EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement"), dated as of April 1,
1999, is made and entered into by and between AMERICAN MEDICAL CENTERS
MANAGEMENT COMPANY, LTD. ("AMCMC"), an international business company organized
under the laws of the British Virgin Islands (AMCMC shall also be referred to
from time to time herein as the "Employer"), and Xxxxxx X. Xxxxxxxx, an
individual residing at Siraci Sok, Istanbul Turkey (the "Executive").
WHEREAS, the Employer desires to employ the Executive, and the
Executive desires to accept such employment, in the capacity and on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the
parties agree as follows:
1. EMPLOYMENT. The Employer shall employ the Executive, and the
Executive hereby accepts such employment as the Chief Executive Officer of
AMCMC. In addition, the Employer shall serve, effective April 1, 1999, as the
President and Chief Operating Officer of AMCMC's parent, First Medical Group,
Inc., a Delaware corporation ("FMG"). Except as otherwise provided in Section 7,
the Executive is employed with the Employer and FMG "at will," which means that,
subject to said Section 7, the Employer or FMG is free to terminate the
Executive's employment with cause and the Executive is free to resign from the
Employer or FMG at any time, in each case with written notice as provided in
Section 7 hereof.
2. TERM OF EMPLOYMENT AND RENEWALS. The Executive's employment
hereunder shall become effective as of April 15, 1999 (the "Effective Date"),
and shall continue until the three (3) year anniversary of the Effective Date
(the "Term"), subject to the provisions for earlier termination provided in
Section 7 herein. Notwithstanding the foregoing, effective on the third
anniversary of the Effective Date (and each anniversary of such date
thereafter), the term of this Agreement as then in effect shall be automatically
extended for an additional one (1) year unless, at least three (3) months prior
to such date, the Employer or the Executive shall give written notice to the
other party that it or he, as the case may be, in its or his sole discretion,
does not wish to so extend the term of this Agreement.
3. DUTIES OF THE EXECUTIVE. During the Term, the Executive shall have
all duties and responsibilities customarily associated with the positions of
Chief Executive Officer of AMCMC and President and Chief Operating Officer of
FMG, subject to the
other sections of this Agreement. The Executive will work in an executive
capacity and will report to the Board of Directors of AMCMC and FMG,
respectively, (collectively the "Boards") and/or to any other individual member
or members of the Boards designated from time to time by such Boards. The
Executive will assist the Boards in charting the strategic goals of AMCMC and
FMG. The Executive shall be vested with such powers as the Boards may assign to
him from time to time. The Executive agrees that he shall at all times, during
business hours, faithfully, industriously, and to the best of his ability,
experience and talents, perform all duties as may be lawfully, reasonably and
ethically assigned to him from time to time by the Boards under this Agreement,
including by illustration and not limitation, being Chief Executive Officer of
all FMG operations in Europe and Middle Asia and being Chief Operating Officer
of FMG.
Furthermore, the Executive agrees that he shall at all time observe all
rules and policies as the Employer or FMG may from time to time reasonably
establish. The Executive shall devote substantially all of his business time and
attention to the business affairs of AMCMC and FMG and shall use his reasonable
best efforts to perform such duties and responsibilities faithfully and
efficiently. The Executive shall travel as the Employer or FMG reasonably may
require; provided, however, that, in general, the Executive will perform his
services hereunder in the Employer's offices in Istanbul, Turkey.
4. COMPENSATION. The Employer shall compensate the Executive as
follows:
(A) COMPENSATION. For the duration of this Agreement, the Employer
shall pay to the Executive a base salary ("Base Compensation") of $175,000 per
year. In 1999, Base Compensation shall be payable (I) during the period April
15,1999 through June 30, 1999, at the rate of $4,000 per month (prorated for any
portion of a calendar month) and (ii) for the period July 1, 1999 through
December 31, 1999, at the rate of $14,583.33 per calendar month. Thereafter, the
Base Compensation shall be payable in equal amounts each month on an annualized
basis in accordance with the Employer's customary practices for its employees.
(B) START-UP BONUS. The Executive shall be entitled to a start-up bonus
not to exceed $100,000. The first $10,000 shall be payable to the Executive on
April 15, 1999. Payment of the remaining $90,000 to the Executive shall be
contingent on the Executive's continued employment with the Employer and there
existing no event of Cause (as defined in Section 7 below) for the removal of
the Executive. Subject to the foregoing, the remaining $90,000 shall be payable
as follows: $40,000 payable on July 1, 1999 and $25,000 payable on October 1,
1999 and $25,000 payable on January 1, 2000.
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(C) STOCK OPTIONS. Promptly after the Effective Date, the Executive
will be granted 25,000 options for the purchase of FMG Common Stock with the
opportunity to earn (and/or purchase) more as the company expands and increases
it financial position. These stock options shall be granted to the Executive in
lieu of paying matching funds for a retirement/pension plan of the Employer or
FMG.
5. EXECUTIVE BENEFITS. The Executive shall receive the following
benefits:
(A) IN GENERAL. During the Term, the Executive shall be eligible to
receive such perquisites and to participate in such employee benefit plans that
the Employer or FMG may provide to the Executive, including but not limited to,
the Employer's life, short-term and long-term disability, health and dental
insurance plans; subject in each case to the generally applicable terms and
conditions of the plan or program in question and to the determinations of any
person or committee administering such plan or program.
(B) BUSINESS EXPENSES. The Executive is authorized to incur reasonable
expenses in order to promote the business of the Employer or FMG, including,
without limitation, for travel, lodging and entertainment. The Executive shall
maintain adequate records of such expenses (to the extent in excess of $75.00).
The Employer or FMG shall reimburse the Executive, upon presentation by the
Executive of an itemized account of such expenditures, to the extent consistent
with the Employer's or FMG's policies. The Executive will repay to the Employer
or FMG the amount of any expenses, if any, for which he has been reimbursed,
which are personal in nature and not for business purposes.
(C) PAID HOLIDAYS AND VACATION. The Executive shall be entitled to take
paid holidays as specified by the Employer from time to time for all of the
Employer's employees and twenty (20) working days of vacation time during which
time the Executive's Base Compensation shall be paid to him. The Executive shall
determine his vacation periods consistent with the Employer's needs.
(D) AUTOMOBILE. To facilitate the performance of the Executive's
responsibilities hereunder, the Employer shall, during the term of the
Executive's employment, pay to employee $200.00 a month to be applied by the
Executive toward the cost of operating, maintaining and garaging his automobile
and other such related costs.
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(E) HOUSING. At an agreed time during the Term, the Executive shall be
entitled to a housing allowance as may be mutually agreed to be applied to the
cost of maintaining a domicile for the Executive.
6. EXECUTIVE'S COVENANTS.
(A) NON-COMPETE. During the term of the Executive's employment, and for
a period of one (1) year thereafter, the Executive shall not, either directly or
indirectly, for his own account or as agent, servant or employee, or as a
controlling shareholder, general partner, or director of any corporation,
compete with the business of the Employer or FMG in the acquisition,
organization, management and/or provision of medical or dental health care
services ("Competitive Activity"). This covenant does not have a geographic
restriction because the Executive, the Employer and FMG agree that due to the
nature of the Employer's and FMG's business throughout Europe, the United States
and Middle Asia, the location of any person engaging in a Competing Activity is
irrelevant to the Executive's ability to injure the Employer or FMG through his
association with such entity.
(B) TRADE SECRETS. The Executive recognizes that the Employer and/or
FMG have acquired and developed and will continue to acquire and develop
confidential information and trade secrets which are and will continue to be of
great and unique value to the Employer and/or FMG and which are now or will be
used in the Employer's and/or FMG's business including, without limitation,
information and data regarding the Employer's and/or FMG's pricing, products,
vendors, customers, patients and employees, marketing strategies, and financial
information (hereinafter singly or collectively referred to as "Trade Secrets").
The Trade Secrets heretofore and hereafter learned or received by the Executive
shall be kept and maintained by him as confidential and in complete secrecy, and
for the sole use and benefit of the Employer and/or FMG, as the case may be, and
the Executive shall not disclose to any third party any of such Trade Secrets at
any time during or after his employment hereunder; provided, however, that any
such Trade Secrets may be disclosed by the Executive (a) if they cease to
qualify as trade secrets under applicable law or have become known by the
public, or (b) as required by law. The Executive will use all reasonable
measures to prevent the unauthorized use or disclosure of Trade Secrets by
others. These measures include strict compliance with all procedures developed
by the Employer and/or FMG to protect such information.
(C) OUTSIDE ACTIVITIES. The Executive shall use his best efforts to
apprise and review with the Boards, within a reasonable time prior to
dissemination, the text of any speech, professional paper, article or similar
formal communication created by the Executive which relates to the Employer's
and/or FMG's present or future
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business, development or marketing endeavors. The Executive shall use his best
efforts not to make public statements regarding issues of corporate policy or
public policy inconsistent with positions of the Employer and/or FMG. The Boards
will determine whether any Trade Secrets are contained in the communication, and
will notify the Executive if the dissemination of the communication is
prohibited under the terms of this Agreement.
(D) OWNERSHIP OF TRADE SECRETS; RETURN OF MATERIALS. Trade Secrets,
including those which are produced by the Employer and/or FMG, all materials
embodying Trade Secrets, and all copies thereof, will remain the property of the
Employer and/or FMG, as the case may be. At the termination of the Executive's
employment with the Employer and/or FMG, or at the written request of the
Employer and/or FMG, at any time, the Executive will immediately deliver to the
Employer and/or FMG, as the case may be, all materials, and copies thereof,
which are in the Executive's possession or control and which contain or are
related in any way to any Trade Secrets.
(E) NON-SOLICITATION. During the term of the Executive's employment,
and for period of one (1) year thereafter, the Executive will not, directly or
indirectly, solicit or contact any employee of the Employer and/or FMG who
remains employed by the Employer and/or FMG, as the case may be, at the time of
the Executive's termination of employment with the Employer (or any employee of
the Employer at an equivalent level of seniority who is employed at the time of
the Executive's termination of employment with the Employer) with a view to
inducing or encouraging such employee to leave the employ of the Employer or FMG
for the purpose of being hired by the Executive, an employer affiliated with the
Executive or any person engaged in a Competitive Activity.
(F) PRE-EXISTING OBLIGATIONS. The Executive hereby represents that the
Executive is not bound by any prior agreements or obligations that would
restrict in any way the Executive's entitlement to enter into this Agreement
with the Employer and/or FMG. The Executive represents that the Executive has
disclosed to the Employer and FMG the existence and contents of all covenants
not to compete that the Executive has entered into with any other entity. The
Executive's continuing active role as Advisor to the American Hospital of
Istanbul and as a member of the American Hospital Executive Committee of the
Xxxxx Xxx Foundation has been fully disclosed to the Employer and to FMG and it
is agreed by Employer and FMG that these activities are complementary and not
competing with the functions and activities of FMG and the Employer.
(G) ASSIGNMENT OF PROPRIETARY RIGHTS. The Executive agrees that any and
all proprietary rights and intellectual property, including without limitation,
trade
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names, trademarks, service marks and brand names, conceived, discovered or
created by him during the Term, directly or indirectly related to any business
or activity in which the Executive is engaged at the time of such conception,
discovery or creation, shall belong to the Employer and/or FMG, as the case may
be. The Executive shall, upon request while employed or after termination of his
employment, without cost to himself execute any and all copyright and trademark
applications and/or assignments transferring any rights the Executive may have
in such intellectual property to the Employer and/or FMG, as the case may be. At
the Employer's expense, the Executive shall do all other things requested by the
Employer to perfect the Employer's and/or FMG's right in all such proprietary
rights and/or intellectual property.
7. TERMINATION OF EMPLOYMENT. Termination of the Executive's employment
may occur under any of the following circumstances:
(A) Expiration of Term. The Executive's employment will terminate if
the Term provided for under Section 2 expires upon the election of either party
not to renew the term.
(B) The Employer's or FMG's Termination of Employment. The Employer or
FMG has the right to terminate the Executive's employment at any time, with
Cause. In the case of termination of the Executive with Cause, the Employer or
FMG, as the case may be, shall provide the Executive with sixty (60) days prior
written notice. For all purposes under this Agreement, "Cause" shall mean:
(i) a material and willful breach by the Executive of his
obligations under this Agreement, and, if such breach is capable of
being cured, the failure of the Executive to cure such breach within
ten (10) days of notice thereof from the Employer or FMG to the
Executive;
(ii) a willful misconduct by the Executive with respect to the
business or affairs of the Employer or FMG which has a material adverse
effect on the Employer, FMG or their respective businesses;
(iii) the conviction of the Executive of, or a plea of
"guilty" or "no contest" to, a felony or other crime involving moral
turpitude; or
(iv) a material breach of any duty owed to the Employer or
FMG, including the duty of loyalty and the provisions contained in
Section 6 hereof.
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No act, or failure to act, by the Executive or the Employer shall be
considered "willful" unless committed without good faith and without a
reasonable belief that the act or omission was lawful and in the Employer's best
interest.
(C) THE EXECUTIVE'S TERMINATION OF EMPLOYMENT. The Executive has the
right to terminate the Executive's employment with the Employer at any time,
with or without cause. The Executive agrees to provide sixty (60) days' prior
written notice of termination to the Employer. The Employer may in its sole
discretion select any date prior to the end of such sixty (60) day notice period
as the date the Executive's employment will terminate.
(D) DEATH OR DISABILITY. The Executive's employment shall be deemed to
have been terminated by the Executive upon the Executive's death or inability to
perform the Executive's duties under this Agreement for more than fifteen (15)
weeks, whether or not consecutive, in any twelve-month period. Termination will
be effective upon the occurrence of such event.
(E) ACCRUED COMPENSATION. Upon the effective date of the Executive's
voluntary termination of employment or the termination by the Employer for cause
of Executive's employment with the Employer (the "Termination Date"), the
Executive will not be eligible for further compensation, benefits or perquisites
under Sections 4 and 5 of this Agreement, other than those that have already
accrued, such accrued compensation to be delivered to the Executive within ten
(10) business days of the Termination Date. Upon the effective date of
termination of the Executive's employment for any other reason (the "Termination
Date"), the Executive shall be eligible to receive severance pay in an amount
not less than an amount equivalent to one (1) month's salary for every one (1)
year of service, such lump sum to be paid to the Executive within ten (10) days
of Termination Date.
8. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware, without
regard to its principles of conflicts of law or choice of law.
9. NO ASSIGNMENT. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, representatives,
successors and assigns. The Employer shall use its best efforts to assign this
Agreement to, and to cause its assumption by, any successor to all or
substantially all of the assets of the Employer. The Executive may not assign
this Agreement, either voluntarily or involuntarily.
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10. CHANGES AND MODIFICATIONS. This Agreement cannot be changed or
modified except in writing duly signed by the Executive and the Employer.
11. NOTICES. Any and all notices and other communications provided for
herein shall be given in writing and either mailed by certified mail, postage
prepaid, return receipt requested, or by overnight delivery service, and shall
be addressed:
(i) in the case of the Executive, to him at his above-stated
address.
(ii) in the case of the Employer, to Stamford, Connecticut,
Attention: Xxxxxx X. Xxxxx, with a copy thereof to Xxxxxx Xxxxx LLP,
0000 X Xxxxxx, X.X., Xxxxxxxxxx, XX 00000, Attn: Xxxx X. Xxxxx, Esq.
12. ENTIRE AGREEMENT. This Agreement contains the entire understanding
and accord between the parties relating to the subject hereof.
13. SEVERABILITY. If any provision of this Agreement or any portion of
such provision, or the application thereof to any of the parties hereto, shall
to any extent be held invalid or unenforceable, the remainder of this Agreement
or the remainder of such provision and the application thereof to such party,
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term and provision of this Agreement shall be valid
and enforceable to the fullest extent permitted by law.
14. WAIVER. The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver
thereof or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which is deemed to be an original, and all of which,
together, will constitute one and the same instrument.
16. CAPTIONS. The captions of the Sections of this Agreement are
inserted for convenience only and shall not constitute a part of this Agreement.
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IN WITNESS WHEREOF, the Employer has caused this Agreement to be
executed and the Executive has signed and dated this Agreement.
AMERICAN MEDICAL CENTERS
MANAGEMENT COMPANY, LTD.
Date: By: /s/ Xxxxxx X. Xxxxx
--------------- ----------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman
Date: /s/ Xxxxxx X. Xxxxxxxx
--------------- ----------------------------
Xxxxxx X. Xxxxxxxx
ACKNOWLEDGED and Accepted with respect solely to the provisions of
sections 1, 2, 3, 4(C), 5, 6, 7 and 8 of the foregoing Agreement.
FIRST MEDICAL GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman
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