EXHIBIT 10.12
EMPLOYMENT AGREEMENT
BETWEEN
AMEDISYS, INC.
AND
XXXX XXXXXX
October 1, 2001
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") entered into as of the
1st day of October, 2001, and continuing for an indefinite duration, by and
between AMEDISYS, INC., a Delaware corporation (the "Company") and XXXX XXXXXX
("XXXXXX").
RECITALS:
A. The Company owns, manages and/or operates agencies and
facilities for the provision of home health care services (the "Business").
X. XXXXXX is employed by the Company as the Chief Development
Officer;
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained in this Agreement, the parties agree as follows:
1. RECITATIONS. The above recitations are incorporated herein by
this reference.
2. PERFORMANCE OF DUTIES. XXXXXX shall perform such duties as are
usually performed by the Chief Development Officer of health care companies of a
business similar in size and scope as the Company and such other reasonable
additional duties as may be prescribed from time to time by the Company's Chief
Executive Officer which are reasonable and consistent with the expectations of
the Company and the Company's operations, taking into account XXXXXX'x expertise
and job responsibilities, including but not limited to, adherence to internal
compliance and governmental and regulatory rules, regulations and applicable
laws. XXXXXX shall report directly to the Chief Executive Officer of the Company
or his designee.
2.1 Devotion of Time. XXXXXX agrees to devote full time
and attention to the business and affairs of the Company to the extent necessary
to discharge the responsibilities assigned to XXXXXX and to use reasonable best
efforts to perform faithfully and efficiently such responsibilities.
3. TERMINATION OF EMPLOYMENT.
3.1 Termination of Employment by the Company for Cause.
The Company may terminate XXXXXX'x employment for Cause, as defined herein,
without any obligation of severance payments to XXXXXX. Cause shall be defined
as follows:
(a) a material default or breach by XXXXXX of
any of the provisions of this Agreement materially detrimental to the Company
which is not cured within thirty (30) days following written notice thereof;
(b) actions by XXXXXX constituting fraud,
embezzlement or dishonesty which result in a conviction of a criminal offense
not overturned on appeal;
(c) intentionally furnishing materially false,
misleading, or omissive information to the Company's Chief Executive Officer,
Board of Directors or any committee of the Board of Directors, that is
materially detrimental to the Company;
(d) actions constituting a breach of the
confidentiality of the Business and/or trade secrets of the Company which is
materially detrimental to the Company; and
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(e) willful failure to follow reasonable and
lawful directives of the Company's Chief Executive Officer or Board of
Directors, which are consistent with XXXXXX'x job responsibilities and
performance which is not cured within thirty (30) days following written notice
thereof.
3.2 Termination Without Cause. The Company shall have the
right to terminate XXXXXX' employment without Cause, at any time and subject to
the sole discretion of the Company. In such event, XXXXXX will cease to have any
power of his position as of the effective date of the termination.
3.3 Termination by XXXXXX. XXXXXX may terminate his
employment upon thirty (30) days written notice to the Company. Such notice
shall set forth in sufficient detail for the Company to understand the nature of
the facts underlying said termination.
3.4 Change of Control. Upon the occurrence of a "Change
of Control," if such occurs prior to XXXXXX'x receiving a notice of termination
by the Company for Cause, XXXXXX shall be entitled to the Severance described
herein. "Change of Control" is defined as the following:
(a) The acquisition by any person, entity or
"group" within the meaning of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934 (the "Exchange Act") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of fifty-one (51%) percent or
more of either the then outstanding shares of the Company's common stock or the
combined voting power of the Company's then outstanding voting securities
entitled to vote generally in the election of directors; provided however,
purchase by underwriters in a firm commitment public offering of the Company's
securities or any securities purchased for investment only by professional
investors shall not constitute a Change of Control; and
(b) The individuals who serve on the Company's
Board of Directors as of the effective date of this Agreement (the "Incumbent
Board") cease for any reason to constitute at least a majority of the Board of
Directors of the Company; provided, however, any person who becomes a director
subsequent to the effective date of this Agreement, whose election or nomination
for election by the Company's shareholders was approved by a vote of at least a
majority of the directors then compiling the Incumbent Board, shall for purposes
of this Agreement be considered as if such person was a member of the Incumbent
Board.
4. COMPENSATION.
4.1 Salary. Company shall pay to XXXXXX a base salary at
the annual rate of $175,000 (the "Base Salary"). Notwithstanding anything herein
to the contrary, the Company shall have the sole discretion at any time and from
time to time to increase the Base Salary. Base Salary shall be payable in
installments consistent with the Company's normal payroll schedule, in effect
from time to time, subject to applicable withholding and other taxes.
4.2 Base Salary Increases. Commencing October 1, 2002,
XXXXXX'x Base Salary shall be automatically increased on February 1 of each year
during the term hereof by the greater of (i) six (6%) percent, or (ii)
$12,000.00. Notwithstanding anything herein to the contrary, the Chief Executive
Officer may grant a Base Salary Increase in excess of the amount stipulated to
within this Section 4.2.
4.3 Bonus. At the end of each fiscal year of employment,
the Company shall pay XXXXXX a bonus up to $87,500, payable in terms which shall
be at the Company's discretion, and only if the Company attains or exceeds the
operating income (loss) as presented in the budget approved by the Company's
Board of Directors for that fiscal year, and if certain performance based
criteria which shall, from time to time, be determined by the Company and made
known to XXXXXX are met. Notwithstanding anything herein to the contrary, the
Chief Executive Officer may pay a bonus in excess of the amount earned
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pursuant to this Section 4.3. Any bonus payments due hereunder are subject to
set-off pursuant to that certain Loan Agreement by and between the Company and
Xxxxxx of even date herewith.
4.4 Stock Options. Upon execution of this Agreement,
Xxxxxx shall be granted options to purchase 25,000 shares of the Company's
common stock, said grant date to be October 1, 2001. On October 1, 2003, and on
October 1 of each following year during the term hereof, the Company shall cause
to be granted to XXXXXX, pursuant to a stock option plan duly adopted by the
Company or otherwise, options to purchase such number of shares of the Company's
common stock equal to the greater of (i) seventy five one-hundredths (.75%)
percent of the number of shares of Company common stock issued by the Company
during the preceding fiscal year; or (ii) 12,500 shares. Notwithstanding
anything herein to the contrary, XXXXXX shall not be entitled to the grant of
options during any time in which XXXXXX is receiving severance payments from the
Company, as outlined below. Notwithstanding anything herein to the contrary, the
Chief Executive Officer may recommend that the Board of Directors of the Company
grant options in excess of the amount stipulated to in this Section 4.4.
4.5 Severance Compensation. Should XXXXXX be terminated
without Cause, as defined herein, or should a Change of Control, as defined
herein, occur during XXXXXX'x employment with Company, XXXXXX shall be entitled
to severance compensation in an amount equal to eighteen (18) months of XXXXXX'x
Base Salary at the time of such termination without cause or Change of Control,
payable at the discretion of the Company, but at a minimum, payable by the
Company via regularly scheduled payroll distributions until the entire severance
amount due XXXXXX is paid in full. Severance compensation is subject to set-off
pursuant to that certain Loan Agreement by and between the Company and Xxxxxx of
even date herewith.
4.6 Additional Benefits.
(a) Vacation. XXXXXX shall be entitled to the
maximum amount of paid time off for Company employees stipulated by the Company
PTO policy during each calender year of his employment with the Company. In
addition, XXXXXX shall be entitled to paid time off for the same holidays as
other employees of the Company as established by the Company's Board of
Directors.
(b) Reimbursement of Expenses. XXXXXX is
authorized to incur reasonable traveling and other expenses in connection with
the Business and in performance of his duties under this Agreement. XXXXXX shall
be reimbursed by the Company for all Business expenses which are reasonably
incurred by XXXXXX. All reimbursable travel expenses shall be in accordance with
mutually agreeable and reasonable policy.
(c) Participation in Employee Benefit Plans.
XXXXXX shall be entitled to participate, subject to eligibility and other terms
generally established by the Company's Board of Directors, in any employee
benefit plan (including but not limited to life insurance plans, long-and
short-term disability, stock option plans, group hospitalization, health, dental
care plans, (which health insurance plans shall also cover XXXXXX'x dependents)
profit sharing and pension, and other benefit plans), as may be adopted or
amended by the Company from time to time.
5. REPRESENTATION BY XXXXXX. XXXXXX hereby represents to the
Company that he is physically and mentally capable of performing his duties
hereunder and he has no knowledge of present or past physical or mental
conditions which would cause him not to be able to perform his duties hereunder.
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6. CONFIDENTIALITY AND NON-DISCLOSURE OF INFORMATION.
6.1 Confidentiality. XXXXXX shall not, during his
employment with the Company or any time thereafter, divulge, furnish or make
accessible to anyone, without the Company's prior written consent, any knowledge
or information with respect to any confidential or secret aspect of the Business
which if disclosed could reasonably be expected to have a material adverse
effect on the Business ("Confidential Information").
6.2 Ownership of Information. XXXXXX recognizes that all
Confidential Information and copies or reproductions thereof, relating to the
Company's operations and activities made or received by XXXXXX in the course of
his employment are the exclusive property of the Company, as the case may be,
and XXXXXX holds and uses same as trustee for the Company and subject to the
Company's sole control and will deliver same to the Company at the termination
of his employment, or earlier if so requested by the Company in writing. All of
such Confidential Information, which if lost or used by XXXXXX outside the scope
of his employment, could cause irreparable and continuing injury to the
Company's Business for which there may not be an adequate remedy at law. XXXXXX
acknowledges that compliance with the provisions of this Section 6 is necessary
to protect the goodwill and other proprietary interests of the Company and is a
material condition of employment.
7. RESTRICTIVE COVENANT. As an inducement to cause the Company to
enter into this Agreement, and in consideration of the Severance obligation of
Company herein, XXXXXX covenants and agrees that during his employment and, for
a period of eighteen (18) months after he ceases to be employed by Company,
regardless of the manner or cause of termination:
7.1 Solicitation of Business. He will not initiate any
contact with, call upon, solicit Business from, sell or render services to any
client or patient of the Company or any Company affiliate, within any area which
the Company conducts business, a list of which is included in Schedule 7.1,
which is attached hereto and incorporated herein ("Restricted Area"), for or on
behalf of himself or any business, firm, proprietorship, corporation,
partnership, association, entity or venture primarily engaged in the business of
providing home health, alternate site infusion therapy or ambulatory surgery
services, which is a similar business as the Business ("Competing Business"),
and XXXXXX shall not directly or indirectly aid or assist any other person, firm
or corporation to do any of the aforesaid acts.
7.2 Solicitation of Employees. He will not directly or
indirectly, as principal, agent, owner, partner, stockholder, officer, director,
employee, independent contractor or consultant of any competing Business, or in
any individual or representative capacity hire, solicit, directly or indirectly
cause others to hire, or solicit the employment of, any officer, sales person,
agent, or other employee of the Company or any Company affiliate, for the
purpose of causing said officer, sales person, agent or other person to
terminate employment with the Company or any Company affiliate and be employed
by such competing Business.
7.3 Employment. He will not accept or engage employment
with, or consult, contract or otherwise provide services to, any Competing
Business operating within the Restricted Area.
7.4 Material Violation. A proven material violation of
this Section 7 shall constitute a material and substantial breach of this
Agreement and shall result in the imposition of the Company's remedies contained
in Section 8 herein. XXXXXX acknowledges and agrees that proof of such personal
solicitation by XXXXXX of an employee shall constitute absolute and conclusive
evidence that XXXXXX has substantially and materially breached the provisions of
this Agreement.
7.5 Other Employment. It is understood by and between the
parties that the foregoing covenants set forth in Sections 6 and 7 are essential
elements of this Agreement, and that but for
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the Agreement of XXXXXX to comply with such covenants, the Company would not
have entered into this Agreement. Such covenants by XXXXXX shall be construed as
agreements independent of any other provision of this Agreement and the
existence of any claim or cause of action XXXXXX may have against the Company
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by Company of these covenants.
7.6 Defaults and Deferred Compensation.
(a) XXXXXX Breach. If XXXXXX breaches any
requirement of Section 7 herein, in addition to any other remedy to which the
Company may be entitled, XXXXXX shall return to the Company any Severance
already paid to XXXXXX at the time of said breach, and all of XXXXXX'x rights to
receive any portion of his Severance not already paid to him shall terminate.
The right to receive unpaid Severance will not be reinstated notwithstanding any
cessation by XXXXXX of his breach of Section 7.
7.7 Discontinued Operations. Notwithstanding anything in
this Section 7 to the contrary, this Section 7 shall not apply to any of the
Company's product or service divisions which at the time of XXXXXX'x employment
termination was considered by the Company to be a discontinued operation.
8. REMEDIES. XXXXXX hereby acknowledges, covenants and agrees
that in the event of a material default or breach under this Agreement, in
addition to any other remedy set forth herein:
8.1 Company may suffer irreparable and continuing damages
as a result of such breach and its remedy at law will be inadequate. XXXXXX
agrees that in the event of a violation or breach of this Agreement, in addition
to any other remedies available to it, Company shall be entitled to an
injunction restraining any such default or any other appropriate decree of
specific performance, with the requirement to prove actual damages or to post
any bond or any other security and to any other equitable relief the court deems
proper; and
8.2 Any and all of Company's remedies described in this
Agreement shall not be exclusive and shall be in addition to any other remedies
which Company may have at law or in equity including, but not limited to, the
right to monetary damages.
9. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses, sections, subdivisions, or subparagraphs contained
in this Agreement shall not affect the enforceability of the remaining portions
of this Agreement or any part thereof, all of which are inserted conditionally
on their being legally valid.
10. SUCCESSORS AND ASSIGNS.
10.1 Successors. This Agreement shall be binding upon the
parties hereto and their successors and assigns. For purposes of this Agreement,
the term "successor" of Company shall include any person or entity, whether
direct or indirect, whether by purchase, merger, consolidation, operation of
law, assignment, or otherwise acquires or controls: (i) all or substantially all
of the assets of Company (ii) fifty- one percent (51%) or more of the total
voting capital stock, and was not affiliated with or in common control of
Company as of the date of this Agreement; or (iii) any other Business
combination with or without the consent of Company's shareholders.
10.2 Assignment. This Agreement shall be non-assignable
by either Company or XXXXXX without the written consent of the other party, it
being understood that the obligations and performance of this Agreement are
personal in nature.
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11. MISCELLANEOUS.
11.1 Amendment. No amendment, waiver or modification of
this Agreement or any provisions of this Agreement shall be valid unless in
writing and duly executed by both parties.
11.2 Binding Agreement. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective heirs, legal
representatives, successors and assigns.
11.3 Waiver. Any waiver by any party of any breach of any
provision of this Agreement shall not be considered as or constitute a
continuing waiver or waiver of any other breach of any provision of this
Agreement.
11.4 Captions. Captions contained in this Agreement are
inserted only as a matter of convenience or for reference and in no way define,
limit, extend, or describe the scope of this Agreement or the intent of any
provisions of this Agreement.
11.5 Attorneys' Fees. In the event of any litigation
arising out of this Agreement the prevailing party shall be entitled to recover
from the other party its attorneys' fees and costs, including attorneys' fees
and costs incurred on appeal.
11.6 Prior Agreements. This Agreement supersedes and
replaces all prior agreements between the parties hereto dealing with the
subject matter hereof.
11.7 Governing Law. This Agreement shall be governed by
the laws of Louisiana.
11.8 Execution. It is the intention of the parties hereto
that this Agreement will not be valid and binding upon the parties hereto until
such time as this Agreement is executed by both parties in accordance herewith.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.
AMEDISYS, INC.
By:
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XXXXXXX X. XXXXX, CEO
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XXXX XXXXXX
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