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EXHIBIT 10.22
EMPLOYMENT AGREEMENT
This
Employment Agreement (this "AGREEMENT") is made and entered into
as
of July 21, 2005 (the "Effective Date"), by and between Rainier
Home Health Care
Pharmacy, Inc., a Washington corporation (the "COMPANY"), and John
T. Tran, a
resident of the State of Washington (the "EMPLOYEE").
RECITALS
A.
Employee is expected to continue to make a major contribution to
the
profitability, growth and financial strength of the Company.
B. The
Company and Employee have determined that it is in their
respective
best interest to enter into this Agreement on the terms and
conditions as set
forth herein.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and the mutual
covenants
and promises contained herein, and for other good and valuable
consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereby
agree as follows:
1. EMPLOYMENT. The Company hereby employs Employee, and Employee
hereby accepts
employment by the Company, upon the terms and conditions set forth
in this
Agreement.
2. DUTIES. Employee shall serve as President of the Company and
agrees to be
subject to the general supervision, orders, advice and direction of
the Chairman
of the Board of Directors for the Company (the "CHAIRMAN") in a
manner
consistent with The Certificate of Incorporation and By-Laws of the
Company. As
President, Employee shall be entitled to enter into agreements for
the purchase
or sale of products and services in the ordinary course of the
Company's
business and shall have the ability to hire and fire employees of
the Company.
Employee shall not be obligated to receive any training from the
Company in
connection with his duties hereunder.
3. EXTENT OF SERVICES. During the term of Employee's employment
hereunder,
Employee shall devote his full working time and efforts to the
performance of
his duties and the furtherance of the interests of the Company and
shall not be
otherwise employed; provided, however, that Employee's ownership of
a property
management business and other entities that own real estate shall
not be
considered a violation of this Section 3.
4. TERM. Subject to the provisions for termination in Section 6
below, the
initial term of employment of Employee under this Agreement
shall
be three (3) years from and after the Effective Date (the "INITIAL
TERM") and it
shall automatically renew annually for successive one (1) year
periods (each, a
"RENEWAL TERM"), unless the Company or Employee elects not to renew
this
Agreement by serving written notice of such intention not to renew
on the other
party at least ninety (90) days prior to the end of the Employment
Term (as
hereinafter defined). If such an election is made, this Agreement
shall be in
full force and effect for the remaining portion of the Employment
Term,
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subject to the provisions for termination in Section 6 of this
Agreement. Any
reference in this Agreement to the "EMPLOYMENT TERM" shall mean the
period
beginning on the date hereof and continuing until Employee's
employment is
terminated under the terms of this Agreement.
5. COMPENSATION AND BENEFITS.
5.1
SALARY. In consideration of the services rendered to the
Company
hereunder by Employee and Employee's covenants hereunder, the
Company shall,
during the Employment Term, pay Employee a salary at the annual
rate of
$180,000, less statutory deductions and withholdings, payable in
accordance with
the Company's regular payroll practices. In addition, Employee will
be eligible
to receive an annual salary increase in an amount to be determined
by the
Chairman.
5.2 BONUS.
Employee will receive bonuses based upon his performance in his
capacity as an employee and manager of the Company during the
Employment Term.
The Employee's bonus for calendar year 2005 shall be an amount
equal to the
lesser of (i) $150,000, or (ii) the Company's actual EBITDA for
calendar year
2005 minus the Company's target EBITDA for such year of $1,800,000.
The
Employee's bonus for calendar year 2006 shall be an amount equal to
the lesser
of (v) $150,000, or (vi) the Company's actual EBITDA for calendar
year 2006
minus the Company's target EBITDA for such year of 2,160,000. The
Employee's
bonus for calendar year 2007 shall be an amount equal to the lesser
of (x)
$150,000, or (xi) the Company's actual EBITDA for calendar year
2007 minus the
Company's target EBITDA for such year of $2,592,000. If the
Company's target
EBITDA for any calendar year exceeds actual EBITDA for such year,
then no bonus
shall be paid to Employee for such year. Actual EBITDA shall be
calculated by
the Company no later than 120 days after the end of each calendar
year, and the
bonus shall be paid no later than 10 business days after EBITDA is
calculated by
the Company.
5.3
BENEFITS PACKAGE. During the Employment Term, Employee shall be
entitled to participate in the Company's corporate, medical and
disability
insurance plans. Employee shall be entitled to all other fringe
benefits
generally provided for salaried employees of the Company as
provided under the
Company's fringe benefit programs.
5.4 STOCK
OPTION. Employee shall be entitled to options to purchase
50,000
shares of Standard Management Corporation ("SMC") under the
Standard Management
Corporation 2002 Stock Incentive Plan (THE "PLAN"). In addition,
Employee shall
be entitled to receive options to purchase additional shares of SMC
under the
Plan at the discretion of SMC's Stock Option Committee.
5.5
VACATION. Employee shall be entitled to the greater of (a) 20
days
paid time off ("PTO") for each year of the Employment Term; and (b)
the number
of PTO days to which Employee would be entitled in accordance with
the Company's
PTO policy and years of service with the Company or it affiliates.
Employee
shall receive credit for his prior years of service to the Company
and its
predecessor in interest.
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5.6
EXPENSES. The Company shall, during the Employment Term,
reimburse
Employee for all reasonable travel, business entertainment and
other business
expenses incurred by Employee in rendering services under this
Agreement. Such
reimbursement shall be subject to compliance with the applicable
policies and
procedures established by the Company.
5.7 BOARD
OF DIRECTORS. During the Employment Term, Employee may serve,
or
select another person to serve, on the Board of Directors of the
Company. Upon
the termination of Employee's employment under this Agreement, the
director
selected by Employee shall resign from the Company's Board of
Directors.
6. TERMINATION. Employee's employment and this Agreement (except as
otherwise
provided hereunder) shall terminate upon the occurrence of any of
the following,
at the time set forth therefor (the "TERMINATION DATE"):
6.1 DEATH
OR DISABILITY. Immediately upon the death of Employee or a
determination by the Company that Employee has ceased to be able to
perform the
essential functions of his duties, with or without reasonable
accommodation, for
a period of not less than ninety (90) days, due to a mental or
physical illness
or incapacity (termination pursuant to this Section 6.1 being
referred to herein
as termination for "DEATH OR DISABILITY").
6.2
TERMINATION FOR GOOD REASON. Thirty (30) days following
Employee's
written notice to the Company of termination of employment as a
result of (a)
the Company's material breach of this Agreement or a material
breach of the
Merger Agreement (as hereinafter defined), if the Company fails to
cure such
breach within such thirty (30) day period, (b) a substantial
diminution not
consented to by Employee, in the nature or scope of Employee's
responsibilities,
authorities, powers, functions or duties, or (c) the Company's
principal
executive offices are moved outside, or if the Employee is
relocated outside the
geographic area consisting, of King County, Washington and the
counties
contiguous to King County, Washington ("GOOD REASON").
6.3
VOLUNTARY TERMINATION. Thirty (30) days following Employee's
written
notice to the Company of termination of employment other than for
Good Reason
("VOLUNTARY TERMINATION").
6.4
TERMINATION FOR CAUSE. Immediately following notice of termination
for
Cause (as hereinafter defined), which notice shall specify such
Cause, given by
the Company (termination pursuant to this Section 6.4 being
referred to herein
as termination for Cause). As used herein, "CAUSE" means (a)
termination based
on Employee's conviction or plea of "guilty" or "no contest" to any
crime
constituting a felony in the jurisdiction in which committed, any
crime
involving moral turpitude (whether or not a felony), or any other
crime
involving dishonesty or willful misconduct that materially injures
the Company
(whether or not a felony); (b) Employee's failure or refusal to
perform his
duties at all or in an acceptable manner as reasonably determined
in the sole
discretion of the Company, (c) Employee's failure or refusal to
follow the
lawful orders, advice, directions, policies, standards and
regulations of the
Company and its Chairman,
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as promulgated from time to time; (d) Employee's material breach of
this
Agreement; (e) misconduct by Employee that has or could discredit
or damage the
Company; (f) an act or acts of fraud or dishonesty by Employee
resulting in or
tending to result in gain to or personal enrichment of Employee at
the Company's
expense; (g) Employee's indictment for a felony violation of the
federal
securities laws; or (h) Employee's chronic absence from work for
reasons other
than illness.
6.5
TERMINATION WITHOUT CAUSE. Thirty (30) days following notice to
Employee of termination for any reason other than Cause,
notwithstanding any
other provisions contained herein, including, but not limited to
Section 4
above; provided, however, that during any such thirty (30) day
notice period,
the Company may suspend, with no reduction in pay or benefits,
Employee from his
duties as set forth herein (including, without limitation,
Employee's position
as a representative and agent of the Company) (termination pursuant
to this
Section 6.4 being referred to herein as termination "WITHOUT
CAUSE").
6.6
TERMINATION UPON CHANGE OF CONTROL. Upon notice to Employee of
termination within six (6) months following a change of control (as
defined
below) for any reason other than termination for Death or
Disability or
termination for Cause ("TERMINATION UPON CHANGE OF CONTROL").
As used in this Agreement, the term "change of control" means: (a)
a change of
ownership of 50% or more of the shares of voting stock of the
Company by any
person or group (other than a person or group including Employee or
with whom or
which Employee is affiliated), (b) the occurrence of a "change of
control"
required to be described under the proxy disclosure rules of the
Securities and
Exchange Commission or (c) any person or group is or becomes a
beneficial owner,
directly or indirectly, of securities of the Company representing
more than
fifty percent (50%) of the combined voting power of the
Company's
then-outstanding securities.
6.7 OTHER
REMEDIES. Termination pursuant to Section 6.4 above shall be in
addition to and without prejudice to any other right or remedy to
which the
Company may be entitled at law, in equity, or under this
Agreement.
7. SEVERANCE AND TERMINATION.
7.1
VOLUNTARY TERMINATION, TERMINATION FOR CAUSE, TERMINATION FOR DEATH
OR
DISABILITY. In the case of Employee's Voluntary Termination of
employment
hereunder in accordance with Section 6.3 above or a termination of
Employee's
employment hereunder for Cause in accordance with Section 6.4
above, (a)
Employee shall not be entitled to receive payment of, and the
Company shall have
no obligation to pay, any severance or similar compensation
attributable to such
termination, other than salary earned but unpaid, accrued but
unused vacation to
the extent required by the Company's policies, vested benefits
under any
employee benefit plan, and any unreimbursed expenses pursuant to
Section 5.6
hereof incurred by Employee as of the Termination Date, (b) the
Company will not
be obligated to make any further payments on the Earn-Out (as
defined in
Agreement and Plan of Merger dated July ___, 2005 by
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and among Standard Management Corporation, Rainier Acquisition
Corporation, the
Com
