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EXHIBIT 10.69
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of December 31,
1999, by and between AMERICAN HOMEPATIENT, INC., a Tennessee corporation
(collectively, with its parent, American HomePatient, Inc., a Delaware
corporation, the "Employer"), and XXXXXX X. XXXXX, a resident of the State of
Tennessee (the "Employee").
W I T N E S S E T H:
WHEREAS, Employer and Employee have agreed to enter into this Agreement
which sets forth certain of the terms and conditions of Employee's employment by
Employer; and
WHEREAS, Employer employed Employee beginning on November 26, 1998 to
serve as Executive Vice President, Chief Operating Officer of American
HomePatient, Inc., a Delaware corporation.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements made herein, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound hereby, agree as
follows:
1. EMPLOYMENT. Employer hereby employs Employee and Employee hereby
accepts employment with Employer on the terms and conditions specified herein.
2. TERM. The term of this Agreement shall be for a period commencing on
the date hereof and ending December 31, 2001; provided, however, that this
Agreement will thereafter automatically renew for consecutive one-year terms
unless either party notifies the other party in writing at least thirty (30)
days prior to the end of the then current term that this Agreement will
terminate at the expiration of such term. Notwithstanding anything to the
contrary contained in this Agreement, except the provisions of Section 8 which
supercede this provision, the provisions of Section 6 and 7 will survive the
expiration or termination of this Agreement.
3. DUTIES OF EMPLOYEE. Employee shall be responsible for certain
assigned aspects of Employer's operations and shall initially have the title
Executive Vice President, Chief Operating Officer of American HomePatient, Inc.,
a Delaware corporation. Employee shall perform the duties and responsibilities
assigned to Employee from time to time in accordance with the policies and
objectives established by the Board of Directors and Chief Executive Officer of
Employer. Employee agrees to devote his full time, attention and skill to his
duties hereunder and to use his best efforts to attain or exceed Employer's
objective goals for profit, quality, stability and growth. Employee will at all
times while employed by Employer comply fully with Employer's Code of Ethics
Policy ("Guidelines of Company Policies and Conduct"), Corporate Compliance Plan
and any other compliance programs of Employer, as such programs may be amended
from time to time, and acknowledges that his obligations under such programs as
an employee are contractual in nature.
4. COMPENSATION.
(a) Beginning January 1, 2000, Employee will be paid a base salary
of Two Hundred Twenty Thousand and No/100 Dollars ($220,000.00) per year for the
remainder of the term
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of this Agreement, payable in accordance with Employer's standard payroll
practices. Employee will be entitled to receive incentive of compensation of up
to thirty-five percent (35%) of his annual base salary under such incentive
programs as may from time to time be provided to employees of Employer of
similar rank, which programs may be created, changed or terminated at any time
at Employer's sole discretion. Employer will periodically conduct a merit review
regarding Employee's performance to consider increasing, but not decreasing,
Employee's base salary.
(b) Employee will receive a monthly automobile allowance of Six
Hundred and No/100 Dollars ($600.00), and Employer will reimburse Employee for
all gasoline and oil expenses incurred in the operation of his personal
automobile.
(c) Employee will be entitled to such medical, dental, disability
and life insurance benefits, participation in any profit-sharing plan or similar
plans of Employer, and such other employee benefits as are provided to employees
of Employer of similar rank from time to time. In addition, during the term of
this Agreement Employer will reimburse Employee the cost of his individual
disability insurance policy premium paid to Xxxx Xxxxxx Insurance Group.
5. TERMINATION.
(a) Employee's employment will be terminable by Employer at any time
for "cause", which will be defined as: (i) gross insubordination, gross
malfeasance, gross misconduct, (ii) charge or conviction of a felony or of a
misdemeanor involving moral turpitude, (iii) the inability of Employee to
perform his duties hereunder for a period of sixty (60) consecutive days (or
ninety (90) total days in any 120 consecutive day period) by reason of illness
or mental or physical disability, and (iv) death. Notwithstanding the above, it
is the intent of the Employer at all times to comply with the Americans With
Disabilities Act, the Family and Medical Leave Act and any other applicable
federal and state employment laws. This Agreement will be terminable by Employee
upon thirty (30) days written notice to Employer if without cause. In the case
of termination under this Section 5(a), all obligations of the parties under
this Agreement and relating to Employee's employment will cease except for
Employee's obligations under Sections 6 and 7 hereof.
(b) Employee's employment will be terminable by Employee upon
written notice to Employer if Employer willfully breaches any material terms of
this Agreement, after fifteen (15) day's written notice and right to cure.
Employee's employment will also be terminable by Employer at any time without
"cause", as such term is defined above in clause (a). In the case of termination
under this Section 5(b), all obligations of the parties in this Agreement will
cease except for Employee's obligations under Sections 6 and 7 (the continuation
of such obligations being subject to Section 8). If Employer terminates
Employee's employment without "cause", Employee will be entitled to receive (i)
his annual base salary (not including incentive compensation or benefits) plus
his annual automobile allowance, each as in effect at the time of termination,
plus (ii) the annual incentive compensation Employee received for performance
during Employer's immediately preceding fiscal year, multiplied by a fraction,
the numerator of which is the total number of full calendar months during which
Employee was employed by Employer during Employer's current fiscal year prior to
termination and the denominator of which is twelve (12). Employer will pay
Employee such severance in a lump sum promptly following termination. In
addition, Employer will (i) pay Employee promptly following termination any
earned but unpaid base salary through
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the date of termination, and (ii) pay the COBRA administrative services company
the standard employer portion of the COBRA premium attributable to Employee's
medical and dental insurance benefits as such benefits were in effect
immediately prior to termination with payments beginning on the first day of the
calendar month immediately following the date of termination and continuing
until the earlier of (y) twelve (12) months after the date of termination, or
(z) the date on which Employee is eligible to receive, as an employee,
independent contractor or agent, medical and/or dental insurance benefits from a
third party. Employer will deduct from the lump severance payment due to
Employee the standard employee portion of such COBRA premium as in effect on the
date of termination for a twelve (12) month period. If Employee elects to
discontinue COBRA for any reason before expiration of the applicable period and
notifies Employer of the same in writing, Employer will thereafter refund to
Employee that portion of the deduction, if any, not attributable to the COBRA
premium actually paid. Employer acknowledges that in the event Employer
terminates Employee's employment under this Section 5(b) without "cause",
Employee will be entitled to his individual vested account balance with respect
to Employer's Stock Purchase Plan as such balance, if any, exists as of the date
of termination of employment. Employee acknowledges that in the event Employer
terminates his employment without "cause", he will be entitled to no payments
other than as expressly set forth in this Section 5(b).
(c) (i) In the event there is a "Change in Control" of the ownership
of Employer, and Employer terminates Employee's employment within twelve (12)
months following such Change in Control, Employee will be entitled to receive as
a severance payment in a lump sum upon such termination an amount equal to the
sum of (i) his monthly base salary (not including incentive compensation or
benefits) as in effect at the time of such termination multiplied by twelve
(12), plus (ii) the annual incentive compensation Employee received for
performance during Employer's immediately preceding fiscal year, multiplied by a
fraction, the numerator of which is the total number of full calendar months
during which Employee was employed by Employer during Employer's current fiscal
year prior to termination and the denominator of which is twelve (12). In
addition, any earned but unpaid base salary and incentive compensation will be
paid, and Employer will pay the COBRA administrative services company the
standard employer portion of the COBRA premium attributable to Employee's
medical and dental insurance benefits as such benefits were in effect
immediately prior to termination with payments beginning on the first day of the
calendar month immediately following termination and continuing until the
earlier of (y) twelve (12) months after the date of termination, or (z) the date
on which Employee is eligible to receive, as an employee, independent contractor
or agent, medical and/or dental insurance benefits from a third party. Employer
will deduct from the severance payment due to Employee, in accordance with its
standard payroll practices, the standard employee portion of such COBRA premium
as in effect on the date of termination for up to a twelve (12) month period. If
Employee elects to discontinue COBRA for any reason before expiration of the
applicable period and notifies Employer of the same in writing, Employer will
thereafter refund to Employee that portion of the deduction, if any, not
attributable to the COBRA premium actually paid. Employer acknowledges that, in
the event of such termination following a Change in Control, Employee will be
entitled to his individual vested account balance with respect to Employer's
Stock Purchase Plans as such balance, if any, exists as of the date of
termination of employment. Further, any stock options granted to Employee will
be fully vested upon a Change of Control, whether or not Employee's employment
is terminated, notwithstanding any previously stated vesting restrictions but
subject to expiration or termination pursuant to the governing stock option
plan. Employee acknowledges that if the provisions of this
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clause (c) become operative, the payments and obligations of Employer hereunder
are in lieu of any obligation of Employer under Section 5(b), and such
obligations of Employer under Section 5(b) will be rendered null and void.
(ii) A "Change in Control" will be deemed to have occurred if
(i) a tender offer will be made and consummated for the ownership of
more than fifty percent (50%) of the outstanding voting securities of
Employer, (ii) Employer will be merged or consolidated with another
corporation and as a result of such merger or consolidation less than
fifty percent (50%) of the outstanding voting securities of the
surviving or resulting corporation will be owned in the aggregate by
the former shareholders of Employer, as the same will have existed
immediately prior to such merger or consolidation, (iii) Employer will
sell all or substantially all of its assets to another corporation that
is not a wholly-owned subsidiary, or (iv) a person, within the meaning
of Section 3(a)(9) or of Section 13 (d)(3) (as in effect on the date
hereof) of the Securities and Exchange Act of 1934 ("Exchange Act"),
will acquire more than fifty percent (50%) of the outstanding voting
securities of Employer (whether directly, indirectly, beneficially or
of record). For purposes hereof, ownership of voting securities shall
take into account and shall include ownership as determined by applying
the provisions of Rule 13d-3(d)(1)(i) (as in effect on the date hereof)
pursuant to the Exchange Act. For purposes hereof, a "Change in
Control" will not include any transaction of the type described above
with or undertaken by Counsel Corporation or its affiliates, within the
meaning of Exchange Act Rule 12b-2 (as in effect on the date hereof).
6. CONFIDENTIAL INFORMATION. In consideration of the covenants of
Employer contained herein, Employee agrees as follows:
(a) Employee hereby agrees and acknowledges that he has had access
to, will have access to, and is and will become aware of certain confidential,
restricted and/or proprietary information concerning operation by the Employer
and its affiliates of their home health care businesses (collectively the
"Business"). Employee hereby undertakes and agrees that he will have a duty to
Employer and its affiliates to protect such information from use or disclosure.
(b) For the purposes of this Section 6, the following definitions
will apply:
(i) "Trade Secret" as related to the Business, will mean any
specialized technical information or data relating to (w) procurement
of medical equipment and other inventory for resale; (x) marketing
strategy or plans of Employer or its affiliates; (y) proprietary
computer software; and (z) terms of contracts with suppliers, employees
and principal customers of Employer or its affiliates which are not
generally known to the competitors of Employer.
(ii) "Confidential Information," as related to the Business,
will mean any data or information, other than Trade Secrets, which is
material to Employer or its affiliates and not generally known by the
public. Confidential Information will include, without limitation, any
information pertaining to the Business Opportunities (as hereinafter
defined) of Employer or its affiliates, the details of this Agreement,
and the business plans, financial statements and projections of
Employer or its affiliates.
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(iii) "Business Opportunity" will mean any information or plans
of Employer or its affiliates concerning the purchase of or investment
in any retail outlets, stores, distribution centers or similar retail
facilities in the field of home health care, or the availability of any
such outlets for purchase or investment by Employer or its affiliates,
together with all related information, concerning the specifics of any
contemplated purchase or investment (including price, terms and the
identity of such outlet), regardless of whether Employer or its
affiliates have entered any agreement, made any commitment, or issued
any bid or offer to such outlet or other facility.
(c) Employee will not, without the prior written consent of
Employer, use or disclose, or negligently permit any unauthorized person who is
not an employee of Employer to use, disclose, or gain access to, any Trade
Secrets or Confidential Information.
(d) Employee hereby agrees to maintain on behalf of Employer, or,
upon request or termination of this Agreement, deliver to Employer, all
memoranda, notes, records, drawings, manuals, documents, disks, computer
software and other materials, including all copies and derivations of such
materials, containing Trade Secrets or Confidential Information, whether made or
compiled by Employee or furnished to him from any source by virtue of his
relationship with Employer or its affiliates.
(e) Employee will, with reasonable notice during and after his
employment by Employer, furnish information as may be in his possession and
cooperate with Employer or its affiliates as may reasonably be requested in
connection with any claims or legal actions in which Employer is or may become a
party. Employer will reimburse Employee for any reasonable out-of-pocket
expenses he incurs in order to satisfy his obligations under this clause (e).
7. NONCOMPETE, ETC. In consideration of the covenants of the Employer
contained herein, the Employee agrees as follows:
(a) During and after his employment by Employer, Employee will not
use his status with Employer to obtain loans, goods or services from another
organization on terms that would not be available to him in the absence of his
relationship to Employer. During the period of employment and for a twelve (12)
month period following termination of such employment for any reason, (i)
Employee will not make any statements or perform any acts intended to advance
the interest of any existing or prospective competitor of Employer in any way
that will injure the interests of Employer or an affiliate; and (ii) Employee
will not directly or indirectly own or hold any "Proprietary Interest" in or be
employed by or receive compensation from any party engaged in the same or any
similar business within fifty (50) miles of any location of Employer upon the
date of termination of employment. The states in which Employer and its
affiliates currently conduct business are Alabama, Arizona, Arkansas, Colorado,
Connecticut, Delaware, Florida, Georgia, Illinois, Iowa, Kansas, Kentucky,
Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi,
Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina,
Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee,
Texas, Virginia, Washington, West Virginia and Wisconsin. During his employment
by Employer and for a twelve (12) month period following termination of such
employment for any or no reason, (i) Employee will not solicit any client of
Employer or an affiliate or discuss with any client or
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employee of Employer or an affiliate any information or the operation of any
business intended to compete with Employer or an affiliate; and (ii) Employee
will not, directly or indirectly, hire any current or future employee of
Employer or an affiliate, or solicit or encourage any such employee to leave the
employ of Employer or an affiliate. For the purposes of this Agreement,
"Proprietary Interest" means legal or equitable ownership, whether through stock
holdings or otherwise, of a debt or equity interest (including options,
warrants, rights and convertible interests) in a business firm or entity, or
ownership of more than 5% of any class of equity interest in a publicly-held
company. Employee acknowledges that the covenants contained herein are
reasonable as to geographic and temporal scope.
(b) Employee acknowledges that his breach or threatened or attempted
breach of any provision of Section 6 or 7 would cause irreparable harm to
Employer not compensable in monetary damages and that Employer will be entitled,
in addition to all other applicable remedies, to a temporary and permanent
injunction and a decree for specific performance of the terms of Section 6 or 7
without being required to prove damages or furnish any bond or other security.
Nothing herein contained will be construed as prohibiting Employer from pursuing
any other remedy available to it for such breach or threatened or attempted
breach.
(c) All parties hereto acknowledge the necessity of protection
against the competition of the Employee and that the nature and scope of such
protection has been carefully considered by the parties. The period and area
covered are expressly acknowledged and agreed to be fair, reasonable and
necessary. If any covenant contained in Section 6 or 7 is held to be invalid,
illegal or unenforceable because of the duration of such covenant, the
geographic area covered thereby or otherwise, the parties agree that the court
making such determination will have the power to reduce the duration, the area
and/or other provision(s) of any such covenant to the maximum permissible and to
include as much of its nature and scope as will render it enforceable, and, in
its reduced form said covenant will be valid, legal and enforceable.
8. PAYMENT BREACH BY EMPLOYER. Notwithstanding anything to the contrary
in this Agreement, Employee's obligations under Sections 6 and 7 will
automatically cease in the event Employer fails to make a severance or other
payment to which Employee is entitled pursuant to Section 5(b) or 5(c).
9. COVENANT REGARDING CERTAIN PROCEEDINGS. Employee covenants that he
will not, without Employer's prior written consent unless required to do so by
means of a valid court order or subpoena, cooperate with any person in the
institution or prosecution of any proceeding, suit, claim, investigation or
administrative proceeding brought, initiated or conducted by any person against
Employer, its affiliates, agents, employees, officers and representatives.
Employee further covenants that he will notify Employer immediately if he is
contacted by any person regarding any pending or contemplated proceeding, suit,
claim or investigation involving Employer, its affiliates, agents, employees,
officers or representatives. The parties understand that the covenants
stipulated in this paragraph 8 do not limit Employee's ability to initiate or
bring any proceeding, suit, claim or action against Employer regarding his
employment hereunder.
10. ASSIGNMENTS; SUCCESSORS AND ASSIGNS. The rights and obligations of
Employee hereunder are not assignable or delegable and any prohibited assignment
or delegation will be null
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and void. Employer may assign and delegate this Agreement. The provisions hereof
shall inure to the benefit of and be binding upon the permitted successors and
assigns of the parties hereto.
11. GOVERNING LAW. This Agreement will be interpreted under, subject to
and governed by the substantive laws of the State of Tennessee, without giving
effect to provisions thereof regarding conflict of laws, and all questions
concerning its validity, construction, and administration will be determined in
accordance thereby.
12. COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which will be deemed an original but all of
which will together constitute one and same instrument.
13. INVALIDITY. The invalidity or unenforceability of any provision of
this Agreement will not affect any other provision hereof, and this Agreement
will be construed in all respects as if such invalid or unenforceable provision
was omitted. Furthermore, in lieu of such illegal, invalid, or unenforceable
provision there will be added automatically as a 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.
14. EXCLUSIVENESS. This Agreement, the Guidelines of Company Policies
and Conduct and other policies of Employer constitute the entire understanding
and agreement between the parties with respect to the employment by Employer of
Employee and supersedes any and all other agreements, oral or written, between
the parties.
15. MODIFICATION. This Agreement may not be modified or amended except
in writing signed by the parties. No term or condition of this Agreement will be
deemed to have been waived except in writing by the party charged with waiver. A
waiver will operate only as to the specific term or condition waived and will
not constitute a waiver for the future or act on anything other than that which
is specifically waived.
16. NOTICES. All notices, requests, consents and other communications
hereunder will be in writing and will be deemed to have been made when delivered
or mailed first-class postage prepaid by registered mail, return receipt
requested, or when delivered if by hand, overnight delivery service or confirmed
facsimile transmission, to the following:
(a) If to the Employer, at 0000 Xxxxxxxx Xxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxxx 00000 Attention: President and Chief Executive Officer, or at such
other address as may have been furnished to the Employee by the Employer in
writing; or
(b) If to the Employee, at 000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx
00000 or such other address as may have been furnished to Employer by Employee
in writing.
17. CONSOLIDATION, MERGER OR SALE OF ASSETS. Nothing in this Agreement
will preclude Employer from consolidating or merging in to or with, or
transferring all or substantially all of its assets to, another corporation
which assumes this Agreement and all obligations and undertaking of Employer
hereunder.
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement
as of the date first above written.
"EMPLOYER"
AMERICAN HOMEPATIENT, INC.,
a Tennessee corporation
/s/ Xxxxxx X. Xxxxxxx
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By: Xxxxxx X. Xxxxxxx
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Title: President & Chief Executive Officer
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"EMPLOYEE"
/s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
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