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 Xxxxxxx X. 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 1496.4457 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-Finance and Chief Financial Officer. 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 104,228 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, 1,496.4457 shares of Class B Common
(104,228 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 $14,734.00 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, 616.5356 shares of Class B Common (42,942 shares of
Common Stock as reclassified), were vested, and on November 11, 1996,
879.9101 shares of Class B Common (61,286 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, 30%
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 that 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.
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PROVISIONS RELATING TO EMPLOYMENT
7. EMPLOYMENT. The Company agrees to employ Executive and Executive
accepts such employment for the period beginning as of September 25, 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-Finance and Chief Financial Officer of the
Company and shall have the normal duties, responsibilities and authority of a
Vice President-Finance and Chief Financial Officer, including, without
limitation, responsibility for all aspects of financial management, 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") as the
Board or the Compensation Committee of the Board may designate from time to
time, in its sole discretion. Following the end of each fiscal year, the
Board may, in its sole discretion, award a bonus to Executive in an amount
not to exceed 40% of Executive's Annual Base Salary for such year, as
determined by the Board based upon the Company's achievement of budgetary and
other objectives. Executive's Annual Base Salary for any partial year will
be prorated based upon the number of days elapsed in such year. 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
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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 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.
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,
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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.
(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
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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 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
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
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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.
"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
12
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.
"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
13
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
AND
Xxxxxxx, Carton & Xxxxxxx
Quaker Tower
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
IF TO THE EXECUTIVE:
Xxxxxxx X. Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 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
14
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.
(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/ Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. 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.
