EXHIBIT 10.17
TRANSWORLD HEALTHCARE, INC.
00 XXXXXXX XXXXXX
XXX XXXX, X.X. 00000
September 24, 2001
Xx. Xxxxx Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Xx. Xxxxx:
We write to set forth our agreement with respect to your employment as
President and Chief Operating Officer of Transworld Healthcare, Inc., a New York
corporation (the "Company").
1. SERVICES. The Company hereby agrees to employ you, and you hereby
agree to be employed by the Company, on the terms and conditions hereinafter set
forth. You will serve as President and Chief Operating Officer of the Company,
and will render such services and perform such duties for the Company and its
direct and indirect subsidiaries (collectively, with the Company, the "Company
Group") as customarily are performed by presidents and chief operating officers,
including, without limitation, those services and duties consistent with your
position as the Board of Directors may from time to time reasonably assign to
you. You will, in addition, hold such offices, directorships and other positions
with the Company Group, as are consistent with your status as President and
Chief Operating Officer, to which you may from time to time be elected or
appointed. Your authority shall be subject at all times to the direction and
control of the Board of Directors and the Chief Executive Officer of the Company
( the "CEO"), and to the discretion of the Board of Directors to determine the
policies of the Company Group. You agree to serve the Company Group to the best
of your ability and to devote substantially all of your working time, attention,
energy and skills exclusively to the business and affairs of the Company Group
and to the promotion and advancement of its interests.
2. COMPENSATION. As full compensation for all of your services
(including services as an officer of members of the Company Group, if you are so
appointed or elected), you shall receive the following:
(a) During your employment hereunder you shall receive a base salary
at the rate of Three Hundred Sixty-Five Thousand Dollars ($365,000) per annum
payable in accordance with the Company's normal payroll practices. In addition
to your base salary, you and the Company agree to negotiate in good faith
commencing not less than 90 days prior to each annual anniversary date during
the term of this Agreement, to determine the amount of the annual increase, if
any, in your base salary.
Xx. Xxxxx Xxxxx
September 24, 2001
Page 2
(b) In the discretion of the CEO and Board of Directors of the
Company, you may receive annual bonuses at such times and in such amounts as may
be determined by the Board of Directors.
(c) All options heretofore granted to you by the Company shall
immediately become exercisable upon a "Change in Control of the Company" (as
defined in paragraph 3(d) below).
(d) All payments required to be made by the Company to you under
this Agreement shall be subject to withholding, social security, payroll and
other applicable taxes and deductions.
3. TERM.
(a) (i) Subject to the occurrence of a Termination Event (as defined
below), your employment under this Agreement shall be effective for a period of
time (the "Term") starting on the date hereof (the "Effective Date") and
continuing for three (3) years thereafter; provided, however, that, on each
anniversary of the Effective Date, a one-year extension shall be automatically
added to the then remaining Term unless ninety (90) days prior to such
anniversary, either party provides the other with written notice of its intent
to terminate the employment, in which case this Agreement shall terminate on
such anniversary of the Effective Date. During the 90 days notice period, the
Company shall continue to compensate you at the rate of your compensation in
effect as of the commencement of the 90-day notice period. (ii) For purposes of
this Agreement, "Termination Event" means one or more of the following events
the occurrence of which shall cause the termination of this Agreement: (A) the
date of your death; (B) if, as a result of your physical or mental disability as
determined by a qualified physician licensed to practice medicine in the State
of New York and selected by the Company's Board of Directors, the Board of
Directors reasonably determines that you have failed, or have become unable to
perform one or more material duties to the Company for a period of more than
three (3) consecutive months, or a period of more than one hundred eighty (180)
days in the aggregate in any eighteen (18) month period, the date on which the
Company shall elect to terminate your employment by reason of such disability;
(C) the date on which the Company shall elect to terminate your employment for
"cause" (as defined below); (D) the date on which you shall elect to terminate
your employment for good "reason" (as defined below); and/or (E) the date on
which you or the Company shall elect to terminate your employment following a
Change in Control of the Company (as defined below) pursuant to paragraph 8 of
this Agreement.
(b) For purposes of this Agreement, "cause" means any one or more of
the following: (i) you are convicted of or plead guilty or nolo contendere to a
felony or other crime; (ii) willful and continued misconduct by you relating to
the Company, including, without limitation, your willful and continued failure
to perform stated duties; (iii) the willful engaging by you in gross misconduct
materially and demonstrably injurious to the Company; or (iv) any willful and
material breach by you of the terms of this Agreement. For purposes of this
paragraph 3(b), no act or failure to act by you shall
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September 24, 2001
Page 3
be considered "willful" unless done, or omitted to be done, by you not in good
faith and without reasonable belief that your action or omission was in the best
interest of the Company. For purposes of this Agreement, you shall not be deemed
to have been terminated for cause unless and until there shall have been
delivered to you a copy of a resolution, duly adopted by the affirmative vote of
not less than a majority of the entire membership of the Board of Directors of
the Company at a meeting called and held for this purpose after reasonable
written notice to you and an opportunity for you, together with your counsel, to
be heard by the Board, finding that, in the good faith opinion of the Board, you
are guilty of conduct of the type described in this paragraph 3(b) defining
"cause", and specifying the particulars thereof.
(c) For purposes of this Agreement, "good reason" shall mean (i)
your failure to serve as President and Chief Operating Officer of the Company
for any reason other than a voluntary resignation by you or your removal for
cause; (ii) the failure of the Company to nominate you for election as President
and Chief Operating Officer of the Company at any election or appointment of
officers unless you decline to stand for election; (iii) the failure by the
Company to obtain from any successor or assign of all or substantially all of
the business of the Company, before the succession or assignment takes place, an
agreement to assume and perform this Agreement; (iv) any purported termination
of your employment for cause which is not effected pursuant to a notice
described in paragraph 3(b) above; (v) without your written consent, the
assignment to you of any substantial duties inconsistent with your status as
President and Chief Operating Officer of the Company or a substantial alteration
in the nature or status of your responsibilities, or an adverse and substantial
alteration in your reporting responsibilities, titles or offices, or any removal
of you or failure to re-elect you to any of such positions, except in connection
with the termination of your employment; (vi) a relocation from your principal
place of residence at 0 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx (as such principal
residence may change from time to time) reasonably necessitated by (x) a change
occurring after the Effective Date in one or more places (specifically excluding
the United Kingdom) in which the Company does business or in which the Company
requires that you provide your services; or (y) a requirement by the Company
that you relocate to a new principal place of residence (specifically including
the United Kingdom); (vii) a reduction in your base salary unless such reduction
was with your prior consent; or (vi) any material breach by the Company of this
Agreement.
(d) For purposes of this Agreement:
(i) "Change in Control of the Company" means the occurrence of
any of the following while you are employed by the Company under this Agreement:
(A) any "person" (as that term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) other than
Hyperion Partners II L.P., its affiliates and partners shall become the
"beneficial owner" (within the meaning of Rule 13d-3 under the Exchange Act) of
more than 30% of the outstanding capital stock of the Company entitled to vote
for the election of directors ("Voting Shares"); (B) there shall be consummated
a merger or consolidation of the Company with
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September 24, 2001
Page 4
one or more other corporations as a result of which the holders of the
outstanding Voting Shares of the Company immediately before the merger or
consolidation hold less than 51% of the Voting Shares of the surviving or
resulting corporation; (C) there shall be consummated the sale of all or
substantially all of the assets of the Company and its subsidiaries taken as a
whole; or (D) during any period of two (2) consecutive years, individuals who at
the beginning of such period constitute the entire Board of Directors of the
Company cease for any reason to constitute at least a majority thereof, unless
the election, or the nomination for election by the Company's stockholders, of
each new director was approved by a vote of at least a majority of the directors
then still in office who were directors at the beginning of the period. "Change
in Control of the Company" shall not mean or include the merger, consolidation,
or other reorganization of the Company and/or the sale, assignment, lease or
other transfer of all or substantially all of the assets of the Company, to or
with any Subsidiary and/or Affiliate, or by any Subsidiary and/or Affiliate to
or with another Subsidiary and/or Affiliate.
(ii) "Affiliate" of the Company means a corporation or other
entity which, directly or indirectly, is in control of, is controlled by, or is
under common control with the Company. For purposes of this definition, control
of a corporation or other entity means the power, direct or indirect, (A) to
vote 51% or more of the securities having ordinary voting power for the election
of directors of such corporation or other entity, or (B) to direct or cause the
direction of the management and policies of such corporation or other entity
whether by contract or otherwise.
(iii) "Subsidiary" of the Company means a corporation or other
entity whose shares of stock or other ownership interests having ordinary voting
power to elect a majority of the directors (or other persons performing similar
functions of such corporation or entity) are owned, directly or indirectly, by
the Company.
4. CERTAIN BENEFITS. During your employment hereunder, subject to your
meeting applicable eligibility requirements, the Company shall provide you with
such life, disability, health insurance and other benefits as are generally made
available to senior executive employees of the Company. You shall be entitled to
receive six (6) weeks of paid vacation during each year of the term of your
employment hereunder.
5. REIMBURSEMENT OF EXPENSES. During your employment hereunder, the
Company will reimburse you for your reasonable, ordinary and necessary travel
and other business expenses incident to your rendering of services hereunder, in
conformity with the Company's regular policies from time to time in effect
regarding reimbursement of expenses. Payments to you for such expenses will be
made upon presentation of expense statements in such detail as the Company may
from time to time reasonably require.
6. CONFIDENTIALITY. You acknowledge that, in the course of your
employment, you will be occupying a position of trust and confidence with the
Company Group. You further acknowledge that you will have access to valuable
trade secrets and confidential information of the Company Group solely as a
result of your position with the Company. You agree that you will not make use
of or disclose, directly or indirectly,
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September 24, 2001
Page 5
any trade secrets or confidential information of the Company Group, except that
you may disclose such information (i) to the extent necessary to perform your
obligations under this Agreement and in furtherance of the best interests of the
Company Group; (ii) to the extent required by applicable law; or (iii) if
expressly consented to by the Company. The provisions of this paragraph 6 shall
survive the expiration or termination, for any reason, of this Agreement.
7. REPRESENTATIONS. You hereby represent and warrant to the Company
that you have full legal authority to enter into this Agreement and to perform
your obligations hereunder, that you have no obligation to any other person or
entity that would affect or conflict with any of your obligations hereunder, and
that the complete performance of your obligations hereunder will not violate,
result in a breach of, or constitute a default under, any law, regulation, order
or decree of any governmental or judicial body or any contract by which you are
bound.
8. SEVERANCE COMPENSATION (a) You and the Company shall each be
entitled to terminate your employment hereunder at any time within six (6)
months following a Change in Control of the Company.
(b) In the event your employment is terminated by the Company for
any reason whatsoever (other than your death or disability or the termination of
your employment for "cause") or if, within six (6) months following a Change in
Control of the Company, you or the Company terminates your employment hereunder
for any reason (other than your death or disability or the termination of your
employment for "cause"), or if at any time during the term of this Agreement,
you terminate your employment for "good reason", then (i) all stock options you
hold in the Company's common stock or the securities of its subsidiaries shall
vest immediately; (ii) the Company shall pay to you, as severance pay, in cash,
within sixty (60) days following the termination of your employment, an amount
equal to 2.9 times your annual base salary hereunder during the last twelve (12)
months preceding the Change in Control of the Company or the termination of your
employment under this Section 8, (or during such lesser period during which you
were employed by the Company); and (iii) the Company shall provide to you for a
period of twelve (12) months following the date of termination, at the expense
of the Company, the Company benefits to which you have been entitled immediately
prior to the date of termination, provided that if at any time during such
twelve (12) month period, you become entitled to or otherwise obtain some or all
of such benefits, then the obligation of the Company to provide you with those
benefits shall immediately cease.
9. NOTICES. Any notice or other communication required or permitted to
be given hereunder shall be deemed to have been duly given when personally
delivered or when sent by certified mail, return receipt requested, postage
prepaid, as follows:
Xx. Xxxxx Xxxxx
September 24, 2001
Page 6
If to the Company:
Transworld Healthcare, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chairman
With a copy to:
Xxxx Marks & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
If to you, at your address as set forth above.
Either party may change its or his address for the purpose of this paragraph by
written notice similarly given.
10. SEVERABILITY. If any clause or provision of this Agreement shall be
held to be invalid or unenforceable, such clause or provision shall be construed
and enforced as if it had been more narrowly drawn so as not to be invalid or
unenforceable, and such invalidity or unenforceability shall not affect or
render invalid or unenforceable any other provision of this Agreement.
11. MISCELLANEOUS. This Agreement sets forth the parties, final and
entire agreement, and supersedes any and all prior understandings, with respect
to its subject matter. The headings in this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement. This
Agreement shall inure to the benefit of and be binding upon the Company, its
successors and assigns, and upon you, your heirs, administrators and legal
representatives, but no right or obligation hereunder may be assigned or
delegated. No failure or delay by either party in exercising any right, option,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof, or the exercise of any other right, option, power or privilege. In the
event of a breach of this Agreement by the Company, you incur certain costs and
expenses including reasonable legal fees and in order to enforce your rights
hereunder, the Company will reimburse you for such expenses. This Agreement can
only be changed, waived or terminated only by a writing signed by both you and
the Company and shall be governed by the internal laws of the State of New York
(without reference to its rules as to conflicts of laws). This Agreement may be
executed in counterparts, each of which shall be deemed an original, but both of
which taken together shall constitute one and the same document.
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September 24, 2001
Page 7
If the foregoing correctly sets forth your understanding of our
agreement, please so indicate by signing and returning to us a copy of this
letter.
TRANSWORLD HEALTHCARE, INC.
By /s/ Xxx Xxxxxx
Name: Xxx Xxxxxx
Title: Chairman/CEO
ACCEPTED AND AGREED TO:
----------------------
/s/ Xxxxx Xxxx Eames
Xxxxx Xxxxx
Dated: 9/24/, 2001
