EMPLOYMENT AGREEMENT
Exhibit 10.8
This EMPLOYMENT AGREEMENT is made and entered into as of this 16th day of January, 2006, by
and among Chronic Care Solutions Holding, Inc., a Delaware corporation (“Holdings”), CCS
Acquisition, Inc., a Delaware corporation (“CCS,” and together with Holdings, the
“Company”), and Xxxxxxx X’Xxxxxx (“Employee”).
W I T N E S S E T H:
WHEREAS, Employee is currently employed by DEGC, with such employment governed by the Prior
Agreement; and
WHEREAS, in connection with the transactions contemplated under the Merger Agreement,
Chronic Care Solutions will become a wholly-owned subsidiary of CCS; and
WHEREAS, in connection with the transactions contemplated under the Merger Agreement, the
Company desires to employ Employee and to enter into an agreement embodying the terms of such
employment (this “Agreement”) and Employee desires to enter into this Agreement and to
accept such employment, subject to the terms and provisions of this Agreement.
Section 1. Definitions.
(a) “409A Outside Date” shall have the meaning set forth in Section 8(d)(iv) below.
(b) “Accrued Obligations” shall mean (i) all accrued but unpaid Base Salary through
the date of termination of Employee’s employment; (ii) any unpaid or unreimbursed expenses incurred
in accordance with Company policy, including amounts due under Section 7 hereof to the extent
incurred prior to termination of employment; and (iii) any benefits provided under the Company’s
employee benefit plans upon a termination of employment, in accordance with the terms therein,
including rights to equity in the Company pursuant to any plan or grant.
(c) “Affiliate” shall mean, as to any Person, any other Person that controls, is
controlled by, or is under common control with, such Person.
(d) “Agreement” shall have the meaning set forth in the preamble hereto.
(e) “Annual Bonus” shall have the meaning set forth in Section 4(b) below.
(f) “Base Salary” shall mean the salary provided for in Section 4(a) or any increased
salary granted to Employee pursuant to Section 4(a) below.
(g) “Board” shall mean the Board of Directors of Holdings.
(h) “Cause” shall mean (i) acts of personal dishonesty, gross negligence or
willful misconduct by Employee in connection with Employee’s employment duties; (ii) failure,
neglect or refusal by Employee to perform in any material respect his duties or responsibilities
under this Agreement; (iii) misappropriation by Employee of the assets or business opportunities of
the Company or its affiliates; (iv) embezzlement or other financial fraud committed by Employee, at
his direction, or with his personal knowledge; (v) Employee’s indictment for, conviction of,
admission to, or entry of pleas of no contest to any felony or any crime involving moral turpitude;
(vi) public or consistent drunkenness by Employee or his illegal use of narcotics which is, or
could reasonably be expected to become, materially injurious to the reputation or business of the
Company or its affiliates or which impairs, or could reasonably be expected to impair, the
performance of Employee’s duties hereunder; or (vii) Employee’s breach of any material provision of
this Agreement.
(i) “CCS” shall have the meaning set forth in the preamble hereto.
(j) “Change in Control” means (i) acquisition by any “person” or “group”
(within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor
provision) (other than an employee benefit plan of Holdings or its Affiliates, the Warburg
Investors or any of their respective Affiliates, or any underwriter in connection with an offering
of the Company’s securities), by way of merger, consolidation or other business combination or
purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any
successor provision), directly or indirectly, of 50% or more of the total voting power of Holdings’
securities outstanding immediately after such acquisition; (ii) consummation of a reorganization,
merger or consolidation of Holdings with any person other than Holdings or its Affiliates, the
Warburg Investors or any of their respective Affiliates (a
“Business Combination”), in
each case, in which the Warburg Investors retain, directly or indirectly, less than 50% of the then
outstanding voting securities entitled to vote generally in the election of directors of the
corporation resulting from such Business Combination (including, without limitation, a corporation
which as a result of such transaction owns Holdings or all or substantially all of its assets
either directly or through one or more subsidiaries); or (iii) the sale, lease, transfer or other
conveyance, in one or a series of related transactions, of all or substantially all of the assets
of Holdings and its subsidiaries, taken as a whole, to any person or group (within the meaning of
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) other than
the Warburg Investors or any their respective Affiliates.
(k) “Chronic Care Solutions” shall mean Chronic Care Solutions, Inc., a
Delaware corporation.
(1) “Closing Date” shall have the meaning set forth in the Merger
Agreement.
(m) “Company” except as otherwise expressly set forth herein, shall have the
meaning set forth in the preamble hereto.
(n) “Competitive Activities” shall mean any business activities in which the
Company or any of its subsidiaries are engaged (or have committed plans to engage) during the Term
of Employment, or, following termination of Employee’s employment hereunder, was engaged in
business (or had committed plans to engage) at the time of such termination of employment.
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(o) “Confidential Information” shall have the meaning set forth in Section
9(a) below.
(p) “DEGC” shall mean DEGC Enterprises (U.S.), Inc., a Florida corporation and
subsidiary of Chronic Care Solutions.
(q) “Developments” shall have the meaning set forth in Section 9(d)
below.
(r) “Disability” shall mean any physical or mental disability or infirmity that
prevents the performance of Employee’s duties for a period of (i) ninety (90) consecutive days or
(ii) one hundred twenty (120) non-consecutive days during any twelve (12) month period. Any
question as to the existence, extent or potentiality of Employee’s Disability upon which Employee
and the Company cannot agree shall be determined by a qualified, independent physician selected by
the Company and approved by Employee (which approval shall not be unreasonably withheld). The
determination of any such physician shall be final and conclusive for all purposes of this
Agreement.
(s) “Employee” shall have the meaning set forth in the preamble
hereto.
(t) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.
(u) “Good Reason” shall mean, without Employee’s consent, (i) a substantial and
material diminution in Employee’s title, duties or responsibilities; (iii) any reduction in Base
Salary or target Annual Bonus opportunity (other than an across-the-board reduction applicable to
all other senior executives of the Company); (iv) the relocation of Employee’s principal place of
employment (as provided in Section 3(c) hereof) more than fifty (50) miles from its current
location; or (v) any breach by the Company of any material provision of this Agreement.
(v) “Holdings” shall have the meaning set forth in the preamble
hereto.
(w) “Incentive Plan” shall mean the stock incentive plan established by
Holdings on, or as soon as practicable following, the Closing Date.
(x) “Interfering Activities” shall mean (i) encouraging, soliciting or inducing,
or in any manner attempting to encourage, solicit or induce, any Person employed by, as agent of,
or a service provider to, the Company or any subsidiary thereof to terminate (or, in the case of an
agent or service provider, reduce) such Person’s employment, agency or service, as the case may be,
with the Company or such subsidiary; provided, that the foregoing shall not be violated by general
advertising not targeted at employees of the Company nor by serving as a reference upon an
employee’s request with regard to an entity with which Employee is not affiliated; or (ii)
encouraging, soliciting or inducing, or in any manner attempting to encourage, solicit or induce
any customer, supplier, licensee or other business relation of the Company or any subsidiary
thereof to cease doing business with or reduce the amount of business conducted with (including by
providing similar services or products to any such Person) the Company or such subsidiary, or in
any way interfere with the relationship between any such customer, supplier, licensee or business
relation and the Company or such subsidiary.
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(y) “Merger Agreement” shall mean that certain Agreement and Plan of
Merger, made and entered into August 30, 2005, among CCS Acquisition, Inc., a Delaware
corporation, Merger Sub and the Company.
(z) “Merger Sub” shall mean CCS Merger Sub, Inc., a Delaware corporation.
(aa) “Person” shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust (charitable or
non-charitable), unincorporated organization or other form of business entity.
(bb) “Prior Agreement” shall mean that certain employment agreement between
Employee and MP TotalCare.
(cc) “Restricted Area” means any State of the United States of America or any
other jurisdiction in which the Company or its subsidiaries engage (or have committed plans to
engage) in business during the Term of Employment, or, following termination of Employee’s
employment, was engaged in business (or had committed plans to engage) at the time of such
termination of employment.
(dd) “Restricted Period” shall mean the period commencing on the Closing Date and
ending on the twelve (12) month anniversary of Employee’s termination of employment hereunder for
any reason.
(ee) “Severance Multiplier” shall mean an amount equal to one (1).
(ff) “Severance Term” shall mean the twelve (12) month period following the date
of Employee’s termination of employment hereunder.
(gg) “Term of Employment” shall mean the period specified in Section 2
below.
(hh) “Time Vested Restricted Stock” shall mean shares of restricted common stock
of Holdings granted to Employee pursuant to the terms of the Incentive Plan which are designated as
“Time Vested Restricted Stock” in Employee’s award agreement.
(ii) “Warburg Investors” shall mean Warburg Pincus Private Equity IX, L.P. and
any other related fund of Warburg Pincus & Co. that holds equity securities of Holdings.
Section 2. Acceptance and Term of Employment.
The Company agrees to employ Employee and Employee agrees to serve the Company on the terms
and conditions set forth herein. The Term of Employment shall commence on the Closing Date and
shall continue until Employee is terminated as provided in Section 8 hereof.
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Section 3. Position, Duties and Responsibilities; Place of Performance.
(a) During the Term of Employment, Employee shall be employed and serve as the Chief Operating
Officer — Specialty Products Division of CCS Medical (together with such other position or
positions consistent with Employee’s title as the Board shall specify from time to time) and shall
have such duties typically associated with such title. Subject to the foregoing, Employee also
agrees to serve as an officer and/or director of the Company or any parent or subsidiary of the
Company, in each case without additional compensation.
(b) Subject to the terms and conditions set forth in this Agreement, Employee shall devote his
full business time, attention, and efforts to the performance of his duties under this Agreement
and shall not engage in any other business or occupation during the Term of Employment, including,
without limitation, any activity that (x) conflicts with the interests of the Company or its
subsidiaries, (y) interferes with the proper and efficient performance of his duties for the
Company, or (z) interferes with the exercise of his judgment in the Company’s best interests.
Notwithstanding the foregoing, nothing herein shall preclude Employee from (i) serving, with the
prior written consent of the Board, as a member of the board of directors or advisory boards (or
their equivalents in the case of a non-corporate entity) of non-competing businesses and charitable
organizations, (ii) engaging in charitable activities and community affairs, and (iii) subject to
the terms and conditions set forth in Section 9 hereof, managing his personal investments and
affairs; provided, however, that the activities set out in clauses (i), (ii) and
(iii) shall be limited by Employee so as not to materially interfere, individually or in the
aggregate, with the performance of his duties and responsibilities hereunder.
(c) Employee’s principal place of employment shall be in the Tampa Bay/Clearwater metropolitan
area, although Employee understands and agrees that he may be required to travel from time to time
for business reasons.
Section 4. Compensation. During the Term of Employment, Employee shall be entitled to
the following compensation:
(a) Base Salary. Employee shall be paid an annualized Base Salary, payable in
accordance with the regular payroll practices of the Company, of not less than $250,000, subject to
increase, if any, as may be approved in writing by the Board, but not to decrease from the then
current Base Salary.
(b) Annual Bonus. Employee shall be eligible for an annual incentive bonus award
determined by the Board in respect of each fiscal year during the Term of Employment (the
“Annual Bonus”). The target Annual Bonus for each
fiscal year shall be 60% of Base Salary.
The actual Annual Bonus payable in respect of each fiscal year shall be based upon the level of
achievement of annual Company and individual performance objectives for such fiscal year, as
determined by the Board and communicated to Employee. The Annual Bonus shall be paid to Employee at
the same time as annual bonuses are generally payable to other senior executives of the Company,
but in no event later than the date which is two and one-half (2 1/2) months following the end of
the fiscal year to which such Annual Bonus relates.
Section 5. Employee Benefits.
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During the Term of Employment, Employee shall be entitled to participate in health,
insurance, retirement and other perquisites and benefits generally provided to other senior
executives of the Company that are made available from time to time. Employee shall also be
entitled to the same number of holidays, vacation and sick days as are generally allowed to senior
executives of the Company in accordance with the Company policy in effect from time to time.
Section 6. “Key-Man” Insurance.
At any time during the Term of Employment, the Company shall have the right to insure the life
of Employee for the sole benefit of the Company, in such amounts, and with such terms, as it may
determine. All premiums payable thereon shall be the obligation of the Company. Employee shall have
no interest in any such policy, but agrees to reasonably cooperate with the Company in taking out
such insurance by submitting to physical examinations, supplying all information reasonably
required by the insurance company, and executing all necessary documents, provided that no
financial obligation or liability is imposed on Employee by any such documents.
Section 7. Reimbursement of Business Expenses.
Employee is authorized to incur reasonable business expenses in carrying out his duties and
responsibilities under this Agreement and the Company shall promptly reimburse him for all such
reasonable business expenses incurred in connection with carrying out the business of the Company,
subject to documentation in accordance with the Company’s policy, as in effect from time to time.
Section 8. Termination of Employment.
(a) General. The Term of Employment shall terminate upon the earliest to occur of (i)
Employee’s death, (ii) a termination by reason of a Disability, (iii) a termination by the Company
with or without Cause, or (iv) a termination by Employee with or without Good Reason. Upon any
termination of Employee’s employment for any reason, except as may otherwise be requested by the
Company in writing and agreed upon in writing by Employee, Employee shall resign from any and all
directorships, committee memberships or any other positions Employee holds with the Company or any
of its subsidiaries.
(b) Termination due to Death or Disability. Employee’s employment shall terminate
automatically upon his death. The Company may terminate Employee’s employment immediately upon the
occurrence of a Disability, such termination to be effective upon Employee’s receipt of written
notice of such termination. In the event Employee’s employment is terminated due to his death or
Disability, Employee or his estate or his beneficiaries, as the case may be, shall be entitled to:
(i) The Accrued Obligations;
(ii) Any unpaid Annual Bonus in respect to any completed fiscal year which has
ended prior to the date of such termination, such amount to be paid at the same time it
would otherwise be paid to Employee had no such termination occurred; and
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(iii) A pro rata Annual Bonus (determined using the target Annual Bonus if
such termination occurs during the fiscal year in which the Closing Date falls, or if such
fiscal year is a period shorter than twelve (12) months, during the first full twelve (12)
month fiscal year following the Closing Date, and thereafter, using the Annual Bonus paid
or payable for the immediately prior fiscal year) based on the number of days elapsed from
the commencement of such fiscal year through and including the date of such termination,
such amount to be paid within five (5) business days of such termination.
Except as set forth in this Section 8(b), following Employee’s termination by reason of his death
or Disability, Employee shall have no further rights to any compensation or any other benefits
under this Agreement.
(c) Termination by the Company for Cause.
(i) A termination for Cause shall not take effect unless the provisions of this
subsection (i) are complied with. Employee shall be given not less than fifteen (15) days
written notice by the Board of the intention to terminate his employment for Cause, such
notice to state in detail the particular act or acts or failure or failures to act that
constitute the grounds on which the proposed termination for Cause is based. Employee shall
have fifteen (15) days after the date that such written notice has been given to Employee in
which to cure such act or acts or failure or failures to act, to the extent such cure is
possible. If he fails to cure such act or acts or failure or failures to act, the
termination shall be effective on the date immediately following the expiration of the
fifteen (15) day notice period. If cure is not possible, the termination shall be effective
on the date of receipt of such notice by Employee. During any cure period provided
hereunder, the Board may, in its sole and absolute discretion, prohibit Employee from
entering the premises of the Company (or any subsidiary thereof) or otherwise performing his
duties hereunder, and any such prohibition shall in no event constitute an event pursuant to
which Employee may terminate employment with Good Reason; provided, however,
that if cure is possible, and Employee can reasonably demonstrate to the Board that he
desires to enter the premises of the Company (or a subsidiary thereof) or to otherwise
perform his duties hereunder solely to attempt to cure the act or acts or failure or
failures to act that constitute the grounds on which the proposed termination for Cause is
based, Employee shall be permitted to enter the premises of the Company (or a subsidiary
thereof) or otherwise to perform his duties hereunder solely for the purposes of curing such
act or acts or failure or failures to act.
(ii) In the event the Company terminates Employee’s employment for Cause, he
shall be entitled only to the Accrued Obligations. Following such termination of Employee’s
employment for Cause, except as set forth in this Section 8(c)(ii), Employee shall have no
further rights to any compensation or any other benefits under this Agreement.
(d) Termination by the Company without Cause. The Company may terminate Employee’s
employment at any time without Cause, effective upon Employee’s receipt
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of written notice of such termination. In the event Employee’s employment is terminated by the
Company without Cause (other than due to death or Disability), Employee shall be entitled to:
(i) The Accrued Obligations;
(ii) Any unpaid Annual Bonus in respect to any completed fiscal year which has
ended prior to the date of such termination, such amount to be paid at the same time it
would otherwise be paid to Employee had no such termination occurred;
(iii) A pro rata Annual Bonus (determined using the target Annual Bonus if such
termination occurs during the fiscal year in which the Closing Date falls, or if such fiscal
year is a period shorter than twelve (12) months, during the first full twelve (12) month
fiscal year following the Closing Date, and thereafter, using the Annual Bonus paid or
payable for the immediately prior fiscal year) based on the number of days elapsed from the
commencement of such fiscal year through and including the date of such termination, such
amount to be paid within five (5) business days of such termination;
(iv) An amount equal to the Severance Multiplier multiplied by the sum of his then
current Base Salary, such amount to be payable over the Severance Term in substantially
equal installments, on each regular payroll date of the Company during the Severance Term;
provided, however, that in the event that the payments under this subsection (iii) are
considered “nonqualified deferred compensation” under Section 409A of the Internal Revenue
Code of 1986, as amended, if the Severance Term would otherwise expire after the date that
is one day prior to two and one-half (2
1/2) months following the later of the last day of
the Company’s fiscal year in which such termination occurs or the last day of Employee’s tax
year in which such termination occurs (the applicable date being, the “409A Outside
Date”), Employee shall receive a lump-sum amount on the 409A Outside Date equal to any
portion of the Severance Amount not previously paid to Employee prior to the 409A Outside
Date in full satisfaction any remaining portion of the amounts payable under this subsection
(iii) not previously paid to Employee prior to the 409A Outside Date in full satisfaction
any remaining portion of the amounts payable under this subsection (iii);
(v) Continuation of the health benefits provided to Employee and his covered
dependants under the Company health plans as of the date of such termination at the same cost
applicable to active employees until the earlier of: (A) the expiration of the Severance
Term, or (B) the date Employee commences employment with any person or entity and, thus, is
eligible for health insurance benefits; provided, however, that as a
condition of continuation of such benefits, the Company may require employee to elect to
continue his health insurance pursuant to COBRA; and
(vi) If such termination occurs within the one (1) year period following a Change
in Control, vesting of all shares of Time Vested Restricted Stock as of the date of such
termination.
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Notwithstanding the foregoing, the payments and benefits described in subsections (ii) through (iv)
above shall immediately cease, and the Company shall have no further obligations to Employee with
respect thereto, in the event that Employee breaches any provision of Section 9 hereof.
Following such termination of Employee’s employment by the Company without Cause, except as
set forth in this Section 8(d), Employee shall have no further rights to any compensation or any
other benefits under this Agreement.
(e) Termination by Employee with Good Reason. Employee may terminate his employment
with Good Reason by providing the Company fifteen (15) days’ written notice setting forth in
reasonable specificity the event that constitutes Good Reason, which written notice, to be
effective, must be provided to the Company within sixty (60) days of the occurrence of such event.
During such fifteen (15) day notice period, the Company shall have a cure right (if curable), and
if not cured within such period, Employee’s termination will be effective upon the date immediately
following the expiration of the fifteen (15) day notice period, and Employee shall be entitled to
the same payments and benefits as provided in Section 8(d) above for a termination without Cause,
it being agreed that Employee’s right to any such payments and benefits shall be subject to the
same terms and conditions as described in Section 8(d) above. Following such termination of
Employee’s employment by Employee with Good Reason, except as set forth in this Section 8(e),
Employee shall have no further rights to any compensation or any other benefits under this
Agreement.
(f) Termination by Employee without Good Reason. Employee may terminate his employment
without Good Reason by providing the Company thirty (30) days’ written notice of such termination.
In the event of a termination of employment by Employee under this
Section 8(f), Employee shall be
entitled only to the Accrued Obligations. In the event of termination of Employee’s employment
under this Section 8(f), the Company may, in its sole and absolute discretion, by written notice
accelerate such date of termination and still have it treated as a termination without Good Reason.
Following such termination of Employee’s employment by Employee without Good Reason, except as set
forth in this Section 8(f), Employee shall have no further rights to any compensation or any other
benefits under this Agreement.
(g) Release. Notwithstanding any provision herein to the contrary, the Company may
require that, prior to payment of any amount or provision of any benefit pursuant to subsections
(d) or (e) of this Section 8, Employee shall have executed a general release in favor of the
Company and its subsidiaries and related parties in the form as is reasonably required by the
Company, and any waiting periods contained in such release shall have expired.
Section 9. Restrictive Covenants. Employee acknowledges and agrees that (A) the
agreements and covenants contained in this Section 9 are (i) reasonable and valid in geographical
and temporal scope and in all other respects, and (ii) essential to protect the value of the
Company’s business and assets, and (B) by his employment with the Company, Employee will obtain
knowledge, contacts, know-how, training and experience and there is a substantial probability that
such knowledge, know-how, contacts, training and experience could be used to the substantial
advantage of a competitor of the Company and to the Company’s
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substantial detriment. For purposes of this Section 9, references to the Company shall
be deemed to include Holdings, CCS and their respective subsidiaries.
(a) Confidential Information. At any time during and after the end of the Term of
Employment, without the prior written consent of the Board, except to the extent required by an
order of a court having jurisdiction or under subpoena from an appropriate government agency, in
which event, Employee shall, to the extent legally permitted, consult with the Board prior to
responding to any such order or subpoena, and except as he in good faith believes necessary or
desirable in the performance of his duties hereunder, Employee shall not disclose to or use for the
benefit of any third party any confidential or proprietary trade secrets, customer lists, drawings,
designs, information regarding product development, marketing plans, sales plans, management
organization information, operating policies or manuals, business plans, financial records,
packaging design or other financial, commercial, business or technical information (i) relating to
the Company, or (ii) that the Company may receive belonging to suppliers, customers or others who
do business with the Company as a result of his position with the Company (collectively,
“Confidential Information”). Employee’s obligation under this Section 9(a) shall not apply
to any information that is in the public domain or hereafter enters the public domain, in each case
without the breach by Employee of this Section 9(a).
(b) Non-Competition. Employee covenants and agrees that during the Restricted Period,
Employee shall not, directly or indirectly, individually or jointly, own any interest in, operate,
join, control or participate as a partner, director, principal, officer, or agent of, enter into
the employment of, act as a consultant to, or perform any services for any Person (other than the
Company), that engages in any Competitive Activities within the Restricted Area. Notwithstanding
anything herein to the contrary, this Section 9(b) shall not prevent Employee from acquiring as an
investment securities representing not more than three percent (3%) of the outstanding voting
securities of any publicly-held corporation or from being a passive investor in any mutual fund,
hedge fund, private equity fund or similar pooled account so long as Employee’s interest therein is
less than three percent (3%) and he has no role in selecting or managing investments thereof.
(c) Non-interference. During the Restricted Period, Employee shall not, directly
or indirectly, for his own account or for the account of any other Person, engage in
Interfering Activities.
(d) Return of Documents. In the event of the termination of Employee’s employment for
any reason, Employee shall deliver to the Company all of (i) the property of the Company, and (ii)
the documents and data of any nature and in whatever medium of the Company, and he shall not take
with him any such property, documents or data or any reproduction thereof, or any documents
containing or pertaining to any Confidential Information.
(e) Works for Hire. Employee agrees that the Company shall own all right, title and
interest throughout the world in and to any and all inventions, original works of authorship,
developments, concepts, know-how, improvements or trade secrets, whether or not patentable or
registerable under copyright or similar laws, which Employee may solely or jointly conceive or
develop or reduce to practice, or cause to be conceived or developed or reduced to practice during
the Term of Employment, whether or not during regular working hours, provided
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they either (i) relate at the time of conception or development to the actual or demonstrably
proposed business or research and development activities of the Company; (ii) result from or relate
to any work performed for the Company; or (iii) are developed through the use of Confidential
Information and/or Company resources or in consultation with Company personnel (collectively
referred to as “Developments”). Employee hereby assigns all right, title and interest in
and to any and all of these Developments to the Company. Employee agrees to assist the Company, at
the Company’s expense (but for no other consideration of any kind), to further evidence, record and
perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights
specified to be so owned or assigned. Employee hereby irrevocably designates and appoints the
Company and its agents as attorneys-in-fact to act for and on Employee’s behalf to execute and file
any document and to do all other lawfully permitted acts to further the purposes of the foregoing
with the same legal force and effect as if executed by Employee. In addition, and not in
contravention of any of the foregoing, Employee acknowledges that all original works of authorship
which are made by him (solely or jointly with others) within the scope of employment and which are
protectable by copyright are “works made for hire,” as that term is defined in the United States
Copyright Act (17 USC Sec. 101). To the extent allowed by law, this includes all rights of
paternity, integrity, disclosure and withdrawal and any other rights that may be known as or
referred to as “moral rights.” To the extent Employee retains any such moral rights under
applicable law, Employee hereby waives such moral rights and consents to any action consistent with
the terms of this Agreement with respect to such moral rights, in each case, to the full extent of
such applicable law. Employee will confirm any such waivers and consents from time to time as
requested by the Company.
(f) Blue Pencil. If any court of competent jurisdiction shall at any time deem the
duration or the geographic scope of any of the provisions of this Section 9 unenforceable, the
other provisions of this Section 9 shall nevertheless stand and the duration and/or geographic
scope set forth herein shall be deemed to be the longest period and/or greatest size permissible by
law under the circumstances, and the parties hereto agree that such court shall reduce the time
period and/or geographic scope to permissible duration or size.
(g) Incentive Plan Construction. Notwithstanding anything contained in the Incentive
Plan to the contrary, Employee shall not be considered to have engaged in a “competitive activity”
within the meaning of, and for all purposes under, the Incentive Plan unless such activity would
constitute a breach of subsections (a), (b) or (c) above.
Section 10. Breach of Restrictive Covenants.
Without limiting the remedies available to the Company, Employee acknowledges that a breach of
any of the covenants contained in Section 9 hereof may result in material irreparable injury to the
Company or its subsidiaries for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event of such a breach or
threat thereof, the Company shall be entitled to obtain a temporary restraining order and/or a
preliminary or permanent injunction, without the necessity of proving irreparable harm or injury as
a result of such breach or threatened breach of Section 9 hereof, restraining Employee from
engaging in activities prohibited by Section 9 hereof or such other relief as may be required
specifically to enforce any of the covenants in Section 9 hereof. Notwithstanding any other
provision to the contrary, the Restricted Period shall be tolled during
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any period of violation of any of the covenants in Section 9(b) or 9(c) hereof and during any
other period required for litigation during which the Company seeks to enforce such covenants
against Employee or another Person with whom Employee is affiliated if it is ultimately determined
that Employee was in breach of such covenants.
Section 11. Representations and Warranties of Employee.
Employee represents and warrants to the Company that:
(a) Employee’s employment will not conflict with or result in his breach of any agreement to
which he is a party or otherwise may be bound;
(b) Employee has not violated, and in connection with his employment with the Company will not
violate, any non-solicitation, non-competition or other similar covenant or agreement of a prior
employer by which he is or may be bound; and
(c) In connection with Employee’s employment with the Company, he will not use any
confidential or proprietary information that he may have obtained in connection with employment
with any prior employer.
Section 12. Taxes.
The Company may withhold from any payments made under this Agreement all applicable taxes,
including but not limited to income, employment and social insurance taxes, as shall be required by
law.
Section 13. Mitigation; Set Off.
The Company’s obligation to pay Employee the amounts provided and to make the arrangements
provided hereunder shall be subject to set-off, counterclaim or recoupment of amounts owed by
Employee to the Company or its affiliates. Employee shall not be required to mitigate the amount of
any payment provided for pursuant to this Agreement by seeking other employment or otherwise and
the amount of any payment provided for pursuant to this Agreement shall not be reduced by any
compensation earned as a result of Employee’s other employment or otherwise.
Section 14. Successors and Assigns; No Third-Party Beneficiaries.
(a) The Company. This Agreement shall inure to the benefit of and be enforceable
by, and may be assigned by the Company to, any purchaser of all or substantially all of the
Company’s business or assets or any successor to the Company (whether direct or indirect, by
purchase, merger, consolidation or otherwise). The Company will require in a writing delivered to
Employee any such purchaser, successor or assignee to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be required to perform
it if no such purchase, succession or assignment had taken place. The Company may make no other
assignment of this Agreement or its obligations hereunder.
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(b) Employee. Employee’s rights and obligations under this Agreement shall not be
transferable by Employee by assignment or otherwise, without the prior written consent of the
Company; provided, however, that if Employee shall die, all amounts then payable to
Employee hereunder shall be paid in accordance with the terms of this Agreement to Employee’s
devisee, legatee or other designee or, if there be no such designee, to Employee’s estate.
(c) No Third-Party Beneficiaries. Except as otherwise set forth in Section 8(b) or
Section 14(b) hereof, nothing expressed or referred to in this Agreement will be construed to give
any Person other than the Company and Employee any legal or equitable right, remedy or claim under
or with respect to this Agreement or any provision of this Agreement; provided, however, the
parties acknowledge that prior to the Closing (as defined in the Merger Agreement) Merger Sub is
intended to be a third party beneficiary of this Agreement, and this Agreement cannot be amended
without the prior written consent of Merger Sub.
Section 15. Waiver and Amendments.
Any waiver, alteration, amendment or modification of any of the terms of this Agreement shall
be valid only if made in writing and signed by each of the parties hereto; provided,
however, that any such waiver, alteration, amendment or modification is consented to on the
Company’s behalf by the Board. No waiver by either of the parties hereto of their rights hereunder
shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions
hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.
Section 16. Severability.
If any covenants or other provisions of this Agreement are found to be invalid or
unenforceable by a final determination of a court of competent jurisdiction: (a) the remaining
terms and provisions hereof shall be unimpaired, and (b) the invalid or unenforceable term or
provision hereof shall be deemed replaced by a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable term or provision
hereof.
Section 17. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE (WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES THEREOF) APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH COUNTRY.
Section 18. Dispute Resolution.
Any controversy arising out of or relating to this Agreement or the breach hereof (other than
claims for injunctive relief pursuant to Section 10 hereof) shall be settled by binding arbitration
in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association
(before a single arbitrator) and judgment upon the award rendered may be entered in any court
having jurisdiction thereof. The costs of any such arbitration proceedings shall be borne equally
by the Company and Employee; provided, however, that the arbitrator
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shall have the right to award to the prevailing party in such arbitration reasonable
attorneys’ fees and costs expended in the course of such arbitration or enforcement of the awarded
rendered thereunder. The location for the arbitration shall be in Tampa Bay, Florida. Any award
made by such arbitrator shall be final, binding and conclusive on the parties for all purposes, and
judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction
thereof.
Section 19. Notices.
(a) Every notice or other communication relating to this Agreement shall be in writing, and
shall be mailed to or delivered to the party for whom it is intended at such address as may from
time to time be designated by it in a notice mailed or delivered to the other party as herein
provided, provided that, unless and until some other address be so designated, all notices or
communications by Employee to the Company shall be mailed or delivered to the Company at its
principal executive office, and all notices or communications by the Company to Employee may be
given to Employee personally or may be mailed to Employee at Employee’s last known address, as
reflected in the Company’s records.
(b) Any notice so addressed shall be deemed to be given: (i) if delivered by hand, on the date
of such delivery; (ii) if mailed by courier or by overnight mail, on the first business day
following the date of such mailing; and (iii) if mailed by registered or certified mail, on the
third business day after the date of such mailing.
Section 20. Section Headings.
The headings of the sections and subsections of this Agreement are inserted for convenience
only and shall not be deemed to constitute a part thereof, affect the meaning or interpretation of
this Agreement or of any term or provision hereof.
Section 21. Entire Agreement.
This Agreement constitutes the entire understanding and agreement of the parties hereto
regarding the employment of Employee. This Agreement supersedes all prior negotiations,
discussions, correspondence, communications, understandings and agreements between the parties
relating to the subject matter of this Agreement, including, without limitation, the Prior
Agreement.
Section 22. Survival of Operative Sections.
Upon any termination of Employee’s employment, the provisions of Section 8 through Section 25
of this Agreement (together with any related definitions set forth in Section 1 hereof) shall
survive to the extent necessary to give effect to the provisions thereof.
Section 23. Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original but all of which together shall constitute one and the same
instrument. The execution of this Agreement may be by actual or facsimile signature.
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Section 24. Conditional Upon Closing of Transactions.
Notwithstanding any other provisions hereunder, this Agreement is expressly conditional upon
the closing of the transactions contemplated under the Merger Agreement. In the event such
transactions do not close, this Agreement shall be null and void in any all respects.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above
written.
| CCS MEDICAL, INC. | ||||
/s/ Xxxxxx X. Xxxxxx
By: Xxxxxx X. Xxxxxx |
||||
| Title: Chief Executive Officer | ||||
| CHRONIC CARE SOLUTIONS HOLDING, INC. | ||||
/s/
Xxxxxx X. Xxxxxx
By: Xxxxxx X. Xxxxxx |
||||
| Title: Chief Executive Officer | ||||
| EMPLOYEE | ||||
/s/ Xxxxxxx X’Xxxxxx
Xxxxxxx X’Xxxxxx |
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