1
EXHIBIT 10.8
AMERIPATH FLORIDA, INC.
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT (the "Agreement") entered into as of June 30,
1996, by and between AMERIPATH FLORIDA, INC., a Florida corporation (the
"Company"), and XXX X. XXXXX, M.D. (the "Employee").
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 Amazon and Xxxxx, M.D., P.A., a Florida professional service
corporation d/b/a Florida Pathology Associates ("Amazon & Xxxxx"). Pursuant to a
certain Stock Purchase Agreement (the "Purchase Agreement") dated as of June 27,
1996 by and among AmeriPath, Inc., a Delaware corporation ("AmeriPath"), Amazon
& Xxxxx and Drs. Xxx Amazon and Xxx X. Xxxxx, all of the issued and outstanding
capital stock of Amazon & Xxxxx has been purchased by and sold to AmeriPath (the
"Acquisition"), effective the date hereof. Execution and delivery of this
Agreement by the Employee is a condition precedent to consummation of the
Acquisition.
Accordingly, and in connection with the transactions and agreements
referred to above, the Employee has agreed to terminate his employment with
Amazon & Xxxxx and to become employed by and render professional services, as a
Doctor of Medicine specializing in Pathology, to the Company, 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 Company employs the Employee to render professional services as a Doctor of
Medicine specializing in Pathology, and the Employee accepts such employment.
The Employee has terminated his employment with Amazon & Xxxxx.
2. TERM. The Company employs the Employee for a period
commencing the date hereof and ending on June 30, 2001, 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 an
additional one (1) year term unless either the Employee or the Company gives
written notice to the other party at least one hundred twenty (120) days prior
to June 30, 2001 of such party's determination to terminate the
2
Employee's employment hereunder. If such notice is given, then the Employee's
employment will terminate on June 30, 2001 (or on such other date as the parties
mutually agree). If such notice is not given, then the Employee's employment
will continue hereunder until June 30, 2002, subject to termination prior to
such date pursuant to Section 15 or 17 hereof.
3. DUTIES AND PERFORMANCE. The Employee agrees to devote the Employee's
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, 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. Except as may be permitted in writing by the Company, the Employee is
not to practice medicine other than with the Company during the term of this
Agreement (and thereafter, pursuant to Section 19 hereof), nor is the Employee
to engage in any other gainful occupation without the Company's prior written
consent. The preceding sentence is not intended to prohibit the Employee from
engaging 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.
The Employee may also engage in personal investment activities as long as those
investments are non-participatory by the Employee and do not detract from the
Employee's ability to perform the Employee's duties to the Company or
participate in community activities. Additional duties of the Employee are set
forth below in this Agreement.
4. QUALIFICATIONS AND LICENSURE. The Employee shall at all times during
the term of this Agreement: (i) be certified by the American Board of Pathology
in both clinical and anatomic pathology; (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 reasonably 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 impose.
5. MEDICAL FACILITIES; LOCATION. At present, the Company furnishes
pathology and laboratory services to the medical facilities listed on Annex A to
this Agreement. That list may change from time to time as the Company enters
into contracts with additional hospitals and/or facilities or as existing
contracts with medical facilities terminate. The Employee agrees to accept
assignment for duty in any location in Dade County, Florida at which the Company
renders pathology services during the term of this Agreement and to perform such
duties as the Company may direct.
- 2 -
3
6. CONFORMITY WITH LAWS, RULES, REGULATIONS AND POLICIES. In performing
the Employee's duties under this Agreement, the Employee shall comply with 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, and with the written bylaws, rules and
regulations, policies and procedures of any such medical facility.
7. SALARY; FRINGE BENEFITS. During the term of Employee's employment
under this Agreement, in consideration for all services rendered for and on
behalf of the Company, Employee shall be entitled to receive a salary at the
annual rate of $400,000 (subject to adjustment as described in Section 6.6 of
the Purchase Agreement), payable in accordance with the Company's regular
payroll practices in effect from time to time. The Employee's salary will be
subject to periodic review by the Company's Board of Directors, and the Company
may, in its sole and absolute discretion, but shall not be required to,
determine to increase the Employee's salary 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. Annex B sets forth
the fringe benefits currently being provided. Such Annex is subject to change on
a Company-wide basis at the Company's sole discretion.
8. REIMBURSEMENT OF EXPENSES. Upon submission of proper documentation
and approval by the Board of Directors, the Company will reimburse the
Employee's reasonable expenses incurred in connection with the Employee's
employment by the Company up to an aggregate of $10,000 each year, subject to
compliance with reimbursement policies from time to time adopted by the Company.
Reimbursable expenses include:
a. License fees, membership dues in professional organizations,
and subscriptions to professional and business journals and books.
b. The Employee's necessary travel, room, board, registration fees
and other expenses incurred in providing services, attending professional or
business seminars, post graduate educational courses, meetings or conventions,
but only if the Employee's attendance is for the purpose of improving the
Employee's professional or business ability or education, maintaining the
Employee's professional or business competence and proficiency, or at the
Company's request or otherwise benefiting the Company.
c. The Employee's entertainment and public relations expenses if
ordinary and necessary and in furtherance of the Company's business.
9. MALPRACTICE INSURANCE.
- 3 -
4
a. WHILE THE EMPLOYEE IS EMPLOYED BY THE COMPANY. The Company
shall maintain policies of professional liability insurance on the Employee
(including coverage for periods prior to the Employee's employment with the
Company) and the Company's other employees in such amounts and on such terms as
the Company may determine. The Employee shall 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.
b. TAIL COVERAGE.
(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 a Payment Breach
(as defined in Section 29c) or the death or Disability (as defined in
Section 17b) 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 cost shall be borne and paid by the
Employee or the Employee's estate, as applicable. If the Employee or
the Employee's estate 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 or the Employee's estate.
(2) If the Employee's employment terminates for any reason
other than those set forth in (1) above, the cost of such "tail"
coverage, if obtained, shall be paid by the Company without offset.
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.
10. FEES; PAYMENTS. The Company has, and hereby reserves, the sole and
exclusive authority to determine the fees (or a procedure for establishing the
fees) to be charged to the Company's patients, customers and clients. 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 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.
- 4 -
5
11. ACCEPTANCE OF PATIENTS. The Company shall have the sole and
exclusive authority to determine who will be accepted as patients of the
Company's practice and to designate, or establish a procedure for designating,
which professional employee of the Company will handle each such patient.
12. PROFESSIONAL POLICIES AND PROCEDURES. The Company shall at all
times 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 those policies and
procedures established by the Company from time to time. Such policies and
procedures 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 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.
14. PAID VACATION AND TIME OFF. The Employee shall be entitled to a
total of six (6) 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, other time off and such time as may be taken by the Employee to satisfy
the Employee's applicable CME requirements. All leave time must be coordinated
with and approved by a medical director appointed from time to time by the Board
of Directors of the Company 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 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.
a. TERMINATION FOR CAUSE. The Company may, in its sole and absolute
discretion, terminate the employment of Employee hereunder, at any time prior to
the expiration of 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" includes, but is not limited to, the following:
(1) If in the reasonable judgment of the Company's Board of
Directors, the Employee becomes unfit to properly practice pathology on
the Company's behalf;
(2) If the Employee's right to practice medicine in any state
is suspended, restricted, revoked, lapsed (other than a lapse due to
the
- 5 -
6
Employee's voluntary failure to maintain such license after becoming a
nonresident of that state);
(3) If the Employee willfully damages the Company's property,
business, reputation or goodwill;
(4) If the Employee is convicted of a crime other than a minor
traffic violation;
(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;
(6) If the Employee uses any mood altering or controlled
substances except as prescribed by a physician, or if the Employee uses
alcohol habitually or to excess;
(7) If the Employee willfully injures any independent
contractor, employee, or agent of the Company;
(8) If the Employee willfully injures any person in the course
of the performance of services for or on behalf of the Company;
(9) If the Employee discloses to a competitor or other
unauthorized person confidential, proprietary or secret information of
or regarding the Company in violation of a confidentiality obligation
owed to the Company or one or more of its Affiliates;
(10) 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), placed under probation or proctoring;
(11) If a guardian or conservator for the Employee is
appointed by a court of competent jurisdiction;
(12) If the Employee solicits business on behalf of a
competitor or potential competitor;
(13) 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;
- 6 -
7
(14) If the Employee accepts other employment that places
restrictions or limitations on the Employee's ability to continue
rendering professional services under this Agreement;
(15) If the Company's Board of Directors determines that the
Company is in jeopardy of losing a contract with a medical facility for
which the Employee is rendering pathology services because the
administration of such medical facility is dissatisfied with the
Employee's performance; or
(16) If, at any time, either of the following two events or
circumstances shall occur: (x) the Operating Earnings (as such term is
defined in the Purchase Agreement) for the 12 full calendar month
period preceding the date in question (I.E., the date the termination
of employment is considered), are equal to or less than $600,000; or
(y) the termination, for any cause, reason or justification whatsoever,
or lapsing of the contract the Company (or, following the Closing,
AmeriPath Florida) has with the Miami Heart Institute, unless the
Company's Miami Division (as such term is defined in the Purchase
Agreement) is able to replace or substitute the Miami Heart Institute
contract with a Contract with another hospital or medical facility
which contract produces at least 85% of the annual revenues produced by
the Miami Heart Institute contract (with the annual revenues based upon
the average of the two years preceding the date of termination or
lapsing).
(17) If the Employee fails to comply with any of the terms or
conditions of this Agreement or any material term or condition of any
agreement between the Company and a medical facility for which the
Company provides services, and such failure to comply shall continue
for a period of thirty (30) days after notice thereof by the Company.
The Company shall not be limited to termination as a remedy for any
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
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.
b. TERMINATION BY EMPLOYEE. Provided that the Company does not have
"cause" to terminate the Employee pursuant to subsection "a" above, the Employee
may voluntarily terminate the Employee's employment with the Company hereunder
at any time and for any reason, by giving written notice of such determination
not less than 120 days prior to the date such termination is to be effective.
Notwithstanding the foregoing, should there exist a Payment Breach by the
Company, the Employee may immediately terminate his employment with the Company.
- 7 -
8
16. THE EMPLOYEE'S DUTIES UPON EXPIRATION OR TERMINATION. If this
Agreement expires or is otherwise terminated for any reason (other than a
termination by the Employee due to a Payment Breach):
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.
17. TERMINATION OF EMPLOYMENT UPON DEATH OR DISABILITY
a. DEATH OF THE EMPLOYEE. In the event that the Employee shall die
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 120 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 hereunder (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).
b. DISABILITY OF THE EMPLOYEE. In the event that the Employee shall
become incapacitated by reason of sickness, accident or other mental or physical
disability during the term of his employment hereunder such that he is
substantially unable to perform his duties and responsibilities hereunder for a
period of 90 consecutive days, or for shorter or intermittent periods
aggregating 120 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 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 120 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 might receive under the Company's disability insurance policy, and
the Company shall have no further obligation or liability hereunder (other than
for any reimbursement
- 8 -
9
of reasonable out-of-pocket business expenses properly incurred by Employee
prior to his Disability and documented to the Company in accordance herewith).
18. LIMITATIONS ON AUTHORITY. Unless the Company has given the Employee
its express written consent, the Employee has no actual, apparent, or implied
authority to:
a. Pledge the credit or assets of the Company (or any Affiliate of the
Company) or 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).
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. NON-COMPETITION AND NON-SOLICITATION AGREEMENT.
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 development of the Company's good will and in the Employee's professional
development. The capital expended to develop this good will 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 and 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.
- 9 -
10
(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 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.
(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, during the
Employee's employment with the Company and during the Restricted Period (as
defined in Subsection "c" below), the Employee shall not:
(i) engage in the practice of pathology within the Counties of
Dade, Broward or Monroe, or in any other County in the State of Florida
in which the Company, or any Affiliate of the Company, is then doing
business or providing services (the "Restricted Territory"), or
(ii) from any facility or location, whether within or without
the Restricted Territory, knowingly (x) perform pathology services for
any patient, laboratory or health care provider located in the
Restricted Territory or (y) perform pathology services for any patient,
laboratory or health care provider who was or is
- 10 -
11
a customer, client or patient of the Company, or any Affiliate of the
Company; 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 (a) as an employee of a local, federal or
state government or agency; (b) in performing the Employee's duties as
a member of the United States military services or the National Guard;
or (c) on a locum tenens basis.
c. As used in this Agreement, the term "RESTRICTED PERIOD" shall
mean and include a period of two (2) years from the effective date of the
Employee's termination of employment with the Company (regardless of the cause,
reason or justification of any such termination); PROVIDED, HOWEVER, in the
event there shall be a Payment Breach, and such breach shall continue uncured
for a period of more than thirty (30) days, then the Restricted Period shall be
reduced to a period of zero (0) days.
d. The Employee further agrees that during the Restricted Period
the Employee will not knowingly, directly or indirectly, (a) solicit the
employment of any employee, agent or consultant 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 (b) induce any employee of the Company to leave
the employ 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 enforcing the covenant set
forth herein, if such a violation occurs. This Section 19 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 may cause irreparable injury to the Company.
20. 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 good will and reputation for integrity, quality and dependability. The
Employee
- 11 -
12
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, good will and reputation.
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 or her 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 20 may 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 for the sole benefit of the Company.
d. NON-DISCLOSURE. Except as required by law 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, so long as such counsel agrees to 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 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 or use any copies,
summaries or extracts thereof.
21. 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 have
specifically agreed and acknowledged
- 12 -
13
that the provisions of Sections 19 and 20 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 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.
22. OUTSIDE WORK. In the event that the Employee performs, provides or
renders professional or medical services outside of the Employee's employment
with the Company (only with the prior written consent of the Company), any
compensation received by or provided to or for the benefit of the Employee shall
be income of the Company and the Employee shall promptly deliver, pay and
transfer to the Company such compensation, in whatever form provided or
received, or the equivalent monetary value of such benefits.
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; PROVIDED, 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 its 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 its 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 AmeriPath, 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 Florida, Inc., 000 X. Xxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxx
Xxxxxxxxxx, XX 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
- 13 -
14
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 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 third party payor, 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 have the option of either (x) assigning 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 (y) terminating 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
- 14 -
15
and, except to the extent required by applicable law or regulations, 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
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) "PAYMENT BREACH" means and includes (i) the failure of the
Company to make payments under this Agreement for a period of thirty
(30) days after the first date upon which such payments are due and
owing; (ii) if an Event of Default as a result of the failure by
AmeriPath to pay principal or interest when due, under either the 7%
Non-Negotiable Subordinated Contingent Note or the 7% Non-Negotiable
Subordinated Note issued by AmeriPath, as borrower, to the Employee, as
the holder, pursuant to the Purchase Agreement and such failure shall
continue and remain uncured for thirty (30) days after notice from the
Employee; or (iii) the failure of AmeriPath to comply with the
obligations under the Stock Rights (as defined
- 15 -
16
in the Purchase Agreement) and such failure shall continue and remain
uncured for thirty (30) days after notice from the Employee.
(5) "PERSON" means and includes any corporation, partnership,
joint venture, company, syndicate, organization, association, trust,
entity, authority or natural person.
(6) "RESTRICTED PERIOD" shall have the meaning set forth in
Section 19(c) hereof.
d. REMEDIES. The parties hereto forever waive and relinquish any
right to recover from the other consequential damages in respect of this
Agreement. For purposes hereof, the term "consequential damages" means damages
which are remote, speculative, conjectural or contingent, or are not the direct
and proximate consequence of a party's breach, action or inaction.
e. ARBITRATION. Any controversy, dispute, disagreement or claim
arising under this Agreement, or any alleged breach hereof, shall be resolved
exclusively by binding arbitration, which shall be conducted in Dade or Broward
County, Florida in accordance with the National Health Lawyer's Association,
Alternative Dispute Resolution Service, Rules of Procedure for Arbitration, and
judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction over the matter.
f. 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.
- 16 -
17
IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreement as of the date first hereinabove set forth.
AMERIPATH FLORIDA, INC.
By: /s/ Xxxxxx X. Xxxx
-----------------------
Xxxxxx X. Xxxx
Chief Operating Officer
June 30, 1996
EMPLOYEE:
/s/ Xxx X. Xxxxx
--------------------------
XXX X. XXXXX, M.D.
Date: June 30, 1996
-------------------
The obligations and payments hereunder
are hereby guaranteed by AmeriPath, Inc. on
this 30th day of June, 1996, which guarantee
shall be of payment and not of collection.
AMERIPATH, INC.
By: /s/ Xxxxxx X. Xxxx
-----------------------
Xxxxxx X. Xxxx
Chief Operating Officer
- 17 -
