ADMINISTRATOR'S EMPLOYMENT AGREEMENT
January 1, 1995
The parties to this Agreement are THE CORVALLIS CLINIC, P.C., an
Oregon Professional Corporation ("the Clinic") and XXXXX X. XXXXXXXX
("Xxxxxxxx").
In consideration of the promises and covenants exchanged and under the
conditions set forth, the Clinic agrees to employ Xxxxxxxx and Xxxxxxxx agrees
to serve as CEO/Administrator of The Corvallis Clinic, P.C.
1. TERM.
The term of this Agreement shall be for the period January 1, 1995
through December 31, 1995, unless extended as provided in paragraph 2 or
terminated as provided in paragraph 11.
2. AUTOMATIC RENEWAL OF AGREEMENT.
This Agreement will be automatically renewed from year-to-year unless
the Clinic or Xxxxxxxx gives the other party notice of an intent not to renew or
to modify the Agreement at least 180 days before the end of the calendar year.
1
3. PERFORMANCE.
As CEO/Administrator of the Clinic, Xxxxxxxx agrees to devote his full
time, effort, ability and knowledge to the general management of the Clinic. He
agrees to faithfully represent the Clinic in the community and in various
professional and non-professional associations.
4. RESPONSIBILITY.
Xxxxxxxx shall be responsible for management of all business affairs,
development of goals, growth planning and long-range planning for the Clinic and
its related organizations. Xxxxxxxx shall be directly responsible to the Board
of Directors of the Clinic, and he shall receive from them direction and policy
statements and guidelines for the overall management of the Clinic.
5. AUTHORITY.
In performing the above-described responsibilities, Xxxxxxxx'x
authority shall include:
A. Employment and termination of all non-physician employees.
Establishment and administration of
2
personnel policies and salary scales for all non-physician
employees.
B. Installation and maintenance of proper accounting systems;
payment of all financial obligations when due; preparation and
presentation of financial reports; and preparation of all tax
returns for timely filing.
C. General financial management including the procurement of
necessary loans and other financing, and the management of
corporate stock ownership.
D. Consultation with auditors, attorneys and other consultants
concerning business matters of the Clinic.
E. Establishment and administration of patient billing systems and
procedures, and credit and collection policies.
F. Purchasing of all supplies and equipment; maintenance of Clinic
property in a clean condition and good state of repair.
3
G. Negotiations and interactions with hospitals, insurance
companies, state agencies and other third party payors.
Xxxxxxxx may delegate responsibilities to subordinate personnel as he
sees fit, however, he shall remain ultimately responsible to the Clinic for the
total business management. Notwithstanding any provision of this Agreement, the
Board of Directors may, at its discretion, assign responsibilities to other
individuals.
6. PROFESSIONAL ASSOCIATIONS AND EXPENSES.
Xxxxxxxx shall be accorded the same educational meeting time and
expense allowance as is provided for the Shareholder Employees of the Clinic.
He shall maintain his own automobile and shall carry liability insurance in the
minimum amount of $250,000/$500,000 bodily injury limits and $50,000 property
damage limits. Such policies are to be written with insurance companies and in
such forms as may be approved by the Clinic. The Clinic will reimburse Xxxxxxxx
for business use of his automobile at the prevailing rate per mile. Xxxxxxxx
shall also be reimbursed for all other out-of-pocket expenses incurred while
representing the Clinic or conducting Clinic business.
4
7. COMPENSATION AND BENEFITS.
Xxxxxxxx shall receive total compensation of 100 percent of Average
Shareholder Income, ("ASI") as defined in the Master Employment Agreement for
Shareholder Employees. Total compensation shall be paid as follows:
A. Monthly compensation shall be equal to the budgeted ASI divided
by 12 months.
B. At the end of the fiscal year, a bonus equal to the difference
between budgeted ASI and actual ASI will be reconciled.
C. Beginning with the 25th month of employment, employer
contributions to the Money-Purchase Pension Plan on behalf of
Xxxxxxxx will be deducted from the monthly compensation and any
bonuses.
Xxxxxxxx may make voluntary qualified contributions to the Clinic 401(k)
Profit-Sharing Plan and to the Voluntary Tax-Sheltered Medical Reimbursement
Plan. Xxxxxxxx may authorize deduction from income of 50 percent of the total
premium cost for health insurance; the Clinic will provide the remaining
5
cost of health insurance premiums. Other than the required payroll tax
withholdings, there shall be no additional deductions from compensation, except
as authorized by Xxxxxxxx.
8. VACATION.
Xxxxxxxx shall receive four weeks vacation per year.
9. SICK LEAVE/DISABILITY LEAVE/LONG-TERM DISABILITY INSURANCE.
Xxxxxxxx shall receive the same sick leave, disability leave and
long-term disability insurance as is provided to Shareholder Employees.
10. OTHER BENEFITS.
Xxxxxxxx shall receive all of the other benefits provided by the
Clinic to other non-Shareholder employees of the Clinic under the then current
Employee Welfare Benefit Plan.
11. TERMINATION.
Xxxxxxxx may terminate this Agreement by giving the Clinic Board of
Directors 180 days written notice of his
6
intent. The Clinic may terminate this Agreement at any time for cause. As
used in this paragraph, "cause" includes a material breach of this Agreement,
fraud, gross negligence or dishonesty.
12. SEVERANCE BENEFIT.
If within six months following a Change of Control (as defined below)
(a) Xxxxxxxx is terminated by the Clinic or its successor in interest without
material cause or (b) the Clinic or its successor in interest makes any material
adverse change in Xxxxxxxx'x duties or compensation and Xxxxxxxx elects to
terminate his employment hereunder by giving written notice to the Clinic or its
successor in interest, then the Clinic or its successor in interest shall pay to
Xxxxxxxx a lump sum severance benefit equal to nine months of his then salary
(excluding any incentive compensation). Such payment shall be made within
thirty days after the effective date of Xxxxxxxx'x employment termination.
For purposes of this paragraph 12, a "Change of Control" shall mean:
(i) The completion of any merger of consolidation of the Clinic with
any other organization if, following the merger or consolidation,
those persons who were
7
shareholders of the Clinic immediately before the transaction own less
than fifty percent of the equity interests in the surviving
organization immediately after the transaction,
(ii) A sale or other transfer of the outstanding shares of the Clinic
in one transaction with the result that those persons who were
shareholders of the Clinic immediately before the transaction own less
than fifty percent of the equity interests in the Clinic or the entity
purchasing the Clinic's shares immediately after the transaction, or
(iii) The sale or other disposition of all or substantially all of
the assets of the Clinic.
13. FUTURE DISPUTES.
In the event that any dispute arises related to Xxxxxxxx'x employment
or the termination of that employment, the parties agree to submit the dispute
to mediation. If mediation is not successful, the parties agree to submit the
dispute to binding arbitration under the American Arbitration Association rules
for employment disputes.
14. COMPLETE AGREEMENT.
8
This Agreement is the complete and final agreement between the parties and
supersedes all prior oral and written Agreements. Any modification to this
Agreement must be in writing and signed by the Chairman of the Board of
Directors.
15. ASSIGNMENT.
The rights and obligations of the parties under this Agreement shall inure
to the benefit of and shall be binding upon their respective successors and
permitted assigns. Xxxxxxxx may not assign any of his rights or obligations
under this Agreement. The Clinic may assign this Agreement and its rights and
obligations hereunder in any transaction which constitutes a Change of Control
within the meaning of paragraph 12.
/s/ illegible /s/ Xxxxx X. Xxxxxxxx
----------------------------------- ---------------------------------------
For the Corvallis Xxxxx X. Xxxxxxxx
Clinic, P.C.
Date: 3/9/95 Date: 3/9/95
------------------------------ ----------------------------------
9
