CONSULTING AGREEMENT
Exhibit 10.14
Execution Version
THIS
CONSULTING AGREEMENT (“Agreement”) is made and entered into
as of this 6th day of July,
2011 (the “Effective Date”), by and between Aurora Diagnostics, LLC (the “Company”) and Xxxxx X.
New (“New”).
WITNESSETH:
WHEREAS, New currently serves as the Company’s and Aurora Diagnostics Holdings, LLC’s
(“Holdings”) President and Chief Executive Officer; and
WHEREAS, the Company and New expect that the Company will hire a new chief executive officer
during 2011, and desire to enter into this agreement to provide New with certain payments after
such hiring, in consideration for New’s agreement to provide certain consulting and transition
services;
NOW THEREFORE, for and in consideration of the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt, sufficiency and adequacy of
which are hereby acknowledged, the parties hereby agree as follows:
1. Voluntary Termination of Employment and Retirement Payment. The Company and New
have mutually agreed that the Company will hire a new chief executive officer during 2011, and that
New will retire as an employee of the Company effective December 31, 2011. The Company hereby
agrees to pay New a lump-sum payment of $500,000 (the “Incentive Payment”), within 45 days
following the commencement of the new chief executive officer’s employment with the Company,
provided that (a) the new chief executive officer’s employment commences on or prior to December
31, 2011, and New has remained continuously employed by the Company from the date hereof through
such date, and (b) New executes and delivers to the Company, no later than 30 days after the
commencement of the new chief executive officer’s employment with the Company, a general release
substantially in the form of Exhibit E attached to the Senior Management Agreement among Holdings,
the Company and New dated June 2, 2006 (as amended from time to time, the “Senior Management
Agreement”). The Incentive Payment shall be in addition to, and not in lieu of, any other
severance, separation or retirement benefits to which New may otherwise be entitled; provided that,
for purposes of the Senior Management Agreement, the parties acknowledge and agree that (A) New’s
resignation as President and Chief Executive Officer and subsequent retirement and separation from
employment shall be deemed a resignation without “Good Reason” for purposes of (and as defined in)
the Senior Management Agreement, and the changes to the terms and conditions of New’s employment
set forth herein in connection therewith shall not provide Executive with Good Reason to terminate
employment and receive severance payments and benefits
pursuant to Section 6(c) of the Senior Management Agreement; provided, however, such
resignation without Good Reason will not trigger the back-buy provisions contained in
Section 9.11 (b)(ii) of that certain Aurora Diagnostics Holdings, LLC Second and
Amended Limited Liability Company Agreement, dated July 6 2011, and (B) New shall
remain eligible to earn his Annual Bonus under the Senior Management Agreement for
2011 (payable in accordance with the terms of the Senior Management Agreement).
2. Resignation as President and Chief Executive Officer; Service as a Senior Advisor;
Engagement as an Independent Contractor. Effective as of the commencement of employment of a
new chief executive officer, New hereby resigns as President and Chief Executive Officer and any
other officer position he holds with Holdings and the Company (but not, for the avoidance of doubt,
as an employee of the Company). Thereafter, and through December 31, 2011, New shall continue to be
employed by the Company as a Special Advisor to the Board of Managers and to the Chief Executive
Officer with such duties and responsibilities as the Company may be reasonably determine from time
to time. Notwithstanding anything to the contrary in the Senior Management Agreement, from and
after the new chief executive officer commences employment, (A) New’s position is not expected to
be a full-time commitment and the necessary hours generally are expected to decline over the
remainder of the Employment Period (as defined in the Senior Management Agreement) and (B) the
Board may specify, in its sole discretion, the amount of work required, if any, for any particular
period, may instruct New not to report to the office for certain periods and may determine that the
Company will cease providing other customary indicia or perquisites of Executive’s employment such
as office space, administrative assistance, email and building access (all without any “Good
Reason” to resign, constructive termination or other basis for Executive to claim post-termination
compensation or benefits, under Section 6(c) of the Senior Management Agreement or otherwise, so
long as Executive remains on the Company’s payroll and receives the benefits specified in Sections
6(b) through the end of the Employment Period). For the avoidance of doubt, except as expressly
modified herein, the Senior Management Agreement shall continue to govern New’s employment
throughout the duration of the Employment Period. Effective December 31, 2011, New hereby resigns
as an employee and officer of the Company and any of its affiliates and the Company hereby engages
New as an independent contractor to provide consulting services and New hereby accepts such
engagement as an independent contractor, upon the terms and conditions set forth in this Agreement.
3. Consulting Period. Unless terminated sooner, the term of the Consulting Services
under this Agreement shall be for the period commencing on January 1, 2012, and ending on December
31, 2012 (the “Consulting Period”).
4. Consulting Services. Based on his expertise and knowledge of the Company, New shall
provide professional consulting and transition services (the “Consulting Services”), as the Company
may reasonably request from time to time during the Consulting Period. New shall devote such time
to the performance of Consulting Services hereunder as is reasonably necessary to perform them in a
satisfactory manner.
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5. Consulting Payments. In consideration of the consulting services to be rendered
by New hereunder and as the sole compensation to which New is entitled for
performance of the Consulting Services, the Company agrees to pay New the following
amounts: (i) twelve monthly payments of $5,667, payable on the last day of each month
during the Consulting Period (the “Monthly Consulting Payments”), and (ii) an aggregate
payment of up to $450,000, such amount to be determined by the Company’s (or its
parent’s) board of managers in its sole discretion based on its assessment of New’s
responsiveness to such board’s requests and directions regarding the Consulting Services
during the Consulting Period (the “Final Consulting Payment”), with any such Final
Consulting Payment (a) conditioned upon New’s execution and delivery to the Company
of a general release substantially in the form of Exhibit E attached to the Senior
Management Agreement (with such changes as necessary to reflect New’s status as a
consultant and independent contractor during the Consulting Period) no later than 30 days
after the end of the Consulting Period and (b) to be made within 45 days after the
termination of the Consulting Period.
6. Health and Welfare Plan Coverage. During the Consulting Period, New shall be
entitled to continue to participate in all health and welfare benefit plans offered by the
Company to its current executives, including without limitation, medical, dental,
hospitalization, accidental death and disability plans, but excluding any life insurance
coverage. New shall be responsible for the full cost of participating in such plans. In
addition, during the Consulting Period, the Company shall continue to pay New an
annual amount of $18,636 to cover the cost of a supplemental life insurance policy,
consistent with past practice. The Company and New agree that the period for which
New is eligible to elect health coverage under Section 4980B of the Code (COBRA) shall
not run concurrently with the Consulting Period, but shall commence following
termination of the Consulting Period, provided that New has remained a participant of
such applicable plans throughout the Consulting Period, and in accordance with
applicable law and the terms of such plans.
7. Expenses. The Company shall reimburse New for all reasonable expenses that
are either pre-approved by the Company or actually necessitated by the Consulting
Services specified by Company, including expenses for non-local travel, meals and
lodging, rental cars, long distance calls, telecopy charges and copying costs, translation
fees and third-party expenses incurred in connection with the performance of the
Consulting Services, in each case subject to the Company’s requirements with respect to
reporting and documentation of such expenses and to the submission of such expenses
within sixty (60) days of incurrence. All invoices for expenses properly submitted by
New hereunder shall be paid by the Company within thirty (30) days after receipt thereof.
8. Independent Contractor Relationship. The parties acknowledge and intend that
the relationship of New to the Company during the Consulting Period under this
Agreement shall be that of an independent contractor. In performing the Consulting
Services under this Agreement, New shall undertake the Consulting Services according to
his own means and methods of work which shall be in the exclusive charge and control of
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New and which shall not be subject to the control or supervision of the Company, except
as to the objectives of those Consulting Services. New shall determine his own working
hours and schedule and shall not be subject to the Company’s personnel policies and
procedures. New shall be entirely and solely responsible for his actions or inactions and
the actions or inactions of his agents, employees or subcontractors, if any, while
performing Consulting Services hereunder. New agrees that he shall not, in any form or
fashion, maintain, hold out, represent, state or imply to any other individual or entity that
an employer/employee relationship exists between the Company and New, his agents and
employees, or between the Company and any subcontractor or its agents and employees,
and New is not granted nor shall he represent that he is granted any right or authority to
make any representation or warranty or assume or create any obligation or responsibility,
express or implied, for, on behalf or in the name of the Company, to incur debts for the
Company or to bind the Company in any manner whatsoever. New shall be responsible
for all taxes arising from the provision of the Consulting Services pursuant to the
requirements of applicable local, state and federal regulation. New agrees to comply fully
with any and all of Company’s reasonable rules and regulations that relate to any of
New’s activities as to which he has been given advance notice. New shall secure and
maintain in force all licenses and permits required of New by law or regulation (including
any required business license), and New shall fully comply with all federal, state and
local laws, ordinances and regulations applicable to New or the Consulting Services.
9. Confidentiality. New shall not, without the prior written consent of the Company,
disclose to third parties or use for his own account any confidential information he
acquires from the Company, and New shall take all reasonable precautions to prevent his
disclosure of confidential information to any third party who is not independently under
an obligation of confidentiality to the Company. For the purposes of this Agreement,
confidential information shall include any and all information respecting the activities,
operations, plans, properties, and financial condition of the Company and its affiliates
(including, without limitation, such information in the Company’s and its affiliates’
possession but belonging to third parties and including acquisition opportunities), that is
disclosed or made available to New, his employees or agents by any source, whether
orally or in writing, and whether such information is disclosed either before or after the
date of this Agreement, unless such disclosure has been specifically approved for public
release by the Company in writing or such information is already in the public domain
other than as a result of New’s (or any of his employees’ or agents’) acts or omissions. The
terms of this paragraph shall be a continuing covenant that survives the expiration or
earlier termination of this Agreement for an additional period of five (5) years, after
which the covenant of this Section 9 respecting confidentiality shall expire.
10. Ownership of Property. The terms of Section 7(b) of the Senior Management
Agreement are incorporated herein by reference and shall apply to New’s Work Product
(as defined therein) developed, contributed to, made or reduced to practice during the
Consulting Period.
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11. Non-Competition and Non-Solicitation. The terms of Section 8 of the Senior
Management Agreement are incorporated herein by reference and shall apply to New in connection with
the Consulting Services, except that the Noncompete Period shall be during the Consulting Period
and for a period of two (2) years thereafter.
12. Assignment. New may not assign, transfer or subcontract any of his obligations
under this Agreement to any party without the prior written consent of the Company. Any attempted
or purported assignment, transfer or subcontracting in violation of this provision shall be null
and void.
12. Governing Law. Except to the extent preempted by federal law, and without regard
to conflict of laws principles, the laws of the State of Florida will govern this Agreement in all
respects, whether as to its validity, construction, capacity, performance or otherwise.
14. TRA. The Company and New agree that if the Company decides, in its sole
discretion, to enter into a Tax Receivable Agreement or similar agreement (the “TRA”), New shall be
entitled to participate in the TRA proportionate to his ownership as a Unit holder of the Company
in accordance with and subject to the terms and conditions of the TRA and the Company’s operating
agreement, as may be amended.
15. Entire Agreement. This Agreement embodies the entire agreement of the parties and
supersedes all prior agreements between the parties hereto relating to the subject matter hereof
provided that, for the avoidance of doubt, the Senior Management Agreement shall remain in full
force and effect and is not superseded in any respect by this Agreement. This Agreement 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.
* * * * *
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IN
WITNESS WHEREOF, the parties hereto have duly executed and delivered this Consulting
Agreement as of the date first above written.
| AURORA DIAGNOSTICS, LLC |
||||
| By: | /s/ Xxxxx X. New | |||
| Xxxxx X. New | ||||
| Chief Executive Officer | ||||
| /s/ Xxxxx X. New | ||||
| Xxxxx X. New | ||||
| [Signature Page to Consulting Agreement] | ||||
