Exhibit 10.35
CHANGE IN CONTROL
SEVERANCE COMPENSATION
AND
RESTRICTIVE COVENANT AGREEMENT
THIS SEVERANCE COMPENSATION AND RESTRICTIVE COVENANT AGREEMENT (the
"Agreement") is dated as of March 17, 2003 between MATRIA HEALTHCARE, INC., a
Delaware corporation (the "Company"), and XXXXXXX X. XXXXXXX (the "Executive").
WHEREAS, the Company, has determined that it is appropriate to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including the Executive, to their assigned duties without
distraction in potentially disturbing circumstances arising from the possibility
of a Change in Control (as hereinafter defined) of the Company; and
WHEREAS, the severance benefits payable by the Company to Executive as
provided herein are in part intended to ensure that Executive receives
reasonable compensation given the specific circumstances of Executive's
employment history with the Company;
NOW, THEREFORE, in consideration of their respective obligations to one
another set forth in this Agreement, and other good and valuable consideration,
the receipt, sufficiency and adequacy of which the parties hereby acknowledge,
the parties to this Agreement, intending to be legally bound, hereby agree as
follows:
1. Term. This Agreement shall terminate, except to the extent that any
obligation of the Company hereunder remains unpaid as of such time, upon the
earliest of (i) the Date of Termination (as hereinafter defined) of the
Executive's employment with the Company as a result of the Executive's death,
Disability (as defined in Section 3(b)) or Retirement (as defined in Section
3(c)), by the Company for Cause (as defined in Section 3(d)) or by the Executive
other than for Good Reason (as defined in Section 3(e)); and (ii) three years
from the date of a Change in Control if the Executive's employment with the
Company has not terminated as of such time.
2. Change in Control. For purposes of this Agreement, "Change in
Control" shall mean changes in the ownership of a corporation, changes in the
effective control of a corporation, changes in ownership of a substantial
portion of a corporations assets and a disposition of a substantial portion of a
corporation's assets, all as defined below:
(a) A change in the ownership of a corporation occurs on the date
that any one person, or more than one person acting as a group,
acquires ownership of stock of that corporation which, together
with stock held by such person or group, represents more than
fifty percent (50%) of the total fair market value or total
voting power of the stock of such corporation. An increase in
the percentage of stock owned by any one person, or persons acting
as a group, as a result of a transaction in which the
corporation acquires its stock in exchange for property
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will be treated as an acquisition of stock.
(b) A change in the effective control of a corporation occurs on the
date that either: any one person, or more than one person acting as a group
becomes the beneficial owner of stock of the corporation possessing twenty-five
percent (25%) or more of the total voting power of the stock of such
corporation; or a majority of members of the corporation's board of directors is
replaced during any 24 month period by directors whose appointment or election
is not endorsed by at least two-thirds (2/3) of the members of the corporation's
board of directors who were directors prior to the date of the appointment or
election of the first of such new directors.
(c) A change in the ownership of a substantial portion of a
corporation's assets occurs on the date that any one person, or more than one
person acting as a group, acquires (or has acquired during the 12 month period
ending on the date of the most recent acquisition by such person or persons)
assets from the corporation that have a total fair market value equal to or more
than one-half (1/2) of the total fair market value of all of the assets of the
corporation immediately prior to such acquisition or acquisitions. The transfer
of assets by a corporation is not treated as a change in the ownership of such
assets if the assets are transferred: to a shareholder of the corporation
(immediately before the asset transfer) in exchange for such shareholder's
capital stock of the corporation having a fair market value approximately equal
to the fair market value of such assets; or to an entity, fifty percent (50%) or
more of the total value or voting power of which is owned, directly or
indirectly, by the corporation.
(d) A disposition of a substantial portion of a corporation's assets
occurs on the date that the corporation transfers assets by sale, lease,
exchange, distribution to shareholders, assignment to creditors, foreclosure or
otherwise, in a transaction or transactions not in the ordinary course of the
corporation's business (or has made such transfers during the 12 month period
ending on the date of the most recent transfer of assets) that have a total fair
market value equal to or more than one-half (1/2) of the total fair market value
of all of the assets of the corporation as of the date immediately prior to the
first such transfer or transfers. The transfer of assets by a corporation is not
treated as a disposition of a substantial portion of the corporation's assets if
the assets are transferred to an entity, fifty percent (50%) or more of the
total value or voting power of which is owned, directly or indirectly, by the
corporation.
For purposes of the provision of this Agreement defining "Change in Control,"
(i) references to the Company in this Agreement include the Delaware corporation
known as Matria Healthcare, Inc. as of the date of execution of this Agreement,
and any corporation which is the legal successor to such corporation by virtue
of merger or share exchange; and (ii) the terms "person," "acting as a group"
and "ownership" shall have the meanings prescribed in Sections 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3
promulgated thereunder; provided, however, that in any merger, consolidation or
share exchange in which less than fifty percent (50%) of the outstanding voting
securities of the Company or its successor corporation are held by the former
shareholders of the Company, the shareholders of the other parties to the
transaction shall be deemed to have acted as a group that acquired ownership of
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more than fifty percent (50%) of the outstanding voting securities of the
Company, resulting in a change in ownership under Section 2(a) above.
3. Termination Following Change in Control.
(a) General. If the Executive is still an employee of the
Company at the time of a Change in Control, the Executive shall be entitled to
the compensation and benefits provided in Section 4 upon the subsequent
termination of the Executive's employment with the Company by the Executive or
by the Company during the term of this Agreement, unless such termination is as
a result of (i) the Executive's death; (ii) the Executive's Disability; (iii)
the Executive's Retirement; (iv) the Executive's termination by the Company for
Cause; or (v) the Executive's decision to terminate employment other than for
Good Reason.
(b) Disability. The term "Disability" as used in this
Agreement shall mean termination of the Executive's employment by the Company as
a result of the Executive's incapacity due to physical or mental illness,
provided that the Executive shall have been absent from his duties with the
Company on a full-time basis for six consecutive months and such absence shall
have continued unabated for 30 days after Notice of Termination as described in
Section 3(f) is thereafter given to the Executive by the Company.
(c) Retirement. The term "Retirement" as used in this
Agreement shall mean termination of the Executive's employment by the Company
based on the Executive's having attained age 65 or such later retirement age as
shall have been established pursuant to a written agreement between the Company
and the Executive. Termination of Executive's employment at a time when
Executive is eligible to receive benefits under the Company's Retirement Benefit
Award or the Company's Protective Umbrella for Lifelong Security of Employees
Program shall not constitute Retirement unless Executive shall have attained
such age.
(d) Cause. The term "Cause" for purposes of this Agreement
shall mean the Company's termination of the Executive's employment on the basis
of criminal or civil fraud on the part of the Executive involving a material
amount of funds of the Company. Notwithstanding the foregoing, the Executive
shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership
of the Company's Board of Directors at a meeting of the Board called and held
for such purpose (after reasonable notice to the Executive and an opportunity
for the Executive, together with the Executive's counsel, to be heard before the
Board) finding that in the good faith opinion of the Board the Executive was
guilty of conduct set forth in the first sentence of this Section 3(d) and
specifying the particulars thereof in detail. For purposes of this Agreement
only, the preparation and filing of fictitious, false or misleading claims in
connection with any federal, state or other third party medical reimbursement
program, or any other violation of any rule or regulation in respect of any
federal, state or other third party medical reimbursement program by the Company
or any subsidiary of the Company shall not be deemed to constitute "criminal
fraud" or "civil fraud."
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(e) Good Reason. For purposes of this Agreement, "Good Reason"
shall mean any of the following actions taken by the Company without the
Executive's express written consent:
(i) The assignment to the Executive by the Company of
duties inconsistent with, or a material adverse alteration of the powers and
functions associated with, the Executive's position, duties, responsibilities
and status with the Company prior to a Change in Control, or an adverse change
in the Executive's titles or offices as in effect prior to a Change in Control,
or any removal of the Executive from or any failure to re-elect the Executive to
any of such positions, except in connection with the termination of his
employment for Disability, Retirement or Cause or as a result of the Executive's
death or by the Executive other than for Good Reason;
(ii) A reduction in the Executive's base salary as in
effect on the date hereof or as the same may be increased from time to time
during the term of this Agreement or the Company's failure to increase (within
12 months of the Executive's last increase in base salary) the Executive's base
salary after a Change in Control in an amount which at least equals, on a
percentage basis, the average annual percentage increase in base salary for all
corporate officers of the Company effected in the preceding 36 months;
(iii) Any failure by the Company to continue in effect any
benefit plan, program or arrangement (including, without limitation, any profit
sharing plan, group annuity contract, group life insurance supplement, or
medical, dental, accident and disability plans) in which the Executive was
eligible to participate at the time of a Change in Control (hereinafter referred
to as "Benefit Plans"), or the taking of any action by the Company which would
adversely affect the Executive's participation in or materially reduce the
Executive's benefits under any such Benefit Plan, unless a comparable substitute
Benefit Plan shall be made available to the Executive, or deprive the Executive
of any fringe benefit enjoyed by the Executive at the time of a Change in
Control;
(iv) Any failure by the Company to continue in effect any
incentive plan or arrangement (including, without limitation, any bonus or
contingent bonus arrangements and credits and the right to receive performance
awards and similar incentive compensation benefits) in which the Executive is
participating at the time of a Change in Control (or any other plans or
arrangements providing him with substantially similar benefits) (hereinafter
referred to as "Incentive Plans") or the taking of any action by the Company
which would adversely affect the Executive's participation in any such Incentive
Plan or reduce the Executive's benefits under any such Incentive Plan, expressed
as a percentage of his base salary, by more than five percentage points in any
fiscal year as compared to the immediately preceding fiscal year, or any action
to reduce Executive's bonuses under any Incentive Plan by more than 20% of the
average annual bonus previously paid to Executive with respect to the preceding
three fiscal years;
(v) Any failure by the Company to continue in effect any
plan or arrangement to receive securities of the Company (including, without
limitation, the Company's 1997 Stock Incentive Plan, Employee Stock Purchase
Plan and any other plan or arrangement to receive and exercise stock options,
stock appreciation rights, restricted stock or grants thereof) in which the
Executive is participating or has the right to participate in prior to a Change
in Control (or plans or arrangements providing him with substantially similar
benefits) (hereinafter referred to as "Securities
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Plans") or the taking of any action by the Company which would adversely affect
the Executive's participation in or materially reduce the Executive's benefits
under any such Securities Plan, unless a comparable substitute Securities Plan
shall be made available to the Executive;
(vi) A relocation of the Company's principal executive
offices to a location more than ten (10) miles outside of Marietta, Georgia, or
the Executive's relocation to any place other than the Company's principal
executive offices, except for required travel by the Executive on the Company's
business to an extent substantially consistent with the Executive's business
travel obligations immediately prior to a Change in Control;
(vii) Any failure by the Company to provide the Executive
with the number of paid vacation days (or compensation therefor at termination
of employment) accrued to the Executive through the Date of Termination;
(viii) Any material breach by the Company of any provision
of this Agreement;
(ix) Any failure by the Company to obtain the assumption
of this Agreement by any successor or assign of the Company effected in
accordance with the provisions of Section 7(a) hereof;
(x) Any purported termination of the Executive's
employment which is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 3(f), and for purposes of this Agreement, no such
purported termination shall be effective; or
(xi) Any proposal or request by the Company after the
Effective Date to require that the Executive enter into a non-competition
agreement with the Company where the terms of such agreement as to its scope or
duration are greater than the terms set forth in Section 5 hereof.
(f) Notice of Termination. Any termination of the Executive's
employment by the Company for a reason specified in Section 3(b), 3(c) or 3(d)
shall be communicated to the Executive by a Notice of Termination prior to the
effective date of the termination. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which shall indicate whether such
termination is for the reason set forth in Section 3(b), 3(c) or 3(d) and which
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated. For purposes of this Agreement, no termination of the Executive's
employment by the Company shall constitute a termination for Disability,
Retirement or Cause unless such termination is preceded by a Notice of
Termination.
(g) Date of Termination. "Date of Termination" shall mean (a)
if the Executive's employment is terminated by the Company for Disability, 30
days after a Notice of Termination is given to the Executive (provided that the
Executive shall not have returned to the performance of the Executive's duties
on a full-time basis during such 30-day period) or (b) if the Executive's
employment is terminated by the Company or the Executive for any other reason,
the date on which the Executive's termination is effective; provided that, if
within 30 days after any Notice of
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Termination is given to the Executive by the Company the Executive notifies the
Company that a dispute exists concerning the termination, the Date of
Termination shall be the date the dispute is finally determined whether by
mutual agreement by the parties or upon final judgment, order or decree of a
court of competent jurisdiction (the time for appeal therefrom having expired
and no appeal having been perfected).
4. Compensation and Benefits upon Termination of Employment.
(a) If the Company shall terminate the Executive's employment
after a Change in Control other than pursuant to Section 3(b), 3(c) or 3(d) and
Section 3(f), or if the Executive shall terminate his employment for Good
Reason, then the Company shall pay to the Executive, as severance compensation
and in consideration of the Executive's adherence to the terms of Section 5
hereof, the following:
(1) On the Date of Termination, the Company shall become
liable to the Executive for an amount equal to one times the Executive's annual
base compensation on the date of the Change in Control, which amount shall be
paid to the Executive in cash on or before the fifth day following the Date of
Termination.
(2) For a period of one year following the Date of
Termination, the Executive and anyone entitled to claim under or through the
Executive shall be entitled to all benefits under the group hospitalization
plan, health care plan, dental care plan, life or other insurance or death
benefit plan, or other present or future similar group employee benefit plan or
program of the Company for which key executives are eligible at the date of a
Change in Control, to the same extent as if the Executive had continued to be an
employee of the Company during such period and such benefits shall, to the
extent not fully paid under any such plan or program, be paid by the Company.
(3) For the shorter of a period of one year after the Date
of Termination or expiration of the lease term, Company shall allow the
Executive to utilize for his business and personal use any Company leased
automobile furnished to him immediately prior to the Change in Control and shall
reimburse the Executive for the maintenance and repair costs of such automobile
and extend full insurance coverage relating to such automobile in favor of the
Executive, as additional named insured, during such period. In addition, the
Executive shall be entitled, at the Executive's sole discretion, to exercise any
option to acquire such automobile pursuant to the terms which may be provided in
the lease agreement for the automobile in question. For the balance of the
period of one year after the Date of Termination (or for the entire one-year
period if Executive was not being furnished a leased automobile on the Date of
Termination), the Company shall pay the Executive a car allowance (at the rate
of $1,300 per month or at such higher rate as is in effect for Executive's
position immediately prior to a Change in Control or the Date of Termination)
and extend full insurance coverage for the Executive's primary automobile in
favor of the Executive, as additional named insured, during such period.
(b) The parties hereto agree that the payments provided in
Section 4(a) hereof are reasonable compensation in light of the Executive's
services rendered to the Company and in consideration of the Executive's
adherence to the terms of Section 5 hereof. Neither party shall
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contest the payment of such benefits as constituting an "excess parachute
payment" within the meaning of Section 280G(b)(1) of the Code. In the event that
the Executive becomes entitled to the compensation and benefits described in
Section 4(a) hereof (the "Compensation Payments") and the Company has
determined, based upon the advise of tax counsel selected by the Company's
independent auditors and acceptable to the Executive, that, as a result of such
Compensation Payments and any other benefits or payments required to be taken
into account under Code Section 280G(b)(2) ("Parachute Payments"), any of such
Parachute Payments must be reported by the Company as "excess parachute
payments" and are therefore not deductible by the Company, the Company shall pay
to the Executive at the time specified in Section 4(a) above an additional
amount (the "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any of the tax imposed on the Executive by Section
4999 of the Code (the "Excise Tax") and any Federal, state and local income tax
and Excise Tax upon the Gross-Up Payment, shall be equal to the Parachute
Payments determined prior to the application of this paragraph. The value of any
non-cash benefits or any deferred payment or benefit shall be determined by the
Company's independent auditors. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay Federal income taxes at
the highest marginal rate of Federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rates of taxation in the state and locality of the Executive's
residence on the Date of Termination, net of the maximum reduction in Federal
income taxes which could be obtained from deduction of such state and local
taxes. In the event that the Excise Tax payable by the Executive is subsequently
determined to be less than the amount, if any, taken into account hereunder at
the time of termination of the Executive's employment, the Executive shall repay
to the Company at the time that the amount of such reduction in Excise Tax is
finally determined the portion of the Gross-Up Payment attributable to such
reduction plus interest on the amount of such repayment at the rate provided for
in Section 1274(b)(2)(B) of the Code ("Repayment Amount"). In the event that the
Excise Tax payable by the Executive is determined to exceed the amount, if any,
taken into account hereunder at the time of the termination of the Executive's
employment (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), the Company shall
make an additional Gross-Up Payment in respect of such excess (plus any interest
and penalty payable with respect to such excess) immediately prior to the time
that the amount of such excess is required to be paid by Executive ("Additional
Gross-up"), such that the net amount retained by the Executive, after deduction
of any Excise Tax on the Parachute Payments and any Federal, state and local
income tax and Excise Tax upon the Additional Gross-Up Payment, shall be equal
to the Parachute Payments determined prior to the application of this paragraph.
The obligation to pay any Repayment Amount or Additional Gross-up shall remain
in effect under this Agreement for the entire period during which the Executive
remains liable for the Excise Tax, including the period during which any
applicable statute of limitation remains open.
(c) The payments provided in Section 4(a) above shall be in
lieu of any other severance compensation otherwise payable to Executive under
any other agreement between Executive and the Company or the Company's
established severance compensation policies; provided, however, that nothing in
this Agreement shall affect or impair Executive's vested rights under any other
employee benefit plan or policy of the Company.
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(d) Unless the Company determines that any Parachute Payments
made hereunder must be reported as "excess parachute payments" in accordance
with the third sentence of Section 4(b) above, neither party shall file any
return taking the position that the payment of such benefits constitutes an
"excess parachute payment" within the meaning of Section 280G(b)(1) of the Code.
If the Internal Revenue Service proposes an assessment of Excise Tax against the
Executive in excess of the amount, if any, taken into account at the time
specified in Section 4(a), then, if the Company notifies Executive in writing
that the Company elects to contest such assessment at its expense, unless the
Executive waives the right to an Additional Gross-Up Payment, the Executive (i)
shall in good faith cooperate with the Company in contesting such proposed
assessment; and (ii) such Executive shall not settle such contest without the
written consent of the Company. Any such contest shall be controlled by the
Company, provided, however, that the Executive may participate in such contest.
5. Protective Covenants.
(a) Definitions.
This Subsection sets forth the definition of certain
capitalized terms used in Subsections (a) through (f) of this Section 5.
(i) "Competing Business" shall mean a business (other
than the Company) that, directly or through a controlled subsidiary or through
an affiliate, (a) develops, markets and/or sells diabetes or respiratory
supplies ("Competing Products") and/or (b) provides obstetrical home care
services, including, without limitation, programs for monitoring patients who
are at risk of preterm delivery, programs for managing patients suffering from
obstetrical hypertension or diabetes, infusion therapy services involving drugs
to control preterm labor, nursing services and maternity management services for
both low and high risk pregnancies, or diabetes, cardiac, cancer or respiratory
disease management services, including, without limitation, patient education,
risk screening and stratification, case management and clinical services
("Competing Services"). Notwithstanding the foregoing, no business shall be
deemed a "Competing Business" unless, within at least one of the business's
three most recently concluded fiscal years, that business, or a division of that
business, derived more than twenty percent (20%) of its gross revenues or more
than $2,000,000 in gross revenues from the development, marketing or sale of
Competing Products and/or the provision of Competing Services.
(ii) "Competitive Position" shall mean: (A) the
Executive's direct or indirect equity ownership (excluding ownership of less
than one percent (1%) of the outstanding common stock of any publicly held
corporation) or control of any portion of any Competing Business; or (B) any
employment, consulting, partnership, advisory, directorship, agency, promotional
or independent contractor arrangement between the Executive and any Competing
Business where the Executive performs services for the Competing Business
substantially similar to those the Executive performed for the Company,
provided, however, that the Executive shall not be deemed to have a Competitive
Position solely because of the Executive's services for a Competing Business
that are not directly related to the sale of Competing Products or the provision
of Competing Services, unless more than
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thirty-five percent (35%) of the gross revenues of the Competing Business are
derived from the sale of Competing Products and/or the provision of Competing
Services.
(iii) "Covenant Period" shall mean the period of time from
the date of this Agreement to the date that is one year after the Date of
Termination.
(iv) "Customers" shall mean actual customers, clients,
referral sources or managed care organizations or actively sought prospective
customers, clients, referral sources or managed care organizations of the
Company (A) during the one year prior to the date of this Agreement and (B)
during the Covenant Period.
(v) "Restricted Territory" shall mean the United States.
(b) Limitation on Competition. In consideration of the
Company's entering into this Agreement, the Executive agrees that during the
Covenant Period, the Executive will not, without the prior written consent of
the Company, anywhere within the Restricted Territory, either directly or
indirectly, alone or in conjunction with any other party, accept, enter into or
take any action in conjunction with or in furtherance of a Competitive Position
(other than action to reject an unsolicited offer of a Competitive Position).
(c) Limitation on Soliciting Customers. In consideration of
the Company's entering into this Agreement, the Executive agrees that during the
Covenant Period, the Executive will not, without the prior written consent of
the Company, alone or in conjunction with any other party, solicit, divert or
appropriate or attempt to solicit, divert or appropriate on behalf of a
Competing Business with which Executive has a Competitive Position any Customer
located in the Restricted Territory (or any other Customer with which the
Executive had any direct contact on behalf of the Company) for the purpose of
providing the Customer or having the Customer provided with a Competing Product
or Competing Service.
(d) Limitation on Soliciting Personnel or Other Parties. In
consideration of the Company's entering into this Agreement, the Executive
hereby agrees that he will not, without the prior written consent of the
Company, alone or in conjunction with any other party, solicit or attempt to
solicit any employee, consultant, contractor, independent broker or other
personnel of the Company to terminate, alter or lessen that party's affiliation
with the Company or to violate the terms of any agreement or understanding
between such employee, consultant, contractor or other person and the Company.
(e) Acknowledgement. The parties acknowledge and agree that
the Protective Covenants are reasonable as to time, scope and territory given
the Company's need to protect its trade secrets and confidential business
information and given the substantial payments and benefits to which the
Executive may be entitled pursuant to this Agreement.
(f) Remedies. The parties acknowledge that any breach or
threatened breach of a Protective Covenant by the Executive is reasonably likely
to result in irreparable injury to the Company, and therefore, in addition to
all remedies provided at law or in equity, the Executive agrees
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that the Company shall be entitled to a temporary restraining order and a
permanent injunction to prevent a breach or contemplated breach of the
Protective Covenant. If the Company seeks an injunction, the Executive waives
any requirement that the Company post a bond or any other security.
6. No Obligation to Mitigate Damages; No Effect on Other
Contractual Rights.
(a) All compensation and benefits provided to the Executive
under this Agreement are in consideration of the Executive's services rendered
to the Company and of the Executive's adhering to the terms set forth in Section
5 hereof and the Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer after the Date of Termination, or
otherwise.
(b) The provisions of this Agreement, and any payment provided
for hereunder, shall not reduce any amounts otherwise payable, or in any way
diminish the Executive's existing rights, or rights which would accrue solely as
a result of the passage of time, under any Benefit Plan, Incentive Plan or
Securities Plan, employment agreement or other contract, plan or arrangement.
7. Successor to the Company.
(a) The Company will require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, expressly, absolutely and
unconditionally to assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if no
such succession or assignment had taken place. Any failure of the Company to
obtain such agreement prior to the effectiveness of any such succession or
assignment shall be a material breach of this Agreement and shall entitle the
Executive to terminate the Executive's employment for Good Reason. As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor or assign to its business and/or assets as aforesaid, including
without limitation, the Surviving Company in the Merger. If at any time during
the term of this Agreement the Executive is employed by any corporation a
majority of the voting securities of which is then owned by the Company,
"Company" as used in Sections 3, 4, 12 and 14 hereof shall in addition include
such employer. In such event, the Company agrees that it shall pay or shall
cause such employer to pay any amounts owed to the Executive pursuant to Section
4 hereof.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amounts are still payable to him hereunder, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee, or the designee
or, if there be no such designee, to the Executive's estate.
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8. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt required, postage prepaid, as follows:
If to Company:
Matria Healthcare, Inc.
0000 Xxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
If to Executive:
Xxxxxxx X. Xxxxxxx
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
9. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. This Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia.
10. Validity. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
12. Legal Fees and Expenses. The Company shall pay all legal fees,
expenses and damages which the Executive may incur as a result of the
Executive's instituting legal action to enforce his rights hereunder, or in the
event the Company contests the validity, enforceability or the Executive's
interpretation of, or determinations under, this Agreement. If the Executive is
the prevailing party or recovers any damages in such legal action, the Executive
shall be entitled to receive in addition thereto pre-judgment and post-judgment
interest on the amount of such damages.
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13. Severability; Modification. All provisions of this Agreement are
severable from one another, and the unenforceability or invalidity of any
provision of this Agreement shall not affect the validity or enforceability of
the remaining provisions of this Agreement, but such remaining provisions shall
be interpreted and construed in such a manner as to carry out fully the
intention of the parties. Should any judicial body interpreting this Agreement
deem any provision of this Agreement to be unreasonably broad in time,
territory, scope or otherwise, it is the intent and desire of the parties that
such judicial body, to the greatest extent possible, reduce the breadth of such
provision to the maximum legally allowable parameters rather than deeming such
provision totally unenforceable or invalid.
14. Confidentiality. The Executive acknowledges that he has previously
entered into, and continues to be bound by the terms of, a Confidentiality and
Non-Solicitation Agreement with the Company.
15. Agreement Not an Employment Contract. This Agreement shall not be
deemed to constitute or be deemed ancillary to an employment contract between
the Company and the Executive, and nothing herein shall be deemed to give the
Executive the right to continue in the employ of the Company or to eliminate the
right of the Company to discharge the Executive at any time.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first above written.
MATRIA HEALTHCARE, INC.
By:
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Its Chairman of the Board
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Xxxxxxx X. Xxxxxxx
Executive
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