EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into and
effective this 1st day of January, 2004, by and between First Deltavision, Inc.,
a Nevada corporation (the "Company") and Xxxxx X. Xxxxx ("Employee").
R E C I T A L S
A. The Company is engaged in the business of providing various
healthcare services to its client base, including through the direct ownership
and operation of Hospitals as well as through wholly owned subsidiaries which
provide various types of healthcare related services (the "Business").
B. The Company wishes to employ Employee, and Employee agrees to serve,
as Chief Financial Officer of the Company subject to the terms and conditions
set forth below.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed as follows:
1. Recitals. The recitals set forth above shall constitute and shall be deemed
to be an integral part of this Agreement.
2. Duties. Employee shall serve as the Executive Vice President and Chief
Financial Officer of the Company. Employee's principal duties and
responsibilities shall be to timely make the critical decisions necessary to run
the financial activities of the Company on a day-to-day basis and to, along with
the President and Chief Executive Officer, set objectives and strategies and
execute on those strategies and to take all actions necessary to protect and
grow the Company's assets and to take direction regarding these matters as may
from time to time be provided by the Company's Board of Directors. Except during
vacation periods or in accordance with the Company's personnel policies covering
executive leaves and reasonable periods of illness or other incapacitation,
Employee shall devote his services to the Company's Business and interests in a
manner consistent with Employee's title and office and the Company's needs for
his services. Employee agrees to perform his duties pursuant to this Agreement
in good faith and in a manner which he honestly believes to be in the best
interests of the Company, and with such care, including reasonable inquiry, as
an ordinary prudent person in a like position would use under similar
circumstances. Employee shall at all times be subject to and shall observe and
carry out such reasonable rules, regulations, policies, directions and
restrictions as may be established from time to time by the Company.
3. Limitations on Other Employment. Throughout the Term (as defined below) of
Employee's employment under this Agreement, Employee shall not enter into the
services of or be employed in any capacity or for any purposes whatsoever,
whether directly or indirectly, by any person, firm, corporation or entity other
than the Company, and will not, during said period of time, be engaged in any
business, enterprise or undertaking other than employment by the Company except
for such other activities that do not detract from the full discharge of
Employee's duties hereunder.
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4. Compensation and Benefits.
4.10 Base Salary. In consideration of Employee's performance of all of
his duties and responsibilities hereunder and his observance of all of the
covenants, conditions and restrictions contained herein, Employee shall be
entitled to receive from the date of this Agreement through the fifth
anniversary hereof, a base salary of Two Hundred and Fifty Thousand Dollars
($250,000) per annum. The base salary shall be payable in bi-weekly or other
periodic installments in accordance with the Company's payroll procedures in
effect from time to time. The base salary has been expressed in terms of a gross
amount, and the Company is or may be required to withhold from such gross amount
deductions in respect of federal, state or local income taxes, FICA and the
like. Employee's base salary for any renewal term hereof shall be determined by
the Compensation Committee of the Company's Board of Directors.
4.11 Bonus. Employee shall also be entitled to receive from the date of
this Agreement through the fifth anniversary hereof, a guaranteed minimum bonus
of Fifty Thousand Dollars ($50,000) per annum. Such bonus shall be payable in
four (4) equal payments of Twelve Thousand Five Hundred Dollars ($12,500) each
on the first day of the month following the end of each calendar quarter. The
guaranteed minimum bonus has been expressed in terms of a gross amount, and the
Company is or may be required to withhold from such gross amount deductions in
respect of federal, state or local income taxes, FICA and the like. Employee may
be eligible for additional discretionary bonuses during the tenure of his
employment with the Company, which shall be determined by the Compensation
Committee of the Company's Board of Directors.
4.12 Compensation Deferral. Fifty percent (50%) of the "Salary" and
"Bonus" referred to above will be deferred until the Company receives at least
$5 million in "Gross Revenue" from all sources.
4.13 Medical and Dental Insurance, Vacation. Throughout the term of
Employee's employment under this Agreement, Employee, Employee's spouse and
Employee's children shall be entitled to receive Company paid medical insurance
and dental insurance. Employee shall be entitled to four weeks of paid vacation
(to be taken at such time or times as is reasonably convenient to the Company).
4.14 Expenses. Employee may incur reasonable expenses in performing his
services hereunder which shall be reimbursed by the Company, in accordance with
the Company's standard expense reimbursement policies for approved expenses,
upon presentation by Employee of supporting documentation (e.g., receipts and
vouchers) for such expenditures which meet IRS guidelines.
4.15 Life and Disability Insurance and 401(k) Plan. Employee shall also
be entitled to Short Term Disability, Long Term Disability and Life Insurance
and participation in the 401(k) plan maintained by the Company.
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4.16 Automobile Allowance. Employee shall also be entitled to One
Thousand Dollars ($1,000) per month as an automobile allowance.
4.17 Cellular Telephone. Employee shall also be entitled to reasonable
expenses associated with Employee's use of one (1) cellular telephone in
performing his services hereunder which shall be reimbursed by the Company
4.18 Other Fringe Benefits. Employee shall also be entitled to all
other employee benefits generally provided by the Company.
5. Term of Employment. The Company hereby employs Employee, and Employee hereby
accepts employment with the Company, for a period of five (5) years terminating
on December 31, 2008 ("Term"). Notwithstanding anything in this Section 5 to the
contrary, this Agreement may be terminated at any time in accordance with
Section 6.
6. Termination.
6.1 By the Company for Cause. Employee's employment under this
Agreement may be terminated immediately by the Company upon the occurrence of
one or more of the following causes:
A. Employee's conviction of a felony or other crime involving
moral turpitude;
B. The commission by Employee of any act of fraud or willful
or reckless dishonesty in connection with the performance of any of Employee's
duties hereunder (including, but not limited to falsification of Company
records, making false statements of material facts to third parties regarding
the Company's Business, fraud, and misappropriation or embezzlement against the
Company or any of its customers or suppliers);
C. Any willful material breach by Employee of any of the
covenants, conditions or restrictions set forth in this Agreement, other than
the restrictions set forth in Sections 7, 8 or 9 of this Agreement, or the
willful material failure to perform Employee's duties, and/or to observe the
written rules, regulations, policies, directions or restrictions adopted by the
Company from time to time to the extent such rules, regulations, policies,
directions or restrictions are not inconsistent with the terms of this
Agreement, provided however, that such failure or breach shall not have been
cured within ten (10) days after Employee is given specific notice and an
opportunity to cure such failure or breach;
D. Any material breach by Employee of any of the restrictions
set forth in Sections 7, 8 or 9 of this Agreement; and
E. If Employee dies or becomes disabled (Employee shall be
deemed "disabled" for purposes of this Agreement if he is unable, by reason of
illness, accident, or other physical or mental incapacity, to perform
substantially all of his regular duties for a continuous period of one hundred
eighty (180) days).
Reasons 6.1(A) through 6.1(D) are for "Cause." Reason 6.1(E) is for
"Disability."
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6.2 By Employee Upon Breach by the Company. Upon a breach by the
Company of the terms of this Agreement, Employee shall have the right to
terminate his employment hereunder, provided that the Company has first been
afforded thirty (30) days written notice and an opportunity to cure such breach.
6.3 By Employee Without Cause. Employee may voluntarily terminate his
employment hereunder on sixty (60) days written notice to the Company.
6.4 Effect of Termination. Upon termination of Employee's employment by
the Company under Section 6.1, except for a termination resulting from the
disability of Employee, Employee shall be entitled to all compensation accrued
but unpaid to the date of termination, but Employee shall have no further rights
to any base salary, benefits or other compensation of any kind or nature.
Upon termination of Employee's employment by the Company under
Section 6.1 as a result of the disability of Employee or by Employee under
Section 6.2, Employee shall be entitled to (i) continue to receive all base
salary for a period of six (6) months following termination, less any sums which
Employee receives from disability insurance maintained by the Company.
Upon any termination of Employee's employment pursuant to
Section 6.1, 6.2 or 6.3, Employee shall be entitled to compensation for any
accrued and unused vacation hours as provided by applicable law and to any
rights under COBRA or other comparable rights as provided by law.
7. Disclosure or Use of Confidential Information; Non-Competition.
7.1 Confidentiality and Appropriation of Confidential Information.
During the term of Employee's employment under this Agreement and thereafter,
Employee will keep confidential and will not directly or indirectly reveal,
divulge or make known in any manner to any person or entity (except as required
by applicable law or in connection with the performance of his duties and
responsibilities as an employee hereunder) nor use or otherwise appropriate for
Employee's own benefit, or on behalf of any other person or entity by whom
Employee might subsequently be employed or otherwise associated or affiliated
with, any Confidential Information (as hereinafter defined). Confidential
Information shall include information (not readily compiled from publicly
available sources) which is made available to Employee or obtained by Employee
during the course of his employment relating or pertaining to the Company's
business and franchise operations, including trade secrets, business and
financial information, operations information, projects, products, customers,
supplier names, addresses and pricing policies, company pricing policies,
computer programs and software or unpublished know-how, whether patented or
unpatented. Employee agrees to cooperate with the Company to maintain the
secrecy of and limit the use of such Confidential Information. Employee further
agrees that he is under no obligation to any former employer which is in any way
inconsistent with this Agreement or which imposes any restriction on the
Company.
7.2 Prevention of Unauthorized Release of Company Information. Employee
agrees to promptly advise the Company of any knowledge which he may have of any
unauthorized release or use of any Confidential Information, and shall take
reasonable measures to prevent unauthorized persons or entities from having
access to, obtaining or being furnished with any Confidential Information.
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8. Proprietary Rights and Materials. All documents, memoranda, reports,
notebooks, correspondence, files, lists and other records, and the like,
designs, drawings, specifications, computer software and computer equipment,
computer printouts, computer disks, and all photocopies or other reproductions
thereof, affecting or relating to the business of the Company, which Employee
shall prepare, use, construct, observe, possess or control ("Company
Materials"), shall be and remain the sole property of the Company. Upon
termination of this Agreement, Employee shall deliver promptly to the Company
all such Company Materials.
9. Inventions and Discoveries. Employee hereby assigns to the Company all of
Employee's rights, title and interest in and to all inventions, discoveries,
processes, standards, procedures, designs and other intellectual property
(hereinafter collectively referred to as the "Inventions"), and all improvements
on existing Inventions made or discovered by Employee during the Term of
Employee's employment hereunder. Promptly upon the making of any such Invention
or improvement thereon, Employee shall disclose the same to Company and shall
execute and deliver to Company such reasonable documents as Company may request
to confirm the assignment of Employee's rights therein and, if requested by
Company, shall assist Company in applying for and prosecuting any patents which
may be available in respect thereof. Inventions originated by Employee shall be
considered by the Board of Director's Compensation Committee in determining
salary and incentive compensation.
10. Remedies.
10.1 Injunctive Relief. The Company and Employee recognize and
acknowledge that Employee is employed under this Agreement as an employee in a
position where Employee will be rendering personal services of a special,
unique, unusual and extraordinary character requiring extraordinary ingenuity
and effort by Employee. Employee hereby acknowledges that compliance with the
provisions of Sections 7, 8 and 9 of this Agreement (which shall survive the
termination of this Agreement in all respects) is necessary to protect the
goodwill and other proprietary interests of the Company and that the Company
would suffer continuing and irreparable injury which injury is not adequately
compensable in monetary damages or at law. Accordingly Employee agrees that the
Company, its successors and assigns may obtain injunctive relief against the
breach or threatened breach of the foregoing provisions, in addition to any
other legal remedies which may be available to it under this Agreement
(including money damages), and that any such breach or threatened breach may be
preliminarily enjoined by the Company without bond.
10.2 Other Remedies. However, no remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise. The election of any one or more remedies by
the Company shall not constitute a waiver of the right to pursue other available
remedies.
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10.3 Accounting for Profits. Employee covenants and agrees that if he
violates the provisions of Sections 7, 8 or 9, the Company shall be entitled to
an accounting and repayment of all profits, compensation, commissions,
remuneration or other benefits that Employee has realized and may realize as a
result of or in connection with any such violation. These remedies shall be in
addition and not in limitation of any injunctive relief or other rights or
remedies to which the Company is or may be entitled at law, in equity or under
this Agreement.
10.4 Attorneys' Fees. If litigation arises under this Agreement between
Company and Employee, the prevailing party in such litigation shall be entitled
to recover its reasonable attorneys' and paralegal's fees, court costs and
out-of-pocket litigation expenses from the non-prevailing party.
10.5 Arbitration. Any controversy or claim arising out of or relating
to this Agreement, except Sections 7, 8 and 9, shall be resolved by arbitration
in accordance with the Commercial Rules of the American Arbitration Association
then in effect. The decision of the arbitrator shall be final and binding upon
the parties hereto, and judgment upon the award rendered by the arbitrator may
be entered in any court of competent jurisdiction. There shall be a single
arbitrator, the situs of the arbitration shall be in the County of Orange, State
of California, and the prevailing party (or parties) shall also recover from the
losing party (or parties) reasonable attorneys' fees and the costs of
arbitration as part of the judgment rendered.
10.6 Cumulative Remedies. The remedies described in this Section 10 are
in addition to and not in substitution for any other remedies available under
the law.
11. Severability. It is the desire of the parties that the provisions and
restrictions of this Agreement be enforced to the fullest extent permissible
under the laws and public policies in each jurisdiction in which enforcement
might be sought. Thus, whenever possible, each provision or restriction of this
Agreement shall be interpreted in such manner as to be effective under
applicable law. If any section or portion of this Agreement or the application
thereof to any party or circumstance shall be prohibited by or invalid under
applicable law, the invalidity or unenforceability of that section or portion of
this Agreement shall not invalidate any other section or portion, nor shall it
affect the application of such section or portion to other parties or other
circumstances. If in any judicial proceeding, a court shall refuse to enforce
this Agreement, whether because the time limit is too long or because the
restrictions contained herein are more extensive (whether as to geographic area,
scope of business or otherwise) than is necessary to protect the business and
goodwill of the Company, it is expressly understood and agreed between the
parties hereto that this Agreement is deemed modified to the extent necessary to
permit this Agreement to be enforced in any such proceedings.
12. Continuing Obligations. Employee's obligations pursuant to Sections 7 and 8
of this Agreement and the rights and remedies of the Company hereunder shall
continue in effect beyond the term of this Agreement.
13. Waiver or Modification. No waiver or modification of this Agreement or of
any covenant, condition, or limitation herein contained shall be valid unless in
writing and duly executed by the party to be charged therewith. Furthermore, no
evidence of any modification or waiver shall be offered or received as evidence
in any litigation between the parties arising out of or affecting this Agreement
or the rights or obligations of any party hereunder, unless such waiver or
modification is in writing, duly executed as aforesaid. The provisions of this
Section may not be waived except as herein set forth.
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14. Entire Agreement. This written Agreement contains the sole and entire
agreement between the parties as to the matters contained herein, and supersedes
any and all other agreements between them. The parties acknowledge and agree
that neither of them has made any representation with respect to such matters of
this Agreement or any representations except as are specifically set forth
herein, and each party acknowledges that he or it has relied on his or its own
judgment in entering into this Agreement. The parties further acknowledge that
statements or representations that may have been heretofore made by either of
them to the other are void and of no effect and that neither of them has relied
thereon in connection with his or its dealing with the other.
15. Choice of Law. This Agreement and the performance hereunder and all suits
and special proceedings hereunder shall be construed in accordance with the laws
of the State of California.
16. Binding Effect of Agreement; Assignment; Merger; Dissolution. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
heirs, successors, assigns and legal representatives. This Agreement shall be
construed as a contract for personal services by Employee to the Company and
shall not be assignable by Employee. In the event of the sale, merger or
consolidation of the Company, Employee agrees that the Company may assign its
rights and obligations hereunder to its successor or purchaser.
17. Notices. All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given when delivered by hand or when mailed by certified registered mail, return
receipt requested, with postage prepaid to their current address or to such
other address as they request in writing.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first written above.
"Company"
First Deltavision, Inc,
a Nevada corporation
By:_________________________________________
Xxxxx X. Xxxxxxxx, Chairman
"Employee"
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Xxxxx X. Xxxxx, Executive Vice President and
Chief Financial Officer
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