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EXHIBIT 10.10
FORM OF
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") dated as of
_________________, 1997 by and between _______________________, a Florida
_________________________ (the "Orthodontic Entity"), and
______________________________, a licensed orthodontist (the "Orthodontist").
W I T N E S S E T H:
WHEREAS, the Orthodontic Entity desires to employ the Orthodontist and
to be assured of his services as such on the terms and conditions hereinafter
set forth; and
WHEREAS, the Orthodontist is willing to accept such
employment on such terms and conditions;
NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00), the
mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the adequacy, receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the Orthodontic
Entity and the Orthodontist hereby agree as follows:
1. EMPLOYMENT.
(a) The Orthodontic Entity hereby employs the Orthodontist to
provide orthodontic services to the general public at the facility or facilities
operated by the Orthodontic Entity (the "Center(s)"), as listed on Exhibit A
attached hereto and incorporated herein by reference, in accordance with the
methods, procedures and processes from time to time set forth by the Orthodontic
Entity, to the extent permitted by applicable law.
(b) The Orthodontist shall faithfully and diligently discharge
his duties hereunder and shall devote his full business time, attention, skill,
and effort exclusively to the business and affairs of the Orthodontic Entity,
subject to allowed vacations and to reasonable periods of illness. During the
term of this Agreement, the Orthodontist shall not, directly or indirectly, as a
partner, member, stockholder, consultant, agent, joint venturer, investor,
lender, individual proprietor, officer, director, employee (except for stock or
investments held by the Orthodontist as of July 31, 1996), or in any capacity
whatsoever, alone or in association with others, own, manage, operate, control
or participate in the ownership, management, operation or
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control of, or work for or permit the use of Orthodontist's name by, or be
connected with in any manner with, or contract to be provided services from any
business, organization or person in competition with the Orthodontic Entity or
any of its affiliated organizations, without the prior written consent of the
Orthodontic Entity. Notwithstanding the foregoing, the Orthodontist shall be
permitted to devote up to eight (8) business days per month to the
Orthodontist's other non-dental and non-orthodontic business interests and
activities; provided, however, that in conducting such activities, the
Orthodontist shall not compete with Premier Orthodontic Group, Inc., a Delaware
corporation, or its successors or assigns ("Premier") or act in any manner
inconsistent with the best business interests of Premier.
2. TERM OF EMPLOYMENT. Unless sooner terminated as provided in
Section 4 hereof, the Orthodontist's employment shall be for an initial term of
five (5) years commencing on the date the Securities and Exchange Commission
declares effective Premier's registration statement on Form S-1 for the sale of
Premier's common stock in an initial public offering (the "IPO") and ending on
the fifth (5th) anniversary thereof (the "Initial Term"). Upon expiration of the
Initial Term, this Agreement shall renew automatically thereafter for additional
one year terms, unless and until terminated as provided in Section 4 hereof.
3. COMPENSATION.
(a) As compensation for services hereunder, the Orthodontic
Entity shall pay to the Orthodontist a percentage as determined by the
Orthodontic Entity of the amount of Adjusted Gross Revenue (determined based on
the accrual method of accounting) of the Center remaining after payment in full
each month of (i) the monthly Service Fee as defined in that certain Service
Agreement, by and between the Orthodontic Entity and Premier, dated as of even
date herewith (the "Service Agreement"), and (ii) all expenses of the Center,
including, without limitation, all Center Expenses (as defined in the Service
Agreement) and all malpractice insurance premiums. As used herein, the term
"Adjusted Gross Revenue" shall mean Gross Revenue of the Center less any
adjustments for uncollectible accounts, professional courtesies and other
activities that do not generate a collectible fee. The term "Gross Revenue" as
used herein shall mean all fees and charges recorded or booked each month by or
on behalf of the Orthodontic Entity as a result of professional orthodontic
services personally furnished to patients by the Orthodontist and those under
the Orthodontist's supervision and other fees or income generated in his
capacity as a professional prior to any adjustments.
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(b) Payments expended each fiscal year by the Orthodontic
Entity on behalf of the Orthodontist and other orthodontists or dentists
delivering patient care at the Center(s) for continuing education, seminars,
professional license fees and dues, professional memberships, expenses related
to a company automobile for the Orthodontist, and all other expenses of the
Orthodontist and other orthodontists and dentists delivering patient care at the
Center(s) that do not directly benefit the Orthodontic Entity (as reasonably
determined by Premier), up to the amount of three percent (3%) of the
Orthodontic Entity's Adjusted Gross Revenue, shall be considered a Center
Expense. To the extent that such expenses exceed three percent (3%) of the
Orthodontic Entity's Adjusted Gross Revenue for such year, the Center Expenses
shall be reduced by such excess amount for the purpose of calculating the
Service Fee (as defined in the Service Agreement). Notwithstanding the
foregoing, Orthodontist is encouraged to incur expenses that will promote the
Orthodontic Entity, which expenses shall be considered Center Expenses for
purposes of calculating the Service Fee.
4. TERMINATION.
(a) Notwithstanding the provisions of Section 2 hereof,
either the Orthodontic Entity or the Orthodontist may terminate the
Orthodontist's employment without cause at any time after the expiration of the
Initial Term by giving one (1) year's prior written notice to the other party to
such effect, such notice to be effective upon receipt by the non-terminating
party. Orthodontic Entity may terminate Orthodontist's employment for "cause"
(as defined in Section 4(b) below) and the Orthodontist may terminate his
employment pursuant to Section 4(c) below. Notice of termination pursuant to
Sections 4(b) or 4(c) shall be effective upon receipt and shall indicate the
basis for termination. Upon termination of this Agreement for any reason, the
Orthodontist shall purchase tail insurance coverage for a period of three (3)
years at the Orthodontist's expense.
(b) For purposes of this Agreement, termination may be for
"cause" in the event of the occurrence of any of the following:
(i) The death of the Orthodontist.
(ii) The physical or mental incapacity of the
Orthodontist. The Orthodontist shall be deemed to be
physically or mentally incapacitated for purposes of this
paragraph if by reason of any physical or mental incapacity he
has been unable or it is deemed that he
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will be unable for a period of at least ninety (90) days to
perform his duties and responsibilities hereunder in a
reasonably satisfactory manner. In the event of any
disagreement between the Orthodontist and the Orthodontic
Entity about whether he is physically or mentally
incapacitated such as to permit the Orthodontic Entity to
terminate his employment pursuant to this paragraph, the
question of such incapacity shall be submitted to an impartial
and reputable physician selected by mutual agreement of the
Orthodontist and the Orthodontic Entity or, failing such
agreement, selected by two physicians (one of which shall be
selected by the Orthodontic Entity and the other by the
Orthodontist). The determination of the question of such
incapacity by such physician shall be final and binding on the
Orthodontist and the Orthodontic Entity for purposes of this
Agreement. The Orthodontic Entity shall pay the reasonable
fees and expenses of such physician.
(iii) Any of (A) the commission by the
Orthodontist of willful misconduct which causes material harm
to the Orthodontic Entity, (B) the conviction of the
Orthodontist for the commission or perpetration by the
Orthodontist of any felony or any act of fraud, or (C)
habitual absenteeism, chronic alcoholism, or drug addiction;
provided, however, that if any such habitual absenteeism,
chronic alcoholism, or drug addiction may reasonably be cured,
the Orthodontist shall have a reasonable time, not exceeding
thirty (30) days, to cure such matter after receiving notice
thereof from the Orthodontic Entity.
(c) For purposes of this Agreement, the Orthodontist may
terminate this Agreement in the event the Orthodontic Entity has committed a
material breach of this Agreement; provided, however, that if such matter may
reasonably be cured, the Orthodontic Entity shall have a reasonable time, not
exceeding ninety (90) days, to cure such matter after receiving notice thereof
from the Orthodontist.
5. PARTIAL RESTRAINT ON POST-TERMINATION COMPETITION.
(a) Orthodontic Entity expects to invest considerable time,
effort, and capital in enhancing the value and desirability of the skills of the
Orthodontist. Both this investment and the Orthodontist's individual
compensation reflect Orthodontic Entity's expectation of receiving a
considerable return from the exclusive use of the Orthodontist's services and
know-how in the future, free from any danger that Orthodontic Entity's
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competitors may attempt to induce the Orthodontist to leave Orthodontic Entity
and wrongfully gain the benefit of Orthodontic Entity's investment. The partial
restraint set forth in subsection (b) of this Section 5 hereof does not, and
cannot, provide complete protection for Orthodontic Entity's investment,
development efforts, and proprietary information, but Orthodontic Entity
believes that in combination with the other provisions of this Agreement, it is
the most fair and reasonable measure permitted under applicable law to protect
Orthodontic Entity's interests, giving due regard to both the Orthodontist's
interests and the interests of Orthodontic Entity.
(b) Orthodontic Entity requires its orthodontists and
dentists to accept and observe the following partial restraint on
post-termination competition, which Orthodontist agrees to honor:
FOR A PERIOD OF TWO YEARS FOLLOWING THE TERMINATION OF YOUR
EMPLOYMENT, YOU MAY NOT (I) ENGAGE IN ANY NEWSPAPER, PRINT,
RADIO, TELEVISION OR ELECTRONIC ADVERTISING FOR YOUR
ORTHODONTIC OR DENTAL SERVICES IN THE BROADCAST COVERAGE AREA
OF TELEVISION STATIONS IN THE MARKET AREA WHERE THE CENTER
COVERED BY THIS AGREEMENT IS LOCATED, WITHOUT ORTHODONTIC
ENTITY'S PRIOR WRITTEN CONSENT, (II) ACTIVELY SOLICIT OR
DIRECTLY MARKET YOUR ORTHODONTIC OR DENTAL SERVICES (OR THOSE
OF ANY OTHER ORTHODONTIC ENTITY WITH WHICH YOU ARE AFFILIATED
OR EMPLOYED) TO ANYONE WHO WAS YOUR PATIENT (OR A PATIENT OF
THE ORTHODONTIC ENTITY) DURING THE TERM OF THIS AGREEMENT,
(III) PROVIDE ORTHODONTIC OR DENTAL SERVICES TO ANY PATIENTS
WITHIN A TEN (10) MILE RADIUS OF ANY CENTER(S)'S, (IV)
ACTIVELY SOLICIT THE CENTER'S STAFF OR PATIENTS, OR (V)
SOLICIT REFERRALS FROM ANY DENTIST WHO REFERRED ONE OR MORE
PATIENTS TO ORTHODONTIST OR THE ORTHODONTIC ENTITY WITHIN THE
TWO YEARS PRIOR TO SUCH TERMINATION.
The running of the two year period prescribed above shall be tolled and
suspended by the length of time Orthodontist works in circumstances that a court
of competent jurisdiction subsequently finds to violate the terms of this
partial restraint.
6. CONFIDENTIAL INFORMATION. The Orthodontist shall agree to
maintain in strict confidence, and not use or disclose except under the
instruction of the Orthodontic Entity, any confidential business information
comprising confidential information and/or a trade secret of the Orthodontic
Entity or an Affiliate (as hereinafter defined. Trade secrets are property
rights protected by law and, for purposes of this letter, shall have the meaning
provided under applicable law, including, in Florida, Fla. Stat. ch. 688.002.
Some of the information that the Orthodontic Entity treats as trade secrets
includes financial information (revenues,
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margins, assets, net income, etc.), annual and long-range business plans,
marketing plans and methods, account invoices, training, educational, and
administrative manuals, patient information, employee lists, suppliers,
wholesalers, and future business plans of the Orthodontic Entity. Confidential
information shall also include all information regarding Premier or any
Affiliate, Premier's or any Affiliate's activities, Premier's or any Affiliate's
business or Premier's or any Affiliate's customers or patients that is not
generally known to persons not employed by Premier or an Affiliate, but that
does not rise to the level of a Trade Secret and that is not generally disclosed
by practice or authority of Premier or an Affiliate to persons not employed by
Premier or an Affiliate. Throughout the term of this Agreement and at all times
after the date that this Agreement terminates for any reason, Orthodontist shall
not directly or indirectly transmit or disclose any confidential information or
trade secret to any person, concern or entity, and shall not make use of any
such trade secret, directly or indirectly, for himself or for others, except (i)
to the extent such disclosure is consistent with Orthodontist's duties hereunder
or (ii) for a disclosure that is required by an law or regulation or court
order, in which latter case Orthodontist shall provide Premier prior written
notice of such disclosure and an opportunity to contest such disclosure. Upon
termination of the Term of this Agreement, Orthodontist will return all trade
secrets and all confidential information of the Orthodontic Entity or Premier,
including without limitation, any documents, notes, analyses, compilations or
other materials incorporating or based on any trade secrets or confidential
information of the Orthodontic Entity or Premier. As used in this Agreement, the
term "Affiliate" shall mean (i) each corporation or other business entity
directly or indirectly controlling, controlled by, or under common control with
the Orthodontic Entity or Premier, and (ii) each orthodontic or dental practice
to which Premier provides management or consulting services, the employees and
principals of such practices, and each corporation or other business entity
directly or indirectly controlling, controlled by, or under common control with
each such practice or the principals thereof.
7. WAIVER. Any waiver of any term or condition or any amendment
of this Agreement shall be effective only if in writing and signed by the
parties. The waiver by either party of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
by either party.
8. PUBLICITY. Following termination of the Orthodontist's
employment, neither party will disparage or injure the reputation of the other
party. This obligation will include, in the Orthodontist's case, refraining from
negative statements about
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the Orthodontic Entity's methods of doing business, the effectiveness of its
business policies, and the quality of any of its services or personnel. In
addition, neither party will make any statements regarding the other or
regarding the Orthodontist's former employment with the Orthodontic Entity to
any member of the print or broadcast media except after mutual consultation.
9. PATIENT CARE. Nothing in this Agreement is intended to
interfere, or shall be construed as interfering, in any way with the
Orthodontist's ability to independently exercise professional and ethical
judgment in the performance of his patient care responsibilities.
10. MISCELLANEOUS.
(a) This Agreement contains the entire agreement between the
Orthodontic Entity and the Orthodontist with respect to the subject matter
hereof and thereof and supersedes all prior arrangements or understandings with
respect hereto or thereto.
(b) The descriptive headings of this Agreement are for
convenience only and shall not control or affect the meaning or construction of
any provision.
(c) Notwithstanding any other term or provision of this
Agreement, all amounts payable to the Orthodontist by the Orthodontic Entity
hereunder shall be subject to the withholding of such sums relating to taxes as
the Orthodontic Entity may reasonably determine it is required to withhold
pursuant to any applicable law or regulation.
(d) All notices pursuant to this Agreement shall be in
writing and sufficient if delivered personally or sent by overnight courier or
registered or certified mail, postage prepaid, addressed as follows:
If to the Orthodontic Entity to:
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If to the Orthodontist to:
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Either party may by written notice change the address to which notices to such
party are to be delivered or mailed.
(e) The parties acknowledge and agree that any legal
remedies for breach of this Agreement would be inadequate and irreparable harm
shall be presumed. The faithful observance of all covenants in this Agreement is
an essential condition to Orthodontist's employment, and Orthodontic Entity is
depending upon absolute compliance herewith. Damages would be very difficult, if
not impossible, to ascertain if the Orthodontist breaches this Agreement.
Orthodontist acknowledges and agrees that any court of competent jurisdiction
should immediately enjoin any breach of this Agreement upon the request of
Orthodontic Entity, and Orthodontist specifically releases Orthodontic Entity
from the requirement of posting any bond in connection with temporary or
interlocutory injunctive relief, to the extent permitted by law.
(f) This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida (without respect to its rules
of conflicts of law).
(g) This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same Agreement.
(h) In the event that any provision of this Agreement or the
application thereof to the Orthodontist or any circumstance in any jurisdiction
governing this Agreement shall, to any extent, be invalid or unenforceable under
any applicable statute, regulation or rule of law, then such provision shall be
deemed inoperative to the extent that it may conflict therewith and shall be
deemed modified to conform to such statute, regulation or rule of law, and the
remainder of this Agreement and the application of any such invalid or
unenforceable provision to parties, jurisdictions or circumstances other than to
whom or to which it is held invalid or unenforceable shall not be affected
thereby nor shall the same affect the validity or enforceability of any other
provision of this Agreement.
(i) No remedy set forth in this Agreement or otherwise
conferred upon or reserved to any party shall be considered exclusive of any
other remedy available to any party, but the same shall be distinct, separate
and cumulative and may be exercised from time to time as often as occasion may
arise or as may be deemed expedient.
IN WITNESS WHEREOF, the Orthodontic Entity and the Orthodontist have
executed this Agreement under seal as of the day and year first above written.
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ORTHODONTIC ENTITY:
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By:
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Name:
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Title:
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ORTHODONTIST:
[SEAL]
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