Exhibit 10.15
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of July 1, 1997, between HEALTHCARE
FINANCIAL PARTNERS, INC., a Delaware corporation (the "Corporation"), and XXXXX
X. XXXXX (the "Executive").
W I T N E S S E T H:
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The Executive is the Treasurer and Chief Accounting Officer for the
Corporation and possesses an intimate knowledge of the business and affairs of
the Corporation. The Corporation recognizes the Executive's contribution to the
growth and success of the Corporation and desires to assure to the Corporation
the continued benefits of the Executive's expertise and knowledge on the terms
herein provided. The Executive, in turn, desires to continue in full-time
employment with the Corporation on the terms provided herein.
Accordingly, in consideration of the mutual covenants and representations
contained herein, and pursuant to the terms of the letter dated October 1, 1996
furnished by the Corporation to Executive, the parties agree as follows:
1. Full-Time Employment of Executive.
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1.1 Duties and Status.
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(a) The Corporation hereby engages the Executive as a full-time
Treasurer and Chief Accounting Officer for the period specified in Paragraph 4
(the "Employment Period"), and the Executive accepts such employment, on the
terms and conditions set forth in this Agreement. During the Employment Period,
the Executive shall, subject at all times to the direction and review of the
Executive Committee of the Board of Directors of the Corporation (hereinafter
the "Board"), be entitled to exercise such authority and perform such accounting
and other duties as are commensurate with the authority being exercised and
duties being performed by the Executive for the Corporation and its subsidiaries
and affiliates immediately prior to the effective date of this Agreement. The
Corporation shall in no event diminish Executive's duties and responsibilities
at any time after the date of this Agreement and throughout the Employment
Period.
(b) During the Employment Period, the Executive shall (i) devote her
full time and efforts to the business of the Corporation and its affiliates and
will not engage in consulting work or any trade or business for her own account
or for or on behalf of any other person, firm or corporation or any other
activity which, in the reasonable judgment of the Board, competes, conflicts or
interferes with the performance of her duties hereunder in any way, and (ii)
accept and perform any and all other duties assigned to her by the Board,
provided that the performance of such duties shall not be inconsistent with, or
in any way diminish, the scope and significance to the Corporation of the duties
provided for in subparagraph (a) of this Paragraph 1.1.
(c) The primary location from which the Executive shall be required to
perform the services and duties provided for in subparagraph (a) of this
Paragraph 1.1 shall be at the Company's main office in Chevy Chase, Maryland or
such other location in the greater Washington metropolitan area as the Board may
designate.
1.2 Compensation and General Benefits. As compensation for her
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services under this Agreement, the Executive shall be compensated as follows:
(a) Commencing July 1, 1997, the Corporation shall pay the Executive
an annual salary of $175,000. Commencing January 1, 1998, and on January 1 of
each year thereafter, the Corporation shall pay the Executive an annual salary
which is not less than the greater of (i) $175,000 or (ii) any subsequently
established higher annual base salary, in either case increased annually by not
less than 50% of the annual increase in the Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI-W), Washington, D.C. All Items (1967 -100)
published by the Bureau of Labor Statistics, U.S. Department of Labor or any
comparable successor index. Such salary shall be payable in periodic equal
installments which are no less frequent than the periodic installments relating
to employees of the Company generally.
(b) The Executive shall be eligible to participate in such profit-
sharing, 401(k), insurance, stock option, bonus, incentive and performance award
programs as are in effect and are available to officers of comparable rank;
provided, however, that nothing in this Agreement shall preclude the Board from
(i) providing special benefits or making awards to other employees for
meritorious service by them, which benefits or awards are in excess of those
granted to the Executive, and (ii) discontinuing any such plan or program at any
time that the Board determines that such discontinuance is in the best interests
of the Corporation. In addition, the Corporation shall reimburse Executive for
forty (40) hours of continuing professional education per calendar year.
(c) The Executive shall be entitled to receive and obtain the benefit
of employee benefits, including without limitation, pension and supplemental
retirement plans and programs, disability insurance, group and other life
insurance programs, sickness, accident and health insurance programs, and
perquisites provided by the Corporation to executives with comparable authority
or duties (and in any event not less than those provided to executives with
junior authority or duties), provided, however, that nothing in this Agreement
shall preclude the Board from discontinuing any such plan or program at any time
that the Board determines that such discontinuance is in the best interests of
the Corporation.
(d) Executive shall be entitled to take annual paid vacation of
durations determined in her reasonable discretion.
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2. Competition, Confidential Information.
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2.1 Employee's Access to Confidential and Proprietary Information.
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(a) The Executive and the Corporation recognize that due to the nature
of her prior association with the Corporation and its affiliates and of her
engagements hereunder, and the relationship of the Executive to the Corporation
and its affiliates both in the past as an executive and in the future hereunder,
the Executive has had access to and has acquired, will have access to and will
acquire, and has assisted in and may assist in developing, confidential and
proprietary information relating to the business and operations of the
Corporation and its affiliates, including, without limiting the generality of
the foregoing, information with respect to present and proposed projects,
transactions completed and under negotiation, financing and sales and marketing
methods. The Executive acknowledges that such information has been and will
continue to be of vital importance to the business of the Corporation and its
affiliates and that disclosure of it to or its use by others could cause
substantial loss to the Corporation. The Executive and the Corporation also
recognize that an important part of the Executive's duties will be to develop
good will for the Corporation and its affiliates through her personal contact
with customers, agents and others having business relationships with the
Corporation and its affiliates, and that there is a danger that this good will,
a proprietary asset of the Corporation and its affiliates, may follow the
Executive if and when her relationship with the Corporation is terminated. The
Executive accordingly agrees as follows:
2.2 Non-Competition and Non-Solicitation.
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(a) For purposes of this Agreement, the "Non-Competition Period" shall
included (i) the Employment Period (as defined in Paragraph 4.1 of this
Agreement) and (ii) the twelve (12) months immediately following the termination
of Executive's employment with the Corporation pursuant to Paragraph 4.2(a) or
(b) of this Agreement. The term "Territory" shall include all states of the
United States, the District of Columbia, and all United States territories and
possessions.
(b) For purposes of this Agreement, the term "compete" shall mean to
own or otherwise participate in, any business enterprise that provides financing
to "small- to medium-size health care companies." The term small- to medium-
size health care companies" means a health care company with annual revenues up
to and including $250 million, and the term "business of the HCFP Companies"
means engaging in any and all financing, management, consulting, or advisory
activities directed to the small-to-medium size health care company market.
(c) For purposes of this Agreement, the term "HCFP Companies" shall
mean and include the Corporation, HCFP Funding, Inc., a Delaware corporation,
and any other corporations, partnerships, limited liability companies, firms,
associations or other entities in
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which the Corporation has (directly or indirectly) a more than fifty percent
(50%) equity ownership interest.
(d) During the Non-Competition Period, Executive will not, directly or
indirectly, either individually or as owner, partner, agent, joint venturer,
independent contractor, shareholder, security holder, employee, consultant or
otherwise, except for the account of and on behalf of HCFP Companies or their
affiliates, compete with the HCFP Companies or any of their affiliates in any
manner whatsoever within the Territory. This prohibition, however, shall apply
only if Executive's employment is terminated pursuant to Paragraphs (a) or (b)
of Paragraph 4.2 of this Agreement. During the Employment Period, Executive
shall report and make available to the HCFP companies in a prompt and timely
manner all business opportunities which are within the scope of the business of
the HCFP Companies or their affiliates and which becomes available to Employee
or of which she has knowledge.
(e) During the Non-Competition Period, Executive will not directly, or
indirectly, either individually or as owner, partner, agent, joint venturer,
independent contractor, shareholder, security holder, employee, consultant or
otherwise (except during the Employment Period for the account and on behalf of
the HCFP Companies or their affiliates), solicit, attempt to solicit or
otherwise engage the services of, or become associated in any business that may
compete with the HCFP Companies or their subsidiaries or affiliates, with any
person who was an employee, officer or director of the HCFP Companies or any of
their affiliates during the 12 months preceding the date Executive's employment
with the Corporation was terminated.
(f) Anything in this Agreement to the contrary notwithstanding,
nothing in this Paragraph 2.2 shall be construed to prevent Executive from
owning , as an investment, not more than 1% of a class of equity securities
issued by any company that competes with the HCFP Companies or their affiliates
and that is publicly traded and has a class of securities registered under
Paragraph 12 of the Securities Exchange Act of 1934.
2.3 Trade Secrets. Employee will keep confidential any trade secrets
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or confidential or proprietary information of the HCFP Companies and their
affiliates which are known to her or which hereafter may become known to her as
a result of her employment or association with the Corporation and shall not at
any time directly or indirectly disclose any such information to any person,
firm or corporation, or use the same in any way other than in connection with
the business of the HCFP Companies and their affiliates during and at all times
after the expiration of the Employment Period. For purposes of this Agreement,
"trade secrets or confidential proprietary information" means information unique
to the HCFP Companies or any available from sources outside the HCFP Companies
or any of their affiliates or typical of industry practice.
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3. The Corporation's Remedies for Breach. It is recognized that damages
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in the event of a breach of Paragraph 2 by Employee would be difficult, if not
impossible, to ascertain, and it is therefore agreed that the Corporation, in
addition to and without limiting any other remedy or right if may have, shall
have the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any such breach, and Employee hereby waives
any and all defenses she may have on the ground of lack of jurisdiction or
competence of the court to grant such an injunction or other equitable relief.
The existence of this right shall not preclude any other rights and remedies at
law or in equity which the Corporation may have.
4. Employment Period.
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4.1 Duration and Extension.
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(a) The Employment Period shall commence on the date of this Agreement
and shall continue until the earlier of (i) the close of business on the day
immediately preceding the third annual anniversary of the date of this
Agreement, subject to extension pursuant to Paragraph 4.1(b), (ii) the
Executive's normal retirement date under the Corporation's retirement plan as in
effect on the date of this Agreement ("Normal Retirement Date"),or (iii) the
death or Total Disability of the Executive.
(b) On the first annual anniversary of the date of this Agreement, and
on each annual anniversary date thereafter, the Employment Period shall be
automatically extended for an additional one year period (but not beyond the
Normal Retirement Date, death or Total Disability of the Executive), unless the
Corporation or the Executive notifies the other in writing prior to such
anniversary date of its or her intention not to so extend the Employment Period.
4.2 Termination of Employment.
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(a) The Executive may terminate her employment under this Agreement
upon 90 days prior written notice to the Corporation. During such period, upon
the request of the Corporation the Executive will perform her regular duties,
and in addition will perform such consulting services as may be requested by the
Corporation to assist in the orderly transition of her duties to another person
or persons and/or to assist in the training of her replacement.
(b) The Corporation may terminate the employment of the Executive for
cause (as defined in Paragraph 4.4(a)) and, upon such termination, the
Corporation will have no further obligation to the Employee. The Corporation
shall not be entitled to terminate the employment of the Executive without
cause. In the event, however that the Corporation or any successor upon a Sale
of the Corporation (as defined in Paragraph 4.4(c)) terminates Executive's
employment without cause (as defined in Paragraph 4.4(a)), Executive shall be
paid a lump sum payment in cash, immediately upon the termination without cause,
equal to the aggregate
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compensation and benefits as calculated pursuant to Paragraph 1.2 at the annual
salary rate in effect at the time of termination, with such lump sum payment to
be equal to the aggregate compensation that would otherwise be payable to
Executive for the then remaining portion of the Employment Period (i.e. 2 1/2
years if terminated without cause on January 1, 1998). If the successor upon a
Sale of the Corporation fails to make such lump sump payment upon a termination
of Executive without cause, the Corporation shall be obligated to immediately
make such payment.
(c) The employment of the Executive will be automatically terminated
by her death or Total Disability. In the event that the Executive dies while
this Agreement is in effect, the Corporation will pay to the Executive's spouse
(or if she is not married at the time of her death, to her estate) compensation
under Paragraph 1.2 through the end of the month in which her employment
terminated.
(d) The Corporation shall have no right to terminate Executive's
employment other than in strict accordance with the terms of this Paragraph 4.2.
4.3 Return of Corporation Property.
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The Executive authorizes the Corporation to withhold any amounts due
to her until all property of the Corporation or entrusted to the Executive by
the Corporation at any time during her employment has been returned to the
Corporation. The Executive authorizes the Corporation to deduct from any
amounts otherwise due to her, an amount equal to any outstanding advances made
by the Corporation to her or on her behalf, any obligations she incurred for
which she is responsible, and any amounts otherwise owed by her to the
Corporation.
4.4 Definitions. The following words shall have the specified
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meanings when used in the Paragraphs specified.
(a) In this Agreement, the term "cause" means an action or failure to
act by the Executive constituting (i) fraud, misappropriation or intentional
material damage in the property or business of the Corporation, the commission
of an act of deliberate and material dishonesty, a material breach of this
Agreement, commission of a crime resulting in a fine of $10,000.00 or more
and/or imprisonment of six months or more, or causing the Corporation to commit
such a crime or (ii) continuance of willful and repeated failure by the
Executive to perform her duties in compliance with this Agreement after written
notice to the Executive by the Board of Directors specifying such failure and
the failure to cure such deficient performance within 30 days after receipt of
such written notice; provided that any such "cause" shall have been found by a
majority vote of the entire Board of Directors of the Corporation (and not
merely the Executive Committee) after at least 30 days' written notice to the
Executive specifying the cause proposed to be claimed and after an opportunity
for the Executive to be heard at a meeting of such Board of Directors.
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(b) In this Agreement, the term "Total Disability" means any
incapacity, injury, illness or other physical or mental condition of the
Executive which in the opinion of a majority of the members of the entire Board
of Directors (and not merely the Executive Committee) results in the inability
of the Executive, for a period of six months or more during any twelve month
period, to perform substantially the duties performed or required to be
performed hereunder prior to such disability.
(c) "Sale of the Corporation" shall mean a transaction in which an
Independent Third Party or a group of Independent Third Parties acquires (1) all
or substantially all of the issued and outstanding capital stock of the
Corporation, whether by merger, consolidation or sale or transfer of stock, or
(2) all or substantially all of the Corporation's assets.
(d) "Independent Third Party" shall mean any person or entity who,
immediately before the contemplated transaction, does not own in excess of 5% of
the Corporation's common stock on a fully diluted basis (a "5% Owner"), who is
not controlling, controlled by or under common control with any 5% Owner, and
who is not a family member of any 5% Owner.
5. Indemnification. To the maximum extent permitted by law and
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the Corporation's articles of incorporation and by-laws, the Corporation shall
indemnify, save and hold the Executive harmless from and against any and all
claims and expenses, including, but not limited to, attorneys', accountants' and
experts' fees, arising out of or in connection with the Executive's duties under
this Agreement.
6. Legal Costs. If the Corporation (and/or its successors upon a
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Sale of the Corporation) shall fail to pay or provide for payment of any amounts
required to be paid or provided for hereunder at any time, the Executive shall
be entitled to consult with independent counsel, and the Corporation agrees to
pay the reasonable fees and expenses of such counsel for the Executive in
advising her in connection therewith or in bringing any proceedings, or in
defending any proceedings, involving the Executive's rights under this
Agreement, with such right to reimbursement to be immediate upon the presentment
by the Executive of written xxxxxxxx for such reasonable fees and expenses. The
Executive shall be entitled to interest at the average prime rate as set forth
in the money rates column of the Wall Street Journal for any payments of such
expenses, or any other payments under this Agreement, that are overdue.
7. Notices. Any notices, requests, demands and other communications
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provided for by this Agreement shall be sufficient if in writing and personally
delivered or sent by registered or certified mail to the Executive at the last
address she has filed in writing with the Corporation or, in the case of the
Corporation, at its principal executive offices.
8. Binding Agreement. This Agreement shall be effective as of the
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date hereof and shall be binding upon and inure to the benefit of the Executive,
her executors, administrators and personal representatives. The rights and
obligations of the Corporation under
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this Agreement shall inure to the benefit of and shall be binding upon any
successor of the Corporation, provided, that this Agreement may not be assigned
by the Corporation without the consent of the Executive, and in the case of a
successor by transfer of all or substantially all of the assets of the
Corporation, or any other successor in which the Corporation does not cease to
exist by operation of the transaction in question as a matter of law, the
Corporation shall not be relieved of its obligations hereunder.
9. Specific Performance. In the event of any breach of any
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provision of this Agreement, including without limitation, Paragraph 4 hereof,
the non-breaching party shall be entitled to seek a decree of specific
performance thereof against the breaching party. Such remedy, however, shall be
cumulative and nonexclusive and shall be in addition to any other remedy to
which the parties may be entitled.
10. Entire Agreement. This Agreement constitutes the entire
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understanding of the Executive and the Corporation with respect to the subject
matter hereof and supersedes any and all prior understandings written or oral.
This Agreement may not be changed, modified, or discharged orally, but only by
an instrument in writing signed by the parties. This Agreement shall be
governed by the laws of the State of Maryland and the invalidity or
unenforceabilility of any provision hereof shall in no way affect the validity
or enforceability of any other provision.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
ATTEST: CORPORATION:
HEALTHCARE FINANCIAL
PARTNERS, INC.
Xxxxxx X. Xxxxxx By: Xxxxxx X. Xxxxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxxx, Xx. (SEAL)
Title: Secretary Title: Executive Vice President
WITNESS: EXECUTIVE:
Xxxxxxx X. Xxxxxxxxx Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx (SEAL)
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