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EXHIBIT 10.23
EMPLOYMENT AGREEMENT
(Xxxxxx X. Xxxxxxx, D.D.S.)
This EMPLOYMENT AGREEMENT ("Agreement") effective as of July 1, 1997
by and between Monarch Dental Corporation, a Delaware corporation whose
principal executive offices are in Dallas, Texas ("Company"), and Xxxxxx X.
Xxxxxxx, D.D.S. ("Executive").
R E C I T A L S
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.
Company desires to continue Executive's employment and to obtain the
benefit of Executive's contacts and knowledge in the business as well as his
valuable judgment, extensive experience, good counsel and advice.
In order to award Executive for his contributions to the financial
success of the Company and to induce Executive to continue his employment with
the Company, the Company has agreed to provide Executive certain compensation
and management arrangements as set forth in this Agreement.
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 in potentially disturbing circumstances arising from the
possibility of a change in control of the Company or the assertion of claims
and actions against employees.
The Company desires to assure itself of the services of the Executive
for the period provided in this Agreement and the Executive desires to serve in
the employ of the Company on the terms and conditions hereinafter provided.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:
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ARTICLE I
EMPLOYMENT
1.1 Employment. The Company hereby employs the Executive and the
Executive hereby accepts employment by the Company for the period and upon the
terms and conditions contained in this Agreement.
1.2 Office and Duties.
(a) Position. The Executive shall serve the Company as
Chairman of the Board of Directors, President and Chief Dental
Officer, with authority, duties and responsibilities not less than the
Executive has on the date of this Agreement, with his actions at all
times subject to the direction of the Board of Directors of the
Company.
(b) Commitment. Throughout the term of this Agreement,
the Executive shall devote substantially all of his time, energy,
skill and best efforts to the performance of his duties hereunder in a
manner that will faithfully and diligently further the business and
interests of the Company. Subject to the foregoing, the Executive may
serve, or continue to serve, on the boards of directors of, and hold
any other offices or positions in, companies or organizations that are
disclosed to the Board of Directors and that will not materially
affect the performance of the Executive's duties pursuant to this
Agreement.
1.3 Term. Subject to the provisions hereof, the term of this
Agreement shall be for 4 years commencing on July 1, 1997 ("Initial Term"), and
shall be automatically renewed thereafter for successive 1 year terms (each a
"Renewal Term") unless either party gives to the other written notice of
termination no fewer than 90 days prior to the expiration of the Initial Term
or any Renewal Term that it does not desire to extend this Agreement (the
Initial Term and any Renewal Term(s) shall be collectively referred to herein
as the "Term").
1.4 Compensation.
(a) Base Salary. The Company shall pay the Executive as
compensation an aggregate salary ("Base Salary") of $300,000 per year
during the Term, or such greater amount as shall be approved by the
Compensation Committee of the Company's Board of Directors. The
Compensation Committee shall review the Executive's Base Salary at
least annually. The Base Salary for each year shall be paid by the
Company in accordance with the regular payroll practices of the
Company.
(b) Bonus Compensation. The Executive shall be eligible
to receive from the Company annual bonus compensation ("Bonus
Compensation") based on the Executive's performance as may be
determined from time to time during the term hereof (such bonus amount
shall accrue as if this Agreement was entered into as of January 1,
1997) within the reasonable discretion of the Compensation Committee
of the Board or, if a Compensation Committee is not appointed, by the
Board. The Company and the Executive intend that Executive's bonus
compensation shall be based on Executive's performance with a bonus
equal to 50% of Executive's Base Salary being paid for satisfactory
performance and with such percentage being adjusted either upward or
downward for above satisfactory or below satisfactory performance, as
the case may be.
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Except as otherwise expressly provided herein, any Bonus Compensation,
shall be paid by the Company to Executive by January 31st of each year
or within 30 days after the termination of this Agreement, as
applicable.
(c) Stock Options. The Company shall grant the Executive
stock options to purchase 150,000 shares of the Company's common stock
in accordance with the terms and conditions of that certain Stock
Option Agreement dated as of May 28, 1997.
1.5 Employment Benefits. In addition to the Base Salary and any
Bonus Compensation payable to Executive hereunder, Executive shall be entitled
to the following benefits upon satisfaction by Executive of the eligibility
requirements therefor, if any, subject to the following limitations:
(a) Health and Dental Insurance. During the Term, the
Company, at its own expense, shall provide Executive (and all
dependents of Executive at the request of Executive) with welfare
benefits which shall include health and dental insurance in amounts
and with coverage comparable to the coverage currently provided to
officers of the Company as of the date of this Agreement.
(b) Vacations. Executive shall be entitled to a paid
vacation of not less than 20 business days each year during the Term
of this Agreement, exclusive of holidays and weekends, which vacation
shall be taken by Executive in accordance with the business
requirements of the Company at the time and its personnel policies
then in effect relative to this subject. Executive shall also be
entitled to all paid holidays given by the Company to its employees.
(c) Working Facilities. During the Term of this
Agreement, the Company shall provide, at its expense, adequate office
space, furniture, equipment, supplies and personnel (including
professional, clerical, support and other personnel) as shall be
suitable to Executive's position and adequate for Executive's use in
performing his duties and responsibilities under this Agreement.
(d) Automobile Allowance. During the Term of this
Agreement, the Company shall provide Executive with a monthly
automobile allowance of One Thousand and No/100 Dollars ($1,000.00).
In addition, during the Term of this Agreement, the Company shall
reimburse Executive for the cost of gasoline incurred by Executive in
operating such automobile and the cost of automobile insurance
selected by Executive. Any allowance due Executive pursuant to the
preceding provisions of this paragraph shall be paid by the Company to
Executive on the first workday of each month or on such other day
during the month as the Company and Executive shall mutually
determine.
(e) Fringe Benefits and Perquisites. During the Term,
the Executive shall be entitled to participate in or receive benefits
under any plan or arrangement made available by the Company to its
senior executive officers, subject to and on a basis consistent with
the terms, conditions and overall administration of such plans and
arrangements. Nothing
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paid to the Executive under any plan or arrangement made available to
the Executive shall be deemed to be in lieu of compensation hereunder.
(f) Payment and Reimbursement of Expenses. During the
Term, the Company shall pay or reimburse the Executive for all
reasonable travel and other expenses incurred by the Executive in
performing his obligations under this Agreement in accordance with the
policies and procedures of the Company for its senior executive
officers, provided that the Executive properly accounts therefor in
accordance with the regular policies of the Company.
(g) Continuing Dental Education Time and Expenses.
During the Term of this Agreement, Executive may, at his option,
attend continuing dental education seminars (such attendance shall not
be considered vacation time for purposes of this Agreement) and the
Company will reimburse Executive for all expenses (including tuition,
travel, and meals) incurred by Executive for attending such continuing
dental education.
1.6 Termination.
(a) Disability. The Company may terminate this Agreement
for Disability. "Disability" shall exist if because of ill health,
physical or mental disability, or any other reason beyond his control,
and notwithstanding reasonable accommodations made by the Company, the
Executive shall have been unable, unwilling or shall have failed to
perform his duties under this Agreement, as determined in good faith
by the Compensation Committee of the Company's Board of Directors, or,
if a Compensation Committee is not appointed, by the Board of
Directors, for a period of 180 consecutive days, or if, in any
12-month period, the Executive shall have been unable or unwilling or
shall have failed to perform his duties for a period of 270 days,
irrespective of whether or not such days are consecutive.
(b) Cause. The Company may terminate the Executive's
employment for Cause. Termination for "Cause" shall mean termination
because of the Executive's (i) willful gross misconduct that causes
material economic harm to the Company or that brings substantial
discredit to the Company's reputation, (ii) final, nonappealable
conviction of a felony involving moral turpitude, or (iii) material
breach of any provision of this Agreement. Item (iii) of this
subsection shall not constitute Cause unless the Company notifies the
Executive thereof, in writing, specifying in reasonable detail the
basis therefor and stating that it is grounds for Cause, and unless
the Executive fails to cure such matter within 60 days after such
notice is sent or given under this Agreement. The Executive shall be
permitted to respond and to defend himself 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.
(c) Without Cause. During the Term, the Company may
terminate the Executive's employment Without Cause, subject to the
provisions of subsection 1.7(d) (Termination Without Cause or for Good
Reason). Termination "Without Cause" shall
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mean termination of the Executive's employment by the Company other
than termination for Cause or for Disability.
(d) Termination by Executive. The Executive may
terminate his 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 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 or
Collin County, Texas; 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
(iv) any reduction in Executive's Base Salary or
Bonus Compensation or any other failure by the Company to
comply with Sections 1.4 or 1.5 hereof that is not consented
to or approved by Executive.
(e) Change in Control. If, within 12 months of a Change
in Control, either (i) the Executive's employment is terminated by the
Company Without Cause, or (ii) the Executive terminates his employment
for Good Reason, then the provisions of subsection 1.7(e) (Termination
Upon a Change in Control) shall apply. 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;
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(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, (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 or (z) any other person whose
acquisition of shares of voting securities is approved in
advance by a majority of the Continuing Directors;
(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.
(f) Without Good Reason. During the Term, the Executive
may terminate his 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.
(g) 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 30 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 for Cause, Without Cause or for
Disability (if the Company has terminated the Agreement) or for Good
Reason, upon a
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Change in Control, or Without Good Reason (if the Executive has
terminated the Agreement).
(h) Date of Termination. "Date of Termination" shall mean
the date on which Notice of Termination is sent or given under this
Agreement.
1.7 Compensation During Disability or Upon Termination.
(a) During Disability. During any period that the
Executive fails to perform his duties hereunder because of ill health,
physical or mental disability, or any other reason beyond his control,
he shall continue to receive his full compensation and benefits
pursuant to Sections 1.4 (Compensation) and 1.5 (Employment Benefits)
until the Date of Termination.
(b) Termination for Disability. If the Company shall
terminate the Executive's employment for Disability, the Company's
obligation to pay compensation and benefits pursuant to Sections 1.4
(Compensation) and 1.5 (Employment Benefits) shall terminate, except
that the Company shall pay the Executive (i) accrued but unpaid
compensation and benefits pursuant to Sections 1.4 (Compensation) and
1.5 (Employment Benefits) through the Date of Termination, and (ii)
the benefits set forth in subsection 1.7(f) (Employee Benefits).
(c) Termination for Cause or Without Good Reason. If the
Company shall terminate the Executive's employment for Cause or if the
Executive shall terminate his employment Without Good Reason, then the
Company's obligation to pay compensation and benefits pursuant to
Sections 1.4 (Compensation) and 1.5 (Employment Benefits) shall
terminate, except that the Company shall pay the Executive his accrued
but unpaid compensation and benefits pursuant to Sections 1.4
(Compensation) and 1.5 (Employment Benefits) through the Date of
Termination.
(d) Termination Without Cause or for Good Reason. If
the Company shall terminate the Executive's employment Without Cause
or if the Executive shall terminate his employment for Good Reason,
then the Company shall pay to the Executive as severance pay, either
in accordance with the provisions of Section 1.4 (Compensation) or in
a lump sum within 15 days following the Date of Termination (at the
Company's option), in cash, an amount equal to the greater of:
(i) the Executive's total compensation including
without limitation under subsections 1.4(a) (Base Salary) and
1.4(b) (Bonus Compensation) (for this purpose, the Bonus
Compensation shall be deemed to be the average Bonus
Compensation paid to Executive by the Company over the 3 most
recently completed years beginning with 1997 (or such shorter
period as may be applicable)) for the balance of the Initial
Term; or
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(ii) 2 years average total compensation including
without limitation under subsections 1.4(a) (Base Salary) and
1.4 (b) (Bonus Compensation) paid to Executive by the Company
over the 3 most recently completed years beginning with 1997
(or such shorter period as may be applicable).
(e) Termination Upon a Change in Control. If, within
twelve (12) months of a Change of Control pursuant to subsection
1.6(e) (Change in Control), either (i) the Executive's employment is
terminated by the Company Without Cause, or (ii) if the Executive
terminates his employment for Good Reason, then the Company shall pay
to the Executive as severance pay either in accordance with the
provisions of Section 1.4 (Compensation) or in a lump sum within 15
days following the Date of Termination (at the Company's option), in
cash, an amount equal to the greater of:
(i) the Executive's total compensation including
without limitation under subsections 1.4(a) (Base Salary) and
1.4(b) (Bonus Compensation) (for this purpose, the Bonus
Compensation shall be deemed to be the average Bonus
Compensation paid to Executive by the Company over the 3 most
recently completed years beginning with 1997 (or such
shorter period as may be applicable)) for the balance of the
Initial Term up to a maximum of 3 years; or
(ii) 2 years average total compensation including
without limitation under subsections 1.4(a) (Base Salary) and
1.4(b) (Bonus Compensation) paid to Executive by the Company
over the 3 most recently completed years beginning with 1997
(or such shorter period as may be applicable).
(f) Employee Benefits. Unless the Company terminates the
Executive's employment for Cause or the Executive terminates his
employment Without Good Reason, the Company shall maintain in full
force and effect (to the extent consistent with past practice) for the
continued benefit of the Executive and, if applicable, his wife and
children, the employee benefits set forth in subsections 1.5(a)
(Health and Dental Insurance), 1.5(d) (Automobile Allowance) and
1.5(e) (Fringe Benefits and Perquisites) above that he was entitled to
receive immediately prior to the Date of Termination (subject to the
general terms and conditions of the plans and programs under which he
receives such benefits) for the balance of the applicable period set
forth in subsections 1.7(d) (Termination Without Cause or for Good
Reason) or 1.7(e) (Termination Upon a Change in Control), as
applicable, or for the period provided for under the terms and
conditions of such plans and programs, whichever is longer, provided
that his continued participation or, if applicable, the participation
of his wife and children, is possible under the general terms and
conditions of such plans and programs.
(g) No Mitigation. The Executive shall not be required
to mitigate the amount of any payment provided for in this Section 1.7
(Compensation During Disability or Upon Termination) by seeking other
employment or otherwise.
(h) Reduction in Compensation. If the Executive
terminates his employment for Good Reason or upon a Change in Control
based upon a reduction by the Company of the Executive's Base Salary,
then for purposes of subsections 1.7(d) (Termination Without Cause or
for Good Reason) and 1.7(e) (Termination Upon a Change in Control),
the Executive's Base Salary as of the Date of Termination shall be
deemed to be the
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Executive's Base Salary immediately prior to the reduction that the
Executive claims as grounds for Good Reason.
1.8 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 1.5(a) (Base Salary) and 1.5(b) (Bonus
Compensation)) (for this purpose, the Bonus Compensation shall be deemed to be
50% of Executive's Base Salary in the year of death), shall terminate as of the
end of the month in which the Executive's death occurs; provided, however, that
(i) for the balance of the Initial Term or Renewal Term then in effect, the
Executive's wife and children shall be entitled to receive their benefits under
Subsection 1.5(a) (Health and Dental Insurance); and (ii) the Executive's named
beneficiary or beneficiaries shall receive such reimbursement as may have been
due to the Executive pursuant to subsection 1.5(f) (Payment and Reimbursement
of Expenses) hereof.
ARTICLE 2
NON-COMPETITION AND CONFIDENTIALITY
2.1 Non-Competition Agreement. The Company and the Executive
acknowledge that they have entered into that certain Non-Competition Agreement
dated February 5, 1996, and they hereby reaffirm and readopt all the terms and
conditions of that Non-Competition Agreement as if it was completely restated
herein.
2.2 Confidentiality. Executive shall not, directly or indirectly,
at any time following termination of his employment with the Company, reveal,
divulge or make known to any person or entity, or use for Executive's personal
benefit (including without limitation for the purpose of soliciting business,
whether or not competitive with any business of the Company or any of its
subsidiaries), any information acquired during the course of employment
hereunder with regard to the financial, business or other affairs of the
Company or any of its subsidiaries (including without limitation any list or
record of persons or entities with which the Company or any of its subsidiaries
has any dealings), other than (1) material already in the public domain, (2)
information of a type not considered confidential by persons engaged in the
same business or a business similar to that conducted by the Company, or (3)
material that Executive is required to disclose under the following
circumstances: (A) at the express direction of any authorized governmental
entity; (B) pursuant to a subpoena or other court process; (C) as otherwise
required by law or the rules, regulations, or orders of any applicable
regulatory body; or (D) as otherwise necessary, in the opinion of counsel for
Executive, to be disclosed by Executive in connection with the prosecution of
any legal action or proceeding initiated by Executive against the Company or
any of its subsidiaries or the defense of any legal action or proceeding
initiated against Executive in his capacity as an employee or director of the
Company or any of its subsidiaries. Executive shall, at any time requested by
the Company (either during or after his employment with the Company), promptly
deliver to the Company all memoranda, notes, reports, lists and other documents
(and all copies thereof) relating to the business of the Company or any of its
subsidiaries that he may then possess or have under his control.
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ARTICLE 3
INDEMNIFICATION
3.1 Indemnification Arrangement. The Company and the Executive
acknowledge that they have entered into that certain Indemnification Agreement
dated February 5, 1996, and they hereby reaffirm and readopt all the terms and
conditions of that Indemnification Agreement as if it was completely restated
herein.
ARTICLE 4
MISCELLANEOUS
4.1 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
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.
4.2 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 will constitute one and the same instrument.
4.3 Indulgences, Etc. Neither the failure nor any delay on the
part of either party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power, or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.
4.4 Notices. All notices, requests, demands and other
communications required or permitted under this Agreement and the transactions
contemplated herein shall be in writing and shall be deemed to have been duly
given, made and received when sent by telecopy (with a copy sent by mail) or
when personally delivered or one business day after it is sent by overnight
service, addressed as set forth below:
If to the Executive:
Xxxxxx X. Xxxxxxx, D.D.S.
00000 Xxxxx Xxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
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If to the Company:
Monarch Dental Corporation
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Chief Executive Officer
Any party may alter the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this subsection for the giving of notice, which shall be
effective only upon receipt.
4.5 Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for
any reason any other or others of them may be invalid or unenforceable in whole
or in part.
4.6 Entire Agreement. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained, which shall be deemed terminated effective
immediately. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms
hereof. This Agreement may not be modified or amended other than by an
agreement in writing.
4.7 Headings; Index. The headings of paragraphs are included
solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
4.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without giving
effect to principles of conflict of laws; provided, however, that questions
regarding the Company's ability to indemnify and advance expenses pursuant to
Article 3 (Indemnification) shall be governed by the Delaware General
Corporation Law.
4.9 Dispute Resolution. Any dispute, controversy or claim arising
out of or in relation to or connection to this Agreement, including without
limitation any dispute as to the construction, validity, interpretation,
enforceability or breach of this Agreement, shall be exclusively and finally
settled by arbitration, and any party may submit such dispute, controversy or
claim to arbitration (Dispute Resolution).
(a) Arbitrators. The arbitration shall be heard and
determined by one arbitrator, who shall be impartial and who shall be
selected by mutual agreement of the parties; provided, however, that
if the dispute involves more than $2,000,000, then the arbitration
shall be heard and determined by three (3) arbitrators. If three (3)
arbitrators are necessary as provided above, then (i) each side shall
appoint an arbitrator of its choice
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within thirty (30) days of the submission of a notice of arbitration
and (ii) the party-appointed arbitrators shall in turn appoint a
presiding arbitrator of the tribunal within thirty (30) days following
the appointment of the last party-appointed arbitrator. If (x) the
parties cannot agree on the sole arbitrator, (y) one party refuses to
appoint its party-appointed arbitrator within said thirty (30) day
period or (z) the party-appointed arbitrators cannot reach agreement
on a presiding arbitrator of the tribunal, then the appointing
authority for the implementation of such procedure shall be the Senior
United States District Judge for the Northern District of Texas, who
shall appoint an independent arbitrator who does not have any
financial interest in the dispute, controversy or claim. If the
Senior United States District Judge for the Northern District of Texas
refuses or fails to act as the appointing authority within ninety (90)
days after being requested to do so, then the appointing authority
shall be the Chief Executive Officer of the American Arbitration
Association, who shall appoint an independent arbitrator who does not
have any financial interest in the dispute, controversy or claim. All
decisions and awards by the arbitration tribunal shall be made by
majority vote.
(b) Proceedings. Unless otherwise expressly agreed in
writing by the parties to the arbitration proceedings:
(i) The arbitration proceedings shall be held in
Dallas, Texas, at a site chosen by mutual agreement of the
parties, or if the parties cannot reach agreement on a
location within thirty (30) days of the appointment of the
last arbitrator, then at a site chosen by the arbitrators;
(ii) The arbitrators shall be and remain at all
times wholly independent and impartial;
(iii) The arbitration proceedings shall be
conducted in accordance with the Commercial Arbitration Rules
of the American Arbitration Association, as amended from time
to time;
(iv) Any procedural issues not determined under
the arbitral rules selected pursuant to item (iii) above shall
be determined by the law of the place of arbitration, other
than those laws which would refer the matter to another
jurisdiction;
(v) The costs of the arbitration proceedings
(including attorneys' fees and costs) shall be borne in the
manner determined by the arbitrators;
(vi) The decision of the arbitrators shall be
reduced to writing; final and binding without the right of
appeal; the sole and exclusive remedy regarding any claims,
counterclaims, issues or accounting presented to the
arbitrators; made and promptly paid in United States dollars
free of any deduction or offset; and any costs or fees
incident to enforcing the award shall, to the maximum extent
permitted by law, be charged against the party resisting such
enforcement;
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(vii) The award shall include interest from the
date of any breach or violation of this Agreement, as
determined by the arbitral award, and from the date of the
award until paid in full, at 7% per annum; and
(viii) Judgment upon the award may be entered in any
court having jurisdiction over the person or the assets of the
party owing the judgment or application may be made to such
court for a judicial acceptance of the award and an order of
enforcement, as the case may be.
4.10 Survival. The covenants and agreements of the parties set
forth in Article 4 (Miscellaneous) are of a continuing nature and shall survive
the expiration, termination or cancellation of this Agreement, regardless of
the reason therefor.
4.11 Binding Effect, Etc. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the
business or assets of the Company, spouses, heirs, and personal and legal
representatives. The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all, or a substantial part, of the business or assets of the
Company, by written agreement in form and substance satisfactory to the
Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place.
* * * * *
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14
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its officer thereunto duly authorized, and Executive has signed
this Agreement, all as of the day and year first above written.
MONARCH DENTAL CORPORATION
By: /s/ XXXX X. XXXX
-------------------------------------
Xxxx X. Xxxx, Chief Executive Officer
/s/ XXXXXX X. XXXXXXX
-------------------------------------
Xxxxxx X. Xxxxxxx, D.D.S.
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