EXHIBIT 10.3
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Amended and Restated Employment Agreement, dated as of
December 1, 1998, by and between NATIONAL HOME HEALTH CARE CORP., with offices
at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000 (hereinafter called
"Company"), and XXXXXXXXX X. XXXXXXX (hereinafter called "Employee").
W I T N E S S E T H:
WHEREAS, Company and Employee desire to enter into this
Agreement in order that Employee be employed by Company upon the terms and
conditions stated herein.
NOW, THEREFORE, in consideration of the mutual covenants,
conditions and premises contained herein, the parties hereby agree as follows:
1. Employment. Company hereby employs Employee for the period
beginning on the date hereof (the "Commencement Date"), and ending four years
after the Commencement Date, hereinafter called the "Employment Period"). The
Agreement will automatically be renewed for an additional five-year Employment
Period unless Company or Employee elects not to renew by providing written
notice of such election to the other party within 30 days prior to the end of
the initial five-year Employment Period.
2. Duties. Subject to the authority of the Board of Directors
of the Company, Employee shall be employed as the Company's Chairman of the
Board and Chief Executive Officer. It is understood and agreed that Employee
shall perform his services principally in the Company's executive offices in
Westchester County, New York and in the State of Florida where the Company has
certain operations. Employee will perform such other duties and services of a
senior executive nature and shall retain such status at the Company as shall be
commensurate with his position as the Chairman of the Board and Chief Executive
Officer.
3. Full Time. Employee agrees that he will devote his full
time and attention during regular business hours to the business and affairs of
the Company.
4. Compensation.
A. For all services performed by Employee for Company
during the Employment Period, Company will pay Employee, in accordance with the
normal pay practice of the Company, a salary of $305,000 per annum ("Salary"),
increased by a percentage equal to the aggregate percentage increase in the
Consumer Price Index since the year in which Employee first was paid such salary
amount by the Company. As used in this paragraph 4A, Consumer Price Index shall
mean the Consumer Price Index for Urban Wage Earners and Clerical Workers
prepared by the Bureau of Labor Statistics of the U.S. Department of Labor, or,
if that index is not then being published, the most nearly comparable successor
index that the parties may agree upon or, if they fail to agree, an index
designated by Company's independent certified public accountants. If a successor
index is used, Company's independent certified public accountants shall make
such adjustments to the index as may be appropriate to carry out the intention
of this paragraph and the accountants' determination shall be final and binding
on the parties.
B. As additional compensation, Employee shall receive
5% of the Company's Pre-Tax Income which, in each fiscal year during the
Employment Period, exceeds $3,000,000. No additional compensation shall be paid
for any fiscal year in which Pre-Tax Income is less than $3,000,000.
Notwithstanding anything else contained in this paragraph 4(B), the maximum
amount payable to Employee under this paragraph 4(B) for any fiscal year shall
be
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$150,000.
C. The additional compensation to be paid pursuant to
paragraph 4(B) shall be payable immediately following the availability of the
financial statements relating to the applicable fiscal year of Company, but in
no event later than 120 days after the end of such fiscal year.
D. The Employee shall also be entitled to participate
in the health, retirement, profit sharing, insurance or similar benefits which
the Company provides to any of its other senior executive employees. The Company
will use its best commercially reasonable efforts to cause its benefits package
for senior executive officers to be commensurate with benefits pack ages
provided for senior executive officers by other similarly situated public
companies in the health care business. In addition, the Employee and his spouse
shall also be entitled to long-term care insurance coverage under policies at
least as beneficial to the Employee and his spouse as the policies to such
effect currently in place as underwritten by Travelers Insurance, the premiums
for which shall be paid by the Company.
E. For the purposes of this Agreement, "Pre-Tax
Income" shall mean for each fiscal year the net income of Company and its
consolidated subsidiaries for such fiscal year before any charges for federal,
state or other taxes relating to income, determined in accordance with generally
accepted accounting principles.
5. Reimbursement of Expenses. Company recognizes that
Employee, in performing Employee's duties under this Agreement, may be required
to spend sums of money in connection with those duties for the benefit of
Company and accordingly will reimburse Employee $15,000 annually, for such
expenses beginning on the first day of the Employment
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Period payable weekly. In the event Employee incurs expenses in the performance
of Employee's duties on behalf of Company in excess of $15,000 in any year of
the Employment Period, Employee may present to Company an itemized voucher for
such expenses paid or incurred by Employee, and on presentation of that itemized
voucher Company will reimburse Employee or pay the expense incurred for all such
reasonable expenses, including, but not limited to, travel, meals, lodging,
entertainment and cash promotion. Company will provide to Employee every two
years the use for business purposes of an automobile, purchased or leased by
Company (or, at Employee's option, a cash allowance equal to the amount paid by
Employee to purchase or lease such an automobile), selected by Employee and
having a cost to Company of up to $40,000 per each two year period (in the case
of a purchase) or $1,000 per month (in the case of a lease), each of which
amount is subject to a cumulative annual percentage increase equal to the
percentage increase in the Consumer Price Index (as such term is used in
Paragraph 4A), with all expenses of operation, such as insurance, gas, oil and
repair paid for by Company. Company will also provide to Employee the use for
business purposes of a telephone in each of his residences and in each of his
automobiles.
6. Vacation. Employee shall be entitled to reasonable vacation
during the Employment Period but in no event less than six (6) weeks vacation
each year.
7. Disability. In the event that Employee shall be unable to
perform, because of illness or incapacity, physical or mental, all the duties
and services to be performed by him hereunder for a consecutive period of twelve
(12) months, the Company may terminate this Agreement after the expiration of
such period ("Disability Period"). Employee shall be entitled to receive the
compensation provided by paragraph 4(A) up to the end of the Disability Period
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(less payments from any disability insurance proceeds received by Employee with
respect to the Disability Period). Disability under this Paragraph shall be
determined by a physician who shall be selected by Employee and reasonably
approved by the Company. Such approval shall not be unreasonably withheld or
delayed, and a physician shall be deemed to be approved unless he or she is
disapproved in writing by the Company within ten (10) days after his or her name
is submitted. Company will pay the premiums for a disability insurance policy
which will provide Employee with disability payments after termination of the
Disability Period equal to one-half of Employee's Salary during the period of
disability or until Employee becomes 70 years old, whichever is sooner.
8. Death; Life Insurance. This Agreement shall terminate upon
the death of Employee. Company shall at its expense use all reasonable efforts
to purchase and maintain on behalf of Employee during the Employment Period a
life insurance policy on the life of Employee, payable to such beneficiaries as
Employee may from time to time designate, in an amount equal to three times
Employee's annual Salary.
9. Termination.
A. Company may discharge Employee for cause at any
time. Cause for discharge will exist when (i) Employee materially breaches this
Agreement and such breach is not cured within 30 days following written notice
by Company to Employee of such breach, or (ii) Employee is convicted of any act
or course of action involving moral turpitude which materially adversely affects
the reputation of Company. If, during the Employment Period, Employee is
discharged for cause, Company, without any limitation on any remedies it may
have at law or equity, is without liability for Salary or any other liability to
Employee after the date of such
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discharge.
B. Employee may terminate this Agreement during the
term hereof without liability at any time upon at least one year prior written
notice to Company.
C. In the event that as of the date of the termination
of this Agreement following a full five-year Employment Period, this Agreement
has not been renewed or Employee and Company have not entered into a mutually
agreeable successor employment agreement, then Company shall pay Employee on the
date of such termination a lump-sum amount equal to Employee's annual Salary as
of such date.
10. Disclosure of Confidential Information. "Confidential
Information" means all information known by Employee, because of employment by
Company, about Company's present or prospective products, processes, services or
activities. Confidential Information does not include information generally
known, other than through breach of a confidentiality agreement with Company, in
the industries in which Company engages or may engage. Employee will never,
during or after the Employment Period, directly or indirectly use any
Confidential Information except in the performance of Employee's duties for
Company, or in the performance of Employee's duties and to other persons as
directed by Company. Employee will use reasonable efforts to prevent
unauthorized use or disclosure of Confidential Information. Upon termination of
employment with Company, Employee will deliver to Company all writings relating
to or containing Confidential Information, including, without limitation, notes,
memoranda, letters, drawings, diagrams, and printouts and also including any
tapes, discs or other forms or recorded information. If Employee violates any
provision of this paragraph during, or after the Employment Period, Company
specifically reserves the right, in appropriate circumstances, to
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seek full indemnification from Employee should Company suffer any monetary
damages or incur any legal liability to any person as a result of the disclosure
or use of Confidential Information by Employee in violation of this paragraph.
11. Restrictive Covenants. Upon termination of the Employment
Period, Employee will not for a period of one year following the date of
termination of the Employment Period directly or indirectly engage in or
participate in the management or ownership of any business or activity in the
New York City metropolitan area, including suburban and other counties of New
York, New Jersey and Connecticut generally considered a part of such area, the
State of Florida or in any other state in which Company is registered to do
business as of the date of termination of the Employment Period, which directly
or indirectly competes with the business conducted by Company. Employee
recognizes and hereby acknowledges that the restrictions imposed upon Employee
in this paragraph are reasonable and are necessary for the protection of the
business of Company.
12. Ownership of Inventions, Discoveries and Improvements.
Employee shall promptly disclose in writing to the Board of Directors of Company
all inventions, discoveries, and improvements conceived, devised, created, or
developed by Employee in connection with his employment (collectively,
"Invention"), and Employee shall transfer and assign to Company all right, title
and interest in and to such Invention, including any and all domestic and
foreign patent rights, domestic and foreign copyright rights therein, and any
renewal thereof. Such disclosure is to be made promptly after the conception of
each Invention, and each Invention is to become and remain the property of
Company, whether or not patent or copyright applications are filed thereon by
Company. On request of Company Employee shall execute from time to time during
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or after the termination of employment such further instruments including,
without limitation, applications for patents and copyrights and assignments
thereof as may be deemed necessary or desirable by Company to effectuate the
provisions of this paragraph 12.
13. Construction. If the provisions of paragraph 10 should be
deemed unenforceable, invalid, or overbroad in whole or in part for any reason,
then any court of competent jurisdiction or any arbitrator appointed in
accordance with paragraph 14 is hereby authorized, requested, and instructed to
reform such paragraph to provide for the maximum competitive restraints upon
your activities (in time, product, geographic area and customer solicitation)
which may then be legal and valid.
14. Remedies, Damages and Jurisdiction.
A. Employee agrees that violation of paragraphs 10, 11
or 12 would cause irreparable injury to Company for which the remedy at law
would be inadequate, and that Company shall be entitled in any court of law or
equity or in any arbitration proceeding in accordance with this paragraph 14,
whichever forum is designated by Company, to preliminary, permanent and other
injunctive relief against any breach of the provisions contained in paragraphs
10, 11 or 12, and such punitive and compensatory damages as shall be awarded.
Further, in the event of a violation of the provisions of paragraph 11, the
period of noncompetition referred to therein shall be extended but not decreased
for a period of time equal to the period that the violation occurred.
B. Except as otherwise provided in paragraph 13 and
14A relating to the reformation of the restrictive covenants and obtaining
equitable relief, any controversy or claim arising out of, or relating to this
Agreement, or the breach thereof, shall be settled by
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arbitration by one arbitrator in New York, New York, in accordance with the rule
of the American Arbitration Association and judgment upon the award rendered by
the arbitrator may be entered in any Court having jurisdiction thereof.
C. Each of Company and Employee hereby consents to the
jurisdiction of the Supreme Court of the State of New York for the County of New
York and the United States District court for the Southern District of New York
for all purposes in connection with said arbitration or for obtaining the relief
referred to in paragraphs 10, 11 or 12, and further consents that any process or
notice of motion therewith may be served by certified or registered mail or
personal services, within or without the State of New York, provided a
reasonable time for appearance is allowed.
15. Severability. If any of the provisions of this Agreement
is held to be invalid, illegal, or unenforceable, that determination will not
affect the enforceability of any other provisions of this Agreement, and the
remaining provisions of this Agreement will be valid and enforceable according
to their terms.
16. Binding Effect.
A. This Agreement constitutes the entire understanding
of the parties, may be modified only in writing, is governed by the laws of New
York, and will be binding and inure to the benefit of Employee and Employee's
personal representatives and Company and Company's successors and permitted
assigns.
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B. In furtherance and not in limitation of the
foregoing, this Agreement supersedes any and all prior employment agreements,
including the employment agreements dated as of April 30, 1993 and November 1,
1997 by and between Company and Employee and such prior agreements hereby are
terminated and is no longer binding on either party.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above mentioned.
EMPLOYEE:
/s/ Xxxxxxxxx X. Xxxxxxx
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Xxxxxxxxx X. Xxxxxxx
COMPANY:
NATIONAL HOME HEALTH CARE CORP.
By /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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