Attached files
EXHIBIT
10.13
EMPLOYMENT
AGREEMENT
BETWEEN
PHYSICIANS
HEALTHCARE MANAGEMENT GROUP, INC.
AND
FIDEL R. RODRIGUEZ
1
EMPLOYMENT
AGREEMENT
This
Employment Agreement (this "Agreement") is made as of July 1, 2007, by and
between Physicians Healthcare Management Group, Inc. ("Phyhealth") (the
"Corporation"), a Nevada corporation, and Fidel R. Rodriguez (the "Executive").
RECITALS
WIHEEREAS,
the Corporation is duly organized and validly existing as a corporation in good
standing under the laws of the State of Nevada. 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 Vice
President, Chief Operations Officer and Corporate Director.
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. Employment
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1.1.
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The
Corporation hereby employs the Executive in the position of Vice
President, Chief Operations Officer and Corporate Director 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 President. Chief
Executive Officer and Chairman of 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 Chief Executive Officer of the
Corporation (CEO). 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 CEO, provided,
however, that the CEO and 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 $120,000 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 $200,000 per year, payable in regular installments as
above, effective on January 1" of the year following the fiscal year in
which the Corporation either receives $4,000,000 in annualized 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
compensation shall be further increased to $400,000 per year, payable in
regular installments as above, effective on January 1" 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 compensation shall be increased each year effective
January 15` 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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The
Corporation will issue stock options to Executive to purchase 20,000,000
shares of the common stock of the Corporation at an exercise price of
$0.003 per share. Stock options to purchase 10,000,000 shares shall vest
immediately on the effective date of this Agreement, stock options
for
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| 5,000,000 shares shall vest on January | 1, | 2008 and stock options for | |
| 5,000,000 shares shall vest on January | 1, | 2009. The stock options are |
subject
to the acceleration of the vesting provisions upon the effective date of
Termination of Employment pursuant to Section 3 hereof, the stock options shall
be for a term of ten (10) years from the date of issue with a cashless exercise
provision at the option of the Executive, and piggyback registration rights. In
addition to all other compensation Executive shall be eligible for additional
incentive stock grants and options as may be awarded from time-to-time by the
Corporation and its Board of Directors. Whether the Executive is awarded all or
any portion of these stock grants and options shall be based upon specific
criteria established by the Corporation and its Board of Directors. These
criteria shall reflect overall performance as compared to planned goals of the
Corporation, as well as Executive's contribution to Corporation's performance.
The Corporation acknowledges that the Executive on the effective date of this
Agreement owns and controls 20,399,020 shares of restricted common and preferred
stock representing 4.91% of the issued and outstanding common and preferred
stock of the Corporation. Additionally, notwithstanding anything herein to the contrary, in
the event of a dividend, the Executive shall be entitled to the Executive's
share of the dividend, be it stock dividend or cash dividend, or any similar
transaction or distribution by the Company, to the same extent as though the
preferred stock was participating. Additionally, in the event of a stock
dividend as part of a spinoff transaction, the Executive shall be entitled to
the same proportion of options in the spun-off company as the Executive has in
the Company, that portion being the same portion as the Executive's current
number of options bears to the current number of outstanding shares of preferred
stock and common stock combined. The option exercise price in the spun-off
company shall be equal to the exercise price of the options in the Company,
times a fraction, the numerator of which is the number of outstanding shares of
common and preferred in the Company, and the denominator of which shall be the
number of outstanding shares of common and preferred in the spun-off company, at
the time of such spin-off,
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1.4.
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In
addition to the base salary compensation, the Executive shall receive
annual incentive bonus compensation equal to: (i) .20% of annual Gross
Revenues (GR) plus (ii) .20% of the annual growth in Gross Revenues (Bonus
Year Gross Revenues less Prior Year Gross Revenues); plus (iii) 3.75% of
Net Income (NI). Net Income (NI) for purposes of this Subsection 1.4 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: .002GR +
.002(Bonus Year GR less Prior Year GR) + .0375NI 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 31'`
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 3151
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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1.5.
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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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1.6.
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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 15' of the
year following the Triggering Event described in Subsection 1.2
above.
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1.7.
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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-seven (67). 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 1' of the year following the Triggering
Event.
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1.8.
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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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1.9.
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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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1.10.
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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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1.11.
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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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1.12.
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All
amounts payable to the Executive as compensation hereunder shall
be
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subject
to all required and customary withholding by the
Corporation.
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2. Term.
The term of this Agreement shall be for a period commencing on July 1, 2007
("Effective Date") and ending December 31, 2012 ("Term"). Thereafter, this
Agreement shall be automatically renewed for an additional five (5) year period
from January 1, 2013 to December
7
31, 2018
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.
3. 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 1.8 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
1.4 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 1.7 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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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, 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. 1f Executive's
employment is so terminated prior to the expiration of the Perm of this
Agrec111ent without cause or during any approval 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 Corporation shall not terminate the office, position,
and employment of the Vice President, Chief Operations Officer and
Corporate Director 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 Vice
President, Chief Operations Officer and Corporate Director, as defined in
Section 4 hereof. During any renewal of the Term, in the event that the
Corporation terminates the office, position, and employment of the Vice
President, Chief Operations Officer and Corporate Director 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 Vice President, Chief Operations Officer and Corporate Director 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. 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 member of
NextPath Partners, LLC; Nextgen Associates, LLC and
Nextgen Financial, LLC (together "NextCo"); and is associated with
Healthcare Risk Partners, Inc. (Risk Partners). The Corporation
acknowledges such disclosure and consents to such relationship and
engagement of the Executive by NextCo, Risk Partners and their respective
subsidiaries, affiliates and joint ventures. The parties expect, but
without any assurances to each other, that NextCo and Risk Partners 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 NextCo and Risk Partners; and (b)
Executive does not have a conflict of interest in any dealings between
Corporation and NextCo and Risk Partners, 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. 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 Vice President, Chief Operations Officer
and Corporate Director 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 Vice President. Chief Operations Officer and Corporate
Director 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. 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. 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. 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
|
Corporation
to:
|
And
if to the
|
| Executive: | |
| Physicians Healthcare Management Group, Inc. 700 S. Royal Poinciana Blvd. | 3780 NW 12'h Street 6 |
| Suite 506 | Miami, FL 3312 |
| Miami, FL 33166 |
or at
such other address as either party hereto shall notify the other of in
writing.
9. Governing
Law. Disputes.
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9.1
|
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
|
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
|
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 it 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
|
Regardless
of which parry 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. 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.
11. Miscellaneous.
|
|
11.1
|
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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|
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1
1.2
|
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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|
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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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1.5
|
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.
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IN
WITNESS WHEREOF, the parties have executed, acknowledged, sealed and delivered
this Agreement the day and year first hereinabove set forth.
| Physicians Healthcare Management Group, Inc. | Executive: | ||||
| By: | /s/ Robert L. Trinka | By: | /s/ Fidel Rodriguez | ||
| Robert L. Trinka | Fidel Rodriguez | ||||
| Title: Chairman & CEO | Title: Employee | ||||
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