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Exhibit 10(d)
EMPLOYMENT AGREEMENT AMONG COMPMANAGEMENT, INC.,
COMPMANAGEMENT HEALTH SYSTEMS, INC., AND
XXXXXX X. XXXXXXX, DATED AS OF JANUARY 1, 2000
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EMPLOYMENT AGREEMENT
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This agreement is made effective as of January 1, 2000, among
CompManagement, Inc., an Ohio corporation ("CMI"), CompManagement Health
Systems, Inc., an Ohio corporation ("CHS") (CMI and CHS are hereinafter referred
to collectively or individually, as the context may require, as the "Company"),
and Xxxxxx X. Xxxxxxx (the "Employee"), who hereby agree as follows:
ss.1. Employment. The terms and conditions of this agreement shall
supersede and replace in their entirety the terms and conditions of the
Employment Agreement between CMI and the Employee dated as of July 21, 1995, as
amended (the "Prior Employment Agreement"); provided, however, that no
provisions of this agreement shall supersede or replace any noncompetition
and/or confidentiality provisions contained in the Prior Employment Agreement,
which noncompetition and confidentiality provisions are restated in, and
continued pursuant to, this agreement. The Company hereby renews and continues
the Employee's employment, and the Employee hereby accepts such employment
renewal and continuation by the Company, on the terms and subject to the
conditions set forth in this agreement.
ss.2. Term of Employment. The term of the Employee's employment by the
Company as renewed pursuant to this agreement shall begin on the effective date
of this agreement and shall end, unless sooner terminated in accordance with the
provisions of ss.9, below, on December 31, 2002 (the "First Term"). Unless
terminated in accordance with the provisions of ss.9, below, the Employee's
employment under this agreement shall automatically continue after the
expiration of the First Term upon the same terms and conditions contained in
this agreement, or upon such other terms and conditions to which the parties may
mutually agree in writing, for successive two-year periods (each a "Renewal
Term"), commencing on the day following the termination date of the First Term
or the preceding Renewal Term, as the case may be, and ending, unless sooner
terminated in accordance with the provisions of ss.9, below, on the second
anniversary of the applicable termination date.
ss.3. Services. The Employee shall continue to serve as the Chief
Executive Officer of the Company. As such, the Employee shall perform such
services as may be reasonably assigned to him in order to enable him to carry
out the responsibilities and authority granted to him under this agreement. The
Employee shall devote his full business time, attention, energy, and skill to
the Company's business, provided that he shall be entitled to take vacations and
sick leaves as may be provided pursuant to this agreement or the Company's
established policies. The Employee shall not engage in any business or
investment activity (whether or not competitive with the Company) which requires
any substantial time on his part.
ss.4. Responsibilities; Authority. As the Chief Executive Officer of
the Company, the Employee shall be responsible for supervising and implementing
the Company's policies and operating programs, budgets, procedures, and
directions established or changed from time to time (collectively, the "Policies
and Programs") by the Chairman of the Board or the Board of Directors of the
Company or the Chairman of the Board or the Board of Directors of Health
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Power, Inc., a Delaware corporation ("Health Power"). Such responsibilities
shall include, without limitation, the following: supervising the development of
the Company's financial and operational goals and objectives and implementing
strategies to achieve such goals and objectives within budgeted amounts;
planning and developing the Company's financial and operational budgets and
projections; supervising the development of financial and operational goals and
objectives for each business segment of the Company and implementing strategies
to achieve such goals and objectives within each business segment's budgeted
amounts; providing guidance in employment and personnel matters; and performing
all other activities related to the business policies and financial planning of
and for the Company. The Employee shall report to the Chairman of the Company
and shall consult with the Chairman of the Company, from time to time, on all
matters relating to the business policies and financial planning of and for the
Company.
The Employee shall have the authority on behalf of the Company to
manage and conduct the operations of the Company in the ordinary course of its
business pursuant to the Policies and Programs of the Company and the Policies
and Programs of Health Power which are applicable to the Company, provided that
the Employee shall not take any of the following actions without the prior
approval of the Chairman of the Company:
(a) Incur capital expenditures or acquire assets having a
price in excess of $50,000 or incur expenditures, debts, liabilities,
or other financial commitments in excess of $50,000, unless the
incurrance of such expenditures, debts, liabilities, or other financial
commitments or the acquisition of such assets are in accordance with
budgets previously approved by the Board of Directors of the Company or
Health Power;
(b) Grant any mortgage, security interest, or other
encumbrance on any assets of the Company;
(c) Employ, change the compensation, or terminate the
employment of the President or any Executive Vice President of the
Company; or enter into any employment agreement not terminable at the
will of the Company; or
(d) Enter into any transaction, agreement, or take any other
action that is outside the ordinary course of the Company's business or
contrary to the Policies and Programs of the Company or the Policies
and Programs of Health Power applicable to the Company.
ss.5. Compensation. The Employee shall receive the following
compensation:
(a) Base Salary. A base salary of $280,000 per annum, or, if
the term of the Employee's employment is renewed, such greater base
salary (the "Base Salary") as may be approved by Health Power's
Compensation Committee (the "Committee") from time to time, payable in
accordance with the Company's general policies for payment of
compensation to its salaried personnel.
(b) Sales Commissions. Sales commissions as provided inss.6,
below.
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(c) Performance-Based Incentive Bonus. An annual
performance-based cash incentive bonus in an amount up to 35% of the
Base Salary (the "Bonus"). The Bonus shall be earned and paid in
accordance with the Health Power, Inc. Performance-Based Incentive
Compensation Plan (the "Incentive Plan"). Under the Incentive Plan,
beginning with the 2000 Calendar Year (as defined in ss.6(d), below),
and continuing for each Calendar Year thereafter during the First Term
or any Renewal Term, as the case may be (each a "Performance Year"),
the Committee shall establish in writing objective performance criteria
or goals to be achieved by the Employee for that Performance Year (the
"Performance Goals"). The Performance Goals shall be based upon the
performance measures set forth in the Incentive Plan. A copy of the
Performance Goals as established by the Committee shall be provided to
the Employee. After the completion of each Performance Year, the
Committee shall review the achievement of the Performance Goals by the
Employee and make a determination as to the amount of the Bonus earned
by the Employee based upon the Employee's achievement of such
Performance Goals. The Bonus shall be payable as provided in the
Incentive Plan.
(d) Stock Options. Incentive stock options (the "Options") to
purchase up to 70,000 shares of common stock, $0.01 par value (the
"Shares"), of Health Power under the proposed Health Power, Inc. 2000
Management Stock Option Plan (the "Management Plan"). The Company
covenants to the Employee as follows: (i) the Company will take all
actions necessary to present the Management Plan to the directors of
Health Power for their approval at their March 2000 quarterly Board of
Directors meeting; (ii) if the Management Plan is approved of by the
directors, the Company will take all actions necessary to reserve a
sufficient number of Shares for issuance upon the exercise of the
Options; and (iii) if the Management Plan is approved of by the
directors, the Company will thereafter take all actions necessary to
present the Management Plan to the stockholders of Health Power for
their approval at Health Power's 2000 annual meeting of stockholders.
The Employee acknowledges and understands that (A) the grant of the
Options to the Employee is subject to the condition that the Management
Plan be approved by the directors of Health Power, and (B) the grant of
the Options to the Employee is further subject to the condition that
the Management Plan be approved by the stockholders of Health Power at
such annual meeting, and that if such approval is not received from
stockholders, the grant of the Options shall be automatically null and
void and without further force or effect
If the Management Plan is approved by Health Power's directors
and stockholders, then the Options shall be at an exercise price equal
to the closing market price of the Shares on the last business day
immediately preceding the date of the 2000 annual meeting. No Options
shall vest until December 31, 2000. On December 31, 2000, and on each
December 31 thereafter until December 31, 2004, 14,000 Options shall
become fully vested in the name of the Employee. Upon receipt of
stockholder approval of the Management Plan, the Employee and Health
Power shall enter into a stock option agreement (the "Stock Option
Agreement") reflecting the grant of the Options on the foregoing terms.
The grant of the Options and the exercise thereof shall be subject to
all of the terms and conditions of the Management Plan and the Stock
Option Agreement.
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(e) Automobile Allowance. $600 per month as an automobile
allowance plus reimbursement of automobile expenses in accordance with
the Company's policies, subject to the submission of appropriate
reports to the Company.
(f) Corporate Golf Membership. Participation in a corporate
membership at the Heritage Golf Club.
ss.6. Sales Commissions. The Employee shall receive the following sales
commissions:
(a) CMI Sales Commissions. The Company shall pay to the
Employee sales commissions on the CMI Fees (as defined below) generated
by the sales efforts of the Employee (the "CMI Sales Commissions"). The
CMI Sales Commissions shall be in an amount up to (i) 25% of the amount
(subject to allocation as described in subsection (d), below) of the
CMI Fees for the first year of business from a CMI Employer (as defined
below), which CMI Fees were generated by the sales efforts of the
Employee, plus (ii) 25% of the amount (subject to allocation as
described in subsection (d), below) of the increase in CMI Fees from
one Calendar Year to the next Calendar Year from CMI Employers who are
part of group rating plans of CMI, which CMI Fees were generated by the
sales efforts of the Employee.
CMI Sales Commissions shall be payable on CMI Fees applicable
to CMI Employers located in any state or jurisdiction in which CMI is
authorized and approved to conduct business. With respect to a business
acquisition by CMI (whether such acquisition is structured as an asset,
stock, merger, or other similar type of transaction), no CMI Sales
Commissions shall be payable with respect to any fees received by CMI
from any employer who, at the time of such acquisition, was a client or
customer of the business acquired by CMI, except to the extent payable
pursuant to (ii) of this subsection (a).
For purposes of this agreement: (A) "CMI Fees" shall mean fees
payable to CMI for its performance of third party administrative
services for workers' compensation and unemployment compensation claims
on behalf of CMI Employers; and (B) a "CMI Employer" shall mean any
employer which receives third party administrative services for
workers' compensation or unemployment compensation claims from CMI.
(b) CHS Sales Commissions. The Company shall pay to the
Employee sales commissions on the CHS Fees (as defined below) generated
by the sales efforts of the Employee (the "CHS Sales Commissions") in
an amount up to 25% of the amount (subject to allocation as described
in subsection (d), below) of the CHS Fees for the first year of
business from a CHS Employer, which CHS Fees were generated by the
sales efforts of the Employee.
CHS Sales Commissions shall be payable on CHS Fees applicable
to CHS Employers located in any state or jurisdiction in which CHS is
authorized and approved
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to conduct business. With respect to a business acquisition by CHS
(whether such acquisition is structured as an asset, stock, merger, or
other similar type of transaction), no CHS Sales Commissions shall be
payable with respect to any fees received by CHS from any employer who,
at the time of such acquisition, was a client or customer of the
business acquired by CHS.
For purposes of this agreement: (A) "CHS Fees" shall mean the
fees payable to CHS for its performance of managed care organization
("MCO") services on behalf of CHS Employers; and (B) a "CHS Employer"
is any employer which receives MCO services from CHS.
(c) Sales Commissions on Other Services and Products. In
addition to the payment of sales commissions relating to third party
administrative services for workers' compensation and unemployment
compensation claims and MCO services, as described above, the Company
shall pay to the Employee sales commissions on fees payable to the
Company with respect to the Company's other services and/or products
(collectively, the "Other Services"), which fees were generated by the
sales efforts of the Employee. Such sales commissions shall be payable
only on the first year of fees payable by a customer of the Company for
one or more of the Other Services. The amount of sales commissions for
Other Services shall vary with respect to each service or product
offered by the Company, with the amount of sales commissions ranging
from 10% to up to 25% of the fees for each Other Service. The amount of
sales commissions for each Other Service shall be determined by the
Chief Executive Officer of the Company and shall be subject to
allocation as described in subsection (d), below.
With respect to a business acquisition by the Company (whether
such acquisition is structured as an asset, stock, merger, or other
similar type of transaction), no sales commissions on Other Services
shall be payable with respect to any fees received by the Company from
any customer who, at the time of such acquisition, was receiving such
service or product from the business acquired by the Company.
(d) Allocation of Commissions. The Employee acknowledges and
agrees that the sales commission amount described in subsections (a),
(b), and (c), above, represents the total amount of sales commissions
which are payable with respect to the service or product described in
that subsection, and that the sales commission amount may be allocated
by the Company among all of the salespersons participating in the sales
effort to that employer or customer. The Chief Executive Officer of the
Company shall have the authority to allocate the sales commission
amount in any manner such officer deems appropriate, in his reasonable
discretion. In the event of any dispute regarding the allocation by the
Chief Executive Officer of the sales commission amount, such dispute
shall be referred to, and resolved by, the Committee, whose
determination shall be binding and conclusive on all parties.
(e) Miscellaneous. All sales commissions described in this
ss.6 shall be determined on a Calendar Year basis. The payment of the
CMI Sales Commissions shall accrue upon the execution of a contract
with the CMI Employer. The payment of the
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CHS Sales Commissions shall accrue upon (i) CHS receiving notification
from the appropriate state agency that the CHS Employer has selected
CHS as its MCO, or (ii) the execution of a contract with the CHS
Employer. The payment of the sales commissions on Other Services shall
accrue upon the execution of a contract with the party receiving the
Other Services. In no event shall there exist any obligation to pay any
sales commissions under this ss.6 unless and until the corresponding
fees has been received from the employer or customer. For purposes of
this ss.6 only, the term "CMI" shall include any Health Power Company
(as defined in ss.10(g), below) that performs third party
administrative services for workers' compensation and unemployment
compensation claims, the term "CHS" shall include any Health Power
Company that performs MCO services, and the term "Company shall mean
the Health Power Company the performs the Other Services. For purposes
of this agreement, a "Calendar Year" shall mean the period from January
1 through December 31 of the same year.
ss.7. Fringe Benefits. The Employee shall be entitled to the following
fringe benefits:
(a) Such fringe benefits and perquisites as may be generally
provided by the Company to its salaried personnel pursuant to the
Company's established policies.
(b) Payment of the premiums with respect to the Employee's
existing death and disability insurance policies.
ss.8. Severance Pay. If the Employee's employment is terminated by the
Company for any reason other than "just cause" (as defined inss.9, below), or is
terminated by either the Company or the Employee at the expiration of the First
Term or any Renewal Term, then the Employee shall receive the following:
(a) Payment of any Base Salary, CMI Sales Commissions, CHS
Sales Commissions, and vacation pay accrued through the date of
termination of employment.
(b) Severance pay in an amount equal to (i) an amount equal to
two times the Base Salary in effect at the time of termination of
employment, plus (ii) an amount equal to the aggregate amount of CMI
Sales Commissions and CHS Sales Commissions earned by the Employee
pursuant to ss.6, above, for the Calendar Year of termination (if such
termination is at the expiration of the First Term or a Renewal Term)
or the Calendar Year immediately prior to termination (in any other
case), but only with respect to those CMI Employers and CHS Employers
who renew or maintain their business with the Company during the
one-year period immediately after such termination.
(c) Benefits comparable to the fringe benefits described in
ss.7, above, until the earlier of two years from the date of
termination or the date any such benefit is provided to the Employee by
another employer.
If the severance compensation under this section would constitute a
"parachute payment," as defined in Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), such severance compensation shall be reduced to
the largest amount as will result in no portion
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of the severance compensation payments under this section being subject to the
excise tax imposed by Section 4999 of the Code or being disallowed as deductions
to the Company under Section 280G of the Code.
Payment of the amounts described in subsection (a), above, shall be
made within 30 days after the termination of employment and payment of the
amounts described in subsection (b), above, shall be made over a two-year period
commencing with the termination of employment, in the same manner as the Base
Salary is paid during employment.
In the event of termination of the Employee's employment by the Company
for just cause, the Employee shall be entitled to accrued compensation as
provided in subsection (a), above, and to no further compensation.
If the Employee receives severance pay in accordance with subsection
(b), above, due to a termination of employment by the Employee at the expiration
of the First Term or any Renewal Term, and if during the two-year payment period
the Employee is compensated for services rendered either for an employer or as
an independent consultant, the amount of such compensation shall be used to
offset the Company's obligations to make the severance payments under subsection
(b), above; provided, however, that the Employee shall not be obligated to seek
other employment during such two-year period. If the Employee receives severance
pay in accordance with subsection (b), above, due to any other event, the
Employee shall not be obligated to seek other employment by way of mitigation of
the amounts payable to the Employee under such subsection, nor shall the
Employee's acceptance of other employment affect the Company's obligation to
make the severance payments required under subsection (b), above.
The Employee, the Company, and Health Power are parties to an Executive
Severance Benefits Agreement dated as of August 26, 1999, as such agreement may
be hereafter amended (the "Executive Severance Benefits Agreement"). No breach
of this agreement shall occur if the Employee's employment is terminated in such
a manner that entitles him to receive benefits under the Executive Severance
Benefits Agreement. Furthermore, if the Employee receives benefits under the
Executive Severance Benefits Agreement, then such benefits shall be the
exclusive severance benefits receivable by the Employee from the Company, and
the benefits received under the Executive Severance Benefits Agreement shall
supersede and replace any and all severance benefits that the Employee may be
entitled to receive from the Company under this ss.8. The Executive Severance
Benefits Agreement shall not supersede or replace the Employee's severance
benefits that the Employee may be entitled to receive from the Company under
this ss.8 if the Employee is not entitled to receive the severance benefits
accorded to the Employee under the Executive Severance Benefits Agreement.
ss.9. Termination of Employment. The Employee's employment under this
agreement may be terminated:
(a) By the Company upon the occurrence of any event which
constitutes just cause, as defined below, or at any time thereafter.
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(b) By the Employee or the Company, with or without cause, at
the end of the First Term or any Renewal Term upon giving not less than
45 days advance written notice prior to the end of the First Term or
the Renewal Term then in effect, as the case may be, provided that the
Employee shall continue to perform all services under this agreement
until the earlier of: (i) the expiration date of such 45 day period; or
(ii) any earlier date which may be specified by the Company. If the
Employee's employment is terminated pursuant to this subsection (b),
then the Employee shall be entitled to receive the severance pay and
benefits described in ss.8(b) and (c), above.
(c) By the Company for any reason other than just cause upon
the giving of written notice to the Employee. If the Employee's
employment is terminated pursuant to this subsection (c), then Employee
shall be entitled to receive the severance pay and benefits described
in ss.8(b) and (c), above.
For purposes of this agreement, "just cause" shall mean the termination
of the Employee for: (i) any act of habitual drunkenness; (ii) controlled
substance abuse; (iii) dishonesty; (iv) criminal conduct (excluding minor
traffic offenses); (v) acts of violence or willful destruction of Company
property; (vi) falsification of any Company records or withholding of any
relevant information; (vii) unethical or immoral behavior; (viii) being
intoxicated or using intoxicants (drugs) not prescribed by a physician during
working hours; (ix) theft, including unauthorized possession of Company
property; (x) failure to perform the Employee's responsibilities and duties in
accordance with the Policies and Programs of the Company or the Policies and
Programs of Health Power applicable to the Company, other than any such Policies
or Programs that would require the Employee to engage in any unethical, immoral,
or criminal behavior, and failure to correct such failure within ten days after
notice from the Company (specifying the corrective actions required) to do so
or, if it is impossible to correct such failure within such ten days, failure to
commence all possible actions to correct such failure within such ten days and
thereafter to continue to pursue such actions until correction of such failure,
or having corrected any such failure, fails to so perform appropriately at any
time in the future (without the requirement of any additional notice from the
Company); (xi) failure to fully perform and observe all obligations and
conditions to be performed and observed by the Employee under this agreement, or
under any other agreement between the Employee and the Company, and failure by
the Employee to correct such failure within ten days after notice from the
Company (specifying the corrective actions required) to do so or, if it is
impossible to correct such failure within such ten days, failure to commence all
possible actions to correct such failure within such ten days and thereafter to
continue to pursue such actions until correction of such failure, or having
corrected any such failure, fails to perform and observe all such obligations
and conditions at any time in the future (without the requirement of any
additional notice from the Company); (xii) failure to fully perform and observe
all obligations and conditions to be performed and observed by the Employee
which relate to obligations and conditions to be performed and observed by the
Company under any material lease, agreement, note, or other document to which
the Company is a party, and failure of the Employee to correct such failure
within ten days after notice from the Company (specifying the corrective actions
required) to do so or, if it is impossible to correct such failure within such
ten days, failure to commence all possible actions to correct such failure
within such ten days and thereafter to continue to pursue such actions until
correction of such failure, or having so corrected any such failure, fails to
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perform and observe all such obligations and conditions at any time in the
future (without the requirement of any additional notice from the Company); or
(xiii) death or long-term disability.
For purposes of this agreement, a long-term disability shall mean that:
(A)(1) because of physical or mental incapacity, it is probable, in the opinion
of a licensed physician selected by the Company and acceptable to the Employee
(or his personal representative or guardian if the Employee is incapacitated),
that the Employee will not be able to engage actively in full-time employment by
the Company for a period of 120 days or longer, or (2) the Employee is disabled
under the definition of the disability policy or policies maintained by the
Company for the benefit of the Employee; or (B) the Company selects such a
licensed physician and the Employee fails within a reasonable time to submit to
any examinations reasonably requested by that licensed physician.
ss.10. Noncompetition and Confidentiality. As part of a transaction in
which Health Power acquired all of the outstanding capital stock of CMI, the
Employee and CMI agreed to substantially the following provisions in the Prior
Employment Agreement. The Company the Employee hereby reaffirm the
noncompetition and confidentiality provisions of the Prior Employment Agreement
and, in consideration of the increase in base salary, the cash incentive bonus,
and the stock options being granted pursuant to the Management Plan, the
Employee agrees as follows:
(a) The Employee shall not at any time, either during the term
of his employment with the Company or any of the other Health Power
Companies (as defined below), or after the termination of such
employment for whatever reason,
(i) Disclose to anyone (except to the extent
necessary as a benefit to the Company in the performance of
his duties and with prior written authorization by the
Company) any trade secrets or confidential information, or
(ii) Solicit or seek to employ any employee of any
Health Power Company to leave the employ of such Company, or
(iii) Solicit, recruit, or otherwise attempt to
persuade the members or providers of any Health Power Company
to leave such Company and do business with competing
organizations.
For purposes of (ii) and (iii) of this subsection, publication
of an advertisement or notice in a publication of general solicitation
shall not constitute solicitation or recruitment.
(b) During the term of such employment, whatever it may be,
and within two years following the termination of such employment for
whatever reason (the "Non-Competition Period"), the Employee agrees
that he shall not, directly or indirectly, on his own behalf, or as a
member of any partnership, or as an officer, director, shareholder,
agent, consultant, or employee of any other corporation or entity,
compete with the Company or any of the other Health Power Companies or
be engaged in, loan money or
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credit to, own any interest in, be employed by or otherwise participate
in any other business which competes with the Company or any of the
other Health Power Companies in (i) Ohio or (ii) any other geographic
location (A) where the Company or any of the other Health Power
Companies conducted business during the term of the Employee's
employment by the Company or (B) where the Company or any of the other
Health Power Companies, with the Employee's knowledge, had taken
documented steps toward expanding into during the term of the
Employee's employment by the Company. The foregoing shall not be
construed to prohibit the Employee from owning, directly or indirectly,
less than 5% of the securities of any class of any company listed on a
national securities exchange or traded in the over-the-counter
securities market.
(c) The Employee understands that this section is an essential
element of this agreement and that the Company would not have entered
into this agreement without this section being included in it. The
Employee has consulted with his legal counsel and has been fully
advised concerning the reasonableness and propriety of this section in
the specific context of the operations and business of the Company, and
the Employee acknowledges that this section is reasonable and
appropriate in all respects. In the event of any violation or attempted
violation of this section, the Employee specifically acknowledges and
agrees that the Company's remedy at law will be inadequate, that the
Company, its business and business relationships will suffer
irreparable injury and, therefore, the Company shall be entitled to
injunctive relief upon such breach in addition to any other remedy to
which it may be entitled, either in law or in equity, without the
necessity of proof of actual damage.
(d) As used in this agreement, the terms "trade secrets" and
"confidential information" shall mean any information acquired by the
Employee in the course of his employment which is not generally known
to the public and which, if revealed to unauthorized persons, would be
detrimental to the reputation or business interests of the Company and
the other Health Power Companies and includes, but is not limited to,
any information relating to the Company's and its affiliates and
subsidiaries' business operations and structure, sales methods,
practices and techniques, technical know-how, advertising, or marketing
methods and practices, its provider relationship and membership lists
(including customer names and addresses), and the Company's and its
affiliates or subsidiaries' relationships with suppliers, providers,
and potential providers, employees, members and potential members or
other persons or entities doing business with the Company.
(e) The Non-Competition Period shall be tolled during the
period of any violation or attempted violation of this section by the
Employee, and during such period the Company shall have no obligation
to make any severance payment or provide any benefits to the Employee
pursuant to ss.8(b) and (c), above. The Company shall provide notice to
the Employee of any tolling of the Non-Competition Period.
(f) If any payment under ss.8(a) or (b), above, is not paid
when due and remains unpaid ten days after notice is given to the
Company by the Employee, a payment default shall exist. In the event of
a payment default by the Company, the
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Employee shall have the option to either (i) give notice to the Company
that the Employee elects not to abide by the noncompetition provisions
described in subsection (b), above, in which case the Employee shall be
automatically released from all further obligations under subsection
(b), above, and the Company shall be automatically released from all
further obligations under ss.8(b) and (c), above, other than the
Company's obligation to pay the Employee all accrued but unpaid
severance payments to the date that such notice of election was
received by the Company, or (ii) remain obligated under the
noncompetition provisions described in subsection (b) and enforce the
Company's obligations under ss.8(b) and (c), above. Notwithstanding the
foregoing, a default shall not exist under this section if the
non-payment is due to the Company exercising its rights under
subsection (e) during the period of any violation or attempted
violation of subsection (b) by the Employee.
(g) For the purposes of this agreement, the term "Health Power
Companies" shall mean Health Power and all direct and indirect
subsidiaries of Health Power, and the term "Health Power Company" shall
mean Health Power or any direct or indirect subsidiary of Health Power.
ss.11. Return of Records. Upon termination of employment, the Employee
will deliver to the Company all records, reports, data, memoranda, notes,
models, and equipment of any nature that are in the Employee's possession or
under the Employee's control prepared or acquired in the course of the
Employee's employment relationship with the Company. The Employee further agrees
not to take any such information or data, or reproductions of such information
or data, that relate to the business activities of the Company or to parties in
a contract relationship with the Company.
ss.12. Employee's Capacity. The Employee represents and warrants to the
Company that he has the capacity and right to enter into this agreement and
perform all his services under this agreement without any restriction whatsoever
by any other agreement, other document, or otherwise.
ss.13. Complete Agreement. This document and the Stock Option Agreement
contains the entire agreement between the parties concerning the subject matter
hereof and supersedes any prior discussions, negotiations, representations, or
agreements between them relating to the employment of the Employee; provided,
however, that no provisions of this agreement shall supersede or replace any
noncompetition and/or confidentiality provisions contained in the Prior
Employment Agreement, which noncompetition and confidentiality provisions are
restated in, and continued pursuant to, this agreement. No additions or other
changes to this agreement shall be made or be binding on either party unless
made in writing and signed by each party to this agreement.
ss.14. Notices. All notices and other communications required or
permitted to be given under this agreement to any party shall be in writing and
shall be deemed given when delivered personally, telecopied (which is confirmed)
to that party at the telecopy number for that party set forth below, mailed by
certified mail (return receipt requested) to the address for that party set
forth below, or delivered to Federal Express, UPS, or any similar express
delivery service for
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delivery to that party at the address set forth below (or to such other address
or telecopy number as any party may have furnished in writing to the other party
in the manner provided above):
(a) If to the Company:
CompManagement, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxxxx, Xxxx 00000
Attention: Chairman
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxxxxx LLP
Capitol Square, Suite 2100
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
(b) If to the Employee
Xxxxxx X. Xxxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Telecopy No.: _____________________
ss.15. Governing Law. All questions concerning the validity, intention,
or meaning of this agreement or relating to the rights and obligations of the
parties with respect to performance hereunder shall be construed and resolved
under the laws of Ohio.
ss.16. Severability. The intention of the parties to this agreement is
to comply fully with all laws and public policies, and this agreement shall be
construed consistently with all laws and public policies to the extent possible.
If and to the extent that any court of competent jurisdictions determines that
it is impossible or violative of any legal prohibition to construe any provision
of this agreement consistently with any law, legal prohibition, or public policy
and consequently holds that provision to be invalid or prohibited, that shall in
no way affect the validity of the other provisions of this agreement which shall
remain in full force and effect.
ss.17. Nonwaiver. No failure by any party to insist upon strict
compliance with any term of this agreement, to exercise any option, enforce any
right, or seek any remedy upon any default of any other party shall affect, or
constitute a waiver of, the first party's right to insist upon such strict
compliance, exercise that option, enforce that right, or seek that remedy with
respect to that default or any prior, contemporaneous, or subsequent default;
nor shall any custom or practice of the parties at variance with any provision
of this agreement affect or
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constitute a waiver of, any party's right to demand strict compliance with all
provisions of this agreement.
ss.18. Captions. The captions of the various sections of this agreement
are not part of the context of this agreement, but are only labels to assist in
locating those sections, and shall be ignored in construing this agreement.
ss.19. Successors. This agreement shall be personal to the Employee and
no rights or obligations of the Employee under this agreement may be assigned by
him. Except as described in the preceding sentence, this agreement shall be
binding upon, inure to the benefit of, and be enforceable by and against the
respective heirs, legal representatives, successors, and assigns of each party
to this agreement. The Company and Health Power shall require any successor to
all or substantially all of the business and/or assets of the Company, whether
direct or indirect, by purchase, merger, consolidation, acquisition of stock, or
otherwise, by an agreement in form and substance satisfactory to the Employee,
expressly to assume and agree to perform this agreement in the same manner and
to the same extent as the Company would be required to perform if no such
succession had taken place. Health Power, as the sole shareholder of the
Company, has executed this agreement to evidence its agreement to be bound by
the provisions of this ss.19 and to be subject to the obligations under ss.8 of
this agreement resulting from a breach of this ss.19.
COMPMANAGEMENT, INC.
By /s/ Xxxxxxx X. Master, D.O. /s/ Xxxxxx X. Xxxxxxx
----------------------------------- ------------------------------------
Xxxxxxx X. Master, D.O., Chairman XXXXXX X. XXXXXXX
COMPMANAGEMENT HEALTH HEALTH POWER, INC.
SYSTEMS, INC.
By /s/ Xxxxxxx X. Master, D.O. By /s/ Xxxxxxx X. Master, D.O.
----------------------------------- ----------------------------------
Xxxxxxx X. Master, D.O., Chairman Xxxxxxx X. Master, D.O., Chairman
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