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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made and entered into as
of July 1, 1999 by and between HORIZON PHARMACIES, INC, a Delaware corporation
(the "COMPANY"), and JOHN N. STOGNER (the "EMPLOYEE").
RECITAL
The Board of Directors of the Company (the "BOARD") has determined that
it is in the bestinterests of the Company and its stockholders to employ the
Employee on the terms and conditions set forth herein.
AGREEMENTS
NOW, THEREFORE, in consideration of the respective agreements and
covenants set forth herein and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. EMPLOYMENT PERIOD. Subject to the terms and provisions of this
Agreement, the Company hereby agrees to employ the Employee, and the
Employee hereby agrees to be employed by the Company, for a period (the
"EMPLOYMENT PERIOD") commencing on July 1, 1999, and ending on the
third anniversary of such date, unless earlier terminated in accordance
with Section 3. Any new employment agreement shall only be effective
after having been reduced to writing and executed by both parties
hereto. In the event the Employee continues to perform services after
the Employment Period, and pending execution of a new employment
agreement, if any, such services shall constitute employment for an
unspecified term, terminable at-will, with or without cause or reason,
with or without advance notice, and with or without pay in lieu of
advance notice.
2. TERMS OF EMPLOYMENT.
a. POSITION AND DUTIES.
i. During the term of the Employee's employment, the
Employee shall serve as Chief Financial Officer,
Treasurer and Director and, in so doing, shall
perform the normal duties associated with such
position and such other duties as may be assigned
from time to time by the Board, subject to the
general direction, approval and control of the Board.
ii. During the term of the Employee's employment, and
excluding any periods of vacation and sick leave to
which the Employee is entitled, the
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Employee agrees to devote his full working time to
the business and affairs of the Company and to use
the Employee's best efforts to perform faithfully,
effectively and efficiently such responsibilities.
iii. The Employee agrees to observe and comply
with the Company's policies, practices, and
procedures, as adopted or amended from time to time.
b. COMPENSATION.
i. BASE SALARY. During the term of the
Employee's employment, the Employee shall receive an
annual base salary ("ANNUAL BASE SALARY"), which
shall be paid in accordance with the customary
payroll practices of the Company, in an amount equal
to $165,000. The Board, in its sole discretion, may
at any time adjust the amount of the Annual Base
Salary as it may deem appropriate, and the term
"ANNUAL BASE SALARY," as used in this Agreement,
shall refer to the Annual Base Salary as it may be so
adjusted.
ii. INCENTIVE BONUS. Subject to the other terms
and conditions of this Agreement and as further
compensation for the performance of his services
hereunder, during the Employment Period, the Employee
shall be eligible to receive an annual incentive
bonus ("INCENTIVE BONUS") of up to forty percent
(40%) of the Employee's Annual Base Salary.
(1) CRITERIA. Prior to the end of each
fiscal year, the Board's Compensation
Committee shall approve the criteria
("CRITERIA") upon which the Employee's
Incentive Bonus for the following fiscal
year will be based, except that the Criteria
for fiscal year 1999 have been approved by
the Board's Compensation Committee as of the
date this Agreement is executed. The
Criteria for fiscal year 1999 are described
in EXHIBIT A, which is hereby incorporated
as part of this Agreement. The Criteria for
each subsequent fiscal year shall, after
approved by the Board's Compensation
Committee, be attached hereto as EXHIBIT A
as a substitute for the previous year's
Criteria, and shall become a part of this
Agreement for such fiscal year.
(2) TIME OF PAYMENT. The Incentive
Bonus, if earned, shall be paid to the
Employee upon completion of the Company's
annual audit or earlier if the Compensation
Committee of the Board determines that the
Employee achieved one or more of the
Criteria set forth in EXHIBIT A. The
Employee understands and agrees that he is
not guaranteed an Incentive Bonus and that
the amount of the Incentive Bonus, if any,
is dependant on the Compensation Committee
of the
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Board determining that the Employee achieved
one or more of the Criteria set forth in
EXHIBIT A.
iii. STOCK OPTION PLANS. During the term of the
Employee's employment, the Employee shall be entitled
to participate in the Company's stock option plans as
adopted or amended from time to time ("STOCK OPTION
PLANS").
iv. WELFARE BENEFIT PLANS. During the term of
the Employee's employment, the Employee and/or the
Employee's family, as the case may be, shall be
eligible for participation in and shall receive all
benefits under the welfare benefit plans, practices,
policies and programs applicable generally to other
employees of the Company (including, without
limitation, medical, prescription, dental,
disability, salary continuance, employee life, group
life, accidental death and travel accident insurance
plans and programs), as adopted or amended from time
to time ("WELFARE PLANS").
v. PERQUISITES. During the term of the
Employee's employment, the Employee shall be entitled
to receive (in addition to the benefits described
above) such perquisites and fringe benefits
appertaining to his position in accordance with any
policies, practices, and procedures established by
the Board, as amended from time to time.
vi. EXPENSES. During the term of the Employee's
employment, the Employee shall be entitled to receive
prompt reimbursement for all reasonable
business-related expenses incurred by the Employee in
accordance with the Company's policies, practices and
procedures, as adopted or amended from time to time.
vii. VACATION. During the term of the Employee's
employment, the Employee shall be entitled to four
(4) weeks of paid vacation each calendar year. Any
vacation shall be taken at the reasonable and mutual
convenience of the Company and the Employee. Accrued
vacation not taken in any calendar year will not be
carried forward or used in any subsequent calendar
year and the Employee shall not be entitled to
receive pay in lieu of accrued but unused vacation in
any calendar year.
3. TERMINATION OF EMPLOYMENT.
a. DEATH OR DISABILITY. The Employee's employment shall
terminate automatically upon the Employee's death during the
Employment Period. If the Disability of the Employee has
occurred during the Employment Period (pursuant to the
definition of Disability set forth below), the Company may
give to the Employee
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written notice in accordance with Section 10(c) of its
intention to terminate the Employee's employment. In such
event, the Employee's employment with the Company shall
terminate effective on the 30th day after receipt of such
notice by the Employee (the "DISABILITY EFFECTIVE DATE"),
provided that, within the 30 days after such receipt, the
Employee shall not have returned to perform, with or without
reasonable accommodation, the essential functions of his
position. For purposes of this Agreement, "DISABILITY" shall
mean the Employee's inability to perform, with or without
reasonable accommodation, the essential functions of his
position hereunder for a period of 180 consecutive days due to
mental or physical incapacity, as determined by mutual
agreement of a physician selected by the Company or its
insurers and a physician selected by the Employee; provided,
however, if the opinion of the Company's physician and the
Employee's physician conflict, the Company's physician and the
Employee's physician shall together agree upon a third
physician, whose opinion shall be binding.
b. CAUSE. The Company may terminate the Employee's
employment at any time during the Employment Period with or
without Cause. For purposes of this Agreement, "CAUSE" shall
mean (i) a breach by the Employee of the Employee's
obligations under Section 2(a) (other than as a result of
physical or mental incapacity) which constitutes
nonperformance by the Employee of his obligations and duties
thereunder, as determined by the Board (which may, in its sole
discretion, give the Employee notice of, and the opportunity
to remedy, such breach), (ii) commission by the Employee of an
act of fraud, embezzlement, misappropriation, willful
misconduct or breach of fiduciary duty against the Company or
other conduct harmful or potentially harmful to the Company's
best interest, as reasonably determined by a majority of the
members of the Board after a hearing by the Board following
ten (10) days' notice to the Employee of such hearing, (iii) a
material breach by the Employee of Sections 6, 7, 8 or 9, (iv)
the Employee's conviction, plea of no contest or NOLO
CONTENDERE, deferred adjudication or unadjudicated probation
for any felony or any crime involving moral turpitude, (v) the
failure of the Employee to carry out, or comply with, in any
material respect, any lawful directive of the Board consistent
with the terms of this Agreement (which the Board, in its sole
discretion, may give the Employee notice of, and an
opportunity to remedy), or (vi) the Employee's unlawful use
(including being under the influence) or possession of illegal
drugs. For purposes of the previous sentence, no act or
omission on the Employee's part shall be deemed "willful"
unless done, or omitted to be done, by the Employee not in
good faith and without reasonable belief that the Employee's
action or omission was in the best interest of the Company.
The Company may suspend the Employee's title and authority
pending the hearing provided for above. For purposes of this
Agreement, "WITHOUT CAUSE" shall mean a termination by the
Company of the Employee's employment during the Employment
Period at the Company's sole discretion for any reason other
than a termination based upon Cause, death or Disability.
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c. RESIGNATION. The Employee's employment may be
terminated during the Employment Period by the Employee. Such
termination ("RESIGNATION") shall not preclude the Company
from terminating the Employee's employment, in accordance with
the terms of this Agreement, prior to the Date of Termination
(as defined below) established by the Employee's Notice of
Termination (as defined below).
d. CHANGE OF CONTROL. If a Change of Control occurs
during the Employment Period and the Board determines in good
faith that it is in the Company's best interest to terminate
the Employee's employment with the Company, within one year of
such Change of Control the Company may terminate the
Employee's employment by giving the Employee written notice in
accordance with Section 10(c) of its intention to terminate
the Employee's employment. Any such termination by the Company
as contemplated in this Section 3(d) is referred to herein as
a termination "upon a Change of Control." For purposes of this
Agreement, "CHANGE OF CONTROL" means the occurrence of any of
the following: (i) any consolidation or merger of the Company
in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company's
capital stock would convert into cash, securities or other
property, other than a merger of the Corporation in which the
holders of the Company's capital stock immediately prior to
the merger have the same proportionate ownership of capital
stock of the surviving corporation immediately after the
merger, (ii) any sale, lease, exchange or other transfer
(whether in one transaction or a series of related
transactions) of all or substantially all of the assets of the
Company, (iii) the stockholders of the Company approve any
plan or proposal for the liquidation or dissolution of the
Company, (iv) any person (as used in Section 13(d) and
14(d)(2) of the Securities and Exchange Act of 1934, as
amended (the "Exchange Act")) becomes the beneficial owner
(within the meaning of Rule 13D-3 under the Exchange Act) of
50% or more of the Company's outstanding capital stock, (v)
during any period of two (2) consecutive years, individuals
who at the beginning of that period constitute the entire
Board of the Company, cease for any reason to constitute a
majority of the Board unless the election or the nomination
for election by the Company's stockholders of each new
director received the approval of the Board by a vote of at
least two-thirds of the directors then and still in office and
who served as directors at the beginning of the period, or
(vi) the Company becomes a subsidiary of any other Company.
e. NOTICE OF TERMINATION. Any termination by the Company
for Cause, without Cause, because of the Employee's Disability
or upon a Change of Control as contemplated in Section 3(d),
or by the Employee's Resignation, shall be communicated by
Notice of Termination to the other party hereto given in
accordance with Section 10(c). 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
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reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Employee's employment
under the 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 not be more than 30 days after the giving of such
notice). The failure by the Company to set forth in the Notice
of Termination any fact or circumstance which contributes to a
showing of Cause shall not waive any right of the Company
hereunder or preclude the Company from asserting such fact or
circumstance in enforcing the Company's rights hereunder.
f. DATE OF TERMINATION. "DATE OF TERMINATION" means (i)
if the Employee's employment is terminated by the Company for
Cause, without Cause or upon a Change of Control as
contemplated in Section 3(d), or by the Employee's
Resignation, the date of receipt of the Notice of Termination
or any later date specified therein pursuant to Section 3(e),
as the case may be, or (ii) if the Employee's employment is
terminated by reason of death or Disability, the date of death
of the Employee or the Disability Effective Date, as the case
may be.
4. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
a. FOR CAUSE; RESIGNATION; OTHER THAN FOR DEATH OR
DISABILITY. If, during the Employment Period, the Company
shall terminate the Employee's employment for Cause or the
Employee resigns from his employment, and the termination of
the Employee's employment in any case is not due to his death
or Disability, the Employee shall forfeit all rights to any
Incentive Bonus otherwise due to him or to which he may be
entitled, and the Company shall have no further payment
obligations to the Employee or his legal representatives,
other than for the payment of, in a lump sum in cash within
thirty (30) days after the Date of Termination (or such
earlier date as required by applicable law), that portion of
the Employee's Annual Base Salary accrued through the Date of
Termination to the extent not theretofore paid.
b. DEATH; DISABILITY. If the Employee's employment is
terminated by reason of the Employee's death or disability
during the Employment Period, the Company shall have no
further payment obligations to the Employee or his legal
representatives, other than for payment of (i) in a lump sum
in cash within thirty (30) days after the Date of Termination
(or such earlier date as required by applicable law) that
portion of the Employee's Annual Base Salary accrued through
the Date of Termination to the extent not theretofore paid,
and (ii) in a lump sum in cash within thirty (30) days after
the Date of Termination (or such earlier date as required by
applicable law), the Incentive Bonus prorated from the first
day of the Company's then current fiscal year to the Date of
Termination ("Prorated Incentive Bonus").
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c. WITHOUT CAUSE. If the Employee's employment is
terminated before expiration of the Employment Period by the
Company without Cause, the Employee will be entitled to
receive (i) in a lump sum in cash within thirty (30) days
after the Date of Termination (or such earlier date as
required by applicable law) that portion of the Employee's
Annual Base Salary accrued through the Date of Termination to
the extent not theretofore paid, (ii) in a lump sum in cash
within thirty (30) days after the Date of Termination (or such
earlier date as required by applicable law), the Prorated
Incentive Bonus, and (iii) severance payments ("SEVERANCE
PAYMENTS"), in accordance with the customary payroll practices
of the Company, in an amount equal to that portion of his
Annual Base Salary in effect on the Date of Termination for
the lesser of (1) twelve (12) months, or (2) the number of
full or partial calendar months remaining after termination
and before the expiration of the Employment Period,
("SEVERANCE PERIOD"), provided that such Severance Payments
shall be paid to the Employee only upon his execution and
non-revocation of a release and waiver of claims in the form
required by the Company.
d. CHANGE OF CONTROL. If the Employee's employment is
terminated upon a Change of Control as contemplated in Section
3(d), the Company shall have no further payment obligations to
the Employee or his legal representatives, other than for
payment of (i) in a lump sum in cash within thirty (30) days
after the Date of Termination (or such earlier date as
required by applicable law) that portion of the Employee's
Annual Base Salary accrued through the Date of Termination to
the extent not theretofore paid, (ii) in a lump sum in cash
within thirty (30) days after the Date of Termination (or such
earlier date as required by applicable law), the Prorated
Incentive Bonus, and (iii) Severance Payments, in accordance
with the customary payroll practices of the Company in an
amount equal to the Employee's Annual Base Salary for the
remainder of the Employment Period, provided that such
Severance Payments shall be paid to the Employee only upon his
execution and non-revocation of a release and waiver of claims
in the form required by the Company.
5. FULL SETTLEMENT, MITIGATION. In no event shall the Employee be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Employee under any of the
provisions of this Agreement and such amounts shall not be reduced
whether or not the Employee obtains other employment. Neither the
Employee nor the Company shall be liable to the other party for any
damages for breach of this Agreement in addition to the amounts payable
under Section 4 arising out of the termination of the Employee's
employment prior to the end of the Employment Period; provided,
however, that the Company shall be entitled to seek damages from the
Employee for any breach of Sections 6, 7, 8 or 9 by the Employee or for
the Employee's criminal misconduct.
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6. CONFIDENTIAL INFORMATION.
a. The Employee acknowledges that the Company has trade,
business and financial secrets and other confidential and
proprietary information (collectively, the "CONFIDENTIAL
INFORMATION"). Confidential information includes, but is not
limited to, sales materials, technical information, processes
and compilations of information, records, specifications and
information concerning customers or venders, customer lists,
and information regarding methods of doing business. As
defined herein, Confidential Information shall not include
information that is generally known to other persons or
entities who can obtain economic value from its disclosure or
use.
b. The Employee is aware of those policies implemented
by the Company to keep its Confidential Information secret.
The Employee acknowledges that the Confidential Information
has been developed or acquired by the Company through the
expenditure of substantial time, effort and money and provides
the Company with an advantage over competitors who do not know
or use such Confidential Information.
c. During and following the Employee's employment by the
Company, the Employee shall hold in confidence and not
directly or indirectly disclose or use or copy or make lists
of any Confidential Information except to the extent
authorized in writing by the Board or compelled by legal
process, other than to an employee of the Company or a person
to whom disclosure is reasonably necessary or appropriate in
connection with the performance by the Employee of his duties
as an employee of the Company. The Employee agrees to use
reasonable efforts to give the Company notice of any and all
attempts to compel disclosure of any Confidential Information,
in such a manner so as to provide the Company with written
notice at least five (5) days before disclosure or within one
(1) business day after the Employee is informed that such
disclosure is being or will be compelled, whichever is
earlier. Such written notice shall include a description of
the information to be disclosed, the court, government agency,
or other forum through which the disclosure is sought, and the
date by which the information is to be disclosed, and shall
contain a copy of the subpoena, order or other process used to
compel disclosure.
d. The Employee further agrees not to use any
Confidential Information for the benefit of any person or
entity other than the Company.
e. As used in this Section 6 "COMPANY" shall include
Horizon Pharmacies, Inc. and any of its affiliates.
7. SURRENDER OF MATERIALS UPON TERMINATION. All records, files,
documents and materials, or copies thereof, relating to the Company's
and its affiliates' business which the Employee shall prepare, or use,
or be provided with as a result of his employment with the
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Company, shall be and remain the sole property of the Company or its
affiliates, as the case may be, and shall be returned promptly by the
Employee to the owner upon termination of the Employee's employment
with the Company.
8. SUCCESSORS. The Company may assign its rights under this
Agreement to any successor to all or substantially all the assets of
the Company, by merger or otherwise, and may assign or encumber this
Agreement and its rights hereunder as security for indebtedness of the
Company and its subsidiaries subject to the assignee agreeing to assume
and perform all of the Company's obligations hereunder. The rights and
obligations of the Employee under this Agreement may not be assigned or
encumbered by the Employee, voluntarily or involuntarily, during his
lifetime, and any such purported assignment shall be void. However, all
rights of the Employee under this Agreement shall inure to the benefit
of and be enforceable by the Employee's personal or legal
representatives, estates, executors, administrators, heirs and
beneficiaries. All amounts payable to the Employee hereunder shall be
paid, in the event of the Employee's death, to the Employee's estate,
heirs and representatives.
9. NON-COMPETITION.
a. During his employment by the Company, including the
Employment Period, the Employee will have access to and become
acquainted with Confidential Information of the Company as
described in Section 6. Accordingly, in consideration for
having access to such Confidential Information, and in the
case of the Employee's termination without Cause or upon a
Change of Control as contemplated in Section 3(d) in
consideration for the Severance Payments, and in order to
protect its value to the Company, the Employee agrees that
during the Term of Non-Competition (as defined below) he will
not directly or indirectly disclose or use for any reason
whatsoever any Confidential Information obtained by reason of
his employment with the Company or any predecessor, except as
required to conduct the business of the Company. The
obligations of the Employee set forth in the preceding
sentence is in addition to, and not in lieu of, the
obligations of the Employee set forth in Section 6 of this
Agreement. The Term of Non-Competition (herein so called)
shall be for a term beginning on the date hereof and
continuing until (i) the first anniversary of the Date of
Termination if the Employee's employment is terminated by the
Company for Cause or due to Disability or by the Employee's
Resignation, or (ii) the end of the Severance Period if the
Employee's employment is terminated by the Company without
Cause or upon a Change of Control.
b. The Employee acknowledges and agrees that the nature
of the Confidential Information to which he will have access
during his employment by the Company would make it difficult,
if not impossible, for him to perform in a similar capacity
for a Competing Business (as defined below) without disclosing
or utilizing the
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Confidential Information. The Employee further acknowledges
and agrees that the Company's business is conducted throughout
the country in a highly competitive market. Accordingly, the
Employee agrees that, during the term of Non-Competition, the
Employee will not (other than for the benefit of the Company
pursuant to this Agreement) directly or indirectly,
individually or as an officer, director, employee,
shareholder, consultant, contractor, partner, joint venturer,
agent, equity owner or in any capacity whatsoever (i) engage
in the operation of retail pharmacies or in any other business
activity that the Company is conducting, or is intending to
conduct, on the Date of Termination (a "COMPETING BUSINESS"),
(ii) hire, attempt to hire, or contact or solicit with respect
to hiring any employee of the Company, or (iii) divert or take
away any customers of the Company.
c. During the term of Non-Competition, the Employee will
not use the Employee's access to, knowledge of, or application
of Confidential Information to perform any duty for any
Competing Business; it being understood and agreed to that
this Section 9(c) shall be in addition to and not be construed
as a limitation upon the covenants in Sections 6 and 9(b)
hereof.
d. The Employee acknowledges that the geographic
boundaries, scope of prohibited activities, and time duration
of the preceding paragraphs are reasonable in nature and are
no broader than are necessary to maintain the confidentiality
and the goodwill of the Company and the confidentiality of its
Confidential Information and to protect the other legitimate
business interests of the Company.
e. If any court determines that any portion of this
Section 9 is invalid or unenforceable, the remainder of this
Section 9 shall not thereby be affected and shall be given
full effect without regard to the invalid provisions. If any
court construes any of the provisions of this Section 9, or
any part thereof, to be unreasonable because of the duration
or scope of such provision, such court shall have the power to
reduce the duration or scope of such provision and to enforce
such provision as so reduced.
f. As used in this Section 9, "COMPANY" shall include
Horizon Pharmacies, Inc. and any of its affiliates.
10. MISCELLANEOUS.
a. CONSTRUCTION. This Agreement shall be deemed drafted
equally by both the parties. Its language shall be construed
as a whole and according to its fair meaning. Any presumption
or principle that the language is to be construed against any
party shall not apply. The headings in this Agreement are only
for convenience and are not intended to affect construction or
interpretation. Any references to paragraphs, subparagraphs,
sections or subsections are to those parts of this Agreement,
unless
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the context clearly indicates to the contrary. Also, unless
the context clearly indicates to the contrary, (i) the plural
includes the singular and the singular includes the plural,
(ii) "and" and "or" are each used both conjunctively and
disjunctively, (iii) "any," "all," "each," or "every" means
"any and all", and "each and every", (iv) "include" and
"including" are each "without limitation", (v) "herein,"
"hereof," "hereunder" and other similar compounds of the word
"here" refer to the entire Agreement and not to any particular
paragraph, subparagraph, section or subsection, and (vi) all
pronouns and any variations thereof shall be deemed to refer
to the masculine, feminine, neuter, singular or plural as the
identity of the entities or persons referred to may require.
b. DEFINITIONS. As used in this Agreement, "AFFILIATE"
means, with respect to a person, any other person controlling,
controlled by or under common control with the first person;
the term "CONTROL," and correlative terms, means the power,
whether by contract, equity ownership or otherwise, to direct
the policies or management of a person; and "PERSON" means an
individual, partnership, corporation, limited liability
company, trust or unincorporated organization, or a government
or agency or political subdivision thereof.
c. NOTICES. All notices and other communications
hereunder shall be in writing and shall be given by hand
delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Employee: John N. Stogner
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If to the Company: Horizon Pharmacies, Inc.
531 W. Main Street
Denison, Texas 75020
Attn: Ricky D. McCord
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
d. ENFORCEMENT. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or
future laws effective during the term of this Agreement, such
provision shall be fully severable; this Agreement shall be
construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a portion of this
Agreement; and the remaining provisions of this Agreement
shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or
by its severance from this Agreement.
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Furthermore, in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as part of this
Agreement a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
e. 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.
f. ARBITRATION. The Company and the Employee agree to
the resolution by binding arbitration of all claims, demands,
causes of action, disputes, controversies or other matters in
question ("claims"), whether or not arising out of this
Agreement or the Employee's employment (or its termination),
whether sounding in contract, tort or otherwise and whether
provided by statute or common law, that the Company may have
against the Employee or that the Employee may have against the
Company or its parents, subsidiaries and affiliates, and each
of the foregoing entities' respective officers, directors,
employees or agents in their capacity as such or otherwise;
except that this agreement to arbitrate shall not limit the
Company's right to seek equitable relief, including injunctive
relief and specific performance, and damages in a court of
competent jurisdiction for an alleged breach of Sections 6, 7,
8 or 9 of this Agreement. Claims covered by this agreement to
arbitrate also include claims by the Employee for breach of
this Agreement, wrongful termination, discrimination (based on
age, race, sex, disability, national origin or any other
factor) and retaliation. In the event of any breach of this
Agreement by the Company, it is expressly agreed that
notwithstanding any other provision of this Agreement, the
only damages to which the Employee shall be entitled is lost
compensation and benefits in accordance with Section 2(b) or
4. The Company and the Employee agree that any arbitration
shall be in accordance with the Federal Arbitration Act
("FAA") and, to the extent an issue is not addressed by the
FAA, with the then-current National Rules for the Resolution
of Employment Disputes of the American Arbitration Association
("AAA") or such other rules of the AAA as applicable to the
claims being arbitrated. If a party refuses to honor its
obligations under this agreement to arbitrate, the other party
may compel arbitration in either federal or state court. The
arbitrator shall apply the substantive law of the State of
Texas (excluding Texas choice-of-law principles that might
call for the application of some other state's law), or
federal law, or both as applicable to the claims asserted. The
arbitrator shall have exclusive authority to resolve any
dispute relating to the interpretation, applicability,
enforceability or formation of this agreement to arbitrate,
including any claim that all or part of this Agreement is void
or voidable and any claim that an issue is not subject to
arbitration. The parties agree that venue for arbitration will
be in Denison, Texas, and that any arbitration commenced in
any other venue will be transferred to Denison, Texas, upon
the written request of any party to this Agreement. In the
event that an arbitration is actually conducted pursuant to
this Section 10(f), the party in whose favor the
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arbitrator renders the award shall be entitled to have and
recover from the other party all costs and expenses incurred,
including reasonable attorneys' fees, expert witness fees, and
costs actually incurred. Any and all of the arbitrator's
orders, decisions and awards may be enforceable in, and
judgment upon any award rendered by the arbitrator may be
confirmed and entered by, any federal or state court having
jurisdiction. All proceedings conducted pursuant to this
agreement to arbitrate, including any order, decision or award
of the arbitrator, shall be kept confidential by all parties.
THE EMPLOYEE ACKNOWLEDGES THAT, BY SIGNING THIS AGREEMENT, THE
EMPLOYEE IS WAIVING ANY RIGHT THAT THE EMPLOYEE MAY HAVE TO A
JURY TRIAL OR A COURT TRIAL OF ANY EMPLOYMENT-RELATED CLAIM
ALLEGED BY THE EMPLOYEE.
g. NO WAIVER No waiver by either party at any time of
any breach by the other party of, or compliance with, any
condition or provision of this Agreement to be performed by
the other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at any time.
h. EQUITABLE AND OTHER RELIEF. The Employee acknowledges
that money damages would be both incalculable and an
insufficient remedy for a breach of Sections 6, 7, 8 or 9 by
the Employee and that any such breach would cause the Company
irreparable harm. Accordingly, the Company, in addition to any
other remedies at law or in equity it may have, shall be
entitled, without the requirement of posting of bond or other
security, to equitable relief, including injunctive relief and
specific performance, in connection with a breach of Sections
6, 7, 8 or 9 by the Employee. In addition to the remedies the
Company may have at law or in equity, violation of Sections 6
or 9 herein will entitle the Company at its sole option to
discontinue the Severance Payments to the Employee, and to
seek repayment from the Employee of any Severance Payments
paid to him by the Company during the period of time the
Employee was in violation of Sections 6 or 9. No action taken
by the Company under this Section 10(h) shall affect the
enforceability of the release and waiver of claims executed by
the Employee pursuant to Sections 4(d) and (e).
i. COMPLETE AGREEMENT. The provisions of this Agreement
constitute the entire and complete understanding and agreement
between the parties with respect to the subject matter hereof,
and supersedes all prior and contemporaneous oral and written
agreements, representations and understandings of the parties,
which are hereby terminated. Other than expressly set forth
herein, the Employee and Company acknowledge and represent
that there are no other promises, terms, conditions or
representations (or written) regarding any matter relevant
hereto. This Agreement may be executed in two or more
counterparts.
j. SURVIVAL. Sections 6, 7, 8, 9 and 10 of this
Agreement shall survive the termination of this Agreement.
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k. CHOICE OF LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of
Texas without reference to principles of conflict of laws of
Texas or any other jurisdiction, and, where applicable, the
laws of the United States.
l. AMENDMENT. This Agreement may not be amended or
modified at any time except by a written instrument approved
by the Board and executed by the Company and the Employee.
m. EMPLOYEE ACKNOWLEDGMENT. The Employee acknowledges
that he has read and understands this Agreement, is fully
aware of its legal effect, has not acted in reliance upon any
representatives or promises made by the Company other than
those contained in writing herein, and has entered into this
Agreement freely based on his own judgment.
IN WITNESS WHEREOF, the Employee has hereunto set the Employee's hand
and, pursuant to the authorization from the Board, the Company has caused this
Agreement to be executed in its name on its behalf, all as of the day and year
first above written.
EMPLOYEE:
/s/ John N. Stogner
--------------------------------------------
John N. Stogner
HORIZON PHARMACIES, INC., a Delaware
corporation.
By: /s/ Ricky D. McCord
-----------------------------------
Name: Ricky D. McCord
---------------------------------
Title: President
--------------------------------
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EXHIBIT A
Employee's Incentive Bonus shall be payable upon the following
criteria:
- If the Company achieves a net profit per its annual
business plan for fiscal year 1999, the Employee
shall receive, as an Incentive Bonus, an amount equal
to ten percent (10%) of his Annual Base Salary.
- If the Company achieves the revenues projected in its
annual business plan for fiscal year 1999, the
Employee shall receive, as an Incentive Bonus, an
amount equal to ten percent (10%) of his Annual Base
Salary.
- If the Company successfully completes the
installation of the PDX pharmacy computer system in
all pharmacies within twelve (12) months of the
Effective Date of this Agreement, the Employee shall
receive, as an Incentive Bonus, an amount equal to
ten percent (10%) of his Annual Base Salary.
- If the Company develops a plan for the complete
integration of all systems, specifically its
Pharmacy, Point-of-Sale, Med Act and Great Plains
systems, the Employee shall receive, as an Incentive
Bonus, an amount equal to ten percent (10%) of his
Annual Base Salary.
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