EMPLOYMENT AGREEMENT
THIS AGREEMENT, made this 11th day of March, 1998, by XXXXX MEDICAL
GROUP, P.C. ("Employer") and P. XXXXXX XXXXXX, M.D. ("Employee").
INTRODUCTORY STATEMENT
Employer is engaged in the business of providing medical services and
is affiliated with certain other medical groups (referred to herein as
"Affiliates") including, but not limited to Medi-Cen Physician Services, L.L.P.
Employee is a physician duly licensed to practice medicine in the State of
Maryland. Employer has agreed to employ Employee and Employee desires to accept
employment pursuant to the terms and conditions hereinafter set forth. The
parties hereto acknowledge and agree that it would be in the best interest of
all parties to clearly define both the responsibilities of Employee as well as
set out the compensation and other benefits which will accrue to Employee.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained the parties hereto do agree as follows:
1. Employment. Employer hereby employs, engages and hires Employee as a
physician to render medical services for Employer and Affiliates. Employee
hereby accepts and agrees to such hiring, engagement and employment subject to
the general supervision and pursuant to the orders, advice and directions of
Employer, subject to Employee's professional judgment. Employee shall perform
such duties as determined by Employer. Employer shall have the power to
determine the assignment of patients to Employee, and Employee shall perform
services for the patients assigned to him/her. Employer shall operate and
maintain facilities, and shall provide at its cost equipment, drugs and supplies
suitable to Employee's position and adequate for the performance of his/her
duties. Further, Employer shall supply and pay for nurses, technicians, and
other personnel reasonably needed by Employee in connection with his/her
employment under this Agreement.
2. Best Efforts of Employee. Employee hereby agrees that at all times
he/she will faithfully, industriously and to the best of his/her ability,
experience and talents perform all duties that may
be required of him/her pursuant to the expressed and implicit terms hereof. Such
duties shall be rendered at such place or places as Employer in good faith shall
require. Employee agrees that at no time while this Agreement is in effect will
Employee speak of, refer to, or comment on Employer's businesses in any way that
tends, either directly or indirectly, to detract from or diminish the good
reputation of Employer's businesses in the community, the successful and
effective conduct of Employer's businesses, or the good will of Employer's
businesses. Violation of any provision of this section shall be deemed a
material breach of this Agreement.
3. Term. The term of this Agreement shall be for a period of five (5)
years commencing as of January 1, 1998 and terminating on December 31, 2002,
subject, however, to prior termination as hereinafter provided. Unless
terminated by either party in accordance with the terms hereinbelow set forth,
this Agreement shall automatically and continually renew itself at expiration
for one (1) year terms upon the same terms and conditions set forth herein.
4. Hours of Employment. Employee shall work for Employer on a full time
basis. Hours of employment shall be determined by Employer within reasonable
standards of the profession.
5. Compensation of Employee.
a. Compensation. For all services rendered by Employee under this
Agreement, Employer shall pay Employee an amount equal to twenty-five
thousand Dollars ($25,000.00) per month. Such amount shall be due and
payable by Employer on the last day of each calendar month for amounts
received for the preceding calendar month; provided, however, such
compensation shall not be considered delinquent if paid within five (5)
days of the date due. All payments shall be subject to the deductions of
payroll taxes and similar assessments as required by law.
b. Fringe Benefits. Employee will be entitled to all of the ancillary
benefits available to full-time employees of Employer. In addition,
Employee shall be entitled to designate additional fringe benefits so long
as the aggregate value of all fringe benefits to which Employee is entitled
does not exceed the sum of Sixty thousand Dollars ($60,000.00).
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6. Other Employment. Employee shall devote all of his/her time,
attention, knowledge and skills solely to the business and interest of Employer
and Employer shall be entitled to all the benefits thereof arising from or
incidental to all services and advice of Employee during the hours set forth in
Section 4. Employee agrees that he/she shall not serve as a partner, officer,
director, stockholder, advisor, employee or in any other capacity in any other
business similar to Employer's business, or any similar type of business during
the term of this Agreement. The expenditure of reasonable amounts of time for
teaching, lecturing, radio and television appearances or attending meetings in
the professional field, shall not be deemed a breach of this Agreement, provided
that Employer determines that the rendering of such services does not interfere
with the services required to be rendered to Employer hereunder.
7. Recommendations for Improving Operations. Employee shall make
available to Employer all information of which Employee shall have any knowledge
and shall make all suggestions and recommendations that will give mutual benefit
to Employer and himself/herself.
8. Trade Secrets.
a. Employee expressly acknowledges and agrees that Employee will be
given access to and become familiar with business methods, trade secrets,
and other proprietary information developed at Employer's expense (the
"Trade Secrets"), which are valuable, unique, and essential to the
performance of Employee's duties hereunder, as well as being essential to
the overall continued success and business goodwill of Employer. Employee
expressly acknowledges and agrees that the Trade Secrets are proprietary
and confidential and if any of the Trade Secrets were imparted to or became
known by any persons, including Employee engaging in a business in any way
competitive with that of Employer's, such would result in hardship, loss,
irreparable injury and damage to Employer, the measurement of which would
be difficult, if not impossible, to determine. Accordingly, Employee
expressly agrees that Employer has a legitimate interest in protecting the
Trade Secrets and its business from such hardship, loss, irreparable injury
and damage, that the following covenant is a reasonable means by which to
accomplish that purpose, and that violation of any of the protective
covenants contained herein shall constitute a breach of trust and is
grounds for immediate dismissal and for
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appropriate legal action for damages, enforcement and/or injunction.
b. Employee acknowledges that the Trade Secrets give Employer an
advantage over its competitors, and that the same is not available to or
known by Employer's competitors or the general public. Employee further
acknowledges that Employer has devoted substantial time, money, and effort
in the development of the Trade Secrets and in maintaining the proprietary
and confidential nature thereof. Employee further acknowledges Employee's
position with Employer is one of the highest trust and confidence by reason
of Employee's knowledge of, access to, and contact with the Trade Secrets.
Employee agrees to use Employee's best efforts and exercise of utmost
diligence to protect and safeguard the Trade Secrets. Employee covenants
that, during the term of this Agreement regardless of which party
terminates this Agreement and whether such termination is for cause,
Employee will not disclose, disseminate or distribute to another, nor
induce any other person to disclose, disseminate or distribute, any Trade
Secrets of Employer, directly or indirectly, either for Employee's own
benefit or for the benefit of another, nor will Employee use or cause to be
used any Trade Secrets in any way except as is required in the course of
Employee's employment with Employer. Employee acknowledges and covenants
that all Trade Secrets relating to the business of Employer shall remain
the exclusive property of Employer, shall not be copied or otherwise
reproduced in whole or in part, and shall not be removed from the premises
of Employer, under any circumstances whatsoever without the prior written
consent of Employer.
9. Trade Secrets after Termination of Employment. All the terms of
Section 8 shall remain in full force and effect for a period of two (2) years
after the termination of Employee's employment.
10. Injunctive Relief. In addition to the remedies cited herein,
Employer shall be entitled to injunctive relief against Employee from the
violation of the terms of Sections 8, 9 and 13 of this Agreement.
11. Termination.
a. This Agreement shall be terminated immediately upon the occurrence
of one of the following conditions or events: (i) revocation or
cancellation of Employee's right to practice medicine
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in the State of Maryland; (ii) the placing or imposing of any restrictions
or limitations, by any governmental authority having jurisdiction over
Employee, upon him/her so that he/she cannot engage in the professional
service for which he/she was employed; (iii) in the event Employee shall
fail or refuse to faithfully or diligently perform the provisions of this
Agreement or the usual customary duties of his/her employment; (iv) in the
event Employee conducts himself/herself in an unprofessional, unethical,
immoral or fraudulent manner, or should the Employee's conduct discredit
Employer or be detrimental to the reputation, character and standing of
Employer; (iv) conviction of any crime of moral turpitude or of any crime
punishable as a felony; (v) Employee becomes ineligible for insurance
coverage against claims for professional liability; or (vi) the death or
permanent disability of Employee.
b. This Agreement may be terminated by either party on the fifth (5th)
anniversary of this Agreement or on any anniversary date thereafter, by
giving notice of termination to the other party not later than ninety (90)
days prior to such anniversary date, and this Agreement shall terminate on
such anniversary date.
c. Notwithstanding anything contained herein to the contrary, Employer
shall not be required to make any payments after the date of termination of
this Agreement.
12. Insurance. Throughout the term of this Agreement, Employer shall
maintain continuously in effect professional malpractice insurance, which shall
include Employee as a named insured in such amounts, with such carrier and on
such terms as shall be determined by Employer in its sole discretion. Employee
hereby agrees to cooperate with Employer in the application process and to
complete, within five (5) days of receipt from Employer, any and all forms
required by the insurance carrier selected by Employer. In the event Employee
leaves the employment of Employer, Employee shall either (i) purchase an
Extension of Coverage endorsement ("tail") in an amount not less than One
Million Dollars ($1,000,000.00) per occurrence and Three Million Dollars
($3,000,000.00) in the aggregate, within ten (10) days of written notice of
discontinuance, or (ii) Employee shall continue to maintain professional
liability insurance and provide Medi-Cen proof annually of such coverage;
provided, however, that when Employee retires, he/she shall purchase the tail in
such amounts as stated above.
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13. Restrictive Covenants.
a. Employer and Employee acknowledge and agree that Employee's
services are of a special and unusual character which have a unique value
to Employer, the loss of which cannot be adequately compensated by damages
in an action at law. Further, Employer and Employee acknowledge and agree
that Employee's employment entails substantial personal contacts with
patients of Employer and as a result, it is likely that such patients would
follow Employee in the event Employee ceased to be employed by Employer.
Because of the unique value to Employer of the services for which Employer
has contracted hereunder, the nature of Employee's personal contact with
patients of Employer, and because of the confidential information to be
obtained by Employee, all as aforementioned, and in consideration of
employment by Employer, Employee covenants and agrees that for a period of
three years after Employee ceases to be employed by Employer for any reason
whatsoever, Employee shall not, without the prior consent of Employer,
directly or indirectly:
(1) Offer to render any medical services or solicit the rendition
of any such services to any patients of Employer with whom Employee
had direct or indirect contact and/or to whom Employee rendered any
medical services at any time during the two (2) year period
immediately preceding such cessation of Employee's employment with
Employer to or for the benefit or account of Employee or to or for the
benefit or account of any other person or entity.
(2) Solicit for employment or employ, directly or indirectly, any
employee of Employer, nor shall Employee urge, directly or indirectly,
any patients to discontinue, in whole or in part, business with
Employer.
b. In addition to any other provisions of this Agreement, the
provisions of this Section shall also apply to Employee during the term of
this Agreement.
c. Upon termination of Employee's employment hereunder for any reason
whatsoever, Employee agrees that he/she will not, within a five (5) mile
radius of Employer's places of business, for a period of three (3) years
from and after such termination of employment, directly or indirectly,
engage or agree to engage in, whether as owner, director, employee,
consultant, agent or otherwise, the operation of a provider of medical
services or
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render medical services to or for the benefit of any other person
or entity to any extent whatsoever.
d. The provisions of Sections 13.a(1), 13.a(2), 13.b and 13.c of this
Agreement are cumulative. Compliance with Sections 13.a(1), 13.a(2), 13.b
and 13.c of this Agreement is a condition precedent to Employer's
obligation to make any payments of any nature to Employee, whether under
this Agreement or otherwise. Nothing in this Agreement shall be construed
as prohibiting Employer from pursuing any remedies available to it at law
or in equity for a breach or threatened breach of Sections 8, 9 and 13 of
this Agreement.
e. The parties hereto agree that if any court of competent
jurisdiction shall determine that the period or geographical area covered
herein, or any other term or provision of this Agreement, is unreasonable,
the said term, geographical area or provision shall not be deemed to be
null and void but shall be reformed to impose the maximum enforceable
period, geographical area, term or other provisions as the case may be.
f. Employee has carefully considered the nature and extent of the
restrictions upon him/her and the rights and remedies conferred upon
Employer under this Section 13, and hereby acknowledges and agrees that the
same are reasonable in time and territory, are designed to eliminate
competition which otherwise would be unfair to Employer, would not operate
as a bar to the Employer's sole means of support, do not stifle the
abilities of Employee, and are fully required to protect the legitimate
interests of Employer.
14. Extension of Limitation Period. The parties acknowledge that if
Employee violates any of the protective covenants hereunder and Employer brings
legal action for injunctive or other relief hereunder, Employer shall, as a
result of the time involved in obtaining the relief, be deprived of the benefit
of the full Limitation Period of these protective covenants. Accordingly, the
Limitation Period shall be deemed to have the full duration of the period stated
therein, computed from the date relief is granted, but reduced by the time
between the period when the restriction began to run at the termination of
Employee's employment hereunder and the date of the first violation of the
covenant by Employee.
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15. Patients and Records.
a. Patients. All patients with whom Employee deals and to whom
Employee provides services are, and shall be treated as, patients of
Employer. Subject to the patient's right to select his/her own physician,
these patients shall remain patients of Employer after termination of this
Agreement.
b. Records and Files. All case records, charts and personal files
concerning patients of Employer shall belong to and remain the property of
Employer. On termination of his/her employment, Employee shall not be
entitled to keep or reproduce Employer's records or charts related to any
patient unless the patient shall specifically request that his/her records
be transmitted to Employee. Employee shall bear the reasonable costs of
reproducing such records.
16. Billing and Collecting Professional Fees. Employer shall xxxx and
collect all professional fees attributed to professional medical services
rendered by Employee pursuant to this Agreement, and to the extent allowable by
law and the policies, procedures, and requirements of any third-party payor
involved, Employer shall xxxx in Employer's name. Employee shall cooperate fully
with Employer in all activities necessary to collect such fees, including
permitting Employer or any agent of Employer to xxxx, collect and deposit any
and all payments and remuneration payable to Employee for services rendered on
behalf of Employer and as agent in circumstances where Employer is unable to
xxxx in its own name. To evidence such agreement, Employee agrees to execute an
Appointment of Agent for Negotiation and Withdrawal of Funds, substantially in
the form attached hereto as Exhibit A, upon Employer's request. The power of
attorney set forth in the Appointment of Agent for Negotiation and Withdrawal of
Funds shall be limited to NationsBank, N.A., Xxxxxx Xxxxx Bank, The First
National Bank of Maryland, or such other banking institutions with which
Employer maintains a banking relationship. Employee shall remit to Employer
immediately all money received by Employee from any third party, including
without limitation patients and third party payors, for professional medical
services which are rendered by Employee pursuant to this Agreement.
17. Associate Physician Membership Agreement. Employee acknowledges
that Employer shall enter into an Associate Physician
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Membership Agreement with Medi-Cen, Corp. of Maryland and Medi-Cen, Corp.of
Virginia, both dated January 17, 1997, including exhibits and addenda thereof
(copies attached hereto and made a part hereof as Exhibit B) (the "AP
Agreements"). Employee hereby agrees to be bound by and perform his/her duties
in a manner consistent with the terms and provisions of the AP Agreements as
they may apply to Employee as an Associate Physician.
18. Agreements Outside of Agreement. Except as provided in the AP
Agreements, to which Employee has agreed to be bound, this Agreement contains
the complete agreement concerning the employment arrangement between the parties
and shall, as of the effective date hereof, supersede all other agreements
between the parties. The parties stipulate that neither of them has made any
representation with respect to the subject matter of this Agreement or any
representation including the execution and delivery hereof, except such
representations as are specifically set forth herein and each of the parties
hereto acknowledges that he/she or it has relied on their own judgment in
entering into this Agreement. The parties hereto further acknowledge that any
payments or representations that may have heretofore been made by either of them
to the other are of no effect and that neither of them has relied thereon in
connection with his/her or its dealings with the other.
19. Representations and Warranties. Employee represents and warrants
that (a) as of the date of this Agreement and at all time while this Agreement
is in effect he/she is duly licensed and certified to perform the duties of a
physician in the State of Maryland; (b) he/she has the complete and unrestricted
right to enter into this Agreement; (c) he/she has disclosed to Employer all
facts and circumstances that might adversely affect his/her ability to perform
his/her duties under this Agreement; and (d) this Agreement and the performance
by Employee of his/her obligations herein will not be in violation or breach of
any other agreement or commitment previously entered into by or binding upon the
Employee.
20. Modification of Contract. No waiver or modification of this
Agreement or of any covenant, condition, or limitation herein contained shall be
valid unless in writing and duly executed by the party to be charged therewith
and no evidence of any waiver or modification shall be offered or received in
evidence at any proceeding, arbitration or litigation between the parties hereto
arising out of or affecting this Agreement, or the rights or obligations of the
parties hereunder, unless such waiver or modification is in writing, duly
executed as aforesaid, and the
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parties further agree that the provisions of this section may not be waived
except as herein set forth.
21. Severability. All agreements and covenants contained herein are
severable, and in the event any of them, with the exception of those contained
in Sections 1 and 5 hereof, shall be held to be invalid by any competent court,
this Agreement shall be interpreted as if such invalid agreements or covenants
were not contained herein. Notwithstanding the foregoing, the parties hereto
agree that to the extent that any provision or portion of Section 13 of this
Agreement shall be held, found or deemed to be unreasonable, unlawful or
unenforceable by a court of competent jurisdiction, then any such provision or
portion thereof shall be deemed to be modified to the extent necessary in order
that any such provision or portion thereof shall be legally enforceable to the
fullest extent permitted by applicable law; and the parties hereto do further
agree that any court of competent jurisdiction shall and the parties hereto do
hereby expressly authorize, request and empower any court of competent
jurisdiction to enforce any such provision or portion thereof or to modify any
such provision or portion thereof in order that any such provision or portion
thereof shall be enforced by such court to the fullest extent permitted by
applicable law.
22. Notices. Any notices to be given hereunder by either party to the
other may be effected by personal delivery, in writing or by mail, registered or
certified, postage prepaid with return receipt requested. Mailed notices shall
be addressed to the parties at the addressees set forth below, but each party
may change its address by written notice in accordance with this Section.
Notices delivered personally shall be deemed communicated as of the actual
receipt; mailed notices shall be deemed communicated as of three (3) days after
mailing.
If to Employee:
P. Xxxxxx Xxxxxx, M.D.
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
If to Employer:
Xxxxx Medical Group, P.C.
0000 Xxxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
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23. Choice of Law. It is the intention of the parties hereto that this
Agreement and the performance hereunder and all suits and special proceedings
hereunder be construed in accordance with and under and pursuant to the laws of
the State of Maryland, and that in any action, special proceedings or other
proceedings that may be brought arising out of, in connection with, or by reason
of this Agreement, the laws of the State of Maryland shall be applicable and
shall govern to the exclusion of the law of any other forum, without regard to
the jurisdiction in which any action or special proceeding may be instituted.
24. Attorneys' Fees. In any action at law or equity to enforce any of
the provisions or rights under this Agreement, the unsuccessful party to such
litigation, as determined by the court in any final judgment or decree, shall
pay the successful party or parties all costs, expenses and reasonable
attorneys' fees incurred therein by such party or parties (including without
limitation such costs, expenses and fees on any appeal or in connection with any
bankruptcy proceedings), and if the successful party recovers judgment in any
such action or proceeding, such costs, expenses and attorneys' fees shall be
included in and as a part of such judgment.
25. Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the employment of Employee by Employer and contains all of the covenants and
agreements between the parties with respect to such employment. Each party to
this Agreement acknowledges that no representations, inducements or agreements,
oral or otherwise, have been made by any party, or anyone acting on behalf of
any party, which are not embodied herein, and no other agreement, statement or
promise not contained in this agreement shall be valid or binding. Any
modification of this Agreement will be effected only if it is in writing signed
by the party to be charged.
26. Change in Law. In the event any legislative, judicial or regulatory
change or determination of any government body, department, or agency of the
Federal government or the State of Maryland or the District of Columbia has or
would have a material adverse impact on any provisions of this Agreement, the
Employer and the Employee agree to negotiate a restructuring of the Agreement to
bring it in compliance with the law.
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IN WITNESS WHEREOF, the parties hereto have set their hands and seals
the date first above written.
WITNESS: EMPLOYER:
XXXXX MEDICAL GROUP, P.C.,
/s/ Xxxxx X. Clever By:/s/ Xxxxx X. Xxxxxx, MD (SEAL)
------------------------- ----------------------------
Name: Xxxxx X. Xxxxxx, MD
--------------------------
Title:Vice President and Secretary
-------------------------
WITNESS: EMPLOYEE:
/s/ Xxxxxxxx Xxxx /s/ P. Xxxxxx Xxxxxx, M.D.(SEAL)
------------------------- -------------------------
P. Xxxxxx Xxxxxx, M.D.
