EXHIBIT 10.82
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of
______________, 1997 (the "Effective Date"), by and between Castle Dental
Centers of Texas, Inc., a Texas corporation (the "Company"), and Xxxx Xxxxxxx,
D.D.S. ("Employee").
RECITALS:
Prior to the date hereof, Employee was the majority owner of Southwest
Dental Associates, L.C., which along with the Company and the Employee is a
party to that certain Option Agreement dated as of ______________, 1997 (the
"Option Agreement"). As a condition to the consummation of the transactions
contemplated by the Option Agreement and as an inducement for the Company and
Employee to perform their respective obligations under the Option Agreement, the
Company and Employee have entered into this Agreement.
The parties agree as follows:
ARTICLE I
1.1 EMPLOYMENT.
(a) The Company agrees to, and hereby does, employ Employee, on the terms
and conditions set forth herein, to hold such offices, have such titles and
perform such duties as are contemplated hereby. Employee's initial title is Vice
President with responsibility for the Company's operations in and around the
Austin, Texas metropolitan area.
(b) Employee's initial responsibility shall be to manage the Company's
operations, and to participate in the development and implementation of the
strategic plan of the Company, in the
Austin, Texas metropolitan area. Employee's role in the development of the
strategic plan shall include, but not be limited to, an analysis of markets
selected by the Company and the identification of acquisition candidates.
Employee's role in the implementation of the strategic plan, subject to the
supervision of the Company's senior management, shall include, but not be
limited to, participating in the acquisition of dental practices, development of
new offices and responsibility for the management of dental practices in
accordance with a management services agreement to which the Company and such
practices are parties.
(c) The Company may reassign Employee from the duties described above
without breaching this Agreement; provided, however, that Employee shall not be
assigned duties inconsistent with his position as an executive of the Company or
relocate permanently outside of the city of Austin, Texas, and provided further,
that no such reassignment shall justify a decrease in the Base Salary (as herein
defined) payable to Employee.
(d) Employee shall devote his full business time, efforts and abilities to
the business of the Company for the benefit and advantage of the Company. During
the period of employment, Employee shall devote substantially his entire
business hours to the business of the Company, and shall perform such other
services as shall be reasonably designated, from time to time, by the Board of
Directors or senior executive officers of the Company. Employee shall use his
reasonable best efforts to promote the interests of the Company.
ARTICLE II
2.1 SALARY. As compensation for his service during the term of this
Agreement (or until terminated pursuant to the provisions hereof), the Company
shall pay Employee a salary at the rate of $175,000 per annum (the "Base
Salary"), through and until the Termination Date, as herein defined, payable in
accordance with the regular payroll practices of the Company as in effect from
time to time. Such Base Salary shall be subject to withholding for the
prescribed federal and state income tax, social security and other items as
required by law, and for other items consistent with the Company's policy with
respect to health insurance and other benefit plans for similarly situated
employees.
2.2 INCENTIVE BONUS COMPENSATION. The Company has established the Castle
Dental Centers of Texas, Inc. Incentive Bonus Plan (the "Plan") which provides
for the Company to set aside for grant to certain management employees selected
by a committee consisting of Employee
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and the chief executive officer of Castle Dental Centers, Inc., a Delaware
corporation ("Castle") with the approval of the Compensation Committee of the
Board of Directors of Castle an aggregate of ten percent (10%) of the earnings
before interest, taxes, depreciation and amortization ("EBITDA") of the Austin
operations of the Company in excess of $1,120,000 per year, (which amount shall
be reduced for 1997 by the amount, if any, that the EBITDA for 1997 of the four
dental offices acquired by the Company and formerly operated by Horizon Dental
Centers in Austin, Texas is less than $520,000) attributable to the operations
of the Company under the direct management of Employee in the Austin, Texas
metropolitan area (the "Austin Operations"), computed without general overhead
allocation or charge with respect to the general and administrative expenses of
Castle, but taking into account direct costs incurred by Castle on behalf of the
Company and including a deduction equal to the cost of capital invested
(exclusive of initial acquisition costs) in the Austin Operations by Castle. For
the purposes of this Agreement, Castle's cost of capital shall be deemed to be
10%. The Employee is hereby granted the right to participate in the Plan for
each year prior to the Termination Date. The annual amount which the Employee
shall be entitled to receive from the Plan shall be determined by a committee
consisting of Employee and the chief executive officer of Castle with the
approval of the Compensation Committee of the Board of Directors of Castle.
2.3 BENEFITS. During the terms of this Agreement, Employee shall be
entitled to receive such benefits as are made available to other personnel of
the Company in comparable positions, with comparable service credit and with
comparable duties and responsibilities. Such benefits shall be subject to the
terms of the applicable plan documents, summary plan descriptions and/or
employment policies and shall be subject to modification, amendment or
revocation in accordance with the terms of such documents, policies and
procedures.
2.4 REIMBURSEMENT OF EXPENSES. The Company shall reimburse all reasonable
travel and entertainment expenses incurred by Employee in connection with the
performance of his duties pursuant to this Agreement, consistent with the
Company's policies then in effect. Employee shall provide the Company with
written expense reports of his expenses in accordance with the usual customary
practice of the Company.
ARTICLE III
3.1 TERM. The term of this Agreement shall commence on the date hereof and
end on _______________, 2000 subject to the right of either party to terminate
this agreement as provided
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below. The date on which this Agreement is terminated is referred to hereunder
as the "Termination Date".
3.2 DEATH; DISABILITY. Subject to the provisions of Section 3.5(a), this
Agreement shall be automatically terminated on the death of Employee or on the
permanent disability of Employee if he is no longer able, with reasonable
accommodation, to perform the essential functions of his position with the
Company. In the event of Employee's disability, this Agreement shall not
terminate unless and until Employee has been unable to perform the essential
functions of his position hereunder for a period of three (3) consecutive months
as a result of the Employee's disability.
3.3 TERMINATION WITHOUT CAUSE. Either the Company or Employee may
terminate this Agreement at any time, without cause, by giving the other thirty
(30) days' written notice of termination.
3.4 TERMINATION WITH CAUSE. In addition to the Company's right to
terminate this Agreement without cause as provided in Section 3.3 hereof, the
Company may terminate this Agreement for "Cause." "Cause" means the termination
by the Company of Employee's employment for any of the following grounds:
(a) the commission of any act of fraud on the part of Employee
resulting or intending to result in personal gain or enrichment at the expense
of the Company;
(b) misappropriation, embezzlement, theft or willful and material
damage of or to any asset of the Company or the use of the Company funds or
assets for any illegal purpose;
(c) a good faith determination by the Board of Directors of the
Company that Employee has violated this Agreement or committed an act of gross
negligence or willful misconduct (in the case of a breach, following notice
thereof to Employee by the Company and a thirty day period thereafter within
which Employee shall have the opportunity to cure such breach) that has or is
reasonably expected to have a material adverse effect on the business or affairs
of the Company; or
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(d) the commission of any felony on the part of Employee which, in
the sole discretion of the Board of Directors of the Company, materially and
adversely, directly or indirectly, affects the name or goodwill of the Company;
A notice of termination pursuant to this Section 3.4 shall be in writing
and shall state the alleged reason for termination. Within not less than five
(5) nor more than twenty (20) days after such notice, Employee shall be given
the opportunity to appear before the Board of Directors of the Company, or a
committee thereof, to rebut or dispute the alleged violation. If the Board of
Directors or committee determines, by vote of a majority of the directors other
than Employee (if Employee is then a director), that one or more grounds exist
for termination of Employee for Cause, the Company may immediately terminate
Employee's employment under this Section 3.4. The Company may elect, during the
pendency of such inquiry, to relieve Employee of his regular duties.
3.5 SEVERANCE PAY. In the event of termination, Employee shall be entitled
to compensation (the "Severance Pay") in accordance with the following:
(a) If Employee's employment is terminated by reason of his
disability, the Company shall continue to pay Employee's monthly Base Salary (at
his then current Base Salary rate excluding any increases that would have taken
effect beyond the date of termination and any bonus and noncash benefits) the
Employee would have earned for the three month period subsequent to the
effective date of termination, payable at such time or times as would have been
paid to Employee had he remained employed by the Company.
(b) If (i) Employee voluntarily terminates his employment, or (ii)
the Company terminates this Agreement for Cause, or (iii) if Employee's
employment is terminated by reason of his death, Employee shall not be entitled
to receive any additional salary, bonus or benefits beyond those earned or
accrued as of the effective date of the termination of his employment.
(c) If Employee's employment hereunder is terminated prior to the
expiration of the term of this Agreement, and such termination is either (i) due
to a breach of this Agreement by the Company, or (ii) by the Company and not for
Cause, Employee shall be entitled to Severance Pay in an amount equal to the
amount of Base Salary that the Employee would have earned for the remainder of
the Term described in Section 3.1 hereof, less applicable payroll deductions
(and any other deductions authorized in writing by the Employee), payable at
such time or times as would have been paid to Employee had he remained employed
by the Company through the term of this
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Agreement; provided, however, prior to the termination of this Agreement as the
result of a breach hereof by the Company, Employee shall give written notice of
such breach and the Company shall have a thirty day period within which to cure
such breach.
3.6 EFFECT OF TERMINATION ON AGREEMENT. Any termination of Employee's
employment shall not release either the Company or Employee from their
respective obligations under this Agreement that are required to be performed
subsequent to the date of such termination, including but not limited to those
obligations set forth under Articles III, IV, V and VI.
3.7 PAYMENTS TO ESTATE. If Employee should die before all amounts payable
to him pursuant to Section 3.5 have been paid, such unpaid amounts shall be paid
to Employee's estate.
ARTICLE IV
4.1 NONDISCLOSURE AND NONUSE OF CONFIDENTIAL INFORMATION. Employee
understands and agrees that his employment by the Company creates a relationship
of confidence and trust between himself and the Company with respect to
Confidential Information (as defined below). Employee recognizes that he will
have access to and knowledge of Confidential Information. Employee will not,
during or after the term of his employment by the Company, in whole or in part,
disclose such Confidential Information to any person, firm, corporation,
association, or other entity for any reason or purpose whatsoever, nor shall he
make use of any such Confidential Information for his own purposes or for the
purposes of others; provided, however, that nothing in this Article shall be
construed to prohibit the disclosure of such Confidential Information by the
Employee (i) to another officer, director, employee or agent of the Company;
(ii) as is reasonably necessary for the performance of his duties and
responsibilities under this Agreement; or (iii) as otherwise required by law. If
Employee is required by law to disclose "Confidential Information," Employee
shall notify the Company's Board of Directors, in writing, of the nature of such
disclosure and the Confidential Information to be disclosed, as soon as is
possible and/or practical, and permit the Company the opportunity to contest or
limit such disclosure.
4.2 CONFIDENTIAL INFORMATION DEFINED. The term "Confidential Information"
shall mean and include any and all records, computer programs, data, patent
applications, trade secrets, customer lists, customer databases, video programs
and programming, proprietary information, technology, pricing policies,
financial information, methods of doing business, acquisition practices, policy
and/or procedure manuals, training and recruiting procedures, accounting
procedures, the status and
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content of the Company's contracts with its customers, the Company's business
philosophy, and servicing methods and techniques at any time used, developed, or
investigated by the Company, before or during Employee's tenure of employment,
or other information of any kind expressed or recorded on any medium arising out
of, concerning, or acquired in connection with the research, development,
commercialization and other activities of the Company; but "Confidential
Information" does not include information (i) generally known or available in
the industry, through no fault of Employee; or (ii) available from a third party
without violation of any duty of confidentiality by Employee or others.
4.3 DELIVERY OF MATERIALS. Employee further agrees to deliver to the
Company at the termination of his employment, or at any other time upon request
by the Company, all correspondence, memoranda, notes, records (including
computer records and data), drawings, sketches, plans, customer lists, and other
documents, which are made, composed, or received by Employee, solely or jointly
with others, during the term of his employment and which are in Employee's
possession, custody, or control at such date and which are related in any manner
to the past, present or anticipated business of the Company.
ARTICLE V
5.1 NONINTERFERENCE WITH EMPLOYMENT RELATIONSHIPS. During the term of
Employee's employment and during the twenty-four months following the
termination of the Employee's employment, Employee agrees not to solicit or
induce any employee of the Company or Xxxx X. Xxxxxx, D.D.S., P.C. ("Castle PC")
to terminate his or her employment, accept employment with anyone else, or to
interfere in a similar manner with the business of the Company or Castle PC.
5.2 NONSOLICITATION OF CUSTOMERS AND SUPPLIERS During the employment of
the Employee pursuant to this Agreement and during the twenty-four months
following the termination of the Employee's employment, Employee agrees not to
contact, communicate with or solicit any customer of the Company or Castle PC
for the purpose of engaging in the Same or Similar Business (as defined below)
as the Company.
5.3 NONCOMPETITION. Employee recognizes that in connection with the
performance of the Employee's duties and obligations under this Agreement, the
Company will provide Employee with confidential, proprietary and trade secret
information, which is necessary to Employee's employment with the Company, and
which Employee has agreed to protect and maintain as
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confidential, proprietary and trade secret information for the Company's
benefit. To protect and maintain the confidentiality of the information,
Employee agrees that, during the employment of the Employee pursuant to this
Agreement, including the period during which Employee is receiving Severance Pay
hereunder, and during the twenty-four months following such period, Employee
shall not directly or indirectly engage in, manage, operate, join, control, or
participate in the ownership, management, operation, or control of, or be
employed or engaged or act as a consultant to in any manner by, any business
competing in the Same or Similar Business as the Company or Castle PC within a
ten mile radius around the city limits of any city in the State of Texas in
which the Employee has responsibility for the management of locations providing
dental management services as of the date of Employee's employment hereunder;
provided, however, that Employee shall be able to practice dentistry as a sole
practitioner without violating this section.
5.4 SAME OR SIMILAR BUSINESS DEFINED. For purposes of this Article V, the
"Same or Similar Business" as the Company or Castle PC shall be defined as any
business that is engaged to a significant extent in the provision of dental care
and services, including but not limited to the practice of general dentistry,
orthodontics and all related dental care services, the management of such
services or practices, or the management of or consulting with dental practice
management companies.
5.5 REASONABLENESS OF RESTRICTIONS. Employee has carefully read and
considered the provisions of this Article V and, having done so, agrees that the
restrictions set forth in such Article contain reasonable limitations as to
time, geographical area, scope of activity to be restrained, and do not impose a
greater restraint than is necessary to protect the goodwill or other legitimate
business interests of the Company. The Employee further understands and agrees
that, if at some later date, a court of competent jurisdiction determines that
the scope, duration or geographic area of any covenant set forth in this Article
is overbroad or unenforceable for any reason, these covenants shall be reformed
by the court and enforced to the maximum extent permissible under Texas law.
ARTICLE VI
6.1 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
parties and their heirs, legal representatives, successors and assigns. The
Company may assign its interest in this Agreement, and all covenants, conditions
and provisions hereunder shall inure to the benefit of and be enforceable by its
assignee or successor in interest. The rights and obligations of Employee under
this Agreement are personal to him, and no such rights, benefits or obligations
shall be
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assignable, except that his personal representatives and heirs may enforce the
obligations of the Company hereunder.
6.2 WAIVER OF BREACH. The waiver by any party to this Agreement of a
breach or violation of any provisions hereof shall not operate or be construed
to be a waiver of any subsequent breach hereof.
6.3 NOTICES. Any and all notices required or permitted to be given under
this Agreement shall be sufficient if furnished in writing and given in person,
or shall be deemed given five (5) days after sent by certified mail, return
receipt requested, to the address as set forth below on the signature pages of
this Agreement. If any party hereto desires to amend its address hereunder, that
party shall send written notice of the new address to all other parties hereto.
6.4 GOVERNING LAW. This Agreement shall be interpreted, construed and
governed in accordance with the laws of the State of Texas without regard to
conflict of laws provision. This Agreement is performable in Xxxxxx County,
Texas.
6.5 HEADINGS. The paragraph headings contained in this Agreement are for
convenience only, and shall in no manner be construed to be part of this
Agreement.
6.6 COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same agreement. A fully executed copy of this Agreement
shall be delivered to each party hereto.
6.7 LEGAL CONSTRUCTION. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal,
or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not effect any other provision hereof, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. In addition, such invalid, illegal or unenforceable
provision shall be modified to the minimum extent necessary to permit it to be
valid, legal and enforceable. For all purposes hereof "day" shall mean calendar
day and shall include weekends and holidays; provided, however, that if any
notice period terminates on a weekend or holiday, the person who is required to
deliver the notice shall have until the next business day to complete the notice
requirement.
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6.8 AMENDMENT. No modification, amendment, addition to, or termination of
this Agreement, nor waiver of any of its provisions, shall be valid or
enforceable unless it is in writing and signed by all of the parties hereto.
6.9 PRIOR AGREEMENTS SUPERSEDED. This Agreement constitutes the sole and
only Agreement of the parties hereto and supersedes any prior understanding or
written or oral agreements, correspondence or communications between the parties
respecting the subject matter hereof.
6.10 ARBITRATION. EXCEPT FOR THE REMEDY PROVIDED UNDER SECTION 6.11 BELOW,
ANY CLAIM OR DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE
EMPLOYMENT OF EMPLOYEE BY THE COMPANY SHALL BE SUBMITTED TO FINAL AND BINDING
ARBITRATION IN AUSTIN, TEXAS PURSUANT TO THE EMPLOYMENT DISPUTE RESOLUTION RULES
OF THE AMERICAN ARBITRATION ASSOCIATION. THE PARTIES AGREE THAT ANY PARTY
REQUESTING ARBITRATION OF ANY DISPUTE UNDER THIS SECTION MUST GIVE FORMAL
WRITTEN NOTICE OF THE PARTY'S DEMAND FOR ARBITRATION ("ARBITRATION NOTICE")
WITHIN ONE HUNDRED TWENTY (120) DAYS AFTER SUCH DISPUTE FIRST ARISES AND FAILURE
TO TIMELY COMMUNICATE ARBITRATION NOTICE SHALL CONSTITUTE A WAIVER OF SUCH
DISPUTE. THE PARTIES FURTHER AGREE THAT EACH PARTY MAY BE REPRESENTED BY COUNSEL
IN ANY PROCEEDING UNDER THIS SECTION, AND THAT ALL EXPENSES AND FEES INCURRED IN
CONNECTION WITH ANY PROCEEDING UNDER THIS SECTION SHALL BE PAID BY THE
NON-PREVAILING PARTY (AS DETERMINED BY THE ARBITRATORS). BOTH PARTIES AGREE THAT
NOTHING IN THIS SECTION SHALL BE CONSTRUED TO REQUIRE THE ARBITRATION OF ANY
DISPUTE OR CLAIM (i) ARISING UNDER ARTICLES IV OR V OF THIS AGREEMENT; (ii) FOR
UNEMPLOYMENT COMPENSATION BENEFITS; OR (iii) FOR WORKERS' COMPENSATION BENEFITS.
BY THEIR EXECUTION OF THIS AGREEMENT, EACH PARTY TO THIS AGREEMENT CONSENTS, ON
BEHALF OF HIMSELF OR ITSELF AND THEIR RESPECTIVE SUCCESSORS, HEIRS AND ASSIGNS,
TO SUCH BINDING ARBITRATION IN ACCORDANCE WITH THE TERMS OF THIS SECTION.
6.11 REMEDIES. Employee agrees that the remedy at law for any breach of
any provision of Articles IV and V will be inadequate and that the Company will
be entitled to seek
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injunctive and equitable relief for any such breach, in addition to all other
remedies permitted by law.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement in ____________, Texas as of the date first set forth above.
THE COMPANY:
CASTLE DENTAL CENTERS OF TEXAS, INC.
By: ________________________________
Name: Xxxx X. Xxxxxx, Xx.
Title: President
Address: __________________________
____________________________________
____________________________________
ATTENTION: President
EMPLOYEE:
____________________________________
Xxxx Xxxxxxx, D.D.S.
Address: ___________________________
____________________________________
____________________________________
____________________________________
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