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Exhibit 10.20
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Employment Agreement") is dated this 26TH
day of January, 1998, but effective as of the 1st day of March, 1998, between
RES-CARE, INC., a Kentucky corporation (the "Company"), and X. XXXXXX XXXXXXXX
(the "Employee").
RECITALS:
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WHEREAS, the Company and the Employee entered into an Employment
Agreement dated as of March 1, 1992, as amended and restated by that certain
Amended and Restated Employment Agreement dated as of April 27, 1992 and
amended and restated by that certain Second Amended and Restated Employment
Agreement dated as of March 12, 1996 (collectively, the "Agreement");
WHEREAS, the Agreement was automatically renewed for one (1) year and
may be terminated effective February 28, 1998 by either party hereto; and
WHEREAS, the Company and Employee desire that Employee's employment
with the Company continue and they further desire to supersede the Agreement,
effective March 1, 1998, by executing this Employment Agreement and agreeing to
be bound by the terms thereof.
AGREEMENT:
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NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as follows:
1. EMPLOYMENT. The Company hereby employs the Employee, and the Employee
accepts such employment, upon the terms and conditions set forth
herein.
2. TERM. Unless previously terminated as hereinafter provided, the
initial term of this Agreement shall commence on March 1, 1998 and
shall continue until February 28, 1999 (the "Initial Term"). This
Agreement may be extended in writing by the parties hereto upon
mutually agreeable terms for successive periods of one (1) year each
(the "Renewal Term(s)"). The Initial Term and any Renewal Terms are
sometimes collectively referred to as the "Term."
3. DUTIES.
(a) EMPLOYMENT AS SENIOR EXECUTIVE. During the Term, the
Employee shall serve as Senior Executive of the Company. The Employee
shall, subject to the supervision and control of the President and
Chief Executive Officer of the Company (the "President") and the Board
of Directors of the Company, (i) attend in person meetings of the
Board of Directors of the Company and its Executive and Audit
Committees; (ii) participate (either in person or by telephone) in
meetings of officers of the Company relating to establishing
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the terms of acquisitions by the Company , its subsidiaries and
affiliates; (iii) participate (either in person or by telephone) in
meetings of the Boards of Directors of subsidiaries of the Company,
including but not limited to Communications Network Consultants, Inc.
and Youthtrack, Inc. (if the Employee is elected to serve as a
director or officer of such entities), without any further salary or
other compensation, including directors' fees; and (iv) provide
services to the Company with respect to other matters as the President
and Employee mutually agree.
(b) TIME AND EFFORT. During the Term, the Employee shall be
available to perform the duties described in paragraph (a) of this
Section 3 thirty-two (32) hours per calendar week; provided, however,
that (i) Employee shall be required to perform such duties in person
not more than two (2) days per calendar week, one of which shall be
Monday of each such week or such other day of the week on which the
Company's Management Team regularly meets and the other day of the
week which shall be scheduled from time-to-time as reasonably required
for other meetings consistent with Employee's duties described in
paragraph (a) of this Section 3; (ii) the balance of such weekly hours
may be performed by Employee from his office at his residence or other
locations; and (iii) subject to the restrictions in Section 8 hereof,
the Employee may (A) invest his personal assets and (B) participate in
civic and charitable activities in such form or manner as will not
interfere with the satisfactory performance of the duties described in
Section 3(a) hereof.
4. COMPENSATION.
(a) BASE SALARY. The Company shall pay to the Employee during
the Term a fixed, annual salary (the "Base Salary"), which shall be
$100,000. The Base Salary shall be due and payable in substantially
equal bi-weekly installments or in such other installments as may be
necessary to comport with the Company's normal pay periods for all
employees.
(b) PARTICIPATION IN BENEFIT PLANS. The Employee shall be
entitled to participate in (i) health insurance, (ii) term life
insurance, (iii) pension plan, (iv) sick leave, and (v) long-term
disability and other benefits generally made available to officers of
the Company during the Term, subject to any eligibility, coverage,
qualification or other limitations or restrictions applicable to such
benefits.
(c) VACATION. The Employee shall be entitled to an annual
vacation leave of twenty (20) days at full pay, such vacation to be
taken during each relevant year at time(s) mutually agreeable to the
parties hereto. The Employee shall be entitled to carry over accrued
vacation leave to succeeding calendar years in accordance with the
Company's established policy.
(d) OUT-OF-POCKET EXPENSES. The Company shall promptly pay
the ordinary, necessary and reasonable expenses incurred by Employee
in the performance of Employee's
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duties hereunder (or if such expenses are paid directly by Employee
shall promptly reimburse him for such payment), consistent with the
reimbursement policies adopted by the Company from time-to-time.
(e) WITHHOLDING OF TAXES; INCOME TAX TREATMENT. If, upon the
payment of any compensation or benefit to the Employee under this
Employment Agreement (including, without limitation, in connection
with the exercise of any option), the Company determines in its
discretion that it is required to withhold or provide for the payment
in any manner of taxes, including but not limited to, federal income
or social security taxes, state income taxes or local income taxes,
the Employee agrees that the Company may satisfy such requirement by:
(i) withholding an amount necessary to satisfy such
withholding requirement from the Employee's compensation or
benefit; or
(ii) conditioning the payment or transfer of such
compensation or benefit upon the Employee's payment to the
Company of an amount sufficient to satisfy such withholding
requirement.
The Employee agrees that he will treat all of the amounts payable
pursuant to this Employment Agreement as compensation for income tax
purposes.
5. TERMINATION. The Employee's employment hereunder may be terminated
under this Employment Agreement as follows, subject to the Employee's
rights pursuant to Section 6 hereof:
(a) DEATH. The Employee's employment hereunder shall
terminate upon his death.
(b) DISABILITY. If, as a result of the Employee's incapacity
due to physical or mental illness, the Employee shall have been absent
from his duties hereunder on a full-time basis for 180 consecutive
calendar days, and within thirty (30) days after written Notice of
Termination is given (which may occur no earlier than thirty (30) days
before, but at any time after, the end of such 180-day period), the
Employee shall not have returned to the performance of his duties
hereunder on a full-time basis, the Company may terminate the
Employee's employment hereunder.
(c) CAUSE. The Company may terminate the Employee's
employment hereunder for Cause. For purposes of this Employment
Agreement, the Company shall have "Cause" to terminate the Employee's
employment because of the Employee's personal dishonesty, intentional
misconduct, breach of fiduciary duty involving personal profit,
failure to perform his duties hereunder, conviction of, or plea of
NOLO CONTENDERE to, any law, rule or regulation
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(other than traffic violations or similar offenses) or breach of any
provision of this Employment Agreement.
(d) WITHOUT CAUSE. By appropriate action of the President or
the Board of Directors of the Company, the Company shall have the
right to terminate the Employee's employment under this Employment
Agreement at any time without Cause (as defined in Subsection 5(c)).
(e) VOLUNTARY TERMINATION. By not less than thirty (30) days
prior written notice to the President, Employee may voluntarily
terminate his employment hereunder.
(f) NOTICE OF TERMINATION. Any termination during the term of
this Employment Agreement of the Employee's employment hereunder
(other than termination pursuant to Section 5(a) above) shall be
communicated by written Notice of Termination to the Employee hereto
(except in the case of termination as described in Section 5(e) above
written Notice of Termination shall be delivered by the Employee). For
purposes of this Employment Agreement, a "Notice of Termination" shall
mean a notice which shall indicate the specific termination provision
in this Employment Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee's employment under the provision
so indicated.
(g) DATE OF TERMINATION. The "Date of Termination" shall, for
purposes of this Employment Agreement, mean: (i) if the Employee's
employment is terminated by his death, the date of his death; (ii) if
the Employee's employment is terminated on account of disability
pursuant to Section 5(b) above, thirty (30) days after Notice of
Termination is given (provided that the Employee shall not, during
such 30-day period, have returned to the performance of his duties on
a full-time basis), (iii) if the Employee's employment is terminated
by the Company for Cause pursuant to Section 5(c) above, the date
specified in the Notice of Termination, (iv) if the Employee's
employment is terminated by the Employer without Cause, pursuant to
Section 5(d) above, thirty (30) days after Notice of Termination is
given, (v) if the Employee's employment is terminated voluntarily
pursuant to Section 5(e) above, the date specified in the Notice of
Termination, and (vi) if the Employee's employment is terminated by
reason of the failure of either party to agree to extend the Term, the
last day of the then effective Term.
6. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) DEATH. If the Employee's employment shall be terminated
by reason of his death, the Employee shall continue to receive his
full Base Salary until the date of his death.
(b) DISABILITY. During any period that the Employee fails to
perform his duties hereunder as a result of incapacity due to physical
or mental illness, the Employee shall continue to receive his full
Base Salary until the Date of Termination. Upon termination due
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to death prior to a termination as specified in the preceding sentence,
Section 6(a) above shall apply.
(c) CAUSE. If the Employee's employment shall be terminated
for Cause, the Company shall, through the Date of Termination,
continue to pay the Employee his full Base Salary, and shall not be
eligible for any severance payment of any nature.
(d) WITHOUT CAUSE. If the Employee's employment shall be
terminated without Cause, and such Notice of Termination shall have
been given after a Change of Control (as defined below) shall be
applicable to the Company, the Employee shall continue to receive his
full Base Salary until the Date of Termination and for one (1) year
after the Date of Termination. In all other cases in which the
Employee's employment shall be terminated without Cause, the Employee
shall continue to receive his full Base Salary until the Date of
Termination and for six (6) months after the Date of Termination. A
"Change of Control" shall be applicable to the Company --
(i) if any person shall acquire more than fifty
percent (50%) of the common capital stock of the Company
through a tender offer, exchange offer or otherwise;
(ii) if the Company shall be a party to a binding
agreement to any merger, consolidation or reorganization in
which any person who on the date hereof does not own more
than ten percent (10%) of the issued and outstanding common
capital stock of the Company acquires, beneficially or of
record, more than fifty percent (50%) of such stock; or
(iii) there shall be a sale of all or substantially
all of the assets of the Company.
(e) EXPIRATION OF TERM. If the Employee's employment shall be
terminated by reason of expiration of the Term (irrespective of which
party declined to extend the Term), the Company shall, through the
Date of Termination, continue to pay the Employee his full Base
Salary.
(f) VOLUNTARY TERMINATION. If the Employee's employment shall
be terminated pursuant to Section 5(e) hereof, the Company shall,
through the Date of Termination, continue to pay the Employee his full
Base Salary, and the Employee shall not be entitled to any severance
payment of any nature.
(g) NO FURTHER OBLIGATIONS AFTER PAYMENT. After all payments,
if any, have been made to the Employee pursuant to any of paragraphs
(a) through (f) of this Section 6, the Company shall have no further
obligations to the Employee under this Employment Agreement other than
the provision of any employee benefits required to be continued under
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applicable law, or the reimbursement of any then unreimbursed expenses
as provided in Section 4(d) hereof.
7. DUTIES UPON TERMINATION. Upon the termination of Employee's employment
hereunder for any reason whatsoever (including but not limited to the
failure of the parties hereto to agree to the extension of this
Employment Agreement pursuant to Section 3 hereof), Employee shall
promptly return to the Company any Confidential Information (as
defined in Section 8(d)(iii) hereof) and whether or not constituting
Confidential Information, any technical data, performance information
and reports, sales or marketing plans, documents or other records,
rolodexes, and any manuals, drawings, tape recordings, computer
programs, discs, and any other physical representa tions of any other
information relating to the Company, its subsidiaries or affiliates or
to the Business (as defined in Section 8(d)(iv) hereof) of the
Company. Employee hereby acknowledges that any and all of such
documents, items, physical representations and information area and
shall remain at all times the exclusive property of the Company.
8. RESTRICTIVE COVENANTS.
(a) ACKNOWLEDGMENTS. Employee acknowledges that (i) his
services hereunder are of a special, unique and extraordinary
character and that his position with the Company places him in a
position of confidence and trust with the operations of the Company,
its subsidiaries and affiliates (collectively, the "Res-Care
Companies") and allows him access to Confidential Information, (ii)
the Company has provided Employee with a unique opportunity as its
Senior Executive, (iii) the Employee has served as a director of the
Company for more than thirteen (13) years and as an executive officer
of the Company for more than five (5) years, (iv) the nature and
periods of the restrictions imposed by the covenants contained in this
Section 8 are fair, reasonable and necessary to protect and preserve
for the Company the benefits of Employee's employment hereunder, (v)
the Agreement provided for restrictions substantially identical to the
restrictions in this Section 8, (vi) the Res-Care Companies would
sustain great and irreparable loss and damage if Employee were to
breach any of such covenants, (vii) the Res-Care Companies conduct and
are aggressively pursuing the conduct of their business actively in
and throughout the entire Territory (as defined in paragraph (d)(ii)
of this Section 8), and (viii) the Territory is reasonably sized
because the current Business of the Res-Care Companies is conducted
throughout such geographical area, the Res-Care Companies are
aggressively pursuing expansion and new operations throughout such
geographic area and the Res-Care Companies require the entire
Territory for profitable operations.
(b) CONFIDENTIALITY COVENANT. Having acknowledged the
foregoing, Employee covenants that without limitation as to time, he
will not directly or indirectly disclose or use or otherwise exploit
for his own benefit, or the benefit of any other person, except as may
be necessary in the performance of his duties hereunder, any
Confidential Information.
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(c) COVENANTS. Having acknowledged the statements in Section
8(a) hereof, Employee covenants and agrees with the Res-Care Companies
that he will not, directly or indirectly, from the date hereof until
the Date of Termination of Employee's employment hereunder, and for a
period of five (5) years thereafter, directly or indirectly (i)
solicit, divert or appropriate to himself or any other person, any
business or services (similar in nature to the Business) of any person
who was an employee or an agent of any of the Res-Care Companies at
any time during the last twelve (12) months of Employee's employment
hereunder; or (ii) own, manage, operate, join, control, assist,
participate in or be connected with, directly or indirectly, as an
officer, director, shareholder, partner, proprietor, employee, agent,
consultant, independent contractor or otherwise, any person which is,
at the time, directly or indirectly, in competition within the
Territory with the Business of the Res-Care Companies.
(d) DEFINITIONS. For purposes of this Employment Agreement:
(i) For purposes of this Section 8, "termination of
Employee's employment" shall include any termination
pursuant to paragraphs (b), (c), (d) and (e) of Section 6
hereof, the termination of such Employee's employment by
reason of the failure of the parties hereto to agree to the
extension of this Agreement pursuant to Section 2 hereof or
the voluntary termination of Employee's employment hereunder.
(ii) The "Territory" shall mean the forty-eight (48)
contiguous states of the United States, the United States
Virgin Islands and Puerto Rico.
(iii) "Confidential Information" shall mean any
business information relating to the Res-Care Companies or to
the Business (whether or not constituting a trade secret),
which has been or is treated by any of the Res-Care Companies
as proprietary and confidential and which is not generally
known or ascertainable through proper means. Without limiting
the generality of the foregoing, so long as such information
is not generally known or ascertainable by proper means and
is treated by the Res-Care Companies as proprietary and
confidential, Confidential Information shall include the
following information regarding any of the Res-Care
Companies:
(1) any patent, patent application,
copyright, trademark, trade name,
service xxxx, service name,
"know-how" or trade secrets;
(2) customer lists and information
relating to (i) any client of any
of the Res-Care Companies or (ii)
any client of the operations of any
other person or entity for which
operations any of the Res-Care
Companies provides management
services;
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(3) supplier lists, pricing policies,
consulting contracts and
competitive bid information;
(4) records, operational methods and
Company policies and procedures,
including manuals and forms;
(5) marketing data, plans and strategies;
(6) business acquisition, development,
expansion or capital investment
plan or activities;
(7) software and any other
confidential technical programs;
(8) personnel information, employee
payroll and benefits data;
(9) accounts receivable and accounts
payable;
(10) other financial information,
including financial statements,
budgets, projections, earnings and
any unpublished financial
information; and
(11) correspondence and communications
with outside parties.
(iv) The "Business" of the Res-Care Companies shall
mean the business of providing juvenile treatment or
services, services to persons with mental retardation and
other developmental disabilities, including but not limited
to persons who have been dually diagnosed, services to
persons with acquired brain injuries, training services, or
providing management and/or consulting services to third
parties relating to the foregoing.
(v) The term "person" shall mean an individual, a
partnership, an association, a corporation, a trust, an
unincorporated organization, or any other business entity or
enterprise.
(e) INJUNCTIVE RELIEF, INVALIDITY OF ANY PROVISION. Employee
acknowledges that his breach of any covenant contained in this Section
8 will result in irreparable injury to the Res-Care Companies and that
the remedy at law of such parties for such a breach will be
inadequate. Accordingly, Employee agrees and consents that each of the
Res-Care Companies in addition to all other remedies available to them
at law and in equity, shall be entitled to seek both preliminary and
permanent injunctions to prevent and/or halt a breach or threatened
breach by Employee of any covenant contained in this Section 8. If any
provision of this Section 8 is invalid in part or in whole, it shall
be deemed to have been amended, whether as to time, area covered, or
otherwise, as and to the extent required for its
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validity under applicable law and, as so amended, shall be
enforceable. The parties further agree to execute all documents
necessary to evidence such amendment.
9. ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Employment Agreement
constitutes the entire agreement between the parties pertaining to the
subject matter contained in it and supersedes all prior and
contemporaneous agreements, representations, and understandings of the
parties, including but not limited to the Agreement. No supplement,
modification, or amendment of this Employment Agreement shall be
binding unless executed in writing by all parties hereto (other than
as provided in the next to last sentence of Section 8(e) hereof). No
waiver of any of the provisions of this Employment Agreement will be
deemed, or will constitute, a waiver of any other provision, whether
or not similar, nor will any waiver constitute a continuing waiver. No
waiver will be binding unless executed in writing by the party making
the waiver.
10. SUCCESSORS AND ASSIGNS; ASSIGNMENT. This Employment Agreement shall be
binding on, and inure to the benefit of, the parties hereto and their
respective heirs, executors, legal representatives, successors and
assigns; PROVIDED, HOWEVER, that this Employment Agreement is intended
to be personal to the Employee and the rights and obligations of the
Employee hereunder may not be assigned or transferred by him.
11. NOTICES. All notices, requests, demands and other communications
required or permitted to be given or made under this Employment
Agreement, or any other agreement executed in connection therewith,
shall be in writing and shall be deemed to have been given on the date
of delivery personally or upon deposit in the United States mail
postage prepaid by registered or certified mail, return receipt
requested, to the appropriate party or parties at the following
addresses (or at such other address as shall hereafter be designated
by any party to the other parties by notice given in accordance with
this Section):
TO THE COMPANY:
Res-Care, Inc.
00000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx,
President and Chief Executive Officer
TO THE EMPLOYEE:
X. Xxxxxx Sandford
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
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12. EXECUTION IN COUNTERPARTS. This Employment Agreement may be executed
in multiple counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same document.
13. FURTHER ASSURANCES. The parties each hereby agree to execute and
deliver all of the agreements, documents and instruments required to
be executed and delivered by them in this Employment Agreement and to
execute and deliver such additional instruments and documents and to
take such additional actions as may reasonably be required from time
to time in order to effectuate the transactions contemplated by this
Employment Agreement.
14. SEVERABILITY OF PROVISIONS. The invalidity or unenforceability of any
particular provision of this Employment Agreement shall not affect the
other provisions hereof and this Employment Agreement shall be
construed in all respects as if such invalid or unenforceable
provisions were omitted.
15. GOVERNING LAW. This Employment Agreement is executed and delivered in,
and shall be governed by, enforced and interpreted in accordance with
the laws of, the Commonwealth of Kentucky.
16. TENSE; CAPTIONS. In construing this Employment Agreement, whenever
appropriate, the singular tense shall also be deemed to mean the
plural, and vice versa, and the captions contained in this Employment
Agreement shall be ignored.
17. SURVIVAL. The provisions of Sections 6, 7 and 8 hereof shall survive
the termination, for any reason, of this Employment Agreement, in
accordance with their terms.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement on the day and year set forth above.
RES-CARE, INC.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
President and Chief Executive Officer
/s/ X. Xxxxxx Xxxxxxxx
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X. Xxxxxx Sandford
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