Exhibit 10.28
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into at
Knoxville, Tennessee effective as of the 4th day of October, 2004, by and
between Team Health, Inc., a Tennessee corporation (the "Company"), and Xxxxxxx
X. Xxxx ("Employee").
WITNESSETH:
WHEREAS, the Company desires to employ Employee pursuant to the terms of
this Agreement; and
WHEREAS, Employee desires to be so employed pursuant to the terms of this
Agreement.
NOW THEREFORE, the parties agree as follows:
1. Employment and Term. The Company agrees to employ Employee and Employee
agrees to be employed by the Company pursuant to the terms of this Agreement to
perform the duties assigned to Employee by the Company consistent with his
position. Employee's title shall be President and Chief Operating Officer of
Team Health, Inc., reporting to the Chief Executive Officer of the Company. The
term of this Agreement shall begin on or around November 8, 2004 or such earlier
times as is mutually agreed between the parties (the "Effective Date") and be
for a period of five (5) years, subject to earlier termination pursuant to this
Agreement. Thereafter, this Agreement shall automatically renew for successive
one (1) year terms unless (i) sooner terminated pursuant to the terms of this
Agreement or (ii) either party gives the other party written notice of its
intention not to renew at least one hundred fifty (150) days prior to the
expiration of the then current term.
2. Duties. Employee will perform all duties customarily incident to
Employee's position, and such reasonable duties which may from time to time be
assigned to Employee by the Company provided such duties are consistent with his
position and title. During the term of this Agreement, Employee shall exert
Employee's best efforts and devote Employee's full time and attention to
Employee's employment hereunder and the affairs of the Company.
3. Compensation.
3.1 Salary. During the term of this Agreement, Employee shall
receive an annualized salary of Four Hundred Thousand Dollars ($400,000),
payable in accordance with the Company's normal payroll procedures. In addition,
the Company may, in its sole discretion, increase Employee's salary from time to
time without written amendment to this Agreement.
3.2 Bonus. Commencing with the Effective Date and thereafter during
the term of Employee's employment by the Company, in addition to Employee's base
salary,
Employee shall be entitled to a Bonus as determined in accordance with Exhibit
A. * For the portion of year 2004 which Employee is employed (commencing with
the Employment date and ending December 31, 2004), the Employee bonus will be
pro-rated by the percentage determined by dividing the number of days he was so
employed during 2004 by 365. For the portion(s) of the term of employment
occurring after December, 31, 2004 the Bonus will be determined in accordance
with Exhibit A.
* The Bonus Plan may be changed from time to time at the Company's
discretion. At all times Employee's Bonus Plan design will be commensurate with
other similarly or highly placed employees.
3.3 Taxes and Other Applicable Deductions. The Company shall
withhold from all compensation paid to Employee all applicable sums for Federal
Income Tax, FICA, and such other amounts as are necessary and applicable.
3.4 Stock Option Grant. Commencing with the Effective Date, Employee
will be granted the right to purchase 85,000 Common Shares of Team Health at a
price of $15.18 per share, pursuant to the terms and conditions of the 1999
Stock Option Plan and the related Stock Option Agreement, a copy of which has
been or will be delivered to Employee. Employee will also be eligible to receive
such other stock option grants on terms and in such amounts approved by the
Board of Directors and will be treated the same as other similarly situated
employees with respect to such future grants.
3.5 Additional Equity Investment. For a period of 120 days,
commencing with the Effective Date, ( the "Units Purchase Date"), Employee is
hereby granted the right to purchase up to one hundred thousand dollars
($100,000) Dollars of Units in Team Health Holdings, L.L.C. For the purpose
hereof, the Units referred to herein shall be issuances by Team Health Holdings,
L.L.C. ("Holdings") as authorized by Holding's Amended and Restated Limited
Liability Company Agreement, dated March 12, 1999, (the "Operating Agreement")
and the terms of the issuance of such Units shall be in accordance with the
Operating Agreement and substantially in the form of the Management Unit
Purchase Agreement and related documents, copies of which will be delivered to
Employee within 10 days of the Effective Date.
4. Benefits. In addition to Employee's salary, Employee shall be entitled
to all standard benefits, (health, life, dental, and disability) in accordance
with those normally provided by the Company to its similarly situated employees,
which may be sponsored, developed or established by the Company from time to
time in the sole discretion of the Company. During the term of this Agreement,
Employee shall be entitled to paid time off and sick leave in accordance with
the Company's policies and procedures in effect from time to time regarding
similarly situated employees of the Company. Employee shall schedule time off at
such time or times approved by the Company so as not to interfere with the
Company's operations. Subject to the requirements of the Company's 401(k) Plan
and the related Supplemental Employee Retirement Plan (the "Plans"), Employee
shall be able to participate in the Plans to the same extent as similarly
situated employees.
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5. Business Expenses. The Company will reimburse Employee for Employee's
usual and customary business expenses incurred in the course of Employee's
employment in accordance with the Company's applicable policies and procedures,
including expenditure limits and substantiation requirements, in effect from
time to time regarding reimbursement of expenses incurred by similar situated
employees of the Company. Employee will also be reimbursed for the costs of his
relocation to Knoxville, Tennessee in accordance with the Company's relocation
benefit policy, a copy of which is attached as Exhibit B.
6. Termination.
6.1 Automatic Termination. This Agreement shall terminate upon the
occurrence of either of the following events:
(a) in the event the Company and Employee shall mutually agree
to termination in writing; or
(b) upon the death of Employee.
6.2 Discretionary Termination or For Good Reason.
(a) This Agreement may be terminated immediately, at the
option of the Company, upon the occurrence of any of the following events:
(i) Employee's conduct which is materially detrimental
to the Company (or any Related Company, as defined in Section 7.1 below) or the
Company's (or any Related Company's) relationship with any person or entity;
(ii) Employee's commission of a felony, or any material
act of fraud, dishonesty, or misrepresentation, or any other act of moral
turpitude;
(iii) Employee's use of any addictive substance,
including, without limitation, alcohol, barbiturates and narcotic drugs, which
impairs Employee's ability to perform Employee's duties hereunder as determined
by the Company;
(iv) Employee's conduct which tends to bring the Company
or any other Related Company into substantial public disgrace or disrepute; or
(v) Employee's gross negligence or willful misconduct
with respect to the Company or any other Related Company.
(vi) Employees failure to relocate his family and make
his family's permanent place of residence as Knoxville, TN on or before July 1,
2005
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(b) Upon the occurrence of any event set forth in Section
6.2(a), the Company may terminate this Agreement by giving written notice to
Employee, and employee shall be paid his salary through the date of termination,
after which Employer will have no further obligations to Employee under the
Agreement, except as otherwise provided for in this Agreement or in any other
agreement or plan. Such termination shall be without prejudice to any other
remedy to which the Company may be entitled, either by law, or in equity, or
under the terms of this Agreement.
(c) Subject to Section 6.2 (d) below, this Agreement may be
terminated at the option of Employee for Good Reason. For purposes of this
Agreement "good reason" shall mean the occurrence of the following events:
(i) a reduction in Employee's compensation below the
amount of compensation in effect n the Effective Date; or
(ii) a reduction in Employee's title, duties or
authority as the Company's President and Chief Operating Officer.
(iii) Employer requires Employee to relocate his
residence outside Tennessee for any reason or the corporate office is moved
outside of Tennessee.
(d) Employee may terminate for Good Reason, but only after
Employee has provided Employer with written notice specifying the basis of such
termination and Employer has failed to remedy the basis of the termination to
the reasonable satisfaction of Employee within thirty (30) days following
receipt of the notice from Employee.
6.3 Termination upon Default. This Agreement may be immediately
terminated by either party in the event that the other party materially breaches
this Agreement and/or fails to promptly and adequately perform their duties
hereunder in accordance with the terms and conditions of this Agreement;
provided, however, that the breaching party shall have ten (10) days (or such
greater period as may be mutually agreed upon by the parties) to cure such
breach or failure after receiving written notice thereof from the other party.
6.4 Termination without Cause. Notwithstanding any other provision
of this Agreement, either party may terminate this Agreement without cause upon
not less than one hundred eighty (180) days (the "Notice Period") prior written
notice to the other party. If Employee gives the Company notice of termination
pursuant to this Section 6.4, the Company may, upon the date such notice is
given, or anytime thereafter, relieve Employee, in whole or in part, of
Employee's duties and/or accelerate the date of termination, and Employee shall
only be entitled to compensation through the last day Employee works. If the
Company gives Employee notice of termination pursuant to this Section 6.4, the
Company may, upon the date such notice is given, or anytime thereafter, relieve
Employee, in whole or in part, of Employee's duties and/or accelerate the date
of termination, provided that Employee shall be entitled to compensation
hereunder as if Employee had worked through the end of the Notice Period.
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6.5 Compensation upon Termination by Employer without Cause or by
Employee for Good Reason. If this Agreement is terminated by the Company without
cause (as provided in Section 6.4) or terminated by Employee for Good Reason (as
provided in Section 6.2 (c) and Section 6.2 (d)), Employee will, in addition to
the Notice Period Set forth in 6.4 if the Company terminates the Agreement
without cause, receive (a) Employee's base salary for eighteen (18) months
following the date of termination (the "Termination Period"), (b) a pro-rated
Bonus for the year in which he is terminated (pro-rated based on the number of
days Employee worked over the entire twelve month Measuring Period) payable if
the financial targets for the Company and the individual groups identified in
Exhibit A, (i)-(iv) are met or exceeded as set forth in Exhibit A and (c)
medical and dental benefits for Employee paid for by the Company during the
Notice Period and the Termination Period (specifically including COBRA benefits
for such time if required). Notwithstanding anything herein to the contrary, in
no event shall Employee (or Employee's estate) be entitled to additional
compensation for the economic value of any benefits provided by, or expenses
paid by, the Company pursuant to this Agreement, including unused vacation or
sick leave, upon such termination. After receiving the payments provided under
this Section 6.5, neither Employee nor Employee's estate shall have any further
rights against the Company for compensation under this Agreement.
7. Covenants.
7.1 Preliminary Statement. Employee acknowledges that by virtue of
Employee's duties under this Agreement, Employee shall become aware of various
sensitive and confidential information, and shall develop contacts and
relationships which Employee otherwise would not have had access to or
developed. Employee further acknowledges that such information and relationships
would give Employee an unfair competitive advantage should Employee compete with
the Company. Employee further acknowledges that the Company has certain
subsidiaries, affiliates and "friendly corporations and associations"
(collectively, the "Related Companies") and that Employee may also become aware
of certain confidential information relating to the Related Companies and will
develop certain contacts and relationships with clients or customers of the
Related Companies which would give Employee an unfair competitive advantage if
Employee should compete with the Related Companies. Accordingly, Employee agrees
that Employee shall not, directly or indirectly, whether alone or as a partner,
officer, director, investor, employee, agent, member or shareholder of any other
entity or corporation, without the prior written consent of the Company, violate
any of the covenants (the "Covenants") set forth in this Section 7. For purposes
of this Agreement, the term "affiliate" shall mean any person or entity which
controls, is controlled by, or is under common control with the Company or a
Related Company. The term "Friendly corporations or associations" herein shall
mean any professional corporation or professional association with whom Team
Health or any of its affiliates has contracted to provide services to hospitals.
7.2 Covenant Not to Divulge Confidential Information. During the
term of Employee's employment with the Company, whether pursuant to this
Agreement or otherwise, and after termination of Employee's employment with the
Company, Employee shall not (i) use
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any Confidential Information of or concerning the Company or the Related
Companies except for the Company's benefit or (ii) disclose or divulge to any
third party any Confidential Information relating to the Company or the Related
Companies, except as otherwise required by law. "Confidential Information" shall
mean information concerning the Company or any Related Company, whether written
or oral, which Employee is or becomes aware of and which has not been publicly
disclosed. Information shall not be deemed "publicly disclosed" if disclosed by
Employee in violation of this Agreement or as a result of such information being
disclosed to employees or agents of the Company or any Related Company.
Moreover, the parties agree that all Confidential Information shall be deemed to
be trade secrets.
7.3 Covenant Not to Compete or Interfere with Business
Relationships. During the term of Employee's employment with the Company,
whether pursuant to this Agreement or otherwise, and for two (2) years after
termination of Employee's employment with the Company, Employee shall not engage
in any activity competitive with or adverse to the Company or any Related
Company, including the following:
(i) solicit or hire (for Employee or on behalf of a third
party) any person who is then, or during the term of this Agreement was, an
employee or contractor (including, without limitation, any contract physicians)
of the Company or any Related Company. Contract physicians shall include those
physicians with whom the Company or any Related Company then has a contract, or
which have actively been recruited by the Company or any Related Company within
one hundred eighty (180) days prior to termination of Employee's employment;
(ii) induce or attempt to induce any person or entity doing
business with the Company or any Related Company, to terminate such
relationship, or engage in any other activity detrimental to the Company or any
Related Company. Specifically, Employee shall not solicit or contract with (a)
any then current client of the Company or any Related Company, (b) any client
with which the Company or any Related Company did business during the one (1)
year period immediately prior to termination of Employee's employment with the
Company, or (c) any prospective client of the Company or any Related Company
which the Company or a Related Company was "actively seeking" to do business
with within the one (1) year period immediately before termination of Employee's
employment with the Company. (For purposes of this Agreement, the Company or a
Related Company will be deemed to have been "actively seeking" to do business
with a prospective client if the Company or a Related Company did any of the
following: (A) met with the administration of such prospective client, (B)
submitted a response to a Request for Proposal ("RFP") or other formal proposal
from such prospective client, or (C) made any other written response to a
request, solicitation, or initial discussion by or with such prospective
client.); or
(iii) be employed by or have any financial relationship with
any entity which directly or indirectly performs any competitive activity which
Employee is individually prohibited from performing under the terms of this
Agreement. It is understood and agreed that this Section (iii) is not intended
to prohibit Employee from, and Employee shall not be prohibited
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from, being employed by facility healthcare providers such as hospitals, surgery
centers and the like.
Except as specifically provided herein, the parties agree that
Employee is free to engage in any business activity, not otherwise prohibited by
this Agreement, in any geographic location.
7.4 Construction. For purposes of this Section 7, the term "then"
shall mean at the time of Employee's engagement in the applicable conduct. The
Covenants are essential elements of this Agreement, and but for Employee's
agreement to comply with the Covenants, the Company would not have entered into
this Agreement. The Covenants shall be construed as independent of any other
provisions in this Agreement. Except as provided in Section 7.6 below, the
existence of any claim or cause of action of Employee against the Company or any
Related Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement of any of the Covenants. The period of
time during which Employee is prohibited from engaging in the business practices
described in the Covenants shall be extended by any length of time during which
Employee is in breach of the Covenants. The Company and Employee agree that the
Covenants are appropriate and reasonable when considered in light of the nature
and extent of the business conducted by the Company. However, if a court of
competent jurisdiction determines that any portion of the Covenants, including
without limitation, the specific time period, scope or geographical area, is
unreasonable or against public policy, then such Covenants shall be considered
divisible as to time, scope, and geographical area and the maximum time period,
scope or geographical area which is determined to be reasonable and not against
public policy shall be enforced.
7.5 Remedies. The parties agree that if Employee breaches any
Covenant, the Company or the Related Companies, as applicable, will suffer
irreparable damages and Employee will receive a benefit for which Employee had
not paid. Employee agrees that (i) damages at law will be difficult to measure
and an insufficient remedy to the Company or a Related Company in the event that
Employee violates the terms of this Section 7 and (ii) the Company and the
Related Companies shall be entitled, upon application to a court of competent
jurisdiction, to obtain injunctive relief to enforce the provisions of this
Section 7 without the necessity of posting a bond or proving actual damages,
which injunctive relief shall be in addition to any other rights or remedies
available to the Company or the Related Companies. No remedy shall be exclusive
of any other, and neither application for nor obtaining injunctive or other
relief shall preclude any other remedy available, including money damages and
reasonable attorneys' fees. Employee acknowledges and agrees that the Related
Companies are intended beneficiaries of the Covenants and shall have the same
rights and remedies as the Company to enforce the Covenants.
7.6 Limitation on Enforcement. In the event the Company materially
breaches this Agreement by failing to meet a payment obligation hereunder (as
defined below), and Employee is not in breach of this Agreement, then Employee
shall no longer be bound by the Covenants. For purposes of this Agreement,
"materially breaches this Agreement by failing to meet a payment obligation
hereunder" shall mean (i) the Company has failed to meet a payment
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obligation hereunder (and likewise failed to cure such nonpayment within thirty
(30) days following notice from Employee) and (ii) the Company did not have a
good faith basis to not pay the disputed payment to Employee. If the Company has
a good faith dispute regarding the amount owed to Employee, such dispute shall
be submitted to arbitration pursuant to Section 10.12 herein. If a good faith
dispute does exist regarding any payment obligation, the Company shall only be
deemed to have materially breached this Agreement by failing to meet a payment
obligation hereunder if, after the amount to be paid is determined by an
arbitrator, the Company does not pay such amount awarded by the arbitrator
within thirty (30) days after the arbitrator's decision.
8. Inventions and Intellectual Property. Employee acknowledges that all
developments, including, without limitation, inventions, patentable or
otherwise, discoveries, improvements, patents, trade secrets, designs, reports,
computer software, flow charts and diagrams, procedures, data, documentation,
ideas and writings and applications thereof relating to the present or planned
business of the Company or any Related Company that, alone or jointly with
others, Employee may conceive, create, make, develop, reduce to practice or
acquire during the term of this Agreement (collectively, the "Developments") are
works made for hire and shall remain 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 all such Developments. All related items,
including, but not limited to, memoranda, notes, lists, charts, drawings,
records, files, computer software, programs, source and programming narratives
and other documentation (and all copies thereof) made or compiled by Employee,
or made available to Employee, concerning the business or planned business of
the Company or any Related Company shall be the property of the Company and
shall be delivered to the Company promptly upon the termination of this
Agreement. The provisions of this Section 8 shall survive the termination of
this Agreement.
9. Key Person Insurance. The Company shall have the option to purchase key
person disability and/or life insurance policies regarding Employee which name
the Company or its designee as beneficiary. Employee agrees to cooperate with
the Company in obtaining such policies including, without limitation, submitting
to a reasonably requested medical examination.
10. Miscellaneous.
10.1 Entire Agreement and Modification. This Agreement sets forth
the entire understanding of the parties with respect to the subject matter
hereof, supersedes all existing agreements between them concerning such subject
matter, and may be modified only by a written instrument duly executed by both
parties.
10.2 Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or first class mail, to the addresses
below, or hand-delivered to the party to whom it is to be given. Any party may
change such address by written notice to the other party. Any notice or
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other communication given by certified mail or first class mail shall be deemed
given two (2) days after mailing thereof, except for a notice changing a party's
address which shall be deemed given at the time of receipt thereof.
If to the Company: Team Health, Inc.
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: President
With a copy to: Team Health, Inc.
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
If to Employee Xxxx Xxxx
00 Xxxx Xxxxx
Xx. Xxxxxxxxxxx, Xxxx, 00000
Notwithstanding anything herein to the contrary, if actual written notice is
received, regardless of the means of transmittal, such notice shall be deemed to
be acceptable and effective as proper notice under this Section 10.2.
10.3 Waiver. The failure of a party to insist upon strict adherence
to any term of this Agreement on one or more occasion shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any waiver must be
in writing. Any waiver by any party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement.
10.4 Assignment and Binding Effect. Employee may not sell, assign,
transfer, or otherwise convey any of Employee's rights or delegate any of
Employee's duties under this Agreement without the prior written consent of the
Company. Otherwise, this Agreement shall be binding upon and inure to the
benefit of the parties and their successors, assigns, heirs, representatives and
beneficiaries.
10.5 Severability. Except as otherwise provided in Section 7.4, in
the event that any provision in this Agreement shall be found by a court,
arbitrator, referee or governmental authority of competent jurisdiction to be
invalid, illegal or unenforceable, such provision shall be construed and
enforced as if it had been narrowly drawn so as not to be invalid, illegal or
unenforceable, and the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby, and if any provision is inapplicable to any person or circumstance, it
shall nevertheless remain applicable to all other persons and circumstances.
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10.6 Headings. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
10.7 Governing Law, Venue and Limitations Period. Tennessee law
shall govern the rights and obligations under this Agreement, without giving
effect to any conflict of laws principles that would require application of the
laws of any other jurisdiction. In the event litigation is necessary, despite
the provisions of Section 10.12 below, such legal action shall be commenced only
in a court of competent jurisdiction in Xxxx County, Tennessee; litigation
commenced other than in Xxxx County, Tennessee shall be subject to being
dismissed, stayed or having venue transferred to Xxxx County at the option of
the party not commencing said litigation. The parties further waive all
objections and defenses to litigation being conducted in Xxxx County, Tennessee,
based upon venue or under the doctrine of forum non conveniens. Legal
proceedings for breach of this Agreement shall be commenced within twelve (12)
months from the date on which the party bringing such action becomes aware of
the event giving rise to such action or thereafter be barred.
10.8 Name or Ownership Change. This Agreement shall continue in full
force and effect in the event of a change in the name or ownership of the
Company.
10.9 Confidentiality. The parties acknowledge and agree that this
Agreement and each of its provisions are and shall be treated strictly
confidential. During the term of this Agreement and thereafter, Employee shall
not disclose any terms or information pertaining to any provision of this
Agreement to any person or entity without the prior written consent of the
Company, with the exception of Employee's tax, legal or accounting advisors for
legitimate business purposes of Employee, or as otherwise required by law.
10.10 Compliance with other Agreements. Employee represents and
warrants that the execution of this Agreement and Employee's performance of
Employee's obligations hereunder will not conflict with, or result in a breach
of any provision of, or result in the termination of, or constitute a default
under, any agreement to which Employee is a party or by which Employee is or may
be bound.
10.11 Survival. Termination of this Agreement shall not terminate
any continuing obligation(s) of the parties under this Agreement, and the
parties hereby agree that such obligation(s) shall survive termination, unless
the context of the obligation(s) requires otherwise.
10.12 Arbitration. Except as otherwise provided herein, all
controversies, disputes, or claims arising out of or relating to this Agreement
or the performance by the parties of the terms hereof shall be submitted to
binding arbitration in Knoxville, Tennessee, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect, or
such rules as the parties may agree upon. Subject to the provisions of Section
7.5 herein, the arbitrator(s) shall have the authority to award relief under
legal or equitable principles, including interim or preliminary relief, and to
allocate responsibility for the costs of arbitration and to award recovery of
attorneys' fees and expenses in such a manner as is determined to be
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appropriate by the arbitrator(s). The arbitration award shall be enforceable in
any court having jurisdiction. This Section 10.12 shall not apply to any claim
brought in a court of competent jurisdiction to enforce an arbitration award or
to obtain equitable relief. Moreover, this Section 10.12 shall not preclude any
action (including court action) taken by the Company or any Related Company to
enforce Section 7 hereof, and no application for arbitration or for a court
order compelling arbitration under this Section 10.12 shall be a ground for
staying or enjoining any action brought to enforce Section 7 hereof.
10.13 Enforcement Costs. If any legal action or other proceeding is
brought, other than pursuant to Section 10.12 herein, for the enforcement of any
of the terms or conditions of this Agreement, or because of an alleged dispute,
breach, or default, in connection with any of the provisions of this Agreement
the prevailing party in such action shall be entitled to recover from the
non-prevailing party the costs it incurred in such action, including but not
limited to, reasonable attorneys' fees and costs and other expenses incurred at
trial and in appellate proceedings, in addition to any other relief to which
such party may be entitled. The extent to which a party is determined to be a
"prevailing party" and the appropriate allocation of attorneys' fees and costs
and other expenses shall be decided by (i) the arbitrator under Section 10.12 or
(ii) the court, as the case may be.
10.14 No Rule of Construction. This Agreement shall not be construed
either against or in favor of any party hereto based upon any party's role in
drafting this Agreement, but rather in accordance with the fair meaning hereof.
IN WITNESS WHEREOF the parties have entered into this Agreement effective
as of the date first written above.
COMPANY:
By: S/ X.X. Xxxxxxxxxx
------------------
Its: CEO
EMPLOYEE: S/ Xxxx Xxxx
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EXHIBIT A
Employee shall be entitled to participate in a Team Health Bonus Plan
based upon factors determined from year to year by the Board of Directors of
Team Health or a designated committee thereof ("Board). The Bonus Plan will be
based upon achievement of (a) certain earnings and other goals and target
performance of Team Health, Inc. (the "Company") as a whole, (b) certain
earnings and other goals and target performances based upon a portion of the
Company and/or an affiliate or Related Company of the Company or any combination
thereof (collectively "Affiliate") designated by the Board and (c) certain
personal goals and personal performance determined in the discretion of the
Board, all during the Measuring Period, as provided below.
1. The Company shall establish from time to time Company Target EBITDA,
Targets and other goals for certain periods of time not to exceed one (1) year
("Measuring Period"). Employee shall be notified of such Company Target EBITDA,
Affiliate Target EBITDA and other goals for the applicable Measuring Period
within seventy-five (75) days of the end of the preceding Measuring Period (or
75 days after the Effective Date, whichever is later). For the year 2004 the
bonus amount will be calculated using the following factors ("factors"):
(i) Twenty-Six (26%) percent of the Bonus Amount will be based upon
achievement of the 2004 financial targets of the ED group;
(ii) Thirty-two (32%) percent of the Bonus Amount will be based upon
achievement of the 2004 financial targets of the Company excluding
Spectrum Healthcare Resources ("SHR") from either target
calculation;
(iii) Eleven (11%) percent of the Bonus Amount will be based upon
achievement of the 2004 financial targets for the SHR group for the
first six months of the 2004 Measurement Period;
(iv) Eleven (11%) percent of the Bonus Amount will be based upon
achievement of the 2004 financial targets for the SHR group for the
last six months of the 2004 Measurement Period
(v) Twenty (20%) of the Bonus Amount will be based upon the achievement
of certain discretionary goals as determined by the Board of the
Company.
If the actual financial targets, and the actual performance of Employee equals
the financial targets of the Company and the individual groups above, and the
other goals established for such Measuring Period, Employee shall receive up to
fifty percent (50%) of Employee's base salary received during the Measuring
Period as a Bonus (the "Bonus Amount"), pro-rated for any partial year of
employment. If the actual EBITDA, the actual financial targets of the Company
and the individual groups above, and the actual performance of Employee for any
Measuring Period does not exceed the financial targets of the Company and the
individual groups above, and the other goals respectively, in such Measuring
Period, only the portion of the Bonus Amount calculated pursuant to factors (i)
through (iv) which have been achieved as determined by the Board shall be
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paid under this paragraph. The maximum Bonus where actual Company financial
targets, actual financial targets of the individual groups above (as calculated
under factors (i), (ii), (iii) or (iv) exceed their respective Targets, or where
the Employee is determined to exceed the discretionary goals and performances
under factor (v) above, to be paid to Employee is 150% of the portion of the
Bonus Amount attributable to such factors. For years after 2004, the Board will
establish such factors as they deem necessary or appropriate and will
communicate those to Employee within a reasonable time after they have been
determined.
2. Except as specifically provided in Section 6.5 ("Severance
Compensation") of this Agreement, Employee's Bonus shall not accrue until the
last day of each Measuring Period, and shall be pro-rated for any partial year
where appropriate.
3. For purposes of this Agreement, (i) financial targets shall mean the
Company's or the individual group's respective earnings before interest, taxes,
depreciation and amortization, as calculated by the Company using its usual and
customary accounting practices and (ii) Measuring Period shall be any period of
time defined by the Company, provided that such time period shall not exceed one
(1) year. The parties specifically acknowledge that the salary and benefits paid
by the Company to Employee pursuant to this Agreement shall be deemed to be
expenses when calculating the EBITDA.
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EXHIBIT B
- Reimbursement for reasonable expenses incurred in Employee's three House
hunting trips to Knoxville all in accordance with the Company's expense
reimbursement policies. (a), (b).
- Packing, Transportation and reasonable Insurance thereon by a Team Health
approved mover of household goods (a), (b)
- Reimbursement for up to 45 days of temporary housing payments in
Knoxville, TN while Employee simultaneously maintain a residence in
Brentwood, TN and up to an additional 45 days of temporary housing once
Employee and his family have relocated to Knoxville, TN. This
reimbursement is subject to the Company's expense reimbursement policies.
- Employee will be reimbursed for the costs for up to 90 days storage in
Knoxville, TN of Employee's household goods.
- Employer will reimburse Employee up to a maximum of fifty thousand
($50,000) dollars for the customary closing costs associated with
Employee's sale of his residence in Brentwood, TN, and his purchase of a
residence in the Knoxville, TN area, including any costs associated with
either residence related to (i) real estate commissions, (ii) interest or
points, or (iii) attorneys fees. (a)(b)
- As additional consideration for the execution of this Agreement by
Employee and Employees performance in accordance with this Agreement, and
in lieu of Employer assuming any risk for the sale of Employee's current
residence, Employer agrees to pay Employee fifty thousand ($50,000)
dollars as a bonus to be paid within 10 days after the Effective Date. (b)
-----------------------------
(a) Grossed up for Federal Income Taxes.
(b) Repaid to Company should, during the first 15 months after the
Effective Date, (i) Employee terminates without cause or (ii) Employer
terminates this Agreement with cause.
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