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EXHIBIT 10
EMPLOYMENT AGREEMENT
OF
XXXXXX X. XXXXXXXXXX
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into between ENVOY
Corporation, a Tennessee corporation ("Company"), and Xxxxxx X. Xxxxxxxxxx
("Executive"), effective as of January 1, 1998 (the "Effective Date"). The
Company and the Executive are sometimes referred to herein as the "Parties".
In consideration of the mutual covenants contained in this Agreement
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, the parties hereby agree
as follows:
1. Employment: The Company hereby employs the Executive and the Executive
hereby accepts employment with the Company upon terms and conditions set forth
herein.
2. Duties and Responsibilities:
2.1 Extent of Service: The Executive shall, during the term of this
Agreement, devote such of her entire time, attention, energies and business
efforts ("Business Efforts") to her duties as an Executive of the Company as are
reasonably necessary to carry out her duties specified in Paragraph 2.2 below.
The Executive shall not, during the term of this Agreement, engage in any other
business activity (whether or not such business activity is pursued for gain,
profit or other pecuniary advantage) if such business activity would impair the
Executive's ability to carry out her duties hereunder. This Paragraph 2.1,
however, shall not be construed to prevent the Executive from investing her
personal assets as a passive investor.
2.2 Position and Duties: The Executive shall serve the Company as
Senior Vice President of Operations; and shall perform, faithfully and
diligently, the services and functions relating to such office or otherwise
reasonably incident to such office as may be designated from time to time by the
Board of Directors of the Company; provided that all such services and functions
shall be reasonable and within the Executive's area of expertise; and provided
further that the Executive shall be physically capable of performing the same.
2.3 Place of Employment: During the term of this Agreement, the
Executive's primary place of employment shall be in Nashville, Tennessee, unless
otherwise mutually
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agreed by the Company and Executive. During the term of this Agreement, the
Company will provide the Executive with a private office and other customary
staff support services, all as are commensurate with the services and functions
to be performed by her hereunder.
3. Salary and Other Benefits: Subject to the terms and conditions of this
Agreement:
3.1 Salary: As compensation for her services under and during the
term of her employment under this Agreement, the Executive shall be paid an
annual salary of not less than $140,000, payable in accordance with the then
current payroll policies of the Company. Such salary shall be subject to
increase by the Board of Directors of the Company (or the appropriate committee
thereof) at the beginning of each calendar year, or otherwise as consistent with
the timing of employee pay increases. The annual salary shall be payable
pursuant to this Paragraph 3.1 in accordance with the Company's regular payroll
practices from time to time (hereinafter sometimes referred to as her "Base
Salary").
3.2 Other Benefits: As long as the Executive is employed by the
Company, the Executive shall be entitled to receive the following benefits in
addition to her Base Salary:
(a) The Executive shall have the right to participate in all
group benefit plans of the Company (including without limitation,
disability, accident, medical, life insurance, hospitalization and
pension) and stock and other incentive plans (including without
limitation stock option, stock appreciation or other similar stock
based plans), all in accordance with the Company's regular practices
with respect to its senior management employees.
(b) The Executive shall be entitled to reimbursement from the
Company for reasonable out-of-pocket expenses incurred by her in the
course of the performance of her duties hereunder.
(c) The Company shall pay Executive an annual bonus, payable
during the first quarter of each year based on the previous year's
performance of up to 25% of Base Salary subject to performance criteria
established by the Board of Directors.
(d) The Executive shall be entitled to such vacation, holidays
and other paid or unpaid leaves of absence as are consistent with the
Company's other senior management employees.
4. Term: The term of this Agreement shall be for an initial period of
three (3) years following the Effective Date (the "Initial Term"), and shall
thereafter automatically be extended for additional periods of one year on a
yearly basis, unless on or before 30 days prior to the expiration of any
subsequent year period, either the Executive or the Company
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gives the other party notice that the term of this Agreement will not be so
extended, in which case the term of this Agreement will end at the end of such
period as designated in the notice.
5. Termination and Resignation: During the Initial Term, the Company shall
have the right to terminate the Executive's employment hereunder at any time
only for Cause. Following the Initial Term, the Company shall have the right to
terminate Executive's employment hereunder at any time and for any reason. Upon
any termination by the Company, the Executive shall be entitled to receive from
the Company prompt payment of the amounts determined pursuant to Paragraph 6.
The Executive shall have the right to terminate her employment hereunder at any
time by resignation, and she shall thereupon be entitled to receive from the
Company prompt payment of the amount determined pursuant to Paragraph 6 below.
6. Payments Upon Termination and Resignation:
6.1 Pro Rata Payments: If (a) the Company at any time terminates
the Executive's employment for Cause (as defined in Section 6.3 below) or (b)
the Executive voluntarily resigns for any reason other than because of an
uncured material breach by the Company of any term of this Agreement, then in
each case the Executive shall be entitled to receive only her Base Salary and
any other accrued benefits due Executive in accordance with Paragraph 3.2(a) on
a pro rata basis to the date of termination plus reimbursement of expenses
through the date of termination in accordance with Paragraph 3.2(b). If the
Executive at any time dies or becomes disabled (being defined as the inability
of the Executive to perform her normal employment duties for the remainder of
the term of this Agreement because of either physical or mental incapacity), the
Executive shall be entitled to receive only her Base Salary plus Bonus and any
other accrued benefits due Executive in accordance with Paragraph 3.2(a) on a
pro rata basis and reimbursement of expenses in accordance with Paragraph 3.2(b)
to the date of termination or resignation. For purposes of this Paragraph 6.1,
"pro rata" shall mean the product of the Executive's annual Base Salary and
Bonus that would have been payable had the Executive's employment not terminated
multiplied by a fraction the denominator of which is 365 and the numerator of
which is the number of days during the calendar year that have passed through
the date of the termination of the Executive's employment.
6.2 Base Salary Payment: If (a) the Company terminates this
Agreement or the Executive's employment without Cause following the Initial Term
or (b) the Executive resigns because of the uncured material breach by the
Company of any term of this Agreement, then in each case the Executive shall be
entitled to receive her Base Salary for a period of six months following such
termination in accordance with the Company's regular payroll practices.
Furthermore, if Executive has not secured regular full-time employment within
the six month period following the termination date, the Company will
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continue to pay her current Base Salary for up to an additional eighteen months
or until such time as Executive secures regular full-time employment, whichever
is the earlier to occur. The additional eighteen months pay will be evaluated on
a monthly basis. Following such termination and in furtherance hereof, Executive
agrees to actively seek new regular full-time employment, to provide the Company
evidence of her efforts to secure new regular full-time employment and to
promptly notify the Company if she secures such employment.
6.3 Definition of Cause: Termination by the Company of the
Executive's employment for "Cause" shall mean termination (a) upon the willful
misappropriation of funds or properties of the Company; (b) the willful
contravention of the standards referred to in the last sentence of Paragraph 7
below; (c) Executive's gross negligence in the performance of her duties
hereunder, intentional nonperformance or misperformance of such duties, or
refusal to abide by or comply with the directives of the Board of Directors, her
superior officers, the Company's policies and procedures, which actions continue
for a period of at least five days after receipt by the Executive of written
notice of the need to cure or cease; (d) Executive's willful dishonesty, fraud,
or misconduct with respect to the business or affairs of the Company; and (e)
Executive's conviction of a felony or other crime involving moral turpitude. For
purposes of this definition, no act, or failure to act, on the Executive's part
shall be considered "willful" unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the Executive's
action or omission was in the best interest of the Company.
7. Preservation of Business; Fiduciary Responsibility: The Executive shall
use her reasonable best efforts to preserve the business and organization of the
Company, to keep available to the Company the services of present employees and
to preserve the business relations of the Company with suppliers, distributors,
customers and others. The Executive shall not commit any act, or in any way
assist others to commit any act, which could reasonable be expected to injure
the Company in any material respect. So long as the Executive is employed by the
Company, the Executive shall observe and fulfill proper standards of fiduciary
responsibility attendant upon her service and office.
8. Restrictive Covenants:
8.1 Covenants Against Competition: Executive acknowledges that (a) the
business of the Company and its affiliates is as described in the Company's
annual report on Form 10-K as filed with the Securities and Exchange Commission
for its fiscal year ended December 31, 1997, and thereafter as described in each
successive annual report on Form 10-K filed by the Company (the "Company
Business"); and (b) Executive's work relating to Company Business will bring her
into close contact with many confidential matters not readily available to the
public.
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8.2 Non-Compete: During the term of this Agreement and for a period of
two (2) years following the termination of Executive's employment with the
Company (including any renewal periods as provided in Paragraph 4), whether
Executive's employment terminates pursuant to the provisions of Paragraph 5 of
this Agreement or otherwise (collectively, the "Restricted Period"), Executive
covenants and agrees that she will not, without the express approval of the
Board of Directors, anywhere in the continental United States engage in any
business, as an individual, partner, shareholder, officer, director, principal,
agent, employee, trustee, consultant or in any other relationship or capacity,
if such business is competitive with the Company Business; provided, however,
that Executive may own, directly or indirectly, solely as an investment,
securities of any entity if Executive (a) is not a controlling person with
respect to such entity and (b) does not, directly or indirectly, own five
percent or more of any class of the securities of such entity.
8.3 Trade Secrets; Confidential Information: Executive covenants and
agrees that at all times during and after the Restricted Period, she shall keep
secret and not disclose to others or appropriate to her own use or the use of
others any trade secrets, or secret or confidential information or knowledge
pertaining to the Company Business or the affairs of the Company or any of its
affiliates including without limitation trade know-how, trade secrets,
consultant contracts, customer lists, pricing policies, operational methods,
marketing plans or strategies, product development techniques or plans, business
acquisition plans, new personnel acquisition plans, technical processes, designs
and design projects, inventions and research projects. Information shall not be
deemed confidential or secret for purposes of this Agreement if it is generally
known in the industry.
8.4 Executives of the Company: During the Restricted Period, Executive
shall not directly or indirectly hire away or solicit to hire away from the
Company or any of its affiliates any employee of the Company Business or its
affiliates.
8.5 Property of the Company: All memoranda, notes, lists, records and
other documents (and all copies thereof) made or compiled by Executive relating
to the Company Business or made available to Executive during her employment by
the Company concerning the business or affairs of the Company Business or any of
its affiliates, other than any of such which may also pertain personally to
Executive, shall be the exclusive property of the Company and shall be delivered
to the Company promptly upon the termination of Executive's employment with the
Company or at any other time on request by the Board of Directors of the Company
or such affiliates.
8.6 Rights and Remedies Upon Breach: If Executive breaches, or
threatens to commit a breach of, any of the provisions of Paragraphs 8.2 through
8.5 of this Agreement (collectively, the "Restrictive Covenants"), the Company
shall have the following rights and remedies, each of which shall be independent
of the other and severally enforceable, and all of which shall be in addition
to, and not in lieu of, any other rights and remedies
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available to the Company: (a) the right and remedy to have any of the
Restrictive Covenants specifically enforced by any court having jurisdiction and
in Tennessee by an arbitration panel as provided in Paragraph 11 of this
Agreement, it being hereby acknowledged and agreed by Executive that any such
breach or threatened breach will cause irreparable injury to the Company and
that money damages will not provide an adequate remedy to the Company; and (b)
the right and remedy to require Executive to account for and pay over to the
Company all compensation, profits, monies, accruals, increments or other
benefits derived or received by Executive as a result of any transactions
constituting a breach of any of the Restrictive Covenants, and Executive shall
account for and pay over such benefits to the Company.
8.7 Severability of Restrictive Covenants: If it is determined that any
of the Restrictive Covenants, or any part thereof, is invalid or unenforceable,
the remainder of the Restrictive Covenants shall not thereby be affected and
shall be given full effect, without regard to the invalid portions. If it is
determined that any of the Restrictive Covenants, or any part thereof, is
unenforceable because of the duration of such provision, the geographical area
covered thereby, or any other determination of unreasonableness of the
provision, the arbitration panel making such determination shall have the power
to reduce the duration, area or scope of such provision and, in its reduced
form, such provision shall then be enforceable and shall be enforced.
9. Notice: All notices, requests, demands and other communications given
under or by reason of this Agreement shall be in writing and shall be deemed
given when delivered in person, by facsimile or other electronic transmission or
when mailed, by certified mail (return receipt requested), postage prepaid,
addressed as follows (or to such other address as a party may specify by notice
pursuant to this provision):
(a) To the Company:
ENVOY Corporation
00 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Vice President, General Counsel and Secretary
Facsimile: (000) 000-0000
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(b) To Executive:
Xxxxxx X. Xxxxxxxxxx
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10. Controlling Law and Performability: The execution, validity,
interpretation and performance of this Agreement shall be governed by the laws
of the State of Tennessee.
11. Arbitration: Any dispute or controversy arising under or in connection
with this Agreement shall be settled by arbitration in Nashville, Tennessee. In
the proceeding, the Executive shall select one arbitrator, the Company shall
select one arbitrator and the two arbitrators so selected shall select a third
arbitrator. The decision of a majority of the arbitrators shall be binding on
the Executive and the Company. Should one party fail to select an arbitrator
within five days after notice of the appointment of an arbitrator by the other
party or should the two arbitrators selected by the Executive and the Company
fail to select an arbitrator within ten days after the date of the appointment
of the last of such two arbitrators, any person sitting as a Judge of the United
States District Court for the Middle District of Tennessee, Nashville Division,
upon application of the Executive or the Company, shall appoint an arbitrator to
fill such space with the same force and effect as though such arbitrator had
been appointed in accordance with the second sentence of this Paragraph 11. Any
arbitration proceeding pursuant to this Paragraph 11 shall be conducted in
accordance with the rules of the American Arbitration Association. Judgment may
be entered on the arbitrators' award in any court having jurisdiction.
12. Additional Instruments: The Parties shall execute and deliver any and
all additional instruments and agreements that may be necessary or proper to
carry out the purposes of this Agreement.
13. Entire Agreement and Amendments: This Agreement contains the entire
agreement of the Parties relating to the matters contained herein and supersedes
all prior agreements and understandings, oral or written, between the Parties
with respect to the subject matter hereof. This Agreement may be changed only by
an agreement in writing signed by the Party against whom enforcement of any
waiver, change, modification, extension or discharge is sought.
14. Severability: If any provision of the Agreement is rendered or declared
illegal or unenforceable by reason of any existing or subsequently enacted
legislation or by the decision of any arbitrator or by decree of a court of last
resort, the Parties shall promptly meet and negotiate substitute provisions for
those rendered or declared illegal or unenforceable to preserve the original
intent of this Agreement to the extent legally possible, but all other
provisions of this Agreement shall remain in full force and effect.
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15. Assignments: The Company may assign (whether by operation of law or
otherwise) this Agreement only with the written consent of the Executive, which
consent shall not be withheld unreasonably, and in the event of an assignment of
this Agreement, all covenants, conditions and provisions hereunder shall inure
to the benefit of and be enforceable against the Company's successors and
assigns. The rights and obligations of Executive under this Agreement are
personal to her, and no such rights, benefits or obligations shall be subject to
voluntary or involuntary alienation, assignment or transfer.
16. Effect of Agreement: Subject to the provisions of Paragraph 15 with
respect to assignments, this Agreement shall be binding upon the Executive and
his heirs, executors, administrators, legal representatives and assigns and upon
the Company and respective successors and assigns.
17. Execution: This Agreement may be executed in multiple counterparts each
of which shall be deemed an original and all of which shall constitute one and
the same instrument.
18. Waiver of Breach: The waiver by either Party of a breach of any
provision of the Agreement by the other Party shall not operate or be construed
as a waiver by such Party of any subsequent breach by such other Party.
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IN WITNESS WHEREOF, the Parties have executed this Agreement on this 20th
day of April, 1998.
ENVOY CORPORATION
By: /s/ Xxx Xxxxx
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Name: Xxx X. Xxxxx
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Title: President and Co-CEO
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EXECUTIVE:
/s/ Xxxxxx X. Xxxxxxxxxx
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XXXXXX X. XXXXXXXXXX
