EXHIBIT 99.1
SEVERANCE AGREEMENT WITH MUTUAL RELEASES
This SEVERANCE AGREEMENT WITH MUTUAL RELEASES ("Severance Agreement")
is between Integrated Healthcare Holdings, Inc. ("Employer") and Larry B.
Anderson ("Employee"), collectively "Parties." This Severance Agreement shall be
enforceable only when and if (i) a certain "Consulting Agreement", and (ii) this
Severance Agreement are both fully executed ("Effective Date").
RECITALS
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A. Employee entered into an Employment Agreement with the
Company, on or about February 22, 2005 to serve as the Company's President
("Employment"), commencing February 22, 2005. On or about June 9, 2005, an
Amendment to the Employment Agreement was executed by Employee and the then
Chairman of the Board of the Company.
B. Employee and Company mutually agree that it is in both
Parties' best interest to mutually terminate the Employment Agreement, as
Amended (collectively, "Amended Employment Agreement"), and to terminate
Employee's Employment and in order to facilitate Employee's transition from an
employee of, to a consultant for, the Company.
C. NOW, THEREFORE, for good and valuable consideration and the
mutual covenants contained herein, including the execution of this Agreement,
the Parties agree as follows:
SEVERANCE AGREEMENT
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ARTICLE 1. TERMINATION OF EMPLOYMENT AND OF EMPLOYMENT AGREEMENT
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1.01. TERMINATION OF EMPLOYMENT AND OF EMPLOYMENT AGREEMENT. Employee's
Employment and the Amended Employment Agreement both shall be terminated at
midnight, December 31, 2007, automatically and without further notice, by mutual
agreement ("the Termination"). Thereafter, Employee shall not render and shall
not be obligated to render any services, legal or otherwise, as President, as an
officer, as an employee or in any other capacity, except as a Consultant as
provided in that certain concurrently executed Consulting Services Agreement.
ARTICLE 2. PAYMENT OF COMPENSATION
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2.01. PAYMENT OF SEVERANCE PACKAGE COMPENSATION. In consideration for Employee's
releases and conditioned upon Employee's execution and delivery of this
Severance Agreement to Company within the time required, below, Employer shall
pay and provide the below described compensation and benefits ("Severance
Package").
2.01.01. Company shall pay Employee compensation, equivalent
to fourteen (14) equal monthly installments (the monthly amount of which is more
particularly described in
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subsection 2.01.03, below), according to the schedule describe in subsection
2.01.02, below. Payment is subject to and conditioned on Employee not having
exercised his right to revoke his acceptance of, and terminate, this Severance
Agreement (see below).
2.01.02. The schedule of payments is as follows: (i) one (1)
lump sum payment, equivalent to eight (8) monthly installments, payable within
one (1) business day after Employee's right to revoke his acceptance of, and
terminate, this Severance Agreement has expired (REF. Section 3.01 ET SEQ,
below); and (ii) The remaining six (6) equal installments shall be paid to
Employee on or before the first business day of each month, commencing September
1, 2008 month.
2.01.03 The amount of each equal monthly installments shall be
the sum of Employee's customary monthly compensation, as paid to Employee for
the month of December 2007 ("Installment"), as determined by the sum of (i)
Employee's base monthly salary, net of required deductions; PLUS (ii) the
monthly value of Employee's health and dental insurance; PLUS (iii) the monthly
value of Employee's automobile allowance. Other compensation (E.G. bonuses,
accrued vacation, ETC.), which may have been paid in any month, including
December, but which is not described in this sub section 2.01.03, shall not be
included as part of any monthly Installment.
2.01.04. Employee shall not accrue or be entitled to
additional "Paid Time Off," vacation pay, sick pay benefits, non-accrued
bonuses, non-accrued or non vested stock options, or any other compensation or
benefits (employment related or otherwise), after the effective date of
termination, except (i) as specifically described in this Section 2.01 and the
sub parts thereof; and (ii) when and if enforceable, pursuant to the
concurrently executed Consulting Services Agreement.
2.01.05. Company shall pay Employee a year end bonus of
$30,000 payable within one (1) business day after Employee's right to revoke his
acceptance of, and terminate, this Severance Agreement has expired (REF. Section
3.01 ET SEQ, below).
2.01.06. Company's obligations (including all obligations to
pay) under this Severance Agreement are conditioned on, and shall not commence
until (i) the concurrent execution and delivery of this Severance Agreement and
that certain Consulting Services Agreement, to Company, and (ii) the expiration
of seven (7) days, after Employee's delivery of the executed Severance
Agreement, without Employee having revoked his acceptance of the Severance
Agreement. In no event, however, shall Company have any obligation to provide
compensation and benefits under the Severance Agreement (i) while Company is
still paying compensation and providing benefits under the terms of the Amended
Employment Agreement, or (ii) until after the effective date of Employee's
termination.
2.01.06. Any extension of the time for Employee's execution
and delivery of this Severance Agreement must be in writing and executed by
Employer, otherwise, no extension shall be permitted or shall be enforceable.
Section. 2.02. PAYMENT OF PRE-TERMINATION COMPENSATION. On or before January 3,
2008, Company shall pay and deliver to Employee all the following unpaid items
(if any) which
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will have been accrued, through midnight, December 31, 2007, and which remain
unpaid: (i) salary (after deduction of required withholdings), through ; (ii)
the full value of all accrued and unpaid vacation pay; (iii) bonuses or other
accrued pay (if any); and (iv) all properly submitted expense invoices, as
reimbursement, IRRESPECTIVE OF WHETHER THIS SEVERANCE AGREEMENT IS EXECUTED.
ARTICLE 3. MUTUAL RELEASES
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Section 3.01. MUTUAL RELEASES. Employee releases Employer and Employer releases
Employee from any and all known and unknown claims of any nature, including
(without limitation) any claims arising from or otherwise related to Employee's
employment by Company, including (without limitation) the Amended Employment
Agreement and any other employment agreement of any kind whatsoever, as more
particularly provided herein.
3.01.01. Employee's release of "Employer" means Employee
waives, releases and forever discharges Company and each of its current and
former affiliates, subsidiaries, parents, divisions, successors, predecessors
and assigns, as well as each of their respective past and present agents,
directors, officers, shareholders, partners, insurers, representatives,
consultants, attorneys and employees (collectively referred to as "Employer
Releasees"), and each of them, from any and all claims of any kind or nature,
whether known or unknown or suspected or unsuspected, which Employee now owns or
holds, or has at any time before the date he signs this Severance Agreement,
owned or held against Employer and the Employer Releasees, and each of them.
3.01.02. The phrase "any and all known and unknown claims" as
used in this Severance Agreement includes, but is not limited to, all claims,
demands, causes of action, complaints, or actions of any kind, whether known or
unknown, anticipated or unanticipated, suspected or unsuspected, past or
present, contingent or fixed including which either Employee or Employer may
have. "[Any and all known and unknown claims", includes (but is not limited to):
(i) any and all claims based on tort or contract; (ii) any and all claims
arising under federal, state or local law or statute, including, but not limited
to any and all claims arising under Title VII of the Civil Rights Act of 1975,
as amended, 42 U.S.C. ss.2000e, et seq., the Americans with Disabilities Act, 42
U.S.C. ss.12101, et seq., the Family and Medical Leave Act of 1993, 29 U.S.C.,
ss. 2601, et seq., the California Family Rights Act, Cal. Gov't Code ss.
12945.2, the California Fair Employment and Housing Act, Cal. Govt Code
ss.12900, et seq., and any other federal, state or local fair employment
practice or civil rights law, ordinance or Employee order; and, (iii) any and
all claims arising out of, related to or connected with the employment of
Employee by Company, the terms and conditions and/or separation of that
employment, and any employment practice, policy or decision of, or omission or
action taken by, the Employee or Employer, and each of them, including, but not
limited to, any claims for wrongful discharge, misrepresentation, defamation,
fraud, fraudulent inducement or emotional distress.
3.01.03. The Parties understand that each of their releases
includes all claims of every nature and kind whatsoever, known or unknown,
suspected or unsuspected, including, without limitation, any and all claims or
obligations arising from or related in any way to the
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Action. All rights under Section 1542 of the Civil Code of California, or under
any other state statute or case law which is substantially similar to Section
1542 in language or effect, are hereby expressly waived. Section 1542 provides
as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have
materially affected his settlement with the debtor."
3.01.04. The Parties understand that facts different from, or
in addition to, those which now known or believed to be true with respect
presently asserted or any other possible claims may be discovered at a later
date, but agrees that the releases contained herein shall be and remain
effective in all respects notwithstanding such different or additional facts or
the discovery thereof.
Section 3.02. SPECIFIC WAIVERS AND RELEASES. Employee specifically, voluntarily,
and knowingly waives any claims or causes of action he may have under the Age
Discrimination in Employment Act ("ADEA") and pursuant to the Older Workers
Benefit Protection Act ("OWBPA"). In this regard, Employee specifically
acknowledges the following:
3.02.01. Employee is aware of his right to consult with, and
specifically has been given the opportunity to and has been advised to consult
with Employee's own independent counsel regarding his rights under both of these
Acts, as well as this entire Severance Agreement, prior to signing this
Severance Agreement.
3.02.02. Employee has the right to, and was given, twenty-one
(21) days within which to consider the provisions of this Severance Agreement if
ADEA and OWBPA are applicable, although Employee may sign and return it sooner.
Employee has decided to voluntarily execute the Severance Agreement now and,
therefore, waives this right.
3.02.03. Employee understands he has the right to revoke this
Severance Agreement for a period of seven (7) days after its execution.
Accordingly, this Severance Agreement shall not become effective or enforceable
until the eighth day following Employee's execution of this Severance Agreement.
3.02.04. Employee represents he has been given the opportunity
to and has, in fact, read this entire Severance Agreement, that it is in plain
language, and that Employee has had all questions (if any) regarding its meaning
answered to Employee's satisfaction.
3.02.05. Employee fully understands the terms, contents and
effects of this Severance Agreement and understands that it is a FULL RELEASE OF
ALL KNOWN AND UNKNOWN CLAIMS (if any) against Company and any and all Company
Agents, including all rights under the ADEA and OWPA. The releases contained
herein are not a waiver of claims that may arise after the date of this
Severance Agreement;
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3.02.06. Employee represents he has enters into this Severance
Agreement knowingly and voluntarily in exchange for the promises contained
herein and, except as stated herein, no other representations have been made to
Employee to induce or influence Employee's execution of this Severance
Agreement.
Section 3.03. That certain concurrently executed Consulting Services Agreement
shall survive the releases contained herein, provided Employee does not timely
exercise his right to revoke his acceptance of, and terminate, this Service
Agreement.
ARTICLE 4. CONFIDENTIAL INFORMATION; RETURN OF PROPERTY.
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Section 4.01. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Except as may be
required by that certain concurrently executed Consulting Agreement, Employee
shall not (i) voluntarily, directly or indirectly communicate, in any manner to
any legal or natural person (except as required by applicable law or in
connection with the performance of his duties and responsibilities as a former
employee of Company); (ii) use or otherwise appropriate for Employee's own or
any third party's benefit any Confidential Information. Confidential Information
shall include (without limitation) information made available to, obtained by or
developed by Employee during the course of his employment relating or pertaining
to the Company's trade secrets, financial information, technical information and
/or business plans and strategies. Employee shall use his best efforts, and
cooperate with the Company, to maintain the secrecy of and limit the use of such
Confidential Information.
Section 4.02. RETURN OF PROPERTY. Except as may be required by that certain
concurrently executed Consulting Agreement, all documents, memoranda, reports,
notebooks, correspondence, files, lists and other records, and the like,
designs, drawings, specifications, computer software and computer equipment,
computer printouts, computer disks, and all photocopies or other reproductions
thereof, affecting or relating to the Business of the Company, which Employee
shall prepare, use, construct, observe, possess or control ("Company
Materials"), shall be and remain the sole property of the Company. Employee
shall deliver promptly to the Company all such Company Materials and other
Company Property (E.G. tangible property, credit cards, entry cards, pagers,
identification badges, cellular phones, and keys) upon termination of his
employment.
ARTICLE 5. FUTURE COOPERATION.
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Section 5.01. Subsequent to his termination, Employee agrees to cooperate with
the Company and use his best efforts to respond to all reasonable requests by
the Company for assistance and advice relating to matters and procedures in
which Employee was involved or which Employee managed or was responsible for
while employed by the Company, as its President.
Section 5.02. Employee also represents and agrees to cooperate in the Company's
defense or prosecution of any claim or other action which arises, whether civil,
criminal, administrative or investigative, in which Employee's participation is
required in the best judgment of the Company by reason of his former employment
with the Company. Upon the Company's request, Employee
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will use his best efforts to attend hearings and trials, to assist in
effectuating settlements, and to assist in the procuring of witnesses, producing
evidence, and in the defense or prosecution of said claims or other actions.
ARTICLE 6. NON-DISPARAGEMENT.
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Section 6.01. NON-DISPARAGEMENT. Employee agrees that he will not make
derogatory nor disparaging statements about Company or any of its other
affiliate companies and their employees, officers and directors (collectively,
"Company"). Employee also shall not induce or incite claims of discrimination,
wrongful discharge, sexual or other forms of harassment, breach of contract,
tortious acts, or any other claims of any type whatsoever against Company by any
other person or employee, relating to such individual's employment or business
dealings with Company.
ARTICLE 7. GENERAL PROVISIONS
Section 7.01. NOTICES. Any notices required or permitted to be sent under this
Severance Agreement may be personally delivered, sent by overnight mail or
overnight delivery service (E.G. Federal Express) or mailed by registered or
certified mail, return receipt requested. Receipt of any notice shall be
conclusively be deemed complete, according to the following: (i) personal
delivery shall be deemed received the same day; (ii) overnight mail or overnight
delivery service shall be deemed complete the next day, Sundays and holidays
excepted; (iii) certified or registered mail shall be deemed complete upon
recipient's execution of the receipt. Notices shall be sent to the following
addresses until and unless changed by a Parties written notice to the other
Party:
IF TO CLIENT: Scott Schoeffel, General Counsel
Integrated Healthcare Holdings, Inc
1301 North Tustin Ave.
Santa Ana, CA 92705
IF TO CONSULTANT: Larry Anderson 28 Pegasus Dr.
Coto De Caza, CA. 92679
Section 7.02. ENTIRE AGREEMENT OF THE PARTIES. This Severance Agreement is the
full and complete agreement and, with the concurrently executed Consulting
Agreement, contain the entire and complete understanding of all agreements
between Company and Employee. There are no other agreements of any kind. This
Severance Agreement supersedes all prior agreements, including the prior
EMPLOYMENT AGREEMENT between the Parties, dated February 22, 2005 and all
amendments (if any) thereto. This Severance Agreement can only be modified by a
writing signed by both Parties.
Section 7.03. ATTORNEYS' FEES. In the event of a dispute arising from or
relating to this Severance Agreement, each party shall pay their own legal fees
and costs.
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Section 7.04. SEVERABLE PROVISIONS. The provisions of this Severance Agreement
are severable. If any provision shall be determined to be unenforceable, in
whole or in part, the remaining provisions shall nevertheless be binding and
enforceable.
Section 7.05 ARBITRATION.
7.05.01. Any controversy between Company and Employee
involving the construction or application of any of the terms, provisions or
conditions of this Severance Agreement shall be submitted to binding arbitration
if one Party sends a written demand for binding arbitration to the other Party .
Company and Employee shall both be deemed to have waived the right to litigate
the claim in any federal or state court if either party tenders a written
request for arbitration of any such claim(s).
7.05.02. Prior to commencement of, and as a condition of, any
arbitration, however, the Parties agree to first attempt to resolve any dispute
before a neutral mediator in a non-binding mediation. The mediation shall take
place within thirty (30) days of written notice by either party of any such
dispute. The mediator shall be a California licensed attorney with at least
fifteen years experience in and an emphasis in California and Federal Employment
Law, or a retired or former judge of the Superior Court of the State of
California or of the Court of Appeals of the State of California ("Mediator").
The Mediator shall be selected by the same process used for the selection of an
Arbitrator, as described in subsection 11.4, below. The parties agree that
mediation shall not exceed one (1) day in duration.
7.05.03. Arbitration shall comply with and be governed by the
provisions of the California Arbitration Act, unless otherwise precluded by
California or Federal law. The Federal Arbitration Act shall apply only if
enforcement of a particular provision of the California Arbitration Act would
undermine the goals and policies of the Federal Arbitration Act.
7.05.04. Any demand to arbitrate shall be deemed to have been
made on the date actually received by the party upon whom it is served and, for
purposes of the statute of limitations, shall have the same effect as if suit
had been filed on the date the demand is made. Any demand to arbitrate any claim
arising from or in connection with this Severance Agreement must be received
within six (6) months after the claim first arose, notwithstanding any other
statute of limitations providing for a longer period of time, unless otherwise
forbidden in law.
7.05.02. The arbitration shall occur in Orange County,
California, before a neutral, single retired or former judge of the Superior
Court of the State of California or of the Court of Appeals of the State of
California ("Arbitrator"). The parties shall agree upon an Arbitrator within ten
(10) days after the demand is made. If the parties cannot agree on an
arbitrator, then any of them may apply to the Orange County Superior Court for
an Order appointing an Arbitrator who meets the requirements of this subsection
13.3.
7.05.02. The Arbitrator shall have exclusive jurisdiction over
all legal and equitable claims, issues and remedies, so all types of relief
available in a judicial proceeding shall be available to the Parties in the
Arbitration. The Parties may use the Orange County Superior Court or, only if
required, the Federal Court in Orange County to enforce the Arbitrators rulings
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and awards. Discovery, including depositions for the purpose of discovery, shall
be broadly permitted, and the provisions of the California Code of Civil
Procedure ss.1283.05 shall apply.
7.06. CAPTIONS. The captions of the paragraphs of this Severance Agreement are
solely for the convenience of the undersigned, are not a part of this Severance
Agreement, and shall not be used for the interpretation of any provision of this
Severance Agreement.
7.07. CONTINUING OBLIGATIONS. The rights and obligations of Employee and Company
set forth in this Severance Agreement shall survive the releases contained
herein. 7.08. NON-WAIVER. The failure of either party to insist on strict
compliance with any of the terms and conditions of this Severance Agreement by
the other party shall not be deemed a waiver of that term or condition. The
waiver or relinquishment of any right or power at any one time or times be
deemed a waiver or relinquishment of that right or power for all or any other
times.
7.09. APPLICABLE LAW; VENUE. This Severance Agreement is entered into and is to
be performed in Orange County, California. The Severance Agreement shall be
governed by the laws of the State of California. The Parties agree venue shall
conclusively be deemed to lie in Orange County, California in the event of any
arbitration or litigation. This is a material provision without which Company
would not have executed this Severance Agreement.
7.10. PHOTOCOPIES AND COUNTERPARTS. This Severance Agreement may be executed in
counterparts, each of which shall be deemed an original and together shall
constitute one complete instrument. Photocopies and facsimiles of such signed
counterparts may be used in lieu of the originals for any purpose.
7.11. AUTHORITY. Any person or entity purporting to have the authority to enter
into this Severance Agreement on behalf of or for the benefit of any other
person or entity hereby warrants that it has such authority.
7.12. INTERPRETATION OF SEVERANCE AGREEMENT. In determining the meaning of, or
resolving any ambiguity with respect to, any word, phrase or provision of this
Severance Agreement, this Severance Agreement shall be construed with the
understanding both Parties were responsible for, and participated in, its
preparation. Section 1654 of the Civil Code shall not apply.
7.13. DISCLAIMER. Employee understands the Law Firm of James W. Lundquist, Inc.,
is the attorney for Company ONLY. Employee represents he has not executed this
Severance Agreement in reliance on or with the belief that any employee or
person associated or believed to be associated with the Law Firm of James W.
Lundquist, Inc., is acting (whether as an attorney or otherwise) on Employee's
behalf in executing this document.
9.14. SEPARATE COUNSEL ENCOURAGED. Employee represents he is an experienced
attorney and active member of the California State Bar. Employee also
acknowledges he has been advised to review this Severance Agreement with his own
attorney before executing this Severance Agreement.
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SIGNATURES FOLLOW ON PAGE 10
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EACH OF THE UNDERSIGNED PARTIES HAS CAREFULLY READ, UNDERSTANDS AND AGREES TO
EVERY PROVISION CONTAINED IN THIS SEVERANCE AGREEMENT.
Integrated Healthcare Holdings, Inc.,
A Nevada Corporation, as "Company"
By: /s/ Bruce Mogel Executed on December 31, 2007
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Bruce Mogel, CEO
By: /s/ Larry B. Anderson Executed on December 31, 2007
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Larry B. Anderson, "Employee"
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