EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of May 28,
2002, (the "Effective Date"), by and between Xxxxxx X. Xxxx (the "Executive")
and Genesis Health Ventures, Inc., a Delaware corporation (the "Company").
WHEREAS, the Board of Directors of the Company (the "Board") desires that
the Company employ the Executive and the Executive desires to furnish services
to the Company on the terms and conditions hereinafter set forth; and
WHEREAS, the parties desire to enter into this Agreement setting forth the
terms and conditions of the employment relationship of the Executive with the
Company.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth below, the Company and the Executive hereby agree as follows:
1. Employment. The Company hereby agrees to employ the Executive, and
Executive hereby accepts such employment, on the terms and conditions
hereinafter set forth.
2. Employment Period. The period during which the Executive shall furnish
services to the Company hereunder (the "Employment Period") shall commence on
the Effective Date and shall end on November 30, 2002; provided, however, that
the Employment Period may be extended to such later date as is determined by
mutual agreement of the parties hereto. Nothing in this Section 2 shall limit
the right of the Company or the Executive to terminate the Executive's
employment hereunder on the terms and conditions set forth in Section 6 hereof.
3. Position and Duties. During the Employment Period, the Executive shall
serve as the Interim Chief Executive Officer of the Company and shall have those
powers and duties of a management nature consistent with such position. If,
during the Employment Period, the Chairman of the Board of the Company ceases to
serve in such capacity, the Executive shall also serve as the Interim Chairman
of the Board during the Employment Period until such time as a permanent
Chairman of the Board is appointed and shall have all duties and
responsibilities associated with such position. If, during the Employment
Period, the Company hires a permanent Chief Executive Officer (the "Permanent
CEO"), the Executive shall no longer serve as Interim Chief Executive Officer,
but shall continue to serve during the remainder of the Employment Period in an
executive capacity, assisting the Permanent CEO with matters relating to
management transition and other matters as may be reasonably requested by the
Board or the Permanent CEO. In the performance of his duties hereunder, the
Executive shall report to the Board (or, following the appointment of the
Permanent CEO, to the Permanent CEO) and shall devote substantially all of his
full working time, attention and energies to the business of the Company as
shall be necessary for him to carry out his obligations hereunder. During the
Employment Period, the Executive shall continue to serve as a member of the
Board.
4. Place of Performance. The principal place of performance of the
Executive's duties hereunder shall be at the Company's principal corporate
offices, subject to reasonable travel requirements on behalf of the Company.
5. Compensation and Related Matters.
(a) Inducement Payment. As an inducement for the Executive to enter
into this Agreement and undertake the duties and responsibilities contemplated
hereby, the Company shall pay to the Executive, promptly following the execution
of this Agreement, a lump sum cash inducement payment in the amount of $70,833,
less applicable withholding.
(b) Base Salary. Commencing as of June 1, 2002 and continuing
through the remainder of the Employment Period, the Company shall pay the
Executive an annual base salary at a rate not less than $850,000 per year (the
"Base Salary"), payable in accordance with the Company's regular payroll
practice for its senior executives, as in effect from time to time. Any Base
Salary payable to the Executive during the Employment Period shall be in
addition to any directors' fees to which the Executive would be entitled for
continuing to serve as a member of the Board during the Employment Period.
Notwithstanding the foregoing, payment of all or any portion of amounts referred
to in this Section 5(b) which have not yet been earned by the Executive may be
deferred by the Executive by a writing delivered to the Company.
(c) Equity and Other Incentive Compensation. During the Employment
Period, the Executive shall be eligible for such equity and other incentive
compensation as shall be determined by the Board (or a committee thereof) in its
sole discretion.
(d) Other Benefits. During the Employment Period, the Executive
shall be entitled to participate (subject to uniformly applicable requirements
for participation) in any health, disability, profit sharing, retirement or
insurance plans maintained by the Company from time to time for the benefit of
its senior executives.
(e) Business Expenses. During the Employment Period, the Company
shall, upon submission of proper vouchers in respect thereof, pay or reimburse
the Executive in accordance with the Company's reimbursement and expenses
policies, as in effect from time to time, for all reasonable business expenses
incurred by the Executive in connection with the Company's business, including
but not limited to any such expenses incurred by the Executive prior to the
commencement of the Employment Period in preparation of the Executive's
employment hereunder.
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(f) Relocation/Temporary Housing. The Company shall, upon submission
of proper vouchers in respect thereof, pay or reimburse the Executive for (i)
the cost of relocating himself and his spouse from their personal residence in
California to a location in proximity to the Company's corporate offices,
including reasonable travel expenses incurred in connection therewith, and (ii)
the cost of obtaining temporary housing for himself and his spouse during the
Employment Period of a nature that is commensurate with the Executive's position
with the Company. In addition, the Company shall make to the Executive
additional payments to cover applicable federal, state and local income and
excise taxes, when and to the extent, if any, that such taxes are payable by the
Executive with respect to benefits provided under clauses (i) and (ii) of this
Section 5(f).
(g) Company-Provided Automobile. During the Employment Period, the
Executive shall be provided with the use of an automobile, at the Company's
expense, which automobile shall be of a class commensurate with the Executive's
position with the Company.
6. Termination. The Executive's employment hereunder may be terminated
under the following circumstances, in each case subject to the provisions of
this Agreement.
(a) Death, The Executive's employment shall terminate upon his
death.
(b) Termination by the Company or by the Executive. The Company
may terminate the Executive's employment during the Employment Period for any
reason, with or without Cause (as hereinafter defined). The Executive may
terminate his employment during the Employment Period for any reason. For
purposes of this Agreement, "Cause" shall mean (i) the Executive's conviction
for the commission of a felony (other than any such conviction resulting from
the Executive's operation of a motor vehicle) or (ii) the Executive's willful
and continued failure to perform substantially those duties reasonably assigned
or delegated to the Executive hereunder (other than any such failure resulting
from the Executive's physical or mental incapacity).
7. Termination Procedure.
(a) Notice of Termination. Any termination of the Executive's
employment by the Company or by the Executive (other than termination pursuant
to Section 6(a) hereof) shall be communicated by written notice of termination
to the other party hereto in accordance with Section 11 hereof.
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(b) Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean (i) if the Executive's employment is terminated by his
death, the date of his death and (ii) if the Executive's employment is
terminated for any other reason, the date on which a written notice of
termination is given or any later date (within 30 days) set forth in such notice
of termination.
8. Compensation Upon Termination.
(a) Death or Termination by the Company. If the Executive's
employment is terminated by reason of his death or by the Company during the
Employment Period for any reason (other than for Cause), the Company shall pay
to the Executive (or his legal representatives or estate or as may be directed
by the legal representatives of his estate, as the case may be) a lump sum in
cash equal to the sum of (i) any unpaid Base Salary due the Executive in respect
of periods through the Date of Termination (the "Accrued Amount") and (ii) the
Base Salary that would have been payable to the Executive for the remainder of
the Employment Period had such termination not occurred.
(b) Termination By the Executive. If the Executive's employment is
terminated by the Executive during the Employment Period for any reason or by
the Company for Cause the Company shall pay to the Executive a lump sum in cash
equal to the Accrued Amount.
9. Successors; Binding Agreement. This Agreement is personal to the
Executive and, without the prior written consent of the Company, shall not be
assignable by the Executive. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives. This Agreement shall inure
to the benefit of and be binding upon the Company and its successors and
assigns. The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
have been required to perform it if no such succession had taken place. As used
in this Agreement, the "Company" shall mean both the Company as defined above or
any such successor that assumes and agrees to perform this Agreement, by
operation of law or otherwise.
10. Indemnification. The Company shall indemnify, to the fullest extent
permitted by applicable state law and the by-laws of the Company, all amounts
(including without limitation judgments, fines, settlement payments, expenses
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and attorney's fees) incurred or paid by the Executive in connection with any
claim, action, suit, investigation or proceeding arising out of or relating to
the performance by the Executive of services for, or the acting by him as a
director, officer or employee of the Company, any subsidiary of the Company or
any other person or enterprise at the Company's request (collectively,
"Claims"). During the Executive's employment with the Company and following the
termination of the Executive's employment with the Company for any reason, the
Executive shall be covered with respect to any Claims under any director's and
officer's liability insurance policy maintained by the Company which covers
other similarly situated executives of the Company. This Section 10 shall
survive the expiration or earlier termination of this Agreement and the
termination of the Executive's employment hereunder.
11. Notices. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
If to the Company:
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
General Counsel
or to such other address as any party may have furnished to the other party in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
12. Amendment or Modification, Waiver. No provision of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing signed by the Executive and an authorized officer of the
Company. No waiver by any 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 any 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.
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13. Miscellaneous. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto and any prior agreement of the parties
hereto in respect to the subject matter contained herein. This Agreement will be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania, without regard to its conflicts of law principles, All descriptive
headings of sections and paragraphs in this Agreement are intended solely for
convenience, and no provision of this Agreement is to be construed by reference
to the heading of any section or paragraph. All payments to the Executive under
this Agreement shall be reduced by all applicable withholding required by
federal, state or local law. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
GENESIS HEALTH VENTURES, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Sr. V.P.
/s/ Xxxxxx X. Xxxx
-------------------------
Xxxxxx X. Xxxx
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Employment Agreement
Addendum
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This Addendum is entered into as of November 30, 2002, by and between
Xxxxxx X. Xxxx (the "Executive") and Genesis Health Ventures, Inc,, a Delaware
corporation (the "Company").
Whereas, the Executive and the Company are parties to an Employment
Agreement (the "Agreement") entered into as of May 28, 2002; and
Whereas, the parties desire to enter into this Addendum setting forth the
terms and conditions extending the employment of the Executive with the Company.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth below, the Company and the Executive hereby agree as follows:
1. Employment. The Company hereby agrees to continue to employ the
Executive, and Executive hereby accepts such continued employment on the terms
and conditions hereinafter set forth.
2. Employment Agreement. The parties agree that the terms and conditions
of the Employment Agreement entered as of May 28, 2002, shall remain in full
force and effect during the Executive's continued employment, with the following
modifications:
a. Employment Period: The Executive shall continue to be employed
by the Company at the end of the employment period on November 30, 2002, on a
month-to-month basis.
b. Termination Procedure: Any termination of the Executive's
employment by the Company (other than by reason of Executives' death or for
Cause) shall be by written notice at the end of the month and shall provide a
minimum of sixty (60) days advance notice.
IN WITNESS WHEREOF, the parties executed this Addendum as of November 30,
2002.
Genesis Health Ventures, Inc.
/s/ Xxxxx X. Xxxxxxxxxx
-------------------------------
By: Name: Xxxxx X. Xxxxxxxxxx
Title: Sr. V.P.
& General Counsel
/s/ Xxxxxx X. Xxxx
--------------------------
Xxxxxx X. Xxxx
