EXHIBIT 10.03(d)(ii)
EMPLOYMENT AGREEMENT
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THIS AGREEMENT made and entered into as of the 30th day of April, 1996, by
and between COMMUNITY CARE OF AMERICA, INC., a Delaware corporation,
(hereinafter referred to as the "Company"), and XXXXX X. XXXXX (hereinafter
referred to as the "Employee").
W I T N E S S E T H:
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WHEREAS, the Employee is employed by the Company pursuant to an
Employment Agreement, dated as of June 26, 1995 (the "Employment Agreement");
and
WHEREAS, the Company and the Employee desire to amend and restate the
Employment Agreement on the terms and conditions set forth herein; and
WHEREAS, the Company is engaged in the business of owning and
operating rural health care facilities and networks through its subsidiaries and
tradenames; and
WHEREAS, in the course of his employment, and as a necessary
consequence thereof, Employee will receive information and acquire knowledge of
special procedures, processes, business conduct, and knowledge that is private,
proprietary, and secret to the Company in its business; and
WHEREAS, the business, as well as the success and profits of the
Company, depend in large part upon the maintenance of secrecy as to such
information, processes, procedures and knowledge as to the conduct of the
Company's business generally.
NOW, THEREFORE, in consideration of the foregoing premises, the
mutual agreements herein contained, as well as the agreement to employ the
Employee or to continue to employ the Employee under the terms and conditions
contained herein, and intending to be legally bound hereby, it is agreed between
the parties hereto as follows:
ARTICLE I
EMPLOYMENT RELATIONSHIP
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1.1 Employment. The Company hereby employs the Employee in the
position of Executive Vice President and Chief Financial Officer of the Company,
with such responsibilities as may be assigned to Employee from time to time by
the Chief Executive Officer of the Company. Employee shall report to and be
responsible to the Chief Executive Officer of the Company, for the period
hereinafter set forth, and the Employee hereby accepts such employment.
1.2 Exclusive Employment. During the continuation of the Employee's
employment by the Company hereunder, the Employee will, unless the Employee has
first received the prior written consent of the Company, devote the Employee's
entire business time, energy, attention, and skill to the services of the
Company and to the promotion of its interests, and covenants that during such
time the Employee will neither: (a) engage in, be employed by, be a director of
or be otherwise directly or indirectly interested in (i) any business or
activity competing with or of a nature similar to the businesses of the Company,
or (ii) any business or activity engaged in the owning, operation or management
of business or activity competing with or of a nature similar to the businesses
of the Company, nor (b) take any part in any activities detrimental to the best
interests of the Company.
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ARTICLE II
PERIOD OF EMPLOYMENT
2.1 Term. The term of employment under this Agreement shall begin as
of the date hereof, and shall end on June 26, 1997, unless sooner terminated
pursuant to the terms of this Agreement. Six (6) months prior to the expiration
of this Agreement, at the request of Employee, Company will discuss with
Employee Company's intentions regarding the renewal of this Agreement.
2.2 Termination For Cause. Company may terminate this Agreement with
cause and without any obligation to pay Employee further compensation upon the
occurrence of any one or more of the following events:
(a) Employee willfully or repeatedly fails to perform any
of his duties in any material respect or willfully or repeatedly
breaches any material term of this Agreement, which failure,
non-performance or breach is not corrected within fifteen (15) days
after written notice is delivered by the Company to the Employee
specifying said failure, non-performance or breach.
(b) Employee becomes disabled or is unable to perform his
normal duties, which condition persists for a period of sixty (60)
days or more, provided that Company has provided Employee with
disability insurance which shall begin to pay after said sixty (60)
day period expires, and provided further that, to any extent that the
disability insurance benefits payable to Employee are less than the
base salary being paid to Employee as of the date on which his
employment terminated, the Company shall continue payment of
Employee's salary to the extent of such deficiency until the date
which is two (2) years following the date of this Agreement;
(c) Employee is convicted of a felony;
(d) Employee is convicted of theft, larceny or
embezzlement of Company's tangible or intangible
property.
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2.3 Death of the Employee. In the event of the death of the Employee
during the term of his employment hereunder, this Agreement shall terminate
immediately and the Employee's estate shall thereupon be entitled to receive
such portion of the Employee's Base Salary as has been accrued through the date
of his death.
2.4 Change of Control.
(a) In the event of a Change of Control of the Company
during the term of the Employee's employment hereunder, the Employee
shall have the right, upon the giving of thirty (30) days' notice to
the Company within one hundred eighty (180) days following such
event, to terminate his employment under this Agreement. For purposes
of this Agreement, a "Change of Control of the Company" shall be
deemed to occur if (i) there shall be consummated (x) any
consolidation or merger of the Company in which the Company is not
the continuing or surviving corporation other than a merger of the
Company in which the holders of the Company's Common Stock
immediately prior to the merger have the same proportionate ownership
of common stock of the surviving corporation immediately after the
merger, or (y) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, or (ii) the
stockholders of the Company shall approve any plan or proposal for
liquidation or dissolution of the Company, or (iii) any person (as
such 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
Xxxxxx X. Xxxxxx or any institutional investor, shall become the
beneficial owner (within the meaning of Rule 13-d3 under the Exchange
Act) of 20% or more of the Company's outstanding Common Stock, or
(iv) Xxxxxx X. Xxxxxx shall cease to be a director of the Company.
(b) In the event that the Employee elects to terminate his
employment hereunder pursuant to Paragraph 2.4(a), above, the Company
shall pay to the Employee one hundred (100%) percent of his then
current Base Salary for a period of thirty-six (36) months following
the date of such termination, and all stock options granted to the
Employee pursuant to Section 3.5(a) hereof, and all options granted
to the Employee pursuant to Section 3.5(b) hereof for which the
vesting schedule has been accelerated in accordance with such Section
3.5(b), shall become fully vested as of the date of such termination.
(c) Notwithstanding anything herein to the contrary, the
present value of the payments and benefits to Employee, whether under
this Agreement or otherwise, which are includable in the computation
of "parachute payments" (as defined in Section 280G of the Internal
Revenue Code) shall not exceed 2.99 times the Employee's base amount,
all within the meaning and as computed under Section 280G of the
Code. Such determination shall be made by the regular independent
accountants retained by the Company immediately prior to the Change
of Control, whose determination shall be conclusive and binding on
the parties.
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2.5 Continuation of Benefits. Whenever under the provisions of this
Agreement the Employee shall be entitled to receive a continuation of his Base
Salary for a period of time following a termination or nonrenewal of his
employment under this Agreement, it is agreed that the Company also shall
continue to pay for or provide during such period of salary continuation the
insurance coverage provided for in Paragraph 3.3 of this Agreement.
2.6 Acceleration of Payments. If the Company fails to pay any salary
continuation installment referred to in this Article II or any benefit referred
to in Paragraph 2.5 within thirty (30) days after notice from the Employee or
his personal or legal representative that the installment or benefit was due and
payable, then the Employee or his personal or legal representative may declare
the entire unpaid balance of the salary continuation installments and the value
of all unpaid benefits to be immediately due and payable.
2.7 Death or Disability. The right of the Employee or his estate, as
of the case may be, to salary continuation installments under this Article II
shall not be affected by the Employee's death or disability after her employment
has terminated; and the Company shall continue to make those payments, until the
full amount thereof has been paid, notwithstanding the death or disability of
the Employee after the termination of this employment.
2.8 Acceleration of Options. If the Company terminates the Employee
without cause, all options which the Employee then holds to acquire securities
from the Company shall be accelerated and shall be immediately exercisable.
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ARTICLE III
COMPENSATION
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3.1 Base Salary. For all services rendered by Employee under this
Agreement, the Employee shall receive a base salary at a rate of $210,000.00 per
year ("Base Salary"). Employee's Base Salary shall be payable in accordance with
the pay period policy established by the Company from time to time. Said Base
Salary shall be reviewed one (1) year after the date hereof, and shall be
increased (i) by a percentage equal to the CPI percentage increase during the
first year of this Agreement and (ii) by such additional amount, if any, as may
be determined at the discretion of the Board of Directors of the Company.
3.2 Bonuses. Within ninety (90) days of the close of each calendar
year, the Company shall pay to Employee a cash bonus of up to thirty-five (35%)
percent of Employee's Base Salary for such year, such cash bonus to be
determined at the discretion of the Board of Directors of the Company.
3.3 Additional Benefits. Separate and apart from the Employee's cash
compensation as set forth above, the Company shall provide for (i) Employee's
coverage under the Company's standard life and health insurance package for
executives, (ii) an automobile allowance of $750 per month, and (iii) four (4)
weeks' paid vacation. Notwithstanding the foregoing, Employee has elected to
maintain his health insurance coverage under COBRA through June 30, 1996, in
addition to his coverage under the Company's health insurance plan. In
connection with the aforementioned maintenance of employee's health insurance
coverage under COBRA, Company shall pay the premiums with respect thereto during
the period of such maintenance, up to a maximum of $6,000 over such period.
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3.4 Reimbursement of Expenses. The Company shall reimburse Employee
at the rate of $.29 per mile for business use of his automobile, and for all
reasonable and necessary business expenses subject to such budgets and
documentation requirements as may be mandated from time to time by the Company.
ARTICLE IV
COVENANTS OF THE EMPLOYEE
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4.1 Ownership and Return of Documents. The Employee agrees that all
memoranda, notes, records, papers or other documents and all copies thereof
relating to the Company's operations or businesses, some of which may be
prepared by the Employee, and all objects associated therewith in any way
obtained by the Employee shall be the Company's property. The Employee shall
not, except for Company's use, copy or duplicate any of the aforementioned
documents or objects, nor remove them from the Company's facilities nor use any
information concerning them except for the Company's benefit, either during the
Employee's employment or thereafter. The Employee agrees that the Employee will
deliver all of the aforementioned documents and objects that may be in his
possession to the Company on termination of the Employee's employment, or at any
other time on the Company's request, together with the Employee's written
certification of compliance with the provision of this paragraph.
4.2 Confidential Information. In connection with employment at the
Company, Employee will have access to confidential information consisting of
some or all of the following categories of information. Company and Employee
consider their relation one of confidence with respect to such information:
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(a) Financial Information, including but not limited to
information relating to the Company's earnings, assets, debts,
prices, pricing structure, volume of purchases or sales or other
financial data whether related to the Company or generally, or to
particular products, services, geographic areas, or time periods;
(b) Supply and Service Information, including but not
limited to information relating to goods and services, suppliers'
names or addresses, terms of supply or service contracts or of
particular transactions, or related information about potential
suppliers to the extent that such information is not generally known
to the public, and to the extent that the combination of suppliers or
use of a particular supplier, though generally known or available,
yields advantages to the Company details of which are not generally
known;
(c) Marketing Information, including but not limited to
information relating to details about ongoing or proposed marketing
programs or agreements by or on behalf of the Company, sales
forecasts, advertising formats and methods or results of marketing
efforts or information about impending transactions;
(d) Personnel Information, including but not limited to
information relating to employees' personal or medical histories,
compensation or other terms of employment actual or proposed
promotions, hirings, resignation, disciplinary actions, terminations
or reasons therefor, training methods, performance, or other employee
information; and
(e) Customer Information, including but not limited to
information relating to past, existing or prospective customers'
names, addresses or backgrounds, records of agreements and prices,
proposals or agreements between customers and the Company, status of
customers' accounts or credit, or related information about actual or
prospective customers as well as customer lists.
All of the foregoing are hereinafter referred to as "Trade Secrets."
During and after the employment by the Company, regardless of the reasons that
such employment ends, Employee agrees:
(aa) To hold all Trade Secrets in confidence and not
discuss, communicate or transmit to others, or make any unauthorized
copy of or use the Trade Secrets in any capacity, position or
business except as it directly relates to Employee's employment by
the Company;
(bb) To use the Trade Secrets only in furtherance of proper
employment related reasons of the Company to further the interests of
the Company;
(cc) To take all reasonable actions that Company deems
necessary or appropriate, to prevent unauthorized use or disclosure
of or to protect the Company's interest in the Trade Secrets; and
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(dd) That any of the Trade Secrets, whether prepared by
Employee or which may come into Employee's possession during
Employee's employment hereunder, are and remain the property of the
Company and its affiliates, and all such Trade Secrets, including
copies thereof, together with all other property belonging to the
Company or its affiliates, or used in their respective businesses,
shall be delivered to or left with the Company.
This Agreement does not apply to information that (i) becomes
generally available to the public other than as a result of a disclosure by
Employee, (ii) was available to Employee on a non- confidential basis prior to
the disclosure of such information to Employee by the Company, provided that the
source of such information was not known by Employee to be bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any of its affiliates with
respect to such material, (iii) becomes available to Employee on a
non-confidential basis from a source other than the Company or its agents,
advisors or representatives provided that the source of such information was not
known by Employee to be bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Company or
any of its affiliates with respect to such material, or (iv) is required to be
disclosed by judicial or administrative proceedings after Employee diligently
tries to avoid each disclosure and affords the Company the opportunity to obtain
assurance that compelled disclosures will receive confidential treatment.
4.3 Non-Solicitation and Non-Pirating. At all times following a
termination or the natural expiration of this Agreement, the Employee hereby
agrees that, without the express written consent of the Company, the Employee
will not, directly or indirectly, for the Employee or on behalf of any other
person, firm, entity or other enterprise:
(a) solicit any client or customer of the Company or in any
way divert or take away any client or customer of the Company who was
a client or customer of the Company while the Employee was an
employee of the Company under this Agreement (such period being
hereinafter referred to as the "Employment Period"); and
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(b) hire, entice away or in any other manner persuade any
employee, client, or customer of the Company who was an employee of
the Company during the Employment Period, to alter, modify or
terminate their relationship with the Company as an employee as the
case may be.
4.4 Non-Competition. In consideration of the Employee's employment
hereunder, and as an inducement to the execution and performance of the
Employment Agreement by the Company, the Employee hereby agrees that, for a
period of three (3) years following the natural expiration or any termination of
this Agreement, the Employee will not, without the express written consent of
the Company, directly or indirectly, for the Employee or on behalf of any other
person, firm, entity or other enterprise, be employed by, be a director or
manager of, act as a consultant for, be a partner in, have a proprietary
interest in, give advice to, loan money to or otherwise associate with, any
person, enterprise, partnership, association, corporation, joint venture or
other entity which is directly or indirectly in the business of providing
nursing home care, assisted living care, senior housing, home health care, adult
day care, primary care clinic services or medical transportation services of any
type within a twenty-five (25) mile radius of any nursing home or other health
care facility which is owned or operated by the Company as of the date on which
this Agreement shall have expired or terminated. Notwithstanding the foregoing,
in the event the Company terminates this Agreement other than pursuant to
Paragraph 2.2, above, Employee shall be bound by the non-competition
restrictions of this Paragraph 4.4 only for so long as Company elects to
continue to pay Employee's Base Salary hereunder, which election shall be at
Company's sole option. The provisions of this Paragraph 4.4 shall not be
construed to prohibit the Employee from owning up to 2% of the issued shares of
any company whose common stock is listed for trading on any national securities
exchange or on the NASDAQ National Market System.
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4.5 Necessary Restrictions. The Employee acknowledges that the
restrictions contained in Paragraphs 4.3 and 4.4 are reasonable and necessary to
protect the legitimate business interests of the Company and that any violation
thereof by him would result in irreparable harm to the Company. Accordingly, the
Employee agrees that upon the violation by his of any of the restrictions
contained in Paragraphs 4.3 or 4.4, the Company shall be entitled to obtain from
any court of competent jurisdiction a preliminary and permanent injunction as
well as any other relief provided at law, equity, under this Agreement or
otherwise. In the event any of the foregoing restrictions are adjudged
unreasonable in any proceeding, then the parties agree that the period of time
or the scope of such restrictions (or both) shall be adjusted to such a manner
or for such a time (or both) as is adjudged to be reasonable.
4.6 Prior Companies. Employee hereby represents and warrants to the
Company that (i) he is not bound by any agreement with any prior employer or
other party to refrain from using or disclosing any confidential information or
from competing with the business of such employer or other party, (ii) his
performance under this Agreement will not breach any other agreement by which he
is bound, and (iii) he has not brought with his to the Company, nor will he
bring or use in the performance of his responsibilities at the Company, any
materials or documents of a former employer which are not generally available to
the public.
4.7 Remedies For Breach. The Employee acknowledges that the covenants
contained in Article IV of this Agreement are independent covenants and that any
failure by the Company to perform its obligations under this Agreement (other
than the act of nonpayment which is not cured by the Company within thirty (30)
days of the receipt of written notice of said condition from the Employee) shall
not be a defense to enforcement of the covenants contained in Article
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IV, including but not limited to a temporary or permanent injunction. The
Employee acknowledges that damages in the event of Employee's breach of this
Article IV will be difficult, if not impossible, to ascertain and it is
therefore agreed that the Company, in addition to, and without limiting any
other remedy or right it may have, shall have the right to an injunction
enjoining the said breach. Employee agrees to reimburse Company for all costs
and expenses, including reasonable attorney's fees, incurred by Company because
of any breach of this Article.
ARTICLE V
ASSIGNMENT
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5.1 Prohibition of Employment Assignment. The Employee agrees on
behalf of the Employee and the Employee's heirs and executors, personal
representatives, and any other person or persons claiming any benefit under the
Employee by virtue of this Agreement, that this Agreement and the rights,
interests, and benefits hereunder shall not be assigned, transferred, pledged or
hypothecated in any way by the Employee or the Employee's heirs, executors and
personal representatives, and shall not be subject to execution, attachment or
similar process. Any attempt to assign, transfer, pledge, hypothecate or
otherwise dispose of this Agreement or any such rights, interests and benefits
thereunder contrary to the foregoing provision, or the levy of any attachment or
similar process thereupon shall be null and void and without effect and shall
relieve the Company of any and all liability hereunder.
5.2 Right of Company to Assign. This Agreement shall be assignable
and transferable by the Company to Company's transferee, assignee or any
successor-in-interest, parent, subsidiary or affiliate of Company, and shall
inure to the benefit of and be binding upon the Employee, the Employee's heirs
and personal representatives, and the Company and its successors and assigns.
Employee agrees to execute all documents necessary to ratify and effectuate such
assignment.
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5.3 Binding Effect If Transferred. In the event this Agreement is
transferred by Company, the term "Company" and "Company" used herein shall refer
to and be binding upon the Company's transferee or assignee.
ARTICLE VI
GENERAL
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6.1 Governing Law. This Agreement shall be subject to and governed by
the laws of the State of Florida, irrespective of the fact that the Employee may
be a resident of a different state.
6.2 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Company and the Employee and their respective heirs, legal
representatives, executors, administrators, successors and permitted assigns.
6.3 Entire Agreement. This Agreement constitutes the entire Agreement
between the parties and contains all of the agreements between the parties with
respect to the subject matter hereof; this Agreement supersedes any and all
other agreements, either oral or in writing, between the parties hereto with
respect to the subject hereof. No change or modification of this Agreement shall
be valid unless the same be in writing and signed by both parties hereto. No
waiver of any provisions of this Agreement shall be valid unless in writing and
signed by the person or party to be charged.
6.4 Severability. If any portion of this Agreement shall be for any
reason, invalid or unenforceable, the remaining portion or portions shall
nevertheless be valid, enforceable and carried into effect, unless to do so
would clearly violate the present legal and valid intention of the parties
hereto.
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6.5 Notices. All notices, demands, requests, consents, approvals or
other communications required or permitted hereunder shall be in writing and
shall be delivered by hand, registered or certified mail with return receipt
requested or by a nationally recognized overnight delivery service, in each case
with all postage or other delivery charges prepaid, and to the address of the
party to whom it is directed as indicated below, or to such other address as
such party may specify by giving notice to the other in accordance with the
terms hereof. Any such notice shall be deemed to be received (i) when delivered,
if by hand, (ii) on the next business day following timely deposit with a
nationally recognized overnight delivery service, or (iii) on the date shown on
the return receipt as received or refused or on the date the postal authorities
state that delivery cannot be accomplished, if sent by registered of certified
mail, return receipt requested.
If to the Company: Community Care of America, Inc.
0000 X. Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attn: President
If to the Employee: Xxxxx X. Xxxxx
000 Xxxxx Xxxxxx'x Xxxxx
Xxxxxx, Xxxxxxx 00000
6.6 Independent Legal Counsel. Employee represents and warrants that
he has had the opportunity to seek the advice of independent legal counsel prior
to signing this Agreement, and that the Company has recommended to his that he
obtain such counsel.
6.7 Attorney's Fees. In the event of litigation concerning this
Agreement, the prevailing party shall be entitled to collect from the losing
party attorney's fees and costs, including those on appeal.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
signed by its duly authorized officers and its corporate seal to be hereunto
affixed, and the Employee has hereunto set Employee's hand on the day and year
first above written.
COMPANY EMPLOYEE
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COMMUNITY CARE OF AMERICA, INC.
a Delaware Corporation
By: /s/ Xxxx X. Xxxxxxxxx /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Name: Xxxx X. Xxxxxxxxx
---------------------------------
Title: President & CEO
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