Exhibit 10.33
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT CONTRACT AGREEMENT ("Agreement") is made effective as of the
7th day of March, 2005, between RehabCo, Inc., a Texas corporation,
(hereinafter called the "Company"), and Xxxx Xxxxxxxx (hereinafter called
the "Employee").
WITNESSETH
WHEREAS, the Company owns and operates various health care service
businesses (all such businesses hereinafter being referred to collectively
as the "Business"); and
WHEREAS, The Company desires to employ the Employee upon the terms and
conditions hereinafter set forth, and the Employee desires to accept
employment with the Company and render services to the Company on such terms
and conditions;
NOW, THEREFORE, in consideration of the covenants and agreements herein
made, the parties hereto agree as follows:
A. Recitals: The above recitals are incorporated by reference herein and
made a part thereof as if set forth herein verbatim.
B. Employment: The Company hereby employs Employee, and Employee hereby
accepts employment with the Company, to serve as the President of the
Company. The Employee's duties shall include, but not be limited to those
duties of a President and such other duties as the Company may from time to
time reasonably direct.
C. Term and Duties
1. The period of Employee's employment under this Agreement shall be
deemed to have commenced as of the date first above written and
shall continue for a period of three (3) years thereafter.
2. During the period of employment hereunder and except for illness,
reasonable vacation periods and reasonable leaves of absence, the
Employee shall devote the Employee's time, attention, skill and
efforts to the faithful performance of the Employee's duties
hereunder and the furtherance of the Company's business.
D. Compensation
1. For all services rendered by Employee hereunder, Employer shall
pay Employee base salary of up to 25% of the RehabCo operating
income on a cash basis except for direct sales of spinal
decompression equipment. The Employee shall be eligible to
receive an annual advance of One Hundred Fifty Thousand Dollars
($150,000.00) payable in equal installments at the same intervals
as other Company employees or monthly, at the sole discretion
of the Company. Deductions shall be made from Employee's
compensation for social security, withholding tax and such other
taxes as may from time to time be required by governmental
authorities.
2. The base salary earned up to 25% of the RehabCo operating income
on a cash basis in excess of the annual $150,000 advance shall be
paid quarterly.
3. Employee shall be considered for bonus compensation annually from
time to time based upon the overall performance and financial
condition of the Company and in particular those areas of the
Company's business operations for which the Employee has primary
responsibility. Such bonus amounts shall be determined by
management of American HealthChoice, Inc.
4. Employee is encouraged, from time to time, to incur reasonable
expenses in promoting the business of the Company, provided that
the business name and logo are used, all in accordance with the
directives of the Company's Board of Directors. Such expenses
include, but are not limited to, expenses for travel,
entertainment and miscellaneous expenses incurred in the conduct
of the business of the Company. Employee shall be entitled to
reimbursement from the Company for such expenses upon submission
of proper documentation therefore.
E. Benefits
1. At such reasonable times as the Company shall, in its discretion,
permit, Employee shall be entitled, without loss of pay, up to
Thirty (30) business days per calendar year of combined vacation,
personal, sick, and holiday leave. Such leave shall be taken in
such a manner and at such times as shall be agreed upon by
Employee and the Company, subject to the following conditions:
a. All leaves shall be scheduled in a reasonable manner by the
Employee with reasonable prior notice to the Company.
Employee is responsible for ensuring appropriate supervision
of those areas of the business for which the Employee has
primary responsibility during such leaves.
b. All leave shall accrue as of the date hereof with respect to
the Company's fiscal year 2005, and thereafter, any accrued
leave time not used during the year in which it is available
to be taken will be lost.
2. So long as group health insurance is generally available in the
marketplace, and subject to such exclusions and underwriting
conditions as the insurer may impose as to Employee, the Company
shall pay the cost of group health insurance for the Employee.
The insurance provided for Employee shall be the same as that
provided for all other employees of the Company, as the same may
be modified from time to time. This Agreement does not guarantee
Employee's insurability; rather; it merely requires the Company to
pay for the Employee's insurance on the same basis as for other
employees of the Company so long as it is commercially available,
until termination thereof.
3. So long as the Company shall have a 401(k) and/or any other
deferred compensation plan, Employee shall be entitled to
participate in all such deferred compensation plans.
4. Company shall pay up to One Thousand Five Hundred Dollars
($1,500.00) per calendar year toward the cost of continuing
professional education courses for Employee, provided that same
are relevant to Employee's duties hereunder. Expenditures of any
amount exceeding an aggregate total of $1,500 during any one
calendar year for continuing professional education for Employee
shall be submitted to the Board for its prior approval.
5. Company shall pay on behalf of Employee his annual licenses and
dues for two (2) professional organizations of Employee's choice
that are directly related to his employment.
F. Termination: Severance Pay
1. Subject to the provision of subsection (4) below, this Agreement
shall be terminated upon the happening of the first of any of the
following events:
a. Whenever the Company and the Employee mutually agree to
terminate this Agreement; or
b. Upon the death of the Employee; or
c. At the latter of such time as Employee (i) has been absent
from work, disabled or otherwise impaired from performing the
Employee's duties hereunder on a full-time basis for a
continuous period of ten (10) weeks or a total of eighteen
(18) weeks in any consecutive twelve (12) month period, or
(ii) begins receiving disability insurance benefits; or
d. If the Employee violates any provision of this Agreement and
is given written notice of the same, and fails or refuses to
cure same within thirty (30) days after notice thereof from
the Company (cure may be effected by written acknowledgment
of such violation if it is not a continuing course of
conduct); or
e. Employee's failure or refusal to comply with the accepted
professional policies and standards of the Company after
written notice thereof specifying the nature of such failure
or refusal; or
f. Any behavior which is repeated or persistent following
written notice from the Company and which is egregious or
materially adverse to the normally harmonious and productive
conduct of the Company's Businesses; or
g. At the Company's option, at any time for "cause", as
hereinafter defined.
2. For purposes of this Agreement, the term "cause" is defined to
include: (a) the matters set forth in sections (1)(d) through
(1)(g) above; or (b) a conviction of fraud or embezzlement; or (c)
Employee becomes substantially dependent on alcohol or drugs.
3. Unless the Company determines, by unanimous vote of its Board of
Directors, that immediate termination of the Employee is necessary
for protection of the Company's Businesses or property, the
Company shall notify Employee in writing, by certified mail, at
least thirty (30) days in advance of any proposed termination
pursuant to subsection (1)(d) through (1)(f) of this Section F
(which notice shall state the event for which Employee is proposed
to be discussed in such detail as to permit a reasonable
assessment by Employee of the bona fides thereof), and shall give
Employee (a) such thirty (30) days to cure any breach or
misconduct, if the same is capable of being cured within such
period; or (b) such reasonable amount of time that the Board of
Directors determines is required in order to cure said breach or
misconduct.
4. In the event of termination of this Agreement by the Company
without cause, Employee shall be entitled to termination/severance
pay equal to twelve (12) months of compensation (as defined in
Section D(1)), less any amounts due the Company from the Employee.
In addition, if this Agreement is terminated by the Company with
cause or without cause, Employee shall retain its rights under the
Asset Purchase Agreement entered into between American
HealthChoice, Inc and the Employee dated March 7, 2005. Upon
receipt by Employee of such termination/severance pay, all of
Employee's rights hereunder shall terminate.
G. Employee Cooperation: The Employee agrees to cooperate fully with the
Company during as well as after the Employee's association with the
Company has terminated in the investigation or defense of all claims
and/or any audits or other reviews conducted by or on behalf of any
third-party payer (including the Federal or state government) arising
out of or relating to the Businesses during the Employee's association
with the Company, and/or any proceedings connected with the collection
of any fees relating thereto. The Employee agrees to complete, sign
and furnish to the Company promptly and documentation required or
requested by any third-party payer in connection with the examination,
verification or review of any payment relating to any services rendered
by the Employee during the Employee's association with the Company.
H. Disclosure of Confidential Information: The Employee acknowledges that
as a result of the Employee's association with the Company, the
Employee will be making use of, acquiring and/or adding to confidential
information of a special and unique nature and value, relating to such
matters as the Company's confidential reports, lists of referring
physicians, third-party and direct payor contracts, contracts with
managed care plans, lists of patients and the fees paid by such
patients, and other confidential matters. As material inducement to
Company to enter into this Agreement, and to pay to the Employee the
compensation referred to in Section D hereof, the Employee covenants
and agrees that the Employee shall not, at any time during or following
the term of this Agreement, directly or indirectly, divulge, disclose
or make any use of, for any purpose whatsoever, any confidential
information which has been obtained by or disclosed to the Employee as
a result of or otherwise in connection with the Employee's provision of
services hereunder. In accordance with the foregoing, the Employee
further agrees that the Employee will at no time retain or remove from
the premises of the Company records of any kind or description
whatsoever for any purpose unconnected with the strict performance of
the Employee's association with the Company for any reason, the
Employee will promptly return to the Company all lists, books and
records of or pertaining to the Company's Businesses, and all other
property belonging to the Company, in the Employee's custody, control
or possession.
In the event of a breach or threatened breach acted upon by the
Employee of any of the provisions of this Section H, the Company, in
addition to and not in limitation of any other rights, remedies or
damages available to the Company at law or in equity, shall be entitled
to preliminary and permanent injunctive relief in order to prevent or
to restrain any such breach by the Employee, or by the Employee's
partners, agents, representatives, servants, employers, employees
and/or any and all persons, directly or indirectly, acting for or with
the Employee. The provisions of this Section H shall survive the
termination of this Agreement.
I. Covenants Against Competition:
1. The Employee acknowledges that the Employee's services to be
rendered hereunder are of a special and unusual character which
have a unique value to Company, the loss of which may not
adequately be compensated by damages in an action at law, and
2. Employee will refrain from soliciting or attempting to solicit to
employ any employees of the Company or any of its subsidiaries, or
committing any act the primary purpose of which is to induce any
employee of the Company to leave the Company's employ, or
significantly interfere with, disrupt or attempt to disrupt any
past, present or prospective relationship, contractual or
otherwise, relating to the Company's business activities, between
the Company and its customers and suppliers.
3. In view of the foregoing and of the confidential information to be
obtain by or disclosed to the Employee as hereinabove set forth
(including, without limitation, the confidential referral source
lists and information which are the proprietary property of
Company), and further as a material inducement to the Company to
enter into this Agreement and pay to the Employee the compensation
referred to in this Agreement, the Employee covenants and agrees
that, during the term of this Agreement and for a period of two
(2) years after termination of this Agreement including, but not
limited to, the expiration of this Agreement without renewal,
neither the Employee nor any person or entity, under the
Employee's own account or as agent, servant, partner, employee or
shareholder of any corporation, invest in (other than passive
'investments of 5% or less in publicly traded entities), manage or
control any individual or entity that is engaged in the same or
similar business as the Company anywhere in the World. This
section shall apply only to transactions and situations arising or
occurring after the date of this Agreement, and shall not apply to
passive investments in entities publicly traded over a regulated
securities exchange.
4. The Employee covenants and agrees that, if the Employee shall
violate any of the Employee's covenants or agreements provided for
pursuant to the foregoing subsections of this Section I, the
Company shall be entitled to an accounting and repayment of all
profits, compensation, commissions, remunerations or benefits
which the Employee directly or indirectly has realized and/or may
realize as a result of, growing out of or in connection with any
such violation.
5. The foregoing covenants by the Employee shall be construed as an
agreement independent of any claim or right of the Employee
hereunder. The existence or alleged existence of any claim or
cause of action by the Employee against the Company, whether
predicted on this employment relationship or otherwise, shall in
no event constitute a defense against or waiver of the Company's
right to enforce the foregoing covenants.
J. Reasonableness of Restrictions
1. The Employee has carefully read and considered the provisions of
Sections H and I hereof and, having done so, agrees that the
restrictions and remedies set forth in such sections (including,
but not limited to, the time period of restriction, the
geographical area of restriction and the damages and injunctive
relief provisions therein) are fair and reasonable and are
reasonably required for the protection of the interests of the
Company.
2. In the event that, notwithstanding the foregoing, any of the
provisions of Section H or I shall be held to be invalid or
unenforceable, the remaining provisions thereof shall nevertheless
continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included therein. In the event
that any provision of Section I hereof relating to time period
and/or area of restriction shall be declared by a court of
competent jurisdiction to exceed the maximum time period or area
such court deems reasonable and enforceable, said time period
and/or area of restriction shall be deemed to become and
thereafter be the maximum time period and/or area which such court
deems reasonable and enforceable.
K. Notices: Any notice or document required or desired to be given to
either party herein shall be in writing and shall be deemed given (a)
when sent registered mail, return receipt requested and postage
prepaid, addressed to the party at the address indicated below (or such
other address as that party may hereafter designate); or (b) when
delivered personally to that party at said address:
If to the Company:
RehabCo, Inc.
C/O American HealthChoice, Inc.
0000 Xxxxx Xxxxxxx Xx.
Xxxxxx Xxxxx, Xxxxx 00000
If to the Employee:
Xxxx Xxxxxxxx
_______________________________
_______________________________
L. Arbitration: Any claim, controversy or dispute with respect to this
Agreement shall be promptly submitted to arbitration ("Arbitration")
for determination. The Arbitration shall be binding upon the parties
thereto, without a right by any party to a trial de novo in a court of
competent jurisdiction, and shall be conducted under the auspices
of the American Arbitration Association (herein referred to as
"Association") with venue in Dallas County, Texas, and in accordance
with its Commercial Arbitration Rules, however:
1. The party seeking Arbitration shall give written notice of a
Demand to Arbitrate (herein referred to as "Demand") to the other
party and to the Association; the Demand shall include (a) the
issues to be determined, (b) a copy of this arbitration provision
and c) the Association to designate three arbitrators;
2. Within ten (10) days after receipt of the Demand, the other party
shall give (a) written notice (herein referred to as "Response")
to the party that demanded arbitration and to the Association of
any additional issues to be arbitrated. (b) its answer to the
issues raised by the party that sent the Demand and c) its
designation of a second arbitrator.
3. If a Response designating a second arbitrator is not received
within the aforesaid ten day time, the Association shall designate
the second arbitrator forthwith.
4. The two arbitrators as designated pursuant to the foregoing
provisions shall then designate a third arbitrator within ten (10)
days after the designation of the second arbitrator. If the two
arbitrators cannot agree on the designation of the third
arbitrator within the ten day time period allotted, the
Association shall designate the third arbitrator forthwith.
5. The arbitration panel as thus designated shall proceed with the
Arbitration by giving written notice to all parties of its
proceedings and hearings in accordance with the Association's
applicable procedures. The Arbitration shall be conducted in
accordance with the Commercial Arbitration Rules of the
Association except as modified by this Agreement. The arbitrators
shall follow and apply the substantive laws of the State of Texas,
and, at all hearings where evidence is taken, they shall follow
and apply the rules of evidence as then in effect in the State of
Texas. The cost of the Arbitration shall be borne and paid
equally between the parties thereto, but that cost, along with all
other costs and expenses, including attorneys' fees, shall be
subject to award, in whole or in part by the arbitrators in their
discretion to the prevailing party on the various issues
arbitrated.
6. Upon written demand on any party to the Arbitration for the
production of documents reasonably related to the issues being
arbitrated, the party upon which such demand is made shall
forthwith produce, or make available for inspection and copying,
such documents without the necessity of any action by the
arbitrators.
7. The arbitrators shall have the power to grant any and all relief
and remedies, whether at law or in equity, that the courts in the
State of Texas may grant. The decision of the arbitrators shall
be final and may be enforced by any court having jurisdiction.
The parties to this Agreement expressly consent to the
jurisdiction of the Association in Dallas Texas.
M. Miscellaneous
1. Further Assurances: At any time, and from time to time, each
party will execute such additional instruments and take such
action as may be reasonably requested by the other party to carry
out the intent and purposes of this Agreement.
2. Costs and Expenses: Each party hereto agrees to pay its own costs
and expenses incurred in negotiating this Agreement and
consummating the transactions described herein.
3. Time: Time is of the essence.
4. Entire Agreement: This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter
hereof. It supersedes all prior negotiations, letters and
understandings relating to the subject matter hereof.
5. Amendment: This Agreement may not be amended, supplemented or
modified in whole or in part except by an instrument in writing
signed by the party or parties against whom enforcement of any
such amendment, supplement or modification is sought.
6. Assignment: This Agreement may not be assigned to any party
hereto without prior written consent of the other party.
7. Choice of Law Venue, Jurisdiction: This Agreement will be
interpreted, construed and enforced in accordance with the laws of
the State of Texas. Both parties agree that venue is Dallas
County, Texas and both parties agree to submit to jurisdiction in
State of Texas.
8. Headings: The section and subsection headings in this Agreement
are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
9. Pronouns: All pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or plural as
the context may require.
10. Number and Gender: Words used in this Agreement, regardless of
the number and gender specifically used, shall be deemed and
construed to include any other number, singular or plural, and any
other gender, masculine, feminine or neuter, as the context
indicates is appropriate.
11. Construction: The parties hereto participated in the preparation
of this Agreement; therefore, this Agreement shall be construed
neither against nor in favor of any of the parties hereto, but
rather in accordance with the fair meaning thereof.
12. Effect of Waiver: The failure of any party at any time or times
to require performance of any provision of this Agreement will in
no manner affect the right to enforce the same. The waiver by any
party of any breach of any provision of this Agreement will not be
construed to be a waiver by any such party of any succeeding
breach of that provision or a waiver by such party of any breach
of any other provision.
13. Severabilily: The invalidity, illegality or unenforceability of
any provision or provisions of this Agreement will not affect
any other provision of this Agreement, which will remain in full
force and effect, nor will the invalidity, illegality or
unenforceability of a portion of any provision of this Agreement
affect the balance of such provision. In the event that any one
or more of the provisions contained in this Agreement or any
portion thereof shall for any reason be held to be invalid,
illegal or unenforceable in any respect, this Agreement shall be
reformed, construed and enforced as if such invalid, illegal or
unenforceable provision had never been contained herein.
14. Enforcement: Should it become necessary for any party to
institute legal action to enforce the terms and conditions of this
Agreement, the successful party will be awarded reasonable
attorneys' fees at all trial and appellate levels, expenses and
costs.
15. Binding Nature: This Agreement will be binding upon and will
inure to the benefit of any successor successors of the parties
hereto.
16. No Third-Party Beneficiaries: No person shall be deemed to
possess any third-party beneficiary right pursuant to this
agreement. It is the intent of the parties hereto that no direct
benefit to any third-party is intended or implied by the execution
of this Agreement.
17. Counterparts: This Agreement maybe executed in one or more
counterparts, each of which will be deemed an original and all of
which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
EMPLOYEE: COMPANY:
/s/ Xxxx Xxxxxxxx /s/ Xx. X. X. Xxxxxx
------------------------- ----------------------------
Xxxx Xxxxxxxx Xx. X.X. Xxxxxx, Chairman
