EXHIBIT 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into this 5th day of August, 1998 by and between OMNICARE, INC., a
Delaware corporation (the "Company") and XXXXX XXXXXXX ("Xx. Xxxxxxx").
WHEREAS, the Company desires to employ Xx. Xxxxxxx under the
terms and conditions of this Agreement for the purposes of providing
professional services as an attorney in connection with the Company's
institutional pharmacy business and such other businesses in which the Company
or its subsidiaries or affiliates may be engaged during the term of this
Agreement (referred to collectively as the "Business"), and Xx. Xxxxxxx desires
to be employed for that purpose;
THEREFORE, in consideration of these recitals and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
SECTION 1. EMPLOYMENT
1.1 Duties. The Company shall employ Xx. Xxxxxxx as Vice
President and General Counsel of the Company for the term of this Agreement. Xx.
Xxxxxxx shall perform and coordinate legal services for the Company and shall
report directly to the President of the Company. Xx. Xxxxxxx will perform such
other duties as may from time to time be assigned to him by the President of the
Company.
1.2 Performance. Xx. Xxxxxxx shall devote his exclusive and
full professional time and attention to his duties as an employee of the Company
and shall perform such duties in an efficient, trustworthy and businesslike
manner. In addition, Xx. Xxxxxxx shall not render to others any service of any
kind for compensation or engage in any other business activity, including
without limitation any involvement in any business in which Xx. Xxxxxxx has any
administrative or operating responsibility.
SECTION 2. COMPENSATION, BENEFITS AND EXPENSES
2.1 Base Salary. The Company shall pay to Xx. Xxxxxxx a salary
("Base Salary") of $190,000.00 payable in equal semi-monthly installments, or
more frequently if the President of the Company determines that such salary
shall be paid in more frequent installments. Xx. Xxxxxxx'x Base Salary may be
reviewed every 14-15 months, and may be adjusted at the Company's discretion
taking into consideration Xx. Xxxxxxx'x performance, Company performance and
general economic conditions.
2.2 Sign-On Bonus. The Company shall pay to Xx. Xxxxxxx a
sign-on bonus of $25,000.00.
2.3 Initial Stock Options Grant. In August, 1998, the
President of the Company shall request the Incentive Committee to grant to Xx.
Xxxxxxx options to purchase, at a purchase price per share equal to the market
price thereof on the date of the grant, 10,500 shares of the Company's common
stock, par value $1.00 per share, which will vest in accordance with the terms
and conditions of the Company's plan. As a condition of his receipt of such
options, Xx. Xxxxxxx shall enter into a separate agreement with the Company
which reflects the foregoing as well as such restrictions, terms and conditions
as are then usual and customary under the Company's existing plan governing
stock options.
2.4 Annual Bonus. Xx. Xxxxxxx will be eligible to participate
in the Company's annual bonus program, which is subject to the approval of the
full Board of Directors of the Company. For 1998, the President of the Company
will request the Board of Directors to approve a minimum bonus of $40,000.00 for
Xx. Xxxxxxx in respect of his 1998 services.
2.5 Long-Term Incentive Program. Xx. Xxxxxxx will be eligible
to participate in the long-term incentive program as may be maintained by the
Company for its executives.
2.6 Executive Benefits Program. Xx. Xxxxxxx will be eligible
to participate in the benefits program provided by the Company to its
executives. In addition, the Company will contribute annually an amount equal to
6% of Xx. Xxxxxxx'x annual cash compensation to a Rabbi Trust which will vest in
five equal annual installments commencing one year following the date each such
contribution is made.
2.7 Reimbursement of Business Expenses. The Company shall
reimburse Xx. Xxxxxxx for all authorized, ordinary and necessary business
expenses incurred by him in connection with the Business. Reimbursement of such
expenses shall be paid monthly, upon submission by Xx. Xxxxxxx to the Company of
vouchers itemizing such expenses in a form satisfactory to the Company, properly
identifying the nature and business purpose of any expenditures.
2.8 Relocation. The Company shall reimburse Xx. Xxxxxxx all
reasonable and customary out-of-pocket expenses associated with relocating Xx.
Xxxxxxx'x family from Richmond, Virginia, to Cincinnati, Ohio, including any
significant bona fide loss on the sale of the residence in Richmond, all closing
costs associated with the sale of the residence in Richmond (including, but not
limited to, real estate commission, survey, title insurance, attorney's fees);
the packing and movement of household goods and transportation and hotel and
food expenses for Xx. Xxxxxxx and his family associated with house-hunting trips
to Cincinnati.
SECTION 3. TERM OF EMPLOYMENT
3.1 Term. The initial term of employment of Xx. Xxxxxxx
pursuant to this Agreement shall commence on August 5, 1998, and shall continue
for a period of two years, until August 4, 2000. Notwithstanding the foregoing,
this Agreement may be terminated at any time as described in Sections 3.2
through 3.6 hereof.
3.2 Termination for Cause. The Company shall have the right to
terminate this Agreement by written notice for the following causes (a
"Termination for Cause"):
(a) Conduct which is materially detrimental to
the Company's reputation, goodwill or
business operations;
(b) Gross or habitual neglect of Xx. Xxxxxxx'x
duties or obligations or breach of such
duties, or misconduct in discharging such
duties;
(c) Xx. Xxxxxxx'x absence from his duties
without the consent of the President of the
Company;
(d) Xx. Xxxxxxx'x failure or refusal to comply
with the policies, standards and regulations
of the Company or to follow the directions
of the President of the Company in complying
with those policies, standards and
regulations;
(e) Breach or threatened breach of the
restrictive covenants set forth in Section 4
of this Agreement;
(f) Commission by Xx. Xxxxxxx of any act of
fraud or dishonesty;
(g) Conviction of Xx. Xxxxxxx for, or entry of a
plea of guilty or nolo contendere by Xx.
Xxxxxxx with respect to, any criminal act.
Upon any Termination for Cause, all payments to Xx. Xxxxxxx
under Section 2 of this Agreement shall cease immediately, with the exception of
reimbursement of authorized, ordinary and necessary business expenses already
incurred, and any compensation already earned or vested as of that date.
3.3 Termination by the Company Due to Disability or Death. Xx.
Xxxxxxx acknowledges that his duties pursuant to this Agreement, including
without limitation Section 1.1, constitute the essential functions of his job.
If Xx. Xxxxxxx is unable to perform his duties under this Agreement by reason of
illness or other physical or mental disability, the Company may notify him that
an event of disability ("Event of Disability") exists, whereupon, provided he
remains disabled, Xx. Xxxxxxx shall continue to receive the compensation
described in Section 2 hereof for a period of three months after the date of the
Event of Disability. Such payments shall be reduced by any disability payment to
which Xx. Xxxxxxx may be entitled in lieu of such compensation, but not by any
disability payment for which Xx. Xxxxxxx has privately contracted without the
Company's involvement. At the expiration of the three month period, payment of
such compensation pursuant to Section 2 shall cease and this Agreement may be
terminated by the Company, at its sole discretion. The term "disability" as used
herein shall mean a condition which prohibits Xx. Xxxxxxx from performing his
duties under this Agreement with reasonable accommodation which he may request.
If Xx. Xxxxxxx should die before the termination of this Agreement, his
compensation under Section 2 hereof shall terminate upon the date of his death,
with the exception of
reimbursement of authorized, ordinary and necessary business expenses already
incurred, and any compensation already earned or vested as of that date.
3.4 Termination for Reasons Other Than With Cause. The Company
shall have the right to terminate this Agreement without cause upon ten (10)
days written notice to Xx. Xxxxxxx. If the Company terminates this Agreement
without cause, Xx. Xxxxxxx shall receive his Base Salary as that term is defined
in Section 2.1 of this Agreement until the date of the expiration of this
Agreement, but in no event less than a period of one year, and any restricted
stock, stock options and the Rabbi Trust contributions Xx. Xxxxxxx has received
pursuant to Section 2.6 shall vest immediately upon termination. In the event of
termination without cause, Xx. Xxxxxxx acknowledges that the Company shall have
no obligations or liability to him whatsoever other than the obligations set
forth in this paragraph.
3.5 Voluntary Termination by Xx. Xxxxxxx. In the event Xx.
Xxxxxxx voluntarily terminates his employment for any reason, all payments to
Xx. Xxxxxxx under Section 2 shall cease, with the exception of reimbursement of
authorized, ordinary and necessary business expenses already incurred, and any
compensation already earned or vested as of that date.
3.6 Termination Due To A Change in Control. The Company shall
have the right to terminate this Agreement in the event of a change in control
in the Company. If the Company terminates this Agreement, following a change in
control, Xx. Xxxxxxx will receive his Base Salary and cash bonus compensation
for the unexpired term of this Agreement, plus an additional two years of Base
Salary and cash bonus compensation. For purposes of this Section 3.6, annual
cash bonus compensation after termination shall be equal to the last annual cash
bonus paid to Xx. Xxxxxxx prior to termination. In addition, the restricted
stock, stock options and Rabbi Trust contributions will vest immediately upon
termination. Notwithstanding the foregoing, payments to Xx. Xxxxxxx under this
Section, in the aggregate, shall be limited to an amount that does not
constitute an excess parachute payment under Section 280G of the Internal
Revenue Code of 1986, and any successor provisions thereof, and the regulations
thereunder.
SECTION 4. COVENANTS OF NONDISCLOSURE, NONSOLICITATION AND NONCOMPETITION
4.1 Nondisclosure. Xx. Xxxxxxx shall not at any time during or
after termination of his employment with the Company, directly or indirectly,
use any proprietary, "confidential information" of the Company, for any purpose
not associated with Company activities, or disseminate or disclose any such
information to any person or entity not affiliated with the Company. Such
proprietary, "confidential information" includes, without limitation, customer
lists, computer technology, programs and data, whether online or off-loaded on
disk format, sales, marketing and prospecting methodologies, plans and
materials, and any other such plans, programs, methodologies and materials used
in managing, marketing or furthering the Business. Upon termination of Xx.
Xxxxxxx'x employment with the Company, Xx. Xxxxxxx will return all documents,
records, notebooks, manuals, plans and materials, computer disks and similar
repositories of or
containing Company proprietary, "confidential information," including all copies
thereof, then in his possession or control, whether prepared by him or
otherwise. Xx. Xxxxxxx will undertake all reasonably necessary and appropriate
steps to ensure that the confidentiality of Company proprietary, "confidential
information" shall be maintained.
4.2 Nonsolicitation. While Xx. Xxxxxxx is employed by the
Company, and for a period of two (2) years following his termination whether
such termination was voluntary or involuntary, with or without cause, and within
the States in which the Company operates the Business, Xx. Xxxxxxx agrees to the
following:
(a) Not to directly or indirectly contact, solicit,
serve, cater or provide services to any customer, client,
organization or person who, or which, has had a business
relationship with the Company during the twelve (12) month
period preceding Xx. Xxxxxxx'x termination;
(b) Not to directly or indirectly influence or
attempt to influence any customer, client, organization or
person who, or which, has had a business relationship with the
Company during the twelve (12) month period preceding Xx.
Xxxxxxx'x termination to direct or transfer away any business
or patronage from the Company;
(c) Not to directly or indirectly solicit or attempt
to solicit any employee, officer or director to leave the
Company, or to contact any customer or client in order to
influence or attempt to influence the directing or
transferring of any business or patronage away from the
Company;
(d) Not to directly or indirectly interfere with or
disrupt any relationship, contractual or otherwise, between
the Company and its respective customers, clients, employees,
independent contractors, agents, suppliers, distributors or
other similar parties; and
(e) To advise any and all employers or potential
employers of Xx. Xxxxxxx'x obligations hereunder.
4.3 Noncompetition. Xx. Xxxxxxx agrees that, during his
employment with the Company, and for two (2) years immediately after such
employment ceases, he will neither directly or indirectly engage or hold an
interest in any business competing with the Business as then conducted by the
Company or its respective successors, nor directly or indirectly have any
interest in, own, manage, operate, control, be connected with as a stockholder
(other than as a stockholder of less than five percent (5%) of a publicly held
corporation), joint venturer, officer, director, partner, employee or
consultant, or otherwise engage or invest or participate in, any business which
shall compete with the Business as then conducted by the Company, or its
respective successors, in the United States and such other defined geographic
areas in which the Company operates the Business.
4.4 Applicability. The provisions of Sections 4.1, 4.2 and 4.3
immediately preceding shall remain in effect in accordance with their respective
terms notwithstanding any
termination of Xx. Xxxxxxx'x employment with the Company or its successors,
regardless of the cause or circumstances thereof and whether such termination
was voluntary or involuntary. Further, Xx. Xxxxxxx'x covenants of nondisclosure,
noncompetition and nonsolicitation along with the Company's remedies for the
breach or threatened breach of those covenants shall remain in effect in
accordance with their respective terms following any termination of this
Agreement.
4.5 Remedies. In view of the services which Xx. Xxxxxxx will
perform hereunder, which are special, unique, extraordinary and intellectual in
character, which place him in a position of confidence and trust with the
customers and employees of the Company and which provide him with access to
confidential financial information, trade secrets, "know-how" and other
confidential and proprietary information of the Company, in view of the
geographic scope and nature of the business in which the Company is engaged, and
recognizing the value of this Agreement to him, Xx. Xxxxxxx expressly
acknowledges that the restrictive covenants set forth in this Agreement,
including, without limitation, the duration, the business scope and the
geographic scope of such covenants, are necessary in order to protect and
maintain the proprietary interest and other legitimate business interests of the
Company, and that the enforcement of such restrictive covenants will not prevent
him from earning a livelihood. Xx. Xxxxxxx further acknowledges that the remedy
at law for any breach or threatened breach of this Agreement will be inadequate
and, accordingly, that the Company shall, in addition to all other available
remedies (including, without limitation, seeking such damages as it can show it
has sustained by reason of such breach), be entitled to injunctive or any other
appropriate form of equitable relief. In the event Xx. Xxxxxxx breaches or
threatens to breach these restrictive covenants, he shall not receive any
further payments from the Company pursuant to this Agreement.
SECTION 5. INDEMNIFICATION
5.1 Except to the extent prohibited by law, the Company shall
save and hold harmless the Xx. Xxxxxxx from and against any claim of liability
or loss (including reasonable attorney's fees) arising as a result of Xx.
Xxxxxxx'x good faith activities in the course of his employment hereunder.
SECTION 6. MISCELLANEOUS PROVISIONS
6.1 Assignment and Successors. The rights and obligations of
the Company under this Agreement may be freely assigned and shall inure to the
benefit of and be binding upon the successors and assigns of the Company. Xx.
Xxxxxxx'x obligation to provide services hereunder may not be assigned to or
assumed by any other person or entity.
6.2 Notices. All notices, requests, demands or other
communications under this Agreement shall be in writing and shall only be deemed
to be duly given if made in writing and sent by first class mail, overnight
courier, or telecopy to the following addresses:
Xxxxxx X. Xxxxxx, Senior Vice President
and Secretary
Omnicare, Inc.
2800 Chemed Center
000 X. Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
and
Xxxxx Xxxxxxx
000 Xxxxxxx Xxxxx
Xxxxx, XX 00000
6.3 Severability. Any provision of this Agreement which is
deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction and subject to this paragraph, be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions hereof in such jurisdiction or rendering that or any other
provisions of this Agreement invalid, illegal, or unenforceable in any other
jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable
because its scope is considered excessive, such covenant shall be modified so
that the scope of the covenant is reduced only to the minimum extent necessary
to render the modified covenant valid, legal and enforceable.
6.4 Complete Agreement. This Agreement contains the entire
agreement between the parties and supersedes previous verbal and written
discussions, negotiations, agreements or understandings between the parties.
6.5 Amendment and Waiver. This Agreement may be modified,
amended or waived only by a written instrument signed by all the parties hereto.
No waiver or breach of any provision hereof shall be a waiver of any future
breach, whether similar or dissimilar in nature.
6.6 Injunctive Relief. The parties hereto agree that money
damages would be an inadequate remedy for the Company in the event of breach or
threatened breach of this Agreement and thus, in any such event, the Company
may, either with or without pursuing any potential damage remedies, immediately
obtain and enforce any injunction prohibiting Xx. Xxxxxxx from violating this
Agreement.
6.7 Applicable Law. This Agreement has been made and its
validity, performance and effect shall be determined in accordance with the laws
of the State of Ohio.
6.8 Consent to Jurisdiction. The parties hereby (a) agree that
any suit, proceeding or action at law or in equity (hereinafter referred to as
an "Action") arising out of or relating to this Agreement must be instituted in
state or federal court located within Xxxxxxxx County, Ohio, (b) waive any
objection which he or it may have now or hereafter to the laying of the venue of
any such Action, (c) irrevocably submit to the jurisdiction of any such court in
any such Action, and (d) hereby waive any claim or defense of inconvenient
forum. The parties irrevocably agree that service of any and all process which
may be served in any such Action may be served
upon him or it by registered mail to the address referred to in Section 6.2
hereof or to such other address as the parties shall designate in writing by
notice duly given in accordance with Section 6.2 hereof and that such service
shall be deemed effective service of process upon the parties in any such
Action. The parties irrevocably agree that any such service of process shall
have the same force and validity as if service were made upon him or it
according to the law governing such service in the State of Ohio, and waives all
claims of error by reason of any such service.
6.9 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
6.10 Interpretation. The headings contained in this Agreement
are for reference purposes only and shall not affect in any ways the meaning or
interpretation of this Agreement. The language in all parts of this Agreement
shall in all cases be construed according to its fair meaning, and not strictly
for or against any party hereto. In this Agreement, unless the context otherwise
requires, the masculine, feminine and neuter genders and the singular and the
plural include one another.
6.11 Non-Waiver of Rights and Breaches. No failure or delay of
any party herein in the exercise of any right given to such party hereunder
shall constitute a waiver thereof unless the time specified herein for the
exercise of such right has expired, nor shall any single or partial exercise of
any right preclude other or further exercise thereof or of any other right. The
waiver of a party hereto of any default of any other party shall not be deemed
to be a waiver of any subsequent default or other default by such party.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
OMNICARE, INC.
By: /s/ Xxxx X. Xxxxxxxx
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Its: President
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/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
