Exhibit 10.1
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement"), is entered into as of June
28, 1999 by and between XXXXXXXX X. XXXXXX, 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
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Chief Financial Officer of the Company, and Employee accepts such employment by
the Company, during the period beginning on the Effective Date and ending on the
fifth anniversary thereof (the "Expiration Date"), unless sooner terminated
pursuant to Section 3 hereof (the "Employment Period"). The parties agree that
Employee's employment by the Company shall commence on June 28, 1999 (the
"Effective Date").
1.2 Duties and Powers. During the Employment Period, Employee will serve
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as Chief Financial Officer of the Company, and will have such responsibilities,
duties and authorities as outlined on Exhibit A hereto and render 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
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Employee a base salary at the rate of $235,000 per annum, 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,
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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; provided, that the bonus compensation payable to Employee
following the September 30, 1999 fiscal year end of the Company shall not be
less than $32,000. 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
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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 as his salary.
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2.4 Stock Options. Effective as of the date hereof and as additional
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consideration for the services provided by Employee to the Company hereunder,
the Company agrees to grant to Employee the right and option to purchase 70,000
shares of the common stock of the Company, at an exercise price of $13.05 per
share and on such other terms and conditions as provided in the Stock Option
Agreement dated of even date herewith between the Company and Employee. In
addition, as an executive officer of the Company, Employee shall be eligible to
receive, but the Company is not obligated to grant, additional options. The
grant of any such options, number of shares, price and any other term or
condition regarding any option shall be determined solely by the Board or
designated committee of the Board.
2.5 Success Bonus. In the event (i) the Company enters into a definitive
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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
September 30, 2002, (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 $400,000 no later than 30 days following the closing of the
Sale; provided, that the bonus described above shall not apply or be payable
with respect to any public offering registered under the Securities Act of 1933,
as amended, of shares of the Company's common stock or in the event the Sale
does not result in a change of control of the Company.
3. Termination.
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3.1 Termination By Employee or the Company. The Employment Period (i)
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shall automatically terminate immediately upon Employee's resignation (for or
without Good Reason, as defined below) or death, or (ii) may be terminated by
the Company upon written notice delivered to Employee for or without Cause (as
defined below) or by reason of Employee's Permanent Disability (as defined
below).
(a) "Good Reason" shall mean a significant demotion or material
diminution in Employee's duties and responsibilities; provided that
Employee voluntarily terminates his employment with Company within 120 days
after such event occurs; provided, further, that Good Reason shall not be
deemed to exist for purposes hereof if, (1) the Company provides notice to
Employee of any change in his duties or his responsibilities and Employee
fails to provide written notice to the Company within 30 days of being
notified of such change that he objects to such change and that such change
constitutes a significant demotion or material diminution in Employee's
duties and responsibilities hereunder, or (2) Cause then existed for the
termination of Employee's employment hereunder and the Company notifies
Employee thereof within 90 days of receiving notice from Employee that
Employee is resigning for Good Reason, if any such notice is given, or of
such Employee's resignation for Good Reason, if any such notice is not
given.
(b) "Cause" shall mean a determination by the Board in the exercise of
its reasonable judgment that Employee has (i) committed an act or acts
constituting a felony or other act involving dishonesty, a breach of his
fiduciary duties owed to the Company
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under common or statutory law or fraud with respect to the Company or
Affiliated Entity (as defined below) or (ii) willfully taken or willfully
failed to take any action the consequence of which action or omission is
materially damaging to the business, assets or financial condition of the
Company or an Affiliated Entity. Without limiting the generality of the
preceding sentence, the Company and Employee acknowledge and agree that
"Cause" shall not include any breach by Employee of the terms and
conditions of this Agreement, which breach, provided that the Board has
determined it is of a nature that is capable of being cured, is cured by
Employee within thirty (30) days after Employee receives written notice
from the Company specifying the nature of such breach.
(c) "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.
(d) "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.
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(a) If the Employment Period is terminated by the Company for Cause
then the Company shall have no further obligation hereunder or otherwise
with respect to Employee's employment from and after the termination date
except payment of Employee's Base Salary accrued through the effective date
of such termination.
(b) If the Employment Period is terminated (i) by the Company without
Cause; or (ii) due to Employee's death or Permanent Disability; or (iii)
due to Employee's resignation for or without Good Reason (as defined
below), Employee (or his designated beneficiary) shall be entitled to
receive (A) Severance Pay (as defined below) and (B) 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.
"Severance Pay" shall mean a cash payment equal to a percentage of
Employee's Base Salary, payable for one year from the date of such
termination, in regular installments in accordance with the Company's
regular payroll practices for salaried officers in effect at such time, as
follows:
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(A) with respect to a termination by the Company without Cause,
or resignation by Employee for Good Reason or due to Employee's death
or Permanent Disability, 130% of the Base Salary; or
(B) with respect to a termination due to Employee's resignation
without Good Reason: (A) 130% of the Base Salary if the date of
termination is on or after the third anniversary of the Effective
Date; (B) 86% of the Base Salary if the date of termination is on or
after the second anniversary, but prior to the third anniversary, of
the Effective Date; (C) 43% of the Base Salary if the date of
termination is on or after the first anniversary, but prior to the
second anniversary, of the Effective Date; or (D) zero if the date of
termination is prior the first anniversary of the Effective Date.
(c) The Employee hereby agrees that upon any termination of the
Employment Period for any reason the Company shall not have any liability
to Employee except for the payments required to be made by this Section 3.2
and except 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.
(d) Notwithstanding any provision hereof other than Section 3.3(d),
after termination or expiration of the Employment Period for any reason (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 Section
3.2 and Section 3.3 hereof.
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3.3 Obligations On Termination.
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(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 request to discharge its continuing obligations 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.
(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, financial statements, reports, notes, contracts, lists,
blueprints, and other documents or materials, or copies, summaries or
excerpts 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
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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
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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 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.
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(a) 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;
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(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.
(b) 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 location where
the Company or any of its Affiliated Entities provides services or engages
in the Business, including any Medicare certified outpatient renal dialysis
facility or any other facility providing any services or engaging in any
activities of the Business which is (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 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
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of Section 4.2 hereof, Employee hereby agrees that, during the Restricted
Period, he will not, directly or
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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,
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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
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Employment Period or at all times thereafter, he shall not disclose to any
person or entity not employed by the 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 Liquidating, 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
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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
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circumstances. The court in each case shall reduce the time period and/or
Territory to permissible duration or size.
4.7 Remedies.
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(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
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
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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
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With copies to: Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
Fax: 312/000-0000
If to Employee: Xxxxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, 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
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this Agreement shall not affect the enforceability or validity of any other
provision.
5.3 Entire Agreement. This Agreement and those documents expressly
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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 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 in separate
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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
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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
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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.
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5.7 Amendment and Waiver. Any provision of this Agreement may be amended,
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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
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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
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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.
5.10 Employee Acknowledgment. The Employee acknowledges (a) that he has
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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
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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
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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. In addition, the Company shall
provide Employee with contractual indemnification on terms consistent with that
provided to other executives of the Company.
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5.13 Successors/Binding Agreement.
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(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 its 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.
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IN WITNESS WHEREOF, the parties have caused executed this Agreement to be
duly executed and delivered as of on the day and year first above written.
THE COMPANY:
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EVEREST HEALTHCARE SERVICES
CORPORATION
By:/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Chief Executive Officer
EMPLOYEE:
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/s/ Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx
00
EXHIBIT A
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Primary Responsibilities of Employee
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Employee, as Chief Financial Officer, will be a "hands on" financial executive
with full responsibility and accountability for the Accounting, Tax, Finance,
Treasury, SEC/Regulatory compliance and reporting, Information Technology, and
Facilities Management operations for the Company. Employee will direct,
administer and coordinate the activities of the Company in accordance with the
goals, objectives, and policies established by the Board of Directors, Chief
Executive Officer, and federal and state regulatory agencies. Employee will
institute policies and objectives covering the organizations financial
performance, quality, regulatory compliance, and growth of the Company.
Employee will have responsibility for fostering open communications between all
business segments and departments with clear lines of authority and delegated
responsibilities maintained and consistently monitored.
Specific responsibilities will include:
. Develop and maintain a financial organization that leads the industry in
accurate and timely financial/tax reporting, regulatory compliance and
facilities standards.
. Provide strategic direction and leadership to achieve established profit
plan goals by developing and implementing strategies and tactics which will
build a return-on-investment and increase earnings. Direct and analyze
studies of general economic, business and financial conditions and measure
their impact on the organization's policies and operations. Review the
financial impact of both existing and new service
offerings/recommendations, keeping abreast of competitor actions, and think
strategically about new financial products, services, applications,
programs and markets.
. Develop both short and long-range strategic financial plans and programs,
as well as operational support systems, which are responsive to both
company and industry challenges. Propose and implement policies for the
establishment and maintenance of inventory levels for raw materials,
equipment, supplies, and materials in process.
. Lead the requisite due diligence, financial analysis, and preparation of
pro-forma information for all potential acquisition and joint venture
targets.
. Ensure that the organization is in full compliance with all federal, state
and other regulatory and licensing agencies' requirements. This includes
all GAAP (Generally Accepted Accounting Principles) and FASB (Federal
Accounting Standards Board) regulations and promulgation, along with strict
adherence to the Federal Social Security Act "Anti-Kickback" and "Xxxxx II"
statutes.
. Develop monthly and annual revenue forecasts. Ensure that the revenue,
volume and profitability objectives are achieved while also leading the
industry in quality outcomes.
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Also prepare reasonable long-range forecasts of volume, marketshare,
financial requirements, human resource needs, medical practice changes, and
facility requirements.
. Oversee strategic information systems, plans, and programs to ensure that
the organization's IT architecture, resources, and information reporting is
state-of-the-art and compatible with the company's needs and growth
objectives.
. Ensure that the financial, information technology, and other functions
reporting to the Chief Financial Officer have a full complement of
aggressive, well-prepared, well-motivated, ethical, and highly competent
professionals at all times. Develop appropriate programs and processes as
needed in the areas of recruitment, training, and full communications.
. Continually benchmark actual operating results (financial and quality)
against established goals and budget in a time frame which allows
corrective action to be taken on a timely basis. Establish uniform and
verifiable standards of performance. Develop new metrics as necessary.
. Develop and maintain close professional relationships, where possible, with
officers of key customers, prospective customers, professional services
organizations and vendors. Interaction with and development of
relationships with the financial community and investors, including
interaction with commercial lenders, attorneys, investment bankers and
financial analysts.
. Participate in professional organizations, associations, and educational
programs/seminars in order to build long-term business relationships and
identify new business opportunities that can be opportunistically pursued.
. Build community relations consistent with corporate goals of good
citizenship by responding to community requirements and reciprocally
informing the community of company programs and events.
. Implement established corporate administrative policies and procedures to
include maintenance of permanent records in compliance with corporate,
legal, and health agency requirements.
. Advise the Chief Executive Officer of the projected impact of policies and
practices on investments, quality, and earnings. Contribute, as a valued
member of senior management, to an atmosphere of shared knowledge and
strategic creativity with other management members.
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