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Exhibit 10.79
EMPLOYMENT AGREEMENT
AGREEMENT dated as of December 31, 1997, between UNISON HEALTHCARE
CORPORATION, a Delaware corporation ("Unison"), and XXX X. XXXXXXXX
("Xxxxxxxx").
Unison wishes to employ Margalit and Margalit wishes to be employed by
Unison, in each case, pursuant to the terms and subject to the conditions
hereof.
Accordingly, the parties hereto hereby agree as follows:
1. Employment and Duties. Unison hereby employs Margalit as its Executive
Vice President, General Counsel and Secretary, and Margalit hereby accepts such
employment. In addition Unison shall, at the next regular or special meeting of
its Board of Directors (the "Board") held after the date hereof, cause Margalit
to be elected Executive Vice President, General Counsel and Secretary to fill
the vacancy created by the resignation of Xxxxx X. Xxxx. Xxxxxxxx, who shall
devote all his business time and attention to the business of Unison, shall have
general responsibility for the overall legal function of all of Unison.
2. Term. The term of this Agreement shall commence on the date hereof and
continue until February 15, 2001.
3. Compensation. (a) Base Salary. Unison shall pay Margalit a salary,
before deducting all applicable withholdings, at the annual rate of $170,000,
payable in accordance with Unison's standard executive payroll policies as in
effect from time to time. Unison shall consider increases in the annual rate of
such salary to be effective on February 15 of each year commencing February 15,
1999.
(b) Incentive Bonus. The Board's compensation committee shall design and
present to the Board for review, adjustment and adoption an incentive
compensation program for key employees. Such program will include cash and stock
option incentives and will provide for participation by Margalit. The program
shall, as it relates to cash compensation, provide that Margalit shall be
entitled to receive a cash bonus in respect of any fiscal year, commencing with
the fiscal year ending December 31, 1998, for which Unison achieves a net income
before income taxes of at least 90% of budgeted net income before taxes for such
fiscal year. Such bonus shall be in an amount, expressed as a percentage of
Margalit's then annual base salary, equal to:
If net income before income taxes:
50% Greater than 100% of budget
40% Equal to or Greater than 95% Less than or equal to 100% of budget
30% Equal to or Greater than 90% Less than 95% of budget
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Any such bonus shall be payable as soon as practicable following the end of the
fiscal year, but in no event earlier than the date that follows by 30 days the
filing of Unison's annual report on Form 10-K for such year.
(c) Stock Options. Margalit shall be granted as of the date hereof options
to acquire 105,000 shares of the Common Stock of Unison. Such options, which
shall be in addition to and not in lieu of any options as would otherwise be
granted to Margalit under any compensation program referred to in Section 3(b),
shall vest as follows:
52,500 shares February 15, 1999
26,250 shares February 15, 2000
26,250 shares February 15, 2001
or, if earlier, on the date of any Change of Control (as defined in Section
6(b)) occurring after the first year of the term hereof and shall otherwise be
subject to Unison's standard terms of grant; provided, however, that if such
Change of Control should occur after the first year of the term hereof but prior
to February 15, 2000, only 62,250 of such shares shall be deemed to have vested;
and provided further, however, that nothing in this Section 3 (c) shall be
deemed to extend the term of this Agreement as provided in Section 2.
4A. Expenses. (a) Reimbursable Expenses. Unison shall also, upon receipt
of customary documentation, reimburse Margalit for his reasonable travel and
lodging (outside the Scottsdale area) and other ordinary and necessary business
expenses consistent with Unison's expense reimbursement policies as in effect
from time to time.
4B. Benefits. Unison shall provide Margalit and his dependents with
health, medical and life insurance, and make payments for Margalit's account to
such retirement plan or plans as it may from time to time adopt, in each case,
in a manner consistent with its treatment from time to time of other senior
executive officers.
5. Vacation, Etc. Margalit shall be entitled to vacation with pay in
accordance with Unison's vacation policy as in effect from time to time and to
such paid holidays as Unison may approve for its executive personnel. Margalit
hereby waives, to the maximum extent permitted by applicable law, his right to
be paid at such time as his employment by Unison should terminate for unutilized
vacation or personal days.
6. Termination. The Board may terminate Margalit's employment hereunder
prior to the expiration of the term hereof in the manner provided in either
Section 6(a) or Section 6(b). Margalit may terminate his employment hereunder at
any time effective upon Unison's receipt of at least 30 days' advance notice to
such effect.
(a) For Cause. Unison may terminate this Agreement for cause upon notice
to Margalit stating the facts constituting such cause, provided that Margalit
shall have 30 days
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following such notice to cure any conduct or act, if curable, alleged to provide
grounds for termination for cause hereunder. Cause shall include material
neglect of duties, willful failure to abide by legal and ethical instructions or
policies from or set in good faith by the Board, commission of a felony or
serious misdemeanor offense or pleading guilty or nolo contendere to same, the
commission by Margalit of an act of dishonesty or moral turpitude involving
Unison, Margalit's breach of this Agreement in any material respect, the filing
of bankruptcy proceedings by or against Margalit or breach by Margalit of any
other material obligation to Unison.
(b) Without Cause. Unison may terminate this Agreement at any time
immediately, without cause, effective upon Margalit's receipt of notice to such
effect. Upon termination under this Section 6(b), Unison shall pay to Margalit:
(i) forthwith, the base salary due him through the date of termination, (ii) in
equal semimonthly installments over the following six or twelve months, as the
case may be, an amount equal to his then base salary for six months, if
termination occurs within the first year of the term hereof, or one year, if
termination occurs after the first year of the term hereof, and (iii) within 90
days following the end of the fiscal year in which termination occurs, a bonus
in an amount determined in the manner described in Section 3(b) (except, if
termination occurs prior to the end of a fiscal year, prorated for the period
during which Margalit was employed hereunder), in each case, less applicable
withholdings.
The provisions of this Section 6(b) shall also apply if Margalit's
employment with Unison is terminated, for any reason or for no reason, after a
Change in Control. The provisions of this Section 6(b) shall not apply, however,
if, absent a Change of Control, Margalit elects to terminate his employment
hereunder as contemplated by the second sentence of Section 6 or should die or
become disabled.
A Change of Control shall be deemed to have occurred if (i) a merger or
consolidation of Unison with any other corporation results in effective control
of Unison becoming vested in a corporation which is not under the control of
Unison's Board as constituted immediately prior to effectiveness of such merger
or consolidation, (ii) a complete or partial liquidation of Unison is completed
or (iii) all or substantially all of Unison's assets are sold or otherwise
disposed of and (iv) for purposes only of the provisions of Section 3(b) dealing
with accelerated vesting of stock options, Margalit is not offered continued
employment in a senior executive capacity with equivalent duties,
responsibilities and authority.
(c) Disability. If during the term of this Agreement, Margalit fails to
perform his duties hereunder because of illness or other incapacity for a period
of three consecutive months, Unison shall have the right to terminate this
Agreement without further obligation hereunder except for any bonus amount
payable in accordance with this Section 6(c) and any amounts payable pursuant to
disability plans generally applicable to executive employees. Within 90 days
after the end of the fiscal year in which termination pursuant to this Section
6(c) occurs, Margalit shall be entitled to receive a bonus payment as provided
in Section 6(b).
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(d) Death. If Margalit dies during the term of this Agreement, this
Agreement shall terminate immediately, and Margalit's legal representative shall
be entitled to receive the base salary due Margalit for 60 days following death
as well as any other death benefits generally applicable to executive employees.
In addition, within 90 days after the end of the fiscal year in which Margalit's
death should occur, Margalit's legal representative shall also be entitled to
receive a bonus payment as provided in Section 6(b).
7. Confidential Information; Non-Solicitation. (a) Confidential
Information. Margalit acknowledges that Margalit may receive, or contribute to
the production of, Confidential Information. For purposes of this Agreement,
Margalit agrees that "Confidential Information" shall mean information or
material proprietary to Unison or designated as confidential information by
Unison and not generally known by non-Unison personnel, which Margalit develops
or to which Margalit obtains knowledge or access to through or as a result of
Margalit's relationship with Unison (including information conceived,
originated, discovered or developed in whole or in part by Margalit).
Confidential Information includes, but is not limited to , the following types
of information and other information of a similar nature (whether or not reduced
to writing) related to Unison's business: discoveries, inventions, ideas,
concepts, research, development, processes, procedures, "know-how", formulae,
marketing techniques and materials, marketing and development plans, business
plans, customer names and other information related to customers, price lists,
pricing policies, methods of operation, financial information, employee
compensation, and computer programs and systems. Margalit acknowledges that the
Confidential Information derives independent economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use. Information publicly known without breach of this
Agreement that is generally employed by the trade at or after the time Margalit
first learns of such information, or generic information or knowledge which
Margalit would have learned in the course of his employment or work elsewhere in
the trade, shall not be deemed part of the Confidential Information. Margalit
further agrees:
(1) To furnish Unison on demand, at any time during or after employment, a
complete list of the names and addresses of all present, former and potential
suppliers, financing or leasing sources, patients, customers and other contacts
gained while an employee of Unison in Margalit's possession, whether or not in
the possession or within the knowledge of Unison.
(2) That all notes, memoranda, documentation and records in any way
incorporating or reflecting any Confidential Information shall belong
exclusively to Unison, and Margalit agrees to turn over all copies of such
materials in Margalit's control to Unison upon request or upon termination of
Margalit's employment with Unison.
(3) That while employed by Unison and thereafter Margalit will hold in
confidence and not directly or indirectly reveal, report, publish, disclose or
transfer any of the Confidential Information to any person or entity, or utilize
any of the Confidential Information for any purpose, except in the course of
Margalit's work for Unison.
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(4) That any idea in whole or in part conceived of or made by Margalit
during the term of his employment, consulting or similar relationship with
Unison which relates directly or indirectly to Unison's current or planned lines
of business and is made through the use of any of the Confidential Information
of Unison or any of Unison's equipment, facilities, trade secrets or time, or
which results from any work performed by Margalit for Unison, shall belong
exclusively to Unison and shall be deemed a part of the Confidential Information
for purposes of this Agreement. Margalit hereby assigns and agrees to assign to
Unison all rights in and to such Confidential Information whether for purposes
of obtaining patent or copyright protection or otherwise. Margalit shall
acknowledge and deliver to Unison (but at its expense) such written instruments
and do such other acts, including giving testimony in support of Margalit's
authorship or inventorship, as the case may be, necessary in the opinion of
Unison to obtain patents or copyrights or to otherwise protect or vest in Unison
the entire right and title in and to the Confidential Information.
(a) Non-Solicitation. During the term of Margalit's employment by Unison
and for a period of one year thereafter, Margalit agrees that he shall not (for
the purpose of or which results in competition with Unison or any of its
affiliates or subsidiaries) either solicit any past or existing customers,
patients or clients of Unison or any of its predecessors, affiliates or
subsidiaries or use any Confidential Information; nor will he solicit for any
purpose the employment of any employees of Unison or any of its affiliates or
subsidiaries.
(b) Injunctions. It is agreed that the restrictions contained in this
Section 7 are reasonable, but it is recognized that damages in the event of the
breach of any of the restrictions will be difficult or impossible to ascertain;
and, therefore, Margalit agrees that, in addition to and without limiting any
other right or remedy Unison may have, Unison shall have the right to an
injunction against Margalit issued by a court of competent jurisdiction
enjoining any such breach without showing or proving any actual damage to
Unison.
(c) Part of Consideration. Margalit also agrees, acknowledges, convenants,
represents and warrants that he is fully and completely aware, and further
understands, that the foregoing restrictive covenants are an essential part of
the consideration for Unison entering into this Agreement and that Unison is
entering into this Agreement in full reliance on these acknowledgments,
covenants, representations and warranties.
(d) Time and Territory Reduction. If the period of time and/or territory
affected by the provisions of this Section 7 are held to be in any respect an
unreasonable restriction, it is agreed that the court so holding may reduce the
territory to which the restriction pertains or the period of time in which it
operates or may reduce both such territory and such period, to the minimum
extent necessary to render such provision enforceable.
(e) Survival. The obligations described in this Section 7 shall survive
any termination of this Agreement or any termination of the employment
relationship created hereunder.
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8. Governing Law and Venue. Arizona law shall govern the construction and
enforcement of this Agreement, and the parties agree that any litigation
pertaining to this Agreement shall be in courts located in Maricopa County,
Arizona.
9. Construction. The language in all parts of this Agreement shall in all
cases be construed as a whole according to its fair meaning and not strictly for
or against any party. The section headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. All terms used in one number or gender shall
be construed to include any other number or gender as the context may require.
The parties agree that each party has reviewed this Agreement and has had the
opportunity to have counsel review the same and that any rule of construction to
the effect that ambiguities are to be resolved against the drafting party shall
not apply in the interpretation of this Agreement or any amendment hereto.
10. Nondelagability of Margalit's Rights and Unison's Assignment Rights.
The obligations, rights and benefits of Margalit hereunder are personal and may
not be delegated, assigned or transferred in any manner whatsoever, nor are such
obligations, rights or benefits subject to involuntary alienation, assignment or
transfer. This Agreement shall be assigned automatically to any entity merging
with or acquiring Unison or its business.
11. Severability. In the event any term or provision of this Agreement is
declared by a court of competent jurisdiction to be invalid or unenforceable for
any reason, this Agreement shall remain in full force and effect, and either (a)
the invalid or unenforceable provision shall be modified to the minimum extent
necessary to make it valid and enforceable or (b) if such a modification is not
possible, this Agreement shall be interpreted as if such invalid or
unenforceable provision were not a part hereof.
12. Attorneys' Fees. Except as otherwise provided herein, in the event
either party hereto institutes an action or other proceeding to enforce any
rights arising out of this Agreement, the party prevailing in such action or
other proceeding shall be paid all reasonable costs and attorneys' fees by the
non-prevailing party, such fees to be set by the court and not by a jury and to
be included in any judgment entered in such proceeding.
13. Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed duly given upon receipt if either personally
delivered, sent by certified mail, return receipt requested, or sent by a
nationally-recognized overnight courier service, addressed to the parties as
follows:
If to Unison: Unison HealthCare Corporation
0000 X. Xxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
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If to Margalit: Xxx X. Xxxxxxxx
Unison HealthCare Corporation
0000 X. Xxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
or to such other address as either party may provide to the other in accordance
with this Section.
14. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior or contemporaneous understandings or agreements in regard thereto. No
waiver of any rights under this Agreement shall be valid unless in writing and
signed by the party to be charged with such waiver. No waiver of any term or
condition contained in this Agreement shall be deemed or construed as a further
or continuing waiver of such term or condition unless the waiver specifically
provides otherwise.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
UNISON: MARGALIT:
UNISON HEALTHCARE CORPORATION ______________________________
Xxx X. Xxxxxxxx
By:_________________________________________
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
