Exhibit 10.8(3)
EMPLOYMENT AGREEMENT
This Agreement is made this 10th day of December 1999 , by and between
SIERRA HEALTH SERVICES, Inc., a Nevada Corporation, of Las Vegas, Nevada
(hereinafter referred to as "Employer"), and Xxxxxxx X. Xxxxxxx , (hereinafter
referred to as "Employee").
WITNESSETH
WHEREAS, Employer is a publicly traded company engaged in the business of
providing managed health care services through subsidiary companies;
WHEREAS, Employee has expertise and experience in
providing managed health care services; and, WHEREAS, Employee has made and is
expected to continue to make a major contribution to the profitability, growth
and financial strength of Employer; NOW, THEREFORE, in consideration of the
mutual promises and agreements hereinafter set forth, Employer and Employee
agree as follows: ARTICLE I EMPLOYMENT/DUTIES AND POWERS 1. Employer hereby
employs, engages and hires Employee as Executive Vice President, Administrative
Services, and Employee hereby accepts and agrees to such hiring, engagement and
employment, subject to the general supervision and direction of Employer.
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2. Employee shall perform such duties as are assigned by the President of
Employer or his/her designee, and shall at all times faithfully and to the best
of his/her ability perform all the duties that may be required of Employee to
the reasonable satisfaction of Employer. Employee shall exercise only those
powers for signing contracts and conveyances in the ordinary course of business
as are expressly authorized by Employer's President or the appropriate Board of
Directors. Employee further agrees to participate in and assist in the
development of quality improvement programs offered by Employer.
ARTICLE II TERM OF EMPLOYMENT - TERM OF AGREEMENT 1. The term of employment
governed by this Agreement shall be for approximately a 5 year period starting
December 10, 1999 and terminating December 31, 2004 subject, however, to prior
termination as hereinafter provided in Article VII. Unless earlier terminated by
the mutual agreement of the parties hereto, this Agreement shall terminate at
December 31, 2004 or, if Employee has become entitled to any benefit under
Article VII due to termination of employment on or before December 31, 2004, at
such date as Employer has no further obligations to Employee under Article VII;
provided, however, that the provisions of Article V and Article VI (and this
clause of Article II) shall survive any termination of this Agreement.
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ARTICLE III COMPENSATION AND REVIEW
1. Employer shall pay Employee and Employee shall accept from Employer as
payment for Employee's services hereunder, compensation in the form of base
salary in the amount as set forth in Attachment A of this Agreement, payable at
such times as are deemed appropriate by Employer, but not less than twice a
month, and other compensation payable under this Agreement. 2. (a) Employer
shall reimburse Employee for all necessary and reasonable business expenses
incurred by Employee while performing services pursuant to Employer's direction.
(b) Employee agrees to maintain adequate records of expenses, in such detail as
Employer may reasonably request. 3. (a) Employee shall also be eligible for
those Employee fringe benefit programs, bonus plans, and stock option plans as
are made available to other employees of Employer at the same organizational
level, and as approved by the Board of Directors. (b) Except for Employee's
vested benefits under the Supplemental Executive Retirement Plan ("SERP"),
Employer may, at any time and at its sole discretion, amend any fringe benefit
programs, bonus programs, or stock option programs without prior notice to
Employee even though such an amendment may decrease the benefits available under
said programs. Notwithstanding this subparagraph, Employer shall have the right
to retroactively amend Employer's policies concerning vacation and paid time off
accruals.
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4. Employee's performance shall be reviewed at least annually based on
established job duties, goals and objectives and other reasonable standards as
deemed necessary and appropriate by Employer. ARTICLE IV OTHER EMPLOYMENT
Employee shall devote all of his time, attention, knowledge, and skills solely
to the business and interest of Employer, unless otherwise authorized by
Employer, and Employer shall be entitled to all of the income, benefits, or
profits arising from or incident to all work, work associations, services, or
advice of Employee, unless otherwise authorized in writing by Employer. Employee
shall not, during the term hereof, be interested in any manner, as partner,
officer, director, advisor, employee or in any other capacity in any other
business similar to Employer's business or any allied trade, or obtain any
interest adverse to Employer; provided, however, that Employee may provide
advice and consultation to other entities with the written approval of Employer,
and further provided, however, that nothing herein contained shall be deemed to
prevent or limit the right of Employee to invest any of his/her surplus funds in
the capital stock or other securities of any corporation whose stock or
securities are publicly owned or are regularly traded on any public exchange,
nor shall anything herein contained be deemed to prevent Employee from investing
or limit Employee's right to invest his/her surplus funds in real estate.
Employee shall complete a Conflict of Interest form by February 15 of each
calendar year and submit it to Employer for review. All conflicts of interest or
any potential conflicts of
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interest which arise during the year must be immediately reported to
Employer. All conflict of interest concerns must be resolved to the reasonable
satisfaction of Employer as a condition of continuation of employment.
ARTICLE V
BUSINESS SECRETS
1. Employee shall not at any time or in any manner, either directly or
indirectly, divulge, disclose or communicate to any person, firm or corporation,
in any manner whatsoever, any proprietary or confidential information concerning
any matter affecting or relating to the business of Employer or its
subsidiaries, including without limiting the generality of the foregoing, any of
their customers, the prices they obtain from providers or have obtained from the
sale of, or at which they sell or have sold, its services, or any other
information concerning the business of Employer or its subsidiaries, their
manner of operation, or their plans, if such a disclosure would be detrimental
to the business interests of Employer or its subsidiaries. 2. If Employee's
employment hereunder is terminated by either party at any time hereafter, then
Employee agrees to turn over to Employer all papers, documents, working papers,
correspondence, memos and any and all other documents in Employee's possession
relating to or concerning any matter affecting or relating to the business of
Employer or its subsidiaries.
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ARTICLE VI
NON-COMPETITION AGREEMENT
1. Employee acknowledges that in Employee's employment hereunder, Employee
will have continual contacts with the groups, members, and providers who are
covered by or associated with the managed health care programs offered by
Employer or its subsidiaries in Nevada and other states. In all of Employee's
activities, Employee, through the nature of Employee's work, will have access to
and will acquire confidential information related to the business and operations
of Employer and its subsidiaries, including, without limiting the generality of
the foregoing, member and group lists, and confidential information relating to
processes, plans, methods of doing business and special needs of doctors,
hospitals, members, groups, pharmacies, or other health care providers who
contract with Employer or its subsidiaries. Employee acknowledges that all such
information is the property of Employer or its subsidiaries solely and
constitutes confidential information of such parties; that the disclosure
thereof would cause substantial loss to the goodwill of Employer and its
subsidiaries; that disclosure thereof to Employee is being made only because of
the position of trust and confidence which Employee will occupy and because of
Employee's agreement to the restrictions herein contained; that his knowledge of
these matters would enable him, on termination of this Agreement, to compete
with Employer or its subsidiaries in a manner likely to cause Employer and its
subsidiaries irreparable harm, and disclosure of such matters would, likewise,
cause such
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harm; and that the restrictions imposed upon Employee herein would not
prohibit Employee in earning a living.
2. It is understood and agreed by Employee and Employer that the essence of
this Employment Agreement is the mutual covenants of the parties herein made,
that the present and future members and groups of Employer or its subsidiaries
will remain Employer's or its subsidiaries' members and groups during the term
of this Agreement and following its termination for any reason. In consideration
for the employment and continued employment of Employee by Employer, and also
for the amount received by Employee as compensation, Employee hereby irrevocably
warrants, covenants, and agrees as follows:
(a) during the term of Employee's employment and after leaving the
employment of Employer for any reason, whether involuntary or voluntary,
Employee will not take any action whatsoever which may or might disturb any
existing business relationship of Employer or its subsidiaries with any doctors,
groups, members, hospitals, pharmacies or other health care providers in Nevada
who contract with Employer or its subsidiaries;
(b) for a period of one (1) year after leaving the employment of Employer,
Employee will not solicit business from the members or groups of Employer or its
subsidiaries in Nevada, or in any manner disrupt any business relationship
Employer or its subsidiaries has with any contracted health care provider in
Nevada with whom Employee came in contact as an employee of Employer.
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(c) for a period of one (1) year after leaving the employment of Employer,
Employee will not, either directly or indirectly, work for any present or future
competitors of Employer operating in the state of Nevada who in any manner offer
any managed health care programs, insurance coverage, or administer health care
claims for employers. Such competitors shall include, but are not limited to,
HMOs, PPOs, insurance companies, utilization management companies, or third
party administrators.
3. The one (1) year period specified in this Article will be tolled during
any period of breach of any of the terms of Article VI by Employee.
4. Employee agrees that in the event of a breach of any term of this
Agreement, and more particularly, in the event of a breach of any of the terms
and provisions of Article VI, Employer shall be entitled to secure an order in
any suit brought for that purpose to enjoin Employee from violating any of the
provisions of the Agreement and that, pending the hearing and the decision on
the application for such order, Employer shall be entitled to a temporary
restraining order without prejudice to any other remedy available to Employer,
all at the expense of Employee should Employer prevail in such action. Employee
understands that the covenants of this Article are the essence of this
Employment Agreement, and without which no Employment Agreement with Employee
would be entered into by Employer.
5. The provisions of Article VI shall in no event be construed to be an
exclusive remedy and such remedy shall be held and construed to be cumulative
and not exclusive of any rights or
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remedies, whether in law or equity, otherwise available under the terms of
this Agreement or under the laws of the United States or the state of Nevada.
6. The covenants and agreements made by Employee in this Article VI shall
be construed as an agreement independent of any other provision in the Agreement
and the existence of any claim or cause of action by Employee against Employer,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by Employer, by injunctive relief or otherwise, of
the provisions of Article VI. The invalidity of all or any part of any section
or paragraph of this Article VI shall not render invalid the remainder of this
Article or any section hereof.
7. No failure or failures on the part of Employer to enforce any violation
by Employee of this Non-Competition Agreement, shall constitute a waiver of
Employer's rights thereafter to enforce all of the terms, covenants, provisions
and agreements herein contained.
ARTICLE VII
TERMINATION OF EMPLOYMENT
1. Termination of employment by either Employer or Employee shall follow
established Sierra Health Services Policies and Procedures including appropriate
notice, except as otherwise specifically set forth in this Article.
2. Employee may terminate employment hereunder with sixty (60) days prior
written notice. If Employee is terminated during such sixty (60) day notice
period, Employee shall be entitled to be paid his customary salary during the
remainder of the notice period. If Employee
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shall voluntarily terminate employment all eligible separation compensation
and benefits as are routinely made available to other employees of Employer at
the same organizational level, shall be paid or made available to Employee.
3. If Employer shall terminate Employee's employment hereunder, or
subsequent to the termination of this Agreement or any similar agreements,
without cause, except as otherwise set forth in Paragraphs 6 and 7 of this
Article, Employee shall be entitled to twelve (12) months salary and all other
separation compensation and benefits as are routinely made available to other
employees of Employer at the same organizational level.
4. In the event Employee's employment hereunder terminates for any reason
other than for cause, as set forth in Paragraph 6 of this Article, Employee and
his/her family shall be eligible to remain covered under Employer's health care,
dental, vision and life coverage program, at no expense, for a period of time
equal to Employee's length of service or until Medicare eligible, whichever
occurs first, following termination of such employment.
5. Notwithstanding any other provision in this Agreement to the contrary,
Employee hereby agrees that any separation compensation due to Employee, other
than accrued vacation, shall be paid out 25% after the first 30 days, 37 1/2%
after the first 60 days, and the remaining 37 1/2% at the end of 180 days,
except in the event of a change in control. Payment of such amounts shall fully
release Employer from any and all liability of Employer relating to this
Agreement or the employment hereunder. Any payments or such amounts which would
otherwise be payable after a change in control, or arising as a result of a
change in control, shall
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be made in a lump sum within five (5) business days following the date of
the change in control and shall, except as otherwise provided in any other
benefit program or in this Agreement, fully release Employer from any and all
liability of Employer relating to this Agreement or the employment hereunder.
6. If Employer shall terminate Employee's employment for Cause, which is
defined as (1) Employee's conduct that is materially detrimental to Employer's
reputation or business relationships, or (2) Employee's misappropriation of
Employer's funds, Employee shall be eligible for four (4) weeks salary and any
other separation compensation and benefits as are routinely made available to
other employees of Employer at the same organizational level, as full and final
payment under this Agreement. Payment of such amounts shall fully release
Employer from any and all liability of Employer relating to this Agreement or
the employment hereunder.
7. (a) If Employee is unable to perform Employee's duties hereunder, by
reason of illness or incapacity of any kind, for a period of more than twelve
(12) months in excess of accrued sick leave, Employee's employment hereunder may
be terminated by Employer at its absolute discretion with one week of prior
written notice.
(b) If Employee's illness or incapacity shall have ended, and Employee
shall have assumed Employee's duties hereunder, prior to the date specified in
the notice of termination, Employee shall be entitled to resume Employee's
employment hereunder as if such notice had not been given.
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8. In the event of a change in control of Employer, whereby any "person"
(as such term is used in Sections 3(a)(9) and 13(d)(3) of the Securities
Exchange Act of 1934) is or becomes the beneficial owner, directly or
indirectly, of securities of Employer representing 51% or more of the combined
voting power of the then outstanding securities of Employer, and such change in
control was not approved by a majority of the Board of Directors of Employer,
Employee, at his/her sole option, shall be entitled to terminate his/her
employment hereunder and, upon such termination, will be entitled to a cash
amount equal to (2.99) times Employee's current salary and the target annual
bonus for which Employee is eligible in the year of termination, together with
any other separation compensation and benefits as are routinely made available
to other employees of Employer at the same organizational level. Employee's
right to terminate under this Paragraph 8 may be exercised at the time of the
change in control or at any time within two years after the change in control,
including upon receipt of any notice that Employer has elected to terminate
Employee's employment without cause during such two-year period. Payment of such
amounts shall be made in a lump sum within five (5) business days following the
date such amounts become payable hereunder and shall, except as otherwise
provided in any other benefit program or in this Agreement, fully release
Employer from any and all liability of Employer relating to this Agreement or
the employment hereunder.
9. In the event of a change in control of Employer, whereby any "person"
(as such term is used in Sections 3(a)(9) and 13(d)(3) of the Securities
Exchange Act of 1934) is or becomes the beneficial owner, directly or
indirectly, of securities of Employer representing 51% or more
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of the combined voting power of the then outstanding securities of
Employer, and such change in control is approved by a majority of the Board of
Directors of Employer, Employee, at his/her sole option, shall be entitled to
terminate his/her employment hereunder and, upon such termination, will be
entitled to a cash amount equal to (2.99) times Employee's current salary and
the target annual bonus for which Employee is eligible in the year of
termination, together with any other separation compensation and benefits as are
routinely made available to other employees of Employer at the same
organizational level, if, within two (2) years after the effective date of the
change in control any one of the following occurs: (a) the assignment to
Employee of any duties inconsistent with Employee's position (including status,
offices, titles, and reporting requirements), authority, duties, or
responsibilities or any other action by Employer that results in a material
diminution in such position, authority, duties, or responsibilities, excluding
for this purpose an action not taken in bad faith and that is remedied by
Employer within 10 days after receipt of written notice by Employee; (b) a
reduction in Employee's annual base salary or target bonus; (c) the relocation
of Employer's principle executive offices to a location more than 75 miles from
the current location of such offices or (d), in the event such change in control
occurs within the final two years prior to the calendar date stated as the
termination date of the Agreement in Article II, and if, prior to such stated
termination date and prior to termination of Employee's employment, Employer has
not offered to enter into an extension of this employment agreement or a new
employment agreement providing benefits substantially equal to those under this
agreement for a term to extend until at least two years after
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the date of such change in control. In addition, if Employee's employment
hereunder is terminated for reasons other than those set forth in Paragraph 6 or
7 of this Article within two (2) years after the effective date of a change in
control which was approved by a majority of Employer's Board of Directors,
Employee shall be entitled to a cash amount equal to (2.99) times Employee's
current salary and the target annual bonus for which Employee is eligible in the
year of termination, together with all other separation compensation and
benefits as are routinely made available to other employees of Employer at the
same organizational level. Payment of such amounts shall be made in a lump sum
within five (5) business days following the date such amounts become payable
hereunder, and shall, except as otherwise provided in any other benefit program
or in this Agreement, fully release Employer from any and all liability of
Employer relating to this Agreement or the employment hereunder. 10. Anything
contained herein to the contrary notwithstanding in the event that Employer
shall discontinue operation of Employer other than as a result of a merger,
consolidation or acquisition, then this Agreement shall terminate and the
provisions of Article VI shall terminate as of the last day of the month in
which Employer ceases operation with the same force and effect as if such last
day of the month were originally set as the termination date hereof. 11. Any
amounts payable under this Article VII shall also be payable to Employee in the
event Employee is terminated without cause during the 90-day period prior to a
Change in Control.
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12. Whether or not Employee becomes entitled to any payments under
Paragraphs 1 through 11 of this Article VII, if any payments or benefits
received, or to be received, by Employee (including the vesting of any option
and other non-cash benefits and property), whether pursuant to any provision of
this Agreement or any other plan, arrangement or agreement with Employer or any
affiliated company, excluding the Gross-Up Payment described herein (such
payments and benefits being the "Total Payments"), will be subject to any excise
tax imposed under section 4999 of the Internal Revenue Code of 1986, as amended
(such excise tax, including penalties and interest thereon, being the "Excise
Tax"), Employer shall pay to Employee an additional amount (the "Gross-Up
Payment") such that the net amount retained by Employee, after reduction for any
Excise Tax on the Total Payments and any federal and Excise Tax on the Gross-Up
Payment, shall be equal to the sum of (i) the Total Payments plus (ii) any
deductions disallowed for federal income tax purposes because of the inclusion
of the Gross-Up Payment in Executive's adjusted gross income multiplied by the
Executive's highest marginal rate of federal income taxation for the calendar
year in which the Gross-Up Payment is to be made.
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ARTICLE VIII
EFFECT OF WAIVER
The waiver by either party of a breach of any provision of this agreement
shall not operate or be construed as a waiver of any subsequent breach thereof.
ARTICLE IX
ACTUAL ATTORNEY'S FEES EXPENDED
Employer and Employee agree that all attorneys fees expended by either
party in any dispute, arbitration or litigation concerning this Agreement will
be paid by the losing party in that dispute, arbitration or litigation.
ARTICLE X
NOTICE
Any and all notices referred to herein shall be sufficient if furnished in
writing, sent by registered mail to the representative parties at the addresses
subscribed below their signatures to this Agreement.
ARTICLE XI
ASSIGNMENT
The rights, benefits and obligations of Employee under this Agreement shall
be assignable, and all covenants and agreements hereunder shall inure to the
benefit of and be enforceable by or against Employer's successors or assigns.
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ARTICLE XII
ENTIRE AGREEMENT
This Agreement contains the entire Agreement between the parties, and the
parties hereby agree that no other oral representations or agreements have been
entered into in connection with this transaction.
ARTICLE XIII
AMENDMENT
No amendment or modification of this Agreement shall be deemed effective,
unless or until, it is executed in writing by the parties hereto.
ARTICLE XIV
VALIDITY
This Agreement, having been executed and delivered in the State of Nevada,
its validity, interpretation, performance and enforcement will be governed by
the laws of that state.
ARTICLE XV
SEVERABILITY
It is mutually agreed that all of the terms, covenants, provisions, and
agreements contained herein are severable and that, in the event any of them
shall be held to be invalid by any competent court, this Agreement shall be
interpreted as if such invalid term, covenant, provision, or agreement were not
contained herein.
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ARTICLE XVI
FORUM
The parties hereto consent and agree that any action to enforce this
Agreement or any provision therein or any rights hereunder or any action
relating to the employment of Employee with Employer shall be brought in the
State of Nevada.
ARTICLE XVII
INDEMNIFICATION
Employer shall indemnify Employee whether or not then in office, to the
fullest extent provided for in Employer's Articles of Incorporation or Bylaws,
as in effect, or as may thereafter be amended, modified or revised from time to
time (collectively, "Employer's Articles"), or permitted under the law of Nevada
or such other state in which Employer may hereafter be domiciled, against any
and all costs, claims, judgments, fines, settlements, liabilities, and fees or
expenses (including, without limitation, reasonable attorneys' fees) incurred in
connection with any proceedings (including without limitation, threatened
actions, suits or investigations) arising out of, or relating to, Employee's
actions or in actions as a director, officer or employee of Employer at any
point during his employment by or service to Employer, whether under this
Agreement, any prior employment agreements or otherwise. The indemnification
contemplated under this Section shall be provided to Employee unless, at the
time indemnification is sought, such indemnification would be prohibited under
the law of
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Nevada or of the state in which Employer may then be domiciled; Employer
may rely on the advice of its counsel in determining whether indemnification is
so prohibited.
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IN WITNESS WHEREOF, the parties have executed this Agreement at Las Vegas,
Nevada, on the day of , 19 .
SIERRA HEALTH SERVICES, INC.
By:______________________________
President
P. O. Xxx 00000
Xxx Xxxxx, XX 00000-0000
EMPLOYEE
By:______________________________
Xxxxxxx X. Xxxxxxx
0000 Xxxxx Xxx
Xxx Xxxxx, XX 00000
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