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EXHIBIT 10.2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(Xxxx Xxxxxxx Xxxxxxxx)
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is
made as of May 26, 2000 (the "Effective Date"), by and between Monarch Dental
Corporation, a Delaware corporation (the "Company"), and Xxxx Xxxxxxx Xxxxxxxx
(the "Executive").
WHEREAS, Company recognizes that Executive has made significant
contributions to the financial success of the Company, and that Executive has
certain knowledge and business contacts in Company's business;
WHEREAS, Company desires to continue Executive's employment and to
obtain the benefit of Executive's contacts and knowledge in the business as
well as her valuable judgment, extensive experience, good counsel and advice;
WHEREAS, to reward Executive for her contributions to the financial
success of the Company, to induce Executive to continue her employment with the
Company, and to encourage Executive to exert her very best efforts towards the
completion of a Transaction (as defined below), the Company has agreed to
provide Executive certain compensation, management arrangements, and incentives
as set forth in this Agreement;
WHEREAS, the Board of Directors of the Company has determined that it
is in the best interests of the Company to retain the Executive's services and
to reinforce and encourage the continued attention and dedication of members of
the Company's management, including the Executive, to their assigned duties
without distraction arising from the possibility of a change in control of the
Company; and
WHEREAS, the Company desires to assure itself of the services of the
Executive for the period provided in this Agreement and the Executive desires
to stay in the employ of the Company on the terms and conditions hereinafter
provided:
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties hereto agree as follows:
1. Employment. The Company agrees to employ the Executive and the
Executive agrees to be employed by the Company for the period and on the terms
and conditions set forth in this Agreement.
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2. Capacity. During the Term (as defined below), the Executive shall
serve the Company as Chief Financial Officer, reporting to the Chief Executive
Officer of the Company (the "CEO"), with authority, duties and responsibilities
not less than the Executive has on the date of this Agreement, with her actions
at all times subject to the direction of the CEO. The Executive hereby accepts
such employment, agrees to serve the Company in the capacities indicated, and
agrees to use her best efforts in, and shall devote her full working time,
attention, skill and energies to, the advancement of the interests of the
Company and its subsidiaries and the performance of her duties and
responsibilities hereunder.
3. Term. Subject to the provisions of Section 5 hereof, the term of
employment pursuant to this Agreement (the "Term") shall be four (4) years from
August 9, 1999, the Effective Date of the 1999 Employment Agreement; provided,
however, that this Agreement shall be extended automatically for successive
one-year periods ending on the relevant anniversary of the Effective Date of
the 1999 Employment Agreement, unless either party gives the other notice no
later than 180 days prior to the scheduled termination date (i.e., the fourth
anniversary of the Effective Date of the 1999 Employment Agreement or any later
anniversary) of her or its determination not to extend this Agreement,
whereupon it shall terminate as of such anniversary date.
4. Compensation and Benefits. The compensation and benefits payable to
the Executive under this Agreement shall be as follows:
(a) Salary. For all services rendered by the Executive under
this Agreement, the Company shall pay the Executive a salary (the "Salary") at
the annual rate of One Hundred Eighty-Two Thousand Five Hundred Dollars
($182,500), subject to increase from time to time in the discretion of the
Compensation Committee of the Board of Directors (the "Compensation
Committee"). The Salary shall be payable in periodic installments in accordance
with the Company's usual practice for its senior executives.
(b) Bonus. In addition to the Salary payable to the Executive
pursuant to subsection 4(a), during the Term, the Executive shall be eligible
to receive a bonus of up to 30% of her annual Salary based upon achievement (i)
by the Company of certain corporate and financial goals (the "Corporate Goals")
and (ii) by the Executive of certain management goals (the "Management Goals").
The Corporate Goals and Management Goals will be set in the sole discretion of
the Board of Directors of the Company acting in good faith. Nothing in this
subsection 4(b) shall be deemed to create any right of the Executive to receive
any bonus, such decision on the amount of a bonus, if any, to be made in the
sole and absolute discretion of the Board of Directors of the Company or a duly
appointed committee thereof. Notwithstanding any other provision in this
subsection or this Agreement, Executive shall receive a bonus for the Company's
2000 fiscal year of not less than 30% of her annual Salary. For the bonus year
of 2000 and thereafter, the Bonus shall be paid on the earlier to occur of the
Closing Date or a date which conforms to the Company's usual practice. If the
Bonus is paid on the Closing Date, the Bonus shall be prorated based on the
number of full or partial months to the Closing Date. If the Executive
continues in employment after the Closing Date, Executive shall
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receive an additional pro rata portion of the Bonus, based on the number of
full or partial months after the Closing Date, on a date which conforms to the
Company's usual practice.
(c) Retention Payment. The Executive shall be paid by the
Company retroactively to January 1, 2000, on the first day of each month,
provided Executive is employed by the Company on such date, a monthly retention
payment of $7,500.00 until the earlier to occur of the Closing Date or December
31, 2000. To effect such retroactivity, Executive is being paid in cash by the
Company contemporaneously with the execution of this Agreement the amount of
$37,500 (net of withholding taxes).
(d) Transaction Incentive Fee. Contemporaneously with, as a
part of, and as a condition to, the Transaction and, except as set forth in
subsection 5(h) hereto, provided Executive is employed by the Company on such
date and provided further the Closing Date occurs on or before March 31, 2002,
Executive shall be paid a Transaction incentive fee ("Transaction Fee") in lump
sum, cash, as provided below (with linear interpolation between share points):
Transaction Incentive Fee
Price Per Share (bps below times Total Equity Value)
--------------- ------------------------------------
$7.00 24 bps
$7.50 26 bps
$8.00 28 bps
$8.50 30 bps
$9.00 32 bps
The Transaction Fee will be equal to the Total Equity Value times the
applicable basis point figure. For any Transaction below $7.00, the Transaction
Fee will be 20 basis points multiplied by the Total Equity Value.
Notwithstanding the foregoing, in no event shall the Transaction Fee be less
than the amount determined as follows:
R = (S minus T) minus U, where:
R means the minimum Transaction Fee;
S means $370,000;
T means the aggregate retention payments paid to Executive under
subsection 4(c) hereof; and
U means the aggregate "spread" on the stock options granted under
subsection 4(e) hereof, outstanding as of the date of the
Transaction. The aggregate "spread" shall mean the positive
difference between the exercise price per share and X (as
defined in subsection 20(d) hereof), times the number of
options granted
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pursuant to subsection 4(e) hereof that remain outstanding as
of the date of the Transaction.
(e) Stock Options. In addition to options heretofore granted
to Executive in the 1999 Employment Agreement, and the Non-Qualified Stock
Option Agreement of even date therewith, the Company hereby grants the
Executive stock options to purchase 25,000 shares of the Company's common stock
at $2.4375 per share, in accordance with the terms and conditions of that
certain Stock Option Agreement dated as of May 8, 2000.
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(f) Certain Additional Payments by the Company.
Notwithstanding anything to the contrary in this Agreement, in the event that
any payment or distribution to or for the benefit of the Executive, whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, or
any interest or penalties with respect to such excise tax (such excise tax,
together with any such interest or penalties, are hereinafter collectively
referred to as the "Excise Tax"), the Company shall pay to the Executive an
additional payment (a "Gross-up Payment") in an amount such that after payment
by the Executive of all taxes upon such Gross-up Payment (including any
interest or penalties imposed with respect to such taxes), including any Excise
Tax imposed on any Gross-up Payment, the Executive retains an amount of the
Gross-up Payment equal to the Excise Tax imposed upon the Payments. (The
Gross-up Payment is not intended to compensate the Executive for any income
taxes payable with respect to the Payment.) All determinations required to be
made under this subsection 4(f), including whether a Gross-up Payment is
required and the amount of such Gross-up Payment, shall be made by Xxxxxx
Xxxxxxxx LLP or any other nationally recognized accounting firm selected by the
Company and Executive (the "Accounting Firm"), which shall provide detailed
supporting calculations both to the Company and the Executive as is reasonably
requested by the Company or the Executive. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive. The amount of the
Gross-up Payment shall be paid (in estimate) either contemporaneously with, as
a part of and as a condition, to the Closing, with the actual amount finally to
be determined, settled and paid by the Company to Executive or by Executive to
the Company, as the case may be, at the time of filing of the applicable
federal income tax return, or as otherwise provided in this Agreement. The
Executive shall notify the Company immediately in writing of any claim by the
Internal Revenue Service which, if successful, would require the Company to
make a Gross-up Payment (or a Gross-up Payment in excess of that, if any,
initially determined by the Accounting Firm) within five (5) days of the
receipt of such claim. The Company shall notify the Executive in writing at
least five days prior to the due date of any response required with respect to
such claim if it plans to contest the claim. If the Company decides to contest
such claim, the Executive shall cooperate fully with the Company in such
action; provided, however, the Company shall bear and pay directly or
indirectly all costs and expenses (including additional interest and penalties)
incurred in connection with such action and shall indemnify and hold the
Executive harmless, on an after-tax basis, for any Excise Tax or income tax,
including interest and penalties with respect thereto, imposed as a result of
the Company's action. If, as a result of the Company's action with respect to a
claim, the Executive receives a refund of any amount paid by the Company with
respect to such claim, the Executive shall promptly pay such refund to the
Company. If the Company fails to timely notify the Executive whether it will
contest such claim or the Company determines not to contest such claim, then
the Company shall immediately pay to the Executive the portion of such claim,
if any, which it has not previously paid to the Executive.
(g) Regular Benefits. During the Term, the Executive shall be
entitled to participate in any employee benefit plans, medical insurance plans,
life insurance plans, disability income plans, retirement plans and
arrangements, vacation plans, expense reimbursement plans and other benefit
plans which the Company may determine from time to
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time in its sole discretion to have in effect for all or most of its senior
executives. Such participation shall be subject to the terms of the applicable
plan documents, generally applicable policies of the Company, applicable law
and the discretion of the Board of Directors or any administrative or other
committee provided for in or contemplated by any such plan.
(h) Taxation of Payments and Benefits. The Company shall
undertake to make deductions, withholdings and tax reports with respect to
payments and benefits under this Agreement to the extent that it reasonably and
in good faith believes that it is required to make such deductions,
withholdings and tax reports. Payments under this Agreement shall be in amounts
net of any such deductions or withholdings. Except as set forth in subsection
4(f), nothing in this Agreement shall be construed to require the Company to
make any payments to compensate the Executive for any adverse tax effect
associated with any payments or benefits or for any deduction or withholding
from any payment or benefit.
(i) Exclusivity of Salary and Benefits. The Executive shall
not be entitled to any payments or benefits other than those provided under
this Agreement. Compliance with the provisions of this Section 4 shall in no
way create or be deemed to create any obligation, express or implied, on the
part of the Company or any of its affiliates with respect to the continuation
of any particular benefit or other plan or arrangement maintained by them or
their subsidiaries as of or prior to the date hereof or the creation and
maintenance of any particular benefit or other plan or arrangement at any time
after the date hereof.
(j) Expenses. The Company shall promptly reimburse the
Executive for all reasonable business expenses incurred by the Executive during
the Term in accordance with the Company's practices for executive officers of
the Company with a similar level of responsibility, as in effect from time to
time.
(k) Vacation. During the Term, the Employee shall receive
paid vacation annually in accordance with the Company's practices for executive
officers, as in effect from time to time, but in any event not less than three
(3) weeks during each 365 days of the Term.
5. Termination and Termination Benefits. Notwithstanding the
provisions of Section 3, the Executive's employment under this Agreement shall
terminate under the following circumstances set forth in this Section 5.
(a) Termination by the Company for Cause. The Executive's
employment under this Agreement may be terminated for cause without further
liability on the part of the Company effective immediately upon written notice
to the Executive by the Company. Only the following shall constitute "cause"
for such termination:
(i) willful gross misconduct by the Executive that
causes material economic harm to the Company or that brings
substantial discredit to the Company's reputation;
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(ii) final, nonappealable conviction of a felony
involving moral turpitude; or
(iii) the Executive shall commit a material breach
of any of the covenants, terms or provisions hereof, which breach has
not been remedied within sixty (60) days after delivery to the
Executive by the Company of written notice, specifying in reasonable
detail the basis therefor and stating that it is grounds for Cause.
The Executive shall be permitted to respond and to defend herself
before the Board of Directors or any appropriate committee thereof within a
reasonable time after written notification of any proposed termination for
Cause under item (i) or (iii) of this subsection.
Upon termination for Cause as provided in this subsection 5(a), the
Company shall have any and all rights and remedies under this Agreement and
applicable law in addition to its rights under subsection 5(m).
(b) Termination by the Company Without Cause. During the
Term, the Company may terminate the Executive's Employment Without Cause,
subject to the provisions of subsection 5(h) (Certain Termination Benefits).
Termination "Without Cause" shall mean termination of the Executive's
employment by the Company other than termination for Cause or for Disability or
by reason of the non-renewal of this Agreement, by either party, at the end of
the Term.
(c) Termination by the Executive for Good Reason. The
Executive may terminate her employment hereunder for Good Reason. For purposes
of this Agreement, the termination of Executive's employment hereunder by
Executive because of the occurrence of one or more of the following events
shall be deemed to have occurred for "Good Reason":
(i) any material breach of this Agreement by the
Company, provided, however, that a material breach of this Agreement
by the Company shall not constitute Good Reason unless the Executive
notifies the Company in writing of the breach, specifying in
reasonable detail the nature of the breach and stating that such
breach is grounds for Good Reason, and unless the Company fails to
cure such breach within sixty (60) days after such notice is sent or
given under this Agreement;
(ii) a relocation of the Company's principal
executive offices to any county other than Dallas County; provided,
however, that no relocation shall constitute Good Reason unless the
Executive advises the Board of Directors, in writing and prior to the
relocation, of the Executive's objection to such relocation;
(iii) a material change in the nature or scope of
Executive's authorities, powers, functions, duties or responsibilities
that the Executive has on the date of this Agreement and that is
reasonably determined by Executive in good faith to be adverse to
Executive (specifically including, but not limited to, a material
increase in travel); or
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(iv) any reduction in Executive's Salary or Bonus
compensation or any other failure by the Company to comply with
Section 4 hereof that is not consented to or approved by Executive.
(d) Termination by Executive upon a Change in Control. Upon a
Change in Control, the Executive may terminate this Agreement. For purposes of
this Agreement, "Change in Control" shall mean any of the following:
(i) any consolidation or merger of the Company in
which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's common stock would be
converted into cash securities or other property, other than a merger
of the Company in which the holders of the Company's common stock
immediately prior to the merger own more than 50% of the combined
voting power of the merged or consolidated company's then outstanding
voting securities entitled to vote generally in the election of
directors;
(ii) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of more than 50%
of the assets of the Company;
(iii) any approval by the stockholders of the
Company of any plan or proposal for the liquidation or dissolution of
the Company;
(iv) the cessation of control (by virtue of their
not constituting a majority of directors) of the Company's Board of
Directors by the individuals (the "Continuing Directors") who (x) at
the date of this Agreement were directors or (y) become directors
after the date of this Agreement and whose election or nomination for
election by the Company's stockholders was approved by a vote of at
least two-thirds of the directors then in office who were directors at
the date of this Agreement or whose election or nomination for
election was previously so approved; or
(v) the acquisition of beneficial ownership (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934,
as amended) of an aggregate of 50% or more of the voting power of the
Company's outstanding voting securities by any person or group (as
such term is used in Rule 13d-5 under such Act); provided, however,
that notwithstanding the foregoing, an acquisition shall not
constitute a Change in Control hereunder if the acquiror is (w) the
Executive, (x) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company and acting in such capacity,
or (y) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of voting securities of the Company;
(vi) subject to applicable law, in a Chapter 11
bankruptcy proceeding, the appointment of a trustee or the conversion
of a case involving the Company to a case under Chapter 7.
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(e) Termination by Executive Without Good Reason. During the
Term, the Executive may terminate her employment Without Good Reason.
Termination "Without Good Reason" shall mean termination of the Executive's
employment by the Executive other than Termination for Good Reason.
(f) Explanation of Termination of Employment. Any party
terminating this Agreement shall give prompt written notice ("Notice of
Termination") to the other party hereto advising such other party of the
termination of this Agreement. Within five (5) days after notification that the
Agreement has been terminated, the terminating party shall deliver to the other
party hereto a written explanation (the "Explanation of Termination of
Employment"), which shall state in reasonable detail the basis for such
termination and shall indicate whether termination is being made With Cause,
Without Cause or for Disability (if the Company has terminated the Agreement)
or for Good Reason, a Change in Control or Without Good Reason (if the
Executive has terminated the Agreement).
(g) Date of Termination. "Date of Termination" shall mean the
date on which Notice of Termination is sent or given under this Agreement.
(h) Certain Termination Benefits. Unless otherwise
specifically provided in this Agreement or otherwise required by law, all
compensation and benefits payable to the Executive under this Agreement shall
terminate on the date of termination of the Executive's employment under this
Agreement. Notwithstanding the foregoing, in the event of termination of the
Executive's employment with the Company pursuant to subsection 5(b)
(Termination of the Company Without Cause) or 5(c) (Termination by the
Executive for Good Reason) above, the Company shall, in addition to any
Gross-up Payment under subsection 4(f) (Certain Additional Payments by the
Company), (i) pay to the Executive as severance pay, at Executive's option in a
lump sum or as a continuation of compensation in accordance with this
Agreement, Executive's total compensation hereunder for a twelve-month period
beginning on the date on which such termination takes place, including without
limitation under subsections 4(a) (Salary) and 4(b) (Bonus) and (ii) continue
for the 12-month period beginning on the date on which such termination takes
place, group health plan benefits to the extent authorized by and consistent
with 29 U.S.C. Section 1161 et seq. (commonly known as "COBRA"), with the cost
of the regular premium for such benefits shared in the same relative proportion
by the Company and the Executive as in effect on the date of termination.
Notwithstanding the foregoing, if, at the time of such termination by the
Company Without Cause or termination by the Executive for Good Reason, the
Company is in discussion with a person or entity regarding a Transaction, and
such discussion results in the consummation of a Transaction, or execution of a
definitive agreement regarding a Transaction, within 15 months of such
termination then the Executive shall also receive the Transaction Fee under
subsection 4(d) upon the closing of the Transaction, provided such consummation
of a Transaction, or execution of a definitive agreement regarding a
Transaction, as the case may be, occurs on or before March 31, 2002.
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The parties hereto agree that the Termination Benefits are to be in full
satisfaction, compromise and release of any claims arising out of any
termination of the Employee's employment pursuant to subsections 5(b) or 5(c),
and in either case with such amounts to be contingent upon the Employee's
delivery upon termination of employment of a general release of any and all
claims arising out of facts or circumstances which occurred prior to the date
of such termination in a form reasonably satisfactory to the Company, it being
understood that no Termination Benefits shall be provided unless and until the
Employee determines to execute and deliver such release.
(i) No Mitigation. The Executive shall not be required to
mitigate the amount of payment provided for in subsection 5(h) by seeking other
employment or otherwise.
(j) Reduction in Compensation. If the Executive terminates
her employment for Good Reason based upon a reduction by the Company of the
Executive's Salary or Bonus Compensation, then for purposes of calculating the
Termination Benefits under subsection 5(h), the Executive's Salary as of the
Date of Termination shall be deemed to be the Executive's Salary immediately
prior to the reduction that the Executive claims as grounds for Good Reason or
Change in Control.
(k) Disability. Upon the permanent disability (as defined
below) of the Executive continuing for a period in excess of one hundred eighty
(180) consecutive days, all obligations of the Company under this Agreement
shall immediately terminate other than any obligation of the Company with
respect to earned but unpaid Salary and Regular Benefits contemplated hereby to
the extent accrued or vested through the date of termination. As used herein,
the terms "permanent disability" or "permanently disabled" shall mean the
inability of the Executive, by reason of injury, illness or other similar
cause, to perform essential functions of her position as described in Section 2
above, as determined reasonably and in good faith by the Company. Nothing in
this subsection 5(k) shall be construed to waive the Executive's rights, if
any, under existing law including, without limitation, the Family and Medical
Leave Act of 1993, 29 U.S.C. Section 2601 et seq. and the Americans with
Disabilities Act, 42 U.S.C. Section 12101 et seq.
(l) Death of Executive. If the Executive dies prior to the
expiration of this Agreement, the Executive's employment and other obligations
under this Agreement shall automatically terminate and all compensation to
which the Executive is or would have been entitled hereunder, including without
limitation under subsections 4(a) (Salary) and 4(b) (Bonus), but excluding
compensation under subsections 4(c) (Retention Payment) and 4(d) (Transaction
Incentive Fee), shall terminate as of the end of the month in which the
Executive's death occurs; provided, however, that the Executive's named
beneficiary or beneficiaries shall receive such reimbursement as may have been
due to the Executive pursuant to subsection 4(h) (Expenses) hereof.
Notwithstanding the foregoing, if, at the time of Executive's death, the
Company is in discussion with a person or entity regarding a Transaction, and
such discussion results in the consummation of a Transaction, or execution of a
definitive agreement regarding a Transaction, within 15 months after the
Executive's death,
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then the Executive shall also receive the Transaction Fee under subsection 4(d)
upon the closing of the Transaction.
(m) Non-Competition and Related Agreements. Notwithstanding
termination of this Agreement as provided in this Section 5 or any other
termination of the Executive's employment with the Company, the Executive's
obligations under Section 6 hereof shall survive any termination of the
Executive's employment with the Company at any time and for any reason as
provided therein.
6. Non-Competition; Confidential Information and Cooperation.
(a) Non-Competition; Non-Solicitation. Executive recognizes
that if she were to attempt to perform as an employee of a competitor of the
Company, there would be a genuine and inevitable threat that Executive would
use or disclose Confidential Information. Therefore, and in consideration for
Executive's employment by the Company under the terms provided in this
Agreement and as a means to aid in the performance and enforcement of the terms
of the confidentiality provisions of Paragraph 6(c), the Executive hereby
agrees that during the period commencing on the date hereof and ending on the
date which is the first anniversary of the date on which the Executive's
employment with the Company terminates (the "Noncompetition Period"), the
Executive will not, without the express written consent of the Company,
directly or indirectly, anywhere in the United States, engage in any activity
which is, or participate or invest in, or provide or facilitate the provision
of financing to, or assist (whether as owner, part-owner, shareholder, member,
partner, director, officer, trustee, employee, agent or consultant, or in any
other capacity), any business, organization or person other than the Company
(or any subsidiary or affiliate of the Company), and including any such
business, organization or person involving, or which is, a family member of the
Executive, whose business, activities, products or services are competitive
with any of the business, activities, products or services conducted or offered
by the Company or its subsidiaries or affiliates during any period in which the
Executive serves as an officer or employee of the Company or any of its
subsidiaries or affiliates, which business, activities, products and services
shall include in any event and without limitation consulting services regarding
information systems relating to the management of dental practices. Without
implied limitation, the foregoing covenant shall be deemed to prohibit (a)
hiring or engaging or attempting to hire or engage for or on behalf of the
Executive or any such competitor any officer or employee of the Company or any
of its direct and/or indirect subsidiaries and affiliates, or any former
employee of the Company and any of its direct and/or indirect subsidiaries and
affiliates who was employed during the six (6) month period immediately
preceding the date of such attempt to hire or engage, (b) encouraging for or on
behalf of the Executive or any such competitor any such officer or employee to
terminate his or her relationship or employment with the Company or any of its
direct or indirect subsidiaries and affiliates, (c) soliciting for or on behalf
of Executive or any such competitor any client of the Company or any of its
direct or indirect subsidiaries and affiliates, or any former client of the
Company or any of its direct or indirect subsidiaries and affiliates who was a
client during the six (6) month period immediately preceding the date of such
solicitation and (d) diverting to
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any person (as hereinafter defined) any client or business opportunity of the
Company or any of its direct or indirect subsidiaries and affiliates.
Notwithstanding anything herein to the contrary, the Executive may
make passive investments in any enterprise the shares of which are publicly
traded if such investment constitutes less than one percent (1%) of the equity
of such enterprise.
Neither the Executive nor any business entity controlled by the
Executive is a party to any contract, commitment, arrangement or agreement
which could, following the date hereof, restrain or restrict the Company or any
subsidiary or affiliate of the Company from carrying on its business or
restrain or restrict the Executive from performing his employment obligations,
and as of the date of this Agreement the Executive has no business interests
whatsoever in or relating to the industries in which the Company or its
subsidiaries or affiliates currently engage and other than passive investments
in the shares of public companies of less than one percent (1%).
(b) Confidential Information. As used in this Agreement,
"Confidential Information" means information belonging to the Company which is
of value to the Company in the course of conducting its business and the
disclosure of which could result in a competitive or other disadvantage to the
Company. Confidential Information includes, without limitation, financial
information, reports, and forecasts; inventions, improvements and other
intellectual property; trade secrets; know-how; designs, processes or formulae;
software; market or sales information or plans; customer lists; and business
plans, prospects and opportunities (such as possible acquisitions or
dispositions of businesses or facilities) which have been discussed or
considered by the management of the Company. Confidential Information includes
information developed by the Executive in the course of the Executive's
employment by the Company, as well as other information to which the Executive
may have access in connection with the Executive's employment. Confidential
Information also includes the confidential information of others with which the
Company has a business relationship. Notwithstanding the foregoing,
Confidential Information does not include information in the public domain,
unless due to breach of the Executive's duties under Section 6(c).
(c) Confidentiality. The Executive understands and agrees
that her employment creates a relationship of confidence and trust between the
Executive and the Company with respect to all Confidential Information.
Executive acknowledges that in the course of her employment with the Company,
she will be allowed to become acquainted with the Company's Confidential
Information. The Company agrees to provide on an ongoing basis such
Confidential Information as the Company deems necessary or desirable to aid
Executive in the performance of her duties. At all times, both during the
Executive's employment with the Company and after her termination, the
Executive will keep in confidence and trust all such Confidential Information,
and will not use or disclose any such Confidential Information without the
written consent of the Company, except as may be necessary in the ordinary
course of performing the Executive's duties to the Company.
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(d) Inventions. The Executive recognizes that the Company and
its affiliates possess a proprietary interest in all of the Confidential
Information and have the exclusive right and privilege to use, protect by
copyright, patent or trademark, or otherwise exploit the processes, ideas and
concepts described therein to the exclusion of the Executive, except as
otherwise agreed between the Company and the Executive in writing. The
Executive expressly agrees that any products, inventions, discoveries or
improvements made by the Executive or her agents or affiliates in the course of
the Executive's employment, including any of the foregoing which is based on or
arises out of the Confidential Information, shall be the property of and inure
to the exclusive benefit of the Company. The Executive further agrees that any
and all products, inventions, discoveries or improvements developed by the
Executive (whether or not able to be protected by copyright, patent or
trademark) during the course of her employment, or involving the use of the
time, materials or other resources of the Company or any of its affiliates,
shall be promptly disclosed to the Company and shall become the exclusive
property of the Company, and the Executive shall execute and deliver any and
all documents necessary or appropriate to implement the foregoing.
(e) Business Opportunities. The Executive agrees, while she
is employed by the Company, to offer or otherwise make known or available to
it, as directed by the Board of Directors of the Company and without additional
compensation or consideration, any business prospects, contracts or other
business opportunities that she may discover, find, develop or otherwise have
available to her in any field in which the Company or its affiliates are
engaged or propose to be engaged, and further agrees that any such prospects,
contacts or other business opportunities shall be the property of the Company.
(f) Documents, Records, etc. All documents, records, data,
apparatus, equipment and other physical property, whether or not pertaining to
Confidential Information, which are furnished to the Executive by the Company
or are produced by the Executive in connection with the Executive's employment
will be and remain the sole property of the Company. The Executive will return
to the Company all such materials and property as and when requested by the
Company. In any event, the Executive will return all such materials and
property immediately upon termination of the Executive's employment for any
reason. The Executive will not retain with the Executive any such material or
property or any copies thereof after such termination.
(g) Third-Party Agreements and Rights. The Executive hereby
confirms that the Executive is not bound by the terms of any agreement with any
previous company or other party which restricts in any way the Executive's use
or disclosure of information or the Executive's engagement in any business. The
Executive represents to the Company that the Executive's execution of this
Agreement, the Executive's employment with the Company and the performance of
the Executive's proposed duties for the Company will not violate any
obligations the Executive may have to any such previous company or other party.
In the Executive's work for the Company, the Executive will not disclose or
make use of any information in violation of any agreements with or rights of
any such previous company or other party, and the Executive will not bring to
the premises of the Company any copies or
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other tangible embodiments of non-public information belonging to or obtained
from any such previous employment or other party.
(h) Litigation and Regulatory Cooperation. During and after
the Executive's employment, the Executive shall cooperate fully with the
Company in the defense or prosecution of any claims or actions now in existence
or which may be brought in the future against or on behalf of the Company which
relate to events or occurrences that transpired while the Executive was
employed by the Company. The Executive's full cooperation in connection with
such claims or actions shall include, but not be limited to, being available to
meet with counsel to prepare for discovery or trial and to act as a witness on
behalf of the Company at mutually convenient times. During and after the
Executive's employment, the Executive also shall cooperate fully with the
Company in connection with any investigation or review of any federal, state or
local regulatory authority as any such investigation or review relates to
events or occurrences that transpired while the Executive was employed by the
Company. The Company shall reimburse the Executive for any reasonable
out-of-pocket expenses incurred in connection with the Executive's performance
of obligations pursuant to this subsection 6(h).
(i) Injunction. The Executive agrees that it would be
difficult to measure any damages caused to the Company which might result from
any breach by the Executive of the promises set forth in this Section 6, and
that in any event money damages would be an inadequate remedy for any such
breach. Accordingly, subject to Section 8 of this Agreement, the Executive
agrees that if the Executive breaches, or proposes to breach, any portion of
this Agreement, the Company shall be entitled, in addition to all other
remedies that it may have, to an injunction or other appropriate equitable
relief, including, without limitation, specific performance, to restrain any
such breach without posting bond or showing or proving any actual damage to the
Company.
7. Indemnification. The Company and the Executive will execute an
Indemnification Agreement which provides the same terms and conditions as
similar agreements between the Company and its directors. The stated purpose of
the Indemnification Agreement shall be to provide greater indemnification than
that which is afforded by the Company's charter, by-laws and, to the extent
insurance is available, the coverage of Executive under the Company's directors
and officers liability insurance policies.
8. Dispute Resolution. Any controversy or claim arising out of or
relating to this Agreement or the breach thereof or otherwise arising out of
the Executive's employment or the termination of that employment (including,
without limitation, any claims of unlawful employment discrimination whether
based on age or otherwise) shall, to the fullest extent permitted by law, be
settled by arbitration under the auspices of the American Arbitration
Association ("AAA") in Dallas, Texas in accordance with the Employment Dispute
Resolution Rules of the AAA, including, but not limited to, the rules and
procedures applicable to the selection of arbitrators. The arbitrators shall be
governed by the United States Arbitration Act, 9 U.S.C. Section Section 1-16.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. This Section 8 shall be specifically enforceable.
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Notwithstanding anything to the contrary contained herein, the
provisions of this Section 8 shall not apply with regard to any equitable
remedies to which any party may be entitled hereunder.
Each of the parties hereto (a) hereby irrevocably submits to the
jurisdiction of the United States District Court for the Northern District of
Texas and the courts of general jurisdiction of the State of Texas in Dallas
county, Texas for all disputes hereunder including for the purposes of
enforcing the award or decision in any arbitration proceeding under this
Section 8, (b) hereby waives, and agrees not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding, any claim that
it is not subject personally to the jurisdiction of the above-named courts,
that the suit, action or proceeding is brought in an inconvenient forum, or
that the venue of the suit, action or proceeding is improper. Each of the
parties hereto hereby consents to service of process by registered mail at the
address to which notices are to be given. Each of the parties hereto agrees
that its or her submission to jurisdiction and its or her consent to service of
process by mail is made for the express benefit of the other parties hereto.
Final judgment against any party hereto in any such action, suit or proceeding
may be enforced in other jurisdictions by suit, action or proceeding on the
judgment, or in any other manner provided by or pursuant to the laws of such
other jurisdiction; provided, however, that any party hereto may at its or her
option bring suit or institute other judicial proceedings, in any state or
federal court of the United States or of any country or place where the other
parties or their assets, may be found.
9. Integration. Except as provided herein, this Agreement constitutes
the entire agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements between the parties with respect to
any related subject matter.
10. Assignment; Successors and Assigns, etc. Neither the Company nor
the Executive may make any assignment of this Agreement or any interest herein,
by operation of law or otherwise, without the prior written consent of the
other party; that the Company may assign its rights under this Agreement
without the consent of the Executive in the event that the Company shall effect
a reorganization, consolidate with or merge into any other corporation,
partnership, organization or other entity, or transfer all or substantially all
of its properties or assets to any other corporation, partnership, organization
or other entity. This Agreement shall inure to the benefit of and be binding
upon the Company and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns.
11. Enforceability. If any portion or provision of this Agreement
(including, without limitation, any portion or provision of any section of this
Agreement) shall to any extent be declared illegal or unenforceable by a court
of competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as
to which it is so declared illegal or unenforceable, shall not be affected
thereby, and each portion and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
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12. Waiver. No waiver of any provision hereof shall be effective
unless made in writing and signed by the waiving party. The failure of any
party to require the performance of any term or obligation of this Agreement,
or the waiver by any party of any breach of this Agreement, shall not prevent
any subsequent enforcement of such term or obligation or be deemed a waiver of
any subsequent breach.
13. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by a nationally recognized overnight courier service or by
registered or certified mail, postage prepaid, return receipt requested, to the
Executive at the last address the Executive has filed in writing with the
Company or, in the case of the Company, at its main offices, attention of the
President and/or Secretary, and shall be effective on the date received.
14. Amendment. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized
representative of the Company.
15. Governing Law. This contract shall be construed under and be
governed in all respects by the laws of the State of Texas, without giving
effect to the conflict of laws principles thereof.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be taken to be
an original; but such counterparts shall together constitute one and the same
document.
17. Period of Limitations. No legal action shall be brought and no
cause of action shall be asserted by or on behalf of the Company or any
affiliate of the Company against the Executive, the Executive's spouse, heirs,
executors or personal or legal representatives after the expiration of two (2)
years from the date of accrual of such cause of action, and any claim or cause
of action of the Company or any affiliate shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within such
two-year period; provided, however, that if any shorter period of limitations
is otherwise applicable to any such cause of action, such shorter period shall
govern.
18. Legal Fees. If Executive seeks to enforce the provisions of
Sections 4 and 5 of this Agreement , then all of her reasonable legal fees and
expenses shall be paid and indemnified by the Company to Executive as they come
due upon presentation thereof (with supporting detail) by Executive to the
Company. All reasonable legal fees (not to exceed $7,000 in the aggregate) and
expenses incurred by Executive in connection with the negotiation and execution
of this Agreement shall be paid or reimbursed to Executive by the Company.
19. 1999 Employment Agreement. This Agreement shall supersede and
replace in all respects the 1999 Employment Agreement.
20. Defined Terms. As used herein, the following terms shall have the
following meanings:
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(a) "1999 Employment Agreement" shall mean that Employment
Agreement between Monarch Dental Corporation and Xxxx Xxxxxxx Xxxxxxxx dated as
of August 9, 1999.
(b) "Transaction" shall mean any transaction described in
subsection 5(d)(i), (ii) or (v).
(c) "Closing Date" shall mean the date upon which a
Transaction is closed.
(d) "Total Equity Value," for purposes of calculating the
Transaction Fee with respect to a Transaction, shall mean:
V = W times X, where:
V means the Total Equity Value;
W means total number of shares of the Company's equity
securities outstanding at the time of the
Transaction on a fully diluted basis to be
determined by the Accounting Firm in accordance with
Generally Accepted Accounting Principles under the
terms of the second sentence of subsection 4(f)
hereof; and
X means the per share value received by any holder of the
Company's equity securities who sells, exchanges,
converts, or otherwise disposes of shares held
thereby under and/or pursuant to the Transaction.
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IN WITNESS WHEREOF, this Employment Agreement has been executed as a
sealed instrument by the Company, by its duly authorized officer, and by the
Executive, as of the Effective Date.
COMPANY:
MONARCH DENTAL CORPORATION
By: /s/ XXXXX XXXXXXXX
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Xxxxx Xxxxxxxx, By Direction of the Special
Committee of the Board of Directors
EXECUTIVE:
/s/ XXXX XXXXXXX XXXXXXXX
-------------------------------------------
Xxxx Xxxxxxx Xxxxxxxx
