Execution Copy
EXHIBIT 10.21
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of May 4, 2004, is
by and between IASIS Healthcare Corporation, a Delaware corporation (the
"Company"), and Xxxxx X. Xxxxx (the "Executive").
WHEREAS, after giving effect to the transactions (the "Transactions")
contemplated in the Agreement and Plan of Merger (the "Merger Agreement") by and
among the Company, IASIS Investment LLC (the "Purchaser") and Titan Acquisition
Corporation, the Company will become a wholly-owned subsidiary of Purchaser;
WHEREAS, the Executive has served as Chairman of the Board of Directors of
the Company (the "Board") and Chief Executive Officer of the Company pursuant to
an Employment Agreement with the Company, dated February 7, 2001 (the "Original
Employment Agreement");
WHEREAS, the Executive has experience beneficial to the Company's
operations, management and business development of acute care hospitals,
outpatient facilities and ancillary medical services (the "Business");
WHEREAS, upon and subject to the consummation of the Transactions, the
Company desires that the Executive continue to serve as Chairman of the Board
and Chief Executive Officer of the Company and the Executive desires to hold
such positions under the terms and conditions of this Agreement; and
WHEREAS, subject to, and effective as of immediately prior to the
consummation of the Transactions, the parties desire to enter into this
Agreement setting forth the terms and conditions of the employment relationship
of the Executive with the Company and desire that this Agreement shall supercede
the Original Employment Agreement.
NOW, THEREFORE, intending to be legally bound hereby, the parties agree as
follows:
1. Employment. The Company hereby employs the Executive and the
Executive hereby accepts employment with the Company, upon the terms and subject
to the conditions set forth herein.
2. Term.
(a) Subject to termination pursuant to Section 10 hereof, the term
of the employment by the Company of the Executive pursuant to this Agreement (as
the same may be extended, the "Term") shall commence subject to, and effective
as of, the Effective Time (as defined in the Merger Agreement) (the "Effective
Date"), and terminate on the fifth anniversary thereof. As of the time this
Agreement becomes effective, which shall be immediately prior to and subject to
the Effective Time, the parties acknowledge that the Original Employment
Agreement and all liabilities thereunder shall immediately terminate.
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(b) Commencing on the fourth anniversary of the Effective Date and
on each subsequent anniversary thereof, the Term shall automatically be extended
for a period of one (1) additional year following the expiration of the
otherwise applicable Term unless, not later than ninety (90) days prior to any
such anniversary date, either party hereto shall have notified the other party
hereto in writing that such extension shall not take effect.
3. Position; Location. During the Term, the Executive shall serve as
Chairman of the Board ("Chairman"), Chief Executive Officer of the Company and a
member of the compensation committee (or similar committee) of the Board (the
"Compensation Committee") (for so long as such Compensation Committee service is
permissible under any applicable laws and regulations, including any listing
standards of any securities exchange on which the Company's securities are
listed), supervising the conduct of the business and affairs of the Company and
performing such other duties as the Board shall determine, which duties shall
not be materially inconsistent with the duties to be performed by executives
holding similar offices in similarly-sized healthcare corporations. However,
upon an initial public offering of the Company's common shares ("IPO"), the
Board may determine that the Executive shall no longer serve as Chairman but
shall continue to serve as a director of the Board. The Executive shall report
directly to the Board. The Company agrees to nominate the Executive for a
position on the Board at each election of directors held during the Term, and
the Executive agrees to serve, without any additional compensation (other than
customary director fees paid or benefits conferred as and to the extent paid to
or conferred on members of the board of directors who are members of management
or designees of substantial stockholders of the Company), as a director on the
Board and the board of directors of any subsidiary of the Company, and/or in one
or more chief executive officer positions with any subsidiary of the Company.
The parties acknowledge and agree that during the Term (i) the Executive's
principal office will not be moved to a location more than 20 miles from
Metropolitan Nashville and Davidson County, Tennessee without his approval and
(ii) the Company shall maintain, in the organizational documents thereof,
indemnification provisions providing for the maximum indemnification permitted
by applicable law of the Executive by the Company for actions taken in his
capacity as an officer, director or employee thereof.
4. Duties. During the Term, the Executive shall devote substantially
all of his time and attention during normal business hours to the business and
affairs of the Company. Notwithstanding the foregoing, the Executive may serve
as a director of other entities, provided that such entities do not directly
compete with the Company in any material respect; and provided, further, that
the Executive may serve as a director of no more than three for profit entities
at any time.
5. Salary and Bonus.
(a) During the Term, the Company shall pay to the Executive a base
salary at the rate of $700,000 per year. Commencing on or before the first
anniversary of the Effective Date, the Board shall review the base salary
annually and may increase such amount from time to time as it may deem advisable
(such salary, as the same may be increased, the "Base Salary"). The Base Salary
shall be payable to the Executive in substantially equal installments in
accordance with the Company's normal payroll practices.
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(b) For the Company's fiscal year ending September 30, 2004, and
for each fiscal year thereafter during the Term, the Executive shall be eligible
to receive an annual cash target bonus (the "Bonus") of 100% of Base Salary (the
"Target") with a maximum annual bonus of two hundred percent (200%) of the Base
Salary, subject to the terms of the Company's executive bonus plan (the "Bonus
Plan") and subject to the satisfaction of certain performance objectives to be
determined by the Board (or a committee thereof) after consultation with the
Executive, or, to the extent more favorable to the Executive, other incentive
compensation plan established by the Board for the Company's senior executive
officers, as either of the same may be amended from time to time (provided that
no such amendment or alternative plan shall materially diminish the Target and
maximum bonus opportunity described above). For the 2004 fiscal year, the Bonus
shall be administered in accordance with the Company's Bonus Plan in effect
immediately prior to the Effective Time with the performance objectives set
forth in Annex 1. For fiscal years 2004 and 2005 the Company's earnings before
interest, taxes, depreciation and amortization ("EBITDA"), for purposes of
determining whether the Bonus Plan performance objectives are achieved, shall be
calculated in a manner that is consistent with past practices and without any
deduction for costs incurred by the Company in connection with the Transaction,
including any non-cash compensation expense incurred as a result of or in
connection with the Transaction. With respect to the 2005 fiscal year, the
Executive will receive a bonus of 20%, 100% or 200% of his Base Salary,
respectively, if 95%, 100% or 105% of the Company's budgeted EBITDA for fiscal
year 2005, respectively, is achieved. If the Company's EBITDA is between 95% and
105% of budgeted EBITDA for such year, the bonus will be calculated based on
straight-line interpolation. For the 2006 fiscal year and thereafter the Bonus
Plan will be administered by the Compensation Committee, and while Target and
maximum bonus levels will remain the same as described above, the performance
objectives will be set by the Compensation Committee after consultation with the
Executive. For purposes of this Agreement, the 2004 fiscal year shall mean the
twelve-month period ending September 30, 2004.
6. Stock Options. Upon the Effective Time, certain stock options held
by Executive in the Company shall be converted into options to purchase shares
of common and preferred stock in the Company and the letter evidencing the
rollover option attached hereto as Exhibit A (the "Rollover Option") shall be
delivered to and executed by the Executive at the same time as this Agreement
reflecting the terms and conditions of such converted options. Upon the
Effective Time, (i) the Company shall adopt the IASIS Healthcare Corporation
2004 Stock Option Plan, attached hereto as Exhibit B (the "2004 Stock Option
Plan"), (ii) Executive shall be issued options to acquire 2% of total
outstanding shares of the Company's primary common stock immediately after the
Effective Time, determined without regard to any options to acquire the
company's common stock, (the "New Option") pursuant to the 2004 Stock Option
Plan by delivery to and execution by the Executive and delivery to and execution
by the Company of the Stock Option Agreement attached hereto as Exhibit C and
(iii) Executive shall execute and deliver to the Company and the Company shall
execute and deliver to the Executive the Stockholders Agreement attached hereto
as Exhibit D. Thereafter during the Term, the Executive shall be eligible to
participate in the 2004 Stock Option Plan or, to the extent more favorable to
the Executive, other equity plans established by the Board for the Company's
senior executive officers, as the same may be amended from time to time
(provided that no such amendment shall materially diminish the benefits already
granted to Executive hereunder or thereunder), as and to the extent other senior
executive officers are eligible to participate in such equity plans.
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7. Vacation, Holidays and Sick Leave. During the Term, the Executive
shall be entitled to paid vacation, paid holidays and sick leave in accordance
with the Company's standard policies for its senior executive officers; provided
that the Executive shall during each year of the Term be entitled to at least
six (6) weeks of such vacation, which shall not accrue from year to year.
8. Business Expenses. The Executive shall be reimbursed for all
reasonable and necessary business expenses incurred by him in connection with
his employment (including, without limitation, expenses for travel and
entertainment incurred in conducting or promoting business for the Company) upon
timely submission by the Executive of receipts and other documentation in
accordance with the Company's normal expense reimbursement policies.
9. Other Benefits. During the Term, the Executive shall be eligible to
participate fully in all health and other employee benefit arrangements
available to senior executive officers of the Company generally.
10. Termination of Agreement. The Executive's employment by the Company
pursuant to this Agreement shall not be terminated prior to the end of the Term
hereof except as set forth in this Section 10.
(a) By Mutual Consent. The Executive's employment pursuant to this
Agreement may be terminated at any time by the mutual written agreement of the
Company and the Executive.
(b) Death. The Executive's employment pursuant to this Agreement
shall be terminated upon the death of the Executive, in which event the
Executive's spouse or heirs shall receive (i) all Base Salary and benefits to be
paid or provided to the Executive under this Agreement through the Date of
Termination (as defined in Section 10(h) hereof), (ii) an amount equal to one
hundred percent (100%) of the Executive's Base Salary at the then-current rate
of Base Salary and (iii) to the extent applicable, an amount equal to the pro
rata bonus (the "Pro Rata Bonus") determined by comparing the Company's actual
aggregate EBITDA for the period beginning on the first day of the fiscal year
during which the Date of Termination occurs and ending on the last day of the
month in which the Date of Termination occurs, (such period, the "Bonus
Measuring Period") with the aggregate budgeted EBITDA as reflected in the
monthly budgets prepared by the Company and accepted by the Board with respect
to such period. The Pro Rata Bonus shall be in an amount equal to the product of
(I) a fraction, the numerator of which equals the number of months in the Bonus
Measuring Period and the denominator of which equals twelve and (II) the bonus
set forth in the Bonus Plan for the fiscal year in which the Date of Termination
occurs, treating the Bonus Measuring Period as if it was the full fiscal year
for purposes of determining the Executive's bonus percentage. The parties
acknowledge that Annex 2 sets forth certain examples of the calculation of the
Pro Rata Bonus. In the event that the Executive's spouse or heirs are entitled
to receive a payment with respect to the Pro Rata Bonus, they shall also be
entitled to an additional severance amount equal to one hundred percent (100%)
of the Pro Rata Bonus. All of the payments required to be paid pursuant to this
paragraph 10(b) shall be paid to the Executive's spouse or heirs no later than
ten (10) days following the Date of Termination; provided, however, that any Pro
Rata Bonus and any additional severance amount related thereto shall be paid to
the Executive's spouse or heirs no
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later than five (5) days following the determination of the amount of such
payments, if any. The Company will also provide the Executive's eligible
dependents continued health and medical benefits as contemplated by Section 9
hereof through the date one (1) year after the Date of Termination; the Company
may satisfy this obligation by paying such dependents' health and medical
continuation coverage ("COBRA") premium payments (with the dependents paying the
portion of such COBRA payments that Executive was required to pay with respect
to such dependents prior to the Date of Termination). Additionally, in the event
the Executive's employment is terminated pursuant to this Section 10(b), all of
the Executive's options to purchase shares of capital stock of the Company
(including the New Option) which are unvested as of the Date of Termination but
otherwise scheduled to vest on the first vesting date scheduled to occur
following the Date of Termination, shall immediately vest and become exercisable
on the Date of Termination and all remaining unvested options shall terminate as
of the Date of Termination. In the event the Executive's employment is
terminated pursuant to this Section 10(b), all of the Executive's options to
purchase capital stock of the Company which are vested as of the Date of
Termination (other than the Rollover Option) or become vested pursuant to the
immediately preceding sentence may be exercised by the Executive's spouse or
heirs within one (1) year following the Date of Termination and shall then
terminate; provided, however, that in the event the Executive's spouse or heirs
are entitled to receive a payment with respect to the Pro Rata Bonus, all of
such vested options may be exercised by the Executive's spouse or heirs within
two (2) years following the Date of Termination and shall then terminate.
(c) Disability. The Executive's employment pursuant to this
Agreement may be terminated by written notice to the Executive by the Company or
to the Company by the Executive in the event that (i) the Executive becomes
unable to perform his duties as set forth in Section 3 by reason of physical or
mental illness or accident for any six (6) consecutive month period or (ii) the
Company receives written opinions from both a physician for the Company and a
physician for the Executive that the Executive will be so disabled. In the event
the Executive's employment is terminated pursuant to this Section 10(c), the
Executive shall be entitled to receive (A) all Base Salary and benefits to be
paid or provided to the Executive under this Agreement through the Date of
Termination, (B) an amount equal to one hundred percent (100%) of the
Executive's Base Salary at the then-current rate of Base Salary; provided,
however, that in the event the Date of Termination is the date of delivery of
the last physician's opinion referred to in Section 10(c)(ii), the payment with
respect to Base Salary, together with all Base Salary paid to the Executive
following the first date that Executive was unable to perform his duties set
forth in Section 3, shall equal one hundred and fifty percent (150%) of
Executive's Base Salary and; provided, further, that amounts payable to the
Executive under this Section 10(c) shall be reduced by the proceeds of any short
or long-term disability payments to which the Executive may be entitled during
such period under policies maintained at the expense of the Company as and to
the extent such disability payments compensate the insured for lost wages
resulting from the disability, and (C) to the extent applicable, an amount equal
to the Pro Rata Bonus. In the event that the Executive is entitled to receive a
payment with respect to the Pro Rata Bonus, he shall also be entitled to an
additional severance amount equal to one hundred percent (100%) of the Pro Rata
Bonus. All of the payments required to be paid pursuant to this Section 10(c)
shall be paid to the Executive no later than ten (10) days following the Date of
Termination; provided, however, that any Pro Rata Bonus and any additional
severance amount related thereto shall be paid to the Executive no later than
five (5) days following the determination of the amount of such payments, if
any. The Company will also provide the
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Executive and his eligible dependents continued health and medical benefits as
contemplated by Section 9 hereof through the date one (1) year after the Date of
Termination (provided, however, that in the event that the Date of Termination
is the date of delivery of the last physician's opinion referred to in Section
10(c)(ii), the Company will provide such health and medical benefits through the
date that is eighteen (18) months following the first date that Executive was
unable to perform his duties as set forth in Section 3); the Company may satisfy
this obligation by paying COBRA premium payments with respect to Executive and
his eligible dependents (with the Executive paying the portion of such COBRA
payments that Executive was required to pay prior to the Date of Termination).
Additionally, in the event the Executive's employment is terminated pursuant to
this Section 10(c), all of the Executive's options to purchase shares of capital
stock of the Company (including the New Option) which are unvested as of the
Date of Termination but otherwise scheduled to vest on the first vesting date
scheduled to occur following the Date of Termination, shall immediately vest and
become exercisable on the Date of Termination and all remaining unvested options
shall terminate as of the Date of Termination. In the event the Executive's
employment is terminated pursuant to this Section 10(c), all of the Executive's
options to purchase capital stock of the Company which are vested as of the Date
of Termination (other than the Rollover Option) or become vested pursuant to the
immediately preceding sentence may be exercised by the Executive within one (1)
year following the Date of Termination and shall then terminate; provided,
however, that in the event that the Executive is entitled to receive a payment
with respect to the Pro Rata Bonus, all of such vested options may be exercised
by the Executive within two (2) years following the Date of Termination and
shall then terminate.
(d) By the Company for Cause. The Executive's employment pursuant
to this Agreement may be terminated by written notice to the Executive ("Notice
of Termination") upon the occurrence of any of the following events (each of
which shall constitute "Cause" for termination): (i) the Executive commits any
act of gross negligence, fraud or willful misconduct causing material harm to
the Company, (ii) the conviction of the Executive of a felony that would
reasonably be expected by the Board to adversely affect the Company or its
reputation, (iii) the Executive intentionally obtains material personal gain,
profit or enrichment at the expense of the Company or from any transaction in
which the Executive has an interest which is adverse to the interest of the
Company, unless the Executive shall have obtained the prior written consent of
the Board, or (iv) any material breach of the Executive of this Agreement,
including, without limitation, a material breach of Section 14 hereof, which
breach remains uncorrected for a period of fifteen (15) days after receipt by
the Executive of written notice from the Company setting forth the breach. In
the event the Executive's employment is terminated pursuant to this Section
10(d), the Executive shall be entitled to receive all Base Salary and benefits
to be paid or provided to the Executive under this Agreement through the Date of
Termination and no more.
(e) By the Company Without Cause. The Executive's employment
pursuant to this Agreement may be terminated by the Company at any time without
Cause by delivery of a Notice of Termination to the Executive. In the event that
the Executive's employment is terminated pursuant to this Section 10(e), the
Executive shall be entitled to receive (i) all Base Salary and benefits to be
paid or provided to the Executive under this Agreement through the Date of
Termination, (ii) an amount equal to two hundred percent (200%) of the
Executive's Base Salary at the then-current rate of Base Salary, (iii) to the
extent applicable, an amount equal to the Pro Rata Bonus, (iv) in the event that
the Executive is entitled to receive a payment with
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respect to the Pro Rata Bonus, a severance amount equal to two hundred percent
(200%) of the Pro Rata Bonus and (v) a lump sum payment equal to the then
present value of all major medical, disability and life insurance coverage to be
provided pursuant to Section 9 above through the date two (2) years after the
Date of Termination, provided that under such circumstances the Executive shall
make all COBRA premium payments on his own behalf. The sum of the amounts
described in clauses (ii), (iv) and (v) above are hereafter referred to as the
"Section 10(e) Severance Amount." All of the amounts described in clauses (i)
and (iii) shall be paid to the Executive no later than ten (10) days following
the Date of Termination; provided that any amount payable under clause (iii)
shall be paid to the Executive no later than five (5) days following the
determination of the amount of such payment, if any. All of the Section 10(e)
Severance Amount shall be paid to the Executive no later than ten (10) days
following the later of (x) the Date of Termination and (y) the execution of an
agreement by the Executive, in form and substance reasonably satisfactory to the
Company, providing for (I) a full release by the Executive of the Company, its
officers, directors, representatives and affiliates from all liabilities,
obligations or claims, other than those obligations specifically provided in
this Section 10(e) (and the Company shall provide a mutual release of the
Executive), (II) an affirmation of the Executive's obligations pursuant to
Section 14 hereof and (III) an agreement by the Executive to immediately repay
to the Company one hundred percent (100%) of the Section 10(e) Severance Amount
upon any breach of such agreement; provided, however, that any Section 10(e)
Severance Amount payable pursuant to Section 10(e)(iv) shall be paid to the
Executive no later than five (5) days following the determination of the amount
of such payments, if any. Additionally, in the event that the Executive's
employment is terminated pursuant to this Section 10(e), all of the Executive's
options to purchase shares of capital stock of the Company (including the New
Option) which are unvested as of the Date of Termination but otherwise scheduled
to vest on the first vesting date scheduled to occur following the Date of
Termination, shall immediately vest and become exercisable on the Date of
Termination and all remaining unvested options shall terminate as of the Date of
Termination. In the event the Executive's employment is terminated pursuant to
this Section 10(e), all of the Executive's options to purchase capital stock of
the Company that are vested as of the Date of Termination (other than the
Rollover Option) or become vested pursuant to the immediately preceding sentence
may be exercised by the Executive within one (1) year following the Executive's
Date of Termination and shall then terminate; provided, however, that in the
event the Executive is entitled to receive a payment with respect to the Pro
Rata Bonus, all of such vested options may be exercised by the Executive within
two (2) years following the Date of Termination and shall then terminate.
(f) By the Executive for Good Reason. The Executive's employment
pursuant to this Agreement may be terminated by the Executive by written notice
of his resignation ("Notice of Resignation") delivered within twelve (12) months
after the occurrence of any of the following events (each of which shall
constitute "Good Reason" for resignation): (i) the one-year anniversary of the
date of any Change of Control (as defined below) unless the acquirer is in the
healthcare facilities business, in which case the one-year anniversary shall be
reduced to six months after the date of the Change in Control, (ii) the removal
of the Executive from or the failure to elect or re-elect the Executive to the
position of Chairman (other than a removal or failure to elect Executive as
Chairman after an IPO) and Chief Executive Officer of the Company, provided that
the appointment of a non-executive chairman following a Transaction (as defined
in the Option Grant Agreement attached hereto as Exhibit C) or a
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Change in Control shall not constitute grounds for Good Reason hereunder (iii)
the removal of the Executive from or the failure to elect or re-elect the
Executive to the Board, (iv) any material reduction by the Company of the
Executive's duties or responsibilities (other than his duties or
responsibilities as Chairman after an IPO and other than his service on the
Compensation Committee to the extent not permissible as described in Section 3)
or the assignment to the Executive of duties materially inconsistent with such
position or (v) any breach by the Company of this Agreement (including the
provisions of Section 3), which breach remains uncorrected for a period of
fifteen (15) days after receipt by the Company of written notice from the
Executive. In the event that the Executive resigns for Good Reason pursuant to
this Section 10(f), the Executive shall be entitled to receive, (A) all Base
Salary and benefits to be paid or provided to the Executive under this Agreement
through the Date of Termination, (B) an amount equal to two hundred percent
(200%) of the Executive's Base Salary at the then-current rate of Base Salary,
(C) to the extent applicable, an amount equal to the Pro Rata Bonus, (D) in the
event that the Executive is entitled to receive a payment with respect to the
Pro Rata Bonus, a severance amount equal to two hundred percent (200%) of the
Pro Rata Bonus and (E) a lump sum payment equal to the then present value of all
major medical, disability and life insurance coverage to be provided pursuant to
Section 9 above through the date two (2) years after the Date of Termination,
provided that under such circumstances the Executive shall make all COBRA
premium payments on his own behalf. The sum of the amounts described in clauses
B, D and E above are hereafter referred to as the "Section 10(f) Severance
Amount." All of the amounts described in clauses (A) and (C) shall be paid to
the Executive no later than ten (10) days following the Date of Termination;
provided that any amount payable under clause (C) shall be paid to the Executive
no later than five (5) days following the determination of the amount of such
payment, if any. All of the Section 10(f) Severance Amount shall be paid to the
Executive no later than ten (10) days following the later of (x) the Date of
Termination and (y) the execution of an agreement by the Executive, in form and
substance reasonably satisfactory to the Company, providing for (I) a full
release by the Executive of the Company, its officers, directors,
representatives and affiliates from all liabilities, obligations or claims,
other than those obligations specifically provided in this Section 10(f) (and
the Company shall provide a mutual release of the Executive), (II) an
affirmation of the Executive's obligations pursuant to Section 14 hereof and
(III) an agreement by the Executive to immediately repay to the Company one
hundred percent (100%) of the Section 10(f) Severance Amount upon any breach of
such agreement; provided, however, that any Section 10(f) Severance Amount
payable under Section 10(f)(D) shall be paid to the Executive no later than five
(5) days following the determination of the amount of such payments, if any.
Additionally, in the event that the Executive's employment is terminated
pursuant to this Section 10(f) other than in the case of a Change in Control,
all of the Executive's options to purchase shares of capital stock of the
Company (including the New Option) which are unvested as of the Date of
Termination but otherwise scheduled to vest on the first vesting date scheduled
to occur following the Date of Termination, shall immediately vest and become
exercisable on the Date of Termination and all remaining unvested options shall
terminate as of the Date of Termination. In the event the Executive's employment
is terminated pursuant to this Section 10(f), all of the Executive's options to
purchase capital stock of the Company that are vested as of the applicable Date
of Termination (other than the Rollover Option) or become vested pursuant to the
immediately preceding sentence may be exercised by the Executive within one (1)
year following the Executive's Date of Termination and shall then terminate;
provided, however, that in the event the Executive is entitled to receive a
payment
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with respect to the Pro Rata Bonus, all of such vested options may be exercised
by the Executive within two (2) years following the Date of Termination and
shall then terminate.
For purposes of this Agreement, a "Change in Control" shall
mean any transactions or series of related transactions pursuant to which any
Person (as defined in Section 13(d)(3) or 14(d)(2) of the Securities and
Exchange Act of 1934, as amended from time to time (the "Exchange Act")) or
"group" of Persons (as defined in Section 13(d) of the Exchange Act), (other
than TPG Partners IV, LP and the other parties to the operating agreement of
IASIS Investment LLC, a Delaware limited liability company, on the Effective
Time or their respective affiliates), in the aggregate, directly or indirectly,
acquires beneficially or of record, (i) equity of a Designated Person, as
hereinafter defined, possessing the voting power to elect a majority of the
Designated Person's governing body (whether by merger, consolidation,
reorganization, combination, sale or transfer of equity, stockholder or voting
agreement, proxy, power of attorney or otherwise) or (ii) all or substantially
all of a Designated Person's assets. For purposes of this Agreement, Designated
Person shall mean IASIS Investment LLC and the Company. Notwithstanding the
foregoing, in no event will a Change in Control occur as a result of the initial
public offering of the Company's shares of common stock or any secondary
offering to the public.
(g) By the Executive Without Good Reason or Executive's Failure to
Extend Term. The Executive's employment pursuant to this Agreement may be
terminated by the Executive at any time by delivery of a Notice of Resignation
to the Company or by the Executive providing notice to the Company of his intent
not to extend the Term for any additional period as provided in Section 2(b). In
the event that the Executive's employment is terminated pursuant to this Section
10(g), the Executive shall receive all Base Salary and benefits to be paid or
provided to the Executive under this Agreement through the Date of Termination
and no more.
(h) Date of Termination. The Executive's Date of Termination shall
be (i) if the Executive's employment is terminated pursuant to Section 10(b),
the date of his death, (ii) if the Executive's employment is terminated pursuant
to Section 10(c), the last day of the six-month period referred to in Section
10(c)(i) or the date of delivery of the last physician's opinion referred to in
Section 10(c)(ii), as the case may be, (iii) if the Executive's employment is
terminated pursuant to Section 10(d), the date on which a Notice of Termination
is given, (iv) if the Executive's employment is terminated pursuant to Section
10(e), sixty (60) days after the date the Notice of Termination is given;
provided, however, that the Company may waive such notice in the event of a
termination pursuant to Section 10(e) in which event, the Executive's Date of
Termination shall be five (5) days after the Notice of Termination, (v) if the
Executive's employment is terminated pursuant to Section 10(f), five (5) days
after the date the Notice of Resignation is given, (vi) if the Executive's
employment is terminated pursuant to Section 10(g) (other than as a result of
Executive's failure to extend the Term), one hundred twenty (120) days after the
date the Notice of Resignation is given or such shorter period as may be
determined by the Company and (vii) if the Company or Executive provides notice
of its or his intent not to extend the Term for any additional period as
provided in Section 2(b), the expiration of the Term.
(i) Company's Failure to Extend Term. In the event the Company
provides notice of its intent not to extend the Term for any additional period
as provided in Section 2(b)
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and the Executive is not then in violation of Section 14 hereof, the Executive
shall be entitled to receive (i) all Base Salary and benefits to be paid or
provided to the Executive under this Agreement through the Date of Termination;
(ii) an amount equal to one hundred percent (100%) of the Executive's Base
Salary at the then-current rate of Base Salary; (iii) to the extent applicable,
an amount equal to the Pro Rata Bonus; (iv) in the event that the Executive is
entitled to receive a payment with respect to the Pro Rata Bonus, an additional
severance amount equal to one hundred percent (100%) of the Pro Rata Bonus; and
(v) a lump sum payment equal to the then present value of all major medical,
disability and life insurance coverage to be provided pursuant to Section 9
above through the date one (1) year after the Date of Termination, provided that
under such circumstances the Executive shall make all COBRA premium payments on
his own behalf. The sum of the amounts described in clauses (ii), (iv) and (v)
above are hereafter referred to as the "Section 10(i) Severance Amount." All of
the amounts described in clauses (i) and (iii) shall be paid to the Executive no
later than ten (10) days following the Date of Termination; provided that any
amount payable under clause (iii) shall be paid to the Executive no later than
five (5) days following the determination of the amount of such payment, if any.
All of the Section 10(i) Severance Amount shall be paid to the Executive no
later than ten (10) days following the later of (x) the Date of Termination and
(y) the execution of an agreement by the Executive, in form and substance
reasonably satisfactory to the Company, providing for (I) a full release by the
Executive of the Company, its officers, directors, representatives and
affiliates from all liabilities, obligations or claims, other than those
obligations specifically provided in this Section 10(i) (and the Company shall
provide a mutual release of the Executive), (II) an affirmation of the
Executive's obligations pursuant to Section 14 hereof and (III) an agreement by
the Executive to immediately repay to the Company one hundred percent (100%) of
the Section 10(i) Severance Amount upon any breach of such agreement; provided,
however, that any Section 10(i) Severance Amount payable under Section 10(i)(iv)
shall be paid to the Executive no later than five (5) days following the
determination of the amount of such payments, if any. Additionally, in the event
that the Executive's employment is terminated under this Section 10(i), all of
the Executive's options to purchase shares of capital stock of the Company which
are unvested as of the expiration of the Term but otherwise scheduled to vest on
the first vesting date scheduled to occur following the expiration of the Term,
shall immediately vest and become exercisable upon the expiration of the Term
and all remaining unvested options shall terminate as of such date. In the event
the Executive's employment is terminated pursuant to this Section 10(i), all of
Executive's options to purchase capital stock of the Company that are vested as
of the expiration of the Term (other than the Rollover Option) or become vested
pursuant to the immediately preceding sentence may be exercised by the Executive
at any time within one (1) year following the expiration of the Term and shall
then terminate; provided, however, that in the event the Executive is entitled
to receive a payment with respect to the Pro Rata Bonus, all of such vested
options may be exercised by the Executive within two (2) years following the
Date of Termination and shall then terminate.
11. Excise Tax.
(a) The parties hereto agree to reasonably cooperate with each
other to minimize any taxes that may be imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") which may include, at the
Executive's election, the Executive waiving a portion of his payment unless
approved by the shareholders. Notwithstanding the foregoing, whether or not the
Executive becomes entitled to any payments hereunder, if any of
10
the payments or benefits received or to be received by the Executive in
connection with a Change in Control or the Executive's termination of employment
pursuant to the terms of this Agreement or the Company's Stock Option Plans (all
such payments and benefits, excluding the Gross-Up Payment, being hereinafter
referred to as the "Total Payments") will be subject to excise tax imposed by
section 4999 of the Code, or any interest or penalties are incurred by Executive
with respect to such excise tax (such excise tax together with any such interest
and penalties are hereinafter collectively referred to as the "Excise Tax"), the
Company shall pay to the Executive an additional amount (the "Gross-Up Payment")
such that the net amount retained by the Executive, after deduction of any
Excise Tax on the Total Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up Payment, shall be equal to the
Total Payments.
(b) For purposes of determining whether any of the Total Payments
will be subject to the Excise Tax and the amount of such Excise Tax, (I) all of
the Total Payments shall be treated as "parachute payments" (within the meaning
of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel ("Tax
Counsel") selected by the Company and reasonably acceptable to the Executive,
such payments or benefits (in whole or in part) do not constitute parachute
payments, including by reason of section 280G(b)(4)(A) of the Code, and (ii) all
"excess parachute payments" within the meaning of section 280G(b)(l) of the Code
shall be treated as subject to the Excise Tax unless, in the opinion of Tax
Counsel, such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered (within the meaning of
section 280G(b)(4)(B) of the Code) in excess of the Base Amount allocable to
such reasonable compensation, or are otherwise not subject to the Excise Tax.
For purposes of determining the amount of the Gross-Up Payment, the Executive
shall be deemed to pay federal income tax at the highest marginal rate of
federal income taxation in the calendar year in which the Gross-Up Payment is to
be made and state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Executive's residence on the Date of
Termination (or if there is no Date of Termination, then the date on which the
Gross-Up Payment is calculated for purposes of this Section 11), net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes.
(c) In the event that the Excise Tax is finally determined to be
less than the amount taken into account hereunder in calculating the Gross-Up
Payment, the Executive shall repay to the Company, within five (5) business days
following the time that the amount of such reduction in the Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment attributable to the Excise
Tax and federal, state and local income and employment taxes imposed on the
Gross-Up Payment being repaid by the Executive), to the extent that such
repayment results in a reduction in the Excise Tax and a dollar-for-dollar
reduction in the Executive's taxable income and wages for purposes of federal,
state and local income and employment taxes, plus interest on the amount of such
repayment at 120% of the rate provided in section 1274(b)(2)(B) of the Code. In
the event that the Excise Tax is determined, in accordance with the procedures
set forth in Section 11(d) below, to exceed the amount taken into account
hereunder in calculating the Gross-Up Payment, the matter shall be determined in
accordance with the procedures set forth in Section 11(d) below. The Executive
and the Company shall each reasonably cooperate with the other in connection
with any administrative or judicial proceedings concerning the existence or
amount of liability for Excise Tax with respect to the Total Payments.
11
(d) Executive shall notify the Company in writing of any claims by
the Internal Revenue Service that, if successful, would require the payment by
the Company of an additional Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than thirty (30) calendar days after
Executive actually receives notice in writing of such claim and shall apprise
the Company of the nature of such claim and the date on which such claim is
requested to be paid; provided, however, that the failure of Executive to notify
the Company of such claim (or to provide any required information with respect
thereto) shall not affect any rights granted to the Executive under this Section
except to the extent that the Company is materially prejudiced in the defense of
such claim as a direct result of such failure. Executive shall not, unless
otherwise required by the Internal Revenue Service, pay such claim prior to the
expiration of the 30-day period following the date on which he gives such notice
to the Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies Executive in
writing prior to the expiration of such 30-day period that it desires to contest
such claim, the Executive shall:
(1) give the Company any information reasonably requested by
the Company relating to such claim;
(2) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time
to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney selected by
the Company and reasonably acceptable to Executive;
(3) cooperate with the Company in good faith in order
effectively to contest such claim; and
(4) if the Company elects not to assume and control the
defense of such claim, permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any additional Excise Tax or income tax (including interest
and penalties with respect thereto) imposed as a result of such representation
and payment of costs and expenses, without, however, any duplication of the
previously paid Gross-Up Payments. Without limiting the foregoing provisions of
this paragraph, the Company shall have the right, at its sole option, to assume
the defense of and control all proceedings in connection with such contest, in
which case it may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may either direct the Executive to pay the tax claimed and xxx
for a refund or contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs the Executive to pay such claim and xxx for a refund, the Company shall
advance the amount of such payment to the Executive, on an interest-free basis
and shall indemnify and hold the Executive harmless, on an after-tax basis, from
any additional Excise Tax or income tax (including interest or penalties with
respect thereto) imposed with
12
respect to such advance or with respect to any imputed income with respect to
such advance, without, however, any duplication of the previously paid Gross-Up
Payments; and provided, further, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's right to assume the
defense of and control the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder, and Executive shall be
entitled to settle or contest, as the case maybe, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(e) The payments provided in this Section 11 shall be made not
later than the fifth (5th) day following the Date of Termination (or if there is
no Date of Termination, then the date on which the Gross-up Payment is
calculated for purposes of this Section 11); provided, however, that if the
amounts of such payments cannot be finally determined on or before such day, the
Company shall pay to the Executive on such day an estimate, in accordance with
this Section 11, of the minimum amount of such payments to which the Executive
is clearly entitled and shall pay the remainder of such payments (together with
interest on the unpaid remainder (or on all such payments to the extent the
Company fails to make such payments when due) at 120% of the rate provided in
section l274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined but in no event later than the thirtieth (30th) day after the Date of
Termination. In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall constitute a
loan by the Company to the Executive, payable on the fifth (5th) business day
after demand by the Company (together with interest at 120% of the rate provided
in section l274(b)(2)(B) of the Code).
(f) This Agreement and the equity awards described in Section 6
herein shall be approved by the stockholders of the Company in accordance with
Section 280G of the Code and Treas. Reg. 1.280G-1 Q/A-7 and if such approval is
not obtained prior to the Effective Time, this Agreement shall become null and
void on the Effective Time.
12. Representations.
(a) The Company represents and warrants that this Agreement has
been authorized by all necessary corporate action of the Company and is a valid
and binding agreement of the Company enforceable against it in accordance with
its terms.
(b) The Executive represents and warrants that he is not a party
to any agreement or instrument, which would prevent him from entering into or
performing his duties in any way under this Agreement, and that this is a valid
and binding agreement of the Executive enforceable against him in accordance
with its terms.
13. Assignment; Binding Agreement. This Agreement is a personal contract
and the rights and interests of the Executive hereunder may not be sold,
transferred, assigned, pledged, encumbered, or hypothecated by him, except as
otherwise expressly permitted by the provisions of this Agreement. This
Agreement shall inure to the benefit of and be enforceable by the Executive and
his personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If the Executive should die while
any amount would still be payable to him hereunder had the Executive continued
to live, all such amounts, unless otherwise
13
provided herein, shall be paid in accordance with the terms of this Agreement to
his devisee, legatee or other designee or, if there is no such designee, to his
estate.
14. Confidentiality; Non-Competition; Ownership of Works.
(a) The Executive acknowledges that: (i) the Business is intensely
competitive and that the Executive's employment by the Company will require that
the Executive have access to and knowledge of confidential information of the
Company relating to the Business, including, but not limited to, the identity of
the Company's employees, physicians, payors or suppliers, the kinds of services
provided by the Company, the manner in which such services are performed or
offered to be performed, the service needs of actual or prospective patients,
physicians or payors, pricing information and other contractual terms,
information concerning the creation, acquisition or disposition of products and
services, creative ideas and concepts, including clinical and financial systems,
compliance programs and physician relation and retention programs, computer
software applications and other programs, research data, personnel information
and other trade secrets, in each case other than as and to the extent such
information is generally known or publicly available through no violation of
this Section 14 by the Executive or such information is readily discernible (the
"Confidential Information"); (ii) the disclosure of any such Confidential
Information may place the Company at a competitive disadvantage and may do
damage, monetary or otherwise, to the Company's business; and (iii) the engaging
by the Executive in any of the activities prohibited by this Section 14 may
constitute improper appropriation and/or use of such Confidential Information.
The Executive expressly acknowledges the trade secret status of the Confidential
Information and that the Confidential Information constitutes a protectable
business interest in the Company. Accordingly, the Company and the Executive
agree as follows:
(b) For purposes of this Section 14, the Company shall be
construed to include the Company and its parents and subsidiaries engaged in the
Business, including any divisions managed by the Executive.
(c) During the Executive's employment with the Company, and at all
times after the termination of the Executive's employment by expiration of the
Term or otherwise, the Executive shall not, directly or indirectly, whether
individually, as a director, stockholder, owner, partner, employee, principal or
agent of any business, or in any other capacity, make known, disclose, furnish,
make available or utilize any of the Confidential Information, other than in the
proper performance of the duties contemplated herein, or as expressly permitted
herein, or as required by a court of competent jurisdiction or other
administrative or legislative body, provided that the Executive shall promptly
notify the Company so that the Company may seek a protective order or other
appropriate remedy. The Executive agrees to return all documents or other
materials containing Confidential Information, including all photocopies,
extracts and summaries thereof, and any such information stored electronically
on tapes, computer disks or in any other manner to the Company at any time upon
request by the Company and immediately upon the termination of his employment
for any reason.
(d) For a period of two (2) years following the Executive's Date
of Termination (or one (1) year following the expiration of the Term in the case
of the Company's delivery of notice of its intent not to extend the Term for any
additional period as provided in
14
Section 2(b)), whether upon expiration of the Term or otherwise, the Executive
shall not engage in Competition, as defined below, with the Company or its
subsidiaries within twenty-five (25) miles of the location of any hospital
managed by the Company (or other facility managed by the Company from which in
excess of five percent (5%) of the Company's annual revenues are derived) at the
time of, or within six (6) months prior to, the Executive's Date of Termination
or the expiration of the Term, as applicable (each, an "Affected Facility"), or
in which, during the three (3) month period immediately prior to the Executive's
Date of Termination or the expiration of the Term (as applicable), the Company
had made substantial plans with the intention of establishing operations in such
locality or region. For purposes of this Agreement, "Competition" by the
Executive shall mean the Executive's engaging in any activities relating to, or
otherwise directly or indirectly being employed by or acting as a consultant or
lender to, or being a director, officer, employee, principal, agent,
stockholder, member, owner or partner of, or permitting his name to be used in
connection with the activities of any entity engaged in significant activities
relating to, the Business. Notwithstanding the foregoing, it shall not be a
violation of this paragraph for the Executive to (ii) be a consultant to, or a
director, officer, employee, or agent of, any entity engaged in the Business
which has hospitals or other facilities within twenty-five (25) miles of any
Affected Facility, so long as the Executive does not provide any services or
advice to, or have any management supervision of, or responsibility for, any
hospital or other facility located within twenty-five (25) miles of any Affected
Facility; or (ii) become the registered or beneficial owner of up to five
percent (5%) of any class of the capital stock of any one or more competing
corporations registered under the Securities Exchange Act of 1934, as amended,
provided that the Executive does not actively participate in the business of
such corporation until such time as this covenant expires. In the event that the
Executive breaches the restrictions set forth in Section 14(d) following a
termination pursuant to Section 10(e), 10(f) or 10(i), the Executive shall pay
the Company "Liquidated Damages" (as hereinafter defined) within ten (10) days
following any such breach. If Executive's employment is terminated pursuant to
Section 10(e), 10(f) or 10(i) and the Executive has repaid the full amount of
the Liquidated Damages as provided pursuant to the immediately preceding
sentence, the Company shall not be entitled to any remedy, including, without
limitation, additional damages or injunctive relief, upon Executive's breach of
Section 14(d). "Liquidated Damages" shall mean the Section 10(e) Severance
Amount, Section 10(f) Severance Amount or Section 10(i) Severance Amount
received by the Executive, as the case may be.
(e) For a period of two (2) years following the Executive's Date
of Termination (or one (1) year following the expiration of the Term in the case
of the Company's delivery of notice of its intent not to extend the Term for any
additional period as provided in Section 2(b)), whether upon expiration of the
Term or otherwise, the Executive agrees that he will not, directly or
indirectly, for his benefit or for the benefit of any other person, firm or
entity, do any of the following:
(i) solicit from any physician or physician group doing
business with the Company as of the Executive's termination, business of
the same or of a similar nature to the business of the Company with such
physician or physician group;
(ii) solicit from any known potential physician group
business of the same or of a similar nature to that which has been the
subject of a known written or oral bid, offer or proposal by the Company,
or of substantial preparation with a view to
15
making such a bid, proposal or offer, within six (6) months prior to the
Executive's termination; or
(iii) recruit or solicit the employment or services of any
person who was employed by the Company upon termination of the Executive's
employment and is employed by the Company at the time of such recruitment
or solicitation.
(f) The Executive will make full and prompt disclosure to the
Company of all inventions, improvements, formulas, data, programs, processes,
ideas, concepts, discoveries, methods, developments, software, and works of
authorship, whether or not copyrightable, trademarkable or patentable, which
relate to the actual or anticipated business, activities or research of the
Company and either (i) are created, made, conceived or reduced to practice by
the Executive, either alone, under his direction or jointly with others during
the period of his employment with the Company, (ii) result from or are suggested
by work performed by the executive for the Company or (iii) result, to any
extent, from use of the Company's premises or property (all of which are
collectively referred to in this Agreement as "Works"). All Works shall be the
sole property of the Company, and, to the extent that the Company is not already
considered the owner thereof as a matter of law, the Executive hereby assigns to
the Company, without further compensation, all his right, title and interest in
and to such Works and any and all related intellectual property rights
(including, but not limited to, patents, patent applications, copyrights,
copyright applications, and trademarks) in the United States and elsewhere.
(g) The Executive acknowledges that the services to be rendered by
him to the Company are of a special and unique character, which gives this
Agreement a peculiar value to the Company, the loss of which may not be
reasonably or adequately compensated for by damages in an action at law, and
that a breach or threatened breach by him of any of the provisions contained in
this Section 14 may cause the Company irreparable injury. The Executive
therefore agrees that the Company may be entitled, in addition to any other
right or remedy, to a temporary, preliminary and permanent injunction, without
the necessity of proving the inadequacy of monetary damages or the posting of
any bond or security, enjoining or restraining the Executive from any such
violation or threatened violations.
(h) If any one or more of the provisions contained in this
Agreement shall be held to be excessively broad as to duration, activity or
subject, such provisions shall be construed by limiting and reducing them so as
to be enforceable to the fullest extent permitted by law.
15. Entire Agreement. This Agreement contains all the understandings
between the parties hereto pertaining to the matters referred to herein, and
supersedes any other undertakings and agreements, whether oral or in writing,
previously entered into by them with respect thereto. The Executive represents
that, in executing this Agreement, he does not rely and has not relied upon any
representation or statement not set forth herein made by the Company with regard
to the subject matter or effect of this Agreement or otherwise.
16. Amendment or Modification Waiver. No provision of this Agreement may
be amended or waived, unless such amendment or waiver is agreed to in writing,
signed by the Executive and by a duly authorized officer of the Company. No
waiver by any party hereto of any breach by another party hereto of any
condition or provision of this Agreement to be
16
performed by such other party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same time, any prior time or any
subsequent time.
17. Expenses. Each party shall bear its own expenses in connection with
the negotiation, execution, delivery and performance of this Agreement and the
resolution of any disputes hereunder; provided, however, that the Company shall
pay the Executive's reasonable legal costs and expenses incurred in connection
with the negotiation, execution and delivery of this Agreement.
18. Notices. Any notice to be given hereunder shall be in writing and
shall be deemed given when delivered personally, sent by courier or facsimile or
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other
address as such party may subsequently give notice hereunder in writing:
To the Executive at:
0000 Xxxxxxx-Xxxxxxxxxxxx Xxxx
Xxxxxxx Xxxxxxx, XX 00000
With copies to:
Xxxxxx Xxxxxxx Xxxxxx & Xxxxx
Xxxxxxxxx Xxxx Xxxxxx
X.X. Xxx 000000
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx, Esquire
To the Company at:
IASIS Healthcare Corporation
000 Xxxxxxxx Xxxx
Xxxxx X-000
Xxxxxxxx, XX 00000
Attention: General Counsel
With copies to Purchaser at:
IASIS Investment LLC
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
and
17
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esquire
Any notice delivered personally or by courier under this Section 18
shall be deemed given on the date delivered and any notice sent by facsimile or
registered or certified mail, postage prepaid, return receipt requested, shall
be deemed given on the date transmitted by facsimile or three business days
after it is mailed.
19. Severability. If any provision of this Agreement or the application
of any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable, shall not be affected thereby, and each provision
hereof shall be validated and shall be enforced to the fullest extent permitted
by law.
20. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
21. Governing Law; Venue. This Agreement will be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of law thereof.
22. Headings. All descriptive headings of sections and paragraphs in
this Agreement are intended solely for convenience, and no provision of this
Agreement is to be construed by reference to the heading of any section or
paragraph.
23. Withholding. All payments to the Executive under this Agreement
shall be reduced by all applicable withholding required by federal, state or
local law.
24. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
[SIGNATURE PAGE FOLLOWS)
18
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement on May 4, 2004 to be effective as of the Effective Date.
IASIS HEALTHCARE CORPORATION
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
/s/ Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx
19
