XXXXXXX SELECT CORPORATION
H. GREY WOOD
EMPLOYMENT AGREEMENT
Dated: August 29, 1997
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into on the 29th day of August, 1997, by H.
Grey Wood, residing at 0000 Xxxxxxxxxx, Xxxxxxxxxx, Xxxxxxx 00000 (herein called
the "Employee"), and Xxxxxxx SELECT Corporation, with a principal place of
business located at 0000 Xxxxxxxx Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000
(herein called "SELECT"). Unless otherwise defined, capitalized terms used
herein shall have the meaning ascribed to such terms in the Merger Agreement as
hereinafter defined.
W I T N E S S E T H:
WHEREAS, Xxxxxxx Research Corporation ("NRC"), SELECT, a wholly owned
subsidiary of NRC, TXEN, Inc. ("TXEN"), and the holders of all of the $0.002 par
value Class A Common Stock of TXEN (the "Shareholders") have entered into and
consummated an Agreement of Merger dated as of August 27, 1997 (the "Merger
Agreement") whereby TXEN merged with and into SELECT;
WHEREAS, the Employee's continued employment with SELECT was a material
inducement to SELECT and NRC to enter into the Merger Agreement;
WHEREAS, Employee owned Class A Common Stock of TXEN and received a
portion of the Merger Consideration;
WHEREAS, SELECT is engaged in the business of health care
administration and providing information systems and services to health care
providers and administrators throughout the United States; and
WHEREAS, SELECT desires to obtain the services of the Employee as Vice
President and General Manager of SELECT and the Employee is willing to render
such services to SELECT upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
1. Duties and Salary.
(a) SELECT agrees to employ the Employee and the Employee agrees to
accept employment by SELECT on a full-time basis as Vice President and General
Manager of SELECT at a base salary of $10,416.67 per month plus such incentive
compensation as the Board of Directors of SELECT (the "Board") may determine
payable during the Term of Employment, as hereinafter defined. Such salary shall
be subject to increases from time to time as authorized by the Board.
(b) The Employee hereby agrees to undertake such travel as may be
required in the performance of his duties. The reasonable travel expenses of the
Employee shall be reimbursed in accordance with SELECT's reimbursement policy,
in effect from time to time.
(c) The Employee shall carry out his duties under the general
supervision of the Board or its designee.
(d) The Employee's duties shall include the duties and responsibilities
identified on Schedule I attached hereto. The Employee shall perform such other
tasks and duties as may be assigned by SELECT, from time to time and SELECT
reserves the right to change the office and/or position of the Employee within
SELECT, so long as such change is mutually acceptable. The Employee shall devote
his full time, attention, skill and efforts to the tasks and duties assigned by
SELECT. The Employee shall not provide services, for compensation, to any other
person or business entity while employed by SELECT without approval of the
Board.
(e) The Employee shall not be required to relocate beyond the
Birmingham, Alabama, metropolitan area without his consent.
2. Term of Employment. This Agreement shall commence as of the effective date of
the Merger Agreement and shall end two years from the date thereof (the "Term of
Employment"), unless terminated earlier or extended as provided herein. Upon
expiration of the initial Term of Employment unless earlier terminated as
provided herein, the Term of Employment shall continue automatically
month-to-month until terminated by either party with at least thirty (30) days'
prior written notice with or without cause.
3. Termination Before Expiration of Term of Employment. The termination of the
employment of the Employee during the Term of Employment may occur in one of the
following ways:
(a) By SELECT, for Cause. Termination by SELECT shall be deemed to be
for cause only upon:
(i) Employee's conviction of or pleading guilty to a felony;
(ii) A good faith determination by the Board that the
Employee has breached this Agreement or the Merger
Agreement;
(iii) Refusal or failure by the Employee, without
reasonable excuse or proper authorization, to carry
out any reasonable instructions of the Board
consistent with Employee's rights or duties as set
forth in this Agreement;
(iv) Material breach of this Agreement or any material
breach of any agreement with SELECT or NRC;
(v) The Employee's demonstration of negligence or willful
misconduct in the execution of his duties, including
without limitation breach of fiduciary duty or the
duty of loyalty owed SELECT.
If SELECT intends to terminate for cause, SELECT shall provide notice
to Employee of intent to terminate this Agreement, stating the termination
provision in this Agreement relied upon and setting forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination under the
provisions so indicated, and shall provide Employee with an opportunity to cure
the alleged default or breach within thirty (30) days of receipt of the notice,
provided that if the matter is not curable within such thirty (30) day period,
the Employee shall not be deemed in default if the Employee commences
immediately to cure the matter and proceeds diligently thereafter to complete
the cure, further provided that the alleged breach or default must be cured
within ninety (90) days of receipt of the notice. SELECT shall not be required
to give more than one notice with respect to the same matter. Notwithstanding
the foregoing, no notice and no cure right shall be required with respect to
termination for cause under 3(a)(i) or an act involving theft of information or
property of SELECT.
(b) By SELECT, Without Cause. Any termination of Employee by SELECT for
reasons other than as set forth in subsections 3(a)(i) through 3(a)(v) above
shall be a termination without cause. SELECT may terminate the employment of
Employee without cause by thirty (30) days prior written notice at any time.
(c) By the Employee. The Employee may by written notice terminate his
employment at any time during the Term of Employment:
(i) For any reason other than for Good Reason (as defined below) upon
thirty (30) days prior written notice at any time.
(ii) For "Good Reason," defined as termination because of a material
breach by SELECT of this Agreement including, without limitation, making
a material change in the Employee's duties, responsibilities, or authority
as set forth in this Agreement, without his express written consent.
In all cases in which Employee intends to terminate for Good Reason, the
Employee shall provide SELECT with notice of intent to terminate this
Agreement, stating the facts and circumstances giving rise to a breach
of this Agreement claimed to provide a basis for termination under the
provisions so indicated, and shall provide SELECT with an opportunity
to cure the alleged default or breach within thirty (30) days of receipt
of the notice, provided that if the matter is not curable within such
thirty (30) day period, SELECT shall not be deemed in default if it
commences immediately to cure the matter and proceeds diligently thereafter
to complete the cure, further provided that the alleged breach or default
must be cured within ninety (90) days of receipt of the notice. Employee
shall not be required to give more than one such notice with respect to the
same matter.
(d) Death of the Employee.
(e) Disability of Employee. If, during the Term of Employment, a
physician selected by SELECT determines that the Employee has
become physically or mentally disabled so as to be unable to
carry out the normal and usual duties of his employment for
three (3) continuous months, and reasonable accommodation
cannot be made to allow the Employee to continue to perform
his duties full-time, his employment hereunder may be
terminated at the election of SELECT or the Employee.
4. Consequences of Termination. The termination of the employment of Employee
will cause the following results:
(a) If the termination is by SELECT for cause, or is by the Employee
for any reason other than for Good Reason, SELECT will pay the Employee within
five (5) days after the date of termination any unpaid salary, the amount of any
accrued annual vacation pay to which he may be entitled under SELECT's vacation
plan and benefits. All such compensation and benefits (if any) shall be paid
only through the date termination occurs.
(b) If the termination is by SELECT without cause or because of death
or disability, SELECT shall pay to the Employee, in addition to the amounts set
forth in 4(a) above, an amount equal to the Employee's monthly base salary then
in effect over a six-month period immediately following the termination.
(c) If the termination is by the Employee for Good Reason, SELECT shall
pay to the Employee, in addition to the amounts set forth in 4(a) above, an
amount equal to the Employee's monthly base salary then in effect over a
six-month period immediately following the termination.
(d) In the event of the Employee's death or disability, the following
provisions will apply:
(i) Upon his death, the Employee's estate will be
entitled to receive the amount set forth in Section
4(b) and the benefits set forth in any plans of
SELECT then in effect and applicable under the
circumstances. The Employee or his estate shall be
entitled to no other compensation or benefits in the
event of death.
(ii) Upon termination on account of disability, Employee
will be entitled to receive the amount set forth in
Section 4(b) and the benefits set forth in any plans
of SELECT then in effect and applicable under the
circumstances. The Employee or his personal
representative shall be entitled to no other
compensation or benefits in the event of disability.
(e) The Employee shall not be required to mitigate the amount of
payment provided for in this Section 4 by seeking employment.
(f) The amounts set forth above in this Section 4 shall be paid and
received in complete discharge of any other obligation of SELECT to Employee
resulting from termination of his employment.
5. Fringe Benefits.
The Employee shall participate in any group health insurance, vacation
and sick leave plans, and other benefit plans available to all employees of
SELECT in accordance with their terms and conditions which may be amended or
terminated by SELECT at any time. Effective on August 31, 1997, Employee shall
receive an incentive stock option grant to purchase 8,000 shares of NRC Common
Stock under the terms and provisions of the Xxxxxxx Research Corporation 1991
Incentive Stock Option Plan.
6. Nondisclosure Covenants and Proprietary Matters.
(a) Unless authorized or instructed in writing by SELECT, the Employee
shall not, except as required in the conduct of SELECT's business, during or at
any time after the Term of Employment, disclose to others, or use, any of
SELECT's inventions or discoveries or their respective secret or confidential
information or data (oral, written, or in machine readable form) which the
Employee may obtain during the course of or in connection with the Employee's
employment, including such inventions, discoveries, information, know-how or
data relating to machines, equipment, products, systems, software, contracts,
contract performance, research and/or development, designs, compositions,
formulae, processes, manufacturing procedures or business methods, whether or
not developed by the Employee, by others in SELECT or obtained by SELECT from
third parties, and irrespective of whether or not such inventions, discoveries,
information, knowledge or data have been identified by SELECT as secret or
confidential, unless and until, and then to the extent and only to the extent
that, such inventions, discoveries, information, knowledge or data become
available to the public otherwise than by the Employee's act or omission.
(b) The Employee shall not, except as required in the conduct of
SELECT's business, disclose to others, or use, any of the information (which, if
disclosed or used, could be harmful to SELECT relating to present and
prospective customers of SELECT, business dealings with such customers,
prospective sales and advertising programs and agreements with representatives
or prospective representatives of SELECT, present or prospective sources of
supply or any other business arrangements of SELECT, including but not limited
to customers, customer lists, costs, prices and earnings, whether or not such
information is developed by the Employee, by others in SELECT or obtained by
SELECT from third parties, and irrespective of whether or not such information
has been identified by SELECT as secret or confidential, unless and until, and
then to the extent and only to the extent that, such information becomes
available to the public otherwise than by the Employee's act or omission.
(c) The Employee agrees to disclose immediately to SELECT or any
persons designated by it and to assign to SELECT or its successors or assigns,
all inventions made, discovered, or first reduced to practice by the Employee,
solely or jointly with others, during the Term of Employment or within a period
of six months from the date of termination of such employment (either during or
outside of the Employee's working hours and either on or off SELECT's premises),
which inventions are made, discovered or conceived either in the course of such
employment, or with the use of SELECT's time, material, facilities or funds, or
which are directly related to any investigations or obligations undertaken by
SELECT; and the Employee hereby grants and agrees to grant the right to SELECT
and its nominees to obtain, for its own benefit and in its own name (entirely at
its expense) patents and patent applications including original, continuation,
reissue, utility and design patents, and applications, patents of addition,
confirmation patents, registration patents, xxxxx patents, utility models, and
all other types of patents and the like, and all renewals and extensions of any
of them for those inventions in any and all countries; and the Employee shall
assist SELECT, at SELECT's expense, without further charge during the term of
the Employee's employment, and after termination of the Employee's employment at
the same base salary rate (excluding any bonuses, incentive or deferred
compensation or other benefits and based upon a forty hour work week) as during
the last year of the Employee's employment (determined on an hourly basis for
this purpose), through counsel designated by SELECT, to execute, acknowledge,
and deliver all such further papers, including assignments, applications for
Letters Patent (of the United States or of any foreign country), oaths,
disclaimers or other instruments and to perform such further acts, including
giving testimony or furnishing evidence in the prosecution or defense of
appeals, interferences, suits and controversies relating to any aforesaid
inventions as may reasonably be deemed necessary by SELECT or its nominees to
effectuate the vesting or perfecting in SELECT or its nominees of all right,
title and interest in and to said inventions, applications and patents.
Notwithstanding the foregoing, the Employee need not take any action called for
under this Section 6(c) which will cause undue personal hardship to the
Employee.
(d) The Employee agrees to disclose immediately to SELECT or any
persons designated by it and to assign to SELECT, at its option, or its
successors or assigns, all works of authorship, including all writings, computer
programs, software, and firmware, written or created by the Employee solely or
jointly with others, during the course of his employment by SELECT (either
during or outside of the Employee's working hours and either on or off SELECT's
premises), which works are made or conceived either in the course of such
employment, or with the use of SELECT's time, material, facilities or funds, or
which are directly related to any investigations or obligations undertaken by
SELECT; and the Employee hereby agrees that all such works are works made for
hire, of which SELECT is the author and the beneficiary of all rights and
protections afforded by the law of copyright in any and all countries; and the
Employee will assist SELECT at SELECT's expense without further charges during
the term of his employment, and after termination of his employment at the same
base salary rate (excluding any bonuses, incentive or deferred compensation or
other benefits) as during the last year of his employment (determined on an
hourly basis for this purpose assuming a forty hour work week), through counsel
designated by SELECT, to execute, acknowledge, and deliver all such further
papers, including assignments, applications for copyright registration (in the
United States or in any foreign country), oaths, disclaimers or other
instruments, and to perform such further acts, including giving testimony or
furnishing evidence in the prosecution or defense of appeals, interferences,
suits and controversies relating to any aforesaid works, as may be deemed
necessary by SELECT or by its nominees to effectuate the vesting or perfecting
in SELECT or its nominees of all rights and interest in and to said works and
copies thereof, including the exclusive rights of copying and distribution.
(e) The Employee shall keep complete, accurate and authentic accounts,
notes, data and records of all inventions made, discovered or developed and all
works of authorship written or created by the Employee as aforesaid in the
manner and form requested by SELECT.
(f) All computer or other hardware, computer software, computer
programs, source codes, object codes, magnetic tapes, printouts, samples, notes,
records, reports, documents, customer lists, photographs, catalogues and other
writings, whether copyrightable or not, relating to or dealing with SELECT's
business and plans, and those of others entrusted to SELECT, which are prepared
or created by the Employee or which may come into his possession during or as a
result of his employment, are the property of SELECT, as applicable, and upon
termination of his employment, the Employee agrees to return all such computer
software, computer programs, source codes, object codes, magnetic tapes,
printouts, samples, notes, records, reports, documents, customer lists,
photographs, catalogues and writings and all copies thereof to SELECT.
7. Nonsolicitation and Noncompetition. During the Restriction Period (as
hereinafter defined) within the United States of America, the Employee shall not
directly or indirectly:
(a) Solicit the business of SELECT from any customer of SELECT or any
entity controlled by SELECT or solicit any employees of SELECT to leave the
employ of SELECT.
(b) Hire any employees or former employees of SELECT or any entity
controlled by SELECT within one year of the date of termination of his
employment with SELECT or cause any entity with which the Employee is affiliated
to hire any such employees or former employees of SELECT unless such former
employee has not been employed by SELECT within 180 days of the hire date.
(c) Engage in, represent in any way or be connected with, as
consultant, officer, director, partner, employee, sales representative,
proprietor, stockholder or otherwise (except for the ownership of a less than
one percent (1%) stock interest in a publicly traded corporation where Employee
is not in a management or control position), any business competing with the
business of SELECT as conducted by SELECT on the date hereof or during the
period of Employee's employment by SELECT.
(d) As used herein, the Restriction Period shall mean the period while
the Employee is employed by SELECT and twelve (12) months after the date the
employee ceases to be employed by SELECT.
8. No Conflict. Employee represents and warrants that he is not a party to or
otherwise subject to or bound by the terms of any contract, agreement or
understanding which in any manner would limit or otherwise affect his ability to
perform his obligations hereunder, including without limitation any contract,
agreement or understanding containing terms and provisions similar in any manner
to those contained in Sections 6 and 7 hereof. Employee covenants to indemnify
and hold SELECT and any of its affiliates harmless from any cost or damages
(including attorneys' fees and expenses) resulting from any breach of the
provisions of this Agreement.
9. Survival of Covenants, Effect.
(a) The covenants on the part of the Employee contained or referred to
in Sections 6 and 7 above shall survive termination of this Agreement, and the
existence of any claim or cause of action of the Employee against SELECT,
whether predicated on this Agreement or otherwise. The Employee agrees that a
remedy at law for any breach of the foregoing covenants contained or referred to
in Sections 6 and 7 would be inadequate, that SELECT would suffer irreparable
harm as a result and that SELECT shall be entitled to a temporary and permanent
injunction or an order for specific performance of such covenants without the
necessity of proving actual damage to SELECT and without the posting of any bond
or other security. Any breach of this Agreement by SELECT shall not release the
Employee from his obligations under Sections 6 and 7 hereof.
(b) The Employee hereby represents and acknowledges that SELECT is
relying on the covenants in Sections 6 and 7 in entering into this Agreement and
the Merger Agreement and other agreements related thereto and that the
restrictions in Sections 6 and 7 are fair and reasonable. The Employee
acknowledges that SELECT does business throughout the United States and that the
geographic scope of the covenants in Section 7 is therefore reasonable and
necessary to protect the interests of SELECT.
(c) It is the intent of the parties that the provisions of Sections 6
and 7 shall be enforced to the fullest extent permissible under the laws and
public policies of each jurisdiction in which enforcement is sought. If any
particular provision of Sections 6 and 7 shall be adjudicated to be invalid or
unenforceable, such provision(s) of Sections 6 and 7 shall be deemed amended to
provide restrictions to the fullest extent permissible and consistent with
applicable law and policies, and such amendment shall apply only with respect to
the particular jurisdiction in which such adjudication is made. If such deemed
amendment is not allowed by the adjudicating body, the offending provision,
only, shall be deleted and the remainder of Sections 6 and 7 shall not be
affected.
10. Assignment.
The rights and obligations of SELECT under this Agreement may be
assigned by SELECT to any other successors in interest of SELECT of that part of
the business of SELECT to which this Agreement applies or to their respective
affiliates. This Agreement may not be assigned and any duties of the Employee
may not be delegated by the Employee, but any amounts owing to the Employee upon
his death shall inure to the benefit of his estate.
11. Notices.
All notices or other communications which may be or are required to be
given, served or sent by either party to the other party pursuant to this
Agreement shall be in writing, addressed to its/his residence or place of
business as set forth above, and shall be mailed by first-class certified mail,
return receipt requested, postage prepaid; next-day air delivery; or transmitted
by facsimiles or hand delivery. Such notice or other communication shall be
deemed sufficiently given, served, sent or received for all purposes at such
time as it is delivered to the addressee or at such time as delivery is refused
by the addressee upon presentation. Each party may designate by notice in
writing an address to which any notice or communication may thereafter be so
given, served or sent. Notices hand delivered to SELECT must be delivered to an
officer of SELECT and all other notices shall be sent to the attention of the
Board.
12. Applicable Law Jurisdiction.
This Agreement has been negotiated and executed in the State of
Alabama, and it shall be governed by, construed and enforced in accordance with
the internal substantive laws and not the choice of law rules of the State of
Alabama.
13. Effectiveness/Interpretation.
The parties acknowledge and agree that this Agreement has been
negotiated at arm's length between parties equally sophisticated and
knowledgeable in the matters dealt with herein. Each party has been represented
by counsel of its or his own choosing. Accordingly, any rule of law or legal
decision that would require interpretation of any ambiguities in the Agreement
against the party that drafted it is not applicable and is waived.
14. Severability.
If any of the articles, sections, paragraphs, clauses or provisions of
this Agreement shall be held by a court of last resort to be invalid, the
remainder of this Agreement shall not be affected thereby.
15. Entire Agreement.
The foregoing contains the entire agreement between the parties
relating to the subject matter of this Agreement, and may not be altered or
amended except by an instrument in writing approved by SELECT and signed by the
parties hereto, and this Agreement supersedes all prior understandings and
agreements relating to employment of the Employee by SELECT. The parties
acknowledge that any prior oral or written agreements between SELECT and the
Employee, if any, are hereby terminated.
IN WITNESS WHEREOF, SELECT has caused this Agreement to be executed by
its duly authorized officers and the Employee has hereunto set his hand as of
the date first above written.
XXXXXXX SELECT CORPORATION
By:Xxxxxxx X. Xxxx
---------------
Its:Chief Executive Officer
-----------------------
H. Grey Wood
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H. Grey Wood, Employee
NOTE: Schedules available upon request.
