EXHIBIT 10.35
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of December 1, 1995 between
Glenmark Associates, Inc., a West Virginia corporation (the "Company"), and
Mark R. Nesselroad ("Executive").
The parties acknowledge that they are entering into this Agreement
as an inducement to the Company and Executive to consummate the transactions
contemplated by the Agreement and Plan of Merger, dated as of October 18,
1995, among HRWV, Inc., an affiliate of The Multicare Companies, Inc.,
("Multicare") the Company, Glenmark Holding Company Limited Partnership,
Executive and Glenn T. Adrian (the "Merger Agreement") and that the execution
and delivery of this Agreement by the Company and Executive is a condition
precedent to the consummation of the transactions contemplated by the Merger
Agreement.
1. Employment, Duties and Acceptance.
1.1 The Company hereby employs Executive, for the Term (as
hereinafter defined), to render full-time services to the Company, and to
perform such duties consistent with Executive's title and position as he
shall reasonably be directed by the Co-Chief Executive Officers of the
Company, in connection with managing the day-to-day affairs and operations of
the facilities owned by the Company. Executive shall also develop and assist
in the development of the Company's business and the business of Multicare in
the southeastern United States.
1.2 Executive shall devote his full business time to the
business of the Company and its affiliates during the Term and shall not,
during the Term, be engaged in any other business activity, whether or not
such business activity is pursued for gain, profit or other pecuniary
advantage, without the prior written consent of the Company, except for
activities or investments not requiring Executive's services.
1.3 Executive hereby accepts such employment and agrees to
render the services described above. Executive further agrees to serve
during all or any part of the Term as an officer or director of any affiliate
of the Company or Multicare, without additional compensation therefor, if
elected or appointed to any such position by the Board of Directors or Co-
Chief Executive Officers of the Company or Multicare or of any affiliate, as
the case may be. Executive shall be provided with directors and officers
insurance in connection with his employment hereunder commensurate with that
insurance being provided from time to time to senior management of Multicare
and copies of Multicare's current policies have been delivered to Executive.
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In addition, Executive shall be indemnified by the Company pursuant to the
Company's bylaws, a copy of which has been provided to Executive.
1.4 The duties to be performed by Executive hereunder shall
be performed primarily at the offices of the Company in Morgantown, West
Virginia, subject to reasonable travel requirements on behalf of the Company.
1.5 Executive shall be entitled to a paid vacation period or
periods of twenty (20) business days during each year of the Term and shall
be entitled to observe all holidays observed by the Company.
2. Term of Employment.
The term of Executive's employment under this Agreement (the
"Term") shall commence on the Closing Date (as defined in the Merger
Agreement) and shall end on the third anniversary of the Closing Date, unless
sooner terminated pursuant to Article 4 of this Agreement.
3. Compensation.
3.1 As full compensation for all services to be rendered
pursuant to this Agreement, the Company agrees to pay Executive, during the
Term, a base salary at an initial rate of $150,000 per annum during each
twelve-month period following the Closing Date, payable in equal semi-monthly
installments, less such deductions or amounts to be withheld as shall be
required by applicable law and regulations.
3.2 Executive shall be eligible to participate in Multicare's
Key Employee Incentive Compensation Plan (the "Bonus Plan") under which
Executive may earn a maximum annual bonus equal to 30% of Executive's annual
base salary. Such bonus shall be computed and paid in accordance with the
terms of the Bonus Plan.
3.3 Executive shall be eligible to participate in the annual
grant program under Multicare's Amended and Restated 1993 Stock Option Plan.
In addition, concurrently herewith, Executive and Multicare are entering into
a stock option agreement pursuant to which Executive has been granted options
to purchase 15,000 shares of common stock of Multicare (the "Options"). The
Options shall be exercisable at a price equal to the closing price of
Multicare common stock as reported by The New York Stock Exchange on the
Closing Date and shall vest ratably over the three year period following the
date hereof, commencing on the first anniversary of the date hereof (e.g. 33
1/3 shall vest on each such anniversary).
3.4 The Company shall pay or reimburse Executive for all
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reasonable expenses actually incurred or paid by him during the Term in the
performance of his services under this Agreement, upon presentation of
expense statements or vouchers or such other supporting information as it may
require in accordance with the Company's policies in effect from time to
time.
3.5 The Company shall provide to Executive medical benefits
and medical and life insurance and disability benefits and disability
insurance comparable to the medical benefits and medical and life insurance
and disability benefits and disability insurance provided generally to its
executives.
3.6 Executive shall be entitled to receive an automobile
allowance in an amount up to $750.00 per month.
4. Termination.
4.1 If Executive shall die during the Term, the Term shall
terminate as of the date of Executive's death, and Executive's legal
representative shall be entitled to receive Executive's salary and benefits
under Section 3, for the period through and including the last day of the
month in which Executive's death occurs.
4.2 If during the Term, Executive shall become physically or
mentally disabled, whether totally or partially, so that he is unable
substantially to perform his services hereunder for (i) a period of 60
consecutive days, or (ii) for shorter periods aggregating 90 days during any
twelve-month period, the Company may at any time after the last day of the 60
consecutive days of disability or the day on which the shorter periods of
disability shall have called an aggregate of 90 days, by written notice to
Executive, terminate the Term of Executive's employment hereunder as of the
date of such notice. Executive shall be entitled to receive Executive's
salary and benefits under Section 3 for the period through and including the
date of termination of Executive's employment due to disability.
4.3 If Executive acts, or fails to act, in a manner that
provides Cause for termination, the Company may by written notice to
Executive, terminate the Term of Executive's employment hereunder at any time
as of the date of any such notice. For purposes of this Agreement, the term
"Cause" shall mean (i) the failure by Executive to perform, or gross
negligence or willful misconduct in connection with the performance of, any
of his material duties hereunder, (ii) the charging of Executive in
connection with the commission of any felony, (iii) any acts of fraud or
embezzlement by or involving Executive involving the Company or any of its
affiliates or their respective businesses or assets, (iv) Executive's failure
to comply in any material respect with the policies of the Company or (v) a
material breach of the terms of this Agreement by the Executive. Executive
shall be entitled to no compensation under this Agreement from and after the
date of termination for Cause.
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5. Covenants.
Executive acknowledges that, during the course of performing
his services hereunder, the Company and its affiliates shall be disclosing to
Executive and Executive shall become aware of or learn Confidential
Information (as defined below). Executive acknowledges that the business of
the Company and its affiliates is extremely competitive, dependent in part
upon the maintenance of secrecy, and that any disclosure of the Confidential
Information would result in serious harm to the Company and its affiliates.
Accordingly, Executive agrees as follows:
5.1 Executive shall keep confidential and shall not, during
the Term or at any time thereafter, directly or indirectly, publish or
disclose to any person, firm or corporation or other entity, whether or not a
competitor of the Company, any affairs of the Company or its affiliates,
including, without limitation, business plans, budgets and projections, other
proprietary information, any trade secrets, sources of supply, costs, pricing
practices, customer lists, financial data, employee information, or
information as to organizational structure (collectively, "Confidential
Information"). Executive shall use Confidential Information solely in
connection with his activities hereunder as an Executive of the Company, and
shall not use any Confidential Information in any way that may be detrimental
to the Company or its affiliates. Upon the expiration or termination of the
term of his employment, or at any time the Company may request, Executive
shall surrender to the Company all documents and copies of documents in his
possession comprising Confidential Information including, but not limited to,
internal and external business forms, manuals, correspondence, notes,
customer lists and computer programs, and Executive shall not make or retain
any copy or extract of any of the foregoing.
5.2 During the Term of his employment and for three years
thereafter, or if later, for three years after the date Executive stops
receiving compensation under this Agreement, Executive shall not in any state
in which the Company or any of its affiliates shall then be doing business,
directly or indirectly, engage in or be interested in (as owner, partner,
shareholder, employee, director, officer, agent, consultant or otherwise),
with or without compensation, any business which is competitive with the
business being conducted by the Company or any of its affiliates at any time
during the Term. The provisions of this Section 5.2 shall not apply to
Executive's ownership of up to 1.0% of the outstanding securities of a
competitive business whose shares are listed for trading on any national
securities exchange or through The NASDAQ Stock Market.
5.3 During the Term of his employment and for three years
thereafter, of if later, for three years after the date Executive stops
receiving compensation under this Agreement, Executive shall not, directly or
indirectly, solicit any employee of the Company (other than Fred Bierer) or
any affiliate of the Company or any person who was employed by the Company or
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any affiliate of the Company within three years prior to the time of such
solicitation to leave his employment or join the employ of another, then or
at a later time, or solicit the employment of, or permit any business of
which Executive or any affiliate of Executive is an owner, partner, executive
or holder of more than 5% of the shares, to solicit the employment of any
person who was employed by the Company or any affiliate of the Company within
three years prior to the time of such solicitation, or canvass or solicit
orders for any products from or otherwise do business with any person,
company or firm which is at the time of such solicitation or has been at any
time within three years prior to such time a customer of the Company or any
affiliate of the Company.
5.4 Executive acknowledges that the provisions of this
Section 5 are reasonable and necessary for the protection of the Company and
that the Company will be irrevocably damaged if such covenants are not
specifically enforced and that money damages will not provide an adequate
remedy to the Company. Accordingly, Executive agrees that, in addition to
any other relief to which the Company may be entitled in the form of actual
or punitive damages, the Company shall be entitled to seek and obtain
injunctive relief from a court of competent jurisdiction for the purposes of
restraining Executive from any actual or threatened breach of such covenants.
Notwithstanding the foregoing, if any one or more of the provisions of this
Section 5 shall be found by a court of competent jurisdiction to be
unreasonably restrictive under the circumstances, then such provisions shall
be modified by such court so as to apply such provisions to the maximum
extent allowed by law, and any such modification shall not affect the
validity of any other provision contained in this Agreement.
5.5 In the event Executive commits or threatens to commit a
breach of any of the provisions of Sections 5.1, 5.2 or 5.3 hereof, the
Company shall have the right and remedy to have the provisions of this
Agreement specifically enforced by any court having jurisdiction or to
require Executive to account for and pay over to the Company all
compensation, profits, monies, accruals, increments or other benefits
(collectively "Benefits") derived or received by Executive as the result of
any transactions constituting a breach or threatened breach of any of the
provisions of Sections 5.1, 5.2 or 5.3 and Executive hereby agrees to account
for and pay over such Benefits to the Company. Each of the rights and
remedies enumerated above shall be independent of the other, and shall be
severally enforceable, and all of such rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to
the Company under law or in equity.
5.6 The parties hereto intend to and hereby confer
jurisdiction to enforce the covenants contained in Section 5.1, 5.2 and 5.3
upon the courts of the State of New Jersey and any other state in the United
States in which a substantial breach of such covenants occurs. In the event
that any courts having jurisdiction over an action or event constituting a
breach of Section 5.1, 5.2 or 5.3 shall hold such covenants are not wholly
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enforceable 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 states within the geographical scope of such covenants, as to breaches
of such covenants in such other respective jurisdiction, the above covenants
as they relate to each state being, for this purpose, severable into diverse
and independent covenants.
5.7 In the event that any action, suit or other proceeding in
law or in equity is brought to enforce the covenants contained in Sections
5.1, 5.2 and 5.3 or to obtain money damages for the breach thereof, and such
action results in the award of a judgment for money damages or in the
granting of any preliminary injunction following a hearing in favor of the
Company, all court costs and reasonable attorneys' fees of the Company in
such action, suit or other proceeding shall be paid by Executive.
6. Notices.
All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given (a) when delivered
personally, (b) when transmitted by telecopy (receipt confirmed) provided
that a copy is sent concurrently by the means prescribed by clause (a) or (c)
of this Section 6, (c) on the fifth business day following mailing by
registered or certified mail (return receipt requested), or (d) on the next
business day following deposit with an overnight delivery service of national
reputation, to the parties at the following addresses and telecopy numbers
(or at such other address or telecopy number for a party as may be specified
by like notice):
If to the Company at:
Glenmark Associates, Inc.
c/o The Multicare Companies, Inc.
411 Hackensack Avenue
Hackensack, New Jersey 07601
Attention: Daniel E. Straus and General Counsel
Telephone: (201) 488-8818
Telecopier: (201) 525-5959
If to Executive at:
Route 8 Box 63A
Morgantown, West Virginia 26505
Telephone: (304) 599-8311
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With a copy to:
Houston Harbaugh
Two Chatham Center, 12th Floor
Pittsburgh, PA 15219
Attention: Michael Dempster, Esq.
Telephone: (412) 288-1841
Telecopy: (412) 281-4499
7. General.
7.1 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New Jersey
applicable to agreements made and to be performed entirely in New Jersey.
7.2 Headings. The article and section headings contained
herein are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
7.3 Entire Agreement. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter
hereof, and supersedes all prior agreements, arrangements and understandings,
written or oral, relating to the subject matter hereof.
7.4 Validity. The invalidity or unenforceability of any
provision of this Agreement in any respect shall not affect the validity or
enforceability of such provision in any other respect or of any other provi
sion of this Agreement, all of which shall remain in full force and effect.
7.5 Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended and the terms or covenants hereof
may be waived, only by a written instrument executed by both of the parties
hereto, or in the case of a waiver, by the party waiving compliance. The
failure of either party at the time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to
enforce the same. No waiver by either party of the breach of any term or
covenant contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
7.6 Affiliates. As used herein the term "affiliate" shall
mean and include any person or business entity controlling, controlled by or
under common control with the corporation in question. The term
"controlled", "controlling", "controlled by" and "under common control with",
as used with respect to any person, means the possession, directly or
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indirectly, of the power to direct or cause the direction of the management
and policies of such person, whether through the ownership of voting
securities or by contract or otherwise.
7.7 Multicare Covenant. Multicate hereby covenants and
agrees that in the event the assets of the Business (as defined in the Merger
Agreement) are transferred from the Company to another wholly-owned
subsidiary of Multicare, the transferee thereunder shall assume all of the
obligations of the Company under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
GLENMARK ASSOCIATES, INC.
/S/ MARK R. NESSELROAD
By:____________________________________
Name: MARK R. NESSELROAD
Title: CHAIRMAN
/S/ MARK R. NESSELROAD
_______________________________________
Mark R. Nesselroad
SOLELY FOR THE PURPOSES OF
SECTION 7.7 HEREOF:
THE MULTICARE COMPANIES, INC.
/S/ BRADFORD C. BURKETT
By:____________________________________
Name: BRADFORD C. BURKETT
Title: VICE-PRESIDENT
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