EMPLOYMENT AGREEMENT by and between ODYSSEY HEALTHCARE, INC. and CRAIG P. GOGUEN dated July 26, 2007
Exhibit
10.1
by
and between
ODYSSEY
HEALTHCARE, INC.
and
XXXXX
X. XXXXXX
dated
July
26,
2007
TABLE
OF CONTENTS
Page
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1. | Certain Definitions |
1
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2.
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Term of Employment; Non-Renewal of Term |
5
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3.
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Terms of Employment |
5
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(a)
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Position
and Duties
|
5
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(b)
|
Compensation
|
6
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4.
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Termination of Employment |
9
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(a)
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Death
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9
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(b)
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Disability
|
9
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(c)
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Cause
|
9
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(d)
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Resignation
by Employee
|
9
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(e)
|
Agreement
Not to Terminate
|
9
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5.
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Compensation Upon Termination Prior to a Change in Control of the Company and After the Second Anniversary of such Change in Control |
10
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(a)
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Death
or Disability
|
10
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(b)
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For
Cause; Resignation by Employee Without Good Reason; Non-Renewal
Election
by Employee
|
10
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(c)
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Without
Cause; Resignation by Employee for Good Reason; Non-Renewal
Election by
the Company
|
11
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6.
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Compensation Upon Employment Termination Occurring On or Within Two Years After a Change in Control of the Company |
12
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(a) |
Compensation
Upon Termination
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12
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7.
|
Other Provisions Relating to Termination |
14
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(a)
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Notice
of Termination
|
14
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(b) |
Date
of Termination
|
15
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(c) |
Good
Reason
|
15
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(d) |
Cause
|
16
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(e) |
Full
Settlement; Mitigation
|
16
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(f) |
Release
and Other Agreements
|
16
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(g) |
409A
Compliance.
|
17
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8.
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Disclosure of, Access to and Entrustment of Confidential Information, Business Opportunities and Business Goodwill |
17
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9.
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Confidential Information; Ownership of Property |
17
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(a) |
Obligations
to Maintain Confidentiality
|
17
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(b) |
Ownership
of Work Product
|
19
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10.
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Non-Competition; Non-Solicitation; Xxx-Xxxxxxxxxxxxx |
00
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00.
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Successors; Binding Agreement |
21
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12.
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Effect of Agreement on Plans and Agreements Governing Awards |
22
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13.
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Miscellaneous |
22
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(a)
|
Construction
|
22
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(b)
|
Notices
|
22
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(c)
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Severability
|
23
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(d)
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Withholding
|
23
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(e)
|
No
Waiver
|
23
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(f)
|
Equitable
and Other Relief
|
24
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(g)
|
Entire
Agreement
|
24
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(h)
|
Arbitration
|
24
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(i)
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Attorney
Fees
|
25
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(j)
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Survival
|
25
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(k)
|
Governing
Law
|
25
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(l)
|
Amendments
|
25
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(m)
|
Employee
Acknowledgement
|
25
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(n)
|
Counterparts
|
25
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i
THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into July 26,
2007 to be effective as of August 20, 2007 (the “Effective Date”), by and
between Odyssey HealthCare, Inc., a Delaware corporation (the “Company”),
and Xxxxx X. Xxxxxx (“Employee”).
RECITALS:
A. The
Company is a national provider of hospice services and desires to employ
Employee as the Senior Vice President and Chief Operating Officer of the
Company.
B. The
Company considers the establishment and maintenance of a sound and vital
management group to be essential to protecting and enhancing its best interests
and the best interests of its stockholders.
C. In
order
to induce Employee to accept employment by the Company as an officer of the
Company and its Subsidiaries (as defined in Section 1(o) below), the
Company is willing to agree to provide certain severance benefits to Employee
in
the event that Employee’s employment is terminated or changed under the
circumstances described in this Agreement.
D. Employee
is desirous of committing himself to serve the Company and its Subsidiaries
on
the terms herein provided.
AGREEMENTS:
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Certain
Definitions. As
used in this Agreement, the following terms have the meanings set forth
below:
(a) “Acquiring
Person” means any Person or group of related Persons (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) other than (i) Employee
or any
Employee Affiliate, or (ii) the Company, any of the Company’s Subsidiaries, any
employee benefit plan of the Company or of a Subsidiary of the Company or
of a
corporation owned directly or indirectly by the stockholders of the Company
in
substantially the same proportions as their ownership of stock of the Company,
or any trustee or other fiduciary holding securities under an employee benefit
plan of the Company or of a Subsidiary of the Company or of a corporation
owned
directly or indirectly by the stockholders of the Company in substantially
the
same proportions as their ownership of stock of the Company.
(b) “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly
controls, is controlled by, or is under common control with the Person in
question. As used in this definition of “Affiliate,” the term “control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of Voting Securities, by contract, or otherwise.
1
(c) “Board”
means the Board of Directors of the Company and any committee
thereof.
(d) “Cause”
means Employee’s
(i) continued
failure to substantially perform Employee’s material obligations and duties
under Section 3(a) (other than as a result of physical or mental
incapacity), as reasonably determined by the Board, and which is not remedied
within 30 days after receipt of written notice from the Company specifically
identifying the manner in which the Company believes that Employee has not
substantially performed Employee’s material obligations and duties under
Section 3(a);
(ii) commission
of an act of fraud, embezzlement, misappropriation, willful misconduct, bad
faith, dishonesty, breach of trust, or breach of fiduciary duty against the
Company;
(iii) material
breach of Sections 8, 9 or 10;
(iv) conviction,
plea of no contest or nolo contendere, deferred adjudication or unadjudicated
probation for any felony or any crime involving moral turpitude;
(v) failure
to
carry out, or comply with, in any material respect, any lawful directive
of the
Board or the Reporting Officer (as defined in Section 3(a)) consistent with
the
terms of this Agreement, which is not remedied within 30 days after receipt
of
written notice from the Company specifying such failure;
(vi) violation
of the Company’s substance abuse policy; or
(vii) suspension
or termination of Employee from participation in the Medicare or Medicaid
programs.
(e) “Change
in Control” means the occurrence of any of the following
events:
(i) any
of the
events described in clauses (ii), (iii) and (iv) of the definition of “Change in
Control” in the Odyssey HealthCare, Inc. 2001 Equity-Based Compensation Plan as
in effect on the date of this Agreement; or
(ii) any
Acquiring Person is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent or more of the combined voting power of the then
outstanding Voting Securities of the Company.
(f) “Competing
Business” means a business that competes in any material respect with the
business engaged in by the Company or any of its Subsidiaries, (A) at the
time in question in respect of the Term of Non-Competition (as defined in
Section 1(p)) occurring prior to the Date of Termination and (B) as
of the Date of Termination (as defined in Section 7(b)) in respect of the
Term of Non-Competition occurring on and after the Date of
Termination.
2
(g) “Competing
Services” means services that, if provided to a business other than a
Competing Business, would constitute the conduct of a Competing
Business.
(h) “Disability”
means Employee’s inability to perform, with or without reasonable
accommodations, the essential functions of Employee’s position hereunder for a
period of 180 consecutive days due to mental or physical incapacity, as
determined by mutual agreement of a physician selected by the Company or
its
insurers and a physician selected by Employee; provided, however, that if
the
opinion of the Company’s physician and Employee’s physician conflict, the
Company’s physician and Employee’s physician shall together agree upon a third
physician, whose opinion shall be binding. The foregoing definition
of “Disability” is not intended to and shall not affect the definition of
“disability” or any similar term in any insurance policy the Company or any of
its Subsidiaries may provide.
(i) “Employee
Affiliate” means any Person directly or indirectly controlled by Employee.
For purposes of this Agreement, a Person shall be presumed to be controlled
by
Employee if (i) Employee is a general partner of such Person (including any
partnership in which Employee is a general partner or any trust in which
Employee is a trustee or beneficiary), (ii) Employee directly or indirectly
beneficially owns 10% or more of the outstanding Voting Securities of such
Person or (iii) such Person is controlled by any Person contemplated in clauses
(i) or (ii) of this definition.
(j) “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
(k) “Geographic
Area” means each city (including the 50-mile radius surrounding such city)
in which the Company or any of its Subsidiaries has a facility that engages
in
its respective business or any line of its business (A) at the time in
question in respect of the Term of Non-Competition occurring prior to the
Date
of Termination and (B) as of the Date of Termination in respect of the Term
of Non-Competition occurring on and after the Date of Termination.
(l) “Good
Reason” means, subject to the terms and provisions of this Agreement
(including Sections 1(d) and 4(b)), the occurrence of one or more
of the following events:
(i) any
removal of Employee from the offices of Senior Vice President and Chief
Operating Officer of the Company; provided, however, that Good Reason may
not be
asserted by Employee under this clause (i) after a Non-Renewal Notice has
been
given by either the Company or Employee;
(ii) any
termination or material reduction of a material benefit under any Investment
Plan or Welfare Plan in which Employee participates unless (A) there is
substituted a comparable benefit that is economically substantially equivalent
to the terminated or reduced benefit prior to such termination or reduction
or
(B) benefits under such Investment Plan or Welfare Plan are terminated or
reduced with respect to all employees previously granted benefits
thereunder;
(iii) any
reduction in Employee’s Annual Base Salary;
3
(iv) any
failure by the Company to comply with any of the provisions of Section
3(b), which failure is not contemplated previously within this
definition;
(v) any
failure by the Company to comply with Section 11(c);
(vi) the
relocation or transfer of Employee’s principal office to a location more than 50
miles from Employee’s work address as of the Effective Date in the city of
Dallas, Texas, without Employee’s consent;
(vii) a
change
in Employee’s reporting relationship described in Section 3(a) which results in
Employee reporting to an officer of the Company other than the Chief Executive
Officer of the Company; or
(viii) without
limiting the generality of the foregoing, any material breach by the Company
or
any of its Subsidiaries or other Affiliates of (A) this Agreement or (B)
any
other agreement between Employee and the Company or any such Subsidiary or
other
Affiliate,
excluding,
in the case of clauses (i) through (viii), any isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by Employee.
(m) “Person”
means any individual, partnership, limited liability partnership, joint venture,
corporation, limited liability company, trust, association, or other entity
or
organization.
(n) “Pro
Rata Bonus” means the amount equal to the product of (i) the amount of the
Annual Bonus (as defined in Section 3(b)(ii)), if any, to which Employee
would have been entitled for the calendar year in which Employee’s Date of
Termination occurs if Employee’s employment were not terminated during such
calendar year, multiplied by (ii) a fraction, the numerator of which is
the number of days that have elapsed since the beginning of such calendar
year through (but not including) Employee’s Date of
Termination, and the denominator of which is the total number of days in
such
calendar year. The amount, if any, of the Annual Bonus to which
Employee would have been entitled for the calendar year in which the Date
of
Termination occurs shall be determined by the Board in its sole good faith
discretion; provided, however, that during the period on or within two years
after a Change in Control, for purposes of determining the amount of the
Pro
Rata Bonus, Employee shall be deemed to have been entitled to an Annual Bonus
of
not less than the amount of the last Annual Bonus awarded to Employee prior
to
such Change in Control, and provided further however that any determination
by
the Board as to satisfaction of a performance standard shall be made in the
same
manner as such determination is made for the other executive officers of
the
Company.
(o) “Subsidiary”
means, with respect to any Person, any corporation or other entity of which
a
majority of the voting power of the voting equity securities or equity interest
is owned, directly or indirectly, by that Person.
4
(p)
“Term of Non-Competition” means the period of time beginning on the
Effective Date and continuing until 5:00 p.m., Dallas, Texas time, on the
first
anniversary of the Date of Termination.
(q) “Voting
Securities” means any securities that vote generally in the election of
directors, in the admission of general partners, or in the selection of any
other similar governing body.
(r) “without
Cause” means a termination by the Company of Employee’s employment during
the Term at the Company’s sole discretion for any reason other than a
termination based upon Cause, death or Disability; provided that, “without
Cause” does not include termination of this Agreement and Employee’s employment
pursuant to Section 2.
2. Term
of Employment; Non-Renewal of Term. Subject
to the terms and provisions of this Agreement, the Company hereby agrees
to
employ Employee, and Employee hereby agrees to be employed by the Company,
for
the period (the “Term”) commencing on the Effective Date and, unless
Employee’s employment hereunder is sooner terminated in accordance with the
terms hereof, expiring at 5:00 p.m., Dallas Texas time, on August 19, 2010;
provided, however, that commencing on August 19, 2010 (the Employment
Expiration Date”), and on each August 19th occurring thereafter, the Term
shall automatically (without any action by either party) be extended for
one
additional year unless, at least 90 days prior to the expiration of the Term,
the Company or Employee shall have given written notice (a “Non-Renewal
Notice”) that it or Employee, as applicable, does not wish to extend this
Agreement (a “Non-Renewal”). Either party may elect not to
renew this Agreement. The term “Term,” as utilized in this Agreement,
shall refer to the Term as so automatically extended. The Term shall
expire as a result of any Non-Renewal at 5:00 p.m., Dallas, Texas time, on
the
August 19th of the extension period during which a
Non-Renewal Notice is given, and Employee’s employment shall terminate at the
expiration of the Term.
(i) During
the
Term, Employee shall serve as Senior Vice President and Chief Operating Officer
of the Company. In so doing, Employee shall have such powers and
duties (including holding officer positions with one or more Subsidiaries
of the
Company) as may be assigned from time to time by the Board, so long as such
powers and duties are reasonable and customary for Senior Vice Presidents
and
Chief Operating Officers of an enterprise comparable to the
Company. Employee shall report to the Chief Executive Officer of the
Company (the “Reporting Officer”).
(ii) During
the
Term, and excluding any periods of vacation and sick leave to which Employee
is
entitled, Employee agrees to devote all of Employee’s business time to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to Employee hereunder, to (a) use Employee’s best
efforts to perform diligently, faithfully, effectively and efficiently such
responsibilities, (b) use Employee’s best efforts to promote the interests of
the Company; (c) use Employee’s reasonable best efforts to maintain Employer’s
status as a participating provider under the Medicare and Medicaid
programs; and (d) perform such other duties appropriate
for Employee’s position as the Board or the Reporting Officer may from time to
time reasonably direct.
5
(iii) Employee
shall not engage, directly or indirectly, in any other business, investment,
or
activity that interferes with the performance of Employee’s duties under this
Agreement, is contrary to the interests of the Company or requires any portion
of Employee’s business time; provided, however, that during the Term, it shall
not be a violation of this Agreement for Employee to (1) serve on the board
of
directors (or similar governing body) of one or more other companies that
do not
engage in a Competing Business if the Board has provided prior approval (which
shall not be unreasonably withheld) for such service, (2) serve on
corporate, civic, charitable or industry sector association boards or
committees, (3) deliver lectures or fulfill speaking engagements and (4)
manage
personal investments, so long as such activities do not materially interfere
with the performance of Employee’s responsibilities as an employee of the
Company in accordance with this Agreement.
(b) Compensation.
(i) Annual
Base Salary. During the Term, Employee shall receive an annual
base salary (“Annual Base Salary”), which shall be paid bi-weekly in
accordance with the customary payroll practices for executive officers of
the
Company, in an amount at least equal to $310,000.00 per year. At
least annually (by no later than January 31 of each year) during the Term,
the Board shall review the Annual Base Salary of Employee and may increase
(but
not decrease) the Annual Base Salary by such amount as the Board shall deem
appropriate. The term “Annual Base Salary” as used in this
Agreement shall refer to the Annual Base Salary as it may be so
increased.
(ii) Annual
Bonus. During the Term, Employee shall be eligible to receive, in
addition to the Annual Base Salary, such annual bonus payments as the Board
may
specify in its sole discretion (each, an “Annual
Bonus”). Annually (by no later than March 15 of each calendar
year during the Term), the Board shall determine the amount (or amount range)
of
the Annual Bonus that Employee shall be eligible to receive for the calendar
year and the performance goals that must be achieved for Employee to become
entitled to receive the Annual Bonus for such calendar year. For each
calendar year (or partial calendar year) during the Term, the Board shall
determine in its sole good faith discretion whether the performance goals
established for Employee for such calendar year have been achieved, such
determination to be made by no later than the date on which the Company publicly
announces its earnings for such calendar year in a press release in the
immediately following calendar year. Subject to the terms hereof, any
Annual Bonus that Employee becomes entitled to receive shall be payable to
Employee within fifteen days after such determination by the
Board. Notwithstanding anything to the contrary in this Agreement,
Employee shall not be entitled to any Annual Bonus for the 2007 calendar
year;
provided, however, Employee’s Annual Bonus for the 2008 calendar year shall be
determined by the Board based on Employee’s Annual Base Salary for the 2008
calendar year plus the prorated amount of Employee’s Annual Base Salary earned
for the 2007 calendar year and shall be subject to the achievement of the
performance goals for the 2008 calendar year established by the Board in
accordance with this Section 3(b)(ii).
6
(iii) Stock
Options. On the Effective Date, the Company shall grant Employee
an option to purchase an aggregate of 225,000 shares of the Company’s common
stock, which grant shall be subject to the terms and provisions of the Odyssey
HealthCare, Inc. 2001 Equity-Based Compensation Plan Management Stock Option
Agreement, dated August 20, 2007, attached hereto as Exhibit A and the
Odyssey HealthCare, Inc. 2001 Equity-Based Compensation Plan dated as of
November 5, 2001, as amended by that certain First Amendment to the Odyssey
HealthCare, Inc. 2001 Equity-Based Compensation Plan dated as of May 5, 2005
and
by that certain Second Amendment to the Odyssey HealthCare, Inc. 2001
Equity-Based Compensation Plan dated as of May 5, 2005.
(iv) Incentive,
Savings, Stock Option and Retirement Plans. During the Term,
Employee shall be entitled to participate in all incentive, savings, stock
option, equity-based, profit sharing and retirement plans, practices, policies
and programs applicable generally to other executive officers of the
Company (“Investment Plans”), subject to all of the
terms and conditions of such Investment Plans.
(v) Welfare
Benefit Plans. During the Term, Employee and/or Employee’s
family, as the case may be, shall be eligible for participation in and shall
receive all benefits under the welfare benefit plans, practices, policies
and
programs (“Welfare Plans”) provided by the Company (including, without
limitation, medical, prescription, dental, short-term and long-term disability,
salary continuance, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable generally
to
other executives of the Company, subject to all of the terms and conditions
of
such Welfare Plans.
(vi) Perquisites. During
the Term, Employee shall be entitled to receive (in addition to the benefits
described above) such perquisites and fringe benefits appertaining to Employee’s
position in accordance with any policies, practices, and procedures established
by the Board. In addition to the forgoing, Employee shall be entitled
to receive a health club dues allowance of not more than $100.00 per month,
as
determined by the Board.
(vii) Expenses. During
the Term, Employee shall be entitled to receive prompt reimbursement for
all
reasonable business-related expenses incurred by Employee in the performance
of
Employee’s duties in accordance with the Company’s policies, practices and
procedures.
(viii) Vacation
and Holidays. During the Term, Employee shall be entitled to paid
vacation, in accordance with the plans, policies, programs and practices
of the
Company for its executive officers. In addition, Employee shall be
entitled to sick leave and paid holidays, in accordance with the plans,
policies, programs and practices of the Company for its executive
officers.
(ix) Proration. Above,
any payments or benefits payable to Employee hereunder in respect of any
calendar year during which Employee is employed by the Company for less than
the
entire year, unless otherwise provided in the applicable plan or arrangement
or
by this Agreement, shall be prorated in accordance with the number of days
in
such calendar year during which Employee is so employed.
7
(x) Relocation
Expenses. Company shall reimburse Employee for the following
expenses related to his relocation to the Dallas, Texas metropolitan
area:
(A) Reimbursement
for reasonable out-of-pocket expenses incurred by Employee for packing, moving
and unpacking Employee’s household goods, personal effects and two cars from his
current residence in Simsbury, Connecticut (“Former Residence”) to his
new residence in the Dallas, Texas metropolitan area up to a maximum amount
of
$30,000.00 and for the travel expenses of Employee and Employee’s wife and
children in connection with such move, subject to the Company’s travel
reimbursement policy;
(B) Reimbursement
for reasonable out-of-pocket expenses incurred by Employee for up to two
(2)
house hunting trips for Employee and his wife to the Dallas, Texas metropolitan
area, subject to the Company’s travel reimbursement policy; and
(C) Reimbursement,
on a monthly basis, for reasonable out-of-pocket expenses incurred by Employee
for interim living expenses from the Effective Date until the earlier of
(1) the
date Employee sells the Former Residence or (2) twelve (12) months after
the
Effective Date, in an amount equal to either (x) in the event Employee leases
a
temporary residence in the Dallas, Texas metropolitan area before selling
the
Former Residence, the sum of the actual monthly lease payment incurred by
Employee to lease such temporary residence plus the actual monthly lease
payment
incurred by Employee to lease temporary storage for Employee’s household goods
and personal effects or (y) in the event Employee purchases a permanent
residence in the Dallas, Texas metropolitan area before selling the Former
Residence, the sum of the regular monthly payment on the existing mortgage
on
the Former Residence less the portion of the monthly payment allocable to
principal plus the monthly pro rata amount of the annual property insurance
premium paid by Employee on the Former Residence; provided, however, the
total
monthly payments payable by Company to Employee under this Section
3(b)(x)(C) shall not exceed $60,000.00. The reimbursement
provided for under this Section 3(b)(x)(C) is subject to Employee using
reasonable efforts to sell the Former Residence.
To
the
extent any payments made to Employee under (A), (B) and
(C), above, are not deductible by Employee for federal
income tax
purposes, Company shall gross up Employee’s salary by an amount equal to 36.45%
of the non-deductible amount paid to Employee. In addition to the
reimbursement of actual relocation related expenses set forth above in this
Section 3(b)(x), Company shall pay to Employee a miscellaneous relocation
allowance of $20,000.00, payable within fourteen (14) days following the
Effective Date, which amount shall not be subject to any gross-up for federal
or
state taxes.
8
(b) Disability. If
the Disability of Employee has occurred
during the Term, the Company may give to Employee a written Notice of
Termination (as defined in Section 7(a)) in accordance with Section
7(a) of its intention to terminate Employee’s employment
hereunder. In such event, Employee’s employment shall terminate
effective on the 30th day after receipt of such notice by Employee (the
“Disability Effective Date”); provided that, within 30 days after receipt
of the Notice of Termination, Employee shall not have returned to perform,
with
or without reasonable accommodations, the essential functions of Employee’s
position on a full-time basis. During any period of Employee’s
Disability, the Company may assign Employee’s duties to any other Employee of
the Company or may engage or hire a third party to perform such duties and
any
such action shall not be deemed “Good Reason” for Employee to terminate this
Agreement pursuant to Section 4(d)(i) so long as Employee continues to
receive the compensation and benefits under Section 3 during such
period.
(c) Cause. Subject
to Section 7(d), the Company may terminate Employee’s employment at any
time during the Term for Cause or without Cause.
(d) Resignation
by Employee. At
Employee’s option, Employee may terminate Employee’s employment hereunder (i)
subject to Section 7(c), for Good Reason or (ii) without Good
Reason.
(e) Agreement
Not to Terminate. Notwithstanding
any provision to the contrary contained in this Agreement, the Company agrees
that it shall not have the right to terminate Employee’s employment, other than
for Cause, for a period of time commencing on the Effective Date and ending
at
5:00 p.m., Dallas, Texas time, on the 180th day following the Effective
Date.
5. Compensation
Upon Termination Prior to a Change in Control of the Company and After the
Second Anniversary of such Change in Control. Prior
to the occurrence of a Change in Control of the Company and after the second
anniversary of such Change in Control of the Company, conditioned on the
execution and delivery of a Release (as defined in Section 7(f)) signed
by Employee or Employee’s legal representative pursuant to Section 7(f),
Employee shall, subject to the provisions of Section 7(g), be entitled to
the following compensation from the Company upon the termination of Employee’s
employment during the Term, which shall be in lieu of any other severance
pay or
employment benefits to which Employee might otherwise be entitled (whether
contractual or under a severance plan, the WARN Act, any other applicable
law,
or otherwise):
(a) Death
or Disability. If
Employee’s employment is terminated by
reason of Employee’s death or Disability, the Company shall pay to Employee or
Employee’s legal representatives (i) within 60 days after the Employee’s Date of
Termination, a lump sum in cash equal to the sum of Employee’s Annual Base
Salary through the Date of Termination to the extent not previously paid
and any
compensation previously deferred by Employee (together with any accrued interest
or earnings thereon) (the “Accrued Obligations”); (ii) the amount of any
Annual Bonus to which Employee was entitled for the calendar year ending
prior
to the Date of Termination to the extent not previously paid, which amount
shall
be paid at such time as the Company pays other executives of the Company
annual
bonuses for the prior calendar year (but in no event later than the fifteenth
business day after the Company publicly announces its earnings for such calendar
year in a press release); (iii) without duplication of any amount payable
pursuant to clause (ii) above, the amount of any Pro Rata Bonus, which shall
be
paid at such time as the Company pays the other executives of the Company
annual
bonuses for the calendar year in which Employee’s Date of Termination occurs
(but in no event later than the fifteenth business day after the Company
publicly announces its earnings for such calendar year in a press release);
(iv)
any amounts arising from Employee’s participation in, or benefits under, any
Investment Plan (the “Accrued Investments”), which amounts shall be paid
in accordance with the terms and conditions of such Investment Plan; and
(v) any
amounts to which Employee or Employee’s spouse, beneficiaries or estate are
entitled from Employee’s participation in, or benefits under, any Welfare Plan
(“Accrued Welfare Benefits”), which amounts shall be paid in accordance
with the terms and conditions of such Welfare Plan. Except as
described in this Section 5(a), in the event of Employee’s
termination by reason of Employee’s death or Disability, Employee and Employee’s
legal representatives, as applicable, shall forfeit all rights to any other
compensation.
9
(b) For
Cause; Resignation by Employee Without Good Reason; Non-Renewal Election
by
Employee. If
the Company shall terminate Employee’s
employment for Cause or Employee resigns without Good Reason or Employee’s
employment is terminated due to a Non-Renewal election by Employee, the Company
shall have no further obligations to Employee other than the obligation for
payment of:
(i) the
Accrued Obligations, which shall be payable within 60 days after Employee’s Date
of Termination;
(ii) the
amount
of any Annual Bonus to which Employee was entitled for the calendar year
ending
prior to the Date of Termination to the extent not previously paid, which
amount
shall be payable at such time as the Company pays other executive of the
Company
annual bonuses for the prior calendar year (but in no event later than the
fifteenth business day after the Company publicly announces its earnings
for
such calendar year in a press release);
(iii) the
Accrued Investments, which amounts shall be paid in accordance with the terms
and conditions of the Investment Plans;
(iv) the
Accrued Welfare Benefits, which amounts shall be paid in accordance with
the
terms and conditions of the Welfare Plans; and
(v) without
duplication of any amount payable pursuant to clause (ii) above, solely in
the
case of a Non-Renewal by Employee, the amount of any Pro Rata Bonus, which
shall
be paid at such time as the Company pays the other executives of the Company
annual bonuses for the calendar year in which Employee’s Date of Termination
occurs (but in no event later than the fifteenth business day after the Company
publicly announces its earnings for such calendar year in a press
release).
Except
as
described in this Section 5(b), in the event of Employee’s termination by
the Company for Cause or by Employee without Good Reason or due to a Non-Renewal
election by Employee, Employee shall forfeit all rights to any other
compensation.
10
(c) Without
Cause; Resignation by Employee for Good Reason; Non-Renewal Election by the
Company. If
the Company shall terminate Employee’s employment without Cause (other than by
reason of Employee’s death or Disability or a Non-Renewal) or Employee resigns
for Good Reason or Employee’s employment is terminated due to a Non-Renewal
election by the Company, then the Company shall pay or provide
Employee:
(i) within
60
days after Employee’s Date of Termination, a lump sum in cash equal to the
aggregate of the following amounts: (A) the Accrued Obligations and (B) the
amount of any Annual Bonus to which Employee was entitled for the calendar
year
ending prior to the Date of Termination to the extent not previously
paid;
(ii) without
duplication of any amount payable pursuant to clause (i)(B) above, the amount
of
any Pro Rata Bonus, which shall be paid at such time as the Company pays
the
other executives of the Company annual bonuses for the calendar year in which
Employee’s Date of Termination occurs (but in no event later than the fifteenth
business day after the Company publicly announces its earnings for such calendar
year in a press release);
(iii) the
Accrued Investments, which amounts shall be paid in accordance with the terms
and conditions of the Investment Plans;
(iv) the
Accrued Welfare Benefits, which amounts shall be paid in accordance with
the
terms and conditions of the Welfare Plans;
(v) the
amount
of Employee’s Annual Base Salary as of the Date of Termination, which amount
shall be paid in bi-weekly payments, in accordance with the customary payroll
practices of the Company, for the period from the Date of Termination through
the first anniversary of the Date of Termination (such period, the “Severance
Period”) in accordance with the customary payroll practices for executive
officers of the Company; provided, however, that Employee shall be entitled
to
receive the amount payable pursuant to this Section 5(c)(v) only so long
as Employee has not breached the provisions of Section 8, 9 or
10, at which time the Company’s payment obligations pursuant to this
Section 5(c)(v) shall immediately cease;
(vi) if
Employee is entitled on the Date of Termination to coverage under the medical,
prescription, and dental portions of the Welfare Plans, continuation of such
coverage for Employee and Employee’s dependents for a period ending on the later
to occur of (A) the first anniversary of the Date of Termination or (B) the
Employment Expiration Date. Employee will be responsible for paying,
on an after tax basis, the active employee cost payable by Employee with
respect
to those costs paid by Employee prior to the Date of Termination and the
balance
of such costs shall be paid by the Company, with income applicable to such
costs
imputed to Employee; provided, however, that this coverage will count towards
the depletion of any continued health care coverage rights that Employee
and
Employee’s dependents may have pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”); provided, further,
however, that Employee’s or Employee’s dependents’ rights to continued health
care coverage pursuant to this Section 5(c)(vi) shall terminate at the
time Employee or Employee’s dependents become covered, as described in COBRA,
under another group health plan, and shall also terminate as of the date
the
Company ceases to provide coverage to its senior executives generally under
any
such Welfare Plan; and
11
(vii) Employee
shall be entitled to exercise Employee’s Awards (as defined in the Odyssey
HealthCare, Inc. 2001 Equity-Based Compensation Plan) that are vested as
of the
Date of Termination pursuant to the terms of the plan or agreement governing
such Awards.
Except
as
described in this Section 5(c), in the event of Employee’s termination by
the Company without Cause or by Employee for Good Reason or due to a Non-Renewal
election by the Company, Employee shall forfeit all rights to any other
compensation.
(a) Compensation
Upon Termination. After
the occurrence of a Change in Control of the Company and on or before the
second
anniversary of such Change in Control, conditioned on the execution and delivery
of a Release signed by Employee or Employee’s legal representative pursuant to
Section 7(f), Employee shall, subject to the provisions of Section
7(g), be entitled to the following compensation from the Company upon the
termination of Employee’s employment during the Term, which shall be in lieu of
any other severance pay or employment benefits to which Employee might otherwise
be entitled (whether contractual or under a severance plan, the WARN Act,
any
other applicable law, or otherwise):
(i) Death
or Disability. If Employee’s employment is terminated by reason
of Employee’s death or Disability, then Employee or Employee’s legal
representatives shall be entitled to the same compensation benefits from
the
Company as set forth in Section 5(a) to which Employee would have been
entitled if the termination of Employee’s employment had occurred prior to the
occurrence of a Change in Control or after the second anniversary of such
Change
in Control. Except as described in this Section 6(a)(i),
Employee’s death or Disability, Employee and Employee’s legal representatives,
as applicable, shall forfeit all rights to any other compensation.
(ii) For
Cause; Resignation by Employee Without Good Reason; Non-Renewal Election
by
Employee. If the Company shall terminate Employee’s employment
for Cause or Employee resigns without Good Reason or Employee’s employment is
terminated due to a Non-Renewal election by Employee, then Employee or
Employee’s legal representatives shall be entitled to the same compensation
benefits from the Company as set forth in Section 5(b) to which Employee
would have been entitled if the termination of Employee’s employment had
occurred prior to the occurrence of a Change in Control or after the second
anniversary of such Change in Control. Except as described in this
Section 6(a)(ii), in the event of Employee’s termination by the Company
for Cause or by Employee without Good Reason or due to a Non-Renewal election
by
Employee, Employee shall forfeit all rights to any other
compensation.
(iii) Without
Cause; Resignation by Employee for Good Reason; Non-Renewal Election by the
Company. If the Company shall terminate Employee’s employment
without Cause (other than by reason of Employee’s death or Disability) or
Employee resigns for Good Reason or Employee’s employment is terminated due to a
Non-Renewal election by the Company, then the Company shall pay or provide
Employee:
12
(A) within
60
days after Employee’s of Termination, a lump sum in cash equal to the aggregate
of the following amounts: (1) the Accrued Obligations and (2) the amount
of any
Annual Bonus to which Employee was entitled for the calendar year ending
prior
to the Date of Termination to the extent not previously paid;
(B) the
amount
of any Pro Rata Bonus, which shall be paid at such time as the Company pays
the
other executives of the Company annual bonuses for the calendar year in which
Employee’s Date of Termination occurs (but in no event later than the fifteenth
business day after the Company publicly announces its earnings for such calendar
year in a press release);
(C) the
Accrued Investments, which amounts shall be paid in accordance with the terms
and conditions of the Investment Plans;
(D) the
Accrued Welfare Benefits, which amounts shall be paid in accordance with
the
terms and conditions of the Welfare Plans;
(E) bi-weekly
payments each of which are equal to 1/26th of the highest Annual Base Salary
to
which Employee was entitled during the 24-month period ending on the Date
of
Termination, payable in accordance with the customary payroll practices of
the
Company, which payments shall continue from the Date of Termination through
the
later to occur of (1) the first anniversary of the Date of Termination or
(2)
the second anniversary of the date on which the Change of Control was
consummated (such period, the “Change of Control Severance Period”); provided,
however, that Employee shall be entitled to receive the amount payable pursuant
to this Section 6(a)(iii)(E) only so long as Employee has not breached
the provisions of Section 8, 9 or 10, at which time the
Company’s payment obligations pursuant to this Section 6(a)(iii)(E) shall
immediately cease; and
(F) if
Employee is entitled on the Date of Termination to coverage under the medical,
prescription, and dental portions of the Welfare Plans, continuation of such
coverage for Employee and Employee’s dependents for a period ending on the later
to occur of (1) the first anniversary of the Date of Termination or (2) the
Employment Expiration Date. Employee will be responsible for paying,
on an after tax basis, the active employee cost by Employee with respect
tot
those costs paid by Employee prior to the Date of Termination and the balance
of
such costs shall be paid by the Company, with income applicable to such costs
imputed to Employee; provided, however, that this coverage will count towards
the depletion of any continued health care coverage rights that Employee
and
Employee’s dependents may have pursuant to COBRA; provided further, however,
that Employee’s or Employee’s dependents’ rights to continued health care
coverage pursuant to this Section 6(a)(iii)(F) shall terminate at the
time Employee or Employee’s dependents become covered, as described in COBRA,
under another group health plan, and shall also terminate as of the date
the
Company ceases to provide coverage to its senior executives generally under
any
such Welfare Plan; and
13
(G) Employee
shall be entitled to exercise Employee’s Awards (as defined in the Odyssey
HealthCare, Inc. 2001 Equity-Based Compensation Plan) that are vested as
of the
Date of Termination pursuant to the terms of the plan or agreement governing
such Awards.
Except
as
described in this Section 6(a)(iii), in the event of Employee’s
termination by the Company without Cause or by Employee for Good Reason or
due
to a Non-Renewal election by the Company, Employee shall forfeit all rights
to
any other compensation.
(a) Notice
of Termination. Any
termination by the Company for Cause or without Cause or by reason of Employee’s
Disability, or by Employee’s resignation for Good Reason or without Good Reason,
shall be communicated by Notice of Termination to the other party hereto
given
in accordance with Section 13(b). For purposes of this
Agreement, a “Notice of Termination” means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon
and
(ii) to the extent applicable, sets forth in reasonable detail the facts
and
circumstances claimed to provide a basis for termination of Employee’s
employment under the provision so indicated. The failure by the
Company or Employee to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Cause or Good Reason shall
not
waive any right of the Company or Employee hereunder or preclude the Company
or
Employee from asserting such fact or circumstance in enforcing the Company’s or
Employee’s rights hereunder.
(b) Date
of
Termination. “Date
of Termination” means (i) if Employee’s employment is terminated by reason
of Employee’s death, the date of Employee’s death; (ii) if Employee’s employment
is terminated by reason of Employee’s Disability, the Disability Effective Date
(provided that Employee shall not have returned to perform, with or without
reasonable accommodation, the essential functions of Employee’s position on a
full-time basis during such 30-day period); (iii) if Employee’s employment is
terminated by the Company without Cause or by Employee for Good Reason or
without Good Reason, then, subject to Section 7(c), the date specified in
the Notice of Termination (which date shall be a date between the date that
the
Notice of Termination is given and 30 days thereafter (inclusive)); (iv)
if
Employee’s employment is terminated by the Company for Cause then, subject to
Section 7(d), the date on which the Notice of Termination is given;
and (v) if Employee’s employment is terminated due to a Non-Renewal
election by Employee or the Company, the date on which the Term
expires.
(c) Good
Reason. Upon
Employee’s learning of the occurrence of
any event described in the definition of Good Reason in Section 1(l),
Employee may terminate Employee’s employment hereunder for Good Reason within 60
days thereafter by giving a Notice of Termination to the Company to that
effect,
describing in reasonable detail the facts or circumstances giving rise to
Employee’s right to terminate Employee’s employment for Good Reason (and, if
applicable, the action required to cure same). If the effect of the occurrence
of the event described in Section 1(l) may be cured, the Company shall
have the opportunity to cure any such effect for a period of 60 days following
receipt of Employee’s Notice of Termination. If within 60 days following the
Company’s receipt of a Notice of Termination for Good Reason the Company has not
cured the facts or circumstances giving rise to Employee’s right to terminate
Employee’s employment for Good Reason, then the termination by Employee for Good
Reason shall be effective as of the date specified in Employee’s Notice of
Termination. If Employee does not give a Notice of Termination to the Company
within 60 days after learning of the occurrence of an event giving rise to
Good
Reason, then this Agreement shall remain in effect; provided, however, that
the
failure of Employee to terminate this Agreement for Good Reason shall not
be
deemed a waiver of Employee’s right to terminate Employee’s employment for Good
Reason upon the occurrence of a subsequent event described in Section
1(l) in accordance with the terms of this Agreement. Notwithstanding the
foregoing, the right of Employee to terminate Employee’s employment for Good
Reason under Section 4(d)(i) shall not limit the Company’s right to
terminate Employee’s employment for Cause under Section 4(c) if Cause is
determined to exist prior to the time Good Reason is determined to
exist.
14
(d) Cause. Upon
the Company learning of the occurrence of any event described in
Section 1(d), the Company may at any time terminate Employee’s
employment hereunder for Cause within 60 days thereafter by giving Employee
a
Notice of Termination to that effect, describing in reasonable detail the
facts
or circumstances giving rise to the Company’s right to terminate Employee’s
employment for Cause (and, if applicable, the action required to cure
same). If the Company does not give a Notice of Termination to
Employee within 60 days after learning of the occurrence of an event giving
rise
to Cause, then this Agreement shall remain in effect; provided, however,
that
the failure of the Company to terminate this Agreement for Cause shall not
be
deemed a waiver of the Company’s right to terminate Employee’s employment for
Cause upon the occurrence of a subsequent event described in Section 1(d)
in accordance with the terms of this Agreement. Notwithstanding the foregoing,
the right of the Company to terminate Employee’s employment for Cause under
Section 4(c) shall not limit Employee’s right to resign for Good Reason
under Section 4(d)(i) if Good Reason is determined to exist prior to the
time Cause is determined to exist.
(e) Full
Settlement; Mitigation. In
no event shall Employee be obligated to seek other employment or take any
other
action by way of mitigation of the amounts payable to Employee under any
of the
provisions of this Agreement, and such amounts shall not be reduced whether
or
not Employee obtains other employment. The Company shall not be
liable to Employee for any damages for breach of this Agreement in addition
to
the amounts payable under Section 5 or 6 arising out of the
termination of Employee’s employment prior to the end of the
Term. The Company shall be entitled to seek damages from Employee for
any breach of Section 8, 9 or 10 by Employee or for
Employee’s criminal misconduct.
(f) Release
and Other Agreements. Notwithstanding
any other provision in this Agreement to the contrary, in consideration for
receiving the severance benefits described in (i) Sections 5(c)(v),
5(c)(vi) and 5(c)(vii) or (ii) Sections 6(a)(iii)(E),
6(a)(iii)(F) and 6(a)(iii)(G), as the case may be, Employee
hereby
agrees to execute (and not revoke) a release in substantially the form attached
hereto as Exhibit B (the “Release”). If Employee fails
to properly execute and deliver the Release (or revokes the Release), Employee
agrees that Employee shall not be entitled to receive such severance
benefits. Without limiting the foregoing, in consideration for
receiving such severance benefits, upon any termination of Employee’s employment
(other than by reason of death), whether Employee’s employment is terminated by
Employee or by the Company, Employee hereby agrees to resign in writing,
in form
and substance reasonably acceptable to the Company, from all officer and/or
director positions with the Company or any Subsidiary or Affiliate thereof,
effective on the Date of Termination. For purposes of this Agreement,
the Release and the resignation shall be considered to have been executed
by
Employee if it is signed by Employee’s legal representative in the case of
Employee’s legal incompetence or on behalf of Employee’s estate in the case of
Employee’s death. Upon Employee’s execution and delivery of the
Release, the Company shall also promptly execute and deliver the
Release.
15
To
the
extent required by section 409A of the Code, if on Employee’s Date of
Termination he is a “specified employee” within the meaning of section 409A of
the Code, any amounts payable to Employee by reason of his termination of
employment pursuant to Section 5 or Section 6 will be delayed for
a period of six months following the Date of Termination. In the case
of any bi-weekly payments that would have been paid to Employee pursuant
to
Section 5(c)(v) or Section 6(a)(iii)(E) during such six month
period such amounts shall be paid to him in the form of a lump sum payment
at
the end of the six-month period and the remaining payments will be paid on
a
bi-weekly basis for the remainder of the period specified in Section
5(c)(v) or Section 6(a)(iii)(E), as applicable.
8. Disclosure
of, Access to and Entrustment of Confidential Information, Business
Opportunities and Business Goodwill. During
the course of Employee’s employment with the Company (including during the
180-day period following the Effective Date), the Company shall disclose
to
Employee, or place Employee in a position to have access to or develop,
Confidential Information (as defined in Section 9(a)(i)), and/or shall
entrust Employee with business opportunities of the Company, and/or shall
place
Employee in a position to develop business goodwill on behalf of the
Company. There is a need and desire on the part of the Company and
Employee to specify the parties’ rights and obligations with respect to the
ownership and protection of such Confidential Information, business
opportunities and goodwill. Accordingly, as a material inducement to the
Company
to enter into this Agreement; in consideration for the compensation and other
benefits payable hereunder to Employee; to protect the Company’s Confidential
Information that has been and will be in the future disclosed or entrusted
to
Employee (the disclosure of which by Employee in violation of this Agreement
would adversely affect the business goodwill of the Company), the business
goodwill of the Company that has been and will in the future be developed
in
Employee and the business opportunities that have been and will in the future
be
disclosed or entrusted to Employee by the Company; and for other good and
valuable consideration, Employee agrees to comply with, and be bound by,
Sections 9 and 10. As used in this Section 8,
“Company” shall include the Company and any of its Subsidiaries.
(i) Employee
acknowledges that the Company has trade, business and financial secrets and
other confidential and proprietary information regarding the Company and
its
business, in whatever form, tangible or intangible (collectively, the
“Confidential Information”), and that, during the course of Employee’s
employment with the Company (including during the 180-day period following
the
Effective Date), Employee has received, shall receive or be placed in a position
to have access to or develop Confidential Information. Employee
further acknowledges and agrees that Employee’s use of Confidential Information
in the conduct of business on behalf of a competitor of the Company would
constitute unfair competition with the Company and would adversely affect
the
business goodwill of the Company. Confidential Information includes
sales materials, technical information, processes and compilations of
information, records, specifications and information concerning customers,
prospective customers, customer and prospective customer lists, and information
regarding methods of doing business. As defined herein, Confidential
Information shall not include information that is (i) obtained by Employee
from
a source other than the Company or its Affiliates, which source is not under
a
duty of non-disclosure in regard to such information or (ii) becomes generally
available to the public other than through disclosure by Employee in violation
of the provisions of this Agreement.
16
(ii) Employee
is aware of those policies implemented by the Company to keep its Confidential
Information secret, including those policies limiting the disclosure of
information on a need-to-know basis and requiring the keeping of information
in
secure areas. Employee acknowledges that the Confidential Information
has been developed or acquired by the Company through the expenditure of
substantial time, effort and money and provides the Company with an advantage
over competitors who do not know or use such Confidential
Information.
(iii) During
and
following Employee’s employment by the Company, Employee shall hold in
confidence and not directly or indirectly disclose, use (for Employee’s
commercial advantage or otherwise), copy, make lists of, or make available
to
others any Confidential Information except in Employee’s good faith performance
of Employee’s duties to the Company as an executive of the Company or to the
extent authorized in writing by the Board or required by law or compelled
by
legal process. Employee agrees to use reasonable efforts to give the
Company notice of any and all attempts to compel disclosure of any Confidential
Information, in such a manner so as to provide the Company with written notice
at least five days before disclosure or within three business days after
Employee is informed that such disclosure is being or shall be compelled,
whichever is earlier. Such written notice shall include a description
of the information to be disclosed, the court, government agency, or other
forum
through which the disclosure is sought, and the date by which the information
is
to be disclosed, and shall contain a copy of the subpoena, order or other
process used to compel disclosure.
(iv) Employee
further agrees not to use any Confidential Information for the benefit of
any
person or entity other than the Company.
(v) Employee
agrees that all Confidential Information and other files, documents, materials,
records, notebooks, customer lists, business proposals, contracts, agreements
and other repositories containing information concerning the Company or the
business of the Company, in whatever form, tangible or intangible (including
all
copies thereof), that Employee shall prepare, or use, or be provided with
as a
result of Employee’s employment with the Company, shall be and remain the sole
property of the Company. Upon termination of Employee’s employment
hereunder, Employee agrees that all Confidential Information and other files,
documents, materials, records, notebooks, customer lists, business proposals,
contracts, agreements and other repositories containing information concerning
the Company or the business of the Company (including all copies thereof)
in
Employee’s possession, custody or control, whether prepared by Employee or
others, shall remain with or be returned to the Company promptly (within
48
hours) after the Date of Termination. The materials required to be
returned pursuant to this Section 9(a)(v) shall not include personal
correspondence or other personal property of Employee that does not relate
to
the Company or the business of the Company.
17
(vi) Notwithstanding
anything herein to the contrary, Employee may disclose to any and all persons,
without limitation of any kind, the U.S. federal income tax treatment and
tax
structure of the transactions contemplated in this Agreement and all materials
of any kind (including opinions and other tax analyses) that are provided
to
Employee relating to such tax treatment and tax structure. For this
purpose, “tax structure” is limited to facts relevant to the U.S. federal income
tax treatment of the transactions contemplated in this Agreement and does
not
include information relating to the identity of the parties hereto.
(b) Ownership
of Work Product. Employee
acknowledges that all discoveries,
concepts, ideas, inventions, innovations, improvements, developments, methods,
processes, programs, designs, analyses, drawings, reports, patent applications,
copyrightable work and mask work (whether or not including any confidential
information) and all registrations or applications related thereto, all other
proprietary information and all similar or related information (whether or
not
patentable) that relate to the Company’s or its Affiliates’ actual or
anticipated business, research and development, or existing or future products
or services and that are conceived, developed, contributed to, made, or reduced
to practice by Employee (either solely or jointly with others) while employed
by
the Company (including any of the foregoing that constitutes any proprietary
information or records) (“Work Product”) belong to the Company or its
Affiliates, as applicable, and Employee hereby assigns, and agrees to assign,
all of the above Work Product to the Company or its Affiliates, as
applicable. Any copyrightable work prepared in whole or in part by
Employee in the course of Employee’s work for any of the foregoing entities
shall be deemed a “work made for hire” under the copyright laws, and the Company
or its Affiliates, as applicable, shall own all rights therein. To
the extent that any such copyrightable work is not a “work made for hire,”
Employee hereby assigns and agrees to assign to the Company all right, title,
and interest, including without limitation, copyright in and to such
copyrightable work. Employee shall promptly disclose such Work
Product and copyrightable work to the Board and perform all actions reasonably
requested by the Board (whether during or after the Term) to establish and
confirm the Company’s or its Affiliates’, as applicable, ownership (including,
without limitation, assignments, consents, powers of attorney, and other
instruments).
(c) As
used in this Section 9“Company” shall include the Company and any of its
Subsidiaries.
18
(a) For
the reasons and consideration specified in Section 8, Employee hereby
covenants and agrees that, during the Term of Non-Competition, Employee shall
not, directly or indirectly, individually or as an officer, director, manager,
employee, stockholder, consultant, contractor, partner, member, joint venturer,
agent, equity owner or in any capacity whatsoever:
(i) own,
engage in, manage, operate, join, control, be employed by, provide Competing
Services to, or participate in the ownership, management, operation or control
of or provision of Competing Services to, a Competing Business operating
in the
Geographic Area;
(ii) knowingly
recruit, hire, assist in hiring, attempt to hire, or contact or solicit with
respect to hiring any Person who, at any time during the 12 month period
ending
on the Date of Termination, was an employee of the Company; provided, that
Employee may hire any Person that served as an administrative assistant assigned
to Employee at the time Employee’s employment with the Company
terminates;
(iii) induce
or
attempt to induce any employee of the Company to terminate, or in any way
interfere with, the relationship between the Company and any employee thereof;
or
(iv) induce
or
attempt to induce any customer, client, patient, supplier, service provider,
or
other business relation of the Company in the Geographic Area to cease doing
business with the Company, or in any way interfere with the relationship
between
the Company and any such Person.
Notwithstanding
the foregoing, the Company agrees that Employee may own less than one percent
of
the outstanding voting securities of any publicly traded company that is
a
Competing Business so long as Employee does not otherwise participate in such
competing business in any way prohibited by this Section
10. This Section 10(a) shall not apply in the event
Company breaches any of its obligations under Section 5 or
6.
(b) Employee
shall not make any negative or disparaging comments regarding the Company,
its
Subsidiaries or Affiliates or any of their respective officers, directors,
shareholders, partners, members, managers, agents or employees (collectively,
the “Representatives”), including regarding the performance of the
Company, its Subsidiaries or Affiliates, or otherwise take any action that
could
reasonably be expected to adversely affect the Company, its Subsidiaries
or
Affiliates or the personal or professional reputation of any of their respective
Representatives. Information required to be disclosed by Employee
pursuant to any applicable law, court order, subpoena, process or governmental
decree shall not constitute a violation or breach of this Section 10(b);
provided, that Employee delivers written notice of such required disclosure
to
the Company promptly before making such disclosure if such notice is not
prohibited by applicable law, court order, subpoena, process or governmental
decree.
(c) Employee
acknowledges that the geographic boundaries, scope of prohibited activities,
and
time duration of the preceding paragraphs in this Section 10 (including
the defined terms for “Competing Business,” “Geographic Area,” and “Term of
Non-Competition” set forth in Section 1) are reasonable in nature
and are no broader than are necessary to maintain the goodwill of the Company
and the confidentiality of its Confidential Information and to protect the
goodwill and other legitimate business interests of the Company, and also
that
the enforcement of such covenants would not cause Employee any undue hardship
or
unreasonably interfere with Employee’s ability to earn a
livelihood. If Employee violates the covenants and restrictions in
this Section 10 and the Company brings legal action for injunctive or
other equitable relief, Employee agrees that the Company shall not be deprived
of the benefit of the full period of the restrictive covenant, as a result
of
the time involved in obtaining such relief. Accordingly, Employee
agrees that the provisions in Section 10(a) shall have a duration
determined pursuant to Section 10(a), computed from the date the legal or
equitable relief is granted.
19
(d) If
any court in any jurisdiction determines that any portion of this
Section 10 (including the defined terms for “Competing Business,”
“Geographic Area,” and “Term of Non-Competition” set forth in
Section 1) is invalid or unenforceable within such jurisdiction
under circumstances then existing, the remainder of this Section 10
(including the defined terms for “Competing Business,” “Geographic Area,” and
“Term of Non-Competition” set forth in Section 1) shall not thereby
be affected and shall be given full effect without regard to the invalid
or
unenforceable provisions. If any court in any jurisdiction construes
any of the provisions of this Section 10 (including the defined terms for
“Competing Business,” “Geographic Area,” and “Term of Non-Competition” set forth
in Section 1) to be invalid or unenforceable within such
jurisdiction under circumstances then existing, because of the duration,
scope
or geographical area of such provision, such court shall be required to
substitute the maximum duration, scope or geographical area reasonable under
such circumstances within such jurisdiction for the stated period, scope
or area
with respect to such jurisdiction and such court shall be allowed to revise
the
restrictions contained herein to cover the maximum duration, scope and area
permitted by law, and to enforce such provision as so revised.
(e) As
used in this Section 10 (and the defined terms for “Competing Business,”
“Geographic Area,” and “Term of Non-Competition” set forth in
Section 1), “Company” shall include the Company and any of its
Subsidiaries.
(a) This
Agreement is personal to Employee and shall not be assignable by Employee
otherwise than by will or the by laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by Employee’s personal and legal representatives, executors,
administrators, heirs, distributes, devisees and legatees.
(b) This
Agreement shall inure to the benefit of and be binding upon the Company and
its
successors and assigns.
(c) The
Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation, sale of assets or otherwise) to all or substantially
all
of the business and/or assets of the Company, by a written agreement in form
and
substance reasonably satisfactory to Employee, 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. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement
and
shall entitle Employee to compensation from the Company in the same amount
and
on the same terms as Employee would be entitled to pursuant to
Section 6 if Employee terminated Employee’s employment for Good
Reason after, but before the second anniversary of, the occurrence of a Change
in Control, except that for purposes of implementing the foregoing, the date
on
which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement and after any such succession,
“Company” shall mean the Company as hereinbefore defined and any successor
and/or assigns as aforesaid which assumes and agrees to perform this Agreement
by operation of law, or otherwise.
20
12. Effect
of Agreement on Plans and Agreements Governing
Awards. Notwithstanding
anything to the contrary
contained in any plan or agreement governing an Award granted to Employee
prior
to, on or after the date of this Agreement, the respective meanings of “Cause”
and “disability” as used in any such plans or agreements shall have the meaning
ascribed to such terms by this Agreement for purposes of giving effect to
such
Awards on and after the date of this Agreement.
(a) Construction. This
Agreement shall be deemed drafted equally by both the parties. Its
language shall be construed as a whole and according to its fair
meaning. Any presumption or principle that the language is to be
construed against any party shall not apply. The headings
in this Agreement are only for convenience and are not intended to affect
construction or interpretation. Any references to paragraphs, subparagraphs,
sections, subsections or clauses are to those parts of this Agreement, unless
the context clearly indicates to the contrary. Also, unless the
context clearly indicates to the contrary, (i) the plural includes the singular
and the singular includes the plural; (ii) “and” and “or” are each used both
conjunctively and disjunctively; (iii) “any,” “all,” “each,” or “every” means
“any and all”, and “each and every”; (iv) “includes” and “including” are each
“without limitation”; (v) “herein,” “hereof,” “hereunder” and other similar
compounds of the word “here” refer to the entire Agreement and not to any
particular paragraph, subparagraph, section or subsection; and (vi) all pronouns
and any variations thereof shall be deemed to refer to the masculine, feminine,
neuter, singular or plural as the identity of the entities or persons referred
to may require.
(b) Notices. All
notices and other communications hereunder shall be in writing and shall
be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
if
to Employee:
|
if
to the Company:
|
Xxxxx
X. Xxxxxx
0000
Xxxx Xxxx Xxxxx
Xxxxx,
Xxxxx 00000
|
Odyssey
HealthCare, Inc.
000
Xxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Attn: General
Counsel
|
21
with
a copy to:
|
|
P.
Xxxxxxx Xxxxxxx
Xxxxxx
& Xxxxxx L.L.P.
3700
Xxxxxxxx Xxxx Center
0000
Xxxx Xxxxxx
Xxxxxx,
Xxxxx 00000
|
or
to such
other address as either party shall have furnished to the other in writing
in
accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) Severability. Except
as otherwise provided in Section 10(d), if any provision of this
Agreement is held to be illegal, invalid or unenforceable under present or
future laws effective during the term of this Agreement, such provision shall
be
fully severable; this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a portion
of
this Agreement; and the remaining provisions of this Agreement shall remain
in
full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this
Agreement. Furthermore, except as otherwise provided in
Section 10(d), in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
(d) Withholding. The
Company may withhold from any amounts payable under this Agreement such Federal,
state or local taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
(e) No
Waiver. Except
as expressly set forth in this Agreement, no waiver by either party at any
time
of any breach by the other party of, or compliance with, any condition or
provision of this Agreement to be performed by the other party shall be deemed
a
waiver of similar or dissimilar provisions or conditions at any
time.
(f) Equitable
and Other Relief. Employee
acknowledges that money damages would be both incalculable and an insufficient
remedy for a breach of Sections 8, 9 or 10 by Employee and
that any such breach would cause the Company irreparable
harm. Accordingly, the Company, in addition to any other remedies at
law or in equity it may have, shall be entitled, without the requirement
of
posting of bond or other security, to equitable relief, including injunctive
relief and specific performance, in connection with a breach of Sections
8, 9 or 10 by Employee. The parties agree that the
only circumstances in which disputes between them will not be subject
exclusively to arbitration pursuant to the provisions in Section 13(h)
are in connection with a breach of Sections 8, 9 or 10 by
Employee. If the Company files a pleading with a court seeking
immediate injunctive relief and this pleading is challenged by Employee and
injunctive relief sought is not awarded, the Company shall pay all of Employee’s
costs and attorneys’ fees. The parties consent to venue in Dallas
County, Texas and to the exclusive jurisdiction of competent state courts
or
federal courts in the state or district in Dallas County, Texas for all
litigation which may be brought, subject to the requirement for arbitration
in
Section 13(h), with respect to the terms of, and the transactions and
relationships contemplated by, this Agreement. The parties further
consent to the non-exclusive jurisdiction of any state court located within
a
district which encompasses assets of a party against which a judgment has
been
rendered for the enforcement of such judgment or award against the assets
of
such party.
22
(g) Entire
Agreement. The
provisions of this Agreement constitute the entire and complete understanding
and agreement between the parties with respect to the subject matter hereof,
and
supersede all prior and contemporaneous oral and written agreements,
representations and understandings of the parties, which are hereby
terminated. Employee and the Company acknowledge and represent that
there are no other promises, terms, conditions or representations (or written)
regarding any matter relevant hereto.
(h) Arbitration. Except
as otherwise provided in Section 13(f), in the event any claim, demand,
cause of action, dispute, controversy or other matter in question
(“Claim”) arises out of this Agreement (or its termination) or Employee’s
employment (or termination of employment) by the Company or its Subsidiaries,
then, upon the written request of Employee or the Company, such dispute or
controversy will be submitted to binding arbitration. Any arbitration
will be conducted in accordance with the Federal Arbitration Act (“FAA”)
and, to the extent an issue is not addressed by the FAA or the FAA does not
apply, with the then-current National Rules for the Resolution of Employment
Disputes of the American Arbitration Association (“AAA”) or other rules
of the AAA as applicable to the claims asserted. The results of
arbitration will be binding and conclusive on the parties hereto. All
parties agree that venue for arbitration will be in Dallas County,
Texas. If Employee is the prevailing party, then Employee will be
entitled to reimbursement by the Company for reasonable attorneys fees,
reasonable costs and other reasonable expenses pertaining to the
arbitration. All proceedings conducted pursuant to this Section
13(h) will be kept confidential by all parties. THE
ARBITRATORS SHALL HAVE NO AUTHORITY TO AWARD PUNITIVE DAMAGES UNDER ANY
CIRCUMSTANCES (WHETHER IT BE EXEMPLARY DAMAGES, TREBLE DAMAGES, OR ANY OTHER
PENALTY OR PUNITIVE TYPE OF DAMAGES). REGARDLESS OF WHETHER SUCH
DAMAGES MAY BE AVAILABLE UNDER TEXAS LAW, EMPLOYEE AND THE COMPANY EACH HEREBY
WAIVE THE RIGHT, IF ANY, TO RECOVER PUNITIVE DAMAGES IN CONNECTION WITH ANY
CLAIMS. EMPLOYEE AND THE COMPANY ACKNOWLEDGE THAT BY SIGNING THIS
AGREEMENT EMPLOYEE AND THE COMPANY ARE WAIVING ANY RIGHT THAT EMPLOYEE OR
THE
COMPANY MAY HAVE TO A JURY TRIAL OR, OTHER THAN AS EXPRESSLY PROVIDED BY
SECTION 13(f), A TRIAL BEFORE A JUDGE
IN CONNECTION WITH, OR RELATING TO, A CLAIM.
(i) Attorney
Fees. The
prevailing party in any dispute or controversy under or in connection with
this
Agreement shall be entitled to reimbursement from the non-prevailing party
for
all costs and reasonable legal fees incurred by such prevailing
party.
(j) Survival. Sections
1 and 4 through 13 of this Agreement shall survive the
termination of this Agreement.
(k) Governing
Law. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE
STATE OF TEXAS WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS OF TEXAS
OR
ANY OTHER JURISDICTION, AND, WHERE APPLICABLE, THE LAWS OF THE UNITED
STATES.
23
(l) Amendments. This
Agreement may not be amended or modified at any time except by a written
instrument approved by the Board and executed by the Company and
Employee.
(m) Employee
Acknowledgement. Employee
acknowledges that Employee has read and understands this Agreement, is fully
aware of its legal effect, has not acted in reliance upon any representatives
or
promises made by the Company other than those contained in writing herein,
and
has entered into this Agreement freely based on Employee’s own
judgment.
(n) Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall
be
an original, but all of which together shall constitute one and the same
instrument. Any counterpart of this Agreement that has attached to it
separate signature pages which together contain the signature of all parties
hereto shall for all purposes be deemed a fully executed
original. Facsimile signatures shall constitute original
signatures.
[SIGNATURE
PAGE FOLLOWS]
24
IN
WITNESS
WHEREOF, the parties have executed this Agreement effective as of the date
and
year first above written.
COMPANY:
|
||
ODYSSEY
HEALTHCARE, INC.
|
||
a
Delaware corporation
|
||
By: | ||
Xxxxxx
X. Xxxxxx, President and Chief
|
||
Executive
Officer
|
||
EMPLOYEE:
|
||
Xxxxx
X. Xxxxxx
|
EXHIBIT
A
THE
SHARES ISSUABLE PURSUANT TO THIS AGREEMENT ARE SUBJECT TO THE PROVISIONS
OF THE
COMPANY'S 2001 EQUITY-BASED COMPENSATION PLAN AND THIS AGREEMENT IS ENTERED
INTO
PURSUANT THERETO.
ODYSSEY
HEALTHCARE, INC.
2001
EQUITY-BASED COMPENSATION PLAN
MANAGEMENT
NONSTATUTORY
STOCK OPTION AGREEMENT
This
Agreement is made and entered into as of the Grant Date (as defined below)
by
and between Odyssey HealthCare, Inc., a Delaware corporation (the "Company")
and
Xxxxx X. Xxxxxx (the "Optionee"):
WHEREAS,
the Company in order to induce you to enter into and continue in service
to the
Company and to contribute to the success of the Company, agrees to grant
you an
option to acquire a priority interest in the Company through the purchase
of
shares of stock of the Company;
WHEREAS,
the Company adopted the Odyssey HealthCare, Inc. 2001 Equity-Based Compensation
Plan as it may be amended from time to time (the "Plan") under which the
Company
is authorized to grant stock options to certain employees and directors of
the
Company;
WHEREAS,
a
copy of the Plan has been furnished to you and shall be deemed a part of
this
common stock option agreement (the "Agreement") as if fully set forth herein;
and
WHEREAS,
you desire to accept the option created pursuant to the Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants set forth herein and
for
other valuable consideration hereinafter set forth, the parties agree as
follows:
1. The
Grant. Subject to the conditions set forth below, the Company
hereby grants to you, effective as of August ___, 2007 ("Grant Date"), as
a
matter of separate inducement and not in lieu of any salary or other
compensation for your services for the Company, the right and option to purchase
(the "Option"), in accordance with the terms and conditions set forth herein
and
in the Plan, an aggregate of 225,000 shares of the Company's Common Stock,
$.001
par value (the "Option Shares"), at the Exercise Price (as hereinafter
defined). As used herein, the term "Exercise Price" shall mean a
price equal to $______ per share, subject to the adjustments and limitations
set
forth herein and in the Plan. The Option granted hereunder is
intended to constitute an Option which is not designed pursuant to section
422
of the Internal Revenue Code of 1986, as amended; however, you should consult
with your tax advisor concerning the proper reporting of any federal, state
or
local tax liability that may arise as a result of the grant or exercise of
the
Option.
1
2. Exercise.
(a) For
purposes of this Agreement, the Option Shares shall be deemed "Nonvested
Shares"
unless and until they have become "Vested Shares." The Option shall
in all events terminate at the close of business on the tenth (10) anniversary
of the date of this Agreement. Subject to other terms and conditions
set forth herein, the Option may be exercised in cumulative installments
as
follows:
On
or After Each of the Following Vesting Dates
|
Cumulative
Percentage of Shares as to Which Option is
Exercisable
|
First
Anniversary of the Grant Date
|
25%
|
Second
Anniversary of the Grant Date
|
50%
|
Third
Anniversary of the Grant Date
|
75%
|
Fourth
Anniversary of the Grant Date
|
100%
|
Option
Shares shall constitute Vested Shares once they are exercisable.
(b) Subject
to the relevant provisions and limitations contained herein and in the Plan,
you
may exercise the Option to purchase all or a portion of the applicable number
of
Vested Shares at any time prior to the termination of the Option pursuant
to
this Option Agreement. In no event shall you be entitled to exercise
the Option for any Nonvested Shares or for a fraction of a Vested
Share.
(c) Notwithstanding
any other provision of this Agreement as of the business day immediately
preceding a Change in Control all Nonvested Shares shall become Vested
Shares.
(d) Any
exercise by you of the Option shall be in writing addressed to the Secretary
of
the Company at its principal place of business. Exercise of the
Option shall be made by delivery to the Company by you (or other person entitled
to exercise the Option as provided hereunder) of (i) an executed "Notice
of
Exercise of Common Stock Option and Record of Common Stock Transfer", in
the
form attached hereto as Exhibit A and incorporated herein by reference, and
(ii)
payment of the aggregate purchase price for shares purchased pursuant to
the
exercise.
(e) Payment
of the Exercise Price may be made, at your election, (i) in cash, by certified
or official bank check or by wire transfer of immediately available funds,
(ii)
by delivery to the Company of a number of shares of Stock having a fair market
value as of the date of exercise equal to the Exercise Price, or (iii) by
net
issue exercise, pursuant to which the Company will issue to you a number
of
Option Shares as to which the Option is exercised, less a number of shares
with
a fair market value as of the date of exercise, as determined in good faith
by
the Committee, equal to the Exercise Price.
2
(f) In
the event that you shall cease to be employed by the Company or any Subsidiary
or parent thereof for any reason other than Cause, the Option may only be
exercised within 90 days after the date on which you ceased to be so employed,
and only to the same extent that you were entitled to exercise the Option
on the
date on which you ceased to be so employed and had not previously done
so.
(g) In
the event that you shall cease to be employed by the Company or any Subsidiary
or parent thereof due to a Cause termination, no portion of the Option shall
continue to be exercisable as of your date of termination.
(h) If
you are on leave of absence for any reason, the Company may, in its sole
discretion, determine that you will be considered to still be in the employ
of
or providing services for the Company, provided that rights to the Option
Shares
will be limited to the extent to which those rights were earned or vested
when
the leave or absence began.
(i) The
terms and provisions of the employment agreement, if any, between you and
the
Company or any Subsidiary (the "Employment Agreement") that relate to or
affect
the Option are incorporated herein by reference. Notwithstanding the
foregoing provisions of this Section 2, in the event of any conflict or
inconsistency between the terms and conditions of this Section 2 and the
terms
and conditions of the Employment Agreement, the terms and conditions of the
Employment Agreement shall be controlling.
3. Transferability. The
Option, and any rights or interests therein will be transferable by you only
by
will or the laws of descent and distribution. However, in the
Committee's discretion the Option may be transferable or assignable if such
transfer complies with the rules promulgated in connection with a Form S-8
registration statement; provided, however, that a transfer which is only
allowed
subject to the Committee's approval may only be made to a Permitted Transferee
or subject to a domestic relations order entered or approved by a court of
competent jurisdiction.
4. Registration. From
time to time, the Board and appropriate officers of the Company shall and
are
authorized to take whatever actions are necessary to file required documents
with governmental authorities, stock exchanges, and other appropriate persons
to
make shares of Common Stock available for issuance pursuant to the exercise
of
Options and subsequent lapse of restrictions.
5. Withholding
Taxes. The Committee may, in its discretion, require you to pay
to the Company at the time of the exercise of an Option or thereafter, the
amount that the Committee deems necessary to satisfy the Company's current
or
future obligation to withhold federal, state or local income or other taxes
that
you incur by exercising an Option. In connection with such an event
requiring tax withholding, you may (a) direct the Company to withhold
from the shares of Common Stock to be issued to you the number of shares
necessary to satisfy the Company's obligation to withhold taxes, that
determination to be based on the shares' fair market value as of the date
of
exercise; (b) deliver to the Company sufficient shares of Common Stock
(based upon the fair market value as of the date of such delivery) to satisfy
the Company's tax withholding obligation, which tax withholding obligation
is
based on the shares' fair market value as of the date of exercise; or (c)
deliver sufficient cash to the Company to satisfy its tax withholding
obligations. If you elect to use a Common Stock withholding feature
you must make the election at the time and in the manner that the Committee
prescribes. The Committee may, at its sole option, deny your request
to satisfy withholding obligations through Common Stock instead of
cash. In the event the Committee subsequently determines that the
aggregate fair market value (as determined above) of any shares of Common
Stock
withheld or delivered as payment of any tax withholding obligation is
insufficient to discharge that tax withholding obligation, then you shall
pay to
the Company, immediately upon the Committee's request, the amount of that
deficiency in the form of payment requested by the Committee.
3
6. Adjustments. The
terms of the Option shall be subject to adjustment from time to time, in
accordance with the following provisions:
(a) If
at any time, or from time to time, the Company shall subdivide as a whole
(by
reclassification, by a Common Stock split, by the issuance of a distribution
on
Common Stock payable in Common Stock or otherwise) the number of shares of
Common Stock then outstanding into a greater number of shares of Common Stock,
then (i) the number of shares of Common Stock (or other kind of securities)
that
may be acquired under the Option shall be increased proportionately and (ii)
the
price (including exercise price) for each share of Common Stock (or other
kind
of shares or securities) subject to then outstanding Options shall be reduced
proportionately, without changing the aggregate purchase price or value as
to
which outstanding Options remain exercisable or subject to
restrictions.
(b) If
at any time, or from time to time, the Company shall consolidate as a whole
(by
reclassification, reverse Common Stock split or otherwise) the number of
shares
of Common Stock then outstanding into a lesser number of shares of Common
Stock,
(i) the number of shares of Common Stock (or other kind of shares or securities)
that may be acquired under the Option shall be decreased proportionately
and
(ii) the price (including exercise price) for each share of Common Stock
(or
other kind of shares or securities) subject to then outstanding Options shall
be
increased proportionately, without changing the aggregate purchase price
or
value as to which outstanding Options remain exercisable or subject to
restrictions.
(c) Whenever
the number of shares of Common Stock subject to the Option and the price
for
each share of Common Stock subject to the Option are required to be adjusted
as
provided in this Section 6, the Committee shall promptly prepare a notice
setting forth, in reasonable detail, the event requiring adjustment, the
amount
of the adjustment, the method by which such adjustment was calculated, and
the
change in price and the number of shares of Common Stock, other securities,
cash, or property purchasable and held by you pursuant to the exercise of
the
Option or subject to the Option after giving effect to the
adjustments. The Committee shall promptly give you such a
notice.
(d) Adjustments
under this Section 6 shall be made by the Committee, and its determination
as to
what adjustments shall be made and the extent thereof shall be final, binding,
and conclusive. No fractional interest shall be issued under the Plan
on account of any such adjustments.
7. Furnish
Information. You agree to furnish to the Company all information
requested by the Company to enable it to comply with any reporting or other
requirement imposed upon the Company by or under any applicable statute or
regulation.
4
8. Remedies. The
Company shall be entitled to recover from you reasonable attorneys' fees
incurred in connection with the enforcement of the terms and provisions of
this
Agreement whether by an action to enforce specific performance or for damages
for its breach or otherwise.
9. No
Liability for Good Faith Determinations. The Company and the
members of the Committee and the Board shall not be liable for any act, omission
or determination taken or made in good faith with respect to this Agreement
or
the Option granted hereunder.
10. Execution
of Receipts and Releases. Any payment of cash or any issuance or
transfer of shares of Common Stock or other property to you, or to your legal
representative, heir, legatee or distributee, in accordance with the provisions
hereof, shall, to the extent thereof, be in full satisfaction of all claims
of
such persons hereunder. The Company may require you or your legal
representative, heir, legatee or distributee, as a condition precedent to
such
payment or issuance, to execute a release and receipt therefore in such form
as
it shall determine.
11. No
Guarantee of Interests. The Board and the Company do not
guarantee the Common Stock of the Company from loss or
depreciation.
12. Company
Records. Records of the Company regarding your service and other
matters shall be conclusive for all purposes hereunder, unless determined
by the
Company to be incorrect.
13. Notice. All
notices required or permitted under this Agreement must be in writing and
personally delivered or sent by mail and shall be deemed to be delivered
on the
date on which it is actually received by the person to whom it is properly
addressed or if earlier the date it is deposited, postage paid in the United
States mail. A notice shall be effective when actually received by the
appropriate Company representative, in writing and in conformance with this
Agreement and the Plan.
14. Waiver
of Notice. Any person entitled to notice hereunder may, by
written form, waive such notice.
15. Information
Confidential. As partial consideration for the granting of this
Option, you agree that you will keep confidential all information and knowledge
that you have relating to the manner and amount of your participation in
the
Plan; provided, however, that such information may be disclosed as required
by
law and may be given in confidence to your spouse, tax and financial advisors,
or a financial institution to the extent that such information is necessary
to
obtain a loan.
16. Successors. This
Agreement shall be binding upon you, your legal representatives, heirs, legatees
and distributees, and upon the Company, its successors and assigns.
17. Headings. The
titles and headings of paragraphs are included for convenience of reference
only
and are not to be considered in construction of the provisions
hereof.
5
18. Governing
Law. All questions arising with respect to the provisions of this
Agreement shall be determined by application of the laws of the State of
Delaware except to the extent Delaware law is preempted by federal
law.
19. Word
Usage. Words used in the masculine shall apply to the feminine
where applicable, and wherever the context of this Agreement dictates, the
plural shall be read as the singular and the singular as the
plural.
20. No
Assignment. You may not assign this Agreement or any of your
rights under this Agreement without the Company's prior written consent,
and any
purported or attempted assignment without such prior written consent shall
be
void.
21. Arbitration. You
and the Company agree, upon written request of either you or the Company,
to the
resolution by binding arbitration of all claims, demands, causes of action,
disputes, controversies or other matters in question (“Claims”), whether or not
arising out of this Agreement or your employment (or its termination), whether
arising in contract, tort or otherwise and whether provided by statute, equity
or common law, that the Company may have against you or that you may have
against the Company or its parents, subsidiaries or affiliates, and each
of the
foregoing entities’ respective officers, directors, employees or agents in their
capacity as such or otherwise, if such Claim is not resolved by the mutual
written agreement between you and the Company, or otherwise, within 30 days
after notice of the dispute is first given. Claims covered by this
Section 21 include without limitation claims by you for breach of this
Agreement, wrongful termination, discrimination (based on age, race, sex,
disability, national origin, sexual orientation, religion or any other factor),
harassment and retaliation. Any arbitration shall be conducted in
accordance with the Federal Arbitration Act (“FAA”) and, to the extent an issue
is not addressed by the FAA, with the then-current National Rules for the
Resolution of Employment Disputes of the American Arbitration Association
(“AAA”) or such other rules of the AAA as are applicable to the claims
asserted. If a party refuses to honor its obligations under this
Section 21, the other party may compel arbitration in either federal or state
court. The arbitrators shall apply the substantive law of Delaware
(excluding choice-of-law principles that might call for the application of
some
other jurisdiction’s law) or federal law, or both as applicable to the claims
asserted. The arbitrators shall have exclusive authority to resolve
any dispute relating to the interpretation, applicability or enforceability
or
formation of this Agreement (including this Section 21), including any claim
that all or part of the Agreement is void or voidable and any claim that
an
issue is not subject to arbitration. The results of arbitration will
be binding and conclusive on the parties hereto. Any arbitrators’ award or
finding or any judgment or verdict thereon will be final and unappealable.
All
parties agree that venue for arbitration will be in Dallas, Texas, and that
any
arbitration commenced in any other venue will be transferred to Dallas, Texas,
upon the written request of any party to this Agreement. In the event that
an
arbitration is actually conducted pursuant to this Section 21, the party
in
whose favor the arbitrator renders the award shall be entitled to have and
recover from the other party all costs and expenses incurred, including
reasonable attorneys’ fees, reasonable costs and other reasonable expenses
pertaining to the arbitration and the enforcement thereof and such attorneys
fees, costs and other expenses shall become a part of any award, judgment
or
verdict. Any and all of the arbitrators’ orders, decisions and awards
may be enforceable in, and judgment upon any award rendered by the arbitrators
may be confirmed and entered by any federal or state court having
jurisdiction. All arbitrations will have three individuals acting as
arbitrators: one arbitrator will be selected by you, one arbitrator will
be
selected by the Company, and the two arbitrators so selected will select
a third
arbitrator; provided that (a) you or the Company shall use reasonably diligent
efforts to select its respective arbitrator within 60 days after a matter
is
submitted to arbitration and (b) the parties (including arbitrators) shall
not
be limited to selecting arbitrators from only the AAA’s lists of
arbitrators. Any arbitrator selected by a party will not be
affiliated, associated or related to the party selecting that arbitrator
in any
matter whatsoever. The arbitration hearing shall be conducted within
60 days after the selection of the arbitrators. All privileges under
state and federal law, including attorney-client, work product and party
communication privileges, shall be preserved and protected. The
decision of the majority of the arbitrators will be binding on all
parties. Arbitrations will be conducted in a manner so that the final
decision of the arbitrators will be made and provided to you and the Company
no
later than 120 days after a matter is submitted to arbitration. All
proceedings conducted pursuant to this agreement to arbitrate, including
any
order, decision or award of the arbitrators, shall be kept confidential by
all
parties. YOU ACKNOWLEDGE THAT BY SIGNING THIS AGREEMENT, YOU
ARE WAIVING ANY RIGHT THAT YOU MAY HAVE TO A JURY TRIAL OR A COURT TRIAL,
OF ANY
EMPLOYMENT-RELATED CLAIM ALLEGED BY YOU.
6
22. Miscellaneous.
(a) This
Agreement is subject to all the terms, conditions, limitations and restrictions
contained in the Plan. In the event of any conflict or inconsistency
between the terms hereof and the terms of the Plan, the terms of the Plan
shall
be controlling.
(b) The
Option may be amended by the Board of the Company or by the Committee at
any
time (i) if the Board or the Committee determines, in its sole discretion,
that
amendment is necessary or advisable in light of any addition to or change
in any
federal or state, tax or securities law or other law or regulation, which
change
occurs after the Grant Date and by its terms applies to the Option; or (ii)
other than in the circumstances described in clause (i) or provided in the
Plan,
with your consent. The foregoing notwithstanding, the Committee may,
in its sole discretion, cancel the Option at any time prior to your exercise
of
the Option if, in the opinion of the Committee, you engage in activities
contrary to the interests of the Company.
(c) For
purposes of this Agreement, a Permitted Transferee refers to any child,
stepchild, grandchild, parent, step-parent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law including adoptive
relationships in each case with respect to you, any person sharing your
household (other than a tenant or employee of the Company), a trust in which
these persons have more than fifty percent of the beneficial interest, a
foundation in which these persons (or you) control the management of assets,
and
any other entity in which these persons (or you) own more than fifty percent
of
the voting interest.
(d) For
purposes of this Agreement “Cause” shall have the meaning set forth in that
certain Employment Agreement, dated as of August ___, 2007, by and between
the
Company and Employee.
7
Please
indicate your acceptance of all the terms and conditions of the award and
the
Plan by signing and returning a copy of this Agreement.
ODYSSEY
HEALTHCARE, INC.
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By:
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Name:
|
Xxxxxx
X. Xxxxxx
|
||
Title:
|
President
& CEO
|
||
ACCEPTED:
|
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|
|||
Signature
of Optionee
|
|||
Xxxxx
X. Xxxxxx
|
|||
Name
of Optionee (Please Print)
|
|||
Date: _________________,
____
|
|||
8
EXHIBIT
B
AGREEMENT
AND MUTUAL RELEASE
This
Agreement and Mutual Release (this “Agreement”), dated as of _____________,
20___, is entered into between Xxxxx X. Xxxxxx (“Employee”) and Odyssey
HealthCare, Inc., a Delaware corporation (the “Company”), pursuant to the terms
of that certain Employment Agreement, dated July 26, 2007 (the “Employment
Agreement”), by and between Employee and the Company. Pursuant to
Section 7(f) of the Employment Agreement, Employee agreed that in consideration
for receiving any of the severance benefits identified therein, that Employee
would execute and deliver this Agreement to the Company. Any
capitalized term used herein and not otherwise defined shall have the meaning
given such term in the Employment Agreement.
1. Definitions.
a. “Claims”
means any and all claims, complaints, charges, demands, liabilities, suits,
damages, losses, expenses, attorneys' fees, obligations or causes of
action.
b. “Company
Parties” means the Company and its predecessors, successors, assigns, parents,
Subsidiaries and affiliates and each of the foregoing entities' respective
past,
present and future shareholders, members, partners, managers, directors,
officers, employees, agents, representatives, principals, insurers, attorneys,
employee benefit programs (and the trustees, administrators, fiduciaries
and
insurers of such programs), and any Person acting by, through, under or in
concert with any of the foregoing entities).
c. “Employee
Parties” means Employee and his family, xxxxxxxxx, xxxxx, xxxxxx, agents,
executors, representatives, administrators and each of their respective
successors and assigns.
2. Employee’s
General Release and Covenant Not to Xxx.
a. Employee,
on behalf of himself and each of the other Employee Parties, hereby generally
releases and forever discharges the Company Parties from any and all Claims,
known or unknown, of any kind and every nature whatsoever, and whether or
not
accrued or matured, which any of them may have, arising out of or relating
to
any transaction, dealing, relationship, conduct, act or omission, or any
other
matters or things occurring or existing at any time prior to and including
the
date of termination of Employee’s employment with the Company (including but not
limited to any Claims against any of the Company Parties based on, relating
to
or arising under wrongful discharge, retaliation, breach of contract (whether
oral or written), tort, fraud, defamation, slander, breach of privacy, violation
of public policy, negligence, promissory estoppel, Title VII of the Civil
Rights
Act of 1964, The Age Discrimination in Employment Act, The Americans with
Disabilities Act, the Employee Retirement Income Security Act of 1974, or
any
other federal, state or local law relating to employment (or unemployment),
the
payment of wages, salary or other compensation, civil or human rights, or
discrimination in employment (based on age or any other factor)) in all cases
arising out of or relating to Employee's employment by the Company or any
Subsidiary thereof or Employee’s investment in the Company or any Subsidiary
thereof or his services as an officer or employee of the
Company or any Subsidiary thereof, or otherwise relating to the termination
of
such employment or services; provided, however, that this release will not
limit
or release (i) Employee's rights under this Agreement or Employee’s rights under
the Employment Agreement that survive the date of termination of Employee’s
employment with the Company, (ii) Employee's rights to indemnification from
any
Company Party in respect of his services as a director, officer or employee
of a
Company Party (or of any entity for which Employee has served in any such
capacity or a similar capacity at the request of the Company) as provided
by
law, any indemnification agreements to which Employee and any Company Party
are
parties, or the certificates of incorporation or bylaws (or like constitutive
documents) of any Company Party, (iii) subject to the terms of the Employment
Agreement, Employee's rights under any Investment Plan or any agreement entered
into to evidence rights granted pursuant to an Investment Plan, (iv) Employee’s
entitlement, if any, to continued medical and dental insurance coverage under
and pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985,
or
(v) any rights of Employee under any Welfare Plan.
b. Employee,
on behalf of himself and each of the other Employee Parties, hereby covenants
forever not to assert, file, prosecute, commence, institute (or sponsor or
purposely facilitate any person in connection with the foregoing), any complaint
or lawsuit or any legal, equitable, arbitral or administrative proceeding
of any
nature, against any of the Company Parties in connection with any released
Claims, and represents and warrants that no other person or entity has initiated
or, to the extent within his control, will initiate any such proceeding on
his
behalf, and that if such a proceeding is initiated, Employee shall accept
no
benefit therefrom.
3. Company’s
General Release and Covenant Not to Xxx.
a. The
Company, on its own behalf and on behalf of the other Company Parties, hereby
generally releases and forever discharges the Employee Parties from any and
all
Claims, known or unknown, of any kind and every nature whatsoever, and whether
or not accrued or matured, which any of them may have, arising out of or
relating to any transaction, dealing, relationship, conduct, act or omission,
or
any other matters or things occurring or existing at any time prior to and
including the date of termination of Employee’s employment with the Company
(including but not limited to any Claims based on, relating to or arising
under
breach of contract (whether oral or written), tort, fraud, defamation, slander,
violation of public policy, negligence, promissory estoppel, or any other
federal, state or local law relating to employment or discrimination in
employment) in all cases arising out of or relating to Employee's employment
by
the Company or any Subsidiary thereof or Employee’s investment in the Company or
any Subsidiary thereof or his services as a director, officer or employee
of any
Company Party (or of any entity for which Employee has served in any such
capacity or a similar capacity at the request of the Company), or otherwise
relating to the termination of such employment or services; provided, however,
that this release will not limit or release (i) the Company's rights under
this
Agreement or the Company’s rights under the Employment Agreement that survive
the date of termination of Employee’s employment with the Company, (ii) the
Company's rights against Employee with respect to any breach of fiduciary
or
other legal duties as a director or officer, any fraudulent or criminal activity
or any action or conduct that would constitute Cause under the Employment
Agreement (other than an action that would constitute Cause only under clause
(i) of the definition thereof), or (iii) the Company's rights under any
Investment Plan or any agreement entered into to evidence rights granted
pursuant to an Investment Plan.
b. The
Company, on behalf of itself and the other Company Parties, hereby covenants
forever not to assert, file, prosecute, commence, institute (or sponsor or
purposely facilitate any person in connection with the foregoing), any complaint
or lawsuit or any legal, equitable, arbitral or administrative proceeding
of any
nature, against any of the Employee Parties in connection with any released
Claims, and represents and warrants that no other person or entity has initiated
or to the extent within its control, will initiate any such proceeding on
its
behalf, and that if such a proceeding is initiated, the Company and the other
Company Parties shall accept no benefit therefrom.
2
4. Acknowledgments. Employee
acknowledges that, by entering into this Agreement, the Company does not
admit
to any wrongdoing in connection with Employee’s employment, and that this
Agreement is intended as a compromise of any Claims that any Employee Party
has
or may have against the Company Parties. Employee acknowledges that
he has read and understands this Agreement, is fully aware of its legal effect,
has not acted in reliance upon any representations or promises made by the
Company other than those contained in writing herein, and has entered into
this
Agreement freely based on Employee’s own judgment. Employee has been
advised by the Company to consult with an attorney of Employee’s choosing before
signing this Agreement. Employee understands that he has 21 days to
consider this Agreement, which Employee agrees is a reasonable amount of
time. In addition, Employee understands that he may revoke this
Agreement within 7 days after Employee has signed it by written notice to
the
Company given in accordance with Section 13(b) of the Employment
Agreement. This Agreement shall not become effective or enforceable
until the 7-day revocation period has expired without Employee’s
revocation. Employee acknowledges that if Employee accepts any of the
severance benefits identified in the Employment Agreement after the expiration
of the 7-day period, such acceptance shall constitute an acknowledgment by
Employee that Employee did not revoke this Agreement during the 7-day
period.
5. Resignation. Employee
hereby resigns from his positions as a director of the Company and each of
its
direct and indirect subsidiaries, effective as of the date of termination
of
Employee’s employment with the Company.
6. Injunctive
Relief. The parties hereto acknowledges that money damages would
be both incalculable and an insufficient remedy for a breach of this Agreement
by either party hereto and that any such breach would cause the nonbreaching
party irreparable harm. Accordingly, each party hereto, in addition
to any other remedies at law or in equity it may have, shall be entitled,
without the requirement of posting of bond or other security, to equitable
relief, including injunctive relief and specific performance, in connection
with
a breach of this Agreement by the other party. If either party hereto
files a pleading with a court seeking immediate injunctive relief and this
pleading is challenged by the other party and the injunctive relief sought
is
not awarded, the party seeking injunctive relief shall pay all of the costs
and
attorneys’ fees of the other party.
7. Severability. If
any provision of this Agreement is held to be illegal, invalid or unenforceable
under present or future laws, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a portion of this Agreement;
and the
remaining provisions of this Agreement shall remain in full force and effect
and
shall not be affected by the illegal, invalid or unenforceable provision
or by
its severance from this Agreement. Furthermore, in lieu of such
illegal, invalid or unenforceable provision there shall be added automatically
as part of this Agreement a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and be legal, valid
and
enforceable.
3
8. Attorney’s
Fees. Employee agrees to pay the reasonable attorney’s fees,
costs and any damages any Company Party may incur as a result of Employee
breaching a promise Employee made in this Agreement (such as by suing a Company
Party over a released Claim) or if any representation Employee made in this
Agreement is false. The Company agrees to pay the reasonable
attorney’s fees, costs and any damages any Employee Party may incur as a result
of the Company breaching a promise the Company made in this Agreement (such
as
by suing an Employee Party over a released Claim) or if any representation
the
Company made in this Agreement is false.
9. Counterparts. This
Agreement may be executed in any number of counterparts, each of which will
be
an original, but all of which together shall constitute one and the same
instrument. Any counterpart of this Agreement that has attached to it
separate signature pages which together contain the signature of all parties
hereto shall for all purposes be deemed a fully executed
original. Facsimile signatures shall constitute original
signatures.
10. Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE TO PRINCIPLES
OF CONFLICT OF LAWS OF TEXAS OR ANY OTHER JURISDICTION, AND, WHERE APPLICABLE,
THE LAWS OF THE UNITED STATES.
IN
WITNESS
WHEREOF, the parties have executed this Agreement effective as of the date
and
year first above written.
|
|
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Xxxxx
X. Xxxxxx
|
Date
|
|
|
|
|
For
Odyssey HealthCare, Inc.
|
Date
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4