EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is effective as of the ___th day of January 2002 , by and between John Doe, 123 Avenue A, Suite 100, Anytown, State, Zip Code ( the "Employee"), and ________________, a Delaware corporation with its principal place of business located at _________________________________ (the "Company").
WITNESSETH:
WHEREAS, the Company is in the business of providing financial, clinical, and administrative services to (xyz/widget) agencies; and
WHEREAS, the Company is desirous of retaining the full-time services of the Employee to serve as President and CEO, subject to the terms and conditions of this Agreement; and
WHEREAS, the Company is desirous, in recognition of the Employee's anticipated contributions, to provide the Employee with reasonable security and stability in his service, subject to the terms and conditions of this Agreement; and
WHEREAS, Employee is desirous of serving as a full-time employee of the Company, subject to the terms and conditions of this Agreement:
NOW THEREFORE, in consideration of the material advantages accruing to the two parties and the mutual covenants contained herein, and intending to be legally and ethically bound hereby, the Company and the Employee agree with each other as follows:
I. RECITALS APPROVED
The above recitals are true and correct and are made a part hereof.
II. EMPLOYMENT AND DUTIES
The Company hereby agrees to employ the Employee and the Employee hereby agrees to accept employment as President and CEO and agrees to devote his full business time and efforts to the diligent and faithful performance of his duties as set forth in Company bylaws and in policy statements of the Board. It is understood that these duties shall be substantially the same as those of a chief executive officer of a business corporation. The Employee also hereby agrees to serve as Director, with vote, of the Board. The Employee is hereby vested with authority to act on behalf of the Board in keeping with policies adopted by the Board, as amended from time to time. In addition, he shall perform in the same manner any special duties assigned or delegated to him by the Board. With the approval of the Board, the Employee may serve on the board of directors of, and hold any other offices or positions in companies or organizations which, in the Board's judgment, will not present any conflict of interest with Company or materially affect the performance of Employee's duties pursuant to this agreement.
III. TERM OF EMPLOYMENT
3.1 Term. The Original Term of this Agreement and the Employee's employment hereunder shall commence on the Effective Date and shall continue thereafter until the date which is five (5) years from the Effective Date unless terminated by either party in accordance with Section ___ of this Agreement. This Agreement and the Employee's employment hereunder shall automatically renew thereafter for successive terms of one (1) year each upon the same terms and conditions, unless or until:
(a) Either party elects not to renew the term of this Agreement and the Employee's employment hereunder by giving written notice to the other party at least one (1) year prior to the expiration of the Original Term (or at least ten (10) months prior to the expiration of any renewal term;
(b) Terminated by either party in accordance with Section ____ of this Agreement; or
(c) Renegotiated in writing by and between the parties at least one year prior to the expiration of the Original Term (or at least ten (10) months prior to the expiration of any renewal term).
The Original Term and any and all renewal terms thereof are herein referred to as the "Term".
IV. COMPENSATION
4.1 Base Annual Salary. As compensation for the Employee's services, the Employee shall be paid by the Company a Base Annual Salary in the amount of __________________________ and No/Hundredths Dollars ($___________________) or such higher figure as shall be agreed upon at an annual review of Employee's compensation by the Board. This annual review shall occur three months prior to the end of each year of the Agreement for the express purpose of considering salary increments. Annual increases will at least equal the average percentage increase received by Company's employees. Such salary shall be payable in accordance with the customary payroll practices of Company, but in no event, less frequently than monthly.
4.2 Incentive Compensation. Company shall pay Employee incentive compensation. A series of one-time bonuses will be paid during or at the end of each fiscal year and may total ______ ( ) Percent of the Base Annual Salary. These bonuses will be based upon predetermined qualitative and quantitative factors. A bonus of at least _______ ( ) Percent is guaranteed the first year of employment and is to be paid quarterly. In addition, year-end profitability bonuses will be paid annually if the operating profit or loss is improved in the Company's favor when compared to the budget approved by the Board. The amount of bonus will be ________ (__) Percent of the amount of improvement. The fiscal year ends _____________________.
4.3 Restricted Stock. Company shall grant Employee ___________ (_____) shares of restricted stock representing __________ (____) Percent ownership in Company.
4.4 General Expenses. Company shall reimburse Employee for general expenses incurred in the performance of his duties, in an amount consistent with the general reimbursement policy of the Company. To the extent deemed beneficial to the Company, Company shall pay Employee's dues and/or initiation fees in professional organizations, service, social and country clubs. Company shall reimburse Employee for entertainment expenses and expenses in connection with attendance at professional meetings, provided, however, that such reimbursement is approved by the Chairman of the Board.
V. FRINGE BENEFITS
5.1 Major Medical and Dental Insurance. Company shall provide major medical and dental health insurance for the Employee. Dependent coverage shall be available to the Employee at an extra cost.
5.2 Life Insurance. Company shall provide a _________________ and No/Hundredths Dollars ($___________) group term life insurance policy at no cost to the Employee, payable to the beneficiary of his choice.
5.3 Long-term Disability Insurance. Company shall provide long-term disability insurance or reimburse Employee for premium expense associated with individual policy.
5.4 Sickness and Accidental Injury. Employee shall earn _______ (___) days paid sick leave per year, which accrues on an hourly basis monthly. In the event of a single period of prolonged inability to work due to the results of sickness or injury, Employee will be compensated at his full rate of pay for at least six (6) months, reduced by any plan or program of Company. However, in the event that Employee is disabled for a continuous period exceeding six (6) months, Company may, at its election, cease such payments and terminate this Agreement.
5.5 Education. The Employee shall be reimbursed by the Company for all reasonable educational expenses during the Term hereof which are incurred at an accredited program leading to a degree or other such educational expenses as the Employee may reasonably incur related to increasing skills related to the Employee's duties and responsibilities hereunder, provided, however, that any such reimbursement must be approved in advance, in writing, by the Board as being reasonable hereunder.
5.6 Vacation. The Employee shall be entitled each calendar year to vacation time of twenty (20) business days, which shall accrue at the beginning of each calendar year, in addition to the Company's paid holidays as set forth in the Employee Handbook, during which time the Employee's compensation shall be paid in full at the then current rate of pay. During the first partial calendar year of the Employee's employment, if any, the Employee shall accrue a proportionate share of the vacation time set forth immediately above. The Employee shall give the Company prior notification and obtain prior written approval from the Board of vacation time to be taken by the Employee. Notwithstanding anything contained herein to the contrary, the Employee shall be required to use at least ten (10) days of accrued vacation time during each calendar year. As to the remaining ten (10) days vacation, in the event the Employee does not wish to use any portion of such remaining vacation time in the calendar year in which it accrued, the Employee may:
(a) Request compensation for not more than ten (10) days unused vacation time in an amount equal to the Employee's then current salary for such unused vacation time accrued; or
(b) Carry over such unused vacation time from one calendar year to another.
Notwithstanding anything contained herein to the contrary, if the Employee's employment by the Company terminates for any reason, with or without cause, the Company shall pay the Employee for any unused vacation time, on a pro rata basis, up to the date of termination of the Employee's employment hereunder.
5.7 Automobile. The Company shall provide to the Employee an automobile allowance equal to (spell dollar amount) and No/Hundredths Dollars ($xxx.00) per month, or lease an automobile at the beginning of alternate years, starting the Effective Date of Employment, and reimburse him for expenses of its operation, total lease expense and operations expense to approximate (spell dollar amount) and No/Hundredths Dollars ($xxx.00) per month.
5.8 Retirement Plan. The Company shall contribute on behalf of the Employee to a retirement plan qualified under the Internal Revenue Code, at the rate of _______________________ and No/Hundredths Dollars ($________) per month.
5.9 Insurance. The Company agrees to include the Employee as an officer and board member under the Company's applicable insurance policies, including, but not limited to, any general liability and board of directors coverage.
5.10 Other. The Employee shall be given the opportunity to participate in all other employee benefit plans as are established, or as may be established and maintained in the future by the Company for its regular full-time employees and senior executive officers.
VI. CONDITIONS OF EMPLOYMENT
6.1 Confidentiality. The Employee hereby acknowledges that he holds a fiduciary relationship, capacity and duty with respect to his employment with the Company and, accordingly, the Employee covenants and agrees that he will not, at any time, either during the period he is employed by the Company or thereafter reveal, communicate or in any way divulge, to any person, firm, corporation or other entity any information, knowledge or data of whatsoever kind or nature not generally available to the public which the Employee acquired or was made available to the Employee during the Employee's employment by the Company, including but not limited to any information which relates to the Company's or its Affiliated Companies' operations, personnel, customer names, customer information, financings, acquisitions, management agreements, or other documents of a confidential nature relating to the ownership or operation of the Company or any of its Affiliated Companies or concerning any officers, directors, employees or agents of the Company or any of its Affiliated Companies. The Employee will not, except for Company use, copy duplicate or transcribe any Company documents or objects or remove them from the Company's main office or facilities nor use any information concerning them except for the Company's sole benefit either during his employment or thereafter. The Employee further agrees that he will deliver all of the aforementioned documents and objects that may be in his possession to the Company upon the termination of this Agreement and the Employee's employment hereunder or at any time upon the Company's request, together with his written certification and affidavit of compliance with respect to delivery of all such documents and other related information.
6.2 Non-Solicitation. The Employee agrees that during the period he is employed by the Company and for a period of one (1) year thereafter, he will not, either alone or in concert with others, directly or indirectly, solicit, entice, induce or encourage: (1) any employee(s) to leave the employment of the Company or any of its Affiliated Companies; (2) any patient(s) to discontinue using the Company's services or the services of any of its Affiliated Companies; or (3) any existing or proposed transfer arrangement or other community or institutional affiliation to discontinue the affiliation or transfer relationship with Company or any of its Affiliated Companies.
6.3 Employer Property. The Employee agrees that all memorandums, notes, records, reports, drawings, or other writings or documents, equipment, apparatus, products, or materials and the like, including copies thereof, made or compiled by the Employee or made available to the Employee in the course of the Employee's employment, shall be the property of the Company and shall be delivered to the Company upon termination of the Employee's employment or at any other time upon request.
6.4 "Affiliated Companies" Defined. As used herein, the term "Affiliated Companies" is defined as being any and all companies and/or other entities which, either directly or indirectly, either in whole or in part, are owned by, own, manage, and/or are managed by the Company and any and all companies and/or other entities which, either directly or indirectly, either in whole or in part, are related to the Company as a result of common ownership, and/or common control and/or common management, and/or other affiliation.
6.5 Irreparable Harm. The parties recognize that irreparable injury will result to the Company in the event of a breach of the restrictive covenants contained in the Article VI on the part of the Employee and agree that in the event of a breach or threat of breach by the Employee of any of the provisions of this Article, the Company shall be entitled, in addition to other remedies and damages available, to an injunction to restrain the violations thereof by the Employee and all persons acting for and/or with the Employee. The Employee's obligations and agreements set forth in the Article shall survive any termination for whatsoever reason, of this Agreement and the Employee's employment hereunder.
VII. EMPLOYEE'S DEATH
This Agreement and the Employee's employment hereunder shall automatically terminate upon the Employee's death and any and all Company obligations hereunder shall automatically cease and terminate. In the event of termination pursuant to this Section, the Company shall be obligated to pay to the Employee's estate or other representative, the Employee's salary through the last calendar day of the month in which such termination occurs, provided, however, that the Employee has completed at least one (1) year of continuous employment with the Company pursuant to this Agreement.
VIII. TERMINATION
8.1 Termination for Cause. The Company reserves the right, at any time, to immediately terminate this Agreement and the Employee's employment hereunder for cause should the Employee:
(a) Willfully or recklessly disregard his duties under this Agreement;
(b) Be convicted with respect to the commission of a felony or other crime involving dishonesty, fraudulent act or any other act abhorrent to the community; or
(c) Commit or be reasonably suspected of committing any dishonest or fraudulent act or any other act abhorrent to the community which a reasonable person would consider damaging to the reputation of the Company or any of its Affiliated Companies.
Termination for cause shall be done in writing and be accompanied by a written statement of the reason(s) for termination.
8.2 Termination With or Without Cause. The Company has and reserves the right, at any time, to terminate this Agreement and the Employee's employment hereunder with, or without cause for any reason, upon giving the Employee ninety (90) days prior written notice, and upon such termination with or without cause, to pay a Termination Fee of twenty-four (24) months of the Employee's Base Monthly Salary. The Company shall provide continuation of Other Fringe Benefits for a period of the lesser of: (a) twenty-four (24) months; or (b) such time as the Employee obtains any other full time employment with fringe benefits. Such Other Fringe Benefits shall be the automobile allowance, long-term disability benefits, group life insurance benefits and health and dental insurance benefits (such Base Monthly Salary payments and Other Fringe Benefits continuation shall be collectively referred to as the "Termination Fee"). Such Termination Fee shall commence on the first regularly scheduled pay day after termination and thereafter payable on regularly scheduled paydays, as applicable.
8.3 Change of Duties. Should the Board in its discretion change the Employee's duties or authority so it can reasonably be found that the Employee is no longer performing as the President and CEO of the Company, the Employee shall have the right, within ninety (90) days of such event, in his complete discretion, to terminate this Agreement by written notice delivered to the Chairman of the Board. Upon such termination, the Employee shall be entitled to the Termination Fee described in Paragraph 8.2, in accordance with the same terms of that paragraph.
8.4 Changes in Company Status. If the Company is merged, sold or closed, the Employee may terminate his employment at his discretion or be retained as President and CEO of the Company or any successor corporation to or holding company of the Company. If the Employee elects to terminate his employment at such time, he shall be entitled to the same Termination Fee as would be applicable under Paragraph 8.2 if the Company had terminated his employment at such time. Any election to terminate employment under this Paragraph must be made prior to the Company's merger, sale or closure, as applicable. If the Employee continues to be employed by the Company or its successor organization, all of the terms and conditions of this Agreement shall remain in effect. The Company agrees that neither it nor its present or any future holding company shall enter into any agreement that would negate or contradict the provisions of this Agreement.
8.5 Employee Termination of Agreement. Should the Employee, at his discretion, elect to terminate this Agreement for any other reason than as stated in Paragraph 8.4, he shall give the Chairman of the Board ninety (90) days prior written notice of his decision to terminate. At the end of the ninety (90) days, all rights, duties and obligations of both parties to the contract shall cease and the Employee shall not be entitled to receive any Termination Fee whatsoever.
8.6 Release from Liability. If an event described in Paragraph 8.1, 8.2, 8.3, or 8.4 occurs and Employee accepts any of the Termination Fee described therein, to the extent not prohibited by law, the Employee shall be deemed to voluntary release and forever discharge the Company and its officers, directors, employees, agents, and related corporations and their successors and assigns, both individually and collectively and in their official capacities (hereinafter referred to collectively as "Releasees"), from any and all liability arising out of his employment and/or the cessation of said employment. Nothing contained in this paragraph shall prevent the Employee from bringing an action to enforce the terms of this Agreement.
IX. MISCELLANEOUS
9.1 Entire Agreement. This Agreement contains the entire understanding and agreement between the parties regarding the subject matter of this Agreement. This Agreement supersedes any and all prior understanding(s), agreements(s), representation(s), and other communication(s) between the parties concerning the subject matter hereof, and any executory agreement(s) hereinafter made between the parties shall be ineffective to change, waive, release, discharge, terminate or effect any abandonment of this Agreement, in whole or in part, unless such excutory agreement(s) in writing and signed by authorized representatives of both parties. This Agreement shall not be amended or modified in any way except by a prior writing, signed by each party to be obligated thereunder.
9.2 Interpretation. In the event of any conflict between the terms of this Agreement and the provisions of the Company's Employee Handbook, the terms of this Agreement shall be controlling. Furthermore, the Company's Employee Handbook shall in no way: (1) be deemed to be in any way explaining any part of this Agreement; (2) be deemed to be incorporated by reference into this Agreement; or (3) constitute a contract, either express or implied, with the Employee.
9.3 Waiver of Breach. The waiver by either party of a breach or violation under any term or provision hereof shall not operate as or be construed to be a waiver of any subsequent breach thereof.
9.4 Notices.
(a) All notices, requests, consents, and other communications hereunder shall be in writing and shall be deemed to have been sufficiently given or served if delivered in person or deposited for mailing with the United States Postal Service, registered or certified, return receipt requested, postage prepaid, or with Federal Express Corporation and addressed to the Employee at his last known address or to the Company as follows: ___________________ , Inc.; Attn:__________, Chairman of the Board, ABC City, XYZ State, 123 Zip Code.
(b) If either Employee's or Company's address changes during the term of this Agreement, such moving party shall promptly notify the other party of such change in address as provided above and change in telephone number. The other party shall in no way be liable to the moving party for any notices, requests, consents, payments and/or other communications received late or not received at all because any such required notice is not received pursuant to this Paragraph.
9.5 Governing Law. This Agreement shall be construed and enforced under and in accordance with the laws of the State of ____________.
9.6 Headings. The paragraph headings contained in the Agreement are for convenience only and shall not be construed or interpreted as part of this Agreement nor have any effect thereon.
9.7 Binding Agreement. This Agreement shall be binding upon the Company, its successors and assigns, including, without limitation, any corporation into which the Company may be merged or by which it may be acquired, and shall inure to the benefit of the Employee, his administrators, executors, legatees, heirs and assigns.
9.8 Construction and Severability. Should any Court of competent jurisdiction hold any provision(s) of this Agreement invalid, such provision(s) shall be construed or revised by the Court so as to be reasonable and enforceable unless to do so would be contrary to law or public policy. If any provision(s) of this Agreement is found to be invalid, such finding shall not operate to invalidate the remainder of this Agreement.
IN WITNESS WHEREOF, the Company has caused its corporate name to be signed by its duly authorized officer and Employee has hereunto set his name effective on the date first set forth above.
EMPLOYEE COMPANY
Employee's Name Chairman's Name
Chairman of the Board
WITNESS WITNESS