EMPLOYMENT TERMINATION AGREEMENT
EMPLOYMENT TERMINATION AGREEMENT (this "Agreement"), dated as of February
25, 1999, by and between HealthCor Holdings, Inc., a Delaware corporation (the
"Company") and S. Xxxxx Xxxxxx ("Employee").
R E C I T A L S:
A. The Company and Employee are parties to that certain Employment
Agreement dated January 8, 1999 (the "Employment Agreement").
B. The Company and Employee desire to terminate Employee's employment with
the Company and to terminate the Employment Agreement, subject to the terms and
conditions hereof.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the receipt and sufficiency of which are hereby acknowledged,
the Company and Employee hereby agree as follows:
1. Termination of Employment; Resignation. Employee hereby tenders, and
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the Company hereby accepts, Employee's resignation from employment with the
Company. The provisions of this Section 1 shall be effective as of the date
hereof and the parties hereto hereby waive all applicable notices and waiting
periods for the termination of employment. Employee also hereby tenders his
resignation from all positions with the Company and its subsidiaries, including
membership on the board of directors of the Company and any of its subsidiaries.
2. Termination of Employment Agreement. The Employment Agreement is
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hereby terminated and cancelled. Except as expressly provided herein, no
provision of the Employment Agreement shall survive or be of any force or effect
after the date hereof, including, but not limited to, those provisions of the
Employment Agreement regarding its termination.
3. Benefits. In conjunction with Employee's resignation and the
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termination of the Employment Agreement, all benefits, payments, allowances and
other rights granted or paid by, from, or on behalf of, the Company to, or for
the benefit of, Employee, direct or indirect, under the Employment Agreement or
otherwise, shall continue until April 30, 1999 and shall thereupon terminate;
provided, however, that the Company shall continue to provide health insurance
benefits to Employee in accordance with the Company's policy and practice prior
to February 25, 1999, at the cost of the Company, for a period of 18 months from
March 1, 1999.
4. Release and Waiver.
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(a) In consideration of the agreements of the Company hereunder, the
Employee hereby acknowledges and agrees to release the Company of
all duties, obligations or liabilities arising under the
Employment Agreement. The Employee, on behalf of him and his
predecessors, successors,
affiliates, assigns, agents, attorneys, heirs, executors,
representatives and any other person or entity who has or could
potentially derive rights through him/her, hereby irrevocably and
unconditionally releases, waives, acquits and forever discharges,
and agrees to indemnify, defend and hold harmless, the Company and
its affiliates, predecessors, successors, assigns, stockholders,
officers, employees, directors, agents, attorneys and other
representatives, whether past, present or future, from and against
any and all claims, demands, costs, contracts, liabilities,
objections, suits, damages, losses, actions and causes of action
of any nature, type or description, whether at law or in equity,
in contract or tort, or otherwise, known or unknown, or suspected
or unsuspected, that Employee ever had or now has or may claim to
have against the Company, except for claims arising out of this
Agreement.
(b) In consideration of the Employee's agreements hereunder, the
Company hereby acknowledges and agrees to release Employee of all
duties, obligations or liabilities arising under the Employment
Agreement. The Company, on behalf of itself and its predecessors,
successors, affiliates, assigns, agents, stockholders, officers,
employees, directors, attorneys, representatives and any other
person or entity who has or could potentially derive rights
through it, hereby irrevocably and unconditionally releases,
waives, acquits and forever discharges, and agrees to indemnify,
defend and hold harmless, the Employee and his affiliates,
predecessors, successors, assigns, heirs, executors, agents,
attorneys and other representatives, whether past, present or
future, from and against any and all claims, demands, costs,
contracts, liabilities, objections, suits, damages, losses,
actions and causes of action of any nature, type or description,
whether at law or in equity, in contract or tort, or otherwise,
known or unknown, or suspected or unsuspected, that the Company
ever had or now has or may claim to have against Employee, except
for claims arising out of fraud and this Agreement.
5. Nonsolicitation.
(a) Employee hereby agrees that at any time prior to April 30, 2000,
Employee shall not, directly or indirectly,
(i) solicit any current employee, agent or representative to
terminate his or her relationship with the Company; or
(ii) solicit any current customers, dealers, distributors, vendors
or sources of supply to terminate or adversely change their
relationship with the Company.
(b) The Company shall have the right, subject to applicable law, to
inform any other third party that the Company reasonably believes
to be, or to be
contemplating, participating with Employee or receiving from
Employee assistance in violation of this Agreement, of the terms
of this Agreement and of the rights of the Company hereunder, and
that participation by any such third party with Employee in
activities in violation of this Section 5 may give rise to claims
by the Company against such third party.
6. Confidential Information. Employee shall not, directly or indirectly,
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reveal, divulge, disclose or otherwise make known to any person, firm or
corporation, any information ("Confidential Information") concerning any matters
affecting or relating to the business of the Company or its affiliates,
including, but not limited to, their manner of operation, any of their
customers, any confidential or proprietary records, customer lists, data, trade
secrets, plans, processes, specifications or opportunities which are the
property of the Company or its affiliates or were learned by Employee in the
course of his relationship with the Company, unless (i) such information has
become publicly available through no act or omission to act on the part of
Employee; (ii) such information was disclosed to Employee by third parties under
no duty of confidentiality to the Company or its affiliates; or (iii) Employee
is required to disclose such Confidential Information by subpoena or under the
order of a court of law. Employee shall give all physical manifestations of
Confidential Information and confidential or proprietary information of the
Company and its affiliates in his control or possession to the Company within
five days after the date hereof. Employee acknowledges all such items are and
remain the sole property of the Company.
7. Payments. In consideration for the termination of the Employment
Agreement and the covenants of the Employee contained herein, the Company agrees
to continue the current salary (calculated on a monthly basis to be Employee's
annual salary divided by 12) of Employee until April 30, 1999, payable at such
times as the Company regularly pays its executive officers. During such period,
upon reasonable prior notice, Employee shall be available during regular
business hours, except for any accrued vacation unpaid after giving effect to
the payment of the two weeks vacation provided for below (provided Employee will
be available for consultation by telephone during any such period), and shall
use his best reasonable efforts to assist Company management in the affairs and
operations of the Company, including review of periodic reports and filings
relating to periods ending prior to the date hereof. The Company also agrees to
pay Employee a sum equal to $144,510 on or before March 3, 1999 and to pay
Employee an additional $144,510 six (6) months from the date hereof. Any payment
required hereunder shall be subject to deductions for such items as required
under any applicable federal or state law, including without limitation,
federal, state and city withholding tax, Medicare and F.I.C.A. The Company
further agrees to pay to Employee two weeks of his accrued but unused vacation
time, calculated as of April 30, 1999. No payment will be made for any accrued
but unpaid sick days. The Company further agrees to transfer the property listed
on Exhibit A attached hereto to the Employee and to allow Employee to remove
such items from the Company. The Company agrees to treat all payments of
compensation hereunder as consulting fees for tax purposes, to the extent it may
lawfully do so, and it is tax efficient to Employee.
8. Consulting Services. During the period commencing May 1, 1999 and ending
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October 31, 1999, Employee agrees to provide consulting services upon the prior
request of, and subject to reasonable notice from, the Company. Such consulting
services shall be rendered in
Dallas, Texas at the headquarters of the Company. In addition to the consulting
payments in Section 7 above, the Company agrees to pay Employee the sum of
$187.50 per hour for each hour such consulting services are rendered.
9. Relief. Employee acknowledges and agrees that damages at law would be
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insufficient for breach of any of Employee's covenants in Sections 4, 5, and 6
of this Agreement. Accordingly, Employee agrees that in the event of a breach or
threatened breach by Employee any such provisions, the Company shall be entitled
to equitable relief in the form of an injunction to prevent irreparable injury.
10. Reformation. If any provision of this Agreement is held to be
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illegal, invalid or unenforceable under present or future laws effective during
the term hereof, in lieu of such illegal, invalid or unenforceable provision,
there shall be added automatically as a part of this Agreement a provision as
similar in terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable.
11. Further Assurances. From time to time, upon request, Employee and the
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Company shall, without further consideration, execute, deliver and acknowledge
all such further documents, instruments, releases, motions and orders as the
Company or Employee may reasonably require more effectively to evidence or
effectuate the transactions contemplated herein.
12. Waiver. The failure of any party to insist, in any one or more
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instances, upon performance of any of the terms, covenants or conditions of this
Agreement shall not be construed as a waiver or a relinquishment of any right or
claim granted or arising hereunder or of the future performance of any such
term, covenant, or condition, and such failure shall in no way affect the
validity of this Agreement or the rights and obligations of the parties hereto.
13. LAW GOVERNING. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS RULES OR CHOICE OF LAWS RULES THEREOF.
14. Assignment. This Agreement shall be binding upon and inure to the
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benefit of the parties hereto and their respective representatives, heirs,
executors, successors and permitted assigns. The parties hereto shall not be
permitted to assign any of their respective rights or obligations under this
Agreement without the prior written consent of the other party hereto; provided,
however, that the Company shall be permitted to assign its rights under this
Agreement without the prior written consent of Employee in connection with the
sale of all or substantially all of the Company's business (whether by asset
sale, sale of capital stock, merger or otherwise).
15. Press Release. The Company and Employee agree that the press release
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attached as Exhibit B hereto shall be the only communication issued to the
public in connection with the matters contemplated by this Agreement, subject to
compliance with applicable federal and state securities law.
16. Amendments. This Agreement may not be modified, amended or
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supplemented except by an agreement in writing signed by all parties.
17. Entire Agreement. This Agreement contains the entire understanding
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and agreement between the parties concerning the subject matter hereof and,
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with respect to such
subject matter, including, but not limited to, the Employment Agreement.
18. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same instrument.
19. American Express Credit Card. Employee will cancel his Company
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American Express credit card account as soon as practicable. Company shall pay
all Company charges thereon, and Employee shall pay all personal charges
thereon.
20. Business Expenses. Employee will submit all outstanding business
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expense vouchers as soon as practicable, and company will pay or reimburse
Employee for all reasonable business expenses.
21. Attorney Fees. The Company will pay Employee's legal fees not to
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exceed $3,500 for Employee and Employee's spouse in the aggregate.
22. Insurance and Indemnity. The Company will use its best efforts to
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maintain the current officers and directors insurance coverage as long as it is
reasonably available at a reasonable price, and in the event it expires or is
cancelled, the Company will use its best efforts to buy a tail insurance policy
as long as it is reasonably available at a reasonable price with the objective
of maintaining the same insurance coverage for Employee as for the rest of the
Board. The Company agrees to maintain whatever indemnity provisions are now
existing in its charter and bylaws for the benefit of Employee for six (6)
years. The Company and the Employee understand and agree that this Agreement
shall not be construed as a waiver, release or discharge of the rights and
obligations they have under Executive Liability and Indemnification Policy No.
8146-13-49D, including, but not limited to, coverage for Civil Action No. 3:98-
CV-0744-L, styled Xxxxx Xxxxxxx, et al. vs. HealthCor Holdings, Inc., et al.,
and pending in the United States District Court for the Northern District of
Texas.
IN WITNESS WHEREOF, the Company and Employee have executed this Agreement
as of the date first above written.
HealthCor Holdings, Inc.
By:
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Name:
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Title:
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S. Xxxxx Xxxxxx
