<PAGE>
Registration No. 333-_______________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PHOENIX HEALTHCARE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 23-2596710
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4514 TRAVIS STREET, SUITE 330
DALLAS, TEXAS 75205
(Address of Principal Executive Offices) (Zip Code)
PHOENIX HEALTHCARE CORPORATION 1999 STOCK OPTION PLAN
PHOENIX HEALTHCARE CORPORATION EMPLOYEE STOCK PURCHASE PLAN
PHOENIX HEALTHCARE CORPORATION 1999 SHARE AWARD PLAN
CERTAIN EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
(Full title of the plans)
RONALD E. LUSK
(Name and address of agent for service)
(888) 900-1133
(Telephone number, including area code, of agent for service)
WITH A COPY TO:
DAVID MUSTONE, ESQUIRE
REED SMITH SHAW & MCCLAY LLP
1301 K STREET, N.W.
SUITE 1100-EAST TOWER
WASHINGTON, DC 20005-3317
----------
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Title of Proposed Proposed
securities Amount maximum maximum Amount of
to be to be offering price aggregate registration
registered registered(1) per share(2) offering price(2) fee
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value
$.001 per
share.................. 14,400,000 shs. $.23 $3,312,000.00 $920.74
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus such additional number of shares as may be required pursuant to the
Phoenix Healthcare Corporation 1999 Stock Option Plan (the "Stock Option Plan"),
the Phoenix Healthcare Corporation Employee Stock Purchase Plan (the "Stock
Purchase Plan"), the Phoenix Healthcare Corporation 1999 Share Award Plan (the
"Share Award Plan"), and the employment agreements (together, the "Plans") in
the event of a stock dividend, split-up of shares, recapitalization or other
similar change in the Common Stock.
(2) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rules 457(h) and (c), the proposed maximum aggregate offering price
for shares which may be issued under the Plan is based on the average of the
high and low sales prices of the Common Stock as reported on the OTC Bulletin
Board for April 27, 1999.
EXPLANATORY NOTE
This registration statement on Form S-8 covers 3,000,000 shares of Common Stock,
$.001 par value, to be issued upon exercise of options granted under the
registrant's 1999 Stock Option Plan; 1,000,000 shares of Common Stock, $.001 par
value, to be issued under the registrant's Stock Purchase Plan; 400,000 shares
of Common Stock, $.001 par value, to be issued under the registrant's Share
Award Plan; and 10,000,000 shares of Common Stock, $.001 par value, to be issued
pursuant to certain employment agreements with executive officers of the
registrant.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the registrant with the Securities and
Exchange Commission are incorporated in this Registration Statement by reference
and made a part of this Registration Statement:
(a) The registrant's latest annual report on Form 10-K filed
pursuant to Section 13(a) of the Securities Exchange Act of 1934, as
amended (the "1934 Act");
(b) All other reports filed by the registrant pursuant to
Section 13(a) of the 1934 Act since the end of the fiscal year covered
by the annual report on Form 10-K referred to above; and
(c) Any description of the Common Stock which is contained in
a registration statement filed by the registrant pursuant to the 1934
Act, including any amendment or report filed for the purpose of
updating such description.
All documents filed by the registrant pursuant to Sections 13(a),
13(c), 14 or 15(d) of the 1934 Act on or subsequent to the date of this
Registration Statement, and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this Registration Statement shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained in this Registration Statement or in any other
contemporaneously or subsequently filed document which also is or is deemed to
be incorporated by reference in this Registration Statement modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law gives a corporation
the power to indemnify any person who was or is a party, or is threatened to be
made a party, to any threatened, pending or completed action, suit or proceeding
by reason that the person is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise (including an employee benefit plan). This
indemnification
<PAGE>
may cover expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by the person in connection
with the action, suit or proceeding, if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation (and, in the event of a criminal proceeding, had no
reasonable cause to believe his or her conduct was unlawful). If the action or
suit is brought by or in the right of the corporation, however, no
indemnification can be made where the person is adjudged to be liable to the
corporation, unless and to the extent that the Court of Chancery, or other court
in which the action or suit was brought, determines that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
the court deems proper. Any indemnification would be contingent upon a
determination that indemnification is proper in the circumstances because the
applicable standard of conduct has been met, which determination must be made by
either (1) a majority vote of the directors who are not parties to the action,
suit or proceeding; (2) if there are no such directors or the directors so
direct, independent legal counsel in a written opinion; or (3) the stockholders.
Expenses may be paid in advance of final disposition of an action if the
indemnified person undertakes to repay the amount if ultimately determined not
to be entitled to indemnification. A corporation also has the power to purchase
and maintain insurance on behalf of the persons it may indemnify against any
liability asserted against them in their respective capacities or arising out of
their status as serving in such capacities, regardless of whether the
corporation would have the power to indemnify them against such liability under
Section 145.
Article Tenth of the registrant's Certificate of Incorporation provides
that the corporation shall, to the fullest extent permitted by Section 145 of
the Delaware General Corporation Law, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all of
the expenses, liabilities or other matters referred to in or covered by said
section, and that such indemnification shall not be deemed exclusive of any
other rights to which those indemnified may be entitled under any By-Law,
agreement, vote of stockholders or disinterested directors or otherwise. Article
VII of the By-Laws of the registrant requires the registrant to indemnify a
director, officer, employee or agent, or any person serving at the request of
the registrant as a director, officer, employee, agent, fiduciary or trustee of
another corporation, partnership, joint venture, trust, employee benefit plan or
other entity or enterprise, who was or is a party, or is threatened to be made a
party, to any threatened, pending or completed action, suit, appeal or other
proceeding of any nature by reason of the fact that the person is or was a
serving in such capacity. Such indemnity is against any damage, judgment, amount
paid in settlement, fine, penalty, punitive damages, excise tax assessed with
respect to an employee benefit plan, or cost or expense, of any nature
(including, without limitation, attorneys' fees and disbursements), actually and
reasonably incurred in connection with such a proceeding. Indemnification
authorizations are to be made by a majority vote of the Board of Directors then
in office, except that the reimbursement of expenses incurred in successfully
prosecuting or defending the rights of an indemnified person under Article VII
is mandatory. Indemnification may not be provided if:
(i) the person to be indemnified did not act in good faith and
in a manner the person reasonably believed to be in, or not opposed to,
the best interests of the registrant (or, as to action with respect to
an employee benefit plan, the interests of participants in and
beneficiaries of the plan);
(ii) with respect to any criminal proceeding, the person had
reasonable cause to believe that his or her conduct was unlawful;
(iii) with respect to any proceeding by or in the right of the
registrant to procure a judgment in its favor, the person is adjudged
to be liable to the registrant, except as may be otherwise ordered by
the Delaware Court of Chancery or the court in which such proceeding
was brought;
(iv) a determination is not made that such indemnification is
authorized by the By-Laws by either (i) the Board of Directors by a
majority vote of the directors who were not parties to the proceeding,
even though less than a quorum, (ii) if there are no such directors, or
if such directors so direct, independent legal counsel in a written
opinion, or (iii) the stockholders; or
(v) to the extent that indemnification has been determined by
a court to be unlawful.
<PAGE>
Expenses may be paid in advance of the final disposition of a
proceeding upon receipt of an undertaking by or on behalf of the indemnified
person to repay the amount if ultimately determined not entitled to be
indemnified. The registrant may, on behalf of itself or any indemnified person,
purchase and maintain insurance or a similar arrangement against any liability
which might be asserted against or incurred by the registrant or any indemnified
person, whether or not the registrant would have the power to indemnify the
person against such liability under its By-Laws.
The indemnification rights granted by the By-Laws are not to be deemed
exclusive of any other right as to which a person seeking indemnification,
contribution or advancement of expenses may be entitled under any statute,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in an indemnified capacity and as to action in any other capacity. In
addition, if the indemnification provided for in the By-Laws or otherwise is
unavailable for any reason, the registrant is required to contribute to the
liabilities to which the indemnified person may be subject in such proportion as
is appropriate to reflect the intent of the By-Laws or otherwise.
In addition, Article Ninth of the registrant's Certificate of
Incorporation provides that the personal liability of the directors of the
corporation is eliminated to the fullest extent permitted by Section 102(b)(7)
of the Delaware General Corporation Law. This section eliminates a director's
liability to a corporation or its stockholders for monetary damages except: (i)
for breach of the director's duty of loyalty to the corporation and its
stockholders; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) under the section of
Delaware law providing for liability of directors for unlawful payment of
dividends or unlawful stock purchases or redemptions; or (iv) for any
transaction from which a director derived an improper personal benefit.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following documents are filed as part of this Registration
Statement or incorporated by reference herein.
<TABLE>
<CAPTION>
Exhibit
No.
-------
<S> <C>
4.1 Phoenix Healthcare Corporation 1999 Stock Option Plan, filed
herewith.
4.2 Phoenix Healthcare Corporation Employee Stock Purchase Plan,
filed herewith.
4.3 Phoenix Healthcare Corporation 1999 Share Award Plan, filed
herewith.
4.4 Employment Agreement and Change of Control Agreement between
registrant and Ronald E. Lusk, filed herewith.
4.5 Employment Agreement and Change of Control Agreement between
registrant and Robert L. Woodson, III, filed herewith.
4.6 Employment Agreement and Change of Control Agreement between
registrant and Albert Sousa, filed herewith.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
4.7 Employment Agreement and Change of Control Agreement between
registrant and Michael H. Seeliger, filed herewith.
5.1 Opinion of Reed Smith Shaw & McClay LLP as to the legality of
the Common Stock, filed herewith.
23.1 Consent of Reed Smith Shaw & McClay LLP (included in Exhibit
5.1 filed herewith).
23.2 Consent of Weaver and Tidwell L.L.P., independent auditors,
filed herewith.
23.3 Consent of Asher & Company, Ltd., independent auditors,
filed herewith.
24.1 Power of Attorney, contained on the signature page to this
Registration Statement.
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) RULE 415 OFFERING.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not
apply if the registration statement is on Form S-3 or Form
S-8, and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section
13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration
statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(B) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY
REFERENCE.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed
<PAGE>
to be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "1933 Act") may be permitted to directors, officers
and controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the 1933 Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933 Act
and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on the 29th day of April,
1999.
PHOENIX HEALTHCARE CORPORATION
By: /s/ Ronald E. Lusk
-----------------------------------------
Ronald E. Lusk
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Ronald E. Lusk his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this registration
statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitutes, may
lawfully do or cause to be done by virtue thereof.
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON THE 29TH DAY OF APRIL, 1999.
<TABLE>
<CAPTION>
NAME TITLE
<S> <C>
/s/ Ronald E. Lusk Chairman and Chief Executive Officer
-------------------------- (Principal Executive Officer)
Ronald E. Lusk
/s/ Robert L. Woodson, III President, Chief Operating
-------------------------- Officer and Director
Robert L. Woodson, III
/s/ Albert Sousa Executive Vice President,
-------------------------- Secretary and Director
Albert Sousa
/s/ Bart A. Houston Director
--------------------------
Bart A. Houston
</TABLE>
<PAGE>
PHOENIX HEALTHCARE CORPORATION
PHOENIX HEALTHCARE CORPORATION 1999 STOCK OPTION PLAN
PHOENIX HEALTHCARE CORPORATION EMPLOYEE STOCK PURCHASE PLAN
PHOENIX HEALTHCARE CORPORATION 1999 SHARE AWARD PLAN
CERTAIN EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
----------
REGISTRATION STATEMENT
ON FORM S-8
EXHIBIT INDEX
----------
<TABLE>
<CAPTION>
Exhibit
No. Document
------- --------
<S> <C>
4.1 Phoenix Healthcare Corporation 1999 Stock Option
Plan, filed herewith.
4.2 Phoenix Healthcare Corporation Employee Stock
Purchase Plan, filed herewith.
4.3 Phoenix Healthcare Corporation 1999 Share Award Plan,
filed herewith.
4.4 Employment Agreement and Change of Control Agreement
between registrant and Ronald E. Lusk, filed
herewith.
4.5 Employment Agreement and Change of Control Agreement
between registrant and Robert L. Woodson, III, filed
herewith.
4.6 Employment Agreement and Change of Control Agreement
between registrant and Albert Sousa, filed herewith.
4.7 Employment Agreement and Change of Control Agreement
between registrant and Michael H. Seeliger, filed
herewith.
5.1 Opinion of Reed Smith Shaw & McClay LLP, as to the
legality of the Common Stock, filed herewith.
23.1 Consent of Reed Smith Shaw & McClay LLP (included in
Exhibit 5.1 filed herewith).
23.2 Consent of Weaver and Tidwell L.L.P., independent
auditors, filed herewith.
23.3 Consent of Asher & Company, Ltd., independent
auditors, filed herewith.
24.1 Power of Attorney, contained on the signature page to
this Registration Statement.
</TABLE>
<PAGE>
Exhibit 4.1
PHOENIX HEALTHCARE CORPORATION 1999 STOCK OPTION PLAN
ARTICLE 1
THE PLAN
1.1. NAME. The name of this Plan is the Phoenix Healthcare Corporation
1999 Stock Option Plan.
1.2 PURPOSE AND SCOPE. (a) The purposes of the Plan are to (i) attract
and retain the best available personnel for positions of substantial
responsibility, (ii) reward past and future contributions to the Company (or any
Parent or Subsidiary), (iii) encourage ownership of the Company's common stock
by key employees, directors and consultants of the Company (and of any current
or future Parent or Subsidiary), and (iv) promote the Company's business success
by creating a long-term mutuality of interests between Plan participants and the
Company's shareholders.
(b) The Plan provides for the granting of both Incentive Stock
Options and Nonqualified Stock Options. Grants can be made to Employees,
Directors and Consultants; provided, that Incentive Stock Options may only be
granted to Employees.
1.3 EFFECTIVE DATE AND DURATION OF PLAN. This Plan is effective for a
10-year period commencing on January 1, 1999, and ending on December 31, 2008,
provided that any Options which are granted under the Plan prior to the
termination date shall continue to be exercisable in accordance with the terms
of the Stock Option Agreement after that date.
ARTICLE 2
DEFINITIONS
Capitalized terms in this Plan shall have the following meanings:
2.1 BOARD. The Board of Directors of the Company.
2.2 CODE. The Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder, or any replacement
legislation.
<PAGE>
2.3 COMMON STOCK. The common stock, par value $0.001 per share, of
Phoenix Healthcare Corporation.
2.4 COMPANY. Phoenix Healthcare Corporation and any successor to such
corporation, whether by merger, consolidation, liquidation or otherwise.
2.5 CONSULTANT. Any person engaged by the Company (or any Parent or
Subsidiary) as a non-Employee service provider pursuant to the terms of a
written contract or otherwise.
2.6 DIRECTOR. A member of the Board.
2.7 DISABILITY. Permanent and total disability within the meaning of
Section 22(e)(3) of the Code.
2.8 EMPLOYEE. All persons employed by the Company or any Parent or
Subsidiary, including officers, whether full-time or part-time.
2.9 EXCHANGE ACT. The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, or any replacement
legislation.
2.10 FAIR MARKET VALUE. As of any given date, (a) the price of the last
trade of a Share as reported on NASDAQ or the OTC bulletin board, as applicable,
for that date (or if Shares were not traded on such date, for the closest
preceding date on which a trade occurred), or (b) if the Shares are not publicly
traded, the fair market value of a Share as determined by the Board in good
faith, using such criteria as the Board may, in its sole discretion, deem
appropriate.
2.11 INCENTIVE STOCK OPTION. Any stock Option granted under this Plan
which is intended to qualify as an "incentive stock option" under Section 422 of
the Code.
2.12 NONQUALIFIED STOCK OPTION. Any stock Option granted under this
Plan which is not intended to qualify as an "incentive stock option" under
Section 422 of the Code.
2.13 OPTIONED SHARES. Those Shares subject to a stock Option granted
pursuant to this Plan.
2
<PAGE>
2.14 OPTIONEE. An individual who has received a stock Option pursuant
to this Plan.
2.15 OPTION PRICE. The payment to the Company for the Shares upon the
exercise of an Option.
2.16 OPTION. An Option granted hereunder to purchase Shares.
2.17 PARENT. A parent corporation, whether now or hereafter existing,
within the meaning of Section 424(e) of the Code.
2.18 PLAN. The Phoenix Healthcare Corporation 1999 Stock Option Plan,
as amended from time to time.
2.19 SHARE. One share of the Company's Common Stock, as adjusted in
accordance with Section 5.5 of this Plan.
2.20 STOCK OPTION AGREEMENT. The Agreement containing the terms and
conditions of a stock Option grant.
2.21 SUBSIDIARY. A subsidiary corporation, whether now or hereafter
existing, within the meaning of Section 424(f) of the Code.
ARTICLE 3
PLAN ADMINISTRATION
3.1 ADMINISTRATION. (a) The Plan shall be administered by the Board.
The Board shall have full discretion to administer and interpret the Plan and to
adopt such rules, regulations, and procedures as it deems necessary or
advisable. The Board may engage a qualified brokerage or other financial
services firm to assist it in the administration of the Plan.
(b) Records shall be kept of any actions taken by the Board. A
majority of the Board shall constitute a quorum at any meeting. Any acts
approved either (i) by a majority of the Directors present at any meeting at
which there is a quorum or (ii) in writing by all Directors, shall be deemed to
be acts of the Board for purposes of this Plan.
(c) The Board may delegate any or all of its powers and duties
hereunder to one or more (i) committees consisting of such members of the Board
as it may designate, or (ii)
3
<PAGE>
Employees. The interpretation of, and all actions taken under, the Plan by the
Board or its delegate shall be final, binding, and conclusive on all interested
parties, including the Company, its shareholders, and all former, present, and
future Employees, Directors and Consultants. The Board may, as to questions of
accounting, rely conclusively upon any determinations made by independent public
accountants of the Company.
ARTICLE 4
ELIGIBILITY FOR GRANTS
4.1 ELIGIBILITY AND TERMS OF GRANTS. The Board shall have full
discretionary authority to determine the persons eligible to receive an Option,
the time or times at which the Optioned Shares may be purchased, and whether all
of the Options may be exercised at one time or in increments.
4.2 GRANTING OF OPTIONS. (a) The granting of any Option shall be
entirely in the discretion of the Board and nothing in the Plan shall be
construed as giving any Employee, Director or Consultant any right to
participate under this Plan or to receive any Option or right under it.
(b) The Board may, in its sole discretion, accept the
cancellation of outstanding Options in return for the grant of new Options for
the same or different number of Shares and at the same or different Option
Price.
(c) No person may be granted options under this Plan for more
than seven hundred and fifty thousand (750,000) Shares. This limitation shall be
construed and applied in accordance with Section 162(m) of the Code.
ARTICLE 5
GENERAL PROVISIONS
5.1 STOCK SUBJECT TO PLAN. Subject to the provisions of Section 5.5,
the maximum number of Shares for which Options may be granted pursuant to this
Plan is three million (3,000,000). Shares subject to any unexercised Option
granted under this Plan which has expired or terminated shall again become
available under this Plan. The Shares which may be issued or delivered under the
Plan may, as determined by the Board from time to time in its sole discretion,
be authorized but unissued Shares, reacquired Shares or both.
4
<PAGE>
5.2 TERM AND EXPIRATION OF OPTIONS. Each Option granted under this Plan
shall be evidenced by a Stock Option Agreement, shall be subject to such
amendment or modification from time to time as the Board shall deem necessary or
appropriate to comply with or take advantage of applicable laws or regulations,
and shall, in addition to such other terms as the Board may include, provided:
(a) that, subject to Section 5.2 (b), the Option may be
exercised only by the Optionee or Optionee's personal representative;
(b) that no Option shall be transferable by the Optionee or by
operation of law other than by will of, or by the laws of descent and
distribution applicable to, a deceased Optionee and that the Option and any and
all rights granted to the Optionee thereunder and not previously exercised shall
automatically terminate and expire upon any sale, transfer, or hypothecation or
any attempted sale, transfer, or hypothecation of such rights or upon the
bankruptcy or insolvency of the Optionee or Optionee's estate;
(c) that subject to the foregoing provisions, a Option may be
exercised at different times for portions of the total number of Shares which
have vested, provided that no Option may be exercised for a fraction of a Share;
(d) that no Optionee shall have the right to receive any
dividend on or to vote or exercise any right in respect to any Shares unless and
until the certificates for such Shares have been issued to such Optionee;
(e) that the Option shall expire at the earliest of the
following:
(i) the date specified in the Stock Option Agreement;
(ii) with respect to any Optionee,
(A) three (3) months after voluntary or
involuntary termination of Optionee's position as Employee,
Director or Consultant other than termination as described in
subparagraph (B) or (C) below;
(B) upon the discharge of Optionee for
dishonesty, gross negligence, willful misconduct, or conduct
that adversely affects the interests of the Company (or any
Parent or Subsidiary); or
(C) twelve (12) months after Optionee's
death or Disability.
(f) that, to the extent an Option provides for the vesting
thereof in increments, such vesting shall cease as of the date of the Optionee's
death, Disability, or ceasing to be an Employee, Director or Consultant, as
applicable;
(g) that the terms of the Option shall not be affected by any
change of duties or position so long as the Optionee shall continue to be
employed by, or be a Director of, or a Consultant to the Company or a Parent or
Subsidiary.
5
<PAGE>
5.3 NOTICE OF INTENT TO EXERCISE OPTION. An Option may be exercised in
whole or in part by notifying the Board (or its designee) in the manner and upon
the terms as may be provided in the Optionee's Stock Option Agreement.
5.4 EXERCISE OF OPTION. Upon receipt by the Board (or its designee) of
the notice provided in Section 5.3, an Option shall be deemed to be exercised as
to the number of Shares specified in such notice and Shares in that amount shall
be issued to the Optionee upon payment to the Company of the Option Price as
specified in Section 6.2 hereof. Payment of the Option Price shall be made in
cash (or cash equivalent) in United States dollars or already-owned Shares
(provided such shares have been owned by the Optionee for at least six months),
and may (as permitted by the Board in its sole discretion) be done in accordance
with any procedures for a "cashless exercise" established by the Company with a
brokerage or other qualified financial services company.
5.5 RECAPITALIZATION. Subject to any required action by the
stockholders of the Company, the aggregate number of Shares for which Options
may be granted hereunder, the number of Shares covered by any outstanding
Option, and the price per Share thereof under each such Option shall be
proportionately adjusted for the following: (a) Any dividend or other
distribution declared as to Common Stock which is payable in Shares; and (b) an
increase or decrease in the number of outstanding shares of Common Stock
resulting from a stock split or reverse split of shares, recapitalization or
other capital adjustment. All fractional Shares or other securities which result
from such an adjustment shall be eliminated and not carried forward to any
subsequent adjustment.
5.6 SUBSTITUTIONS AND ASSUMPTIONS. The Board shall have the right to
substitute or assume Options in connection with a stock dividend, stock split,
share combination, share exchange, recapitalization, merger, consolidation,
reorganization, or like corporate transaction which affects the number or nature
of the Shares. The number of Shares reserved pursuant to Section 5.1 may be
increased without further action by the stockholders by the corresponding number
of Options assumed and, in the case of a substitution, by the net increase in
the number of Shares subject to Options before and after the substitution. All
fractional Shares or other securities which result from such substitution shall
be eliminated and not carried forward to any subsequent substitution.
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5.7 WITHDRAWAL. An Optionee may at any time elect in writing to abandon
an Option with respect to the number of Shares as to which the Option shall not
have been exercised.
5.8 COMPLIANCE WITH APPLICABLE LAWS AND CERTIFICATE OF INCORPORATION.
(a) The Company shall have the right to place appropriate legends upon the
certificate for any Shares issued pursuant to this Plan and take such other acts
as it may deem necessary or appropriate to ensure that the issuance of Optioned
Shares complies with applicable provisions of state and federal securities laws.
(b) The Company shall not be obligated to issue Shares under
any Option granted under this Plan that would violate any law, rule or
regulation. Each Optionee may be required to make representations and
warranties, enter into restrictive agreements, or take such other actions as may
be deemed necessary or appropriate by the Company to ensure compliance with
applicable law and the Company's Certificate of Incorporation and By-laws.
ARTICLE 6
RULES FOR NONQUALIFIED STOCK OPTIONS
6.1 OPTION PRICE. The purchase price of Shares subject to a
Nonqualified Stock Option shall be determined by the Board at the time the
Option is granted; provided, that the purchase price shall not be less than
eighty percent (80%) of the Fair Market Value of such Shares on the date of the
grant.
6.2 PAYMENT UPON EXERCISE OF OPTION. The amount to be paid by the
Optionee upon exercise of a Nonqualified Stock Option shall be the full purchase
price for the Optioned Shares, together with the amount of any required federal,
state, and local tax withholding (as determined by the Company in its sole
discretion). The Company may, in its sole discretion, permit an Optionee to
elect to pay the required tax withholding by having the Company withhold Shares
having a Fair Market Value at the time of exercise equal to the amount required
to be withheld. An election by an Optionee to have Shares withheld for this
purpose will (together with such additional restrictions as the Company may
impose) be subject to the following:
(a) If an Optionee has received multiple Option grants, a
separate election must be made for each grant;
(b) The election must be made prior to the date the Option is
exercised;
(c) The election will be irrevocable; and
(d) The election may be rejected by the Company.
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ARTICLE 7
SPECIAL RULES FOR INCENTIVE STOCK OPTIONS
7.1 CONFORMANCE WITH CODE REQUIREMENTS. Incentive Stock Options granted
under this Plan shall conform to, be governed by, and be interpreted in
accordance with Section 422 of the Code and any regulations thereunder
including, without limitation, those provisions of Section 422 of the Code that
prohibit an option by its terms to be exercisable after ten (10) years from the
date that it was granted. Only Employees may be granted Incentive Stock Options.
To the extent that any option granted as an Incentive Stock Option fails to
conform to the applicable requirements, it shall be treated and honored by the
Company as a Nonqualified Stock Option.
7.2 OPTION PRICE. The purchase price of each Share optioned under the
Incentive Stock Option provisions of this Plan shall be determined by the Board
in its sole discretion but shall, in no event, be less than the Fair Market
Value on the date of grant.
7.3 LIMITATION ON AMOUNT OF INCENTIVE STOCK OPTIONS. The aggregate Fair
Market Value (determined on the date of grant) of the Shares with respect to
which Incentive Stock Options are exercisable by any individual for the first
time during any calendar year under all plans of the Company (and any Parent or
Subsidiary) shall not exceed $100,000 (or such other limit as may be established
by law from time to time).
7.4 LIMITATION ON GRANTS TO SUBSTANTIAL SHAREHOLDERS. An Employee may
not, immediately prior to the grant of an Incentive Stock Option hereunder, own
stock in the Company representing more than ten percent (10%) of the voting
power of all classes of stock of the Company unless the per share option price
specified by the Board for the Incentive Stock Options granted such an Employee
is at least one hundred ten percent (110%) of the Fair Market Value of the
Company's stock on the date of grant and such option, by its terms, is not
exercisable after the expiration of five (5) years from the date such option is
granted. For purposes of this limitation, Section 424(d) of the Code governs the
attribution of stock ownership.
7.5 PAYMENT UPON EXERCISE OF OPTION. The amount to be paid by the
Optionee upon exercise of an Incentive Stock Option shall be the full purchase
price thereof provided in the option.
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ARTICLE 8
AMENDMENT AND TERMINATION
8.1 AMENDMENT. (a) The Board shall have the right to amend the Plan at
any time and from time to time; provided, that no such amendment of the Plan
shall, without stockholder approval, be effective if stockholder approval of the
amendment is required at such time to qualify for any available exemption from
Section 16 of the Exchange Act or by any other applicable law, regulation, rule
or order.
(b) No amendment may be made that would cause Options not to
qualify for exemption under Section 16 of the Exchange Act.
(c) No amendment of the Plan shall, without the written
consent of the holder of a Option awarded under the Plan prior to the date of
the amendment or termination, adversely affect the rights of such holder with
respect to such Option (except to the extent necessary to comply with any
applicable law, regulation, rule or order).
(d) Notwithstanding anything herein or in any Stock Option
Agreement to the contrary, the Board shall have the power to amend the Plan in
any manner deemed necessary or advisable for Options to qualify for any
exemption provided under Section 16 of the Exchange Act and any such amendment
shall, to the extent deemed necessary or advisable by the Board, be applicable
to any outstanding Options previously granted under the Plan. In the event of
such an amendment to the Plan, the holder of any Option shall, upon request of
the Board and as a condition for exercising of such Option, execute a conforming
amendment in the form prescribed by the Board to the Stock Option Agreement
within such reasonable period of time as the Board shall specify in such
request.
8.2 TERMINATION. The Board shall have the right to terminate the Plan
at any time; provided, that no such termination shall terminate any outstanding
Option previously granted under the Plan or adversely affect the rights of such
holder without his or her written consent. No new Options may be granted under
the Plan on or after the date of termination.
ARTICLE 9
MISCELLANEOUS
9.1 REGISTRATION, LISTING AND QUALIFICATION OF SHARES. Each Option
shall be subject to the requirement that if at any time the Board shall
determine that the registration, listing, or
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qualification of the Shares covered thereby upon any securities exchange or
market or under any foreign, federal, state, or local law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Option or the purchase
of Shares thereunder, no such Option may be exercised unless and until such
registration, listing, qualification, consent, or approval shall have been
effected or obtained free of any condition not acceptable to the Company. Any
person exercising an Option shall make such representations, warranties and
agreements and furnish such information as the Board or the Company may request
to assure compliance with the foregoing or any other applicable legal
requirements.
9.2 NO RIGHTS TO CONTINUED EMPLOYMENT OR OTHER RETENTION; NO
RESTRICTIONS. Neither this Plan nor any action taken hereunder shall be
construed as giving any Employee, Director or Consultant any right to be
retained in such position or status by the Company or any Parent or Subsidiary.
Nothing in this Plan shall restrict the Company's rights to adopt other Option
plans pertaining to any or all of the Employees, Directors or Consultants
covered under this Plan or other Employees, Directors or Consultants not covered
under this Plan.
9.3 COSTS AND EXPENSES. Except as provided herein, all costs and
expenses of administering the Plan shall be paid by the Company.
9.4 PLAN UNFUNDED. This Plan shall be unfunded. Except for the Board's
reservation of a sufficient number of authorized Shares to the extent required
by law to meet the requirements of the Plan, the Company shall not be required
to establish any special or separate fund or to make any other segregation of
assets to assure payment of any grant under the Plan.
9.5 GOVERNMENT REGULATIONS. The rights of Optionees and the obligations
of the Company hereunder shall be subject to all applicable laws, rules, and
regulations and to such approvals as may be required by any governmental agency.
9.6 PROCEEDS FROM SALE OF STOCK. Proceeds of the purchase of Optioned
Shares by an Optionee may be used by the Company for any business purpose.
9.7 GOVERNING LAW. This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware.
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9.8 INVALIDITY. If any provision of the Plan shall be held invalid or
unlawful for any reason, such event shall not affect or render invalid or
unenforceable the remaining provisions of the Plan.
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Exhibit 4.2
PHOENIX HEALTHCARE CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. The purpose of the Phoenix Healthcare Corporation
Employee Stock Purchase Plan (the "Plan") is to provide a convenient means for
Employees of the Company and of any Subsidiary that elects to participate in the
Plan (with the consent of the Company) to acquire an ownership interest in the
Company. The Plan is intended to qualify as an Employee Stock Purchase Plan
under Section 423 of the Code.
2. DEFINITIONS. The following terms as used in this Plan shall
have the meaning specified below, unless the context clearly indicates
otherwise.
(a) "ACCOUNT" means the bookkeeping account established for
an Employee to which the funds deducted or paid from the Employee's Compensation
pursuant to the terms of the Plan to purchase Shares shall be credited. The
funds allocated to a Participant's Account shall at all times remain the
property of the Participant, but such funds may be commingled with the general
assets of the Company.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as
amended, and any regulations thereunder.
(d) "COMPANY" means Phoenix Healthcare Corporation and any
successor to such corporation, whether by merger, consolidation, liquidation or
otherwise.
(e) "COMPENSATION" means a Participant's total compensation
from the Company or any participating Subsidiary payable during the applicable
Semi-Annual Period.
(f) "EMPLOYEE" means any officer or other common law
employee of the Company, or any Subsidiary of the Company which participates in
the Plan with the consent of the Company.
(g) "ESPP BROKER" means a qualified stock brokerage or other
financial services firm that has been designated by the Board.
(h) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended (and any rules and regulations thereunder then in effect).
(i) "FAIR MARKET VALUE" of a Share means, as of any given
date, (i) the price of the last trade of a Share as reported on NASDAQ or the
OTC bulletin board, as applicable, for
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that date (or if Shares were not traded on such date, for the closest preceding
date on which a trade occurred), or (ii) if the Shares are not publicly traded,
the fair market value of a Share as determined by the Board in good faith, using
such criteria as the Board may, in its sole discretion, deem appropriate.
(j) "HOLDING PERIOD" means the holding period that is set
forth in Section 423(a) of the Code, which, as of the date that the Company
adopted this Plan, is (i) the two (2) year period that begins on the first day
of the applicable Semi-Annual Period or (ii) the one (1) year period that begins
on the date the applicable Shares are transferred to the Participant under the
Plan, whichever end later.
(k) "PARTICIPANT" means each (i) Employee who is eligible
to, and elects to, participate in the Plan in accordance with the terms of the
Plan, and (ii) any Employee or former Employee who has an Account under the
Plan.
(l) "PLAN" means the Phoenix Healthcare Corporation Employee
Stock Purchase Plan, as amended from time to time.
(m) "SEMI-ANNUAL PERIOD" means the six (6) month period
ending on the last day of June and December of each year, with the first
Semi-Annual Period to begin on such date as may be established by the Board.
(n) "SHARES" means the shares of the Common Stock of the
Company, subject to adjustment pursuant to Section 14 of the Plan.
(o) "SUBSIDIARY" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if each
of the corporations other than the last corporation in the unbroken chain owns
stock possessing at least fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.
3. SHARES SUBJECT TO THE PLAN. Subject to adjustment pursuant
to Section 14 of the Plan, the aggregate number of Shares which may be purchased
under the Plan is one million (1,000,000). The Shares may be authorized but
unissued shares, reacquired shares, or any combination thereof.
4. ELIGIBILITY. Any Employee of the Company or a participating
Subsidiary is eligible to become a Participant on the first day of the
Semi-Annual Period following the Employee's date of hire.
5. JOINING THE PLAN.
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(a) An eligible Employee's participation in the Plan shall
be effective as of the first day of the Semi-Annual Period following the date on
which the Employee completes, signs and returns to the Board such forms as may
be required to enroll in the Plan (or at such other time as may be permitted by
the Board in its sole discretion).
(b) Participation by any eligible Employee in the Plan is
entirely voluntary.
6. RESTRICTIONS ON PARTICIPATION. Notwithstanding anything
herein to the contrary:
(a) No Participant shall be permitted to contribute towards
the purchase of any Shares under the Plan if such Participant, immediately after
such contribution, would own Shares (including all Shares that may be purchased
under outstanding subscriptions under the Plan) that account for five percent
(5%) or more of the total combined voting power or value of all classes of stock
of the Company or its Subsidiaries (as determined under the rules of Section
424(d)of the Code).
(b) No Participant shall be granted a right to contribute
towards the purchase of any Shares under the Plan that permits such
Participant's rights to purchase Shares under all "employee stock purchase
plans" of the Company and its Subsidiaries to accrue at a rate that exceeds
$25,000 worth of such Shares (determined using the Fair Market Value of a Share
at the time such right to contribute is granted) for each calendar year in which
such right to contribute is outstanding at any time.
7. EMPLOYEE CONTRIBUTIONS.
(a) Each Employee may elect (on such forms as may be
required by the Board in its sole discretion) to contribute by payroll deduction
of up to 10% of his or her Compensation payable during a Semi-Annual Period (or
such other amount or percentage as may be permitted by the Board in its sole
discretion).
(b) Subject to the limits set forth in (a) above, an
Employee may elect at any time (on such forms as may be required by the Board in
its sole discretion) to increase or decrease his or her rate of contribution.
Except as otherwise provided in the Plan, any such change shall become effective
as the first day of the Semi-Annual Period following receipt of such election by
the Board (or at such other time as may be permitted by the Board in its sole
discretion).
(c) Any contributions made by an Employee under the Plan
shall be credited to the Employee's Account. No interest shall be paid on funds
credited to a Participant's Account.
8. ISSUANCE OF SHARES.
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(a) On the last trading day of each Semi-Annual Period, the
contributions credited to a Participant's Account as of that date shall be
applied to the purchase of Shares; provided that no such purchase shall be made
on the Participant's behalf if so required by an event described in Section 9
below. Except as otherwise provided by the Board, only whole Shares may be
purchased under the Plan.
(b) The per share cost for the Shares purchased pursuant to
the Plan shall be 85% of the lower of (i) the Fair Market Value of a Share on
the first trading day of the Semi-Annual Period (the "date of the grant"), or
(ii) the Fair Market Value of a Share on the last trading day of the Semi-Annual
Period (the "date of exercise").
(c) Any funds remaining in a Participant's Account after the
purchase of Shares at the conclusion of a Semi-Annual Period shall, unless
otherwise requested by the Participant, be carried over and applied in the next
Semi-Annual Period.
(d) If the aggregate number of Shares that all Participants
in the Plan desire to purchase in any Semi-Annual Period exceeds the number of
Shares then available under the Plan, the Shares available shall be allocated
among such Participants in proportion to their contributions during the
Semi-Annual.
(e) Notwithstanding any other provision herein to the
contrary, the obligation to purchase, issue or deliver Shares under the Plan
shall (to the extent deemed necessary or appropriate by the Company or Board) be
subject to (i) the effectiveness of a registration statement under the
Securities Act of 1933, as amended, with respect to such Shares, and (ii) any
other applicable law, regulation, rule or order.
(f) Unless otherwise provided by the Board, any Shares
purchased by a Participant shall be deposited into an account that is
established in the Participant's name with the ESPP Broker and shall be subject
to the following:
(i) A Participant may direct, by written
notice to the Company prior to the conclusion of a Semi-Annual
Period, that the ESPP Broker account be established in the name of
the Participant and one such other person as may be designated by
the Participant as joint tenants with right of survivorship,
tenants in common, or community property, to the extent and in the
manner permitted by applicable law.
(ii) A Participant shall be free to
undertake a disposition, as that term is defined in Section 424(c)
of the Code (which generally includes any sale, exchange, gift or
transfer of legal title), of Shares in the Participant's ESPP
Broker account at any time, whether by sale, exchange, gift or
other transfer of title. Subject to subparagraph (iii) below, in
the absence of such a disposition of the Shares, all Shares must
remain in the Participant's account at the ESPP Broker until the
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applicable Holding Period for the Shares has been satisfied. For
Shares for which the Holding Period has been satisfied, a
Participant may move such Shares to an account at another
brokerage firm of the Participant's choosing or request that a
certificate representing the Shares be issued and delivered to the
Participant.
(iii) A Participant who is not subject to
United States taxation may, at any time and without regard to the
applicable Holding Period, move his or her Shares to an account at
another brokerage firm of the Participant's choosing or request
that a certificate that represents the Shares be issued and
delivered to the Participant.
9. TERMINATION OF CONTRIBUTIONS.
(a) The contributions of an Employee under the Plan shall
terminate (and no further contributions shall be made on his or her behalf) as
of the date on which the Employee (i) elects to revoke his or her payroll
deduction contribution for a Semi-Annual Period, (ii) ceases to be an Employee,
(iii) dies, (iv) ceases to receive Compensation for the remainder of a
Semi-Annual Period, or (v) to the extent required by law or regulation, receives
a hardship distribution under tax-qualified section 401(k) plan sponsored by the
Company or any affiliate. Upon ceasing contributions under the Plan, an Employee
shall (if applicable) be entitled to recommence contributions in accordance with
the terms of Section 5; provided that in the case of a termination under (a)(v),
the terminated Participant may not do so for a period of 12 months following the
date of the hardship withdrawal (or other period specified under the section
401(k) plan).
(b) Other than for the cessation of contributions under
Section 9(a) (ii) and (iii), Shares shall (except as provided in Section 9(c))
be purchased for the Participant for the Semi-Annual Period based upon the
balance in the Participant's Account as of that date, and payment of any funds
remaining in the Account (after the purchase of Shares) shall be made to the
Participant as soon as administratively feasible.
(c) In the case of a revocation of a payroll deduction
election under Section 9(a)(i), the Participant also may elect at any time prior
to the last trading day of the Semi-Annual Period (under such procedures as may
be established by the Board) to have any funds remaining in his or her Account
paid to him or her. Such payment shall be made as soon as administratively
feasible after such an election is submitted in accordance with any applicable
procedures.
(d) In the case of a cessation of contributions under
Section 9(a)(iii), any funds remaining in the Participant's Account shall be
applied in accordance with Section 10(a).
(e) In the case of a cessation of contributions under
Section 9(a)(ii), any funds remaining in the Participant's Account shall be
returned to the Participant as soon as
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administratively feasible after the date on which the Participant terminates
employment.
10. DEATH OF A PARTICIPANT.
(a) Upon the death of a Participant, the contributions
credited to a Participant's Account shall be retained and applied in accordance
with Section 8 and the Participant's beneficiary (see Section 10(b)) shall
thereafter be entitled to the Shares (and cash, if any) credited to the
Participant's Account. Any distribution to a beneficiary hereunder shall be in
full satisfaction of the obligations owing to the deceased participant under the
Plan. If more than one beneficiary is designated, each beneficiary shall be
entitled to the portion of the Participant's Account designated by the
Participant, or if no such designation is made, each beneficiary shall receive
an equal portion of the Shares and proceeds.
(b) Each Participant may designate (on such forms as may be
required by the Board) a beneficiary under the Plan. A previous designation may
be changed by a Participant at any time by the submission of a new designation
form to the Board prior to the Participant's death. If a Participant has not
designated a beneficiary or the designated beneficiary is not living on the
Participant's date of death, the Participant's beneficiary shall be his or her
estate.
11. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Board. The Board
shall have the full discretion to interpret and administer the Plan and to adopt
such rules, regulations and procedures as it deems necessary or advisable from
time to time. The Board may delegate any or all of its powers and duties
hereunder to one or more (i) committees consisting of such members of the Board
as it may designate, or (ii) Employees. The interpretation of, and all actions
taken under, the Plan by the Board or its delegate shall be final, binding, and
conclusive on all interested parties, including the Company, its shareholders,
and all former, present, and future Employees. The Board may, as to questions of
accounting, rely conclusively upon any determinations made by independent public
accountants of the Company.
(b) A majority of the Board shall constitute a quorum, and
the acts of a majority of the members of the Board present at any meeting at
which a quorum is present, or acts approved in writing by a majority of the
members of the Board, shall be deemed the acts of the Board.
(c) Unless otherwise directed by the Board, all costs and
expenses of administering the Plan shall be paid by the Company and the other
participating employers (as determined by the Board in its sole discretion).
12. AMENDMENT.
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(a) The Board shall have the right to amend the Plan at any
time and from time to time; provided, that no such amendment of the Plan shall,
without stockholder approval, be effective if stockholder approval of the
amendment is required to comply with Section 423 of the Code or any other
applicable law, regulation, rule or order.
(b) No amendment may be made that would cause the purchase
of Shares under the Plan not to qualify for exemption under Section 16 of the
Exchange Act.
(c) Notwithstanding anything herein to the contrary, the
Board shall have the power to amend the Plan in any manner deemed necessary or
advisable for the purchase of Shares under the Plan to qualify for any exemption
provided under Section 16 of the Exchange Act and any such amendment shall, to
the extent deemed necessary or advisable by the Board, be applicable to any
existing Accounts.
13. TERMINATION. The Board shall have the right to terminate
the Plan at any time. Upon termination, each Participant shall be entitled to
payment of his or her Account balance as soon as administratively feasible after
the date the Plan is terminated and Participants shall have no further rights
hereunder. Unless terminated earlier by action of the Board, the Plan shall
remain in effect until such time as no Shares remain available for issuance
under the Plan and the Participants and their employers have no further rights
or obligations (as applicable) under the Plan.
14. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Appropriate
and proportionate adjustments shall be made in the number and class of shares
subject to this Plan in the event of a share dividend, share split, reverse
share split, recapitalization, reorganization, merger, consolidation,
acquisition, separation or like change in the capital structure of the Company.
15. TRANSFERABILITY OF RIGHTS. No rights or interests of a
Participant under this Plan may be voluntarily or involuntarily transferred, by
operation of law or otherwise, other than by will or the laws of descent and
distributions, and such rights and interests shall not be subject to a
Participant's debts, contracts or liabilities.
16. PARTICIPATION IN OTHER BENEFIT PLANS. Nothing herein
contained shall affect an Employee's rights to participate in and receive
benefits under and in accordance with the then current provisions of any
pension, insurance or other employee benefit plan or program offered by his or
her employer.
17. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in this Plan
shall confer upon any Employee any right to continued employment with the
Company or any affiliate, or interfere with or restrict in any way the rights of
the Company or affiliate to discharge the
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Employee at any time for any reason whatsoever, with or without cause.
18. NO SHAREHOLDER RIGHTS CONFERRED. Nothing contained in the
Plan shall confer upon a Participant (or his or her beneficiary) any rights of a
holder of Shares unless and until Shares are issued to the Participant (or his
or her beneficiary).
19. GOVERNING LAW. To the extent not preempted by Federal law,
the Plan shall be construed in accordance with and governed by the internal laws
of the State of Delaware.
20. SEVERABILITY. In the event any provision of the Plan or
any action taken pursuant to the Plan shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining parts of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid
provision had not been included, and the illegal or invalid action shall be
deemed null and void.
21. WITHHOLDING TAXES. To the extent required by applicable
law or regulation, each Participant shall arrange with his or her employer for
the payment of any required federal, state or local income or other tax
withholding applicable to the receipt of Shares under the Plan prior to the
delivery of the Shares to the Employee.
22. NOTICES. Any notice or other communication required or
permitted to be given pursuant to the Plan must be in writing and may be given
by registered or certified mail, and if given by registered or certified mail,
shall be determined to have been given and received on the date three days after
a registered or certified letter containing such notice, properly addressed with
postage prepaid, is deposited in the United States mails; and if given other
than by registered or certified mail, it shall be deemed to have been given when
delivered to and received by the party to whom addressed. Notice shall be given
to Participants at their most recent addresses shown in the Company's records.
Notice to the Board shall be sent to the Board at the Company's principal
executive offices to the attention of the Chairman and Chief Executive Officer
of the Company. Notice to an employer shall be sent to the employer's principal
executive offices to the attention of its Chief Financial Officer.
23. CONSTRUCTION. Titles and headings of sections and articles
of this Plan are for convenience of reference only and shall not affect the
construction of any provision of this Plan. Unless the context clearly requires
otherwise, the singular shall include the plural.
24. EFFECTIVE DATE OF PLAN. The Plan shall become effective as
of the date established by the Board.
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Exhibit 4.3
IATROS HEALTH NETWORK, INC.
1999 SHARE AWARD PLAN
ARTICLE 1
THE PLAN
1.1. NAME. The name of this Plan is the Iatros Health Network, Inc.
1999 Share Award Plan.
1.2 PURPOSE AND SCOPE. (a) The purposes of the Plan are to (i) attract
and retain the best available personnel for positions of substantial
responsibility, (ii) provide an additional inducement for eligible persons to
continue to provide services to the Company (or its affiliates) as an employee
or consultant, and (iii) promote the continued business success of the Company
(and its affiliates) by creating a long-term mutuality of interests between Plan
participants and the Company's shareholders.
(b) The Plan provides for the granting of Company Shares.
Grants may be made to both Employees and Consultants.
1.3 EFFECTIVE DATE AND DURATION OF PLAN. The effective date of the Plan
shall be March 1, 1999. No Shares may be issued under the Plan subsequent to
December 31, 2008; provided that any award made under the Plan prior to the
termination date shall continue in effect in accordance with the terms of that
grant.
ARTICLE 2
DEFINITIONS
Capitalized terms in this Plan shall have the following meanings
(unless the context plainly requires that a different meaning apply):
2.1 AFFILIATE. Any parent, subsidiary or other affiliate (as may be
designated by the Board) of the Company.
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2.2 AWARDEE. An Employee or Consultant to whom a Share grant has been
made under the terms of this Plan.
2.3 BOARD. The Board of Directors of the Company.
2.4 CODE. The Internal Revenue Code of 1986 (and the rules and
regulations thereunder), as amended from time to time, or any replacement
legislation.
2.5 COMPANY. Iatros Health Network, Inc., and any successor to such
company, whether by merger, consolidation, liquidation or otherwise.
2.6 CONSULTANT. Any person engaged by the Company or any Affiliate as
an independent contractor (non-Employee) to provide services pursuant to the
terms of a written contract or otherwise.
2.7 DISABILITY. Permanent and total disability within the meaning of
Section 22(c)(3) of the Code.
2.8 EMPLOYEE. All persons employed by the Company or any Affiliate,
including officers, whether full-time or part-time.
2.9 EXCHANGE ACT. The Securities Exchange Act of 1934 (and the rules
and regulations thereunder), as amended from time to time, or any replacement
legislation.
2.10 PLAN. The Iatros Health Network, Inc. 1999 Share Award Plan, as
amended from time to time.
2.11 SHARE. One share of the Company's common stock, par value $0.001
per share, as adjusted in accordance with Article 7.
ARTICLE 3
PLAN ADMINISTRATION
3.1 ADMINISTRATION. (a) The Plan shall be administered by the Board.
The Board shall have full discretion to administer and interpret the Plan and to
adopt such rules, regulations, and procedures as it deems necessary or advisable
for the administration and operation of the Plan.
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(b) Records shall be kept of any actions taken by the Board
under the Plan. A majority of the Board shall constitute a quorum at any
meeting. Any acts approved either (1) by a majority of the members present at
any meeting at which there is a quorum or (2) in writing by all members of the
Board, shall be deemed to be acts of the Board for purposes of this Plan.
(c) The Board may delegate any or all of its powers and duties
hereunder to one or more (1) committees consisting of such members of the Board
as it may designate, or (2) employees of the Company or any Affiliate. The
interpretation of, and all actions taken under, the Plan by the Board or its
delegate shall be final, binding, and conclusive on all interested parties,
including the Company, its shareholders, and all former, present, and future
Employees and Consultants. The Board may, as to questions of accounting, rely
conclusively upon any determinations made by independent public accountants of
the Company.
ARTICLE 4
SHARES AVAILABLE UNDER THE PLAN
4.1 AVAILABLE SHARES. (a) Subject to any adjustment or substitution as
may be required in Article 7, the aggregate number of Shares which may be issued
or delivered and as to which grants may be made under the Plan is four hundred
thousand (400,000). If any Shares awarded under the Plan are forfeited for any
reason, the number of shares so forfeited shall again be available for purposes
of the Plan.
(b) The Shares which may be issued or delivered under the Plan
may, as determined by the Board from time to time in its sole discretion, be
either authorized but unissued shares, reacquired shares or both.
ARTICLE 5
ELIGIBILITY AND AWARDS OF SHARES
5.1 ELIGIBILITY FOR AWARDS. Share awards under the Plan may be made, in
the discretion of the Board, to either Employees or Consultants.
5.2 AWARD OF SHARES. The Board may award eligible persons Shares in
such amounts and upon such terms and conditions as it may determine in its sole
discretion. The award of Shares, the number of shares covered by such award, and
the terms and conditions thereof shall
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be entirely within the discretion of the Board and nothing in the Plan shall be
construed as giving any Employee or Consultant any right to participate under
this Plan.
ARTICLE 6
TERMS AND CONDITIONS OF SHARE AWARDS
6.1 WRITTEN AGREEMENT. Restricted Share awards shall be evidenced by a
written agreement, which shall set forth: (a) the number of Shares granted to an
Awardee, (b) the restrictions imposed thereon, if any, (c) the duration of any
restrictions, and (4) such other terms and conditions as the Board (or its
delegate) may deem necessary or appropriate in its sole discretion. Share awards
shall be effective upon execution of the agreement by the Company and the
Awardee. The Company's Chief Executive Officer, Chief Operating Officer or their
delegate may execute the agreement on behalf of the Company.
6.2 TERMS AND CONDITIONS OF SHARE AWARDS. Each Share grant made under
this Plan shall, in addition to such other terms and conditions as the Board may
impose, be subject to the following:
(a) Unless otherwise provided by the Board, any Share award
hereunder shall vest as follows: (i) One-third of the Shares awarded as of the
first anniversary of the date of the award, (ii) an additional one-third of the
Shares as of second anniversary of the date of the award, and (iii) the final
one-third of the Shares as of third anniversary of the date of the award.
(b) Notwithstanding subsection (a), in the event there is a
change in control, any outstanding Share awards shall become fully vested
(unless otherwise provided by the Board) as of the date of such an event.
(c) Unless otherwise provided by the Board, upon the Awardee's
death, Disability, or termination as an Employee or Consultant, the nonvested
portion (if any) of his or her Share award shall be forfeited.
(d) Nonvested Shares may not be sold, transferred, encumbered
or otherwise disposed of by the Awardee at any time.
(e) For purposes of this Plan, "change in control" means shall
mean: (i) the sale of substantially all of the assets of the Company to another
person or entity (other than an Affiliate), (ii) the acquisition of actual or
beneficial ownership of more than fifty percent of the
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total combined voting power of all classes of Company stock entitled to vote by
a person or group of persons acting in concert (other than an Affiliate) who did
not own more than fifty percent of such on the date of the Share Award, or (iii)
the merger of the Company into another entity (other than an Affiliate), where
the Company's shareholders (determined as of the date of merger) own (directly
or indirectly) less than fifty percent of the total combined voting power of all
classes of stock of the surviving entity.
6.3 ESCROW FOR RESTRICTED SHARES. (a) Following a Share award hereunder
and prior to the lapse or termination of all vesting and other restrictions for
a Share award, the awarded Shares shall be held by the Company in escrow. Upon
the lapse or termination of all restrictions applicable to all or any portion of
an Award, a Share certificate for the nonrestricted shares shall be delivered to
the Awardee. Upon an Awardee's death, Disability or termination of employment,
any nonvested Shares held in escrow for the Awardee shall be forfeited in
accordance with Section 6.2(c).
(b) Subject to the requirements of Section 6.4 (and such other
requirements as may be imposed by the Board in its sole discretion), the Awardee
shall be treated as the shareholder of record with respect to the awarded shares
and shall have all the rights of a shareholder with respect to such shares,
including the right to vote the shares and to receive all dividends and other
distributions paid with respect to the shares.
(c) A Share certificate for those shares awarded without any
restrictions shall be issued directly to the Awardee.
6.4 SHARE DIVIDENDS AND DISTRIBUTIONS. If a dividend or other
distribution declared with respect to Shares is payable in Shares, any Shares
distributed with respect to the Shares held in escrow hereunder also shall be
held in escrow subject to the same terms and restrictions applicable to the
escrowed Shares to which such distribution relates. If the Shares held in escrow
shall be changed into or exchangeable for a different number or kind of stock or
other securities of the Company or other corporation (whether through
reorganization, reclassification, recapitalization, stock split-up, merger or
otherwise), such substituted stock or other securities shall be held in escrow
subject to the same terms and restrictions as were applicable to the replaced
shares. Any cash or other property paid as a dividend or in lieu of a fractional
share shall be held in escrow subject to the same terms and restrictions as are
applicable to the escrowed Shares to which the payment relates.
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6.5 COMPLIANCE WITH APPLICABLE LAWS AND CORPORATE DOCUMENTS. (a) The
Company shall have the right to place appropriate legends upon the certificate
for any Shares issued pursuant to this Plan and take such other acts as it may
deem necessary or appropriate to ensure that the grant of Shares complies with
applicable provisions of state and federal securities laws.
(b) The Company shall not be obligated to issue Shares under
this Plan that would violate any law, regulation, rule or order. The Company may
require an Awardee to make representations, enter into restrictive agreements,
or take such other actions as the Company may deem necessary or appropriate to
ensure compliance with (1) any applicable law, regulation, rule or order, or (2)
the Company's Articles of Incorporation and By-Laws.
ARTICLE 7
ADJUSTMENT AND SUBSTITUTION OF SHARES
7.1 ADJUSTMENT OF SHARES. If a dividend or other distribution declared
with respect to Shares is payable in additional Shares, the number of remaining
shares set forth in Article 4 shall be adjusted by adding thereto the number of
Shares that would have been distributed thereon if such shares had been
outstanding on the date fixed for determining the stockholders entitled to
receive such Share distribution.
7.2 SUBSTITUTION OF SHARES. If the outstanding Shares shall be changed
into or exchangeable for a different number or kind of shares of stock or other
securities of the Company or other corporation (whether through reorganization,
reclassification, recapitalization, stock split-up, merger or otherwise), there
shall be substituted for each share of the remaining Shares referred to in
Article 4, the number and kind of shares of stock or other securities into which
each outstanding Shares shall be so changed or for which each such share shall
be exchangeable.
7.3 FRACTIONAL SHARES. Any fractional shares or other securities
resulting from any adjustment or substitution provided for in this Article 7
shall be eliminated and not carried forward to any subsequent adjustment or
substitution.
ARTICLE 8
WITHHOLDING
To the extent required by applicable Federal, state or local law, the
Awardee shall make such arrangements as may be required or which are
satisfactory to the Company, in its sole
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discretion, for the satisfaction of any tax withholding obligations that arise
in connection with the grant of Shares under the Plan. The Company shall not be
required to issue any Shares under the Plan until such obligations are
satisfied.
ARTICLE 9
AMENDMENT AND TERMINATION
9.1 RIGHT TO AMEND. (a) The Company shall have the right to amend the
Plan at any time and from time to time.
(b) No amendment or termination of the Plan shall, without the
written consent of an Awardee of Shares granted under the Plan prior to the date
of the amendment or termination, adversely affect the rights of the holder with
respect to such award.
(c) Notwithstanding anything herein or in any Share award
agreement to the contrary, the Company shall have the power to amend the Plan in
any manner deemed necessary or advisable for Shares awarded under the Plan to
qualify for any exemption provided under Section 16(b) of the Exchange Act, and
any such amendment shall, to the extent deemed necessary or advisable by the
Board, be applicable to any outstanding Share awards previously granted under
the Plan. In the event of such an amendment to the Plan, the Awardee of any
Share award held in escrow shall, upon request of the Company and as a condition
for obtaining such Shares out of escrow, execute a conforming amendment in the
form prescribed by the Company to the award agreement within such reasonable
period of time as the Company shall specify in such request.
9.2 RIGHT TO TERMINATE. The Company shall have the right to terminate
the Plan at any time, provided, that any outstanding awarded Share awards held
in escrow on the date of termination shall continue in effect under the terms of
the grant. No new Share awards may be granted or made under the Plan on or after
the date of termination.
ARTICLE 10
MISCELLANEOUS
10.1 REGISTRATION, LISTING AND QUALIFICATION OF SHARES. Each Share
award shall be subject to the requirement that if at any time the Board shall
determine that the registration,
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listing, or qualification of the Shares covered thereby upon any securities
exchange or market or under any foreign, federal, state, or local law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with such Share grant, no such
Shares may be transferred unless and until such registration, listing,
qualification, consent, or approval shall have been effected or obtained free of
any condition not acceptable to the Company. Any Awardee shall make such
representations, warranties and agreements and furnish such information as the
Board or the Company may request to assure compliance with the foregoing or any
other applicable legal requirements.
10.2 NO RIGHTS TO CONTINUED EMPLOYMENT; NO RESTRICTIONS. Neither this
Plan nor any action taken hereunder shall be construed as giving any Employee or
Consultant any right to be retained in the employee of the Company or any
Affiliate. Nothing in this Plan shall restrict the Company's rights to adopt
other plans pertaining to any or all of the Employees or Consultants covered
under this Plan or other Employees or Consultants not covered under this Plan.
10.3 COSTS AND EXPENSES. Except as provided herein, all costs and
expenses of administering the Plan shall be paid by the Company.
10.4 GOVERNMENT REGULATIONS. The rights of Awardees and the obligations
of the Company hereunder shall be subject to all applicable laws, rules, and
regulations and to such approvals as may be required by any governmental agency.
10.5 GOVERNING LAW. This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware.
10.6 INVALIDITY. If any provision of the Plan shall be held invalid or
unlawful for any reason, such event shall not affect or render invalid or
unenforceable the remaining provisions of the Plan.
10.7 NOTICE. Any notice, consent, election or demand required or
permitted to be given under the provisions of this Plan shall be in writing and
shall be signed by the party giving or making the same. If such notice, consent,
election or demand is to be mailed, it shall be sent by hand delivery or by
United States certified mail, postage prepaid, addressed to the addressee's last
known address. The date of such delivery or mailing shall be deemed the date of
notice, consent, election or demand.
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Exhibit 4.4
EMPLOYMENT AGREEMENT
BETWEEN
IATROS HEALTH NETWORK, INC.
AND
RONALD E. LUSK
THIS AGREEMENT made and entered into as of the 26th day of February,
1999 by and between Iatros Health Network, Inc. (the "Corporation"), a Delaware
corporation, and Ronald E. Lusk, a resident of Texas (hereinafter referred to as
"Executive").
WHEREAS, the parties, for and in consideration of the mutual and
reciprocal covenants and agreements hereinafter contained, and intending to be
legally bound hereby, do contract and agree as follows:
1. PURPOSE AND EMPLOYMENT. The Corporation's primary business (the
"Corporation's Business") is owning, leasing, operating, and managing (i) senior
living and long-term care facilities (including, but not limited to, independent
living retirement facilities; congregate care facilities; assisted living
facilities; subacute, skilled, and intermediate care nursing facilities; and
long-term acute care hospitals), (ii) home health companies and agencies, (iii)
specialty outpatient medical facilities (including, but not limited to,
comprehensive outpatient rehabilitation facilities), and (iv) companies that
provide various ancillary healthcare services (including, but not limited to,
pharmacy, durable medical supplies and equipment, wound care, rehabilitation
therapies, IV therapies, respiratory therapies, and portable X-ray). The purpose
of this Agreement is to define the relationship between the Corporation and
Executive. The Corporation hereby employs Executive, and Executive hereby
accepts employment by the Corporation, all upon the terms and conditions
hereinafter set forth.
2. POSITION AND SCOPE OF DUTIES.
(a) Executive shall serve the Corporation as its Chief Executive
Officer. At all times, Executive shall report to the Corporation's Board of
Directors, shall perform such duties, consistent with the Executive's employment
as a senior corporate executive, shall hold such other titles with respect to
the Corporation, or any of its divisions, subsidiaries, or affiliates, as the
Corporation's Board of Directors may from time to time determine, and shall
comply with all applicable provisions of the Corporation's certificate of
incorporation. Executive shall have authority to formulate policies for and
oversee all aspects of the Corporation and its divisions, subsidiaries, and
affiliates. As to employees under his jurisdiction, including those working
directly under his supervision, Executive shall use his best efforts (i) to
employ and retain only employees who are capable and willing to perform
according to applicable legal requirements and applicable policies of the
Corporation and also (ii) to assure that such personnel are properly trained and
supervised. Executive may hire and terminate the employment of any other
employee of the Corporation, or of any of its divisions, subsidiaries or
affiliates, who is under his jurisdiction.
(b) Executive shall devote his primary business time to the business
and affairs of the Corporation, excluding any periods of vacation, sick leave,
and disability to which Executive is entitled; and he shall fulfill his duties
to the Corporation to the best of his ability. However, it shall not be a
violation of this Agreement for the Executive to (i) serve on corporate, civic,
or charitable boards or committees, (ii) deliver lectures, fulfill speaking
engagements, or teach at
<PAGE>
educational institutions, and (iii) manage his personal finances and passive
investments, so long as none of such activities (singularly or collectively)
significantly interfere with the performance of the Executive's responsibilities
as an employee of the Corporation in accordance with this Agreement.
(c) A description of the specific duties and responsibilities of the
Executive is contained in Exhibit A attached to this Agreement.
3. TERM. The term of this Agreement shall be for a period of three (3)
years commencing January 1, 1999 (the "Term") unless terminated earlier by
mutual agreement of the parties or by either party in accordance with Section 9
of this Agreement. Upon completion of the original three-year Term, the
Agreement shall automatically be renewed for a period of one (1) year as of each
succeeding January 1st (beginning January 1st, 2002); provided, that the
Corporation may terminate the Agreement as of any such renewal date by providing
ninety (90) days advance written notice to the Executive.
4. COMPENSATION DURING EMPLOYMENT. For all the services to be rendered
by Executive hereunder, the Corporation shall pay to Executive a base salary,
bonuses, and incentive compensation as follows:
(a) BASE SALARY. Executive shall be paid an annual base salary of Two
Hundred Fifty Thousand dollars ($250,000.00), payable in monthly installments.
Payment of such salary may be made in shares of Corporation stock (the
"Shares"), cash, or a combination thereof, as determined by the Corporation's
Board of Directors, in their discretion, taking into account the Corporation's
cash flow requirements and any other aspect of the Corporation's financial
condition deemed relevant by the Corporation's Board of Directors. The value of
any Shares of common stock paid to the Executive under this provision shall be
based on the per share price of the last trade of Shares as reported on NASDAQ
or the OTC bulletin board, as applicable, for the last trading day of the
applicable pay period (or if Shares were not traded on such date, for the
closest preceding date on which a trade occurred). The Corporation's Board of
Directors may increase the Executive 's annual base salary effective as of any
anniversary date of this Agreement in such amounts as the Board of Directors
deems appropriate.
(b) RESTRICTED STOCK GRANT. Upon the execution of this Agreement,
Executive shall receive a one time grant of Five Hundred Thousand (500,000)
shares of the Corporation's Common Stock. Except as otherwise provided in this
Agreement, in the event the Agreement is terminated on or before the one-year
anniversary of the date of the Agreement for any reason, the shares granted to
the Executive under this provision shall be forfeited; provided, that, in the
event the Executive is terminated by the Corporation without Just Cause (as
defined in Section 9) on or after July 1, 1999, the granted shares shall not be
forfeited.
(c) INITIAL STOCK OPTIONS. Upon execution of this Agreement, Executive
shall be granted an incentive stock options for a total of 420,000 shares of the
Corporation's Common Stock under the Corporation's stock option plan (the
"Initial Stock Options"). This grant is effective as of the date of this
Agreement (or the date of grant under the plan, if later). One third of such
Initial Stock Options shall become exercisable on each successive anniversary of
the date of the Agreement, provided that the Executive is employed by the
Corporation on each such anniversary date.
(d) EXECUTIVE'S INCENTIVE COMPENSATION. Executive may be entitled to
such bonuses and incentive compensation as may be determined by the
Corporation's Board of Directors in their discretion. Each such bonus or
incentive compensation may be paid in cash or Shares as the Corporation's Board
of Directors shall determine. Such incentive compensation may also include
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options to purchase shares of the Corporation's Common Stock pursuant to a plan
established by the Corporation's Board.
5. STOCK GRANTS.
(a) If the Executive terminates employment with the Corporation for any
reason prior to date on which his right to any Shares granted to him under
Paragraph 4(b) of this Agreement becomes fully vested and nonforfeitable, the
nonvested Shares shall be forfeited on the date of his termination.
Notwithstanding the foregoing, if the Executive dies or becomes totally and
permanently disabled (as determined by the Corporation's Board of Directors)
while employed by the Corporation, the Executive's rights to any Shares granted
under this Agreement shall automatically become fully vested on the date he dies
or becomes disabled. For purposes of this Paragraph, the Executive is "disabled"
if he is incapable of performing his principal duties for the duration of this
Agreement due to a physical or mental condition.
(b) Notwithstanding (a) above, upon the occurrence of a
Change-in-Control of the Corporation, the Shares granted to the Executive under
this Agreement shall become fully vested and nonforfeitable. For purposes of
this Agreement, "Change-in-Control" shall mean (i) the sale of substantially all
of the assets of the Corporation to another person or entity (other than an
subsidiary or other affiliate of the Corporation), (ii) the acquisition of
actual or beneficial ownership of more than fifty percent of the total combined
voting power of all classes of Corporation stock entitled to vote by a person or
group of persons acting in concert (other than a subsidiary or other affiliate
of the Corporation) who did not own more than fifty percent of such on the date
of this Agreement, (iii) or the merger of the Corporation into another entity
(other than a subsidiary or other affiliate of the Corporation), where the
Corporation's shareholders (determined as of the date of the merger) own
(directly or indirectly) less than fifty percent of the shares of the surviving
entity.
(c) Until any Shares awarded under this Agreement become fully vested
and nonforfeitable, such Shares shall be held by the Corporation in escrow. Upon
becoming vested, a Share certificate for the newly vested Shares shall be
delivered to the Executive as soon as administratively feasible after the date
of vesting. The Executive shall have all the rights of a shareholder with
respect to the Shares held in escrow, including the right to vote the shares and
to receive all dividends and other distributions paid with respect to the
shares. Any Shares held in escrow under this Agreement shall be held, and a
certificate shall be issued, in the name of the Executive. The Executive hereby
grants to the Corporation an irrevocable power of attorney to sign any and all
documents and to take such other actions as may be necessary to transfer
ownership to the Corporation of any forfeited Shares.
(d) Any Shares held in escrow by the Corporation for the Executive
under this Agreement are not subject to the claims of the Executive's creditors
and may not be voluntarily or involuntarily transferred, assigned, alienated,
accelerated or encumbered. Notwithstanding the preceding sentence, any Shares
deliverable to the Executive under this Agreement may, as determined by the
Corporation's Board of Directors in their discretion, be offset by any liability
of the Executive owing to the Corporation.
(e) The Executive may make a Section 83(b) election to treat the
restricted stock granted to him under Paragraph 4(b) as taxable income at the
time of transfer under this Agreement. A section 83(b) election form (with
accompanying instructions) which may be used for this purpose is attached to
this Agreement as Exhibit B.
6. OTHER BENEFITS. In addition to other benefits conferred under this
Agreement, Executive shall have the right to participate in (on the same terms
and conditions as available to other senior executives of the Corporation) all
pension plans, retirement plans, deferred compensation plans, executive
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<PAGE>
compensation plans, major medical, group health, disability, accidental death
and group term life insurance plans, "fringe" benefit plans (including
permissible sick days or leave days), and other employee benefit plans that the
Corporation shall, from time to time, generally confer upon other senior
executives of the Corporation.
7. VACATION, HOLIDAYS, ETC. Executive shall be entitled to five (5)
weeks vacation with pay (or such greater length of time as may be approved from
time to time by the Corporation's Board of Directors) during each fiscal year of
the Corporation, such vacation to be taken by Executive at such times as shall
be consistent with the business requirements of the Corporation. In addition,
Executive shall also be entitled to such holidays as are customary in the
Corporation. Unused holidays and days of vacation may not be carried over form
one fiscal year to another, and additional income will not be given for vacation
time or holidays not taken.
8. EXPENSES. Executive is expected from time to time, to incur
reasonable expenses as he reasonably deems to be for the Corporation's benefit
and for promoting the business of the Corporation, including expenses for
entertainment, travel, and similar items. Executive shall be promptly reimbursed
for all such reasonable expenses (in accordance with the policies and procedures
regarding employee business-related expense from time to time established by the
Corporation for its senior executive officers) upon his presenting to the
Corporation a detailed itemized expense voucher therefor in accordance with
applicable corporate policies. Executive may also draw funds from the
Corporation, but only to the extent necessary and appropriate, for reasonable
expenses to be incurred on behalf of the Corporation and then only in accordance
with applicable corporate policies. Detailed records of the expenditure of such
funds shall be tendered by Executive for expenses incurred on behalf of the
Corporation in accordance with applicable corporate policies, and if any portion
of such funds are unexpended or unaccountable, then Executive shall promptly
return such unexpended or unaccountable sums to the Corporation.
9. TERMINATION OF EMPLOYMENT.
(a) TERMINATION FOR CAUSE. Notwithstanding the provisions of Section 3
hereof, the Corporation shall have the right to terminate this Agreement
immediately upon giving written notice to the Executive (or Executive's personal
or legal representatives, if appropriate), for any of the following reasons:
(1) Death of the Executive;
(2) Inability of the Executive, by reason of physical or
mental disability ("Disability"), to continue to perform his duties hereunder
for the remainder of the term of this Agreement;
(3) Just Cause, which is defined herein to mean: (a)
Executive's gross negligence in performing his duties hereunder; (b) Executive's
willful failure or refusal to perform his duties hereunder; (c) Executive's
intentional wrongful act or wrongful failure to act that materially and
adversely affects the business affairs of the Corporation; or (d) Executive's
commission of any act of fraud, commission of any felony, material breach of any
provision of this Agreement, involvement in any material conflict of interest or
self dealing transaction in violation of the applicable corporate laws of the
State of Delaware, or other breach of any of his quasi-fiduciary duties to the
Corporation in violation of the applicable corporate laws of the State of
Delaware (including, but not limited to, the duties of due care, loyalty, and
fair dealing).
(b) TERMINATION BENEFITS. If this Agreement expires, or if during the
Term the Corporation terminates this Agreement and Executive's employment
hereunder as a result of any
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of the following, Executive will be entitled to the following termination
compensation or severance benefits:
(1) DEATH. If during the Term, Executive's employment is
terminated by reason of death, the Corporation shall
thereafter have no liability to Executive's estate hereunder,
except to timely pay and provide his estate the following: (i)
the portion, if any, of Executive's Base Salary for the period
up to the date of death that remains unpaid; (ii) any bonuses
and incentive compensation for any preceding year or for the
current year that have been earned (pro-rated to the date of
death), but have not been paid as of the date of death; and
(iii) all other payments and benefits that Executive is
eligible to receive, but have not yet been received as of the
date of death, under all benefit plans, retirement plans, and
other arrangements that, by their terms, apply.
(2) DISABILITY. If during the Term, Executive's employment is
terminated due to Executive's Disability as defined in
paragraph 9 (a)(2) above, the Corporation shall, after such
effective date of termination, have no liability to Executive
hereunder, except to timely pay and provide the Executive the
following: (i) the portion, if any, of Executive's Base Salary
for the period up to the effective date of termination that
remains unpaid; (ii) any bonuses and incentive compensation
for any preceding year or for the current year (pro-rated to
the effective date of termination) that have been earned, but
have not been paid as of the effective date of termination;
and (iii) all other payments and benefits that Executive is
eligible to receive, but have not yet been received as of the
effective date of termination, under all benefit plans,
retirement plans, and other arrangements that, by their terms,
apply.
(3) JUST CAUSE. If during the Term, Executive's employment is
terminated for Just Cause as specified in Section 9(a)(3)
above, the Corporation shall, after such effective date of
expiration or termination, have no liability to Executive
hereunder, except to timely pay and provide the Executive the
following: (i) any bonuses and incentive compensation for any
preceding year or for the current year (pro-rated to the
effective date of termination; and (ii) all other payments and
benefits that Executive is eligible to receive, but have not
yet been received as of the effective date of termination,
under all benefit plans, retirement plans, and other
arrangements that, by their terms, apply. To the extent that
any insurance coverages maintained by the Corporation for the
benefit of Executive have conversion privileges into
individual policies, the Executive, upon his termination of
employment or within any applicable grace periods thereafter,
may (at his sole cost) so convert such coverages, as well as
exercise (at his sole cost) all rights of continuation
prescribed by applicable law.
(4) WITHOUT CAUSE. If during the Term, Executive's employment
is terminated without the Executive's written consent and
without Cause for any reason whatsoever other than disability
or death, the Corporation shall, after such effective date or
expiration or termination, have no liability to Executive
hereunder, except to timely pay and provide the Executive the
following: (i) the same Base Salary, bonuses and incentive
compensation, benefits, and other compensation that the
Executive would otherwise be entitled to receive hereunder
through the remaining unexpired Term hereof as though no
termination or expiration had occurred; (ii) any bonuses and
incentive compensation for any preceding year or for the
current year that have been earned, but have not been paid as
of the effective date of termination; (iii) all other payment
and benefits that Executive is eligible to receive, but have
not yet been received as of the
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<PAGE>
effective date of termination. To the extent that any
insurance coverages maintained by the Corporation for the
benefit of Executive have conversion privileges into
individual policies, the Executive, upon his termination of
employment or within any applicable grace periods
thereafter, may (at his sole cost) so convert such
coverages, as well as exercise (at his sole cost) all rights
of continuation prescribed by applicable law.
(5) TERMINATION BY EXECUTIVE. In the event that Executive
terminates this Agreement for any reason, the Corporation
shall, after such effective date of termination, have no
liability to Executive hereunder, except as specified in
Section 9(b)(3) hereof, as if the Corporation had terminated
the Executive for Cause.
10. RESTRICTIVE COVENANTS OF EXECUTIVE.
(a) DEFINITIONS. For the purposes of this Agreement:
(1) "CONFIDENTIAL INFORMATION" shall mean any information
relating to the Corporation or to the business of the Corporation (or to any of
its parents, subsidiaries or affiliates) (whether proprietary or otherwise) not
generally known to the public or known by Executive otherwise than as a
consequence of or through his employment with the Corporation and treated by the
Corporation as being confidential, including, but not limited to, research,
marketing, customer lists, financing sources, methods, techniques and systems,
all of which shall be deemed by the Corporation and Executive as being
Confidential Information.
(2) "PERSON" shall mean an individual, a partnership, an
association, a corporation, a trust, an unincorporated organization, or any
other business entity or enterprise, provided, however, that the term "Person"
shall not include the Corporation.
(b) ACKNOWLEDGEMENTS. Executive agrees and acknowledges that: (i) he
will be in a position of confidence and trust with the Corporation and he will
have access to Confidential Information; (ii) the nature and periods of
restrictions imposed by the covenants set forth in this Section are fair,
reasonable and necessary to protect and preserve for the Corporation the
benefits of this Agreement and that such restrictions will not prevent Executive
from earning a livelihood; (iii) the Corporation would sustain irreparable loss
and damage if Executive were to breach any of such covenants; and (iv) the
covenants herein set forth are made as an inducement to and have been relied
upon by the Corporation in entering this Agreement.
(c) CONFIDENTIAL INFORMATION. Executive hereby covenants and agrees
that Executive shall not, directly or indirectly, during the Term of this
Agreement and for three (3) years after Executive's employment is terminated for
whatever reason, disclose to any Person or use or otherwise exploit for
Executive's own benefit or for the benefit of any other Person any Confidential
Information that was disclosed to Executive or acquired by Executive while an
employee of the Corporation. Upon the termination or expiration of this
Agreement, Executive shall return to the Corporation all material in Executive's
possession or control which is of a confidential matter relating to the
Corporation's business. These provision shall survive the termination or
expiration of this Agreement.
(d) NON-COMPETITION.
(1) Except as provided in section (2) below, Executive hereby covenants
and agrees that Executive shall not, other than pursuant to this Agreement,
directly or indirectly, either for Executive's own benefit or as an officer,
director, shareholder, partner, proprietor, employee, agent, consultant, or
independent contractor of any other Person, during the Term and for one (1)
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<PAGE>
year after Executive's employment by the Corporation is
terminated for whatever reason, (i) solicit any contract or
other arrangement for the management, submanagement or
participation in the management of any healthcare or other
long-term care facility owned, leased, or managed by the
Corporation or any affiliate or subsidiary of the
Corporation or to which the Corporation or any affiliate or
subsidiary of the Corporation provides any ancillary
services as of the date in question ("Iatros Facility") or
(ii) solicit any contract or other arrangement for the
providing of any ancillary services to any Iatros Facility.
However, nothing in this Section 10(d) shall be deemed to
prevent Executive from passively investing in or acquiring
up to one percent (1%) of any class of securities of any
Person who is engaged in substantially the same business as
the Corporation at a location that is within fifteen (15)
miles or less of any Iatros Facility, if such class of
securities is listed on a national securities exchange or is
quoted on NASDAQ; provided, however, that Executive shall
not serve as an officer, director, partner, proprietor,
employee, or agent of any Person (other than any Person for
whom the Executive is serving as such on the date of this
Agreement) who is engaged in substantially the same business
as the Corporation at a location that is within fifteen (15)
miles or less of any Iatros Facility, except with the prior
written approval of the Corporation's Board of Directors.
(e) CONSENT TO COURT-ORDERED REMEDY. Executive acknowledges that his
breach of any covenant set forth in this Section 10 will result in irreparable
injury to the Corporation and that the Corporation's remedies at law for such a
breach are inadequate and extremely difficult to calculate or determine.
Accordingly, Executive agrees and consents that upon such a breach or threatened
breach by Executive of any covenant set forth herein, the Corporation shall be
entitled to such remedies in law or equity as may be determined by the court for
such a breach or threatened breach.
(f) REMEDIES CUMULATIVE AND CONCURRENT. The rights and remedies of the
Corporation, as provided in this Section 10 shall be cumulative and concurrent
and may be pursued separately, successively or together against Executive at the
sole discretion of the Corporation, and may be exercised as often as occasion
therefor shall arise. The failure to exercise any right or remedy shall in no
event be construed as a waiver or release thereof.
11. INDEMNITY. To the fullest extent permitted by law, the Corporation
shall indemnify Executive and hold him harmless for any acts or decisions made
by him in good faith while performing services for the Corporation. In addition,
to the fullest extent permitted by law, the Corporation shall pay all expenses,
including attorney's fees, actually and necessarily incurred by Executive in
connection with the defense of any action, suit or proceeding challenging such
acts of decisions and in connection with any appeal thereon including the costs
of settlement. This indemnification obligation shall survive the termination of
the Executive's employment hereunder.
12. WAIVER OF BREACH OF VIOLATION NOT DEEMED CONTINUING. The waiver by
either party of a breach or violation of any provision of this Agreement shall
not operate as or be construed to be a waiver of any subsequent breach hereof.
13. NOTICES. Any and all notices required or permitted to be given
under this Agreement will be sufficient if furnished in writing, personally
delivered or sent by certified mail, return receipt requested as follows:
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<PAGE>
To Executive:
Ronald E. Lusk
3510 Turtle Creek Boulevard
#9a
Dallas, Texas 75219
To the Corporation:
Iatros Health Network, Inc.
Attn: Chief Operating Officer
11910 Greenville Avenue
Suite 300
Dallas, Texas 75243
14. SECURITIES LAW COMPLIANCE. The Executive represents and agrees that
he is acquiring any Shares he receives under this Agreement for his own account
and not with the intention reselling or distributing the Shares, except as
permitted under this Agreement and any applicable federal and state securities
laws. The Corporation shall have the right to take any actions it may deem
necessary or appropriate to ensure that the Shares granted to the Executive
complies with applicable federal and state securities laws.
15. TAX LIABILITY. The Corporation may withhold from any payment made
pursuant to this Agreement any federal, state or local taxes required to be
withheld from such payment. The Executive shall make such arrangements as may be
required or be satisfactory to the Corporation (in its sole discretion) for the
payment of any tax withholding obligations that arise in connection with the
granting of Shares under this Agreement. The Corporation shall not be required
to issue any Shares under this Agreement until such obligations are satisfied.
16. GOVERNING LAW. This Agreement shall be interpreted, construed and
governed according to the laws of the State of Texas. The parties hereto consent
to jurisdiction and venue in the Texas state courts in Dallas, Texas and United
States District Court for the Northern District of Texas, Dallas Division.
17. PARAGRAPH HEADINGS. The paragraph headings contained in this
Agreement are for convenience only and shall in no manner be construed as a part
of this Agreement.
18. ENTIRE AGREEMENT. This Agreement supersedes all prior discussions
and agreements between the Corporation, or any of its officers, directors,
employees, or agents, and Executive with respect to all mattes relating to the
employment by the Corporation of Executive and all other matters contained
herein, and this Agreement constitutes the sole and entire agreement with
respect thereto. Any representation, inducement, promise or agreement, whether
oral or written, between the Corporation, or any of its officers, directors,
employees, or agents, and Executive which is not embodied herein shall be of no
force or effect.
19. SUCCESSORS AND ASSIGNORS. This Agreement shall be binding upon, and
shall inure to the benefit of, the Corporation and Executive and their
respective heirs, personal and legal representatives, successors, and assigns.
20. SEVERABILITY. If any term, covenant or condition of this Agreement
or the application thereof to any person or circumstance shall, to any extent,
be invalid or unenforceable the
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<PAGE>
remainder of this Agreement or the application of such terms, covenants and
conditions to persons or circumstances other than those as to which it is held
invalid or unenforceable shall be affected thereby and each term, covenant or
condition of this Agreement shall be valid and be enforced to the fullest extent
permitted by law.
IN WITNESS WHEREOF, the Corporation has hereunder to caused this
Agreement to be executed by its duly authorized offices and seals to be hereunto
affixed, and Executive has hereunto set his hand and seal, all being done in
duplicate originals delivered to each party as of the day and year first above
written.
/s/ Kathy Fuller /s/ Ronald E. Lusk
- ------------------------------------------ ---------------------------
Witness Ronald E. Lusk
ATTEST: IATROS HEALTH NETWORK, INC.
/s/ Albert Sousa By: /s/ Michael H. Seeliger
- ------------------------------------------ ---------------------------
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<PAGE>
EXHIBIT A
DESCRIPTION OF SPECIFIC DUTIES AND RESPONSIBILITIES
CHIEF EXECUTIVE OFFICER
POSITION AND SCOPE OF DUTIES.
The Corporation hereby employs Executive as Chairman and Chief
Executive Officer of the Corporation (the "Position"). Executive shall at all
times discharge his duties in consultation with and under the supervision and
authority of the Board of Directors of the Corporation (the "Board"), and shall
perform such duties consistent with the Executive's employment as an executive
holding such titles with respect to the Corporation or any subsidiary or
affiliate of the Corporation as the Board shall from time to time determine, and
shall act at all times in accord with the articles of incorporation, bylaws and
other governing documents of the Corporation, copies of such documents having
been provided to Executive. As Chairman and Chief Executive Officer of the
Corporation, Executive shall formulate policies for and administer the
Corporation in all respects, and shall be responsible for and shall supervise
the operation and the administration of other business owned and or operated by
the Corporation. The executive shall have general responsibility of authority on
behalf of the corporation for the overall active management, supervision and
administration of all its legal matters, all of its corporate development
matters such as mergers, acquisitions, divestitures, joint ventures and new
business opportunities its related investment banking and matters of corporate
organization and integration of new business units into the corporation. As to
employees under his jurisdiction, including those working directly under his
supervision, Executive shall use his good faith diligent efforts to (i) to
employ and retain only employees who are capable and willing to perform
according to applicable legal requirements and applicable policies of the
Corporation and also (ii) to assure that such personnel are properly trained and
supervised. Except and to the extent otherwise directed by the Corporations
Chairman of the Board, Executive may hire and terminate the employment of any
other employee of the Corporation, or any of its divisions, subsidiaries, or
affiliates under his supervision and jurisdiction upon such terms as he deems to
be in the best interest of the Corporation.
<PAGE>
EXHIBIT B
ELECTION TO INCLUDE VALUE OF RESTRICTED PROPERTY
IN GROSS INCOME IN YEAR OF TRANSFER UNDER SECTION 83(b)
Pursuant to Section 83(b) of the Internal Revenue Code of 1986, as
amended, I hereby elect to include in my gross income at the time of transfer
the amount includible under Section 83(b) with respect to the restricted
property described below, in accordance with applicable regulations:
1. THE NAME, ADDRESS AND TAXPAYER IDENTIFICATION NUMBER OF THE UNDERSIGNED ARE:
Name: Ronald E. Lusk
Address: -----------------------------------
-----------------------------------
-----------------------------------
Taxpayer identification number:
-----------------------------------
2. DESCRIPTION OF PROPERTY WITH RESPECT TO WHICH THE ELECTION IS BEING MADE:
Five hundred thousand (500,000) shares of Common Stock, $.001 par
value, of Iatros Health Network, Inc.
3. DATE ON WHICH THE PROPERTY WAS TRANSFERRED AND TAXABLE YEAR FOR WHICH THE
ELECTION IS MADE:
Date of transfer: ___________
Taxable year for which election made: Calendar year 1999
4. THE NATURE OF THE RESTRICTION(S) TO WHICH THE PROPERTY IS SUBJECT:
Forfeiture in the event that the Employment Agreement between the
undersigned and Iatros Health Network, Inc. is terminated on or before the
one-year anniversary of the date of such Agreement for any reason while the
undersigned is employed by the corporation (other than termination by reason of
death or becoming totally and permanently disabled, or in the event of a
"Change-in-Control" as defined in such Agreement).
5. FAIR MARKET VALUE AT TIME OF TRANSFER:
The fair market value at the time of transfer (determined without
regard to any restrictions other than restrictions which by their terms will
never lapse) of the property with respect to which this election is being made
is ____ per share, for an aggregate fair market value of $________.
<PAGE>
6. AMOUNT PAID FOR THE PROPERTY:
No amount has been paid by the undersigned for said property.
7. FURNISHING STATEMENT TO EMPLOYER:
A copy of this statement has been furnished to Iatros Health Network,
Inc.
Dated:
---------------
Signature:
---------------------------------
Name:
---------------------------------
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<PAGE>
INSTRUCTIONS FOR SECTION 83(B) ELECTION FORM:
1. Review and complete all items on this form, including:
- Address and taxpayer identification number (i.e., Social
Security number) (Item 1)
- Date of transfer (Item 3)
- Fair market value per share and in the aggregate (Item 5)
- Signature and date (bottom)
2. Provide a copy of this form within 30 days of the date of transfer to:
- Iatros Health Network, Inc.
- Director, Internal Revenue Service Center, of the Service
Center where you expect to file your income tax return
3. Attach a copy of this form to your 1999 Federal income tax return
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<PAGE>
IATROS HEALTH NETWORK, INC.
CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT made and entered into as of the 26th day of February,
1999, by and between Iatros Health Network, Inc., a Delaware corporation (the
"Company") and Ronald E. Lusk, the Company's Chief Executive Officer (the
"Executive"), and.
WHEREAS, the Company has entered into an employment agreement with
Executive, effective as of January 1, 1999 (the "Employment Agreement"); and
WHEREAS, the Board of Directors of the Company believes it is in the
best interests of the Company and its shareholders to enter into this Agreement
with Executive to ensure the continuity of management of the Company and
reinforce and encourage the continued attention and dedication of the Executive
to his assigned duties without distraction in the face of potentially disruptive
circumstances arising from the possibility of a change-in-control of the
Company; and
WHEREAS, the Board of Directors of the Company has approved and
authorized the execution of this Agreement with the Executive to take effect as
stated in Section 1 hereof.
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is agreed as
follows:
1. TERM OF AGREEMENT. This Agreement shall commence on the date set out
above and shall continue in effect during the term of the Executive's Employment
Agreement (or any extension, modification or renewal thereof) and shall remain
in effect for a period of twenty-four (24) months after the date a
Change-In-Control occurs.
2. CHANGE-IN-CONTROL.
(a) The Executive shall have no rights under this Agreement
until there shall have been a Change-in-Control, as defined in (b) below.
(b) For purposes of this Agreement, a "Change-in-Control"
shall mean: (i) the sale of substantially all of the assets of the Corporation
to another person or entity (other than a subsidiary or other affiliate of the
Corporation), (ii) the acquisition of actual or beneficial ownership of more
than fifty percent of the total combined voting power of all classes of
Corporation stock entitled to vote by a person or group of persons acting in
concert (other than a subsidiary or other affiliate of the Corporation) who did
not own more than fifty percent of such on the date of this Agreement, or (iii)
the merger of the Corporation into another entity (other than a subsidiary or
other affiliate of the Corporation), where the Corporation's shareholders
(determined as of the date of merger) own (directly or indirectly) less than
fifty percent of the shares of the surviving entity.
3. PUT OPTION RIGHTS UPON A CHANGE-IN-CONTROL. Following a
Change-in-Control, the Executive shall have the right to sell to the Company
(the "put option") all or any portion of the shares of Company stock granted to
him under his Employment Agreement or obtained through the exercise of
Company-granted stock options which he owned (or to which he was entitled under
an outstanding stock option or other agreement) as of the date of the
Change-in-
<PAGE>
Control. The Company shall buy any shares put to it under this Paragraph upon
the following terms and conditions:
(a) The put option shall be exercisable in whole or in part
by for a period of one (1) year following the date on which the
Change-in-Control occurs. Notwithstanding the preceding sentence, in the
event the Executive terminates employment with the Company before expiration
of the one-year exercise period, the put option shall expire no later than
thirty (30) days after the Executive's termination; provided, that if the
Executive's employment is terminated by the Company for "Just Cause" (as
defined in the Executive's Employment Agreement), the put option shall expire
as of the date of his termination.
(b) The put shall be exercised by the Executive by written
notice to the Company which sets forth the number of shares to be sold to the
Company.
(c) The purchase price to be paid by the Company for any
shares put to it pursuant to this paragraph shall be one hundred and five
percent (105%) of the per share price (or the equivalent thereof) paid in the
transaction causing the Change-in-Control. The aggregate purchase price (less
any legally required income tax or other withholding) shall be paid in one lump
sum payment to the Executive within fifteen (15) days of the date the Executive
delivers stock certificate(s) for the shares being put to the Company (if
required by the Company).
(d) This put option right shall apply to any shares of stock
which the Executive receives in exchange for his Company stock as the result of
the Change-in-Control. The per share price to be paid for any such stock put to
the Company shall be 105% of the per share value assigned such stock for
purposes of the transaction causing the Change-in-Control.
4. SEVERANCE COMPENSATION AND BENEFITS. If, after the occurrence of a
Change-in-Control, the Executive's employment is terminated by the Company
during the twenty-four (24) month period following the date on which the
Change-in-Control occurs for any reason other than "Just Cause" (as defined in
the Executive's Employment Agreement), the following shall occur:
(a) The Company shall pay to the Executive, within fifteen
(15) days of the date his employment is terminated by the Company, a single sum
cash payment equal to two and one-half (2-1/2) times the Executive's average
annual compensation (including base salary and bonuses) paid to him in cash
during the thirty-six (36) month period immediately preceding the date on which
the Change-in-Control occurred (or, in the event the Executive had not been
employed by the Company or received cash compensation for a period of at least
36 months at that time, the period that the Executive was employed or received
cash compensation, as applicable).
(b) The Executive, together with his dependents and
beneficiaries, shall continue to be fully eligible for (and participate in) all
company-sponsored accident and health, life insurance and other welfare benefit
programs available to the Executive as of the date on which the
Change-in-Control occurred (on the same terms and conditions in effect on that
date) or receive substantially equivalent coverage (or the full value thereof in
cash) from the Company, until the second anniversary of the Executive's
termination of employment.
5. CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY. Notwithstanding
anything in this Agreement to the contrary, if any of the payments or other
benefits provided for in this Agreement, either alone or together with any other
payments and benefits which the Executive has the right to receive from the
Company, would be nondeductible (in whole or part) by the Company for Federal
income tax purposes because of Section 280G of the Internal Revenue Code, the
payments and benefits to be made pursuant to this Agreement shall be reduced to
such
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<PAGE>
amount or level as will result in no portion of such payments or benefits being
nondeductible under Section 280G. This determination shall be made by the
Company's independent auditors, the cost of which shall be paid by the Company.
6. NONEXCLUSIVE RIGHTS. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit, bonus,
incentive, retirement or other plan or program provided by the Company and for
which the Executive may qualify, nor shall anything herein limit or reduce such
rights as the Executive may have under any other agreement with, or plan,
program, policy or practice of, the Company. Amounts which are vested benefits
or which the Executive is otherwise entitled to receive under any agreement
with, or plan, program, policy or practice of, the Company (including, without
limitation, the cashout of unused vacation days upon termination of employment)
shall be payable in accordance with such agreement, plan, program, policy or
practice.
7. SUCCESSORS.
(a) This Agreement shall be binding upon the Company and any successor
thereto (whether by merger, consolidation, assignment or otherwise).
(b) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees, and legatees. Any amounts due and
payable to the Executive under this Agreement on or after his death shall be
paid to his estate.
8. NOTICES. All notices hereunder shall be in writing, and shall be
deemed effectively given upon the earliest of (i) actual receipt, by whatever
means, (ii) personal delivery, (iii) delivery by an overnight courier service to
the applicable address specified below, or (iv) five days after sent by
certified or registered mail, return receipt requested, postage prepaid,
addressed to the parties at the applicable address specified below (or such
other address as may be designated in writing by either party to the other):
If to Company:
Iatros Health Network, Inc.
Attn: Board of Directors
11910 Greenville Avenue
Suite 300
Dallas, Texas 75243
If to Executive:
Ronald E. Lusk
3510 Turtle Creek Blvd.
#9a
Dallas, Texas 75219
9. APPLICABLE LAW. The validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the state of
Delaware.
10. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
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<PAGE>
11. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instruments.
12. EFFECTIVE DATE. This Agreement shall become effective as of the
date first set forth above.
13. EMPLOYMENT. This Agreement does not constitute a contract of
employment or impose on the Company an obligation to retain the Executive as an
Executive, to continue his or her current employment status or to change any
employment policies of the Company.
14. AMENDMENTS. No amendment or other change to this Agreement shall be
binding unless in writing and signed by both parties.
15. NONTRANSFERABILITY OF RIGHTS. The rights of the Executive under
this Agreement are not subject to the claims of the Executive's creditors and
may not be voluntarily or involuntarily transferred, assigned, alienated,
accelerated or encumbered. Notwithstanding the preceding sentence, any payments
owing to the Executive under this Agreement may, as determined by the Board of
Directors of the Company (or its designee) in its sole discretion, be offset by
any liability of the Executive owing to the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
IATROS HEALTH NETWORK, INC.
By /s/ Ronald E. Lusk
---------------------------------
Title: Chairman & Ceo
-----------------------------
RONALD E. LUSK
/s/ Ronald E. Lusk
------------------------------------
<PAGE>
Exhibit 4.5
EMPLOYMENT AGREEMENT
BETWEEN
IATROS HEALTH NETWORK, INC.
AND
ROBERT L. WOODSON III
THIS AGREEMENT made and entered into as of the 26th day of February,
1999 by and between Iatros Health Network, Inc. (the "Corporation"), a Delaware
corporation, and Robert L. Woodson III, a resident of Tennessee (hereinafter
referred to as "Executive").
WHEREAS, the parties, for and in consideration of the mutual and
reciprocal covenants and agreements hereinafter contained, and intending to be
legally bound hereby, do contract and agree as follows:
1. PURPOSE AND EMPLOYMENT. The Corporation's primary business (the
"Corporation's Business") is owning, leasing, operating, and managing (i) senior
living and long-term care facilities (including, but not limited to, independent
living retirement facilities; congregate care facilities; assisted living
facilities; subacute, skilled, and intermediate care nursing facilities; and
long-term acute care hospitals), (ii) home health companies and agencies, (iii)
specialty outpatient medical facilities (including, but not limited to,
comprehensive outpatient rehabilitation facilities), and (iv) companies that
provide various ancillary healthcare services (including, but not limited to,
pharmacy, durable medical supplies and equipment, wound care, rehabilitation
therapies, IV therapies, respiratory therapies, and portable X-ray). The purpose
of this Agreement is to define the relationship between the Corporation and
Executive. The Corporation hereby employs Executive, and Executive hereby
accepts employment by the Corporation, all upon the terms and conditions
hereinafter set forth.
2. POSITION AND SCOPE OF DUTIES.
(a) Executive shall serve the Corporation as its President and Chief
Operating Officer. At all times, Executive shall report to, discharge his duties
in consultation with, and be under the direct supervision and control of the
Corporation's Chairman and Chief Executive Officer, shall perform such duties,
consistent with the Executive's employment as a senior corporate executive,
shall hold such other titles with respect to the Corporation, or any of its
divisions, subsidiaries, or affiliates, as the Corporation's Board of Directors
may from time to time determine, and shall comply with all applicable provisions
of the Corporation's certificate of incorporation. Executive shall, subject to
the direction of the Corporation's Chairman and Chief Executive Officer, have
authority to formulate policies for and administer all operational aspects of
the Corporation and its divisions, subsidiaries, and affiliates; and also shall
be responsible for overseeing and coordinating all operational aspects of the
Corporation's divisions, subsidiaries, and affiliates. As to employees under his
jurisdiction, including those working directly under his supervision, Executive
shall use his best efforts (i) to employ and retain only employees who are
capable and willing to perform according to applicable legal requirements and
applicable policies of the Corporation and also (ii) to assure that such
personnel are properly trained and supervised. Subject to the direction of the
Corporation's Chairman and Chief Executive Officer, Executive may hire and
terminate the employment of any other employee of the Corporation, or of any of
its divisions, subsidiaries or affiliates, who is under his jurisdiction.
<PAGE>
(b) Executive shall devote his primary business time to the business
and affairs of the Corporation, excluding any periods of vacation, sick leave,
and disability to which Executive is entitled; and he shall fulfill his duties
to the Corporation to the best of his ability. However, it shall not be a
violation of this Agreement for the Executive to (i) serve on corporate, civic,
or charitable boards or committees, (ii) deliver lectures, fulfill speaking
engagements, or teach at educational institutions, and (iii) manage his personal
finances and passive investments, so long as none of such activities (singularly
or collectively) significantly interfere with the performance of the Executive's
responsibilities as an employee of the Corporation in accordance with this
Agreement.
(c) A description of the specific duties and responsibilities of the
Executive is contained in Exhibit A attached to this Agreement.
3. TERM. The term of this Agreement shall be for a period of three (3)
years commencing January 1, 1999 (the "Term") unless terminated earlier by
mutual agreement of the parties or by either party in accordance with Section 9
of this Agreement. Upon completion of the original three-year Term, the
Agreement shall automatically be renewed for a period of one (1) year as of each
succeeding January 1st (beginning January 1st, 2002); provided, that the
Corporation may terminate the Agreement as of any such renewal date by providing
ninety (90) days advance written notice to the Executive.
4. COMPENSATION DURING EMPLOYMENT. For all the services to be rendered
by Executive hereunder, the Corporation shall pay to Executive a base salary,
bonuses, and incentive compensation as follows:
(a) BASE SALARY. Executive shall be paid an annual base salary of Two
Hundred Twenty-five Thousand dollars ($225,000.00), payable in monthly
installments. Payment of such salary may be made in shares of Corporation stock
(the "Shares"), cash, or a combination thereof, as determined by the Chairman
and Chief Executive Officer, in his sole discretion, taking into account the
Corporation's cash flow requirements and any other aspect of the Corporation's
financial condition deemed relevant by the Chairman and Chief Executive Officer.
The value of any Shares of common stock paid to the Executive under this
provision shall be based on the per share price of the last trade of Shares as
reported on NASDAQ or the OTC bulletin board, as applicable, for the last
trading day of the applicable pay period (or if Shares were not traded on such
date, for the closest preceding date on which a trade occurred). The Chairman
and Chief Executive Officer may increase the Executive 's annual base salary
effective as of any anniversary date of this Agreement in such amounts as he
deems appropriate in his sole discretion.
(b) RESTRICTED STOCK GRANT. Upon the execution of this Agreement,
Executive shall receive a one time grant of Five Hundred Thousand (500,000)
shares of the Corporation's Common Stock. Except as otherwise provided in this
Agreement, in the event the Agreement is terminated on or before the one-year
anniversary of the date of the Agreement for any reason, the shares granted to
the Executive under this provision shall be forfeited; provided, that, in the
event the Executive is terminated by the Corporation without Just Cause (as
defined in Section 9) on or after July 1, 1999, the granted shares shall not be
forfeited.
(c) INITIAL STOCK OPTIONS. Upon execution of this Agreement, Executive
shall be granted an incentive stock options for a total of 360,000 shares of the
Corporation's Common Stock under the Corporation's stock option plan (the
"Initial Stock Options"). This grant is effective as of the date of this
Agreement (or the date of grant under the plan, if later). One third of such
Initial Stock Options shall become exercisable on each successive anniversary of
the date of the Agreement, provided that the Executive is employed by the
Corporation on each such anniversary date.
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(d) EXECUTIVE'S INCENTIVE COMPENSATION. Executive may be entitled to
such bonuses and incentive compensation as may be determined by the Chairman and
Chief Executive Officer of the Corporation in his sole discretion. Each such
bonus or incentive compensation may be paid in cash or Shares as the Chairman
and Chief Executive Officer of the Corporation shall determine. Such incentive
compensation may also include options to purchase shares of the Corporation's
Common Stock pursuant to a plan established by the Corporation's Board.
5. STOCK GRANTS.
(a) If the Executive terminates employment with the Corporation for any
reason prior to date on which his right to any Shares granted to him under
Paragraph 4(b) of this Agreement becomes fully vested and nonforfeitable, the
nonvested Shares shall be forfeited on the date of his termination.
Notwithstanding the foregoing, if the Executive dies or becomes totally and
permanently disabled (as determined by the Chairman and Chief Executive Officer)
while employed by the Corporation, the Executive's rights to any Shares granted
under this Agreement shall automatically become fully vested on the date he dies
or becomes disabled. For purposes of this Paragraph, the Executive is "disabled"
if he is incapable of performing his principal duties for the duration of this
Agreement due to a physical or mental condition.
(b) Notwithstanding (a) above, upon the occurrence of a
Change-in-Control of the Corporation, the Shares granted to the Executive under
this Agreement shall become fully vested and nonforfeitable. For purposes of
this Agreement, "Change-in-Control" shall mean (i) the sale of substantially all
of the assets of the Corporation to another person or entity (other than an
subsidiary or other affiliate of the Corporation), (ii) the acquisition of
actual or beneficial ownership of more than fifty percent of the total combined
voting power of all classes of Corporation stock entitled to vote by a person or
group of persons acting in concert (other than a subsidiary or other affiliate
of the Corporation) who did not own more than fifty percent of such on the date
of this Agreement, (iii) or the merger of the Corporation into another entity
(other than a subsidiary or other affiliate of the Corporation), where the
Corporation's shareholders (determined as of the date of the merger) own
(directly or indirectly) less than fifty percent of the shares of the surviving
entity.
(c) Until any Shares awarded under this Agreement become fully vested
and nonforfeitable, such Shares shall be held by the Corporation in escrow. Upon
becoming vested, a Share certificate for the newly vested Shares shall be
delivered to the Executive as soon as administratively feasible after the date
of vesting. The Executive shall have all the rights of a shareholder with
respect to the Shares held in escrow, including the right to vote the shares and
to receive all dividends and other distributions paid with respect to the
shares. Any Shares held in escrow under this Agreement shall be held, and a
certificate shall be issued, in the name of the Executive. The Executive hereby
grants to the Corporation an irrevocable power of attorney to sign any and all
documents and to take such other actions as may be necessary to transfer
ownership to the Corporation of any forfeited Shares.
(d) Any Shares held in escrow by the Corporation for the Executive
under this Agreement are not subject to the claims of the Executive's creditors
and may not be voluntarily or involuntarily transferred, assigned, alienated,
accelerated or encumbered. Notwithstanding the preceding sentence, any Shares
deliverable to the Executive under this Agreement may, as determined by the
Chairman and Chief Executive Officer in his sole discretion, be offset by any
liability of the Executive owing to the Corporation.
(e) The Executive may make a Section 83(b) election to treat the
restricted stock granted to him under Paragraph 4(b) as taxable income at the
time of transfer under this Agreement. A
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section 83(b) election form (with accompanying instructions) which may be used
for this purpose is attached to this Agreement as Exhibit B.
6. OTHER BENEFITS. In addition to other benefits conferred under this
Agreement, Executive shall have the right to participate in (on the same terms
and conditions as available to other senior executives of the Corporation) all
pension plans, retirement plans, deferred compensation plans, executive
compensation plans, major medical, group health, disability, accidental death
and group term life insurance plans, "fringe" benefit plans (including
permissible sick days or leave days), and other employee benefit plans that the
Corporation shall, from time to time, generally confer upon other senior
executives of the Corporation.
7. VACATION, HOLIDAYS, ETC. Executive shall be entitled to five (5)
weeks vacation with pay (or such greater length of time as may be approved from
time to time by the Corporation's Board of Directors) during each fiscal year of
the Corporation, such vacation to be taken by Executive at such times as shall
be consistent with the business requirements of the Corporation. In addition,
Executive shall also be entitled to such holidays as are customary in the
Corporation. Unused holidays and days of vacation may not be carried over form
one fiscal year to another, and additional income will not be given for vacation
time or holidays not taken.
8. EXPENSES. Executive is expected from time to time, to incur
reasonable expenses as he reasonably deems to be for the Corporation's benefit
and for promoting the business of the Corporation, including expenses for
entertainment, travel, and similar items. Executive shall be promptly reimbursed
for all such reasonable expenses (in accordance with the policies and procedures
regarding employee business-related expense from time to time established by the
Corporation for its senior executive officers) upon his presenting to the
Corporation a detailed itemized expense voucher therefor in accordance with
applicable corporate policies. Executive may also draw funds from the
Corporation, but only to the extent necessary and appropriate, for reasonable
expenses to be incurred on behalf of the Corporation and then only in accordance
with applicable corporate policies. Detailed records of the expenditure of such
funds shall be tendered by Executive for expenses incurred on behalf of the
Corporation in accordance with applicable corporate policies, and if any portion
of such funds are unexpended or unaccountable, then Executive shall promptly
return such unexpended or unaccountable sums to the Corporation.
9. TERMINATION OF EMPLOYMENT.
(a) TERMINATION FOR CAUSE. Notwithstanding the provisions of Section 3
hereof, the Corporation shall have the right to terminate this Agreement
immediately upon giving written notice to the Executive (or Executive's personal
or legal representatives, if appropriate), for any of the following reasons:
(1) Death of the Executive;
(2) Inability of the Executive, by reason of physical or
mental disability ("Disability"), to continue to perform his duties hereunder
for the remainder of the term of this Agreement;
(3) Just Cause, which is defined herein to mean: (a)
Executive's gross negligence in performing his duties hereunder; (b) Executive's
willful failure or refusal to perform his duties hereunder; (c) Executive's
intentional wrongful act or wrongful failure to act that materially and
adversely affects the business affairs of the Corporation; or (d) Executive's
commission of any act of fraud, commission of any felony, material breach of any
provision of this Agreement, involvement in any material conflict of interest or
self dealing transaction in violation of the applicable corporate laws of the
State of Delaware, or other breach of any of his quasi-fiduciary
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duties to the Corporation in violation of the applicable corporate laws of the
State of Delaware (including, but not limited to, the duties of due care,
loyalty, and fair dealing).
(b) TERMINATION BENEFITS. If this Agreement expires, or if during the
Term the Corporation terminates this Agreement and Executive's employment
hereunder as a result of any of the following, Executive will be entitled to the
following termination compensation or severance benefits:
(1) DEATH. If during the Term, Executive's employment is
terminated by reason of death, the Corporation shall
thereafter have no liability to Executive's estate hereunder,
except to timely pay and provide his estate the following: (i)
the portion, if any, of Executive's Base Salary for the period
up to the date of death that remains unpaid; (ii) any bonuses
and incentive compensation for any preceding year or for the
current year that have been earned (pro-rated to the date of
death), but have not been paid as of the date of death; and
(iii) all other payments and benefits that Executive is
eligible to receive, but have not yet been received as of the
date of death, under all benefit plans, retirement plans, and
other arrangements that, by their terms, apply.
(2) DISABILITY. If during the Term, Executive's employment is
terminated due to Executive's Disability as defined in
paragraph 9 (a)(2) above, the Corporation shall, after such
effective date of termination, have no liability to Executive
hereunder, except to timely pay and provide the Executive the
following: (i) the portion, if any, of Executive's Base Salary
for the period up to the effective date of termination that
remains unpaid; (ii) any bonuses and incentive compensation
for any preceding year or for the current year (pro-rated to
the effective date of termination) that have been earned, but
have not been paid as of the effective date of termination;
and (iii) all other payments and benefits that Executive is
eligible to receive, but have not yet been received as of the
effective date of termination, under all benefit plans,
retirement plans, and other arrangements that, by their terms,
apply.
(3) JUST CAUSE. If during the Term, Executive's employment is
terminated for Just Cause as specified in Section 9(a)(3)
above, the Corporation shall, after such effective date of
expiration or termination, have no liability to Executive
hereunder, except to timely pay and provide the Executive the
following: (i) any bonuses and incentive compensation for any
preceding year or for the current year (pro-rated to the
effective date of termination; and (ii) all other payments and
benefits that Executive is eligible to receive, but have not
yet been received as of the effective date of termination,
under all benefit plans, retirement plans, and other
arrangements that, by their terms, apply. To the extent that
any insurance coverages maintained by the Corporation for the
benefit of Executive have conversion privileges into
individual policies, the Executive, upon his termination of
employment or within any applicable grace periods thereafter,
may (at his sole cost) so convert such coverages, as well as
exercise (at his sole cost) all rights of continuation
prescribed by applicable law.
(4) WITHOUT CAUSE. If during the Term, Executive's employment
is terminated without the Executive's written consent and
without Cause for any reason whatsoever other than disability
or death, the Corporation shall, after such effective date or
expiration or termination, have no liability to Executive
hereunder, except to timely pay and provide the Executive the
following: (i) the same Base Salary, bonuses and incentive
compensation, benefits, and other compensation that the
Executive would otherwise be entitled to receive hereunder
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through the remaining unexpired Term hereof as though no
termination or expiration had occurred; (ii) any bonuses and
incentive compensation for any preceding year or for the
current year that have been earned, but have not been paid as
of the effective date of termination; (iii) all other payment
and benefits that Executive is eligible to receive, but have
not yet been received as of the effective date of termination.
To the extent that any insurance coverages maintained by the
Corporation for the benefit of Executive have conversion
privileges into individual policies, the Executive, upon his
termination of employment or within any applicable grace
periods thereafter, may (at his sole cost) so convert such
coverages, as well as exercise (at his sole cost) all rights
of continuation prescribed by applicable law.
(5) TERMINATION BY EXECUTIVE. In the event that Executive
terminates this Agreement for any reason, the Corporation
shall, after such effective date of termination, have no
liability to Executive hereunder, except as specified in
Section 9(b)(3) hereof, as if the Corporation had terminated
the Executive for Cause.
10. RESTRICTIVE COVENANTS OF EXECUTIVE.
(a) DEFINITIONS. For the purposes of this Agreement:
(1) "CONFIDENTIAL INFORMATION" shall mean any information
relating to the Corporation or to the business of the Corporation (or to any of
its parents, subsidiaries or affiliates) (whether proprietary or otherwise) not
generally known to the public or known by Executive otherwise than as a
consequence of or through his employment with the Corporation and treated by the
Corporation as being confidential, including, but not limited to, research,
marketing, customer lists, financing sources, methods, techniques and systems,
all of which shall be deemed by the Corporation and Executive as being
Confidential Information.
(2) "PERSON" shall mean an individual, a partnership, an
association, a corporation, a trust, an unincorporated organization, or any
other business entity or enterprise, provided, however, that the term "Person"
shall not include the Corporation.
(b) ACKNOWLEDGEMENTS. Executive agrees and acknowledges that: (i) he
will be in a position of confidence and trust with the Corporation and he will
have access to Confidential Information; (ii) the nature and periods of
restrictions imposed by the covenants set forth in this Section are fair,
reasonable and necessary to protect and preserve for the Corporation the
benefits of this Agreement and that such restrictions will not prevent Executive
from earning a livelihood; (iii) the Corporation would sustain irreparable loss
and damage if Executive were to breach any of such covenants; and (iv) the
covenants herein set forth are made as an inducement to and have been relied
upon by the Corporation in entering this Agreement.
(c) CONFIDENTIAL INFORMATION. Executive hereby covenants and agrees
that Executive shall not, directly or indirectly, during the Term of this
Agreement and for three (3) years after Executive's employment is terminated for
whatever reason, disclose to any Person or use or otherwise exploit for
Executive's own benefit or for the benefit of any other Person any Confidential
Information that was disclosed to Executive or acquired by Executive while an
employee of the Corporation. Upon the termination or expiration of this
Agreement, Executive shall return to the Corporation all material in Executive's
possession or control which is of a confidential matter relating to the
Corporation's business. These provision shall survive the termination or
expiration of this Agreement.
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(d) NON-COMPETITION.
(1) Except as provided in section (2) below, Executive hereby covenants
and agrees that Executive shall not, other than pursuant to this Agreement,
directly or indirectly, either for Executive's own benefit or as an officer,
director, shareholder, partner, proprietor, employee, agent, consultant, or
independent contractor of any other Person, during the Term and for one (1) year
after Executive's employment by the Corporation is terminated for whatever
reason, (i) solicit any contract or other arrangement for the management,
submanagement or participation in the management of any healthcare or other
long-term care facility owned, leased, or managed by the Corporation or any
affiliate or subsidiary of the Corporation or to which the Corporation or any
affiliate or subsidiary of the Corporation provides any ancillary services as of
the date in question ("Iatros Facility") or (ii) solicit any contract or other
arrangement for the providing of any ancillary services to any Iatros Facility.
However, nothing in this Section 10(d) shall be deemed to prevent Executive from
passively investing in or acquiring up to one percent (1%) of any class of
securities of any Person who is engaged in substantially the same business as
the Corporation at a location that is within fifteen (15) miles or less of any
Iatros Facility, if such class of securities is listed on a national securities
exchange or is quoted on NASDAQ; provided, however, that Executive shall not
serve as an officer, director, partner, proprietor, employee, or agent of any
Person (other than any Person for whom the Executive is serving as such on the
date of this Agreement) who is engaged in substantially the same business as the
Corporation at a location that is within fifteen (15) miles or less of any
Iatros Facility, except with the prior written approval of the Corporation's
Board of Directors.
(e) CONSENT TO COURT-ORDERED REMEDY. Executive acknowledges that his
breach of any covenant set forth in this Section 10 will result in irreparable
injury to the Corporation and that the Corporation's remedies at law for such a
breach are inadequate and extremely difficult to calculate or determine.
Accordingly, Executive agrees and consents that upon such a breach or threatened
breach by Executive of any covenant set forth herein, the Corporation shall be
entitled to such remedies in law or equity as may be determined by the court for
such a breach or threatened breach.
(f) REMEDIES CUMULATIVE AND CONCURRENT. The rights and remedies of the
Corporation, as provided in this Section 10 shall be cumulative and concurrent
and may be pursued separately, successively or together against Executive at the
sole discretion of the Corporation, and may be exercised as often as occasion
therefor shall arise. The failure to exercise any right or remedy shall in no
event be construed as a waiver or release thereof.
11. INDEMNITY. To the fullest extent permitted by law, the Corporation
shall indemnify Executive and hold him harmless for any acts or decisions made
by him in good faith while performing services for the Corporation. In addition,
to the fullest extent permitted by law, the Corporation shall pay all expenses,
including attorney's fees, actually and necessarily incurred by Executive in
connection with the defense of any action, suit or proceeding challenging such
acts of decisions and in connection with any appeal thereon including the costs
of settlement. This indemnification obligation shall survive the termination of
the Executive's employment hereunder.
12. WAIVER OF BREACH OF VIOLATION NOT DEEMED CONTINUING. The waiver by
either party of a breach or violation of any provision of this Agreement shall
not operate as or be construed to be a waiver of any subsequent breach hereof.
13. NOTICES. Any and all notices required or permitted to be given
under this Agreement will be sufficient if furnished in writing, personally
delivered or sent by certified mail, return receipt requested as follows:
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To Executive:
Robert L. Woodson III
P.O. Box 1838
LaFollette, Tennessee 37766
To the Corporation:
Iatros Health Network, Inc.
Attn: Ronald E. Lusk, Chairman & CEO
11910 Greenville Avenue
Suite 300
Dallas, Texas 75243
14. SECURITIES LAW COMPLIANCE. The Executive represents and agrees that
he is acquiring any Shares he receives under this Agreement for his own account
and not with the intention reselling or distributing the Shares, except as
permitted under this Agreement and any applicable federal and state securities
laws. The Corporation shall have the right to take any actions it may deem
necessary or appropriate to ensure that the Shares granted to the Executive
complies with applicable federal and state securities laws.
15. TAX LIABILITY. The Corporation may withhold from any payment made
pursuant to this Agreement any federal, state or local taxes required to be
withheld from such payment. The Executive shall make such arrangements as may be
required or be satisfactory to the Corporation (in its sole discretion) for the
payment of any tax withholding obligations that arise in connection with the
granting of Shares under this Agreement. The Corporation shall not be required
to issue any Shares under this Agreement until such obligations are satisfied.
16. GOVERNING LAW. This Agreement shall be interpreted, construed and
governed according to the laws of the State of Texas. The parties hereto consent
to jurisdiction and venue in the Texas state courts in Dallas, Texas and United
States District Court for the Northern District of Texas, Dallas Division.
17. PARAGRAPH HEADINGS. The paragraph headings contained in this
Agreement are for convenience only and shall in no manner be construed as a part
of this Agreement.
18. ENTIRE AGREEMENT. This Agreement supersedes all prior discussions
and agreements between the Corporation, or any of its officers, directors,
employees, or agents, and Executive with respect to all mattes relating to the
employment by the Corporation of Executive and all other matters contained
herein, and this Agreement constitutes the sole and entire agreement with
respect thereto. Any representation, inducement, promise or agreement, whether
oral or written, between the Corporation, or any of its officers, directors,
employees, or agents, and Executive which is not embodied herein shall be of no
force or effect.
19. SUCCESSORS AND ASSIGNORS. This Agreement shall be binding upon, and
shall inure to the benefit of, the Corporation and Executive and their
respective heirs, personal and legal representatives, successors, and assigns.
20. SEVERABILITY. If any term, covenant or condition of this Agreement
or the application thereof to any person or circumstance shall, to any extent,
be invalid or unenforceable the
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remainder of this Agreement or the application of such terms, covenants and
conditions to persons or circumstances other than those as to which it is held
invalid or unenforceable shall be affected thereby and each term, covenant or
condition of this Agreement shall be valid and be enforced to the fullest extent
permitted by law.
IN WITNESS WHEREOF, the Corporation has hereunder to caused this
Agreement to be executed by its duly authorized offices and seals to be hereunto
affixed, and Executive has hereunto set his hand and seal, all being done in
duplicate originals delivered to each party as of the day and year first above
written.
/s/ Grace H. Stant /s/ Robert L. Woodson III
- ------------------------------ ------------------------------
Witness Robert L. Woodson III
ATTEST: Iatros Health Network, Inc.
/s/ Albert Sousa By: /s/ Michael H. Seeliger
- ------------------------------ ------------------------------
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EXHIBIT A
DESCRIPTION OF SPECIFIC DUTIES AND RESPONSIBILITIES
PRESIDENT AND CHIEF OPERATING OFFICER
POSITION AND SCOPE OF DUTIES.
(a) Executive shall serve the Corporation as its President and Chief
Operating Officer. At all times, Executive shall report to, discharge his
duties in consultation with, and be under the direct supervision and control
of the Corporation's Chairman and Chief Executive Officer, shall perform such
duties, consistent with the Executive's employment as a senior corporate
executive, shall hold such other titles with respect to the Corporation, or
any of its divisions, subsidiaries, or affiliates, as the Corporation's Board
of Directors may from time to time determine, and shall comply with all
applicable provisions of the Corporation's certificate of incorporation, by
laws, and other governing documents.
The President and Chief Operating Officer of the corporation, has general
supervision of the affairs of the corporation, and shall see that all orders and
resolutions of the Board of Directors are implemented. The President will be
responsible to the Chairman of the board.
PRIMARY DUTIES OF POSITION:
1. Provides direction and leadership in order to achieve the corporation's
philosophy, mission and strategy.
2. Establishes current and long range objectives, plans, and policies, subject
to approval by the Board of Directors.
3. Oversees the adequacy and soundness of the organization's financial
structure.
4. Reviews operating results of the organization, compares them to established
objectives, and takes steps to ensure that appropriate measures are taken
to correct unsatisfactory results.
5. Represents the corporation within the community.
6. Plans and directs all investigations and negotiations pertaining to
mergers, joint ventures, the acquisition of businesses, or the sale of
major assets with approval of the Board of Directors.
7. Assures development of programs for growth and expansion consistent with
the organization's mission, policies, and strategic plans.
8. Manages, develops and evaluates positions that report to the President.
9. Responsible for all activities when CEO is absent.
As to employees under his jurisdiction, including those working directly under
his supervision, Executive shall use his good faith diligent efforts (I) to
employ and retain only employees who are capable and willing to perform
according to applicable legal requirements and applicable policies of the
Corporation and also (ii) to assure that such personnel are properly trained and
supervised. Except and to the extent otherwise directed by the Corporation's
Chairman of the board/Chief Executive Officer, Executive may
<PAGE>
hire and terminate the employment of any other employee of the Corporation, or
of any of its divisions, subsidiaries, or affiliates, under his supervision and
jurisdiction upon such terms as he deems to be in the best interest of the
Corporation.
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EXHIBIT B
ELECTION TO INCLUDE VALUE OF RESTRICTED PROPERTY
IN GROSS INCOME IN YEAR OF TRANSFER UNDER SECTION 83(b)
Pursuant to Section 83(b) of the Internal Revenue Code of 1986, as
amended, I hereby elect to include in my gross income at the time of transfer
the amount includible under Section 83(b) with respect to the restricted
property described below, in accordance with applicable regulations:
1. THE NAME, ADDRESS AND TAXPAYER IDENTIFICATION NUMBER OF THE UNDERSIGNED ARE:
Name: Robert L. Woodson, III
Address: ___________________________________
-----------------------------------
-----------------------------------
Taxpayer identification number:
-----------------------------------
2. DESCRIPTION OF PROPERTY WITH RESPECT TO WHICH THE ELECTION IS BEING MADE:
Five hundred thousand (500,000) shares of Common Stock, $.001 par
value, of Iatros Health Network, Inc.
3. DATE ON WHICH THE PROPERTY WAS TRANSFERRED AND TAXABLE YEAR FOR WHICH THE
ELECTION IS MADE:
Date of transfer: ___________
Taxable year for which election made: Calendar year 1999
4. THE NATURE OF THE RESTRICTION(S) TO WHICH THE PROPERTY IS SUBJECT:
Forfeiture in the event that the Employment Agreement between the
undersigned and Iatros Health Network, Inc. is terminated on or before the
one-year anniversary of the date of such Agreement for any reason while the
undersigned is employed by the corporation (other than termination by reason of
death or becoming totally and permanently disabled, or in the event of a
"Change-in-Control" as defined in such Agreement).
5. FAIR MARKET VALUE AT TIME OF TRANSFER:
The fair market value at the time of transfer (determined without
regard to any restrictions other than restrictions which by their terms will
never lapse) of the property with respect to which this election is being made
is ____ per share, for an aggregate fair market value of $________.
<PAGE>
6. AMOUNT PAID FOR THE PROPERTY:
No amount has been paid by the undersigned for said property.
7. FURNISHING STATEMENT TO EMPLOYER:
A copy of this statement has been furnished to Iatros Health Network,
Inc.
Dated: _______________
Signature: _______________________
Name: _______________________
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INSTRUCTIONS FOR SECTION 83(B) ELECTION FORM:
1. Review and complete all items on this form, including:
- Address and taxpayer identification number (i.e., Social
Security number) (Item 1)
- Date of transfer (Item 3)
- Fair market value per share and in the aggregate (Item 5)
- Signature and date (bottom)
2. Provide a copy of this form within 30 days of the date of transfer to:
- Iatros Health Network, Inc.
- Director, Internal Revenue Service Center, of the Service
Center where you expect to file your income tax return
3. Attach a copy of this form to your 1999 Federal income tax return
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IATROS HEALTH NETWORK, INC.
CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT made and entered into as of the 26th day of February,
1999, by and between Iatros Health Network, Inc., a Delaware corporation (the
"Company") and Robert L. Woodson III, the Company's Chief Operating Officer (the
"Executive"), and.
WHEREAS, the Company has entered into an employment agreement with
Executive, effective as of January 1, 1999 (the "Employment Agreement"); and
WHEREAS, the Board of Directors of the Company believes it is in the
best interests of the Company and its shareholders to enter into this Agreement
with Executive to ensure the continuity of management of the Company and
reinforce and encourage the continued attention and dedication of the Executive
to his assigned duties without distraction in the face of potentially disruptive
circumstances arising from the possibility of a change-in-control of the
Company; and
WHEREAS, the Board of Directors of the Company has approved and
authorized the execution of this Agreement with the Executive to take effect as
stated in Section 1 hereof.
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is agreed as
follows:
1. TERM OF AGREEMENT. This Agreement shall commence on the date set out
above and shall continue in effect during the term of the Executive's Employment
Agreement (or any extension, modification or renewal thereof) and shall remain
in effect for a period of twenty-four (24) months after the date a
Change-In-Control occurs.
2. CHANGE-IN-CONTROL.
(a) The Executive shall have no rights under this Agreement
until there shall have been a Change-in-Control, as defined in (b) below.
(b) For purposes of this Agreement, a "Change-in-Control"
shall mean: (i) the sale of substantially all of the assets of the Corporation
to another person or entity (other than a subsidiary or other affiliate of the
Corporation), (ii) the acquisition of actual or beneficial ownership of more
than fifty percent of the total combined voting power of all classes of
Corporation stock entitled to vote by a person or group of persons acting in
concert (other than a subsidiary or other affiliate of the Corporation) who did
not own more than fifty percent of such on the date of this Agreement, or (iii)
the merger of the Corporation into another entity (other than a subsidiary or
other affiliate of the Corporation), where the Corporation's shareholders
(determined as of the date of merger) own (directly or indirectly) less than
fifty percent of the shares of the surviving entity.
3. PUT OPTION RIGHTS UPON A CHANGE-IN-CONTROL. Following a
Change-in-Control, the Executive shall have the right to sell to the Company
(the "put option") all or any portion of the shares of Company stock granted to
him under his Employment Agreement or obtained through the exercise of
Company-granted stock options which he owned (or to which he was entitled under
an outstanding stock option or other agreement) as of the date of the
Change-in-
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Control. The Company shall buy any shares put to it under this Paragraph upon
the following terms and conditions:
(a) The put option shall be exercisable in whole or in part by
for a period of one (1) year following the date on which the Change-in-Control
occurs. Notwithstanding the preceding sentence, in the event the Executive
terminates employment with the Company before expiration of the one-year
exercise period, the put option shall expire no later than thirty (30) days
after the Executive's termination; provided, that if the Executive's employment
is terminated by the Company for "Just Cause" (as defined in the Executive's
Employment Agreement), the put option shall expire as of the date of his
termination.
(b) The put shall be exercised by the Executive by written
notice to the Company which sets forth the number of shares to be sold to the
Company.
(c) The purchase price to be paid by the Company for any
shares put to it pursuant to this paragraph shall be one hundred and five
percent (105%) of the per share price (or the equivalent thereof) paid in the
transaction causing the Change-in-Control. The aggregate purchase price (less
any legally required income tax or other withholding) shall be paid in one lump
sum payment to the Executive within fifteen (15) days of the date the Executive
delivers stock certificate(s) for the shares being put to the Company (if
required by the Company).
(d) This put option right shall apply to any shares of stock
which the Executive receives in exchange for his Company stock as the result of
the Change-in-Control. The per share price to be paid for any such stock put to
the Company shall be 105% of the per share value assigned such stock for
purposes of the transaction causing the Change-in-Control.
4. SEVERANCE COMPENSATION AND BENEFITS. If, after the occurrence of a
Change-in-Control, the Executive's employment is terminated by the Company
during the twenty-four (24) month period following the date on which the
Change-in-Control occurs for any reason other than "Just Cause" (as defined in
the Executive's Employment Agreement), the following shall occur:
(a) The Company shall pay to the Executive, within fifteen
(15) days of the date his employment is terminated by the Company, a single sum
cash payment equal to two and one-half (2-1/2) times the Executive's average
annual compensation (including base salary and bonuses) paid to him in cash
during the thirty-six (36) month period immediately preceding the date on which
the Change-in-Control occurred (or, in the event the Executive had not been
employed by the Company or received cash compensation for a period of at least
36 months at that time, the period that the Executive was employed or received
cash compensation, as applicable).
(b) The Executive, together with his dependents and
beneficiaries, shall continue to be fully eligible for (and participate in) all
company-sponsored accident and health, life insurance and other welfare benefit
programs available to the Executive as of the date on which the
Change-in-Control occurred (on the same terms and conditions in effect on that
date) or receive substantially equivalent coverage (or the full value thereof in
cash) from the Company, until the second anniversary of the Executive's
termination of employment.
5. CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY. Notwithstanding
anything in this Agreement to the contrary, if any of the payments or other
benefits provided for in this Agreement, either alone or together with any other
payments and benefits which the Executive has the right to receive from the
Company, would be nondeductible (in whole or part) by the Company for Federal
income tax purposes because of Section 280G of the Internal Revenue Code, the
payments and benefits to be made pursuant to this Agreement shall be reduced to
such
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amount or level as will result in no portion of such payments or benefits being
nondeductible under Section 280G. This determination shall be made by the
Company's independent auditors, the cost of which shall be paid by the Company.
6. NONEXCLUSIVE RIGHTS. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit, bonus,
incentive, retirement or other plan or program provided by the Company and for
which the Executive may qualify, nor shall anything herein limit or reduce such
rights as the Executive may have under any other agreement with, or plan,
program, policy or practice of, the Company. Amounts which are vested benefits
or which the Executive is otherwise entitled to receive under any agreement
with, or plan, program, policy or practice of, the Company (including, without
limitation, the cashout of unused vacation days upon termination of employment)
shall be payable in accordance with such agreement, plan, program, policy or
practice.
7. SUCCESSORS.
(a) This Agreement shall be binding upon the Company and any successor
thereto (whether by merger, consolidation, assignment or otherwise).
(b) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees, and legatees. Any amounts due and
payable to the Executive under this Agreement on or after his death shall be
paid to his estate.
8. NOTICES. All notices hereunder shall be in writing, and shall be
deemed effectively given upon the earliest of (i) actual receipt, by whatever
means, (ii) personal delivery, (iii) delivery by an overnight courier service to
the applicable address specified below, or (iv) five days after sent by
certified or registered mail, return receipt requested, postage prepaid,
addressed to the parties at the applicable address specified below (or such
other address as may be designated in writing by either party to the other):
If to Company:
Iatros Health Network, Inc.
Attn: Chairman and Chief Executive Officer
11910 Greenville Avenue
Suite 300
Dallas, Texas 75243
If to Executive:
Robert L. Woodson III
1625 Rodgers Lane
La Follette, Tennessee 37766
9. APPLICABLE LAW. The validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the state of
Delaware.
10. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
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<PAGE>
11. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instruments.
12. EFFECTIVE DATE. This Agreement shall become effective as of the
date first set forth above.
13. EMPLOYMENT. This Agreement does not constitute a contract of
employment or impose on the Company an obligation to retain the Executive as an
Executive, to continue his or her current employment status or to change any
employment policies of the Company.
14. AMENDMENTS. No amendment or other change to this Agreement shall be
binding unless in writing and signed by both parties.
15. NONTRANSFERABILITY OF RIGHTS. The rights of the Executive under
this Agreement are not subject to the claims of the Executive's creditors and
may not be voluntarily or involuntarily transferred, assigned, alienated,
accelerated or encumbered. Notwithstanding the preceding sentence, any payments
owing to the Executive under this Agreement may, as determined by the Chairman
and Chief Executive Officer of the Company (or his designee) in his sole
discretion, be offset by any liability of the Executive owing to the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
IATROS HEALTH NETWORK, INC.
By /s/ Michael H. Seeliger
---------------------------------
Title: Executive Vice President
------------------------------
ROBERT L. WOODSON III
/s/ Robert L. Woodson III
---------------------------------
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Exhibit 4.6
EMPLOYMENT AGREEMENT
BETWEEN
IATROS HEALTH NETWORK, INC.
AND
ALBERT SOUSA
THIS AGREEMENT made and entered into as of the 26th day of February,
1999, by and between Iatros Health Network, Inc. (the "Corporation"), a Delaware
corporation, and Albert Sousa, a resident of Florida (hereinafter referred to as
"Executive").
WHEREAS, the parties, for and in consideration of the mutual and
reciprocal covenants and agreements hereinafter contained, and intending to be
legally bound hereby, do contract and agree as follows:
1. PURPOSE AND EMPLOYMENT. The Corporation's primary business (the
"Corporation's Business") is owning, leasing, operating, and managing (i) senior
living and long-term care facilities (including, but not limited to, independent
living retirement facilities; congregate care facilities; assisted living
facilities; subacute, skilled, and intermediate care nursing facilities; and
long-term acute care hospitals), (ii) home health companies and agencies, (iii)
specialty outpatient medical facilities (including, but not limited to,
comprehensive outpatient rehabilitation facilities), and (iv) companies that
provide various ancillary healthcare services (including, but not limited to,
pharmacy, durable medical supplies and equipment, wound care, rehabilitation
therapies, IV therapies, respiratory therapies, and portable X-ray). The purpose
of this Agreement is to define the relationship between the Corporation and
Executive. The Corporation hereby employs Executive, and Executive hereby
accepts employment by the Corporation, all upon the terms and conditions
hereinafter set forth.
2. POSITION AND SCOPE OF DUTIES.
(a) Executive shall serve the Corporation as its Executive
Vice-President. At all times, Executive shall report to, discharge his duties in
consultation with, and be under the direct supervision and control of the
Corporation's Chairman and Chief Executive Officer, shall perform such duties,
consistent with the Executive's employment as a senior corporate executive,
shall hold such other titles with respect to the Corporation, or any of its
divisions, subsidiaries, or affiliates, as the Corporation's Board of Directors
may from time to time determine, and shall comply with all applicable provisions
of the Corporation's certificate of incorporation. Executive shall, subject to
the direction of the Corporation's Chairman and Chief Executive Officer, have
authority to formulate policies for and administer those aspects of the
Corporation and its divisions, subsidiaries, and affiliates as directed by the
Chairman and Chief Executive Officer. As to employees under his jurisdiction,
including those working directly under his supervision, Executive shall use his
best efforts (i) to employ and retain only employees who are capable and willing
to perform according to applicable legal requirements and applicable policies of
the Corporation and also (ii) to assure that such personnel are properly trained
and supervised. Subject to the direction of the Corporation's Chairman and Chief
Executive Officer, Executive may hire and terminate the employment of any other
employee of the Corporation, or of any of its divisions, subsidiaries or
affiliates, who is under his jurisdiction.
(b) Executive shall devote his primary business time to the business
and affairs of the Corporation, excluding any periods of vacation, sick leave,
and disability to which Executive is entitled; and he shall fulfill his duties
to the Corporation to the best of his ability. However, it
<PAGE>
shall not be a violation of this Agreement for the Executive to (i) serve on
corporate, civic, or charitable boards or committees, (ii) deliver lectures,
fulfill speaking engagements, or teach at educational institutions, and (iii)
manage his personal finances and passive investments, so long as none of such
activities (singularly or collectively) significantly interfere with the
performance of the Executive's responsibilities as an employee of the
Corporation in accordance with this Agreement.
(c) A description of the specific duties and responsibilities of the
Executive is contained in Exhibit A attached to this Agreement.
3. TERM. The term of this Agreement shall be for a period of three (3)
years commencing January 1, 1999 (the "Term") unless terminated earlier by
mutual agreement of the parties or by either party in accordance with Section 9
of this Agreement. Upon completion of the original three-year Term, the
Agreement shall automatically be renewed for a period of one (1) year as of each
succeeding January 1st (beginning January 1st, 2002); provided, that the
Corporation may terminate the Agreement as of any such renewal date by providing
ninety (90) days advance written notice to the Executive.
4. COMPENSATION DURING EMPLOYMENT. For all the services to be rendered
by Executive hereunder, the Corporation shall pay to Executive a base salary,
bonuses, and incentive compensation as follows:
(a) BASE SALARY. Executive shall be paid an annual base salary of Two
Hundred Thousand dollars ($200,000.00), payable in monthly installments. Payment
of such salary may be made in shares of Corporation stock (the "Shares"), cash,
or a combination thereof, as determined by the Chairman and Chief Executive
Officer, in his sole discretion, taking into account the Corporation's cash flow
requirements and any other aspect of the Corporation's financial condition
deemed relevant by the Chairman and Chief Executive Officer. The value of any
Shares of common stock paid to the Executive under this provision shall be based
on the per share price of the last trade of Shares as reported on NASDAQ or the
OTC bulletin board, as applicable, for the last trading day of the applicable
pay period (or if Shares were not traded on such date, for the closest preceding
date on which a trade occurred). The Chairman and Chief Executive Officer may
increase the Executive 's annual base salary effective as of any anniversary
date of this Agreement in such amounts as he deems appropriate in his sole
discretion.
(b) RESTRICTED STOCK GRANT. Upon the execution of this Agreement,
Executive shall receive a one time grant of Five Hundred Thousand (500,000)
shares of the Corporation's Common Stock. Except as otherwise provided in this
Agreement, in the event the Agreement is terminated on or before the one-year
anniversary of the date of the Agreement for any reason, the shares granted to
the Executive under this provision shall be forfeited; provided, that, in the
event the Executive is terminated by the Corporation without Just Cause (as
defined in Section 9) on or after July 1, 1999, the granted shares shall not be
forfeited.
(c) INITIAL STOCK OPTIONS. Upon execution of this Agreement, Executive
shall be granted an incentive stock options for a total of 300,000 shares of the
Corporation's Common Stock under the Corporation's stock option plan (the
"Initial Stock Options"). This grant is effective as of the date of this
Agreement (or the date of grant under the plan, if later). One third of such
Initial Stock Options shall become exercisable on each successive anniversary of
the date of the Agreement, provided that the Executive is employed by the
Corporation on each such anniversary date.
(d) EXECUTIVE'S INCENTIVE COMPENSATION. Executive may be entitled to
such bonuses and incentive compensation as may be determined by the Chairman and
Chief Executive Officer
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<PAGE>
of the Corporation in his sole discretion. Each such bonus or incentive
compensation may be paid in cash or Shares as the Chairman and Chief Executive
Officer of the Corporation shall determine. Such incentive compensation may also
include options to purchase shares of the Corporation's Common Stock pursuant to
a plan established by the Corporation's Board.
5. STOCK GRANTS.
(a) If the Executive terminates employment with the Corporation for any
reason prior to date on which his right to any Shares granted to him under
Paragraph 4(b) of this Agreement becomes fully vested and nonforfeitable, the
nonvested Shares shall be forfeited on the date of his termination.
Notwithstanding the foregoing, if the Executive dies or becomes totally and
permanently disabled (as determined by the Chairman and Chief Executive Officer)
while employed by the Corporation, the Executive's rights to any Shares granted
under this Agreement shall automatically become fully vested on the date he dies
or becomes disabled. For purposes of this Paragraph, the Executive is "disabled"
if he is incapable of performing his principal duties for the duration of this
Agreement due to a physical or mental condition.
(b) Notwithstanding (a) above, upon the occurrence of a
Change-in-Control of the Corporation, the Shares granted to the Executive under
this Agreement shall become fully vested and nonforfeitable. For purposes of
this Agreement, "Change-in-Control" shall mean (i) the sale of substantially all
of the assets of the Corporation to another person or entity (other than an
subsidiary or other affiliate of the Corporation), (ii) the acquisition of
actual or beneficial ownership of more than fifty percent of the total combined
voting power of all classes of Corporation stock entitled to vote by a person or
group of persons acting in concert (other than a subsidiary or other affiliate
of the Corporation) who did not own more than fifty percent of such on the date
of this Agreement, (iii) or the merger of the Corporation into another entity
(other than a subsidiary or other affiliate of the Corporation), where the
Corporation's shareholders (determined as of the date of the merger) own
(directly or indirectly) less than fifty percent of the shares of the surviving
entity.
(c) Until any Shares awarded under this Agreement become fully vested
and nonforfeitable, such Shares shall be held by the Corporation in escrow. Upon
becoming vested, a Share certificate for the newly vested Shares shall be
delivered to the Executive as soon as administratively feasible after the date
of vesting. The Executive shall have all the rights of a shareholder with
respect to the Shares held in escrow, including the right to vote the shares and
to receive all dividends and other distributions paid with respect to the
shares. Any Shares held in escrow under this Agreement shall be held, and a
certificate shall be issued, in the name of the Executive. The Executive hereby
grants to the Corporation an irrevocable power of attorney to sign any and all
documents and to take such other actions as may be necessary to transfer
ownership to the Corporation of any forfeited Shares.
(d) Any Shares held in escrow by the Corporation for the Executive
under this Agreement are not subject to the claims of the Executive's creditors
and may not be voluntarily or involuntarily transferred, assigned, alienated,
accelerated or encumbered. Notwithstanding the preceding sentence, any Shares
deliverable to the Executive under this Agreement may, as determined by the
Chairman and Chief Executive Officer in his sole discretion, be offset by any
liability of the Executive owing to the Corporation.
(e) The Executive may make a Section 83(b) election to treat the
restricted stock granted to him under Paragraph 4(b) as taxable income at the
time of transfer under this Agreement. A section 83(b) election form (with
accompanying instructions) which may be used for this purpose is attached to
this Agreement as Exhibit B.
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6. OTHER BENEFITS. In addition to other benefits conferred under this
Agreement, Executive shall have the right to participate in (on the same terms
and conditions as available to other senior executives of the Corporation) all
pension plans, retirement plans, deferred compensation plans, executive
compensation plans, major medical, group health, disability, accidental death
and group term life insurance plans, "fringe" benefit plans (including
permissible sick days or leave days), and other employee benefit plans that the
Corporation shall, from time to time, generally confer upon other senior
executives of the Corporation.
7. VACATION, HOLIDAYS, ETC. Executive shall be entitled to five (5)
weeks vacation with pay (or such greater length of time as may be approved from
time to time by the Corporation's Board of Directors) during each fiscal year of
the Corporation, such vacation to be taken by Executive at such times as shall
be consistent with the business requirements of the Corporation. In addition,
Executive shall also be entitled to such holidays as are customary in the
Corporation. Unused holidays and days of vacation may not be carried over form
one fiscal year to another, and additional income will not be given for vacation
time or holidays not taken.
8. EXPENSES. Executive is expected from time to time, to incur
reasonable expenses as he reasonably deems to be for the Corporation's benefit
and for promoting the business of the Corporation, including expenses for
entertainment, travel, and similar items. Executive shall be promptly reimbursed
for all such reasonable expenses (in accordance with the policies and procedures
regarding employee business-related expense from time to time established by the
Corporation for its senior executive officers) upon his presenting to the
Corporation a detailed itemized expense voucher therefor in accordance with
applicable corporate policies. Executive may also draw funds from the
Corporation, but only to the extent necessary and appropriate, for reasonable
expenses to be incurred on behalf of the Corporation and then only in accordance
with applicable corporate policies. Detailed records of the expenditure of such
funds shall be tendered by Executive for expenses incurred on behalf of the
Corporation in accordance with applicable corporate policies, and if any portion
of such funds are unexpended or unaccountable, then Executive shall promptly
return such unexpended or unaccountable sums to the Corporation.
9. TERMINATION OF EMPLOYMENT.
(a) TERMINATION FOR CAUSE. Notwithstanding the provisions of Section 3
hereof, the Corporation shall have the right to terminate this Agreement
immediately upon giving written notice to the Executive (or Executive's personal
or legal representatives, if appropriate), for any of the following reasons:
(1) Death of the Executive;
(2) Inability of the Executive, by reason of physical or
mental disability ("Disability"), to continue to perform his duties hereunder
for the remainder of the term of this Agreement;
(3) Just Cause, which is defined herein to mean: (a)
Executive's gross negligence in performing his duties hereunder; (b) Executive's
willful failure or refusal to perform his duties hereunder; (c) Executive's
intentional wrongful act or wrongful failure to act that materially and
adversely affects the business affairs of the Corporation; or (d) Executive's
commission of any act of fraud, commission of any felony, material breach of any
provision of this Agreement, involvement in any material conflict of interest or
self dealing transaction in violation of the applicable corporate laws of the
State of Delaware, or other breach of any of his quasi-fiduciary duties to the
Corporation in violation of the applicable corporate laws of the State of
Delaware (including, but not limited to, the duties of due care, loyalty, and
fair dealing).
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<PAGE>
(b) TERMINATION BENEFITS. If this Agreement expires, or if during the
Term the Corporation terminates this Agreement and Executive's employment
hereunder as a result of any of the following, Executive will be entitled to the
following termination compensation or severance benefits:
(1) DEATH. If during the Term, Executive's employment is
terminated by reason of death, the Corporation shall
thereafter have no liability to Executive's estate hereunder,
except to timely pay and provide his estate the following: (i)
the portion, if any, of Executive's Base Salary for the period
up to the date of death that remains unpaid; (ii) any bonuses
and incentive compensation for any preceding year or for the
current year that have been earned (pro-rated to the date of
death), but have not been paid as of the date of death; and
(iii) all other payments and benefits that Executive is
eligible to receive, but have not yet been received as of the
date of death, under all benefit plans, retirement plans, and
other arrangements that, by their terms, apply.
(2) DISABILITY. If during the Term, Executive's employment is
terminated due to Executive's Disability as defined in
paragraph 9 (a)(2) above, the Corporation shall, after such
effective date of termination, have no liability to Executive
hereunder, except to timely pay and provide the Executive the
following: (i) the portion, if any, of Executive's Base Salary
for the period up to the effective date of termination that
remains unpaid; (ii) any bonuses and incentive compensation
for any preceding year or for the current year (pro-rated to
the effective date of termination) that have been earned, but
have not been paid as of the effective date of termination;
and (iii) all other payments and benefits that Executive is
eligible to receive, but have not yet been received as of the
effective date of termination, under all benefit plans,
retirement plans, and other arrangements that, by their terms,
apply.
(3) JUST CAUSE. If during the Term, Executive's employment is
terminated for Just Cause as specified in Section 9(a)(3)
above, the Corporation shall, after such effective date of
expiration or termination, have no liability to Executive
hereunder, except to timely pay and provide the Executive the
following: (i) any bonuses and incentive compensation for any
preceding year or for the current year (pro-rated to the
effective date of termination; and (ii) all other payments and
benefits that Executive is eligible to receive, but have not
yet been received as of the effective date of termination,
under all benefit plans, retirement plans, and other
arrangements that, by their terms, apply. To the extent that
any insurance coverages maintained by the Corporation for the
benefit of Executive have conversion privileges into
individual policies, the Executive, upon his termination of
employment or within any applicable grace periods thereafter,
may (at his sole cost) so convert such coverages, as well as
exercise (at his sole cost) all rights of continuation
prescribed by applicable law.
(4) WITHOUT CAUSE. If during the Term, Executive's employment
is terminated without the Executive's written consent and
without Cause for any reason whatsoever other than disability
or death, the Corporation shall, after such effective date or
expiration or termination, have no liability to Executive
hereunder, except to timely pay and provide the Executive the
following: (i) the same Base Salary, bonuses and incentive
compensation, benefits, and other compensation that the
Executive would otherwise be entitled to receive hereunder
through the remaining unexpired Term hereof as though no
termination or expiration had occurred; (ii) any bonuses and
incentive compensation for any preceding year or for the
current year that have been earned, but have not been
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paid as of the effective date of termination; (iii) all other
payment and benefits that Executive is eligible to receive,
but have not yet been received as of the effective date of
termination. To the extent that any insurance coverages
maintained by the Corporation for the benefit of Executive
have conversion privileges into individual policies, the
Executive, upon his termination of employment or within any
applicable grace periods thereafter, may (at his sole cost) so
convert such coverages, as well as exercise (at his sole cost)
all rights of continuation prescribed by applicable law.
(5) TERMINATION BY EXECUTIVE. In the event that Executive
terminates this Agreement for any reason, the Corporation
shall, after such effective date of termination, have no
liability to Executive hereunder, except as specified in
Section 9(b)(3) hereof, as if the Corporation had terminated
the Executive for Cause.
10. RESTRICTIVE COVENANTS OF EXECUTIVE.
(a) DEFINITIONS. For the purposes of this Agreement:
(1) "CONFIDENTIAL INFORMATION" shall mean any information
relating to the Corporation or to the business of the Corporation (or to any of
its parents, subsidiaries or affiliates) (whether proprietary or otherwise) not
generally known to the public or known by Executive otherwise than as a
consequence of or through his employment with the Corporation and treated by the
Corporation as being confidential, including, but not limited to, research,
marketing, customer lists, financing sources, methods, techniques and systems,
all of which shall be deemed by the Corporation and Executive as being
Confidential Information.
(2) "PERSON" shall mean an individual, a partnership, an
association, a corporation, a trust, an unincorporated organization, or any
other business entity or enterprise, provided, however, that the term "Person"
shall not include the Corporation.
(b) ACKNOWLEDGEMENTS. Executive agrees and acknowledges that: (i) he
will be in a position of confidence and trust with the Corporation and he will
have access to Confidential Information; (ii) the nature and periods of
restrictions imposed by the covenants set forth in this Section are fair,
reasonable and necessary to protect and preserve for the Corporation the
benefits of this Agreement and that such restrictions will not prevent Executive
from earning a livelihood; (iii) the Corporation would sustain irreparable loss
and damage if Executive were to breach any of such covenants; and (iv) the
covenants herein set forth are made as an inducement to and have been relied
upon by the Corporation in entering this Agreement.
(c) CONFIDENTIAL INFORMATION. Executive hereby covenants and agrees
that Executive shall not, directly or indirectly, during the Term of this
Agreement and for three (3) years after Executive's employment is terminated for
whatever reason, disclose to any Person or use or otherwise exploit for
Executive's own benefit or for the benefit of any other Person any Confidential
Information that was disclosed to Executive or acquired by Executive while an
employee of the Corporation. Upon the termination or expiration of this
Agreement, Executive shall return to the Corporation all material in Executive's
possession or control which is of a confidential matter relating to the
Corporation's business. These provision shall survive the termination or
expiration of this Agreement.
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(d) NON-COMPETITION.
(1) Except as provided in section (2) below, Executive hereby covenants
and agrees that Executive shall not, other than pursuant to this Agreement,
directly or indirectly, either for Executive's own benefit or as an officer,
director, shareholder, partner, proprietor, employee, agent, consultant, or
independent contractor of any other Person, during the Term and for one (1) year
after Executive's employment by the Corporation is terminated for whatever
reason, (i) solicit any contract or other arrangement for the management,
submanagement or participation in the management of any healthcare or other
long-term care facility owned, leased, or managed by the Corporation or any
affiliate or subsidiary of the Corporation or to which the Corporation or any
affiliate or subsidiary of the Corporation provides any ancillary services as of
the date in question ("Iatros Facility") or (ii) solicit any contract or other
arrangement for the providing of any ancillary services to any Iatros Facility.
However, nothing in this Section 10(d) shall be deemed to prevent Executive from
passively investing in or acquiring up to one percent (1%) of any class of
securities of any Person who is engaged in substantially the same business as
the Corporation at a location that is within fifteen (15) miles or less of any
Iatros Facility, if such class of securities is listed on a national securities
exchange or is quoted on NASDAQ; provided, however, that Executive shall not
serve as an officer, director, partner, proprietor, employee, or agent of any
Person (other than any Person for whom the Executive is serving as such on the
date of this Agreement) who is engaged in substantially the same business as the
Corporation at a location that is within fifteen (15) miles or less of any
Iatros Facility, except with the prior written approval of the Corporation's
Board of Directors.
(e) CONSENT TO COURT-ORDERED REMEDY. Executive acknowledges that his
breach of any covenant set forth in this Section 10 will result in irreparable
injury to the Corporation and that the Corporation's remedies at law for such a
breach are inadequate and extremely difficult to calculate or determine.
Accordingly, Executive agrees and consents that upon such a breach or threatened
breach by Executive of any covenant set forth herein, the Corporation shall be
entitled to such remedies in law or equity as may be determined by the court for
such a breach or threatened breach.
(f) REMEDIES CUMULATIVE AND CONCURRENT. The rights and remedies of the
Corporation, as provided in this Section 10 shall be cumulative and concurrent
and may be pursued separately, successively or together against Executive at the
sole discretion of the Corporation, and may be exercised as often as occasion
therefor shall arise. The failure to exercise any right or remedy shall in no
event be construed as a waiver or release thereof.
11. INDEMNITY. To the fullest extent permitted by law, the Corporation
shall indemnify Executive and hold him harmless for any acts or decisions made
by him in good faith while performing services for the Corporation. In addition,
to the fullest extent permitted by law, the Corporation shall pay all expenses,
including attorney's fees, actually and necessarily incurred by Executive in
connection with the defense of any action, suit or proceeding challenging such
acts of decisions and in connection with any appeal thereon including the costs
of settlement. This indemnification obligation shall survive the termination of
the Executive's employment hereunder.
12. WAIVER OF BREACH OF VIOLATION NOT DEEMED CONTINUING. The waiver by
either party of a breach or violation of any provision of this Agreement shall
not operate as or be construed to be a waiver of any subsequent breach hereof.
13. NOTICES. Any and all notices required or permitted to be given
under this Agreement will be sufficient if furnished in writing, personally
delivered or sent by certified mail, return receipt requested as follows:
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<PAGE>
To Executive:
Albert Sousa
13355 Park Boulevard
Seminole, Florida 33776
To the Corporation:
Iatros Health Network, Inc.
Attn: Ronald E. Lusk, Chairman & CEO
11910 Greenville Avenue
Suite 300
Dallas, Texas 75243
14. SECURITIES LAW COMPLIANCE. The Executive represents and agrees that
he is acquiring any Shares he receives under this Agreement for his own account
and not with the intention reselling or distributing the Shares, except as
permitted under this Agreement and any applicable federal and state securities
laws. The Corporation shall have the right to take any actions it may deem
necessary or appropriate to ensure that the Shares granted to the Executive
complies with applicable federal and state securities laws.
15. TAX LIABILITY. The Corporation may withhold from any payment made
pursuant to this Agreement any federal, state or local taxes required to be
withheld from such payment. The Executive shall make such arrangements as may be
required or be satisfactory to the Corporation (in its sole discretion) for the
payment of any tax withholding obligations that arise in connection with the
granting of Shares under this Agreement. The Corporation shall not be required
to issue any Shares under this Agreement until such obligations are satisfied.
16. GOVERNING LAW. This Agreement shall be interpreted, construed and
governed according to the laws of the State of Texas. The parties hereto consent
to jurisdiction and venue in the Texas state courts in Dallas, Texas and United
States District Court for the Northern District of Texas, Dallas Division.
17. PARAGRAPH HEADINGS. The paragraph headings contained in this
Agreement are for convenience only and shall in no manner be construed as a part
of this Agreement.
18. ENTIRE AGREEMENT. This Agreement supersedes all prior discussions
and agreements between the Corporation, or any of its officers, directors,
employees, or agents, and Executive with respect to all mattes relating to the
employment by the Corporation of Executive and all other matters contained
herein, and this Agreement constitutes the sole and entire agreement with
respect thereto. Any representation, inducement, promise or agreement, whether
oral or written, between the Corporation, or any of its officers, directors,
employees, or agents, and Executive which is not embodied herein shall be of no
force or effect.
19. SUCCESSORS AND ASSIGNORS. This Agreement shall be binding upon, and
shall inure to the benefit of, the Corporation and Executive and their
respective heirs, personal and legal representatives, successors, and assigns.
20. SEVERABILITY. If any term, covenant or condition of this Agreement
or the application thereof to any person or circumstance shall, to any extent,
be invalid or unenforceable the remainder of this Agreement or the application
of such terms, covenants and conditions to
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<PAGE>
persons or circumstances other than those as to which it is held invalid or
unenforceable shall be affected thereby and each term, covenant or condition of
this Agreement shall be valid and be enforced to the fullest extent permitted by
law.
IN WITNESS WHEREOF, the Corporation has hereunder to caused this
Agreement to be executed by its duly authorized offices and seals to be hereunto
affixed, and Executive has hereunto set his hand and seal, all being done in
duplicate originals delivered to each party as of the day and year first above
written.
/s/ Melody Sousa /s/ Albert Sousa
- ---------------------------------- -------------------------------------
Witness Albert Sousa
ATTEST: IATROS HEALTH NETWORK, INC.
/s/ Michael H. Seeliger By: /s/ Ronald E. Lusk
- ---------------------------------- ----------------------------------
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<PAGE>
EXHIBIT A
DESCRIPTION OF SPECIFIC DUTIES AND RESPONSIBILITIES
EXECUTIVE VICE PRESIDENT
POSITION AND SCOPE OF DUTIES.
(a) Executive shall serve the Corporation as Executive Vice President. At all
times, Executive shall report to, discharge his duties in consultation with, and
be under the direct supervision and control of Iatros Health Network, Inc's
Chairman/Chief Executive Officer. Executive shall perform such duties,
consistent with the Executive's employment as senior corporate executive, shall
hold such other titles with respect to the Corporation, or any of its divisions,
subsidiaries, or affiliates, as the Corporation's certificate of incorporation,
bylaws, and other governing documents. As the Executive Vice President of the
Corporation, Executive shall, subject to the direction of the Chief Executive
Officer and Chairman of the Board, have the authority to formulate policies for
and administer all operational aspects of Trinity Rehab, Oasis Healthcare and
Volunteer Medical Acquisition Corp, As to employees under his jurisdiction,
including those working directly under his supervision, Executive shall use his
best efforts (i) to employ and retain only employees who are capable and willing
to perform according to applicable legal requirements and applicable policies of
the Corporation and also (ii) to assure that such personnel are properly trained
and supervised. Subject to the direction of the Chief Executive Officer and
Chairman of the Board of Iatros Health Network, Inc., Executive may hire and
terminate the employment of any other employee of the Corporation, or of any of
its divisions, subsidiaries or affiliates, who is under his jurisdiction.
<PAGE>
EXHIBIT B
ELECTION TO INCLUDE VALUE OF RESTRICTED PROPERTY
IN GROSS INCOME IN YEAR OF TRANSFER UNDER SECTION 83(b)
Pursuant to Section 83(b) of the Internal Revenue Code of 1986, as
amended, I hereby elect to include in my gross income at the time of transfer
the amount includible under Section 83(b) with respect to the restricted
property described below, in accordance with applicable regulations:
1. THE NAME, ADDRESS AND TAXPAYER IDENTIFICATION NUMBER OF THE UNDERSIGNED ARE:
Name: Albert Sousa
Address: ___________________________________
-----------------------------------
-----------------------------------
Taxpayer identification number:
-----------------------------------
2. DESCRIPTION OF PROPERTY WITH RESPECT TO WHICH THE ELECTION IS BEING MADE:
Five hundred thousand (500,000) shares of Common Stock, $.001 par
value, of Iatros Health Network, Inc.
3. DATE ON WHICH THE PROPERTY WAS TRANSFERRED AND TAXABLE YEAR FOR WHICH THE
ELECTION IS MADE:
Date of transfer: ___________
Taxable year for which election made: Calendar year 1999
4. THE NATURE OF THE RESTRICTION(S) TO WHICH THE PROPERTY IS SUBJECT:
Forfeiture in the event that the Employment Agreement between the
undersigned and Iatros Health Network, Inc. is terminated on or before the
one-year anniversary of the date of such Agreement for any reason while the
undersigned is employed by the corporation (other than termination by reason of
death or becoming totally and permanently disabled, or in the event of a
"Change-in-Control" as defined in such Agreement).
5. FAIR MARKET VALUE AT TIME OF TRANSFER:
The fair market value at the time of transfer (determined without
regard to any restrictions other than restrictions which by their terms will
never lapse) of the property with respect to which this election is being made
is ____ per share, for an aggregate fair market value of $________.
<PAGE>
6. AMOUNT PAID FOR THE PROPERTY:
No amount has been paid by the undersigned for said property.
7. FURNISHING STATEMENT TO EMPLOYER:
A copy of this statement has been furnished to Iatros Health Network,
Inc.
Dated: _______________
Signature: __________________________
Name: __________________________
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<PAGE>
INSTRUCTIONS FOR SECTION 83(B) ELECTION FORM:
1. Review and complete all items on this form, including:
- Address and taxpayer identification number (i.e., Social
Security number) (Item 1)
- Date of transfer (Item 3)
- Fair market value per share and in the aggregate (Item 5)
- Signature and date (bottom)
2. Provide a copy of this form within 30 days of the date of transfer to:
- Iatros Health Network, Inc.
- Director, Internal Revenue Service Center, of the Service
Center where you expect to file your income tax return
3. Attach a copy of this form to your 1999 Federal income tax return
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<PAGE>
IATROS HEALTH NETWORK, INC.
CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT made and entered into as of the 26th day of February,
1999, by and between Iatros Health Network, Inc., a Delaware corporation (the
"Company") and Albert Sousa, an Executive Vice President of the Company (the
"Executive"), and.
WHEREAS, the Company has entered into an employment agreement with
Executive, effective as of January 1, 1999 (the "Employment Agreement"); and
WHEREAS, the Board of Directors of the Company believes it is in the
best interests of the Company and its shareholders to enter into this Agreement
with Executive to ensure the continuity of management of the Company and
reinforce and encourage the continued attention and dedication of the Executive
to his assigned duties without distraction in the face of potentially disruptive
circumstances arising from the possibility of a change-in-control of the
Company; and
WHEREAS, the Board of Directors of the Company has approved and
authorized the execution of this Agreement with the Executive to take effect as
stated in Section 1 hereof.
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is agreed as
follows:
1. TERM OF AGREEMENT. This Agreement shall commence on the date set out
above and shall continue in effect during the term of the Executive's Employment
Agreement (or any extension, modification or renewal thereof) and shall remain
in effect for a period of twenty-four (24) months after the date a
Change-In-Control occurs.
2. CHANGE-IN-CONTROL.
(a) The Executive shall have no rights under this Agreement
until there shall have been a Change-in-Control, as defined in (b) below.
(b) For purposes of this Agreement, a "Change-in-Control"
shall mean: (i) the sale of substantially all of the assets of the Corporation
to another person or entity (other than a subsidiary or other affiliate of the
Corporation), (ii) the acquisition of actual or beneficial ownership of more
than fifty percent of the total combined voting power of all classes of
Corporation stock entitled to vote by a person or group of persons acting in
concert (other than a subsidiary or other affiliate of the Corporation) who did
not own more than fifty percent of such on the date of this Agreement, or (iii)
the merger of the Corporation into another entity (other than a subsidiary or
other affiliate of the Corporation), where the Corporation's shareholders
(determined as of the date of merger) own (directly or indirectly) less than
fifty percent of the shares of the surviving entity.
3. PUT OPTION RIGHTS UPON A CHANGE-IN-CONTROL. Following a
Change-in-Control, the Executive shall have the right to sell to the Company
(the "put option") all or any portion of the shares of Company stock granted to
him under his Employment Agreement or obtained through the exercise of
Company-granted stock options which he owned (or to which he was entitled under
an outstanding stock option or other agreement) as of the date of the
Change-in-
<PAGE>
Control. The Company shall buy any shares put to it under this Paragraph upon
the following terms and conditions:
(a) The put option shall be exercisable in whole or in part by
for a period of one (1) year following the date on which the Change-in-Control
occurs. Notwithstanding the preceding sentence, in the event the Executive
terminates employment with the Company before expiration of the one-year
exercise period, the put option shall expire no later than thirty (30) days
after the Executive's termination; provided, that if the Executive's employment
is terminated by the Company for "Just Cause" (as defined in the Executive's
Employment Agreement), the put option shall expire as of the date of his
termination.
(b) The put shall be exercised by the Executive by written
notice to the Company which sets forth the number of shares to be sold to the
Company.
(c) The purchase price to be paid by the Company for any
shares put to it pursuant to this paragraph shall be one hundred and five
percent (105%) of the per share price (or the equivalent thereof) paid in the
transaction causing the Change-in-Control. The aggregate purchase price (less
any legally required income tax or other withholding) shall be paid in one lump
sum payment to the Executive within fifteen (15) days of the date the Executive
delivers stock certificate(s) for the shares being put to the Company (if
required by the Company).
(d) This put option right shall apply to any shares of stock
which the Executive receives in exchange for his Company stock as the result of
the Change-in-Control. The per share price to be paid for any such stock put to
the Company shall be 105% of the per share value assigned such stock for
purposes of the transaction causing the Change-in-Control.
4. SEVERANCE COMPENSATION AND BENEFITS. If, after the occurrence of a
Change-in-Control, the Executive's employment is terminated by the Company
during the twenty-four (24) month period following the date on which the
Change-in-Control occurs for any reason other than "Just Cause" (as defined in
the Executive's Employment Agreement), the following shall occur:
(a) The Company shall pay to the Executive, within fifteen
(15) days of the date his employment is terminated by the Company, a single sum
cash payment equal to two and one-half (2-1/2) times the Executive's average
annual compensation (including base salary and bonuses) paid to him in cash
during the thirty-six (36) month period immediately preceding the date on which
the Change-in-Control occurred (or, in the event the Executive had not been
employed by the Company or received cash compensation for a period of at least
36 months at that time, the period that the Executive was employed or received
cash compensation, as applicable).
(b) The Executive, together with his dependents and
beneficiaries, shall continue to be fully eligible for (and participate in) all
company-sponsored accident and health, life insurance and other welfare benefit
programs available to the Executive as of the date on which the
Change-in-Control occurred (on the same terms and conditions in effect on that
date) or receive substantially equivalent coverage (or the full value thereof in
cash) from the Company, until the second anniversary of the Executive's
termination of employment.
5. CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY. Notwithstanding
anything in this Agreement to the contrary, if any of the payments or other
benefits provided for in this Agreement, either alone or together with any other
payments and benefits which the Executive has the right to receive from the
Company, would be nondeductible (in whole or part) by the Company for Federal
income tax purposes because of Section 280G of the Internal Revenue Code, the
payments and benefits to be made pursuant to this Agreement shall be reduced to
such
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<PAGE>
amount or level as will result in no portion of such payments or benefits being
nondeductible under Section 280G. This determination shall be made by the
Company's independent auditors, the cost of which shall be paid by the Company.
6. NONEXCLUSIVE RIGHTS. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit, bonus,
incentive, retirement or other plan or program provided by the Company and for
which the Executive may qualify, nor shall anything herein limit or reduce such
rights as the Executive may have under any other agreement with, or plan,
program, policy or practice of, the Company. Amounts which are vested benefits
or which the Executive is otherwise entitled to receive under any agreement
with, or plan, program, policy or practice of, the Company (including, without
limitation, the cashout of unused vacation days upon termination of employment)
shall be payable in accordance with such agreement, plan, program, policy or
practice.
7. SUCCESSORS.
(a) This Agreement shall be binding upon the Company and any successor
thereto (whether by merger, consolidation, assignment or otherwise).
(b) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees, and legatees. Any amounts due and
payable to the Executive under this Agreement on or after his death shall be
paid to his estate.
8. NOTICES. All notices hereunder shall be in writing, and shall be
deemed effectively given upon the earliest of (i) actual receipt, by whatever
means, (ii) personal delivery, (iii) delivery by an overnight courier service to
the applicable address specified below, or (iv) five days after sent by
certified or registered mail, return receipt requested, postage prepaid,
addressed to the parties at the applicable address specified below (or such
other address as may be designated in writing by either party to the other):
If to Company:
Iatros Health Network, Inc.
Attn: Chairman and Chief Executive Officer
11910 Greenville Avenue
Suite 300
Dallas, Texas 75243
If to Executive:
Albert Sousa
13355 Park Blvd
Seminole, Florida 33776
9. APPLICABLE LAW. The validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the state of
Delaware.
10. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
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<PAGE>
11. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instruments.
12. EFFECTIVE DATE. This Agreement shall become effective as of the
date first set forth above.
13. EMPLOYMENT. This Agreement does not constitute a contract of
employment or impose on the Company an obligation to retain the Executive as an
Executive, to continue his or her current employment status or to change any
employment policies of the Company.
14. AMENDMENTS. No amendment or other change to this Agreement shall be
binding unless in writing and signed by both parties.
15. NONTRANSFERABILITY OF RIGHTS. The rights of the Executive under
this Agreement are not subject to the claims of the Executive's creditors and
may not be voluntarily or involuntarily transferred, assigned, alienated,
accelerated or encumbered. Notwithstanding the preceding sentence, any payments
owing to the Executive under this Agreement may, as determined by the Chairman
and Chief Executive Officer of the Company (or his designee) in his sole
discretion, be offset by any liability of the Executive owing to the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
IATROS HEALTH NETWORK, INC.
By /s/ Michael H. Seeliger
-----------------------------------------
Title: Executive Vice President
-------------------------------------
ALBERT SOUSA
/s/ Albert Sousa
--------------------------------------------
<PAGE>
EMPLOYMENT AGREEMENT
BETWEEN
IATROS HEALTH NETWORK, INC.
AND
MICHAEL H. SEELIGER
THIS AGREEMENT made and entered into as of the 26th day of February,
1999, by and between Iatros Health Network, Inc. (the "Corporation"), a Delaware
corporation, and Michael H. Seeliger, a resident of Nevada (hereinafter referred
to as "Executive").
WHEREAS, the parties, for and in consideration of the mutual and
reciprocal covenants and agreements hereinafter contained, and intending to be
legally bound hereby, do contract and agree as follows:
1. PURPOSE AND EMPLOYMENT. The Corporation's primary business (the
"Corporation's Business") is owning, leasing, operating, and managing (i) senior
living and long-term care facilities (including, but not limited to, independent
living retirement facilities; congregate care facilities; assisted living
facilities; subacute, skilled, and intermediate care nursing facilities; and
long-term acute care hospitals), (ii) home health companies and agencies, (iii)
specialty outpatient medical facilities (including, but not limited to,
comprehensive outpatient rehabilitation facilities), and (iv) companies that
provide various ancillary healthcare services (including, but not limited to,
pharmacy, durable medical supplies and equipment, wound care, rehabilitation
therapies, IV therapies, respiratory therapies, and portable X-ray). The purpose
of this Agreement is to define the relationship between the Corporation and
Executive. The Corporation hereby employs Executive, and Executive hereby
accepts employment by the Corporation, all upon the terms and conditions
hereinafter set forth.
2. POSITION AND SCOPE OF DUTIES.
(a) Executive shall serve the Corporation as its Executive
Vice-President of Investor Relations. At all times, Executive shall report to,
discharge his duties in consultation with, and be under the direct supervision
and control of the Corporation's Chairman and Chief Executive Officer, shall
perform such duties, consistent with the Executive's employment as a senior
corporate executive, shall hold such other titles with respect to the
Corporation, or any of its divisions, subsidiaries, or affiliates, as the
Corporation's Board of Directors may from time to time determine, and shall
comply with all applicable provisions of the Corporation's certificate of
incorporation. Executive shall, subject to the direction of the Corporation's
Chairman and Chief Executive Officer, have authority to formulate policies for
and administer such aspects of the Corporation and its divisions, subsidiaries,
and affiliates as they relate to his position as Executive Vice-President of
Investor Relations. As to employees under his jurisdiction, including those
working directly under his supervision, Executive shall use his best efforts (i)
to employ and retain only employees who are capable and willing to perform
according to applicable legal requirements and applicable policies of the
Corporation and also (ii) to assure that such personnel are properly trained and
supervised. Subject to the direction of the Corporation's Chairman and Chief
Executive Officer, Executive may hire and terminate the employment of any other
employee of the Corporation, or of any of its divisions, subsidiaries or
affiliates, who is under his jurisdiction.
<PAGE>
(b) Executive shall devote his primary business time to the business
and affairs of the Corporation, excluding any periods of vacation, sick leave,
and disability to which Executive is entitled; and he shall fulfill his duties
to the Corporation to the best of his ability. However, it shall not be a
violation of this Agreement for the Executive to (i) serve on corporate, civic,
or charitable boards or committees, (ii) deliver lectures, fulfill speaking
engagements, or teach at educational institutions, and (iii) manage his personal
finances and passive investments, so long as none of such activities (singularly
or collectively) significantly interfere with the performance of the Executive's
responsibilities as an employee of the Corporation in accordance with this
Agreement.
(c) A description of the specific duties and responsibilities of the
Executive is contained in Exhibit A attached to this Agreement.
3. TERM. The term of this Agreement shall be for a period of three (3)
years commencing January 1, 1999 (the "Term") unless terminated earlier by
mutual agreement of the parties or by either party in accordance with Section 9
of this Agreement. Upon completion of the original three-year Term, the
Agreement shall automatically be renewed for a period of one (1) year as of each
succeeding January 1st (beginning January 1st, 2002); provided, that the
Corporation may terminate the Agreement as of any such renewal date by providing
ninety (90) days advance written notice to the Executive.
4. COMPENSATION DURING EMPLOYMENT. For all the services to be rendered
by Executive hereunder, the Corporation shall pay to Executive a base salary,
bonuses, and incentive compensation as follows:
(a) BASE SALARY. Executive shall be paid an annual base salary of Two
Hundred Thousand dollars ($200,000.00), payable in monthly installments. Payment
of such salary may be made in shares of Corporation stock (the "Shares"), cash,
or a combination thereof, as determined by the Chairman and Chief Executive
Officer, in his sole discretion, taking into account the Corporation's cash flow
requirements and any other aspect of the Corporation's financial condition
deemed relevant by the Chairman and Chief Executive Officer. The value of any
Shares of common stock paid to the Executive under this provision shall be based
on the per share price of the last trade of Shares as reported on NASDAQ or the
OTC bulletin board, as applicable, for the last trading day of the applicable
pay period (or if Shares were not traded on such date, for the closest preceding
date on which a trade occurred). The Chairman and Chief Executive Officer may
increase the Executive 's annual base salary effective as of any anniversary
date of this Agreement in such amounts as he deems appropriate in his sole
discretion.
(b) RESTRICTED STOCK GRANT. Upon the execution of this Agreement,
Executive shall receive a one time grant of Five Hundred Thousand (500,000)
shares of the Corporation's Common Stock. Except as otherwise provided in this
Agreement, in the event the Agreement is terminated on or before the one-year
anniversary of the date of the Agreement for any reason, the shares granted to
the Executive under this provision shall be forfeited; provided, that, in the
event the Executive is terminated by the Corporation without Just Cause (as
defined in Section 9) on or after July 1, 1999, the granted shares shall not be
forfeited.
(c) INITIAL STOCK OPTIONS. Upon execution of this Agreement, Executive
shall be granted an incentive stock options for a total of 300,000 shares of the
Corporation's Common Stock under the Corporation's stock option plan (the
"Initial Stock Options"). This grant is effective as of the date of this
Agreement (or the date of grant under the plan, if later). One third of such
Initial Stock Options shall become exercisable on each successive anniversary of
the date of the Agreement, provided that the Executive is employed by the
Corporation on each such anniversary date.
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<PAGE>
(d) EXECUTIVE'S INCENTIVE COMPENSATION. Executive may be entitled to
such bonuses and incentive compensation as may be determined by the Chairman and
Chief Executive Officer of the Corporation in his sole discretion. Each such
bonus or incentive compensation may be paid in cash or Shares as the Chairman
and Chief Executive Officer of the Corporation shall determine. Such incentive
compensation may also include options to purchase shares of the Corporation's
Common Stock pursuant to a plan established by the Corporation's Board.
5. STOCK GRANTS.
(a) If the Executive terminates employment with the Corporation for any
reason prior to date on which his right to any Shares granted to him under
Paragraph 4(b) of this Agreement becomes fully vested and nonforfeitable, the
nonvested Shares shall be forfeited on the date of his termination.
Notwithstanding the foregoing, if the Executive dies or becomes disabled while
employed by the Corporation, the Executive's rights to any Shares granted under
this Agreement shall automatically become fully vested on the date he dies or
becomes disabled. For purposes of this Paragraph, the Executive is "disabled" if
he is incapable of performing his principal duties for the duration of this
Agreement due to a physical or mental condition.
(b) Notwithstanding (a) above, upon the occurrence of a
Change-in-Control of the Corporation, the Shares granted to the Executive under
this Agreement shall become fully vested and nonforfeitable. For purposes of
this Agreement, "Change-in-Control" shall mean (i) the sale of substantially all
of the assets of the Corporation to another person or entity (other than an
subsidiary or other affiliate of the Corporation), (ii) the acquisition of
actual or beneficial ownership of more than fifty percent of the total combined
voting power of all classes of Corporation stock entitled to vote by a person or
group of persons acting in concert (other than a subsidiary or other affiliate
of the Corporation) who did not own more than fifty percent of such on the date
of this Agreement, (iii) or the merger of the Corporation into another entity
(other than a subsidiary or other affiliate of the Corporation), where the
Corporation's shareholders (determined as of the date of the merger) own
(directly or indirectly) less than fifty percent of the shares of the surviving
entity.
(c) Until any Shares awarded under this Agreement become fully vested
and nonforfeitable, such Shares shall be held by the Corporation in escrow. Upon
becoming vested, a Share certificate for the newly vested Shares shall be
delivered to the Executive as soon as administratively feasible after the date
of vesting. The Executive shall have all the rights of a shareholder with
respect to the Shares held in escrow, including the right to vote the shares and
to receive all dividends and other distributions paid with respect to the
shares. Any Shares held in escrow under this Agreement shall be held, and a
certificate shall be issued, in the name of the Executive. The Executive hereby
grants to the Corporation an irrevocable power of attorney to sign any and all
documents and to take such other actions as may be necessary to transfer
ownership to the Corporation of any forfeited Shares.
(d) Any Shares held in escrow by the Corporation for the Executive
under this Agreement are not subject to the claims of the Executive's creditors
and may not be voluntarily or involuntarily transferred, assigned, alienated,
accelerated or encumbered. Notwithstanding the preceding sentence, any Shares
deliverable to the Executive under this Agreement may, as determined by the
Chairman and Chief Executive Officer in his sole discretion, be offset by any
liability of the Executive owing to the Corporation.
(e) The Executive may make a Section 83(b) election to treat the
restricted stock granted to him under Paragraph 4(b) as taxable income at the
time of transfer under this Agreement. A section 83(b) election form (with
accompanying instructions) which may be used for this purpose is attached to
this Agreement as Exhibit B.
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<PAGE>
6. OTHER BENEFITS. In addition to other benefits conferred under this
Agreement, Executive shall have the right to participate in (on the same terms
and conditions as available to other senior executives of the Corporation) all
pension plans, retirement plans, deferred compensation plans, executive
compensation plans, major medical, group health, disability, accidental death
and group term life insurance plans, "fringe" benefit plans (including
permissible sick days or leave days), and other employee benefit plans that the
Corporation shall, from time to time, generally confer upon other senior
executives of the Corporation.
7. VACATION, HOLIDAYS, ETC. Executive shall be entitled to five (5)
weeks vacation with pay (or such greater length of time as may be approved from
time to time by the Corporation's Board of Directors) during each fiscal year of
the Corporation, such vacation to be taken by Executive at such times as shall
be consistent with the business requirements of the Corporation. In addition,
Executive shall also be entitled to such holidays as are customary in the
Corporation. Unused holidays and days of vacation may not be carried over form
one fiscal year to another, and additional income will not be given for vacation
time or holidays not taken.
8. EXPENSES. Executive is expected from time to time, to incur
reasonable expenses as he reasonably deems to be for the Corporation's benefit
and for promoting the business of the Corporation, including expenses for
entertainment, travel, and similar items. Executive shall be promptly reimbursed
for all such reasonable expenses (in accordance with the policies and procedures
regarding employee business-related expense from time to time established by the
Corporation for its senior executive officers) upon his presenting to the
Corporation a detailed itemized expense voucher therefor in accordance with
applicable corporate policies. Executive may also draw funds from the
Corporation, but only to the extent necessary and appropriate, for reasonable
expenses to be incurred on behalf of the Corporation and then only in accordance
with applicable corporate policies. Detailed records of the expenditure of such
funds shall be tendered by Executive for expenses incurred on behalf of the
Corporation in accordance with applicable corporate policies, and if any portion
of such funds are unexpended or unaccountable, then Executive shall promptly
return such unexpended or unaccountable sums to the Corporation.
9. TERMINATION OF EMPLOYMENT.
(a) TERMINATION FOR CAUSE. Notwithstanding the provisions of Section 3
hereof, the Corporation shall have the right to terminate this Agreement
immediately upon giving written notice to the Executive (or Executive's personal
or legal representatives, if appropriate), for any of the following reasons:
(1) Death of the Executive;
(2) Inability of the Executive, by reason of his physical or
mental condition ("Disability"), to perform his duties hereunder for the
remainder of the term of this Agreement.
(3) Just Cause, which is defined herein to mean: (a)
Executive's gross negligence in performing his duties hereunder; (b) Executive's
willful failure or refusal to perform his duties hereunder; (c) Executive's
intentional wrongful act or wrongful failure to act that materially and
adversely affects the business affairs of the Corporation; or (d) Executive's
commission of any act of fraud, commission of any felony, material breach of any
provision of this Agreement, involvement in any material conflict of interest or
self dealing transaction in violation of the applicable corporate laws of the
State of Delaware, or other breach of any of his quasi-fiduciary duties to the
Corporation in violation of the applicable corporate laws of the State of
Delaware (including, but not limited to, the duties of due care, loyalty, and
fair dealing).
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<PAGE>
(b) TERMINATION BENEFITS. If this Agreement expires, or if during the
Term the Corporation terminates this Agreement and Executive's employment
hereunder as a result of any of the following, Executive will be entitled to the
following termination compensation or severance benefits:
(1) DEATH. If during the Term, Executive's employment is
terminated by reason of death, the Corporation shall
thereafter have no liability to Executive's estate hereunder,
except to timely pay and provide his estate the following: (i)
the portion, if any, of Executive's Base Salary for the period
up to the date of death that remains unpaid; (ii) any bonuses
and incentive compensation for any preceding year or for the
current year that have been earned (pro-rated to the date of
death), but have not been paid as of the date of death; and
(iii) all other payments and benefits that Executive is
eligible to receive, but have not yet been received as of the
date of death, under all benefit plans, retirement plans, and
other arrangements that, by their terms, apply.
(2) DISABILITY. If during the Term, Executive's employment is
terminated due to Executive's Disability as defined in
paragraph 9 (a)(2) above, the Corporation shall, after such
effective date of termination, have no liability to Executive
hereunder, except to timely pay and provide the Executive the
following: (i) the portion, if any, of Executive's Base Salary
for the period up to the effective date of termination that
remains unpaid; (ii) any bonuses and incentive compensation
for any preceding year or for the current year (pro-rated to
the effective date of termination) that have been earned, but
have not been paid as of the effective date of termination;
and (iii) all other payments and benefits that Executive is
eligible to receive, but have not yet been received as of the
effective date of termination, under all benefit plans,
retirement plans, and other arrangements that, by their terms,
apply.
(3) JUST CAUSE. If during the Term, Executive's employment is
terminated for Just Cause as specified in Section 9(a)(3)
above, the Corporation shall, after such effective date of
expiration or termination, have no liability to Executive
hereunder, except to timely pay and provide the Executive the
following: (i) any bonuses and incentive compensation for any
preceding year or for the current year (pro-rated to the
effective date of termination; and (ii) all other payments and
benefits that Executive is eligible to receive, but have not
yet been received as of the effective date of termination,
under all benefit plans, retirement plans, and other
arrangements that, by their terms, apply. To the extent that
any insurance coverages maintained by the Corporation for the
benefit of Executive have conversion privileges into
individual policies, the Executive, upon his termination of
employment or within any applicable grace periods thereafter,
may (at his sole cost) so convert such coverages, as well as
exercise (at his sole cost) all rights of continuation
prescribed by applicable law.
(4) WITHOUT CAUSE. If during the Term, Executive's employment
is terminated without the Executive's written consent and
without Cause for any reason whatsoever other than disability
or death, the Corporation shall, after such effective date or
expiration or termination, have no liability to Executive
hereunder, except to timely pay and provide the Executive the
following: (i) the same Base Salary, bonuses and incentive
compensation, benefits, and other compensation that the
Executive would otherwise be entitled to receive hereunder
through the remaining unexpired Term hereof as though no
termination or expiration had occurred; (ii) any bonuses and
incentive compensation for any preceding year or for the
current year that have been earned, but have not been
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<PAGE>
paid as of the effective date of termination; (iii) all
other payment and benefits that Executive is eligible to
receive, but have not yet been received as of the effective
date of termination. To the extent that any insurance
coverages maintained by the Corporation for the benefit of
Executive have conversion privileges into individual
policies, the Executive, upon his termination of employment
or within any applicable grace periods thereafter, may (at
his sole cost) so convert such coverages, as well as
exercise (at his sole cost) all rights of continuation
prescribed by applicable law.
(5) TERMINATION BY EXECUTIVE. In the event that Executive
terminates this Agreement for any reason, the Corporation
shall, after such effective date of termination, have no
liability to Executive hereunder, except as specified in
Section 9(b)(3) hereof, as if the Corporation had terminated
the Executive for Cause.
10. RESTRICTIVE COVENANTS OF EXECUTIVE.
(a) DEFINITIONS. For the purposes of this Agreement:
(1) "CONFIDENTIAL INFORMATION" shall mean any information
relating to the Corporation or to the business of the Corporation (or to any of
its parents, subsidiaries or affiliates) (whether proprietary or otherwise) not
generally known to the public or known by Executive otherwise than as a
consequence of or through his employment with the Corporation and treated by the
Corporation as being confidential, including, but not limited to, research,
marketing, customer lists, financing sources, methods, techniques and systems,
all of which shall be deemed by the Corporation and Executive as being
Confidential Information.
(2) "PERSON" shall mean an individual, a partnership, an
association, a corporation, a trust, an unincorporated organization, or any
other business entity or enterprise, provided, however, that the term "Person"
shall not include the Corporation.
(b) ACKNOWLEDGEMENTS. Executive agrees and acknowledges that: (i) he
will be in a position of confidence and trust with the Corporation and he will
have access to Confidential Information; (ii) the nature and periods of
restrictions imposed by the covenants set forth in this Section are fair,
reasonable and necessary to protect and preserve for the Corporation the
benefits of this Agreement and that such restrictions will not prevent Executive
from earning a livelihood; (iii) the Corporation would sustain irreparable loss
and damage if Executive were to breach any of such covenants; and (iv) the
covenants herein set forth are made as an inducement to and have been relied
upon by the Corporation in entering this Agreement.
(c) CONFIDENTIAL INFORMATION. Executive hereby covenants and agrees
that Executive shall not, directly or indirectly, during the Term of this
Agreement and for three (3) years after Executive's employment is terminated for
whatever reason, disclose to any Person or use or otherwise exploit for
Executive's own benefit or for the benefit of any other Person any Confidential
Information that was disclosed to Executive or acquired by Executive while an
employee of the Corporation. Upon the termination or expiration of this
Agreement, Executive shall return to the Corporation all material in Executive's
possession or control which is of a confidential matter relating to the
Corporation's business. These provision shall survive the termination or
expiration of this Agreement.
(d) NON-COMPETITION.
(1) Except as provided in section (2) below, Executive hereby covenants
and agrees that Executive shall not, other than pursuant to this Agreement,
directly or indirectly, either for
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<PAGE>
Executive's own benefit or as an officer, director, shareholder, partner,
proprietor, employee, agent, consultant, or independent contractor of any other
Person, during the Term and for one (1) year after Executive's employment by the
Corporation is terminated for whatever reason, (i) solicit any contract or other
arrangement for the management, submanagement or participation in the management
of any healthcare or other long-term care facility owned, leased, or managed by
the Corporation or any affiliate or subsidiary of the Corporation or to which
the Corporation or any affiliate or subsidiary of the Corporation provides any
ancillary services as of the date in question ("Iatros Facility") or (ii)
solicit any contract or other arrangement for the providing of any ancillary
services to any Iatros Facility. However, nothing in this Section 10(d) shall be
deemed to prevent Executive from passively investing in or acquiring up to one
percent (1%) of any class of securities of any Person who is engaged in
substantially the same business as the Corporation at a location that is within
fifteen (15) miles or less of any Iatros Facility, if such class of securities
is listed on a national securities exchange or is quoted on NASDAQ; provided,
however, that Executive shall not serve as an officer, director, partner,
proprietor, employee, or agent of any Person (other than any Person for whom the
Executive is serving as such on the date of this Agreement) who is engaged in
substantially the same business as the Corporation at a location that is within
fifteen (15) miles or less of any Iatros Facility, except with the prior written
approval of the Corporation's Board of Directors.
(e) CONSENT TO COURT-ORDERED REMEDY. Executive acknowledges that his
breach of any covenant set forth in this Section 10 will result in irreparable
injury to the Corporation and that the Corporation's remedies at law for such a
breach are inadequate and extremely difficult to calculate or determine.
Accordingly, Executive agrees and consents that upon such a breach or threatened
breach by Executive of any covenant set forth herein, the Corporation shall be
entitled to such remedies in law or equity as may be determined by the court for
such a breach or threatened breach.
(f) REMEDIES CUMULATIVE AND CONCURRENT. The rights and remedies of the
Corporation, as provided in this Section 10 shall be cumulative and concurrent
and may be pursued separately, successively or together against Executive at the
sole discretion of the Corporation, and may be exercised as often as occasion
therefor shall arise. The failure to exercise any right or remedy shall in no
event be construed as a waiver or release thereof.
11. INDEMNITY. To the fullest extent permitted by law, the Corporation
shall indemnify Executive and hold him harmless for any acts or decisions made
by him in good faith while performing services for the Corporation. In addition,
to the fullest extent permitted by law, the Corporation shall pay all expenses,
including attorney's fees, actually and necessarily incurred by Executive in
connection with the defense of any action, suit or proceeding challenging such
acts of decisions and in connection with any appeal thereon including the costs
of settlement. This indemnification obligation shall survive the termination of
the Executive's employment hereunder.
12. WAIVER OF BREACH OF VIOLATION NOT DEEMED CONTINUING. The waiver by
either party of a breach or violation of any provision of this Agreement shall
not operate as or be construed to be a waiver of any subsequent breach hereof.
13. NOTICES. Any and all notices required or permitted to be given
under this Agreement will be sufficient if furnished in writing, personally
delivered or sent by certified mail, return receipt requested as follows:
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<PAGE>
To Executive:
Michael H. Seeliger
335 East Harmon, #102
Las Vegas, Nevada 89109
To the Corporation:
Iatros Health Network, Inc.
Attn: Ronald E. Lusk, Chairman & CEO
11910 Greenville Avenue
Suite 300
Dallas, Texas 75243
14. SECURITIES LAW COMPLIANCE. The Executive represents and agrees that
he is acquiring any Shares he receives under this Agreement for his own account
and not with the intention reselling or distributing the Shares, except as
permitted under this Agreement and any applicable federal and state securities
laws. The Corporation shall have the right to take any actions it may deem
necessary or appropriate to ensure that the Shares granted to the Executive
complies with applicable federal and state securities laws.
15. TAX LIABILITY. The Corporation may withhold from any payment made
pursuant to this Agreement any federal, state or local taxes required to be
withheld from such payment. The Executive shall make such arrangements as may be
required or be satisfactory to the Corporation (in its sole discretion) for the
payment of any tax withholding obligations that arise in connection with the
granting of Shares under this Agreement. The Corporation shall not be required
to issue any Shares under this Agreement until such obligations are satisfied.
16. GOVERNING LAW. This Agreement shall be interpreted, construed and
governed according to the laws of the State of Texas. The parties hereto consent
to jurisdiction and venue in the Texas state courts in Dallas, Texas and United
States District Court for the Northern District of Texas, Dallas Division.
17. PARAGRAPH HEADINGS. The paragraph headings contained in this
Agreement are for convenience only and shall in no manner be construed as a part
of this Agreement.
18. ENTIRE AGREEMENT. This Agreement supersedes all prior discussions
and agreements between the Corporation, or any of its officers, directors,
employees, or agents, and Executive with respect to all mattes relating to the
employment by the Corporation of Executive and all other matters contained
herein, and this Agreement constitutes the sole and entire agreement with
respect thereto. Any representation, inducement, promise or agreement, whether
oral or written, between the Corporation, or any of its officers, directors,
employees, or agents, and Executive which is not embodied herein shall be of no
force or effect.
19. SUCCESSORS AND ASSIGNORS. This Agreement shall be binding upon, and
shall inure to the benefit of, the Corporation and Executive and their
respective heirs, personal and legal representatives, successors, and assigns.
20. SEVERABILITY. If any term, covenant or condition of this Agreement
or the application thereof to any person or circumstance shall, to any extent,
be invalid or unenforceable the remainder of this Agreement or the application
of such terms, covenants and conditions to persons or circumstances other than
those as to which it is held invalid or unenforceable shall be
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<PAGE>
affected thereby and each term, covenant or condition of this Agreement shall be
valid and be enforced to the fullest extent permitted by law.
IN WITNESS WHEREOF, the Corporation has hereunder to caused this
Agreement to be executed by its duly authorized offices and seals to be hereunto
affixed, and Executive has hereunto set his hand and seal, all being done in
duplicate originals delivered to each party as of the day and year first above
written.
/s/ /s/ Michael H. Seeliger
- ----------------------------------- ---------------------------
Witness Michael H. Seeliger
ATTEST: IATROS HEALTH NETWORK, INC.
/s/ Albert Sousa By: /s/ Ronald E. Lusk
- ----------------------------------- ---------------------------
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<PAGE>
EXHIBIT A
DESCRIPTION OF SPECIFIC DUTIES AND RESPONSIBILITIES
EXECUTIVE VICE PRESIDENT
POSITION AND SCOPE OF DUTIES.
(a) Executive shall serve the Corporation as Executive Vice President.
At all times, Executive shall report to, discharge his duties in consultation
with, and be under the direct supervision and control of Chairman/Chief
Executive Officer. Executive shall perform such duties, consistent with the
Executive's employment as senior corporate executive, shall hold such other
titles with respect to the Corporation, or any of its divisions, subsidiaries,
or affiliates, as the Corporation's certificate of incorporation, bylaws, and
other governing documents. As the Executive Vice President will have the
responsibility for strategically managing and overseeing the investor relations
function on a highly pro-active basis on behalf of the Company. The executive
will be responsible for defining the tone and strategy in the area of investor
relations as it relates to key image and corporate identity issues. Executive
shall, subject to the direction of the Chief Executive Officer and Chairman of
the Board. As to employees under his jurisdiction, including those working
directly under his supervision, Executive shall use his best efforts (i) to
employ and retain only employees who are capable and willing to perform
according to applicable legal requirements and applicable policies of the
Corporation and also (ii) to assure that such personnel are properly trained and
supervised. Subject to the direction of the Chief Executive Officer and Chairman
of the Board of Iatros Health Network, Inc., Executive may hire and terminate
the employment of any other employee of the Corporation, or of any of its
divisions, subsidiaries or affiliates, who is under his jurisdiction.
<PAGE>
EXHIBIT B
ELECTION TO INCLUDE VALUE OF RESTRICTED PROPERTY
IN GROSS INCOME IN YEAR OF TRANSFER UNDER SECTION 83(b)
Pursuant to Section 83(b) of the Internal Revenue Code of 1986, as
amended, I hereby elect to include in my gross income at the time of transfer
the amount includible under Section 83(b) with respect to the restricted
property described below, in accordance with applicable regulations:
1. THE NAME, ADDRESS AND TAXPAYER IDENTIFICATION NUMBER OF THE UNDERSIGNED
ARE:
Name: Michael H. Seeliger
Address: -----------------------------------
-----------------------------------
-----------------------------------
Taxpayer identification number:
-----------------------------------
2. DESCRIPTION OF PROPERTY WITH RESPECT TO WHICH THE ELECTION IS BEING
MADE:
Five hundred thousand (500,000) shares of Common Stock, $.001 par
value, of Iatros Health Network, Inc.
3. DATE ON WHICH THE PROPERTY WAS TRANSFERRED AND TAXABLE YEAR FOR WHICH THE
ELECTION IS MADE:
Date of transfer: ___________
Taxable year for which election made: Calendar year 1999
4. THE NATURE OF THE RESTRICTION(S) TO WHICH THE PROPERTY IS SUBJECT:
Forfeiture in the event that the Employment Agreement between the
undersigned and Iatros Health Network, Inc. is terminated on or before the
one-year anniversary of the date of such Agreement for any reason while the
undersigned is employed by the corporation (other than termination by reason of
death or becoming totally and permanently disabled, or in the event of a
"Change-in-Control" as defined in such Agreement).
5. FAIR MARKET VALUE AT TIME OF TRANSFER:
The fair market value at the time of transfer (determined without
regard to any restrictions other than restrictions which by their terms will
never lapse) of the property with respect to which this election is being made
is ____ per share, for an aggregate fair market value of $________.
<PAGE>
6. AMOUNT PAID FOR THE PROPERTY:
No amount has been paid by the undersigned for said property.
7. FURNISHING STATEMENT TO EMPLOYER:
A copy of this statement has been furnished to Iatros Health Network,
Inc.
Dated:
---------------
Signature:
--------------------------------
Name:
--------------------------------
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<PAGE>
INSTRUCTIONS FOR SECTION 83(B) ELECTION FORM:
1. Review and complete all items on this form, including:
- Address and taxpayer identification number (i.e., Social
Security number) (Item 1)
- Date of transfer (Item 3)
- Fair market value per share and in the aggregate (Item 5)
- Signature and date (bottom)
2. Provide a copy of this form within 30 days of the date of transfer to:
- Iatros Health Network, Inc.
- Director, Internal Revenue Service Center, of the Service
Center where you expect to file your income tax return
3. Attach a copy of this form to your 1999 Federal income tax return
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<PAGE>
IATROS HEALTH NETWORK, INC.
CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT made and entered into as of the 26th day of February,
1999, by and between Iatros Health Network, Inc., a Delaware corporation (the
"Company") and Michael H. Seeliger, an Executive Vice President of the Company
(the "Executive"), and.
WHEREAS, the Company has entered into an employment agreement with
Executive, effective as of January 1, 1999 (the "Employment Agreement"); and
WHEREAS, the Board of Directors of the Company believes it is in the
best interests of the Company and its shareholders to enter into this Agreement
with Executive to ensure the continuity of management of the Company and
reinforce and encourage the continued attention and dedication of the Executive
to his assigned duties without distraction in the face of potentially disruptive
circumstances arising from the possibility of a change-in-control of the
Company; and
WHEREAS, the Board of Directors of the Company has approved and
authorized the execution of this Agreement with the Executive to take effect as
stated in Section 1 hereof.
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is agreed as
follows:
1. TERM OF AGREEMENT. This Agreement shall commence on the date
set out above and shall continue in effect during the term of the Executive's
Employment Agreement (or any extension, modification or renewal thereof) and
shall remain in effect for a period of twenty-four (24) months after the date a
Change-In-Control occurs.
2. CHANGE-IN-CONTROL.
(a) The Executive shall have no rights under this Agreement
until there shall have been a Change-in-Control, as defined in (b) below.
(b) For purposes of this Agreement, a "Change-in-Control"
shall mean: (i) the sale of substantially all of the assets of the Corporation
to another person or entity (other than a subsidiary or other affiliate of the
Corporation), (ii) the acquisition of actual or beneficial ownership of more
than fifty percent of the total combined voting power of all classes of
Corporation stock entitled to vote by a person or group of persons acting in
concert (other than a subsidiary or other affiliate of the Corporation) who did
not own more than fifty percent of such on the date of this Agreement, or (iii)
the merger of the Corporation into another entity (other than a subsidiary or
other affiliate of the Corporation), where the Corporation's shareholders
(determined as of the date of merger) own (directly or indirectly) less than
fifty percent of the shares of the surviving entity.
3. PUT OPTION RIGHTS UPON A CHANGE-IN-CONTROL. Following a
Change-in-Control, the Executive shall have the right to sell to the Company
(the "put option") all or any portion of the shares of Company stock granted to
him under his Employment Agreement or obtained through the exercise of
Company-granted stock options which he owned (or to which he was entitled under
an outstanding stock option or other agreement) as of the date of the
Change-in-
<PAGE>
Control. The Company shall buy any shares put to it under this Paragraph upon
the following terms and conditions:
(a) The put option shall be exercisable in whole or in part by
for a period of one (1) year following the date on which the Change-in-Control
occurs. Notwithstanding the preceding sentence, in the event the Executive
terminates employment with the Company before expiration of the one-year
exercise period, the put option shall expire no later than thirty (30) days
after the Executive's termination; provided, that if the Executive's employment
is terminated by the Company for "Just Cause" (as defined in the Executive's
Employment Agreement), the put option shall expire as of the date of his
termination.
(b) The put shall be exercised by the Executive by written
notice to the Company which sets forth the number of shares to be sold to the
Company.
(c) The purchase price to be paid by the Company for any
shares put to it pursuant to this paragraph shall be one hundred and five
percent (105%) of the per share price (or the equivalent thereof) paid in the
transaction causing the Change-in-Control. The aggregate purchase price (less
any legally required income tax or other withholding) shall be paid in one lump
sum payment to the Executive within fifteen (15) days of the date the Executive
delivers stock certificate(s) for the shares being put to the Company (if
required by the Company).
(d) This put option right shall apply to any shares of stock
which the Executive receives in exchange for his Company stock as the result of
the Change-in-Control. The per share price to be paid for any such stock put to
the Company shall be 105% of the per share value assigned such stock for
purposes of the transaction causing the Change-in-Control.
4. SEVERANCE COMPENSATION AND BENEFITS. If, after the occurrence
of a Change-in-Control, the Executive's employment is terminated by the Company
during the twenty-four (24) month period following the date on which the
Change-in-Control occurs for any reason other than "Just Cause" (as defined in
the Executive's Employment Agreement), the following shall occur:
(a) The Company shall pay to the Executive, within fifteen
(15) days of the date his employment is terminated by the Company, a single sum
cash payment equal to two and one-half (2-1/2) times the Executive's average
annual compensation (including base salary and bonuses) paid to him in cash
during the thirty-six (36) month period immediately preceding the date on which
the Change-in-Control occurred (or, in the event the Executive had not been
employed by the Company or received cash compensation for a period of at least
36 months at that time, the period that the Executive was employed or received
cash compensation, as applicable).
(b) The Executive, together with his dependents and
beneficiaries, shall continue to be fully eligible for (and participate in) all
company-sponsored accident and health, life insurance and other welfare benefit
programs available to the Executive as of the date on which the
Change-in-Control occurred (on the same terms and conditions in effect on that
date) or receive substantially equivalent coverage (or the full value thereof in
cash) from the Company, until the second anniversary of the Executive's
termination of employment.
5. CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY. Notwithstanding
anything in this Agreement to the contrary, if any of the payments or other
benefits provided for in this Agreement, either alone or together with any other
payments and benefits which the Executive has the right to receive from the
Company, would be nondeductible (in whole or part) by the Company for Federal
income tax purposes because of Section 280G of the Internal Revenue Code, the
payments and benefits to be made pursuant to this Agreement shall be reduced to
such
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<PAGE>
amount or level as will result in no portion of such payments or benefits being
nondeductible under Section 280G. This determination shall be made by the
Company's independent auditors, the cost of which shall be paid by the Company.
6. NONEXCLUSIVE RIGHTS. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive, retirement or other plan or program provided by the Company
and for which the Executive may qualify, nor shall anything herein limit or
reduce such rights as the Executive may have under any other agreement with, or
plan, program, policy or practice of, the Company. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any
agreement with, or plan, program, policy or practice of, the Company (including,
without limitation, the cashout of unused vacation days upon termination of
employment) shall be payable in accordance with such agreement, plan, program,
policy or practice.
7. SUCCESSORS.
(a) This Agreement shall be binding upon the Company and any successor
thereto (whether by merger, consolidation, assignment or otherwise).
(b) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees, and legatees. Any amounts due and
payable to the Executive under this Agreement on or after his death shall be
paid to his estate.
8. NOTICES. All notices hereunder shall be in writing, and shall
be deemed effectively given upon the earliest of (i) actual receipt, by whatever
means, (ii) personal delivery, (iii) delivery by an overnight courier service to
the applicable address specified below, or (iv) five days after sent by
certified or registered mail, return receipt requested, postage prepaid,
addressed to the parties at the applicable address specified below (or such
other address as may be designated in writing by either party to the other):
If to Company:
Iatros Health Network, Inc.
Attn: Chairman and Chief Executive Officer
11910 Greenville Avenue
Suite 300
Dallas, Texas 75243
If to Executive:
Michael H. Seeliger
335 East Harmon, #102
Las Vegas, Nevada 89109
9. APPLICABLE LAW. The validity, interpretation, construction,
and performance of this Agreement shall be governed by the laws of the state of
Delaware.
10. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
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<PAGE>
11. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instruments.
12. EFFECTIVE DATE. This Agreement shall become effective as of
the date first set forth above.
13. EMPLOYMENT. This Agreement does not constitute a contract of
employment or impose on the Company an obligation to retain the Executive as an
Executive, to continue his or her current employment status or to change any
employment policies of the Company.
14. AMENDMENTS. No amendment or other change to this Agreement
shall be binding unless in writing and signed by both parties.
15. NONTRANSFERABILITY OF RIGHTS. The rights of the Executive
under this Agreement are not subject to the claims of the Executive's creditors
and may not be voluntarily or involuntarily transferred, assigned, alienated,
accelerated or encumbered. Notwithstanding the preceding sentence, any payments
owing to the Executive under this Agreement may, as determined by the Chairman
and Chief Executive Officer of the Company (or his designee) in his sole
discretion, be offset by any liability of the Executive owing to the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
IATROS HEALTH NETWORK, INC.
By /s/ Albert Sousa
----------------------------------
Title: Executive Vice President
----------------------------------
MICHAEL H. SEELIGER
/s/ Michael H. Seeliger
------------------------------------
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<PAGE>
Exhibit 5.1
REED SMITH SHAW & MCCLAY LLP
1301 K Street, N.W.
Suite 1100 - East Tower
Washington, D.C. 20005-3317
Phone: 202-414-9200
Fax: 202-414-9299
April 30, 1999
Phoenix Healthcare Corporation
4514 Travis Street, Suite 330
Dallas, Texas 75205
Re: Registration Statement on Form S-8 for Stock to be
Issued Under the Phoenix Healthcare Corporation 1999
Stock Option Plan, Stock Purchase Plan and Share
Award Plan, and Pursuant to Certain Employment
Agreements (the "Plans")
Gentlemen:
We have acted as counsel to Phoenix Healthcare Corporation
(the "Company") in connection with the above-captioned Registration Statement
relating to 14,400,000 shares of the Common Stock, par value $.001, of the
Company (the "Shares") which may be offered or sold to certain employees,
directors and consultants of the Company and its affiliates under the Plans. The
Plans provide that either unissued or reacquired Shares, or any combination
thereof, may be awarded under the Plans. In rendering our opinion below, we have
assumed that any previously issued Shares reacquired by the Company and used
under the Plans were duly authorized, validly issued and fully paid at the time
of their original issuance.
In connection with this opinion, we have examined such records
of the Company and other documents as we have determined relevant and necessary
as the basis for the opinion set forth below. In such examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such copies.
Based upon the foregoing and upon an examination of such other
documents, corporate proceedings, statutes, decisions and questions of law as we
considered necessary in order to enable us to furnish this opinion, and subject
to the assumption set forth above, we are pleased to advise you that in our
opinion:
(a) The Company has been duly formed and is a validly existing
corporation under the laws of the State of Delaware; and
(b) The Shares being registered and which may be offered or
sold by the Company pursuant to the provisions of the Plans have been duly
authorized, and upon such sale in accordance with the provisions of the Plans
such Shares will be validly issued, fully paid and nonassessable.
<PAGE>
REED SMITH SHAW & MCCLAY LLP
Phoenix Healthcare Corporation
April 30, 1999
Page 2
We hereby consent to the filing of this opinion as an Exhibit
to the Registration Statement and to the use of our name in the Prospectus under
the caption "Legal Opinion".
Very truly yours,
Reed Smith Shaw & McClay LLP
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration Statement of
Phoenix Healthcare Corporation (formerly Iatros Health Network, Inc.) on Form
S-8 of our report dated March 30, 1999, appearing in the Annual Report on Form
10-K of Phoenix Healthcare Corporation as of and for the year ended December 31,
1998.
/s/ Weaver and Tidwell, L.L.P.
- ------------------------------
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
April 30, 1999
<PAGE>
Exhibit 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference of our report dated April 23, 1998 relating to the
consolidated financial statements of Iatros Health Network, Inc. and
Subsidiaries and to all references to our Firm included in or made a part of
this Registration Statement of Phoenix Healthcare Corporation (formerly
Iatros Health Network, Inc.) under The Securities Act of 1933 on Form S-8.
/s/ ASHER & COMPANY, LTD.
-------------------------
ASHER & COMPANY, Ltd.
Philadelphia, Pennsylvania
May 4, 1999
