EXHIBIT 10.9(m)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated July 29, 1999 and commencing on October
1, 1999 (the "Commencement Date") by and between Pediatric Services of America,
Inc., a Delaware Corporation (the "Company"), and Xxxxxx X. Xxxxxxx (the
"Executive").
W I T N E S S E T H:
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WHEREAS, the parties wish to provide for the Executive's employment by
the Company on the terms and conditions herein set forth;
NOW, THEREFORE, it is agreed that:
1. Employment Term. Subject to the terms and conditions hereof, the
Company shall employ the Executive, and the Executive shall serve the Company,
as President and Chief Executive Officer of the Company for a period beginning
on the date hereof and terminating on the second anniversary of the
Commencement Date (the "Initial Term"). During the Initial Term, the Company
shall also take all steps within the Company's control to cause the Executive to
be a member of the Board of Directors of the Company. After the Initial Term,
the Executive shall continue to serve the Company on the terms provided for
herein for successive one (1) year periods commencing on each anniversary of the
Commencement Date from and after the anniversary thereof occurring in 2001
(each, an "Additional Term"), unless and until either party hereto gives the
other not less than thirty (30) days prior written notice of such party's intent
to terminate the Agreement at the end of the Initial Term or the Additional
Term, if any, then in effect, whereupon the Executive's employment shall
terminate on the date specified in such notice. The term of the Executive's
employment hereunder, as it may be extended from time to time, is herein
referred to as the "Term".
2. Duties. During the term, the Executive shall serve as President
and Chief Executive Officer of the Company, with such responsibilities as shall
be specified from time to time by the Board of Directors of the Company, and
subject at all times to the by-laws of the Company and the right of the Board of
Directors and stockholders of the Company to determine the officers and
directors of the Company, respectively. The Executive shall, during the Term,
serve the Company on a full-time basis, faithfully, diligently, and competently
and to the best of his ability, and will hold, in addition to the offices set
forth above, such other offices in the Company and its subsidiaries and
affiliates, if any, to which he may be elected, appointed or assigned by the
Board of Directors from time to time, and will discharge such duties in
connection therewith as may from time to time be assigned to him.
3. Compensation.
(a) During the Initial Term, the Company shall pay the Executive for
the services rendered to the Company a salary ("Salary") of $275,000.00 (Two
Hundred seventy Five Thousand Dollars) per annum for each year during the
Initial Term, payable in installments (net of applicable withholding) not less
frequently than bi-weekly in accordance with the Company's regular policies.
(b) At any time during the first year of the Initial Term, the Salary
shall be subject to review by the Board of Directors and may, if the Executive's
performance is satisfactory to the Board of Directors and in the Board's sole
discretion, be increased by an amount determined by the Board.
(c) During each Additional Term, if any, the Company shall pay the
Executive a Salary equal to the Salary being paid to the Executive on the last
day of the Initial Term or Additional Term immediately prior to such Additional
Term, unless otherwise agreed by the Company and the Executive.
(d) In addition to the Salary payable to the Executive, the Executive
shall be entitled to participate in a bonus plan, the terms of which shall be
determined and approved by the Board of Directors. Such bonus, if any, shall be
payable upon determination of the amount due, but in no event later than thirty
(30) days after the end of each fiscal year for the prior fiscal year of the
Company.
4. Benefits and Perquisites.
(a) During the Term, the Company shall reimburse the Executive for all
reasonable travel and other business expenses reasonably incurred by him in
connection with the rendering of services hereunder against submission of
appropriate vouchers and receipts in accordance with the Company's policies from
time to time in effect.
(b) The Executive shall be entitled during the Term to participate in
employee benefit plans and programs of the Company, including individual and
family medical coverage and retirement plans, to the extent that his position,
tenure, salary, age, health and other qualifications make him eligible so to
participate. Subject to the foregoing, the Executive shall be covered by life
insurance in the amount of $500,000 (five hundred thousand dollars) payable to
the beneficiary of his choice and a long-term disability benefit plan pursuant
to which he shall be eligible to receive 60% (sixty percent) of his annual
compensation up to a monthly maximum of $8,000 (eight thousand dollars) for
documented medical disability which continues beyond a 90 (ninety) day waiting
period. Except as set forth above, the Company does not guarantee the adoption
or continuance of any particular employee benefit plan or program during the
Term, and the Executive's participation in any such plan or program shall be
subject to the provisions, rules and regulations and laws applicable thereto.
(c) During the Term, the Company shall provide for the Executive's use
a Company automobile of a value not to exceed $80,000 (eighty thousand dollars)
and shall pay reasonable and appropriate maintenance, insurance and operating
expenses related thereto. To the extent the Company is able to do so, it shall
provide the Executive the option to purchase such automobile at any time during
the Term for a purchase price equal to the greater of the book value thereof or
$100.00 (one hundred dollars). If the Company and the Executive so agree, the
Executive may elect not to use a Company automobile as set forth above, and in
such event the Company shall pay to the Executive during the Term the sum of
$750.00 (seven hundred fifty dollars) per month, together with reimbursement of
the reasonable expenses incurred by the Executive for fuel, oil, and routine
maintenance in connection with the use of the Executive's own automobile.
(d) The Executive shall be entitled to four weeks paid vacation during
each year of the Term. Such vacation must be taken with each year during the
Term and may not be accumulated. Vacation will accrue during each calendar year
on a pro rata basis.
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(e) The Company shall provide the Executive with basic annual
physicals and subsequent follow up physicals.
(f) The Company shall provide the Executive with legal and accounting
services for matters relating to the Executive's estate planning activities.
5. Disclosure of Information; Inventions and Discoveries. The
Executive shall promptly disclose to the Company all inventions, improvements,
discoveries, data, processes, know-how, trademarks and other financial,
scientific, marketing, operational and other information related to the business
of the Company and its subsidiaries and affiliates (collectively,
"Developments") conceived, developed, learned or acquired by the Executive along
or with others or of which the Executive obtains knowledge during the Term,
whether or not during regular working hours or through the use of materials or
facilities of the Company. All Developments shall be the sole and exclusive
property of the Company, and upon requests the Executive shall deliver to the
Company all data, drawings, sketches, models and other records relating thereto.
In the event any such development shall be deemed by the Company to be
patentable or otherwise protectable, the Executive shall, at the expense of the
Company, assist the Company in obtaining in its name patents, trademarks and
copyrights, as appropriate, in respect of such Development and shall execute all
documents and do all other things necessary or proper to vest in the Company
full title thereto.
6. Confidentiality. The Executive shall not at any time after the
date of the Agreement divulge, furnish or make accessible to anyone (otherwise
than in the regular course of business of the Company) any knowledge or
information with respect to confidential or secret processes, inventions,
discoveries, improvements,
formulae, plans, material, devices, ideas, know-how or data, whether patentable
or not, with respect to any operations, financial, scientific, engineering,
development or research work or with respect to any other confidential or secret
aspects of the Company's business (including, without limitation, financial and
marketing data, customer and supplier lists, personnel information and other
data and pricing arrangements with customers and suppliers, in each case
relating to the Company).
The covenant herein contained shall not extend for more than two years after
termination of employment with respect to matters that are confidential to the
business of the Company but do not constitute "trade secrets" as defined in
O.C.G.A. 19-1-760.
7. Non-Competition. The Company and the Executive agree that the
services rendered by the Executive hereunder are unique and irreplaceable and
that the Executive's services to the Company will bring him into close contact
with confidential information concerning the Company, its employees, independent
contractors, suppliers, customers and others with whom it does business.
Accordingly, the Executive hereby agrees that during the Term and for a period
of two years thereafter, the Executive shall not (a) within a 25 mile radius of
any office where the Company or any subsidiary or affiliate thereof conducts
business during the Term, engage or participate in, directly or indirectly
(whether as an officer, director, employee, partner, agent, independent
contractor, consultant, holder of an equity or debt investment, lender or in any
other manner or capacity), or lend the Executive's name (or any part or variant
thereof) to any business which is or as a result of the Executive's engagement
or participation would become competitive with any aspect of the Business of the
Company or any such subsidiary or affiliate, (b) deal, directly or indirectly,
in a competitive manner with any employee, independent contractor or supplier
doing business with the Company or any subsidiary or affiliate thereof during
the Term, (c) solicit any officer, director, employee, independent contractor or
agent of the Company or any subsidiary or affiliate thereof to become an
officer, director, employee, independent contractor or agent of the Executive,
any entity with which the Executive is affiliated or anyone else, or (d) engage
in or participate in, directly or indirectly, any business conducted under any
name that shall be the same as or similar to the name of the Company or any
subsidiary or affiliate thereof or any trade name used by them. For purposes of
this Agreement, "Business" shall mean providing pediatric home health services.
Notwithstanding the foregoing, and subject to the Executive's compliance with
Section 6 hereof, subsequent to the Term (i) the Executive may serve as an
employee of a corporation or other entity in which the Executive does not have
an equity, debt or other investment or ownership interest (except that if the
Executive is employed by a corporation or other entity described in clause (ii)
below, the Executive may receive employee stock options and stock issuable upon
exercise thereof constituting not more than one percent of the total outstanding
securities of such corporation or other entity), provided such employment is
otherwise in compliance with this Section 7, and (ii) except in the instances
contemplated by clause (i) above, the ownership, in the aggregate, of less than
2% (two percent) of the outstanding shares of any class of capital stock of any
corporation with one or more classes of its capital stock listed on a national
securities exchange or publicly traded in the over-the-counter market shall not
constitute a violation of the foregoing provision.
8. Remedies. The Executive acknowledges that irreparable damage
would result to the Company if the provisions of Sections 5, 6 and 7 of this
Agreement were not specifically enforced, and agrees that the Company shall be
entitled to all appropriate legal, equitable and other remedies, including
injunctive relief, in respect of any failure to comply with the provisions of
such sections.
9. Termination of Employment.
(a) This Agreement shall terminate upon the death of the Executive.
This Agreement may be terminated by the Board of Directors if the Executive
shall be rendered incapable, by physical or mental illness or any other
disability determined by a physician designated by the Company, from complying
with the terms,, conditions and provisions hereof on the Executive's part to be
kept, observed and performed ("Disability"). If this Agreement is terminated by
reason of the Executive's Disability, the Company shall give written notice to
that effect to the Executive in the manner provided herein. In addition to and
not in substitution for any other benefits which may be payable by the Company
in respect of the death or Disability of the Executive, in the event of such
death or Disability of the Executive, the Salary payable hereunder shall
continue to be paid at the then current rate for three months after termination
of the Executive's employment as a result of Disability or until the end of the
month in which death occurs. In the event of the death of the Executive during
the Term, the sums payable hereunder shall be paid to the Executive's personal
representative.
(b) The Executive's employment with the company may be terminated by
the Board of Directors, with or without cause, in accordance with the provisions
hereof. Cause for termination shall include (i) the
Executive's conviction for, or plea of nolo contendere with respect to a charge
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of, a felony or a crime involving moral turpitude, (ii) the Executive's
commission of an act of personal dishonesty or breach of fiduciary duty
involving personal profit in connection with the Executive's employment by the
Company, (iii) habitual absenteeism, chronic alcoholism or any other form of
addiction to illegal substances on the part of the Executive, (iv) the
Executive's material breach of Sections 5, 6, or 7 of this Agreement or (v) the
Executive's material failure to perform his duties under this Agreement as
determined in good faith by the Board of Directors of the Company, which failure
continues for, or is not remedied within, a period of 30 days after the
Executive has received written notice thereof (it being understood that in the
event of such a determination by the Board of Directors the Executive will be
afforded the opportunity to be heard by the Board of Directors prior to such
determination becoming final). In the event of termination by the Company under
this Section 9(b) without cause, or by employee for Good Reason (as defined in
8(d) below), or failure to extend the Initial Term or the Additional Term as
outlined in Section 1, the Company shall (a) pay the Executive the full salary
provided herein for the term of this Agreement and a period of 18 (eighteen)
months thereafter, (b) continue to provide the insurance and other benefits
provided herein for the period the salary is paid, (c) cause all grants of
outstanding options, restricted stock, bonus stock and any other incentive stock
award to become fully vested, and (d) cause all deferred compensation,
supplemental retirement programs and similar programs to become fully funded. In
the event of termination by the Company under this Section 9(b) with cause, or
in the event the Executive shall voluntarily terminate his employment, in
addition to any other rights it may have the Company shall not be obligated to
pay any additional salary or other benefits to the Executive. Notwithstanding
any termination of this Agreement pursuant to this Section, the Executive, in
consideration of his employment hereunder to the date of such termination, shall
remain bound by the provisions of Sections 5, 6, and 7 hereunder.
(c) Upon termination of the Term, whether pursuant to Section 1 or
this Section 9, the Executive or his personal representative shall promptly, and
in any event within ten days after such termination, deliver to the Company all
books, memoranda, plans, records and written and other data of every kind
relating to the business and affairs of the Company which are then in the
Executive's possession.
(d) Termination by the Employee. The Employee may terminate his
employment hereunder for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean (A) a change in control of the Company (as defined below), as
well as, and as a direct result thereof, (i) a decrease in the total amount of
the Employee's base salary below its level in effect on the date hereof, or a
decrease in the bonus percentage to which the Employee is entitled, without the
Employee's consent, provided, however, nothing herein shall be construed to
guarantee the Employee's bonus award if performance is below target, (ii) a
reduction in the importance of the Employee's job responsibilities without the
Employee's consent, with the determination of whether a reduction in job
responsibility has taken place to be in the sole discretion of the Employee or
(iii) a geographical relocation of the Employee of more than 25 miles within six
months of a change in control without Employee's written consent, or (B) a
failure by the Company to comply with any material provision of this Agreement
which has not been cured within ten (10) days after notice of such noncompliance
has been given by the Employee. Absent written consent, after a change in
control of the Company (as defined below), no action or inaction by the Employee
within ninety (90) days following the occurrence of the events described above
shall be deemed consent to such events.
A "change in control" shall be deemed to have occurred on (i) the
closing date of any merger or consolidation with or into another company and the
Company does not survive the transaction or survive only as a subsidiary of
another company or (ii) the date on which the Board of Directors becomes aware
that any person or group (as such terms are defined in section 13(d) of the
Securities Exchange Act of 1934, as amended) has become the holder of 50% or
more of the outstanding voting securities of the Company or has the power,
directly or indirectly, to designate a majority of the members of the Board of
directors.
(e) Mutual Consent. By mutual written agreement of the Company and
Employee.
10. Insurance. The Company shall have the right at its own cost and
expense to apply for and to secure in its own name or otherwise life, health
and/or accident insurance covering the Executive. The Executive agrees to submit
to usual and customary medical examinations and otherwise cooperate with the
Company in connection with the procurement of any such insurance and the
assertion of any claims thereunder.
11. Certain Representations. The Executive hereby represents and
warrants to the Company that neither the execution and delivery of the Agreement
nor the performance by him of his obligations hereunder violates or constitutes
a breach of any agreement or undertaking to which the Executive is a party or by
which he is bound.
12. Severability. To the extent any provision of this Agreement shall
be invalid or unenforceable, it shall be considered deleted here from and the
remainder of such provision and this Agreement shall be unaffected and shall
continue in full force and effect. In furtherance and not in limitation of the
foregoing, should the duration or geographical extent of or business activities
covered by any provision of this Agreement be in excess of that which is valid
and enforceable under applicable law, then such provision shall be construed to
cover only that duration, extent or activities which may be validly and
enforceably covered.
13. Notices. All notices, requests and other communications pursuant
to this Agreement shall be in writing and shall be deemed to have been duly
given if delivered in person or by courier, telegraphed, telexed, transmitted by
facsimile or mailed by registered or certified mail, postage prepaid, addressed
as follows:
If to the Executive:
Xxxxxx X. Xxxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
If to the Company:
Pediatric Services of America, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Either party may, by written notice to the other, change the address to which
notices to such party are to be delivered or mailed.
14. General. Any waiver of any breach of this Agreement shall not be
construed to be a continuing waiver or consent to any subsequent breach on the
part of either party hereto. Neither party hereto may assign such party's
rights or delegate such party's duties under this Agreement without the prior
written consent of the other party; provided, however, that this Agreement may
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be assigned and the Company's duties delegated by, and this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of, the
Company upon any sale of all or substantially all of the Company's assets or
upon any merger or consolidation of the Company with or into any other
corporation, all as though such successors and assigns of the Company and their
respective successors and assigns were the Company. The terms and provisions of
this Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Georgia, shall constitute the entire Agreement by
the Company and the Executive with respect to the subject matter hereof, and
shall supersede any and all prior agreement or understandings between the
Executive and the Company, whether written or oral. This Agreement may be
amended or modified only by a written instrument executed by the Executive and
the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.
PEDIATRIC SERVICES OF AMERICA, INC.
Date: 7/29/99 By /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
Compensation Committee Director
Member, Board of Directors
Witness: By /s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx
Member, Board of Directors
EXECUTIVE:
Date: 7/29/99 /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
Date: 7/29/99 NOTARY PUBLIC
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/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
State of Georgia
County of Gwinnett
Commission Expires: 11/1/99
