NINTH AMENDMENT TO EMPLOYMENT AGREEMENT
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- Annice Austin
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1 NINTH AMENDMENT TO EMPLOYMENT AGREEMENT THIS NINTH AMENDMENT ("Ninth Amendment") to the Employment Agreement ("Agreement") is entered into effective July 1, 2015 by and between WASHINGTON TOWNSHIP HEALTH CARE DISTRICT, doing business as WASHINGTON HOSPITAL HEALTHCARE SYSTEM at 2000 Mowry Avenue, Fremont, CA and organized and existing under the laws of the State of California (hereinafter "DISTRICT") and NANCY FARBER (hereinafter "FARBER"). RECITALS A. On March 12, 2008, DISTRICT and FARBER entered into the Agreement which provided for a term of forty-eight (48) months, beginning on November 1, 2007 and ending on October 31, B. Subsequently, the DISTRICT and FARBER have amended the Agreement on eight separate occasions. In the Eighth Amendment, the parties extended the term of the agreement to June 30, C. On September 9, 2015, the Board of Directors of the DISTRICT approved an amendment to the Agreement increasing FARBER's base salary to $775,000 effective July 1, NOW, THEREFORE, the parties hereby agree to amend the Agreement as follows: 1. Salary Increase. Effective July 1, 2015, FARBER's base salary shall be $775,000 annually. 2. Conflicts. Should any provisions of this Ninth Amendment conflict with any provisions of the Agreement or any other amendment to the Agreement, the provisions of this Ninth Amendment shall control. 3. Definitions. The definitions set forth in the Agreement are incorporated in this Ninth Amendment by reference. 4. Counterparts. This Ninth Amendment may be executed in two or more faxed or ed counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. 1
2 5. Other Terms and Conditions. All other terms and conditions of the Agreement shall remain in full force and effect. WASHINGTON TOWNSHIP HEALTH CARE DISTRICT ). / ~- B~ ~ 'Z)v' PATRICIA DANIELSON, RHIT President of the Board of Directors NANCY FARBER By~b NANCYF BER Chief Executive Officer 2
3 EIGHTH AMENDMENT TO EMPLOYMENT AGREEMENT THIS EIGHTH AMENDMENT ("Eighth Amendment") to the Employment Agreement ("Agreement") is entered into effective July 1, 2015 by and between WASHINGTON TOWNSHIP HEALTH CARE DISTRICT, doing business as WASHINGTON HOSPITAL HEALTHCARE SYSTEM at 2000 Mowry Avenue, Fremont, CA and organized and existing under the laws of the State of California (hereinafter "DISTRICT'') and NANCY FARBER (hereinafter "FARBER"). RECITALS A. On March 12, 2008, DISTRICT and FARBER entered into the Agreement which provided for a term of forty-eight (48) months, beginning on November 1, 2007 and ending on October 31, B. Subsequently, the DISTRICT and FARBER have amended the Agreement on seven separate occasions. NOW, THEREFORE, the parties hereby agree to amend the Agreement as follows: 1. Term. Section 1. is deleted and replaced in its entirety as follows: 1. District hereby employs FARBER for a period of forty-eight (48) months beginning on July 1, 2015 and ending on June 30, Compensation. Section 7.c and 7.b. are deleted and replaced m their entirety as follows: 7.c. On or before August 31st of each year, FARBER shall meet with DISTRICT's Board of Directors for the purpose of establishing overall performance goals. Annually, DISTRICT shall compare FARBER's performance against the overall performance goals. Depending on FARBER's performance as judged by DISTRICT, FARBER shall be eligible to receive incentive compensation. Any incentive compensation awarded will be paid before the end of September of each year. 7.b. FARBER shall receive such annual increases in salary as may be determined by DISTRICT's Board of Directors in its sole discretion on or before September 30th of the given year. 1
4 4. Disability. Section 8.b.ii. of the Agreement is deleted and replaced in its entirety as follows: ii. The date that Farber reaches age Conflicts. Should any provisions of this Eighth Amendment conflict with any provisions of the Agreement or any other amendment to the Agreement, the provisions of this Eighth Amendment shall control. 6. Definitions. The definitions set forth in the Agreement are incorporated in this Eighth Amendment by reference. 7. Counterparts. This Eighth Amendment may be executed in two or more faxed or ed counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. 8. Other Terms and Conditions. All other terms and conditions of the Agreement shall remain in full force and effect. WASHINGTON TOWNSHIP HEALTH CARE DISTRICT By---"'-----':.::c :'-----~~--''--~~~~- PATRICIA DANIELSON, RHIT President of the Board of Directors NANCY FARBER ByN~ Chief Executive Officer 2
5 COPy EMPLOYMENT AGREEMENT This Employment AGREEMENT [hereinafter AGREEMENT] is made and entered into by WASHINGTON TOWNSHIP HEALTH CARE DISTRICT [hereinafter DISTRICT] and NANCY FARBER [hereinafter FARBER] on March 12, DISTRICT hereby employs FARBER for a period of forty-eight (48) months beginning November 1, 2007 and ending on October 31, FARBER shall serve as the Chief Executive Officer and Administrator of DISTRICT, and in this capacity she shall do and perform the duties generally described in Exhibit A hereto. In addition, FARBER shall do and perform such other services, acts, or things necessary or advisable to manage and conduct the business of DISTRICT and shall be held to the highest professional standards and performance. 3. Devotion of Time / Competition. a. Subject to the terms and conditions of this AGREEMENT, FARBER shall devote her entire productive time, ability, and attention to the business of DISTRICT during the term of this contract. b. FARBER shall not engage in any other business duties or pursuits whatsoever, or directly or indirectly render any services of a business, commercial, or professional nature to any other person or organization, whether for compensation or otherwise, without the prior written consent of DISTRICT's Board of Directors. The DISTRICT provides herein, by execution hereof, its advance express consent to FARBER'S participation in the activities, pursuits and duties described on Exhibit B hereto. c. Further, it is DISTRICT's desire that FARBER become involved in academic, civic, social and professional organizations and activities in order to promote and enhance the relations of DISTRICT with the Medical Staff and community it serves and such activities shall not be deemed a breach of this AGREEMENT. d. In addition, FARBER shall be pennitted to perform consulting services on her own time and at her own expense outside the boundaries of WASHU\JGTON TOWNSHIP HEALTH CARE DISTRICT after first giving written notice to DISTRICT's Board of Directors. Nothing in this authorization shall be interpreted as a waiver of the trade secret provisions of this AGREEMENT. Page 1 of9
6 e. This AGREEMENT shall not be interpreted to prohibit FARBER from making passive personal investments or conducting private business affairs if those activities do not materially interfere with the services required under this AGREEMENT. 4. Trade Secrets. FARBER has had access to and will continue to have access to and become acquainted with information concerning the intimate operations and processes of DISTRICT, including without limitation, financial, personnel, marketing and strategic planning, and other information central to the past and future operation ofthe DISTRICT. During the term of this AGREEMENT and for a period of three years thereafter, FARBER agrees that she shall not disclose any such information, directly or indirectly, or misuse or misappropriate such information for the benefit of any person or entity whose business, operations or activities are located, or may become located, within or adjacent to the areas served by the DISTRICT. 5. Services as Consultant. Following the term of this AGREEMENT, FARBER shall make her advice and counsel available to DISTRICT for such a period and subject to such terms as DISTRICT and FARBER may mutually agree. 6. Obligations of DISTRICT a. DISTRICT shall provide FARBER with the compensation, incentives, benefits, and business expense reimbursement specified in this AGREEMENT. b. DISTRICT shall provide FARBER with a private office, stenographic help, office equipment, supplies, and other facilities and services, suitable to FARBER'S position and adequate for the performance of her duties. c. DISTRICT shall save, indemnify and hold harmless FARBER for all losses sustained by FARBER in direct consequence of the discharge of her duties on DISTRICT's behalf, including but not limited to the payment of all costs and reasonable attorneys fees. 7. Compensation. a. As compensation for the services to be performed hereunder, FARBER shall receive a salary at the rate of $593,000 (FIVE HUNDRED NINETY THREE THOUSAND DOLLARS) per annum, payable in twenty-six (26) equal bi-weekly installments of $22, (TWENTY TWO THOUSAND EIGHT HUNDRED SEVEN DOLLARS AND 69/1 00 DOLLARS) each, in accordance with DISTRICT pay practices for exempt employees, subject to upward adjustment as herein provided. b. FARBER shall receive such annual increases in salary as may be determined by DISTRICT's Board of Directors in its sole discretion (at its October meeting). Page 2 of9
7 c. Within thirty (30) days after October 15 th of each year, FARBER shall meet with DISTRlCT's Board of Directors for the purpose of establishing overall performance goals. Annually, DISTRlCT shall compare FARBER'S performance against the overall perfonnance goals. Depending on FARBER'S performance as judged by DISTRlCT, FARBER shall be eligible to receive incentive compensation. Any incentive compensation awarded will be paid before the end ofthe calendar year. 8. Disability. a. If, during the term of this agreement, FARBER for any reason whatsoever is unable to perform the duties prescribed herein for a minimum of thirty (30) consecutive days due to a DISABILITY (as defined below), DISTRlCT agrees to pay FARBER a monthly amount equal to one-twelfth (1/12) of fifty percent (50%) of the then current annual base compensation commencing on the thirtyfirst (31 5t) day of the DISABILITY [DISABILITY BENEFITS]. b. The payment of DISABILITY BENEFITS shall continue, and shall survive the termination of this agreement. They shall be paid until the earliest of the following: 1. The date that FARBER is no longer permanently disabled. ii. The date that FARBER reaches age 65. iii. The date of FARBER'S death. c. For purposes of this AGREEMENT, the term "DISABILITY" shall mean FARBER is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. Nothing in this AGREEMENT shall affect FARBER's rights under any disability plan in which FARBER is a participant. 9. Benefits. FARBER shall be entitled to any employee benefits established for other hospital employees. Additionally, she is entitled to the following benefits: a. FARBER shall continue to be eligible to receive and participate in the executive supplemental retirement program. b. FARBER shall be entitled to five (5) weeks vacation time each year without loss of compensation. FARBER may be absent from her employment for vacation only at such times DISTRlCT's Board of Directors shall determine from time to time. In the event that FARBER is unable for any reasons to take the total amount of vacation time authorized herein during any year, she may accrue that time and add it to vacation time for any following year or may elect to receive a cash payment therefor. Page 3 of9
8 c. DISTRICT shall provide FARBER with a suitable and mutually agreeable vehicle with optional equipment of FARBER'S selection at the District's sole expense and at no net cost to FARBER. i. DISTRICT shall purchase a new vehicle for FARBER III accordance herewith when the FARBER vehicle is three years old. ii. iii. iv. FARBER shall have the right to directly purchase the vehicle provided hereunder and have such costs reimbursed by the DISTRICT in such a manner that FARBER is maintained whole for Federal and State income tax purposes. Ownership interest in said vehicle will reside with FARBER. DISTRICT shall pay for the purchase, financing, maintenance and related expenses, including taxes, license and all other related costs and expenses with respect to FARBER'S vehicle. DISTRICT shall procure and maintain an automobile liability insurance policy on the automobile, with coverage including FARBER, her spouse, and those of her children who qualify as FARBER'S dependents under Section 152 of the Internal Revenue Code, in the minimum amounts of $2,000,000 for bodily injury or death to anyone person in anyone accident, and $100, for property damage in anyone accident. d. DISTRICT agrees, for the remainder of FARBER'S life, to include FARBER, her spouse, and her eligible children in the coverage of its medical, major medical, hospital, dental and eye care insurance and pay the premiums thereof. Such coverage shall be primary for FARBER. Such coverage shall continue after expiration or termination of this agreement for any reason. e. It is the desire of DISTRICT that FARBER become involved in charitable, academic, civic, social and professional organizations and activities in order to promote and enhance the relations of WASHINGTON HOSPITAL with the Medical Staff and the community it serves. In addition, the DISTRICT desires that FARBER be hereby authorized to make appropriate donations or contributions in the best interests of the DISTRICT. Accordingly, expenses incurred for these activities together with other reasonable business expenses incurred by FARBER will be paid by DISTRICT upon submission of an appropriate written request for reimbursement for the same. 10. Termination of the AGREEMENT for CAUSE: a. BY DISTRICT: I. DISTRICT reserves the right to terminate this AGREEMENT if FARBER Page 4 of9
9 b. BY FARBER: willfully and materially breaches or habitually and materially neglects the duties which she is required to perform under the terms of this AGREHv1ENT or commits such acts of material dishonesty, fraud, misrepresentation or other acts of moral turpitude as would prevent the effective performance of her duties. DISTRICT may terminate this AGREHv1ENT for CAUSE by giving thirty (30) days' prior written notice of termination to FARBER, without prejudice, to any other remedy to which DISTRICT may be entitled either at law, in equity, or under this AGREEMENT. The notice of termination required by this Section 10.a.i. shall specify the grounds for the termination and shall be supported by a statement of relevant facts. 1. FARBER reserves the right to terminate this AGREEMENT in the event there is: (i) a significant and material negative change in the employment relationship based upon the conduct of directors of the DISTRICT which conduct would be considered actionable in either a criminal, administrative or civil forum; (ii) any material breach by DISTRICT of this AGREEMENT; (iii) a significant and material negative change in FARBER's authority, duties or responsibilities as the Chief Executive Officer and Administrator of the DISTRICT or any other action by DISTRICT that results in substantial diminution in FARBER's authority, duties or responsibilities (including, without limitation, having any other executive employee of the DISTRICT report directly to DISTRICT's Board of Directors rather than FARBER); (iv) a requirement that FARBER relocate her place of employment more than thirty miles; (v) a significant and material reduction in compensation or (vi) the cessation of the DISTRICT operating as a health care district. FARBER may terminate this AGREE:tv1ENT on any of these grounds by giving at least thirty (30) days' prior written notice of termination to DISTRICT, without prejudice to any other remedy to which FARBER may be entitled either at law, in equity, or under this AGREE:tv1ENT. The notice of termination required by this Section 10.b.i. shall specify the grounds for the termination, shall be supported by a statement of relevant facts, and shall be provided to DISTRICT within ninety (90) days of the initial existence of such grounds. Upon receipt of such notice from FARBER, DISTRICT shall have the right to remedy the grounds during the notice period. If DISTRICT fails to remedy the grounds during the notice period, then this AGREEMENT shall terminate at the end of the notice period, and FARBER shall be entitled to the SEVERANCE BENEFIT defined in this AGREEMENT. ii. During the term of this AGREEMENT, FARBER reserves the right to terminate this AGREEMENT in the event that the remaining term of this AGREEMENT, together with any extensions hereto by written agreement Page 5 of9
10 of the parties, drops to 18-months or less. FARBER shall thereafter be entitled to the SEVERANCE BENEFIT defined in this AGREEMENT. 11. Termination of the AGREEMENT WITHOUT CAUSE. a. This AGREEMENT shall be terminated upon the death of FARBER. Any sums that may be due her by operation of this AGREEMENT as of the date of death shall be paid to FARBER'S executors, trustees, administrators, heirs, personal representatives, successors and assigns. b. DISTRICT reserves the right to terminate this AGREEMENT within six (6) months [but no sooner than three (3) months] after FARBER suffers any physical or mental disability that would prevent the performance of her duties under this AGREEMENT. Such a termination shall be effected by giving thirty (30) days' written notice of termination to FARBER. Termination pursuant to this provision shall not prejudice FARBER'S rights to continuing DISABILITY BENEFITS as defined in this AGREEMENT. Further, termination pursuant to this provision shall entitle FARBER to the SEVERANCE BENEFIT as defined herein. c. DISTRICT reserves the right to terminate this AGREEMENT based upon its good faith assessment of the performance of FARBER. DISTRICT's determination regarding her performance shall be factually based, made reasonably, and in good faith. On 60-days advance written notice, DISTRICT may terminate this AGREEMENT on this basis. FARBER shall be entitled to the SEVERANCE BENEFIT defined in this agreement if so terminated. d. On 180-days advance written notice to the DISTRICT, FARBER may terminate her obligations under this AGREEMENT without cause. If, as a result of a transition to a new CEO or otherwise, FARBER is asked to leave before the passage of the 180-day period, she shall nevertheless receive all existing compensation and benefits through the end of the 180-day period. 12. SEVERANCE BENEFIT. The SEVERANCE BENEFIT payable to FARBER pursuant to the terms and conditions ofthis agreement shall be all ofthe following: a. For a period that is the lesser of (i) eighteen (18) months, or (ii) the number of months remaining in the term of this AGREEMENT [as measured from the date oftermination]: Continuation and payment by the DISTRICT for FARBER, her spouse, and her eligible children in the coverage of its medical, major medical, hospital, dental and eye care insurance. This Section shall not diminish any rights FARBER may have under COBRA or other similar rights afforded by the existing FARBER benefit programs ofdistrict. b. Payment by the DISTRICT of an amount equal to FARBER'S then-current monthly salary (without incentive compensation) multiplied by the lesser of (i) eighteen (18) months, or (ii) the number of months remaining in the term of this Page 6 of9
11 AGREEMENT [as measured from the date of termination], with standard applicable withholding and deduction calculations. c. To the extent permitted by law on the date of termination: I. The DISTRICT will allow FARBER to continue to defer compensation into any and all deferred compensation plans to the extent such continued deferral does not violate the terms of such plans or result in adverse tax consequences to FARBER under Section 409A of the Internal Revenue Code of 1986 (as from time to time amended) and any regulations and guidance promulgated thereunder [SECTION 409A] or any other applicable tax law. ii. Ill. iv. The DISTRICT will retire any remaining debt or other obligation related to the employer provided auto as specified herein. Any and all equipment reasonably in the possession of FARBER [relating to her employment with DISTRICT] shall be transferred to FARBER. The DISTRICT will pay for the cost of no more than twelve (12) months of executive outplacement services from such provider which may be mutually acceptable to the parties hereto. d. The following terms shall govern the payment of the SEVERANCE BENEFIT by DISTRICT pursuant to Section 10 (Termination for Cause) and Section 11 (Termination Without Cause): 1. The payment of the SEVERANCE Bm refit shall be paid fourteen (14) days following the date oftermination. ii. iii. It is the intent of the parties that a termination by DISTRICT without CAUSE or a termination by FARBER for cause shall constitute an involuntary separation of service under SECTION 409A and that the payment of the SEVERANCE BENEFIT shall, to the extent possible, qualify for the short term deferral exception, the separation pay plan exception or other applicable exception to SECTION 409A, and any ambiguities herein will be interpreted to so comply. Each installment payment of the SEVERANCE BENEFIT shall be deemed a separate payment under this AGREEMENT. To the extent the payment of the SEVERANCE BENEFIT is covered by SECTION 409A, the SEVERANCE BE1\TEFIT shall be paid or provided to FARBER only if and as of the date FARBER experiences a "separation from service" as defined in the applicable regulations promulgated under SECTION 409A. Page 7 of9
12 13. Notices. Any notices to be given hereunder by either party to the other shall be, in writing, and may be transmitted by personal delivery or by mail registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses contained in this paragraph. Each party may change that address by written notice in accordance with this Section. Notices delivered personally shall be deemed communicated as of the date of actual receipt; mailed notices shall be deemed communicated as offive (5) days after the mailing date. DISTRICT FARBER President, Board of Directors Nancy Farber Washington Township Health Care District P.O. Box Mowry Avenue Foothill Road Fremont, CA Sunol, CA Attorneys Fees and Costs. If any action at law, or in equity, or any arbitration proceeding is necessary to enforce or interpret the terms of this AGREEMENT, the prevailing party shall be entitled to reasonable attorneys' fees, costs, and necessary disbursements in addition to any other relief to which that party may be entitled. This provision shall be construed as applicable to the entire AGREEMENT. 15. Entire Agreement. This AGREEMENT supersedes any and all other agreements, either oral or in writing, betv,reen the parties hereto with respect to the employment of FARBER by DISTRICT and contains all of the covenants and agreements between the parties with respect to that employment in any manner whatsoever. Each party to this AGREEMENT acknowledges that no representation, inducements, promises, or agreement, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other AGREEMENT, statement, or promise not contained in this AGREE11ENT shall be valid or binding on either party. 16. Modifications. Any modification of this AGREEMENT will be effective only if it is in writing and signed by the party to be charged. 17. Effect of Waiver. The failure of either party to insist on strict compliance with any of the terms, covenants, or conditions of this AGREEMENT by the other party shall not be deemed a waiver of that term, covenant, or condition, nor shall any waiver or relinquishment of any right or power at anyone time or times be deemed a waiver or relinquishment ofthat right or power for all or any other times. 18. Partial Invalidity. If any provision in this AGREEMENT is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way. Page 8 of9
13 19. Law Governing the AGREEMENT. This AGREEMENT shall be governed by and construed in accordance with the laws of the State of California. WASHINGTON TOWNSHIP HEALTH CARE DISTRICT NANCY FARBER BY:~ PRESIDENT I Page 9 of9
14 EXIDBIT "A" Paragraph 2 The authority and duties ofthe Chief Executive Officer shall include: a. To perfect and submit to the Board for approval a plan or organization of the personnel and others concerned with the operation of the District and to establish methods of procedure concerning the internal operation of the District. b. To prepare an annual budget showing the expected receipts and expenditures, as required by the Board of Directors. c. To select, employ, control, and discharge all employees serving in positions, as authorized by the Board of Directors. d. To see that all physical properties are kept in good state of repair and operating condition. e. To supervise all business affairs, such as the records of financial transactions, collection of accounts, and purchase and issuance of supplies; and to ensure that all funds are collected and expended to the best possible advantage. f. To exercise hislher professional abilities in such a manner that all those concerned with the rendering of professional service in the Washington Township Health Care District cooperate to the end that the best possible care may be rendered to all. g. To submit regularly to the Board or its authorized committees, periodic reports showing the professional service and financial activities ofthe District and to prepare and submit such reports as may be required by the Board of Directors and/or its functioning committees. h. To attend all meetings of the Board of Directors and its committees. I. To perform any other duty that may be necessary in the best interest ofthe District. j. To serve as the liaison officer and channel of communication for all official communications between the Board ofdirectors or any of its committees, and the Medical Staff. k. To provide overall administrative direction to the District's adjunct organizations. Page 10 of9
15 ExmBIT "B" Paragraph 3b. DEVOTION OF TIME/COMPETITION The participation in activities, pursuits and duties of the Chief Executive Officer hereinunder shall include: Board of Directors, Dana-Farber Cancer Institute BETA AlIianceIHealthPro Rotary Club (Niles Fremont) Cooperative Hospitals, Inc. UCLA School of Public Health Alumni Association Page 11 of9
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