Exhibit 10.29
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made January 31, 1996, effective as of July 1, 1995, by
and between RESPONSE ONCOLOGY, INC., a Tennessee corporation (the
"Company"), and JOSEPH T. CLARK (the "Executive").
WHEREAS, the Company is engaged in the business of providing advanced
cancer treatment services; and
WHEREAS, the Company desires to employ the Executive to devote full time to
the business of the Company and to continue as the President and Chief
Operating Officer of the Company; and
WHEREAS, the Executive desires to be employed on the terms and subject to
the conditions hereinafter stated.
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Employment Agreement, the parties hereby agree as follows:
1
POSITION AND RESPONSIBILITIES
During the Term of this Employment Agreement, the Executive shall perform
such duties for such compensation and subject to such terms and conditions
as are hereinafter set forth.
2
TERM AND DUTIES
2.1 Term; Extension. The term of this Employment Agreement (the "Term of
this Employment Agreement") will commence as of July 1, 1995, and shall
continue through December 31, 1997. On the first and each successive
anniversary of the effective date of this Employment Agreement, the Term of
this Employment Agreement shall be extended for an additional one (1) year
period, unless either party gives notice no later than such anniversary
date of such party's intent not to extend the Term of this Employment
Agreement. Termination of the Executive's employment pursuant to this
Employment Agreement shall be governed by Sections 4 and 5.
2.2 Duties. The Executive shall devote substantially all of his time and
attention and best efforts during normal business hours to the Company's
affairs. The Executive shall have such duties and responsibilities as are
assigned to him from time to time by the Board of Directors. As of the
effective date of this Employment Agreement, the Executive shall continue
to possess and assume senior operating authority and responsibility as
Chief Executive Officer of the Company, consistent with directions from the
Board of Directors of the Company.
2.3 Location. The duties of the Executive shall be performed at such
locations and places as may be directed by the Board of Directors.
3
COMPENSATION AND BENEFITS
3.1 Base Compensation. The Company shall pay the Executive a base salary
("Base Salary") of $200,000 per annum, subject to applicable withholdings.
Base Salary shall be payable according to the customary payroll practices
of the Company but in no event less frequently than once each month. The
Base Salary shall be reviewed annually and shall be subject to increase or
decrease according to the policies and practices adopted by the Board of
Directors from time to time; provided, however, that in no event shall the
Base Salary for any year be decreased by more than five percent (5%) from
the immediately preceding year's Base Salary as a result of any such annual
review.
3.2 Annual Incentive Awards. The Company will pay the Executive annual
incentive compensation of up to 100% of his Base Salary, in accordance with
policies and based on performance targets established annually by the
Compensation Committee of the Board of Directors.
3.3 Additional Benefits. The Executive will be entitled to participate in
all employee benefit plans or programs and receive all benefits and
perquisites to which any salaried employees are eligible under any existing
or future plans or programs established by the Company for salaried
employees. The Executive will participate to the extent permissible under
the terms and provisions of such plans or programs in accordance with
program provisions. These may include group hospitalization, health, dental
care, life or other insurance, tax qualified pension, car allowance,
savings, thrift and profit sharing plans, termination pay programs, sick
leave plans, travel or accident insurance, disability insurance, and
contingent compensation plans, including capital accumulation programs,
restricted stock programs, stock purchase programs and stock options plans.
Nothing in this Agreement will preclude the Company from amending or
terminating any of the plans or programs applicable to salaried employees
or senior executives. The Executive will be entitled to an annual paid
vacation as established by the Board of Directors.
3.4 Business Expenses. The Company will reimburse the Executive for all
reasonable travel and other expenses incurred by the Executive in
connection with the performance of his duties and obligations under this
Employment Agreement.
3.5 Withholding. The Company may directly or indirectly withhold from any
payments under this Employment Agreement all federal, state, city or other
taxes that shall be required pursuant to any law or governmental
regulation.
4
DEATH BENEFIT; DISABILITY COMPENSATION; KEY MAN INSURANCE
4.1 Payment in Event of Death. In the event of the death of the Executive
during the Term of this Employment Agreement, the Company's obligation to
make payments under this Employment Agreement shall cease as of the date of
death, except for earned but unpaid Base Salary and incentive compensation
which will be paid on a pro-rated basis for that year. The Executive's
designated beneficiary will be entitled to receive the proceeds of any life
or other insurance or other death benefit programs provided or referred to
in this Employment Agreement, other than "key man" life insurance benefits.
4.2 Disability Compensation. Notwithstanding the disability of the
Executive, the Company will continue to pay the Executive pursuant to
Section 3 hereof during the Term of this Employment Agreement, unless the
Executive's employment is earlier terminated in accordance with this
Employment Agreement. In the event the disability continues for a period of
three (3) months, the Company may thereafter terminate this Employment
Agreement and the Executive's employment. Following such termination, the
Company will pay the Executive amounts equal to his regular installments of
Base Salary, as of the time of termination, for a period of six (6) months.
All other compensation will cease except for earned but unpaid incentive
compensation awards which would be payable on a pro-rated basis for the
year in which the disability occurred, through the date of termination.
4.3 Responsibilities in the Event of Disability. During the period the
Executive is receiving payments following his disability and as long as he
is physically and mentally able to do so, the Executive will furnish
information and assistance to the Company and from time to time will make
himself available to the Company to undertake assignments consistent with
his position or prior position with the Company and his physical and mental
health. If the Company fails to make a payment or provide a benefit
required as part of this Employment Agreement, the Executive's obligation
to provide information and assistance will end.
4.4 Definition of Disability. For purposes of this Employment Agreement,
the term "disability" will have the same meaning as is attributed to such
term, or any substantially similar term, in the Company's long term income
disability plan as in effect from time to time.
4.5 Key-Man Life Insurance. Upon request by the Company, the Executive
agrees to cooperate with the Company in obtaining "key man" life insurance
on the life of the Executive, with death benefits payable to the Company.
Such cooperation shall include the submission by the Executive to a medical
examination and his response to inquiries regarding his medical history.
5
TERMINATION OF EMPLOYMENT
Notwithstanding anything herein to the contrary, this Employment Agreement
and the Executive's employment with the Company may be terminated by the
Company at any time, subject to the terms and provisions of this Section 5.
5.1 Termination Without Cause.
(a) Without a Change in Control. If the Executive suffers a Termination
Without Cause (hereinafter defined) and a Change in Control (hereinafter
defined) shall not have occurred within one (1) year prior thereto, the
Company will continue to pay the Executive amounts equal to his Base
Salary, as in effect at the time of the Termination Without Cause, for the
remaining Term of this Employment Agreement; provided, however, if the
Executive shall give the notice referred to in Section 6.3(c), the
Executive shall not be entitled to any amounts for periods after the
effective date of such notice. Earned but unpaid Base Salary through the
date of termination will be paid in a lump sum at such time, and pro-rated
incentive compensation, if any, for the year of termination, to the date of
termination, will be paid to the Executive in accordance with the Company's
customary practice for payment of incentive compensation. For six (6)
months following such Termination Without Cause, the Company shall
reimburse the Executive for the cost of the Executive's major medical
health insurance as in effect at the date of termination; provided that
reimbursement for the costs of such medical insurance shall cease upon the
effective date of a notice given by the Executive pursuant to Section
6.3(c). The exercisability of stock options granted to the Executive shall
be governed by any applicable stock option agreements and the terms of the
respective stock option plans.
(b) Upon a Change in Control. If the Executive suffers a Termination
Without Cause within one (1) year following a Change in Control, the
Company will pay to the Executive in a lump sum upon such termination an
amount equal to the lesser of (i) 300% of the Executive's Base Salary as in
effect at the time of the termination and (ii) the maximum amount which
could be paid and not result in such amount or any other payment in the
nature of compensation (within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated
thereunder ("Section 280G")) to or for the benefit of the Executive, or any
part of such amount or other payment, constituting a "parachute payment"
within the meaning of Section 280G. Earned but unpaid Base Salary through
the date of termination will be paid in a lump sum at such time and pro
rated incentive compensation, if any, for the year of termination, to the
date of termination, will be paid to the Executive in accordance with the
Company's customary practice for payment of incentive compensation.
5.2 Termination With Cause; Voluntary Termination. If the Executive suffers
a Termination with Cause or the Executive terminates his employment with
the Company (a "Voluntary Termination"), then, whether or not there has
been a Change in Control, the Company will not be obligated to pay the
Executive any amounts of compensation or benefits following the date of
termination. However, earned but unpaid Base Salary through the date of
termination will be paid in a lump sum at such time, and incentive
compensation, if any, for the year during which such termination occurs
will be pro rated for the portion of the year prior to the date of
termination and paid in accordance with the Company's customary practice
for payment of incentive compensation.
5.3 Definitions. For purposes of this Employment Agreement, the following
terms have the following meanings:
(a) A "Change in Control" shall occur if an event or series of events
occurs after the effective date of this Employment Agreement which would
constitute either a change in ownership of the Company, within the meaning
of Section 280G or a change in the ownership of a substantial portion of
the Company's assets, within the meaning of Section 280G, but for purposes
of this definition, the fair market value threshold for determining
"substantial portion of the Company's assets" shall be "greater than 50%;"
provided that neither a distribution of shares of Company stock by Seafield
Capital Corporation ("Seafield") to its shareholders nor a sale (including
a sale by Seafield) of shares of Company stock in a public offering shall
constitute a change in control for purposes of this Employment Agreement.
(b) "Termination With Cause" means termination of the Executive's
employment by the Company, acting in good faith, by written notice to the
Executive specifying the event relied upon for such termination, due to the
Executive's conviction for a felony, the Executive's perpetration of a
fraud, embezzlement or other act of dishonesty or the Executive's breach of
a trust or fiduciary duty which materially adversely affects the Company or
its shareholders.
(c) "Termination Without Cause" means termination of the Executive's
employment by the Company other than due to the Executive's death or
disability or Termination With Cause.
6
OTHER DUTIES OF THE EXECUTIVE DURING
AND AFTER THE TERM OF THIS EMPLOYMENT AGREEMENT
6.1 Additional Information. The Executive will, upon reasonable notice,
during or after the Term of this Employment Agreement, furnish information
as may be in his possession and cooperate with the Company as may
reasonably be requested in connection with any claims or legal actions in
which the Company is or may become a party. The Executive shall receive
reasonable compensation for the time expended by him pursuant to this
Section 6.1.
6.2 Confidentiality. The Executive recognizes and acknowledges that all
information pertaining to the affairs, business, clients, customers or
other relationships of the Company, as hereinafter defined, is confidential
and is a unique and valuable asset of the Company. Access to and knowledge
of this information are essential to the performance of the Executive's
duties under this Employment Agreement. The Executive will not during the
Term of this Employment Agreement or thereafter, except to the extent
reasonably necessary in the performance of his duties under this Agreement,
give to any person, firm, association, corporation or governmental agency
any information concerning the affairs, business, clients, customers or
other relationships of the Company except as required by law. The Executive
will not make use of this type of information for his own purposes or for
the benefit of any person or organization other than the Company. The
Executive will also use his best efforts to prevent the disclosure of this
information by others. All records, memoranda, etc. relating to the
business of the Company whether made by the Executive or otherwise coming
into his possession are confidential and will remain the property of the
Company.
6.3 Noncompetition.
(a) During the Term of Employment. The Executive will not Compete with the
Company (as defined in subsection (d) hereafter) at any time while he is
employed by the Company or receiving payments from the Company.
(b) Voluntary Termination; Termination With Cause. In the event of a
Voluntary Termination or a Termination With Cause, the Executive will not
Compete with the Company for a period consisting of the longer of (i) the
remaining Term of this Employment Agreement and (ii) one (1) year; provided
that if a Voluntary Termination follows a notice by the Company under
Section 2.1 that the Term of this Employment Agreement will not be
automatically extended, there will be no restriction on the Executive's
right to Compete with the Company after the date his employment terminates.
(c) Termination Without Cause. In the event of a Termination Without Cause,
the Executive will not Compete with the Company for the then remaining Term
of this Employment Agreement; provided that if such Termination Without
Cause occurs within one (1) year after a Change in Control, there will be
no restriction on the Executive's rights to Compete with the Company after
the date his employment terminates and if the Executive gives written
notice to the Company that the Executive will forego payment of all amounts
otherwise due to him following the effective date of such notice as a
result of a Termination Without Cause, there will be no restriction on the
Executive's rights to Compete with the Company following such effective
date.
(d) Definition of "Compete" with the Company. For the purposes of this
Section 6, the term "Compete with the Company" means action by the
Executive, direct or indirect, for his own account or for the account of
others, either as an officer, director, stockholder, owner, partner,
member, promoter, employee, consultant, advisor, agent, manager, creditor
or in any other capacity, resulting in the Executive having any pecuniary
interest, legal or equitable ownership, or other financial or non-financial
interest in, or employment, association or affiliation with, any
corporation, business trust, partnership, limited liability company,
proprietorship or other business or professional enterprise that provides
oncology services or management services to any oncology or hematology
practice within a fifty mile radius of any location where the Company or
any subsidiary or affiliate of the Company performs such services at the
date of a termination of the Executive's employment or has performed such
services within one year prior to such termination of employment; provided,
however, that the term "Compete with the Company" shall not include
ownership (without any more extensive relationship) of a less than a 5%
interest in any publicly-held corporation or other business entity.
(e) Reasonableness of Scope and Duration; Remedies. The Executive
acknowledges that the covenants contained herein are reasonable as to
geographic and temporal scope. The Executive acknowledges that his breach
or threatened or attempted breach of any provision of Section 6 would cause
irreparable harm to the Company not compensable in monetary damages and
that the Company shall be entitled, in addition to all other applicable
remedies, to a temporary and permanent injunction and a decree for specific
performance of the terms of Section 6 without being required to prove
damages or furnish any bond or other security.
7
CONSOLIDATION, MERGER OR SALE OF ASSETS
Nothing in this Employment Agreement shall preclude the Company from
consolidating or merging into or with, or transferring all or substantially
all of its assets to, another corporation or organization which assumes
this Employment Agreement and all obligations and undertakings of the
Company hereunder. Upon such a consolidation, merger or sale of assets, the
term "the Company" as used herein will mean or include the other
corporation or organization and this Employment Agreement shall continue in
full force and effect. This Section 7 is not intended to modify or limit
the rights of the Executive hereunder.
8
MISCELLANEOUS
8.1 Entire Agreement. This Employment Agreement contains the entire
understanding between the Company and the Executive with respect to the
subject matter and supersedes any prior employment or severance agreements
between the Company and its affiliates, and the Executive.
8.2 Amendment; Waiver. This Employment Agreement may not be modified or
amended except in writing signed by the parties. No term or condition of
this Employment Agreement will be deemed to have been waived except in
writing by the party charged with waiver. A waiver shall operate only as to
the specific term or condition waived and will not constitute a waiver for
the future or act on anything other than that which is specifically waived.
8.3 Severability: Modification of Covenant. Should any part of this
Employment Agreement be declared invalid for any reason, such invalidity
shall not affect the validity of any remaining portion hereof and such
remaining portion shall continue in full force and effect as if this
Employment Agreement had been originally executed without including the
invalid part. Should any covenant of this Employment Agreement be
unenforceable because of its geographic scope or term, its geographic scope
or term shall be modified to such extent as may be necessary to render such
covenant enforceable.
8.4 Effect of Captions. Titles and captions in no way define, limit, extend
or describe the scope of this Employment Agreement nor the intent of any
provision thereof.
8.5 Counterpart Execution. This Employment Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
8.6 Governing Law; Arbitration. This Employment Agreement has been executed
and delivered in the State of Tennessee and its validity, interpretation,
performance and enforcement shall be governed by the laws of that state.
Any dispute among the parties hereto shall be settled by arbitration in
Memphis, Tennessee, in accordance with the rules then obtaining of the
American Arbitration Association and judgment upon the award rendered may
be entered in any court having jurisdiction thereof. All provisions hereof
are for the protection and are intended to be for the benefit of the
parties hereto and enforceable directly by and binding upon each party.
Each party hereto agrees that the remedy at law of the other for any actual
or threatened breach of this Employment Agreement would be inadequate and
that the other party shall be entitled to specific performance hereof or
injunctive relief or both, by temporary or permanent injunction or such
other appropriate judicial remedy, writ or orders as may be decided by a
court of competent jurisdiction in addition to any damages which the
complaining party may be legally entitled to recover together with
reasonable expenses of litigation, including attorney's fees incurred in
connection therewith, as may be approved by such court.
8.7 Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been made when
delivered or mailed first-class postage prepaid by registered mail, return
receipt requested, or when delivered if by hand, overnight delivery service
or confirmed facsimile transmission, to the following:
(i) If to the Company, at 1775 Moriah Woods Boulevard, Memphis, Tennessee
38117, Attention: Chairman of the Compensation Committee, or at such other
address as may have been furnished to the Executive by the Company in
writing; or
(ii) If to the Executive, at ____________________________________________
or such other address as may have been furnished to the Company by the
Executive in writing.
8.8 Binding Agreements. This Employment Agreement shall be binding on the
parties' successors, heirs and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Employment Agreement
as of the date first above written.
RESPONSE ONCOLOGY, INC.
By: /s/ Frank M. Bumstead
----------------------
Frank M. Bumstead
Vice Chairman
EXECUTIVE:
/s/ Joseph T. Clark
-------------------------
Joseph T. Clark