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EXHIBIT 10.35
EMPLOYMENT AGREEMENT
Agreement made as of this 20th day of September, 1995 by and between
Balanced Care Corporation (the "Employer") and Xxxxxx X. Xxxxxx (the
"Employee").
W I T N E S S E T H:
WHERE AS BCC desires to retain the services and employment of
Employee for itself throughout the term of this Agreement, and Employee is
willing to be employed by BCC on a full-time basis for such period, upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and intending to be legally bound, the parties hereto hereby agree
as follows:
1. Employment. The Employer hereby employees Employee and
Employee hereby accepts employment by the Employer subject to all the terms and
conditions hereafter set forth.
2. Capacity. Employee shall serve as Sr. Vice President.
3. Duties. During the term of this Agreement, Employee shall
devote his full attention and best efforts to the performance of the customary
duties of those offices of the Employer to which he is elected by the Board of
Directors of the Employer.
4. Term of Employment. Unless earlier terminated as hereafter
provided, this Agreement shall commence on SEPTEMBER 1, 1995 and shall expire on
AUGUST 31, 1998, provided however, that upon expiration of such term, this
Agreement shall be extended from year to year without further action on the part
of the parties hereto, unless either party gives written notice of termination
to the other party at least ninety (90) days prior to the expiration of the then
current term.
5. Termination.
(a) Death. The employment of Employee under this agreement shall
immediately terminate upon the death of Employee.
(b) Disability. In the event that Employee, in the reasonable
opinion of the Board of Directors of the Employer acting in the best interest of
the Employer, is for any reason unable to perform the duties to be performed by
Employee hereunder for a period of 120 consecutive days, the Board of Directors
of the Employer shall have the option to terminate the employment of Employee
under this Agreement effective upon its giving written notice to Employee at any
time following the expiration of such 120-day period.
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(c) Termination for Cause. The employment of Employee under this
Agreement shall terminate immediately if the Board of Directors of the Employer
discharges Employee for cause. For purposes of this paragraph "Cause" shall
mean: (i) Employee's material failure to perform his duties hereunder, which
failure continues for sixty (60) days after Employee's receipt of written notice
of such failure by the Board of Directors of the Employer; (ii) Employee's
conviction of a felony involving moral turpitude; and (iii) Employee's gross
misconduct which shall have materially and adversely affected the Employer.
6. Compensation.
(a) Cash Compensation. During the term of this Agreement or any
extension thereof, as compensation for services to the Employer, Employer shall
pay to Employee a base salary of $80,000 per year in semi-monthly installments.
The Board of Directors of the Employer may, in its sole discretion from time to
time, increase the base compensation to be paid to Employee as provided in this
paragraph, or provide additional compensation to Employee, including but not
limited to the annual bonus provided for in Section 6 (b) hereof, whether
permanently or for a limited time period, based upon the earnings or performance
of the Employee or otherwise in order to recognize and fairly compensate
Employee for the value of his services to the Employer. In addition, Employee
shall be entitled to receive all fringe benefits provided to its employees and
officers by Employer, including but not limited to insurance benefits, which are
appropriate for an employee or officer holding his office.
(b) Annual Bonus. During the term of this Agreement, Employee
shall be entitled to receive a bonus with respect to each fiscal year of
Employer during the term of his employment in an amount not less than 40% of
Employee's base salary upon achievement of the annual operating budget as
approved by the Board of Directors of the Employer. Such annual bonus shall be
paid no later than ten (10) days after submission of the Employer's annual
audited financial statements to Board of Directors of the Employer. If this
Agreement is terminated other than at the end of a fiscal year, Employee's bonus
for the year of termination shall be calculated and paid in the normal manner
but pro-rated based upon the number of days in such years prior to such
termination; provided, however, that if the termination is under Section 5 (c)
hereof, no bonus shall be paid for the year of termination.
(c) Vacation. Employee shall receive four (4) weeks per year, such
vacation to be taken when and as desired by the Employee. Any time spent by the
Employee at professional meetings, instructional causes and other similar
meetings so as to better enable the Employee to perform professional services in
the employ of Employer shall not be considered vacation time.
(d) Other Compensation. From time to time, Employer may provide
such pension and profit sharing benefits as is Board of Directors of the
Employer shall authorize.
7. Non-Competition.
(a) Definitions. The following definitions apply to this
paragraph 7.
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(i) Business Activities. The "Business Activities" include
managing, leasing or owning long-term care facilities or assisted
living centers, or managing, leasing or owning subacute operations or
facilities of nursing homes within a thirty (30) mile radius of an
Employer facility.
(ii) Employer Customers. The "Employer Customers" are (y)
those persons or entities Employee or other Employer personnel sold,
solicited or service within the six (6) months preceding the end of
Employee's employment; and (2) those persons or entities about which
Employee had access to proprietary information within six (6) months
preceding the end of Employee's employment.
(b) Restriction on Unfair Competition. While employed by Employer
and for one (1) year after Employee's employment ends, Employee agrees not to do
any of the following: (i) directly or indirectly own an interest in, manage, or
control a business engaged in the Business Activities; or (ii) otherwise engage
in the Business Activities in a fashion which completes with the Employer; or
(iii) provide to a competitor of Employer consulting service or services as an
employee, partner or owner, which services relate to the Business Activities.
(c) Restriction on Solicitation. While employed by Employer and
for one (1) year after Employee's employment ends, Employee agrees not to do any
of the following: (i) directly or indirectly solicit or encourage Employer
Customers to deal with Employee or any other person or entity other than the
Employer in connection with the Employer Customer's requirements for the
Business Activities, or assist or aid any others to do so; or (ii) directly or
indirectly solicit or encourage other personnel subject to the provisions of
this paragraph 7 to engage in any of the activities restricted in this
Agreement; or (iii) directly or indirectly solicit for Employee's benefit or the
benefit of others the employment or services of any then-present employee of
Employer.
(d) Listed Stock Ownership Exception. Nothing in this paragraph
7 shall prevent Employee from acquiring as a passive investor up to five
percent (5%) of the equity of a competing enterprise.
8. Change of Control.
(a) Payment Due. If prior to termination of this Agreement, there
should be a "Change of Control" as defined in Section (b) below, and thereafter
(a) Employee's services should be terminated for any reason other than
Employee's voluntary withdrawal, or (b) Employee voluntarily withdraws within
one (1) year of a Change of Control as a result of his good faith determination
that, as a result of such Change of Control Employee is no longer able to
perform his duties under this Agreement, Employer will, on or before Employee's
last day of providing service hereunder, pay to Employee in lieu of any other
rights to cash compensation he may have under this Agreement which have not
accrued to such date, a lump sum cash payment equal to his total cash
compensation under Sections 6 (a) and 6 (b) hereof for the proceeding three (3)
years.
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(b) Definition. "Change of Control" shall be deemed to have taken
place if; (i) any person, including a group but not excluding the Employer or
any current stockholder of the Employer who beneficially owns five percent (5%)
or more of the Employer's outstanding shares, becomes the beneficial owner of
shares of the Employer having twenty percent (20%) or more of the total number
of votes that may be cast for the election of directors; (ii) there occurs any
cash tender or exchange offer for shares of Employer, merger or other business
combination, sale of assets or contested election, or any combination of the
foregoing transaction, and as a result of or in connection with any such event
person who were directors of Employer before the event shall cease to constitute
a majority of the Board of Directors of the Employer or any successor to
Employer. As used herein, the terms "person" and "beneficial owner" have the
same meaning as such terms under Section 13 (d) of the Securities Exchange Act
of 1934 and the rules and regulations thereunder.
9. The Employee agrees that if Employee voluntarily terminates
this contract within one (1) year from the commencement date, Employee shall be
required to sell one hundred percent (100%) of the common shares of the Employer
then owned by the Employee to the Employer at fair market value. If Employee
voluntarily terminates this contract in year two (2) the Employee shall be
required to sell seventy-five percent (75%) of his shares to Employer at fair
market value and if the Employee voluntarily terminates his contract in year
three (3) Employee shall be required to sell fifty percent (50%) of his shares
to Employer at fair market value. It is further provided that Employee shall pay
$50,000 to Xxxx Xxxxxxx if the Employee voluntarily terminates his employment
within 24 months of commencement date. (This provision is effective only when
500,000 shares of the Employer's Class A preferred stock has been sold to Xxxx
Xxxxxxx at a price of not less than $2.00 per share.)
10. Assignment. This Agreement shall not be assignable by the
Employee; and shall be assignable to Employer only to a person, firm or
corporation which may become a successor in interest (by purchase, merger or
otherwise) to the Employer with respect to the business or a portion of the
business presently operated by it.
11. Entire Agreement. This writing represents the entire
agreement and understanding of the parties with respect to the subject matter
hereof, and it may not be altered or amended except by an agreement in writing.
12. Binding Effect. Subject to Section 9, this Agreement shall be
binding upon and enure to the benefit of the parties hereto and their respective
successors, assigns, heirs, executors and administrators. If any provision of
this Agreement shall be or become illegal or unenforceable in whole or in part
for any reason whatsoever, the remaining provisions shall nevertheless be deemed
valid, binding and enforceable.
13. Governing Law. This Agreement has been negotiated and executed
within the Commonwealth of Pennsylvania, and the validity, interpretation and
enforcement of this Agreement shall be governed by the laws of Pennsylvania.
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14. Headings. The headings of paragraphs in this Agreement are
for convenience only; they form no part of this Agreement and shall not affect
its interpretation.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
BALANCED CARE CORPORATION
Attest:
By: /s/ Xxxx X. Xxxxxxxxx
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(Corporate Seal)
WITNESS /s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxx
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Employee (Seal)
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