Document:

Ex-10.4 Employment Agreement Amendment

 

EXHIBIT 10.4

AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

     THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered
into as of June 14, 2005, by and between COMPREHENSIVE CARE CORPORATION, a Delaware corporation
(the “Employer”), and MARY JANE JOHNSON, an individual residing in the State of Florida
(the “Executive”). Hereinafter, the Employer and the Executive are sometimes referred to
individually as a “Party” and together as the “Parties.”

W I T N E S S E T H:

     WHEREAS, the Parties have entered into an Employment Agreement, dated February 1, 2003,
pursuant to which the Executive is employed as the President and Chief Executive Officer of the
Employer (the “Employment Agreement”); and

     WHEREAS, the Parties desire to hereby amend the Employment Agreement in the manner specified
herein.

     NOW THEREFORE, in consideration of the mutual promises contained herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties
hereto agree as follows:

     1. Definitions. All capitalized terms appearing in this Agreement and defined in the
Employment Agreement shall have the definitions ascribed thereto in the Employment Agreement,
unless otherwise specifically provided for herein.

     2. Amendment to Article XI. Article XI of the Employment Agreement is hereby amended
by deleting said section in its entirety and replacing it with the following:

     This Agreement shall have an initial term commencing February 1, 2003 and terminating
on May 31, 2006. This Agreement shall be automatically renewed and extended on its same
terms and conditions for up to two consecutive eighteen month periods unless either party
gives written notice to the other at least six months prior to the initial termination date
or renewal termination date, as the case may be, of its intention not to renew. In the
event that the Company notifies Executive of its intent not to renew this Agreement, the
Company agrees to pay to Executive, upon the expiration of this Agreement without renewal,
a lump sum severance payment equal to two (2) years Base Salary. In addition, and
commencing upon the expiration of this Agreement without renewal, the Company shall, at its
expense, continue to provide Executive with her existing healthcare insurance coverage for
18 months or such shorter period that the Company may legally continue Executive’s
healthcare insurance, in which case the Company shall reimburse Executive for the cost of
comparable healthcare insurance coverage for Executive and her dependents for the period
commencing the time of termination or discontinuance of Executive’s existing healthcare
insurance and 18 months following Executive’s separation from the Company. However, no such
entitlement will continue once Executive has coverage through another employer or has been
added onto coverage available through her spouse’s employer if applicable.

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     3. Amendment to Article XII. Article XII of the Employment Agreement is hereby
amended by deleting said section in its entirety and replacing it with the following:

     In the event that the Executive becomes totally disabled so that she is unable or
prevented from substantially performing her usual duties as set forth in Article III
hereunder after sixty (60) days following a triggering event, she will be considered
terminated without cause as defined under Article XIII (C). Full salary and benefits will
continue during the sixty (60) day period. The obligation of the Company to make the
aforesaid payments shall be modified and reduced and the Company shall receive a credit for
all disability insurance payments which Executive may receive or to which she may become
entitled; provided, however, that the premiums for such disability insurance had been paid
by the Company or had been reimbursed to Executive by the Company.

     4. Amendments to Article XIII(C). In Article XIII, Section (C) of the Employment
Agreement, in the last sentence, the words “curtailment or diminution of the Executive’s duties and
responsibilities” are hereby deleted and replaced with “or total disability as defined in Article
XII herein.”

     5. Amendment to Article XIII(D). Article XIII is hereby amended by adding the
following language as Section (D) of said article:

     (D) In the event the Company materially curtails or diminishes Executive’s duties and
responsibilities, Executive may elect to voluntarily terminate her employment after
providing at least sixty (60) days notice of her intent to do so, regardless of whether the
term of this Agreement shall have expired. Materiality, for purposes of this paragraph,
shall include, but not be limited to, inserting an employee between Executive and the Board
of Directors, or between Executive and her direct reports, or excluding Executive from the
strategic planning process. In the event Executive’s employment is terminated under the
terms of this paragraph, she will receive a severance benefit equal to the greater of the
Executive’s Base Salary for the unexpired term of the Agreement, or an amount equal to two
times the amount of Executive’s Base Salary, whichever is greater.

     6. Miscellaneous. Except as specifically set forth in this Agreement, all of the
terms and provisions of the Employment Agreement shall continue to remain in full force and effect.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be
an original, and all of which together shall constitute one document. This Agreement, together
with the Employment Agreement, contains the final, complete, and exclusive expression of the
Parties’ understanding and agreement concerning the matters contemplated herein and supersedes any
prior or contemporaneous agreement of representation, oral or written, among them.

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     IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to Employment Agreement on
the day and year first written above.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	COMPREHENSIVE CARE CORPORATION	 	 	 	MARY JANE JOHNSON
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/
	 	Robert J. Landis
	 	 	 	By:
	 	/s/
	 	Mary Jane Johnson
	 	 	 	 	 	 	 	 	 
	Name: Robert J. Landis	 	 	 	 	 	Mary Jane Johnson, individually
	Title: Chairman, Chief Financial Officer, and	 	 	 	 	 	 
	Treasurer	 	 	 	 	 	 	 	 

3Ex-10.5 Employment Agreement Waiver

 

EXHIBIT 10.5

WAIVER OF CERTAIN EMPLOYMENT AGREEMENT ENTITLEMENTS

     THIS WAIVER OF CERTAIN EMPLOYMENT AGREEMENT ENTITLEMENTS (this “Agreement”) is dated as of
June 14, 2005 (the “Effective Date”) by and between ROBERT J. LANDIS (hereinafter referred to as
the “Executive”), and COMPREHENSIVE CARE CORPORATION, a Delaware corporation (hereinafter referred
to as the “Corporation”).

R E C I T A L S

     WHEREAS, the parties entered into that certain Employment Agreement dated effective February
7, 2003, as amended by that certain First Amendment dated as of the Effective Date (collectively,
the “Employment Agreement”);

     WHEREAS, the Corporation has entered into a Securities Purchase Agreement, dated as of the
Effective Date (the “Purchase Agreement”), pursuant to which the Corporation will issue to
Woodcliff Healthcare Investment Partners, LLC (the “Investor”), 14,400 shares of the Corporation’s
Series A Convertible Preferred Stock, $50.00 par value per share (“Series A Preferred Stock”) in
exchange for $3,600,000.00 in cash, which represents a purchase price of $250.00 per share, as well
as shares of the Corporation’s common stock, par value $0.01 per share, upon any exercise of the
put options by the Corporation on the terms and conditions set forth in the Purchase Agreement
(collectively, the “Private Offering”);

     WHEREAS, in conjunction with the Private Offering, the Corporation desires that Executive
waive any entitlements the Executive may receive in the Event of a Change of Control from the
Corporation and any entitlements the Executive may have to a Special Transaction Bonus as described
hereinbelow; and

     WHEREAS, this waiver of certain of the Executive’s rights pursuant to his Employment Agreement
is being delivered as a condition to the closing of the transactions contemplated by the Purchase
Agreement in favor of the Investor and as partial consideration for the Investor’s purchase of the
Series A Preferred Stock; and

     WHEREAS, Executive agrees to waive said entitlements.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter specified, and other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each
party, it is agreed as follows:

     1. Recitals; Defined Terms. The recital clauses set forth hereinabove are true and
correct and are incorporated herein by this reference. Except as expressly provided herein to the
contrary, all capitalized terms utilized in this Agreement that are not defined in this Agreement
shall have the meanings ascribed to such terms in the Employment Agreement.

     2. Waiver of Change of Control Entitlements. The parties acknowledge that Article VI
of the Employment Agreement states that, in the event of a Change of Control as described therein,
(i) the Executive, in his sole discretion, may elect to terminate his employment at any time within
one (1) year following the Change in Control and upon his election to terminate his employment, the
Corporation is obligated to pay to Executive a Severance Benefit or (ii) in the event that
Executive does not elect to terminate his employment within one year following a Change in Control
and during such one year period or at any time thereafter during the unexpired term of this
Agreement and (i) his employment is terminated by the Company for reasons other than cause, as
defined herein, or (ii) though not terminated by the Company, Executive’s duties and
responsibilities are materially curtailed or diminished from those prevailing immediately preceding
the time of the Change in Control, and following such material

 

 

curtailment or diminution, Executive elects to terminate his employment irrespective of
whether or not the term of this Agreement shall have expired, then the Company shall pay to the
Executive a severance benefit equal to the greater of the Executive’s Base Salary for the unexpired
portion of the term or an amount equal to two times the amount of Executive’s Base Salary [all of
the remuneration and benefits described in clauses (i) and (ii) of this sentence hereinafter
referred to as the (“Change of Control Entitlements”)]. In consideration of the Corporation’s
amending Executive’s Employment Agreement in connection with the Private Offering, and other good
and valuable consideration the receipt and sufficiency of which is hereby acknowledged by the
Executive, the Executive hereby waives, releases, forfeits and relinquishes any and all right,
claim, title and interest in and to the Change of Control Entitlements, and agrees that the
Corporation and its officers, directors, employees, stockholders, agents, successors and assigns
shall have no obligation to make payment of or provision for the Change of Control Entitlements in
such case.

     3. Waiver of Special Transaction Bonus. The parties acknowledge that Article VIII of
the Employment Agreement states that, upon the consummation of a Special Transaction, as described
therein, the Corporation is obligated to pay to the Executive a Special Transaction Bonus equal to
1% of the Special Transaction Value in excess of $5 million [all of the remuneration and benefits
described in this sentence hereinafter referred to as the (“Bonus Entitlements”)]. In
consideration of the Corporation’s amending Executive’s Employment Agreement in connection with the
Private Offering, and other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged by the Executive, the Executive hereby waives, releases, forfeits and
relinquishes any and all right, claim, title and interest in and to the Bonus Entitlements, and
agrees that the Corporation and its officers, directors, employees, stockholders, agents,
successors and assigns shall have no obligation to make payment of or provision for the Bonus
Entitlements in such case.

     4. Term. The parties acknowledge and agree that Executive’s waiver of rights to the
Change of Control Entitlements and Bonus Entitlements shall only be effective through November 30,
2007 (which date is the expiration date of the first renewal term under the Employment Agreement).
If Executive’s Employment Agreement is extended for a second renewal, Executive’s waiver of the
above rights shall no longer be effective.

     5. Binding; Specific Performance. This Agreement shall be binding upon, and inure to
the benefit of, the parties hereto and the respective legal and personal representatives, heirs,
successors and assigns of the parties hereto. The parties hereby declare that it is impossible to
measure in money the damages that will accrue to a party hereto by reason of failure of the other
party to perform any of their obligations under this Agreement. Therefore, if any party shall
institute any action or proceeding to enforce the provisions hereof, the defendant or defendants
against whom the action or proceeding is brought hereby waive the claim or defense therein that
such a party has an adequate remedy at law, and such party shall not urge in any action or
proceeding the claim or defense that a remedy at law exists.

     6. Governing Laws. This Agreement shall be subject to, governed by, and construed in
accordance with the laws of the State of Florida.

     7. Waiver of Right to Trial by Jury. THE CORPORATION AND EXECUTIVE WAIVE THE RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS
AGREEMENT. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY EACH PARTY AND EACH
PARTY EXPRESSLY ACKNOWLEDGES THAT NEITHER THE OTHER PARTY NOR ANY PERSON ACTING ON BEHALF OF THE
OTHER PARTY HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY
WAY TO MODIFY OR NULLIFY ITS EFFECT. EACH PARTY ACKNOWLEDGES TO THE OTHER THAT IT HAS READ AND
UNDERSTANDS THE MEANING AND EFFECT OF THIS WAIVER PROVISION.

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     8. Severability. If for any reason any provision of this Agreement is held invalid,
such invalidity shall not affect any other provision of this Agreement not held invalid, and all
such other provisions shall continue in full force and effect. If any provision of this Agreement
shall be held invalid in part, such invalidities shall in no way affect the rest of such provision
not held so invalid, and the rest of such provision, together with all other provisions of this
Agreement, shall to the full extent consistent with law, continue in full force and effect.

     9. Notices. Any notice or communication given pursuant hereto by any party shall be
in writing and hand delivered or mailed by registered or certified mail, postage prepaid, to the
party at the address set forth below or to such other address as a party may designate by written
notice given to the other party in accordance with this provision.

     10. Headings. The headings of the paragraphs of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.

     11. Entire Agreement. This Agreement, including the other documents referred to
herein which form a part hereof, contains the entire understanding of the parties hereto with
respect to the subject matter contained herein and supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

     12. Amendment. This Agreement may not be amended or modified except by instrument in
writing signed by all of the parties.

     13. Counterparts. This Agreement may be executed in any number of counterparts, by
facsimile signature or otherwise, each of which shall be an original but all of which together
shall constitute one and the same instrument.

[Signature Page to Follow]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement, effective the date
first set forth above.

	 	 	 	 	 
	 	 	EXECUTIVE:
	 
	 	 	 	 
	 	 	ROBERT J. LANDIS
	 
	 	 	 	 
	 	 	/s/ Robert J. Landis
	 	 	 
	 	 	Robert J. Landis
	 
	 	 	 	 
	 	 	Address: 204 South Hoover Blvd., Suite 200
Tampa, FL 33609
	 
	 	 	 	 
	 	 	CORPORATION:
	 
	 	 	 	 
	 	 	COMPREHENSIVE CARE CORPORATION, a
	 	 	Delaware corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mary Jane Johnson
	 

	 	 	 	 
	 

	 	 	 	Mary Jane Johnson, Chief Executive Officer
	 
	 	 	 	 
	 	 	Address: 204 South Hoover Blvd., Suite 200
Tampa, FL 33609

Acknowledged and Agreed

WOODCLIFF HEALTHCARE INVESTMENT PARTNERS, LLC

	 	 	 	 	 
	By:

	 	/s/ Nicholas Lewin	 	 
	 	 	 	 
	 	 	Nicholas Lewin, Managing Member

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