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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of April 26, 1999,
between CORAM HEALTHCARE CORPORATION, a Delaware corporation ("Coram"), and
Xxxxxxx X. Xxxxx, a resident of Colorado ("Executive").
W I T N E S S E T H:
WHEREAS, Coram and its subsidiaries and affiliates are engaged in
providing (i) alternate site infusion therapy and related home health services,
(ii) ancillary network management services for third party payor customers
relating to their home health benefits, (iii) specialty mail order and
prescription benefit management services, and (iv) certain clinical research and
medical informatics services throughout the United States and in certain parts
of Canada (Coram's Business Lines);
WHEREAS, Executive is considered to be important to the continued
improvement and success of Coram; and
WHEREAS, Coram desires to avail itself of Executive's talents and
expertise in the management of the business of Coram, and to employ him/her in
the capacity and with the responsibilities described on Exhibit A hereto, and
Executive is willing to accept such employment.
NOW, THEREFORE, in consideration of the premises, and other mutual
promises and covenants hereinafter contained, Coram and Executive do hereby
agree, for their mutual benefit, as follows:
SECTION 1. EMPLOYMENT.
Coram shall employ Executive under this Agreement, and Executive
accepts such employment upon the terms and conditions set forth below.
SECTION 2. POSITION AND DUTIES.
During the period that Executive is employed by Coram pursuant to this
Agreement, the Executive shall serve Coram in the capacity and with the title
set forth on Exhibit A hereto. In carrying out his/her duties under this
Agreement, Executive shall have such duties and responsibilities usually
incident to the office to which the Executive has been appointed, together with
such other duties defined by the person to whom the Executive reports. Executive
may also hold similar offices with Coram's subsidiaries and affiliates and/or
their successors. Except as otherwise set forth in this Agreement, Executive
shall perform such duties as may be assigned to him/her from time to time by and
shall report to the officer specified on Exhibit A hereto. Executive shall
devote all of his/her normal working time and best efforts in the best interest
of and on behalf of Coram throughout the time he/she is employed by Coram.
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SECTION 3. BASE SALARY AND BENEFITS.
For all services rendered by Executive pursuant to this Agreement,
Coram shall pay Executive the following compensation:
(a) A base salary at the annual rate set forth on Exhibit A hereto,
such salary to be paid in accordance with Coram's general payroll practices. The
officer to whom the Executive reports, Coram's Board of Directors or its
Compensation Committee, as appropriate, shall review the Executive's salary at
least annually, and such reviewing party may make increases but not decreases to
the Executive's salary at its discretion.
(b) Executive shall be entitled to participate in a bonus plan approved
by the Board of Directors as outlined on Exhibit A. Executive shall also be
entitled to any other discretionary bonuses approved by the Board of Directors
or the Compensation Committee.
(c) Subject to Coram's eligibility and qualification requirements for
its management level employees, Executive shall be entitled to participate in
any employee retirement, benefit or welfare, deferred compensation or other
benefit plans provided by Coram to its employees and/or to its senior managers,
such as life insurance, health and dental, retirement savings and disability
plans which Coram has in effect or may adopt from time to time together with any
other benefits described on Exhibit A hereto. In addition, Coram shall provide
Executive the following additional benefits while the Executive is employed with
Coram:
(i) paid time off in accordance with Coram's general
policies and procedures applicable to the paid time
off benefits afforded to Coram's employees;
(ii) payment of dues for such professional societies and
associations of which Executive is a member in
furtherance of his duties hereunder;
(iii) disability insurance coverage paying benefits equal
to at least 90% of Executive's earnings, either
through a corporate group disability insurance plan
or other individual disability plan chosen by Coram;
(iv) reimbursement to Executive of expenses incurred for
the advice of Executive's counsel and/or accountant
not to exceed $5,000 per annum for estate and tax
planning services for the benefit of Executive; and
(v) consideration, at least annually, by the Board of
Directors or its Stock Option Committee for the grant
to Executive of additional options to purchase shares
of common stock of Coram, and participation in any
and all other stock option plans made available to
senior managers of Coram.
(vi) Option to travel First Class on all business trips.
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(d) Coram shall reimburse Executive for all reasonable expenses
incurred by him/her in the course of performing his/her duties under this
Agreement which are consistent with the Company's policies in effect from time
to time with respect to travel, entertainment, and other business expenses,
subject to Coram's requirements for reporting and documenting such expenses.
(e) For purposes of administration, the terms of this Section 3 shall
be given effect on a pro-rata basis for partial calendar years and otherwise
administered on a calendar year basis.
SECTION 4. TERM AND TERMINATION.
(a) Unless otherwise terminated in accordance with the provisions
hereof, the term of employment provided for in this Agreement shall commence as
of the date first written above, and shall continue in full force and effect for
the period of time specified on Exhibit A hereto (the "Initial Term").
(b) During the Initial Term, the Executive's employment with Coram may
be terminated as follows:
(i) by Coram at any time for "Cause" (as that term is defined
below);
(ii) immediately upon the death of Executive;
(iii) immediately upon the Executive becoming no longer able to
perform his/her duties hereunder due to the "Disability"
(as that term is defined below); or
(iv) immediately upon the voluntary resignation of the
Executive.
In the event the Initial Term is terminated in accordance with this Subsection
(b), Coram shall provide the Executive with all amounts of annual salary and
bonus, if applicable, earned by the Executive through the effective date of
termination if the Executive participates in a bonus plan that operates on a
quarterly, semi-annual or annual basis, the Executive shall be entitled to
receive a pro rata share of the bonus he/she would have received had he/she been
employed throughout the entire bonus measurement period provided that, on the
effective date of termination the Executive was achieving the level of
performance (calculated on a pro rata basis for the time the Executive was
employed during the period in question) required for earning such bonus through
the date of such termination.
(c) Upon the conclusion of the Initial Term, the Executive's employment
status shall be that of an "at will" employee, but the other terms and
conditions of this Agreement shall continue to apply as set forth herein.
Accordingly, the Executive's employment following the Initial Term may be
terminated at any time by either the Executive or Coram upon written notice to
the other party. If the Executive terminates his/her employment with Coram after
the initial Term pursuant to a voluntary resignation or if the Executive's
employment is terminated by virtue of a "Disability" or the Executive's death,
Coram shall provide the Executive or his/her
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estate with all amounts of annual salary and bonus, if applicable, earned by the
Executive through the effective date of termination if the Executive
participates in a bonus plan that operates on a quarterly, semi-annual or annual
basis, the Executive shall be entitled to receive a pro rata share of the bonus
he/she would have received had he/she been employed throughout the entire bonus
measurement period provided that, on the effective date of termination the
Executive was achieving the level of performance (calculated on a pro rata basis
for the time the Executive was employed during the period in question) required
for earning such bonus through the date of such termination.
If Coram terminates the employment of the Executive at any time during
the Initial Term or thereafter for any reason other than for "Cause," Coram
shall provide the following to the Executive:
(i) payment of all amounts of base salary, earned by the
Executive through the effective date of termination;
(ii) continuation of Executive's base salary at its then
current rate for the duration of the Severance Period
described on Exhibit A hereto (the "Severance
Period"), payable in accordance with Coram's normal
payroll practices;
(iii) continuation of all health benefits for the period of
time contemplated for the Severance Period at no cost
to Executive other than the premium payable by the
Executive pursuant to the terms of Coram's health
benefit plan as consistently applied among Coram's
employees;
(iv) payment during the Severance Period of any life
insurance, disability or other benefits, if any, for
which Executive is then eligible under the terms of
Coram's employee retirement, benefit and welfare;
(v) if the Executive was achieving the level of
performance required (calculated on a pro rata basis
for the time the Executive was employed during the
period in question) for earning such bonus through
the date of such termination, (x) payment of
Executive's bonus through the date of termination,
calculated on the basis of the sum of the total
achievable amounts of each bonus divided by twelve
months, and multiplied by the number of months
employed during such fiscal year through the date of
termination, with any partial month of employment to
be treated as a full month; and (y) continued payment
of the total achievable amounts of each of
Executive's bonuses for the current fiscal year (or,
if greater, of the total achievable amounts of each
of Executive's bonuses in effect for the fiscal year
most recently ended) for the Severance Period if the
Executive was achieving the level of performance
required (calculated on a pro rata basis for the time
the Executive was employed during the period in
question) for earning such bonus through the date of
such termination;
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(vii) a right to exercise all options to purchase shares of
common stock of Coram that have been granted to
Executive by Coram that are exercisable by the
Executive upon the effective date of termination of
employment at any time during the Severance Period;
and
(vii) any other benefits payable in accordance with Exhibit
A hereto.
For purposes of this Subsection (c), the Executive's employment shall
be deemed to have been terminated if, at any time within twenty four (24) months
following a "Change of Control" of Coram, a "New Management Team" (as that term
is defined below) of Coram requires the Executive to relocate his/her primary
residence or primary work location listed on Exhibit A to a place that is more
than fifty (50) miles from such location. To receive the benefits contemplated
by this Subsection (c), however, the Executive must provide written notice to
Coram stating that the Executive deems his/her employment to have been
terminated as described herein.
SECTION 5. STOCK OPTION AGREEMENT AMENDMENT.
(a) The Company and Executive agree that all stock option
agreements between Xx. Xxxxx and the Company be amended to
provide that all outstanding options exercisable upon the
termination of the term of employment hereunder shall remain
exercisable for one year following the term of Xx. Xxxxx'x
employment hereunder. In addition, the agreement is to read
that all options will vest as to 100% of such options upon the
occurrence of a "Change of Control" as defined below.
SECTION 6. DEFINITIONS.
As used in this Agreement, the following terms shall have the meanings
set forth below:
(a) "CAUSE" shall mean (i) repeated violations by Executive of
Executive's obligations under Section 2 of this Agreement (other than as a
result of incapacity due to physical or mental illness) which violations (A) are
willful and deliberate on Executive's part, (B) are committed in bad faith or
without reasonable belief that such violations are in the best interests of
Coram, and (C) are not remedied in a reasonable period of time after receipt of
written notice from the person to whom the Executive reports designated in
Section 2 above or the Board of Directors of Coram specifying such violations,
or (ii) the conviction of Executive of a felony or any crime involving fraud,
dishonesty or moral turpitude.
(b) "CHANGE IN CONTROL" shall mean:
(i) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) (a "Person") of beneficial
ownership (within the meaning of Rule l3d-3
promulgated under the Exchange Act)
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of 30% or more of either (A) the shares of the $.001
par value common stock of Coram then outstanding (the
"Outstanding Company Common Stock") through open
market purchases of Common Stock, block transfers of
Common Stock or the acquisition of options, warrants
or other convertible debt or equity instruments,
including, but not limited to the Company's Series B
Senior Subordinated Convertible Notes or otherwise or
(B) the combined voting power of the then outstanding
voting securities of Coram entitled to vote generally
in the election of directors ("the Outstanding
Company Voting Securities"); provided, however, that
for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from Coram, (2)
any acquisition by Coram, (3) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by Coram or any corporation controlled by
Coram, (4) any acquisition by the Note Holders (but
not their transferees) as of the date hereof pursuant
to convertible debt instruments or stock warrants
then outstanding, or (5) any acquisition by any
corporation pursuant to a transaction which complies
with clauses (1), (2) and (3) of subsection (iii)
below;
(ii) during any period of two (2) consecutive years,
individuals who at the beginning of such period
constituted Coram's Board of Directors (together with
any new directors whose election to the Board of
Directors or whose nomination for election to the
Board of Directors was approved by a vote of at least
two-thirds of Coram's directors then still in office
who either were directors at the beginning of such
period or whose election or nomination was previously
so approved) and any individual serving during such
period as a member of Coram's Board of Directors
designated pursuant to the Securities Exchange
Agreement, dated as of May 6, 1998, as amended, among
Coram, Coram, Inc. and the Note Holders, cease for
any reason to constitute at least 40 % of Coram's
directors then in office;
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of Coram (a "Business
Combination"), in each case, unless, following such
Business Combination, (1) all or substantially all of
the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities immediately prior to such Business
Combination beneficially own, directly or indirectly,
more than 75% of, respectively, the shares of common
stock then outstanding and the combined voting power
of the then outstanding voting securities entitled to
vote generally in the election of directors, as the
case may be, of the corporation resulting from such
Business Combination (for example, but not by way of
limitation, a corporation which as a result of such
transaction owns Coram or all or substantially all of
Coram's assets either directly or through one or more
subsidiaries) in substantially the same proportions
as their ownership, immediately prior to
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such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting
Securities, as the case may be, (2) no party
(excluding any corporation resulting from such
Business Combination or any employee benefit plan (or
related trust) of the company or such corporation
resulting from such Business Combination)
beneficially owns, directly or indirectly, 30% or
more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such
Business Combination or the combined voting power of
the then outstanding voting securities of such
corporation except to the extent that such ownership
existed prior to the Business Combination, and (3) at
least a majority of the non-executive members of the
board of directors of the corporation resulting from
such Business Combination were members of the Board
of Directors of Coram at the time of the execution of
this agreement, or of the action of the Board of
Directors, providing for such Business Combination.
(c) "CODE" shall mean the Internal Revenue Code of 1986 and all
regulations promulgated thereunder, as the same may be amended from time to
time.
(d) "DISABILITY" shall be deemed to have occurred if Executive is
eligible and qualified for disability benefits under any Coram-sponsored
long-term disability program covering Executive. In the absence of a
Coram-sponsored long-term disability program covering Executive, Disability
shall mean the inability of Executive, as determined by the Board of Directors,
to substantially perform (with or without reasonable accommodations as that term
is defined under the Americans with Disabilities Act) the essential functions of
his/her regular duties and responsibilities due to a medically determinable
physical or mental impairment which has lasted (or can reasonably be expected to
last) for a period of six consecutive months.
(e) "NEW MANAGEMENT TEAM" shall refer to any group of senior management
of Coram that does not include Xxxxxxx X. Xxxxx as Xxxxx'x Chief Executive
Officer or President.
(f) "NOTE HOLDERS" shall mean Cerberus Partners, L.P.; Xxxxxxx Sachs
Credit Partners, L.P.; Foothill Capital Corporation and their respective
affiliates and associates.
SECTION 7. NON-COMPETITION.
(a) General. Executive and Coram understand and agree that the purpose
of the provisions of this Section 7 is to protect legitimate business interests
of the Company, as more fully described below, and is not intended to impair or
infringe upon Executive's right to work, earn a living, or acquire and possess
property from the fruits of his labor. Executive hereby acknowledges that the
post-employment restrictions set forth in this Section 7 are reasonable and that
they do not, and will not, unduly impair his ability to earn a living after the
termination of this Agreement. Therefore, subject to the limitations of
reasonableness imposed by law, Executive shall be subject to the restrictions
set forth in this Section 7.
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(b) Definitions. The following capitalized terms used in this Section 7
shall have the meanings assigned to them below, which definitions shall apply to
both the singular and the plural forms of such terms:
"Competitive Position" means any employment or engagement as a
consultant with a Competitor in which Executive will use or is likely to use any
Confidential Information or Trade Secrets, or in which Executive has duties for
such Competitor that relate to Competitive Services and that are the same or
similar to those services actually performed by Executive for the Company;
"Competitive Services" means any of Coram's Business Lines for
which the Executive is responsible or with which the Executive was materially
involved.
"Competitor" means any Person engaged, wholly or in part, in
Competitive Services.
"Confidential Information" means all information regarding
Coram, its activities, business or clients that is the subject of reasonable
efforts by Coram to maintain its confidentiality and that is not generally
disclosed by practice or authority to persons not employed by Coram, but that
does not rise to the level of a Trade Secret. "Confidential Information" shall
include, but is not limited to, financial plans and data concerning Coram;
management planning information; business plans; operational methods; market
studies; marketing plans or strategies; product development techniques or plans;
customer lists; details of customer contracts; current and anticipated customer
requirements; past, current and planned research and development; business
acquisition plans; and new personnel acquisition plans. "Confidential
Information" shall not include information that has become generally available
to the public by the act of one who has the right to disclose such information
without violating any right or privilege of Coram. This definition shall not
limit any definition of "confidential information" or any equivalent term under
state or federal law.
"Determination Date" means the date of termination of
Executive's employment with Coram for any reason whatsoever or any earlier date
(during the employment period) of an alleged breach of the Restrictive Covenants
by Executive.
"Person" means any individual or any corporation, partnership,
joint venture, limited liability company, association or other entity or
enterprise.
"Principal or Representative" means a principal, owner,
partner, shareholder, joint venturer, investor, member, trustee, director,
officer, manager, employee, agent, representative or consultant.
"Protected Customers" means any Person to whom Coram has sold
its products or services or solicited to sell its products or services during
the twelve (12) months prior to the Determination Date.
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"Protected Employees" means employees of Coram who were
employed by Coram at any time within six (6) months prior to the Determination
Date.
"Restricted Period" means the entire period of time that the
Executive is employed by Coram whether as an at will employee or otherwise and a
period extending for a period of time equal to the duration of the "Severance
Period" described on Exhibit A from the termination of Executive's employment
with Coram.
"Restricted Territory" means the United States and Ontario,
Canada.
"Restrictive Covenants" means the restrictive covenants
contained in Section 7(c) hereof.
"Trade Secret" means all information, without regard to form,
including, but not limited to, technical or nontechnical data, a formula, a
pattern, a compilation, a program, a device, a method, a technique, a drawing, a
process, financial data, financial plans, product plans, distribution lists or a
list of actual or potential customers, advertisers or suppliers which is not
commonly known by or available to the public and which information: (A) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use; and (B) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy. Without
limiting the foregoing, Trade Secret means any item of Confidential Information
that constitutes a "trade secret(s)" under the common law or statutory law of
the State of Delaware.
(c) Restrictive Covenants.
(i) Restriction on Disclosure and Use of Confidential
Information and Trade Secrets. Executive understands
and agrees that the Confidential Information and
Trade Secrets constitute valuable assets of Coram and
its affiliated entities, and may not be converted to
Executive's own use. Accordingly, Executive hereby
agrees that Executive shall not, directly or
indirectly, at any time during the Term of employment
or at any time thereafter reveal, divulge, or
disclose to any Person not expressly authorized by
Coram in writing any Confidential Information, and
Executive shall not, directly or indirectly, at any
time during the Term of employment or at any time
thereafter use or make use of any Confidential
Information in connection with any business activity
other than that of Coram. Throughout the term of this
Agreement and at all times after the date that this
Agreement terminates for any reason, Executive shall
not directly or indirectly transmit or disclose any
Trade Secret of Coram to any Person, and shall not
make use of any such Trade Secret, directly or
indirectly, for himself or for others, without the
prior written consent of Coram. The parties
acknowledge and agree that this Agreement is not
intended to, and does not, alter either Coram's
rights or Executive's obligations under any state or
federal statutory or common law regarding trade
secrets and unfair trade practices.
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Anything herein to the contrary notwithstanding, Executive shall not be
restricted from disclosing or using Confidential Information that is required to
be disclosed by law, court order or other legal process; provided, however, that
in the event disclosure is required by law, Executive shall provide Coram with
prompt notice of such requirement so that Coram may seek an appropriate
protective order prior to any such required disclosure by Executive.
(ii) Nonsolicitation of Protected Employees. Executive
understands and agrees that the relationship between
Coram and each of its Protected Employees constitutes
a valuable asset of Coram and may not be converted to
Executive's own use. Accordingly, Executive hereby
agrees that during the Restricted Period Executive
shall not directly or indirectly on Executive's own
behalf or as a Principal or Representative of any
Person or otherwise solicit or induce any Protected
Employee to terminate his or her employment
relationship with Coram or to enter into employment
with any other Person.
(iii) Restriction on Relationships with Protected
Customers. Executive understands and agrees that the
relationship between Coram and each of its Protected
Customers constitutes a valuable asset of Coram and
may not be converted to Executive's own use.
Accordingly, Executive hereby agrees that, during the
Restricted Period, Executive shall not, without the
prior written consent of Coram, directly or
indirectly, on Executive's own behalf or as a
Principal or Representative of any Person, solicit,
divert, take away or attempt to solicit, divert or
take away a Protected Customer for the purpose of
providing or selling Competitive Services; provided,
however, that the prohibition of this covenant shall
apply only to Protected Customers with whom Executive
had Material Contact on Coram's behalf during the
twelve (12) months immediately preceding the
termination of his employment hereunder. For purposes
of this Agreement, Executive had "Material Contact"
with a Protected Customer if (a) he had business
dealings with the Protected Customer on Coram's
behalf; (b) he was responsible for supervising or
coordinating the dealings between Coram and the
Protected Customer; or (c) he obtained Trade Secrets
or Confidential Information about the Protected
Customer as a result of his association with Coram.
(iv) Noncompetition with Coram. The parties
acknowledge: (A) that Executive's services
under this Agreement require special
expertise and talent in the provision of
Competitive Services and that Executive will
have substantial contacts with customers,
suppliers, advertisers and vendors of Coram;
(B) that pursuant to this Agreement,
Executive will be placed in a position of
trust and responsibility and he will have
access to a substantial amount of
Confidential Information and Trade Secrets
and that Coram is placing him in such
position and giving him access to such
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information in reliance upon his agreement
not to compete with Coram during the
Restricted Period; (C) that due to his/her
management duties, Executive will be the
repository of a substantial portion of the
goodwill of Coram and would have an unfair
advantage in competing with Coram; (D) that
Executive is capable of competing with
Coram; and (E) that Executive is capable of
obtaining gainful, lucrative and desirable
employment that does not violate the
restrictions contained in this Agreement. In
consideration of the compensation and
benefits being paid and to be paid by Coram
to Executive hereunder, Executive hereby
agrees that, during the Restricted Period,
Executive will not, without prior written
consent of Coram, directly or indirectly
seek or obtain a Competitive Position in the
Restricted Territory with a Competitor;
provided, however, that the provisions of
this Agreement shall not be deemed to
prohibit the ownership by Executive of any
securities of a Competitor of not more than
five percent (5%) of any class of securities
of any corporation having a class of
securities registered pursuant to the
Securities Exchange Act of 1934, as amended.
(d) Enforcement of Restrictive Covenants.
(i) Rights and Remedies Upon Breach. In the event
Executive breaches, or threatens to commit a breach
of, any of the provisions of the Restrictive
Covenants, Coram shall have the following rights and
remedies, which shall be independent of any others
and severally enforceable, and shall be in addition
to, and not in lieu of, any other rights and remedies
available to Coram at law or in equity:
(A) the right and remedy to enjoin,
preliminarily and permanently, Executive
from violating or threatening to violate the
Restrictive Covenants and to have the
Restrictive Covenants specifically enforced
by any court of competent jurisdiction, it
being agreed that any breach or threatened
breach of the Restrictive Covenants would
cause irreparable injury to Coram and that
money damages would not provide an adequate
remedy to Coram; and
(B) the right and remedy to require Executive to
account for and pay over to Coram all
compensation, profits, monies, accruals,
increments or other benefits derived or
received by Executive as the result of any
transactions constituting a breach of the
Restrictive Covenants; and
(C) the right and remedy to suspend payment of
any termination benefit payments (but not
insurance or health benefits) during the
pendency of any good faith dispute regarding
Executive's breach
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of his/her covenants, provided that all
amounts shall be paid to the Executive if
Executive is found not to have been in
breach of such covenants.
(ii) Severability of Covenants. Executive acknowledges and
agrees that the Restrictive Covenants are reasonable
and valid in time and scope and in all other
respects. The covenants set forth in this Agreement
shall be considered and construed as separate and
independent covenants. Should any part or provision
of any covenant be held invalid, void or
unenforceable in any court of competent jurisdiction,
such invalidity, voidness or unenforceability shall
not render invalid, void or unenforceable any other
part or provision of this Agreement. If any portion
of the foregoing provisions is found to be invalid or
unenforceable by a court of competent jurisdiction
because its duration, the territory, the definition
of activities or the definition of information
covered is considered to be invalid or unreasonable
in scope, the invalid or unreasonable term shall be
redefined, or a new enforceable term provided, such
that the intent of Coram and Executive in agreeing to
the provisions of this Agreement will not be impaired
and the provision in question shall be enforceable to
the fullest extent of the applicable laws.
SECTION 8. ASSIGNMENT.
(a) This Agreement is personal to the Executive and without the prior
written consent of Coram shall not be assignable by the Executive otherwise than
by will or the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
Coram and its successors and assigns.
SECTION 9. ARBITRATION.
(a) To the extent permitted by applicable law, any dispute or
controversy arising under or in connection with this Agreement shall be resolved
exclusively by arbitration using one arbitrator in the city closest to
Executive's primary work location under the auspices of and in accordance with
the Employment Arbitration rules of the American Arbitration Association then in
effect. The agreement set forth herein to arbitrate shall be specifically
enforceable under prevailing arbitration law.
(b) By initialing below, the parties hereto (i) acknowledge that they
have read and understood the provisions of this section regarding arbitration
and (ii) that performance of this Agreement will be in interstate commerce as
that term is used in the Federal Arbitration Act, 9 U.S.C. Section 1 et seq.,
and the parties contemplated substantial interstate activity in the performance
of this Agreement including, but not limited to, interstate travel, the use of
interstate phone lines, the use of the U.S. mail services and other interstate
courier services.
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[Executive] For Coram:
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(c) Notice of the demand for arbitration shall be filed in writing
with the other party to this Agreement and with the American Arbitration
Association. The demand for arbitration shall be made within a reasonable time
after the claim, dispute or other matter in question has arisen, and in no event
shall it be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in question would be
barred by the applicable statute of limitations.
(d) The award rendered by the arbitrator shall be final and judgment
may be entered upon it in accordance with applicable law in any court having
jurisdiction thereof. The findings of fact and conclusions of law of the
arbitrator shall be reduced to writing.
SECTION 10. FEES AND EXPENSES.
In the event Executive incurs legal fees and any other expenses in
seeking to obtain or to enforce any rights or benefits provided by this
Agreement and is successful, in whole or in part, in obtaining or enforcing any
such rights or benefits through settlement, arbitration, or otherwise, Coram
shall pay Executive's reasonable, documented legal fees and expenses incurred in
enforcing this Agreement and the fees of the arbitrator or arbitrators. Except
to the extent provided in the preceding sentence, each party shall pay its own
legal fees and other expenses associated with any dispute.
SECTION 11. CHOICE OF LAW.
Except as otherwise specifically set forth in this Agreement, this
Agreement shall be interpreted, construed and governed in accordance with the
laws of the State of Colorado.
SECTION 12. WAIVER OF BREACH.
Failure of either party to insist, in one or more instances, on
performance by the other in strict accordance with the terms and conditions of
this Agreement shall not be deemed a waiver or relinquishment of any right
granted in this Agreement or of the future performance of any such term or
condition or of any other term or condition of this Agreement, unless such
waiver is contained in a writing signed by the party making the waiver.
SECTION 13. NOTICES.
All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered or three days after mailing if mailed, first class, certified
mail, postage prepaid:
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To Coram: Coram Healthcare Corporation
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
ATTN: Legal Department
To Executive: At the address for notices listed in
Exhibit A hereto.
Any party may change the address to which notices, requests, demands
and other communications shall be delivered or mailed by giving notice thereof
to the other party in the same manner provided herein.
SECTION 14. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes any other employment
agreements, letters of understanding, whether written or oral, between the
parties with respect to the matters set forth herein. This Agreement may not be
changed orally, but only by an instrument in writing signed by the party against
whom enforcement of any waiver, change, modification, extension or discharge is
sought.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
CORAM HEALTHCARE CORPORATION
By:
-------------------------------- ------------------------------
For the Board of Directors [EXECUTIVE]
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EXHIBIT A
Name and primary residence address for notices:
Xxxxxxx X. Xxxxx
----------------------------------
0000 Xxxx Xxxxx Xxxx
----------------------------------
Xxxxxxxx Xxxxxxx, XX 00000
----------------------------------
Duration of Initial Term: Through April 30, 2002
Office and Duties: President and Chief Executive Officer
Office of Person to Whom the Executive Reports: Board of Directors
Base Salary: $425,000 per year.
Severance Period: 24 months.
Primary Work Location: Denver, Colorado
Car Allowance: $600 per month
Change of Control Payment: $500,000
Bonus Compensation:
If the Company hits the percentage of its EBITDA target set forth
below, the Executive will be entitled to receive as bonus that percentage of his
Base Salary (as in effect on the last day of the fiscal year in question) set
forth below:
PERCENTAGE OF EBITDA TARGET PERCENTAGE OF BASE SALARY
--------------------------- -------------------------
100.0% 60%
101.5% 65%
103.0% 70%
104.5% 75%
106.0% 80%
107.5% 85%
109.0% 90%
110.5% 95%
112.0% 100%
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