EXHIBIT 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Amended and Restated Employment Agreement, dated as of November 1,
2001, by and between NATIONAL HOME HEALTH CARE CORP., with offices at 000 Xxxxx
Xxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000 (hereinafter called "Company"), and
XXXXXXXXX X. XXXXXXX (hereinafter called "Employee").
W I T N E S S E T H:
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WHEREAS, Company and Employee desire to enter into this Agreement in
order that Employee be employed by Company upon the terms and conditions stated
herein.
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and premises contained herein, the parties hereby agree as follows:
1. Employment. Company hereby employs Employee for the period
beginning on the date hereof (the "Commencement Date"), and ending five years
after the Commencement Date, hereinafter called the "Employment Period"). The
Agreement will automatically be renewed for an additional five-year Employment
Period unless Company or Employee elects not to renew by providing written
notice of such election to the other party within 30 days prior to the end of
the initial five-year Employment Period.
2. Duties. Subject to the authority of the Board of Directors of the
Company, Employee shall be employed as the Company's Chairman of the Board. It
is understood and agreed that Employee shall perform his services principally in
the Company's executive offices in Westchester County, New York, in the State of
Florida or any other facilities mutually agreeable to the parties. Employee will
perform such other duties and services of a senior executive nature and shall
retain such status at the Company as shall be commensurate with his position as
the Chairman of the Board.
3. Full Time. Employee agrees that he will devote his full time and
attention during regular business hours to the business and affairs of the
Company.
4. Compensation.
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(a) For all services performed by Employee for Company during the
Employment Period, Company will pay Employee, in accordance with the normal pay
practice of the Company, a salary of $305,000 per annum ("Salary"), increased by
a percentage equal to the aggregate percentage increase in the Consumer Price
Index since the year in which Employee first was paid such salary amount by the
Company. As used in this paragraph 4A, Consumer Price Index shall mean the
Consumer Price Index for Urban Wage Earners and Clerical Workers prepared by the
Bureau of Labor Statistics of the U.S. Department of Labor, or, if that index is
not then being published, the most nearly comparable successor index that the
parties may agree upon or, if they fail to agree, an index designated by
Company's independent certified public accountants. If a successor index is
used, Company's independent certified public
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accountants shall make such adjustments to the index as may be appropriate to
carry out the intention of this paragraph and the accountants' determination
shall be final and binding on the parties.
(b) As additional compensation, Employee shall receive four percent
of the Company's Pre-Tax Income which, in each fiscal year during the Employment
Period, exceeds $3,000,000. No additional compensation shall be paid for any
fiscal year in which Pre-Tax Income is less than $3,000,000.
(c) The additional compensation to be paid pursuant to paragraph
4(B) shall be payable immediately following the availability of the financial
statements relating to the applicable fiscal year of Company, but in no event
later than 120 days after the end of such fiscal year.
(d) The Employee shall also be entitled to participate in the
health, retirement, profit sharing, insurance or similar benefits which the
Company provides to any of its other senior executive employees. The Company
will use its best commercially reasonable efforts to cause its benefits package
for senior executive officers to be commensurate with benefits packages provided
for senior executive officers by other similarly situated public companies in
the health care business. In addition, the Employee and his spouse shall also be
entitled to long-term care insurance coverage under policies at least as
beneficial to the Employee and his spouse as the policies to such effect
currently in place as underwritten by Travelers Insurance, the premiums for
which shall be paid by the Company.
(e) For the purposes of this Agreement, "Pre-Tax Income" shall mean
for each fiscal year the net income of Company and its consolidated subsidiaries
for such fiscal year before any charges for federal, state or other taxes
relating to income, determined in accordance with generally accepted accounting
principles.
5. Reimbursement of Expenses. Company recognizes that Employee, in
performing Employee's duties under this Agreement, may be required to spend sums
of money in connection with those duties for the benefit of Company and
accordingly will reimburse Employee $15,000 annually, for such expenses
beginning on the first day of the Employment Period payable weekly. In the event
Employee incurs expenses in the performance of Employee's duties on behalf of
Company in excess of $15,000 in any year of the Employment Period, Employee may
present to Company an itemized voucher for such expenses paid or incurred by
Employee, and on presentation of that itemized voucher Company will reimburse
Employee or pay the expense incurred for all such reasonable expenses,
including, but not limited to, travel, meals, lodging, entertainment and cash
promotion. Company will provide to Employee every two years the use for business
purposes of an automobile, purchased or leased by Company (or, at Employee's
option, a cash allowance equal to the amount paid by Employee to purchase or
lease such an automobile), selected by Employee and having a cost to Company of
up to $40,000 per each two year period (in the case of a purchase) or $1,000 per
month (in the case of a lease), each of which amount is subject to a cumulative
annual percentage increase equal to the percentage increase in the Consumer
Price Index (as such term is used in Paragraph
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4A), with all expenses of operation, such as insurance, gas, oil and repair paid
for by Company. Company will also provide to Employee the use for business
purposes of a telephone in each of his residences and in each of his
automobiles.
6. Vacation. Employee shall be entitled to reasonable vacation during
the Employment Period but in no event less than six (6) weeks vacation each
year.
7. Disability. In the event that Employee shall be unable to perform,
because of illness or incapacity, physical or mental, all the duties and
services to be performed by him hereunder for a consecutive period of twelve
(12) months, the Company may terminate this Agreement after the expiration of
such period ("Disability Period"). Employee shall be entitled to receive the
compensation provided by paragraph 4(A) up to the end of the Disability Period
(less payments from any disability insurance proceeds received by Employee with
respect to the Disability Period). Disability under this Paragraph shall be
determined by a physician who shall be selected by Employee and reasonably
approved by the Company. Such approval shall not be unreasonably withheld or
delayed, and a physician shall be deemed to be approved unless he or she is
disapproved in writing by the Company within ten (10) days after his or her name
is submitted. Company will pay the premiums for a disability insurance policy
which will provide Employee with disability payments after termination of the
Disability Period equal to one-half of Employee's Salary during the period of
disability or until Employee becomes 75 years old, whichever is sooner.
8. Death; Life Insurance. This Agreement shall terminate upon the
death of Employee. Company shall at its expense use all reasonable efforts to
purchase and maintain on behalf of Employee during the Employment Period a life
insurance policy on the life of Employee, payable to such beneficiaries as
Employee may from time to time designate, in an amount equal to three times
Employee's annual Salary.
9. Termination.
(a) Company may discharge Employee for cause at any time. Cause for
discharge will exist when (i) Employee materially breaches this Agreement and
such breach is not cured within 30 days following written notice by Company to
Employee of such breach, or (ii) Employee is convicted of any act or course of
action involving moral turpitude which materially adversely affects the
reputation of Company. If, during the Employment Period, Employee is discharged
for cause, Company, without any limitation on any remedies it may have at law or
equity, is without liability for Salary or any other liability to Employee after
the date of such discharge.
(b) Employee may terminate this Agreement during the term hereof
without liability at any time upon at least one year prior written notice to
Company.
(c) In the event that as of the date of the termination of this
Agreement following a full five-year Employment Period, this Agreement has not
been renewed or Employee and Company have not entered into a mutually agreeable
successor employment
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agreement, then Company shall pay Employee on the date of such termination a
lump-sum amount equal to Employee's annual Salary as of such date.
10. Change in Control. In the event of a Change in Control, as defined
below, of the Company, the Company shall pay to Employee a lump-sum amount equal
to one-half of Employee's Salary at the time of the occurrence of such Change in
Control, which amount shall be paid within ten days after such occurrence. The
foregoing payment shall be in addition to and shall not reduce or in any way
affect the terms of payment of any amounts to which Employee shall be entitled
hereunder. The Company hereby agrees to obtain an agreement from any successor
to assume and agree to honor and perform this Agreement. For purposes of this
Agreement, a "Change in Control" shall have occurred if:
(a) any "person", as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (other
than the Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, Employee or Xx. Xxxxxxx Xxxxxx or any of
their respective immediate family members or affiliates (as such terms is
defined in Rule 405 under the Securities Act of 1933) or any corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities;
(b) during any period of not more than two consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in clause (a), (c) or (d) of
this Section) whose election by the Board or nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority thereof;
(c) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (A) a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than 30% of the combined voting
power of the Company's then outstanding securities; or
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(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
11. Disclosure of Confidential Information. "Confidential Information"
means all information known by Employee, because of employment by Company, about
Company's present or prospective products, processes, services or activities.
Confidential Information does not include information generally known, other
than through breach of a confidentiality agreement with Company, in the
industries in which Company engages or may engage. Employee will never, during
or after the Employment Period, directly or indirectly use any Confidential
Information except in the performance of Employee's duties for Company, or in
the performance of Employee's duties and to other persons as directed by
Company. Employee will use reasonable efforts to prevent unauthorized use or
disclosure of Confidential Information. Upon termination of employment with
Company, Employee will deliver to Company all writings relating to or containing
Confidential Information, including, without limitation, notes, memoranda,
letters, drawings, diagrams, and printouts and also including any tapes, discs
or other forms or recorded information. If Employee violates any provision of
this paragraph during, or after the Employment Period, Company specifically
reserves the right, in appropriate circumstances, to seek full indemnification
from Employee should Company suffer any monetary damages or incur any legal
liability to any person as a result of the disclosure or use of Confidential
Information by Employee in violation of this paragraph.
12. Restrictive Covenants. Upon termination of the Employment Period,
Employee will not for a period of one year following the date of termination of
the Employment Period directly or indirectly engage in or participate in the
management or ownership of any business or activity in the New York City
metropolitan area, including suburban and other counties of New York, New Jersey
and Connecticut generally considered a part of such area, the State of Florida
or in any other state in which Company is registered to do business as of the
date of termination of the Employment Period, which directly or indirectly
competes with the business conducted by Company. Employee recognizes and hereby
acknowledges that the restrictions imposed upon Employee in this paragraph are
reasonable and are necessary for the protection of the business of Company.
13. Ownership of Inventions, Discoveries and Improvements. Employee
shall promptly disclose in writing to the Board of Directors of Company all
inventions, discoveries, and improvements conceived, devised, created, or
developed by Employee in connection with his employment (collectively,
"Invention"), and Employee shall transfer and assign to Company all right, title
and interest in and to such Invention, including any and all domestic and
foreign patent rights, domestic and foreign copyright rights therein, and any
renewal thereof. Such disclosure is to be made promptly after the conception of
each Invention, and each Invention is to become and remain the property of
Company, whether or not patent or copyright applications are filed thereon by
Company. On request of Company Employee shall execute from time to time during
or after the termination of employment such further instruments including,
without
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limitation, applications for patents and copyrights and assignments thereof as
may be deemed necessary or desirable by Company to effectuate the provisions of
this paragraph 13.
14. Construction. If the provisions of paragraph 11 should be deemed
unenforceable, invalid, or overbroad in whole or in part for any reason, then
any court of competent jurisdiction or any arbitrator appointed in accordance
with paragraph 15 is hereby authorized, requested, and instructed to reform such
paragraph to provide for the maximum competitive restraints upon your activities
(in time, product, geographic area and customer solicitation) which may then be
legal and valid.
15. Remedies, Damages and Jurisdiction.
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(a) Employee agrees that violation of paragraphs 11, 12 or 13 would
cause irreparable injury to Company for which the remedy at law would be
inadequate, and that Company shall be entitled in any court of law or equity or
in any arbitration proceeding in accordance with this paragraph 14, whichever
forum is designated by Company, to preliminary, permanent and other injunctive
relief against any breach of the provisions contained in paragraphs 11, 12 or
13, and such punitive and compensatory damages as shall be awarded. Further, in
the event of a violation of the provisions of paragraph 12, the period of
noncompetition referred to therein shall be extended but not decreased for a
period of time equal to the period that the violation occurred.
(b) Except as otherwise provided in paragraph 14 and 15(a) relating
to the reformation of the restrictive covenants and obtaining equitable relief,
any controversy or claim arising out of, or relating to this Agreement, or the
breach thereof, shall be settled by arbitration by one arbitrator in New York,
New York, in accordance with the rule of the American Arbitration Association
and judgment upon the award rendered by the arbitrator may be entered in any
Court having jurisdiction thereof.
(c) Each of Company and Employee hereby consents to the
jurisdiction of the Supreme Court of the State of New York for the County of New
York and the United States District court for the Southern District of New York
for all purposes in connection with said arbitration or for obtaining the relief
referred to in paragraphs 10, 11 or 12, and further consents that any process or
notice of motion therewith may be served by certified or registered mail or
personal services, within or without the State of New York, provided a
reasonable time for appearance is allowed.
16. Severability. If any of the provisions of this Agreement is held
to be invalid, illegal, or unenforceable, that determination will not affect the
enforceability of any other provisions of this Agreement, and the remaining
provisions of this Agreement will be valid and enforceable according to their
terms.
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17. Binding Effect.
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(a) This Agreement constitutes the entire understanding of the
parties, may be modified only in writing, is governed by the laws of New York,
and will be binding and inure to the benefit of Employee and Employee's personal
representatives and Company and Company's successors and permitted assigns.
(b) In furtherance and not in limitation of the foregoing, this
Agreement supersedes any and all prior employment agreements, including the
employment agreement dated as of November 1, 1998 by and between Company and
Employee and such prior agreements hereby are terminated and is no longer
binding on either party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above mentioned.
EMPLOYEE:
/s/ Xxxxxxxxx X. Xxxxxxx
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Xxxxxxxxx X. Xxxxxxx
COMPANY:
NATIONAL HOME HEALTH CARE CORP.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer and
Executive Vice President
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