EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of March 9, 1994 and by and between
MEDCATH, INC., a North Carolina corporation (the "Corporations"); and R. Xxxxxxx
Xxxxx, Jr. ("Xxxxx"), a resident of North Carolina (the "Agreement").
WHEREAS, the company desires to employ Xxxxx as a full-time employee and
Xxxxx desires to accept that position in accordance with the terms hereof;
NOW, THEREFORE, it is agreed as follows:
1. Employment. For new and very valuable consideration described herein,
the Company shall employ Xxxxx and Xxxxx accepts employment upon the terms and
conditions hereinafter set forth.
2. Duties. As an employee, Xxxxx shall have such duties relating to the
development and operation of freestanding cardiac catheterization centers,
cardiac imaging centers, heart hospitals, mobile cardiac catheterization unit
routes, cardiology related programs, or such other duties as shall be assigned
to him from time to time by the Officers of the Company.
During the term of employment hereunder, Xxxxx shall not be engaged in any
other business activity whether or not such business activity is pursued for
gain, profit, or other pecuniary advantage unless agreed on by the President of
the Company.
3. Compensation. For and in consideration of the services to be rendered by
Xxxxx hereunder, the Company shall pay to Xxxxx an annual salary of One Hundred
Thousand Dollars ($100,000.00) and continue during the term of this agreement
and which shall be paid on a monthly basis unless otherwise agreed to by the
parties hereto. Xxxxx shall also participate in an annual bonus compensation
plan each year of his employment. The initial bonus plan will be $75,000
relating to the development of the McAllen, Texas Heart Hospital. Xxxxx'x salary
shall be reviewed by either the President of the Company or other officers of
the Company as designated by the President from time to time. Xxxxx will only be
eligible for the bonus award if he is employed by the Company on October 31st
of the year for which the bonus applies.
During the first twelve months of employment, MetCath will guarantee Xxxxx
$25,000 of his bonus to be paid monthly ($2,083.33 per month).
4. Miscellaneous Benefits. During his employment, the Company shall provide
Xxxxx with additional benefits substantially equivalent to those which are
generally provided to other similar employees of the Company. The Company shall
reimburse Xxxxx for reasonable expenses incurred by him in the course of his
employment with the Company provided those expenses are consistent with
reasonable policies provided from time to time by the Company's Board of
Directors. During the first twelve months of employment the Company will
reimburse Xxxxx for
COBRA payments to continue health coverage for Xxxxx'x wife until she is
eligible to be included in the Company's health plan. These expenses will be
handled through the monthly employee expense reporting and reimbursement
mechanism such that the reimbursements will be tax free to Xxxxx. The Company
agrees to reimburse Xxxxx for reasonable moving expenses to relocate his family
to Texas.
5. Termination of Employment.
(a) By the Company for Cause. The Company shall have the right to terminate
Xxxxx'x employment for cause as provided herein by giving written notice
thereof. "Cause" shall mean that Xxxxx commits a willful act of fraud,
dishonesty or disloyalty toward the company; is convicted of criminal conduct
resulting in a jail sentence (whether or not such sentence is suspended);
engages in conduct significantly injurious to the Company monetarily; violates a
material term of this Agreement including, but not limited to, failure to
fulfill the duties assigned to Xxxxx by the Company; becomes disabled; or
submits a notice of resignation to the Company. Xxxxx shall be deemed disabled
it he has been unable, by reason of physical or mental infirmity, to perform on
a full-time basis his assigned responsibilities. The existence of disability
shall be reasonably determined by the Board of Directors of the Company.
(b) By the Company Without Cause. Subject to (d) below, the Company may
terminate Xxxxx'x employment at any time without cause by giving Xxxxx written
notice thereof.
(c) By Xxxxx. Xxxxx may terminate his employment upon at least (30) days'
written notice.
(d) Salary and Benefits. (i) If the Company terminates Xxxxx'x employment
under this Agreement for any reason other than cause, the Company will continue
to be liable for his salary and all accrued bonuses to be paid on a monthly
basis for a period of Nine (9) months following the date of termination, as long
as and only if Xxxxx is not otherwise in default hereunder during that period;
provided, however, that his salary shall not be payable once Xxxxx becomes
employed substantially full-time or otherwise earns, on a monthly basis, at
least 75% of his monthly salary hereunder. (ii) Upon any termination of Xxxxx'x
employment for cause, Xxxxx shall not be entitled to any further salary, bonuses
or benefits following the date of termination of his employment. (iii) Upon
termination of Xxxxx'x employment for any reason, Xxxxx shall be entitled to
receive only such additional benefits which have accrued or become payable to
him prior to the end of his actual employment. (iv) Upon termination, Xxxxx
shall not be entitled to any additional salary or benefits other than those
accrued prior to the date of termination. Notwithstanding anything in this
Agreement to the contrary, no further salary or benefits shall be due to Xxxxx
once he begins to receive the proceeds of any disability insurance policy.
6. Confidentiality, Non-Disclosure and Non-Competition. During the course
of Xxxxx'x employment. Xxxxx has been and will be exposed and have access to
substantial quantities of information and Technology (the "Confidential
Information") relating to the Company's business that are valuable trade secrets
or confidential information, including information concerning customers,
operations, pricing, technology, and marketing strategies.
The Confidential Information was developed, compiled and/or tested by the
Company at considerable amounts of money in building upon and expanding that
Confidential Information. The Confidential Information enables the Company to
conduct its business with success and with a competitive advantage as long as
the Confidential Information remains not generally known to others, whether
those others operate in direct competition with the Company or its customers or
begin operations in geographical areas which are of interest to the Company,
specifically within the United States.
Xxxxx, by reason of his role as an employee of the company, is familiar
with and has access to the Company's customers and their needs and to the
marketing and pricing pursued by the Company with respect to those customers and
the Company's products and services.
This Paragraph is designed to prohibit Xxxxx from using the Confidential
Information and knowledge and relationships developed as an insider of the
Company for his own benefit or for the benefit of parties other than the
Company. The Company would not give Xxxxx access to the Confidential Information
and authority without Xxxxx'x execution of this Agreement and Xxxxx willingly
signs this Agreement because he has received additional consideration to do so
and because he believes his relationship with the Company is and will be in his
own best interest. Both parties agree that this Paragraph's provisions should be
construed broadly in favor of the Company.
In light of the foregoing, the parties agree as follows:
A. Confidential Information.
Xxxxx promises that:
(1) During or after termination of his relationship with the
Company, he will not directly or indirectly, use, or disclose or make
available to anyone outside the Company, any Confidential Information.
(2) He will safeguard all Confidential Information at all times
so that it is not exposed to, or taken by, unauthorized persons, and,
when entrusted to him, will exercise his best efforts to assure to
safekeeping.
B. Competition.
Xxxxx agrees that:
(1) He will not, during the period of his relationship with the
Company, engage or be interested directly or indirectly in any
manner, as a partner, officer, director, advisor, employee or in any
other capacity in any business similar to business to the Company.
(2) The Company's business is unusual and that by virtue of his
relationship with the Company he is, and will become more, familiar
with and close to the Confidential Information and the Company's
business and Customers. In the event his relationship with the Company
ceases for any reason, he will not engage in, for a period of eighteen
(18) months after that termination, in any manner directly or
indirectly, whether as an employee, officer, owner, partner,
shareholder, consultant or otherwise, in any business or other
activity similar in business to and in competition with the company
within seventy-five (75) miles of any location which the Company has
(x) provided cardiology services of any type whatsoever during his
employment with the Company, or (y) made a written proposal to provide
such services, which proposal was made at least in part as a result of
the efforts of Xxxxx.
7. Enforcement. If there is a breach or threatened breach of the provisions
of Paragraph 6 of this Agreement, in addition to other remedies at law or
equity, the Company shall be entitled to injunctive relief. The parties desire
and intend that the provisions of Paragraph 6 shall be enforced to the fullest
extent permissible under the law and public policies applied, but the
unenforceability or modification of any particular paragraph, subparagraph,
sentence, clause, phrase, word, or figure be adjudicated to be wholly invalid or
unenforceable, the balance of Paragraph 6 shall thereupon be modified in order
to render the same valid and enforceable.
8. Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be sent by registered mail, by other
reasonable means of delivery providing overnight service, or by hand to Xxxxx at
0000 Xxxx Xxx Xx., Xxxxxxxxx, XX 00000; to the Company at 0000 Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxx, XX 00000. Notice shall be deemed to have been given when
deposited with the Postal Service or other delivery service or, if delivered by
hand, when received by the addressee. A party may change the address to which
notice to it must be given by advising the other parties in writing of the new
address.
9. Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach by the waiving party.
10. Assignment. The rights and obligations of the Company under this
Agreement shall insure to the benefit of and shall be binding upon the
successors and assigns of the Company. As a personal service contract the rights
and obligations of Xxxxx under this agreement may not be assigned by him.
11. Entire Agreement. This instrument may not be changed orally but only by
an agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, extension or discharge is sought.
12. Applicable Law. This Agreement shall be construed in accordance with
the laws of the State of North Carolina Applicable to contracts made and to be
performed in this State, without reference to choice of laws principles, and
that law shall be applied in connection with its enforcement in other states and
jurisdictions to the fullest extent possible.
IN WITNESS WHEREOF, the parties have signed and sealed this Agreement as of
the date first above written.
MEDCATH INCORPORATED
BY: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
President Title
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/s/ R. Xxxxxxx Xxxxx, Jr.
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R. Xxxxxxx Xxxxx, Jr.
3/9/94
