EMPLOYMENT AGREEMENT
This Agreement made and entered into this 27th day of August, 1996, by and
between New York Health Care, Inc., a New York corporation, with its principal
place of business at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000,
(hereinafter "Employer" or the "Company"), and Xxxxxxx Xxxxxxx, an individual
whose residential address is at 0 Xxxxxxx Xxxxxx, Xxxxx Xxxx, Xxx Xxxx 00000
(hereinafter "Employee").
W I T N E S S E T H :
WHEREAS, Employer is engaged in the business of home health care;
WHEREAS, Employee possesses skills, knowledge, abilities and experience
which Employer wishes to continue to avail itself of; and
WHEREAS, Employer wishes to continue the employment of Employee;
NOW, THEREFORE, in consideration of the mutual covenants as set forth
herein:
THE PARTIES HERETO AGREE AS FOLLOWS:
1. Employment. Employer hereby shall employ Employee as the Chief Financial
Officer of the Company and to perform such additional duties and services as may
be assigned to him pursuant to Paragraph 3 hereof. Employee hereby accepts such
employment, upon the terms and conditions hereinafter set forth.
2. Term. The term of employment of Employee hereunder shall be for the
period commencing as of August 1, 1996 and ending at the close of business July
30, 1999. Employer will give Employee written notice of any intention to renew
this Agreement on or before May 30, 1999.
1
3. Duties.
(A) Employee's duties shall include overseeing and directing the
Company's financial and accounting activities, and generally promoting and
facilitating the Company's business objectives. For purposes of this paragraph,
Employer's subsidiaries, if any, are also encompassed in the term "Company".
(B) During the term of this Agreement, Employee shall perform such
additional services as shall from time to time be assigned to him by the Board
of Directors or the Chief Executive Officer or Chief Operating Officer of
Employer and which are consistent with the duties reasonably assigned to the
Chief Financial Officer of such size Company.
(C) Employee shall devote his entire business time and attention,
energy, and skill to the business of Employer. Notwithstanding the foregoing,
Employee may take all necessary and appropriate action to maintain his
registrations and licences as an NASD Registered Representative and a CFTC
Commodity Trading Advisor in compliance with all applicable rules and
regulations, provided, however, that he will not engage in the rendering of any
advice or in the the execution of any transactions in the securities of the
Employer without prior clearance by the Employer' attorneys.
(D) Employee shall provide to the Employer not less than four (4)
weeks written notice of his intention to resign from his employment.
4. Annual Compensation; Bonus; Supplemental Compensation.
(A) For his services to Employer during the term of this Agreement,
Employee's annual salary shall be Eighty Thousand Dollars ($80,000) (hereinafter
"Annual Base Compensation"). The Annual Base Compensation may be increased at
the discretion of the Employer's Compensation
2
Committee, commencing on April 1, 1997 (the "Anniversary Date") and continuing
on the Anniversary Date in each year thereafter during the term of this
Agreement.
(B) Employee shall be granted participation in the Company's 401(k)
Plan, as well as all other benefits available to other employees of the Company.
5. Expenses. Employer will reimburse Employee or cause him to be reimbursed
for all ordinary and necessary traveling expenses and other disbursements
incurred by him for or on behalf of Employer in the performance of his duties
hereunder, and will reimburse him for his professional dues and continuing
professional education expenses up to a maximum of $1,000 per year. For such
purposes Employee shall submit to Employer periodic reports of such expenses and
other disbursements at least once in each calendar quarter.
6. Vacation Time. Employee shall be entitled to two (2) weeks vacation
during the first year of the term of this Agreement and three (3) weeks in each
subsequent year of this Agreement, which vacations shall be at such time or
times and for such periods as Employee shall choose, consistent with the
reasonable performance of his duties hereunder.
7. Employer's Right to Terminate.
(A) Employer shall have the right to terminate this Agreement, without
Cause, at any time. In the event of such termination without Cause, the
Employee's then Annual Base Compensation, as provided in paragraph 4 above,
shall be paid for a period of two (2) months. In this instance, "Annual Base
Compensation" shall include compensation for accrued but unused vacation time
during the year in which termination occurs, prorated for the remaining portion
of that year.
3
(B) Employer shall have the right to terminate this Agreement for
Cause at any time during the period of this Agreement. "Cause," for all purposes
for this Agreement, will be defined as follows:
(i) the death of Employee;
(ii) the disability of Employee, said term being defined as Employee
becoming physically or mentally incapable of fully performing the
services required of him in accordance with his obligations
hereunder, and such incapacity continuing, or being reasonably
expected to continue, for more than three (3) months during any
period of twelve (12) months;
(iii) dishonest or illegal conduct of Employee;
(iv) unethical conduct of Employee or failure to perform his material
duties and obligations under this Agreement after thirty (30)
days prior written notice of such unethical conduct or failure;
or
(v) any use of illegal drugs or abuse of substances involving alcohol
or prescription drugs.
In event of termination for cause, the Employee's then Annual Base Compensation
and benefits, as provided in paragraph 4, above, shall be paid for a period of
two (2) weeks following termination, except that in the case of a termination
pursuant to paragraphs 7 (iii), (iv) and (v), such compensation and benefits
shall be paid only to the date of termination, plus all earned and accrued
benefits, and reimbursement of expenses incurred by him for and on its behalf.
Except for those duties and obligations stated in paragraphs 8, 9 (B) and 9(C),
any and all of Employer's other duties and
4
obligations shall immediately be extinguished and made null and void and of no
further force and effect.
8. Confidentiality.
(A) Employee understands and acknowledges that as a result of
Employee's employment with Employer and involvement with the business of
Employer, he shall necessarily become informed of and have access to,
confidential information of Employer including, without limitation, inventions,
trade secrets, technical information, know-how, plans, specifications, identity
of customers and identity of suppliers, and that such information, even though
it may have been or may be developed or otherwise acquired by Employee, is the
exclusive property of Employer to be held by Employee in trust and solely for
Employer's benefit and Employee shall not at any time, either during or
subsequent to his employment hereunder, reveal, report, publish, transfer or
otherwise disclose to any person, corporation or other entity or use any of
Employer's confidential information, without its written consent of the Board of
Directors, except for use on behalf of the Company in connection with its
business, and except for such information which legally and legitimately is or
becomes of general public knowledge from authorized sources other than Employer.
(B) Upon the termination of his employment with Employer for any
reason, Employee shall promptly deliver to it all drawings, manuals, letters,
notes, notebooks, reports and copies thereof and all other materials, including,
without limitation, those of a secret or confidential nature, relating to
Employer's business which are in Employee's possession or control. Employer
shall reimburse Employee for any packing or moving costs reasonably incurred by
him in connection with the foregoing delivery.
9. Non-Competition; Restrictive Covenants and Confidentiality; Injunctive
Relief.
5
(A) During the term of his employment with Employer pursuant to this
Agreement, or any renewal thereof, Employee shall not, directly or indirectly
whether as principal, agent, shareholder, employee, officer, director,
consultant, joint-venturer, partner or otherwise, own, manage, operate, join,
control or participate in the ownership, management, operation or control of,
render any services to or be connected in any manner with any business which is
in direct competition with or is of the type or character of any business
engaged in by Employer or which offers, sells or markets products, projects or
services that directly compete with products, projects or services offered by
Employer or any of its subsidiaries or affiliates, irrespective of whether
Employee's involvement shall be as an officer, owner, employee, partner,
joint-venturer, consultant, agent or other participant; provided, however, that
the foregoing shall not restrict Employee from making an investment in any
company the securities of which are listed on a national securities exchange or
actively traded in the over-the-counter market, so long as such investment does
not equal or exceed five percent (5%) of the total number of outstanding shares
of common stock of such company.
(B) For a period of up to one (1) year after the expiration or
termination of his employment with Employer without cause, as the Employer in
its sole discretion may elect in writing upon such expiration or termination, or
for a period of one (1) year after termination for cause, Employee shall not,
directly or indirectly, whether as principal, agent, shareholder, employee,
officer, director, joint-venturer, partner, consultant or otherwise, render any
services to or with any company, firm or individual which competes in any way
with Employer in a business actually engaged in or being actively developed by
it, provided that in the event of expiration or a termination without cause the
Employer pays to the Employee fifty percent (50%) of his Annual Base
Compensation during the period of the restriction.
6
(C) For a period of one (1) year following the expiration or
termination of his employment with Employer for any reason, Employee shall not,
directly or indirectly, whether as principal, agent, shareholder, employee,
officer, director, joint-venturer, partner, consultant or otherwise, solicit,
raid, entice or induce any person who is, or was at the time of such termination
or at any time within the six-month period immediately preceding such
termination, an employee of Employer to terminate his or her employment with the
Employer or become employed by any other person, firm or corporation, and he
will not approach any such employee for such purpose or authorize or knowingly
approve the taking of such action by other persons to become employed in a
business who or which are actively engaged in a competitive business.
10. Assignability and Binding Effect. The rights and obligations arising
under this Agreement shall inure to the benefit of and shall be binding upon the
executors, administrators, successors and legal representatives of Employee and
shall inure to the benefit of and be binding upon Employer, upon its successors
and assigns, but neither this Agreement nor the rights or obligations of
Employee hereunder may be assigned, pledged, hypothecated or otherwise
transferred by Employee in whole or in part to another person, firm or
corporation nor may the obligations of Employee hereunder be delegated.
11. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered personally or sent by
registered or certified mail, prepaid and return receipt requested, to the other
party hereto at his or its mailing address as set forth at the beginning of this
Agreement, and in the case of Employer with copies to Xxxxxxx X. Xxxxx, Esq.,
Scheichet & Xxxxx, P.C., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Either party
may change the address to
7
which such communications hereunder shall be sent by sending notice of such
change to the other party as herein provided.
12. Representations by Employee and Employer. Employee hereby represents
and warrants that he is not a party to any other agreement, contract or
understanding, whether of employment or otherwise, which would in any way
restrict or prohibit him from undertaking or performing employment with Employer
in accordance with the terms and conditions of this Agreement. Employer hereby
represents and warrants that this Agreement has been properly authorized by all
necessary corporate action and, when and if, fully executed, will be binding and
enforceable upon the Company in accordance with its terms except for the
application of the laws of insolvency and bankruptcy as they may otherwise
affect such Agreement. Employer further represents and warrants that no other
contract, agreement, provision of its certificate of incorporation or bylaws,
debt obligation, law, regulation or court or administrative order prevents it
from entering into, or conflicts with, this Agreement.
13. Waiver. The waiver by either party of any breach or violation of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach or violation, whether singular in nature or not.
14. Prior Agreements; Complete Understanding; Amendment. This Agreement
cancels and supersedes any and all prior agreements and understandings, if any,
between the parties hereto regarding the services of Employee to Employer and
constitutes the complete understanding between the parties with respect to the
employment of Employee hereunder and no statement, representation, warranty or
covenant has been made by either party with respect thereto except as expressly
set forth herein. Employee acknowledges that he has been afforded the right to
review this Agreement with
8
legal counsel prior to the execution of this Agreement, and that he has been
encouraged to do so. This Agreement shall not be altered, modified or amended
except by written instrument signed by each of the parties hereto.
15. Headings. The headings set forth in this Agreement are for convenience
only and shall not be considered as part of this Agreement in any respect nor
shall they in any way affect the substance of any provisions contained in this
Agreement.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one and the same agreement.
17. Arbitration. Any dispute, controversy or claim with respect to the
enforcement of the provisions of paragraph 7(B)(iv) of this Agreement or the
performance or breach of such provision shall be settled exclusively by
arbitration conducted in the English language in New York, New York in
accordance with the arbitration rules of the American Arbitration Association by
a panel of three neutral arbitrators appointed in accordance with such rules. In
any such arbitration proceeding, the arbitrators shall have the authority to
order specific performance of an act by any party to such proceeding, in
addition to or in lieu of monetary damages. The parties to this Agreement hereby
consent to the jurisdiction of the court's of the State of New York in Nassau
County.
18. Indemnification. The Employer shall, to the fullest extent permitted by
applicable law, indemnify and hold harmless the Employee so that he shall not be
personally liable to the Registrant or its stockholders or third parties for
monetary damages for breach of fiduciary duty, and against all expense,
liability and loss reasonably incurred or suffered by such person in connection
with his duties and acts hereunder, together with the right to indemnification
and the payment of expenses incurred in defending a proceeding in advance of its
final disposition.
9
19. Governing Law; Construction with Existing Law; Severability. This
Agreement shall be governed by, and construed and enforced in accordance with,
the internal laws of the State of New York. It is the intention of the parties
hereto that all terms and conditions of this Agreement are in compliance with
the laws and regulations of the state of New York, and nothing in this Agreement
shall be construed to be in derogation of the laws, rules and regulations
thereof. If for any reason any provision of this Agreement or any part hereof is
invalid, unlawful or incapable of being enforced by reason of any rule of law,
equity or public policy, all conditions and provisions of the Agreement which
can be given effect without such invalid, unlawful or unenforceable provision
shall, nevertheless, remain in full force and effect, and such invalid, unlawful
or irrevocable provision shall be carried out as nearly as possible according to
its original terms and intent, while eliminating such invalidity or
non-enforceability.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
NEW YORK HEALTH CARE, INC.
By: ___________________________________
Title:
----------------------------------
Xxxxxxx Xxxxxxx
10
