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Exhibit 10.17
RADIATION THERAPY SERVICES, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of this June 26, 1998, among XXXXX
X. XXXXXXXXX ("Employee"), and RADIATION THERAPY SERVICES, INC., a Florida
corporation ("Employer"). Employer and Employee agree as follows:
1. EMPLOYMENT. Employer does hereby employ Employee and Employee does
hereby accept such employment under the terms set forth in this Agreement.
2. RESPONSIBILITIES. Employee shall be Employer's Chief Financial
Officer and Vice President, with such duties and responsibilities as such
position normally entails. Employee shall report to the Chief Operating Officer
and through the Chief Operating Officer to the Chief Executive Officer.
3. FAITHFUL PERFORMANCE. Employee agrees to perform the duties assigned
to Employee faithfully and industriously to the reasonable satisfaction of
Employer.
4. TERM. The term of this Agreement shall be five (5) years beginning
on July 13, 1998 subject, however, to prior termination as hereafter provided.
This Agreement shall be automatically renewed for one year terms on each
anniversary date of this Agreement following the initial five (5) year term
unless either party gives notice to the other party at least ninety (90) days in
advance of that anniversary date that the Agreement is not to be renewed.
5. COMPENSATION.
A. Employer shall pay Employee a salary for Employee's
services hereunder of Ten Thousand Dollars ($10,000.00) per month for the first
two months of employment and Twelve Thousand Five Hundred Dollars ($12,500.00)
for the third through the twelfth months of employment (the "Base Salary").
Beginning on the first day of the thirteenth month of employment, Employer shall
pay Employee a salary of One Hundred Seventy Thousand Dollars ($170,000.00) per
year, payable in equal installments every other week in a manner consistent with
Employer's customary payroll system. Employee also is subject to such rights and
obligations as may be set forth from time to time in Employer's Handbook for
Employees but this Employment Agreement shall control in the event of any
conflicts. Employee's Salary may be increased during any year of the term of
this Agreement, depending upon Employer's review of Employee's performance.
B. In addition to the Base Salary, Employee shall receive a
bonus of Five Thousand Dollars ($5,000.00) after 90
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days, 180 days and 270 days of continuous employment and Ten Thousand Dollars
($10,000.00) after 360 days of continuous employment hereunder. In addition,
provided Employer closes an initial public offering of its stock during 1998,
Employee shall receive an additional bonus of Ten Thousand Dollars ($10,000.00)
within a month following that closing and, in addition, in the event of such
closing, Employer shall grant to Employee twenty thousand (20,000) options to
purchase the common stock of Employer at the IPO price of such stock.
C. Subsequent to an initial public offering of the stock of
Employer, Employee shall receive such bonuses and other employee benefit
programs in accordance with the same bonus or other programs that may be in
place from time-to-time for any other senior manager of Employer, and may
receive such pay increases as the Board of Directors of Employer may, at its
sole discretion, determine.
D. Employer shall reimburse Employee all out of pocket
expenses incurred by Employee in connection with relocation from Kentucky to
Fort Xxxxx, Florida as well as incidental expenses incurred in connection with
opening a house in Florida, payable upon presentation of appropriate
documentation of such expenses.
E. Employer shall reimburse Employee for reasonable (coach)
airfare expenses for travel between Cincinnati and Fort Xxxxx every other week
for four months beginning July 13, 1998. Employer shall also reimburse Employee
for reasonable temporary lodging (i.e., Residence Inn or equivalent) for four
months beginning July 13, 1998.
F. Employer shall also reimburse Employee for CPA
certification, reasonable professional journals, applicable professional group
memberships and CPE seminar fees.
6. VACATION. Employee shall be entitled to twenty (20) vacation days
with pay during each twelve months of employment hereunder. Employee may be
entitled to additional vacation days with pay upon the prior written consent of
the Chief Executive Officer of Employer. In the event of termination, Employee
shall be entitled to the pro rata value of vacation earned to the date of
termination.
7. CONFIDENTIALITY. It is understood between the parties that during
the term of employment hereunder, Employee will be dealing with confidential
information and processes which are Employer's property, used in the course of
Employer's business, including without limitation the names of Employer's
patients, referring physicians, health maintenance organization or other managed
care contracts, suppliers, equipment, records, procedures, and methods of
operation. Employee agrees that such information is important, material, and
confidential and gravely
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affects the successful conduct of the business of
Employer and Employer's goodwill, and that any breach of the terms of this
paragraph is a material breach of this Agreement. Employee agrees not to
disclose to anyone, directly or indirectly, any of such confidential
information, or use it other than in the course of employment with Employer. All
documents that Employee prepares, or confidential information that might be
given to Employee in the course of employment hereunder, are the exclusive
property of Employer and shall remain in Employer's possession. Under no
circumstances shall any confidential information or documents be removed without
Employer's consent to such removal first being obtained. Employee further agrees
that, upon the termination of this Agreement for any reason, Employee will not
take or retain, without the express, written consent of Employer, any papers,
lists, books, files, or other documents, or copies of such items, or other
information of any kind belonging to Employer. All ideas, inventions,
trademarks, and other developments or improvements conceived by Employee, alone
or with others, during the term of his employment, whether or not during working
hours, that are within the scope of Employer's business operations or that
relate to any of Employer's work or projects, are the exclusive property of
Employer. Any and all patentable or copyrightable material, or other
intellectual property, developed by Employee as described in the preceding
sentence, shall be considered work for hire and shall be solely the property of
the Employer. This provision shall survive the termination of this Agreement for
any reason.
8. FULL TIME AND ATTENTION. Except as otherwise authorized by Employer,
Employee will devote his full business and professional time and attention to
the rendition of the services pursuant to the terms of this Agreement on behalf
of Employer and to the furtherance of Employer's best interests as assigned and
scheduled by Employer.
9. NON-COMPETITION.
A. During the term of this Agreement and any renewal period,
Employee shall not undertake any employment except as directed and authorized by
Employer.
B. In the event of the termination of this Agreement for any
reason, Employee agrees not to directly or indirectly compete with Employer or
any of its Affiliates by providing management or other services on behalf of any
person or entity engaged in any business which Employer or any of its Affiliates
engage in at the time of termination, or which business Employer or any of its
Affiliates are actively considering engaging in at the time of termination, in
any state in which any radiation oncology center or any other business operated
by Employer or any of its Affiliates is located, or in any state immediately
adjacent to such state, for a period of two (2) years after the date of such
actual termination of this Agreement; provided,
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however, that this restriction shall extend for only one (1) year if termination
is by Employer without cause or by Employee as the result of a provable breach
of this Agreement by Employer (the preceding sentence shall be referred to
herein as the "Covenant Not to Compete"). The purpose of the Covenant Not to
Compete is to protect Employer from the irreparable harm it will suffer if
Employee competes with Employer after having participated in the initial public
offering of Employer and after learning Employer's business procedures, office
and practice policies, and the special and confidential professional procedures
developed by Employer. An "Affiliate" of Employer means (i) any person or entity
directly or indirectly controlled by Employer or by a shareholder or group of
shareholders of Employer who own fifty percent (50%) or more of Employer; (ii)
any person or entity directly or indirectly controlling Employer; (iii) any
subsidiary of Employer if Employer has a fifty percent (50%) or greater
ownership interest in the subsidiary; or (iv) Employer's parent entity if the
parent has a fifty percent (50%) or greater ownership interest in Employer.
Employee may not assign Employee's rights, obligations and interest in this
Agreement to any other person.
C. The parties agree that in the event of any breach or
attempted breach by Employee of the Covenant Not to Compete, Employer will be
entitled to equitable relief by way of injunction or otherwise, in addition to
any remedy at law which may be available. The parties agree that any violation
or threatened violation by Employee of the Covenant Not to Compete will cause
Employer to suffer irreparable harm. The parties agree that Employer's remedy of
an injunction is not the exclusive remedy for breach of the Covenant Not to
Compete and that a court may grant such additional relief as is reasonable.
D. In the event Employee breaches the Covenant Not to Compete,
in addition to the injunctive relief to which Employer shall be entitled under
the law, Employee shall immediately repay to Employer any amounts paid by
Employer hereunder after the termination of this Agreement, and all severance or
termination pay, if any, paid pursuant to this Agreement. Employer may offset
against any amounts owed Employee pursuant to this Agreement any amounts
Employee owes Employer hereunder.
E. In the event the Covenant Not to Compete shall be
determined by a court of competent jurisdiction to be unenforceable by reason of
its geographic or temporal restrictions being too great, or by reason that the
range of activities covered is too great, or for any other reason, section 9
shall be interpreted to extend over the maximum geographic area, period of time,
range of activities or other restrictions as to which it may be enforceable.
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10. TERMINATION.
A. If Employee dies or becomes disabled after seventy five
(75) days of continuous employment hereunder, Employer agrees to pay to
Employee's designated beneficiary as salary continuation or to Employee two
months of Employee's then Base Salary. If Employee dies or becomes disabled
after three hundred sixty (360) days of continuous employment hereunder,
Employer agrees to pay to Employee's designated beneficiary as salary
continuation or to Employee one (1) year of Employee's then-Base Salary, plus
any benefits and any pro rata portion of any bonuses which Employee would
otherwise be eligible for, payable monthly, beginning with the date of death or
commencement of disability. For purposes of this Agreement, "disability" shall
mean that Employee is incapable of performing the services intended by this
Agreement.
B. If Employee voluntarily terminates his employment for any
reason, Employer shall have no liability to Employee other than for accrued and
unpaid Base Salary and earned vacation prior to the date of termination.
C. This Agreement shall be deemed to be terminated for cause
by Employer, and the relationship of Employer and Employee existing between the
parties shall be deemed severed without any liability on the part of Employer to
Employee for further compensation or remuneration (other than for accrued and
unpaid Base Salary and earned vacation prior to the date of termination) in the
event Employee shall (i) fail or refuse, after reasonable notice, to comply with
the reasonable policies, standards, and regulations of Employer from time to
time established, or to perform faithfully or diligently the provisions of this
Agreement or the duties as contemplated hereunder; (ii) display unprofessional,
unethical, immoral, or fraudulent conduct; or (iii) materially breach this
Agreement. If Employer terminates Employee without cause, or if Employee quits
as the result of a provable breach of this Agreement by Employer, Employer shall
continue to pay Employee each month for eight months if such termination occurs
after the seventy fifth day of employment hereunder but before a full year of
employment hereunder. If such termination without cause occurs after one full
year of employment hereunder, then Employer shall continue to pay Employee each
month for one year after the date of termination a sum equal to Employee's
monthly Base Salary, plus any benefits and any pro rata portion of any bonuses
which Employee would otherwise be eligible for.
D. The provisions of sections 7 and 9 above shall survive
termination of this Agreement for any reason.
11. OPTIONS. Employer shall grant to Employee 70,000 options to
purchase the stock of Employer, at the IPO price, said options to be exercisable
at the rate of 20% of the total amount per year, beginning one year after the
IPO, provided Employee is still employed by Employer on each anniversary date.
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12. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties regarding the subject matter hereof and supersedes all previous
negotiations, discussions, and agreements between the parties concerning the
subject matter hereof.
13. AGREEMENT BINDING. This Agreement shall be binding on and inure to
the benefit of the respective parties hereto and their executors,
administrators, heirs, personal representatives, successors and assigns.
14. CONSTRUCTION. This Agreement shall be governed by the laws of the
State of Florida.
15. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if sent by registered mail to
either party at its last known residence.
16. ASSIGNMENT. Employer may assign its rights, obligations and
interest in this Agreement to an Affiliate of Employer.
17. INDEMNIFICATION. Employer shall indemnify Employee, to the full
extent permitted by law, against all liabilities incurred as a result of, and
expenses reasonably sustained in the defense or in the compromise or settlement
of, any civil, criminal or other action, suit or proceeding, by or on behalf of
whomever brought, to which Employee may be a party or in which he may be
otherwise involved by reason of his having been an officer or employee of
Employer or an Affiliate. Employee shall be covered by Employer's Directors and
Officers liability insurance policy.
18. SEVERABILITY. In the event that any paragraph or clause of this
Agreement is held or declared by a final and unappealable decision to be void,
illegal, or unenforceable for any reason, the offending paragraph or clause
shall, if possible, be reformed by the authority making such decision in such
manner as will implement, to the fullest extent legally permissible, the
expressed intentions of the parties hereto without illegality or
unenforceability. If such reformation is not possible, the offending paragraph
or clause shall be stricken and all other paragraphs and clauses of this
Agreement shall nevertheless remain in full force and effect; provided, however,
that if striking such offending clause or paragraph would result in a
substantial change in the contractual relationship between the parties, thereby
depriving either or both of the parties of the benefit of the fundamental
economic bargain herein set forth, this Agreement shall become voidable upon
demand of the party whose interests are thus impaired.
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19. HEADINGS. The headings contained in this Agreement are included for
convenience only and no such heading shall in any way alter the meaning of any
provision.
20. WAIVER. The failure of either party to insist upon strict adherence
to any obligation of this Agreement 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.
21. MODIFICATIONS. Any modifications to this Agreement shall be made in
writing only and shall be by agreement of Employer and Employee.
IN WITNESS WHEREOF, Employer and Employee have executed this Employment
Agreement the day and year first written above.
RADIATION THERAPY SERVICES, INC.
By:
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G. Xxxxx Xxxxxxxxx
Chief Operating Officer
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XXXXX X. XXXXXXXXX
Xxxxxxxxx A
August 14, 1998
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