EXHIBIT 10.40
EXECUTIVE RETENTION AGREEMENT
THIS EXECUTIVE RETENTION AGREEMENT ("Agreement") is made and entered
into as of the _____ day of August, 1999, by and between AmeriPath, Inc., a
Delaware corporation (the "Company"), and [EXECUTIVE NAME] (the "Executive").
RECITALS:
The Compensation Committee of the Board of Directors, and the
Board of Directors, of the Company have determined that it is in the best
interests of the Company and its stockholders to assure that the Company will
have the continued dedication, commitment and services of the Executive,
notwithstanding the possibility, threat, proposal with regard to, or occurrence
of a Change of Control (as defined below) of the Company.
The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control. In order to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, the Board of Directors has
authorized and directed that the Company enter into this Agreement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the premises, benefits
and mutual covenants set forth herein, IT IS HEREBY AGREED AS FOLLOWS:
1. CHANGE IN CONTROL DATE
For purposes of this Agreement, the "Change in Control Date" shall be
the date on which a Change of Control occurs. Anything in this Agreement to the
contrary notwithstanding, if the Executive's employment with the Company is
terminated prior to the date on which a Change of Control occurs, and it is
reasonably demonstrated that such termination (i) was at the request of a third
party who has taken steps reasonably calculated to effect a Change of Control,
or (ii) otherwise arose in connection with or anticipation of a Change of
Control, then for all purposes of this Agreement the "Change in Control Date"
shall mean the date immediately prior to the date of such termination.
2. "CHANGE OF CONTROL"
For the purpose of this Agreement, the term "Change of Control" shall
mean and include:
(i) The acquisition (other than by or from the Company),
at any time
after the date hereof, by any person, entity or "group", within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934 (the "Exchange Act"), of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty
percent (50%) or more of either the then outstanding shares of common
stock or of the combined voting power of the Company's then
outstanding voting securities entitled to vote generally in the
election of directors; or
(ii) The six (6) individuals who, as of the date hereof,
constitute the Board of Directors (as of the date hereof the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
(other than an election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) shall be, for purposes of this
Agreement, considered as though such person were a member of the
Incumbent Board; or
(iii) Approval by the stockholders of the Company of (1) a
reorganization, merger or consolidation with respect to which persons
who were the stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately
thereafter, own more than fifty percent (50%) of the combined voting
power entitled to vote generally in the election of directors of the
reorganized, merged or consolidated company's (or entity's) then
outstanding voting securities in substantially the same proportions
as their ownership immediately prior to such reorganization, merger,
or consolidation, (2) a liquidation or dissolution of the Company, or
(3) the sale of all or substantially all of the assets of the
Company, unless any such approved reorganization, merger,
consolidation, liquidation, dissolution or sale is subsequently
abandoned.
3. EMPLOYMENT PERIOD
The Company hereby agrees to continue the Executive in its employ,
and the Executive hereby agrees to remain in the employ of the Company, for the
period commencing on the Change in Control Date and ending on the first
anniversary of such date (the "Employment Period").
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4. TERMS OF EMPLOYMENT DURING EMPLOYMENT PERIOD
(a) POSITION AND DUTIES.
(i) During the Employment Period, (1) the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least commensurate
in all material respects with the most significant of those held,
exercised and assigned at any time during the 180-day period
immediately preceding the Change in Control Date, and (2) the
Executive's services shall be performed at the location where the
Executive was employed immediately preceding the Change in Control
Date or in any office or location less than twenty-five (25) miles
from such location.
(ii) During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote reasonable attention and time during
normal business hours to the business and affairs of the Company and,
to the extent necessary to discharge the responsibilities assigned to
the Executive hereunder, to use the Executive's reasonable efforts to
perform faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for
the Executive to (1) serve on corporate, civic or charitable boards
or committees, (2) deliver lectures, fulfill speaking engagements or
teach at educational institutions, or (3) manage personal
investments, so long as such activities do not significantly
interfere with the performance of the Executive's responsibilities as
an employee of the Company in accordance with this Agreement. It is
expressly understood and agreed that to the extent that any such
activities have been conducted by the Executive prior to the Change
in Control Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope) subsequent to the
Change in Control Date shall not thereafter be deemed to interfere
with the performance of the Executive's responsibilities to the
Company.
(b) COMPENSATION.
(i) BASE SALARY. During the Employment Period, the Executive
shall receive a base salary at a monthly rate at least equal to the
highest monthly base salary paid or payable to the Executive by the
Company during the twelve-month period immediately preceding the
month in which the Change in Control Date occurs ("Base Salary").
During the Employment Period, the Base Salary shall be reviewed and
shall be increased at any time and from time to time as shall be
substantially consistent with increases in base salary awarded in the
ordinary course of business to other key executives of the Company
and its subsidiaries. Any increase in Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this
Agreement. Base Salary shall not be reduced after any such increase.
(ii) CHANGE IN CONTROL DATE BONUS. In addition to Base Salary,
the Executive shall be paid on the Change in Control Date a bonus
payable in cash and in the amount
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equal to twelve times the Executive's monthly Base Salary (the
"Change in Control Date Bonus"). Nothing in this Agreement shall
require the payment of a bonus prior to the Change in Control Date.
Executive shall be entitled to the Change in Control Date Bonus,
irrespective of any other obligation (or the fulfillment thereof) of
Executive under this Agreement (including, without limitation, the
employment and related obligations set forth or described in Sections
3 and 4(a) hereof).
(iii) ANNIVERSARY BONUS. If on the date of the one-year
anniversary of the Change in Control Date the Executive is in the
employ of the Company, or any successor thereto or assign thereof,
the Executive shall be paid, on such one-year anniversary date, an
additional bonus payable in cash and in an amount that is not less
than twelve times the Executive's monthly Base Salary as determined
immediately prior to the Change in Control Date (the "Anniversary
Bonus").
(iv) INCENTIVE, SAVINGS AND RETIREMENT PLANS. In addition to
Base Salary, the Change in Control Date Bonus, and the Anniversary
Bonus payable as hereinabove provided, the Executive shall be
entitled to participate during the Employment Period in all
incentive, savings and retirement plans, practices, policies and
programs applicable to other key executives of the Company (including
its successors or assigns) and its affiliates, in each case
comparable to those in effect on the Change in Control Date or as
subsequently amended. Such plans, practices, policies and programs,
in the aggregate, shall provide the Executive with compensation,
benefits and reward opportunities at least as favorable as the most
favorable of such compensation, benefits and reward opportunities
provided by the Company for the Executive under such plans,
practices, policies and programs as in effect at any time during the
180-day period immediately preceding the Change in Control Date or,
if more favorable to the Executive, as provided at any time
thereafter with respect to other key executives.
(v) WELFARE BENEFIT PLANS. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be
eligible for participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs provided by
the Company and its subsidiaries (including, without limitation,
medical, prescription, dental, disability, salary continuance,
employee life, group life, accidental death and travel accident
insurance plans and programs), at least as favorable as the most
favorable of such plans, practices, policies and programs in effect
at any time during the 180-day period immediately preceding the
Change in Control Date or, if more favorable to the Executive and/or
the Executive's family, as in effect at any time thereafter with
respect to other key executives.
(vi) EXPENSES. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in connection with the business of
the Company in accordance with the most favorable policies, practices
and procedures of the Company and its subsidiaries in effect at any
time during the 180-day period immediately preceding the Change in
Control Date or, if more favorable to the Executive, as in effect at
any time thereafter with respect to other
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key executives.
(vii) FRINGE BENEFITS. During the Employment Period, the
Executive shall be entitled to fringe benefits, including use of an
automobile and payment of related expenses, in accordance with the
most favorable plans, practices, programs and policies of the Company
and its subsidiaries in effect at any time during the 180-day period
immediately preceding the Change in Control Date or, if more
favorable to the Executive, as in effect at any time thereafter with
respect to other key executives.
(viii) OFFICE AND SUPPORT STAFF. During the Employment Period,
the Executive shall be entitled to an office or offices of a size and
with furnishings and other appointments, and to secretarial and other
assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its subsidiaries at any
time during the 180-day period immediately preceding the Change in
Control Date or, if more favorable to the Executive, as provided at
any time thereafter with respect to other key executives of the
Company and its subsidiaries.
(ix) VACATION. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of the Company and
its subsidiaries as in effect at any time during the 180-day period
immediately preceding the Change in Control Date or, if more
favorable to the Executive, as in effect at any time thereafter with
respect to other key executives of the Company and its subsidiaries.
5. TERMINATION
(a) DEATH OR DISABILITY. This Agreement shall terminate automatically
upon the Executive's death. If the Company determines in good faith that the
Disability of the Executive has occurred (pursuant to the definition of
"Disability" set forth below), it may give to the Executive written notice of
its intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the "Disability Effective
Date"), provided that, within 30 days after such receipt, the Executive shall
not have returned to full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" means a mental or physical incapacity,
illness or disability which renders the Executive unable to perform his duties
and responsibilities for the Company and which, at least twenty (20) weeks after
its commencement, is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative (such agreement as to acceptability not to be
withheld unreasonably).
(b) CAUSE. The Company may terminate the Executive's employment for
"Cause." For purposes of this Agreement, "Cause" shall mean (i) an act or acts
of personal dishonesty taken by the Executive and intended to result in
substantial personal enrichment of the Executive at the expense of the Company,
(ii) repeated violations by the Executive of the Executive's obligations under
Section 4(a) of this Agreement which are demonstrably willful and deliberate
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on the Executive's part and which are not remedied in a reasonable period of
time after receipt of written notice from the Company to the Executive, or (iii)
the conviction of the Executive of a felony crime.
(c) GOOD REASON. The Executive's employment may be terminated by the
Executive for "Good Reason". For purposes of this Agreement, "Good Reason" shall
mean:
(i) the assignment to the Executive of any duties
inconsistent in any material respect with the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by Section 4(a)
of this Agreement, or any other action by the Company which results
in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which
is remedied by the Company promptly after receipt of notice thereof
given by the Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at
any office or location other than that described in Section
4(a)(i)(2) hereof, except for travel reasonably required in the
performance of the Executive's responsibilities consistent with
practices in effect prior to the Change in Control Date;
(iv) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this
Agreement; or
(v) any failure by the Company to comply with and satisfy
Section 9(c) of this Agreement.
(d) NOTICE OF TERMINATION. Any termination by the Company for Cause
or by the Executive for Good Reason shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 10(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than fifteen (15)
days after the giving of such notice). The failure by the Executive to set forth
in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason shall not waive any right of the Executive hereunder or
preclude the Executive from asserting such fact or circumstance in enforcing his
rights hereunder.
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(e) DATE OF TERMINATION. "Date of Termination" means the date of
receipt of the Notice of Termination or any later date specified therein, as the
case may be; PROVIDED, HOWEVER, that (i) if the Executive's employment is
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Executive receives the Company's
notice of such termination, and (ii) if the Executive's employment is terminated
by reason of death or Disability, the Date of Termination shall be the date of
death of the Executive or the Disability Effective Date, as the case may be.
6. OBLIGATIONS OF THE COMPANY UPON TERMINATION
(a) DEATH. If during the Employment Period the Executive's employment
is terminated by reason of the Executive's death, this Agreement shall terminate
without further obligation to the Executive's legal representatives under this
Agreement, other than those obligations accrued or earned and vested (if
applicable) by the Executive as of the Date of Termination, including, for this
purpose (i) the Executive's full Base Salary through the Date of Termination at
the rate in effect on the Date of Termination or, if higher, at the highest rate
in effect at any time from the 180-day period preceding the Change in Control
Date through the Date of Termination (the "Highest Base Salary"), (ii) an amount
equal to the product of (x) the highest bonus payable to the Executive from the
Company and its subsidiaries in respect of any of the three fiscal years
immediately preceding the fiscal year in which the Change in Control Date
occurs, multiplied by (y) a fraction, the numerator of which is the number of
days in the current fiscal year through the Date of Termination, and the
denominator of which is 365 (the "Termination Bonus"), (iii) if the Change in
Control Date has occurred, the Change in Control Date Bonus, if and to the
extent not previously paid pursuant to Section 4(b)(ii) hereof, (iv) if the Date
of Termination occurs on or after the first anniversary of the Change in Control
Date, the Anniversary Bonus, if and to the extent not previously paid pursuant
to Section 4(b)(iii) hereof, and (v) any compensation previously deferred by the
Executive (together with any accrued interest thereon) and not yet paid by the
Company and any accrued vacation pay not yet paid by the Company (such amounts
specified in clauses (i) through (v) are hereinafter referred to as "Accrued
Obligations"). All such Accrued Obligations shall be paid to the Executive's
estate or beneficiary, as applicable, in a lump sum in cash within 30 days of
the Date of Termination. Anything in this Agreement to the contrary
notwithstanding, the Executive's family shall be entitled to receive benefits at
least equal to the most favorable benefits provided by the Company and any of
its subsidiaries to surviving families of executives of the Company and such
subsidiaries under such plans, programs, practices and policies relating to
family death benefits, if any, in accordance with the most favorable plans,
programs, practices and policies of the Company and its subsidiaries in effect
at any time during the 180-day period immediately preceding the Change in
Control Date or, if more favorable to the Executive and/or the Executive's
family, as in effect on the date of the Executive's death with respect to other
key executives of the Company and its subsidiaries and their families.
(b) DISABILITY. If during the Employment Period the Executive's
employment is terminated by reason of the Executive's Disability, this Agreement
shall terminate without further obligations to the Executive, other than those
obligations accrued or earned and vested (if applicable) by the Executive as of
the Date of Termination, including for this purpose, all
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Accrued Obligations. All such Accrued Obligations shall be paid to the Executive
in a lump sum in cash within 30 days of the Date of Termination. Anything in
this Agreement to the contrary notwithstanding, the Executive shall be entitled
after the Disability Effective Date to receive disability and other benefits at
least equal to the most favorable of those provided by the Company and its
subsidiaries to disabled employees and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, in
accordance with the most favorable plans, programs, practices and policies of
the Company and its subsidiaries in effect at any time during the 180-day period
immediately preceding the Change in Control Date or, if more favorable to the
Executive and/or the Executive's family, as in effect at any time thereafter
with respect to other key executives and their families.
(c) TERMINATION FOR CAUSE OR OTHER THAN FOR GOOD REASON. If during
the Employment Period the Executive's employment shall be terminated by the
Company for Cause, this Agreement shall terminate without further obligations to
the Executive other than the obligation to pay to the Executive the Highest Base
Salary through the Date of Termination plus the amount of any compensation
previously deferred by the Executive (together with accrued interest thereon)
and other than those obligations accrued or earned and vested (if applicable) by
the Executive through the Date of Termination. If the Executive terminates his
employment other than for Good Reason during the Employment Period, this
Agreement shall terminate without further obligation to the Executive, other
than those obligations accrued or earned and vested (if applicable) by the
Executive through the Date of Termination, including for this purpose all
Accrued Obligations other than the Termination Bonus specified in Section
6(a)(ii) hereof. All such Accrued Obligations shall be paid to the Executive in
a lump sum in cash within 30 days of the Date of Termination.
(d) GOOD REASON; OTHER THAN FOR CAUSE OR DISABILITY. If, during the
Employment Period, the Company shall terminate the Executive's employment other
than for Cause, Disability or death, or if the Executive shall terminate his
employment for Good Reason, then:
(i) the Company shall pay to the Executive in a lump sum
in cash within 30 days after the Date of Termination the aggregate of
the following amounts:
1 to the extent not theretofore paid: (x) the
Executive's Highest Base Salary through the Date of
Termination, and (y) the Change in Control Date Bonus
payable under Section 4(b)(ii) hereof; and
2 an amount equal to the Anniversary Bonus as
defined in Section 4(b)(iii) hereof; and
3 in the case of compensation previously
deferred by the Executive, all amounts previously deferred
(together with any accrued interest thereon) and not yet
paid by the Company, and any accrued vacation pay not yet
paid by the Company; and
4 all other amounts accrued or earned by the
Executive through
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the Date of Termination and amounts otherwise owing under
the then existing plans and policies at the Company; and
(ii) for the remainder of the Employment Period, or such
longer period as any plan, program, practice or policy may provide,
the Company shall continue benefits to the Executive and/or the
Executive's family at least equal to those which would have been
provided to them in accordance with the plans, programs, practices
and policies described in Section 4(b)(v) of this Agreement if the
Executive's employment had not been terminated, including health,
dental, disability insurance and life insurance, in accordance with
the most favorable plans, practices, programs or policies of the
Company and its subsidiaries during the 180-day period immediately
preceding the Change in Control Date or, if more favorable to the
Executive, as in effect at any time thereafter with respect to other
key executives and their families and, for purposes of eligibility
for retiree benefits pursuant to such plans, practices, programs and
policies, the Executive shall be considered to have remained employed
until the end of the Employment Period and to have retired on the
last day of such period.
(e) TERMINATION BEFORE OR AFTER EMPLOYMENT PERIOD. If the Executive's
employment with the Company terminates or is terminated either before or after
the Employment Period, then the provisions of paragraphs (a) through (d) of this
Agreement shall not apply, and the rights and obligations of the Executive and
the Company relating to such termination of employment shall be determined
without regard thereto.
(f) NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plans, programs, policies or practices
provided by the Company or any of its subsidiaries and for which the Executive
may qualify, nor shall anything herein limit or otherwise affect such rights as
the Executive may have under any compensation, stock option, benefit or other
agreements with the Company or any of its subsidiaries, including without
limitation any right to receive compensation under any severance agreement or
arrangement with the Company. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice or
program of the Company or any of its subsidiaries at or subsequent to the Date
of Termination shall be payable in accordance with such plan, policy, practice
or program.
(g) NO SET-OFF OR MITIGATION; PAYMENT OF LEGAL FEES AND EXPENSES. The
Company's obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement. The Company agrees to pay, to the full extent
permitted by law, all legal fees and expenses which the Executive may reasonably
incur as a result of any contest (regardless of the outcome thereof) by the
Company (including its successors, assigns or affiliates) or others of the
validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive about the
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amount of any payment pursuant to Section 7 of this Agreement), plus in each
case interest at the applicable Federal rate provided for in Section 7872(f)(2)
of the Code.
7. CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY
(a) For purposes of this section, (i) A Payment shall mean any payment
or distribution in the nature of compensation to or for the benefit of the
Executive, whether paid or payable pursuant to this Agreement or otherwise; (ii)
Agreement Payment shall mean a Payment paid or payable pursuant to this
Agreement (disregarding this Section 7); (iii) Net After Tax Receipt shall mean
the Present Value of a Payment net of all taxes imposed on the Executive with
respect thereto under Sections 1 and 4999 of the Internal Revenue Code of 1986,
as amended (the "Code"), determined by applying the highest marginal rate under
Section 1 of the Code which applied to the Executive's taxable income for the
immediately preceding taxable year; (iv) "Present Value" shall mean such value
determined in accordance with Section 280G(d)(4) of the Code; and (v) "Reduced
Amount" shall mean the smallest aggregate amount of Payments which (a) is less
than the sum of all Payments and (b) results in aggregate Net After Tax Receipts
which are equal to or greater than the Net After Tax Receipts which would result
if the aggregate Payments were any other amount equal to or less than the sum of
all Payments.
(b) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company's independent auditors or, at the Executive's option, any
other nationally or regionally recognized firm of independent accountants
selected by the Executive and approved by the Company, which approval shall not
be unreasonably withheld (the "Accounting Firm"), shall determine that receipt
of all Payments would subject the Executive to tax under Section 4999 of the
Code, it shall determine whether some amount of Payments would meet the
definition of a "Reduced Amount." If the Accounting Firm determines that there
is a Reduced Amount, the aggregate Agreement Payments shall be reduced to such
Reduced Amount; provided, however, that if the Reduced Amount exceeds the
aggregate Agreement Payments, the aggregate Payments shall, after the reduction
of all Agreement Payments, be reduced (but not below zero) in the amount of such
excess.
(c) If the Accounting Firm determines that aggregate Agreement Payments
or Payments, as the case may be, should be reduced to the Reduced Amount, the
Company shall promptly give the Executive notice to that effect and a copy of
the detailed calculation thereof, and the Executive may then elect, in his sole
discretion, which and how much of the Agreement Payments or Payments, as the
case may be, shall be eliminated or reduced (as long as after such election the
present value of the aggregate Payments equals the Reduced Amount), and shall
advise the Company in writing of his election within ten days of his receipt of
notice. If no such election is made by the Executive within such ten-day period,
the Company may elect which of the Agreement Payments or Payments, as the case
may be, shall be eliminated or reduced (as long as after such election the
present value of the aggregate Payments equals the Reduced Amount) and shall
notify the Executive promptly of such election. All determinations made by the
Accounting Firm under this Section shall be binding upon the Company and the
Executive and shall be made within 60 days of a termination of employment of the
Executive. As promptly
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as practicable following such determination, the Company shall pay to or
distribute for the benefit of the Executive such Payments as are then due to the
Executive under this Agreement and shall promptly pay to or distribute for the
benefit of the Executive in the future such Payments as become due to the
Executive under this Agreement.
(d) While it is the intention of the Company and the Executive to
reduce the amounts payable or distributable to the Executive hereunder only if
the aggregate Net After Tax Receipts to the Executive would thereby be
increased, as a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that amounts will not have been paid or distributed by
the Company to or for the benefit of the Executive pursuant to this Agreement
which should not have been so paid or distributed ("Overpayment") or that
additional amounts which will have not been paid or distributed by the Company
to or for the benefit of the Executive pursuant to this Agreement could have
been so paid or distributed ("Underpayment"), in each case, consistent with the
calculation of the Reduced Amount hereunder. In the event that the Accounting
Firm, based either upon the assertion of a deficiency by the Internal Revenue
Service against the Company or the Executive which the Accounting Firm believes
has a high probability of success or controlling precedent or other substantial
authority, determines that an Overpayment has been made, any such Overpayment
paid or distributed by the Company to or for the benefit of the Executive shall
be treated for all purposes as a loan AB INITIO to the Executive which the
Executive shall repay to the Company together with interest at the applicable
federal rate provided for in Section 7872(f)(2) of the Code; provided, however,
that no loan shall be deemed to have been made and no amount shall be payable by
the Executive to the Company if and to the extent such deemed loan and payment
would not either reduce the amount on which the Executive is subject to tax
under Section 1 and Section 4999 of the Code or generate a refund of such taxes.
In the event that the Accounting Firm, based upon controlling precedent or other
substantial authority, determines that an Underpayment has occurred, any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive together with interest at the applicable federal rate provided for in
Section 7872(f)(2) of the Code.
8. CONFIDENTIAL INFORMATION
The Executive shall hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge or data relating to
the Company or any of its subsidiaries, and their respective businesses, which
shall have been obtained by the Executive during the Executive's employment by
the Company or any of its subsidiaries and which shall not be or become public
knowledge (other than by acts by the Executive or his representatives in
violation of this Agreement). After termination of the Executive's employment
with the Company, the Executive shall not, without the prior written consent of
the Company, communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no event shall an
asserted violation of the provisions of this Section 8 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement.
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9. SUCCESSORS
(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
10. MISCELLANEOUS
(a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Florida, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
IF TO THE EXECUTIVE:
[EXECUTIVE NAME]
[EXECUTIVE ADDRESS LINE 1]
[EXECUTIVE CITY], [EXECUTIVE STATE]
[EXECUTIVE ZIP CODE]
IF TO THE COMPANY:
AmeriPath, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: President
or to such other address as either party shall have furnished to the other in
writing in accordance
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herewith. Notice and communications shall be effective when actually received by
the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
(e) The Executive's failure to insist upon strict compliance with any
provision hereof shall not be deemed to be a waiver of such provision or any
other provision thereof.
(f) This Agreement contains the entire understanding of the Company and
the Executive with respect to the subject matter hereof.
(g) The Company (including its Board of Directors or any committee
thereof) will not take any action that is inconsistent with the terms or
provisions of this Agreement. In addition, the Company (including its Board of
Directors or any committee thereof) will not take any action by reason of or in
connection with a Change of Control to cancel or otherwise terminate or rescind
(i) any compensation or benefit to which the Executive is entitled under any
agreement between the Company and the Executive, or (ii) any outstanding stock
options granted by the Company to the Executive, unless the Executive is
afforded a reasonable opportunity to exercise those options (whether or not
otherwise exercisable) prior to the Change in Control Date.
(h) The Executive and the Company acknowledge that, except as set forth
in any written employment agreement between the Executive and the Company and
effective from and after the date hereof, the employment of the Executive by the
Company is "at will," and, prior to the Change in Control Date, may be
terminated by either the Executive or the Company at any time. Upon a
termination of the Executive's employment prior to the Change in Control Date,
there shall be no further rights of the Executive under this Agreement.
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IN WITNESS WHEREOF, the Executive has hereunto set his hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused this agreement to be executed in its name on its behalf, all as of the
day and year first above written.
-------------------------------
[EXECUTIVE NAME]
AMERIPATH, INC.
By:____________________________
Xxxxxx X. Xxxxxxx
Chairman of the Compensation Committee
of the Board of Directors
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