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Exhibit 10.3
EMPLOYMENT AGREEMENT
AGREEMENT made this 11th day of February, 1996 between COAST DENTAL
SERVICES, INC., a Delaware corporation with its principal place of business at
00000 X.X. Xxxxxxx 00, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000 (the "Company"), and
XXXXXX X. XXXXX residing at 00000 Xxxxxxx Xxxxx, Xxxxx, Xxxxxxx 00000 (the
"Employee").
WHEREAS, the Employee possesses skills and expertise which make him
valuable to the Company and which will contribute to the Company's future
success; and
WHEREAS, the Company desires to employ the Employee and the Employee
desires to serve in the employ of the Company upon the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency whereof is hereby acknowledged, the parties hereby agree as follows:
1. Employment, Acceptance and Term
1.1 Subject to the terms and conditions of this Agreement, the
Company hereby agrees to employ the Employee, and the Employee hereby agrees to
serve the Company, as its Chief Financial Officer for the term set forth in
Section 1.2 below.
1.2 The term of this Agreement shall be for a three (3) year
period commencing as of February 12, 1996 and ending on February 12, 1999. This
Agreement may be renewable by mutual agreement of the Company and the Employee
for subsequent terms of one (1) year by giving the Employee notice of such
renewal at least one hundred twenty (120) days prior to the end of any term
hereof. Notwithstanding the above, Employee agrees to be employed hereunder for
at least two (2) years after any public offering of the Company which occurs
during the initial term of this Agreement. Should Employee terminate this
Agreement without cause during such two (2) year period after any public
offering, the parties agree Employee shall pay liquidated damages of Two Hundred
Thousand Dollars ($200,000.00) for each complete year or portion of a year which
he does not work (maximum of 2 years) to the Company which the parties agree is
a reasonable amount to pay for such breach.
2. Duties and Authority
During the term of this Agreement, the Employee shall devote his full
time and energies to the business and affairs of the Company. The Employee shall
not accept any other employment during the term of this Agreement, nor shall he
permit such personal business interests as he may have to interfere with the
performance of his duties hereunder. The Employee agrees to use his best
efforts, skill and abilities to promote the Company's interests
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and to faithfully and diligently perform, to the best of his abilities, such
duties (consistent with his title as set forth in Section 1 hereof) as may from
time to time be assigned to him by the Company's Board of Directors and
President. All such services shall be rendered for and in consideration of the
compensation payable to the Employee under Section 3 hereof.
3. Compensation
3.1 Salary. During the term of this Agreement the Company
shall pay to the Employee, in equal semi-monthly installments, an annual salary
at a rate which shall equal One Hundred Twenty-Five Thousand Dollars
($125,000.00) during the first six months of employment hereunder and One
Hundred Fifty Thousand Dollars ($150,000.00) during the second six months of
employment hereunder. In the second and third year of the agreement, the annual
salary shall be One Hundred Sixty-Five Thousand Dollars ($165,000.00) and One
Hundred Eighty Thousand Dollars ($180,000.00) respectively. Notwithstanding the
above, in the event of a public offering by the Company, Employee's salary shall
be adjusted upward to such amount that is commensurate with that salary of a CFO
with a similarly sized public company.
3.2 Restricted Stock. Upon completion of a three month
probationary period which shall expire on May 13, 1996, the Company shall grant
to the Employee 121,954 shares of the Company's common stock, no par value per
share. Such shares shall be subject to restrictions and forfeitability on
transfer and other conditions as set forth in the Restricted Shares Agreement to
be entered into between the Company and the Employee, a form of which is
attached hereto and incorporated herein by reference. Should there be a
reorganization, stock split or other similar adjustments to the Company stock,
the amount of options shall be adjusted accordingly. This shall not however, be
considered protection against dilution in the event of issuances of stock by the
Company.
4. Expenses
4.1 The Company shall pay or reimburse the Employee for all
reasonable and necessary expenses incurred by the Employee and authorized by the
Company during the term of this Agreement in connection with the business of the
Company; provided, however, the Employee shall render to the Company a complete
and accurate accounting of all such expenses in accordance with the
substantiation requirements of Section 274 of the internal Revenue Code of 1986,
as amended.
4.2 Beginning with the second year of employment hereunder,
the Company shall reimburse the Employee for documented expenses incurred by the
Employee in maintaining his CPA certification and for membership in professional
associations in an amount not to exceed Five Hundred Dollars ($500.00).
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5. Additional Benefits
During the term of this Agreement the Employee shall be allowed to
participate (subject to uniformly applicable requirements for participation) at
the Company's expense in any health, medical, disability, insurance or pension
plan made available by the Company for the benefit of its employees generally,
and shall be entitled to an annual vacation of two (2) weeks for the first year
hereof and three (3) weeks thereafter with full pay and allowances, to be taken
at such time or times as shall be mutually agreed between the Company and the
Employee.
6. Discharge for Cause
The Company shall have the right to terminate this Agreement and to
discharge the Employee at any time for "cause". As used herein, termination for
"cause" shall mean termination by action of the Company's Board of Directors
based upon conduct by the Employee which involves any of the following:
(i) conviction of a felony or other crime involving
moral turpitude;
(ii) the continued and habitual use of narcotics or
alcohol to an extent which materially impairs the Employee's performance of his
duties hereunder;
(iii) misappropriation by the Employee of funds or
property of the Company or any affiliate of the Company;
(iv) the knowing and continued violation of a
material term of this Agreement; or
(v) any other gross misconduct in the performance of,
or material failure or refusal of the Employee to perform, his duties in
accordance with this Agreement and the reasonable expectations and standards of
the Company.
7. Termination of Agreement
Notwithstanding the provisions of Section 1 hereof, this Agreement
shall terminate upon the happening of any one of the following events and the
Company shall have no obligations to the Employee hereunder for any period after
the effective date of such termination:
(i) automatically and without notice, if the Employee
shall die during the term hereof;
(ii) by resolution of the Company's Board of
Directors and upon not less than sixty (60) days' prior written notice to the
Employee if the Employee shall become "disabled" as defined in any group
disability policy maintained by the Company for the benefit
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of its employees; provided that in the event of such termination, the Employee
shall be entitled to receive all compensation and benefits payable to him
pursuant to this Agreement until the date set forth in such notice;
(iii) automatically and without notice if the
Employee voluntarily terminates his employment with the Company without the
Company's consent;
(iv) upon termination of the Employee's employment
with the Company by mutual agreement between the Company and the Employee; or
(v) upon written notice to the Employee of action
taken by the Board of Directors of the Company to discharge the Employee for
"cause" pursuant to Section 6 of this Agreement, which notice shall specify the
reason for such discharge; provided, however, that if the Board notifies the
Employee of action taken to discharge the Employee for any of the reasons set
forth in either subsection (iv) or (v) of Section 6, the Employee shall have 30
days from receipt of such written notice to cure the specified deficiencies. If
the Board, in its sole discretion, is not satisfied that such deficiencies have
been cured, it shall so notify the Employee and the Employee shall be terminated
effective on the date of such notification.
8. Non-Competition
8.1 The Employee agrees that during his employment and for an
additional period following the termination of such employment equal to the
greater of one (1) year or one (1) year for each year of employment hereunder,
the Employee shall not, in any manner, directly or indirectly, as an officer,
director, stockholder, partner, associate, employee, consultant, owner, agent,
creditor, coventurer or otherwise, be or become interested in or be associated
with any other corporation, firm, business or person engaged within the United
States in the dental management business. The Employee's ownership, directly or
indirectly, of not more than three percent (3%) of the issued and outstanding
voting stock of any corporation engaged in the dental management business the
shares of which are regularly traded on a national securities exchange or on the
over-the-counter markets shall not be deemed to be a violation of the provisions
of this Section 8.
8.2 The Employee acknowledges that his skills and position are
unique and, therefore, that the breach by him of the provisions of Section 8.1
shall cause irreparable harm to the Company, which harm cannot be fully
redressed by the payment of damages to the Company. The Employee also
acknowledges that the dental management business may be carried on anywhere in
the United States and, therefore, that the duration and geographical scope of
Section 8.1 are reasonable under the circumstances. Accordingly, the Company
shall be entitled, in addition to any other right or remedy it may have, at law
or in equity, to an injunction, without the posting of any bond or other
security, enjoining or restraining the Employee from any violation or threatened
violation of Section 8.1, and the Employee hereby consents to the issuance of
such injunction. If any of the rights or restrictions contained or
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provided for herein shall be deemed by a court of competent jurisdiction to be
unenforceable by reason of the extent, duration or geographical scope thereof or
any other provision of this Agreement, the parties hereto contemplate that the
court shall reduce such extent, duration, geographical scope or other provision
and enforce this Section 8 in its reduced form for all purposes in the manner
contemplated hereby. This Section 8 shall survive the termination of this
Agreement and of the Employee's employment hereunder.
9. Confidential Information; Non-Solicitation
9.1 The Employee agrees that he shall not at any time (whether
during the period of his employment with the Company or at any time thereafter)
use outside the scope of his employment hereunder or disclose to any person,
corporation, firm, partnership or other entity whatsoever, or to any officer,
director, stockholder, partner, associate, employee, agent or representative of
any thereof, any business plans, business methods, customer lists, or any other
confidential information or trade secrets of or relating to the Company or its
business (collectively, "Confidential Information"). The Employee acknowledges
that all Confidential Information is the exclusive property of the Company and
the Employee agrees to maintain the Confidential Information in strictest
confidence and use the Confidential Information solely in the performance of his
duties under this Agreement.
9.2 The Employee agrees that during the term of his employment
hereunder and for a period of one (1) year following the termination of such
employment, he shall not solicit, engage, hire, or employ any then present
employee of the Company or enter into any arrangement with any then present
employee of the Company for the purposes of terminating such employee's
employment with the Company.
9.3 The Company shall be entitled, in addition to any other
right and remedy it may have, at law or in equity, to an injunction, without the
posting of any bond or other security, enjoining or restraining the Employee
from any violation of Section 9.1 or 9.2 hereof, and the Employee hereby
consents to the issuance of such injunction. If any of the restrictions
contained herein shall be deemed by a court of competent jurisdiction to be
unenforceable by reason of the extent, duration or geographical scope thereof or
any other provision of this Agreement, the parties hereto contemplate that the
court shall reduce such extent, duration, geographical scope or other provision
and enforce this Section 9 in its reduced form for all purposes in the manner
contemplated hereby. This Section 9 shall survive the termination of this
Agreement and the Employee's employment hereunder.
10. Notices
All notices hereunder and other communications required or permitted to
be given to either party hereto shall be in writing and delivered by hand or
sent by overnight or by certified mail, return receipt requested, postage
prepaid, addressed to such party at its address referred to above, or at such
other address as such party may from time to time designate by written
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notice to the other party hereto, given in accordance with the provisions of
this Section 10. Any such notice or other communication shall be deemed to have
been given on the date delivered by hand or the date actually received.
11. Waivers
No waiver by either party hereto of any breach of any provision of this
Agreement shall be deemed to constitute a waiver of any other breach of such
provision or a waiver of any breach of any other provision of this Agreement.
12. Agreement Compete; Amendments
There are no oral agreements or understandings with respect to or
affecting this Agreement and this Agreement may not be amended, supplemented,
cancelled or discharged except by a written instrument executed by the party to
be charged.
13. Non-Assignability
The respective rights and obligations hereunder of the parties hereto
are personal to such parties and shall not be transferred or assigned by them,
in whole or in part, to any other person, firm or corporation; provided that the
Company may assign this Agreement and the benefits hereunder without the consent
of the Employee, without being relieved from any liability hereunder, to any of
its direct or indirect "affiliates" or "associates" (as such terms are defined
in Rule 405 of the Rules and Regulations promulgated under the Securities Act of
1933).
14. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of Florida applicable to agreements made and to be
performed entirely within such State.
15. Captions
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All captions and headings herein contained are inserted for convenience
of reference only and shall not affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
"COMPANY"
COAST DENTAL SERVICES, INC.
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, President
"EMPLOYEE"
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
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