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EXHIBIT
10.10
Execution Copy
IPC The Hospitalist
Company
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (the “ Agreement ”),
dated as of June 17, 2008 and effective as of January 11,
2008 (the “ Effective Date ”), by and between
IPC THE HOSPITALIST COMPANY, INC. , a Delaware corporation
(the “ Company ”), and ADAM SINGER, M.D.
(“ Employee ”) amends, restates and supersedes
that certain Employment Agreement, dated as of June 1, 2005,
between In-Patient Consultants Management, Inc, which is the former
name of the Company, and the Employee (the “ Prior
Agreement ”).
BACKGROUND
INFORMATION
A. The Company desires to
encourage the continuity of its management and secure for its
benefit the skills of individuals who provide unique value to its
operations;
B. The Company recognizes
that Employee possesses certain skills and expertise that give him
significant value to the Company, the loss of which cannot be
reasonably or adequately replaced;
C. The Company desires to
retain these skills for the benefit of the Company and to provide
Employee with compensation commensurate with such skills;
and
D. Employee and the Company
desire to enter amend, restate and supersede the Prior Agreement on
the terms and conditions contained herein.
STATEMENT OF
AGREEMENT
NOW, THEREFORE, in
consideration of the mutual covenants and agreements contained
herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
BASIC
EMPLOYMENT
1.1 Employment
. The Company agrees to employ Employee, and Employee hereby
agrees to be employed by the Company, to perform the duties
described below for the compensation and duration specified in this
Agreement, as it may be amended from time to time, subject to and
upon all the terms and conditions set forth herein.
1.2 Term . The
term of employment under this Agreement shall commence as of the
Effective Date, and continue in full force and effect after the
Effective Date for a period of three (3) years
(the “ Term ”); provided, however, that the
Term shall automatically be extended for successive one
(1) year periods unless either party provides the other with
at least thirty (30) days advance written notice of its
intention not to extend the Term. Each twelve
(12) month
period during the Term or any extension
shall be referred to herein as a “ Contract Year
.” Notwithstanding anything to the contrary contained herein,
the Term will terminate upon termination of Employee’s
employment by the Company or by Employee pursuant to Article III
below. Upon the Effective Date, all previously existing employment
agreements or arrangements, including the Prior Agreement, between
Employee and the Company (other than this Agreement) shall
terminate automatically and be of no further force or
effect.
1.3 Duties and
Powers .
1.3.1 Service with the
Company . During the Term, Employee shall (i) serve as
the Company’s Chief Executive Officer and Chief Medical
Officer and shall report directly to the Board of Directors of the
Company (the “ Board ”), (ii) have such
responsibilities, duties and authorities, and render such services
for the Company, that Employee has or renders for the Company as of
the Effective Date, and (iii) have such other
responsibilities, duties and authorities, and render such other
services for the Company, that are consistent with Employee’s
position as Chief Executive Officer and Chief Medical Officer, as
the Board may from time to time reasonably direct.
1.3.2 Service with
Subsidiaries and other Affiliates. During the Term,
Employee shall (i) have such responsibilities, duties and
authorities, and render such services for the Company’s
subsidiaries and other affiliates that (x) Employee renders
for such subsidiaries and other affiliates as of the Effective Date
and (y) that are consistent with Employee’s position as
Chief Executive Officer and Chief Medical Officer of the Company,
as the Board may from time to time reasonably direct; and
(ii) at the reasonable request of the Board, serve as the
President and Chief Executive Officer and director of each
subsidiary or other affiliate of the Company; provided that
Employee shall not be entitled to any additional compensation for
serving as an officer or director of the Company’s
subsidiaries and other affiliates.
1.3.3 Performance of
Duties. Employee will devote his best efforts, energies and
abilities and his full business time, skill and attention (except
for permitted vacation periods and reasonable periods of illness)
to the business and affairs of the Company, its subsidiaries and
other affiliates and shall perform the duties and carry out the
responsibilities assigned to him, to the best of his ability and in
a diligent, trustworthy, businesslike and efficient manner.
Employee acknowledges that his duties and responsibilities will
require his full-time business efforts and agrees that during the
Term he will not engage in any other business activity or have any
business pursuits or interests, except activities or interests
which do not conflict with the business of the Company, its
subsidiaries and other affiliates and do not interfere with the
performance of Employee’s duties hereunder; provided
that Employee shall be permitted to (i) continue to serve on
civic and charitable boards and committees (provided that in
January of each year hereunder, Employee furnishes the Board with a
list of the civic and charitable boards and committees on which
Employee is then serving), and (ii) manage his personal
investments and affairs, in each case so long as the activities
referred to in clauses (i) and (ii) above otherwise
comply with the terms and conditions of this Agreement, including
the provisions of this Section 1.3.3 ; provided
further that, other than the positions and entities listed
in clause (i) above, Employee shall not, without the prior
written consent of the Board, be permitted to serve on any for
profit entity’s board of directors or committee or hold any
similar position with respect to any such entity.
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1.4 Compensation
. During the Term, the Company agrees to pay to Employee an
initial base salary at the rate of $448,000 per annum, commencing
on the date hereof (the “ Base Salary ”). The
Base Salary shall be payable in arrears in substantially equal
payments at such frequency as is the custom and practice of the
Company and on at least a monthly basis. During the Term, the Base
Salary shall be subject to annual review by the compensation
committee of the Board (the “ Committee ”), and
the Base Salary may be increased by the Committee in its sole
discretion, but the Base Salary (including any previously approved
increase) may not be decreased as long as Employee remains a
full-time employee of the Company.
1.5 Bonus
Compensation . During the Term, in addition to the Base
Salary, Employee shall be eligible to receive an annual
performance-based cash bonus (“ Annual Bonus ”)
during each Contract Year with respect to each fiscal year of the
Company (subject to Section 4.2 ). The Annual Bonus
shall be based upon quantitative and qualitative performance
targets as established by the Committee in it sole discretion in
accordance with the Company’s annual bonus plan;
provided , that Employee’s Annual Bonus payable for
achievement of the target level of performance designated by the
Committee shall be not less than fifty percent (50%) of Base
Salary as in effect at the time the Committee establishes the
Annual Bonus. The Committee may, in its discretion, specify amounts
of Annual Bonus payable above or below the designated target amount
for achievement of performance at specified levels above or below
the designated target level of performance. The Annual Bonus shall
be payable to Employee at the same time bonuses are paid to other
executive officers in accordance with the Company’s annual
bonus plan, but in no event later than March 15 of the
calendar year following the calendar year in which the Annual Bonus
is not subject to a substantial risk of forfeiture within the
meaning of Section 409A of the Internal Revenue Code of 1986,
as amended (“ Section 409A ”).
1.6 Working Conditions;
Benefits .
1.6.1 Vacation
. Employee shall be entitled to twenty (20) business days
of paid vacation per calendar year. Any unused vacation days shall
accrue from year to year up to a maximum of thirty-five
(35) days accrued at any one time. Employee shall be paid in
cash, calculated on the basis of the per diem Base Salary, for all
vacation days not used at the end of a calendar year, up to a
maximum of ten (10) days; provided that such cash
payment shall be made no later than March 15 of the calendar
year following the calendar year in which such vacation days have
been earned but unused.
1.6.2 Insurance and
Other Benefits . During the Term, Employee shall be
eligible to participate in and, if eligible, to receive employee
and dependent group medical, dental, disability, life insurance,
401(k) and such other benefits made available by the Company in
accordance with the Company’s policies and procedures
established from time to time, or, if there is no policy or
procedure in place at any applicable time, then on the same basis
as other senior management of the Company.
1.6.3 Equity
Compensation . During the Term, Employee shall be eligible
to receive, at the discretion of the Committee, grants of stock
options and/or other equity under the Company’s 2007
Incentive Compensation Plan or any such other incentive
compensation plan that may be maintained by the Company from time
to time.
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1.6.4 Expenses
. During the Term, Employee shall be entitled to reimbursement
for all approved reasonable travel and other business expenses
incurred by Employee in connection with his services to the Company
pursuant to the terms of this Agreement. All business expenses for
which Employee seeks reimbursement from the Company shall be
adequately documented by Employee in accordance with the
Company’s procedures covering expense reimbursement and in
compliance with the regulations of the Internal Revenue
Service.
1.6.5 Facilities
. During the Term, the Company shall provide Employee with a
private office, computer, secretarial support, telephone, cellular
telephone and service, facsimile, reprographic and other support
services and facilities commensurate with Employee’s
position.
ARTICLE II
PROPRIETARY AND
CONFIDENTIAL INFORMATION
2.1 The Company’s
Proprietary, Confidential and Trade Secret Information .
Employee may have access to or otherwise obtain knowledge of
confidential information of the Company and/or its affiliates
(whether such affiliation is through a management agreement between
the Company and/or another entity or otherwise) (“
Affiliates ”), including, without limitation, the
Company’s and Affiliates’ selling and servicing methods
and business techniques, software programs, policies and
procedures, business records, training, service and business
manuals, promotional materials, training courses and other training
and instructional materials, vendor and product information,
customer and prospective customer lists, other customer and
prospective customer information, information concerning the
Company’s and Affiliates’ current or any future or
proposed work, services, or products, the facts that any such work,
services, or products are planned, under consideration, or in
production, as well as any descriptions thereof, and other business
information (“ Confidential Information ”).
Confidential Information shall not include information that
Employee can demonstrate: (i) was publicly available at the
time of disclosure, or later became publicly available through no
act or omission of the Employee; (ii) was rightfully in
Employee’s possession prior to Employee’s date of
employment by the Company; or (iii) was rightfully received by
Employee from a third party without any obligation of
confidentiality.
Employee acknowledges that (a) all
such Confidential Information, whether reduced to writing,
maintained on any form of electronic media, or maintained in the
mind or memory of Employee and whether compiled by the Company, its
Affiliates and/or Employee, derives independent economic value from
not being readily known to or ascertainable by proper means by
others who can obtain economic value from its disclosure or use;
(b) reasonable efforts have been made by the Company and its
Affiliates to maintain the secrecy of such information;
(c) all Confidential Information and materials have and will
be made available to Employee only for the limited purpose of the
performance of Employee’s duties as an employee; (d) all
Confidential Information of the Company and its Affiliates has been
developed or compiled by the Company and its Affiliates through
substantial expenditures of time, effort and money and constitutes
valuable and unique property of the Company and its Affiliates; and
(e) all Confidential Information and materials are the sole
property of the Company or its Affiliates. Any retention and use of
such information by Employee during Employee’s employment
with the Company (except in the course of performing
Employee’s duties and obligations hereunder) or after the
termination of Employee’s employment shall constitute a
misappropriation of the Company’s trade secrets and
Confidential Information and unfair competition.
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The Company’s and its
Affiliates’ business is the development and implementation of
programs for the management of comprehensive hospital-based care
for patients within structural in-patient programs, the provision
of hospitalist and associated services throughout the United States
and the development and utilization of automated and electronic
work tools and processes for hospital-based healthcare providers.
Employee acknowledges and agrees that the development of
relationships between the Company or its Affiliates and its
customers and clients entails great expense and difficulty and
requires frequent personal contact with such customers and clients,
that the development of the Company’s and its
Affiliates’ staff and employees entails great difficulty and
expense and extensive training and supervision of such staff and
employees, and that but for Employee’s employment by the
Company, Employee would have no contact with or knowledge of the
identities, addresses and other contact information pertaining to
the Company’s or its Affiliates’ customers, clients,
staff, or other employees, all of which constitute part of the
Company’s and its Affiliates’ Confidential
Information.
Accordingly, and without diminishing in
any way the rights and remedies of the Company under any applicable
law and regulation, Employee will keep in strict confidence, and
will not, directly or indirectly, at any time during or after
Employee’s employment with the Company, disclose, furnish,
disseminate, make available or, except in the course of performing
Employee’s duties of employment, use any Confidential
Information or other trade secrets or confidential business and
technical information of the Company or its Affiliates.
Employee expressly authorizes the
Company to notify any person, firm, entity, hospital, medical
group, medical provider or corporation employing Employee in the
future, or evidencing an intent to employ Employee in the future,
of the existence and provisions of this Agreement.
Employee acknowledges that
Employee’s use of Confidential Information regarding the
Company’s accounts, clients, customers, staff and/or
employees by Employee during or after the Term of Employee’s
exclusive and non-exclusive employment by the Company or
consultation with the Company, except as is necessary in the course
and scope of performing Employee’s job duties for the
Company, will materially and adversely affect the Company, and all
of its shareholders, economically and otherwise, and constitutes
unfair competition. Accordingly, as an additional inducement to the
Company to enter into the Agreement with the Employee, Employee
agrees that:
2.1.1 Use of Trade
Secrets and Confidential Information . During and after the
Term of Employee’s exclusive or non-exclusive employment by
the Company or consultation with the Company, except as is
necessary in the course and scope of performing Employee’s
job duties for the Company, Employee will not use the
Company’s trade secrets or Confidential Information, directly
or indirectly, alone or in concert with any person or entity, for
Employee’s own account or for, or on behalf of, any other
person or entity, to solicit any business from accounts, clients or
customers of the Company or its Affiliates who have dealt with the
Company or its Affiliates at any time during the Term. Nothing
in this Section 2.1.1 shall be deemed to prohibit
Employee from accepting as a patient anyone to whom Employee
provided medical services during the Term who affirmatively
requests that Employee continue to provide such medical
services .
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2.1.2 Non-Solicit
. During the Term and for a period of two (2) years
following expiration or termination of the Term, regardless of the
reason for the termination, Employee will not directly or
indirectly solicit or induce or attempt to solicit or induce any
officer, director, employee, sales representative, agent or
consultant of the Company or its Affiliates to terminate or
adversely alter their employment, representation or other
association with the Company or its Affiliates. In addition, at no
time after Employee leaves employment with the Company will
Employee seek to obtain or misappropriate any of the
Company’s trade secrets or Confidential Information from any
current or former Company employee or consultant.
2.1.3 Disclosure
. In the event that Employee is requested or required in any
proceeding to disclose any Confidential Information, Employee
shall: (i) provide the Company with prompt written notice of
such request(s) and the documents or information requested so that
the Company or its Affiliates may seek an appropriate protective
order and/or waive Employee’s compliance with the provisions
of this Article II ; and (ii) consult with the Company
or its Affiliates as to the advisability of taking legally
available steps to resist or narrow such request. It is further
agreed that, if in the absence of a protective order or the receipt
of a written waiver from the Company or its Affiliates, the
Employee is nonetheless, in the opinion of his legal counsel,
compelled to disclose any of the Confidential Information or else
stand liable for contempt or suffer other censure or penalty,
Employee agrees to disclose to such tribunal only such Confidential
Information as is legally required, which disclosure shall be
without liability hereunder; provided, however, that Employee shall
give the Company written notice of the Confidential Information to
be so disclosed as far in advance of its disclosure as is
practicable and Employee shall request, from the parties to whom
the Confidential Information is disclosed, assurance that
confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as the Company or
its Affiliates designates.
2.2 Return Of
Property . Employee agrees that upon termination of
Employee’s employment with the Company, for any reason,
Employee shall promptly return to the Company, in good condition,
all property of the Company or its Affiliates, including, without
limitation, the originals and all copies of any materials which
contain, reflect, summarize, describe, analyze or refer or relate
to any Confidential Information. In the event that such items are
not so returned, the Company or its Affiliates will have the right
to charge Employee for all reasonable damages, costs,
attorneys’ fees and other expenses incurred in taking,
removing and/or recovering such property.
2.3 Assignment Of
Inventions . Employee hereby assigns and agrees to assign
to the Company, its Affiliates, successors, assigns or nominees,
all of Employee’s right, title and interest in and to any and
all “ Inventions ,” which include any and all
discoveries, developments, designs, inventions, improvements,
processes, techniques, business records, software programs,
training, service and business manuals, promotional materials,
training courses and other results and proceeds of Employee’s
services, regardless of whether subject to patent, registration,
trade mark or copyright protection or protection under similar
statutes, made, conceived, suggested, either solely or jointly with
others, by Employee while in the Company’s employ, whether in
the course of employment with the use of the Company’s time,
material or facilities or that is in any
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way within or related to the existing or
contemplated scope of the Company’s or its Affiliates’
business or result from the use of property owned, leased or
contracted for by the Company. Inventions shall also include
anything that derives actual or potential economic value from not
being generally known to the public or to other persons who can
obtain economic value from its disclosure or use. Any Inventions
directly derivative of the Company’s or its Affiliates’
planned or existing products or services, developed or under
development during Employee’s employment and made, conceived
or suggested by Employee, either solely or jointly with others,
within one (1) year following termination of Employee’s
employment under the Agreement, or any successor agreement shall be
irrebuttably presumed to have been so made, conceived or suggested
in the course of such employment with the use of the
Company’s time, materials and/or facilities. All work papers,
reports, documentation, drawing, photographs, negatives, tapes and
masters therefor, prototypes, other tangible items and materials,
and all other results and proceeds of Employee’s services
hereunder, made, conceived, or suggested, either solely or jointly
with others, by Employee while in the Company’s employ,
whether in the course of employment with the use of the
Company’s time, material or facilities or in any way within
or related to the existing or contemplated scope of the
Company’s or its Affiliates’ business, including,
without limitation, and such results and proceeds directly
derivative of the Company’s or its Affiliates’ planned
or existing products or services, developed or under development
during Employee’s employment and made, conceived or suggested
by Employee, either solely or jointly with others, within one
(1) year following termination of Employee’s employment
under the Agreement or any successor agreements, and including,
without limitation, any and all such items generated and maintained
on any form of electronic media, constitute specially commissioned
works made for hire as defined in the United States Copyright Act,
which works and the copyrights therein and thereto shall be the
property of the Company or its Affiliates as the author thereof. To
the extent that California law applies to this Agreement, this
paragraph does not apply to any invention that qualifies fully
under the provisions of Section 2870 of the California Labor
Code, the text of which is reproduced in Section 2.6 ,
and Employee agrees and acknowledges that Employee will bear the
full burden of proving to the Company that an Invention qualifies
fully under Section 2870.
Upon request by the Company with respect
to any such Inventions, Employee agrees to execute and deliver to
the Company, at any time during or after Employee’s
employment, such further documents as the Company may require in
connection with the rights, privileges and property granted to the
Company or its Affiliates in the preceding paragraph (the “
Rights ”), when so requested, at the expense of the
Company, but without further or additional consideration. In the
event the Company is unable, after reasonable effort, to secure
Employee’s signature on any document(s) required in
accordance with the provisions of this Article II , Employee
irrevocably designates the Company or its Affiliates, or their
nominee, as Employee’s agent or attorney-in-fact to act on
Employee’s behalf, with the right, but not the obligation, to
execute and deliver all such further documents for the purposes
aforesaid. Employee also irrevocably designates the Company or its
Affiliates, or their nominee, as Employee’s agent or
attorney-in-fact, with the right but not the obligation, for the
sole benefit of the Company or its Affiliates, and at the
Company’s or its Affiliates’ expense, to bring,
prosecute, defend and appear in suits, actions, and proceedings of
any nature under or concerning all such Rights; and to take such
action as the Company or its Affiliates may deem advisable to
enforce, protect, and/or defend any of the Rights; and to litigate,
collect and receive all damages arising from any infringement of
any such Rights. Any such action may be taken by the Company or its
Affiliates in the name of Employee or otherwise, and the Company or
its Affiliates may join Employee as a plaintiff or defendant in any
such suit, action or proceeding.
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Employee further acknowledges that the
foregoing assignment of rights is made in consideration of, and is
adequately supported by good, valuable and sufficient consideration
including but not limited to the agreement of the Company to employ
Employee.
2.4 Remedies .
Employee acknowledges and agrees that the provisions of this
Article II are reasonable and necessary to protect the
legitimate professional and business interests of the Company and
its Affiliates and that any breach or violation hereof would result
in irreparable damage and injury to the Company or its Affiliates
with the extent and the amount of the damages and injury being
difficult, if not impossible, to ascertain. Employee acknowledges
and agrees that such damages and injury cannot be adequately
compensated with monetary damages, and Employee further agrees that
the Company or its Affiliates may seek and obtain injunctive relief
against the breach or threatened breach of any of the provisions of
this Article II and/or specific enforcement of such
provisions in addition to any other legal or equitable remedies
which may be available and that are not inconsistent with the
Dispute Resolution Procedure in Section 5.1 , Employee
agrees to waive any requirement for the securing or posting of any
bond in connection with such remedy. Should litigation be
instituted to enforce any provision of this Article II , the
prevailing party will be entitled to recover all costs incurred in
connection with such action, including without limitation
reasonable legal fees, cost of investigation and cost of
settlement; provided , however , that in the case of
recovery by the Employee, such recovery shall only be allowed for
amounts incurred during the life time of the Employee, the amount
of such recovery provided during one taxable year shall not affect
the amount of recovery during any other taxable year, such recovery
may not be liquidated, exchanged or substituted for other forms of
compensation to Employee, and any amounts paid with respect to such
recovery will be paid no later than the last day of the
Employee’s taxable year following the taxable year in which
he incurred the expense giving rise to such
recovery.
2.5 Reasonableness of
Obligations . Employee acknowledges and agrees that
Employee’s obligations under this Article II are
reasonable in the context of the nature of the Company’s and
its Affiliates’ business and the competitive injuries likely
to be sustained by the Company or its Affiliates if Employee were
to violate such obligations. Employee further acknowledges that the
Agreement is made in consideration of, among other things, this
Article II and is adequately supported by good, valuable and
sufficient consideration, including but not limited to the
agreement of the Company to employ Employee. Employee specifically
agrees that the provisions of this Article II shall survive
the termination or expiration of the Agreement.
2.6 California Labor
Code Section 2870 .
2.6.1 Any provision in an
employment agreement which provides that an employee shall assign,
or offer to assign, any of his or her rights in an invention to his
or her employer shall not apply to an invention that the employee
developed entirely on his or her own time without using the
employer’s equipment, supplies, facilities, or trade secret
information except for those inventions that either:
(a) Relate at the time of
conception or reduction to practice of the invention to the
employer’s business, or actual or demonstrably anticipated
research or development of the employer.
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(b) Result from any work
performed by the employee for the employer.
2.6.2 To the extent a
provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being
required to be assigned under Section 2.6.1 , the
provision is against the public policy of California and is
unenforceable.
ARTICLE III
TERMINATION
3.1 Termination
. The Term and Employee’s employment (a) shall
automatically terminate immediately upon Employee’s death,
(b) may be terminated at any time by the Board as set forth
herein for Cause (as defined in Section 3.2.2 ) or
without Cause, or by reason of Employee’s Permanent
Disability (as defined in Section 3.3.2 ), upon written
notice to Employee, (c) may be terminated at any time by
Employee for Good Reason (as defined in Section 3.5.5 )
upon written notice to the Company, as set forth below, or
(d) may be terminated at any time by Employee without Good
Reason in accordance with Section 3.4 . In the event
the Employee’s employment with the Company terminates after
the expiration of the Term due to a notice of non-renewal by
Employee in accordance with Section 1.2 , the Employee
shall only be entitled to the Accrued Obligations payable as
described in Section 3.2.1 .
3.2 Termination by
Company for Cause . The Company shall have the right to
terminate Employee’s employment at any time for Cause by
giving Employee written notice of the effective date of
termination. The determination as to whether Cause exists shall be
made in the sole discretion of the Board.
3.2.1 Obligations Upon
Termination for Cause . If the Company terminates
Employee’s employment for any of the reasons set forth in
Section 3.2.2 , the Company shall have no further
obligation hereunder from and after the effective date of such
termination, except for (x) payment, within thirty
(30) days of such termination, of Executive’s Base
Salary through the date of termination, (y) payment of amounts
or benefits accrued and vested as of the date of termination under
any retirement plan, profit sharing plan, employee benefit plan,
incentive compensation plan, deferred compensation plan or life
insurance policy maintained by the Company in accordance with the
terms of such plans, and (z) any Annual Bonus earned and
payable for the immediately preceding fiscal year to the extent
unpaid on the date of such termination, payable at the same time as
such annual bonuses are paid to other executives of the Company,
but in no event later than March 15 of the calendar year
following
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