AGREEMENT (the "Agreement"), executed on July __, 1997, effective as of
the closing date of the merger between RoTech Medical Corporation, a Florida
corporation, (the "Company") and Integrated Health Service, Inc. ("IHS") (the
"Effective Date") among Xxxxxxx X. Irish ("Irish"), the Company and IHS.
WHEREAS, the Company simultaneously with the execution of this
Agreement has entered into a merger agreement with IHS whereby the Company will
become a wholly owned subsidiary of IHS;
WHEREAS, Irish is Chief Financial Officer of the Company, an employee
and a stockholder of the Company;
WHEREAS, Irish, the Company and IHS mutually desire to terminate
Irish's employment with the Company on the Effective Date and to enter into
certain other arrangements between Irish and the Company, and Irish, the Company
and IHS mutually desire to take certain other actions contemplated herein, upon
the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the mutual agreements of the
parties hereto contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and in reliance upon
the representations of the other parties hereto contained herein, each of the
parties hereto agrees as follows:
1. RESIGNATIONS OF IRISH. Effectively immediately after the effective
time of the merger contemplated by the Merger Agreement ("Effective Time"),
Irish shall resign all
appointments she holds as a officer, employee or agent of the Company. On the
Effective Date, Irish shall execute and deliver to the Company a letter of
resignation from all appointments she holds with the Company substantially in
the form of Exhibit A hereto. From and after the Effective Date, Irish shall not
be and not hold herself out as a officer, employee, agent or consultant of the
Company (except as permitted by paragraph 2 hereto) and shall relinquish, except
as otherwise provided herein all rights to any additional payments from the
Company under any plan, program or policy maintained by the Company (other than
any accrued entitlements under the provisions of the Company's 401(k) plan and
group medical plan) for the benefit of Company employees.
2. CONSULTING ARRANGEMENT. (a) From the Effective Date, until the
second anniversary thereof (the "Consulting Term"), the Company shall engage
Irish to serve as a consultant to the Company, and Irish hereby accepts such
engagement.
(b) During the Consulting Term, Irish shall furnish such consulting and
advisory services to the Company as the Company may reasonably request (and only
such consulting and advisory services as the Company shall so request) and shall
report directly to the Board of Directors of the Company (the "Board"), (unless
the Board shall decide otherwise) or a designee of the Board. During the
Consulting Term Irish's services shall be available to the Company as follows:
First through twelfth month 24 hours/week
Thirteenth through twenty-fourth month 16 hours/week
(c) As compensation for the consulting services rendered hereunder, the
Company shall pay to Irish a consulting fee in a single sum payable upon
execution of this Agreement in the amount of $250,000. In addition, the Company
shall reimburse Irish for all
2
reasonable and necessary out-of-pocket expenses incurred by her in connection
with the consulting and advisory services she performs at the request of the
Company pursuant to the Agreement upon presentation of proper vouchers
evidencing such expenses and the purposes for which they were incurred.
(d) In performing her duties as a consultant, Irish shall be, and only
hold herself out as, an independent contractor. The Company shall not treat
Irish as an employee of the Company or withhold any federal, state or local
taxes of any nature on behalf of Irish from the compensation to be paid
hereunder. Nothing contained herein shall make Irish the agent, employee, joint
venturer or partner of the Company or provide Irish with the power or authority
to bind the Company to any contract, agreement or arrangement with any person or
entity.
3. NONCOMPETITION.
(a) Disclosure. Irish has disclosed to the Board and IHS, in writing,
all healthcare-related interests, investments, or business activities, whether
as proprietor, stockholder, partner, co-venturer, director, officer, employee,
independent contractor, agent, consultant, or in any other capacity or manner
whatsoever.
(b) Prohibited Activity Without the written consent of a majority of
the Board of the Company, Irish may not for a period of fifteen years from the
date hereof, engage in any of the following actions following the termination of
her employment with the Company:
(i) own, participate or serve, either directly or indirectly, whether
as an officer, employee, independent contractor, agent, consultant, or in any
other capacity or manner whatsoever in any business or service activity that
engages in the "Primary Business" in
3
which IHS, the Company or any of their respective subsidiaries or affiliates is
engaged, within a radius of 100 miles from any site, facility, or location which
is owned, managed or operated by or affiliated with IHS or the Company or any of
their respective subsidiaries and affiliates currently or within 60 months of
the Effective Date. For purposes of this Agreement, "Primary Business" shall
mean the business of providing home respiratory therapy, home infusion therapy,
and other medical services and equipment to patients referred by physicians or
other services related to home respiratory therapy and home infusion therapy.
(ii) directly or indirectly, solicit or recruit any individual employed
by the Company, its subsidiaries or affiliates for the purpose of being employed
directly or indirectly by her or by any competitor of the Company on whose
behalf she is acting as an agent, representative or employee, or convey any
confidential information or trade secrets regarding other employees of the
Company, its subsidiaries or affiliates to any other person; or
(iii) directly or indirectly, influence or attempt to influence
customers of the Company or any of its subsidiaries or affiliates to direct
their business to any competitor of the Company; provided, however, that neither
(i) the "beneficial ownership" by Irish, either individually or as a member of a
"group," as such terms are used in Rule 13d under the Exchange Act, as a passive
investment, of not more than five percent (5%) of the voting stock of any
publicly held corporation, nor (ii) the beneficial ownership by Irish of any
interest described in the first sentence of Section 3(a) and properly and timely
disclosed in accordance with the terms therewith so long as the entity in which
he holds such beneficial
4
interest is not participating in the Primary Business, shall alone constitute a
violation of this Agreement.
(c) Post Employment Services. Notwithstanding anything contained in
Section 3(a) and (b) above to the contrary, following the fifth anniversary of
the Effective Date and for the remainder of the term of this Section 3, Irish
may provide services to any business as an employee, consultant, independent
contractor or otherwise, whether or not it competes with the Primary Business.
(d) Noncompete Compensation. As compensation for entering into the
noncompete provided hereunder, the Company shall pay to Irish a fee in a single
sum payable upon execution of this Agreement in the amount of $1,000,000.
(e) Injunctive Relief. It is expressly agreed that the Company will or
would suffer irreparable injury if Irish were to compete with the Company or any
subsidiary or affiliate in violation of this Agreement or violate Section 4
below and that the Company would by reason of such competition or violation be
entitled to preliminary or injunctive relief in a court of appropriate
jurisdiction, and Irish further consents and stipulates to the entry of such
preliminary or injunctive relief in such a court prohibiting Irish from
competing with the Company or any subsidiary or affiliate of the Company or
otherwise acting in violation of this Agreement upon an appropriate finding by
such court that Irish has violated this Section 3 or 4.
4. CONFIDENTIALITY. (a) Except as otherwise required by law, each of
the parties hereto shall keep the terms of this Agreement confidential. In
addition, Irish shall keep confidential all information of a proprietary or
confidential nature belonging to the Company
5
or any of its subsidiaries or affiliates, including, but not limited to,
business plans, files, records, data, documents, plans, research, development,
policies, customer or client lists, price lists, the name and address of
suppliers, customers or representatives, or any other matters of any kind or
description, relating to the products, devices, suppliers, customers, clientele,
sales or business of the Company, or any of its subsidiaries or affiliates, and
shall promptly return to the Company all written material and information that
is, or comes into her possession or dominion, concerning the Company or the
business of the Company or its subsidiaries or affiliates.
5. PUBLIC STATEMENTS. Neither IHS nor the Company or their respective
subsidiaries or affiliates shall disparage Irish, and Irish shall not disparage
the Company, IHS or any of their respective subsidiaries or affiliates or their
respective officers, directors, employees, partners or stockholders, at any
time, in any manner or in any respect; provided, that nothing contained in this
Agreement shall restrict the parties hereto from making any statements or
disclosures believed necessary to enforce in any judicial or similar proceeding
the provisions of this Agreement or as a party believes may be required by
applicable law.
6. FULL SETTLEMENT; LEGAL FEES. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against Irish
or others. In no event shall Irish be obligated to seek other employment or take
any other action by way of mitigation of the amounts playable to Irish under any
of the provisions of this Agreement and such amounts shall not be reduced
whether or not Irish obtains other employment. The Company agrees to
6
pay as incurred, to the full extent permitted by law, all legal fees and
expenses which Irish may reasonably incur as a result of any contest (regardless
of the outcome thereof) of the validity or enforceability of, or liability or
entitlement under any provision of this Agreement or any guarantee of
performance thereof, unless such contest is against IHS, the Company or any of
their respective subsidiaries or affiliates, in which case, each party shall pay
their respective costs incurred in connection with such contest, provided,
however, that to the extent any arbitrator or court shall determine that Irish
has prevailed as to the material issues raised in determination of the dispute,
the Company shall as soon as practicable, but in no event later than 30 days
from the date of determination of such arbitrator or court, reimburse Irish for
his costs incurred in connection with such contest.
7. MEDICAL INSURANCE COVERAGE. On the Effective Date through the end of
the Consulting Term, the Company shall provide Irish and her eligible dependents
with medical, dental, health life insurance and long-term disability plans
applicable to Irish immediately prior to the Effective Date, on the same terms
and conditions as in effect for Irish and her dependents immediately prior to
the Effective Date; provided that such obligation shall terminate upon Irish
obtaining employment which provides welfare benefits which are not materially
less favorable in scope to what is provided to Irish pursuant to this Section 8.
Nothing contained in this Section 8 shall limit Irish's right to elect
continuation coverage under the Consolidated Omnibus Budget Reconciliation Act
of 1985 ("COBRA") upon her no longer being eligible for benefits pursuant to the
terms of this Section 8.
8. CERTAIN EFFECTS. The invalidity or unenforceability of any
paragraph, term or provision of this Agreement shall in no way affect the
validity or enforceability of the
7
remaining paragraphs, terms and provisions of this Agreement. In the event of
any such invalidity or unenforceability, it is the parties' hereto intention and
agreement that any such paragraph, term or provision which is held or determined
to be invalid or unenforceable, as written, shall nonetheless be in force and
binding to the fullest extent permitted by law as though such paragraph, term or
provision had been written in such a manner and to such an extent as to be
enforceable under the circumstances. Without limiting the foregoing, with
respect to any confidentiality requirement or restrictive covenant contained
herein, if it is determined that any such provision is excessive as to duration
or scope, it is intended that it nevertheless be enforced for such shorter
duration or with such narrower scope as will render it enforceable.
9. NOTICES. All notices, consents and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given when
(a) delivered by hand, (b) sent by telecopier or mailed, certified or
registered, return receipt requested, or (c) when received by addressee, if sent
by Express Mail, Federal Express or other express delivery service (receipt
requested), in each case to the appropriate addresses or telecopier numbers set
forth below (or to such other addresses and telecopier numbers as a party may
designate as to herself or itself or by notice to the other parties): If to
Irish:
Rebecca X.Xxxxx
000 Xxxx Xxxxxxx Xxxxxxxxx
#0000
Xxxxxxx, Xxxxxxx 00000
8
If to any other party hereto:
Integrated Health Services, Inc.
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Executive Vice President
Xxxxxxxx Xxxxxx
General Counsel
with a copy to:
Blass & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
10. ENTIRE AGREEMENT. This Agreement is intended to express the
complete agreement and understanding among the parties hereto on the matters set
forth herein and to supersede any and all other agreements and understandings,
whether oral or written, between or among the parties hereto on the matters set
forth herein.
11. BINDING EFFECT. In the event of Irish's death, all amounts and
benefits payable hereunder shall be payable to her designated beneficiary Xxxxx
X. Irish.
12. AMENDMENTS. This Agreement shall be amended or modified only by a
written instrument signed by the parties hereto. Nothing in this Agreement,
expressed or implied, is intended to confer upon any third person any rights or
remedies under or by reason of this Agreement.
9
13. SUCCESSORS.
(a) This Agreement is personal to Irish and without the prior written
consent of the Company shall not be assignable by Irish otherwise than by will
or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by Irish's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and IHS and its successors and assigns.
(c) The Company and IHS will 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 and IHS to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company and IHS would be required to perform it if no such
succession had taken place.
14. GOVERNING LAW. This Agreement shall be construed under the laws of
the State of Florida applicable to agreements made and to be performed fully
therein, without regard to its conflicts of laws rules.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement.
16. SPECIFIC PERFORMANCE. The parties hereto acknowledge that money
damages may be an inadequate remedy for breach of this Agreement. Therefore, the
parties agree that any party may, in its sole discretion, apply to any
applicable court of competent jurisdiction to obtain specific performance of
this Agreement and injunctive relief against any breach hereof, in either case
without the posting of any bond or other security.
10
17. COOPERATION. Irish shall cooperate with the Company (at no expense
to the Company) in connection with her transition from Chief Financial Officer
to a consultant. Additionally, each of the parties to this Agreement shall
execute and deliver any and all other documents deemed necessary by counsel to
the Company or IHS to effectuate the terms, conditions or intent hereof.
18. TERMINATION OF THE MERGER AGREEMENT. This Agreement shall
automatically terminate if and when the Merger Agreement is terminated.
11
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
-----------------------------------------------
Rebecca X.Xxxxx
WITNESS:
-----------------------------
Name:
RoTech Medical Corporation
By:
------------------------------------------
Title:
WITNESS:
-----------------------------
Name:
Integrated Health Services Inc.
By:
----------------------------------------
Title:
WITNESS:
-----------------------------
Name:
12
EXHIBIT A
As of July __, 1997
To the Board of Directors of RoTech:
Effective immediately, I hereby resign as an officer and
director of the Company and its subsidiaries and as an employee of the Company.
-----------------------------------------------
Rebecca X.Xxxxx
13
