EXHIBIT 10.83.
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of this ____ day of July, 1998
(the "Effective Date"), by and between INTEGRATED HEALTH SERVICES, INC., a
Delaware corporation (hereinafter referred to as the "Company"), and XXXX X.
XXXXXX (hereinafter referred to as the "Executive").
W I T N E S S E T H:
WHEREAS, the Company wishes to employ the Executive and to ensure the
continued services of the Executive for the Term (as hereinafter defined), and
the Executive desires to be employed by the Company for such Term pursuant to
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premise and the
mutual agreements herein contained, the parties, intending to be legally bound,
hereby agree as follows:
ARTICLE I
EMPLOYMENT RELATIONSHIP
1.1 EMPLOYMENT. The Company hereby employs the Executive in the
position of Executive Vice President - Facility Operations, with such
responsibilities as may be assigned to Executive from time to time by the
Company's Chief Operating Officer. Executive shall report to and be responsible
to the Chief Operating Officer during the Term of this Agreement, and Executive
hereby accepts such employment.
During the Term, the Executive agrees to devote all such working time
as is reasonably required for the discharge of his duties hereunder and to
perform such services faithfully and to the best of his ability. Notwithstanding
the foregoing, nothing in this Agreement shall preclude the Executive from (a)
engaging in charitable and community affairs, so long as they are consistent
with his duties and
responsibilities under this Agreement, (b) managing his personal investments,
and (c) serving on or advising the boards of directors of other companies.
1.2 TERM. Unless sooner terminated pursuant to Article III below, the
term of this Agreement (the "Term") shall commence on the Effective Date and be
in effect for three (3) years; provided, however, that on each anniversary date
of the Effective Date ("Anniversary Date"), the then current term of this
Agreement automatically shall be extended by an additional period of twelve (12)
months, so that as of each Anniversary Date, this Agreement shall have an
unexpired Term of three (3) years. Notwithstanding the foregoing, either party
hereto may elect not to so extend this Agreement by giving written notice of his
or its election to the other party hereto at least one hundred twenty (120) days
prior to any Anniversary Date. In the event the Company elects not to renew this
Agreement with appropriate notice as provided herein, the Company may buy out
the remaining term of the Agreement through the payment of severance to the
Executive as provided in Section 3.4.
ARTICLE II
COMPENSATION
2.1 SALARY. The Executive shall receive a base salary at an initial
rate of Three Hundred Twenty-Five Thousand Dollars ($325,000) per year (the
"Salary") payable in substantially equal installments in accordance with the pay
policy established by the Company from time to time, but not less frequently
than monthly. On each Anniversary Date, the Salary shall be increased or
decreased (but not below Three Hundred Twenty-Five Thousand Dollars ($325,000))
by a percentage which is equal to the percentage increase or decrease, as
applicable, in the "Consumer Price Index for All Urban Consumers" published by
the United States Department of Labor's Bureau of Labor Statistics for the then
most recently ended twelve (12) month period as of the date of such adjustment,
and increased by
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such additional amounts as may be determined at the discretion of the Chief
Executive Officer or President. Once adjusted, such adjusted amount shall
constitute Salary for purposes of this Agreement.
2.2 BONUS. If the Company's earnings per share equal or exceed the
earnings goals set by the Board (the "Target"), then no more than ten (10) days
following the date the Company publicly announces its earnings, the Company
shall pay the Executive a discretionary bonus ("Bonus") based on the Executive's
performance, benefit to the Company at large, and the extent to which the
Company equals or exceeds the Target. Such Bonus shall be discretionary, except
that if the Company's earnings per share equal or exceed the Target, the
Executive shall receive a bonus of not less than fifty percent (50%) of his
Salary.
2.3 EXECUTIVE BENEFITS AND PERQUISITES. During the Term, the Company
shall provide and/or pay for employee benefits and perquisites that are, in the
aggregate, no less favorable than the employee benefits and perquisites that the
Executive enjoys as of the Effective Date, as may be increased from time to
time, including without limitation:
(a) comprehensive individual health insurance, including dependent
coverage;
(b) life insurance coverage in the amount of One Million Dollars
($1,000,000) any proceeds of which shall be payable to the Executive's
designated beneficiary or his estate;
(c) four (4) weeks paid vacation annually;
(d) disability insurance coverage in a monthly benefit amount equal to
the sum of 100% of Executive's Salary plus "Bonus Amount" (as defined
in Section 3.4(a));
(e) a leased automobile for which the Company shall pay a monthly
lease payment in the amount of Seven Hundred Forty-Five Dollars
($745.00) per month, as may be increased from time to time, or at the
Company's discretion, an automobile allowance of equal value.
(f) participation in the Company's SERP(s); and
(g) reimbursement for a one-time initiation fee(s) not to exceed
$7,500 (if not used within the first two (2) years of this Agreement,
the Executive may apply the $7,500 towards dues at a country club(s)),
and the cost of dues, assessments and other charges for a full
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membership in one or more country club(s) of the Executive's choice, in an
amount not to exceed $7,500 per year.
Once increased, the level of benefits and perquisites shall not be
decreased without the Executive's consent.
2.4 EQUITY-BASED COMPENSATION. During the Term, the Compensation
Committee, in its complete discretion, may select the Executive to participate
in programs or enter into agreements that provide for the grant of certain
equity-based compensation or rights to the Executive.
ARTICLE III
TERMINATION AND SEVERANCE
3.1 TERMINATION; NONRENEWAL. The Company shall have the right to
terminate the Executive's employment, and the Executive shall have the right to
resign his employment with the Company at any time during the Term, for any
reason or for no stated reason, upon no less than ninety (90) days' prior
written notice (or such shorter notice to the extent provided for herein). In
addition, if there is a Change of Control (as defined in Section 3.3(b)) during
the Term of this Agreement, this Agreement automatically shall terminate on the
sixtieth (60th) day following the anniversary date of the Change of Control.
Upon the Executive's termination without "Cause" (as defined in Section
3.2) or resignation for "Good Reason" (as defined in Section 3.3) or upon the
expiration of the Term following the Company's election not to renew this
Agreement (in accordance with Section 1.2), the Executive shall be entitled to
severance as set forth in Section 3.4. Upon the Executive's resignation without
Good Reason, the Executive shall not be entitled to severance; provided,
however, that the Company may be required to pay the Executive non-competition
severance as provided in Section 4.2, below. If the Executive's
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employment is terminated because of a Permanent Disability (as defined in
Section 3.5), the Executive shall receive the benefits and payments described in
Section 3.5.
3.2 TERMINATION FOR CAUSE. (a) The Company may terminate this Agreement
for Cause following a determination by the Chief Executive Officer that Cause
exists. For purposes of this Agreement, Cause shall mean any or all of the
following:
(i) the Executive materially fails to perform his duties
hereunder;
(ii) a material breach by the Executive of his covenants under
Sections 4.1 4.2;
(iii) Executive is convicted of or pleads guilty or confesses to
a felony involving moral turpitude; or
(iv) Executive is convicted of or pleads guilty or confesses to
theft, larceny or embezzlement of Employer's tangible or intangible
property.
(b) Notwithstanding anything in Section 3.2(a) to the contrary, a
termination shall not be for Cause unless (i) the party to whom the Executive
reports notifies the Executive, in writing, of his intention to terminate the
Executive for Cause (which notice shall set forth the conduct alleged to
constitute Cause) (the "Cause Notice"); and (ii) the Executive does not cure his
conduct within sixty (60) days after the receipt of the Cause Notice.
3.3 TERMINATION FOR GOOD REASON. (a) The Executive may terminate this
Agreement for Good Reason, provided he gives the Company prior written notice
that Good Reason exists (the "Good Reason Notice"). For purposes of this
Agreement, Good Reason shall mean one or more of the following without the
Executive's prior written consent:
(i) a material diminution of the Executive's responsibilities,
title, authority or status;
(ii) the failure of the Company to pay the Executive amounts when
due under this Agreement;
(iii) the Executive's removal or dismissal from the position of
Executive Vice
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President - Facility Operations; or
(iv) a reduction in Salary or a material reduction in
benefits (other than a reduction in Salary permitted by Section
2.1).
Notwithstanding the foregoing, a termination on account of a reason
described in this Section 3.3 (a)(i) - (iv), above, shall be deemed not to be
for Good Reason unless the Executive (i) gives the Company the opportunity to
cure the condition that purports to be Good Reason, and (ii) the Company fails
to cure that condition within sixty (60) days after the receipt of the Good
Reason Notice (or, with respect to the failure to make any payment when due to
the Executive, within ten (10) days after the receipt of such notice). Nor shall
a termination on account of the reason described in this Section 3.3(a)(v) be
deemed to be for Good Reason unless the Executive gives the Company notice of
resignation no less than sixty (60) days in advance of the Executive's effective
resignation date.
(b) For purposes of this Agreement, a "Change of Control" shall be
deemed to occur if (i) there shall be consummated (x) any consolidation,
reorganization or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company's
common stock would be converted into cash, securities or other property, other
than a merger of the Company in which the holders of the Company's common stock
immediately prior to the merger have the same proportionate ownership of common
stock of the surviving corporation immediately after the merger, or (y) any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, of the assets of the
Company, or (ii) the stockholders of the Company shall approve any plan or
proposal for liquidation or dissolution of the Company, or (iii) any person (as
such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act, including
any "group" (as defined in Section 13(d)(3) of the Exchange Act) (other than the
Executive or any group controlled by the Executive)) shall become the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act) of twenty
percent (20%) or more of the Company's outstanding
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common stock (other than pursuant to a plan or arrangement entered into by such
person and the Company) and such person discloses its intent to effect a change
in the control or ownership of the Company in any filing with the Securities and
Exchange Commission, or (iv) within any twenty-four (24) month period beginning
on or after the Effective Date, the persons who were directors of the Company
immediately before the beginning of such period (the "Incumbent Directors")
shall cease (for any reason other than death, disability or retirement) to
constitute at least a majority of the Board or the board of directors of any
successor to the Company, provided that, any director who was not a director as
of the Effective Date shall be deemed to be an Incumbent Director if such
director was elected to the Board by, or on the recommendation of or with the
approval of, at least two-thirds of the directors who then qualified as
Incumbent Directors either actually or by prior operation of this Section
3.3(b)(iv) unless such election, recommendation or approval was the result of
any actual or threatened election contest of the type contemplated by Regulation
14a-11 promulgated under the Exchange Act or any successor provision.
Notwithstanding the foregoing, if the employment agreement of the Company's CEO
or President has a change of control provision which is triggered by an earlier
event not stated herein, then such event shall also be a Change of Control for
purposes of this Agreement.
3.4 SEVERANCE. If the Executive resigns for Good Reason, is terminated
without Cause, there is a Change of Control in the Company, or the Company
elects not to renew this Agreement in accordance with Section 1.2, above:
(a) the Company shall cause the Executive's outstanding
options which are not immediately exercisable to vest and become
immediately exercisable and the restrictions on equity held by
the Executive which are scheduled to lapse solely through the
passage of time to lapse (such events collectively referred to as
"Acceleration of Equity Rights") and Executive shall have
twenty-four (24) months from the date of termination to exercise
any vested options; and
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(b) the Company shall pay the Executive an amount (the
"Severance Amount") equal to three (3) times the sum of his
Salary in the year of termination or the immediately preceding
year, whichever is greater, and the Bonus Amount, which shall be
the greater of (i) the Executive's Bonus in the year of
termination, (ii) his Bonus in the immediately preceding calendar
year, or (iii) 50% of the Salary amount used for severance
calculations. Such Severance Amount shall be payable in cash as
follows:
(x) no later than ten (10) calendar days after the effective
date of Executive's termination or a Change of Control, the
Company shall pay the Executive one-half (1/2) of the Severance
Amount in a lump sum;
(y) commencing on the first day of the month following the
effective date of Executive's termination, Executive's
resignation for Good Reason, or the Company's notice to Employee
of its intention not to renew this Agreement, and on the first
day of the month thereafter for a period of eighteen months (18)
months, the Company shall pay the remaining one-half (1/2) of the
Severance Amount to the Executive in equal monthly installments.
Notwithstanding the foregoing, in the event of a Change of
Control, the Company shall pay the remaining one-half (1/2) of
the Severance Amount to Executive in a lump sum if Executive is
terminated without cause before the anniversary date of a Change
of Control, or upon the Agreement's automatic termination as
provided in Section 3.1. Such lump sum shall be paid within ten
(10) calendar days of the Executive's termination or the
Agreement's automatic termination and shall constitute the total
remaining Severance Amount (excluding Continued Benefits) to
which the Executive is entitled hereunder.
(c) the Company shall provide for a period of eighteen (18)
months following the effective date of the Executive's
termination (including a termination resulting from the Company's
election not to renew the Term or renegotiate this Agreement
after its automatic termination following
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a Change of Control), continued employee benefits and coverage for the Executive
and his dependents of the type and at a level of coverage comparable to the
coverage in effect at the time of termination or the preceding year, whichever
is greater ("Continued Benefits"), including but not limited to those benefits
and perquisites set forth in Section 2.3. Such allowances, benefits and
coverages, etc., to be not less than those in effect on the effective date of
Executive's termination or the preceding year, whichever is greater.
Notwithstanding the foregoing, if any of the Continued Benefits or other
benefits to be provided hereunder have been decreased or otherwise negatively
affected within twelve (12) months prior to the effective date of the
Executive's termination, the reference for measuring such benefit shall be the
date prior to such reduction rather than the date of such termination.
3.5 TERMINATION FOR DISABILITY. (a) The Company may terminate the
Executive following a determination by the Chief Executive Officer or President
that the Executive has a Permanent Disability; provided, however, that no such
termination shall be effective (i) prior to the expiration of the six (6) month
period following the date the Executive first incurred the condition which is
the basis for the Permanent Disability or (ii) if the Executive begins to
substantially perform the significant aspects of his regular duties prior to the
proposed effective date of such termination. For purposes of this Agreement,
"Permanent Disability" shall mean the Executive's inability, by reason of any
physical or mental impairment, to substantially perform the significant aspects
of his regular duties, as contemplated by this Agreement, which inability is
reasonably contemplated to continue for at least one (1) year from its
incurrence and at least ninety (90) days from the effective date of the
Executive's termination. Any question as to the existence, extent, or
potentiality of the Executive's Permanent Disability shall be determined by a
qualified independent physician selected by the Executive (or, if the Executive
is unable to make such selection, by the person designated in writing by
Executive prior to
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his inability to make such selection, and in the absence of such designation by
an adult member of the Executive's immediate family) and reasonably acceptable
to the Company.
(b) If the Executive is terminated because of his
Permanent Disability, the Company shall (i) provide for the
Acceleration of Equity Rights; (ii) pay for a period of
thirty-six (36) months following the effective date of such
termination (the "Disability Period") the Executive one
hundred (100%) percent of his Salary plus Bonus, offset by
the amount, if any, paid to the Executive under the salary
replacement portion of disability benefits paid under a
disability plan or policy paid for by the Company, and (iii)
provide him with Continued Benefits for the first eighteen
(18) months of the Disability Period.
3.6 DEATH OR DISABILITY AFTER TERMINATION. Should the Executive die or
become disabled before receipt of any or all payments to which the Executive is
entitled to under Section 3.4 (or in the case of the Executive's death following
his termination on account of Permanent Disability, before receipt of all
payments under Section 3.5) then the balance of the payments to which the
Executive is entitled shall continue to be paid to the Executive (in the case of
his disability) or to the executors or administrators of the Executive's estate
(in the event of the Executive's death); provided, however, that the Company
may, at any time within its discretion, accelerate any payments and pay the
Executive or his estate the present value of such payments in a lump sum cash
payment. For purposes of determining the present value under this Section 3.6,
the interest rate shall be the prime rate of Citibank, N.A.
ARTICLE IV
COVENANTS OF THE EXECUTIVE
4.1 CONFIDENTIAL INFORMATION. In connection with his employment at the
Company, the Executive will have access to confidential information consisting
of some or all of the following
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categories of information:
(a) Financial Information, including but not limited to
information relating to the Company's earnings, assets, debts, prices,
pricing structure, volume of purchases or sales or other financial data
whether related to the Company or generally, or to particular products,
services, geographic areas, or time periods;
(b) Supply and Service Information, including but not limited
to information relating to goods and services, suppliers' names or
addresses, terms of supply or service contracts or of particular
transactions, or related information about potential suppliers to the
extent that such information is not generally known to the public, and
the extent that the combination of suppliers or use of a particular
supplier, though generally known or available, yields advantages to the
Company details of which are not generally known;
(c) Marketing Information, including but not limited to
information relating to details about ongoing or proposed marketing
programs or agreements by or on behalf of the Company, sales forecasts,
advertising formats and methods or results of marketing efforts or
information about impending transactions;
(d) Personnel Information, including but not limited to
information relating to employees' personnel or medical histories,
compensation or other terms of employment, actual or proposed
promotions, hirings, resignation, disciplinary actions, terminations or
reasons therefor, training methods, performance, or other employee
information; and
(e) Customer Information, including but not limited to
information relating to past, existing or prospective customers' names,
addresses or backgrounds, records of agreements and prices, proposals
or agreements between customers and the Company, status of customers'
accounts or credit, or related information about actual or prospective
customers as well as customer lists.
All of the foregoing are hereinafter referred to as "Trade Secrets."
The Company and the Executive consider their relation one of confidence with
respect to Trade Secrets. Therefore, during and after the employment by the
Company, regardless of the reasons that such employment ends, the Executive
agrees:
(aa) To hold all Trade Secrets in confidence and not
discuss, communicate or transmit to others, or make any
unauthorized copy of or use the Trade Secrets in any capacity,
position or business except as it directly relates to the
Executive's employment by the Company;
(bb) To use the Trade Secrets only in furtherance of
proper employment related reasons of the Company to further
the interests of the Company;
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(cc) To take all reasonable actions that the Company
deems necessary or appropriate, to prevent unauthorized use
or disclosure of or to protect the Company's interest in the
Trade Secrets; and
(dd) That any of the Trade Secrets, whether prepared
by the Executive or which may come into the Executive's
possession during the Executive's employment hereunder, are
and remain the property of the Company and its affiliates,
and all such Trade Secrets, including copies thereof,
together with all other property belonging to the Company or
its affiliates, or used in their respective businesses, shall
be delivered to or left with the Company.
This Agreement does not apply to (i) information that by means other
than the Executive's deliberate or inadvertent disclosure becomes known to the
public; (ii) disclosure compelled by judicial or administrative proceedings
provided the Executive affords the Company the opportunity to obtain assurance
that compelled disclosures will receive confidential treatment; and (iii)
information independently developed by the Executive, the development of which
was not a breach of this Agreement.
4.2 NON-COMPETITION. In consideration of the Executive's employment
hereunder, during the Term and for a period of eighteen (18) months thereafter
(or in the event of the Executive's termination for Cause, for a period of one
(1) year thereafter), subject to the exceptions set forth below in this Section
4.2, the Executive agrees that he will not, without the express written consent
of the Company, for the Executive or on behalf of any other person, firm, entity
or other enterprise (i) directly or indirectly solicit for employment or
recommend to any subsequent employer of the Executive the solicitation for
employment of any person who, at the time of such solicitation is employed by
Company or any affiliate thereof, (ii) directly or indirectly solicit, divert,
or endeavor to entice away any customer of the Company or any affiliate thereof,
or otherwise engage in any activity intended to terminate, disrupt, or interfere
with the Company's or any affiliate's relationship with a customer, supplier,
lessor or other person, or (iii) be employed by, be a director, officer or
manager of, act as a consultant for, be a partner in, have a proprietary
interest in, give advice to, loan money to or otherwise associate with,
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any person, enterprise, partnership, association, corporation, joint venture or
other entity which is directly or indirectly in the business of owning,
operating or managing any (1) healthcare facility or business, including but not
limited to, any subacute healthcare facility, rehabilitation hospital,
rehabilitation services provider, nursing home, or home health care business, or
(2) any other business similar to a business which is or was owned, operated or
managed by the Company during the Term or during the period that this Section
4.2 shall apply to the Executive, unless such business comprises (and has during
the preceding twelve (12) month period comprised) less than five percent (5%) of
the Company's gross revenues; and, in the case of any facility or business
described, in either case, which competes with any such type of facility or
business then operated by the Company or any of its subsidiaries; except that
the provisions of this Section 4.2 shall not apply if the Executive is
terminated without cause before the anniversary of a Change of Control, or if
the Executive resigns without Good Reason and the Company does not pay him
non-competition severance pay (not to include Continued Benefits) of one-twelfth
(1/12) of the sum of Executive's salary plus bonus in the previous year for each
month (not to exceed eighteen (18)) the Company elects to bind the Executive to
the non-competition obligation in this Section 4.2.
This provision shall not be construed to prohibit the Executive from
owning up to 10% of the outstanding voting shares of the equity securities of
any company whose common stock is listed for trading on any national securities
exchange or on the NASDAQ System or serving as a director or advisor to the
board of directors of any company. 4.2 shall only apply to businesses and
operations located in, or otherwise conducted in, the United States.
4.3 REMEDIES FOR BREACH OF ARTICLE IV. In the event that the Executive
materially violates he covenants contained in this Article IV after his
termination of employment under circumstances which entitle him to payments or
benefits under Section 3.4, the Company may, at its election, upon ten
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(10) days' prior notice, terminate the Severance Period and cease providing the
Executive with such payments and benefits. In addition, the Executive
acknowledges and agrees that the amount of damages in the event of the
Executive's breach of this Article IV will be difficult, if not impossible, to
ascertain. The Executive therefore agrees that the Company, in addition to, and
without limiting any other remedy or right it may have, shall have the right to
an injunction enjoining any breach of the covenants made by the Executive in
this Article IV. The Executive further agrees that in the event an injunction is
granted in connection with actual or alleged breach of the noncompetition
convenants herein, the eighteen (18) month restrictive period shall begin to run
from the date the injunction is issued (and not from the effective date of the
Executive's termination).
ARTICLE V
AMENDMENT AND ASSIGNMENT
5.1 RIGHT OF THE EXECUTIVE TO ASSIGN. The Executive may not assign,
transfer, pledge or hypothecate or otherwise transfer his rights, obligations,
interests and benefits under this Agreement and any attempt to do so shall be
null and void.
5.2 RIGHT OF COMPANY TO ASSIGN. This Agreement shall be assignable and
transferable by the Company and any such assignment or transfer shall inure to
the benefit of and be binding upon the Executive, the Executive's heirs and
personal representatives, and the Company and its successors and assigns. The
Executive agrees to execute all documents necessary to ratify and effectuate
such assignment. An assignment of this Agreement by the Company shall not
release the Company from its monetary obligations under this Agreement.
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5.3 AMENDMENT AND WAIVER. No change or modification of this Agreement
shall be valid unless it is in writing and signed by both parties hereto. No
waiver of any provisions of this Agreement shall be valid unless in writing and
signed by the person or party to be charged.
ARTICLE VI
GENERAL
6.1 GOVERNING LAW. This Agreement shall be subject to and governed by
the laws of the State of Maryland.
6.2 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Company and the Executive and their respective heirs, legal
representatives, executors, administrators, successors and permitted assigns.
6.3 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all other prior agreements pertaining to the
subject matter herof, either oral or written, between the parties hereto;
provided, however, that this Agreement does not supersede any agreements
pertaining to stock options which have been granted as of the Effective Date,
except to the extent that any such option agreement contains provisions which
are contrary to the provisions of this Agreement (including provisions regarding
the Acceleration of Equity Rights), or obligation of the Executive regarding the
Company's proprietary and confidential tangible and intangible property.
6.4 MITIGATION. 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 may any payments provided for under
this Section be reduced by any amounts earned by the Executive, except as
provided in Article IV.
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6.5 SURVIVORSHIP. The respective rights and obligations of the parties
hereunder shall survive the termination of this Agreement to the extent
necessary to preserve the rights and obligations of the parties under this
Agreement.
6.6 NOTICES. All notices, demands, requests, consents, approvals or
other communications required or permitted hereunder shall be in writing and
shall be delivered by hand, registered or certified mail with return receipt
requested or by a nationally recognized overnight delivery service, in each case
with all postage or other delivery charges prepaid, and to the address of the
party to whom it is directed as indicated below, or to such other address as
such party may specify by giving notice to the other in accordance with the
terms hereof. Any such notice shall be deemed to be received (i) when delivered,
if by hand, (ii) on the next business day following timely deposit with a
nationally recognized overnight delivery service ,or (iii) on the date shown on
the return receipt as received or refused or on the date the postal authorities
state that delivery cannot be accomplished, if sent by registered of certified
mail, return receipt requested.
If to the Company: Integrated Health Services, Inc
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxx, Executive Vice President
and General Counsel, or then General Counsel
If to the Executive: Xxxx X. Xxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
6.7 INDEMNIFICATION. The Company agrees to maintain Director's and
Officer's liability insurance at a level not less than the level in effect on
the Effective Date, or to the extent such level is increased during the Term, at
such increased level; provided, however, that the level of insurance may be
decreased with the Executive's written consent. To the extent not covered by
such liability insurance, the Company shall indemnify and hold the Executive
harmless to the fullest extent permitted by
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Delaware law against any judgments, fines, amounts paid in settlement and
reasonable expenses (including reasonable attorneys' fees), and advance amounts
necessary to pay the foregoing at the earliest time and to the fullest extent
permitted by law, in connection with any claim, action or proceeding (whether
civil or criminal) against the Executive as a result of his serving as an
officer or director of the Company or in any capacity at the request of the
Company in or with regard to any other entity, employee benefit plan or
enterprise. This indemnification shall be in effect during the Term and
thereafter and shall be in addition to and not in lieu of any other
indemnification rights the Executive otherwise may have.
6.8 ATTORNEYS' FEES. Upon presentation of an invoice, the Company
shall pay directly or reimburse the Executive for all reasonable attorneys' fees
and costs incurred by the Executive:
(a) in connection with any bone fide dispute over the terms of
this Agreement submitted by Executive to arbitration pursuant to Section 6.9 ,
unless there is a determination that the Executive had no objectively reasonable
basis in fact or theory for his claim; or
(b) in connection with any other event indemnifiable by the
Company pursuant to insurance coverage or Delaware law in which the Executive
engages separate representation.
6.9 ARBITRATION. Except as otherwise provided in Section 4.3, any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted before a panel of three
arbitrators in Baltimore, Maryland, in accordance with the rules of the American
Arbitration Association then in effect, and judgement may be entered on the
arbitrators' award in any court having jurisdiction. The Company shall pay all
costs of the American Arbitration Association and the arbitrator. Each party
shall select one arbitrator, and the two so designated shall select a third
arbitrator. If either party shall fail to designate an arbitrator within seven
(7) days after arbitration is requested, or if the two arbitrators shall fail to
select a third arbitrator within
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fourteen (14) days after arbitration is requested, then an arbitrator shall be
selected by the American Arbitration Association upon application of either
party. Notwithstanding the foregoing, the Executive shall be entitled to seek
specific performance from a court of the Executive's right to be paid until the
date of termination during the pendency of any dispute or controversy arising
under or in connection with this Agreement and the Company shall have the right
to obtain injunctive relief from a court.
6.10 SEVERABILITY. No provision in this Agreement if held
unenforceable shall in any way invalidate any other provisions of this
Agreement, all of which shall remain in full force and effect.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officers and its corporate seal to be hereunto affixed,
and the Executive has hereunto set the Executive's hand on the day and year
first above written.
COMPANY EXECUTIVE
INTEGRATED HEALTH SERVICES, INC.,
a Delaware corporation
By: ___________________________________ _________________________________
XXXX X. XXXXXX
Name: _________________________________
Title: ________________________________
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