Exhibit 10.13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
“Agreement”) is made and entered into as of
June 1, 2000, by and between Caremark Rx, Inc., a Delaware
corporation (“Employer”), and Brad Karro
(“Officer”).
RECITALS
WHEREAS, Employer desires to
continue to retain the services of Officer and Officer desires to
serve Employer in the capacity of Executive Vice President of
Corporate Development; and
WHEREAS, Employer and Officer desire
to set forth the terms and conditions of Officer’s continued
employment with Employer under this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of
the foregoing recitals and of the mutual covenants and agreements
contained in this Agreement, the parties agree as
follows:
1. Term. Employer agrees to employ
Officer, and Officer agrees to serve Employer, on an “at
will” basis for such period (such period being the
“Term”) as Employer desires to employ Officer and
Officer agrees to serve Employer. Without limiting the generality
of the foregoing sentence, Employer shall have the right to
terminate Officer at any time for any reason or no reason without
any obligation to Officer other than for Base Salary (as
hereinafter defined) earned but unpaid through the date of such
termination and for the obligations of Employer pursuant to
Section 4(4) of this Agreement.
2. Employment of Officer.
(1) Position; Duties. Employer and
Officer agree that, subject to the provisions of this Agreement,
Officer will serve as Executive Vice President of Corporate
Development of Employer.
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3. Compensation.
(1) Salary. Employer shall pay
Officer a salary in the amount of Two Hundred Ninety-Five Thousand
Dollars ($295,000.00) per year (pro-rated for any partial year
during the Term) (the “Base Salary”) payable in equal
Bi-weekly installments, less state and federal tax and other
legally required withholdings. The Base Salary shall be subject to
review and adjustment from time-to-time consistent with past
practice.
(2) Incentive Compensation. During
the Term, Officer shall be eligible to receive from Employer
incentive compensation in an amount equal to Seventy-Five
(75%) percent of Base Salary (pro-rated for any partial
calendar year during the Term), less state and federal tax and
other legally required and Officer-authorized withholdings. The
incentive compensation contemplated by this Section 3(2) shall
be payable to Officer solely at the discretion of the Chief
Executive Officer of Employer based upon Officer’s
performance. The incentive compensation that Officer shall be
eligible to earn under this Section 3(2) shall be subject to
review and adjustment from time-to-time consistent with past
practice.
4. Benefits.
(1) Fringe Benefits. In addition to
the compensation and other remuneration provided for in this
Agreement, Officer shall be entitled, during the Term, to such
other benefits of employment with Employer as are now or may after
the date of this Agreement be in effect for employees of Employer
at the same level as Officer.
(2) Expenses. During the Term,
Employer shall reimburse Officer promptly for all reasonable
travel, entertainment, parking, business meeting and similar
expenditures in pursuit and furtherance of Employer’s
business upon receipt of reasonable supporting documentation as
required by Employer’s policies applicable to its officers
generally.
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(3) Stock Options. Officer shall
participate in the stock options plans of the Company. The
opportunity for the grant of such options will be reviewed at least
annually.
(4) Termination Benefits. Employer
shall provide to Officer the applicable benefits and/or payments
set forth below.
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(a)
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Termination by
resignation, disability or death. If this Agreement is terminated
due to Officer’s voluntary resignation, disability, or his
death, then Officer shall be entitled to only those benefits and
payments he is entitled to under the Employer’s applicable
controlling benefit plans and policies. Officer shall not be
entitled to any severance or like payments.
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(b)
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Termination for
Cause. If Employer terminates Officer’s employment for cause,
then Officer shall be entitled to only those benefits and payments
he is entitled to under the applicable controlling benefit plans
and policies. Officer shall not be entitled to any severance or
like payments. The term “Cause” shall mean Officer (i)
materially breaches any material term of this Agreement,
(ii) is convicted by a court of competent jurisdiction of a
felony, (iii) refuses, fails or neglects to perform his duties
under this Agreement in a manner substantially detrimental to the
business of Employer, (iv) engages in illegal or other
wrongful conduct substantially detrimental to the business or
reputation
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of Employer, or (v) develops or
pursues interests substantially adverse to Employer; provided,
however, that in the case of clauses (i), (iii), or (v), no such
termination shall be effective unless (1) Employer shall have given
Officer 30 days’ prior written notice of any conduct or
deficiency in performance by Officer that Employer believes could,
if not discontinued or corrected, lead to Officer’s
termination under this Section 4(3) to provide Officer an
opportunity to cure such non-compliant conduct or performance, and
(2) Officer shall not have cured such non-compliant conduct or
performance during such notice period.
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(c)
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Termination
without Cause. If Employer terminates this Agreement without cause,
it shall provide Officer with the following termination benefits:
(i.) 30 days written notice of Employer’s intention to
terminate Officer’s Agreement without cause; (ii.) A lump sum
payment equivalent to one (1) year of Officer’s current
base salary; (iii.) A lump sum payment equivalent to one
(1) year of Officer’s current annual incentive bonus;
(iv.) Continued coverage under Employer’s standard and
Executive benefit plans for one (1) year in accordance with the
terms of the applicable plans, provided, if the terms of the
applicable plan does not permit continued coverage, then Employer
shall pay to Officer the value of the applicable benefits in lump
sum upon termination of employment; and (v.) The applicable
Stock
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Option Plan shall control the
treatment of Officer’s unexercised stock options. As a
condition precedent to receiving the payments and benefits
described in this paragraph 4 (3) (c), Officer shall be
required to execute a full release of all claims for the benefit of
Employer in a form provided exclusively by Employer. Upon execution
of this release, Employer shall provide the payments and benefits
des
