EXHIBIT 10.85
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of this 1ST day of July, 1998 (the
"Effective Date"), by and between INTEGRATED HEALTH SERVICES, INC., a Delaware
corporation (hereinafter referred to as the "Company"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(hereinafter referred to as the "Executive").
W I T N E S S E T H:
WHEREAS, Employer is engaged in the business of owning and operating
nursing care facilities, rehabilitation service providers and other health
care-related businesses through its subsidiaries and tradenames; and
WHEREAS, Employer wishes to employ Employee, and Employee wishes to accept
such employment, on the terms and conditions set forth herein; and
WHEREAS, in the course of her employment, and as a necessary consequence
thereof, Employee will receive information and acquire knowledge of special
procedures, processes, business conduct, and knowledge that is private,
proprietary, and secret to the Company in its business; and
WHEREAS, the business, as well as the success and profits of the Company,
depend in large part upon the maintenance of secrecy as to such information,
processes, procedures and knowledge as to the conduct of the Company's business
generally.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
agreements herein contained, as well as the agreement to employ the Employee or
to continue to employ the Employee under the terms and conditions contained
herein, and intending to be legally bound hereby, it is agreed between the
parties hereto as follows:
ARTICLE I
EMPLOYMENT RELATIONSHIP
1.1 Employment. The Company hereby employs the Executive in the position
of President - Symphony Health Services, Inc. and Executive Vice President, with
such responsibilities as may be assigned to Executive from time to time by the
Company's Chief Executive Office and/or President. Executive shall report to and
be responsible to the Chief Executive Officer and/or President during the Term
of this Agreement, and Executive hereby accepts such employment.
During the Term, the Executive agrees to devote all such working time as
is reasonably required for the discharge of her duties hereunder and to perform
such services faithfully and to the best of her ability. Notwithstanding the
foregoing, nothing in this Agreement shall preclude the Executive from (a)
engaging in charitable and community affairs, so long as they are consistent
with her duties and responsibilities under this Agreement, (b) managing her
personal investments, and (c) serving on or advising the boards of directors of
other companies.
1.2 Term. Unless sooner terminated pursuant to Article III below, the term
of this Agreement (the "Term") shall commence on the Effective Date and be in
effect for three (3) years; provided, however, that on each anniversary date of
the Effective Date ("Anniversary Date"), the then current term of this Agreement
automatically shall be extended by an additional period of twelve (12) months,
so that as of each Anniversary Date, this Agreement shall have an unexpired Term
of three (3) years. Notwithstanding the foregoing, either party hereto may elect
not to so extend this Agreement by giving written notice of her or its election
to the other party hereto at least one hundred twenty (120) days prior to any
Anniversary Date. In the event the Company elects not to renew this Agreement
with appropriate notice as provided herein, the Company may buy out the
remaining term of the Agreement through the payment of severance to the
Executive as provided in Section 3.4.
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ARTICLE II
COMPENSATION
2.1 Salary. The Executive shall receive a base salary at an initial rate
of Three Hundred Forty-Nine Thousand Nine Hundred and Twenty Dollars ($349,920)
per year (the "Salary") payable in substantially equal installments in
accordance with the pay policy established by the Company from time to time, but
not less frequently than monthly. On each January 1 during the Term of this
Agreement, the Salary shall be increased by a percentage which is equal to the
greater of (i) eight percent (8%) of her Salary; or (ii) the percentage increase
in the "Consumer Price Index for All Urban Consumers" published by the United
States Department of Labor's Bureau of Labor Statistics for the then most
recently ended twelve (12) month period as of the date of such adjustment, and
increased by such additional amounts as may be determined at the discretion of
the Chief Executive Officer and/or President. Once adjusted, such adjusted
amount shall constitute Salary for purposes of this Agreement.
2.2 Bonus. If the Company's earnings per share equal or exceed the
earnings goals set by the Board (the "Target"), then no more than ten (10) days
following the date the Company publicly announces its earnings, the Company
shall pay Executive a discretionary bonus ("Bonus") based on Executive's
performance, benefit to the Company at large, and the extent to which the
Company equals or exceeds the Target. Such Bonus shall be discretionary except
that if the Company's earnings per share equal or exceed the Target then
Executive shall receive a bonus of not less than fifty percent (50%) of her
Salary.
2.3 Executive Benefits and Perquisites. During the Term, the Company shall
provide and/or pay for employee benefits and perquisites that are, in the
aggregate, no less favorable than the employee benefits and perquisites that the
Executive enjoys as of the Effective Date, as may be increased from time to
time, including without limitation:
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(a) comprehensive individual health insurance, including
dependent coverage;
(b) life insurance coverage in the amount of One Million Dollars
($1,000,000) any proceeds of which shall be payable to the Executive's
designated beneficiary or her estate;
(c) four (4) weeks paid vacation annually;
(d) disability insurance coverage in a monthly benefit amount
equal to the sum of 100% of Executive's Salary plus "Bonus Amount" (as
defined in Section 3.4(a));
(e) a monthly automobile allowance of $1,000 per month;
(f) participation in the Company's SERP(s); and
(g) eligibility to participate in the Company's Employee Stock
Participation Program.
Once increased, the level of benefits and perquisites shall not be decreased
without the Executive's consent. No amendment of any SERP(s) that is adverse to
Executive shall be effective as to Executive without her prior written consent
(or, if she is no longer living, the consent of her beneficiary (or
beneficiaries) designated in accordance with the Trust Agreement(s) (as defined
in the SERP(s)). Any interpretation, construction, determination, act or failure
to act of the Company or the "Committee" (as defined in the SERP(s)) that
relates to the SERP(s) and is adverse to Executive shall be subject to de novo
review in accordance with Section 6.9 of this Agreement.
2.4 Equity-Based Compensation. During the Term, the Compensation
Committee, in its complete discretion, may select the Executive to participate
in programs or enter into agreements that provide for the grant of certain
equity-based compensation or rights to the Executive.
ARTICLE III
TERMINATION AND SEVERANCE
3.1 Termination; Nonrenewal. The Company shall have the right to terminate
the Executive's employment, and the Executive shall have the right to resign her
employment with the Company at any time during the Term, for any reason or for
no stated reason, upon no less than ninety
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(90) days' prior written notice (or such shorter notice to the extent provided
for herein). In addition, if there is a Change of Control (as defined in Section
3.3(b)) during the Term of this Agreement, this Agreement automatically shall
terminate on the one hundredth and eightieth (180th) day following the
anniversary date of the Change of Control.
Upon the Executive's termination without "Cause" (as defined in Section
3.2) or resignation for "Good Reason" (as defined in Section 3.3), or upon the
expiration of the Term following the Company's election not to renew this
Agreement (in accordance with Section 1.2) or this Agreement's automatic
termination following a Change of Control (in accordance with Section 3.1,
above), the Executive shall be entitled to severance as set forth in Section
3.4. Upon the Executive's resignation without Good Reason, the Executive shall
not be entitled to severance; provided, however, that the Company may be
required to pay the Executive non-competition severance as provided in Section
4.2, below. If the Executive's employment is terminated because of a Permanent
Disability (as defined in Section 3.5), the Executive shall receive the benefits
and payments described in Section 3.5.
3.2 Termination For Cause. (a) The Company may terminate this Agreement
for Cause following a determination by the Chief Executive Officer that Cause
exists. For purposes of this Agreement, Cause shall mean any or all of the
following:
(i) the Executive materially fails to perform her duties
hereunder;
(ii) a material breach by the Executive of her covenants under
Sections 4.1 4.2;
(iii) Executive is convicted of or pleads guilty or confesses to
a felony involving moral turpitude; or
(iv) Executive is convicted of or pleads guilty or confesses to
theft, larceny or embezzlement of Employer's tangible or intangible
property.
(b) Notwithstanding anything in Section 3.2(a) to the contrary, a
termination shall not be for Cause unless (i) the party to whom the Executive
reports notifies the Executive, in writing, of their intention to terminate the
Executive for Cause (which notice shall set forth the conduct alleged
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to constitute Cause) (the "Cause Notice"); and (ii) the Executive does not cure
her conduct within sixty (60) days after the receipt of the Cause Notice.
3.3 Termination for Good Reason. (a) The Executive may terminate this
Agreement for Good Reason, provided she gives the Company prior written notice
that Good Reason exists (the "Good Reason Notice"). For purposes of this
Agreement, Good Reason shall mean one or more of the following without the
Executive's prior written consent:
(i) a material diminution of the Executive's responsibilities,
title, authority or status;
(ii) the failure of the Company to pay the Executive amounts when
due under this Agreement;
(iii) the Executive's removal or dismissal from the position of
President - Symphony Health Services, Inc. and/or Executive Vice
President; or
(iv) a reduction in Salary or a material reduction in benefits
(other than a reduction in Salary permitted by Section 2.1).
Notwithstanding the foregoing, a termination on account of a reason
described in this Section 3.3 (a)(i) - (iv), above, shall be deemed not to be
for Good Reason unless the Executive (i) gives the Company the opportunity to
cure the condition that purports to be Good Reason, and (ii) the Company fails
to cure that condition within sixty (60) days after the receipt of the Good
Reason Notice (or, with respect to the failure to make any payment when due to
the Executive, within ten (10) days after the receipt of such notice).
(b) For purposes of this Agreement, a "Change of Control" shall be deemed
to occur if (i) there shall be consummated (x) any consolidation, reorganization
or merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company's common stock would be
converted into cash, securities or other property, other than a merger of the
Company in which the holders of the Company's common stock immediately prior to
the merger have the same proportionate ownership of common stock of the
surviving corporation
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immediately after the merger, or (y) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, or (ii) the stockholders of the
Company shall approve any plan or proposal for liquidation or dissolution of the
Company, or (iii) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act, including any "group" (as defined in Section
13(d)(3) of the Exchange Act) (other than the Executive or any group controlled
by the Executive)) shall become the beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act) of twenty percent (20%) or more of the Company's
outstanding common stock (other than pursuant to a plan or arrangement entered
into by such person and the Company) and such person discloses its intent to
effect a change in the control or ownership of the Company in any filing with
the Securities and Exchange Commission, or (iv) within any twenty-four (24)
month period beginning on or after the Effective Date, the persons who were
directors of the Company immediately before the beginning of such period (the
"Incumbent Directors") shall cease (for any reason other than death, disability
or retirement) to constitute at least a majority of the Board or the board of
directors of any successor to the Company, provided that, any director who was
not a director as of the Effective Date shall be deemed to be an Incumbent
Director if such director was elected to the Board by, or on the recommendation
of or with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors either actually or by prior operation of this
Section 3.3(b)(iv) unless such election, recommendation or approval was the
result of any actual or threatened election contest of the type contemplated by
Regulation 14a-11 promulgated under the Exchange Act or any successor provision.
Notwithstanding the foregoing, if the employment agreement of the Company's CEO
or President has a change of control provision which is triggered by an earlier
event not stated herein, then such event shall also be a Change of Control for
purposes of this Agreement.
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3.4 Severance. If the Executive resigns for Good Reason, is terminated
without Cause, there is a Change of Control in the Company, or the Company
elects not to renew this Agreement in accordance with Section 1.2, above:
(a) the Company shall cause the Executive's outstanding
options which are not immediately exercisable to vest and become immediately
exercisable and the restrictions on equity held by the Executive which are
scheduled to lapse solely through the passage of time to lapse (such events
collectively referred to as "Acceleration of Equity Rights") and Executive shall
have thirty-six (36) months from the date of termination to exercise any vested
options; and
(b) the Company shall pay the Executive an amount (the
"Severance Amount") equal to three (3) times the sum of her Salary in the year
of termination or the immediately preceding year, whichever is greater, and the
Bonus Amount, which shall be the greater of (i) the Executive's Bonus earned in
the year of termination, or (ii) her Bonus earned in the immediately preceding
calendar year. Such Severance Amount shall be payable in cash as follows:
(x) no later than ten (10) calendar days after the
effective date of Executive's termination or a Change of
Control, the Company shall pay the Executive one-half (1/2)
of the Severance Amount in a lump sum; and
(y) except in the event of a Change of Control, the
Company shall pay the remaining one-half (1/2) of the
Severance Amount to the Executive in equal monthly
installments commencing on the first day of the month
following the effective date of Executive's termination
without Cause, the Executive's resignation for Good Reason
or the Company's notice to the Executive of its intention
not to renew this Agreement, and on the first day of the
month thereafter for a period of eighteen months (18)
months; or
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(z) in the event of a Change of Control,
(i) the Company shall pay the remaining
one-half (1/2) of the Severance Amount to the Executive in a
lump sum no later than ten (10) calendar days from the date of
the Executive's termination without Cause, resignation for
Good Reason or this Agreement's expiration following a Change
of Control under Section 3.1; and
(ii) the Company shall pay the Executive her
Salary for the lesser of six (6) additional months or the
amount of Salary due until the expiration of this Agreement
following a Change of Control under Section 3.1 if, within
eighteen (18) months following a Change of Control, she is
terminated without Cause or the Executive terminates the
Agreement for Good Reason.
The Company shall have no obligation to pay the Executive the balance of
the Severance Amount or any other benefit hereunder after a Change of Control if
the Executive terminates this Agreement without Good Reason. The amounts owed to
the Executive under (i) and (ii), above shall constitute the total remaining
Severance Amount (excluding Continued Benefits) to which the Executive is
entitled hereunder after a Change of Control.
(c) the Company shall provide for a period of thirty-six (36) months
following the effective date of the Executive's termination (including a
termination resulting from the Company's election not to renew the Term or
renegotiate this Agreement after its automatic termination following a Change of
Control), continued employee benefits and coverage for the Executive and his
dependents of the type and at a level of coverage comparable to the coverage in
effect at the time of termination or the preceding year,
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whichever is greater ("Continued Benefits"), including but not limited to those
benefits and perquisites set forth in Section 2.3. Such allowances, benefits and
coverages, etc., to be not less than those in effect on the effective date of
Executive's termination or the preceding year, whichever is greater.
Notwithstanding the foregoing, if any of the Continued Benefits or other
benefits to be provided hereunder have been decreased or otherwise negatively
affected within twelve (12) months prior to the effective date of the
Executive's termination, the reference for measuring such benefit shall be the
date prior to such reduction rather than the date of such termination.
3.5 Termination for Disability. (a) The Company may terminate the
Executive following a determination by the Chief Executive Officer or President
that the Executive has a Permanent Disability; provided, however, that no such
termination shall be effective (i) prior to the expiration of the six (6) month
period following the date the Executive first incurred the condition which is
the basis for the Permanent Disability or (ii) if the Executive begins to
substantially perform the significant aspects of her regular duties prior to the
proposed effective date of such termination. For purposes of this Agreement,
"Permanent Disability" shall mean the Executive's inability, by reason of any
physical or mental impairment, to substantially perform the significant aspects
of her regular duties, as contemplated by this Agreement, which inability is
reasonably contemplated to continue for at least one (1) year from its
incurrence and at least ninety (90) days from the effective date of the
Executive's termination. Any question as to the existence, extent, or
potentiality of the Executive's Permanent Disability shall be determined by a
qualified independent physician selected by the Executive (or, if the Executive
is unable to make such selection, by the person designated in writing by
Executive prior to her inability to make such selection, and in the absence of
such designation by an adult member of the Executive's immediate family) and
reasonably acceptable to the Company.
(b) If the Executive is terminated because of his Permanent
Disability, the Company shall (i) provide for the Acceleration of Equity Rights;
(ii) pay for a period of thirty-six (36) months following the effective date of
such termination (the "Disability Period") the Executive one hundred (100%)
percent of her Salary plus Bonus, offset by the amount, if any, paid to the
Executive under the salary replacement portion of disability benefits paid under
a disability plan or policy paid for by the
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Company, and (iii) provide her with Continued Benefits for the first eighteen
(18) months of the Disability Period.
3.6 Death or Disability After Termination. Should the Executive die or
become disabled before receipt of any or all payments to which the Executive is
entitled to under Section 3.4 (or in the case of the Executive's death following
her termination on account of Permanent Disability, before receipt of all
payments under Section 3.5) then the balance of the payments to which the
Executive is entitled shall continue to be paid to the Executive (in the case of
his disability) or to the executors or administrators of the Executive's estate
(in the event of the Executive's death); provided, however, that the Company
may, at any time within its discretion, accelerate any payments and pay the
Executive or her estate the present value of such payments in a lump sum cash
payment. For purposes of determining the present value under this Section 3.6,
the interest rate shall be the prime rate of Citibank, N.A.
ARTICLE IV
COVENANTS OF THE EXECUTIVE
4.1 Confidential Information. In connection with his employment at the
Company, the Executive will have access to confidential information consisting
of some or all of the following categories of information:
(a) Financial Information, including but not limited to
information relating to the Company's earnings, assets, debts, prices,
pricing structure, volume of purchases or sales or other financial data
whether related to the Company or generally, or to particular products,
services, geographic areas, or time periods;
(b) Supply and Service Information, including but not limited
to information relating to goods and services, suppliers' names or
addresses, terms of supply or service contracts or of particular
transactions, or related information about potential suppliers to the
extent that such information is not generally known to the public, and
the extent that the combination of suppliers or use of a particular
supplier, though generally known or available, yields advantages to the
Company details of which are not generally known;
(c) Marketing Information, including but not limited to
information relating to details about ongoing or proposed marketing
programs or agreements by or on behalf of the
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Company, sales forecasts, advertising formats and methods or results of
marketing efforts or information about impending transactions;
(d) Personnel Information, including but not limited to
information relating to employees' personnel or medical histories,
compensation or other terms of employment, actual or proposed
promotions, hirings, resignation, disciplinary actions, terminations or
reasons therefor, training methods, performance, or other employee
information; and
(e) Customer Information, including but not limited to
information relating to past, existing or prospective customers' names,
addresses or backgrounds, records of agreements and prices, proposals
or agreements between customers and the Company, status of customers'
accounts or credit, or related information about actual or prospective
customers as well as customer lists.
All of the foregoing are hereinafter referred to as "Trade Secrets." The
Company and the Executive consider their relation one of confidence with respect
to Trade Secrets. Therefore, during and after the employment by the Company,
regardless of the reasons that such employment ends, the Executive agrees:
(aa) To hold all Trade Secrets in confidence and not
discuss, communicate or transmit to others, or make any
unauthorized copy of or use the Trade Secrets in any capacity,
position or business except as it directly relates to the
Executive's employment by the Company;
(bb) To use the Trade Secrets only in furtherance of
proper employment related reasons of the Company to further
the interests of the Company;
(cc) To take all reasonable actions that the Company
deems necessary or appropriate, to prevent unauthorized use or
disclosure of or to protect the Company's interest in the
Trade Secrets; and
(dd) That any of the Trade Secrets, whether prepared
by the Executive or which may come into the Executive's
possession during the Executive's employment hereunder, are
and remain the property of the Company and its affiliates, and
all such Trade Secrets, including copies thereof, together
with all other property belonging to the Company or its
affiliates, or used in their respective businesses, shall be
delivered to or left with the Company.
This Agreement does not apply to (i) information that by means other
than the Executive's deliberate or inadvertent disclosure becomes known to the
public; (ii) disclosure compelled by judicial or administrative proceedings
provided the Executive affords the Company the opportunity to obtain assurance
that compelled disclosures will receive confidential treatment; and (iii)
information
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independently developed by the Executive, the development of which was not a
breach of this Agreement.
4.2 Non-Competition. In consideration of the Executive's employment
hereunder, during the Term and for a period of eighteen (18) months thereafter
(or in the event of the Executive's termination for Cause, for a period of one
(1) year thereafter), subject to the exceptions set forth below in this Section
4.2, the Executive agrees that she will not, without the express written consent
of the Company, for the Executive or on behalf of any other person, firm, entity
or other enterprise (i) directly or indirectly solicit for employment or
recommend to any subsequent employer of the Executive the solicitation for
employment of any person who, at the time of such solicitation is employed by
Company or any affiliate thereof, (ii) directly or indirectly solicit, divert,
or endeavor to entice away any customer of the Company or any affiliate thereof,
or otherwise engage in any activity intended to terminate, disrupt, or interfere
with the Company's or any affiliate's relationship with a customer, supplier,
lessor or other person, or (iii) be employed by, be a director, officer or
manager of, act as a consultant for, be a partner in, have a proprietary
interest in, give advice to, loan money to or otherwise associate with, any
person, enterprise, partnership, association, corporation, joint venture or
other entity which is directly or indirectly in the business of owning,
operating or managing any (1) healthcare facility or business, including but not
limited to, any subacute healthcare facility, rehabilitation hospital,
rehabilitation services provider, nursing home, or home health care business, or
(2) any other business similar to a business which is or was owned, operated or
managed by the Company during the Term or during the period that this Section
4.2 shall apply to the Executive, unless such business comprises (and has during
the preceding twelve (12) month period comprised) less than five percent (5%) of
the Company's gross revenues; and, in the case of any facility or business
described, in either case, which competes with any such type of facility or
business then operated by the Company or any of its subsidiaries; except that
the provisions of this Section 4.2 shall not apply if the Executive is
terminated
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without cause before the anniversary of a Change of Control, or if the Executive
resigns without Good Reason and the Company does not pay her non-competition
severance pay (not to include Continued Benefits) of one-twelfth (1/12) of the
sum of Executive's salary plus bonus in the previous year for each month (not to
exceed eighteen (18)) the Company elects to bind the Executive to the
non-competition obligation in this Section 4.2.
This Section 4.2 shall not be construed to prohibit the Executive from
owning up to 10% of the outstanding voting shares of the equity securities of
any company whose common stock is listed for trading on any national securities
exchange or on the NASDAQ System or serving as a director or advisor to the
board of directors of any company. Section 4.2 shall only apply to businesses
and operations located in, or otherwise conducted in, the United States.
Moreover, in the event of a Change of Control of the Company, the restrictions
in Section 4.2 (iii), above, shall be limited to the businesses itemized
therein, if any, which the Company continues to own, operate or manage after the
Change of Control.
4.3 Remedies For Breach of Article IV. In the event that the Executive
materially violates the covenants contained in this Article IV after her
termination of employment under circumstances which entitle her to payments or
benefits under Section 3.4, the Company may, at its election, upon ten (10)
days' prior notice, terminate the Severance Period and cease providing the
Executive with such payments and benefits. In addition, the Executive
acknowledges and agrees that the amount of damages in the event of the
Executive's breach of this Article IV will be difficult, if not impossible, to
ascertain. The Executive therefore agrees that the Company, in addition to, and
without limiting any other remedy or right it may have, shall have the right to
an injunction enjoining any breach of the covenants made by the Executive in
this Article IV. The Executive further agrees that in the event an injunction is
granted in connection with actual or alleged breach of the noncompetition
convenants herein, the
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eighteen (18) month restrictive period shall begin to run from the date the
injunction is issued (and not from the effective date of the Executive's
termination).
ARTICLE V
AMENDMENT AND ASSIGNMENT
5.1 Right of the Executive to Assign. The Executive may not assign,
transfer, pledge or hypothecate or otherwise transfer her rights, obligations,
interests and benefits under this Agreement and any attempt to do so shall be
null and void.
5.2 Right of Company to Assign. This Agreement shall be assignable and
transferable by the Company and any such assignment or transfer shall inure to
the benefit of and be binding upon the Executive, the Executive's heirs and
personal representatives, and the Company and its successors and assigns. The
Executive agrees to execute all documents necessary to ratify and effectuate
such assignment. An assignment of this Agreement by the Company shall not
release the Company from its monetary obligations under this Agreement.
5.3 Amendment and Waiver. No change or modification of this Agreement
shall be valid unless it is in writing and signed by both parties hereto. No
waiver of any provisions of this Agreement shall be valid unless in writing and
signed by the person or party to be charged.
ARTICLE VI
GENERAL
6.1 Governing Law. This Agreement shall be subject to and governed by
the laws of the State of Maryland.
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6.2 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Company and the Executive and their respective heirs, legal
representatives, executors, administrators, successors and permitted assigns.
6.3 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all other prior agreements pertaining to the
subject matter herof, either oral or written, between the parties hereto;
provided, however, that this Agreement does not supersede any agreements
pertaining to stock options which have been granted as of the Effective Date,
except to the extent that any such option agreement contains provisions which
are contrary to the provisions of this Agreement (including provisions regarding
the Acceleration of Equity Rights), or obligation of the Executive regarding the
Company's proprietary and confidential tangible and intangible property.
6.4 Mitigation. The Executive shall not be required to mitigate damages
or the amount of any payment provided for under this Agreement by seeking other
employment or otherwise nor may any payments provided for under this Section be
reduced by any amounts earned by the Executive, except as provided in Article
IV.
6.5 Survivorship. The respective rights and obligations of the parties
hereunder shall survive the termination of this Agreement to the extent
necessary to preserve the rights and obligations of the parties under this
Agreement.
6.6 Notices. All notices, demands, requests, consents, approvals or
other communications required or permitted hereunder shall be in writing and
shall be delivered by hand, registered or certified mail with return receipt
requested or by a nationally recognized overnight
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delivery service, in each case with all postage or other delivery charges
prepaid, and to the address of the party to whom it is directed as indicated
below, or to such other address as such party may specify by giving notice to
the other in accordance with the terms hereof. Any such notice shall be deemed
to be received (i) when delivered, if by hand, (ii) on the next business day
following timely deposit with a nationally recognized overnight delivery service
,or (iii) on the date shown on the return receipt as received or refused or on
the date the postal authorities state that delivery cannot be accomplished, if
sent by registered of certified mail, return receipt requested.
If to the Company: Integrated Health Services, Inc
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice President
and General Counsel, or then General Counsel
If to the Executive: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
6.7 Indemnification. The Company
agrees to maintain Director's and
Officer's liability insurance at a level not less than the level in effect on
the Effective Date, or to the extent such level is increased during the Term, at
such increased level; provided, however, that the level of insurance may be
decreased with the Executive's written consent. To the extent not covered by
such liability insurance, the Company shall indemnify and hold the Executive
harmless to the fullest extent permitted by Delaware law against any judgments,
fines, amounts paid in settlement and reasonable expenses (including reasonable
attorneys' fees), and advance amounts necessary to pay the foregoing at the
earliest time and to the fullest extent permitted by law, in connection with any
claim, action or proceeding (whether civil or criminal) against the Executive as
a result of her serving as an officer or director of the Company or in any
capacity at the request of the Company in or with regard to any other entity,
employee benefit plan or enterprise. This indemnification shall be in effect
during the Term and thereafter and shall be in addition to and not in lieu of
any other indemnification rights the Executive otherwise may have.
6.8 Attorneys' Fees. Upon presentation of an invoice, the Company shall
pay directly or reimburse the Executive for all reasonable attorneys' fees and
costs incurred by the Executive:
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(a) in connection with any bone fide dispute over the terms of this
Agreement submitted by Executive to arbitration pursuant to Section 6.9 , unless
there is a determination that the Executive had no objectively reasonable basis
in fact or theory for her claim; or
(b) in connection with any other event indemnifiable by the Company
pursuant to insurance coverage or Delaware law in which the Executive engages
separate representation.
6.9 Arbitration. Except as otherwise provided in Section 4.3, any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted before a panel of three
arbitrators in Baltimore, Maryland, in accordance with the rules of the American
Arbitration Association then in effect, and judgement may be entered on the
arbitrators' award in any court having jurisdiction. The Company shall pay all
costs of the American Arbitration Association and the arbitrator. Each party
shall select one arbitrator, and the two so designated shall select a third
arbitrator. If either party shall fail to designate an arbitrator within seven
(7) days after arbitration is requested, or if the two arbitrators shall fail to
select a third arbitrator within fourteen (14) days after arbitration is
requested, then an arbitrator shall be selected by the American Arbitration
Association upon application of either party. Notwithstanding the foregoing, the
Executive shall be entitled to seek specific performance from a court of the
Executive's right to be paid until the date of termination during the pendency
of any dispute or controversy arising under or in connection with this Agreement
and the Company shall have the right to obtain injunctive relief from a court.
6.10 Severability. No provision in this Agreement if held unenforceable
shall in any way invalidate any other provisions of this Agreement, all of which
shall remain in full force and effect.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officers and its corporate seal to be hereunto affixed,
and the Executive has hereunto set the Executive's hand on the day and year
first above written.
COMPANY EXECUTIVE
Integrated Health Services, Inc.,
a Delaware corporation
By: ___________________________________ _________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: _________________________________
Title: __________________________________
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