AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 99.3
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), entered into this 7th day of
February, 2008, by and between AmSurg Corp., a Tennessee corporation with its principal place of
business at 00 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000 (“Company”), and Xxxxx X. Xxxxxxx
(“Officer”), hereby amends and replaces in its entirety that certain Employment Agreement, dated
December 3, 1997, as amended (collectively, the “Original Agreement”), between the Company and
Officer.
W
I T N E S S E
T H:
WHEREAS, the Officer has been and currently is engaged by the Company to serve as Executive
Vice President and Chief Development Officer; and
WHEREAS, the Company and the Officer now desire to enter into this Agreement to update the
Original Agreement for changes permitted or required by Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”), and for certain other purposes.
NOW, THEREFORE, for and in consideration of the foregoing recitals, the mutual promises and
covenants set forth below and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Company and the Officer do hereby agree as follows:
1. EMPLOYMENT. The Company employs Officer and Officer hereby accepts employment
under the terms and conditions hereinafter set forth.
2. DUTIES. Officer is engaged as Executive Vice President and Chief Development
Officer of the Company. His powers and duties in that capacity shall be those normally associated
with the position of Executive Vice President and Chief Development Officer. During the term of
this Agreement, Officer shall also serve without additional compensation in such other offices of
the Company to which he may be elected or appointed by the Board of Directors.
3. TERM. Subject to provisions of termination as hereinafter provided, the initial
term of Officer’s employment under this Agreement shall terminate on December 31, 2008. On each
December 31 during the term of this Agreement, commencing on December 31, 2008, unless the Company
notifies Officer, pursuant to the following paragraph, that his employment under this Agreement
will not be extended, his employment under this Agreement shall automatically be extended for a one
(1) year period on the same terms and conditions as are set forth herein.
If the Company elects not to extend Officer’s employment under this Agreement, it shall do so
by notifying Officer in writing not less than sixty (60) days prior to the applicable December 31
of this Agreement. If the Company does not elect to extend Officer’s employment under this
Agreement other than for Cause (as hereinafter defined), Officer shall be considered to
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have been terminated without just Cause upon the expiration of his employment, and Officer will
receive the payments and benefits set forth in Section 8 hereof.
4. COMPENSATION. For all duties rendered by Officer, the Company shall pay Officer a
minimum salary of $367,500 per year, payable in equal installments at the Company’s regular payroll
periods. In addition thereto, each year, beginning January 1, 2009, Officer’s compensation will be
reviewed by the Board of Directors of the Company, or the Compensation Committee thereof, and after
taking into consideration performance and any other factors deemed relevant, the Committee may
increase Officer’s compensation. In the event the Company establishes a bonus plan for
compensating executive or managerial employees, Officer may participate in such a plan, provided
that any bonuses paid under such plan shall be in addition to the compensation provided for in this
Agreement. All compensation payable hereunder shall be subject to withholding for federal income
taxes, FICA and all other applicable federal, state and local withholding requirements.
5. EXTENT OF SERVICE. Officer shall devote substantially his entire time, attention
and energies to the business of the Company and shall not during the term of this Agreement take an
active role in any other business activity without the prior written consent of the Company; but
this shall not prevent Officer from making real estate or other investments of a passive nature or
devoting time to charitable and non-profit activities and service as a director on the board(s) of
directors of companies (whether public or private) other than the Company, in each case, in a
manner that does not interfere with the performance of his duties to the Company.
6. DISABILITY. In the case of illness or incapacity resulting in Officer being unable
to perform his services, the Company shall provide through insurance or on its own account coverage
for Officer that will provide payment of full salary and benefits for twelve (12) months, with the
payment of Officer’s salary to be paid on the same terms and with the same frequency as Officer’s
salary was paid prior to such incapacity or illness. For the period beyond twelve (12) months, the
Company shall provide such coverage to Officer as is then available to Officer in accordance with
Company policy. To the extent that payments are received from Worker’s Compensation or other
Company paid plans, the Company’s obligations will be reduced by amounts so received.
Notwithstanding the foregoing, Officer will be entitled to a payment under this Section 6
only (A) upon Officer’s “Separation from Service” (as such term is defined in Section 19
hereof) with the Company, or (B) if Officer, prior to such “Separation from Service” (i) is unable
to engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, (ii) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three (3) months under an accident and health
plan covering employees of the Company or (iii) is determined to be totally disabled by the Social
Security Administration.
7. TERMINATION FOR CAUSE; VOLUNTARY SEPARATION. For the purposes of this Agreement,
the Company shall have “Cause” upon (i) a felony conviction of Officer or the failure of Officer to
contest prosecution for a felony, (ii) conviction of a crime
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involving moral turpitude, or (iii) willful and continued misconduct or gross negligence by Officer
in the performance of his duties as an officer after written notice from the Company that
reasonably identifies the manner in which the Company believes that he has committed gross
negligence or willful misconduct and the failure by Officer to cure such failure within 30 days
after delivery of such notice. For purposes of this Section 7, “willful” and “gross
negligence” shall be determined by the Board of Directors of the Company. In making such
determination, the Board of Directors of the Company shall not act unreasonably or arbitrarily and
no act or omission by Officer shall be deemed willful if taken by Officer in a good faith belief
that such act or omission to act was in the best interests of the Company or if done at the express
direction of the Board. Upon Officer’s Separation from Service initiated by the Company for Cause
or the Officer’s voluntary Separation from Service, the Officer shall be entitled to his accrued
but unpaid salary upon the date of the Officer’s Separation from Service and the Officer shall not
be entitled to any other payments from the Company under this Agreement.
8. TERMINATION WITHOUT CAUSE. Officer’s employment under this Agreement may be
terminated by the Company at any time without Cause. Except as provided in Section 9
below, in the event Officer’s employment under this Agreement is terminated by the Company without
Cause, the Company shall pay Officer a lump sum payment equal to one year’s salary based upon the
annual base salary payable as of the date of the Separation from Service. Officer shall also
continue to be covered under health and life insurance plans of the Company for one (1) year.
Officer’s benefits shall be reduced, however, by any such coverage that Officer receives incident
to any employment during said one-year period. Receipt by Officer of the payment and other
benefits under this Section 8 shall be subject to Officer’s execution and delivery to the
Company of a General Release in form and substance reasonably acceptable to the Company and
Officer.
9. TERMINATION FOLLOWING A CHANGE IN CONTROL. Officer’s employment under this
Agreement may be terminated at any time within twelve (12) months following the occurrence of a
Change in Control (as defined in Section 19 herein) by Officer for Good Reason (as defined
in Section 19 herein). In the event Officer’s employment under this Agreement is
terminated by the Company without Cause within twelve (12) months following the occurrence of a
Change in Control or by Officer for Good Reason within twelve (12) months following the occurrence
of a Change in Control, in the event such Separation from Service occurs on or before September 30,
2010, the Company shall pay Officer a lump sum payment equal to three years’ salary, and in the
event such Separation from Service occurs after September 30, 2010, the Company shall pay Officer a
lump sum payment equal to one year’s salary, in each case based upon the annual base salary payable
as of the date of the Separation from Service. Officer shall also continue to be covered under
health and life insurance plans of the Company for three (3) years in the event Officer’s
employment under this Agreement is terminated by the Company without Cause within twelve (12)
months following the occurrence of a Change in Control or by Officer for Good Reason within twelve
(12) months following the occurrence of a Change in Control on or before September 30, 2010, and
one (1) year in the event Officer’s employment under this Agreement is terminated by the Company
without Cause within twelve (12) months following the occurrence of a Change in Control or by
Officer for Good Reason within twelve (12) months following the occurrence of a Change in Control
after September 30, 2010. Receipt by Officer of any payment or other benefits under this
Section 9
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shall be subject to Officer’s execution and delivery to the Company of a General Release in form
and substance reasonably acceptable to the Company and Officer.
10. RESTRICTIVE COVENANTS.
| (a) | Confidential Information. Officer agrees not to disclose, either during the time he is employed by the Company or following his Separation from Service initiated by the Company, any confidential information concerning the Company, including, but not limited to, customer lists, business plans, contract terms, financial costs, sales data, or business opportunities whether for existing, new or developing businesses. | ||
| (b) | Non-Compete. Upon Officer’s voluntary Separation from Service, upon Officer’s Separation from Service initiated by the Company for Cause, or upon Officer’s Separation from Service without Cause, Officer agrees not, without the written consent of the Company, to own, finance, operate, manage, design, build, solicit prospects for or otherwise enter into or engage in any phase of the ambulatory surgery business or any other business conducted by the Company in any state in which the Company is conducting business on the date of Officer’s Separation from Service from the Company, either as an individual for his own account, as a partner or joint venturer, or as an employee, agent, officer, director, consultant, owner or otherwise for a period of one (1) year following the date of Officer’s Separation from Service from the Company. | ||
| (c) | Non-Solicitation. Upon Officer’s Separation from Service or expiration of his employment, whether voluntary or involuntary, Officer agrees not to: |
| (i) | directly or indirectly solicit ambulatory surgery business or any other business of the sort being conducted by the Company as of the date of the termination or expiration of Officer’s employment from any entity, organization or person which has contracted with the Company, which has been doing business with the Company, from which the Company was soliciting business at the time of Officer’s Separation from Service, or from which the Officer knew or had reason to know that the Company was going to solicit business at the time of Officer’s Separation from Service, for a one-year period from the date of Officer’s Separation from Service from the Company; or | ||
| (ii) | directly or indirectly solicit employees of the Company to leave their employment with the Company for a one year period from the date of Officer’s Separation from Service or expiration of his employment with the Company. |
| (d) | Enforcement. Officer and the Company acknowledge and agree that any of the covenants contained in this Section 10 may be specifically enforced |
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| through injunctive relief, but such right to injunctive relief shall not preclude Company from other remedies which may be available to it. | |||
| (e) | Termination. Notwithstanding any provision to the contrary otherwise contained in this Agreement, the agreements and covenants contained in this Section 10 shall not terminate upon Officer’s Separation from Service from the Company or upon the termination of this Agreement under any other provision of this Agreement. |
11. VACATION. During each year of this Agreement, Officer shall be entitled to
vacation in accordance with Company policy in effect from time to time.
12. BENEFITS. In addition to the benefits specifically provided for herein, Officer
shall be entitled to participate in all benefit plans maintained by the Company for employees
generally according to the terms of such plans.
13. NOTICES. Any notice required or permitted to be given under this Agreement shall
be sufficient if in writing, and if sent by registered or certified mail to his residence in the
case of Officer, or to its principal office in the case of the Company.
14. WAIVER OF BREACH. The waiver by either party of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach by the other party.
15. ATTORNEYS’ FEES. In the event that either party initiates legal proceedings to
enforce any provision of this Agreement or resolve any dispute hereunder, and Officer is the
prevailing party, then the Company shall be responsible for payment of the Officer’s reasonable
attorneys’ fees incurred in connection therewith.
16. ASSIGNMENT. The rights and obligations of the Company under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of the Company. The
Officer acknowledges that the services to be rendered by him are unique and personal, and the
Officer may not assign any of his rights or delegate any of his duties or obligations under this
Agreement.
17. ENTIRE AGREEMENT. This instrument contains the entire agreement of the parties
with respect to the matters addressed herein. It 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. This Agreement shall be governed by the laws of
the State of Tennessee.
18. HEADINGS. The sections, subjects and headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation of this Agreement.
19. DEFINITIONS. For purposes of this Agreement the following definitions shall
apply:
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| a. | “Change in Control” shall mean the occurrence of any of the following: |
| (i) | the acquisition of at least a majority of the outstanding shares of Common Stock (or securities convertible into Common Stock) of the Company by any person, entity or group (as used in Section 13(d)(3) and Rule 13d-5(b)(1) under the Exchange Act); | ||
| (ii) | the merger or consolidation of the Company with or into another corporation or other entity, or any share exchange or similar transaction involving the Company and another corporation or other entity, if as a result of such merger, consolidation, share exchange or other transaction, the persons who owned at least a majority of the Common Stock of the Company prior to the consummation of such transaction do not own at least a majority of the Common Stock of the surviving entity after the consummation of such transaction; | ||
| (iii) | the sale of all, or substantially all, of the assets of the Company; or | ||
| (iv) | any change in the composition of the Board of Directors of the Company, such that persons who at the beginning of any period of up to two years constituted at least a majority of the Board of Directors of the Company, or persons whose nomination was approved by such majority, cease to constitute at least a majority of the Board of Directors of the Company at the end of such period. |
| b. | “Company” shall mean AmSurg Corp., any successor entity or their successors or assigns. | ||
| c. | “Good Reason” shall exist if after the occurrence of a Change in Control: |
(i) there is a material diminution in the nature or the scope of Officer’s
authority and responsibilities;
(ii) there is a material diminution in Officer’s rate of base salary or
overall compensation (for reasons other than Company performance or stock
price); or
(iii) the Company changes the principal location in which Officer is
required to perform services outside a fifty mile radius of such location
without Officer’s consent.
A termination under the circumstances listed in (i) to (iii) above shall be
for “Good Reason” following a Change in Control only if (A) Officer notifies
the Company of the existence of the condition that otherwise
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constitutes Good Reason within ninety (90) days of the initial existence of
the condition, (B) the Company fails to remedy the condition within thirty
(30) days following it’s receipt of Officer’s notice of Good Reason and (C)
Officer Separates from Service from the Company due to the condition within
12 months of the initial existence of such condition.
| d. | “Separation from Service” shall mean the date on which the Company and Officer reasonably anticipate that no further services will be performed after such date, or that the level of bona fide services Officer will perform after such date will permanently decrease to no more than 20% of the average level of bona fide services performed over the immediately preceding 36-month period. Whether a Separation from Service occurs shall be interpreted consistent with Section 1.409A-1(h) of the U.S. Treasury Regulations. |
20. DELAY OF PAYMENTS. It is intended that each installment of the payments provided
under this Agreement is a separate “payment” for purposes of Section 409A of the Code and that the
payments satisfy, to the greatest extent possible, the exemptions from the application of Section
409A of the Code provided under Sections 1.409A-1(b)(4), 1.409A-1(b)(9)(iii), and 1.409A-1(b)(9)(v)
of the Treasury Regulations. Notwithstanding anything to the contrary in this Agreement, if (i) on
the date Officer’s employment with the Company terminates the Officer is a “specified employee” (as
such term is defined under Section 1.409A-1(i)(1) of the Treasury Regulations) of the Company and
(ii) any payments to be provided to the Officer pursuant to this Agreement are or may become
subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or
penalties imposed under Section 409A of the Code if provided at the time otherwise required under
this Agreement, then such payments shall be delayed until the date that is six months after the
date of Officer’s Separation from Service from the Company. Any payments delayed pursuant to this
Section 20 shall be made in a lump sum on the first day of the seventh month following the
Officer’s Separation from Service and any remaining payments shall be made in accordance with the
terms of this Agreement.
21. DEEMED RESIGNATION. In the event Officer’s employment under this Agreement is
terminated for any reason, unless otherwise determined by the Board of Directors of the Company,
Officer shall be deemed, without any further action on the part of Officer, to have automatically
resigned as a director of the Company and an officer and director, if applicable, of all
subsidiaries of the Company.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
written.
| /s/ Xxxxx X. Xxxxxxx | ||||
| Xxxxx X. Xxxxxxx | ||||
| AMSURG CORP. |
||||
| /s/ Xxxxxxxxxxx X. Xxxxxx | ||||
| Name: | Xxxxxxxxxxx X. Xxxxxx | |||
| Title: | Chief Executive Officer | |||
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