EXHIBIT 10-F
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement is entered into this 19th day of November,
2002 ("Effective Date") between Priority Healthcare Corporation and its
affiliated and subsidiary companies, with its primary offices at 000 Xxxxxxxxxx
Xxxx, Xxxxx 000, Xxxx Xxxx, Xxxxxxx 00000 ("Company") and Xxxxx Xxxxxx,
("Executive").
WITNESSETH:
WHEREAS, Company desires to employ Executive for the period provided for in this
Agreement and the Executive is willing to accept such employment with the
Company on a full-time basis, all in accordance with the terms and conditions
specified in this Agreement;
NOW THEREFORE, for and in consideration of ten dollars, the terms contained in
this Agreement and other good and valuable consideration, the receipt and
sufficiency of which is affirmed by the parties by their execution of this
Agreement, the parties agree and covenant to the following terms and conditions:
1. EMPLOYMENT
1.1 The Company hereby employs the Executive and the Executive hereby
accepts employment with the Company as the President and Chief Executive
Officer, for the period set forth in Section 1.3, upon the terms and
conditions outlined in this Agreement.
1.2 The Executive affirms he is under no other obligation to any former
employer or to any other third party that is in any way inconsistent
with or imposes any restriction upon the Executive's employment with the
Company.
1.3 Unless otherwise terminated under the terms of this Agreement, the term
of Executive's employment under this Agreement shall be initially for
the period beginning upon the date of execution hereof and continuing
through December 31, 2004; PROVIDED THAT on December 31, 2004 and every
December 31st thereafter, the term of the Executive's employment shall
automatically be extended for an additional two (2) year period
("Employment Term"), unless ninety (90) days prior to December 31st each
year, the Company shall have given the Executive or the Executive shall
have given the Company a written notice that the Employment Term shall
not be extended.
2. DUTIES
2.1 The Executive shall be employed as President and Chief Executive Officer
of the Company, and shall, subject to the direction of the Board of
Directors of Company ("the Board"), use his best efforts to faithfully
and competently perform such duties as are detailed in Exhibit A,
attached hereto and hereby incorporated herein and shall
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also perform and discharge such other executive employment duties and
responsibilities consistent with his position as President and Chief
Executive Officer.
2.2 Executive's primary workplace will be located in greater Orlando,
Florida. Except as set out herein or otherwise be approved in advance by
the Board and except for reasonable periods of absence related to
vacation, sick leave, other personal matters, personal injury and/or
service activities, Executive shall devote his full time, attention,
skill and effort during normal business hours throughout Executive's
employment, to the duties and responsibilities associated with his
position.
2.3 Executive shall not, during such employment with Company, engage in any
other business or volunteer activity requiring any substantial amount of
his time (whether or not such business activity is pursued for gain,
profit or pecuniary advantage).
3. COMPENSATION
3.1 As compensation for the performance of Exhibit A duties herein, the
Company shall pay the Executive a base salary specified in Exhibit B
"Salary & Benefits", attached hereto and hereby incorporated herein. The
base salary shall be identified hereinafter as "Salary." Any Salary
hereunder shall be paid at regular intervals but no less frequently than
bi-weekly in accordance with the Company's payroll practices. Annual
increases in salary shall be determined by the Board in its sole
discretion.
3.2 Executive will be entitled to receive bonus compensation from the
Company annually, based upon a set of performance targets established by
the Chairman and Vice Chairman of the Executive Committee and as
approved by the Board or, at the Board's direction, the Compensation
Committee of the Board of Directors of the Company ("Bonus Performance
Targets"). Annually said Bonus Performance Targets shall be incorporated
as Exhibit C attached to this Agreement, amended annually and hereby
incorporated herein, without the necessity of said Exhibit being
executed by the parties to this Agreement.
3.3 Payment of any Base Salary and/or Bonus hereunder shall be subject to
applicable withholding, payroll and other local, state and federal
taxes, as required by applicable law or the Company's Executive benefit
plans.
4. OTHER BENEFITS
During the term hereof, and any extensions hereto, Executive shall be
eligible to:
4.1 participate in Executive fringe benefits, pension and/or profit sharing
plans that may be provided by Company for its Executive Executives in
accordance with the provisions of such plans, as such plans may be in
effect from time to time;
4.2 participate in medical, health plans and/or other Executive welfare
and/or benefit plans that may be provided by the Company for its
Executive Executives in accordance with the provisions of such plans
that may be in effect from time to time;
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4.3 thirty (30) paid vacation days in each calendar year, beginning January
1, 2002, as well as all paid holidays given by the Company to its senior
executive officers;
4.4 personal time off, sick leave, sick pay and disability benefits in
accordance with any Company policy that may be applicable to Executive
Executives from time to time;
4.5 reimbursement for all reasonably necessary out-of-pocket business
expenses incurred by the Executive in the performance of his duties as
detailed herein, in accordance with Company's policies pertaining to
such out-of-pocket business expenses and in accordance with applicable
state and federal laws and regulations;
4.6 term insurance coverage on the life of the Executive in the aggregate
amount provided by the Company for its Executive Executives in
accordance with applicable Company benefit plans;
4.7 participation in any stock option plans generally available to the
Company's key Executives; and
4.8 such additional benefits as may be agreed upon by the parties from time
to time and incorporated herein as Exhibit E.
5. CONFIDENTIAL AND PROPRIETARY INFORMATION
5.1 Executive has and will have access to and will participate in the
development of confidential and/or proprietary information and trade
secrets related to the business of the Company and its current and
future subsidiaries, affiliates and related entities of the Company,
hereinafter referred to as "Confidential Information," including but not
limited to:
. Customer and physician lists
. Patient confidential medical records and other personal
information
. Referral sources
. Financial statements
. Cost and other financial reports
. Contract proposals or bidding information
. Business plans
. Training and operations methods, manuals and programs
. Reports and correspondence
. Systems, Processes, Policies and Procedures
. All other Tangible and Intangible property which are used in the
operation of the Company
. Information Systems and Software
5.2 Confidential Information does not include information that is or becomes
generally publicly available (unless in violation of Executive's
obligations under this Agreement) and/or Confidential Information that
Executive receives on a non-confidential basis and not known by him/her
as confidential.
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5.3 Executive shall not disclose, use or make known for his or another's
benefit any Confidential Information or use Confidential Information in
any way that is other than in the best interests of the Company.
5.4 Executive may disclose Confidential Information when required by
applicable law or judicial proceeding, but only after (a) providing
notice to the Company of the receipt of a request from applicable
governmental authority (b) advising the Company of Executive's intention
to respond to such request and (c) Company's sufficient opportunity to
respond, challenge or limit the scope of Executive's Disclosure.
5.5 Executive acknowledges and agrees that a remedy at law for breach or
threatened breach of this Section 5 would be inadequate and agrees that
Company shall be entitled to injunctive relief in addition to any other
available rights and remedies in case of any breach or threatened
breach.
5.6 In the event of termination of Executive's employment with the Company
for any reason, including this Section 5, the Executive will immediately
return to Company any Confidential Information in whatever form
possessed by Executive.
5.7 Executive's obligations hereunder shall survive the expiration or
termination of this Agreement and shall apply to Executive's heirs,
successors and/or legal representatives.
6. TERMINATION
6.1 Executive's termination of employment under this Agreement shall occur
in the event of one or more of the following:
6.1.1. Death of Executive;
6.1.2. Change of Control of the Company as defined in Exhibit
D, attached hereto and hereby incorporated herein.
6.1.3. Executive's Disability which results in Executive's
inability to perform his responsibilities as detailed herein for
a period of more than 90 days, whether or not consecutive,
within any consecutive twelve (12) month period;
6.1.4. Executive's written notice to the Company, delivered at
least 90 days prior to the effective date of the termination,
that the Executive is terminating his employment "for good
reason," defined as:
a. Assignment to Executive of duties materially
inconsistent with Executive's position,
authority, duties or responsibilities as
outlined herein;
b. Action by Company resulting in a material
diminution or material adverse change in
Executive's title, position, authority, duties
or responsibilities;
c. Material breach by the Company of this
Agreement, including requiring Executive to be
based at a location other than Orlando, Florida
metropolitan area, as specified in Section 2.2
of this Agreement;
d. Company failure to continue any cash or
stock-based bonus plan, retirement plan, welfare
or other benefit or incentive plan, unless the
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aggregate value of all such compensation,
retirement and benefit plans provided to the
Executive is not less than the aggregate value
of the plans before such change;
e. a reduction by the Company of Executive's Base
Salary as in effect on the Effective Date of
this Agreement or as said Base Salary shall be
increased hereafter from time to time
6.1.5. Company's termination of Executive without cause or
notice to Executive of nonrenewal of this Agreement under
Section 1.3.
6.1.6. Company's written notice of termination of Executive
"for cause," defined as Executive's:
a. Indictment of or the entering of a plea of nolo
contendere by the Executive with respect to
having committed a felony;
b. Acts of fraud, theft or criminal conduct that
are detrimental to the financial condition or
business reputation of the Company;
c. Acts of dishonesty or gross negligence by the
Executive, which acts would not be qualified for
indemnification under the Directors' and
Officers' Liability Insurance Policy; or
d. Willful acts or failure(s) to act consistent
with or willful disregard of his obligations
under Company policies or this Agreement.
6.1.7 Executive shall not be deemed to have been terminated
for cause unless and until there shall have been delivered to
him/her a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the
Company's Board at a meeting called and held for the purpose
(after reasonable notice to Executive and an opportunity for
Executive, together with his counsel, to be heard before such
Board), finding that, in the good faith opinion of such Board,
Executive was guilty of conduct constituting "cause" and
specifying the particulars thereof in detail.
6.2 In the event Executive's employment hereunder is terminated under
Section 6.1.1, 6.1.2, 6.1.3, 6.1.4, or 6.1.5, Company shall pay to
Executive, as severance pay or liquidated damages or both, a lump-sum
cash payment equal to the present value of the sum of the following
amounts:
a. The Base Salary that would have been paid to the Executive
throughout the greater of the number of months remaining under
the term of this Agreement or 24 months;
b. The annual bonus amount in the year of termination of
Executive's employment, calculated at the higher of the base
bonus opportunity or the average bonus percentage of Base Salary
payable to Executive for the two (2) years immediately preceding
the year of termination, and
c. The annualized long-term incentive award for the year in which
the Executive's employment is terminated, at the higher of the
targeted level of the award or the anticipated actual incentive
award.
6.3 Executive shall continue to participate in the medical, dental, life,
accident and disability benefit plans of the Company as provided for
herein on the same basis
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and at the same cost to Executive as on the date of termination or
resignation until the first anniversary of such termination or
resignation.
6.4 To the extent that Executive is not then 100% vested in any employer
matching contribution and earnings thereon allocated to his account in
the Company's 401(k) Plan and said non-vested amount is forfeited, the
Company will pay Executive a lump sum amount on the date of such
forfeiture equal to the non-vested forfeited amount.
6.5 To the extent that Executive's employment is terminated and Executive is
entitled to receive funds from Company's profit sharing plan, deferred
compensation plan, excess plan and/or the Equity Unit Plan for the
period of time during which Executive was actively engaged as an
Executive of Company, Company shall pay Executive any accrued profit
sharing or other amounts through the date of termination of Executive's
employment. However, Executive shall not, from the date of Executive's
termination from employment or during the period when Company is paying
Executive severance pay or liquidated damages or both after such date of
termination of employment, be entitled to participate in any Company
profit sharing programs.
6.6 Except as required by law and except as provided in Sections 6.2, 6.3,
6.4, 6.5 and 6.7, Company shall not be obligated to make any payments to
Executive or on his behalf by reason of Executive's cessation of
employment other than such amounts, if any, of his Salary as shall have
accrued and remain unpaid as of the date of cessation of employment.
6.7 No interest shall accrue on or be paid with respect to any timely
payments made hereunder.
6.8 Any rights or interest of Executive in Restricted Stock or other Stock
Option Grants shall be subject to the terms provided for in the
applicable Restricted Stock Agreement or other Stock Option Plan
documents and agreements.
7. CHANGE OF CONTROL
7.1 Notwithstanding the foregoing, if a Change in Control of the Company (as
defined in Exhibit D) shall occur prior to the expiration of the
original term or any extensions of the term of this Agreement, then the
term of this Agreement shall automatically become a term of three (3)
years commencing on the date of any such Change in Control.
7.2 In the event a Change of Control as outlined in Exhibit D should occur,
the following benefits, less any amounts required to be withheld
therefrom under any applicable federal, state or local income tax, other
tax, or social security laws or similar statutes, shall be paid to
Executive upon any termination of his employment with the Company
subsequent to a Change in Control:
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(A) Within thirty (30) days following such a termination,
Executive shall be paid, at his then-effective salary, for services
performed through the date of his termination. In addition, Executive
shall be paid the bonus accrued through the date of termination,
calculated at the higher of the base bonus opportunity or the average
bonus percentage of Base Salary payable to Executive for the two (2)
years immediately preceding the year of termination, pro-rated for the
number of months from January 1 of the year in which the Change of
Control occurs through the end of the month in which the Change of
Control occurs and the annualized long-term incentive award for the year
in which the Change of Control occurs, at the higher of the targeted
level of the award or the anticipated actual incentive award, pro-rated
for the number of months from January 1 of the year in which the Change
of Control occurs through the end of the month in which the Change of
Control occurs.
(B) Within thirty (30) days following such a termination,
Executive shall be paid a lump sum payment of an amount equal to two and
nine-tenths (2.9) times Executive's "Base Amount." For purposes hereof,
Base Amount is defined as the higher of Executive's average includable
compensation paid by the Company for the five (5) most recent taxable
years ending before the date on which the Change in Control occurs or
the Base Salary plus Executive's applicable annual bonus opportunity.
The definition, interpretation and calculation of the dollar amount of
Base Amount shall be in a manner consistent with and as required by the
provisions of Section 280G of the Internal Revenue Code of 1986, as
amended ("Code"), and the regulations and rulings of the Internal
Revenue Service promulgated there under.
(C)(i) In the event that any payment or benefit (within the
meaning of Section 280G(b)(2) of the Code) paid or payable to the
Executive or for his benefit pursuant to the terms of this Agreement or
otherwise (including any benefit from the exercise of stock options
vested early because of a change in control) in connection with, or
arising out of, his employment with the Company or a change in ownership
or effective control of the Company or of a substantial portion of its
assets (a "Payment" or "Payments"), would be subject to the excise tax
imposed by Section 4999 of the Code or any interest, penalties,
additional tax or similar items are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such
interest, penalties, additional tax or similar items are hereinafter
collectively referred to as the "Excise Tax"), then the Executive will
be entitled to receive an additional payment (a "Gross-Up Payment") in
an amount such that after payment by the Executive of all taxes
(including any interest, penalties, additional tax or similar items
imposed with respect thereto and the Excise Tax) including any Excise
Tax imposed upon the Gross-Up Payment, the Executive retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
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(ii) An initial determination as to whether a Gross-Up
Payment is required pursuant to this Agreement and the amount of such
Gross-Up Payment shall be made at the Company's expense by an accounting
firm selected by the Company and reasonably acceptable to the Executive
which is designated as one of the four largest accounting firms in the
United States (the "Accounting Firm"). The Accounting Firm shall provide
its determination (the "Determination"), together with detailed
supporting calculations and documentation to the Company and the
Executive within ten days of the Termination Date if applicable, or such
other time as requested by the Company or by the Executive and if the
Accounting Firm determines that no Excise Tax is payable by the
Executive with respect to a Payment or Payments, it shall furnish the
Executive with an opinion reasonably acceptable to the Executive that no
Excise Tax will be imposed with respect to any such Payment or Payments.
Within ten days of the delivery of the Determination to the Executive,
the Executive shall have the right to dispute the Determination (the
"Dispute"). The Gross-Up Payment, if any, as determined pursuant to this
subsection 6(c) (ii) shall be paid by the Company to the Executive
within five days of the receipt of the Accounting Firm's Determination.
The existence of the Dispute shall not in any way affect the Executive's
right to receive the Gross-Up Payment in accordance with the
Determination. If there is no Dispute, the Determination shall be
binding, final and conclusive upon the Company and the Executive subject
to the application of subsection 6(c) (iii) below.
(iii) As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up
Payment (or a portion thereof) will be paid which should not have been
paid (an "Excess Payment") or a Gross-Up Payment (or a portion thereof)
which should have been paid will not have been paid (an "Underpayment").
An Underpayment shall be deemed to have occurred (a) upon notice (formal
or informal) to the Executive from any governmental taxing authority
that the Executive's tax liability (whether in respect of the
Executive's current taxable year or in respect of any prior taxable
year) may be increased by reason of the imposition of the Excise Tax on
a Payment or Payments with respect to which the Company has failed to
make a sufficient Gross-Up Payment, (b) upon a determination by a court,
(c) by reason of determination by the Company (which shall include the
position taken by the Company, together with its consolidated group, on
its federal income tax return) or (d) upon the resolution of the Dispute
to the Executive's satisfaction. If an Underpayment occurs, the
Executive shall promptly notify the Company and the Company shall
promptly, but in any event, at least five days prior to the date on
which the applicable government taxing authority has requested payment,
pay to the Executive an additional Gross-Up Payment equal to the amount
of the Underpayment plus any interest, penalties, additional taxes or
similar
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items imposed on the Underpayment. An Excess Payment shall be deemed to
have occurred upon a "Final Determination" (as hereinafter defined) that
the Excise Tax shall not be imposed upon a Payment or Payments (or
portion thereof) with respect to which the Executive had previously
received a Gross-Up Payment. A "Final Determination" shall be deemed to
have occurred when the Executive has received from the applicable
government taxing authority a refund of taxes or other reduction in the
Executive's tax liability by reason of the Excise Payment and upon
either (x) the date a determination is made by, or an agreement is
entered into with, the applicable governmental taxing authority which
finally and conclusively binds the Executive and such taxing authority,
or in the event that a claim is brought before a court of competent
jurisdiction, the date upon which a final determination has been made by
such court and either all appeals have been taken and finally resolved
or the time for all appeals has expired or (y) the statute of
limitations with respect to the Executive's applicable tax return has
expired. If an Excess Payment is determined to have been made, the
amount of the Excess Payment shall be treated as a loan by the Company
to the Executive and the Executive shall pay to the Company on demand
(but not less than ten days after the Final Determination of such Excess
Payment and written notice has been delivered to the Executive) the
amount of the Excess Payment plus interest at an annual rate equal to
the Applicable Federal Rate provided for in Section 1274(d) of the Code
from the date the Gross-Up Payment (to which the Excess Payment relates)
was paid to the Executive until the date of repayment to the Company.
(iv) Notwithstanding anything contained in this Agreement to
the contrary, in the event that, according to the Determination, an
Excise Tax will be imposed on any Payment or Payments, the Company shall
pay to the applicable government taxing authorities as Excise Tax
withholding, the amount of the Excise Tax that the Company has actually
withheld from the Payment or Payments.
7.3 The Company is aware that upon the occurrence of a Change in Control the
Board of Directors or a shareholder of the Company may then cause or
attempt to cause the Company to refuse to comply with its obligations
under this Agreement, or may cause or attempt to cause the Company to
institute, or may institute, litigation seeking to have this Agreement
declared unenforceable, or may take or attempt to take other action to
deny Executive the benefits intended under this Agreement. In these
circumstances, the purpose of this Agreement could be frustrated. It is
the intent of the Company that Executive not be required to incur the
expenses associated with the enforcement of his rights under this
Agreement by litigation or other legal action, nor be bound to negotiate
any settlement of his rights hereunder, because the cost and expense of
such legal action or settlement would substantially detract from the
benefits intended to be extended to Executive hereunder. Accordingly, if
following a Change in Control it should appear to
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Executive that the Company has failed to comply with any of its
obligations under this Agreement or in the event that the Company or any
other person takes any action to declare this Agreement void or
unenforceable, or institutes any litigation or other legal action
designed to deny, diminish or to recover from Executive the benefits
entitled to be provided to the Executive hereunder, and that Executive
has complied with all of his obligations under this Agreement, the
Company irrevocably authorizes Executive from time to time to retain
counsel of his choice, at the expense of the Company as provided in this
Section 7, to represent Executive in connection with the initiation or
defense of any litigation or other legal action, whether such action is
by or against the Company or any director, officer, shareholder, or
other person affiliated with the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship
between the Company and such counsel, the Company irrevocably consents
to Executive entering into an attorney-client relationship with such
counsel, and in that connection the Company and Executive agree that a
confidential relationship shall exist between Executive and such
counsel. The reasonable fees and expenses of counsel selected from time
to time by Executive as hereinabove provided shall be paid or reimbursed
to Executive by the Company on a regular, periodic basis upon
presentation by Executive of a statement or statements prepared by such
counsel in accordance with its customary practices. Any legal expenses
incurred by the Company by reason of any dispute between the parties as
to enforceability of or the terms contained in this Agreement as
provided by this Section 7, notwithstanding the outcome of any such
dispute, shall be the sole responsibility of the Company, and the
Company shall not take any action to seek reimbursement from Executive
for such expenses.
7.4 Executive is not required to mitigate the amount of benefit payments to
be made by the Company pursuant to this Agreement by seeking other
employment or otherwise, nor shall the amount of any benefit payments
provided for in this Agreement be reduced by any compensation earned by
Executive as a result of employment by another employer or which might
have been earned by Executive had Executive sought such employment,
after the date of termination of his employment with the Company or
otherwise.
7.5 The Company shall also provide Executive with the benefits set forth in
Section 7 of this Agreement upon any termination of Executive's
employment with the Company at Executive's option after a Change in
Control followed by the happening of any one of the following events:
(A) Without Executive's express written consent, the
assignment of Executive to any duties which, in Executive's reasonable
judgment, are materially inconsistent with his positions, duties,
responsibilities or status with the Company immediately prior to the
Change in Control or a substantial reduction of his duties or
responsibilities which, in Executive's reasonable opinion, does not
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represent a promotion from his position, duties or responsibilities
immediately prior to the Change in Control.
(B) A reduction by the Company in Executive's salary from
the level of such salary immediately prior to the Change in Control or
the Company's failure to increase (within twelve (12) months of
Executive's last increase in base salary) Executive's base salary after
a Change in Control in an amount which at least equals, on a percentage
basis, the average percentage increase in base salary for all executive
and senior officers of the Company effected in the preceding twelve (12)
months.
(C) The failure by the Company to continue in effect any
incentive, bonus or other compensation plan in which Executive
participates, including but not limited to the Company's stock option
plans, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan), with which Executive has consented, has
been made with respect to such plan in connection with the Change in
Control, or the failure by the Company to continue Executive's
participation therein, or any action by the Company which would directly
or indirectly materially reduce Executive's participation therein.
(D) The failure by the Company to continue to provide
Executive with benefits substantially similar to those enjoyed by
Executive or to which Executive was entitled under any of the Company's
principal pension, profit sharing, life insurance, medical, dental,
health and accident, or disability plans in which Executive was
participating at the time of a Change in Control, the taking of any
action by the Company which would directly or indirectly materially
reduce any of such benefits or deprive Executive of any material fringe
benefit enjoyed by Executive or to which Executive was entitled at the
time of the Change in Control, or the failure by the Company to provide
Executive with the number of paid vacation and sick leave days to which
Executive is entitled on the basis of years of service or position with
the Company in accordance with the Company's normal vacation policy in
effect on the date hereof.
(E) The Company's requiring Executive to be based anywhere
other than the metropolitan area where the Company office at which he
was based immediately prior to the Change in Control was located, except
for required travel on the Company's business in accordance with the
Company's past management practices.
(F) Any failure of the Company to obtain the assumption of
the obligation to perform this Agreement by any successor as
contemplated in Section 8 hereof.
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(G) Any failure by the Company or its shareholders, as the
case may be, to reappoint or reelect Executive to a corporate office
held by him immediately prior to the Change in Control or his removal
from any such office including any seat held at such time on the
Company's Board of Directors.
(H) The effectiveness of a resignation, tendered at any
time, either before or after a Change in Control and regardless of
whether formally characterized as voluntary or otherwise, by Executive
of any corporate office held by him immediately prior to the Change in
Control or of any seat held at such time on the Company's Board of
Directors, at the request of the Company or at the request of the person
obtaining control of the Company in such Change in Control.
(I) Any purported termination of the Executive's employment
which is not effected pursuant to a Notice of Termination satisfying the
requirements of this Agreement.
(J) Any request by the Company that Executive participate in
an unlawful act or take any action constituting a breach of Executive's
professional standard of conduct.
(K) Any breach by the Company of any of the provisions of
this Agreement or any failure by the Company to carry out any of its
obligations hereunder.
Notwithstanding anything in this Agreement to the contrary, Executive's right to
terminate Executive's employment pursuant to this Section 7 shall not be
affected by Executive's incapacity due to physical or mental illness.
8. NO ASSIGNMENT
8.1 Neither this Agreement nor any right or interest hereunder is assignable
by Executive or Executive's beneficiaries or legal representatives
without Company's prior written consent; provided however, nothing in
this Agreement shall preclude the Executive from designating a
beneficiary to receive any benefit payable hereunder upon Executive's
death or incapacity.
8.2 Notwithstanding the terms herein, this Agreement and the Company's
rights hereunder may be assigned by the Company pursuant to a merger or
consolidation that is not defined as a Change of Control in Exhibit D.
8.3 No right to receive payments under this Agreement shall be subject to
anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge, attachment, and levy or to assignment by operation of
law. Any attempt, voluntary or involuntary, to effect any such action
shall be null, void and of no effect.
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9. SEVERABILITY
Should any clause, portion or section of this Agreement be unenforceable
or invalid for any reason, such unenforceability or invalidity shall not
affect the enforceability or validity of the remainder of this
Agreement. Should any particular covenant in this Agreement be held
unreasonable or unenforceable for any reason, including without
limitation, the time period, geographical area and scope of activity
covered by such covenant, then the covenant shall be given effect and
enforced to whatever extent would be reasonable and enforceable.
10. NON-COMPETE AGREEMENT
This Agreement shall be subject to and hereby incorporates herein the
terms of the Non-Compete Agreement between Executive and Company
executed at the time of initiation of Executive's employment with
Company.
11. INDEMNITY
To the extent permitted by applicable law and the charter and by-laws of
the Company, Company shall:
11.1 Indemnify Executive and hold Executive harmless for any acts or
decisions made by him in good faith while performing services for the
Company. Company will use reasonable best efforts to maintain and, after
termination, continue coverage for Executive under Director's and
Officer's liability coverage to the same extent as other current or
former officers and directors of the Company; and
11.2 Advance or pay all expenses, including attorney's fees actually and
necessarily incurred by the Executive in connection with the defense of
any action, suit or proceeding arising out of Executive's service for
the Company and in connection with any appeal thereon, including the
cost of court settlements.
12. NO MITIGATION
In the event of Executive's resignation or termination of Executive's
employment hereunder, Executive shall have no obligation to seek other
employment or otherwise mitigate damages and there shall be no offset
for any remuneration attributable to any subsequent employment that the
Executive may obtain.
13. NOTICES
All notices which are required or may be given pursuant to the terms of
this Agreement shall be in writing and shall be sufficiently delivered
if provided in writing, delivered personally, by certified or registered
mail, return receipt requested, by a nationally recognized overnight
courier or via facsimile confirmed in writing to the recipient. Delivery
shall be to Company at Company's principal place of business and to
Executive at Executive's most recently filed home address.
Any termination of Executive's employment with the Company hereof shall
be communicated by written "Notice of Termination" to the other party
hereto. Any "Notice of Termination" given by Executive or given by the
Company in connection with a termination as to which the Company
believes it is not obligated to provide Executive
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with benefits set forth herein shall indicate the specific provisions of
this Agreement relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for such termination.
14. ENFORCEMENT
Any dispute arising under this Agreement shall, at the election of
either party, be resolved by final and binding arbitration to be held in
the Orlando, Florida metropolitan area in accordance with the rules and
procedures of the American Arbitration Association. Judgment upon the
award entered by the arbitrator may be entered in any court having
jurisdiction thereof.
15. GOVERNING LAW
This Agreement is governed by the laws of the state of Indiana.
16. WAIVER
Failure to insist upon strict compliance with any of the terms,
conditions or provisions of this Agreement shall not be deemed a waiver
hereof, nor shall any waiver or relinquishment of any right or power
hereunder at any one or more times be deemed a waiver or relinquishment
of any right or power at any other time.
17. NO AMENDMENT
This Agreement may not be modified or amended without prior written
consent of both Executive and Company.
18. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall
constitute the same instrument.
IN WITNESS WHEREOF, Company and Executive have executed on the date first stated
above.
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxx
-------------------------------- ----------------------------------------
Priority Healthcare Corporation Executive
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EXHIBIT A
Executive Duties
President and Chief Executive Officer
Executive shall perform the duties and responsibilities and shall have
the responsibilities and powers as shall be determined from time to
time. All such duties, responsibilities and/or powers as may reasonably
assigned in furtherance of Executive's responsibilities and the business
requirements of Company shall be subject to the order, direction and
supervision of any superior officers of the Company. Executive's duties
include but are not limited to:
POSITION SUMMARY:
. Oversee Human Resources Management and activities for
the Company and all its subsidiaries, divisions, etc.,
including but not limited to:
. compensation and benefits management,
. training and organizational development;
. corporate communications, including IntraNet and
other in-house communications;
. support/enhancement of the Vision, Mission and
Culture of the Company.
. Serve as General Counsel to the Company and its
subsidiaries, divisions, etc., including:
. Legal representation of the Company before
appropriate legal tribunals, governmental
agencies and authorities;
. Review and advice to Company employees regarding
contractual relationships, managed care, vendor,
real estate, labor agreements, and all other
legal documents and agreements obligating the
Company to actions, financial commitments, legal
obligations, etc.
. Selection and management of outside legal and
other resources necessary to manage the legal
activities, defend legal actions, etc.
. Review and advice to Company and its employees
regarding all applicable laws, regulations
and/or accreditation and licensing obligations.
. Coordinate representation of Company by
lobbyists and other consultants and management
of governmental relations.
. Mergers, acquisitions and divestitures.
. All other matters pertaining to legal issues,
disputes and/or obligations of the Company.
. Serve as the Corporate Secretary to the Company and the
Board of Directors, including:
. Maintenance of appropriate minutes, agendas,
authorizations, governance actions and such
other actions regarding the
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registration, licensure and Board and corporate
committee compliance with all applicable laws
and regulations;
. Investor Relations, including the maintenance of
books and records of the securities of the
corporation, stock option plans, and
communications to investors and capital markets
. Coordinate and provide guidance to the Board of
Directors and the Corporation regarding
compliance with all applicable securities and
corporate regulations and rules.
. Coordinate the Board and Board Committee
Schedules, information to Board and/or Committee
members necessary to discharge their
responsibilities, etc.
. Leadership and Oversight of Payer Relations, including:
. development and implementation of a Company
strategy to develop services and products which
meet the requirements of third party payers
including commercial and governmental payers;
. marketing and sales to Payers, including HMOs,
PPOs, Insurance and Labor Trusts,
Employer-Sponsored Health Plans, Third Party
Payers, Consultants, etc.
. financial accounting and reporting to the
Company and the Payers regarding managed care
services by Company, including the development
and implementation of pricing analysis and
strategies, development of economic and
actuarial utilization models and analytical
tools with which to measure the financial
performance of Payer contracts, etc.
. business development through relationships with
physicians, hospitals, payer medical directors,
payer utilization management staff, disease
management carve out services and companies,
etc.
. Support and Coordinate Business Development activities
associated with Pharmaceutical Manufacturers, Retail
Pharmacies, and Employers and/ or other Third Party
Payers and such other third party entities as may be
identified by Company from time to time.
. Leadership and management of Implementation Services,
including Reimbursement, Verification, New Project
Implementation and Roll Out Teams, Payer Services,
Coding, etc.
. Leadership and management of Company Compliance
activities, including:
. Compliance with all Federal, State and local
laws and regulations;
. Accreditation and ongoing Professional licensure
compliance;
. Safety, training and auditing of compliance
activities, including OSHA, Environmental
safety, Quality Improvement and Assurance, etc.
. All other duties as assigned.
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EXHIBIT D
CHANGE IN CONTROL OF COMPANY
Change of Control of the Company shall be defined as:
(A) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act as in effect from time
to time) of twenty-five percent (25%) or more of either (i) the then outstanding
shares of common stock of the Company or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors; provided, however, that the following acquisitions
shall not constitute an acquisition of control: (i) any acquisition directly
from the Company (excluding an acquisition by virtue of the exercise of a
conversion privilege), (ii) any acquisition by the Company, (iii) any
acquisition by any Executive benefit plan (or related trust) sponsored or
maintained by the Company or any Company controlled by the Company, (iv) any
acquisition by any Company pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or consolidation, the
conditions described in clauses (i), (ii) and (iii) of subsection (C) of this
Section 2 are satisfied, (v) any acquisition by Xxxxxxx X. Xxxxxxx or (vi) upon
the death of Xxxxxxx X. Xxxxxxx, any acquisition triggered by his death by
operation of law, by any testamentary bequest or by the terms of any trust or
other contractual arrangement established by him;
(B) Individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors of the Company (the
"Board"); provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board; or
(C) Approval by the shareholders of the Company of a reorganization, merger
or consolidation, in each case, unless, following such reorganization, merger or
consolidation, (i) more than sixty percent
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(60%) of, respectively, the then outstanding shares of common stock of the
Company resulting from such reorganization, merger or consolidation and the
combined voting power of the then outstanding voting securities of such Company
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the outstanding
Company common stock and outstanding Company voting securities immediately prior
to such reorganization, merger or consolidation in substantially the same
proportions as their ownership, immediately prior to such reorganization, merger
or consolidation, of the outstanding Company stock and outstanding Company
voting securities, as the case may be, (ii) no Person (excluding the Company,
any Executive benefit plan or related trust of the Company or such Company
resulting from such reorganization, merger or consolidation and any Person
beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, twenty-five percent (25%) or more of the
outstanding Company common stock or outstanding voting securities, as the case
may be) beneficially owns, directly or indirectly, twenty-five percent (25%) or
more of, respectively, the then outstanding shares of common stock of the
Company resulting from such reorganization, merger or consolidation or the
combined voting power of the then outstanding voting securities of such Company
entitled to vote generally in the election of directors and (iii) at least a
majority of the members of the board of directors of the Company resulting from
such reorganization, merger or consolidation were members of the Incumbent Board
at the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or
(D) Approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other disposition
of all or substantially all of the assets of the Company, other than to a
Company with respect to which following such sale or other disposition (a) more
than sixty percent (60%) of, respectively, the then outstanding shares of common
stock of such Company and the combined voting power of the then outstanding
voting securities of such Company entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the outstanding Company common stock and outstanding
Company voting securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other disposition, of the outstanding Company common stock and
outstanding Company voting securities, as the case may be, (b) no Person
(excluding the Company and any Executive benefit plan or related trust of the
Company or such Company and any Person beneficially owning, immediately prior to
such sale or other disposition, directly or
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indirectly, twenty-five percent (25%) or more of the outstanding Company common
stock or outstanding Company voting securities, as the case may be) beneficially
owns, directly or indirectly, twenty-five percent (25%) or more of,
respectively, the then outstanding shares of common stock of such Company and
the combined voting power of the then outstanding voting securities of such
Company entitled to vote generally in the election of directors and (c) at least
a majority of the members of the board of directors of such Company were members
of the Incumbent Board at the time of the execution of the initial agreement or
action of the Board providing for such sale or other disposition of assets of
the Company.
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