Exhibit 10.34
COLOMBO EMPLOYMENT AND NON-COMPETE AGREEMENT
The parties to this Employment Agreement (this "Agreement"), dated as of
April, 2004, are PHC, Inc., a Massachusetts corporation ("PHC,") and its
subsidiary Pivotal Research Centers, LLC, an Arizona limited liability company
("Pivotal," together with PHC, the "Company"), and Michael Colombo (the
"Executive").
RECITALS:
A. PHC is a Massachusetts corporation engaged in the business of
providing behavioral health services and Clinical Research Services.
B. PHC currently conducts Clinical Research Services through operating
divisions and subsidiaries (including but not limited to Pioneer
Pharmaceutical Research, Inc. ("PPR"), a wholly owned subsidiary of
PHC) at facilities located in Michigan, Nevada and Utah.
C. Pivotal is a nationally recognized provider of Clinical Research
Services to Pharmaceutical Companies with clinical research facilities
located in Peoria, Arizona and Mesa, Arizona.
D. Executive has served as an executive officer of Pivotal prior to its
acquisition by PHC on the date of this Agreement.
E. Company desires to have Executive serve as the Chief Executive Officer
of Pivotal, and lead all of PHC's Clinical Research Services
(including but not limited to the activities conducted by Pivotal and
PPR), with Executive reporting directly to the CEO of PHC, and
Executive desires to provide such services to Company, subject to the
terms and conditions set forth below.
AGREEMENT
Now, therefore, with reference to the foregoing recitals, all of which are
incorporated herein by this reference and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. Employment, Term and Duties.
1.1 Employment. Pivotal hereby agrees to employ Executive as the
Chief Executive Officer of Pivotal. PHC hereby agrees to employ
Executive as the Chief Executive Officer of PHC divisions,
subsidiaries or affiliates engaged in the Clinical Research
Services business. During the Term, Executive shall have direct
management responsibility and authority over all PHC staff
conducting Clinical Research Services across all PHC divisions,
subsidiaries or affiliates (including, but not limited to, PPR
and Pivotal). For purposes hereof, the "Business" means the
business of providing Clinical Research Services to
Pharmaceutical Companies. The parties understand and acknowledge
that PHC's current corporate structure as it relates to Clinical
Research Services, including the structure that will exist
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immediately Post-Closing, may need to be modified over time to
improve the operational efficiency of the Business, and all
parties understand and agree that such restructuring shall in all
cases be consistent with Executive's role as the CEO of the
Business with direct management responsibility and authority over
all PHC staff conducting Clinical Research Services across all
PHC divisions, subsidiaries or affiliates.
1.2 Term. The term of Executive's employment under this Agreement
shall commence on the date of this Agreement and shall continue
through December 31, 2006, unless sooner terminated pursuant to
Section 4 hereof (the "Initial Term"). Thereafter, this Agreement
shall automatically and without further action be renewed for
successive one-year periods (each, a "Renewal Term") on the same
terms and conditions unless sooner terminated pursuant to Section
4 hereof or by either party not less than 60 days prior to the
expiration of the Initial Term or any Renewal Term. As used
herein, "Term" shall mean the Initial Term and any Renewal Term.
1.3 Duties. During the Term, Executive shall report directly to the
CEO of PHC and perform the duties set forth in attached Exhibit
A; provided, however, that Executive shall, at the direction of
the CEO of PHC, perform other services and allot a portion of his
time to such other responsibilities as may be required from time
to time, related to Clinical Research Services as may be assigned
from time to time by the CEO of PHC.
1.4 Best Efforts. Executive shall devote his best efforts in
promoting the Company's interests, and performing his duties and
responsibilities. Executive shall devote his full working time to
the business and affairs of the Company. Executive's services
under this Agreement shall be performed primarily at Pivotal's
offices located at the Peoria Location and the Mesa Location or
at such other primary office as determined mutually by the CEO of
PHC and Executive, subject to reasonable travel requirements on
behalf of the Company.
1.5 Defined Terms. Any capitalized terms not defined herein shall
have the meaning set forth in that certain Membership Interest
Purchase Agreement (the "Purchase Agreement") between PHC,
Pivotal, Louis C. Kirby and Carol Colombo, and Anthony Bonacci of
even date herewith.
2. Compensation.
2.1 Base Salary. During the Term, as compensation for the services
rendered by Executive to the Company, Pivotal and PHC shall pay
to Executive a single base salary at an annual rate of not less
than $150,000 (the "Base Salary"). The Base Salary shall be
payable in accordance with Pivotal's regular payroll practices
(but no less frequently than monthly) less federal and state
income tax withholding, other deductions required by law and
other normal deductions. The Base Salary shall be subject to
adjustment from time to time (but to no less than $150,000) by
the Board of Directors (the "Board") in its discretion. The Board
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shall review Executive's Base Salary no less frequently than
annually to determine whether or not to make any adjustment in
light of the duties, responsibilities and performance of
Executive and the performance of the Company.
2.2 Incentive Compensation. During the Term, Executive shall be
entitled to receive incentive compensation (a "Bonus") based on
Adjusted EBITDA (as defined below) of the named operations as
follows:
(a) Pivotal Business Bonus.
If the Adjusted EBITDA of the Then Pivotal pays to Executive:
Pivotal Business is:
in excess of $730,000 but less $15,000 Bonus less federal and
than $800,000 state income tax withholding,
other deductions required by law
and other normal deductions
("Pivotal Bonus A").
in excess of $800,000 $25,000 Bonus less federal and
state income tax withholding,
other deductions required by law
and other normal deductions
("Pivotal Bonus B"). In the
event Executive is eligible for
Pivotal Bonus B, Executive will
be awarded Pivotal Bonus B and
shall not receive Pivotal Bonus
A.
(b) Clinical Research Services Business Bonus.
If the Adjusted EBITDA of Then Pivotal pays to Executive:
all PHC's Clinical Research
Services business (including
but not limited to Pivotal,
and PPR) is:
in excess of $800,000 $25,000 plus 5% of amounts in
excess of $800,000 but less than
$1,200,000, less federal and
state income tax withholding,
other deductions required by law
and other normal deductions.
("Clinical Research Bonus A").
in excess of $1,200,000 Clinical Research Bonus A plus
3% of amounts of Adjusted EBITDA
of all PHC's Clinical Research
Services business in excess of
$1,200,000, less federal and
state income tax withholding,
other deductions required by law
and other normal deductions.
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(c) For purposes of Section 2.2(a) and 2.3(a), the term "Adjusted
EBITDA" shall have the meaning set forth in Note A (pertaining to
the Pivotal Business). For purposes of Section 2.2(b) and 2.3(b),
the term "Adjusted EBITDA" shall mean the sum of the Adjusted
EBITDA as determined pursuant to Note A (pertaining to the
Pivotal Business) and the Adjusted EBITDA as determined pursuant
to Note C (pertaining to the Non-Pivotal Business).
2.3 Stock Options. In addition to and not in lieu of any compensation
set forth elsewhere in this Agreement, Executive shall be granted
options (the "Options") to purchase PHC Stock (the "Option
Securities") under the terms and conditions of the PHC stock
incentive plan in effect from time to time (the "Option Plan"),
and according to a Stock Option Agreement authorized under the
Option Plan. Upon the effective date of this Agreement, Executive
shall receive options to purchase 20,000 shares of Option
Securities. During the term hereof, Executive shall be granted
options to purchase additional shares of Option Securities based
on annual profits of the named operations as follows:
(a) Adjusted EBITDA of PHC awards to Executive an
Pivotal Business: option to purchase:
in excess of $800,000 10,000 additional shares of PHC
Stock
(b) Adjusted EBITDA of all PHC awards to Executive an PHC
PHC divisions, option to purchase:
subsidiaries and affiliates
engaged in the Business
(including but not limited
to the Company, Pivotal
and PPR)
In excess of $800,000 20,000 additional shares of PHC
but less than $1,200,000 Stock
In excess of $1,200,000 50,000 additional shares of PHC
Stock
(c) The number of shares of the Option Securities into which the
Options are exercisable shall be adjusted based on stock
splits, dividends, recapitalizations and other events as set
forth in the Option Agreement and the Option Plan. All
Options issued to Executive shall be exercisable at a price
equal to the Closing Stock Price (as defined in the Purchase
Agreement), subject to adjustment based on stock splits,
dividends, recapitalizations and other similar events all in
accordance with normal business practices. All of such
Options shall be for a term of at least five (5) years from
the date of issuance, and all of such Options shall vest
immediately upon issuance.
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2.4 Employee Benefits. During the Term, Executive, subject to
eligibility and other terms, shall be entitled to participate in
any employee benefits plans and programs from time to time
established by the Company including, without limitation, any
group health plans, insurance plans, life insurance plans, profit
sharing, vacation, pension and other benefit plans adopted by the
Company. During the Term, Executive shall be entitled to
participate in and receive benefits as a senior executive under
all employee benefit plans, programs and arrangements, including
any stock-based compensation or incentive plan, retirement plan,
profit sharing plan, savings plan, life insurance plan, health
insurance plan, accident or disability insurance plan. Executive
shall be entitled to vacation commensurate with vacation
available to other executives of the Company. The Company
acknowledges that (i) Executive is pursuing an advanced
educational degree, (ii) Executive's course work will conclude in
April, 2004, (iii) Executive is required to attend all day
classes every other Friday, and (iv) Executive will be required
to attend a program in China in March that will require Executive
to miss six consecutive days of work. Subject to his continuing
duties and obligations hereunder, Executive is authorized to take
a reasonable amount of time off from work to complete his degree
during the time period set forth above, and none of the time
spent by Executive in school or at the program in China shall be
deemed to be vacation days or count against Executive's paid time
off.
2.5 Expense Reimbursement. The Company shall promptly pay all
reasonable expenses which are actually incurred by Executive on
behalf of the Company incident to the discharge and performance
of Executive's duties hereunder including, but not limited to,
business expenses for travel, as evidenced by vouchers and such
other reasonable supporting materials as the Company may require.
Executive shall properly account for all expenses and shall
maintain such records with respect thereto as are in accordance
with the policies and practices determined by the Board in effect
from time to time.
2.6 Auto Allowance. During the Term, Executive shall be entitled to
an automobile allowance of twenty-six payments of Four Hundred
Dollars ($400.00) during any given calendar year of the Term in
accordance with Pivotal's customary payroll practices. Such auto
allowance shall be in addition to other compensation paid to
Executive.
3. Covenants of Executive. In order to induce the Company to enter into
this Agreement, Executive hereby covenants as follows:
3.1 Inventions and Innovations. Executive agrees that all right,
title and interest in and to any innovation, design, technique,
process, idea, product, system, program, machine, method or
improvement which are or have been developed or created in whole
or in part by Executive at any time and at any place during the
term of his employment by the Company and related to or usable in
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connection with the business activities of the Company shall be
and remain forever the sole and exclusive property of the Company
unless otherwise agreed to in writing between the parties.
Executive further agrees to promptly reveal all information
relating to the same to the Board and to cooperate with the
Company and execute such documents as may be necessary in the
event that the Board desires to seek protection on behalf of the
Company thereafter.
3.2 Covenant Not To Compete. In consideration of the consummation of
the transactions contemplated under this Agreement, Executive
hereby covenants and agrees that for the period beginning on the
date hereof and ending one (1) year after the Date of
Termination, Executive will not, alone or in association with
others, either as a principal, agent, direct or indirect owner,
shareholder, partner, joint venturer or member, officer,
director, employee, lender, investor, consultant, manager, or in
any other capacity:
(a) Recruit or hire any employee of the Company, or otherwise
attempt to solicit or induce any employee of the Company to
leave the employment of the Company.
(b) Solicit any customer or Prospective Customer of the Company
or otherwise interfere with the business relationships
between the Company, its customers, Prospective Customers,
suppliers and others with whom the Company conducts its
Clinical Research Services business.
(c) Perform any service for any customer or Prospective Customer
of the Company which is competitive in any manner with
Clinical Research Services which the Company may perform for
such customers or Prospective Customers, regardless of
whether the Company has or is now providing such Clinical
Research Services.
(d) Executive shall not directly or indirectly solicit for
employment on Executive's own behalf, or on behalf of any
other enterprise, any individual who is or has been an
employee, agent or independent contractor of the Company in
a capacity related or pertaining to Clinical Research
Services.
This covenant not to compete shall in no way restrict the rights of
Executive to hold 5% or less of the equity securities of any corporation whose
equity securities are listed on a national securities exchange or are regularly
traded in the over-the-counter market and for which quotations are available on
the National Association of Securities Dealers Automated Quotation System.
3.3 Confidentiality. Executive acknowledges that, by virtue of his
involvement with the Company, he has been, and in the future will
be, exposed to and has had access, and, in the future will have
access, to trade secrets, processes, computer programs, financial
data and information, marketing information, customer
information, pricing information, customer lists, information
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relating to the business or operations of the Company and any
other information, software, equipment or processes which are
used in connection with or relate to the Company or its members,
managers, employees, customers or other vendors or which are
otherwise proprietary to or in the possession of the Company
("Confidential Information") except where such Confidential
Information (i) was or becomes generally available to the public
other than as a result of a disclosure by Company or its
affiliates to one or more unauthorized parties, (ii) is required
by law to be disclosed or (iii) is made generally available to
the public by the Company. Executive further acknowledges that
his expertise, knowledge and experience in, of and with the
Company would enable him to use such information to benefit
individuals or entities other than the Company. Executive hereby
covenants and agrees as follows:
(a) During the Term and at all times thereafter, the
Confidential Information shall be kept confidential by
Executive, will not be used in any manner which is
detrimental to the Company or its shareholders,
members, managers or employees, and will be safeguarded
by Executive from unauthorized disclosure. Executive
also agrees that Executive will disclose to the Person
or Persons designated by the Company all Confidential
Information.
(b) Following the expiration of the Term, Executive will
return to the Company any Confidential Information
currently in his possession or control or which may
subsequently come into his possession or control, will
not retain any copies, including non-conforming copies,
thereof, including, without limitation, all analyses,
compilations, studies or other documents in whatever
form, including magnetic media, prepared by Executive
or for Executive's use containing or reflecting any
Confidential Information. Executive shall not disclose
to the Company, use in the Company's business, or cause
the Company to use, any confidential or proprietary
information or materials of any third party.
3.4 Enforcement by Injunction. Executive acknowledges that the
protections of the Company set forth in Sections 3.1, 3.2 and 3.3
of this Agreement are of vital concern to the Company, that
monetary damages for any violation thereof would not adequately
compensate the Company and that the Company is engaged in a
highly competitive business. Accordingly, Executive agrees that
the restrictions set forth in Sections 3.1, 3.2 and 3.3 are
reasonable and that, in addition to any other remedy, the Company
shall be entitled to enforce such Sections by injunction whether
or not Executive's employment hereunder has terminated. Executive
hereby waives any requirement of a bond for such enforcement by
injunction.
3.5 Early Termination of Restrictive Provisions. The restrictive
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covenant set forth in Section 3.2 of this Agreement shall
terminate immediately upon the occurrence of (i) any termination
of Executive not for Cause, (ii) any termination of Kirby under
the Kirby Employment Agreement not for Cause, or (ii) an "Event
of Default" under any Note which is due to PHC's failure or
refusal to pay amounts due to Sellers thereunder which such
failure or failures continue for an aggregate period of not less
than six (6) months during the Terms of any such Notes.
3.6 Partial Enforcement. If any term or condition of this Agreement
shall be invalid or unenforceable to any extent or in any
application, then such term or condition shall automatically, and
without any further action, be reformed so as to retain the
fullest extent of any restriction therein permitted by law and
the remainder of this Agreement, and such term or condition,
except to such extent or in such application, shall not be
affected thereby, and each and every term and condition of this
Agreement shall be valid and enforced to the fullest extent and
in the broadest application permitted by law.
3.7 Cumulative Rights. Each and all of the various rights, powers and
remedies of the Company as set forth in this Agreement shall be
considered as cumulative, with and in addition to any other
rights, powers or remedies of such parties, and no one of them is
exclusive of the others or is exclusive of any other rights,
powers and remedies allowed by law or in equity. The exercise,
partial exercise or non-exercise of any rights, powers or
remedies shall constitute neither the election thereof nor the
waiver of any other rights, powers or remedies. All rights,
powers and remedies of the parties hereto shall survive the
termination of this Agreement.
3.8 Merger or Reorganization. The Company may assign its rights under
this Agreement in accordance with Section 10.10 of the Purchase
Agreement.
3.9 Enforcement. Executive agrees and warrants that the covenants
contained herein are reasonable, that valid consideration has
been and will be received therefore and that the agreements set
forth herein are the result of arms-length negotiations between
the parties hereto. Executive recognizes that the provisions of
this Article 3 are important to the continuing welfare of the
Company, and that money damages are an inadequate remedy for any
violation thereof. Accordingly, in the event of any such
violation by Executive, Pivotal or PHC, in addition to any other
remedies they may have, shall have the right to institute and
maintain a proceeding to compel specific performance thereof or
to issue an injunction restraining any action by Executive in
violation of this Article 3.
4. Termination of Employment.
4.1 Death or Disability. Executive's employment under this Agreement
shall terminate upon his death or Disability. Executive shall be
deemed to be Disabled in the good faith determination of the
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Board. At any time and from time to time, upon reasonable request
therefore by the Company, Executive shall submit to reasonable
medical examination for the purpose of determining the existence,
nature and extent of any such disability. The Company shall
promptly give Executive notice of any such determination of
Executive's Disability and of the decision of the Company to
terminate Executive's employment by reason thereof. In the event
of Disability, until the Date of Termination the Base Salary
payable to Executive under Section 2.1 shall be reduced
dollar-for-dollar by the amount of disability benefits, if any,
paid to Executive in accordance with any disability policy or
program of the Company. "Disability" shall mean the inability of
Executive, by reason of any medically determinable physical or
mental impairment for a period of 90 days during any 12 month
period, regardless of the Executive's presence or absence at his
place of employment, to carry out and perform the duties and
obligations ordinarily required of Executive.
4.2 Termination by the Company.
(a) With or Without Cause. The Company may terminate Executive's
employment under this Agreement with or without Cause.
"Cause" means, (i) commission of any dishonest act by
Executive in connection with Executive's performance of
activities including, without limitation, but not limited
to, an act of fraud, embezzlement or willful breach of a
fiduciary duty to the Company, (ii) drunkenness or
intoxication while engaged in Company business or the use of
drugs or alcohol in a manner which adversely affects
performance of the Executive's activities, (iii) diversion
of any corporate opportunity of the Company for Executive's
direct or indirect benefit, (iv) commission by Executive of
any act of sexual harassment, discrimination or other
violation of any similar statute, ordinance, law or
regulation regarding human rights, (v) any act or omission
by Executive which causes the disqualification, expiration
or termination of the Company's license which is issued by
any governmental or quasi governmental authority under any
statute governing the business or operations of the Company
and which disqualification, expiration or termination has a
Material Adverse Effect upon the Company's ability to
conduct business, (vi) the breach by Executive of Article 3
of this Agreement, or (vii) Executive's failure to use
commercially reasonable efforts to perform his duties under
this Agreement and Executive's failure to cure such
non-performance within thirty (30) calendar days after
receipt of written notice from the Company specifying the
nature of such failure, or if such failure is not capable of
being cured within thirty (30) calendar days, Company's
acceptance, in writing, of a written plan of action
submitted to the Company, within ten (10) calendar days of
receipt of such notice from the Company, that sets forth a
reasonable plan for Executive's cure of the failure,
provided, however, that two or more occurrences of
Executive's failure to use commercially reasonable efforts
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to perform his duties under this Agreement during the term
of this Agreement shall, at Company's option, constitute an
immediate termination for Cause.
4.3 Termination by Executive. Upon thirty days prior written notice
Executive may terminate his employment under this Agreement with
or without Good Reason (as defined below). If such termination is
with Good Reason, Executive shall give the Board written notice,
which shall identify with reasonable specificity the grounds for
Executive's resignation. For purposes of this Agreement, "Good
Reason" shall mean any of the following: (i) a reduction in
Executive's compensation in violation of Section 2.1 of this
Agreement, which reduction is accomplished without the prior
written consent of Executive, (ii) a material diminution in
Executive's duties and responsibilities under this Agreement for
a period of one month or more other than by virtue of Executive's
Disability, which material diminution is accomplished without the
prior written consent of Executive, or the mutual written consent
of Executive and Company, or the unilateral conduct of Executive,
(iii) the failure to pay any of Executive's compensation when due
(including any Bonus), except in the case of Executive's breach
of this Agreement or any other agreement between Executive, the
Company or its affiliates, (iv) any material breach of, or
material failure of the Company to perform, any material
provision of this Agreement including, but not limited to, the
Bonus provisions contained in Sections 2.2 and 2.3, and the
failure of such breaching party to cure such breach or
non-performance within the applicable "Cure Period", or (v) any
failure by PHC to fund the Company's working capital requirements
in accordance with the terms and conditions and in the amount set
forth in Section 3.5 of the Purchase Agreement, which failure
would materially impair Executive's ability to perform the duties
set forth in attached Exhibit A. For purposes of this Agreement,
the term "Cure Period" shall mean a period of time that commences
upon the giving of written notice by a non-defaulting party to
the defaulting party(ies) that a breach or failure to perform has
occurred and expires ten (10) calendar days from the date such
notice is given or deemed given.
4.4 Date of Termination. "Date of Termination" shall mean the earlier
of (a) the expiration of the Term, and (b) if Executive's
employment is otherwise terminated whether by Executive or by the
Board, the date on which Executive's employment with the Company
actually terminates.
4.5 No Event of Default under Transaction Documents. Any termination
of this Agreement by the Company or Executive (whether with or
without Cause and whether with or without Good Reason) shall not
independently constitute an event of default for purposes of the
Transaction Documents, and no independent action initiated by
Executive, PHC or Pivotal for a breach of the terms and
conditions of this Agreement shall give rise to a separate cause
of action under the Transaction Documents except the rights
specifically set forth in the Notes.
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5. Compensation Upon Termination.
5.1 As a Result of Death, Disability, Cause or Resignation.
(a) Death or Disability. Subject to Executive's continuing
compliance with the terms of this Agreement, if Executive's
employment under this Agreement is terminated prior to the
expiration of the Term by reason of his death or disability,
then Executive (or in the case of his death, his personal
representative) shall be entitled to receive the amount of
his Accrued Obligations (as defined below), such amount to
be paid in accordance with the Company's ordinary and
customary payroll practices. As used in this paragraph,
"Accrued Obligations" means, as of the Date of Termination,
(i) any payments which Executive may be entitled to receive
pursuant to any Company employee benefits plan or program,
(ii) any earned but unpaid Base Salary as of the date of
such termination, (iii) any accrued and unpaid expense
reimbursements or auto allowance pursuant to Sections 2.5
and/or 2.6, and (iv) any accrued or earned and unpaid Bonus
pro-rated through the Date of Termination.
(b) Termination for Cause; Resignation Without Good Reason. If
Executive's employment under this Agreement is terminated
prior to the expiration of the Term by reason of his
termination by the Company for Cause or his resignation
without Good Reason, then Executive shall solely be entitled
to receive the following benefits: (i) any benefits which
Executive may be entitled to receive pursuant to any Company
employee benefits plan, (ii) any earned, but unpaid Base
Salary, and (iii) any accrued but unpaid expense
reimbursements, subject to Section 2.5, or auto allowance
pursuant to Section 2.6.
5.2 By Executive for Good Reason or the Company other than for Cause.
(a) Benefits. If, prior to scheduled expiration of the
Term, the Company terminates Executive's employment
without Cause, or Executive terminates his employment
for Good Reason, Executive shall be entitled to receive
the Accrued Obligations described in Section 5.1(a)
and, subject to Section 5.2(b), the following
additional benefits (such additional benefits, the
"Post-Termination Benefits"):
(i) In the event the Company terminates the Executive's
employment without Cause or the Executive terminates
his employment for Good Reason, then, provided
Executive continues to comply with the terms of Section
3 of this Agreement, the Company shall pay to Executive
his Base Salary, payable in accordance with Pivotal's
regular payroll practices (but no less frequently than
monthly) less federal and state income tax withholding,
other deductions required by law and other normal
deductions, for a period of six (6) months following
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the Date of Termination. In addition, Executive shall
have the right to select an executive placement firm to
provide executive placement services to Executive and
the Company shall retain and pay directly all costs up
to $10,000 for such executive placement services until
the earlier to occur of (i) the date on which Executive
starts new, full time employment, or (ii) six months
from the Date of Termination.
(b) Conditions to Receipt of Post-Termination Benefits
under Section 5.2(a). As a condition to receiving any
Post-Termination Benefits to which Executive would
otherwise be entitled under Section 5.2(a), Executive
shall execute a release (the "Release"), in a form and
substance reasonably satisfactory to the Board, of any
claims, whether arising under Federal, state or local
statute, common law or otherwise, against the Company
and its direct or indirect subsidiaries, and their
respective officers, directors and stockholders which
arise or may have arisen on or before the date of the
Release, other than any claims arising under any of the
Transaction Documents or any rights to indemnification
from the Company and its direct or indirect
subsidiaries pursuant to any provisions of Company's
(or any of its subsidiaries') certificate of
incorporation or by-laws or any directors and officers
liability insurance policies maintained by the Company.
If Executive fails or otherwise refuses to execute a
Release within a reasonable time after the Company's
request to do so, Executive will not be entitled to any
Post-Termination Benefits. In addition, if, following a
termination of employment that gives Executive a right
to the payment of Post-Termination Benefits, Executive
engages in any activities that violate the covenants in
Section 3, Executive shall have no further right or
claim to any Post-Termination Benefits and shall
promptly repay any Post-Termination Benefits previously
received (such repayment to be in addition to any other
rights or remedies available to Company in respect of
such violation).
5.3 No Mitigation. Executive shall not be required to mitigate the
amount of any payment or benefit provided for in this Section 5
by seeking other employment or otherwise, and, except as
otherwise expressly provided in Sections 5.1 or 5.2, the amounts
of compensation or benefits payable or otherwise due to Executive
under this Section 5 or other provisions of this Agreement shall
not be reduced by compensation or benefits received by Executive
from any other employment he shall choose to undertake following
termination of his employment under this Agreement.
6. Miscellaneous.
6.1 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the heirs and representatives of Executive and the
successors and assigns of the Company.
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6.2 Notices. All notices or other communications hereunder shall be
made in writing and shall be deemed duly given (a) when
personally delivered to the intended recipient (or an officer of
authorized representative of the intended recipient), (b) on the
day of transmittal when sent by facsimile with confirmation of
receipt if sent prior to 5:00 pm, or on the immediately following
day if sent after 5:00 pm, (c) on the first business day after
the date sent when sent by a nationally recognized overnight
courier service, or (d) three business days after it is sent by
first class U.S. mail, postage prepaid, to the intended recipient
at the address set forth below:
(a) to PHC or the Company, to it at:
PHC, Inc.
200 Lake Street, Suite 102
Peabody, MA 01960
Attention: Bruce A. Shear, President
Facsimile No.: (978) 536-2677
with a copy to:
Arent Fox Kintner Plotkin & Kahn, PLLC
1050 Connecticut Avenue, NW
Washington, DC 20036-5339
Attention: J. Aaron Ball, Esq.
Facsimile No.: (202) 857-6395
(b) to Executive at:
Michael J. Colombo
4328 East Bramble Circle
Mesa, AZ 85206
Any party may change the address to which notices and communications hereunder
are to be delivered by giving the other parties notice in the manner set forth
herein.
6.3 Construction. As used in this Agreement, unless the context
otherwise requires: (i) references to "Section" are to a section
of this Agreement; (ii) all "Exhibits" referred to in this
Agreement are to Exhibits attached to this Agreement and are
incorporated into this Agreement by reference and made a part of
this Agreement; (iii) "include", "includes" and "including" are
deemed to be followed by "without limitation" whether or not they
are in fact followed by such words or words of like import; (iv)
the headings of the various sections and other subdivisions of
this Agreement are for convenience of reference only and shall
not modify, define or limit any of the terms or provisions of
this Agreement; and (v) "knowledge" of a person means the actual
knowledge of such person and the knowledge that a prudent
individual could be expected to discover or otherwise become
aware of in the course of conducting a reasonable investigation
concerning the existence of the matters addressed.
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6.4 Assignment. This Agreement shall not be assignable by Executive.
6.5 Execution in Counterparts. This Agreement may be executed in two
or more counterparts and by facsimile signature, each of which
shall constitute an original, but all of which together shall
constitute but a single instrument.
6.6 Jurisdiction and Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Arizona applicable to agreements made and to be performed in
Arizona. Any and all disputes arising out of, related or
pertaining to this Agreement shall be resolved in accordance with
the Arbitration provisions set forth in Section 10.12 of the
Purchase Agreement.
6.7 Severability. If any provision of this Agreement, or the
application of any provision to any person or circumstance, shall
for any reason and to any extent be invalid or unenforceable, the
remainder of this Agreement and the application of that provision
to other persons or circumstances shall not be affected but shall
be enforced to the full extent permitted by law.
6.9 Complete Agreement; Modification and Termination. This Agreement
contains a complete statement of all the arrangements among the
parties with respect to its subject matter, supersedes all
existing agreements among them concerning that subject matter and
may be modified, waived or terminated only by a written
instrument signed by the parties.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
PHC, Inc.
By: /s/ Bruce A. Shear
______________________________________
Bruce A. Shear
Title: President
EXECUTIVE
/s/ Michael Colombo
______________________________________
Michael Colombo
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A-1
Exhibit A
Executive Job Description
1. Responsibilities
The Executive shall be responsible for management of all PHC staff conducting
Clinical Research Services (including within Pivotal, PPR, Inc., and any PHC
operating divisions) and all other employees associated with the Clinical
Research Services Business. Efforts of the Executive will be focused towards the
following:
o Manage Growth
o Implement Best Practices across all sites conducting clinical research
o Identify and implement strategies to improve operational efficiency
and patient recruitment
o Assess, present and pursue growth opportunities using either
Greenfield or acquisition approaches
o Develop staff to ensure a robust long-term focused, high performance
organization
o Develop business strategy and annual goals for the clinical research
organization
2. Reporting Relationship
The Executive will report directly to the CEO of PHC and the Board. All
employees conducting Clinical Research Services full time will have a direct
reporting relationship into the clinical research organization managed by
Executive. Any PHC staff whose time is divided between providing Clinical
Research Services and providing other services to PHC or its subsidiaries or
affiliates will have a direct reporting relationship into the clinical research
organization when they are performing tasks contracted to them by the Pivotal
Business. Compensation for part time staff will be negotiated prior to
acceptance of any new protocols for work to be performed on that protocol.
3. Accountability
The Executive will be accountable directly to the CEO of PHC. The Executive is
responsible for all financial and operational performance measures defined
above. The Executive will provide weekly written performance reports (5-15) to
the CEO of PHC. The Executive will support any Board presentations or meetings
as requested by the CEO of PHC. Any and all foreseen difficulties associated
with meeting monthly performance targets will be identified to the CEO of PHC.
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4. Authority
Subject to the authority of the Board, the Executive will have full authority to
manage and run clinical research activities across all PHC subsidiary sites.
Subject to the authority of the Board, the Executive will have authority to
conduct clinical research operations autonomously at all PHC sites.
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