Exhibit 10.1
EMPLOYMENT AGREEMENT
MEMORANDUM OF AGREEMENT made the day of May, 1997.
B E T W E E N:
MED-EMERG INTERNATIONAL INC., a corporation incorporated
under the BUSINESS CORPORATIONS ACT (Ontario)
(hereinafter referred to as the "Corporation")
OF THE FIRST PART
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XXXXXX XXXXXXXXX of the Municipality of Metropolitan Toronto
(hereinafter referred to as the "Executive")
OF THE SECOND PART
WHEREAS the Corporation desires to employ the Executive as its Chief
Executive Officer and whereas the Executive is willing to accept such
employment, all on the terms and conditions and for the remuneration as
hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
covenants, agreements and payments herein set out and provided for, the parties
hereto hereby respectively covenant and agree as follows:
1. EFFECTIVE DATE
Employment of the Executive hereunder and this agreement shall take effect
on the closing of the initial public offering of the Corporation's common shares
(the "Commencement Date").
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2. TITLE
The Corporation will employ the Executive and the Executive will serve the
Corporation as Chief Executive Officer.
3. DURATION OF AGREEMENT
This agreement shall continue until the end of the month in which the third
anniversary of the Commencement Date occurs and shall continue thereafter from
month to month, unless terminated earlier (a) upon 180 days' notice by either
the Corporation or the Executive at any time after the end of the 30th clear
month after the Commencement Date or (b) in accordance with paragraph 11.
4. DUTIES
Schedule "A" sets out the purpose of the position of Chief Executive
Officer, his duties and responsibilities, his authority, his requirement to
establish and maintain relationships and the standards for measuring his
performance. The Executive hereby agrees to serve the Corporation loyally,
faithfully, diligently and to the best of his ability and shall use his utmost
efforts to promote and advance the business and welfare of the Corporation and
its affiliates, as described in Schedule "A". The term "affiliate" as used in
this agreement has the meaning given to it by the SECURITIES ACT of Ontario.
The Executive will be entitled to work a maximum of six shifts per month as
a physician in hospital emergency departments or urgent care clinics upon
compensation similar to any physician working on those shifts. Any physician
on-call requirements will be compensated at the same rates paid to any
Corporation physician. These emergency and on-call shifts are to preserve the
Executive's expertise as a practising physician which is in integral part of his
position
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as Chief Executive Officer of the Corporation. They are not to interfere with
his duties as Chief Executive Officer of the Corporation.
5. HOURS OF WORK
The Executive shall devote to the affairs of the Corporation substantially
the whole of his time, attention and abilities during normal business hours and
at such other times as his duties may reasonably require, unless prevented by
ill-health.
6. SALARY
The Corporation will pay the Executive by way of remuneration for his
services under this agreement (in addition to compensation payable pursuant to
paragraph 4) a salary of $204,000 per annum during the period from January 1,
1997 and during the first year after the Commencement Date, $214,000 per annum
during the second year after the Commencement Date and $225,000 per annum
during the third year after the Commencement Date of his employment hereunder,
which shall be paid bi-weekly. Accrued but unpaid salary at the rate of
$204,000 per annum from January 1, 1997 to the closing referred to in paragraph
1 shall be included in the Executive's pay on the immediately following
bi-weekly pay day.
In addition, the Corporation may provide to the Executive performance
bonuses on a mutually acceptable basis.
7. EXPENSES
The Executive shall be required to undertake such reasonable travel as is
required by the Corporation and the Corporation shall immediately pay all proper
travelling, hotel,
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entertainment and other expenses incurred by him in the performance of his
duties, upon the Corporation's receipt of corporate credit card invoices.
8. HOLIDAYS
The Executive shall be entitled, in addition to statutory holidays, to six
weeks' holiday in each 12-month period under this agreement. Unused holiday
entitlement may not be carried forward to the next 12-month period unless
otherwise agreed with the Corporation.
9. ADDITIONAL BENEFITS
Subject as hereinafter provided, during the continuance of this agreement,
the Corporation will provide to the Executive the benefits described in Schedule
"B" to this agreement. The benefits described in paragraph 1 of Schedule "B"
are the benefits currently available to senior employees of the Corporation and
its affiliates. Paragraph 1 of Schedule "B" may be amended from time to time at
the Corporation's discretion so long as such amended benefits are made available
to senior employees of the Corporation and its affiliates and are not a dilution
or reduction of then current benefits taken as a whole.
10. OPTIONS
The Corporation confirms the grant to the Executive of options to purchase
65,000 common shares of the Corporation under the Corporation's director and
employee stock option plan. Such options are fully vested and will be escrowed,
or the shares taken up thereunder will be escrowed, if required, pursuant to the
initial public offering of the Corporation's common shares.
11. TERMINATION
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(a) This agreement may be terminated by the Corporation immediately and
without any liability for any damages or compensation for breach of contract,
wrongful dismissal or otherwise, if the Executive shall:
(i) become mentally incapacitated or, for any 26 weeks in any 12
consecutive months, become physically incapacitated such that
he is unable to perform his obligations under this agreement;
or
(ii) be convicted of any indictable offence for which a sentence of
imprisonment can be imposed by law; or
(iii) commit any act of dishonesty; or
(iv) be guilty of any misconduct relating to the discharge of his
duties hereunder; or
(v) be guilty of any neglect in the discharge of his duties
hereunder or commit any wilful or persistent breach of any of
the provisions of this agreement.
(b) If this agreement is terminated by the Corporation other than pursuant
to the immediately preceding clause (a) or other than by notice pursuant to the
clause (a) of paragraph 3, then the Corporation shall forthwith pay to the
Executive his salary (less usual and statutory deductions) as if he were
employed through the third anniversary of the Commencement Date (provided that,
if such termination is at any time after the second anniversary of the
Commencement Date, the Corporation shall forthwith pay to the Executive one
year's salary less usual and statutory deductions). In addition, the
Corporation shall pay the following:
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(i) $400,000 if the Executive's employment is terminated by the
Corporation for any reason other than as described in
paragraph 11(a) during the first year of his employment under
this agreement;
(ii) $300,000 if the Executive's employment is terminated by the
Corporation for any reason other than as described in
paragraph 11(a) during the second year of his employment under
this agreement;
(iii) $200,000 if the Executive's employment is terminated by the
Corporation for any reason other than as described in
paragraph 11(a) during the third year of his employment under
this agreement; or
(iv) $100,000 if the Executive's employment is not extended by the
Corporation for a fourth year or is terminated by the
Corporation for any reason other than as described in
paragraph 11(a) during the fourth year of his employment under
this agreement;
The Corporation may terminate this agreement at any time so long as it
undertakes to make such payments forthwith; employment shall be reinstated if
such payment is not made.
Any severance payments will be payable to the Executive on the most
favourable tax basis to him, provided that such tax planning does not have an
adverse effect on the Corporation's tax position.
12. NO OTHER COMMERCIAL INTERESTS
The Executive shall not at any time during the continuance of this
agreement be or become a director of any Corporation or be engaged, concerned or
interested in, directly or
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indirectly, and whether independently or as any employee of, any other business,
trade or occupation, except that the Executive may:
(i) become engaged, concerned or interested in any other business,
trade or occupation or become a director of another Corporation,
with the prior written consent of the Corporation; or
(ii) hold or become beneficially interested in not more than 5% of any
class of securities in any Corporation if such class of securities
is listed on a recognized stock exchange or an unlisted securities
market unless the Corporation otherwise requires on the grounds
that such Corporation carries on a business competitive with that
of the Corporation or its affiliates.
Notwithstanding the foregoing or any other provision of this Agreement, the
Executive may carry on the activities identified in Schedule "C".
13. DIVIDENDS ON PREFERRED SHARES
Dividends declared and payable on any preferred shares of the Corporation
held by the Executive or any member of his immediately family are to paid out in
cash if shares which could be paid out as dividends would not be tradeable free
of any restriction, holding period or escrow, whether contained in the
Corporation's constating documents, required by law, imposed by securities
regulators or agreements with underwriters, or otherwise.
14. CONFIDENTIALITY
The Executive shall not at any time, other than in the course of his
duties, without the prior consent in writing of the Corporation, divulge or make
known to anyone any secrets of any
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technical, commercial or financial nature or other information of a confidential
nature, unless such information is already in the public domain, relating to the
business or customers of the Corporation or its affiliates. All papers and
documents used by the Executive in the course of his employment are and will
remain the property of the Corporation and will be delivered up to the
Corporation on termination of this agreement. The provisions of this paragraph
shall survive the expiration or earlier termination for any reason whatsoever of
this agreement.
15. PATENTS, SECRETS AND IMPROVEMENTS
(a) Any discovery, invention, secret process, improvement, formula, plan,
idea, know-how or adaptation or improvement thereto or to any existing idea,
process or other property of the Corporation including, without limitation, any
new, or any adaptation of existing, software or hardware, whether or not
patentable or otherwise subject to legal protection, made, discovered, conceived
or created by the Executive while in the service of the Corporation, whether
before or after the date of this agreement in any way affecting or relating to
the business of the Corporation or capable of being used or adapted for use
therein or in connection therewith shall forthwith be disclosed to the
Corporation and shall belong to and be the absolute property of the Corporation.
(b) The Executive shall if and whenever required so to do by the
Corporation at the expense of the Corporation, apply to join with the
Corporation in applying for patents, copyrights or other legal protection in
Canada and in any part of the world for any such discovery, invention, process
or improvement as aforesaid and shall at the expense of the Corporation execute
all instruments and do all things necessary for vesting the said patent,
copyright or other legal protection when obtained and all right, title to and
interest in the same in the Corporation absolutely and as sole beneficial owner
or in any such other person as the Corporation may specify. The Executive
hereby irrevocably appoints the Corporation to be his attorney in his name and
on his behalf to execute any such instrument and to do any such thing
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and generally to use his name for the purpose of giving the Corporation the full
benefit of the provisions of this paragraph but not otherwise and in favour of
any third party, and a certificate in writing signed by any director or the
secretary of the Corporation that any instrument or act falls within the
authority hereby conferred shall be conclusive evidence that such is the case.
16. CONDUCT
By accepting employment and continuing to be employed by the Corporation,
the Executive hereby undertakes and covenants with the Corporation as follows:
(i) not without the previous consent of the Corporation directly or
indirectly to receive (other than as agent for the Corporation) or
retain any discount, rebate, fee, gratuity, commission or payment
from a third party for any service, matter or thing connected
directly or indirectly with his duties and services as an employee
of the Corporation;
(ii) not within 12 months after ceasing to be employed (except with the
written consent of the Corporation which shall not be unreasonably
withheld) whether on his own behalf or on behalf of any person,
firm or corporation directly or indirectly to seek to procure
orders from or do business with any person, firm or corporation who
on the date of his ceasing to be employed or at any time in the 12
months prior to that date was a client or customer of the
Corporation and with whom in the course of his employment with the
Corporation had dealings, provided always that the preceding
covenants contained in this paragraph 16(ii) shall not shall be
deemed to prohibit the Executive from seeking or procuring orders
or from doing business in any business endeavour (including,
without limitation, the medical and emergency care service area) as
long as the preceding covenants contained in this paragraph 16(ii)
are fully and completely complied
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with (for purposes of greater certainty, a client or customer shall
be the actual hospital or other specific entity for which the
Corporation is providing services or with which the Corporation has
contracted to provide services, for example, if the Corporation is
providing services to a specific hospital, the Executive will be
precluded from soliciting work from or doing work for that hospital
in accordance with the terms of this restriction, but will not be
precluded from soliciting or providing services to other hospitals
or health providers not directly serviced by the Corporation or
from dealing with OHIP in general; the intention of this
restriction is to ensure that, if the relationship between the
Corporation and the Executive is terminated, direct contacts of the
Corporation are not be interfered with, but that the Executive is
able to carry on work in the medical and emergency care service
area); and
(iii) not during this agreement hereunder nor for a period of 24 months
thereafter to solicit, entice, procure or endeavour to persuade any
other employee of the Corporation to leave the employment of the
Corporation.
Although the Executive and the Corporation recognize and accept that the
above restrictions are reasonable having regard to the nature of the
Corporation's business and the Corporation's interest in preserving its goodwill
and customer connections, the Corporation will only withhold its consent to (i)
or (ii) above where it is evident that the business of the Corporation will be
prejudiced by not withholding such consent and to that extent, should any of the
foregoing restrictions be found to be unreasonable and unenforceable, they shall
be deemed to be modified only to the extent necessary to give effect to the
remaining provisions of this paragraph.
17. NOTICES
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Any notice, direction or other instrument required or permitted to be given
to the Executive hereunder shall be in writing and may be given by mailing the
same, postage prepaid, or delivering the same (by facsimile, telex or otherwise)
addressed to the Executive at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxx X0X
0X0. Any notice, direction or other instrument required or permitted to be given
to the Corporation hereunder shall be in writing and may be given by mailing the
same, postage prepaid, or delivering the same (by facsimile, telex or otherwise)
addressed to the Corporation at 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx,
Xxxxxxx X0X 0X0, Attention: President.
Any notice, direction or other instrument aforesaid if delivered shall be
deemed to have been given or made on the date on which it was delivered or if
mailed, shall be deemed to have been given or made on the second business day
following the day on which it was mailed.
The Executive or the Corporation may change his or its address for service
from time to time by notice given in accordance with the foregoing.
18. ENTIRE AGREEMENT AND SEVERABILITY
This agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof. There are not and shall not be any
verbal statements, representations, warranties, undertakings or agreements
between the parties with respect to the subject matter hereof. No waiver of any
breach of this agreement shall be effective unless made in writing by the party
giving such waiver and, unless otherwise provided in the written waiver, shall
be limited to the specific breach waived. The invalidity or unenforceability of
any term, covenant or condition contained in this agreement shall not affect the
validity or enforceability of any other term, covenant or condition hereof, but
shall be deemed to be severable and upon such severance, the remainder of the
agreement shall be valid and enforceable.
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Notwithstanding the foregoing, this agreement may be amended or modified in
any respect from time to time by written instrument signed by the parties
hereto.
19. GOVERNING LAW
This agreement shall in all respects be construed and enforced in
accordance with and governed by the laws of the Province of Ontario. Each of
the parties hereto hereby irrevocably attorns to the jurisdiction of the courts
of the Province of Ontario.
20. BINDING EFFECT
Neither this agreement nor any portion thereof may be assigned by the
Executive. This agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, legal personal representatives,
successors and permitted assigns.
21. COSTS
All legal and accounting costs and disbursements incurred by the Executive
in the negotiation and signing of this agreement shall be paid by the
Corporation up to a maximum of $15,000 plus GST.
22. DISPUTE RESOLUTION
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The parties hereto acknowledge that in the event of a dispute under this
agreement they shall make submissions under and shall be bound by the rules of
the Private Court in Ontario and any order whether interlocutory or final is an
award which is enforceable under the ARBITRATION ACT, 1991 of Ontario.
IN WITNESS WHEREOF this agreement has been executed by the parties hereto.
MED-EMERG INTERNATIONAL
INC.
by
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SIGNED, SEALED AND DELIVERED )
in the presence of )
)
) l/s
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------------------------ ) Xxxxxx Xxxxxxxxx
SCHEDULE "A"
SCHEDULE "B"
BENEFITS
1. Standard Employee Benefit Program of the Corporation.
2. The Corporation shall pay the Executive's annual professional fees to
maintain his status as a member of the Ontario Medical Association and the
American College of Emergency Physicians. In addition, the Corporation
shall pay the Executive's medical malpractice insurance premiums.
3. The Corporation shall pay the Executive up to $10,000 annually in monthly
instalments as a car allowance. The Corporation shall also pay for gas for
such car upon production of appropriate receipts. All other expenses with
respect to such car, for example, insurance premiums, repairs, shall be
paid by the Executive.
4. The Corporation shall pay the premiums in respect of a $1 million life
insurance policy on the life of the Executive. The Executive may designate
the beneficiary.
SCHEDULE "C"
1. The Executive may pursue international work in any area (including, without
limitation, the health care and emergency services fields), provided that
he devotes his full time and attention as Chief Executive Officer of the
Corporation as required for the due performance of his position as Chief
Executive Officer of the Corporation. His pursuit of international
opportunities shall be conducted only on his free time and vacation time
and they shall not interfere with his duties as Chief Executive Officer of
the Corporation. The Corporation will have a right of first refusal on any
international projects, but if it declines to participate, the Executive
will be able to pursue these international projects on his own free time
and on the basis that they do not interfere with the performance of his
duties as Chief Executive Officer of the Corporation.
2. The Executive may sit on boards of other health care and information
technology firms unless there is a reasonable basis upon which the
Corporation may deny him the right to do so.
