EXHIBIT 10.8
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into
as of the 25th day of October, 1996 by and between Dental Care Alliance, Inc., a
Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxx, an individual
resident of the State of Florida ("Executive").
RECITALS:
A. Pursuant to the certain Assignment and Assumption Agreement dated as
of October 24, 1996 by and between the Company and each of Golden Care Network,
L.C., a Florida limited liability company ("Network") and Prophet Management of
Florida, L.C., a Florida limited liability company ("Prophet" and together with
Network, the "Predecessor Entities"), the Company accepted the transfer of all
of the Predecessor Entities' assets, subject to all debts, obligations and
liabilities of the Predecessor Entities and including, without limitation, an
employment agreement between Network and Executive dated as of January 1, 1996
having the same terms and conditions as set forth in this Agreement.
B. The Company is and the Predecessor Entities have been engaged in the
business of, among other things, providing management and consulting services to
dental offices throughout the United States (the "Business"). Executive has
particular expertise and knowledge concerning the Business and its operations.
C. The Company desires to employ Executive, and Executive desires to be
employed by the Company, subject to the terms and conditions set forth below and
this Agreement is intended by the parties to constitute a reaffirmation and
restatement of Executive's employment agreement with the Network.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. TERM. The term of this Agreement shall commence on the date hereof
and shall continue until the fifth (5th) anniversary of such date, unless
otherwise terminated in accordance with the terms hereof.
2. ENGAGEMENT AND SERVICES.
2.1 DUTIES. For the Term of this Agreement, including any and all
renewal terms hereof, unless otherwise terminated as provided herein, Executive
shall be the President and Chief
Executive Officer of the Company. In such capacity, Executive, subject to the
direction of the board of directors of the Company (the "Board"), shall
supervise the overall management and operations of the Company and its sales and
marketing activities, as well as develop business strategies for the Company.
2.2 EMPLOYMENT. During the term of this Agreement, Executive shall
devote as much of his business time, attention and efforts as reasonably
required to perform his duties as set forth in SECTION 2.1 and shall use his
best endeavors in the performance thereof, as well as to the promotion of the
general interests and welfare of the Company. As such, Executive agrees that he
will not represent, accept any other employment from or render or perform any
services for, whether or not for compensation, any employer or entity other than
the Company, which representation or employment interferes with the performance
of his duties under this Agreement or is competitive with the business of the
Company. The foregoing shall not be construed as prohibiting Executive from
making personal investments in such form or manner as will not violate the terms
of SECTION 9.
3. COMPENSATION AND RELATED MATTERS.
3.1 BASE SALARY. The base salary (the "Base Salary") of Executive
for each calendar year of this Agreement shall be Two Hundred Thousand Dollars
($200,000) (or a proportionate amount for a shorter period), payable in
installments consistent with the Company's normal payroll schedule (subject to
applicable taxes and withholdings), or such greater amount as may be determined
each year by the Company at the annual review of Executive. In addition, the
Base Salary may be adjusted from time to time by the Company to reflect salaries
paid to executives with comparable responsibilities, the quality of Executive's
performance and other merit-based considerations. In no event, however, shall
the Base Salary be decreased. Notwithstanding anything contained herein to the
contrary, nothing in this Agreement shall be deemed to require the Company to
increase Executive's Base Salary during the term of this Agreement.
3.2 BONUS. Executive shall be eligible to receive a performance
bonus for each fiscal year of this Agreement. Pursuant thereto, the Company
shall, no later than ninety (90) days following the last day of the most
recently completed fiscal year], pay to Executive, as additional incentive
compensation for the services to be rendered by Executive hereunder, assuming
Executive is then employed by the Company on such date, a performance bonus in
cash in an amount equal to the lesser of (a) ten percent (10%) of the
consolidated net income of the Company for the most recently completed fiscal
year, calculated in accordance with generally accepted accounting principles,
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consistently applied by the Company's regularly engaged independent certified
public accounts and (b) Two Hundred Thousand Dollars ($200,000). In addition to
the foregoing, Executive shall be eligible to participate in such other
performance bonus programs as may from time to time be established by the
Company for the benefit of Executive.
3.3 STOCK OPTIONS. In the event the Company adopts an employee
stock option plan for its employees, Executive shall, subject to the terms and
conditions thereof, be eligible to participate therein at a level commensurate
with Executive's position with the Company; provided, that in no event shall the
number of options granted to Executive, combined with all stock options,
warrants or other derivative securities issued by the Company to Xxxxxxx exceed
eight percent (8%) of the outstanding Common Stock as of the date of the date
hereof. It is contemplated that awards under such stock option plan will be
subject to individual and Company performance targets being attained.
4. EXPENSES.
4.1 AUTOMOBILE ALLOWANCE. Except as otherwise provided herein, the
Company shall pay to Executive, during the term of this Agreement, One Thousand
Dollars ($1,000) per month to be used by Executive, in his sole discretion, for
expenses paid or incurred by Executive in connection with the acquisition, use
and maintenance of an automobile by Executive.
4.2 RELOCATION. Except as otherwise provided herein, in the event
Executive is required by the Company to move himself and his family and their
personal property from Sarasota, Florida to any location more than one hundred
(100) miles from Sarasota, Florida (the "Other Location"), the Company shall
reimburse Executive for the following expenses:
4.2.1 The Company shall reimburse Executive for any and all
reasonable and necessary, actual out-of-pocket expenses paid or incurred by
Executive for himself and his family in connection with up to four (4)
round-trip excursions between Sarasota, Florida and the Other Location taken
solely for the purpose of locating a suitable residence in Other Location for
purchase or rental by Executive.
4.2.2 The Company shall reimburse Executive for any and all
reasonable and necessary, actual out-of-pocket expenses paid or incurred by
Executive in connection with moving Executive and his family and their personal
property from Sarasota, Florida to the Other Location. Relocation expenses that
are subject to reimbursement by the Company pursuant to this
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SECTION 4.2.2 shall include expenses incurred in connection with the following:
(a) physical packing, moving and unpacking of household
goods;
(b) up to three (3) months of storage of household
goods, if necessary;
(c) closing costs and reasonable attorney's fees (if
any) in connection with the purchase of a residence in the Other Location; and
(d) the physical transport of two (2) vehicles from
Sarasota, Florida to the Other Location.
4.3 EMPLOYMENT RELATED EXPENSE. The Company shall reimburse
Executive for all reasonable and necessary, out-of-pocket expenses paid or
incurred by Executive in connection with and in the course of the performance of
his duties under this Agreement consistent with Company policy.
4.4 DETERMINATION OF REIMBURSABLE EXPENSES. All expenses for which
reimbursement is sought pursuant to this SECTION 4 shall be supported by
receipts or other appropriate back-up documentation submitted by Executive to
the Company. Such reimbursement of expenses shall be paid by the Company to
Executive within thirty (30) days after Executive submits the receipts or other
appropriate back-up documentation therefor to the Company.
5. BENEFITS.
5.1 EMPLOYEE BENEFIT PROGRAMS. In addition to the compensation to
be paid by the Company to Executive pursuant to SECTION 3 hereof, during the
term of this Agreement, Executive shall also be entitled to receive the
following benefits: (i) participation in a comprehensive group medical and
dental insurance plan of the Company on the same basis as is provided to the
other full-time employees of the Company; (ii) participation in such other
benefit programs of the Company to the extent such programs are provided to the
other full-time employees of the Company; (iii) paid holidays given by the
Company to all of its employees; and (iv) fifteen (15) paid vacation days for
each full year of Executive's employment with the Company to be taken at such
time or times as do not interfere with Executive's duties to the Company and in
accordance with the Company's then-current policies regarding vacation time for
its full-time officers and executives.
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5.2 LIFE INSURANCE. During the term of this Agreement, the Company
agrees to maintain a life insurance policy on the life of Executive provided
Executive is then insurable, the amount of such policy to be not less than
$400,000. Executive shall have the right to designate the beneficiary of such
policy.
6. TERMINATION.
6.1 TERMINATION FOR CAUSE. Notwithstanding anything contained in
this Agreement to the contrary, the Company, by written notice to Executive,
shall at all times have the right to terminate Executive's employment hereunder
for "Cause," as hereinafter defined, effective immediately upon Executive's
receipt of the Company's written notice of such termination. For purposes of
this SECTION 6, "Cause" shall mean:
(i) Any material violation by Executive of any local, state or
federal law or regulation, provided that Executive's compliance
with such law or regulation is material to the performance of his
duties under this Agreement, or any conviction of a felony by
Executive;
(ii) Executive's refusal or willful failure to fulfill any
material duties or obligations required to be performed for the
Company hereunder for any reason, or Executive's refusal or
repeated failure to perform or adhere to the reasonable rules and
regulations of the Company established by the Company from time to
time, which refusal or failure is not cured within fourteen (14)
days after written notice thereof is given by the Company to
Executive;
(iii) Conduct involving drug addiction or habitual intoxication
where such conduct adversely affects Executive's ability to perform
his duties under this Agreement; provided that such conduct occurs
subsequent to written notice by the Company to Executive concerning
such activity; or
(iv) Any intentional theft, fraud or embezzlement committed by
Executive involving the misappropriation of Company funds or other
assets of the Company.
On the effective date of the termination of Executive for Cause
pursuant hereto, the Company shall have no further obligations or liabilities to
or for the benefit of Executive under this Agreement, except as provided in
SECTION 6.5 and SECTION 6.6 of this Agreement.
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6.2 TERMINATION IN CONNECTION WITH CERTAIN EVENTS.
(i) DEATH. Notwithstanding anything contained in this
Agreement to the contrary, Executive shall be deemed to have
terminated his employment with the Company as of the end of the
month in which Executive dies.
(ii) CHANGE IN CONTROL. In the event that (i) the Company
sells all or substantially all of its assets to a third party, or
(ii) majority control of the Company is transferred to any third
party, Executive shall have the right and option to voluntarily
terminate his employment hereunder by giving the Company at least
sixty (60) calendar days' prior written notice of his intent to so
terminate. In the event of Executive's election to so terminate his
employment hereunder pursuant to this SECTION 6.2(ii), such
employment shall immediately and automatically terminate upon the
expiration of the sixty (60) calendar day notice period, without
any further notification or action on the part of Executive, unless
Executive gives the Company reason to terminate Executive for
"Cause" in which case the effective date of termination shall be
immediate.
(iii) CONSTRUCTIVE DISCHARGE. In the event that the Company
(i) reduces or alters in any material respect Executive's
responsibilities, duties or authorities as President and Chief
Executive Officer, (ii) reduces in any material respect the
benefits and perquisites granted to Executive hereunder, (iii)
reduces or alters in any material respect, or prevents Executive
from using, the resources that he reasonably needs to competently
perform his duties hereunder or otherwise creates a hostile work
environment that makes it unreasonably difficult for Executive to
perform his duties hereunder or (iv) requires Executive to relocate
more than 30 miles outside Sarasota, Florida, Executive shall have
the right and option to voluntarily terminate his employment
hereunder by giving the Company at least sixty (60) calendar days'
prior written notice of his intent to so terminate. In the event of
Executive's election to so terminate his employment hereunder
pursuant to this SECTION 6.2(iii), such employment shall
immediately and automatically terminate upon the expiration of the
sixty (60) calendar day notice period, without any further
notification or action on the part of Executive, unless Executive
gives the Company reason to terminate
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Executive for "Cause" in which case the effective date of
termination shall be immediate.
On the effective date of the termination of Executive pursuant to this
SECTION 6.2, the Company shall have no further obligations or liabilities to or
for the benefit of Executive under this Agreement, except as provided in SECTION
6.5 and SECTION 6.6 of this Agreement.
6.3 TERMINATION WITHOUT CAUSE. Notwithstanding anything contained
in this Agreement to the contrary, the Company shall at all times have the right
to terminate Executive's employment hereunder without "Cause" and for any reason
whatsoever by giving Executive at least ninety (90) calendar days' prior written
notice of its intent to so terminate. In the event of the Company's election to
terminate Executive's employment hereunder pursuant to this SECTION 6.3 such
employment shall immediately and automatically terminate upon the expiration of
the thirty (30) calendar day notice period, without any further notification or
action on the part of the Company, unless Executive gives the Company reason to
terminate Executive for "Cause" in which case the effective date of termination
shall be immediate.
On the effective date of the termination of Executive without Cause
pursuant to this SECTION 6.3, the Company shall have no further obligations or
liabilities to or for the benefit of Executive under this Agreement, except as
provided in SECTION 6.5 and SECTION 6.6 of this Agreement.
6.4 VOLUNTARY TERMINATION BY EXECUTIVE. Notwithstanding anything
contained in this Agreement to the contrary, Executive shall at all times have
the right to voluntarily terminate his employment hereunder by giving the
Company at least sixty (60) calendar days' prior written notice of his intent to
so terminate. In the event of Executive's election to so terminate his
employment hereunder pursuant to this SECTION 6.4, such employment shall
immediately and automatically terminate upon the expiration of the sixty (60)
calendar day notice period, without any further notification or action on the
part of Executive, unless Executive gives the Company reason to terminate
Executive for "Cause" in which case the effective date of termination shall be
immediate.
On the effective date of the voluntary termination of Executive
pursuant to this SECTION 6.4, the Company shall have no further obligations or
liabilities to or for the benefit of Executive under this Agreement, except as
provided in SECTION 6.5 and SECTION 6.6 of this Agreement.
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6.5 PAYMENTS TO EXECUTIVE UPON TERMINATION.
(i) Upon the termination of Executive's employment pursuant to
SECTION 6.1, SECTION 6.2(i), SECTION 6.2(ii) or SECTION 6.4, the
Company shall be obligated to pay to Executive, and Executive shall
be entitled to receive from the Company: (i) Executive's Base
Salary, prorated for completed months of employment in the relevant
fiscal year of the Company to the effective date of termination;
(ii) accrued vacation to the effective date of termination; (iii) a
termination bonus calculated pursuant to the formula described in
SECTION 3.2 hereof prorated for the number of completed months of
employment in the relevant fiscal year of the Company to the
effective date of termination, based on the annualized net income
of the Company derived by multiplying (X) the fiscal year-to-date
(completed months only) consolidated net income of the Company as
shown in the Company's regularly prepared internal financial
statements, by (Y) the quotient obtained by dividing twelve (12)
months by the number of completed months of employment of Executive
in the relevant fiscal year in which termination of employment
occurs; (iv) any amounts for which Executive is entitled to, but
has not received, reimbursement in accordance with SECTION 4
hereof, provided that such amounts were incurred prior to the
effective date of termination; and (v) the release of, or in the
alternative thereto, the amounts(s) equal to the aggregate amount
of any personal guaranties of debts of the Company or other
entities or persons made by Executive on behalf of or at the
request of the Company or its affiliates.
(ii) Upon the termination of Executive's employment pursuant
to SECTION 6.2(iii) or SECTION 6.3, the Company shall be obligated
to pay to Executive, and Executive shall be entitled to receive
from the Company, each of the items described in SECTION 6.5(i). In
addition, the Company agrees to continue to pay the Base Salary to
Executive for the period commencing on the effective date of
termination and ending on the later to occur of (i) the second
anniversary of such date of termination or (ii) the fifth
anniversary of the date of this Agreement (the "Salary Continuation
Period"). Further, during the Salary Continuation Period, Executive
shall be entitled to such performance bonus described in SECTION
3.2 hereof that he otherwise would have been entitled to receive
had his employment by the Company not been terminated pursuant to
SECTION 6.2(iii) or SECTION 6.3.
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(iii) Upon payment to Executive of the foregoing items and
except as set forth in SECTION 6.6, the Company shall have no
further obligations or liability to or for the benefit of Executive
whatsoever.
6.5.1 Off-Set. The parties hereto agree that the Company shall
have the right to off-set from any amounts otherwise due and owing to Executive
pursuant to this Agreement, any and all undisputed amounts legitimately owed by
Executive to the Company or any of its Affiliates (as hereinafter defined),
whether pursuant to this Agreement or to any other agreement or obligation.
6.6 DEMAND REGISTRATION AND PUT RIGHT.
(i) Upon termination of Executive's employment pursuant to
SECTION 6.2(ii), SECTION 6.2(iii) or SECTION 6.3, any and all of
Executive's options, warrants or other securities exercisable or
convertible into capital stock or equity securities of the Company
("Underlying Securities") will immediately and fully vest.
Executive shall be obligated to exercise or convert into common
stock of the Company with $1.00 par value per share ("Common
Stock"), all Underlying Securities in connection with exercising
his rights pursuant to SECTION 6.6(ii)-(iii).
(ii) Upon termination of Executive's employment, for any
reason, and if, on or prior to such termination, the Company, has
consummated an initial public offering of its Common Stock,
Executive shall have the right and option to request in writing
that the Company effect the registration of any or all Common Stock
then owned by Executive and the Company will, as expeditiously as
possible, use its best efforts to effect such registration, under
the Securities Act of 1933, as amended (the "Securities Act"). In
addition, the Company shall use its best efforts to register or
qualify the Common Stock under the state securities or blue sky
laws of such jurisdictions as Executive shall reasonably request.
The demand registration rights provided for in this SECTION 6.6(ii)
shall be deemed satisfied by the Company when two (2) registration
statements shall have been filed by the Company with and made
effective by the Securities and Exchange Commission under the
Securities Act pursuant to requests made pursuant to this SECTION
6.6(ii). The Company shall have no obligation to attempt
registration of any offering of Executive's Common Stock under the
Securities Act more often than once in any twelve (12) month
period. The
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Company shall pay, to the fullest extent allowable under
applicable state securities and blue sky laws, all expenses
incurred in effecting the registrations provided for in this
SECTION 6.6(ii), including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and disbursements of one
law firm serving as counsel for Executive, underwriting expenses
(other than underwriting discounts and commissions), expenses of
any audits incident to or required by any such registration and
expenses of complying with state securities or blue sky laws.
(iii) Upon termination of Executive's employment pursuant to
SECTION 6.2(iii) or SECTION 6.3, and if, on or prior to such
termination, the Company has not consummated an initial public
offering of its Common Stock, Executive shall, upon written notice
to the Company within sixty (60) days of such termination, have the
right and option to sell to the Company, and the Company shall be
required to purchase, all but not less than all, of the Common
Stock then owned by Executive at a price equal to the (a) two (2)
times the consolidated revenue of the Company, which shall be
calculated in accordance with generally accepted accounting
principles, consistently applied by the Company's regularly engaged
independent certified public accountants, as of the calendar year
end immediately preceding the date of termination of Executive's
employment, multiplied by (b) the ratio of (X) the number of Common
Stock being sold by Executive pursuant to this SECTION 6.6 (iii) to
(Y) the total number of outstanding shares of Common Stock
calculated on a fully diluted basis as of the date of termination
of Executive is employment Payment of the purchase price for the
shares purchased pursuant to this SECTION 6.6 (iii) (the "Purchase
Price") shall be paid in cash in five consecutive equal annual
installments, the first installment due ten (10) days after the
date written notice is given to the Company pursuant to this
SECTION 6.6(iii), and the second, third, fourth and fifth
installments due on the first, second, third and fourth
anniversaries of such date; provided, however, that in the event
the Company cannot arrange using its best efforts in good faith
sufficient financing to accommodate such payment schedule, then any
such annual installment payment required to be paid by the Company
to Executive, excluding the first such installment payment, shall
be not required to exceed an amount equal to fifty percent (50%) of
the Company's
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consolidated net income before interest, taxes, depreciation and
amortization for the immediately preceding twelve (12) month period
prior to the date of such installment payment. In such event, the
installment payment period for payment of the Purchase Price
provided for herein shall be extended by such additional annual
payments as may be necessary to satisfy the obligation of the
Company to pay Executive the full amount of the Purchase Price
together with all accrued interest thereon required by this SECTION
6.6(iii). Interest shall accrue on the unpaid Purchase Price from
time to time outstanding at the rate of interest per annum equal to
the "prime" rate of interest identified from time to time by
Citibank, N.A., New York, New York or its successor, whether or not
such announced rate is the best rate available from such financial
institution.
7. WITHHOLDING. All compensation payable to Executive pursuant to this
Agreement shall be subject to customary withholding taxes and such other
employment taxes as are required under federal law or the law of any state or
governmental body to be collected with respect to compensation paid by an
employer to an employee.
8. CONFIDENTIAL INFORMATION. Executive acknowledges and agrees that he
has been given, and by virtue of his employment by the Company pursuant hereto
will be given, access to and possession of certain valuable and confidential
information, both verbal and written, Proprietary to the Company, including,
without limitation, information regarding technical and non-technical data,
compilations, programs, methods, techniques, processes and financial data, all
of which is sufficiently secret to derive economic value, actual or potential,
from not being generally known to other persons who can obtain economic value
from its disclosure or use, and which is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy or confidentiality.
Such proprietary and confidential information specifically includes, without
limitation: (a) instruction in and experience regarding the methods of operation
practiced by the Company; (b) lists of, or access to, actual or potential
customers and suppliers of the Company or the Business; (c) trade secrets; (d)
information contained in any memoranda, discussions, notes, correspondence,
surveys, investigations and the like by or between the employees of the Company;
(e) information received from employees, associates, officers or consultants
employed or retained by the Company pertaining to the Business or the general
operations of the Company; and (f) the Company's proprietary advertising and
marketing campaigns and strategies regarding the Business or the Company.
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All of such proprietary and confidential information and business
relationships, including, without limitation, that information and those
business relationships specified in this SECTION 8, are hereinafter collectively
referred to as "Confidential Information". Confidential Information, however,
shall not include any information that, through no act of Executive, has become
available to the general public. Executive shall hold in confidence and not use
or disclose, either for his own benefit or the benefit of any third party,
either during or after Executive's employment with the Company, except as
specifically authorized by the Company in writing for the Company's own benefit,
any Confidential Information that Executive may obtain or has obtained or may
create or has created during the period of Executive's employment hereunder.
Upon termination of Executive's employment with the Company for any reason,
Executive shall promptly return and deliver to the Company all documents,
manuals, letters, notes, records, reports and all other materials of a secret or
confidential nature either obtained or arising as a result of Executive's
employment hereunder, including, without limitation, any and all forms and
stages of Confidential Information, that remain in his possession. The terms of
this SECTION 8 shall survive the termination of this Agreement for whatever
reason.
9. NON-COMPETITION: NON-SOLICITATION. Executive agrees that, by virtue
of his employment with the Company, he has and will develop and obtain knowledge
and familiarity with the operations of the Company, its Affiliates and their
respective businesses, operating and marketing procedures and the identity of
their respective customers, the disclosure of which would result in a
significant economic detriment to the Company. To protect the Company, for a
period of one (1) year commencing on the effective date of termination of
Executive's employment with the Company for any reason, Executive shall not:
(i) Directly or indirectly, own, manage, operate, control or
participate in, or have any financial interest in or aid or assist
anyone in the conduct of, or otherwise engage in, any business
(whether it be a sole proprietorship, partnership, corporation or
other entity) that (a) in any way competes with the Company or its
Affiliates or any successor thereto, or their respective
businesses, or otherwise calls upon, solicits, advises, or does, or
attempts to do, business with any client, customer or patient of
the Company or any of its Affiliates or any successor thereto, and
(b) is located or operating anywhere within the defined licensed
and/or franchised-territory of the Company or any of its Affiliates
or any successor thereto, including, without limitation, any office
or location
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of any franchisee of the Company or any of its Affiliates or any
successor thereto; or
(ii) Solicit or otherwise encourage any employee of Company or
any of its Affiliates or any successor thereto to terminate his or
her employment with the Company or any of its Affiliates or any
successor thereto, or to enter into employment with any other
person, firm or corporation.
The restrictions in SECTIONS 9(i)-(ii) shall be null and void and of no
force or effect in the event that Executive is terminated without "Cause"
pursuant to SECTION 6.3 hereof.
In addition, Executive agrees that he shall not, in any way, slander,
libel or through any other improper means take any action that is intended to be
detrimental to the Company or any of its Affiliates or any successor thereto, or
their respective businesses, services, officers, personnel or operations.
For purposes of this Agreement, an "Affiliate" of an entity shall mean
any person, corporation, proprietorship, partnership, trust, limited liability
company or other business entity that, directly or indirectly, owns or controls,
is under common ownership or control with, or is owned or controlled by, such
entity. For purposes of this definition, "control" means the possession of the
power to direct or cause the direction of management and policies of such
entity, whether through the ownership of voting securities, by contract or
otherwise.
If any provision or part of this SECTION 9 is held to be unenforceable
because of the duration of such provision or the area covered thereby, Executive
agrees that the court making such determination shall have the power to modify
such provision, to reduce the duration or area of such provision, or both, or to
delete specific words or phrases herefrom ("blue-penciling,) in a manner that
would provide the greatest possible protection to the Company, and then, in its
reduced or blue-penciled form, such provision shall then be enforceable and
shall be enforced.
10. EQUITABLE REMEDIES. Executive agrees that the covenants contained
in SECTIONS 8 AND 9 hereof are vital to the viability of the Company, its
Affiliates and each of their respective businesses. In that regard, Executive
agrees that any breach of SECTION 8 OR 9 hereof would cause irreparable and
immediate harm to the Company and that money would not be an adequate remedy in
the event of any such breach. By reason of the foregoing, Executive agrees that
the Company shall be entitled to injunctive relief in the event of any breach of
SECTION 8 OR 9 hereof. In addition, Executive agrees to reimburse the Company
and its Affiliates for any and all reasonable costs and expenses
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(including, without limitation, attorneys, fees and costs) incurred by the
Company or any of its Affiliates as a result of their enforcing the terms and
provisions of this Agreement and their instituting or defending any litigation,
contest, dispute, suit or proceeding against Executive in any way relating to
this Agreement, provided that the Company prevails in such action. Nothing
herein shall prevent the Company or any of its Affiliates from electing to seek
any monetary or other relief in addition to or in lieu of any equitable relief
for breach of SECTION 8 OR 9 hereof. The failure of the Company or any of its
Affiliates to promptly institute legal action upon any such breach shall not
constitute a waiver of that or any other breach hereof.
11. NOTICES. Any notices, demands, requests, consents or approvals to
be given hereunder shall be in writing and shall be deemed given when delivered
personally to the person to whom intended, two (2) days after deposit in the
United States mail, certified, postage prepaid, return receipt requested, one
(1) day after deposit with a commercial courier sent for next day delivery, or
upon transmittal if telecopied, to the following addresses:
If to Executive, to: Xxxxxx X. Xxxxxxx
0000 Xxxxx Xxx Xxxx
Xxxxxxx, Xxxxxxx 00000
If to the Company, to: Dental Care Alliance, Inc.
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: President
Telecopier Number: (000) 000-0000
Any party hereto may change his or its address for notice by
communicating such change of address to the other party.
12. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida.
13. NONASSIGNABLE RIGHTS. This Agreement and all rights and benefits
hereunder are binding upon and shall inure to the benefit of Executive and the
Company, as well as to the benefit of the Company's successors. The obligations
of Executive hereunder are personal to Executive; accordingly, neither this
Agreement nor any right or interest of Executive herein, or arising hereunder,
shall be voluntarily or involuntarily sold, transferred or assigned by Executive
without the prior written consent of the Company or its successor in interest.
This Agreement shall be assignable by the Company, provided, however, that in
the event (i) the Company sells all or substantially all of its assets to a
third party or (ii) majority control of the
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Company is transferred to any third party, Executive shall have the right and
option to terminate his employment pursuant to SECTION 6.2.
14. SEVERABILITY. In the event that any provision of this Agreement is
determined to be invalid or unenforceable, the remaining terms and provisions of
this Agreement shall be unaffected and shall remain in full force and effect,
and any such determination of invalidity or unenforceability shall in no way
affect the validity or enforceability of any other provision of this Agreement.
15. WAIVER. No delay on the part of any party in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any waiver of
any right, power or privilege operate as a waiver of any other right, power or
privilege, nor shall any single or partial exercise of any right, power or
privilege preclude any other or further exercise thereof or of any other right,
power or privilege. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies which the parties otherwise may have
at law or in equity.
16. HEADINGS. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or construction hereof.
17. ENTIRE AGREEMENT. This instrument sets forth the entire agreement
and understanding between the parties hereto with respect to Executive's
employment by the Company and supersedes all prior and contemporaneous
discussions and agreements with respect thereto. This Agreement may only be
modified in a writing signed by both parties hereto.
18. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
DENTAL CARE ALLIANCE INC.
By: Xxxxx X. Xxxxxxx
-----------------------------
Its: Chief Financial Officer
-----------------------------
/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
-00-
XXXXXXXXX XX. 0 TO EMPLOYMENT AGREEMENT
This Amendment No. 1 to Employment Agreement (this "Amendment") is made
and entered into as of October __, 1997 by and between Dental Care Alliance,
Inc., a Delaware corporation (the "Company"), and Xx. Xxxxxx X.
Xxxxxxx, an individual resident of the State of Florida ("Executive").
RECITALS
A. The Company and Executive are parties to that certain Employment
Agreement, dated as of October 25, 1996 (the "Agreement");
B. The Company and the Executive desire to modify the terms of the
Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. AMENDMENT. The Agreement is hereby amended as follows:
(a) Section 3.2 is deleted in its entirety and the following is
substituted in lieu thereof:
3.2 PERFORMANCE PROGRAM. In respect to each fiscal year
ending during the term of Executive's employment hereunder commencing
with the fiscal year ending December 31, 1997 (but only as to the
fourth quarter of fiscal 1997), Executive shall receive as additional
compensation for services rendered to the Company an incentive bonus in
cash in an amount equal to sixty percent (60%) of an annual bonus pool
which shall be equal to fifty percent (50%) of the Company's net income
as reflected on its audited financial statements for the applicable
fiscal year (in accordance with generally accepted accounting
principles, consistently applied with prior years) in excess of the
Company's budgeted net income ("Budgeted Net Income") as determined by
the Compensation Committee of the Company for the fiscal year. For the
purposes hereof and notwithstanding anything else contained herein, if
and when any class of shares of the Company's capital stock becomes
publicly traded, Budgeted Net Income for any fiscal year or quarter
shall not be greater than the average of net income estimates of the
analysts who regularly provide estimates of the Company's net income,
as last reported prior to the commencement of the fiscal year ("Net
Income Estimates"). The bonus paid to Executive for any year may not
exceed $200,000.
The Executive shall be entitled to receive the estimated amount
of the bonus (the "Estimated Bonus Payment"), net of applicable
withholding and other
taxes, within fifteen (15) days after the end of the calculation of net
income for each quarter during the term of Executive's employment
hereunder, such Estimated Bonus Payment to be based on the Company's
net income as reflected on the Company's unaudited consolidated
financial statements as reviewed and approved by the Board for the
applicable quarter in excess of the Company's budgeted net income for
the quarter. The Estimated Bonus Payments will be subject to upward or
downward adjustment based on the Company's annual audited consolidated
financial statements (the "Adjustment"). The Adjustment shall be paid
by the Executive to the Company, or shall be paid by the Company to the
Executive, as the case may be, within fifteen (15) days of receipt of
the Company's audited consolidated financial statements. In the event
the Executive does not reimburse the Company for any Adjustment within
such fifteen-day period, the Company shall have the right to offset the
Adjustment against any other payments due to the Executive hereunder.
The bonus shall be prorated for any fiscal year during the term
of the Agreement that is less than a full fiscal year, subject to the
provisions of Section 6 of the Agreement respecting payments in the
event of termination, provided that in such event, the Estimated Bonus
Payments for any quarter shall be the actual bonus for such quarter,
unless adjustments are subsequently made to that quarter's unaudited
financial statements. In addition to the foregoing, Executive shall be
eligible to participate in such other performance bonus programs as may
from time to time be established by the Company for the benefit of
Executive.
2. MISCELLANEOUS.
(a) HEADING. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or construction hereof.
(b) REFERENCES. Any reference to the Agreement contained in any
notice, request, certificate or other document executed concurrently with or
after the execution and delivery of this Amendment shall be deemed to include
this Amendment unless the context shall otherwise require.
(c) CONTINUED EFFECTIVENESS. Notwithstanding anything contained
herein, the terms of this Amendment are not intended to and do not serve to
effect a novation as to the Agreement. The Agreement, as amended hereby, shall
remain in full force and effect.
(d) COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
(e) GOVERNING LAW. This Amendment shall be a contract made under
and governed by the laws of the State of Florida without regard to conflict of
laws principles.
2
(f) SUCCESSORS AND ASSIGNS. In the event that any provision of
this Amendment is determined to be invalid or unenforceable, the remaining terms
and provisions of this Amendment shall be unaffected and shall remain in full
force and effect, and any such determination of invalidity or unenforceability
shall in no way affect the validity or enforceability of any other provision of
this Amendment.
(g) SUCCESSORS AND ASSIGNS. This Amendment and all rights and
benefits hereunder are binding upon and shall inure to the benefit of Executive
and the Company, as well as to the benefit of the Company's successors. The
obligation of Executive hereunder are personal to Executive; accordingly,
neither this Amendment nor any right or interest of Executive herein, or arising
hereunder, shall be voluntarily or involuntarily sold, transferred or assigned
by Executive without the prior written consent of the Company or its successor
in interest.
3
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
DENTAL CARE ALLIANCE, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: CFO
Equity Holder:
/s/ XXXXXX X. XXXXXXX
-------------------------------
Xxxxxx X. Xxxxxxx
