EXHIBIT 10(K)
EMPLOYMENT AND NONCOMPETITION AGREEMENT
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This agreement is made effective October 21, 1998, between American Dental
Partners, Inc., a Delaware corporation (the "Company"), and Xxx X. Xxxxxxx (the
"Employee"), who hereby agree as follows:
(S)1. Employment. Upon the terms and subject to the conditions described in
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this agreement, the Company hereby employs the Employee and the Employee hereby
accepts employment by the Company.
(S)2. Term. The Employee's employment with the Company pursuant to this
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agreement shall be for the period beginning on November 16, 1998 (the
"Commencement Date") and ending on the third anniversary of the Commencement
Date (the "Initial Term"), unless sooner terminated pursuant to 8 of this
agreement. This agreement may be extended or renewed after the expiration of
the Initial Term, but only by mutual written agreement of the Parties. When
permitted by the context, any reference in this agreement to the "term of this
agreement" shall include the Initial Term and the period of any such extensions
or renewals.
(S)3. Services. The Employee shall serve as Vice President, General Counsel
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of the Company, shall report directly to the Chief Executive Officer of the
Company (the "CEO), and shall devote his full business and professional time,
attention, energy, loyalty, and skill to the Company's business, performing such
executive or administrative tasks and having such responsibilities as may be
assigned to him from time to time by the CEO or the Board of Directors of the
Company (the "Board").
(S)4. Compensation. As compensation for his services under this agreement,
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the Company shall pay the Employee a base salary at the annual rate of $130,000
(the "Base Salary"), payable in bi-weekly installments, in arrears, and in
accordance with the Company's general policies and procedures for payment of
salaries to its executive personnel. The Employee's performance shall be
reviewed not less often than annually for the purpose, among others, of
considering potential increases in the Base Salary, but the Company shall not be
obligated to make any such increases.
In addition, the Employee may earn an annual bonus for each calendar year
during the term of this agreement, beginning with calendar year 1999, in an
amount up to 25% of the Base Salary (as in effect from time to time), which
bonus shall be based upon and tied to the achievement of various objectives to
be prepared annually by the CEO. For the first full calendar year of the
Initial Term, the Employee shall in fact be paid a bonus equal to 25% of his
Base Salary so long as the Employee remains employed for such full year and has
not received written notice of a Performance Failure as set forth in 8(i)(B) of
this agreement. Any such annual bonuses earned shall be paid in cash.
(S)5. Fringe Benefits and Perquisites. During the term of this agreement,
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the Employee shall also be entitled to the following fringe benefits and
perquisites:
(a) Group health and welfare benefits comparable to those offered
generally to the Company's executive personnel from time to time;
(b) Three weeks paid vacation during each year of this agreement;
(c) Participation in such stock option plans of the Company as may
be designated from time to time by the board of directors of the Company
(or a duly authorized committee of such board), in its discretion, subject
to all terms and conditions of such plans; and
(d) Such other benefits and perquisites as may be offered generally
to the Company's executive personnel from time to time pursuant to such
terms, conditions, and policies as may be approved by the Board.
(S)6. Initial Stock Option. As additional consideration for the Employee's
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covenants contained in this agreement, the Company shall grant to the Employee,
as of the date of this agreement, an option (the "Option") to purchase a total
of up to 15,000 shares of common stock, par value $.01 a share, of the Company
(the "Shares"), pursuant to the Company's Amended and Restated 1996 Stock Option
Plan, as amended (the "Plan"). The Option shall be evidenced by a separate
option agreement in the form approved for use in connection with the Plan, which
agreement shall provide, among other terms, that the Option shall vest with
respect to 25% of the Shares on each of the first four anniversaries of the
Commencement Date (subject to the other terms of the Plan and such agreement).
(S)7. Confidentiality; Noncompetition. The Employee shall not, directly or
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indirectly, at any time (whether during the term of this agreement or
thereafter), disclose any Confidential Information (defined below) to any
person, association, or other entity (other than the Affiliated Companies, as
defined below), or use, or permit or assist any person, association, or other
entity (other than the Affiliated Companies) to use, any Confidential
Information, excepting only: (i) Confidential Information which (A) is then
generally available to or obtainable by the public and which did not become so
available or obtainable through the breach of any provision of this agreement by
the Employee, or (B) is obtained by the Employee on a non-confidential basis
from a source other than an Affiliated Company or any agent or other
representative of an Affiliated Company and such source had the right to
disclose such Confidential Information to the Employee without violating any
legal, contractual, fiduciary, or other obligation; and (ii) disclosures
required by applicable law.
Upon termination of his employment by the Company (for any reason), the
Employee shall immediately deliver to the Company all documents and other
materials containing any Confidential Information which are in his possession or
under his control.
During the Restricted Period (defined below), the Employee shall not,
directly or indirectly
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(whether individually or as a shareholder or other owner, partner, member,
director, officer, employee, consultant, creditor or agent of any person,
association, or other entity):
(a) Enter into, engage in, or promote or assist (financially or
otherwise), directly or indirectly, any business which competes with the
business of any Affiliated Company (the "Business") anywhere in the
Restricted Territory, provided that the foregoing shall not preclude the
Employee from owning less than 1% of the outstanding capital stock of any
corporation whose shares are publicly traded on a national securities
exchange or system;
(b) Solicit or attempt to solicit business in competition with the
Business from any insurance company, any dental plan provider, any person
or entity which provides professional dental care services to the public,
or any other third party to which any Affiliated Company provides
management, consulting, or other services (in any such case, a "Restricted
Company"), or interfere or attempt to interfere with any relationship of
any Affiliated Company with any Restricted Company;
(c) Induce or encourage any employee, officer, director, agent,
supplier, or independent contractor of any Affiliated Company to terminate
its relationship with any such Affiliated Company, or otherwise interfere
or attempt to interfere in any way with any Affiliated Company's
relationships with its employees, officers, directors, agents, suppliers,
independent contractors, or others;
(d) Employ or engage any person who, at any time within the one-year
period immediately preceding such employment or engagement, was an
employee, officer, director, or agent of any Affiliated Company; or
(e) Make any statement (oral or written) or take any other action
which would tend to disparage or diminish the reputation of any Affiliated
Company.
For purposes of this agreement:
(i) "Affiliated Companies" shall include the Company and all
subsidiaries or affiliates of the Company other than Summit Ventures IV,
L.P. and any of its affiliates which are not engaged in a business similar
to that of the Company or any of its subsidiaries;
(ii) "Confidential Information" shall mean all trade secrets,
proprietary data, and other confidential information of any Affiliated
Company, including without limitation financial information, information
relating to business operations, services, promotional practices, and
relationships with Restricted Companies, suppliers, employees, independent
contractors, or other parties, and any information which any Affiliated
Company is obligated to treat as confidential pursuant to any course of
dealing or any agreement to which it is a party or otherwise bound;
(iii) "Restricted Period" shall mean the period beginning on the
Commencement
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Date and ending on the later of (A) the third anniversary of the
Commencement Date or (B) the second anniversary of the date (the
"Termination Date") of termination (for any reason) of Employee's
employment with the Company (whether pursuant to this agreement or
otherwise); and
(iv) "Restricted Territory" shall mean all cities and metropolitan
statistical areas in which any Affiliated Company has owned, leased,
managed, or operated an office or other facility at any time during the 12-
month period immediately preceding the Termination Date.
The Employee acknowledges that (1) the provisions of this section are
fundamental and essential for the protection of the Company's legitimate
business and proprietary interests, (2) such provisions are reasonable and
appropriate in all respects, and (3) in the event of any violation by the
Employee of any of such provisions, the Company would suffer irreparable harm
and its remedies at law would be inadequate. In the event of any violation or
attempted violation of such provisions by the Employee, the Company shall be
entitled to a temporary restraining order, temporary and permanent injunctions,
specific performance, and other equitable relief, without any showing of
irreparable harm or damage or the posting of any bond, in addition to any other
rights or remedies which may then be available to the Company.
(S)8. Termination. The Employee's employment with the Company shall
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terminate automatically upon the death of the Employee and may be terminated by
the Company, without any further obligation on the part of the Company (except
as provided in clause (c), below), immediately upon notice to the Employee under
any of the following circumstances:
(a) At any time for Cause (defined below);
(b) At any time when the Employee is under a Long-Term Disability
(defined below); or
(c) At any time without Cause; provided that if the Company terminates
the Employee's employment pursuant to this clause (c) and no other basis for
termination exists under this agreement, then the Employee shall be entitled to
severance payments in an aggregate amount equal to the Base Salary for a period
of one year. Any such severance payments shall be payable periodically in the
same manner as the Base Salary is payable under 4 of this agreement, and,
notwithstanding any other provisions of this agreement to the contrary, such
severance payments shall be payable only so long as the Employee is in full
compliance with the provisions of 7 of this agreement.
For purposes of this agreement:
(i) "Cause" shall mean:
(A) any act constituting (1) a felony under the federal laws of the
United States, the laws of any state, or any other applicable law, (2) fraud,
embezzlement, misappropriation of assets,
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willful misfeasance, or dishonesty, or (3) other criminal conduct which in any
way materially and adversely affects the reputation, goodwill, or business
position of the Company;
(B) the failure of the Employee to perform and observe all material
obligations and conditions to be performed and observed by the Employee under
this agreement, or to perform his duties in accordance with the policies,
programs, budgets, procedures, and directions established from time to time by
the CEO or the Board (any such failure, a "Performance Failure"), and to correct
such Performance Failure promptly following written notice from the Company to
do so; or
(C) having corrected (or the Company having waived the correction
of) a Performance Failure, the occurrence of any subsequent Performance Failure;
and
(ii) "Long-Term Disability" shall mean that, because of physical or
mental incapacity, it is more likely than not that the Employee will be unable,
within 180 days after such incapacity commenced, to perform the essential
functions of his position with the Company, with or without reasonable
accommodation. In the event of any disagreement about whether or when the
Employee is under a Long-Term Disability, the question shall be determined: (A)
by a physician selected by agreement between the Employee and the Company if
such a physician is selected within 10 days after either of them requests the
other so to agree; or, if not, (B) by two physicians, the first of whom shall be
selected by the Employee and the second of whom shall be selected by the Company
or, if the Employee fails to make a selection within 10 days after being
requested to do so by the Company, the second physician shall be selected by the
first physician; or, if the two physicians fail to agree, (C) by a third
physician selected by the first two physicians. The Employee shall submit to all
reasonable examinations requested by any such physicians.
(S)9. Capacity. The Employee represents and warrants to the Company that
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he has the capacity and right to enter into this agreement and perform all of
his obligations under this agreement without any restriction.
(S)10. Remedies. All rights and remedies of either Party under this
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agreement are cumulative and in addition to all other rights and remedies which
may be available to that Party from time to time, whether under any other
agreement, at law, or in equity.
(S)11. Survival. The termination of the Employee's employment with the
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Company (for any reason) shall not relieve either Party of any of that Party's
obligations under this agreement existing at, arising as a result of, or
relating to acts or omissions occurring prior to, such termination. Without
limiting the generality of the preceding sentence, in no event shall the
termination of such employment modify or affect any obligations of the Employee
or rights of the Company under 7 of this agreement, all of which shall survive
the termination of such employment.
(S)12. Notices. All notices and other communications under this agreement
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to either Party shall be in writing and shall be deemed given when delivered
personally, telecopied (which is confirmed) to that Party at the telecopy number
for that Party set forth below, mailed by certified mail (return receipt
requested) to that Party at the address for that Party (or at such other address
for such Party as such Party shall have specified in notice to the other Party)
or delivered to Federal
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Express, UPS, or any similar express delivery service for delivery to that Party
at that address:
(a) If to the Company:
American Dental Partners, Inc.
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Chief Executive
Officer
Telecopy No.: (000) 000-0000
with a copy to
Xxxxx & Xxxxxxxxx
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
(b) If to the Employee:
Xxx X. Xxxxxxx, Esq.
00 Xxxxxxx Xx., #0
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy No.: _______________
(S)13. Severability. The intention of the Parties is to comply with all
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rules, laws, and public policies to the fullest extent possible. If and to the
extent that any court of competent jurisdiction is unable so to construe any
provision of this agreement and holds that provision to be invalid, such
invalidity shall not affect the remaining provisions of this agreement, which
shall remain in full force and effect. With respect to any provision in this
agreement finally determined by such a court to be invalid or unenforceable,
such court shall have jurisdiction to reform this agreement to the extent
necessary to make such provision valid and enforceable, and, as reformed, such
provision shall be binding on the Parties.
(S)14. Non-Waiver. No failure by either Party to insist upon strict
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compliance with any term of this agreement, to exercise any option, to enforce
any right, or to seek any remedy upon any default of the other Party shall
affect, or constitute a waiver of, the other Party's right to insist upon such
strict compliance, exercise that option, enforce that right, or seek that remedy
with respect to that default or any prior, contemporaneous, or subsequent
default. No custom or practice of the Parties at variance with any provision of
this agreement shall affect, or constitute a waiver of, either Party's right to
demand strict compliance with all provisions of this agreement.
(S)15. Complete Agreement. This agreement and all documents referred to in
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this agreement, all of which are hereby incorporated herein by reference,
contain the entire agreement
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between the Parties and supersede all other agreements and understandings
between the Parties with respect to the subject matter of this agreement. No
alterations, additions, or other changes to this agreement shall be made or be
binding unless made in writing and signed by both Parties.
(S)16. Governing Law. This agreement shall be governed by and construed in
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accordance with the laws of the Commonwealth of Massachusetts without regard to
principles of conflicts of law.
(S)17. Captions. The captions of the various sections of this agreement
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are not part of the context of this agreement, are only guides to assist in
locating those sections, and shall be ignored in construing this agreement.
(S)18. Genders and Numbers. Where permitted by the context, each pronoun
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used in this agreement includes the same pronoun in other genders and numbers,
and each noun used in this agreement includes the same noun in other numbers.
(S)19. Successors. This agreement shall be personal to the Employee, and
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neither this agreement nor any rights or obligations of the Employee under this
agreement may be assigned by the Employee to any third party. Any assignment or
attempted assignment by the Employee in violation of the preceding sentence
shall be null and void. Subject to the foregoing, this agreement shall be
binding upon, inure to the benefit of, and be enforceable by and against the
heirs, personal representatives, successors, and assigns of each Party.
AMERICAN DENTAL PARTNERS, INC.
By /s/ Xxxxxxx X. Xxxxxx /s/ Xxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxx, Chairman XXX X. XXXXXXX
of the Board and Chief
Executive Officer
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