AMENDED AND RESTATED
SENIOR MANAGEMENT AGREEMENT
THIS AMENDED AND RESTATED SENIOR MANAGEMENT AGREEMENT (the "Agreement")
is made as of September 5, 1996 and amended and restated as of November 11,
1996, between American Medserve Corporation, a Delaware corporation (the
"Company"), and J. Xxxxxxx Xxxxxxx ("Executive").
The Company and Executive entered into a Senior Management Agreement
dated September 5, 1996 (the "Original Senior Management Agreement") pursuant
to which Executive purchased, and the Company sold 750.7229 shares of Class B
Common Stock, par value $.01 per share (the "Class B Common") and pursuant to
which Executive was employed by the Company as the Company's Vice
President-Sales. Certain definitions are set forth in Section 15 of this
Agreement.
In November 1996, the Company adopted an Amended and Restated
Certificate of Incorporation, pursuant to which each share of Class B Common
was reclassified as 69.650323 shares of the Company's Common Stock, $.01 par
value (the "Common Stock"). Executive now holds 52,288 shares of Common
Stock (as reclassified). All such shares of Common Stock and all shares of
Common Stock hereafter acquired by Executive pursuant to this Agreement are
herein referred to as "Executive Stock."
Executive and the Company now wish to amend and restate the terms of the
Original Senior Management Agreement.
Certain provisions of the Original Senior Management Agreement as
amended and restated by this Agreement are intended for the benefit of, and
will be enforceable by, Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV, L.P. (the
"Investor"), and the Investor is an intended third party beneficiary of this
Agreement.
The parties hereto agree as follows:
PROVISIONS RELATING TO EXECUTIVE STOCK
1. PURCHASE AND SALE OF EXECUTIVE STOCK.
(a) On September 5, 1996, Executive purchased from the Company, and
the Company sold to Executive, 750.7229 shares of Class B Common (52,288
shares of Common Stock as reclassified). The purchase price per share of
Class B Common (the "Purchase Price") was $98.46.
(b) At the closing of the purchase and sale of the Class B Common
(the "Closing"), the Company delivered to the Executive stock certificates
evidencing the Class B Common purchased by the Executive, registered in the
Executive's name, upon payment of the purchase price thereof by a cashier's
or certified check, or by wire transfer of immediately
available funds to such account as designated by the Company in an amount not
less than $7,392.00 and by delivery of a promissory note substantially in the
form attached hereto as EXHIBIT A (the "Executive Note") in the amount of the
balance of the Purchase Price owed in respect of the Class B Common purchased
hereunder. Executive's obligations under the Executive Note are secured by a
pledge of such collateral as the Company shall approve.
(c) Within 30 days after the purchase of Executive Stock by
Executive from the Company, Executive made an effective election with the
Internal Revenue Service under Section 83(b) of the Internal Revenue Code and
the regulations promulgated thereunder substantially in the form of EXHIBIT C
attached hereto and notified the Company of such election.
(d) As of the date of the Original Senior Management Agreement,
Executive represented and warranted to the Company, and as of the date
hereof, Executive represents and warrants to the Company that:
(i) The Executive Stock to be acquired by Executive pursuant to
this Agreement will be acquired for Executive's own account and not
with a view to, or intention of, distribution thereof in violation of
the Securities Act, or any applicable state securities laws, and the
Executive Stock will not be disposed of in contravention of the
Securities Act or any applicable state securities laws.
(ii) Executive is sophisticated in financial matters and is able
to evaluate the risks and benefits of the investment in the Executive
Stock.
(iii) Executive is able to bear the economic risk of his
investment in the Executive Stock for an indefinite period of time
because the Executive Stock has not been registered under the
Securities Act and, therefore, cannot be sold unless subsequently
registered under the Securities Act or an exemption from such
registration is available.
(iv) Executive has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the offering of
the Executive Stock and has had access to such other information
concerning the Company as he has requested.
(v) This Agreement constitutes the legal, valid and binding
obligation of Executive, enforceable in accordance with its terms, and
the execution, delivery and performance of this Agreement by Executive
does not and will not conflict with, violate or cause a breach of any
agreement, contract or instrument to which Executive is a party or any
judgment, order or decree to which Executive is subject.
(e) As an inducement to the Company to issue the Executive Stock to
Executive, and as a condition thereto and in consideration for entering into
this Agreement, Executive acknowledges and agrees that:
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(i) Neither the issuance of any of the Executive Stock to
Executive nor any provision hereof shall entitle Executive to remain
in the employment of the Company and its Subsidiaries or affect the
right of the Company to terminate Executive's employment at any time
for any reason.
(ii) The Company shall have no duty or obligation to disclose to
Executive, and Executive shall have no right to be advised of, any
material information regarding the Company or any Subsidiary at any
time prior to, upon or in connection with the repurchase of the
Executive Stock upon the termination of Executive's employment with
the Company or any Subsidiary or as otherwise provided hereunder.
(f) As an inducement to the Company to issue the Executive Stock to
Executive, and as a condition thereto, Executive covenants and agrees to
enter into an Amended and Restated Stockholders Agreement in the form of
EXHIBIT D attached hereto.
2. VESTING OF EXECUTIVE STOCK.
The Executive Stock was vested as provided in this Section 2. On
September 5, 1996, 346.834 shares of Class B Common (24,157 shares of Common
Stock as reclassified) were vested, and on November 11, 1996, 403.8889 shares
of Class B Common (28,131 shares of Common Stock as reclassified) were vested
by determination of the Board.
3. REPURCHASE OPTION.
(a) Subject to Section 3(f) below, in the event Executive ceases to
be employed by the Company or its Subsidiaries for any reason (the
"Termination"), the Executive Stock, which is Repurchasable Stock (as defined
below) (whether held by Executive or one or more of Executive's transferees),
will be subject to repurchase by the Company pursuant to the terms and
conditions set forth in this Section 3 (the "Repurchase Option").
(b) The purchase price for each share of Repurchasable Stock will
be the fair market value for such shares as reasonably determined by the
Company's Board.
(c) The Board may elect, in its sole discretion, to purchase all or
any portion of the Repurchasable Stock by delivering written notice (the
"Repurchase Notice") to the holder or holders of the Repurchasable Stock
within 100 days after the Termination. The Repurchase Notice will set forth
the number of shares of Repurchasable Stock to be acquired from each holder,
the aggregate consideration to be paid for such shares and the time and place
for the closing of the transaction. The number of shares to be repurchased
by the Company shall first be satisfied to the extent possible from the
shares of Repurchasable Stock held by Executive at the time of delivery of
the Repurchase Notice. If the number of shares of Repurchasable Stock then
held by Executive is less than the total number of shares of Repurchasable
Stock which the Company has elected to purchase, the Company shall purchase
the remaining shares elected to be purchased from the other holder(s) of
Repurchasable Stock under this Agreement, pro rata according to the number of
shares of Repurchasable Stock held by such other holder(s) at the
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time of delivery of such Repurchase Notice (determined as nearly as
practicable to the nearest share). The number of shares of Repurchasable
Stock to be repurchased hereunder will be allocated among Executive and the
other holders of Repurchasable Stock (if any) pro rata according to the
number of shares of Repurchasable Stock to be purchased from such person.
(d) If for any reason the Company does not elect to purchase all of
the Repurchasable Stock pursuant to the Repurchase Option, the Investor shall
be entitled, in its sole discretion, to exercise the Repurchase Option for
the shares of Repurchasable Stock the Company has not elected to purchase
(the "Available Shares"). As soon as practicable after the Company has
determined that there will be Available Shares, but in any event within 60
days after the Termination, the Company shall give written notice (the
"Option Notice") to the Investor setting forth the number of Available Shares
and the purchase price for the Available Shares. The Investor may elect to
purchase any or all of the Available Shares by giving written notice to the
Company within thirty days after the Option Notice has been given by the
Company. As soon as practicable, and in any event within ten days after the
expiration of the thirty day period set forth above, the Company shall notify
each holder of Repurchasable Stock as to the number of shares being purchased
from such holder by the Investor (the "Supplemental Repurchase Notice"). At
the time the Company delivers the Supplemental Repurchase Notice to the
holder(s) of Repurchasable Stock, the Company shall also deliver written
notice to the Investor setting forth the number of shares the Investor is
entitled to purchase, the aggregate purchase price and the time and place of
the closing of the transaction.
(e) The closing of the purchase of the Repurchasable Stock pursuant
to the Repurchase Option shall take place on the date designated by the
Company in the Repurchase Notice or Supplemental Repurchase Notice, which
date shall not be more than thirty days nor less than five days after the
delivery of the later of either such notice to be delivered. The Company
and/or the Investor will pay for the Repurchasable Stock to be purchased
pursuant to the Repurchase Option by delivery of a check, a wire transfer of
funds and/or a note (payable in three equal annual installments commencing on
the first anniversary of such closing and bearing interest at the corporate
base rate as determined by the First National Bank of Chicago at the time the
note is issued) in form and substance determined by the Board in good faith
in the aggregate amount of the purchase price for such shares. In addition,
the Company may pay the purchase price for such shares by offsetting amounts
outstanding under the Executive Note issued to the Company hereunder and any
other debts owed by Executive to the Company. The Company and the Investor
will be entitled to receive customary representations and warranties from the
sellers regarding such sale and to require all sellers' signatures be
guaranteed.
(f) Notwithstanding anything to the contrary contained in this
Agreement, all repurchases of Repurchasable Stock by the Company shall be
subject to applicable restrictions contained in the Delaware General
Corporation Law and in the Company's and any Subsidiary's debt and equity
financing agreements. If any such restrictions prohibit the repurchase of
Repurchasable Stock hereunder which the Company is otherwise entitled to
make, the Company may make such repurchases as soon as it is permitted to do
so under such restrictions.
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(g) PERFORMANCE BASED REPURCHASABLE STOCK.
(i) Except as otherwise provided in Section 3(g)(ii) below,
25% of the shares of Executive Stock purchased hereunder (the
"Performance Based Repurchasable Stock") shall cease to be
Repurchasable Stock on the seventh anniversary of the Start Date, if
as of such date Executive is still employed by the Company or any
Subsidiary, provided that if at the end of any of the first five
fiscal years of the Company following the date hereof, both the
Company's EBITDA and EBITDA Percentage equal or exceed 90% of the
Company's Projected EBITDA and Projected EBITDA Percentage, as
determined in good faith by the Board, respectively, for such fiscal
years, then 20% of the Performance Based Repurchasable Stock shall
cease to be Repurchasable Stock as of the end of each fiscal year in
which such requirement is satisfied. In the event the Company does
not satisfy the requirement for 20% of the Performance Based
Repurchasable Stock to cease to be Repurchasable Stock as of the end
of any fiscal year, IF (i) the sum of the Company's EBITDA for the
fiscal year in which such requirement is not met and the immediately
succeeding fiscal year equals or exceeds 90% of the sum of the
Company's Projected EBITDA for such two fiscal years, and (ii) the
average of the Company's EBITDA Percentages for such two years
equals or exceeds 90% of the average of the Company's Projected
EBITDA Percentages for such two fiscal years, THEN 40% of the
Performance Based Repurchasable Stock shall cease to be
Repurchasable Stock as of the end of the second of such two fiscal
years.
(ii) In the event Executive ceases to be employed by the
Company for any reason, then any Performance Based Repurchasable
Stock which has not ceased to be Repurchasable Stock on or prior to
such date shall remain Repurchasable Stock. Upon the occurrence of
a Sale of the Company while the Executive is still employed by the
Company or its Subsidiaries, all Performance Based Repurchasable
Stock which is still Repurchasable Stock shall cease to be
Repurchasable Stock at the time of such event.
(h) TIME BASED REPURCHASABLE STOCK.
(i) Except as otherwise provided in Section 3(h)(ii) below, 45%
of the shares of Executive Stock purchased hereunder (the "Time Based
Repurchasable Stock") will cease to be Repurchasable Stock in
accordance with the following schedule, if as of each such date
Executive is still employed by the Company or any Subsidiary:
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Cumulative Percentage of
Time Based
Date Repurchasable Stock
---- ------------------------
At the Start Date 20%
1st Anniversary of the Start Date 36%
2nd Anniversary of the Start Date 52%
3rd Anniversary of the Start Date 68%
4th Anniversary of the Start Date 84%
5th Anniversary of the Start Date 100%
(ii) If Executive ceases to be employed by the Company or its
Subsidiaries on any date prior to an anniversary date listed above,
the cumulative percentage of Time Based Repurchasable Stock to cease
being Repurchasable Stock will be determined on a pro rata basis
according to the number of days elapsed since the prior anniversary
date. Upon the occurrence of a Sale of the Company while Executive is
still employed by the Company or its Subsidiaries, all Time Based
Repurchasable Stock which has not yet ceased to be Repurchasable Stock
will cease to be Repurchasable Stock at the time of such event. Any
Time Based Repurchasable Stock which has not ceased to be
Repurchasable Stock as of the date Executive ceases to be employed by
the Company or its subsidiaries shall remain Repurchasable Stock.
(i) Repurchasable Stock shall consist of Performance Based
Repurchasable Stock and Time Based Repurchasable Stock until such shares
cease to be Repurchasable Stock in accordance with the provisions of Sections
3(g) and 3(h).
4. RESTRICTIONS ON TRANSFER.
(a) TRANSFER OF EXECUTIVE STOCK. Until 100 days following
Termination, Executive shall not be permitted to sell, transfer, assign,
pledge or otherwise dispose of (whether with or without consideration and
whether voluntarily or involuntarily or by operation of law) any interest in
any Repurchasable Stock (a "Transfer"), other than to the Company or the
Investor pursuant to Section 3 hereof.
(b) CERTAIN PERMITTED TRANSFERS. The restrictions contained in
this Section 4 will not apply with respect to (i) transfers of shares of
Repurchasable Stock pursuant to applicable laws of descent and distribution
or (ii) transfers of shares of Repurchasable Stock among Executive's Family
Group; provided that such restrictions will continue to be applicable to the
Repurchasable Stock after any such transfer and the transferees of such
Repurchasable Stock will have agreed in writing to be bound by the provisions
of this Agreement.
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5. ADDITIONAL RESTRICTIONS ON TRANSFER.
(a) LEGEND. The certificates representing the Executive Stock will
bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
AS OF SEPTEMBER 5, 1996, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS AND
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION
THEREUNDER AND IN COMPLIANCE WITH STATE SECURITIES LAWS. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS AND
CERTAIN OTHER AGREEMENTS SET FORTH IN A SENIOR MANAGEMENT AGREEMENT
BETWEEN THE ISSUER (THE "COMPANY") AND THE ORIGINAL HOLDER HEREOF
DATED AS OF SEPTEMBER 5, 1996 AND AMENDED AND RESTATED AS OF NOVEMBER
11, 1996. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER
HEREOF AT THE COMPANY'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
(b) OPINION OF COUNSEL. No holder of Executive Stock may sell,
transfer or dispose of any Executive Stock (except pursuant to an effective
registration statement under the Securities Act) without first delivering to
the Company an opinion of counsel (reasonably acceptable in form and
substance to the Company) that neither registration nor qualification under
the Securities Act and applicable state securities laws is required in
connection with such transfer.
6. INTENTIONALLY OMITTED.
PROVISIONS RELATING TO EMPLOYMENT
7. EMPLOYMENT. The Company agrees to employ Executive and Executive
accepts such employment for the period beginning as of January 30, 1995 (the
"Start Date") and ending upon termination pursuant to Section 9 hereof (the
"Employment Period"). During the Employment Period, Executive shall serve as
the Vice President-Sales of the Company and shall have the normal duties,
responsibilities and authority of a Vice President-Sales, including, without
limitation, responsibility for all aspects of national sales activity,
subject to the power of the Board and the CEO to supervise, and to override
any related actions.
8. SALARY, BONUS AND BENEFITS. During the Employment Period, the
Company will pay Executive a base salary (the "Annual Base Salary") and a
bonus ("Revenue Incentive
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Bonus") payable quarterly of up to 3% of revenue growth over the comparable
quarter from the prior year in each case as the Board or the Compensation
Committee of the Board may designate from time to time, in its sole
discretion. Executive will also receive an automobile allowance of $550 per
month and be eligible to participate in group insurance, vacation and
retirement savings (401(k)) plans as the Company may make available to its
executives.
9. TERMINATION.
(a) The Employment Period will continue until Executive's
resignation, disability (as reasonably determined by the Board or the CEO) or
death or until the Board or the CEO determines in its good faith judgment
that termination of Executive's employment is in the best interests of the
Company.
(b) If the Company terminates Executive's employment without Cause,
the Company shall provide at least six months written notice to the Executive
prior to the effectiveness of such termination (the "Notice Period");
provided, however, that if the Company terminates Executive's employment
without Cause and determines that Executive's employment with the Company
shall immediately cease, Executive shall be entitled to receive payments
(payable in monthly installments) equal to the lower of (i) the rate of the
Annual Base Salary for six months following the date of such termination or
(ii) the rate of the Annual Base Salary for the portion of the Notice Period
during which Executive is no longer employed by the Company. Amounts payable
by the Company to Executive pursuant to this Section 9(b) shall be reduced by
the amount of any payments received by Executive from other employment
(whether as an employee, consultant or otherwise) during or in respect of the
period in which payments are being made pursuant to this Section 9(b), and
Executive hereby agrees that upon the termination of Executive, Executive
shall use his best efforts to seek employment with similar responsibilities
and similar compensation to the position with the Company contemplated by the
terms of this Agreement. The Company may cease making payments to Executive
pursuant to this Section 9(b) at any time after which Executive breaches any
of the provisions of Section 10 or 11; provided that no such cessation shall
relieve Executive of his obligations under Section 10 or 11.
(c) If Executive's employment with the Company is terminated by the
Company for Cause or as a result of a voluntary termination by Executive,
then Executive's right to receive the Annual Base Salary, Revenue Incentive
Bonus and other benefits shall cease on the date of such termination and no
severance payments shall be made.
(d) For purposes of this Agreement, "Cause" shall mean (i) the
commission of a felony or the commission of any other act which is materially
injurious to the Company or any Subsidiary involving dishonesty, disloyalty
or fraud with respect to the Company or any Subsidiary, (ii) gross negligence
or willful misconduct with respect to the Company or any Subsidiary which is
materially injurious to the Company or any Subsidiary, (iii) willful,
substantial and repeated failure to perform duties commensurate with his
position as reasonably directed in writing by the Board or the CEO in good
faith, or (iv) any other material breach of this Agreement which is not cured
within 21 days after written notice thereof to Executive.
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10. CONFIDENTIAL INFORMATION. Executive acknowledges that the
information, observations and data obtained by him during the course of his
performance under this Agreement concerning the business and affairs of the
Company and its affiliates are the property of the Company. Therefore,
Executive agrees that he will not disclose to any unauthorized person or use
for his own account or for the account of any third party any of such
information, observations or data without the Board's written consent, unless
and to the extent that the aforementioned matters become generally known to
and available for use by the public other than as a result of Executive's
acts or omissions to act. Executive shall use his best efforts to prevent
the unauthorized misuse, espionage, loss or theft of the aforementioned
matters. Executive agrees to deliver to the Company at the termination of
his employment, or at any other time the Company may request in writing, all
memoranda, notes, plans, records, reports and other documents (and copies
thereof) relating to the business of the Company and its affiliates
(including, without limitation, all acquisition prospects, lists and contact
information) which he may then possess or have under his control.
11. NONCOMPETITION AND NONSOLICITATION.
(a) NONCOMPETITION. Executive acknowledges that in the course of
his employment with the Company he will become familiar with the Company's
trade secrets and with other confidential information concerning the Company
and that his services will be of special, unique and extraordinary value to
the Company. Therefore, in consideration of the opportunity to purchase
Executive Stock and in consideration of the other rights given to Executive
hereunder, Executive agrees that, during the Employment Period and (i) if
Executive's employment is terminated by the Company for Cause or as a result
of voluntary termination by Executive, for two years thereafter, or (ii) if
Executive's employment is terminated for any other reason, the period during
which the Company is required (without giving effect to the last two
sentences of Section 9(b)) to make payments to Executive pursuant to Section
9(b) (the "Noncompete Period"), he shall not directly or indirectly own,
manage, control, participate in, consult with, render services for, or in any
manner engage in any business competing with the businesses of the Company or
its Subsidiaries as such businesses exist on the date of the termination of
Executive's employment, within those limited states or metropolitan areas in
which the Company is engaged in business (or in which the Company is in the
process of attempting to engage in business) during the Employment Period or
at the time of termination of Executive's employment.
(b) NONSOLICITATION. During the Employment Period and for two
years thereafter, Executive shall not directly or indirectly through another
person or entity (i) induce or attempt to induce any employee of the Company
or any Subsidiary to leave the employ of the Company or such Subsidiary, or
in any way interfere with the relationship between the Company or any
Subsidiary and any employee thereof, (ii) hire any person who was an employee
of the Company or any Subsidiary at any time during the Employment Period, or
(iii) induce or attempt to induce any customer, supplier, licensee or other
business relationship of the Company or any Subsidiary to cease doing
business with the Company or such Subsidiary, or in any way interfere with
the relationship between any such customer, supplier, licensee or business
relationship and the Company or any Subsidiary.
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(c) ENFORCEMENT. If, at the time of enforcement of Section 10 or 11
of this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum duration, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area and that
the court shall be allowed to revise the restrictions contained herein to cover
the maximum duration, scope and area permitted by law. Because Executive's
services are unique and because Executive has access to confidential
information, the parties hereto agree that money damages would be an inadequate
remedy for any breach of this Agreement. Therefore, in the event of a breach or
threatened breach of this Agreement, the Company or its successors or assigns
may, in addition to other rights and remedies existing in their favor, apply to
any court of competent jurisdiction for specific performance and/or injunctive
or other relief in order to enforce, or prevent any violations of, the
provisions hereof (without posting a bond or other security).
12. CONFIDENTIAL INFORMATION OF PRIOR EMPLOYERS.
(a) DISCLOSURE AND USE. Executive acknowledges and agrees that
Executive has been employed based upon personal and professional attributes
attained through his experience and education and that his employment with the
Company is not predicated on any implied or explicit understanding or inference
that Executive shall disclose or use any proprietary or confidential information
that Executive has acquired or been made privy to as a result of his prior
employment or relationships. Executive acknowledges and affirms that he has
been directed by the Company not to display or otherwise make available to the
Company, directly or indirectly (including by undisclosed incorporation in his
work product), any such proprietary or confidential information. Executive
represents and warrants that: (i) he has not misappropriated, infringed or
otherwise improperly disclosed or used any proprietary or confidential
information (in whatever form or medium) that he has acquired or been made privy
to as a result of his prior employment or relationships; (ii) no claim by any of
Executive's former employers or any other third parties alleging
misappropriation, infringement or improper disclosure or use of same has been
made, is currently outstanding or is threatened, and there are no grounds
therefor; and (iii) no injunction or judgment has been imposed on Executive that
restricts him from disclosing or using same.
(b) PRIOR AGREEMENTS. Executive represents and warrants that:
(i) Executive has provided the Company with copies of any and all written
agreements or other arrangements that restrict or limit his conduct or
activities; (ii) Executive has no oral agreements or constraints with respect to
his conduct or activities; and (iii) all such written and oral agreements,
arrangements and constraints are listed on SCHEDULE 14(b) attached hereto and
incorporated herein. Executive recognizes that the Company is not in a position
to evaluate the scope or extent of his obligations and agreements and is not a
party to such agreements. His disclosure of such agreements in no way creates
an imputation or assumption of such agreements to or by the Company.
(c) PERFORMANCE OF EMPLOYMENT DUTIES. The Company has explained to
Executive the scope and responsibilities of his employment, and Executive hereby
represents and warrants that the performance of his employment duties shall not
place him in breach or violation
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of any pre-existing fiduciary duty, covenant, agreement, restriction or
limitation. Executive acknowledges and agrees that Executive has been
directed by the Company not to engage in any conduct or activity that would
cause him to violate any pre-existing fiduciary duty, covenant, agreement,
restriction or limitation and that, if requested to engage in any activity or
job function or to disclose any information that would result in any such
violation, Executive shall report such request immediately and is relieved
from any obligation to comply with such request.
13. NO CONFLICTS. Executive represents and warrants that there is no
other contract in existence, written or oral, between him and any third party
that relates to the grant or assignment to others of any interest in
intellectual property hereafter contributed to, or conceived or made by, him and
that his performance of his duties to the Company will not place him in breach
of any existing agreement.
GENERAL PROVISIONS
GENERAL PROVISIONS
14. CODE SECTION 280G. Notwithstanding any provision in this
Agreement to the contrary, if all or any portion of the payments or benefits
received or realized by Executive either alone or together with other
payments or benefits which Executive receives or realizes or is then entitled
to receive or realize from the Company or any of its affiliates would
constitute a "parachute payment" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (or any successor section) and the
regulations promulgated thereunder (the "Code") and/or any corresponding and
applicable state law provision, such payments or benefits provided to
Executive shall be reduced by reducing the amount of payments or benefits
payable to Executive pursuant to Section 9 of this Agreement to the extent
necessary so that no portion of such payments shall be subject to the excise
tax imposed by Section 4999 of the Code and any corresponding and/or
applicable state law provision; provided, however, that such reduction shall
only be made if, by reason of such reduction, Executive's net after tax
benefit shall exceed the net after tax benefit if such reduction were not
made. For purposes of this Section 14, "net after tax benefit" shall mean
the sum of (i) the total amount received or realized by Executive pursuant to
this Agreement that would constitute a "parachute payment" within the meaning
of Section 280G of the Code and any corresponding and applicable state law
provision plus (ii) all other payments or benefits which Executive receives
or realizes or is then entitled to receive or realize from the Company and
any of its affiliates that would constitute a "parachute payment" within the
meaning of Section 280G of the Code and any corresponding and applicable
state law provision, less (iii) the amount of federal or state income taxes
payable with respect to the payments or benefits described in (i) and (ii)
above calculated at the maximum marginal individual income tax rate for each
year in which payments or benefits shall be realized by Executive (based upon
the rate in effect for such year as set forth in the Code at the time of the
first receipt or realization of the foregoing), less (iv) the amount of
excise taxes imposed with respect to the payments or benefits described in
(i) and (ii) above by Section 4999 of the Code and any corresponding and
applicable state law provision.
15. DEFINITIONS.
"BOARD" means the Company's Board of Directors.
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"CEO" means the Company's Chief Executive Officer.
"EBITDA" for any fiscal period of the Company means the Company's
consolidated earnings from continuing operations before interest, taxes,
depreciation and amortization for such fiscal period, as determined in
accordance with GAAP.
"EBITDA PERCENTAGE" as of the end of any fiscal period of the Company means
the quotient of (a) the Company's EBITDA for such period divided by (b) the sum
of (1) the monthly average amount of equity invested (not including retained
earnings) in the Company during such period plus (2) the monthly average amount
of Indebtedness of the Company during such period, all as determined in
accordance with GAAP.
"EXECUTIVE'S FAMILY GROUP" means Executive's spouse and descendants
(whether natural or adopted) and any trust solely for the benefit of Executive
and/or Executive's spouse and/or descendants. Executive Stock will also include
shares of the Company's capital stock issued with respect to Executive Stock by
way of a stock split, stock dividend or other recapitalization.
"EXECUTIVE STOCK" will continue to be Executive Stock in the hands of any
holder other than Executive (except for the Company and the Investor and except
for transferees in a Public Sale), and except as otherwise provided herein, each
such other holder of Executive Stock will succeed to all rights and obligations
attributable to Executive as a holder of Executive Stock hereunder.
"GAAP" means generally accepted accounting principles, as in effect from
time to time.
"INDEBTEDNESS" shall mean at a particular time, without duplication,
(i) indebtedness for borrowed money or for the deferred purchase price of
property or services in respect of which any Person is liable, as obligor or
otherwise (other than trade payables and other current liabilities incurred in
the ordinary course of business) or any commitment by which any Person assures a
creditor against loss, including contingent reimbursement obligations with
respect to letters of credit and (ii) indebtedness guaranteed in any manner by
any Person, including guarantees in the form of an agreement to repurchase or
reimburse.
"PROJECTED EBITDA" for any fiscal period of the Company shall mean the
EBITDA of the Company for such fiscal period set forth on Appendix 1 attached
hereto.
"PROJECTED EBITDA PERCENTAGE" for any fiscal period of the Company shall
mean the EBITDA Percentage of the Company for such fiscal period set forth on
Appendix 1 attached hereto.
"PUBLIC SALE" means any sale pursuant to a registered public offering under
the Securities Act or any sale to the public pursuant to Rule 144 promulgated
under the Securities Act effected through a broker, dealer or market maker.
12
"QUALIFIED PUBLIC OFFERING" means the sale in an underwritten public
offering registered under the Securities Act of shares of the Company's Common
Stock having an aggregate offering value of at least $30 million.
"SALE OF THE COMPANY" means any transaction or series of related
transactions pursuant to which any person or entity (other than the Investor)
acquires (i) capital stock of the Company possessing the voting power to elect a
majority of the Board (whether by merger, consolidation, reorganization,
combination, sale or transfer of the Company's capital stock or otherwise) or
(ii) all or substantially all of the Company's assets determined on a
consolidated basis.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time.
"START DATE" shall have the meaning set forth in Section 7.
"STOCKHOLDERS AGREEMENT" means the Amended and Restated Stockholders
Agreement by and among the Company, the Investor, Xxxxxxx X. Xxxxxxxx,
Xxxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxxx, J. Xxxxxxx Xxxxxxx, Xxxxxx X. Xxxxxx,
Xxxxxx X. Xxxx, Xxxxx X.X. Xxxxxx, Xxxxxxx X. Xxxxxxx, Xxxx X. Xxxxxxx,
Xxxxxxx X. Xxxxx, Xxxx Xxxx Xxxxx, Sterling Acquisition Partners, Pharmed, Inc.,
Xxxxxx X. Xxxxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxxxxx, Xxx X. Xxxxxxxxx, Xxxxx X.
Xxxxxxx, Xxxxxx X. Xxxxx, Xxxxx Xxxxxxxx, Pharmed of Baton Rouge, Xxxxxx X.
Xxxxxxxxxxx, Xxxxxx X. Xxxxxx and Xxxxxx X. Xxxx.
"SUBSIDIARY" means any corporation of which the Company owns securities
having a majority of the ordinary voting power in electing the board of
directors directly or through one or more subsidiaries.
16. NOTICES. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested) or sent by reputable overnight
courier service (charges prepaid) to the recipient at the address below
indicated:
IF TO THE COMPANY:
American Medserve Corporation
Park Lake Center
000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: CEO
WITH A COPY TO:
Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV, L.P.
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
13
AND
Xxxxxxx, Carton & Xxxxxxx
Quaker Tower
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
IF TO THE EXECUTIVE:
J. Xxxxxxx Xxxxxxx
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxx 00000
IF TO THE INVESTOR:
Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV, L.P.
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
WITH A COPY TO:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
17. MISCELLANEOUS.
(a) TRANSFERS IN VIOLATION OF AGREEMENT. Any Transfer or attempted
Transfer of any Executive Stock in violation of any provision of this Agreement
shall be void, and the Company shall not record such Transfer on its books or
treat any purported transferee of such Executive Stock as the owner of such
stock for any purpose.
(b) SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
14
(c) COMPLETE AGREEMENT. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(d) COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(e) SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
this Agreement shall bind and inure to the benefit of and be enforceable by
Executive, the Company, the Investor and their respective successors and assigns
(including subsequent holders of Executive Stock); provided that the rights and
obligations of Executive under this Agreement shall not be assignable except in
connection with a permitted transfer of Executive Stock hereunder.
(f) GOVERNING LAW. All questions concerning the construction,
validity and interpretation of this Agreement and the exhibits and schedules
hereto shall be governed by and construed in accordance with the internal laws
of the State of Delaware, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware.
(g) OTHER AGREEMENTS. Provisions pertaining to Executive's co-sale
rights are set forth in that certain Amended and Restated Stockholders Agreement
dated as of August 23, 1996 and provisions pertaining to Executive's
registration rights are set forth in that certain Registration Agreement dated
as of August 23, 1996.
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first written above.
AMERICAN MEDSERVE CORPORATION
By:/s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Its: Chief Executive Officer
-----------------------
/s/ J. Xxxxxxx Xxxxxxx
-------------------------
J. Xxxxxxx Xxxxxxx
Agreed and Accepted:
GOLDER, THOMA, XXXXXXX, XXXXXX FUND IV, L.P.
By: GTCR IV, L.P.
Its General Partner
By: Golder, Thoma, Cressey, Rauner, Inc.
Its General Partner
By: /s/ Xxx X. Xxxxxxxx
---------------------
Its:
----------------------
16
SCHEDULE 14(b)
None
APPENDIX 1
Projected
Year Projected EBITDA EBITDA Percentage
---- ---------------- -----------------
1996 $5,368,000 12.75%
1997 $9,337,000 16.95%
1998 $13,976,000 20.68%
1999 $19,387,000 24.43%
2000 $24,233,750 28.00%
NOTE: Projected EBITDA Percentage will be recalculated to reflect any
significant recapitalization, including a Qualified Public
Offering, of the Company.
