Exhibit 10.15
EMPLOYMENT AND NON-COMPETITION AGREEMENT
THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (this "Agreement"), is
entered into as of August 10, 1998 by and between XXXXX X. XXXXX, an Illinois
resident ("Employee"), and EVEREST HEALTHCARE SERVICES CORPORATION, a Delaware
corporation (the "Company").
WHEREAS, the Company provides dialysis and other services to patients and
other clients through its subsidiaries, and provides management, operational and
other services to its subsidiaries and various other entities; and
WHEREAS, the Company desires to employ Employee, and Employee desires to be
so employed, in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company and the
Employee hereby agree as follows:
1. Employment.
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1.1. Engagement of Employee. The Company agrees to employ Employee as
Chief Executive Officer of The Extracorporeal Alliance, L.L.C. (the "Alliance"),
and Employee accepts such employment by the Company, during the period beginning
the date hereof and ending on the fifth anniversary of the Effective Date (the
"Expiration Date"), unless sooner terminated pursuant to Section 3 hereof (the
"Employment Period"). Employee's employment by the Company commenced on November
1, 1996 (the "Effective Date").
1.2 Duties and Powers. During the Employment Period, Employee will serve
as Chief Executive Officer of the Alliance, and will have such responsibilities,
duties and authorities as outlined on Exhibit A hereto and rendering such other
services of an executive and administrative character to the Company, its
subsidiaries and its affiliates, as the chief executive officer of the Company
or Board of Directors of the Company (the "Board") may from time to time direct.
Employee will devote his best efforts and his full business time and attention
(except for permitted vacation periods and reasonable periods of illness or
other incapacity) to the business and affairs of the Company, and shall perform
the duties and carry out the responsibilities assigned to him, to the best of
his ability, in a diligent, businesslike and efficient manner, and in a manner
which does not violate any fiduciary duties Employee owes the Company under
common or statutory law, for the purpose of advancing the Company. Employee
acknowledges that his duties and responsibilities will require his full-time
business efforts and agrees that during the Employment Period he will not engage
in any other business activity or have any business pursuits or interests except
insignificant activities or interests which do not conflict or compete with the
business of the Company and its subsidiaries or interfere with the performance
of Employee's duties hereunder.
2. Compensation.
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2.1 Base Salary. During the Employment Period, the Company will pay
Employee a base salary at the rate of $10,542 per month, or a greater amount as
determined by the Board in its sole discretion (the base salary in effect from
time to time is hereinafter referred to as the "Base Salary"), payable in
regular installments in accordance with the Company's general payroll practices
for salaried officers. Employee shall be reviewed annually and may receive, but
the Company is not obligated to provide, increases in base salary depending on
the Employee's performance.
2.2 Bonus Plan. Employee shall be eligible to receive bonus compensation,
in the sole discretion of the Board, after each fiscal year of the Company
ending during the Employment Period based on the Company's performance during
such fiscal year and Employee's contributions to such performance and in an
amount equal to up to forty-five percent (45%) of his annual Base Salary during
such fiscal year. Bonuses in excess of forty-five percent (45%) of Base Salary
may be paid at the Company's sole discretion for performance that exceeds
targeted objectives.
2.3 Benefits. In addition to the compensation payable to Employee
hereunder, Employee will be entitled to the following benefits during the
Employment Period, which benefits are provided to officers of the Company
generally as of the date hereof and shall only be modified to the extent
required to provide Comparable Benefits (as defined below):
(a) participation in any plan, arrangement or policy of the Company
relating to profit sharing, pensions, life insurance, disability, health
care coverage or education, that the Company has adopted for the benefit of
its officers generally, as such benefits may be changed by the Company from
time to time during the term of this Agreement;
(b) paid vacation each year with salary, consistent with Company
policy for all salaried officers, but in no event less than four weeks paid
vacation and five company holidays each year;
(c) reimbursement for reasonable out-of-pocket business expenses
incurred by Employee in the ordinary course of his duties, subject to the
Company's policies in effect from time to time with respect to travel,
entertainment and other expenses, including, without limitation,
requirements with respect to reporting and documentation of such expenses;
and
(d) a personal expense account, funded at the employee's discretion
from a designated portion of the Employee's salary, to be used for
legitimate business expenses, provided all monies not used in the account
at each year end will be returned to the Employee or his salary.
2.4 Stock Options. As an executive officer of the Company, Employee shall
be eligible to receive, but the Company is not obligated to grant, the right and
option to purchase shares of
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the Company's common stock (the "Option"). The grant of the Option, number of
shares, price and any other term or condition regarding any Option shall be
determined solely by the Compensation Committee of the Company.
2.5 Success Bonus. In the event (i) the Company enters into a definitive
binding agreement for the sale of the Company (whether pursuant to a merger, a
sale of substantially all of the assets or all the common stock, or otherwise)
to a third party pursuant to which the shareholders of the Company receive cash
or marketable securities in exchange for the Company's stock (a "Sale") prior to
December 31, 2000, (ii) such Sale closes, and (iii) Employee is employed by the
Company at the time of the closing, the Company will pay to Employee an
additional bonus of $150,000 no later than 30 days following the closing of the
Sale.
3. Termination.
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3.1 Termination By Employee or the Company. The Employment Period (i)
shall automatically terminate immediately upon Employee's resignation or death,
or (ii) may be terminated by the Company upon written notice delivered to
Employee or by reason of Employee's Permanent Disability.
"Permanent Disability" shall mean, with respect to the Employee (i) the
suffering of any mental or physical illness, disability or incapacity to the
extent that the Employee shall be unable to perform his duties for a period of
three months during any six-month period, or (ii) the absence of the Employee
from his employment by reason of any mental or physical illness, disability or
incapacity for a period of three months during any six-month period; provided,
however, in either case, that such illness, disability or incapacity shall be
determined to be of a permanent nature by a licensed physician selected by the
Board and reasonably acceptable to the Employee. The Employment Period shall
end in the case of clause (i) and (ii) on the last day of such three-month
period. Notwithstanding the foregoing, a condition shall not be a Permanent
Disability if it is the result of (i) a willfully self-inflicted injury or
willfully self-inflicted sickness or (ii) an injury or disease contracted,
suffered, or incurred while participating in a criminal offense. "Affiliated
Entity" shall mean any entity which, directly or indirectly controls, is
controlled by or is under common control with, the Company.
3.2 Compensation After Termination or Expiration.
(a) If the Employment Period is terminated Employee (or his designated
beneficiary) shall be entitled to receive (A) as severance pay payments
equal to 130% of the Base Salary for one year from the date of such
termination, in regular installments in accordance with the Company's
regular payroll practices for salaried officers as of the date hereof, (B)
reimbursement for the cost of outplacement services up to a maximum of
$30,000, and (C) health and life insurance for up to 12 months from the
date of termination on the same basis as provided to Employee prior to
termination.
(b) The Employee hereby agrees that the Company may dismiss him
without any liability except for the payments required to be made by this
Section 3.2 and except
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as otherwise set forth in Section 3.3(d), and without regard to any general
or specific policies (whether written or oral) of the Company relating to
the employment or termination of its employees. The Company and the
Employee acknowledge that it would be impractical or extremely difficult to
fix the Employee's actual damages in the case of any such termination.
Therefore, the Company and Employee agree that the payments to be paid as
provided for in this Section 3.2 and Section 3.3(d) shall constitute
liquidated damages; provided, however, that the Employee shall be under no
duty to mitigate such liquidated damages. In return for tendering payment
of such liquidated damages, regardless of whether after tender of such
payment Employee accepts it, Employee for himself and his heirs, executors,
administrators and assigns (collectively, the "Releasors") does hereby
remise, release, and forever discharge as to the Company and any of its
Affiliated Entities and their respective agents, officers, directors and
employees, heirs, successors, assigns (collectively, the "Releasees"), all
manners of action, cause and causes of action, suits, debts, dues,
accounts, liabilities, covenants, contracts, agreements, claims,
obligations, damages, injuries and demands (collectively, the "Actions")
whatsoever of any kind and nature, whether foreseen or unforeseen,
contingent or actual, liquidated or unliquidated, in law or in equity,
which any Releasor has or may have against any Releasee except for claims
for breaches by the Company of express provisions of Section 3.2 or Section
3.3(d) of this Agreement. The Employee hereby covenants not to xxx any
Releasee relating to any Action.
(c) Notwithstanding any provision hereof other than Section 3.3(d),
after termination or expiration of the Employment Period (i) the Company
shall continue to have all of its rights hereunder (including, without
limitation, all rights under Section 4 hereof at law or in equity), and
(ii) Employee shall continue to have all of his rights under Sections 3.2
and 3.3 hereof.
3.3 Obligations On Termination.
(a) Upon the expiration or termination of the Employment Period for
any reason, Employee shall be deemed to have resigned from all offices,
directorships, trusteeships, or other positions he may then hold with the
Company or an Affiliated Entity. Such resignation shall be deemed effective
immediately thereupon, without the requirement that a written resignation
be delivered.
(b) Employee agrees that following the expiration or termination of
the Employment Period for any reason, he will provide any service which the
Company may reasonably require to discharge its continuing obligations to
its clients with respect to services performed by Employee for a period not
to exceed 60 days (and so long as such services do not interfere with any
new position or employment of Employee), and in such events Employee will
be entitled to compensation on a per diem basis at his then customary rate
for such services in addition to all other payments due the Employee by the
Company in accordance with the terms hereof. Such rate shall be negotiated
between the parties in good faith, or if they are unable to agree shall be
200% of Employee's Base Salary divided by 365.
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(c) The Employee hereby acknowledges and agrees that all personal
property and equipment furnished to or prepared by the Employee in the
course of or incident to his employment belong to the Company and shall be
promptly returned to the Company upon termination of the Employment Period.
"Personal property" includes, without limitation, all books, manuals,
records, reports, notes, contracts, lists, blueprints, and other documents,
or materials, or copies thereof, and all other proprietary information
relating to the business of the Company; provided, however, that nothing
shall preclude the Employee from retaining or removing (i) his personal
rolodex, calendars, personal files of business processes, personal
education and general business materials ("Personal Files"); (ii)
information not containing Confidential Information (as hereinafter defined
in Section 4.5) or a trade secret obtained while in the employ of the
Company; or (iii) the Employee's personal computer provided all
Confidential Information is deleted. The Employee cannot retain or remove
personal property that is or contains Confidential Information or a trade
secret obtained while in the employ of the Company. Prior to retaining or
removing any personal property other than his Personal Files, the Employee
will inform the Company of what personal property he intends to retain or
remove. If a dispute arises between the Company and the Employee regarding
the right of Employee to remove any such personal property, the parties
shall arbitrate such dispute in a manner mutually agreeable to them.
Following termination, the Employee will not retain any written or other
tangible material containing any Confidential Information or trade secrets,
except as described above.
(d) In the event the Employment Period expires or is terminated (other
than due to the resignation or termination by Employee for the failure of
the Company to (i) pay his Base Salary in accordance with Section 2.1 or
bonus in accordance with Section 2.2, or (ii) pay or make available
Comparable Benefits (as defined below) (the failures included in clauses
(i) and (ii) are hereinafter collectively referred to as the "Termination
Events")), the Company's sole liability to Employee shall be limited to,
and Employee shall only be entitled to xxx the Company for, the
compensation due to him in accordance with Section 3.2. In the event the
Employment Period is terminated due to the resignation by Employee for the
occurrence of any Termination Event, Employee shall have the right to
exercise any rights he has in law or equity, including the right to xxx for
damages and to render this Agreement of no further force or effect.
"Comparable Benefits" means, for purposes of this Agreement, all employee
benefits including, but not limited to, vacation, disability, death
benefits, healthcare, pension and 401K plans, those benefits provided in
Section 2.3, and other fringe benefits provided to other similarly situated
Company executives ("Company Benefits") with respect to both the financial
effect of such benefits to Employee and the terms and provisions of such
benefits (which benefits must be within a range of no less than 90% of the
Company Benefits).
4. Covenant Not to Compete.
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4.1 Employee's Knowledge. Employee acknowledges and agrees that he has
occupied and will continue to occupy a position of trust and confidence with the
Company and has and will become familiar with the Company's trade secrets and
other proprietary and confidential
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information concerning the Company. Employee acknowledges and agrees that his
services are of a special, unique and extraordinary value to the Company and
that the Company would be irreparably damaged if Employee were to provide
similar services to any person or entity in violation of the provisions of this
Agreement. Employee further acknowledges that the Company's relationships with
its clients and other business partners are among its most valuable assets which
in many cases have been created over a long period of time and, if lost, could
not be replaced.
4.2 Non-Compete. As consideration for the Company entering into this
Agreement, and in recognition of the Company's proprietary interest in its
business, Employee agrees that he shall not, during the Restricted Period (as
defined below), directly or indirectly, as employee, agent, consultant,
stockholder, director, co-partner or in any other individual or representative
capacity, own, operate, manage, control, engage in, invest in or participate in
any manner in, act as a consultant or adviser to, render services for (alone or
in association with any person, firm, corporation or entity), or otherwise
assist, any person that engages in or owns, invests in, operates, manages or
controls any venture or enterprise engaging or proposing to engage in the
Business (as defined below) anywhere in the Territory (as defined below).
"Business" shall mean the performance of activities related to:
(i) the provision of dialysis treatments or services utilized in
connection with any dialysis treatment;
(ii) the purchase, sale or establishment of dialysis operations and
facilities;
(iii) practice management for any physician or entity practice which
provides nephrology or renal dialysis services; or
(iv) extracorporeal blood handling as provided by the Company or any
Affiliated Entity as of the date hereof.
Notwithstanding the foregoing to the contrary, the Employee may engage in
activities related to (x) practice management under clause (iii) for any
practice management company or managed care company other than any company the
principal business of which is providing management services for nephrology or
renal dialysis practices and (y) the sale of products used in dialysis
treatments or extracorporeal blood handling. "Restricted Period" shall mean the
period commencing on the Effective Date hereof and ending on the date which is
the second anniversary of the first to occur of the Expiration Date and the date
Employee's employment with the Company is terminated for any reason.
The Restricted Period shall be automatically extended for a period equal to
any period that Employee is in breach of the restrictive covenants set forth in
this Section 4 (the "Restrictive Covenants"). "Territory" shall mean the area
included within a 20 mile radius of any Medicare certified outpatient renal
dialysis facility or any other facility providing any services or engaging in
any activities of the Business and either (x) owned, operated or managed by the
Company or any Affiliated Entity on the Expiration Date or the date on which the
Employment Period is
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otherwise terminated or at any time during the 18 months preceding such date, or
(y) for which the Company or any Affiliated Entity during the nine months
preceding the Expiration Date or the date on which the Employment Period is
otherwise terminated, was actively engaged in efforts to establish, acquire,
manage or operate (each such facility is hereinafter referred to as a
"Facility"). With respect to the Territory, Employee specifically acknowledges
that the Company plans to conduct the Business throughout the United States and
to undertake to expand the Business throughout the United States. If Employee's
employment with the Company is terminated within the six months following a
Change of Control (as defined below), the term "Facility," as defined for these
purposes, shall not include those facilities which are owned, managed, or
operated by an Affiliated Entity which became an Affiliated Entity as a result
of the transaction which also resulted in the Change of Control. "Change of
Control" shall mean any person or entity, other than a shareholder of the
Company on the date hereof acquiring in excess of fifty percent (50%) of the
assets or issued and outstanding voting stock of the Company other than as a
result of, or after the occurrence of, a sale, in an underwritten public
offering registered under the Securities Act of 1933, as amended, of shares of
the Company's common stock in which the price per share paid by the public for
such securities will be at least $10, reflecting a post-offering market
capitalization for the Company of at least $150 million.
4.3 Non-Solicitation. Without limiting the generality of the provisions
of Section 4.2 hereof, Employee hereby agrees that, during the Restricted
Period, he will not, directly or indirectly, solicit, or participate as
employee, agent, consultant, stockholder, director, partner or in any other
individual or representative capacity, in any business which solicits business
from any person, firm, corporation or other entity which was a client or other
business partner of the Company during the term of this Agreement or any
referring physician or any owner of facilities operated by the Company or its
Affiliated Entities and, in each instance, who or which is located in the
Territory, or from any successor in interest to any such person, firm,
corporation or other entity who or which is located in the Territory, for the
purpose of securing business relationships or contracts related to the Business;
provided, however, that nothing contained herein shall be construed to prohibit
or restrict Employee from soliciting business from any such parties on behalf of
the Company in performance of his duties as an employee of the Company required
under and as specifically contemplated by Section 1 above.
4.4 Interference with Relationships. During the Restricted Period,
Employee shall not, directly or indirectly, as employee, agent, consultant,
stockholder, director, co-partner or in any other individual or representative
capacity: (i) except on behalf of the Company, employ or engage, recruit or
solicit for employment or engagement, any person who is or becomes employed or
engaged by the Company or its Affiliated Entities during the Restricted Period
or during the eighteen month period preceding the Restricted Period, or
otherwise seek to influence or alter any such person's relationship with the
Company or its Affiliated Entities, or (ii) solicit or encourage any client or
other business partner of the Company or its Affiliated Entities or any
referring physician or any owner of facilities operated or managed by the
Company or its Affiliated Entities to terminate or otherwise alter his
relationship with the Company or its Affiliated Entities.
4.5 Confidential Information. The Employee agrees that during the
Employment Period or at all times thereafter, he shall not disclose to any
person or entity not employed by the
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Company and not engaged to render services to the Company or otherwise use any
Confidential Information obtained while in the employ of the Company, except on
behalf of the Company in accordance with its policies or as such disclosure may
be required by law or a court order. As used in this Agreement, "Confidential
Information" shall mean any information relating to the business or affairs of
the Company, Peak Healthcare, L.L.C., a limited liability company formed under
the laws of the State of Delaware ("Peak"), any Affiliated Entities, or any of
their clients or other business partners, including but not limited to
information relating to financial statements, client or other business partner
identities, potential clients, employees, information, analyses, or other
proprietary information used by the Company, Peak, or any Affiliated Entities in
connection with their businesses; provided, however, that Confidential
Information shall not include any information which is in the public domain or
becomes known in the industry through no wrongful act on the part of Employee or
is approved for disclosure by the Company. Employee acknowledges that the
Confidential Information is vital, sensitive, confidential and proprietary to
the Company, Peak and the Affiliated Entities.
4.6 Blue-Pencil. If any court of competent jurisdiction shall at any time
deem the term of this Agreement or any particular Restrictive Covenant too
lengthy or the Territory too extensive, the other provisions of this Section 4
shall nevertheless stand, the Restricted Period herein shall be deemed to be the
longest period permissible by law under the circumstances and the Territory
herein shall be deemed to comprise the largest territory permissible by law
under the circumstances. The court in each case shall reduce the time period
and/or Territory to permissible duration or size.
4.7 Remedies.
(a) Employee has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon the
Company under this Agreement, and Employee hereby acknowledges and agrees
that such restrictions, rights and remedies are reasonable in time and
territory, are designed to eliminate competition which otherwise would be
unfair to the Company, do not stifle the inherent skill and experience of
Employee, would not operate as a bar to Employee's sole means of support,
are fully required to protect the legitimate interests of the Company and
do not confer a benefit upon the Company disproportionate to the detriment
to Employee.
(b) Employee acknowledges and agrees that the Restrictive Covenants
are reasonable and necessary for the protection of the Company's business
interests, that irreparable injury will result to the Company if Employee
breaches any of the terms of said Restrictive Covenants, and that in the
event of Employee's actual or threatened breach of any such Restrictive
Covenants, the Company will have no adequate remedy at law. Employee
accordingly agrees that in the event of any actual or threatened breach by
him of any of the Restrictive Covenants, the Company shall be entitled,
upon three days' notice to Employee, to immediate temporary injunctive and
other equitable relief, without bond and without the necessity of showing
actual monetary damages, subject to a hearing as soon thereafter as
possible. Nothing contained herein shall be construed as prohibiting the
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Company from pursuing any other remedies available to it for such breach or
threatened breach, including the recovery of any damages which it is able
to prove.
5. Miscellaneous.
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5.1 Notices, Consents, etc. Any notices, consents or other communication
required to be sent or given hereunder by any of the parties shall in every case
be in writing and shall be deemed properly served if (a) delivered personally,
(b) sent by registered or certified mail, in all such cases with first class
postage prepaid, return receipt requested, (c) delivered by a recognized
overnight courier service, or (d) sent by facsimile transmission (along with a
copy sent by first-class mail) to the parties at the addresses as set forth
below or at such other addresses as may be furnished in writing.
If to Company: Everest Healthcare Services Corporation
000 Xxxxx Xxxxxxxx
Xxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Fax: 708/000-0000
With copies to: Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx Xxxxx and
Xxxxxxx X. Xxxxx
Fax: 312/000-0000
If to Employee: Xxxxx X. Xxxxx
00000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Date of service of such notice shall be (w) the date such notice is personally
delivered, (x) three (3) days after the date of mailing if sent by certified or
registered mail, (y) one (1) day after date of delivery to the overnight courier
if sent by overnight courier or (z) the next succeeding business day after
transmission by facsimile.
5.2 Severability. The unenforceability or invalidity of any provision of
this Agreement shall not affect the enforceability or validity of any other
provision.
5.3 Entire Agreement. This Agreement and those documents expressly
referred to herein embody the complete agreement and understanding among the
parties and supersede and preempt any prior (or contemporaneous) understandings,
agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way, and may not be
contradicted by evidence of any prior or contemporaneous agreement. The parties
further intend that this Agreement shall constitute the complete and exclusive
statement of
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its terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding involving this Agreement.
5.4 Counterparts. This Agreement may be executed on separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
5.5 Assignment. This Agreement will be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns, but will not be assignable or delegable by any party without the prior
written consent of the other parties, except it will be assignable by the
Company in connection with a sale of the Company's business. Notwithstanding
anything to the contrary contained herein, Employee may not assign any of his
rights or delegate any of his responsibilities, liabilities or obligations under
this Agreement, without the written consent of the Company.
5.6 No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any party
hereto.
5.7 Amendment and Waiver. Any provision of this Agreement may be amended,
or any provision of this Agreement may be waived, provided that any such
amendment or waiver will be binding on Employee or the Company, only if such
amendment or waiver is set forth in a writing executed by Employee or the
Company, respectively. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
other breach.
5.8 Construction. This Agreement shall be construed and enforced in
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Agreement shall be governed by, the laws
of the State of Illinois, without giving effect to provisions thereof regarding
conflict of laws.
5.9 Consent to Jurisdiction and Service of Process. The Company and
Employee hereby consent to the jurisdiction of any state or federal court
located within the County of Xxxx, State of Illinois and irrevocably agree that
subject to the Company's election, all actions or proceedings arising out of or
relating to this Agreement shall be litigated in such courts. Employee accepts
for himself and in connection with his properties, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid courts and
waives any defense of forum non conveniens, and irrevocably agrees to be bound
by any judgment rendered thereby in connection with this Agreement. Service of
all process in any such proceeding in any such court shall be mailed by
registered mail to Employee, except that unless otherwise provided by applicable
law, any failure to mail such copy shall not affect the validity of service of
process. Employee hereby agrees that service upon him by certified mail shall
constitute sufficient notice. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the right of the
Company to bring proceedings against Employee in the courts of any other
jurisdiction.
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5.10 Employee Acknowledgment. The Employee acknowledges (a) that he has
consulted with or has had the opportunity to consult with independent counsel of
his own choice concerning this Agreement and has been advised to do so by the
Company, and (b) that he has read and understands the Agreement, is fully aware
of its legal effect, and has entered into it freely based on his own judgment.
5.11 Mediation. The Company and Employee agree that in the event of any
dispute between the Company and Employee concerning the terms of this Agreement,
unless equitable relief is sought, the parties will submit the matter to
mediation prior to the commencement of legal action.
5.12 D&O Insurance. The Company shall maintain insurance which would
cover Employee in connection with any liability asserted against Employee for
performance of his duties hereunder or as a result of being an employee of the
Company, whether the Company would be permitted to indemnify the Employee
against such liability under applicable law to the same extent it maintains such
insurance for other officers of the Company.
5.13 Successors/Binding Agreement.
(a) The Company shall 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 expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform if no such
succession had taken place. As used in this Agreement, "Company" shall
mean the Company as herein before defined and any successor to it's
business and/or assets as aforesaid which assumes and agrees to perform
this Agreement by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by
the Employee and Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. In
the event of Employee's death, all amounts otherwise payable to Employee
hereunder shall, unless otherwise provided herein, be paid in accordance
with the terms of this Agreement to Employee's devisee, legatee or other
designee or, if there is no such designee, to Employee's estate.
[signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
THE COMPANY:
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EVEREST HEALTHCARE SERVICES
CORPORATION
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Xxxxx X. Xxxxx
EMPLOYEE:
--------
/s/ Xxxxx X. Xxxxx
------------------------------------------
Xxxxx X. Xxxxx
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