1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of March 24, 1999 (the "Agreement"),
between Sheridan Healthcare, Inc., a Delaware corporation (the "Company"), and
Michael F. Schundler (the "Executive").
PRELIMINARY STATEMENTS
WHEREAS, on the date hereof, Vestar/Calvary, Inc. ("Acquisition"),
Vestar/Calvary Holdings, Inc. ("Holdings") and the Company are entering into an
Agreement and Plan of Merger (the "Merger Agreement") pursuant to which
Acquisition will merge into the Company (the "Merger"), with the Company
constituting the surviving corporation;
WHEREAS, Acquisition and the Company desire that, effective upon the
purchase by Acquisition of shares of the Company's common stock pursuant to the
Offer (as defined in the Merger Agreement), the Company employ the Executive and
enter into an agreement embodying the terms of such employment and the Executive
desires to accept such employment with the Company and enter into such an
agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein and for other good and valuable consideration, the parties agree as
follows:
AGREEMENT
1. Effectiveness of Agreement/Prior Agreements.
(a) Notwithstanding any other provision of this Agreement,
this Agreement shall constitute a binding obligation of the parties hereto as of
the date hereof but shall become effective only upon the date of Acquisition's
purchase of shares of the Company's common stock pursuant to the Offer (such
date being hereinafter referred to as the "Commencement Date"); provided,
however, that for this Agreement to continue to be effective after the ninetieth
day following the Merger, Holdings shall, within ninety (90) days following the
Merger, obtain shareholder approval intended to satisfy Section 280G(b)(5)(B) of
the Internal Revenue Code of 1986, as amended (the "Shareholder Approval"). If
the Shareholder Approval is not obtained or the Merger Agreement is terminated
for any reason without shares of the Company's common stock being purchased
pursuant to the Offer, this Agreement shall, at such time, be terminated without
further obligation or liability of either party.
(b) Effective as of the Commencement Date, this Agreement
shall supercede all prior agreements and understandings (including verbal
agreements) between the Executive and the Company and/or its affiliates
regarding the terms and conditions of Executive's employment with the Company
and its affiliates including, without limitation, the Executive Employment
Agreement dated as of August 9, 1996 with the Company (f/k/a SAMA Holdings,
Inc.) and Sheridan Healthcorp, Inc. (f/k/a Southeastern Anesthesia Management
Associates), as amended
2
2
(the "Prior Employment Agreement" and together with such other prior agreements
and understandings, collectively, the "Prior Agreements"); provided that this
Agreement shall not supercede the Executive's rights to expense reimbursement or
benefits under the Company's employee benefits plans, programs and arrangements.
It is expressly agreed that from and after the Commencement Date the Company and
its affiliates shall have no further obligations under, and the Executive shall
have no further rights under, the Prior Employment Agreement including, without
limitation, any severance, termination, or change of control related benefits.
2. Employment. Subject to the provisions of this Agreement, the Company
shall employ the Executive, and the Executive agrees that he will be so
employed, upon the terms and conditions hereinafter set forth.
3. Term of Employment. Subject to the provisions of this Agreement,
unless earlier terminated pursuant to Section 7, the term of Executive's
employment pursuant to this Agreement (the "Term of Employment") shall remain
effective until the fifth anniversary of the Commencement Date (the "Scheduled
Expiration Date"). Notwithstanding the preceding sentence, commencing with the
Scheduled Expiration Date and on each anniversary of the Scheduled Expiration
Date thereafter (each an "Extension Date"), the Term of Employment shall be
automatically extended for an additional one-year period, unless the Company or
the Executive provides the other party hereto six (6) months' prior written
notice before the next Extension Date that the Term of Employment shall not be
so extended. For the avoidance of doubt, the term "Term of Employment" shall
include any extension that becomes applicable pursuant to the preceding
sentence.
4. Duties.
(a) During the Term of Employment, beginning on the
Commencement Date the Executive (i) shall continue to serve as the Chief
Operating Officer and Chief Financial Officer of the Company or in a position
carrying an equivalent or more senior title, as reasonably determined by the
Board of Directors, (ii) shall perform such duties and responsibilities as may
be determined by the Board of Directors of the Company consistent with the
Executive's title and position as an executive officer of the Company pursuant
to the preceding clause (i), (iii) upon request of the Board of Directors of the
Company, shall serve as an officer and/or director of the Company and any of its
subsidiaries and (iv) shall render all services reasonably incident to the
foregoing. The Executive agrees to use the Executive's best efforts in, and
shall devote the Executive's full working time, attention, skill and energies
to, the advancement of the interests of the Company and/or its Subsidiaries and
the performance of the Executive's duties and responsibilities hereunder, except
for (x) vacation time and absence for sickness or similar disability and (y) to
the extent that it does not interfere with the performance of the Executive's
duties hereunder, (A) such reasonable time as may be devoted to service on the
boards of directors of other corporations and entities, subject to the
provisions of Section 8, on which the Executive currently serves and which are
disclosed on Exhibit A hereto or any other boards of directors on which the
Executive may serve in the future, subject to the consent of the Company's Board
of Directors (not to be unreasonably withheld), and the fulfillment of civic
responsibilities and (B) such reasonable time as may necessary from time to time
for personal financial matters.
3
3
(b) In performing the Executive's duties under this Agreement,
the Executive shall use reasonable good faith efforts to comply with and follow
all written policies, standards, rules and regulations established by the
Company from time to time and shall be bound by and comply with the terms and
conditions of other written agreements to which the Company is a party, or to
which it may become a party during the Term of Employment, that are applicable
to executive officers of the Company in their capacity as such and not in their
capacity as physicians, in any case under this Section 4(b), provided Executive
has knowledge of such policies, standards, rules, regulations or agreements, as
the case may be.
(c) During and subsequent to the Term of Employment, the
Executive agrees that the Executive shall immediately notify the Company of any
and all notices of claims made or threats thereof of which the Executive has
knowledge arising out of the Executive's services during or prior to the Term of
Employment as soon as the Executive becomes aware of this information and shall
cooperate in any investigation and in the defense of any claims made or threats
thereof.
(d) During and subsequent to the Term of Employment, the
Executive shall assign, account and pay to the Company all accounts receivable,
compensation and any other form of remuneration due from or paid by any source
other than the Company that is paid to the Executive and is attributable to
services he has rendered in the Executive's professional capacity on behalf of
the Company during the Term of Employment or sums which come into the
Executive's possession which are attributable to the services of other employees
of the Company on behalf of the Company.
5. Compensation.
(a) During the Term of Employment, the Company shall pay the
Executive as compensation for the performance of the Executive's duties under
this Agreement, a salary at an annual rate of $275,000 per annum from the
Commencement Date (as such base salary may be increased from time to time, the
"Base Salary"). Such salary shall be subject to such increases, if any (but not
decreases), as may be determined in the sole discretion of the compensation
committee of the Company's Board of Directors. Executive's salary shall be
subject to withholding under applicable law and shall be payable in periodic
installments in accordance with the Company's usual practice for its senior
executives, as in effect from time to time.
(b) During the Term of Employment, the Company shall maintain
an annual incentive compensation plan (the "Annual Bonus Plan") for its senior
executives in which the Executive shall be entitled to participate in accordance
with the terms thereof as in effect from time to time, at a level commensurate
with the Executive's position and duties with the Company. During the Term of
Employment, the Executive shall be eligible to receive an annual target bonus
equal to 25% of the Base Salary pursuant to the Annual Bonus Plan, based upon
the satisfaction of performance targets established by the Company's Board of
Directors in its sole discretion. It is the Company's intention that its Board
of Directors shall use its best commercial efforts to establish such performance
targets during the first 120 days of each fiscal year.
4
4
(c) Upon the occurrence of the Effective Time (as defined in
the Merger Agreement), the Company shall pay the Executive a cash bonus in the
amount of $250,000.
6. Benefits.
(a) During the Term of Employment, the Executive shall be
entitled to participate in any and all pension, profit sharing, medical, dental
and/or life insurance plans (collectively, the "Benefits") as may be in effect
from time to time for senior executives of the Company. Such participation shall
be subject to (i) the terms of the applicable plan documents, (ii) policies of
the Company generally applicable to senior executives and (iii) the discretion
of the Board of Directors of the Company or any administrative or other
committee provided for in or contemplated by such plans, including discretion
with respect to creation, maintenance and continuation of particular benefits,
plans and arrangements. Notwithstanding anything to the contrary contained
herein, the Executive shall at any time be entitled to at least those Benefits
that are equivalent in nature to those Benefits available at such time to the
employees or executives of the Company generally.
(b) The Company shall promptly reimburse the Executive for all
reasonable business expenses (including business travel and entertainment
expenses) incurred by the Executive during the Term of Employment in accordance
with the Company's practices for senior executives of the Company, as in effect
from time to time.
(c) During the Term of Employment, the Executive shall be
entitled to five (5) weeks paid vacation time during each calendar year the
Executive is employed under this Agreement (pro-rated for the final partial
calendar year of the Term of Employment). Vacation time shall be used within the
calendar in which they accrue, and vacation time shall only be used at the times
and intervals mutually agreed upon between Executive and the Company. The
Executive shall not be entitled to any additional compensation for unused
vacation days.
7. Termination of Employment of the Executive. Notwithstanding any
other provision of this Agreement, the provisions of this Section 7 shall
exclusively govern the Executive's rights under this Agreement upon a
termination of the Executive's employment with the Company and its affiliates.
Notwithstanding the foregoing, the Executive shall be entitled to receive such
expense reimbursement and benefits accrued under any plan, policy or program of
the Company in accordance with the terms of such plan, policy or program,
including, without limitation, reimbursement for reasonable business expenses
incurred. During the Term of Employment, this Agreement and the Executive's
employment hereunder may be terminated as follows under subparagraph (a) through
(h) inclusive:
(a) At any time by the mutual consent of the Executive and the
Company. Upon termination pursuant to this Section 7(a), all
obligations of the Company under this Agreement thereupon immediately
shall terminate, other than obligations with respect to earned but
unpaid Base Salary.
(b) At any time for "cause" by the Company upon written notice
of termination to the Executive, which notice specifies in reasonable
detail the facts and circumstances
5
5
claimed to give rise to the Company's right to terminate the
Executive's employment for cause. For purposes of this Agreement, a
termination shall be for "cause" if the Board of Directors of the
Company reasonably determines that:
(i) the Executive has committed an act of fraud,
embezzlement, misappropriation or breach of fiduciary duty
against the Company or its affiliates or felony involving the
business, assets or customers or clients of the Company or its
affiliates or has been convicted by a court of competent
jurisdiction or has plead guilty or nolo contendere to any
other felony; or
(ii) the Executive has committed a material breach of
any of the covenants, terms or provisions of Sections 8, 9 or
11 hereof; or
(iii) the Executive substantially has failed to
perform the Executive's duties hereunder, including by
committing a material breach of any of the covenants, terms or
provisions hereof (other than pursuant to Sections 8, 9, or
11), which failure or breach has not been remedied within a
reasonable time specified by the Company that is not less than
thirty (30) days after delivery to the Executive by the
Company of written notice thereof; or
(iv) the Executive has breached the Executive's
obligation contained in Section 12 of this Agreement.
Upon termination for cause as provided in this Section 7(b),
(A) all obligations of the Company under this Agreement thereupon
immediately shall terminate, other than any obligations with respect to
earned but unpaid Base Salary, and (B) the Company shall have any and
all rights and remedies under this Agreement and applicable law.
(c) Upon the Executive's death or upon the Executive's
permanent disability (as defined below) continuing for a period of one
hundred eighty (180) days. Upon termination in the event of death or
permanent disability as provided in this Section 7(c), such termination
will be treated as a termination by the Company without Cause and the
rights and obligations of the parties shall be as set forth in Section
7(e), provided that in the case of the death of the Executive, any
payments shall be made to the Executive's estate. As used herein, the
term "permanent disability" or "permanently disabled" is hereby defined
as the inability of the Executive, by reason of injury, illness or
other similar cause, to perform a major part of the duties and
responsibilities which the Executive had been performing pursuant to
this Agreement prior to the date of disability in connection with the
conduct of the business and affairs of the Company.
(d) At any time by the Executive upon ninety (90) days' prior
written notice to the Company. Upon termination by the Executive as
provided in this Section 7(d), all obligations of the Company under
this Agreement thereupon immediately shall terminate, other than any
obligations with respect to the earned but unpaid Base Salary and any
accrued but unpaid incentive bonus in accordance with Section 5(b)
hereof for any previously completed fiscal year.
6
6
(e) At any time without "cause" (as defined in Section 7(b))
by the Company upon written notice to the Executive of not less than
thirty (30) days. In the event of termination of the Executive by the
Company pursuant to this Section 7(e), the Company shall, subject to
the Executive's continued compliance with the provisions of Section 8,
(i) pay to the Executive an amount equal to the Executive's Base Salary
according to the terms of Section 5(a) hereof, in equal installments
over the 12 months following the termination of employment pursuant to
the Company's payroll practices, (ii) continue the Executive's
benefits, car allowance and reimbursements as provided in Section 6
hereof from the effective date of termination through the date that is
twelve (12) months from the date of such termination, (iii) pay to the
Executive the Executive's pro rata portion (based on the number of days
the Executive is employed during the applicable year as compared to 365
days) of the bonus that the Executive would have been eligible to
receive pursuant to Section 5(b) hereof if he had been employed
pursuant to this Agreement for the whole year based upon the Company's
actual financial performance for the applicable year as measured
against the performance objectives for such year, determined and
calculated in accordance with the terms of the Annual Bonus Plan (the
"Pro-Rata Bonus"), payable when bonuses are generally paid to the
Company's senior executives and (iv) any accrued but unpaid incentive
bonus in accordance with Section 5(b) for any previously completed
fiscal year. Notwithstanding the foregoing provisions of this Section
7(e), if the Executive terminates the Executive's employment pursuant
to Section 7(f) following any reduction in the Base Salary, the Base
Salary amount applicable under this Section 7(e) shall be the amount in
effect prior to any reduction thereof. Upon termination by the Company
without cause as provided in this Section 7(e), except for the
compensation and benefits expressly provided in this Section 7(e), all
obligations of the Company under this Agreement thereupon immediately
shall terminate, other than any obligations with respect to earned but
unpaid Base Salary.
(f) Upon written notice by the Executive upon the continuation
of any of the following (without the Executive's written consent) after
written notice (the "Good Reason Notice") by the Executive to the
Company describing in reasonable detail the occurrence of one or more
of the following events and the failure by the Company to remedy such
event(s) within thirty (30) days after receipt of the Good Reason
Notice: (i) the Company has failed to pay the Executive the Base Salary
(or any installment thereof) provided for in Section 5(a) or (if
applicable) the annual incentive bonus, if any, payable under Section
5(b) upon such date as payment is due in accordance with Section 5(a)
or (if applicable) Section 5(b), (ii) the Company fails to make
available to the Executive any benefit plan or compensation plan
(including any pension, profit sharing, life insurance, health,
accidental death or dismemberment or disability plan) that has been
made available generally to the senior executives of the Company
(subject to applicable eligibility and waiting periods applicable to
senior executives generally) or reduces the Benefits to which the
Executive is entitled so that they are not at least equivalent in
nature to those Benefits available at such time to the employees or
executives of the Company generally, provided that nothing in this
Section 7(f) shall be construed to mean that the Company shall be
constrained in any manner from amending or eliminating any benefit or
compensation plan as such is applied to the Executive and the other
senior executives of the Company generally, (iii) the principal offices
of the Company are
7
7
moved to a location more than 30 miles from the Company's current
headquarters in Broward County in the State of Florida, or (iv) the
Company has substantially failed to perform any of its obligations
hereunder, including by committing a material breach of any of the
covenants, terms or provisions hereof, by a demotion in Executive's
titles from those contemplated by this Agreement or by assigning to the
Executive duties representing a diminution from those contemplated by
this Agreement. The Executive shall have no right of termination under
this Section 7(f) in the event the relevant default described in the
Good Reason Notice is cured within the 30 day period following the
Company's receipt of the Good Reason Notice. In the event of the
Executive's termination of employment pursuant to this Section 7(f),
such termination shall be treated for purposes of this Agreement as a
termination by the Company without "cause" and the provisions of
Section 7(e) shall apply.
(g) Upon the expiration of the Term of Employment due to the
Executive's election not to extend the Term of Employment pursuant to
Section 3. Upon termination of the Term of Employment by the Executive
as provided in this Section 7(g), unless the Executive's employment is
earlier terminated pursuant to paragraphs (a) through (f) of this
Section 7, the Executive's termination of employment hereunder (whether
or not the Executive continues as an employee of the Company
thereafter) shall be deemed to occur on the close of business on the
day immediately preceding the next scheduled Extension Date and all
obligations of the Company under this Agreement thereupon immediately
shall terminate, other than any obligations with respect to the earned
but unpaid Base Salary, any accrued but unpaid incentive bonus in
accordance with Section 5(b) for any previously completed fiscal year
and the Pro-Rata Bonus for the year in which such termination occurs.
(h) Upon the expiration of the Term of Employment due to the
Company's election not to extend the Term of Employment pursuant to
Section 3. Upon termination of the Term of Employment by the Company as
provided in this Section 7(h), unless the Executive's employment is
earlier terminated pursuant to paragraphs (a) through (f) of this
Section 7, the Executive's termination of employment hereunder (whether
or not the Executive continues as an employee of the Company
thereafter) shall be deemed to occur on the close of business on the
day immediately preceding the next scheduled Extension Date and all
obligations of the Company under this Agreement thereupon immediately
shall terminate, other than any obligations with respect to earned but
unpaid Base Salary, any accrued but unpaid incentive bonus in
accordance with Section 5(b) for any previously completed fiscal year
and the Pro-Rata Bonus for the year in which such termination occurs.
In addition, the Company shall, subject to the Executive's continued
compliance with the provisions of Section 8, pay to the Executive an
amount equal to the Executive's annual Base Salary according to the
terms of Section 5(a) hereof, in equal installments over the 12 months
following the termination of employment pursuant to the Company's
payroll practices.
In the event of any termination of this Agreement as provided in this
Section 7, the Executive shall immediately resign from, and surrender, all
medical staff and other privileges ("Privileges"), at any hospital, ambulatory
surgical center or other facility where the Company
8
8
provides services and Executive waives any and all due claims of any kind
whatsoever, including due process claims, the Executive or the Executive's
estate may have against the Company and all other parties with respect to the
termination of the Executive's Privileges.
Unless the Company and the Executive otherwise agree in writing,
continuation of the Executive's employment with the Company beyond the
expiration or termination of the Term of Employment shall be deemed an
employment at will and shall not be deemed to extend any of the provisions of
this Agreement and the Executive's employment may thereafter be terminated at
will by either the Executive or the Company.
8. Non-Competition.
(a) Except as provided below, during the Term of Employment
and for the Non-Competition Period, the Executive shall not, without the express
written consent of the Company, directly or indirectly, engage in any activity
which is, or participate or invest in or assist (whether as owner, part-owner,
stockholder, partner, director, officer, trustee, employee, agent, independent
contractor or consultant, or in any other capacity) any Competitive Enterprise,
except that the Executive may make passive investments in a Competitive
Enterprise the shares of which are publicly traded if such investment
constitutes less than one percent of the outstanding equity of such enterprise.
Without implied limitation, the forgoing covenant shall include hiring or
attempting to hire for or on behalf of any such Competitive Enterprise any
officer or other employee of the Company or any Subsidiary of the Company or any
Controlled Entity, encouraging any officer, Health Care Provider or employee to
terminate his or her relationship or employment with the Company or any
Subsidiary of the Company or Controlled Entity, soliciting for or on behalf of
any such Competitive Enterprise any client or customer (including any Medical
Customer) of the Company or any Subsidiary of the Company or any Controlled
Entity, and diverting to any Person any client or business opportunity of the
Company, or any Subsidiary of the Company or Controlled Entity.
(b) The term "Non-Competition Period" shall mean the period
commencing on the last day of the Term of Employment and ending on the first
anniversary of the last day of the Term of Employment or, in the event the
Executive fails to commence employment with the Company as of the Commencement
Date, until the first anniversary of the Commencement Date.
(c) For purposes of this Section 8:
"Affiliate" shall mean, as to any Person, (i) each direct or
indirect Subsidiary of such Person, (ii) each other Person of which
such Person is a direct or indirect Subsidiary, and (iii) each other
direct or indirect Subsidiary of such other Person.
"Columbia" means the hospitals and ambulatory surgical
facilities owned by Columbia/HCA Healthcare, Inc.
"Competitive Enterprise" means any Person the activities,
products or services of which (A) are competitive with activities,
products or services of the Company or any of its Controlled Entities
in any state in which the Company is engaged or intends to engage
9
9
in the same or a similar business during the one year period preceding
the Executive's termination of employment or during the Non-Competition
Period, and (B) include (1) the provision of medical services,
including without limitation, the provision of anesthesia services,
pain management services, emergency room services, primary medical care
services, neonatology, perinatology and radiology services; (2) the
provision of Payor Services; (3) the provision of administrative
services for medical services and Payor Services, including without
limitation, quality assurance services, utilization management
services, billing services, recruitment services and medical management
information services; or (4) the provision of services or products of
any nature to Columbia.
"Controlled Entity" shall have the meaning ascribed thereto in
the Merger Agreement.
"Health Care Provider" means any physician, nurse, technician
or allied health care provider providing medical services on behalf of
the Company or any Controlled Entity on a full or part-time basis as an
independent contractor or consultant.
"Medical Customers" means patients, health maintenance
organizations, preferred payer organizations, third party payors, IPAs,
PHOs, MSOs, PSOs (or similar arrangements), employers, labor unions,
hospitals, clinics, ambulatory surgery centers, Medicare intermediaries
and Medicaid intermediaries.
"Payor Services" means payor services in the area of managed
care, third party payors, provider networks, IPAs, TPAs, PHOs, MSOs,
HMOs, PSOs, capitation pools and other similar arrangements.
"Person" shall mean an individual, a corporation, an
association, a partnership, an estate, a trust, and any other entity or
organization.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, association or other business entity of which
fifty percent (50%) or more of the total voting power of shares of
capital stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof, or fifty percent (50%) or more of the equity interest therein,
is at the time owned or controlled, directly or indirectly, by any
Person or one or more of the other Subsidiaries of such Person or a
combination thereof.
(d) In furtherance and not in limitation of the foregoing
restrictions, during the Term of Employment and the Non-Competition Period,
subject to Section 4, the Executive shall not devote any time to consulting,
lecturing or engaging in other self-employment or employment activities without
the prior written consent of the Company.
9. Business Opportunities. The Executive agrees, while he is employed
by the Company, to offer or otherwise make known or available to the Company or
any subsidiary, as directed by the Company and without additional compensation
or consideration, any business
10
10
prospects, contracts or other business opportunities that he may discover, find,
develop or otherwise have available to him in any field in which the Company is
engaged, and further agrees that any such prospects, contracts or other business
opportunities shall be the property of the Company.
10. Representations and Warranties of Executive/Indemnification.
(a) The Executive represents and warrants to the Company (i)
that the Executive (A) is able to enter into and perform all duties under this
Agreement, and (B) is in good mental and, except as set forth on Exhibit B
hereto, physical health and does not suffer from any illness or disability which
could prevent him from fulfilling the Executive's responsibilities under this
Agreement; (ii) that the Executive is not a party to or bound by any agreement,
arrangement or understanding that would interfere with, hinder or conflict with
the performance of the Executive's duties hereunder, and (iii) that none of the
representations or warranties made by the Executive in this Agreement or in any
interviews, references, resumes or curricula vitae submitted to the Company or
in any insurance applications or any staff membership applications submitted to
any third party in connection with this Agreement, contains or will contain any
untrue statement of a material fact, or omits or will omit to state a material
fact necessary in order to make the statements or provisions therein and in this
Agreement not misleading or incomplete.
(b) The Executive agrees to immediately notify the Company of
any fact or circumstance of which he becomes aware during the Term of
Employment, which in itself or with the passage of time and/or the combination
with other reasonably anticipated factors known to the Executive does render or
will render any of these representations and warranties to be untrue.
(c) The Company hereby agrees that it shall indemnify and hold
harmless the Executive to the fullest extent permitted by Delaware law from and
against any and all liabilities, costs, claims, and expenses, including all
costs and expenses incurred in defense of litigation (including attorneys'
fees), arising out of the employment of the Executive with the Company. Costs
and expenses incurred by the Executive in defense of such litigation (including
attorneys' fees) shall be paid by the Company in advance of the final
disposition of such litigation upon receipt by the Company of (a) a written
request, (b) appropriate documentation evidencing the incurrence, amount and
nature of the costs and expense for which payment is being sought, and (c) an
undertaking made by or on behalf of the Executive to repay the amounts so paid
if it shall ultimately be determined that the Executive is not entitled to be
indemnified by the Company under Delaware law. During the Term of Employment,
the Company shall maintain in effect, at its sole expense, directors' and
officers' liability insurance policies providing for coverage and reimbursement
amounts and policies that are customary and appropriate for companies of similar
size and nature to the Company and that cover claims (subject to customary
exceptions) arising from facts or events that occur at any time during the
period of the Executive's employment with the Company.
11. Confidentiality.
11
11
(a) The Executive acknowledges that as a result of the
Executive's employment with the Company, the Executive has and will necessarily
become informed of, and have access to, certain valuable and confidential
information of the Company, including, without limitation, trade secrets,
technical information, plans, lists of patients, data, records, fee schedules,
computer programs, manuals, processes, methods, intangible rights, contracts,
agreements, licenses, personnel information and the identity of health care
providers (collectively, the "Confidential Information"), and that the
Confidential Information, even though it may be contributed, developed or
acquired in whole or in part by the Executive, is the Company's exclusive
property to be held by the Executive in trust and solely for the Company's
benefit. Accordingly, except as required by law, by an order of a court having
jurisdiction or under subpoena from a government agency, the Executive shall
not, at any time, either during or subsequent to the Term of Employment, use,
reveal, report, publish, copy, transcribe, transfer or otherwise disclose to any
person, corporation or other entity, any of the Confidential Information without
the prior written consent of the Company, except to officers and employees of
the Company and other persons who are in a contractual or fiduciary relationship
with the Company and except for information which is or becomes of general
public knowledge from sources other than the Executive.
(b) Upon the termination of this Agreement, the Executive
shall promptly deliver to the Company all Company property and possessions
including all drawings, manuals, letters, notes, notebooks, reports, copies,
deliverable Confidential Information and all other materials relating to the
Company's business which are in the Executive's possession or control.
12. Substance Abuse Policy. It is the Company's policy that none of its
employees shall use or abuse any controlled substances at any time or be under
the influence of alcohol or be affected by the use of alcohol during the time
period required to perform their duties and obligations under any employment
agreements. Company and the Executive both acknowledge and agree that the
purpose of this policy is for the benefit of the Company, the Executive and the
individuals whom they serve.
In compliance with this policy, the Executive agrees to submit
to random drug testing immediately upon the Company's request in accordance with
practices and policies in effect from time to time for physician employees of
the Company. Testing may include, but shall not be limited to, the taking of
blood and urine samples and utilization of gas chromatography. Unless otherwise
provided in the practices and policies in effect from time to time for physician
employees of the Company, in the event that a positive test result is reached
indicating a violation of the Company's policy, the Executive may, at the
Executive's own expense and subject to the supervision and approval of the
Company of the manner and testing facilities utilized, elect to have a second
drug test performed on a second portion of the same sample. The Company may, in
its sole and absolute discretion, terminate the Executive for cause pursuant to
Section 7(b) of this Agreement in the event either: (a) a positive test result
is received in the initial drug test and the Executive fails to exercise the
Executive's option for a second test in the manner provided for in this Section
12 or in accordance with practices and policies in effect from time to time for
physician employees of the Company; or (b) positive test results are received
from both tests. In the event that the second test result is negative, the
Company may, at any time, retest the Executive pursuant to the terms of this
Section 12 and the practices and policies in effect from time to time for
physician employees of the Company.
12
12
13. Specific Performance; Severability. It is specifically understood
and agreed that any breach of the provisions of Sections 8, 9 and 11 hereof and
the obligations referred to and incorporated therein by the Executive is likely
to result in irreparable injury to the Company, that the remedy at law alone
will be an inadequate remedy for such breach and that, in addition to any other
remedy it may have, the Company shall be entitled to enforce the specific
performance of this Agreement by the Executive through both temporary and
permanent injunctive relief, and through any other appropriate equitable relief,
without the necessity of showing or proving actual damages. In case any of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, including without limitation
geographic scope, duration or functional coverage, any such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had been limited or modified (consistent with its
general intent) to the extent necessary to make it valid, legal and enforceable,
or if it shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision or part of a provision, this Agreement shall be
construed as if such invalid, illegal or unenforceable provision or part of a
provision had never been contained in this Agreement.
14. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or mailed by certified or registered mail (return receipt
requested) as follows:
To the Company:
Sheridan Healthcare, Inc.
4651 Sheridan Street, Suite 200
Hollywood, FL 33021
Attn: General Counsel
(954) 964-2611
Fax: (954) 987-8359
With copies to:
Vestar Capital Partners III, L.P.
Att: Robert L. Rosner
245 Park Avenue
41st Floor
New York, NY 10167
(212) 351-1600
Fax: (212) 808-4922
and,
Brian D. Robbins, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
13
13
New York, NY 10017
(212) 455-2000
Fax: (212) 455-2502
To the Executive:
Michael F. Schundler
2493 Poinciana Drive
Weston, FL 33326
(954) 349-7041
or to such other address of which any party may notify the other parties as
provided above. Notices shall be effective as of the date of such delivery or
mailing.
15. Miscellaneous. This Agreement shall be governed by and construed
under the laws and solely in the courts of the State of Florida without regard
to the conflicts of law provisions thereof, and shall not be amended, modified
or discharged in whole or in part except by an agreement in writing signed by
each of the parties hereto. The failure of any of the parties to require the
performance of a term or obligation or to exercise any right under this
Agreement or the waiver of any breach hereunder shall not prevent subsequent
enforcement of such term or obligation or exercise of such right or the
enforcement at any time of any other right hereunder or be deemed a waiver of
any subsequent breach of the provision so breached, or of any other breach
hereunder. This Agreement shall inure to the benefit of successors of the
Company by way of merger, consolidation or transfer of all or substantially all
of the assets of the Company, shall be binding upon the heirs, executors,
administrators and legal representatives of the Executive and may not be
assigned by the Executive. This Agreement supersedes all prior understandings
and agreements among the parties relating to the subject matter hereof
including, without limitation, the Prior Agreements. The Company may withhold
from any amounts payable under this Agreement such Federal, state and local
taxes as may be required to be withheld pursuant to applicable law or
regulation.
16. Jurisdiction; Venue; Inconvenient Forum; Jury Trial. ANY SUIT,
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, OR ANY JUDGMENT ENTERED BY
ANY COURT IN RESPECT TO THIS AGREEMENT SHALL BE BROUGHT IN THE COURTS OF THE
STATE OF FLORIDA OR IN THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
FLORIDA IN BROWARD COUNTY, AND THE PARTIES ACCEPT THE EXCLUSIVE PERSONAL
JURISDICTION OF THOSE COURTS FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING.
IN ADDITION, THE PARTIES KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR LATER HAVE
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY JUDGMENT ENTERED BY ANY COURT BROUGHT IN THE
STATE OF FLORIDA, AND FURTHER, KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE
ANY CLAIM THAT ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE STATE OF FLORIDA
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY WAIVES ALL
14
14
RIGHTS TO ANY TRIAL BY JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THIS
AGREEMENT.
IN WITNESS WHEREOF, the parties have executed this Agreement
under seal as of the date first set forth above.
SHERIDAN HEALTHCARE, INC.
By: /s/ Mitchell Eisenberg, Pres.
-----------------------------
EXECUTIVE:
/s/ Michael F. Schundler
-------------------------
MICHAEL F. SCHUNDLER