EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into and made effective as of April 12, 1996 by
and between Los Angeles Community Dialysis, Inc., ("Employer") a California
corporation, and Xxxxxx Xxxx, M.D. ("Employee").
R E C I T A L S
WHEREAS, Employer is desirous of hiring Employee as one of its key
employees, as well as an officer and director; and
WHEREAS, Employee is willing to accept employment as an employee of
Employer; and
WHEREAS, the parties hereto desire to delineate the responsibilities of
Employee and the expectations of Employer;
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants and obligations herein contained, the parties hereto agree as follows:
AGREEMENT
1. EMPLOYMENT. Employer hereby employs Employee, and Employee hereby accepts
employment with Employer, upon the terms and conditions set forth in this
Agreement.
2. TERM OF EMPLOYMENT. The employment of Employee pursuant to the terms of
this Agreement shall commence on April 12, 1996 and shall continue for a period
of three (3) years, unless sooner terminated pursuant to the provisions hereof.
3. DUTIES.
3.1. BASIC DUTIES. Subject to the direction and control of the Board of
Directors of Employer, Employee shall serve as the Medical Director, Chief
Executive Officer and President of Employer and shall fulfill all duties and
obligations of such office.
3.2. OTHER DUTIES OF EMPLOYEE. In addition to the foregoing, Employee
shall perform such other or different duties related to those set forth in
Paragraph 3.1 as may be assigned to him from time to time by Employer; PROVIDED,
HOWEVER, that any such additional assignment shall be at a level of
responsibility commensurate with that set forth in Paragraph 3.1 and PROVIDED,
FURTHER, that Employee may serve, or continue to serve, on the boards of
directors of, and hold any other offices or positions in, companies or entities
that in the judgment of Employer will not
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present any conflict of interest with Employer or any of its operations or
adversely affect the performance of Employee's duties pursuant to this
Agreement.
3.3. TIME DEVOTED TO EMPLOYMENT. Employee shall devote such time to the
business of Employer during the term of this Agreement as the Board of Directors
of Employer deem necessary to fulfill his obligations hereunder.
3.4. PLACE OF PERFORMANCE OF DUTIES. The services of Employee shall be
performed at Employer's principal place of business in Los Angeles, California
and at such other locations as shall be designated from time to time by
Employer.
4. COMPENSATION AND METHOD OF PAYMENT. As compensation under this Agreement,
Employer shall pay and Employee shall accept the following:
4.1. BASIC SALARY. As base compensation for services rendered pursuant to
this Agreement, measured from the effective date hereof, of one hundred twenty
thousand dollars ($120,000), payable bi-monthly or otherwise in accordance with
Employer's payroll practices for all other employees, with such upward
adjustments as may be approved from time to time by the Board of Directors of
Employer. Such adjustments may be based on the performance of Employer, the
value of Employee to Employer or any other factors considered relevant by
Employer.
4.2. INCENTIVE COMPENSATION. For each year, such bonus, supplemental or
incentive compensation as may be approved in good faith by independent members
of the Board of Directors of Employer.
4.3. EXPENSE REIMBURSEMENT. Reimbursement of such expenses as are
reasonable and necessary, in the judgment of the Board of Directors, for
Employee's performance of his responsibilities under this Agreement. Employer
shall pay in cash the reimbursement of such expenses provided in this Section
4.3.
4.4. FRINGE BENEFITS AND LOAN TO EMPLOYEE. Participation in Employer's
employee fringe benefit programs in effect from time to time for employees at
comparable levels of responsibility. Participation will be in accordance with
any applicable policies adopted by Employer. Employee shall be entitled to
vacations, absences for illness, and to similar benefits of employment to the
extent such benefits are generally available to employees of Employer at a
comparable level of responsibility, and subject to such policies and procedures
as may be adopted by Employer. Without limiting the generality of the
foregoing, it is initially anticipated that such benefits of employment shall
include three (3) weeks' vacation during each 12-month period of employment with
Employer (which shall accrue monthly on a PRO RATA basis and which shall be
carried forward for a period not to exceed three (3) years
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and otherwise in accordance with Employer's policies); major medical and health
insurance; officers' and directors' liability insurance; and stock option plans
for members of the Board of Directors. Employer further agrees that in the
event it offers disability insurance to its employees, Employer shall arrange
for Employee to be covered by similar insurance. Employer and Employer's
parent, Xxxxxxx, Inc., shall make no loans to Employee or affiliates of Employee
without such loans being approved in writing by a committee consisting of at
least two non-employee, outside member of the Board of Directors of Employer.
5. TERMINATION OF AGREEMENT.
5.1. BY NOTICE. This Agreement, and the employment of Employee hereunder,
may be terminated by Employee or Employer upon ninety (90) days' written notice
of termination; PROVIDED, HOWEVER, in the event Employer terminates this
Agreement for any reason other than the occurrence of any of the events set
forth in Section 5.2, Employee shall be entitled to receive the balance of the
unpaid base salary which would otherwise be payable to Employer during the
remainder of the term of this Agreement within thirty (30) days after such
ninety (90) day notice period.
5.2. OTHER TERMINATION. This Agreement, and the employment of Employee
hereunder, shall terminate immediately upon the occurrence of any one of the
following events:
(1) The death of Employee.
(2) The loss by Employee of legal capacity.
(3) The failure by Employee to devote substantially all of his
available professional time to the business of Employer or the
wilful and habitual neglect of duties.
(4) The willful engaging by Employee in an act of dishonesty
constituting a felony under the laws of the state in which
Employer's principal place of business is located, resulting or
intending to result in gain or personal enrichment at the expense
of Employer or to the detriment of Employer's business and to
which Employee is not legally entitled.
(5) The continued incapacity in excess of one hundred eighty (180)
days on the part of Employee to perform his duties, unless waived
by Employer.
(6) The mutual written agreement of Employee and Employer.
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(7) Upon the expiration of the term of this Agreement.
(8) The involuntary termination of Employee as a
director of Employer.
(9) Employee's breach of this Agreement.
5.3. EFFECT OF TERMINATION ON COMPENSATION. In the event of the
termination of Employee's employment pursuant to this Agreement prior to the
completion of the term of employment specified herein, Employee shall be
entitled to the compensation earned by him (including any bonuses pursuant to
Paragraph 4.4) prior to the date of such termination as provided in this
Agreement. Employee shall be entitled to no further compensation, in the nature
of severance pay or otherwise, upon the termination of his employment pursuant
to the provisions of this Agreement.
5.4. REMEDIES. No termination of the employment of Employee pursuant to
the terms of this Agreement shall prejudice any other remedy to which any party
to this Agreement may be entitled either at law, in equity, or under this
Agreement.
6. PROPERTY RIGHTS AND OBLIGATIONS OF EMPLOYEE.
6.1. TRADE SECRETS. For purposes of this Agreement, "trade secrets" shall
include, without limitation, any and all financial, cost and pricing information
and any and all information contained in any drawings, designs, plans,
proposals, customer lists, records of any kind, data, formulas, specifications,
concepts or ideas, where such information is reasonably related to the business
of Employer and has not previously been publicly released by duly authorized
representatives of Employer or otherwise lawfully entered the public domain.
6.2. PRESERVATION OF TRADE SECRETS. Employee will preserve as
confidential all trade secrets pertaining to Employer's business that have been
or may be obtained or learned by him by reason of his employment or otherwise.
Employee will not, without the written consent of Employer, either use for his
own benefit or purposes or disclose or permit disclosure to any third parties,
either during the term of his employment hereunder or thereafter (except as
required in fulfilling the duties of his employment), any trade secret connected
with the business of Employer.
6.3. TRADE SECRETS OF OTHERS. Employee agrees that he will not disclose
to Employer or induce Employer to use any trade secrets belonging to any third
party.
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6.4. PROPERTY OF EMPLOYER. Employee agrees that all documents, reports,
files, analyses, drawings, designs, tools, equipment, plans (including, without
limitation, marketing and sales plans), proposals, customer lists, computer
software or hardware, and similar materials that are made by him or come into
his possession by reason of his employment with Employer are the property of
Employer and shall not be used by him in any way adverse to Employer's
interests. Employee will not allow any such documents or things, or any copies,
reproductions or summaries thereof to be delivered to or used by any third party
without the specific consent of Employer. Employee agrees to deliver to the
Board of Directors of Employer or its designee, upon demand, and in any event
upon the termination of Employee's employment, all of such documents and things
which are in Employee's possession or under his control.
6.5 NONCOMPETITION BY EMPLOYEE. During the term of this Agreement, and
for a period of one (1) year following the termination of this Agreement,
Employee shall not, directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, principal stockholder, corporate officer,
director, or in any other individual or representative capacity: (i) engage or
participate in any business that is in competition in any manner with the
business of Employer; (ii) divert, take away or attempt to divert or take away
(and during the one year period, call on or solicit) any of Employer's clients
within the United States (for purposes of this Agreement, the term "Employer's
clients" shall mean clients who had a business relationship with Employer prior
to Employee's employment with Employer and those who develop a business
relationship with Employer, during Employee's employment with Employer); (iii)
undertake planning for or organization of any business within the United States
or in any other country in which Employer is engaged in business activity
competitive with Employer's business within the United States or in any other
country in which Employer is engaged in business or combine or conspire with
employees or other representative of Employer's business within the United
States or in any other country in which Employer is engaged in business for the
purpose of organizing any such competitive activity within the United States or
in any other country in which Employer is engaged in business; or (iv) induce or
influence (or seek to induce or influence) any person who is engaged as an
employee, agent, independent contractor or otherwise by Employer within the
United States or in any other country in which Employer is engaged in business
to terminate his or her employment or engagement.
6.6 SURVIVAL PROVISIONS AND CERTAIN REMEDIES. Unless otherwise agreed to
in writing between the parties hereto, the provisions of this Section 6 shall
survive the termination of this Agreement. The covenants in this Section 6
shall be construed as separate covenants and to the extent any covenant shall be
judicially unenforceable, it shall not affect the enforcement of
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any other covenant. In the event Employee breaches any of the provisions of
this Section 6, Employee agrees that Employer shall be entitled to injunctive
relief in addition to any other remedy to which Employer may be entitled.
7. GENERAL PROVISIONS.
7.1. NOTICES. Any notices or other communications required or permitted
to be given hereunder shall be given sufficiently only if in writing and served
personally or sent by certified mail, postage prepaid and return receipt
requested, addressed as follows:
If to Employer: Los Angeles Community Dialysis, Inc.
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
If to Employee: Xxxxxx Xxxx, M.D.
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
However, either party may change his/its address for purposes of this Agreement
by giving written notice of such change to the other party in accordance with
this Paragraph 7.1. Notices delivered personally shall be deemed effective as
of the day delivered and notices delivered by mail shall be deemed effective as
of three days after mailing (excluding weekends and federal holidays).
7.2. CHOICE OF LAW. Except as expressly provided otherwise in this
Agreement, this Agreement shall be governed by and construed in accordance with
the laws of the State of California.
7.3. ENTIRE AGREEMENT; MODIFICATION AND WAIVER. This Agreement supersedes
any and all other agreements, whether oral or in writing, between the parties
hereto with respect to the employment of Employee by Employer and contains all
covenants and agreements between the parties relating to such employment in any
manner whatsoever. Each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, oral or written, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding. Any modification of this
Agreement shall be effective only if it is in writing signed by the party to be
charged. No waiver of any of the provisions of this Agreement shall be deemed,
or shall constitute, a waiver of any other provision, whether or not similar,
nor shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
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7.4. ASSIGNMENT. Because of the personal nature of the services to be
rendered hereunder, this Agreement may not be assigned in whole or in part by
Employee without the prior written consent of Employer. However, subject to the
foregoing limitation, this Agreement shall be binding on, and shall inure to the
benefit of, the parties hereto and their respective heirs, legatees, executors,
administrators, legal representatives, successors and assigns.
7.5. SEVERABILITY. If for any reason whatsoever, any one or more of the
provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable, or invalid as applied to any particular case or in all cases,
such circumstances shall not have the effect of rendering any such provision
inoperative, unenforceable, or invalid in any other case or of rendering any of
the other provisions of this Agreement inoperative, unenforceable or invalid.
7.6 CORPORATE AUTHORITY. Employer represents and warrants as of the date
hereof that Employer's execution and delivery of this Agreement to Employee and
the carrying out of the provisions hereof have been duly authorized by
Employer's Board of Directors and authorized by Employer's shareholders and
further represents and warrants that neither the execution and delivery of this
Agreement, nor the compliance with the terms and provisions thereof by Employer
will result in the breach of any state regulation, administrative or court
order, nor will such compliance conflict with, or result in the breach of, any
of the terms or conditions of Employer's Articles of Incorporation or Bylaws, as
amended, or any agreement or other instrument to which Employer is a party, or
by which Employer is or may be bound, or constitute an event of default
thereunder, or with the lapse of time or the giving of notice or both constitute
an event of default thereunder.
7.7. ATTORNEYS' FEES. In any action at law or in equity to enforce or
construe any provisions or rights under this Agreement, the unsuccessful party
or parties to such litigation, as determined by the courts pursuant to a final
judgment or decree, shall pay the successful party or parties all costs,
expenses, and reasonable attorneys' fees incurred by such successful party or
parties (including, without limitation, such costs, expenses, and fees on any
appeals), and if such successful party or parties shall recover judgment in any
such action or proceedings, such costs, expenses, and attorneys' fees shall be
included as part of such judgment.
7.8. COUNTERPARTS. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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7.9. HEADINGS AND CAPTIONS. Headings and captions are included for
purposes of convenience only and are not a part hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first written above at Los Angeles, California.
"Employer"
LOS ANGELES COMMUNITY DIALYSIS, INC.
a California corporation
By: /s/ Xxxxxx X. Xxxx
-----------------------------
NAME: Xxxxxx X. Xxxx
TITLE: Secretary and C.F.O.
"Employee"
By: /s/ Xxxxxx Xxxx, M.D.
---------------------------------
Xxxxxx Xxxx, M.D.
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