EXHIBIT 10.3
OPTION SURRENDER AGREEMENT
THIS OPTION SURRENDER AGREEMENT ("Agreement") is executed this 30th day of
March, 1999, by and among AMERICAN MEDICAL SECURITY HOLDINGS, INC., a Wisconsin
corporation ("Company"), AMERICAN MEDICAL SECURITY GROUP, INC. ("AMSG") and
XXXXXXX X. XXXXXXXX, an individual ("Employee").
RECITALS
WHEREAS, Employee is a party to that certain Equity Incentive Plan
Nonqualified Stock Option Award Agreement with AMSG f/k/a United Wisconsin
Services, Inc. dated December 3, 1996, (the "Option Agreement"), a copy of which
is attached hereto as EXHIBIT A; and
WHEREAS, subsequent to the date of the Option Agreement, AMSG effected a
spin-off (the "Spin-off") of its managed care business to a new formed
corporation, Newco/UWS, Inc. n/k/a United Wisconsin Services, Inc. ("New UWSI");
WHEREAS, the Spin-off resulted in Employee having stock options with AMSG
for 530,000 shares of AMSG stock (the "AMZ Stock Options"), and stock options
with New UWSI for 530,000 shares of New UWSI stock (the "UWZ Stock Options");
and
WHEREAS, Company and Employee are parties to that certain Employment and
Noncompetition Agreement dated December 3, 1996, by and between AMSH and
Employee (the "Employment Agreement"), a copy of which is attached hereto as
EXHIBIT B; and
WHEREAS, Company has, at all times since December 3, 1996, been a
subsidiary of AMSG; and
WHEREAS, Employee desires to surrender the AMZ Stock Options in exchange
for an extended term of employment under the Employment Agreement; and
WHEREAS, the Company desires to accept such surrender and extend such
employment.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
agreements and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows.
1. SURRENDER OF THE OPTIONS. Employee hereby surrenders the AMZ Stock
Options to AMSG which consist of 530,000 options to purchase common
stock of AMSG pursuant to the Option Agreement, as amended as a
consequence of the Spin-off. Employee further acknowledges that the
AMZ Stock Options represent all of the options to purchase shares of
AMSG held by Employee and that this surrender of the AMZ Stock Options
fully waives Employee's rights in and to the AMZ Stock Options and all
rights derived therefrom or appertaining thereto, including, but not
limited to, any and all vested rights. Notwithstanding the foregoing,
the surrender hereunder of the AMZ Stock Options shall in no way
affect employee's rights under the UWZ Stock Options; it being the
understanding of the parties that whatever rights the Employee has
under the UWZ Stock Options shall remain in full force and effect.
2. AMENDMENT OF THE EMPLOYMENT AGREEMENT. In consideration of Employee's
surrender of the Options, the Company hereby extends Employee's
employment with the Company in accordance with the Amendment to
Employment and Noncompetition Agreement in the form attached hereto as
EXHIBIT C.
3. NOTICES. Any notice required to be given pursuant to the terms and
provisions hereof, unless otherwise indicated herein, shall be in
writing and shall be hand-delivered or sent by certified mail, return
receipt requested, postage prepaid as follows:
If to the Company:
American Medical Security Holdings, Inc.
0000 XXX Xxxx.
Xxxxx Xxx, XX 00000
Attn: General Counsel
If to American Medical Security Group, Inc.:
American Medical Security Group, Inc.
0000 XXX Xxxx.
Xxxxx Xxx, XX 00000
Attn: General Counsel
If to Employee:
Xxxxxxx X. Xxxxxxxx
Xxxxxxxx Limited Partnership
000 Xxxxxxx Xxxxx
Xxxxx Xxx, XX 00000
Notices shall be deemed given when mailed to the address indicated
above, or to such other address as either party may indicate to the
other by written notice as herein requested.
4. ENTIRE AGREEMENT. This Agreement contains the entire understanding and
the full and complete agreement of the parties, and supersedes and
replaces any prior understandings and agreements between the parties,
with respect to the subject matter hereof.
5. AMENDMENT. This Agreement may not be altered, amended, assigned or
modified except in writing, signed by all of the parties hereto.
6. ASSIGNABILITY. This Agreement and the rights and duties set forth
herein may not be assigned by the Employee or the Company, in whole or
in part. This Agreement shall be binding on and inure to the benefit
of each party and each party's respective heirs, legal
representatives, successors and permitted assigns.
7. SEVERABILITY. If any court of competent jurisdiction determines that
any provision of this Agreement is invalid or unenforceable, then such
invalidity or unenforceability shall have no effect on the other
provisions hereof, which shall remain valid, binding and enforceable
and in full force and effect, and such invalid or unenforceable
provision shall be construed in a manner so as to give the maximum
valid and enforceable effect to the intent of the parties expressed
therein.
8. WAIVER OF BREACH. The waiver by any party of the breach of any
provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach by any other party.
9. HEADINGS. Headings included in this Agreement are for convenience only
and are not intended to limit or expand the rights of the parties
hereto.
10. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Wisconsin without regard to conflicts of law
provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first set forth above.
AMERICAN MEDICAL SECURITY HOLDINGS, INC.
By: /S/ XXXXXXX X. XXXXX
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Sr. Vice President of Corporate Affairs,
Its: Secretary & General Counsel
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AMERICAN MEDICAL SECURITY GROUP, INC.
By: /S/ XXXXXXX X. XXXXX
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Sr. Vice President of Corporate Affairs,
Its: Secretary & General Counsel
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EMPLOYEE
/S/ XXXXXXX X. XXXXXXXX
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Xxxxxxx X. Xxxxxxxx
