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EXHIBIT 10.7
FORM OF
NON-COMPETITION AND RESTRICTIVE COVENANT AGREEMENT
EXECUTIVE
This NON-COMPETITION AND RESTRICTIVE COVENANT AGREEMENT (this
"Agreement") is made as of ____________, 199__ between ______________________
("Employee") and UNIVERSAL STANDARD HEALTHCARE, INC., a Michigan corporation
("USHI").
RECITALS:
WHEREAS, during Employee's employment with USHI and its direct
or indirect subsidiaries, including but not limited to, Universal Standard
Healthcare of Delaware, Inc., Universal Standard Healthcare of Michigan, Inc.,
Universal Standard Healthcare of Ohio, Inc., and TPA, Inc. (collectively, the
"Company"), Employee will have access to, or be acquiring highly confidential
information and trade secrets concerning the Company's business, including but
not limited to, customer lists, price lists, catalogs, methods of pricing,
marketing practices, advertising, methods of operation and the needs and
requirements of Company's customers;
WHEREAS, Employee will receive from Company valuable technical
and/or marketing experience and assistance which will materially aid Employee
in establishing and retaining customers of the Company;
WHEREAS, the support furnished to Employee by Company will
enable Employee to establish goodwill with the Company's customers, such
goodwill being a valuable asset of the Company; and
WHEREAS, the services Employee will be performing for the
Company will be of a special, unique and extraordinary nature.
NOW THEREFORE, as an inducement to Company to employ Employee,
and in consideration of Employee's acceptance of employment with Company and
the Company's compensating Employee for services provided to Company by
Employee and the Company's providing to Employee of other employee benefits of
a compensatory nature, but without any obligation on Company's part to continue
such employment, compensation or benefits for any specified period whatsoever,
Employee hereby agrees as follows:
1. Noncompetition
(a) Employee hereby covenants and agrees that, for a
period beginning on the date hereof and ending on the date occurring two (2)
years following the date on which Employee is no longer employed by Company or
any of its affiliates (the "Noncompetition Period"), Employee will not, and
will not permit any of Employee's affiliates to, directly or indirectly, (i)
engage or Participate in any Clinical Laboratory Business located in or
providing any services to or for any
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person or entity whatsoever in or otherwise doing business anywhere in the
State of Michigan or in any state from which the Company was, as of the last
day of Employee's employment, generating Annual Revenues from the Clinical
Laboratory Business in excess of Ten Million ($10,000,000) Dollars; provided
that, in the event that Employee's employment with the Company is terminated by
the Company, the restrictions set forth in this Section 1(a)(i) shall terminate
upon the receipt by the Employee of his final payment of severance compensation
from the Company, if any, and, if the Employee is not entitled to any severance
compensation upon the termination of his employment by the Company, then the
Employee shall not be subject to the restrictions of this Section 1(a)(i) for
the period following the termination by the Company of his employment; or (ii)
induce or attempt to influence any person or entity who or which is or was a
customer or client of Company at any time during the Noncompetition Period to
transact business with any competitor of Company or to cease to do business, in
whole or in part, with Company or any of its affiliates.
(b) Employee hereby covenants and agrees that, for the
Noncompetition Period, Employee will not, and will not permit any of Employee's
affiliates to, directly or indirectly, (i) engage or Participate, within the
United States of America, in a business the same as or similar to the capitated
medical laboratory business or any other capitated or managed care business
engaged in by the Company during the Employment Period or in any business of
medical claims processing which competes with the medical claims processing
business conducted by the Company during the Employment Period (the "Managed
Care Business"), (ii) provide, or Participate in any business which provides,
any products or services of the type offered by the Managed Care Business
during the Employment Period (the "Managed Care Products and Services") to any
person, firm, corporation or other entity that was a customer of the Managed
Care Business during the Employment Period ("Managed Care Customer"), or (iii)
solicit or assist in the solicitation of, or Participate in any business which
solicits or assists in the solicitation of, any agreement for the provision of
Managed Care Products and Services to any Managed Care Customer.
(c) Notwithstanding the provisions contained in
subparagraph (a) and (b) above to the contrary, during the Noncompetition
Period, Employee shall be permitted to perform, solely for Company, the duties
and responsibilities of Employee's position of employment with Company.
(d) Employee hereby acknowledges and agrees that this
covenant is reasonable with respect to its duration, geographic area and scope.
(e) The term "affiliates" shall mean, with respect to any
person, partnership (legal or otherwise), corporation or other entity, any and
all partnerships, corporations or other entities directly or indirectly
controlling (including, without limitation, all directors and officers),
controlled by or under direct or indirect common control with such person,
partnership, corporation, or other entity, including, without limitation, any
joint venture to which such person, partnership, corporation or other entity is
a party.
(f) The term "Clinical Laboratory Business" shall mean
any business, endeavor, enterprise, activity, arrangement or undertaking
engaged in the performance or provision of any
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clinical laboratory analysis or testing or the sampling, testing or reporting
on medical, biological or diagnostic specimens or products, including, without
limitation, any entity that is required to be licensed under the Clinical
Laboratory Improvement Amendments of 1988, codified at 42 U.S.C. Section 263a.
(g) The term "Participate" shall mean any direct or
indirect interest or position in or any financial or other arrangement or
relationship with any business, arrangement or enterprise whether as an
officer, director, employee, partner, shareholder, sole proprietor, joint
venturer, agent, representative, independent contractor, consultant,
franchisor, franchisee, creditor, owner or otherwise; provided that the term
"Participate" shall not include ownership of less than five percent of the
stock of a publicly-held corporation whose stock is traded on a national
securities exchange or in the over-the-counter market.
(h) The term "Annual Revenues" shall mean the revenues
derived during the last full fiscal quarter ended prior to the last day of the
Employment Period, multiplied by four.
(i) The term "Employment Period" shall mean the period
during which Employee is employed by one or more of the entities included in
the term Company. The terms "employment" or "employ" as used in this Agreement
shall include direct employment by the Company and/or the rendition of services
for the Company through a contract with a professional employer organization.
2. Nonsolicitation. Employee agrees that, during the
Noncompetition Period, Employee will not, and will not permit any of his
affiliates to, without the prior written consent of Company, directly or
indirectly, call on, solicit, take away or hire any persons who, at any time
during the Noncompetition Period, are employees or agents of Company or any of
Company's affiliates.
3. Confidentiality; Work Product. Employee agrees to maintain
the strict confidentiality of all information, documents, processes and
materials relating to Company and its business and the Company's affiliates and
their business ("Confidential Information"), to use Confidential Information
only in connection with Employee providing services to the Company and to make
no other commercial, personal or other use of Confidential Information.
Employee shall not divulge to anyone, either during or after the Noncompetition
Period, any Confidential Information acquired by Employee. Employee agrees
that, upon termination of employment with Company, Employee shall forthwith
deliver to Company all documents, materials and other data in Employee's
possession containing Confidential Information or concerning the Company or its
affiliates and their business. Employee agrees that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports, and all similar or related information, which relates to the Company's
or any of its affiliates' actual or anticipated business, research and
development or existing or future products or services and which are conceived,
developed or made by Employee during the Employment Period ("Work Product")
belong to the Company or its affiliates. Employee will promptly disclose such
Work Product to the Company and perform all actions reasonably requested by the
Company (whether during or after the Employment Period) to
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establish and confirm such ownership (including, without limitation,
assignments, consents, powers of attorney and other instruments).
4. Enforceability. Notwithstanding the intent of the parties
hereto that all of the provisions contained herein be fully enforceable, if at
any time a court holds that the restrictions agreed to by the parties and
stated in this Agreement are unreasonable or otherwise unenforceable under
circumstances then existing, the parties hereto agree that the maximum period,
scope or geographic area determined to be reasonable under such circumstances
by such court will be substituted for the stated period, scope or area.
5. Specific Performance. The parties hereto agree that money
damages would be inadequate for any breach of any of the provisions of this
Agreement. In the event of Employee's breach of any of the provisions of this
Agreement, Company or any of its affiliates or its or their successors or
assigns may, in addition to other available rights and remedies, apply to any
court of competent jurisdiction for specific performance and/or injunctive
relief in order to enforce, or prevent any violation of, any of the provisions
of this Agreement.
6. Successors and Assigns. This Agreement may not be assigned by
Employee. Company may freely assign this Agreement; provided that, following
the assignment of this Agreement by the Company, the definition of Managed Care
Business shall not be expanded beyond the definition of such term at the date
of such assignment without the prior written consent of Employee. This
Agreement shall be binding upon and inure to the benefit of each of Employee
and Company and their successors and permitted assigns.
7. Waiver. No failure on the part of the Company to exercise,
and no delay in exercising or course of dealing with respect to, any right,
power or privilege under this Agreement (or breach of any obligation under any
other agreement) shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under this Agreement or any
other agreement (or breach of any obligation under any other agreement)
preclude any other or further exercise thereof or hereunder, or the exercise of
any other right, power or privilege. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
8. Invalidity. In the event that one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement.
9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but when taken
together shall constitute but one instrument.
10. Descriptive Headings. The descriptive headings contained in
this Agreement are for convenience only and do not constitute a part of this
Agreement.
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11. Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Michigan,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Michigan or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Michigan.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
Witness Signature
Name
Dated:
UNIVERSAL STANDARD HEALTHCARE, INC.
By:
Name:
Its:
Dated:
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