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EXHIBIT 10.14
THE TENERE GROUP, INC.
EMPLOYMENT AGREEMENT
This agreement ("Agreement") has been entered into as of this
6th day of May, 1996, by and between The Tenere Group, Inc., a Missouri
corporation ("Company"), and Xxxxxxx X. Xxxxxxx, M.D., an individual
("Executive").
RECITALS
The Board of Directors of the Company (the "Board"), has
determined that it is in the best interests of the Company and its shareholders
to reinforce and encourage the continued attention and dedication of the
Executive to the Company as a member of the Company's management and to assure
that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change in Control
(as defined below) of the Company. The Board desires to provide for the
continued employment of the Executive, and the Executive is willing to commit
himself to continue to serve the Company. Additionally, the Board believes it
is imperative to diminish the inevitable distraction of the Executive by virtue
of the personal uncertainties and risks created by a pending or threatened
Change in Control and to encourage the Executive's full attention and
dedication to the Company currently and in the event of any threatened or
pending Change in Control, and to provide the Executive with compensation and
benefits arrangements upon the breach of this Agreement by the Company or upon
a termination of employment after Change in Control which ensure that the
compensation and benefits expectations of the Executive will be satisfied and
which are competitive with those of other corporations. Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter into
this Agreement.
IT IS AGREED AS FOLLOWS:
SECTION 1: DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. For purposes of this Agreement, the
following words and phrases, whether or not capitalized, shall have the
meanings specified below, unless the context plainly requires a different
meaning.
1.1(a) "BOARD" means the Board of Directors of the
Company.
1.1(b) "CHANGE IN CONTROL" means:
(i) The acquisition by any
individual, entity or group, or (within the
meaning of Section 13(d)(3) or 14(d)(2), the
Exchange Act), a Person of beneficial
ownership of twenty percent (20%) or more of
either (a) the then outstanding shares of
common stock of the Company (the "Outstanding
Company Common Stock") or (b) the combined
voting power of the then outstanding voting
securities of the Company entitled to vote
generally in the election of directors (the
"Outstanding Company Voting Securities");
provided, however, that the following
acquisitions shall not constitute a Change in
Control: (a) any acquisition directly from
the Company (excluding an acquisition by
virtue of the exercise of a conversion
privilege), (b) any acquisition by the
Company, (c) any acquisition by any employee
benefit plan (or related trust) sponsored or
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maintained by the Company or any corporation
controlled by the Company or (d) any
acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if,
following such reorganization, merger or
consolidation, the conditions described in
clauses (a), (b) and (c) of subsection (iii)
of this Section are satisfied; or
(ii) Individuals who, as of
the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to
constitute at least a majority of the Board;
provided, however, that any individual
becoming a director subsequent to the date
hereof whose election, or nomination for
election by the Company's shareholders, was
approved by a vote of at least a majority of
the directors then comprising the Incumbent
Board shall be considered as though such
individual were a member of the Incumbent
Board, but excluding, as a member of the
Incumbent Board, any such individual whose
initial assumption of office occurs as a
result of either an actual or threatened
election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or
threatened solicitation of proxies or
consents by or on behalf of a Person other
than the Board; or
(iii) Approval by the
shareholders of the Company of a
reorganization, merger or consolidation, in
each case, unless, following such
reorganization, merger or consolidation, (a)
more than fifty percent (50%) of,
respectively, the then outstanding shares of
common stock of the corporation resulting
from such reorganization, merger or
consolidation and the combined voting power
of the then outstanding voting securities of
such corporation entitled to vote generally
in the election of directors is then
beneficially owned, directly or indirectly,
by all or substantially all of the
individuals and entities who were the
beneficial owners, respectively, of the
Outstanding Company Common Stock and
Outstanding Company Voting Securities
immediately prior to such reorganization,
merger or consolidation in substantially the
same proportions as their ownership,
immediately prior to such reorganization,
merger or consolidation, of the Outstanding
Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (b) no
Person (excluding the Company, any employee
benefit plan (or related trust) of the
Company or such corporation resulting from
such reorganization, merger or consolidation
and any Person beneficially owning,
immediately prior to such reorganization,
merger or consolidation, directly or
indirectly, twenty percent (20%) or more of
the Outstanding Company Common Stock or
Outstanding Voting Securities, as the case
may be) beneficially owns, directly or
indirectly, twenty percent (20%) or more of,
respectively, the then outstanding shares of
common stock of the corporation resulting
from such reorganization, merger or
consolidation or the combined voting power of
the then outstanding voting securities of
such corporation, entitled to vote generally
in the election of directors and (c) at least
a majority of the members of the board of
directors of the corporation resulting from
such reorganization, merger or consolidation
were members of the Incumbent
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Board at the time of the execution of the
initial agreement providing for such
reorganization, merger or consolidation; or
(iv) Approval by the
shareholders of the Company of (a) a complete
liquidation or dissolution of the Company or
(b) the sale or other disposition of all or
substantially all of the assets of the
Company, other than to a corporation, with
respect to which following such sale or other
disposition, (1) more than fifty percent
(50%) of, respectively, the then outstanding
shares of common stock of such corporation
and the combined voting power of the then
outstanding voting securities of such
corporation entitled to vote generally in the
election of directors is then beneficially
owned, directly or indirectly, by all or
substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities immediately prior to such sale or
other disposition in substantially the same
proportion as their ownership, immediately
prior to such sale or other disposition, of
the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the
case may be, (2) no Person (excluding the
Company and any employee benefit plan (or
related trust) of the Company or such
corporation and any Person beneficially
owning, immediately prior to such sale or
other disposition, directly or indirectly,
twenty percent (20%) or more of the
Outstanding Company Common Stock or
Outstanding Company Voting Securities, as the
case may be) beneficially owns, directly or
indirectly, twenty percent (20%) or more of,
respectively, the then outstanding shares of
common stock of such corporation and the
combined voting power of the then outstanding
voting securities of such corporation
entitled to vote generally in the election of
directors and (3) at least a majority of the
members of the board of directors of such
corporation were members of the Incumbent
Board at the time of the execution of the
initial agreement or action of the Board
providing for such sale or other disposition
of assets of the Company.
1.1(c) "CHANGE IN CONTROL DATE" shall mean the date
of the Change in Control.
1.1(d) "CODE" shall mean the Internal Revenue Code
of 1986, as amended.
1.1(e) "COMPANY" means The Tenere Group, Inc., a
Missouri corporation.
1.1(f) "EFFECTIVE DATE" shall mean May 6, 1996.
1.1(g) "EMPLOYMENT PERIOD" means the period
beginning on the Effective Date and ending on
the later of (i) May 6, 1999, or (ii) May 6
of any succeeding fiscal year during which
notice is given by either party (as described
in Section 1.1(j)) of such party's intent not
to renew this Agreement.
1.1(h) "EXCHANGE ACT" means the Securities Exchange
Act of 1934, as amended.
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1.1(i) "PERSON" means any "person" within the
meaning of Sections 13(d) and 14(d) of the
Exchange Act.
1.1(j) "TERM" means the period that begins on the
Effective Date and ends on the earlier of:
(i) the Date of Termination as defined in
Section 3.6, or (ii) the close of business on
the later of May 6, 1999 or May 6 of any
renewed term as set forth in Section 2.1 of
this Agreement.
1.2 GENDER AND NUMBER. When appropriate, pronouns in
this Agreement used in the masculine gender include the feminine gender, words
in the singular include the plural, and words in the plural include the
singular.
1.3 HEADINGS. All headings in this Agreement are
included solely for ease of reference and do not bear on the interpretation of
the text. Accordingly, as used in this Agreement, the terms "Article" and
"Section" mean the text that accompanies the specified Article or Section of
the Agreement.
1.4 APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the laws of the state of Missouri, without
reference to its conflict of law principles.
SECTION 2: TERMS AND CONDITIONS OF EMPLOYMENT.
2.1 PERIOD OF EMPLOYMENT. The Executive shall remain in
the employ of the Company throughout the Term of this Agreement in accordance
with the terms and provisions of this Agreement. This Agreement will
automatically renew for annual one-year periods unless either party gives the
other written notice, by February 1, 1999 or February 1 of any succeeding year,
of such party's intent not to renew this Agreement.
2.2 POSITIONS AND DUTIES.
2.2(a) Throughout the Term of this
Agreement, the Executive shall serve as President and Chief
Executive Officer of the Company and shall have overall
responsibility for the operations and strategic planning of
the Company, subject to the reasonable directions of the
Board.
2.2(b) Throughout the Term of this
Agreement (but excluding any periods of vacation and sick
leave to which he is entitled), the Executive shall devote
reasonable attention and time during normal business hours to
the business and affairs of the Company and shall use his
reasonable best efforts to perform faithfully and efficiently
such responsibilities as are assigned to him under or in
accordance with this Agreement; provided that, it shall not be
a violation of this paragraph for the Executive to (i) serve
on corporate, civic or charitable boards or committees, (ii)
deliver lectures or fulfill speaking engagements, or (iii)
manage personal investments, so long as such activities do not
significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in
accordance with this Agreement or violate the Company's
conflict of interest policy as in effect immediately prior to
the Effective Date.
2.3 SITUS OF EMPLOYMENT. Throughout the Term of this
Agreement, the Executive's services shall be performed within 20 miles of the
location where the Executive was employed immediately prior to the Effective
Date.
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2.4 COMPENSATION.
2.4(a) ANNUAL BASE SALARY. For the first
calendar year within the Term of this Agreement, the Executive
shall receive an annual base salary ("Annual Base Salary") of
Two Hundred Eleven Thousand Five Hundred Twenty-One Dollars
($211,521), which shall be paid in equal or substantially
equal bi-weekly installments. During the Term of this
Agreement, the Annual Base Salary payable to the Executive
shall be reviewed at least annually and may be increased
consistent with Company's compensation policies for similarly
situated executives.
2.4(b) INCENTIVE BONUSES. In addition to
Annual Base Salary, the Executive may be awarded an incentive
bonus ("Incentive Bonus") provided through any incentive
compensation plan which is generally available to other peer
executives of the Company.
2.4(c) INCENTIVE, SAVINGS AND RETIREMENT
PLANS AND SUPPLEMENTAL PAYMENTS. Throughout the Term of this
Agreement, the Executive shall be entitled to participate in
all incentive, savings and retirement plans generally
available to other peer executives of the Company. In
addition, upon the earlier to occur of (i) Executive's
retirement after attainment by the Executive of 70 years of
age, such retirement being in accordance with the Company's
then existing retirement policy, if any, (ii) the termination
of the Executive's employment by reason of the Executive's
death or Disability (as defined in Section 3.2) during the
Employment Period, or (iii) the termination of the Executive's
employment by the Company without Cause or by the Executive
for Good Reason, then the Executive, or in the event of
Executive's death the Executive's estate or legal
representative, shall be entitled to a supplemental retirement
payment (the "Supplemental Retirement Payment") of $80,000 per
year for a period of ten years with the first payment due and
owing within 30 days of the date of the Executive's retirement
or termination of employment as provided above, and payments
in subsequent years due and owing on the anniversary date of
the such date of the Executive's retirement or termination. In
the event of the Executive's death at any time prior to the
last of the Supplemental Retirement Payments to which
Executive is entitled to receive pursuant to this Section
2.4(c), any unpaid annual Supplemental Retirement Payment to
which the Executive was entitled to receive pursuant to this
Section 2.4(c) shall be paid to the Executive's estate or
legal representative.
2.4(d) WELFARE BENEFIT PLANS. Throughout
the Term of this Agreement (and thereafter, subject to Section
4.1(c) hereof), the Executive and/or the Executive's family,
as the case may be, shall be eligible for participation in and
shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company
(including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and
programs) to the extent generally available to other peer
executives of the Company.
2.4(e) EXPENSES. Throughout the Term of
this Agreement, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by
the
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Executive in accordance with the most favorable policies,
practices and procedures generally applicable to other peer
executives of the Company.
2.4(f) FRINGE BENEFITS. Throughout the
Term of this Agreement, the Executive shall be entitled to
such fringe benefits as generally are provided to other peer
executives of the Company.
2.4(g) OFFICE AND SUPPORT STAFF.
Throughout the Term of this Agreement, the Executive shall be
entitled to an office or offices of a size and with
furnishings and other appointments, and to personal
secretarial and other assistance.
2.4(h) VACATION. Throughout the Term of
this Agreement, the Executive shall be entitled to paid
vacation in accordance with the most favorable plans,
policies, programs and practices generally provided with
respect to other peer executives of the Company. Initially,
the Executive shall be entitled to three (3) weeks paid
vacation and such vacation time may not be decreased below
such level during the Term of this Agreement.
SECTION 3: TERMINATION OF EMPLOYMENT.
3.1 DEATH. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period.
3.2 DISABILITY. If the Company determines in good faith
that the Disability of the Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), it may give to the
Executive written notice in accordance with Section 7.1 of its intention to
terminate the Executive's employment. In such event, the Executive's
employment with the Company shall terminate effective on the thirtieth (30th)
day after receipt of such notice by the Executive (the "Disability Effective
Date"), provided that, within the thirty (30) days after such receipt, the
Executive shall not have returned to full-time performance of the Executive's
duties. For purposes of this Agreement, "Disability" shall mean that the
Executive has been unable to perform the services required of the Executive
hereunder on a full-time basis for a period of one hundred eighty (180)
consecutive business days by reason of a physical and/or mental condition.
"Disability" shall be deemed to exist when certified by a physician selected by
the Company or its insurers and acceptable to the Executive or the Executive's
legal representative (such agreement as to acceptability not to be withheld
unreasonably). The Executive will submit to such medical or psychiatric
examinations and tests as such physician deems necessary to make any such
Disability determination.
3.3 TERMINATION FOR CAUSE. The Company may terminate the
Executive's employment during the Employment Period for "Cause," which shall
mean termination based upon: (i) the Executive's willful and continued failure
to substantially perform his duties with the Company (other than as a result of
incapacity due to physical or mental condition), after a demand for substantial
performance is delivered to him by the Company, which specifically identifies
the manner in which the Executive has not substantially performed his duties,
(ii) the Executive's commission of an act constituting a criminal offense
involving moral turpitude, dishonesty, or breach of trust, or (iii) the
Executive's material breach of any provision of this Agreement. For purposes
of this Section, no act, or failure to act on the Executive's part shall be
considered "willful" unless done, or omitted to be done, without good faith and
without reasonable belief that the act or omission was in the best interest of
the Company. Notwithstanding the foregoing, the Executive shall not be deemed
to have been terminated for Cause unless and until (i) he receives a Notice of
Termination (as defined in Section 3.5) from the Company,
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(ii) he is given the opportunity, with counsel, to be heard before the Board,
and (iii) the Board finds, in its good faith opinion, the Executive was guilty
of the conduct set forth in the Notice of Termination.
3.4 GOOD REASON. The Executive may terminate his
employment with the Company for "Good Reason," which shall mean termination
based upon:
(i) the assignment to the Executive of
any duties inconsistent in any respect with the Executive's
position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 2.2(a) or any other action by the
Company which results in a material diminution in such
position, authority, duties or responsibilities, excluding for
this purpose any action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(ii) (a) the failure by the Company to
continue in effect any benefit or compensation plan, stock
ownership plan, life insurance plan, health and accident plan
or disability plan to which the Executive is entitled as
specified in Section 2.4, (b) the taking of any action by the
Company which would adversely affect the Executive's
participation in, or materially reduce the Executive's
benefits under, any plans described in Section 2.4, or deprive
the Executive of any material fringe benefit enjoyed by the
Executive as described in Section 2.4(f), or (c) the failure
by the Company to provide the Executive with the number of
paid vacation days to which the Executive is entitled as
described in Section 2.4(h).
(iii) the Company's requiring the
Executive to be based at any office or location other than
that described in Section 2.3;
(iv) a material breach by the Company of
any provision of this Agreement;
(v) any purported termination by the
Company of the Executive's employment otherwise than as
expressly permitted by this Agreement;
(vi) within a period ending at the close
of business on the date two (2) years after the Change in
Control Date, if the Company has failed to comply with and
satisfy Section 6.2 on or after the Change in Control Date; or
(vii) within a period ending at the close
of business on the date two (2) years after the Change in
Control Date, if the Executive, in his sole and absolute
discretion, determines and notifies the Company in writing,
that he does not wish to continue his employment with the
Company.
For purposes of this Section any good faith determination of "Good Reason" made
by the Executive shall be conclusive.
3.5 NOTICE OF TERMINATION. Any termination by the
Company for Cause or Disability, or by the Executive for Good Reason, shall be
communicated by Notice of Termination to the other party, given in accordance
with Section 7.1. For purposes of this Agreement, a "Notice of Termination"
means a written notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the
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provision so indicated, and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination
date (which date shall be not more than fifteen (15) days after the giving of
such notice). The failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing
of Good Reason or Cause shall not waive any right of the Executive or the
Company hereunder or preclude the Executive or the Company from asserting such
fact or circumstance in enforcing the Executive's or the Company's rights
hereunder.
3.6 DATE OF TERMINATION. "Date of Termination" means (i)
if the Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the Date of Termination shall be the date of receipt
of the Notice of Termination or any later date specified herein, as the case
may be, (ii) if the Executive's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of the Executive
or the Disability Effective Date, as the case may be, or (iii) if the
Executive's employment is terminated by the Company other than for Cause,
death, or Disability, the Date of Termination shall be the date of receipt of
the Notice of Termination; provided that if within thirty (30) days after any
Notice of Termination is given, the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination, the
Date of Termination shall be the date on which the dispute is finally
determined, either by mutual written agreement of the parties, or by a final
judgment, order or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been perfected).
SECTION 4: CERTAIN BENEFITS UPON TERMINATION.
4.1 TERMINATION WITHOUT CAUSE OR FOR GOOD REASON PRIOR TO
A CHANGE IN CONTROL. If, prior to a Change in Control during the Employment
Period: (i) the Company shall terminate the Executive's employment without
Cause, or (ii) the Executive shall terminate employment with the Company for
Good Reason the Executive shall be entitled to the benefits provided below;
4.1(a) "Accrued Obligations": Within
thirty (30) days after the Date of Termination, the Company
shall pay to the Executive the sum of (1) the Executive's
Annual Base Salary through the Date of Termination to the
extent not previously paid, (2) any compensation previously
deferred by the Executive (together with any accrued interest
or earnings thereon) and (3) any accrued vacation pay; in each
case to the extent not previously paid.
In addition, on the date that Incentive Bonuses are
paid to other peer executives for the year in which the
Executive's employment is terminated, the Executive will be
paid an amount equal to the product of the Current Incentive
Bonus multiplied by a fraction, the numerator of which is the
number of days during the fiscal year for which the Incentive
Bonus is paid prior to the Date of Termination and denominator
of which is 365. For purposes of this Section the term
"Current Incentive Bonus" means the Incentive Bonus that would
have been paid to the Executive for the fiscal year in which
the termination of employment occurred, if the Executive's
employment had not been so terminated.
4.1(b) "Annual Base Salary Continuation":
For the remainder of the Employment Period, the Company shall
pay to the Executive, the Executive's then-current Annual Base
Salary as would have been paid to the Executive had the
Executive remained in the Company's employ throughout the
Employment Period; provided that in all cases the Executive
shall receive, at minimum, the then-current Annual Base Salary
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for a period beginning on the Date of Termination and ending
one (1) year thereafter. The Company at any time may elect to
pay the balance of such payments then remaining in a lump sum,
in which case the total of such payments shall be discounted
to present value as determined according to Code Section
280G(d)(4).
4.1(c) "Welfare Benefit Continuation": For
the remainder of the Employment Period (but in no case less
than one (1) year after the Date of Termination), or such
longer period as any plan, program, practice or policy may
provide, the Company shall continue benefits to the Executive
and/or the Executive's family at least equal to those which
would have been provided to them in accordance with the plans,
programs, practices and policies described in Section 2.4(d)
if the Executive's employment had not been terminated, in
accordance with the most favorable plans, practices, programs
or policies of the Company as those provided generally to
other peer executives and their families during the ninety
(90) day period immediately preceding the Effective Date or,
if more favorable to the Executive, as those provided
generally at any time after the Effective Date to other peer
executives of the Company and their families; provided,
however, that if the Executive becomes reemployed with another
employer and is eligible to receive medical or other welfare
benefits under another employer-provided plan, the medical and
other welfare benefits described herein shall be secondary to
those provided under such other plan during such applicable
period of eligibility. For purposes of determining
eligibility of the Executive for retiree benefits pursuant to
such plans, practices, programs and policies, the Executive
shall be considered to have remained employed until the later
of the end of the Employment Period or one (1) year after the
Date of Termination and to have retired on the last day of
such period.
4.1(d) "Other Benefits": To the extent not
previously paid or provided, the Company shall timely pay or
provide to the Executive and/or the Executive's family any
other amounts or benefits required to be paid or provided for
which the Executive and/or the Executive's family is eligible
to receive pursuant to this Agreement and under any plan,
program, policy or practice or contract or agreement of the
Company as those provided generally to other peer executives
and their families during the ninety (90) day period
immediately preceding the Effective Date or, if more favorable
to the Executive, as those provided generally after the
Effective Date to other peer executives of the Company and
their families.
The Executive shall not be required to mitigate the amount of
any payment provided for in this Section by seeking other
employment or otherwise, nor shall the amount of any payment
provided for, in this Section, be reduced by any compensation
earned by the Executive as the result of employment by another
employer after the Date of Termination, or otherwise.
4.2 BENEFITS UPON TERMINATION AFTER A CHANGE IN CONTROL.
If Change in Control occurs during the Employment Period and within two (2)
years after a Change in Control: (i) the Company shall terminate the
Executive's employment without Cause, or (ii) the Executive shall terminate
employment with the Company for Good Reason, then the Executive shall be
entitled to the benefits provided below:
4.2(a) "Accrued Obligations": Within thirty
(30) days after the Date of Termination, the Company shall pay
to the Executive the sum of (1) the Executive's Annual Base
Salary through the Date of Termination to the extent not
previously paid,
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(2) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and
(3) any accrued vacation pay; in each case to the extent not
previously paid.
In addition, on the date that Incentive Bonuses are
paid to other peer executives for the year in which the
Executive's employment is terminated, the Executive will be
paid an amount equal to the product of the Current Incentive
Bonus multiplied by a fraction, the numerator of which is the
number of days during the fiscal year for which the Incentive
Bonus is paid prior to the Date of Termination and denominator
of which is 365. For purposes of this Section the term
"Current Incentive Bonus" means the Incentive Bonus that would
have been paid to the Executive for the fiscal year in which
the termination of employment occurred, if the Executive's
employment had not been so terminated.
4.2(b) "Severance Amount": Within thirty
(30) days after the Date of Termination, the Company shall pay
to the Executive as severance pay in a lump sum, in cash, an
amount equal to 2.99 times his then-current Annual Base
Salary.
4.2(c) "Stock Options": To the extent not
otherwise provided for under the terms of the Company's stock
option plan or the Executive's stock option agreement, all
such stock options shall become fully exercisable as of the
Date of Termination and, except for "incentive stock options"
within the meaning of Code Section 422 granted prior to the
date hereof, shall remain fully exercisable for six months
following the Date of Termination.
4.2(d) "Other Benefits": To the extent not
previously paid or provided, the Company shall timely pay or
provide to the Executive and/or the Executive's family any
other amounts or benefits required to be paid or provided for
which the Executive and/or the Executive's family is eligible
to receive pursuant to this Agreement and under any plan,
program, policy or practice or contract or agreement of the
Company as those provided generally to other peer executives
and their families during the ninety (90) day period
immediately preceding the Effective Date or, if more favorable
to the Executive, as those provided generally after the
Effective Date to other peer executives of the Company and
their families.
4.2(e) "Excess Parachute Payment":
Anything in this Agreement to the contrary notwithstanding, in
the event that an independent accountant shall determine that
any payment or distribution by the Company to or for the
benefit of Executive (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or
otherwise) (a "Payment") would be nondeductible by the Company
for Federal income tax purposes because of Code Section 280G
or would constitute an "excess parachute payment" (as defined
in Code Section 280G), then the aggregate present value of
amounts payable or distributable to or for the benefit of
Executive pursuant to this Agreement (such payments or
distributions pursuant to this Agreement are hereinafter
referred to as "Agreement Payments") shall be reduced (but not
below zero) to the Reduced Amount. For purposes of this
paragraph, the "Reduced Amount" shall be an amount expressed
in present value which maximizes the aggregate present value
of Agreement Payments without causing any Payment to be
nondeductible by the Company because of Code Section 280G or
without causing any portion of the Payment to be subject to
the excise tax imposed by Code Section 4999.
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If the independent accountant determines that any Payment
would be nondeductible by the Company because of Code Section
280G or that any portion of the Payment will be subject to the
excise tax imposed by Code Section 4999, the Company shall
promptly give Executive notice to that effect and a copy of
the detailed calculation thereof and of the Reduced Amount.
The Executive may then elect, in his sole discretion, which
and how much of the Agreement Payments shall be eliminated or
reduced (as long as after such election the aggregate present
value of the Agreement Payments equals the Reduced Amount),
and shall advise the Company in writing of his election within
ten (10) days of his receipt of such notice. If no such
election is made by Executive within such ten-day period, the
Company may elect which and how much of the Agreement Payments
shall be eliminated or reduced (as long as after such election
the aggregate present value of the Agreement Payments equals
the Reduced Amount) and shall notify the Executive promptly of
such election. For purposes of this paragraph, present value
shall be determined in accordance with Code Section
280G(d)(4). All determinations made by the independent
accountant under this Section shall be binding upon the
Company and the Executive and shall be made within sixty (60)
days of a termination of employment of the Executive. As
promptly as practicable following such determination and the
elections hereunder, the Company shall pay to or distribute to
or for the benefit of the Executive such amounts as are then
due to the Executive under this Agreement and shall promptly
pay to or distribute for the benefit of the Executive in the
future such amounts as become due to the Executive under this
Agreement.
As a result of the uncertainty in the application of Code
Sections 280G and 4999 at the time of the initial
determination by the independent accountant hereunder, it is
possible that Agreement Payments will be made by the Company
which should not have been made ("Overpayment") or that
additional Agreement Payments which have not been made by the
Company should have been made ("Underpayment"), in each case,
consistent with the calculation of the Reduced Amount
hereunder. In the event that the independent accountant,
based upon the assertion of a deficiency by the Internal
Revenue Service against the Company or the Executive which the
independent accountant believes has a high probability of
success, determines that an Overpayment has been made, any
such Overpayment shall be treated for all purposes as a loan
to the Executive which the Executive shall repay to the
Company together with interest at the applicable Federal rate
provided for in Code Section 7872(f)(2); provided, however,
that no amount shall be payable by the Executive to the
Company if and to the extent such payment would not reduce the
amount which is subject to taxation under Code Section 4999 or
if the period of limitations for assessment of tax under Code
Section 4999 against the Executive shall have expired. In the
event that the independent accountant, based upon controlling
precedent, determines that an Underpayment has occurred, any
such Underpayment shall be promptly paid by the Company to or
for the benefit of the Executive together with interest at the
applicable Federal rate provided for in Code Section
7872(f)(2)(A).
4.3 DEATH. If the Executive's employment is
terminated by reason of the Executive's death during the Employment Period
(either prior or subsequent to a Change in Control), this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for (i) payment of the Supplemental Retirement
Payment (as defined in Section 2.4(c)) which shall be paid to the Executive's
estate or beneficiary, as applicable, (ii) payment of Accrued Obligations (as
defined in Section 4.1(a)) (which shall be paid to the Executive's estate or
beneficiary, as applicable, in a lump sum in cash within thirty (30) days of
the Date of Termination), and (iii) the timely payment
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or provision of Other Benefits (as defined in Section 4.1(d)), including death
benefits pursuant to the terms of any plan, policy, or arrangement of the
Company.
4.4 DISABILITY. If the Executive's employment is
terminated by reason of the Executive's Disability during the Employment Period
(either prior or subsequent to a Change in Control), this Agreement shall
terminate without further obligations to the Executive, other than for (i)
payment of the Supplemental Retirement Payment (as defined in Section 2.4(c),
(ii) payment of Accrued Obligations (as defined in Section 4.1(a)) (which shall
be paid to the Executive in a lump sum in cash within thirty (30) days of the
Date of Termination), and (iii) the timely payment or provision of Other
Benefits (as defined in Section 4.1(d)) including disability benefits pursuant
to the terms of any plan, policy or arrangement of the Company.
4.5 TERMINATION FOR CAUSE; OTHER THAN GOOD REASON. If
the Executive's employment shall be terminated for Cause during the Employment
Period (either prior to or subsequent to a Change in Control), this Agreement
shall terminate without further obligations to the Executive other than the
obligation to pay to the Executive his Accrued Compensation (as defined in this
Section). If the Executive terminates employment with the Company during the
Employment Period, (excluding a termination for Good Reason), this Agreement
shall terminate without further obligations to the Executive, other than for
the payment of Accrued Compensation (as defined in this Section) and the timely
payment or provision of Other Benefits (as defined in Section 4.1(d)). In such
case, all Accrued Compensation shall be paid to the Executive in a lump sum in
cash within thirty (30) days of the Date of Termination.
For purposes of this Section the term "Accrued Compensation"
means the sum of (i) the Executive's Annual Base Salary through the Date of
Termination to the extent not previously paid, (ii) any compensation previously
deferred by the Executive (together with any accrued interest or earnings
thereon), and (iii) any accrued vacation pay in each case to the extent not
previously paid.
4.6 NON-EXCLUSIVITY OF RIGHTS. Except as provided in
Sections 4.1(c) nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any plan, program, policy or
practice provided by the Company and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as the Executive
may have under any contract or agreement with the Company. Amounts which are
vested benefits of which the Executive is otherwise entitled to receive under
any plan, policy, practice or program of, or any contract or agreement with,
the Company at or subsequent to the Date of Termination, shall be payable in
accordance with such plan, policy, practice or program or contract or agreement
except as explicitly modified by this Agreement.
4.7 FULL SETTLEMENT. The Company's obligation to make
the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against the Executive or others. In no event shall the Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement
and, except as provided in Sections 4.1(c), such amounts shall not be reduced
whether or not the Executive obtains other employment. The Company agrees to
pay promptly as incurred, to the full extent permitted by law, all legal fees
and expenses which the Executive may reasonable incur as a result of any
contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a
result of any contest by the Executive regarding the amount of any payment
pursuant to this Agreement), plus in each case interest on any delayed payment
at the applicable Federal rate provided for in Code Section 7872(f)(2)(A).
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4.8 RESOLUTION OF DISPUTES. If there shall be any
dispute between the Company and the Executive (i) in the event of any
termination of the Executive's employment by the Company, whether such
termination was for Cause, or (ii) in the event of any termination of
employment by the Executive, whether Good Reason existed, then, unless and
until there is a final, nonappealable judgment by a court of competent
jurisdiction declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was not made in
good faith, the Company shall pay all amounts, and provide all benefits, to the
Executive and/or the Executive's family or other beneficiaries, as the case may
be, that the Company would be required to pay or provide pursuant to Section
4.1 or 4.2 as though such termination were by the Company without Cause or by
the Executive with Good Reason; provided, however, that the Company shall not
be required to pay any disputed amounts pursuant to this Section except upon
receipt of an undertaking by or on behalf of the Executive to repay all such
amounts to which the Executive is ultimately adjudged by such court not to be
entitled.
SECTION 5: NON-COMPETITION.
5.1 NON-COMPETE AGREEMENT.
5.1(a) It is agreed that during the period
beginning on the date the Term of this Agreement expires and
ending two (2) years thereafter, the Executive shall not,
without prior written approval of the Board, become an
officer, employee, agent, partner, or director of any business
enterprise in substantial direct competition (as defined in
Section 5.1(b)) with the Company; provided that, the Executive
shall not be subject to the restrictions of this Section if
(i) the Executive is terminated by the Company without Cause,
(ii) the Executive terminates his employment for Good Reason,
or (iii) the Term of this Agreement expires after delivery by
the Company of written notice of the Company's intent not to
renew this Agreement pursuant to Section 2.1.
5.1(b) For purposes of Section 5.1, a
business enterprise with which the Executive becomes
associated as an officer, employee, agent, partner, or
director shall be considered in substantial direct
competition, if such entity competes with the Company in any
business in which the Company is engaged and is within in the
Company's market area (as defined herein) as of the date the
Term of this Agreement expires. The Company's market area is
defined for this purpose, as the States of Missouri, Illinois
and Kansas.
5.1(c) The above constraint shall not
prevent the Executive from making passive investments, not to
exceed five percent (5%), in any enterprise.
5.2 CONFIDENTIAL INFORMATION. The Executive shall hold
in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or any of
its affiliated companies, and their respective businesses, which shall have
been obtained by the Executive during the Executive's employment by the Company
and which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with the Company, the Executive
shall not, without the prior written consent of the Company, or as may
otherwise be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
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SECTION 6: SUCCESSORS.
6.1 SUCCESSORS OF EXECUTIVE. This Agreement is personal
to the Executive and, without the prior written consent of the Company, the
rights (but not the obligations) shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
6.2 SUCCESSORS OF COMPANY. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement and shall entitle the Executive to terminate the Agreement at
his option on or after the Change in Control Date for Good Reason. As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and
any successor to its business and/or assets which assumes and agrees to perform
this Agreement by operation of law, or otherwise.
SECTION 7: MISCELLANEOUS.
7.1 NOTICE. For purposes of this Agreement, notices and
all other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by certified
or registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses as set forth below; provided that all notices to the
Company shall be directed to the attention of the President, or to such other
address as one party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.
Notice to Executive:
Xxxxxxx X. Xxxxxxx, M.D.
0000 Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Notice to Company:
The Tenere Group, Inc.
0000 Xxxx Xxxxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
7.2 VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
7.3 WITHHOLDING. The Company may withhold from any
amounts payable under this Agreement such Federal, state or local taxes as
shall be required to be withheld pursuant to any applicable law or regulation.
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7.4 WAIVER. The Executive's or the Company's failure to
insist upon strict compliance with any provision hereof or any other provision
of this Agreement or the failure to assert any right the Executive or the
Company may have hereunder, including, without limitation, the right of the
Executive to terminate employment for Good Reason pursuant to Section 3.4 shall
not be deemed to be a waiver of such provision or right or any other provision
or right of this Agreement.
IN WITNESS WHEREOF, the Executive and, the Company, pursuant
to the authorization from its Board, have caused this Agreement to be executed
in its name on its behalf, all as of the day and year first above written.
EXECUTIVE
________________________________________
Xxxxxxx X. Xxxxxxx, M.D.
THE TENERE GROUP, INC.
By______________________________________
Name:___________________________________
Title:__________________________________
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