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Exhibit 10.11
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Employment Agreement") is dated as of the
1st day of August, 2000, between RES-CARE, INC., a Kentucky corporation (the
"Company"), and XXXXXXX X. XXXXX (the "Employee").
RECITALS:
WHEREAS, the Company and the Employee entered into an Employment
Agreement dated October 9, 1997, as amended by that certain letter agreement
dated October 1, 1998 (collectively, the "Prior Agreement");
WHEREAS, the initial term of the Prior Agreement is scheduled to expire
September 30, 2000;
WHEREAS, since October 1, 1997, the Employee has served as the
President of Res-Care's Job Corps Operations;
WHEREAS, the Company is committed to continuing its full support of its
Job Corps Operations to maintain its leadership position within the Job Corps
community and superiority in quality of operational and financial performance,
and is committed to initiating processes to achieve this goal with full
compliance with Department of Labor regulations and the Company's policies and
procedures;
WHEREAS, the Company is further committed to expand the scope of its
services to other special needs youth through its Division of Youth Services to
strengthen its leadership position and superiority in quality of operational and
financial performance, and is committed to initiating processes to achieve this
goal in full compliance with all governmental regulations and the Company's
policies and procedures;
WHEREAS, the Company and the Employee desire that Employee's employment
with the Company continue with certain modifications in the compensation of the
Employee and certain contemplated changes in the duties and responsibilities of
Employee; and
WHEREAS, the Company and Employee desire to supersede the Prior
Agreement, effective August 1, 2000, by executing this Employment Agreement and
agreeing to be bound by the terms thereof.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as follows:
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1. EMPLOYMENT AND TERM; ANNOUNCEMENT. The Company hereby employs the
Employee, and the Employee accepts such employment, upon the terms and
conditions herein set forth for an initial term commencing on August 1, 2000,
and ending on July 31, 2003, subject to earlier termination only in accordance
with the express provisions of this Employment Agreement ("Initial Term"). This
Employment Agreement shall be automatically extended on a year-to-year basis
(August 1 through July 31 of each successive year), unless sooner terminated in
accordance with the express provisions of this Employment Agreement ("Additional
Terms"), upon the expiration of the Initial Term or any Additional Term, unless
prior to the commencement of a one hundred eighty (180) day period expiring at
the end of such Initial Term or any Additional Term, the Company or the Employee
shall have given written notice to the other stating that the term of this
Employment Agreement shall not be extended. For purposes of this Employment
Agreement, the term "Term" shall mean the Initial Term plus all Additional
Terms. The Company will publicly announce the execution of this Employment
Agreement in an appropriate forum at a time mutually agreed to by the parties
hereto but in no event later than thirty (30) days after the execution hereof.
2. DUTIES.
(a) EMPLOYMENT AS PRESIDENT OF THE DIVISION FOR YOUTH
SERVICES. The Employee shall serve as the President of the Division for
Youth Services of the Company. The Employee shall, subject to the
supervision and control of the President, perform such duties and
exercise such powers over and with regard to the management of the
Company's Division for Youth Services as may be prescribed from time to
time by the President, including, without limitation, serving as a
member of the ResCare Resource Center Leadership Team and serving as an
officer or director of one or more subsidiaries or affiliates of the
Company, if elected to such positions, without any further salary or
other compensation. The Company's Division for Youth Services currently
includes the Company's Job Corps Operations, the Company's wholly owned
subsidiary Youthtrack, Inc. and the Company's Alternative Youth
Services Operations.
(b) TIME AND EFFORT. The Employee shall devote all of his
business time, energies and talents exclusively to the business of the
Company and to no other business during the Term of this Employment
Agreement; provided, however, that subject to the restrictions in
Section 7 hereof, the Employee may (i) invest his personal assets in
such form or manner as will not require his services in the operation
of the affairs of the entities in which such investments are made and
(ii) subject to satisfactory performance of the duties described in
Section 2(a) hereof, devote such time as may be reasonably required for
him to continue to maintain his current level of participation in
various civic and charitable activities. The Employee's principal
office shall not be relocated outside the metropolitan Washington D.C.
area without the prior written consent of the parties hereto.
3. COMPENSATION.
(a) BASE SALARY. The Company shall pay to the Employee during
the Term a fixed, annual salary (the "Base Salary"), which initially
shall be $250,000. The Base
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Salary shall be due and payable in substantially equal bi-weekly
installments or in such other installments as may be necessary to
comport with the Company's normal pay periods for all employees.
Provided that this Employment Agreement or Employee's
employment hereunder shall not have been terminated for any reason, the
Base Salary shall be increased, effective as of the first day of each
year of the Term, commencing on August 1, 2001, by the greater of (x)
five percent (5%) or (y) the percentage by which the Consumer Price
Index for all Urban Consumers (CPI-U) for Washington-Baltimore All
Items, 1982-1984=100, as published by the Bureau of Labor Statistics
(the "CPI") established for the month of July immediately preceding the
date on which the adjustment is to be made exceeds the CPI published
for the month of July of the preceding year. If the Bureau of Labor
Statistics suspends or terminates its publication of the CPI, the
parties agree that a reasonably comparable price index shall be
substituted for the CPI.
(b) RETENTION BONUS. In April 2000, the Company advanced the
sum of $45,000 to Employee. Not later than December 15, 2000, the
Company will treat such advance, plus the sum of $15,000 (the
"Additional Amount"), as a retention bonus to the Employee. The
Additional Amount shall be withheld by the Company and utilized by it
and paid over to federal, state and local taxing authorities for the
account of Employee to satisfy the Company's withholding obligations
with respect to such retention bonus in accordance with applicable law.
(c) REGULAR ANNUAL BONUS.
(i) The Employee's regular annual bonus shall be
determined on a fiscal year basis for the period ending each
June 30 of the Term. The bonus calculated as provided in this
paragraph (c) shall be payable on or before August 1 of each
year during the Term for the preceding year. The Company's
Board of Directors may determine that any award under this
paragraph (c) shall be payable in cash, or by agreement of
Employee and the Company, in Company stock, options for
Company stock, or other property. The Employee's bonus as
determined under this paragraph (c) shall be hereinafter
referred to as the "Regular Annual Bonus." The scale of
performance in each case as set forth below shall include
financial measures as agreed to by the parties based on a June
30, 2000 actual (not budgeted) baseline, which baseline shall
be rebased annually, and compliance measures as agreed to by
the parties on the basis of OMS and QMS outcome measures.
(ii) Commencing July 1, 2000, the Employee's Regular
Annual Bonus shall be the sum of two (2) components. The first
component shall be attributable to the performance of the
Company's Job Corps Operations, which component shall be equal
to two-thirds (2/3) of the Employee's then applicable Base
Salary multiplied by a percentage which is a minimum of twenty
percent (20%) and a maximum of thirty-five percent (35%) (with
the actual percentage to be determined within such range based
upon a scale of performance mutually agreed
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to by the President and the Employee on an annual basis). The
second component shall be attributable to the performance of
the operations of Youthtrack, Inc., the Alternative Youth
Services Operations and any other operations of the Company's
Division for Youth Services (other than the Company's Job
Corps Operations) (hereinafter, the "Other Youth Services
Operations"), which component shall be equal to one-third
(1/3) of the Employee's then applicable Base Salary multiplied
by a percentage (the "Other Percentage") determined in the
following manner:
(A) The Other Percentage shall be zero if
the performance of the Other Youth Services
Operations shall not equal or exceed ninety percent
(90%) of their mutually agreed financial and
compliance targets for the period the bonus is
determined.
(B) The Other Percentage shall be twenty
percent (20%) if the performance of the Other Youth
Services Operations shall equal or exceed ninety
percent (90%) but be less than one hundred percent
(100%) of their mutually agreed financial and
compliance targets for the period the bonus is
determined.
(C) The Other Percentage shall be twenty
five percent (25%) if the performance of the Other
Youth Services Operations shall equal or exceed one
hundred percent (100%) but be less than one hundred
ten percent (110%) of their mutually agreed financial
and compliance targets for the period the bonus is
determined.
(D) The Other Percentage shall be
thirty-five percent (35%) if the performance of the
Other Youth Services Operations shall equal or exceed
one hundred ten percent (110%) of their mutually
agreed financial and compliance targets for the
period the bonus is determined.
The financial targets for the Other Youth Services Operations
shall be based upon the aggregate facility contribution of the
Other Youth Services Operations and shall be mutually agreed
to by the Employee and the President on an annual basis, not
to exceed 110% of the actual (not budgeted) aggregate facility
contribution of the Youth Services Operations for the prior
twelve (12) month period. The compliance targets for the Other
Youth Services Operations shall be as agreed to by the parties
on the basis of applicable governmental requirements. As set
forth in this subparagraph (ii), the relative weighting of the
components of the Regular Annual Bonus between the Job Corps
Operations and the Other Youth Services Operation shall be
initially two-thirds (2/3) and one-third (1/3), respectively,
which corresponds to such operations' relative facility
contribution as budgeted by the Company for the calendar year
2000. Commencing for the twelve (12) month period ending June
30, 2002, the relative weighting of such components for each
twelve (12) month period for which the Regular Annual Bonus is
determined shall be adjusted to reflect such operations'
relative facility
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contribution as budgeted by the Company for the calendar year
commencing on the first day of January immediately preceding
the commencement of such twelve (12) month period. If the
parties cannot agree on the performance figures on the basis
of which the bonus is to be calculated, the matter will be
resolved by decision of a disinterested third party jointly
selected by the parties.
(d) NEW JOB CORPS CONTRACT BONUS. In addition to the bonuses
determined as provided in paragraphs (b) and (c) of this Section 3, the
Employee shall be entitled to a bonus based upon the award of
additional Job Corps contracts to the Company (the "New Business
Bonus"). The New Business Bonus shall be equal to ten percent (10%) of
the first year base fee (as defined in the applicable new Job Corps
contract, such as the currently proposed Xxxx Job Corps contract)
payable to the Company on any new Job Corps contract awarded to the
Company by the Department of Labor during the Term (excluding current
operations and renewal and/or re-awards of existing Job Corps contracts
of the Company) (hereinafter a "New Job Corps Contract"). The New
Business Bonus shall be earned and payable in the following manner. The
New Business Bonus shall be earned on the date of commencement of the
New Job Corps Contract for which it is determined but shall not be
payable to Employee until the first anniversary of such date of
commencement, subject to the provisions of Section 5 hereof.
Notwithstanding the provisions of the preceding sentence, to the extent
that any New Business Bonus is earned by and payable to Employee and is
attributable to the award of a Job Corps contract to the Company for
the Xxxx Job Corps Center, located in San Marcos, Texas, such portion
of the New Business Bonus shall be paid fifty percent (50%) on the date
which is six (6) months after the date of commencement of such new
contract and fifty percent (50%) on the first anniversary of the date
of commencement of such new contract. The New Business Bonus payable
with respect to any New Job Corps Contract shall be reduced (but not
below zero) by ten percent (10%) of the annual base fee (as defined in
the applicable Job Corps contract which has been terminated or has
expired) previously payable to the Company on any existing or future
Job Corps contract awarded to the Company which Jobs Corps contract is
either terminated by the Department of Labor during the Term or has
expired during the Term and is not immediately renewed or re-awarded to
the Company by the Department of Labor. The reduction of the New
Business Bonus by reason of the immediately preceding sentence shall
apply only once for each Job Corps contract which is terminated or
expires without renewal and shall apply to any New Business Bonus
payable within one (1) year after the date of termination or expiration
thereof. An example of the calculation of the New Business Bonus is
attached hereto as Exhibit A.
(e) PARTICIPATION IN BENEFIT, INSURANCE, VACATION AND SICK
LEAVE PLANS. Employee shall be entitled to participate in the standard
Company benefit package which is to be implemented generally as
reflected in Company's employee guides currently in effect, as modified
by the Company from time to time, subject to usual and customary
waiting and/or vesting periods. Employee acknowledges that the Company
periodically modifies its standard employee benefit package and the
Company reserves the right to amend or modify in their entirety any of
the Company's fringe benefit programs. During each twelve (12) month
period of the Initial Term, Employee will be entitled to four (4)
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weeks of vacation. During each of the first two (2) Additional Terms
(if effective), Employee will be entitled to five (5) weeks of
vacation. During each of the remaining Additional Terms (if effective),
Employee will be entitled to six (6) weeks of vacation. All vacation
may be utilized as earned. Employee will accrue ten (10) days of sick
leave during each year of employment. The Company shall pay that
portion of the reasonable and customary costs of an annual executive
physical at the Mayo Clinic or other mutually agreeable medical
facility certified by the American Medical Association which is not
paid by the Employee's health insurance coverage (whether provided by
the Company or Employee's spouse's employer).
(f) PARTICIPATION IN STOCK OPTION PLAN. Employee shall be
entitled to participate in the Company stock option plan which is
applicable to its managerial employees. In addition, as an additional
inducement for the execution of this Employment Agreement by Employee,
effective August 1, 2000, the Company shall grant to Employee options
to purchase 50,000 shares of Company common stock. Provided Employee
shall continue to be employed hereunder, any stock options granted to
Employee pursuant to this paragraph (f) shall vest and be exercisable
twenty percent (20%) on the date of grant and twenty percent (20%) on
each anniversary of the grant thereof. Any stock options which shall
not be vested at the effective date of termination of Employee's
employment hereunder shall expire. Such options shall have an exercise
price based upon the closing sale price of Company common stock as
reported on the NASDAQ National Market on the respective date of grant.
(g) PARTICIPATION IN RETIREMENT AND PROFIT SHARING PLANS.
Employee shall be eligible to participate in any retirement and/or
profit sharing plans applicable to the Company's managerial employees,
as modified by the Company from time to time, subject to customary
waiting and vesting periods.
(h) AUTOMOBILE ALLOWANCE. Employee shall receive a monthly
automobile allowance equal to the maximum monthly automobile allowance
under the Federal Administrative Regulations for Job Corps.
(i) PAYMENT OF CERTAIN ATTORNEY'S FEES. Within thirty (30)
days after the receipt of an invoice therefor, the Company shall pay
one-half (1/2) of the attorney's fees of Employee which have been
incurred by him in connection with the negotiation of this Employment
Agreement, which obligation of the Company shall in no event exceed the
sum of $3,000.
(j) OUT-OF-POCKET EXPENSES. The Company shall promptly pay the
ordinary, necessary and reasonable expenses incurred by Employee in the
performance of Employee's duties hereunder (or if such expenses are
paid directly by Employee shall promptly reimburse him for such
payment), consistent with the reimbursement policies adopted by the
Company from time to time. Provided, however, such payment or
reimbursement shall be subject to prior written approval by the
President.
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(k) WITHHOLDING OF TAXES; INCOME TAX TREATMENT. If, upon the
payment of any compensation or benefit to the Employee under this
Employment Agreement (including, without limitation, in connection with
the exercise of any option), the Company determines in its discretion
that it is required to withhold or provide for the payment in any
manner of taxes, including but not limited to, federal income or social
security taxes, state income taxes or local income taxes, the Employee
agrees that the Company may satisfy such requirement by:
(i) withholding an amount necessary to satisfy such
withholding requirement from the Employee's compensation or
benefit; or
(ii) conditioning the payment or transfer of such
compensation or benefit upon the Employee's payment to the
Company of an amount sufficient to satisfy such withholding
requirement.
The Employee agrees that he will treat all of the amounts payable
pursuant to this Employment Agreement as compensation for income tax
purposes.
4. TERMINATION. The Employee's employment hereunder may be terminated
under this Employment Agreement as follows, subject to the Employee's rights
pursuant to Section 5 hereof:
(a) DEATH. The Employee's employment hereunder shall terminate
upon his death.
(b) DISABILITY. If, as a result of the Employee's incapacity
due to physical or mental illness, the Employee shall have been absent
from his duties hereunder on a full-time basis for 180 consecutive
calendar days, and within thirty (30) days after written Notice of
Termination is given (which may occur no earlier than thirty (30) days
before, but at any time after, the end of such 180-day period), the
Employee shall not have returned to the performance of his duties
hereunder on a full-time basis, the Company may terminate the
Employee's employment hereunder.
(c) CAUSE. The Company may terminate the Employee's employment
hereunder for Cause. For purposes of this Employment Agreement, the
Company shall have "Cause" to terminate the Employee's employment
because of the Employee's (i) personal dishonesty, (ii) intentional
misconduct, (iii) breach of fiduciary duty involving personal profit,
(iv) failure to perform his duties hereunder, (v) conviction of, or
plea of nolo contendere to, any felony, (vi) conviction of, or plea of
nolo contendere to any other law, rule or regulation which would
disqualify the Company for any contract or result in the termination of
any contract of the Company, or (vii) breach of any provision of this
Employment Agreement.
(d) WITHOUT CAUSE. By appropriate action of the President or
the Board of Directors of the Company, the Company shall have the right
to terminate the Employee's
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employment under this Employment Agreement at any time without Cause
(as defined in Subsection 4(c)).
(e) VOLUNTARY TERMINATION. By not less than thirty (30) days
prior written notice to the President, Employee may voluntarily
terminate his employment hereunder.
(f) NOTICE OF TERMINATION. Any termination during the term of
this Employment Agreement of the Employee's employment hereunder (other
than termination pursuant to Section 4(a) above) shall be communicated
by written Notice of Termination to the Employee hereto (except in the
case of termination as described in Section 4(e) above written Notice
of Termination shall be delivered by the Employee). For purposes of
this Employment Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this
Employment Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of the Employee's employment under the provision so
indicated.
(g) DATE OF TERMINATION. The "Date of Termination" shall, for
purposes of this Employment Agreement, mean: (i) if the Employee's
employment is terminated by his death, the date of his death; (ii) if
the Employee's employment is terminated on account of disability
pursuant to Section 4(b) above, thirty (30) days after Notice of
Termination is given (provided that the Employee shall not, during such
30-day period, have returned to the performance of his duties on a
full-time basis), (iii) if the Employee's employment is terminated by
the Company for Cause pursuant to Section 4(c) above, the date
specified in the Notice of Termination, (iv) if the Employee's
employment is terminated by the Company without Cause, pursuant to
Section 4(d) above, thirty (30) days after Notice of Termination is
given, (v) if the Employee's employment is terminated voluntarily
pursuant to Section 4(e) above, the date specified in the Notice of
Termination, and (vi) if the Employee's employment is terminated by
reason of an election by either party not to extend the Term, the last
day of the then effective Term.
5. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) DEATH. If the Employee's employment shall be terminated by
reason of his death, the Employee shall continue to receive his full
Base Salary until the date of his death, his Regular Annual Bonus,
prorated based upon the number of full months that have elapsed from
the immediately preceding July 1 until the date of his death (plus any
earned but unpaid Regular Annual Bonus for a prior period), and any
earned and payable New Business Bonus.
(b) DISABILITY. During any period that the Employee fails to
perform his duties hereunder as a result of incapacity due to physical
or mental illness, the Employee shall continue to receive his full Base
Salary until the Date of Termination, shall be entitled to receive his
Regular Annual Bonus, prorated based upon the number of full months
that have elapsed from the immediately preceding July 1 until the Date
of
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Termination (plus any earned but unpaid Regular Annual Bonus for a
prior period) and shall be entitled to receive any earned and payable
New Business Bonus. Upon termination due to death prior to a
termination as specified in the preceding sentence, Section 5(a) above
shall apply.
(c) CAUSE. If the Employee's employment shall be terminated
for Cause, the Company shall, through the Date of Termination, continue
to pay the Employee his full Base Salary but the Employee shall not be
entitled to receive his Regular Annual Bonus (other than any earned but
unpaid Regular Annual Bonus for a prior period) or any New Business
Bonus, and shall not be eligible for any severance payment of any
nature.
(d) WITHOUT CAUSE. If the Employee's employment shall be
terminated without Cause, and such Notice of Termination shall have
been given within one (1) year after a Change of Control (as defined
below) shall be applicable to the Company, the Employee shall continue
to receive his full Base Salary until the Date of Termination and for
fifteen (15) months after the Date of Termination. In all other cases
in which the Employee's employment shall be terminated without Cause,
the Employee shall continue to receive his full Base Salary until the
Date of Termination and for six (6) months after the Date of
Termination. In all cases in which Employee's employment shall be
terminated without Cause, the Employee shall also be entitled to
receive his Regular Annual Bonus, prorated based upon the number of
full months that have elapsed from the immediately preceding July 1
until the Date of Termination (plus any earned but unpaid Regular
Annual Bonus for a prior period) and shall be entitled to receive any
earned and payable New Business Bonus. A "Change of Control" shall be
applicable to the Company --
(i) if any person shall acquire more than fifty
percent (50%) of the common capital stock of the Company
through a tender offer, exchange offer or otherwise;
(ii) if the Company shall be a party to a binding
agreement to any merger, consolidation or reorganization in
which any person who on the date hereof does not own more than
ten percent (10%) of the issued and outstanding common capital
stock of the Company acquires, beneficially or of record, more
than fifty percent (50%) of such stock; or
(iii) there shall be a sale of all or substantially
all of the assets of the Company or a sale of all of the
Company's Job Corps Operations.
(e) EXPIRATION OF TERM. If the Employee's employment shall be
terminated by reason of expiration of the Term (irrespective of which
party elected not to extend the Term), the Company shall, through the
Date of Termination, continue to pay the Employee his full Base Salary
and the Company shall pay the Employee his Regular Annual Bonus,
prorated based upon the number of full months that have elapsed from
the immediately preceding July 1 until the Date of Termination and
shall pay any earned but unpaid New Business Bonus.
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(f) VOLUNTARY TERMINATION. If the Employee's employment shall
be terminated pursuant to Section 4(e) hereof, the Company shall,
through the Date of Termination, continue to pay the Employee his full
Base Salary but the Employee shall not be entitled to receive his
Regular Annual Bonus (other than any earned but unpaid Regular Annual
Bonus for a period), or any unpaid New Business Bonus, and shall not be
entitled to any severance payment of any nature.
(g) NO FURTHER OBLIGATIONS AFTER PAYMENT. After all payments,
if any, have been made to the Employee pursuant to any of paragraphs
(a) through (f) of this Section 5, the Company shall have no further
obligations to the Employee under this Employment Agreement other than
the provision of any employee benefits required to be continued under
applicable law.
6. DUTIES UPON TERMINATION. Upon the termination of Employee's
employment hereunder for any reason whatsoever (including but not limited to the
failure of the parties hereto to agree to the extension of this Employment
Agreement pursuant to Section 2 hereof), Employee shall promptly return to the
Company any Confidential Information (as defined in Section 7(d)(iii) hereof)
and whether or not constituting Confidential Information, any technical data,
performance information and reports, sales or marketing plans, documents or
other records, rolodexes, and any manuals, drawings, tape recordings, computer
programs, discs, and any other physical representations of any other information
relating to the Company, its subsidiaries or affiliates or to the Business (as
defined in Section 7(d)(iv) hereof) of the Company. Employee hereby acknowledges
that any and all of such documents, items, physical representations and
information area and shall remain at all times the exclusive property of the
Company.
7. RESTRICTIVE COVENANTS.
(a) ACKNOWLEDGMENTS. Employee acknowledges that (i) his
services hereunder are of a special, unique and extraordinary character
and that his position with the Company places him in a position of
confidence and trust with the operations of the Company, its
subsidiaries and affiliates (collectively, the "Res-Care Companies")
and allows him access to Confidential Information, (ii) the Company has
provided Employee with a unique opportunity as the President of the
Company's Division for Youth Services, (iii) the nature and periods of
the restrictions imposed by the covenants contained in this Section 7
are fair, reasonable and necessary to protect and preserve for the
Company the benefits of Employee's employment hereunder, (iv) the
Res-Care Companies would sustain great and irreparable loss and damage
if Employee were to breach any of such covenants, (v) the Res-Care
Companies conduct and are aggressively pursuing the conduct of their
business actively in and throughout the entire Territory (as defined in
paragraph (d)(ii) of this Section 7), and (vi) the Territory is
reasonably sized because the current Business of the Res-Care Companies
is conducted throughout such geographical area, the Res-Care Companies
are aggressively pursuing expansion and new operations throughout such
geographic area and the Res-Care Companies require the entire Territory
for profitable operations. The Company may, in its sole discretion,
waive
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any of the restrictions in this Section 7(a) or limit the scope of the
same; provided, however, no such waiver or limitation shall be
considered binding unless it is in writing.
(b) CONFIDENTIALITY COVENANT. Having acknowledged the
foregoing, Employee covenants that without limitation as to time, he
will not directly or indirectly disclose or use or otherwise exploit
for his own benefit, or the benefit of any other person, except as may
be necessary in the performance of his duties hereunder, any
Confidential Information.
(c) COVENANTS. Having acknowledged the statements in Section
7(a) hereof, Employee covenants and agrees with the Res-Care Companies
that he will not, directly or indirectly, from the date hereof until
the Date of Termination of Employee's employment hereunder, and for a
period of one (1) year thereafter, directly or indirectly (i) solicit,
divert or appropriate to himself or any other person, any business or
services (similar in nature to the Business) of any person who was an
employee or an agent of any of the Res-Care Companies at any time
during the last twelve (12) months of Employee's employment hereunder;
or (ii) own, manage, operate, join, control, assist, participate in or
be connected with, directly or indirectly, as an officer, director,
shareholder, partner, proprietor, employee, agent, consultant,
independent contractor or otherwise, any person which is, at the time,
directly or indirectly, engaged in the Business of the Res-Care
Companies within the Territory. Notwithstanding the foregoing, Employee
shall not be in breach of the covenants in clause (ii) of the preceding
sentence by reason of (x) Employee's service as an employee or
consultant, after the Date of Termination, for any governmental agency
or (y) Employee's employment with, consulting for or investment in,
after the Date of Termination, any person which is a small business
entity engaged in providing services to the federal government under
contracts on which Res-Care is not eligible to bid, and not otherwise
engaged in the Business.
(d) DEFINITIONS. For purposes of this Employment Agreement:
(i) For purposes of this Section 7, "termination of
Employee's employment" shall include any termination pursuant
to paragraphs (b), (c), (d) and (e) of Section 5 hereof, the
termination of such Employee's employment by reason of the
failure of the parties hereto to agree to the extension of
this Agreement pursuant to Section 2 hereof or the voluntary
termination of Employee's employment hereunder.
(ii) The "Territory" shall mean the fifty (50) states
of the United States, the United States Virgin Islands, Puerto
Rico and all of the Provinces of Canada.
(iii) "Confidential Information" shall mean any
business information relating to the Res-Care Companies or to
the Business (whether or not constituting a trade secret),
which has been or is treated by any of the Res-Care Companies
as proprietary and confidential and which is not generally
known or ascertainable through proper means. Without limiting
the generality of the
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foregoing, so long as such information is not generally known
or ascertainable by proper means and is treated by the
Res-Care Companies as proprietary and confidential,
Confidential Information shall include the following
information regarding any of the Res-Care Companies:
(1) any patent, patent application,
copyright, trademark, trade name,
service xxxx, service name,
"know-how" or trade secrets;
(2) customer lists and information
relating to (i) any client of any of
the Res-Care Companies or (ii) any
client of the operations of any
other person or entity for which
operations any of the Res-Care
Companies provides management
services;
(3) supplier lists, pricing policies,
consulting contracts and competitive
bid information;
(4) records, operational methods and
Company policies and procedures,
including manuals and forms;
(5) marketing data, plans and
strategies;
(6) business acquisition, development,
expansion or capital investment plan
or activities;
(7) software and any other confidential
technical programs;
(8) personnel information, employee
payroll and benefits data;
(9) accounts receivable and accounts
payable;
(10) other financial information,
including financial statements,
budgets, projections, earnings and
any unpublished financial
information; and
(11) correspondence and communications
with outside parties.
(iv) The "Business" of the Res-Care Companies shall
mean the business of providing juvenile treatment or services,
services to persons with mental retardation and other
developmental disabilities, including but not limited to
persons who have been dually diagnosed, services to persons
with acquired brain injuries, training services, or providing
management and/or consulting services to third parties
relating to the foregoing.
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(v) The term "person" shall mean an individual, a
partnership, an association, a corporation, a trust, an
unincorporated organization, or any other business entity or
enterprise.
(e) INJUNCTIVE RELIEF, INVALIDITY OF ANY PROVISION. Employee
acknowledges that his breach of any covenant contained in this Section
7 will result in irreparable injury to the Res-Care Companies and that
the remedy at law of such parties for such a breach will be inadequate.
Accordingly, Employee agrees and consents that each of the Res-Care
Companies in addition to all other remedies available to them at law
and in equity, shall be entitled to seek both preliminary and permanent
injunctions to prevent and/or halt a breach or threatened breach by
Employee of any covenant contained in this Section 7. If any provision
of this Section 7 is invalid in part or in whole, it shall be deemed to
have been amended, whether as to time, area covered, or otherwise, as
and to the extent required for its validity under applicable law and,
as so amended, shall be enforceable. The parties further agree to
execute all documents necessary to evidence such amendment.
8. ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Employment Agreement
constitutes the entire agreement between the parties pertaining to the subject
matter contained in it and supersedes all prior and contemporaneous agreements,
representations, and understandings of the parties, including but not limited to
the Prior Agreement. No supplement, modification, or amendment of this
Employment Agreement shall be binding unless executed in writing by all parties
hereto (other than as provided in the next to last sentence of Section 7(e)
hereof). No waiver of any of the provisions of this Employment Agreement will be
deemed, or will constitute, a waiver of any other provision, whether or not
similar, nor will any waiver constitute a continuing waiver. No waiver will be
binding unless executed in writing by the party making the waiver.
9. SUCCESSORS AND ASSIGNS; ASSIGNMENT. This Employment Agreement shall
be binding on, and inure to the benefit of, the parties hereto and their
respective heirs, executors, legal representatives, successors and assigns;
PROVIDED, HOWEVER, that this Employment Agreement is intended to be personal to
the Employee and the rights and obligations of the Employee hereunder may not be
assigned or transferred by him.
10. NOTICES. All notices, requests, demands and other communications
required or permitted to be given or made under this Employment Agreement, or
any other agreement executed in connection therewith, shall be in writing and
shall be deemed to have been given on the date of delivery personally or upon
deposit in the United States mail postage prepaid by registered or certified
mail, return receipt requested, to the appropriate party or parties at the
following addresses (or at such other address as shall hereafter be designated
by any party to the other parties by notice given in accordance with this
Section):
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TO THE COMPANY:
--------------
Res-Care, Inc.
00000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx,
Chairman, President and Chief Executive Officer
TO THE EMPLOYEE:
---------------
Xxxxxxx X. Xxxxx
0000 Xxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
11. EXECUTION IN COUNTERPARTS. This Employment Agreement may be
executed in multiple counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same document.
12. FURTHER ASSURANCES. The parties each hereby agree to execute and
deliver all of the agreements, documents and instruments required to be executed
and delivered by them in this Employment Agreement and to execute and deliver
such additional instruments and documents and to take such additional actions as
may reasonably be required from time to time in order to effectuate the
transactions contemplated by this Employment Agreement.
13. SEVERABILITY OF PROVISIONS. The invalidity or unenforceability of
any particular provision of this Employment Agreement shall not affect the other
provisions hereof and this Employment Agreement shall be construed in all
respects as if such invalid or unenforceable provisions were omitted.
14. GOVERNING LAW; JURISDICTION; VENUE. This Employment Agreement is
executed and delivered in, and shall be governed by, enforced and interpreted in
accordance with the laws of, the Commonwealth of Kentucky. The parties hereto
agree that the federal or state courts located in Kentucky shall have the
exclusive jurisdiction with regard to any litigation relating to this Employment
Agreement and that venue shall be proper only in Jefferson County, Kentucky, the
location of the principal office of the Company.
15. TENSE; CAPTIONS. In construing this Employment Agreement, whenever
appropriate, the singular tense shall also be deemed to mean the plural, and
vice versa, and the captions contained in this Employment Agreement shall be
ignored.
16. SURVIVAL. The provisions of Sections 5, 6 and 7 hereof shall
survive the termination, for any reason, of this Employment Agreement, in
accordance with their terms.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement on the day and year set forth above.
RES-CARE, INC.
By: --------------------------------
Xxxxxx X. Xxxxx
Chairman, President and Chief
Executive Officer
-------------------------------------
Xxxxxxx X. Xxxxx
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