10
Doc. 665346
EMPLOYMENT AGREEMENT
BETWEEN
HOMECARE DIMENSIONS, INC.
AND
XXXXXX X. XXXXXX, III, M.D.
THIS AGREEMENT made and entered into as of the 9th day of
May 2002 by and between Homecare Dimensions, Inc., a Texas
corporation (the "Corporation"), a wholly owned subsidiary of The
Phoenix Group Corporation (the "Parent Company"), and Xxxxxx X.
Xxxxxx, III, M.D., a resident of Texas (hereinafter referred to
as "Executive").
WHEREAS, the parties, for and in consideration of the mutual
and reciprocal covenants and agreements hereinafter contained,
and intending to be legally bound hereby, do contract and agree
as follows:
1. Purpose and Employment. The Corporation's primary
business (the "Corporation's Business") is owning, leasing,
operating and managing (i) home health companies and agencies,
(ii) specialty outpatient medical facilities (including, but not
limited to, comprehensive outpatient rehabilitation facilities)
and (iii) companies that provide various ancillary healthcare
services (including, but not limited to, pharmacy, durable
medical supplies and equipment, wound care, rehabilitation
therapies, IV therapies, respiratory therapies, and portable X-
ray). The purpose of this Agreement is to define the relationship
between the Corporation and Executive. The Corporation hereby
employs Executive, and Executive hereby accepts employment by the
Corporation, all upon the terms and conditions hereinafter set
forth.
2. Position and Scope of Duties.
(a) Executive shall serve the Corporation as its Medical
Director. At all times, Executive shall report to,
discharge his duties in consultation with and be under
the direct supervision and control of the Corporation's
board of directors ("Board") and shall cooperate and
consult with the Parent Company's President. Executive
shall perform his duties, consistent with the
Executive's employment as a senior corporate executive
of the Corporation, shall hold such other titles with
respect to the Corporation, or any of its divisions,
subsidiaries, or affiliates, as the Board may from time
to time determine, and shall comply with all applicable
provisions of the Corporation's certificate of
incorporation and bylaws. Executive shall, subject to
the direction of the Board and consultation with the
Parent Company's President, have authority to formulate
policies for and oversee all aspects of the Corporation
and its divisions, subsidiaries, and affiliates. As to
employees under his jurisdiction, including those
working directly under his supervision, Executive shall
use his best efforts (i) to employ and retain only
employees who are capable and willing to perform
according to applicable legal requirements and
applicable policies of the Corporation, and also (ii)
to assure that such personnel are properly trained and
supervised. Subject to the direction of the Board and
consultation with the Parent Company's President,
Executive may hire and terminate the employment of any
other employee of the Corporation, or of any of their
divisions or subsidiaries that are under his
operational control as determined by the Board.
(b) Executive shall devote his primary business time and
attention solely to the business and affairs of the
Corporation, excluding any periods of vacation, sick
leave, and disability to which Executive is entitled;
and he shall fulfill his duties to the Corporation to
the best of his ability and in the best interests of
the Corporation. However, it shall not be a violation
of this Agreement for the Executive to (i) serve on
corporate, civic, or charitable boards or committees,
(ii) deliver lectures, fulfill speaking engagements, or
teach at educational institutions, and (iii) manage his
personal finances and passive investments, so long as
none of such activities (singularly or collectively)
significantly interfere with the performance of the
Executive's responsibilities as an employee of the
Corporation in accordance with this Agreement or
compete with the business of the Corporation.
(c) A description of the specific duties and
responsibilities of the Executive is contained in
Exhibit A attached to this Agreement.
3. Term. The term of this Agreement shall be for a period
of three (3) years commencing May 9, 2002 (the "Term") unless
terminated earlier by mutual agreement of the parties or by
either party in accordance with Section 8 of this Agreement.
Upon completion of the original three-year Term, the Agreement
shall automatically be renewed for a period of one (1) year as of
each succeeding year (beginning May 9, 2005); provided, that the
Corporation may terminate the Agreement as of any such renewal
date by providing ninety (90) days advance written notice to the
Executive.
4. Compensation During Employment. For all the services
to be rendered by Executive hereunder, the Corporation shall pay
to Executive a base salary, bonuses, and incentive compensation
as follows:
(a) Base Salary. Executive shall be paid an annual base
salary of Ten Thousand dollars ($10,000.00).
Executive's salary shall be reduced by state and
federal income taxes, social security taxes, and other
similar payroll deductions as required by law or as may
be authorized by the Corporation. The Board may
increase the Executive 's annual base salary effective
as of any anniversary date of this Agreement in such
amounts as the Board deems appropriate.
(b) Executive's Incentive Compensation. Executive may be
entitled to such bonuses and incentive compensation as
may be determined by the Board in its sole discretion.
Each such bonus or incentive compensation may be paid
in cash or Shares or combination thereof as the Board
shall determine in its sole discretion. Such incentive
compensation may also include options to purchase
shares of the Parent Company's Common Stock pursuant to
a plan established by the Parent Company's Board of
Directors.
(c) Stock Grant. The Company hereby agrees to issue or
cause to be issued to Executive on the date hereof (the
"Effective Date") common stock (the "Grant") to
purchase a total number of shares equal to 11,000,000
shares of the common shares of the Parent Company.
5. Other Benefits. In addition to other benefits
conferred under this Agreement, Executive shall have the right to
participate in (on the same terms and conditions as available to
other senior executives of the Corporation) all pension plans,
retirement plans, deferred compensation plans, executive
compensation plans, major medical, group health, disability,
accidental death and group term life insurance plans, "fringe"
benefit plans (including permissible sick days or leave days),
and other employee benefit plans that the Corporation shall, from
time to time, generally confer upon other executives of the
Corporation.
6. Vacation, Holidays, etc. Executive shall be entitled
to four (4) weeks vacation with pay (or such greater length of
time as may be approved from time to time by the Board) during
each fiscal year of the Corporation, such vacation to be taken by
Executive at such times as shall be consistent with the business
requirements of the Corporation. In addition, Executive shall
also be entitled to such holidays as are customary in the
Corporation. Unused holidays and days of vacation may not be
carried over from one fiscal year to another, and additional
income will not be given for vacation time or holidays not taken.
7. Expenses. Executive is expected from time to time, to
incur reasonable expenses as he reasonably deems to be for the
Corporation's benefit and for promoting the business of the
Corporation, including expenses for entertainment, travel, and
similar items. Executive shall be promptly reimbursed for all
such reasonable expenses (in accordance with the policies and
procedures regarding employee business-related expense from time
to time established by the Corporation for its senior executive
officers) upon his presenting to the Corporation a detailed
itemized expense voucher therefor in accordance with applicable
corporate policies.
8. Termination of Employment.
(a) Termination for Cause. Notwithstanding the provisions
of Section 3 hereof, the Corporation shall have the
right to terminate this Agreement immediately upon
giving written notice to the Executive (or Executive's
personal or legal representatives, if appropriate), for
any of the following reasons:
(1) Death of the Executive;
(2) Inability of the Executive, by reason of physical
or mental disability ("Disability"), to continue
to perform his duties hereunder for the remainder
of the term of this Agreement;
(3) Just Cause, which is defined herein to mean: (a)
Executive's conduct that amounts to fraud, gross dishonesty,
gross negligence in performing his duties hereunder; (b)
Executive's willful failure or refusal to perform his duties
faithfully and diligently hereunder; (c) Executive's failure or
refusal to comply with the policies, standards, and regulations
of the Corporation from time to time established; or (d)
Executive's intentional wrongful act or wrongful failure to act
that materially and adversely affects the business affairs of the
Corporation; or (e) breach by the Executive of the obligation to
refrain from engaging in the activities prohibited by the
Covenant Not to Compete in Section 9 of this Agreement; or (f)
repeated instances of drug or alcohol abuse or unauthorized
absences during scheduled work hours; or (g) Executive's
commission of any act of fraud, commission of any felony,
material breach of any provision of this Agreement, involvement
in any material conflict of interest or self dealing transaction
in violation of the applicable corporate laws of the State of
Texas, or other breach of any of his quasi-fiduciary duties to
the Corporation in violation of the applicable corporate laws of
the State of Texas (including, but not limited to, the duties of
due care, loyalty, disclosure and fair dealing).
(b) Termination Benefits. If this Agreement expires, or if
during the Term the Corporation terminates this
Agreement and Executive's employment hereunder as a
result of any of the following, Executive will be
entitled to the following termination compensation or
severance benefits:
(1) Death. If during the Term, Executive's employment
is terminated by reason of death, the Corporation
shall thereafter have no liability to Executive's
estate hereunder, except to timely pay and provide
his estate the following: (i) the portion, if
any, of Executive's Base Salary for the period up
to the date of death that remains unpaid in such
calendar year of employment; (ii) any bonuses and
incentive compensation for any preceding year or
for the current year that have been earned (pro-
rated to the date of death), but have not been
paid as of the date of death; (iii) any vested
Stock Options; and (iv) all other payments and
benefits that Executive is eligible to receive,
but have not yet been received as of the date of
death, under all benefit plans, retirement plans,
and other arrangements that, by their terms,
apply.
(2) Disability. If during the Term, Executive's
employment is terminated due to Executive's
Disability as defined in paragraph 8(a)(2) above,
the Corporation shall, after such effective date
of termination, have no liability to Executive
hereunder, except to timely pay and provide the
Executive the following: (i) the portion, if any,
of Executive's Base Salary for the period up to
the effective date of termination that remains
unpaid; (ii) any bonuses and incentive
compensation for any preceding year or for the
current year (pro-rated to the effective date of
termination) that have been earned, but have not
been paid as of the effective date of termination;
(iii) any vested Stock Options; and (iv) all other
payments and benefits that Executive is eligible
to receive, but have not yet been received as of
the effective date of termination, under all
benefit plans, retirement plans, and other
arrangements that, by their terms, apply.
(3) Just Cause. If during the Term, Executive's
employment is terminated for Just Cause as
specified in Section 8(a)(3) above, the
Corporation shall, after such effective date of
expiration or termination, have no liability to
Executive hereunder, except to timely pay and
provide the Executive the following: (i) any
bonuses and incentive compensation for any
preceding year earned but not paid, without
obligation to pay any sums for bonus or incentive
compensation not earned prior to termination or
expiration; and (ii) all other payments and
benefits that Executive is eligible to receive,
but have not yet been received as of the effective
date of termination, under all benefit plans,
retirement plans, and other arrangements that, by
their terms, apply, except as provided in Section
4(c). To the extent that any insurance coverages
maintained by the Corporation for the benefit of
Executive have conversion privileges into
individual policies, the Executive, upon his
termination of employment or within any applicable
grace periods thereafter, may (at his sole cost)
so convert such coverages, as well as exercise (at
his sole cost) all rights of continuation
prescribed by applicable law. Executive will
forfeit any unexercised or unvested options upon
termination for "Just Cause."
(4) Without Cause. If during the Term, Executive's
employment is terminated without the Executive's
written consent and without Just Cause for any
reason whatsoever other than disability or death,
the Corporation shall, after such effective date
or expiration or termination, have no liability to
Executive hereunder, except to timely pay and
provide the Executive the following: (i) the same
Base Salary, bonuses and incentive compensation,
benefits, and other compensation that the
Executive would otherwise be entitled to receive
hereunder through the remaining unexpired Term
hereof as though no termination or expiration had
occurred; (ii) any bonuses and incentive
compensation for any preceding year or for the
current year that have been earned, but have not
been paid as of the effective date of termination;
(iii) any vested Stock Options; (iv) all other
payment and benefits that Executive is eligible to
receive, but have not yet been received as of the
effective date of termination, except as provided
in Section 4(c). To the extent that any insurance
coverages maintained by the Corporation for the
benefit of Executive have conversion privileges
into individual policies, the Executive, upon his
termination of employment or within any applicable
grace periods thereafter, may (at his sole cost)
so convert such coverages, as well as exercise (at
his sole cost) all rights of continuation
prescribed by applicable law.
(5) Termination by Executive. In the event that
Executive terminates this Agreement for any
reason, the Corporation shall, after such
effective date of termination, have no liability
to Executive hereunder, except as specified in
Section 8(b)(3) hereof, as if the Corporation had
terminated the Executive for Cause. Executive will
receive only vested Stock Options.
9. Restrictive Covenants of Executive.
(a) Definitions. For the purposes of this Agreement:
(1) "Confidential Information" shall mean any
information relating to the Corporation or to the
business of the Corporation (or to any of its
parents, subsidiaries or affiliates) (whether
proprietary or otherwise) not generally known to
the public or known by Executive otherwise than as
a consequence of or through his employment with
the Corporation and treated by the Corporation as
being confidential, including, but not limited to,
research, marketing, customer lists, databases,
financing sources, methods, know-how, inventions,
ideas, techniques and systems, all of which shall
be deemed by the Corporation and Executive as
being Confidential Information.
(2) "Person" shall mean an individual, a partnership,
an association, a corporation, a trust, an
unincorporated organization, or any other business
entity or enterprise, provided, however, that the
term "Person" shall not include the Corporation.
(3) "Restricted Territory" shall mean any geographic
area within [100] miles where the Corporation or
Parent Company have business operations.
(b) Acknowledgements. Executive agrees and acknowledges
that: (i) he will be in a position of confidence and
trust with the Corporation and he will have access to
Confidential Information; (ii) the nature and periods
of restrictions imposed by the covenants set forth in
this Section are fair, reasonable and necessary to
protect and preserve for the Corporation the benefits
of this Agreement and that such restrictions will not
prevent Executive from earning a livelihood and will
not cause an undue hardship upon him; (iii) the
Corporation would sustain irreparable loss and damage
if Executive were to breach any of such covenants; (iv)
Executive acknowledges that payment under this
Agreement is adequate compensation for Executive's
agreement to be bound to the requirements of this
Section 9 and (v) the covenants herein set forth are
made as an inducement to and have been relied upon by
the Corporation in entering this Agreement.
(c) Confidential Information. Executive hereby covenants
and agrees that Executive shall not, directly or
indirectly, during the Term of this Agreement or at any
time following termination of Executive's employment
for whatever reason, disclose to any Person or use or
otherwise exploit for Executive's own benefit or for
the benefit of any other Person any Confidential
Information that was disclosed to Executive or acquired
by Executive while an employee of the Corporation.
Upon the termination or expiration of this Agreement,
Executive shall return to the Corporation all original
or copied materials in Executive's possession or
control, which is of a confidential matter relating to
the Corporation's business. These provision shall
survive the termination or expiration of this
Agreement. Executive agrees that he will not, without
the express written consent of the Board of Directors,
take with him upon the termination of this Agreement,
any document or paper, or any photocopy or reproduction
or duplication thereof, relating to any Confidential
Information.
(d) Non-Competition.
(1) Executive acknowledges that he has received and/or
will receive specialized knowledge and
confidential and proprietary information from
Corporation during the term of this Agreement, and
that such knowledge and information would provide
an unfair advantage if used to compete with
Corporation. In order to avoid such unfair
advantage, Executive hereby agrees that during the
Term and for one (1) year following the
termination of the Executive's employment by the
Corporation, however occurring, he will not,
directly or indirectly, expressly or tacitly, for
himself or on behalf of any Person in the
Restricted Territory, (i) act as a director,
officer, manager, investor, lender, shareholder,
partner, member, advisor, executive or consultant
to any business or other endeavor that provides
services or products which are directly
competitive with the services or products being
provided by or which are being produced or
developed by the Corporation, or are under
investigation by the Corporation at the expiration
of the Term and with which Executive had contact
as an employee of the Corporation, or (ii) recruit
investors on behalf of an entity which engages in
activities that are directly competitive with the
services or products being provided or that are
being produced or developed by the Corporation, or
are under investigation by the Corporation at the
expiration of the Term and with which Executive
had contact as an employee of the Corporation.
(2) Executive hereby agrees that during the Term and
for one (1) year following the termination of the
Executive's employment by the Corporation, however
occurring, he will not, directly or indirectly,
expressly or tacitly, for himself or on behalf of
any Person, solicit, suggest or direct others to
solicit for hire any person employed by the
Corporation or the Parent Company at the time of
termination of the Executive's employment by the
Corporation.
(3) Executive hereby agrees that during the Term and
for one (1) year following the termination of the
Executive's employment by the Corporation, however
occurring, he will not, directly or indirectly,
expressly or tacitly, for himself or on behalf of
any Person, solicit, divert or attempt to
appropriate, to any Person which competes with the
Corporation, any Person who is or was a customer
of the Corporation or an actively sought
prospective customer of the Corporation with which
he had contact as an employee of the Corporation
during the Term.
(e) Consent to Court-Ordered Remedy. Executive
acknowledges that his breach of any covenant set forth
in this Section 9 will result in irreparable injury to
the Corporation and that the Corporation's remedies at
law for such a breach are inadequate and extremely
difficult to calculate or determine. Accordingly,
Executive agrees and consents that upon such a breach
or threatened breach by Executive of any covenant set
forth herein, the Corporation shall be entitled to such
remedies in law or equity as may be determined by the
court for such a breach or threatened breach.
(f) Remedies Cumulative and Concurrent. The rights and
remedies of the Corporation, as provided in this
Section 9 shall be cumulative and concurrent and may be
pursued separately, successively or together against
Executive at the sole discretion of the Corporation,
and may be exercised as often as occasion therefor
shall arise. The failure to exercise any right or
remedy shall in no event be construed as a waiver or
release thereof.
10. Indemnity. To the fullest extent permitted by law, the
Corporation shall indemnify Executive and hold him harmless for
any acts or decisions made by him in good faith while performing
services for the Corporation. In addition, to the fullest extent
permitted by law, the Corporation shall pay all expenses,
including attorneys' fees, actually and necessarily incurred by
Executive in connection with the defense of any action, suit or
proceeding challenging such acts or decisions and in connection
with any appeal thereon including the costs of settlement. This
indemnification obligation shall survive the termination of the
Executive's employment hereunder.
11. Waiver of Breach or Violation Not Deemed Continuing.
The waiver by either party of a breach or violation of any
provision of this Agreement shall not operate as or be construed
to be a waiver of any subsequent breach hereof.
12. Notices. Any and all notices required or permitted to
be given under this Agreement will be sufficient if furnished in
writing, personally delivered or sent by certified mail, return
receipt requested as follows:
To Executive:
Xxxxxx X. Xxxxxx, III, M.D.
0000 XX Xxxx 000
Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
(000) 000-0000
To the Corporation:
The Phoenix Group Corporation
Attn: Xxx Xxxx
000 X. Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
(000)000-0000
13. Securities Law Compliance. The Executive represents
and agrees that he is acquiring any securities he receives under
this Agreement or during his employment for his own account and
not with the intention reselling or distributing the securities,
except as permitted under this Agreement and any applicable
federal and state securities laws. The Corporation shall have
the right to take any actions it may deem necessary or
appropriate to ensure that the Shares granted to the Executive
complies with applicable federal and state securities laws.
14. Tax Liability. The Corporation may withhold from any
payment made pursuant to this Agreement any federal, state or
local taxes required to be withheld from such payment. The
Executive shall make such arrangements as may be required or be
satisfactory to the Corporation (in its sole discretion) for the
payment of any tax withholding obligations that arise in
connection with the granting of Shares under this Agreement. The
Corporation shall not be required to issue any Shares under this
Agreement until such obligations are satisfied.
15. Governing Law. This Agreement shall be interpreted,
construed and governed according to the laws of the State of
Texas. The parties hereto consent to jurisdiction and venue in
the Texas state courts in Dallas, Texas and United States
District Court for the Northern District of Texas, Dallas
Division.
16. Paragraph Headings. The paragraph headings contained
in this Agreement are for convenience only and shall in no manner
be construed as a part of this Agreement.
17. Entire Agreement. This Agreement supersedes all prior
discussions and agreements between the Corporation, or any of its
officers, directors, employees, or agents, and Executive with
respect to all xxxxxx relating to the employment by the
Corporation of Executive and all other matters contained herein,
and this Agreement constitutes the sole and entire agreement with
respect thereto. Any representation, inducement, promise or
agreement, whether oral or written, between the Corporation, or
any of its officers, directors, employees, or agents, and
Executive which is not embodied herein shall be of no force or
effect.
18. No Oral Modification, Cancellation or Discharge. This
Agreement may only be amended, canceled or discharged in writing
signed by Executive and the Corporation.
19. Successors and Assignors. This Agreement shall be
binding upon, and shall inure to the benefit of, the Corporation
and Executive and to (1) the Executive's heirs, executors,
administrators, personal and other legal representatives and (2)
the Corporation and its successors, and assigns.
20. Severability. If any term, covenant or condition of
this Agreement or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable
the remainder of this Agreement or the application of such terms,
covenants and conditions to persons or circumstances other than
those as to which it is held invalid or unenforceable shall be
affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent
permitted by law.
21. Acknowledgment. Executive acknowledges that he has had
the opportunity to discuss this matter with and obtain advice
from his private attorney, has had sufficient time to, and has
carefully read and fully understands all the provisions of this
Agreement, and is knowingly and voluntarily entering into this
Agreement.
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IN WITNESS WHEREOF, the Corporation has hereunder caused
this Agreement to be executed by its duly authorized officer and
seal to be hereunto affixed, and Executive has hereunto set his
hand, all being done in duplicate originals delivered to each
party as of the day and year first above written.
Witness Xxxxxx X. Xxxxxx, III, M.D.
ATTEST: The Phoenix Group Corporation
By:
Xxx Xxxx, Chairman,
President & CEO
EXHIBIT A
DESCRIPTION OF SPECIFIC DUTIES AND RESPONSIBILITIES
Executive shall be employed by the Corporation as the
Medical Director of The Phoenix Group Corporation (the
"Corporation"). At all times, the Executive shall report to,
discharge his duties in consultation with and under the direct
supervision and control of the Corporation's Board of Directors
("Board") and cooperate and consult with Company's President.
Executive shall perform such duties, consistent with the
Executive's employment as a senior employee, shall hold other
titles with respect to the Corporation, or any of its divisions,
subsidiaries or affiliates, as the Board may from time to time
determine, and shall comply with all applicable provisions of the
Corporation's certificate of incorporation and bylaws.
As to employees under Executive's jurisdiction, including
those working directly under his supervision, Executive shall use
his best efforts to (i) employ and retain only employees who are
capable and willing to perform according to applicable legal
requirements and applicable policies of the Corporation, and (ii)
assure that such personnel are properly trained and supervised.
Subject to the direction of the Board, Executive may hire and
terminate the employment of any other employee of the
Corporation, or any of its divisions or subsidiaries that are
under his operational control as determined by the Board.
