AMERICAN HOSPITAL RESOURCES, INC.
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May 8, 0000
Xxxxx Xxxxx, Xxx. CONFIDENTIAL DOCUMENT
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Xxxxxx Xxxx, Rph.
0000 Xxx Xxxxxxx 00, Xxxxx #0
Xxxxxxxxxxx, XX 00000
Re: Employment Agreement
Dear Messrs. Xxxxx and Xxxx:
Please allow this letter to serve as the Management Agreement ("Management
Agreement") between American Hospital Resources, Inc. including any and/or all
of its subsidiaries (collectively "AMHR") and Xxxxx Xxxxx and Xxxxxx Xxxx
(collectively the "Managers") to provide senior management services ("Management
Services") to and/or on behalf of AMHR. The following represents the terms and
conditions upon which such Management Services shall be performed:
SERVICES TO BE PERFORMED: The Managers shall personally supervise and co-manage
with each other the day-to-day pharmacy business affairs of Rx Solutions, Inc.,
a wholly owned subsidiary of AMHR. In addition, Managers shall assist AMHR with
locating additional pharmacy outsourcing businesses for future acquisition. All
such pharmacy management and outsourcing services shall be performed exclusively
on behalf of or for the benefit of AMHR. Provision of any such pharmacy
outsourcing development services to any other person or entity without the
express written consent of AMHR will be cause for immediate termination of this
Management Agreement.
TERM OF MANAGEMENT AGREEMENT: Unless otherwise extended in writing, the term
("Term") of this Management Agreement shall be for a period of three (3) years.
COMMENCEMENT OF MANAGEMENT SERVICES: May 1, 2003.
COMPENSATION: Payment to each Manager shall be a monthly salary equal to Eight
Thousand Five Hundred Dollars ($8,500) per month for the Term of the Management
Agreement payable in semi-monthly installments to each Manager of Four Thousand
Two Hundred Fifty Dollars ($4,250). The first such semi-monthly payment is to
be paid to each Manager on May 15, 2003 and shall continue to be payable on the
1st and 15th day of each month of the Term thereafter.
BENEFITS: Managers and their respective families shall be provided with group
health insurance consistent with that currently being provided by Rx Solutions,
Inc. Managers shall each be entitled to two weeks of paid vacation each year
and one week of sick leave. Managers will be enrolled in any Company sponsored
401k program so long as such 401k program has been previously adopted by
resolution from the Board of Directors of the Company.
RX SOLUTIONS ACQUISITION: As a condition to commencement of the Management
Agreement, AMHR shall acquire Rx Solutions, Inc. pursuant to that Stock Purchase
Agreement between Rx Solutions, Inc. and AMHR executed May 8, 2003 and effective
May 1, 2003. If such Rx Solutions, Inc. acquisition is not completed and/or the
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$300,000 Short-term Note is not paid within its 90-day Term for any reason
whatsoever this Management Agreement will be null and void and no longer binding
on AMHR or Managers.
GOVERNANCE: The laws of Mississippi shall govern this Management Agreement.
Any disputes shall be submitted to binding arbitration in Jackson, Mississippi,
with the prevailing party entitled to collect all reasonable legal costs.
GROWTH BONUS: AMHR shall further compensate ("Growth Bonus") Managers for their
direct assistance in securing additional pharmacy outsourcing contracts ("New
Pharmacy Contracts") for AMHR that are entered into by AMHR (or its
subsidiaries) during the one year period commencing May 1, 2003 and ending April
30, 2004 ("Bonus Period"). AMHR shall have the sole and absolute right to
accept or reject any such new pharmacy outsourcing contracts as presented by
Managers.
CALCULATION OF GROWTH BONUS: Such Growth Bonus shall be equal to the amount
resulting from the multiplication of the annual EBITDA for each such New
Pharmacy Contracts by three (3). It is agreed herein that the annual EBITDA for
all such New Pharmacy Contracts generated by Managers shall be equal to ten
percent (10%) of the net revenue billed by AMHR during the Bonus Period for such
New Pharmacy Contracts.
PAYMENT OF GROWTH BONUS: The Growth Bonus shall be calculated and paid to
Managers on or before May 31, 2004.
METHOD OF PAYMENT: Such Growth Bonus shall be paid twenty-five percent (25%) in
cash, thirty-five percent (35%) in a 7% 5-year note ("Bonus Note") and forty
percent (40%) in AMHR Series "B" 6% Convertible Preferred Stock. The Bonus Note
shall have the identical terms and conditions of the notes issued by AMHR to the
Shareholders of Rx Solutions, Inc. All AMHR Series "B" Preferred Stock shall be
issued subject to Rule 144.
FINDER'S FEE: During the Term, Managers shall receive an all-cash finder's fee
equal to two percent (2%) of the purchase price of any existing long-term
pharmacy outsourcing business referred to AMHR by Managers that is subsequently
acquired by AMHR.
AMHR and Managers herein agree where necessary to re-structure this Management
Agreement if any of its terms or conditions is found to be either unenforceable
or creates significant adverse tax consequence for any party hereto.
Very truly yours,
AMERICAN HOSPITAL RESOURCES, INC.
/s/Xxxxxxxxxxx X. Xxxxxxx
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Xxxxxxxxxxx X. Xxxxxxx
Chief Executive Officer
AGREED AND ACCEPTED:
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/s/Xxxxx Xxxxx, Rph. May 8, 2003
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Xxxxx Xxxxx
/s/Xxxxxx Xxxx, Rph. May 8, 2003
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Xxxxxx Xxxx
