EXHIBIT 10-O
Executive Employment Agreement
This Executive Employment Agreement is entered into this 19/th/ day of November,
2002 ("Effective Date") between Priority Healthcare Corporation and its
affiliated and subsidiary companies, with its primary offices at 000 Xxxxxxxxxx
Xxxx, Xxxxx 000, Xxxx Xxxx, Xxxxxxx 00000 ("Company") and Xxxxxxx X. Xxxx
("Executive").
WITNESSETH:
WHEREAS, Company desires to employ Executive for the period provided for in this
Agreement and the Executive is willing to accept such employment with the
Company on a full-time basis, all in accordance with the terms and conditions
specified in this Agreement;
NOW THEREFORE, for and in consideration of ten dollars, the terms contained in
this Agreement and other good and valuable consideration, the receipt and
sufficiency of which is affirmed by the parties by their execution of this
Agreement, the parties agree and covenant to the following terms and conditions:
1. Employment
1.1 The Company hereby employs the Executive and the Executive hereby accepts
employment with the Company as the Senior Vice President and Chief
Financial Officer for the period set forth in Section 1.3, upon the terms
and conditions outlined in this Agreement.
1.2 The Executive affirms he is under no other obligation to any former
employer or to any other third party that is in any way inconsistent with
or imposes any restriction upon the Executive's employment with the
Company.
1.3 Unless otherwise terminated under the terms of this Agreement, the term of
Executive's employment under this Agreement shall be initially for the
period beginning upon the date of execution hereof and continuing through
December 31, 2002; PROVIDED THAT on December 31, 2002 and every December
31st thereafter, the term of the Executive's employment shall automatically
be extended for an additional one (1) year period ("Employment Term"),
unless ninety (90) days prior to December 31st each year, the Company shall
have given the Executive or the Executive shall have given the Company a
written notice that the Employment Term shall not be extended.
2. Duties
2.1 The Executive shall be employed as Senior Vice President and Chief
Financial Officer of the Company, and shall, subject to the direction of
the Board of Directors of Company ("the Board") and his supervisor, use his
best efforts to faithfully and competently perform such duties as are
detailed in Exhibit A, attached hereto and
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hereby incorporated herein and shall also perform and discharge such other
executive employment duties and responsibilities consistent with his
position as Senior Vice President and Chief Financial Officer.
2.2 Executive's primary workplace will be located in greater Orlando, Florida.
Except as set out herein or otherwise be approved in advance by the Board
and except for reasonable periods of absence related to vacation, sick
leave, other personal matters, personal injury and/or service activities,
Executive shall devote his full time, attention, skill and effort during
normal business hours throughout Executive's employment, to the duties and
responsibilities associated with his position.
2.3 Executive shall not, during such employment with Company, engage in any
other business or volunteer activity requiring any substantial amount of
his time (whether or not such business activity is pursued for gain, profit
or pecuniary advantage).
3. Compensation
3.1 As compensation for the performance of Exhibit A duties herein, the Company
shall pay the Executive a base salary specified in Exhibit B "Salary &
Benefits", attached hereto and hereby incorporated herein. The base salary
shall be identified hereinafter as "Salary." Any Salary hereunder shall be
paid at regular intervals but no less frequently than bi-weekly in
accordance with the Company's payroll practices. Annual increases in salary
shall be determined by the Board and the CEO in their sole discretion.
3.2 Executive will be entitled to receive bonus compensation from the Company
annually, based upon a set of performance targets established by the
Chairman and Vice Chairman of the Executive Committee, the CEO and as
approved by the Board or, at the Board's direction, the Compensation
Committee of the Board of Directors of the Company ("Bonus Performance
Targets"). Annually said Bonus Performance Targets shall be incorporated as
Exhibit C attached to this Agreement, amended annually and hereby
incorporated herein, without the necessity of said Exhibit being executed
by the parties to this Agreement.
3.3 Payment of any Base Salary and/or Bonus hereunder shall be subject to
applicable withholding, payroll and other local, state and federal taxes,
as required by applicable law or the Company's Executive benefit plans.
4. Other Benefits
During the term hereof, and any extensions hereto, Executive shall be
eligible to:
4.1 participate in Executive fringe benefits, pension and/or profit sharing
plans that may be provided by Company for its Executive Executives in
accordance with the provisions of such plans, as such plans may be in
effect from time to time;
4.2 participate in medical, health plans and/or other Executive welfare and/or
benefit plans that may be provided by the Company for its Executive
Executives in
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accordance with the provisions of such plans that may be in effect from
time to time;
4.3 twenty-five (25) paid vacation days in each calendar year, beginning
January 1, 2002, as well as all paid holidays given by the Company to its
Executive officers;
4.4 personal time off, sick leave, sick pay and disability benefits in
accordance with any Company policy that may be applicable to Executive
Executives from time to time;
4.5 reimbursement for all reasonably necessary out-of-pocket business expenses
incurred by the Executive in the performance of his duties as detailed
herein, in accordance with Company's policies pertaining to such
out-of-pocket business expenses and in accordance with applicable state and
federal laws and regulations;
4.6 term insurance coverage on the life of the Executive in the aggregate
amount provided by the Company for its Executive Executives in accordance
with applicable Company benefit plans;
4.7 participation in any stock option plans generally available to the
Company's key Executives; and
4.8 such additional benefits as may be agreed upon by the parties from time to
time and incorporated herein as Exhibit E.
5. Confidential and Proprietary Information
5.1 Executive has and will have access to and will participate in the
development of confidential and/or proprietary information and trade
secrets related to the business of the Company and its current and future
subsidiaries, affiliates and related entities of the Company, hereinafter
referred to as "Confidential Information," including but not limited to:
. Customer and physician lists
. Patient confidential medical records and other personal information
. Referral sources
. Financial statements
. Cost and other financial reports
. Contract proposals or bidding information
. Business plans
. Training and operations methods, manuals and programs
. Reports and correspondence
. Systems, Processes, Policies and Procedures
. All other Tangible and Intangible property which are used in the
operation of the Company
. Information Systems and Software
5.2 Confidential Information does not include information that is or becomes
generally publicly available (unless in violation of Executive's
obligations under this
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Agreement) and/or Confidential Information that Executive receives on a
non-confidential basis and not known by him/her as confidential.
5.3 Executive shall not disclose, use or make known for his or another's
benefit any Confidential Information or use Confidential Information in any
way that is other than in the best interests of the Company.
5.4 Executive may disclose Confidential Information when required by applicable
law or judicial proceeding, but only after (a) providing notice to the
Company of the receipt of a request from applicable governmental authority
(b) advising the Company of Executive's intention to respond to such
request and (c) Company's sufficient opportunity to respond, challenge or
limit the scope of Executive's Disclosure.
5.5 Executive acknowledges and agrees that a remedy at law for breach or
threatened breach of this Section 5 would be inadequate and agrees that
Company shall be entitled to injunctive relief in addition to any other
available rights and remedies in case of any breach or threatened breach.
5.6 In the event of termination of Executive's employment with the Company for
any reason, including this Section 5, the Executive will immediately return
to Company any Confidential Information in whatever form possessed by
Executive.
5.7 Executive's obligations hereunder shall survive the expiration or
termination of this Agreement and shall apply to Executive's heirs,
successors and/or legal representatives.
6. Termination
6.1 Executive's termination of employment under this Agreement shall occur in
the event of one or more of the following:
6.1.1. Death of Executive;
6.1.2. Change of Control of the Company as defined in Exhibit D, attached
hereto and hereby incorporated herein.
6.1.3. Executive's Disability which results in Executive's inability to
perform his responsibilities as detailed herein for a period of more than
90 days, whether or not consecutive, within any consecutive twelve (12)
month period;
6.1.4. Executive's written notice to the Company, delivered at least 90
days prior to the effective date of the termination, that the Executive is
terminating his employment "for good reason," defined as:
a. Assignment to Executive of duties materially inconsistent with
Executive's position, authority, duties or responsibilities as
outlined herein;
b. Action by Company resulting in a material diminution or material
adverse change in Executive's title, position, authority, duties
or responsibilities;
c. Material breach by the Company of this Agreement, including
requiring Executive to be based at a location other than Orlando,
Florida metropolitan area, as specified in Section 2.2 of this
Agreement;
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d. Company failure to continue any cash or stock-based bonus plan,
retirement plan, welfare or other benefit or incentive plan,
unless the aggregate value of all such compensation, retirement
and benefit plans provided to the Executive is not less than the
aggregate value of the plans before such change;
e. a reduction by the Company of Executive's Base Salary as in
effect on the Effective Date of this Agreement or as said Base
Salary shall be increased hereafter from time to time
6.1.5. Company's termination of Executive without cause or notice to
Executive of nonrenewal of this Agreement under Section 1.3.
6.1.6. Company's written notice of termination of Executive "for cause,"
defined as Executive's:
a. Indictment of or the entering of a plea of nolo contendere by the
Executive with respect to having committed a felony;
b. Acts of fraud, theft or criminal conduct that are detrimental to
the financial condition or business reputation of the Company;
c. Acts of dishonesty or gross negligence by the Executive, which
acts would not be qualified for indemnification under the
Directors' and Officers' Liability Insurance Policy; or
d. Willful acts or failure(s) to act consistent with or willful
disregard of his obligations under Company policies or this
Agreement.
6.1.7 Executive shall not be deemed to have been terminated for cause
unless and until there shall have been delivered to him/her a copy of a
resolution duly adopted by the affirmative vote of not less than a majority
of the entire membership of the Company's Board at a meeting called and
held for the purpose (after reasonable notice to Executive and an
opportunity for Executive, together with his counsel, to be heard before
such Board), finding that, in the good faith opinion of such Board,
Executive was guilty of conduct constituting "cause" and specifying the
particulars thereof in detail.
6.2 In the event Executive's employment hereunder is terminated under Section
6.1.1, 6.1.2, 6.1.3, 6.1.4, or 6.1.5, Company shall pay to Executive, as
severance pay or liquidated damages or both, a lump-sum cash payment equal
to the present value of the sum of the following amounts:
a. The Base Salary that would have been paid to the Executive
throughout the greater of the number of months remaining under
the term of this Agreement or 12 months;
b. The annual bonus amount in the year of termination of Executive's
employment, calculated at the higher of the base bonus
opportunity or the average bonus percentage of Base Salary
payable to Executive for the two (2) years immediately preceding
the year of termination, and c. The annualized long-term
incentive award for the year in which the Executive's employment
is terminated, at the higher of the targeted level of the award
or the anticipated actual incentive award.
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6.3 Executive shall continue to participate in the medical, dental, life,
accident and disability benefit plans of the Company as provided for
herein on the same basis and at the same cost to Executive as on the
date of termination or resignation until the first anniversary of such
termination or resignation.
6.4 To the extent that Executive is not then 100% vested in any employer
matching contribution and earnings thereon allocated to his account in
the Company's 401(k) Plan and said non-vested amount is forfeited, the
Company will pay Executive a lump sum amount on the date of such
forfeiture equal to the non-vested forfeited amount.
6.5 To the extent that Executive's employment is terminated and Executive
is entitled to receive funds from Company's profit sharing plan,
deferred compensation plan, excess plan and/or the Equity Unit Plan
for the period of time during which Executive was actively engaged as
an Executive of Company, Company shall pay Executive any accrued
profit sharing or other amounts through the date of termination of
Executive's employment. However, Executive shall not, from the date of
Executive's termination from employment or during the period when
Company is paying Executive severance pay or liquidated damages or
both after such date of termination of employment, be entitled to
participate in any Company profit sharing programs.
6.6 Except as required by law and except as provided in Sections 6.2, 6.3,
6.4, 6.5 and 6.7, Company shall not be obligated to make any payments
to Executive or on his behalf by reason of Executive's cessation of
employment other than such amounts, if any, of his Salary as shall
have accrued and remain unpaid as of the date of cessation of
employment.
6.7 No interest shall accrue on or be paid with respect to any timely
payments made hereunder.
6.8 Any rights or interest of Executive in Restricted Stock or other Stock
Option Grants as provided for in the applicable Restricted Stock or
other Stock Option Plan documents and agreements.
7. Change of Control
7.1 Notwithstanding the foregoing, if a Change in Control of the Company
(as defined in Exhibit D) shall occur prior to the expiration of the
original term or any extensions of the term of this Agreement, then
the term of this Agreement shall automatically become a term of three
(3) years commencing on the date of any such Change in Control.
7.2 In the event a Change of Control as outlined in Exhibit D should
occur, the following benefits, less any amounts required to be
withheld therefrom under any applicable federal, state or local income
tax, other tax, or social security laws or
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similar statutes, shall be paid to Executive upon any termination of his
employment with the Company subsequent to a Change in Control:
(A) Within thirty (30) days following such a termination,
Executive shall be paid, at his then-effective salary, for services
performed through the date of his termination. In addition, Executive
shall be paid the bonus accrued through the date of termination,
calculated at the higher of the base bonus opportunity or the average
bonus percentage of Base Salary payable to Executive for the two (2)
years immediately preceding the year of termination, pro-rated for the
number of months from January 1 of the year in which the Change of
Control occurs through the end of the month in which the Change of
Control occurs and the annualized long-term incentive award for the
year in which the Change of Control occurs, at the higher of the
targeted level of the award or the anticipated actual incentive award,
pro-rated for the number of months from January 1 of the year in which
the Change of Control occurs through the end of the month in which the
Change of Control occurs.
(B) Within thirty (30) days following such a termination,
Executive shall be paid a lump sum payment of an amount equal to two
and nine-tenths (2.9) times Executive's "Base Amount." For purposes
hereof, Base Amount is defined as the higher of Executive's average
includable compensation paid by the Company for the five (5) most
recent taxable years ending before the date on which the Change in
Control occurs or the Base Salary plus Executive's applicable annual
bonus opportunity. The definition, interpretation and calculation of
the dollar amount of Base Amount shall be in a manner consistent with
and as required by the provisions of Section 280G of the Internal
Revenue Code of 1986, as amended ("Code"), and the regulations and
rulings of the Internal Revenue Service promulgated there under.
(C)(i) In the event that any payment or benefit (within the
meaning of Section 280G(b)(2) of the Code) paid or payable to the
Executive or for his benefit pursuant to the terms of this Agreement
or otherwise (including any benefit from the exercise of stock options
vested early because of a change in control) in connection with, or
arising out of, his employment with the Company or a change in
ownership or effective control of the Company or of a substantial
portion of its assets (a "Payment" or "Payments"), would be subject to
the excise tax imposed by Section 4999 of the Code or any interest,
penalties, additional tax or similar items are incurred by the
Executive with respect to such excise tax (such excise tax, together
with any such interest, penalties, additional tax or similar items are
hereinafter collectively referred to as the "Excise Tax"), then the
Executive will be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest, penalties, additional
tax or similar items imposed with respect thereto and the Excise Tax)
including any Excise Tax imposed upon the Gross-Up Payment, the
Executive
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retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(ii) An initial determination as to whether a Gross-Up Payment
is required pursuant to this Agreement and the amount of such Gross-Up
Payment shall be made at the Company's expense by an accounting firm
selected by the Company and reasonably acceptable to the Executive
which is designated as one of the four largest accounting firms in the
United States (the "Accounting Firm"). The Accounting Firm shall
provide its determination (the "Determination"), together with
detailed supporting calculations and documentation to the Company and
the Executive within ten days of the Termination Date if applicable,
or such other time as requested by the Company or by the Executive and
if the Accounting Firm determines that no Excise Tax is payable by the
Executive with respect to a Payment or Payments, it shall furnish the
Executive with an opinion reasonably acceptable to the Executive that
no Excise Tax will be imposed with respect to any such Payment or
Payments. Within ten days of the delivery of the Determination to the
Executive, the Executive shall have the right to dispute the
Determination (the "Dispute"). The Gross-Up Payment, if any, as
determined pursuant to this subsection 6(c) (ii) shall be paid by the
Company to the Executive within five days of the receipt of the
Accounting Firm's Determination. The existence of the Dispute shall
not in any way affect the Executive's right to receive the Gross-Up
Payment in accordance with the Determination. If there is no Dispute,
the Determination shall be binding, final and conclusive upon the
Company and the Executive subject to the application of subsection
6(c) (iii) below.
(iii) As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up
Payment (or a portion thereof) will be paid which should not have been
paid (an "Excess Payment") or a Gross-Up Payment (or a portion
thereof) which should have been paid will not have been paid (an
"Underpayment"). An Underpayment shall be deemed to have occurred (a)
upon notice (formal or informal) to the Executive from any
governmental taxing authority that the Executive's tax liability
(whether in respect of the Executive's current taxable year or in
respect of any prior taxable year) may be increased by reason of the
imposition of the Excise Tax on a Payment or Payments with respect to
which the Company has failed to make a sufficient Gross-Up Payment,
(b) upon a determination by a court, (c) by reason of determination by
the Company (which shall include the position taken by the Company,
together with its consolidated group, on its federal income tax
return) or (d) upon the resolution of the Dispute to the Executive's
satisfaction. If an Underpayment occurs, the Executive shall promptly
notify the Company and the Company shall promptly, but in any event,
at least five days prior to the date on which the
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applicable government taxing authority has requested payment, pay to the
Executive an additional Gross-Up Payment equal to the amount of the
Underpayment plus any interest, penalties, additional taxes or similar
items imposed on the Underpayment. An Excess Payment shall be deemed to
have occurred upon a "Final Determination" (as hereinafter defined) that
the Excise Tax shall not be imposed upon a Payment or Payments (or portion
thereof) with respect to which the Executive had previously received a
Gross-Up Payment. A "Final Determination" shall be deemed to have occurred
when the Executive has received from the applicable government taxing
authority a refund of taxes or other reduction in the Executive's tax
liability by reason of the Excise Payment and upon either (x) the date a
determination is made by, or an agreement is entered into with, the
applicable governmental taxing authority which finally and conclusively
binds the Executive and such taxing authority, or in the event that a claim
is brought before a court of competent jurisdiction, the date upon which a
final determination has been made by such court and either all appeals have
been taken and finally resolved or the time for all appeals has expired or
(y) the statute of limitations with respect to the Executive's applicable
tax return has expired. If an Excess Payment is determined to have been
made, the amount of the Excess Payment shall be treated as a loan by the
Company to the Executive and the Executive shall pay to the Company on
demand (but not less than ten days after the Final Determination of such
Excess Payment and written notice has been delivered to the Executive) the
amount of the Excess Payment plus interest at an annual rate equal to the
Applicable Federal Rate provided for in Section 1274(d) of the Code from
the date the Gross-Up Payment (to which the Excess Payment relates) was
paid to the Executive until the date of repayment to the Company.
(iv) Notwithstanding anything contained in this Agreement to the
contrary, in the event that, according to the Determination, an Excise Tax
will be imposed on any Payment or Payments, the Company shall pay to the
applicable government taxing authorities as Excise Tax withholding, the
amount of the Excise Tax that the Company has actually withheld from the
Payment or Payments.
7.3 The Company is aware that upon the occurrence of a Change in Control the
Board of Directors or a shareholder of the Company may then cause or
attempt to cause the Company to refuse to comply with its obligations under
this Agreement, or may cause or attempt to cause the Company to institute,
or may institute, litigation seeking to have this Agreement declared
unenforceable, or may take or attempt to take other action to deny
Executive the benefits intended under this Agreement. In these
circumstances, the purpose of this Agreement could be frustrated. It is the
intent of the Company that Executive not be required to incur the expenses
associated with the enforcement of his rights under this Agreement by
litigation or other legal action, nor be bound to negotiate any settlement
of his
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rights hereunder, because the cost and expense of such legal action or
settlement would substantially detract from the benefits intended to
be extended to Executive hereunder. Accordingly, if following a Change
in Control it should appear to Executive that the Company has failed
to comply with any of its obligations under this Agreement or in the
event that the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any litigation or
other legal action designed to deny, diminish or to recover from
Executive the benefits entitled to be provided to the Executive
hereunder, and that Executive has complied with all of his obligations
under this Agreement, the Company irrevocably authorizes Executive
from time to time to retain counsel of his choice, at the expense of
the Company as provided in this Section 7, to represent Executive in
connection with the initiation or defense of any litigation or other
legal action, whether such action is by or against the Company or any
director, officer, shareholder, or other person affiliated with the
Company, in any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Company and such counsel, the
Company irrevocably consents to Executive entering into an
attorney-client relationship with such counsel, and in that connection
the Company and Executive agree that a confidential relationship shall
exist between Executive and such counsel. The reasonable fees and
expenses of counsel selected from time to time by Executive as
hereinabove provided shall be paid or reimbursed to Executive by the
Company on a regular, periodic basis upon presentation by Executive of
a statement or statements prepared by such counsel in accordance with
its customary practices. Any legal expenses incurred by the Company by
reason of any dispute between the parties as to enforceability of or
the terms contained in this Agreement as provided by this Section 7,
notwithstanding the outcome of any such dispute, shall be the sole
responsibility of the Company, and the Company shall not take any
action to seek reimbursement from Executive for such expenses.
7.4 Executive is not required to mitigate the amount of benefit payments to be
made by the Company pursuant to this Agreement by seeking other employment
or otherwise, nor shall the amount of any benefit payments provided for in
this Agreement be reduced by any compensation earned by Executive as a
result of employment by another employer or which might have been earned by
Executive had Executive sought such employment, after the date of
termination of his employment with the Company or otherwise.
7.5 The Company shall also provide Executive with the benefits set forth in
Section 7 of this Agreement upon any termination of Executive's employment
with the Company at Executive's option after a Change in Control followed
by the happening of any one of the following events:
(A) Without Executive's express written consent, the assignment of
Executive to any duties which, in Executive's reasonable judgment, are
materially inconsistent with his positions, duties, responsibilities or
status with the Company immediately prior to the
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Change in Control or a substantial reduction of his duties or
responsibilities which, in Executive's reasonable opinion, does not
represent a promotion from his position, duties or responsibilities
immediately prior to the Change in Control.
(B) A reduction by the Company in Executive's salary from the level of
such salary immediately prior to the Change in Control or the Company's
failure to increase (within twelve (12) months of Executive's last increase
in base salary) Executive's base salary after a Change in Control in an
amount which at least equals, on a percentage basis, the average percentage
increase in base salary for all executive and senior officers of the
Company effected in the preceding twelve (12) months.
(C) The failure by the Company to continue in effect any incentive,
bonus or other compensation plan in which Executive participates, including
but not limited to the Company's stock option plans, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan), with
which Executive has consented, has been made with respect to such plan in
connection with the Change in Control, or the failure by the Company to
continue Executive's participation therein, or any action by the Company
which would directly or indirectly materially reduce Executive's
participation therein.
(D) The failure by the Company to continue to provide Executive with
benefits substantially similar to those enjoyed by Executive or to which
Executive was entitled under any of the Company's principal pension, profit
sharing, life insurance, medical, dental, health and accident, or
disability plans in which Executive was participating at the time of a
Change in Control, the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits or deprive
Executive of any material fringe benefit enjoyed by Executive or to which
Executive was entitled at the time of the Change in Control, or the failure
by the Company to provide Executive with the number of paid vacation and
sick leave days to which Executive is entitled on the basis of years of
service or position with the Company in accordance with the Company's
normal vacation policy in effect on the date hereof.
(E) The Company's requiring Executive to be based anywhere other than
the metropolitan area where the Company office at which he was based
immediately prior to the Change in Control was located, except for required
travel on the Company's business in accordance with the Company's past
management practices.
(F) Any failure of the Company to obtain the assumption of the
obligation to perform this Agreement by any successor as contemplated in
Section 8 hereof.
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(G) Any failure by the Company or its shareholders, as the case may
be, to reappoint or reelect Executive to a corporate office held by him
immediately prior to the Change in Control or his removal from any such
office including any seat held at such time on the Company's Board of
Directors.
(H) The effectiveness of a resignation, tendered at any time, either
before or after a Change in Control and regardless of whether formally
characterized as voluntary or otherwise, by Executive of any corporate
office held by him immediately prior to the Change in Control or of any
seat held at such time on the Company's Board of Directors, at the request
of the Company or at the request of the person obtaining control of the
Company in such Change in Control.
(I) Any purported termination of the Executive's employment which is
not effected pursuant to a Notice of Termination satisfying the
requirements of this Agreement.
(J) Any request by the Company that Executive participate in an
unlawful act or take any action constituting a breach of Executive's
professional standard of conduct.
(K) Any breach by the Company of any of the provisions of this
Agreement or any failure by the Company to carry out any of its obligations
hereunder.
Notwithstanding anything in this Agreement to the contrary, Executive's right to
terminate Executive's employment pursuant to this Section 7 shall not be
affected by Executive's incapacity due to physical or mental illness.
8. No Assignment
8.1 Neither this Agreement nor any right or interest hereunder is assignable by
Executive or Executive's beneficiaries or legal representatives without
Company's prior written consent; provided however, nothing in this
Agreement shall preclude the Executive from designating a beneficiary to
receive any benefit payable hereunder upon Executive's death or incapacity.
8.2 Notwithstanding the terms herein, this Agreement and the Company's rights
hereunder may be assigned by the Company pursuant to a merger or
consolidation that is not defined as a Change of Control in Exhibit D.
8.3 No right to receive payments under this Agreement shall be subject to
anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge, attachment, and levy or to assignment by operation of law.
Any attempt, voluntary or involuntary, to effect any such action shall be
null, void and of no effect.
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9. Severability
Should any clause, portion or section of this Agreement be unenforceable or
invalid for any reason, such unenforceability or invalidity shall not
affect the enforceability or validity of the remainder of this Agreement.
Should any particular covenant in this Agreement be held unreasonable or
unenforceable for any reason, including without limitation, the time
period, geographical area and scope of activity covered by such covenant,
then the covenant shall be given effect and enforced to whatever extent
would be reasonable and enforceable.
10. Non-Compete Agreement
This Agreement shall be subject to and hereby incorporates herein the terms
of the Non-Compete Agreement between Executive and Company executed at the
time of initiation of Executive's employment with Company.
11. Indemnity
To the extent permitted by applicable law and the charter and by-laws of the
Company, Company shall:
11.1 Indemnify Executive and hold Executive harmless for any acts or decisions
made by him in good faith while performing services for the Company.
Company will use reasonable best efforts to maintain and, after
termination, continue coverage for Executive under Director's and Officer's
liability coverage to the same extent as other current or former officers
and directors of the Company; and
11.2 Advance or pay all expenses, including attorney's fees actually and
necessarily incurred by the Executive in connection with the defense of any
action, suit or proceeding arising out of Executive's service for the
Company and in connection with any appeal thereon, including the cost of
court settlements.
12. No Mitigation
In the event of Executive's resignation or termination of Executive's employment
hereunder, Executive shall have no obligation to seek other employment or
otherwise mitigate damages and there shall be no offset for any remuneration
attributable to any subsequent employment that the Executive may obtain.
13. Notices
All notices which are required or may be given pursuant to the terms of this
Agreement shall be in writing and shall be sufficiently delivered if provided in
writing, delivered personally, by certified or registered mail, return receipt
requested, by a nationally recognized overnight courier or via facsimile
confirmed in writing to the recipient. Delivery shall be to Company at Company's
principal place of business and to Executive at Executive's most recently filed
home address.
Any termination of Executive's employment with the Company hereof shall be
communicated by written "Notice of Termination" to the other party hereto. Any
"Notice of Termination" given by Executive or given by the Company in connection
with a
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termination as to which the Company believes it is not obligated to
provide Executive with benefits set forth herein shall indicate the specific
provisions of this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for such
termination.
14. Enforcement
Any dispute arising under this Agreement shall, at the election of either party,
be resolved by final and binding arbitration to be held in the Orlando, Florida
metropolitan area in accordance with the rules and procedures of the American
Arbitration Association. Judgment upon the award entered by the arbitrator may
be entered in any court having jurisdiction thereof.
15. Governing Law
This Agreement is governed by the laws of the state of Indiana.
16. Waiver
Failure to insist upon strict compliance with any of the terms, conditions or
provisions of this Agreement shall not be deemed a waiver hereof, nor shall any
waiver or relinquishment of any right or power hereunder at any one or more
times be deemed a waiver or relinquishment of any right or power at any other
time.
17. No Amendment
This Agreement may not be modified or amended without prior written consent of
both Executive and Company.
18. Counterparts
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which together shall constitute the same
instrument.
IN WITNESS WHEREOF, Company and Executive have executed on the date first stated
above.
/s/ Xxxxxx Xxxxxx /s/ Xxxxxxx X. Xxxx
------------------------------------ --------------------------------------
Priority Healthcare Corporation Executive
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EXHIBIT A
Executive Duties
Senior Vice President and Chief Financial Officer
Executive shall perform the duties and responsibilities and shall have the
responsibilities and powers as shall be determined from time to time. All
such duties, responsibilities and/or powers as may reasonably assigned in
furtherance of Executive's responsibilities and the business requirements
of Company shall be subject to the order, direction and supervision of any
superior officers of the Company. Executive's duties include but are not
limited to:
POSITION SUMMARY:
. Manage all accounting functions to include: Inventory control/AR/AP/
General Ledger & DDD Control Liaison, Billing, Benefits, Doctor
Contracts, Special Projects/EDP.
. Oversee the interaction of the Accounting Department/Benefits Dept.
and how they interface with total operation. All General Ledger
entries and balancing of accounts to General Ledger.
. Review and approve all A/R adjustments. Monitor and log billing and
posting errors for review with President. Review Financial Statement
with President.
. Prepare Financials for Corporate office and interface with Corporate
Accounting and other Corporate officers.
. Evaluate computer needs of each department and build appropriate
network.
. Monitor return goods procedures to make sure proper accounting of such
is being captured on General Ledger. Monitor follow-up action needed.
Monitor Destruction Log to coincide with any write-off of inventory.
. Develop inventory control program to include monthly inventory counts
and reports. Develop purchasing system with pharmacy to make sure
P.O.'s are completed accurately. Responsible for tracking acquisition
costs.
. Monitor DEA program with pharmacy to make sure we are in total
compliance
. Back-up, supervise and organize Accounting Specialist.
. Review monthly A/R aging and interface with Collection Specialist as
needed.
. Maintain standards and strive for departmental QA/QI goals
. Development and implementation of a comprehensive business forecasting
model
. Acquisitions analysis and transactions
. Proactive ideas to improve business performance
. Calls with analysts and other investor matters as designated
. Development and implementation of a financial reporting system
compliant with all applicable SEC, NASDAQ, state and federal laws and
regulations
. Other responsibilities as assigned by President/CEO.
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EXHIBIT B
Salary & Benefits
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EXHIBIT C
Bonus Performance Targets
2002
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EXHIBIT D
Change in Control of Company
Change of Control of the Company shall be defined as:
(A) 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 13d-3 promulgated under the Exchange Act as in
effect from time to time) of twenty-five percent (25%) or more of either
(i) the then outstanding shares of common stock of the Company or (ii) the
combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors; provided,
however, that the following acquisitions shall not constitute an
acquisition of control: (i) any acquisition directly from the Company
(excluding an acquisition by virtue of the exercise of a conversion
privilege), (ii) any acquisition by the Company, (iii) any acquisition by
any Executive benefit plan (or related trust) sponsored or maintained by
the Company or any Company controlled by the Company, (iv) any acquisition
by any Company pursuant to a reorganization, merger or consolidation, if,
following such reorganization, merger or consolidation, the conditions
described in clauses (i), (ii) and (iii) of subsection (C) of this Section
2 are satisfied, (v) any acquisition by Xxxxxxx X. Xxxxxxx or (vi) upon the
death of Xxxxxxx X. Xxxxxxx, any acquisition triggered by his death by
operation of law, by any testamentary bequest or by the terms of any trust
or other contractual arrangement established by him;
(B) Individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors of the Company
(the "Board"); provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(C) Approval by the shareholders of the Company of a reorganization,
merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, (i) more than sixty percent
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(60%) of, respectively, the then outstanding shares of common stock of the
Company resulting from such reorganization, merger or consolidation and the
combined voting power of the then outstanding voting securities of such
Company entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by 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 reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
outstanding Company stock and outstanding Company voting securities, as the
case may be, (ii) no Person (excluding the Company, any Executive benefit
plan or related trust of the Company or such Company resulting from such
reorganization, merger or consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or consolidation, directly
or indirectly, twenty-five percent (25%) or more of the outstanding Company
common stock or outstanding voting securities, as the case may be)
beneficially owns, directly or indirectly, twenty-five percent (25%) or
more of, respectively, the then outstanding shares of common stock of the
Company resulting from such reorganization, merger or consolidation or the
combined voting power of the then outstanding voting securities of such
Company entitled to vote generally in the election of directors and (iii)
at least a majority of the members of the board of directors of the Company
resulting from such reorganization, merger or consolidation were members of
the Incumbent Board at the time of the execution of the initial agreement
providing for such reorganization, merger or consolidation; or
(D) Approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the Company, other
than to a Company with respect to which following such sale or other
disposition (a) more than sixty percent (60%) of, respectively, the then
outstanding shares of common stock of such Company and the combined voting
power of the then outstanding voting securities of such Company entitled to
vote generally in the election of directors is then beneficially owned,
directly or indirectly, by 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 sale or other disposition in substantially the same
proportion as their ownership, immediately prior to such sale or other
disposition, of the outstanding Company common stock and outstanding
Company voting securities, as the case may be, (b) no Person (excluding the
Company and any Executive benefit plan or related trust of the Company or
such Company and any Person beneficially owning, immediately prior to such
sale or other disposition, directly or
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indirectly, twenty-five percent (25%) or more of the outstanding Company
common stock or outstanding Company voting securities, as the case may be)
beneficially owns, directly or indirectly, twenty-five percent (25%) or
more of, respectively, the then outstanding shares of common stock of such
Company and the combined voting power of the then outstanding voting
securities of such Company entitled to vote generally in the election of
directors and (c) at least a majority of the members of the board of
directors of such Company were members of the Incumbent Board at the time
of the execution of the initial agreement or action of the Board providing
for such sale or other disposition of assets of the Company.
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