EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of the 14th day of July, 1998 by
and between LOGISTICARE, INC., a Delaware corporation with its principal
corporate offices at 0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxx, Xxxxxxx
00000 (the "Company"), and Xxxx X. Xxxxxxxx, residing at 00000 X.X. 000 Xxxxxxx,
Xxxxxxx, Xxxxxxx 00000 ("Executive").
W I T N E S S E T H
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WHEREAS, the Company desires to continue to employ Executive as its
President and Chief Executive Officer and Executive is willing to continue to be
employed with the Company in such capacities; and
WHEREAS, the Company and Executive desire to set forth the terms and
conditions of such employment.
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants and agreements herein contained, the Company and Executive
agree as follows:
1. Definitions. For purposes of this Agreement, the following
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capitalized terms shall have the meanings set forth below and shall include the
plural as well as the singular:
(a) "Affiliate" shall mean any Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, any other Person.
(b) "Annual Base Salary" shall mean Executive's annual base salary, as
determined from time to time in accordance with Section 5(a) hereof.
(c) "Cause" shall mean the termination of Executive's employment with
the Company for any of the reasons or causes set forth below:
(i) gross misconduct, dishonesty, misappropriation, willful
breach of fiduciary duty or fraud by Executive with regard to the
Company or any of its assets or businesses;
(ii) conviction of Executive or the pleading of nolo contendere
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with regard to any felony or crime involving moral turpitude (for the
purpose hereof, traffic violations and misdemeanors shall not be
deemed to be a crime); or
(iii) willful refusal by Executive to perform any material
duties reasonably required to be performed in the course of
Executive's employment with the Company.
(d) "Change of Control" shall mean the occurrence of any of the
following:
(i) 50% or more of the outstanding voting stock of the Company is
acquired or beneficially acquired (as defined in Rule 13d-3 under the
Securities Exchange Act, as amended, or any successor rule thereto) by
any Person (other than the Company or its Affiliates), in a
transaction other than a public offering of the voting stock of the
Company;
(ii) the Company is merged or consolidated with another
corporation (other than in a merger or consolidation with or into an
Affiliate of the Company) and the holders of all outstanding voting
stock of the Company immediately prior to the merger or consolidation
hold less than a majority of the voting stock of the surviving entity
or its parent corporation immediately after the merger or
consolidation; or
(iii) all or substantially all of the assets of the Company are
sold or otherwise transferred to any person or entity other than an
Affiliate of the Company (in one transactions or a series of
transactions).
(e) "Disability" shall mean the inability to perform substantially all
of Executive's duties in the capacity hereinafter set forth for a period of not
less than 60 consecutive days or any 90 days in any six-month period.
(f) "Ending Compensation" shall mean Executive's Annual Base Salary
(excluding Incentive Compensation, stock option grants and bonuses, if any) in
effect immediately prior to the date of termination of Executive's employment
with the Company.
(g) "Good Reason" shall mean, without Executive's written consent, the
occurrence of any of the following circumstances that continues for 20 days
after written notice thereof from Executive to the Company:
(i) any material demotion of Executive, any material reduction
in Executive's authority or responsibility or any other material
change in the terms of Executive's employment which is inconsistent
with this Agreement, including a reduction in his Annual Base Salary
other than as part of a general reduction in the annual base salaries
of senior management of the Company pursuant to which Executive's
Annual Base Salary is reduced proportionately with such general
reduction;
(ii) a failure of any successor entity to assume the obligations
of the Company hereunder with Section 16 hereof;
(iii) any purported termination of Executive's employment other
than validly for Cause or as otherwise permitted under this Agreement;
or
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(iv) any material breach by the Company other than those set
forth above.
(h) "Person" shall mean any individual, partnership, firm, trust,
corporation or other similar entity. When two or more Persons act as a
partnership, limited partnership, syndicate or other group for the purpose of
acquiring, holding or disposing of securities of the Company, such syndicate or
group shall be deemed a "Person" for purposes of this Agreement.
2. Employment. The Company hereby agrees to employ Executive in
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the capacity hereinafter set forth, and Executive agrees to accept such
employment, upon the terms and conditions herein set forth.
3. Term. This Agreement shall be for an initial three-year term (the
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"Term") commencing on the date hereof and, unless this Agreement is sooner
terminated under the provisions hereof, the Term shall be automatically renewed
for successive one-year terms unless the Company or Executive shall give to the
other written notice of non-renewal at least three months prior to the end of
the then current term.
4. Duties and Responsibilities. During the Term, Executive shall serve
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as and have the titles of President and Chief Executive Officer. In serving in
such capacities, he shall continue to be a senior executive of the Company with
responsibility and status substantially equivalent to his responsibility and
status immediately prior to the execution hereof. Executive shall perform his
duties hereunder at the Company's facilities located in Georgia, Connecticut and
Florida and he shall be available to travel, from time to time, as may be
required in connection with the performance of his duties hereunder. In no
event will Executive be required to undertake any duties or perform any tasks
which are inconsistent with his status as President and Chief Executive Officer
of the Company. Executive's employment with the Company shall be full-time and
exclusive and, during the Term, Executive agrees that he will (i) devote
substantially all of his business time, attention, skill and efforts to the
performance of his duties hereunder and (ii) generally promote the interests of
the Company and its clients; provided, however, that Executive may serve as a
director of other companies if such service does not conflict in any material
respect with his duties hereunder or his fiduciary duty to the Company, and
provided that Executive shall give the Company prior written notice of such
service.
5. Compensation.
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(a) Base Compensation. As compensation for services hereunder and in
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consideration of the covenants contained herein, during the Term, the Company
shall pay Executive, in accordance with the Company's normal payroll practices
and subject to required withholding, an Annual Base Salary which shall be at the
rate per annum of $200,000. The Company's Board of Directors may, in its sole
discretion, increase the Annual Base Salary. Once increased, the Annual Base
Salary shall not be decreased, except as part of a general reduction in the
annual base salaries of senior management of the Company pursuant to which
Executive's Annual Base Salary is reduced proportionately with such general
reduction.
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(b) Incentive Compensation. In addition to the Annual Base Salary,
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during the Term, Executive shall be entitled to receive incentive compensation
("Incentive Compensation") in the form of bonuses, stock option grants pursuant
to the terms of the Company's 1998 Stock Option Plan, and/or any other annual or
long-term incentive awards pursuant to existing plans of the Company or plans
hereafter adopted by the Company, each as determined by the Company's Board of
Directors in its sole discretion.
6. Other Compensation and Benefits. In addition to the compensation
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provided for under Section 5, during the Term, Executive shall be entitled to:
(a) participate in all benefit, pension, retirement, savings, welfare
and other employee benefit plans and policies in which members of the Company's
senior management generally are entitled to participate, in accordance with
their respective terms as in effect from time to time;
(b) receive all fringe benefits and perquisites generally maintained
by the Company from time to time for members of senior management, including,
without limitation, reimbursement for all reasonable, ordinary and necessary
business and entertainment expenses incurred in the performance of his services
hereunder, in accordance with the Company's policies as in effect from time to
time;
(c) vacation each year in accordance with the Company's policies for
members of senior management as in effect from time to time, but in no event
less than 20 days paid vacation for each calendar year and 25 days after ten
years of employment with the Company;
(d) the costs of fuel, maintenance, repairs, leasing and insurance
associated with an automobile pursuant to the terms of the Company's policy
concerning senior management's automobiles as in effect from time to time; and
(e) such other benefits as Executive is entitled in accordance with
the Company's policies for members of senior management as in effect from time
to time.
7. Termination by the Company.
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(a) Subject to the provisions of this Agreement, the Company may
immediately terminate Executive's employment hereunder for Cause upon written
notice of such termination, in which case the Company shall have no other
liability or obligation to Executive hereunder except to pay to Executive, when
otherwise due, all accrued and unpaid Annual Base Salary and Incentive
Compensation to the date of termination and all other accrued benefits due to
Executive hereunder.
(b) In the event of Executive's Disability, the Company may terminate
Executive's employment hereunder upon 30 days prior written notice, in which
case the Company shall have no other liability or obligation to Executive
hereunder except to pay to Executive, when
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otherwise due, all accrued and unpaid Annual Base Salary and Incentive
Compensation to the date of termination and all other accrued benefits due to
Executive hereunder.
(c) If the Company terminates Executive's employment for Cause or
Disability and Executive disputes such finding of Cause or Disability, the issue
of the validity of the Company's finding of Cause or Disability shall be
submitted to the American Arbitration Association ("AAA") for arbitration in
Atlanta, Georgia in accordance with the then effective rules of the AAA, and
judgment on the award rendered pursuant to such arbitration may be entered by
any court having jurisdiction over the parties and the subject matter hereof.
The costs of such arbitration shall be paid equally by the Company and
Executive, and each party shall be solely responsible for its own costs and
expenses, including attorneys' fees and expenses, incurred in connection with
such arbitration.
8. Death of Executive. In the event of Executive's death, the Term
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of this Agreement shall terminate and the Company shall have no other liability
or obligation to Executive hereunder other than to pay to Executive's estate,
when otherwise due, all accrued and unpaid Annual Base Salary and Incentive
Compensation to the date of termination and all other accrued benefits due to
Executive hereunder.
9. Other Termination. Notwithstanding anything herein to the
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contrary, Executive may at any time resign for Good Reason or following a
Change of Control upon 30 days prior written notice to the Company. However, if
Executive desires to resign effective within six months following the date on
which a Change of Control occurs, Executive shall:
(a) first ask the Board of Directors of the Company whether he wishes
Executive to remain employed with the Company in Executive's then current
position; and
(b) if the Board of Directors of the Company responds in the
affirmative, then Executive shall continue to dutifully execute his
responsibilities as a senior executive of the Company for a period of three
months following the date on which the Change of Control occurred (the
"Transition Period"). If Executive fails to perform his material
responsibilities as a senior executive of the Company for the Transition Period,
then Executive shall not be entitled to receive any severance compensation under
Section 10 hereof.
10. Severance Compensation. In the event (i) the Company terminates
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Executive's employment hereunder other than for Cause or Disability or (ii)
Executive resigns for Good Reason or following a Change of Control in accordance
with Section 9 hereof, then Executive shall be entitled, subject to Section 14
hereof, to receive from the Company severance compensation in an amount equal to
100% of Executive's Ending Compensation (less appropriate payroll deductions, if
any). Such amount shall be paid in installments during the twelve-month period
following termination of employment in accordance with the Company's normal
payroll practices. Executive acknowledges and agrees that the severance
compensation provided herein shall be in lieu of any other cash severance
benefits provided by the Company to which Executive may otherwise be entitled.
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11. Non-Competition; Confidential Information.
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(a) Executive agrees that his services hereunder are of a special and
unique nature and his position with the Company places him in a position of
confidence and trust with clients and employees of the Company. Executive
agrees that he will not at any time during his employment with the Company and
for a period of one year thereafter (the "Restrictive Period"), directly or
indirectly, compete (as an owner, joint venturer, partner, stockholder,
director, officer, consultant, agent or otherwise) with the Company in the
United States. Ownership of less than 5% of the securities of any class of a
corporation registered under section 12(b) or 12(g) of the Securities Exchange
Act of 1934, as amended, shall not be considered a violation of the provisions
of this paragraph.
(b) Executive further agrees that he will not at any time, directly or
indirectly, without the Company's prior written consent, disclose to any third
party or use (except as authorized in the regular course of the Company's
business) any confidential, proprietary or trade secret information acquired by
him during his employment with the Company and thereafter, including, without
limitation, sales and marketing information, information relating to existing or
prospective customers and markets, information relating to the RealTime software
technology and enhancements thereto or other software technology, business
opportunities, and financial, technical and other data (collectively, the
"Confidential Information"). After termination of Executive's employment with
the Company for any reason and upon the written request of the Company,
Executive shall promptly return to the Company all originals and/or copies of
written or recorded material (regardless of the medium) containing or reflecting
any Confidential Information and shall promptly confirm in writing to the
Company that such action has been taken.
(c) Executive agrees that he will not, during the Restrictive Period,
employ or retain, solicit the employment or retention of, or cause or encourage
any entity to retain or solicit the employment or retention of, any person who
was any employee of the Company at any time during the two year period
commencing 12 months prior to the termination of Executive's employment with the
Company and ending on year after such termination. After termination of
Executive's employment with the Company, (i) Executive will refrain from
disparaging, whether orally, in writing or in other media, the Company, its
Affiliates, the officers, directors and employees of each of them, and the
products and services of each of them, and (ii) the Company will not comment
upon the employment performance of Executive other than as may be required by
law or as requested by Executive.
(d) Any discovery, design, invention or improvement (whether or not
patentable) that Executive develops during his employment with the Company
(whether or not during his regular working hours or on the Company's premises)
and that is related to the Company's business or operations as then conducted or
contemplated, shall belong solely to the Company and shall be promptly disclosed
to the Company. During the period of his employment with the Company and
thereafter, Executive shall, without additional compensation, execute and
deliver to the Company any instruments of transfer and take any other action
that the Company
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may reasonably request to carry out the provisions of this paragraph, including
executing and filing, a the Company's expense, patent and/or copyright
applications and assignments of such applications to the Company.
12. Specific Performance. Executive acknowledges that, in view of the
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nature of the Company's business, the restrictions contained in this Agreement
are reasonably necessary to protect the legitimate business interests of the
Company and that any violation of such restrictions will result in irreparable
injury to the Company for which money damages will not be an adequate remedy.
Accordingly, Executive agrees that, in addition to such money damages, he may be
restrained and enjoined from any continuing breach of such covenants without any
bond or other security being required by any court. If any restriction
contained in this Agreement shall be deemed to be invalid, illegal or
unenforceable by reason of the extent, duration or geographical scope, or
otherwise, then the court making such determination shall have the right to
reduce such extent, duration, geographical scope or other provisions hereof, and
in its reduced form such restriction shall then be enforceable in the manner
contemplated thereby.
13. No Mitigation; No Set-Off. The Company agrees that if Executive's
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employment with the Company is terminated for any reason whatsoever, Executive
is not required to seek other employment or to attempt in any way to reduce any
amounts payable to Executive by the Company pursuant to this Agreement.
Further, the amount of any payment or benefit provided for in this Agreement
shall not be reduced by any compensation earned by Executive or benefit provided
to Executive as the result of employment by another employer or otherwise. The
Company's obligations to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
circumstances, including without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Company may have against
Executive.
14. General Release of the Company. In consideration of the payments
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and other undertakings set forth herein, Executive agrees to execute a release
of the Company in substantially the form attached hereto as Exhibit A upon the
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termination of his employment with the Company. Executive acknowledges that the
execution of such release is an express condition to his right to receive
severance compensation pursuant to Section 10 hereof in the event such section
is applicable.
15. Notice. Any notice or other communication required or permitted
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hereunder shall be in writing and shall be delivered personally, or sent by
certified mail, return receipt requested, by Federal Express, Express Mail or
similar overnight delivery or courier service, or by telecopy. Notice to
Executive shall be delivered to his address set forth at the head of this
Agreement, and notice to the Company shall be sent as follows:
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LogistiCare, Inc.
One Crown Center
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Attention: Chief Financial Officer
Any notice given by certified mail shall be deemed given five days after
the time of certification thereof. Any notice given by other means permitted
hereby will be deemed given at the time of receipt thereof. Either party may by
notice given in accordance herewith to the other party, designate another
address or person for receipt of notices hereunder.
16. Successors; Binding Agreement. Neither party may assign this
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Agreement; provided, however, that it is expressly acknowledged that this
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Agreement and the rights of the Company hereunder may be assigned, without the
consent of Executive, to any purchaser or other transferee of all or
substantially all of the business and/or assets of the Company or any division
of the Company for which Executive is then acting as general manager. The
Company shall require any such successor to expressly assume and agree, in a
written instrument in form and substance satisfactory to Executive and his
counsel, to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors, permitted assigns, heirs and
representatives.
17. Separability. If any provisions of this Agreement shall be declared
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invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect.
18. Waiver. The rights of each party hereunder may be waived only by a
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writing signed by the waiving party giving such waiver expressly setting forth
the rights so waived and the matters as to which they are so waived, and any
such waiver shall be limited to the matters expressly set forth in such writing.
No failure or delay of any party hereto in enforcing any of its rights hereunder
at any time shall constitute or evidence any waiver of such rights.
19. Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed an original, and all of which together will constitute one
document.
20. Headings. The headings used in this Agreement are for convenience of
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reference only and shall not be deemed to be of any substance.
21. Entire Agreement; Modification. This Agreement contains the entire
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agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings, oral or written, with
respect to such matters. This Agreement may not be amended, modified, or
supplemented in any respect except by a subsequent written agreement entered
into by both parties.
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22. Governing Law. This Agreement will be construed and enforced in
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accordance with the laws of the State of Georgia, without regard to its conflict
of law principles.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
LOGISTICARE, INC.
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: Vice President and Chief Financial
Officer
EXECUTIVE
/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
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EXHIBIT A
GENERAL RELEASE
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For good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, I, for myself and my successors, assigns, heirs and
representatives (each, a "Releasing Party"), hereby release and forever
discharge LogistiCare, Inc. (the "Company"), its stockholders, officers,
directors, employees, agents and attorneys, and their respective successors,
assigns, heirs and representatives (each, a "Released Party"), individually and
collectively, from any and all claims, demands, causes of action, liabilities or
obligations, known or unknown, pending or not pending, liquidated or not
liquidated, of every kind and nature whatsoever (collectively, the "Released
Claims") which the Releasing Party has, has had or may have against any one or
more of the Released Parties arising out of, based upon or in any way, directly
or indirectly, related to the Company's business, my employment with the Company
or the termination of such employment; provided, however, that this General
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Release shall have no effect whatsoever upon the Company's obligations, if any,
to pay severance compensation pursuant to the Employment Agreement between the
undersigned and the Company, dated July 14, 1998.
The Released Claims include, without limitation, (a) all claims arising out
of or relating to breach of contract, the Fair Labor Standards Act, the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1866, the National Labor Relations Act, the Americans with
Disabilities Act, the Employee Retirement Income Security Act and/or any other
federal, state or local statute, law, ordinance, regulation or order as the same
may be amended or supplemented from time to time, (b) all claims for back pay,
lost benefits, reinstatement, liquidated damages, punitive damages, and damages
on account of any alleged personal, physical or emotional injury, and (c) all
claims for attorneys' fees and costs.
I understand and acknowledge that I am hereby being advised to consult with
an attorney prior to signing this General Release. My decision to sign this
General Release is my own voluntary decision made with full knowledge that I
have been advised to consult with an attorney and I intend to be bound by this
General Release in accordance with its terms.
Dated: _____________ _______________________________
Xxxx X. Xxxxxxxx
