EXHIBIT 10.2
CHANGE IN CONTROL
SEVERANCE COMPENSATION
AND
RESTRICTIVE COVENANT AGREEMENT
THIS SEVERANCE COMPENSATION AND RESTRICTIVE COVENANT AGREEMENT (the
"Agreement") is dated as of November 7, 2005 between MATRIA HEALTHCARE, INC., a
Delaware corporation (the "Company"), and XXXXXXX X. XXXXXXX, M.D. (the
"Executive").
WHEREAS, the Company, has determined that it is appropriate to reinforce
and encourage the continued attention and dedication of members of the Company's
management, including the Executive, to their assigned duties without
distraction in potentially disturbing circumstances arising from the possibility
of a Change in Control (as hereinafter defined) of the Company; and
WHEREAS, the severance benefits payable by the Company to Executive as
provided herein are in part intended to ensure that Executive receives
reasonable compensation given the specific circumstances of Executive's
employment history with the Company;
NOW, THEREFORE, in consideration of their respective obligations to one
another set forth in this Agreement, and other good and valuable consideration,
the receipt, sufficiency and adequacy of which the parties hereby acknowledge,
the parties to this Agreement, intending to be legally bound, hereby agree as
follows:
1. Term. This Agreement shall terminate, except to the extent that
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any obligation of the Company hereunder remains unpaid as of such time, upon the
earliest of (i) the Date of Termination (as hereinafter defined) of the
Executive's employment with the Company as a result of the Executive's death,
Disability (as defined in Section 3(b)) or Retirement (as defined in Section
3(c)), by the Company for Cause (as defined in Section 3(d)) or by the Executive
other than for Good Reason (as defined in Section 3(e)); and (ii) three years
from the date of a Change in Control if the Executive's employment with the
Company has not terminated as of such time.
2. Change in Control. For purposes of this Agreement, "Change in
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Control" shall mean changes in the ownership of a corporation, changes in the
effective control of a corporation, changes in ownership of a substantial
portion of a corporations assets and a disposition of a substantial portion of a
corporation's assets, all as defined below:
(a) A change in the ownership of a corporation occurs on the date
that any one person, or more than one person acting as a group,
acquires ownership of stock of that corporation which, together
with stock held by such person or group, represents more than
fifty percent (50%) of the total fair market value or total
voting power of the stock of such corporation. An increase in
the percentage of stock owned by any one person, or persons
acting as a group, as a result of a transaction in which the
corporation acquires its stock in exchange for property will be
treated as an acquisition of stock.
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(b) A change in the effective control of a corporation occurs on the
date that either: any one person, or more than one person acting as a group
becomes the beneficial owner of stock of the corporation possessing twenty-five
percent (25%) or more of the total voting power of the stock of such
corporation; or a majority of members of the corporation's board of directors is
replaced during any 24 month period by directors whose appointment or election
is not endorsed by at least two-thirds (2/3) of the members of the corporation's
board of directors who were directors prior to the date of the appointment or
election of the first of such new directors.
(c) A change in the ownership of a substantial portion of a
corporation's assets occurs on the date that any one person, or more than one
person acting as a group, acquires (or has acquired during the 12 month period
ending on the date of the most recent acquisition by such person or persons)
assets from the corporation that have a total fair market value equal to or more
than one-half (1/2) of the total fair market value of all of the assets of the
corporation immediately prior to such acquisition or acquisitions. The transfer
of assets by a corporation is not treated as a change in the ownership of such
assets if the assets are transferred: to a shareholder of the corporation
(immediately before the asset transfer) in exchange for such shareholder's
capital stock of the corporation having a fair market value approximately equal
to the fair market value of such assets; or to an entity, fifty percent (50%) or
more of the total value or voting power of which is owned, directly or
indirectly, by the corporation.
(d) A disposition of a substantial portion of a corporation's assets
occurs on the date that the corporation transfers assets by sale, lease,
exchange, distribution to shareholders, assignment to creditors, foreclosure or
otherwise, in a transaction or transactions not in the ordinary course of the
corporation's business (or has made such transfers during the 12 month period
ending on the date of the most recent transfer of assets) that have a total fair
market value equal to or more than one-half (1/2) of the total fair market value
of all of the assets of the corporation as of the date immediately prior to the
first such transfer or transfers. The transfer of assets by a corporation is not
treated as a disposition of a substantial portion of the corporation's assets if
the assets are transferred to an entity, fifty percent (50%) or more of the
total value or voting power of which is owned, directly or indirectly, by the
corporation.
For purposes of the provision of this Agreement defining "Change in Control,"
(i) references to the Company in this Agreement include the Delaware corporation
known as Matria Healthcare, Inc. as of the date of execution of this Agreement,
and any corporation which is the legal successor to such corporation by virtue
of merger or share exchange; and (ii) the terms "person," "acting as a group"
and "ownership" shall have the meanings prescribed in Sections 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3
promulgated thereunder; provided, however, that in any merger, consolidation or
share exchange in which less than fifty percent (50%) of the outstanding voting
securities of the Company or its successor corporation are held by the former
shareholders of the Company, the shareholders of the other parties to the
transaction shall be deemed to have acted as a group that acquired ownership of
more than fifty percent (50%) of the outstanding voting securities of the
Company, resulting in a change in ownership under Section 2(a) above.
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3. Termination Following Change in Control.
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(a) General. If the Executive is still an employee of the
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Company at the time of a Change in Control, the Executive shall be entitled to
the compensation and benefits provided in Section 4 upon the subsequent
termination of the Executive's employment with the Company by the Executive or
by the Company during the term of this Agreement, unless such termination is as
a result of (i) the Executive's death; (ii) the Executive's Disability; (iii)
the Executive's Retirement; (iv) the Executive's termination by the Company for
Cause; or (v) the Executive's decision to terminate employment other than for
Good Reason.
(b) Disability. The term "Disability" as used in this
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Agreement shall mean termination of the Executive's employment by the Company as
a result of the Executive's incapacity due to physical or mental illness,
provided that the Executive shall have been absent from his duties with the
Company on a full-time basis for six consecutive months and such absence shall
have continued unabated for 30 days after Notice of Termination as described in
Section 3(f) is thereafter given to the Executive by the Company.
(c) Retirement. The term "Retirement" as used in this
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Agreement shall mean termination of the Executive's employment by the Company
based on the Executive's having attained age 65 or such later retirement age as
shall have been established pursuant to a written agreement between the Company
and the Executive. Termination of Executive's employment at a time when
Executive is eligible to receive benefits under the Company's Retirement Benefit
Award or the Company's Protective Umbrella for Lifelong Security of Employees
Program shall not constitute Retirement unless Executive shall have attained
such age.
(d) Cause. The term "Cause" for purposes of this Agreement
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shall mean the Company's termination of the Executive's employment on the basis
of criminal or civil fraud on the part of the Executive involving a material
amount of funds of the Company. Notwithstanding the foregoing, the Executive
shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership
of the Company's Board of Directors at a meeting of the Board called and held
for such purpose (after reasonable notice to the Executive and an opportunity
for the Executive, together with the Executive's counsel, to be heard before the
Board) finding that in the good faith opinion of the Board the Executive was
guilty of conduct set forth in the first sentence of this Section 3(d) and
specifying the particulars thereof in detail. For purposes of this Agreement
only, the preparation and filing of fictitious, false or misleading claims in
connection with any federal, state or other third party medical reimbursement
program, or any other violation of any rule or regulation in respect of any
federal, state or other third party medical reimbursement program by the Company
or any subsidiary of the Company shall not be deemed to constitute "criminal
fraud" or "civil fraud."
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(e) Good Reason. For purposes of this Agreement, "Good
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Reason" shall mean any of the following actions taken by the Company without the
Executive's express written consent:
(i) The assignment to the Executive by the Company of
duties inconsistent with, or a material adverse alteration of the powers
and functions associated with, the Executive's position, duties,
responsibilities and status with the Company prior to a Change in
Control, or an adverse change in the Executive's titles or offices as in
effect prior to a Change in Control, or any removal of the Executive
from or any failure to re-elect the Executive to any of such positions,
except in connection with the termination of his employment for
Disability, Retirement or Cause or as a result of the Executive's death
or by the Executive other than for Good Reason;
(ii) A reduction in the Executive's base salary as in
effect on the date hereof or as the same may be increased from time to
time during the term of this Agreement or the Company's failure to
increase (within 12 months of the Executive's last increase in base
salary) the Executive's base salary after a Change in Control in an
amount which at least equals, on a percentage basis, the average annual
percentage increase in base salary for all corporate officers of the
Company effected in the preceding 36 months;
(iii) Any failure by the Company to continue in effect
any benefit plan, program or arrangement (including, without limitation,
any profit sharing plan, group annuity contract, group life insurance
supplement, or medical, dental, accident and disability plans) in which
the Executive was eligible to participate at the time of a Change in
Control (hereinafter referred to as "Benefit Plans"), or the taking of
any action by the Company which would adversely affect the Executive's
participation in or materially reduce the Executive's benefits under any
such Benefit Plan, unless a comparable substitute Benefit Plan shall be
made available to the Executive, or deprive the Executive of any fringe
benefit enjoyed by the Executive at the time of a Change in Control;
(iv) Any failure by the Company to continue in effect
any incentive plan or arrangement (including, without limitation, any
bonus or contingent bonus arrangements and credits and the right to
receive performance awards and similar incentive compensation benefits)
in which the Executive is participating at the time of a Change in
Control (or any other plans or arrangements providing him with
substantially similar benefits) (hereinafter referred to as "Incentive
Plans") or the taking of any action by the Company which would adversely
affect the Executive's participation in any such Incentive Plan or
reduce the Executive's benefits under any such Incentive Plan, expressed
as a percentage of his base salary, by more than five percentage points
in any fiscal year as compared to the immediately preceding fiscal year,
or any action to reduce Executive's bonuses under any Incentive Plan by
more than 20% of the average annual bonus previously paid to Executive
with respect to the preceding three fiscal years;
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(v) Any failure by the Company to continue in effect
any plan or arrangement to receive securities of the Company (including,
without limitation, the Company's stock incentive and long-term
incentive plans, Employee Stock Purchase Plan and any other plan or
arrangement to receive and exercise stock options, stock appreciation
rights, restricted stock or grants thereof) in which the Executive is
participating or has the right to participate in prior to a Change in
Control (or plans or arrangements providing him with substantially
similar benefits) (hereinafter referred to as "Securities Plans") or the
taking of any action by the Company which would adversely affect the
Executive's participation in or materially reduce the Executive's
benefits under any such Securities Plan, unless a comparable substitute
Securities Plan shall be made available to the Executive;
(vi) A relocation of the Company's principal executive
offices to a location more than ten (10) miles outside of Marietta,
Georgia, or the Executive's relocation to any place other than the
Company's principal executive offices, except for required travel by the
Executive on the Company's business to an extent substantially
consistent with the Executive's business travel obligations immediately
prior to a Change in Control;
(vii) Any failure by the Company to provide the
Executive with the number of paid vacation days (or compensation
therefor at termination of employment) accrued to the Executive through
the Date of Termination;
(viii) Any material breach by the Company of any
provision of this Agreement;
(ix) Any failure by the Company to obtain the
assumption of this Agreement by any successor or assign of the Company
effected in accordance with the provisions of Section 7(a) hereof;
(x) Any purported termination of the Executive's
employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of Section 3(f), and for purposes of this
Agreement, no such purported termination shall be effective; or
(xi) Any proposal or request by the Company after the
Effective Date to require that the Executive enter into a
non-competition agreement with the Company where the terms of such
agreement as to its scope or duration are greater than the terms set
forth in Section 5 hereof.
(f) Notice of Termination. Any termination of the
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Executive's employment by the Company for a reason specified in Section
3(b), 3(c) or 3(d) shall be communicated to the Executive by a Notice of
Termination prior to the effective date of the termination. For purposes
of this Agreement, a "Notice of Termination" shall mean a written notice
which shall indicate whether such termination is for the reason set
forth in Section 3(b), 3(c) or 3(d) and which sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so
indicated. For purposes of this Agreement, no termination of the
Executive's employment by the Company shall constitute a termination for
Disability, Retirement or Cause unless such termination is preceded by a
Notice of Termination.
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(g) Date of Termination. "Date of Termination" shall mean
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(a) if the Executive's employment is terminated by the Company for
Disability, 30 days after a Notice of Termination is given to the
Executive (provided that the Executive shall not have returned to the
performance of the Executive's duties on a full-time basis during such
30-day period) or (b) if the Executive's employment is terminated by the
Company or the Executive for any other reason, the date on which the
Executive's termination is effective; provided that, if within 30 days
after any Notice of Termination is given to the Executive by the Company
the Executive notifies the Company that a dispute exists concerning the
termination, the Date of Termination shall be the date the dispute is
finally determined whether by mutual agreement by the parties or upon
final judgment, order or decree of a court of competent jurisdiction
(the time for appeal therefrom having expired and no appeal having been
perfected).
4. Compensation and Benefits upon Termination of Employment.
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(a) If the Company shall terminate the Executive's
employment after a Change in Control other than pursuant to Section
3(b), 3(c) or 3(d) and Section 3(f), or if the Executive shall terminate
his employment for Good Reason, then the Company shall pay to the
Executive, as severance compensation and in consideration of the
Executive's adherence to the terms of Section 5 hereof, the following:
(1) On the Date of Termination, the Company shall
become liable to the Executive for an amount equal to two times the
Executive's annual base compensation on the date of the Change in
Control, which amount shall be paid to the Executive in cash on or
before the fifth day following the Date of Termination.
(2) For a period of two years following the Date of
Termination, the Executive and anyone entitled to claim under or through
the Executive shall be entitled to all benefits under the group
hospitalization plan, health care plan, dental care plan, life or other
insurance or death benefit plan, or other present or future similar
group employee benefit plan or program of the Company for which key
executives are eligible at the date of a Change in Control, to the same
extent as if the Executive had continued to be an employee of the
Company during such period and such benefits shall, to the extent not
fully paid under any such plan or program, be paid by the Company.
(3) For the shorter of a period of one year after the
Date of Termination or expiration of the lease term, Company shall allow
the Executive to utilize for his business and personal use any Company
leased automobile furnished to him immediately prior to the Change in
Control and shall reimburse the Executive for the maintenance and repair
costs of such automobile and extend full insurance coverage relating to
such automobile in favor of the Executive, as additional named insured,
during such period. In addition, the Executive shall be entitled, at the
Executive's sole discretion, to exercise any option to acquire such
automobile pursuant to the terms which may be provided in the lease
agreement for the automobile in question. For the balance of the period
of one year after the Date of Termination (or for the entire one-year
period if Executive was not being furnished a leased automobile on the
Date of Termination), the Company shall pay the Executive a car
allowance (at the rate of $1,500 per month or at such higher rate as is
in effect for Executive's position immediately prior to a Change in
Control or the Date of Termination) and extend full insurance coverage
for the Executive's primary automobile in favor of the Executive, as
additional named insured, during such period.
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(b) The parties hereto agree that the payments provided in
Section 4(a) hereof are reasonable compensation in light of the Executive's
services rendered to the Company and in consideration of the Executive's
adherence to the terms of Section 5 hereof. Neither party shall contest the
payment of such benefits as constituting an "excess parachute payment" within
the meaning of Section 280G(b)(1) of the Code. In the event that the Executive
becomes entitled to the compensation and benefits described in Section 4(a)
hereof (the "Compensation Payments") and the Company has determined, based upon
the advise of tax counsel selected by the Company's independent auditors and
acceptable to the Executive, that, as a result of such Compensation Payments and
any other benefits or payments required to be taken into account under Code
Section 280G(b)(2) ("Parachute Payments"), any of such Parachute Payments must
be reported by the Company as "excess parachute payments" and are therefore not
deductible by the Company, the Company shall pay to the Executive at the time
specified in Section 4(a) above an additional amount (the "Gross-Up Payment")
such that the net amount retained by the Executive, after deduction of any of
the tax imposed on the Executive by Section 4999 of the Code (the "Excise Tax")
and any Federal, state and local income tax and Excise Tax upon the Gross-Up
Payment, shall be equal to the Parachute Payments determined prior to the
application of this paragraph. The value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Company's independent
auditors. For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay Federal income taxes at the highest marginal
rate of Federal income taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income taxes at the highest marginal
rates of taxation in the state and locality of the Executive's residence on the
Date of Termination, net of the maximum reduction in Federal income taxes which
could be obtained from deduction of such state and local taxes. In the event
that the Excise Tax payable by the Executive is subsequently determined to be
less than the amount, if any, taken into account hereunder at the time of
termination of the Executive's employment, the Executive shall repay to the
Company at the time that the amount of such reduction in Excise Tax is finally
determined the portion of the Gross-Up Payment attributable to such reduction
plus interest on the amount of such repayment at the rate provided for in
Section 1274(b)(2)(B) of the Code ("Repayment Amount"). In the event that the
Excise Tax payable by the Executive is determined to exceed the amount, if any,
taken into account hereunder at the time of the termination of the Executive's
employment (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), the Company shall
make an additional Gross-Up Payment in respect of such excess (plus any interest
and penalty payable with respect to such excess) immediately prior to the time
that the amount of such excess is required to be paid by Executive ("Additional
Gross-up"), such that the net amount retained by the Executive, after deduction
of any Excise Tax on the Parachute Payments and any Federal, state and local
income tax and Excise Tax upon the Additional Gross-Up Payment, shall be equal
to the Parachute Payments determined prior to the application of this paragraph.
The obligation to pay any Repayment Amount or Additional Gross-up shall remain
in effect under this Agreement for the entire period during which the Executive
remains liable for the Excise Tax, including the period during which any
applicable statute of limitation remains open.
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(c) The payments provided in Section 4(a) above shall be in
lieu of any other severance compensation otherwise payable to Executive under
any other agreement between Executive and the Company or the Company's
established severance compensation policies; provided, however, that nothing in
this Agreement shall affect or impair Executive's vested rights under any other
employee benefit plan or policy of the Company.
(d) Unless the Company determines that any Parachute
Payments made hereunder must be reported as "excess parachute payments" in
accordance with the third sentence of Section 4(b) above, neither party shall
file any return taking the position that the payment of such benefits
constitutes an "excess parachute payment" within the meaning of Section
280G(b)(1) of the Code. If the Internal Revenue Service proposes an assessment
of Excise Tax against the Executive in excess of the amount, if any, taken into
account at the time specified in Section 4(a), then, if the Company notifies
Executive in writing that the Company elects to contest such assessment at its
expense, unless the Executive waives the right to an Additional Gross-Up
Payment, the Executive (i) shall in good faith cooperate with the Company in
contesting such proposed assessment; and (ii) such Executive shall not settle
such contest without the written consent of the Company. Any such contest shall
be controlled by the Company, provided, however, that the Executive may
participate in such contest.
5. Protective Covenants.
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(a) Definitions.
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This Subsection sets forth the definition of certain capitalized
terms used in Subsections (a) through (f) of this Section 5.
(i) "Competing Business" shall mean a business (other
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than the Company) that, directly or through a controlled subsidiary or through
an affiliate, (a) develops, markets and/or sells (other than at retail) lancets
or lancing devices for sampling blood ("Competing Products"), and/or (b)
provides obstetrical home care services, including, without limitation, programs
for monitoring patients who are at risk of preterm delivery, programs for
managing patients suffering from obstetrical hypertension or diabetes, infusion
therapy services involving drugs to control preterm labor, nursing services and
maternity management services for both low and high risk pregnancies, and/or (c)
provides disease management services for diabetes, congestive heart failure,
coronary artery disease, chronic obstructive pulmonary disease, asthma, cancer,
pregnancy, depression, chronic pain or hepatitis C, including, without
limitation, patient education, risk screening and stratification, case
management and clinical services, or on-line health and wellness services
("Competing Services"). Notwithstanding the foregoing, no business shall be
deemed a "Competing Business" unless, within at least one of the business's
three most recently concluded fiscal years, that business, or a division of that
business, derived more than twenty percent (20%) of its gross revenues or more
than $2,000,000 in gross revenues from the development, marketing or sale of
Competing Products and/or the provision of Competing Services.
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(ii) "Competitive Position" shall mean: (A) the
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Executive's direct or indirect equity ownership (excluding ownership of less
than one percent (1%) of the outstanding common stock of any publicly held
corporation) or control of any portion of any Competing Business; or (B) any
employment, consulting, partnership, advisory, directorship, agency, promotional
or independent contractor arrangement between the Executive and any Competing
Business where the Executive performs services for the Competing Business
substantially similar to those the Executive performed for the Company,
provided, however, that the Executive shall not be deemed to have a Competitive
Position solely because of the Executive's services for a Competing Business
that are not directly related to the sale of Competing Products or the provision
of Competing Services, unless more than thirty-five percent (35%) of the gross
revenues of the Competing Business are derived from the sale of Competing
Products and/or the provision of Competing Services.
(iii) "Covenant Period" shall mean the period of time
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from the date of this Agreement to the date that is two years after the Date of
Termination.
(iv) "Customers" shall mean actual customers, clients,
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referral sources or managed care organizations or actively sought prospective
customers, clients, referral sources or managed care organizations of the
Company (A) during the one year prior to the date of this Agreement and (B)
during the Covenant Period.
(v) "Restricted Territory" shall mean the
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United States.
(b) Limitation on Competition. In consideration of the
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Company's entering into this Agreement, the Executive agrees that during the
Covenant Period, the Executive will not, without the prior written consent of
the Company, anywhere within the Restricted Territory, either directly or
indirectly, alone or in conjunction with any other party, accept, enter into or
take any action in conjunction with or in furtherance of a Competitive Position
(other than action to reject an unsolicited offer of a Competitive Position).
(c) Limitation on Soliciting Customers. In consideration of
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the Company's entering into this Agreement, the Executive agrees that during the
Covenant Period, the Executive will not, without the prior written consent of
the Company, alone or in conjunction with any other party, solicit, divert or
appropriate or attempt to solicit, divert or appropriate on behalf of a
Competing Business with which Executive has a Competitive Position any Customer
located in the Restricted Territory (or any other Customer with which the
Executive had any direct contact on behalf of the Company) for the purpose of
providing the Customer or having the Customer provided with a Competing Product
or Competing Service.
(d) Limitation on Soliciting Personnel or Other Parties. In
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consideration of the Company's entering into this Agreement, the Executive
hereby agrees that he will not, without the prior written consent of the
Company, alone or in conjunction with any other party, solicit or attempt to
solicit any employee, consultant, contractor, independent broker or other
personnel of the Company to terminate, alter or lessen that party's affiliation
with the Company or to violate the terms of any agreement or understanding
between such employee, consultant, contractor or other person and the Company.
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(e) Acknowledgement. The parties acknowledge and agree that
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the Protective Covenants are reasonable as to time, scope and territory given
the Company's need to protect its trade secrets and confidential business
information and given the substantial payments and benefits to which the
Executive may be entitled pursuant to this Agreement.
(f) Remedies. The parties acknowledge that any breach or
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threatened breach of a Protective Covenant by the Executive is reasonably likely
to result in irreparable injury to the Company, and therefore, in addition to
all remedies provided at law or in equity, the Executive agrees that the Company
shall be entitled to a temporary restraining order and a permanent injunction to
prevent a breach or contemplated breach of the Protective Covenant. If the
Company seeks an injunction, the Executive waives any requirement that the
Company post a bond or any other security.
6. No Obligation to Mitigate Damages; No Effect on Other
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Contractual Rights.
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(a) All compensation and benefits provided to the Executive
under this Agreement are in consideration of the Executive's services rendered
to the Company and of the Executive's adhering to the terms set forth in Section
5 hereof and the Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer after the Date of Termination, or
otherwise.
(b) The provisions of this Agreement, and any payment
provided for hereunder, shall not reduce any amounts otherwise payable, or in
any way diminish the Executive's existing rights, or rights which would accrue
solely as a result of the passage of time, under any Benefit Plan, Incentive
Plan or Securities Plan, employment agreement or other contract, plan or
arrangement.
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7. Successor to the Company.
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(a) The Company will require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to the Executive, expressly,
absolutely and unconditionally to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession or assignment had taken place. Any failure of
the Company to obtain such agreement prior to the effectiveness of any such
succession or assignment shall be a material breach of this Agreement and shall
entitle the Executive to terminate the Executive's employment for Good Reason.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor or assign to its business and/or assets as aforesaid,
including without limitation, the Surviving Company in the Merger. If at any
time during the term of this Agreement the Executive is employed by any
corporation a majority of the voting securities of which is then owned by the
Company, "Company" as used in Sections 3, 4, 12 and 14 hereof shall in addition
include such employer. In such event, the Company agrees that it shall pay or
shall cause such employer to pay any amounts owed to the Executive pursuant to
Section 4 hereof.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amounts are still payable to him hereunder, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee, or the designee
or, if there be no such designee, to the Executive's estate.
8. Notice. For purposes of this Agreement, notices and all other
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communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt required, postage prepaid, as follows:
If to Company:
Matria Healthcare, Inc.
0000 Xxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
If to Executive:
Xxxxxxx X. Xxxxxxx, M.D.
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
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9. Miscellaneous. No provisions of this Agreement may be modified,
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waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach 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. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. This Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia.
10. Validity. The invalidity or unenforceability of any provisions
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of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
11. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
12. Legal Fees and Expenses. The Company shall pay all legal fees,
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expenses and damages which the Executive may incur as a result of the
Executive's instituting legal action to enforce his rights hereunder, or in the
event the Company contests the validity, enforceability or the Executive's
interpretation of, or determinations under, this Agreement. If the Executive is
the prevailing party or recovers any damages in such legal action, the Executive
shall be entitled to receive in addition thereto pre-judgment and post-judgment
interest on the amount of such damages.
13. Severability; Modification. All provisions of this Agreement are
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severable from one another, and the unenforceability or invalidity of any
provision of this Agreement shall not affect the validity or enforceability of
the remaining provisions of this Agreement, but such remaining provisions shall
be interpreted and construed in such a manner as to carry out fully the
intention of the parties. Should any judicial body interpreting this Agreement
deem any provision of this Agreement to be unreasonably broad in time,
territory, scope or otherwise, it is the intent and desire of the parties that
such judicial body, to the greatest extent possible, reduce the breadth of such
provision to the maximum legally allowable parameters rather than deeming such
provision totally unenforceable or invalid.
14. Confidentiality. The Executive acknowledges that he has
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previously entered into, and continues to be bound by the terms of, a
Confidentiality and Non-Solicitation Agreement with the Company.
15. Agreement Not an Employment Contract. This Agreement shall not
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be deemed to constitute or be deemed ancillary to an employment contract between
the Company and the Executive, and nothing herein shall be deemed to give the
Executive the right to continue in the employ of the Company or to eliminate the
right of the Company to discharge the Executive at any time.
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IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first above written.
MATRIA HEALTHCARE, INC.
By:
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Its Chairman of the Board
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Xxxxxxx X. Xxxxxxx, M.D.
Executive
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