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EXHIBIT 10-F
[NOVACARE LETTERHEAD]
May 26, 1995
X. Xxxxxx Xxxxxxxxx, M.D.
000 Xxxxxxx Xxxx
Xxxx Xxxx, XX 00000
Dear Xxxxx:
This confirms our understanding with respect to the terms of your continued
employment by NovaCare (the "Company"). The terms and conditions of your
agreement with the Company dated as of January 3, 1994 (the "Agreement"), a
copy of which is attached hereto and which is incorporated herein by reference,
are hereby ratified and affirmed except as specifically modified below:
1. The first and last sentences of Paragraph 2 of the Agreement are deleted in
their entirety and the following is substituted in place of the first
sentence:
"2. Position, Duties. The Employee shall serve as the Company's
Senior Vice President, Chief Clinical Officer and President and General
Manager, NewCo, a professional services consulting and management division,
yet to be named."
2. You have been granted, subject to the approval of the Compensation
Committee of the Board of Directors, a non qualified stock option, pursuant
to the NovaCare 1986 Stock Option Plan (the "Plan"), to purchase 110,000
shares of NovaCare common stock at $7.375, the exercise price at the close
of business yesterday. Such options shall vest over five years in annual
cumulative installments of 20% per year, commencing May 25, 1996, and shall
become fully vested immediately (1) if you are directed to report, without
your prior written approval, to someone other than Xxxx X. Xxxxxx or
Xxxxxxx X. Xxxxxx, or (2) if there is a change of control of the Company.
"Change of control" for purposes of this paragraph shall mean that voting
control of twenty percent or more of the common shares of the Company vests
in a person (as defined in Section 13(d)(3) of the Securities Exchange Act
of 1934) other than a group of which you are a member. You remain eligible
for annual option grants pursuant to paragraph 3.4 of the Agreement.
3. Paragraph 8.1 of the Agreement is amended by substituting for the first
portion of the second sentence thereof ending with "... or (b)" the
following:
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X. Xxxxxx Xxxxxxxxx, M.D.
May 26, 1995
Page 2
"The Employee agrees that, in consideration of his employment
hereunder, the Employee will not, for a period of one (1) year commencing
on the date of termination for any reason of his employment with the
Company, (a) engage, directly or indirectly, whether as principal, agent,
distributor, representative, consultant, stockholder (other than an
investment of not more than 5% of the stock or equity of any corporation
the stock of which is publicly traded), employee or otherwise, in any
activity or business venture which is competitive with any business
conducted or proposed to be conducted by the Company as of the date of
termination of his employment with the Company (it being understood and
agreed that the Employee shall not be considered to have violated the
foregoing covenant if, subsequent to his employment by the Company, he
engages in the skilled nursing facility, including sub-acute services
(other than contract sub-acute services), assisted living or senior living
housing business or the physician services (other than contract
rehabilitation management) business), or (b) ..."
Except as modified above, the Agreement remains in full force and effect.
If you agree to the foregoing, please sign the enclosed executed copy of this
letter and return it to me.
Sincerely,
/s/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
Agreed to:
/s/ X. XXXXXX XXXXXXXXX, Date: 5/26/95
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X. Xxxxxx Xxxxxxxxx, M.D.
073
Enclosure
