November 13, 1996
Xxxx X. Xxxxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Dear Xx. Xxxxxxxx:
Reference is made to the Employment Agreement between Health Management,
Inc. ("HMI") and Xxxx X. Xxxxxxxx ("Xxxxxxxx") entered into as of September 9,
1996 (the "Employment Agreement").
This will confirm our agreement that the merger (the "Merger") and other
transactions contemplated by (i) the Merger Agreement dated as of the date
hereof between HMI, Transworld Home HealthCare, Inc. ("Transworld") and a
wholly-owned subsidiary of Transworld, (ii) the Stock Purchase Agreement (the
"Stock Purchase Agreement") dated the date hereof between HMI and Transworld and
(iii) the Debt Purchase Agreement dated the date hereof between Transworld and
HMI's senior lenders will not constitute a "Change in Control" as such term is
used in the Employment Agreement and will not constitute a material reduction in
the scope and/or authority of Xxxxxxxx'x duties with HMI within the meaning of
the Employment Agreement, and Xxxxxxxx agrees to remain employed with HMI
through June 30, 1998, provided that notwithstanding all other agreements and
understandings, including those contained in the above documents, the following
conditions are met (the payments specified in clauses (i), (ii) and (iii) below
are subject to the requirement that Xxxxxxxx'x employment shall not have been
terminated prior to the scheduled date of the payment by HMI for "cause" (as
defined in the Employment Agreement) or voluntarily by Xxxxxxxx): (i) upon the
closing under the Stock Purchase Agreement, but in any event no later than
December 21, 1996, HMI shall pay Xxxxxxxx $50,000 by check; (ii) on November 13,
1997, HMI shall pay Xxxxxxxx $50,000 by check; (iii) upon consummation of the
Merger, Transworld shall issue to Xxxxxxxx stock options for 50,000 shares of
Transworld common stock at an exercise price equal to the fair market value of
Transworld's common stock on the effective date of the Merger, which options
will vest (provided that Xxxxxxxx is employed by HMI on the applicable vesting
date) one-third upon issuance, one-third on the first anniversary of issuance
and one-third on the second anniversary of issuance; (iv) after termination of
Xxxxxxxx'x employment, the provisions of paragraph 17(a)(1) of the Employment
Agreement shall be deemed null and void and shall not be enforceable against
Xxxxxxxx; (v) Xxxxxxxx shall continue to receive during his employment with HMI
through June 30, 1998 the same base salary, bonus eligibility and employee
benefits as set forth in the Employment Agreement; (vi) if for any reason
Xxxxxxxx'x employment with HMI is terminated by
Xxxx X. Xxxxxxxx Page 2
HMI without "cause" (as defined in the Employment Agreement) at any time, either
prior to, on or after June 30, 1998, or Xxxxxxxx voluntarily elects to terminate
employment with HMI at any time on or after June 30, 1998 or at such earlier
time if there is a material reduction in the scope and/or authority of his
duties, HMI shall continue to pay Xxxxxxxx an amount equal to Xxxxxxxx'x base
salary for a period of twelve months (such amounts to be in lieu of and not in
addition to other amounts payable under the Employment Agreement), payable in
periodic installments in accordance with HMI's regular payroll practices (it
being understood that Xxxxxxxx shall have no obligation to seek or accept other
work during this period and his acceptance of other work shall not cause his
payments to be reduced); (vii) the employment situs provisions as set forth in
paragraph 3 of the Employment Agreement shall not be changed; (viii) Transworld
and HMI shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of Transworld or HMI to expressly assume and agree to perform its
obligations under this Agreement; and (ix) Xxxxxxxx will continue to serve as
Chief Financial Officer and Executive Vice President of HMI with the same duties
and responsibilities such position had prior thereto, and such duties and
responsibilities shall not be reduced in scope or authority. Any payments to
which Xxxxxxxx is entitled hereunder shall be subject to withholding, social
security, payroll and other applicable taxes and deductions.
Except as set forth above, the Employment Agreement shall remain in full
force and effect.
Very truly yours,
Health Management, Inc.
By: /s/ W. Xxxxx Xxxxx
Name: W. Xxxxx Xxxxx
Title: Chief Executive Officer
Accepted and agreed to:
Xxxx X. Xxxxxxxx
/s/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx Page 3
Guaranty
Transworld agrees that if the Merger occurs, Transworld will guarantee the
payment of all monies due or that may become due to Xxxxxxxx from HMI hereunder.
Transworld Home HealthCare, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
