Document:

exhbt102.htm

  

  

  

Exhibit 10.2

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT is executed this 18 day of November, 2010 with an effective date of the 17th day of August, 2010.

 

BETWEEN:

 

GEOGLOBAL RESOURCES INC., a body corporate incorporated under the laws of the State of Delaware, United States and having its corporate office at Suite 200, 625 – 4 Avenue S.W., Calgary, Alberta, Canada T2P 0K2

 

(hereinafter referred to as the “Corporation”)

 

OF THE FIRST PART,

 

- and -

 

ALLAN KENT, a resident of the City of Calgary, Alberta (hereinafter referred to as the “Executive”),

 

OF THE SECOND PART.

 

RECITAL:

 

	
A.  

	
In consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration, the Corporation and the Executive have entered this Agreement.  Pursuant to the terms of a Financial Services Agreement entered into between the Corporation and D.I. Investments Ltd. with an effective date as of the 29th day of August, 2003, this Agreement replaces and supersedes as of August 17, 2010 such Financial Services Agreement with D.I. Investments Ltd. as well as, for clarity, the related oral agreement between the Corporation and D.I. Investments Ltd. superseded by the Financial Services Agreement.

 

  

  

  

 

 

ARTICLE 1

 

 

EMPLOYMENT

 

	
1.1  

	
The Corporation agrees to employ the Executive beginning August 17, 2010 (“Effective Date”) as the Vice President of Finance.

 

	
1.2  

	
The Executive accepts and agrees to serve the Corporation in this position on the terms and conditions and for the remuneration set out in this Agreement.

 

	
1.3  

	
The Executive shall perform such duties and shall have such responsibilities, commensurate with his position and title, as may be assigned to the Executive from time to time by the President and the Chief Executive Officer (“CEO”) and the board of directors of the Corporation (the “Board”).  In particular, the Executive shall perform for the Corporation the services and fulfill those duties and responsibilities more particularly described in Schedule “A” which sets out the responsibilities as the Vice President of Finance to this Agreement (the “Services”).  The Services may be amended from time to time in writing by the Corporation and the Executive.

 

	
1.4  

	
The Executive shall report to the President and CEO.

 

	
1.5  

	
The Executive shall act as an officer of such affiliates of the Corporation as he may be elected to and as directed by the Board (collectively, the “Related Entities”), all without further compensation other than as provided in this Agreement.  For that purpose, the term “Corporation” shall, unless the context otherwise requires, be deemed to include such Related Entities.

 

  

- 2 -

  

 

 

 

	
1.6  

	
The Corporation and the Executive shall enter into an Indemnification Agreement upon terms satisfactory to both parties and the Corporation agrees to place and maintain reasonable liability insurance coverage for its officers and directors, including the Executive.

 

 

ARTICLE 2

 

 

PERFORMANCE OF DUTIES

 

	
2.1  

	
The Executive represents that he is capable of acting in the capacity of Vice President of Finance of the Corporation and of providing the Services in a diligent and professional manner, in accordance with competent, skilled and experienced practices and in compliance with all applicable laws and regulations.  The Executive agrees to faithfully, honestly, diligently and to the best of the Executive’s ability serve the Corporation and to use his best efforts to promote the best interests of the Corporation and to bring business opportunities to the Corporation as they arise from time to time.

 

	
2.2  

	
The Executive acknowledges that he is bound by legal and equitable duties to the Corporation which are in no way limited by this Agreement.

 

	
2.3  

	
The Executive agrees to faithfully account to, and to deliver to the Corporation all money, securities and any other things of value to which the Corporation is entitled that the Executive may from time to time receive for or on account of the Corporation.

 

	
2.4  

	
The Executive shall (except in the case of illness or accident) devote all of the Executive’s working time and attention to the Executive’s employment hereunder.

 

  

- 3 -

  

 

 

 

	
2.5  

	
The Executive acknowledges that performance of the Services shall require travel by the Executive to (i) India, Colombia and Israel from time to time since the major properties and business operations of the Corporation are  located in those jurisdictions and (ii) such other countries as the Corporation may have properties or engage in business operations in the future.  The Executive agrees that he will spend as much time in those jurisdictions as required to be effective in advancing the Corporation’s interest. In light of the fact the business operations of the Corporation are in India, Colombia and Israel and potentially elsewhere and the Corporation requires the attendance of the Executive to be in India and other jurisdictions to maintain and develop relationships, the Corporation agrees to pay for Executive’s trips to India and other jurisdictions and return and accommodations in India and other jurisdictions and for one trip to India and return and accommodations in India for the Executive’s spouse.

 

 

ARTICLE 3

 

 

TERM

 

	
3.1  

	
The Executive’s employment under this Agreement shall be for an indefinite term commencing as of the Effective Date and ending upon termination pursuant to any of the provisions of Article 5 of this Agreement.

 

  

- 4 -

  

 

 

ARTICLE 4

 

 

REMUNERATION

 

	 	
Basic Salary

 

	
4.1  

	
The Corporation agrees to pay to the Executive a base salary of US $220,000.00 per annum (the “Base Salary”).  The Base Salary may be amended in writing from time to time by agreement of both the Corporation and the Executive.

 

	
4.2  

	
The Corporation also agrees to pay such other compensation and to provide such other benefits as set out in Schedule “B” (the “Benefits”).

 

	
4.3  

	
It is agreed that the Base Salary shall be reviewed annually by the Corporation and the Executive for each year of this Agreement which review shall be completed prior to the commencement of the year to which the annual review applies.  The Base Salary may be adjusted upward following such review as agreed to by the Corporation and Executive.

 

	
4.4  

	
If the annual review does not occur before the commencement of the year to which the annual review shall apply, the Base Salary payable to the Executive pursuant to this Agreement shall continue unchanged.

 

	
4.5  

	
The Base Salary for each year of the term of this Agreement shall be paid by the Corporation to the Executive in equal monthly or more frequent instalments, in arrears, net of any statutory deductions or withholdings, in accordance with the policy of the Corporation for employees, as amended from time to time.

 

  

- 5 -

  

 

	 	
Performance Based Bonus

 

	
4.6  

	
The Executive shall for each year of employment be entitled to the opportunity to earn performance based bonus remuneration (“Bonus”) in accordance with the bonus plan that is to be developed by the CEO and the Board.  The plan shall form Schedule “C” to this Agreement when finally approved by the Board.

 

	 	
Stock Options

 

	
4.7  

	
The Executive shall be entitled to participate in the 2008 Stock Incentive Plan and such other equity compensation plans as may be adopted by the Corporation from time to time.  Subject to the terms of the plan under which the option or restricted stock may be granted, the Board may grant to the Executive options to acquire shares of the common stock or restricted stock of the Corporation (the “Stock Options”) at such times and in such amounts as the Board may in its sole discretion determine.

 

	 	
Vacation

 

	
4.8  

	
The Executive shall be entitled to take six weeks’ of vacation in each calendar year.  Such vacation shall be paid vacation and shall not reduce or negatively impact any compensation otherwise payable to the Executive pursuant to this Agreement.  For the purpose of calculating accrued but unused vacation time owed upon termination of the Executive’s employment under this Agreement, vacation shall be deemed to accrue rateably over the course of the calendar year based on the number of days during the year during which the Executive was employed under this Agreement until termination and unused vacation time shall not carry over to the next year, unless it is approved by the Corporation.  It is understood the Executive will make himself available as is

 

  

- 6 -

  

 reasonably required while on vacation.

 

	 	
Reimbursement of Expenses

 

	
4.9  

	
The Corporation agrees to reimburse the Executive, in accordance with the policies of the Corporation in effect from time to time, for all reasonable business expenses incurred by the Executive in performing the duties of the Executive’s office and the Services pursuant to this Agreement, including, without limitation, business promotion, travel, hotel, meals, entertainment and all other reasonable out-of-pocket expenses actually and properly incurred by the Executive in connection with the duties of the Executive’s office and the performance of the Services pursuant to this Agreement.  All claims for reimbursement by the Executive shall, to the extent reasonable, be supported by receipts or appropriate statements covering such claims.  These claims must be submitted to the Corporation in accordance with its expense policy (the “Expense Policy”).

 

 

ARTICLE 5

 

 

TERMINATION

 

	 	
Definitions

 

	
5.1  

	
In this Article 5, the following terms shall have the following meanings:

 

	
(a)  

	
“Cause” shall mean any of the following:

 

	
(i)  

	
fraud, theft, dishonesty, misappropriation of the Corporation’s property or funds, embezzlement, malfeasance, misfeasance or nonfeasance in office which is wilfully or grossly negligent on the part of the Executive, including,

 

  

- 7 -

  

without limitation, any intentional misrepresentation of any operating results of the Corporation or any of its Related Entities;

 

	
(ii)  

	
the Executive engaging in or committing any criminal or other statutory offence involving fraud, theft, dishonesty, misappropriation of property or funds, embezzlement, malfeasance or nonfeasance in office, or which the Board, in its sole discretion acting reasonably, believes is likely to injure the reputation, business or business relationships of the Corporation;

 

	
(iii)  

	
the Executive’s material violation of any statutory or common law duty of loyalty to the Corporation or any of its Related Entities;

 

	
(iv)  

	
the Executive’s material breach of any of the Executive’s obligations under this Agreement or material breach of a policy or code of conduct of the Corporation or any of its Related Entities (including, without limitation, disclosure or misuse of any confidential or competitively sensitive information or trade secrets of the Corporation or any of its Related Entities), where such breach, if curable, is not cured by the Executive within thirty (30) days after receipt of written notice specifying such breach; or

 

	
(v)  

	
the failure to spend an adequate amount of time in India where such failure is not cured within thirty (30) days after receipt of written notice specifying the expectations of such further time that the Executive shall spend in India.

 

	
(b)  

	
“Good Reason” shall mean any of the following:

 

  

- 8 -

  

 

	
(i)  

	
the breach by the Corporation of any obligation to the Executive pursuant to this Agreement where such breach is not cured by the Corporation within ten (10) days after the receipt from the Executive of written notice specifying such breach;

 

	
(ii)  

	
the failure of the Corporation to continue the Executive in his position as set out in this Agreement including his position as an officer of the Corporation, the removal of the Executive from any of such position with the Corporation or the material diminution of the Executive’s duties and responsibilities with the Corporation other than for Cause; or

 

	
(iii)  

	
the failure of the Corporation to obtain agreement from a successor to assume and agree to perform this Agreement or if the Corporation or substantially all of the assets of the Corporation are sold or if the Corporation is a party to a merger, amalgamation or any other arrangement and following any such event the Executive is not offered a comparable position, duties, compensation and benefits as provided pursuant to this Agreement or if offered, the Executive, for whatever reason, elects within thirty (30) days to not accept the offer.

 

  

- 9 -

  

	
  

	
Termination for Cause or Resignation without Good Reason

 

	
5.2  

	
If the Executive’s employment under this Agreement is terminated by the Corporation for Cause or if the Executive resigns without Good Reason, except as otherwise provided herein, all obligations to the Executive under this Agreement shall terminate immediately upon the date of such termination or resignation and the Executive shall only be entitled to be paid by the Corporation all unpaid Base Salary and unpaid vacation pay accrued to the date of such termination or resignation together with any unpaid Bonus actually granted by the Board to the Executive as at the date of termination or resignation.

 

	 	
Termination without Cause or for Good Reason

 

	
5.3  

	
If the Executive’s employment under this Agreement is terminated other than for Cause or if the Executive resigns for Good Reason, as applicable, the Corporation shall:

 

	
(a)  

	
within three (3) days of any such termination or resignation, pay to the Executive:

 

	
(i)  

	
all unpaid Base Salary accrued to the date of termination or resignation;

 

	
(ii)  

	
all unpaid vacation pay accrued to the date of termination or resignation; and

 

	
(iii)  

	
any unpaid Bonus actually granted by the Board to the Executive as at the date of termination or resignation; and

 

	
(b)  

	
within ten (10) days of any such termination or resignation, a lump sum (net of any statutory deductions or withholdings) equal to eighteen (18) months Base Salary, which sum shall increase by one (1) month for every year that the Executive is

 

  

- 10 -

  

 employed from and after January 1, 2011 to a maximum of twenty-four (24) months to compensate for loss of the Executive’s Base Salary; and

 

	
(c)  

	
also within ten (10) days of any such termination or resignation, a lump sum (net of any statutory deductions or withholdings) equal to 30% of the sum paid in 5.3 (b) to compensate the Executive for the loss of benefits (the amount set out in 5.3 (b) and (c) shall collectively be referred to as the “Lump Sum”).

 

	
5.4  

	
The Lump Sum shall be paid under Section 5.3 in full satisfaction of any and all entitlement that the Executive may have to notice of termination or payment in lieu of notice, severance pay and any other payments to which the Executive may otherwise be entitled pursuant to any applicable law and the Executive acknowledges that this provision as to the Lump Sum due in the case of termination or resignation under Section 5.3 shall apply regardless of the years of service or any changes to compensation, title or seniority.

 

	
5.5  

	
The Corporation shall have no obligation to pay the Lump Sum unless the Executive executes and delivers to the Corporation a release in the form attached as Schedule “D” and is in compliance with Articles 8 and 9 hereof.

 

	 	
Termination on Disability

 

	
5.6  

	
In the event of the Disability of the Executive, the Executive’s employment may be terminated by the Corporation at its sole discretion upon written notice to the Executive.  In such event, all obligations to the Executive under this Agreement shall terminate immediately as at the date of termination as set out in the written notice and within 30

 

  

- 11 -

  

days of the date of termination the Corporation shall pay to the Executive all unpaid Base Salary and unpaid vacation pay accrued to the date of termination together with any unpaid Bonus actually granted by the Board to the Executive as at the date of termination and all other compensation to which the Executive is entitled under Article 5.3.  Any unpaid Bonus earned by the Executive but not yet granted by the Board shall be paid to the Executive in accordance with the policies of the Corporation.  For the purposes of this Agreement, Disability shall mean the inability of the Executive to perform his duties for ninety (90) consecutive days, or for a period aggregating ninety (90) days in any period of twelve (12) months, as a result of physical or mental impairment, illness or injury, all as determined by a physician qualified to make such determination.

 

	 	
Termination on Death

 

	
5.7  

	
The Executive’s employment shall terminate upon the death of the Executive.  The date of death shall be the date of termination of employment hereunder.  In such event, all obligations to the Executive under this Agreement shall terminate as at the date of termination and within 30 days of the date of termination the Corporation shall pay to the Executive’s estate all unpaid Base Salary and unpaid vacation pay accrued to the date of termination and any unpaid Bonus actually granted by the Board to the Executive as at the date of termination.  Any unpaid Bonus earned by the Executive but not yet granted by the Board shall be paid to the Executive’s estate in accordance with the policies of the Corporation.

 

  

- 12 -

  

 

 

 

	 	
Stock Options and Benefits on Termination

 

	
5.8  

	
All Stock Options issued to the Executive which the Executive has not exercised and which have not expired as at the date of termination of the Executive’s employment shall immediately vest and shall be exercisable by the Executive for the eighteen (18) month period following the termination of the Executive’s employment unless such length of period is prohibited by regulatory authorities or securities exchanges on which the Corporation’s securities are listed or traded and in no event shall the period extend past the expiration date.  Except in the case where such termination is for Cause or Resignation Without Good Reason, then only the Stock Options issued to the Executive which have NOT vested will expire at the date of termination of the Executive’s employment unless the Board of Directors has made a resolution extending the expiry date on such unvested options.  All vested options shall be exercisable by the Executive for the eighteen (18) month period following the termination of the Executive’s employment. unless such length of period is prohibited by regulatory authorities or securities exchanges on which the Corporation’s securities are listed or traded and in no event shall the period extend past the expiration date.

 

	
5.9  

	
The Executive shall cease to be entitled to Benefits as at the date of termination of the Executive’s employment hereunder, unless a later date is required under applicable statutory law, in which case entitlement shall cease as at such later date.

 

  

- 13 -

  

	
5.10  

	
Notwithstanding anything herein, upon a Change of Control of the Corporation, the Executive, at his sole option and discretion, within 30 days of a Change of Control having taken effect, may tender his resignation on 30 days notice to the Corporation in accordance with Section 5.3 and the Corporation will pay to the Executive all of the compensation and remuneration due under Section 5.3 in accordance with timelines therein. A “Change of Control” of the Corporation for purposes of this Agreement shall mean any of the following events:  (i) any person or group of persons (within the meaning of the Securities Exchange Act of 1934,) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934,) of 51% or more of the issued and outstanding shares of capital stock of Corporation having the right to vote for the election of directors of Corporation under ordinary circumstances; (ii) more than 55% of the assets of the Corporation are sold in a transaction or series of related transactions; (iii) the Corporation shall merge with any other person or firm; (iv) during any period of 12 consecutive calendar months, individuals who at the beginning of such period constituted the board of directors of Corporation (together with any new directors whose election by the board of directors of Corporation or whose nomination for election by the stockholders of Corporation 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 such period or whose election or nomination for election was previously so approved) cease for any reason other than death or disability to constitute a majority of the directors then in office.

 

  

- 14 -

  

 

 

ARTICLE 6

 

 

KEY MAN INSURANCE

 

	
6.1  

	
Each of the Corporation and any of its Related Entities shall have the right to take out, pay for and maintain in its name life and disability insurance on the Executive in such amounts as may be determined by the Board or by the Board of any of its Related Entities from time to time, as applicable, for the sole benefit of the Corporation and/or any of its Related Entities, as applicable. Upon reasonable advance written notice to the Executive, the Executive shall cause the Executive to submit to such physical examinations at the expense of the Corporation and/or its Related Entities, as applicable, and to supply such information and sign such documents and otherwise fully co-operate with the Corporation and/or its Related Entities, as applicable, in order for such insurance to be obtained at the best rate(s) available in the circumstances.

 

 

ARTICLE 7

 

 

RETURN OF PROPERTY ON TERMINATION

 

	
7.1  

	
Upon termination of the Executive’s employment hereunder this Agreement, the Executive shall within 24 hours of the date of termination, deliver to the Corporation all books, documents, effects, money, securities, keys, computers, vehicles and all other data and property of the Corporation then in the possession, control or custody of the Executive, including without limitation all originals and copies of all Confidential Information (as defined in Article 8 hereof) that is embodied in any way, whether in physical, electronic, magnetic, optical or other ephemeral form.

 

  

- 15 -

  

 

 

 

 

ARTICLE 8

 

 

CONFIDENTIALITY AND OWNERSHIP OF INFORMATION

 

	 	
Definitions

 

	
8.1  

	
In this Article:

 

	
(a)  

	
“Confidential Information” means all confidential and proprietary information and facts (including intellectual property) relating to the business and affairs of the Corporation and its Related Entities, or their respective investors, clients and suppliers, operators under operating agreements, partners, joint venturers, and other parties to contracts with the Corporation whether or not such information or facts:

 

	
(i)  

	
are reduced to writing;

 

	
(ii)  

	
were created or originated by Executive or an employee; or

 

	
(iii)  

	
are designated or marked as “confidential” or “proprietary” or some other designation or marking.

 

For greater certainty, Confidential Information includes but is not limited to:

 

	
(iv)  

	
all business planning, financial, technical and other information;

 

	
(v)  

	
computer software of any type or form and in any stage of actual or anticipated development, and programs and program modules;

 

documents and materials respecting the business and affairs, properties, prospects, business relationships and contracts; and

 

  

- 16 -

  

 

 

 

	
(vi)  

	
all information which becomes known to an employee as a result of the employee’s employment which the employee, acting reasonably, believes or ought to believe is confidential or proprietary information from its nature, or from the circumstances surrounding its disclosure to the employee.

 

	 	
Use of Confidential Information

 

	
8.2  

	
The Executive agrees to maintain in strict confidence all Confidential Information, notwithstanding that such Confidential Information may also be in the public domain in  part, and shall take all reasonable precautions to prevent inadvertent disclosure of any such Confidential Information.  Such Confidential Information shall, for all purposes, be held by the Executive in a fiduciary capacity and solely for the benefit of the Corporation and its Related Entities and in compliance with all applicable laws and policies of the Corporation and its Related Entities relating thereto.  The Executive will not either during the term of this Agreement or at any time thereafter, use for the Executive’s own purpose or disclose, divulge or communicate orally, in writing or otherwise to any person or persons, or copy, transfer or destroy any Confidential Information (other than as necessary in carrying out the Executive’s Services or duties on behalf of the Corporation).

 

	
8.3  

	
Nothing in this Article 7 shall preclude the Executive from disclosing or using Confidential Information at any time if:

 

  

- 17 -

  

 

	
(a)  

	
subject to the first sentence of Section 8.2 hereof, such Confidential Information is available to the public or in the public domain at the time of such disclosure or use, without breach of this Agreement; or

 

	
(b)  

	
disclosure of such Confidential Information is required to be made by any law, regulation, governmental body, or authority or by court order provided that before disclosure is made, notice of the requirement is provided to the Corporation and the Corporation is afforded an opportunity to dispute the requirement or to seek a protective order.  If in the absence of a protective order or waiver, the Executive is advised by counsel that disclosure is required in order to comply with any court order or decree, such disclosure shall be permitted without any liability hereunder.

 

	 	
Ownership of Confidential and other Information

 

	
8.4  

	
All Confidential Information and all reports, summaries, evaluations, memoranda, notes, records, papers and other documents, information and data acquired, compiled, generated, developed or prepared by the Executive pursuant to the Agreement or arising from the performance of the Executive’s obligations pursuant to this Agreement, together with all documents, information and data disclosed to the Executive in order to enable or permit the Executive to perform his Services, shall be owned by the Corporation and its Related Entities, as applicable, and shall not be used, copied, published, patented, copyrighted or disclosed by the Executive without the prior written consent of the Corporation (other than as necessary in carrying out the Executive’s Services or duties on behalf of the Corporation).  Nothing in the Agreement shall confer

 

  

- 18 -

  

upon the Executive any right of use, title or interest in the aforesaid Confidential Information, documents, information and data.  Title to all Confidential Information, software, modifications, enhancements and data shall remain exclusively with the Corporation and its Related Entities or their licensors, as applicable, and the Executive shall not copy, duplicate or remove from any systems of the Corporation or any of its Related Entities the said Confidential Information, software, modifications, enhancements or data other than for the purpose of providing the Executive’s Services.

 

	
8.5  

	
Whenever any invention or discovery or information relating to oil and natural gas prospects, reservoirs, or exploration or drilling opportunities is made or conceived by the Executive in the course or, or in connection with, or as a direct result of the performance of the Executive’s obligations pursuant to this Agreement, the Executive shall furnish the Corporation with complete information with respect thereto and the Corporation shall have the sole right and authority to determine the disposition of title to and all rights under any patent application or patent or information relating to oil and natural gas prospects, reservoirs, or exploration or drilling opportunities that may result. The Executive will, at the Corporation’s expense, execute such documents and do all such further things as may be necessary or proper to enable title to any such invention or discovery or information relating to oil and natural gas prospects, reservoirs, or exploration or drilling opportunities to be vested in the proper owner thereof as determined by the Corporation.

 

  

- 19 -

  

	 	
Third Parties

 

	
8.6  

	
The Executive agrees that any reports, summaries, evaluations, memoranda, notes, records, papers and other documents, information and data provided to the Executive by the Corporation where such documents, information and data is the property of a third party is to be maintained in confidence for the third party.  Further, the Executive undertakes that if the Corporation requests the Executive to sign a statement to the effect, including, if applicable, an agreement to abide by the terms of any confidentiality or like agreement entered into by the Corporation and any third party, the Executive will do so.

 

	
8.7  

	
The Executive agrees not to infringe any patent, copyright, trademark, trade name or trade secret or other proprietary right of any third party or restriction on use imposed by any third party.

 

	 	
In Perpetuity

 

	
8.8  

	
The Executive acknowledges and agrees that the obligations under this Article 8 are to remain in effect in perpetuity.

 

 

ARTICLE 9

 

 

CONFLICT OF INTEREST, NON-COMPETE AND NON-SOLICITATION

 

	 	
No Conflict of Interest

 

	
9.1  

	
The Executive represents and warrants that none of the negotiation, entering into or performance of this Agreement has resulted in or may result in a breach by the Executive of any agreement, duty or other obligation with or to any third party,

 

  

- 20 -

  

including, without limitation, any agreement, duty or obligation not to compete with any third party or to keep confidential the confidential information of any third party, and there exists no agreement, duty or other obligation binding upon the Executive that conflicts with the Executive’s obligations under this Agreement.

 

	
9.2  

	
The Executive shall conduct at all times all activities pursuant to or associated with this Agreement with the highest ethical standards. The Executive agrees to take all steps to ensure avoidance of all conflicts of interest between the Executive’s individual interests and the interests of the Corporation and its Related Entities in the performance of the Services pursuant to this Agreement.

 

  Non-Solicitation and Non-Compete

 

	
9.3  

	
The Executive shall not, without the prior written consent of the Corporation, throughout the continuance of the Executive’s employment under this Agreement and for a period of one (1) year following the date of termination of the Executive’s employment hereunder solicit, raid, entice, encourage or induce, directly or indirectly, any person who is an employee or consultant of the Corporation or any of its Related Entities to become an employee or consultant of a person, corporation or other entity in which the Executive or the Executive has any interest as a shareholder, lender, director, officer, employee, consultant or agent.

 

	
9.4

	
Executive agrees that the Executive shall not, without the prior written consent of the Corporation, compete directly or indirectly with the Corporation or any of its Related Entities with respect to any acquisition, exploration or development of any crude oil, natural gas or related hydrocarbon interests within the restricted area named in Schedule

 

  

- 21 -

  

 “A” to this Agreement, as same may be amended in writing from time to time by the Corporation and the Executive (the said restricted area, as amended from time to time, being hereinafter referred to as the “Restricted Area”) throughout the continuance of this Agreement and for a period one (1) year following the date of termination of this Agreement  As used herein, Related Entities includes such affiliates of the Corporation and such other corporations, entities and businesses for which the services of the Executive are to be provided from time to time, (collectively, the “Related Entities”).

 

	
9.5

	
The Executive agrees that the Executive shall not, without the prior written consent of the Corporation, throughout the continuance of this Agreement and for a period of one (1) year following the date of termination of this Agreement

	
engage or participate in, make any financial investment in or become employed by or act as a consultant to or render advisory or other services to any person, corporation or other entity in connection with any business activity that derives or will derive more than 5% of its revenue or projected revenue from the acquisition, exploration or development of any crude oil, natural gas or related hydrocarbon interests within the Restricted Area. Nothing herein contained, however, shall restrict or otherwise preclude the Executive from owning, participating in or overseeing investments where such investments represent no more than 3% of the voting securities in any corporation whose stock is listed on a national securities exchange or actively traded in an over-the-counter market if the Executive do not actively operate or manage, or participate actively in the operation or management of, the business in which either is an investor so long as such business derives or is projected to derive no more than 5% of its revenue or projected revenue from the acquisition, exploration or development of any crude oil, natural gas or related hydrocarbon interests within the Restricted Area.

 

  

- 22 -

  

	
9.6

	
The Executive acknowledges and agrees, and represents to the Corporation that the restrictions and obligations imposed on the Executive pursuant to this Article 9 are, in light of the circumstances, fair and reasonable as to type, scope and period of time, and are reasonably required for the protection of the Corporation and its Related Entities and the goodwill associated with the business of the Corporation and its Related Entities. However, it is the intent of the Corporation and the Executive that this Agreement be enforceable and restrict the Executive’s activities only to the extent permitted by applicable law. Therefore, if any provision of this Article 9 shall be construed to be illegal, invalid or unenforceable by a court or tribunal of competent jurisdiction, said illegal, invalid or unenforceable provision shall be deemed to be amended and shall be construed by the court or tribunal to have the broadest type, scope and duration permissible under applicable law and if no validating construction is possible, shall be severable from the rest of the Agreement, and the validity, legality or enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.

 

	
9.7

	
The Executive acknowledges and agrees, that the restrictions imposed on the Executive pursuant to Article 9 of this Agreement, and the rights and remedies conferred on the Corporation by this Agreement, (i) are reasonable in time and territory; (ii) are designated to reasonably protect the Confidential Information of the Corporation and its Related Entities; (iii) are designed to eliminate competition which would be unfair to the Corporation and its Related Entities; (iv) would not operate as a bar to the Executive’s means of support; (v) are fully required to protect the legitimate interests of

 

  

- 23 -

  

the Corporation and its Related Entities; and (vi) do not confer a benefit on the Corporation or its Related Entities disproportionate to the detriment to the Executive or the benefits otherwise afforded to them pursuant to this Agreement.

 

 

 

ARTICLE 10

 

 

REMEDIES

 

	
10.1  

	
The Executive acknowledges and agrees that the restrictions and obligations imposed on the Executive pursuant to Article 8 and Article 9 are, in light of the circumstances, fair and reasonable as to type, scope and period of time, and are reasonably required for the protection of the Corporation and its Related Entities and the goodwill associated with the business of the Corporation and its Related Entities.  It is the intent of the Corporation and the Executive that this Agreement be enforceable and restricts the Executive only to the extent permitted by applicable law.  Therefore, if any provision of Article 8 or Article 9 shall be construed to be illegal, invalid or unenforceable by a court or tribunal of competent jurisdiction, said illegal, invalid or unenforceable provision shall be deemed to be amended and shall be construed by the court or tribunal to have the broadest type, scope and duration permissible under applicable law and if no validating construction is possible, shall be severable from the rest of the Agreement, and the validity, legality or enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.

 

	
10.2  

	
The Executive acknowledges and agrees that the restrictions imposed on the Executive pursuant to Articles 8 and 9 of this Agreement, and the rights and remedies conferred on

 

  

- 24 -

  

 the Corporation by this Agreement, (i) are reasonable in time and territory; (ii) are designated to reasonably protect the Confidential Information of the Corporation and its Related Entities; (iii) are designed to eliminate competition which would be unfair to the Corporation and its Related Entities; (iv) would not operate as a bar to the Executive’s means of support; (v) are fully required to protect the legitimate interests of the Corporation and its Related Entities; and (vi) do not confer a benefit on the Corporation or its Related Entities disproportionate to the detriment to the Executive or the benefits otherwise afforded to the Executive pursuant to this Agreement.

 

	
10.3  

	
The Executive acknowledges and agrees that if the Executive breaches any of the provisions of Article 8 or Article 9, the Corporation and its Related Entities may sustain irreparable harm and, therefore, in addition to any other remedies which the Corporation may have under this Agreement or otherwise, the Corporation or any of its Related Entities shall be entitled to an injunction from any court of competent jurisdiction restraining the Executive from committing or continuing any breach of any provision of Article 8 or Article 9.  The Executive acknowledges that damages at law would not be an adequate remedy for violation of Article 8 or Article 9 and the Executive therefore agrees that the provisions of Article 8 or Article 9 may be specifically enforced against the Executive in any court of competent jurisdiction.  Nothing herein shall be construed as prohibiting the Corporation or any of its Related Entities from pursuing any other remedies available for such breach or threatened breach, including the recovery of damages from the Executive.

 

  

- 25 -

  

 

 

ARTICLE 11

 

 

RESOLUTION OF DISPUTES

 

	
11.1  

	
Any controversy or claim arising out of or related to this Agreement or any breach or alleged breach of any provision of this Agreement shall be submitted to mediation mediated by a single mediator selected by the parties.

 

 

	
11.2  

	
The costs of the mediation shall be borne entirely by the Corporation.  Each party however, would be responsible for their own legal costs.

 

 

	
11.3  

	
In the event that the parties cannot agree upon a mediator within 10 business days of the date that the controversy or claim arises or is made or in the event that the claim or controversy cannot be settled forthwith by the parties following not more than one day of mediation, recourse shall be had to a court of competent jurisdiction in the Province of Alberta.

 

 

ARTICLE 12

 

 

NOTICES

 

	
12.1  

	
All notices, communications and other documents required or permitted to be served under the Agreement shall be in writing and may be given to or served on a party to the Agreement by personal delivery, by courier delivery or by registered mail addressed to the recipient at the address set forth in Schedule “E” to this Agreement or by facsimile or electronic mail sent to the facsimile number or e-mail address of the party set forth in

 

  

- 26 -

  

	 	
Schedule “E” to this Agreement.  In the event that either party wishes to change either its address or facsimile number or e-mail address pursuant to this section, such party may do so by service of a notice advising the other party of such change in accordance with the provisions of this section.

 

	
12.2  

	
Any notice, communication, invoice or other document served on a party as provided herein shall, in the case of personal delivery, delivery by courier, deliver by registered mail or delivery by facsimile or electronic mail prior to the close of business on a business day, be deemed to have been received on the day of delivery or on the day sent if sent by facsimile with written confirmation of receipt obtained by the sender or on the day sent if sent by electronic mail, or if not a business day or after the close of business on a business day, on the business day next following the day of delivery or confirmed receipt or the day sent, as applicable.  In the event of a postal dispute or threat of a postal dispute, all notices, communications, invoices and other documents required or permitted to be served under this Agreement shall be delivered personally or by courier, facsimile or electronic mail only.

 

 

ARTICLE 13

 

 

GENERAL PROVISIONS

 

	 	
Entire Agreement

 

	
13.1  

	
This Agreement and Stock Option Agreement(s) set forth the entire understanding of the parties with respect to the subject matter of the respective agreements  and there are no other terms, conditions, obligations, representations, warranties or other agreements between the parties with respect to the subject matter of the respective agreements,

 

  

- 27 -

  

whether written or oral, other than those set forth in the respective agreements. This Agreement and Stock Option Agreement(s)  each supersede all prior agreements, negotiations and discussions, whether written or oral, regarding the subject matter of the respective agreements. The Indemnification Agreement dated  December 12, 2007 between the Corporation and the Executive shall survive the execution of this Agreement and remain in full force and effect in accordance with its terms.

 

	 	
Time of Essence

 

	
13.2  

	
Time shall be deemed to be of the essence of this Agreement.

 

	 	
Waiver, Amendment

 

	
13.3  

	
Except as otherwise provided in this Agreement, no amendment or variation of the provisions of this Agreement shall be binding on a party unless and until it is evidenced in writing signed by both parties.

 

	
13.4  

	
No failure on the part of either party to enforce compliance with any term or provision of this Agreement shall be taken as a waiver of any of the terms or provisions of this Agreement, it being understood that any term or provision of this Agreement may only be waived by express waiver in writing signed by the parties. Any waiver so given shall extend only to the particular breach so waived and shall not affect the validity of any other or future breach. No exercise or waiver, in whole or in part, of any right or remedy for which provision is made in this Agreement shall constitute a waiver of any prior, concurrent or subsequent right or remedy for which provision is made in this Agreement.

 

  

- 28 -

  

 

	 	
Invalidity of Provisions

 

	
13.5  

	
Subject the Section 10.1 hereof, if any term or provision of this Agreement is found by a court of competent jurisdiction to be invalid, illegal, contrary to law or unenforceable, such term or provision shall be deemed to be severed from this Agreement and shall not affect the validity of any other term or provision of this Agreement.

 

	 	
Governing Law

 

	
13.6  

	
This Agreement shall be interpreted and construed in accordance with the laws in force in the Province of Alberta and of Canada applicable therein and the parties attorn to the jurisdiction of the Alberta Courts with respect thereto. All proceedings for the enforcement of this Agreement or with respect to this Agreement shall be commenced in Calgary, Alberta.

 

	 	
Currency

 

	
13.7  

	
All references to sums of money in the Agreement shall be deemed to be references to American currency, unless expressly indicated otherwise.

 

	 	
Headings

 

	
13.8  

	
The headings of this Agreement (including the Schedules hereto) are inserted for convenience of reference only and shall not be used in construing or interpreting any provision of this Agreement.

 

  

- 29 -

  

 

	 	
Successors and Assigns

 

	
13.9  

	
This Agreement shall enure to the benefit of and shall be binding upon the successors and assigns of the Corporation.

 

	 	
Survival

 

	
13.10  

	
Notwithstanding any other term or provision of this Agreement, whether express or implied, the provisions of Articles 7, 8, 9 and 10 and this Section 13.10 shall survive the termination of the Executive’s employment hereunder.

 

 

ARTICLE 14

 

 

ACKNOWLEDGEMENT

 

	
14.1  

	
The Executive acknowledges that:

 

	
(a)  

	
the Executive has had sufficient time to review and consider this Agreement thoroughly;

 

	
(b)  

	
the Executive has read and understands the terms of this Agreement and the Executive’s obligations hereunder; and

 

	
(c)  

	
the Executive has been given an opportunity to obtain independent legal advice, or such other advice as the Executive may desire, concerning the interpretation and effect of this Agreement.

 

  

- 30 -

  

 

 

ARTICLE 15

 

 

COUNTERPARTS AND ELECTRONIC TRANSMISSION

 

	
15.1  

	
This Agreement may be signed in counterparts and each of such counterparts shall constitute an original document and such counterparts, taken together, shall constitute one and the same instrument.

 

  

- 31 -

  

 

	
15.2  

	
Transmission by facsimile or by e-mail in Portable Document Format (PDF) of an executed counterpart of this Agreement shall be deemed to constitute due and sufficient delivery of such counterpart.

 

IN WITNESS WHEREOF the parties have executed this Agreement as of the date set forth at the top of the first page of this Agreement.

 

	  	  	
GEOGLOBAL RESOURCES INC.

	
By:

	
/s/:  Paul B. Miller

	  	
Name:            Paul B. Miller

	  	
Title:            President & CEO

	  	  
	
By:

	
/s/:  David D. Conklin

	  	
Name:            David D. Conklin

	  	
Title:            Director

 

	  	  	
/s/:  Allan J. Kent

	
Witness

	
ALLAN J. KENT

 

 

 

 

  

  

  

SCHEDULE A

 

JOB DESCRIPTION

 

Vice-President of Finance

 

Reports to:                      President and Chief Executive Officer

 

 

 

	
1.  

	
Description of “Services” to be Provided by the Executive

 

 

The Executive will provide services as the Vice-President of Finance. He will report to the President and Chief Executive Officer (“CEO”) and will maintain open communication with the Chair of the Board, and the President and CEO. He will be a “full time” Executive dedicated to the Corporation, subject to the terms and conditions of the Agreement.

 

 

	
§  

	
the primary responsibilities of the Vice-President of Finance will include:

 

 

	
i)  

	
planning, developing, directing, controlling, reviewing and overseeing the accounting, financial, reporting and budgeting functions of the Corporation and its Related Entities;

 

 

	
ii)  

	
working with the Board and the President and CEO of the Corporation in fulfilling the Board’s oversight responsibilities for the financial reporting process, the system of internal control over financial reporting, the audit process and the Corporation’s process for monitoring compliance with laws and regulations regarding financial, accounting and reporting matters and the Corporation’s Code of Business Ethics;

 

 

	
iii)  

	
arranging financing, debt and/or equity for the Corporation in co-ordination with the CEO and overseeing the completion of such financings of the Corporation;

 

 

	
iv)  

	
working with the CFO and CEO to develop annual capital commitment and expenditure budgets for approval by the Board; and

 

 

	
v)  

	
working with the CFO, President and CEO to develop annual operating forecasts of revenue, expenditures, operational results and financial performance in coordination with the CEO. These forecasts will serve as operating and financial guidelines and do not require Board approval except for those components specifically utilized in setting objectives for compensation purposes.

 

 

	
§  

	
the primary responsibilities of the Vice-President of Finance will be achieved through numerous activities, including the following:

 

 

	
a)  

	
reviewing significant accounting and assessing their impact on the financial statements of the Corporation;

 

 

	
b)  

	
reviewing with management and with the external auditors the results of any audit and any issues arising in connection therewith;

 

 

	
c)  

	
reviewing all reports and regulatory filings prior to release for accuracy and completeness;

 

 

	
d)  

	
reviewing with management and the external auditors all matters required to be communicated to the Audit Committee of the Corporation;

 

  

  

  

 

 

 

	
e)  

	
considering the effectiveness of the Corporation’s internal control over annual and interim financial reporting, including information technology security and control;

 

 

	
f)  

	
understanding the scope of the external auditors’ review of internal controls over financial reporting, and obtaining reports on significant findings and recommendations, together with management’s response;

 

 

	
g)  

	
reviewing the external auditors’ proposed audit scope and approach;

 

 

	
h)  

	
reviewing the effectiveness of the system for monitoring compliance with laws and regulations and the results of management’s investigation and follow-up of any instances of non-compliance;

 

 

	
i)  

	
reviewing the findings of any examination of the financial records of the Corporation or any of its Related Entities by any regulatory agency;

 

 

	
j)  

	
reviewing the process for communicating the Corporation’s Code of Business Ethics to the Corporation’s personnel and for monitoring compliance therewith;

 

 

	
k)  

	
obtaining regular updates from management and Corporation legal counsel regarding compliance matters;

 

 

	
l)  

	
incorporating in all actions honest and ethical conduct, including ethical handling of actual or apparent conflicts of interest and full, fair, accurate and timely disclosure of information; and

 

 

	
m)  

	
fostering a corporate culture that promotes ethical practices and encourages individual integrity and social responsibility and developing a working environment in which all operations and activities of the Corporation and its Related Entities are conducted in accordance with applicable laws and regulations, the Corporation’s Code of Business Ethics, sound business practice and in accordance with the policies and practices approved by the Board.

 

 

	
§  

	
the Services will include the promotion of the best interests of the Corporation in the areas of the world in which the Corporation is active from time to time, including the identification and presentation of business opportunities to the Board as they arise from time to time.

 

  

  

  

 

	
2.  

	
Consulting Fees Payable for the Initial Term of the Agreement

 

 

2.01           $220,000 U.S. per year.  Overtime shall not be paid for Services provided by the Executive pursuant to the Agreement.

 

 

2.02           Appropriate medical benefits for the Executive and his family.

 

 

2.03           Other compensation to include a discretionary bonus program as established or amended from time to time by the Board of Directors of the Corporation.

 

 

	
3.

	
Annual Vacation Entitlement

 

 

six (6) weeks

 

 

4.           Invoicing address of the Corporation

 

GeoGlobal Resources Inc.

 

Suite 200, 625 – 4th Avenue SW

 

Calgary, Alberta  T2P 0K2

 

Attention:  Accounts Payable

 

 

	
5.

	
Restricted Area

 

 

The country of India, including, without limitation, all lands thereof, whether onshore or offshore, controlled by the Government of India under the Directorate General of Hydrocarbons. The countries of Israel and Colombia and such other countries as the Corporation may have properties or engage in business operations in the future.

 

 

6.           Addresses for Services

 

 

Corporation:

 

GeoGlobal Resources Inc.

 

Suite 200, 625 – 4th Avenue SW

 

Calgary, Alberta  T2P 0K2

 

Attention:  Corporate Secretary

 

Facsimile Number:   403-777-9199

 

 

Executive:

 

Allan J. Kent

 

c/o Suite 200, 625 – 4th Avenue SW

 

Calgary, Alberta  T2P 0K2

 

Attention:  Mr. Allan J. Kent

 

Facsimile Number:   403-777-9199

 

  

  

  

SCHEDULE B

 

	
  

	
Benefits:

 

 The Executive is entitled to the following standard benefits which shall be consistent with those extended to other Executives:

 

	
1.  

	
Participation in the existing Corporation Health plan at the Executive defined level of CAD $3,000 per year.

 

	
2.  

	
Appropriate health insurance for the Executive.

 

	
3.  

	
Travel Insurance.

 

	
4.  

	
A one time signing bonus of USD $5,000.00 upon the execution of this Agreement.

 

 

  

  

  

SCHEDULE C

 

 

Performance Based Bonus Plan:

 

The Executive will be entitled to an annual performance based bonus.  The bonus plan will be approved by the Compensation Committee and tied to Corporation and individual goals and targets as determine in cooperation with the Executive.

 

 

  

  

  

SCHEDULE D

 

FORM OF RELEASE

 

Except as regards the obligation of the Corporation to pay those unpaid amounts owed under Section 5.3 of the Employment Agreement between the undersigned and the Corporation made effective  August 17, 2010, the undersigned (the “Releasor”, which term includes the undersigned’s successors, assigns, heirs, executors, estate trustees, personal representatives and administrators) in consideration of the sum of $1.00 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby remises, releases and forever discharges GeoGlobal Resources Inc. (the “Corporation”) and Related Entities and their present and former directors, officers, agents, servants and employees (the “Releasees”, which term includes their respective successors, assigns, heirs, executors, estate trustees, personal representatives and administrators) of and from all actions, causes of action, suits, debts, dues, accounts, bonds, covenants, contracts, claims and demands whatsoever, known or unknown, suspected or unsuspected, and without limiting the generality of the foregoing, in respect of the Releasor’s hiring by, employment with and termination of employment with the Corporation in respect of claims or entitlements to salary, vacation pay, leave, benefits, long-term disability benefits, expenses, overtime pay, notice of termination, pay in lieu of notice of termination, termination pay or severance pay, wrongful dismissal damages, whether arising by contract (express or implied), common law, in equity or pursuant to any statute or regulation of Canada or any Province of Canada (collectively, the “Claims”) which the Releasor ever had, now has or may hereafter have against the Releasees, or any of them, for or by reason of, or in any way arising out of any cause, matter or thing existing up to the date hereof relating to, or arising directly or indirectly by reason of or as a consequence of, the Releasor’s employment by the Corporation or any of the Related Entities

 

DATED:                      ●

 

	  	  	  
	
Witness

	
ALLAN J. KENT

 

 

  

  

  

SCHEDULE E

 

Addresses:

 

 

The Executive:

 

 

Allan J. Kent

 

#27, 714 Willow Park Drive SE

 

Calgary, Alberta, T2J 0L8

 

 

Phone:  403.540.1700

 

Email:  allan.kent@cmt.net

 

 

 

The Corporation:

 

GeoGlobal Resources Inc.

 

Attn:  Patti Price

 

Suite 200, 625 – 4th Ave SW

 

Calgary, Alberta, Canada

 

T2P 0K2

 

 

Phone: 403.777.9252

 

Fax:  403.777.9199

 

Email:  patti.price@geoglobal.comex10-1.htm

EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into this 18th day of November, 2010, and effective on November 15, 2010 (the “Effective Date”), by and between William A. Mathies (“Mr. Mathies”) and Sun Healthcare Group, Inc., a Delaware corporation (“Sun” or “Company”).

 

WHEREAS, Mr. Mathies has served as the President of SunBridge Healthcare Corporation, a subsidiary of the Company (“SunBridge”), and in other executive capacities with subsidiaries of the Company since February 2002;

 

WHEREAS, Mr. Mathies has been appointed to serve as the Chairman of the Board and Chief Executive Officer of Sun;

 

WHEREAS, Sun Health Specialty Services, a wholly-owned subsidiary of SunBridge, and Mr. Mathies are parties to that certain Amended and Restated Employment Agreement dated December  17, 2008 (the “Existing  Agreement”); and

 

WHEREAS, this Agreement replaces and supersedes the Existing Agreement in its entirety.

 

NOW, THEREFORE, in consideration of the above recitals and the mutual covenants and agreements contained herein, Mr. Mathies and Sun agree as follows:

 

Section 1:        Term of Employment.  Sun agrees to employ Mr. Mathies and Mr. Mathies agrees to accept employment with Sun, subject to the terms and conditions of this Agreement. Unless earlier terminated pursuant to the provisions of Sections 4 and 5 hereof, the initial term of employment of Mr. Mathies under this Agreement is for a period of three (3) years, commencing on the Effective Date, and terminating on the third anniversary of the Effective Date.  On the first anniversary of the Effective Date, and on each anniversary of the Effective Date thereafter, this Agreement shall be renewed for a one (1) year period (the period from and after the Effective Date until the termination of this Agreement  is referred to as the “Term”) unless (i) earlier terminated pursuant to the provisions of Sections 4 and 5 hereof, or (ii) written notice of non-renewal is given by either party to the other at least 60 days prior to the anniversary of the Effective Date occurring in any given year, in which case this Agreement shall be terminated on anniversary of the Effective Date occurring in the second year following the year in which such notice of non-renewal was provided.  Notwithstanding the foregoing, the Term shall terminate, at the latest, on the tenth anniversary of the Effective Date.

 

Section 2:         Duties and Responsibilities.  Mr. Mathies is employed as CEO and is engaged as Chairman of the Board of Directors of Sun (“Board of Directors”).  During the Term, Mr. Mathies shall devote his full employment time, efforts, skills and attention exclusively to advancing and rendering profitable the business interests of Sun, its direct and indirect subsidiaries and their lines of business; provided, however, that to the extent the following activities do not materially interfere or conflict with his duties and responsibilities hereunder and as imposed by applicable laws, rules and regulations, Mr. Mathies may (i) engage in charitable, civic and religious affairs and (ii), with the prior written consent of the Board of Directors, serve           

 

  

  

  

as a member of the board of directors of other companies, subject to the provisions of Sun’s Governance Guidelines, as in effect from time to time.  Mr. Mathies agrees to report to and render such services, commensurate with his positions as Chairman or CEO, as the Board of Directors may from time to time reasonably direct.  In the event that Mr. Mathies serves as director or senior executive officer of one or more direct or indirect subsidiaries of Sun, he shall do so without additional compensation.

 

Section 3:          Compensation, Benefits and Related Matters.

 

	
  

	
a.

	
Annual Base Salary.  Sun shall pay during the Term to Mr. Mathies a base salary at an annual rate of $725,000 (“Base Salary”), such salary to be payable in accordance with Sun’s customary payroll practices (but not less frequently than monthly).  Annually during the Term, on or prior to each anniversary of the Effective Date, the Board of Directors or the Compensation Committee of the Board of Directors (the “Compensation Committee”) shall review Mr. Mathies’ annual base salary for possible merit increases in its sole discretion, and any increase in Mr. Mathies’ annual base salary rate shall thereafter constitute “Base Salary” for purposes of this Agreement.

 

	
  

	
b.

	
Cash Bonus/Incentive Compensation. In addition to the Base Salary provided for in Section 3(a) above, Mr. Mathies shall be entitled to receive an annual bonus (“Bonus”) in accordance with the Sun Healthcare Group, Inc. Executive Bonus Plan (the “Plan”), as it may be amended from time to time by the Compensation Committee; provided, however, that no amendment shall be effective if it reduces the percentage of Base Salary that would constitute the target amount of the Bonus as compared to the prior year, unless such amendment has been agreed to in writing by Mr. Mathies.  The Bonus shall be payable at the same time as other annual bonuses are paid to senior management personnel with respect to that fiscal year.  Notwithstanding the foregoing, but subject to the provisions of Section 5, in order to have earned and to be paid any such Bonus, Mr. Mathies must be employed by Sun on the date of such payment.

 

	
  

	
c.

	
Restricted Stock and Options.  Mr. Mathies shall participate in such restricted stock and option plans of the Company as are made available generally to senior executive officers of the Company.  Any grants under such plans shall be made by the Board of Directors (or appropriate committee thereof) in its sole discretion and such plans are subject to change during the Term at the sole discretion of the Company.

 

	
  

	
d.

	
Retirement and Benefit Plans.  During the Term, Mr. Mathies shall be entitled to participate in all retirement plans, health benefit programs, insurance programs and other similar employee welfare benefit arrangements available generally to senior executive officers of Sun from time to time.  Such plans, programs and arrangements are subject to change during the Term at the sole discretion of the Company.

  

2

  

 

	
  

	
e.

	
Paid Time Off.  During the Term, Mr. Mathies shall be entitled to paid time off in accordance with Sun’s policy for senior executive officers.

 

	
  

	
f.

	
Indemnification Liability/Insurance.  Mr. Mathies shall be entitled to indemnification by Sun to the fullest extent permitted by applicable law and the charter and bylaws of Sun.  In addition, Sun shall maintain during Mr. Mathies’ employment customary director’s and officers’ liability insurance and Mr. Mathies shall be covered by such insurance.

 

	
  

	
g.

	
Taxes.  All compensation payable to Mr. Mathies shall be subject to withholding for all applicable federal, state and local income taxes, occupational taxes, Social Security and similar mandatory withholdings.

 

	
  

	
h.

	
Expenses.  Mr. Mathies shall be entitled to reimbursement for expenses incurred by him in connection with the discharge of his duties hereunder.  All such expense reimbursement shall be subject to and shall be submitted, documented and paid in accordance with the expense reimbursement policies of the Company, as such policies may change from time to time.  Mr. Mathies agrees that he will provide such documentation to the Company promptly after expenses are incurred.

 

Section 4:         Termination.  Sun may, at any time, in its sole discretion, terminate Mr. Mathies as Chairman and CEO and from all other positions with Sun and its direct and indirect subsidiaries; provided, however, that Sun shall provide Mr. Mathies with at least five (5) business days prior written notice of such termination and shall make the payments associated with such termination in accordance with Section 5.  Notwithstanding any provision in Section 1 hereof, the Term shall end on the date of Mr. Mathies’ termination of employment in accordance with this Agreement.

 

	
  

	
a.

	
Termination by Sun for “Good Cause.”  Sun may at any time, by written notice to Mr. Mathies at least five (5) business days prior to the date of termination specified in such notice and specifying the acts or omissions believed to constitute Good Cause (as defined below), terminate Mr. Mathies as Chairman and CEO and from all other positions with Sun and its direct and indirect subsidiaries for Good Cause.  Sun may relieve Mr. Mathies of his duties and responsibilities pending a final determination of whether Good Cause exists, and such action shall not constitute Good Reason (as defined below) for purposes of this Agreement.  Payment to Mr. Mathies upon a termination for Good Cause is set forth in Section 5(a).  “Good Cause” for termination shall mean any one of the following:

 

	
  

	
1.

	
Any felony criminal conviction (including conviction pursuant to a nolo contendere plea) under the laws of the United States or any state or other political subdivision thereof which, in the sole discretion of the Board of Directors, renders Mr. Mathies unsuitable for the position of either Chairman or CEO;

 

	
  

	
2.

	
Any act of financial malfeasance or financial impropriety, as determined by the Board of Directors in good faith;

 

  

3

  

	 	
3.

	
Mr. Mathies’ continued willful failure to perform the duties reasonably requested by the Board of Directors and commensurate with his positions as Chairman and CEO (other than any such failure resulting from his incapacity due to his physical or mental condition) after a written demand for substantial performance is delivered to him by the Board of Directors, which demand specifically identifies the manner in which the Board of Directors believes that he has not substantially performed his duties, and which performance is not substantially corrected by him within ten (10) days of receipt of such demand;

 

	
  

	
4.

	
Any material workplace misconduct or willful failure to comply with Sun’s general policies and procedures as they may exist from time to time by Mr. Mathies which, in the good faith determination of the Board of Directors, renders Mr. Mathies unsuitable for the position of either Chairman or CEO;

 

	
  

	
5.

	
Any material breach by Mr. Mathies of the provisions of this Agreement which has not been cured by Mr. Mathies thirty (30) days following delivery of notice to Mr. Mathies specifying such material breach, or the repetition of any such material breach after it has been cured; or

 

	
  

	
6.

	
Any act of moral turpitude, as determined by the Board of Directors in good faith.

 

	
  

	
b.

	
Termination by Sun without Good Cause.  Sun may at any time, by written notice to Mr. Mathies at least five (5) business days prior to the date of termination specified in such notice, terminate Mr. Mathies as Chairman and CEO and from all other positions with Sun and its direct and indirect subsidiaries.  If such termination is made by Sun other than by reason of Mr. Mathies’ death, Disability (as defined in Section 4(e)) or expiration of the Term, and Good Cause does not exist, such termination shall be treated as a termination without Good Cause and Mr. Mathies shall be entitled to payment in accordance with Section 5(b).

 

	
  

	
c.

	
Termination by Mr. Mathies for Good Reason.  Mr. Mathies may, at any time at his option within sixty (60) days following the initial existence of the particular  event or condition that constitutes Good Reason (as defined below), resign for Good Reason as Chairman and CEO and from all other positions with Sun and its direct and indirect subsidiaries by written notice to Sun at least thirty (30) days prior to the date of termination specified in such notice; provided, however, that Sun has not substantially corrected the event or condition that would constitute Good Reason prior to the date of termination.  Payment to Mr. Mathies upon a termination for Good Reason is set forth in Section 5(b).  Mr. Mathies’ continued employment shall not, by itself, constitute consent to or a waiver of rights with respect to any circumstances constituting Good Reason hereunder.

 

 

  

4

  

“Good Reason” shall mean the occurrence of any one of the following events or conditions without Mr. Mathies’ written consent:

 

(i)           A meaningful and detrimental reduction in Mr. Mathies’ authority, duties or responsibilities or a meaningful and detrimental change in his reporting responsibilities; (ii) A material failure of Sun to comply with the compensation provisions set forth in Sections 3(a) and 3(b) or benefits provisions set forth in Sections 3(d) - 3(f) (collectively, the “Benefits”) (other than a reduction of Benefits uniformly applicable to other members of senior management); or (iii) A material relocation of Mr. Mathies’ principal work location from  its current location in Orange County, California;

 

provided that Sun is provided with notice and opportunity to cure such breach and Mr. Mathies terminates his employment with Sun, in each case within the time periods prescribed under this Section 4(c).

	
  

	
d.

	
Voluntary Resignation.  Mr. Mathies may, at any time at his option with thirty (30) calendar days written notice to Sun, voluntarily resign without Good Reason as Chairman and CEO and from all other positions with Sun and its direct and indirect subsidiaries.  Payment to Mr. Mathies upon his voluntary resignation without Good Reason is set forth in Section 5(a).  Resignation from Sun shall automatically constitute resignation from all positions of any subsidiary.

 

	
  

	
e.

	
Death or Disability.  Mr. Mathies’ employment under this Agreement and the Term shall terminate automatically as of the date of Mr. Mathies’ death.  Sun may, at any time by written notice to Mr. Mathies at least five (5) business days prior to the date of termination specified in such notice, terminate Mr. Mathies as Chairman and CEO and from all other positions with Sun and its direct or indirect subsidiaries by reason of his Disability.  “Disability” shall mean any physical or mental condition or illness that prevents Mr. Mathies’ from performing his duties hereunder in any material respect for a period of 120 substantially consecutive calendar days, as determined by a physician selected by Sun or, if Mr. Mathies is incapacitated, reasonably acceptable to the Director of Medicine or equivalent senior physician at Hoag Hospital.  Payment to Mr. Mathies upon his termination by reason of his death or Disability is set forth in Section 5(a).

 

Section 5:           Payments Upon Termination.

 

	
  

	
a.

	
Payment Upon Termination for Good Cause, Resignation without Good Reason, Death or Disability.  In the event of termination of employment during the Term pursuant to Sections 4(a), 4(d) or 4(e), Mr. Mathies, or his estate where applicable, shall be paid any earned but unpaid Base Salary through the date of Mr. Mathies’ separation from service with Sun (the “Severance Date”)  and any accrued and unused paid time off through the Severance Date, which shall be paid to Mr. Mathies or his estate or beneficiary, as applicable, in a lump sum in cash upon or promptly following (and in all events within 30 days after) the Severance

 

 

  

5

  

Date (collectively, the “Accrued Obligations”).  In addition, in the case of a termination of employment pursuant to Sections 4(e), but not Sections 4(a) or 4(d), Mr. Mathies or his estate shall be paid (i) any accrued and unpaid Bonus for any prior fiscal year, which shall be paid to Mr. Mathies or his estate or beneficiary, as applicable, in a lump sum in cash at the time that annual bonuses are paid to senior management personnel with respect to that fiscal year, but in any event within seventy-five (75) days after the Severance Date, and (ii) a pro rata portion (based on the number of days of employment in the fiscal year of termination divided by 365 or 366, as applicable) of the Bonus, if any, for the fiscal year in which the termination occurs, which shall be paid at the time that annual bonuses are paid to senior management personnel with respect to that fiscal year, but in any event within seventy-five (75) days after the conclusion of the fiscal year to which such Bonus relates.  Mr. Mathies shall also receive his vested benefits in accordance with the terms of Sun’s compensation and benefit plans, and his participation in such plans and all other perquisites shall cease as of the Severance Date, except to the extent Mr. Mathies may elect to continue coverage under any welfare benefit plans as required by Part 6, Title I of the Employee Retirement Income Security Act of 1974, as amended.  Upon a termination under Section 4(a), 4(d) or 4(e), Mr. Mathies shall not be entitled to any compensation or benefits under this Agreement except as set forth in this Section 5(a).

 

	
  

	
b.

	
Payment Upon Termination by Sun without Good Cause or by Mr. Mathies for Good Reason.  In the event of a termination of Mr. Mathies’ employment during the Term pursuant to Sections 4(b) or 4(c), subject to the provisions of Section 7(f):

 

	
  

	
1.

	
Mr. Mathies shall be entitled to a severance benefit in an amount equal to (i) Mr. Mathies’ then current annual Base Salary multiplied by 2.25, plus (ii) any accrued and unpaid Bonus for any prior fiscal year, plus (iii) a pro rata portion of the Bonus for the fiscal year in which the termination occurs (determined by multiplying the Bonus Mr. Mathies would have received based upon actual performance had his employment continued through the end of the fiscal year by a fraction, the numerator of which is the number of days during the year of termination that Mr. Mathies is employed by the Company and the denominator of which is 365 or 366, as applicable).  The amount payable pursuant to clause (i) above shall be paid to Mr. Mathies in a lump sum cash payment in the month immediately following the month in which the Severance Date occurs.  The amount payable pursuant to clause (ii) above shall be paid to Mr. Mathies at the time that annual bonuses are paid to senior management personnel with respect to the applicable fiscal year, but in any event within seventy-five (75) days after the Severance Date.  The amount payable pursuant to clause (iii) shall be paid to Mr. Mathies at the time that annual bonuses are paid to senior management personnel with respect to the applicable fiscal year in which the Severance Date occurs, but in any event within seventy-five (75) days after the conclusion of such fiscal year.

 

 

  

6

  

 

	 	
2.

	In the event such termination occurs on or within two years following the date of a Change in Control, Mr. Mathies shall not be entitled to the amount described in Section 5(b)(1) above but shall instead be entitled to an amount equal to (i) the sum of his then current annual Base Salary and his target Bonus for the then current fiscal year multiplied by 2, plus (ii) any accrued and unpaid Bonus for any prior fiscal year, plus (iii) a pro rata portion of the target Bonus for the fiscal year in which the termination occurs (assuming the Company achieves 100% of the financial performance target or targets for such fiscal year that are utilized in determining the amount of the Bonus and determined by multiplying the amount Mr. Mathies would have received had his employment continued through the end of the fiscal year by a fraction, the numerator of which is the number of days during the performance year of termination that Mr. Mathies is employed by the Company and the denominator of which is 365 or 366, as applicable).  The amounts payable pursuant to clauses (i) and (iii) above shall be paid to Mr. Mathies in a lump sum in the month immediately following the month in which the Severance Date occurs.  The amount payable pursuant to clause (ii) above shall be paid to Mr. Mathies at the time that annual bonuses are paid to senior management personnel with respect to the applicable fiscal year, but in any event within seventy-five (75) days after the Severance Date.

 

	
  

	
3.

	
Mr. Mathies’ participation in any other retirement and benefit plans and perquisites shall cease as of the Severance Date, except Sun shall pay premiums pursuant to COBRA for continuing coverage under Sun’s health plans for Mr. Mathies and his eligible dependents (as determined under Sun’s health plans), or, at Mr. Mathies’ option (which shall be communicated by written notice to Sun prior to the month such election is to take effect), provide a separate cash payment monthly equal to the amount of the COBRA premium until the earlier of (i) the eighteen-month anniversary (or, in the case of a Change in Control termination referred to in Section 5(b)(2) above, the twenty-four-month anniversary) of the last day of the month in which the Severance Date occurs or (ii) the date of Mr. Mathies becomes eligible to participate in a plan of another employer or (iii), as to any of his eligible dependents, the date on which the eligible dependent becomes eligible to participate in a plan of another employer.  Any cash payment due to Mr. Mathies pursuant to this Section 5(b)(3) shall be paid by Sun not later than the end of the month to which such payment relates.

 

	
  

	
4.

	
Upon any such termination, Mr. Mathies shall be entitled to receive any Accrued Obligations payable to Mr. Mathies as set forth in Section 5(a).

 

	
  

	
5.

	
Notwithstanding the foregoing, Mr. Mathies’ right to receive the severance payments described in this Section 5(b) shall be and is conditioned upon his execution and delivery of (and not revoking) a general release in favor of Sun, which shall not be inconsistent with the

 

 

  

7

  

terms of this Agreement, and such other documents and instruments as are reasonably required by Sun, each of which Mr. Mathies shall deliver to Sun within twenty-one (21) days following the Severance Date.

 

A termination of Mr. Mathies’ employment during the Term without Good Cause (other than by reason of his death or Disability) within six (6) months preceding a Change in Control shall be treated as if such termination occurred on the date of such Change in Control if it is reasonably demonstrated that the termination was at the request of the third party who has taken steps reasonably calculated to effect such Change in Control or otherwise arose in connection with or in anticipation of such Change in Control.  In such case, Mr. Mathies shall be entitled (in addition to the benefits described in Section 5(b)(1) which were triggered in connection with the original Severance Date) to the difference between the non-discounted present value of the benefits described in Section 5(b)(2) above less the non-discounted present value of the benefits described in Section 5(b)(1) above (each determined as of the Severance Date), which difference shall be paid to Mr. Mathies upon or within thirty (30) days following the occurrence of such Change in Control.

 

	
  

	
c.

	
“Change in Control.”  For purposes of this Section 5, a “Change in Control” shall be deemed to have occurred if any of the following events occurs:

 

	
  

	
1.

	
Any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company (an “Acquiring Person”), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of more than 33 1/3% of the then outstanding voting stock of the Company;

 

	
  

	
2.

	
A merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 51% of the combined voting power of the voting securities of the Company or surviving entity outstanding immediately after such merger or consolidation;

 

	
  

	
3.

	
A sale or other disposition by the Company of all or substantially all of the Company’s assets;

 

	
  

	
4.

	
During any period of not more than one (1) year (beginning on or after the Effective Date), individuals who at the beginning of such period constitute the Board of Directors and any new director (other than a director who is a representative or nominee of an Acquiring Person) whose election by the Board of Directors or nomination for election by the Company’s

 

 

  

8

  

shareholders was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of the period or whose election or nomination was previously so approved, no longer constitute a majority of the Board of Directors;

 

provided, however, in no event shall any acquisition of securities, a change in the composition of the Board of Directors or a merger or other consolidation pursuant to a plan of reorganization under chapter 11 of the Bankruptcy Code with respect to the Company (“Chapter 11 Plan”), or a liquidation under the Bankruptcy Code constitute a Change in Control and provided further that in no event shall any transaction be considered a Change in Control if it does not constitute a change in the ownership or effective control of Sun or a change in the ownership of a substantial portion of Sun’s assets, each within the meaning of Section 409A of the United States Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations promulgated thereunder (“Section 409A”).  In addition, notwithstanding Sections 5(c)(1), 5(c)(2), 5(c)(3) and 5(c)(4), a Change in Control shall not be deemed to have occurred in the event of a sale or conveyance in which the Company continues as a holding company of an entity or entities that conduct the business or businesses formerly conducted by the Company, or any transaction undertaken for the purpose of reincorporating the Company under the laws of another jurisdiction, if such transaction does not materially affect the beneficial ownership of the Company’s capital stock.  A Change in Control shall not, by itself, constitute Good Reason hereunder.

 

	
  

	
d.

	
Cooperation.  Following the expiration or a termination of this Agreement for any reason, Mr. Mathies shall provide such cooperation as is reasonably required by the Company, including, without limitation, consulting with the Company with respect to litigation and/or matters that relate to facts and circumstances that occurred during the term of his employment by the Company, and executing such documents and instruments relating to such term of employment as are reasonably requested by Sun.

 

Section 6:           Reduction in Compensation to Avoid Excise Tax.  Notwithstanding anything herein to the contrary, if the excise tax imposed by Section 4999 of the Code or any similar or successor tax (the “Excise Tax”) applies to any payments, benefits and/or amounts received (or otherwise to be received) by Mr. Mathies pursuant to Section 5(b) or otherwise, including, without limitation, amounts received or deemed received, within the meaning of any provision of the Code, by Mr. Mathies as a result of (and not by way of limitation) any automatic vesting, lapse of restrictions and/or accelerated target or performance achievement provisions, or otherwise, applicable to outstanding grants or awards to Mr. Mathies under any of Sun’s incentive plans (collectively, the “Total Payments”), then the Total Payments shall be reduced (but not below zero) so that the maximum amount of the Total Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Total Payments to be subject to the Excise Tax; provided that such reduction to the Total Payments shall be made only if the total after-tax benefit to Mr. Mathies is greater after giving effect to such reduction than if no such reduction had been made.  If such a reduction is required, the Company shall reduce or eliminate the Total Payments by first reducing or eliminating any accelerated vesting of stock

 

  

9

  

options that then have a term of one year or less and are then under-water, then by reducing or eliminating any cash severance benefits, then by reducing or eliminating any accelerated vesting of any other stock options, then by reducing or eliminating any accelerated vesting of other equity awards, and then by reducing or eliminating any other remaining Total Payments, in each case in reverse order beginning with the payments which are to be paid the farthest in time from the date of the related change in control event.  The preceding provisions of this Section 6 shall take precedence over the provisions of any other plan, arrangement or agreement governing Mr. Mathies’ rights and entitlements to any benefits or compensation.  The Company agrees that, prior to and in connection with any Change in Control, the Company will reasonably consider alternatives (if any) Mr. Mathies may have to eliminate or mitigate the impact of any Excise Tax on his Total Payments.

 

	
  

	
a.

	
Determination of Reduction.  The amount of the reduction in compensation shall be determined by an accounting firm retained by Sun (the “Accounting Firm”) using such formulas as the Accounting Firm deems appropriate.  No compensation to Mr. Mathies shall be reduced pursuant to the provisions of this Section 6 if the Accounting Firm determines that the payments to Mr. Mathies are not subject to an Excise Tax.

 

	
  

	
b.

	
Payment of Excise Tax.   If a reduction in compensation that results in no Excise Tax being payable does not result in Mr. Mathies having a more positive after-tax financial position than he would have enjoyed without the reduction but with the resulting application of the Excise Tax, then, at the option of Mr. Mathies, he can choose to pay the amount of the Excise Tax and avoid the reduction in compensation.  The amount of the Excise Tax shall be determined by the Accounting Firm using such formulas as the Accounting Firm deems appropriate.  In the event the Mr. Mathies chooses to pay the Excise Tax, he will have no right of reimbursement or payment of additional compensation from the Company.

 

Section 7:            Protection of Sun’s Interests.

 

	
  

	
a.

	
Ownership of Property.  Mr. Mathies acknowledges and agrees that any and all property developed, discovered or created by him during the pendency of his employment by the Company, including, without limitation, any and all copyrights, trademarks, trade secrets or other intellectual property is and shall remain the sole and exclusive property of the Company and Mr. Mathies hereby sells, assigns and otherwise transfers all of his right, title and interest in and to such property, if any, to the Company.

 

	
  

	
b.

	
Confidentiality.  Mr. Mathies agrees that he will not at any time, during or after the term of this Agreement, except in performance of his obligations to Sun hereunder or with the prior written consent of the Board of Directors, directly or indirectly disclose to any person or organization any secret or “Confidential Information” that Mr. Mathies may learn or has learned by reason of his association with Sun and its direct and indirect subsidiaries.  For purposes of all of this Section 7 only, “Sun” shall also include Sun’s direct and indirect subsidiaries.  The term “Confidential Information” means any information not

 

 

  

10

  

previously disclosed to the public or to the trade by Sun’s management with respect to Sun’s products, services, business practices, facilities and methods, salary and benefit information, trade secrets and other intellectual property, systems, procedures, manuals, confidential reports, product price lists, pricing information, customer lists, financial information (including revenues, costs or profits associated with any of Sun’s products or lines of business), business plans, prospects or opportunities.

 

	
  

	
c.

	
Exclusive Property.  Mr. Mathies confirms that all Confidential Information is and shall remain the exclusive property of Sun.  All business records, papers and documents kept or made by Mr. Mathies relating to the business of Sun shall be and remain the property of Sun.  Upon the expiration or termination of Mr. Mathies’ employment with Sun for any reason or upon the request of Sun at any time, Mr. Mathies shall promptly deliver to Sun, and shall not without the consent of the Board of Directors, retain copies of, Confidential Information, or any written materials not previously made available to the public, or records and documents made by Mr. Mathies or coming into Mr. Mathies’ possession concerning the business or affairs of Sun.

 

	
  

	
d.

	
Nonsolicitation.  Mr. Mathies shall not, during his employment under this Agreement, and for two (2) years following the termination of this Agreement, for whatever reason or cause, in any manner induce, attempt to induce, or assist others to induce, or attempt to induce, any employee, agent, representative or other person associated with Sun or any customer, patient or client of Sun to terminate his or her association or contract with Sun, nor in any manner, directly or indirectly, interfere with the relationship between Sun and any of such persons or entities.

 

	
  

	
e.

	
Non-Disparagement.  Mr. Mathies shall not during his employment under this Agreement and for two (2) years following termination of the Agreement, for whatever reason, make any statements that are intended to or that would reasonably be expected to harm Sun or any of its subsidiaries or affiliates, their respective predecessors, successors, assigns and employees and their respective past, present or future officers, directors, shareholders, employees, trustees, fiduciaries, administrators, agents or representatives.  Sun and its officers and directors will not make any statements that are intended to or that would reasonably be expected to harm Mr. Mathies or his reputation or that reflect negatively on Mathies’ performance, skills or ability.

 

	
  

	
f.

	
Violation of Covenants.

 

	
  

	
1.

	
Without intending to limit the remedies available to Sun, Mr. Mathies acknowledges that a breach of any of the covenants in this Section 7 may result in material irreparable injury to Sun for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat thereof, Sun shall be entitled to obtain a temporary restraining order and/or a

 

 

  

11

  

preliminary or permanent injunction restraining Mr. Mathies from engaging in activities prohibited by this Section 7 or such other relief as may be required to specifically enforce any of the covenants in this Section 7.

 

	
  

	
2.

	
In the event that Mr. Mathies breaches any of the covenants in this Section 7, Sun shall be entitled to cease payment of any further compensation or benefits pursuant to Section 5(b) or otherwise (other than compensation payable pursuant to Section 5(b)(1)(ii)) and recover from Mr. Mathies any amounts paid to him pursuant to the provisions of Section 5(b)(1)(i), Section 5(b)(2)(i) or Section 5(b)(2)(iii).

 

Section 8:            Miscellaneous Provisions.

 

	
  

	
a.

	
Amendments, Waivers, Etc.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by both parties.  No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

 

	
  

	
b.

	
Validity.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

 

	
  

	
c.

	
Entire Agreement.  This Agreement sets forth the entire agreement and understanding of the parties hereto with respect to the matters covered hereby.  No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement and this Agreement shall supersede all prior agreements, including the Existing Agreement, negotiations, correspondence, undertakings and communications of the parties, oral or written, with respect to the subject matter hereof.

 

	
  

	
d.

	
Resolution of Disputes.  Any disputes arising under or in connection with this Agreement may, at the election of Mr. Mathies or Sun, be resolved by binding arbitration, to be held in Orange County, California in accordance with the rules and procedures of the American Arbitration Association.  If arbitration is elected, Mr. Mathies and Sun shall mutually select the arbitrator. If Mr. Mathies and Sun cannot agree on the selection of an arbitrator, each party shall select an arbitrator and the two arbitrators shall select a third arbitrator who shall resolve the dispute.  Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  Nothing herein shall limit the ability of Sun to obtain the injunctive relief described in Section 7(f) pending final resolution of matters that are sent to arbitration.

 

 

  

12

  

	 	
e.

	

Attorneys’ Fees.  Sun shall pay or reimburse Mr. Mathies on an after-tax basis for all costs and expenses (including, without limitation, court costs, costs of arbitration and reasonable legal fees and expenses which reflect common practice with respect to the matters involved) incurred by Mr. Mathies if Mr. Mathies prevails on the merits of any claim, action or proceeding (i) contesting or otherwise relating to the existence of Good Cause in the event of Mr. Mathies’ termination of employment during the Term for Good Cause; (ii) enforcing any right, benefit or obligation under this Agreement, or otherwise enforcing the terms of this Agreement or any provision thereof; or (iii) asserting or otherwise relating to the existence of Good Reason in the event of Mr. Mathies’ termination of employment during the Term for Good Reason.

 

	
  

	
f.

	
Governing Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California.

 

	
  

	
g.

	
Notice.  For the purpose of this Agreement, notice, demands and all other communication provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand delivery or overnight courier or mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows or to other addresses as each party may have furnished to the other:

 

To Sun:

 

Sun Healthcare Group, Inc.

Attention:  General Counsel

18831 Von Karman, Suite 400

Irvine, California 92612-1537

 

To Mr. Mathies:

 

At his last address as it appears on the records of the Company

 

	
  

	
h.

	
Section 409A.

 

	
  

	
1.

	
If Mr. Mathies is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of Mr. Mathies’ separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder) and any payment or benefit provided in Section 5 hereof constitutes a “deferral of compensation” within the meaning of Section 409A, Mr. Mathies shall not be entitled to any such payment or benefit until the earlier of: (i) the date which is six (6) months after his separation from service for any reason other than death, or (ii) the date of his death.  The provisions of this paragraph shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A.  Any amounts otherwise payable to Mr. Mathies upon or in the six (6) month period following his separation from service that are not

 

 

  

13

  

so paid by reason of this Section 8(h)(1) shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after Mr. Mathies’ separation from service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of his death).

 

	
  

	
2.

	
To the extent that any reimbursements pursuant to Sections 3(h), 5(b)(3)  and 8(e) are taxable to Mr. Mathies, any reimbursement payment due to Mr. Mathies pursuant to such provision shall be paid to Mr. Mathies on or before the last day of Mr. Mathies’ taxable year following the taxable year in which the related expense was incurred.  The benefits and reimbursements pursuant to Sections 3(h), 5(b)(3)and 8(e) are not subject to liquidation or exchange for another benefit and the amount of such benefits and reimbursements that Mr. Mathies receives in one taxable year shall not affect the amount of such benefits and reimbursements  that Mr. Mathies receives in any other taxable year.

 

	
  

	
3.

	
It is intended that any amounts payable under this Agreement and Sun’s and Mr. Mathies’ exercise of authority or discretion hereunder shall comply with and avoid the imputation of any tax, penalty or interest under Section 409A.  This Agreement shall be construed and interpreted consistent with that intent.

 

The parties hereto have executed this Agreement as of the date first above written.

 

	  	  
	
WILLIAM A. MATHIES

	  
	  	  
	
 

/s/ William A. Mathies

	  
	  	  
	
 

 

SUN HEALTHCARE 

GROUP, INC.

 

	  
	  	  
	
/s/ Michael Newman

	  
	
Its Executive Vice 

President

	  

 

  

14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}]]