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EXHIBIT 10.9
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
effective as of November 1, 1996 (the "Employment Date"), by and between
COASTAL PHYSICIAN GROUP, INC., a corporation organized and existing under the
laws of the State of Delaware (hereinafter referred to as "Company"), and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual resident of the State of Georgia (hereinafter
referred to as "Executive").
For and in consideration of the mutual covenants and promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and accepted, the parties hereto,
intending to be legally bound, agree as follows:
1. EMPLOYMENT. Company hereby agrees to employ Executive in the
positions of Interim President and Chief Executive Officer of Company, and
Executive accepts such employment, all subject to the terms and conditions
hereafter set forth in this Agreement. Executive shall perform his duties
hereunder on a full-time basis during normal business hours principally at the
Company's headquarters in Durham, North Carolina. Executive is, and shall
remain, a member of Company's Board of Directors, and this Agreement shall not
affect Executive's position, responsibilities, compensation, or rights as a
director, except as otherwise expressly set forth herein.
2. EMPLOYMENT TERM. The initial term of this Agreement is from the
Employment Date until February 28, 1997 (the "Initial Term"). In addition to
the Initial Term, this Agreement may be renewed for two additional successive
periods of one month each (each period a "Renewal Term"), unless either party
gives written notice of non-renewal at least thirty (30) days prior to the
expiration of the Initial Term or any Renewal Term. Either the Initial Term or
any Renewal Term may be terminated only pursuant to Section 7 hereof. If, prior
to the expiration of the Initial Term or any Renewal Term, Company gives notice
to Executive of non-renewal of this Agreement, then upon the expiration of the
Initial Term and any Renewal Term with regard to which notice of non-renewal
has not been and cannot be timely given, this Agreement shall terminate and
Company shall immediately pay to Executive all benefits and payments due him
under this Agreement through such termination date. In addition, upon
termination of this Agreement for any reason, except Executive's voluntary
written resignation pursuant to Section 7.1(b) or termination for cause
pursuant to Section 7.1(e), Company shall continue to provide insurance
benefits and health and medical insurance reimbursement (described in Section 6
below), for a period beginning on the date that termination is effective and
continuing for six (6) months after such termination is effective or until
Executive obtains other employment with comparable insurance benefits,
whichever shall first occur.
3. DUTIES OF EXECUTIVE. Executive shall have the duties set forth in
this Section 3 during the Initial Term and any Renewal Term of this Agreement.
3.1 DUTIES OF EXECUTIVE GENERALLY. Executive shall manage and
operate Company as President and Chief Executive Officer pursuant to the
By-Laws of Company and in
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accordance with the contractual obligations of Company as they existed on the
Employment Date. If Executive's authority as it exists on the Employment Date
is changed without his prior written consent so as to materially diminish his
authority or so as to remove authority or responsibilities customarily
commensurate with the authorities and responsibilities of a chief executive
officer of similar corporations, then Executive at his election may resign, and
such resignation shall be deemed to be a termination without cause by Company
pursuant to Section 7.2 hereof.
3.2 AUTHORITY TO SELECT SENIOR MANAGEMENT AND PROFESSIONALS.
Subject to the prior approval of the Board of Directors, Executive shall have
the duty and authority, on behalf of Company, to hire and fire senior
management and key executives and to select and retain such attorneys,
accountants (subject to the rights of the shareholders to approve auditors),
consultants, and other professionals as Executive determines are necessary or
appropriate to maximize value to shareholders of the Company, provided,
however, that prior approval of the Board shall not be required with regard to
the selection and retention of attorneys, accountants, consultants, and other
professionals to provide services in connection with the day to day operations
of the Company and other routine matters. If the Board shall decline to follow
any recommendation of Executive regarding the hiring of any qualified senior
management or key executives, the firing of any senior management or key
executives, or the selection and retention of any qualified attorney,
accountant, consultant or professional (including without limitation the
removal or replacement, in whole or in part, of any current attorney,
accountant, consultant or professional) that Executive has made in good faith,
then Executive at his election may resign, and such resignation shall be deemed
to be a termination without cause by Company pursuant to Section 7.2 hereof.
3.3 FURNISHING OF INFORMATION TO BOARD OF DIRECTORS. Executive
shall be responsible for providing information to the Board of Directors as the
members shall from time to time reasonably request. All requests by a member of
the Board of Directors for information about the Company and any other
communications by a member of the Board relating to the business and affairs of
the Company and matters of concern to the Board of Directors shall be directed
to Executive or to such other person as the Board of Directors might designate.
3.4 SEARCH FOR PERMANENT CHIEF EXECUTIVE OFFICER. Executive will
assist Company in the search for a permanent Chief Executive Officer. Such
search shall not exclude any existing employees, officers, or directors of
Company. During the Initial Term or any Renewal Term, Executive will work with
a new Chief Executive Officer through an orderly transition period and will be
compensated through such transition period in accordance with the provisions of
this Agreement otherwise in effect. Executive may not treat the employment of a
Permanent Chief Executive Officer as a termination of this Agreement.
4. COMPENSATION OF EXECUTIVE. Except as otherwise provided in
this Agreement, Company shall compensate Executive in the manner set forth in
this Section 4 during the Initial Term and any Renewal Term of this Agreement.
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4.1 BASE SALARY. Executive shall receive a Base Salary during
the Initial Term of Thirty Thousand Dollars ($30,000) per month and a Base
Salary during any Renewal Term of Fifty Thousand Dollars ($50,000) per month as
compensation for his services hereunder. The Base Salary shall be payable in
accordance with the general payroll practices of Company. The amount of the
Base Salary shall be reviewed at the beginning of each Renewal Term, but shall
not be decreased below the amounts specified herein. Company, in its sole
discretion, may increase the amount of compensation provided in this Section
4.1 without the necessity of amending this Agreement, but Company shall not
decrease the Base Salary at any time during the term of this Agreement without
the prior written consent of the Executive. Any increase shall not affect any
of the other terms and conditions of this Agreement.
4.2 SIGNING BONUS. Company shall pay Executive $100,000.00 upon
execution of this Agreement. If this Agreement is not terminated, Company may,
but shall not be obligated to, pay Executive additional bonuses on the first
day of each Renewal Term.
4.3 STOCK APPRECIATION RIGHTS. Unless Executive shall make an
election under Section 4.4 to forfeit the following Stock Appreciation Rights
(as defined below) in consideration of electing to have an opportunity to
receive alternative additional compensation, Company shall pay Executive an
amount determined in accordance with the following provisions:
(a) PURPOSE. Subject to the terms hereof, Executive shall have
the right to receive an amount equal to any appreciation occurring from and
after the Initial Date (hereafter defined) in 100,000 shares of Company's
common stock (presently traded on the New York Stock Exchange) and these
provisions shall be interpreted with a view to accomplishing such purpose. Such
right with regard to each share is referred to herein as a "Stock Appreciation
Right" or "SAR".
(b) VESTING. So long as the employment of Executive has not
terminated under Section 7.1(b) or 7.1(e) of this Agreement, Stock Appreciation
Rights shall vest as follows, unless Executive shall elect accelerated vesting
set forth in paragraph 4.4: 12,000 SARs shall vest on each of November 1, 1996,
December 1, 1996, January 1, 1997, February 1, 1997 and February 28, 1997 (for
a total vesting of 60,000 SARs during the Initial Term), and in the event
employment is extended through the first Renewal Term an additional 20,000 SARs
shall vest on March 31, 1997 and in the event employment is extended through
the second Renewal Term an additional 20,000 SARs shall vest on April 30, 1997.
(c) DEFINITIONS. Terms used herein shall have the following
meanings: (i) the term "Initial Price" shall mean the price per share for
Company's common shares at the close of business of the New York Stock Exchange
(as reflected on the New York Stock Exchange Composite Tape) on the Employment
Date (the "Initial Date"); (ii) the term "Sales Price" shall mean either: (A)
if there is a public market for such shares on the Sales Date, the average
price per share for Company's common shares at the close of business of the New
York Stock Exchange (as reflected on the New York Stock Exchange Composite
Tape, or if those shares are not traded at that time on the New York Stock
Exchange, the comparable standard for the trading
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market on which those shares are then traded) on the ten trading days next
preceding the date (the "Sales Date") on which delivery of notice of exercise
of the rights granted hereunder occurs; or (B) if there is no public market for
such shares on the Sales Date, the fair market value per share for Company's
common shares at the close of business on the Sales Date, determined by
agreement of Company and Executive or, in the absence of agreement, by an
independent professional appraisal firm. The appraisal firm shall be selected
by agreement of the parties or, in the absence of such agreement, by an
arbitrator appointed by the American Arbitration Association, by and through
its offices in Durham, North Carolina. Company shall pay all costs and expenses
arising out of or relating to determination of the Sales Price, including
without limitation all of Company's and Executive's arbitration fees, costs,
and expenses, and all appraisal fees, and all of Executive attorneys' fees and
expenses that Executive may incur in connection with selection of an appraisal
firm and determination of fair market value as herein set forth.
(d) EXERCISE. Executive shall have the right to exercise the
rights granted hereunder which have vested at any time and from time to time
during the two-year period beginning on March 1, 1997 and ending at 12:00 p.m.
Eastern Standard Time on February 28, 1999. Such rights may be exercised by
delivering written notice thereof (which notice shall specify the number of
shares with respect to which such rights are being exercised) by facsimile
(919-383-0247) to Company's chief executive officer or its general counsel with
copies thereof being mailed promptly thereafter by certified mail addressed to
Company, ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to the attention of such
officer or officers and with copies thereof also being given promptly to
Company in the manner prescribed for notices in Section 11.7 hereof.
(e) AMOUNT. The amount payable to Executive hereunder shall be
determined in accordance with the following provisions: (i) The Initial Price
shall be subtracted from the Sales Price to determine the per share
appreciation which has occurred; (ii) the per share appreciation shall then be
multiplied by the number of shares with respect to which Executive has
exercised his rights hereunder; and (iii) the resulting sum shall be the amount
payable to Executive hereunder. Such amount shall be paid to Executive on the
SAR Due Date (as defined herein), provided, that if the Sales Price is
determined by agreement or appraisal, such amount shall be paid within three
days after conclusion of such agreement or appraisal, together with interest at
the rate specified in Section 11.8 hereof on the amount thus determined,
payable for the period beginning on the SAR Due Date and ending on the date of
payment. The "SAR Due Date" shall mean, with regard to each exercise of SAR
rights hereunder, such date which is the later of November 1, 1997 or three (3)
days after receipt of notice exercising such rights. To the extent not
exercised, such rights shall remain in full force and effect, and upon
subsequent exercise by Executive as hereinabove provided, the amount payable to
Executive shall again be determined in accordance with the foregoing
provisions.
(f) ADJUSTMENT. In the event Company's outstanding common shares
shall be subdivided (split) or combined (reverse split), by reclassification or
otherwise, or in the event of any special dividend payable on such shares in
shares of Company's stock, the Initial Price and
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the number of shares with respect to which the rights granted hereunder exist
shall be proportionately adjusted to accomplish the purposes hereof.
(g) REORGANIZATIONS. If at any time during the three year term
hereof there shall be a capital reorganization of Company's common shares, then
as part of such reorganization, lawful provision shall be made so that
Executive's rights hereunder shall be protected in a manner which will
accomplish the purposes hereof.
(h) MERGER, BUSINESS COMBINATION. If a merger, consolidation,
share exchange or business combination occurs which results in Company's common
shares being acquired by another entity or entities (whether for cash,
securities, or other consideration), or if substantially all of Company's
assets and properties are sold to another entity or entities, the following
provisions shall be controlling of purposes hereof: (i) Executive shall be
deemed to have exercised his remaining rights on the closing date of such
transaction; (ii) the amount payable to Executive shall be determined and paid
within three days after such closing date; and (iii) Executive shall not
thereafter have any further right to receive payments based upon appreciation
in Company's common shares.
(i) INFORMATION. Upon the occurrence of each adjustment or
readjustment pursuant to the provisions contained herein, Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish Executive with information setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based.
4.4 Alternatives to SARs. At any time on or before sixty (60) days
after the termination of this Agreement (which date is hereinafter referred to
as the "Election Date"), Executive may make an election under this Section to
either retain the SARs or to forfeit the SARs provided for in Section 4.3 and be
eligible instead to receive either, but not both, of the following:
(a) TRANSACTION FEE. In the event Company consummates a
Transaction (as herein defined) during the term of this Agreement or within six
(6) months from the date of termination of this Agreement or with an entity or
entities with which the Company entered into a binding contract during the term
of this Agreement or within six (6) months from the date of termination of this
Agreement, Company shall pay, or cause to be paid, to Executive, at the time
the Transaction is consummated, a payment equal to one-half of one percent
(0.5%) of the fair market value of the acquisition price paid by the acquiring
entity or entities in connection with the Transaction. As used herein,
"Transaction" means any one or more transactions or series of transactions
which are conditioned on each other or which occur or are planned or are
committed to occur at substantially the same time and which, taken together
result in either (i) merger or consolidation where Company is not the
consolidated or surviving company or where the shareholders of Company prior to
the merger or consolidation do not own a majority of the shares of the
consolidated or merged company;, (ii) a transfer of over fifty percent (50%) of
the assets of Company;, or (iii) a transfer or issuance of over fifty percent
(50%) of the Common Stock of Company.
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(b) DEBT RESTRUCTURE FEE. In the event that, during the term of
this Agreement or within six months from the date of termination of this
Agreement, Company restructures its debts other than in bankruptcy proceedings
resulting in at least a fifteen percent (15%) reduction in the stated principal
amount and accrued interest of (i) Company's existing bank debt, or (ii)
Company's total liabilities, Company shall pay Executive a payment equal to
one-half of one percent (0.5%) of the amount of the reduction determined as of
the date immediately after the final debt restructuring. Such payment shall be
due within three (3) business days after conclusion of the final debt
restructuring.
Executive shall, if he elects to receive the full accelerated vesting of the
SARs or to be eligible for either the Transaction Fee or the Debt Restructure
Fee, notify the Company in the same manner as provided in Section 11.7. Such
notice shall be in writing and shall state specifically which fee Executive had
elected to be eligible for. Failure to make an election by the Election Date to
accept the 100,00 SARs or be eligible for either the Transaction Fee or the
Debt Restructure Fee shall mean that Executive shall retain the SARs described
in Section 4.3 subject to the vesting schedule and requirements set forth in
Section 4.3. Election to be eligible for either the Transaction Fee or the Debt
Restructure Fee shall be deemed an abandonment and waiver of the SARs described
in section 4.3 and a waiver of a right to receive whichever fee Executive did
not elect. The election shall be made only once and shall be irrevocable when
made.
4.5 DIRECTOR FEE. Executive shall not receive a fee or other
compensation for attending meetings and other services provided as a member of
Company's Board of Directors for so long as Executive shall remain a salaried
employee of the company.
5. BUSINESS RELATED EXPENSES. Upon presentation in accordance with
Company policies of itemized accounts of his expenditures relating to his
performance as an Executive, Company promptly shall reimburse Executive for all
reasonable and necessary travel and living expenses and other disbursements
incurred by Executive on behalf of Company in the performance of his duties
under this Agreement. Without limiting the generality of the foregoing, Company
agrees to reimburse Executive in accordance with the provisions of this Section
5 for any and all travel and living expenses incurred by Executive in
connection with or related to Executive's weekly plane trips to and from his
home in Atlanta, Georgia, and daily meal and living expenses in Durham, North
Carolina, and other locations to which Executive travels on Company business.
6. EXECUTIVE BENEFITS.
6.1 BENEFITS GENERALLY. Executive shall be eligible to
participate in all Executive benefits, bonus, and similar programs of Company
and in all other incentive, pension, thrift, profit sharing, stock option,
deferred compensation, Executive loan and insurance plans, and arrangements
maintained by Company from time to time for the benefit of its Executives;
except that Executive shall not, at his request, participate in any medical or
health benefit plan maintained by Company. Executive shall continue to maintain
his own medical, health, and
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dental benefit plan and Company shall reimburse Executive $400 per month for
the premiums of that plan (plus any increases in the monthly premium). Company
may change, alter, or modify any benefits or benefit programs from time to
time, provided Executive continues to receive benefits equivalent to those
received by other members of Company's senior management and continues to be
reimbursed for the full cost of his medical, health, and dental plan. Any
compensation received by Executive pursuant to any benefit programs shall be in
addition to the compensation described elsewhere in this Agreement.
6.2 INSURANCE BENEFITS. Company shall provide for Executive and
his dependents life and disability insurance coverage in keeping with the
insurance benefits provided to other members of Company's senior management and
on the same expense sharing basis as other members of Company's senior
management; but Company shall not provide any medical and health insurance,
other than reimbursement of Executive for the full cost of his medical, health,
and dental insurance as set forth in Section 6.1.
6.3 VACATION. Executive shall be entitled to vacations in
accordance with Company policy, during which time his compensation shall be
paid in full; provided, however, Executive shall receive no less than two (2)
days of vacation for each month of the Initial Term and each Renewal Term for
which Executive is employed hereunder. If Executive is unable to take any or
all of his vacation during the time it accrues due to business reasons,
Executive may take his unused paid vacation at a later time, or, at his option,
receive supplemental pay in lieu of vacation.
6.4 OTHER FRINGE BENEFITS. Executive shall also be entitled to
any other fringe benefits, including regular holiday and personal days, that
are normally available to other members of Company's senior management.
7. TERMINATION.
7.1 COMPENSATION AND BENEFITS UPON TERMINATION. This Agreement may
be terminated prior to the expiration of the Initial Term or any Renewal Term
by any of the following events:
(a) Mutual written agreement expressed in a single document signed
by both Company and Executive;
(b) Voluntary written resignation (other than a resignation which
is deemed to be a termination without cause pursuant to Section 3.1, 3.2 or
10.2 or which is permitted pursuant to Section 7.1(f) by Executive as President
and Chief Executive Officer of Company); provided, however, that Executive
shall be permitted to resign solely as a member of the Board of Directors of
Company at any time, and such resignation shall not be deemed a termination
hereunder;
(c) Death of Executive or such disability of Executive that
prevents him from carrying out the essential functions of his job with or
without reasonable accommodation;
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(d) Written notice of termination without cause as defined in
Section 7.2;
(e) Written notice of termination with cause as defined in
Section 7.3;
(f) By Executive, in his sole election upon the occurrence of
any of the following events:
(1) Company filing bankruptcy (whether voluntary or
involuntary);
(2) Company "going private", i.e., acquiring all of its Common
Stock and ceasing to trade its Common Stock on the New York Stock Exchange, or
otherwise ceasing to trade its Common Stock on the public market;
(3) Merger or consolidation where Company is not the
consolidated or surviving company;
(4) Discontinuation of business by Company;
(5) The occurrence of any event described in Section 3.1,
3.2, or 10.2 permitting Executive to resign.
Upon termination for any of the foregoing reasons, Executive shall
continue to render his services and shall be paid his regular compensation
and benefits up to the date of termination.
Upon termination of this Agreement under any of Sections 7.1(a), (c),
(d), or (f) hereof, such termination shall be deemed to be by Company without
cause and Company shall pay to Executive or his estate (as the case may be)
(i) any and all accrued compensation under this Agreement; (ii) insurance
benefits and reimbursement as set forth in Section 6 hereof; and (iii) any and
all Base Salary which would be due if Executive's employment continued
through the remaining period of the Initial Term and any Renewal Term with
regard to which notice of non-renewal has not been, and cannot be, timely given
(which Base Salary shall be due on the last date that Executive actually reports
to Company's premises for full time duties). In addition, Executive or his
estate (as the case may be) shall retain all rights with regard to Stock
Appreciation Rights described in Section 4.3 and shall continue to be
eligible to elect to receive the Transaction Fee or the Debt Reduction Fee in
accordance with the terms of Section 4.4, unless such election has been made,
in which event Executive (or his estate, as the case may be) shall retain the
rights Executive has as a result of his election. In the event of
Executive's death, all Stock Appreciation Rights vested in Executive, all of
Executive's rights with regard to the Transaction Fee or the Debt Restructure
Fee, and all rights relating to the election (if unexercised) concerning
same shall be retained and exercisable by his personal representative. If
this Agreement is terminated under Sections 7.1(b) or 7.1(e), Company will have
no obligation to pay amounts specified in the preceding clauses (i) through
(iii) above, and all unexercised and non-vested Stock Appreciation Rights
will terminate (or if Executive has elected
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to be eligible for the Transaction Fee or the Debt Reduction Fee,
the rights of Executive to such fee shall terminate).
7.2 TERMINATION WITHOUT CAUSE. Company may terminate without cause
by giving Executive written notice thereof. The noninsurability of Executive,
either present or future, does not constitute grounds for termination under
this or any other Section of this Agreement. If Executive is terminated under
this Section 7.2, Executive shall be entitled to compensation and benefits as
set forth in Section 7.1 above.
7.3 TERMINATION WITH CAUSE.
(a) Company may terminate this Agreement at any time with cause
upon written notice to Executive specifying the cause and the effective date of
termination. For purposes of this Agreement, "cause" shall mean only the
following: (i) willful breach of fiduciary duty or willful dishonesty, in
either case involving material personal profit and involving acts directed
towards Company, and which acts have had a material adverse effect on the
operation of Company; (ii) engaging in unethical or illegal conduct which is
substantially damaging to the reputation and/or business interests of the
Company; (iii) failure to carry out the lawful directives of the Board of
Directors provided that such directives are not in conflict with or inconsistent
with the terms of this Agreement; or (iv) criminal conduct of Executive against
Company which results in a felony conviction of Executive with respect to which
all opportunities for appeal have expired. Company agrees that in the event that
it shall allege that Executive engaged in a willful breach of fiduciary duty or
willful dishonesty of the type for which Company believes that it has cause for
Executive's termination, Company shall give notice to the Executive. If the
Executive, following receipt of such notice, shall demonstrate in good
faith to the reasonable satisfaction of the Board of Directors that any such
alleged action was unintentional, the Executive shall have the right to cure
such action by full reimbursement to the Company of any sums wrongfully
received; provided that such cure shall be permitted only if, with respect to
any single act or occurrence, the amount wrongfully received by Executive with
respect to such single act or occurrence was less than $5,000. The agreement by
Executive to return such sums shall constitute a cure, and Company shall not be
entitled to terminate the Executive with cause under this Section 7.3 for such
act or occurrence. Termination with cause shall be determined in good faith by
Company's Board of Directors after written notice to Executive and an
opportunity for Executive to be heard by Company's Board of Directors.
(b) If Executive is terminated under this Section 7.3, Executive
shall receive compensation and benefits as set forth in Section 7.1. If
Executive is given notice of termination under this Section 7.3, and it is later
determined that no "cause" existed, Executive shall be entitled to all
compensation and benefits which he would have received had the termination been
"Without Cause", plus reasonable attorneys' fees and costs incurred by Executive
in contesting the notice of termination, plus interest at the rate specified in
Section 11.8 hereof on the unpaid amounts from the date the same would have been
received until the date of payment.
7.4 RETURN OF COMPANY PROPERTY. Executive agrees to return all
property of Company, including, but not limited to, details of equipment,
prices, specifications, programs,
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customers, and prospective customer lists and any other proprietary data or
objects acquired through the Executive's employment with Company, within seven
(7) days after termination of employment, regardless of the reason therefor.
7.5 SERVICES AFTER TERMINATION. Executive agrees to cooperate and
assist Company after his termination in prosecuting and defending any lawsuits.
Company agrees to compensate Executive at the rate of $300 per hour for all
services provided pursuant to this Section 7.5,. including, but not limited to,
conferences with Company or its experts, agents, or attorneys; depositions;
trial (including preparation); and all other conferences, meetings, or
preparation time; provided that such compensation shall not be paid in any
action filed by or against the Company by or against the Executive.
8. NOTICE OF TERMINATION.
8.1 Any termination by Executive or Company shall be communicated by
Notice of Termination to the other party hereto given in accordance with Section
11.7. For purposes of this Agreement, a "Notice of Termination" means a written
notice which:
(a) Indicates the specific termination provision in this Agreement
relied upon;
(b) To the extent applicable, sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated; and
(c) If the effective date of termination is other than the date of
receipt of such notice, specifies the effective date of termination (which date
shall be not more than fifteen (15) days after the giving of such notice).
The failure by Executive or Company to set forth in the Notice of
Termination any fact or circumstances which contribute to the termination shall
not waive any right of Executive or Company hereunder or preclude Executive or
Company from asserting such fact or circumstance in enforcing Executive's or
Company's rights hereunder.
9. FULL SETTLEMENT; RESOLUTION OF DISPUTES.
9.1 Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense, or other claim,
right, or action which Company may have against Executive or others. In no event
shall Executive be obligated to seek other employment or take any other action
by way of mitigation of the amounts payable to Executive under any of the
provisions of this Agreement and such amounts shall not be reduced whether or
not Executive obtains other employment. If, and to the extent that, Executive is
the prevailing party therein, Company agrees to pay promptly as incurred, to the
full extent permitted by law, all legal fees and expenses which Executive may
reasonably incur as a result of any contest by Company, Executive, or others as
to the validity or enforceability of, or liability under, any
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provisions of this Agreement or any guarantee of performance thereof (including
as a result of any contest by Executive about the amount of any payment pursuant
to this Agreement), plus in each case interest on any delayed payment, at the
rate specified in Section 11.8 hereof.
9.2 If there shall be any dispute between Company and Executive
concerning any termination of Executive's employment, then, unless and until
there is a final, non-appealable judgment by a court of competent jurisdiction
declaring either that such termination was pursuant to Section 7.1(b) or 7.1(e),
Company shall pay all amounts, and provide all benefits, to Executive and/or
Executive's family or other beneficiaries, as the case may be, that Company
would be required to pay or provide pursuant to this Agreement as though such
termination were by Company Without Cause; provided, however, that Company shall
not be required to pay any disputed amounts pursuant to this Section 9.2 except
upon receipt of an undertaking, satisfactory to the Board of Directors, by or on
behalf of Executive to repay all such amounts to which Executive is ultimately
adjudged by such court not to be entitled.
10. INDEMNIFICATION AND LIABILITY INSURANCE.
10.1 Company shall indemnify Executive to the fullest extent
permitted by Company's Articles of Incorporation, Bylaws, and applicable federal
or state laws for all amounts (including, without limitation, judgments, fines,
settlement payments, expenses, and reasonable attorneys' fees) incurred or paid
by Executive in connection with any action, suit, investigation, or proceeding
arising out of or relating to the performance by Executive of Services for, or
the action by Executive as a director, officer, or Executive of Company, any
subsidiary of Company, or any other person or enterprise at Company's request.
Expenses, including (but not limited to) reasonable attorneys' fees and
disbursements, incurred in defending any action, suit, investigation, or
proceeding, for which Executive may be entitled to indemnification under this
Section 10.1 upon final disposition of such action, shall be paid by Company
monthly and in advance of the final disposition, to the maximum extent permitted
by applicable laws and regulations; provided, however, that prior to making any
such payments Company shall receive an undertaking by or on behalf of Executive
to repay such amounts if it shall ultimately be determined that he is not
entitled to indemnification. The parties acknowledge and agree that when used in
this Agreement, "reasonable attorneys' fees" shall be deemed to mean the normal
billing rates of counsel of Executive's choice. The parties further agree that
Company's obligations hereunder shall survive the termination of Executive's
employment and termination of his service as a Director of Company.
10.2 Company will maintain in effect its Officers' and Directors'
liability policy at its present limits or greater for the term of Executive's
employment plus whatever extensions are necessary to provide full coverage of
Executive. If the Company fails to maintain such coverage, then Executive at his
election may resign, and such resignation shall be deemed to be a termination
without cause by Company pursuant to Section 7.2 hereof.
12
11. MISCELLANEOUS.
11.1 GOVERNING LAW. This Agreement is made in the State of
North Carolina and shall be construed and enforced in accordance with the
laws of that state, except to the extent that federal law applies. The parties
agree that any action brought hereunder shall be brought in the appropriate
court having jurisdiction in Durham County, North Carolina or any federal court
in North Carolina having jurisdiction.
11.2 TIME. Time is of the essence of this Agreement.
11.3 BOARD APPROVAL. Company represents and warrants that the
execution and delivery of this Agreement have been approved by all requisite
Board of Directors or Committee Action; provided that the Board has required
that, as promptly as possible and in any event on or before December 20, 1996,
the Company request an opinion, at the expense of the Company, from a qualified
human resources firm selected by Executive, that the compensation provided for
hereunder is fair and reasonable in light of the circumstances. Company and
Executive shall use their best efforts to obtain such opinion as promptly as
possible and in any event on or before January 7, 1997. This Agreement shall
remain in effect unless and until the human resources firm provides an opinion
that any material part of this Agreement is not fair and reasonable and for five
(5) business days thereafter. In the event such an unfavorable opinion is
received, then Executive and Company agree to reconsider aspects of this
Agreement that the human resources firm has found not to be fair and reasonable
and to negotiate in good faith to formulate an alternative mutually acceptable
to the Company and Executive.
11.4 SEVERABILITY. In the event that this Agreement, or any
paragraph or provisions thereof, is declared invalid, void, or unenforceable by
a court of competent jurisdiction, the remaining provisions shall nevertheless
continue in full force and effect without being impaired or invalidated in any
way or to any extent.
11.5 ATTORNEYS' FEES AND COSTS. Company shall pay Executive's
reasonable attorney's fees and costs incurred in connection with negotiating his
employment with Company, including such fees and costs incurred in connection
with preparing and negotiating the terms of this Agreement. In the event of any
dispute or action hereunder between Company and Executive as to this Agreement
and the terms hereof, the reasonable attorneys' fees and expenses (up to a total
of $125,000) of the Executive shall be paid by the Company, but only if
Executive is the prevailing party. Executive shall not under any circumstances
be responsible for payment of any attorneys' fees or costs of the Company.
11.6 WAIVER OF BREACH. Failure or delay of either party to insist
upon compliance with any provisions hereof shall not operate as, and is not to
be construed as, a waiver or amendment of such provision or the right of the
aggrieved party to insist upon compliance with such provisions or to take
remedial steps to recover damages or other relief for noncompliance. Any express
waiver of any provision of this Agreement shall not operate and is not to be
construed as a waiver of any subsequent breach, whether occurring under similar
or dissimilar circumstances.
13
11.7 NOTICES. All notices, consents, requests, demands, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given or delivered if (i) delivered personally; (ii) mailed by certified
mail, return receipt requested, with proper postage prepaid; or (iii) delivered
by facsimile; or (iv) delivered by recognized courier contracting for same day
or next day delivery:
(a) To Company:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
General Counsel
Coastal Physician Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇; fax (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇; fax (▇▇▇) ▇▇▇-▇▇▇▇
(b) To Executive:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇; fax (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Lamberth, Bonapfel, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.
Ste. 550 East, Atlanta Financial Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇; fax (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as the parties hereto shall have last designated by notice
to the other parties. Any item delivered personally or by recognized courier
contracting for same day or next day delivery shall be deemed delivered on the
date of delivery. Facsimile deliveries shall be deemed delivered on the date of
transmission by the sender provided sender has evidence of successful
14
transmission. Any item mailed shall be deemed to have been delivered on the
earlier of the date evidenced on the return receipt or three business days after
mailing of the item.
11.8 INTEREST. Any obligation of either party which is not paid when
due shall bear interest. Whenever interest is due hereunder, the rate of
interest shall be the applicable federal rate established pursuant to Section
7872 of the Internal Revenue Code of 1986, as amended.
IN WITNESS WHEREOF, Company has caused this Agreement to be executed and
delivered by its duly authorized officers under seal and its corporate seal to
be affixed hereto, and Executive has executed and delivered this Agreement and
has hereunto affixed his hand and seal, each on the date(s) set forth beside
their respective signatures below, with this Agreement to be effective as of the
Employment Date.
COMPANY:
COASTAL PHYSICIAN GROUP, INC.
(CORPORATE SEAL)
Date:12/5/96 By /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SOKOLOV (SEAL)
-------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman
Attest:
/S/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Secretary
EXECUTIVE:
Date:12/9/96 /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (SEAL)
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇