Exhibit 10.37.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of the 18th day of October,
2001, between Greenbriar Corporation, a Nevada corporation (hereinafter
referred to as "Employer"), and XXXXX X. XXXXXX (hereinafter referred to as
"Employee").
In consideration of the mutual promises hereinafter set forth, the parties
hereto agree as follows:
1. Employment. Employer agrees to employ Employee and Employee agrees to
serve Employer, upon the terms and conditions hereinafter set forth.
2. Term. The employment of Employee hereunder and this Employment Agreement
shall commence the date hereof and shall be terminated on December 31, 2004,
unless terminated sooner pursuant to Section 7 hereof.
3. Duties. During the term of this Agreement, Employee shall be engaged as
an executive employee of Employer and shall report to the Board of Directors and
Executive Committee of Employer. Employee's title shall be Chairman of the Board
of Directors of Employer, with such powers and duties in those capacities as are
set forth in the Bylaws of Employer. If Employee is elected or appointed with
the Employee's consent to an office with any of Employer's subsidiaries or
affiliates during the term of this Agreement, the Employee will serve in such
capacity or capacities without additional compensation. Employee shall continue
to serve as a member of the Board of Directors and as a member of the Executive
Committee of Employer. Employee shall perform his duties from the Employer's
main office in Addison, Texas.
4. Extent of Services. During the term of this Agreement, Employee shall
devote substantially his entire working time, attention, and energies to the
business of Employer, consistent with the time and effort he has devoted to the
business of Employer in the past, and shall not during the term of service be
actively engaged in any other business activities. However, this shall not be
construed as preventing Employee from investing the Employee's personal assets
in such form or manner as may require occasional or incidental services on the
part of Employee in the management, conservation and protection of such
investments and provided that such investments cannot be construed as being
competitive or in conflict with the business of Employer.
5. Compensation.
5.1. Base Salary. Employer will pay Employee during the Employee's term of
service hereunder, as compensation for the Employee's services, the sum of
$12,000 per year (sometimes hereinafter referred to as the "Base Salary"),
payable in biweekly or other installments in accordance with the general
practices of the Employer. Employee shall receive fully vested nonqualified
stock options for 200,000 shares of common stock on December 31 of each year of
the term hereof in lieu of any cash bonus, with such options to be issued with
exercise prices equal to the average closing price of the common stock for the
ten trading days preceding December 31 and for terms of ten years each.
5.2 Incentive Compensation. Employee shall participate in one or more
partnerships formed by the Employer or others in which the Employer or its
affiliate is a participant and Employee and others as limited partners for the
purpose of acquiring, owning, operating, leasing and selling one or more health
care or other forms of investment properties. Such participation shall entitle
Employee to a limited partnership interest equal to between 8% and 25.9%
depending upon the origination of the project without requiring him to make any
capital contributions. The Company agrees that, during the term of this
Agreement, all property acquisitions shall be made using such a partnership
structure with Employee participating therein.
5.3. Benefits.
5.3.1. The Employee shall be entitled to the same benefits generally
provided to other executives of Employer of comparable rank and responsibility
as well as to those generally provided to all officers of Employer in accordance
with the policies of the Employer from time to time. These are to include, but
not be limited to, health insurance and vacation pursuant to the Employer's
standard policy.
5.3.2. The Employer shall compensate or provide the designated
beneficiaries of Employee with the benefits accrued or vested under any
compensation and/or other benefit plan of the Employer in which Employee was a
participant as of the date of his death.
5.4 Severance. This Agreement represents a modification and restatement of
the Employment Agreement with the Employee dated January 1, 1997, which is
hereby cancelled. As a result of such cancellation, Employee is entitled to
severance computed in the amount of $1,380,000. Such amount shall be reflected
in the promissory note attached hereto as Exhibit A and incorporated herein by
reference.
6. Expenses. During the term of employment provided for herein, Employer
shall pay or reimburse Employee, in accordance with its standard policy, upon
submission of vouchers by the Employee for all expenses incurred by the Employee
in the interest of Employer's business.
7. Termination.
7.1. Termination Events. Subject to the provisions of Paragraph 7.2 of this
Section, this Agreement shall terminate:
7.1.1. Upon death of Employee.
7.1.2. At the option of the Employer if Employee shall become disabled and
remain disabled for a period of six (6) months. Disability shall be defined as
Employee's inability through illness or other cause to perform his normal work
load as measured by the twelve (12) months preceding the commencement of such
disability. During such disability, Employee shall be compensated in accordance
with Employer's standard policy regarding disability.
7.1.3. Upon mutual agreement.
7.1.4. At any time at the option of Employee.
7.1.5. At the Employer's option for any good cause. For purposes of this
Section, "good cause" for termination shall mean: (a) the conviction of Employee
of any act involving moral turpitude, or (b) any material breach by Employee of
any of the terms of, or the failure to perform any covenant contained in, this
Agreement.
7.1.6. By the Employee for "Good Reason." For purposes of this Agreement,
"Good Reason" shall mean the occurrence after a Change in Control of any of the
events or conditions described in Subsections (1) through (9) hereof:
(1) a change in the Employee's status, title, position or
responsibilities (including reporting responsibilities) which, in
the Employee's reasonable judgment, represents an adverse change
from his status, title, position or responsibilities as in effect
immediately prior thereto; the assignment to the Employee of any
duties or responsibilities which, in the Employee's reasonable
judgment, are inconsistent with his status, title, position or
responsibilities; or any removal of the Employee from or failure
to reappoint or reelect him to any of such offices or positions,
except in connection with the termination of his employment
pursuant to Sections 7.1.1, 7.1.2, 7.1.3, 7.1.4 or 7.1.5, other
than Good Reason;
(2) a reduction in the Employee's base salary or any failure to pay
the Employee any compensation or benefits to which he is entitled
within five days of the date due;
(3) a failure to increase the Employee's base salary at least
annually at a percentage of base salary no less than the average
percentage increases (other than increases resulting from the
Employee's promotion) granted to the Employee during the three
full years ended prior to a Change in Control (or such lesser
number of full years during which the Executive was employed);
(4) the Employer's requiring the Employee to be based at any place
outside 50 miles from Dallas, Texas, except for reasonably
required travel on the Employer's business which is not greater
than such travel requirements prior to the Change in Control;
(5) the failure by the Employer to (a) continue in effect (without
reduction in benefit level, and/or reward opportunities) any
material compensation or employee benefit plan in which the
Employee was participating immediately prior to the Change in
Control, unless a substitute or replacement plan has been
implemented which provides substantially identical compensation
and benefits to the Employee or (b) provide the Employee with
compensation and benefits, in the aggregate, at least equal (in
terms of benefit levels and/or reward opportunities) to those
provided for under each other compensation or employee benefit
plan, program and practice as in effect at any time within ninety
(90) days preceding the Change in Control Date or at any time
thereafter;
(6) the insolvency or the filing (by any party, including the
Employer) of a petition for the bankruptcy of the Employer;
(7) any material breach by the Employer of any provisions of this
Agreement;
(8) any purported termination of the Employee's employment for Cause
by the Company which does not comply with the terms of Section
7.1.5.; or
(9) the failure of the Employer to obtain an agreement, satisfactory
to the Employee, from any successor or assign of the Employer to
assume and agree to perform this Agreement, as contemplated in
Section 9.2.
Any event or condition described in Section 7.1.6 (1)-(9) which occurs
prior to a Change in Control but which the Employee reasonably demonstrates (a)
was at the request of a third party who had indicated an intention or taken
steps reasonably calculated to effect a Change in Control (a "Third Party"), or
(b) otherwise arose in connection with, or in anticipation of a Change in
Control, shall constitute Good Reason for purposes of this Agreement
notwithstanding that it occurred prior to the Change in Control. The Executive's
right to terminate his employment pursuant to Section 7.1.6 shall not be
affected by his incapacity due to physical or mental illness.
7.1.7. For any reason other than those set forth in Sections 7.1.1.,
7.1.2., 7.1.3., 7.1.4, 7.1.5 or 7.1.6.
7.2. Consequences of Termination.
7.2.1. Upon termination by mutual agreement under Section 7.1.3, by the
Employee under Section 7.1.4., or for good cause under Section 7.1.5, the
Employee shall be paid all salary and incentive compensation prorated to the
date of termination.
7.2.2. Upon termination under Section 7.1.1., 7.1.2., 7.1.6. or 7.1.7,
Employee (or his estate) shall be entitled to receive (1) payment in full of the
Promissory Note attached as Exhibit A; and (2) for eighteen (18) months, the
Employer's current cost sharing shall continue on behalf of the Employee and his
dependents and beneficiaries in regard to the life insurance, disability,
medical, dental and hospitalization benefits provided to the Employee at any
time during the 90-day period prior to the termination date.
The amounts provided for in Section 7.2 shall be paid within five days
after the Employee's Termination Date. The Employee shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise and no such payment shall be offset or reduced by
the amount of any compensation or benefits provided to the Employee in any
subsequent employment. The severance pay and benefits provided for in Sections
7.2.4 shall be in lieu of any other severance pay to which the Executive may be
entitled under any Company severance plan, program or arrangement.
8. Trade Secrets and Confidential Information. During the term of this
Agreement, Employee will have access to customer lists and compilations of
information and records specific to and regularly used in the operation of the
business of Employer. Employee acknowledges that such information constitutes
valuable and confidential information of the Employer. Employee shall not
disclose any of the aforesaid private company secrets, directly or indirectly,
nor use them in any way, either during the term of this Agreement or after
termination of employment. All files, records, electronic and magnetic files,
documents, specifications, equipment and similar information relating to the
business of Employer, whether prepared by Employee or otherwise coming into
Employee's possession, shall remain the exclusive property of Employer and shall
not be removed from the premises of Employer except as shall be necessary for
Employee to perform Employee's duties under this Agreement. Upon termination of
this Agreement for any reason, Employee will deliver all such materials in his
possession and all copies thereof to Employer.
9. General Provisions.
9.1 Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by certified mail by
Employer to the residence of Employee, or by Employee to Employer's principal
office.
9.2. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the Employer, its successors and assigns, and the
Employer shall require any successor or assign to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Employer would be required to perform if no such succession or assignment had
taken place. The term "Employer" as used herein shall include successors and
assigns. The term "successors and assigns" as used herein shall mean a
corporation or other entity acquiring all or substantially all the assets and
business of the Employer (including this Agreement) whether by operation of law
or otherwise. Neither this Agreement nor any right or interest hereunder shall
be assignable or transferable by the Employee, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Employee's
legal personal representative.
9.3. Waiver of Breach. The waiver by Employer or Employee of a breach of
any provisions of this Agreement by the other shall not operate or be construed
as a waiver of any subsequent breach.
9.4. Entire Agreement. This instrument contains the entire agreement of the
parties. It may not be changed orally, but only by an agreement in writing,
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
9.5. Attorneys' Fees. In the event that there shall be any litigation or
court proceeding with respect to this Agreement or the obligations of the
parties hereunder, the prevailing party shall be entitled to recover reasonable
attorneys' fees and costs from the other party.
9.6. Governing Law. This Employment Agreement shall be governed by the laws
of the State of Texas.
10. Definitions.
10.1. Change in Control. For purposes of this Agreement, a "Change in
Control" shall mean any one or more of the following events:
(a) An acquisition (other than directly from the Employer) of any voting
securities of the Employer (the "Voting Securities") by any "Person"
(the term person is used for the purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
immediately after which such Person has "Beneficial Ownership" (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of
twenty-five percent (25%) or more of the combined voting power of the
Employer's then outstanding Voting Securities; provided, however, in
determining whether a Change in Control has occurred, Voting
Securities which are acquired in a "Non-Control Acquisition" (as
hereinafter defined) shall not constitute an acquisition which would
cause a Change in Control. A "Non-Control Acquisition" shall mean an
acquisition by (i) an employee benefit plan (or trust forming a part
thereof) maintained by (A) the Employer or (B) any corporation or
other Person of which a majority of its voting power or its voting
equity securities or equity interest is owned, directly or indirectly,
by the Employer (for purposes of this definition, a "Subsidiary" (ii)
the Employer or its Subsidiaries, or (iii) any Person in connection
with a "Non-Control Transaction" (as hereinafter defined);
(b) The Individuals who, as of September 30, 2001, are members of the
Board (the "Incumbent Board"), cease to constitute at least two-third
of the members of the Board. Provided, however, that if after the
election, or nomination for election by the Employer's common
stockholders, if any new director was approved by a vote of at least
two-thirds of the Incumbent Board, such new director shall, for
purposes of this Plan, be considered as a member of the Incumbent
Board; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or threatened
"Election Contest" (as described in Rule 14a-11 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 (a "Proxy
Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
(c) Approval by stockholders of the Employer of:
(1) a merger, consolidation or reorganization involving the Employer,
unless such a merger, consolidation or reorganization is a
"Non-Control Transaction." A "Non-Control Transaction" shall mean
a merger, consolidation or reorganization of the Employer where:
(i) the stockholders of the Employer, immediately before such
merger, consolidation or reorganization, own directly or
indirectly immediately following such merger, consolidation
or reorganization, seventy percent (70%) of the combined
voting power of the outstanding Voting Securities of the
corporation resulting from such merger or consolidation or
reorganization (the "Surviving Corporation") in
substantially the same proportion as their ownership of the
Voting Securities immediately before such merger,
consolidation or reorganization,
(ii) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement
providing for such merger, consolidation or reorganization
constitute at least two-third of the members of the board of
directors of the Surviving Corporation, or a corporation
beneficially directly or indirectly owning a majority of the
Voting Securities of the Surviving Corporation, and
(iii)no Person other than (a) the Employer, (b) any Subsidiary,
(c) any employee benefit plan (or any trust forming a part
thereof) maintained by the Employer, the Surviving Company,
the Surviving Corporation, or any Subsidiary, or (d) any
Person who, immediately prior to such merger, consolidation
or reorganization had Beneficial Ownership of fifty-one
percent (51%) or more of the then outstanding Voting
Securities, has Beneficial Ownership of fifty-percent (51%)
or more of the combined voting power of the Surviving
Corporation's then outstanding Voting Securities.
(2) A plan of complete liquidation or dissolution of the Company, or
(3) An agreement for the sale or other disposition of all or
substantially all of the assets of the Employer to any Person
(other than a transfer to a Subsidiary);
(d) Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the then
outstanding Voting Securities as a result of the acquisition of Voting
Securities by the Employer which, by reducing the number of shares
Beneficially Owned by Subject Persons, provided that if a Change in
Control would occur (but for the operation of this sentence) as a
result of the acquisition of Voting Securities by the Employer, and
after such share acquisition by the Employer, the Subject Person
becomes the Beneficial Owner of any additional Voting Securities which
increases the percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control
shall occur.
IN WITNESS WHEREOF, Employer has caused this Employment Agreement to be
executed in its corporate name by its corporate officers thereunto duly
authorized, and Employee has executed this Employment Agreement.
EMPLOYEE:
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX
EMPLOYER:
GREENBRIAR CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President &
Chief Financial Offficer
