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EXHIBIT 10.72
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of January 1,
1999, by and between AMERICAN HOMEPATIENT, INC., a Delaware corporation (the
"Employer"), and XXXXXXX X'XXXX, a resident of the State of Rhode Island (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.
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, 2000; 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, 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
Senior Vice President, Chief Financial Officer, and Corporate Secretary.
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 her full time, attention and skill to her duties hereunder and to use her
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 "Guidelines of Company Policies and Conduct" and
any other compliance programs of Employer, as such programs may be amended from
time to time, and acknowledges that her obligations under such programs as an
employee are contractual in nature.
4. COMPENSATION.
(a) Employee will be paid a base salary of One Hundred Sixty
Thousand Dollars and No/100 Dollars ($160,000) per year during the term 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
percent (30%) of her 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
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periodically conduct a merit review regarding Employee's performance to consider
increasing, but not decreasing, Employee's base salary.
(b) Employer recognizes that Employee will be commuting from her
residence in Rhode Island to Employer's corporate support center in Brentwood,
Tennessee. Employer will reimburse Employee for all reasonable and actual travel
and other expenses incurred by Employee in connection with the services she is
to perform hereunder, including travel by Employee between her Warwick, Rhode
Island residence and Employer's corporate support center in Brentwood, Tennessee
and expenses related to accommodations, rental cars and similar items while
Employee is in Brentwood, Tennessee. Reimbursement hereunder will be subject to
compliance with Employer's reimbursement policies as established from time to
time.
(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. Promptly following execution and
delivery of this Agreement, either the Board of Directors of Employer or such
Board's Independent Stock Option Committee will consider and act upon a grant of
stock options under Employer's 1991 Non-Qualified Stock Option Plan in favor of
Employee.
5. TERMINATION.
(a) Employee's employment will be terminable by Employer at any time
for cause, which will include but not be limited to (i) insubordination,
malfeasance, misconduct, (ii) charge or conviction of a felony or of a
misdemeanor involving moral turpitude, (iii) the inability of Employee to
perform her duties hereunder for a period of thirty (30) consecutive days (or
sixty (60) total days in any ninety (90) consecutive day period) by reason of
illness or mental or physical disability, (iv) death, and (v) other
circumstances deemed by the Employer to be materially detrimental to the
Employer. 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
stated cause. 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. If Employer terminates Employee's employment
without stated cause, Employee will be entitled to receive (i) her monthly base
salary (not including incentive compensation or benefits) as in effect at the
time of termination multiplied by the lesser of (y) the number of months
remaining in the then current term of this Agreement, or (z) 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
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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 equal amounts over the applicable number of
months following termination in accordance with Employer's standard payroll
practices. In addition, Employer will (i) pay Employee upon termination any
earned but unpaid base salary, and (ii) subsidize COBRA premiums for Employee's
medical and dental insurance benefits as such benefits were in effect
immediately prior to termination by paying Employee, following termination in
accordance with Employer's standard payroll practices, an amount equal to the
standard employer portion of the COBRA premium for a period equal to the lesser
of (y) the period remaining in the then current term of this Agreement, or (z)
twelve (12) months. Employer acknowledges that in the event of such termination,
Employee will be entitled to her individual vested account balances with respect
to Employer's Supplemental Executive Retirement and Stock Purchase Plan, as the
balances, if any, exist as of the date of termination of employment.
(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) her 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 subsidize COBRA premiums for Employee's medical
and dental insurance benefits as such benefits were in effect immediately prior
to termination by paying to Employee upon termination an amount equal to the
standard employer portion of the COBRA premium for a twelve (12) month period.
Employer acknowledges that, in the event of such termination following a Change
in Control, Employee will be entitled to her individual vested account balances
with respect to Employer's Supplemental Executive Retirement and Stock Purchase
Plans, as the balances, if any, exist 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.
(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
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(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 she has had
access to or is 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 she 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.
(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.
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(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 her from any source by virtue of her
relationship with Employer or its affiliates.
(e) Employee will, with reasonable notice during and after her
employment by Employer, furnish information as may be in her 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 she incurs in order to satisfy her 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 her employment by Employer, Employee will not
use her status with Employer to obtain loans, goods or services from another
organization on terms that would not be available to her in the absence of her
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 her 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 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 her 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,
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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. COVENANT REGARDING CERTAIN PROCEEDINGS. Employee covenants that she
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 she will notify Employer immediately if she 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 her
employment hereunder.
9. 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 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.
10. 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.
11. 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.
12. 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.
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13. 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.
14. 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.
15. 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 Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxx
Xxxxxx 00000 or such other address as may have been furnished to Employer by
Employee in writing.
16. 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.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement
as of the date first above written.
"EMPLOYER"
AMERICAN HOMEPATIENT, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx, III
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Title: President and Chief Executive Officer
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"EMPLOYEE"
/s/ Xxxxxxx X'Xxxx
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XXXXXXX X'XXXX
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