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Exhibit 10.11
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement is made as of the 7th day of November, 1996, between FIRST
NEW ENGLAND DENTAL CENTERS, INC., a Delaware corporation (the "Company"), and
Xxxxxx Xxxxxxx of Danvers, Massachusetts (the "Executive").
WHEREAS, the Company desires to employ Executive for the period and upon
and subject to the terms herein provided; and
WHEREAS, Executive is willing to agree to be employed by the Company upon
and subject to the terms herein provided;
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements hereinafter set forth and for other good and valuable consideration,
the receipt, adequacy and sufficiency of which are hereby acknowledged, the
parties hereto covenant and agree as follows:
[Section]1. TERM OF EMPLOYMENT. The Company agrees to employ Executive
as its President from November 7, 1996 through November 6, 1998 (the
"Termination Date"), or until the earlier termination of this Agreement
pursuant to the terms hereof. This Agreement, and the Termination Date, will be
renewed automatically for successive one-year terms, unless the Company or the
Executive gives written notice to the other of its or his election not to
renew, at least three months prior to the end of the then-current term.
[Section]2. COMPENSATION. The Company will pay Executive base pay for his
services rendered hereunder at an annual rate of $130,000, subject to upward
adjustment based on reviews by the Company's Chairman and Chief Executive
Officer (the "CEO") to occur not less frequently than annually. Executive's
salary shall be paid in accordance with the Company's regular payroll practices
for all senior executives as determined by the Company, subject only to such
payroll and withholding deductions as are required by law and such other payroll
deductions as are determined by the Company policy or as Executive may approve.
[Section]3. BONUS. The Company's Board of Directors (the "Board") shall
establish an annual budget each year, setting forth projected expenses, revenues
and net profits. In the event that the Company achieves at least 90% of its
projected net profit for any fiscal year during the term of this Agreement,
commencing with the fiscal year ending December 31, 1997, the Company shall pay
to Executive a bonus in an amount determined as follows:
% of Projected Net Profit Bonus (% of Base Annual Salary)
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90 - 91% 2.5%
91 - 92% 5.0%
92 - 93% 7.5%
93 - 94% 10.0%
94 - 95% 12.5%
95 - 96% 15.0%
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96 - 97% 17.5%
97 - 98% 20.0%
98 - 99% 22.5%
99% + 25.0%
In the event that the Company exceeds 100% of its projected net profit in such
year, the Company may pay Executive an additional discretionary performance
bonus, at such times and in such amounts as the Company, in its sole discretion,
may determine.
[Section]4. OFFICE AND DUTIES. During the term of this Agreement, the
Company shall employ Executive to serve as the Company's President. The
Executive shall perform such executive, administrative and acquisition duties as
may be assigned to the Executive from time to time by the CEO. Executive agrees
to serve the Company faithfully and to the best of Executive's ability and to
devote all of Executive's business time, attention and efforts to the interests
and business of the Company. Executive agrees at all times to perform all his
duties in accordance with applicable laws, rules and regulations and the
policies and procedures of the Company applicable to senior executives in effect
from time to time.
[Section]5. EXPENSES. Executive shall be entitled to reimbursement for
reasonable and necessary business expenses incurred, consistent with Company
policy, in connection with the performance of his duties hereunder upon receipt
of vouchers therefor in accordance with such procedures as the Company has
heretofore or may hereafter establish.
[Section]6. VACATION DURING EMPLOYMENT. Executive shall be entitled to 20
days' paid vacation during each year of his employment hereunder.
[Section]7. ADDITIONAL BENEFITS. Executive shall be entitled to all paid
holiday, medical and other fringe benefit plans that the Company may now or
hereafter in its discretion make available generally to its senior management.
[Section]8. TERMINATION OF EMPLOYMENT. Notwithstanding any other provision
of this Agreement, Executive's employment shall terminate on the death of the
Executive and may be terminated by the CEO or the Board, as follows:
(a) either (i) the Executive is determined to be "permanently
disabled" as defined under the disability insurance policy covering the
Executive, or (ii) if Executive is not covered by any such disability
policy, the Executive is determined to be "totally disabled" by vote of a
majority of the Board based upon the advice of a board-certified physician
reasonably satisfactory to Executive and the Company, which may include a
determination that the Executive is unable, because of physical or mental
illness or incapacity or otherwise, to fulfill his duties under this
Agreement for 180 consecutive days or appears unable to perform such duties
for an indefinite period of time in excess of 180 days;
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(b) termination of Executive by the Company for "Cause" (as
hereinafter defined), provided, however, a termination for Cause shall not
take effect unless the following has occurred:
(i) The CEO or the Board has given Executive written notice of
its intention to terminate Executive for Cause, specifying with
particularity the grounds on which the proposed termination for Cause
is contemplated, which shall be acts or failures to act on the part of
Executive that occurred no more than six months prior to the CEO's or
the Board's having knowledge of such acts or failures to act;
(ii) the Executive shall have 30 days after such written notice
to cure such conduct;
(iii) if Executive fails to cure such conduct within such 30-day
period, the Executive's employment shall be terminated.
"Cause" shall mean (x) the willful and continued failure by the Executive
to substantially perform his duties with the Company in accordance with this
Agreement, or (y) the Executive's conviction of fraud, embezzlement, theft or
other criminal conduct involving a felony.
[Section]9. TERMINATION WITHOUT CAUSE. In the event that, during the term
of this Agreement, Executive's employment hereunder is terminated by the Company
other than pursuant to [Section]8 hereof, the Company shall pay Executive an
amount equal to one year's base annual salary, and insurance benefits, at the
rate in effect immediately prior to his termination, payable in 12 equal monthly
installments, commencing 30 days from the effective date of termination.
Notwithstanding the foregoing, in the event that such termination of employment
occurs within three months following a Change of Control (as hereinafter
defined), the Company shall pay to Executive an amount equal to the base annual
salary that would have been payable hereunder had such termination not occurred
for the period from the date of termination of employment through the later to
occur of the Termination Date and the first anniversary of the effective date of
termination, payable in equal monthly installments commencing 30 days from the
effective date of termination through the Termination Date or, if later, the
first anniversary of the effective date of termination.
"Change of Control" shall mean, prior to the consummation of an initial public
offering of the Company's common stock, the occurrence of any one of the
following events:
(a) any "person" which is not the "beneficial owner" of more than 35%
of the voting securities of the Company on a fully diluted basis on the
date hereof or an "affiliate" of such party on the date hereof becomes a
"beneficial owner" of more than 35% of the voting securities of the Company
(as such terms are defined in Section 13(d) of the Securities Exchange Act
of 1934 and the regulations promulgated thereunder);
(b) the Board approves a plan to sell or dispose of by merger,
consolidation or other transaction all or substantially all of the
Company's operating assets (on a consolidated basis) or approves a plan of
liquidation; or
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(c) the Company combines with another company and is the surviving
corporation but immediately after the combination, the persons who were the
stockholders of the Company immediately prior to the combination own 50% or
less of the voting securities of the combined entity.
"Change of Control" shall mean, after the consummation of an initial public
offering of the Company's common stock, the occurrence of any one of the
following events:
(a) any "person" which is not the "beneficial owner" of more than 20%
of the voting securities of the Company on a fully diluted basis
immediately after the consummation of such public offering or an
"affiliate" of such party on such date hereof becomes a "beneficial owner"
of more than 20% of the voting securities of the Company (as such terms are
defined in Section 13(d) of the Securities Exchange Act of 1934 and the
regulations promulgated thereunder);
(b) the majority of the Board consists of individuals other than
members of the Board of Directors immediately after the consummation of
such public offering or persons whose nomination or election was approved
by at least two-thirds of the members of the Board immediately preceding
the election of such individuals;
(c) the Board approves a plan to sell or dispose of by merger,
consolidation or other transaction all or substantially all of the
Company's operating assets (on a consolidated basis) or approves a plan of
liquidation; or
(d) the Company combines with another company and is the surviving
corporation but immediately after the combination, the persons who were the
stockholders of the Company immediately prior to the combination own 50% or
less of the voting securities of the combined entity.
[Section]10. CONFIDENTIALITY. Executive shall not, either during the period
of his employment with the Company or thereafter, reveal or disclose to any
person outside the Company or use to his own benefit, any proprietary and
confidential marketing technique or cost method, or any patient list of the
Company or any proprietary and confidential mailing or supplier list, whether or
not made, developed and/or conceived by Executive or by others in the employ of
the Company. Upon the termination of Executive's employment in any manner or for
any reason, Executive shall promptly surrender to the Company all copies of any
of the foregoing, together with any other documents, materials, data,
information and equipment belonging to or relating to the Company's business and
in his possession, custody or control, and Executive shall not thereafter retain
or deliver to any other person, any of the foregoing or any summary or
memorandum thereof.
[Section]11. RESTRICTION. Executive agrees that for 12 months from the
termination of employment at the Termination Date, for cause by the Company, or
voluntarily by Executive:
The Executive will not, directly or indirectly, own, manage, operate,
control, be employed by, participate in, or be connected in any manner with the
ownership, management,
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operation or control of, any business or enterprise (a "Restricted Business")
that is in the business of operating dental clinics (or any aspect thereof)
within a 10-mile radius of any dental clinic operated by the Company at the time
of termination of Executive's employment. The restrictions contained in this
paragraph will not prevent the Executive, during the 12-month period following
the termination of his employment hereunder, from being employed by, acting as a
consultant to, or serving on the Board of Directors of, any entity with a large
national or regional business that directly or indirectly engages in the
Restricted Business in the territories restricted hereunder or from owning up to
a 1% equity interest in such an entity, but only if such entity is publicly
traded; provided that the Executive does not actively engage in the management
of that portion of such entity's business which is located in the restricted
territory.
[Section]12. NO SOLICITATION. Executive will not, for a period of 12 months
after termination of employment for any reason solicit or attempt to induce,
directly or indirectly, any employee of the Company to accept employment with a
competitor of the Company or with any business or enterprise intending to
compete with the Company.
[Section]13. SEVERABILITY. Executive and the Company are of the belief that
the period of time and the area herein specified in [Sections]11 and 12 above
are reasonable in view of the nature of the business in which the Company is
engaged, the state of its development and Executive's knowledge of the business.
However, if such period or such area should be adjudged unreasonable in any
judicial proceeding, then the period of time shall be reduced by such number of
months or such area shall be reduced by elimination of such portion of such
area, or both, as are deemed unreasonable, so that this covenant may be enforced
in such area and during such period of time as is adjudged to be reasonable.
[Section]14. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been given when delivered or mailed by
first-class, registered or certified mail, postage prepaid, addressed (a) if to
Executive, at 000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000; and (b) if to
the Company, attention of the CEO at its principal place of business, 00
Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
[Section]15. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the Company and the Executive with respect to the subject matter hereof
and there have been no oral or other agreements of any kind whatsoever as a
condition precedent or inducement to the signing of this Agreement or otherwise
concerning this Agreement or the subject matter hereof.
[Section]16. AMENDMENTS. This Agreement may not be amended, nor shall any
waiver, change, modification, consent or discharge be effected except by an
instrument in writing executed by or on behalf of the party against whom
enforcement of any waiver, change, modification, consent or discharge is sought.
[Section]17. ASSIGNABILITY; BINDING NATURE. This Agreement has been duly
authorized by the Board and shall be binding upon and inure to the benefit of
the parties and their respective successors, heirs (in the case of the
Executive) and permitted assigns. No rights or obligations of the Company under
this Agreement may be assigned or transferred by the Company, except that such
rights or
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obligations may be assigned or transferred pursuant to a merger or consolidation
in which the Company is not the continuing entity, or the sale or liquidation of
all or substantially all of the assets of the Company, provided that the
assignee or transferee is the successor to all or substantially all of the
assets of the Company and such assignee or transferee assumes the liabilities,
obligations and duties of the Company, as contained in this Agreement, either
contractually or as a matter of law. The Company further agrees that, in the
event of a sale of assets or liquidation as described in the preceding sentence,
it shall cause such assignee or transferee to expressly assume the liabilities,
obligations and duties of the Company hereunder.
[Section]18. General Provisions.
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(a) Executive further agrees that his obligations hereunder shall be
binding upon him irrespective of the duration of his employment by the
Company, the reasons for any cessation of his employment by the Company, or
the amount of his compensation and shall survive the termination of this
Agreement (whether such termination is by the Company, by the Executive,
upon expiration of this Agreement or otherwise).
(b) Executive represents and warrants to the Company that he is not
now under any obligations to any person, firm or corporation, and has no
other interest which is inconsistent or in conflict with this Agreement, or
which would prevent, limit or impair, in any way, the performance by him of
any of the covenants or his duties in his employment hereunder.
[Section]19. INDEMNIFICATION. The Company shall, to the full extent legally
permissible, indemnify the Executive in the event that he was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
including a grand jury proceeding, and all appeals (but excluding any such
action, suit or proceeding by or in the right of the Company), by reason of the
fact that the Executive is or was a member of the Board or an executive officer
of the Company, or is or was serving at the request of the Company as a
director, officer, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including reasonable attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by the Executive in connection with
such action, suit or proceeding if the Executive acted in good faith and in a
manner that the Executive reasonably believed to be in or not opposed to the
best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the conduct in question was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Executive did not act in
good faith and in a manner that the Executive reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, that the Executive had reasonable cause to
believe that the conduct in question was unlawful.
The Company shall, to the full extent legally permissible, indemnify the
Executive in the event that he was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit, including appeals,
by or in the right of the Company to procure a judgment in its favor, by reason
of the fact that the Executive is or was a member of the Board or an executive
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officer of the Company, or is or was serving at the request of the Company as a
director, officer, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including reasonable attorneys' fees) actually and reasonably incurred by the
Executive in connection with the defense or settlement of such action or suit if
the Executive acted in good faith and in a manner that the Executive reasonably
believed to be in or not opposed to the best interests of the corporation,
except that no indemnification shall be made in respect of any claim, issue or
matter as to which the Executive shall have been adjudged to be liable to the
Company unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, the Executive is
fairly and reasonably entitled to indemnity for such expenses which such court
shall deem proper.
To the extent that the Executive has been successful in whole or in part on
the merits or otherwise, including the dismissal of an action without prejudice,
in defense of any action, suit or proceeding or in defense of any claim, issue
or matter therein, the Executive shall be indemnified against all expenses
incurred in connection therewith.
Expenses incurred by the Executive in any action, suit or proceeding shall
be paid by the Company in advance of the final disposition of thereof, if the
Executive shall undertake to repay such amount in the event that it is
ultimately determined, as provided herein, that the Executive is not entitled to
indemnification.
The indemnification and advancement of expenses provided by this Section
shall not be deemed exclusive of any other rights to which the Executive may be
entitled under any By-law, agreement, vote of stockholders or disinterested
directors, the General Corporation Law of the State of Delaware or otherwise,
both as to action in the Executive's official capacity and as to action in
another capacity while serving as a member of the Board or as an executive
officer of the Company. All rights to indemnification under this Section or
advancement of expenses shall continue after the Executive has ceased to be a
director or executive officer, and shall inure to the benefit of his heirs,
executors and administrators. The Company shall also indemnify the Executive for
attorneys' fees, costs, and expenses in connection with the successful
enforcement of the Executive's rights under this Section.
[Section]20. GOVERNING LAW. This Agreement shall be governed by, construed
and enforced in accordance with the law (other than the law governing conflict
of law questions) of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the parties have executed or caused to be executed this
Agreement as of the date first above written.
FIRST NEW ENGLAND DENTAL CENTERS, INC.
By: Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
Xxxxxx Xxxxxxx 11-07-96
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Xxxxxx Xxxxxxx
