EXHIBIT 10.3
EMPLOYMENT AGREEMENT
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This Employment Agreement dated as of November 1, 2001, between
National Home Health Care Corp., a Delaware corporation having an address at 000
Xxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the "Company"), and Xxxxxx X.
Xxxxxx, an individual having an address at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxx
Xxxx 00000 ("Employee").
W I T N E S S E T H :
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WHEREAS, the Company desires that Employee be employed by it and
render services to it, and Employee is willing to be so employed and to render
such services to the Company, all upon the terms and subject to the conditions
contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Employment. Subject to and upon the terms and conditions contained
in this Agreement, the Company hereby agrees to employ Employee and Employee
agrees to enter the employ of the Company, for the period set forth in Paragraph
2 hereof, to render the services to the Company, its affiliates and/or
subsidiaries described in Paragraph 3 hereof.
2. Term. Employee's term of employment under this Agreement shall
commence on the date hereof (the "Commencement Date") and shall continue for a
period through and including the fifth anniversary of the Commencement Date (the
"Employment Term") unless extended in writing by both parties or earlier
terminated pursuant to the terms and conditions set forth herein.
3. Duties. (a) Employee shall be employed as the Company's Executive
Vice President of Finance, Chief Financial Officer and Treasurer. It is agreed
that Employee shall perform his services in the Company's Scarsdale, New York
facilities, or any other facilities mutually agreeable to the parties. The
rights and duties of Employee shall not in any way be curtailed by the Company
without his consent nor shall he be deprived of the dignity ordinarily
associated with his offices.
(b) Employee agrees to abide by all By-laws and applicable policies
of the Company promulgated from time to time by the Board of Directors of the
Company, including without limitation the Business Policies of the Company
annexed hereto as Annex A.
4. Exclusive Services and Best Efforts. Employee shall devote all of
his working time, attention, best efforts and ability during regular business
hours exclusively to the service of the Company, its affiliates and subsidiaries
during the term of this Agreement.
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5. Compensation. As compensation for his services and covenants
hereunder, the Company shall pay Employee the following:
(a) Base Salary. The Company shall pay Employee a minimum base
salary ("Salary") of $175,000 per year. The Salary shall be subject to review
and adjustment on an annual basis beginning November 1, 2002 (if this contract
is then in effect), or, at the Company's discretion, on such earlier date as the
Company may designate; provided, however, that in no event shall Employee's
Salary be adjusted below the Salary designated herein.
(b) Bonus Compensation. The Company shall pay Employee annual bonus
compensation ("Bonus Compensation") equal to one percent of the amount by which
the income from operations in any fiscal year during the Employment Term
(determined in accordance with general accepted accounting principles
consistently applied) exceeds $3,300,000. The foregoing Bonus Compensation shall
be paid by the Company within thirty (30) days after completion of the audited
financial results of the Company for the applicable fiscal year.
(c) Options. The Company may grant to Employee from time to time
options to purchase shares of the Company's common stock pursuant to the terms
of any of the Company's stock option plans and any related stock option
agreement required to be executed in connection therewith. Such options shall
have such terms and conditions as shall be determined by the Board of Directors.
6. Business Expenses. Employee shall be reimbursed for, and entitled
to advances (subject to repayment to the Company if not actually incurred by
Employee) with respect to, those business expenses incurred by him which are
reasonable and necessary for Employee to perform his duties under this Agreement
in accordance with policies established from time to time by the Company.
7. Employee Benefits. (a) During the Employment Term, Employee shall
be entitled to such insurance, disability and health and medical benefits and be
entitled to participate in such retirement plans or programs as generally made
available to executive officers of the Company pursuant to the policies of the
Company; provided that Employee shall be required to comply with the conditions
attendant to coverage by such plans and shall comply with and be entitled to
benefits only in accordance with the terms and conditions of such plans. In
addition, as soon as practicable following execution of this Agreement, the
Company shall establish a non-qualified deferred compensation plan (the
"Deferred Compensation Plan") under which Employee's account shall be credited
with $12,000 no later than October 31st of each fiscal year during the next ten
fiscal years beginning with 2002, provided that the Employee is employed by the
Company on such October 31st. If Employee's employment with the Company
terminates prior to October 31, 2011 for reasons other than Employee's death, as
of the date of such termination, Employee's benefit under the Deferred
Compensation Plan and all amounts credited to Employee's account thereunder
(including any earnings thereon) shall be forfeited. Employee shall be entitled
to three weeks paid vacation each year during the Employment Term
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at such times as does not, in the reasonable opinion of the Board of Directors,
interfere with Employee's performance of his duties hereunder. The Company may
withhold from any benefits payable to Employee all federal, state, local and
other taxes and amounts as shall be permitted or required pursuant to law, rule
or regulation. In addition to the foregoing, the Company shall pay to Employee
the full amount of Employee's annual contribution under the Company's Premium
Conversion Plan, payable in accordance with the Company's normal payment
practices.
(b) Employee shall be entitled to receive the sum of $550 per month
as an automobile allowance provided at the expense of the Company from the
Commencement Date and during the Employment Term, which allowance shall be
exclusive of all expenses related to car-phone, insurance, repairs and
maintenance for such automobile, which expenses also shall be the responsibility
of the Company. Employee agrees not to lease any automobile covered by such
allowance for a term longer than two years. Notwithstanding the foregoing, the
Company may, at its option, elect to provide Employee an automobile of the make,
model and year mutually agreeable to the Company and Employee, all costs of
which associated with insurance, repairs, maintenance and other expenses shall
be the responsibility of the Company, in lieu of the above described automobile
allowances, all as may be mutually agreed between Employee and the Company.
Employee acknowledges that some or all of the foregoing may be deemed
compensation to him.
8. Death and Disability. (a) The Employment Term shall terminate on
the date of Employee's death, in which event Employee's Salary, reimbursable
expenses and benefits owing to Employee through the date of Employee's death
shall be paid to his estate. Employee's estate will not be entitled to any other
compensation upon termination of this Agreement pursuant to this Paragraph 8(a).
(b) If, during the Employment Term, in the opinion of a duly
licensed physician selected by Employee and reasonably acceptable to the
Company, Employee, because of physical or mental illness or incapacity, shall
become substantially unable to perform the duties and services required of him
under this Agreement for a period of six consecutive months the Company may,
upon at least twenty (20) days' prior written notice given at any time after the
expiration of such six-month period to Employee of its intention to do so,
terminate this Agreement as of such date as may be set forth in the notice. In
case of such termination, Employee shall be entitled to receive his Salary,
reimbursable expenses and benefits owing to Employee through the date of
termination. Employee will not be entitled to any other compensation upon
termination of this Agreement pursuant to this Paragraph 8(b).
9. Termination. (a) The Company may terminate the employment of
Employee for Cause (as hereinafter defined). Upon such termination, the Company
shall be released from any and all further obligations under this Agreement,
except that the Company shall be obligated to pay Employee his Salary,
reimbursable expenses and benefits owing to Employee through the day on which
Employee is terminated. Employee will not be entitled to any other compensation
upon termination of this Agreement pursuant to this Paragraph 9(a).
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(b) As used herein, the term "Cause" shall mean: (i) the willful
failure of Employee to perform his duties pursuant to Paragraph 3 hereof, which
failure is not cured by Employee within thirty days following written notice
thereof from the Company; (ii) any other material breach of this Agreement by
Employee, including any of the material representations or warranties made by
Employee; (iii) any act, or failure to act, by Employee in bad faith or
intentionally to the detriment of the Company; (iv) the commission by Employee
of an act involving moral turpitude, dishonesty, theft, unethical business
conduct, or any other conduct which significantly impairs the reputation of, or
xxxxx, the Company, its subsidiaries or affiliates; or (v) any
misrepresentation, concealment or omission by Employee of any material fact in
seeking employment hereunder.
(c) Notwithstanding anything to the contrary herein, including
without limitation Paragraph 2 hereof, the Company may terminate the employment
of Employee without Cause. Upon such termination, the Company shall be released
from any and all further obligations under this Agreement, except that the
Company shall be obligated to pay Employee his Salary, any amount payable
pursuant to Paragraph 10 hereof, reimbursable expenses and benefits owing to
Employee through the six-month anniversary of the day on which Employee is so
terminated. Employee will not be entitled to any other compensation upon
termination of this Agreement.
10. Change in Control. In the event of a Change in Control, as defined
below, of the Company during the Employment Term, the Company shall pay to
Employee a lump-sum amount equal to one-half of Employee's Salary at the time of
the occurrence of such Change in Control, which amount shall be paid within ten
days after such occurrence. The foregoing payment shall be in addition to and
shall not reduce or in any way affect the terms of payment of any amounts to
which Employee shall be entitled hereunder. The Company hereby agrees to obtain
an agreement from any successor to assume and agree to honor and perform this
Agreement. For purposes of this Agreement, a "Change in Control" shall have
occurred if:
(i) any "person", as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Company, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company, Xxxxxxxxx X. Xxxxxxx or Xx. Xxxxxxx
Xxxxxx or any of their respective immediate family members or affiliates (as
such terms is defined in Rule 405 under the Securities Act of 1933) or any
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company),
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
30% or more of the combined voting power of the Company's then outstanding
securities;
(ii) during any period of not more than two consecutive years
(not including any period prior to the execution of this Agreement), individuals
who at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a
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transaction described in clause (a), (c) or (d) of this Section) whose election
by the Board or nomination for election by the Company's shareholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority thereof;
(iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (A) a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than 30% of the combined voting
power of the Company's then outstanding securities; or
(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
11. Disclosure of Information and Restrictive Covenant. Employee
acknowledges that, by his employment, he has been and will be in a confidential
relationship with the Company and will have access to confidential information
and trade secrets of the Company, its subsidiaries and affiliates. Confidential
information and trade secrets include, but are not limited to, customer,
supplier and client lists, price lists, marketing, distribution and sales
strategies and procedures, operational and equipment techniques, business plans
and systems, quality control procedures and systems, special projects and
technological research, including projects, research and reports for any entity
or client or any project, research, report or the like concerning sales or
manufacturing or new technology, employee compensation plans and any other
information relating thereto, and any other records, files, drawings,
inventions, discoveries, applications, processes, data and information
concerning the business of the Company which are not in the public domain.
Employee agrees that in consideration of the execution of this Agreement by the
Company, except in any way with respect to foreign affiliates of the Company as
of the date hereof:
(a) Employee will not, during the term of this Agreement or at any
time thereafter, use, or disclose to any third party, trade secrets or
confidential information of the Company, including, but not limited to,
confidential information or trade secrets belonging or relating to the Company,
its subsidiaries, affiliates, customers and clients or proprietary processes or
procedures of the Company, its subsidiaries, affiliates, customers and clients.
Proprietary processes and procedures shall include, but shall not be limited to,
all information which is known or intended to be known only to employees of the
Company, its respective
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subsidiaries and affiliates or others in a confidential relationship with the
Company or its respective subsidiaries and affiliates which relates to business
matters.
(b) Employee will not, during the term of this Agreement and,
unless Employee's employment hereunder is terminated (i) by Employee on the
basis that the Company has breached any provision of this Agreement or there has
been the occurrence of any of the circumstances set forth in Paragraph 11(g)
below or (ii) by the Company without Cause, for a period of one (1) year
thereafter, directly or indirectly, under any circumstance other than at the
direction and for the benefit of the Company, engage in or participate in any
business activity, including, but not limited to, acting as a director, officer,
employee, agent, independent contractor, partner, consultant, licensor or
licensee, franchisor or franchisee, proprietor, syndicate member, shareholder or
creditor or with a person having any other relationship with any other business,
company, firm occupation or business activity, in any geographic area within the
United States that is, directly or indirectly, competitive with any business
conducted by the Company or any of its subsidiaries or affiliates during the
term of this Agreement or thereafter. Should Employee own 5% or less of the
issued and outstanding shares of a class of securities of a corporation the
securities of which are traded on a national securities exchange or in the
over-the-counter market, such ownership shall not cause Employee to be deemed a
shareholder under this Paragraph 11(b).
(c) Employee will not, during the term of this Agreement and for a
period of one (1) year thereafter, on his behalf or on behalf of any other
business enterprise, directly or indirectly, under any circumstance other than
at the direction and for the benefit of the Company, solicit or induce any
creditor, customer, supplier, officer, employee or agent of the Company or any
of its subsidiaries or affiliates to sever its relationship with or leave the
employ of any of such entities.
(d) If Employee's employment is terminated (constructively or
otherwise) by the Company for any reason then, in consideration for his
covenants contained in this paragraph 11 and not as severance pay, Employee
shall be entitled to receive, for the year following the date his employment so
terminates, an amount equal to Employee's annual salary at the rate in effect
immediately prior to his cessation of employment with the Company (or, if
greater, at the highest annual salary rate in effect at any time during the
one-year period preceding the date of such termination). Such amounts shall be
in addition to any amount otherwise payable under this Agreement and shall be
paid in equal monthly installments, with the first such installment commencing
on the last day of the month in which Employee's employment so terminates.
(e) This Paragraph 11 and Paragraphs 12, 13 and 14 hereof shall
survive the expiration or termination of this Agreement for any reason.
(f) It is expressly agreed by Employee that the nature and scope of
each of the provisions set forth above in this Paragraph 11 are reasonable and
necessary. If, for any reason, any aspect of the above provisions as it applies
to Employee is determined by a court
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of competent jurisdiction to be unreasonable or unenforceable, the provisions
shall only be modified to the minimum extent required to make the provisions
reasonable and/or enforceable, as the case may be. Employee acknowledges and
agrees that his services are of a unique character and expressly grants to the
Company or any subsidiary, successor or assignee of the Company, the right to
enforce the provisions above through the use of all remedies available at law or
in equity, including, but not limited to, injunctive relief.
(g) The following shall constitute good reason for termination
hereof by Employee, but shall not in any way be deemed to limit any other rights
or remedies of Employee hereunder:
(i) the assignment to Employee of any duties substantially
inconsistent with the duties set forth in Paragraph 3 hereof and with the
position in the Company that Employee held immediately prior to such
termination, or a significant adverse alteration in the nature or status of
Employee's responsibilities or the conditions of such employment from those in
effect immediately prior to such termination;
(ii) a reduction by the Company in Employee's Salary or Bonus
Compensation as in effect on the date hereof or as the same may be increased
from time to time;
(iii) the relocation of the Company's offices at which Employee
is principally employed immediately prior to such termination to a location more
than 10 miles from such location, or the Company requiring Employee to be based
anywhere other than the Company's offices at such location except for required
travel on the Company's business to an extent substantially consistent with
Employee's business travel obligations immediately prior to such termination;
(iv) the failure by the Company to pay to Employee any portion
of Employee's current compensation or to pay to Employee any portion of an
installment of deferred compensation under any deferred compensation program of
the Company, now or hereafter in existence, within seven (7) days of the date
such compensation is due;
(v) the failure by the Company to continue to provide Employee
with benefits substantially similar to those enjoyed by Employee under any of
the Company's life insurance, medical, accident, disability or other employee
benefit or compensation plans in which Employee was participating immediately
prior to such termination, the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits, or the failure by
the Company to provide Employee with the number of paid vacation days to which
Employee is entitled on the basis of years of service with the Company in
accordance with the Company's normal vacation policy in effect at the time of
such termination; or
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(vi) a breach by the Company of any provision of this Agreement
not embraced in the foregoing clauses (i)-(v).
12. Company Property. (a) Any patents, inventions, discoveries,
applications or processes, designs, devised, planned, applied, created,
discovered or invented by Employee in the course of Employee's employment under
this Agreement and which pertain to any aspect of the Company's or its
respective subsidiaries' or affiliates' business shall be the sole and absolute
property of the Company, and Employee shall make prompt report thereof to the
Company and promptly execute any and all documents reasonably requested to
assure the Company the full and complete ownership thereof.
(b) All records, files, lists, including computer generated lists,
drawings, documents, equipment and similar items relating to the Company's
business which Employee shall prepare or receive from the Company shall remain
the Company's sole and exclusive property. Upon termination of this Agreement,
Employee shall promptly return to the Company all property of the Company in his
possession. Employee further represents that he will not copy or cause to be
copied, print out or cause to be printed out any software, documents or other
materials originating with or belonging to the Company. Employee additionally
represents that, upon termination of his employment with the Company, he will
not retain in his possession any such software, documents or other materials.
13. Remedy. It is mutually understood and agreed that Employee's
services are special, unique, unusual, extraordinary and of an intellectual
character giving them a peculiar value, the loss of which cannot be reasonably
or adequately compensated in damages in an action at law. Accordingly, in the
event of any breach of this Agreement by Employee, including, but not limited
to, the breach of the non-disclosure, non-solicitation and non-compete clauses
under Paragraph 11 hereof, the Company shall be entitled to equitable relief by
way of injunction or otherwise in addition to damages the Company may be
entitled to recover. In addition, the Company shall be entitled to reimbursement
from Employee, upon request, of any and all reasonable attorneys' fees and
expenses incurred by it in enforcing any term or provision of this Agreement.
14. Representations and Warranties of Employee. (a) In order to induce
the Company to enter into this Agreement, Employee hereby represents and
warrants to the Company as follows: (i) Employee has the legal capacity and
unrestricted right to execute and deliver this Agreement and to perform all of
his obligations hereunder; (ii) the execution and delivery of this Agreement by
Employee and the performance of his obligations hereunder will not violate or be
in conflict with any fiduciary or other duty, instrument, agreement, document,
arrangement or other understanding to which Employee is a party or by which he
is or may be bound or subject; and (iii) Employee is not a party to any
instrument, agreement, document, arrangement or other understanding with any
person (other than the Company) requiring or restricting the use or disclosure
of any confidential information or the provision of any employment, consulting
or other services.
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(b) Employee hereby agrees to indemnify and hold harmless the
Company from and against any and all losses, costs, damages and expenses
(including, without limitation, its reasonable attorneys' fees) incurred or
suffered by the Company resulting from any breach by Employee of any of his
representations or warranties set forth in Paragraph 14(a) hereof.
15. Notices. All notices given hereunder shall be in writing and shall
be deemed effectively given when mailed, if sent by registered or certified
mail, return receipt requested, addressed to Employee at his address set forth
on the first page of this Agreement and to the Company at its address set forth
on the first page of this Agreement, Attention: Chairman of the Board, with a
copy to Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP, The Chrysler Building, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxxx, Esq., or
at such address as such party shall have designated by a notice given in
accordance with this Paragraph 15, or when actually received by the party for
whom intended, if sent by any other means.
16. Entire Agreement. This Agreement constitutes the entire
understanding of the parties with respect to its subject matter and no change,
alteration or modification hereof may be made except in writing signed by the
parties hereto. Any prior or other agreements, promises, negotiations or
representations not expressly set forth in this Agreement are of no force or
effect. In furtherance and not in limitation of the foregoing, this Agreement
supersedes any and all prior employment agreements to which Employee and the
Company are parties, including the Employment Agreement dated as of November 1,
1997 between Employee and the Company, all of which prior agreements are hereby
terminated and of no force or effect.
17. Severability. If any provision of this Agreement shall be
unenforceable under any applicable law, then notwithstanding such
unenforceability, the remainder of this Agreement shall continue in full force
and effect.
18. Waivers, Modifications, Etc. No amendment, modification or waiver
of any provision of this Agreement shall be effective unless the same shall be
in writing and signed by each of the parties hereto, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
19. Assignment. Neither this Agreement, nor any of Employee's rights,
powers, duties or obligations hereunder, may be assigned by Employee. This
Agreement shall be binding upon and inure to the benefit of Employee and his
heirs and legal representatives and the Company and its successors and assigns.
Successors of the Company shall include, without limitation, any corporation or
corporations acquiring, directly or indirectly, all or substantially all of the
assets of the Company, whether by merger, consolidation, purchase, lease or
otherwise, and such successor shall thereafter be deemed "the Company" for the
purpose hereof.
20. Applicable Law. This Agreement shall be deemed to have been made,
drafted, negotiated and the transactions contemplated hereby consummated and
fully performed in the State of New York and shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
conflicts of law rules thereof. Nothing contained in
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this Agreement shall be construed so as to require the commission of any act
contrary to law, and whenever there is any conflict between any provision of
this Agreement and any statute, law, ordinance, order or regulation, contrary to
which the parties hereto have no legal right to contract, the latter shall
prevail, but in such event any provision of this Agreement so affected shall be
curtailed and limited only to the extent necessary to bring it within the legal
requirements.
21. Jurisdiction and Venue. It is hereby irrevocably agreed that all
disputes or controversies between the Company and Employee arising out of, in
connection with or relating to this Agreement shall be exclusively heard,
settled and determined by arbitration to be held in the City of New York, County
of New York, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect. The parties also agree that judgment may
be entered on the arbitrator's award by any court having jurisdiction thereof
and the parties consent to the jurisdiction of any court located in the City of
New York, County of New York, for this purpose.
22. Full Understanding. Employee represents and agrees that he fully
understands his right to discuss all aspects of this Agreement with his private
attorney, that to the extent, if any that he desired, he availed himself of this
right, that he has carefully read and fully understands all of the provisions of
this Agreement, that he is competent to execute this Agreement, that his
agreement to execute this Agreement has not been obtained by any duress and that
he freely and voluntarily enters into it, and that he has read this document in
its entirety and fully understands the meaning, intent and consequences of this
document which is that it constitutes an agreement of employment.
23. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
NATIONAL HOME HEALTH CARE CORP.
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: President, Chief Executive
Officer and Secretary
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx
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ADDENDUM TO EMPLOYMENT AGREEMENT:
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Business Policies of National Home Health Care Corp.
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This addendum supplements and is hereby incorporated into the terms of
the Employment Agreement to which this is attached. The Company has set forth in
this addendum basic principles and standards of conduct that senior management
of the Company are expected to follow in all respects. Every employee of the
Company has a personal responsibility to abide by each of the standards. Each
person, alone, is responsible for his actions. No one will be permitted to
justify an illegal act by claiming it was ordered by someone higher in
management. No one, regardless of level of position, is ever authorized to
direct an employee to commit an illegal or unethical act.
As a summary of basic principles, this addendum does not include all
the rules and regulations that apply to every situation. The absence of a
specific practice or instruction covering a particular situation does not
relieve an employee from exercising the highest ethical standards applicable to
the circumstances. If an employee has questions as to what the proper course of
conduct should be in any given situation, consult the Chairman of the Board of
the Company and the Company's legal counsel.
Violations of the guidelines set forth below can result in
disciplinary action, including dismissal, and possible criminal prosecution.
Any reprisal against an employee who is good faith reports a violation
or suspected violation of law or company policies is strictly forbidden.
1. It is the Company's policy to comply fully with the law. We should
avoid even the appearance of wrongdoing and, at all times, should conduct our
business according to the highest ethical standards.
Since the Company is a home health care company, there are many state
and federal law and regulation which affect and define the responsibilities of
each employee. These laws and regulations must be adhered to at all times. If
there is ever any doubt on the part of an employee about the meaning of a law or
regulation the employee must check with corporate counsel or special counsel.
The employee is responsible for designing, implementing and monitoring quality
control programs to assure that Company policies are being followed and that all
personnel are in compliance. In connection with any compliance program, it is
vital that the employee be sure that no falsification of records be allowed and
the employee must undertake to have programs developed to assure that this does
not happen.
2. The Company shall not tolerate any unfair competition. Additional
guidelines relating to this general policy are:
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- do not interfere with contracts made between a prospective
customer and a competitor.
- never engage in commercial bribery.
- do not disparage a competitor's services.
- be accurate and truthful in all dealings with customers and be
careful not to misrepresent the state and qualify, features or
availability of our services.
3. The Company awards business to suppliers solely on merit. No
employee should have any relationship, financial or otherwise, with any supplier
or competitor that might be construed as a conflict of interest or that might
even appear to impair his or her independent judgment on behalf of the Company.
Gifts, loans or any other thing of significant value should not be accepted or
solicited, even indirectly.
4. Each employee's primary obligation is to the Company, and,
therefore, any form of outside activity must be kept totally separate from
employment with the Company. no outside activity should involve the use of
Company assets, materials or facilities.
5. No employee may use his or her position in the Company for outside
gain or benefit, nor should any employee use property or other confidential or
private confidential information in any outside activity.
6. The law requires that the Company's books and records accurately
and fairly reflect transactions in reasonable detail, and that the Company's
internal accounting controls provide reasonable assurances that:
- transactions are carried out in an authorized matter.
- transactions have been reported and recorded to permit correct
preparation of financial statements and to maintain accurate
records of assets. Access to assets is in accordance with
management's authorization.
- inventories of assets are taken periodically and appropriate
action is taken to correct discrepancies.
7. Every employee who has control over Company funds is personally
accountable for such funds. There are no exceptions to this rule.
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When spending Company money or personal money that will be reimbursed,
or requesting services that will cause Company money to be spent, the employee
involved should make sure the Company received proper value in return and should
be sure the expenditure is for a legitimate business purpose.
Anyone responsible for the handling of Company revenue, and the
associated records and materials, is accountable for their safe keeping.
8. The Company categorically forbids the use of corporate funds for
the support of political parties or candidates. No employee is authorized to
make or approve such a contribution.
9. Company business records must always be prepared accurately and
reliably, since they are of critical importance to the Company's meeting its
financial, legal and management obligations.
10. Records containing personal data on patients and the Company's
employees are confidential. As such, they are to be carefully safeguarded and
kept current and accurate. They should be disclosed only to authorized personnel
having a "need to know" or pursuant to lawful processes. Should you have any
questions about disclosure, consult with the Company's legal counsel before
disclosing.
11. When a dishonest act by an employee is discovered it should be
reported immediately and directly to the Chairman of the Board of the Company.
12. The Company encourages employees to participate in its future by
investing in its securities. However, in trading in Company securities each
employee should be aware that it may be illegal (and possible result in civil or
criminal penalties) to buy or sell Company securities while in possession of
material non-public information about the Company.
Material information can be anything that could have actual
significance in an investors decision such as acquisition plans, dividends,
earnings, new contracts, products, major regulatory, court or legislative events
and major management changes or other business plans. Employees aware of such
information prior to its being made public, should not buy or sell Company
securities until the information has been made public.
Employees should not trade in the securities of other companies when
they know material non-public information about these companies which they learn
as part of their job. For example, an employee may learn that another company is
being considered for a major contract or any other information which could have
actual significance in an investor's decision about the securities of the other
company.
Employees should keep any such information about the Company or any
other company secret and use it only for Company purposes, because it is
unlawful to "tip" others who may buy or sell such securities, even though the
tipper does not.
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Some types of trading -- even if innocent -- could appear to the
public and to public officials to be based on the misuse of inside information
concerning the Company. To avoid even an appearance of impropriety, employees
are not to engage in short term speculation in company securities (that is, the
purchase and sale on the open market within a six month period). Nor should an
employee engage in any transaction when he stands to profit due to the short
term savings in the value of the Company's securities. An example of this type
of trading includes "short sales" (selling borrowed securities which the seller
hopes can be purchased at a lower price when they are due for deliver.
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