EXHIBIT 99.3
EMPLOYMENT AGREEMENT
AGREEMENT made this 3rd day of June 2002, effective as of June 3,
2002, by and between Xxxxxx X. Xxxx (hereinafter referred to as the
"Executive"), presently residing in Boulder, CO at the most recent address
contained in Executive's personnel file, and Comprehensive Behavioral Care,
Inc., a Nevada corporation with principal offices located at 000 Xxxxx Xxxxxx
Xxxxxxxxx; Building 219, Suite 200, Xxxxx, Xxxxxxx 00000 (hereinafter referred
to as the "Company").
W I T N E S S E T H :
WHEREAS, the Company, and affiliate corporations, is currently engaged
in the principal business of providing various managed behavioral health care
services on a fee for service or through contract capitation agreements; and
WHEREAS, the Executive is offered employment by the Company in the
capacity as President, Public Sector Systems; and
WHEREAS, the Company and Executive desire to provide for the future
continued employment of Executive upon the terms and conditions provided for
herein;
NOW, THEREFORE, it is mutually agreed by and between the parties
hereto as follows:
ARTICLE I
EMPLOYMENT
Subject to and upon the terms and conditions of this Agreement, the
Company hereby employs and agrees during the term hereof, and subject to the
terms and conditions hereof to continue the employment of the Executive, and
the Executive hereby accepts such employment in his
capacity as President, Public Sector Systems of the Company. Executive shall
report to the President and Chief Executive Officer.
ARTICLE II
DUTIES
(A) Executive shall, during the term of his employment with the
Company, and subject to the reasonable and good faith direction and control of
the Executive Officers and ultimately the Company's Board of Directors, perform
such duties and functions for the Company as he may be called upon to perform
by the Chief Executive Officer of the Company during the term of this Agreement
consistent with the position of President, Public Sector Systems.
(B) The Executive agrees to devote his full time and utilize his
continued best efforts to the performance of his duties for the Company and to
render such services for any subsidiary and affiliate corporations of the
Company as may be assigned to him.
(C) The Executive shall perform, in conjunction with the
Company's senior management, to the best of his ability the following services
and duties for the Company and its subsidiary and affiliate corporations (by
way of example, and not by way of limitation):
(i) Those duties attendant to the position with the
Company for which he was hired;
(ii) Supervision of the Clinical Operations functions of
the Company until an additional position is established for that
function;
(iii) Works with Executive management to establish
priorities, strategies, and objectives;
(iv) Development of Public Sector Products and Markets;
2
(v) Interfaces with and participates in marketing
activities;
(vi) Assist with the development of budgets, forecasts,
financial models, credentialing and responses to Requests for
Proposals.
ARTICLE III
STOCK OPTIONS
(A) Executive shall be eligible for participation in periodic
grants of Comprehensive Care Corporation ("CCC") stock options from time to
time as determined by the CCC Board of Directors at its discretion.
ARTICLE IV
PRINCIPAL BUSINESS LOCATION OF EXECUTIVE
Executive shall be based at the Company's corporate headquarters
located in Tampa, Florida; even though he resides in Colorado. Executive shall
undertake such travel as directed within or without the United States as is or
may be reasonably necessary in the interests of the Company and its operating
subsidiaries and the performance of his duties hereunder.
3
ARTICLE V
COMPENSATION
(A) Commencing the effective date of this Agreement and during
the full term of this Agreement, Executive shall receive a base salary (the
"Base Salary") at the rate of $120,000 per annum payable in equal bi-weekly
increments or such other regular pay periods of the Company with the
opportunity for periodic review and adjustment based on performance, market
conditions, financial parameters of the Company, and other conditions as deemed
appropriate and set forth by the Executive Officers of the Company. The Chief
Executive Officer will have the sole discretion to approve any upward
adjustment to Executive's compensation that brings the Executive's compensation
up to $150,000 annually. Any upward adjustment to Executive's compensation that
brings the Executive's compensation greater than $150,000 annually will be
approved at the sole discretion of the Board of Directors.
(B) Executive may receive such bonuses or additional compensation
as may be determined from time to time by the Executive Officers and approved
as appropriate by the Board of Directors in its sole discretion.
(C) The Company shall deduct from Executive's compensation,
whether Base Salary or any discretionary bonus, all federal, state and local
taxes which it may now or may hereafter be required to deduct.
(D) In addition to the Base Salary and for the fiscal year ending
May 31, 2003, Executive shall be eligible to earn an annual performance based
incentive bonus (the "Incentive Bonus") of up to $20,000 for achievement of
target company financial and non-financial individual objectives. This target
amount will be based 20% on individual performance against objectives and 80%
on the
4
Company's financial performance against set financial criteria for the
Plan year set forth in Annex A. Pay-out of this bonus will be as soon as
reasonably possible after the closure of the books for the fiscal year.
ARTICLE VI
BENEFITS
(A) During the term hereof, (i) the Company shall provide
Executive with the Company's standard health insurance and retirement savings
plans (i.e. 401k Plan) as generally offered and made available to employees of
the Company, and upon the same terms and conditions as provided to other
executives of the Company. The Company reserves the right to alter, modify,
change any currently offered health insurance and retirement savings plan;
Currently, Executive elects not to participate in the group health plans of the
Company. Therefore, the Company reimburses Executive $220 per month toward
health insurance premium costs. At such a time that Executive elects
participation in the Company group health plans, premium contribution and cost
sharing will be as provided to other executives of the Company; (ii) Executive
shall also be eligible to participate life insurance and disability insurance
as generally offered and made available to executives of the Company as now if
effect or may hereafter be adopted; (iii) Executive shall be reimbursed by the
Company, upon presentation of appropriate vouchers, for all reasonable business
expenses incurred by the Executive on behalf of the Company, consistent with
the Company's expense reimbursement policies.
(B) Executive shall be entitled to three weeks of paid vacation
during each 12-month period of employment, to be accrued in accordance with the
Company's vacation policies and to be taken at such times as not to interfere
with projects then in process and within the maximum carry
5
over limits as available to all employees of the Company. Additionally, the
Executive shall be accorded such leave and holidays generally made available to
other Executive Officers of the Company.
(C) Executive shall be eligible to participate if adopted, in any
Senior Executive Retirement Plan as implemented and approved by the Board of
Directors. Participation shall be in an amount and shall be earned and vested
in accordance with any plan the Company may ultimately adopt. It is currently
anticipated with implementation beginning in Calendar Year 2002; final
participation shall be based upon finalized and approved parameters as
determined by the Board of Directors in their sole discretion.
(D) Executive shall be eligible to participate in any Deferred
Compensation Plan as implemented by the company in its discretion.
Participation will be intended to give the ability to defer portions of the
Executive's annual base salary and up to all of a Participant's earned annual
incentive in accordance with finalized parameters of the approved Plan.
6
ARTICLE VII
NON-DISCLOSURE
The Executive shall not, at any time during or after the termination
of his employment hereunder, except when acting on behalf of and with the
authorization of the Company, make use of or disclose to any person,
corporation, or other entity, for any purpose whatsoever, any trade secret or
other confidential information concerning the Company's business, finances,
marketing information, managed care business, plans and programs, contract
proposals, psychiatric and dependence operations, names and arrangements with
network providers, and information relating to any managed care, capitation,
sales or marketing programs of the Company, or financial modeling and responses
to Requests for Proposals (collectively referred to as the "Proprietary
Information"). For the purposes of this Agreement, trade secrets and
confidential information shall mean information disclosed to the Executive or
known by him solely as a consequence of his employment by the Company, whether
or not pursuant to this Agreement, and not generally known (other than as
disclosed by any person in breach of any obligation of confidentiality to the
Company) in the industry, concerning the business, finances, methods,
operations, marketing information, and information relating to the sales and
marketing of the Company. The foregoing is intended to be confirmatory of the
statutory law and common law of the state of Florida relating to trade secrets
and confidential information.
ARTICLE VIII
RESTRICTIVE COVENANT
(A) In the event of the voluntary termination of employment with
the Company by Executive, Executive agrees that he will not, for a period of
twelve (12) months following such
7
termination, directly or indirectly contact or interfere with existing
contracted business or business in process of active discussions. In addition,
Executive agrees not to bid, either directly or indirectly, on any new business
in a State where the Company has an office for a period of twelve months.
(B) In furtherance of the foregoing, Executive shall not during
the aforesaid period of non-competition, directly or indirectly, in competition
with the Company, solicit any management person who was employed by the Company
or solicit any provider, insurer or group through, from or with which the
Company transacted any managed behavioral health care business. The foregoing
shall not be deemed or construed to prevent Executive from soliciting any
consultant or advisor to the Company for any project that Executive may
participate in which is not in violation of this Article VIII.
(C) If any court shall hold that the duration of non-competition
or any other restriction contained in this paragraph is unenforceable, it is
our intention that same shall not thereby be terminated but shall be deemed
amended to delete there from such provision or portion adjudicated to be
invalid or unenforceable or in the alternative such judicially substituted term
may be substituted therefore.
ARTICLE IX
TERM AND TERMINATION
(A) This Agreement shall commence on the date hereof and continue
until terminated by the Executive or the Company.
8
(B) This Agreement shall terminate prior to the expiration of its
term as follows:
(i) upon the mutual agreement of the Company and
Executive.
(ii) upon the death or permanent disability of Executive,
in which case Executive shall be entitled to all Base Salary through
the date of termination. For the purposes of the foregoing, permanent
disability shall be the inability of Executive to attend to his usual
duties for a period of two (2) months in any 12 month period of the
term or sixty (60) consecutive calendar days due to illness or injury.
(iii) for cause by the Company, in which case Executive
shall only be entitled to his Base Salary through the date of
termination. For the purpose of the foregoing, cause shall be (a) a
breach or default in the performance by Executive of any of his
material obligations under this Agreement, or (b) the commission by
Executive of any act resulting in or intending to result in his
personal gain or enrichment at the expense of the Company, or (c) the
commission by Executive of any felony or misdemeanor or act involving
moral turpitude.
(iv) by the Company without cause, in which case
Executive shall be entitled to an amount equal to his then Base Salary
for the term of three (3) months.
(v) in the event a Change of Control in the Company
shall have occurred and within six (6) months from such Change of
Control Executive shall be terminated without cause, Executive is
entitled to receive the amount equal six (6) months Base Salary upon
termination. In addition, all options granted to Executive and which
shall not have heretofore vested, shall immediately vest and become
presently exercisable.
(vi) at any time during the term, a Change of Control in
the Company shall have occurred, Executive will have the option to
accept six (6) months of special severance or to
9
continue employment in current position with the Company at
Executive's current pay and benefit level. For the purpose of the
foregoing, a Change of Control shall be a change in ownership of 30%
or more of the voting power of all issued and outstanding share of
capital stock of the Company of all classes and any convertible or
exchangeable security on an as converted or as exchanged basis.
ARTICLE X
TERMINATION OF PRIOR AGREEMENTS
This Agreement sets forth the entire agreement between the parties and
supersedes all prior agreements between the parties, whether oral or written,
which are merged herein.
ARTICLE XI
ARBITRATION
Any dispute arising out of the interpretation, application and/or
performance of this Agreement shall be settled through final and binding
arbitration before a single arbitrator in Tampa, Florida in accordance with the
commercial rules of the American Arbitration Association. The arbitrator shall
be selected by the Association and shall be an attorney at law experienced in
the field of corporate law. Any judgment upon any arbitration award may be
entered in any court, federal or state, having competent jurisdiction of the
parties.
10
ARTICLE XII
SEVERABILITY
If any provision of this Agreement shall be held invalid and
unenforceable, the remainder of this Agreement shall remain in full force and
effect. If any provision is held invalid or unenforceable with respect to
particular circumstances, it shall remain in full force and effect in all other
circumstances.
ARTICLE XIII
NOTICE
All notices required to be given under the terms of this Agreement
shall be in writing and shall be deemed to have been duly given only if
delivered to the addressee in person or mailed by certified mail, return
receipt requested, as follows:
If to the Company: Comprehensive Care Corporation
000 Xxxxx Xxxxxx Xxxxxxxxx; Building 219, Suite 200
Xxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
If to the Executive: Addressed to the
most recent Residence Address
contained in Executive's personnel
file.
or to any such other address as the party to receive the notice shall advise by
due notice given in accordance with this paragraph.
ARTICLE XIV
BENEFIT
This Agreement shall inure to, and shall be binding upon, the parties
hereto, the successors and assigns of the Company, and the heirs and personal
representatives of the Executive.
11
ARTICLE XV
WAIVER
The waiver by either party of any breach or violation of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of construction and validity.
ARTICLE XVI
GOVERNING LAW
This Agreement has been negotiated and executed in the State of
Florida, and Florida law shall govern its construction and validity.
ARTICLE XVII
ENTIRE AGREEMENT
This Agreement contains the entire agreement between the parties
hereto. No change, addition or amendment shall be made hereto, except by
written agreement signed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
and affixed their hands and seals the day and year first above written.
(Corporate Seal) COMPREHENSIVE CARE CORPORATION
By: /s/ Xxxx Xxxx Xxxxxxx
---------------------------------------------
Name: Xxxx Xxxx Xxxxxxx
Title: President and Chief Executive Officer
/s/ Xxxxxx X. Xxxx
-------------------------------------------------
XXXXXX X. XXXX (Executive)
12
