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EXHIBIT 10.71
EMPLOYMENT AGREEMENT
MADE as of the 1st day of August, 1999 (the "Agreement"), by and
between VISION TWENTY-ONE, INC., a Florida corporation (the "Company"), and
XXXXXX XXXXXX (the "Executive").
WHEREAS, the Company is presently engaged in the business of providing
laser vision correction, ambulatory surgery center services and management, and
managed eye care, practice management and related services to ophthalmologists,
optometrists and other eye care providers;
WHEREAS, the Executive has extensive management experience and is
willing to serve as President of the Company's Managed Care Division;
WHEREAS, the Company wishes to assure itself of the services of the
Executive for the period provided in this Agreement and the Executive is
willing to serve in the employ of the Company for such period upon the terms
and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties, intending to be legally bound, hereby agree as follows:
1. EMPLOYMENT
The Company hereby agrees to employ the Executive upon the terms and
conditions herein contained, and the Executive hereby agrees to accept such
employment for the term described below. The Executive agrees to serve as the
President of the Company's Managed Care Division and to have such powers and
responsibilities consistent with his position as the Chief Operating Officer
may assign to him.
Throughout the term of this Agreement, the Executive shall devote his
best efforts and substantially all of his business time and services to the
business and affairs of the Company.
2. TERM OF AGREEMENT
The two (2) year initial term of employment under this Agreement shall
commence as of August 1, 1999 (the "Effective Date"). At the expiration of the
initial employment period, the term of the Executive's employment hereunder
shall automatically be extended without further action by the parties for
successive one (1) year renewal terms, provided that if either party gives the
other party at least thirty (60) days advance written notice of his or its
intention not to renew this Agreement for the additional term, the Agreement
shall terminate upon the expiration of the current term.
Notwithstanding the foregoing, the Company shall be entitled to
terminate this Agreement immediately, subject to a continuing obligation to
make any payments required under Section 5 below, if the Executive (i) becomes
disabled as described in Section 5(b), (ii) is terminated for Cause, as defined
in Section 5(c), or (iii) voluntarily terminates his employment before the
current term of this Agreement expires, as described in Section 5(d).
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3. SALARY AND BONUS
The Executive shall receive a base salary during the term of this
Agreement at a rate of not less than $225,000.00 per annum, payable in biweekly
installments consistent with the Company's normal payroll schedule. The
Compensation Committee of the Company's Board shall consult with the Chief
Executive Officer and the Chief Operating Officer to review this base salary at
annual intervals, and may adjust the Executive's annual base salary from time
to time as the Committee deems to be appropriate.
The Executive shall also be eligible to receive an annual incentive
bonus from the Company for each fiscal year of the Company during the term of
this Agreement. The Executive shall be eligible to receive up to 40 percent of
his annual base salary in effect on the last day of the year pursuant to the
terms of the Company's Incentive Compensation Program ("ICP").
The payment of a bonus to the Executive under terms of the ICP is
intended to comply with and shall be interpreted in accordance with the
requirements of Section 162(m) of the Internal Revenue Code, and accordingly,
if the Compensation Committee of the Board follows the foregoing requirements
and the annual bonus is disapproved by the Compensation Committee of the Board
accordance with said requirements, the Executive shall not be paid the
performance-based portion of the bonus for the fiscal year at issue, to the
extent such performance-based portion of the bonus causes the Executive's total
applicable remuneration to exceed $1,000,000 for the fiscal year at issue.
4. ADDITIONAL COMPENSATION AND BENEFITS
The Executive shall receive the following additional compensation and
welfare and fringe benefits:
(a) Stock Options. Pursuant to the terms of a separate stock option
agreement, the Executive shall be granted nonstatutory stock options
under the Company's 1996 Stock Incentive Plan with respect to 50,000
shares of common stock.
(b) Medical and Life Insurance. The Company shall provide the
Executive and his dependents with health insurance coverage on the
same basis as that from time to time made available to other
executives.
(c) Automobile. The Company will provide the Executive with the use of
a Company automobile. The Company will cover the costs of routine
maintenance, fuel and liability insurance for the leased vehicle. The
Executive will be responsible for appropriately reporting his personal
use of the vehicle for income tax purposes.
(d) Paid Time Off ("PTO"). The Executive shall be entitled to paid
time off for each Company-recognized holiday, and for such other time
as he shall take away from the work site, provided that his
performance is not adversely impacted.
In addition to the benefits provided pursuant to the preceding
paragraphs of this Section 4, the Executive shall be eligible to participate in
such other executive compensation and retirement plans of the Company as are
applicable generally to other executives, and in such welfare benefit
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plans, programs, practices and policies of the Company as are generally
applicable to other executives.
5. PAYMENTS UPON TERMINATION
(a) Involuntary Termination. If the Executive's employment is
terminated by the Company during the term of this Agreement for a reason other
than death, disability as described in paragraph (b), "Cause" as described in
paragraph (c), or voluntary termination by the Executive as described in
paragraph (d), the Executive shall be entitled to receive his salary and
welfare benefits until the later to occur of the date of termination of this
Agreement or the date that is twelve (12) months after the date of his
employment termination. For the purposes of the preceding sentence, "salary"
shall mean the highest annual base salary in effect during the year preceding
the employment termination. The Executive shall also receive any nonforfeitable
benefits already earned and payable to him under the terms of any deferred
compensation, incentive or other benefit plan maintained by the Company,
payable in accordance with the terms of the applicable plan. In the event that
the Company should during the term of this Agreement require the Executive to
relocate his business office outside the boundaries of Palm Beach County, he
shall have the right within sixty (60) days following this request to resign
from employment and have such resignation deemed to be an involuntary
termination triggering the severance provisions of this Section 5(a).
(b) Disability. The Company shall be entitled to terminate this
Agreement if the Board determines that the Executive has been unable to attend
to his duties for at least ninety consecutive (90) days because of a medically
diagnosable physical or mental condition, and has received a written opinion
from a physician acceptable to the Board that such condition prevents the
Executive from resuming full performance of his duties and is likely to
continue for an indefinite period. Upon such termination and subject to the
payment provision of the following sentence, the Company shall pay to Executive
a monthly disability benefit equal to one-twelfth (1/12th) of his current
annual base salary at the time he became disabled for the first six (6) months
of such disability, and one-twenty-fourth (1/24th) of his current annual base
salary thereafter. Payment of such disability benefit shall commence on the
last day of the month following the date of the termination by reason of
disability and cease with the earliest to occur of (i) the month in which the
Executive returns to active employment, either with the Company or otherwise,
(ii) the end of the initial term of this Agreement, or the current renewal
term, as the case may be, or (iii) the twenty-fourth (24th) month after the
date of the termination. Any amounts payable under this Section 5(b) shall be
reduced by any amounts paid to the Executive under any disability plan or other
disability program or insurance policies maintained or provided by the Company.
(c) Termination for Cause. If the Executive's employment is terminated
by the Company for Cause, the amount the Executive shall be entitled to receive
from the Company shall be limited to his base salary accrued through the date
of termination, and any nonforfeitable benefits already earned and payable to
the Executive under the terms of deferred compensation or incentive plans
maintained by the Company.
For purposes of this Agreement, the term "Cause" shall be limited to
(i) any action by the Executive involving willful disloyalty to the Company,
such as embezzlement, fraud, misappropriation of corporate assets or a breach
of the covenants set forth in Sections 9 and 10 below; or (ii) the Executive
being convicted of a felony; or (iii) the Executive being convicted of any
lesser crime or offense committed in connection with the performance of his
duties hereunder
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or involving moral turpitude; or (iv) the intentional and willful failure by
the Executive to substantially perform his duties hereunder as directed by the
Chief Operating Officer (other than any such failure resulting from the
Executive's incapacity due to physical or mental disability).
(d) Voluntary Termination by the Executive. If the Executive resigns
or otherwise voluntarily terminates his employment before the end of the
current term of this Agreement, the amount the Executive shall be entitled to
receive from the Company shall be limited to his base salary through the date
of termination, and any nonforfeitable benefits already earned and payable to
the Executive under the terms of any deferred compensation or incentive plans
of the Company.
For purposes of this paragraph, a resignation by the Executive shall
not be deemed to be voluntary if the Executive resigns during the period three
months following (i) his assignment to duties materially inconsistent with the
primary duties and responsibilities of his position, or (ii) the Company's
breach of any of its material obligations under this Agreement.
6. EFFECT OF CHANGE IN CORPORATE CONTROL
(a) In the event of a Change in Corporate Control, the vesting of any
stock options or other awards granted to the Executive under the terms of the
Company's 1996 Stock Incentive Plan shall become immediately vested in full
and, in the case of stock options, exercisable in full.
In addition, if, at any time during the period of twelve (12)
consecutive months following the occurrence of a Change in Corporate Control,
the Executive is involuntarily terminated (other than for Cause) by the
Company, the Executive shall be entitled to receive as severance pay in lieu of
the payments described in Section 5(a) above, a series of twelve (12) equal
monthly payments, each equal to one-twelfth (1/12th) of the sum of (i) the
Executive's annual base salary in effect at the time of the Change in Corporate
Control plus (ii) the annual bonus paid to the Executive with respect to the
last fiscal year of the Company ending prior to the Change in Corporate
Control.
(b) For purposes of this Agreement, a "Change in Corporate Control"
shall include any of the following events:
(1) The acquisition in one or more transactions of more than
thirty percent of the Company's outstanding Common Stock by any
corporation, or other person or group (within the meaning of Section
14(d)(3) of the Securities Exchange Act of 1934, as amended);
(2) Any merger or consolidation of the Company into or with
another corporation in which the Company is not the surviving entity,
or any transfer or sale of substantially all of the assets of the
Company or any merger or consolidation of the Company into or with
another corporation in which the Company is the surviving entity and,
in connection with such merger or consolidation, all or part of the
outstanding shares of Common Stock shall be changed into or exchanged
for other stock or securities of any other person, or cash, or any
other property.
(3) Any election of persons to the Board of Directors which
causes a majority of the Board of Directors to consist of persons
other than (i) persons who were members of the Board of Directors on
the Effective Date, and (ii) persons who were nominated for election
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as members of the Board by the Board of Directors (or a Committee of
the Board) at a time when the majority of the Board (or of such
Committee) consisted of persons who were members of the Board of
Directors on the Effective Date; provided, that any person nominated
for election by the Board of Directors composed entirely of persons
described in (i) or (ii), or of persons who were themselves nominated
by such Board, shall for this purpose be deemed to have been nominated
by a Board composed of persons described in (i).
(4) Any person, or group of persons, announces a tender offer
for at least thirty percent (30%) of the Company's Common Stock;
provided that, no acquisition of stock by any person in a public offering or
private placement of the Company's common stock approved by the Company's Board
of Directors, shall be considered a Change in Corporate Control.
(c) Notwithstanding anything else in this Agreement, the amount of
severance compensation payable to the Executive as a result of a Change in
Corporate Control under this Section 6, or otherwise, shall be limited to the
maximum amount the Company would be entitled to deduct pursuant to Section 280G
of the Internal Revenue Code of 1986, as amended.
7. DEATH
If the Executive dies during the term of this Agreement, the Company
shall pay to the Executive's estate a lump sum payment equal to the sum of the
Executive's base salary through the date of death, plus the total unpaid amount
of any bonuses earned with respect to the fiscal year of the Company most
recently ended, plus an amount equal to six (6) months' base salary at the rate
in effect on the date of death. Any amounts payable under this Section 7 shall
be reduced by any amounts paid to the Executive's beneficiaries or estate under
insurance program provided by the Company.
8. WITHHOLDING
The Company shall, to the extent permitted by law, have the right to
withhold and deduct from any payment hereunder any federal, state or local
taxes of any kind required by law to be withheld with respect to any such
payment.
9. PROTECTION OF CONFIDENTIAL INFORMATION
The Executive agrees that he will keep all confidential and
proprietary information of the Company or relating to its business (including,
but not limited to, information regarding the Company's customers, pricing
policies, methods of operation, proprietary computer programs and trade
secrets) confidential, and that he will not (except with the Company's prior
written consent), while in the employ of the Company or thereafter, disclose
any such confidential information to any person, firm, corporation, association
or other entity, other than in furtherance of his duties hereunder, and then
only to those with a "need to know." The Executive shall not make use of any
such confidential information for his own purposes or for the benefit of any
person, firm, corporation, association or other entity (except the Company)
under any circumstances during or after the term of his employment. The
foregoing shall not apply to any information which is
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already in the public domain, or is generally disclosed by the Company or is
otherwise in the public domain at the time of disclosure.
The Executive recognizes that because his work for the Company will
bring him into contact with confidential and proprietary information of the
Company, the restrictions of this Section 9 are required for the reasonable
protection of the Company and its investments and for the Company's reliance on
and confidence in the Executive.
10. COVENANT NOT TO COMPETE
The Executive hereby agrees that he will not, either during the
Employment Term or until such time as all payments made pursuant to the
provisions of Section 5 of this Agreement cease, engage in any business
activities on behalf of any enterprise which competes with the Company in any
business in which the Company is now engaged or any other business in which the
Company is actively engaged at the time of the termination. The Executive will
be deemed to be engaged in such competitive business activities if he
participates in such a business enterprise as an employee, officer, director,
consultant, agent, partner, proprietor, or other participant; provided that the
ownership of no more than 2 percent of the stock of a publicly traded
corporation engaged in a competitive business shall not be deemed to be
engaging in competitive business activities.
The Executive agrees that he shall not, for a period of one year from
the time his employment under this Agreement ceases (for whatever reason), or,
if later, during any period in which he is receiving monthly severance payments
under Section 5 of this Agreement,
(i) solicit any employee or full-time consultant of the Company for
the purposes of hiring or retaining such employee or consultant, or
(ii) solicit any present or prospective client of the Company for the
purposes of offering such client services or products that are similar
to those the Company is actively engaged in providing at the time of
the Executive's termination.
11. INJUNCTIVE RELIEF
The Executive acknowledges and agrees that it would be difficult to
fully compensate the Company for damages resulting from the breach or
threatened breach of the covenants set forth in Sections 9 and 10 of this
Agreement and accordingly agrees that the Company shall be entitled to
temporary and injunctive relief, including temporary restraining orders,
preliminary injunctions and permanent injunctions, to enforce such provisions
in any action or proceeding instituted in the United States District Court for
the Western District of Florida or in any court in the State of Florida having
subject matter jurisdiction. This provision with respect to injunctive relief
shall not, however, diminish the Company's right to claim and recover damages.
It is expressly understood and agreed that although the parties
consider the restrictions contained in this Agreement to be reasonable, if a
court determines that the time or territory or any other restriction contained
in this Agreement is an unenforceable restriction on the activities of the
Executive, no such provision of this Agreement shall be rendered void but shall
be deemed amended to apply as to such maximum time and territory and to such
extent as such court may judicially determine or indicate to be reasonable.
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12. SEPARABILITY
If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the remaining provisions hereof which shall remain in full force and
effect.
13. ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the
heirs and representatives of the Executive and the assigns and successors of
the Company, but neither this Agreement nor any rights hereunder shall be
assignable or otherwise subject to hypothecation by the Executive.
14. ENTIRE AGREEMENT
This Agreement represents the entire agreement of the parties and
shall supersede any and all previous contracts, arrangements or understandings
between the Company and the Executive. The Agreement may be amended at any time
only by mutual written agreement of the parties hereto.
15. GOVERNING LAW
This Agreement shall be construed, interpreted, and governed in
accordance with the laws of the State of Florida, other than the conflict of
laws provisions of such laws.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed, and the Executive has hereunto set his hand, as of the day and year
first above written.
Attest: VISION TWENTY-ONE, INC.
/s/ Xxxxxx Xxxxxxx /s/ Xxxxxxxx Xxxxxxxx
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President/COO Chief Executive Officer
Witness:
/s/ /s/ Xxxxxx Xxxxxx
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XXXXXX XXXXXX
