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.
(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.
-2-
(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.
-3-
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).
-4-
(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
-5-
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
-6-
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:
-7-
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
-8-
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
- ----------------------------------- ---------------------------
-9-
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.
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 $________.
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:
--------------------------------
-2-
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
-3-
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-
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
-2-
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.
-3-
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
------------------------------------
-4-