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EXHIBIT 10.18
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT between Community Care Services, Inc., a New York
corporation (the "Corporation") and Xxxx Xxxxxx ("Executive") dated as of May
10, 1997.
W I T N E S S E T H:
WHEREAS, the Corporation wishes to employ Executive and Executive
wishes to be employed by the Corporation.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. Employment. The Corporation agrees to and does hereby employ
Executive, and Executive agrees to and does hereby accept employment by the
Corporation, as Senior Vice President, Operation Systems of the Corporation, or
in any other capacity as determined by its Board of Directors, subject to the
supervision and direction of its President and Chief Executive Officer, for the
two-year period commencing on the date hereof and ending on midnight three years
later (the "Term"), subject to prior termination in accordance with the
provisions of Article 7 hereof. The Term may be extended for successive one year
periods, as mutually agreed in writing by the Corporation and Executive. The
Term and any extensions thereof shall be referred to in this Agreement as the
"Employment Period."
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2. Scope of Duties. As Senior Vice President, Operation Systems
Executive will carry out all tasks assigned to him by the President and Chief
Executive Officer. Executive agrees that he will devote his full time and effort
during the Employment Period to the performance of the duties of his office.
Executive shall make his business headquarters at Mount Vernon, New York and
shall relocate should the Corporation change its headquarters; provided,
however, that in no event will Executive be required to relocate outside a
thirty (30) mile radius from Mt. Xxxxxx, New York. Executive shall undertake
such travel as the Corporation may request.
3. Compensation.
(a) Executive Compensation. For the services and duties to be
rendered and performed by Executive during the Employment Period, the
Corporation agrees to pay Executive compensation at the rate of One Hundred
Twenty Thousand ($120,000) Dollars per annum (this amount to be referred to as
"Executive Compensation"). Executive Compensation shall be payable in accordance
with the Corporation's customary payroll practices and will be reviewed
annually. The Corporation shall reimburse Executive for all expenses reasonably
and necessarily incurred in connection with his employment by the Corporation,
including travel expenses while absent on the Corporation's business from its
business headquarters, subject to the limitations and guidelines imposed by the
Corporation.
(b) Stock Options. Upon the execution of this Agreement,
Executive will be granted options to purchase Twenty Thousand (20,000) shares of
the Corporation's common stock under the Corporation's Incentive Stock Option
Plan. Thereafter, Executive will be
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entitled to receive grants of options to purchase the stock of the Corporation
on the same basis as other executive employees of the Corporation which
Executive understands is based on performance and at the discretion of the
Corporation's Board of Directors.
(c) Car Allowance. Executive shall be entitled to a car
allowance of Seven Hundred Dollars ($700) per month.
(d) Non-Competition. In exchange for executing and delivering
to the Corporation a Non-Competition Agreement, Executive shall receive a
payment of Thirty Thousand Dollars ($30,000), payable as follows: (i) Ten
Thousand Dollars ($10,000), payable over the one year period commencing May 10,
1998 and (ii) Twenty Thousand Dollars ($20,000) payable over the one year period
commencing May 10, 1999, with payments to be made in installments in accordance
with the Corporation's normal pay periods.
4. Vacation. Executive shall be entitled to a vacation each year equal
to three (3) weeks. Said vacation may be taken all at once or weekly at the sole
discretion of Executive.
5. Nondisclosure. Executive acknowledges that as an officer and
stockholder of Metropolitan or any Affiliate (as defined below) thereof he has
been, and as an executive of the Corporation throughout the Employment Period he
will be, privy to trade secrets and other proprietary and/or confidential
information (whether in written, verbal or any other form) relating to the
existing or contemplated business and/or field of interest of the Corporation
and its Affiliates, or of any corporation or other legal entity in which the
Corporation or any of its Affiliates has an ownership interest of more than five
percent (5%), and any proprietary
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information (whether in written, verbal or any other form) of any of the
Corporation's customers, suppliers, licensor or licensees, including, but not
limited to, information relating to inventions, disclosures, processes, systems,
methods, formulae, patents, patent applications, machinery, materials, notes,
drawings, research activities and plans, costs of production, contract forms,
prices, volume of sales, promotional methods, list of names or classes or
customers, which he has heretofore acquired or which he may hereafter acquire
during his employment with the Corporation or any of its Affiliates, in both
cases whether during or outside business hours, whether or not on Metropolitan's
or the Corporation's premises, as the result of any disclosures to him, or in
any other way, shall be regarded as held by him in a fiduciary capacity solely
for the benefit of the Corporation, its successors or assigns, and shall not at
any time, either during the Employment Period or thereafter, be disclosed,
divulged, furnished, or made accessible by him to anyone, or be otherwise used
by him, except in the regular course of business of the Corporation or its
Affiliates. Upon termination of his employment, Executive shall promptly return
or deliver to the Corporation all tangible forms of such information in his
possession or control, and shall retain no copies thereof. Information shall,
for purposes of this Agreement, be considered to be confidential if not known by
the trade generally, even though such information may have been disclosed on a
confidential basis to one or more third parties pursuant to any business
discussion or agreement, including distribution agreements, joint research
agreements or other agreements entered into by Metropolitan or the Corporation
or any of their Affiliates. For the purposes of this Agreement, "Affiliates"
shall mean any corporation, partnership, joint venture, other entity of any type
or individual that directly or indirectly, through one or more
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intermediaries, controls or is controlled, or is under common control with,
Metropolitan or the Corporation, as the case may be.
6. Patents. Executive agrees to and does hereby sell, assign, transfer
and set over to the Corporation, its successors, assigns, or Affiliates, as the
case may be, all his right, title, and interest in and to any inventions,
improvements, processes, patents or applications for patents which he develops
or conceives individually or in conjunction with others during his employment by
the Corporation, or, having possibly conceived same prior to his employment, may
complete while in the employ of the Corporation or any of its Affiliates, in
both cases whether during or outside business hours, whether or not on the
Corporation's premises, which inventions, improvements, processes, patents or
applications for patents are (i) in connection with any matters within the scope
of the existing or contemplated business of the Corporation or any of its
Affiliates or (ii) aided by the use of time, materials, facilities or
information paid for or provided by the Corporation, all of the foregoing to be
held and enjoyed by the Corporation, its successors, assigns or Affiliates, as
the case may be, to the full extent of the term for which any Letters Patent may
be granted and as fully as the same would have been held by Executive, had this
Agreement not been made. Executive will make, execute and deliver any and all
instruments and documents necessary to obtain patents for such inventions,
improvements and processes in any and all countries. Executive hereby
irrevocably appoints the Corporation to be his attorney in fact in the name of
and on behalf of Executive to execute all such instruments and do all such
things and generally to use Executive's name for the purposes of assuring to the
Corporation (or
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its nominee) the full benefit of its rights under the provisions of this Article
6, such power to be exercised only if Executive improperly refuses to fulfill
his obligations under this Article 6.
7. Earlier Termination.
(a) Death. In the event of the death of Executive during the
Employment Period, this Agreement shall automatically terminate on the date of
his death. . Upon termination of this Agreement pursuant to this Article 7(a),
the Corporation shall have no further obligations or liabilities under this
Agreement other than to pay to Executive's estate (i) the portion, if any, of
his compensation that remains accrued but unpaid, (ii) the amount of any
expenses reimbursable in accordance with Article 3(a) above and (iii) any
amounts due under any of the Corporation's benefit, welfare or pension plans.
(b) Disability. In the event of Executive's Total Disability
(as defined below) for one hundred eighty (180) days in the aggregate during any
consecutive twelve (12) month period during the Employment Period, the
Corporation shall have the right to terminate this Agreement by giving Executive
thirty (30) days' prior written notice thereof and, upon the expiration of such
thirty (30) day period, Executive's employment under this Agreement shall
terminate. If Executive shall resume his duties within thirty (30) days after
receipt of such a notice of termination and continue to perform his duties for
four (4) consecutive weeks thereafter, then this Agreement shall continue in
full force and effect, without any reduction in salary and other benefits, and
the notice of termination shall be considered null and void and of no effect.
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Upon termination of this Agreement pursuant to this Article 7(b), the
Corporation shall have no further obligations or liabilities under this
Agreement other than to pay to Executive (i) the portion, if any, of his
compensation that remains accrued but unpaid, (ii) the amount of any expenses
reimbursable in accordance with Article 3(a) above, and (iii) any amounts due
under any of the Corporation's benefit, welfare or pension plans.
The term "Total Disability," as used herein, shall mean a
mental or physical condition which, in the reasonable opinion of an independent
medical doctor selected by the Corporation, renders Executive unable or
incompetent to carry out his material duties and responsibilities under this
Agreement. Notwithstanding the foregoing, if Executive is covered under any
policy of disability insurance hereunder, under no circumstances shall the
definition of "Total Disability" differ from the definition of that term in such
policy. If the parties are unable to agree upon an independent medical doctor to
render an opinion, each shall designate one medical doctor, and the two so
designated shall jointly select a third independent medical doctor, whose
decision shall be binding.
(c) Termination for Cause. The Corporation may discharge
Executive for "Cause" upon notice and thereby immediately terminate his
employment under this Agreement. For purposes of this Agreement, the Corporation
shall have "Cause" to terminate Executive's employment if Executive, in the
reasonable judgment of the Corporation, (i) materially breaches any of his
agreements, obligations or duties under this Agreement and does not cure such
breach or commence in good faith to correct such breach within thirty (30) days
after notice, (ii) fails to carry out any lawful directive of the Board of
Directors of the Corporation which Executive is
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required to do pursuant to this Agreement and does not cure such breach or
commence in good faith to correct such breach within ten (10) days after notice,
(iii) embezzles or converts to his own use any funds of the Corporation or any
client or customer of the Corporation, (iv) willfully converts to his own use or
unreasonably and intentionally destroys any property of the Corporation without
the Corporation's consent, (v) is convicted of a felony (other than a vehicular
infraction which does not involve injuries to persons or property), (vi) is
adjudicated an incompetent, (vii) is habitually intoxicated or diagnosed by an
independent doctor to be addicted to a controlled substance (any disagreement
shall be resolved by the reasonable opinion of an independent medical doctor
selected by the parties; provided that if the parties are unable to agree, each
shall designate one medical doctor, and the two so designated shall jointly
select a third independent medical doctor, whose decision shall be binding) or
(viii) habitually behaves in a manner which, with intent to do so, materially
impairs the Corporation's relationships with others in its industry.
8. Employee Benefits.
(a) Executive may participate in all of the Corporation's
employee benefit plans to the extent, if any, that he may be eligible to do so
under the provisions of such plan or program. Those benefit plans may include
medical and insurance, life and accidental death/dismemberment insurance, short-
and long-term disability, tuition reimbursement, 401(k) plan, stock purchase
plan, vacation and pension plans. The Corporation may terminate, modify, or
amend any such plan or program, in the manner and to the extent permitted
therein, and the rights of Executive under any such plan or program shall be
subject to any such right of
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termination, modification, or amendment. To the extent any payments under any
such plan or program are made to Executive because he is disabled, such amounts
shall be credited against amounts due to Executive under Article 7. To clarify
the foregoing, the Corporation will pay for Executive to participate in the
Company's health plan, as the same exists from time to time.
(b) For the sake of clarification, and notwithstanding any
other provision of this Agreement, it is understood and agreed that all benefits
provided to Executive under this Agreement shall be provided to the extent that
they exceed any employee benefit provided to Executive other than specifically
through this Agreement, such as the programs, plans, etc. referred to in Article
8(a) above. The benefits provided under this Agreement shall be supplemental to
benefits provided otherwise to Executive by the Corporation, and shall not be
provided to the extent that they are duplicative.
9. Assignment. This Agreement may be assigned by the Corporation as
part of the sale of substantially all of its business; provided, however, that
the purchaser shall expressly assume all obligations of the Corporation under
this Agreement. Further, this Agreement may be assigned by the Corporation to an
Affiliate, provided that any such Affiliate shall expressly assume all
obligations of the Corporation under this Agreement, and provided further that
the Corporation shall then fully guarantee the performance of the Agreement by
such Affiliate. Executive agrees that if this Agreement is so assigned, all the
terms and conditions of this Agreement shall remain between such assignee and
himself with the same force and effect as if said Agreement had been made with
such assignee in the first instance.
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10. Survival. The provisions of Articles 5, 6, 7 and 12 shall survive
the termination of this Agreement.
11. Notices. All notices required or permitted to be given hereunder
shall be mailed by registered mail or delivered by hand to the party to whom
such notice is required or permitted to be given hereunder. If mailed, any such
notice shall be deemed to have been given when mailed as evidenced by the
postmark at point of mailing. If delivered by hand, any such notice shall be
deemed to have been given when received by the party to whom notice is given, as
evidenced by written and dated receipt of the receiving party.
Any notice to the Corporation or to any assignee of the Corporation
shall be addressed as follows:
Community Care Services, Inc.
00 Xxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxxx, President and Chief Executive Officer
with a copy to:
Nordlicht & Hand
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Hand
Any notice to Executive shall be addressed to the Executive's address
appearing on the records of the Corporation at the time such notice is given.
Executive at any time may by written notice designated an attorney who is to
receive copies of all notices.
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Either party may change the address to which notice to it is to be
addressed, by notice as provided herein.
12. Applicable Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of New York governing contracts made in
and to be performed solely in such State.
13. Effective Date. This Agreement shall become effective as of the
Closing.
14. Waiver of Breach. The waiver by either party of a breach of this
Agreement shall not be effective unless in writing signed by the party to be
charged therewith and will not operate or be construed as a waiver of any other
subsequent breach.
15. Equitable Relief. With respect to the covenants contained in
Articles 5 and 6 of this Agreement, Executive agrees that any remedy at law for
any breach of said covenants may be inadequate and that the Corporation shall be
entitled to specific performance or any other mode of injunctive and/or other
equitable relief a court might award, including, but not limited to, an
injunction restraining such breach or threatened breach, in addition to any
other remedies which might be available to it.
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16. Acknowledgement. Executives acknowledge that he has been advised to
and has had the opportunity to provide a copy of this Agreement to an attorney
of his own choosing and to discuss this Agreement with his attorney prior to
executing it.
IN WITNESS WHEREOF, the parties hereto have executed the above
Agreement as of the day and year first above written.
COMMUNITY CARE SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx, President and
Chief Executive Officer
EXECUTIVE:
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
