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FILED: ERIE COUNTY CLERK 01/20/2023 12:21 PM INDEX NO. 801061/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/20/2023
EXHIBIT A
FILED: ERIE COUNTY CLERK 01/20/2023 12:21 PM INDEX NO. 801061/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 01/20/2023
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EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is entered
into effective as of the R,_ day of Narch , 201 between The McGuire Group,
Inc., a New York Corporation, with its principal place of business at 560 Delaware Avenue,
Suite 400, Buffalo, New York 14202 ("Employer"), and F. James McGuire, an individual
residing at Bu·fTo./ o N (the "Executive").
,
WHEREAS, Employer desires to employ the Executive, and the Executive desires to be
employed by the Employer, upon the terms and conditions set forth below:
NOW, THEREFORE, the parties hereto agree as follows:
1. EMPLOYMENT, POSITION, DUTIES, AND TERM.
1.1 Employment and Position. The Employer hereby employs the Executive, and
the Executive accepts employment, as the Employer's Chief Executive Officer. Executive will
report solely to the Board of Directors of the Employer.
1.2 Duties and Responsibilities. The Executive shall be responsible for general
oversight and directing the business and affairs of Employer's facilities owned by the entities set
forth on Schedule A (the "Facilities"), and shall perform all such duties as customarily
associated with Executive's position and have historically been rendered by Executive. The
parties hereto agree that the nature of Executive's duties are such that Executive is not required
to be physically present at any of the Facilities or at any office of the Employer; provided that
Executive shall be available to attend such meetings as are reasonably requested by Employer.
The parties acknowledge that Executive is involved with various outside businesses, but will
devote time and energy to his duties under this Agreement consistent with his efforts during the
twelve month period immediately preceding the Commencement Date; and further provided that
the parties agree Executive will reduce said time and energy dedicated to Employer herewith
commensurate with the points of transition and proportionate to reductions in the Base Salary set
forth in Section 2.1 below. The Executive agrees that, during the Term of this Agreement, he
will serve the Employer faithfully, exclusively and to the best of his ability and will, to the best
of his ability, promote the business and affairs of the Employer. The Executive shall perform his
duties and responsibilities under this Agreement in accordance with reasonable standards and in
a manner consistent with all applicable laws, rules and regulations and all policies and
procedures of Employer as same may be changed from time to time. The reasonableness of such
standards shall be measured against standards for executive performance prevailing generally in
the nursing home healthcare industry and entities such as Employer.
1.3 No Conflicting Duties. Executive hereby represents and warrants that he is
under no contractual commitments inconsistent with his obligations set forth in this Agreement
and agrees that during the Term (as such term is defined below), he will not render or perform
services or enter into any contract to do so, for any other entity or person which is inconsistent
with the provisions of this Agreement.
1.4 Term of Employment. The term of the Executive's employment hereunder shall
commence on ((, March , 20E (the "Commencement Date") and continue until the
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later of: (i) such date that is six (6) years from the date hereof, or (ii) such date that Executive
and his siblings individually or collectively no longer own any of the shares of Employer (the
"Term"), unless terminated pursuant to Section 3 of this Agreement.
2. COMPENSATION.
2.1 Base Salary.
(a) The Employer agrees to pay the Executive a base salary, before the
customary and proper payroll deductions, at the rate of Four Hundred Twenty Four Thousand
Dollars ($424,000) per annum (the "Base Salary"). The Base Salary shall be payable on the
same payroll schedule as that of other exempt employees of the Employer, but not less frequently
than monthly. Where necessary to conform to the Employer's payroll schedule at the
commencement or termination of this Agreement, the Base Salary shall be computed on a per
diem basis. The Base Salary shall be decreased: (a) by One Hundred Thousand Dollars
($100,000) at such time as Executive and his siblings individually or collectively are no longer
owners of a majority interest in Employer; and (b) by an additional One Hundred Thousand
Dollars ($100,000) at such time as Executive and his siblings individually or collectively own
less than twenty percent (20%) of the shares of Employer.
(b) Subject to any adjustments made pursuant to Section 2.1(a) above, the
Base Salary of Executive shall increase by three percent (3%) at the end of each calendar year
during the Term.
2.2 Bonus. The Executive may be paid, in addition to the Base Salary described in
and adjusted pursuant to Section 2.1, an annual performance bonus ("Bonus") in a discretionary
amount determined by the Board of Directors of the Employer within ninety (90) days of the end
of each calendar year during the Term; provided, however, that Executive shall not be eligible to
receive any Bonus until March 15, 2019.
2.3 Standard Benefits. While this Agreement is in effect, the Executive shall be
entitled to participate in any benefit programs instituted, maintained, or provided by the
Employer for its similarly situated executive officers, including, without limitation, life insurance
plans, medical and health plans, pension and retirement plans, disability plans, and similar plans
or programs, all on the same terms as such benefits are now and hereafter available to the
Employer's executive officers.
2.4 Perquisites. During the Term of this Agreement, Executive shall receive the
following perquisites:
(a) Vehicle. The Executive will be provided, at Employer's expense, with a
passenger motor vehicle, the cost of which shall not exceed One Thousand Dollars ($1,000) per
month, to be agreed upon by Employer and Executive and used by the Executive in the
performance of his duties and for his reasonable personal use, within his reasonable discretion.
It is understood that if the Executive does use the vehicle for personal transportation, he will be
subject to income taxes for his personal usage of the vehicle, pursuant to the IRS rules on such
matters. The costs of insurance, repairs and maintenance associated with such vehicle will be
paid for by Employer.
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weeks'
(b) Paid Time Off. The Executive shall be afforded six (6) paid time
off annually.
2.5 Reimbursement of Expenses. The Executive shall be entitled to reimbursement
by the Employer for reasonable expenses incurred by the Executive in the performance of his
duties hereunder, including the costs of business entertainment, travel and attendance at
conventions and meetings. The Executive shall submit reimbursement claims, with appropriate
supporting documentation, within thirty (30) days of the date an expense is incurred.
3. TERMINATION.
3.1 Termination by the Employer. The Executive's employment under this
Agreement may be terminated by Employer as provided in this Section 3.1.
(a) For Cause. Executive's employment may be terminated by the Employer
"Cause,"
for provided Employer delivers a written notice to Executive setting forth the grounds
"Cause"
for Cause. shall mean any one of the following:
(i) Executive's material breach of this Agreement which has not been
cured within thirty (30) days of receiving notice thereof;
(ii) Executive's gross negligence, willful misconduct or breach of
fiduciary duty, including conduct which results in or is likely to result in damage to the
Employer or its reputation;
(iii) Executive's indictment, conviction or plea of guilty or nolo
contendere for a felony or any crime involving fraud, theft, breach of trust, moral
turpitude or other immoral conduct which results in material damage to Employer, its
reputation or interests of Employer, subsidiaries, affiliates and/or their respective
members, shareholders, directors, officers, employees and/or contractors;
(iv) Executive's loss of eligibility, termination, suspension and/or
exclusion to participate any federal or state health care reimbursement program, including
without limitation, the Medicare Program and the Medicaid Program;
(v) Executive's material violation of any statute, rule and/ or
regulation of any governmental body or agency asserting jurisdiction over Employer; or
(vi) Executive is inattentive to, neglectful of or fails to perform the
duties to be performed by him hereunder (other than as a result of illness or accident) and
such conduct has not been cured within fifteen (15) days of notice thereof.
"Cause"
Notwithstanding anything contained herein to the contrary, shall not
mean the failure of Executive to perform his duties when such failure is directly caused by
Employer's failure to furnish Executive with appropriate and adequate resources to perform his
duties.
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(b) Disability. Executive's employment may be terminated if the Executive
is unable, as a result of any physical or mental disability, to render service to the Employer
effectively in the manner required by this Agreement for one hundred eighty (180) days (the
"Disability Period") in any period of three hundred sixty-five (365) consecutive days. Upon
expiration of the Disability Period, termination shall thereafter become effective on the thirtieth
(30*) day following delivery of written notice of termination by the Employer to the Executive,
unless the Executive is no longer disabled, as confirmed to the Employer by written opinion of
Executive's physician who has been treating the Executive for the disability. The Employer
reserves the right to require the Executive to obtain, at Employer's expense, a second opinion
regarding the absence of such disability from a physician selected by Executive who specializes
in the field of the disabling illness. If, within thirty (30) days after request by Employer,
Executive fails to provide such second opinion confirming that Executive is no longer disabled,
the termination shall become effective upon expiration of said thirty (30) day period.
3.2 Termination by the Executive. The Executive may terminate his employment
under this Agreement as provided in this Section 3.2.
(a) Election of the Executive. The Executive may terminate his employment
under this Agreement at any time prior to the expiration of the Term, at his sole discretion, upon
written notice to the Employer, such termination to be effective on the termination date stated in
the written notice which shall be at least one hundred eighty (180) days after the written notice is
received by the Employer. The Employer, in its discretion, may accelerate the effective date of
termination in which event said earlier termination shall be considered a termination by the
Executive under this Section 3.2(a).
(b) Good Reason. The Executive may terminate his employment for "Good
Reason,"
which shall mean a material change in the terms and conditions of employment as
provided hereunder, including any reduction in the Executive's Base Salary without Executive's
consent.
3.3 Termination by Death. The Executive's employment under this Agreement
shall terminate automatically upon the Executive's death, effective on the date of death.
3.4 Payments by Employer Upon Termination. Employer shall pay Executive or
his estate, as the case may be, an amount equal to Eight Hundred Forty-Eight Thousand Dollars
($848,000), less any required withholdings or deductions (the "Termination Amount"), upon:
(a) Employer's termination of Executive's employment under this Agreement
for any reason other than: (i) Cause pursuant to Section 3.1(a); (ii) Disability pursuant to Section
3.1(b); (iii) Death pursuant to Section 3.3; or (iv) the natural expiration of the Term; or
(b) Executive's termination for Good Reason pursuant to Section 3.2(b).
The Termination Amount shall be payable to executive in twenty-four (24) equal monthly
installments commencing on the first day of the month following the effective date of
termination of this Agreement.
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3.5 Cooperation. Executive agrees that both during and after employment he or she
shall, at the request of Employer, render all assistance and perform all lawful acts that Employer
considers necessary or advisable in connection with any litigation involving Employer or any
director, officer, employee, shareholder, agent, representative, consultant, client, or vendor of
Employer.
4. NON-COMPETITION AND CONFIDENTIALITY.
4.1 Non-Competition. The Executive agrees that, for two (2) years after expiration
of this Agreement or termination of his employment under this Agreement for any reason, the
Executive will not, whether directly or indirectly: (i) be a shareholder, member or other owner
and/or have another other involvement in the ownership, management and/or control (whether
directly or indirectly, individually, jointly, or as part of a group) of any residential health care
facility, skilled nursing facility, assisted living facility, adult home, adult program and other
residential or institutional centers (each a "Nursing Facility", and collectively, "Nursing
Facilities") in the Restricted Area (as such term is defined below); (ii) operate, administer,
consult or in any way participate in the operation, management, financing or other similar
activity of Nursing Facilities within the Restricted Area; and/or (iii) interfere with the
Employer's relationship with, or endeavor to entice away from the Employer or Employer's
parents, affiliates, subsidiaries, the Entities and their respective parents, affiliates and
subsidiaries and/or the Facilities (collectively, the "Employer Entities"), any person or entity
with which any of the Employer Entities has an arrangement to provide services, or any of their
employees, clients or referral sources during the Term. For the purposes of this Section 4.1,
Area"
"Restricted shall mean: (i) the eight (8) counties comprising the Eighth (8*) Judicial
District of New York, (ii) Macomb County, Michigan, Suffolk County, New York and any
counties contiguous to such counties, and (iii) any county in which a Nursing Facility is
operated, managed and/or owned by any of the Employer Entities, and any county contiguous to
such county. Employer acknowledges and agrees that this Section 4.1 shall not apply to
Executive's real property development, construction, brokerage and property management
activities in his role as owner and/or employee of McGuire Development Company.
4.2 Confidential Information. Executive acknowledges that he has been and will be
provided with information about, and his employment with the Employer will directly involve,
confidential affairs and information, proprietary information and trade secrets of the Employer,
including without limitation proprietary information regarding costs, profits, markets, sales,
products, pricing policies, operations methods, client lists, plans for future developments, and
other information not readily available to the Employer's competitors, all of which are highly
confidential and proprietary ("Confidential Information"). In recognition of the foregoing, the
Executive covenants and agrees:
(a) That he will keep secret and hold in confidence all Confidential
Information of the Employer and not disclose any Confidential Information to anyone outside of
the Employer, either during or after his employment with the Employer, except with the
Employer's prior written consent or as required by law;
(b) That he will not make use of any Confidential Information for his own
purposes or the benefit of anyone other than the