Exhibit 99.2 Employment Agreement
EMPLOYMENT AGREEMENT
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This Employment Agreement ("Agreement") is entered into and effective as of
September 10, 2007 (the "Commencement Date"). The Agreement is entered into
between Integrated Healthcare Holdings, Inc., a Nevada Corporation ("Company")
and Xxxxx Xxxxxx ("Executive").
RECITALS
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A. The Company is engaged in the business of hospital acquisition and
management (the "Business").
B. The Company wishes to employ Executive, and Executive agrees to
serve, as the Chief Accounting Officer and Treasurer of the Company, subject to
the terms and conditions set forth below.
AGREEMENT
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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. EMPLOYMENT. The Company hereby employs Executive, and Executive hereby
accepts employment with the Company in accordance with the provisions of this
Agreement.
2. POSITION AND DUTIES. Executive shall serve as the Company's Chief Accounting
Officer and Treasurer. Executive's principal duties and responsibilities shall
be to assist the Company's Chief Financial Officer in overseeing the accounting
functions of the Company's hospital system, including its compliance with the
laws and regulations regarding disclosure required by the Securities and
Exchange Act of 1934 and Sarbanes/Oxley. Additionally, Executive will serve as
the Company's Treasurer and assist the CFO in evaluation of financing
opportunities and monitoring banking relationships. Executive shall report to
the Company's Chief Financial Officer. Except during vacation periods or in
accordance with the Company's personnel policies covering executive leaves and
reasonable periods of illness or other incapacitation, Executive shall devote
his services to Company's Business and interests in a manner consistent with
Executive's title and office and Company's needs for his services. Executive
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. Executive 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 and
communicated to him from time to time by the Company.
3. PLACE OF PERFORMANCE. Executive shall perform his duties at 0000 X. Xxxxxx
Xxxxxx, Xxxxx Xxx, Xxxxxxxxxx, or at such other location as designated by the
Company, except for reasonable work-related travel.
4. COMPENSATION AND BENEFITS.
4.1 BASE SALARY. In consideration of Executive's performance of all of
his duties and responsibilities hereunder and his observance of all of the
covenants, conditions and restrictions contained herein, Executive shall be
entitled to receive a base salary, from the Commencement Date of this Agreement,
of Two Hundred Seventy-Five Thousand Dollars ($275,000.00) per annum. At the
discretion of the Company, Executive may be granted increases, but not
decreases, in the base salary during the term of his employment. 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. Executive's base salary for any
renewal term hereof shall be determined by the Compensation Committee of the
Company's Board of Directors.
4.2 BONUS. Executive may receive an annual bonus during the term of his
employment under this Agreement as determined by the Board of Directors. This
bonus is discretionary and at the option of the Company .
4.3 STOCK OPTIONS. Subject to ratification of the Board of Directors,
the Company may grant Executive an option to purchase shares of the Company
(amount of shares and price per share to be determined by the Company).
4.4 MEDICAL INSURANCE. Effective on the commencement date or upon
expiration of previous policies Executive shall receive medical, dental, vision
and/or other health insurance in the same manner and scope as similarly-situated
senior executives.
4.5 EXPENSES. Company shall reimburse Executive for appropriate,
reasonable business expenses incurred by Executive, in accordance with the
Company's general policy applicable to similarly-situated senior executives. The
Company shall pay the reasonable costs for Executive to maintain membership in
professional organizations.
4.6 LIFE AND DISABILITY INSURANCE AND RETIREMENT PLAN. Executive shall
be entitled to participate in any short-term disability plan, long-term
disability plan, life insurance plan and any pension or retirement plan
maintained by the Company for similarly-situated senior executives.
4.7 AUTOMOBILE ALLOWANCE. Executive shall receive an automobile and
insurance allowance of $1,000.00 per month.
4.8 CELLULAR TELEPHONE. Executive shall receive reimbursement for
reasonable expenses associated with Executive's use of a cellular telephone in
performing his services.
4.9 VACATION. Executive shall be entitled to four weeks of paid
vacation each year of this Agreement in accordance with the standard vacation
policies of Company applicable to similarly-situated senior executives.
4.10 OTHER EMPLOYEE BENEFITS. Executive shall receive all other
employee benefits and participate in all other employee benefit plans provided
by the Company to similarly-situated senior executives.
5. TERMINATION.
5.1 BY COMPANY FOR CAUSE. Notwithstanding Article 1, the employment
period may be terminated by the Company at any time for "cause." For purposes of
this Section 5.1, "cause" shall mean (i) the commission by Executive of a felony
or other crime involving moral turpitude, or (ii) any willful and dishonest act
committed by Executive that materially breaches Executive's duties or
obligations under this Agreement. If Company terminates Executive for "cause"
under this Section 5.1, Executive shall be entitled to receive all accrued
salary, benefits, and vested stock options, through the effective date of
termination.
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5.2 BY EXECUTIVE FOR CAUSE. Executive may resign from his employment
with Company and terminate this Agreement for "cause." For purposes of this
Section 5.2, "cause" shall mean (i) the removal of Executive as Chief Accounting
Officer (ii) any material diminution or modification of Executive's normal
duties, responsibilities and authority under this Agreement, (iii) any change in
Executive's direct reporting relationship to the Company's Chief Financial
Officer, (iv) any material breach of this Agreement by Company, (v) the
dissolution or bankruptcy of the Company, or (vi) a "change of control," which
shall mean any person, entity, or group of affiliated persons and entities
individually or collectively owning more than fifty percent (50%) of the
outstanding voting securities of the Company selling, transferring, disposing,
or otherwise relinquishing their interest in the Company. If Executive wishes to
resign and terminate this Agreement for "cause" as a result of any of the above
changes, he must exercise such right within ten (10) calendar days of his
receipt of written notification of such change. If Executive resigns and
terminates this Agreement for "cause" under this Section 5.2, Executive shall
receive all salary, benefits, health and dental insurance, bonuses, and stock
options for a period of twelve (12) months from the effective date of
termination, but will not accrue additional Paid Time Off, vacation or other
sick pay benefits, if Executive signs the Severance Agreement attached to this
Agreement as EXHIBIT A within thirty (30) days of the effective date of
termination.
5.3 BY COMPANY WITHOUT CAUSE. Company may terminate Executive without
cause upon thirty (30) days' written notice to Executive. If Company terminates
Executive without cause, Executive shall receive all salary, benefits, health
and dental insurance, bonuses and stock options for a period of twelve (12)
months from the effective date of termination, but will not accrue additional
Paid Time Off, vacation or other sick pay benefits, if Executive signs the
Severance Agreement attached to this Agreement as EXHIBIT A within thirty (30)
days of the effective date of termination.
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Company's Initials: Executive's Initials:
/s/SRB /s/JK
5.4. BY EXECUTIVE WITHOUT CAUSE. Executive may resign without cause
effective upon sixty (60) days' written notice to Company. If Executive resigns
without cause, Executive shall be entitled to receive all accrued salary,
benefits, and vested stock options, and accrued Paid Time Off, other vacation
and/or sick pay benefits through the date of resignation.
5.5 NO MITIGATION REQUIRED. In the event of an employment termination
under Sections 5.2 and 5.3 above, Executive shall not be required to mitigate
the amount of any payments under Sections 5.2 and 5.3 by seeking other
employment, and any payments by Company under Sections 5.2 and 5.3 shall not be
reduced by the amount of any payments or benefits earned by Executive as a
result of other employment or remunerative relationship.
5.6. DEATH OR DISABILITY. Company shall be entitled to end Executive's
employment if Executive dies or becomes disabled. Executive 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 normal duties for a continuous period of ninety (90) days. In the event
Executive's employment ends on account of his death or disability, Executive (or
Executive's surviving spouse or estate if applicable) shall continue to receive
all of Executive's compensation, pro rata bonus, benefits and stock options owed
under this Agreement for a period of one (1) year from the effective date of
termination. However, Paid Time Off, vacation pay or other sick pay benefits
shall not accrue during this period. All stock options which have not vested
under this Agreement shall immediately vest and Executive (or his surviving
spouse or estate if applicable) shall have the right to all benefits associated
with such vesting upon the effective date of termination. Executive's separation
from Company on account of death or disability shall not constitute a
termination for cause by Company under this Agreement.
5.7 CONTINUING OBLIGATIONS. The rights and obligations of Executive and
Company set forth in this Article 5 on "Termination" shall survive the
termination of Executive's employment and the expiration of this Agreement.
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6. INDEMNIFICATION. To the extent permitted by law, Company shall
defend, indemnify and hold Executive harmless from and against any and all
losses, liabilities, damages, expenses (including attorneys' fees and costs),
actions, causes of action or proceedings arising directly or indirectly from
Executive's performance of this Agreement or services as an employee of Company,
except claims arising from employee's intentional misconduct or gross
negligence. The Company shall control the defense of such claim(s). This
indemnification shall be in addition to any right of indemnification to which
Executive may be entitled under Company's Articles of Incorporation and By-Laws.
With the prior approval of the Company, which may be withheld in the Company's
sole and absolute discretion, Executive may retain his own counsel to defend him
in such actions in which case Company shall pay for the reasonable costs and
expenses of such counsel. The provisions of this Article 6 shall survive the
termination of Executive's employment and the expiration of this Agreement.
7. CONFIDENTIALITY AND EXCLUSIVITY.
7.1 CONFIDENTIALITY. During the term of Executive's employment under
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this Agreement and thereafter, Executive 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 Executive hereunder) nor
use or otherwise appropriate for Executive's own benefit, or on behalf of any
other person or entity by whom Executive might subsequently be employed or
otherwise associated or affiliated with, any Confidential Information.
"Confidential Information" shall include information (not readily compiled from
publicly available sources) which is made available to Executive or obtained by
Executive during the course of his employment relating or pertaining to the
Company's trade secrets, such as financial information, technical information
and/or business plans and strategies. Executive agrees to cooperate with the
Company to maintain the secrecy of and limit the use of such Confidential
Information.
7.2 EXCLUSIVITY. During the term of Executive's employment under this
Agreement, Executive 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
such period of time, be engaged in any business, enterprise or undertaking other
than employment by the Company except for such other outside activities that do
not detract from the full discharge of Executive's duties hereunder.
7.3 ENFORCEMENT. Company and Executive recognize and acknowledge that
Executive is employed under this Agreement as an Executive in a position where
Executive will be rendering personal services of a special, unique, unusual and
extraordinary character requiring extraordinary ingenuity and effort by
Executive. Executive hereby acknowledges that compliance with the provisions of
Article 7 of the Agreement 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, Executive agrees that the Company 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.
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 Executive
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, Executive shall deliver promptly to the Company
all such Company Materials.
9. NO ASSIGNMENT. This Agreement shall be binding upon the Company and
Executive. Neither Company nor Executive is permitted to assign any rights or
duties under this Agreement. In the event Company assigns any of its rights or
duties under this Agreement, Executive shall have the right, in Executive's sole
and absolute discretion, to elect to treat such action as a termination of this
Agreement without cause by Company as provided for in Section 5.3 ("Termination
Election"). However, Executive agrees to make a Termination Election within
thirty (30) days from receipt of written notification by the Company that a
decision has been made to assign this Agreement, provided that Company delivers
such a notice to Executive. If no such assignment decision notice is delivered
by Company to Executive, Executive may make a Termination Election at any time
by delivering written notice of his Termination Election to Company. In the
event Executive makes a Termination Election under this Article 9, Company shall
be deemed to have terminated this Agreement without cause under Section 5.3, the
termination shall be effective thirty (30) days after the date Executive
delivers his notice of Termination Election to Company, and Company shall
compensate Executive as provided in Section 5.3.
10. NOTICES. Any notices required or permitted to be sent under this
Agreement shall be delivered by hand or mailed by registered or certified mail,
return receipt requested, and addressed as follows:
If to Company:
Xxxxx X. Xxxxxxxx, President
Integrated Healthcare Holdings, Inc
0000 X. Xxxxxx Xxx.
Xxxxx Xxx, XX. 00000
If to Executive:
Xxxxx Xxxxxx
Integrated Healthcare Holdings, Inc
0000 X. Xxxxxx Xxx.
Xxxxx Xxx, XX. 00000
Either party may change its address for receiving notices by giving
written notice to the other party.
11. MISCELLANEOUS PROVISIONS.
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11.1 ARBITRABLE CLAIMS. To the fullest extent permitted by law, all
disputes between Executive (and his attorneys, successors, and assigns) and
Company (and its affiliates, shareholders, directors, officers, employees,
agents, successors, attorneys, and assigns) relating in any manner whatsoever to
the employment or termination of Executive's employment, including, without
limitation, all disputes arising under this Agreement, ("Arbitrable Claims")
shall be resolved by arbitration. All persons and entities specified in the
preceding sentence (other than Company and Executive) shall be considered
third-party beneficiaries of the rights and obligations created by this Section
11.1 on "Arbitrable Claims". Arbitrable Claims shall include, but are not
limited to, contract (express of implied) and tort claims of all kinds, as well
as all claims based on any federal, state, or local law, statute, or regulation,
excepting only claims under applicable workers' compensation law and
unemployment insurance claims. By way of example and not in limitation of the
foregoing, Arbitrable Claims shall include (to the fullest extent permitted by
law) any claims arising under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, and the
California Fair Employment and Housing Act, as well as any claims asserting
wrongful termination, harassment, breach of contract, breach of covenant of good
faith and fair dealing, negligent or intentional infliction of emotional
distress, negligent or intentional misrepresentation, negligent or intentional
interference with contract or prospective economic advantage, defamation,
invasion of privacy, and claims related to disability. The parties consent to
jurisdiction and venue in Orange County, California.
11.1.1 PROCEDURE. Arbitration of Arbitrable Claims shall be through
Judicial Arbitration and Mediation Service (JAMS) in Orange County, California,
in accordance with JAMS' rules and regulations then in effect. Arbitration shall
be final and binding upon the parties and shall be the exclusive remedy for all
Arbitrable Claims. Either party may bring an action in court to compel
arbitration under this Agreement and to enforce an arbitration award. Otherwise,
neither party shall initiate or prosecute any lawsuit or administrative action
in any way related to any Arbitrable Claim. Notwithstanding the foregoing, and
only to the extent allowed by law, either party may, at its option, seek
injunctive relief pursuant to section 1281.8 of the California Code of Civil
Procedure. All arbitration hearings under this Agreement shall be conducted in
Orange County, California. In any arbitration proceeding under this Agreement,
the parties shall have the same rights to discovery as would be available in a
proceeding in California Superior Court, as provided in section 1283.05 of the
California Code of Civil Procedure. The decision of the arbitrator shall be in
writing and shall include a statement of the essential conclusions and findings
upon which the decision is based. The interpretation and enforcement of this
agreement to arbitrate shall be governed by the California Arbitration Act.
THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN
REGARD TO ARBITRABLE CLAIMS, INCLUDING WITHOUT LIMITATION ANY RIGHT TO TRIAL BY
JURY AS TO THE MAKING, EXISTENCE, VALIDITY, OR ENFORCEABILITY OF THE AGREEMENT
TO ARBITRATE.
Company's Initials: Executive's Initials:
/s/SRB /s/JK
11.1.2 ARBITRATOR SELECTION AND AUTHORITY. All disputes involving
Arbitrable Claims shall be decided by a single arbitrator. The arbitrator shall
be selected by mutual agreement of the parties within thirty (30) days of the
effective date of the notice initiating the arbitration. If the parties cannot
agree on an arbitrator, then the complaining party shall notify JAMS and request
selection of an arbitrator in accordance with JAMS' rules. The arbitrator shall
have only such authority to award equitable relief, damages, costs and fees as a
court would have for the particular claim(s) asserted. The fees of the
arbitrator shall be paid equally by the parties. The parties shall each be
responsible for whatever costs they would have otherwise incurred had their
claims been filed in court. If the allocation of responsibility for payment of
the arbitrator's fees would render the obligation to arbitrate unenforceable,
the parties authorize the arbitrator to modify the allocation as necessary to
preserve enforceability. The arbitrator shall have exclusive authority to
resolve all Arbitrable Claims, including, but not limited to, whether any
particular claim is Arbitrable and whether all or any part of this Agreement is
void or unenforceable.
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11.1.3 CONTINUING OBLIGATIONS. The rights and obligations of Executive
and Company set forth in this Section 11.1 on "Arbitrable Claims" shall survive
the termination of Executive's employment and the expiration of this Agreement.
11.411.2 ATTORNEYS' FEES. In any action or arbitration to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
recover its reasonable attorneys' fees and costs of suit.
11.3 SEVERABLE PROVISIONS. The provisions of this Agreement are
severable, and if any provision shall be determined to be unenforceable, in
whole or in part, the remaining provisions shall nevertheless be binding and
enforceable.
11.4 NON-WAIVER. The failure of either party to insist on strict
compliance with any of the terms and conditions of this Agreement by the other
party shall not be deemed a waiver of that term or condition, nor shall any
waiver or relinquishment of any right or power at any one time or times be
deemed a waiver or relinquishment of that right or power for all or any other
times. 11.5 ENTIRE AGREEMENT. This Agreement and those documents expressly
referred to herein embody the complete agreement and understanding among the
parties and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
11.6 CONTROLLING LAW. This Agreement shall be construed and interpreted
in accordance with California law.
11.7 AMENDMENT. This Agreement shall not be amended, released,
discharged, changed or modified in any manner, except by an instrument signed by
the parties.
11.8 PHOTOCOPIES AND COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original and together shall
constitute one complete instrument. Photocopies and facsimiles of such signed
counterparts may be used in lieu of the originals for any purpose.
11.9 NO STRICT CONSTRUCTION. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
11.10 AUTHORITY. Any person or entity purporting to have the authority
to enter into this Agreement on behalf of or for the benefit of any other person
or entity hereby warrants that it has such authority. The parties agree to sign
any forms or documents necessary to effectuate their intent under this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
Integrated Healthcare Holdings, Inc.
a Nevada Corporation
By:/s/Xxxxx Xxxxx
Dated: September 7, 2007
Chief Financial Officer
Dated: September 7, 2007 By:/s/Xxxxx Xxxxxx
Executive
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