POST-RETIREMENT MEDICAL BENEFITS COVERAGE AGREEMENT
EXHIBIT 10.16
Execution Copy
THIS POST-RETIREMENT MEDICAL BENEFITS COVERAGE AGREEMENT (this “Agreement”) is made and
entered into by and between VCA Antech, Inc., a Delaware corporation (the “Company”), and Xxxxxx X.
Xxxxx, an individual (“Executive”) on the date or dates shown opposite their signatures below, to
be effective as of December 27, 2007, the date on which the Compensation Committee of the Board of
Directors approved the Agreement.
RECITALS
WHEREAS, Executive has been an officer of the Company since its initial formation over 20
years ago, and the Company is indebted to Executive’s contributions to the Company; and
WHEREAS, the Company and Executive desire that the Company continue to provide medical
benefits coverage to Executive and his family members after his retirement from the Company.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the terms, covenants and
conditions contained herein, the parties hereto agree as follows:
1. Continuing Medical Benefits Coverage.
1.1. Following termination of Executive’s position as an employee of the Company, at
Executive’s option, the Company shall continue to provide medical benefits coverage for Executive
and his family (for all purposes of this agreement, references to family or spouse shall include a
registered domestic partner) commencing on or after the date Executive attains (or in the case of
surviving family, would have attained) age 60, until the last to occur of (a) Executive’s death,
(b) the death of Executive’s spouse, or (c) the end of the year in which occurs the attainment of
age 25 by each of Executive’s children; provided, however, that medical benefit coverage for each
of Executive’s children shall cease upon the end of the year in which such child’s 25th
birthday occurs (unless such child is disabled, in which case coverage shall continue), if earlier.
Such medical benefits coverage shall be at least as favorable as the most favorable level, type
and basis of medical coverage provided to Executive and his family at any time within five years
before termination of Executive’s employment with the Company. Upon Executive’s eligibility for
Medicare (or a similar program), Executive shall have the option, but not the obligation, to enroll
in Medicare (or such similar program). If Executive or any eligible family member elects to enroll
in such program, then the Company’s obligation hereunder to such enrolled person shall be limited
thereafter to providing Medicare supplementary coverage, Lloyds policy and Executive Edge Medical
Reimbursement Insurance or substantially similar policies.
1.2. The Company shall provide the medical benefits coverage described in Section 1.1 through
the Company-sponsored medical plans (including Executive Edge Medical Reimbursement Insurance or a
substantially similar policy); provided that if the Company is unable to do so, then the Company
shall secure similar individual health insurance policies providing comparable benefits for
Executive and his family. If, however, the Company fails to secure such similar health insurance
policies, then Executive shall be entitled to obtain similar individual health insurance policies
providing comparable benefits for him and his family, and the Company shall reimburse Executive for
the cost of such policies upon Executive’s submission of proof of his prior payment of the premiums
for such policies.
1.3. Executive’s election to continue medical benefits coverage under this Agreement is an
alternative to statutory continuation coverage rights provided by the Consolidated Omnibus
Reconciliation Act of 1985 (COBRA), and shall cause such statutory rights to permanently expire
with respect to Executive and Executive’s eligible family members.
2. Code Section 409A Tax Gross-Up. If, by reason of a failure of any provision of
this Agreement to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), the continuation of medical benefits coverage provided in Section 1 hereof is subject to
taxation under Code Section 409A(a)(1), then the Company shall pay to Executive an additional
payment (the “Gross-Up Payment”) equal to all federal, state and local taxes incurred by Executive
as a result of compensation paid or made available to Executive by the Company, including the
amount of additional taxes imposed due to the Company’s payment of the initial taxes and interest
under Code Section 409A. The Company shall pay the entire Gross-Up Payment by the end of
Executive’s taxable year next following his taxable year in which Executive remits the related
taxes.
3. Conditions to Coverage. Notwithstanding the provisions of Section 1.1 hereof, the
obligation to provide medical benefits coverage under this Agreement shall be subject to the
following additional limitations and conditions.
3.1. There shall be coordination of benefits where other medical benefits coverage exists.
The Company provided coverage is secondary to:
(a) Another employer’s group medical plan in which Executive or an eligible family
member participates as an active employee;
(b) Another employer’s group medical plan in which Executive or an eligible family
member is covered as the spouse or dependent of an active employee;
(c) Any individual medical benefits coverage under which Executive or an eligible
family member is covered; and
(d) Medicare coverage.
3.2. The coverage under this Agreement shall cease and Company shall have no further
obligation to provide medical benefits coverage to Executive or to any eligible family member in
the event that Executive directly or indirectly causes any person or entity controlled by
Executive:
2
(a) to induce or attempt to induce any employee of the Company or any of its affiliates
to leave the employ of the Company or any of its affiliates; or
(b) to induce or to attempt to induce any customer, supplier, vendor, licensee,
distributor, contractor or other business relation of the Company or any of its affiliates
to cease doing business with, or knowingly adversely alter its business relationship with,
the Company or any of its affiliates.
4. Entire Agreement. This Agreement sets forth the entire agreement and understanding
of the parties relating to the subject matter hereof, and cannot be changed or terminated except in
writing signed by both Executive and the Company.
5. Notices. All notices, requests and other communications (collectively, “Notices”)
given pursuant to this Agreement shall be in writing, and shall be delivered by facsimile
transmission with a copy delivered by personal service or by United States first class, registered
or certified mail (return receipt requested), postage prepaid, addressed to the party at the
address set forth below:
If to the Company:
|
VCA Antech, Inc. | |
| 00000 Xxxx Xxxxxxx Xxxxxxxxx | ||
| Xxx Xxxxxxx, XX 00000-0000 | ||
| Attention: Board of Directors | ||
| Facsimile No.: (000) 000-0000 | ||
If to Executive:
|
Xxxxxx X. Xxxxx | |
| 00000 Xxxx Xxxxxxx Xxxxxxxxx | ||
| Xxx Xxxxxxx, XX 00000-0000 | ||
| or | ||
| the Executive’s address in the Company’s personnel records |
6. Governing Law. Except to the extent governed by the Employee Retirement Income
Security Act of 1974, as amended, this Agreement shall be governed by and construed in accordance
with the laws of the state of California, without regard to its conflict of laws provisions.
7. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be considered to be an original, and all such executed counterparts shall together
constitute one Agreement.
8. Severable Provisions. The provisions of this Agreement are severable, and if any
one or more provisions are determined to be judicially unenforceable, in whole or in part, the
remaining provisions shall nevertheless be binding and enforceable.
9. Successors and Assigns. This Agreement and all obligations and benefits of
Executive and the Company hereunder shall bind and inure to the benefit of Executive and the
Company, their respective affiliates, and their respective successors and assigns.
3
10. Amendments and Waivers. No amendment or waiver of any term or provision of this
Agreement shall be effective unless made in writing. Any written amendment or waiver shall be
effective only in the instance given and then only with respect to the specific term or provision
(or portion thereof) of this Agreement to which it expressly relates, and shall not be deemed or
construed to constitute a waiver of any other term or provision (or portion thereof) waived in any
other instance. The failure by either party to enforce any rights hereunder shall not be construed
as a waiver of any rights of such party.
11. Title and Headings. The titles and headings contained in this Agreement are
included for convenience only and form no part of the agreement between the parties.
[Remainder of page is intentionally blank]
4
IN WITNESS WHEREOF, each of the parties has signed this Agreement on the date opposite their
signature below.
| VCA ANTECH, INC. THE “COMPANY” |
||||||
Dated: February 25, 2008
|
By: | /s/ Xxxxxx X. Xxxxx | ||||
Chief Executive Officer & President |
||||||
| ACCEPTED AND AGREED TO: | ||||||
Dated: February 25, 2008 |
/s/ Xxxxxx X. Xxxxx | |||||
| Xxxxxx X. Xxxxx, in his individual capacity | ||||||
5
