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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into
this ___ day of __________, 1997, by and between HEALTHCARE RECOVERIES, INC., a
Delaware corporation (the "Company"), and [NAME OF EMPLOYEE], (the "Employee").
STATEMENT OF BACKGROUND INFORMATION
The Company provides subrogation and related recovery services for
healthcare payors (the "Business"), including health maintenance organizations,
indemnity insurers, Blue Cross and Blue Shield organizations, third-party
administrators, self-funded employee health welfare benefit plans, and provider
hospital organizations. The Company's services consist of assisting healthcare
payors to recover the cost or reasonable value of healthcare benefits provided
to insureds who are injured under circumstances where a third party, typically
a property or casualty insurer of an individual, is ultimately responsible for
such healthcare benefits.
The Company desires to obtain the services of Employee and Employee
desires to accept such employment.
STATEMENT OF AGREEMENT
In consideration of the mutual covenants, promises and conditions set
forth in this Agreement, the parties agree as follows:
1. Employment. The Company employs Employee and Employee
accepts such employment upon the terms and conditions set forth in this
Agreement. For purposes of Sections 6, 7 and 8 of this Agreement, "employment"
shall mean any period of time during which the Company is paying the Employee
salary under Section 5(a) of this Agreement, whether or not the Employee is
currently performing services for the Company at the time of such payment. For
all other purposes under this Agreement, "employment" shall have its customary
meaning. Notwithstanding anything in this Agreement to the contrary, if the
Company is paying the Employee salary, wages, benefits, severance or any other
sums of money after termination of Employee's employment with the Company, and
Employee obtains any other employment for consideration in any capacity, then
such payments will (i) cease immediately if Employee's employment with the
Company was terminated as a result of the occurrence of any events described in
Section 4(a)(i) through 4(a)(iv) ("terminated for cause"), or (ii) be reduced
by an amount equal to the value of consideration received in connection with or
as a result of such other employment if Employee was terminated other than as
a result of the occurrence of any events described in Section 4(a)(i) through
4(a)(iv) ("terminated without cause").
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2. Duties of Employee. Employee agrees to perform and discharge
the Business duties which may be assigned to Employee from time to time by the
Company to the reasonable satisfaction of the Company. Employee also agrees to
comply with all of the Company's policies, standards and regulations, as
promulgated by the officers of the Company. Employee will devote Employee's
full professional and business-related time, skills and best efforts to the
Business and, will not, during the term of this Agreement, be engaged (whether
or not during normal business hours) in any other business or professional
activity, whether or not such activity is pursued for gain, profit or other
pecuniary advantage, without the prior written consent of the President of the
Company, which consent will not be unreasonably withheld. This Section will
not be construed to prevent Employee from (a) investing personal assets in
businesses which do not compete with the Company in such form or manner that
will not require any services on the part of Employee in the operation or the
affairs of the companies in which such investments are made and in which
Employee's participation is solely that of an investor; (b) purchasing
securities in any corporation whose securities are listed on a national
securities exchange or regularly traded in the over-the-counter market,
provided that Employee at no time owns, directly or indirectly, in excess of
one percent of the outstanding stock of any class of any such corporation
engaged in a business competitive with that of the Company; or (c)
participating in conferences, preparing and publishing papers or books or
teaching, so long as the President of the Company gives prior approval to such
participation, preparation and publication or teaching.
3. Term. The term of this Agreement will be for a period of
three years commencing on the date of this Agreement and expiring on the third
anniversary of that date, subject to earlier termination as provided for in
Section 4.
4. Termination.
(a) Termination by Company for Cause. Notwithstanding
anything contained in Section 3 to the contrary, the Company may terminate this
Agreement and all of its obligations under this Agreement immediately if any of
the following events occur:
(i) Employee materially breaches any of the terms or
conditions set forth in this Agreement and fails to
cure such breach within ten days after Employee's
receipt from the Company of written notice of such
breach, which notice shall describe in reasonable
detail the Company's belief that Employee is in
breach (notwithstanding the foregoing, no cure period
shall be applicable to breaches by Employee of
Sections 6, 7 or 8 of this Agreement);
(ii) Employee commits any other act materially detrimental
to the business or reputation of the Company;
(iii) Employee intentionally engages in dishonest or
illegal activities or commits or is convicted of any
crime involving fraud, deceit or moral turpitude; or
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(iv) Employee dies or becomes mentally or physically
incapacitated or disabled so as to be unable to
perform Employee's duties under this Agreement.
Without limiting the generality of the foregoing,
Employee's inability adequately to perform services
under this Agreement for a period of sixty
consecutive days will be conclusive evidence of such
mental or physical incapacity or disability, unless
such inability adequately to perform services under
this Agreement is pursuant to a mental or physical
incapacity or disability covered by the Family
Medical Leave Act, in which case such sixty day
period shall be extended to a one hundred and twenty
day period.
(b) Termination by Company Without Cause. Notwithstanding
anything contained in Section 3 to the contrary, the Company may terminate
Employee's employment pursuant to this Agreement without cause upon at least
thirty days' prior written notice to Employee. Subject to the provisions of
clause (ii) of Section 1, if Employee's employment with the Company is
terminated by the Company without cause, the Company shall remain subject to
its obligations hereunder as if Employee remained employed hereunder for the
balance of the term, as provided in Section 3.
5. Compensation and Benefits.
(a) Annual Salary. For all services rendered by Employee under
this Agreement, the Company will pay Employee a base salary of _______ thousand
dollars per annum in equal bi-weekly installments. Such annual salary will be
subject to annual adjustments by any increases given in the normal course of
business.
(b) Stock Option Awards. Employee shall be entitled to receive
under the Healthcare Recoveries, Inc., Non- Qualified Stock Option Plan options
to purchase ____________ shares of the Company's common stock for an exercise
price equal to the initial offering price of the Company's Common Stock on the
Nasdaq National Market on __________, 1997, which options shall have an
effective grant date of ___________, 1997 and shall vest over three years as
follows: one-third on each of the first three anniversaries of the effective
grant date.
(c) Other Benefits. Employee will be entitled to such fringe
benefits as may be provided from time-to-time by the Company to its employees,
including, but not limited to, group health insurance, life and disability
insurance, vacations and any other fringe benefits now or hereafter provided by
the Company to its employees, if and when Employee meets the eligibility
requirements for any such benefit. The Company reserves the right to change or
discontinue any employee benefit plans or programs now being offered to its
employees; provided, however, that all benefits provided for employees of the
same position and status as Employee will be provided to Employee on an equal
basis.
(d) Business Expenses. Employee will be reimbursed for all
reasonable expenses incurred in the discharge of Employee's duties under this
Agreement pursuant to the Company's standard reimbursement policies.
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(e) Withholding. The Company will deduct and withhold from the
payments made to Employee under this Agreement, state and federal income taxes,
FICA and other amounts normally withheld from compensation due employees.
6. Non-Disclosure of Proprietary Information. Employee
recognizes and acknowledges that the Trade Secrets and Confidential Information
of the Company and its affiliates and all physical embodiments of the same (as
they may exist from time-to-time, collectively, the "Proprietary Information")
are valuable, special and unique assets of the Company's and its affiliates'
businesses. Employee further acknowledges that access to such Proprietary
Information is essential to the performance of Employee's duties under this
Agreement. Therefore, in order to obtain access to such Proprietary
Information, Employee agrees that Employee shall hold in confidence all
Proprietary Information and will not reproduce, use, distribute, disclose,
publish or otherwise disseminate any Proprietary Information, in whole or in
part, and will take no action causing, or fail to take any action necessary to
prevent causing, any Proprietary Information to lose its character as
Proprietary Information, nor will Employee make use of any such information for
Employee's own purposes or for the benefit of any person, firm, corporation,
association or other entity (except the Company) under any circumstances.
For purposes of this Agreement, the term "Trade Secrets" means the whole or any
portion of any scientific or technical or other information, design, process,
procedure, formula, computer software product, documentation or improvement
relating to the Company's or its affiliates' businesses which (1) derives
economic value, actual or potential, from not being generally known to other
persons who can obtain economic value from its disclosure or use; and (2) is
the subject of efforts that are reasonable under the circumstances to maintain
its secrecy or confidentiality. The term "Confidential Information" means any
and all data and information relating to the Company's or its affiliates'
Business, other than Trade Secrets, (1) which has value to the Company or its
affiliates; (2) is not generally known by its competitors or the public; and
(3) is treated as confidential by the Company or its affiliates. The provisions
of this Section 6 will apply during Employee's employment by the Company and
for a two year period thereafter with respect to Confidential Information, and
during Employee's employment by the Company and at any and all times thereafter
with respect to Trade Secrets. These restrictions will not apply to any
Proprietary Information which is in the public domain, provided that Employee
was not responsible, directly or indirectly, for such Proprietary Information
entering the public domain without the Company's consent. This Section 6,
together with Sections 7, 8, 9, 10, 11 and 12 of this Agreement, shall survive
termination of this Agreement.
7.A. Non-Competition Covenant. During Employee's employment by the
Company and for a period of two years following any termination of Employee's
employment for whatever reason, Employee will not, directly or indirectly, on
Employee's own behalf or in the service of or on behalf of any other individual
or entity, compete with the Company within the Geographical Area (as defined).
The term "compete" means to engage in, have any equity or profit interest in,
make any loan to or for the benefit of, or render any services of any kind to,
directly or indirectly, on Employee's own behalf or in the service of or on
behalf of any other individual or entity, either as a
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proprietor, employee, agent, independent contractor, consultant, director,
officer, partner or stockholder (other than a stockholder of a corporation
listed on a national securities exchange or whose stock is regularly traded in
the over-the-counter market, provided that Employee at no time owns, directly
or indirectly, in excess of one percent of the outstanding stock of any class
of any such corporation) any business which provides Business services. For
purposes of this Agreement, the term "Geographic Area" means the territory
located within a seventy-five mile radius of each facility for which Employee
has management responsibility during Employee's employment with the Company.
B. Non-Interference. During Employee's employment by the Company
and for a period of two years following the termination of Employee's
employment for whatever reason, Employee will not, directly or indirectly, on
Employee's own behalf or in the service of or on behalf of any other individual
or entity, interfere with, disrupt, or attempt to disrupt the past, present or
prospective relationships, contractual or otherwise, between the Company and
any supplier, consultant, or client of the Company with whom Employee had
material contact during Employee's employment by the Company. The term
"prospective relationship" is defined as any relationship where the Company has
actively sought an individual or entity as a prospective supplier, consultant,
or client.
C. Non-Solicitation of Clients Covenant. Employee agrees that
during Employee's employment by the Company and for a period of two years
following the termination of Employee's employment for whatever reason,
Employee will not, directly or indirectly, on Employee's own behalf or in the
service of or on behalf of any other individual or entity, divert, solicit or
attempt to solicit or accept business from any individual or entity (i) who is
a client of the Company at any time during the six month period prior to
Employee's termination of employment with the Company ("Client"), or was
actively sought by the Company as a prospective client, and (ii) with whom
Employee had material contact while employed by the Company to provide Business
services to such Clients or prospects. Employee further agrees that during
Employee's employment by the Company and for a period of two years following
the termination of Employee's employment for whatever reason in accordance with
this agreement, Employee will not, directly or indirectly, as an employee,
independent contractor, agent or in any other capacity, be employed by any
Client:
(i) which received Business services from Employee, or
with which Employee otherwise had material contact
while employed by the Company; or
(ii) which received Business services from any employee or
office of the Company over which Employee had
management responsibility;
in either case to provide, directly or indirectly, Business services.
D. Construction. The parties agree that any judicial authority
construing all or any portion of this Section 7 or Section 8 will be empowered
to sever any portion of the Geographical Area, client base, prospective
relationship or prospect list or any prohibited business activity from the
coverage of such Section and to apply the provisions of such Section to the
remaining portion of the
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Geographical Area, the client base or the prospective relationship or prospect
list, or the remaining business activities not so severed by such judicial
authority. In addition, it is the intent of the parties that the judicial
authority replace each such severed provision with a provision as similar in
terms to such severed provision as may be possible and be legal, valid and
enforceable. It is the intent of the parties that Sections 7 and 8 be enforced
to the maximum extent permitted by law. If any provision of either such
Section is determined not to be specifically enforceable, the Company shall
nevertheless be entitled to bring an action to seek to recover monetary damages
as a result of the breach of such provision by Employee.
8. Non-Solicitation of Employees Covenant. Employee agrees and
represents that during Employee's employment by the Company and for a period of
two years following any termination of Employee's employment for whatever
reason, Employee will not, directly or indirectly, on Employee's own behalf or
in the service of, or on behalf of any other individual or entity, divert,
solicit or hire away, or attempt to divert, solicit or hire away, to or for any
individual or entity which is engaged in providing Business services, any
person employed by the Company, whether or not such employee is a full-time
employee or temporary employee of the Company, whether or not such employee is
employed pursuant to a written agreement and whether or not such employee is
employed for a determined period or at will.
9. Existing Restrictive Covenants. Employee represents and
warrants that Employee's employment with the Company does not and will not
breach any agreement which Employee has with any former employer to keep in
confidence confidential information or not to compete with any such former
employer. Employee will not disclose to the Company or use on its behalf any
confidential information of any other party required to be kept confidential by
Employee.
10. Return of Confidential Information. Employee acknowledges
that as a result of Employee's employment with the Company, Employee may come
into the possession and control of Proprietary Information, such as proprietary
documents, drawings, specifications, manuals, notes, computer programs, or
other proprietary material. Employee acknowledges, warrants and agrees that
Employee will return to the Company all such items and any copies or excerpts
thereof, and any other properties, files or documents obtained as a result of
Employee's employment with the Company, immediately upon the termination of
Employee's employment with the Company.
11. Proprietary Rights. During the course of Employee's
employment with the Company, Employee may make, develop or conceive of useful
processes, machines, compositions of matter, computer software, algorithms,
works of authorship expressing any such algorithm, or any other discovery,
idea, concept, document or improvement which relates to or is useful to the
Company's Business (the "Inventions"), whether or not subject to copyright or
patent protection, and which may or may not be considered Proprietary
Information. Employee acknowledges that all such Inventions will be "works made
for hire" under United States copyright law and will remain the sole and
exclusive property of the Company. Employee assigns and agrees to assign to
the Company, in perpetuity, all right, title and interest Employee may have in
and to such Inventions, including without limitation, all copyrights, and the
right to apply for any form of patent, utility model, industrial design
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or similar proprietary right recognized by any state, country or jurisdiction.
Employee further agrees, at the Company's request and expense, to do all things
and sign all documents or instruments necessary, in the opinion of the Company,
to eliminate any ambiguity as to the ownership of, and rights of the Company
to, such Inventions, including filing copyright and patent registrations and
defending and enforcing in litigation or otherwise all such rights.
Employee will not be obligated to assign to the Company any Invention
made by Employee while in the Company's employ which does not relate to any
business or activity in which the Company is or may reasonably be expected to
become engaged, except that Employee is so obligated if the same relates to or
is based on Proprietary Information to which Employee will have had access
during and by virtue of Employee's employment or which arises out of work
assigned to Employee by the Company. Employee will not be obligated to assign
any Invention which may be wholly conceived by Employee after Employee leaves
the employ of the Company, except that Employee is so obligated if such
Invention involves the utilization of Proprietary Information obtained while in
the employ of the Company. Employee is not obligated to assign any Invention
which relates to or would be useful in any business or activities in which the
Company is engaged if such Invention was conceived and reduced to practice by
Employee prior to Employee's employment with the Company, provided that all
such Inventions are listed at the time of employment on the attached Exhibit A.
12. Remedies. Employee agrees and acknowledges that the violation
of any of the covenants or agreements contained in Sections 6, 7, 8, 9, 10 and
11 of this Agreement would cause irreparable injury to the Company, that the
remedy at law for any such violation or threatened violation thereof would be
inadequate, and that the Company will be entitled, in addition to any other
remedy, to temporary and permanent injunctive or other equitable relief without
the necessity of proving actual damages.
13. Notices. Any notice or communication under this Agreement
will be in writing and sent by registered or certified mail addressed to the
respective parties as follows:
If to the Company: If to Employee:
1400 Xxxxxxxxx Tower [NAME]
Xxxxxxxxxx, Xxxxxxxx 00000 [ADDRESS]
Attn: General Counsel
14. Severability. Subject to the application of Section 7(D) to
the interpretation of Sections 7 and 8, if one or more of the provisions
contained in this Agreement is for any reason held to be invalid, illegal or
unenforceable in any respect, the same will not affect any other provision in
this Agreement, and this Agreement will be construed as if such invalid or
illegal or unenforceable provision had never been contained in this Agreement.
It is the intent of the parties that this Agreement be enforced to the maximum
extent permitted by law.
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15. Entire Agreement. This Agreement embodies the entire agreement
of the parties relating to the subject matter of this Agreement and supersedes
all prior agreements, oral or written, regarding the subject matter of this
Agreement. No amendment or modification of this Agreement will be valid or
binding upon the parties unless made in writing and signed by the parties.
16. Binding Effect. This Agreement will be binding upon the
parties and their respective heirs, representatives, successors, transferees
and permitted assigns.
17. Assignment. This Agreement is one for personal services and
will not be assigned by Employee. The Company may assign this Agreement to any
of its subsidiaries or affiliated companies; provided that such subsidiary or
affiliate fulfills the obligations of the Company under this Agreement.
18. Governing Law. This Agreement is entered into and will be
interpreted and enforced pursuant to the laws of the Commonwealth of Kentucky.
The parties agree that the appropriate forum and venue for any disputes between
any of the parties arising out of this Agreement shall be any federal court in
the Commonwealth of Kentucky and each of the parties submits to the personal
jurisdiction of any such court. The foregoing shall not limit the rights of any
party to obtain execution of judgment in any other jurisdiction. The parties
further agree, to the extent permitted by law, that a final and unappealable
judgment against either of them in any action or proceeding contemplated above
shall be conclusive and may be enforced in any other jurisdiction within or
outside the United States by suit on the judgment, a certified exemplified copy
of which shall be conclusive evidence of the fact and amount of such judgment.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
COMPANY: EMPLOYEE:
HEALTHCARE RECOVERIES, INC.
By:
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Title: [Name]
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EXHIBIT A
INVENTIONS
Employee represents that there are no Inventions.
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Employee Initials
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