Exhibit 10.22
EMPLOYMENT AGREEMENT
This employment agreement ("Agreement") is entered into this 21st day of
March, 2005 to be effective on March 21, 2005, the "Commencement Date." The
Agreement is entered into between Integrated Healthcare Holding, Inc., a Nevada
Corporation ("Company") and Xxxxx Xxxxx ("Executive").
RECITALS
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 Vice President and Chief Accounting Officer of Company, subject to the
terms and conditions set forth below.
AGREEMENT
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. Term of Employment. The Company hereby employs Executive, and Executive
hereby accepts employment with the Company, for a period of (3) year commencing
on the "Commencement Date" and ending on March 20, 2008, unless terminated
earlier in accordance with the provisions of Section 5 below.
2. Position and Duties.
"Executive" shall serve as the Vice President of Finance and Chief Accounting
Officer. Executive's principal duties and responsibilities shall be to serve as
the primary Executive charged with responsibility for the accounting functions
of the Company's hospital system, including its compliance with the laws and
regulations regarding disclosures required by the Securities and Exchange Act of
1934 and Sarbanes/Oxley. He shall report to the Chief Financial Officer.
Further, it is anticipated that, within six (6) months of the Commencement Date,
and at a time mutually agreeable to the Company and the Executive, the Executive
will become the Company's Chief Financial Officer, on the same terms and
conditions as provided herein. . 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 the Company's Business and interests in a manner consistent with Executive's
title and office and the 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,
through the third anniversary hereof, of Two Hundred Fifty Thousand Dollars
($250,000) per annum. The base salary shall be payable in bi-weekly or other
periodic installments in accordance with the Company's payroll procedures in
effect from time to time. The base salary has been expressed in terms of a gross
amount, and the Company is or may be required to withhold from such gross amount
deductions in respect of federal, state or local income taxes, FICA and the
like. 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 shall receive an annual bonus during the term of his
employment under this Agreement as determined by the Board of Directors. Such
bonus shall be payable to Executive no later than 60 days after the end of each
calendar year.
4.3 Stock Options. The Company will grant Executive, effective as of the
Commencement Date, an option to purchase One Hundred Fifty Thousand shares of
the company's class A common stock, .001 value per share, on the same terms and
conditions as provided to other Executives who received options with a strike
price related to the closing of the Company's acquisition of the four (4) Orange
County hospitals divested by Xxxxx Healthcare System. This option will be for a
period of 3 consecutive years and will vest at the rate of 33% on each
anniversary of this Agreement. Executive shall receive additional stock options
annually if certain Company goals are met. Additional information regarding
Company's stock option plan shall be provided.
4.4 Medical Insurance. 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 and life insurance plan and any pension or retirement plan maintained by
the Company for similarly-situated senior executives.
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4.7 Automobile Allowance. Executive shall receive an automobile and
insurance allowance of $800.00 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 Section 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 date of termination.
5.2 By Executive for Cause. Executive may resign from his employment with
Company for "cause." For purposes of this Section 5.2, "cause" shall mean (i)
the removal of Executive as Vice President, Finance and 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 Chief Financial
Officer, or Executive's successor supervisor, once he becomes the Chief
Financial Officer, (iv) any material breach of this agreement by Company, (v)
the dissolution, or bankruptcy of the company, (vi) any person, entity or group
of affiliated persons and entities having more than 50% of the outstanding
voting securities of the Company which sells, transfers, disposes or otherwise
relinquishes their interest in the Company, If Executive wishes to resign after
a change of control he must exercise such right within 10 days after written
notification of such change of control. If Executive resigns 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 12 months, but will
not accrue additional Paid Time Off, vacation or other sick pay benefits, if
Executive signs the Severance Agreement attached as exhibit A, within thirty
(30) days of his separation date.
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5.3 By Company without Cause. The "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, but will not accrue additional Paid Time Off, vacation or
other sick pay benefits, if Executive signs the Severance Agreement attached as
exhibit A, within thirty (30) days of his separation date.
Employer's Initials: Employee's Initials:
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5.4. By Executive without Cause. Executive may resign without cause 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 year. 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 separation. Executive's
separation from Company on account of death or disability shall not constitute a
termination for cause by Company under this Agreement.
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.
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7. Confidentiality and Exclusivity.
7.1 Confidentiality. During the term of Executive's employment under 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
Section 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.
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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
discretion, to elect to treat such action as a termination of this Agreement
without cause by Company as provided for in Section 5.3. However, Executive
agrees to exercise such right within thirty (30) days from receipt of written
notification by the Company that a decision has been made to assign this
Agreement. In the event Executive exercises his rights under this paragraph,
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
000 Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxx Xxxx, XX 00000
If to Executive:
Xxxxx Xxxxx
0000 X. Xxxxxx Xxxxxx
Xxxxx Xxx, XX.
Either party may change its address for receiving notices by giving
written notice to the other party
11. Miscellaneous Provisions.
11.1 Arbitral 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, ("Arbitral 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 on
Arbitration. Arbitral 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, Arbitral
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.
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Procedure. Arbitration of Arbitral 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
Arbitral 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 Arbitral 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:
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11.2 Arbitrator Selection and Authority. All disputes involving Arbitral
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 Arbitral Claims,
including, but not limited to, whether any particular claim is arbitral and
whether all or any part of this Agreement is void or unenforceable.
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11.3 Continuing Obligations. The rights and obligations of Executive and
Company set forth in this Section on Arbitration shall survive the termination
of Executive's employment and the expiration of this Agreement.
11.4 Attorneys' Fees. In the event of a dispute relating to this
Agreement, the prevailing party shall be entitled to recover its reasonable
legal fees and costs.
11.5 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.
11.6 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. 11.7 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.
11.8 Controlling Law. This Agreement shall be construed and interpreted in
accordance with California law.
11.9 Amendment. This Agreement shall not be amended, released, discharged,
changed or modified in any manner, except by an instrument signed by the
parties.
11.10 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.
11.11 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.
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11.12 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.
Dated: March 21, 2005 Integrated Healthcare Holdings, Inc.
A Nevada Corporation
By: /s/ Xxxxx Xxxxx
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Xxxxx X. Xxxxx
Dated: March 21, 2005 By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
