EXHIBIT 10.6
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") dated
as of December 31, 1995, is made by and between WELCARE INTERNATIONAL, INC.,
a Georgia corporation ("Employer"), and J. XXXXXXX XXXXX, an individual
resident of Georgia ("Executive").
Employer recognizes that Executive's contribution to the growth and
success of Employer in future years will be a significant factor in the success
of Employer. Employer desires to provide for the employment of Executive in a
manner which will reinforce and encourage the dedication of Executive to
Employer and promote the best interests of Employer and its shareholders.
Executive is willing to serve Employer on the terms and conditions herein
provided. Certain terms used in this Agreement are defined in Section 18
hereof.
In consideration of the foregoing, the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. EMPLOYMENT. Employer shall employ Executive, and Executive shall
serve Employer, as President and Chief Executive Officer of Employer upon the
terms and conditions set forth herein. In such capacity he shall have full
authority to manage the operations of Employer, including, without limitation,
the discretion over personnel, facilities, budgets, and other operational
matters, subject to the direction of the Board of Directors (the "Board").
Executive shall devote his full business time, attention, skill and efforts to
the performance of his duties hereunder, except during periods of illness or
periods of vacation and leaves of absence consistent with Employer policy.
Executive may devote reasonable periods to service as a director or advisor to
other organizations, to charitable and community activities, and to managing his
personal investments, PROVIDED that such activities do not materially
interfere with the performance of his duties hereunder and are not in conflict
or competitive with, or adverse to, the interests of Employer.
2. TERM. Unless earlier terminated as provided herein, Executive's
employment under this Agreement shall be for an initial term (the "Term") of
four (4) years which, beginning on the second anniversary of the effective
date of this Agreement, shall be extended automatically (without further
action of Employer or Executive) each day for an additional day so that the
remaining term shall continue to be (2) two years.
3. COMPENSATION AND BENEFITS.
(a) As compensation for his services hereunder, Employer shall pay
to Executive a base salary of $300,000 per year, payable in bi-weekly or
semi-monthly installments. Such base salary shall be reviewed at least annually
on May 1 of each year by the Board to determine whatever increase may be
merited; PROVIDED, HOWEVER, that the minimum annual
increase shall be the increase in the Consumer Price Index as published by the
U.S. Department of Labor, Bureau of Statistics, for the period since the last
annual review (or, in the case of the first such review, the date of this
Agreement).
(b) Executive shall participate in Employer's management incentive
program and shall be eligible to receive annual payments based upon achievement
of targeted levels of performance and such other criteria as the Board (or an
appropriate committee of the Board) shall establish from time to time.
(c) Executive shall participate in Employer's long-term equity
incentive program and be eligible for the grant of stock options, restricted
stock and other awards thereunder. On the effective date of this Agreement,
Employer shall grant to Executive options to purchase 166,665 shares of the
common stock, $.01 par value per share (the "Common Stock"), of Employer.
Executive shall have an option to purchase 83,333 Option Shares ("Option One"),
which option shall have a term of ten years, shall be exercisable at a per-share
price of $9.675 and shall vest at the rate of 25 percent per year, commencing on
the first anniversary of the date of this Agreement. On each of the three
succeeding anniversaries of such date, provided that Executive continues to be
employed on a full-time basis by Employer, Executive shall be entitled to
exercise Option One with respect to 25% of the Option Shares subject to Option
One (rounded to the nearest whole share) until Option One terminates. Executive
shall have an option to purchase an additional 83,332 Option Shares ("Option
Two"), which option shall have a term of ten years and shall be exercisable at a
per-share price of $9.675 and shall vest at the rate of 25 percent per year and
on such other terms as Option One but Option Two shall accelerate its vesting to
50% of the unvested shares, provided that Executive continues to be employed on
a full-time basis by Employer, and Employer consummates a firm commitment
underwritten public offering of shares of Common Stock. The remaining 50% of
the unvested shares shall vest on the one year anniversary of such public
offering. The options shall, to the extent practicable, be qualified as
incentive stock options under the Internal Revenue Code of 1986, as amended
(the "Code"), and shall be subject to the other terms and conditions of
Employer's 1996 Stock Option Plan. Nothing herein shall be deemed to
preclude the granting to Executive of warrants or options under a director
option plan in addition to the options granted hereunder.
(d) Executive shall participate in all retirement, welfare and other
benefit plans or programs of Employer (including, at Employer's sole expense,
health, dental and hospitalization insurance coverage for Executive, his spouse
and dependents) now or hereafter applicable generally to employees of Employer
or to a class of employees that includes senior executives of Employer;
PROVIDED that during any period during the Term that Executive is subject to a
Disability, and during the one-hundred-eighty (180) day period of physical or
mental infirmity leading up to Executive's Disability, the amount of Executive's
compensation provided under this Section 3 shall be reduced by the sum of the
amounts, if any, paid to Executive for the same period under any disability
benefit or pension plan of Employer or any of its subsidiaries.
(e) Employer shall reimburse Executive for reasonable travel and
other expenses related to Executive's duties which are incurred and accounted
for in accordance with the normal practices of Employer.
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(f) Executive shall be entitled to and Employer shall provide for
Executive's personal use access to up to $15,000 in the aggregate of legal,
accounting or other professional advice ordinarily available to Employer which,
subject to professional responsibility requirements, will be provided to
Executive by Employer's primary legal counsel, accountants or other appropriate
professionals.
4. TERMINATION.
(a) Executive's employment under this Agreement may be terminated
prior to the end of the Term only as follows:
(i) upon the death of Executive;
(ii) by Employer due to the Disability of Executive upon
delivery of a Notice of Termination to Executive;
(iii) by Employer for Cause upon delivery of a Notice of
Termination to Executive;
(iv) by Executive for Good Reason upon delivery of a Notice
of Termination to Employer within a ninety (90) day period beginning
on the 30th day after the occurrence of a Change in Control or
within a ninety (90) day period beginning on the one year
anniversary of the occurrence of a Change in Control;
(v) by Employer at any time upon delivery of a Notice of
Termination to Executive after a vote of a majority of the Board in
favor of the termination of Executive, other than termination
pursuant to the foregoing clause (i), (ii) or (iii); and
(vi) by Executive effective upon the 90th day after delivery
of a Notice of Termination.
(b) If Executive's employment with Employer shall be terminated
during the Term pursuant to clause (i), (ii) or (iv) of the foregoing paragraph
(a), Executive (or, in the case of his death, Executive's estate) shall be
entitled to the following:
(i) Employer shall pay Executive in cash within fifteen (15)
days of the Termination Date an amount equal to all Accrued
Compensation;
(ii) Employer shall pay to Executive in cash at the end of
each of the thirty-six (36) consecutive months following the
Termination Date the Base Amount divided by (12) twelve; PROVIDED,
HOWEVER, that beginning three (3) years after the date of this
Agreement or upon the earlier consummation of the initial public
offering of the Employer any such payments accruing due to a
termination event preceding such date shall be made for only
twenty-four (24) consecutive months; and
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(iii) the restrictions on any outstanding incentive awards
(including the stock options set forth in Section 3(c) herein)
granted to Executive under Employer's long-term equity incentive
program or under any other incentive plan or arrangement shall lapse
and such incentive awards shall become 100% vested, and all stock
options and stock appreciation rights granted to Executive shall
become immediately exercisable and shall become 100% vested.
(c) If Executive's employment with Employer shall be terminated
during the Term pursuant to clause (v) of the foregoing paragraph (a), Executive
(or, in the case of his death, Executive's estate) shall be entitled to the
following:
(i) Employer shall pay Executive in cash within fifteen (15)
days of the Termination Date an amount equal to all Accrued
Compensation; and
(ii) Employer shall pay to Executive in cash at the end of
each of the thirty-six (36), consecutive months following the
Termination Date the Base Amount, divided by (12) twelve;
PROVIDED, HOWEVER, that beginning three (3) years after the date
of this Agreement or upon the earlier consummation of the initial
public offering of the Employer any such payments accruing due to a
termination event preceding such date shall be made for only
twenty-four (24) consecutive months.
(d) If Executive's employment with Employer shall be terminated
during the Term pursuant to clause (iii) or clause (vi) of the foregoing
paragraph (a), Executive shall be entitled to be paid by Employer in cash within
fifteen (15) days of the Termination Date an amount equal to all Accrued
Compensation.
(e) Executive 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 Executive in any subsequent employment except.
(f) In the event that any payment or benefit (within the meaning
of Section 280(b)(2) of the Code) to Executive or for his benefit paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise in connection with, or arising out of, his employment with Employer
or a change in ownership or effective control of Employer 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 or penalties are
incurred by Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to
as the "Excise Tax"), then Executive will be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by Executive
of all taxes (including any interest or penalties, other than interest and
penalties imposed by reason of Executive's failure to file timely a tax return
or pay taxes shown due on his return, imposed with respect to such taxes and the
Excise Tax), including any Excise Tax imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(g) The severance pay and benefits provided for in this Section 4
shall be in lieu of any other severance or termination pay to which Executive
may be entitled under any Employer severance or termination plan, program,
practice or arrangement. Executive's
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entitlement to any other compensation or benefits shall be determined in
accordance with Employer's employee benefit plans and other applicable programs,
policies and practices then in effect.
5. TRADE SECRETS.
(a) Executive agrees to keep confidential, and agrees that he
shall not, at any time, either during the Term of his employment or after the
Termination Date, use or disclose any Trade Secrets of the Employer, except in
fulfillment of his duties as Executive during his employment, for so long as the
pertinent information or data remain Trade Secrets, whether or not the Trade
Secrets are in written or tangible form.
(b) Executive agrees to maintain in strict confidence and, except
as necessary to perform his or her duties for Employer, not to use or disclose
and Confidential Business Information of Employer during his employment.
(c) Executive agrees that upon termination of his employment for
any reason, Executive shall forthwith return to or leave with Employer all
business records, contracts, calendars, telephone lists and other materials
relating to Employer, its business or its clientele, including all copies
thereof, whether or not Executive prepared them himself or they were provided by
Employer.
6. NON-COMPETITION AND NON-SOLICITATION COVENANTS.
(a) Executive recognizes that Executive is expected to be a key
employee whose specialized skills, abilities and contacts are considered
essential for the success of Employer. Executive further recognizes that
Employer specifically would not enter into this Agreement if it could not rely
on obtaining Executive's exclusive and undivided loyalty and attention and
Executive's compliance with the terms of this Agreement.
(b) During the Term and following any termination of his
employment, Executive shall not, directly or indirectly, (as a director,
officer, employee, manager, consultant, independent contractor, agent, advisor,
equity or debt holder or otherwise)engage in competition with, or own any
interest in, perform any services for, participate in or be connected with any
business or organization which operates a skilled nursing care facility or
facilities or any other type of residential facility in the Territory;
PROVIDED, HOWEVER, that the provisions of this paragraph (b) shall not
prohibit Executive's ownership of not more than 5% of the total shares of all
classes of stock outstanding of any publicly held company.
(c) During the Term and following any termination of his
employment, Executive shall not solicit, directly or indirectly, any Customers
(as hereinafter defined) of Employer, with whom Executive had material contact
during his employment.
(d) During the Term and following any termination of his
employment, Executive shall not, directly or indirectly, solicit for employment
or advise or recommend to any other person that he, she or it employ or solicit
for employment, any employee of Employer.
(e) The restrictions set forth in Sections 6(b), (c) and (d) shall
last for one (1) year following any termination of Executive's employment
pursuant to Section 4 hereof.
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(f) For purposes of this Agreement:
"Customers" shall mean the largest customers of Employer, and its
subsidiaries, including, but not limited to, the nursing homes that Employer and
its subsidiaries serve, which the parties agree shall mean those customers
(selected in descending order of annual income they provide to Employer) who
cumulatively represented eighty percent (80%) of the combined income of Employer
and its subsidiaries during the one (1) year period preceding the Termination
Date. To the extent applicable following termination of Executive's employment,
in no event shall any person or entity be considered "Customers" for purposes of
this Agreement if they conducted no financial business with Employer, or its
subsidiaries within the one (1) year period preceding the Termination Date of
Executive's employment.
The "Territory" shall mean the area located within the 10-mile radius of
any skilled nursing care or other residential facility operated by Employer, or
its affiliates, on the Termination Date. Set forth on the attached Schedule I,
which is incorporated herein by reference, is the name and street address of
each facility operated by Employer, or its affiliates, on the date of this
Agreement. The Employer shall, with the consent of Executive (which consent
shall not be unreasonably withheld), revise Schedule I from time to time to
reflect any additions, deletions, or changes in the facilities operated by
Employer. It is mutually acknowledged that Executive has significant management
and operations responsibility with respect to each such facility.
7. SUCCESSORS; BINDING AGREEMENT.
(a) This Agreement shall be binding upon and shall inure to the
benefit of Employer, its Successors and Assigns and Employer shall require any
Successors and Assigns to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that Employer would be required to
perform it if no such succession or assignment had taken place.
(b) Neither this Agreement nor any right or interest hereunder shall
be assignable or transferable by Executive, 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 Executive's
legal personal representative.
8. FEES AND EXPENSES. Employer shall pay all legal fees and related
expenses (including the costs of experts, evidence and counsel) incurred by
Executive as they become due as a result of (a) Executive's termination of
employment (including all such fees and expenses, if any, incurred in contesting
or disputing any such termination of employment) and (b) Executive seeking to
obtain or enforce any right or benefit provided by this Agreement; PROVIDED,
HOWEVER, that Executive must repay any amounts advanced pursuant to this
Section 8 if Executive does not prevail in any action or dispute regarding
Executive's rights under this Agreement and legal fees and related expenses were
advanced.
9. PUBLICITY. Except as set forth below, after the Termination Date
(a) no disclosure, public or otherwise, shall be made by Executive or Employer,
as the case may be, with respect to the terms and conditions of this Agreement
or the severance of Executive's employment relationship with Employer, except as
may be required by law, (b) Executive further agrees that Executive will not
demean or disparage Employer, publicly or otherwise, and (c) any inquiries made
of Employer, its officers, employees or representatives concerning
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Executive shall be answered only with a "neutral reference." The phrase
"neutral reference" as used herein shall mean only the inclusive dates of
Executive's tenure with Employer, the positions Executive held with Employer
during Executive's employment, and the rate at which Executive was compensated
for Executive's positions with Employer. Employer shall not provide any
additional information about Executive whatsoever; PROVIDED, HOWEVER, that
Employer shall explain in response to such inquiries that "Company policy
requires us to refrain from making any further response."
10. NOTICE. Notices and all other communications provided for in the
Agreement (including the Notice of Termination) shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to Employer:
WelCare International, Inc.
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Board of Directors
with a copy to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P.
000 Xxxxxx Xxxxxx, Xxxxx 0000
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
If to Executive:
Mr. J. Xxxxxxx Xxxxx
000 Xxxxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Either party may by written notice change the address to which notices to such
party are to be delivered or mailed, and notwithstanding the other provisions of
this section, such notice shall not be deemed given until it is actually
received.
11. SETTLEMENT OF CLAIMS. Employer's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
Employer may have against Executive or others. Employer may, however, withhold
from any benefits payable under this Agreement all federal, state, city, or
other taxes as shall be required pursuant to any law or governmental regulation
or ruling.
12. MODIFICATION AND WAIVER. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by Executive and Employer. No waiver by any
party hereto at any time of any breach
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by the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
13. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Georgia without giving
effect to the conflict of laws principles thereof. Employer and Executive agree
that venue for any dispute that may arise concerning this agreement shall be in
DeKalb County, Georgia, or Xxxxxx County, Georgia.
14. SEVERABILITY. The parties agree that the provisions of this
Agreement are severable and the invalidity or unenforceability of any provision
in whole or part shall not affect the validity or enforceability of any
enforceable part of such provision or any other provisions hereof.
15. ENTIRE AGREEMENT. This Agreement, with that certain Investment
Agreement dated as of December 29, 1992, between Employer and the other parties
thereto, as amended from time to time, and the agreements contemplated thereby,
other than that certain Employment Agreement dated December 29, 1992, by and
between Employer and Executive (the "Prior Employment Agreement"), constitute
the entire agreement between the parties hereto and supersede all prior
agreements, if any, understandings and arrangements, oral or written, between
the parties hereto with respect to the subject matter hereof, including without
limitation the Prior Employment Agreement.
16. HEADINGS. The headings of Sections herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
18. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the following meanings:
(a) "Accrued Compensation" shall mean an amount which shall include
all amounts earned or accrued through the Termination Date but not paid as of
the Termination Date including (i) base salary, (ii) reimbursement for
reasonable and necessary expenses incurred by Executive on behalf of Employer
during the period ending on the Termination Date, and (iii) bonuses and
incentive compensation.
(b) "Base Amount" shall mean the greater of Executive's annual base
salary (i) at the rate in effect on the Termination Date or (ii) at the highest
rate in effect at any time during the ninety day period prior to the Change in
Control, and shall include all amounts of his base salary that are deferred
under the qualified and non-qualified employee benefit plans of Employer or any
other agreement or arrangement.
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(c) The termination of Executive's employment shall be for "Cause"
if it is a result of:
(i) any act that constitutes, on the part of Executive,
fraud, dishonesty, gross malfeasance of duty, or conduct grossly
inappropriate to Executive's office; or
(ii) the conviction (from which no appeal may be or is timely
taken) of Executive of a felony.
PROVIDED, HOWEVER, that in the case of clause (i) above, such conduct shall
not constitute Cause unless (A) there shall have been delivered to Executive a
written notice setting forth with specificity the reasons that the Board
believes Executive's conduct constitutes the criteria set forth in clause (i),
(B) Executive shall have been provided the opportunity to be heard in person by
the Board (with the assistance of Executive's counsel if Executive so desires),
and (C) after such hearing, the termination is evidenced by a resolution adopted
in good faith by three-fourths of the members of the Board (other than
Executive).
(d) A "Change in Control" shall mean the occurrence during the Term
of any of the following events:
(i) An acquisition (other than directly from Employer) of
any voting securities of Employer (the "Voting Securities") by any
"Person" (as the term person is used for purposes of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934 (the "1934 Act"))
immediately after which such Person has "Beneficial Ownership"
(within the meaning of Rule 13d-3 promulgated under the 0000 Xxx) of
40% or more of the combined voting power of Employer's then
outstanding Voting Securities; PROVIDED, HOWEVER, that 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 (1) an employee benefit plan (or a trust forming a
part thereof) maintained by (x) Employer or (y) any corporation or
other Person of which a majority of its voting power or its equity
securities or equity interest is owned directly or indirectly by
Employer (a "Subsidiary"), (2) Employer or any Subsidiary, or (3)
any Person in connection with a "Non-Control Transaction" (as
hereinafter defined);
(ii) Prior to the initial public offering of securities of
Employer (the "IPO"), the Board ceases to consist solely of the
nominees selected pursuant to that certain Shareholders Agreement,
dated as of the date of that certain Plan of Merger among Employer,
WelCare Transitional Acquirors, Inc., and Transitional Health
Services, Inc., between Employer and the parties thereto, as it may
be amended from time to time, and after the IPO of Employer, the
individuals who, as of the date of the initial closing of the IPO
are members of the Board (the "Incumbent Board") cease for any
reason to constitute at least two-thirds of the Board; PROVIDED,
HOWEVER, that if the election, or nomination for election by
Employer's shareholders, of 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 Agreement, be considered as a member of
the Incumbent
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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 0000 Xxx) 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
(iii) Approval by shareholders of Employer of:
(A) A merger, consolidation or reorganization
involving Employer, unless
(1) the shareholders of Employer, immediately
before such merger, consolidation or
reorganization, own, directly or indirectly,
immediately following such merger,
consolidation or reorganization, at least
two-thirds 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, and
(2) 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-thirds of the
members of the board of directors of the
Surviving Corporation.
A transaction described in clauses (1) and (2)
shall herein be referred to as a "Non-Control
Transaction;"
(B) A complete liquidation or dissolution of Employer;
or
(C) An agreement for the sale or other disposition of
all or substantially all of the assets of Employer
to any Person (other than a transfer to a
Subsidiary).
(iv) Notwithstanding anything contained in this Agreement to
the contrary, if Executive's employment is terminated prior to a
Change in Control and Executive reasonably demonstrates that such
termination (A) was at the request of a third party who has
indicated an intention or taken steps reasonably calculated to
effect a Change in Control and who effectuates a Change in Control
(a "Third Party") or (B) otherwise occurred in connection with, or
in anticipation of, a Change in Control which actually occurs, then
for
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all purposes of this Agreement, the date of a Change in Control with
respect to Executive shall mean the date immediately prior to the
date of such termination of Executive's employment.
(e) "Confidential Business Information" shall mean any internal,
non-public information (other than Trade Secrets) concerning Employer's
financial position and results of operations (including revenues, margins,
assets, net income, etc.); annual and long-range business plans; service and
product plans; marketing plans and methods; account invoices; training,
educational and administrative manuals; customer information, including names,
addresses, telephones, customer requirements and purchase histories; and
employee lists.
(f) "Disability" shall mean a physical or mental infirmity which
impairs Executive's ability to substantially perform his duties with Employer
for a period of 180 consecutive days, as determined by an independent physician
selected by agreement between Employer and Executive or, failing such agreement,
selected by two physicians (one of which shall be selected by Employer and the
other by Executive).
(g) "Good Reason" shall mean the occurrence after a Change in
Control of any of the following events or conditions:
(i) a change in Executive's status, title, position or
responsibilities (including reporting responsibilities) which, in
Executive's reasonable judgment, represents an adverse change from
his status, title, position or responsibilities as in effect at any
time within ninety days preceding the date of a Change in Control or
at any time thereafter; the assignment to Executive of any duties or
responsibilities which, in Executive's reasonable judgment, are
inconsistent with his status, title, position or responsibilities as
in effect at any time within ninety days preceding the date of a
Change in Control or at any time thereafter; any removal of
Executive from or failure to reappoint or reelect him to any of such
offices or positions, except in connection with the termination of
his employment for Disability, Cause, as a result of his death or by
Executive other than for Good Reason, or any other change in
condition or circumstances that in Executive's reasonable judgment
makes it materially more difficult for Executive to carry out the
duties and responsibilities of his office than existed at any time
within ninety days preceding the date of Change in Control or at any
time thereafter;
(ii) a reduction in Executive's base salary or any failure to
pay Executive any compensation or benefits to which he is entitled
within five days of the date due;
(iii) Employer's requiring Executive to be based at any place
outside a thirty (30) mile radius from the executive offices
occupied by Executive immediately prior to the Change in Control,
except for reasonably required travel on Employer's business which
is not materially greater than such travel requirements prior to the
Change in Control;
(iv) the failure by Employer to (A) continue in effect
(without reduction in benefit level and/or reward opportunities) any
material compensation or employee benefit plan in which Executive
was participating at
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any time within ninety days preceding the date of a Change in
Control or at any time thereafter, unless such plan is replaced with
a plan that provides substantially equivalent compensation or
benefits to Executive or (B) provide Executive 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 employee benefit plan, program and practice in which Executive
was participating at any time within ninety days preceding the date
of a Change in Control or at any time thereafter;
(v) the insolvency or the filing (by any party, including
Employer) of a petition for bankruptcy of Employer, which petition
is not dismissed within sixty (60) days;
(vi) any material breach by Employer of any provision of this
Agreement;
(vii) any purported termination of Executive's employment for
Cause by Employer which does not comply with the terms of this
Agreement; or
(viii) the failure of Employer to obtain an agreement,
satisfactory to Executive, from any Successors and Assigns to assume
and agree to perform this Agreement, as contemplated in Section 7
hereof.
Any of such events or conditions which occurs prior to a Change in Control but
which Executive reasonably demonstrates (A) was at the request of a Third Party,
or (B) otherwise arose in connection with, or in anticipation of, a Change in
Control which actually occurs, shall constitute Good Reason for purposes of this
Agreement, notwithstanding that it occurred prior to the Change in Control.
Executive's right to terminate his employment for Good Reason shall not be
affected by his incapacity due to physical or mental illness.
(h) "Notice of Termination" shall mean a written notice of
termination from Employer or Executive which specifies an effective date of
termination, indicates the specific termination provision in this Agreement
relied upon, and sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's employment under the
provision so indicated.
(i) "Successors and Assigns" shall mean Employer or a corporation or
other entity acquiring all or substantially all the assets and business of
Employer (including this Agreement), whether by operation of law or otherwise.
(j) "Termination Date" shall mean, in the case of Executive's death,
his date of death, and in all other cases, the date specified in the Notice of
Termination.
(k) "Trade Secrets" shall mean any information, including but not
limited to technical or non-technical data, a formula, a pattern, a compilation,
a program, a device, a method, a technique, a drawing, a process, financial
data, financial plans, product plans, information on customers, or a list of
actual or potential customers or suppliers, which: (i) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and (ii) is the subject of efforts that are
reasonable under the
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circumstances to maintain its secrecy. Some of the information that Employer
treats as trade secrets includes financial information (revenues, margins,
assets, net income, etc.); annual and long-range business plans; product plans;
marketing plans and methods; account invoices; training, educational, and
administrative manuals; customer information; employee lists; suppliers;
wholesalers; and future business plans of Employer.
IN WITNESS WHEREOF, Employer has caused this Agreement to be executed and
its seal to be affixed hereunto by its officers thereunto duly authorized, and
Executive has signed and sealed this Agreement, effective as of the date first
above written.
WELCARE INTERNATIONAL, INC.
ATTEST:
By: /s/ Xxxx X. Xxxxxx By: /s/ J. Xxxxxxx Xxxxx
-------------------------- -------------------------------------------
J. Xxxxxxx Xxxxx
President and Chief Executive Officer
EXECUTIVE
/s/ J. Xxxxxxx Xxxxx (L.S.)
-----------------------------------
J. Xxxxxxx Xxxxx
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SCHEDULE 10.6
WelCare International, Inc. n/k/a Centennial HealthCare Corporation
("CHC") has entered into agreements substantially identical to Exhibit 10.6 as
follows:
1. Employment Agreement dated December 31, 1995 by and between CHC and
Xxxx X. Xxxx (the "Xxxx Agreement"). Material details in which the Xxxx
Agreement differs from Exhibit 10.6 are as follows:
(a) Xx. Xxxx is employed as Executive Vice President and Chief
Financial Officer of the Company at a base salary of $175,000 per
year.
(b) The initial term of Xx. Xxxx'x agreement is for three years
and automatically extends, beginning on the second anniversary
of the effective date of the Agreement, (without further action
of Company or Xx. Xxxx) each day for an additional day so that
the remaining term shall continue to be (1) one years.
(c) Xx. Xxxx was granted options to purchase 55,555 shares of
Common Stock. Option One (as defined in Exhibit 10.6) was for
27,778 shares of common stock and Option Two (as defined in Exhibit
10.6) was for 27,777 shares of common stock.
(d) If Xx. Xxxx'x employment is terminated early for reasons other
than for Cause (as defined in Exhibit 10.6) or by delivery of notice
of termination by Xx. Xxxx, then he is to be paid in cash at the end
of each of twelve (12) consecutive months following the Termination
Date (as defined in Exhibit 10.6) the Base Amount (as defined in
Exhibit 10.6) divided by twelve (12).
2. Employment Agreement dated December 31, 1995 by and between CHC and
Xxxx X. Xxxxx, Xx. A material detail in which this agreement differs from the
Xxxx Agreement is that Xx. Xxxxx is employed as Executive Vice President of
Operations.
3. Employment Agreement dated December 31, 1995 by and between CHC and
Xxxxxxx X. Xxxxxxx. A material detail in which this agreement differs from the
Xxxx Agreement is that Xx. Xxxxxxx is employed as Executive Vice President of
the Company at a base salary of $250,000 per year.
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