to whom Executive reports, (iv) gross negligence or willful misconduct with
respect to the Company or any of its Subsidiaries, or (v) any other
material breach of this Agreement, all of the above as determined solely by
the Chief Executive Officer of the Company.
5. Confidential Information. The Executive acknowledges that the information,
observations and data obtained by him while employed by the Company concerning
the business or affairs of the Company, any of its affiliates or any Subsidiary
("Confidential Information") are the property of the Company or such affiliate
or Subsidiary, as the case may be. Therefore, Executive agrees not to disclose
to any unauthorized person or use for Executive's own account any Confidential
Information without the prior written consent of the Board, unless and to the
extent that the aforementioned matters become generally known to and available
for use by the public other than as a result of Executive's acts or omissions to
act. Executive shall deliver to the Company at the termination of the Employment
Period, or at any other time the Company may request, all memoranda, notes,
plans, records, reports, computer tapes and software and other documents and
data (and copies thereof) relating to the Confidential Information, Work Product
or the business of the Company, any of its affiliates or any Subsidiary which
Executive may then possess or have under his control.
6. Inventions and Patents. Executive agrees that all inventions, innovations,
improvements, developments, methods, designs, analyses, drawings, reports, and
all similar or related information which relates to the Company's or any of its
Subsidiaries' actual or anticipated business, research and development or
existing or future products or services and which are conceived, developed or
made by Executive while employed by the Company and/or its Subsidiaries ("Work
Product") belong to the Company or such Subsidiary. Executive will promptly
disclose such Work Product to the Board and perform all actions reasonably
requested by the Board (whether during or after the Employment Period) to
establish and confirm such ownership (including, without limitation,
assignments, consents, powers of attorney and other instruments).
7. Non-Compete, Non-Solicitation.
(a) Executive acknowledges that in the course of his employment with the
Company he will become familiar with the information concerning the
Company, its affiliates, Subsidiaries and its predecessors and that his
services have been and will be of special, unique and extraordinary value
to the Company. Therefore, Executive agrees that, during the Employment
Period and for the period of two years thereafter, the Executive shall not
directly or indirectly own, manage, control, participate in, consult with,
render services for, or in any manner engage in any business competing with
the business of the Company or its Subsidiaries as such businesses exist or
are in process on the date of the termination of Executive's employment,
within any geographic area in which the Company, its affiliates or its
Subsidiaries engage or plan to engage in such businesses. Nothing herein
shall prohibit Executive from being a passive owner of not more than 2% of
the outstanding stock of any class of a corporation which is publicly
traded, so long a Executive has no active participation in the business of
such corporation.
(b) During the non-compete Period, executive shall not directly or indirectly
through another entity (i) induce or attempt to induce any employee of the
Company, any of its affiliates or any Subsidiary to leave the employ of the
Company or such affiliate or Subsidiary, or in any way interfere with the
relationship between the Company, any of its affiliates or any Subsidiary
and any employee thereof, (ii) hire any person who was an employee of the
Company, any of its affiliates or any Subsidiary at any time during the
Employment Period, or (iii) induce or attempt to induce any customer,
supplier, licensee or other business relation of the Company, any of its
affiliates or any subsidiary to cease doing business with the Company or
such affiliate or Subsidiary, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company, any of its affiliates or any Subsidiary.
(c) If Executive is terminated by the Company Without Cause or the Company is
liquidated, the Non-compete provisions of this Agreement will also
terminate upon the Termination Date or date of liquidation.
8. Enforcement. If, at the time of enforcement of paragraph 5, 6 or 7 of this
Agreement, a court holds that the restrictions stated herein are unreasonable
under circumstances then existing, the parties hereto agree that the maximum
period, scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area. Because Executive's services
are unique and because Executive has access to Confidential Information and Work
Produce, the parties hereto agree that money damages would be an inadequate
remedy for any breach of this Agreement. Therefore, in the event a breach or
threatened breach of this Agreement, the Company or its successors or assigns
may, in addition to other rights and remedies existing in their favor, apply to
any court of competent jurisdiction for specific performance and/or injunctive
or other relief in order to enforce, or prevent any violations of, the
provisions hereof (without posting a bond or other security).
9. Executive Representation. Executive hereby represents and warrants to the
Company that (i) the execution, delivery and performance of this Agreement by
Executive does not and will not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which Executive is a party or by which he is bound, (ii) Executive is not a
party to or bound by an employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity and (iii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms.
10. Survival. Paragraphs 5, 6 and 7 shall survive and continue in full
force in accordance with their
terms notwithstanding any termination of the Employment Period, unless such
termination was without cause.
11. Notices. Any notice provided for in this Agreement shall be in writing and
shall be either personally delivered, or mailed by first class mail, return
receipt requested, to the recipient at the Address indicated below:
Notice to Executive: 0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
Notices to Company: 000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or mailed.
12. Severability. Whenever possible, each provision of this Agreement will be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
13. Complete Agreement. This Agreement, those documents expressly referred to
herein and other documents of even date herewith embody the complete agreement
and understanding among the parties and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written
or oral, which may be related to the subject matter hereof in any way.
14. Counterparts. This Agreement may be executed in separate counterparts, each
of which is deemed to be in an original and all of which taken together
constitute one and the same agreement.
15. Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive, the Company and their respective
heirs, successors and assigns, except that Executive may not assign his rights
or delegate his obligations hereunder without the prior written consent of the
Company.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Texas, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of Texas or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Texas. In furtherance of the
foregoing, the internal law of the State of Texas shall control the
interpretation and construction of this Agreement, even though under that
jurisdiction's choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily apply.
17. Amendment and Waiver. The provisions of this Agreement may be amended or
waived only with the prior written consent of the Company and Executive, and no
course of conduct or failure or delay in enforcing the provisions of this
Agreement shall affect the validity, binding effect or enforceability of this
Agreement.
18. Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
19. No Strict Construction; Interpretation. The language used in this agreement
will be deemed to be the language chosen by the parties hereto to express their
mutual intent and no rule of strict construction will be applied against any
person. The term "including" as used in this Agreement is used to list items by
way of example and shall not be deemed to constitute a limitation of any term or
provision contained herein. As used in this Agreement, the singular or plural
number shall be deemed to include the other whenever the context so requires.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
ProMedCo, Inc.
BY: /s/ H. XXXXX XXXXX
H. Xxxxx Xxxxx
ITS: President and Chief Executive Officer
"Executive"
/s/ R. XXXX XXXXXXXX
R. Xxxx Xxxxxxxx
