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EXHIBIT 10.16
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT between Community Care Services, Inc., a New York
corporation (the "Corporation") and Xxxxxx Xxxxxxxx ("Executive") dated May 10,
1997.
W I T N E S S E T H:
WHEREAS, the Corporation and Executive have entered into a Stock
Purchase Agreement for the purchase of all of the issued and outstanding common
stock of Metropolitan Respirator Service, Inc. ("Metropolitan") owned by
Executive, a Non-Competition Agreement and other related agreements; and
WHEREAS, Executive is employed by Metropolitan; and
WHEREAS, simultaneous with the closing of the above-mentioned purchase
of the stock of Metropolitan (the "Closing"), the Corporation wishes to employ
Executive and Executive wishes to be employed by the Corporation.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. Employment. The Corporation agrees to and does hereby employ
Executive effective upon the Closing, and Executive agrees to and does hereby
accept employment by the Corporation effective upon the Closing, as Vice
President of the Corporation, or in any other similar capacity as determined by
its Board of Directors, subject to the supervision and direction
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of its President and Chief Executive Officer, for the three-year period
commencing on the date hereof and ending on midnight three years later (the
"Term"), subject to prior termination in accordance with the provisions of
Article 7 hereof. The Term may be extended for successive one year periods, as
mutually agreed in writing by the Corporation and Executive; provided that the
Corporation will give notice to Executive at least six months prior to the end
of the Term or any extension thereof if it desires to extend this Agreement. The
Term and any extensions thereof shall be referred to in this Agreement as the
"Employment Period."
2. Scope of Duties. As Vice President, Executive will carry out all
reasonable tasks which are typically commensurate with such position assigned to
him by the President and Chief Executive Officer. Executive agrees that he will
devote his full time and effort during the Employment Period to the performance
of the duties of his office. Executive shall make his business headquarters at
Mount Vernon, New York and shall relocate should the Corporation change its
headquarters; provided, however, that in no event will Executive be required to
relocate outside of a thirty (30) mile radius from Mt. Xxxxxx, New York.
Executive shall undertake such travel as the Corporation may request.
3. Compensation.
(a) Executive Compensation. For the services and duties to be
rendered and performed by Executive during the Employment Period, the
Corporation agrees to pay Executive compensation at the rate of One Hundred Ten
Thousand ($110,000) Dollars per annum (this amount to be referred to as
"Executive Compensation"). Executive Compensation shall be
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payable in accordance with the Corporation's customary payroll practices. The
Corporation shall reimburse Executive for all expenses reasonably and
necessarily incurred in connection with his employment by the Corporation,
including business related travel and entertainment expenses while absent on the
Corporation's business from its business headquarters, subject to the
limitations and guidelines generally imposed by the Corporation on its
executives.
(b) Stock Options. Executive will be entitled to receive
grants of options to purchase the stock of the Corporation on the same basis as
other executive employees of the Corporation which Executive understands is
based on performance and at the discretion of the Corporation's Board of
Directors.
(c) Car Allowance. Executive shall be entitled to a car
allowance of Six Hundred Dollars ($600) per month.
4. Vacation. Executive shall be entitled to a paid vacation each year
equal to three (3) weeks. Said vacation may be taken at the sole discretion of
Executive. Executive shall also be entitled to paid sick and personal days in
accordance with the Corporation's policies for senior executives, as adopted
from time to time.
5. Nondisclosure. Executive acknowledges that as an officer and
stockholder of Metropolitan or any Affiliate (as defined below) thereof he has
been, and as an executive of the Corporation throughout the Employment Period he
will be, privy to trade secrets and other proprietary and/or confidential
information (whether in written, verbal or any other form) relating to the
existing or contemplated business and/or field of interest of the Corporation
and its
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Affiliates, or of any corporation or other legal entity in which the Corporation
or any of its Affiliates has an ownership interest of more than five percent
(5%), and any proprietary information (whether in written, verbal or any other
form) of any of the Corporation's customers, suppliers, licensor or licensees,
including, but not limited to, information relating to inventions, disclosures,
processes, systems, methods, formulae, patents, patent applications, machinery,
materials, notes, drawings, research activities and plans, costs of production,
contract forms, prices, volume of sales, promotional methods, list of names or
classes or customers, which he has heretofore acquired or which he may hereafter
acquire during his employment with the Corporation or any of its Affiliates, in
both cases whether during or outside business hours, whether or not on
Metropolitan's or the Corporation's premises, as the result of any disclosures
to him, or in any other way, shall be regarded as held by him in a fiduciary
capacity solely for the benefit of the Corporation, its successors or assigns,
and shall not at any time, either during the Employment Period or thereafter, be
disclosed, divulged, furnished, or made accessible by him to anyone, or be
otherwise used by him, except in the regular course of business of the
Corporation or its Affiliates. Upon termination of his employment, Executive
shall promptly return or deliver to the Corporation all tangible forms of such
information in his possession or control, and shall retain no copies thereof.
Information shall, for purposes of this Agreement, be considered to be
confidential if not known by the trade generally, even though such information
may have been disclosed on a confidential basis to one or more third parties
pursuant to any business discussion or agreement, including distribution
agreements, joint research agreements or other agreements entered into by
Metropolitan or the Corporation or any of their Affiliates. For the purposes of
this Agreement, "Affiliates" shall mean any corporation, partnership, joint
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venture, other entity of any type or individual that directly or indirectly,
through one or more intermediaries, controls or is controlled, or is under
common control with, Metropolitan or the Corporation, as the case may be.
6. Patents. Executive agrees to and does hereby sell, assign, transfer
and set over to the Corporation, its successors, assigns, or Affiliates, as the
case may be, all his right, title, and interest in and to any inventions,
improvements, processes, patents or applications for patents which he develops
or conceives individually or in conjunction with others during his employment by
the Corporation, or, having possibly conceived same prior to his employment, may
complete while in the employ of the Corporation or any of its Affiliates, in
both cases whether during or outside business hours, whether or not on the
Corporation's premises, which inventions, improvements, processes, patents or
applications for patents are (i) in connection with any matters within the scope
of the existing or contemplated business of the Corporation or any of its
Affiliates or (ii) aided by the use of time, materials, facilities or
information paid for or provided by the Corporation, all of the foregoing to be
held and enjoyed by the Corporation, its successors, assigns or Affiliates, as
the case may be, to the full extent of the term for which any Letters Patent may
be granted and as fully as the same would have been held by Executive, had this
Agreement not been made. Executive will make, execute and deliver any and all
instruments and documents necessary to obtain patents for such inventions,
improvements and processes in any and all countries. Executive hereby
irrevocably appoints the Corporation to be his attorney in fact in the name of
and on behalf of Executive to execute all such instruments and do all such
things and generally to use Executive's name for the purposes of assuring to the
Corporation (or
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its nominee) the full benefit of its rights under the provisions of this Article
6, such power to be exercised only if Executive improperly refuses to fulfill
his obligations under this Article 6.
7. Earlier Termination.
(a) Death. In the event of the death of Executive during the
Employment Period, this Agreement shall automatically terminate on the date of
his death. Upon termination of this Agreement pursuant to this Article 7(a), the
Corporation shall have no further obligations or liabilities under this
Agreement other than to pay to Executive's estate (i) the portion, if any, of
his compensation that remains accrued but unpaid, (ii) the amount of any
expenses reimbursable in accordance with Article 3(a) above and (iii) any
amounts due under any of the Corporation's benefit, welfare or pension plans.
(b) Disability. In the event of Executive's Total Disability
(as defined below) for one hundred eighty (180) days in the aggregate during any
consecutive twelve (12) month period during the Employment Period, the
Corporation shall have the right to terminate this Agreement by giving Executive
thirty (30) days' prior written notice thereof and, upon the expiration of such
thirty (30) day period, Executive's employment under this Agreement shall
terminate. If Executive shall resume his duties within thirty (30) days after
receipt of such a notice of termination and continue to perform his duties for
four (4) consecutive weeks thereafter, then this Agreement shall continue in
full force and effect, without any reduction in salary and other benefits, and
the notice of termination shall be considered null and void and of no effect.
Upon termination of this Agreement pursuant to this Article 7(b), the
Corporation shall have no
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further obligations or liabilities under this Agreement other than to pay to
Executive (i) the portion, if any, of his compensation that remains accrued but
unpaid, (ii) the amount of any expenses reimbursable in accordance with Article
3(a) above, and (iii) any amounts due under any of the Corporation's benefit,
welfare or pension plans.
The term "Total Disability," as used herein, shall mean a
mental or physical condition which, in the reasonable opinion of an independent
medical doctor designated by the parties, renders Executive unable or
incompetent to carry out his material duties and responsibilities under this
Agreement. Notwithstanding the foregoing, if Executive is covered under any
policy of disability insurance hereunder, under no circumstances shall the
definition of "Total Disability" differ from the definition of that term in such
policy. If the parties are unable to agree upon an independent medical doctor to
render an opinion, each shall designate one medical doctor, and the two so
designated shall jointly select a third independent medical doctor, whose
decision shall be binding.
(c) Termination for Cause. The Corporation may discharge
Executive for "Cause" upon notice and thereby immediately terminate his
employment under this Agreement. For purposes of this Agreement, the Corporation
shall have "Cause" to terminate Executive's employment if Executive, in the
reasonable judgment of the Corporation, (i) materially breaches any of his
agreements, obligations or duties under this Agreement and does not cure such
breach or commence in good faith to correct such breach within thirty (30) days
after notice, (ii) fails to carry out any reasonable lawful directive of the
Board of Directors of the Corporation which Executive is required to do pursuant
to this Agreement and does not cure such breach or
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commence in good faith to correct such breach within ten (10) days after notice,
(iii) embezzles or converts to his own use any funds of the Corporation or any
client or customer of the Corporation, (iv) willfully converts to his own use
any property of the Corporation without the Corporation's consent, (v) is
convicted of a felony (other than a vehicular infraction which does not involve
injuries to persons or property), (vi) is adjudicated an incompetent, (vii) is
habitually intoxicated or diagnosed by an independent doctor to be addicted to a
controlled substance (any disagreement shall be resolved by the reasonable
opinion of an independent medical doctor selected by the parties; provided that
if the parties are unable to agree, each shall designate one medical doctor, and
the two so designated shall jointly select a third independent medical doctor,
whose decision shall be binding) or (viii) habitually behaves in a manner which,
with intent to do so, materially impairs the Corporation's relationships with
others in its industry.
8. Employee Benefits.
(a) Executive may participate in all of the Corporation's
employee benefit plans generally made available now or in the future by the
Corporation to its executives and key management employees to the extent, if
any, that he may be eligible to do so under the provisions of such plans or
programs. Those benefit plans may include medical and dental insurance, life and
accidental death/dismemberment insurance, short- and long-term disability,
tuition reimbursement, 401(k) plan, stock purchase plan, vacation and pension
plans. The Corporation may terminate, modify, or amend any such plan or program,
in the manner and to the extent permitted therein, and the rights of Executive
under any such plan or program shall be subject to any such right of
termination, modification, or amendment. To the extent any payments under
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any such plan or program are made to Executive because he is disabled, such
amounts shall be credited against amounts due to Executive under Article 7. To
clarify the foregoing, the Corporation will pay for Executive to participate in
the Company's health plan, as the same exists from time to time.
(b) For the sake of clarification, and notwithstanding any
other provision of this Agreement, it is understood and agreed that all benefits
provided to Executive under this Agreement shall be provided to the extent that
they exceed any employee benefit provided to Executive other than specifically
through this Agreement, such as the programs, plans, etc. referred to in Article
8(a) above. The benefits provided under this Agreement shall be supplemental to
benefits provided otherwise to Executive by the Corporation, and shall not be
provided to the extent that they are duplicative.
9. Assignment. This Agreement may be assigned by the Corporation as
part of the sale of substantially all of its business; provided, however, that
the purchaser shall expressly assume all obligations of the Corporation under
this Agreement, and provided, further, that Executive may resign upon any such
assignment by the Corporation. Further, this Agreement may be assigned by the
Corporation to an Affiliate, provided that any such Affiliate shall expressly
assume all obligations of the Corporation under this Agreement, and provided
further that the Corporation shall then fully guarantee the performance of the
Agreement by such Affiliate. Executive agrees that if this Agreement is so
assigned, all the terms and conditions of this Agreement shall remain between
such assignee and himself with the same force and effect as if said Agreement
had been made with such assignee in the first instance.
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10. Survival. The provisions of Articles 5, 6, 7 and 12 shall survive
the termination of this Agreement.
11. Notices. All notices required or permitted to be given hereunder
shall be mailed by certified mail, delivered by recognized overnight courier
service for which a written receipt is given, or delivered by hand to the party
to whom such notice is required or permitted to be given hereunder. If mailed,
any such notice shall be deemed to have been given when mailed as evidenced by
the postmark at point of mailing. If delivered by hand, any such notice shall be
deemed to have been given when received by the party to whom notice is given, as
evidenced by written and dated receipt of the receiving party.
Any notice to the Corporation or to any assignee of the Corporation
shall be addressed as follows:
Community Care Services, Inc.
00 Xxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxxx, President and Chief Executive Officer
with a copy to:
Nordlicht & Hand
000 Xxxxx Xxxxxx
00 Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Hand
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Any notice to Executive shall be addressed to the Executive's address
appearing on the records of the Corporation at the time such notice is given.
Executive at any time may by written notice designated an attorney who is to
receive copies of all notices.
Either party may change the address to which notice to it is to be
addressed, by notice as provided herein.
12. Applicable Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of New York governing contracts made in
and to be performed solely in such State.
13. Effective Date. This Agreement shall become effective as of the
Closing.
14. Waiver of Breach. The waiver by either party of a breach of this
Agreement shall not be effective unless in writing signed by the party to be
charged therewith and will not operate or be construed as a waiver of any other
subsequent breach.
15. Equitable Relief. With respect to the covenants contained in
Articles 5 and 6 of this Agreement, Executive agrees that any remedy at law for
any breach of said covenants may be inadequate and that the Corporation shall be
entitled to specific performance or any other mode of injunctive and/or other
equitable relief a court might award, including, but not limited
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to, an injunction restraining such breach or threatened breach, in addition to
any other remedies which might be available to it.
16. Acknowledgement. Executives acknowledge that he has been advised to
and has had the opportunity to provide a copy of this Agreement to an attorney
of his own choosing and to discuss this Agreement with his attorney prior to
executing it.
IN WITNESS WHEREOF, the parties hereto have executed the above
Agreement as of the day and year first above written.
COMMUNITY CARE SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx, President and
Chief Executive Officer
EXECUTIVE:
/s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
