Exhibit 10.50
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), entered into as of June 1,
1997 (the "Effective Date"), is entered into by and between Xxxxxx Xxxxxxx
("Employee") and Regency Health Services, Inc., a Delaware corporation
("Company").
The Company desires to establish it right to the continued services of
Employee, in the capacity described below, on the terms and conditions and
subject to the rights of termination hereinafter set forth, and Employee is
willing to accept such employment on such terms and conditions.
In consideration of the mutual agreements hereinafter set forth,
Employee and Company have agreed and do hereby agree as follows:
1. EMPLOYMENT AS VICE PRESIDENT - REIMBURSEMENT OF THE COMPANY. Company
does hereby employ, engage, and hire Employee as Vice President - Reimbursement
of the Company and Employee does hereby accept and agree to such hiring,
engagement, and employment. Employee's duties during the Employment Period
(defined below) shall be the executive, managerial and reporting duties set
forth on Exhibit A hereto and such other duties as the Board of Directors of the
Company, or the chief executive officer of Company shall from time to time
prescribe and as provided in the Bylaws of the Company. Employee shall devote
his full time, energy, and skill to the performance of his duties for Company
and for the benefit of Company, reasonable vacations authorized by Company's
Board of Directors and reasonable absences because of illness expected.
Furthermore, Employee shall exercise due diligence and care in the performance
of his duties to Company under this Agreement.
2. TERM OF AGREEMENT. The term ("Term") of this Agreement shall
commence on the Effective Date and shall continue of a period of one (1) year;
provided, however, that on the first and each succeeding anniversary of the
Effective Date, the Term shall automatically be extended for one year unless,
not later than thirty (30) days prior to any such anniversary date, either party
shall give written notice to the other that it does not wish to extend the term
of this Agreement. The period of time commencing on the Effective Date and
ending on the expiration of the Term, or, if earlier, the date of termination of
Employee's employment (the "Termination Date") under this or any successor
agreement shall be referred to as the "Employment Period."
3. COMPENSATION.
(a)......BASE SALARY. Company shall pay Employee, and Employee
agrees to accept from Company, in full payment for his services to Company, a
base salary at the rate of One Hundred Twenty-Two Thousand Dollars ($122,000.00)
per year ("Base Salary"), payable in equal biweekly installments or at such
other time or times as Employee and Company shall agree. Employee's Base Salary
shall be reviewed on a calendar year basis, at least annually, by Company and
may be increase as determined by Company's Board of Directors in its sole and
absolute discretion.
(b)......PERFORMANCE BONUS - BOARD OF DIRECTORS' DISCRETION.
Employee shall be eligible to receive an annual performance bonus of up to
thirty-five percent (35%) of his annual Base Salary. Any such bonus awarded to
Employee shall be payable in the amount, in the manner, and at the time
determined by Company's Board of Directors in its sole and absolute discretion.
4. FRINGE BENEFITS. Employee shall be entitled to participate in any
benefit programs, adopted from time to time, by Company for the benefit of its
executive employees and Employee shall be entitled to receive such other fringe
benefits as may be granted to him from time to time by Company's Board of
Directors.
(a)......BENEFIT PLANS. Employee shall be entitled to
participate in any benefit plans relating to stock options, stock purchases,
pension, thrift, profit sharing, life and disability insurance, medical
coverage, executive medical coverage, education, or other retirement or employee
benefits available to other executive employees of Company, subject to any
restrictions (including waiting periods) specified in such plans.
(b)......VACATION. Employee shall be entitled to two (2) weeks
of paid vacation per calendar year after one year of employment by the Company,
three (3) weeks after five (5) years and four (4) weeks of paid vacation after
ten (10) years, with such vacation to be scheduled and taken in accordance with
the Company's standard vacation policies.
(c)......EXECUTIVE LONG-TERM DISABILITY INSURANCE PLAN.
Subject to the applicable waiting periods, Employee will be included in
Company's Executive Long-Term Disability Insurance Plan, as it may be modified
from time to time, at the Company's expense.
5. BUSINESS EXPENSES. Company shall reimburse Employee for any
and all necessary, customary, and usual expenses, properly receipted in
accordance with the policies of the Company, incurred by Employee on behalf of
Company, including reimbursement for use of Employee's personal vehicle for
business purposes.
6. TERMINATION OF EMPLOYEE'S EMPLOYMENT.
(a)......DEATH. If Employee dies while employed by Company,
his employment shall immediately terminate. Company's obligation to pay
Employee's Base Salary shall cease as of the date of Employee's death.
Thereafter, Employee's beneficiaries or his estate shall receive benefits in
accordance with Company's retirement, insurance, and other applicable programs
and plans then in effect.
(b)......DISABILITY. If, as a result of Employee's mental or
physical incapacity, Employee shall be unable to perform the services for
Company contemplated by this Agreement in the manner in which he previously
performed them during an aggregate of 120 business days in any consecutive seven
(7) month period ("Disability"), Employee's employment may be terminated by
Company for Disability. During any period prior to such termination during which
Employee is absent from the full-time performance of his duties with Company due
to Disability, Company shall continue to pay Employee his Base Salary at the
rate in effect at the commencement of such period of Disability. Any such
payments made to Employee shall be reduced by amounts received from disability
insurance obtained or provided by Company, and by the amounts of any benefits
payable to Employee, with respect to such period, under Company's Executive
Long-Term Disability Plan. Subsequent to the termination provided for in this
Section 6(b), Employee's benefits shall be determined under Company's
retirement, insurance, and other compensation programs then in effect in
accordance with the terms of such programs.
(c)......TERMINATION BY THE COMPANY FOR CAUSE. Company may
terminate Employee's employment under this Agreement for "Cause" at any time
prior to expiration of the Term of the Agreement, only upon the occurrence of
any one or more of the following events:
.........(i) The material breach of this Agreement by
Employee, including, without limitation, repeated neglect of Employee's duties
as set forth on Exhibit A hereto, Employee's lack of diligence and attention in
performing services as provided in this Agreement, or Employee's repeated
failure to implement or adhere to policies established by, or directives of,
Company's Board of Directors; or
.........(ii) Conduct of a criminal nature that may have
an adverse impact on Company's reputation and standing in the community; or
.........(iii) Fraudulent conduct in connection with the
business affairs of Company, regardless of whether said conduct is designed to
defraud the Company or others.
In the event of termination for Cause, Company's obligation to pay Employee's
Base Salary shall cease as of the Termination Date. If Employee's employment is
terminated for Cause, Employee's employment may be terminated immediately
without any advance written notice.
(d)......TERMINATION BY THE COMPANY WITHOUT CAUSE. Company
shall have the right to terminate the Agreement prior to the expiration of the
Term, at any time, without Cause. In the event Company shall so elect to
terminate this Agreement Employee shall receive compensation pursuant to the
Company's severance policies.
(e)......TERMINATION BY THE EMPLOYEE FOR GOOD REASON. Employee
shall have the right to terminate this Agreement for Good Reason. For purposes
of this Agreement, "Good Reason" shall mean the occurrence, without Employee's
prior written consent, of any one or more of the following events:
.........(i) The assignment to Employee of any duties that are
materially inconsistent with, or reflect a material continuing reduction of the
powers and responsibilities, or a change of Employee's reporting
responsibilities, set forth on Exhibit A hereto, or a material improper
intervention by Company's Board of Directors in Employee's ability to materially
perform the duties and responsibilities set forth on Exhibit A hereto;
.........(ii) Company's material breach of any of the
provisions of this Agreement, or a material change in the conditions of
Employee's employment; or
.........(iii) The relocation of Company's principal executive
officers to a location outside of the Southern California area or the Company's
requiring Employee to be based anywhere other than Company's principal executive
offices, except for travel on the Company's business to an extent substantially
consistent with the Employee's position and responsibilities.
Employee agrees to provide Company thirty (30) days' prior written notice of any
termiantion for Good Reason, during which 30 day period Company shall have the
right to cure the circumstances giving rise to the Good Reason stated in such
notice. Except as set forth in Paragraph 7 below, in the event of termination
for Good Reason, Employee shall receive compensation pursuant to the provisions
of Company's severance policies.
7. MERGER OR OTHER CHANGE IN CONTROL. Employee shall have the right to
terminate this Agreement for Good Reason if at any time within ninety (90) days
after completion of (i) a merger of the Company with any other corporation as a
result of which the shareholders of the Company immediately prior to such merger
fail to win at least a majority of the voting securities of the surviving
corporation in such merger immediately after the merger, and members of the
Board of Directors of Company, elected by the stockholders of the Company or by
a majority of the directors of the Company who were elected by the stockholders
of the Company, fail to constitute a majority of the Board of Directors of the
surviving corporation following completion of the merger, or (ii) a sale of all
or substantially all of the assets of the Company to another corporation, if (x)
a majority of the directors of the ultimate parent of the purchase immediately
following the purchase and sale were not members of the Board of Directors of
the Company immediately prior to such sale and (y) shareholders of the Company
immediately prior to such sale do not hold a majority of the voting securities
of the ultimate parent of the purchasing corporation following completion of
such sale; or (iii) a purchase by another person, firm or corporation of a
majority of the voting securities of the Company, and following completion of
such sale, members of the Board of Directors of the Company elected by the
stockholders of the Company (other than such purchaser) fail to constitute a
majority of the Board of Directors of the Company. If Employee elects to
terminate this Agreement for Good Reason for the reasons set forth in this
Paragraph 7, then Employee shall be eligible to receive immediately, in a lump
sum, an amount equal to the Base Salary that would have been payable to Employee
pursuant to this Agreement had Employee continued to be employed for the twelve
(12) months immediately following the Termination Date (such Base Salary for
such period being equal to Employee's Base Salary as of the Termination Date)
plus an amount equal to the greater of (i) the total of any performance bonus or
bonuses paid to Employee pursuant to Section 3(b) hereof in the fiscal year of
the Company ended prior to the fiscal year in which the Termination Date occurs,
or (ii) the average of the annual performance bonuses paid to him by Company
with respect to the three fiscal years ended immediately prior to the fiscal
year in which the Termination Date occurs.
8. NONCOMPETITION PROVISIONS.
(a)......RIGHT TO COMPANY MATERIALS. Employee agrees that all
styles, designs, lists, materials, books, files, reports, correspondence,
records, and other documents ("Company Materials") used, prepared, or made
available to Employee, shall be and shall remain the property of the Company.
Upon the termination of employment or the expiration of this Agreement, all
Company Materials shall be returned immediately to Company, and Employee shall
not make or retain any copies thereof.
(b)......ANTISOLICITATION. Employee promises and agrees that
during the term of this Agreement he will not influence or attempt to influence
customers or suppliers of Company or any of its present or future subsidiaries
or affiliates, either directly or indirectly, to divert their business to any
individual, partnership, firm, corporation or other entity then in competition
with the business of Company, or any subsidiary or affiliate of Company.
(c)......SOLICITING EMPLOYEES. During the term of this
Agreement and for the 12-month period commencing on the Termination Date,
Employee promises and agrees that he will not directly or indirectly solicit any
of Company's employees to work for any business, individual, partnership, firm,
corporation or other entity then in competition with the business of Company or
any subsidiary or affiliate of Company.
9. NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be given by fax or first class mail, certified or
registered with return receipt requested, and shall be deemed to have been duly
given three (3) days after mailing or twenty-four (24) hours after transmission
of a fax to the respective persons named below:
If to Company: Regency Health Services, Inc.
0000 Xxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Phone: (000) 000-0000
Fax: (000) 000-0000
If to Employee: Xxxxxx Xxxxxxx
Either party may change such party's address for notices by notice duly given
pursuant hereto.
10. ATTORNEYS' FEES. In the event judicial or quasi-judicial
determination is necessary of any dispute arising as to the parties' rights and
obligations hereunder, Company and Employee shall each bear their own respective
attorneys' fees and costs associated with such dispute.
11. TERMINATION OF PRIOR AGREEMENTS. This Agreement terminates
and supersedes any and all prior agreements and understandings between the
parties with respect to employment or with respect to the compensation
of Employee by Company from and after the Effective Date.
12. ASSIGNMENT; SUCCESSORS. This Agreement is personal in its nature
and neither of the parties hereto shall, without the consent of the other,
assign or transfer this Agreement or any rights or obligations hereunder;
provided that, in the event of the merger, consolidation, transfer or sale of
all or substantially all of the assets of the Company with or to any other
individual or entity, this Agreement shall, subject to the express provisions
hereof, be binding upon and inure to the benefit of such successor and such
successor shall discharge and perform all the promises, covenants, duties, and
obligations of Company hereunder.
13. GOVERNING LAW. This Agreement and the legal relations thus
created between the parties hereto shall be governed by and construed under and
in accordance with the laws of the State of California.
14. ENTIRE AGREEMENT; HEADINGS. This Agreement embodies the
entire agreement of the parties respecting the matters within its scope and may
be modified only in writing. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute apart of this
Agreement for any other purpose.
15. WAIVER, MODIFICATION. Failure to insist upon strict compliance with
any of the terms, covenants, or conditions hereof shall not be deemed a waiver
of such term, covenant, or condition, nor shall any waiver or relinquishment of,
or failure to insist upon strict compliance with, any right or power hereunder
at any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times. This Agreement shall not be modified in any
respect except by a writing executed by each party hereto.
16. SEVERABILITY. In the event that a court of competent jurisdiction
determines that any portion of this Agreement is in violation of any statute or
public policy, only the portions of this Agreement that violate such statute or
public policy shall be stricken. All portions of this Agreement that do not
violate any statute or public policy shall continue in full force and effect.
Further, any court order striking any portion of this Agreement shall modify the
stricken terms as narrowly as possible to give as much effect as possible to the
intentions of the parties under this Agreement.
17. INDEMNIFICATION. Company shall indemnify and hold Employee
harmless to the maximum extent permitted by Section 145 of the Delaware General
Corporation Law and the Bylaws of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and the Employee has hereunto signed
this Agreement as of the date first above written.
COMPANY:
REGENCY HEALTH SERVICES, INC.
By:
Xxxxxxx X. Xxxxxx, President/CEO
EMPLOYEE:
Xxxxxx Xxxxxxx
