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Exhibit 10.27
CHANGE IN CONTROL AGREEMENT
THIS FIRST AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT, made as of
the 30th day of September, 1999, by and between Balanced Care Corporation, a
Delaware corporation with a principal office at 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx,
XX, 00000 (the "Company") and Xxxxxx X. Xxxxxx, an individual health care
executive (the "Executive").
Reference is made to that certain Change in Control Agreement dated
June 24, 1998, by and between the Company and the Executive (the "Existing
Agreement").
WITNESSETH:
WHEREAS, the Company and the Executive desire to amend and restate the
terms and conditions of the Existing Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, receipt and sufficiency of
which are hereby acknowledged, the Company and the Executive agree to amend and
restate the Existing Agreement in its entirety and to that end agree that this
First Amended and Restated Change in Control Agreement shall be deemed effective
on and as of the date hereof, shall supersede the Existing Agreement in its
entirety and shall be referred to herein as the "Agreement".
The Company and the Executive covenant and agree as follows:
1. Employment. The company hereby employs Executive as an employee at
will and Executive hereby accepts employment by the Company subject to all of
the terms and conditions set forth in that certain employment offer letter dated
June 23, 1998, as such terms and conditions may be modified hereby.
2. Change in Control (Other than due to the Sale of the Missouri
Division). The Executive shall be entitled to receive a Severance Payment if,
within one (1) year following a Change in Control as defined in Sections
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4(II)(ii.) and 4(II)(iii.) below, there occurs any of the following events:
(I) any termination of the Executive except for Cause;
(II) any material reduction in the Executive's
responsibilities (including reporting
responsibilities) or authority, including as such
responsibilities or authority may be increased from
time to time;
(III) the assignment to the Executive of duties
inconsistent with the Executive's office on the date
of the Change in Control or as same may be increased
from time to time after the Change in Control;
(IV) any material reduction (including, after the Change
in Control, proportional reductions affecting all
employees or executive employees) in the Executive's
annual Base Salary in effect on the date of the
Change in Control or as same may be increased from
time to time after the Change in Control;
(V) any failure (including, after the Change in
Control, proportional failures affecting all
executive employees) to continue the Executive's
participation on substantially similar terms in the
Plan (as defined below) or any bonus plan in which
the Executive participated at the time of the Change
in Control or any change or amendment to any
substantive provisions of any such plan which would
materially decrease the potential benefits to the
Executive under any of such plans;
(VI) any failure (including, after the Change in
Control, a proportional failure affecting all
executive employees) to provide the Executive with
benefits at least favorable as those enjoyed by the
Executive under any of the Company's pension, life
insurance, medical, health and accident or other
employee plans in which the Executive
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participated at the time of the Change in Control, unless such
reduction relates to a reduction in benefits applicable to all
employees generally; and
(VII) in the event of any of the events described in (II) through
(VI) above, the Executive voluntarily terminates his employment
under this Agreement as a result of such events(s).
As used in this Section 2, the definition of "Change in Control" shall
expressly exclude the definition set forth in Section 4(II)(i.) below.
3. Change in Control due to the Sale of the Missouri Division. The
Executive shall be entitled to receive the Missouri Severance Payment if, within
one (1) year following a Change in Control as defined in Section 4(II)(i.)
below, there occurs any of the following events:
(I) any termination of the Executive except for Cause;
(II) any material reduction in the Executive's responsibilities or
authority, including as such responsibilities or authority may
be increased from time to time;
(III) the assignment to the Executive of duties inconsistent with the
Executive's office on the date of the Change in Control or as
same may be increased from time to time after the Change in
Control;
(IV) any material reduction (including, after the Change in Control,
proportional reductions affecting all employees or executive
employees) in the Executive's annual Base Salary in effect on
the date of the Change in Control or as same may be increased
from time to time after the Change in Control;
(V) any failure (including, after the Change in Control,
proportional failures affecting all executive employees) to
continue the Executive's participation on substantially similar
terms in any bonus plan in which the
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Executive participated at the time of the Change in Control or
any change or amendment to any substantive provisions of any
such plan which would materially decrease the potential
benefits to the Executive under such plan;
(VI) any failure (including, after the Change in Control, a
proportional failure affecting all executive employees) to
provide the Executive with benefits at least favorable as those
enjoyed by the Executive under any of the Company's pension,
life insurance, medical, health and accident or other employee
plans in which the Executive participated at the time of the
Change in Control, unless such reduction relates to a reduction
in benefits applicable to all employees generally; and
(VII) in the event of any of the events described in (II) through
(VI) above, the Executive voluntarily terminates his employment
under this Agreement as a result of such events(s).
In addition, upon the occurrence of a Change in Control as defined in
Section 4(II)(i.) below, all outstanding stock options granted to Executive as
of the date of the Change in Control, if any, under the Plan shall immediately
become vested and shall be exercisable for a one-year period following the date
of the Change in Control in accordance with the provisions of the Plan.
As used in this Section 3, the definition of "Change in Control" shall
expressly exclude the definitions set forth in Sections 4(II)(ii.) and
4(II)(iii.) below.
4. Definitions. As used in this Agreement, the following terms shall
have the meanings set forth below:
(I) "Cause" shall mean willful misconduct, intentional and material
failure to perform duties under this Agreement by Executive or
Executive's conviction of a felony. No termination for cause
shall be effective unless and until Executive is given written
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notice that the act or omission constitutes "Cause" under this
Agreement and Executive is given an opportunity to correct or
cure the particular act or omission within thirty (30) days
after receipt by the Executive of such written notice from the
Company.
(II) A "Change in Control" shall be deemed to have taken place if:
(i.) the Company consummates the sale of all of the stock or
all of the assets of its Missouri Division; (ii.) any person,
including a group but not excluding the Company or any current
stockholder of the Company who beneficially owns five percent
(5%) or more of the Company's outstanding shares, becomes the
beneficial owner of shares of the Company having twenty percent
(20%) or more of the total number of votes that may be cast for
the election of directors; or (iii.) there occurs any cash
tender or exchange offer for shares of the Company, merger or
other business combination, sale of assets or contested
election, or any combination of the foregoing transactions, and
as a result of or in connection with any such event persons who
were directors of the Company before the event shall cease to
constitute a majority of the Board of Directors of the Company
or any successor to Company. As used herein, the terms "person"
and "beneficial owner" have the same meaning as under Section
13(d) of the Securities Exchange Act of 1934 and the rules and
regulations thereunder.
(III) A "Severance Payment" shall include the following: (1) all
outstanding stock options granted to Executive as of the date
of termination, if any, under the Company's 1996 Stock
Incentive Plan, as such plan may be amended from time to time
(the "Plan"), shall immediately become vested and shall be
exercisable in accordance with the provisions of the Plan; and
(2) a lump sum cash payment, payable within thirty (30) days of
termination of employment, equal to
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the sum of a) the amount determined by adding Executive's
annual Base Salary then in effect on the date of termination
and b) the maximum amount of Executive's potential Annual Bonus
percentage payable for the year in which the termination took
place.
(IV) The "Missouri Severance Payment" shall include the following:
(1) a lump sum cash payment, payable within thirty (30) days of
termination of employment, equal to the sum of a) the amount
determined by adding Executive's annual Base Salary then in
effect on the date of termination and b) the maximum amount of
Executive's potential Annual Bonus percentage payable for the
year in which the termination took place.
5. Notice of Termination. Any notice of termination of Employment
Rights of Executive shall be given by the Company in writing and delivered by
hand delivery or by registered or certified mail, return receipt requested,
postage prepaid, at such address as Executive shall have furnished to the
Company in writing.
6. Non-Competition and Non-Solicitation. As further consideration for
Company's provision of this Agreement to Executive, Executive agrees as follows:
(a) Restrictions on Competition. While employed by Company and for a
period of one (1) year following termination of Executive's employment,
Executive agrees that he will not directly or indirectly own an
interest in, manage or control, or provide consulting services or
services as an employee or partner, to a business engaged in managing,
leasing, owning or operating assisted living facilities, nursing home
or sub-acute operations (the "Business Activities") within a sixty (60)
mile radius of a Company facility existing or under active development
at the time of such termination.
(b) Restriction on Solicitation. While employed by Company and for a
period of one (1) year following termination of Executive's employment,
Executive agrees that he will not: (i) directly or indirectly solicit
or encourage the Company's customers to deal
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with Executive or any other third party other than the Company or (ii)
directly or indirectly solicit for Executives benefit or for the
benefit of any third party the employment or services of any then
current employee of Company.
(c) Listed Stock Ownership Exception. Nothing in this Section 6 shall
prohibit Executive from owning stock in a public traded company as a
passive investor provided that Executive shall not own more than five
percent (5%) of the equity of a publicly traded competing enterprise of
the Company's.
7. Successors.
(a) This Agreement is personal to Executive and shall not be assignable
by the Executive otherwise than by his will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to
assume expressly and agree to perform this Agreement in the same manner
and to the same extent that Company would be required to perform it if
no such succession had taken place. As used in this Agreement, the
Company shall mean the Company as hereinbefore defined, together with
its wholly-owned subsidiaries, and any successor to the business and/or
assets as aforesaid which assumes and agrees to perform this Agreement
by operation of law or otherwise.
8. Entire Agreement. This writing represents the entire agreement and
understanding between the parties with respect to the subject matter contained
herein and may not be altered or amended except in a writing signed by both
parties.
9. Unenforceability. If any provision of this Agreement shall be
adjudged by any court of competent
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jurisdiction to be invalid or unenforceable for any reason, such judgment shall
not affect, impair or invalidate the remainder of this Agreement.
10. Waiver. The failure of the parties to insist upon strict compliance
with any provision hereof or the failure to assert any right the parties may
have hereunder shall not be deemed to be a waiver of such provision or right or
any other provision or right thereof by the parties.
11. Counterparts. This Agreement may be executed by the parties in two
or more counterparts, each of which shall be deemed to be an original, but all
such counterparts shall constitute one and the same instrument.
12. Headings. The headings of the sections and subsections of this
Agreement are for convenience only and shall not control or affect the meaning
or construction or limit the scope or intent of any of the provisions of this
Agreement.
13. Governing Law. This Agreement has been negotiated and executed
within the Commonwealth of Pennsylvania and shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ATTEST: BALANCED CARE CORPORATION
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxx Xxxx X. Xxxxxxxxx
Assistant Secretary Chief Executive Officer
WITNESS: EXECUTIVE
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
