EXHIBIT 10
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of March 11, 1997, by
and between HOUSECALL MEDICAL RESOURCES, INC., a Delaware
corporation (the "Company"), and XXXXXX X. XXXX (the "Employee").
W I T N E S S E T H:
WHEREAS the Company desires to induce the Employee to
enter into employment with the Company for the period provided in
this Agreement, and the Employee is willing to accept such
employment with the Company on a full-time basis, all in
accordance with the terms and conditions set forth below;
NOW, THEREFORE, for and in consideration of the
premises hereof and the mutual covenants contained herein, the
parties hereto hereby covenant and agree as follows:
1. EMPLOYMENT. (a) The Company hereby employs the
Employee, and the Employee hereby accepts such employment with
the Company, for the period set forth in Section 2 hereof, all
upon the terms and conditions hereinafter set forth.
(b) The Employee affirms and represents that he is
under no obligation to any former employer or other party which
is in any way inconsistent with, or which imposes any restriction
upon, the Employee's acceptance of employment hereunder with the
Company, the employment of the Employee by the Company, or the
Employee's undertakings under this Agreement.
2. TERM OF EMPLOYMENT. (a) Unless (i) earlier
terminated as provided in this Agreement or (ii) extended as
provided in Section 2(b) below, the term of the Employee's
employment under this Agreement shall be for a period beginning
on the date hereof and ending on March 11, 2000 (such period from
the date hereof until March 11, 2000 (or, if the Employee's
employment hereunder is earlier terminated or extended as
provided herein, such shorter or longer period, as the case may
be) being hereinafter called the "Employment Term").
(b) The Employment Term shall be extended
automatically on March 11, 2000 and on each March 11 thereafter
(each such date being referred to herein as an "Extension Date")
for an additional one-year period unless the Company or the
Employee gives notice to the other party hereto not less than
thirty (30) days prior to the Extension Date of its or his
election not to extend the Employment Term, in which event the
Employment Term shall terminate on such Extension Date.
(c) In the event that the Employee continues in the
full-time employ of the Company after the end of the Employment
Term (it being expressly understood and agreed that the Company
does not now, nor hereafter shall have, any obligation to
continue the Employee in its employ whether or not on a full-time
basis, after said Employment Term ends), then, unless otherwise
expressly agreed to by the Employee and the Company in writing,
the Employee's continued employment by the Company shall,
notwithstanding anything to the contrary expressed or implied
herein, be terminable by the Company at will, but shall in all
other respects be subject to the terms and conditions of this
Agreement.
3. DUTIES. The Employee shall be employed as
President and Chief Executive Officer of the Company, shall
faithfully and competently perform such duties as are specified
in the By-laws of the Company or such other duties in a senior
executive managerial position as the Board of Directors shall
from time to time determine and shall also perform and discharge
such other employment duties and responsibilities as the Board of
Directors of the Company may from time to time prescribe. The
Employee shall perform his duties at such places and times as the
Board of Directors of the Company may reasonably prescribe.
Except as may otherwise be approved in advance by the Board of
Directors of the Company, and except during vacation periods and
reasonable periods of absence due to sickness, personal injury or
other disability, the Employee shall devote his full time
throughout the Employment Term to the services required of him
hereunder. The Employee shall render his services exclusively to
the Company during the Employment Term and shall use his best
efforts, judgment and energy to improve and advance the business
and interests of the Company in a manner consistent with the
duties of his position.
4. SALARY AND BONUS. (a) SALARY. As compensation
for the complete and satisfactory performance by the Employee of
the services to be performed by the Employee hereunder during the
Employment Term, the Company shall pay the Employee a base salary
at the annual rate of not less than Two Hundred Thirty Thousand
Dollars ($230,000) (said amount, together with any adjustments or
increments thereto as may be determined from time to time by the
Board of Directors of the Company in its sole discretion, being
hereinafter referred to as "Salary"). Any Salary payable
hereunder shall be paid in regular intervals in accordance with
the Company's payroll practices from time to time in effect.
(B) BONUS. The Employee shall be eligible to receive
bonus compensation from the Company in respect of each fiscal
year (or portion thereof) occurring during the Employment Term in
an amount not to exceed (i) $25,000 for the fiscal year ending
June 30, 1997 and (ii) one-half of the Employee's Salary for each
such fiscal year thereafter. The actual amount of any such bonus
compensation shall be determined by the Board of Directors of the
Company in its sole discretion on the basis of performance-based
criteria to be established from time to time by the Board of
Directors in its sole discretion.
Nothing contained herein and no action taken in respect
of any bonus (or otherwise in respect of this Section 4(b)) shall
create or be construed to create a trust of any kind. The
Employee's right to receive any bonus pursuant to this Section
4(b) shall be no greater than the right of an unsecured general
creditor of the Company to receive payment from the Company. Any
bonus paid under this Section 4(b) shall be paid from the general
funds of the Company, and no special or separate fund shall be
established, and no segregation of assets shall be made, to
assure payment of any bonus hereunder.
(c) Withholding, Etc. The payment of any Salary and
bonus hereunder shall be subject to applicable withholding and
payroll taxes, and such other deductions as may be required under
the Company's employee benefit plans.
5. BENEFITS. During the Employment Term, the
Employee shall:
(a) be eligible to participate in employee fringe
benefits and pension and/or profit sharing plans that may be
provided by the Company for its key executive employees in
accordance with the provisions of any such plans, as the
same may be in effect from time to time;
(b) be eligible to participate in any medical and
health plans or other employee welfare benefit plans that
may be provided by the Company for its key executive
employees in accordance with the provisions of any such
plans, as the same may be in effect from time to time;
(c) be entitled to annual paid vacation in accordance
with the Company policy that may be applicable to key
executive employees from time to time;
(d) be entitled to sick leave, sick pay and disability
benefits in accordance with any Company policy that may be
applicable to key executive employees from time to time; and
(e) be entitled to reimbursement for all reasonable
and necessary out-of-pocket business expenses incurred by
the Employee in the performance of his duties hereunder in
accordance with the Company's policies applicable thereto.
6. INVENTIONS AND CONFIDENTIAL INFORMATION. The
Employee hereby covenants, agrees and acknowledges as follows:
(a) The Company is engaged in a continuous program of
research, design, development, production, marketing and
servicing with respect to its businesses and that as part of
the Employee's employment by the Company the Employee is (or
may be) expected to make new contributions and inventions of
value to the Company.
(b) The Employee's employment hereunder creates a
relationship of confidence and trust between the Employee
and the Company with respect to certain information
pertaining to the business of the Company and its Affiliates
(as hereinafter defined) or pertaining to the business of
any client or customer of the Company or its Affiliates
which may be made known to the Employee by the Company or
any of its Affiliates or by any client or customer of the
Company or any of its Affiliates or learned by the Employee
during the period of his employment by the Company.
(c) The Company possesses and will continue to possess
information that has been created, discovered or developed
by, or otherwise become known to it (including, without
limitation, information created, discovered or developed by,
or made known to, the Employee during the period of his
employment or arising out of his employment) or in which
property rights have been or may be assigned or otherwise
conveyed to the Company, which information has commercial
value in the business in which the Company is engaged and is
treated by the Company as confidential.
(d) Any and all inventions, products, discoveries,
improvements, processes, manufacturing, marketing and
service methods or techniques, formulae, designs, styles,
specifications, data bases, computer programs (whether in
source code or object code), know-how, strategies and data,
whether or not patentable or registrable under copyright or
similar statutes, made, developed or created by the Employee
(whether at the request or suggestion of the Company, any of
its Affiliates, or otherwise, whether alone or in
conjunction with others, and whether during regular hours of
work or otherwise) during the period of his employment by
the Company which may pertain to the business, products, or
processes of the Company or any of its Affiliates
(collectively, hereinafter referred to as "Inventions"),
will be promptly and fully disclosed by the Employee to an
appropriate executive officer of the Company (other than the
Employee) and shall be the Company's exclusive property, and
the Employee will promptly execute and/or deliver to an
appropriate executive officer of the Company (other than the
Employee) without any additional compensation therefor, all
papers, drawings, models, data, documents and other material
pertaining to or in any way relating to any Inventions made,
developed or created by him as aforesaid. For the purposes
of this Agreement, the term "Affiliate" or "Affiliates"
shall mean any corporation or other entity (i) which owns
the Company in whole or in part, or which controls the
Company directly or indirectly, whether through common
control or otherwise, (ii) which is owned by the Company in
whole or in part, or which is controlled, directly or
indirectly, by the Company or (iii) which is under the
common control, directly or indirectly, of the Company and
any person or entity; provided, however, that
notwithstanding anything to the contrary expressed or
implied in clauses (i) through (iii) above, the term
"Affiliate" shall not include Welsh, Carson, Xxxxxxxx &
Xxxxx VI, L.P. ("WCAS VI") or any corporation or other
entity which would be deemed to be an Affiliate pursuant to
clause (i), (ii) or (iii) above solely because such
corporation or other entity is an affiliate of WCAS VI.
(e) The Employee will keep confidential and will hold
for the Company's sole benefit any Invention which is to be
the exclusive property of the Company under this Section 6
for which no patent, copyright, trademark or other right or
protection is issued.
(f) The Employee also agrees that he will not without
the prior written consent of an appropriate executive
officer of the Company (other than the Employee) (i) use for
his benefit or disclose at any time during his employment by
the Company, or thereafter, except to the extent required by
the performance by him of his duties as an employee of the
Company, any information obtained or developed by him while
in the employ of the Company with respect to any Inventions
or with respect to any customers, clients, suppliers,
products, employees, financial affairs, or methods of
design, distribution, marketing, service, procurement or
manufacture of the Company or any of its Affiliates, or any
confidential matter, except information which at the time is
generally known to the public other than as a result of
disclosure by him not permitted hereunder, or (ii) take with
him upon leaving the employ of the Company any document or
paper relating to any of the foregoing or any physical
property of the Company or any of its Affiliates.
(g) The Employee acknowledges and agrees that a remedy
at law for any breach or threatened breach of the provisions
of this Section 6 would be inadequate and, therefore, agrees
that the Company and its Affiliates shall be entitled to
injunctive relief in addition to any other available rights
and remedies in case of any such breach or threatened
breach; provided, however, that nothing contained herein
shall be construed as prohibiting the Company or any of its
Affiliates from pursuing any other rights and remedies
available for any such breach or threatened breach.
(h) The Employee agrees that upon termination of his
employment by the Company for any reason, the Employee shall
forthwith return to the Company all documents and other
property in his possession belonging to the Company or any
of its Affiliates.
(i) Without limiting the generality of Section 10
hereof, the Employee hereby expressly agrees that the
foregoing provisions of this Section 6 shall be binding upon
the Employee's heirs, successors and legal representatives.
7. TERMINATION. (a) The Employee's employment
hereunder shall be terminated upon the occurrence of any of the
following:
(i) death of the Employee;
(ii) termination of the Employee's employment hereunder
by the Employee at any time for any reason whatsoever
(including, without limitation, resignation or retirement),
other than as a direct result of the matters described in
clause (iii) below;
(iii) termination of the Employee's employment hereunder
by the Employee as a result of (x) a breach by the Company
of a material provision of this Agreement if such breach
continues for thirty (30) days after the Employee shall have
given written notice of such breach to the Board of
Directors of the Company (which notice shall include a
description of the breach and a reference to this Section)
or (y) the relocation of the principal executive offices of
the Company to a location more than twenty miles outside of
the Atlanta, Georgia metropolitan region (or any requirement
by the Company that the Employee relocate his principal
residence to such a location);
(iv) termination of the Employee's employment hereunder
by the Company because of the Employee's inability to
perform his duties on account of disability or incapacity
for a period of one hundred eighty (180) or more days,
whether or not consecutive, occurring within any period of
twelve (12) consecutive months;
(v) termination of the Employee's employment hereunder
by the Company at any time "for cause," such termination to
take effect immediately upon written notice from the Company
to the Employee; and
(vi) termination of the Employee's employment hereunder
by the Company at any time, other than termination by reason
of disability or incapacity as contemplated by clause (iv)
above or termination by the Company "for cause" as
contemplated by clause (v) above.
The following actions, failures or events by or
affecting the Employee shall constitute "cause" for termination
within the meaning of clause (v) above: (1) conviction of having
committed a felony, (2) acts of dishonesty or moral turpitude
which are materially detrimental to the Company and/or its
Affiliates, (3) acts or omissions which the Employee knew or
should have reasonably known were likely to materially damage the
business of the Company and/or any Affiliate of the Company,
other than any such acts or omissions (x) reasonably believed by
the Employee to be necessary to avoid greater material damage to
the business of the Company and/or any such Affiliate and
(y) disclosed by the Employee to the Board of Directors of the
Company prior to or immediately following such act or omission,
(4) failure by the Employee to obey the reasonable and lawful
orders of the Board of Directors (provided that the Employee
shall have received written notice of such failure and shall not
have cured such failure within a reasonable period of time under
the circumstances (which period shall not exceed thirty days in
any event)), or (5) gross negligence by the Employee in the
performance of, or willful disregard by the Employee of, his
obligations hereunder.
(b) In the event that the Employee's employment is
terminated (x) by the Employee pursuant to Section 7(a)(iii)
above or (y) by the Company pursuant to Section 7(a)(vi) above,
the Company shall pay to the Employee, as severance pay or
liquidated damages or both, the amount of Salary, if any, which
the Employee would have otherwise been entitled to receive
pursuant to Section 4 hereof for the twelve-month period
following the date of termination (had the Employee's employment
not been so terminated) (such amount being referred to herein as
the "Severance Payments" and such period being herein referred to
as the "Severance Period"); provided, however, that the Severance
Payments payable pursuant to this Section 7(b) shall be reduced
by any amounts earned by the Employee as a result of his
employment by any business (whether as a director, officer,
employee, manager, owner, consultant, independent contractor,
advisor or otherwise) during the Severance Period.
(c) Notwithstanding anything to the contrary expressed
or implied herein, except as required by applicable law and
except as set forth in Section 7(b) above, the Company (and its
Affiliates) shall not be obligated to make any payments to the
Employee or on his behalf of whatever kind or nature by reason of
the Employee's cessation of employment (including, without
limitation, by reason of termination of the Employee's employment
by the Company for "cause"), other than (i) such amounts, if any,
of his Salary and bonus as shall have accrued and remained unpaid
as of the date of said cessation and (ii) such other amounts
which may be then otherwise payable to the Employee from the
Company's benefits plans or reimbursement policies, if any.
(d) No interest shall accrue on or be paid with
respect to any portion of any payments hereunder.
8. NON-ASSIGNABILITY. (a) Neither this Agreement
nor any right or interest hereunder shall be assignable by the
Employee, his beneficiaries, or legal representatives without the
Company's prior written consent provided, however, that nothing
in this Section 8(a) shall preclude the Employee from designating
a beneficiary to receive any benefit payable hereunder upon his
death or incapacity.
(b) Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge,
pledge, or hypothecation or to exclusion, attachment, levy or
similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action
shall be null, void and of no effect.
9. COMPETITION, ETC. During the Employee's
employment by the Company and during the one (1) year period
following the termination of the Employee's employment hereunder
for any reason whatsoever:
(a) the Employee will not make any statement or
perform any act intended to advance an interest of any
competitor of the Company or any of its Affiliates in any
way that will or may injure an interest of the Company or
any of its Affiliates in its relationship and dealings with
existing or potential customers or clients, or solicit or
encourage any other employee of the Company or any of its
Affiliates to do any act that is disloyal to the Company or
any of its Affiliates or inconsistent with the interest of
the Company or any of its Affiliate's interests or in
violation of any provision of this Agreement;
(b) the Employee will not discuss with any existing or
potential customers or clients of the Company or any of its
Affiliates the present or future availability of services or
products of a business, if the Employee has or expects to
acquire a proprietary interest in such business or is or
expects to be an employee, officer or director of such
business, where such services or products are competitive
with services or products which the Company or any of its
Affiliates provides;
(c) the Employee agrees that, when the Employee has or
expects to acquire a proprietary interest in, or is or
expects to be made an employee, officer or director of, any
existing or future business that provides services or
products in competition with the Company or any of its
Affiliates, the Employee will immediately furnish to the
Board of Directors of the Company all information that may
reasonably be of assistance to the Company in acting
promptly to protect its relationships with any existing or
potential customers or clients with whom the Employee has
had any dealings as a result of his employment by the
Company or any of its Affiliates;
(d) the Employee will not make any statement or do any
act intended to cause any existing or potential customers or
clients of the Company or any of its Affiliates to make use
of the services or purchase the products of any competitive
business in which the Employee has or expects to acquire a
proprietary interest or in which the Employee is or expects
to be made an employee, officer or director, if such
services or products in any way compete with the services or
products sold or provided by the Company or any of its
Affiliates to any existing customer or client;
(e) the Employee will not directly or indirectly (as a
director, officer, employee, manager, consultant,
independent contractor, advisor or otherwise) engage in
competition with, or own any interest in, perform any
services for, participate in or be connected with (i) any
business or organization which engages in competition with
the Company or any of its Affiliates in any geographical
area where any business is presently carried on by the
Company or any of its Affiliates, or (ii) any business or
organization which engages in competition with the Company
or any of its Affiliates in any geographical area where any
business shall be hereafter, during the period of the
Employee's employment by the Company, carried on by the
Company or any of its Affiliates, if such business is then
being carried on by the Company or any of its Affiliates in
such geographical area provided, however, that the
provisions of this Section 9(e) shall not be deemed to
prohibit the Employee's ownership of not more than five
percent (5%) of the total shares of all classes of stock
outstanding of any publicly held company; and
(f) the Employee will not directly or indirectly
solicit for employment any employee of the Company or any of
its Affiliates.
For purposes of this Section 9, a person or entity
(including, without limitation, the Employee) shall be deemed to
be a competitor of the Company or any of its Affiliates, or a
person or entity (including, without limitation, the Employee)
shall be deemed to be engaging in competition with the Company or
any of its Affiliates, only if such person or entity in any way
conducts, operates, carries out or engages in (i) the business of
providing private duty nursing, respiratory therapy, hospice,
infusion therapy and/or Medicare home health services in the
United States, (ii) the business of selling and/or leasing
durable medical equipment to home care patients, or (iii) such
other business or businesses as the Company may in the future
conduct in such geographical area or areas as such business or
businesses are conducted by the Company, provided, however, that
such other business or businesses described in this clause (iii)
shall include only such business or businesses that account for
not less than ten percent (10%) of the Company's total
consolidated gross revenues for (x) the most recent month or
(y) if Employee's employment hereunder shall have been
terminated, the month prior to the date of such termination.
In connection with the foregoing provisions of this
Section 9, the Employee represents that his experience,
capabilities and circumstances are such that such provisions will
not prevent him from earning a livelihood. The Employee further
agrees that the limitations set forth in this Section 9
(including, without limitation, any time or territorial
limitations) are reasonable and properly required for the
adequate protection of the businesses of the Company and its
Affiliates. It is understood and agreed that the covenants made
by the Employee in this Section 9
(and in Section 6 hereof) shall survive the expiration or
termination of this Agreement.
For purposes of this Section 9, proprietary interest in
a business is ownership, whether through direct or indirect stock
holdings or otherwise, of five percent (5%) or more of such
business. The Employee shall be deemed to expect to acquire a
proprietary interest in a business or to be made an officer or
director of such business if such possibility has been discussed
with any officer, director, employee, agent, or promoter of such
business.
The Employee acknowledges and agrees that a remedy at
law for any breach or threatened breach of the provisions of this
Section 9 would be inadequate and, therefore, agrees that the
Company and any of its Affiliates shall be entitled to injunctive
relief in addition to any other available rights and remedies in
cases of any such breach or threatened breach; provided, however,
that nothing contained herein shall be construed as prohibiting
the Company or any of its Affiliates from pursuing any other
rights and remedies available for any such breach or threatened
breach.
10. BINDING EFFECT. Without limiting or diminishing
the effect of Section 8 hereof, this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective heirs, successors, legal representatives and assigns.
11. NOTICES. Any notice required or permitted to be
given under this Agreement shall be sufficient if in writing and
either delivered in person or sent by first class certified or
registered mail, postage prepaid, if to the Company, at the
Company's principal place of business, and if to the Employee, at
his home address most recently filed with the Company, or to such
other address or addresses as either party shall have designated
in writing to the other party hereto.
12. LAW GOVERNING. This Agreement shall be governed
by and construed in accordance with the laws of the State of New
York.
13. SEVERABILITY. The Employee agrees that in the
event that any court of competent jurisdiction shall finally hold
that any provision of Section 6 or 9 hereof is void or
constitutes an unreasonable restriction against the Employee, the
provisions of such Section 6 or 9 shall not be rendered void but
shall apply with respect to such extent as such court may
judicially determine constitutes a reasonable restriction under
the circumstances. If any part of this Agreement other than
Section 6 or 9 is held by a court of competent jurisdiction to be
invalid, illegible or incapable of being enforced in whole or in
part by reason of any rule of law or public policy, such part
shall be deemed to be severed from the remainder of this
Agreement for the purpose only of the particular legal
proceedings in question and all other covenants and provisions of
this Agreement shall in every other respect continue in full
force and effect and no covenant or provision shall be deemed
dependent upon any other covenant or provision.
14. WAIVER. Failure to insist upon strict compliance
with any of the terms, covenants or conditions hereof shall not
be deemed a waiver of such term, covenant or condition, nor shall
any waiver or relinquishment of any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.
15. ENTIRE AGREEMENT; MODIFICATIONS. This Agreement,
together with any option agreement or agreements executed by the
parties hereto substantially concurrently herewith, constitute
the entire and final expression of the agreement of the parties
with respect to the subject matter hereof and supersede all prior
agreements, oral and written, between the parties hereto with
respect to the subject matter hereof. This Agreement may be
modified or amended only by an instrument in writing signed by
both parties hereto.
16. COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the Company and the Employee have
duly executed and delivered this Agreement as of the day and year
first above written.
HOUSECALL MEDICAL RESOURCES, INC.
By /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Chairman of the Board
/s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
