EMPLOYMENT AGREEMENT BETWEEN PHYHEALTH CORPORATION AND ROBERT TRINKA, EFFECTIVE ON DATE OF SPINOFF
EXHIBIT
10.14
BETWEEN
PHYHEALTH
CORPORATION
AND
XXXXXX
XXXXXX, EFFECTIVE ON DATE OF SPINOFF
1
This
Employment Agreement (this “Agreement”) is made as of November 30, 2009 by and
between Phyhealth Corporation (“Phyhealth”) (the “Corporation”), a Delaware
corporation, and Xxxxxx X. Xxxxxx (the “Executive”).
Recitals
WHEREAS,
the Corporation is duly organized and validly existing as a corporation in good
standing under the laws of the State of Delaware. The Corporation is
engaged in the business of developing and operating fully integrated,
community-based health plans in partnership with physicians. Phyhealth Plans are
Health Maintenance Organizations (“HMO”) and physician networks that are
designed to deliver high quality, affordable healthcare in selected
communities.
The
Corporation’s business model integrates all aspects of the delivery and
financing of healthcare, including providing medical professional liability
insurance through Physhield Insurance Exchange (“Physhield”), Phyhealth’s
exclusive risk retention group. Physhield is managed by Phyhealth Underwriters,
Inc., (“Underwriters”) a subsidiary of Phyhealth. The Corporation may also
engage in other related and affiliated businesses.
WHEREAS,
the Corporation has determined that it is in the best interests of management
effectiveness for the Corporation to enter into an agreement with its President,
Chief Executive Officer and Chairman of the Board.
WHEREAS,
in order to satisfy management continuity concerns of the Corporation’s
stockholders, lenders, financial promoters, and physician participants, a
long-term employment contract with the Executive is critical to the
Corporation.
WHEREAS,
the Executive has specialized expertise in the healthcare industry in which the
Corporation is engaged and has diligently worked in pre-incorporation and
incorporating phases as a founder of the Corporation. Executive has
devoted considerable time, effort and resource, which has been invaluable to the
creation and initial operations of the Corporation, foregoing other
opportunities available to him. The Corporation finds the corporate
management experience and healthcare financing knowledge of the Executive to be
essential to the success of the Corporation.
WHEREAS,
the Corporation desires to engage the Executive, and the Executive desires to be
so engaged, on the terms and conditions set forth below.
Agreement
Now
therefore, in consideration of the Recitals, which shall be deemed to be a
substantive part of this Agreement, and the mutual covenants, promises,
agreements, representations, hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto do hereby covenant, promise, agree, represent and warrant as
follows:
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1.
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Employment.
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1.1.
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The
Corporation hereby employs the Executive in the position of President,
Chief Executive Officer and Chairman of the Board for the Corporation and
to render services for and on behalf of the Corporation in that position,
and the Executive shall render such other and further services for and on
behalf of the Corporation as may be assigned reasonably, from
time-to-time, to the Executive by the Board of Directors of the
Corporation (the “Services”). The Executive hereby accepts such
employment with the Corporation and agrees to render the Services for and
on behalf of the Corporation on the terms and conditions set forth in this
Agreement. During the term of this Agreement, the Executive
shall report directly to the Board of Directors of the
Corporation. The power to direct, control and supervise the
Services to be performed, the means and manner of performing the Services
and the time for performing the Services shall be exercised by the Board
of Directors, provided, however, that the Board of Directors shall not
impose any employment constraints or duties which would require the
Executive to violate any law, statute, ordinance, rule or regulation now
or hereinafter in effect.
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1.2.
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The
base salary compensation for the Executive shall be $150,000 per year,
payable in regular installments in accordance with the Corporation’s
general payroll practices. The Executive’s base salary compensation will
be increased to $250,000 per year, payable in regular installments as
above, effective on January 1st
of the year following the fiscal year in which the Corporation either
receives $4,000,000 in revenue or the date the Corporation has
raised a total of $8,000,000 in equity, excluding capital raised
exclusively to fund the required regulatory capital surplus of a Phyhealth
Plan HMO and capital raised prior to the signing of this Agreement (the
“Triggering Event”). The Executive’s base salary compensation shall be
further increased to $500,000 per year, payable in regular installments as
above, effective on January 1st
of the year following the fiscal year in which the Corporation’s Earnings
Before Interest,
Taxes, Depreciation and Amortization (EBITDA) and before any costs,
expenses or amounts paid by Corporation with respect to mergers,
acquisitions or related transactions and before any other expenses outside
the ordinary course of business, by way of example and not limitation,
regulatory or legal settlements, fines, penalties, extraordinary purchases
or other payments, are greater than $8,000,000. Subsequently, the
Executive’s base salary compensation shall be increased each year
effective January 1st
by the Compensation Committee of the Corporation’s Board of Directors, as
shall be determined by the Compensation Committee; however, the
compensation may not be reduced below the compensation paid (excluding
bonus) in the previous year without the mutual written consent of the
Executive, unless there are not funds in the Corporation available to pay
such amounts.
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1.3.
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In
addition to the base salary compensation, the Executive shall receive
annual incentive bonus compensation equal to: (i) one quarter of one
percent (.25%) of annual Gross Revenues (GR) plus (ii) one quarter of one
percent (.25%) of the annual growth in Gross Revenues (Bonus Year Gross
Revenues less Prior Year Gross Revenues); plus (iii) five percent (5%) of
Net Income (NI). Net
Income (NI) for purposes of this Subsection 1.3 shall mean the equivalent
of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
and before any costs, expenses or amounts paid by the Corporation with
respect to mergers, acquisitions or related transactions and before any
other expenses outside the ordinary course of business, by way of example
and not limitation, regulatory or legal settlements, fines, penalties,
extraordinary purchases or other payments. The formula for
calculation of the annual incentive bonus is: [.0025GR + .0025(Bonus Year
GR less Prior Year GR) + .05NI] where GR and NI are greater than or equal
to zero. The annual incentive bonus will be calculated based on the
audited consolidated
financial results
of the Corporation, its subsidiaries, affiliates and joint
ventures, excluding the income or loss of any entity accrued prior to the
date it became a subsidiary, affiliate or joint venture or is merged into
or consolidated with the Corporation as of December 31st
of each year (or end of other fiscal year, if different than the calendar
year). The Executive’s incentive bonus is considered earned the
earlier of December 31st
of the bonus year or the Executive’s termination date, and shall be paid
within fifteen (15) days of receipt by the Corporation of its prior year
audited financial statements. The Corporation may at its option
pay the annual incentive bonus compensation to the Executive either in
cash or in restricted common stock of the Corporation, except that the
Corporation shall pay to the Executive the minimum amount in cash equal to
an estimate of the applicable federal and state taxes owed by the
Executive based on the total amount of the
bonus.
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1.4.
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The
Executive shall be reimbursed by Corporation for all reasonable business,
promotional, travel and entertainment expenses incurred or paid by
Executive in the course of carrying out the normal duties and
responsibilities of Executive’s position. Reimbursement is contingent upon
Executive furnishing to Corporation in a timely fashion the appropriate
documentation required by the Internal Revenue Code in connection with
such expenses and shall furnish such other documentation and accounting as
the Corporation may reasonably
request.
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1.5.
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The
Corporation shall provide to the Executive life insurance payable to
Executive’s designated beneficiary or beneficiaries in an amount equal to
two times Executive’s Base Compensation provided above or one million
dollars, whichever is greater, plus one million dollars in supplemental
accident insurance coverage on a per commercial airline trip basis. The
Executive life insurance benefit shall take effect on January 1st
of the year following the Triggering Event described in Subsection 1.2
above.
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1.6.
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The
Corporation shall provide to the Executive disability income insurance for
the Executive’s benefit, which insurance shall provide for sixty percent
(60%) of Executive’s base compensation, commencing after ninety (90) days
of total disability as defined in the disability income insurance plan.
Such disability income insurance shall continue so long as Executive
continues to be totally disabled to the extent that he is unable to
continue his Services, except that such disability benefits shall end when
Executive attains the age of sixty-six (66). Notwithstanding
anything contained herein to the contrary, in the event of a single period
of total disability due to the results of a sickness or injury, Executive
shall be compensated at his full rate of pay, less customary employment
deductions therefrom, for no less than ninety (90) days from the date of
the onset of total disability, and at sixty percent (60%) of Executive’s
base compensation, less customary employment deductions therefrom,
commencing after such ninety (90) day period of total disability, when the
disability income insurance commences as provided herein. As
used in this Agreement, “total disability" shall have the same meaning as
contained in the disability insurance policy owned by the Corporation. In
the event that no such disability insurance policy exists, then the
Corporation shall provide the benefits outlined above. The "total
disability" of the Executive, for purposes of this Agreement, shall mean
an illness, injury or other physical or mental condition of the Executive
which results in Executive’s inability to perform, for a continuous period
of ninety (90) days or longer, substantially all of the obligations he
performed in his capacity as an executive employee of the Corporation and
to the extent he was performing those obligations immediately prior to the
commencement of such condition. If the Corporation and the
Executive are unable to agree whether Executive is disabled within the
meaning of this Agreement, the issue shall be submitted to and settled by
binding arbitration as provided for herein. This disability income
insurance benefit shall take effect on January 1st
of the year following the Triggering
Event.
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1.7.
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Executive
shall be entitled to a paid time off (“PTO”) accrual of no less than
twenty-five (25) days of PTO (including fifteen (15) vacation days and ten
(10) sick leave days during each year of the Term of this Agreement and
any renewal thereof, until this Agreement is
terminated.
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1.8.
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The
Services will be performed primarily at Corporation’s executive offices,
which are established in Miami-Dade County, Florida. If Corporation (i)
establishes its headquarters; or, (ii) requires the Executive to perform
Services on a regular basis, more than 50 miles from Executive’s residence
in Miami-Dade County, Florida, then at Executive’s election: (y)
Corporation shall reimburse Executive for all reasonable and customary
relocation expenses (z) Executive may treat such relocation as a Good
Reason as described below.
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1.9.
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Though
no formal benefits program currently exists for employees of the
Corporation, Executive shall be eligible to participate in all benefits
programs available to employees and/or officers, directors and managers,
including medical, health, disability and life insurance, paid sick leave,
deferred compensation, 401k and other retirement plans, and other benefits
as may be authorized by the Corporation and its Board of Directors from
time-to-time.
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1.10.
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The
Corporation shall obtain and maintain the customary directors and
officers’ liability insurance coverage covering the Executive at terms and
premium rates reasonably satisfactory to the Corporation’s Board of
Directors.
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1.11.
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All
amounts payable to the Executive as compensation hereunder shall be
subject to all required and customary withholding by the
Corporation.
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2.
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Term. The
term of this Agreement shall be for a period commencing on __________
(“Effective Date”) and ending ______________ (“Term”). Thereafter, this
Agreement shall be automatically renewed for an additional five (5) year
period from ______________ to _____________ unless forty-five (45) days
prior to the expiration of the Term or renewal, written notice not to
renew is served on the Executive by the Corporation. Such
notice not to renew by the Corporation shall be considered a termination
without cause, to which the benefits provided for in Subsection 3.4 hereof
shall apply.
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3.
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Termination
of Employment. During the Term hereof, Executive may not be
terminated without cause. Notwithstanding anything stated
herein to the contrary, the following provisions shall apply under the
conditions stated therein:
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3.1.
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In
the event of Executive’s death prior to his retirement or earlier
termination of employment hereunder, Executive’s employment by Corporation
shall terminate immediately upon the date of his death, provided that his
widow, designated beneficiaries, and/or estate shall be entitled to
receive any pension or other death benefits to which they are otherwise
entitled under the plans and programs of the Corporation applicable to
Executive at the time of his death. The Executive’s estate
shall not be entitled to any other compensation under this Agreement;
provided, however, that Executive’s estate shall receive the accrued but
unused paid time off as provided in Subsection 1.7 hereof, the accrued but
unpaid base salary compensation as provided in Subsection 1.2 hereof, and
the accrued but unpaid annual incentive bonus compensation as provided in
Subsection 1.3 hereof.
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3.2.
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If,
during the Term of this Agreement or any renewal thereof, in the opinion
of the Corporation, the Executive, because of physical or mental illness
or incapacity as determined by a qualified physician mutually chosen by
Corporation and Executive based upon a medical examination and written
evaluation thereof, shall become unable to perform the essential functions
of his position pursuant to this Agreement for a period of one hundred and
twenty (120) days in the aggregate during any twelve (12)-month period,
with or without reasonable accommodation, Corporation may, upon at least
ten (10) days prior written notice given at any time after the expiration
of such one hundred and twenty (120) day period, notify Executive of its
intention to terminate this Agreement as of the date set forth in the
notice. In case of such termination, Executive shall be entitled to
receive salary, accrued benefits, and reimbursable expenses owing to
Executive through the date of termination. Corporation shall
have no further obligation or liability to Executive; provided, however,
that Executive shall receive (i) the disability benefits provided in
Subsection 1.6 hereof and (ii) to the extent such benefits are available
under the respective insurance agreements as a benefit to former
employees, the benefits provided by Corporation as in the event of
Executive’s disability and the termination of this Agreement as provided
herein.
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3.3.
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By
a majority vote of the entire Board of Directors of the Corporation at
which the Executive shall be entitled to appear and provide relevant
information, the Corporation shall be entitled to terminate the
Executive’s employment immediately for cause as defined below at any time
during the Term of this Agreement or any renewal thereof. Upon
such termination, Corporation shall be released from any and all further
obligations under this Agreement, except for accrued salary and benefits
owing to Executive through the termination date. For purposes of this
Agreement, the Corporation shall have cause to terminate Executive’s
employment upon the occurrence of any of the following during the Term of
this Agreement or any renewal
thereof:
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3.3.1
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The
Executive abuses alcohol or other substances while performing his Services
for the Corporation which abuse negatively affects the performance of this
duties, such abuse is habitual, and the Executive fails to seek competent
abuse counseling within 30 days of written notice by the Board of
Directors;
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3.3.2
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The
Executive is convicted of a felony for any crime involving the moral
turpitude arising out of his Services for the
Corporation;
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3.3.3
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The
Executive is convicted of a felony for engaging in fraudulent conduct,
theft or embezzlement in connection with his Services for Corporation;
and
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3.3.4
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Any
material breach of this Agreement or Corporation Bylaws, and such material
breach shall continue for a period of thirty (30) working days after
written notice of the alleged breach is provided to the Executive by the
Board of Directors.
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3.4.
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Except
as provided in Subsection 3.2 above, during any renewal hereof, but only
after the expiration of the Term of this Agreement, upon a majority vote
of the entire Board of Directors of the Corporation, Corporation shall be
entitled to terminate Executive’s employment without cause at any time
effective as of the last day of any month, upon no less than forty-five
(45) days prior written notice. In the event of a without cause
termination as provided in this subsection, Corporation reserves the right
to discontinue Executive’s duties pursuant to this Agreement, and require
his departure from Corporation premises, commencing with the date of
delivery of the written notice as provided herein through the remainder of
the notice period. Notwithstanding the foregoing, Executive
shall be permitted a reasonable time, during the business hours of
Corporation’s executive and administrative offices, to remove his personal
belongings from Corporation premises. If Executive’s employment is so
terminated prior to the expiration of the Term of this Agreement without
cause or during any renewal term thereof, the following provisions shall
apply:
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3.4.1
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Corporation
shall be obligated to pay to Executive, as liquidated damages, an amount
equal to sixty (60) months of Executive’s annual compensation from
Corporation, based upon Executive’s highest annual compensation (including
base compensation and bonuses) for any calendar year prior to the
effective date of termination or the rate of compensation (including base
compensation and bonuses) in effect upon the effective date of
termination, whichever is greater; and to provide to Executive the
benefits as hereinafter defined. If Executive is entitled to termination
pay under any termination pay policy of Corporation applicable to him, the
amount of payment to Executive shall be the greater of (i) the amount
computed as provided above in this Subsection 3.4.1, or (ii) the amount of
such termination pay computed under the provisions of such termination pay
policy of Corporation.
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3.4.2
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The
amounts payable to Executive under the provisions of Subsection 3.4.1
above shall be paid in twenty-four (24) equal monthly installments on or
before the last business day of the month; provided that, if Executive
shall be eligible for, and elects to take, early retirement under the
retirement plan or plans of Corporation applicable to him before all of
such total amount has been paid to him, the then remaining balance shall
be paid to him in a lump sum immediately upon his retirement. In the event
that a lump sum payment is made to Executive as provided herein, the
benefits as defined herein shall continue for the remainder of the
twenty-four (24) month period, unless, within such period, Executive
obtains comparable coverage by a new
employer.
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3.4.3
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For
any period of time during which installment payments are made to Executive
under Subsection 3.4.2 above, in the event that Corporation cannot
continue Executive’s eligibility under its benefits, as defined herein,
because of conflicts with program or policy provisions, Corporation shall
provide Executive with monthly payments sufficient to cover Employee’s
COBRA premiums for medical and dental coverage, as well as premiums for
life insurance, on an after-tax basis as calculated by the actuary engaged
by Corporation at the time of termination, or if such actuary is not
available, Corporation’s independent auditor, in order to continue such
coverage as provided herein during the twenty-four (24) months referred to
in Subsection 3.4.2, in addition to the payments made pursuant to
Subsection 3.4.1 hereof.
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3.4.4
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Upon
Corporation’s termination of Executive as provided in this Subsection 3.4,
Corporation shall be released from any and all further obligations under
this Agreement, except that Corporation shall be obligated to pay
Executive his salary and accrued benefits owing to Executive through the
day on which Executive’s employment is terminated, and such other benefits
as are provided to Executive under each of the subparagraphs of Subsection
3.4 hereof.
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3.5.
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The
Executive shall be entitled to terminate his employment with Corporation
without Good Reason, as defined in Subsection 3.6 hereof, at any time
during the Term of this Agreement or any renewal thereof, effective as of
the first day of any month, upon no less than forty-five (45) days prior
written notice. Upon such termination, Corporation shall be released from
any and all further obligations under this Agreement, except that
Corporation shall be obligated to pay Executive his salary and accrued
benefits owing to Executive through the day on which Executive’s
employment is terminated, and Executive shall be offered COBRA
continuation coverage as required by
law.
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3.6.
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The
Executive shall be entitled to terminate his employment for Good Reason,
at any time during the Term of this Agreement or any renewal thereof,
effective as of the first day of any month, upon no less than forty-five
(45) days prior written notice. “Good Reason” means any of the following:
(a) the Corporation reduces the Executive’s position, duties, compensation
or authority, (b) the Corporation merges, consolidates with another entity
or sells more than 50% of any class of its stock without the written
consent of the Executive, or (c) the Corporation commits a material breach
of this Agreement and fails to cure such breach within 30 days after
receiving written notice thereof from the Executive. In the event that the
Executive terminates his employment for Good Reason, the Corporation shall
be obligated to pay to Executive, as liquidated damages those amounts that
Corporation pays to Executive under each of the subparagraphs of
Subsection 3.4 hereof.
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3.7.
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During
the Term hereof, the Board of Directors of the Corporation shall not
terminate the office, position, and employment of the President, Chief
Executive Officer and Chairman or so change the powers, authorities, and
duties of such office, position, and employment that it can be reasonably
found that Executive will no longer be performing the Services, have the
responsibilities, or have the powers and authorities of the President,
Chief Executive Officer and Chairman of the Corporation, as defined in
Section 4 hereof. During any renewal of the Term, in the event that the
Board of Directors of the Corporation terminates the office, position, and
employment of the President, Chief Executive Officer and Chairman other
than for cause, as defined in Subsection 3.3 above, or so changes the
powers, authorities, and duties of such office, position, and employment
that it can be reasonably found that Executive will no longer be
performing the Services, have the responsibilities, or have the powers and
authorities of the President, Chief Executive Officer and Chairman of the
Corporation, as defined in Section 4 hereof, and Executive shall then
resign because of such changes, the Executive shall be entitled to those
amounts that Corporation pays to Executive under each of the subparagraphs
of Subsection 3.4 hereof.
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4.
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Performance
of Services.
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4.1
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Executive
shall devote sufficient time to the Corporation’s business to render the
Services. The Executive shall comply with all laws, statutes, ordinances,
rules and regulations relating to the Services. Executive may engage in
other activities during the term of this Agreement; provided that such
activities do not materially interfere with the business of the
Corporation.
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4.2
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Executive
hereby discloses to the Corporation that the Executive is a principal
shareholder or member in companies hereinafter described as Risk Partners
Group, including but not limited to Healthcare Risk Partners, Inc. The
Corporation acknowledges such disclosure and consents to such relationship
and engagement of the Executive by Risk Partners Group and its respective
subsidiaries, affiliates and joint ventures. The parties
expect, but without any assurances to each other, that Risk Partners Group
and Corporation may enter into one or more arrangements or other
agreements, to be determined by such agreement. The Corporation
acknowledges and agrees that (a) Executive need not make additional
disclosures to Corporation of such relationship with Risk Partners Group;
and (b) Executive does not have a conflict of interest in any dealings
between Corporation and Risk Partners Group, and Corporation waives such
conflict of interest if such a conflict should ever exist. The parties
agree that the nature of such ownership has been fully disclosed by the
Executive, and the Corporation waives any conflict associated
therewith.
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5.
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Change
of Control.
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5.1
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During
the Term hereof, the Board of Directors shall not approve any change of
control, as defined herein unless the acquiring corporation or controlling
person assumes responsibility for this Agreement and all payments due
hereunder. In the event that the Board of Directors of the Corporation
approves a change of control, as defined herein, after the expiration of
the Term, and during any renewal hereof, and in the event that Executive’s
employment by the Corporation as President, Chief Executive Officer and
Chairman is terminated immediately by an acquirer or surviving entity
following the change of control, or in the event that the Board of
Directors of the Corporation take the actions described in Subsection 3.7
hereof following a change of control, as a direct result thereof,
Executive shall receive any benefits provided upon Executive’s termination
of employment pursuant to Subsection 3.4 of this Agreement. The
term, “change of control,” shall be defined as either the sale, lease,
exchange, transfer, or other disposition to any person, entity, or group
of persons of fifty percent (50%) or more of the assets of the
Corporation, or an action by the Board of Directors regarding any
reorganization, merger, or consolidation of the Corporation, in each case,
pursuant to which the persons who were members of the Board of Directors
of the Corporation immediately prior to such reorganization, merger, or
consolidation, do not immediately thereafter constitute more than fifty
percent (50%) of the combined voting power entitled to vote generally in
the election of directors of the reorganized, merged, or consolidated
Corporation’s Board of Directors.
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5.2
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In
the event that the Board of Directors of the Corporation approves a change
of control, as defined herein, but the Executive’s employment by
Corporation as President, Chief Executive Officer and Chairman is not
terminated by an acquirer or surviving entity following the change of
control, Executive shall be eligible to receive any benefits provided
pursuant to Subsection 3.4 of this Agreement upon Executive’s termination
of employment at a “termination window” (as defined below) for up to two
(2) years from the effective date of the change of control,
notwithstanding the provisions of Section 3.5 hereof. For the
purposes of this Subsection 5.2, the “termination window” shall occur
during a period beginning three hundred fifty-five (355) days and seven
hundred ten (710) days following the effective date of the change of
control, and ending ten (10) days following such
dates.
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6.
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Confidential
Information, Trade Secrets, Inventions and
Creations.
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6.1
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The
Executive acknowledges that in Executive’s employment hereunder, Executive
will be making use of, acquiring and adding to the Corporation’s trade
secrets and its confidential and proprietary information of a special and
unique nature and value relating to such matters as, but not limited to,
Corporation’s business operation, internal structure, financial affairs,
programs, software, systems, procedures, manuals, confidential reports,
lists of clients and prospective clients and sales and marketing methods,
as well as the amount, nature and type of services, equipment and methods
used and preferred by the Corporation’s clients and the fees paid by such
clients, all of which shall be deemed to be confidential information. The
Executive acknowledges that such confidential information has been and
will continue to be of central importance to the business of the
Corporation and that disclosure of it to or its use by others could cause
substantial loss to the Corporation. In consideration of employment by the
Corporation, the Executive agrees that during his employment Executive
shall not, for any purpose whatsoever, directly or indirectly, divulge or
disclose to any person or entity any of such confidential information
which was obtained by Executive as a result of Executive’s employment with
Corporation or any trade secrets of Corporation, but shall hold all of the
same confidential and inviolate.
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7.
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Indemnification.
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7.1
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The
Corporation shall indemnify the Executive, hold Executive harmless, and
defend Executive to the fullest extent permitted by applicable law from
and against all claims, threats, suits (except those arising from disputes
between Corporation and Executive), damages, penalties, liabilities, cost
and expenses including, without limitation, legal fees, costs and
disbursements (all collectively referred to as “liabilities”) incurred,
suffered, or expended by or threatened against Executive with respect to
any action or inaction in the course or performance of Executive’s duties
under this Agreement except for liabilities arising entirely out of the
gross negligence or willful misconduct of Executive. If any claims are
made against Executive he shall be entitled to an advance of his legal
fees upon request to the Board of Directors. This
indemnification shall continue in effect after the expiration or
termination of this Agreement and shall not be deemed exclusive of any
other indemnification right to which the Executive may be entitled under
applicable law, agreement or the vote of the Board of Directors of the
Corporation.
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8.
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Notices. All
notices and other communications required or permitted to be given by this
Agreement shall be in writing and shall be given and shall be deemed
received if and when either hand-delivered or refused, or deemed received
three-days after being mailed by registered or certified U.S. mail, return
receipt requested, postage prepaid, and if to
the
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| Corporation to: | And if to the Executive: |
| Phyhealth Corporation | Xxxxxx X. Xxxxxx |
| 000 X. Xxxxx Xxxxxxxxx Xxxx. | Address on file |
| Xxxxx 000 | |
| Xxxxx, XX 00000 |
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or at
such other address as either party hereto shall notify the other of in
writing.
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9.
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Governing
Law, Disputes.
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9.1
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The
laws of the State of Florida shall govern this Agreement without regard to
any of its conflict of law
provisions.
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9.2
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The
parties will attempt in good faith to resolve through negotiation any
dispute, claim or controversy arising out of or relating to this
Agreement. Either party may initiate negotiations by providing written
notice in letter form to the other party, setting forth the subject of the
dispute and the relief requested. The recipient of such notice shall
respond within five days with a written statement of its position on, and
recommended solution to, the dispute. If the dispute is not resolved by
this exchange of correspondence, then representatives of each party with
full settlement authority will meet at a mutually agreeable time and place
within ten days of the date of the initial notice in order to exchange
relevant information and perspectives, and to attempt to resolve the
dispute. If the dispute is not resolved by these negotiations, the parties
will consider and decide whether the dispute should be submitted to JAMS,
or its successor, for mediation or
arbitration.
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9.3
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The
parties agree that any and all disputes, claims or controversies arising
out of or relating to this Agreement shall be submitted to JAMS, or its
successor, for mediation, and if the matter is not resolved through
mediation, then it shall be submitted to JAMS, or its successor, for final
and binding arbitration. Either party may commence mediation by providing
to JAMS and the other party a written request for mediation, setting forth
the subject of the dispute and the relief requested. The parties will
cooperate with JAMS and with one another in selecting a mediator from
JAMS' panel of neutrals, and in scheduling the mediation proceedings. The
parties covenant that they will participate in the mediation in good
faith. All offers, promises, conduct and statements, whether oral or
written, made in the course of the mediation by any of the parties, their
agents, employees, experts and attorneys, and by the mediator or any JAMS
employees, are confidential, privileged and inadmissible for any purpose,
including impeachment, in any arbitration or other proceeding involving
the parties, provided that evidence that is otherwise admissible or
discoverable shall not be rendered inadmissible or non-discoverable as a
result of its use in the mediation. Either party may initiate arbitration
with respect to the matters submitted to mediation by filing a written
demand for arbitration at any time following the initial mediation session
or 45 days after the date of filing the written request for mediation,
whichever occurs first. The mediation may continue after the commencement
of arbitration if the parties so desire. Unless otherwise agreed by the
parties, the mediator shall be disqualified from serving as arbitrator in
the case. The provisions of this Clause may be enforced by any
Court of competent jurisdiction, and the party seeking enforcement shall
be entitled to an award of all costs, fees and expenses, including
attorney’s fees, to be paid by the party against whom enforcement is
ordered. Any arbitration shall be held in Miami-Dade County, Florida at
the offices of JAMS, or its successor, or if JAMS or its successor have no
offices in Miami-Dade County, then the arbitration shall be held in a
mutually agreeable neutral site within Miami-Dade County,
Florida.
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9.4
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Regardless
of which party prevails, the Corporation agrees to reimburse Executive for
all reasonable legal expenses he incurs in the negotiation, mediation
and/or arbitration or other legal process, including any retainer amounts,
upon submission of the retainer or fee invoice by Executive to
Corporation.
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10.
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Non-compete. During
the term of this Agreement and for a period of one year thereafter,
Executive agrees that he will not be employed by or otherwise engaged in
any business which competes with that of the Corporation. In addition
Executive shall not, during such one year period, contact any of
Corporation’s customers or employees concerning any business or potential
business which would compete with that of the Corporation. The provisions
of this Section 10 shall not apply if it is determined that this Agreement
was terminated by the Executive for Good
Reason.
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11.
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Miscellaneous.
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11.1
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This
Agreement shall be binding upon and inure to the benefit of the
Corporation, its successors and assigns. This Agreement shall
be binding upon the Executive and his heirs, personal and legal
representatives, and guardians, and shall inure to the benefit of the
Executive. Neither this Agreement nor any part hereof or interest herein
shall be assigned by the Executive. If there is a sale of the
Corporation or change in control thereof, as a condition precedent to any
such sale or change in control, the acquiring corporation or controlling
person must assume responsibility for this Agreement and all payments due
hereunder, in writing, as a condition to any such
transaction. If such person or entity does not assume liability
for this Agreement, then such inaction shall constitute a breach hereunder
and, in addition to any other equitable remedies available to the
Executive, Executive shall be entitled to the payment provided for in
Subsection 3.4 hereof as liquidated compensatory
damages.
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11.2
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The
terms and provisions of this Agreement may not be modified except by
written instrument duly executed by each party
hereto.
|
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11.3
|
The
use of any gender herein shall be deemed to be or include the other
genders and the neuter and the use of the singular herein shall be deemed
to be and include the plural (and vice versa), wherever
appropriate.
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11.4
|
This
Agreement sets forth the entire, integrated understanding and Agreement of
the parties hereto with respect to the subject matter
hereof.
|
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11.5
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The
headings in this Agreement are included for the convenience of reference
and shall be given no effect in the construction of this
Agreement.
|
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11.6
|
The
Recitals set forth above are incorporated herein by this
reference.
|
IN
WITNESS WHEREOF, the parties have executed, acknowledged, sealed and delivered
this Agreement the day and year first hereinabove set forth.
| PhyHealth Corporation | Executive: | ||
| By | /s/ Xxxxx Xxxxxxxxx | /s/ Xxxxxx X. Xxxxxx | |
| Xxxxx Xxxxxxxxx | Xxxxxx X. Xxxxxx | ||
| Title: Director | |||
| Date: 11/1/09 | Date: 11/1/09 | ||
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