EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT is entered into
February 25, 2009 and effective
January 1, 2009, as approved by the Compensation Committee and the
Board, by
and between DIALYSIS CORPORATION OF AMERICA, a Florida corporation
(the
"Company"), and JOANNE ZIMMERMAN (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive has been employed
by the Company since 1997, and
has been actively involved in certain management, operations, and
performance
of services, and the Company desires to continue the employ of the
Executive
upon the terms and conditions hereinafter set forth; and
WHEREAS, the Company and the Executive
desire to set forth in writing
the terms and conditions of their agreements and understandings
with respect
to the Executive's employment by the Company.
NOW, THEREFORE, in consideration of the
premises and the mutual and
dependant promises contained herein, and the parties intending to
be legally
bound, the Company and the Executive hereby agree to the following
terms and
conditions:
1. DEFINITIONS
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1.1 "Base Rate" shall mean the
current annual base salary for the
Executive of $180,000, less standard withholdings and authorized
deductions.
1.2. "Base Salary" shall mean the
Base Rate as may be increased
pursuant to the recommendation of the President and CEO of the
Company to and
approved by the Compensation Committee within the compensation
philosophy and
objectives of the Company and policies provided for in the
Compensation
Committee Charter.
1.3 "Beneficial Ownership" shall
have the meaning given to such term in
Rule 13d-3 under the Exchange Act (as defined below); provided,
however, that
Beneficial Owner shall exclude any Person (as defined below)
otherwise
becoming a Beneficial Owner by reason of the stockholders of the
Company
approving a merger of the Company with another entity.
1.4 "Board" shall mean the board of
directors of the Company.
1.5 "CEO" shall mean the Chief
Executive Officer.
1.6 "Cause" shall mean:
(a)
the Executive is convicted of, pleads guilty to, or confesses
or otherwise admits to any felony, misdemeanor (other than a
minor
misdemeanor or traffic violation), or any act of fraud,
misappropriation or
embezzlement;
(b)
any act or omission by the Executive involving dishonesty,
malfeasance or gross negligence in the performance of the
Executive's duties
and responsibilities under this Agreement;
(c)
any material breach or default by the Executive of any of the
terms and conditions of this Agreement or any provision of any code
of
conduct adopted by the Company which
<PAGE> 1
applies to the Executive if the consequences of such violation
ordinarily
would be a termination of her employment by the Company, provided
any such
breach, default or failure to perform by the Executive, assuming
the same is
not so egregious as could be cured, continues for a period of seven
(7) days
following the date of receipt of written notice from the Company
specifying
the breach, default, or failure to perform by the Executive;
(d)
sanctions against the Executive in her capacity as an employee
of the Company by any regulatory board, agency or commission or
against the
Company because of wrongful acts or conduct of the Executive;
(e)
the Executive's commission of any improper act or conduct that
subjects the Company to disrespect or injures the reputation of the
Company;
or
(f)
the Executive terminates her relationship with the Company
without Good Reason.
1.7 "Change in Control" shall mean
any one of the following events to
occur after the date of this Agreement:
(a)
Acquisition of Stock by Third Party. Any Person (as
defined
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below) or Persons acting as a group that is or becomes the
Beneficial Owner,
directly or indirectly, of securities of the Company representing
fifty
percent (50%) or more of the combined voting power of the Company's
then
outstanding securities eligible to vote for the election of members
of the
Board unless such Person is: (i) the Company; (ii) an employee
benefit plan
(or a trust which is part of such plan) which provides benefits
exclusively
to, or on behalf of, employees or former employees of the Company;
(iii) an
underwriter temporarily holding such securities pursuant to an
offering of
such securities; or (iv) the Executive, a Person (or Persons)
controlled by
the Executive, or a group which includes the Executive;
(b)
Change in Board of Directors. During any period of two
(2)
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consecutive years (not including any period prior to the execution
of this
Agreement), individuals who at the beginning of such period
constitute the
Board, and any new director (other than a director designated by a
Person who
has entered into an agreement with the Company to effect a
transaction
described in subsections (a),(c) or (d)) whose election by the
Board or
nomination for election by the Company's stockholders was approved
by a vote
of at least two-thirds of the directors then still in office who
either were
directors at the beginning of the period or whose election or
nomination for
election was previously so approved, cease for any reason to
constitute a
least a majority of the members of the Board;
(c)
Corporate Transactions. The effective date of a merger or
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consolidation of the Company with any other entity, other than a
merger or
consolidation which would result: (i) in the voting securities of
the
Company, which are outstanding immediately prior to such merger
or
consolidation, continuing to represent (either by remaining
outstanding or by
being converted into voting securities of the surviving entity)
more than 50%
of the combined voting power of the voting securities of the
surviving entity
outstanding immediately after such merger or consolidation and with
the power
to elect at least a majority of the board of directors or other
governing
body of such surviving entity; or (ii) any transaction with or on
behalf of
an Executive or a Person within the exception as provided in
subparagraph
(a)(iv) above;
(d)
Liquidation. The approval by the stockholders of the
Company
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of a complete liquidation of the Company or an agreement for the
sale or
disposition by the Company of all or substantially all of the
Company's
assets; and
<PAGE> 2
(e)
Other Events. There occurs any other event of a nature
that
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would be required to be reported in response to Item 6(e) of
Schedule 14A of
Regulation 14A (or a response to any similar item on any similar
schedule or
form) promulgated under the Exchange Act (as defined below),
whether or not
the Company is then subject to such reporting requirement.
1.8 "Company" shall mean Dialysis
Corporation of America and all of its
current and future subsidiaries and affiliated companies and
entities and
their respective successors and assigns.
1.9 "Compensation Committee" shall
mean that committee of the Board
established by the Compensation Committee Charter and consisting of
those
independent directors responsible for considering the compensation
of the
Company's executives together with the other compensation related
matters and
policies provided for in the Compensation Committee Charter.
1.10 "Competitive Associate" shall
have the meaning as defined in
Section 8.1.
1.11 "Confidential Information"
shall have the meaning as defined in
Section 7.1.
1.12 "Current Board" shall mean all
the members of the Board as
constituted on the date of this Agreement.
1.13 "Date of Termination" shall
mean the date of the Executive's
death, the Disability Effective Date, the date on which the
Executive's
employment terminates by expiration of the Term, termination of the
Executive
for Cause or without Cause, in each case termination to be
effective on the
thirtieth (30th) day from notice by the Company, provided if
termination is
by the Company for Cause and the Cause is not so egregious as
determined
solely in the good faith of the Board, then seven (7) days from the
date of
notice to terminate for Cause for the Executive to cure such Cause
and the
Board reasonably and in good faith then determines the Cause
continues to
exist, or by the Executive for Good Reason becomes effective in
accordance
with Section 1.19, or the Effective Date for a Change in Control,
each as the
case may be.
1.14 "Disability" shall mean the
Executive's incapacity or inability to
perform the Executive's duties and responsibilities as contemplated
by this
Agreement for a period of no less than eight (8) consecutive weeks
as a
result of physical or mental illness or injury.
1.15 "Disability Effective Date"
shall be the effective date of
termination of the Executive for Disability, which shall be the
third
business day after the Company has provided written notice to the
Executive
of termination of the Executive's employment for Disability.
1.16 "Effective Date" shall mean
either the date which includes the
"closing" (as such term is commonly understood) of the transaction
which
makes a Change in Control effective if the Change in Control is
made
effective through a transaction which has such a "closing," or the
earliest
date a Change in Control is reported in accordance with any
applicable law,
regulation, rule or common practice, whichever (the closing or
reporting) is
first to occur.
1.17 "Exchange Act" shall mean the
Securities Exchange Act of 1934, as
amended.
1.18 "Executive" shall mean Joanne
Zimmerman.
1.19 "Good Reason" shall mean:
<PAGE> 3
(a)
any failure by the Company to comply with any provision of
Section 5 of this Agreement other than an insubstantial or
inadvertent
failure that is not made in bad faith and is remedied by the
Company promptly
after receipt of notice thereof from the Executive;
(b)
any termination of the Executive's employment by the Company
for a reason or in a manner not permitted by this Agreement;
(c)
any other material breach of this Agreement by the Company
that either is not made in good faith or is not remedied by the
Company
promptly after receipt of notice thereof from the Executive;
No such act
or omission as provided in subparagraphs (a) - (c) of
this Section 1.18 shall be deemed "Good Reason" under this
Agreement unless
the Executive delivers to the Compensation Committee (1) a
detailed, written
statement of the basis for the Executive's belief that such act or
omission
constitutes Good Reason, (2) within a (90) day period which starts
on the
date there is an act or omission which forms the basis for the
Executive's
belief that Good Reason exists, (3) the Executive gives such Board
a thirty
(30) day period after the delivery of such statement to cure the
basis for
such belief, and (4) the Executive actually submits the Executive's
written
resignation to the Board during the sixty (60) day period which
begins
immediately after the end of such thirty (30) day period if the
Executive
reasonably and in good faith determines that Good Reason continues
to exist
after the end of such thirty (30) day cure period.
1.20 "Inventions" shall mean all
patents, patent applications and other
proprietary rights in and to any discovery, concept, idea of any
kind or
nature, whether patentable or not, including but not limited to
processes,
methods, formulas and techniques, as well as improvements thereon,
or know-
how related thereto, concerning anything in the present or
prospective
activities of the Company, made, developed or conceived by the
Executive
during the Term, whether or not during the hours of employment or
with the
use of the Company's name or facilities.
1.21 "Person" shall mean any
individual, corporation, company, general
or limited partnership, limited liability company, joint venture,
trust, or
other entity, or as set forth in Sections 13(d) and 14(d) of the
Exchange
Act.
1.22 "Restricted Activity" shall
have the meaning as defined in Section
8.1 of this Agreement.
1.23 "Restricted Period" shall mean
the Term and for a period of one
(1) year from the Date of Termination for whatever reason or
occurrence,
provided in the event of any violation of Section 8, the Restricted
Period
shall be extended by a period of time equal to that period
beginning when the
violation commenced and ending when the violation terminated.
1.24 "Stock" shall mean the common
stock, $.01 par value per share, of
the Company's authorized capital.
1.25 "Term" shall have the meaning
as set forth in Section 3.1 of this
Agreement.
1.26 "Third Party" (plural "Third
Parties") shall mean any Person,
other than the Company.
<PAGE> 4
2. EMPLOYMENT
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2.1 Employment and Title. The
Company hereby continues to employ the
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Executive as its Vice President, Clinical Services and Compliance
Officer,
and the Executive hereby accepts such employment by the Company,
upon all the
terms and conditions of this Agreement.
3. TERM
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3.1 Term. Subject to earlier
termination as provided in Section 6,
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this Agreement shall be for three (3) years commencing on January
1, 2009 and
ending December 31, 2011 (the "Term," which includes any renewal
period).
The Term shall automatically renew each year for an additional one
(1) year
period, unless either party provides written notice to the other
party no
more than 75 days and no less than 20 days prior to the expiration
of the
Term, of such party's intent not to renew the Term for another one
(1) year
period, and accordingly this Agreement will then terminate at the
earlier of
the end of the current Term or the Date of Termination. Any
such non-renewal
shall not be deemed a termination of employment under Section 6 of
this
Agreement, and accordingly shall not provide for any additional
compensation
as otherwise provided under that Section.
4. DUTIES AND EXTENT OF SERVICES
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4.1 Duties. The Executive
shall report directly to the President and
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CEO. The Executive shall be involved with, responsible for
and oversee the
Company's clinical services, patient care and healthcare
compliance, and
overall dialysis operations, except those operations and services
for which
the medical director and other physicians are responsible, and
perform such
other duties and responsibilities as required of the Executive from
time to
time commensurate with her title and position as described in this
Section
4.1, by the President and CEO. During the Term, the Executive
shall also
serve in such other offices and positions to which she may be
appointed by
the President and CEO for no further consideration except as may be
approved
by the Compensation Committee and the Board. The Executive
agrees to devote
in good faith her full time, skill, attention, diligence and
energy
exclusively to the Company, and shall use her best efforts to be
loyal and
faithful at all times, and to exercise her talents and capabilities
toward
the interests and operations of the Company. The Executive
agrees to perform
such duties and responsibilities in conformity with and observe and
abide by
the standards and policies established by the Board.
4.2 Outside Activities. It
shall not be considered a violation of the
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foregoing for the Executive to provide assistance and services to
charitable,
industry or community organizations, boards and committees, and
manage
Executive's personal investments, so long as such activities do not
conflict
or interfere with the Company's policies and procedures or the
Executive's
performance of her duties under this Agreement and such are
adequately
disclosed as required by law. The Executive agrees not to
enter into any
other employment agreement during the Term. The Executive
shall not serve on
any board of directors or become a trustee of any trust or member
of any
partnership or other entity and shall not provide services (whether
as an
employee or independent contractor) to any for-profit Third Party;
or any
non-profit Third Party, and only as to the latter, involved in any
form of
dialysis services (which term throughout this Agreement includes
the sale,
lease or use of dialysis equipment, or providing pharmaceuticals or
therapies
relating to dialysis and similar services) during the Term absent
the written
consent of the Board, which consent shall not be unreasonably
withheld.
4.3 Primary Work Site.
Executive's primary work site for the Term
-----------------
shall be either at the Company's headquarters in Linthicum,
Maryland or Camp
Hill, Pennsylvania, or other locations as may be mutually agreed
upon by the
Executive and the Board. However, the Executive agrees and
undertakes
<PAGE> 5
to travel to the extent necessary, and shall work from such
temporary work
sites as necessary or appropriate to fulfill the Executive's duties
and
responsibilities under the terms of this Agreement.
5. COMPENSATION AND BENEFITS
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5.1 Base Salary. During the
Term, the Company will compensate the
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Executive for the services to be rendered pursuant to this
Agreement with the
Base Salary payable in accordance with the Company's normal
payroll
procedures. Base Salary for a portion of any period will be
pro rated.
5.2 Annual Bonus. The
Executive may be eligible during the Term to
------------
receive an annual bonus as recommended by the President and CEO to
the
Compensation Committee, which Committee shall review and may, at
its
discretion, recommend such bonus, as the Committee may adjust, to
the Board,
which Board shall determine whether to grant any such bonus in any
particular
year. A bonus, if any, shall be reasonable in light of the
contributions
made by the Executive to the Company and the overall performance of
the
Company and the specific performance of the Executive for such
year. Any
such bonus that may have been determined by the Compensation
Committee or the
Board to be granted shall only be earned and payable if the
Executive remains
actively employed through the end of the fiscal year for which a
bonus is to
be paid.
5.3 Executive Plans. The
Executive shall be eligible (subject to the
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terms and conditions of particular plans and programs) to
participate in such
medical, hospitalization, group health, dental, accident,
disability and life
insurance programs and plans, such 401(k) plans, profit sharing,
stock
option, incentive compensation and stock purchase plans and such
other
employee benefit programs to the same extent such plans and
programs are made
generally available by the Company to all of its other
similarly-situated
executive employees. The Company may alter, modify, add to or
delete its
benefit plans at any time as the Company or its Board may
determine, in its
sole judgment, to be appropriate without recourse by the Executive,
provided
the same does not single out the Executive. Nothing herein
shall be
construed as requiring the Company to establish or continue any
particular
benefit plan in discharge of its obligation