EXHIBIT 99.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT, entered into this 28th day of February, 2005, by and
between AmSurg Corp., a Tennessee corporation with its principal place of
business at 00 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000 ("Company")
and Xxxxx X. Xxxx ("Officer");
WITNESSETH:
1. EMPLOYMENT. The Company employs Officer and Officer hereby accepts
employment under the terms and conditions hereinafter set forth.
2. DUTIES. Officer is engaged as Senior Vice President, Operations of
the Company. His powers and duties in that capacity shall be those normally
associated with the position of Senior Vice President, Operations. During the
term of this Agreement, Officer shall also serve without additional compensation
in such other offices of the Company to which he may be elected or appointed by
the Board of Directors.
3. TERM. Subject to provisions of termination as hereinafter provided,
the initial term of Officer's employment under this Agreement shall begin on
February 28, 2005, and shall terminate on December 31, 2005. On each December 31
during this Agreement, commencing on December 31, 2005, unless the Company
notifies Officer, pursuant to the following paragraph, that his employment under
this Agreement will not be extended, his employment under this Agreement shall
automatically be extended for a one (1) year period on the same terms and
conditions as are set forth herein; provided, however, that the term of this
Agreement shall not be automatically extended after Officer reaches age
sixty-five (65).
If the Company elects not to extend Officer's employment under this
Agreement, it shall do so by notifying Officer in writing not less than sixty
(60) days prior to the applicable December 31 of this Agreement. If the Company
does not elect to extend Officer's employment under this Agreement other than
for cause, Officer shall be considered to have been terminated without just
cause upon the expiration of his employment, and Officer will receive the
payments and benefits set forth in Section 8 hereof.
4. COMPENSATION. For all duties rendered by Officer, the Company shall
pay Officer a minimum salary of $225,000 per year, payable in equal semi-monthly
installments at the end of each month. In addition thereto, commencing January
1, 2006, the salary of Officer shall be increased and adjusted upward, based
upon any increase in the Consumer Price Index for Urban Wage Earners and
Clerical Workers, U. S. All City Average Report, of the U. S. Bureau of Labor
Statistics (the "Consumer Price Index") or such index fulfilling the same or
similar purpose in the event the Consumer Price Index is no longer maintained
(the Consumer Price Index or such other index, the "Cost of Living Index"). The
base month shall be February 2005. Such increase shall not be made retroactive
for the initial term, but commencing January 1, 2006, such increase shall be
made, no more frequently than annually, based upon any such increase in the Cost
of Living Index. In determining the adjustment annually, the base figures for
computation shall be the minimum
salary set forth above plus all annual cost of living adjustments previously
made. In addition thereto, each year beginning January 1, 2006, Officer's
compensation will be reviewed by the Board of Directors of the Company, or the
Compensation Committee thereof, and after taking into consideration performance,
the Committee may increase Officer's compensation. In the event the Company
establishes a bonus plan for compensating executive or managerial employees,
Officer may participate in such a plan, provided that any bonuses paid under
such plan shall be in addition to the compensation provided for in this
Agreement. All compensation payable hereunder shall be subject to withholding
for federal income taxes, FICA and all other applicable federal, state and local
withholding requirements.
5. EXTENT OF SERVICE. Officer shall devote substantially his entire
time, attention and energies to the business of the Company and shall not during
the term of this Agreement take an active role in any other business activity
without the prior written consent of the Company; but this shall not prevent
Officer from making real estate or other investments of a passive nature.
6. DISABILITY. In the case of illness or incapacity resulting in
Officer being unable to perform his services, the Company shall provide through
insurance or on its own account coverage for Officer that will provide payment
of full salary and benefits for twelve (12) months. For the period beyond twelve
(12) months, the Company shall provide such coverage to Officer as is then
available to Officer in accordance with Company policy. To the extent that
payments are received from Worker's Compensation or other Company paid plans,
the Company's obligations will be reduced by amounts so received.
7. TERMINATION FOR CAUSE. For the purposes of this Agreement, the
Company shall have "cause" upon (i) a felony conviction of Officer or the
failure of Officer to contest prosecution for a felony, (ii) conviction of a
crime involving moral turpitude, or (iii) willful and continued misconduct or
gross negligence by Officer in the performance of his duties as an officer. For
purposes of this Section 7, "willful" shall be determined by the Board of
Directors of the Company. In making such determination, the Board of Directors
of the Company shall not act unreasonably or arbitrarily.
8. TERMINATION WITHOUT CAUSE. Officer's employment under this Agreement
may be terminated (i) by the Company at any time without cause and (ii) at any
time within twelve (12) months following the occurrence of a Change In Control
(as defined in Section 18 herein) by Officer for Good Reason (as defined in
Section 18 herein) provided:
The Company shall pay Officer one year's salary, payable in twelve (12)
monthly installments following the date of termination of employment, based upon
the annual rate payable as of the date of termination, without further cost of
living adjustments, subject to the following:
(a) Officer shall continue to be covered under health and
life insurance plans of the Company for one (1) year.
Officer's benefits shall be reduced, however,
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by any such coverage that Officer receives incident
to any employment during said one-year period.
(b) No payments shall be made to Officer past age
sixty-six (66) years regardless of the term remaining
after termination.
(c) There shall be no further extension of the Agreement.
(d) Amounts payable by the Company shall be offset and
reduced by any amount earned by Officer in any active
employment that he may receive during said one-year
period from any other source whatsoever, except said
sums shall not include income from dividends,
investments or passive income. As a condition for
Officer receiving his compensation from the Company,
he agrees to furnish the Company annually with full
information regarding such other employment and to
permit inspection of his records at any such
employment and copy of his Federal income tax
returns.
(e) The Company shall receive credit for unemployment
insurance, social security insurance or like amounts
received by Officer.
(f) The payments will cease upon death of Officer
regardless of term remaining.
9. RESTRICTIVE COVENANTS.
(a) Confidential Information. Officer agrees not to
disclose, either during the time he is employed by
the Company or following the termination of his
employment by the Company, any confidential
information concerning the Company, including, but
not limited to, customer lists, contract terms,
financial costs, sales data, or business
opportunities whether for existing, new or developing
businesses.
(b) Non-Compete. Upon voluntary termination of Officer's
employment, upon termination of Officer's employment
by the Company for cause, or upon termination of
Officer's employment without cause, Officer agrees
not to own, finance, operate, manage, design, build,
solicit prospects for or otherwise enter into or
engage in any phase of the ambulatory surgery
business or any other business conducted by the
Company in any state in which the Company is
conducting business on the date of termination of
Officer's employment with the Company, either as an
individual for his own account, as a partner or joint
venturer, or as an employee, agent, officer,
director, consultant, owner or otherwise for a period
of one (1) year following the date of Officer's
termination of his employment with the Company.
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(c) Non-Solicitation. Upon termination or expiration of
his employment, whether voluntary or involuntary,
Officer agrees not to directly or indirectly solicit
business from any entity, organization or person
which has contracted with the Company, which has been
doing business with the Company, from which the
Company was soliciting business at the time of
Officer's termination, or from which the Officer knew
or had reason to know that the Company was going to
solicit business at the time of Officer's
termination, for a one-year period from the date of
Officer's termination of his employment with the
Company.
(d) Enforcement. Officer and the Company acknowledge and
agree that any of the covenants contained in this
Section 9 may be specifically enforced through
injunctive relief, but such right to injunctive
relief shall not preclude Company from other remedies
which may be available to it.
(e) Termination. Notwithstanding any provision to the
contrary otherwise contained in this Agreement, the
agreements and covenants contained in this Section 9
shall not terminate upon Officer's termination of his
employment with the Company or upon the termination
of this Agreement under any other provision of this
Agreement.
10. VACATION. During each year of this Agreement, Officer shall be
entitled to vacation in accordance with Company policy in effect from time to
time.
11. BENEFITS. In addition to the benefits specifically provided for
herein, Officer shall be entitled to participate in all benefit plans maintained
by the Company for employees generally according to the terms of such plans.
12. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if sent by registered or
certified mail to his residence in the case of Officer, or to its principal
office in the case of the Company.
13. WAIVER OF BREACH. The waiver by either party of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach by the other party.
14. ATTORNEYS' FEES. In the event that either party initiates legal
proceedings to enforce any provision of this Agreement or resolve any dispute
hereunder, and Officer is the prevailing party, then the Company shall be
responsible for payment of the Officer's reasonable attorneys' fees incurred in
connection therewith.
15. ASSIGNMENT. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Company. The Officer acknowledges that the services to be
rendered by him are unique and personal, and the
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Officer may not assign any of his rights or delegate any of his duties or
obligations under this Agreement.
16. ENTIRE AGREEMENT. This instrument contains the entire agreement of
the parties. It may not be changed orally but only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought. This Agreement shall be governed
by the laws of the State of Tennessee.
17. HEADINGS. The sections, subjects and headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
18. DEFINITIONS. For purposes of this Agreement the following
definitions shall apply:
a. "Change in Control" shall mean the occurrence of any
of the following:
(i) the acquisition of at least a majority of
the outstanding shares of Common Stock (or
securities convertible into Common Stock) of
the Company by any person, entity or group
(as used in Section 13(d)(3) and Rule
13d-5(b)(1) under the Exchange Act);
(ii) the merger or consolidation of the Company
with or into another corporation or other
entity, or any share exchange or similar
transaction involving the Company and
another corporation or other entity, if as a
result of such merger, consolidation, share
exchange or other transaction, the persons
who owned at least a majority of the Common
Stock of the Company prior to the
consummation of such transaction do not own
at least a majority of the Common Stock of
the surviving entity after the consummation
of such transaction;
(iii) the sale of all, or substantially all, of
the assets of the Company; or
(iv) any change in the composition of the Board
of Directors of the Company, such that
persons who at the beginning of any period
of up to two years constituted at least a
majority of the Board of Directors of the
Company, or persons whose nomination was
approved by such majority, cease to
constitute at least a majority of the Board
of Directors of the Company at the end of
such period.
b. "Company" shall mean AmSurg Corp., any successor
entity or their successors or assigns.
c. "Good Reason" shall exist if after the occurrence of
a Change of Control:
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(v) there is a significant change in the nature
or the scope of Officer's authority and
responsibilities;
(vi) there is a reduction in Officer's rate of
base salary or (for reasons other than
Company performance or stock price) overall
compensation; or
(vii) The Company changes the principal location
in which Officer is required to perform
services outside a fifty mile radius of such
location without Officer's consent.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written.
/s/ Xxxxx X. Xxxx
---------------------------------
Xxxxx X. Xxxx
AMSURG CORP.
By: /s/ Xxx X. XxXxxxxx
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Name: Xxx X. XxXxxxxx
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Title: President and Chief
Executive Officer
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