EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated the 28th day of August, 1996 between
COMPLETE MANAGEMENT, INC., a New York corporation ("the Company"), with its
principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇"), residing at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
1. Term. Subject to the terms and conditions hereof, the term of employment
of ▇▇▇▇▇▇▇▇ under this Agreement shall be for the five (5) year period (the
"Employment Period") commencing on August 29, 1996 (the "Commencement Date") and
expiring on August 28, 2001, unless sooner terminated by ▇▇▇▇▇▇▇▇'▇ death or as
provided in any of Paragraphs 5, 6 or 7 hereof (the "Expiration Date").
2. Duties and Responsibilities. The Company shall employ ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ accepts such employment, as the Vice President of Medical Affairs of
the Company during the Employment Period. ▇▇▇▇▇▇▇▇ shall report to and be
subject to the direction of the Executive Vice President of the Physicians
Network Division of the Company and shall render such executive and
administrative services as such Vice President and/or the Board of Directors of
the Company (the "Board") may from time to time assign to him, provided they are
consistent with his status as Vice President of Medical Affairs. During the
Employment Period, ▇▇▇▇▇▇▇▇ shall devote substantially all of his business time
and attention to the businesses of the Company and shall perform his duties in a
diligent, trustworthy, loyal and businesslike manner.
3. Compensation and Benefits. During the Employment Term:
(a) ▇▇▇▇▇▇▇▇'▇ base compensation shall be at the rate of $280,000.00 per
year, payable in regular installments in accordance with the Company's practice
for its executives, less applicable withholding for income and employment taxes
as required by law and other deductions as to which ▇▇▇▇▇▇▇▇ shall agree. Such
base compensation shall be subject to increases as and when determined by the
Board in its sole discretion.
(b) Except as otherwise provided herein, ▇▇▇▇▇▇▇▇ shall be entitled to
participate, to the extent he qualifies, in any bonus or other incentive
compensation, profit-sharing or retirement plans, life or health insurance plans
or other benefit plans maintained by the Company, upon such terms and conditions
which are made available to executives of the Company, generally.
(c) In addition to the salary provided for in Paragraph 3(a), ▇▇▇▇▇▇▇▇
shall be entitled to an incentive bonus for each medical practice identified by
him with which the Company shall enter into a long-term management services (an
"MSA Agreement") agreement in its customary form. It is understood that the
Company shall have the final decision in its sole discretion as to whether it
shall enter into a management services agreement with such identified practice
and the terms thereof. The incentive bonus payable to ▇▇▇▇▇▇▇▇ for each such
medical practice with which the Company shall have entered into an MSA Agreement
shall be an aggregate of $10,000 of which: (i) $5,000 shall be payable in cash
and (ii) $5,000 shall be payable in shares of common stock, par value $.001 per
share, of the Company based upon its average unweighted closing price during the
twenty (20) consecutive trading days immediately preceding the signing of such
management services agreement. The cash portion
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of the incentive bonus shall be paid to ▇▇▇▇▇▇▇▇ promptly following the signing
of the management services agreement. Promptly following such signing, the
Company shall list the shares issuable in partial payment of the incentive bonus
on the American Stock Exchange (or such other Exchange on which the Common Stock
is then listed) and issue instructions to its transfer agent to issue and
deliver such shares to ▇▇▇▇▇▇▇▇ promptly following the listing thereof.
(d) ▇▇▇▇▇▇▇▇ shall be entitled to reimbursement of all reasonable, ordinary
and necessary business related expenses incurred by him in the course of his
duties and upon compliance with the Company's procedures. In such connection the
Company shall provide ▇▇▇▇▇▇▇▇ with an American Express Corporate Card or
equivalent.
(e) The Company shall lease a Mercedes 400 SEL automobile, equipped with
two cellular phones, for ▇▇▇▇▇▇▇▇' use. ▇▇▇▇▇▇▇▇ shall use due care in operating
and maintaining such automobile.
(f) ▇▇▇▇▇▇▇▇ shall be entitled to six (6) full weeks of paid vacation
during each calendar year which shall be taken in accordance with the procedures
of the Company in effect from time to time.
4. Incentive Stock Options. On the Commencement Date, the Company and
▇▇▇▇▇▇▇▇ shall enter into a Stock Option Agreement (the "Stock Option
Agreement"), substantially in the form attached hereto and marked Exhibit A,
pursuant to which the Company shall grant to ▇▇▇▇▇▇▇▇ options (the "Incentive
Stock Options") to acquire, at the then fair market value per share, such number
of shares of its Common Stock as have an aggregate exercise price of $75,000,
and upon such other terms and conditions as are set forth
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therein. In the event ▇▇▇▇▇▇▇▇'▇ employment is terminated for any reason other
than death or Disability (as defined in Paragraph 5) any nonvested Incentive
Stock Options shall immediately be canceled without any further action being
required to be taken by the Company.
5. Termination in Case of Disability. In case of a Disability, which for
this purpose shall mean that as a result of illness or injury, ▇▇▇▇▇▇▇▇ is
unable substantially to perform his duties hereunder for a period of at least
ninety (90) consecutive days, or a total of at least 180 days in any period of
365 consecutive days, the Company may terminate ▇▇▇▇▇▇▇▇'▇ employment hereunder
upon giving ▇▇▇▇▇▇▇▇ at least thirty (30) days' written notice of termination.
6. Termination in other events by the Company or ▇▇▇▇▇▇▇▇.
(a) The Company may terminate ▇▇▇▇▇▇▇▇'▇ employment for Cause (as defined
in sub-paragraph (b) below). Upon such termination the Company shall have no
further obligations to ▇▇▇▇▇▇▇▇ hereunder, except for obligations incurred prior
to the date of such termination.
(b) "Cause" shall mean (i) a material breach by ▇▇▇▇▇▇▇▇ of any of the
terms, covenants, agreements or representations set forth herein, which is not
remedied within fifteen (15) days after written notice thereof, or (ii)
commission by ▇▇▇▇▇▇▇▇ of an act constituting financial dishonesty against the
Company, (iii) commission by ▇▇▇▇▇▇▇▇ of a felony or any other crime involving
moral turpitude, or (iv) repeated failure by ▇▇▇▇▇▇▇▇ to follow reasonable
written directions of the Board of Directors or Executive Vice President of the
Company.
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(c) ▇▇▇▇▇▇▇▇ shall have the right to terminate this agreement, on 10 days'
written notice, if (i) the Company shall file a petition for bankruptcy or
re-organization under the federal bankruptcy statutes or an involuntary petition
is filed against the Company and not removed or withdrawn within 30 days or (ii)
the Company does not pay any material amount of compensation due hereunder and
then fails either to pay such amount within the 10-day notice period required
for termination hereunder or contest in good faith said notice. Further, if such
contest is not resolved within 30, days the Company shall submit such dispute to
a court of competent jurisdiction in a proceeding for declaratory judgment.
7. Confidentiality; Non-Compete.
(a) ▇▇▇▇▇▇▇▇ agrees that during the term hereof, or at any time thereafter,
he will not, directly or indirectly, use for his own benefit or for the benefit
of any third party, or reveal or cause to be revealed to any person, firm,
entity or corporation, any Confidential Information (as defined herein) which
relates to the Company or its strategies and procedures for conducting business
or its customers or any of the medical practices it manages or with which it has
negotiated (except in connection with the performance of his duties hereunder or
as may be required by law) and that upon termination of his employment he will
deliver all memorandum and/or information developed by or relating to the
Company, all lists of customers, and medical practices with whom or which the
Company has done or negotiated the doing of business and all other notes,
records and other property belonging to the Company or relating to its business
or its customers or the medical practices which it manages. Confidential
Information shall include, but not be limited to, trade secrets, supplier lists,
customer lists, medical practice lists, intellectual property and any other
information, whether
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or not proprietary, which relates to the business of the Company except to the
extent that such information becomes generally available to the public other
than as a result of ▇▇▇▇▇▇▇▇'▇ breach of this Section 7(a) or is received by him
from a third party not in violation of any obligation to the Company.
(b) For the period of two (2) years after the termination of this Agreement
(the "Non-Compete Period"), ▇▇▇▇▇▇▇▇ hereby covenants and agrees with the
Company, that, unless acting as an officer, employee or consultant to the
Company, or affiliate of the Company, or with the Company's prior written
consent, he will not anywhere in any geographic areas in which the Company is
then doing business; (i) compete, directly or indirectly, with the Company or
any of its affiliates in the business of managing medical practices, hospitals,
diagnostic centers or other similar medical related businesses (the "Competitive
Business"); (ii) directly or indirectly, on its own behalf or on behalf of or as
an employee or agent of any other person or entity, contact or approach any
person or business, wherever located, for the purpose of competing with the
Company in the Competitive Business; (iii) participate as a director, officer,
consultant, or partner of, or have any other direct or indirect financial
interest in, any enterprise which engages in the Competitive Business; provided,
however, that nothing herein shall prohibit ▇▇▇▇▇▇▇▇ from continuing to act as
the Systems Director of St. ▇▇▇▇▇▇▇ Hospital in Hartford, Connecticut; as the
Director of Radiology at St. ▇▇▇▇▇▇▇ Hospital in Poughkeepsie, New York; or as a
consultant to ▇▇▇▇▇▇ Valley Hospital Center in Peekskill, New York; provided,
further, that nothing herein shall prohibit ▇▇▇▇▇▇▇▇ from owning not more than
three (3%) percent of the outstanding stock of any corporation required to file
reports pursuant to the Securities Exchange Act of 1934; (iv)
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participate as an employee, agent, representative or consultant in, or render
any services to, any enterprise in which his responsibility competes, directly
or indirectly, with the Competitive Business; (v) persuade or attempt to
persuade any employee of the Company (or any of its subsidiaries) to leave the
employ of the Company (or any of its subsidiaries) or to become employed by any
other entity, (vi) persuade or attempt to persuade any current client or former
client to reduce the amount of business it does or intends or anticipates doing
with the Company (or any of its subsidiaries); or (vii) take any action which
might divert from the Company any opportunity of which he became aware during
his employment with the Company which would be within the scope of any of the
businesses then engaged in or to his knowledge planned to be engaged in by the
Company.
(c) ▇▇▇▇▇▇▇▇ acknowledges that a violation of any of the covenants
contained in this Paragraph 7 may cause irreparable injury to the Company and
that the Company will be entitled, in addition to any other rights and remedies
it may have, to injunctive relief; provided, however, that nothing contained
herein constitutes a waiver by ▇▇▇▇▇▇▇▇ of his rights to contest the existence
of any such violation of such covenants.
(d) In the event the covenants contained in this Paragraph 7 should be held
by any court or other duly constituted judicial authority to be void or
otherwise unenforceable in any particular jurisdiction or with respect to any
particular activity, then such covenants so affected shall be deemed to have
been amended and modified so as to eliminate therefrom the particular
jurisdiction or activity as to which such covenants are so held to be void or
otherwise unenforceable, and, as to all other jurisdictions and activities
covered hereby, the terms and provisions hereof shall remain in full force and
effect.
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(e) In the event this Agreement shall be terminated, then notwithstanding
such termination, the provisions of this paragraph 9 shall survive such
termination.
8. Successors; Binding Agreement. This Agreement shall inure to the benefit
of and be enforceable by the parties hereto, their personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If ▇▇▇▇▇▇▇▇ should die while any amount would still be
payable to him hereunder had he continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to his devisee, legatee or other designee or, if there be no such
designee, to his estate.
9. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement (except that
all notices to the Company shall be directed to the attention of a senior
officer of the Company, with a copy to the Secretary of the Company) or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
10. Governing Law; Change or Termination. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to
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agreements made and to be performed in New York, and may not be changed or
terminated orally.
11. Validity. The invalidity or unenforceability of any provision of this
Agreement in any respect shall not affect the validity or enforceability of such
provision in any other respect or of any other provision of this Agreement, all
of which shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be duly executed and delivered as of the date first hereinabove
written.
COMPLETE MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Senior Executive Vice President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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