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EXHIBIT 10.32
Educational Medical, Inc.
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
December 31, 1992
Xx. Xxxx X. Xxxxxx
Educational Medical, Inc.
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Re: Employment Agreement
Dear Xx. Xxxxxx:
The following are the revised terms of your employment as President and
Chief Executive Officer of Educational Medical, Inc. (the "Company"). These
revised terms, all of which are included in this Revised Agreement, are
effective immediately.
1. Term; Residence; Duties. You will serve as the President
and Chief Executive Officer of the Company until your employment is terminated
as provided below (the "Employment Period"). During the Employment Period you
will devote substantially all of your time to the duties provided for under the
terms of this Revised Agreement.
As President and Chief Executive Officer of the Company, you shall have
such duties as are delegated by the By-laws of the Company or are assigned to
you by the Board of Directors of the Company, provided that such duties shall be
reasonably consistent with those duties (x) assigned to the President and Chief
Executive Officer of organizations comparable to the Company and (y) assigned to
you by the Board of Directors prior to the date of this Revised Agreement. In
connection with the performance of your duties, the Company will supply you with
services and facilities reasonably appropriate to such duties and your position.
The Company agrees that it will maintain its headquarters in the metropolitan
Atlanta area, where you will maintain you principle office.
2. Salary. Your salary will be $160,000 per year as of
March 21, 1992. Your salary will be reviewed by the Company's Board of Directors
on an annual basis prior to the end of each fiscal year, with the next such
review to occur prior to the end of fiscal 1992 (March 31, 1993). In
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December 31, 1992
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connection with such reviews your salary will be subject to increase as of the
beginning of the next fiscal year at the sole discretion of the Board of
Directors (e.g., April 1, 1993 in the case of the review conducted prior to
March 31, 1993).
3. Incentive Compensation. You will propose an appropriate
incentive plan for yourself and the other executive officers of the Company (the
"Incentive Plan(s)") to the Board of Directors for each fiscal year no later
than 30 days after it begins or such latter date as you and the Board of
Directors may agree. Concurrently or prior to the submission of the Incentive
Plan(s) you will submit a proposed budget for the applicable fiscal year to the
Board of Directors. The Board of Directors will promptly consider the proposed
Incentive Plan(s), and approve them or propose alternative incentive
compensation within 30 days of receipt of your recommendations. No Incentive
Plan(s) shall be implemented without the approval of the Board of Directors or
its designated representative.
4. Vacation. During the term of this Revised Agreement, you
shall be entitled to four (4) weeks of annual vacation. The time for which you
will be absent from the office shall be at your sole discretion, provided such
time is compatible with reasonable needs of the Company.
5. Insurance. In addition to the compensation provided in the
foregoing provisions of this Revised Agreement, the Company agrees to continue
to provide you with a term life insurance contract insuring your life in the
principal amount of Five Hundred Thousand Dollars ($500,000) Dollars, as
currently in effect. You or your designee shall be owner/beneficiary thereof.
Notwithstanding the foregoing, if the Company is unable to obtain term life
insurance on your life at a normal and customary cost thereof for a male of your
age, then this provision and the obligation of the Company hereunder shall be
limited to a contribution toward the payment of such premium of the amount of
such customary fees and expenses (the "Company Funded Premium"). At your
election, the Company Funded Premium may be applied toward such lesser amount of
term life insurance as it may procure.
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December 31, 1992
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6. Fringe and Medical Benefits. You, your spouse and your
children will be entitled to reasonable medical insurance benefits, including up
to an aggregate of $5,000 of annual unallocated reimbursements for medically
related expense ("Unallocated Reimbursements"); any unused amounts may be
carried forward to subsequent years. You shall be eligible to participate in the
Company's stock option and other benefit programs. In addition, the Company may
provide such fringe benefits to you, either through direct payments by the
Company or by reimbursement, as the Company may determine from time to time.
7. Disability. In the event of disability, the Company either
directly, through insurance or a combination of both, will provide you with
payments equal to the salary provided for in this Revised Agreement through the
end of the first three months of such disability. In any event, the Company
shall maintain in force the current disability policy or, in the event of
cancellation, a substantially similar policy if available on reasonable terms,
providing in each case for continuation through your sixty-fifth birthday of
disability payments in an amount substantially equivalent to your annualized
compensation at the time such disability occurs. The obligations of the Company
pursuant to this Section 7 shall continue regardless of whether the Company
elects to terminate the Employment Period as provided in Section 8 of this
Revised Agreement on account of such disability. For purposes of this Revised
Agreement disability means a reasonable determination by the Board of Directors
of the Company based on reasonable medical evidence, that you are physically
incapable of substantially performing your obligations pursuant to the terms of
this Revised Agreement, provided that a determination by the issuer of any
disability policy described in this Section 7 that you are "disabled" pursuant
to the provisions of such policy shall be conclusive evidence of such disability
for purposes of this Revised Agreement.
8. Termination. You may terminate the Employment Period
by at least 30 days' prior notice to the
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December 31, 1992
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Company. The Company may terminate the Employment Period for cause, which shall
mean (a) your death, (b) your disability that prevents you from performing your
obligations to the Company for any three (3) consecutive months; (c) acts of
serious moral turpitude; gross negligence in connection with the performance of
your duties as provided for in this Revised Agreement; fraud; the imposition of
any sanctions against you by regulatory agencies governing the Company or you
with respect to the business of the Company; or a material violation by you of
any of the rules and regulations contained in the By-Laws of the Company
relating to your duties. The Board of Directors may make a preliminary
determination that Cause (a "Preliminary Determination of Cause") exists at any
time. If a Preliminary Determination of Cause is made, the Board of Directors,
in its absolute discretion, may suspend you, with full pay, from all offices
provided for in this Agreement pending a Final Determination of Cause as
described in the next sentence. If the Board of Directors makes a Preliminary
Determination of Cause, you shall be notified of such determination in writing
within 24 hours after such determination is made, such notice to specifically
identify the basis for such determination, and scheduling a special meeting of
the Board of Directors at which you may appear for purposes of considering
whether Cause for Termination exists (a "Final Determination of Cause'). A Final
Determination of Cause shall only be made by the Company's Board of Directors at
a meeting duly called, with respect to which you shall have been given (i)
reasonable written notice as described above, specifying in reasonable detail
the basis for the charge that cause for termination exists and (ii) a reasonable
opportunity to contest such charge.
In the event of termination by the Company without cause you will be
entitled to a termination payment (the "Termination Payment") equal to the
greater of (X) $160,000 or (Y) the amount of compensation paid to you or accrued
to your benefit for the fiscal year last ending prior to the date of such
termination, less the amount of bonus included in such compensation, times a
fraction, the denominator of which is 12 and the numerator of which is six, if
the Final Determination
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December 31, 1992
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of Cause occurs prior to April 1, 1993, and thereafter six plus 1 for each
additional fiscal year you are employed by the company pursuant to this
Agreement or any amendments to it. For example, if you are still employed
pursuant to this Agreement as of April 1, 1993, the numerator of such fraction
would be 7 and would increase to 8 as of April 1, 1994. The increases in the
numerator of the fraction provided for in prior two sentences shall be limited,
however, so that such numerator shall never exceed 12.
9. Continued Applicability of Prior Agreement. The
Non-Competition, Non-Disclosure and Proprietary Information Agreement dated
March 31, 1988 between you and the Company, a copy of which is attached to this
Revised Agreement as Exhibit 2, is specifically reaffirmed and incorporated into
this Revised Agreement by reference.
10. Governing Law. This Revised Agreement shall be governed
by, and construed in accordance with (a) the laws of the State of New York
applicable to contracts made and to be performed wholly therein, and (b) the
laws of the State of Delaware applicable to corporations organized under the
laws of such state.
11. Entire Agreement. This Revised Agreement and the
agreements referred to in it contain the entire agreement between the parties
hereto with respect to the transactions contemplated herein and supersedes all
previously written or oral negotiations, commitments, representations, and
agreements.
12. Counterparts. This Revised Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
13. Amendments. This Revised Agreement, or any provisions
hereof, may not be amended, changed or modified without the prior written
consent of each of the parties hereto.
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December 31, 1992
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If the foregoing confirms your understanding of our agreements
concerning your employment by the Company, please so indicate by signing in the
space provided below and return a signed copy to us.
Very truly yours,
EDUCATIONAL MEDICAL, INC.
[SEAL] By:
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Xxxxxx X. Xxxxx,
Secretary
Confirmed and Agreed to:
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Xxxx X. Xxxxxx
