Assignment of Warrant Agreement
Page 33 of 35
among Xxxx XxXxx and Americare Management, Inc.
Exhibit 10.12
EMPLOYMENT AGREEMENT
BETWEEN
THE PHOENIX GROUP CORPORATION
AND
Xxxx XxXxx
THIS AGREEMENT made and entered into as of the 2nd day of
May, 2002 by and between The Phoenix Group Corporation, a
Delaware corporation (the "Corporation"), and Xxxx XxXxx 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 and managing
(i) home health companies and agencies, (ii) 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) 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 Chief Executive
Officer, and shall have the title of Senior Vice-President of the
Corporation.
(B) Executive shall serve the Corporation as Vice
President and Director of Operations of InterLink Home Health
Care, Inc. At all times, Executive shall report to, discharge
his duties in consultation with and be under the direct
supervision and control of the Company's Chief Operating Officer,
shall perform such 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
Company's Board of Directors may from time to time determine, and
shall comply with all applicable provisions of the Corporation's
certificate of incorporation. Executive shall, subject to the
direction of the Company's Chief Operating Officer, have
authority to formulate policies for and oversee all aspects of
InterLink Home Health Care, Inc. 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
Company's Chief Operating Officer, Executive may hire and
terminate the employment of any other employee of InterLink Home
Health Care, Inc., or of any of their divisions, subsidiaries or
affiliates, who is under his jurisdiction.
(C) During the Extended Term, Executive shall not be
required to work more than thirty (30) hours per week at the sole
discretion of the Executive.
3. Term. The term of this Agreement shall be for a period
of eight (8) calendar months commencing May 2, 2002 or until the
Promissory Note from Americare Management, Inc. is paid in full,
whichever event occurs later (such term is hereinafter referred
to as the Original Term); but in any event the Term shall be
extended until the Promissory Note is paid in full, 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 eight month Term, the Agreement
shall automatically be renewed for a period of sixteen (16)
calendar months or four hundred eighty-seven (487) calendar
(beginning January 3, 2003) (such term is hereinafter referred to
as the Extended Term); provided, that the Corporation may
terminate the Agreement during the Extended Term by providing
ninety (90) days advance written notice to the Executive.
Together the Original and Extended Terms may be referred to as
the Term.
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 One Hundred Eighty Thousand dollars ($180,000.00)
during the Original Term. The Corporation's Chief Executive
Officer may increase the Executive's annual base salary effective
as of any anniversary date of this Agreement in such amounts as
the Chief Executive Officer deems appropriate in his sole
discretion.
(B) Extended Term Salary. Executive shall be paid a
gross monthly salary of $6,250.00 per month during the Extended
Term.
(C) Stock Grant. Upon the execution of this
Agreement, Executive shall receive a one-time Compensatory grant
of One Million Six Hundred and Fifty Thousand (1,650,000) Common
Shares of the Company, to be registered, at no cost to
Executive, upon the Corporation's filing of its next registration
statement with the Securities and Exchange Commission.
(D) Executive's Incentive Compensation. Executive may
be entitled to such bonuses and incentive compensation as may be
determined by the Corporation's Chief Executive Officer in his
sole discretion. Each such bonus or incentive compensation may
be paid in cash or Shares or combination thereof as the Chief
Executive Officer shall determine in his sole discretion. Such
incentive compensation may also include options to purchase
shares of the Corporation's Common Stock pursuant to a plan
established by the Corporation's Board of Directors.
(E) Automobile Allowance. Executive shall be entitled
to an automobile allowance in the amount of $850 per month.
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. Corporation shall pay the insurance premium for
health insurance and dental insurance for Executive and his
immediate family during the Original and Extended Terms. Any
expense associated with coverage for Executive's dependents may
be submitted for reimbursement.
6. Vacation, Holidays, etc. Executive shall be entitled
to four (4) weeks (20 work days) vacation with pay (or such
greater length of time as may be approved from time to time by
the Corporation's Chief Executive Officer) 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.
Upon execution of this agreement, Executive is deemed to have
thirty -five (35) days of vacation time with pay available for
use and that can be carried forward and may be paid in cash as
requested
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:
(i) Death of the Executive;
(ii) 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;
(iii) Just Cause, which is defined herein to
mean: (a) Executive's gross negligence in performing his duties
hereunder; (b) Executive's willful failure or refusal to perform
his duties hereunder; (c) Executive's intentional wrongful act or
wrongful failure to act that materially and adversely affects the
business affairs of the Corporation; or (d) 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
Delaware, or other breach of any of his quasi-fiduciary duties to
the Corporation in violation of the applicable corporate laws of
the State of Delaware (including, but not limited to, the duties
of due care, loyalty, and fair dealing). During the Original
Term, "just cause" shall be deemed to be only the events set
forth in (a), (c), and (d) above as finally determined by binding
arbitration, but during the Extended Term, "just cause" shall be
defined in (a) through (d) above and as determined by the
Corporation.
(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:
(i) 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; (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; and
(iii) 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, expense
reimbursements, and other arrangements that, by their terms,
apply.
(ii) 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; and (iii)
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 expense
reimbursements, and other arrangements that, by their terms,
apply.
(iii) 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 or for the current year (pro-
rated to the effective date of termination; 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, expense
reimbursements, and other arrangements that, by their terms,
apply. 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.
(iv) Without Cause. Until the Promissory Note is
paid in full, Executive cannot be terminated without cause. If
during the Extended 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) all other payment and
benefits that Executive is eligible to receive, but have not yet
been received as of the effective date of termination. 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.
(v) 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.
(vi) Severance Payment. Upon Executive's
termination separation from employment with Corporation,
Corporation shall pay Executive the sum of $100,000 as a
severance payment the following amounts as a Severance Payment:
(aa) If Executive separates during the
Original Term, then Corporation shall pay to Executive the amount
of $100,000.00.
(bb) If Executive separates during the
Extended Term, then Corporation shall pay to Execute a sum equal
to the number of remaining days of the Extended Term (calculated
on a daily basis of 487 total calendar days in the Extended Term)
multiplied by $205.34 per calendar day remaining in the Extended
Term.
(vii) Until the Promissory Note is paid in
full, Executive shall not be required by Corporation to relocate
outside of Tarrant County, Texas or perform substantial
employment services outside of Tarrant County, Texas, reasonable
travel excepted.
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, 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.
(b) Acknowledgments. 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; (iii) the Corporation would sustain irreparable loss
and damage if Executive were to breach any of such covenants; and
(iv) 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 and for three (3)
years after Executive's employment is terminated 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 material in Executive's possession
or control, which is of a confidential matter relating to the
Corporation's business. These provisions shall survive the
termination or expiration of this Agreement.
(d) Non-Competition.
(i) Executive hereby agrees that during the Term
and for two (2) years 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, (i) act as a director,
officer, manager, shareholder, partner, member, advisor,
executive or consultant to any business 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.
(ii) Executive hereby agrees that during the Term
and for two (2) 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 at the
time of termination of the Executive's employment by the
Corporation.
(iii) Executive hereby agrees that during the
Term and for two (2) 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 Arbitration. 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 arbitrator 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.
(g) Provisions Null and Void. In the event Americare
Management, Inc. is in default on the Promissory Note to
Executive, the provisions contained in this Section 9 will be
deemed to be null and void.
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 and its subsidiaries specifically
including InterLink Home Health Care and its subsidiaries. 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 of
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 of 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. Dispute Resolution. Other than any claims for equitable
relief, all controversies, claims and disputes arising in
connection with this Agreement shall be settled by arbitration,
conducted in Dallas, Texas in accordance with the rules and
procedures promulgated by the American Arbitration Association,
before one arbitrator. The arbitrator shall be authorized to
award the prevailing party its reasonable expenses of such
arbitration, including attorneys' fees. The decision of the
arbitrator will be final and binding on the parties. Either
party may bring an action in any court of competent jurisdiction
to compel arbitration under this Agreement and to enforce an
arbitrator's award. In the event of any court action brought to
enforce this agreement to arbitrate, the prevailing party shall
be entitled to recover its reasonable expenses of such court
action, including attorneys' fees.
13. 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: To
Corporation:
Xxxx XxXxx The
Phoenix Group Corporation
000 Xxxx Xxxx Xxxxxx Xxxx:
Chief Executive Officer
Xxxxx, Xxxxx 00000 000 Xxxx
Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000
14. Securities Law Compliance. The Executive represents
and agrees that he is acquiring any Shares he receives under this
Agreement for his own account and not with the intention
reselling or distributing the Shares, 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.
15. 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.
16. Governing Law. This Agreement is performable in Dallas
County, Texas The parties hereto consent to jurisdiction.
17. 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.
18. 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.
19. Successors and Assignors. This Agreement shall be
binding upon, and shall inure to the benefit of, the Corporation
and Executive and their respective heirs, personal and legal
representatives, 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.
IN WITNESS WHEREOF, the Corporation has hereunder to cause
this Agreement to be executed by its duly authorized offices and
seals to be hereunto affixed, and Executive has hereunto set his
hand and seal, all being done in duplicate originals delivered to
each party as of the day and year first above written.
Xxxx XxXxx The
Phoenix Group Corporation
/s/ Xxxx XxXxx /s/ Xxxxxx
X. Xxxx
____________________________________
______________________________
______
Xxxx XxXxx By
Xxxxxx X. Xxxx in his capacity
as Chairman of The Phoenix
Group Corporation
The performance of this Agreement is guaranteed by Americare
Management, Inc.
Americare Management, Inc.
/s/ Xxxxxx X. Xxxx
____________________________________
By Xxxxxx X. Xxxx in his capacity as Chairman of
Americare Management, Inc.
