AMENDMENT AGREEMENT
Exhibit 10.71
THIS AMENDMENT AGREEMENT (this “Amendment”) is made and entered into as of the
5th day of December, 2006, by and between MEDCATH CORPORATION, a Delaware corporation
(the “Company”), and XXXXXXX X. XXXXXXX (the “Executive”).
STATEMENT OF PURPOSE
The Company and the Executive are parties to equity award agreements (collectively, the
“Grant Agreements”) which granted the Executive stock options and restricted stock awards
under the Company’s equity incentive plans. The Grant Agreements provide that the stock options
and awards will become fully vested, exercisable and free of any resale restrictions upon a “Change
in Control” of the Company. The Grant Agreements currently include in the definition of “Change in
Control” a sale of voting control in the Company by Kohlberg Kravis Xxxxxxx & Co., LLC
(“KKR”) or Welsh, Carson, Xxxxxxxx & Xxxxx VII, L.P. (“WCAS”) or any their
affiliates.
On November 3, 2006, KKR, WCAS and their affiliates completed a secondary offering of a
portion of the shares of common stock held by them, and as a result, they ceased to own voting
control of the Company. The Company and the Executive desire to amend the definition of “Change in
Control” in the Grant Agreements to make it clear that a “Change in Control” will occur if any
person (other than KKR, WCAS and their affiliates) acquires voting control of the Company, whether
or not the acquisition of such voting control results from a sale of Company stock by KKR, WCAS or
their affiliates.
NOW, THEREFORE, the Company and the Executive hereby agree that the definition of “Change in
Control” in the Grant Agreements is amended effective as of the date hereof to read as follows:
“For purposes of this Agreement, “Change in Control” means:
(i) Sales of all or substantially all of the assets of the Company,
MedCath Holdings Corp. or MedCath Incorporated to an individual,
partnership, corporation, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority or other
entity (a “Person”) who is not an affiliate of Kohlberg Kravis
Xxxxxxx & Co., LLC (“KKR”) or Welsh, Carson, Xxxxxxxx & Xxxxx, VII,
L.P. (“WCAS” and together with KKR, the “Partnerships”);
(ii) Any “person” or “group” (as such terms are used in Section 13(d)
or 14(d) of the Securities Exchange Act of 1934 and the rules thereunder)
other than either of the Partnerships acquires and becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange
Act of 1934), directly or indirectly, of 50% or more of the voting stock of
the Company, MedCath Holdings Corp. or MedCath Incorporated; or
(iii) A merger or consolidation of the Company, MedCath Holdings Corp.
or MedCath Incorporated into another Person which is not an affiliate of
either of the Partnerships;
provided, however, that in the event that the Company, MedCath
Holdings Corp. or MedCath Incorporated is merged with another company controlled by
either of the Partnerships or their affiliates and, if the chief executive officer
of the surviving entity (or the ultimate parent) is not a person who has held the
position of chief executive officer of the Company for at least six months, such an
event shall be deemed a Change in Control.”
Except as expressly or by necessary implication amended hereby, the Grant Agreements shall
continue in full force and effect.
IN WITNESS WHEREOF, the Company and the Executive have caused this Amendment to be executed as
of the day and year first above written.
| MEDCATH CORPORATION |
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| By: | /s/ O. XXXXX XXXXXX | |||
| O. Xxxxx Xxxxxx, President | ||||
| EXECUTIVE |
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| /s/ XXXXXXX X. XXXXXXX | ||||
| Xxxxxxx X. Xxxxxxx | ||||
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