EXHIBIT 10.4
CONFIDENTIALITY, NON-COMPETITION AND INTELLECTUAL PROPERTY AGREEMENT
(this "Agreement"), dated as of February 28, 2006 (the "Effective Date"), among
Gentiva Health Services, Inc., a Delaware corporation ("Gentiva"; together with
all subsidiaries of Gentiva, "Parent"), The Healthfield Group, Inc., a Delaware
corporation ("Healthfield"; together with all subsidiaries of Healthfield, the
"Healthfield Group"), (together with the Parent and the Healthfield Group, the
"Companies") and Rodney D. Windley ("Executive").
WHEREAS, the Companies are currently engaged in the business of,
among other things, providing comprehensive home health care services.
WHEREAS, Tara Acquisition Sub Corp., a wholly-owned subsidiary of
Gentiva, has merged with and into Healthfield (the "Merger").
WHEREAS, Executive has an employment agreement, dated as of December
10, 2001, by and between Healthfield, Inc. and Executive (the "Employment
Agreement"). In such role, Executive received specific confidential information
relating to the businesses of the Healthfield Group, which confidential
information was necessary to enable Executive to perform Executive's duties.
Executive has played a significant role in the development and management of the
businesses of the Healthfield Group and has been entrusted with the Healthfield
Group's confidential information relating to the Healthfield Group's customers,
manufacturers, distributors and others.
WHEREAS, as part of the Merger, Executive acknowledges that his
employment with the Healthfield Group has been terminated.
WHEREAS, Executive is a holder of Healthfield preferred stock and is
receiving significant consideration as a result of the Merger.
WHEREAS, it is a condition to the closing of the Merger that
Executive enter into this Agreement.
NOW, THEREFORE, it is mutually agreed as follows:
1. Confidentiality.
(a) Executive shall not at any time after his employment with the
Healthfield Group, directly or indirectly, divulge, use, furnish, disclose,
exploit or make available to any person or entity, whether or not a competitor
of the Companies, any Unauthorized disclosure of Confidential Information. In
the event that Executive is requested or required (by deposition,
interrogatories, requests for information or documents in legal proceedings,
subpoenas, civil demand or similar process) to disclose any Confidential
Information, Executive will give the Companies prompt written notice of such
request or requirement so that the Companies may seek an appropriate protective
order or other remedy and/or waive compliance with the provisions of this
Agreement, and Executive will cooperate with the Companies' efforts to obtain
such protective order. In the event that such protective order or other remedy
is not obtained or the Companies waive compliance with the relevant provisions
of this Agreement, Executive is permitted to furnish that Confidential
Information which is legally required to be disclosed and will use his
reasonable efforts to obtain assurances that confidential treatment will be
accorded to such information.
As used herein, the term:
"Confidential Information" shall mean trade secrets, confidential or
proprietary information, and all other information, documents or materials,
relating to, owned, developed or possessed by any of the Companies, whether in
tangible or intangible form. Confidential Information includes, but is not
limited to, (i) financial information, (ii) products, (iii) product and service
costs, prices, profits and sales, (iv) new business, technical or other ideas,
proposals, plans and designs, (v) business strategies, (vi) product and service
plans, (vii) marketing plans and studies, (viii) forecasts, (ix) budgets, (x)
projections, (xi) computer programs, (xii) data bases and the documentation (and
information contained therein), (xiii) computer access codes and similar
information, (xiv) source codes, (xv) know-how, technologies, concepts and
designs, including, without limitation, patent applications, (xvi) research
projects and all information connected with research and development efforts,
(xvii) records, (xviii) business methods and recommendations, (xix) existing or
prospective client, customer, vendor and supplier information (including, but
not limited to, identities, needs, transaction histories, volumes,
characteristics, agreements, prices, identities of individual contacts, and
spending, preferences or habits), (xx) training manuals and similar materials
used by the Companies in conducting its business operations, (xxi) personnel
files of employees, directors and independent contractors of any of the
Companies, (xxii) competitive analyses, (xxiii) contracts with other parties,
(xxiv) product formulations, and (xxv) other confidential or proprietary
information that has not been made available to the trade or general public by
any of the Companies. Confidential Information shall not include any information
that (A) is or becomes generally available to the public or the trade other than
as a result of a disclosure by the Executive in violation of this Agreement or
(B) becomes available to the Executive on a non-confidential basis from a source
other than the Companies which is not prohibited from disclosing such
information to the Executive by a legal, contractual or fiduciary obligation to
the Employer or any other Person.
"Unauthorized" shall mean: (i) in contravention of the policies or
procedures of any of the Companies; (ii) otherwise inconsistent with any
measures taken by any of the Companies to protect its interests in the
Confidential Information; (iii) in contravention of any lawful instruction or
directive, either written or oral, of the board of directors, or an officer or
employee of any of the Companies empowered to issue such instruction or
directive; (iv) in contravention of any duty existing under law or contract; or
(v) to the detriment of any of the Companies; but shall not include any
disclosure which is customary in the normal course of business in the trade and
consistent with the past practice of the Companies.
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(b) Executive further agrees to take all reasonable measures to
prevent unauthorized persons or entities from obtaining or using Confidential
Information. Executive agrees to deliver to the Companies all property and
materials within Executive's possession or control which belong to any of the
Companies or which contain Confidential Information.
(c) Nothing in this Section 1 is intended to preclude Executive from
using his general knowledge and know-how regarding the management of a health
care service provider in any future employment or business venture; provided,
that Executive's use of such general knowledge and know-how does not violate the
provisions of Section 2 hereof.
2. Non-Competition; Non-Solicitation.
(a) For a period of time equal to the seventh anniversary from the
effective date of the Merger (the "Noncompete Period"), Executive will not,
directly or indirectly, engage, anywhere in the United States, whether such
engagement be as an individual, officer, director, proprietor, consultant,
employee, partner, member, stockholder, investor (other than solely as a holder
of less than three percent (3%) of the outstanding capital stock of a
corporation whose shares are publicly traded on a national securities exchange
or through a national market system or registered pursuant to Section 12(g) of
the Securities Exchange Act of 1934, as amended), creditor, consultant, advisor,
sales representative, agent or other participant, in a Restricted Business.
(b) During the Noncompete Period, Executive shall not directly or
indirectly (i) solicit, divert, or entice away any person who is an officer,
agent, or employee of, or consultant or advisor to, any of the Companies to
accept employment or a consultancy with a third party or (ii) hire any current
or future employees of the Companies, unless such person has not been employed
by any of the Companies for not less than 12 months (other than Lisa Shunnarah).
(c) During the Noncompete Period, Executive shall not solicit or
accept on behalf of yourself or anyone else any of the Companies' customers
and/or clients with a view to sell or provide any product or service competitive
with any product or service sold or provided or under development by the
Companies. For the purposes of this Agreement, the term "customer" and/or
"client" shall include any person or entity to whom the Companies, through its
offices in which you had direct or indirect oversight and managerial duties
during your employment with the Companies, have sold, provided or been obligated
to provide, any service or product, or who has otherwise received any service or
benefit from the Companies, within 24 months prior to the termination of
Executive's employment with the Companies.
"Restricted Business" shall mean either (i) the business operations
as currently operated by the Companies; (ii) home health services, including but
not limited to the provision of skilled nursing, rehabilitative therapy services
(physical, occupational and speech therapy and social work), home health aid
care, and homemaker services to pediatric, adult, and elderly patients in their
homes or places of residence; (iii) hospice care; (iv) home/durable medical
equipment and/or respiratory services; and (v) infusion therapy.
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Notwithstanding the foregoing, nothing in this Section 2 shall
prohibit Executive from (i) owning any amount of stock in Gentiva or serving in
any capacity as an officer, director or employee of Gentiva or (ii) making
passive investments in another entity (e.g. a private equity or debt fund) not
controlled by Executive that makes investments, whether debt or equity, in other
entities that may be engaged in a Restricted Business, provided that Executive
does not directly or indirectly own or control in excess of 10% of any
Restricted Business.
3. Intellectual Property. Executive agrees that during the term of
Executive's employment with the Healthfield Group, any and all inventions,
discoveries, innovations, writings, domain names, improvements, trade secrets,
designs, drawings, business processes, secret processes and know-how, whether or
not patentable or a copyright or trademark, which Executive created, conceived,
developed or made, either alone or in conjunction with others and related or in
any way connected with any of the Healthfield Group, its strategic plans,
products, processes, apparatus or business now or hereafter carried on by any of
the Companies (collectively, "Inventions"), were fully and promptly disclosed to
the Companies and shall be the sole and exclusive property of the Companies (as
they shall determine) as against Executive or any of Executive's assignees.
Executive represents that there are no Inventions with respect to any of the
Companies conceived of, developed or made by Executive before the date of this
Agreement which have not been disclosed to and assigned to the Companies.
At any time after Executive's employment with the Healthfield Group,
Executive further agrees to execute and acknowledge all papers and to do, at the
Companies' expense, any and all other things necessary for or incident to the
applying for, obtaining and maintaining of such letters patent, copyrights,
trademarks or other intellectual property rights, as the case may be, and to
execute, on request, all papers necessary to assign and transfer such
Inventions, copyrights, patents, patent applications and other intellectual
property rights to the Companies, their successors and assigns (as they shall
determine). In the event that the Companies are unable, after reasonable efforts
and, in any event, after thirty (30) business days, to secure Executive's
signature on a written assignment to the Companies, of any application for
letters patent, trademark registration or to any common law or statutory
copyright or other property right therein to which the Companies are entitled to
ownership pursuant to this Section 3, whether because of his physical or mental
incapacity, or for any other reason whatsoever, Executive irrevocably designates
and appoints the Secretary or any Assistant Secretary of the Parent as
Executive's attorney-in-fact to act on Executive's behalf to execute and file
any such applications and to do all lawfully permitted acts to further the
prosecution or issuance of such assignments, letters patent, copyright or
trademark; provided, however, that the provisions of this sentence shall not
apply if the Executive disputes in writing the Companies' ownership of the
intellectual property rights which are the subject of the proposed assignment.
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4. Non-Disparagement. Executive shall not make any false, defamatory
or disparaging statements about any of the Companies or any of its officers,
directors and employees. No officer or director of the Parent shall make any
false, defamatory or disparaging statements about the Executive.
5. No Right to Continued Employment. Nothing in this Agreement shall
confer upon Executive any right to continue in the employ of the Companies or
shall interfere with or restrict in any way the rights of the Companies, which,
subject to the terms of the Employment Agreement, are hereby reserved, to
discharge Executive at any time for any reason whatsoever, with or without
cause.
6. No Conflicting Agreements. Executive warrants that Executive is
not bound by the terms of a confidentiality agreement, non-competition or other
agreement with a third party that would conflict with Executive's obligations
hereunder.
7. Remedies. The period of time during which the restrictions set
forth in Section 2(a) hereof will be in effect will be extended by the length of
time during which Executive is in breach of the terms of those provisions as
finally determined by any court of competent jurisdiction.
8. Successors and Assigns. This Agreement shall be binding upon
Executive and Executive's heirs, assigns and representatives and inure to the
benefit of the Companies and their successors and assigns, including without
limitation any entity to which substantially all of the assets or the business
of any of the Companies are sold or transferred. The obligations of Executive
are personal to Executive and shall not be assigned by Executive. The Companies
may assign its rights under this Agreement to any affiliate of the Companies
that employs Executive.
9. Severability. It is expressly agreed that if any restrictions set
forth in this Agreement are found by any court having jurisdiction to be
unreasonable because they are too broad in any respect, then and in each such
case, the remaining provisions herein contained shall, nevertheless, remain
effective, and this Agreement, or any portion hereof, shall be considered to be
amended, so as to be considered reasonable and enforceable by such court, and
the court shall specifically have the right to restrict the time period or the
business or geographical scope of such restrictions to any portion of the time
period, business or geographic areas to the extent the court deems such
restriction to be necessary to cause the covenants to be enforceable and, in
such event, the covenants shall be enforced to the extent so permitted and the
remaining provisions shall be unaffected thereby. In such event, the parties
hereto agree to execute all documents necessary to evidence such amendment so as
to eliminate or modify any such unreasonable provision in order to carry out the
intent of this Agreement insofar as possible and to render this Agreement
enforceable in all respects as so modified. The covenants contained in this
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Section 9 shall be construed to extend to separate jurisdictions or
subjurisdictions of the United States in which the Companies, during the term of
Executive's employment, have been or are engaged in business, and to the extent
that any such covenant shall be illegal and/or unenforceable with respect to any
jurisdiction, said covenant shall not be affected thereby with respect to each
other jurisdiction, such covenants with respect to each jurisdiction being
construed as severable and independent. Any covenant on Executive's part
contained hereinabove, which may not be specifically enforceable, shall
nevertheless, if breached, give rise to a cause of action for monetary damages.
The restrictive covenant provisions of this Agreement shall govern to the extent
there is any conflict between their terms and the terms of any other agreement
or understanding with the Companies.
10. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed given (i) when delivered
personally by hand (with written confirmation of receipt), (ii) when sent by
facsimile (with written confirmation of transmission) or (iii) one Business Day
following the day sent by overnight courier (with written confirmation of
receipt), in each case at the following addresses and facsimile numbers (or to
such other address or facsimile number as a party may have specified by notice
given to the other party pursuant to this provision):
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If to the Companies, to: with a copy to:
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Gentiva Health Services, Inc. Weil, Gotshal & Manges LLP
3 Huntington Quadrangle, Suite 200S 767 Fifth Avenue
Melville, NY 11747-4627 New York, NY 10153
Attention: Stephen B. Paige, General Counsel Attention: Jeffrey J. Weinberg, Esq.
Facsimile: (913) 814-5920 Facsimile: (212) 310-8007
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If to the Executive, to:
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Executive's address set forth
beneath Executive's Greenberg Traurig
signature on this Agreement. The Forum
3290 Northside Parkway, NW
Suite 1400
Atlanta, GA 30327
Attention: Gary Snyder, Esq.
Facsimile: (678) 553-2212
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11. Amendment. No provision of this Agreement may be modified,
amended, waived or discharged in any manner except by a written instrument
executed by the Companies and Executive.
12. Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof, and supersedes
all prior agreements and understandings of the parties hereto, oral or written,
with respect to the subject matter hereof. Except as superseded by this
Agreement, the Employment Agreement will remain in full force and effect in
accordance with its terms.
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13. Waiver, etc. The failure of the Companies to enforce at any time
any of the provisions of this Agreement shall not be deemed or construed to be a
waiver of any such provision, nor in any way affect the validity of this
Agreement or any provision hereof or the right of the Companies to enforce
thereafter each and every provision of this Agreement. No waiver of any breach
of any of the provisions of this Agreement by the Companies shall be effective
unless set forth in a written instrument executed by the Companies, and no
waiver of any such breach shall be construed or deemed to be a waiver of any
other or subsequent breach.
14. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be wholly performed therein without reference to conflicts of law
principles, except as otherwise provided.
15. Enforcement. If any party shall institute legal action to enforce
or interpret the terms and conditions of this Agreement or to collect any monies
under it, venue for any such action shall be the State of New York. Each party
irrevocably consents to the jurisdiction of the courts located in the State of
New York for all suits or actions arising out of this Agreement. Each party
hereto waives to the fullest extent possible, the defense of an inconvenient
forum, and each agrees that a final judgment in any action shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day written above.
GENTIVA HEALTH SERVICES, INC.
By: /s/ John R. Potapchuk
---------------------------------------
Name: John R. Potapchuk
Title: Senior Vice President, Chief
Financial Officer & Treasurer
THE HEALTHFIELD GROUP, INC.
By: /s/ Tony Strange
--------------------------------------
Name: Tony Strange
Title: President
RODNEY D. WINDLEY
/s/ Rodney D. Windley
------------------------------------------
Rodney D. Windley
121 LePort
Pensacola Beach, Florida 32561