EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into this 5th day
of September, 2003, by and between American Healthways, Inc., a Delaware
corporation ("Company") and Xxxxxxx Xxxxxxxx ("Officer").
WITNESSETH
I. Employment. In consideration of the mutual promises and
agreements contained herein, the Company employs Officer and Officer hereby
accepts employment under the terms and conditions hereinafter set forth.
II. Duties. Officer is engaged as Executive Vice President of the
Company and shall also serve as President of StatusOne Health Systems, Inc., a
subsidiary of the Company ("StatusOne"). In so doing, Officer shall report
directly to the Chief Executive Officer of the Company. Officer shall have such
management, supervisory and operational functions as are customary to such
position, and such other powers, functions and duties consistent with Officer's
title as are designated from time to time by the President of StatusOne. During
the term of this Agreement, Officer shall also serve without additional
compensation in such other offices of the Company or its subsidiaries or
affiliates to which he may be elected or appointed by the Board of Directors or
by the Chief Executive Officer of the Company.
III. Term. Subject to the terms and conditions set forth herein,
Officer shall be employed hereunder for a term beginning on September 1, 2003
and terminating on August 31, 2005 (the "Expiration Date") unless sooner
terminated or further extended as hereinafter set forth. The Expiration Date
shall be automatically extended for one additional year at the end of the first
term of this Agreement and at the end of each year thereafter (so that the term
of this Agreement shall be extended automatically for one year and no more),
unless the Company notifies Officer in writing (the "Expiration Notice") on or
before sixty (60) days prior to the Expiration Date that this automatic
extension provision is canceled and is of no further force and effect. Officer
will continue to be paid full pay and benefits during this sixty (60) day
period. Notwithstanding the automatic extension of the Expiration Date or any
other provisions herein, this Agreement shall expire on the date that Officer
becomes 65 years of age.
IV. Compensation.
(a) Base Salary. For all duties rendered by Officer, the
Company shall pay Officer a salary of $310,000 per year ("Base Salary"),
payable in equal monthly installments at the end of each month. All
compensation payable hereunder shall be subject to withholding for federal
income taxes, FICA and all other applicable federal, state and local
withholding requirements.
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The Base Salary shall be reviewed at least annually by the
Board of Directors or the Chief Executive Officer of the Company and may be
further increased in such amounts as the Board of Directors or the Chief
Executive Officer in its discretion may decide.
(b) Stock Options. In addition, Officer shall be eligible to
participate in the Company stock option plan and will receive an initial
allotment of 20,000 stock options, which shall vest and have the other terms
set forth in the stock option agreement attached as Exhibit A hereto.
(c) Expenses. During the term of Officer's employment
hereunder, the Executive shall be entitled to receive reimbursement for all
reasonable, documented expenses incurred by Officer in performing his duties
hereunder, including, without limitation, transportation, hotel and other
business expenses, subject to and in accordance with the policies, practices
and procedures of the Company.
(d) Other. The Company will provide Officer with a car
allowance of Three Hundred Dollars ($300) per month.
V. Extent of Service. During the term of this Agreement, and excluding
any periods of vacation, paid holiday and sick and personal leave, Officer
shall devote substantially all of his working time, attention and energies to
the business of the Company and shall not during the term of this Agreement,
including any extensions thereof, take directly or indirectly an active role in
any other business activity without the prior written consent of the Chief
Executive Officer of the Company; but this Section V shall not prevent Officer
from (a) making and managing real estate or other investments of a passive
nature, (b) delivering lectures or fulfilling speaking engagements, or (c)
participating in the activities of a civic or nonprofit charitable organization
where such participation does not require a substantial amount of time and does
not impair his ability to perform his duties under this Agreement. Officer
shall not serve on the board of directors of an entity outside of the Company
and its affiliates, other than those boards of directors set forth on Exhibit B
hereto, without the prior approval of the Chief Executive Officer of the
Company, which shall not be unreasonably withheld.
VI. Disability. During any period in which Officer fails to perform
his duties hereunder as a result of incapacity due to physical or mental
illness, Officer shall continue to receive his Base Salary until his employment
is terminated hereunder. In the case of incapacity due to physical or mental
illness resulting in (a) Officer's being absent from his duties hereunder on a
full time basis for more than ninety (90) consecutive days or (b) Officer's
being absent from his duties hereunder for more than one hundred and twenty
(120) days in any consecutive six (6) month period or (c) a determination by
the Board of Directors that Officer is permanently and totally disabled from
performing his duties hereunder (any of the foregoing, a "Disability"), the
Company may terminate Officer's employment hereunder by the delivery of written
notice of termination, which shall be effective on the thirtieth (30th) day
after receipt of such notice by Officer (the "Disability Effective Date"),
unless Officer shall have (i) returned to full-
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time performance of his duties prior to the Disability Effective Date and (ii)
demonstrated to the reasonable satisfaction of the Chief Executive Officer or
the Board that Officer is capable of sustaining his duties on a full time basis
going forward. In the event the Company so terminates Officer under this
Section, such termination shall be considered termination without just cause
and the Company shall pay Officer such amounts and provide such benefits as are
required by Section VIII hereof, reduced by the benefits payable to Officer
under the Company's disability insurance policies.
For purposes of this Section VI, the determination of whether Officer
is incapacitated due to physical or mental illness and therefore disabled shall
be made by the Chief Executive Officer of the Company upon advice of a licensed
physician. Any dispute which shall arise between the parties hereto regarding
whether the Officer is disabled as contemplated in this Section shall be
settled by arbitration as provided in Section XV.
In the event of Officer's Disability, Officer shall be entitled to
participate in the Company's health insurance and life insurance programs so
long as is permitted under the provisions of these coverages. If Officer is no
longer eligible for coverage in the Company's health insurance plan, the
Company shall pay the difference between the cost of COBRA medical insurance
coverage (available after active eligibility has ended) and Officer's
contribution to the plan immediately preceding the Disability, but in no event
shall the Company pay this difference for any period beyond the unexpired term
of this Agreement or beyond the period of Officer's eligibility to participate
in COBRA health insurance benefits, whichever is later. Following the
Disability Effective Date, Officer's benefits for past participation in the
Company's bonus, capital accumulation and stock option plans shall be
determined in accordance with the provisions of those plans and Officer shall
not be eligible for further participation in these plans beyond the Disability
Effective Date.
VII. Termination for Just Cause. For purposes of this Agreement, the
Company shall have the right to terminate Officer for "just cause". For
purposes of this Agreement, "just cause" shall mean that, in the good faith
opinion of the Chief Executive Officer of the Company, Officer is guilty of (i)
intoxication while on duty, (ii) theft or dishonesty, (iii) conviction of a
crime involving moral turpitude, (iv) upon written notice to Officer, there is
failure to cure within 30 days any willful and continued neglect or gross
negligence by Officer in the performance of his duties as an officer or (v)
upon written notice to Officer which specifies in reasonable detail the
violation thereof, there is failure to cure within 30 days any violation of any
Company policy or code of conduct, copies of which will have been provided to
Officer. For purposes of this Section VII, the Chief Executive Officer of the
Company shall make determination of a violation. In making such determination,
the Chief Executive Officer of the Company shall not act unreasonably or
arbitrarily. Any dispute which shall arise between the parties hereto regarding
whether Officer has committed any act which could give Company "just cause" to
terminate this Agreement shall be settled by arbitration as provided in Section
XV. Upon such termination by the Company, the Company shall have no further
obligation to the Officer under this Agreement.
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VIII. Termination Without Just Cause. Officer's employment under this
Agreement may be terminated (i) by the Company at any time without "just cause"
by providing Officer with written notice, (ii) by the Company by providing
Officer with Expiration Notice (as defined in Section III), (iii) by Officer at
any time within twelve (12) months following the occurrence of a Change in
Location within the first (24) twenty-four months of this Agreement, a Change
In Control or a Change in Responsibility (each, as defined in Section XX
herein), or (iv) by Officer in the event the Company breaches any provision of
this Agreement, and such breach is not cured within thirty (30) days of written
notice to the Company. Officer's effective termination date shall be the date
set forth in the notice of termination or the Expiration Notice or the date set
forth in any notice of termination the Company receives from the Officer in
accordance with Section IX herein. In the event of any such termination:
a. Subject to compliance by Officer with the provisions
of Section XI herein, the Company shall pay Officer
his Base Salary monthly from the effective
termination date for a period of (i) two (2) years,
if Officer is terminated within the first twelve
(12) months of this Agreement, or (ii) one (1) year,
if Officer is terminated at any time after the first
twelve (12) months of this Agreement (the applicable
period to be referred to as the "Severance Period").
In addition, Officer (i) will be paid for any
accrued but unused vacation, sick and personal leave
time pay earned by him, up to and including the
effective termination date ("Accrued Leave Time"),
as well as all unreimbursed reasonable and
substantiated business expenses and any other
accrued but unpaid compensation (collectively, the
"Accrued Obligations") on the effective termination
date and (ii) will be paid all amounts arising from
Officer's participation in, or benefits under the
Company's benefit plans (the "Plan Payments") (which
amounts shall be payable in accordance with the
terms and conditions of such benefit plans).
b. Officer shall cease as of the effective termination
date his further participation in the Company's
stock option plans, capital accumulation plans,
bonus plans, benefit plans, monthly automobile
allowance and any other benefit or compensation plan
in which Officer participated or was eligible to
participate except as set forth in Section VIII(c)
below. Officer's effective termination date shall be
utilized for any vesting provisions of the plans
listed above in this subparagraph (b).
c. Following termination by the Company without just
cause, Officer shall be eligible to obtain COBRA
health insurance coverage under the Company's health
insurance plan for a period of time generally
available to other participants eligible for such
coverage. If the Officer elects this COBRA health
insurance coverage, Officer's contribution to such
coverage will continue at rates contributed by the
Company's other officers as may be in effect from
time to time while the Officer's COBRA health
insurance
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coverage is in place. While life and disability
insurance coverage cannot be provided following the
Officer's termination under the terms of these group
insurance plans, the Company will pay to Officer the
equivalent amount of the Company's contribution to
the premiums for these coverages during the time
that any payments are made to Officer under this
Agreement in an amount equal to the amount
contributed by the Company for these coverages for
other officers of the Company in effect while
Officer's coverage following termination hereunder
is in place. If Officer maintains COBRA health
coverage with the Company upon new employment
following termination of this Agreement, the full
cost of the COBRA health insurance coverage shall be
the responsibility of the Officer. In addition, upon
new employment following termination of this
Agreement, the Company's reimbursement of life and
disability insurance premium contributions will also
terminate.
d. No payments of Base Salary or of any other type of
compensation shall be made to Officer after Officer
becomes sixty five (65) years of age.
e. All payments hereunder will cease upon the death of
Officer.
IX. Termination by Officer. Officer may terminate his employment
hereunder at any time upon sixty (60) days written notice. Upon such
termination by Officer, other than termination in accordance with Section
VIII(iii), the Company shall pay Officer on the next regularly scheduled date
for payment of Officer's Base Salary: (a) his Base Salary due through the date
on which his employment is terminated at the rate in effect at the time of
notice of termination, (b) the Accrued Obligations, and (c) Plan Payments
(which amounts shall be payable in accordance with the terms and conditions of
such benefit plans). The Company shall then have no further obligation to
Officer under this Agreement.
X. Termination Upon Death. If Officer dies during the term of
this Agreement, the Company shall pay his Base Salary, Accrued Obligations due
through the date of his death at the rate in effect at the time of his death
and all Plan Payments on the next regularly scheduled date for payment of
Officer's Base Salary. The Company shall then have no further obligations to
Officer or any representative of his estate or his heirs except that Officer's
estate or beneficiaries as the case may be shall be paid such amounts as may be
payable under the Company's life insurance policies and other plans as they
relate to benefits following death then in effect for the benefit of Officer.
XI. Restrictive Covenants.
(a) Confidential Information. During the term of this
Agreement, including any renewals, and continuing
during the period while any amounts are being paid
to Officer pursuant to the terms of the Agreement,
and for a period of one (1) year thereafter, Officer
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agrees not to disclose to any person other than a
person to whom disclosure is necessary in connection
with the performance of his duties or to any person
specifically authorized by the Chief Executive
Officer of the Company any material confidential
information concerning the Company, including, but
not limited to identities of customers and
prospective customers identities of individual
contacts at customers, information about Company
colleagues, models and strategies, contract formats,
business plans and related operation methodologies,
financial information or measures, data bases,
computer programs, treatment protocols, operating
procedures and organization structures. For purposes
hereof, "confidential information" shall not include
information that: (a) was in Officer's possession
prior to disclosure by the Company (other than
information of StatusOne that was maintained as
confidential and proprietary information by
StatusOne prior to the date hereof); or (b) was in
the public domain or generally known within the
relevant industry at the time of disclosure to
Officer, or becomes so generally known after such
disclosure, through no act of Officer.
(b) Non-Competition. During the term of this Agreement,
including any renewals, and continuing during the
period while any amounts are being paid to Officer
pursuant to the terms of the Agreement and for a
period of one (1) year thereafter, Officer will not
(a) directly or indirectly own, manage, operate,
control or participate in the ownership, management,
operation or control of, or be connected as an
officer, employee, partner, director or otherwise
with, or have any financial interest in, or aid or
assist anyone else in the conduct of, any business
which is in competition with any business conducted
by the Company or which Officer knew or had reason
to know the Company was actively evaluating for
possible entry; provided that it shall not be a
violation of this Section XI if Officer owns five
(5) percent or less of the voting stock of any
public corporation.
(c) Non-Solicitation. During the term of this Agreement,
including any renewals, and continuing during the
period while any amounts are being paid to Officer
pursuant to the terms of this Agreement and for a
period of one (1) year thereafter, Officer will not
(a) directly or indirectly solicit business which
could reasonably be expected to conflict with the
Company's interest 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
the termination of employment or from which Officer
knew or had reason to know that Company was going to
solicit business at the time of termination of
employment,
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or (b) employ, solicit for employment, or advise or
recommend to any other persons that they employ or
solicit for employment, any employee of the Company;
provided, however that this subsection (c) shall not
prevent Officer or any entity with which Officer is
affiliated from making general solicitations for
employment which are not specifically directed at
employees of the Company or employing any employee
of the Company who responds to such general
solicitation.
(d) Consultation. Officer shall, at the Company's
written request, during the period he is receiving
any payment from the Company hereunder, cooperate
with the Company in concluding any matters in which
Officer was involved during the term of his
employment and will make himself available for
consultation with the Company on other matters
otherwise of interest to the Company. The Company
agrees that such requests shall be reasonable in
number and will consider Officer's time required for
other employment and/or employment search.
(e) Enforcement. Officer and the Company acknowledge and
agree that any of the covenants contained in this
Section XI may be specifically enforced through
injunctive relief but such right to injunctive
relief shall not preclude the Company from other
remedies which may be available to it.
(f) Continuing Obligation. Notwithstanding any provision
to the contrary or otherwise contained in this
Agreement, the Agreement and covenants contained in
this Section XI 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.
XII. Vacation. During each twelve-month period of this Agreement,
Officer shall be entitled to vacation in accordance with Company policy in
effect from time to time, but in any event not less than 4 weeks per year;
provided, however, that from the date hereof and continuing until December 31,
2004, Officer shall be entitled to vacation, and shall accrue such vacation and
personal days, pursuant to and in accordance with the PTO Policy of StatusOne
attached hereto as Exhibit C. From and after December 31, 2004, Officer shall
be entitled to vacation in accordance with Company policy then in effect.
XIII. Benefits. In addition to the benefits specifically provided for
herein, Officer shall be entitled to participate while employed by the Company
in all benefit plans maintained by the Company for officers generally according
to the terms of such plans, summaries of which are attached hereto as Exhibit
D. In addition, Officer shall be entitled to participate in the Company's bonus
plan, which for fiscal year 2004 shall
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entitle Officer to a bonus equal to 45% of such Officer's Base Salary, provided
that the Company meets certain financial targets.
XIV. Notices. Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing and 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 and the date of mailing shall be deemed the
date which such notice has been provided.
XV. Arbitration. Any dispute between the parties hereto shall be
settled by final and binding arbitration in Nashville, Tennessee, in accordance
with the then effective rules of the American Arbitration Association, and
judgment upon the award rendered may be entered in any court having
jurisdiction thereof.
XVI. 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.
XVII. 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 Officer may not
assign any of his rights or delegate any of his duties or obligations under
this Agreement.
XVIII. Entire Agreement. This instrument contains the entire
agreement of the parties and supersedes all other prior agreements, employment
contracts and understandings, both written and oral, express or implied with
respect to the subject matter of this Agreement and 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. The laws
of the State of Tennessee shall govern this Agreement without regard to the
conflict of laws principles thereunder.
XIX. Headings. The sections, subjects and headings of this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
XX. Definitions. For purposes of this Agreement,
(a) a "Change of Control" shall be deemed to mean:
(i) a transaction or series of transactions
(occurring within 24 months of each other)
in which all or any substantial (defined as
more than fifty percent (50%) of the assets
of the Company) portion of Company assets
have been acquired through a merger,
business combination, purchase or similar
transaction by any entity or person, other
than an entity controlled by the Company;
or
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(ii) a transfer or series of transfers
(occurring within 24 months of each other)
in which securities representing control of
the Company ("control" being defined as
greater than fifty percent (50%) of the
outstanding voting power of the outstanding
securities of the Company) are acquired by
or otherwise are beneficially owned,
directly or indirectly, by any corporation,
person or "group" (as such term is used in
Section 13(d)(3) of the Securities Exchange
Act of 1934).
(b) a "Change in Responsibility" shall be deemed to
mean:
(i) a material diminution in Officer's duties
and responsibilities; or
(ii) the assignment to Officer of duties and
functions materially inconsistent with
Officer's title and duties as prescribed
hereunder, in either case without Officer's
written consent.
(c) a "Change in Location" shall be deemed to mean any
mandatory relocation of the place(s) where Officer principally performs his job
responsibilities (and including any mandatory change in Officer's right to
periodically work from a home-based office); provided, however, that the
relocation of one or more current offices of StatusOne to a place within
twenty-five (25) miles of such current office shall not constitute a "Change in
Location."
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first written.
/s/ M.E. Xxxxxxxx
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Xxxxxxx Xxxxxxxx
AMERICAN HEALTHWAYS, INC.
By: /s/ Xxx X. Xxxxxx, Xx.
-----------------------------------
Title: Chief Executive Officer
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Schedule A
[AMERICAN HEALTHWAYS LOGO]
NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER THE AMERICAN HEALTHWAYS, INC.
AMENDED AND RESTATED 2001 STOCK OPTION PLAN
THIS STOCK OPTION AGREEMENT is made and entered into this 1ST day of
SEPTEMBER, 2003, by and between American Healthways, Inc., a Delaware
corporation (the "Company"), and XXXX XXXXXXXX (the "Optionee"). Capitalized
terms not otherwise defined herein shall have the meaning ascribed to such
terms in the American Healthways, Inc. Amended and Restated 2001 Stock Option
Plan
WHEREAS, the Company has adopted the American Healthways, Inc. Amended
and Restated 2001 Stock Option Plan (the "Plan"), pursuant to which the Company
is authorized to grant options to purchase shares of the Company's Common
Stock, par value $.001 per share (the "Common Stock"), to Colleagues of the
Company;
WHEREAS, the Company desires to afford the Optionee an opportunity to
purchase Common Stock as hereinafter provided in accordance with the provisions
of the Plan.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. GRANT OF OPTION. The Company hereby grants to Optionee a
Non-Qualified Stock Option (the "Option"), exercisable in whole or in part, to
purchase 20,000 shares of the Company's Common Stock, for an exercise price OF
$35.77 per share.
2. OPTION PLAN. This Option is granted under the Plan and is
subject to the terms and conditions set forth in the Plan. In the event any of
the provisions hereof conflict with or are inconsistent with the provisions of
the Plan, the provisions of the Plan shall be controlling.
3. TIMING OF EXERCISE. Optionee may exercise this Option with
respect to the percentage of shares set forth below from and after the dates
specified below:
CUMULATIVE
PERCENTAGE VESTED DATE OF VESTING OPTIONS EXERCISABLE
25% September 1, 2004 5,000
50% September 1, 2005 10,000
75% September 1, 2006 15,000
100% September 1, 2007 20,000
This Option will expire ten (10) years from the date of grant of this Option.
4. MANNER OF EXERCISE. This Option shall be exercised by the
Optionee (or other party entitled to exercise the Option under Section 5 of this
Agreement) by delivering written notice to the Corporation stating the number
of shares of Common Stock to be purchased, the person or persons in whose name
the shares are to be registered and each such person's address and social
security number. Such notice shall not be effective unless accompanied by the
full purchase price for all shares so purchased. The purchase price shall be
payable in cash and shall be calculated as the number of shares to be purchased
times the option exercise price per share as shown in Section 1 of this
Agreement. Payment in currency or by certified check, cashier's check or postal
money order shall be considered payment in cash. The Company shall have the
right to require the Optionee to remit to the Company an amount sufficient to
satisfy any federal, state and local withholding tax requirements prior to the
delivery of any certificate for such shares.
5. NONTRANSFERABILITY OF OPTION. This Option shall not be
transferable by the Optionee otherwise than by will or by the laws of descent
and distribution, and is exercisable during Optionee's lifetime only by the
Optionee. The terms of this Option shall be binding on the executors,
administrators, heirs and successors of the Optionee.
6. TERMINATION OF EMPLOYMENT.
(A) TERMINATION BY DEATH. If the Optionee's employment by the
Company terminates by reason of death, this Option may thereafter be exercised,
to the extent the Option was exercisable at the time of death, by the legal
representative of the estate or by the legatee of the Optionee under the will
of the Optionee, for a period of one year from the date of such death or until
the expiration of the stated term of the Option, whichever period is the
shorter.
(B) TERMINATION BY REASON OF DISABILITY. If the Optionee's
employment by the Company terminates by reason of Disability (as that term is
defined under the Company's long-term disability insurance policy), this Option
may thereafter be exercised by the Optionee, to the extent it was exercisable
at the time of termination, for a period of one year from the date of such
termination of employment or until the expiration of the stated term of the
Option, whichever period is shorter, provided, however, that if the Optionee
dies within such one-year period, the Option shall thereafter be exercisable to
the extent to which it was exercisable at the time of death for a period of
twelve months from the date of such death or until the expiration of the stated
term of the Option, whichever period is shorter.
(C) RETIREMENT. If the Optionee's employment by the Company
terminates by reason of Retirement (as defined in the Plan), the shares subject
to the Option granted hereunder not previously exercisable and vested shall
become fully exercisable and vested upon the date of such termination of
employment and this Option may be exercised for a period of one year from the
date of such termination of employment or until the expiration of the stated
term of the Option, whichever period is shorter.
(D) OTHER TERMINATION. If the Optionee's employment by the
Company is involuntarily terminated for any reason other than death,
Disability, or Retirement, of if Optionee voluntarily terminates employment,
this Option shall thereupon terminate, except that this Option may be exercised
by the Optionee, to the extent otherwise then exercisable, for a period of
three months from the
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date of such termination of employment or the expiration of the Option's term,
whichever period is the shorter if the involuntary termination is without Cause
(as defined in the Plan). If the Optionee's employment by the Company is
terminated for Cause, this Option shall immediately terminate.
7. RESTRICTIONS ON PURCHASE AND SALE OF SHARES. The Company shall
be obligated to sell or issue shares pursuant to the exercise of this Option
only in the event that the shares are at that time effectively registered or
otherwise exempt from registration under the Securities Act of 1933, as
amended, ("xxx 0000 Xxx"). In the event that the shares are not registered
under the 1933 Act, the Optionee hereby agrees that, as a further condition to
the exercise of this Option, the Optionee (or his successor under Section 5 of
this Agreement), if the Company so requests, will execute an agreement in form
satisfactory to the Company in which the Optionee represents that he or she is
purchasing the shares for investment purposes, and not with a view to resale or
distribution. The Optionee further agrees that if the shares of Common Stock to
be issued upon the exercise of this Option are not subject to an effective
registration statement filed with the Securities and Exchange Commission
pursuant to the requirements of the 1933 Act, such shares shall bear an
appropriate restrictive legend.
8. ADJUSTMENT. In the event of any merger, reorganization,
consolidation, recapitalization, extraordinary cash dividend, stock dividend,
stock split or other change in corporate structure affecting the Common Stock,
the number of shares of Common Stock of the Company subject to this Option and
the price per share of such shares may be adjusted by the Company as may be
determined by the Compensation Committee of the Company's Board of Directors
(the "Committee") pursuant to the Plan.
9. CHANGE IN CONTROL. Upon a Change in Control, and if and to
the extent so determined by the Committee or the Board upon a Potential Change
in Control, the shares subject to the Option granted hereunder not previously
exercisable and vested shall become fully exercisable and vested.
10. NO RIGHTS UNTIL EXERCISE. The Optionee shall have no rights
hereunder as a stockholder with respect to any shares subject to this Option
until the date of the issuance of a stock certificate to him or her for such
shares upon due exercise of this Option.
11. CONFIDENTIALITY AND NON-SOLICITATION. It is the interest of
all Optionees to protect and preserve the assets of the Company. In this
regard, in consideration for granting this Option and as conditions of
Optionee's ability to exercise this option, Optionee acknowledges and agrees
that:
(A) CONFIDENTIALITY. In the course of Optionee's employment,
Optionee will have access to trade secrets and other confidential information
of the Company and its clients. Accordingly, Optionee agrees that, without the
prior written consent of the Company, Optionee will not, other than in the
normal conduct of the Company's business affairs, divulge, furnish, publish or
use for personal benefit or for the direct or indirect benefit of any other
person or business entity, whether or not for monetary gain, any trade secrets
or confidential or proprietary information of the Company or its clients,
including without limitation, any information relating to any business methods,
marketing and business plans, financial data, systems, customers, suppliers,
policies, procedures, techniques or research developed for the benefit of the
Company or its clients. Proprietary information includes, but is not limited
to, information developed by the Optionee for the Company while employed by the
Company. The obligations of the Optionee under this paragraph will continue
after the Optionee has left the employment of the Company. Optionee agrees that
upon leaving the employment of the Company, Optionee will return to the Company
all property and
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confidential information in the Optionee's possession and agrees not to copy or
otherwise record in any way such information.
(B) NON-SOLICITATION. While employed by the Company and
for a period of two years thereafter, Optionee shall not, upon Optionee's own
behalf or on behalf of any other person or entity, directly or indirectly,
- hire or solicit to leave the employ of the Company
any person employed by or under contract as an independent contractor to the
Company; or
- contact, solicit, entice away, or divert any disease
management business from any person or entity who is a client or with whom the
Company was engaged in discussions as a potential client within one year prior
to the date of termination of Optionee.
In the event Optionee breaches any provisions of this paragraph, this
Option shall immediately expire and may not be exercised, and the Company shall
be entitled to seek other appropriate remedies it may have available to limit
its damages from such breach.
12. AMENDMENT. The Committee may amend the terms of this Option,
prospectively or retroactively, but, subject to Section 11 above, no such
amendment shall impair the rights of the Optionee hereunder without the
Optionee's consent.
13. NOTICES. All notices required to be given under this Option
shall be deemed to be received if delivered or mailed as provided for herein,
to the parties at the following addresses, or to such other address as either
party may provide in writing from time to time.
To the Corporation:
American Healthways, Inc.
0000 Xxxxx Xxxxx Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
To the Colleague:
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(signature)
(name and address)
----------------------------------------
----------------------------------------
----------------------------------------
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IN WITNESS WHEREOF, the parties have caused the Stock Option Agreement
to be duly executed as of the day and year first above written.
AMERICAN HEALTHWAYS, INC.:
----------------------------------
Name: Xxx X. Xxxxxx, Xx.
Title: President & CEO
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EXHIBIT B
EXHIBIT C
PAID TIME OFF
Employees accrue paid time off (PTO) which is available to cover all absences
(planned or unplanned) other than those covered by other plans (such as
holidays, bereavement, jury duty). PTO is intended for occasions such as
emergencies, medical care, vacation, or for personal reasons (school
conferences, exercise classes, etc). PTO must be earned before it can be used
(draws cannot be made on future PTO) and must be requested in advance and
approved by the employee's manager.
Accrual of PTO commences on the first day of regular employment. This date
becomes the employee's "current anniversary date" which is used in accounting
for PTO usage. PTO accrual is calculated on a 40-hour workweek and is credited,
in hours, each pay period. The percent of base hours used to compute the PTO
accrual is determined by the number of completed years of StatusOne Health
Systems employment.
COMPLETED YEARS OF SERVICE MAXIMUM ACCRUAL
0-2 120 hours
3-4 160 hours
5-8 200 hours
over 8 240 hours
PTO balances are reported on employees' pay stubs. All employees must use a
minimum of 50% of earned PTO in each anniversary year period.
An employee's remaining PTO hours which are not used or forfeited during the
year are transferred on the employee's current anniversary date to a prior year
PTO accrual balance. Employees only lose PTO if they have more than 50% of
their annual accrual unused at the time of their personal StatusOne anniversary
date. Employees would then
forfeit any PTO in excess of 50% of their annual accrual at that time.
Employees would be notified in advance if this were to happen.
PTO NOTES:
Flex time is not to be used to prepare for or catch up after an absence. If you
are on vacation on a regular workday, you must use PTO for those absences.
Employees can flex their work times within the SAME workweek (the workweek
begins on Sunday and ends on Saturday) for any number of personal needs so long
as StatusOne's patient, team and business needs are met. However, this workweek
flexibility is not intended as a way to "build up" extra time thereby
decreasing the amount of PTO charged for time taken off in a DIFFERENT week.
If your regular workweek is four (4) 10-hour days and PTO is taken on one of
your regularly scheduled workdays, you will be charged 10 hours of PTO.
You can take a partial day of PTO. Since PTO is accrued and reported in hours,
you may use either partial or full days of PTO.
PTO is to be used to cover time not worked for any reason. If you are ill and
unable to work, and choose to flex your time for the remainder of that same
work week, you would not be required to use PTO if the hours balance. The key
is that you need to work your expected minimum hours within the Sunday to
Saturday work week. "Working" means that you are attending to your job and
available on ICQ or by telephone during that time. If flex time meets patient,
team and business needs, you may choose to cover your absence that way.
You cannot take unpaid time for illness or personal needs and "save" PTO for
vacation.
REQUESTING PLANNED TIME OFF: When requesting time off, employees must consider
StatusOne's commitment to maintaining continuity in patient care. An e-mail
request to
managers, including a detailed coverage plan for the assigned panels of
patients with as much advance notice as possible, is recommended. Managers, in
turn, will approve PTO requests when business needs can be met and managers
will make every reasonable effort to grant requests made within two weeks of
the dates requested; however, the business needs must be considered and an
employee may be asked to choose a different time off schedule.
NOTIFICATION OF UNPLANNED TIME OFF: When illness or personal emergency prevents
you from working, you must notify your manager, preferably by telephone, within
one hour of your regular starting time. Call in is required each day during a
multiple day absence unless other arrangements are made.
EXHIBIT D
[AMERICAN HEALTHWAYS LOGO]
BENEFIT SUMMARY
Officer will be entitled to all benefits and all plans equivalent to those
employees of the Company at the same or similar rank, including without
limitation the following:
401(K) PLAN WITH COMPANY MATCHING (STATUSONE COLLEAGUES CAN ENROLL IMMEDIATELY
AND BEGIN PARTICIPATION IN OCTOBER)
ELIGIBLE AFTER 3 MONTHS OF SERVICE IN WHICH THE COLLEAGUE HAS WORKED AT LEAST
250 HOURS AND IS 21 YEARS OF AGE. CURRENT COMPANY MATCH IS 52% OF THE FIRST 6%
OF COLLEAGUE DEFERRAL. QUARTERLY ENROLLMENT PERIODS
TUITION REIMBURSEMENT PLAN (AVAILABLE IMMEDIATELY)
$3,000 REIMBURSEMENT PER YEAR WITH PRE-APPROVAL BY THE HUMAN RESOURCES
DEPARTMENT
FLEXIBLE SPENDING PLAN (STATUSONE'S CURRENT PLANS WILL CONTINUE THROUGH
OCTOBER, STATUSONE COLLEAGUES WILL BE ABLE TO ENROLL IN THE AMHC PLANS AND
BEGIN CONTRIBUTING IN NOVEMBER)
HEALTH CARE AND/OR DEPENDENT CARE PLANS AVAILABLE
COMPANY BONUS (STATUSONE WILL ENTER THE AMHC PLAN IMMEDIATELY)
DISCRETIONARY BONUS BASED ON COMPANY AND COLLEAGUE PERFORMANCE
HEALTH INSURANCE (IN ADDITION TO STATUSONE'S BLUE CROSS PLAN A CIGNA OPTION
WILL BE AVAILABLE IN JANUARY) CIGNA ADMINISTERED PLANS
EPP (HMO)
PRE-TAX PREMIUM (PREMIUM COST WILL BE COMMUNICATED IN NOVEMBER)
SERVICES PROVIDED BY AND REFERRED BY A CIGNA NETWORK (PCP) PRIMARY
CARE PHYSICIAN
DPP (POINT OF SERVICE OPTION)
PRE-TAX PREMIUM (PREMIUM COST WILL BE COMMUNICATED IN NOVEMBER) OPTION
TO HAVE SERVICES PERFORMED IN-NETWORK OR OUT-OF-NETWORK
*DUE TO CERTAIN NETWORK LIMITATIONS, SOME COLLEAGUES ARE NOT IN NETWORK FOR
EITHER PLAN LISTED ABOVE; THEREFORE, WE HAVE MADE A PPO OPTION AVAILABLE AT THE
SAME COST AS THE EPP PLAN.
DENTAL INSURANCE (AVAILABLE IN JANUARY)
CIGNA PPO PLAN
$1,000 CALENDAR YEAR MAXIMUM BENEFIT PER COVERED INDIVIDUAL
LONG TERM DISABILITY (AVAILABLE IN JANUARY)
90-DAY ELIMINATION PERIOD
PROVIDED BY THE COMPANY AT NO COST TO THE COLLEAGUE
$50,000 LIFE INSURANCE (AVAILABLE IN JANUARY)
PROVIDED BY THE COMPANY AT NO COST TO THE COLLEAGUE
OPTIONAL SUPPLEMENTAL LIFE INSURANCE (AVAILABLE IN JANUARY)
PREMIUM BASED ON AGE AND LIFE INSURANCE AMOUNT
OPTIONS FOR SUPPLEMENTAL LIFE
ARE ONE, TWO, OR THREE TIMES YOUR ANNUAL SALARY $300,000 MAX
HOLIDAYS & PTO PLAN (CURRENT STATUSONE PLAN WILL STAY IN EFFECT THROUGH 2004)
