EXHIBIT 10.25
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), dated as of August 1, 1996,
between ORTHODONTIC CENTERS OF AMERICA, INC., a Delaware corporation (the
"Company"), and XXXXXXXX X. FAUX, a resident of the State of Georgia
("Executive").
W I T N E S S E T H:
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WHEREAS, the Company and its subsidiaries are engaged in providing
management services to orthodontic practices throughout the United States;
WHEREAS, the Company desires to avail itself of Executive's talents and
expertise, and to employ him as Executive Vice President and Chief
Administrative Officer of the Company and certain of its subsidiaries, and
Executive is willing to accept such employment, all on the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the premises, and other mutual
promises and covenants hereinafter contained, the Company and Executive do
hereby agree, for their mutual benefit, as follows:
SECTION 1. EMPLOYMENT.
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Executive shall be employed by the Company under this Agreement, effective
as of September 1, 1996, and Executive accepts such employment upon the terms
and conditions hereinafter set forth.
SECTION 2. TERM.
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The term of employment provided for in this Agreement shall commence on
September 1, 1996, and shall remain in full force and effect for a period of
three (3) years thereafter; provided, however, that such term shall be
automatically extended for an additional two (2) year period unless, no later
than six (6) months prior to the expiration of the initial three (3) year
period, either party hereto shall provide written notice of its or his desire to
not extend the term hereof to the other party hereto.
SECTION 3. POSITIONS, POWERS AND DUTIES.
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Executive shall be employed by the Company during the term of his
employment under this Agreement to serve as Executive Vice President and Chief
Administrative Officer of the Company, with such other positions and titles as
may be assigned to him from time to time by the Chairman of the Board and Chief
Executive Officer and the Board of Directors (the "Board of Directors") of the
Company. Executive shall report directly to the Chairman of the Board and Chief
Executive Officer of the Company and the Board of Directors. In addition, the
Company shall use its reasonable best efforts to cause Executive to be nominated
and elected as a Director of the Company within a year following the date
hereof.
In carrying out his duties under this Agreement, Executive shall have such
powers, responsibilities and duties usually incident to an Executive Vice
President and Chief Administrative Officer, together with such other powers,
responsibilities and duties, commensurate with Executive's position as an
Executive Vice President and Chief Administrative Officer, which may be assigned
to him from time to time by the Chairman of the Board and Chief Executive
Officer of the Company and/or the Board of Directors. Executive's initial
responsibilities and duties shall include general responsibility for
orthodontist recruiting, marketing and investor relations for the Company and
its subsidiaries. The performance by Executive of any duties assigned to him
which are not of the type provided for herein shall not constitute a waiver of
his rights hereunder or an abrogation, abandonment or termination of this
Agreement.
Executive shall devote all of his working time and best efforts in the
best interest of and on behalf of the Company throughout the term of this
Agreement in a manner appropriate for an executive having Executive's position,
duties, responsibilities and status. Executive shall not be restricted from
engaging in a business which is noncompetitive with the Company and its
subsidiaries and affiliates after normal working hours or on weekends or from
investing his assets in such form or manner as will not require any services on
his part in the operation of the affairs of the companies in which such
investments are made.
SECTION 4. PLACE OF PERFORMANCE.
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The headquarters for the performance of Executive's duties shall be
located in Ponte Vedra Beach, Florida, but from time to time Executive shall be
required to travel to the Company's other locations in the proper conduct of his
responsibilities under this Agreement. Due to the national scope of the
Company's business, the Company may require Executive to spend a reasonable
amount of time traveling, as his duties and the business of the Company and its
subsidiaries and affiliates may require.
SECTION 5. COMPENSATION.
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For all services rendered by Executive pursuant to this Agreement, the
Company shall pay Executive the following compensation:
(a) A base salary at the annual rate of $200,000 for the period September
1, 1996 through September 1, 1997, such salary to be paid in accordance with the
regular payroll practices of the Company, as such may exist from time to time.
Such salary shall be reviewed annually by the Chairman of the Board and Chief
Executive Officer and the Compensation Committee (the "Compensation Committee")
of the Board of Directors.
(b) (i) In addition to the above base salary, for each fiscal year or
portion thereof (on a pro-rata basis) during the term hereof,
Executive shall be paid a target
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incentive bonus (the "Base Bonus") in the amount of forty percent
(40%) of Executive's base salary per annum during such year, which
Base Bonus shall be payable only if the Company meets or exceeds the
annual performance standard (the "Annual Performance Standard")
established from time to time by the Compensation Committee.
(ii) In the event, however, that during such year or portion
thereof (on a pro-rata basis) the Company exceeds the Annual
Performance Standard by (i) fifteen percent (15%) or more, Executive
shall, in lieu of the Base Bonus, be paid a target incentive bonus in
the amount of sixty percent (60%) of Executive's base salary per
annum during such year, or (ii) twenty-two and one-half percent
(22.5%) or more, Executive shall, in lieu of the Base Bonus, be paid
a target incentive bonus in the amount of eighty percent (80%) of
Executive's base salary per annum during such year (each, a "Premium
Bonus").
(iii) The Annual Performance Standard will be established for each
fiscal year during the term of this Agreement by the Compensation
Committee. The Annual Performance Standard may be changed prior to
the beginning of any fiscal year (or portion thereof) during the term
of this Agreement, and the Compensation Committee may, in its
discretion, so change the Annual Standard for the purposes of this
paragraph. The Compensation Committee or the Company shall give
notice to Executive of any such change in the Annual Performance
Standard.
(iv) The Base Bonus or Premium Bonus, as applicable, shall be paid
on an annual basis and shall be payable within ten (10) days
following the date on which the Compensation Committee determines the
amount of the Base Bonus or the Premium Bonus, as applicable.
(c) (i) In addition to the above cash compensation, on October 25,
1996, September 1, 1997 and September 1, 1998, Executive shall be
granted incentive stock options under the Company's 1994 Stock
Incentive Plan (the "Option Plan") to purchase 50,000, 15,000 and
20,000 shares, respectively, of Common Stock, $.01 par value per
share (the "Common Stock"), of the Company, and, if the term of this
Agreement shall be extended pursuant to Section 2 hereof, on
September 1, 1999 and September 1, 2000, Executive shall be granted
incentive stock options under the Option Plan to purchase 25,000 and
30,000 shares, respectively, of Common Stock.
(ii) Further, if, during any two-year cycle during the term hereof
(beginning with the two-year cycle during fiscal years 1997 and
1998), the Company exceeds by at least 15%, 20% or 25% the
performance standard for long-term performance (the "Long-Term
Performance Standard") established by the Compensation Committee for
such two-year cycle, Executive shall receive additional grants of
incentive stock options under the Option Plan to purchase
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10,000, 17,500 or 25,000 shares of Common Stock, respectively. For
purposes of this Agreement the Long-Term Performance Standard will be
determined, initially, based upon the expected number of openings of
new orthodontic centers, affiliations with orthodontists, revenues
and/or earnings per share of the Company. If, during the term of
this Agreement, the Compensation Committee shall determine that the
Long-Term Performance Standard shall be changed to a different
performance measure, i.e., total shareholder return, relative
shareholder value, stock price appreciation or other criteria, the
Long-Term Performance Standard may be changed, with prior
notification and discussion with Executive.
(c) Executive shall be entitled to participate in any other bonus plan or
long-term incentive plan approved by the Board of Directors for the Company's
management and shall be eligible for other discretionary bonuses approved by the
Board of Directors.
(d) For purposes of administration, the terms of this Agreement shall be
given effect on a pro-rata basis for partial fiscal years and otherwise
administered on a fiscal year basis.
(e) Options granted to Executive hereunder shall vest in a manner
consistent with the vesting schedule of options granted under the Option Plan to
other members of senior management of the Company, and the number thereof shall
be adjusted proportionally to reflect any stock split or stock dividend of the
Common Stock following the date hereof.
SECTION 6. EMPLOYEE BENEFITS.
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Subject to eligibility requirements, Executive will be entitled to
participate during the term hereof in any employee retirement, benefit or
welfare plans provided by the Company to its employees and/or to its senior
executives, such as life insurance, health and dental, retirement, savings and
disability plans which the Company has in effect or may adopt from time to time.
Without limiting the generality of the foregoing, the Company shall provide
Executive the following during the term of this Agreement:
(a) a reasonable paid vacation during each year of this Agreement of up to
three (3) weeks per annum;
(b) mileage reimbursement for use of Executive's personal vehicle in
connection with the performance of Executive's duties hereunder, in accordance
with the Company's expense reimbursement policy;
(c) a one-time "signing" bonus of $15,000, to be paid in cash within
thirty (30) days following the date hereof; and
(d) consideration, at least annually, by the Compensation Committee for
the grant to Executive of options to purchase Common Stock subsequent to the
grants outlined in Section 5(c) hereof.
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SECTION 7. EXPENSES.
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Executive is authorized to incur reasonable expenses in promoting the
business of the Company and its subsidiaries, including expenses, to the extent
used for business purposes, for entertainment, travel and similar items. The
Company will reimburse Executive for all such expenses, upon the presentation by
him of an itemized account of such expenditures in accordance with the Company's
expense reimbursement procedures.
SECTION 8. DEFINITIONS.
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As used in this Agreement, the following terms shall have the meanings set
forth below:
(a) "CAUSE" shall mean (i) violations by Executive of Executive's
obligations under this Agreement (other than as a result of incapacity due to
physical or mental illness) which violation (A) is willful and deliberate on
Executive's part, or committed in bad faith or without reasonable belief that
such violation is in the best interests of the Company, and (B) are not remedied
within thirty (30 days) after receipt of written notice from the Company
specifying such violations, (ii) the conviction of Executive of a felony or
other crime involving moral turpitude, or (iii) willful dishonesty towards,
fraud or embezzlement upon or deliberate injury or attempted injury to the
Company by Executive.
(b) "CHANGE IN CONTROL" shall mean:
(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") (a "Person"), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (A) the then
outstanding shares of Common Stock (the "Outstanding Company Common
Stock") or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors ("the Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change of Control: (1)
any acquisition directly from the Company, (2) any acquisition by the
Company, (3) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Person
controlled by the Company or (4) any acquisition by any Person
pursuant to a transaction which complies with clauses (1), (2) and
(3) of subsection (iii) below;
(ii) Individuals who, as of the date of this Agreement, constitute
the Board of Directors (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board of Directors;
provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least
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a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of
Directors;
(iii) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets
of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, (1) all or substantially all of
the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be,
(2) no party (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, twenty percent (20%) or
more of, respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership existed
prior to the Business Combination and (3) at least a majority of the
members of the board of directors of the corporation resulting from
such Business Combination were members of the Board of Directors of
the Company at the time of the execution of the initial agreement, or
of the action of the Board of Directors, providing for such Business
Combination; or
(iv) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
(c) "CODE" shall mean the Internal Revenue Code of 1986 and all
regulations promulgated thereunder, as the same may be amended from time to
time.
(d) "DISABILITY" shall be deemed to have occurred if Executive makes
application for or is otherwise eligible for disability benefits under any
Company sponsored long-term
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disability program covering Executive, and Executive qualifies for such
benefits. In the absence of a Company-sponsored long-term disability program
covering Executive, Executive shall be presumed totally and permanently disabled
if so determined by the Board of Directors following reasonable review of a
medical opinion certifying that Executive will be unable to perform his duties
under this Agreement for at least one hundred twenty (120) substantially
consecutive days due to a physical or mental condition.
(e) "GOOD REASON" shall mean:
(i) The assignment to Executive, without Executive's prior written
consent, of any duties inconsistent with Executive's position,
duties, responsibilities and status with the Company as described in
this Agreement or an adverse change in Executive's titles or offices
or any removal of Executive from any of such positions, except in
connection with the termination of this Agreement under Sections
9(c), 9(d) or 9(e);
(ii) A reduction in Executive's base salary, as the same may be
increased from time to time;
(iii) A termination by the Company of any compensation, retirement,
benefit or welfare plan in which Executive is participating, without
substituting plans providing Executive with substantially similar
benefits, or the taking of any action by the Company which would
adversely affect Executive's participation in or materially reduce
Executive's benefits under any of such plans or deprive Executive of
any material fringe benefit enjoyed by Executive;
(iv) Any purported termination for Cause or Disability without
reasonable grounds therefor; or
(v) The relocation of Executive's primary work location to a location
that is more than thirty (30) miles from Executive's primary work
location without Executive's prior consent.
(f) "RETIREMENT DATE" shall mean the date Executive reaches age 70 1/2,
or the date Executive retires in accordance with the Company's retirement
arrangements established for Executive with Executive's consent.
SECTION 9. TERMINATION.
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This Agreement shall terminate upon the occurrence of any of the following
termination events:
(a) Executive gives notice to the Company prior to the occurrence of a
Change in Control that Executive wishes to terminate this Agreement for any
reason other than Good
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Reason not less than one hundred eighty (180) days after such notice is given,
such termination to be effective on the date specified in such notice;
(b) Executive gives notice to the Company prior to the occurrence of a
Change in Control that Executive wishes to terminate this Agreement for Good
Reason not less than ninety (90) days after such notice is given, such
termination to be effective on the date specified in such notice;
(c) the Company gives notice to Executive that the Company wishes to
terminate this Agreement for Cause, such termination to be effective upon
receipt by Executive of such notice;
(d) Executive dies or Executive ceases to be able to perform his duties
hereunder due to death or a Disability, such termination to be effective
immediately upon such death or Disability;
(e) Executive reaches his Retirement Date, such termination to be
effective upon such Retirement Date;
(f) the Company gives notice to Executive that the Company wishes to
terminate this Agreement for any reason other than for Cause, such termination
to be effective upon receipt by Executive of such notice;
(g) the Company gives notice to Executive following the occurrence of a
Change in Control that the Company wishes to terminate this Agreement for any
reason other than for Cause or due to Executive's death, Disability or
Retirement Date, such termination to be effective upon receipt by Executive of
such notice; or
(h) Executive gives notice to the Company following the occurrence of a
Change in Control that Executive wishes to terminate this Agreement for Good
Reason, such termination to be effective upon receipt by the Company of such
notice.
SECTION 10. TERMINATION BENEFITS.
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(a) Upon the occurrence of an event of termination described in Section
9(a) or 9(c), Executive shall be entitled to receive the following as severance
compensation:
(i) payment of any previously unpaid base salary and earned annual
incentive through the date of termination;
(ii) payment of all vested deferred compensation; and
(iii) payment of any life insurance, disability or other benefits,
if any, for which Executive is then eligible under the terms of the
Company' employee retirement, benefit and welfare plans.
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(b) Upon the occurrence of an event of termination described in Section
9(d) or 9(e), Executive (or Executive's estate in the event of Executive's
death) shall be entitled to receive the following as severance compensation:
(i) payment of any previously unpaid base salary and earned annual
incentive through the date of termination or disability;
(ii) payment of all vested deferred compensation; and
(iii) continuation of any life insurance, disability or other
benefits, if any, for which Executive is then eligible under the
terms of the Company' employee retirement, benefit and welfare plans
for the remainder of the employment agreement term.
(c) Upon the occurrence of an event of termination described in Sections
9(b) or 9(f), Executive shall be entitled to receive the following as severance
compensation:
(i) payment of any previously unpaid base salary through the date of
termination;
(ii) continued payment of Executive's annual base salary at the time
of termination for the remaining term of this Agreement, but in no
event for a period of less than three (3) years; provided, however,
that if Executive accepts other employment or is engaged in his own
business during such period, the severance compensation payable to
Executive during such period will be reduced by the amount of
compensation that the Employee is receiving in respect of such other
employment or business.
(iii) payment of all vested deferred compensation;
(iv) payment of an amount equal to two (2) times Executive's average
annual incentive bonus during the preceding two (2) years;
(v) payment of any life insurance, disability or other benefits, if
any, for which Executive is then eligible under the terms of the
Company' employee retirement, benefit and welfare plans;
(vi) subject to the terms and eligibility requirements of any such
plan, continued coverage during the remainder of the term hereof
following the date of termination under any employee retirement,
benefit and welfare plans of the Company for which Executive is then
eligible; provided that, (A) if Executive's participation in any such
plan is not permitted under the terms thereof, the Company will use
reasonable best efforts to provide or arrange comparable coverage for
Executive, (B) the Company's obligation under this paragraph (vi)
will terminate with respect to any plan on the date Executive first
becomes
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eligible for the same type of coverage under another employer's plan,
and (C) to the extent applicable, upon termination of coverage under
any plan pursuant to this paragraph (vi), Executive shall have the
option to have assigned to him at no cost and with no apportionment
for prepaid premiums, any assignable insurance policy owned by the
Company and relating specifically to Executive;
(vii) a right to immediately vest in one hundred percent (100%) of
all options to purchase Common Stock that have been granted to
Executive by the Company and a period of at least ninety (90) days
following termination for Executive to exercise all such options in
accordance with the terms thereof; and
(viii) payment of the reasonable costs for outplacement services, in
an amount of up to $5,000, during the lesser of the period (A) until
Executive becomes employed on a full-time basis, or (B) six (6)
months following the date of termination of this Agreement.
(d) Upon the occurrence of an event of termination described in Section
9(g) or 9(h), Executive shall be entitled to receive the following as
severance compensation:
(i) payment of any previously unpaid base salary through the date of
termination;
(ii) continued payment of Executive's annual base salary at the time
of termination for the remaining term of this Agreement, but in no
event for a period of less than three (3) years;
(iii) payment of all vested deferred compensation;
(iv) payment of an amount equal to two (2) time Executive's average
annual incentive bonus during the preceding two (2) years; and
(v) subject to the terms and eligibility requirements of any such
plan, continued coverage during the remainder of the term hereof
following the date of termination under any employee retirement,
benefit and welfare plans of the Company for which Executive is then
eligible; provided that, (A) if Executive's participation in any such
plan is not permitted under the terms thereof, the Company will use
reasonable best efforts to provide or arrange comparable coverage for
Executive, (B) the Company's obligation under this paragraph (v) will
terminate with respect to any plan on the date Executive first
becomes eligible for the same type of coverage under another
employer's plan, and (C) to the extent applicable, upon termination
of coverage under any plan pursuant to this paragraph (v), Executive
shall have the option to have assigned to him at no cost and with no
apportionment for prepaid premiums, any assignable insurance policy
owned by the Company and relating specifically to Executive;
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(vi) a right to immediately vest in one hundred percent (100%) of
all options to purchase Common Stock that have been granted to
Executive by the Company and a period of at least ninety (90) days
following termination for Executive to exercise all such options in
accordance with the terms thereof; and
(vii) payment of the reasonable costs for outplacement services, in
an amount of up to $5,000, during the lesser of the period (A) until
Executive becomes employed on a full-time basis, or (B) six (6)
months following the date of termination of this Agreement.
(e) At the Executive's election, he may receive a lump sum amount equal to
the present value of such severance payments described above which may not be
greater than three (3) times the Executive's base salary. The present value will
be determined using a discount rate equal to the ninety (90) day treasury xxxx
interest rate in effect on the date of delivery of such notice. Notwithstanding
the foregoing, the Company is not required to pay the Executive any amount which
is not deductible for federal income purposes.
SECTION 11. NON-COMPETITION AND CONFIDENTIALITY.
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(a) During the term of this Agreement and for a period of two (2) years
thereafter, Executive shall not, directly or indirectly, own, operate, be
employed by, be a director of, act as a consultant for, be associated with, or
be a partner or have a proprietary interest in, any enterprise, partnership,
association, corporation, joint venture or other entity, which is competitive
with the orthodontic practice management services business of the Company, or
any subsidiary or affiliate thereof, and Executive shall not solicit any
customer of client of the Company or solicit the services of individuals in the
Company's employ.
(b) Executive, except in connection with his employment hereunder, shall
not disclose to any person or entity or use, either during the term of this
Agreement or at any time thereafter, any information not in the public domain or
generally known in the industry, in any form, acquired by Executive while
employed by the Company or any predecessor to the Company's business, and
relating to the Company, its subsidiaries or affiliates, including but not
limited to information regarding customers, vendors, suppliers, trade secrets,
training programs, manuals or materials, technical information, contracts,
systems, procedures, mailing lists, know-how, trade names, improvements, price
lists, financial or other data (including the revenues, costs or profits
associated with any of the Company's services), business plans, code books,
invoices and other financial statements, computer programs, software systems,
databases, discs and printouts, plans (business, technical or otherwise),
customer and industry lists, correspondence, internal reports, personnel files,
sales and advertising material, telephone numbers, names, addresses or any other
compilation of information, written or unwritten, which is or was used in the
business of the Company or any subsidiaries or affiliates thereof. Executive
agrees and acknowledges that all of such information, in any form, and copies
and extracts thereof, are and shall remain the sole and exclusive property of
the Company, and upon termination of his employment with the Company, Executive
shall return to the Company the originals and all copies of any such information
provided to or acquired by Executive in
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connection with the performance of his duties for the Company, and shall return
to the Company all files, correspondence and/or other communications received,
maintained and/or originated by Executive during the course of his employment.
(c) The parties have entered into this Section 11 of this Agreement in
good faith and for the reasons set forth in the recitals hereto and assume that
this Agreement is legally binding. If for any reason, this Section 11 is not
binding because of its geographical scope or because of its term, then the
parties agreed that this Agreement shall be deemed effective to the widest
geographical area and/or the longest period of time as may be legally
enforceable.
(d) Executive acknowledges that the rights and privileges granted to the
Company in this Section 11 are of special and unique character, which gives them
a peculiar value, the loss of which may not be reasonably or adequately
compensated for by damages in an action of law, and that a breach thereof by
Executive of this Section 11 will cause the Company great and irreparable injury
and damage. Accordingly, Executive hereby agrees that the Company shall be
entitled to remedies of injunction, specific performance or other equitable
relief to prevent a breach of this Section 12 of this Agreement by Executive.
This provision shall not be construed as a waiver of any other rights or
remedies the Company may have for damages or otherwise.
SECTION 12. NON-ASSIGNABILITY.
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Executive shall not have the right to assign, transfer, pledge,
hypothecate or dispose of any right to receive payments hereunder or any rights,
privileges or interest hereunder, all of which are hereby expressly declared to
be non-assignable and non-transferable, except after termination of his
employment hereunder. In the event of a violation of the provisions of this
Section 12, no further sums shall hereafter become due or payable by the Company
or its subsidiaries and affiliates to Executive or his assignee, transferee,
pledgee or to any other person whatsoever, and the Company shall have no further
liability under this Agreement to Executive.
SECTION 13. CLAIMS; MEDIATION.
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(a) All claims by Executive for compensation and benefits under this
Agreement shall be directed to and determined by the Compensation Committee and
shall be in writing. Any denial by the Compensation Committee or the Board of
Directors of a claim for benefits under this Agreement shall be delivered to
Executive in writing and shall set forth the specific reasons for the denial and
specific provisions of this Agreement relied upon. The Board of Directors shall
afford a reasonable opportunity to Executive for a review of a decision denying
a claim and shall further allow Executive to appeal to the Board of Directors a
decision of the Compensation Committee or the Board of Directors within sixty
(60) days after notification by the Compensation Committee or the Board of
Directors, as applicable, that Executive's claim has been denied.
(b) In the event that the parties hereto fail to resolve any dispute or
controversy arising under or in connection with this Agreement within ninety
(90) following the date on
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which such dispute or controversy arose, upon written demand by either party
hereto to the other party hereto, such dispute or controversy shall be promptly
submitted to non-binding mediation by a mediator mutually agreeable to both
parties. Each party shall bear their respective expenses incurred in connection
with such mediation and shall evenly divide the fees and expenses of such
mediator.
SECTION 14. EMPLOYMENT TAXES.
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All compensation paid pursuant to this Agreement, including compensation
paid pursuant to Section 5 and Section 10 of this Agreement, shall be subject to
reduction by all applicable withholding, social security and other federal,
state and local taxes and deductions.
SECTION 15. BINDING EFFECT.
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The rights and obligations of the Company and its subsidiaries under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Company. Executive shall not assign or alienate any interest
of his in this Agreement.
SECTION 16. WAIVER OF BREACH.
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The waiver by either party to this Agreement of a breach of any provision
thereof by the other party shall not operate or be construed as a waiver of any
subsequent breach of such party.
SECTION 17. NOTICES.
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Any notice required or permitted to be given under this Agreement shall be
sufficient if in writing and if delivered by hand or by certified or registered
mail or by a nationally recognized overnight delivery service, postage or other
charges pre-paid, and addressed to: Xxxxxxxx X. Faux, 000 Xxxxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxx 00000 (if such notice is addressed to Executive), or to
Orthodontic Centers of America, Inc., 00000 Xxxxxxxx Xxxxxxx Xxxxxx, Xxxxx 00,
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000, Attention: Chief Executive Officer (if such
notice is addressed to the Company), or such other address as may be designated
by a party hereto in written notice to the other party hereto. Such notice
shall be deemed to have been given or made on the date of delivery, if delivered
by hand, or on the next following date if sent by mail or overnight delivery
service.
SECTION 18. ENTIRE AGREEMENT.
----------------
This instrument shall be governed by the laws of the State of Florida and
contains the entire agreement of the parties with respect to the subject matter
hereof and supersedes any other agreements, whether written or oral, between the
parties. This Agreement may not be changed orally, but only by an instrument in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
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SECTION 19. COUNTERPARTS.
------------
This Agreement may be executed in two or more counterparts, each of which
shall for all purposes be deemed to be an original but each of which, when so
executed, shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
ORTHODONTIC CENTERS OF AMERICA, INC.
By:/s/ Xx. Xxxxxx Xxxxxxx, Xx.
------------------------------
Xx. Xxxxxx Xxxxxxx, Xx.
Chairman of the Board and
Chief Executive Officer
/s/ Xxxxxxxx X. Faux
---------------------------------
Xxxxxxxx X. Faux
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