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Exhibit 10.37
FIRST AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
THIS FIRST AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT, made as of
the 26th day of May, 1999, by and between Balanced Care Corporation, a Delaware
corporation with a principal office at 0000 Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxxxxxx, XX, 00000 (the "Company") and Xxxx X. Xxxxx, an individual health
care executive (the "Executive").
Reference is made to that certain Change in Control Agreement dated
September 23, 1998, by and between the Company and the Executive (the "Existing
Agreement").
WITNESSETH:
WHEREAS, the Company and the Executive desire to amend and restate the
terms and conditions of the Existing Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, receipt and sufficiency of
which are hereby acknowledged, the Company and the Executive agree to amend and
restate the Existing Agreement in its entirety and to that end agree that this
First Amended and Restate Change in Control Agreement shall be deemed effective
on and as of the date hereof, shall supersede the Existing Agreement in its
entirety and shall be referred to herein as the "Agreement".
The Company and the Executive covenant and agree as follows:
1. Employment. The Company employs the Executive as an employee at will
and the Executive's employment by the Company is subject to all of the
terms and conditions set forth herein.
2. Termination Following a Change in Control. The Executive shall be
entitled to receive a Severance Payment if, within three (3) years
following a Change in Control, there occurs any of the following
events
(A) any termination of the Executive except for Cause;
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(B) any material reduction in the Executive's responsibilities
(including reporting responsibilities) or authority, including as
such responsibilities or authority may be increased from time to
time;
(C) the assignment to the Executive of duties inconsistent with the
Executive's office on the date of a Change in Control or as the
same may be increased from time to time after a Change in
Control;
(D) any material reduction (including, after a Change in Control,
proportional reductions affecting all employees or executive
employees) in the Executive's annual base salary in effect on the
date of a Change in Control or as the same may be increased from
time to time after a Change in Control;
(E) any failure (including, after a Change in Control, proportional
failures affecting all executive employees) to continue the
Executive's participation on substantially similar terms in the
Plan or any bonus plan in which the Executive participated at the
time of the Change in Control or any change or amendment to any
substantive provisions of any such plan which would materially
decrease the potential benefits to the Executive under any of
such plans;
(F) any failure (including, after a Change in Control, a proportional
failure affecting all executive employees) to provide the
Executive with benefits at least as favorable as those enjoyed by
the Executive under any of the Company's pension, life insurance,
medical, health and accident or other employee plans in which the
Executive participated at the time of the Change in Control,
unless such reduction relates to a reduction in benefits
applicable to all employees generally;
(G) the reassignment of the Executive to a location greater than
sixty (60) miles from the principal executive offices of the
Company before the Change in Control; and
(H) in the event of any of the events described in (B) through (G)
above, the Executive voluntarily terminates
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his employment under this Agreement as a result of such event(s).
3. Definitions: As used in this Agreement, the following terms shall have
the meanings set forth below:
(A) "Cause" shall mean willful misconduct, intentional and material
failure to perform duties under this Agreement by the Executive
or the Executive's conviction of a felony. No termination for
cause shall be effective unless and until the Executive is given
written notice that the act or omission constitutes "Cause" under
this Agreement and the Executive is given an opportunity to
correct or cure the particular act or omission within thirty (30)
days after receipt by the Executive of such written notice from
the Company.
(B) A "Change in Control" shall be deemed to have taken place if: (i)
any person, including a group but not excluding the Company or
any current stockholder of the Company who beneficially owns five
percent (5%) or more of the Company's outstanding shares, becomes
the beneficial owner of shares of the Company having twenty
percent (20%) or more of the total number of votes that may be
cast for the election of directors or (ii) there occurs any cash
tender or exchange offer for shares of the Company, merger or
other business combination, sale of assets or contested election,
or any combination of the foregoing transactions, and as a result
of or in connection with any such event persons who were
directors of the Company before the event shall cease to
constitute a majority of the Board of Directors of the Company or
any successor to the Company. As used herein, the terms "person"
and "beneficial owner" have the same meaning as under Section
13(d) of the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
(C) A "Severance Payment" shall include the following: (i) all
outstanding stock options granted to the Executive, if any, under
the Company's 1996 Stock Incentive Plan, as such plan may be
amended from time to time (the "Plan"), shall immediately become
vested and shall be exerciseable in accordance with the
provisions of the Plan and (ii) a lump sum cash payment, shall be
payable
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within 30 days of termination of employment, equal to the
sum of (a) the amount determined by multiplying by three (3) the
Executive's annual base salary then in effect on the date of
termination and (b) the maximum amount of the Executive's
potential annual bonus percentage payable for the year in which
the termination took place.
4. Notice of Termination. Any notice of termination of employment of the
Executive shall be given by the Company in writing and delivered by
hand delivery or by registered or certified mail, return receipt
requested, postage prepaid, at such address as the Executive shall
have furnished to the Company in writing.
5. Non-Competition and Non-Solicitation. As further consideration for the
Company's execution and delivery of this Agreement to the Executive,
the Executive agrees as follows:
(A) Restrictions on Competition. While employed by the Company and
for a period of one (1) year following termination of the
Executive's employment, the Executive agrees that he will not
directly or indirectly own an interest in, manage or control, or
provide consulting services or services as an employee or
partner, to a business engaged in managing, leasing, owning or
operating assisted living facilities (the "Business Activities")
within a sixty (60) mile radius of any Company facility existing
or under active development at the time of such termination.
(B) Restriction on Solicitation. While employed by the Company and
for a period of one (1) year following termination of the
Executive's employment, the Executive agrees that he will not
directly or indirectly: (i) solicit or encourage any of the
Company's customers to deal with the Executive or any other third
party other than the Company or (ii) solicit for the Executive's
benefit or for the benefit of any third party the employment or
services of any then current employee of the Company.
(C) Listed Stock Ownership Exception. Nothing in this Section 5 shall
prohibit the Executive from owning
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stock in a publicly traded company as a passive investor provided
that the Executive shall not own more than 5% of the equity of a
publicly traded competing enterprise of the Company's.
Notwithstanding the foregoing, the restrictions contained in this
Section 5(C) shall not apply to publicly traded nursing home and
sub-acute care companies and shall only apply to publicly traded
assisted living companies while the Executive is employed by the
Company and for a one (1) year period following termination of
the Executive's employment.
6. Successors.
(A) This Agreement is personal to the Executive and shall not be
assignable by the Executive otherwise than by his will or by the
laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by the Executive's legal heirs
and representatives.
(B) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(C) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of the Company
to assume expressly 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 had taken place. As
used in this Agreement, the Company shall mean the Company as
hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law or otherwise.
7. Entire Agreement. This writing represents the entire agreement and
understanding between the parties with respect to the subject matter
contained herein and may not be altered or amended except in a writing
signed by both parties.
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8. Unenforceability. If any provision of this Agreement shall be adjudged
by any court of competent jurisdiction to be invalid or unenforceable for any
reason, such judgment shall not affect, impair or invalidate the remainder of
this Agreement.
9. Waiver. The failure of the parties to insist upon strict compliance with
any provision hereof or the failure to assert any right the parties may have
hereunder shall not be deemed to be a waiver of such provision or right or any
other provision or right thereof by the parties.
10. Counterparts. This Agreement may be executed by the parties in two or
more counterparts, each of which shall be deemed to be an original, but all such
counterparts shall constitute one and the same instrument.
11. Headings. The headings of the sections and subsections of this
Agreement are for convenience only and shall not control or affect the meaning
or construction or limit the scope or intent of any of the provisions of this
Agreement.
12. Governing Law. This Agreement has been negotiated and executed within
the Commonwealth of Pennsylvania and shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, intending to be legally bound hereby, the parties have
executed this Agreement as of the date first above written.
ATTEST: BALANCED CARE CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx
Asst. Secretary Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer
WITNESS: EXECUTIVE:
/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
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