EXHIBIT 10.3
EMPLOYMENT AND NON-COMPETITION AGREEMENT
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THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (the "Agreement"), is entered
into as of June 20, 1996, by and between Xxxxxx Xxxxx, an Illinois resident
("Employee"), and Everest Healthcare Services Corporation, a Delaware
corporation (the "Company").
WHEREAS, the Company, HDA Acquisition Inc., an Arizona corporation,
Home Dialysis of America, Inc., an Arizona corporation ("HDA"), and Xxxxxx
Xxx, an Arizona resident, Employee, Xxxx Xxxxxxxxx, a Connecticut resident,
and Xxxxxxx Xxxxx, a Texas resident (collectively, the "Shareholders"),
have entered into that certain Agreement and Plan of Merger, dated as of
June 20, 1996 (the "Merger Agreement"), pursuant to which, among other
things, in exchange for delivery of the Merger Consideration (this and each
other term used but not defined herein shall have the meaning assigned
thereto in the Merger Agreement) by the Company, the Contemplated
Transactions shall be consummated in accordance with the terms of the
Merger Agreement;
WHEREAS, Employee is the owner of a significant portion of the capital
stock of HDA;
WHEREAS, Employee expects to derive substantial economic benefit from
the consummation of the Contemplated Transactions;
WHEREAS, Employee has agreed to execute and deliver this Agreement to
induce the Company to execute, deliver and perform its obligations under
the Merger Agreement, and it is a condition to the effectiveness of the
Merger Agreement that Employee executes and delivers this Agreement; and
WHEREAS, the Company has agreed to execute and deliver this Agreement
to induce Employee to execute, deliver and perform its obligations under
the Merger Agreement, and it is a condition to the effectiveness of the
Merger Agreement that Company executes and delivers this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company and the
Employee hereby agree as follows:
1. Employment.
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1.1. Engagement of Employee. The Company agrees to employ Employee as Vice
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President, Business Development-North of the Company, and Employee accepts such
employment by the Company, during the period beginning June 20, 1996 (the
"Effective Date"),
and ending on the final Expiration Date (as defined below), unless sooner
terminated pursuant to Section 3 hereof (the "Employment Period"). "Expiration
Date" shall mean the third anniversary of the Effective Date; provided, however,
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that (i) in the event the Company on a consolidated basis achieves revenue equal
to the Target Sales Goals on or before the second anniversary of the Effective
Date, the Expiration Date shall mean the fifth anniversary of the Effective Date
unless extended in accordance with the terms hereof, and (ii) the Company shall
have the right, but not the obligation, to offer to extend the Expiration Date,
from time to time (as extended from time to time, each of the applicable
Expiration Dates hereunder are hereinafter referred to as an "Applicable
Expiration Date"; the Expiration Date on which the Employment Agreement finally
expires in accordance with this Section 1.1 is hereinafter referred to as the
"Final Expiration Date"), for a two-year period by offering to the Employee, no
earlier than 12 months and no later than six months prior to the Applicable
Expiration Date, a two-year extension of the Applicable Expiration Date (the
"Extension") at the Base Salary (as defined in Section 2.1) increased by no less
than the Applicable Increase Rate (as defined below), and Employee shall have
the right, but not the obligation, to accept such offer in writing no later than
three months prior to such Applicable Expiration Date (without giving effect to
such proposed Extension) and, if Employee accepts such offer, such Applicable
Expiration Date shall be extended for such two-year period beyond the then
current Applicable Expiration Date, and the Base Salary (as defined below) then
in effect shall be increased by the Applicable Increase Rate during such period.
"Applicable Increase Rate" shall mean no less than (a) 0% for any Extension of
the Applicable Expiration Date, if any, occurring on the third anniversary of
the Effective Date, (b) 10% for any Extension of the Applicable Expiration Date,
if any, occurring on the fifth anniversary of the Effective Date, and (c) 6% for
any Extension of the Applicable Expiration Date, if any, occurring on the
seventh or any later anniversary of the Effective Date.
1.2 Duties and Powers. During the Employment Period, Employee will have
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such responsibilities, duties and authorities, including duties related to
managed care contracting on a nationwide basis for the Company, and will render
such services of an executive and administrative character to the Company, its
subsidiaries and its affiliates, as the chief executive officer of the Company
(the "CEO") or Board of Directors of the Company (the "Board") may from time to
time direct. Employee will devote his best efforts and his full business time
and attention (except for permitted vacation periods and reasonable periods of
illness or other incapacity) to the business and affairs of the Company, and
shall perform the duties and carry out the responsibilities assigned to him, to
the best of his ability, in a diligent, businesslike and efficient manner, and
in a manner which does not violate any fiduciary duties Employee owes the
Company under common or statutory law, for the purpose of advancing the Company.
Employee acknowledges that his duties and responsibilities will require his
full-time business efforts and agrees that during the Employment Period he will
not engage in any other business activity or have any business pursuits or
interests except insignificant activities or interests which do not conflict or
compete with the business of the Company and its subsidiaries or interfere with
the performance of Employee's duties hereunder.
1.3 Location. It is understood and agreed that Employee shall perform his
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services hereunder principally from offices maintained by the Company or its
affiliates in ________,
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Illinois for no more than the first year after the date hereof, and thereafter
in Chicago, Illinois. Company agrees to maintain such offices during the
relevant periods as they are presently maintained.
2. Compensation.
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2.1 Base Salary. During the Employment Period, the Company will pay
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Employee a base salary at the rate of $205,000 per annum plus any Applicable
Increase Rate (the base salary in effect from time to time, as increased by any
Applicable Increase Rate, is hereinafter referred to as the "Base Salary"),
payable in regular installments in accordance with the Company's general payroll
practices for salaried officers.
2.2 General Bonus Plans. Employee shall participate in the general bonus
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plans of the Company, on a similar basis as other similarly situated executive
officers of the Company, as the Board shall adopt from time to time to the
extent Employee is eligible to participate therein in accordance with the terms
of such plans. In addition to such bonus plans, the Employee shall participate
in a special bonus plan whereby Employee and the other Shareholders shall be
entitled to receive up to an additional two percent (2%) of the Company's common
stock based on an incentive program to be mutually agreed upon by the
Shareholders and the Company.
2.3 Benefits. In addition to the Base Salary payable to Employee
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hereunder, Employee will be entitled to the following benefits during the
Employment Period, including those set forth on Exhibit A, which benefits are
provided to officers of the Company generally as of the date hereof and shall
only be modified to the extent required to provide Comparable Benefits (as
defined below):
(a) Participation in any plan, arrangement or policy of the Company
relating to profit sharing, pensions, life insurance, disability, health
care coverage or education, that the Company has adopted for the benefit of
its officers generally, as such benefits may be changed by the Company from
time to time during the term of this Agreement;
(b) paid vacation each year with salary, consistent with Company
policy for all salaried officers; and
(c) reimbursement for reasonable out-of-pocket business expenses
incurred by Employee in the ordinary course of his duties, subject to the
Company's policies in effect from time to time with respect to travel,
entertainment and other expenses, including, without limitation,
requirements with respect to reporting and documentation of such expenses.
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3. Termination.
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3.1 Termination By Employee or the Company. The Employment Period (i)
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shall automatically terminate immediately upon Employee's resignation or death,
or (ii) may be terminated by the Company upon written notice delivered to
Employee for or without Cause (as defined below) or by reason of Employee's
Permanent Disability (as defined below). "Cause" as used herein means the
occurrence of any of the following events:
(a) a material breach by Employee of the terms and conditions of this
Agreement, which breach, provided it is of a nature which is capable of
being cured, is not cured within 30 days after Employee receives written
notification from the Company specifying the nature of such breach; or
(b) the determination by the Board in the exercise of its reasonable
judgment that Employee has (i) committed an act or acts constituting a
felony or other act involving dishonesty, a breach of his fiduciary duties
owed to the Company under common or statutory law or fraud with respect to
the Company or an Affiliated Entity (as defined below) or (ii) willfully
taken or willfully failed to take any action the consequence of which
action or omission is materially damaging to the business, assets or
financial condition of the Company or an Affiliated Entity, unless such
action or failure was taken or omitted in good faith and with the
Employee's reasonable belief that such action or failure was in the
Company's best interest.
"Permanent Disability" shall mean, with respect to the Employee (i) the
suffering of any mental or physical illness, disability or incapacity to the
extent that the Employee shall be unable to perform his duties for a period of
three months during any six-month period, or (ii) the absence of the Employee
from his employment by reason of any mental or physical illness, disability or
incapacity for a period of three months during any six-month period; provided,
however, in either case, that such illness, disability or incapacity shall be
determined to be of a permanent nature by a licensed physician selected by the
Board and reasonably acceptable to the Employee. The Employment Period shall
end in the case of clause (i) and (ii) on the last day of such three-month
period. "Affiliated Entity" shall mean any entity that is controlled by
(including an entity managed by) or is under common control with the Company.
3.2 Compensation After Termination or Expiration.
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(a) If the Employment Period is terminated (i) by the Company for
Cause, (ii) due to Employee's death, or (iii) due to Employee's resignation
other than for Good Reason (as defined below), then the Company shall have
no further obligations hereunder or otherwise with respect to Employee's
employment from and after the termination date except payment of Employee's
Base Salary accrued through the date of such termination. "Good Reason"
shall mean (x) a material breach by the Company of the terms and conditions
of this Agreement, which breach, provided it is of a nature which is
capable of being cured, is not cured within 30 days (10 days if such breach
results from the
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nonpayment of compensation the payment of which is required hereunder)
after the Company receives written notification from Employee specifying
the nature of such breach; (y) a significant demotion or material
diminution in Employee's duties and responsibilities, provided that
Employee voluntarily terminates his employment with Company within 120 days
after such event occurs; or (z) a Change of Control (as defined below),
provided that Employee voluntarily terminates his employment with Company
within 180 days after a Change of Control (as defined below) occurs. Good
Reason shall not be deemed to exist for purposes hereof if (1) in the case
of any event described in clause (y), the Company provides notice to
Employee of any change in his duties or his responsibilities and Employees
fails to provide written notice to the Company within 15 days of being
notified of such change that he objects to such change and that such change
constitutes a significant demotion or material diminution in Employee's
duties and responsibilities hereunder, (2) in the case of any event
described in clause (x) or (y), if Cause then existed for the termination
of Employee's employment hereunder as a result of an act or omission
described in Section 3.1(b) and the Company notifies Employee thereof
during the shorter of (i) two years from the date of such termination, and
(ii) any period during which Employee is entitled to severance pay under
this Section 3.2, or (3) in the case of any event described in clause (x)
or (y), if Cause then existed for the termination of Employee's employment
hereunder as a result of the occurrence of any event described in Section
3.1(a) and the Company notifies Employee thereof within 60 days of
receiving notice from Employee that Employee is resigning for Good Reason,
if any such notice is given, or of such Employee's resignation for Good
Reason, if any such notice is not given. Change of Control shall mean any
Person other than a shareholder of the Company on the date hereof acquiring
in excess of forty percent (40%) of the assets or issued and outstanding
voting stock of the Company other than as a result of, or after the
occurrence of, a sale, in an underwritten public offering registered under
the Securities Act of 1933, as amended, of shares of the Company's common
stock in which the price per share paid by the public for such securities
will be at least $10, reflecting a post-offering market capitalization for
the Company of at least $150 million.
(b) If the Employment Period is terminated (i) by the Company without
Cause, (ii) due to Employee's Permanent Disability, or (iii) due to
Employee's resignation for Good Reason, then Employee (or his designated
beneficiary) shall be entitled to receive as severance pay (A) the Base
Salary for the greater of one year from the date of such termination or the
remainder of the Employment Period without giving effect to such
termination, in regular installments in accordance with the Company's
regular payroll practices for salaried officers, and (B) in the event the
Employment Period is terminated in any fiscal year of the Company after the
sixth month of such fiscal year, an amount equal to any bonus which would
otherwise be payable to Employee in accordance with Section 2.2, prorated
to account for the part of such fiscal year during which the Employment
Period had not been terminated in accordance with the general plans of such
bonus arrangement; provided, however, notwithstanding any provision hereof,
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in the event the Employment Period is terminated prior to the second
anniversary of the
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Effective Date by the Company without Cause or by the Employee for Good
Reason, then Employee (or his designated beneficiary) shall be entitled to
receive as severance pay the Base Salary until the fifth anniversary of the
Effective Date, in regular installments in accordance with the Company's
regular payroll practices for salaried officers, as well as the amount, if
any, payable under clause (B) above.
(c) If the Employment Period expires upon the occurrence of the Final
Expiration Date and the Company has offered to the Employee an Extension of
the Final Expiration Date in accordance with the terms hereof and such
extension has not been accepted in writing in accordance with clause (ii)
of the proviso in Section 1.1 by Employee, then the Company shall have no
further obligations hereunder or otherwise with respect to Employee's
employment from and after the Final Expiration Date, except the payment of
(1) Employee's Base Salary accrued through the Final Expiration Date in
regular installments in accordance with the Company's regular payroll
practices for salaried officers, and (2) any bonus which would otherwise be
payable to Employee in accordance with Section 2.2 through such date.
(d) If the Employment Period expires upon the occurrence of the Final
Expiration Date and the Company has not offered to the Employee an
extension of the Final Expiration Date, then the Company shall have no
further obligations hereunder or otherwise with respect to Employee's
employment from and after the Final Expiration Date except (1) payment of
Employee's Base Salary accrued through the Final Expiration Date in regular
installments in accordance with the Company's regular payroll practices for
salaried officers, (2) payment of Employee's Base Salary during the period
commencing on the Final Expiration Date and ending on the first anniversary
of the Final Expiration Date each in regular installments in accordance
with the Company's regular payroll practices for salaried officers, and (3)
any bonus which would otherwise be payable to Employee in accordance with
Section 2.2 through the Final Expiration Date.
(e) The Employee hereby agrees that the Company may dismiss him for
Cause or without Cause without any liability except for the payments
required to be made by this Section 3.2 and except as otherwise set forth
in Section 3.3(d), and without regard to any general or specific policies
(whether written or oral) of the Company relating to the employment or
termination of its employees. The Company and the Employee acknowledge
that it would be impractical or extremely difficult to fix the Employee's
actual damages in the case of any such termination. Therefore, the Company
and Employee agree that the payments to be paid as provided for in this
Section 3.2 and Section 3.3(d) shall constitute liquidated damages;
provided, however, that the Employee shall be under no duty, however, to
mitigate such liquidated damages. In return for tendering payment of such
liquidated damages, regardless of whether after tender of such payment
Employee accepts it, Employee for itself and his heirs, executors,
administrators and assigns ("Releasors") does hereby remise, release, and
forever discharge as to the Company and any of its affiliated entities and
their respective agents, officers, directors and employees, heirs,
successors, assigns, all manners of action, cause and causes of
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action, suits, debts, dues, accounts, liabilities, covenants, contracts,
agreements, claims, obligations, damages, injuries and demands whatsoever
of any kind and nature, whether foreseen or unforeseen, contingent or
actual, liquidated or unliquidated, in law or in equity, which any Releasor
has or may have against any of the aforementioned parties except for claims
for breaches by the Company of express provisions of Section 3.2 or 3.3(d)
of this Agreement, the Merger Agreement or the Shareholders Agreement. The
Employee hereby covenants not to xxx any such Person relating to any such
action, cause of action, suits, debts, dues, accounts, liabilities,
covenants, contracts, agreements, claims, obligations, damages, injuries or
demands.
(f) Notwithstanding any provision hereof other than Section 3.3(d),
after termination or expiration of the Employment Period (i) the Company
shall continue to have all of its rights hereunder (including, without
limitation, all rights under Section 4 hereof at law or in equity), and
(ii) Employee shall continue to have all of his rights under Sections 3.2
and 3.3 hereof.
3.3 Obligations On Termination.
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(a) Upon the expiration or termination of the Employment Period for
any reason, Employee shall be deemed to have resigned from all offices,
directorships, trusteeships, or other positions he may then hold with the
Company or an Affiliate Entity; provided, however, Employee shall remain a
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director of the Company as an HDA Director (as defined in the Shareholders
Agreement) in accordance with the Shareholders Agreement if the
Shareholders' Agent shall notify the Company in writing immediately that
this Section 3.3(a) shall not be given effect to such extent in connection
with any such expiration or termination. Such resignation shall be deemed
effective immediately thereupon, without the requirement that a written
resignation be delivered.
(b) Employee agrees that following the expiration or termination of
the Employment Period for any reason, he will provide any services which
the Company may reasonably require to discharge its continuing obligations
to its clients with respect to services performed by Employee for a period
not to exceed 60 days (and so long as such services do not interfere with
any new position or employment of Employee), and in such events Employee
will be entitled to compensation on a per diem basis at his then customary
rate for such services in addition to all other payments due the Employee
by the Company in accordance with the terms hereof. Such rate shall be
negotiated between the parties in good faith.
(c) The Employee hereby acknowledges and agrees that all personal
property and equipment furnished to or prepared by the Employee in the
course of or incident to his employment belong to the Company and shall be
promptly returned to the Company upon termination of the Employment Period.
"Personal property" includes, without limitation, all books, manuals,
records, reports, notes, contracts, lists, blueprints, and other documents,
or materials, or copies thereof, and all other proprietary information
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relating to the business of the Company; provided, however, that nothing
shall preclude the Employee from retaining or removing (i) his personal
rolodex and calendars; or (ii) information not containing Confidential
Information (as hereinafter defined in Section 4.5) or a trade secret
obtained while in the employ of HDA or the Company. The Employee cannot
retain or remove personal property that is or contains Confidential
Information or a trade secret obtained while in the employ of HDA or the
Company. Prior to retaining or removing any personal property other than
his personal rolodex and calendars, the Employee will inform the Company of
what personal property he intends to retain or remove. If a dispute arises
between the Company and the Employee regarding the right of Employee to
remove any such personal property, the parties shall arbitrate such dispute
in a manner mutually agreeable to them. Following termination, the
Employee will not retain any written or other tangible material containing
any Confidential Information or trade secrets, except as described above.
(d) In the event the Employment Period expires or is terminated (other
than due to the resignation or termination by Employee for the failure of
the Company to (i) pay his Base Salary in accordance with Section 2.1 or
bonus in accordance with Section 2.2, or (ii) pay or make available
Comparable Benefits (as such term is defined below) (the failures included
in clauses (i) and (ii) are hereinafter collectively referred to as the
"Termination Events")), the Company's sole liability to Employee shall be
limited to, and Employee shall only be entitled to xxx the Company for, the
compensation due to him in accordance with Section 3.2. In the event the
Employment Period is terminated due to the resignation by Employee for the
occurrence of any Termination Event, Employee shall have the right to
exercise any rights he has in law or equity, including the right to xxx for
damages and to render this Agreement of no further force or effect.
"Comparable Benefits" means, for purposes of this Agreement, all employee
benefits including, but not limited to, vacation, disability, death
benefits, healthcare, pension and 401K plans, those benefits provided in
Section 2.3, and other fringe benefits provided to other similarly situated
Company executives ("Company Benefits") with respect to both the financial
effect of such benefits to Employee and the terms and provisions of such
benefits (which benefits must be within a range of no less than 90% of the
Company Benefits).
4. Covenant Not to Compete.
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4.1 Employee's Knowledge. Employee acknowledges and agrees that he has
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occupied a position of trust and confidence with HDA and will occupy a position
of trust and confidence with the Company and in the course of his past
employment by HDA and his engagement hereunder with the Company, has and will
become familiar with HDA's and the Company's trade secrets and other proprietary
and confidential information concerning the Company and HDA. Employee
acknowledges and agrees that his services are of a special, unique and
extraordinary value to the Company and that the Company would be irreparably
damaged if Employee were to provide similar services to any person or entity in
violation of the provisions of this Agreement. Employee further acknowledges
that the Company's relationships with its
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clients and other business partners are among its most valuable assets which in
many cases have been created over a long period of time and, if lost, could not
be replaced.
4.2 Non-Compete. As consideration for the Company entering into this
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Agreement and the Merger Agreement, and in recognition of the Company's
proprietary interest in its business, Employee agrees that he shall not, during
the Restricted Period (as defined below), directly or indirectly, as employee,
agent, consultant, stockholder, director, co-partner or in any other individual
or representative capacity, own, operate, manage, control, engage in, invest in
or participate in any manner in, act as a consultant or adviser to, render
services for (alone or in association with any person, firm, corporation or
entity), or otherwise assist, any person that engages in or owns, invests in,
operates, manages or controls any venture or enterprise engaging or proposing to
engage in the Business (as defined below) anywhere in the Territory (as defined
below). "Business" shall mean the performance of activities related to:
(i) providing dialysis treatments or services utilized in
connection with any dialysis treatments;
(ii) the purchase, sale, establishment, management or operation of
dialysis facilities;
(iii) practice management; or
(iv) extracorporeal blood handling.
"Restricted Period" shall mean the period commencing on the Effective Date
hereof and ending on:
(i) the later of (i) the seventh anniversary of the Effective Date,
and (ii) the second anniversary of the Final Expiration Date,
if the Employment Period is terminated by the Company for
Cause;
(ii) the second anniversary of the date ending the period for which
Employee receives payments in accordance with Section 3.2(b),
if the Employment Period is terminated (A) by the Company
without Cause, (B) by the resignation of the Employee for Good
Reason, or (C) due to the Employee's Permanent Disability;
(iii) the second anniversary of the date ending the period for which
Employee receives payments in accordance with Section 3.2(c),
if the Employment Period expires after an Extension has been
offered to Employee in accordance with clause (ii) of the
proviso of Section 1.1 and not accepted by Employee in
accordance with such clause;
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(iv) the first anniversary of the date ending the period for which
Employee receives payments in accordance with Section 3.2(d), if
the Employment Period expires after an Extension has not been
offered to Employee in accordance with Section 1.1; and
(v) the second anniversary of the date the Employee resigns for other
than Good Reason, but such period shall not be less than five
years from the Effective Date.
The Restricted Period shall be automatically extended for a period equal to any
period that Employee is in breach of the restrictive covenants set forth in this
Section 4 (the "Restrictive Covenants"). "Territory" shall mean the area
included within a 20 mile radius of any Medicare certified outpatient renal
dialysis facility or any other facility providing any services or engaging in
any activities of the Business and either (x) owned, operated or managed by the
Company or any Affiliated Entity on the Final Expiration Date or the date on
which the Employment Period is otherwise terminated or at any time during the 18
months preceding such date, or (y) for which the Company or any Affiliated
Entity during the nine months preceding the Final Expiration Date or the date on
which the Employment Period is otherwise terminated, was actively engaged in
efforts to establish, acquire, manage or operate (each such facility is
hereinafter referred to as a "Facility"); provided, however, that for purposes
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hereof, following termination of Employee's employment with the Company,
Employee shall have the right to engage in any of the activities listed in
clause (i) through (iv) of the definition of Business in any Territory in which
the Company or any Affiliated Entity is not then engaging in or, in the nine
months preceding the Final Expiration Date or the date on which the Employment
Period is otherwise terminated, was not actively engaged in efforts to engage
in, such activity in a Facility located in such Territory. With respect to the
Territory, Employee specifically acknowledges that the Company plans to conduct
the Business throughout the United States and to undertake to expand the
Business throughout the United States.
4.3 Non-Solicitation. Without limiting the generality of the provisions
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of Section 4.2 hereof, Employee hereby agrees that, during the Restricted
Period, he will not, directly or indirectly, solicit, or participate as
employee, agent, consultant, stockholder, director, partner or in any other
individual or representative capacity, in any business which solicits business
from any person, firm, corporation or other entity which was a client or other
business partner of the Company during the term of this Agreement or any
referring physician or any owner of facilities operated by the Company or its
Affiliated Entities and, in each instance, who or which is located in the
Territory, or from any successor in interest to any such person, firm,
corporation or other entity who or which is located in the Territory, for the
purpose of securing business relationships or contracts related to the Business;
provided, however, that nothing contained herein shall be construed to prohibit
or restrict Employee from soliciting business from any such parties on behalf of
the Company in performance of his duties as an employee of the Company required
under and as specifically contemplated by Section 1 above.
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4.4 Interference with Relationships. During the Restricted Period,
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Employee shall not, directly or indirectly, as employee, agent, consultant,
stockholder, director, co-partner or in any other individual or representative
capacity: (i) except on behalf of the Company, employ or engage, recruit or
solicit for employment or engagement, any person who is or becomes employed or
engaged by the Company or its Affiliated Entities during the Restricted Period
or during the eighteen month period preceding the Restricted Period, or
otherwise seek to influence or alter any such person's relationship with the
Company or its Affiliated Entities, or (ii) solicit or encourage any client or
other business partner of the Company or its Affiliated Entities or any
referring physician or any owner of facilities operated or managed by the
Company or its Affiliated Entities to terminate or otherwise alter his, her or
its relationship with the Company or its Affiliated Entities.
4.5 Confidential Information. The Employee agrees that during the
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Employment Period or at all times thereafter, he shall not disclose to any
person not employed by the Company and not engaged to render services to the
Company or otherwise use any Confidential Information obtained while in the
employ of the Company, except on behalf of the Company in accordance with its
policies or as such disclosure may be required by law or a court order. As used
in this Agreement, "Confidential Information" shall mean any information
relating to the business or affairs of the Company, Peak, its Affiliated
Entities, or their clients or other business partners, including but not limited
to information relating to financial statements, client or other business
partner identities, potential clients, employees, information, analyses, or
other proprietary information used by the Company, Peak, or its Affiliated
Entities in connection with their businesses; provided, however, that
Confidential Information shall not include any information which is in the
public domain or becomes known in the industry through no wrongful act on the
part of Employee or is approved for disclosure by the Company. Employee
acknowledges that the Confidential Information is vital, sensitive, confidential
and proprietary to the Company and its Affiliated Entities.
4.6 Blue-Pencil. If any court of competent jurisdiction shall at any time
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deem the term of this Agreement or any particular Restrictive Covenant too
lengthy or the Territory too extensive, the other provisions of this Section 4
shall nevertheless stand, the Restricted Period herein shall be deemed to be the
longest period permissible by law under the circumstances and the Territory
herein shall be deemed to comprise the largest territory permissible by law
under the circumstances. The court in each case shall reduce the time period
and/or Territory to permissible duration or size.
4.7 Remedies.
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(a) Employee agrees that the recitals to this Agreement are true and
are part of this Agreement. Further, Employee has carefully considered the
nature and extent of the restrictions upon him and the rights and remedies
conferred upon the Company under this Agreement, and Employee hereby
acknowledges and agrees that such restrictions, rights and remedies are
reasonable in time and territory, are designed to eliminate competition
which otherwise would be unfair to the Company, do not stifle the inherent
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skill and experience of Employee, would not operate as a bar to Employee's
sole means of support, are fully required to protect the legitimate
interests of the Company following the consummation of the Contemplated
Transactions and do not confer a benefit upon the Company disproportionate
to the detriment to Employee.
(b) Employee acknowledges and agrees that the Restrictive Covenants
are reasonable and necessary for the protection of the Company's business
interests, that irreparable injury will result to the Company if Employee
breaches any of the terms of said Restrictive Covenants, and that in the
event of Employee's actual or threatened breach of any such Restrictive
Covenants, the Company will have no adequate remedy at law. Employee
accordingly agrees that in the event of any actual or threatened breach by
him of any of the Restrictive Covenants, the Company shall be entitled,
upon three days' notice to Employee, to immediate temporary injunctive and
other equitable relief, without bond and without the necessity of showing
actual monetary damages, subject to a hearing as soon thereafter as
possible. Nothing contained herein shall be construed as prohibiting the
Company from pursuing any other remedies available to it for such breach or
threatened breach, including the recovery of any damages which it is able
to prove.
5. Miscellaneous.
-------------
5.1 Notices, Consents, etc. Any notices, consents or other communication
-----------------------
required to be sent or given hereunder by any of the parties shall in every case
be in writing and shall be deemed properly served if (a) delivered personally,
(b) sent by registered or certified mail, in all such cases with first class
postage prepaid, return receipt requested, (c) delivered by a recognized
overnight courier service, or (d) sent by facsimile transmission (along with a
copy sent by first-class mail) to the parties at the addresses as set forth
below or at such other addresses as may be furnished in writing.
If to Company: Everest Healthcare Services Corporation
000 Xxxxx Xxxxxxxx
Xxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Fax: 708/000-0000
With copies to: Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Fax: 312/000-0000
If to Employee: Xxxxxx Xxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
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with a copy to: Xxxx & Xxxxxxx
000 X. Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Fax No.: 312/000-0000
Date of service of such notice shall be (w) the date such notice is personally
delivered, (x) three (3) days after the date of mailing if sent by certified or
registered mail, (y) one (1) day after date of delivery to the overnight courier
if sent by overnight courier or (z) the next succeeding business day after
transmission by facsimile.
5.2 Severability. The unenforceability or invalidity of any provision of
------------
this Agreement shall not affect the enforceability or validity of any other
provision.
5.3 Entire Agreement. This Agreement and those documents expressly
----------------
referred to herein embody the complete agreement and understanding among the
parties and supersede and preempt any prior (or contemporaneous) understandings,
agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way, and may not be
contradicted by evidence of any prior or contemporaneous agreement. The parties
further intend that this Agreement shall constitute the complete and exclusive
statement of its terms and that no extrinsic evidence whatsoever may be
introduced in any judicial, administrative, or other legal proceeding involving
this Agreement.
5.4 Counterparts. This Agreement may be executed on separate
------------
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
5.5 Assignment. This Agreement will be binding upon and inure to the
----------
benefit of the parties hereto and their respective successors and permitted
assigns, but will not be assignable or delegable by any party without the prior
written consent of the other parties. Notwithstanding anything to the contrary
contained herein, Employee may not assign any of his rights or delegate any of
his responsibilities, liabilities or obligations under this Agreement, without
the written consent of the Company.
5.6 No Strict Construction. The language used in this Agreement will be
----------------------
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any party
hereto.
5.7 Amendment and Waiver. Any provision of this Agreement may be amended,
--------------------
or any provision of this Agreement may be waived, provided that any such
amendment or waiver will be binding on Employee or the Company, only if such
amendment or waiver is set forth in a writing executed by Employee or the
Company, respectively. The waiver by any party hereto
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of a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any other breach.
5.8 Construction. This Agreement shall be construed and enforced in
------------
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Agreement shall be governed by, the laws
of the State of Illinois, without giving effect to provisions thereof regarding
conflict of laws.
5.9 Consent to Jurisdiction and Service of Process. The Company and
----------------------------------------------
Employee hereby consent to the jurisdiction of any state or federal court
located within the County of Xxxx, State of Illinois and irrevocably agree that
subject to the Company's election, all actions or proceedings arising out of or
relating to this Agreement shall be litigated in such courts. Employee accepts
for himself and in connection with his properties, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid courts and
waives any defense of forum non conveniens, and irrevocably agrees to be bound
by any judgment rendered thereby in connection with this Agreement. Service of
all process in any such proceeding in any such court shall be mailed by
registered mail to Employee, except that unless otherwise provided by applicable
law, any failure to mail such copy shall not affect the validity of service of
process. Employee hereby agrees that service upon him by certified mail shall
constitute sufficient notice. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the right of the
Company to bring proceedings against Employee in the courts of any other
jurisdiction.
5.10 Employee Acknowledgment. The Employee acknowledges (a) that he has
-----------------------
consulted with or has had the opportunity to consult with independent counsel of
his own choice concerning this Agreement and has been advised to do so by the
Company, and (b) that he has read and understands the Agreement, is fully aware
of its legal effect, and has entered into it freely based on his own judgment.
5.11 Indemnification and Insurance.
-----------------------------
(a) The Company, to the fullest extent allowed by law, shall indemnify
and hold Employee harmless from any and all expenses (including reasonable
attorney's fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by Employee in connection with any action, suit or
proceeding in which Employee is a defendant and relating to Employee's
employment or performance of his duties hereunder (but not claims brought
by the Company for any breach of this Agreement by Employee) if the
Employee acted in good faith, in accordance with this Agreement and in a
manner the Employee reasonably believed to be in, or not opposed to, the
best interests of the Company and, with respect to any such action or
proceeding of a criminal nature, had no reasonable cause to believe
Employee's conduct was unlawful.
(b) Promptly after receipt by the Employee under Section 5.11(a) of
notice of a claim against it ("Claim"), Employee shall, if a claim is to be
made
-14-
against the Company under this Section, give notice to the Company of such
Claim, but the failure to notify the Company will not relieve the Company
of any liability that it may have to Employee, except to the extent that
the Company demonstrates that the defense of such action is prejudiced by
Employee's failure to give such notice.
(c) If any Claim referred to in Section 5.11(b) is made against
Employee and it gives notice to the Company of such Claim, the Company will
be entitled to participate in the defense of such Claim and, to the extent
that it wishes (unless (i) the Company is also a party to such Claim and
Employee determines in good faith that joint representation would be
inappropriate, or (ii) the Company fails to provide reasonable assurance to
Employee of its financial capacity to defend such Claim and provide
indemnification with respect to such Claim), to assume the defense of such
Claim with counsel satisfactory to Employee and, after notice from the
Company to Employee of its election to assume the defense of such Claim,
the Company will not, as long as it diligently conducts such defense, be
liable to Employee under such Section for any fees of other counsel or any
other expenses with respect to the defense of such Claim in each case
subsequently incurred by the Employee in connection with the defense of
such Claim, other than reasonable costs of investigation. If the Company
assumes the defense of a Claim (a) it will be conclusively established for
purposes of this Agreement that the claims made in that claim are within
the scope of and subject to indemnification; (b) no compromise or
settlement of such claims may be effected by the Company without the
Employee's consent unless (i) there is no finding or admission of any
violation of Legal Requirements or any violation of the rights of any
Person and no effect on any other Claims that may be made against the
Employee, and (ii) the sole relief provided is monetary damages that are
paid in full by the Company; and (c) the Employee will have no liability
with respect to any compromise or settlement of such claims effected
without its consent. If notice is given to the Company of a Claim and the
Company does not, within ten (10) days after the Employee's notice is
given, give notice to the Employee of its election to assume the defense of
such Claim, the Company will be bound by any determination with respect to
said Claim or any compromise or settlement effected by the Employee.
(d) The Company shall maintain insurance which would cover Employee in
connection with any liability asserted against Employee for performance of
his duties hereunder or as a result of being an employee of the Company,
whether the Company would be permitted to indemnify the Employee against
such liability under applicable law to the same extent it maintains such
insurance for other officers of the Company.
5.12 Right to Acquire Insurance. If the Employment Period terminates for
--------------------------
any reasons other than the death of the Employee, Employee may, at his option,
acquire any insurance npolicies on his life owned by Company within 60 days of
such termination. Such policies shall be transferred or assigned to Employee
upon his payment to Company of the cash surrender value of such insurance
policy.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
THE COMPANY:
-----------
EVEREST HEALTHCARE SERVICES
CORPORATION
By: /s/ XXXXX X. XXXXX
-----------------------
Xxxxx X. Xxxxx
EMPLOYEE:
--------
/s/ XXXXXX XXXXX
--------------------------
Xxxxxx Xxxxx
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EXHIBIT A
---------
Defined Benefit Pension Approximate Contribution: $15,000
401K Plan Match for each Dollar
Contributed by Employee
Life Insurance Policy of up to $300,000 (Beneficiary Named by Employee)
Health Insurance - Family
Vacation Paid No less than 1 month
Holidays Paid 5 days
Sick Paid As needed
Short Term Disability Salary paid until long term
disability benefits commence
Long Term Disability 60% of salary to maximum of $25,000
per month
