Exhibit 10.11
EXECUTIVE EMPLOYMENT AGREEMENT
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This EXECUTIVE EMPLOYMENT AGREEMENT (this "AGREEMENT") is made as of March
21, 1995 by and between Xxxx Xxxxxxxx ("EXECUTIVE") and AMSERV HEALTHCARE INC.,
a Delaware corporation (the "COMPANY").
PRELIMINARY RECITALS
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WHEREAS, the Company desires to employ Executive, and Executive desires to
be employed by the Company, as Controller and Treasurer of the Company on the
terms and conditions set forth in this Agreement.
WHEREAS, the Company is engaged in the business of providing home care
services to individuals and temporary nursing services to healthcare
institutions (the "BUSINESS").
NOW, THEREFORE, in consideration of the mutual covenants in this Agreement
and other good and valuable consideration, the receipt and sufficiency of which
are acknowledged, the Company and Executive agree as follows:
1. Employment of Executive. The Company hereby employs Executive as the
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Company's Controller and Treasurer, and Executive hereby accepts such employment
and agrees to act as Controller and Treasurer of the Company, all in accordance
with the terms and conditions of this Agreement.
2. Term of Employment. Executive's employment under this Agreement will
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begin on the date of this Agreement and will continue until the fourth (4th)
anniversary of the date of this Agreement (the "EMPLOYMENT PERIOD"); provided
that any rights of the Executive arising as a result of a termination of
Employment during the Employment Period shall survive the termination of this
Agreement. Notwithstanding anything to the contrary contained herein, the
Employment Period is subject to termination at any time pursuant to SECTION 8.
3. Offices and Duties. Subject to SECTION 8, during the Employment
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Period, Executive will perform the normal duties of Controller of the Company
and duties of the Treasurer as described in the Company's Bylaws and such other
duties as the Company's Chief Executive Officer ("CEO") or Board of Directors
may prescribe from time to time. Executive agrees that during the Employment
Period, she will devote substantially all of her business time and attention to
fulfill her duties under this Agreement.
4. Compensation
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(a) Base Salary. During the Employment Period, the Company will
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pay Executive a base salary (the "BASE SALARY") in accordance with the
Company's normal payroll
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practices for executive officers. The Base Salary during the Employment
Period will be determined in the sole discretion of the Company's Board of
Directors.
(b) Bonuses. Executive will be eligible for, but is not guaranteed to
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receive, additional compensation ("BONUS PAYMENTS") as determined from time
to time in the sole discretion of the Company's Board of Directors.
(c) Benefits. Executive will be entitled to participate in group life
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and medical insurance plans, profit-sharing and similar plans, and other
"fringe benefits" (collectively, "BENEFITS"), comparable to those made
available by the Company to its other senior executive employees, in
accordance with the terms of such plans.
(d) Withholding. All compensation payable to Executive under this
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Agreement is stated in gross amount and will be subject to all applicable
withholding taxes, other normal payroll deductions, and any other amounts
required by law to be withheld.
(e) Expenses. The Company, in accordance with its policies and past
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practices, will pay or reimburse Executive for all expenses (including
travel and entertainment expenses) reasonably incurred by Executive during
the Employment Period in connection with the performance of Executive's
duties under this Agreement, provided that Executive, if so requested by the
Company's CEO or Board of Directors, must provide to the Company
documentation or evidence of expenses for which Executive seeks
reimbursement.
5. Covenant Not to Compete.
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5.1 Executive's Acknowledgment. Executive agrees and acknowledges
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that in order to assure the Company that it will retain its value and that of
the Business as a going concern, it is necessary that Executive undertake not to
utilize her special knowledge of the Business and her relationships with
customers and suppliers to compete with the Company. Executive further
acknowledges that:
(a) the Company is currently engaged in the Business;
(b) Executive has occupied a position of trust and confidence with the
Company prior to the date of this Agreement and will continue to acquire an
intimate knowledge of all proprietary and confidential information
concerning the Business;
(c) the agreements and covenants contained in this SECTION 5 are
essential to protect the Company and the goodwill of the Business;
(d) the Company would be irreparably damaged if Executive were to
provide services to any person or entity in violation of the provisions of
this Agreement;
(e) the scope and duration of the Restrictive Covenants are reasonably
designed to protect a protectible interest of the Company and are not
excessive in light of the circumstances; and
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(f) Executive has a means to support herself and her dependents other
than by engaging in the Business, and the provisions of this SECTION 5 will
not impair such ability.
5.2 Non-Compete. The "RESTRICTED PERIOD" for purposes of this
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Agreement shall be the period of time commencing on the date hereof and ending
on the date one (1) year after termination of Executive's employment for any
reason, provided that, if a Change in Control occurs and, following the
effective date of the Change in Control, the Executive's employment with the
Company is terminated by the Executive for Good Reason or by the Company without
Cause, then the "Restricted Period" shall end on the effective date of the
termination of Executive's employment. Executive hereby agrees that at all times
during the Restricted Period, Executive shall not, directly or indirectly, as
employee, agent, consultant, stockholder, director, co-partner or in any other
individual or representative capacity, own, operate, manage, control, engage in,
invest in or participate in any manner in, act as a consultant or advisor to,
render services for (alone or in association with any person, firm, corporation
or entity), or otherwise assist any person or entity that engages in or owns,
invests in, operates, manages or controls any venture or enterprise that
directly or indirectly engages or proposes to engage in the Business anywhere
within thirty (30) miles of any office of the Company (the "TERRITORY");
provided, however, that nothing contained herein shall be construed to prevent
Executive from investing in the stock of any competing corporation listed on a
national securities exchange or traded in the over-the-counter market, but only
if Executive is not involved in the business of said corporation and if
Executive and her associates (as such term is defined in Regulation 14(A)
promulgated under the Securities Exchange Act of 1934, as in effect on the date
hereof), collectively, do not own more than an aggregate of two percent of the
stock of such corporation.
5.3 Non-Solicitation. Without limiting the generality of the
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provisions of SECTION 5.2 above, Executive hereby agrees that during the
Restricted Period Executive will not, directly or indirectly, solicit, or
participate as employee, agent, consultant, stockholder, director, partner or in
any other individual or representative capacity in any business which solicits,
business from (i) any Person which is or was a customer of the Business during
the Restricted Period, or from any successor in interest to any such Person, for
the purpose of marketing, selling or providing any such Person any services or
products offered by or available from the Company, or encouraging any such
Person to terminate or otherwise alter his, her or its relationship with the
Company, or (ii) any Person who is or was a "PROSPECTIVE CUSTOMER" of the
Business, for the purpose of marketing, selling or providing any such Person any
services offered by or available from the Company or encouraging any such Person
to terminate or otherwise alter his, her or its relationship with the Company.
For purposes of this Agreement, "PROSPECTIVE CUSTOMER" shall mean any Person who
the Company has contacted (orally or in writing) during the one year period
prior to the earlier of (i) the date of determination or (ii) the effective date
of the termination of Executive's employment with the Company, for the purpose
of developing a relationship relating to the Business.
5.4 Interference with Employee Relationships. During the Restricted
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Period, Executive shall not, directly or indirectly, as employee, agent,
consultant, stockholder, director, co-partner or in any other individual or
representative capacity, without the prior written consent of the Company,
employ or engage, recruit or solicit for employment or engagement, any person
who is or becomes employed or engaged by the Company (during the Employment
Period or the Restricted Period), or otherwise seek to influence or alter any
such person's relationship with
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the Company.
5.5 Blue-Pencil. If any court of competent jurisdiction shall at
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any time deem the term of this Agreement or any particular Restrictive Covenant
too lengthy or the Territory too extensive, the other provisions of this SECTION
5 shall nevertheless stand, and the Restricted Period shall be deemed to be the
longest period permissible by law under the circumstances and the Territory
shall be deemed to comprise the largest territory permissible by law under the
circumstances. The court in each case shall reduce the Restricted Period and/or
the Territory to permissible duration or size.
6. Severance Payments. Following a Change in Control of the Company, if,
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during the thirty-six (36) months following such Change in Control, (i)
Executive is terminated by the Company without Cause or (ii) Executive
terminates employment with the Company (or its successor or assigns) for Good
Reason, the Company shall pay and provide Executive each of the following:
(a) Within five (5) business days after the effective date of any
such termination of employment (the "Effective Date"), the Company (or its
successor or assigns) will pay Executive a lump sum cash payment equal to
one (1) times the average annual compensation that was includible in
Executive's gross income during each of the lesser of (i) the five (5) full
fiscal years immediately prior to the Effective Date and (ii) the number of
years Executive was employed by the Company immediately prior to the
Effective Date.
(b) Executive and her dependents shall continue to be covered for
twelve (12) months after the Effective Date by all survivor rights,
insurance and benefit programs of the Company (or its successor or assigns)
in type and amount at least equivalent to that provided to she and her
dependents by the Company immediately prior to the Change of Control;
provided that if participation in any one or more of such arrangements is
not possible under the terms thereof, the Company (or its successor or
assigns) will provide substantially identical benefits outside of the
programs. The cost of this coverage will be paid by the Company (or its
successor or assigns).
(c) If all or any portion of the amounts payable to Executive under
this Agreement, either alone or together with other payments which Executive
has the right to receive from the Company, constitute "excess parachute
payments" (within the meaning of Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code"), that are subject to the excise tax imposed
by Section 4999 of the Code (or similar tax and/or assessment), the Company
(or its successor or assigns) shall increase the amounts payable pursuant to
Section 6(a) above to the extent necessary to place Executive in the same
after-tax position as she would have been in had no such excise tax been
imposed on the payments hereunder. The determination of the amount of any
such excise taxes shall initially be made by the independent accounting firm
employed by the Company immediately prior to the Change in Control. If, at a
later date, it is determined that the amount of excise taxes payable by
Executive is greater than the amount initially so determined, then the
Company (or its successor or assigns) shall pay Executive an amount equal to
the sum of (i) such additional excise taxes, (ii) any interest, fines and
penalties resulting from such underpayment, plus (iii) an amount necessary
to reimburse Executive for any income, excise or other taxes
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payable by Executive with respect to the amount specified in (i) and (ii)
above, and the reimbursement provided by this (iii).
Upon the occurrence of a Change in Control of the Company, if, during the
six (6) months following such Change in Control, Executive terminates employment
with the Company (or its successor or assigns) without Good Reason, then within
five (5) business days after the Effective Date, the Company shall pay to
Executive an amount equal to thirty percent (30%) of the amount described in
Section 6(a) above.
7. Confidential Information. During the term of this Agreement and
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thereafter, Executive shall keep secret and retain in strictest confidence, and
shall not, without the prior written consent of the Company, furnish, make
available or disclose to any third party or use for the benefit of himself or
any third party, any Confidential Information, except to the extent reasonably
necessary to carry out Executive's duties and responsibilities to the Company.
As used in this SECTION 7, "CONFIDENTIAL INFORMATION" shall mean any information
relating to the Business or affairs of the Company, including but not limited to
information relating to financial statements, business plans, forecasts,
purchasing plans, customer identities, potential customers, employees,
suppliers, equipment, programs, strategies and information, analyses, profit
margins or other proprietary information used by the Company in connection with
the Business of the Company; provided, however, that Confidential Information
shall not include any information which is in the public domain or becomes known
in the industry through no wrongful act on the part of Executive. Executive
acknowledges that the Confidential Information is vital, sensitive, confidential
and proprietary to the Company.
8. Termination
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(a) The Company may terminate the Executive's employment hereunder at
any time, without Cause (as defined in SECTION 9), for any reason, upon not
less than sixty (60) days notice to the Executive.
(b) The Company may terminate Executive's employment hereunder at any
time for Cause by providing to Executive written notice of termination
stating the grounds for termination for Cause. Upon notice of termination of
employment for Cause, the Employment Period will immediately end and
Executive will not be entitled to receive any further compensation (whether
in the form of Base Salary, Bonus Payments, Benefits or otherwise) other
than accrued but unpaid Base Salary.
(c) Notwithstanding anything to the contrary in this Agreement, the
Employment Period will terminate upon the death or Disability of Executive.
In the case of termination by the Executive for Good Reason or Disability,
termination shall be effective upon the date of service of notice by either
the Executive or the Company. In the case of death, termination shall become
effective immediately upon the death of Executive. Upon termination by the
Company without Cause, termination by the Executive for Good Reason, death
or Disability, Executive will be entitled to receive (i) all accrued but
unpaid Base Salary as of the date of such termination, (ii) a pro rata
portion of the Bonus Payments (if any) for the year in which such
termination occurs, (iii) any other accrued benefits as of the date of such
termination in accordance with the policies and practices of the Company,
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including without limitation, any accrued vacation pay and (iv) any amounts
payable pursuant to SECTION 6(a) above, but all other obligations of the
Company to pay Executive any further compensation, whether in the form of
Base Salary, Bonus Payments, Benefits (other than death and Disability
benefits, if any) or otherwise, will terminate.
9. Definitions. As used in this Agreement:
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"AFFILIATE" means any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated association or other entity (other
than the Company) that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, the
Company, including without limitation, any member of an affiliated group of
which the Company is a common parent corporation as provided in Section 1504 of
the Code.
"CAUSE" means (a) an act of fraud or dishonesty by Executive that results in
gain or personal enrichment of Executive at the Company's expense, (b)
Executive's conviction of a felony-class crime or any act involving moral
turpitude, (c) any material breach by Executive of any provision of this
Agreement that has not been cured by Executive within thirty days of written
notice of such breach from the Company, (d) the Executive's willful engaging in
gross misconduct materially injurious to the Company that has not been cured by
Executive within thirty days of written notice from the Company specifying the
alleged willful gross misconduct and material injury, or (e) any intentional act
or gross negligence that has a material, detrimental effect on the reputation or
Business of the Company. The decision to terminate Executive's employment for
Cause, to take other action or to take no action in response to such occurrence
shall be in the sole and exclusive discretion of the Company.
"CHANGE IN CONTROL" means the happening of any of the following events:
(a) During the term of this Agreement, (i) any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act) (a "Person") acquires beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of greater than 50% of the then
outstanding shares of common stock of the Company or (ii) the stockholders
of the Company approve a reorganization, merger, consolidation, complete
liquidation or dissolution of the Company, the sale or disposition of all or
substantially all of the assets of the Company or similar corporate
transaction, unless such acquisition (as described in clause (i) above) or
such transaction (as described in clause (ii) above) is approved prior
thereto by the Company's Board of Directors in accordance with the Company's
Bylaws.
(b) A change in the composition of the Board such that the individuals
who, as of the date of this Agreement, constitute the Board (such Board
shall be hereinafter referred to as the "INCUMBENT BOARD") cease for any
reason to constitute at least a majority of the Board; provided, however,
for purposes of this SECTION 9(b), that any individual who becomes a member
of the Board subsequent to the date of this Agreement whose election, or
nomination for election by the Company's stockholders, was approved by a
vote of at least a majority of those individuals who are members of the
Board and who were also members of the Incumbent Board (or deemed to be such
pursuant to this provision) shall be considered as though such individual
were a member of the Incumbent Board; but, provided, further,
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that 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 shall not be so considered as a
member of the Incumbent Board.
"DISABILITY" will be deemed to have occurred whenever the Executive has
suffered physical or mental illness, injury, or infirmity that prevents
Executive from fulfilling her duties under this Agreement for a period of ninety
(90) consecutive days in the manner ordinarily required of him as an officer of
the Company and precludes him from actively participating in the management of
the Business of the Company.
"GOOD REASON" means the occurrence of any of the following events, unless
(i) such event occurs with the Executive's express prior written consent, (ii)
the event is an isolated, insubstantial or inadvertent action or failure to act
which was not in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive, or (iii) the event occurs in
connection with the termination of the Executive's employment for Cause,
Disability or death:
(a) the assignment to the Executive by the Company of any duties which
are inconsistent with, a diminution of or an adverse change in the
Executive's position, duty, title, office, responsibility or status with the
Company, including without limitation, any diminution of the Executive's
position or responsibility in the decision or management processes of the
Company, reporting relationships, job description, duties, responsibilities,
any removal of the Executive from, any failure to reelect the Executive to,
such position or increasing in a substantial way the amount of travel
required by Executive;
(b) a relocation of the Company's principal executive office to any
place other than the metropolitan area in which it was located immediately
prior to the corresponding "Change in Control" or the assignment of the
Executive by the Company to any office other than the Company's principal
executive office;
(c) a reduction by the Company in the Executive's rate of Base Salary
during the Employment Period;
(d) any failure to either continue in effect any material Benefits or
to substitute and continue other plans, policies, programs or arrangements
providing the Executive with substantially similar benefits, or the taking
of any action which would substantially and adversely affect the Executive's
participation in or materially reduce the Executive's Benefits or
compensation;
(e) any failure by any successor or assignee of the Company to continue
this Agreement in full force and effect or any breach of this Agreement by
the Company (or any successor or assignee of the Company), unless such
breach is cured within thirty (30) days of receiving written notice of the
breach from the Executive;
(f) the failure by the Company without Executive's consent to pay to
Executive any
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portion of her current compensation within seven days of the date such
compensation is due; or
(g) the taking of any action by the Company that would materially
adversely affect the physical conditions in or under which Executive
performs her duties.
"PERSON" means any individual, corporation, trust, proprietorship,
association, governmental body, agency or subdivision or other entity.
10. Remedies. Executive acknowledges and agrees that the covenants set
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forth in SECTIONS 5 AND 7 of this Agreement (collectively, the "RESTRICTIVE
COVENANTS") are reasonable and necessary for the protection of the Company's
business interests, that irreparable injury will result to the Company if
Executive breaches any of the terms of the Restrictive Covenants, and that in
the event of Executive's actual or threatened breach of any such Restrictive
Covenants, the Company will have no adequate remedy at law. Executive
accordingly agrees that in the event of any actual or threatened breach by him
of any of the Restrictive Covenants, the Company shall be entitled to immediate
temporary injunctive and other equitable relief, without bond and without the
necessity of showing actual monetary damages, subject to hearing as soon
thereafter as possible. Nothing contained herein shall be construed as
prohibiting the Company from pursuing any other remedies available to it for
such breach or threatened breach, including the recovery of any damages which it
is able to prove.
11. Miscellaneous
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(a) Notices. All notices and other communication between the parties
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pursuant to this Agreement must be in writing and will be deemed given when
delivered in person, one (1) business day after being dispatched by a
nationally recognized overnight courier service, three (3) business days
after being deposited in the U.S. Mail, registered or certified mail, return
receipt requested, or one (1) business day after being sent by facsimile
(with receipt acknowledged), to the Company at the address of its principal
office in the La Jolla, California metropolitan area and to Executive (or
her representatives) at her address as shown on the Company's records.
Executive (or her representatives) may change her address for notice
purposes by delivering notice to the Company in accordance with this SECTION
11(a). All notices sent to the Company shall also be delivered to Xxxxxx
Xxxxxx & Xxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 60661-
3693, Attention: Xxxxxx X. Xxxxxx, Esq., Facsimile No.: (312-902-1061).
(b) Governing Law. This Agreement will be subject to and governed by
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the laws of the State of Delaware, without regard to principles of conflicts
of laws.
(c) Binding Effect. This Agreement will be binding upon and inure
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to the benefit of the parties and their respective heirs, legal
representatives, executors, administrators, successors, and assigns, subject
to the limitations on assignment in SECTION 11(h).
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(d) Entire Agreement. This Agreement constitutes the entire
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Agreement between the parties with respect to the subject matter of this
Agreement and supersedes any other agreements, whether oral or written,
between the parties with respect to the subject matter of this Agreement.
(e) Modification. No change or modification of this Agreement will
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be valid unless it is in writing and signed by both of the parties. No
waiver of any provision of this Agreement will be valid unless in writing
and signed by the person or party to be charged.
(f) Severability. If any provision of this Agreement is, for any
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reason, invalid or unenforceable, the remaining provisions of this Agreement
will nevertheless be valid and enforceable and will remain in full force and
effect. Any provision of this Agreement that is held invalid or
unenforceable by a court of competent jurisdiction will be deemed modified
to the extent necessary to make it valid and enforceable and as so modified
will remain in full force and effect.
(g) Headings. The headings in this Agreement are inserted for
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convenience only and are not to be considered in the interpretation of
construction of the provisions of this Agreement.
(h) Assignability. This Agreement may not be assigned by either
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party without the prior written consent of the other party, except that the
Company may assign its rights to, and cause its obligations under this
Agreement to be assumed by, any person or entity to whom or to which the
Company simultaneously transfers by sale, merger, or otherwise all or
substantially all of its assets.
(i) No Strict Construction. The language used in this Agreement
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will be deemed to be the language chosen by Executive and the Company to
express their mutual intent, and no rule of strict construction will be
applied against Executive or the Company.
IN WITNESS WHEREOF, the parties have executed this Executive Employment
Agreement as of the date first above written.
AMSERV HEALTHCARE INC.
By: _______________________________________
Its: _______________________________________
EXECUTIVE:
____________________________________________
Xxxx Xxxxxxxx
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