EMPLOYMENT AGREEMENT
Exhibit 10.9
This EMPLOYMENT AGREEMENT (this “Agreement”) is effective as of April _, 2017 (the “Effective Date”), between P3 Health Group Holdings, LLC, a Delaware limited liability company (the “Company”), and Xxxxxx Xxxxx, M.D. (the “Executive”).
WHEREAS, the Company desires to employ the Executive as the Founder, Chief Executive Officer and President of the Company and Executive shall be appointed as a member of the Board of Managers (the “Board”) of the Company (with Executive’s rights and duties in connection with serving as a member of the Board being set forth in the Limited Liability Company Agreement of the Company, dated as of the date hereof (the “LLC Agreement”));
WHEREAS, the Company and the Executive desire to enter into this Agreement as to the terms of the Executive’s employment with the Company; and
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises contained herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
(a) The Executive shall serve as the Founder, Chief Executive Officer and President of the Company and as a member of the Board. Executive shall report to the Board and be responsible for all day-to-day management decisions of the Company. Executive shall serve as a member of the Board, subject to the terms of the LLC Agreement.
(b) The Executive shall devote substantially all of the Executive’s working time and efforts to the business and affairs of the Company.
2. EVERGREEN EMPLOYMENT TERM. The Company agrees to employ the Executive, and the Executive agrees to be employed, as of the Effective Date. Either party hereto may elect to terminate this Agreement by giving the other party prior written notice. In the case of an Executive initiated notice, the notice period shall be 180 days and the Company shall have the option of reducing the notice period to 60 days. In the case of a Company initiated notice, the notice period shall be no less than 60 days. The Executive’s employment hereunder may also be terminated in accordance with Section 6 of this Agreement. The period of time between the Effective Date and the termination of the Executive’s employment hereunder shall be referred to herein as the “Employment Term.” No termination of employment shall affect Executive’s status as a member of the Board; provided, that Executive must resign from the Board if: (a) he is terminated for Cause by Company, or (b) the Executive voluntarily terminates his employment. Executive will not be deemed to have voluntarily terminated his employment unless he affirmatively confirms such action in writing.
3. BASE SALARY. The Company agrees to pay the Executive an annual base salary (“Base Salary”) of $600,000, payable in accordance with the regular payroll practices of the Company.
4. ANNUAL BONUS. The Executive shall be eligible to receive an annual incentive bonus (“Bonus”) of up to 100% of Executive’s Base Salary based upon performance goals which shall be mutually determined in good faith by the Executive and the Board.
(a) During the Employment Term, the Executive shall be entitled to participate in any employee benefit plan that the Company adopts.
(b) As part of Executive’s benefit compensation under this Agreement, Company shall, following consultation with Executive, obtain, pay for and maintain during the Employment Term short-term and long-term disability insurance coverage on Executive at a level commensurate with Executive’s position and compensation (the “Disability Insurance Policies”).
(c) During the Employment Term, the Company agrees to insure the life of the Executive for the Company’s sole benefit and so as to provide funding to satisfy the Company’s repurchase obligations with respect to Executive’s equity interest in the Company as may be required by the terms of the LLC Agreement. The Company shall have the right to determine the amount of insurance and the type of policy. The Executive shall reasonably cooperate with the Company in obtaining such insurance by submitting to physical examinations, supplying all information reasonably required by any insurance carrier, and executing all necessary documents reasonably required by any insurance carrier, provided that any information provided to an insurance company or broker shall not be provided to the Company without the prior written authorization of the Executive. The Executive shall incur no financial obligation by executing any required document, and shall have no interest in any such policy.
6. TERMINATION. The Executive’s employment shall be subject to termination in the event of any of the following:
(b) DEATH. Automatically upon the date of death of the Executive.
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7. CONSEQUENCES OF TERMINATION. Termination of the Executive shall result in the following.
(i) any unpaid Base Salary and accrued benefits through the date of termination;
(ii) reimbursement for any unreimbursed business expenses incurred through the date of termination; and
(iii) Executive’s vesting of any Class B Unvested Units (other than Units the vesting of which is tied to a performance standard) shall be accelerated.
(i) Any accrued benefits through the date of termination of employment and Executive’s Base Salary for a twelve (12) month period (payable in accordance with the Company’s normal pay-roll cycle), subject to mitigation upon Executive’s re-employment in the twelve month period; and
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(ii) Executive’s vesting of any Class B Unvested Units shall be accelerated by twelve (12) months.
(i) Any accrued benefits through the date of termination of employment and Executive’s Base Salary for 18 months (payable in accordance with the Company’s normal pay-roll cycle); and
(ii) Executive’s vesting of any Class B Unvested Units shall be accelerated by twelve (12) months.
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In the event Executive’s employment is terminated without Cause by Company, the period of non-competition provided for in this Section 8(b), shall be reduced from thirty-six (36) months from such date of termination of employment to zero (0) months from the date of termination of employment.
Further, in the event Executive’s employment is terminated for Cause by Executive, (A) the period of non-competition provided for hereinabove in this Section 8(b) shall be reduced from thirty-six (36) months from such date of termination of employment to eighteen (18) months from the date of termination of employment, and (B) the geographic scope of the non-competition provision contained in this Section 8(b) shall be limited to the counties in the states of Nevada and Arizona where the Company is actively engaged in business as described hereinabove in this Section 8(b).
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9. EQUITABLE RELIEF AND OTHER REMEDIES. The Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Section 8 hereof would be inadequate and, in recognition of this fact, the Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available, without the necessity of showing actual monetary damages or the posting of a bond or other security.
10. NO ASSIGNMENTS. This Agreement may not be assigned by either party without first obtaining the written consent of the other party, which consent shall not be unreasonably withheld.
11. NOTICE. For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given (a) on the date of delivery, if delivered by hand, (b) on the date of transmission, if delivered by confirmed facsimile or electronic mail, (c) on the first business day following the date of deposit, if delivered by guaranteed overnight delivery service, or (d) on the fourth business day following the date delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Attn: Xxxxxx Xxxxx, M.D.
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If to the Company:
P3
Health Group Holdings, LLC
c/o Chicago Pacific Founders Capital Management, LLC
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxx
or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
12. SEVERABILITY. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.
13. LEGAL COUNSEL; MUTUAL DRAFTING. Each party recognizes that this is a legally binding contract and acknowledges and agrees that they have had the opportunity to consult with legal counsel of their choice. Each party has cooperated in the drafting, negotiation and preparation of this Agreement. Hence, in any construction to be made of this Agreement, the same shall not be construed against either party on the basis of that party being the drafter of such language.
14. GOVERNING LAW; JURISDICTION; NO TRIAL BY JURY. This Agreement, the rights and obligations of the parties hereto, any claims or disputes relating thereto, or any proceeding relating to the Executive’s employment by the Company or any affiliate, or for the recognition and enforcement of any judgment in respect thereof, shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its choice of law provisions. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES HERETO WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES HERETO DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN OR AMONG ANY OF THE PARTIES HERETO, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS AGREEMENT AND/OR THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY OR ANY AFFILIATE OF THE COMPANY, OR THE EXECUTIVE’S OR THE COMPANY’S PERFORMANCE UNDER, OR THE ENFORCEMENT OF, THIS AGREEMENT. ANY DISPUTE RELATING TO THIS AGREEMENT SHALL BE HEARD IN THE STATE OR FEDERAL COURTS OF NEVADA AND THE PARTIES AGREE TO JURISDICTION AND VENUE THEREIN.
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15. MISCELLANEOUS. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer or director as may be designated by the Board. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.
16. SURVIVAL OF PROVISIONS. The obligations contained in Sections 7 through 16 of this Agreement shall survive the termination or expiration of the Employment Term and the Executive’s employment with the Company.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first written above.
P3 Health Group Holdings, LLC | ||
By: | /s/ Xxxx Xxxxx | |
Name: | Xxxx Xxxxx | |
Title: | Chairman | |
EXECUTIVE | ||
/s/ Xxxxxx Xxxxx | ||
Xxxxxx Xxxxx, M.D. |
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