EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of _____ __, 20__, by
and between SafeGuard Health Enterprises, Inc., a Delaware Corporation
("Corporation") and _____________ ("Employee").
The Corporation desires to have the benefits of Employee's knowledge and
experience as a full time employee and considers such employment a vital element
to protecting and enhancing the best interests of the Corporation, and Employee
desires to be employed full time by the Corporation. The Corporation and
Employee desire to enter into an agreement reflecting the terms under which the
Corporation will employ Employee as a Vice President of the Corporation.
Therefore, the Corporation and Employee agree to the following terms and
conditions:
1. EMPLOYMENT SERVICES AND DUTIES. The Corporation agrees to employ and
retain the services of Employee and Employee hereby agrees to continue
employment with the Corporation under the terms of this Agreement. Employee
agrees to faithfully perform his duties associated with the officer position set
forth above, to the best of his ability and in the best interests of the
Corporation.
2. TERM OF EMPLOYMENT. The term of this Agreement shall commence on the
date of the execution of this Agreement and shall continue until the earlier of
June 30, 2002, the date of Employee's death, or the date of termination pursuant
to Sections 6 or 7 of this Agreement.
3. COMPENSATION TERMS. The Corporation agrees to compensate Employee for
his services rendered under this Agreement as follows:
3.1 Base Salary. Effective _____ __, 20__, and for the remainder of
------------
the term of employment, Employee shall receive a base salary of $___,___ per
year unless otherwise increased by approval of the Corporation's Compensation
and Stock Option Committee (the "Committee").
3.2 Bonuses. Employee shall be entitled to participate in an annual
-------
bonus plan approved by the Committee.
3.3 Benefits. Subject to satisfaction of all eligibility requirements,
--------
Employee and his dependents shall be entitled to and shall receive any and all
benefits generally available to executive employees of the Corporation,
including participation in health, dental, vision and life insurance programs
and retirement plans.
3.4 Indemnification. The Corporation shall indemnify Employee in
---------------
accordance with the terms and conditions of its then current indemnification
policies applicable to directors and/or officers of the Corporation.
4. EXPENSES. The Corporation authorizes Employee to incur reasonable and
necessary expenses for promoting the business of the Corporation and its
subsidiaries according to the policies of the Corporation with respect thereto.
5. VACATION. Employee shall be entitled to four weeks of paid vacation
during any fiscal year. Such vacation shall be taken at such times as are
mutually agreed upon by Employee and the Chief Executive Officer. It is agreed
by the parties hereto that there shall be no carry-over of unused vacation in
excess of two (2) weeks from any calendar year to the next calendar year while
this Agreement is in effect.
Exhibit 10.6
-1-
6. TERMINATION BY CORPORATION.
6.1 The Corporation may terminate Employee at any time without cause.
6.2 The Corporation may terminate Employee for "Cause" which shall
mean:
6.2.1 The failure of Employee to render services to the
Corporation in accordance with his employment duties, as determined by a
majority of the independent directors of the Corporation's Board of Directors;
or
6.2.2 The commission by Employee of an act of fraud or
embezzlement or an act in violation of his duties to the Corporation; or
6.2.3 The death or "permanent disability" of Employee. Permanent
disability shall occur if, during the term of this Agreement, Employee becomes
physically or mentally disabled such that he is substantially unable to perform
his duties hereunder and such disability continues for three (3) continuous
months.
6.3 Notice of Termination. Any termination of Employee by the
-----------------------
Corporation shall be communicated by a written Notice of Termination to
Employee. For purposes of this Agreement, a Notice of Termination shall specify
the termination provision of this Agreement relied upon to effect such
termination and shall set forth in reasonable detail the specific facts and
circumstances claimed to provide a basis for termination of Employee as well as
the date of termination.
7. TERMINATION BY EMPLOYEE.
7.1 Termination.
-----------
7.1.1 At any time, upon thirty (30) days advance written Notice of
Termination delivered to the Chief Executive Officer of the Corporation,
Employee may voluntarily terminate his employment with the Corporation.
7.1.2 Upon thirty (30) days advance written Notice of Termination
delivered to the Chief Executive Officer of the Corporation, Employee may
terminate his employment at any time hereunder for "Good Reason" as is herein
defined.
7.2 Good Reason means:
------------
7.2.1 The substantial diminution of Employee's authority or job
responsibilities with the Corporation within one (1) year of a Change in Control
as defined in Paragraph 7.3; or
7.2.2 A failure by the Corporation to comply with any material
provision of this Agreement that has not been cured within thirty (30) days
after written notice of such noncompliance has been given by Employee to the
Corporation.
Exhibit 10.6
-2-
7.3 "Change in Control" occurs if:
-------------------
7.3.1 Substantially all the assets of the Corporation are sold to,
or the Corporation is merged with, any "person," as that term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, or (ii) any
person or group becomes or is discovered to be a beneficial owner, as defined in
Rule 13d-3 under the Exchange Act as in effect on the date hereof, directly of
securities of the Corporation representing fifty percent (50%) or more of the
combined voting power of Corporation's then outstanding securities, unless such
person or group owns at least fifty percent (50%) of such voting power on the
effective date of this Agreement, excepting therefrom any transaction as
contemplated by this Paragraph 7.3.1 which involves CAI Partners and Company II,
L.P., CAI Capital Partners and Company II, L.P., and Xxxx X. Xxxxxxxx or any
combination of such entities or person.
7.3.2 The transaction as set forth in that certain Term Sheet
Agreement dated as of March 1, 2000, between the Corporation, various investors
and lenders, is specifically excluded from the definition of Change in Control,
above.
8. PAYMENT UPON TERMINATION.
8.1 Date. The "Termination Date" shall be the effective date specified
----
in the Notice of Termination as provided for in Paragraphs 6.3, 7.1.1 and 7.1.2.
8.2 Termination by Corporation. In the event the Corporation
----------------------------
terminates Employee pursuant to Paragraphs 6.2.1 or 6.2.2, the Corporation shall
pay to Employee his full salary through the Termination Date after which the
Corporation shall have no further obligation in any form whatsoever to Employee
under this Agreement.
8.3 Permanent Disability. In the event the Corporation terminates
---------------------
Employee due to permanent disability pursuant to Paragraph 6.2.3, the
Corporation shall pay to Employee his full salary through the Termination Date
and fifty percent (50%) of Employee's annual salary then in effect, in equal
amounts on regular payroll dates over a period of nine (9) months following
termination. Such payments shall begin at the Corporation's next regular
payroll date following the Termination Date.
8.4 Termination by Corporation or Termination by Employee for Good
-------------------------------------------------------------------
Reason. If the Corporation terminates Employee's employment under Section 6.1,
or if Employee terminates his employment for Good Reason under Sections 7.2.1 or
7.2.2, then;
8.4.1 The Corporation shall pay Employee his full salary at the
rate then in effect at the time of Notice of Termination and the prorata portion
of his bonus through the Termination Date; and
8.4.2 In lieu of any further compensation payments to Employee for
periods subsequent to the Termination Date, the Corporation shall pay as
severance pay to Employee an amount equal to one (1) times Employee's annual
compensation rate then in effect, or the amount due under the remaining term of
this Agreement, whichever is less, but in no event shall such amount be less
than an amount equal to six (6) months of Employee's compensation rate then in
effect. Such payments shall be made in substantially equal semimonthly
installments on the fifteenth and last days of each month commencing with the
month in which the Termination Date occurs and continuing for such period, as is
applicable.
Exhibit 10.6
-3-
8.5 No Duty to Mitigate. Employee shall not be required to mitigate
-----------------------
the amount of any payment provided for in this Agreement by seeking other
employment or otherwise.
9. CONFIDENTIAL INFORMATION. Employee agrees that he shall not, during the
term of this Agreement, and for a period of three (3) years following its
termination, absent the Corporation's written consent, disclose to any person,
or otherwise use or exploit any non-public proprietary or confidential
information of material significance to the Corporation and/or its affiliates,
including without limitation trade secrets, customer lists, records of research,
memoranda, proposals, reports, methods, processes, techniques, non-public
financial information, contracts, negotiations, business plans and strategies,
marketing data or other non-public information regarding the Corporation and/or
any of its affiliates, their business, properties or affairs ("Confidential
Information") obtained by him at any time prior to or subsequent to the
execution of this Agreement, except to the extent required by his performance of
his assigned duties for the Corporation, including its affiliates. Upon
termination of employment, Employee shall surrender all Confidential Information
and all other property belonging to the Corporation and its subsidiaries, it
being understood by Employee that such documents are the sole property of the
Corporation and that Employee shall not make any copies thereof. Additionally,
the terms and conditions of this Agreement shall constitute Confidential
Information and shall not be disclosed by Employee except in accordance with
this Section 9.
10. NON-COMPETITION AND CONFLICTS OF INTEREST. During the term of this
Agreement and for one (1) year after termination of this Agreement, Employee
shall not work for, be a consultant to or provide any direct or indirect
services to, nor make or cause to be made on his behalf, or maintain an
investment in any business which is engaged, either in whole or in part, in any
business which is competitive with or detrimental to any businesses of the
Corporation, or its subsidiaries, except that Employee may make or maintain an
investment of no more than one percent (1%) of any outstanding class of capital
stock of any publicly traded Corporation, provided such class of capital stock
is regularly traded by the public, without prior written permission of the
Corporation.
11. SEVERABILITY. The provisions of this Agreement are severable. If a
court of competent jurisdiction determines that any one or more provisions of
this Agreement is invalid, void, or unenforceable, in whole or in part, it will
be severed therefrom. The remaining provisions of this Agreement shall then
continue in full force without being impaired or invalidated in any way.
12. ASSIGNMENT; BINDING EFFECT.
12.1 Assignability. This Agreement may be assigned by the Corporation
-------------
to any successor to all or substantially all of the business and/or assets of
the Corporation.
12.2 Corporation's Obligation Upon Assignment or Succession. The
-----------------------------------------------------------
Corporation shall require any successor, whether direct or indirect, by
purchase, merger, consolidation or otherwise, to all or substantially all of the
business and/or assets of the Corporation or assignee of this Agreement, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Corporation would be required to perform it if no such
succession had taken place.
Exhibit 10.6
-4-
13. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding on the parties and their respective successors and assigns. If
Employee should die while any amounts would still be payable to him hereunder if
he had continued to live, all such amounts, unless otherwise provided for
herein, shall be paid in accordance with the terms of this Agreement to
Employee's devisee, legatee, or other designee or, if there be no such designee,
to Employee's estate.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding
between the parties concerning the subject matter hereof. This Agreement
supersedes all negotiations, prior discussions, and preliminary agreements.
This Agreement may not be amended except in a writing executed by the Employee
and the Corporation.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, regardless of the
application of conflicts of laws principles.
16. NOTICES. All notices, requests, demands and other communication
required or contemplated under this Agreement, shall be in writing and shall be
deemed to have been duly given when delivered personally or when enclosed in a
properly sealed and addressed envelope, registered or certified, return receipt
requested, and deposited, postage prepaid, in the United States mail.
Any notice given to the Corporation under the terms of this Agreement, shall be
addressed to the Corporation as follows:
SafeGuard Health Enterprises, Inc.
00 Xxxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: President and Chief Executive Officer
Any notice to be given to Employee shall be addressed to the Employee's home
address last shown on the Corporation's records, or at such other address as
either party may hereafter designate in writing to the other.
17. WAIVER. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall
be binding unless executed in writing by the party making the waiver.
18. CONSTRUCTION. Whenever herein the singular number is used, the same
shall include the plural, and the masculine gender shall include the feminine
and neuter genders. The captions, section numbers, article numbers, and index
appearing in this Agreement are inserted only as a matter of convenience and in
no way define, limit, construe, or describe the scope or intent of such sections
or articles of this Agreement nor in any way affect this Agreement.
Exhibit 10.6
-5-
19. ARBITRATION. Any dispute regarding any aspect of this Agreement or any
act that allegedly has or would violate any provision of this Agreement must be
submitted to arbitration in Orange County, California, in accordance with the
rules of the Judicial Arbitration and Mediations Service ("JAMS") as the
exclusive remedy for such claim or dispute. Either party may invoke this clause
by serving on the other, in writing, a request to arbitrate. Within thirty (30)
days thereafter, either party may institute proceedings in superior court to
enforce this clause by way of reference pursuant to Section 638 of the
California Code of Civil Procedure. If the parties cannot mutually select a
judge from the JAMS panel, the superior court shall make the selection. The
decision of JAMS will be final and binding. The prevailing party in any such
arbitration shall be entitled to reimbursement by the losing party for all costs
and expenses incurred thereby, including but not limited to reasonable
attorneys' fees.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of this
____ day of ___________, 20___.
EMPLOYEE SAFEGUARD HEALTH ENTERPRISES, INC.
___________________________________ By:___________________________________
Name Title:________________________________
____________________________________ By:___________________________________
Address Title:________________________________
____________________________________
City, State, Zip
____________________________________
Employee's Social Security Number
Exhibit 10.6
-6-
