EXHIBIT 10. 4
EMPLOYMENT AGREEMENT BETWEEN
UCI MEDICAL AFFILIATES OF SOUTH CAROLINA, INC.
AND
X.X. XXXXXXXXX, III, M.D.
-72-
EMPLOYMENT AGREEMENT
This Employment Agreement is made as of the 1st day of October, 1995, by
and between UCI Medical Affiliates of South Carolina, Inc., a South Carolina
Corporation (UCI), and X. X. XxXxxxxxx, III, M. D. ("XxXxxxxxx").
WHEREAS, UCI desires to employ XxXxxxxxx, and XxXxxxxxx desires to be
employed by UCI, in accordance with the terms and conditions hereinafter set
forth:
NOW, THEREFORE, in consideration of the mutual promises herein set
forth, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties, intending to be legally bound, agree
as follows:
1. Employment. UCI hereby agrees to employ XxXxxxxxx to perform the duties
described in Section 3 below subject to and in accordance with the terms and
conditions hereof, and XxXxxxxxx hereby accepts such employment.
2. Term. The employment shall commence on the date hereof, and shall
continue for a period of Five (5) years unless earlier terminated in accordance
with the provisions of Section 8 of this Agreement.
3. Duties of XxXxxxxxx.
A. In accepting employment by UCI, XxXxxxxxx shall undertake
and assume the responsibility of performing for and on behalf of UCI the duties
of the President and Chief Executive Officer of UCI in Columbia, South Carolina.
Except with his written consent, XxXxxxxxx shall not be permanently assigned to
(i) any position of lower professional status, or (ii) a location outside of
Richland or Lexington Counties, South Carolina.
B. Other than XxXxxxxxx'x duties as an employee of Doctor's
Care, P.A., XxXxxxxxx shall be a full-time employee of UCI, and shall devote his
full working time and efforts to his duties hereunder. XxXxxxxxx shall perform
all of his duties hereunder to the best of his ability and shall not, directly
or indirectly, engage or participate in any activities in conflict with the best
interests of UCI. Without limiting the generality of the foregoing, XxXxxxxxx
shall not engage in any activity for compensation or pecuniary gain other than
his employment hereunder, his association with Doctor's Care, P.A., and passive
investing for the account of himself or members of his household. XxXxxxxxx
agrees that his total compensation for his service to UCI shall be described in
Section 4 of this Agreement.
XxXxxxxxx has entered into a separate Employment Agreement with
respect to his association with Doctor's Care, P.A. His compensation for
services to Doctor's Care, P.A. is described in Section 4 of that Agreement.
XxXxxxxxx agrees that his total compensation for his service to Doctor's Care,
P.A. is set forth in Section 4 of that Agreement.
4. Compensation. As compensation for the services to be rendered by
XxXxxxxxx for UCI under this Agreement, XxXxxxxxx shall be compensated by UCI on
the following basis:
A. Base Salary. During the term of this Agreement, XxXxxxxxx shall receive
from UCI an annual salary of One Hundred Fifty-Seven Thousand Five Hundred and
No/100 ($157,500), payable in pay periods as determined by UCI, but in no event
less frequently than monthly, subject to an annual increase upon approval by the
Board of Directors.
-73-
B. Dues. During the term of this Agreement, UCI shall pay all dues of
XxXxxxxxx as a member of one private club not to exceed Five Hundred Dollars and
No/100 ($500.00) per month for the purpose of entertainment of UCI's clients in
connection with the performance of XxXxxxxxx'x duties.
C. Vacation. During the term of this Agreement, XxXxxxxxx shall be
entitled to a total of thirty (30) business days of paid leave to attend
conventions and professional meetings and vacation time each calendar year.
Such vacation and leave days are to be taken at such time or times as
XxXxxxxxx may reasonably request, subject to UCI's convenience and prior
approval, which approval shall not be unreasonably withheld. Vacation and leave
time may cumulate year-to-year up to a maximum of 60 days.
D. Automobile. During the term of this Agreement, UCI shall provide to
XxXxxxxxx the use of one (1) automobile.
E. Reimbursement for Expenses. During the term of this Agreement, UCI
shall reimburse XxXxxxxxx for all reasonable expenses in an aggregate amount
equal to, or less than Seven Thousand five hundred dollars and No/100
($7,500.00) per annum incurred by XxXxxxxxx for the benefit of UCI in the
performance of his duties hereunder. Reimbursement for aggregate expenses each
calendar year in excess of such amount shall require the prior written approval
of the Board of Directors of UCI.
F. Other Benefits. During the term of XxXxxxxxx'x employment with UCI,
XxXxxxxxx shall receive from UCI such other benefits (e.g. health insurance
coverage, life insurance coverage, participation in pension plans, and
participation in stock option plans, etc.) reasonably comparable to, and no
worse than, those benefits, if any, generally provided to other senior
executives of UCI. Additionally, during his employment with UCI, XxXxxxxxx will
be provided at UCI's costs, with a term life insurance policy that at the time
of XxXxxxxxx'x death will pay One Million Dollars ($1,000,000) to his spouse or
other designated beneficiary(s).
G. Incentive Bonus. On or about the end of UCI's fiscal year, the Board
shall determine what, if any, Incentive Bonus payment shall be made to
XxXxxxxxx. This Incentive Bonus payment, if any, shall be based on two
variables: UCI's Net Income (Loss) for the previous fiscal year and the Gross
Revenue for the same year, as set forth in Addendum A, which is attached hereto.
The attached Addendum specifies the total Incentive Bonus, if any, to be paid to
XxXxxxxxx under differing scenarios based on UCI's Net Income (Loss) and Gross
Revenue for the previous year. The Board, in making its decision as to what, if
any, Incentive Bonus shall be paid to XxXxxxxxx, shall be governed by Addendum
A, and shall have no authority to alter or deviate from the amount, if any, of
the Inventive Bonus payment mandated by the Net Income/Gross Revenues grid in
Addendum A. In the event UCI pays XxXxxxxxx an Incentive Bonus, payment shall be
in the form of cash.
H. Discretionary Bonus. On or about the end of UCI's fiscal year, the
Board shall, in its sole discretion, determine whether or not XxXxxxxxx is to
be awarded a discretionary bonus, not to exceed 10% of his annual base salary.
This Discretionary Bonus, if any, shall be in addition to, and distinct from
any other compensation or bonus payment to XxXxxxxxx, provided, however,
nothing contained herein shall be construed in any way to obligate UCI to pay
a Discretionary Bonus to XxXxxxxxx. The factors to be reviewed by the Board
in determining whether or not a Discretionary Bonus, if any, shall be paid to
XxXxxxxxx shall include the following:
1. XxXxxxxxx'x ability and success in recruiting and retaining quality
physicians.
2. XxXxxxxxx'x ability and success in recruiting and retaining a quality
senior management team.
3. XxXxxxxxx'x ability and success in positioning UCI for implementation of
managed care.
-74-
4. XxXxxxxxx'x ability and success in developing a long-term strategic plan
for UCI.
In the event UCI pays XxXxxxxxx a Discretionary Bonus, payment shall be in the
form of cash.
5. Confidentiality and Secrecy. XxXxxxxxx acknowledges that in and
as a result of his employment hereunder, he will be making use of, acquiring,
and/or adding to confidential information of a special and unique nature and
value relating to UCI business, including without limitation technological
know-how, copyrights, proprietary information, trade secrets, systems,
procedures, manuals, confidential reports, records, operational expertise, lists
of customers and projects, the nature and type of services rendered by UCI, the
equipment and methods used and preferred by UCI customers, and the fees paid by
inducement to UCI to enter into this Agreement and to pay to XxXxxxxxx the
compensation stated in Section 4 herein, XxXxxxxxx covenants and agrees that
during the term of his employment hereunder, and for five (5) years after the
termination thereof, he shall not, directly or indirectly, make use of, or
disclose to any person, any confidential information of UCI or its affiliates.
XxXxxxxxx agrees that he will never disclose trade secrets of UCI and assigns
his rights to confidential information as "work made for hire" to UCI.
6. Covenants Against Competition. In view of the unique value to
UCI of the services of XxXxxxxxx for which UCI has contracted hereunder, because
of the confidential information to be obtained by or disclosed to XxXxxxxxx, as
herein above set forth, and because XxXxxxxxx'x employment hereunder will result
in XxXxxxxxx'x development of a unique relationship with customers, suppliers
and employees as a material inducement to UCI to enter into this Agreement and
to pay to XxXxxxxxx the compensation stated in Section 4 hereof, XxXxxxxxx
covenants and agrees as follows:
A. During XxXxxxxxx'x employment hereunder, and for a period
of two (2) years after the termination of XxXxxxxxx'x employment hereunder for
any reason, XxXxxxxxx shall not directly or indirectly solicit or divert
employment of any employee of UCI's business or employ any person previously
employed by UCI or its affiliates.
B. During XxXxxxxxx'x employment hereunder, and for a period
of two (2) years after the termination of XxXxxxxxx'x employment whereunder for
any reason, XxXxxxxxx shall not directly or indirectly solicit, divert, or
convert, or assist another person or entity to solicit, divert or convert, the
customers of UCI or its affiliates to any other company or entity.
C. During XxXxxxxxx'x employment hereunder, and for a period
of two (2) years after the termination of XxXxxxxxx'x employment with UCI,
XxXxxxxxx shall not within the geographic area specified below engage in any
business or perform any services, directly or indirectly, in competition with
the business of UCI or its affiliates or have any interest, whether as a
proprietor, partner, employee, stockholder (directly or beneficially),
principal, agent, consultant, director, officer or in any other capacity or
manner whatsoever, in any enterprise that shall so engage, except that XxXxxxxxx
shall be permitted to own for investment purposes only, directly or
beneficially, up to (but not more than) 2% in the aggregate of the stock of a
competing corporation which is publicly-traded on a national stock exchange or
the NASDAQ National Market System, so long as XxXxxxxxx is not a controlling
person of, or a member of a group that controls, such corporation and XxXxxxxxx
is not otherwise affiliated in any capacity with such corporation. The
restrictions to this Section 6(C) shall apply everywhere within a five (5) mile
radius of (i) any primary or urgent care facility owned or operated by UCI or an
affiliate, and (ii) each other location where UCI or any affiliate maintains an
office, in existence as of the date of such termination.
7. Reasonableness, Enforceability and Remedies.
X. XxXxxxxxx has carefully read and considered the provisions
of Section 5, 6 and 7, and, having done so, agrees that the restrictions set
forth in these Sections, including, but not limited to, the time period of
restriction and geographic limitations set forth in Section 6, are fair and
reasonable and are reasonably required for the protection of the interest of UCI
and its officers, directors, shareholders, employees, and affiliates.
-75-
B. In the event that, notwithstanding the foregoing, any of
the provisions of Sections 5, 6 and 7 hereof or any parts thereof shall be held
to be invalid or unenforceable, the remaining provisions or parts thereof shall
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable portions or parts had not been included therein. In the event that
any provision of Sections 5 and 6 hereof relating to the time period and/or
geographic restrictions and/or related aspects shall be declared by a court of
competent jurisdiction to exceed the maximum restrictiveness such court deems
reasonable and enforceable, the time period and/or geographic restrictions
and/or related aspects deemed reasonable and enforceable by the court shall
become and thereafter be the maximum restriction in such regard, and the
restriction shall remain enforceable to the fullest extent deemed reasonable by
such court.
X. XxXxxxxxx acknowledges that the services he is to render
are of a special and unusual character with a unique value to UCI and its
affiliates, the loss of which cannot adequately be compensated by damages in an
action at law. In the event of a breach or threatened breach by XxXxxxxxx of any
of the provisions of Section 5 or 6 hereof, UCI or its affiliates, in addition
to and not in limitation of, any other rights, remedies, or damages available to
UCI or its affiliates under this Agreement, shall be entitled to a permanent
injunction in order to prevent or restrain any such breach by XxXxxxxxx or by
XxXxxxxxx'x partners, agents, representatives, servants, employees, consulting
clients, and/or any and all persons directly or indirectly acting for or with
him.
X. XxXxxxxxx covenants and agrees that if he shall violate any
of his covenants or agreements under Section 5 or 6 hereof, UCI or its
affiliates shall be entitled to: (i) an accounting and repayment of all profits,
compensation, commissions, remuneration, or other benefits that XxXxxxxxx
directly or indirectly has realized and/or may realize as a result of, growing
out of, or in connection with, any such violation; (ii) recover actual damages
incurred by UCI or its affiliates as a result of any such violation; (iii) any
injunctive relief to which UCI or its affiliates is or may be entitled by law,
in equity, or under this Agreement; and (iv) exercise its other rights
respecting a breach of this Agreement as set forth herein.
X. XxXxxxxxx'x obligations under Section 5 and 6 hereof shall survive any
termination of employment hereunder.
8. Termination
A. For Cause by UCI. Notwithstanding any other provisions
hereof, UCI may terminate XxXxxxxxx'x employment under this Agreement
immediately at any time for "cause". For purposes hereof the term "cause" shall
include, but not limited to, the commission of any of the following by
XxXxxxxxx: dishonesty: theft; unethical business conduct; indictment for a
felony; incompetence in the performance of material duties on behalf of UCI;
violation of the terms and provisions of this Agreement; willful or recurring
insubordination; failure to attempt, in good faith, to comply with reasonable
instructions of UCI; if XxXxxxxxx'x license to practice medicine in the State of
South Carolina is revoked or otherwise terminated; or if XxXxxxxxx fails to
follow accepted medical practices or is guilty of misconduct under the
principles of medical ethics of the American Medical Association. All
compensation (including without limitation the Base Salary, and all
prerequisites and fringe benefits) to which XxXxxxxxx would otherwise be
entitled shall be discontinued and forfeited as of the effective date of such
termination.
B. Without Cause by UCI. UCI may terminate this Agreement
"without cause" at any time upon written notice to XxXxxxxxx. In the event of
such termination, XxXxxxxxx shall be paid a lump sum severance payment equal to
two (2) times his last 2 years of Base Salary plus Incentive and Discretionary
Bonuses. All other compensation (including without limitation any prerequisites
and fringe benefits, if any) to which XxXxxxxxx would otherwise be entitled (for
periods after the effective date of such termination) shall be discontinued and
forfeited as of the effective date of such termination.
C. Termination by XxXxxxxxx. XxXxxxxxx may with or without cause terminate
this Agreement upon (60) days prior written notice to UCI. In the event of such
termination, all
-76-
compensation (including without limitation the Base Salary and any
prerequisites and fringe benefits, if any) to which XxXxxxxxx would otherwise be
entitled (for periods after the effective date of the termination) shall be
discontinued and forfeited as of the effective date of such termination.
D. Disability. In the event of XxXxxxxxx'x disability during
employment under this Agreement, then employment under this Agreement shall
terminate. For purposes of this Agreement, except as provided herein below,
"disability" shall mean the inability of XxXxxxxxx, due to sickness or other
incapacity, to perform his duties under his Agreement for a period in excess of
one hundred and eighty (180) substantially consecutive days. Such termination
shall become effective at UCI's election upon the expiration of such one hundred
and eighty (180) day period of disability. Upon termination of employment under
this Agreement due to XxXxxxxxx'x disability, XxXxxxxxx shall be entitled to
payment of his Base Salary up to the date of termination.
E. Death. In the event XxXxxxxxx dies during this term of this Agreement,
this Agreement shall terminate and UCI shall pay to XxXxxxxxx'x estate all Base
Salary accrued but unpaid through the date of XxXxxxxxx'x death.
9. Burden of Benefit. This Agreement shall be binding upon, and shall inure
to the benefit of UCI, XxXxxxxxx, UCI's affiliates, and their respective heirs,
personal and legal representatives, successors, and assigns.
10. Assignment. This Agreement and any rights hereunder are personal to
XxXxxxxxx and shall not be assigned or otherwise transferred by XxXxxxxxx.
11. Governing Law/Jurisdiction. The construction and interpretation of
this Agreement shall at all times and in all respects be governed by the laws
of the State of South Carolina. XxXxxxxxx and UCI hereby (i) agree that any
litigation, action or proceeding arising out of or relating to this Agreement
may be instituted in a state or federal court in Columbia, South Carolina,
(ii) waives any objection which it might have now or hereafter to any
litigation, action or proceeding based upon improper venue or inconvenient
forum, and (iii) irrevocably submits to the jurisdiction of such courts in
any such litigation, action or proceeding. For all purposes of this Agreement,
XxXxxxxxx and UCI hereby further agree that service of process upon XxXxxxxxx
and UCI may be affected pursuant to United States mail.
12. Usage. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Terms such as "hereof", "herein",
and words of similar import shall refer to this Agreement in its entirety and
all references shall refer to specified portions of this Agreement, unless the
contest clearly requires otherwise.
13. Severability. The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any one or more of the
provisions of this Agreement shall not affect validity and enforceability of the
other provisions.
-77-
14. Notice. Any notice, request, approval, consent, demand or other
communication hereunder shall be effective if in writing and upon the first to
occur of the following: (i) upon receipt by the party to whom such notice,
request, approval, consent, demand or other communications being given; or (ii)
three (3) business days after being duly deposited in the U. S. Mail,
certified, return receipt requested, and addressed as follows:
XxXxxxxxx X. X. XxXxxxxxx, III, M. D.
0000 Xx. Xxxxxxx Xxxx
Xxxxxxxx, S. C. 29212
UCI: UCI Medical Affiliates of South Carolina, Inc.
0000 Xx. Xxxxxxx Xxxx
Xxxxxxxx, S. C. 29212
Attn: Xxxxxxx Xxxxxxx, Esquire
The parties hereto may change their respective addresses by notice in writing
given to the other parties of this Agreement.
15. Entire Agreement. This Agreement contains the entire agreement
and understanding by and between UCI and XxXxxxxxx with respect to the
employment of XxXxxxxxx, and no representations, promises, agreements, or
understandings, written or oral not contained herein shall be of any force or
effect. No change or modification of this Agreement shall be valid or binding
unless it is in writing and signed by the party intended to be bound. No waiver
of any provision of this Agreement shall be valid unless it is in writing and
signed by the party against whom the waiver is sought to be enforced. No valid
waiver of any provision of this Agreement at any time shall be deemed a waiver
of any other provision of this Agreement at such time or at any other time.
IN WITNESS WHEREOF, UCI and XxXxxxxxx have duly executed this
Agreement under seal to be effective as of the day and year first above written.
IN THE PRESENCE OF: UCI:
/s/ Xxxxxxxx X. Xxxxxxx UCI MEDICAL AFFILIATES OF SOUTH
Witness CAROLINA, INC. (SEAL)
/s/ Xxxxxxxxx Xxxxxxxxx By: /s/ Xxxxxxx Xxxxxxx
Witness Its: Chief Operating Officer & Counsel
XXXXXXXXX:
/s/Xxxxxxxx X. Xxxxxxx /s/ X.X. XxXxxxxxx, III, M.D. (SEAL)
Witness X. X. XxXxxxxxx, III, M.D.
/s/ Xxxxxxxxx Xxxxxxxxx
Witness
-78-
ADDENDUM A
BONUS GRID
----------------------
REVENUE
----------------------
-----------------------------------------------------------------------------------------------------------------------------------
$40,000,000 $0 $110,000 $135,000 $160,000 $185,000 $210,000 $240,000 $270,000 $300,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$35,000,000 $0 $85,000 $110,000 $135,000 $160,000 $185,000 $210,000 $250,000 $285,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$30,000,000 $0 $0 $85,000 $110,000 $135,000 $160,000 $185,000 $230,000 $270,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$25,000,000 $0 $0 $60,000 $85,000 $110,000 $135,000 $160,000 $210,000 $255,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$20,000,000 $0 $0 $35,000 $60,000 $85,000 $110,000 $135,000 $185,000 $240,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
NET INC / (LOSS) ($500,000) $0 $250,000 $750,000 $1,250,000 $1,750,000 $2,250,000 $2,750,000 $3,250,000
-----------------------------------------------------------------------------------------------------------------------------------
-79-
