Exhibit 10.46.1
AMERIPATH FLORIDA, INC.
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT (the "Agreement") dated and effective as of December
1, 1997, by and between AMERIPATH FLORIDA, INC., a Florida corporation (the
"Company") and XXXXXX X. XXXXX, XX., M.D. (the "Employee").
WHEREAS, prior to the date hereof, the Employee served as an employee of
and rendered professional services, as a Doctor of Medicine specializing in
Pathology, to Laboratory Physicians, Jacksonville, P.A. ("ELAB") providing
pathology services. Pursuant to a certain Stock Purchase Agreement (the
"Purchase Agreement") dated and effective as of December 1, 1997, which is an
otherwise validly enforceable agreement by and among AmeriPath, Inc., a Delaware
corporation ("AmeriPath"), ELAB and the Shareholders of ELAB, including the
Employee , all of the capital stock of ELAB has been purchased by and sold,
transferred and conveyed to AmeriPath and the Company (the "Acquisition"),
effective the date hereof (ELAB's business segment shall be referred to herein
as the "Jacksonville Division" of the Company).
WHEREAS, accordingly, and in connection with the transactions and
agreements referred to above, the Employee has agreed to terminate his
employment with ELAB and to become employed by and render professional services
to the Company as the Managing Director of the Jacksonville Division and as a
Doctor of Medicine specializing in Pathology, and the Company has agreed to
engage the Employee to render such services on the Company's behalf, in each
case on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, for and in consideration of the foregoing premises and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Employee and the Company, intending to be legally bound,
hereby agree as follows:
1. Employment. Subject to the terms and conditions of this Agreement, the
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Company shall employ the Employee to render professional services to the Company
as the Managing Director of the Jacksonville Division and as a Doctor of
Medicine specializing in Pathology, and the Employee accepts such employment and
such position. The Employee has terminated his employment with ELAB.
2. Term. The Company shall employ the Employee for a period commencing
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the date hereof and ending on November 30, 2002, subject to termination prior to
such date pursuant to Section 15 or 17 hereof. At the end of such five (5) year
period, this Agreement will automatically continue in effect for additional one
(1) year terms, on terms no less favorable to the Employee than those contained
herein, unless either party hereto gives written notice to the other party at
least sixty (60) days prior to the end of such term (or any extension thereof)
of such party's determination to terminate this Agreement. If such notice is
given, then the Employee's employment will terminate at the end of such term (or
on such other date as the parties mutually agree). If such notice is not given,
then the Employee's employment will continue hereunder for an additional year,
subject to termination prior to such date pursuant to
Section 15 or 17 hereof. The parties agree to begin negotiating the terms of
each renewal hereunder no less than six (6) months in advance of the expiration
of the current term.
3. Duties and Performance. The Employee agrees to devote the Employee's
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best efforts and full professional time to providing services in the practice of
medicine on the Company's behalf, and the Employee shall maintain the Company's
standards and professional ethics and those of the medical profession. In
addition to rendering professional services as the Company's employee and
Managing Director of the Jacksonville Division, the Employee is also expected as
part of the Employee's duties as the Company's employee to engage in marketing
activities designed to promote the Company's practice, as well as administrative
and compliance activities, all as directed by the Board of Directors of the
Company. The Employee's marketing responsibilities shall be directed at
developing the Company's business in the Florida counties of Xxxxx, St. John's,
Clay, Bradford, Union, Xxxxx, Nassau and Xxxxxx and the Georgia counties of
Camden, Brantley, Xxxx and Xxxxxxxx (collectively these Florida and Georgia
counties referred to herein as the "Jacksonville Territory"). Except as may be
permitted in writing by the Company or otherwise provided herein, the Employee
is not to practice medicine other than with the Company during the term of this
Agreement (and thereafter, pursuant to Section 20 hereof), nor is the Employee
to engage in any other gainful occupation without the Company's prior written
consent. Notwithstanding, the Employee may engage in the practice of medicine in
the course of the Employee's duties as a member of the U.S. Military, either
active or reserve, or the National Guard. To the extent that such activities do
not interfere with the Employee's full time service to the Jacksonville Division
of AmeriPath, the Employee may also engage in the activities indicated in the
last sentence of Section 20(b)(2) hereof, engage in personal investment
activities (not otherwise in conflict with the terms of this Agreement),
including serving on the Board of Directors of Medical Equities Partners, and
participate in community activities. Additional duties of the Employee are set
forth below in this Agreement. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, NOTHING SHALL IMPAIR THE INDEPENDENT MEDICAL JUDGMENT OF THE
EMPLOYEE.
4. Qualifications and Licensure. The Employee shall at all times during
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the term of this Agreement: (i) be certified by the American Board of Pathology
in anatomic pathology or be Board Eligible; (ii) maintain an unlimited and
unrestricted license to practice medicine in the State of Florida; (iii)
maintain appropriate medical staff membership and privileges at all medical
facilities presently served or serviced by the Employee, and use his best
efforts to gain and maintain appropriate medical staff membership and privileges
at any additional medical facilities identified by the Company; (iv) comply with
the Florida Board of Medicine and the Company's continuing medical education
("CME") requirements; (v) carry out the Employee's responsibilities on a
professional, ethical and diligent basis in order to serve the best interests of
the Company's patients, customers and clients; and (vi) comply with such other
requirements applicable to all of the Company's physician employees as the Board
of Directors of the Company may hereinafter reasonably impose, including without
limitation the Company's rules, regulations, policies and procedures (the "Rules
and Regulations") to the extent that such Rules and Regulations are reasonable
and do not conflict with the Employee's rights provided by this Agreement.
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5. Medical Facilities; Location. The Employee will accept assignment for
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duty in any reasonable location within the Jacksonville Territory in which the
Company renders pathology services during the term of this Agreement and to
perform such duties as the Company may reasonably direct. In the event that
Employee is relocated, the Company shall pay Employee's reasonable moving costs.
6. Conformity with Laws, Rules, Regulations and Policies. In performing
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the Employee's duties under this Agreement, the Employee shall comply with (i)
all applicable laws, rules and regulations, ordinances and standards of any
governmental, quasi-governmental or private authority having either mandatory or
voluntary jurisdiction over the Company, the Employee, or any medical facility
for which the Employee provides services, (ii) the written bylaws, rules and
regulations, policies and procedures of any such medical facility, including,
without limitation, the residential boundary requirements of such hospitals or
medical facilities, and (iii) the Company's Rules and Regulations to the extent
that the foregoing are reasonable and do not conflict with the Employee's rights
provided by this Agreement.
7. Salary; Fringe Benefits. During the term of the Employee's employment
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under this Agreement, in consideration for all services rendered for and on
behalf of the Company, the Employee shall be entitled to receive a salary at the
annual rate of $250,000 payable in accordance with the Company's regular payroll
practices in effect from time to time. In addition to the Employee's salary, the
Employee will also be entitled to fringe benefits comparable to those which the
Company provides to other physician employees having tenure, experience,
specialties, responsibilities, educational background and other qualifications
similar to those of the Employee. The Employee's hours shall be reasonable and
comparable to other like physicians in similar positions within the Company.
Employee shall be eligible to receive an annual award of options to purchase
10,000 shares (to be appropriately adjusted for stock dividends, splits, etc.),
or such other amount as determined by the Board of Directors of AmeriPath, of
AmeriPath common stock, in accordance with the terms and provisions of
AmeriPath's Stock Option Plan. Such awards of stock options shall be based on
the achievement of certain EBIT targets referenced in the Purchase Agreement and
shall be subject to the discretion of AmeriPath's Board of Directors; however,
if AmeriPath's Board of Directors does approve the grant, Employee shall receive
his designated share of stock options.
8. Reimbursement of Expenses.
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Upon submission of proper documentation and approval, the Company will
reimburse the Employee's reasonable expenses incurred in connection with the
Employee's employment by the Company, subject to compliance with reimbursement
policies from time to time adopted by the Company. Reimbursable expenses,
subject to prior approval, include:
(a) License fees and membership dues in professional
organizations.
(b) The Employee's necessary travel, room, board and other
expenses incurred in providing services at the Company's request or
otherwise for the benefit of the Company.
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(c) The Employee's business expenses if ordinary and necessary
and in furtherance of the Company's business.
(d) Expenses with respect to CME and subscriptions to
professional and business journals and books.
(e) Promotional expenses of the type and nature as historically
made by the Jacksonville Division not to exceed $45,000 per calendar year.
9. Malpractice Insurance.
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(a) While the Employee is Employed by the Company. The Company shall
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maintain policies of professional liability insurance on the Employee (including
coverage for prior acts) and the Company's other employees in such amounts and
on such terms as the Company may determine; provided that such amounts of
coverage shall be equal to or greater than $ 1,000,000 per occurrence/$
5,000,000 in the aggregate per physician and the Company will maintain surplus
levels of coverage of $5,000,000 and $10,000,000 with limits in the aggregate of
$16,000,000 and $20,000,000. The Employee shall use all reasonable best efforts
to comply with any requirements or standards imposed on the Employee or the
Company by the terms of the insurance, and the Employee shall furnish such
information as the insurer or the Company shall require. The Company shall
advise the Employee of any changes with respect to the insurer or the insurance
coverages as set forth herein. The Employee may recommend counsel to handle
medical malpractice claims, subject to the prior written approval of the
insurer.
(b) Tail Coverage.
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(1) If the Employee's employment is terminated for cause (as
defined in Section 15 hereof) or if the Employee terminates his employment
with the Company for any reason, other than for the death or Disability (as
defined in Section 17(b)) of the Employee, then, except as hereinafter
provided, the Company shall have the option, but not the obligation, of
purchasing malpractice insurance "tail" coverage, for the period of the
applicable statute of limitations, to provide coverage for the Employee's
professional acts prior to the date of termination. If the Company acquires
this "tail" coverage, its reasonable cost shall be borne and paid by the
Employee. If the Employee fails to provide and pay for such tail coverage,
then the Company shall have the right to obtain such tail coverage and
deduct and set-off its cost from payments otherwise payable to the
Employee.
(2) If the Employee's employment terminates for any reason other
than those set forth in (1) above, including, but not limited to, the
Company's decision not to renew this Agreement, the Company, at its sole
cost and expense, shall obtain "tail" coverage. Notwithstanding the
foregoing, if, after termination of employment, the Employee continues in
the practice of medicine and maintains malpractice insurance that includes
coverage for the Employee's acts prior to termination of employment, then
the Employee shall cause the Company to be a named insured as to those
prior acts.
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10. Fees; Payments. The Company has, and hereby reserves, the sole and
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exclusive authority to determine the fees (or a procedure for establishing the
fees) to be charged to the Company's patients, customers and clients. Except as
otherwise contemplated herein, all fees for professional services rendered by
the Employee during the term of this Agreement shall be the Company's sole and
exclusive property (subject to the contract rights of certain third parties).
If, for any reason, any checks or other payments for such services due to the
Company are made payable to the Employee, the Employee will endorse and deliver
those checks or payments to the Company. The Employee also hereby authorizes the
Company to endorse and negotiate on the Employee's behalf any such checks or
payments. In addition, the Employee agrees, upon the Company's request, to
account to the Company for any such fees which may have been received by the
Employee.
11. Acceptance of Patients/Referrals of Business. The Company shall have
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the sole and exclusive authority to determine who will be accepted as patients
of the Company's practice and to designate, and establish a procedure for
designating, which professional employee of the Company will handle each such
patient. The Company will direct all new business clients and opportunities
within the Jacksonville Territory to the Jacksonville Division and all specimens
originating from the Jacksonville Territory (other than those accounts currently
handled by existing AmeriPath facilities within the Jacksonville Territory) will
be directed to the Jacksonville Division; provided, however, that if a client
requests that it be serviced by another division of AmeriPath, or if the
Jacksonville Division is unable to service the client, the client will be
referred to another division of AmeriPath.
12. Professional Rules and Regulations. The Company shall at all times
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have the exclusive authority to establish reasonable professional policies and
procedures to be followed by the Employee in rendering professional services on
the Company's behalf, and the Employee agrees to follow the Rules and
Regulations established by the Company from time to time to the extent that such
Rules and Regulations are reasonable and do not conflict with the Employee's
rights provided by this Agreement. The Rules and Regulations shall, where
applicable and appropriate, be applied on a consistent basis to all of the
Company's physician employees.
13. Medical Records as Company Property. All medical records, charts, case
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histories, x-rays, specimens, tissue samples and lab reports and analyses of or
concerning patients of the Company ("Medical Records") received by the Employee
shall be and remain the Company's property. During the term of this Agreement
and thereafter, the Employee will comply with all of the Company's Rules and
Regulations regarding confidentiality of the Medical Records. The Employee shall
have the right to copies of such Medical Records that are necessary for defense
of litigation or are required for patients.
14. Paid Vacation and Time Off. The Employee shall be entitled to a total
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of four (4) weeks of paid leave time per year (pro rated for any period of
employment of less than an entire year), said leave time to include vacation
time and other time off and to exclude such time as may be taken by the Employee
to satisfy the Employee's applicable CME requirements, up to a maximum of two
(2) weeks per year. All leave time must be coordinated to ensure adequate
coverage of the Company's patients, customers and clients. All paid leave time
must be taken during the year in which it is earned and available, and thus will
not be carried forward or usable
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in any subsequent year. No cash payments will be made by the Company in respect
of any earned but unused paid leave time.
15. Termination of Agreement.
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(a) Termination for Cause. The Company may, in its sole and absolute
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discretion, terminate the employment of the Employee hereunder, at any time
prior to the expiration of the Employee's employment term(s) hereunder,
immediately upon written notice to the Employee, or at such later time as the
Company may specify in such notice, if such termination is for "cause". As used
in this Agreement, the term "cause" means as follows:
(1) If the Employee is terminated or suspended for any period of
time from Medicare, Medicaid or any state or federally funded program and
such termination or suspension shall continue for a period of thirty (30)
days after notice thereof by the Company;
(2) If the Employee's right to practice medicine in any state is
suspended, restricted, revoked, lapsed (other than a lapse due to the
Employee's voluntary failure to maintain such license after becoming a
nonresident of that state);
(3) If the Employee (i) willfully damages the Company's
property, business, reputation or goodwill (ii) steals from the Company,
(iii) commits fraud or (iv) embezzles;
(4) If the Employee is convicted of a crime involving moral
turpitude or any felony;
(5) If the Employee is continually inattentive to, or neglectful
of, the duties to be performed by the Employee, which inattention or
neglect is not the result of illness or injury, and such inattentiveness or
neglectfulness shall continue for a period of thirty (30) days after
written notice thereof by the Company;
(6) If, the Employee uses any mood altering or controlled
substances except as prescribed by a physician, or if the Employee uses
alcohol to excess;
(7) If the Employee willfully injures any independent
contractor, employee, or agent of the Company, or willfully injures any
person in the course of the performance of services for or on behalf of the
Company;
(8) If the Employee's medical staff privileges or membership in
any medical facility are suspended, restricted, revoked (other than a
revocation occurring solely because the Employee has voluntarily ceased to
perform medical services at such hospital with the Company's consent or
such other restriction which does not materially impact the Employee's
performance of his obligations under this Agreement), placed under
probation, proctoring or observation and case review;
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(9) If a guardian or conservator for the Employee is appointed
by a court of competent jurisdiction;
(10) If the Employee sexually harasses any employee or contractor
of the Company or commits any act which otherwise creates an offensive work
environment for employees or contractors of the Company and such conduct
persists after receiving notice thereof from the Company.
(11) The Employee's failure for any reasons to maintain the
Employee's board certification in the medical specialty of Pathology
provided that such failure has a material adverse impact on the Employee's
ability to perform his duties under this Agreement;
(12) If the Employee fails to comply with any of the terms or
conditions of this Agreement and such failure to comply shall continue for
a period of thirty (30) days after notice thereof by the Company.
(13) If the Employee accepts other employment that places
restrictions or limitations on the Employee's ability to continue rendering
professional services under this Agreement;
(14) The Company reasonably believes that the Employee has
furnished deceptive or fraudulent information in the Employee's application
for credentialing or recredentialing;
(15) The Employee engages in criminal, unethical or fraudulent
conduct or engages in conduct which adversely affects the Company, or the
Employee is found guilty of such conduct by any entity or governmental
agency of competent jurisdiction; provided, however, with respect to
paragraphs (5) and (6) above, the Company shall have provided the Employee
with written notice specifying the objectionable behavior, and, within
thirty (30) days of receipt of the notice, the Employee shall have failed
to cure such behavior or, in the sole judgment of the Company, as the case
may be (as set forth above), failed to demonstrate reasonable progress
towards curing such behavior.
Where notice by the Company is required pursuant to a particular clause of
this Section 15(a), the Employee shall be given an opportunity to cure between
the date of receipt of such notice and the expiration of 30 days from such date.
The Company shall not be limited to termination as a remedy for any damaging,
injurious, improper or illegal act by the Employee, but may also seek damages,
injunction, or such other remedy as the Company may deem appropriate under the
circumstances. If the Employee's employment is terminated for cause, the Company
shall pay Employee his salary and benefits hereunder through the effective date
of termination of employment, and Employee agrees to vacate the Company's
offices on or before the effective date of the termination and to return and
deliver to the Company at such time all Company property.
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(b) Termination by the Employee. Provided that the Company does not
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have "cause" to terminate the Employee pursuant to subsection "a" above, the
Employee may terminate the Employee's employment with the Company hereunder at
any time and for any reason; provided, however, the Employee must provide to the
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Company written notice of such determination not less than 120 days prior to the
date such termination is to be effective or as required by Section 2 hereof, and
the Employee shall be entitled to receive and be paid solely the Employee's
salary then in effect, through the effective date of such termination, payable
during such period at the Company's regular and customary intervals for the
payment of salaries as then in effect, and the Company shall have no further
obligation or liability to the Employee hereunder.
(c) Termination by the Company without Cause. The Company may, in its
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sole and absolute discretion, terminate the employment of the Employee
hereunder, at any time prior to the expiration of the Employee's employment
term(s) hereunder, without "cause" (as such term is defined in subsection (a)
above), or otherwise without any cause, reason or justification, provided that
the Company provides to the Employee at least sixty (60) days' prior written
notice (the "Termination Notice") of such termination. In the event of any such
termination by the Company, (i) the Employee's employment with the Company shall
cease and terminate on the date specified in the Termination Notice (or, if no
date is so specified, on the date which is 60 days following the date of such
notice), and (ii) the Employee shall be entitled to receive and be paid solely
the Employee's salary and other benefits then in effect, through the date which
is the later of (x) November 30, 2000, or (y) one year following the termination
date specified in the Termination Notice (or, if earlier, one year following the
date of such notice), payable during such year at the Company's regular and
customary intervals for the payment of salaries and benefits as then in effect,
and the Company shall have no further obligation or liability to the Employee
hereunder.
16. The Employee's Duties upon Expiration or Termination. If this
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Agreement expires or is otherwise terminated for any reason:
(a) Unless the Employee and the Company otherwise agree in writing,
the Employee will immediately resign from all (i) director, officer, fiduciary
and/or trustee positions held with the Company, and (ii) staff and similar
privileges at any medical facility for which the Company has rendered medical
services at any time during the two-year period prior to the expiration or
termination of this Agreement.
(b) The Employee will immediately return to the Company all books and
records of the Company in the Employee's possession, including, but not limited
to, books and records relating to pathology services rendered by the Employee
under this Agreement, Medical Records, meeting minutes, board summaries and
financial reports or data.
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17. Termination of Employment Upon Death or Disability.
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(a) Death of the Employee. In the event that the Employee shall die
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during the term of his employment under this Agreement, the Employee's
employment with the Company shall immediately cease and terminate and the
Employee's estate, heirs (at law), devisees, legatees or other proper and
legally-entitled descendants, or the personal representative, executor,
administrator or other proper legal representative on behalf of such
descendants, shall be entitled to receive and be paid solely the Employee's
salary, then in effect, for a period of 60 days, payable at the Company's
regular and customary intervals for the payment of salaries as then in effect,
and the Company shall have no further obligation or liability under this
Agreement (other than for any reimbursement of reasonable out-of-pocket business
expenses properly incurred by the Employee prior to his death and documented to
the Company in accordance herewith). Any stock options of Employee that have
vested by their terms as of the date of Employee's death may be exercised by
Employee's estate in accordance with the terms of such options.
(b) Disability of the Employee. In the event that the Employee
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becomes incapacitated during the term of his employment hereunder by reason of
sickness, accident or other mental or physical disability such that he is
substantially unable to perform his duties and responsibilities hereunder for a
period of 60 consecutive days, or for shorter or intermittent periods
aggregating 90 days during any 12-month period (a "Disability"), the Company
thereafter shall have the right, in its sole and absolute discretion, to
terminate the Employee's employment under this Agreement by sending written
notice of such termination to the Employee or his legal guardian or other proper
legal representative and thereupon his employment hereunder shall immediately
cease and terminate. In the event of any such termination, the Employee shall be
entitled to receive and be paid solely his salary, then in effect, for a period
of 60 days, payable at the Company's regular and customary intervals for the
payment of salaries as then in effect, less any amounts, payments or benefits
the Employee receives under the Company's disability insurance policy for such
time period, and the Company shall have no further obligation or liability under
this Agreement (other than for any reimbursement of reasonable out-of-pocket
business expenses properly incurred by Employee prior to his Disability and
documented to the Company in accordance herewith). Any stock options of Employee
that have vested by their terms as of the date of Employee's termination by
reason of Disability may be exercised by Employee or his guardian in accordance
with the terms of such options.
18. Limitations on Authority. Unless the Company has given the Employee
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its express written consent and except as otherwise in the ordinary course of
business, the Employee has absolutely no authority to:
(a) Pledge the credit or assets of the Company (or any Affiliate of
the Company) or of any of the Company's other employees.
(b) Bind the Company (or any Affiliate of the Company) under any
contract, agreement, note, mortgage or other instrument (other than routine
purchase orders in the ordinary course of business consistent with the Company's
practices).
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(c) Release or discharge any debt due the Company (or any Affiliate
of the Company).
(d) Sell, mortgage, transfer or otherwise dispose of any of the
Company's assets (or any assets of any Affiliate of the Company).
19. Representations of Employee. The Employee represents and warrants at
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all times during the term of this Agreement that:
(a) The Employee is duly licensed and registered and in good standing
under the laws of the State of Florida to engage in the practice of medicine,
and that said license and registration have not been suspended, revoked or
restricted in any manner.
(b) The Employee is qualified for and has obtained, or has applied
for, membership in good standing on the medical staff of each hospital in which
such privileges are necessary for the Employee to render services.
(c) The Employee has and will continue to truthfully disclose to the
Company the following matters, whether occurring, at any time during the five
(5) years immediately preceding the date of this Agreement or at any time during
the term of this Agreement:
(1) any actual or threatened malpractice suit, claim (whether or
not filed in court), settlement, settlement allocation, judgment, verdict
or decree against the Employee;
(2) any disciplinary, peer review or professional review
investigation, proceeding or action instituted against the Employee by any
licensure board, hospital, medical school, health care facility or entity,
professional society or association, third party payor, peer review or
professional review committee or body, or governmental agency;
(3) any criminal complaint, indictment or criminal proceeding in
which the Employee is named as a defendant;
(4) any allegation, investigation, or proceeding, whether
administrative, civil or criminal, against the Employee of filing false
health care claims, violating anti-kickback laws, violating self-referral
laws, violating fee splitting laws, or engaging in other billing
improprieties;
(5) any organic or mental illness or condition that impairs or
is likely to impair the Employee's ability to practice medicine;
(6) any dependency on, or habitual use or abuse of, alcohol or
controlled substances, or any participation in any alcohol or controlled
substance detoxification, treatment, recovery, rehabilitation, counseling,
screening or monitoring program;
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(7) any allegation, investigation or proceeding, whether
administrative, civil, or criminal, against the Employee for violating
professional ethics or standards, or engaging in illegal, immoral or
other misconduct (of any nature or degree), relating to the practice of
medicine; and
(8) any denial or withdrawal of an Employee's application
in any state for licensure as a physician, for medical staff privileges
at any hospital or other health care entity, for re-certification, for
participation in any government third-party payment program, for state
or federal controlled substances registration, or for malpractice
insurance, or loss of board certification in the medical specialty of
anatomic pathology or in the medical specialty of general pathology for
any reason whatsoever.
(d) The Employee is board certified in the medical specialty
of pathology.
(e) The Employee shall at all times render services to
patients in a competent, professional and ethical manner, in accordance with
prevailing standards of medical practice in the relevant community, perform
professional and supervisory services in accordance with recognized standards of
the medical profession, and act in a manner consistent with the Principles of
Medical Ethics of the American Medical Association, American Board of Pathology
and all applicable statutes, regulations, rules, orders and directives of any
and all applicable governmental and regulatory bodies having competent
jurisdiction.
(f) In connection with the provision of professional services
to patients of Company, the Employee shall use the equipment, instruments,
pharmaceuticals and supplies furnished by or on behalf of the Company for the
purposes for which they are intended and in a manner consistent with sound
medical practice.
(g) The Employee shall participate in Medicare, Medicaid,
workers compensation, other federal and state reimbursement programs, and the
payment plan of any commercial insurer, health maintenance organization,
preferred provider organization, accountable health plan, or other health
benefit program, as reasonably directed by the Company, and the Employee has not
been suspended or excluded from participating in any such program which will
have a material adverse impact on the ability of the Employee to perform his
duties as required by this Agreement.
(h) The Employee shall keep and maintain (or cause to be kept
and maintained) appropriate records, consistent with prevailing standards of
medical practice in the Employee's relevant community, relating to all
professional services rendered by the Employee under this Agreement and shall
prepare and attend to, in connection with such services, all reports, claims,
and correspondence necessary or appropriate in the circumstances, as determined
reasonably by the Company, all of which records, reports, claims, and
correspondence shall belong to the Company.
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20. Non-Competition and Non-Solicitation Agreement.
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(a) The Employee acknowledges that during the course of the
Employee's employment the Employee has and will receive confidential and
proprietary information from and concerning the Company. The Employee also
acknowledges that the Company has made and/or will make substantial investments
in the further development of the Company's goodwill and in the Employee's
professional development. The capital expended to develop this goodwill directly
benefits the Employee and should continue to do so in the event that the
relationship between the Company and the Employee is terminated. Likewise, other
capital investments made or to be made by the Company to assist in the
Employee's professional development (including but not limited to those items
listed below) have conferred and will confer a direct economic benefit on the
Employee. During the course of the Employee's tenure with the Company, the
Employee will have received the following economic benefits as a result of
capital expenditures by the Company:
(1) Placement in an ongoing practice of pathology with an
established revenue base.
(2) The opportunity to establish a professional
relationship among clients served by the Company and its affiliates.
(3) Marketing support enabling the Employee to expand the
Employee's own pathology practice and to become known by additional
clients.
(4) The provision of contract management to enable the
Employee to obtain provider status in managed care plans.
(5) The opportunity to develop special areas of expertise
leading to requests for consultations on specific areas of pathology
practice.
(6) The establishment of methodologies, practice parameters
and quality assurance programs to enhance the Employee's practice of
pathology.
(7) The development and implementation of information
systems and reporting formats, unique to the practice of pathology, to
make the provision of pathology services more efficient, and to
maximize the time available to the Employee for the performance of
pathology (as opposed to attending to administrative functions).
(8) Financial support and practice coverage to facilitate
participation in continuing education opportunities.
(9) Financial support and practice coverage enabling the
Employee to pursue additional board certifications.
(10) Financial support and practice coverage to participate
in professional development and professional associations.
12
(11) Participation in proprietary strategic planning
sessions which focus on professional and business aspects of the
practice of pathology and growth opportunities.
The Employee agrees that the Company is entitled to protect these
business interests and investments and to prevent the Employee from using or
taking advantage of the foregoing economic benefits to the Company's detriment.
(b) Accordingly, the Employee specifically agrees that, except
for the services and duties that the Employee performs for or on behalf of the
Company pursuant to the terms of this Agreement or other services that are
permitted pursuant to Section 20(b)(2) of this Agreement, during the Employee's
employment with the Company and during the Restricted Period (as defined in
Subsection (c) below), the Employee shall not, as a shareholder, principal,
agent, consultant, manager, advisor, director, officer, control person,
operator, or in any other capacity or manner whatsoever,
(1) directly or indirectly engage in the practice of
pathology, or engage in any business or perform any service, directly
or indirectly, in competition with the business of the Company,
AmeriPath, the Company's or AmeriPath's successors and assigns in the
Restricted Territory (as hereinafter defined), or have any interest
whatsoever in any enterprise that shall so engage in such activities,
which is located in, provides services in or does any business
whatsoever (other than at a deminimis level) in any facility, hospital
or laboratory located in the Florida counties of Pinellas,
Hillsborough, Xxxxx, St. John's, Clay, Bradford, Union, Xxxxx, Nassau
and/or Xxxxxx and the Georgia counties of Xxxxx, Camden, Brantley, Xxxx
and Charlton (collectively these Florida and Georgia counties referred
to herein as the "Restricted Territory"), or
(2) from any facility or location, whether within or
without the Restricted Territory, knowingly (x) perform pathology
services for any patient, medical facility, hospital, laboratory or
health care provider located in the Restricted Territory or (y) perform
pathology services for any patient, medical facility, hospital,
laboratory or health care provider who was or is or is expected shortly
to become a customer, client or patient of the Company, AmeriPath or
any Affiliate of the Company or AmeriPath, except that it shall not be
a violation of this Agreement for the Employee to perform pathology
services in the Restricted Territory during the Restricted Period (i)
as an employee of a local, federal or state government or agency; (ii)
in performing the Employee's duties as a member of the United States
military services or the National Guard; or (iii) on a locum tenens
basis. Further, provided that the following activities do not interfere
with the Employee's full time service to the Jacksonville Division of
AmeriPath, nothing contained in this Employment Agreement shall
prohibit the Employee from (i) performing consulting services to
persons who are not customers, clients or patients of the Company,
AmeriPath or any Affiliate of the Company or AmeriPath, including the
entities of Xxxxxx, Xxxxxxx & Xxxxxxx, Immucar, Serollogicils and Coral
Therapeutics, Etc., (ii) providing expert testimony, opinion
consultation, (iii) participating in non-pathology related businesses;
and (iv) holding a passive stock
13
interest in Laboratory Physicians, St. Petersburg, P.A. or any
successor thereof and receiving payments in respect of such stock
interest.
(c) As used in this Agreement, the term "Restricted Period"
shall mean and include the period during which the Employee is Employed by the
Company, or any Affiliate of the Company and a period of two (2) years from the
effective date of the Employee's termination of employment with the Company or
such Affiliate of the Company; provided, however, that the Restricted Period
shall be reduced to zero (0) days from the effective date of the Employee's
termination of employment with the Company or such Affiliate of the Company in
the event that (i) the Employee's employment is terminated without cause, or
(ii) the Company elects not to renew this Employment Agreement as provided
herein.
(d) The Employee further agrees that during the Restricted
Period the Employee will not, directly or indirectly, (1) solicit the employment
of any employee, agent or consultant of the Company, or an Affiliate of the
Company, who was such at any time during the twelve (12) months preceding the
Employee's termination of employment with the Company, or (2) induce any
employee of the Company, or any Affiliate of the Company, to leave the employ of
the Company (or of such Affiliate), or (3) solicit any payor contracts from any
payor of the Company (or of an Affiliate of the Company), or otherwise interfere
with any such payor, or (4) solicit or otherwise interfere with any referral
sources of the Company or any Affiliate of the Company, unless in each case the
Employee obtains the prior written consent of the Company.
(e) In recognition of the substantial nature of such potential
damages, the Employee agrees that the Company shall be entitled to specific
performance of this provision, and to injunctive and other equitable relief, and
that the Employee will be responsible for the payment of court costs and
reasonable attorneys' fees incurred by the Company in seeking enforcement the
covenant set forth herein. This Section 20 shall survive the termination of this
Agreement and the termination of the Employee's employment with the Company. The
Employee acknowledges that the enforcement of this covenant is not contrary to
the public health, safety, or welfare in that the population in the areas set
forth herein is adequately served by qualified pathologists. Further, the
Employee acknowledges that the Employee's breach of this covenant will cause
irreparable injury to the Company.
21. Confidentiality.
---------------
(a) Acknowledgement. The Employee acknowledges and agrees that
---------------
in the course of rendering services to the Company and its clients, the Employee
will have access to and will become acquainted with confidential and proprietary
information about the professional, business and financial affairs of the
Company, its Affiliates and its patients, clients and customers, and that the
Employee may have contributed to or may in the future contribute to such
information. The Employee further recognizes that the Employee is being employed
as a key employee, that the Company is engaged in a highly competitive business,
and that the success of the Company in the marketplace and business depends upon
its goodwill and reputation for integrity, quality and dependability. The
Employee recognizes that in order to guard the legitimate interests of the
Company it is necessary for the Company to protect all such confidential and
proprietary information, goodwill and reputation.
14
(b) Proprietary Information. In the course of the Employee's
-----------------------
service to the Company, the Employee may have access to confidential know-how,
business documents or information, marketing data, client lists and trade
secrets which are confidential. Such information shall hereinafter be called
"Proprietary Information" and shall include any and all items enumerated in the
preceding sentence which come within the scope of the business activities of the
Company as to which the Employee has had or may have access, whether previously
existing, now existing or arising hereafter, whether or not conceived or
developed by others or by the Employee alone or with others during the period of
his service to the Company, and whether or not conceived or developed during
regular working hours. "Proprietary Information" shall not include (a) any
information which is in the public domain during the period of service by the
Employee or becomes public thereafter, provided such information is not in the
public domain as a consequence of disclosure by the Employee in violation of
this Agreement, and (b) any information not considered confidential information
by similar enterprises operating in the clinical or anatomical laboratory
industry or otherwise in the ordinary course.
(c) Fiduciary Obligations. The Employee agrees and acknowledges
---------------------
that the Proprietary Information is of critical importance to the Company and a
violation of this Section 21 will seriously and irreparably impair and damage
the Company's businesses. The Employee therefore agrees, while he is an employee
of the Company and at all times thereafter, to keep all Proprietary Information
strictly confidential
(d) Non-Disclosure. Except as required by law or order of any
--------------
court or governmental entity or in connection with the proper performance of his
duties hereunder, the Employee shall not disclose, directly or indirectly
(except as required by law), any Proprietary Information to any person other
than (a) the Company, (b) persons who are authorized employees of the Company at
the time of such disclosure, (c) such other persons, including prospective
investors or lenders, to whom the Employee has been instructed to make
disclosure by the Company's Board of Directors, or (d) the Employee's counsel,
which counsel shall keep all Proprietary Information confidential (in the case
of clauses (b) and (c), only to the extent required in the course of the
Employee's service to the Company). Upon any termination of the Employee's
employment hereunder, the Employee shall deliver to the Company all notes,
letters, documents, tapes, discs, recorded data and records which may contain
Proprietary Information which are then in the Employee's possession or control
and shall not retain, use, or make any copies, summaries or extracts thereof.
22. Invalid Provision. The invalidity or unenforceability of any
-----------------
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement. The Employee and the Company agree and
acknowledge that the provisions of Sections 20 and 21 are material and of the
essence to this Agreement. If the scope of any restriction or covenant contained
herein should be or become too broad or extensive to permit enforcement thereof
to its fullest extent, then such restriction or covenant shall be enforced to
the maximum extent permitted by law, and the Employee hereby consents and agrees
that (a) it is the parties intention and agreement that the covenants and
restrictions contained herein be enforced as written, and (b) in the event a
court of competent jurisdiction should determine that any restriction or
covenant contained herein is too broad or extensive to permit enforcement
thereof
15
to its fullest extent, the scope of any such restriction or covenant may be
modified accordingly in any judicial proceeding brought to enforce such
restriction or covenant, but should be modified to permit enforcement of the
restrictions and covenants contained herein to the maximum extent the court, in
its judgment, will permit.
23. Applicable Law. This Agreement shall be governed by and construed
--------------
and enforced in accordance with the laws of the State of Florida.
24. Binding Effect; Assignment. This Agreement shall inure to the
--------------------------
benefit of and be binding on the Employee and the Company and the Employee's and
the Company's respective heirs, personal representatives, successors and
assigns; however, that the Employee shall have no right to assign the Employee's
-------
rights or duties under this contract to any other person. In the event of the
Company's sale, merger or consolidation, the Employee specifically agrees that
the Company may assign the Company's rights and obligations hereunder to the
Company's successor, assign or purchaser. In addition, and in any event, the
Company may, at any time, assign the Company's rights and obligations under this
Agreement to any Person that is an Affiliate of the Company or to any Person
which, after any such assignment, employs at least 50% of the physician
employees employed by the Company immediately prior to the assignment, provided,
--------
that any successor shall expressly assume, and AmeriPath, Inc. (the Company's
parent), or its successor, shall guaranty, the obligations hereunder.
25. Notices. Any required notice under this Agreement shall be made
-------
and delivered in writing. Delivery of such notice shall be made (x) if to the
Company, to AmeriPath, Inc., 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxx
00000, Attention: President; and (y) if to the Employee, to the last known
residential address of Employee as listed in the Company's employment records.
Delivery of such notice shall be deemed to have occurred (i) in the case of hand
delivery, when personally delivered to the other party at such party's address;
or (ii) in the case of mailing, three (3) days after such notice has been
deposited in the United States mails, postage prepaid, by certified or
registered mail, with return receipt requested, and addressed to the other party
as set forth in this Agreement; or (iii) in any other case, when actually
received by the other party. Either party may change the address to which
notices are to be given by giving written notice of such change to the other
party in accordance with this Section 25.
26. Attorneys' Fees and Costs. In any action, suit or proceeding to
-------------------------
enforce the terms and conditions of this Agreement, the prevailing party shall
receive and the unsuccessful party shall pay all costs, fees and expenses,
including reasonable attorney's costs, fees and expenses, incurred in enforcing
its rights under this Agreement, including costs, expenses and fees with respect
to trials, appeals and collection.
27. Amendment. This Agreement may not be modified or amended in any
---------
manner other than in a written document signed by both parties.
28. Legislative Limitations. Notwithstanding any other provision of
-----------------------
this Agreement, if the governmental agencies (or their representatives) which
administer Medicare or Medicaid, or any other government third party payor
program, or any other federal, state or local government or agency passes,
issues or promulgates any law, rule, regulation, standard or
interpretation at any time while this Agreement is in effect which prohibits,
restricts, limits or in any way adversely changes the method or amount of
reimbursement, compensation or payment for services rendered by the Company (or
its physician employees) under this Agreement, or which otherwise adversely
affects either the Employee's or the Company's rights or obligations hereunder,
then (i) the parties hereto shall, promptly upon notice from either party,
negotiate in good faith to amend this Agreement to provide for such
reimbursement, compensation or payment for services in a manner consistent with
any prohibition, restriction, limitation and/or which takes into account any
adverse change in reimbursement, compensation or payment for physician services,
and (ii) in the event the parties are unable to reach agreement within ten (10)
days after said notice is given, the Company shall assign this Agreement (and
the Company's rights and obligations hereunder) to an Affiliate, (if such
assignment cures or substantially alleviates such prohibition, restriction,
limitation or adverse change) or terminate this Agreement, and the rights and
obligations of each of the parties hereunder, as of midnight on such tenth
(10th) day.
29. Miscellaneous.
-------------
(a) Exclusive Agreement. The terms of the Employee's employment
-------------------
with the Company are exclusively governed by the terms of this Agreement. Any
and all prior agreements, arrangements, promises, representations, discussions
or understandings which either of the parties may have had concerning the
Employee's employment are hereby canceled, superseded and of no further force or
effect.
(b) Confidentiality. The Company and the Employee acknowledge
---------------
and agree that this Agreement and each of the provisions hereof shall be treated
as confidential and, except to the extent required by applicable law or
regulations or order of any court or governmental entity, or as deemed
reasonably necessary by the Company to facilitate due diligence in connection
with acquisitions or financings, neither the Employee nor the Company shall
disclose the terms of the Agreement, or provide copies hereof, to any third
party (other than counsel or advisers) without the prior written consent of the
other party.
(c) Definitions. (1) "Affiliate" shall mean and include, with
----------- ---------
regard to any Person, (a) any Person, directly or indirectly, controlled by,
under common control of, or controlling such Person, (b) any Person, directly or
indirectly, in which such Person holds, of record or beneficially, five percent
or more of the equity or voting securities, (c) any Person that holds, of record
or beneficially, five percent or more of the equity or voting securities of such
Person, (d) any Person that, through Contract, relationship or otherwise, exerts
a substantial influence on the management of such Person's affairs, (e) any
Person that, through Contract, relationship or otherwise, is influenced
substantially in the management of their affairs by such Person, or (f) any
director, officer, partner or individual holding a similar position in respect
of such Person.
(2) "Company" Where a provision contained in this Agreement
-------
requires or permits the action, adoption, review or approval of, or provides for
certain power, authority or judgment of, the Company, such action, adoption,
review, approval, power, authority or judgment may be exercised, taken or made
by an Affiliate of the Company, or by
17
AmeriPath or its Affiliates, if such Affiliate of the Company, or AmeriPath or
its Affiliates, is required or permitted to exercise, take or make such action,
adoption, review, approval, power, authority or judgment through or by virtue of
a Contract to which the Company or the Employee is a party or otherwise.
(3) "Contract" means and includes any agreement, contract,
--------
commitment, instrument or other binding arrangement, obligation or
understanding, whether written or oral.
(4) "Person" means and includes any corporation,
------
partnership, joint venture, company, syndicate, organization, association,
trust, entity, authority or natural person.
(d) Consent to Jurisdiction; Service of Process. The parties
-------------------------------------------
hereby irrevocably submit to the jurisdiction of the state or federal courts
wherein lies Xxxxx County in connection with any suit, action or other
proceeding arising out of or relating to this Agreement and hereby agrees not to
assert, by way of motion, as a defense, or otherwise in any such suit, action or
proceeding that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that this
Agreement or the subject matter hereof may not be enforced by such courts.
(e) Headings. The article, section and other headings contained
--------
in this Agreement are for reference purposes only and do not affect in any way
the meaning or interpretation of any or all of the provisions of this Agreement.
(f) Pronouns and Plurals. Whenever the context may require, any
--------------------
pronoun used in this Agreement shall include the corresponding masculine,
feminine, or neuter forms, and the singular forms of nouns, pronouns, and verbs
include the plural and vice versa.
(g) Construction. The parties acknowledge that each party has
------------
reviewed and revised this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement.
(h) Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreement as of the date first hereinabove set forth.
AMERIPATH
By: _____________________________________
Xxxxxx X. Xxxx, Vice President
18
EMPLOYEE:
_________________________________________
XXXXXX X. XXXXX, XX., M.D.
19
