EMPLOYMENT AGREEMENT
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This agreement is made effective May 31, 1996, between American Dental
Partners, Inc., a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxxx
(the "Employee"), who hereby agree as follows:
(S)1. Employment. Upon the terms and subject to the conditions described
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in this agreement, the Company hereby employs the Employee and the Employee
hereby accepts employment by the Company.
(S)2. Term. Employee's employment with the Company shall begin on June 3,
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1996 (the "Commencement Date") and shall end on the third anniversary of the
Commencement Date (the "Initial Term"), unless or until sooner terminated
pursuant to (S)8 of this agreement. This agreement may be extended or renewed
after the expiration of the Initial Term, but only by mutual written agreement
of the Parties. When permitted by the context, any reference in this agreement
to the "term of this agreement" shall include the Initial Term and the period of
any such extensions or renewals.
(S)3. Services. The Employee shall serve as the Senior Vice President-
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Operations and Chief Operating Officer of the Company and shall devote his full
business and professional time, attention, energy, loyalty, and skill to the
business affairs of the Company, performing such executive and administrative
tasks and having such responsibilities as may be assigned to him from time to
time by the President and Chief Executive Officer of the Company (the "CEO") or
the board of directors of the Company (the "Board").
(S)4. Compensation. As compensation for his services under this
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agreement, the Company shall pay the Employee a base salary at the annual rate
of $125,000 (the "Base Rate"), payable in biweekly installments, in arrears, in
accordance with the Company's general policies and procedures for payment of
salaries to its executive personnel. In addition, each year during the term of
his employment with the Company, the Employee will be eligible to earn a bonus
in an amount up to $75,000, which will be based upon and tied to the achievement
of management objectives to be prepared annually by the CEO and submitted to the
Board for approval; provided that with respect to the fiscal year of the Company
ending December 31, 1996, the potential amount of such bonus shall be pro rated
over the period beginning on the Commencement Date and ending on the last day of
such fiscal year.
(S)5. Fringe Benefits and Perquisites. During the term of this agreement,
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the Employee shall be entitled to the following fringe benefits and perquisites:
(a) Group health and welfare benefits comparable to those offered
generally to the Company's executive employees from time to time;
(b) Three weeks paid vacation during each year of the
agreement, provided that for the fiscal year ending December 31, 1996, the
amount of such vacation shall be pro rated over the period beginning on the
Commencement Date and ending on the last day of such fiscal year, which
vacation may be taken during such year any time after September 30, 1996;
(c) Such other benefits and perquisites as may be offered generally
to the Company's executive personnel from time to time pursuant to such
terms, conditions, and policies as may be approved by the Board.
The parties acknowledge that the Company has yet to complete the
implementation of its group health benefit plan. Accordingly, the Company shall
reimburse the Employee for all costs (not to exceed $450 per month) incurred by
the Employee related to the maintenance of health insurance coverage for the
Employee and his immediate family with respect to the period beginning on the
date of this agreement and ending on the date upon which the Company completes
the implementation of such plan. Such reimbursable costs shall include without
limitation any expenses incurred by the Employee for health insurance coverage
purchased pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1986.
(S)6. Stock Option. As additional consideration for the Employee's
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covenants contained in this agreement, the Company will grant to the Employee,
effective the Commencement Date, options (the "Options") to purchase a total of
up to 10,000 shares of common stock, par value $.01 a share, of the Company (the
"Shares"), consisting of an Option to purchase up to 7,300 Shares pursuant to
the Company's 1996 Stock Option Plan and an Option to purchase up to 2,700
Shares pursuant to the Company's 1996 Time Accelerated Restricted Stock Option
Plan, each at an exercise price to be determined pursuant to such plans. The
Options shall be evidenced by separate agreements, the form of which are
attached hereto as Exhibits A and B.
(S)7. Confidentiality; Noncompetition. The Employee shall not, directly
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or indirectly, at any time (whether during the term of this agreement or
thereafter), disclose any Confidential Information (defined below) to any
person, association, organization, or entity (other than the Affiliated
Companies, as defined below), or use, or permit or assist any person,
association, organization, or entity (other than the Affiliated Companies) to
use, any Confidential Information, excepting only Confidential Information which
is then generally available to or obtainable by the public and which did not
become so available or obtainable through the breach of any provision of this
agreement by the Employee.
Upon termination of his employment with the Company (for any reason) (the
"Termination Date"), the Employee shall immediately deliver to the Company all
documents and other materials containing
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any Confidential Information which are in his possession or under his control.
During the Restricted Period (defined below), the Employee shall not
directly or indirectly (whether individually or as a shareholder or other owner,
partner, member, director, officer, employee, consultant, creditor or agent of
any person, association, or other entity):
(a) Enter into, engage in, or promote or assist (financially or
otherwise) any business which competes with the business of any Affiliated
Company (the "Business") anywhere in the Restricted Territory (defined
below);
(b) Solicit or attempt to solicit business from any providers of
dental services to which any Affiliated Company provides management,
consulting, or other services (a "Provider"), or interfere or attempt to
interfere with any relationship of any Affiliated Company with any Provider
anywhere in the Restricted Territory;
(c) Induce or encourage any employee, officer, director, agent,
supplier, or independent contractor of any Affiliated Company to terminate
its relationship with such Affiliated Company, or otherwise interfere or
attempt to interfere in any way with any Affiliated Company's relationships
with its employees, officers, directors, agents, suppliers, independent
contractors, or others;
(d) Employ or engage any person who, at any time within the one-
year period immediately preceding such employment or engagement, was an
employee, officer, director, agent, supplier, or independent contractor of
any Affiliated Company; or
(e) Take any other action which would impair the value of the
Business or the assets of any Affiliated Company, including without
limitation any action which would tend to disparage or diminish the
reputation of any Affiliated Company.
For purposes of this agreement: (i) "Affiliated Companies" shall include
the Company and all subsidiaries or affiliates of the Company (other than Summit
Ventures IV, L.P., and its affiliates which are not engaged in a business
similar to the Company or its subsidiaries), (ii) "Confidential Information"
shall mean all trade secrets, proprietary data, and other confidential
information of any Affiliated Company, including without limitation financial
information, information relating to business operations, services, promotional
practices, and relationships with Providers, suppliers, employees, independent
contractors, or other parties, and any information which any Affiliated Company
is obligated to treat as
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confidential pursuant to any course of dealing or any agreement to which it is a
party or otherwise bound; (iii) the "Restricted Period" shall mean the two-year
period following the date of termination (for any reason) of Employee's
employment with the Company (whether pursuant to this agreement or otherwise);
and (iv) the "Restricted Territory" shall mean all geographic areas in which the
Company has engaged in any business activity during the 12-month period
immediately preceding the Termination Date.
The Employee acknowledges that (A) the provisions of this section are
fundamental and essential for the protection of the Company's legitimate
business and proprietary interests, (B) such provisions are reasonable and
appropriate in all respects, and (C) in the event of any violation by the
Employee of any of such provisions, the Company would suffer irreparable harm
and its remedies at law would be inadequate. In the event of any violation or
attempted violation of such provisions by the Employee, the Company shall be
entitled to a temporary restraining order, temporary and permanent injunctions,
specific performance, and other equitable relief, without any showing of
irreparable harm or damage or the posting of any bond, in addition to any other
rights or remedies which may then be available to the Company.
(S)8. Termination. The Employee's employment with the Company shall
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terminate automatically upon the death of the Employee and may be terminated by
the Company, without any further obligation on the part of the Company (except
as provided in clause (c), below), immediately upon notice to the Employee under
any of the following circumstances:
(a) At any time for Cause (defined below);
(b) At any time if the Employee is under a Long-Term Disability (defined
below); or
(c) At any time without Cause; provided that if the Company terminates
the Employee's employment solely pursuant to this clause (c), then the Company
shall pay to the Employee severance pay in an amount equal to the Base Rate for
a period equal to the shorter of one year or the remainder of the Initial Term
as of the date of such termination.
For purposes of this agreement:
(i) "Cause" shall mean
(A) any act constituting (1) a felony under the laws of the
State of Massachusetts, the federal laws of the United States, or any other
applicable law, (2) fraud, embezzlement, misappropriation of assets, willful
misfeasance, or dishonesty, or (3) other criminal conduct which in any way
materially and adversely affects the reputation, goodwill, or business position
of
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the Company,
(B) the failure of the Employee to perform and observe all
obligations and conditions to be performed and observed by the Employee under
this agreement, or to perform his duties in accordance with the policies,
programs, budgets, procedures, and directions established from time to time by
the CEO or the Board (any such event, a "Performance Failure"), and to correct
any such Performance Failure promptly following notice from the Company to do
so, or
(C) having corrected a Performance Failure, the occurrence of
any subsequent Performance Failure; and
(ii) "Long-Term Disability" shall mean that, because of physical or
mental incapacity, it is more likely than not that the Employee will be unable,
within 180 days after his disability commenced, to engage actively in business
and financial activities. In the event of any disagreement about whether or
when the Employee is under a Long-Term Disability, the question shall be
determined: (A) by a physician selected by agreement between the Employee and
the Company if such a physician is selected within the 10 days after either of
them requests the other to so agree, or, if not, (B) by two physicians, the
first of whom shall be selected by the Employee and the second of whom shall be
selected by the Company or, if the Employee fails to make a selection within 10
days after being requested to do so by the Company, the second physician shall
be selected by the first physician, and (B) if the two physicians fail to agree,
by a third physician selected by the first two physicians. The Employee shall
submit to all reasonable examinations requested by any such physicians.
(S)9. Relocation Expenses. The Company shall reimburse the Employee,
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in accordance with and subject to the Company's policy concerning reimbursement
of employee expenses, for all reasonable costs and expenses incurred by the
Employee (except for any real estate commissions or fees incurred by the
Employee in connection with the sale of his principal residence in Georgia) in
connection with his relocation from Georgia to Massachusetts.
(S)10. Capacity. The Employee represents and warrants to the Company that
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the has the capacity and right to enter into this agreement and perform all
of his obligations under this agreement without any restriction.
(S)11. Remedies. All rights and remedies of the Company under this
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agreement are cumulative and in addition to all other rights and remedies which
may be available to the Company from time to time, whether under any other
agreement, at law, or in equity.
(S)12. Survival. The termination of the Employee's employment by the
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Company (for any reason) shall not relieve the Employee of
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any of his obligations to the Company existing at, arising as a result of, or
relating to acts or omissions occurring prior to, such termination. Without
limiting the generality of the preceding sentence, in no event shall the
termination of such employment modify or affect any obligations of the Employee
or rights of the Company under (S)7 of this agreement, all of which shall
survive the termination of such employment.
(S)13. Notices. All notices and other communications under this agreement
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to any Party shall be in writing and shall be deemed given when delivered
personally, telecopied (which is confirmed) to that Party at the telecopy number
for that Party set forth below, mailed by certified mail (return receipt
requested) to that Party at the address for that Party (or at such other address
for such Party as such Party shall have specified in notice to the other Party)
or delivered to Federal Express, UPS, or any similar express delivery service
for delivery to that Party at that address:
(a) If to the Company:
American Dental Partners, Inc.
x/x Xxxxxx Xxxxxxxx, X.X.
Xxxxx 0000
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
with a copy to
Xxxxx & Xxxxxxxxx
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
(b) If to the Employee:
Xxxxxx X. Xxxxxxxx
0000 Xxxxxxxxxxxx Xx. XX
Xxxxxxx, Xxxxxxx 00000-0000
(S)14. Severability. The intention of the Parties is to comply fully
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with all rules, laws, and public policies to the extent possible. If and to the
extent that any court of competent jurisdiction is unable to so construe any
provision of this agreement and holds that provision to be invalid, such
invalidity shall not affect the remaining provisions of this agreement, which
shall remain in full force and effect. With respect to any provision in this
agreement finally determined by such a court to be invalid or unenforceable,
such court shall have jurisdiction to reform this agreement to the extent
necessary to make such
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provision valid and enforceable, and, as reformed, such provision shall be
binding on the Parties.
(S)15. Non-Waiver. No failure by either Party to insist upon strict
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compliance with any term of this agreement, to exercise any option, to enforce
any right, or to seek any remedy upon any default of the other Party shall
affect, or constitute a waiver of, the other Party's right to insist upon such
strict compliance, exercise that option, enforce that right, or seek that remedy
with respect to that default or any prior, contemporaneous, or subsequent
default. No custom or practice of the Parties at variance with any provision of
this agreement shall affect or constitute a waiver of, either Party's right to
demand strict compliance with all provisions of this agreement.
(S)16. Complete Agreement. This agreement and all exhibits attached
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hereto, all of which are hereby incorporated herein by reference, contain the
entire agreement between the Parties and supersede all other agreements and
understandings between the Parties with respect to the subject matter of this
agreement. No alterations, additions, or other changes to this agreement shall
be made or be binding unless made in writing and signed by both Parties.
(S)17. Governing Law. This agreement shall be governed by and construed
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in accordance with the laws of the State of Massachusetts without regard to
principles of conflicts of law.
(S)18. Captions. The captions of the various sections of this
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agreement are not part of the context of this agreement, are only guides to
assist in locating those sections, and shall be ignored in construing this
agreement.
(S)19. Genders and Numbers. Where permitted by the context, each
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pronoun used in this agreement includes the same pronoun in other genders and
numbers, and each noun used in this agreement includes the same noun in other
numbers.
(S)20. Successors. This agreement shall be personal to the Employee and
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no rights or obligations of the Employee under this agreement may be assigned by
the Employee to any third party. Any assignment or attempted assignment by the
Employee in violation of the preceding sentence shall be null and void. Subject
to the
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foregoing, this agreement shall be binding upon, inure to the benefit of, and be
enforceable by and against the successors and assigns of each Party.
AMERICAN DENTAL PARTNERS, INC.
By /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxx, President XXXXXX X. XXXXXXXX
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AMENDMENT TO EMPLOYMENT AGREEMENT
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This agreement (the "Amendment") is made effective August 27, 1997, between
American Dental Partners, Inc., a Delaware corporation (the "Company"), and
Xxxxxx X. Xxxxxxxx (the "Employee").
Background Information
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The Company and the Employee (the "Parties") are the parties to an
Employment Agreement dated May 31, 1996 (the "Agreement"). The Parties desire to
amend the Agreement as it relates to the Employee's services to the Company and
are entering into this Amendment for that purpose.
Statement of Agreement
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The Parties hereby acknowledge the accuracy of the foregoing Background
Information and agree as follows:
(S)1. Services. Section 3 of the Agreement is hereby amended and restated
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to read in its entirety as follows:
(S)3. Services. The Employee shall serve as the Senior Vice
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President - Operations of the Company and shall devote his full business
and professional time, intention, energy, loyalty, and skill to the
business affairs of the Company, performing such executive and
administrative tasks and having such responsibilities as may be assigned
to him from time to time by the President and Chief Executive Officer of
the Company (the "CEO") or the Board of Directors of the company (the
"Board").
(S)2. Construction. In the event of any inconsistency between the
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provisions of the Agreement and the provisions of this Amendment, the provisions
of this Amendment shall control. Except as modified by this Amendment, the
Agreement shall remain in full force and effect without change. This Amendment
shall be binding upon, inure to the benefit of, and be enforceable by and
against the heirs, personal representatives, successors, and assigns of each
Party.
AMERICAN DENTAL PARTNERS, INC.
BY /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Chief
Executive Officer
/s/ Xxxxxx X. Xxxxxxxx
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XXXXXX X. XXXXXXXX
