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Exhibit 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement is made this
first day of August, 1997, between PhyCor, Inc., a Tennessee corporation (the
"Company") and ______________ ("Employee").
W I T N E S S E T H :
WHEREAS, the Company and Employee entered into an Employment
Agreement, dated August 30, 1991, as amended and restated March 25, 1994, and
have renegotiated the terms of such Employment Agreement; and
WHEREAS, the Company desires to continue to employ Employee
and Employee desires to accept such continued employment by the Company subject
to the terms and conditions contained herein; and
WHEREAS, in serving as an employee of the Company, Employee
will be in a position in which Employee will participate in the use and
development of confidential proprietary information about the Company's present
and future products, its customers and suppliers and the methods which the
Company and its employees use in competition with other companies, as to which
the Company desires to protect fully its rights;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein set forth, the parties hereto agree as
follows:
1. Employment. The Company hereby employs Employee and
Employee accepts such employment with the Company, subject to the terms and
conditions set forth herein. Employee shall be employed as Chairman, President
and Chief Executive Officer of the Company, shall perform all duties and
services incident to his position, and such other duties and services as may be
prescribed by the Bylaws of the Company or established by the Board of Directors
of the Company from time to time; provided, however, that without Employee's
written consent: (i) the duties and services of Employee hereunder shall not be
materially altered in a manner inconsistent with Employee's position and
original duties hereunder, and (ii) Employee shall not be required to relocate
more than 25 miles from the Company's Nashville, Tennessee office. During his
employment hereunder, Employee shall devote his best efforts and attention, on a
full-time basis, to the performance of the duties required of him as an employee
of the Company.
2. Compensation. As compensation for services rendered by
Employee hereunder, Employee shall receive:
(a) An annual salary of $______, or such higher
salary as shall be determined by the Company's
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Compensation Committee payable in arrears in equal monthly
installments, plus insurance and other benefits equivalent to
the benefits provided other similar employees of the Company,
which are set forth in Appendix I hereto; and
(b) Six weeks of compensated vacation time, to be
taken at any time during each year of the term of this
Agreement;
(c) Participation in the Company's employee bonus
program as such program may be amended or modified by the
Company from time to time; and
(d) Reimbursement for all reasonable expenses
incurred by Employee in the performance of his duties under
this Agreement, provided that Employee submits verification of
such expenses in accordance with the policies of the Company.
(e) Immediate vesting of all options granted under
the Company's Employee Incentive Stock Plan or any
similar plan adopted by the Company.
3. Confidential Information and Trade Secrets.
3.1 Employee recognizes that Employee's position with the
Company requires considerable responsibility and trust, and, in reliance on
Employee's loyalty, the Company may entrust Employee with highly sensitive
confidential, restricted and proprietary information involving Trade Secrets and
Confidential Information.
3.2 For purposes of this Agreement, a "Trade Secret" is any
scientific or technical information, design, process, procedure, formula or
improvement that is valuable and not generally known to competitors of the
Company. "Confidential Information" is any data or information, other than Trade
Secrets, that is important, competitively sensitive, and not generally known by
the public, including, but not limited to, the Company's initial business plan,
business prospects, training manuals, product development plans, bidding and
pricing procedures, market strategies, internal performance statistics,
financial data, confidential personnel information concerning employees of the
Company, supplier data, operational or administrative plans, policy manuals, and
terms and conditions of contracts and agreements. The terms "Trade Secret" and
"Confidential Information" shall not apply to information which is (i) already
in Employee's possession at the time of employment (unless such information was
used in connection with formulating the Company's initial business plan,
obtained by Employee from the Company or was obtained by Employee in the course
of Employee's employment by the Company), (ii) received by Employee
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from a third party with no restriction on disclosure, or (iii) required to be
disclosed by any applicable law.
3.3 Except as required to perform Employee's duties hereunder,
Employee will not use or disclose any Trade Secrets or Confidential Information
of the Company during employment, at any time after termination of employment
and prior to such time as they cease to be Trade Secrets or Confidential
Information through no act of Employee in violation of Section 3.
3.4 Upon the request of the Company and, in any event, upon
the termination of employment hereunder, Employee will surrender to the Company
all memoranda, notes, records, drawings, manuals or other documents pertaining
to the Company's business or Employee's employment (including all copies
thereof). Employee will also leave with the Company all materials involving any
Trade Secrets or Confidential Information of the Company. All such information
and materials, whether or not made or developed by Employee, shall be the sole
and exclusive property of the Company, and Employee hereby assigns to the
Company all of Employee's right, title and interest in and to any and all of
such information and materials.
4. Covenant Not to Compete.
4.1 Employee hereby covenants and agrees with the Company that
except as provided below, commencing on the date hereof and ending 24 months
after the stated expiration date of this Agreement (whether or not this
Agreement terminates at an earlier date), Employee will not directly or
indirectly (i) operate, develop or own any interest other than the ownership of
less than 5% of the equity securities of a publicly traded company, in any
business which has significant activities (viewed in relation to the business of
the Company, its subsidiaries and affiliates), or has announced intentions to
focus significant resources, relating to the ownership, management or operation
of multi-specialty medical clinics, physician group practices, independent
practice associations, or other similar entities (a "Business"); (ii) compete
with the Company or its subsidiaries and affiliates in the operation or
development of any Business within the United States of America; (iii) be
employed by any business which owns, manages or operates a Business; (iv)
interfere with, solicit, disrupt or attempt to disrupt any past, present or
prospective relationship, contractual or otherwise, between the Company, or its
subsidiaries or affiliates, and any customer, client, supplier or employee of
the Company, or its subsidiaries or affiliates; or (v) solicit any employee of
the Company, or its subsidiaries or affiliates, to leave their employment with
the Company or its subsidiaries or affiliates, as the case may be, or hire any
such employee to work for a Business; provided, however, that if Employee's
employment hereunder is terminated without cause prior to the expiration of this
Agreement, this provision shall
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apply only for the period in which the Company is obligated to pay
and pays Employee's compensation.
4.2 If a judicial determination is made that any of the
provisions of this Section 4 constitutes an unreasonable or otherwise
unenforceable restriction against Employee, the provisions of this Section 4
shall be rendered void only to the extent that such judicial determination finds
such provisions to be unreasonable or otherwise unenforceable. In this regard,
the parties hereto hereby agree that any judicial authority construing this
Agreement shall be empowered to sever any portion of the territory or prohibited
business activity from the coverage of this Section 4 and to apply the
provisions of this Section 4 to the remaining portion of the territory or the
remaining business activities not so severed by such judicial authority.
Moreover, notwithstanding the fact that any provisions of this Section 4 are
determined not to be specifically enforceable, the Company shall nevertheless be
entitled to recover monetary damages as a result of the breach of such provision
by Employee. The time period during which the prohibitions set forth in this
Section 4 shall apply shall be tolled and suspended as to Employee for a period
equal to the aggregate quantity of time during which Employee violates such
prohibitions in any respect.
5. Specific Enforcement. Employee specifically acknowledges
and agrees that the restrictions set forth in Sections 3 and 4 hereof are
reasonable and necessary to protect the legitimate interest of the Company and
that the Company would not have entered into this Agreement in the absence of
such restrictions. Employee further acknowledges and agrees that any violation
of the provisions of Sections 3 or 4 hereof will result in irreparable injury to
the Company, that the remedy at law for any violation or threatened violation of
such Sections will be inadequate and that in the event of any such breach, the
Company, in addition to any other remedies or damages available to it at law or
in equity, shall be entitled to temporary injunctive relief before trial from
any court of competent jurisdiction as a matter of course and to permanent
injunctive relief without the necessity of proving actual damages.
6. Term. This Agreement shall continue for an initial period
of five years from the date hereof, unless sooner terminated by either party in
the manner set forth herein. Commencing 30 months prior to the end of the
initial term (and thereafter commencing on each date which is 30 months prior to
the end of the then term), the Company and Employee will negotiate in good faith
for the renewal of this Agreement for an additional term with the intent that
this Agreement shall at all times have a remaining term of greater than 24
months, subject to earlier termination as hereinafter provided. In the event (a)
the Company elects not to renew this Agreement or (b) the parties have failed to
enter into a renewal agreement by 24 months prior to the end of the then term
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or extend the negotiation period, or (c) the parties have failed to enter into a
renewal agreement by the end of the extended negotiation period, then the
Company shall be deemed to have terminated this Agreement pursuant to the
provisions of Section 10 hereof, effective 24 months prior to the end of the
then term or effective the date the extended negotiation period terminates,
whichever is later. In the event Employee elects not to renew this Agreement,
Employee shall continue to be employed and perform his obligations and
responsibilities hereunder for the remaining term of this Agreement, and be
bound by the provisions of Section 4 of this Agreement as hereinafter provided.
The date upon which this Agreement and Employee's employment hereunder shall
terminate, whether pursuant to the terms of this Section or pursuant to any
other provision of this Agreement shall hereafter be referred to as the
"Termination Date."
7. Termination Upon Death of the Employee. In the event the
Employee dies during the term of this Agreement, this Agreement shall
immediately terminate and neither the Employee nor the Company shall have any
further obligations hereunder, except that (a) the Company shall continue to be
obligated under Section 2(a) hereof for any unpaid salary, bonus or unreimbursed
expenses owed to Employee or his estate that have accrued but not been paid as
of the Termination Date and any death benefits to which Employee is entitled
under the Company's benefit programs and (b) the Company shall pay to Employee's
estate an amount equal to three months salary.
8. Termination by Employee. Employee may at any time terminate
his employment by giving the Company ninety (90) days prior written notice of
his intent to terminate the Agreement. At the Termination Date, the Company
shall have no further obligation to Employee and Employee shall have no further
rights or obligations hereunder, except as set forth in Sections 3 and 4 above,
and except for the Company's obligation under Section 2(a) hereof for unpaid
salary, bonus or unreimbursed expenses that have accrued but have not been paid
as of the Termination Date. A termination by Employee pursuant to the last
sentence of Section 10 hereof shall not constitute a termination under this
Section 8.
9. Termination for Cause. The Company shall have the right at
any time to terminate Employee's employment immediately for cause, which shall
include any of the following reasons:
(a) If Employee shall violate the provisions of
Sections 3 or 4 of this Agreement, or shall fail to comply
with any other material term or condition of this Agreement or
shall engage in any material misconduct, neglect of duties or
failure to act which materially and adversely affects the
business or affairs of the Company; or
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(b) If Employee shall (i) be convicted of a felony or
(ii) commit an act of dishonesty, fraud or embezzlement
against the Company.
Employee's obligations under Sections 3 and 4 hereof shall survive the
termination of the Agreement pursuant to this Section 9. In the event Employee's
employment hereunder is terminated in accordance with this Section, the Company
shall have no further obligation to make any payments to Employee hereunder
except for unpaid salary, bonus or unreimbursed expenses that have accrued but
have not been paid as of the Termination Date.
10. Termination Without Cause. In the event Employee is
terminated without cause during the term hereof (which shall not include a
termination pursuant to Sections 7, 8, 9 or 11), the Company shall pay Employee
all bonuses and unreimbursed expenses owed to Employee that have accrued but
have not been paid as of the Termination Date. The Company shall (a) continue to
pay to Employee his salary set forth in Section 2(a) hereof for the longer of
(i) the remaining term of this Agreement or (ii) a period of 24 months, (b)
continue to provide the insurance and other benefits of Section 2(a) hereof for
the period the salary is paid, (c) cause all grants of outstanding options,
restricted stock, bonus stock and any other incentive stock award to become
fully vested, and (d) cause all deferred compensation, supplemental retirement
programs and similar programs to become fully funded. The Company's obligations
pursuant to this Section 10 shall terminate immediately if Employee obtains
employment which is in violation of Section 4 hereof, whether or not the
provisions of Section 4 are then applicable to Employee.
In the event the Company is merged or consolidated with or
into another company and the Company does not survive the transaction or
survives only as a subsidiary of another company, or in the event any person or
group (as such terms are defined in Section 13 (d) of the Securities Exchange
Act of 1934, as amended) becomes the holder of 50% or more of the outstanding
voting securities of the Company or has the power, directly or indirectly, to
designate a majority of the members of the Board of Directors of the Company,
then in any such event a termination of this Agreement by Employee for any
reason within the first two years after the consummation of any of the foregoing
transactions shall constitute a termination without cause by the Company and
Employee shall be entitled to the amounts provided for in this Section 10.
11. Disability of Employee. If, on account of physical or
mental disability, Employee shall fail or be unable to perform his assigned
duties in any material respect for a period of sixty (60) consecutive days, the
Company shall pay Employee his full salary as set forth in Section 2(a) hereof
and shall provide the insurance, bonus and other benefits of Section 2(a) for a
period of six months from the date such disability began or for such shorter
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period as Employee is unable to perform his duties hereunder; provided, however,
that Employee's salary shall be reduced by any disability income paid to him
pursuant to any disability insurance policy maintained under this Agreement. In
the event Employee is unable to perform his duties hereunder after the
expiration of the six-month period, this Agreement shall automatically
terminate. Employee shall not be required to perform his obligations under
Section 1 hereof during any period of disability. Furthermore, the Company's
obligations pursuant to this Section 11 shall continue regardless of whether
Employee seeks, accepts or undertakes other employment during the six-month
period unless such employment is in violation of Section 4 hereof, as determined
in good faith by the Board of Directors.
12. Assignment.
(a) The rights and benefits of Employee under this
Agreement, other than accrued and unpaid amounts due under
Section 2(a) hereof, are personal to him and shall not be
assignable. Discharge of Employee's undertakings in Sections 3
and 4 hereof shall be an obligation of Employee's executors,
administrators, or other legal representatives or heirs.
(b) This Agreement may not be assigned by the Company
except to an affiliate of the Company, provided, however, that
if the Company shall merge or effect a share exchange with or
into, or sell or otherwise transfer substantially all its
assets to, another corporation, the Company shall assign its
rights hereunder to that corporation and cause such
corporation to assume the Company's obligations under this
Agreement.
13. Notices. Any notice or other communications under this
Agreement shall be in writing, signed by the party making the same, and shall be
delivered personally or sent by certified or registered mail, postage prepaid,
addressed as follows:
If to Employee:
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If to the Company: PhyCor, Inc.
Xxxxx 000
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: President
or to such other address as may hereafter be designated by either party hereto.
All such notices shall be deemed given on the date personally delivered or
mailed.
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14. Governing Law. This Agreement shall be interpreted and
enforced in accordance with the laws of the State of Tennessee.
15. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid, but
if any one or more of the provisions contained in this Agreement shall be
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability for any such provisions in every other respect and
of the remaining provisions of this Agreement shall not be in any way impaired.
16. Entire Agreement. This Agreement contains the entire
agreement of the parties hereto with respect to the subject matter contained
herein. There are no restrictions, promises, covenants, or undertakings, other
than those expressly set forth herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter. This Agreement may not be changed except by a writing executed by the
parties.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement on the day and year first above written.
PHYCOR, INC.
Attest: By:
/s/ -------------------------------
-------------------------- Title: Executive Vice President
Title: Secretary ------------------------
Witness: EMPLOYEE
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APPENDIX I
GENERAL BENEFITS
A. Insurance
The following insurance plans will be part of the benefit package:
* Life Insurance - benefits pursuant to programs adopted by
the Company's Compensation Committee from time to time
* General Medical and Dental Insurance - Employee and dependent,
basic and major medical indemnity plans, will be provided.
* Long Term Disability Coverage per individual policies
B. Such other benefits, such as supplemental retirement benefits, as may
be approved from time to time by the Company's Compensation Committee.
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