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Exhibit 10(c)
EMPLOYMENT AGREEMENT BETWEEN COMPMANAGEMENT, INC.
AND XX. XXXXXXX MASTER, DATED AS OF MAY 1, 1999,
AS AMENDED BY FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT, DATED AS OF JANUARY 1, 2000
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EMPLOYMENT AGREEMENT
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This agreement is made effective as of May 1, 1999, at Columbus, Ohio,
between CompManagement, Inc., an Ohio corporation (the "Company"), and Xxxxxxx
X. Master, D.O. (the "Employee"), who hereby agrees as follows:
ss.1. Employment as Chairman. The Company hereby employs the Employee
as Chairman of the Company, and the Employee hereby accepts such employment,
upon the terms and subject to the conditions set forth in this agreement.
ss.2. Term of Employment. The term of the Employee's employment by the
Company pursuant to this agreement shall begin on the date of this agreement and
shall end, unless sooner terminated in accordance with the provisions of ss.8,
below, on April 30, 2000 (the "Initial Term"). Upon agreement of the Company and
the Employee, the term of the Employee's employment under this agreement may be
renewed for successive one-year periods (each a "Renewal Term"), commencing on
the day following the termination date of the Initial Term or the preceding
Renewal Term, as the case may be, and ending, unless sooner terminated in
accordance with the provisions of ss.8, below, on the first anniversary of the
applicable termination date.
ss.3. Services. The Employee shall serve as the Chairman of the Board
of the Company and its subsidiaries and as Chairman of the Board and Chief
Executive Officer of Health Power, Inc., a Delaware corporation and the parent
of the Company ("Health Power"). As such, the Employee shall perform such
services as may be reasonably assigned to him from time to time by the Boards of
Directors of the Company and Health Power. The Employee shall devote his best
efforts to the performance of his duties hereunder.
ss.4. Responsibilities. The Employee shall be responsible for
establishing and supervising the implementation of the business policies and
operating programs, budgets, procedures, and directions of the Company, its
subsidiaries, and Health Power (reporting only to the Boards of Directors of the
Company and Health Power); monitoring and evaluating the effectiveness of the
management of the Company, including without limitation reviewing and evaluating
the performance of all executive officers of the Company; establishing and
implementing a strategic plan for the Company and its subsidiaries; determining
the necessity of and, if necessary and possible, supervising the raising of
additional capital for the Company, its subsidiaries, and/or Health Power;
presiding at all meetings of the shareholders and the Boards of Directors of the
Company, its subsidiaries, and Health Power; and such other activities as are
incident to his office or as may be prescribed or delegated by the Boards of
Directors of the Company and Health Power.
ss.5. Compensation. The Employee shall receive the following
compensation:
(a) A base salary of $295,000 per annum or, if the term of the
Employee's employment is renewed, such other base salary (the "Base
Salary") as may be approved
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by the Company's or Health Power's Compensation Committee (the
"Committee") from time to time, payable in accordance with the
Company's general policies for payment of compensation to its salaried
personnel; provided if the Employee's employment is terminated pursuant
to the provisions of ss.8, below, the base salary shall cease as of the
day of termination;
(b) $3,500 per month, payable in arrears, as an expense
allowance for expenditures advanced by the Employee on behalf of the
Company;
(c) $500 per month payable in arrears as an automobile
allowance plus mileage reimbursement for business travel (at the rate
established by the Internal Revenue Service for mileage deductibility),
subject to the maintenance of appropriate records and the submission of
appropriate reports to the Company;
(d) An annual cash bonus in an amount up to 35% of the Base
Salary (the "Bonus"). Beginning with the 1999 fiscal year of the
Company, and continuing for each fiscal year thereafter during which
the Bonus may be earned (each a "Performance Year"), the Committee
shall establish performance criteria or goals to be achieved by the
Employee for that Performance Year. The performance criteria or goals
shall be approved by the Committee and set forth in the minutes of the
Committee's meetings or in a written agreement between the Company and
the Employee. After the completion of each Performance Year, and after
the completion of the audit by the Company's independent auditors of
the consolidated financial statements for Health Power and its
subsidiaries for such Performance Year, the Committee shall review the
performance criteria and goals of the Employee established by the
Committee for that Performance Year and make a determination as to the
amount of the Bonus earned by the Employee based upon the Employee's
achievement of such performance criteria and goals. The Bonus shall be
payable within 10 days after the Committee's determination as to the
amount of the Bonus earned by the Employee. The performance criteria
and goals established for the Employee shall be based upon such
criteria and goals as may be selected by the Committee, including
without limitation the Employee's performance with respect to providing
leadership to the Company's personnel, implementing strategic plans and
objectives for Health Power and its subsidiaries, meeting financial
budgets and objectives of Health Power and its subsidiaries,
supervising the Company's operations, and enhancing value for the
Company's stockholders; and
(e) Formula Vesting Stock Options pursuant to the 1994
Executive Performance Stock Option Plan, as amended (the "Plan"), for
1999 and, if the term of the Employee's employment is renewed, for each
subsequent Performance Year ending during each renewal term of the
Employee's employment under this agreement. The number of shares of
common stock subject to the Formula Vesting Stock Options shall be an
amount equal to the aggregate number of Formula Vesting Stock Options
and Discretionary Vesting Stock Options received by the chief executive
officer of the Company during each Performance Year.
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ss.6. Fringe Benefits. The Company shall provide disability insurance
for the benefit of the Employee and pay all premiums with respect thereto, which
insurance shall supplement the Company's current disability insurance benefits
to the Employee. The policy or policies for such disability insurance shall
provide for benefits in the amount of $6,000 per month for a maximum of five
years, which benefits shall commence 90 days after the date of the Employee's
disability (as determined under the terms of such policy).
The Employee shall also be entitled to such other fringe benefits and
perquisites as may be generally provided by the Company to its salaried
personnel pursuant to the Company's established policies.
ss.7. Severance Pay. If the Employee's employment is (a) terminated by
the Company as a result of a Change in Control of Health Power (as defined
below), or (b) not renewed at the end of any employment or renewal term after a
Change in Control of Health Power for any reason, then the Employee shall
receive the following:
(i) Severance pay in the amount equal to his then current
annual base salary, payable over a one-year period in the same manner
as such annual base salary is paid; and
(ii) Fringe benefits as set forth inss.6, above, for one year
from the date of termination of employment.
In addition, if the Employee's employment is terminated by the Company
as a result of or after a Change in Control of Health Power for any reason, then
the Employee shall receive additional severance pay in an amount equal to the
base salary the Employee would have received from the date of termination
through the end of the Initial Term or Renewal Term then in effect, as the case
may be, payable during such period in the same manner as the Employee's base
salary is paid. The severance pay described in this paragraph shall be in lieu
of the payment of the Employee's base salary.
For purposes of this section, a "Change in Control of Health Power"
shall be deemed to occur:
(A) When, after the date of this agreement, any "person" as
defined in ss.3(a)(9) of the Securities Exchange Act of 1934 (the
"Exchange Act") and as used in ss.ss.13(d) and 14(d) thereof, including
a "group" as defined in ss.13(d) of the Exchange Act, but excluding
Health Power and any subsidiary and any employee benefit plan sponsored
or maintained by Health Power or any subsidiary (including any trustee
of such plan acting as trustee), directly or indirectly, becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, as
amended from time to time), of securities of Health Power representing
20% or more of the combined voting power of Health Power's then
outstanding securities;
(B) When, during any period of 24 consecutive months after the
date of this agreement, the individuals who, at the beginning of such
period, constitute the Board of
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Directors of Health Power (the "Incumbent Directors") cease for any
reason other than death to constitute at least a majority thereof;
provided, however, that a director who was not a director at the
beginning of such 24-month period shall be deemed to have satisfied
such 24-month requirement (and be an Incumbent Director) if such
director was elected by, or on the recommendation of or with the
approval of, at least two-thirds of the directors who then qualified as
Incumbent Directors either actually (because they were directors at the
beginning of such 24-month period) or by prior operation of this
ss.__(ii); or
(C) Upon the occurrence of a transaction requiring stockholder
approval for the acquisition of the Company and/or its subsidiaries by
an entity other than Health Power or one or more of its subsidiaries
through purchase of assets, by merger or otherwise.
ss.8. Termination of Employment. The Employee's employment under this
agreement may be terminated:
(a) By the Employee with or without cause upon giving 90 days
advance written notice to the Company, provided that the Employee shall
continue to perform all duties under this agreement until the earlier
of: (i) the expiration date of such 90-day period; or (ii) any earlier
date which may be specified by the Company.
(b) By the Company upon the occurrence of any one of the
following events or any time thereafter:
(i) The Employee fails to fully perform and observe
all obligations and conditions to be performed and observed by
the Employee under this agreement, or under any other
agreement between the Employee and the Company, and fails to
correct such problem within 10 days after notice by the Board
of Directors to do so or, if it is impossible to correct such
problem within such 10 days, fails to commence the action
necessary to correct such problem and continues diligently to
pursue such action until the correction is complete; or
(ii) The Employee's death or long-term disability.
For purposes of this agreement, the term "long-term
disability" shall have the same meaning as long-term
disability or other similar term used in any long-term or
permanent disability policy provided by the Company and
covering the Employee. In the event there is no long-term or
permanent disability policy in effect covering the Employee,
the term "long-term disability" shall mean that because of
physical or mental incapacity, the Employee has not performed
his duties under this agreement for 60 days or longer and it
is probable, in the opinion of a licensed physician selected
by the Company, that the Employee will not be able to engage
actively in his employment by the Company for an additional
period of 90 days or longer.
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ss.9. Employee's Capacity. The Employee represents and warrants to the
Company that he has the capacity and right to enter into this agreement and
perform all his duties under this agreement without any restriction whatsoever
by any other agreement, document, or otherwise.
ss.10. Complete Agreement. This document contains the entire agreement
between the parties with respect to the Employee's employment by the Company and
supersedes any prior discussions, negotiations, representations, or agreements
between them relating to the Company's employment of the Employee. No additions
or other changes to this agreement shall be made or be binding on either party
unless made in writing and signed by each party to this agreement.
ss.11. Notices. Any notice or other communication required or desired
to be given to any party under this agreement shall be in writing and shall be
deemed given:
(a) In the case of the Employee, when delivered personally to
the Employee or when deposited in the United States mail, first-class
postage prepaid, addressed to the Employee at 000 Xxxxxx Xxxxx,
Xxxxxxxxxxx, Xxxx 00000, or at any other address thereafter designated
by the Employee in notice theretofore given to the Company; and
(b) In the case of the Company, when deposited in the United
States mail, first-class postage prepaid, addressed to the Company at
0000 Xxxxxxx Xxxxxxx, Xxxxxx, Xxxx 00000, or at any other address
thereafter designated by the Company in notice theretofore given to the
Employee.
ss.12. Governing Law. All questions concerning the validity, intention,
or meaning of this agreement or relating to the rights and obligations of the
parties with respect to performance hereunder shall be construed and resolved
under the laws of Ohio.
ss.13. Severability. The intention of the parties to this agreement is
to comply fully with all laws and public policies, and this agreement shall be
construed consistently with all laws and public policies to the extent possible.
If and to the extent that any court of competent jurisdiction is unable to so
construe part or all of any provision of this agreement, and holds part or all
of that provision to be invalid, such invalidity shall not affect the validity
of the balance of that provision or the remaining provisions of this agreement,
which shall remain in full force and effect.
ss.14. Nonwaiver. No failure by any party to insist upon strict
compliance with any term of this agreement, to exercise any option, enforce any
right, or seek any remedy upon any default of any other party shall affect, or
constitute a waiver of, the first party's right to insist upon such strict
compliance, exercise that option, enforce that right, or seek that remedy with
respect to that default or any prior, contemporaneous, or subsequent default;
nor shall any custom or practice of the parties at variance with any provision
of this agreement affect, or constitute a waiver of, any party's right to demand
strict compliance with all provisions of this agreement.
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ss.15. Captions. The captions of the various sections of this agreement
are not part of the context of this agreement, but are only labels to assist in
locating those sections, and shall be ignored in construing this agreement.
ss.16. Successors. This agreement shall be binding upon, inure to the
benefit of, and be enforceable by and against the respective heirs, legal
representatives, successors, and assigns of each party to this agreement,
provided that neither party may assign any of its rights or obligations under
this agreement without the prior written consent of the other party.
COMPMANAGEMENT, INC.
/s/ Xxxxxxx X. Master, D.O. By /s/ Xxxxxx X. Xxxxxxx
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XXXXXXX X. MASTER, D.O. Xxxxxx X. Xxxxxxx, Chief Executive
Officer
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FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
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This amendment is made effective as of January 1, 2000, between
CompManagement, Inc., an Ohio corporation (the "Company"), and Xxxxxxx X.
Master, D.O. (the "Employee").
Background Information
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The Employee and the Company are parties to an Employment Agreement
dated as of May 1, 1999 (the "Employment Agreement"). The parties desire to
amend the Employment Agreement as provided in this amendment. The Employment
Agreement, as amended by this amendment, is hereinafter collectively referred to
as the "Agreement."
Statement of Agreement
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The parties hereby acknowledge the accuracy of the foregoing Background
Information and hereby agree as follows:
ss.1. Term of Employment. Section 2 of the Employment Agreement is
hereby amended in its entirety to read as follows:
ss.2. Term of Employment. The term of the Employee's
employment by the Company pursuant to the Agreement shall begin on May
1, 1999, and shall end, unless sooner terminated in accordance with the
provisions of ss.8 of the Agreement, on December 31, 2002 (the "Initial
Term"). Unless terminated in accordance with the provisions of ss.8 of
the Agreement, the Employee's employment under the Agreement shall
automatically continue after the expiration of the Initial Term upon
the same terms and conditions contained in the Agreement, or upon such
other terms and conditions to which the parties may mutually agree in
writing, for successive two-year periods (each a "Renewal Term"),
commencing on the day following the termination date of the Initial
Term or the preceding Renewal Term, as the case may be, and ending,
unless sooner terminated in accordance with the provisions of ss.8 of
the Agreement, on the second anniversary of the applicable termination
date.
ss.2. Severance Pay. Section 7 of the Employment Agreement is hereby
amended in its entirety to read as follows:
ss.7. Severance Pay. If the Employee's employment is
terminated by either the Company or the Employee pursuant to ss.8(a) of
the Agreement, by the Company pursuant to ss.8(b) of the Agreement, or
by the Employee pursuant to ss.8(c) of the Agreement after a Change in
Control of Health Power (as defined in ss.8 of the Agreement), then the
Employee shall receive the following:
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(a) Payment of any Base Salary accrued through the
date of termination of employment.
(b) Severance pay in an amount equal to (i) an amount
equal to two times the Base Salary in effect at the time of
termination of employment, plus (ii) an amount equal to the
Bonus most-recently paid to the Employee pursuant to ss.5(d)
of the Agreement.
(c) Benefits comparable to the fringe benefits
described in ss.6 of the Employment Agreement until the
earlier of two years from the date of termination or the date
any such benefit is provided to the Employee by another
employer.
If the severance compensation under this section would
constitute a "parachute payment," as defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), such severance
compensation shall be reduced to the largest amount as will result in
no portion of the severance compensation payments under this section
being subject to the excise tax imposed by Section 4999 of the Code or
being disallowed as deductions to the Company under Section 280G of the
Code.
Payment of the amounts described in subsection (a), above,
shall be made within 30 days after the termination of employment and
payment of the amounts described in subsection (b), above, shall be
made over a two-year period commencing with the termination of
employment, in the same manner as the Base Salary is paid during
employment.
ss.3. Termination of Employment. Section 8 of the Employment Agreement
is hereby amended in its entirety to read as follows:
ss.8. Termination of Employment. The Employee's employment
under the Agreement may be terminated:
(a) By the Employee or the Company, with or without
cause, at the end of the Initial Term or any Renewal Term upon
giving not less than 45 days advance written notice prior to
the end of the Initial Term or the Renewal Term then in
effect, as the case may be, provided that the Employee shall
continue to perform all services under the Agreement until the
earlier of: (i) the expiration date of such 45 day period; or
(ii) any earlier date which may be specified by the Company.
If the Employee's employment is terminated pursuant to this
subsection (a), then the Employee shall be entitled to receive
the severance pay and benefits described in ss.7(b) and (c) of
the Agreement.
(b) By the Company, with or without cause, upon the
giving of written notice to the Employee. If the Employee's
employment is
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terminated pursuant to this subsection (b), then Employee
shall be entitled to receive the severance pay and benefits
described in ss.7(b) and (c) of the Agreement.
(c) By the Employee, with or without cause, upon
giving 45 days advance written notice to the Company, provided
that the Employee shall continue to perform all duties under
this agreement until the earlier of: (i) the expiration date
of such 45-day period; or (ii) any earlier date which may be
specified by the Company. If the Employee's employment is
terminated pursuant to this subsection (c) after a Change in
Control of Health Power (as defined below), then Employee
shall be entitled to receive the severance pay and benefits
described in ss.7(b) and (c) of the Agreement.
(d) By the Company upon the occurrence of any one of
the following events or any time thereafter:
(i) The Employee fails to fully perform and
observe all obligations and conditions to be
performed and observed by the Employee under the
Agreement, or under any other agreement between the
Employee and the Company, and fails to correct such
problem within 10 days after notice by the Board of
Directors to do so or, if it is impossible to correct
such problem within such 10 days, fails to commence
the action necessary to correct such problem and
continues diligently to pursue such action until the
correction is complete; or
(ii) The Employee's death or long-term
disability. For purposes of this agreement, the term
"long-term disability" shall have the same meaning as
long-term disability or other similar term used in
any long-term or permanent disability policy provided
by the Company and covering the Employee. In the
event there is no long-term or permanent disability
policy in effect covering the Employee, the term
"long-term disability" shall mean that because of
physical or mental incapacity, the Employee has not
performed his duties under this agreement for 60 days
or longer and it is probable, in the opinion of a
licensed physician selected by the Company, that the
Employee will not be able to engage actively in his
employment by the Company for an additional period of
90 days or longer.
For purposes of the Agreement, a "Change in Control
of Health Power" shall be deemed to occur:
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(A) When, after January 1, 2000, any "person" as
defined in ss.3(a)(9) of the Securities Exchange Act of 1934
(the "Exchange Act") and as used in ss.ss.13(d) and 14(d)
thereof, including a "group" as defined in ss.13(d) of the
Exchange Act, but excluding Health Power and any subsidiary
and any employee benefit plan sponsored or maintained by
Health Power or any subsidiary (including any trustee of such
plan acting as trustee), directly or indirectly, becomes the
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act, as amended from time to time), of securities of
Health Power representing 20% or more of the combined voting
power of Health Power's then outstanding securities;
(B) When, during any period of 24 consecutive months
after January 1, 2000, the individuals who, at the beginning
of such period, constitute the Board of Directors of Health
Power (the "Incumbent Directors") cease for any reason other
than death to constitute at least a majority thereof;
provided, however, that a director who was not a director at
the beginning of such 24-month period shall be deemed to have
satisfied such 24-month requirement (and be an Incumbent
Director) if such director was elected by, or on the
recommendation of or with the approval of, at least two-thirds
of the directors who then qualified as Incumbent Directors
either actually (because they were directors at the beginning
of such 24-month period) or by prior operation of this
subsection (B); or
(C) Upon the occurrence of a transaction requiring
stockholder approval for the acquisition of the Company and/or
its subsidiaries by an entity other than Health Power or one
or more of its subsidiaries through purchase of assets, by
merger or otherwise.
ss.4. Definitions. All capitalized terms used in this amendment which
are not otherwise defined herein shall have the respective meanings given those
terms in the Employment Agreement.
ss.5. Captions. The captions of the various sections of this amendment
are not part of the context of this amendment, but are only labels to assist in
locating those sections, and shall be ignored in construing this amendment.
ss.6. Construction. This document is an amendment to the Employment
Agreement. In the event of any inconsistencies between the provisions of the
Employment Agreement and this amendment, the provisions of this amendment shall
control. Except as modified by this amendment, the Employment Agreement shall
continue in full force and effect without change.
COMPMANAGEMENT, INC.
/s/ Xxxxxxx X. Master, D.O. By /s/ Xxxxxx X. Xxxxxxx
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XXXXXXX X. MASTER, D.O. Xxxxxx X. Xxxxxxx, Chief Executive
Officer
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