1
EXHIBIT 10.51
AGREEMENT
This agreement is between Xxxxxx X. Xxxxxx and Xxxxxxxxxx Healthcare
Corporation ("PHC") dated June 12, 1997.
WHEREAS Xxxxxx had an employment contract with PHC dated July 17, 1996
and effective August 16, 1996 ("Employment Contract");
WHEREAS PHC terminated Xxxxxx'x employment on May 15, 1997; and
WHEREAS Xxxxxx and PHC wish to resolve certain issues related to the
interpretation of the Employment Contract;
Xxxxxx and PHC therefore agree as follows:
1. PAYMENT. PHC shall pay Xxxxxx $574,556, less any withholding
deductions required by federal, state, or local law, by June 15, 1997.
2. PERFORMANCE BONUS. For each of 1997, 1998, and the period from January 1,
1999 through August 15, 1999 ("the 1999 period"), PHC shall treat Xxxxxx as if
he were a participant in the PHC Executive Officer Performance Bonus Plan or
any similar or successor bonus plan ("Plan") based on PHC's performance with a
position comparable to a senior vice president for operations, legal, or market
development. Xxxxxx'x maximum potential bonus shall be $144,000 for each of
1997 and 1998. For the 1999 period, the potential bonus for Xxxxxx shall be
62.5 percent of the annual bonus that would have been paid, with a maximum
potential bonus of $90,000. PHC shall make the payment to Xxxxxx, if one is
required, when it makes other payments under the Plan. If a "Change in Control"
of PHC occurs, as defined in section 4(iv) of the Employment Contract, and if
PHC or its successor does not continue with a Plan, PHC shall pay Xxxxxx within
30 days of the Change in Control an amount equal to the bonus amount, if any,
that would have been paid under section 5(a)(2) of the Employment Contract
calculated as of the
2
date of Change in Control through the 1999 period. That bonus amount shall be
determined in the same way as bonus amounts are determined for employees with
contracts similar to the Employment Contract who leave PHC as a result of the
Change in Control.
3. SERP. PHC shall make payments to Xxxxxx under PHC's Restated and Amended
Supplemental Executive Retirement Plan, which was effective January 1, 1996
("SERP"), beginning on July 1, 1997 and ending on April 1, 2002 in accordance
with the terms of Schedule A to this Agreement. PHC shall not rely on
"extraordinary circumstances" under article 4.2(c) of the SERP to delay or deny
payments as required by Schedule A. If PHC fails to make three consecutive
payments required by Schedule A, Xxxxxx may require PHC to make an immediate
payment of the full amount of the remaining unpaid principal plus interest on
that amount through the date of payment. PHC shall not offset its obligations
under this paragraph against any other claims it may have now or in the future
against Xxxxxx.
4. OTHER BENEFITS AND PROVISIONS IN THE EMPLOYMENT CONTRACT.
(a) PHC and Xxxxxx shall comply with section 5(a)(3) and paragraphs 1,
2, and 3 of Exhibit A of the Employment Contract and with the August 9, 1996
Non-Qualified Stock Option Agreement between PHC and Xxxxxx.
(b) Section 10(b) of the Employment Contract, the provision on
noncompetition, shall not apply, and Xxxxxx does not need to comply with it.
(c) PHC and Xxxxxx shall comply with section 11 of the Employment
Contract except that section 11 shall apply until the Confidential Information
becomes public. The time periods that section 10(b) shall not apply. Xxxxxx
shall not waive any privilege or right of non-disclosure, including the
attorney-client privilege, belonging to PHC and is not authorized to do so.
2
3
(d) Xxxxxx shall receive accrued and vested benefits under PHC's
401(k) plan through May 15, 1997. PHC shall make no contributions to its 401(k)
plan for the benefit of Xxxxxx for the period after May 15, 1997.
5. RELEASE BY PHC. PHC and its predecessors, affiliates, successors, and
assigns fully forever relieve, release, and discharge Xxxxxx and his heirs,
executors, administrators, agents, successors, and assigns of and from any and
all claims, liabilities, defenses, arguments, demands, obligations, damages,
and causes of action of whatsoever kind or nature, whether known or unknown,
fixed or contingent, in law or equity or otherwise, arising in whole or in part
from or related in any way to the position that PHC could have terminated
Xxxxxx'x employment for cause under the Employment Contract as of the date of
this Agreement on the basis of facts known to PHC at that time and that any
payment required to be made by PHC to Xxxxxx under the Employment Contract or
the SERP should be less than the total of the amounts paid pursuant to
paragraphs 1, 2, 3, and 4 of this Agreement ("PHC Claims").
(a) This release does not extend to any claim PHC may have arising out
of this Agreement.
(b) PHC represents that it has not assigned or transferred any PHC
Claims to any person or entity and covenants and agrees not to bring or pursue
against Xxxxxx, or assert by way of offset or recoupment, any PHC Claims.
(c) This release does not waive or release any rights or claims that
PHC may have arising after the date it signs this Agreement.
6. RELEASE BY XXXXXX. Xxxxxx and his heirs, executors, administrators, agents,
successors, and assigns fully and forever relieve, release, and discharge PHC,
its predecessors, successors, assigns, related entities (including parent,
subsidiaries, or affiliates and any employee benefit or deferred compensation
plans of any of them), and their present, former, or future employees,
officers, directors, counsel, agents, and anyone acting on their behalf
(collectively the "Released
3
4
Parties") of and from any and all claims, liabilities, defenses, arguments,
demands, obligations, damages, and causes of action of whatsoever kind or
nature, whether known or unknown, fixed or contingent, in law or equity or
otherwise, arising in whole or in part from or related in any way to the
Employment Contract, the SERP, or any obligation of PHC to pay to Xxxxxx, in
the past, now, or in the future, any compensation, deferred compensation,
severance, vacation pay, supplemental executive retirement payments, or any
other form of remuneration ("Xxxxxx Claims").
(a) If PHC asserts a claim or cause of action against him, Xxxxxx, in
response to any judgment or award against him and limited by the amount of that
judgment or award, may assert a claim to a lump-sum payment under the SERP.
(b) This release does not extend to any claim Xxxxxx may have arising
out of this Agreement. Compliance with this Agreement constitutes full
performance by PHC of the Employment Contract and the SERP and fully discharges
PHC's obligations under them.
(c) Xxxxxx represents that he has not assigned or transferred any
Xxxxxx Claims to any person or entity and covenants and agrees not to bring or
pursue against PHC or the other Released Parties, or assert by way of offset or
recoupment (except as provided in paragraph 6(a)), any Xxxxxx Claims.
(d) This release does not waive or release any rights or claims that Xxxxxx may
have arising after the date he signs this Agreement.
7. TERMINATION OF EMPLOYMENT. As of May 15, 1997, Xxxxxx ceased to be employed
by PHC and no longer holds any position, including those of officer or employee
in PHC or of director, officer, or employee in its affiliates or any entity in
which Xxxxxx held such a position at the request of PHC.
4
5
8. COOPERATION. Xxxxxx shall cooperate fully with PHC and its attorneys in
connection with any and all ongoing and future or possible civil, government,
or other investigation, proceeding, matter, or litigation. This cooperation
includes Xxxxxx'x promise to make himself available to met with PHC's attorneys
at mutually reasonable times and upon reasonable advance notice and to testify
and provide information truthfully and completely. PHC shall reimburse Xxxxxx
for all out-of-pocket expenses he incurs in connection with any cooperation
that he provides at the express request of PHC and shall not request
cooperation for unreasonable lengths of time or in a way that is unduly
burdensome to Xxxxxx. In particular, Xxxxxx does not need to make himself
available to PHC for more than 10 hours a month through July 31, 1999 and for
such lesser periods as required after that. Nothing in this paragraph prevent
Xxxxxx from cooperating with others in connection with any civil, government,
or other investigation, proceeding, or litigation.
9. SUCCESSORS AND ASSIGNS. This Agreement shall insure to the benefit of and
shall be binding upon the successors, assigns, heirs, administrators, and
executors of the parties to this Agreement and each of them.
10. REPRESENTATIONS. Each party warrants and represents to the other that each
is fully and duly authorized and empowered to enter into this Agreement and to
perform in accordance with its terms.
11. DISPUTE RESOLUTION. (a) Subject to paragraph 11(b)-(c), sections 9 and 15
of the Employment Contract shall apply to and govern disputes and claims as
described in those sections and articles 7, 8, 11.8, and 11.16 of the SERP
shall apply to and govern disputes and claims as described in those articles.
(b) All claims, controversies, or disputes arising out of or related
to this Agreement, including those related to the validity, enforcement, or
interpretation of it and including those not clearly and solely covered by
paragraph 11(a), shall be governed by the law of the state of Texas (excluding
conflict of laws principles). If any action, suit, or other proceeding is
instituted to enforce or interpret this Agreement or to remedy, prevent, or
obtain relief from breach of this
5
6
Agreement, the prevailing party shall recover all of such party's attorneys
fees and costs incurred in each such action, suit, or proceeding.
(c) To the extent a dispute or claim does not arise clearly or solely
under the Employment Contract or the SERP, it shall be considered a claim
arising solely under this Agreement.
12. RELATIONSHIP TO OTHER AGREEMENTS. The terms of this Agreement govern and
control to the extent they conflict or are inconsistent with the terms of the
Employment Contract, the SERP, or any other agreement, oral or written, between
PHC and Xxxxxx. This Agreement may not be modified except by a writing signed
both by Xxxxxx and PHC.
13. EXECUTION IN COUNTERPARTS. This Agreement may be executed and delivered in
counterparts or copies by the parties to this Agreement ("counterpart"). When
each party has signed and delivered (by fax or otherwise) at least one
counterpart to the other party to this Agreement, each counterpart shall be
deemed an original and, taken together, the counterparts shall constitute one
and the same Agreement, which shall be binding and effective.
6
7
IN WITNESS WHEREOF, the parties to this Agreement have approved and
executed this Agreement as of the date set forth above. The signatures below
satisfy the amendment and waiver provision of section 13 of the Employment
Contract.
Xxxxxxxxxx Healthcare Corporation
By:
-------------------------------
Xxxxx X. XxxXxxxxxxx
Senior Executive Vice President
Chief Financial Officer
Xxxxxxxxxx Healthcare Corporation
------------------------------
Xxxxxx X. Xxxxxx
