EXHIBIT 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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PARTIES: EVEREST HEALTHCARE SERVICES CORPORATION, a Delaware
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corporation (the "Company"), and XXXXX X. XXXXX (the
"Employee").
EFFECTIVE DATE: January 1, 1997.
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PREMISES: The Company and its affiliates provide dialysis and dialysis
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related services and equipment throughout the United States.
CONSIDERATION: The covenants, conditions and agreements hereinafter set
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forth.
TERMS:
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Section 1. Establishment of Employment. The Employee shall be employed as
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the Chief Executive Officer of the Company. The Employee shall devote all of
his professional time, knowledge and skill to his employment and shall perform
such duties and occupy such positions as the Chief Executive Officer of the
Company may from time to time determine, including without limitation, those
duties and obligations hereinafter set forth in this Agreement. Employee agrees
to such employment and further agrees that during the term of such employment he
will continue to devote such of his time, attention, and energies as are
necessary to complete the duties assigned to him from time to time to the full
and complete satisfaction of the Company.
Section 2. Term of Employment. The term of this Agreement and Employee's
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employment hereunder shall begin on the Effective Date and shall continue from
year to year thereafter, all subject, however, to termination, with or without
cause, at any time upon forty-eight (48) hours' prior written notice by either
the Company to the Employee or the Employee to the Company unless otherwise
limited by this Agreement. The date of Employee's termination of employment and
the termination of this Agreement are sometimes hereinafter referred to as the
"Date of Termination."
Section 3. Compensation and Other Benefits.
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(a) Salary and Bonus. The Company shall pay Employee a salary at
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the rate of $440,000 per annum ("Basic Annual Salary"), payable in twelve (12)
equal installments on the first day of each month.
(b) Health and Disability Income Insurance. Throughout the term of
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this Agreement, the Company shall maintain, at its expense:
(i) Health and major medical insurance coverage for
Employee, his spouse and dependents. This coverage shall be provided
by the group health and major medical insurance policy maintained by
the Company; and
(ii) Disability income insurance which will provide Employee
with a monthly benefit of $5,000.00 beginning with the first day of
the thirteenth month of his "total disability," as defined in such
policy, and continuing until the earlier of the Employee's 65th
birthday or the date he is no longer totally disabled.
(c) Pension and Other Employee Benefit Plans. Employee's
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participation in any pension or welfare benefit plan or policy now maintained or
hereafter adopted by the Company shall be governed by the terms of such plans or
policies and not by the terms of this Agreement. Any contributions by the
Company to any such plan or policy in respect of or for the Employee and any
payments or benefits thereunder to or for the benefit of the Employee or his
beneficiaries shall be in addition to his compensation provided under Section
3(a), it being intended that such compensation be exclusive of pension and
welfare benefit plan contributions or benefits for the Employee or his
beneficiaries.
Section 4. Additional Death Benefits. In addition to any amounts provided
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for herein, within ninety (90) days after the Employee's death while in the
employ of the Company, the Company will pay $5,000.00 to the Employee's spouse,
if Employee is married on the date of his death, or to his estate.
Section 5. Employee Expenses. The Company shall pay or reimburse the
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Employee for all expenses incurred by the Employee on behalf of the Company or
related to the performance of Employee's duties hereunder, including without
limitation, travel and entertainment expenses and costs of membership in
professional organizations, or for any other expenses incurred by the Employee
on behalf of Company with its approval. All reimbursements pursuant to this
Section 5 shall be made upon the presentation by Employee to the Company of
itemized accounts or receipts satisfactory to the Company. If the Employee
terminates employment for any reason (including death), he (or his estate)
shall, within thirty (30) days thereof, repay to the Company an amount equal to
the unused portion of any expenses paid (or reimbursed) by the Company on his
behalf.
Section 6. Vacation. For each fiscal year of the Company, Employee shall
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be entitled to five weeks of vacation and six paid holidays with full
compensation, but the time when vacations may be taken shall be subject to the
approval of the Board of Directors of the Company. Unused vacation time shall
not be carried over to subsequent years. Attendance at professional meetings
(other than those professional meetings at which Employee's attendance is
required by the Board of Directors of the Company) shall be treated as vacation
time.
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Section 7. Disability.
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(a) Total Disability. If the Employee shall become totally
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disabled, he shall receive, during each month that he is totally disabled, an
amount equal to one-twelfth (1/12th) of his Basic Annual Salary multiplied by
the following percentages:
PERIOD OF TOTAL DISABILITY
DURING WHICH SALARY PAID PERCENTAGE
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First Six Months 100%
Next Three Months 50%
Next Three Months 25%
Thereafter 0%
The term "total disability" or "totally disabled" as used in this Agreement
shall mean the Employee's inability to perform his duties hereunder due to
physical or mental illness or injury. In addition to the amounts specified
above, the Employee shall be entitled to retain all proceeds received under
disability income insurance policies, the premiums of which have been paid by
the Company.
(b) Partial Disability. If, because of partial disability, the
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Employee fails to devote to his employment at least 90% of the time required by
a full schedule, his Basic Annual Salary for the period of such partial
disability shall be reduced in ratio by the deficiency in time devoted by him to
the full schedule. However, the first six (6) consecutive months of such
partial disability shall not result in any such reduction, unless such partial
disability follows within a six-month period of total or partial disability, and
when taken with the prior period of disability equals six (6) months, in which
case the partial disability reduction herein provided for shall be effective
immediately. Notwithstanding the foregoing, the amount payable under this
Section shall not be less than the amount that would have been payable to the
Employee during the period if he had been totally disabled, for the length of
time that he is partially disabled. If the Employee's partial disability
exceeds 50%, he shall be deemed to be totally disabled and the provisions of
Section 7(a) shall apply.
(c) Miscellaneous Provisions Applicable to Disability. In
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administering this Agreement during any period of disability the following shall
be applicable:
(i) When totally disabled, the Employee shall be excused from
rendering services to, for or on behalf of the Company. Upon
termination of such total disability, the Employee shall be obligated
to render the services required by this Agreement and shall be
entitled to receive his full Basic Annual Salary.
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(ii) During the period that the Employee is entitled to
receive disability payments pursuant to Section 7(a) and for three
consecutive months thereafter, the Company shall not have the right to
terminate this Agreement. Thereafter, if the Employee continues to be
totally disabled, he shall be deemed to have a Permanent Disability
and his employment shall be automatically terminated.
(iii) If following a period of disability, the Employee shall
be able to perform the services contracted for hereunder, and does so
in accordance with the provisions of this Agreement for a continuous
period of six months or more, any subsequent disability shall be
regarded as a new period of disability, and his rights under Sections
7(a) and 7(b) shall commence again. If said continuous period of
ability to perform said services and the actual performance thereof is
less than six months, any subsequent disability shall be deemed a
continuation of the previous disability, and the entire period of
disability shall be treated as a single period.
Section 8. Termination of Employment.
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(a) Accrued Salary and Bonus. Upon the termination of Employee's
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employment for any reason, the Company shall pay to Employee his accrued Basic
Annual Salary on the date such payments would have been made but for Employee's
termination.
(b) Severance Pay. If, prior to October 1, 1997, this Agreement is
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terminated (i) by the death of Employee, (ii) by reason of his Permanent
Disability (as defined below), or (iii) by the Company, the Company shall pay to
Employee, as severance pay, an amount equal to $900,000. If (i) after October
1, 1997, this Agreement is terminated by the Company for any reason, or (ii)
this Agreement is terminated by Employee at any time upon at least 45 days'
prior written notice to the Company, the Company shall pay to Employee, as
severance pay, an amount equal to $598,833. The severance pay shall be paid in
twelve (12) consecutive equal monthly installments with the first installment
payable on the last day of the month following the month in which his Date of
Termination occurs. In addition, Employee's health and disability insurance
coverage pursuant to Section 3(b) and all other benefits being provided by
Company to Employee on the Date of Termination shall continue for a period of
nine (9) months beginning on the Date of Termination; provided, however, that no
amounts paid to Employee pursuant to Subsection 8(a) or 8(b) shall be considered
as compensation for purposes of any pension and/or profit-sharing plan now
maintained or hereafter established by the Company.
(c) Permanent Disability. Upon Employee's Permanent Disability, his
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employment shall be terminated. Employee shall be deemed to have a "Permanent
Disability" for purposes of this Agreement if he is totally disabled for a total
period of one hundred eighty (180) days in any three hundred sixty (360) day
period or otherwise pursuant to Section 7(c)(ii). The Board of Directors of the
Company shall determine, according to the facts then available, whether and when
Permanent Disability has occurred. Such determination shall not be arbitrary
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or unreasonable, and the Board of Directors of the Company shall take into
consideration the opinion of Employee's personal physician.
(d) Death Beneficiaries. If termination of employment occurs
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because of the death of the Employee or if any amounts pursuant to this Section
8 remain unpaid as of the date of Employee's death, then the amounts payable
pursuant to this Section 8 shall be paid to the Employee's designated
beneficiary; but if none is designated or if none survives the Employee, then
payment will be made to his estate.
Section 9. Acknowledgments. The Company together with its affiliates has
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developed expertise in providing supplies, equipment and services required in
connection with dialysis and in all aspects of the establishment, management and
operation of dialysis facilities. This expertise has been developed by the
Company, together with its Affiliates and their respective employees, through
their efforts and labor, and such expertise has great value to them. By virtue
of Employee's employment by the Company hereunder, Employee will become familiar
with and possessed of the manner, methods and confidential information
pertaining to the Company's business and operations. Employee acknowledges that
his services are of a special, unique and extraordinary value to the Company and
that the Company will suffer great loss and damage if he enters into Competition
(as hereinafter defined), and accordingly Employee acknowledges and agrees that
the covenants contained in this Agreement are reasonable and are necessary for
the protection of the Company's proprietary interests.
Section 10. Covenant Not To Compete.
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(a) Agreement Not to Compete. As consideration for the Company
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entering into this Agreement and in recognition of the Company's proprietary
interest in its business, the Employee agrees that he shall not enter into
Competition during the period beginning on the Effective Date and ending twenty-
four months after the Employee's Date of Termination.
(b) Competition. The term "Competition," as used herein, means the
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full-time or part-time performance of activities directly related to (i)
dialysis treatments, (ii) the operation of dialysis facilities or (iii)
equipment, supplies, products or services utilized in dialysis treatment or
service, directly or indirectly, alone or with any other person, partnership,
corporation or other entity, as follows: in the following counties in Illinois:
Xxxx, Will, Xxxx, DuPage, Lake, and XxXxxxx; in the following counties in
Wisconsin: Milwaukee, Racine, Kenosha, Waukesha; in Lake County in Indiana;
within a 40-mile radius of any dialysis facility owned or operated by the
Company or any Affiliate on the Date of Termination or any location where,
during the preceding nine (9) months, the Company or any Affiliate has been
actively engaged in efforts to establish and/or operate a new dialysis facility
or to acquire or operate an existing dialysis facility. As used in this
Agreement, the term "Affiliate" means any entity which controls, is controlled
by or is under common control with the Company.
(c) Remedy. The Company and Employee acknowledge that it is
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difficult to compute the amount of loss or damages the Company will sustain if
Employee breaches any of
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his covenants under this Section 10. The Company and Employee agree that the
measure hereinafter provided represents the product of their good faith
negotiations. Accordingly, if Employee breaches any of his covenants under this
Section 10, Employee agrees to pay the Company $300,000.00 as liquidated damages
on the date he breaches such covenant. Any portion of this amount which is not
paid when due, shall bear interest at two percent (2%) above the floating prime
rate of interest charged by The First National Bank of Chicago. If the Company
is involved in a court or other legal proceeding to enforce the covenants
contained in this Section 10, then in the event the Company prevails in such
proceeding, Employee shall be liable for the payment of reasonable attorneys'
fees, costs and ancillary expenses incurred by the Company in enforcing its
rights hereunder.
Section 11. Covenant to Maintain Confidential Information.
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(a) By Employee. Employee acknowledges that as a result of his
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employment, he will obtain confidential knowledge and information of a private,
confidential or secret nature belonging or entrusted to the Company. Employee
hereby covenants and agrees that he shall receive such knowledge and information
in confidence and shall not during or subsequent to his employment hereunder,
except as required in the conduct of the Company's business or authorized in
writing by the Board of Directors of the Company or as such disclosure may be
required by law or a court order, publish, disclose or make use of any such
information or knowledge which in any way relates to the Business of the Company
or its Affiliates or the services, equipment or products they provide. Employee
acknowledges that it will be difficult if not impossible to compute the amount
of Company's loss and damages if he should breach his covenant under this
Section 11(a), and that by reason of Employee's financial circumstances,
Employee cannot respond in damages in an action at law to compensate the Company
for such loss or damages. Accordingly, the Company is without an adequate legal
remedy in the event Employee violates such covenant. If Employee breaches his
covenant under this Section 11, Employee agrees that in any suit which may be
brought by the Company in any court having jurisdiction, an order may be entered
enjoining him from breaching such covenant, and an order to that effect shall be
entered pending the litigation, as well as a final determination thereof,
without the requirement to post bond, and that such application for such
injunction shall be without prejudice to any other right of action which accrues
to the Company or its successors by reason of the breach of the foregoing
provisions. If the Company is involved in a legal proceeding to enforce the
covenants contained in this Section 11, then in the event the Company prevails
in such proceeding, Employee shall be liable for the payment of reasonable
attorneys' fees, court costs and ancillary expenses incurred by the Company in
enforcing its rights hereunder.
(b) By the Company. The Company acknowledges that as a result of
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the employment of Employee, it will obtain confidential knowledge and
information of a private or confidential nature regarding Employee. The Company
hereby covenants and agrees that it shall receive such knowledge and information
in confidence and shall not during or subsequent to Employee's employment
hereunder, except as required in the conduct of the Company's business or
authorized in writing by Employee, publish, disclose or make use of such
information. If the
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Company breaches its covenant under this Section 11(b), the Company agrees that
in any suit which may be brought by Employee in any court having jurisdiction,
an order may be entered enjoining the Company from breaching such covenant, and
an order to that effect shall be entered pending the litigation, as well as a
final determination thereof, without the requirement to post bond, and that such
application for such injunction shall be without prejudice to any other right of
action which accrues to Employee by reason of the breach of the foregoing
provisions. If Employee is involved in a legal proceeding to enforce the
covenants contained in Section 11(b), then in the event Employee prevails in
such proceeding, the Company shall be liable for the payment of reasonable
attorneys' fees, court costs and ancillary expenses incurred by Employee in
enforcing its rights hereunder.
Section 12. Remedies. In addition to, and not in lieu of, all other
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remedies available to the Company, the Employee and the Company agree that (a)
in the event of a breach by the Employee of the covenants in Section 10, no
amount shall be payable to the Employee pursuant to Section 8(b); and (b) in the
event of a breach by the Employee of the covenants in Section 11(a), no amount
shall be payable to the Employee pursuant to Section 8(b).
Section 13. Arbitration. All disagreements arising out of this Agreement
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shall be resolved by the American Arbitration Association in Chicago, Illinois.
The determination so made shall be binding and conclusive upon the Company, the
Employee and their successors in interest.
Section 14. Governing Law. This Agreement shall be subject to and
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governed by the laws of the State of Illinois, irrespective of the fact that
Employee is or may become a resident of a different state.
Section 15. Prohibition Against Assignment. The Employee agrees on behalf
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of himself and of his executors and administrators, heirs, legatees,
distributees, and any other person or persons claiming any benefit under him by
virtue of this Agreement, that this Agreement and the rights, interests and
benefits hereunder shall not be assigned, transferred, pledged or hypothecated
in any way by Employee or any executor, administrator, heir, legatee,
distributee or other person claiming under Employee by virtue of this Agreement
and shall not be subject to execution, attachment or similar process. Any
attempt to assign, transfer, pledge, hypothecate or otherwise dispose of this
Agreement or of such rights, interests and benefits contrary to the foregoing
provisions, or the levy of any attachment or similar process thereupon shall be
null and void and without effect.
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Section 16. Notice. Any and all notices, designations, consents, offers,
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acceptances, or any other communication provided for herein shall be given in
writing by registered or certified mail, return receipt requested, which shall
be addressed as follows:
To the Company: Everest Healthcare Services Corporation
000 Xxxxx Xxxxxxxx
Xxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxx, President
With copies to: Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
Xxxxxxx X. Xxxxx, Esq.
To Employee: Xxxxx X. Xxxxx
000 Xxxxxxxxxx Xxxxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Section 17. Binding Effect. This Agreement shall be binding upon and
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inure to the benefit of the Company and Employee and their respective heirs,
legal representatives, executors, administrators, successors and assigns.
Section 18. Entire Agreement. This Agreement constitutes the entire
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agreement between the parties and contains all of the agreements between the
parties with respect to the subject matter hereof; this Agreement supersedes any
and all other agreements, either oral or in writing, between the parties hereto
with respect to the subject matter hereof. No change or modification of this
Agreement shall be valid unless the same be in writing and signed by the
Employee and the Company. No waiver of any provision of this Agreement shall be
valid unless in writing and signed by the person or party to be charged.
Section 19. Severability. If any portion or portions of this Agreement
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shall be, for any reason, invalid or unenforceable, the remaining portion or
portions shall nevertheless be valid, enforceable and carried into effect,
unless to do so would clearly violate the present legal and valid intention of
the parties hereto.
Section 20. Headings. The headings of this Agreement are inserted for
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convenience only and are not to be considered in construction of the provisions
hereof.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by
its duly authorized officer, and the Employee has hereunto set his hand as of
the day and year first above written.
EVEREST HEALTHCARE SERVICES CORPORATION
By /s/ XXXXXX XXXXXX
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Xxxxxx Xxxxxx
President
/s/ XXXXX X. XXXXX
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Xxxxx X. Xxxxx
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