EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of
August 3, 2000, by and between American Disease Management Associates, L.L.C., a
Delaware limited liability company (the "Employer"), an indirect wholly owned
subsidiary of MIM Corporation ("Parent") and ▇▇▇▇▇ ▇▇▇▇▇ (the "Employee").
WHEREAS Employer and the Employee, among others, have entered into a
Purchase Agreement, dated as of August 3, 2000 (the "Purchase Agreement")
pursuant to which MIM Health Plans, Inc., will purchase all of the Employee's
membership interests in the Employer for the purchase price set forth therein.
WHEREAS, it is a condition to consummation of the Purchase Agreement
that the parties enter into this Agreement.
WHEREAS, the Employer desires to employ the Employee, and Employee
desires to be employed by the Employer, in accordance with the terms and
conditions set forth herein.
NOW, THEREFORE, the parties hereto mutually agree as follows:
SECTION 1. Employment. The Employer hereby employs Employee for the
Employment Period specified in Section 2 below as President of the Employer, or
in such other capacity as the Employer and the Employee may agree from time to
time. The Employee hereby accepts such employment upon the terms and conditions
set forth herein and agrees to devote his time and efforts to the performance of
his duties hereunder.
SECTION 2. Employment Period. The period of the Employee's employment
under this Agreement (the "Employment Period") shall commence on the date hereof
and shall end upon the earlier of (i) the 3rd anniversary of the Closing Date
(as defined in the Purchase Agreement) or (ii) termination of this Agreement as
contemplated by Section 7 below.
SECTION 3. Duties. Employee shall have those duties and
responsibilities which are assigned to him by the Employer during the Employment
Period. Employee agrees to perform faithfully the duties assigned to him to the
best of his ability.
SECTION 4. Compensation. (a) As compensation for all services rendered
and to be rendered pursuant to this Agreement, the Employer agrees to pay the
Employee (i) from the date hereof through December 31, 2000 an annual salary of
$122,796 (the "2000 Base Salary") and (ii) from and after January 1, 2001, an
annual salary of $225,000 (the "Ongoing Base Salary" and together with the 2000
Base Salary, the "Base Salary"). The Base Salary shall accrue and be payable in
accordance with the payroll practices of the Employer as in effect from time to
time, but not less than bi-monthly. The Employer shall have the right to deduct
from any compensation paid to Employee hereunder all taxes and other amounts
which may be required to be deducted or withheld by law (including, but not
limited to, income tax withholding, social security payments and garnishments),
whether such laws are now in effect or become effective after the date of this
Agreement.
(b) During the Employment Period, the Employee shall be entitled to
participate in the Parent's 1996 Amended and Restated Stock Incentive Plan (the
"Plan") and the 1999 Total Compensation Program for Key Employees (collectively,
the "Bonus Program"), at the participation levels set forth in Section 4(c) and
4(d) below, and at such additional participation levels as may be determined
from time to time by the Chief Executive Officer of Parent or Parent's Board of
Directors or any committee thereof.
(c) Upon execution and delivery of this Agreement and a Stock Option
Agreement between the Employee and the Parent (the "Stock Option Agreement"),
the Employee shall be granted and shall receive non-qualified stock options
("Options") to purchase 50,000 shares of common stock, par value $0.0001 per
share, of Parent ("Common Stock"), at a price per share equal to $1.9375, which
is the closing sales price per share of the Common Stock on the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") on
the third business day prior to the date hereof. Subject to Section 7 hereof and
the applicable stock option award agreement (i) 16,667 of such Options shall
vest and become exercisable on each of the first and second anniversaries of the
date hereof, and (ii) the remaining 16,666 Options shall vest and become
exercisable, on the third anniversary of the date hereof. The Options shall be
subject to the terms of the Stock Option Agreement and the Plan.
(d) Upon execution and delivery of this Agreement and a Performance
Shares Agreement between the Employee and Parent (the "Performance Share
Agreement"), the Employee shall be granted and shall receive 25,000 shares of
Common Stock (the "Performance Shares") which shall be subject to certain
limitations and restrictions as set forth in the Performance Shares Agreement
and the Plan.
(e) The Company shall pay Employee $750 per month as an automobile
allowance.
SECTION 5. Expenses. The Employer shall promptly or within 30 days of
receipt of a reimbursement report from the Employee reimburse the Employee for
all reasonable expenses incurred by the Employee on behalf of the Employer or in
connection with the Employee's performance of his duties hereunder; provided,
that the Employee submits proof of such expenses, with the properly completed
forms and supporting receipts and other documentation as prescribed by the
Company, in accordance with the policies applicable to employees of the
Employer.
SECTION 6. Employment Benefits. During the Employment Period, Employee
shall be entitled to such other benefits as are customarily accorded to the
employees of the Parent, including, but not limited to, the right to participate
in employee benefit programs maintained by the Parent such as group health,
life, and disability insurance pursuant to the terms of those plans (the "New
Benefits") or, at Employee's election (to the extent available), such benefits
as Employee was entitled to receive from Employer immediately prior to the date
hereof (the "Existing Benefits"); provided such Employee pays Parent the amount
by which the cost of the Existing Benefits exceeds the cost of the New Benefits.
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SECTION 7. Termination.
(a) This Agreement may be terminated by written notice prior to the
expiration of the Employment Period by the Employer at any time. If such
termination is with Cause (as such term is hereinafter defined), all of the
Employee's rights to compensation and benefits under Sections 4 and 6 above
shall terminate upon such termination, except amounts accrued in respect of
periods prior to such termination. If such termination is by the Employer
without Cause, the Employer shall pay Employee as severance pay, the remaining
Base Salary which would otherwise have been paid to Employee from the date of
such termination to the third anniversary of the Closing Date, less deductions
and withholdings required by law. The term "Cause" shall mean (A) if Employee is
convicted of, pleads guilty to, or confesses to any felony or any act of fraud,
misappropriation, misrepresentation or embezzlement, (B) if Employee has engaged
in a dishonest act to the damage or prejudice of the Employer, or in conduct or
activities materially damaging to the property, business, or reputation of the
Employer or (C) if Employee fails to comply with the terms of this Agreement
(other than Section 8 hereof), and within ten (10) days after written notice
from the Company of such failure, Employee has not corrected such failure or,
having once received such notice of failure and having so corrected such
failure, Employee at any time thereafter again so fails or (D) if Employee
violates any of the provisions contained in Section 8 of this Agreement;
(b) If the Employee shall die during the Employment Period, this
Agreement shall terminate, and no further compensation shall be payable to
Employee or his estate hereunder, except unpaid accrued compensation.
(c) If the Employee is unable to discharge his duties hereunder for a
period of six consecutive months by reason of physical or mental illness,
injury, or incapacity, the Employer may, by written notice to the Employee,
terminate this Agreement and no further compensation shall be payable to
Employee hereunder.
(d) If the Employee (i) is terminated without Cause and is entitled to
severance pay pursuant to Section 7(a) of this Agreement and (ii) violates any
of the restrictive covenants set forth in Section 8 of this Agreement, the
Employer shall have no further obligations to make any severance payments to
such Employee pursuant to Section 7(a) of this Agreement; provided that
notwithstanding the foregoing, the Employee's obligations to comply with all of
the restrictive covenants set forth in Section 8 of this Agreement shall
continue in effect.
(e) Notwithstanding anything to the contrary, the consequences of
termination, death or disability, as they relate to the Options and the
Performance Shares shall be governed by the Plan, and the Stock Option Agreement
and the Performance Shares Agreement, respectively.
SECTION 8. Proprietary Information and Restrictive Covenants.
All of the provisions set forth in Section 6.04 of the Purchase
Agreement (including, without limitation, all covenants, agreements, rights and
obligations set forth therein) are incorporated by reference herein in their
entirety and shall be of full force and effect, as if stated herein in their
entirety.
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SECTION 9. Representations by Employee. Employee hereby represents and
warrants to the Employer that (i) the Employee's execution and delivery of this
Agreement and his performance of his duties and obligations hereunder will not
conflict with, or cause a default under, or give any party a right to damages
under, or to terminate, any other agreement to which Employee is a party or by
which he is bound, and (ii) there are no agreements or understandings that would
make unlawful Employee's execution or delivery of this Agreement or his
employment hereunder.
SECTION 10. Notices. All notices, requests, demands, and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given, made, and received only when personally
delivered, sent by electronically confirmed facsimile transmission, delivered by
Federal Express or other nationally recognized courier service, or two days
after having been deposited in the United States mail, certified mail, postage
prepaid, return receipt requested, addressed as set forth below:
in the case of the Employer at:
American Disease Management Associates, L.L.C.
c/o MIM Corporation
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▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
King & Spalding
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Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
Attention: E. ▇▇▇▇▇▇▇ ▇▇▇▇▇, II
and, in the case of the Employee, at:
▇▇▇▇▇ ▇▇▇▇▇
c/o American Disease Management Associates, L.L.C.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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Either party may designate a different address by giving notice of change of
address in the manner provided above.
SECTION 11. Waiver. No waiver or modification in whole or in part of this
Agreement, or any term or condition hereof, shall be effective against any party
unless in writing and duly signed by the party sought to be bound. Any waiver or
any breach of any provisions hereof or any right or power by any party on one
occasion shall not be construed as a waiver of, or a bar
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to, the exercise of such right or power on any other occasion or as a waiver of
any subsequent breach.
SECTION 12. Binding Effect, Successors. This Agreement shall be binding
upon and shall inure to the benefit of the Employer and its successors and
assigns, and shall inure to the benefit of and be binding upon the Employee and
his executors, administrators, heirs, and legal representatives. This Agreement
may not be transferred, sold or assigned; provided, however, that the Employer
may assign any of its rights and delegate any of its obligations hereunder, in
whole or in part, to an Affiliate (as defined in the Purchase Agreement) of
Employer without Employee's consent. Because the Employee's duties and services
hereunder are special, personal, and unique in nature, the Employee may not
transfer, sell or otherwise assign his rights, obligations, or benefits under
this Agreement; any purported assignment by the Employee in violation hereof
shall be null and void.
SECTION 13. Controlling Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed therein, exclusive of the conflict of laws
provisions thereof.
SECTION 14. Severability. It is the desire and intent of parties that
the terms and conditions of this agreement be enforced to the fullest extent
possible. If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect or impair
the validity or enforceability of the remaining provisions of this Agreement,
which shall remain in full force and effect and the parties hereto shall
continue to be bound thereby.
SECTION 15. Entire Agreement. This Agreement contains the entire
agreement between the parties relating to the subject matter hereof and shall
supersede all previous agreements between the parties, whether written or oral,
with respect to the subject matter hereof. This Agreement cannot be modified,
altered, or amended except by a writing signed by each of the parties hereto.
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IN WITNESS WHEREOF, the Employer and the Employee have executed this
Agreement as of the day and year first above written.
EMPLOYER:
American Disease Management Associates, L.L.C.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Secretary
EMPLOYEE:
/s/ ▇▇▇▇▇ ▇▇▇▇▇
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