EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement dated as of August 16, 1996 (the "Agreement") by
and between Mariner Health Group, Inc., a Delaware corporation (the "Company"),
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Executive"):
WITNESSETH:
WHEREAS, the Company desires to employ the Executive, and the Executive
desires to be employed by the Company, to render services to the Company on the
terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of these premises and of the covenants
and agreements set forth in this Agreement, the parties hereto hereby agree as
follows:
1. Employment. During the Term, the Company shall employ the Executive,
and the Executive agrees to serve the Company, as its Executive Vice President
and Chief Financial Officer upon the terms and conditions set forth in this
Agreement.
2. Term. Unless earlier terminated in accordance with this Agreement, the
term of the Executive's employment under this Agreement (the "Term") shall
commence as of September 15, 1996 (or such other date as the Company and the
Executive may agree) and shall expire on December 31, 1996; provided, however,
that upon expiration of the Term, this Agreement shall be extended from year to
year without further action on the part of the parties hereto, unless either
party hereto gives written notice of termination to the other party at least 90
days prior to the expiration of the then current term.
3. Duties and Responsibilities. (a) During the Term, the Executive shall
serve as the Executive Vice President and Chief Financial Officer of the
Company. In the performance of his responsibilities as the Executive Vice
President and Chief Financial Officer, the Executive shall be subject to all of
the Company's policies, rules and regulations applicable to its executives of
comparable status and shall report directly to, and shall be subject to the
direction and control of, the Chief Executive Officer of the Company (the "CEO")
or, if the CEO so determines, the President of the Company, and shall perform
such duties commensurate with his position as shall be assigned to him by the
CEO or the President, as the case may be. In performing such duties, the
Executive will be subject to and will substantially abide by, and will use
reasonable efforts to cause employees of the Company to be subject to and
substantially abide by, all policies and procedures developed by the Company.
(b) During the Term, the Executive shall devote all of his
business time, energies, skills and attention to the affairs and activities of
the Company and any corporation, partnership or other entity controlled by the
Company (each, a "Subsidiary"). The Executive shall provide these services to
the Company and its Subsidiaries described in this Agreement in a professional
Employment Agreement--Page 2
and diligent manner. During the Term, the Executive shall not devote any of his
business time, energies, skills or attention to the affairs or activities of any
other business or organization, without the prior approval of the CEO.
(c) To induce the Company to enter into this Agreement, the
Executive represents and warrants to the Company that: (i) the Executive is not
a party or subject to any employment agreement or arrangement with any other
person, firm, company, corporation or other business entity and the Executive is
subject to no restraint, limitation or restriction by virtue of any agreement or
arrangement, or by virtue of any law or rule of law or otherwise which would
impair the Executive's right or ability (A) to enter the employ of the Company,
or (B) to perform fully his duties and obligations pursuant to this Agreement,
and (ii) to the Executive's knowledge, no material litigation is pending or
threatened against any business or business entity owned or controlled or
formerly owned or controlled by the Executive.
4. Compensation. (a) For all services rendered by the Executive under this
Agreement, the Company shall pay or cause to be paid to the Executive, and the
Executive shall accept, the Base Salary, and Bonus if any, (as such terms are
hereinafter defined in this Section 4) all in accordance with and subject to the
terms of this Agreement. For the purposes of this Agreement, the term
"Compensation" shall mean the Base Salary, and Bonus if any. The Executive shall
have the right to elect to defer in accordance with applicable Internal Revenue
Service requirements for a reasonable time the Compensation payable to him, such
deferral to be evidenced by appropriate documentation at the time of such
deferral. In addition, to the Base Salary and Bonus, the Executive shall be
entitled to receive such other bonuses, options and other remuneration as the
Board may from time to time approve, in its sole discretion.
(b) During the Term, the Company shall pay the Executive a base
salary (the "Base Salary") at an annual rate of $350,000. The Executive's Base
Salary shall be reviewed at least annually based upon a recommendation to the
Compensation Committee of the Board (the "Compensation Committee") by the CEO
and may be increased (but not decreased) by the Compensation Committee in its
sole discretion. The Base Salary shall be payable in installments in accordance
with the Company's regular practices, as such practices may be modified from
time to time, but in no event less often than monthly.
(c) During the Term, the Executive shall be eligible to earn an
annual performance bonus (the "Bonus") if the Company meets the performance
objectives established by the Compensation Committee for purposes of this
Agreement for the applicable period during the Term. The Bonus (including the
amount thereof) shall be reviewed at least annually by the Compensation
Committee and shall be payable as determined by the Compensation Committee in
its sole discretion.
(d) The Executive shall be entitled to reasonable periods of paid
vacation, personal and sick leave during the Term in accordance with the
Company's policies regarding such vacation and leaves; provided, however, that
in no event shall the Executive be entitled to less than four weeks of vacation
per year. The Executive shall be entitled to carry over or be compensated for
accrued but unused vacation from any year in accordance with the Company's
regular practices,
Employment Agreement--Page 3
as such practices may be modified from time to time; provided, however, that the
Executive shall be entitled to carry over up to two weeks of accrued but unused
vacation from one year to the next.
(e) The Executive is authorized to incur reasonable expenses in
the performance of his duties hereunder during the Term. The Company shall
reimburse the Executive for all such expenses upon the presentation by the
Executive, not less frequently than monthly, of signed, itemized accounts of
such expenditures and vouchers, all in accordance with the Company's procedures
and policies as adopted and in effect from time to time and applicable to its
executives of comparable status.
(f) The Executive shall be eligible to participate in qualified
retirement, deferred compensation, group medical, accident, disability, life and
health benefit plans of the Company as may be provided by the Company from time
to time to Company executives of comparable status, subject to, and to the
extent that, the Executive is eligible under such benefit plans in accordance
with their respective terms. The Company shall pay the expenses associated with
the Executive's participation in such benefit plans to the same extent the
Company pays the expenses associated with participation by other employees.
(g) During the Term, the Company shall, at the Company's expense,
provide the Executive with a suitable automobile of Executive's choice and with
an allowance for the operating expenses associated with his use of such
automobile in accordance with the Company's regular practices, as such practices
may be modified from time to time.
(h) The Company shall grant to the Executive options to purchase
an aggregate of 500,000 shares of Common Stock, all of which options shall be
granted upon commencement of Executive's employment with the Company pursuant to
this Agreement (collectively, the "Options"). Each of the Options shall be
granted pursuant to a stock plan maintained by the Company in compliance with
Rule 16b-3 under the Securities Exchange Act of 1934 (the "1934 Act"). The
Options shall be evidenced by agreements in substantially the forms of Exhibits
A, B and C to this Agreement. The exercise price of each Option shall be equal
to the fair market value per share of Common Stock on the date the option is
granted. Each of the Options is intended to qualify as an "incentive stock
option" under Section 422(b) of the Internal Revenue Code of 1986, as amended
(the "Code"), to the maximum extent eligible under the Company's stock plans and
applicable law.
(i) On or before December 1, 1996, the Company shall pay the
Executive $100,000 as a signing bonus for entering into this Agreement, which
payment shall be payable regardless of whether the Executive is then an employee
of the Company and in addition to the other payments contemplated by this
Section 4.
5. Termination. (a) During the Term (regardless of whether or not the
Company experiences a Change in Control (as defined below)), the Company may
terminate the employment of the Executive for "Cause." For purposes of this
Agreement, "Cause" means: (a) the Executive's conviction of any crime (whether
or not involving the Company) which
Employment Agreement--Page 4
constitutes a felony in the jurisdiction involved (other than unintentional
motor vehicle felonies); (b) any intentional act of theft, fraud or embezzlement
by the Executive in connection with his work with the Company; (c) the
Executive's continuing, repeated and willful failure or refusal to perform his
duties and services under this Agreement (other than due to his incapacity due
to illness or injury), provided that such failure or refusal continues
uncorrected for a period of 30 days after the Executive shall have received
written notice from the Board stating with specificity the nature of such
failure or refusal; or (d) the Executive's violation of Section 6.
(b) During the Term (regardless of whether or not the Company
experiences a Change in Control), the Company may terminate the Executive's
employment at any time without Cause. For purposes of this Agreement, if the
Company gives written notice of termination to the Executive at least 90 days
prior to the expiration of the then current Term, such action shall be
considered termination of the Executive's employment without Cause pursuant to
this Section 5(b).
(c) The Executive may voluntarily terminate his employment at any
time by giving the Company at least 90 days' prior written notice; provided,
however, that, at any time after receiving such written notice, the Company may
terminate the Executive's employment on shorter notice or with no prior notice
(which termination shall not be deemed a termination without Cause under this
Agreement); and provided further that if the Executive's termination of his
employment pursuant to the provisions of this Section 5(c) is because of a
breach by the Company of its obligations under Sections 3(a), 4(a), 4(b), 4(c),
4(f), 4(h) and 4(i) (a "Material Breach"), such termination shall be effective
upon receipt of written notice thereof by the Company.
(d) Following a Change in Control of the Company, the Executive
may voluntarily terminate his employment at any time prior to the first
anniversary of such Change in Control for Good Reason (as defined below).
(e) (i) If the Company terminates the Executive's employment
pursuant to the provisions of Section 5(a) (for Cause) at any time (regardless
of whether or not the Company experiences a Change of Control), the Executive
shall not be entitled to any Compensation or benefits following the date of such
termination, other than Compensation and benefits required to be paid or
provided by law and payment of the Executive's normal post-termination benefits
in accordance with the Company's retirement, insurance and other benefit plans
and arrangements.
(ii) If either (x) the Company terminates the Executive's
employment at any time either prior to a Change in Control or from and after the
first anniversary of a Change in Control pursuant to the provisions of Section
5(b) (without Cause), or (y) the Executive terminates his employment at any time
either prior to a Change in Control or from and after the first anniversary of a
Change in Control pursuant to the provisions of Section 5(c) because of a
Material Breach, (A) the Executive shall continue to receive the Base Salary
being paid to him immediately prior to such termination and a bonus equal to the
Bonus paid to him by the Company with respect to the most recently completed
fiscal year (collectively, the "Severance Benefit") until the second anniversary
of such termination; and (B) the Company shall pay the Executive's normal
post-termination benefits in accordance with the Company's retirement,
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insurance and other benefit plans and arrangements; provided, however, that the
Company shall continue to provide the Executive coverage under its health
benefit plans or arrangements until the second anniversary of such termination.
(iii) If either (x) the Company terminates the Executive's
employment at any time during a period commencing with a Change in Control and
ending one year from such Change in Control pursuant to the provisions of
Section 5(b) (without Cause), or (y) the Executive terminates his employment at
any time during a period commencing with a Change in Control and ending one year
from such Change in Control pursuant to the provisions of Section 5(c) because
of a Material Breach or Section 5(d) (for Good Reason), (A) the Executive shall
continue to receive the Base Salary being paid to him immediately prior to such
termination and a bonus equal to the Bonus paid to him by the Company with
respect to the most recently completed fiscal year (collectively, the "Extended
Severance Benefit") until the third anniversary of such termination; and (B) the
Company shall pay the Executive's normal post-termination benefits in accordance
with the Company's retirement, insurance and other benefit plans and
arrangements; provided, however, that the Company shall continue to provide the
Executive coverage under its health benefit plans or arrangements until the
third anniversary of such termination.
(iv) If the Executive voluntarily terminates his employment
with the Company pursuant to the provisions of Section 5(c) for any reason other
than a Material Breach, or dies or becomes disabled, the Executive shall not be
entitled to receive any Compensation or benefits following the date of such
termination, death or disability; provided, however, that, if the Executive
shall become disabled, the Company shall continue to pay the Executive's Base
Salary, and shall continue the Executive's coverage under its health benefit
plans or arrangements, for a period of up to 180 continuous days during any such
period of disability.
(f) If either (x) the Company terminates the Executive's
employment at any time either prior to a Change in Control or from and after the
first anniversary of a Change in Control pursuant to the provisions of Section
5(b) (without Cause), or (y) the Executive terminates his employment at any time
either prior to a Change in Control or from and after the first anniversary of a
Change in Control pursuant to the provisions of Section 5(c) because of a
Material Breach, fifty percent (50%) of all outstanding stock options (including
the Options), warrants and the like held by the Executive at the time of such
termination which have not yet vested at the time of such termination shall
immediately be fully vested. If either (x) the Company terminates the
Executive's employment at any time during a period commencing with a Change in
Control and ending one year from such Change in Control pursuant to the
provisions of Section 5(b) (without Cause), or (y) the Executive terminates his
employment at any time during a period commencing with a Change in Control and
ending one year from such Change in Control pursuant to the provisions of
Section 5(c) because of a Material Breach or Section 5(d) (for Good Reason), (i)
all outstanding stock options (including the Options), warrants and the like
held by the Executive at the time of such termination which have not yet vested
at the time of such termination shall immediately be fully vested and (ii) the
Executive shall have the option to require that the Company pay an amount equal
to the then present value of the Extended Severance Benefit to which he would be
entitled (using the prime rate used by the Company's primary bank or, if none,
Employment Agreement--Page 6
Citibank, N.A.) within 30 days of a request therefor. The option referred to in
clause (ii) of the preceding sentence shall be exercised, if at all, within 60
days after such termination. Except as provided in this Section 5(f), if the
Executive ceases to be employed by the Company for any reason (including death
or disability), no further installments of any then outstanding stock options
(including the Options) shall become exercisable after the date of termination
of the Executive's employment by the Company.
(g) For purposes of this Agreement, the following terms shall have
the meanings set forth below:
"Change in Control" means the occurrence of any of the following
events during the Term:
(i) The Company is merged or consolidated or reorganized into or
with another corporation or other legal person, and as a result of such
merger, consolidation or reorganization less than a majority of the
combined voting power of the then-outstanding securities of such
surviving, resulting or reorganized corporation or person immediately
after such transaction is held in the aggregate by the holders of the
then-outstanding securities entitled to vote generally in the election of
directors of the Company ("Voting Stock") immediately prior to such
transaction;
(ii) The Company sells or otherwise transfers all or substantially
all of its assets to any other corporation or other legal person, and as a
result of such sale or transfer less than a majority of the combined
voting power of the then-outstanding securities of such corporation or
person immediately after such sale or transfer is held in the aggregate by
the holders of Voting Stock of the Company immediately prior to such sale
or transfer;
(iii) There is a report filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form or report), each as promulgated pursuant
to the 1934 Act, disclosing that any "person" (as such term is used in
Section 13(d)(3) or Section 14(d)(2) of the ▇▇▇▇ ▇▇▇) has become the
"beneficial owner" (as such term is used in Rule 13d-3 under the ▇▇▇▇ ▇▇▇)
of securities representing 35% or more of the Voting Stock of the Company;
(iv) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the 1934 Act disclosing in
response to Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) that a change in control of the Company has
occurred; or
(v) If during any period of two consecutive years, individuals who
at the beginning of any such period constitute the Board cease for any
reason to constitute at least a majority thereof, unless the election, or
the nomination for election by the Company's stockholders, of each
director of the Company first elected during such period was approved by a
vote of at least a majority of the directors then still in office who were
directors of the Company at the beginning of any such period;
Employment Agreement--Page 7
provided, however, that a "Change in Control" shall not be deemed to have
occurred for purposes of this Agreement solely because (i) the Company, (ii) an
entity in which the Company directly or indirectly beneficially owns 50% or more
of the voting securities, or (iii) any Company-sponsored employee stock
ownership plan or any other employee benefit plan of the Company, either files
or becomes obligated to file a report or a proxy statement under or in response
to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor
schedule, form or report) under the 1934 Act, disclosing beneficial ownership by
it of shares of Voting Stock or because the Company reports that a change in
control of the Company has occurred by reason of such beneficial ownership.
"Good Reason" means the occurrence of one or more of the following
events following a Change in Control:
(A) Failure to elect, reelect or otherwise maintain the Executive
in the office or position in the Company which the Executive held
immediately prior to a Change in Control, or the removal of the Executive
as a director of the Company (or any successor thereto) if the Executive
shall have been a director of the Company immediately prior to the Change
in Control;
(B) A significant adverse change in the nature or scope of the
authorities, powers, functions, responsibilities or duties attached to the
position with the Company which the Executive held immediately prior to
the Change in Control, a reduction in the aggregate of the Executive's
Compensation received from the Company, or the termination of the
Executive's rights to any benefits to which he was entitled immediately
prior to the Change in Control or a reduction in scope or value thereof
without the prior written consent of the Executive, any of which is not
remedied within 10 calendar days after receipt by the Company of written
notice from the Executive of such change, reduction or termination, as the
case may be;
(C) A determination by the Executive made in good faith that as a
result of a Change in Control and a change in circumstances thereafter
significantly affecting his position, including a change in the scope of
the business or other activities for which he was responsible immediately
prior to the Change in Control, he has been rendered substantially unable
to carry out, has been substantially hindered in the performance of, or
has suffered a substantial reduction in, any of the authorities, powers,
functions, responsibilities or duties attached to the position held by the
Executive immediately prior to the Change in Control, which situation is
not remedied within 10 calendar days after written notice to the Company
from the Executive of such determination;
(D) The liquidation, dissolution, merger, consolidation or
reorganization of the Company or transfer of all or a significant portion
of its business or assets, unless the successor or successors (by
liquidation, merger, consolidation, reorganization or otherwise) to which
all or a significant portion of its business or assets have been
transferred (directly or by operation of law) shall have assumed all
duties and obligations of the Company under this Agreement pursuant to
Section 9(c);
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(E) The Company shall relocate its principal executive offices, or
require the Executive to have his principal location of work changed, to
any location which is in excess of 25 miles from the location thereof
immediately prior to the Change in Control or the Company shall require
the Executive to travel away from his office in the course of discharging
his responsibilities or duties thereunder significantly more (in terms of
either consecutive days or aggregate days in any calendar year) than was
required of him prior to the Change in Control without, in either case,
his prior written consent; or
(F) Without limiting the generality or effect of the foregoing,
any Material Breach of this Agreement by the Company or any successor
thereto.
(h) Notwithstanding anything to the contrary in this Agreement and
in addition to any other Compensation, Severance Benefits or other amounts
payable by the Company to the Executive pursuant to this Agreement or otherwise,
if (i) the Company terminates the Executive's employment pursuant to the
provisions of Section 5(b) (without Cause), or the Executive terminates his
employment pursuant to the provisions of Section 5(d) (for Good Reason), after a
Change in Control of the Company and (ii) it shall be determined that any
payment or distribution (actual or deemed) by the Company to or for the benefit
of the Executive, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise or resulting from the
accelerated vesting of then outstanding options to purchase shares of Common
Stock (including the Options) (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Code, or any interest or penalties with respect
to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), the
Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including any Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments. If the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder at the time of termination of the
Executive's employment, the Executive shall repay to the Company, at the time
that the amount of such reduction in Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such reduction (plus that
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state and local income tax imposed on the Gross-Up Payment being repaid by the
Executive to the extent that such repayment results in a reduction in Excise Tax
and/or a federal, state or local income tax deduction) plus interest on the
amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the
Code. If the Excise Tax is determined to exceed the amount taken into account
hereunder at the time of the termination of the Executive's employment
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess (plus any interest,
penalties or additions payable by the Executive with respect to such excess) at
the time that the amount of such excess is finally determined. The Executive and
the Company shall each reasonably cooperate with the other in connection with
any administrative or judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Payments. All determinations
required to be made
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under this Section 5(i), including whether a Gross-Up Payment is required and
the amount of such Gross-Up Payment, shall be made by the Company's independent
accountants.
6. Restrictive Covenants. (a) Executive acknowledges that (i) he has a
major responsibility for the operation, administration, development and growth
of the Company's business, (ii) the Company's business is or may become national
or international in scope, (iii) his work for the Company has brought him and
will continue to bring him into close contact with confidential information of
the Company and its customers, and (iv) the agreements and covenants contained
in this Section 6 are essential to protect the business interests of the Company
and that the Company will not enter into this Agreement but for such agreements
and covenants. For purposes of this Section 6, references to the Company shall
mean the Company and its Subsidiaries.
(b)(i) During the Term and until the later of (x) three years
following the date of termination of Executive's employment with the Company for
any reason and (y) the end of the period during which the Executive is entitled
to receive the Extended Severance Benefit pursuant to Section 5(e)(iii)
(disregarding any exercise of rights under Section 5(f)(y)) (the "Termination
Period"), the Executive shall not, directly or indirectly, perform any services
in the United States for any person or entity other than the Company that is in
the business, directly or indirectly, of providing health care services of the
type the Company is providing, or of the type the Executive is aware the Company
is contemplating providing, at the time of the Executive's termination (the
"Business"); or, without limiting the generality of the foregoing, be or become
or agree to be or become, interested in or associated with, in any capacity
(whether as a partner, shareholder, owner, officer, director, employee,
principal, agent, creditor, trustee, consultant, co-venturer or otherwise) any
individual, corporation, firm, association, partnership, joint venture or other
business entity that competes in the Business; provided, however, that the
Executive may own, solely as an investment, not more than one percent (1%) of
any class of securities of any corporation that is publicly traded on any
national securities exchange in the United States of America or reported on the
National Association of Securities Dealers, Inc.'s Automated Quotation System.
(ii) During the Term and during the Termination Period, the
Executive shall not, directly or indirectly, (i) induce or attempt to influence
any employee of the Company or its Subsidiaries to leave its employ, (ii) aid or
agree to aid any competitor, customer or supplier of the Company or its
Subsidiaries in any attempt to hire any person who shall have been employed by
the Company or its Subsidiaries within the one-year period preceding such
requested aid, or (iii) induce or attempt to influence any person or business
entity who was a customer of the Company or its Subsidiaries during any portion
of the Term or the Termination Period to transact business with a competitor of
the Company in the Company's business.
(iii) During the Term, the Termination Period and thereafter,
the Executive shall not disclose to anyone any material information about the
affairs of the Company or its Subsidiaries, including trade secrets, trade
"know-how," inventions, customer lists, business plans, operational methods,
pricing policies, marketing plans, sales plans, identity of customers, sales,
Employment Agreement--Page 10
profits or other financial information which is confidential to the Company or
is not generally known in the relevant trade.
(c) If the Executive breaches, or threatens to commit a breach of
Section 6(b) (the "Restrictive Covenants"), the Company shall have the following
rights and remedies, each of which shall be in addition to any other rights and
remedies available to the Company at law or in equity: The Executive
acknowledges and agrees that in the event of a violation or threatened violation
of any of the provisions of Sections 6(b), the Company shall have no adequate
remedy at law and shall therefore be entitled to enforce each such provision by
temporary or permanent injunctive or mandatory relief obtained in any court of
competent jurisdiction without the necessity of proving damages, posting any
bond or other security, and without prejudice to any other rights and remedies
which may be available at law or in equity.
(d) If any of the Restrictive Covenants, or any part thereof, is
held to be invalid or unenforceable, the same shall not affect the remainder of
the covenant or covenants, which shall be given full effect, without regard to
the invalid or unenforceable portions. Without limiting the generality of the
foregoing, if any of the Restrictive Covenants, or any part thereof, is held to
be unenforceable because of the duration of such provision or the area covered
thereby, the parties hereto agree that the court making such determination shall
have the power to reduce the duration and/or area of such provision and, in its
reduced form, such provision shall then be enforceable.
(e) The parties hereto intend to and hereby confer jurisdiction to
enforce the Restrictive Covenants upon the courts of any jurisdiction within the
geographical scope of such Restrictive Covenants. In the event that the courts
of any one or more of such jurisdictions shall hold such Restrictive Covenants
wholly unenforceable by reason of the breadth of such scope or otherwise, it is
the intention of the parties hereto that such determination not bar or in any
way affect the Company's right to the relief provided above in the courts of any
other jurisdictions within the geographical scope of such Restrictive Covenants,
as to breaches of such covenants as they relate to each jurisdiction being, for
this purpose, severable into diverse and independent covenants.
7. No Mitigation Obligation. The Company hereby acknowledges that it will
be difficult, and may be impossible, for the Executive to find reasonably
comparable employment in the event of his termination pursuant to the provisions
of Section 5(b) (without Cause) or Section 5(c) because of a Material Breach or
Section 5(d) for Good Reason, and that the noncompetition covenant contained in
Section 6 will further limit the employment opportunities for the Executive.
Accordingly, the parties hereto expressly agree that the payment of the
Severance Benefit or Extended Severance Benefit by the Company to the Executive
in accordance with the terms of this Agreement will be liquidated damages, and
the Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall any profits, income, earnings or other benefits from any source whatsoever
create any mitigation, offset, reduction or any other obligation on the part of
the Executive hereunder or otherwise.
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8. Legal Fees and Expenses. (a) Except as provided in Section 8(b), each
party shall pay or cause to be paid and shall be solely responsible for any and
all attorneys' and related fees and expenses incurred by it in connection with
any dispute arising with respect to this Agreement; provided, however, that if
the Executive prevails in any such dispute, the Company shall reimburse the
Executive for any and all such fees and expenses incurred by the Executive in
connection with such dispute.
(b) Except in the event that the Executive is terminated for
Cause, it is the intent of the Company that, if a Change in Control has
occurred, the Executive not be required to incur the expenses associated with
the enforcement of his rights under this Agreement by litigation or other legal
action because the cost and expense thereof would substantially detract from the
benefits intended to be extended to the Executive hereunder. Accordingly, if it
should appear to the Executive that, after a Change in Control, the Company has
failed to comply with any of its obligations under this Agreement or if the
Company or any other person takes any action to declare this Agreement void or
unenforceable, or institutes any litigation designed to deny, or to recover
from, the Executive the benefits intended to be provided to the Executive
hereunder, the Company irrevocably authorizes the Executive from time to time to
retain counsel of his choice, at the expense of the Company as hereinafter
provided, to represent the Executive in connection with the initiation or
defense of any litigation or other legal action, whether by or against the
Company or any director, officer, stockholder or other person affiliated with
the Company, in any jurisdiction. If a Change in Control has occurred, the
Company shall pay or cause to be paid and shall be solely responsible for any
and all attorneys' and related fees and expenses incurred by the Executive as a
result of the Company's failure to perform this Agreement or any provision
hereof or as a result of the Company or any person contesting the validity or
enforceability of this Agreement or any provision hereof as aforesaid.
9. Miscellaneous. (a) The Company may, from time to time apply for and
take out, in its own name and at its own expense, life, health, accident,
disability or other insurance upon the Executive in any sum or sums that it may
deem necessary to protect its interests, and the Executive agrees to aid and
cooperate in all reasonable respects with the Company in procuring any and all
such insurance, including without limitation, submitting to the usual and
customary medical examinations, and by filling out, executing and delivering
such applications and other instruments in writing as may be reasonably required
by an insurance company or companies to which an application or applications for
such insurance may be made by or for the Company.
(b) This Agreement is a personal contract, and the rights and
interests of the Executive hereunder may not be sold, transferred, assigned,
pledged or hypothecated, except as otherwise expressly permitted by the
provisions of this Agreement. Except as otherwise expressly provided herein, the
Executive shall not have any power of anticipation, alienation or assignment of
payments contemplated hereunder, and all rights and benefits of the Executive
shall be for the sole personal benefit of the Executive, and no other person
shall acquire any right, title or interest hereunder by reason of any sale,
assignment, transfer, claim or judgment or bankruptcy proceedings against the
Executive; provided, however, that in the event of the Executive's death, the
Executive's estate, legal representative or beneficiaries (as the case may be)
shall have the
Employment Agreement--Page 12
right to receive all of the benefits that accrued to the Executive pursuant to,
and in accordance with, the terms of this Agreement prior to the date of the
Executive's death.
(c) The Company shall have the right to assign this Agreement to
any successor of substantially all of its business or assets, and any such
successor shall be bound by all of the provisions hereof; provided, however,
that such assignment shall not preclude the exercise of the Executive's rights,
if any, pursuant to Section 5(d).
(d) Any notice required or permitted to be given pursuant to this
Agreement shall be in writing, and sent to the party for whom or which it is
intended, at the address of such party set forth below, by registered or
certified mail, return receipt requested, or at such other address as either
party shall designate by notice to the other in the manner provided herein for
giving notice.
If to the Company: Mariner Health Group, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇'▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
with copies to: ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
High Street Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
If to the Executive: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with copies to: ▇▇▇▇ and ▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
(e) This Agreement may not be changed, amended, terminated or
superseded orally, but only by an agreement in writing, nor may any of the
provisions hereof be waived orally, but only by an instrument in writing, in any
such case signed by the party against whom enforcement of any change, amendment,
termination, waiver, modification, extension or discharge is sought.
(f) Except as otherwise provided herein, this Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of Connecticut, without giving effect to the principles of conflict of
laws thereof.
(g) All descriptive headings of the several Sections of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
Employment Agreement--Page 13
(h) If any provision of this Agreement, or part thereof, is
held to be unenforceable, the remainder of this Agreement and provision, as the
case may be, shall nevertheless remain in full force and effect.
(i) Each of the parties hereto shall, at any time and from time
to time hereafter, upon the reasonable request of the other, take such further
action and execute, acknowledge and deliver all such instruments of further
assurance as necessary to carry out the provisions of this Agreement.
(j) This Agreement contains the entire agreement and
understanding between the Company and the Executive with respect to the subject
matter hereof. No representations or warranties of any kind or nature relating
to the Company or its affiliates or their respective businesses, assets,
liabilities, operations, future plans or prospects have been made by or on
behalf of the Company to the Executive; nor have any representations or
warranties of any kind or nature been made by the Executive to the Company,
expect as expressly set forth in this Agreement.
(k) The Company shall pay the reasonable legal fees and
expenses incurred by the Executive in connection with the negotiation of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
MARINER HEALTH GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Chief Executive Officer and President
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇