PHYSICIAN EMPLOYMENT AGREEMENT
AGREEMENT made as of December 30, 1996 between W. Banks Hinshaw, Jr.,
M.D. residing at 5146 Southwest 9 Lane, Gainesville, Florida 32607 ("Physician")
and Women's Medical & Diagnostic Center, Inc., a Florida corporation, having its
principal place of business at Office Park West, 222 Southwest 36th Terrace,
Gainesville, Florida 32607 ("WMDC").
R E C I T A L S:
WMDC specializes in the provision of gynecological services, including
treatment of peri- and post menopausal women ("Medical Services").
Physician is duly licensed to practice medicine in the State of Florida
and specializes in the provision of Medical Services. Physician has of even date
pursuant to an Asset Purchase Agreement (the "Asset Purchase Agreement") sold
certain assets to WMDC related to Physician's medical practice.
In order to further facilitate the provision of Medical Services by
WMDC, WMDC desires to employ Physician and Physician desires to accept such
employment, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration set forth herein, the parties agree as follows:
1. ENGAGEMENT. WMDC hereby employs Physician and Physician hereby
accepts such employment to devote Physician's professional time, effort and
ability to the provision of Medical Services under the terms and conditions
contained herein and as the parties may agree from time to time.
2. DUTIES.
(a) Physician shall serve as a staff physician of WMDC and, as
such, provide patient care and clinical backup, in Physician's specialty, as
required to ensure the proper provision of services to patients of WMDC at
WMDC's office at the address set forth in Schedule A (the "Offices"), and/or
such other location as shall be mutually agreed to by WMDC and Physician.
Physician agrees to devote Physician's professional time, effort and ability to
the provision of Medical Services under the terms and conditions contained
herein and as the parties may agree from time to time. In connection therewith,
Physician's duties shall include, but not be limited to, the following:
(i) Provision of patient counseling and medical examinations;
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(ii) Reviewing and evaluating clinical data on a routine basis
and making specific recommendations for improving treatment
outcomes;
(iii) Maintenance of a thorough understanding of and
proficiency in the application of the most current
technologies (including both surgical and non-surgical
techniques) relevant to Medical Services; and
(iv) Development and implementation of educational outreach
programs designed to facilitate the development of
relationships with physicians in the obstetric/gynecology
community and the dissemination of information pertaining to
the availability of Medical Services.
(b) Physician shall report to the Medical Director of WMDC.
(c) Physician shall serve as a member of the WMDC Management
Committee whose responsibility shall include, but not be limited to, the
following:
(i) Review and approve any renovation and expansion plans and
capital equipment expenditures;
(ii) Determine priorities of major capital expenditures;
(iii) Develop long-term strategic planning objectives;
(iv) Review and approve annual capital and operating budget;
(v) Review and approve all advertising and other marketing
services;
(vi) Determine fee schedule for WMDC;.
(vii) Review and approve annual medical manpower plan; and
(viii) Review and approve managed care contracts guidelines.
3. COMPENSATION AND BENEFITS.
(a) In consideration of the Medical Services to be provided by
Physician hereunder, Physician shall be compensated as provided on Schedule B
attached hereto and made a part hereof.
(b) All remuneration received by Physician in payment for any
outside professional medical activities, but not including any income derived
from testimony for litigation-related proceedings, lectures, passive
investments, fundraising, or writing where Physician does not render
professional medical services, shall be accounted to and be the sole property of
WMDC. Physician's engagement in outside professional medical activities shall
require the express written consent of WMDC and shall not interfere in any way
with the fulfillment of Physician's duties hereunder or diminish the quality of
the Medical Services rendered.
(c) Physician shall receive the benefits provided for on Schedule
B.
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4. BILLING. All fees for Medical Services rendered by Physician on
behalf of WMDC hereunder shall be billed and collected by WMDC. In consideration
for the payment to Physician of the compensation described herein, all
receivables and collections attributable to Medical Services provided by
Physician to WMDC patients shall become the property of WMDC, and Physician
agrees immediately to turn over to WMDC any such fees received by Physician
during the term hereof. Physician hereby authorizes WMDC, and/or IntegraMed
America, Inc., the parent company of WMDC ("INMD") on WMDC's behalf, to bill for
Medical Services provided hereunder and agrees to execute any and all
assignments or other documents that may be necessary or appropriate to permit
WMDC, or INMD as its designee, to carry out all billing and collection
functions. Physician agrees that Physician shall not submit bills for, seek
remuneration for, or otherwise collect fees for Medical Services provided
hereunder. Physician shall look solely to WMDC for compensation for the
professional medical services provided hereunder.
5. MEDICAL STAFF PRIVILEGES. Physician hereby acknowledges that in
order to provide Medical Services to WMDC as herein required, Physician must at
all times during the term of this Agreement be a member in good standing of at
least one hospital accredited by the JCAHO ("Hospital") in the geographical
areas in which WMDC maintains its offices. WMDC shall use reasonable efforts to
assist Physician in maintaining such privileges. The failure of Physician to
maintain privileges at the Hospital in good standing shall, at WMDC's option, be
a basis for termination of this Agreement.
6. PROFESSIONAL LIABILITY INSURANCE.
(a) WMDC shall obtain and maintain on behalf of Physician,
professional liability insurance through a carrier and with such limits as WMDC
shall determine from time to time.
(b) WMDC and Physician agree that "tail coverage" is necessary with
respect to Physician's medical practice prior to the term of this Agreement and
they agree to share equally the cost of such coverage which shall be obtained
within 30 days of this Agreement.
(c) WMDC agrees that in the event it changes its current
professional liability carrier during or subsequent to the term of this
Agreement and said new carrier is unwilling to provide retroactive coverage,
WMDC shall obtain appropriate "tail coverage" for professional liability claims
made against Physican relating to Physician's performance during the term of
this Agreement.
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7. COMPLIANCE WITH BYLAWS, RULES AND REGULATIONS AND POLICIES.
Physician agrees at all times to comply with the bylaws, rules and regulations
of the Hospital and of its medical staff and the reasonable policies,
directives, bylaws, rules and regulations of WMDC. Physician acknowledges that
WMDC shall have final authority over: (a) the acceptance or refusal to treat any
patient; and (b) the amount of the fee to be charged for all Medical Services
rendered by Physician to patients of WMDC, so long as such fees are lawful and
reasonable. Notwithstanding the foregoing, Physician may refuse to treat any
patient whom he reasonably believes should not be treated based upon reasonable
legal or medical concerns.
8. MEDICAL RECORDS. All medical records of patients to whom Physician
provides Medical or other medical Services on behalf of WMDC during the term
hereof shall be the property of WMDC. A copy of any medical records of such
patients will be made available to Physician upon request.
9. TERM. The initial term of this Agreement shall begin on January 1,
1997 and shall terminate five (5) years thereafter unless earlier terminated
pursuant to the provisions of Section 10. After the expiration of the initial
term hereunder and provided WMDC has not exercised its right hereunder to
terminate this Agreement, this Agreement shall be extended automatically, on the
same terms and conditions as herein specified, for additional periods of three
(3) years each.
10. TERMINATION.
(a) This Agreement may terminate upon the occurrence of any of the
following:
(i) Conviction of Physician of a felony or suspension,
revocation or non- renewal of Physician's license to practice
medicine;
(ii) Upon the mutual agreement of the parties at any time;
(iii) Upon the loss by Physician of Hospital medical staff
privileges at the Hospital, as described in Section 5;
(iv) By either party upon a material breach by the other
party; provided that the non-breaching party first gives the
breaching party written notice of the breach, and the
breaching party fails to cure the breach within thirty (30)
days after such notice;
(v) By either party without cause upon giving the other six
months' prior written notice; provided, however, if Physician
terminates this Agreement without cause, the provisions of
section 25 shall apply; or
(vi) Upon death or permanent disability of Physician. For
purposes of this Agreement, the term "permanent disability"
shall have the meaning set forth in the long-term disability
insurance policy or policies then maintained by WMDC for the
benefit of its employees, or if no such policy shall then be
in effect, or if more than one such policy shall then be in
effect in which the term "permanent disability" shall be
assigned different definitions, then the term "permanent
disability" shall be defined for purposes hereof to mean any
physical or mental disability or incapacity which renders
Physician incapable of fully performing the services required
in accordance with Physician's obligations hereunder for a
period of 120 consecutive days or for shorter periods
aggregating 120 days during any 12-month period.
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(b) Upon termination of this Agreement, as hereinabove provided,
neither party shall have any further obligation hereunder except for: (i)
obligations occurring prior to the date of termination; and (ii) obligations,
promises or covenants which are expressly made to extend beyond the term of this
Agreement.
11. REPRESENTATIONS AND COVENANTS.
Physician makes the following representations and covenants, the
validity of which shall be a material term of this Agreement:
(a) Physician holds a license and will remain licensed to practice
medicine in the State of Florida;
(b) Physician is authorized by the United States Drug Enforcement
Agency to prescribe all pharmaceuticals required in connection with the
provision of Medical Services;
(c) There are no professional disciplinary proceedings or
malpractice actions threatened or pending against Physician, and Physician has
notified and will promptly notify WMDC of any such professional disciplinary
proceedings and the dispositions thereof;
(d) Physician has notified and will promptly notify WMDC of all
malpractice actions brought against him and the disposition of any such action;
and
(e) Physician shall at all times act in compliance with all
applicable policies and procedures of WMDC as reasonably communicated to
Physician, as well as all applicable federal, state, and local laws, rules and
regulations.
13. CONFIDENTIALITY OF INFORMATION.
(a) Physician agrees to keep confidential and not to use or
disclose to others (except in connection with the fulfillment of Physician's
duties hereunder any Medical Services Information, as defined herein, during the
term of this Agreement or during any extension or renewal thereof, and for a
period of one (1) year thereafter, except as expressly consented to in writing
by WMDC and INMD. For purposes of this Agreement, the term "Medical Services
Information" shall mean such technical, scientific, and business information
provided to Physician by WMDC or INMD which is designated by WMDC or INMD to be
confidential or proprietary. Medical Services Information shall not include
information which: (i) is or becomes known in the scientific community through
no fault of Physician; (ii) is learned by Physician from a third party legally
entitled to disclose such information; or (iii) was already known to Physician
at the time of disclosure by the disclosing party. Physician further agrees that
should his or her contractual relationship hereunder terminate, he or she will
neither take nor retain, without prior written authorization from WMDC and INMD,
any papers, patient lists, fee books, patient record files, or other documents
or copies thereof or other Medical Services Information of any kind belonging to
WMDC or INMD, as the case may be.
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(b) Without limiting other possible remedies available to WMDC for
the breach of this covenant, Physician agrees that injunctive or other equitable
relief shall be available to enforce this covenant, such relief to be without
the necessity of posting bond, cash or otherwise. Physician further agrees that
if any restriction contained in this section is held by any court to be
unenforceable or unreasonable, a lesser restriction shall be enforced in its
place and remaining restrictions herein shall be enforced independently of each
other. The parties further agree that INMD shall have an independent right to
enforce this covenant in its own right.
(c) It is further understood and agreed that in order to minimize
any misunderstanding regarding what information is considered to be confidential
or proprietary Medical Services Information, the WMDC or INMD will designate the
specific information which WMDC or INMD considers to be proprietary or
confidential under this Agreement.
14. NON-COMPETITION AND OFFERS TO EMPLOYEES.
(a) Recognizing (i) the special nature of the relationship which
will exist between the WMDC and the personnel which it employs or retains,
("Protected Personnel"), and (ii) that the recruiting and training of personnel
by WMDC and INMD is a costly and time consuming endeavor, Physician agrees that
he will not, during the term of this Agreement or during any extension or
renewal hereof and for a period of one (1) year thereafter, directly or
indirectly, offer employment to any Protected Personnel or attempt to induce any
Protected Personnel to become employed or otherwise retained by any third party.
(b) Physician agrees that during the term of this Agreement and for
a period of two years after its termination, Physician shall not directly or
indirectly, within a 25 mile radius of any WMDC office where Physician was
employed, compete with the business of WMDC, or own, directly or indirectly, any
part of or become the employee of, or otherwise render services to, any
enterprise which directly or indirectly competes with the business of WMDC.
Physician agrees that the limitations set forth herein in regard to competing
with WMDC during the term of this Agreement and thereafter are reasonable and
necessary for the protection of the goodwill of the business of WMDC . In that
regard, Physician specifically agrees that the limitations as to period of time
and geographic area are reasonable and necessary for the protection of WMDC's
business.
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(c) Without limiting other possible remedies to WMDC for the breach
of the covenants set forth in this Section 14, Physician agrees that injunctive
or other equitable relief shall be available to enforce the covenants, such
relief to be without the necessity of posting a bond, cash or otherwise.
Physician further agrees that if any restriction contained in this Section is
held by any court to be unenforceable or unreasonable, a lesser restriction
shall be enforced in its place and the remaining restrictions contained herein
shall be enforced independently of each other. The parties agree that in
addition to WMDC, INMD shall have an independent right to enforce this covenant
in its own right as it affects the employees, agents and contractors of INMD.
15. PUBLICATIONS. Physician agrees that any and all abstracts,
articles, reviews, or other publications that Physician proposes to submit for
publication within the scientific or medical community, or otherwise, which
publication is the result of direct or indirect support from INMD, in the form
of, including, but not limited to, materials, patients, personnel, data or
Facility or WMDC resources, Physician will submit to INMD's Vice President,
Science and Technology and its Vice President, Medical Affairs, not less than 30
days prior to the proposed submission date, a copy of the proposed article or
publication, for INMD's proprietary review, Physician further agrees that the
appropriate statement, "support provided by INMD, Inc." or "Supported in part by
INMD America, Inc." will be set forth as a disclosure with respect to the
publication.
16. NOTICES. All notices, requests, demands, and other communications
provided for in this Agreement or required among the parties in connection with
the Agreement shall be in writing and shall be deemed to have been given at the
time when personally delivered, or mailed at any United States Post Office or
dropped in any appropriate postal receptacle, registered or certified mail,
prepaid, return receipt requested and regular first class mail, addressed to the
party at the address set forth below or such other address as well:
If to Physician:
W. Banks Hinshaw, Jr., M.D.
5146 Southwest 9 Lane
Gainesville, Florida 32607
If to WMDC, at:
Women's Medical & Diagnostic Center, Inc.
Office Park West
222 Southwest 36th Terrace
Gainesville, Florida 32607
Attention: Medical Director
With a copy to:
IntegraMed America, Inc.
One Manhattanville Road
Purchase, New York 10577-2100
Attention: Jay Higham, Vice President
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18. AMENDMENT. No modification, amendment, or addition to this
Agreement, nor waiver of any of its provisions, shall be valid or enforceable
unless in writing and signed by all parties.
19. ASSIGNMENT. No assignment of this Agreement or the rights and
obligations hereunder shall be valid without the specific written consent of
both parties.
20. ENTIRE AGREEMENT; MODIFICATION. This Agreement contains the entire
understanding between the parties and no alteration or modification hereof shall
be effective unless contained in a subsequent written instrument executed by
both parties hereto.
21. APPLICABLE LAW. This Agreement shall be governed by the laws of the
State of Florida. Any and all claims, disputes or controversies arising under,
out of, or in connection with this Agreement or any breach thereof, shall be
determined by binding arbitration in the State of Florida, City of Gainesville
(herein after "Arbitration"). The party seeking determination shall subject any
such dispute, claim or controversy to either (I) JAMS/Endispute or (ii) the
American Arbitration Association, and the rules of commercial arbitration of the
selected entity shall govern. The Arbitration shall be conducted and decided by
three (3) arbitrators.. Each party shall bear its own expenses, the expenses of
its selected arbitrator and one-half the expenses of the third arbitrator. Any
application to compel Arbitration, confirm or vacate an arbitral award or
otherwise enforce this Paragraph shall be brought in the Courts of the State of
Florida.
22. SEVERABILITY. Each provision in this Agreement is intended to be
severable, and may be modified by any court of competent jurisdiction to the
extent necessary to make such provision valid and enforceable. If any term or
provision hereof shall be determined by a court of competent jurisdiction to be
illegal or invalid for any reason whatsoever in whole or in part, such provision
or portion thereof shall be severed from this Agreement and shall not effect the
validity of the remainder of this Agreement.
23. WAIVER; CONSENT. No consent or waiver, express or implied, by
either party hereto, or of any breach or default by the other party in the
performance by the other of its obligations hereunder, shall be valid unless in
writing, and no such consent or waiver shall be deemed or construed to be a
consent or waiver to or of any other breach or default on the performance by
such other party of the same or any other obligation of such party hereunder.
Failure on the part of either party to complain of any act or failure to act of
the other party or to declare the other party in default, irrespective of how
long such failure continues, shall not constitute a waiver by such party of its
rights hereunder. The granting of any consent or approval in any other instance
by or on behalf of Physician and/or WMDC shall not be construed to waive or
limit the need for such consent in any other or subsequent instance.
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24. FURTHER ACTION. Each party hereto agrees that it will execute and
deliver such further instruments and will take such further action as may be
necessary to discharge, perform or carry out any of its respective obligations
and agreements hereunder.
25. LETTER OF CREDIT. Physician agrees that for the faithful
performance of each and every obligation hereunder for at least five (5) years
to provide WMDC with an Irrevocable Letter of Credit in an initial amount of
$100,000 with an annual reduction by $20,000 during each year during the term of
this Agreement. In the event Physician fails to perform in accordance with this
Agreement, WMDC shall be entitled to draw down the balance of the letter of
credit prorated to the nearest quarter.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
as of the date first above written.
WOMEN'S MEDICAL & DIAGNOSTIC CENTER, INC..
By:/s/ Gerardo Canet
--------------------------
Gerardo Canet, President
PHYSICIAN:
/s/ W. Banks Hinshaw
--------------------------
W. Banks Hinshaw, Jr., M.D.
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SCHEDULE A
Office Locations
Office Park West
222 Southwest 36th Terrace
Gainesville, Florida 32607
6440 Newberry Road
Suite 401
Gainesville, Florida 32605
US Highway 90 West
Lake City, Florida 32055
Ocala address
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SCHEDULE B
COMPENSATION
Physician's base compensation shall be solely a function of
Predistribution Earnings ("PDE") of WMDC distributed as follows:
PDE Physician Group WMDC
--- --------------- ----
$0- $200,000 100% 0%
$201,000-$400,000 50% 50%
$401,000 and above 75% 25%
PDE distributed to Physician and any other physician (the "Physician
Group") employed by WMDC shall be allocated to each physician in accordance with
an allocation approved by the Management Committee consistent with Florida's
regulatory scheme. Physician shall receive a draw of One-hundred Thousand
Dollars ($100,000.00) annually, paid in monthly installments, less local, state
and federal withholdings, towards Physician's portion of PDE available to the
Physician Group. Within 60 days of the end of each quarter, there shall be an
adjustment for any amount of PDE which Physician received for the previous
quarter in excess of or less than the actual PDE to which Physician was
entitled. The adjustment, for the excess or lesser amount, shall be made for the
quarter in which the determination is made.
PDE of WMDC shall mean Research Fees, and Physician and Other
Professional Revenues, net of adjustments for uncollectible accounts, refunds,,
discounts, contractual allowances, professional courtesies and other activities
that do not generate a collectible fee as reasonably determined by WMDC ("Net
Revenues"), less all costs and expenses ("Cost of Services") related to the
operation of WMDC and a monthly management fee paid to INMD equal to 6% of Net
Revenues.
All Cost of Services shall be set forth in the annual budget, as
amended from time to time, and approved by the Management Committee of WMDC.
Cost of Services shall include without limitation, the following costs
and expenses, whether incurred by INMD or WMDC:
1. Salaries and fringe benefits of all employees of INMD working
directly in the management, operation or administration (including,
without limitation, Other Professional Employees and Technical
Employees) providing services at WMDC, along with payroll taxes or all
other taxes and charges now or hereafter applicable to such personnel,
and services of independent contractors;
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2. Expenses incurred in the recruitment of additional physicians for
WMDC, including, but not limited to employment agency fees, relocation
and interviewing expenses and any actual out-of-pocket expenses of
INMD personnel in connection with such recruitment effort;
3. Direct marketing expenses of WMDC, such as direct costs of printing
marketing materials prepared by INMD;
4. Any sales and use taxes assessed against WMDC related to the
operation of WMDC's medical practice;
5. Lease payments, depreciation expense (determined according to
GAAP), taxes and interest directly relating to the Facilities and
equipment, and other expenses of the Facilities;
6. Legal fees paid by INMD or WMDC to outside counsel in connection
with matters specific to the operation of WMDC such as regulatory
approvals required as a result of the parties entering into this
Agreement; provided however, legal fees incurred by the parties hereto
as a result of a dispute between the parties shall not be considered a
Cost of Services.
7. Fringe benefits provided to Physician Employees;
8. All insurance necessary to operate WMDC including fire, theft,
general liability and malpractice insurance for Physician Employees of
WMDC;
9. Professional licensure fees and board certification fees of
Physician Employees and Other Professional Employees rendering Medical
Services on behalf of WMDC;
10. Membership in professional associations and continuing
professional education for Physician Employees and Other Professional
Employees;
11. Quality Assurance Program;
12. Cost of filing fictitious name permits pursuant to this Agreement;
and
13. Such other costs and expenses directly incurred by INMD or WMDC
necessary for the management or operation of WMDC.
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In addition to the base compensation set forth above, Physician shall
receive $150,000 payable as follows:
A. A sign- on bonus in the amount of $110,000 with $40,000 payable on
the signing of this Agreement and the balance paid in four equal payments of
$17,500 for each of the next four years on the anniversary date of this
Agreement; and
B. A non-compete payment of $50,000 with $10,000 payable on the signing
of this Agreement and the balance paid in four equal payments of $10,000 for
each of the next four years on the anniversary date of this Agreement.
C. In the event this Agreement is terminated for any reason other than
death or permanent disability of Physician during the first 5 years, any portion
of the Sign-on bonus and non-compete payments which are not amortized by WMDC in
accordance with GAAP shall be repaid to WMDC.
BENEFITS
Physician shall receive the following benefits which are considered
part of Cost of Services. .
CATEGORY BENEFIT
- -------- -------
Health Insurance Family Coverage; 80 % paid by WMDC
Dental Insurance Fully Funded for Physician
Life Insurance $200,000 Coverage
Disability Insurance 60% of base compensation after 90
days; paid to age 65
Continuing Medical Education One week annually for participation in
professional meetings
Malpractice Insurance $1,000,000/$3,000,000 coverage provided
Vacation As agreed to between WMDC and Physician
Sick time As needed
Social Security and Employment taxes As required by law
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