Exhibit 10.9e
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), dated as of
December 11, 1997, is made by and between Maxicare Health Plans,
Inc., a Delaware corporation (the "Company"), and Xxxxxxx X. Link,
an individual ("Executive").
RECITALS
WHEREAS, Executive is knowledgeable and skillful in the
Company's business and has served as Senior Vice President and
Chief Accounting Officer of the Company;
WHEREAS, the Company wishes to retain the services of
Executive as Executive Vice President - Finance and Administration
and Chief Financial Officer of the Company and Executive has agreed
to render services as such;
WHEREAS, Executive is willing to be employed by the Company
under the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the terms and
conditions hereinafter set forth, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings, unless
otherwise expressly provided or unless the context otherwise
requires:
(a) "Annualized Compensation" means the Executive's
average annualized "compensation" actually received from the
Company for the period commencing December 11, 1997 and terminating
on December 31st of the calendar year immediately preceding the
calendar year during which a "Change of Control", as hereinafter
defined, occurs (the "Compensation Period"). The "compensation"
received during such Compensation Period shall be annualized and
averaged for the purposes of determining Annualized Compensation.
For the purposes hereof, "compensation" during the Compensation
Period shall be limited to Executive's base salary, bonuses and
other items actually received by Executive during the Compensation
Period and reported as income on the Company's W-2 for the
Executive for such period(s) during the "Compensation Period".
(b) "Board of Directors" means the Board of
Directors of the Company.
(c) "Cause" means, as used with respect to the
involuntary termination of Executive:
(i) The continued failure or refusal by
Executive to substantially perform his duties pursuant to the terms
of this Agreement;
(ii) The engaging by Executive in misconduct
or inaction materially injurious to the Company; or
(iii) The conviction of Executive for a felony or of a crime
involving moral turpitude.
(d) "Change of Control" means any transaction or
occurrence after the date hereof as the result of which:
(i) the Company shall cease to be a
publicly owned corporation having at least 300 stockholders;
(ii) any person or group of persons (as
defined in Rule 13d-5 promulgated under the Securities Exchange Act
of 1934 (the "Act")), together with its affiliates, is or becomes
the beneficial owner (as defined in Rule 13d-3 promulgated under
the Act), directly or indirectly, of securities of the Company
(including securities convertible into or exercisable for
securities of the Company) ordinarily having the right to vote in
the election of directors which together represent, after giving
effect to any conversion or exercise, in excess of forty percent
(40%) of the combined voting power of the Company's outstanding
securities ordinarily having the right to vote in the election of
directors;
(iii) Continuing Directors (as defined below)
shall cease for any reason to constitute at least a majority of the
Board of Directors;
(iv) the Company shall merge or consolidate
with any other person or entity other than a subsidiary, and, upon
the consummation of such transaction, holders of the Common Stock
immediately prior to such transaction own less than sixty percent
(60%) of the equity securities of the surviving or consolidated
entity; or
(v) all or substantially all of the assets
of the Company are sold or transferred to another person or entity
in a single transaction or a series of related transactions.
Notwithstanding the foregoing, a Change of Control shall not
include the filing by or on behalf of, or entering against, the
Company or its subsidiaries of (a) a petition, decree or order of
bankruptcy or reorganization, or (b) a petition, decree or order
for the appointment of a trustee, receiver, liquidator, supervisor,
conservator or other officer or agency having similar powers over
the Company or its subsidiaries, including any such petitions,
orders or decrees filed or entered by federal or state regulatory
authorities.
(e) "Continuing Director" means any individual who
is a member of the Board of Directors as of the date hereof, which
individuals are listed on Exhibit A attached hereto and made a part
hereof, and any subsequent director nominated by the Board of
Directors for election by the stockholders or appointed to the
Board of Directors, which nomination or appointment is made with
the affirmative vote of a majority of Continuing Directors then
serving on the Board of Directors.
(f) "Good Reason" means, with respect to the
voluntary termination by Executive, the occurrence, without the
Executive's express written consent, of any of the following:
(i) Except as provided in Section 2 hereof,
the assignment to Executive by the Company of any duties materially
inconsistent with, or the diminution of, Executive's positions,
titles, offices, duties and responsibilities with the Company, as
provided in Section 2 below, or any removal of Executive from, or
any failure to re-elect Executive to, any titles, offices or
positions held by Executive pursuant to said Section 2;
(ii) Except as in accordance with the terms
hereof, a reduction by the Company in Executive's base salary or
any other compensation provided for herein;
(iii) The failure by the Company to continue in
effect any material benefit or compensation plan to which Executive
is entitled, hereunder, or plans providing Executive with
substantially similar benefits, the taking of any action by the
Company which would materially and adversely affect Executive's
participation in, or materially reduce Executive's benefits under,
any such benefit plan or deprive Executive of any material fringe
benefits enjoyed by Executive hereunder, or the failure by the
Company to provide Executive with the number of paid vacation days
to which Executive is then entitled (based on years of service)
under the Company's normal vacation policies and practices in
effect on the date hereof or in effect from time to time hereafter;
provided, however, that the occurrence of any of the foregoing
shall not constitute "Good Reason" to the extent that such
occurrence is part of a change in benefits, compensation, policies
or practices that affect either: (i) substantially all of the
employees of the Company or (ii) all other senior executives of the
Company of comparable or lower status to the Executive;
(iv) The failure of the Company to obtain
the explicit assumption in writing of its obligation to perform
this Agreement by any successor as contemplated in Section 16(a)
hereof; or
(v) A change or relocation of Executive's
place of employment, as designated in Section 2 hereof, without his
written consent, other than within thirty (30) miles of such
agreed-upon location.
(g) "Incapacity" means the absence of the Executive
from his employment or the inability of Executive to perform his
duties pursuant to this Agreement by reason of mental or physical
illness, disability or incapacity for a period of four (4) months
or more during any twelve (12) month period during the term hereof.
2. Employment, Services and Duties. The Company hereby
employs Executive as Executive Vice President - Finance and
Administration, and Chief Financial Officer and as Executive Vice
President - Finance and Administration and/or Chief Financial
Officer with respect to any of the Company's subsidiaries as the
Board of Directors of such subsidiaries shall from time to time
direct. Subject to his continued employment as such by the
Company's Board of Directors, Executive shall have and perform the
duties and have the powers and authority of Executive Vice
President - Finance and Administration and Chief Financial Officer.
As Executive Vice President - Administration and Finance and Chief
Financial Officer, Executive shall supervise, control, and be
responsible for such administrative and financial aspects of the
business activities and affairs of the Company and its
subsidiaries, as may be specified by the Company's Board of
Directors or the Company's Chief Executive Officer ("CEO").
Notwithstanding the foregoing, Executive shall perform such duties
and have such control and responsibilities over the financial and
accounting affairs and reporting of the Company as are normally
associated with the position of Chief Financial Officer. In
connection with the performance of his duties hereunder, Executive
shall report to and be supervised by the Company's Chief Executive
Officer ("CEO"). Executive shall render his services generally in,
and shall not be obligated to maintain his office in any place
other than, Los Angeles, California, or its environs.
3. Acceptance of Employment. Executive hereby accepts
employment hereunder and agrees to devote his full time, energy and
skill to such employment. Notwithstanding the foregoing, Executive
may engage in other personal business so long as the performance of
such activities does not materially interfere with the efficient
and timely performance of the Executive's duties hereunder.
4. Compensation. As compensation for all services to be
rendered by Executive hereunder, the Company shall pay to Executive
a base salary at the rate of $275,000 per annum, (the "Base
Salary") with such increases and/or bonuses as may be determined
from time to time by the CEO in his sole discretion and, if
applicable, subject to the approval of the Board of Directors;
provided however, nothing herein shall require that the Company pay
any bonus to Executive or increase the Base Salary. Said Base
Salary shall be payable in equal semi-monthly installments or in
such other installments as the Company may from time to time pay
other similarly situated employees.
5. Benefits.
(a) During the term of this Agreement, in addition
to the compensation provided for in Section 4 of this Agreement,
Executive shall have the right to participate in any profit-
sharing, pension, life, health and accident insurance, or other
employee benefit plans presently adopted or which hereafter may be
adopted by the Company under terms no less favorable to those
offered or available to other senior executives of the Company or
comparable or lower standing than the Executive.
(b) Executive shall be entitled to twenty (20) days
annual vacation time, during which time his compensation will be
paid in full. Unused vacation days at the end of any pay period(s)
may be carried over to a subsequent pay period(s), provided that
the cumulative number of vacation days accruing from and after the
date of this Agreement carried over in any one pay period shall not
exceed twenty (20) days. Executive shall under no circumstances be
entitled to cash in lieu of vacation days, except in the event of
his termination of employment with the Company and then only as
specifically provided in Section 8 hereof.
(c) The Company shall provide Executive with a
monthly automobile allowance of One Thousand One Hundred Dollars
($1,100.00) and a car phone for use in such automobile.
6. Expenses. The Company shall reimburse Executive for
all reasonable travel, hotel, entertainment and other expenses
incurred by Executive in the discharge of Executive's duties
hereunder, in accordance with Company policy regarding same, only
after receipt from Executive of vouchers, receipts or other
reasonable substantiation of such expenses acceptable to the
Company. At Executive's election, Executive's spouse may accompany
him in connection with all travel and entertainment undertaken for
the benefit of the Company, and the Company shall promptly
reimburse Executive for all travel, hotel, entertainment or other
related expenses incurred for Executive's spouse, under the same
terms and conditions as set forth above, it being acknowledged that
Executive's spouse will render valuable services in meeting and
entertaining business associates and their spouses and that
Executive's employment will be facilitated by the spouse's
performance of such functions. The Company acknowledges and agrees
that Executive (and spouse, if applicable) shall be entitled to
first class travel and hotel accommodations while traveling on the
Company's behalf.
7. Term of Employment. The term of employment hereunder
shall be for a period of three (3) years, commencing as of December
11, 1997 and terminating on December 11, 2000 (the "Expiration
Date"). Executive's employment with the Company pursuant to this
Agreement and the term of this Agreement shall terminate upon the
occurrence of any of the following events:
(a) The death of Executive;
(b) Executive voluntarily leaves the employ of the
Company, with or without the consent of the Company, and without
Good Reason;
(c) At the election of the Company in its sole
discretion upon the Incapacity of Executive;
(d) The Company terminates this Agreement for
Cause;
(e) The Company terminates this Agreement for any
reason other than as set forth in Sections 7(a), 7(c) or 7(d)
hereof or Executive terminates this Agreement for Good Reason; or
(f) Executive elects to terminate this Agreement
within 120 days of a Change of Control pursuant to Section 9,
below.
8. Compensation Upon Termination; Severance
(a) In the event this Agreement is terminated under
Section 7 hereof, the Company shall be obligated to pay or provide
to Executive (or his legal representatives, as the case may be)
under this Agreement the following and only the following:
(i) Termination For Cause or Voluntarily by
Executive Other Than for Good Reason. If during the term of this
Agreement, the Agreement is terminated pursuant to Sections 7(b) or
7(d), then the Company shall pay to the Executive as soon as
practicable, but in no event later than thirty (30) days after the
date of such termination, the Base Salary due Executive under
Section 4 hereof, up to the date of termination, along with all
benefits due Executive under Section 5 through the date of
termination, such benefits to be paid in the ordinary course and
with respect to the benefits due under Section 5(c) pro rated as
applicable. Executive shall not be entitled to any other payments
under this Agreement.
(ii) Termination After Change of Control.
(A) If Executive elects to terminate this Agreement within 120
days of a Change of Control pursuant to Section 9, below, Executive
shall be entitled to receive as his
sole benefits under this Agreement the following: (y) the benefits
set forth in Section 8(a)(i) above and (z) a lump sum payment equal
to 2.99 times Executive's Annualized Compensation (the "Change of
Control Voluntary Payments"). (B) If this Agreement is terminated
pursuant to Section 7(e) above, after 120 days of a Change of
Control but within 365 days of a Change of Control, Executive shall
be entitled to payments equal to the Severance Benefits determined
under Section 8( a)(iv), below (the "Agreement Payments).
(C) If this Agreement is terminated pursuant to Section 7(e)
above, within 120 days of a Change of Control, Executive shall be
entitled to the greater of the Change of Control Voluntary Payment
determined under Section 8(a)(ii)(A) or the Agreement Payments
determined under Section 8(a)(ii)(B).
(iii) Termination for Death or Incapacity. If
this Agreement terminates pursuant to Section 7(a) or 7(c) above,
the Company shall pay to the Executive, the beneficiaries
designated in writing by the Executive, or the Executive's estate,
as applicable, as soon as practicable, but in no event later than
thirty (30) days of the date of such termination, an amount equal
to the sum of (A) the Base Salary due Executive under Section 4
hereof, up to the date of termination, along with all benefits due
Executive under Section 5 through the date of termination, such
benefits to be paid in the ordinary course and with respect to the
benefits due under Section 5(b) pro rated as applicable; plus (B)
an amount equal to ninety (90) days' Base Salary prorated based on
Executive's then annual Base Salary under Section 4 hereof.
Additionally, if the termination is on account of Incapacity
arising under Section 7(c) hereof, the Company shall provide for
the continuation of any health and life insurance benefits until
the Expiration Date, unless Executive commences employment
elsewhere prior to the Expiration Date in which case the health and
life insurance benefits will be reduced or eliminated, as the case
may be, to take into account the health and life insurance benefits
available to the Executive by the new employer.
(iv) Termination Without Cause or for Good
Reason. Subject to the provisions of Section 8(b) below and
subject to reduction to take into account any payments pursuant to
(1) below, if prior to the Expiration Date of this Agreement or its
termination pursuant to Sections 7(a)- 7(d) or 7(f) hereof, this
Agreement is terminated pursuant to Section 7(e) above, the
Executive shall receive within five (5) business days of the date
of satisfaction of the provisions of Section 8(b) the following:
(y) an amount equal to the balance of Executive's then annual Base
Salary which would have been paid over the remainder of the term of
this Agreement pursuant to Section 4 hereof, and (z) the
"Expiration Payment", as such term is defined in subsection 8(c)
below, calculated as of the date of termination. Executive shall:
(1)solely in the event the conditions of Section 8(b) have not been
satisfied, receive his current Base Salary through the remainder of
the term of this Agreement and the Expiration Payment calculated as
of the date of termination. All payments pursuant to this
subsection 8(a)(iv)(1) shall be made when such payments would have
otherwise been due under this Agreement; (2) immediately be vested
in all stock options not otherwise already vested; and (3) continue
to receive all benefits or additional amounts described in Section
5 hereof, for the period between the termination date and the
Expiration Date. The benefits or additional amounts described in
Section 5 shall be paid or provided to Executive as and when such
amounts or benefits would have been paid to Executive had such
termination not occurred until the first to occur of:(x) the
Expiration Date, (y) Executive's Death, or (z) until such time as
Executive obtains other employment which offers such benefits to
its employees of similar stature with the Executive and Executive
is eligible to receive such benefits. In the event any benefit
obtained or available to the Executive in his new employment is
less than such benefit being provided pursuant to Section 5, the
Company will provide for or pay the monetary costs of such
incremental benefits. In the event such benefits or additional
amounts cannot be provided under the terms of any plan, the
monetary value of substitute coverage for any such additional
amounts or benefits shall be paid in lieu of continued
participation under such plan. All of the payments or benefits to
be received by the Executive after the termination of this
Agreement pursuant to this Section 8(a)(iv) hereinafter referred to
as the "Severance Benefits".
THE SEVERANCE BENEFITS PROVIDED IN THIS SECTION 8(a)(iv)
SHALL BE PAID TO EXECUTIVE AS LIQUIDATED DAMAGES FOR ALL CLAIMS
EXECUTIVE WOULD HAVE WITH RESPECT TO (i) THE TERMINATION OF THIS
AGREEMENT,(ii) ANY COMPENSATION DUE EXECUTIVE FROM THE COMPANY
PURSUANT TO THIS AGREEMENT AND (iii) THE INJURY TO EXECUTIVE'S
REPUTATION AS A RESULT OF SUCH TERMINATION. IN CONNECTION
THEREWITH, THE PARTIES AGREE THAT IT WOULD BE IMPRACTICAL AND
EXTREMELY DIFFICULT TO FIX THE ACTUAL AMOUNT OF SUCH DAMAGES AND
CLAIMS DUE EXECUTIVE WITH RESPECT THERETO AND THAT SUCH SEVERANCE
BENEFITS SHALL CONSTITUTE A REALISTIC AND REASONABLE VALUATION OF
THE DAMAGES WITH RESPECT TO EXECUTIVE'S CLAIMS. FURTHERMORE,
EXECUTIVE SHALL NOT BE REQUIRED TO MITIGATE HIS DAMAGES BY SEEKING
OTHER EMPLOYMENT OR OTHERWISE, AS THE DAMAGES RESULTING TO HIM AS A
CONSEQUENCE OF THE LOSS OF THE UNIQUE EMPLOYMENT ARRANGEMENT SET
FORTH HEREIN COULD NOT BE MITIGATED BY SEEKING EMPLOYMENT
ELSEWHERE, NOR SHALL ANY MONIES EARNED BY EXECUTIVE IN ANY CAPACITY
AFTER SUCH TERMINATION OR BREACH ACT TO REDUCE SUCH DAMAGES OR THE
AMOUNT OF ANY SEVERANCE BENEFITS TO WHICH EXECUTIVE IS ENTITLED
HEREUNDER.
_______ _______
Initial Initial
(b) Release. As consideration for and a condition
precedent to the Company's obligation to provide the payments
required pursuant to Section 8(a)(iv)(y) and (z) above, on or
before such payment is made to Executive pursuant to Section
8(a)(iv)(y) and (z), Executive shall simultaneously execute and
deliver to the Company a release, in a form acceptable to the
Company and its counsel, of all claims against the Company arising
out of or pursuant to this Agreement or Executive's employment
with the Company pursuant hereto, including any claims for
Severance Benefits or compensation hereunder, except for claims
pursuant to Sections 12 and 14 hereof.
(c) Severance. In the event the Agreement has not
previously been terminated and Executive does not receive, within
90 days before the Expiration Date, an offer for a new employment
agreement (i) containing terms and provisions no less favorable
(with respect to provisions for term of employment, benefits,
bonuses, and other material terms) than those set forth in this
Agreement (as such may be modified from time to time) and (ii)
providing for an annual base salary of no less than Executive's
then existing annual Base Salary, and as a result of the absence of
such offer Executive leaves the employ of the Company on or within
90 days before the Expiration Date, the Company shall pay to
Executive, severance pay in a lump sum amount equal to Executive's
then annual Base Salary as of the Expiration Date (the "Expiration
Payment").
(d) Deduction Limitation. Anything in this
Agreement to the contrary notwithstanding, in the event the
Company's independent public accountants (the "Accounting Firm")
shall determine that receipt of all payments due Executive under
Section 7 of this Agreement after a termination of employment would
cause any portion of such payments to be nondeductible by Company
because of Code Section 162(m) (the "Nondeductible Amount"),
payment of such Nondeductible Amount shall at the Company's
discretion be deferred until the later of the fifth day of January
of the year following the year in which occurs the date of
termination, or the date such payment is otherwise required under
Section 8 (without regard to this Section 8(d)) (the "Payment
Date"). In the event this Section 8(d) results in a deferral in
excess of 60 days after the Payment Date, the Nondeductible Amount
subject to deferral shall bear interest at the Applicable Federal
Rate (determined under Code Section 7872(f)(2) on the date of
termination) from the Payment Date to the date payment is actually
received by Executive.
9. Termination upon Change of Control. If, prior to the
termination of this Agreement, there shall occur any Change of
Control, Executive, in his sole discretion, may elect to terminate
this Agreement within one hundred twenty (120) days after such
Change of Control by giving written notice of such election to the
Company.
10. Covenant Not to Compete.
(a) Executive covenants and agrees that, in the event
this Agreement terminates prior to the Expiration Date of this
Agreement pursuant to either: (i) Section 7(d) and both of the
following occur: (y) Executive accepts a position with a
Competitor, as hereinafter defined, within 150 days after the
termination date of this Agreement and (z) Executive engaged in
discussion(s) regarding employment with such Competitor within 90
days prior to the termination date of the Agreement or (ii) Section
7(b) without Good Reason; then and in such event Executive will
not, directly or indirectly, own, manage, operate, join, control or
become employed by, or render any services of any advisory nature
or otherwise, or participate in the ownership, management,
operation or control of, business which competes or attempting to
compete with any of the business of the Company or any of its
affiliates (a "Competitor"); provided, however, nothing contained
herein shall prohibit Employee from directly or indirectly, owning,
managing, operating, joining, controlling or become employed by, or
rendering any services of any advisory nature or otherwise, or
participating in the ownership, management, operation or control of
a division, subsidiary or affiliate of any Competitor which does
not at the time of and for the duration of its employment of
Employee compete with or has plans to compete with the any of the
businesses of the Company in the geographic locations in which the
Company then does business or actively plans to do business. In
addition, the in the event of a termination of Executive's
employment with the Company pursuant to Sections 7(c), 7(e) or
7(f), this provision shall be rendered null and void.
(b) Notwithstanding the foregoing, Executive shall not be
prevented from investing his assets in such form or manner as will
not require any services on the part of Executive in the operation
of the affairs of a company in which investments are made, provided
such company is not engaged in a business competitive to the
Company, or if it is in competition with the Company, provided its
stock is publicly traded and Executive owns less than one percent
(1%) of the outstanding stock of that company.
11. Confidentiality. Executive covenants and agrees that
he will not at any time during or after the termination of his
employment by the Company reveal, divulge or make known to any
person, firm or corporation any information, knowledge or data of a
proprietary nature relating to the business of the Company or any
of its affiliates which is not or has not become generally known or
public. Executive shall hold, in a fiduciary capacity, for the
benefit of the Company, all information, knowledge or data of a
proprietary nature, relating to or concerned with, the operations,
customers, developments, sales, business and affairs of the Company
and its affiliates which is not generally known to the public and
which is or was obtained by the Executive during his employment by
the Company. Executive recognizes and acknowledges that all such
information, knowledge or data is a valuable and unique asset of
the Company, and accordingly he will not discuss or divulge any
such information, knowledge or data to any person, firm,
partnership, corporation or organization other than to the Company,
its affiliates, designees, assignees or successors or except as may
otherwise be required by the law, as ordered by a court or other
governmental body of competent jurisdiction, or in connection with
the business and affairs of the Company.
12. Indemnification.
(a) The Company shall indemnify Executive, whether
or not then in office, to the fullest extent provided for in the
Company's Articles of Incorporation or Bylaws, as in effect, or as
may thereafter be amended, modified or revised from time to time
(collectively, "Company's Articles"), or permitted under the law of
Delaware or such other state in which the Company may hereafter be
domiciled, against any and all costs, claims, judgments, fines,
settlements, liabilities, and fees or expenses (including, without
limitation, reasonable attorneys' fees) incurred in connection with
any proceedings (including, without limitation, threatened actions,
suits or investigations) arising out of, or relating to,
Executive's actions or inactions as an officer or employee of the
Company at any point during his employment by or service to the
Company, whether under this Agreement or otherwise ("Executive's
Tenure"), including, but not limited, to all such actions or
inactions arising on or before March 16, 1989. The indemnification
contemplated under this Section 12(a) shall be provided to
Executive unless, at the time indemnification is sought, such
indemnification would be prohibited under the law of Delaware or of
the state in which the Company may then be domiciled; the Company
may rely on the advice of its counsel in determining whether
indemnification is so prohibited.
(b) In the event of any actual or threatened
investigation, administrative proceeding or litigation by any
federal, state or local governmental authority (including agencies
thereof) against the Company or any other officer or employee of
the Company arising from actions taken or events occurring at any
point during Executive's Tenure, in which proceedings Executive is
not a party or threatened to be made a party but which require
Executive's attendance and if, under applicable law, or the rules
or regulations of the particular governmental authority, counsel
for the Company cannot additionally represent Executive upon the
provision of proper substantiation, or such simultaneous
representation would not be permitted under the applicable canons
of ethics governing attorneys-at-law, then: (i) Executive shall
have the right to retain such personal legal counsel, accounting
advisors and experts as may be reasonably necessary in connection
with such attendance, (ii) the Company shall promptly reimburse
Executive, whether or not then in office, for all reasonable
expenses incurred by him in retaining the above counselors,
advisors and experts and (iii)if Executive is no longer employed by
the Company at the time Executive's attendance is required at
proceeding contemplated by this Section 12(b), then, in all events,
and in addition to the reimbursement described in (ii) above, the
Company shall pay to Executive a stipend in the amount of Five
Hundred Dollars ($500) per day for each day or any portion thereof
during which Executive is in attendance and shall reimburse
Executive for all reasonable travel, hotel and living expenses
incurred by him in connection with such attendance.
(c) Any reimbursement or indemnification under this
Section 12 shall be made no later than 10 days after receipt by the
Company of the written request of Executive, together with, with
respect to expenses incurred, vouchers, receipts or other
reasonable substantiation.
(d) If Executive is entitled under any provision of
this Section 12 to indemnification by the Company for some or a
portion of the expenses, judgments, fines, or penalties actually
and reasonably incurred by him in the investigation, defense,
appeal or settlement of any action, suit or other proceeding, but
not, however, for the total amount thereof, the Company shall
nevertheless indemnify Executive for the portion of such expenses,
judgments, fines or penalties to which Executive is entitled.
(e) The indemnification provided under this Section
12 shall not be deemed exclusive of any other rights to which
Executive may be entitled under the Company's Articles, any
resolution of the Board of Directors, any agreement, any vote of
shareholders or disinterested directors, insurance contracts, the
law of Delaware or any other state in which the Company may
hereafter be domiciled, or otherwise, both as to actions or
inactions in Executive's official capacity or in any other capacity
at any point during Executive's Tenure, even though he may have
ceased to serve as an officer or employee of the Company at the
time of any action, suit or other proceeding. Amounts payable as
indemnification under this Section 12 shall be reduced by the
amount of any other sums received by Executive for the same purpose
pursuant to any of such other provisions.
(f) In the event of any change, after the date of
this Agreement, in any applicable law, statute, or rule which
expands the right of a corporation domiciled in Delaware or the
state in which the Company may hereafter be domiciled to indemnify
an officer or employee, such change (to the extent permitted by
applicable law) shall be automatically incorporated herein, without
further action of the parties, to the extent that such change
affects Executive's rights and the Company's obligations under this
Section 12.
In the event of any change, after the date of this
Agreement, in any applicable law, statute, or rule which narrows or
restricts the right of a corporation domiciled in Delaware or the
state in which the Company may hereafter be domiciled to indemnify
an officer or employee, such change (to the extent permitted by
applicable law) shall have no effect on the provisions of, or the
parties' respective rights and obligations under this Section 12.
In the event of an amendment or other revision, after the date of
this Agreement, to the Company's Articles which expands the right
of the Company to indemnify an officer or employee, such change
shall be automatically incorporated into this Agreement, without
further action of the parties, to the extent that such change
relates to Executive's rights and the Company's obligations under
this Section 12.
In the event of an amendment or other revision, after
the date of this Agreement, to the Company's Articles which narrows
or restricts the right of the Company to indemnify an officer or
employee, such change shall have no effect on the provisions of, or
the parties' respective rights and obligations under, this Section
12.
The Company agrees to give Executive prompt notice of
any amendment to or modification of the Company's Articles which
relate to its ability to provide the indemnification contemplated
under this Section 12.
(g) Notwithstanding any other provision herein, the
Company shall not be obligated pursuant to the terms of this
Section 12:
(i) to indemnify or advance expenses to
Executive with respect to proceedings or claims (except counter-
claims or cross claims) initiated or brought voluntarily by
Executive and not by way of defense, except with respect to
proceedings brought to establish or enforce a right under this
Agreement or a right to indemnification under the Company's
Articles, or any applicable law (including, without limitation, the
requirements of the Delaware General Corporation Law), but such
indemnification or advancement of expenses may be provided by the
Company in specific cases if the Board of Directors finds it to be
appropriate; or
(ii) to indemnify Executive for any expenses
incurred by him with respect to any claim, issue or matter, raised
in connection with a proceeding instituted by Executive to enforce
or interpret the provisions of this Section 12, if a court of
competent jurisdiction renders a final judgment determining that
the material assertions made by Executive with respect to such
claim, issue or matter were not made in good faith or were
frivolous; or
(iii) to indemnify Executive for expenses or
liabilities of any type whatsoever (including, but not limited to,
judgments, fines, ERISA excise taxes or penalties, and amounts paid
in settlement) which have been paid directly to Executive by an
insurance carrier under a policy of directors' and officers'
liability insurance maintained by the Company; or
(iv) to indemnify Executive for expenses or liabilities arising
from the purchase and sale by Executive of securities of the
Company in violation of federal or state securities laws; or
(v) to indemnify Executive for liabilities or with respect to
proceedings or claims relating to actions not taken in his capacity
as an officer or employee or on behalf of the Company, including,
without limitation, actions taken in his individual capacity as a
shareholder.
13. Equitable Remedies. In the event of a breach or
threatened breach by Executive of any of his obligations under
Sections 10 and 11 hereof, Executive acknowledges that the Company
may not have an adequate remedy at law and therefore it is mutually
agreed between Executive and the Company that, in addition to any
other remedies at law or in equity which the Company may have, the
Company shall be entitled to seek in a court of law and/or equity a
temporary and/or permanent injunction restraining Executive from
any continuing violation or breach of this Agreement.
14. Advance of Fees and Expenses. Subject to and
conditioned upon the Executive executing a promissory note, in form
and substance acceptable to the Company's counsel, pursuant to
which the Executive agrees to reimburse the Company if required by
applicable law, the Company shall advance to Executive to the
maximum extent provided for in the Company's Articles or permitted
by the law of Delaware or such other state in which the Company may
hereafter be domiciled, any fees or expenses which are included as
indemnifiable fees or expenses pursuant to Sections 12(a) above
(including, without limitation, expenses of investigations,
judicial or administrative proceedings or appeals, amounts paid in
settlement by or on behalf of Executive, and legal, accounting or
other professional fees and disbursements) which may be incurred by
Executive.
Any advances contemplated under this Section shall be made
to Executive unless, at the time the advance is requested, such
advance would be prohibited under the law of Delaware or the state
in which the Company may then be domiciled; the Company may rely on
the advice of its counsel in determining whether an advance is so
prohibited.
15. Effective Date. This Agreement shall be deemed to be
effective as of the date hereof.
16. Miscellaneous.
(a) This Agreement shall be binding upon and inure
to the benefit of the Company and any successor of the Company.
This Agreement shall not be terminated by the voluntary or
involuntary dissolution of the Company or by any merger,
reorganization or other transaction in which the Company is not the
surviving or resulting corporation or upon any transfer of all or
substantially all of the assets of Company in the event of any such
merger, or transfer of assets. The provisions of this Agreement
shall be binding upon and shall inure to the benefit of the
surviving business entity or the business entity to which such
assets shall be transferred in the same manner and to the same
extent that the Company would be required to perform it if no such
transaction had taken place.
Neither this Agreement nor any rights arising
hereunder may be assigned or pledged by Executive. Executive's
rights to indemnification under Section 12 hereof, shall continue,
despite the fact that Executive may cease to be employed by the
Company, and shall survive the termination of this Agreement
regardless of cause. This Agreement shall inure to the benefit of
and be enforceable by Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
(b) Except as otherwise provided by law or
elsewhere herein, Executive shall be entitled to all benefits as
set forth herein notwithstanding the occurrence of the following
events:
(i) any act of force majeure which
materially and adversely affects the Company's business and
operations, including but not limited to, the Company having
sustained a material loss, whether or not insured, by reason of
fire, earthquake, flood, epidemic, explosion, accident, calamity or
other act of God;
(ii) any strike or labor dispute or court or
government action, order or decree;
(iii) a banking moratorium having been
declared by federal or state authorities;
(iv) an outbreak of major armed conflict,
blockade, embargo, or other international hostilities or restraints
or orders of civic, civil defense, or military authorities, or
other national or international calamity having occurred;
(v) any act of public enemy, riot or civil
disturbance or threat thereof; or
(vi) a pending or threatened legal or
governmental proceeding or action relating generally to the
Company's business, or a notification having been received by the
Company of the threat of any such proceeding or action, which could
materially adversely affect the Company.
(c) This Agreement may not be modified, altered or
amended except by an instrument in writing signed by the parties
hereto.
(d) This Agreement shall be construed in accordance
with the laws of the State of California except to the extent that
any provision of Sections 12 or 14 hereof may relate to an
interpretation of the corporation laws of Delaware, the state in
which the Company is domiciled, in which case such provision shall
be construed in accordance with the corporation laws of that state.
(e) Nothing in the Agreement is intended to require
or shall be construed as requiring the Company to do or fail to do
any act in violation of applicable law. The Company's inability
pursuant to court order to perform its obligations under this the
Agreement shall not constitute a breach of this Agreement. If any
provision of this Agreement is invalid or enforceable, the
remainder of this Agreement shall nevertheless remain in full force
and effect. If any provision is held invalid or unenforceable with
respect to particular circumstances, it shall, nevertheless, remain
in full force and effect in all other circumstances.
(f) The parties hereto agree that any and all
disputes hereunder shall be submitted to a court located in Los
Angeles, California and in this regard, the parties agree that they
shall consent to personal jurisdiction in any state and/or the
United States District Court for the Central District of California
sitting in Los Angeles, California and agree to venue in the State
of California (an "Action"). All costs and expenses (including
attorneys' fees) incurred by the parties in connection with any
Action arising under this Agreement, shall be apportioned between
the parties by such court based upon such court's determination of
the merits of their respective positions.
(g) Any notice to the Company required or permitted
hereunder shall be given in writing to the Company, either by
personal service, telex, telecopier or, if by mail, by registered
or certified mail return receipt requested, postage prepaid, duly
addressed to the Secretary of the Company at its then principal
place of business with a copy to Xxxxx X. Xxxxxx, Esq., Jeffer,
Mangels, Xxxxxx & Marmaro LLP, 0000 Xxxxxx xx xxx Xxxxx, 00xx
Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000. Any such notice to Executive
shall be given in a like manner, and if mailed shall be addressed
to Executive at Executive's home, as set forth in the Company's
records, with a copy to J. Xxxxxxx Xxxxxxxx, Esq., Flanagan, Booth,
Xxxxx & Moses 0000 Xxxxx Xxxxx Xxxxxxxxx, Xxxxxxxx, XX. 00000.
For the purpose of determining compliance with any time limit
herein, a notice shall be deemed given on the fifth business day
following the postmarked date, if mailed, or the date of delivery
if personally delivered or delivered by telex or telecopier.
(h) A waiver by either party of any term or
condition of this Agreement or any breach thereof, in any one
instance, shall not be deemed or construed to be a waiver of such
term or condition or of any subsequent breach thereof.
(i) The paragraph and subparagraph headings
contained in this Agreement are solely for convenience and shall
not be considered in its interpretation.
(j) This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first written above.
COMPANY:
MAXICARE HEALTH PLANS, INC.,
a Delaware corporation
By:_________________________
Xxxxx X. Xxxxxxx
Chairman, President and
Chief Executive Officer
MAXICARE HEALTH PLANS, INC.,
a Delaware corporation
By:_________________________
Xxxx Xxxxx
Secretary
EXECUTIVE:
By:_________________________
Xxxxxxx X. Link
EXHIBIT A
Xxxxxx X. Xxxxxxxx
Xxxxxxxx Xxxxxxxxxx
Xxxxxx Xxxxx, Jr.
Xxxxxx Xxxxxxxx
Xx. Xxxxxxx X. Xxxxx
Xxxx X. Xxxxx
Xxxxx X. Xxxxxxx
