EXHIBIT 10-T
Executive Employment Agreement
This Executive Employment Agreement is entered into this 20/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. Xxxxxxxx,
("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 Executive Vice President and Chief
Administrative 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
31/st/ 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 31/st/ 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 Executive Vice President and Chief
Administrative Officer of the Company, and shall, subject to the direction
of the Board of Directors of Company ("the Board") and her supervisor, use
her best efforts to faithfully and competently perform such duties as are
detailed in Exhibit A,
1
attached hereto and hereby incorporated herein and shall also perform and
discharge such other executive employment duties and responsibilities
consistent with his position as Executive Vice President and Chief
Administrative 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
2
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
3
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;
4
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 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.
6.1.6. Employee 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 Employee
and an opportunity for Employee, together with his counsel, to be
heard before such Board), finding that, in the good faith opinion of
such Board, Employee 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, 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.
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
5
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 shall be subject to the terms provided for in the
applicable Restricted Stock Agreement 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 similar statutes, shall be
paid to Executive upon any termination of his employment with the
Company subsequent to a Change in Control:
6
(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 retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments.
7
(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 applicable
government taxing authority has requested payment, pay to the
Executive an additional Gross-Up Payment equal to the amount of the
8
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 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
9
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
Change in Control or a substantial reduction of his duties or
responsibilities which, in Executive's reasonable opinion, does not
10
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.
11
(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.
12
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 termination as to which the Company believes it is not obligated to
provide Executive
13
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. Xxxxxxxx
------------------------------------ -----------------------------------
Priority Healthcare Corporation Executive
14
Exhibit A
Executive Duties
Executive Vice President and Chief Administrative 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:
. Oversee Human Resources Management and activities for the Company
and all its subsidiaries, divisions, etc., including but not
limited to:
. compensation and benefits management,
. training and organizational development;
. corporate communications, including IntraNet and other
in-house communications;
. support/enhancement of the Vision, Mission and Culture of
the Company.
. Serve as General Counsel to the Company and its subsidiaries,
divisions, etc., including:
. Legal representation of the Company before appropriate legal
tribunals, governmental agencies and authorities;
. Review and advice to Company employees regarding contractual
relationships, managed care, vendor, real estate, labor
agreements, and all other legal documents and agreements
obligating the Company to actions, financial commitments,
legal obligations, etc.
. Selection and management of outside legal and other
resources necessary to manage the legal activities, defend
legal actions, etc.
. Review and advice to Company and its employees regarding all
applicable laws, regulations and/or accreditation and
licensing obligations.
. Coordinate representation of Company by lobbyists and other
consultants and management of governmental relations.
. Mergers, acquisitions and divestitures.
. All other matters pertaining to legal issues, disputes
and/or obligations of the Company.
. Serve as the Corporate Secretary to the Company and the Board of
Directors, including:
. Maintenance of appropriate minutes, agendas, authorizations,
governance actions and such other actions regarding the
registration, licensure and Board and corporate committee
compliance with all applicable laws and regulations;
15
. Investor Relations, including the maintenance of books and
records of the securities of the corporation, stock option
plans, and communications to investors and capital markets
. Coordinate and provide guidance to the Board of Directors
and the Corporation regarding compliance with all applicable
securities and corporate regulations and rules.
. Coordinate the Board and Board Committee Schedules,
information to Board and/or Committee members necessary to
discharge their responsibilities, etc.
. Leadership and Oversight of Payer Relations, including:
. development and implementation of a Company strategy to
develop services and products which meet the requirements of
third party payers including commercial and governmental
payers;
. marketing and sales to Payers, including HMOs, PPOs,
Insurance and Labor Trusts, Employer-Sponsored Health Plans,
Third Party Payers, Consultants, etc.
. financial accounting and reporting to the Company and the
Payers regarding managed care services by Company, including
the development and implementation of pricing analysis and
strategies, development of economic and actuarial
utilization models and analytical tools with which to
measure the financial performance of Payer contracts, etc.
. business development through relationships with physicians,
hospitals, payer medical directors, payer utilization
management staff, disease management carve out services and
companies, etc.
. Support and Coordinate Business Development activities associated
with Pharmaceutical Manufacturers, Retail Pharmacies, and
Employers and/ or other Third Party Payers and such other third
party entities as may be identified by Company from time to time.
. Leadership and management of Implementation Services, including
Reimbursement, Verification, New Project Implementation and Roll
Out Teams, Payer Services, Coding, etc.
. Leadership and management of Company Compliance activities,
including:
. Compliance with all Federal, State and local laws and
regulations;
. Accreditation and ongoing Professional licensure compliance;
. Safety, training and auditing of compliance activities,
including OSHA, Environmental safety, Quality Improvement
and Assurance, etc.
. All other duties as assigned.
16
EXHIBIT B
Salary & Benefits
17
EXHIBIT C
Bonus Performance Targets
2002
18
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
19
(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
20
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.
21
