Exhibit 10.32
Second Amended Employment Agreement
dated August 19, 1999 between
Doctor's Care, P.A.
and M.F. McFarland, III, M.D.
STATE OF SOUTH CAROLINA ) SECOND AMENDED
) EMPLOYMENT AGREEMENT
COUNTY OF RICHLAND ) BETWEEN DOCTOR'S CARE, P.A.
AND M.F. MCFARLAND, III, M.D.
Doctor's Care, P.A., a South Carolina professional corporation
("Doctor's Care" or "Employer"), has entered into an Employment Agreement dated
October 1, 1995 ("Agreement") with M.F. McFarland, III, M.D. ("McFarland"),
whereby McFarland is employed to serve as President of Employer for a term
commencing October 1, 1995, and ending October 1, 2000. Employer and McFarland
amended the Agreement on August 10, 1998 to extend the term, increase the
compensation, and modify the termination procedures thereof. Employer and
McFarland now desire to amend the Agreement further to make additional
amendments to the term, compensation, and termination procedures thereof and to
restate the Agreement, as amended, in its entirety. Accordingly, the parties
have entered into this Second Amended Employment Agreement Between Doctor's
Care, P.A. and M. F. McFarland, III, M.D., to be effective as of this 19th day
of August, 1999.
1. Employment. Employer hereby agrees to employ McFarland to perform
the duties described in Section 3 below subject to and in accordance with the
terms and conditions hereof, and McFarland hereby accepts such employment.
2. Term. The employment shall commence on the date hereof, and shall
continue through August 19, 2004, unless earlier terminated in accordance with
the provisions of Section 8 of this Agreement.
3. Duties of McFarland.
A. In accepting employment by Employer, McFarland shall
undertake and assume the responsibility of performing for and on behalf of
Employer the duties of the President of Employer in Columbia, South Carolina.
Except with his written consent, McFarland shall not be permanently assigned to
(i) any position of lower professional status, or (ii) a location outside of
Richland or Lexington Counties, South Carolina.
B. Other than McFarland's duties as an employee of UCI Medical
Affiliates of South Carolina, Inc., during the term of this Agreement McFarland
shall be a full-time employee of Employer, and shall devote his full working
time and efforts to his duties hereunder. McFarland shall perform all of his
duties hereunder to the best of his ability and shall not, directly or
indirectly, engage or participate in any activities in conflict with the best
interests of Employer, and will conduct all activities in strict loyalty to
Employer. Without limiting the generality of the foregoing, McFarland shall not
engage in any activity for compensation or pecuniary gain other than his
employment hereunder, his employment with UCI Medical Affiliates of South
Carolina, Inc., and passive investing for the account of himself or members of
his household.
4. Compensation. As compensation for the services to be rendered by
McFarland for Employer under this Agreement, McFarland shall be compensated by
Employer on the following basis:
A. Base Salary. Commencing on October 1, 1998, McFarland shall
receive from Employer an annual salary of One Hundred Sixty-Seven Thousand Five
Hundred Dollars and no/100 ($167,500.00), payable in pay periods as determined
by Employer, but in no event less frequently than monthly. Commencing on October
1, 1999, and on the anniversary date thereof every year until termination of
this Agreement, McFarland's annual salary shall be increased by three percent
(3%) per year to compensate for increases in the cost of living. The three
percent (3%) annual increase shall be calculated based upon McFarland's annual
salary on the anniversary date.
B. Vacation. During the term of this Agreement, McFarland
shall be entitled to a total of thirty (30) business days of paid leave to
attend conventions and professional meetings and vacation time each calendar
year. Such vacation and leave days are to be taken at such time or times as
McFarland may reasonably request, subject to the Employer's convenience and
prior approval, which approval shall not be unreasonably withheld. Vacation and
leave time may cumulate year to year up to a maximum of 60 days.
C. Other Benefits. During the term of this Agreement,
McFarland shall receive from Employer such other benefits (e.g., health
insurance coverage, life insurance coverage, participation in pension plans, and
participation in stock option plans, etc. ) reasonably comparable to, and no
worse than, those benefits, if any, generally provided to other senior
executives of Employer.
The compensation stated above is intended to be the total compensation
paid to McFarland.
5. Confidentiality and Secrecy. McFarland acknowledges that in and as a
result of his employment hereunder, he will be making use of, acquiring, and/or
adding to confidential information of a special and unique nature and value
relating to Employer's business, including without limitation technological
know-how, copyrights, proprietary information, trade secrets, systems,
procedures, manuals, confidential reports, records, operational expertise, lists
of customers and projects, the nature and type of services rendered by Employer,
the equipment and methods used and preferred by Employer's customers, and the
fees paid by them (all of which are deemed for all purposes confidential and
proprietary). As a material inducement to Employer to enter into this Agreement
and to pay to McFarland the compensation stated in Section 4 herein, McFarland
covenants and agrees that during the term of his employment hereunder, and for
five (5) years after the termination thereof, he shall not, directly or
indirectly, make use of, or disclose to any person, any confidential information
of Employer or its affiliates.
6. Covenants Against Competition. In view of the unique value to
Employer of the services of McFarland for which Employer has contracted
hereunder, because of the confidential information to be obtained by or
disclosed to McFarland, as hereinabove set forth, and because McFarland's
employment hereunder will result in McFarland's development of a unique
relationship with customers, suppliers and employees, as a material inducement
to Employer to enter into this Agreement and to pay to McFarland the
compensation stated in Section 4 hereof, McFarland covenants and agrees as
follows:
A. During McFarland's employment hereunder, and for a period
of two (2) years after the termination of McFarland's employment hereunder for
any reason, McFarland shall not directly or indirectly solicit or divert
employment of any employee of Employer's business or employ any person
previously employed by Employer or its affiliates.
B. During McFarland's employment hereunder, and for a period
of two (2) years after the termination of McFarland's employment hereunder for
any reason, McFarland shall not directly or indirectly solicit, divert, or
convert, or assist another person or entity to solicit, divert or convert, the
customers of Employer or its affiliates to any other company or entity.
C. During McFarland's employment hereunder, and for a period of one (1)
year after the termination of McFarland's employment with Employer for any
reason, McFarland shall not within the geographic area specified below engage in
any business or perform any services, directly or indirectly, in competition
with the business of Employer or its affiliates or have any interest, whether as
a proprietor, partner, employee, stockholder (directly or beneficially),
principal, agent, consultant, director, officer, or in any other capacity or
manner whatsoever, in any enterprise that shall so engage; except that McFarland
shall be permitted to own for investment purposes only, directly or
beneficially, up to (but not more than) 2% in the aggregate of the stock of a
competing corporation which is publicly-traded on a national stock exchange or
the NASDAQ National Market System, so long as McFarland is not a controlling
person of or a member of a group that controls, such corporation and McFarland
is not otherwise affiliated in any capacity with such corporation. The
restrictions of this Section 6(C) shall apply everywhere within a five (5) mile
radius of (i) any primary or urgent care facility owned or operated by Employer
or an affiliate, and (ii) each other location where Employer or any affiliate
maintains an office, in existence as of the date of such termination.
7. Reasonableness, Enforceability and Remedies.
A. McFarland has carefully read and considered the provisions
of Section 5,6, and 7, and , having done so, agrees that the restrictions set
forth in these Sections, including, but not limited to, the time period of
restriction and geographic limitations set forth in Section 6, are fair and
reasonable and are reasonably required for the protection of the interest of
Employer and its officers, directors, shareholders, employees, and affiliates.
B. In the event that, notwithstanding the foregoing, any of
the provisions of Sections 5, 6, or 7 hereof or any parts thereof shall be held
to be invalid or unenforceable, the remaining provisions or parts thereof shall
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable portions or parts had not been included therein. In the event that
any provision of Sections 5 or 6 hereof relating to the time period and/or
geographic restrictions and/or related aspects shall be declared by a court of
competent jurisdiction to exceed the maximum restrictiveness such court deems
reasonable and enforceable, the time period and/or geographic restrictions
and/or related aspects deemed reasonable and enforceable by the court shall
become and thereafter be the maximum restriction in such regard, and the
restriction shall remain enforceable to the fullest extent deemed reasonable by
such court.
C. McFarland acknowledges that the services he is to render
are of a special and unusual character with a unique value to Employer and its
affiliates, the loss of which cannot adequately be compensated by damages in an
action at law. In the event of a breach or threatened breach by McFarland of any
of the provisions of Sections 5 or 6 hereof, Employer or its affiliates, in
addition to and not in limitation of, any other rights, remedies, or damages
available to Employer or its affiliates under this Agreement, shall be entitled
to a permanent injunction in order to prevent or restrain any such breach by
McFarland or by McFarland's partners, agents, representatives, servants,
employers, employees, consulting clients, and/or any and all persons directly or
indirectly acting for or with him.
D. McFarland covenants and agrees that if he shall violate any
of his covenants or agreements under Section 5 or 6 hereof, Employer or its
affiliates shall be entitled to: (i) an accounting and repayment of all profits,
compensation, commissions, remuneration, or other benefits that McFarland
directly or indirectly has realized and/or may realize as a result of, growing
out of, or in connection with, any such violation; (ii) recover actual damages
incurred by Employer or its affiliates as a result of any such violation; (iii)
any injunctive relief to which Employer or its affiliates is or may be entitled
at law, in equity, or under this Agreement; and (iv) exercise its other rights
respecting a breach of this Agreement as set forth herein.
E. McFarland's obligations under Sections 5 and 6 hereof shall survive any
- ------------------- termination of employment hereunder.
8. Termination.
A. For Cause By Employer. Notwithstanding any other provision
hereof, Employer may terminate McFarland's employment under this Agreement
immediately at any time for "cause". For purposes hereof the term "cause"
shall be limited to the commission of any of the following by McFarland:
dishonesty; theft; unethical business conduct; indictment for a felony;
willful failure to perform material duties on behalf of Employer; violation of
the terms and provisions of this Agreement; willful or recurring
insubordination; failure to attempt, in good faith, to comply with reasonable
instructions of Employer; McFarland's license to practice medicine in the
State of South Carolina is revoked or otherwise terminated; or McFarland fails
to follow accepted medical practices or is guilty of misconduct under the
principles of medical ethics of the American Medical Association. If the
termination is for "cause," all compensation (including without limitation the
Base Salary, and all perquisites and fringe benefits) to which McFarland would
otherwise be entitled shall be discontinued and forfeited as of the effective
date of such termination.
B. Termination By McFarland. McFarland may with or without
cause terminate this Agreement upon sixty(60) days prior written notice to
Employer. In the event of such termination, all compensation (including without
limitation the Base Salary and any perquisites and fringe benefits, if any) to
which McFarland would otherwise be entitled (for periods after the effective
date of the termination) shall be discontinued and forfeited as of the effective
date of such termination.
C. Disability. In the event of the McFarland's disability
during employment under this Agreement, then employment under this Agreement
shall terminate. For purposes of this Agreement, except as provided herein
below, "disability" shall mean the inability of McFarland, due to sickness or
other incapacity, to perform his duties under this Agreement for a period in
excess of one hundred eighty (180) substantially consecutive days. Such
termination shall become effective at Employer's election upon the expiration of
such one hundred eighty (180) day period of disability. Upon termination of
employment under this Agreement due to McFarland's disability, McFarland shall
be entitled to payment of his Base Salary up to the date of termination.
D. Death. In the event McFarland dies during the term of this
Agreement, this Agreement shall terminate and Employer shall pay to McFarland's
estate all Base Salary accrued but unpaid through the date of McFarland's death.
E. Without Cause By Employer. Employer may terminate this
Agreement "without cause" at any time upon 30 days' written notice to McFarland.
In the event that McFarland is terminated without cause from his position as
President of Employer or as President and Chief Executive Officer of UCI,
Employer and UCI shall pay McFarland a lump sum payment of Nine Hundred Thousand
Dollars and no/100 ($900,000.00). All other compensation (including without
limitation any perquisites and fringe benefits, if any) to which McFarland would
otherwise be entitled (for periods after the effective date of such termination)
shall be discontinued and forfeited as of the effective date of such
termination. In no event shall the total amount payable by Employer and UCI,
jointly or severally, under this Paragraph 8(E) and/or under Paragraph 8(B) of
the Amended Employment Agreement between McFarland and UCI exceed the sum of
Nine Hundred Thousand Dollars and no/100 ($900,000.00).
F. Personal Guarantee Assumption in the Event of Termination.
In the event of McFarland's termination by Employer under any circumstances,
Employer shall assume any and all liabilities that McFarland has personally
guaranteed for the benefit of the Employer. Said guarantee assumption shall take
place within thirty (30) days of McFarland's termination. If Employer fails to
assume any and all liabilities personally guaranteed by McFarland for the
benefit of the Employer within thirty (30) days of termination, Employer shall
pay McFarland One Thousand Dollars and no/100 ($1,000.00) per day starting on
the 30th day after termination, and each day thereafter until Employer assumes
such liabilities. The outstanding liabilities personally guaranteed by McFarland
for the benefit of the Employer as of the date hereof are listed on Schedule A
to this Agreement. McFarland shall seek approval from Employer's Board of
Directors before making any future guarantees for the benefit of the Employer in
excess of Twenty-Five Thousand Dollars and no/100 ($25,000.00). In addition,
McFarland shall provide Employer's Board of Directors prompt written notice of
any future guarantees involving Twenty-Five Thousand Dollars and no/100
($25,000.00) or less.
9. Burden and Benefit. This Agreement shall be binding upon, and shall
inure to the benefit of Employer, McFarland, Employer's affiliates, and their
respective heirs, personal and legal representatives, successors, and assigns.
10. Patients and Records. Employer and McFarland agree that all patient
lists, records, and charts are the property of the Employer, and that upon
termination of this Agreement, McFarland shall not be entitled to receive any
patient lists, records, or charts.
11. Assignment. This Agreement and any rights hereunder are personal to
McFarland and shall not be assigned or otherwise transferred by McFarland.
12. Governing Law/Jurisdiction. The construction and interpretation of
this Agreement shall at all times and in all respects be governed by the laws of
the State of South Carolina. McFarland and Employer hereby (i) agree that any
litigation, action or proceeding arising out of or relating to this Agreement
may be instituted in a state or federal court in Columbia, South Carolina, (ii)
waive any objection which they might have now or hereafter to any such
litigation, action or proceeding based upon improper venue or inconvenient
forum, and (iii) irrevocably submit to the jurisdiction of such courts in any
such litigation, action or proceeding. For all purposes of this Agreement,
McFarland and Employer hereby further agree that service of process upon
McFarland and Employer may be effected pursuant to United States mail.
13. Usage. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Term such as "hereof", "hereunder",
"herein", and words of similar import shall refer to this Agreement in its
entirety and all references shall refer to specified portions of this Agreement,
unless the context clearly requires otherwise.
14. Severability. The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any one or more of the
provisions of this Agreement shall not affect validity and enforceability of the
other provision.
15. Notice. Any notice, request, approval, consent, demand or other
communication hereunder shall be effective if in writing and upon the first to
occur of the following: (i) upon receipt by the party to whom such notice,
request, approval, consent, demand or other communications being given; or (ii)
three (3) business days after being duly deposited in the U.S. Mail, certified,
return receipt requested, and addressed as follows:
McFarland: M. F. McFarland, III, M. D.
Doctor's Care, P.A.
1901 Main St., Ste. 1200 (MC1105)
Columbia, S.C. 29201
With a copy to: David E. Dubberly, Esq.
Duff, Dubberly, Turner, White & Boykin, L.L.C.
P.O. Box 1486
Columbia, SC 29202
Employer: Doctor's Care, P.A.
1901 Main St., Ste. 1200 (MC1105)
Columbia, S.C. 29201
Attn: M.F. McFarland, III, M. D.
The parties hereto may change their respective addresses by notice in writing
given to the other parties this Agreement.
16. Entire Agreement. This Agreement contains the entire agreement and
understanding by and between Employer and McFarland with respect to the
employment of McFarland, and no representations, promises, agreements, or
understandings, written or oral (including that Amendment to this Agreement
dated August 10 (17), 1998) not contained herein shall be of any force or
effect. No change or modification of this Agreement shall be valid or binding
unless it is in writing and signed by the party intended to be bound. No waiver
of any provision of this Agreement shall be valid unless it is in writing and
signed by the party against whom the waiver is sought to be enforced. No valid
waiver of any provision of this Agreement at any time shall be deemed a waiver
of any other provision of this Agreement at such time or at any other time.
IN WITNESS WHEREOF, Employer and McFarland have duly executed this
Agreement under seal to be effective as of the day and year first above written.
IN THE PRESENCE OF: EMPLOYER:
/s/ Hannah H. James DOCTOR'S CARE, P.A. (SEAL)
Witness
/s/ Brenda G. Sanders By: /s/ M.F. McFarland, III, M.D.
Witness Its: President
MCFARLAND:
/s/ Hannah H. James /s/ M.F. McFarland, III, M.D. (SEAL)
Witness M.F. McFarland, III, M.D.
/s/ Brenda G. Sanders
Witness
SCHEDULE A
Outstanding Liabilities Personally Guaranteed By McFarland
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Lender Remaining Term Balance at 5/31/99
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Carolina First 54 months $ 450,000
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AT&T Leasing 9 months 10,000
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