EXHIBIT 10.7
EMPLOYMENT AGREEMENT BETWEEN DOCTOR'S CARE, P.A.
AND
MICHAEL STOUT, M.D.
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STATE OF SOUTH CAROLINA )
) EMPLOYMENT AGREEMENT
COUNTY OF LEXINGTON )
THIS AGREEMENT made and entered into this 1st. day of November, 19 1995,
between Doctor's Care, P. A. (hereinafter "Employer"), a South Carolina
Professional Association with its principal office in Columbia, South Carolina,
and Michael Stout, (hereinafter "Employee").
WHEREAS, Employer is a South Carolina Professional Association and wishes
to employ the Employee to render services for it; and,
WHEREAS, Employee is a licensed physician in South Carolina and desires and
is willing to become a professional employee of Employer, in accordance with the
following terms, conditions, and provisions:
NOW, THEREFORE, for and in consideration of the promises herein and other
valuable consideration, it is agreed that:
(1) Employment Term. Subject to the provisions for termination as
hereinafter provided, the term of this Agreement shall be five
(5) year beginning November 1, 19 95 . After the initial five
(5) year term, this Agreement shall be renewable from year to
year upon the mutual agreement of both parties.
(2) Duties.
A. Other than Employee's duties as an Employee of UCI Medical
Affiliates of South Carolina, Inc., Employee shall devote
his full-time professional skill and attention to the
performance of services in the practice for the benefit of
Employer at Doctor's Care Beltline or such other clinic
within the Columbia, South Carolina area as shall be
reasonably assigned by Employer. Employee's duty schedule
shall be determined by Employer and Employee shall provide
such emergency evening and weekend coverage as shall be
needed and be reasonably assigned to Employee by Employer.
B. Employee shall not engage in any outside professional
activities involving the personal services of Employee and
yielding a financial return without Employer's prior
written consent. However, nothing stated herein shall
restrict or prevent employee from personally and on
Employee's own account, investing in stocks, bond
securities, commodities, real estate, or other forms of
investments.
C. Employee will actively and industriously pursue his
profession in Employer's interest, will faithfully adhere
to the principles and ethics of the profession, and will
carefully avoid any and all personal acts, habits and
usages which might injure in any way, directly or
indirectly,
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Employee's professional reputation or that of
any other Employee of Employer, or which might otherwise
be detrimental to any interest of Employer.
D. Employee hereby agrees that all fees received or collected
as a result of professional services rendered by Employee,
together with all other emolument, e.g., witness fees,
report fees, speaker feets, etc., shall be the property of
Employer. Accordingly, Employee acknowledges that
Employee's employment renders him an agent and servant of
Employer and does not confer upon Employee any ownership
interest in or professional claim upon any fees charged by
Employer for Employee's services, whether said fees are
collected during Employee's employment or after
termination thereof.
(3) Compensation.
(A) Regular Compensation. For all services rendered under
this Agreement, Employer shall pay the Employee an
initial salary of One Hundred Sixty Thousand Dollars
($ 160,000.00) per year, payable bi-weekly.
(B) Changes in Compensation. From time to time, increases
in the Employee's salary may be made, said increases
to be reflected on the "Schedule of Compensation"
attached hereto and made a part hereof.
(C) Bonuses. Employer may from time to time review
Employee's compensation arrangement with respect to
the payment of a bonus for superior performance;
provided however that the decision to make bonus
payments, if any, shall be at the sole discretion of
Employer.
(4) Fringe Benefits. As further consideration for the performance
by Employee of the services set forth herein, Employee shall
be eligible on a non-discriminatory basis for participation in
any tax qualified deferred compensation plan maintained by
Employer and also for inclusion in any group-term life
insurance plan maintained by Employer. However, Employee
understands that the decision to maintain any such plans shall
be in sole discretion of Employer.
(A) Health Insurance Coverage. Employer, shall provide for
Employee such health coverage as provided to other employees
of Doctor's Care, P. A. Family coverage is available on
the same basis as is provided to other senior
executives of Employer or UCI Medical Affiliates, Inc.
(B) Group Term Life Insurance & Group Disability
Insurance. Employer, at its cost, shall furnish such
life and disability insurance for Employee as it,
from time to time, may provide to other Employees.
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(5) Vacation and Professional Meetings. Employee shall be entitled
to four weeks paid vacation. All above leave shall be taken on
reasonable prior notice and at such time or times as shall be
agreed to by Employer and that does not interfere with proper
operation of the Practice. In addition, Employee is entitled
to one week of paid leave for Continuing Medical Education.
(6) Inability to Perform Essential Services. If Employee is unable
to perform the essential professional services contemplated by
this agreement as a result of illness or incapacity, Employee
shall continue to receive those benefits which become payable
to Employee under contracts, if any, provided for Employee by
Employer. Anything to the contrary contained herein
notwithstanding if Employee is not able to resume the
performance of such essential professional duties within
ninety (90) days of the date Employee was first unable to
perform such duties, Employee may be deemed, at the sole
discretion of the Employer, to have terminated this Agreement
and Employer shall have the right to pursue all remedies set
forth herein related to such a termination.
(7) Equipment and Expenses.
(A) Facilities. Employer shall provide and pay for
suitable office space and facilities, furniture,
fixtures, equipment, supplies, employees and
assistants necessary and appropriate for the proper
performance of the duties of Employee.
(B) Professional Liability Insurance. Employer shall either pay or, upon
proof of payment by the Employee, reimburse the Employee for the cost of
Professional Liability (malpractice) Insurance covering the Employee for
services provided hereinunder for claims as follows: the first One Hundred
Thousand Dollars ($100,000) in coverage shall be through the South Carolina
Medical Malpractice Joint Underwriters Association ("JUA"); the excess coverage
shall be provided through the South Carolina Patients' Compensation Fund
("PCF"). Employee understands that the amount of coverage provided by JUA and
PCF may not be adequate to protect Employee against all claims and that the
responsibility of securing additional insurance coverage, if any, is solely that
of Employee.
(C) License Fees, Memberships and Dues. Employer shall either pay or, upon
proof of payment by the Employee, reimburse up to $300, to Employee for the cost
of professional license fees, and the cost of reasonable professional membership
and dues.
(D) Documentation. Employee agrees to submit to Employer
the documentation as may be necessary to substantiate
the deductibility of the foregoing expenses for
income tax purposes.
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(8) Employee Death. If Employee dies while this Agreement is in
full force and effect, Employer shall pay to Employee's named
beneficiary, or in default of the named beneficiary to
Employee's estate, all salary accrued but unpaid through the
pay period which includes the date of Employee's death.
(9) Patients and Records. Employer and Employee agree that all
patient lists, records, and charts are the property of
Employer, and that upon termination of this Agreement,
Employee shall not be entitled to receive any patient lists,
records, or charts whether or not the Employee shall have seen
or attended any patient with which such terms are covered;
provided however, that record keeping for patients treated by
Employee shall be the sole responsibility of Employee, and
Employee shall complete all such charts and records for such
patients in accordance with professional standards.
(10) Policy Decisions. It is understood that Employer shall have
the sole and exclusive right of management over the practice,
including without limitation, the determination of the
professional standards to be observed, the determination of
the fees to be charged, and the determination of the office
hours to be maintained.
(11) Conditions of Termination. Physician understands and agrees that cause
for termination of employment includes, but
is not limited to the following:
(A) At any time by mutual agreement in writing between
Employer and Employee.
(B) At the loss or the suspension of the right to conduct
the practice of medicine by Employee, or the loss, or
suspension of any right or privilege necessary or
incident thereto, or the loss, suspension, or
limitation of Employee's Controlled Substance
license, or if Employee performs any negligent or
intentional act which directly or indirectly damages
the reputation or property of Employer.
(C) At the death of Employee, provided however, that the
provisions of this Agreement regarding Employee's
death shall be performed by the Employer.
(D) At the option of the Employer, upon thirty (30) days
prior written notice for "good cause", which shall
mean failure of Employee to provide the agreed duties
hereunder or willful violation by Employee of any of
the terms of this Agreement.
(E) Upon a party hereto failing to perform any covenant
or condition hereunder within thirty (30) days after
written notice and demand, the non-defaulting party
may terminate this Agreement.
(F) Upon the bankruptcy, insolvency or assignment for the
benefit of the creditors of Employer, or any other
type of voluntary or
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involuntary creditors proceeding
involving the property of Employer.
(G) Upon Employee's failure to satisfactorily comply with
accepted standards of medical practice and
professional conduct.
(H) If Employee engages in the abuse of drugs,
intoxicants or other mood-altering substances or if
Employee treats or attempts to treat a patient while
under the influence of drugs, intoxicants or other
mood-altering substances.
(I) Upon thirty days notice, at the option of the
Employer if Employee does not satisfy the
credentialing requirements of the managed care and
other plans with which Employer participate.
(12) First Year. For a period of twelve (12) months after execution
of this Agreement, either party shall have the right to
terminate the Agreement for any reason or for no reason upon
sixty day written notice of the other party. In the event the
Employer exercises its rights under this provision, the
restrictive covenants set forth in paragraphs 13B, 13C and 13D
shall be null and void.
(13) Non-Disclosure of Information. Employee shall not, at any time
after the date hereof, directly or indirectly, divulge or
disclose for any purpose whatsoever any confidential
information that has been developed or obtained by, or
disclosed to, Employee by Employer at any time or after the
date hereof (exclusive of such information as is in the public
domain). Employee acknowledges that such confidential
information is of a special and unique nature and value
relating to matters of Employer's business, including, without
limitation, Employer's patents, copyrights, proprietary
information, trade secrets, trademarks, systems, procedures,
manuals, confidential reports, records, operational expertise,
locations and lists of clients and potential clients, pricing
information and lists, marketing materials and methods, the
nature and type of services rendered by Employer, the methods
used and preferred by Employer's clients, and the fees paid by
them (all of which are deemed for all purposes to be
confidential, proprietary, and trade secrets of Employer). Any
confidential information in Employee's possession shall be
returned to Employer upon any termination or expiration of
this Agreement.
(14) Covenants Against Competition.
A. Exclusivity. For the period of Employee's retention
by Employer, Employee will not, directly or
indirectly, plan, operate, organize or otherwise be
involved in any primary or urgent care facility of a
type similar to those operated by Employer other than
on behalf of Employer. Employee further agrees that
so long as this Agreement is in effect, Employee will
not undertake the planning or organizing of any
business activity competitive with the work Employee
performs for Employer.
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B. Restrictive Covenant. In addition to (but not in limitation of) the
restrictions of Section 14 (A), for the period of Employee's retention by
Employer plus a period of two (2) years after termination of this Agreement,
Employee shall not, directly or indirectly engage in, or assist another person
or entity to engage in, any sales of products and services furnished (or similar
business operated) by Employer in competition with Employer within a five (5)
mile radius of the primary Clinic maintained, managed or otherwise controlled by
Employer at which Employee performed services during the term of Employee's
retention by Employer (collectively, the "Territory").
C. Ownership. In addition to (but not in limitation of) the restrictions of
Sections 14 ^A and B, for the period of Employee's retention by Employer,
Employee shall not, directly or indirectly, own an equity interest (other than
as the holder for investment purposes only of up to 2% of the outstanding
capital stock of any corporation which is publicly traded on a national stock
exchange or the NASDAQ National Market System, so long as Employee is not a
controlling person of, or a member of a group that controls, such corporation
and Employee is not otherwise affiliated in any capacity with such corporation)
in any entity or enterprise conducting operations in the Territory which is
competitive with Employer's business activities.
D. Employees. In addition to (but not in limitation of) the restrictions of
(Sections A, B and C), for the period of Employee's retention by Employer, plus
a period of two years after termination of this Agreement, Employee shall not,
directly or indirectly, solicit or in any manner attempt to solicit or induce
any person employed by, or an agent of, Employer to terminate such person's
association or contract of employment or agency, as the case may be, with
Employer.
(15) Remedy for Violation. Employer and Employee agree that
remedies at law are inadequate and that Employer may seek
injunctive relief in the event of violation of this covenant.
In addition, it is agreed that the actual damages occasioned
by any breach of the covenants by Employee not to solicit
and/or perform services except as provided above will not be
susceptible to exact determination and Employer shall be
entitled to liquidated damages in an amount equal to three (3)
times the gross fees billed by Employer to any such patients
solicited or treated in violation of this covenant during the
two (2) year (twenty four (24) month) period immediately
preceding the violation of this covenant.
(16) Binding Agreement. This Agreement shall be binding on the parties,
their distributees, legal representatives, successors and assigns.
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(17) Notices. All notices under this Agreement shall be in writing
and shall be served by personal service or registered mail,
return receipt requested. Notice by mail shall be addressed to
each party at such party's last known address.
(18) Cost of Enforcement. Employer and Employee each hereby agree
that should they default in any of the obligations contained
herein, the defaulting party shall pay all costs and expenses,
including a reasonable attorney's fee which may arise or
accrue from enforcing this Agreement or in pursuing any remedy
provided by the statues of the State of South Carolina,
whether such remedy is pursued by filing a suit or otherwise.
(19) Captions. Captions and paragraph headings used herein are for
convenience only and are not a part of this Agreement and shall not be used in
construing it.
(20) Governing Law. This Agreement shall be governed by the Laws of the
State of South Carolina.
(21) Waiver. Waiver by either party of a breach or violation of any
provision of this Agreement shall not operate as or be
constrained as a waiver of any subsequent breach thereof.
(22) Severability. If any provision of this Agreement, or portion
thereof, shall be declared invalid or unforceable, the
remainder of this Agreement shall continue in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
set forth above.
DOCTOR'S CARE, P. A.
EMPLOYER: By: /s/ M.F. McFarland, III, M.D.
M. F. McFarland, III,
Its: President
EMPLOYEE: /s/ Michael Stout, M.D.
Michael Stout, MD
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SCHEDULE OF COMPENSATION
Date Change Effective New Annual Salary Employer Employee
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